Mr. RALSTON:

Not a very good reason, but at least a reason. As a matter of fact, I unintentionally .misled the committee last night when I told them that this clause was in the 1915 act. It was not. The clause was drawn by one of the departmental officials and then was inserted with the idea that possibly there might be auxiliary units not within the scope of the military, the naval or the aeronautics act, the pay and allowances for which might not be provided for. That is why the paragraph was put in. As my hon. friend knows, the Militia Act provides for pay and allowances for the militia, and the Naval Services Act for the navy, and there

War Appropriation Bill

will be a new act for the air force. But it was thought that there might be auxiliary units of some kind which would not be otherwise covered.

Mr. STIRLING:

The minister is not

apprehensive that having it in two statutes might induce a sense of confusion?

Mr. RALSTON:

No, I think not. It is only an authorization to the governor in council to provide pay and allowances, and it seems to me that being there twice would merely provide double authority.

Mr. BROOKS:

I am glad to see that

the Minister of National Defence for Air has come into the chamber. There was a question I wished to ask with reference to Canadian airmen who are with the Royal Air Force. I am sure that we all listened with much pleasure to the statement of the Minister of National Defence (Mr. Rogers) when he told the other day of visiting these men in England, and of how the Canadians who had gone overseas in the last two years had been collected in a squadron under the Royal Air Force. These men, as we all know, found it impossible to get their training in Canada. Coming from all parts of Canada, they paid their way across the ocean and were trained by the British air force. I wish to know whether it is the intention of the minister's department to take over from the Royal Air Force the Canadian airmen who are at present in that air force; or, if these men are not taken over, whether they will receive the same pay and allowances as Canadian airmen under the Royal Canadian Air Force, or will they continue to receive the same rate of pay as the Royal Air Force? I thought it possible that these questions might appropriately come under paragraph (b) of section 5 of this bill.

Mr. POWER:

I am quite sure that, in view of the fact that these men are members of the Royal Air Force, they will receive the pay of the Royal Air Force, not of the Royal Canadian Air Force.

Mr. BROOKS:

Is it the intention of the Royal Canadian Air Force to have these men join that force later on? They are all Canadians, and the only reason why they are with the Royal Air Force at the present time is that they could not get opportunities to train here in Canada and had to go to England at their own expense to train. I understand that the pay in the Royal Air Force is not as high as in the Royal Canadian Air Force. I think these men should, if they wish, be given an opportunity to belong to the Royal Canadian Air Force.

Mr. POWER:

I cannot see any particular reason why they would not be transferred to the Royal Canadian Air Force if they so wished. I do not think that matter has ever been considered. They are members of the Royal Air Force, and we have never seriously considered taking them away and incorporating them in the Royal Canadian Air Force. However, I will make inquiries and give the matter consideration.

Mr. RALSTON:

The leader of the opposition asked me before six o'clock for some further particulars with regard to expenditures. I have had the officials of the comptroller of the treasury make the collocation of expenditures, and hon. members can follow these expenditures by looking at the explanatory notes opposite pages 2 and 3 of the bill. What has been done is to collect, under headings similar to those shown in the explanatory notes opposite page 3, under "general administration," items of expenditure from September 1, 1939, to March 31, 1940:

Civilian personnel-salaries and

wages $456,248 99Pay and allowances

95,358 01Transportation

40,731 61Operating expenses of properties.. 4,341 62Construction and repairs

116,296 02Stores, equipment and supplies. .. 110,285 60Sundries

14,662 99Total $837,924 84

That is the total for that combination of items.

That is under general administration. If hon. members will turn back to the explanatory notes opposite page 2, and begin at the top with "militia services," I can give them the expenditures under the items which are set out there. The expenditures are from September 1, 1939, to the end of the fiscal year, as follows:

Expenditure September 1, 1939, to the end

of the fiscal year from war appropriation, militia services:

Civilian personnel-salaries and

wages $ 918,011 42

Pay and allowances C.A.S.F. and

other personnel charges

37,090.498 24Non-permanent active militia .. 856,579 44Construction, repairs and operating expenses of military buildings, works and lands. . .. 8,644,840 54

Transportation and food supplies 5,374,341 15 Stores and equipment - unit equipment, personal equipment

and ammunition

14,439,883 34Sundries

443,413 02

Note.-Expenditures for Royal Military College and Northwest Territories radio service not segregated as expenditures merged in above headings.

War Appropriation Bill

Expenditure September 1, 1939, to the end of the fiscal year from war appropriation, naval service:

Civilian personnel-salaries and

wages $ 131,593 81Pay and allowances R.C.N. and other personnel charges.. .. 4,108,043 38Acquisition construction and repairs of ships

1,696,860 17Construction, repairs and operating expenses of naval buildings, works and lands

896,644 88Transportation

219,479 73Naval stores, armament equipment and food supplies.. .. 4,273,999 39Sundries

146,465 69

Mr. STIRLING:

Does ammunition come into that?

Mr. RALSTON:

I cannot tell. I should think it would be in naval stores.

Expenditure September 1, 1939, to end of the fiscal year from war appropriation air services, including air training plan:

Civilian personnel-salaries and

wages $ 304,009 80

Pay and allowances R.C.A.F. and

attached personnel

6,633,036 52Transportation

491,958 48Operating expenses of properties 442,524 31Construction of R.C.A.F. and B.C. air training plan buildings, works and lands

5,073,378 64Stores, equipment and food supplies

19,163,947 77Sundries

432,493 91

There is one other set of figures here, but I have not the break-down that my hon. friend asked for. I refer to the commitments. What I have given the committee so far is the actual money paid out. With respect to commitments, I can give them only broken down into the three services. The first item under this statement, which is a summary of commitments recorded during the period from September 1, 1939, to March 31, 1940, is military services, 373,247,674.

Mr. HOMUTH:

Is that inclusive of the figure the minister gave a little while ago?

Mr. RALSTON:

It is partly included, because that item is only stores, material and construction and does not include pay and allowances which I give further down. I give the statement now:

Summary of commitments recorded during period, September 1, 1939, to March 31, 1940, against war appropriation for stores, material and construction.

Military services $ 73,247,674

Internment operations 149,850

Naval services 71,387,551

Air services 60,776,960

B.C. air training plan 61,525,214

Actual expenditures made to March 31 for pay and allowances, travel, office expenses, etc.

Military $ 45,296,616

Internment 77,260

Naval 4,682|l80

Air 7,519,810

Air training 984,762

Administrative 502,306

Censoring 98,765

Total expenditures and commitments, September 1, 1939, to March 31, 1940 $326,248,948

This does not include commitments which may have been entered into by the Canadian military authorities overseas for stores and equipment, as these figures are not available.

The total actual expenditures made from September 1, 1939, to close of fiscal year, March 31, 1940, for national defence war services wras $112,469,000 Deducting this from the total of expenditures and commitments to March 31 326,248,948

Leaves unliquidated commitments

as of that date of $213,779,948

Mr. STIRLING:

Making a very rough deduction, taking the $326,000,000 from the $700,000,000 under this bill, we have approximately $400,000,000. Is the minister going to be able to give us any break-down of that, any explanation as to how it will be used?

Mr. RALSTON:

It is a little difficult for one to explain it clearly. This represents $326,000,000 in commitments made to March 31. For the first year of the war we still have the months of May, June, July and August, or four months more. When our first programme was announced, I calculated that the expenditure would be something like $375,000,000 for the year; as a matter of fact, I said a million dollars a day. That estimate has been exceeded in a good many ways by additions which have been made from time to time. I mentioned one item the other day, increase in personnel of rifle battalions, $5,000,000 and so on. But there were additions to that, when one came to figure the fiscal year from March 31, 1940, to March 31, 1941. There had to be added to the $375,000,000 about $40,000,000 more on account of the air training plan and about $60,000,000 more on account of naval service. The naval service was something in the vicinity of $40,000,000, and we now estimate about $100,000,000. That brought it to a little over $500,000,000.

Then there were other increases, the largest being to send the second division overseas, amounting to about $43,000,000, and other increases that brought it to between $560,000,000 and $570,000,000. Add to that the cost

War Appropriation Bill

of the Canadian corps, something like 865,000,000, and the third division, another $38,000,000, and that brings it nearly to the $700,000,000 without any allowance for other departments. As I have said, those estimates for the cost of the different units depend on the theatre in which they serve and the amount of wastage there is. That is how, without my notes, I reconcile the amount of this bill with the amount of the expenditures and commitments up to date.

Mr. HANSON (York-Sunbury):

I am

greatly obliged to the minister for the trouble he has taken in giving this break-down, but I am sorry it came so late because there will be no opportunity to make any study of the figures in time to base any questions on them with respect to this measure.

Mr. RALSTON:

I had intended to hand them to my hon. friend immediately after eight o'clock; then something started up, and as hon. members know, a good deal of discussion has been going on this evening, which, it seemed to me, had not a great deal to do with the bill before us.

Mr. HANSON (York-Sunbury):

I am not finding any fault.

Mr. ESLING:

In connection with the recruiting of the third and subsequent divisions, may I ask the interest of the Minister of National Defence in connection with regulations covering pay and allowances? In my district there was no difficulty so far as the wife was concerned, but there was an obstacle causing much distress in connection with allowances for mothers. It seems that such allowances were not granted until a report was received by the department from one who was designated by the pay and allowances board as a special interviewer. The regulations were amended early in the year, I think after the first division had gone overseas. When I communicated with the department and asked who was the special interviewer in connection with the 109th battery, I was told that he was the commanding officer of that unit or any other officer not below the rank of captain. With that unit overseas, it will readily be seen what situation arises.

I suggested to the minister by letter and telegram that, to overcome delay and distress of mothers who were affected, the provincial government agents in that district, both of whom have served overseas and are men of experience and well able to pass upon the financial condition of the mothers, be used as interviewers. It seems that the department has been using the services of a social worker. Well, the mothers are entitled to the allowance, and the social welfare worker cannot very well cover a district some two hundred miles square, whereas the government agents are always available. I ask the minister, in view of the fact that this amendment came into effect after the 109th battery had gone overseas, if he will see that some arrangement is made so that the report, if required, can be made eitheT by the government agent or, say, by the secretary of the local legion, either of whom can reach the mothers quickly.

Mr. RALSTON:

I am very sorry; I thought my colleague the Minister of National Defence was sitting here listening to my hon. friend, and I confess I did not catch clearly the particular case to which the hon. member was referring. Will he take my assurance that I will refer it to the Minister of National Defence along with the other cases that have been mentioned?

Mr. HANSON (York-Sunbury):

Before this section and the bill pass, I should like to refer to an order in council, a copy of which has come to my desk to-day, P.C. 2189, passed May 24, 1940. This vests in the Minister of Munitions and Supply the most extraordinary powers ever vested in any man in the history of this country. I shall not read the whole order, but I shall refer to one of the recitals and then to two or three portions of the enacting clauses. This is one of the recitals:

And whereas the Minister of Munitions and Supply reports that it is a matter of urgency and of national importance that all possible steps be taken to ensure an adequate supply of certain materials and commodities for the production of munitions of war and supplies and that unless such supply is ensured immediately there is a serious risk that a sufficient quantity thereof will not be available at a later date or that the price for such quantity as can later be obtained will be substantially in excess of that now prevailing; that it is impracticable and not in the public interest to call for tenders; and that to disturb the market price as little as possible, purchases and sales should not be made through an ostensible government source;

And then by paragraph (a) the minister is authorized:

(a) to acquire at such price or prices as he may from time to time decide, such quantities of materials or commodities, raw or manufactured, as he may consider necessary or expedient for the production of munitions of war and supplies, and for that purpose he be authorized to expend a total sum not exceeding $5,000,000.

(d) to enter into agreements with such company or companies as the Minister of Munitions and Supply may cause to be incorporated whereby such company or companies will act as his agent or agents to acquire, dispose of, mortgage and generally deal in all or any such materials or commodities.

War Appropriation Bill

Then there is a further recital:

And whereas the Minister of Finance and the Minister of Munitions and Supply represent that, in order to carry out the terms of this order, it may be desirable to observe commercial financing practices associated with_ like purchases and sales by importers, commission agents and manufacturers;

Now therefore His Excellency the Administrator in council ... is further pleased to order as follows:-

(a) The Minister of Munitions and Supply is hereby authorized to mortgage or hypothecate for such amount or amounts as he may from time to time consider desirable either directly or through the medium of such company or companies, all or any of the said materials or commodities.

(b) The Minister of Finance is hereby authorized to give such guarantees as he may deem necessary to any bank or banks against loss, by reason of the exercise of any of the powers conferred on the Minister of Munitions and Supply herein, provided that the total amount of such guarantees in effect at any one time shall not exceed two million dollars, the Minister of Finance to be entitled to rely upon the certificates of the Minister of Munitions and Supply, as to the name of any company (the account of which with any such bank the Minister of Finance is being asked to guarantee) and that such company is beneficially owned by His Majesty, through ownership by the Minister of Munitions and Supply, as trustee of all its issued shares save and except directors' qualifying shares.

I am sure the minister will agree that this is a most unusual departure in government operation and financing. I pondered this matter to-day, but have not had an opportunity of consulting with anybody on it. I should have liked' an opportunity of talking to the minister about the matter, but I had only a minute with him. If it is not in the public interest that the reason for this order in council should be disclosed, and the minister will say so, I shall not pursue the matter further; but I do hope that if there is no real reason of that kind, we might have some explanation as to why the government is taking this power to create government-owned corporations, and some statement as to the rationality of the whole scheme. I do not want to embarrass the government or hamper its undertakings. I assume that the idea is to speed up war preparations, and of course that is all to the good.