Mr. LALONDE:: 1.	What bus routes in the provinces of Quebec and Ontario have been cancelled or modified?
2.	What different bus routes are operating in each of the said provinces at the present time, rnd of what mileage is each such route?


Mr. HOWE:: 1 and 2.
(a)	Total route miles operated by bus companies in 1941: Ontario, 7,587; Quebec, 8,725.
(b)	Estimated bus miles per year saved by curtailments and abandonments to date July 1, 1942: Ontario, 2,527,402; Quebec, 1,769,962.
The above figures are exclusive of city curtailment because the service in most cases parallels street car lines, and because the problem is met by modification rather than abandonment.	*
In order to answer in detail the above question it would be necessary to require complete statistics from 125 bus operating companies in each province, the great majority of these having multiple routes.



CANADIAN ARMY-ACCIDENT TO CADETS IN BATTLE EXERCISES IN OTTAWA

Mr. CHURCH:: 1.	Will the government order a military court of inquiry into the drowning of the cadets from Brockville, in the Rideau canal, Ottawa?
2.	Will a public civil inquest be held into the matter?
3.	Will pensions be given the next-of-kin?
4.	Who ordered these men to swim the canal, and what life-saving appliances, or live-saving guards and equipment were there on duty as precaution ?
5.	Who were the officers in charge, and had they canoes or boats near the scene in case of accident?
6.	What life-saving facilities had the city of Ottawa there?
7.	What life-saving equipment has the city of Ottawa, the government or the Ottawa improvement commission?


Mr. RALSTON:: 1.	A court of inquiry has been convened on the order of the adjutant-general and is at present sitting at the city of Ottawa.
2.	This is a matter which comes within the jurisdiction of the attorney-general of the province of Ontario.
3.	This is a matter which comes under the Department of Pensions and National Health.
4.	5, 6 and 7. These are all matters which in so far as they are relevant are the subject of investigation by the military court of inquiry mentioned in paragraph 1.



WARTIME PRICES AND TRADE BOARD-INTERESTS OF FARMERS

Mr. BRUCE:: 1.	Are there any practical farmers on the wartime prices and trade board?
2.	Will the government appoint an advisory agricultural committee to assist the wartime prices and trade board?


Mr. ILSLEY:: 1.	The wartime prices and trade board consists of twelve members, all of whom are civil servants or officers of government agencies. Two members of the board are senior officers of the Department of Agriculture.
2.	Advisory committees representative of various branches of agriculture have already been appointed. Others are being selected and will be announced in the near future.



WARTIME PRICES AND TRADE BOARD-PROSECUTIONS

Mr. CHURCH:: 1.	Are all orders in council, instructions, rules and regulations of the wartime prices and trade board equitably enforced in Canada?
2.	For what classification of offences were prosecutions made to the number of 150, as set

Questions as Orders for Returns
out in sessional paper No. 341, as follows: Nova Scotia, 8; New Brunswick, 1; Quebec, 22; Ontario, 96; Manitoba, 6; Saskatchewan, 8; British Columbia, 9: and on whose recommendation for prosecution?
3.	Are the regulations enforced as strictly in the eight other provinces as they are in Ontario?
4.	Was it necessary to engage special counsel?
Mr. ILSLEYU
1.	Yes.
2.	(a) Classification of prosecutions for alleged offences against regulations of The Wartime Prices and Trade Board, to June 15, 1942:
Rationing
Rental	Price	and	Total	regulations	ceiling	hoarding	OthersNova Scotia	
8	7	1	. .New Brunswick	
1	1	. .Quebec 	
22	10	7	5	Ontario 	
96	76	1	17	2Manitoba 	
6	. .	3	2	1Saskatchewan 	
S	5	2	1	British Columbia	
9	6	1	2	[DOT][DOT]150	105	14	28	3
(b) On recommendation of officers of the board and officers of the attorneys general.
3.	Yes.
4.	Yes.



POSTMASTERS


Mr. KIRK:: Due to the increased cost of living since September, 1939, has the government or Post Office Department given consideration to, (a) the matter of increasing salary of postmasters; (b) granting to postmasters a cost-of-living bonus?


Mr. MULOCK:: (a) No.	(b) A cost-ofliving bonus has been granted postmasters.



RURAL MAIL SERVICE-REMUNERATION AND COST-OF-LIVING BONUS

James Ralph Kirk: Due to the increased cost of living and operating expenses since September, 1939, has the government or the Post Office Department given consideration to, (a) the matter of increasing the amount paid to mail couriers (apart from the 5 per cent increase to take care of increase in price of gasoliue) who have been awarded mail contracts prior to first 5 per cent increase in cost of living and subsequent 5 per cent increases: (b) the matter of paying a cost-of-living bonus to mail couriers?


William Pate Mulock: (a) and (b). Prices paid under mail contracts are determined by public tender and are therefore not uniform.
New contracts are regularly being awarded at prices based on present conditions.
In the case of contracts awarded when operating conditions were normal, at the request of the contractor consideration is given to the reinvitation of tenders for such
contracts and the awarding of a new contract at an equitable rate based on existing conditions. The holder of the old contract is not excluded from tendering for the new contract.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. STOKES:: 1.	Was a new postmaster recently appointed at Frankford, Ontario? If so, what is his name?
2.	When was he appointed?
3.	What is his salary?
4.	Is he a veteran of the last great war?
5.	If not, did any veterans of the last great war make application for this position?
6.	On whose recommendation was the present postmaster appointed?
7.	Is it the policy of the Post Office Department to appoint veterans whenever possible to the position of postmaster?


Mr. McLARTY:: Return tabled.


ASSINIBOIA, BASK., POST OFFICE
Mr. McGREGOR:: 1.	Who is the postmaster at Assiniboia, Saskatchewan ?
2.	When was he appointed?
3.	Was he at one time a member of the R.C.M.P.?
4.	If so, was he discharged therefrom and what was the reason for his discharge?
5.	What was the total income received by the postmaster in each of the years 1939, 1940 and 1941, including salary and commissions?
0.	Were orders recently given by the department that mail for the R.A.F. airport three miles distant from the post office at Congress was not to be delivered through the said post office but through Assiniboia?

Questions as Orders for Returns


PRICE CEILINGS-BUTTER
Mr. HATFIELD:: 1.	Will the subsidy on butter apply to dairy as well as creamery butter?
2.	What percentage of the total Canadian butter is manufactured on the farm (dairy) and in the factory (creamery) ?
3.	How does the government propose to compensate the farmers who produce dairy butter if they do not come under the butter-fat subsidy?


PRODUCTION OF WAR METALS AND MINERALS
Mr. DIEFENBAKER:: 1.	What is the nature of the arrangement made by the Department of Munitions and Supply as recently announced by the metals controller whereby ores or metals produced thereunder will be supplied to the United States government wartime company known as the Metals Reserve Corporation?
2.	What are the methods whereby Canadian production of war metals and minerals is to be increased?
3.	Have any sums been advanced or will the United States make any advances to Canadian corporations or to the Canadian government in order to encourage the production of war metals and minerals?
4.	Has the aluminium industry of Canada since the beginning of the war received any payments or loans from the United States, having as its purpose the necessity of extending the production of aluminium?
5.	If so, what amounts have been advanced to date?


COST OF PLEBISCITE
Mr. LACOMBE:: 1.	What has been or will be the cost to the public treasury of taking the plebiscite on April 27 last?
2.	What was the remuneration and travelling expenses of the returning officers in each electoral district?
3.	What was the remuneration of the deputy returning officers?
4.	Where were the polling booths located?
5.	What was the remuneration of the poll clerks in the different booths?


PLEBISCITE-PUBLICITY
Mr. LACOMBE:: 1.	What amount of public money was or will be expended to pay the cost of broadcasting the speeches of the Prime Minister, ministers of the crown and the leader of the opposition, the C.C.F. and the Social Credit parties in the plebiscite campaign?
2.	What is the cost to the treasury of printing each speech and its distribution throughout the country?
3.	What is the total sum expended on publicity of every kind by the government in the plebiscite campaign?
(Mr. McGregor.]



LABOUR CONDITIONS


[Stage Direction]
On. the orders of the day:
Hon. HUMPHREY MITCHELL (Minister of Labour):: I should like to refer to the suggestion made by the leader of the opposition (Mr. Hanson) yesterday, that there was storage available for another half million tons of Nova Scotia coal. I have had the matter looked into, and I am informed that the storage facilities are filled to capacity at the moment, with 700,000 tons of coal banked, and that until some of this coal is moved, no additional coal can be placed on the banks.



DEFENCE OF CANADA REGULATIONS


Hon. H. A. BRUCE (Parkdale):: I desire to move the adjournment of the house on a question of urgent public importance, namely, the conduct of the government in prosecuting Colonel Drew, one of the counsel engaged in the recent Hong Kong inquiry.


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: The hon. gentleman moves the adjournment of the house on a question of urgent public importance, namely, the policy of the government in respect to a prosecution under the defence of Canada regulations, which involves the urgent and vital question of whether Canadians are to be free to criticize inefficiency in the conduct of the war, without endangering their personal liberty.
This is a matter which has already been before the house; it is a matter of judicial inquiry at the present moment, and pending the decision of the courts it is not in order according to the rules. Therefore I must rule that there is no urgency in the motion made by the hon. member.


Mr. CHURCH:: Might I ask the hon. and learned Minister of Justice (Mr. St. Laurent) if he would consider withdrawing the charge against the colonel?


Georges Parent: Order.



WAR RISK INSURANCE


[Stage Direction]
The house resumed from Wednesday, July 8, consideration in committee of Bill No. 56, to make provision with respect to insurance of

War Risk Insurance
property against war risks and the payment of compensation for war damage-Mr. Usley -Mr. Vien in the chair.
On section 2-Definitions.
Mr. BLACKMORE:: When we adjourned last evening I had raised the question of the reason for the deletion of subsection (m) as it stood in the bill sent to the committee. I pointed out that in my judgment the deletion of that paragraph left the bill deficient in an important respect. I also said that I believe the bill as it at present stands is confused, because of the fact that those who drafted the bill were endeavouring to defer to two principles. I desired that before I should consent to the passage of section 2 some explanation should be given which would clarify matters which to me seemed confused.
I think it can be safely laid down as a fundamental principle that no Canadian family should be obliged to suffer inequality of sacrifice for war damage. I believe this bill was designed to take care of that situation so far as it may be possible so to do. There are those who say that equality of sacrifice is completely impossible. Suppose we grant that as a government and as a -parliament we ought to be guided by the general principle that wherever possible we shall ensure equality of sacrifice. This we certainly can do in financial matters.
I think we can lay it down as fundamental with respect to this bill that every Canadian family should be guaranteed the right to continue to possess and to live in its home. That is the first fundamental consideration. The second is that every Canadian community should be guaranteed the right to be able to supply as many people after war damage as it was able to supply before the war damage was done. I gather from the discussions which I heard in the banking and commerce committee and in this house and which I have had with other people that those two principles were in the minds of the men who drafted this bill.
As I understand it, the purpose of the bill is to empower the minister to bring about or to establish or to embody in his policy those two fundamental principles: first that every family in Canada shall be guaranteed the right to continue to live in its home as such; second, that every community in Canada shall be guaranteed the right to be able to support or supply with needed services as many people after war damage as it was able to supply before war damage. If such is the case, the primary object of this bill is to ensure human values rather than financial values. In this respect it differs materially from an ordinary
fire insurance measure. A fire insurance measure aims primarily to reimburse, to the extent of his financial loss, anyone who has suffered damage from fire, the financial loss to-be judged by the value on the open market of the property destroyed. The second objective of a fire insurance measure, I take it, is to enable a fire insurance company to carry the risk, as well as other risks, and not lose money but rather to make money.
If these are the objects of a fire insurance measure, while the object of this measure is fundamentally human values rather than financial values, it becomes apparent that if the principles which govern the drafting of a fire insurance measure are applied to this measure there will be inconsistency and confusion. I believe that in at least two respects the principles governing the drafting of fire insurance measures are being applied in this bill as a means of governing the kind of measure which this shall be.
I maintain that we need to define clearly what we mean by values. How important this is may be seen by reference to section 7, subsection 1, where the whole meaning and intent and efficacy of the measure depends entirely on the definition of "diminution of value" in the third line. If there is no means of determining what that value is, how can the clause have any meaning? How can the bill have any meaning? It may be contended that this bill is aimed to pay its way just as a fire insurance measure aims to pay its way. This measure by section 7 empowers the minister, for example, to pay $3,000 to one who has sustained war damage. No reference is made to the necessity of the individual who sustained the damage having taken out an insurance policy; the minister is empowered, without any reservation, to pay $3,000 in consideration of war damage. This seems to indicate quite clearly that we are not concerned about making the whole scheme pay. If we are not aiming to make the whole scheme pay, then we do not need to be greatly concerned with the definition of value as it stood in the original bill. The original bill defined "value" as the value which the property would bring in the open market. I maintain that for the purpose of this measure that is not a meaning of value that we are at all concerned about.
Again we find in section 10 an exception of $50; that is, if the extent of the damage is less than $50 no payment is to be made. I maintain that that exception might be quite in order in a fire insurance measure, a regular policy of a fire insurance company, but it is inconsistent with the spirit and purpose of this bill.
, 1050
War Risk Insurance

May I turn for a moment to a discussion of the question of value as I think it should be. There are two main types of value with respect to properties such as dwellings. There is the social or prestige value, and there is the utility or service value. We might add another class of value, namely, the combination of the two. To illustrate what is in my mind, I would refer to a case which came under my observation. A young couple purchased a house for $450 when they were first married. They lived in it for fifteen years. As several children had come along they had found it impossible to buy a more commodious home. At the end of fifteen years they simply had to have more room. They raised up the house and put under it a basement with a seven-foot clearance, large enough to make possible a considerable addition to the house. As the house then stood it had cost them about $850. They had to let the house stand as it was, without improvements for several years. By that time the resale value on the open market would be hardly more than $150, the amount for which a person could sell the material if he salvaged the house.


The CHAIRMAN:: There is far too much conversation going on in the chamber.


John Horne Blackmore: Mr. Chairman, I am surely glad you pointed that out, because the hon. gentlemen who are. talking have almost completely destroyed my ability to present this matter this afternoon. If they wrant to talk, I think they should go outside. I could hardly hear what you were saying, Mr. Chairman.
As I was pointing out, the house I have in mind cost the family $850, plus their work, but if they had had to sell it on the open market they would have been able to obtain only $150 or $200 for it. If this house were destroyed because of the war, it is conceivable that all that family would get as full compensation would be $150 or $200. This would mean that they would have insufficient money to build a new house. They would have to suffer an almost complete loss; in effect, they would be on the street. This house as it stood, while it might be impossible to sell it for anything near what it was worth, had a value to that family of a house which might have cost $2,500 because in it they were able to shelter their children and get by, as many Canadian families have to get by. If this house, which cost $850 and had a service or utility value to them of $2,500, were damaged to the extent of $49. according to this bill these people would
[Mr. Blackmore.)
receive nothing for damage which might render their place of residence entirely uninhabitable.
I think the illustration I have given is sufficient to show that as the bill now stands it is a rich man's bill, not a poor man's bill; that the application of the bill would bring into existence many inequalities and injustices. In order to show how many glaring inequalities might spring out of the application of the bill, may I point out that section 7 permits the minister to pay $3,000 for damages. As long as that section remains as it is, and I have no objection to it, a man with a house costing $3,000 which was destroyed would receive the full $3,000. In other words, he would have 100 per cent protection under this bill. There are many well-to-do Canadians who would come in his class. They would own houses costing from $3,000 to $5,000.
There are other Canadians who are a little better off and who own houses costing from $6,000 to $10,000. If these houses are damaged in the war the owners will receive compensation which will go a long way toward covering the cost of repairing the damage. They will receive substantial benefits under the bill. It must be borne in mind that the man with the $3,000 house is probably in receipt of a salary of $3,000 a year, and consequently would be in a better position to repair damage than a man in the lower income brackets. The man who owns a house costing $6,000 or $7,000 is probably getting in the neighbourhood of $6,000 or $7,000 a year, and therefore would be able to repair any damage done to his house. When these facts are considered it becomes more evident how unjust this bill will be to a person owning a house worth only $450 which sustains damage of, we will say, $49. Such a man probably is receiving only a very small income and is not in position to rebuild or repair his house. His family is probably such that he has had to struggle all the time in order to make ends meet. This man will receive perhaps no recompense at all if the damage is under $50. If the damage amounts to $100 and he receives reimbursement he will not be much better off. He certainly would not be relatively as well off as the man with the house costing $3,000, or the still more fortunate man with the house costing $6,000 or $8,000, and which sustained damage to the extent of $3,000.
As the bill stands at the present time I think it is quite unjust. It discriminates against the poor man in favour of the rich man. I believe it should be amended in two important respects. It should be stipulated definitely in the bill just what is meant by

War Risk Insurance
value; I suggest that the wording of this stipulation should take some such form as this:
That the value with reference to a property means the amount which would be required to restore the property to the degree of capacity for utility or serviceability or habitability which the property had before it was damaged.
In such case if the house to which I refer, which cost $850 to construct and which enabled a considerable family to get by, were damaged, we will say to the extent of only $100, the bill would permit the minister to restore the house to a condition in which it would be able to render the same service to the family occupying it that it had rendered before the damage was sustained, regardless of the amount it might sell for on the open market. If that definition of value, or a similar one, were embodied in the bill, I believe it would help greatly.
Then I think the bill should be modified to eliminate almost entirely the $50 exemption. Many a poor man is living in a house that would scarcely sell for $200 on the open market. I think it is grossly unfair to refuse to pay any damages which are under $50 in value. Suppose the chimney were destroyed, or the door on the porch blown off, or a hole made in the basement; if the total damage were assessed at less than $50, that man would get nothing, and it might be impossible for him and his family to rebuild the dwelling so as to make it habitable.
Hon. members may imagine that there are not many Canadian people who live in houses of as small a value as I have indicated. But all they need to do is to go through the woods to see the number of very inexpensive shacks in which people are living, or see in the wide areas of the west the inexpensive shacks in which farmers and landowners are endeavouring to get by, or go through the outskirts of many of our small towns to realize the number of small, inadequate habitations in which many Canadian people are struggling to live. Even in this great city of Ottawa and our next door neighbour you will find a surprisingly large percentage of houses that are very cheap and probably assessed at anywhere from $175 to $250. If a dwelling of that sort were damaged to the extent of 10 per cent of its value, from a money standpoint that might seem very small, but from the standpoint of human values, from the standpoint of the ability of the family to continue to live in the house after the damage was done, or to rebuild it so that it would be in as good a condition as it was before it was bombed, it will easily be seen that it would be grossly unfair to apply rigidly this limitation that nothing shall be paid unless the damage is over $50.
I think, Mr. Chairman, that the modifications which I feel should be made in the bill can be brought up under other sections. With that understanding I would say to the minister that I am prepared to allow section 2 to pass, and I will bring up the matters I have in mind under subsequent sections where perhaps they can be more appropriately dealt with.


Mr. HANSON (York-Sunbury):: Mr. Chairman, I rise not to discuss the questions raised by the hon. member for Lethbridge, but to point out that this is the ninth day of July and we are in the sixth month of the session. This is a business proposition we are discussing ; it is not in any sense a political question. While members have quite properly occupied a substantial amount of time in discussing the rights of fishermen to protection, I do think the time has arrived when we as business men ought to get down to putting this bill through on its merits so that we can bring this session to a conclusion.


Mr. HANSELL:: I should like to rise in support of what the hon. member for Lethbridge has said in respect to the valuation of houses and the damage that may be done in the case of a wealthy man's home as compared with the home of a poor man.
I see no reason why we should not indemnify everyone in Canada, be he fisherman, tradesman, farmer or what have you, for every cent of loss that may be caused through war damage, bombing, and so forth. I know that we have spent a good deal of time on this bill, but I am perfectly satisfied that we do not 3ret realize the serious damage that may be caused, since we are so far distant from actual bombing. But sometimes the seriousness of it can be brought home to us very forcibly. The other day I received a letter from my mother in England, telling me that my mother and father had been bombed out. They escaped or were rescued from the debris with nothing but the clothes on their backs. I am going to suggest to you, sir, that if the cities of Canada were afflicted with the bombings that have taken place in other parts of the world every member of parliament would be in his seat urging the government to pay compensation for any type of war damage sustained by our people. That letter from my mother brought the seriousness of the situation home very forcibly to me.
I assume that should there be much bombing of Canadian cities there would be set up an administration which would be running all over the place trying to adjust claims and to decide whether a window is worth 75 cents or $5, and all that sort of thing. We have had that sort of machinery
War Risk Insurance

set up in connection with the bonuses for agriculture in Canada, some of which are not yet paid. The people of this country would not stand for anything like that if this country were going through a bombing. I refer again to my mother's letter. In spite of the fact that my mother and father had nothing left in the world, they said, "The government administration here in England in behalf of bombed-out victims is marvellous." I sent my mother and father a little money, not because they were bombed out, but because I thought they needed it. It arrived a few days after they had lost everything, and my mother said, "You do not need to send us any more money, because we are well provided for." I know that there is a bombed^ out victims' fund, but my mother went on to say, "The government are very apt to visit us and discover just what our loss may be, and urge us to put in our claim now." That bit of news gladdened my heart, and I trust that after this bill is passed the government will see to it that those who are the victims of war damage will not have to worry, worry, worry, as to when their claims will be settled and how much they are to get.
During the discussion on this bill I have noticed, as no doubt other hon. members have, that there seems to be a fear on the part of the government as to whether they will be able to meet all these claims. You see, Mr. Chairman, it is the same old story: Can we afford to pay for the damage done? It is the same old story-we have no money. It does not make any difference how much lumber or stone or cement we have for repairs, or how much skilled labour is available; we are afraid that maybe we will not have the money. The same financial advisers who were advising the government in pre-war depression years are advising them to-day, and are doing so in respect to the financing involved in the present bill, which may be described as partly a postwar measure.
I stand with the hon. member for Lethbridge in what he has asked the committee to do.
I go further, and say that every nickel of damage done to anyone in Canada, be he fisherman, farmer or anyone else, should be paid promptly; and let our people know that if war should come to our shores we have a government which will stop at nothing to give them adequate and complete compensation.


Mr. FAIR:: The hon. member for Macleod has just told us about his parents who were bombed out in England. I will take a couple of minutes to speak of a section of our Canadian people who have been blasted and bombed ever since Canada became Canada, and I see that they are being bombed once 
more on this occasion. I am referring now to paragraph (j) (ii). If this legislation goes through as it is at the present time, "growing crops, plants and trees" will be excluded from the benefits of the measure. I think the committee is well aware of the fact that 90 per cent of farmers are in debt up to their necks, in some cases a little deeper. One of my neighbours in Paradise Valley, who came to this country fairly recently, gave me a plan which he thought could be put into operation to burn out the crops of the countries which have been overrun by Germany. If that plan is feasible over there, as I believe to a certain extent it is, then it is possible that our enemies may put it into effect and burn out our crops here. I do not think it is necessary to point out how very easy it is to burn a field of wheat or oats, either when it is grown and ready for cutting, or when it is harvested and in the stook, or when it is gathered in around the farmers' buildings, either in eastern or western Canada. Because farmers are in debt to the extent they are, if a farmer loses his crop he is "on the road" or, if he is lucky enough, on relief. For these reasons I think the government should not exclude, as is now proposed, farmers' crops from the benefits of this insurance. Farmers up to the present time-and the days to come will be no exception-have paid directly or indirectly, or both, the weight of the taxes of this country. That statement cannot be successfully challenged. While they are working harder and longer hours than any other class, we find among them more poverty and destitution than among any other class. Therefore I appeal to the minister to remove paragraph (j) (ii) from section 2 of the bill and give farmers the benefit of this insurance.
Section as amended agreed to.
On section 3-Insurance against war damage.


Mr. GREEN:: I should like to ask the
minister a question concerning two points. First, is power taken in this bill to bring in a compulsory insurance scheme? I do not interpret section 3 as giving that power, yet Mr. D'Arcy Leonard, who advised the government on this measure, recommended in paragraph 15 of his report as follows:
Furthermore, the power should now be taken to institute a compulsory scheme or schemes; and in the event of the voluntary plan proving inadequate, a compulsory scheme could then be put into effect. With the advantage of the experience and preparation under the voluntary scheme, the compulsory plan would be on a more equitable basis than is now possible.
Is power being given to institute a compulsory scheme?

War Risk Insurance
Then, this section is the one which gives the minister the power to enter into contracts of insurance, and specifies among other things the power to set the rate or rates of premium.
I should like to know whether or not it is definitely understood that the premiums are to be the same in all parts of Canada. In other words, if a policy is taken out in Ontario or Quebec, will the rate be just as high or just as low as the rate paid in Nova Scotia or in British Columbia, which provinces are the ones in which damage is most likely to be suffered?


Mr. ILSLEY:: On the first point, as I read the bill and as I understand it to read, there is no power to institute a compulsory system of insurance. I find no empowering provisions which would enable the government to levy compulsorily against all the property owners of Canada rates which would be used later for indemnity against war damage. If it becomes necessary to carry out Mr. Leonard's recommendation it will have to be done by some subsequent measure.


Howard Charles Green: In other words, his recommendation in that regard is not being accepted?


James Lorimer Ilsley: Not as far as this is concerned, no. As I pointed out yesterday, we have the power under other measures to do that, if it should become necessary, by order in council.


Howard Charles Green: That is, under the War Measures Act?


James Lorimer Ilsley: Yes, under the War Measures Act, and possibly under the War Appropriation Act-I do not know about that, but one step at a time. This is a bill to authorize the minister to enter into contracts of insurance, and that is all it is, as I read it.
As to whether the rate will be the same in all parts of Canada, the answer to that is, yes, it will be, for the same class of property. There will be no territorial discrimination. Inland points with low risks will get no advantage from that fact, and the coastal points with their high degree of risk will not be penalized because of that fact.


Howard Charles Green: The idea is to spread the cost across Canada?


James Lorimer Ilsley: Yes.


Mr. FRASER (Peterborough West):: Has any conclusion been arrived at as to what those rates will be?


James Lorimer Ilsley: Well, I do not think I should state what I have in mind about rates; I think I should leave it until the rates are actually fixed before they are announced.
Naturally the subject of rates has received a great deal of consideration, and my own opinion is pretty well formed as to what they should be. But I am not in a position to announce them, because I may change my mind on them.


Gordon Knapman Fraser: They have changed them in England about three times, have they not-lowering them?


James Lorimer Ilsley: I do not know.


Howard Charles Green: If the minister will not tell us what is in his mind with regard to rates, perhaps he will tell us what is in his mind with regard to subsection 3 of this section, which reads as follows:
The minister may, in his absolute discretion, refuse to enter into a contract of insurance with any person.


James Lorimer Ilsley: Yes. It may become necessary sometimes to refuse to enter into contracts in a particular district. But apart from that, the minister must not be put in a position where anybody can claim a contract as of right. The government might refuse to enter into a contract with a company who wished it to issue, let us say, a policy for $100,000,000. The section is simply to make it clear that rights are not given the subject as against the crown which the crown must recognize-rights to insurance policies in amounts specified by the subject, or rights to insurance policies at all. The crown is entering into a contract, and this is an act empowering the crown to do so. We do not want any action brought against us to compel us to enter into any particular kind of contract. With regard to districts, I have nothing in mind particularly. I do not know whether I should say this, but the United States had to discontinue writing insurance in a distant part of that country, and while we hope there will never be any such development in Canada, it is possible that there might be.


Howard Charles Green: Does that mean that if
there were attacks on the British Columbia coast the government would refuse to write insurance in the districts affected?


James Lorimer Ilsley: It does not mean that the
government might refuse to do so. It means that if a part of Canada were in the occupation of the enemy the government would not be compelled to enter into contracts in the writing of war risk insurance in that area. I do not say whether the government would or not, but I am saying that there might be an eventuality which would make it necessary for the government to cease writing in a certain area.
!!'(/)[DOT] Risk Insurance


Howard Charles Green: There is no intention of
refusing to write policies in a district in which attacks are made, in which there would appear to be more danger than in some other districts? The government does not intend to go that far under the subsection?


James Lorimer Ilsley: I have not said that the
government intended to do anything about it. I have not said that the government intended to decline to write policies. This is merely an empowering section which empowers the government to do so under certain conditions which one cannot foresee.


Richard Burpee Hanson: I take it this is the reply to the request I made last evening?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Is that
the only thing the minister has in mind? When this bill was drafted there must have been definite reasons, either in his mind1 or in the mind of the draftsman, and communicated to the minister, for the inclusion of this subsection. I can quite appreciate the reasons given by the minister in case there was an invasion of Canada in any particular part. The government might in certain circumstances refuse to enter into a contract for insurance, but apart from that there is no intention on the part of the administration to utilize this section, although I suppose the insurance companies themselves always exercise the right to refuse to accept an application for reasons which they do not disclose-for example, if the moral risk is not very good, to put it mildly. I have known of many instances in which insurance companies have refused to accept a risk and declined to disclose the reason, but apparently the underlying reason was the one I have suggested. Is that what the minister has in mind? I refer to cases of apprehended fraud, if I may put it in that way.


Howard Charles Green: The minister went further
than that.


Richard Burpee Hanson: I did not hear the whole of his explanation.


James Lorimer Ilsley: I gave two reasons.


Richard Burpee Hanson: I heard only one. What was the other?


James Lorimer Ilsley: The first is the one I have been discussing in answer to the hon. member for Vancouver South. The other is in such a case as this, for example. A particular company or property owner might, but for some safeguarding provision such as this, come and demand a policy covering the property involved up to a certain value

which the owner might represent to be its full value. It may not be possible, or at any rate it may not be desirable, for the government to insure the property up to its full value in every case, and they might wish to refuse to enter into that kind of policy, or into a policy to that extent, in every instance. This is merely to make it clear that there are two parties to the contract, and this does not create a right in the subject to a policy. The government has the power to enter into a contract of insurance, but if we were to go on the other assumption and declare that every property owner was entitled to it-it would have to be up to the full value, I presume-we might find ourselves with certain concerns in Canada, certain property owners, obliged to assume a liability for $100,000,000 or $150,000,000 which we might not consider it desirable to assume.


Richard Burpee Hanson: I will not controvert that.


Mr. SLAGHT:: I believe the power should be there.


Richard Burpee Hanson: There
should be some discretion.


Mr SLAGHT:: No one should be able to come as of right and say, "I must have a full policy". But one would like to feel that if an eastern Canadian port were subjected to a preliminary attack and residents came in in increasing numbers and sought insurance, this power would not be used to say that if we accepted these applications Canada would be mulcted in a large amount of money. As I understand the principle, these blows that we are anticipating cannot be expected to fall generally. They will fall, as in the mother countiy, in places such as I had the horror of seeing a few months ago. I saw the results in certain places which were attacked because of their strategic position-such places as the ports of Liverpool, Newcastle, and Hull. The people had suffered awful losses, both in death and in property.
I would take it that there is no thought of utilizing this section to protect the rest of Canada from the results of attack upon one particular part or place where attack seemed to be imminent. I fancy the minister would say that is not the purpose of it. It would be well if we could feel reassured in that regard. This is a national undertaking in the long run to indemnify people who are unfortunate enough, if danger comes, to be located in parts of Canada which perhaps they did not choose but which are subjected to grave peril and loss. We as a nation are by this very act, as I apprehend, undertaking to

War Risk Insurance
stand ready to indemnify such people, at least in part, for their misfortune in being in the forefront of the civilian battle.


James Lorimer Ilsley: This section does not affect the free compensation, but relates to the issuing of policies. We might, and I think I am correct in saying that in the United States they do, require a certain interval to elapse between the making of the application and the occurrence of the damage before the policy will be effected. That is, when a property owner sees the bombers overhead he cannot wire the nearest insurance company or the government and demand and receive a policy. It must be applied for a reasonable time before the damage occurs. I think that condition may be imposed; otherwise I do not know why anyone should insure in advance. He could wait until the attack was near and then get his insurance.


Howard Charles Green: That is one side of the story, and I think the minister has considerable justification for the stand he has taken. But here is the other side. The minute an attack occurred on Vancouver island, let us say, what right would the government have to step in and say, "We will not insure anything on Vancouver island now." From the statement the minister made a few moments ago one might take it that the government wished to reserve that right, and I do not think it should. I think that would be most unfair to the coastal districts of Canada.


James Lorimer Ilsley: I said if a district should be occupied by the enemy; I did not say if a district should be attacked.


Howard Charles Green: Well, what does the minister mean?


James Lorimer Ilsley: Certain latitude must be allowed. If hon. members try to pin me down to exactly what will be done in every instance I am afraid I cannot tell them.
Mr. MaoINNIS: I think this is a point on which the committee should have information as definite as it is possible for the minister to give. If it is the intention to use the power given by this section to refuse contracts of insurance to persons living in a certain area because that area is subject to terrific or devastating attacks, then in my opinion the whole purpose of the act is vitiated. The purpose of the act is to spread across the whole dominion the losses arising from enemy action. If the minister is going to make a *reservation and say that the danger of loss in one particular district is too great and that therefore insurance will not be granted, then the purpose the act is supposed to serve just
will not be served. I agree with the minister that if any part of Canada should be occupied by the enemy, and if the property there was not already insured-I am thinking now of property that would be insurable under contract, not under the free insurance-the minister would be quite within his rights in refusing to grant insurance after such occupation. But as long as the particular area in which the property is situated is not occupied; as long as it is on the same footing as the rest of Canada except that it is more likely to be bombed or attacked, I believe that unless we have some system whereby that property will be protected, and the persons in that area will be protected, the act will have lost a great deal of its value. I do not believe, however, that is the power the minister is reserving under this subsection.


Gordon Knapman Fraser: When the banking and commerce committee discussed this bill I do not believe they even thought of anything like that. If they had,
I believe the members of the committee would have just quit cold, because that is discrimination against the sections that might be bombed.


James Lorimer Ilsley: I wholly agree.


Richard Burpee Hanson: There is a great deal of force in what these hon. gentlemen have said; and if the minister is not prepared to extend the scope of this section,
I am going to suggest that he hold it over and give it further thought over the evening. Perhaps some course may be found that would in some measure take care of what these hon. members are urging. On its face this is a clause which gives absolute and arbitrary discretion to the minister, and apparently that is not what is desired.


James Lorimer Ilsley: Yes, it is.


Richard Burpee Hanson: I wonder if this was considered fully in the committee.


Howard Charles Green: The point was never explained in the committee at all.


Richard Burpee Hanson: Last night I sensed that there must be a reason which was not disclosed by the language of the section itself, as to why this discretion is left in here. I was wondering if it was on the same basis as the commercial companies reserve the right to take applications. That, of course, was what I assumed would be the position. But here is a form of insurance-I am speaking now of the contractual insurance, not the free coverage-designed to give monetary protection to portions of the community which may be exposed to great hazard, at the
War Risk Insurance

expense of the general body of taxpayers. It is a national burden, and should be so shared. I really have not arrived at a conclusion as to how far we should go, but I do not think it should be left entirely to the discretion of the minister; I think he should have some obligation in the premises. Yet I confess that I have not found a solution, and I am not offering one at the moment. I thought perhaps he and his officials, who are much more versed in the matter than I possibly could be, in the light of the discussion might evolve something that would be reasonably satisfactory.


Mr. NEILL:: I wonder if the minister has explored, and rejected, the idea behind the British system. There, as I understand it, the insurance is compulsory, and the difficulty of fictitious or excessive claims is gotten around by the fact that they go more or less according to the assessment rolls. While I am on my feet I should like to offer a suggestion It has been suggested that this section should stand over and be further considered. Could not some language be found here and now that would meet the objections which have been raised? Could it not be put something like this:	The minister may, in his absolute
discretion, for good cause" or something like that? I think I can say I know what the feeling is in British Columbia, which at the moment is the most vulnerable area in Canada.
I think I can safely say that they would rather rely on the common sense and" fairness of the Minister of Finance than have this bill delayed for another two or three days, because the situation is very urgent. When we are through with this measure it has to go to the senate for consideration, and we should like to see it put through as soon as possible.
I think if we could find any language that would at all meet the objections raised by my hon. friends, the people of British Columbia would rather take a chance on, shall I say, the fidelity or perhaps the common sense of the Minister of Finance than have this measure delayed any longer.


Mr. MacINNIS:: Just before the minister replies, I do not think the committee objects particularly to having this section in the act. All we want to have from the minister is a statement that it is not going to be used for a certain purpose, and if the minister makes that statement I think the committee will be prepared to let the thing stand as it is; at least that is my view.


Howard Charles Green: That is my position, too.


Gordon Knapman Fraser: We all feel that way.


James Lorimer Ilsley: If I understood the hon. member for Vancouver East correctly I agree with him, and will give the assurance for which he asks. I do not know just what were his words, or how they appear in Hansard, but as I understood him he asked if the power given here to refuse policies w'ould be exercised simply because a particular area was particularly likely to be attacked. The answer-is, certainly not. We realize that the east and west coasts are more likely to be attacked than the interior. It may be that some waiting period will have to be insisted on-


Angus MacInnis: I agree with that.


James Lorimer Ilsley: -as a necessary safeguards But just as the hon. gentleman said, the very object of this measure is to provide insurance for people who are in danger of attack, and the object of this section is simply to make it clear that policies may be refused in some instances, that there is no statutory right to policies. If safeguards of all kinds had to be written in here it would be beyond my ingenuity, and I think everyone's, to devise them. Once they are written in I think it would be of considerable disadvantage to some applicants, because if they did not come within the conditions that we thought of, it might be argued that they should not be insured-


Angus MacInnis: That is why I think it is better to leave the section as it is.


James Lorimer Ilsley: I think it is. The hon. member for Comox-Alberni suggests the wording "the minister may for good cause refuse . .
That would be what he considered good cause. It would not make any difference in the effect of the section. I think subsection 3 is inserted for greater caution anyway. I do not find anything anywhere which says that the minister has to issue any policy, but this provision is included lest it be thought that the government might be forced by an applicant under certain conditions-perhaps, as I say, when the news is coming that bombers are on their way-to issue perhaps a $50,000,000 policy.


Richard Burpee Hanson: That extreme case could be taken care of by limitation. I think this will have to stand as it is, or else the minister will have to make the position compulsory with a limitation. I have not crystallized my view on the point. In the absence of any really constructive suggestion I am willing to let this section go.
Mr. O'BRIEN: Will it be possible for the boards of fire underwriters in the various provinces to pass on these various risks?


James Lorimer Ilsley: Yes.

War Risk Insurance
Mr. O'BRIEN: If they would refuse a fire insurance risk, I assume the minister would refuse this sort of insurance?


James Lorimer Ilsley: Oh, no.


Richard Burpee Hanson: No.


Mr. MAYHEW:: Surely that would not apply. Take a particularly vulnerable spot, say Esquimalt, where the dock is; an insurance company might refuse to write insurance in that area. The minister does not mean that an area of that kind would be left out?


James Lorimer Ilsley: No.
Mr. O'BRIEN: I was thinking of a dilapidated building that was not worth insuring, but that the owner might wish to insure.


James Lorimer Ilsley: I imagine that we could not rule out risks because the buildings were of low value. We might disagree as to the value, therefore we are going to have these insurance companies working for us. They are going to be looking into these things and will give us the benefit of their experience in writing insurance. I do not think I can improve that section in any way.


Richard Burpee Hanson: In England have they not a compulsory system?


James Lorimer Ilsley: That is right.


Richard Burpee Hanson: What is the objection to our doing it here? Is it because this is only an initial step, and we may proceed further along the line of the English system? If to have a compulsory system is workable there, it should be workable here. I think that would be the ideal thing; then we could give protection to everyone who is willing to pay for it.


James Lorimer Ilsley: My recollection is that there are very powerful reasons against a compulsory system in Canada. I do not know that I can make a complete statement of those reasons, but to begin with, England is practically all subject to attack from the air. A great many cities in various parts of England, the western and central as well as the eastern sections, have been attacked from the air. The country is all subject to bombardment, and there is a fair distribution of the danger all over England. That is not the situation in this country. If we instituted a compulsory system we would be going all over Saskatchewan, for example, in northern and western Ontario, and so on, collecting little insurance premiums from farmers.


Mr. MacNICOL:: And the northwest
territories.


James Lorimer Ilsley: Yes. This would be greatly resented by hundreds of thousands, perhaps millions of people who were perfectly willing to take a chance and who could not be convinced that there is any real danger to them.


Richard Burpee Hanson: That would make the rate very low.


James Lorimer Ilsley: Yes, but I am sure it would not meet the wishes of the majority of the people of Canada. Apart altogether from that, consider the difference in the assessments here and in Great Britain. In the United Kingdom they have an accurate record of the value of all property, they get it in their income tax returns. The value of real property, and the rental value, is all included in the income tax returns; they have an accurate and long-standing record, and the assessment is uniform. If we took part of the assessment of real property as the basis for our premiums under the compulsory scheme, one city assesses to the full value, another city to more than the full value, and some cities to a quarter of the value. The same lack of uniformity exists in country districts, townships, municipalities, and small towns, all over the country. It would be thoroughly inequitable to take part of the assessment. The only alternative would be to set up our own assessment of real property. That is too great a thing for us to undertake.
These matters were all discussed in the banking and commerce committee and thoroughly considered before we decided on this voluntary plan. We could get a larger fund by a compulsory scheme, but we did not think it warranted in view of our conditions.


Mr. ROY:: There are enemy submarines right in the waters where the fishermen of my constituency are fishing. There is a possibility of those boats being attacked. I should like to know if they can be insured under this scheme, and on what basis.


James Lorimer Ilsley: Boats and vessels are not included in this scheme. Free compensation is provided for the loss of fishing boats up to the value of $2,000 each per fisherman. That is provided for by order in council, but not by this scheme.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Limitation as to amount of indemnity.
Howard Charles Green: How long does the minister think it will take to get insurance actually, in effect after the date on which this bill becomes
War Risk Insurance

law? There is the greatest concern on the Pacific coast with regard to this particular section, because it limits the compensation that can be paid to the sum of $50,000 for any damage that is done before the insurance policy is taken out.


James Lorimer Ilsley: I dislike to make predictions, but I have gone right on with the organization of the scheme despite the fact that the bill has not yet been passed. I would hope that within thirty days after the passage of the bill it would be possible for policies to be issued.


Howard Charles Green: The minister has proceeded, without the bill being passed, to make certain arrangements. Why would it not be possible for him to go one step further and allow these firms to make application to their own insurance companies for the amount of war risk insurance they want and to pay deposits on account of the premiums? If there were damage suffered before an effective policy could be obtained* they should then be able to get compensation, subject of course to the payment of the balance of the premium. The minister said yesterday that he would not think of following this course, but this is a serious position. If some of these plants are destroyed by enemy attack, the loss may run into hundreds of thousands of dollars, and yet under this section there could not be compensation over $50,000. This is unfair, not only to the firms but to the men they employ, and it might prove to be disastrous for Canada's war effort on the coast.


James Lorimer Ilsley: Until this bill has passed
no one has any authority to accept any obligation.


Howard Charles Green: The minister had no authority to set up committees and so on, and yet he has done so.


James Lorimer Ilsley: It is only when you are
entering into contractual obligations that you must have authority. No contracts have been entered into because there is no power to do sov I have asked certain gentlemen to act as an1 advisory committee, and I have asked a certain gentleman to act as supervisor. He has done a lot of work, but it is just as though there was nothing in existence.


Howard Charles Green: I suggest that the government need not be bound by such obligations until the act comes into force, but I contend that the common-sense thing to do is to enable these people to apply to their own insurance companies, not to the government, for the amount of coverage they want, and pay a reasonable deposit on account of the premium. If we could get the Japs to wait until thirty days after this bill becomes law, [Mr. Green.)
there would be no need to worry, but they may attack the coast to-night or next week. There is no reason at all why a common-sense view should not be taken of the situation.


Richard Burpee Hanson: Why the
$50,000 limitation? Of course it is just an arbitrary figure.


James Lorimer Ilsley: Absolutely arbitrary.


Richard Burpee Hanson: If the
minister could increase that amount it might help the situation.


James Lorimer Ilsley: The new figure would be
arbitrary too.


Richard Burpee Hanson: It- would,
but it would be more inclusive and provide better coverage. There must have been some reason for setting the figure at $50,000.


James Lorimer Ilsley: Not much, I am afraid.


[Stage Direction]
Section agreed to.
On section 7-Damage to dwelling.
John Horne Blackmore: Would not the minister be willing tc put into this section some stipulation with respect to value? It seems to me that value could be defined under this section.


James Lorimer Ilsley: We tried that, and all it
led to was argument. Any definition of value that is put into the bill will lead only to argument. I understand that the supreme court of the United States has defined value as what a willing purchaser, not forced to buy, will pay to a willing seller, not forced to sell.


Richard Burpee Hanson: That is the standard definition of market value.


James Lorimer Ilsley: That perhaps would be the test applied here. But the courts have to determine, in the event of litigation, whether proper principles have been applied to the determination of value. This is one of those cases where an attempt at codification of the decisions of the courts just leads to argument. Mr. Leonard drafted a definition of value which he thought was in accordance with the decisions, but there was disagreement and his definition was not considered to be a proper one. So that it was left as it is under fire insurance practice, where the value is adjusted by the adjuster and the principles of determination are applied. I presume that a great many factors enter into it, but this bill went through the banking and commerce committee and it was decided to leave this out.


Richard Burpee Hanson: I appreciate that there is a real difficulty. The defini-

War Risk Insurance
tion of value given by the minister is used in the courts of this country in the valuation of property expropriated by the crown. It is a definition of market value. Value for insurance purposes is quite different. A property may have different attributes-I am not referring to the value of affection and that sort of thing, which are extraneous matters-and in insurance law the question always arises as to how far the value of a property is affected by depreciation and things of that kind. It is an exceedingly difficult thing to put into the form of a code that would meet all cases. I am content to let the matter go and have it dealt with as it would be dealt with under a standard fire insurance policy. In any actions that I have had to do with I have never had much trouble about getting full value if it was a bona fide loss; there is no question of the quantum when the loss was bona fide. I do not think there will be much trouble with the standard companies of this country, and I am content to let the section go without it having any definition of value.


Angus MacInnis: I was a member of the committee, and I appreciate the difficulty in giving a definition of value. The hon. member for Lethbridge refers to a type of value that I have never come across in any work on economics. I do not know how you could appraise social or prestige value. There might not be so much difficulty over value when there is a contract, but when you are dealing with free insurance, where there are no contracts, and a home is completely destroyed, I do not know just how the value can be defined beforehand. In ordinary fire insurance the contract contains a description of the property, but unless there is a census taken, and I assume that this is not anticipated, there would be no description of many of these properties. I suppose there would be descriptions in the assessors' offices in the cities, but that would not apply to country property. I was just wondering how we could arrive at a correct understanding of the diminution in the value of a property when there is no particular description of the property before it was destroyed.
Mr. ILSLEY': I do not think the description of the property in a fire insurance policy is much of a guide to the value of the property. The amount which an insurance company is prepared to write on a property is a guide to the value, but it is not conclusive. The loss always has to be adjusted, and I should not think it would be any more difficult for the adjuster to adjust the loss in case of bombardment damage than to, adjust it under a fire insurance policy. He
would have just as much to go on, except that in the fire insurance policy there is a description of the dwelling, giving the dimensions and the type of construction. That is about all it gives, and it is not of much use.
I think the loss could be easily ascertained by the adjuster.


Richard Burpee Hanson: May I suggest to the minister that the preliminary thing would be the value placed upon the property by the applicant in his application for insurance. That is prima facie. One of the elements upon which the policy is issued is the representations as to value by the applicant. That may or not be the correct value, but it is the initial guide to value, and the man is bound by his own report. If the property is worth more than he says it is, the principle of estoppel would immediately arise, but that does not often arise because the applicant usually errs on the safe side. I think that is the only guide you have in contracts of insurance, unless there is an agreed value, and I do not think I ever saw or heard of a policy which incorporated an agreed value.


James Lorimer Ilsley: No.


Richard Burpee Hanson: I imagine that Lloyd's write them, though.


Howard Charles Green: This is the section which provides compensation for the house and there are one or two .points which I think should be cleared up by the minister. First of all, just how wide is the word "owner" to be? Just what does it cover? For example, is it to cover a person who is buying a house under an agreement of sale, or a person who has a house subject to a mortgage? That is important, because under this bill unless a person is the owner of the house and, further, unless he is actually living in it, he cannot get this free compensation. It is of the utmost importance that this point should be cleared up.
Furthermore, the idea has gone out across the country that this free compensation applies to all houses; in other words, that if a house is destroyed, the owner can get up to $3,000 compensation for the loss. But that is distinctly not so, because you have to own the house, and in addition you have to live in it. I suggest that the minister have advertisements inserted in the papers, particularly in the coastal areas, pointing out that this $3,000 compensation does not apply to every house. Otherwise there will be many houses not insured which should be insured because the owner will think he does not have to take out a policy, since he expects
War Risk Insurance

33,000 free coverage, and if there is damage done he may find that he is not covered by the act. This should be explained most carefully to the people, especially in those provinces which are most exposed to war risks.


James Lorimer Ilsley: I think that is a valuable suggestion. It would be worth the cost of advertising to do that, for the reason the hon. member gives, and I will bring his suggestion to the attention of Mr. Matson, who is to be the supervisor of claims.
As to the other point, the meaning of the word "owner", the hon. gentleman put the case of a person who has bought a house and lived in it but has not obtained the deed. He would be the owner under this, undoubtedly. He would have what we call in Nova Scotia a beneficial interest in the property. He is the beneficial owner of the property or the equitable owner of the property, and he resides in it. If the person who resides in the house has an interest in it, legal or beneficial, as owner, he would be covered by the section. If he was merely a tenant he would not be covered.


Richard Burpee Hanson: I have a suggestion to make to the minister. I should like him to give consideration to adding at the end of section 7 (1) the words "or has an insurable interest therein". That would cover the beneficial or equitable interest of the man who has purchased under an agreement of sale, and it would also cover the mortgagee. My attention has been drawn to this point, and I certainly think the mortgagee should be protected because he has his money in there.


James Lorimer Ilsley: Not by free compensation.


Richard Burpee Hanson: Why should he not have some compensation?


James Lorimer Ilsley: He is an investor.


Richard Burpee Hanson: And so can insure for himself. That, I presume, is the answer, and if so I am willing to waive that point. But to cover the point raised by the hon. member for Vancouver South I would ask the minister to consider adding at the end of subsection 1 the words "or has an insurable interest therein". I think that is a fair suggestion, and I do not see any great objection to it. I hope the minister will consider it.


James Lorimer Ilsley: I do not know what to say about that. It might be entirely too wide. It might cover persons whom we do not wish to cover. I do not know whether a tenant has an insurable interest or not.
(Mr. Green.]


Richard Burpee Hanson: He might have occupancy but not ownership.


James Lorimer Ilsley: Does he have an insurable interest?


Richard Burpee Hanson: No, only so far as occupancy goes, which is an entirely different thing. You are not insuring against that.


James Lorimer Ilsley: No.


Richard Burpee Hanson: I think it would cover at least the case of a purchaser under an agreement of sale who was also the occupant. Does this not contemplate that the man who is to be paid is the occupant? Does this cover rented property?


James Lorimer Ilsley: No.


Richard Burpee Hanson: If it is not clear in the bill it ought to be made clear that he must be, the occupant and either be the owner or have an insurable interest in the property under an agreement of sale. I suggest that the minister might incorporate in the section the words I have proposed.


Mr. MACDONALD (Halifax):: If the suggestion of the leader of the opposition were adopted it would cover an occupant of the house who might have only a one-twentieth interest in the property. He would then have an insurable interest and would get the full compensation for that house. On the other hand, if he has purchased the house under an agreement of sale, he is the owner.


Richard Burpee Hanson: The owner is the man who has the legal title. Let us not quibble about that. In equity, one man may have the equitable title and another the legal title.


Howard Charles Green: There is power contained in section 33, paragraph (e), for the governor in council to make regulations:
(e) to designate any person or class of persons who are deemed to be included within the terms "householder" and "owner" as used in this act.
Probably it could be covered by regulation.


Richard Burpee Hanson: But it would be better to have it in the act.


James Lorimer Ilsley: I hesitate to adopt the language suggested, "insurable interest". All kinds of insurable interest arise. A creditor has an insurable interest, and he might be living in the house.


Richard Burpee Hanson: I would not think an unsecured creditor would have an insurable interest.

War Risk Insurance


Mr. POTTIER:: In this section the wording is that the insurance or the compensation is payable in respect of war damage "to the dwelling house in which he ordinarily resides." Let us assume that a person in the summer lives in the country and in the winter lives in the city, and owns both houses. In that case is he to get compensation for both, or which residence is taken?


Gordon Knapman Fraser: Just one.


Vincent-Joseph Pottier: Which one?


Richard Burpee Hanson: The one in which he ordinarily resides.


Vincent-Joseph Pottier: At the time of the damage?


James Lorimer Ilsley: Not necessarily. He does not have to physically reside in it at the time.


Mr. MACKENZIE (Vancouver Centre):: Ordinarily resident.


James Lorimer Ilsley: It is the one in which he ordinarily resides. If he resided 183 days in one and 182 in the other, I do not know in which one he would be deemed to be ordinarily residing, but that would be-


Mr. CRUICKSHANK:: If he is in the one that gets bombed he won't want anything.


Richard Burpee Hanson: \ybuld the minister promise to give consideration in the drafting of the regulations to the suggestion I made?


James Lorimer Ilsley: Yes, I certainly will. I understand that this very point was discussed in the committee at considerable length and it was decided, I believe, to leave it this way. There is power in the regulations.


John Horne Blackmore: There are some points about this section which are not quite clear. Suppose that damage were done to a considerable area in a city of, say, the size of Ottawa, which affected houses in what may be called the reasonably good areas, where values are from $3,500 to $4,000, and houses in the poorer areas, some being registered for insurance and some not, and the minister undertook to cover the cost of the damage; what procedure would he follow? Suppose some have insurance policies in both areas-in the well-to-do areas and in the poor areas; others have not; what procedure would be followed with respect to finding the value to be given to those who had sustained loss?


Gordon Knapman Fraser: The fire underwriters' survey would cover that.


John Horne Blackmore: Is the minister planning to have a survey of the whole country,
say under the municipalities, so as to register all property with the value it is estimated to have?


James Lorimer Ilsley: No.


John Horne Blackmore: Well, if he has no such criterion by which to judge, how is he going to tell how much is to be paid to a given individual in any particular area who has lost his home by bombing?


James Lorimer Ilsley: The loss will be adjusted by competent adjusters, in the way that fire loss is adjusted.


John Horne Blackmore: Suppose a home has been completely demolished.


James Lorimer Ilsley: It will still be adjustable.


John Horne Blackmore: On what basis? There would be no record there.


James Lorimer Ilsley: On the available evidence as to the value of it-of which there will be plenty.


John Horne Blackmore: And the main available evidence would be the assessed value in the community in which it was located?


James Lorimer Ilsley: That would be one element; one only-very inconclusive.


Richard Burpee Hanson: May I
assume that section 7 contemplates payment of compensation to owners of houses who suffer loss, regardless of whether they hold insurance or not?


James Lorimer Ilsley: Yes, that is true.


Richard Burpee Hanson: So that it would be possible, I suppose, for a man to insure against loss and also to get this compensation?


James Lorimer Ilsley: Yes, but not double indemnity. He would not get paid for more than his loss.


Richard Burpee Hanson: In any
event?


James Lorimer Ilsley: In any event,


Richard Burpee Hanson: Because
ne did not have the insurable value?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Is that
properly safeguarded?


James Lorimer Ilsley: We will safeguard it in the issue of the policies. There will be no trouble.


Richard Burpee Hanson: You are
not putting it in the statute?


James Lorimer Ilsley: No.
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Mr. GILLI8: A few moments ago the minister, in answer to the leader of the opposition, stated that there was no protection in this bill for a mortgagee.


James Lorimer Ilsley: I did not say that. There is no free compensation to the mortgagee.


Mr. GILLIS:: That is what I have in mind. I am purchasing a home; it is valued at $5,000; it is burned down. I have paid, say, $1,000 on that home; someone holds a mortgage on it for the remainder. Who is paid? Am I paid the $3,000, or where do the people stand who hold the mortgage?


James Lorimer Ilsley: They do not stand anywhere unless they have insured themselves or unless you have insured in their favour. You get the $1,000; that is, your interest in the property, if there is disappearance of value to that extent.


[Stage Direction]
Section agreed to.
On section 8-Damage to chattels.
Howard Charles Green: I suggest that the minister also give publicity to the people who are covered by section 8. For example, as I understand it, this section provides coverage only for the householder, the person who is actually living on the premises.
Mr. ILSLEY; Yes.


Howard Charles Green: It provides coverage up to the sum of $800 for the householder, and another $400 if he has a wife, and another $100 for each child under sixteen years of age. But it would not cover rented furniture. For example, if a person is living in a furnished house, that furniture is not covered by this free insurance.


James Lorimer Ilsley: That is correct.


Howard Charles Green: I suggest that that should be made clear to the public, so they will understand exactly what is and what is not covered.


James Lorimer Ilsley: Yes. I will see that that suggestion, like the other one, is given consideration. I must say it appeals to me as a reasonable and a valuable one.
With regard to this section I wish to submit an amendment, which I will ask my colleague to move:
That Bill 56 be amended as follows:
1.	That subsection (1) of clause 8 be amended by adding thereto after the word "owner" in line 39 on page 4 the following words "and which are within the definition of 'property' in section 2 of this act";
2.	That paragraph (b) of subsection (3) of clause S be amended by striking out the words
fMr. Ilsley.J
"four hundred dollars" in line 12 on page 5 and substituting therefor the words "two hundred and fifty dollars".
This is out of balance as it is. The amount is limited for all the chattels, and the amount recoverable for these luxury items or valuable items should be limited somewhat. It automatically raises the limit for the less valuable article and makes a better balance.


Ian Alistair Mackenzie: I move accordingly.


Richard Burpee Hanson: That may be true. I have not had time to think about it. I just want to make some observations on this.
In going over this bill when first printed, I wondered why the amounts specified in section 8 were based more on the status of a person than on the value of his chattels. I assume there is a reason. I wish the minister would tell us why the amounts are based on the marital status and so forth, without any particular regard-except in the latter part of the section, which he is just amending, and by way of limitation-to the value of the damage. Perhaps I have not made myself clear. Subsection 2 says:
No payment under this section shall
(a)	in the case of any person other than a householder, exceed the sum of two hundred dollars; [DOT]
(b)	in the case of a householder, exceed the sum of eight hundred dollars increased by a further four hundred dollars if he is married and if his wife is ordinarily resident with him and by a further one hundred dollars in respect of each child ordinarily resident with him, who has not reached his sixteenth birthday at the time of the occurrence of the war damage.
It is based on his status and not on the value of the loss he has sustained. That factor apparently has not been taken into account.


James Lorimer Ilsley: To begin with, no one can get more than the loss sustained.


Richard Burpee Hanson: I agree with that.


James Lorimer Ilsley: The reason why a person who is not a householder will not get as much free compensation as the householder is that the householder should be assured of a reasonable amount with which to start living in a house again.


Richard Burpee Hanson: I can
understand that. It is different with regard to the boarder.


James Lorimer Ilsley: The boarder does not need any more. He can go and board somewhere else.

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Richard Burpee Hanson: He might lose his whole wardrobe.


James Lorimer Ilsley: He can take out insurance if he wishes to. If he does not he gets up to S200, but the married man with a wife and a couple of children should have more than that.


Richard Burpee Hanson: I agree with that. I was thinking particularly of the limitation as being imposed because a man was married rather than on the basis of the loss sustained.


James Lorimer Ilsley: That is what I am talking about. If we do not take the principle of this section, but the principle about which my hon. friend is inquiring, we will give to everyone, regardless of his status, up to a few hundred dollars free compensation, depending upon the loss sustained. It is perfectly clear that the limit of free compensation ought to be higher for the person with increased responsibilities.


Richard Burpee Hanson: I hope the minister will take that into account in the budget resolutions.


Mr. REID:: Does this bill deal entirely with the house and the chattels in the house? A man's bam might be destroyed, with the stock in it.


James Lorimer Ilsley: The free compensation is not limited to furniture or the contents of the house.


Thomas Reid: Then property would include, say, a man's barn?


James Lorimer Ilsley: No. It would include the chattels in the barn.


Thomas Reid: But a man's barn might be damaged and the house not touched at all.


James Lorimer Ilsley: There is no free compensation for any buildings except the house.


Howard Charles Green: Not unless he lives in the barn. I would suggest to the minister, with regard to the amendment to subsection 3, paragraph (b), that he delete the word "books". I do not see why there should be that restriction with regard to books and printed publications. They are in a different category from works of art, gold and silver, jewellery and so on. There should not be the limitation of S250 on books.


James Lorimer Ilsley: The owner can always insure his books if he has a valuable library. The idea in this section is to enable him to keep on living and to provide him with some minimum requirements. I do not know why he should have so many books. He should have the Bible and Shakespeare perhaps and
a few other necessities to enable him to go on living, but apart from that he could insure his books.


Howard Charles Green: I can see the reason for the restriction with regard to other things such as stamp collections, jewellery and so on, but I do not think books should be put in the same classification. He would get a total of $800, or $1,200 if he were married, and he should be allowed to include books in that figure.


Thomas Reid: Yesterday many of us, particularly from British Columbia, put up an argument on behalf of the fishermen. I do not want to start another debate to-day on that subject, but, voicing my own opinion, I do not think it is fair that a man's barn should not be taken into account, especially on the coast. A man with stock in his barn might suffer damage; the barn might be demolished and the house might not be touched.


James Lorimer Ilsley: It is all subject to insurance.


Thomas Reid: He can insure his house and books and other effects for which compensation is given, but he might be put out of business by an aerial bomb. His barn might be destroyed and yet his house might not be touched at all. He might put more value in the stock than in the chattels in his home.


James Lorimer Ilsley: But if he has insured the bam he gets paid for it under this act. He does not get free compensation for anything except his house. Every one of us in Canada lives somewhere and it makes it equal if you give free compensation for the house you own and live in. But there is a wide difference in the value of other buildings that we own.


Mr CRUICKSHANK:: Does not the minister think that a barn is more important than jewellery, manuscripts, library and so on? There is free compensation for that.


James Lorimer Ilsley: He gets free compensation
for chattels, up to a limited amount; everyone does. The object of this section relating to works of art, and so on, is to limit the amount that can be claimed for articles of that kind. There are two reasons for the limitation. The first is that these things are not necessary to enable life to continue. The second is the difficulty in determining whether a claim in connection with articles of that kind is accurate. If persons of a certain class were making claims I am afraid that if they had some jewellery, or even some books, and knew they could claim up to $800 or $1,500 for them, they would claim right up to the limit for that sort of thing, and there would not be much chance of checking them. It would be
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a great deal easier to value their other chattels than to value chattels of that sort. The advice I got from a most experienced adjuster was that on this class of goods we could very well limit fairly rigidly the amount recoverable as free compensation.


George Alexander Cruickshank: I am not objecting to the limit; you could limit me to $8 for my jewellery and you would be overpaying me by $7. I am objecting to the principle of giving free compensation for jewellery or works of art-I do not know what that means, unless it would be the speeches of the Minister of Pensions and National Health-but you do not give free compensation in connection with those things on which a man depends for his livelihood, such as his farm implements, his barn and so on.


James Lorimer Ilsley: His farm implements are
included in his chattels.


George Alexander Cruickshank: He does not keep them in his house.


James Lorimer Ilsley: There is nothing to say they have to be kept in the house.


George Alexander Cruickshank: Then will the minister not consider protection for the barn?


James Lorimer Ilsley: No, I am sorry I cannot,
for the reason I stated. You get an unequal coverage there. We all live in houses; everyone has to have a residence. When you have a barn-


John Ritchie MacNicol: In the winter time cattle must have a barn.


James Lorimer Ilsley: A barn is part of your
investment. Sometimes it may not be a very profitable investment; nevertheless that is what it is, so that it is not in the same class as a residence.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 9 agreed to.
On section 10-Property damage only where in excess of $50.
John Horne Blackmore: I wonder if the minister would not consider some modification of that $50 limitation?


James Lorimer Ilsley: I do not know what the discussion was in the banking and commerce committee, but it was thought that we would have to get rid of a great multiplicity of very small claims. It does not seem to me a veiy great burden to impose upon people in time of war when we ask them to bear the loss to their own residences up to the amount of $50. It does not seem unreasonable to me. I think

perhaps it would be going a little too far intime of war to try to make good such losses right down to the last dollar. We are not going to be able to do that for the people at large. All kinds of losses are going to be sustained and sacrifices accepted which cannot be made good, and I do not know why we should go so far in connection with property when people are suffering terribly, losing their lives and so on, and they cannot have those things made up to them. We cannot put dollar values on those things. We are going pretty far in this matter of protecting property, and is there anything so terrible when the country is under attack, when people are being killed all around you in that attack, in all probability, if the man who has his house damaged is asked to bear $50 of the loss himself? It will greatly simplify the administration if we retain this provision, and I do-not think it is at all unjust.


John Horne Blackmore: That $50 might not
be serious to the minister or to me; it might not be serious to a person with a good income, say $1,500 a year, but there are many people who have no such incomes, to whom damage of $25 to their houses would be a calamity.


James Lorimer Ilsley: Home owners?


John Horne Blackmore: Owners of homes; people who have struggled all their lives in order to possess a little house, for which they have finally paid after fifteen or twenty years. If they sustain damage amounting to $25 or $30, with a number of children to take care of, it becomes almost impossible for them to meet the cost of repairs. Perhaps if the minister were to say something like this: Wherever the damage which has been sustained is such as to render the dwelling uninhabitable,"' then the damage would be repaired so that the home would be as habitable as it was before the damage was sustained. I see noreason at all why that should not be done. In connection with the homes of the well-to-do, homes worth $3,000, $4,000 or $5,000, the deduction of $50 could be allowed to continue.


John Ritchie MacNicol: In the riding which I represent there are many streets on which there are many houses, some of which I have visited, in which I doubt very much if there was $50 worth of furniture altogether. If damage amounting to $50 were done to the roof or windows of one of these houses, I doubt if those people could afford any repairs at all.
I should think there ought to be some provision for the very humble citizen. In my house or your house, or the house of the average man, $50 would not be anything at all, but in the houses of the humble working

IV'ar Risk Insurance
men in the congested districts of Toronto, Montreal and other cities, $50 would be quite an item.	'


Howard Charles Green: I suggest that the minister give this very careful consideration; for 1 think there is a great deal in what the hon. member for Lethbridge has said. As a solution I suggest that the minister fix the amount at say $25, and let it go at that; in other words, make it $25 deductible to use a term common in automobile insurance. I think that would be. fairer. After all, $50 is a great deal of money for many people, and at that I think the way the section reads now one would have to suffer damage of $75 before one would get any compensation, $50 to the home and $25 to the furniture. In other words the householder would have to pay a total of $75 himself, which makes it that much worse. I do suggest that there should be the one flat deduction of $25.


John Horne Blackmore: Would the minister consider some amendment such as this: Right after the words "fifty dollars" insert words to this effect: "except in the case of a dwelling house where the damage is such as to render it uninhabitable."


James Lorimer Ilsley: I would not favourably consider that amendment. The only amendment that in my opinion would be proper for consideration would be a change in the amount


John Ritchie MacNicol: From $50 to $25.


Mr. KINLEY:: This was all discussed in committee, and $50 was agreed upon.


James Lorimer Ilsley: Yes, it went through the committee, and I do not think I would change it. If we experience some trouble it could be considered again. All these things can be done later. But I do not feel like making any change in that. We have had this bill here for two or three months; it has gone through the committee. I know it is the natural thing for hon. members to make as much provision as they can for the people in the bill, and I am not blaming hon. members for that; but as I said to the hon. member for Lethbridge, it does not seem to me to be an abnormal thing to ask the property owner to assume damage up to $50. If there is some bombardment in Halifax or Vancouver or farther inland and we find there is real, serious hardship as a result of the $50 limit, we shall have some experience to go on. I think this will work out all right. I do not think the people are going to be thinking about it when there is a bombardment, either before or after. It is the people as a whole paying the people who suffer
loss. This money does not come out of the air; it comes from other people. I may not be able to convince the hon. member for Lethbridge of that, but I think I will stand by the taxpayer on this $50 limit until I see a more clearly demonstrated need.


John Horne Blackmore: The difficulty lies in this, that the humble men are paying the taxes. A man with a $450 house who has $45 damage done to it has sustained a loss of 10 per cent of the value of his property; the man with a $4,500 house who sustains a loss of $450 has sustained only a 10 per cent loss. He will get every cent of the $450 loss, but the man with the $450 house will get nothing. That is a gross inequity, a gross injustice. The man with the $4,500 house will probably, in 60 per cent of the cases at least, be able to make good his $450 loss with far greater ease than the man with the $450 house will be able to make good his loss.
The first thing that people with very small incomes will think of will be the damage to their houses. I have sat in houses and seen women break into tears because a window-light was broken, because they knew that to replace it meant they would have to take the price out of the children's food. I do not know whether the minister and a good many hon. members who considered this bill have known what it is to go through hardships. I have the impression from the reaction toward it, that most of them would grow much wiser by having to go through real difficulty. I would like to have them follow the kind of life I had to live for fifteen or twenty years of my life; they would then realize how hard it is for such people to sustain a loss of $20 or $25. They would realize that the very first thing that those people would think of, in case a chimney were blown down for example, would be, "How in heaven's name are we going to live without that chimney?" especially if it were winter time. But if the cost of replacing the chimney is less than $50 they get nothing, notwithstanding that the habitability of their house has been destroyed. I do not wish to be overinsistent, but I believe there is great danger in this house of disregarding the sufferings of the poor. We ought to bear constantly in mind that the number of poor in this country is far greater than we ordinarily realize. The minister should make some modification which would not even exclude $25 damage. If damage is done to a house so that it is no longer habitable, especially in case the people are unable to repair the damage, that repair ought to be made by the government. The habitability of the house should be restored.
War Risk Insurance


John Ritchie MacNicol: When. I was speaking a few moments ago I heard an interjection that the committee-I assume the hon. member meant the banking and commerce committee or whatever committee it was that considered this bill-had surveyed and looked into every angle of the legislation and sent the bill back to this house; as much as to say that the rest of us have nothing to say. There are not many members on the banking and commerce committee-


An hon. MEMBER:: Fifty.


John Ritchie MacNicol: That is fifty out of two hundred and forty-five. I was not on that committee, and I am not going to abrogate my rights in this house to that or any other committee. If I have any comment to make I will make it irrespective of anything the banking and commerce committee may do about a bill.
The hon. member for Lethbridge spoke of houses of a value of $450. I saw, in a small village north of Toronto, a very nice little house together with a lot sold recently for $250, and I venture to say there are in the coves and inlets of Nova Scotia and British Columbia many houses for which $250 would be considered a good price. If one of those little houses happens to be blown up, as is more likely on either coast than in York county, a loss of $50 would be a very large item on such a property.


James Lorimer Ilsley: If the house were blown up, the owner would get the whole thing without any deduction.


John Ritchie MacNicol: But damage of $50 to such a house would be a very large proportion.


James Lorimer Ilsley: If the damage were less than $50, we would not recognize it.


John Ritchie MacNicol: I endorse what the hon. member for Vancouver South said. What the minister wishes to do is to set some limita7 tion. I agree there should be some limitation to prevent unfounded claims, but $25 would be just as good a limitation as $50.


Mr. NOSEWORTHY:: Am I correct in assuming that under section 8, subsection 3 (b), any householder who sustains a loss of gold, silver plate, jewellery, furs, et cetera, will be reimbursed for that loss up to $250? A loss of $25 or $30 I presume would be paid; yet the poor citizen whose house may not be worth much more than $50 would not be reimbursed for damage up to that amount. I know many houses in York South for which I doubt if one would get $50 on the market to-day.
I think the minister will have a good deal of 
explaining to do to that class of people if he puts through legislation which will grant a person who can afford diamonds and furs compensation for $25 or $30 damage to those diamonds and furs, but refuses to give a householder whose property may not be worth more than $50 or $100 compensation for damage under $50.


James Lorimer Ilsley: The provision with respect to diamonds and furs to which the hon. member refers has a limitation.


Richard Burpee Hanson: It is a ceiling.


James Lorimer Ilsley: It is a ceiling. It was $400; we cut it to $250. That does not necessarily mean he gets the $250; it depends upon other things.


Mr. NOSE WORTHY:: But there is no minimum.


James Lorimer Ilsley: There is a minimum of $25.


Joseph William Noseworthy: That is, you may get $30 for damage to furs, but you cannot get anything for damage of less than $50 to your house.


James Lorimer Ilsley: If the damage to your chattels as a whole is under $25, you get nothing. "Chattels" does not exclude this particular class of chattels, but there is a limit on the total amount that can be claimed for these chattels.


Joseph William Noseworthy: My point is that compensation as low as $30 may be paid in connection with furs or diamonds, but damage to a house amounting to less than $50 cannot be paid. Is that not correct?


James Lorimer Ilsley: For chattels as a whole, yes. Theoretically you can pick out such things.
A person might have a fur or a diamond bombed. But this is a provision for chattels^
I think it is unnatural to go fishing around among chattels, pick out furs and diamonds and say that a person could lose a diamond worth $30 and get the full $30. If a person owns a house and it is damaged to the extent of $45, he would not get anything. If that is discrimination in favour of the poor as against the rich; if that will give my hon. friend something to make a speech about, it is all right, but it will not worry me.


Joseph William Noseworthy: This legislation is going to look bad to the poor people of this country, *and I would hate to be a party to it.


Howard Charles Green: I was not a member of the banking and commerce committee, but I was permitted to sit in at the meetings. The

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impression I got in connection with this limitation was that it had been inserted to make it convenient for the insurance men to administer the legislation. I think this is an insurance man's section. You have that on the one side, and then on the other you have many poor people to whom S50 is a great deal of money. I know in parts of the riding which I represent there are many house owners who would find it very difficult to raise $50 to repair damage done by bombs. I urge the minister that he at least change this to $25, thereby giving the poorer people some consideration.


Mr. McLEAN (Simcoe East):: The last speaker has suggested that this is an insurance man's section, but I think it is a taxpayers' section. If I were to suggest any change in this section, it would be to have $50 deductible from all property damage, and $25 deductible from all claims for damage to chattels. It is well recognized in some lines of insurance, such as automobile, that there is a tremendously excessive cost in adjusting and administering small claims, and it is almost universally customary to have a deduction of $25, $50 or $100. If a bomb should be dropped in a particular section, it is quite likely that the only damage to hundreds of houses would be a few panes of glass broken. It seems to me to be absurd that the country should be put to the tremendous cost of adjusting all these trifling claims. I hope the minister will not be persuaded to alter this section.


John Horne Blackmore: I do not wish to labour this matter too much, but there are plenty of people in my constituency who would suffer seriously from a loss of $40 to $50. I wish to draw the attention of the committee once more to the fact that $3,000 is to be paid without any question at all; but when it is suggested that compensation be paid for damage done to humbler homes, it is considered to be a waste of public money. How in the world can we get consistency out of a situation like that? If we were not giving $3,000 to the well-to-do and wealthy people, it would be a different matter.
Last night I said there was confusion in the bill because of an attempt to defer to two points of view. One view is that of the life insurance companies which is based upon two principles. The first is to replace the financial loss, and the second is to make a profit. This bill is guided by two entirely different principles. The first, as I said a short time ago, is that each family shall be guaranteed the right to continue to live in their dwelling. The second is that the value of any dwelling shall be restored. The wealth of Canada should not be depleted, because
the wealth of Canada consists in its ability to produce goods and services and deliver them. The ability to produce services in a very humble house, costing probably only $250 but able to shelter a man, his wife and three children, is considerable. If that value is impaired, then, according to the second principle which ought to guide us, the damage should be replaced.
As I said, there is confusion because the minister in the bill is trying to apply the principles of fire insurance to this bill, which is not in any sense of the term intended to be a fire insurance bill. This bill is concerned with human value. Its main object is to enable the people of Canada to continue to live in their houses. If a bomb should be dropped in certain sections of Ottawa, there would be hundreds of houses which could qualify under the $3,000 provision.


John Ritchie MacNicol: In Hull, across the river, will be found the cheaper houses.


John Horne Blackmore: Exactly. Across the river there are whole areas where, if the house owners sustained a 7 or 10 per cent loss, they would get nothing. This may not worry the minister, but it certainly worries me.


Gordon Knapman Fraser: This section reads:
No payment under this act or under any contract of insurance shall be made in respect of war damage to property unless the total amount of the claim otherwise payable is in excess of fifty dollars.
Would it not be possible to add a stipulation, "except in the case of property of a value of less than $1,500 or $1,000"? Then, if a property were valued at over $1,000, the $50 [DOT]stipulation would be all right. I mention this because I was the first one in the banking and commerce committee to bring up this matter.


James Lorimer Ilsley: This bill passed the banking and commerce committee, and there are arguments both ways on it. I stand by my position, and I am going to stand up for the taxpayer. I am one of those in the house whose duty it is considered to be to stand up for the taxpayer, and I am going to do so on this occasion.


John Horne Blackmore: How can the minister say that he is standing up for the taxpayer when he is willing to pay $2,500 or $3,000, and then refuses to pay a small loss to those who will find it far more burdensome? How can he say he is standing up for the taxpayer when people who live in humble houses are paying taxes which, to them, are just as burdensome as are those paid by the more well-to-do burdensome to them?

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Howard Charles Green: I should like to move an amendment. I do not think the minister is quite accurate when he says that he is standing up for the taxpayer. What he is doing, in effect, is forgetting the little taxpayer who has his house bombed. I move, seconded by the hon. member for Davenport:
That section 10 be amended by substituting for the word "fifty" in line 20 the word "twenty-five".


James Lorimer Ilsley: The amendment is obviously out of order, Mr. Chairman.


Richard Burpee Hanson: On the
theory that it increases the burden on the taxpayer. At the same time, out of regard to a very large class of people who may suffer damage beyond their ability, relatively, to bear, I think the minister might well accept the amendment. I am not unmindful of the point made by the hon. member for Simcoe East that in contracts of automobile insurance there are these limitations, but after all this is a gift on the part of the crown, and why should we be a little too cheese-paring? That is the impression it leaves on my mind, although 1 have not given it any great consideration. To accept the amendment vwould be a gesture that would not cost the treasury very much. I realize that there are difficulties with respect to the administration of small claims; of course there are.


James Lorimer Ilsley: There would be a tremendous cost of adjustments.


Richard Burpee Hanson: I know
that the automobile companies make you pay for it if you take out full coverage, and I know what that extra cost means in dollars and cents. But I suggest that in legislation , of this kind the minister might very well yield to the supplications, shall I call them, of the members who have raised this question.


James Lorimer Ilsley: I am almost touched by the hon. gentleman's appeal. On several former occasions, after a large number of members had risen in their places and besought the Minister of Finance to do something that would ease the financial lot of those whose interests they represent, the leader of the opposition has come in at the end and made a persuasive appeal in line with hon. members who have preceded him.
The accusation of cheese-paring is noted-


Richard Burpee Hanson: If the
minister does not like that word I will take it baok.


James Lorimer Ilsley: I do not mind it myself because I have a feeling that the period when it is popular to get ever-increasing expenditure 
out of the treasury is ended and that the minister who stands up for some cheese-paring by the government is going to be, for the first time in a great many years, on the popular side of the argument, and accordingly I look for a change in the spirit and tone of the House of Commons by the shrewd politicians in the house.
I am asking the people of Canada to do a lot of cheese-paring themselves this year, and I do not aim to have it said that they are going to do all the cheese-paring. I aim to have it said that the government is also going to do some cheese-paring.


Richard Burpee Hanson: It is about time, and I am glad to hear that.


James Lorimer Ilsley: If a city like Halifax is
bombed and windows are blown out, the odd chimney topples over, and so on, there is going to be a terrific job of adjustments. The insurance companies have no interest in getting rid of this matter. It is not a move on the part of the insurance companies to get rid of the matter. As the hon. member for Vancouver South says, all that cost comes on the treasury. I am going to stand by the section because I am going to stand by the taxpayer, and standing by this section is standing by the taxpayer. If we find that there is widespread hardship we can always make a change by order in council, although I suppose we would then be criticized from the point of view that we were throwing the taxpayer's money out of the window by order in council.
The hon. member for Lethbridge says that it would not do some members of this house any harm to experience a little hardship, and as he was talking I was thinking of the people in Russia and the hardships they have gone through, and of how much interested they would be in the difference between $25 and $50 in a clause like this. I was wondering what they would think if they knew that in the capital of this dominion parliament was spending an hour or two in debating whether in case of a bombardment the property owner should not receive compensation if his loss were $25 instead of the $50 provided for in the bill. We are surely at a stage in this war and in the history of this country when a question like that is not important.


Richard Burpee Hanson: I thought that, too, when we were debating the plebiscite, and I am glad to congratulate the Minister of Finance upon a change of heart. Think of the days and weeks and weary hours that we spent listening to the debate on the address, and then again to the debate on the

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plebiscite, the worst farce ever perpetrated in this country, having regard to what we all listened to from that seat opposite me on Tuesday night.


John James Kinley: The minister did not speak at all on the plebiscite.


Richard Burpee Hanson: Now we are to have a new order.


Thomas Vien: Order. It is not permissible in a debate to refer to a debate already concluded.


Richard Burpee Hanson: I am
through, Mr. Chairman, so that your ruling does not bother me at all.


Ian Alistair Mackenzie: Order.


Thomas Vien: I do not think it is proper for the hon. gentleman to say that a ruling of the Chairman does not bother him.


Richard Burpee Hanson: If there was any discourtesy it was not intended. I do say, however, that I am not very much concerned over the ideas of the Chair about me after the exhibition we had here the other evening.


Ian Alistair Mackenzie: Order.


Thomas Vien: I do not believe the hon. gentleman can be allowed to use this language, and I regret to have to request him to withdraw it for the following reason-


Richard Burpee Hanson: You need not add the reason. I will withdraw it now.


Ian Alistair Mackenzie: Order, the Chairman is on his feet.


Thomas Vien: The Chairman is only the custodian of the honour and authority and dignity of the house or of the committee. The person of the Chairman is not involved at all. I must correct the impression that might be implied from the words just spoken that the Chairman might cherish any resentment on account of anything taking place here. No such impression can be allowed to be conveyed to the committee. The Chairman or the Speaker attempts, at least, and conscientiously, to be impartial, and he applies the rules because he is bound by the rules. There would be no necessity for a Chairman or a Speaker if there were not rules to be applied, and the debate would soon become a pandemonium were not the Chairman to apply the rules when the occasion arises. I am sure that the hon. gentleman, who is an old parliamentarian, will readily understand that and will gladly withdraw his remarks.


Richard Burpee Hanson: I have
withdrawn long ago, and I should like now to resume with some things I wanted to say.
I thought that the case made by the hon. member for Lethbridge, the hon. member for Vancouver South and the hon. member for Davenport merited some support, and I gave it such support as I could. It brought forward a declaration from the minister as to his future attitude toward the taxpayers of this country. I congratulate him upon that change of heart. I suggest that we now get on with the bill.


Thomas Vien: I must rule the amendment out of order, because it adds a burden on the public. Such an amendment can be moved only by a minister of the crown. Shall clause 10 carry?


John Horne Blackmore: I think that the
minister's mention of Russia was one of the most unfortunate things he has done this afternoon. If the Russians were able to look in on the way we are cavilling about letting poor people have a little advantage, while we are turning to fairly well-to-do people and giving them a great deal of advantage, the reaction of the Russian people would be altogether to our discredit. I am going to read to the committee and the minister a little quotation from the Canadian Teachers' Federation bulletin No. 5, which happens to bear right on this question of what Russia thinks about human values.


Thomas Vien: Order. We have before us clause 10 of the bill; the hon. gentleman has set out his views on the subject, and the minister stated his decision. The remedy is, not a repetition of the same reasons, but a vote to test the views of hon. members of the committee.


Ian Alistair Mackenzie: Wearisome reiteration.


Thomas Vien: There is a rule prohibiting the repetition of the same argument. As regards conditions in Russia, the minister, without exception being taken, made a brief, incidental remark in respect thereto, but this clause is not capable of justifying a general debate on conditions in Russia.


John Horne Blackmore: The whole question,
Mr. Chairman, is whether or not Russia is concerned with human values as against tax values.


Some hon. MEMBERS:: Order.


Thomas Vien: Carried.


John Horne Blackmore: On division.


Howard Charles Green: On division.
Section agreed to on division.

War Risk Insurance

On section 11-Time when payments may be made.


Richard Burpee Hanson: What is
contemplated with respect to the regulations authorized under this section, subsection 1, which reads, in part:
. . . specifying the time at which any payment under this act or under any contract of insurance shall be made. . . .
And then the overriding part which provides:	.
. . . the minister may, in his discretion, pay the whole or any part of any moneys payable under this act or under any contract of insurance at a time earlier than the time specified in such regulation.
Has the minister in mind the usual standard regulations contained in insurance policies, which I think would be reasonably satisfactory? If he has any other provision in view, I think we ought to know what they are.


James Lorimer Ilsley: Is it on subsection 1 that
the question is asked?


Richard Burpee Hanson: Yes, that
the minister may make regulations specifying the time of payment. What is contemplated by that provision?


James Lorimer Ilsley: What was contemplated
under this scheme of insurance was to defer the restoration of property until after the war. In England they found that it was perhaps inadvisable to rebuild at once; they might be bombed again, and there were other reasons for deferring as much construction as possible. I think this is the section which provides for the making of the regulations for deferring payment.


Richard Burpee Hanson: It does not just say, "for deferring payment"; it says, "specifying the time." Is it the minister's idea that it might become, in the case of a tremendous bombardment, too onerous and perhaps unwise, having regard to the danger of threatened rebombardment, to replace and rebuild?


James Lorimer Ilsley: That is right.


Richard Burpee Hanson: I want to know what is meant by the provision. I am not questioning it at the moment, but under ordinary circumstances there would be a time limit in the policy under which payment would be made.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Of course, if it is intended to give the minister full power

to make regulations deferring payment until after the cessation of hostilities, it might cause grave hardship.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: And he only limits that, in the concluding portion of the paragraph, to an exercise of discretion in himself, or to avoid undue hardship, or if the amount does not exceed the sum of $400. It seems to me that that $400 could very well be raised to the price of a moderate house-two or three thousand dollars.


James Lorimer Ilsley: It is an alternative.


Richard Burpee Hanson: Oh, yes, it is an alternative, but in any event I would assume that the minister would exercise a discretion in the case of the amount payable not exceeding $400. That, of course, is a small loss. Why should $400 be the limit? I think the amount should be a little more liberal in the case of rebuilding or repairing small houses where the damage would be more than $400.


James Lorimer Ilsley: Yes; well, the minister has the right to do that for the purpose of avoiding undue hardship. He may pay at once, if the sum is under $400, whether there would be any hardship or not from withholding payment. But in all cases of undue hardship the minister has a discretion to bring the time of payment back before the period provided for in the regulations. I think the general idea of the section is that the normal thing will be to make regulations deferring the time for payment of loss, with the proviso that nevertheless the loss may be paid at once to avoid undue hardship; or, whether undue hardship exists or not, it may be paid at once if the amount involved is under $400. There would not be any sense in withholding these small sums.


Howard Charles Green: Has the government any definite policy with regard to administering this section? It does seem, from what the minister has said, that the tendency will be to withhold payments until after the war. The war may last a long time, and in the meantime people in British Columbia and Nova Scotia who lose their houses will need shelter and furniture and chattels of various kinds. I suggest to the minister that the policy of the government may not be wise in regard to this section, that there should not be so much emphasis placed on withholding payment until after the war. That may apply very well in Great Britain, and I assume that this policy is simply copying the policy of Great Britain.

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I doubt very much, however, whether it is wise here in Canada. I sugggest that the minister be not too quick in adopting the policy of holding back until after the war; it may turn out to be very unwise.


James Lorimer Ilsley: We cannot tell what the policy will be until we see what happens. This is the policy followed in England, and it is a good thing to defer building and so on as much as possible until after the war, because the more building you do now, the more drain you make on materials and labour and so forth. On the other hand, of course that cannot be carried to the point where people are left drifting around without any shelter. All these factors will be taken into consideration. The English policy is embodied in this section; and if the legislation comes into play at all, if there is bombardment doing damage here, I do not see any reason why the English policy is not the right policy for this country.


Thomas Langton Church: What is the meaning of the words, "if he is satisfied either that the replacement or repair of the property damaged is expedient in the public interest?" It is not in the public interest that we should have this bill at all. It is not expedient; this is the wrong time for it. It will be observed that the minister has power to make rules and regulations. The details are set out at the foot of page 11 of the bill, section 33, which must be read into subsection 1 of section 11. I would point out that the insurance companies are protected while the government is not. The companies are backed by indirect guarantee of the government. Suppose the owner of certain property becomes a soldier. What happens then, if default is made? The minister said yesterday that he could have done all this by order in council under the War Measures Act. If so, what is the use of us? He threatened us with the War Measures Act, if you please, if we continued to insist on safeguards. If you ask any questions under this bill you are threatened with something of the sort.
A large body of public opinion is wondering how the government can afford money for such an undertaking as this in conjunction with the insurance companies. Is it expedient and in the public interest that this parliament should put into the hands of the governor in council the power to spend up to $400 on such a risk or contract or policy for such a purpose? I say it is not, and this is not the time. According to the minister's report that is what can happen. I protest against this way of doing business. I protest against the creation of more boards of control and a whole lot of officials, in this instance enabling
44561-257J
the government to pay out as much as $400 for such a purpose and in such a way. That is a lot of money. In my opinion this section, indeed the whole bill, should be rejected. It is not one that this committee should sanction at the present time. You, Mr. Chairman, are a lawyer, and you know, as all lawyers know, the difficulties that arise in connection with contracts' of insurance on property and with insurance companies. On the back of the contract the insurance company sets out a long list of rules and restrictions to be read into the policy and contract, and I predict that the average working man who seeks to take advantage of this legislation will not know the meaning of it. He will not know what it is all about if he comes under this insurance scheme and has a policy. In my opinion the whole scheme is launched for the benefit of the insurance companies, and at greater cost to give them the cream of the business. It seems to me that the officials in the minister's department are simply creating further burdens to be put on the shoulders of the Canadian tapayer, at a time when it is neither expedient nor in the best interest of the public that we should pass a law of this kind. I do not believe in this bill; I do not believe it will fulfil the purpose for which it is proposed; I do not believe it is in the interests of the working classes of the country. In my opinion they will not be protected under this measure. On any contract of insurance with companies that are under contract with the government to do this work and take these risks, are the companies solvent, and can they carry out their undertakings.


[Stage Direction]
Section agreed to.
Section 12 agreed to.
On section 13-Trustee, etc., may insure property.
Richard Burpee Hanson: This is a new section. I am wondering why it was not put in the original bill. I did not follow the discussion in the committee, but I should think it is proper.


William Chisholm Macdonald: I believe some question was raised in the committee, but I do not know how sound it was. In some instances there is a doubt as to whether the executor has power to insure. This is to clarify the matter.


[Stage Direction]
Section agreed to.
James Lorimer Ilsley: I wish to insert a new section 14, which will necessitate the renumbering of
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the subsequent sections. I will ask my colleague the Postmaster General to move the amendment.


William Pate Mulock: I move:
That Bill No. 56 be amended by inserting the following clause after clause 13 and by renumbering the subsequent clauses accordingly:
"14. Any property or goods laden or freighted in ships or vessels used solely in inland waters so long as they are in transit between two Canadian ports on the great lakes shall at all times during the transit be deemed to be in Canada; and any property or goods being carried between two points in Canada by the Canadian National Railways or the Canadian Pacific Railway shall at all times, during the transit be deemed to be in Canada."
We are taking the power to insure goods in Canada.


Richard Burpee Hanson: This is a consequential amendment. It follows from some other change.


James Lorimer Ilsley: I think it would be necessary anyway; I do not think it is necessitated by any other change. It was to make it clear that the goods, even though they crossed the international boundary line and came back into Canada, did not lose the benefit of the insurance by reason of the fact that they had so crossed.


Gordon Knapman Fraser: Does United States insurance cover United States boats in the same way?


James Lorimer Ilsley: I could not say. I do not know about that.


Howard Charles Green: What about boats going to Montreal or Quebec city?


James Lorimer Ilsley: It is as between two Canadian ports.


Howard Charles Green: But is it not restricted to the great lakes, according to the amendment?


James Lorimer Ilsley: I am informed that "great lakes" is defined not in this bill but in another statute. However, I will find out between six and eight o'clock whether it is in the shipping act or in some other statute. It has been assumed that the definition would apply here.


Howard Charles Green: Why should the definition of inland waters, as amended yesterday, not be made to apply in this section so as to cover the St. Lawrence as far as the isle of Orleans? Why have to refer to another act?


James Lorimer Ilsley: I think the best thing would be to change "great lakes" to "inland waters". That would cover every case that could be imagined.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


William Pate Mulock: In view of the discussion that took place just before we rose at six o'clock I should like to move that the amendment I then proposed be amended by changing the words "great lakes" to "inland waters," so that the amendment would read "between two Canadian ports on inland waters shall at all times during the transit."
Mr. O'NEILL: Would that exclude shipments going to Vancouver island, or from Vancouver to Nanaimo, or between Vancouver and Victoria?


James Lorimer Ilsley: In those cases neither the goods nor the ships are insurable. Let me make that clear. The bill does not provide insurance for ships at all anywhere, but there is a situation with regard to goods on inland waters which I thought made it very desirable to provide that goods on inland waters should be subject to the provisions of this bill. That is so for various reasons. In the first place there is the reason of convenience. One of the most important commodities concerned is grain. It is covered while in the elevators, and sometimes it is stored in boats on the great lakes. It would be very inconvenient-and there did not seem to be very much reason for doing so-to take off this insurance when the grain left the elevator and put it on again when the grain was put on shore somewhere else. So I thought we should cover the goods in transit in Canada. Goods on railways in Canada, which railways are competing with the boats, are insurable under this bill; and I thought it desirable, even though we have taken ships out of the bill entirely as I felt we had to do, to leave the insurance on goods which are in transit in Canada. This simply says that a movement of goods across the boundary line and back again between two points in inland waters, which would be between two points on the great lakes or between a point on the great lakes and a point on a river, shall still be deemed to be a movement within Canada. In the same way a movement on the Canadian Pacific railway or the Canadian National railway which starts in Canada and ends in Canada, shall be deemed to be a movement in Canada even though it crosses United States territory. That is all this amendment does.


Richard Burpee Hanson: I wonder why it was necessary to name the two railways in the latter part of the amendment. Why should it not read "any property or goods being carried between two points in

War Risk Insurance
Canada shall at all times during the transit be deemed to be in Canada"? I do not know the situation, but it might just happen to be truck traffic.
Mr. O'NEILL:	Or it might be on the
Temiskaming and Northern Ontario railway, between Toronto and Moosonee.


Richard Burpee Hanson: That would be within Canada all the time.


James Lorimer Ilsley: It is very much easier to identify goods when they are carried on the railways. If claims were permitted for losses in connection with trucks travelling through the United States, claims might be made for goods which really were not on the trucks when they left Canada. I am afraid there would be much more chance for fraudulent claims than there would be in connection with goods carried on the railways.


Richard Burpee Hanson: There
might be. I do not know if there is any traffic across Maine from Quebec to the maritimes.


James Lorimer Ilsley: I do not think so.


Richard Burpee Hanson: Of course that is the easy way to get to New Brunswick from Montreal by motor.


James Lorimer Ilsley: I do not know.


Richard Burpee Hanson: I just offer this as a suggestion to cover a possible claim, but if the minister does not care to accept it I am not going to labour the point.
Amendment as amended agreed to.
Sections 14 to 18 agreed to.
On section 19-Contract void for misrepresentation or fraud.


Richard Burpee Hanson: Are these the standard insurance sections? Are these the ordinary statutory provisions which the provinces have enacted?


James Lorimer Ilsley: I am not sure. Perhaps some member of the committee would know better than I.


Richard Burpee Hanson: I thought perhaps the minister's adviser would be able to tell him.


James Lorimer Ilsley: I cannot say whether or not they are copied from any other act. They seem to be all right.


Richard Burpee Hanson: I think section 18, now section 19, is quite all right; I
think that language is in the ordinary formula. Subsection 2 of section 19, now section 20, is a very proper clause; I agree with that. Subsection 1 of that section, however, makes a false representation or statement in connection with any claim an offence. Of course it means "knowingly"; the mens rea takes a little of the harm out of it. Does the minister think it is necessary to have subsection 1 and make false representation an offence? Under section 18, now section 19, the contract becomes void for misrepresentation or fraud. Under section 19, now section 20, subsection 2, makes the claim vitiated by fraud; but subsection 1 goes a long way in connection with a matter of this kind; it makes it an offence subject to fine up to $250 or imprisonment not exceeding three months, or both. I have some doubt whether we should do that. Does the minister think he has to have that when he has the other safeguards?


James Lorimer Ilsley: Section 19, now section 20,
does not relate necessarily to the statement of the assured; it may be the statement of a third party.


Richard Burpee Hanson: He would naturally be the agent or representative of the assured1; you might say it was the assured.


James Lorimer Ilsley: It is desirable to have a
statutory offence here. If not, the only offence would be that of obtaining money under false pretences.


Richard Burpee Hanson: You
always have that, or the offence of attempting to do so.


James Lorimer Ilsley: I am under the impression
that there are difficulties about making out a case under a charge of obtaining money under false pretences, or attempting to do so, which might not exist under this provision.


Richard Burpee Hanson: It seems
to me there is a variety of offences in the criminal code that would be applicable to a false or fraudulent claim of this kind, and under the criminal code the penalties would be much more severe. I should think there is ample provision in the code for any situation which conceivably might arise in connection w'ith a claim of this sort. I dislike creating new offences, especially when the code is so full of provisions against dishonest or fraudulent infractions of the law.
I should have thought that the minister would be briefed on this nnint,. because a
War Risk Insurance

question, of this kind is bound to arise where new offences are being created by statute which may or may not in themselves be, shall I say, mala in se, if that is a proper term under the civil law.


James Lorimer Ilsley: I must admit I do not know too much about some of these sections. They went through the committee, which I thought was a pretty competent committee, and do not seem to have attracted anyone's criticism.


Richard Burpee Hanson: There do
not seem to have been any good lawyers on the committee.


James Lorimer Ilsley: I assumed if there was anything wrong with this section there would at least have been some argument about it in the committee, or it would have been brought to my attention. I am not arguing the case for the sections, but they look reasonable enough on their face. It may be there are offences in the criminal code with penalties more severe; if so, the crown would have its option. But these provide for summary conviction, and I suppose that is desirable under certain conditions.


Richard Burpee Hanson: That is
only a method of procedure.


James Lorimer Ilsley: Yes, but it is important
sometimes.


Richard Burpee Hanson: I would invite the Minister of Justice to give us the benefit of his opinion. I have great respect for the minister's position in the profession. I am sure any contribution he would make to this discussion would be of great value.
Mr. ST. LAURENT: The present incumbent of the office must confess that his practice in the criminal field has been very limited. I know, however, that difficulties have been experienced to a certain degree in connection with false claims made against the workmen's compensation boards, which have had to prosecute persons for attempting to obtain money by false pretences, and it is a cumbersome procedure to have to resort to in a good many of these cases. If there had been such a provision as this, guarding against claims made falsely, I know it would have been a great convenience. The offence of obtaining or attempting to obtain money by false pretences has to be proceeded on under the code by way of indictment; that method is cumbersome, and a speedy method of dealing with small claims improperly asserted would seem to be more convenient. This provision would not oust the other, whenever there were grounds that would seem to warrant the more solemn form of indictment under the criminal code.

I would think that relatively small claims made in circumstances which might be charged as wilful false representation could be more conveniently dealt with by summary conviction than by way of indictment.


Richard Burpee Hanson: The minister is, I think, dealing with it, not as a matter of principle but purely on the ground of expediency.
Mr. ST. LAURENT: Not exactly on the ground of expediency, but on the ground of this being a more convenient method of dealing with an attempt at an offence that may not involve a large amount but that still should be prosecuted. There are cases under the foreign exchange control regulations which do not involve large sums, which have to be proceeded upon in a cumbersome manner and in which the time taken and the amount expended seem out of proportion to the amount involved. It may be said to be just a ground of expediency, but still there seem to be reasons in the public interest for not setting the machinery of the high courts of justice in motion in connection with small matters.


Thomas Reid: Could the Minister of Finance or the Minister of Justice tell us if there is any other act on the statute books that goes as far as this is going? This seems to be something new. I question whether any hon. member, if he lost his home and chattels, could tell the exact facts about his loss. A man might stretch the truth a little; under this section he is going to be fined or imprisoned or both, and all his claim falls by the board.


Richard Burpee Hanson: I was just about to ask that question. I think this was put in by the draftsman to make it easier to get convictions for false claims. I doubt if there is a similar section in any other similar legislation, and I hate to see this parliament creating a new offence. My hon. friend the member for Trinity (Mr. Roebuck), the former attorney general of Ontario, must have had considerable experience in connection with matters of this kind, and I should like him to give us the benefit of his views. I solicit in advance his support of my contention against this section.


Mr. ROEBUCK:: It is not often that my views are asked for, and I feel highly complimented. I feel very free to give them. There is nothing that I know of in the general insurance law, particularly of Ontario, which is now the common law of all provinces, that is comparable to this section. As I remember the general law, the common law

War Risk Insurance
applies. That is to say, if there is something obtained by fraud and it can be shown that it is fraudulent, that which has been obtained wrongfully is withdrawn. But this section goes further than that. I doubt if it is possible to make one of the usual claims under an insurance policy and at the conclusion of it be prepared to guarantee that every statement is correct. I imagine that a large percentage of such claims would show that something said therein was inaccurate and that the person who made the claim knew it. This is so because of the difficulty of making a claim. This bill does not change the procedure; this changes the substantive law, and it provides a penalty equal for a white lie or a black lie, equal for a big lie or a small lie; anything which is knowingly done, no matter how small it may be. The penalty is the loss of the entire claim, not that portion of the claim which was supported by fraud or that portion which was collected as the result of fraud; the untruth and the knowing untruth of any statement disentitles the insured to all the benefits. I think that is extreme, unnecessary and inadvisable. I believe we should rely on the common law.


Richard Burpee Hanson: I agree entirely with the hon. member, and I suggest that the minister delete this clause.


James Lorimer Ilsley: I would be greatly surprised if even the statutes of Ontario did not contain a provision similar to this.


Ian Alistair Mackenzie: All the statutes have it.


Richard Burpee Hanson: I am sure they have not.


James Lorimer Ilsley: We will send for a few and see. The leader of the opposition is talking about section 19, which is now section 20. The hon. member for Trinity (Mr. Roebuck) is objecting to subsection 2.


Richard Burpee Hanson: He was, in the latter part of his statement.


James Lorimer Ilsley: The hon. member for Trinity has no objection to subsection 1.


Arthur Wentworth Roebuck: I was discussing subsection 2.


James Lorimer Ilsley: Let us deal with this patiently and carefully.


Arthur Wentworth Roebuck: I have no objection to subsection 1.


James Lorimer Ilsley: In the first place, what section are we talking about? We are talking about section 19, page 7 of the bill, which, because
of the insertion of a new section, has been renumbered section 20. There are two subsections to this section. Subsection 1 creates a statutory offence which is something like the criminal offence of obtaining money under false pretences, but which extends beyond that offence because in obtaining money under false pretences the person liable is the person who obtains the money for himself. This section goes farther and makes liable also the person who helps out the person who is getting the money, the third party. This may be a witness, an agent or an accomplice. That probably is the chief merit of the section; it is probably in that clause that lies the chief necessity for the section. But apart from that altogether, it is desirable, and it certainly does no harm to create a statutory offence which is punishable upon summary conviction instead of putting the crown to the necessity of laying an information, seeking a commitment and going before a jury, with all the expense and delay that that entails.
I am at a loss to understand what objection there can be to subsection 1 of section 19, now section 20. The hon. member for Trinity, whose advice was sought in this matter by the leader of the opposition, agrees with me. He has no objection to subsection 1. The leader of the opposition has not taken particular objection to subsection 1. Perhaps he objects to subsection 2?


Richard Burpee Hanson: I have not studied it, but I will after having heard the learned dissertation of the hon. member for Trinity.


James Lorimer Ilsley: Subsection 2 reads:
Any fraud, or wilfully false statement made under oath or in a statutory declaration in relation to any particulars or proofs of loss shall, notwithstanding any penalty under this or any other act, vitiate the claim of the person making such oath or declaration.
The hon. member for Trinity says that that draws no distinction between white lies and black lies, between little lies and big lies. If it is a lie he does not get any money. I do not know the distinction between white lies and black lies, but I should think that fraud would be a distinction. I should think that if a fraudulent statement is made, it would be a black lie, and it is only black lies that are covered by the section. Black lies vitiate claims for insurance, I believe in every province. My recollection is that under the fire insurance statutory provision of Nova Scotia, when a man makes a fraudulent or a wilfully false statement in his claim he vitiates the claim so far as getting his insurance is concerned.
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Richard Burpee Hanson: Fraud
ought to vitiate a claim.


James Lorimer Ilsley: The hon. member for Trinity could not see any parallel in the statutes of Ontario. He may be right, but I will be surprised if he is.


Angus MacInnis: Not being learned in the law, I suppose I should not attempt to speak. But it seems strange to me that we should be listening in this house to arguments in favour of making it easy for a person to get something by, as the minister says, telling lies. This is the most amazing thing I have ever heard. There is one point which I think could be raised against vitiating a claim because a false statement had been made. There may be persons who have an interest in the claim but who had no part in the fraud perpetrated, if that is the right term to use. A claim may be made for insurance on a house by the head of the household. He may give false evidence and, if there is a family, the loss will fall not only upon that individual, but upon the family as well. I do not think it is right to punish all concerned for the fault of one. I think this situation could be met in subsection 2 in the same way as it is met in subsection 1, namely, by a fine or imprisonment. We passed over section 18, which is now section 19, very lightly, with scarcely any consideration at all. As now worded it is more objectionable than section 19, now section 20. It reads:
If any person applying for insurance . . . falsely describes the property . . .
A person may, quite innocently, falsely describe a property. If he does so innocently, he should be protected, and he is protected in section 19, now section 20, which reads:
If any person knowingly makes any false statement . . .
If a person knowingly makes a false statement, he is defrauding the state and should be penalized; but if a person applying for insurance, quite innocently, falsely describes the property, he should not be punished for that.
I think the word "knowingly" should be inserted, so that it would read "knowingly falsely describes the property".


Mr. MARTIN:: The hon. member has overlooked the words "which is material to be made known to the minister".


Angus MacInnis: I do not think that helps the situation; but as I said before, I am not learned in the application of legal phraseology, and I shall have to leave it to those who are. But I say again that, with the exception of subsection 2, these are not unreasonable provisions.


Arthur Wentworth Roebuck: I feel that I should make some reply to the statement of the hon. member for Vancouver East that we are arguing in favour of people getting something by telling lies. That is an extreme statement, and it is not what I was doing. The distinction between section 18, now section 19 and subsection 2 of section 19, now section 20, is this. In section 18, now section 19, misrepresentation of any circumstance which is material to be made known to the minister-that is, material to the risk-voids the policy, and so it does in the general Insurance Act. But subsection 2 of section 19, now section 20, says that: "any fraud, or wilfully false statement" of any kind, although it may not be material to the risk, vitiates the entire policy, even though nothing has been secured by such statement. If it is fraudulent, that is enough; if it is wilfully untrue, that is enough. The general insurance principle is that these acts which are untrue vitiate the claims which these untruths support, but it does not put the man out of court entirely with respect to claims which are truly supported and are just claims. That is why I objected to subsection 2, namely that any misrepresentation or any false statement, however immaterial, voids the entire policy.


James Lorimer Ilsley: I now have the statutory conditions in Nova Scotia and the statutory conditions in Ontario, and I think they are uniform throughout Canada. Section 16 of the statutory conditions of the Ontario Insurance Act reads:
Any fraud or wilfully false statement in a statutory declaration, in relation to any of the above particulars, shall vitiate the claim of the person making the declaration.
The "above particulars" are apparently those in the sections relating to proofs of loss and the particulars of the proofs of loss which are found in the immediately preceding sections.


Richard Burpee Hanson: Do they not apply to the application too?


James Lorimer Ilsley: No. In this section we are talking purely of false statements in the particulars of the proofs of loss, and the section is part of the statutory conditions which are uniform, I believe, throughout Canada. These statutory conditions are identical with those in Nova Scotia. My hon. friend the member for Halifax (Mr. Macdonald) advises me that they were adopted on the recommendation of the Canadian Bar association.
The section in the Nova Scotia act is the same as the clause here, to which the hon. member for Trinity takes exception, and which reads:
Any fraud, or wilfully false statement made under oath or in a statutory declaration in

War Risk Insurance
relation to any particulars or proofs of loss shall, notwithstanding any penalty under this or any other act, vitiate the claim of the person making s:ch oath or declaration.
It has not struck anybody yet that there was anything improper about that; and my recollection was, just as soon as I heard my hon. friend take exception to it, that that was one thing we always bore in mind.


Richard Burpee Hanson: Is not that declaratory of what has been the common law?


James Lorimer Ilsley: Perhaps it is; I do not know, but I had in mind that old provision in the statutory conditions.
Now let me go back to the other one to which the hon. member for Vancouver East takes exception. He takes exception to section
18,	which is now section 19, and says that there should be something inserted about "knowingly", but that section is a copy of statutory condition No. 1, in the Nova Scotia statutory conditions, which reads:
Misrepresentation.-If any person applying for insurance falsely describes the property to the prejudice of the insurer or misrepresents or fraudulently omits to communicate any circumstance which is material to be made known to the company in order to enable it to judge of the risk to be undertaken, the contract shall be void as to the property in respect of which the misrepresentation or omission is made.
The section in the bill is identical with that except that the words "His Majesty" are used in the bill instead of the words "the insurer".
That leaves only the first subsection of section 19, now section 20, and it may be that there is no clause like that in the statutory conditions.


Richard Burpee Hanson: I agreed at the very beginning that section 18, now section 19, sounded like the statutory condition, and I recall that before the law was codified that was the common law, and the same may be said of subsection 2 of section
19,	now section 20. The hon. member for Trinity evidently has overlooked what has occurred in the legislature of his own province. With respect to section 19, now section 20, I submit that it is not necessary to create a new statutory offence. I am doubtful whether you will find anything like that in the Insurance Act, although I say that with great reserve because I have not looked at it for years; but if it is there, I shall be very much surprised.


James Lorimer Ilsley: My hon. friend the member for Halifax (Mr. Macdonald) points out the reason why there is no counterpart of section
44S61-258
19, renumbered section 20, in the provincial acts.


Richard Burpee Hanson: The provinces would have no jurisdiction.


James Lorimer Ilsley: Yes. It is a provision of criminal law, while the other clauses are provisions of civil law.


Richard Burpee Hanson: Quite so. That is the reason why it would not be in. But behind that, is there not a reason that appeals to the minister? He is creating an offence that he does not really need. It is wholly covered by the provisions of the criminal law. I am not going to labour the point any further. I suggest that there is ample protection now in the criminal laws of this country, and we should not be adding one more offence to another.


[Stage Direction]
Section agreed to.
Sections 19 to 24 agreed to.
On section 25-Officers, clerks, employees.
Richard Burpee Hanson: Has the
minister appointed a new supervisor; how much salary is he going to be paid; and is it intended that the position shall be a permanent one? Are the clerks, officers and employees to be appointed by the minister or the governor in council? I suggest that the usual rule should apply and that we should, where practicable-I admit there are certain cases where it may not be very practicable to do so-make appointments by the ordinary law of this country through the civil service commission. What is it intended to pay to the new supervisor?


James Lorimer Ilsley: Nothing.


Richard Burpee Hanson: Well, that is refreshing. Another dollar-a-year man. Is he coming from the insurance companies?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I commend that to my hon. friends on the left. I should like to know what they have to say about it. I think it is all right, if you get the proper supervisor.


James Lorimer Ilsley: The supervisor will be Mr. James Matson, who is the general manager of the Royal Insurance company in Canada-


Richard Burpee Hanson: A good
man.

War Risk Insurance


James Lorimer Ilsley: -and of the London, Liverpool and Globe. He is in my judgment an excellent man-


Richard Burpee Hanson: I agree.


James Lorimer Ilsley: -and is very anxious to do a war job, and his companies have agreed that so far as they are concerned he may come for nothing; that is, he will be paid his travelling and out-of-pocket expenses and nothing more. He is busily engaged at the moment in getting this scheme set up. He is not to become a permanent officer of the government or a permanent civil servant or anything like that; he is taking this on as a war job.
With regard to the other question; we have got away from the provision that these war bodies must go to the civil service commission for their staffs.


Richard Burpee Hanson: A good
long way past it.


James Lorimer Ilsley: It is necessary to have some elasticity and not too much rigidity in that regard in time of war. When I say that I should say also that, despite the fact that the governor in council is given power by this section and by sections in a number of other acts to appoint officers, clerks and employees, the general practice, at least up to a fairly high salary level, is for the civil service commission to make the appointments. There is an order in council that the civil service commission shall make all appointments unless otherwise ordered by the treasury board or by the governor general in council-I think those are the terms-and the result is that the great majority of the appointments, all the lower ones and in some cases all appointments, are made by the civil service commission.


John Ritchie MacNicol: Under sections 23 and
24, now sections 24 and 25, they are made by the minister.


James Lorimer Ilsley: That is varied by order in council. There is an order in council providing that, with a clause like this, they are nevertheless to be made by the civil service commission unless the governor in council or the treasury board otherwise directs. That is, the governor in council has the power, if it wishes, to make appointments without reference to the civil service commission, and in the higher ranges, from $5,000 up, if there are to be any here, the chances are that we would not go to the civil service commission, but the probability is, and the practice is, that in all the lower ranges the appointments will be made by the civil service commission. (Mr. R. B. Hanson.]


Richard Burpee Hanson: I am not objecting especially to that. I think there is a good deal of reason for the course pursued by the administration. If you give this appointment to Mr. Matson, who is said to be and, I have no doubt, is a very high type of man, and is coming here without remuneration, and you want him to do a real job, he ought to have something to say about whom he shall employ. It is a temporary position and not a real civil service appointment. If I were going to undertake a job of that kind I would certainly want to know who was going to work with me.


[Stage Direction]
Section agreed to.
On section 26-Insurance companies.
Richard Burpee Hanson: I should like to know what is contemplated or whether any arrangements have been made about remuneration. I do not understand that the companies are seeking to make any huge profit or any profit especially out of this arrangement, but I think it would be well and in the public interest if it were known what the arrangement is to be; or if it is not made, we should know that.


James Lorimer Ilsley: No agreement is made with the companies. The companies and the agents have offered to work for cost.


Richard Burpee Hanson: That is very good.


James Lorimer Ilsley: How costs will be arrived at is another question.


Richard Burpee Hanson: Largely a question of bookkeeping.


James Lorimer Ilsley: An agent cannot add up his overhead and the stenographer's salary and that sort of thing and figure out how much it will come to on a policy. Therefore a percentage or something of that kind will have to be worked out which represents cost. It is a sort of service fee. But it will be based on the principle that it is no more than cost.


Mr. GRAYDON:: Not cost plus.


James Lorimer Ilsley: No, not cost plus.


Mr. EDWARDS:: Is there any limitation in this section with regard to insurance companies? It says "any insurance company registered and holding a certificate of registry from the minister." Is the minister given a discretion there as to what companies he can issue the certificate to?


James Lorimer Ilsley: No. Those are registered
now with the insurance branch. But the min-

War Risk Insurance
ister has a discretion as to whether he will employ them all as his agents or not. He can pick and choose among them if he wishes to.


Manley Justin Edwards: What is the intention?


James Lorimer Ilsley: I think the intention is to authorize all the ones that are registered to write insurance. I would not care to be just held to that. There are some very small companies which are registered.


Manley Justin Edwards: There is a number of different kinds:	the board and non-board
companies, and the mutuals; some that are purely provincial or local in their operation, the foreign companies, and some that do business only in some provinces. What is the basis on which the minister is going to issue a certificate?


James Lorimer Ilsley: I am not going to. That is all done now. The companies which will be eligible under this section are registered now with the insurance branch.


Manley Justin Edwards: All the companies are
registered now ?


James Lorimer Ilsley: They are not registered pursuant to this legislation. They were registered before this measure altogether, and all these companies which are and have been registered, will be eligible for an agreement with the minister. The words are "holding a certificate of registry from the minister entitling it to transact the business of fire insurance in Canada."


Manley Justin Edwards: Is that not a certificate which will be issued pursuant to this bill?


James Lorimer Ilsley: No.


Manley Justin Edwards: I can understand that a great number of insurance companies are registered with the department of insurance, and that registry is the registry contemplated by this section.


James Lorimer Ilsley: Yes; that is correct.


[Stage Direction]
Section agreed to.
On section 27-Inspectors' powers.
Richard Burpee Hanson: Pretty full powers are given the inspectors, and I assume that is necessary. I notice, however, that paragraph (b) of subsection 2 has been added. What is the significance of the addition? Was it recommended by the committee? I am referring to the part that has been added, indicated by the vertical black line in the margin, under the marginal reference, "obstructing person having power to enter premises an offence." That seems to be creat-
44561-258^
ing another offence under the statute. Is it really necessary? I know that certain classes of legislation make such provision. For instance, in connection with crown land, a surveyor goes on the property and, if he is obstructed in the performance of his official duty, that is an offence. But what is the necessity for the creaton of such an offence here? Is it on the ground of expediency, as was the last one? Are these provisions in any other insurance acts?


James Lorimer Ilsley: This was added by the committee on the committee's own motion. I was not present and I do not know why, except from what I see before me; but I would gather that some members of the committee felt that there was an omission from the section. Paragraps (a) and (b) authorize two kinds of entry. Paragraph (a) is entry before the damage.


Richard Burpee Hanson: That is inspection.


James Lorimer Ilsley: Yes, inspection. Paragraph (b) is entry after damage. A penalty was provided for obstructing entry before damage, and I suppose the members of the committee asked themselves why there should not also be a penalty for obstructing entry after damage.


Richard Burpee Hanson: I do not think we should have two at all. However, if the minister wants it, I will not object.


James Lorimer Ilsley: I am informed that paragraph
(a)	did provide a penalty for both types of entry and that it was felt that the penalty should be heavier for obstructing entry under
(b)	than for obstructing entry under (a), and therefore (b) was added.


[Stage Direction]
Section agreed to.
On section 28-Appointment of advisory committee.
Mr. DIEFENBAKER:: What right has the insured, if his claim is disallowed, in whole or in part, to have recourse to the courts? Must the decision of the minister be final as far as he is concerned?


James Lorimer Ilsley: He has a contract with the crown and, I assume, he would proceed by way of petition of right. He has an action against the crown just as anyone else who might have a contract with the crown would have an action against the crown.


John George Diefenbaker: Why should there not be provision in the bill giving him that right instead of putting him in the position of having to make an application for the right
War Risk Insurance

to proceed by way of petition of right? In this particular case the crown and the insured have between them a direct relationship. Why should an insured, who believes he has suffered as a result of the decision of the minister in refusing to pay his claim in whole or in part, be required to secure a fiat? Why should there not be provision in the bill giving the aggrieved person the right of recourse to the courts?


James Lorimer Ilsley: I should not like to make such a provision in this measure unless I did it in a good many acts, because if we once begin providing in individual acts that a fiat is not required, then the standards of the Department of Justice will inevitably suffer transformation. There will be two classes of litigants having cases against the crown. There will be those who will have to come for a fiat and those who do not have to do so. I would feel that inevitably the result would be that, over a course of years, the Department of Justice would consider that, in the class of cases where a fiat was necessary, they had a high degree of discretion-they would have the right to refuse the fiat in cases where they did not think they would like to have a case brought against them. As it stands now, the standard of procedure is on a very high level. If a person has a case against the crown which is not patently frivolous a fiat is granted, as everyone knows.


Richard Burpee Hanson: A prima facie case.


James Lorimer Ilsley: Does anyone know of the dominion government refusing fiats?


Richard Burpee Hanson: I have heard of provincial governments refusing a fiat.


James Lorimer Ilsley: Not the dominion government. I do not say that they never refuse a fiat, but if a lawyer came along with a case, which was no case at all-


Gordon Graydon: How would you know that?


James Lorimer Ilsley: The Department of Justice knows when a case is patently frivolous, and it would be the proper thing to refuse a fiat. But I would not counsel disturbance of the practice of requiring a fiat. If we overthrow that principle we are going to do a lot of overthrowing.


Richard Burpee Hanson: I agree with that, but the whole thing goes back to the day when you could not sue the crown. The crown's person and property and everything else were sacrosanct. It was a matter

not of right but of grace to be able to get compensation from the crown. I suggest, however, that we have gone a long way from that, and we can go still further without doing great violence to the principle involved. We can go a long way in doing justice to the subject as against the crown. The minister has correctly stated that an excellent practice has been established over a period of years by the crown in the right of the dominion in the granting of fiats. I have brought a few actions against the crown, and I have never been refused a fiat. I will tell the committee what I have encountered. I have encountered a good deal of delay. That I do not attribute to the crown itself; I attribute it to what I may call, for lack of a better term, the system of red tape that obtains in government departments. But the situation is quite different with respect to provincial governments. There, a denial of justice often occurs. In my view, the day is coming in this country when the subject will have the right to sue the crown without the necessity of obtaining a fiat; without praying that right be done, and without the easement of fiat justitia. That day, I think, should be here very soon.
The minister says that the insurer has a contractual relation with the crown, and I would agree; that would be the basis upon which the claim would be made. I believe a just claim ought to be facilitated. If the minister takes exception to putting that provision in this special bill, perhaps he is right; but the day is coming when it will not be necessary to pray that justice be done in this country as against the crown. I have often thought, too, that claims against the crown ought not to be limited to the crown's own court, the exchequer court. The day is coming in this country when we ought to be able to sue the crown in the provincial courts of the country, for there is just as much justice done there as in the exchequer court. I say that with no intention of reflecting on the exchequer court, which I have found to be a very fine court in which to practise. But I am inclined to say to my hon. friend the member for Lake Centre that perhaps he could not just put that provision in this statute at this time without overhauling the whole machineiy in regard to claims against the crown. I do say that the position should be reviewed, especially now that the crown has gone into big business-


Gordon Graydon: And little business, too.


Richard Burpee Hanson: -and very often little business, and undoubtedly will continue in big business. The biggest business

War Risk Insurance
in the country now is being operated by the crown; and the day is coming, and should be visualized, when the subject will not have to go to the great expense of making his claim to the governor in council for the right to obtain justice. I am not sure that these remarks will be pleasing to the hon. member for Lake Centre, but I do not think you could make a special exception with regard to this statute.


John George Diefenbaker: With deference, I do not agree with the view of the leader of the opposition, nor is his view that of the Canadian Bar association. The view of the bar association is that the time has come when the subject should, as of right, have the privilege to take action against the crown. In this particular instance we have the crown entering into a contractual relationship with the subject, and placing the subject in the position that he is denied his right of recourse to the courts unless the crown grants him that right.
It has not been the experience of everyone that the crown has allowed the subject to obtain his rights by the granting of a fiat. I know of one very interesting case in connection with the Indians of this country. The Indians of western Canada obtained certain rights under a treaty, at the time when the great west from the Hudson bay to the Rocky mountains was ceded by the Indian tribes to Her Majesty Queen Victoria. In 1937 or 1938 those tribes found themselves in the position that the dominion government was derelict in its duty in not carrying out its obligations under that treaty and the act, and finally, after a very lengthy debate, the Indians of Mistawasis reserve were granted a fiat. The trial took place, and the judgment handed down was in favour of the tribe, to the extent of some $18,000. Then Indian tribes on another reserve in Saskatchewan, being in the identical position of the Indian tribe at Mistawasis, asked the crown for the right to take proceedings to recover the moneys due them, and for the assertion of their rights. To-day those Indians are in the position of still being denied justice, because of the fact that the crown has taken advantage of its rights and has denied them a fiat, or, in other words, has denied them recourse to the courts.
In recent years there has been a definite trend away from the courts, and I think the time has come when we in parliament should grant every individual the right of recourse to the courts of this land, and should not place any individual in a position where his rights may be determined by some administrative body or by a minister of the crown.
I think the time has come when the whole matter should be canvassed, the whole situation looked into, in order to assure to the subject the right he is being denied in ever-increasing measure-that is, an appeal to the courts as a consequence of administrative bodies being set up. The other day the Minister of Finance referred to the fact that parliament does not occupy the position now that it occupied once. I think one reason for that situation is that we as members of parliament are too prone to allow matters with which we should deal to be placed in the hands of administrative bodies, independent of parliament and responsible not to parliament but, indirectly, to the minister. In this case what we are actually doing is allowing the minister to set up an advisory council responsible only to himself, and to no one else, to determine the rights of individuals. Against that I protest.


Thomas Langton Church: I am afraid that the advisory committee which is being appointed under this celebrated excursion into state socialism will mean nothing but a lot of figureheads run by bureaucrat officials, with the power centred in the minister and the governor general in council. We know what happens in actual practice. Under the Insurance Act the superintendent of insurance has jurisdiction over all these various insurance companies-fire insurance companies, life insurance companies and all the rest of them. We know that every insurance company, every bank, every trust company, every loan company or every other company of this kind has an advisory committee. No insurance company should be enabled to qualify for a certificate by reason of the money it may make out of the administration of this particular measure.
The Home bank, which was allied with an insurance and trust company, had an advisory committee, and all the inspection of it was of no effect whatever. Before the bank failed I was told that every bank or insurance company had an advisory committee and drastic federal inspection, and I can tell you that it will be hard to get good men on the advisory committee to be appointed under this bill, and they will be nothing but a lot of figureheads. You have to see the set-up of the whole statute to see how an advisory committee fits into the general set-up and structure of the bill. Under the set-up the governor in council, that is the minister, has the power to make rules and regulations and is in drastic control. On page 11 of the bill you see regulations that will be read into the section regarding the appointment of the advisory
War Risk Insurance

committee to advise the minister in the administration. But who is going to select this committee to supervise him and the legislation? The minister himself will have all control. I have seen some of these advisory committees, they and their set-up and the functions given them let this parliament and the banks and the loan and insurance and trust companies in for considerable criticism the way they are all interlocked.
I have been in parliament for a long time. I have seen something of the way in which this committee and parliament go over these measures. They read very well technically and in theory; the language is legal, but in practice they do not work out and we are not secure. The advisory committees of some of these banks and insurance companies and all that kind of thing who will bid for this work and contract from the minister are interlocked; trusts and combines have been flourishing like a green bay tree here in Canada ever since I came to this parliament. Instead of leaving these advisory committees to go over the contracts with the insurance company and pick out the company that in the opinion of the advisory committee is the best company to give security to the government and the policyholders who pay premiums, we are going to leave it with the minister or the governor in council; it will be a political appointment to administer a political measure. That feature of inspection and regulation was criticized by Sir Robert Borden in connection with the decennial revision of the Bank Act. These committees of an advisory nature are set up under the Bank Act and various other statutes. Are you going to leave it to these advisory committees to lay down the terms and conditions of administration of the bill? The minister is here to-day and away to-morrow. We have had two ministers of finance in less than two years. His department with him as the fountainhead, will administer this measure. He has departmental officials to advise him, because he cannot do the work himself, and when it comes to the question, "What shall we refer to this advisory committee?" as far as administration goes you will find there will be very little to refer to them. All they will have to do will be to agree to what has been done over their heads. I am very doubtful about the solvency of this fund from the start and whether you will be able to get able men to act on such an advisory committee under such a political set-up, where their hands are tied behind their backs and they have no real active authority. We have set up insurance companies under private ownership, and now the government is, by this legislation, embarking upon the field of public

ownership. You have first a very wise act, the Unemployment Insurance Act, which no doubt will be a blessing in the years to come, but in this case the government should be very careful in this new excursion into state socialism. In letting this class of insurance in war time out to private companies to administer, we are on doubtful ground, and it will lead to a lot of litigation.


Mr. BOUCHER:: I think I should not let this occasion go by without adding my commendation of the viewpoint of the hon. member for Lake Centre concerning the fiat. I think this case is different from many cases where fiats are required as petitions of right against the crown. When you analyse the bill you realize that the insurance companies with their adjusters are handling a particular portion of the administration of this bill, determining to a very great extent the rights of individuals who claim to have suffered by virtue of war activities. Let us assume that in a certain municipality or locality the adjuster, looking into the facts and circumstances, does not give the assured the decision that he feels he should have. The assured has to apply through his counsel to the crown, really to the Minister of Justice, for permission to sue the crown. As the hon. member for Lake Centre has said, the government has been delegating to boards, arbitrators and commissions a great many functions that should be administered by members of the House of Commons, by the people through their own spokesmen. Here we have a survival of the old autocratic role of former kings, the old way long since superseded in almost every other department of law, whereby you cannot sue the king-"The king can do no wrong". We have this relic remaining in a measure under which the government is actually going into the contracting business.
The fiat or petition of right procedure, the order, "let justice be done" as against the crown, the Minister of Finance says should be or is being continued. If this parliament is afraid to break that tradition, we are not keeping in tune with present-day views concerning the welfare of the people of Canada. When the crown places the responsibility of administering the measure on an insurance company under its officers or trained men, whether they be adjusters, administrators or advisory committee, it is going a long way from the tradition or the position taken by parliament when the petition of right or fiat was instituted. It stretches beyond all possibility of comprehension of a parliament of that day. That being the case, and when the government is entering into contracts

War Risk Insurance
such as we are dealing with, in view of the delay and the extra expense caused to the insured through such matters being tried by the exchequer court-and I have no complaint against that-surely the time has come that the courts of the provinces, the ordinary civil courts, with the respect in which they are held, can adjudicate upon such problems. Even under war-time conditions this brings a very fit and proper opportunity for hon. members to give to the people of Canada the assurance that this house has confidence in our provincial courts, and the people should have the right to seek their remedy as against the crown and the insurance companies in the same court as they do against their neighbour. Therefore I should very much like to add my commendation and exhortation to that of the hon. member for Lake Centre in asking that this matter of the petition of right and fiat be reconsidered by the government. Let us break away from this procedure now, and let right be done through the ordinary courts of the land.


Thomas Vien: I have allowed the
discussion to proceed with regard to the propriety of retaining or abolishing the procedure by fiat, but I believe it is my duty to call to the attention of the committee the fact that we are dealing with section 27, now numbered section 28.


[Stage Direction]
Section agreed to.
On section 29-Reference to committee.
Mr. ROSS (St. Paul's):: I notice the word
"may" has been substituted for "shall" in subsection 2, which reads:
The minister may refer to the advisory committee any application to enter into a contract of insurance under which the maximum amount of indemnity which may be payable exceeds two hundred and fifty thousand dollars. . . .
I also see that the minister "may" refer to the advisory committee all matters relative to the rate of premiums to be charged. I think the word should be "shall". In the ordinary insurance company there would be a board of directors which would adjudicate on such matters as that. Here you have one supervisor of insurance, and I think it ought to be obligatory upon him or the minister to refer matters such as this to the advisory committee.


James Lorimer Ilsley: The banking and commerce committee changed "shall" to "may". I do not think I could agree to changing it back again. I had "shall" in the bill in the beginning, but the committee changed it.


[Stage Direction]
Section agreed to.
On section 30-Premium deductible.
James Lorimer Ilsley: This section was amended by the banking and commerce committee by deleting the words which appear in italics on the page opposite page 10 of the bill, and which read:
but such deduction shall only be allowed to the extent that the total taxes payable by the insured under the said act are thereby diminished by 40 per centum of the said premium.
I went before the committee and recommended that there be no such deletion, but without avail. I was prepared to accept the action of the banking and commerce committee without further protest, but in view of the provisions of the budget I do not think I can. I regard it as of the utmost importance that these words should be restored to the section, and I am going to have an amendment moved to that effect.


William Pate Mulock: I move accordingly.


James Lorimer Ilsley: I want hon. members of this committee to understand the position we shall be in if these words are not restored. In the budget provision there is an excess profits tax of 100 per cent, with 20 per cent returnable. These changes in the excess profits tax throw a very large proportion of the corporations doing business in Canada into such a class that any premium that might be paid for war risk insurance will be paid out of excess profits which are taxable 100 per cent. In other words, if this clause remains as it is in the bill, without the restoration of these words, the crown will be giving free coverage but for the 20 per cent returnable.


Richard Burpee Hanson: Oh, no.


James Lorimer Ilsley: Apparently we are going to have a debate on this. So far as I am concerned, I cannot possibly agree to having the clause remain as it is.


Richard Burpee Hanson: There is a rule of reason about it.


James Lorimer Ilsley: Do not let us do something that will be ridiculous. Let us forget the 20 per cent returnable feature for a moment and consider just the 100 per cent excess profits tax. Mr. Matson goes to a company and says, "we would like you to put on some war risk insurance". The company may see fit to put on $1,000,000 worth of war risk insurance. If the premium is, say 25 cents per $100, it would amount to $2,500. If the company did not pay that $2,500 to Mr. Matson as premium, they would pay the full $2,500 to Mr. Fraser Elliott as excess profits tax. If they paid it to Mr. Fraser Elliott as excess profits tax, the crown would not be
War Risk Insurance

liable to make good their SI,000,000; if they paid it to Mr. Matson, the crown would be liable. In other words, if you leave out the 20 per cent returnable feature, they are getting free coverage.


Richard Burpee Hanson: The same is true of ordinary fire insurance premiums.
Mr. ILSLEY; But the fire insurance premiums are not being paid to the crown. We cannot help that under the rules. I certainly am not going to be a party to giving free coverage, apart from the 20 per cent returnable provision, which does effect a slight modification. With this section as it is we are setting up a scheme whereby we would give free coverage to, I would say, nine-tenths of the corporations in Canada. That would be the situation under the new excess profits tax. Under the old tax it might have been only one-quarter or one-tenth, I do not know, but there were very few corporations of which it could be said that the premiums would be paid out of excess profits. Now it would apply to most of them. I want all corporations to be treated the same. It must be borne in mind that if I am right in my figure and there are nine-tenths of the companies in that category, there would be one-tenth not in that category. That one-tenth would pay Mr. Matson a premium and would reduce their tax liability by only 40 per cent of that premium because their rate is 40 per cent. I am submitting that the rate for all companies should be such that the tax saving because of paying a premium would be 40 per cent of the premium instead of having it 40 per cent for only a small class of companies and 100 per cent for nearly all classes. I think anything else would be utterly indefensible, and I do not see how we could defend it to the people. I am going to move that the words be restored.


Richard Burpee Hanson: I suppose the minister used all of this argument on the committee in which the government had a majority, and it did not carry conviction.
Mr. ILSLEY; That was before the budget.


Richard Burpee Hanson: The minister has given one side of the story, and he has made out a very strong argument. However, he goes a long way when he says that these people are going to get free coverage.


James Lorimer Ilsley: Apart from the 20 per cent returnable.


Richard Burpee Hanson: That is the saving grace.


James Lorimer Ilsley: It is not enough.


Richard Burpee Hanson: The minister admits that ordinary insurance costs would be deductible under any taxation law, and I think it would be shocking if they were not.


James Lorimer Ilsley: Oh, no.


Richard Burpee Hanson: Any reasonable operating cost for fire insurance purposes ought to be a deduction.


James Lorimer Ilsley: They do not allow war risk premiums in England.


Richard Burpee Hanson: I do not care what they do in England. We are talking about Canada. In England they need the money. We need the money here, and that is the basis of the minister's whole claim. It is simply the doctrine of ex necessitate. It is not a question of justice at all. If you will examine and analyse the doctrine put forward by the minister, you will find that it simply is a case of saying, "I raise the taxes of this country. I want this money." That is the basis of his whole scheme. I admit we need the money; and if it is just and equitable that we should have it by this, method, well, then, let us have it. But the same thing might be argued in respect of other expenses. Take the depreciation allowance on machinery. There is no reason why, if we need the money, we should not cut down the allowances made for depreciation. I remember that during the depression certain public utilities, like telephone companies, were operating under standard depreciation systems. A telephone company is subject to storms and other untoward circumstances which may cause a loss of thousand of dollars in two or three hours. The company has to sustain that loss, and therefore it is allowed a high rate of depreciation to cover these unforeseen circumstances. But on the doctrine of necessity we should cut down the allowance that is made. If the minister bases himself on the principle that we have to have this money, no matter where the chips fall, I have little more to say.
But let me ask the minister this. This government has established a cost-of-living bonus system for wages, and we are about to have a new application of that system. I have no objection to that because, willy-nilly, the cost of living is rising and will continue to rise in this country, let the government resort to whatever expedients it will, for example, subsidies that are going to cost this country perhaps $150 million or more. The minister allows this bonus for wages to be deducted 100 per cent for excess profit tax purposes. Therefore it might be argued with

War Risk Insurance
just as much force and effect that the treasury is bearing the cost of these bonuses. Let us have a fair application of the principle.
Here is an expense brought upon a property owner by no cause of his own. The country is at war; he undertakes to protect himself or his shareholders by war risk insurance, and that costs money. That, I say, on principle is just as much an expense as the salary of the janitor of the building and certainly just as much a deductible expense as the cost-of-living bonus which this government forces employers to pay. If this deduction is to be put back on the basis as originally drafted, then I suggest that the minister should deal with all in the same way.
What will happen? A man will have to pay this out of his capital. He cannot pay it out of his deductible operating expenses, and how long can that go on if the war lasts for any length of time, and if there is one deduction after another, and another after another, and another after another, payable out of capital? What is going to become, if that goes on, of these companies which give the necessary employment to the people of this country? If it is all going to go in taxation, let the hide go along with the carcase. It does not matter very much to me personally. I am simply speaking in support of a principle -which I think is sound, and evidently that is what the banking committee thought.


Mr. McNEVIN:: By a very slim majority.


Richard Burpee Hanson: It is no use to say that it was a slim majority. It is the democratic principle that the majority rules. The principle of the thing must have appealed to the members of the banking committee. Of course, if the minister is so inflexible that he is bound to have this thing, he can put it through by force, by the majority in this chamber who would no doubt vote this amendment back into the bill again. But in every other case the minister has adopted amendments suggested by the committee.
I do not know by how much the treasury will be affected; I have no idea of what it will run to in dollars and cents. But I do say that the minister in reaffirming the original proposal is violating a principle which has been in the income tax law as long as we have had it-absolutely-and if he is going to do it in this case, he will have to revise his whole outlook. I can think of other cases where he will have to take some steps to protect the treasury for a similar reason. Why should he single out the case of those who are obliged to take
out insurance by circumstances beyond their control, if they want to protect their property and cannot get protection anywhere else, and that will often be the case. Why should he penalize them? Why not make the same rule applicable to any kind of insurance? Employers' liability-I suppose we do not have that now since workmen's compensation acts have come into force in all the provinces -was an operating expense under the Income Tax Act. Ordinary fire insurance is the most apt illustration. If a company is entitled to deduct ordinary fire insurance, it is entitled to deduct war risk insurance.


James Lorimer Ilsley: I have the English act before me. Section 84 provides:
No sum shall be deducted in computing the amount of the profits or gains of any person for any purpose of the income tax acts or the profits of any person for the purposes of the national defence contribution or for the purposes of excess profits tax, and no sum shall be included in computing . . .
Et cetera, et cetera.
... in respect of-
(i) any payment made in pr towards the discharge of any liability imposed on him under Part 1 of this act-
And so forth. The note to the section reads as follows:
The contributions and premiums payable under this act are treated as capital payments and are accordingly not allowed as an expense for the purposes of income tax, national defence contribution or excess profits tax. This is in contrast to an ordinary fire insurance premium, for instance, which is allowable as an expense for such purposes.
It was represented to me by certain officials in the preparation of this bill that the English rule was the logical rule; that this damage not being of a normal or continuing type, such as fires, but being limited to the period of the war, the risk was of a highly exceptional nature and any payment made should be regarded as a payment made to secure the restoration of capital, and that therefore it should be treated as a capital payment, as was the case in England. On the other hand, other officials felt that it would be too much of a jolt, too much of a shock, to the business community of Canada, to ask them to regard payments for any kind of insurance as capital payments; that once they were told that that was the law they would shy off and we would lose in premiums more than we would gain in taxes, and that on grounds of expediency we should not adopt the English rule. There were others who thought that on grounds of principle we should not adopt the English rule.
After giving the matter some consideration, I felt that there was something to be said for
War Risk Insurance

both points of view, and I thought that a fair arrangement was the one which was suggested in the bill. We would make it deductible; we would allow it to be deducted from incomes for excess profits tax and income tax purposes, but only to such an extent that the tax saving would be 40 per cent. That would be the case with a number of companies-1 think the great majority-at the time the bill was drawn.
But now I have brought in a budget which makes it quite apparent that the great majority of the companies-I said nine-tenths; that is merely a guess, for I have not got my mind down to it-under our new Excess Profits Tax Act, as foreshadowed by the budget, will now be making these payments out of the money which is subject to the 100 per cent rate. In other words, they will simply be withdrawing the money from us and paying it to us and getting a coverage. That is not what we are doing for anybody else. That is not what we are doing for the little man, or for the man not in business. I must make that statement always subject to this, that that is not quite true, by virtue of the fact that 20 per cent will be returnable, but that is such a small factor in the situation. Still, if I use the term 80 per cent instead of 100 per cent tax, we would have a great discrimination between one set of companies which are getting a tax advantage of 80 cents in every dollar they pay us, in effect merely paying us one-fifth of the premium we charge, and the other companies which are getting an advantage of 40 cents in every dollar, in effect paying us three-fifths of the premium we charge them.
The hon. gentleman says it is merely a treasury matter, a matter of trying to grab the money or keep the money. It is not that at all; it is a case of fairness; and if hon. members would divest themselves of their traditional habits of thought about these things and look at the matter freshly, how could they go out and defend it? How could I go out and defend it? If we went to a big company we might insure some property for fifty million dollars instead of a million dollars. Then the premium would be fifty times $2,500 and they would pay us that much in premium and that much less in taxes. But the same result would not at all follow in the case of a company alongside of them. I could not defend it, and so I am asking my colleague to move that the deleted words be restored.


Richard Burpee Hanson: Well, I
am just not convinced. The situation in England is not exactly the same as it is in Canada. There is one vital difference in England, that there is no corporation tax 
there; they take 100 per cent above the standard profits, but they leave to the companies the standard profits. If you apply that system to the people of Canada, I think they would be agreeable to it. It would leave in their own hands, not in the hands of the government to be passed back at some future date, the capital necessary to rehabilitate their premises, their machinery, their plant and so forth and to provide the employment which will be so necessary in this country after the war.
The minister says it will be a payment out of capital. Yes, it will be a payment out of their capital, but an impairment of their capital. What is the depreciation he does allow? Depreciation is set up for the protection of the capital invested, so that it can be written down and protected. That is the underlying reason for allowing the write-off, because if there were no depreciation of the capital assets there would not be any justification for writing off one cent.
The minister has now stated in explicit terms that he is bound to have this put through. I hesitate to hold up the committee on a discussion of this question. I want to say that the thing is not so wholly one-sided as the minister is endeavouring to convince the membership to-night. I am rather shocked to think that he takes so extreme an attitude as he does; and I come back to this, that the only reason the minister is doing this is that he needs the money and is going to get it, and he does not care whom it hurts. If that is not conscription of wealth, I should like to know what is.


Mr. CASTLEDEN:: It is fairer than the other.


Richard Burpee Hanson: Well, it is not more fair than the other. I put my business judgment against the inexperience of the hon. member and the purely theoretical knowledge he has about business. If the minister is bound to do this, it is useless for me to talk; I am not going to dash my head against a stone wall. Might is right in this parliament, as we know. We have had some exhibitions of might against right.


Thomas Vien: Order, please. I do not believe that that remark is a proper one to make-


Richard Burpee Hanson: Well, the remark was not directed to anyone in particular.


Thomas Vien: -even to a committee of the house. Furthermore, it was directly addressed to the minister in charge of the bill. Shall the section carry?

War Risk Insurance


Richard Burpee Hanson: I should like to continue if I may. I am not going to be very long. I am trying to indicate that if the minister is inflexible it is not much good my wasting my eloquence on the desert air, and I do not intend to do so. I am not used to talking to a court that will not listen to me.
I have tried to do that in days gone by and have found how ineffectual it is. But I suggest to the minister that if this is going to be put into effect and he is going to make companies pay as he originally proposed, there will be a large class of risks in central Canada which will not seek coverage at all, and he will lose a tremendous amount of income. They will not take out this insurance unless they get proper allowances. They will probably seek ways and means of protecting themselves otherwise, and he will be left with all the bad risks. You know there are two sides; indeed there are many angles to this story1- many more than I can develop here this evening. If the minister is going to take this money out and make only the allowance that he suggests, he is going to be loaded up with a lot of bad, expensive risks, with this uniform rate across the country, because this is not compulsory.


Angus MacInnis: It could be made so.


Richard Burpee Hanson: Only those who have plants or property in exposed positions will seek this insurance. What is the hon. member babbling about? I am trying to give a reasoned argument here, and I do not like to hear this chatter that is going on and is intended only to throw a man off the thread of his argument. If the hon. member wants to speak, he can do so later.
Take the case of a company with a large number of branches. Many of these companies own subsidiaries situated in a local position, in different provinces. One will have a branch in British Columbia; another will have a branch in Nova Scotia. Most of the assets of these big corporations will be in central Canada. They will insure under their subsidiary in British Columbia and under their subsidiary in Nova Scotia, but they will not insure the main portion of their business, in central Canada. The minister will have all the bad risks and will carry all the load on a uniform rate, and he will lose the cream.


John James Kinley: How does the hon. member know they are bad risks?


Richard Burpee Hanson: How does the hon. member know they are not? That is tit for tat.


John James Kinley: Well, I don't.


Richard Burpee Hanson: The
clamour which went up in this chamber for protection of fishermen on the east and west coasts rather reveals, I think, that hon. members from these localities believe there is danger; that is all I can say. I do not know where the Japanese are going to strike or whether Hitler will send his submarines up the St. Lawrence again. I rather gather that the military people take the same view. Let us not talk nonsense about this matter. We know what the vulnerable points are on both east and west coasts. The same applies in connection with this war damage scheme. The fact is that the minister needs the money and that is the only legitimate excuse he has for changing this provision back to the original draft. I suggest he ought not to press it.


John James Kinley: The leader of the opposition proceeds on the assumption that the coast is the place where we shall have bad risks and that central Canada is safer. This came up in committee, and I made the suggestion there that the1 world is round and that the distance to central Canada over the top of the world is not very much greater than it is to the maritime provinces. We are poorer in the maritime provinces and have not large industries, and a bombing raid over the Niagara peninsula would do infinitely more harm than a raid in the maritimes. The idea that we shall get worse damage there and that we are the only insurance hazard is hardly justified. The other day in New York they discovered that the enemy had landed from submarines, and I believe it was the central part of Canada that was picked out as the section which they would attempt to destroy -the hydro in central Canada, and works in some other parts of the country.


Richard Burpee Hanson: Those were fifth columnists.


John James Kinley: This section was freely discussed in the committee. The ground was taken-I believe I took it first myself-that the amendment in committee was not in order because it would reduce the revenues of the crown. That question was discussed for some time, and the committee decided to consider it in order. A vote was taken. There was barely a quorum in the committee, and an amendment presented by one member carried. I think we must all admit that we are facing new conditions in business especially, and new conditions need new remedies. If the minister is going to protect his excess profits tax, I am sure he must do something to control in some way the expenses of business. He is starting on the war damage insurance bill. Some people argue that it should
War Risk Insurance

be taken out of capital because it is protection of capital under exceptional circumstances, and there is a great deal of reason in that.
The government is the biggest partner in nearly every business in the country. It is taking profits, and if I were the biggest partner in a business I would want to control some of the expenses and also share in some of them. When someone else is paying your expenses you are apt to be more extravagant than you would be if you paid it out of your own funds. I learned, in the municipal council, that the joint benefit fund was more freely spent by the towns and the county because all contributed to the fund. Speaking with some business experience, I think, if the minister is going to be practical and protect the revenues which we say he shall take from the people-and we have agreed to that-the time has come when he must protect the taxpayer and the revenues, and he must have , some control over extraordinary expenditures. If I have control of a company and the government pays the premiums, I might be inclined to be generous about this insurance,, more so than if I paid the premiums myself. The same is true of every expense you have, and expenses are being controlled one by one. If the country needs 100 per cent excess profits tax it should have it, and it is now taking it; but some incentive is being left to business on war profits by reason of the fact that they will get 20 per cent back after the war.
The minister in the bill says that industry should have a similar incentive to save in this connection, in that it will contribute towards the cost of this insurance. I think he is right, but he will have to go farther as time goes on, because excess profits are being made. It is natural that such profits should be made because the turnover is great and the demands for increased business in our wartime effort are such that profits naturally increase. If you can pay out the money in expenses the minister will not get it, but if he shares with you in regard to the amount to be paid, he is on safer ground, and this is legislation in keeping with the times. It is a control on the situation. It is brought forward because of the serious and abnormal conditions that prevail in the country, and for that reason I voted for the original clause in committee. I thought the provision was needed.


Angus MacInnis: The leader of the opposition suggested that I threw him off his argument because of an interjection I made which he called "babbling". The fact is that he did not have an argument. I have never 
heard such piffle as was used to-night to support the claim he made in comparing excess profits with the cost-of-living bonus.


Richard Burpee Hanson: I did not make any such comparison.


Angus MacInnis: It was mentioned that'the cost-of-living bonus would be paid, and because it would be paid-


Richard Burpee Hanson: Out of excess profits.


Angus MacInnis: -people should get free insurance. I was the one who led the fight against the deletion in the committee, and possibly that is the reason why it did not carry. May I point out that the minister did not fail to convince the committee. That should be made clear, because he appeared and gave a resume of the bill.


Mr. JACKMAN:: What did he say?


Angus MacInnis: As a matter of fact, my hon. friend did not discuss this matter when the minister was in.


Harry Rutherford Jackman: The minister asked the committee to express its judgment on this particular section, and at the same time he said that in his own mind, for the time being, he thought it was one particular way. But he did not have any foregone conclusion on it.


Angus MacInnis: The point I make is that the minister did not appear and press for this before the committee when the particular section was being discussed by the committee.
I asked that the vote be recorded. The banking and commerce committee is composed of fifty members. This vote was seven in favour and six against; it carried by one vote, while two members present at that meeting did not vote.


John Ritchie MacNicol: Did the hon. member say the vote was seven to six?


Angus MacInnis: Yes, seven to six.


John Ritchie MacNicol: Out of fifty members?


Angus MacInnis: Out of fifty members. There is no doubt in my mind that if the minister had been there and had put the case as forcibly as he put it to-night, this provision never would have been deleted. We must remember that to-day the business of the country is war and that the persons who are making excess profits are making those excess profits out of war. Because these persons are making excess profits out of the war, the people of Canada are entitled to those excess profits, not the persons who control industry. That is the whole point.


Harry Rutherford Jackman: This is capital, not profits.

War Risk Insurance


Angus MacInnis: In many instances the capital had to be provided or supplemented by the government itself. There were no excess profits in this country between 1930 and 1939. There was very little profit of any kind.


Richard Burpee Hanson: There were losses out of capital.


Angus MacInnis: Yes; but this business of looking at what is going to happen after the war is holding back necessary war production. This continual harping on what is going to happen to a particular industry after the war is over is a bad thing. It is time we got away from that point of view. What is important is not what is going to happen after the war, but what is going to happen if we lose the war.


Alan Webster Neill: I think the amendment proposed by the minister is sound, and I will vote for it. I will vote for it because I think it is necessary under the policy laid down in connection with collecting these income and excess profits taxes. But I should like to ask the minister a question. This section says the premium shall be deductible as an expense of carrying on the business if the property insured under such contract is used in connection with and required for the purpose of the trade, business or calling of the insured. Should that not be applicable to any insurance policy that applies to a man's home? I have before me the Australian procedure, which is rather different. There premiums paid under these schemes are allowable as deductions from assessable income for tax purposes. I suggest that is the way it should be done here. Why make a distinction between an insurance policy on a man's warehouse and an insurance policy on a man's home? I suggest that, as in Australia, the premium should be deductible from the assessable income.


James Lorimer Ilsley: Insurance on a man's home is not an expense of doing business, under any theory at all. Fire insurance premiums on a man's residence are not allowed as a deduction from his business income tax or from any other income tax.


Alan Webster Neill: Apparently they are in
Australia.


James Lorimer Ilsley: I do not know. I think there must be some explanation for that which is not apparent in the reading of those words.


Alan Webster Neill: This is taken from a government publication, the Commercial Intelligence Journal, and presumably the government knows what it is doing.


Harry Rutherford Jackman: If the minister is going to insist on his own way, certainly I do not want to delay the committee, because I think we
should get this bill through as quickly as possible. If he is adamant about the matter; if he does not wish to have hon. members vote according to the way they think or as they might be persuaded; if he is going to insist on the opinions to which he has already given expression, then certainly I am prepared to resume my seat. Some of us may feel just as strongly the other way in regard to the amendment which has been proposed, but if the minister is going to insist upon it, I see no reason why I should reiterate any of the arguments that have been advanced, or seek to advance new ones.


James Lorimer Ilsley: I do not think there is any argument that could change my view. I have given it a great deal of thought, and I feel that I would be almost ridiculous if I went around giving virtually free coverage, or paying four-fifths of the premium myself.


Harry Rutherford Jackman: Well, of course it is perfectly true that the government will be paying 100 per cent of the premiums in connection with companies that are in the excess profits tax bracket, but after you have squeezed 100 per cent of the blood from a stone you cannot squeeze any more. If you have a new cost in connection with your business, which is necessary to preserve your property, and for which you must pay premiums, obviously if there is nothing left, if all the money is taken away, the money for the additional cost must come from some other source, which means that it must come from taxation. That is why we are in this very peculiar situation, and I think the minister is looking at it in a rather wrong light. It is by reason of the war that we have this peculiar position of a company incurring additional expense, while the only source from which that expense can be met is from what otherwise would go for taxation. That is an effect of the war, and of the excess profits tax. So is this need for war risk insurance an effect of the war. Surely, therefore, the war should be allowed to bear some proportion of the cost resulting from the risk which is brought about by the war; yet the minister says that because some companies will be allowed to offset only 40 per cent of the premium against their taxation, while others, if they were allowed to put it in their expense accounts, would be allowed to offset 100 per cent, some inequality or injustice is thereby created. Well, there are still some companies in this country, and a great many private businesses, which have been blitzed by the war, by regulations, by the impossibility of importing goods and so on, which are not making any earnings. Yet
War Risk Insurance

they may have some plants, some warehouses or buildings of one kind or another, on which they would like to take out this war risk insurance, but if they do so they will have to pay the cost out of their own pockets. They are not in the same position as the companies in the normal tax bracket. There may not be many of them, but I venture to suggest that there are more than the minister has in mind. I can think of some of them offhand. So we cannot have perfect equality there; and if you take 100 per cent of the profits from a corporation in taxation, then you cannot expect that corporation to pay anything more out of its own earnings. Anything in addition must come out of capital.


Arthur Wentworth Roebuck: Why not out of its normal profits?


Harry Rutherford Jackman: Then let us speak of those normal profits. We in Canada see our whole business structure being undermined. No one is more willing than I that it should be undermined as far as necessary in order to provide money for the war; but if we are going to look to private enterprise to carry the burden after the war, and not have state socialism, then we must keep the corporate structure in a reasonable degree of health. So the situation still is that a corporation or a business must provide out of its annual earnings sufficient to keep itself intact. It must allow for the wearing out of its equipment, of the machine which produces some material; it must provide for ordinary fire insurance, wages, materials and everything else. In the same way we have an unusual expense occasioned by the war, and a corporation should be allowed to provide for that_ expense as a charge against its annual earnings. Now we come to the very peculiar situation to which I referred in the beginning, and which the minister makes so much of in his appeal for fairness to all companies. That is, the government of Canada is now taking 100 per cent of these excess earnings, and therefore the company has nothing to which to charge an additional premium to pay for war risk insurance. I feel that the minister, while ^ advocating certain principles of fairness, is proceeding on a very wrong assumption in the matter. I believe, if he would aPPly the same principles to what I should consider the true set of facts or circumstances in the case, he would come to the same conclusion as that to which I have come.
I do not want to go into the other arguments which have been raised by my leader, but I would put particular stress on the fact that inasmuch as there is uniform war risk insurance to be applied across the whole 
country-and with due respect to the hon. member for Queens-Lunenburg, while those of us who live in the central part of Canada do not fear bombing raids, we may fear sabotage as much as those in the coastal regions-it will be found that the government is insuring the bad risks, the ones likely to cause great loss, without having that general coverage which every insurance company needs to give a fair distribution of risk. If I were in the minister's shoes I think I would argue, as I am arguing; I would rather allow this extra cost for insurance premiums to go against the excess profits tax in order to have general coverage in the relatively safe parts of the country as well as in the relatively dangerous ones.


George Hugh Castleden: I am in favour of this amendment. It acts as a limit and a check on the powers being granted. I do not think there is any hon. member who is not somewhat alarmed at the wide variety and extent of the powers granted. In the first place we have the appointing of a supervisor of war damage insurance by order in council. All the clerks, employees and officers necessary for the proper administration are appointed by order in council. The advisory committee, consisting of not more than fifteen members, is appointed by the minister and is given extensive powers. The minister may refer to the advisory committee all matters relative to the rates of premium, the settlement of the amount of compensation or indemnity to be paid, the manner of payment and generally the operation of the whole scheme; and the committee may make recommendations as to the amount of insurance to be accepted and the terms and conditions upon which such contracts shall be entered into. We have by this amendment a limiting clause which makes possible only that:
. . . such deduction shall only be allowed to the extent that the total taxes payable by the insured under the said act are thereby diminished by 40 per centum of the said premium.
If the whole amount of premium is taken out of the excess profits, it might, as the minister pointed out, be returned; because 20 per cent of the excess profits tax is returnable. The element of fairness mentioned when the leader of the opposition was speaking appeals to me, because we are going to return 20 per cent of the excess profits tax and, as was pointed out, this might equal the total premium paid by some companies, which would mean nothing more or less than the government assuming the whole premium. This limits that. I acknowledge the long business experience of the leader of the opposition, but I would put my sense of fairness against

Vocational Training
his at any time if he is going to maintain that this it not a fairer way of dealing with the matter than the section would be without this amendment.


Arthur Wentworth Roebuck: The leader of the opposition referred to the solid support behind the minister, and made some reference to might being right and that sort of thing, so it might- be just as well for one who stands behind the minister at the moment to express an opinion. I was not on the committee that considered this bill. I knew nothing of this argument until I heard the various points of view put forward by the minister and the opposition. My judgment is that the minister is sound in the matter, and I intend to support him if it goes to a vote.
My reason is this: the opposition have been speaking as though the excess profits were the only profits of a company, and that therefore the premiums will be paid out of capital if not permitted to be paid out of excess profits. But that is not so; there is a standard period whereby normal profits are judged, and excess profits are profits above and beyond those normal profits. The theory is that the excess profits are made because of a condition of war, or made only during the period of war, and in excess of normal profits. These premiums for the protection of property against war risks will therefore in my judgment be paid out of the normal profits of a company.


Harry Rutherford Jackman: If the risk is occasioned by war, why should the premiums not be paid from war profits?


Arthur Wentworth Roebuck: If there were no normal profits, the premiums would of course come out of capital. Even though a company does not have a standard period by which normal profits may be judged, it is allowed by the department to have normal profits before excess profits are charged. Therefore these premiums will be paid out of the normal profits of the company, and it is not a very great hardship to ask a company to protect itself against an unusual danger out of the usual profits.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 31 agreed to.
Section 32 agreed to.
Section 33 agreed to.
On section 34-Regulations by governor in council.
Douglas Gooderham Ross: I think the banking and commerce committee made a recommendation that the regulations should be tabled. I think it was to be included in the bill, that these regulations were to be tabled.


[Stage Direction]
Section agreed to.
Section 35 agreed to.
On section 36-Coming into force.
Alan Webster Neill: What is the idea of not having it come into force as soon as it is passed? People in many parts of the country are very anxious to see this passed. Why the delay, which may run to any unknown extent?


James Lorimer Ilsley: It was not considered desirable to bring it into force until the machinery is ready to function. I do not know whether it will be within a few days or not-


Alan Webster Neill: Is it the minister's intention to bring it into force as soon as possible?


James Lorimer Ilsley: Yes.


Howard Charles Green: Would it not be wise to strike out that section and have the bill come into force as soon as passed?


James Lorimer Ilsley: It is all right to strike it out.


William Pate Mulock: I move that section 36 be struck out.


[Stage Direction]
Motion agreed to.
Bill reported.


[Stage Direction]
Hon. HUMPHREY MITCHELL (Minister of Labour) moved that the house go into committee on Bill No. 64, to assist in the carrying on and coordination of vocational training.
Motion agreed to, and the house went into committee, Mr. Vien in the chair.
On section 1-Short title.
John Ritchie MacNicol: Where is the preamble?


Humphrey Mitchell: The preamble was eliminated on the advice of the law officers of the crown who thought it was unnecessary.


Thomas Vien: We can discuss the
preamble only at the end.


John Ritchie MacNicol: We cannot very well
discuss it when it is not in the bill.


Thomas Vien: You may speak to the preamble before the title carries.
Vocational Training


Joseph William Noseworthy: First of all I want to congratulate the Minister of Labour (Mr. Mitchell) upon introducing this most comprehensive piece of legislation. I should like to call the attention of the committee to the fact that education is a matter of supreme importance to the nation, but it is a subject which has occupied very little time in this house, either during this session or at other sessions. Because of that fact I crave the indulgence of the minister and the committee while I set forth a few facts pertaining to the bill.
The bill provides for financial support for education in the vocational field, and I would solicit the support of every hon. member for the bill. In case anyone is a little dubious because of the fact that education is a provincial matter, I would point out that this is not an innovation. We had the Agricultural Instruction Act of 1913 which provided for $10,000,000 from the federal treasury to aid agricultural education. We had the Technical Education Act of 1919 which provided for $10,000,000. Then we had the Vocational Education Act of 1931 which provided for $750,000, but which was never put into effect. We have had the youth training programme, the war emergency programme and other means by which the federal government in the past has supported education within the provinces. This bill simply extends the financial service of the federal government to education within the provincial field in line with the immediate and future needs of this nation. The object of the bill will be evident to every hon. member as it is discussed or comes up for review section by section. I shall not take the time to review the various objects of the bill, but I would point out that it does not provide for any interference on the part of the federal government with the right of the provinces in the matter of education. The bill provides at every step for cooperation and agreement between the federal government and the provincial departments of education.
However, the bill does recognize in a more general way than has heretofore been the situation the responsibility of the federal government toward education and the national importance of education. In my judgment that is a matter which should receive more consideration in this house than it has in the past.
I think every member of this house will agree with me when I say that equal educational opportunity is the democratic birthright of every Canadian child, and by "equal" I do not in any sense mean "uniform." I believe that the educational opportunities afforded the young Canadian boy or girl in any province of

this country should be limited only by the ability^ of that boy or girl to profit by the educational opportunities and by the ability of the province and the nation to provide those educational opportunities.
Education is a national responsibility because of its importance as a factor in Canadian unity. Within the past few weeks we have heard a great deal in this house about the lack of unity in this country, and we have had occasion to deplore that in spite of the fact that the two races have been living together for three hundred years, this country has not yet become a unified nation. On a former occasion I deplored the fact that the lack of unity within this country could be charged to a large extent to our systems of education. We must educate our boys and girls as citizens of Canada and not as citizens of the maritimes or of Quebec or of Ontario or of our western provinces. Nor must we educate them as citizens of any particular city or province.
We should draw from the races that make up the population of this country, not only from the French and English but from the other races, the best that they have in culture and in democratic principles. Democracy is not a monopoly of the English-speaking races. There is much that we can learn as democratic citizens from the French and other races represented in this country.
Education has become a national responsibility because of the movement to-day of population from province to province, from the rural districts to the urban districts.
It has been estimated that one out of every three persons in Canada to-day is living in a province other than that in which he was born. It therefore becomes a matter of extreme importance to each province within the dominion that every boy and every girl in every other province should receive a minimum standard of education. Every child in every province is a potential citizen, a potential asset or a potential liability to every other province. Education is a national responsibility because of the complexity of modern life, and because of that complexity it becomes important that every child in every province should receive a reasonable minimum standard of education.
Canada to-day is called upon to compete in the markets of the world. We are called upon to compete in the councils of the world. The boys and girls who were born in one province are called upon to compete in the labour markets of this country with boys and girls born and brought up in other

provinces. All this would indicate that the education of any child in any province is of importance to every other province.
Canadian boys and girls, regardless of race, should be given the best possible education which the country can afford to give them and which they are capable of profiting by.
I should like to call the attention of the committee for a few moments to a few of the shortcomings of our present educational system, particularly in the matter of administration and finance. The administration and financing of education as it exists in Canada to-day is not very far different from the system which was set up in the pioneer days of this country, in the days when the one and only mode of transportation was the ox-cart. To-day we are attempting to administer a stream-lined system of education by the old administrative and financial methods adopted in the ox-cart days. We still leave our schools to be administered by a board elected from a very small school area, the same type of school area which was set up in the pioneer days of this country. That system still prevails to a large extent all across this dominion, with the single exception of the one province of Alberta and parts of British Columbia. We still leave those small municipalities and those small school sections to bear as much as 80 and 90 per cent of the cost of education within the schools of that area. As a result, we find that in the cities and in the prosperous rural communities we get good modern schools, with teachers reasonably well paid. But when we get into the poorer communities adjoining the wealthier ones and into the poorer rural areas, we find a deplorable situation.


Thomas Vien: Order. I have allowed the hon. gentleman to proceed because I thought he was making some preliminary remarks, but he is now going into a general consideration of the administration of our school system in the various provinces of Canada, which is certainly not the purport of this bill. The purport of the bill is the carrying on and the coordination of vocational training. Although some latitude is given on the clause that carries the short title, one must bear in mind that the principle of the bill must be discussed on the second reading. In the committee discussion of general considerations respecting the principle underlying the legislation is not allowed. The hon. gentleman is now going far afield and outside the scope of the bill, which is limited strictly to vocational training. I would, therefore, call the hon. gentleman's attention to the particular matter before the committee.
', 1942	4093
Vocational Training


Joseph William Noseworthy: There is one particular matter I wish to discuss, Mr. Chairman, which comes I believe within the scope of the short title clause. This bill is to provide federal support for education in the vocational field. That is the one field of our Canadian education which has suffered most in the past by reason of the old system of administration and financing of education to which I have referred. A report prepared for the Rowell-Sirois commission by the Canadian Teachers' Federation showed that at that time in Nova Scotia only seventy-five rural boys out of 5,923 in grades 7 to 9 received any vocational training such els is being provided for under this bill, while out of 5,851 urban boys in the same grades 2,174 were receiving vocational education. I point that out to show how up to the present our rural population has been getting no vocational education, and I shall make application of that fact when one particular clause of the bill comes up for discussion.


Thomas Vien: I must point out to
the hon. gentleman that general remarks on the legislation itself should be brief, and the complete review of the whole subject matter which, as I understand it, the hon. gentleman is now making should have been made on the second reading of the bill. It is permissible to make certain general remarks on the short title, by a usage which has become general, but I do not believe that we can resume the debate on the general principles as widely as is done on the second reading of a bill.


Joseph William Noseworthy: I shall abide by your ruling, Mr. Chairman, and bring forward any such other statements as I want to make when certain clauses of the bill are under consideration.


Thomas Vien: The hon. member may make such remarks as may be relevant to the clause under discussion. The hon. member will have a further opportunity on third reading.


Gordon Knapman Fraser: I am going to say only a word or two; I am not going to make a speech. I spoke about vocational training away back in 1940, and I was pleased to see that this bill was coming up. I was on the committee which considered this bill, and I feel that it was thoroughly gone through in committee. We had many meetings; we sat for weeks on this bill.
One thing about vocational training which struck me when I went through different schools was that it was not confined to young boys; in some instances grey-haired and baldheaded men were taking this training. They were anxious to learn in order to get jobs, and they were obtaining jobs in various plants.
Vocational Training

They were willing to take the classes even if they had to attend at two, three, four or five o'clock in the morning. I believe that the Minister of Labour will tell the committee later that in some places there was a series of classes sitting the whole twenty-four hours. In one school an Italian fruit-dealer, anxious to do something for Canada, his adopted home, [DOT] but unable to get into the army, was taking vocational training with a view to doing his bit in a munition plant. Inside seven or eight weeks he was able to take a position in the plant. He underwent an additional course, and to-day he is a machinist, doing a wonderful job on 3'7-inch guns.
In these schools vocational training is given to girls and young women, including married women. It is not a case of training them so much as to get them accustomed to working in a shop, so that when they go into a plant they will not be nervous. These women have turned out to be wonderful workers, in many instances better than the men. I was surprised to see in one plant girls working on vertical turret lathes, something which the plant manager never thought girls could do. and doing a wonderful job. I saw one girl at a vertical turret lathe teaching two men how to run it. The girls are coming along all the time. A great number of them are married, and many have come from the farms. That may be why the farmers to-day need all the help we can give them. Indeed, not only the women but many of the farmers have left the land because it was not providing them with a living.


John Ritchie MacNicol: Is this bill as now drafted to apply to the same classes to whom the original bill applied and to whom the preamble referred, namely returned soldiers, and those who worked in munition plants, and does it cover these classes only?


Humphrey Mitchell: Yes, it covers all those, and also those in the armed forces, those returning from the war.


John Ritchie MacNicol: Where in this bill does it say "armed forces"?


Humphrey Mitchell: The hon. member will come to it when he gets to section 3.


John Ritchie MacNicol: I asked whether the bill refers only to returned soldiers and those who have been working in munition plants.


Humphrey Mitchell: No, it is very much wider than that. Under section 4 it covers youth training and a wide diversification of training which is carried on under the Youth Training Act for women, in the various provinces of western Canada, in agricultural pursuits, in home economics and many other branches of training comprised in the act.


John Ritchie MacNicol: Is the scope not limited in section 3 by reference to the Unemployment Insurance Act, 1940, section 28, which limits training to those who have paid into unemployment insurance during the previous two years for 180 days?


Humphrey Mitchell: My hon. friend will find that when we come to that section. It consists of paragraphs (a), (b), (c), and (d); and only (c) refers to those who receive training pursuant to section 28 of the Unemployment Insurance Act:
(c) to fit for any gainful employment persons directed by the Lnemployment Insurance Commission to attend a course of training pursuant to section 28 of the Unemployment Insurance Act, 1940;
And:
(a) to fit persons for employment for any purpose contributing to the efficient prosecution of the war. . . .
That is pretty wide territory. There is plant training, training in technical schools, training for men who are eventually going into the army, navy or air force; but section 3 covers undertakings carried on directly by the federal government; and when you come to section 4, that covers training carried on jointly between the provinces and the dominion, as was carried on under the old Youth Training Act which expired on March 31.


Thomas Vien: May I point out that this will come under sections 3 and 4? Section 1 is only the title; section 2 contains the definitions, and if we carry them we shall come to section 3 immediately. Shall section 1 carry?


John Ritchie MacNicol: All right, but our trouble comes from there having been no discussion when the bill entered its second reading. We let it go into committee on the expectation that we would be able, on the short title, to say what we liked. If we are not to be allowed to do that, no bills will get second reading without discussion on second reading.


Thomas Vien: It is not a question of curtailing the discussion but of bringing it under the proper clause; otherwise it is repetition. The questions which the hon. gentleman has just put are applicable to the scope of the bill which is covered in sections 3 and 4, where such questions will be in order.


John Ritchie MacNicol: What I had in mind was that the hon. member for York South was shut off. Ordinarily he could have made all his speech in a much more extended manner had he done so on second reading; but like all the rest of us, when it was desired to get the bill into committee, he refrained from saying anything on second reading, and therefore he missed the opportunity of saying what he

Vocational Training
wanted to put before the committee. I assume that, having been an ex-teacher, he knows something about vocational training. He has taught in high school. But he has been shut off, and the committee has been denied whatever experience he had as a teacher in connection with vocational training.
I, too, was going to say something; I have had a very long experience in technical training. But at this hour of the night I would not say it. I am prepared to let the bill go through and refrain from trying to add anything to the discussion of it.


Humphrey Mitchell: I am in the hands of the Chair. I have no objection; in fact I welcome the experience of my hon. friends.


George Hugh Castleden: I also regret that further discussion is not permitted on the short title, because it was understood, when Mr-Speaker was in the Chair when the bill was before the house for second reading, that full latitude would be allowed at this time.


Thomas Vien: Order. Was there an undertaking given on second reading?


John Ritchie MacNicol: No, there was no undertaking.


George Hugh Castleden: The short title section states[DOT]
This act may be cited as the Vocational Training Coordination Act, 1942.
I think this is one of the most progressive steps that has been taken for a long time. Those who have studied the educational systems of other countries realize that education is a matter of national concern, and I believe that in drawing up the statutes which originally organized this country in its constitution, had the fathers of confederation made provision for equality of opportunity by such means as federal grants, much of the disunity which prevails to-day would have been avoided. This bill recognizes the principle of responsibility on the part of the federal government in making possible grants to provincial governments for educational purposes, but it does not interfere in those matters of controversy which usually prevent advances in education. When the nations guard so jealously the various rights they have, this bill leaves full administrative powers in the hands of the provinces. The matter of curricula is left in their hands, and this measure provides them with that much needed resource, namely, financial assistance. Any study of economic conditions in Canada shows us that various parts of the dominion are seriously handicapped by reason of the failure of crop conditions, or for some other reason, which hinders the provision of educational facilities. Those of us
who have been in drought areas of- the west have seen educational facilities ruined and educational systems badly broken down.
Another great thing which this bill recognizes is the fact that the greatest natural resource of a country consists in the brains, the ability and the skill of its youth and manhood. In so far as this bill recognizes that, we are taking a great step forward. There can never be democracy without knowledge, and there can never be true citizenship without knowledge. Where you have no knowledge you have fear. When we learn that the largest province of the dominion had no compulsory education up to a few years ago we cannot be at all surprised at the fact that we lack unity. In so far as this bill is taking, as it does, a broad view of educational opportunity, and the fact that responsibility rests with those in charge of the nation's affairs to recognize the national importance of education, it deserves the support of all.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Minister may undertake projects.
Douglas Gooderham Ross: This is to provide among other things for fitting persons for employment for any purpose contributing to the efficient prosecution of the war, whether in industry or in the armed forces. Some four or five years ago the Toronto school board requested that some aid be given them in connection with work they were doing _ in vocational training at the central technical school, more especially in connection with the training of aeroplane mechanics and artisans, but every time they came here they were turned down cold with one excuse after another. Last year when they came here they had a promise from the then Minister of Labour that something might be done so that they might be able to carry on this work in the schools. It was represented then that there was a difficulty inasmuch as it was not desirable to establish a precedent with regard to the erection of a building. On the other hand, it was suggested that the apparatus might easily be supplied. This has been delayed so long that we find this year when we come here that the priorities board have prevented the board of education from putting up their building. I wish to protest. I think the board of education of Toronto and those men who are doing that work in that technical school deserve the greatest consideration. The citizens of Toronto have spent their money on these vocational projects and have never had any help. I suggest that they would have
Vocational Training

gone much farther ahead and we would have had more men trained if we had had the slightest help from the dominion government. I protest against the delay there has been in this matter. The board of education of Toronto has been given the run-around by the dominion government.


Humphrey Mitchell: I have no objection to my hon. friend's protesting in the most vigorous words. I have some recollection of the subject matter of which he has spoken. If I remember rightly, the request was first made in 1936-


John Ritchie MacNicol: About 1931 or 1932.


Humphrey Mitchell: I suggest that my hon. friend look up the brief. However, it may have been before that. Be that as it may, since the expiration of the grant under the Technical Education Act, it has always been the policy of the federal government not to contribute to the erection of permanent buildings for educational purposes. That responsibility has always rested on the municipalities. When the war broke out, the board of education of Toronto came to the federal government and argued about some expenditure which was felt to be necessary because of war conditions. Of course the federal government took the same position as it did in 1936, or in 1932, as my hon. friend says. I want it clearly understood that I am offering no criticism whatever of the magnificent contribution made by the Toronto board of education toward the general application of the war emergency training programme and also of the programme prior to that. We felt that, notwithstanding there was a war, we could not break with the principle that the federal government would not contribute to the building of permanent school buildings in any city in this dominion. The matter was thoroughly explored both by the provincial authorities and by the federal authorities, and the conclusion was reached that there was ample room for any extension of the training facilities necessary in Toronto without putting up this permanent building, which would have required. I am given to understand, about eighteen months. That is the story as T understand it.


Douglas Gooderham Ross: That is the story;
I will be frank with the minister. He has been fair about it, and I do not think it came under his supervision. But the point is-and other hon. gentlemen will bear me out-that they were told they would be given a grant of money to help out in getting the machinery and the necessary appliances, and that is the least that could have been done. They have done a marvellous job, and they are doing 
it for the whole of Canada. It is the only place where the same thing is being done for the whole of Canada, and they should have had more consideration than they have received.


Thomas Vien: I have allowed this
discussion, but hon. members will realize that under this bill we could not discuss subsidies sought to be obtained or granted for every technical school in Canada.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, July 10, 1942