[Stage Direction]
Mr. ROBERT FAIR (Battle River) moved for leave to introduce Bill No. 65, to amend the Dominion Elections Act, 1938.
Some hon. MEMBERS:: Explain.


Mr. FAIR:: This amendment is designed to remove the disqualification imposed on inmates of institutions for the poor where such persons are disqualified from voting at a provincial election. The removal of this disqualification will enable all such worthy persons to vote and also remove the existing anomaly of such persons being qualified to vote in some provinces and disqualified in other provinces.
Motion agreed to and bill read the first time.



PRIVATE BILLS


[Stage Direction]
Bill No. 61, for the relief of Kathleen Ena Ball Royer.-Mr. Abbott.
Bill No. 62, for the relief of Margaret Hed-drick Lieth Gauld-Mr. Claxton.
Bill No. 63, for the relief of Elizabeth Alexandra Ida Robb Lewis.-Mr. Emmerson.
Bill No. 64, for the relief of Joseph Aloysius Lavigueur.-Mr. Casselman (Grenville-Dun-das).
Questions

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

Mr. BLACK (Cumberland):: 1.	What are the prices charged for meals at the restaurant built by Wartime Housing Limited in New Glasgow, Nova Scotia?
2.	How many meals were served to lodgers in the staff houses in February, 1943, and at what prices?
3.	How many meals were served to other persons in February, 1943, and at what prices?
4.	Does this restaurant pay taxes or licence fees to the town of New Glasgow? If so, how much per year?
5.	Is this restaurant subsidized by the government or by war industries? If so, how much per year?
6.	What is the deficit for January and February, 1943, and the estimated deficit for 1943, and by whom is it payable?


Mr. HOWE:: 1.	Occupants of staff houses are charged $8.50 per week for room and board. Single meals are charged at 40 cents per meal and 30 cents per meal to staff employees.
2.	Occupants of staff houses were served 1,749 meals in February, 1943.
3.	(a) 494 meals were served to other than occupants of the staff houses in February, 1943. These included meals to employees in the cafeteria, workmen engaged in completing the installation, and guests of the occupants of the staff houses; (b) See answer to 1.
4.	An agreement is now being negotiated with the town of New Glasgow covering service charges to be paid to the municipality for services rendered to Wartime Housing Limited.
5.	No.
6.	$555.83 was the restaurant deficit for January and February, 1943. We do not anticipate a deficit for the year 1943.


CANADIAN ARMY-OFFICERS AND MEN ON HEADQUARTERS STAFFS
Mr. TUSTIN:: 1.	Is there any age limit beyond which officers are not sent overseas with or to join our army overseas?
2.	If so, what is the limit?
3.	Are officers or men medically fit under 30 years of age employed on the headquarters staff, (a) in Ottawa, (b) overseas?
4.	If so, how many?


Mr. RALSTON:: 1.	Yes.
2.	(a) Reinforcement officers, Canadian armoured corps, Royal Canadian artillery and

infantry must be:-major under 43 years of age; captain under 38 years of age; lieut. under 33 years of age.
Reinforcement officers, other arms and services, must be; major under 43 years of age; captain under 40 years of age; lieut. under 36 years of age.
(b) Officers and other ranks, other than reinforcements, are subject to review before proceeding overseas and only in special circumstances are they dispatched if they have passed the review age for their rank in their respective arm or sendee as follows: Canadian armoured corps, Royal Canadian artillery and infantry:-Lieut.-colonel 48 years; major 43 years; captain 38 years; lieut. 33 years.
Other arms and services:-Lieut.-colonel 48 years; major 43 years; captain 40 years; lieut. 36 years.
3.	(a) Yes. (b) Yes.
4.	(a) Ottawa, officers 114, other ranks 501-
as at 27 Mar. 43; (b) overseas, officers 39, other ranks 125-as at 30 Mar. 43. Note:	The
figures for overseas headquarters do not include the officers and other ranks employed at army, corps and other headquarters in the field.
Most of the younger officers and men serving at headquarters are junior staff officers, technicians, and specialists appointed for a temporary tour of duty. In this way, these officers and men acquire experience in staff duties and methods before being posted to field formations and units.


INDUSTRIAL ALCOHOL
Mr. BENCE:: 1.	Approximately what amount of industrial alcohol will be used in Canada in 1943?
2.	Will any industrial alcohol be imported into Canada in 1943?
3.	Will any industrial alcohol be exported from Canada in 1943?
4.	Was any of the industrial alcohol produced in Canada in 1942 purchased by the federal government or any of its agencies?
5.	If so, how much was so purchased and what price per gallon was paid therefor?


Mr. HOWE:: 1.	Approximately 7,500,000 gallons.
2.	No.
3.	Yes.
4.	Yes.
5.	Approximately 2,000,000 gallons. The bulk of this alcohol was made from molasses imported by the government in 1941 for government projects. This was turned over to distillers for conversion into alcohol at a cost of 22 cents per gallon of alcohol, which price represented actual cost and a small profit for

Questions
conversion only. The molasses was secured through the sugar board of the United Kingdom to produce alcohol for use in plants working on United Kingdom orders.


LABOUR REPRESENTATION ON WAR BOARDS
Mr. BENCE:: 1.	What boards have been set up by the government since the beginning of the war?
2.	'On which of these boards is there a representative of labour?
3.	Who are such representatives, what boards are they on and what are their labour affiliations?


Mr. BENCE:: In view of the fact that most of the information requested in this question is contained in a return handed down the other day, I would ask that the question be dropped.
Question dropped.


NO. 1 RATION BOOKS
Mr. DIEFENBAKER:: 1.	How many No. 1 ration books were issued?
2.	What was the cost?
3.	How many of these books were distributed prior to the issue of ration book No. 2?
4.	Were any of these books undistributed or left over when ration book No. 2 was issued?
5.	If so, how many, and what was done with them?


Mr. ILSLEY:: 
CANADIAN FORCES-AGREEMENT WITH THE UNITED STATES RESPECTING NATIONALITY OF RECRUITS
Mr. POULIOT:: 1.	Ib there an understanding, an arrangement or an agreement of any kind between the_ government' of the United States and the dominion government regarding the nationality of trainees
or recruits, or conscripts, under twenty-one years of age, who were born in United States of British parents, or who were born in Canada of American parents?
2.	If so, what is it?
3.	In both above mentioned cases, at what age do the parties concerned have a right of option for their citizenship and in virtue of what authority?


Mr. MACKENZIE KING:: 1.	No.
2.	Answered by No. 1.
3.	(a) Under section 17 of the Naturalization Act such option may occur at the age of 21.	(b) It is understood that somewhat
similar provisions exist under the United States Nationality Act of 1940 with respect to persons in a corresponding position under United States law. However, the age after which a person can divest himself of United States citizenship in such cases is 18.


WARTIME HOUSING LIMITED-STORAGE OF MATERIALS IN TORONTO
Mr. NICHOLSON:: 1.	Are supplies of plumbing, heating, electrical and other building materials, being stored by Wartime Housing Limited at 111 Stevenson avenue, Toronto?
2.	If so, what is the total value of supplies on hand?


Mr. HOWE:: 
GASOLINE RATIONING
[Stage Direction]
WHO ASSIST FARMERS	[DOT]
Mrs. NIELSEN:: What action is the government taking towards allowing special gas rations for organized groups of industrial workers who are pledging to give their evenings and weekends to assisting farmers in the surrounding country for spring planting?


Mr. HOWE:: No action has been.taken but the matter is being studied.


UNITED NATIONS' MUTUAL AID-ADMINISTRATION STAFF
Mr. GILLIS:: 1.	Is Karl C. Fraser, formerly of Nova Scotia, employed by the administration of Canada's billion dollar mutual aid (Canadian lend-lease) programme?
2.	If so, in what capacity ?
3.	What are his qualifications for this post?
i.	What salary and other remuneration does
he receive?	. ,
5.	What are the chief duties of the officials placed in charge of this programme? ^
6.	What authority is given to them in drafting recommendations with regard to applications for lend-lease from our allies?	..


Clarence Decatur Howe: Answered by the minister, page 1830, Hansard, column 1, April 5, 1943.

Questions as Orders for Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS

[Stage Direction]
H. M.C. S. "CHIPPAWa"
['I made a ruling very recently with regard to questions on the orders of the day. I thought I made it plain then that questions involving matters which were not of immediate urgency, or not so immediate that they could not be placed upon the order paper, should not be asked on the orders of the day. I tried to explain this very carefully, and without any desire to limit such questions as are of immediate urgency. But I find that questions are asked and, as soon as they are answered, supplementary questions are then put. Hon. members realize, I am sure, the position of the chair with regard to questions of this kind. When questions involving matters which do not require an immediate reply are placed on the order paper, with the notice required, an opportunity is given to obtain the necessary information. I think this is clear to hon. members, and I hope they will observe the ruling I gave.']
Mr. TUSTIN:: What are the full particulars of the contracts let in connection with the total of $34,723 for alterations to existing buildings in connection with H.M.C.S. Chippawa, Winnipeg, Manitoba, set forth in sessional paper No. 221, 1943?


Mr. MACDONALD (Kingston City):: Return tabled.


Mr. KNOWLES:: May I ask the minister to explain why the answer to the question has been made an order for return instead of being put on Hansardi


Angus Lewis Macdonald: The reason for making the answer in the form of a return is that it would be quite lengthy. It involves a great deal of detail, and some of the items mentioned concern very small amounts. In such cases it is the common practice to have the answer tabled in the form of an order for return.



Mr. HANSELL:: 1.	What are the various categories in which men called for military service are placed?
2.	Do these same categories apply to those who enlist voluntarily?
3.	Which of these categories are inducted into the services and which are permitted to return home?


Mr. RALSTON:: Return tabled.


CHIEF ARMY RECRUITING OFFICER
Mr. FRASER (Peterborough West):: 1.	Who is the chief army recruiting officer in Ottawa?
2.	Does his authority extend beyond the city? If so, to what districts?
3.	What is his military rank and what are the pay and allowances for this rank?


James Layton Ralston: Return tabled.


RECIPROCAL TRADE RELATIONS-EXPORTS
Mr. DORION:: 1.	During the twelve months preceding September 1, 1939, with what countries did Canada maintain reciprocal trade relations, and what was the total exports from the dominion to each of these countries during the above period?
2.	During the twelve months preceding March 1, 1943, what were the countries with which Canada maintained reciprocal trade relations and what was the value of exports from Canada to each country during the above period?
[Mr. Howe.l


CANADIAN ARMY-FURLOUGH AND EMBARKATION LEAVE
Mr. CASTLEDEN:: 1.	Are men who have enlisted in the army being granted a furlough after six months?
2.	Is any travelling time allowed on such leaves?
3.	What restrictions are placed against men being granted embarkation leave or six months service furlough?
4.	Are the regulations and restrictions governing embarkation leave and six months service furloughs uniform in each of the three branches of the armed services?


James Layton Ralston: This question refers to
all three services and should be made an order for return.


CANADIAN FORCES-ALLOWANCES
Mr. LAFLAMME:: 1.	Has an order been issued or a regulation passed permitting a member of the armed forces to secure an allowance for a woman he is supporting in addition to his wife?
2.	If so, what is the text of the order or rule, and when was it first put in force?


James Layton Ralston: Return tabled.


R.C.A.F. ELEMENTARY FLYING TRAINING SCHOOLS
Mr. DIEFENBAKER:: 1.	How many elementary flying training schools are in operation in Canada?
2.	Where are they located?
3.	Are any of the said schools owned or operated by the government or the Royal Canadian Air Force?
4.	What is the capitalization of each of said companies ?
5.	When did each of the said schools commence operation?
6.	Who is the manager, assistant manager, and secretary-treasurer, and/or treasurer, in each of the said schools, and what salary does each receive?
7.	How much did each of the said companies receive as the management fee, and what expenditures of said fee have been made for each lunar month since commencement of operations to date?
8.	How much did each of said companies receive for every 24-week period since commencement of operations for operation and maintenance, and what was the disbursement for each said period under this head?
9.	What percentage of the proceeds on hand of "operation and maintenance" does the operating company receive at the termination of contract ?
10.	What were the profits before payment of taxes made by each of the said companies in each 24-week period since commencement of operations, (a) when consideration is given to

Motions jor Papers
the company's share of the savings under operation and maintenance; (b) when no consideration is given?	_
11.	What profit per flying hour is provided in the agreement between the government and each of the said companies, (a) now; (b) at the commencement of operations; and what reductions have been made thereof, and when?
12.	(a) Which of said companies are turning back all profits made to the government; (b) which of said companies pay a dividend to the shareholders; (c) to whom are the profits made by each of the other companies payable at the termination of the contract or the conclusion of the war?


CANADIAN FORCES-RAILWAY RATES-MEALS WHILE TRAVELLING
[Stage Direction]
Mr. CHURCH;
1.	Does the curtailment of special weekend tickets on railways apply to soldiers on leave?
2.	What are the present fare rates on Canadian railways for soldiers of all classes on leave?
3.	What reduction for meals has been made to soldiers travelling on railways within Canada or at railway lunch counters?

Mr. CHURCH:: What are the number of officers and men in the active service forces of the army, navy and air force, with their religious affiliations as set out on their attestation papers down to the end of 1942?


James Layton Ralston: I do not think the service departments have this information on the documents. A somewhat similar question was asked last year and we had a survey made of a certain proportion of the troops and worked the thing out on a percentage from that. I will endeavour to give the information subject to that reservation, and ask that the question be made an order for return.


Thomas Langton Church: I see no reason why the information should not be given just as it is in Great Britain. The attestation papers give this information to the end of 1941 now, and it is in the public interest that the information should be furnished.


James Layton Ralston: If we have the information on the enlistment papers it will be given. It means going over the attestation papers of probably six hundred thousand men, and I question whether the information is of sufficient importance to take the time of officers away from other jobs. But if the information would be satisfactory on a percentage basis we could give that.


INTERNMENTS-RELEASE TO ATTEND UNIVERSITIES
Mr. CHURCH:: 1. Were some two hundred and thirty alien refugees released from internment to attend Canadian universities?
2.	If so, on what terms, for how long and what will become of them when the universities close?
3.	Who authorized this?
4.	Will they be returned to internment?
5.	Did the British government ask university training for these persons?
6.	If not, who did?
7.	Was any conference held with Canadian universities on the subject?
8.	Are these students under any public observation or regulations?
9.	Is their mail censored?


WARTIME PRICES AND TRADE BOARD-TORONTO PROSECUTIONS
Mr. CHURCH:: 1.	Who are the enforcement officers, legal and otherwise, of the wartime prices and trade board at Toronto?
2.	What are their names, salaries and other emoluments, and how many are returned soldiers?
3.	Has the government taken action to fix maximum fines in the Toronto police court for minor technical or other breaches of this board's regulations?
4.	How many prosecutions were made by provinces during 1942 and to the end of February, 1943?
5.	Are municipal or provincial gaols used to house those convicted, and how many by provinces have been imprisoned?
6.	Is time allowed to pay these fines?


MOTIONS FOR PAPERS
Mr. MARSHALL:: For a statement showing the financial position at December 31, 1942, of (a) canteens operated by the auxiliary services organizations (army), (b) canteens operated by units and formations (army), (c) canteens operated by the auxiliary services organizations (navy), (d) canteens operated by the air force, (e) overseas canteens (N.A-A.F.I.).


James Layton Ralston: Mr. Speaker, after consultation with the hon. member and with the departmental officers I find that we can give a statement showing a combined summary of the financial position as at December 31, 1942, (a) canteens operated by auxiliary services organizations (army), and (b) canteens operated by units and formations (army). With regard to (e) the department has no financial statement showing the position up to December 31, 1942, and it would take some time to get it even if it were obtainable for production. I suggest that the resolution be passed calling for a combined summary of the financial position which I have mentioned, and that we drop clause (e) until we see whether this statement can be obtained for production.
Civil Air Transport


Mr. POWER:: The information, in reply to <d) ean be produced.


James Alexander Marshall: That will be satisfactory.


CANADIAN BROADCASTING CORPORATION- D. G. MCKINSTRY AND H. M. O'NEILL
Mr. MAYBANK:: For a copy of all letters, agreements, telegrams and any other documents in the possession of the Canadian Broadcasting Corporation relating to the services of Mr. D. G. McKinstry, chief architect, and Mr. H. M. O'Neill, assistant broadcasting engineer, with the Free French forces of General Charles de Gaulle, including those letters, telegrams and other documents relating to the dismissal of Mr. H. M. O'Neill from the Canadian Broadcasting Corporation following his services with such forces.


Ralph Maybank: Mr. Speaker, after conferring with the minister I ask that this motion be dropped.
Motion dropped.


SALE AND DELIVERY OF MILK IN SAINT JOHN, N.B.
Mr. HAZEN:: For a copy of all telegrams, letters, correspondence, memoranda and other documents exchanged between the federal government and New Brunswick dairy products commission from January 1, 1942, to date, in connection with the sale and/or delivery of milk in Saint John, N.B.


CIVIL AIR TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader, of the Opposition):: Mr. Speaker, on Friday last, subsequent to the statement of the Prime Minister on the government's policy on domestic and international aviation, I asked him if he would indicate when he expected the negotiations between the various nations on this subject to begin, and also if he would indicate whether or not there had -been any preliminary discussions on the subject between the united nations and others who might be involved. At that time the Prime Minister answered that he was not in a position to indicate when negotiations would be formally commenced between the united nations, but with regard to the point raised as to preliminary discussions, he asked that my question stand as a notice, so that more exact information might be given at another time. I should like to ask the Prime Minister if he is now in a position tp inform the house of the, nature and extent of the preliminary discussions, if any, which did take place, prior to his making
[Mr. Ralston.!
the announcement to which I have referred, and also if there have been since any formal or informal communications or discussions between any other nation and Canada with respect to the subjects dealt with in his announcement, and if so, the nature of such communications.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr, Speaker, my hon. friend will see from the statement I have in my hand that I had intended to answer his question to-day. I would answer it in this way.
Some aspects of the problems of international air transport after the war have already been the subject of informal discussions with the other governments most directly concerned. The general problem raises broad questions of principle which affect all the united nations, and it may be expected that in due course we shall be exchanging views with them.
In the statement I have just made there is reference to informal discussions with other governments.
On a previous occasion in this house, on March 10, a question was asked as to whether talks had taken place between Canada and the United States concerning post-war civil aviation. I replied:
In the frequent discussions which take place between officers of the Canadian Legation in Washington and officers of the State Department on questions of common concern, reference has been made to the problems of post-war civil aviation.
I might add that in a statement made on March, 11 in the British House of Commons by the Secretary of State for Air, Sir Archibald Sinclair said:
None of the arrangements we have made during the war with regard to air transport in any part of the world precludes us from working out new plans. Our exploration work is, in fact, in hand and we are now in preliminary consultation with the dominions and with India. Consultations with other members of the united nations will follow.
The consultation there referred to was two or three meetings that were called of the high commissioners in London at which certain matters of air transportation were communicated by the British government to our high commissioners for their information and transmitted by them to their respective governments. That covers I think all that I am in a position to say on the matter at the present time.


Gordon Graydon: May I supplement my question to the Prime Minister by asking one further question, and if this is not an appropriate question to ask he will no doubt take

Gasoline
the necessary action. I would ask him if the questions I have raised were the subject of discussion between the Prime Minister and Mr. Eden when he was here.


William Lyon Mackenzie King: Well, very informally, I would say.


GASOLINE
[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, I should like to direct a question to the Minister of Munitions and Supply. He need not appear surprised that I have not given him notice of this question, because it is following up a previous question I directed to him on March 24, in which I asked:
Perhaps in view of the fact that I have not given him notice he might treat the question as notice.
I said at that time:
I have had some correspondence from people operating small farms, and from market gardeners, who indicate that in their applications for gasoline rationing this year those who are using their cars for delivery purposes and in connection with their businesses are apparently being treated as ordinary car owners.
I then asked the minister if he would-
.	.	. consult with the oil controller and
perhaps make some regulation which would relieve the situation so far as these people are concerned.
The Minister of Munitions and Supply was good enough to suggest that he would consult with the oil controller and give me the information on another occasion. Since that time I have had further communications from market gardeners with respect to coupons for gasoline for the cars they are using in connection with their business in various places. Is the minister in a position to-day to indicate what the oil controller had to say in connection with it?


Clarence Decatur Howe: Mr. Speaker, the policy of the
oil controller this year differs from the policy last year in that people are not rationed by classifications. A doctor is not rationed in an amount equivalent to that of every other doctor, and a market gardener is not rationed proportionately with every other market gardener. Each application is judged on the basis of need, and when proof of need is given the attempt is made to provide relief proportionately as applied to all other car users.
I think, if these users will take their cases to the oil controller, they will receive consideration from him.


Gordon Graydon: I have in mind one particular case which has been already refused, and I think it is one which should be reconsidered and reviewed. I would like to give the case to the minister so that he may, perhaps, deal with it.


Clarence Decatur Howe: I may say that never since
the beginning of oil control have I reversed * a finding of the oil controller, and I have no intention of doing that. I should be very glad if my hon. friend would present the case to the oil controller.
Mr. GRAYDON; I was not asking the minister to reverse any decisions. I only asked if he would himself review the situation and see if there was an opportunity of doing something in this instance.


MR. JOHN BRACKEN REFERENCE TO NEWS ITEM IN PRESS OF APRIL 6
[Stage Direction]
On the orders of the day:
Mr. W. H. GOLDING (Huron-Perth):: Mr. Speaker, I desire to draw the attention of the Minister of National Defence to a news item carried in the press which draws attention to an outstanding incident of conspicuous bravery involving a great contribution to our war effort. This news item refers to a gentleman who recently, in the face of great danger, watered some calves, drank some milk, tasted some sap, and, more remarkable still, actually milked a cow.


Some hon. MEMBERS:: Order.


William Henry Golding: Such bravery surely deserves recognition. I therefore give the name of this hero.


Mr. SPEAKER:: Order.


William Henry Golding: -which is, John Bracken.


MILITARY SERVICE
[Stage Direction]
On the orders of the day:
Mr. H. A. MacKENZIE (Lambton-Kent):: Mr. Speaker, in view of the shortage of farm labour I would like to direct a question to the Minister of Labour. What steps have, been taken to see that farm workers who have been employed in industry or construction work under permits during the past few months are being- directed back to the farms for spring work?	' :	[DOT][DOT] . [DOT][DOT]
Military Service


Hon. HUMPHREY MITCHELL (Minister of Labour):: Men who are in essential industry are granted postponement from military service because they are essential to agriculture. During the non-active farming season they are given temporary permits to accept employment in industry, primary or otherwise, which permits expire when the seasonal farm work starts.
A number of farmers are working on temporary permits in many industries in Canada. The managers of employment and selective service offices across Canada have been notified that men at present in industry are to be reassigned to farms just as soon as the farm work opens up.
My hon. friend, who probably knows more about farming than I do, will understand that the farming season opens at different times in different parts of the dominion; and we felt that it was the best thing to do to leave farmers in this temporary employment until farming conditions opened up for the spring season. If the temporary permits authorizing them to engage in employment other than farming expire prior to the date the farm work opens up, managers in all districts have been authorized to arrange continuation of the temporary employment for as long a period as is consistent with the farming needs, and, in individual cases, when the employment is in the national interest. May I say it is very necessary that farmers notify the nearest employment office of their requirements for men or women in order that the employment offices may plan the placement work intelligently.


Mr. LOCKHART:: I have a further question which has a direct bearing on the statement just made by the Minister of Labour.
I understood the minister to say in effect that those who were urgently in need of help on the farm were to apply to the national selective service board, and that their applications would receive immediate attention.
I will give the minister complete information in writing. Are the national selective service boards in a position to divert labour from industry to meet this most urgent situation which I will bring to the minister's attention? They have already said they cannot do so, that they have no authority.


Humphrey Mitchell: My hon. friend will remember that I spoke of men who came from the farm into industry during the winter season. Of course they will have to return to the farm for the summer. They had per-
mits for the winter. My hon. friend can rest assured that these people will go back to the farms.


Norman James Macdonald Lockhart: One further question. Advice has been given in this instance that men might be obtained from certain camps, men who object to doing military service. Will the minister explain the method of payment in that case? Are these men to be paid the regular wages, or is the money to be paid to the government, the men to receive what the government has set as the wages allowed to men who will not perform military service? There is a conflict in that respect.	.


Humphrey Mitchell: There need not be any conflict. We are not going to let anyone compete unfairly with the going rate of wages in the district. What is contemplated under the order in council is that the maximum amount that can be paid to these people is $25 a month and board. Anything additional will be paid to the Red Cross. If the going rate is $40 a month and board, the man gets $25 and the balance is paid to the Red Cross.


Mr. SHAW:: Is there not a regulation which provides that a farmer who obtains a permit for temporary employment in industry may be kept there if his services are essential to industry?


Humphrey Mitchell: I am not quite clear as to my hon. friend's question. Which industry?


Frederick Davis Shaw: A farmer has obtained a permit to take temporary employment in a war industry; according to the regulations can he not secure a further permit to remain in the war industry if it can be shown that his services are essential to that industry?


Humphrey Mitchell: I do not want to give too definite an answer. The exception does not prove the rule. But I do not think the services of any farmer who left the farm, say this winter, to go into industry, would have become so essential to that industry as to warrant his being kept there. He should go back to the farm.


Frederick Davis Shaw: The minister says he should go back. What I should like to know is whether or not he will be compelled to go back.

Procedure in Questions


Humphrey Mitchell: I say he will go back in that case. But the exception does not prove the rule.


INQUIRY OF THE MINISTRY
[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: I wish to direct a question to the Minister of Finance or the Minister of Agriculture. I am in receipt of a telegram from certain independent meat packers and processors in Vancouver in which the charge is made that orders issued by the wartime prices and trade board and by the bacon board favour eastern packers as against western packers. A charge of this nature is serious and should, I think, be replied to without delay.


Thomas Vien: The hon. gentleman will understand that this question is clearly of the kind which should not be asked on the orders of the day.


Angus MacInnis: If this is a question not to be asked in the house, what sort of question can be asked? I have listened-


Humphrey Mitchell: Order. Mr. Speaker has given his ruling.


Angus MacInnis: I want to raise a point of order.


Some hon. MEMBERS:: Order.


Angus MacInnis: Well, I rise to a question of privilege.


William Lyon Mackenzie King: Mr. Speaker is standing.


Thomas Vien: I have listened to the question asked by the hon. member, and I am satisfied that the minister should not be asked to reply at this moment to a question of that kind. The order paper is there, and notice can be given of such a question, which will certainly require some consultation with the officers of the department.


Angus MacInnis: On a point of privilege, Mr. Speaker, I cannot see how this question can be put on the order paper. Besides that, the last time I tried to raise a question in this house I was not allowed to do so.


Thomas Vien: I might point out to the hon. member that if a question cannot be placed on the order paper it would hardly be relevant to ask it on the orders of the day.


Mr. COLDWELL:: I wonder if we might have a ruling on what questions may be raised
and what may not be raised on the orders of the day. Telegrams have been read in this house during the last week by a number of hon. members in other parts of the house, but the hon. member for Vancouver East (Mr. Maclnnis) has been stopped twice in trying to read telegrams. I should like to have a statement as to what this ruling is, and let it apply to everyone in the house.


Thomas Vien: I made a ruling very recently with regard to questions on the orders of the day. I thought I made it plain then that questions involving matters which were not of immediate urgency, or not so immediate that they could not be placed upon the order paper, should not be asked on the orders of the day. I tried to explain this very carefully, and without any desire to limit such questions as are of immediate urgency. But I find that questions are asked and, as soon as they are answered, supplementary questions are then put. Hon. members realize, I am sure, the position of the chair with regard to questions of this kind. When questions involving matters which do not require an immediate reply are placed on the order paper, with the notice required, an opportunity is given to obtain the necessary information. I think this is clear to hon. members, and I hope they will observe the ruling I gave.



PRIVILEGE-MR. FOURNIER REFERENCE TO PRESS REPORT AS TO PURCHASE OF RUGS BY DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
On the orders of the day:
Hon. ALPHONSE FOURNIER (Minister of Public Works):: Mr. Speaker, I rise to a question of privilege. In one of the editorials in yesterday's issue of the Montreal Gazette appears this paragraph:
For example, there was the incident which led to Colonel John Thompson's resignation as director of office economies. Two rugs worth $500 each had been bought for the Department of Public Works. The purchases ought to have been submitted for Colonel Thompson's approval, and they were not so submitted. Colonel Thompson resigned.
I wish to say this, Mr. Speaker: With the exception of the last sentence, "Colonel Thompson resigned", the remainder of the paragraph is not in accordance with the facts. There have been no rugs purchased by the Department of Public Works, for which $500 was paid, from October 7, when I was sworn in as minister, to this date. I wish right now, so that there may be no misunderstanding, to give a list of the rugs which were purchased since that date.
Farm Debt


Some hon. MEMBERS:: Order.


Alphonse Fournier: I think that is in order.


Thomas Vien: I do not wish to interrupt the minister, but I cannot think that is a statement which should be made by him now, or that can be covered as a question of privilege.


Alphonse Fournier: This matter has been brought up in the house, Mr. Speaker, and discussed in the press. I wish to say-


Thomas Vien: Order.


Alphonse Fournier: I was charged with being afraid to mention it.


Some hon. MEMBERS:: Order.


Thomas Vien: I must point out to the minister that at present a committee of the house is dealing with these matters, and the minister's question of privilege should really be placed before that committee.



FARM DEBT


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, in connection with the necessity for early action concerning debt adjustment legislation, I would ask the Minister of Justice whether or not a decision has been made with respect to debt adjustment, and whether legislation will be introduced before the Easter recess.
Hon. L. S. ST. LAURENT (Minister of Justice): This matter has been raised in the house before, and I said then I was not in a position to make a statement. I need not say that the matter has been receiving very earnest consideration.
At this time, however, I can say that in February, 1943, the privy council held the Alberta debt adjustment act to be ultra vires because it was in relation to bankruptcy and insolvency, mainly for the reasons that the statute was designed to compel compositions and prevented enforcement of claims so that there could be no "debt owing" within the meaning of the Bankruptcy Act. As all hon. members know, on the other hand it had been held that the Farmers' Creditors Arrangement Act is valid legislation within the jurisdiction of the federal parliament, but it is 
clear that this jurisdiction is confined to parliament's right to legislate in respect to bankruptcy and insolvency.
A bill to amend this act is being prepared to make it a more effective instrument and to extend its application to Manitoba as well as Saskatchewan and Alberta, but it is not probable that this bill can be introduced, and it certainly could not be enacted, before the Easter recess.
While the jurisdiction of parliament is ordinarily limited to bankruptcy and insolvency, it is felt that as a war measure provision might be made to maintain, for the duration of the war, the production, of foodstuffs, and to that end keep on the land in the western provinces every farmer who is an efficient food producer. It is therefore intended to enact by order in council a provision somewhat similar in purpose and effect to the provision contained in section 15 of the Saskatchewan statute, "The Limitation of Civil Rights Act."
It may be noted that this provision was first enacted in Saskatchewan in 1939, and is designed to enable the court in an action for the recovery of land (foreclosure, sale, specific performance, rescission of agreement or possession of land), to make an order for the temporary relief of the debtor.
Subsection 1 of section 15 aforesaid provides as follows:
15. (1) In an action:
(a)	By a mortgagee, or his personal representatives or assigns, for foreclosure of the equity of redemption, or for sale or possession of the mortgaged premises or for the recovery of any moneys payable under the mortgage;
(b)	by a vendor of ^ land, or his personal representatives or assigns, for specific performance or cancellation of an agreement for sale of land, or for sale or possession of land sold under agreement of sale;
_ The court or judge may, after making such inquiries as are deemed necessary concerning the income and assets of the parties and all other matters which may appear relevant, grant or refuse to grant any order, stay the action, postpone payment of any moneys due, prescribe terms and conditions to which any order shall be subject, vary or extend any order from time to time, and give any direction as to costs; and in disposing of any application the court or judge shall have and exercise discretion in each case and shall act upon its or his own view of the proper order to be made having regard to all the facts and notwithstanding any order or ruling heretofore made at any time in any other action.

Address of B. K. Sandwell



CANADIAN FORCES


[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, while listening to the news broadcast over the radio a few nights ago I heard some information of public interest which has not yet been conveyed to the house. It had to do with a new crown company for the amalgamation of telegraph and telephone lines. Will the Minister of Munitions and Supply give the House of Commons at least the same information as was given to the public over the radio?
Clarence Decatur Howe: The purpose of the crown company mentioned is to undertake the building of certain communications lines required by the armed services. I shall be glad to lay on the table an order in council covering the situation.



INTERNATIONAL CURRENCY


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Yesterday the hon. member for Lethbridge (Mr. Blackmore) asked a question about a plan for the international stabilization of world currencies after the war, which had been referred to by the secretary of the treasury of the United States. This plan has been communicated to the Canadian government and to the governments of other countries as a basis for discussion rather than as an expression of the official views of the government of the United States. It is now under examination by officials in Ottawa. A plan which has very similar objects in view has also been prepared by officials of the United Kingdom government. It too is under examination by our officials.
I might suggest that if the hon. member so desires I would have the two plans printed, in so far as they have been published by the governments of the United States and Great Britain respectively, and tabled. If after hon. members have studied them it should be desired to have a discussion upon them in the house, a time might be conveniently arranged for that purpose.


Mr. BLACKMORE:: I should like very
much to have the Prime Minister do that very
thing. I believe a full discussion should be had with regard to it.


Major James William Coldwell: May I ask if the statement in the press to-day is correct, that the deputy minister of finance is in Washington to discuss this proposal with Mr. Morgemthau?


Mr. ILSLEY:: No, that is incorrect. Doctor Clark went on other business.



WAYS AND MEANS


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of ways and means.
Mr. NORMAN JAQUES (Wetaskiwin):: A report appeared in the press last week which I should like to bring to the notice of the house. This report appeared in the Ottawa Citizen of April 1 last.
New "authority" to guide affairs seen by Sandwell.
A "supranational authority" with power to settle questions of immigration, natural resources, treatment of minorities, repudiation of debts, finance and other questions was predicted by B. K. Sandwell of Toronto in an address before the Ottawa branch of the League of Nations Society last evening in the railway committee room of the senate.
To bring about Canada's acceptance of the new "authority" however, Mr. Sandwell said it would be necessary to bring all the people to a diminution of their loyalty of the crown by substituting a new loyalty to an "authority wider than Canada, than the British commonwealth of nations, and the United States or all the democracies together ..."
Mr. Sandwell said-
. . . it is up to such organizations as the league-to endeavour to develop among Canadians "the will to sacrifice a substantial part of their national rights" for this new "authority".
I should like to ask the government, or perhaps the Minister of Justice (Mr. St. Laurent) whether it does not constitute sedition, especially perhaps at this time, for a man to make statements to the effect that Canadians, British subjects, must renounce their loyalty to the crown, as to which every hon. member of this house has taken his oath before taking his seat in the house.


Thomas Vien: There is so much conversation in the house that it is impossible for me to hear the hon. member.


Mr. DUPUIS:: In what paper did the report appear?


Norman Jaques: In the Ottawa Citizen of April 1, the day Mr. Eden spoke in this house, on which occasion I think the Prime Minister
Address oj B. K. Sandwell

charged Mr. Eden to take back to His Majesty an assurance of the united loyalty of the people of Canada. The Citizen reports a meeting held on that same day in this very building, at which it was openly advocated that Canadians should renounce their loyalty to the crown in favour of a wider authority, wider than Canada, wider than the British commonwealth, wider than the United States or than all democracies. If that is not sedition I should like to know what it is.


William Lyon Mackenzie King: I imagine the question is one to which the Minister of Justice would prefer to reply rather than that I should -attempt to do so. No doubt the Minister of Justice will take note of what my hon. friend has said and give such answer, if any, to him as he may deem advisable after seeing what the hon. member has said. However I would say that I understand it is a general rule that the government does not of itself inform the house on matters of law. It is not part of the duty of the ministry, or of the Minister of Justice in particular, to advise as to whether a particular matter constitutes sedition. That is something that the courts would decide. It would not be for the government to express an opinion in advance.


Mr. E. G. HANSELL (Macleod):: Referring to the matter on which the hon. member for Wetaskiwin (Mr. Jaques) has just spoken, may I say that it is not merely a matter of asking the Minister of Justice to give an interpretation of the law as to what constitutes sedition. I think the hon. member might have gone further, had his voice permitted, and brought to the attention of the Minister of Justice and of this house the fact that there are dangerous forces at work, sometimes not appearing in the open, that would attempt to destroy the sovereignty of the British crown. I am surprised that the traditional Conservative party in Canada have not been alive to this situation. Perhaps they have become so "progressive" they have forgotten that sometimes the traditional aspect of Conservatism has some value. It does seem strange to me, Mr. Speaker, that *on the very day Mr. Eden was speaking to us in this house, the very day that the Prime Minister of Canada should send by Mr. Eden to Their Majesties the felicitations of Canada, within this very building, in a certain committee room, there should appear before the hon. gentlemen who usually sit in another place a speaker who would give an address such as is recorded in the press dispatch appearing in the Ottawa Citizen of April 1.


Gordon Graydon: If I may just ask my hon. friend a friendly question, on account of the noise in the chamber I was unable to follow the remarks of the hon. member for Wetaskiwin (Mr. Jaques), and now that the hon. member for Macleod (Mr. Hansell) has made some sort of reference to the Progressive Conservative party I should like to know what he is referring to.


Ernest George Hansell: I shall be glad to read part of the article which should elucidate the matter. It appears on page 8 of the Evening Citizen of April 1, under the heading, "New 'Authority' to Guide Affairs Seen by Sandwell." The particular part to which the hon. member for Wetaskiwin and many of us take exception is this:
A "supranational authority" with power to settle questions of immigration, natural resources, treatment of minorities, repudiation of debts, finance and other questions was predicted by B. K. Sandwell . . .
And further:
. . . it would be necessary to bring all the people to a diminution of their loyalty to the crown by substituting a new loyalty to an ' authority wider than Canada, than the British commonwealth of nations and the United States or all the democracies together and might even become wide enough to enfold the whole human race."
And further:
"Even while the world is being administered by these four nations-
I suppose he means the united nations.
-the peoples of Canada, Australia and other countries will be preparing for a more constituted structure of affairs," Mr. Sandwell declared, saying that it was up to such organizations as the league-
He was speaking to the League of Nations Society.

to endeavour to develop among Canadians "the will to sacrifice a substantial part of their national rights" for this new "authority."
One thing the Canadian forces are fighting for is the traditional principles for which the British commonwealth of nations has always stood. One thing for which we are fighting is the preservation of the sovereignty of the British crown. Let it go on the record now- the Conservative party can put itself on record also if it wishes-that there is one thing for which social creditors stand. You can call them funny money men, if you like; you can call them crackpots, if you like, but there is one thing for which they stand, and that is the sovereignty of the crown of England. We become tremendously alarmed when we recognize that there are forces working for the destruction of the crown. I am not so much concerned with or alarmed at Mr. Sandwell

Address of B. K. Sandwell
saying this. I have never met this gentleman, but in my view he is voicing the same opinions that have been expressed by much greater authorities than he, and it is time this house became alive to and alarmed at the situation which exists. If we win this war, as we will, but lose in the peace the authority now vested in the crown, then we shall have fought this war in vain.


Vincent Dupuis: I should like very much to express my views on the subject discussed by my hon. friend. I hope hon. members of the Conservative party will not be scandalized if I attempt to interpret what Mr. Sandwell said, because I think he spoke on a high plane over and above human contingencies.


Gordon Graydon: To what body was he speaking when the alleged remarks were made?


Vincent Dupuis: I think he spoke of the general tendencies in the world toward improving humanity.


Gordon Graydon: To what body was he speaking at the time?


Vincent Dupuis: My hon. friend the leader of the Progressive Conservative party may ask the hon. gentleman on the other side.


Gordon Graydon: I was just asking my hon. friend what body Mr. Sandwell was addressing at the time. I was only asking for information.


Mr. MARTIN:: The Social Credit caucus.


Vincent Dupuis: The hon. member for Essex East suggests that it must have been the Social Credit caucus, as a matter of fact he was addressing a meeting of the League of Nations. What I want to say is this, that I think Mr. Sandwell spoke in an abstract way.


Ernest George Hansell: Mr. Speaker-


Vincent Dupuis: My hon. friend might be good enough to let me give my interpretation of these remarks, because I listened to him very quietly. For myself, when I am so strong to fight the actual war; when I give my energy and what influence I possess to encourage the citizens of this country to fight this war, it is not only because I love my country; it is not only because I have the greatest admiration for the British people in this struggle and for the crown, but also because over and above all these things I love humanity. If we understand the importance of Christianity and humanity I think we must realize that humanity has no boundary, humanity has no nationality ; it covers the whole earth, it is above the nation, above the empire and above the crown. I think it was in that spirit that Mr. Sandwell spoke. So far as I am concerned I
am not scandalized at all by what he said, and I thought it proper for a humble member of this house who comes from the east to give as best he could an interpretation of what was said by that good writer who is editor of Saturday Night.


Robert Fair: Mr. Speaker, I think there is one point raised by the hon. gentleman who has just taken his seat (Mr. Dupuis) which ought to be contradicted right away. There is a misapprehension, not only on his part but on the part of others, that Mr. Sandwell was speaking for the Social Credit group. That is not correct.


Vincent Dupuis: I will withdraw it.


Gordon Graydon: Mr. Speaker, may I first thank the hon. member for Macleod (Mr. Hansell) for paying which seemed to me to be a compliment to the Progressive Conservative party. He said that he expected that this party would say a word of commendation and also express its loyalty to all the things that go to make up the great British empire to which we belong. If he has anticipated our reply on that, I know that what I say at the moment will not disappoint him. I think we can be pardoned for not having seen the article in the Citizen. This is the first intimation I have had that there was such a news item; as yet I have not seen it. I think we are in pretty good company. My hon. friend says that the article appeared on April 1 and to-day is April 7. I repeat that we seem to be in good company, not only in not having made these observations sooner but also in having similar views with respect to loyalty to the great British commonwealth of nations.


Major James William Coldwell: Mr. Speaker. I am a member of the Ottawa branch of the League of Nations Society. I did not happen to be present on Thursday evening when Mr. Sandwell spoke, but I should like to say that I know of no society whose members are more loyal to Canada than the members of the League of Nations Society in Canada.


Gordon Graydon: Was it the League of Nations Society to whom he spoke?


Major James William Coldwell: Yes. As my hon. friend the member for Chambly-Rouville said a few moments ago, one can be loyal to the wider interests of humanity without being disloyal either to his community or to the nation in which he lives. I would go beyond that and say that those who have a wider loyalty to humanity are often the most loyal to their own country and their own community. My hon. friend beside me keeps muttering, "to
Address of B. K. Sandwell

the gold standard." I want to say to him that I have no more confidence in the gold standard than he has, but as nations move forward in the days to come it is certain that if we are to preserve law and order in the world, if we are to escape these recurrent wars, then every nation must abide by an international code of law and no nation can usurp the rights of other people by making war against the world. Somehow or other we must do as nations what we have done in our communities. I must obey the law that has been made by the community in which I live, and the hope is that as nations we shall obey the law that we all help to make. As organized peoples we must have the power to enforce those laws.
Let us not for one moment think that when a man rises to discuss the possibility of a great world organization, whether he calls it supranational or not, he is disloyal. The intense nationalism which has afflicted the world and which has shown itself in the self-sufficiency of nations since the last war has in no small measure contributed to the bringing on of this war. We should examine every proposal that looks to the advance of people in the direction of law and order. I would say of Mr. Sandwell that he is not in bad company when he discusses the possibility of a supranational organization for the preservation of peace.


Norman Jaques: Gold standard.


Major James William Coldwell: I am afraid my hon. friend has the gold standard on his brain. I was saying that in this respect Mr. Sandwell is not in bad company. I noticed that Viscount Cecil was preaching this when the present war broke out. Who can say that he has been disloyal, either to the people or to the British crown? I notice that Mr. Churchill stood for collective security. A man who spoke here a week ago to-morrow, Mr. Anthony Eden, has throughout his public career stood for collective security and the organization of nations to prevent war. I could mention also Mr. Herbert Morrison, Sir Stafford Cripps, and [DOT]others who are members of the British war cabinet, men of all sorts and conditions who stand for collective security as opposed to world anarchy.
I do not want to prolong the discussion. I simply wanted to say that as a member of the League of Nations Society in Canada, as a member of the national executive, I am proud to be associated with that group of men and women who are intensely loyal to Canada and to the sovereign of Canada.


Thomas Langton Church: Mr. *Speaker, the years from 1918 to the outbreak

of this war were the most disastrous in the history of civilization. My hon. friends to my left and others believed that we could depend on peace pacts, on Kellogg notes and Locarno notes and all that sort of thing for our defence. The result was that Britain threw away the greatest army, the greatest navy and the greatest air force the world had ever seen. It was these pacifists and internationalists that got us into this war. Now they are up to their old game even though this war has not been won. The only collective security the world ever had was Great Britain and' the British fleet. That is the only league of nations that was ever a success-the British empire and all it stands for down the ages.
There have been these leagues before. They had them in the days of the Romans, but there was always the same result. The pacifists almost caused the destruction of civilization in this war. They are still up to their old tricks. The writer of the article referred to was one of those who went up and down this country saying that we did not need any army, any navy or any air force; that we could depend on the league and collective security. That was a thing of the past; we were to depend on collective security. There is no such thing, and there can be no collective security unless the war is won. These hon. gentlemen who bring this matter before us to-day have been wrong before. They were wrong for the twenty years between the two great wars. They would disband our army, navy and air force. Ramsay MacDonald went up and down the country preaching pacifism. He was under observation during the last war. If he had had his way, we would have lost it. Right in the city of Ottawa to-day there is an exhibition being put on by the navy league; if similar leagues to oppose pacifism had been more active in the twenty years before this war we would not have had this second world war. Is it any wonder that we have a five billion dollar budget?
The League of Nations was the biggest farce and humbug the world ever saw. The pacifists and the league saw Germany arming from 1935 onwards, and they supported disarmament. What was the policy of these people in the old country who were supporting the league? They allowed Germany to rearm, and their pacifist policy caused this war. This dominion has spent nearly five million dollars of the taxpayers' money on a useless league of sham and humbug, because that is all it ever was. The pacifists blindfolded the people of the old country and led the politicians there to disarm. The

Address oj B. K. Sandwell
United States, which proposed the league, was led by the pacifists andi isolationists in that country to fade out of the league and leave Britain to go it all by itself. Russia and the United States came into the war when they were attacked. The result was that Britain entered the war alone, not because she was attacked, but because of an honourable pledge given to Poland. Look at the way Poland is suffering to-day. I referred in this house not long ago to the fact that one million Poles, men, women and helpless children, as a result of this league farce and the work they carried on, had been snatched from their homes and their work and taken to the abattoir to be treated by the Germans just as if they were a lot of animals and put to death. While the league was talking disarmament and writing notes, Germany went on rearming, and we were told that there would be no more war, that we could depend on pacifism, the Monroe doctrine, internationalism and all that kind of thing, and now the old game is being played over again. They are getting ready for a third world war. Just link yourselves up with the pacifists again and you will have another world war, and children who are babies to-day will be called out twenty years hence to fight in another world war because of this dream of a new world that is held by the pacifists. That has been tried before and failed.
I am opposed, Mr. Speaker, to holding up the business of the house by bringing before it academic matters of this kind when the Minister of Finance wishes to go into committee of ways and means. Evidently we shall have to change the rules of the house if we are to make any progress at all. Are we going to sit here day after day listening to academic discussions while our young men in Libya and Tunisia are fighting battles for SI.30 a day? We sit here day after day listening to academic discussions on domestic matters which hold up supply and prevent us from voting money for the men of our armed forces. If that continues they are going to insist on a showdown with the pacifists and internationalists when they come back home.
I can tell you this, that the people of this country are in no mood to spend another dollar on a farce like the League of Nations. The money that was voted and spent on the league was wasted and eventually led to this second war. They talk of collective social security and would secure peace by legislation. But we know how the German people have acted for the last two thousand years. The world had the same trouble with them in the days of the
Romans, and there was a league then. Read Gibbons "Decline and Fall of the Roman Empire" on doles and circuses, and Bryce's "History of the Holy Roman Empire", to see who it was that made the wars and bled the people of the world for centuries past.
Talk of freedom from fear! There can be no freedom from fear until Britain regains command of the seas. This war might go on for four or five or six years more. That is what it looks like-a seven years' war-while we sit here talking about a league that never had any right to exist. Britain has lost the command of the seas, and until she and the allies regain that command we can do nothing to invade the continent. It seems to me that we have had nothing but politics in this house for the last two years, the plebiscite last year, and all that kind of thing, and the same thing is going on this year. Our time is taken up with academic and political questions instead of being devoted to the war. This proposal of pacificism will not amount to a snap of the finger in defeating Hitler and the axis powers. We are as close to defeat now as we were when the war broke out. Germany to-day occupies practically the whole of Europe, and is in command of the coastline from Norway right down to Gibraltar.
Read what Mr. Knox said yesterday in the United States on the Atlantic problem. I venture to say that the isolationist party in the United States after this war will follow the policy of Woodrow Wilson and have nothing to do with the league or with foreign wars. These gentlemen were wrong before. They were wrong twenty years before this war, they are wrong again to-day. We have not got inside the German defences on the continent yet. The spring campaign is to open up soon, and here we are sitting in this house talking about matters of this kind. I say in all seriousness that this is no time to be talking of pacifist societies, and of everything but the war. They and the pacifist press and people who supported them have had their day. In the old country the government was advised by military experts during the years of peace to keep the army and navy and air force strong, but they would not do it. Then came the battle of Britain, and Britain was barely saved. After Dunkirk, if it had not been for the British fleet and the mother country, we would have had the Germans out on this continent and Washington and Ottawa would have had to seek peace long ago from the axis powers.
I am not responsible, Mr. Speaker, for the addresses that are being made here to-day. I protest against this practice of drawing a red herring across the track when we and our allies are fighting for our very lives for the right even to live. Why should we be wasting time
Address of B. K. Sandwell

to bring into effect somebody's pet theory aboui a new paradise that is to come when our young people who enlisted are fighting for their lives? Here we are wasting time discussing remedies and patent medicines with regard to domestic affairs, as if that were what we are fighting for-proposals that are made in this house and out of it to protect the public in the future-while the war is not yet won. We may have the axis powers out here before very long unless we do more than we have done already.
I deeply sympathize with the three ministers of defence and with the government. As an independent member of the house I have always supported any measure which would make our war effort more effective. I wish to encourage the government all I can to make ours a total war effort, and anything that the ministers in charge of the three defence departments do to bring that about will have my support and I believe the support of everyone in the opposition.
Again I protest against holding up the business of the house by bringing forward such matters as have been raised to-day. It is obvious that the rules of the house will have to be changed. Here is the Minister of Finance wanting to get into committee of ways and means with a five billion dollar budget, and the time of the house is wasted by bringing forward academic domestic matters. We should be devoting our energies to the war and eliminating everything else. Compare our proceedings here with how business is conducted at Westminster. There 99 per cent of the time of parliament is devoted to war measures. It is true that domestic measures are most important for the welfare of the men, women and children of this country, and I sympathize with my friends to my left in urging some of them, but they are only secondary. Here we have given away all our powers to outside boards and authorities. We have controllers and boards making expenditures without parliament hearing anything about them. Here we sit and talk about everything else but the war. The war is not far from our shores to-day.
I protest against the league and all connected with it. The president of the league got a job down in Chile. The best way to cure insomnia in the twenty years following the last war was to be connected with the league and to get a trip to Geneva and go there and listen to the babble of the pacifists. And what did the league do? They got Canada to pass sanctions against Italy, and then we quickly withdrew those sanctions. They threw away our defences as well as our friends.
IMr. Church.]
Through the league we lost two allies that we could have had when we entered this war. The people back home in the constituencies, when they get their tax bills, have no doubt about who caused the war. Let me say to the gentlemen who are banging their desks that they are responsible for the pacifism which brought about this second war. This same banging of desks went on for twenty years in this house when I was a lone voice crying in the wilderness, endeavouring to get a united House of Commons against pacifism and for rearmament. In fact, many on my own side of the house thought I was going too far when I would not support the league and all connected with it. I can say this, that in a very humble way I have done my duty as a member of parliament.
I protest against a discussion of this kind on the motion for committee of ways and means. The country cannot be carried on unless we have the money. I do not agree very often with the Minister of Finance (Mr. Ilsley), but he is a hard-working, conscientious official and does the best he can. He is not altogether responsible for the magnitude of the budget.
I do not blame those who got nice trips over to Geneva. They say the boats were comfortable; there were cigars and beverages; the meals were excellent, and everybody had a most enjoyable time. Indeed, a lady who used to be a member of this house, and for whom I have a great regard1, because she was a good member, wanted to have me sent over as a delegate to the league assembly, because, she said, I would be one of those who went over to scoff but would come back to pray for the success of the league and praise what it had done. However, her own opinions have changed entirely; she is going up and down the province of Ontario and at times is not as friendly to the league.
It is the people with views which I have described who caused the second world war; they were somewhat responsible for the first war; and before another twenty years have gone by there will probably be another war, with proposals for another league of North America and all that kind of thing. I can tell you this, I read every day in the Congressional Record the proceedings of the senate and congress at Washington, and I am convinced that after this war they are going to get right out of this international business and back to isolationism. That is the view of ninety per cent of the people. We should stop playing with great international issues along league lines, because it is a sheer waste of money. We threw away five million dollars on this venture, and what have we got? A second world war, with the prospect of another one

Meat Industry
if leagues and internationalism are continued. These gentlemen have always been wrong. They were wrong about the first war; they were wrong in the twenty years which followed it; they are wrong about this war; and if they have their way, there will be a third war in another twenty years' time.


James Lorimer Ilsley: I should like to appeal to the House of Commons to assist the government in getting ahead with very important business. It seems almost impossible for us to make any headway. This week is going very much as last week went, without anything much being accomplished. I am sure that the public does not want this; I know we do not want it, and I do not believe the majority of the members of the house want it. These long discussions on going into supply may have their place, but I must once more tell the house that government business and the early passage of certain measures are of extreme importance.


MEAT INDUSTRY-ALLEGED DISCRIMINATION IN WARTIME PRICES AND BACON BOARD REGULATIONS
Angus MacInnis: There is a British parliamentary custom that before supply is granted, a member having a grievance either of his own or of his constituents shall have an opportunity to present it to the house. I had hoped that I could have presented this in a more expeditious way than I can do now, but since that way was not left open to me I must do it in this way.
I am in receipt of a telegram, and possibly other hon. members from British Columbia have received similar telegrams in which grave charges are made against the wartime price and trade board and the bacon board, alleging discrimination. I believe that these charges should not be allowed to remain unanswered a moment longer than is necessary.


Mr. McGEER:: If the hon. member for
Vancouver East (Mr. Maclnnis) will permit me, may I ask, because I think I have a similar telegram, how his telegram is signed1?


Angus MacInnis: My telegram is signed,
"Five independent meat packers and processors."


Gerald Grattan McGeer: The last paragraph of mine is, "Memorandum following by air mail." Does the hon. member know who these people are?


Angus MacInnis: I could not say definitely to my hon. friend who the exact persons cone cerned are, but I am satisfied that they are bona fide industrialists engaged in business in British Columbia. In any event I will read
the telegram, a copy of which I have already sent to the Minister of Finance, because I felt I should. The telegram reads:
The independent meat packers of Vancouver are deeply perturbed at the lack of interest shown on the part of the B.C. representatives on all regulations pertaining to the meat industry which have discriminated against the west. All orders issued by the wartime prices and trade board and the bacon board thus far favoured the east while western industry has been ignored. Mr. Gordon is too busy to centre on one industry, thus he has left all beef and pork orders to eastern experts who have worked hand and hand with eastern packing house men without any consideration for B.C. business conditions.
That is a serious accusation. I am not saying whether it has any substance; I do not know; but I think it is a statement which should be brought to the attention of the responsible ministers without delay, because it is not good for Canada that disunity should be created by charges of this kind, and this is the place where these charges should be aired and where we should get an answer. I continue:
To us recent order No. 247 respecting pork products is a direct attempt to put control of the packing house industry in eastern hands and forcing western independent industry out of business. As representative of the people of B.C. the onus of protecting B.C. industry against eastern discrimination is yours. We urge an immediate and thorough investigation as under these new government regulations we will be forced to close down. Complete memorandum following by airmail.


Gerald Grattan McGeer: Signed?


Angus MacInnis: Signed, " Five independent meat packers and processors."


Mr. MACDONALD (Brantford City):: Does it give the number of the meat packers?


Angus MacInnis: Five.


William Ross Macdonald: Does the hon. member know their names?


Angus MacInnis: No; I have not their
names. Nevertheless I am satisfied, since the war is on


William Ross Macdonald: Mr. Speaker, I rise to a point of order. This must be considered as an anonymous telegram, and I think the time of this house should not be taken up with discussing allegations set forth in an anonymous document. If people have a grievance, surely they should set forth the grievance and sign their names to it. But for any hon. member to come into this house with an anonymous document and ask the house to discuss it is, I submit, not in order.
Meajt Industry


Angus MacInnis: I do not wish to take up any more time. I have done what I wanted to do. A telegraph company would not take for transmission an anonymous telegram or any telegram of this kind if they did not know who was sending it.


An hon. MEMBER:: Oh, yes, they would.


Angus MacInnis: I am taking responsibility for bringing this matter, on the strength of this telegram, to the attention of this house.


Mr. GARDINER:: Does the hon. member for Vancouver East (Mr. Maclnnis) know of five packing houses or what are generally considered packing houses, in Vancouver, in addition to the three large packing houses which have places of business right across Canada?


Angus MacInnis: There are quite a number of small packing and processing plants, of which the Alberta and the Pacific are two. There are any number of processing plants in Vancouver where various kinds of meat are prepared. There may be more than five, and I do not know which five it is that is involved. I am satisfied we should not quibble about who they are, or whether they are of sufficient importance to merit our attention. The fact is that they have made charges which, if inaccurate, can be very quickly refuted.


Gerald Grattan McGeer: Mr. Speaker, this telegram came to me this morning, as I presume it did to the hon. member for Vancouver East (Mr. Maclnnis). Upon receiving it, I immediately got in touch with the Minister of Agriculture (Mr. Gardiner), and was assured by him that as soon as the facts arrived by airmail he would be more than pleased to give the matter consideration.
It will be noticed the telegram, as presented, is signed by five independent meat packers and processors. While it does not say who they are, the important thing is that the facts upon which their complaints are based are coming by airmail. They have not yet arrived this afternoon.
One of the difficulties hon. members are up against in these matters is that we are not made acquainted with all the orders issued by the wartime prices and trade board. I doubt very much if many of them would have much meaning to the average member, unless they were first explained by members of the trade to which they were directed.
It has been suggested that western members are not taking enough interest in this type of complaint. While I am on my feet may I point out that in the desire of those responsible for administration to secure greater efficiency 
there is always the danger of wiping out the little man, and depending upon the larger organizations which may be capable of producing better results, for the time being. I hope if there is anything in these charges they may be made the subject of a real inquiry, because it does seem to me the time has come when parliament may have to intervene to prevent what may become a steady drift toward one of the greatest dangers in a democracy, namely, the development of overriding and all-powerful monopolies throughout the trade and industry of our country.
The sacrifices we are called upon to make will have to be made. But at the same time wherever freedom of enterprise and freedom of trade can be maintained, without injury to the war effort, it should be done, as against a policy of monopolistic development.
I have nothing further to say, because I have not yet received the instructions. I can, however, assure my hon. friend that as soon as they arrive I, for one, will be more than pleased to associate myself with him or any other western members in having the matter properly presented to the minister in charge.


Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, in my opinion this is a serious matter, and one which should be investigated by both the Minister of Agriculture (Mr. Gardiner) and the Minister of Finance (Mr. Usley). When Mr. Donald Gordon was in Vancouver in January he was interviewed by these independent meat packers, two of whom are the Alberta Meat Company and the Pacific Meat Company Limited. They laid their complaints before Mr. Gordon at that time and he assured them he would have an investigation made.
At that time two of the chief complaints were these:	In the first place, in 1942 west
coast packing plants had been ordered to reduce their hog killings to fifty per cent of the 1940 business. They say that meant to about twenty-five per cent of their 1941 business. One press report points out that a certain plant had to reduce weekly hog killings from 1,400 to about 350. Apparently the hogkilling end of the business was the only profitable part of it. They cannot make a profit in these times from beef killings.
The second complaint was that western packers were not allowed to participate in the export of bacon to Great Britain, and that this export trade was reserved1 to the eastern packers. Since there was a guaranteed price, set high enough for the eastern packers to make a good profit, western men said that the position was entirely unfair to them. They no doubt have the feeling that the large

Meat Industry
companies which have their main plants in the east, and only branches in the west, are making their profits out of business done in the east. And it is suggested that by making suggestions with regard to these orders they are, in effect, putting independent plants in the west out of business.
The present complaint has arisen as a result of the change made last week in prices of pork products. These packers claim that that is simply one more step toward having them wiped out, and they hold the view that the government is listening too much to the advice coming from large packing plants. I suggest to both ministers I have mentioned that the merits of the complaint must be carefully investigated and, as two other hon. members from Vancouver have done, I ask that the investigation be made promptly and thoroughly.


James Garfield Gardiner: Mr. Speaker, I believe I should say a word about one matter to which reference was made a moment ago. It is suggested that, because there is an agreement with Great Britain for the shipment of hogs from this country, the packing plants shipping that product, constituting about seventy per cent of the hogs slaughtered under inspection in Canada, are benefiting by that deal to the point where they are taking business away from some others who do not sell under the agreement.
May I say at once that the lowest price being obtained by any packing plants in Canada for pork products is the price obtained from Great Britain. As I recall the figures from memory, the situation in Vancouver arises from the fact that British Columbia produces only one-third of the hogs consumed in that city. Under ordinary circumstances this means that there is a local market in Vancouver for all hogs produced there. Hogs do cross the mountains into British Columbia, so that the slaughter of hogs in that province may be increased. That is a local market. Any local market in Canada to-day pays a much higher price for hogs than is paid under the British agreement.
Let me illustrate the point. The British agreement makes possible a price of about $11.20 at Winnipeg for live hogs. Anyone who has been following prices on the Winnipeg market knows that they have been away above that amount, ever since the British agreement was signed. The reason why they are away above is that all hogs sold locally in Canada bring a much higher price than the price under the agreement. So that a packer who is selling hogs under the British agreement is
not in a position to take profitable business away from those who do not sell under the agreement. I would be surprised to find any packer in Vancouver who would wish to sell hogs under the agreement. They have a special market, right at their own doors, a market which pays a higher price for pork than is provided under the agreement. Therefore I should expect they would want to keep that market, and sell in it.
The other question raised, with regard to any regulations that have been put into effect recently-


Mr. SENN:: Before the minister leaves the first question, will he say whether export bacon is receiving anything from the stabilization fund by way of subsidy?


James Garfield Gardiner: If it is, it is all beneath the price of which I am speaking. There is nothing over and above the price we are receiving from Britain under the agreement. That is the only return any packing house can get. We are selling bacon to Britain on the basis of 110 shillings, and the price to the packing house is under that price. That 110 shillings is what provides the $11.20 at Winnipeg. Anyone who is selling under that agreement to Britain is not getting as much for the pork product he is selling as he could get if he sold it all in Canada. Those who are selling all their pork products in Canada are getting a higher return than if they were selling under the British agreement.


Gerald Grattan McGeer: Would it be possible for a packing house that is selling in Britain and making a profit under that contract to raise the price of hogs for local consumption for the purpose of shutting out independent packers who are not making any profit out of the business with Britain? I understand that is the complaint.


James Garfield Gardiner: I would not be in a position to answer that question offhand; there would have to be some inquiry made. But I know this, that in the first few months after the war started, as a result of an agreement entered into with Britain-I am speaking again from memory-I think some forty small packing houses that were not supplying bacon under the British agreement made handsome profits. And then, on account of conditions which developed in the spring of 1940 they were not able to make the same profit. A delegation came here at that time asking the government of Canada to see to it that some of the money which had been accumulated as a result of the activities in the early days of the agreement should be divided up among those particular packing plants. I might say that each

Mutual Aid-Administration Staff
time there has been a change in the agreement packing plants of different types, those who have been supplying to Britain or those who have not, have made representations to the government. There have been no representations in recent months; I would say there have been none in the last two years, from those plants that are not supplying under the British agreement to indicate that they are not doing just as well as any other plants.


Howard Charles Green: What about this representation to Donald Gordon?


James Garfield Gardiner: These representations
being made now, in so far as they relate to the bacon board, are with regard to an attempt to get hogs into such plants as will make it possible to send a sufficient amount of bacon to Great Britain. The only plants that can supply bacon to Great Britain are those that are under government inspection, or in other words, plants the equipment of which measures up to the standards set by the department, standards which were set before the war started. Other plants which do not have that standard equipment, and therefore have not government inspection, do not supply the product under the British agreement. Only those plants that are up to the standard and have government inspection are supplying all the product, and there is only one way to get that product to Great Britain, namely, by putting it through plants that are subject to government inspection.
If someone in this country starts to set up a system under which they will take away a considerable part of the pork from those plants under any regulations that are set up, then someone will have to set up some other regulations to ensure that a sufficient amount of pork goes to plants where it can be properly processed to go to Britain, or no pork products will be going to the British market under our agreement. I do not doubt that some of the regulations which are put into effect are for the purpose of seeing to it that at least sufficient amounts of pork or a sufficient number of hogs get into properly inspected plants to make it possible to send that pork to Britain. That does not mean that they will make more money than those who are selling in Canada.


James Lorimer Ilsley: The wartime prices and trade board appears to come into this picture in some way, I do not know just how, probably as a result of a price order they have made. As soon as I have any facts I will investigate the matter and see whether there is anything wrong.
I might say, however, that I do not think the hon. member for Vancouver East (Mr. 
Maclnnis) should have brought this matter before the house with so few facts. It is very easy for persons in any section of Canada to make accusations of territorial discrimination. That is a favourite method in attacking the board's orders and government action. Time after time it is said that some action taken which hurts someone, or, in other words, which does not enable him to make as much money as otherwise he would, is in the interests of Quebec as against Ontario, or of Ontario against Quebec, or in the interests of the east as against the west or of central Canada against the maritimes and so on. Very often it is not so. I do not know whether it is so in this case because I do not know the facts.


Howard Charles Green: They do not say it is a case of the east getting too much; it is the small packer against the big packer.


James Lorimer Ilsley: But it is put on the ground of territorial discrimination pure and simple. There may be something in it, there may be nothing; no one knows until he finds out what the complaint is. I do not think it should have been brought up in this house until we knew.


UNITED NATIONS MUTUAL AID-ADMINISTRATION STAFF
Mr. CLARENCE GILLIS (Cape Breton South):: There is a matter that I should like to bring to the attention of the Minister of Munitions and Supply (Mr. Howe). It is in reference to a question in my name on today's order paper, No. 39, which I asked previously in slightly different form. I am supposed to have received an answer to that question to-day. The answer to-day is merely this:
Answered by the minister on page 1830, Hansard, column 1, April 5, 1943.
I turn to that page. The question was:
Is Karl C. Fraser, formerly of Nova Scotia, to be employed by the administration of Canada's billion dollar mutual aid (Canadian lend-lease) programme?
Then there are five or six further points. The answer at that time was as follows:
This refers to contemplated action. The answer must be that the action to be taken will be made known in due course.
At the time that answer was given the wording of the question was such that the minister's answer was correct. I changed the question and put it back on the order paper. I asked if he was now employed by that particular organization. The reply received to-day is not an answer to the question at

Income War Tax
all. I would ask the minister to check this matter further. It looks as if someone is trying to be smart.


Mr. MacNICOL:: They are just trying to give you the run-around.


REFERENCE TO QUESTION PASSED AS ORDER FOR RETURN-H.M.C.S. &quot;CHIPPAWA&quot;
Stanley Howard Knowles: I rise to a question of privilege. During the question period to-day I asked the Minister of National Defence for Naval Services (Mr. Macdonald) why the answer to question No. 4 on to-day's order paper, was made an order for return rather than answered in the usual way and placed on Hansard. I think Your Honour will recall that the minister's response was that the answer was too long to be placed on Hansard. I have now secured the answer, which is contained in sessional - paper No. 221A, and I find that apart from two or three lines of heading it consists of thirty-one lines of material. That could have been put line for line, the long way on the page, on less than a page of Hansard. I feel that the answer which was given me infringes upon the privileges of this house.
I do not wish to take the time to read the material obtained in this report, but it relates to a matter concerning which I have already asked other questions, because there is considerable interest in it in the city of Winnipeg. I would ask that the house now give unanimous consent to the placing on Hansard of the table contained in this return, sessional paper No. 221A.


James Lorimer Ilsley: I submit that this is not a question of privilege. The rule is well established that it is within the discretion of the government whether or not an answer to a question is made an order for return, and it is not an infringement of the privileges of the house if the minister exercises a discretion. It may be ground for observation in regard to what the minister has done, but it is not a question of privilege, and I submit that this is not a case in which at this stage the house can be asked to give unanimous consent. The incident is closed; the question has been made an order for return, and the hon. gentleman has the information.


Thomas Vien: The hon. gentleman has asked for unanimous consent, but unanimous consent has not been given; therefore he cannot place the table upon Hansard.
Motion agreed to and the house went into committee of ways and means, Mr. Bradette in the chair.



INCOME WAR TAX ACT

[Stage Direction]
Resolved, that it is expedient to amend the Income War Tax Act and to provide:
1. That in respect of the taxation year 1942 the income tax liability, of taxpayers other than corporations, under subsection 1 of section 9 of the Income War Tax Act, in respect of earned income and in respect of investment income up to $3,000 shall be one-half of the amount calculated according to the schedules therein specified.
Mr. FRASER (Peterborough West):: I
noticed in the press last week that employers must now give their employees a statement of income. I do not think the minister has said anything in regard to that. This press report states:
The revenue department ordered Friday that all employers, on or before May 31, must furnish each of their employees with a form showing the salary or wages paid to that employee during the preceding calendar year and the amount of tax deducted or withheld in respect of that salary or wage.
In subsequent years employers must furnish their employees with similar forms by the end of February.
On an employee leaving his job, the employer shall, if the employee requests, furnish the employee with a statement showing the amount of salary or wages paid to the date of cessation of the employee's job and the amount of tax deducted or withheld.
The order was published in the Canada Gazette.
When we were on the budget resolutions last year and, I believe, the year before I asked a number of questions as to what was being done in regard to those employees who did not have incomes of more than S660, if single, or SI ,200, if married, and I wonder if the employers will also have to send statements to their employees who have left their service, because there has been quite a transfer in various plants. Some men may have been in one plant the year before last and in another plant last year, or they may have been in one plant for only six months. Would the minister make a statement in regard to what has been done in respect of these men?


Mr. GIBSON :: The regulation just read was recently instituted in order to ensure that each employee would be given information at each pay period as to the amount of deduction that had been made on account of the tax. In regard to the deductions made from employees who did not receive taxable incomes, namely, $660 a year, if single, or $1,200, if married, arrangements have been made to refund the amount of tax deducted in 1942. A special form has been prepared; the employee takes it to his employer and has the details of deductions filled in; then the employee completes the form himself, and a speedy refund is being made of the tax deducted last year.

Income War Tax


Gordon Knapman Fraser: What does the minister mean by "speedy"? I know of some who have had requests for returns pending for the last eleven or twelve months.


Colin William George Gibson: Not in connection with these taxes deducted from people who were not taxable last year.


Gordon Knapman Fraser: I am speaking of 1941, even.


Colin William George Gibson: There are two entirely different questions involved. In this case we are not waiting for the man to file an individual tax return; we are not calling upon him to file that return, which normally would not be filed until June of this year. We are accepting the statement by the employer that the man did not receive more than S660 or $1,200, and we are making the refund on the basis of that statement. These refunds will be made at once. In connection with the refunds for 1940-41, it has taken a considerable time to repay them, due to the fact that we have had gi'eat difficulty in increasing our income tax staff quickly enough to take care of them, but I understand that about ninety-five per cent of the refunds for 1940 have been made, as well as a very high percentage of the 1941 tax refunds, I think seventy-eight per cent.


Gordon Knapman Fraser: The minister mentioned "each pay period", but this says, "at the end of the calendar year." That would be a definite statement which the employee would get at the end of the calendar year?


Colin William George Gibson: At the end of the calendar year the employer must notify the department. Before going further, I might explain that within a week after each pay period the employer must turn in to the department the money he has deducted on account of these taxes. He sends in the money, but he does not at that time give the department the names of the employees from whom it has been deducted. At the end of the year the employer sends to the department the names of the employees from whom deductions have been made, at the same time notifying each employee of the amount of tax which has been deducted during the year. In that way the employee is able to include these deductions on his return as a set-off against his individual tax.


Gordon Knapman Fraser: What about the employee who has left that plant; what chance has he to get a statement of what he has paid in?


Colin William George Gibson: The employee, when he leaves, should apply to his employer for a statement, or he can write in and get the

statement from the employer at any time. The employee himself should ask for it from his employer, because otherwise, while the department would have the information, the employer might not know where to find the former employee.


Thomas Langton Church: Representing a taxpaying city which contributes a very large percentage of these income taxes, I wish to place before the committee the pattern of this pay-as-you-go plan. In my opinion the principle of paying the arrears of 1942 without further time allowed, is not fair to the small taxpayer with a fixed income. He has already made commitments in connection with real estate, insurance, mortgages and so on. How is he to pay the compound income tax, the balance of 1942 and the tax of 1943? It is too heavy a load1. I do not know how he can carry the burden. The farmers receive much better treatment. I have no objection to their getting all they can, but the fact is that they pay no income tax. A return was brought down the other day with regard to the farmers who pay income tax. Only 1,458 farmers pay income tax, or $150,000, all told. I contend that the principle contained in resolution S should be incorporated in resolution 1. There should be equality of treatment as between the urban and the suburban man in connection with payment of these arrears. The time allowed for the payment of the 1942 tax, is not enough; at least there should be a better opportunity to pay this. The farmer is permitted to carry forward for two years any farm losses that there may be, and that principle should be incorporated into resolution 1 and made to apply to industrial workers.
The small industrial workers cannot continue to carry their present burden. The plan may have been all right in theory, but it will not work out in practice. Everybody should pay his proper income tax. There are many farmers who should be paying an income tax. Everybody should pay, not just some. The industrial worker is not in a favoured position; his job is here to-day and gone to-morrow.
They would not adopt this plan in Washington. When I first came to the house I brought up this income tax with the late Mr. Robb, and he was of opinion that we were going too far in taking it all from the municipalities. The municipalities are starved; they cannot carry on with their revenues taken away. How is a man to pay his real estate taxes, his insurance and his mortgage payments all at once, under this budget plan. There are no houses available in Toronto. The soldier coming back from the war cannot get a house. Under tins plan no one will be able to own

Income War Tax
or to buy a house. These added burdens will mean wholesale confiscation of property. I know what I am talking about because I have been connected with municipal affairs for a long time. I know what a hardship it will be for the workers in industry to pay these taxes. I referred to this matter this afternoon. I have great respect for both ministers, but I think they will find it will be impossible for the people to pay these 1942 arrears in the time allowed. They rejected the Ruml plan in the United States. That country does not have a sales tax. Sales tax legislation has been before congress for five or ten years and they have rejected it every year. How is the industrial worker to pay his 1942 and 1943 taxes compounded? I think the ministers have been a little too bashful in connection with publicity. They have a good man in the commissioner of income tax. He comes from Toronto and he knows something about these matters. He is an educated man possessing high talents, but I say to him that I do not think this plan is workable, without further time to pay.
More time should be given to pay these arrears. When a woman is working for $5 or $10 a week, either at domestic work or in a factory, in order to help her husband in keeping their little property, she should not have to pay it all out. Many farm boys and girls have gone to work in munitions plants, and now they are sending out high-school students to take their places. Even the civil service is finding it hard to pay these taxes. It used to be said of Toronto that sixty-four per cent of the people owned their own homes, but now nobody wants to own real estate. They want to get rid of it because they are finding they cannot hold it and the rent control rains property holding. This is simply combining two years' income tax, and it will mean wholesale confiscation of property, because both income taxes and insurance cannot be paid together.
Mortgages will be foreclosed. There are other ways of getting this money. I think the present generation is suffering enough in flesh and blood. This money could be obtained on 1942 arrears by borrowing. If the government is able to borrow at one per cent or less, then at least a better part of these 1942 taxes should be cancelled. That is what should be done instead of promising the people a gold brick. That is all that this resolution 1 is. The people do not understand. We all know of the great publicity which Donald Gordon has and the money which he and his cohorts of advertising people spend on billboard advertising and page ads in the newspapers 72537-123}
and press officials. The minister is too bashful about this; he should spend some of his money on publicity, to let the people know what all this means.
Every person should pay his proper tax. We got into this war and we have to finish it. This form of duplicate taxes is reacting upon the public schools, the separate schools and the high schools and on education as well as on the hospitals. Nobody will have a five-cent piece to spend. How will they be able to pay the different forms of taxes? It cannot be done. More time should be given to pay the 1942 taxes. The people should be given at least six months more, in 1944, to pay. They are so far behind now they will never catch up.
Our soldiers are fighting for $1.30 a day. They find that they cannot hold on to their little pieces of property. Many of their mortgages have been foreclosed. I know of properties which cost $25,000 or $30,000 selling for as low as $7,000. When a man rents his property a tenant may ask for a new furnace or something else, and he is backed up by the force of law and rent control, so that no one wants real estate. Some people have been very heavily fined for technical and minor breaches in the Toronto police courts. They can be fined up to $5,000 by these control people. They have young lawyers handling these cases, many of whom should be at the war. Poor women are being fined $5 or $10 or $100 because they buy half a pound of tea they should not buy.
Let us have equality of treatment for the farmer and the city man under this resolution.. The department should not have touched the Ruml plan at all this year; they should have waited for another year in order to see the results. Canada is the highest taxed country in the world to-day. Great Britain has no sales tax, and yet she is bearing the brunt of the war. She is now receiving fine help from her ally in Washington, but neither Washington nor London has sales taxes. This is all reacting on the people in a way never thought of in the olden days. I do not know how the working classes are going to live. It would have been far better for the war if more time had been devoted on Monday, Tuesday and Wednesday to a discussion of these principles of taxation.
I regret having to make these observations, but I have studied this matter and I know something about the taxation system. The municipalities are simply headed for extinction. The whole constitution will have to be changed to protect provincial and municipal autonomy. They have no revenue; they cannot put up a new door or do a thing. The

Income War Tax
municipalities have been holding down their taxes in a wonderful way. Resolution 1 should be recast and the people given more time to pay these arrears. With the load they are forced to carry the people are worried to death. Talk about freedom from fear; resolution 1 will put more fear into the hearts of the people than anything else I know of. It is worrying the people to death. I know of one man in the constituency of the hon. member for Davenport who died the other day. There are many who cannot make ends meet and are worrying themselves to death as to how to meet taxation. They have been put to extra cost with the heavy winter that has just passed.
The ministers are fine men; they possess many human qualities, and I ask them to give the people more time to pay these 1942 arrears, and at a lower rate of interest.


Mr. ESLING:: There seems to be a number of interpretations of resolution 1. So far as investment income is concerned it is clear enough that one-half of the tax shall be paid up to $3,000, but so far as earned income is concerned it is not quite so clear. It would be perfectly clear if it read that the tax on one-half of all the earned income shall be forgiven. May I ask the minister whether "up to $3,000'' has any application so far as earned income is concerned?


James Lorimer Ilsley: No, it has not. The $3,000 relates to investment income. Half of the tax on all earned income and up to $3,000 of investment income is forgiven. The rest of the investment income is taxed. There is no forgiveness in respect of that.


William Kemble Esling: So that it matters not whether a man's earned income is $4,000 or $10,000, one-half of the tax is forgiven? Is that correct?


James Lorimer Ilsley: That is correct, yes.


William Kemble Esling: May I ask the government if they do not think they would be doing a service to make a national appeal to the provinces and the municipalities against any increased taxation? Many of the men overseas are home owners, and it seems to me that we might give them a more generous greeting when they return home than an increased lax bill. The taxes on homes and real estate in general are now so heavy and the restrictions as to rentals, sales, and improvements are so many, that it would not be unreasonable to have the taxation of municipal property come under the prices board just as so many other things do.
[DOT]


James Lorimer Ilsley: The government of Canada should be careful not to interfere in the affairs of provinces and municipalities to any greater extent than they feel necessary. I have made it very clear during the last two or three years that this government is most anxious that expenditures by other governments, provincial and municipal, be reduced to the minimum. That is the aspect of the matter which interests me more than the taxation. A reduction in taxation perhaps would follow. It might come anyway as a result of their increasing revenues. I know that some municipalities are reducing their taxes. But I do not know that an appeal from the dominion government to the provinces or to the municipalities not to raise their taxes or to reduce their taxes would be proper. I am most anxious that they keep their expenditures down to the irreducible minimum.
I have an amendment to this resolution, Mr. Chairman, which I should like to place before the committee now. It is as follows:
That resolution No. 1 of the resolutions to amend the Income War Tax Act be amended by adding the words "and trustees taxable on income accumulating for unascertained persons or persons with contingent interests, or income being capitalized in the hands of the trustees" after the word "corporations" in the third line thereof.


John Ritchie MacNicol: How will it read then?


James Lorimer Ilsley: It will read:
That in respect of the taxation year 1942 the income tax liability, of taxpayers other than corporations and trustees taxable on income accumulating for unascertained persons or persons with contingent interests, or income being capitalized in the hands of the trustees, under subsection 1 of section 9 of the Income War Tax Act, in respect of earned income-
And so on down to the end of the resolution. That makes it clear that there is no forgiveness of any part of the tax on the income of trustees in respect of the income accumulating for unascertained persons or persons with contingent interests, or income being capitalized in the hands of the trustees.


Colin William George Gibson: I move accordingly, Mr. Chairman.


Mr. ROSS (Calgary East):: By the 1941
act employers were required to deduct the income tax from the earnings of their employees and turn the money over to the government. That has been done in a number of cases. There was also a provision in the act to the effect that this money could be reclaimed in the event of the employee appearing not to be taxable if his earnings were less than $660 per year. In that case the money was to be

Income War Tax
repaid to the employee, provided that the taxpayer applied in. writing for such refund within twelve months from the close of the calendar year in which the amount was collected. There are cases in which the employee did not apply for repayment of this money within the twelve months, and the money is being held by the government. Will the government consider extending the time for repayment of the money so collected so that these employees can have the money that is justly theirs? I say it is theirs because, although the money was deducted from them, they were not taxable, their income being less than $660 for the year. I took the matter up with the officers of the government, and1 they are holding the money up to the present. Will the minister consider extending the time so that these people can get the money that is justly theirs?


Colin William George Gibson: That matter has already
received consideration, and a recommendation has been submitted to council that the time be extended so that those who have not submitted their applications for refunds within the twelve months will not be precluded from receiving a refund. An extension of a further six months has been recommended.


Thomas Langton Church: Will the minister give me a reply to the observations I have made?


James Lorimer Ilsley: If the hon. gentleman will
look at what I said last night in introducing this resolution, he will see why we thought that a forgiveness of fifty per cent was the appropriate amount. I understood him to argue to-day that a longer time should be given for payment of the tax, if any, unpaid on the 1942 liability. In a great many cases it is all paid and more than paid, so that there will be refunds from the crown to the taxpayer. In other cases there will be something to be paid by the taxpayer to the crown. The date when the unpaid portion is due is June 30, 1943, when he has to make his returns. He has to pay one-third then, and he has the rest of the year within which to pay the other two-thirds, without interest.


Thomas Langton Church: I call to the attention of the minister a return he presented to the effect that income tax is paid in all Canada by only 1,480 farmers, in the total amount of $150,000. Industrial workers and women who do not make any more than many farmers have to pay income tax. Why should the tax not apply to the farmer as well? He has the same income, and he gets protection which is extended to nobody else. I cannot understand why he does not pay income tax.


James Lorimer Ilsley: The farmer is subject to
income tax just as everyone else is.


Thomas Langton Church: There is no equality of treatment. It is most unfair.


John George Diefenbaker: I am sure that the government does not intend in any event to make a capital levy. But that in effect is what it does under section 3, paragraph (g), of the act, which describes income, in part, as: Annuities or other annual payments received under the provisions of any_ will or trust, irrespective of the date on which such _ will or trust became effective, and notwithstanding that the annuity or annual payments are in whole or in part paid out of capital funds of the estate or trust and whether the same is received in periods longer or shorter than one year.
I should like to know from the minister- and I will ask several questions now, so that he can answer them all at one time-whether consideration should not now be given toward removing that section from the definition of income, because of the anomalous result that those who receive shares from estates in annual amounts are subject in effect to income tax on capital. I believe the point has been raised before, but as yet no satisfactory explanation has been given by the minister as to the reason for that anomalous provision.
Mention was made by the hon. member for Kootenay West (Mr. Esling) of the necessity of something being done on the part of the Minister of Finance (Mr. Ilsley) toward soliciting the cooperation of the provinces not to extend their expenditures during the period of the war. The minister mentioned that he was not concerned with provincial taxation as such, but that he was concerned that provinces should not increase their expenditures. I recently secured a statement showing the expenditures of the provinces, and these statistics prove beyond doubt that during the period of the war every province but one is increasing its expenditure almost by leaps and bounds. I have not yet heard an appeal from the minister to the provinces in respect of this tendency. At the expense of taking up a few minutes I will refer to the expenditures of the
various provinces:
Prince Edward Island..
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
1938	1941*
: 1,974,000	$ 2,194,000
1938	1942
11,658,000	14,380,000
193S	1941*
8,549,000	10,046,000
1938	1942
50,335,000	72,153,000
95,228,000	106.775,000
16,427,000	18,151,000
19,306.000	28,180,000
21,359,000	19,965,000
27,672,000	31,342,000
* Latest available statistics.
Income War Tax

It will be seen that Alberta is the only exception to the general tendency.
The minister has stated that he desires the cooperation of the provinces in keeping down their expenditures, and he has the right to ask for it. Many think to-day that under this modification of the Ruml plan there has been some forgiveness of taxation. I warn the minister that unless he gives a lead to the Canadian people and assures them that the government will see to it that value is received for money spent and that there will not be waste and extravagance, he will have a lot of difficulty.
I think he will agree that where there arc known instances of waste and extravagance they should be eradicated and discontinued at once. If the minister wants to make a success of his victory loan and collect the extra taxation in amount which is being imposed, by reason of the increased rates becoming effective this year, he will have to merchandise the sure knowledge to the people of Canada that waste, where it can be controlled, will end. You can sell the people the idea of sacrifice through taxation if you sell them at the same time the knowledge that needless expenditures will end.
It is not my intention to mention a great many instances of this nature, -but I desire to refer to the salaries paid to officials of the war information board and shown in the return brought down on March 2 in response to a question of the hon. member for Grenville-Dundas (Mr. Casselman). Reading those salaries over, no one can conclude that there is any effective control on the part of the Department of Finance of expenditures which are being made by boards in this country. I will not refer to many of these salaries, because I have other references to make which I wish to bring to the attention of the committee.
First, may I refer to Leo Casey, of the New York office. The information shows that he drew a salary of $13,320.


John Ritchie MacNicol: For doing what?


John George Diefenbaker: It states that he was adviser to the wartime information board.


John Ritchie MacNicol: A useless position.


John George Diefenbaker: His living allowance is placed at $2,836.05, and his travelling expenses at $748.33.


John Ritchie MacNicol: Nothing short of an outrage.


John George Diefenbaker: Then, again in the New York office, S. A. Freifeld, research economist in charge of the news desk, received a salary of $6,660, with travelling expenses of $53.42.


John Ritchie MacNicol: A fourteen-year-old boy could do that.


John George Diefenbaker: Next is Mr. H. R. Sutherland, photographic editor from Toronto, who is in charge of distribution of photographs and editorial feature material. His salary is $5,550; living allowance is $2,836.05, and travelling expenses, $440.55. Then, there are others, including J. H. Campbell in charge of the Washington office and its operations. Although he received no salary, his living allowance is placed at $8,103, and his travelling expenses are $427.50.


John Ritchie MacNicol: He must have lived in a royal palace.


John George Diefenbaker: Then, J. A. Oastler, assistant to Mr. Campbell, received a salary of $6,327, with living allowances of 83,241.20 and travelling expenses of $734.98. Then there is A. R. Sykes, who supplies information as to Canada's war effort to inquirers at Washington, and by mail to many parts of the United States. His salary is $3,463.20; his living allowances, $2,025.75, and there are no travelling expenses. There are many more very large salaries I could place on record. All the records touching the salaries paid by this board are sealed1 and embalmed in an order for return. In other words, the answer was brought down in such a way that the people generally do not become aware of its existence, except through press items. I repeat that the minister must be able to assure the people of Canada that things such as were revealed in the return I have mentioned shall be discontinued.
I now come to another item in connection with overexpenditures, a matter to which reference has been made within the past few days. I refer to hospitalization at Victoria, British Columbia. The Department of National Defence wished to secure medical accommodation at that point. They were offered the municipally-owned Jubilee hospital, and could have built an additional wing of 250 beds at a cost of $250,000, such sum to be paid by the government. Instead of doing that, the authorities proceeded to build an addition to the naval hospital, to build a new hospital for the air force at Patricia Bay-


Mr. GRAHAM:: On a point of order; is the hon. member in order in discussing this matter, when it could be discussed under an appropriate item in the estimates? Hon. members are anxious to expedite the business before the committee.


The CHAIRMAN:: There is no doubt that the hon. member for Lake Centre is taking a great deal of latitude. I have allowed con-

Income War Tax
siderable latitude throughout the discussion.
It is not my wish to discipline or to attempt to moralize but I hope hon. members will keep as closely as possible to the resolution before the committee.


John George Diefenbaker: I shall end it, then, simply by showing the facts.


Mr. SLAGHT:: The resolution we are discussing is, as I understand it, neither a spending nor a taxing resolution. It is an exemption resolution. That being so-


Gordon Knapman Fraser: It is a taxing resolution, too.


Arthur Graeme Slaght: I trust there may be an appropriate place where my hon. friend can discuss the matters, the discussion of which he has just concluded. I believe, however, we shall make faster progress if we proceed in an orderly fashion.


Roy Theodore Graham: Let us get ahead with the resolution.


Joseph-Arthur Bradette: I have given my ruling.
I know hon. members will agree when I say that during the years I have been in the house a certain amount of latitude has been allowed in discussions of this kind. I hope and expect that hon. members will not take liberties beyond that. I know they are trying to do all they can to follow the rules.


James Lorimer Ilsley: I do not know whether this point is debatable, nor do I know why I did not raise a point of order earlier. Perhaps it was because I was so much interested in what the hon. member was saying. But I must point out that if under these taxation resolutions the whole field of war expenditures and nonwar expenditures can be discussed, then the rules of order would seem to cease to exercise any restraint. I am afraid that if we do not exercise a little self-discipline, and have that supplemented by the Chair-and I say this respectfully-we shall literally never finish this session. We shall be here twelve months in the year.
Under this resolution the hon. member is speaking about expenditures in Victoria. Then, he was talking about the salaries of employees in New York and Washington. He ingeniously dragged in those matters by saying that if I did not see that these expenditures were cut down I would not collect the taxes. I raised the point the other day that, in connection with another subject, the hon. member's presentation was too artificial and too remote. I am beginning to have a tremendous admiration for his ingenuity, but certainly not for his soundness, if he is seriously advocating that the present discussion is in order.


Joseph-Arthur Bradette: I appreciate what the
minister has said, and I have made my ruling.
I know the committee will realize it is absolutely impossible for me to state definitely where an hon. member should stop. The onus is really put on the individual member to see to it that he stays within the rules. There is no doubt that the hon. member for Lake Centre has been going far afield.


John George Diefenbaker: The Minister of
Finance has often asked for examples of overexpenditure, waste and extravagance. I thought I would give him some details; but if the minister does not want them, and if he does not want the assistance I think he should have when putting new taxation into operation, then I will not press the matter.
May I conclude by finishing the reference I was making. I shall not go on to the other examples I have before me. I believe I was pointing out what was done at Victoria, in so far as hospital beds were concerned1. By a course being followed other than that which I think was the proper one the cost to the government was $5,000 a bed, as against $1,000 per bed accommodation.


James Lorimer Ilsley: Mr. Chairman, I rise to a
point of order. I am asking seriously for your ruling as to whether the words the hon. member is now using are in order under this resolution.


Joseph-Arthur Bradette: I must rule that the
words of the hon. member for Lake Centre are not in order under the present discussion.


John George Diefenbaker: I should like to know whether or not my question was in order, whether under the head of income a capital levy would in effect be made, under the section that I have mentioned.


James Lorimer Ilsley: I think that is in order.


John George Diefenbaker: Then, I would ask the minister whether consideration will be given to removing that anomaly? It is most unfair to those who years ago were in receipt of capital from an estate payable by annual payments, that that capital should be subject to income tax. I do not know the circumstances under which the section was introduced, but there have been brought to my attention a number of cases in which widows are actually paying income tax upon a share of the deceased husband's estate by reason of this section.


James Lorimer Ilsley: I am informed and believe that the English statute taxes annuities and annual payments. There has been a great deal of litigation as to what that included.
Income War Tax

I believe it does not include term annuities; it does not include annual payments over a particular length of time, one year, two years, three years or anything like that, even though one would think so by reading the section.


John George Diefenbaker: Who gave the
interpretation?


James Lorimer Ilsley: I am informed that that is the effect of the English decisions, that annuities and annual payments-just in those words-mean annuities and annual payments for life. Our provisions are divided. In the early part of the section there is a provision taxing contractual annuities, those annuities one buys, not term annuities but annuities for life. In that case it may well be argued, as the hon. gentleman has argued, that in the annuity there is a capital element, that part of one's capital is coming back.


Mr. JACKMAN:: Is there any argument to the contrary?


James Lorimer Ilsley: Oh, yes, certainly, the
English cases are full of it, that w'hen one buys an annuity it is an exchange of a fund for a flow, that one disposes of his capital and takes in return income.


John George Diefenbaker: Is there such a provision in the English act as the section to which I refer, 3 (g) ? There is section 3 (b), which refers to annuities or other annual payments received under the provisions of any contract except as in this act otherwise provided. But that is not the section to which I am referring.


James Lorimer Ilsley: I shall have to get the English act here, so that we shall know what we are talking about. But I was saying that my information is that the English act taxes annuities and annual payments simply, and that we, instead of one section taxing annuities and annual payments, have two subsections: 3 (b), which taxes contractual annuities, and 3 (g), which taxes annuities and annual payments under trusts and wills. The hon. gentleman has spoken about the case of the will. Some cases do arise under that which are hard; there is no doubt about that, and we have given a great deal of consideration to whether we can effect some amendment of section 3 (g). I think I can say it is my intention to introduce some amendment to that section.


Harry Rutherford Jackman: This session?


James Lorimer Ilsley: This session, but it will not go as far as the hon. gentleman urges. He is asking that the tax be removed from annuities and annual payments under wills. We would fMr. Ilsley.]
not do that. But we may go part way, or we may do something about the retroactive feature; I do not know which yet; I have not finished giving consideration to it. But that is not a matter to be dealt with by the resolution. It is not the imposition of a tax; it is relief from taxation, to be dealt with after the resolution is introduced. I shall expect it to be very carefully examined by hon. members, because it is a fairly wide question.


Mr. McIVOR:: I have just a brief word to say. A year ago I interviewed the Minister of National Revenue in respect of certain criticism which came to me from Fort William as to difficulty in filling in the income tax forms. I wish now to thank him that those whose income is under S3,000 are to get their income tax forms filled in by someone under the minister. This is most commendable because these forms are very difficult to fill in. With all my experience as an accountant I made a mistake of $15 last year, but I made it on the right side and now I am $15 to the good.
I should like also to commend the minister for the pay-as-you-go plan. This is like painless extraction of teeth; you pay your income tax and do not know it, and you have your cheque after it is all over. I thank him for it.


Stanley Howard Knowles: I should like to ask the minister a question relating to resolution 1. Is it possible under this provision that a person who has earned income and investment income, provided that investment income does not exceed $3,000, can be forgiven half of the tax on the total amount?


James Lorimer Ilsley: Yes.


Stanley Howard Knowles: Take a hypothetical case. Here is a person with $10,000 earned income and $3,000 investment income, or a total of 813,000; he gets fifty per cent of the whole tax forgiven?


James Lorimer Ilsley: Yes.


Stanley Howard Knowles: Whereas a person who
might have $4,000 investment income and nothing more will be forgiven fifty per cent of the tax on only $3,000?


James Lorimer Ilsley: That is correct.


Stanley Howard Knowles: It seems rather unfair that a person with $13,000 income is forgiven fifty per cent on the whole amount while another person with only $4,000 income is forgiven fifty per cent on only $3,000. Would the minister explain?


James Lorimer Ilsley: If the hon. gentleman will look at the budget speech he will see the reason for making a distinction between in-

Income War Tax
vestment income and earned income. One course would be to make no distinction whatever, to forgive half the taxes on all income. We do not want to do that.


Harry Rutherford Jackman: Why not?


James Lorimer Ilsley: Well, I know my hon. friend would want it.


Harry Rutherford Jackman: Not at all; it makes very little difference to me.


James Lorimer Ilsley: We did not want to do that for the reason I cited in the budget speech. Anyone in giving reasons in favour of this plan for forgiving half the tax always puts it on the ground that if something were not done the person earning income would come to a point where he lost his job, or was retired, or died, in which event he would have nothing, or perhaps would have nothing. In a great many cases he would have nothing out of which to pay this large amount of unpaid income tax. That was the ground always put forth as the reason why something should be done to relieve his widow and children from paying perhaps thousands of dollars of income tax, or to relieve him if he had been earning, say $10,000 a year and then went on pension at $4,000 a year, and found himself obliged to pay the full income tax on the $10,000. The same considerations do not apply to the person who has an investment income, because normally the source of his income remains unimpaired whether he retires, whether he loses his job or whether he dies; the source of his income, the capital fund out of which his income is derived, is still there. That is why we made the distinction, and I think it is sound enough. It is not very popular in some quarters, perhaps; nevertheless I think it is sound.
The hon. gentleman has, I think, in mind another distinction, namely, a distinction on the basis of the amount of income. Perhaps this is not so, but from what he says I gather that he would perhaps argue in this way. If you are making a division at $3,000 or $4,000 or $5,000, go by the man's income; make no distinction between investment income and earned income; but forgive, let us say. the tax on incomes up to $3,000, or up to $4,000 or $5,000, and not above that. I gave a great deal of thought to that point, and there was some advocacy of that course of action in the press, though I must say not very much. However, I do not think it is possible to select in regard to earned incomes a line which will have any logic. The higher a man's income, the higher the proportion of the tax that he pays. If a man earning $10,000 were



TMW - 124

[Stage Direction]
saddled with his entire income tax and then moved on to a current basis, he would have a terrific load to carry in the year 1943. He would be paying the 1943 tax, and he would be paying the whole of the unpaid1 part, which might be fifty per cent, sixty per cent or seventy per cent, of the 1942 tax. Because he is earning a $10,000 income he is paying at a high rate, and I think it would be simply class legislation to draw a line on the basis of income. However, I think it is sound legislation to draw a line between investment income and earned income on account of the fact I have mentioned, namely, that presumably the source of the investment income is constant. It is there; it is not dissipated; it does not disappear when death, retirement, illness or loss of position takes place.
Stanley Howard Knowles: Apart from the fact that the minister has tried to set aside what I had in mind, I must say that he has stated very clearly the position I felt should be taken in this matter. I take it that he has given this question consideration and has turned it down; nevertheless I should like to press for consideration of this idea, that the forgiving of the tax on fifty per cent of investment income up to S3,000 should apply in cases where that is definitely the only income, but should not apply where the total income of the taxpayer is in the higher brackets, say at whatever figure the minister might arrive at.


James Lorimer Ilsley: Well, if I am correct in my position that we should make no difference between amounts of earned income, that all earned income is entitled to this concession, then I do not think we should make a difference between combinations. I think then we just have to consider what exemptions we should extend in connection with investment income. There are some persons whose only income is investment income, and who must have some investment income in order to live.


Stanley Howard Knowles: I am not objecting to
the forgiveness in those cases; I am objecting to a man with an earned income of $10,000 getting fifty per cent exemption on that and also getting a fifty per cent exemption on his investment income up to $3,000.


James Lorimer Ilsley: The hon. gentleman would
suggest something else, that as the income went up the $3,000 should go down?


Stanley Howard Knowles: That is right.


James Lorimer Ilsley: Well, it is worth considering.


Stanley Howard Knowles: I should be glad if the
minister would consider it.



WSVIBED EDITION

[Stage Direction]
Income TTar Tux
Arthur Graeme Slaght: I have a suggestion to offer to the ministers and perhaps to the commissioner with regard to the wording of the resolution, which in its present form has, I think, aroused very natural inquiries such as those put forward by the hon. member for Kootenay West. To make the point perfectly clear, if it were thought worth while I think, if you inserted the words "up to $3,000 in respect of investment income" immediately after the words "in respect of earned income and," you would remove any ambiguity that may exist in the present system. You almost never get to a court in regard to income tax, but you might clarify the resolution and bring it into full accord with the intention which has been made very clear by the minister.
There is another point I wish to mention, and if I am in order I should like to discuss it. I refer to the point raised by the hon. member for Lake Centre, in regard to what the minister called annuity income, which I understood the minister to say could be discussed under this resolution. The minister indicated that careful consideration would be given to perhaps one or both types of so-called annuity incomes. In connection with his giving that consideration may I just point out one case. Take an instance where a father makes a bequest of, say $40,000 as a trust to his executor for the support of his daughter, perhaps an unmarried girl who cannot earn her own living, but instead of having that amount paid to the daughter he creates a trust and leaves it in the hands of his executor to be paid to her at the rate of $2,000 a year. The true character of such a bequest is not income at all; it is a capital lump sum bequest from the father to the daughter. All he does is to defer payment of it to her; but I understand that a recent case was brought to the attention of the very able commissioner in connection with a particular estate, and the ruling has been that under those circumstances this trust of $40,000 in the hands of the executors and paid at the rate of $2,000 a year to the daughter is taxed as though it were income, which means that one-third or more of the $2,000 is taken away from the daughter. The testator never had any such intention. That is not income at all; it is capital, purely and simply. I suggest that the minister might give serious consideration to that problem, because under the rulings that have been made with regard to the present wording of the act I understand this $2,000 is taxed as the income of an unmarried person, as though it were pure income.

Mr. ILSLEY; I am told that in such a case, if there were a bequest to a daughter and her heirs of $2,000 a year until the fund was exhausted, that would not be regarded as an annuity or as annual payments. If $40,000 were the amount, it would be a $40,000 bequest payable to the daughter at $2,000 a year irrespective of her death, and would not be taxable as an annuity under the English cases. However, if it went on to her death, then it would be an annuity.


Arthur Graeme Slaght: I appreciate that definition. My information was that in a given case the ruling had been that it was still treated as income. If I am wrong in that, then the matter does not need curing.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, April 8, 1943