Sir GEORGE PERLEY:

This seems to be quite in order, but why should this item not appear in the ordinary estimates? Why is it in the special supplementaries?

Mr. HOWE:

This amount is for work that could be done this year or could be deferred. While the work is necessary, it is not necessary in the immediate year. The item has been put in because the work covers a series of small projects that will employ considerable labour rather widely distributed.

Sir GEORGE PERLEY:

Perhaps I am not thoroughly conversant with the matter, but is not this item the same as is covered by a bill which is now before the house?

Mr. HOWE:

The same item is covered

by a resolution of the Minister of Finance, yes.

Sir GEORGE PERLEY:

I think this item should stand. Is it to go to the special committee?

Mr. DUNNING:

It has been to the special committee and was reported back to the house. I think the chairman of the special committee is present.

Sir EUGENE FISET:

The committee

reported to the house on April 30, approving this resolution.

Sir GEORGE PERLEY:

That is what I

thought, but it seems to me that the item should gtand until the bill has been passed. I am unable to see quite why there Should be both a bill and an estimate. There are so many of these things coming along just now that I find it a little difficult to follow them. I always thought that a vote in a bill was sufficient without an estimate. But here we have an estimate and we also have a bill by the Minister of Finance dealing with the matter. I would like to have my leader here to discuss it, and I would suggest that it stand in the meantime, and come up again perhaps to-morrow.

Mr. DUNNING:

The bill of the Minister of Finance based upon the resolution which I introduced the other day is still on the order paper, the debate on the second reading having been adjourned. That bill was to provide entirely for the capital expenditures of the railway, not for the deficit. The capital expenditures embodied in that measure amount to $9,959,000, which requires to be voted in a measure of that kind. The estimate before

Supply-R ailways-C .N.R.

the committee now is for the deficit only, and is not contained within the four corners of the bill to which my right hon. friend has just referred. I cam assure him that the procedure is quite regular, to vote this after it has been examined by the special committee and reported upon.

Sir GEORGE PERLEY:

I understand the explanation given that there is both a resolution and estimates, but it is an entirely new departure to have beforehand an estimate for a deficit. How does the minister know there will be no further deficit? Why does he not wait until the end of the year? Why change the system that has always been in vogue and ask for an estimate beforehand? There is danger in doing so because there will be an urge on the part of the railway authorities to have a deficit as large as the estimate. Human nature is the same all over the world, and I say to the minister that it is dangerous to ask parliament to provide beforehand a large sum of money for a deficit. At any rate, it is something new and I ask the minister to let this item stand as the leader of the opposition (Mr. Bennett) would like to say a few words on the subject.

Mr. DUNNING:

I shall not oppose the request of the right hon. member for Argenteuil (Sir George Perley) to defer consideration of this item in order that his leader may make some further remarks upon it. With reference to his last remark I would point out that even though no advance estimate was voted by parliament in previous years for Canadian National deficits, that did not absolve the Minister of Finance of the day from the necessity of endeavouring to forecast for his own budget purposes the amount necessary to take care of the Canadian National during the year. If the result feared by my right hon. friend had any real basis, it should have occurred ere this. In each of the last few years the Minister of Finance in presenting his budget has been compelled to make provision for a sum which could be known and was known to the Canadian National officials.

Sir GEORGE PERLEY:

But not voted.

Mr. DUNNING:

But not voted by the house. I can remember years ago when I was Minister of Railways and Canals that complaints were made in the special committee on railways that we were voting something which was relatively meaningless because the money had been spent anyway. I believe that nearly all hon. members who have had experience on that special committee will bear out what I say. By dealing with the

matter in this way, it is possible to crossexamine the officials of the railway regarding their intended expenditures. In other words, they are put on the spot in exactly the same manner as the members of this committee put each minister on the spot with reference to the expenditures he intends to undertake. That is the whole principle involved in the change. While I appreciate that there may be something in the contention of my right hon. friend, after close examination of the whole matter I am convinced that by and large the balance of good will be on the side of this procedure rather than on the side of the former. It will give the committee examining in advance the expenditures contemplated the ability to ask: Is this wise? Should this be done this year? The operating officials will find it necessary to give reasons for contemplated expenditures rather than reasons for expenditures which have been made.

Mr. STEVENS:

I have not been a member of that committee for a number of years, but I am under the impression that it has been the practice of the committee not only to examine the statements of the past year which were brought down, but also to receive from the officers of the railway estimates of their expenditures during the current year.

Sir EUGENE FISET:

I was chairman of that committee in 1927, 1928 and 1929 and I can remember that we had a discussion while my hon. friend was a member of the committee as to the advisability of examining any arrears in connection with the expenses of the Canadian National. The opinion was expressed that an estimate should be submitted to the committee. I have taken the trouble to look over the records of the past and I found that opinion expressed by my hon. friend, by other members of the committee and by myself. For the first time in the history of the Canadian National Railways, the officials are being asked this year to submit a detailed budget of their future estimates, upon which is based the estimate at present being presented to the committee. It was only because we had before us complete details of the proposed vote of $39,000,000, as included in these estimates, that the committee agreed to let them go through after full examination.

Mr. STEVENS:

I agree entirely with the procedure of bringing before the committee an estimate of future expenditures. I think I recollect that when I was a member of that committee some years ago we discussed the matter and I believe the stand I took then

Supply-Railways- C R .R.

was as indicated by the hon. gentleman. I am not taking any great objection to this procedure, but I say to the Minister of Finance that it does not follow that it is necessary to vote an anticipated deficit in the current year. The deficit is not incurred until December 31. In the past the railway was always able to finance on short term loans for the accumulating deficit, and then at the end of the year when the full deficit was known they came to parliament and parliament usually voted it fairly early.

Sir EUGENE FISET:

The practice in the last three years has been just what the Minister of Finance is doing this year by resolution. A resolution was passed upon which a bill was based authorizing the railway to float loans in advance. In this instance there are only two special cases, amounting to $9,000,000, which are not provided in these estimates and which are to be submitted to the committee. They are to be covered by a resolution introduced by the Minister of Finance and upon which resolution a bill will be based. These special cases were dealt with in the budget submitted to the members of the committee for examination by the railway staff. My hon. friend will realize the great help it is to the members of the committee to have before them detailed estimates with which they can deal intelligently. They will know the specific amount to be provided for, just as is known in connection with every other branch of the administration.

Sir GEORGE PERLEY:

There are other things I could say to-night, but if the minister is willing, I should like to have this item stand.