Mr. McMASTER:

That is not the great point, I admit. If that is the only thing standing in the way of the Government's acceptance of my Bill, I would be willing

to go one step further and have it apply to the leader of the Opposition as well.

Mr. MEIGHEN:

It would be of no use to have the one without the other.

Mr. MACKENZIE KING:

Perhaps I

should say right at the moment that I should feel it distinctly in the public interest to have the provision apply to the leader of the Opposition.

Mr. MEIGHEN:

I really had not my hon. friend in mind; I was just leading through him to the other.

Mr. McMASTER:

A sort of oratio

obliqua. In bringing my remarks to a close,

I must thank the House for the kindly, friendly and patient attention that has been, given to my remarks. I am asking only that we place upon the Statute Book what I regard to be the best and the prevailing practice. I do not believe the right hon. gentleman (Mr. Meighen), who leads the Government to-day, is a director in a company. He indicates by a shake of the head that he is not. I know that the last leader of the Government, the present member for King's N.S. (Sir Robert Borden), resigned his directorships. I remember, shortly after he became Prime Minister, having to examine the books of a very small company down in Nova Scotia and seeing on the books that he had sent in his resignation because he had become a minister of the Crown. I know that the only directorship which my late leader, Sir Wilfrid Laurier, ever accepted, was in a mutual life insurance company. Therefore, I am asking this Government to accept legislation that will merely crystallize in the form of a statute the best prevailing practice. It may be said, of course, and it will be urged, perhaps in this debate, that we should leave this matter to the individual feeling of delicacy and propriety of the ministers themselves. That has not been done in regard to senators and members. Under the Senate and House of Commons Act, their obligation to refrain from bringing before the House legislation in which they are interested, as lawyers, for instance, is very clearly set forth, and their in*-ability to have an interest in a contract with the Government is also very clearly set forth. Therefore, that argument is offset by the fact that we have crystallized in the form of a statute the best prevailing practice as to members of Parliament, and I submit that what I ask for is right, and that it is calculated to enhance the honour and prestige of public men in this Dominion of Canada.

Sir EDWARD KEMP (Toronto East):

Mr. McMASTER:

He would not be disqualified; if he accepted the portfolio, he would have to resign his directorship. His directorship would not prevent his being chosen; but after he was chosen, he would have to choose between the retention of his portfolio and the retention of his directorship.

Sir EDWARD KEMP:

I quite understand that, but that, to my mind, is rather a technical argument. A man publicly has his name on his letter head or bill head or

whatever you like as a director of the company in which he is interested; he then becomes a member of a government, and he removes his name as director, and if he is asked across the floor of this House, if he is a director of this company, he says: "No," but practically his position is the same as it was before; he does not sell out; he cannot dispossess himself; he cannot sacrifice his rights; it is not likely that he would sacrifice his rights, and yet he may be in a position to be of great service to the government of whatever party it may be. My hon. friend probably did not have that matter which I have outlined as much in mind as he had what he termed interlocking directorates. If you stand several individuals up in line, all of them in different occupations and professions, how is it possible to say who is best qualified for Cabinet rank? A man might be a director in one or two or more financial corporations-let us get away from the smaller businesses- a government might be formed, and his services, because of his wider experience in the affairs of this country might be thought to be better than those of another man whose name is not connected with any corporation. The men whose names appear as directors of corporations are generally understood to be men who understand the affairs of this country as well as and, in most cases, have wider experiences in our country's affairs than other men, and consequently they would be more useful to this country. I cannot, therefore, see how you can pass a law to debar such men from becoming members of government in this country any more than you can pass a law saying who shall be members of government, and what occupations they shall hold in order to be members. My hon. friend gave some precedents in England, but the situation there is very different from what it is in Canada. Ninety per cent of the members of this House, whether they are in professions or in business, have risen from the ranks, and everybody, if he is looked upon generally in the community in which he resides, as a man of sufficient experience to become a member of a government, is supposed to be qualified in one sense or another for such a position. As I said when I rose, I did not intend to say more than a few words on this question, and I have not covered the subject at all; but it seems to me, notwithstanding the fact that the hon. member for Brome has approached the subject in what appears to be a very impartial way, his argument is full of inconsistencies.

Mr. JOHN H. SINCLAIR (Antigonish and Guysborough) : Mr. Speaker, I was struck with the speech of the hon. member for Toronto East (Sir Edward Kemp), but I think he has forgotten the fact that Parliament has already taken the step that he thinks is a hardship. Parliament has provided that a member of this House must not do any business with the Government. We have gone so far as to debar every member of the House of Commons in this respect. If my hon. friend will refer to the provisions of Chapter 10, cf the Revised Statutes, he will see that the most drastic provision to this, effect is made. My hon. friend's illustration of John Smith in his personal capacity, and John Smith Limited, does not apply, because even now if John Smith is not Limited he cannot be a minister and do business with the Government. He cannot be a member of this House and do business with the Government.

My hon. friend points out how difficult it would be to find a man to accept a position as minister of the Crown if he was prohibited from engaging in business. But we prohibit them already, because if John Smith is in business and becomes a member of this House, or a minister of the Crown, in his personal capacity he must not do any business with the Government. If he does, he becomes disqualified as a member of the House and as a minister of the Crown. So we have that prohibition already. Why should we make any distinction between John Smith in his personal capacity and . John Smith Limited? Why should we prohibit John Smith in his personal capacity from doing business with the Government, if we are not at the same time going to prohibit him as John Smith Limited? The same principle is involved in both cases. If my hon. friend is not willing to pass this Bill, I think he ought to be willing to repeal Chapter 10, of the Revised Statutes, which provides that John Smith must not do any business with the Government. I think, Mr. Speaker, that the proposal of my hon. friend from Brome (Mr. Me-Master) is sound. Shareholders are excepted under the law because, of course, it would be a hardship for a man of any means to have to dispose of his shares; that would be throwing away his property. But a director is in a much different position. My hon. friend from Brome has pointed out very clearly that it is the

duty of a director acting in a fiduciary capacity to try and get a contract from the Government for his firm; it is his duty to do everything he can to make money for the shareholders that he represents. On the other hand, it is his duty as a minister of the Crown probably to give the contract to somebody else. These are two conflicting duties, and I can see no great hardship in compelling a man who accepts a position as minister of the Crown to resign his directorship in any company he is interested in. My hon. friend from Brome has pointed out that that is the practice already with some members of this Government. Very recently my hon. friend the Minister of Public Works (Mr. McCurdy) after joining the Government resigned his position in the firm in Nova Scotia with which he was formerly connected. Similar instances have been pointed out by my hon. friend from Brome. The practice exists now. I think it is a good practice, and that it would be a good thing to have it embodied in the statutes.

Hon. RODOLPHE LEMIEUX (Maison-neuve) :

Mr. Speaker, I have followed

this debate with very great interest, and with my hon. friend from Toronto (Sir Edward Kemp) I commend the tone adopted by my good friend from Brome (Mr. Me-Master) in discussing this important question. While I have not gone deeply into the matter, I must say that I differ from my hon. friend from Toronto in the view which he takes of this Bill. He says that v men ought not to be debarred from joining the Government by the fact that they have large interests in limited companies and are directors on their boards. My hon. friend from Antigonish and Guysborough (Mr. Sinclair) has just cited the section of the Revised Statutes which debars members of parliament from entering into any contracts with the Government. But there is a more glaring instance. My hon. friend will also find that the Revised Statutes of Canada provide for the independence of the Bench. Some years ago this Parliament amended the Judicature Act to provide that judges who had been appointed directors and were drawing directors' fees in joint stock companies or in any other company must resign. I may be told at once that no judge was ever accused of being partial in his decisions because he was a director of a company. That may be the case, but there is a great principle involved in this matter, and it is that the public must

have absolute confidence in the integrity and probity of those who administer the law. It was for that purpose-that the public might respect the more the Bench of Canada-that this Parliament decided that judges should not be directors of any company. The legislation evoked considerable discussion at the time, and some of the judges protested against what they called this hardship being imposed upon them; yet public opinion ratified the action of Parliament. Every litigant approved of it because, as we say in common parlance, Caesar's wife must be above suspicion. Justice must be protected not only by herself-and I use the word "herself" because I see her living on the Bench, personified by the judge who administers the law- she must also be protected against her own self, and that is the reason why Parliament decided that judges should have no interests as directors of companies. I may be told that ministers of the Crown are not judges. True, in a sense; but they make the laws. They decide long before-hand what laws shall be introduced, and therefore it seems to me they have an equal, if not a greater responsibility than the judges themselves.

I might give another illustration to show how sensitive public opinion is in regard to those who administer the law. My right hon. friend the Minister of Justice (Mr. Doherty) knows that in our province -I do not know whether the same plan has been adopted in other provinces- the relative of a judge to the second degree is debarred from pleading before the judge, nor can any member of his firm appear before him. So intent is public opinion that justice shall be above suspicion. I commend again my hon. friend from Brome for his remarks this afternoon. This is a matter that applies to both parties, to ministers of the Crown of to-day, and to ministers of the Crown of tomorrow. It is in their interests that they should be protected against their own weaknesses; for we are all human. Public opinion should be saisfied tha^ they have no monetary interest which might conflict with their duty as ministers of the Crown.

I may be told, as stated by my hon. friend from Toronto a moment ago, that business men of great ability and of substance might be debarred from giving their country the benefit of their experience. Well, let me recall to my hon. friend first of all the fact that the salaries of the ministers of the Crown have been increased. But I put that aside and I say is not the honour of being a minister of the

Crown, the honour of being sworn in as a Privy Councillor, a reward by itself? In my humble judgment, no man should hesitate, when accepting that honour, to put aside his private interests. I think I am right in this, Mr. Speaker. I am glad to say that never since Confederation, up to the present time, has there been any reason on the part of the public to suspect the personal integrity of the Prime Ministers of Canada, and I include with pleasure in this statement the name of the right hon. gentleman who to-day as Prime Minister presides over the destinies of this country. But I say that it is in the interests of the ministers of the Crown, and of good government and of the good reputation of Parliament, that public opinion should be satisfied that there are no conflicting interests between ministers as such and any directors of private (concerns. Why, it is obvious that any day of the month a minister of the Crown who has charge of a large spending department- let us take, for example, the Public Works Department, the Department of Marine and Fisheries, or the Department of the Interior might be put in a very awkward position as between his fiduciary interests as member of a board and his public duties on the other hand. It may happen any day, and therefore I think, without having gone very deeply into the matter, that my hon. friend is living up to British custom, to precedent, and tradition in advocating this legislation. My hon. friend from Toronto spoke of the difference that existed between public men in this country and public men in the Old Country. Let me tell him that in the Old Country of late there has been a hue and cry in the public press and elsewhere against members of the House of Lords, ministers of the Crown-and that is not done very often with ministers of the Crown -lending their names as promoters or directors of boards. Mr. Speaker, if I were not afraid of hurting the feelings of any one, I could mention the name of a gentleman I have in mind who played a very great part in the history of the British Empire, a name which brought to his family and to his country much honour and glory. And yet that name was besmirched. Why? Because in a moment of weakness the bearer of that great name allowed it to figure in a promoters' scheme. I think of that name because it is so very eminent. But there are dozens and dozens of such names which have been lent to satisfy some promoter's greed. Now, do

you believe that it is making for the honour and respect of public life that such things should be? I should like to have this discussion go a little further so that we might hear both sides of the question. It strikes me, after having heard my hon. friend and the objections that were made by some of the hon. gentlemen on the other side-mild objections I must say-that this is a needed reform and one which is consistent with British traditions.

Mr. FRANCIS HENRY KEEFER (Port Arthur and Kenora) :

The manner in

which this discussion has been carried on shows clearly that there is no ulterior motive behind it. But I think that the hon. gentlemen who have been advocating this proposal have not given to it the fullest consideration which its ramifications warrant. I cannot see why a minister of the Crown should be compelled to resign his directorship in any company, whether they might or might not have anything to do with government business or with Parliament, unless you carry the principle to every member of Parliament. I would not object at all if it were laid down as public law that no member of Parliament should be a director in any company, if that were deemed advisable. Personally, I think it inadvisable, because there are thousands of companies that have no transactions with any of the offices of government. But to say that no Cabinet Minister should be permitted to hold any directorship in any corporation is going too far, unless you apply the principle also to members of Parliament. The public are well protected to-day by the independence of Parliament Act, Chapter 10. There it is laid down most specifically in Section 14 that no person, directly or indirectly, shall be allowed to have any interests in any contract or agreement, either through trustee or otherwise, if he is a member 'of Parliament.

Mr. PROULX:

Does the hon. member

think that that includes a member who is a director or has a controlling interest in an incorporated company? '

Mr. KEEFER:

As I understand, it includes any person. The Act reads as follows:-

Mr. PROULX:

I am referring to the

statute as at present.

Mr. KEEF.ER: Chapter ten?

Mr. PROULX:

Yes.

Mr. KEEFER:

Section 14 of chapter 10

says that no contract with the Government

is permitted if a person has any interest in it directly or indirectly. Then, section 18 says further that in every such contract there must be a clause providing that no member of Parliament is to have any share or interest in such contract, or commission, or benefit to be derived therefrom. Such is to-day expressly forbidden. There is a penalty and this qualification for any contravention of the statute. There is only one exception, you are allowed to be a shareholder. Now is it not the interest in the company as a shareholder, that should be in question? The attack is only made upon the principle of the minister of the Crown being a director. I think the Bill as drafted has not been carefully thought out. There are many things which might receive further consideration. Why should the Independence of Parliament Act be at all restricted and apply to only ministers of the Crown as directors when that Act strikes directly at every member of Parliament?

I see a great deal of force in what the member for Toronto said. If a man is carrying on a business as a partnership or as an individual, which might be a very large business, there is no interference. But if he finds it advisable to incorporate a company and to retain a seat on the board of directors in order to have some guidance of its affairs, why could he not as before incorporation, be a member of the government?

Mr. EDMOND PROULX (Prescott) :

I strongly approve the principles of the Bill presented by my hon. friend from Brome. The measure serves two purposes, one being to leave the minister free to devote his whole time to public business. I think that when a gentleman enters the Government of Canada he should be prepared to' devote his whole time and attention to the country's affairs. At the last session of Parliament the salaries of the ministers were increased so as to render them independent of their ordinary profession or calling, and to afford them a decent living. Another important purpose to be served by this Bill, which is perhaps more important, is to secure the independence of a minister so that his private interests or the interests of his friends, or of his company, should not conflict with the public interests. I would go further, and I would say that a minister should not invariably have to sell his interests in any company when he enters the Government. I would permit him to be a shareholder so long as his company did not do any business with the Government. But

the moment that company engaged upon any Government business the minister should be disqualified from remaining any longer as a shareholder in it. I would extend the principle of this Act to members of Parliament as my hon. friend from Port Arthur (Mr. Keefer) suggested. But I think my hon. friend misapprehends the meaning of section 10 of the Act respecting the Senate and House of Commons. Section 19 permits a shareholder in any incorporated company having a contract or agreement with the Government of Canada, except any company which undertakes a contract for the building of a public works. A few years ago I presented a Bill to this House to disqualify any member, or any Senator, from having a seat in Parliament if he were a director, or had a controlling interest, in any company doing business with the Government. During the war many companies, in which members of Parliament and senators were directors, or had a controlling interest, sold supplies to the Government. As my hon. friend from Toronto has said there is a great difference in the manner of carrying on business today compared with that of twenty-five or thirty years ago. To-day business is not so much done by individuals as by incorporated companies. At the time the Act was framed business was transacted mostly by individuals. The statute, as quoted by my hon. friend from Port Arthur, provides that no person directly or indirectly, or with any other, can do business with the Government, but it excepts any shareholder in an incorporated company. Well, I would not go so far as to disqualify a member of Parliament or a Senator who might be simply a shareholder in a company doing business with the Government. But I would disqualify a member of Parliament or a Senator who was a director, or had a controlling interest in a company which was doing business with the Government. If we want to preserve the independence of Parliament, and to have a Parliament independent of the Ministry, we should provide all the safeguards possible to secure that independence. When the Act was framed I believe such was the intention of its framers. But by reason of the fact that the method of doing business has been changed this independence is not fully secured, because incorporated companies in which members jf Parliament and members of the Senate have a controlling interest can do business with the Government. We know that some of these companies are one-man institutions

or family organizations; strangers have only a few shares in them to qualify as directors. I think more wrong has been done by companies doing business with the Government than by particular individuals. I strongly endorse the principle of the Bill now before the House, but I would go further and exclude members of Parliament who are directors and have a controlling interest in incorporated companies doing business with the Government. Two years ago, when I presented a Bill to have the statute amended in this respect, I was met with the objection that some members of Parliament might be directors of printing companies who publish newspapers, and if their newspapers published Government advertisements they would be exposed to disqualification. In the Act respecting members of the Ontario legislature I believe there is a provision excepting members of the legislature who are shareholders or directors of companies publishing newspapers which in the ordinary course of business contain Government advertisements. I would be willing to incorporate that exception in the Federal statute. We have a provision similar to that in our Municipal Act to prevent the disqualification of members of the municipal council who, in the ordinary course of business, do any printing work for the municipality. I think with these exceptions the Act could be safely amended, and that we should amend it and secure fully the independence of ministers and of members of this House and of the Senate.

Mr. EDMUND BRISTOL (Centre Toronto) :

I should like to ask my hon. friend

from Brome (Mr. McMaster) if he is aware whether there is any English statute of similar character to the one he is introducing? ,

Mr. McMASTER:

No.

Mr. BRISTOL:

I would have been surprised if he had found one because I recollect being in England when the late Lord Rhondda bought control of a nerve tonic called " Phosphozone," and although he was then a member of the British Government he promoted a company and put the specific on the market. He told how much good it had done his nerves and the nerves of others suffering from the effects of the war. That struck me as carrying things rather far. But I think it indicates that to-day there is no such statute in force in England as that now proposed by the hon. member for Brome. In this country we

Have had this Independence of Parliament legislation on the statute books, I suppose, for nearly fifty years without any change, and suddenly we get this bill of my hon. friend, which to me seems to be an unintentional reflection on members of the Government past, present or future. Ministers from time to time have usually been men of good standing in business and of high personal honour, and it has been the custom of this country and of Parliament to trust them implicitly, in the belief that they will give to the country their best service; and l think we can well trust to the honour of our ministers to give us the same faithful service in future as we have received in the past.

What my hon. friend from East Toronto (Sir Edward Kemp) is putting before you is, I understand, this: If a gentleman under the name of John Smith, or John Smith & Company, has an enormous business it does not matter whether it is a partnership or not, he has a capital of say, one, two, or three million dollars, and although he may be dealing in every thing that the Government wants, he cannot enter into any contract with the Government because our Independence of Parliament Act prevents it. But adopting the system under which most modern business is conducted, he forms a joint stock company. Then under my hon. friend's Bill as brought in to-day that man on becoming a Minister of the Crown would have to resign as president or director of that company. When all is said and done, we want to get into Parliament men from all walks of life. It is the successful business men of the country who have arrived at an important position in the business world that a Prime Minister is anxious to bring into his Government, and it would be very hard indeed if any business man had to resign even from the directorship of the company which he has made a success. It is not in the public interest to ask him to resign from directorship or control of his company. So long as we are protected by the statute as it is, and so long as a member of Parliament who is a partner in a firm, as such cannot enter into a contract with the Government, and so long as a member who is a shareholder in a company cannot have his company take a contract for any public works, it seems to me the public are amply protected. On the whole I think it would be better to leave this matter to the good taste and good sense of present and future ministers rather than to pass special legislation to deal with it. It is certainly very

much in the public interest that a minister's conduct should be above reproach. I think in the past our ministers have been men of the highest standing, and I am sure that that standard is not likely to go down but rather will go up. For myself, I think it will be better to leave the law as it is.

Mr. PROULX:

Does it make any difference between a contract for public works and a contract to supply a large amount of goods?