[Stage Direction]
Hon. J. E. MICHAUD (Minister of Fisheries) presented the first report of the special committee on the defence of Canada regulations, and moved that the report be concurred in.
Motion agreed to.

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


Mr. CHURCH:: 1.	What is the direct loss in man-hours and petrol in requiring soldiers, men and women's army, munitions workers and others to be used in patriotic campaigns?
2.	Are any steps being taken to prevent this further cost and added expense to the victory and other loan campaigns?


Mr. RALSTON:: It would be quite impossible to provide an intelligent answer to this question. In order to attempt an answer we would have to consider the Red Cross campaigns, war loan campaigns, war savings certificate campaigns, recruiting campaigns and all sorts of special occasions on which the army are asked to furnish personnel and equipment.


Mr. CHURCH:: The practice referred to
in the question is being carried out in England to save the expenses of these loans. An estimate was given to parliament.


James Layton Ralston: The practice has been
carried out here. This is being done at the insistent request of representatives of these organizations. I remember particularly a delegation that came down from my hon. friend's city in connection with the war loan committee and made representations that, what was being proposed was not sufficient, that we should do a good deal more in providing personnel and equipment, which we did. To estimate the number of gallons of petrol and the number of man-hours used in connection with these matters would be quite impossible.


Thomas Langton Church: Cut out these Hollywood
methods of selling bonds, and save expense.
Question dropped.



CANADIAN FORCES-EXPORTS OF BEER AND LIQUOR TO FORCES OVERSEAS

Mr. CASTLEDEN:: 1.	Have any permits been granted to navy, armv and air force institute to export beer and spirituous liquor to Canadian forces overseas?
2.	If so, what are the amounts of each shipment so permitted during 1940 and 1941, respectively ?


Mr. MacKINNON (Edmonton West):: 1.	The Navy, Army and Air Force Institute is the canteen organization of the United Kingdom armed forces. No information available as to what extent the Canadian forces use their facilities, and no permits have been issued to them for the exportation of beer and spirituous liquors for the use of Canadian forces.
2.	Answered by No. 1.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CHURCH:: 1.	What has been the yearly cost to Canada of the League of Nations since its inception to date?
2.	Where are its head offices and who are the officers in charge?
3.	Does it still function, and how was the vote for 1941 spent?


MILITARY SERVICE-CANADIANS IN UNITED STATES
Mr. MacKINNON (Kootenay East):: 1.	How	many	Canadians	resident	in	the
United States have been made subject to the draft laws of that nation?
2.	How	many	Canadians	resident	in	the
United States have been actually drafted for service in the armed forces of that nation?
3.	Are such persons given the right to elect to return to Canada and enter the armed forces of Canada?
4.	If so, how many have done so?
5.	Are those who do return to Canada automatically enlisted in the active armed forces of Canada and thus liable to service overseas or in any theatre of war?



PLEBISCITE-COST OF TAKING VOTE

Mr. BLACK (Cumberland):: What were the costs of taking the plebiscite vote, (a) printing, (b) advertising, (c) other head office expenses, (d) expenses in constituencies, (e) total payments to date, (f) estimate accounts not paid, (g) total estimated costs?
Motions for Papers



CANADIAN ARMY-SUMMER CLOTHING

Mr. CHURCH:: 1.	When will summer clothing be issued to the men of the army in training at (a) Camp Borden, (b) Toronto exhibition grounds, (e) Petawawa, (d) other army camps in military districts 1, 2 and 3?
2.	How many are now without the same in each of these districts?
3.	What does the summer issue consist of?



B.C-A.F.-SUMMER CLOTHING

Mr. CHURCH:: 1.	How many members of the Royal Canadian Air Force at Toronto, Trenton, Camp Borden, Ottawa and other camps in Ontario, have been issued summer clothing and uniforms?
2.	How many have yet to be issued such summer clothing?
ONTARIO MILITARY TRAINING CENTRES-C.o's AND DEPARTMENTAL HEADS


Mr. WINKLER:: 1.	At the R.C.C. signals- training centre at Barriefield, at the R.C. ordnance corps training depot at Long Branch, and at the army trade school at Hamilton, who are the commanding officers and departmental heads?
2.	What are the technical qualifications of each ?
3.	What were their pre-war occupations in each case?



MOTIONS FOR PAPERS


Thomas Langton Church: For a copy of all correspondence, letters, cables, telegrams, orders in council, reports, other documents, between the government of Canada, or any officer thereof, and the government of Great Britain, or any officer thereof, or any other dominion, regarding the setting up of an empire war cabinet, similar to that in the last war, in relation to joint action, and a united front in the conduct and strategy of this war, by Great Britain and the dominions


Mr. MACKENZIE KING:: Mr. Speaker, to comply with this request would necessitate obtaining the consent of all the commonwealth governments concerned to table the correspondence, which is of a highly confidential character, and I do not think the request would be met if it were made. In the circumstances I do not think it would be in the public interest even to make the request at the present time.


Thomas Langton Church: May I respectfully suggest to the Prime Minister that he reconsider this? Australia's Prime Minister has asked for it for a year. Recently he has complained with respect to conditions in the far east, that decisions have been made against her interests without Australia or the other dominions being 
consulted. Unless there is an empire war cabinet there is no joint consultation for united action in this war.
Motion dropped.



CANADIAN FORCES-ENLISTMENTS IN FIRST FIVE MONTHS OF 1942

Mr. HAZEN:: For a return showing the number of men who have enlisted in, (a) the navy, (b) the army, (c) the air force, during each of the first five months of 1942.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. GEORGE BLACK (Yukon):: Mr. Speaker, I would like to ask a question of the government, and particularly the Minister of Labour, and in order that the minister and the government and the house may understand how important the matter is, I should like to say a word or two in advance, not to make a speech at all, but to explain why I ask the question. It has to do with the labour situation which has arisen in connection with the construction of the Alaska highway. The Alaska highway is being built primarily for the defence of Alaska, but it is really a much more important project than that because it will serve in the defence of the whole northern American continent. The United States is building the road and paying the cost. Canada is cooperating with the United States in every way in hastening the completion of that project. The Canadian customs laws, for example, have been set aside and goods even remotely connected with this enterprise are allowed to enter Canada duty free. The Canadian immigration laws have also been suspended to allow alien labour to come in to work on that road, and I have no objection to that.
The United States army engineers are in process of building and have to some extent completed a pioneer road over the selected route. They are now being followed by United States contractors who are constructing a permanent highway along the same route, and they are bringing into Canada alien labourers to work on the road. I do not object to that. But at the request of Canadian employers of labour in the Yukon the national war labour board raised the rate of pay for common labour in Yukon to 75 cents per hour, plus cost-of-living bonus. The alien contractors in the Yukon, ignoring that, and in violation of Canadian law, are employing common labour, including

Labour Conditions
labourers from the United States, and paying them 96| cents per hour plus 10 per cent exchange on Canadian money, which means over $1.05 per hour. The consequence is that employees of Canadian employers are leaving them and going to work for these alien contractors, who are paying no attention to our Canadian law, while Canadian employers are bound to observe it. Certainly Canadian employers of labour would not be allowed to do such a thing, and I submit that it is the duty of the government and of the Minister of Labour to see that these alien contractors obey our Canadian law.


Hon. HUMPHREY MITCHELL (Minister of Labour):: The Alaska highway, of course, is being built by the United States government, and according to the information at hand the greater portion of the work to be done this year will be done by the United States army. However, as some civilians will be employed, the Department of Labour is naturally interested in this project. As a matter of fact I have just left a conference with United States officials who have within the last few hours arrived from Washington, with a view to evolving some rational policy to deal with the situation, and we are hoping we shall be successful.
May I suggest to my hon. friend that in view of his very intimate knowledge of the Yukon we should be very glad indeed of any suggestions he might make that would be helpful in the work we have in hand.
I think it should be said in fairness, with respect to the wage rate there, that while it might seem out of line with the wage rate in the southern part of British Columbia, and probably in Alberta, my hon. friend will appreciate that there are many things entering into the wage rate structure for what is referred to as common labour as well as other grades of labour, because living costs are so much higher in Yukon than in other parts of this dominion. That accounts to some extent for what appears to be the high wage rate structure for common labour there. I trust that answers my hon. friend's question.


George Black: Since the minister has done me the honour of asking whether I could make a suggestion, I will, if I may. Just about a week ago we had a similar difficulty up there in regard to transportation. The American gentleman in charge of transportation there objected to anything being brought up by steamers on the west coast or by rail, mining machinery and even food for the inhabitants of that part of the country. Accordingly the
superintendent or manager of transportation for Canada in Montreal appointed the controller of the Yukon as his agent, with power to deal with that matter on the spot, and it was quickly and satisfactorily adjusted. I suggest that the Minister of Labour or the war labour board appoint the controller of the Yukon as their agent to deal with the wage situation there. We are four thousand miles away, and you cannot settle this question by correspondence or by communications passing between Ottawa and Washington. The trouble should be handled right there where it arises, and a Canadian official should be given authority to settle it. That is my suggestion.



PRIVILEGE-MR. CHURCH DEFERENCE TO STATEMENT OF MINISTER OF NATIONAL WAR SERVICES IN COMMITTEE ON JUNE 1

[Stage Direction]
On the orders of the day:
Thomas Langton Church: Mr. Speaker, I rise to a question of privilege. I wish to refer to three lines on page 2961 of Hansard of Monday last, in which the Minister of National War Services (Mr. Thorson) referred to me in these words:
But time and time again he has sought to make a differentiation between Canadians of British origin and Canadians who are not of British origin.
That is both incorrect and untrue. I have never made any such comparisons or differentiations. What I had reference to was the reflection on the British born that is made in this book, "Canadians All", issued by the minister's department. I wanted equality of treatment. Not one word can the minister point to that I have ever uttered in the twenty years I have been in this parliament which made any such differentiation as he speaks of. The assertion I have just quoted from Hansard is ridiculous.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Tuesday, June 2, consideration in committee of a resolution to provide sums not exceeding $2,000,000,000 for the year ending March 31, 1943, for granting to his majesty aid for national defence and security-Mr. Ilsley-Mr. Bradette in the chair.
The ACTING CHAIRMAN (Mr. Bradette):: When the committee rose last night it was discussing the items of the Department of Agriculture.
44561-1D1



War Appropriation-Agriculture


Mr. GARDINER:: Yes, Mr. Chairman. The first item for discussion is $71,300 for the bacon board. Administration costs in connection with the British bacon board are covered by that item, which includes all the costs of running the board itself.


Mr. WRIGHT:: I have a suggestion to make to the minister with regard to the enlargement of the work of the bacon board. I think the board has done a reasonably good job in stabilizing prices of pork products in Canada. Anyone who remembers the days before the bacon board was formed knows that in the fall of the year, when there was a large number of hogs going to market, the price invariably fell, and that when there was scarcity the price rose. There has been a much more stabilized market since, and I believe that a certain amount of credit is coming to the bacon board because of that. I believe that another board should be appointed, a live stock marketing board, which would have control of the marketing of all live stock in Canada at this time. There has been a certain amount of trouble with regard to the marketing of beef, and in this respect a live stock marketing board would have been of great assistance to the minister. Various producers' organizations in Canada have been asking that such a board be formed. I have before me a resolution passed by the various cooperative marketing associations of western Canada at their annual meeting this spring. The resolution states:
That this meeting of representatives of Alberta Live Stock Cooperative Limited, Saskatchewan Cooperative Live Stock Producers Limited, and Manitoba Cooperative Live Stock Producers Limited, are agreed that it is necessary that a board of live stock commissioners of Canada be appointed upon which there shall be equitable representation of live stock producers.
I believe that such a board, upon which producers would be represented, would be of tremendous value at this time, be of assistance to the minister, and give to the live stock producers confidence that their rights were being recognized, and that as a result we would get a greater production of live stock, especially beef, than we have at the present time. We need that increased production.
It seems to me that the minister has appointed to most of these boards technical agriculturists to represent agriculture rather than representatives of the actual producers themselves. I think the producers themselves through their cooperatives or through their

farm organizations, such as the Canadian federation of agriculture, should appoint their own representatives on these boards. This would give greater confidence to the producers, and if we are to have the increased production which we need at this time that is one of the best ways to secure it. One evidence of that fact is the increased production of pork products which has occurred since the formation of the bacon board. The producers have had more confidence that there would be a stabilized price throughout the year, and they have increased production. I believe that the minister could very well take under consideration at this time the forming of a board of live stock producers to organize the marketing of all live stock products in Canada to-day.


Mr. FAIR:: I support the stand taken by the hon. member for Melfort. One condition I should like to make is that the representative of agriculture should be a man named by organized agriculture, because we sometimes find that some broken-down farmer, or one who has become bankrupt farming, receives the appointment. He is more of a detriment than anything else, but because he is there, the farmers are considered as being represented on the board.


James Garfield Gardiner: I understand that the resolution passed at the meeting of live stock representatives on the prairies was to the effect that a board of live stock commissioners should be appointed. I think that is the follow-up of the resolution which has been presented to the government by the federation during the last two or three years. The suggestion of the federation is not for a board similar to the one that is now handling pork products under the name of the bacon board; it is for a board to have powers similar to those of the board of grain commissioners, and the resolution has always contained a suggestion to that effect. Each time that resolution has been presented to the government we have stated to the delegation presenting it that the government could not raise any particular objection to setting up a board of [DOT]that kind, but that we hoped that any one who was bringing the resolution before organizations representative of live stock producers would explain fully what it means.
All of the costs of grading cattle, hogs, or dairy products are borne to-day by the treasury of Canada; we appoint the inspectors and we pay for them out of the dominion treasury. That is not true in connection with grain.

War Appropriation-Agriculture
The product itself bears the cost of all inspections, grading and everything of that kind that are carried on under the board of grain commissioners in connection with wheat. Naturally the government would have much less expense if a live stock board were set up to deal with live stock in a similar way; in other words, to have control of all grading and marketing activities such as are under the control of the board of grain commissioners, the cost to be taken directly out of the product. It would, of course, be a much higher cost to the actual producers of the product than they are bearing at the present time.
As long as those who are passing the resolutions fully understand the position they are taking, we shall be quite prepared to give consideration to their representations when they come to us.


Mr. QUELCH:: Would the minister give the committee information to show the effect of rail grading of hogs in western Canada- as a matter of fact, for all Canada? I know there has been a good deal of criticism of rail grading. Personally I am a strong supporter of it; I believe it is a method which would benefit producers in the long run. It would be interesting if the minister could supply a table showing what the effect should be.


James Garfield Gardiner: I have not before me
at the moment figures which would indicate- what I assume the hon. member has in mind- the extent to which the quality of hogs has been improved in the different gradings. I have not figures here to bear out what I am going to say, but I know that figures exist. While there was, as has been stated, a great deal of criticism of the rail grading of hogs at the time it was inaugurated, that criticism has almost entirely ceased. Just before coming into the chamber to-day I saw a letter sent to the department as the result of a discussion which took place outside Canada, following an address which was delivered before a farm organization in Minneapolis. The letter asked for information with regard to the nature of our grading in this country. The person who wrote the letter was not an official of this government but an official of the government of a province in which there was considerable criticism of rail grading at the time it was inaugurated. In his letter to the department he expresses himself as a strong advocate of rail grading, and says it has created a very much better condition among hog raisers in that province. I believe that has been the experience right across Canada.
We get very little criticism now of the system; we do get suggestions such as were made yesterday afternoon by the hon. member for Dufferin-Simcoe (Mr. Rowe), that we should accept higher weights as satisfactory under the system of grading. It is also suggested that we should not be quite so hard upon those who are bringing light hogs to market. So far, however, as the light hogs are concerned it is found difficult to justify the purchase of half-developed hogs at a time when we are requiring the greatest possible production of pork products in order to supply the British market. I think, therefore, that little attention has been paid to the criticisms with regard to light hogs, but considerable attention has been paid to the suggestion that we should allow heavier hogs. There is only one answer I can make to that. We have been attempting, in addition to supplying the needs of the British market, to satisfy the tastes of the British people. It is well known that the British people have been accustomed to eating bacon the greater part of which has been produced in Denmark, and the Danish producers have made a specialty of producing long Danish hogs with streaks of lean all the way through and a comparatively small proportion of fat.
We had an experience recently with regard to fat bacon. We had a strong protest from Great Britain, on the part of the troops, as to the type of bacon with which they were being supplied, and their criticism was directed against much the same organizations as are criticized in this house and outside. The complaint was made that a packing plant in Canada was sending them bacon that was too fat. We had a full inquiry made on the other side, and the report we received was that the bacon was all a United States product and not Canadian. The criticism was that the bacon was too fat, and I suggest to those who are advocating a higher weight of hog that is the sort of criticism we run into not only among the British themselves but among our own troops overseas. They say they do not want that type of bacon.
We are attempting to meet British requirements for bacon and at the same time to supply them with the type of bacon desired, so that when the war ends we shall be in a position to meet some of the problems mentioned last night by the member for Lethbridge (Mr. Blackmore). Eventually we are going to come to the point where we may have to decide that we are endangering the future of our own agriculture by increasing production along certain lines-the point where men
3020
War Appropriation-Agriculture

will probably lose in the few years following the war all the profits which they thought they were making during the war period. In watching that particular situation, we are attempting to supply the needs of Britain with the type of pork product they wish to have, in order that we may maintain as large a percentage of that market as possible after the war is over. We would hesitate, therefore, to increase weights even to satisfy those who still make complaints with regard to our grading on the ground that we do not allow weights to run high enough, because to do so would disappoint people to whom we are supplying these pork products.


Mr. ROWE:: Would the minister not give more consideration to the establishment of a live stock commission instead of merely a bacon board, in view of the suggestion, which was reported in last night's press, that we may have to have meatless weekends. If it is necessary for war purposes that we should have meatless weekends, we shall have to have them, but I submit that we can produce a great deal more. Much was said last night by the minister as to the amount of increased production. We can increase production considerably on our farms even with our present help. After all, when a man has to feed twenty hogs he can feed thirty almost as easily. It takes help to feed twenty, and he can feed thirty in the same process. If he is fattening hogs to 225 pounds, he can make them 250 pounds as easily, and he can put the last twenty-five pounds on cheaper than any other part of the 225. It would be a chance to give our farmers a break. Moreover, it would afford an opportunity for the consumption of some of the surplus grains of the country, converting that surplus into animal fats that are so greatly required by the troops. I do not think that the minister should allow some slight criticism from certain quarters, from some officers' mess, as to not having bacon properly streaked, to interfere with his plans.
I think we need more foodstuffs, and we shall need more immediately following the war. Is there one branch of the minister's department which will say that Denmark will come into the picture immediately following the war? It will take Denmark years to get back to the position she formerly occupied. We watched the penetration of Denmark into the British market. In 1921 we sold Great Britain 250,000,000 pounds of bacon, but by 1930 that market had practically disappeared as far as we were concerned. Much was said last night about losing markets. The bacon market of Britain was lost to us definitely

between 1921 and 1930. We were supplying Britain with 12 per cent of her requirements and Denmark was supplying Britain with the remainder, but by 1930 we had lost the market, so that we were supplying England with one per cent of her requirements while Denmark was supplying her with over 60 per cent-over 600,000,000 pounds-and we were importing more meats into Canada than we were exporting in 1930.
I agree that probably we failed at that time in giving to Britain the type of products she required. Perhaps we failed as producers to keep pace with the skilful, well-organized producers of Denmark. But that condition has entirely changed. The reason why we are selling to Britain now is not to be found in any magic type of policy. We have produced better bacon, it is true, but we were getting only the fringe of that market between 1930 and 1939. With Denmark overrun by the Hun, and since Germany has been consuming not only the bacon produced in Denmark but the breeding stock of that country as well, none of that bacon is going to Britain. We do not now have that competition in the British market, but we have a challenge and a demand for more bacon foodstuffs in Britain. I submit again-and no one knows this better than the minister-that you can produce volume faster by increasing the weight per hog than by any other single method. The next means by which we could reach the point of producing even as much as Denmark was producing before she was overrun would be to give the farmer some assurance that, no matter "what his wages or his feed costs may be, his price will be flexible to some extent so that at least he may expect costs plus 10 per cent on his investment.
The first means, however, is to increase the unit weight. I believe the bacon board might be enlarged into a live stock commission, because for many years the consumption of beef and pork has been relative. If pork rises in price, beef consumption automatically rises if the price is satisfactory; and1 if beef prices are high, pork consumption rises under similar conditions as to price. That has been the situation for years locally. Beef and pork are definitely tied together as meats. I therefore urge the minister that he reconsider his refusal to allow the regulations to be a little elastic during the war. This war may not last long; it may last only another year or two, and we are thinking of post-war conditions. But the immediate challenge before any of us here or on the farms is production of quantity foodstuffs.

War Appropriation-Agriculture
We can easily restrain and restrict the rates immediately following the war when other competition looms up. But I hope the department may be able to hold the' British market for many years to come. I hope the present necessity for production going to Britain may develop into a more stable market. If we hope to hold that market after the war, we must produce what the British people want, not what we want. At the present time they want quantity rather than quality. We have no competition in quality; we have a challenge for quantity, and I urge the minister to reconsider extending the maximum weight. Perhaps fifty pounds a hog is too much; it might affect the quality too suddenly, but as a hog producer I know that one can produce fifty pounds more a hog and still have what is reasonably good pork, better than we had twenty years ago. If, however, fifty pounds is too much, at least give the producers some leeway; do not allow a farmer, who is trying to pay off a mortgage on his farm, to be discouraged by the reduction of a dollar a hog because it is a pound overweight; increase the maximum by at least twenty-five pounds, which will bring a tremendous increase in quantity. I again urge the minister to reconsider his refusal in that regard.


Mr. COLDWELL:: I should like to follow what the last speaker has said, and of course to support the idea of widening the basis of the meat supervision and export from this country through the establishment of a commission. I see the hon. member for Parry Sound (Mr. Slaght) in his place; I think he will recollect one or two incidents that occurred when we were in Britain last autumn. I remember one time when we were served bacon I remarked to the waitress that the bacon was salt, and received the reply, "Yes; that is Canadian bacon." On another occasion we made the same observation and again were told, "Canadian bacon". We made some inquiries regarding Canadian bacon from the food controller, Lord Woolton. He told us that the Canadian bacon we were sending over was in every respect of very high quality, but was being oversalted because of the shortage of refrigeration space. Something should be done by the British authorities to let the British people know that the Canadian bacon they are getting to-day, which is of good quality, good texture, and the type of bacon that they usually like, is salt because it has to be oversalted on account of shortage of refrigeration space.
Another factor in the situation is that most of the smoke-houses in Great Britain-I suppose hon. gentlemen know that the bacon coming in from Denmark was smoked not in Denmark but in Britain-were located along the river
Thames and certain east coast ports of Britain, and when the blitz came most of those smokehouses were destroyed, with the result that still further difficulty was caused in relation to the flavouring of our bacon.
I believe that in addition to supplying the British people with the type of bacon they like, even in spite of the war, we should make an attempt to enter into a longer term agreement with them than we have had, for I am convinced from my knowledge of the British trader and of British business practice generally that if and when Denmark comes back into the bacon industry-it may not be for two or three or four years after the war-we shall again be confronted with keen competition. Those of us who come from western Canada know that as lately as 1938 our live stock and hog population was at a very low level on account of shortage of feed, but in about four years we were able not only to increase our live stock population in every respect, but to increase our hog production enormously, and we can continue to do so indefinitely. When we are rendering this service by upsetting our economy as we are at the present time-and I had an opportunity of saying that when I was in Great Britain-in order to feed Britain in her dire need, some attempt ought to be made by the government to enter into a longer term agreement so that when the war ends we shall not have within a year or two a sudden stoppage of the bulk of our exports of these goods to Great Britain, thereby involving our farmers perhaps in a loss of gains they may have made during the war. When I speak of gains during the war, I know, and everyone knows who is in touch with the farming community in this country, that farmers are to-day not making profits; they are getting something nearer the cost of production, but are still in many cases not recovering that cost, with the higher price of labour on the farm and of supplies.
It is quite reasonable that a commission should be established to deal with live stock products generally, and some attempt should be made to enter into a longer term agreement regarding the taking of our meat and other products by Britain after the war.
But one thing we must do; it may be possible to increase the weight of a hog by twenty or twenty-five pounds and still keep the quality of bacon up; I do not know, but if we cannot do that then we should maintain the quality.


James Garfield Gardiner: We have increased the weight by twenty-five pounds already.


Major James William Coldwell: Yes; but I mean beyond that. We should do everything we can to keep up the quality.
War Appropriation-Agriculture

Another thing that should be done is, as far as possible, to keep the distinction clear in Britain between our bacon and United States bacon. We saw United States bacon being landed in Liverpool. Some cases had been broken in unloading, and they contained huge thick slabs of obviously corn-fed lard type bacon from the middle west.
I wanted to make just those two or three points, particularly to indicate the reason for the saltiness of our bacon, and to suggest that some attempt be made to enter into a longer term agreement for bacon and other such products that Britain needs, in order that we may not find ourselves out on the end of a limb two or three years after the war ends.


Mr. HOWDEN:: Have steps been taken to prevent Canadian abattoirs from making further shipments of United States bacon? That bacon came in here a year or two ago I believe, when the tariff on bacon was lowered, and I know a good many of our abattoirs disposed of the stores of Canadian bacon that they had and loaded up with United States bacon. No doubt that is the reason why they got it in England.


James Garfield Gardiner: No United States bacon is shipped to Britain under the contracts made with Canada; nothing but Canadian bacon is shipped. Even the bacon which came in from the United States during the first year of the contract, because of the fact, which I stated last night, that hogs were on an average 3 cents a pound higher in Canada than in the United States, did not go to Britain. Anyone could buy hog products in the United States much cheaper than he could here. As I remember the figures, the packers shipped in somewhere in the neighbourhood of thirty million pounds in a few weeks time.


John Power Howden: On the hoof?


James Garfield Gardiner: No; in the form of pork products. We made an arrangement for a quota on what they could ship in, and the shipment of United States pork into this country was largely prevented during that period. There are special regulations in effect as a result of our desire not to have our hogs go to the United States. These restrictions have been imposed as a result of negotiations with the United States and by the action of our own bacon board and the Department of Trade and Commerce.
So that that matter is fully regulated in reference to dealings between Americans and Canadians, as far as pork products are concerned. There need be no confusion as between pork products shipped from Canada and those shipped from the United States.

These products are shipped to Britain as American pork products direct from the United States; but when they are served at the table, having passed through the various distribution centres, it is difficult for the consumer to know whether they were Canadian or American. I presume the same thing would happen at the table in the barracks as probably happened at the hotel where the hon. member for Rosetown-Biggar made inquiry. Over there the natural thing is to classify everything coming from America as American; but because of the advertising we have put on about Canadian bacon they probably would say that the bacon in question came from Canada. All the complaints were with regard to fat bacon and salt, and all the charges were made against one particular packing company in Canada. Those charges were not from an officers' mess, as was suggested a few moments ago; they were from the rank and file of the men in the army, complaining against the type of bacon which was being sent over. To make an investigation it was necessary that the product be followed right back to the kitchen; they had to get the actual rind taken from the bacon, and they found it was stamped American. So that they were able to prove that this was a complaint with regard not to a Canadian product but an American product.
I am sorry the hon. member for Dufferin-Simcoe (Mr. Rowe) has gone out; I do not think he was in the chamber when the hon. member for Melfort (Mr. Wright) made a suggestion with regard to a board of live stock commissioners, but I hope he will read in Hansard the comment I had to offer in that regard. That comment was not to the effect that we were not prepared to consider a proposal along that line. Rather it was to the effect that we were prepared to give consideration to such representations provided that they came from stock producers right across Canada, who understood that they were asking the government to forgo the payment of costs which are now being borne by the treasury of Canada, which costs would be placed upon the product itself. That is what is involved in the resolutions whic^h have come forward from time to time.
There was another question, as to whether our contracts should be for longer periods of time. Ever since the war started I have been of the opinion that we should have long-term contracts with Great Britain covering all farm products. I based that opinion on the experiences of Australia and New Zealand during the last war. As I recall it their contracts extended for the period of the war and one year thereafter, and we have attempted

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continuously to make that type of contract with the British food ministry to cover our food products. Up to the present time, however, we have been unsuccessful. Last year we came within two shillings of succeeding in making a contract covering two years, a contract which would be reconsidered and re-signed at the end of each twelve-month period, in about August of each year. The idea was that this would have the same effect, of continuing the contract until one year after the war. Presumably we would enter into it just before the end of the war; it would cover a two-year period, and if part or even all of the first year passed before the war was ended, the contract would still continue for a year thereafter.
I say there was only two shillings between us in coming to an agreement last year. When we were discussing the price upon which the agreement was to be based the British food ministry intimated to us that they were prepared to sign a two-year contract on the basis of 98 shillings, but that if we required 100 shillings in order to get the production which was thought necessary, then they did not wish to sign a contract for more than one year. We finally decided on the one-year contract at 100 shillings, because we felt that in order to get the production we wished, hogs should average somewhere around ten cents live weight at Winnipeg, and in order to get that price we required the 100 shillings. They suggested at that time as an alternative, and the matter is now under consideration, that they would be prepared to sign the agreement earlier this year, which would probably have the effect of making the agreement cover a period of about eighteen months. That agreement has not yet been signed, but information is being gathered and negotiations are under way which will make possible an agreement for the succeeding year.


Percy Ellis Wright: I appreciate the minister's answer to my question, but I cannot agree that the cost of inspection should be a factor in connection with the appointment of a live stock commission in Canada. If the minister has the figures now I should like him to bring them down, or if not he may give them in connection with his estimates, as to what the cost for the inspection of pork products and cattle has been in Canada in the past. As a shipper of cattle for the past twenty-five years, I do not think there is any inspection of live cattle to-day. There is a grading of beef, into the red and blue label classes, after it is killed; but you can ship a live animal one week and have it graded No. 1 whereas perhaps two weeks later, when there is a surplus on the market, that same animal might fall into a
lower grade. In that case you will not only lose the difference between the prices paid for the two grades; you will also lose the grade itself, and since this is often a matter of a cent and a half per pound, it makes a tremendous difference in shipping.
There is another matter I should like to mention in connection with the marketing of cattle. During the last few years the packers have brought a larger percentage of their cattle direct from the farmers, without having them go through the public markets. I do not know just how greatly that percentage has increased; I placed a question on the order paper in that connection which was passed as an order for return, but as yet the return has not been brought down. I do know, however, that there has been a considerable increase in the percentage of the packers' requirements now being bought direct from the farmers; yet the price paid by the packers of course is established by the price on the public market. Naturally if a packer can secure from 25 to 50 per cent of his requirements direct from the farmers, so that he has to go to the public market only for the remaining 50 per cent, it follows that there is not the same competition in the open market, and as a result the price is lower. A board of live stock commissioners would serve a useful purpose in restoring confidence to the producers of live stock and live stock products.


Mr. SHAW:: Before we leave the question of the desirability of increasing the maximum weight of the bacon hog for export to Great Britain, I feel that I should place on record a resolution recently passed by the Red Deer board of trade. Many hon. members realize, I presume, that the city of Red Deer is located in the centre of one of the greater hog producing areas of western Canada, and a decision either for or against any increase in the maximum weight will have a definite effect upon a great many farmers of that area. The resolution is as follows:
Whereas the present weight for Canadian bacon hogs for the British market is two hundred and twenty pounds maximum,
And whereas the American producer is shipping hogs to the British market at two hundred and twenty pounds basis.
And whereas after a hog reaches two hundred to two hundred and twenty pounds, it is easier to increase the weight to two hundred and fifty pounds without additional bone w-eight increase, and the extra weight will help our quota and help feed the British citizens with still a good bacon hog, and a reasonable increase in the revenue to our hog producers of Canada. We are not unmindful that our present standard of bacon hog should possibly be maintained after the war, but this may be a long war, and the British public need the food. We can revert hack to the lighter hog after the war is over with little (rouble and in the meantime we
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have increased a desirable food supply with advantage to the British consumer as well as increasing revenues for the hog producers of Canada.
Therefore, be it resolved that this board endorse the raising of the bacon hog weight to two hundred and fifty pounds maximum for the British market for the duration of the war.
I think that view is representative of the view held by the hog raisers of that area. I feel no reluctance in associating myself with those who advocate that further consideration should be given to increasing the maximum weight of the hogs we are exporting to Great Britain.


Robert Fair: Are the Canadian hog producers going to be able to supply the 600,000,000 pounds of bacon that are required this year? A couple of weeks ago I noticed the following article in the press:
In the weeks the contract has to run, a good increase in marketings is anticipated in western Canada. Higher marketings also are expected in eastern Canada, although they have been running lower tljan last year. In the _ weeks already elapsed western hog marketings were 17 per cent above last year while eastern Canada was down 12 per cent, a net increase of 3-7 per cent.
In that same paper it is reported that hog gradings in Alberta were 34 per cent higher than last year. How do the other provinces stand?


James Garfield Gardiner: In the first twenty-five weeks of the year beginning October 1 last, 52 per cent of the 600,000,000 pounds had been either shipped or was in storage in Canada. A number of weeks have gone by since the end of that period. In other words, with still a week to go before we were half through the year we had 52 per cent of the amount necessary to fill the contract. Of course there would be a few weeks following the end of the period when there might be some difficulty in, keeping production up to the previous levels.


Mr. SENN:: And shipments.


James Garfield Gardiner: And deliveries in Canada; it is a short delivery period. While we have done considerable advertising in an effort to get production up during those months, we are not in position at the moment to state whether deliveries will come through in as great volume as we have been expecting, but we think they will. We have added twenty-five pounds to the weight of the hog which is acceptable in order to increase the volume and thus make it more certain that we will fill the 600,000,000 pounds contract this year. The advice I am receiving from the bacon board and others who have the information is 
to the effect that we will approximately meet the 600,000,000 poundis. We may be a little under or a little over, but that is the position.


Mark Cecil Senn: The minister referred to
permitting an additional twenty-five pounds in the weight of the hog. Hogs are paid for on a bacon basis, and a hog of that increased weight would not get the select premium.


James Garfield Gardiner: Grade B-l takes in up to 185 pounds dressed.


Mark Cecil Senn: But they would get no select premium.


James Garfield Gardiner: That would be paid on 176 pounds dressed; it would be nine pounds out in the dressed weight.


Mark Cecil Senn: No matter how select the hog may be, it would not receive the select premium if it were that weight.


James Garfield Gardiner: No premium is paid on hogs over 176 pounds.


Mr. ROSS (Souris):: This adding of weight to our hogs is a matter that should be considered. I received a return last week in connection with hogs which states that the A weight runs from 140 to 170 pounds. As the hon. member for Haldimand (Mr. Senn) has pointed out, a heavier hog would not get into the A bacon class. When you have this extra weight you are taking a cut on your hog and losing at least SI in addition. That loss might run to SI .50, because B-l is 50 cents and B-3 is SI.50. The hog raiser is penalized for that extra weight. As has been pointed out, that extra twenty-five pounds can be added much more cheaply than any other part of the weight. The minister and his department should consider allowing extra weight to come into the A class.
The suggested live stock commission would be of more value to the cattle producers than it would be to the hog raisers. The bacon board is doing a pretty fair job in connection with the marketing of hogs, but in certain seasons of the year there is a definite discrimination in the marketing of cattle at our stockyards. There is a great need for a live stock commission, which could render useful service, especially to the cattle producers.


James Garfield Gardiner: There is one thing I think should be said to the committee in view of the remarks that have been made. It is perfectly true that when the hog goes over the 176 pounds dressed weight there will be $1 less taken. Since we have allowed hogs to go up to 185 pounds in the B-l classification we have found that the increase in second grade bacon has been out of all proportion to

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what we had expected. Under the British agreement we are expected to send a certain proportion of A's, and they accept a certain proportion of other grades. But we are just a little concerned about having gone as far as we have in view of the effect it is having upon the gradings up to date. If we cannot get better results I am afraid the agitation will be to go back to where we were previously rather than to go in the opposite direction. Probably that agitation will be made by the hog producers themselves.
I was interested in the resolution sent from Red Deer, because I discussed this whole question with the live stock people of northern Alberta in Edmonton last January. At that time the suggestion was made from the body of the hall that we should increase weights, and a lively discussion followed. This happened before the weights had been increased even to where they are now. Prominent hog raisers in Alberta took the position that quality was more important to them, probably not at the moment but from the long time point of view, than increased weights which might bring a little more profit for the time being. That was pretty much the consensus at that time. In most groups in the country you can sit in with the producers and place the whole question before them. I had with me at that time-I am sorry I do not have them here- all the figures with regard to gradings and the effects of those gradings. But I shall have these figures when we are discussing the regular estimates of the department, and I think we can discuss this whole question then to better advantage than we can at the moment.


James Arthur Ross: I would not ask the department to increase the weight of hogs if it was going to create an inferior grade of bacon, because our first aim should be to produce bacon of A-l quality. But I still feel that with careful feeding we could increase the weight to some extent and still produce A-l bacon.


James Garfield Gardiner: We have been talking about a 225-pound hog, but it takes a 240-pound hog to produce 185 pounds of Wiltshire sides. So that we are really talking now about a 240-pound hog. Everyone will agree with me when I say that for the last twenty years we have been advocating in this country a 200-pound hog as the proper weight for a farmer to deliver, and if we advocate now that a farmer should deliver a hog around 225 pounds I think we have gone quite a long way towards accepting the views of those who think we should provide a heavier hog. Hon. members have probably noticed that we have
agreed with the United States government- it was announced only this past week-that we are prepared to consider along with them certain arrangements with regard to the weight of hogs, and with regard to potatoes. Those discussions will take place, although there are no commitments in connection with them.


Mr. PERLEY:: Is there any way in which you could control the packer? He takes a certain quantity of first-class bacon out of a hog of any weight, out of say a 250-pound hog, which would dress in the neighbourhood of 200 pounds. Could not the packer by trimming, get a certain amount of A-l bacon out of the heaviest carcass? I remember coming to Ottawa on one occasion and meeting on the train a number of packers who were on their way here to attend a meeting. They showed me samples of bacon that had been produced in different packing houses. There was not much difference between them that could be observed by looking at them. They told me that they could get a certain amount of A-l bacon out of a hog of almost any weight, even one over 250 pounds.
I do think there is some merit in the argument for a heavier hog for the duration of the war, when we need fats so badly. The minister stated on one occasion that fat could be trimmed off the carcass in the processing plant. I have had some experience in hog raising. I have what I consider a good hog house on my farm in the west, equipped with steam cooking plant, root cellar and every other convenience. You can feed 50 or 100 hogs in that hog house as easily as 50. Even from the labour point of view we should encourage a little extra weight on the hog, as well as from the point of view of making use of coarse grains for feed. The surplus fat could be taken off in the processing operation.


James Garfield Gardiner: I attended the meeting these packers were coming to. They brought down their sides and hung them up at the experimental farm. I went down that row of sides where they were hung up and laid out, and while I am not an expert at examining hogs, when you have an expert along with you, you can very soon see exactly what is meant by the grading of hogs. While it is possible to take a hog of a certain weight and trim it down, if it has been properly fed, so as to get out of it a very good product in the form of side bacon, anyone who buys a hog of such a weight must take a considerably lower price for what he trims off than he gets for what he delivers as side bacon.
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Ernest Edward Perley: The packer could convert the fat into lard.


James Garfield Gardiner: They might when lard is at a good price and vegetable oils are short. But what we are talking about now is supplying the present demand and at the same time keeping ourselves in such a position that we can hold something of what we have got after this war is over. After all, only a very small percentage of our hogs, even under our present grading, are of the high type that Denmark and Britain produce. Even with all the care we have taken in breeding and everything else we have not nearly reached the standard they have reached in Denmark and which they will enjoy when the war is over. It has been pointed out to us that we must continue to keep our standard as high as we can, in order that when the war is over we shall not have to fight too big a battle to get back into the same classification as our competitors. I agree that no one knows at the moment how long the war is going to last. We are unable to guess, and no one knows at the moment what position Denmark will be m after the war. But I think we should take it for granted that the people who are in control of Europe to-day are just as wise in connection with the production of food as they are in connection with other operations having to do with the war, and I should be very much surprised if there are not more hogs being produced in Denmark to-day than there were before the war. There has been no war in Denmark. The nazis simply walked in and took possession of everything, and I venture to say that they are producing as much food in Denmark to-day as they were when the war started.


Mr. HANSON (York-Sunbury):: The theory was that the nazis were taking away the breeding stock.


James Garfield Gardiner: They may take them away, but I imagine they will feed them where it is to their best advantage. Denmark is one of the best agricultural areas in Europe and one of the most highly organized. The people understand agriculture and how to carry on farming operations and the raising of hogs, and there is no fighting going on in Denmark.


Mark Cecil Senn: They always had to import grain.


James Garfield Gardiner: Yes, but I think we had better figure that Denmark at the end of the war will have the same high grades she had before, and that we shall not have an interval of two or three years in which to build up

our product; therefore we should keep our own products in a position to meet any competition that may offer.


Ernest Edward Perley: I only want to make sure that the packer has not the opportunity, from the extra weight hog, to convert into lard the product he trims off, and still takes the average quantity of A class bacon out of the carcass. I venture to say that most of those who have taken part in this afternoon's discussion, if they were served bacon from the three sides that I saw of first class bacon that the men on the train told me had been taken from different weights of hogs, would not be able to tell whether it came from a 175- or a 250-pound hog.


James Garfield Gardiner: The principle in connection with the whole system is this-I should have explained it when I was speaking earlier. A packer, when he buys a grade A hog, pays a premium of a dollar. That dollar is assumed to be a dollar more than he can actually get for the product. The basis of the whole system is the B-l, and they get a dollar over the B-l price if it is a grade A. If it is under the B-l, in some of the grades where there are discounts, a discount is taken. The discounts are presumed to balance the premiums.


An hon. MEMBER:: They don't.


James Garfield Gardiner: Somebody says they don't. Sometimes the premiums are greater than the discounts.


Mark Cecil Senn: Very often.


James Garfield Gardiner: They were last year. If the premiums are greater than the discounts what really happens is that the man who produces the type of hog we really want gets something at the expense of the man who produces the type of hog we do not want. It is not a matter of the packer getting something or the packer not getting something; the system is supposed to work to take the money from the man who produces what we do not want and give it to the man who produces what we do want. That is the principle of the system, and it has operated to improve the standard of our hogs across the country.


Mr. WOOD:: If I understood the hon. member for Melfort aright, he made a comment to the effect that when there was an over-supply of beef on the market the farmer lost in consequence of the grading. If that is so it carries an unfortunate implication, because after all. the graders who grade the carcasses, not only beef but pork, are government graders, civil servants who are engaged by the people of the dominion. It seems to me that their integrity

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must be at stake, and I marvel that the minister did not rise to the occasion and defend those public servants. I might add that I have heard that remark on many other occasions. I listened to a statement in a speech in my own riding that the confidence of the farmer was absolutely destroyed because the government graders worked in collusion with the packers to secure for them additional profit. If that is so, and it becomes generally known, the confidence of the farmer will be undermined. Also a remark of this kind is rather dangerous to those who are called upon to discharge their duties to the farmer in grading carcasses and securing for them the grade to which the product is entitled. Their integrity as government inspectors is more or less at stake. I should like to have the opinion of the minister in this matter. I believe I have correctly interpreted what the hon. member for Melfort said.


Percy Ellis Wright: No, I did not say that.


George Ernest Wood: Further, I think the minister is wise in guarding jealously our reputation in Canada for the production of bacon hogs. The records prove that last year practically 80 per cent of all the hogs marketed in Canada went into the basic and the premium grades.
With regard to the question of increasing the amount of weight to each hog, the records of our experimental farms show that it costs more to produce one pound of meat the older and the larger the animal gets. Therefore by increasing the size you sacrifice a certain amount of profit. To the men in the west who have an abundance of coarse grain that may not mean so much, but so far as I am concerned I am anxious that my hogs should leave the farm as early as possible after they have reached 220 pounds. I think it is fairly safe to follow that line. When you get past it the cost of production goes up. Not only that, but you are apt to sacrifice quality.


Percy Ellis Wright: I think the hon. member
for Brant misinterpreted my remarks. I was not speaking of the grading of pork but of the grading of beef. I believe that in the case of beef there is not nearly as strict grading as there is of pork. I still maintain that what I said with regard to beef is what actually takes place. I do not believe that it is a reflection on the integrity of the inspectors; it is probably a reflection on the methods used in buying from the farmers.


John Power Howden: But the beef is graded in the abattoir after the animal is killed.


Percy Ellis Wright: A certain amount of it.


James Garfield Gardiner: That is exactly the
reason I did not comment on the statement of the hon. member for Melfort: I understood he was dealing with beef, and we do not grade beef under the same type of organization as we do hogs. There is a voluntary grading of beef, and only a certain proportion of it is graded. There is, I understand, some compulsory grading in British Columbia, but there is no general compulsory grading across Canada.
One reason why I should like to feel that live stock organizations really know what they are doing when they are passing resolutions such as the one which has been read is that there would be costs of grading. You could not operate the sale of beef in the United States, under a board similar to our bacon board or to the board of grain commissioners, under any other system than a system of grading, and that grading would have to be very carefully done. And of course, while we do get advantages out of grading, there are costs in connection with it as well. As to what those costs might amount to, I have not the figures in front of me. I did have a table prepared which I presented to this house three or four years ago, because of a discussion which was then going on as to whether the grain grower or the live stock producer was getting most out of the treasury of Canada. I was able to show at that time, which was before we started paying the amounts we are now disbursing in connection with acreage and wheat prices, that the live stock producer was receiving a great deal more out of the treasury than the grain producer was, just because of this very service, which amounts over a period of time to millions of dollars paid out in grading live stock products, and to-day we have a much more highly developed system than we had at the time I filed the figures. Over no very long period of time the cost runs into figures between twenty and thirty million dollars. If all of the facts are placed before the organizations which are considering the subject, and they then pass a resolution asking the government to do certain things about it, the government would be justified, I believe, in saying, "The live stock producers want us to do that; it is going to cost the treasury of Canada a lot less money if we do it the way they are suggesting; then let us proceed to do it". I do not believe there is any great objection to doing it so far as the government is concerned.


John Power Howden: What is the function of the beef graders? Every now and again the

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civil service commission calls for beef graders, to grade beef in the abattoirs. If it is not to grade beef, what is it?


James Garfield Gardiner: We established two top grades of beef. On a Canadian Pacific train or a Canadian National train you will see on an order a certain grade of beef at $1.50 a cut. We do establish those, those top grades. It is entirely voluntary. Anyone can have that grading done who wishes to have it done. The system results in only a very small percentage of the beef which is going into the market being graded, and it requires only a very small staff as compared with our general inspection staffs in connection with pork and other products.


John Power Howden: Grading takes place with regard to slaughtered beef, does it not?


James Garfield Gardiner: In the abattoir.


John Power Howden: Then it cannot have any connection with the sale of beef.


James Garfield Gardiner: Not the sale of cattle.


Mr. RICKARD:: This question has produced more controversy among farmers than any other question in regard to the products of the farm. As the hon. member for Brant has said, many farmers declare that we are not satisfied with the grading we get. We have graders appointed; a man sends a number of hogs one day to be graded and-I have heard farmers say this-he might send the same hogs the next day and get a different grading. There is a good deal of trouble about the grading of hogs.
I am glad to hear the minister say that 220 pounds is about the right weight for hogs.
I have been in the business for some time, not as a specialist in hog raising, though I have produced a good many hogs, and I find that 200 or 220 pounds is about the weight at which it is most profitable to dispose of hogs. In olden times we used to grow what was called the thick fat hog, and anyone will tell you that is the easiest type of hog to produce. You can grow it cheaper than the lean hog. But we were educated away from that ideal for the simple reason that we could not sell fat bacon. We have therefore been growing thin hogs so as to have a better quality. I think it would be a great mistake to go back to anything approximating the old standard and to increase the weight of hogs to 250 pounds. It is recognized of course that the British market wants the leaner hogs, from 200 to 220 pounds, and if we are to maintain the market which we have already established there we must be careful not to exceed the requirements they stipulate. We 
may need fat and I realize that perhaps the last twenty-five pounds is the easiest to put on; nevertheless I think we should consider very carefully just where we are going if we attempt to increase the weight of hogs.


Mr. WEIR:: Along the lines suggested by the hon. member who has just spoken, we should bear in mind, in considering this question of the hog policy for the future, what has been our experience in the past. This question has been before us for twenty years, since grading was instituted, and it has taken a good deal of effort to bring the present type up to the present standard. As the minister has intimated, our success in that regard has not equalled that attained in Denmark with their type of hogs, and it seems to me that to alter our standard or to make any drastic change might have far-reaching effects which it would be more difficult for us to overcome afterwards than many of us may think. After all, the farmer who is feeding his hogs is a shrewd man, and he knows what to do. I have not checked up carefully the figures with regard to the grading of hogs, but I may tell of an experience we had a few years ago at a time when there was a good deal of complaint with respect to the grading of hogs. The reason was that too many hogs were coming to the market overfinished and overdone, and the reason for that in turn -was that it was during a period when grains were cheap and people were feeding their hogs to the very limit, with the result that they were getting top weights and a little above. So that if we are inclined to think that the farmers are not paying close attention to these questions we are mistaken.
There is something else in regard to which I have felt that many producers do not realize the significance of grading. If anyone looks at the special hog, the first-grade hog, he will understand that it is the ambition of every farmer to produce that type. But after all, in our grading system, the A grade hog is not our standard; it is the grade B bacon at which we have always aimed. The special was something extra, as the minister mentioned, being an incentive to the farmer to try to produce what might be regarded as the ideal. But it is not the standard so far as our hog policy is concerned. We have had a good deal of experience in the grading of hogs. We had some experience when grading was first instituted and there was a good deal of complaint about it. It was difficult to get people to understand what the objective was, but gradually it became more and more acceptable. We had the same experience again when

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rail grading was instituted. The minister will remember there was a good deal of discussion and much pointed criticism of the department when rail grading was instituted, but that system has been generally accepted, and I believe that members who have paid close attention to the development of our agricultural products will agree that we have always aimed at standardizing products. For my own part, and I believe this is generally accepted, I think you can grade a hog more accurately and much more carefully on the rail than on the hoof as a live hog. We have made progress in that regard, and watching the grading of hogs on the rail I think the policy arrived at is the most accurate that has been developed so far in that direction.
There is one question which in my mind remains to be answered with regard to the hog grading policy. It is not so much a matter of the top grade hogs as it is with regard to the lower grades; and what bothers most people, the thing that is most difficult to explain, is the number of discounted hogs. It does not seem to me, and I think a good many others agree with me, that it is necessary to have as many grades of hogs as we have at the present time. That is the only comment I make at this time on this aspect of the question. I should like to know from the minister whether he thinks it is necessary to have all these grades of hogs in carrying out the present policy.


Mr. AYLESWORTH:: With a good deal
of what the minister has said I agree so far as weights are concerned. But as to what he has said in reference to the change in weight resulting in the production of a great many more hogs of the heavy type, while I cannot speak for western Canada, I believe that the production of the heavy hog is in part attributable to present conditions inasmuch as the farmers of Ontario.find it very difficult to get enough young hogs to carry on and to use up their feed, and are therefore almost compelled to keep their hogs until they are too heavy. I believe that will be cleared up in the near future.
If I understood the minister rightly he suggested that the dollar premium paid on hogs is supposed to be offset by the dollar cut on off-graces. I wonder if that is the reason why, in a shipment of say 400 hogs, you have 90 odd selects, which means $90 premium, while in that same shipment you will have $90 or $100 or $105 of a cut. Is that a sort of understanding between the grader and the packer, that it is in the nature of a balancing up? I have found in my own
experience that this has occurred, when knowing and seeing the hogs one felt that it should not be that way. I was wondering whether that was the reason.
So far as rail grading and live grading are concerned, I believe the understanding is that after your hogs have been graded by one grader no other grader is allowed to be called in to re-grade them. But there was an experience a few years ago in the stockyards; some ninety hogs were graded and the grader took out ten selects. The remaining eighty were brought back under another name and he took out nine selects from those eighty. Again the remaining seventy-one were brought back under a different name and the same grader took eight selects out of them. That continued until there were only some nine hogs left out of the ninety and they had got seventy-two selects. The mark on these seventy-two hogs was washed off; they were brought back and graded by the same grader, and he then graded ten selects. I was wondering whether there is a sort of guessing to offset the premiums that are paid. As I understand it, so far as the British market is concerned B-l bacon is rather more desirable than even our select bacon.
I agree with the last speaker that there are too many grades. I would reduce the number of grades by having say the select grade A class; then the B-l class, and then the heavies after that, doing away with the other grades in between. There should be one cut on hogs over a certain live weight, say 240 or 250 or whatever may be decided upon, and all hogs under that should be on the basic price. I think that would be far more satisfactory to the farmer.


James Garfield Gardiner: In regard to the number of grades, I have been a sort of crank on that myself ever since we have had rail grading. As I go out to gatherings here and there across Canada I find that is one of the main criticisms, that there are too many grades. I have been driving at the bacon board and our own men in the department to see if we cannot get the number of grades cut down. On making inquii-y recently I find that in Canada we have eleven grades and on the Chicago market there are twenty-six. We were examining Chicago trying to find a better system than our own, but they have more than twice as many grades. That may be due in part to the fact that they take a heavier hog than we do, and the grading system is on a different basis in the matter of weight. They rather encourage the heavier hogs because of the market they have for them.

War Appropriation-Agriculture
On the question of balancing I do not want to be understood as saying that the balancing takes place in the delivery of any particular group of hogs or any particular individual's hogs. The last slip of my own that I looked at-and no one knew they were mine when they were being graded-showed five selects on which I got an extra dollar each, and none of them were docked at all; the rest were B-l. The averaging up is done not on any particular group of hogs; it is on all the hogs delivered during the year. A farmer who continuously brings in lights gets continuously docked, and the farmer who continuously brings heavies is continuously docked, while a man who always brings hogs around 200 pounds probably gets a premium on 90 per cent, under the system which has been encouraged to take money away from the man who brings in hogs that are not properly finished and pay it to the man who brings in hogs that are at the top of the list.
I hope the committee will permit me to leave the remainder of this discussion until we come to the general estimates, when I shall have all the information here. Statistics show that there has been a marked improvement in the type of hog that is delivered to the market as a result of the system we are following.
As to that story of the group of hogs, I do not know how closely it was followed through but I imagine that if a man brought iu three or four hundred hogs and 50 per cent were perhaps only some ten pounds light, anyone could take them out of the market and feed them a few days and bring them back and have them converted into selects. It is not the fault of the hog that he is not a select; it is the fault of the man who feeds him. If one man brought him into the market light and someone gets him and takes him out and finishes him properly, he will be a much better hog when he is brought back.


Wilbert Ross Aylesworth: I am not talking of hogs of that kind. This group I referred to were all done in one day.


James Garfield Gardiner: Well, I would want to know more about that. I hope we have no inspectors who are dumb enough to have that put over them; if we have, they should not be there. Many stories of that kind go _ round regarding grading activities, but one has to follow them through in order to be certain about them.
I think we have pretty well discussed this item. Could we call it carried and go on to the next, the dairy products board?


Mr. GRAYDON:: When I was discussing agriculture generally on another item last night the minister intervened to say that
TMr. Gardiner.]
anything I might have to say with respect to the milk situation might be said on another item, and this appears to be an appropriate one. I think it is essential that the committee make as much progress as possible, and while I was intending to make some extended remarks I shall content myself this afternoon, in order to hasten proceedings, by simply asking the minister a question. I think in December last a bonus was given to the whole milk producers in the Toronto milk area of 30 cents a hundredweight. On May 1 the bonus was withdrawn, if my information is correct. On May 15 in the Globe and Mail I noticed a report of a meeting of the executive of the Ontario milk producers association which dealt with the matter. They were very firm in their request that the bonus be restored. Would the minister care to comment upon that situation?


James Garfield Gardiner: The position in connection with whole milk is that we have really had no set-up; it is a provincial matter. I am sorry the hon. member for Fraser Valley is not in his place-that is what I was trying to say last night, trying to put the responsibility where I think it belongs in connection with milk. The milk supply comes from round about the cities, so that in most instances it is limited to one province. That would not be altogether true in connection with Montreal, but it is of Toronto and most of the Ontario cities. The provincial governments have had boards established and there have also been boards in those cities that have been controlling milk supplies.
The activities in connection with the price of milk so far as this government is concerned have been under the prices board, which in this matter has been dealing not with us but with the provincial boards. The order given out from Toronto yesterday was an order of the Ontario board. I am not able to say what discussion the prices board had with them, or what all the discussions were in connection with the subsidies that were paid for a time and finally cut off. I only know that, judging from what came to our office in regard to it, there were communities in which there were very wide differences resulting from the paying of those subsidies. They were put on a basis under which a control was exercised if increases had been made within a certain period of time. It was presumed that if an increase had been made within a certain period of time, the price had been put up as high as was considered necessary, and that therefore it should not be further increased by' the payment of a subsidy'. In one case that I have in mind that resulted in one town paying, I think, $2.55

War Appropriation-A(j riculture
for milk and another, a smaller place not far away, paying as little as $1.80, while another place paid something like $1.95.


Gordon Graydon: That was a general
bonus?


James Garfield Gardiner: The bonus had that result. The one man who was very high in the beginning got a thirty-cent bonus, because he had not increased his price within a certain period of time. With all these discrepancies in view the board worked out a new plan, and announced that by May 1 they would be prepared to put it in operation. All these discussions took place with provincial organizations. I am certain that any of our officials who were invited to give assistance or information did so and cooperated in every way possible, but this was an arrangement entered into by the wartime prices and trade board after taking up the matter with provincial organizations, which have always controlled the milk trade.


Gordon Graydon: The minister mentioned a decision which was reached yesterday. Is he in a position to give any information on the situation which has developed?


James Garfield Gardiner: I just referred to the announcement made yesterday in Toronto, to the effect that a price of $1.95 had been set for 3-5 per cent milk. I have no further information except what I saw in the newspapers.


Gordon Graydon: I have not seen the press announcement yet.


Mr. TUSTIN:: Did the Ontario milk board not act as a board of arbitration in that case?


James Garfield Gardiner: I think perhaps they did.


Mr. McNEVIN:: My purpose in taking part in this debate is to urge upon the Minister of Agriculture the necessity of authorizing an increase in the price of butter, and of course my remarks will also be directed to the Minister of Finance, under whose jurisdiction the wartime prices and trade board operates. I believe the Minister of Agriculture and the officers of his department are fully aware of the necessity of increasing the return to the butter producers of Canada. The importance of the dairy industry in the commercial life of this country is well known. Perhaps I may emphasize it by saying that the total gross annual production of agricultural commodities in Canada is somewhere in the neighbourhood of $1,000,000,090, of which almost one-quarter is dairy production. Something like 15 per cent of the
population of Canada derives the major portion of its income from the dairy industry, including, of course, those engaged as farmers in the production of dairy products, and the various other agencies having to do with the manufacture and distribution of these products.
I think I am correct in saying that butter was one of the first commodities on which a ceiling was established. At the time the price of cheese was fixed last year, that price was considered fair. But there has been a substantial increase in the price of cheese since then, and I think also in the price of milk for manufacturing purposes, so it will be seen that the return of the farmer engaged in the production of butter fat has not similarly increased. Then, when we realize that about one-half of the dairy farmers of Canada are engaged in the production of butter fat we get some idea of the number of people who are being discriminated against, to a certain extent, in connection with the production of their portion of our dairy products.
I believe it was the hon. member for Fraser Valley (Mr. Cruickshank)-and perhaps there were others as well-who referred to the shipment of dairy cattle to the United States and spoke of the resulting depletion of Canadian herds. This has some bearing on the matter. As a breeder of dairy cattle I wish to say emphatically that I do not believe we should take any action that would tend greatly to disturb that market. For many years the breed associations of Canada have spent a great deal of time, money and effort in fostering and developing a remunerative market in the United States for surplus dairy cattle, and anyone who is breeding dairy cattle knows that each year there is a surplus to be disposed of in some manner. Dairy farmers do not sell all their best cattle. They sell a few good ones, mixed with a few ordinary ones to balance up; and no wide-awake dairy farmer is going to break down the general level of his herd, even if the price is attractive. He will protect himself in any event.
In order to support my suggestion that we should increase the price of butter, I want to refer to the depletion of butter stocks and the decrease in the production of butter. I have before me the storage figures as of the end of May for the years 1940,1941 and 1942. According to figures released by the dairy branch of the department, we had in store as of the end of May, 1940, some 10,337,000 pounds of butter. As of the same date in 1941 we had 9,580,000 pounds of butter in store, and on the same date in 1942 we had 5,838,000 pounds. So there has been a decrease of about 4,000,000 pounds in the amount of butter in storage. But that does not tell the full story. With the normal increase
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in population in Canada, amounting to about 180,000 persons annually, at 30| pounds of butter per year per person we have a normal increase in the consumption of butter amounting to about 5,000,000 pounds. Therefore, presuming that this year we have a normal increase in population, we have a prospective decrease in the available supply of butter amounting to between nine and ten million pounds, which is likely to lead to a serious situation if this trend continues. Then, according to a report covering the nine principal cities of Canada, as of June 1, 1941, there were available in those cities some 9.000,000 pounds of butter. At the same date this year there were available only 3,000,000 pounds of butter, which indicates a definite trend in the butter situation. Since we produce perhaps five-sixths of our butter during seven or eight months of the year, it is essential that we build up a substantial surplus during the months of high production, or we are going to face a very great shortage later on in the year.
The increase in the price of cheese had the effect of substantially increasing the production of that commodity during the first four months of this year. In the first four months of last year we produced approximately 7,000,000 pounds of cheese, but with the increased price prevailing this year the production in the first four months was about 26,000,000 pounds.
In the province of Quebec they have what are known as whole milk creameries which buy the whole milk and separate it. No less than forty-five of these creameries switched over from the production of butter to the production of cheese. While that situation does not prevail in Ontario, it indicates the trend. The lack of equality between the price of butter as compared with the price of cheese is due in a large measure to an increase in the price of cheese this year of approximately four cents a pound, along with the continuance of the government bonuses of last year. On cheese scoring 93, which represents an average score, the bonus amounts to approximately 3 cents a pound of cheese. One pound of fat produces 2-6 pounds of cheese, and therefore such assistance represents 7-8 cents a pound on fat if it were manufactured into butter. I am aware also that the government absorbs a portion of the 20 cents a pound cheese price.
With prices of butter and cheese at present levels, prices received per pound of fat by the primary producers are approximately 36 cents and 51 cents respectively, an advantage of 15 cents a pound of fat to the cheese patron. This would amount to 524 cents per 100 pounds for 3-5 per cent milk. Of course the butter producer keeps his skim milk on the farm, and some question might arise as to the value of that skim milk. Some put this at 15 cents [Mr. McNevin.l
per 100 pounds, some at 20 cents and others at 25 cents, but if we take 30 cents, which would be the top price for skim milk, there is still an advantage accruing to the cheese patron of approximately 22J cents per 100 pounds for 3-5 per cent milk.
I see no reason why one half of the dairy farmers in Canada should have to carry this heavy burden as far as their price returns are concerned. We must keep in mind that there is an unlimited export market for cheese, but the market for butter is domestic. According to the figures I have given, without question we are facing a butter shortage in the Dominion of Canada. The only logical remedy is to increase the price of butter in order to give the producers added encouragement. I do not see why there should be such a great difference in the return received by a farmer producing a commodity that is to be sent overseas and the farmer who is producing a commodity that is kept in this country. The general level of wages and employment in Canada is at a high point at the present time, and there is no reason why a fair price should not be paid to butter producers.
I urge that consideration be given to increasing the price of butter fat by at least five cents a pound. This increased price would not bring the return of the butter producer up to that of cheese or manufactured milk producers, or those who are commonly termed fluid milk producers, but it would provide an incentive to increase production. We should take strong measures to prevent the possibility of the rationing of butter in Canada which might bring about an agitation for the manufacture of oleomargarine or some other substitute. Butter is a nourishing, health sustaining food, and we should recognize the needs of the Canadian butter producer and give him a fair deal.


James Garfield Gardiner: Before there are any further remarks, perhaps I should explain that the break-down of this vote of $1,514,950 is $14,950 for administration and $1,500,000 for the purchase of butter. The only time at which butter would be purchased would be when the price falls below 32 cents a pound at Montreal. In other words, $1,500,000 of this vote may or may not be used. The ceiling price on butter is 35 cents a pound and the floor is 32 cents a pound. Even with the present ceiling price, the price of butter is dropping at the present time. If it goes down as low as 32 cents a pound the board has power to go into the market to buy butter in order to prevent the price from going lower. We are taking protection against the running down of the price. The floor is

War Appropriation-Agnculture
set by the Department of Agriculture; but, as has been said, the ceiling price is under the control of the prices board.


Mr. WARREN:: I should like to say a word or two in connection with one feature of the remarks of the hon. member for Victoria, Ontario (Mr. McNevin), that is, the sale of dairy cows in the United States. I do not think that business ought to be interfered with at all. There is no more treacherous or risky business than the handling of dairy cattle. I know of one man who has been coming here from the United States since 1917 in order to purchase dairy cows. He takes them to his farm near Watertown, and other United States dairymen come here to purchase cows. Last year this man spent $100,000 in one district. The cows he purchased were not necessarily all raised in that particular district. The dairymen may deal in cows on the side. Some of these men will go perhaps one or two hundred miles out of the district in order to buy cows to increase their herds or to have some for sale. The United States buyers come in, and they generally know where they can get a truck load of cows to take back. We have had this amount of money coming in to help relieve a surplus of dairy cows. If there were no market for these dairy cows, many farmers would not raise their heifer calves. They know they have a chance of getting rid of any good dairy cows that they might have. Every year they are raising heifer calves, and in that way not only keeping up their own herds but having a surplus for sale. I think that market should not be interfered with but rather encouraged because it has been of considerable benefit to the dairymen of the whole district.


Joseph-Arthur Bradette: The next item is $978,271 for the special products board.


Richard Burpee Hanson: I wish to ask the minister some questions with respect to the dehydration of potatoes and to show how it affects us in New Brunswick. I am aware that two orders in council were passed, one in December of last year and another one more recently, making an appropriation, I presume out of this vote, to extend the policy of providing additional dehydration equipment. During the last war a substantial amount of dehydration was carried on in New Brunswick, and it was associated with the manufacture of starch. I am told that that is the only economic way in which the dehydration of potatoes can be carried on, because the peelings of the potatoes and the washings contain all the elements that are required in the manufacture of starch, and I am told further that the manufacture of the starch will cover the whole cost of the dehydration process.
We are desirous of having a couple of plants established in New Brunswick. The advantages would be obvious. Ninety per cent of the weight of a potato is water. Therefore a freight on three dollar potatoes shipped to a point in Nova Scotia means a considerable loss entailed in freight, and if the dehydration plant is not run in connection with the manufacture of starch, that specific part of the product which would make starch, the peelings and the washings, goes down the sewer. That is not a profitable proposition; it is not an economic method.
There are people in New Brunswick who are willing to operate a dehydration plant for potatoes in conjunction with the starch industry, and I ask the minister if he will not see that arrangements are made for the establishment of two plants in that province for the dehydration of potatoes. There is no such plant in Prince Edward Island, and perhaps consideration might be given to establishing one there too.
I am satisfied from what I have learned, that if one or two dehydration plants were established in New Brunswick in connection with the starch factories at present established there, all that freight would be saved, and it would be the economic way to handle the product. I am told that during the last war there was a plant in Carleton county, New Brunswick, employing 150 hanjis. It is said that the product was not perhaps as good as it ought to have been, but scientific processes have advanced a long way since then, and I understand that a product of the proper quality can now be produced.
The provincial department of agriculture of New Brunswick has been in communication with the minister and is asking for this. It would not be a large expenditure, and since we have had very little war work down in New Brunswick I would urge the minister to give serious consideration to appropriating $50,000 to establish two plants in New Brunswick for the dehydration of potatoes. There are men there who are willing to erect the buildings and do everything else that is necessary if this grant be made, and it might be returned to the department out of the profits.
I am making this plea on behalf of the New Brunswick potato producers. They have at times a surplus of potatoes. There may not be a surplus this year, but in three out of four years they have a surplus and this is one way in which they could utilize their surplus product. The suggestion I am making is the economic way of handling the situation
War Appropriation-Agriculture

with respect to potatoes. I am not speaking with regard to other vegetables at all. I have no plea to make for them. They can continue to be dehydrated in the plants already established in Nova Scotia; but with respect to potatoes I think plants ought to be established near starch factories, because this would not only mean a substantial saving in freight rates but a saving in the peelings and washings which could be converted into starch and which now go down the sewer. That is the way in which the matter is represented to me, and it seems to me to be a reasonable proposal. I hope the minister will give it his favourable consideration. Is it not true that the provincial department of agriculture have asked for this? Is it not true that they have pointed out the economic value of such a proposal? If they have, I just wish to supplement their representations to the minister with my own.


James Garfield Gardiner: The committee will
realize, of course, that the discussion in connection with dehydration should properly take place under one of the previous items, but I think it is quite proper that I should answer now the question put by the leader of the opposition.
The matter does not come under the special products board, which was set up for the purpose of making arrangements with Britain with regard to any products other than those which come under the dairy products board or the bacon board. It has to do with eggs, for example, and other products of that kind.
It is true that the government of New Brunswick have made representations along the lines just stated by the leader of the opposition. One of the members of that government, as the leader of the opposition knows, is one of the big producers in that province and probably knows as much about the matter as anyone else there. The hon. member for Victoria-Carleton (Mr. Hatfield) is also quite a producer in that area, and I think he too will agree with everything that has just been said by the leader of the opposition.
The representations made are as has just been stated by the leader of the opposition, that if the dehydration process is carried on at a place where there is not a plant which is producing starch, this adds greatly to the cost of the dehydration. In other words, one has to be more careful about the peelings in order to get the full value out of the potato. But when the dehydration is done in conjunction with the making of starch, the peelings can be of any thickness desired, in order to make sure that the rest of the product is pure potato for making the dehydrated product.


Richard Burpee Hanson: And the washings are not wasted, as well as the peelings,


James Garfield Gardiner: Yes; that also is involved. In other words, the cost is pretty well taken care of by using the outer part of the potato for starch. That is the representation made to us, and any investigations and inquiries we are making with regard to the placing of any dehydration plant for vegetables in New Brunswick are in relation to establishing a plant for dehydrating potatoes in relation to the plants already there. If anything is done, I can assure the leader of the opposition that an effort will be made to have the first developments take place where there are starch-producing plants in order to get exactly the results which he has indicated.
I would point out, however, what was pointed out by the hon. member for Yale (Mr. Stirling), last night, and what I emphasized later, that this plan is still in the experimental stage. We have had discussions with the representative of the British food ministry with regard to the whole matter. The British government are establishing dehydration plants on the same plan in Great Britain and hope to make use of them before coming to us for our products. We are following along the line which the hon. member for Lethbridge suggested last night, of trying to see ahead tc what might be expected from this country ir potatoes and other products that might require dehydration. Up to the moment we have nc orders, and we have no assurance from Britaii that we shall have orders; but we are confident that the establishment of some of these dehydration plants, particularly those that can be operated in association with other plants such as the starch plants in New Brunswick, is required and would be of assistance in connection with the war, and if not, that they would still be of benefit in' dealing with the surpluses which we have occasionally in times of peace. Any assistance we give in that direction in that area, if the development leads to an increase in the number of plants, wall be made just along the lines suggested.


Richard Burpee Hanson: I am content with that.


Mr. HATFIELD:: I am glad to have the
assurance of the minister that New Brunswick is receiving attention with regard to dehydration plants. During the last war I had a lot of experience in the dehydration of vegetables, both potatoes and turnips. I was interested in a company which dehydrated practically 90 per cent of the potatoes and turnips which were dehydrated during the last war. For the most part the quality of the goods proved

War Appropriation-Agriculture
satisfactory, especially' to the French government, for whom we manufactured a vegetable soup mixture.
What has been done to meet the shortage of milk cans? We have in my constituency a cheese factory, but we cannot secure milk cans for conveying milk to the factory. Has anything been done toward the securing of cans?


James Garfield Gardiner: With regard to the
manufacture of milk cans, it is, of course, a priority matter which has to be dealt with by the priorities people. They have given to the production of milk cans what we think is a liberal amount of the requisite materials. It may not be as much as could be used, but still, as compared with other uses that are made of the same materials, we consider it is a liberal pi-ovision.
Some attempts were made to bring old cans back into use for the purposes for which they were intended. It has been found that milk cans are piled up almost anywhere and used for almost any purpose. Hundreds of them were brought back in compliance with a regulation which compelled people to return cans which were owned by the people who were presumed to be using them, and many cans were uncovered in various places. One official told me the other day that dozens of cans were found piled up behind one building last winter, and frozen in the ice. They had to chop the ice away in order to get the cans out for use at a time when there was a shortage of cans in many' parts of the country. Efforts are being made to utilize all of the old cans which can be found and put into condition to be used. An effort through priorities is also being made to have a proper number of cans manufactured.


Heber Harold Hatfield: We have had cans on
order for over four months, and have not received a can, and the manufacturers tell us that they cannot secure any material.


Mr. GILLIS:: I should like to make an
inquiry of the minister with respect to the regulations being administered for the marketing of wool. This is about the only item under which I can make that inquiry .


James Garfield Gardiner: It really does not come under this. Properly it would come under my general estimates.


Mr. COLD WELL:: Perhaps the minister
will be good enough to answer the question.


James Garfield Gardiner: Yes, if it is not too
long.


Mr. BLACKMORE:: Will the minister tell
us what does come under this item.


James Garfield Gardiner: Eggs, principally.


Clarence Gillis: I have received several complaints from Nova Scotia with respect to the regulations laid down a year ago with regard to the marketing of wool. I made inquiries from Mr. Dick, the wool administrator, who referred me to the wool board, and I have not heard anything from them, but he did advise me that the regulations came under the purview of the Department of Agriculture. The complaint is that prior to the enactment of these regulations the wool was gathered by agents from the farmers, and that all of the wool was marketed in that way. In addition to that, the farmer had the privilege of selling direct to the factories. Since the regulations were enacted, all of the wool has to be marketed through regular grading centres. The farmers complain that they are receiving less money now for their wool graded in that way than they were prior to these centres being set up, when it was taken direct from the farmer. It is necessary at times to ship the farmers' wool as far as three hundred miles, and the result is going to be that probably 50 per cent of the wool will be left on the farms. I do not know anything about the matter; that is the information I get from men who are engaged in this work. Would the minister enlighten us as to what the regulations are, how many centres are set up in that province, and what is the price now compared with the price prior to the enactment of the regulations?


James Garfield Gardiner: As regards the last question, I think I can answer it by saying that there is very little comparison between the price now and the price previously, because the price previously was pretty much a prewar price, and of course the price of wool jumped rapidly after war was declared. I believe it was the first product which was put under control by the government, because of the demand for it for making uniforms and other clothing necessary for war purposes, which resulted in a rapid rise in price.
As far as the other matter is concerned, I think it could be much more effectively discussed under my general estimates, because of the fact that I have not the information here with regard to it. It is an item in the estimates having to do with grading, and really comes under the regular estimates, and if the suggestion meets with the approval of the hon. member I would prefer to leave the matter until that time.


@Acting Chair(man)? of Committees of the Whole: The next
item is: "Freight assistance on western feed grain, $2,000,000."

TVar Appropriation-Agriculture


Thomas Miller Bell: Would the minister explain just what is being done with regard to assistance in the movement of grain both east and west?


James Garfield Gardiner: The arrangement relates to grains that are used for feed, and it includes wheat as well as coarse grains, and corn going west, not going east; corn going west from Manitoba to British Columbia, for example, but not corn coming east. All mill feeds are included as well. We are paying the freight from Fort William east to points in all of the provinces east; and on grains going west we are paying freight from Calgary and Edmonton west into British Columbia to be used for feeding purposes. Those payments up to date amount to about $5,000,000. We estimated that they would cost us about $6,000,000 throughout the year, but up to date we have paid out about $5,000,000. In short that is what is happening.


Major James William Coldwell: Well, it is mill feeds, coarse grains going west? What grades are included? Is anything being paid on low grade wheat?


James Garfield Gardiner: It is being paid on all grain, on everything declared to be feed. We pay freight.


Major James William Coldwell: Has the minister had complaints from poultry feeders and others in British Columbia regarding the prices they are paying for this grain, as to whether they are getting the advantage of this bonus or not? When I was out west in December I heard complaints, but I did not receive any specific proposals or suggestions. I wondered if complaints had been made; if so, what was in them, and what had been done.


James Garfield Gardiner: We have had no complaints at all of just the nature that is suggested. We have had complaints arising from misunderstandings with regard to what freight rate was going to be deducted. There is a special order known as tariff 145 under the transport board, the old railway board, which by reason of representations made by the hon. member for New Westminster (Mr. Reid) over quite a number of years resulted in a reduction in the rate on grains that were being sold for feeding purposes in British Columbia. When we put the regulations into effect covering British Columbia we provided that that was the freight rate we were to pay wherever it was applicable. The suggestion has been made that some people have been preventing that from going into operation, as w'as intended, to the disadvantage of some
[The Acting Chairman.]
others, and we have been correcting the situation from time to time. I think it is working satisfactorily now.


Richard Burpee Hanson: As I understand the position in reference to fertilizers, this is for the production of fats, to which the minister has referred, to be devoted to the war effort, and it has no relation whatever to assistance to farmers in the production of other crops.


James Garfield Gardiner: No. The intention, is to assist fanners to produce coarse grains for feeding purposes in order that they might be fed to live stock to produce fats or dairy products or pork or beef products.



FINANCE

@Acting Chair(man)? of Committees of the Whole: The next
item is "auditor general's office".


Mr. ILSLEA :: The items of the finance estimates are: first, the auditor general-


@Acting Chair(man)? of Committees of the Whole: Shall we take them seriatim?


James Lorimer Ilsley: I think that would be best.


Thomas Langton Church: 
James Lorimer Ilsley: The auditor general conducts post audits, not pre-audits. He has a comparatively small staff, between three and four hundred. I think to be exact it is 357. That staff of course does not compare in size with the staff of the comptroller of the treasury. The comptroller of the treasury pays the bills that are due from the government. The staff there is very large. I could not say the number offhand, but I think the temporary staff is between 3,000 and 4,000.
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The auditors that the hon. gentleman has spoken of as being in the various departments are employees of the comptroller of the treasury. His responsibility is very great; for it is he who makes sure that the amounts are due and payable, that they are authorized by some statute or vote of this parliament, and that the proper allotment has been made. All that must bo ascertained before the accounts are paid.
There are no auditors so far as I know who are responsible to the various ministers other than the Minister of Finance. There may be some exceptions to that; I think one is that the Department of Munitions and Supply act as agent for the United Kingdom government in purchasing and making payments in this country, and that department has a certain financial staff of its own which is engaged in this work which it has undertaken on behalf of the United Kingdom government. I do not think there are any other exceptions, but if so they are insignificant. The cost accountants and auditors and so forth are members of the staff of the comptroller of the treasury.
The auditor general as an officer of this parliament, responsible to this parliament, comes along afterwards and makes test audits here and there, checking three things: first, that there is a vote that is authority for the payment of the money; second, that there is a proper allocation out of which the money can be applied to the purpose to which it has been applied; and third, that the facts justify the payment. That is the system of audit of payments in this country, putting it very generally.


Richard Burpee Hanson: I think I raised this question once when I discovered a certain order in council. The minister will agree with me in this general statement, that the underlying principles of the Consolidated Revenue and Audit Act have been largely set aside for war purposes, owing to the exigencies of the occasion. A new system has to a degree supplanted what was intended by the audit act passed in the early thirties, and which was intended to be a safeguard of public expenditure. The audit act was modelled with great care. The present auditor general was then, I think, the comptroller of the treasury.
I remember the matter being referred to the banking and commerce committee, and we went into it with great care. It was intended to plug up some of the holes that had been found in the old system with respect to expenditures by departments without a vote of parliament. The minister has explained that it was necessary to set up a new system to take care of the present situation. I have been 
content with that all along, but I should like to have his assurance that the greatest care is being exercised in the checking of accounts before they are paid.
There is the question of cost-plus contracts. Per se I have no objection to cost-plus contracts. They operate well if everyone is honest. The danger is that all people are not honest in working out cost-plus contracts. I am content for my own part-I am not speaking for anyone else-to let it go without any further discussion, on the theory that the minister and his officials are watching the matter carefully. If we find that the system does not work, or if there are abuses, then I think the position will have to be reviewed.


James Lorimer Ilsley: Yes. The section of the Consolidated Revenue and Audit Act to which the hon. gentleman refers-I am not sure of the number-is a very important section. But it proved to be unworkable under war conditions. In the fall of 1940 the Department of Finance did considerable work in devising a change in the system which would enable war business to be proceeded with. There is an order in council-


Richard Burpee Hanson: Passed
under the War Measures Act.


James Lorimer Ilsley: Yes, passed I think oil
November 19, 1940, effecting an amendment to that vital and important section. But I think that no exception can be taken to the order in council on the merits. The exception that was taken on one occasion was that we should have come to parliament for such an important change; that was debated here.


Richard Burpee Hanson: Parliament was in session then, in November, 1940.


James Lorimer Ilsley: Yes. The new plan was worked out in September and October. The order was drawn and redrawn, suggestions made and further changes, and a tremendous amount of work put on it. I think it is a very workable order and that it adequately protects the treasury. The objections that I get are not that amounts are paid without adequate investigation, but the reverse-that accounts are delayed; that the comptroller of the treasury is obliged to make such careful investigation that persons dealing with (he government do not get their money as soon as they should.


Richard Burpee Hanson: That is because of congestion of business, I expect.


James Lorimer Ilsley: Yes, very largely.


Thomas Langton Church: I want to place this
responsibility. There are twenty-five of these

War Appropriation-Finance
boards expending money without the authority of parliament, ultra vires. I read from the auditor general's report, for year ended March 31, 1941, page 541:
There are approximately twenty-five statutory or corporate bodies performing administrative functions.
He includes as corporations the Department of Munitions and Supply and several others.
He says:
In some instances the exercise of financial control is similar to that applied to expenditures of a department under a minister. . . .
But notice these words:
. . . but the terms of some acts are of such a nature as to vest final responsibility in the corporate management. The various acts stipulate whether the audit of accounts is to be by the auditor general or by commercial auditors. With the growth of this means of administration, it may be in the public interest to establish a practice whereby any qualification in an audit certificate may be promptly investigated and a procedure provided whereby expenditures may be recovered when an ultra vires payment is established.
That is the practice in New Zealand in connection with corporations and boards corresponding to our Department of Munitions and Supply, for example. In New Zealand it is provided by legislation that these corporations have to account to parliament for their expenditures; and if payments are made ultra vires of their authority a great deal of the money can be recovered. That is what should be done here, where we are paying out hundreds of millions of dollars.
I should like to refer to the travelling expenses of these non-salaried officers, the dollar-a-year men, which are referred to at page 540 of the auditor general's report. He directs attention to the fact that many of these payments are illegal. That places an onus on me as a member of parliament; but now, having done my duty in bringing the matter to the attention of the house, I am absolved of any responsibility. We have hundreds of these men whose travelling expenses are being paid. They are running all over the continent of north America, giving lectures and all the rest of it. In this regard the auditor general states:
The status of those who serve without remuneration is indefinite for executive travel regulations purposes. The audit disclosed cases of travel expenses being paid, although the records do not establish that the individual holds any public appointment.
They have no authority at all; they are not acting as agents of parliament, and the auditor general calls the situation to our attention.
Here we are in the seventy-eighth day of the
session, yet we have never had a chance to say a word about it.
The trend of policy now is to have such individuals certified as appointed without remuneration. More generally, appointments without salary are made by an executive order which stipulates, as a rule, a per diem allowance which may be claimed in lieu of a detailed accounting for subsistence and shelter. But eases were noted of accountings being made without employing the permissive per diem rates. Neither departments nor the treasury insisted on non-salaried officers submitting claims in the detail required from salaried officers. Likewise, the standards of travel to be observed by salaried officers were not strictly applied to those who serve without remuneration.
Then he goes on to refer to some matters in detail. No doubt we have a good auditor general; he has served under very fine ministers, but there is no public control over the great amount of money we are spending and we refuse to back him up and veto it. I can tell you that money is being wasted all over Canada, with absolutely no control and no report made to parliament. I am dealing with an important matter, which directly affects the navy department, and I think I should have the attention of the minister of that department, as well as the attention of others in the committee, to whom I am speaking. I should like to have order. I am not raising this question for fun, and I do not wish to be interrupted. I have brought up matters in the house relating to the navy, with regard to expenditures, and I have been unable to get proper replies from the minister. I object to this being treated as a trivial matter. We have appointed an auditor general, a good man who has done his duty. Would that we had an auditor general like Mr. McDougall; such is needed to-day.
I object to the way the business of the country is being conducted. I can only add this, that now I have brought the report of the auditor general, and the illegal expenditures that have been made, to the attention of parliament, I have done my duty. The last time the estimates were under consideration I also raised this question, and pointed out that we have no control over these expenditures. I can tell you this, that in many cases We have no audit at all. Even if we have an audit which is not satisfactory, the taxpayer is not protected. Some of these contracts are not carried out properly, and in my opinion something should be done about it. We have in the house many hon. members representing the farmers. Do they know of any private corporation that could vote money
Questions

like this, and stay in business? Here we are spending a mint of money without proper control; the country is suffering; the minister is proposing to impose income taxes and various other taxes on the poor people; the men running our retail stores are being put out of business. The other day the chairman of one of our boards said the competitive end of any business was through for the duration of the war, and after the w'ar is over these bureaucratic boards will continue to spend money like water and just snap their fingers at the high court of parliament. We might just as well go home if we are to have this expenditure of public money in this way, without any public control. How are the war expenditures dealt with? Well, we have the report of the auditor general; we know how that is done. I object to these expenditures, Mr. Chairman. I have raised the question, as I did last session, and having done so I have done my duty.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.
Thursday, June 4, 1942