May 1, 1936

LIB

Clarence Decatur Howe (Minister of Marine; Minister of Railways and Canals)

Liberal

Mr. HOWE:

I may say that it is the intention to call for tenders for this work.

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I do not mean the work that is to be done by the harbour plant.

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LIB

Clarence Decatur Howe (Minister of Marine; Minister of Railways and Canals)

Liberal

Mr. HOWE:

The harbour act provides that all work costing over $10,000 must be let by public tender, and we intend to follow that provision.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

May I direct the attention of the right hon. Prime Minister to a matter we have been discussing this evening, namely the passing for the second time of estimates with respect to public expenditures.

In these supplementary estimates we are dealing with about $30,000,000 that this house passed last year, item by item. There was no limitation as to time placed upon these items; in other words the appropriations thus made by parliament, item by item, were not appropriations that lapsed on the 31st day of March, 1936. We are now engaged in passing these same items in their entirety, although part of the expenditures have been made and apparently the auditor general has found them satisfactory. I cannot understand just why we should ask parliament to pass a second time items that have been considered and passed by parliament in detail. This is not a question of a blank cheque; these are items that were considered and passed in detail; the numbers of the items of last year could be given and were given this evening. In these circumstances it would seem that these estimates have been padded by something like $30,000,000. That is, instead of providing for new expenditures these items are for expenditures on works that are partly under contract and partly in process of completion. In one instance new plans were necessary because of certain developments that took place after the original contract was made, but in any event all these expenditures have been passed by parliament. They formed part of the act assented to by his excellency last year. I do think it is improper, shall I say, to ask parliament to pass for the second time and for the full amount, the same items when a part of the expenditures thus authorized by parliament last year has been made and the auditor general has approved of payments made under the authority of those items.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

May I say to my right hon. friend that the government is simply carrying out what its members contended, when they were in opposition, should have been done by the then government, namely voting the supply necessary for the fiscal year, and in that way giving parliament complete control and complete knowledge of all expenditures for the year. We take the position which was always taken until my right hon. friend came into office, that parliament's power in voting supplies should be restricted to voting supplies only for a year at a time. When expenditure on public works have extended over more than one year, amounts unnecessary to complete the works were revoted. Take the public works estimates. As the exMinister of Public Works (Mr. Stewart) well knows, where the public works might take three or four years to construct certain sums would be voted each year, and what was not

2446 COMMONS

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spent in one year of the amounts so voted was revoted in a subsequent year. That is the only way in which it is possible to distinguish what is properly chargeable to one year and to another. It is equally important that there should be a distinction between what is properly chargeable to one administration and what is properly chargeable to another. That is an additional reason why this year we are asking parliament to vote what is essential to carry on work being done in the present fiscal year. It is simply keeping the control of the House of Commons over expenditure in a manner that makes the contemplated expenditure intelligible to this house and intelligible to the public, and on record in a form which will be of service to those who have to do with the finances of the country in years to come.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The right hon. gentleman apparently forgets that the statement he makes is exactly at variance with what the practice has been. I wonder whether he forgets the appropriation of a given sum we made for the federal district commission for many years. I wonder whether he forgets the appropriation made by statute for technical education. When an appropriation is made by statute it becomes payable out of the consolidated revenue fund. For instance, old age pensions are not in the appropriation bill this year. Why not? Because the statute provides that whatever sum is necessary shall be taken out of the consolidated revenue fund. The Public Works Construction Act was exactly of that nature. Every item was considered and dealt with by the House of Commons, and to the extent that the House of Commons approved, the appropriation bill which is now a chapter of the statutes of Canada for last year and the year before indicates the maximum expenditure that can be made. And it is unnecessary to vote an amount from year to year, in the same way that it is unnecessary to vote judges' salaries, nr to vote any charge against the consolidated revenue fund where a given sum is to be paid for a given number of years-the federal district commission is an illustration-or where you have it during a term, such as the natural life of judges or other officials. Another class is where a given sum is appropriated, such as

110,000,000 or some other such sum. Technical education is an illustration; another would be the Public Highways Act. Those are appropriations made by parliament of lump sums, and each year in the public accounts there appears a statement as to what has been expended, so that the balance is then available within the period of time indicated for the

purpose for which parliament appropriated the money.

This act comes clearly within that category. We voted for public works and undertakings the sums of money set opposite each particular item; when they were crystallized into a statute, as they were, and the only interest that governments have each succeeding year is to determine how much still remains available for that purpose. When it is found that an extra amount is required the minister comes in, just as he has done here in one case, and says that a further sum is required and that sum appears m tne estimates.

As the matter stands now these estimates are deceptive, because if they are going to be voted, the house must vote only the balance and not the whole, and now the vote is being asked for the whole. When the right hon. gentleman says "so that one administration may know where it is with respect to the preceding administration," that can be determined only if the balance is voted, not the whole. But he is voting the whole.

I raised the point only because I thought there was an oversight. I did not think for a moment that the right hon. gentleman thought the whole amount should be voted when only part remains to be expended. I thought it was put in without realizing that there had been, a substantial payment made. That having been paid, the only amount parliament should vote would be the balance, and it is unneeescsary to do this unless there is a limitation of time within which the first appropriation would lapse. As there is no provision for the lapsing of the appropriation it still continues in full force and validity. the same as the Technical Education Act or the Judges' Act or old age pensions, or any act that authorizes a charge against the consolidated revenue fund, as did the public works construction acts of 1934 and 1935.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

When my

right hon. friend uses the word "deceptive," it makes it necessary for me to say that the deception, if there was any, was a deception practised by himself when he was on this side of the house.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

All right, we will deal

with that; do not make any mistake.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

My right hon. friend used the word "deceptive."

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I did, and it is true.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

And I give

back to him his own words. I say, that is

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what he did when he was on this side of the house.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

If someone will hand

me the statute-

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Yes, he

enacted a statute, and for what purpose? Let me give an example. He enacted a statute making provision for a barracks in his own city of Calgary which was to cost more than a million dollars. He knew that if he put the item in the regular supply bill, all that this parliament could be asked to vote would be enough to cover the work for one year. When supply came up in subsequent years parliament would be asked to vote what further amounts might be necessaiy for each succeeding year in turn. But in order, I assume, that there should be only one consideration of this subject, my right hon. friend put the total amount required in a special act of parliament and asked parliament to vote this amount, in the name of relief for the unemployed, where the real purpose was to build a barracks for the mounted police in Calgary.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It was not the mounted

police; it was the permanent militia. [DOT]

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

The permanent militia, I should say. And having arranged for the appropriation by a special statute, he says the work should be carried on possibly for the next two or three years, chargeable to the incoming administration, but that the new government has no right to draw the attention of parliament or the country to that fact or to that method of dealing with public moneys. That is wherein, at the time, we said there was deception in the manner in which these appropriations were being made. There was deception in yet another way. The house and the country were told that this money was necessary to help the unemployed. It was not intended for the unemployed at all; much of it was meant to build barracks or armouries or other undertakings of that kind which my right hon. friend knew very well this house would not have been prepared to vote in the regular way. It was for that reason these buildings were charged up to unemployment relief account instead of to National Defence or Public Works of the character mentioned.

In regard to moneys being voted by a statute, may I draw the attention of the house to the fact that where a statute does provide sums for such purposes as mentioned, attention is drawn to that very fact in the estimates. I have in my hand the estimates for this year for the administration of justice.

Here are the amounts required for the fiscal year, at the bottom of the page in connection with the summary; amount to be voted, so much, authorized by statute, so much.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The house does not vote it.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

No, but attention is drawn to the fact that there has been a special statute making the appropriation. All amounts required for the fiscal year are shown in that way. But as my right hon. friend knows there is a great difference between a statute which makes provision for some service that in the natural order of things is to run over a course of years, as for example property to be maintained by the federal improvement commission, and the regular supply bill. It is well known that the commission will carry on its work for a number of years, and provision is made up to a certain point by statute on maintenance account, so that the commission may plan ahead with an assurance that the necessary amount will be forthcoming every year. However, we come to a quite different category when we deal with public buildings and works. May I draw attention to the fact that all that is contained in these estimates is in the nature of special estimates, the greater part of which are in connection with making provision for employment and relief. It is essential that there should be a very clear line of demarcation between what is being expended in any one year and what is being expended in the following years. The estimates have been prepared in this way just to avoid any deception and to bring to the attention of hon. members and the country that which is properly chargeable to one fiscal year and that which is properly chargeable to another.

Also, may I add, there are in these estimates a number of undertakings which the present administration would never have thought of entering into, if they had not been commenced by the previous administration. My right hon. friend now says, "Do not mention these things; you have no right to bring them to the attention of parliament. You ought to have left them alone. The sums necessary to complete them were voted by statute which binds you for years to come." The position we take is just the opposite. We believe the public and this House of Commons ought to have their attention drawn to all outlays, and we have done so in part by separately indicating projects which are already undertaken and which have to be continued or left as waste. We have distinguished those projects from other projects which we feel are justified

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from the point of view of helping to afford employment, but which in addition may be justified on grounds of being necessary at some time, either at present or of necessity later on.

I do not think there is any ground for taking exception to parliament discussing twice a matter which ought perhaps bo be discussed ten times.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Mr. Chairman, if the right hon. gentleman's memory was as accurate as it should be he would remember that we gave effect to the very contention which he has made, in the statute in question. By section 4 we find that:

The governor in council may pay out of moneys provided for that purpose in the consolidated revenue fund such sums of money as may be necessary for all or any of the purposes of this act, not exceeding in the aggregate the sum of forty million dollars.

That is found in chapter 59 of the statutes for 1934, assented to on July 3 of that year. Then, in a schedule is found a detail of every item, there being 182 in all. Having regard to what was said by the right hon. gentleman and his friends, we provided by section 10 that:

The Minister of Finance shall make a report to parliament within the first thirty days of each session during the currency of this act, containing a statement of all moneys expended under the provisions thereof and the purposes to which they were applied.

The act as framed and passed met the very contentions of the right hon. gentleman. I recall his making them. In our desire to try to meet his, shall I say critical views, possibly exacting views, we provided first of all that the details of the 182 items should be given. We provided, second that the entire cost should not exceed the sum total of the estimated cost, namely $40,000,000, and provided, third, that in each year while these works were incomplete the Minister of Finance should lay before parliament a statement showing what sums had been expended, and for what purposes. That is, there was complete parliamentary control of the situation.

Let us deal with the second argument. The second argument is that these were not relief measures in any sense, and that although the preamble adopted by parliament declared that the measure was "to accelerate recovery to more normal economic conditions" and to place money in circulation for the purpose of tending to increase employment and reduce expenditures for relief purposes, the right hon. gentleman says that is not accurate and that "Bennett desired to build a barracks at Calgary, and he chose this method to do it." I have explained the matter often; it seems .

unnecessary to do it again, but I shall do it because the constant reiteration of a statement which is unwarranted very often induces people to believe that it has some substance in fact.

The truth is that for many years the Department of Militia have been endeavouring to secure adequate accommodation for their permanent unit, and it will perhaps please the right hon. gentleman to know that owing to the physical configuration of the land upon which these facilities are being provided, a distinguished British officer passing through this country within the last month expressed the view that this was the finest lay-out he had seen in the British empire, because it lent itself to this particular type of development.

If we have a permanent militia-and we have-either we will provide for it or we will not. As a matter of fact when this item was first brought up I had not any idea that an expenditure at Calgary was contemplated. It was not done for the purpose of endeavouring to have it dealt with in any way other than the regular manner. Discussions had taken place from time to time, and on more than one occasion-once in the public press -the right hon. gentleman referred to it as being for the mounted police. The very appropriation asked for by the Minister of National Defence with respect to air facilities involves the utilization of these premises for that purpose.

But let us look at the matter in another way. The other answer is this: If these

works and undertakings are not for relief purposes, then the government has stultified itself, because times without number the Minister of Labour has declared that when this bill was brought down it would contain provisions which would indicate what was intended to be done, and the very class of expenditures provided for in the Public Works Construction Act of 1934 are continued in these appropriations. So that if these appropriations are for relief purposes, then the appropriations of 1934 and 1935 must be. And if the appropriations for 1934 and 1935 are not valid appropriations for relief, then all this story we have listened to for weeks, as to what was to happen when the bill was brought down showing the broad intention of the government with respect to providing relief measures, is wholly unsound and unwarranted. Surely the right hon. gentleman must take either one horn of the dilemma or the other, because he cannot allege on the one hand that the provision we made to deal with the situation was deceptive

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when, on the other, with an exactly similar project upon which not a cent has been expended he takes a similar course. He cannot say that one is deceptive, unless the other is also.

But I go further. I will take one item, a very simple one. In part of item 373 we are asked to vote $20,971. We know that $242,000 has already been expended there. As I said it is an illustration of a proper item to be in this estimate. But when you come down to an item in connection with the city of Quebec, for instance, and dredging at Wolfe's Cove, an item of $179,906.70, we find that part of the money has been spent. The minister was good enough to say it was true that the contract had been let, and part of the work had been done. It was let months ago, because it was desirable to do it in the fall, if possible, so that the berthing of ships would not be interfered with in the spring.

Therefore we get down to this, that if these projects are sound to-night they were sound in 1934, and if they were sound in 1934 or 1935 they are sound to-night, because they [DOT] are similar. Secondly, if it was deception to ask parliament to vote these items giving in detail the estimated expenditures, it is equally deceptive, if not more so, to assert that an entire sum, part of which has been expended, shall be available when it is not available. In fact, if the Prime Minister will be good enough to look at his own estimates he will find that he has already given some notice to the public that they are not a correct statement of what can be spent. The summary given at page 18 shows that the projects already undertaken involve $30,418,341.66 of the total. I was pointing out that of that sum part had been spent. The minister who has been dealing with his estimates was good enough to indicate to us how much still remained to be expended out of these sums.

There is no necessity to make unwarranted observations with respect to the matter. I was pointing out what I still think is unsound constitutional practice, for the auditor general in making his examination of estimates has before him the statutory authority. That statutory authority was chapter 59, the Public Works Construction Act, 1934, with 182 items, and he checks against that. Now, when this appropriation bill is before him, containing a repetition of the same figures, he is going to be in the difficulty of finding substantial portions of that already spent and noted in his books, while the appropriation is for the whole sum. The minister assures us that it

is intended not to increase the amount available but to leave it at what it originally was. Therefore the auditor general will have before him two statutes, one of them chapter 59. Take one item, for example, for $25,000. The other statute would be the chapter that this appropriation bill happens to be, containing the same item of $25,000, which makes a total of $50,000. Now, under the Public Works Construction Act, 1934, chapter 59, the limitation on the total expenditure was

840,000,000, and the ministry is required by law to present within thirty days a statement showing the expenditures made, so that the incoming administration may know what sum has not been spent and what has been.

I only suggest in the best of good faith that if the Prime Minister would look into this he would observe that a parliamentary practice is being established which is novel in character, without precedent, and which involves the making available so far as the auditor general is concerned of, in some instances twice the amount that parliament intended to make available for the particular purpose indicated either by chapter 59 of 1934 or by the appropriation act that may be based upon these estimates.

M;. MACKENZIE KING: I do not want to take up the time of the committee, there is not much time left, but may 1 just link up what I have to say with the remarks made by the leader of the opposition with respect to the Calgary building. He says that building was needed for the permanent force, that there was there an excellent site and that it was needed for military purposes. If that was the case I say that my right hon. friend, when he was in office, should have had the amount necer=sary placed in the regular estimates of either the Department of Public Works or the Department of National Defence. Then parliament would have been voting, without any possibility of deception, money intended for military purposes. Had those estimates been brought down in that form parliament might have voted any sum, but all that could have been spent without an additional appropriation, thus bringing the question before parliament again, would have been the amount provided for in the fiscal year to which the appropriation applied. That would have been the regular and proper way to proceed, but according to what the leader of the opposition says his government did not proceed in that way. Though the building was wanted for military purposes; though it was properly an appropriation for the Department of National

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Defence or for the Department of Public Works, constructing a building for the Department of National Defence, it was placed in a statute which purported to be a measure for the relief of the unemployed. Parliament was asked to vote these large sums for unemployment relief purposes. My right hon. friend and his friends were thereafter in a position to go out to the country and say: Here are the total sums we have voted for unemployment relief, while presumably from what we are now being told there was no thought of spending the greater part of these sums for the next couple of years.

What we have done is to take projects, such as this which were on the list for purposes of relief and examine them and find out if work upon them has already been undertaken. If such were the case and to cease work would have meant throwing away the money already expended, we have continued the projects and are now asking parliament to vote the necessary amounts to complete them. What has been already spent was spent in the last fiscal year. What we are asking parliament now to do is to vote enough money to complete these works which, if they are not completed, will simply mean just so much money has been completely thrown away, and the works left totally unfinished. But where there are works which are specially needed and which are required for, say the Department of Public Works or the Department of National Defence, they will appear in the regular estimates for those departments. They will not appear in these special estimates which are primarily for the purpose of relief.

There are some new projects which are added here. Take the public works shown n the estimates. These works would not have been gone on with, at this time, if it were not that there is need for furnishing employment in these different- communities. For that reason the government has decided to ask parliament to vote these moneys now. But it will be noted that in the regular estimates there are various items which relate to the regular work of these departments, and parliament in voting these amounts will be voting just what it would be called upon to vote if there had not been any period of depression at all. I think that keeping the items distinct, distinguishing between what is regular expenditure and expenditure arising out of the depression, is entirely the correct way of bringing before the country the state of the finances and what the depression is costing. Certainly voting moneys for a period of one year at a time

is the traditional and correct method where parliament is being asked to vote money for public expenditure.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I am so sorry that the

right hon. gentleman should have made the next to the last statement that he did. He said that these estimates covered works which were not such as would be dealt with by the main estimates.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

At this time.

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May 1, 1936