Explain.

Mr. RHODES:

Mr. Speaker, the objects sought to be attained in the passing of the Farmers' Creditors Arrangement Act are well known to the house. In a word the main object was to try to compose the debt structure of a farmer to the point where he could meet his obligations and remain upon the land as a producer.

I think it is fair to say that the act has met with a remarkably favourable reception throughout the country. I desire to pay tribute to the provincial governments for their cordial cooperation, in the main, with the Department of Finance in endeavouring to administer the act. Every province, with the exception of British Columbia-and I will refer to that province in a moment-has cooperated not only to the point of facilitating the operation of the act in every way through contact with its several officials but has made contributions in the way of reductions in fees, and no province has taken any exception to the general terms of the act in its application to provincial obligations. That statement is true as far as the province of British Columbia is concerned from the inception of the act in November until the month of May. During the month of May the board of review sat on a case concerning one Copeland, and it is fair to assume that the province did not object to the jurisdiction of the board because it was represented there by the attorney general. In the Copeland case the board of review made the following finding with regard to the claim of the province of British Columbia for arrears of taxes upon the land:

-that all interest due thereon, with penalties be written off

Fanners' Creditors Act-Mr. Mackenzie

I interpret that to mean that the decision was that the interest upon arrears of taxes should be written off.

-and that the amount payable be allowed and fixed at the sum of $1,408.03 (which is inclusive of the taxes assessed and payable in 1935); and that the said sum shall be payable in three equal annual instalments of $469.34, each, without interest, on the 31st day of October in the years 1936, 1937 and 1938 respectively; and the board directs that no tax enforcement proceeding shall be taken against the debtor in respect of these payments until after October 31, 1939, The

debtor shall pay all current taxes payable to the province in the year 1936 and subsequent years until and including the year 1940, regularly and in accordance with the provisions of the statute in that behalf.

In May it was announced by the attorney general of that province that the province proposed to challenge the legality of the act.

The premier of the province said that it created an invasion of provincial rights, and he proposed to fight- it all along the line. As a result of the finding in the case I have just indicated the province appeared before the court and asked' for a declaration-

1. (a) That the defendants purporting to act as a "Board of review for the province of British Columbia" under the provisions of the Farmers' Creditors Arrangement Act. being chapter 53 of the statutes of Canada. 1934, and amending acts and the rules and regulations passed thereunder, are acting without lawful authority, as the said act is ultra vires the parliament of Canada.

(b) Alternatively, that the board of review is acting without lawful authority in assuming jurisdiction under the said act to formulate proposals and to make directions by virtue of which contracts and taxation powers and rights of the crown in the right of the province of British Columbia in relation to farmer debtors are in whole or in part abrogated and set aside.

2. The plaintiff further claims an injunction to restrain the defendants from purporting to formulate proposals or to give directions or to make orders involving contracts by the crown n11 *"?[DOT] r'sht _ of the province of British Columbia and its farmer debtors in relation to amounts owing under such contracts to the said province and' in relation to moneys due or to become due from farmer debtors to the crown in the right of the said province in respect of any form of taxes, fees, rates or duties.

An interim restraining order was granted on June 15, the motion to continue the injunction being returnable on June 27.

In coming to its decision to introduce this bill the government has had in mind the fact that since the inception of the act there have been, up to the end of May, 57.610 interviews, 10,942 proposals, and 4,602 settlements. These are formal settlements effected by the receivers. In addition there have been 1,250 settlements effected as a result

of decisions of boards of review. Of that number only 58 occurred in the province of British Columbia as a result of settlements effected by the receivers and I believe only six or seven as a result of decisions by boards of review.

In an interview reported in the press of to-day, or possibly yesterday, the premier of British Columbia said that he was quite content that the act should be applicable so long as it does not apply to the province of British Columbia. In other words, he is quite content that contributions shall be made by loan companies, by trust companies, by banks, by insurance companies and by private debtors, but the province itself should be immune. It will stand on the letter of the law and it will exact its pound of flesh.

It is not for me to quarrel with the decision of the province. It is within the rights of the provincial government to take the attitude it may desire to take, but in making my statement I am stating the blunt facts. There are two things to be said. One is that we have the right to assume that the government of British Columbia speaks for the province of British Columbia, and by its attitude it has said, "We do not wish this act applicable to the province of British Columbia." But the second and more important consideration is this. While we are advised by the Department of Justice that this law is intra vires of this parliament, what a court of law might do is another matter. And inasmuch as the law has been accepted as applicable to the other eight provinces of Canada I submit that we would be derelict in our duties if we were to imperil its existence and the benefits which flow from its operation in the other eight provinces if we allowed the act to continue in British Columbia, with the results which might flow from the action which has been taken in the courts by that province. In these circumstances we have felt that we have no alternative but that of introducing this measure.

Mr. IAN MACKENZIE (Vancouver Centre):

Mr. Speaker, I regret very much that the Minister of Finance (Mr. Rhodes) has departed from the customary courtesies extended on the occasion of the first reading of a bill, and has sought to make a detailed explanation which would have been more proper on second reading. I would say to the minister that he has raised some very controversial arguments. I am not here to defend or to protest against action which may be taken by the provincial government of the province of British Columbia. I am personally in favour, and have so expressed myself

Canada-Poland Trade Treaty

repeatedly, of the provisions of the Farmers' Creditors Arrangement Act in the province of British Columbia. My right hon. friend, the leader of the opposition, very definitely expressed himself as being in favour of the provisions of the bill when it was discussed in the house.

I must protest most emphatically however against the Minister of Finance, at this time and at this stage of debate, namely, upon the introduction of a bill which we have not yet seen, to the consideration of this house, imputing motives to any provincial government, whether it be Liberal or Conservative, I do not care which. I am certainly disposed to object to this bill; I may say frankly to the minister that I am in favour of the application of the provisions of the act to the province of British Columbia. I have spoken in favour of it, and so has the hon. member for New Westminster (Mr. Reid), upon many occasions in British Columbia. For these reasons I say it is entirely unbecoming in the minister, when he seeks leave of the house to introduce the bill, to impute motives when the full facts are not in possession of the house.

Mr. RHODES:

I think it is due to me that I be given the opportunity to say that if the bon. member would do me the courtesy of reading what I have said he could not take exception to a single statement I have made when introducing the bill. In doing more than stating in simple terms what the bill sought to do I was merely being courteous to the house at this stage so that hon. members might be fully aware of the motives which have caused the government to introduce the bill. I must say however that I did not impute any motives to the province of British Columbia. I confined my observations entirely to a statement of facts, and only a limited number of those facts at that, from official documents. I believe when the hon. member reads what I have said he will realize that the last thing I attempted to do or had in mind, or that the government had in mind, was to show any partisanship, because I was at pains to pay tribute to the other provinces in Canada, without regard to their political affiliations, for having cooperated so loyally with the federal government in the administration of the act. After all, the chief motive is to serve the agricultural population of Canada, and I believe we may forget the political phase of it.

Mr. MACKENZIE (Vancouver):

I wish you had.

Mr. FRASER (Cariboo):

That is all you are thinking about.

Motion agreed to and bill read the first time.

Mr. A. A. HEAPS (Winnipeg North):

May I ask the Prime Minister if it is the intention of the government to introduce this session legislation dealing with pensions for the blind?

Right Hon. R. B. BENNETT (Prime Minister) :

I cannot answer that question at the moment. I was not present at council this morning but I am advised that I shall be in a position to give an answer on Monday.

FARMERS' CREDITORS ACT On the orders of the day:

Mr. G. G. COOTE (Macleod):

Might I

ask the Prime Minister whether the government woulld consider introducing legislation dealing with the jurisdiction of the Farmers' Creditors Arrangement Act in respect to indebtedness for school lands? If the Prime Minister is not in a position to give an answer at the moment, perhaps he might consider the question and give an answer on Monday.

Right Hon. R. B. BENNETT (Prime Minister) :

I am bound to say that I was not

aware of the difficulty to which the hon. gentleman refers. I shall, however, look into it. The dominion is no longer concerned about school lands, being only the trustees; the school lands are now beyond question the property of the province. But there are limitations with respect to investments, and I believe it would not be competent for us to do more than confer with the province as to what action shall be taken. I will look into the matter and be able to make a more definite statement on Monday.

OANADA-POLAND TRADE TREATY On the orders of the day:

Mr. S. W. JACOBS (Cartier):

In the

absence of the Minister of Trade and Commerce (Mr. Hanson) I wonder if the Prime Minister could give us any information as to the present status of the negotiations looking to a trade treaty between this country and the republic of Poland.

Right Hon. R. B. BENNETT (Prime Minister) :

We did carry on negotiations with

the republic of Poland and arrived at the

National Government

basis of an agreement before I was ill, and it was readly for signature, but certain difficulties arose in connection with another branch of government altogether, and certain suggestions were made that one Should be dependent on the other. Without going into details in any sense, which the hon. gentleman will not expect, I am afraid that as matters now stand we are not entitled' to yield! the point that has been suggested with respect to another matter of government altogether, and so the trade agreement will probably have to stand for the moment. That is as far as my present advices' go.

NATIONAL GOVERNMENT On the orders of the day:

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

Mr. Speaker, according to this morning's Montreal Gazette, in his convocation address at Bishop's College Chief Justice Greenshields urged the formation of a national coalition government to bring us through the depression. The chief justice was aware that he was touching upon a controversial matter and might be subject to criticism. I would like to ask, in view of the fact that there is a definite political movement towards a national coalition government today, whether it is appropriate that a judge should1 enter the political field1 and meddle with political matters.

Right Hon. R. B. BENNETT (Prime Minister) :

I think, Mr. Speaker, it is easy for

me to say that the government is of the opinion that neither the chief justice of the superior court of Quebec nor the chief justice of Ontario should indulge in party politics, and we very much regret that any chief justice should do so. We feel quite certain that any observations that were made were not intended to be of a political char acter but rather were indicating the private opinion of one who at the time he spoke was occupying the position of chancellor of the university over which he presides.

Mr. JACOBS:

Was he not speaking from

the standpoint of the patriot rather than in a party sense?

Mr. GARLAND (Bow River):

I wonder

how the Prime Minister distinguishes a private statement of opinion from a public statement of opinion?

DISABLED PENSIONERS AT WINNIPEG On the orders of the day: