Mr. HOWE:

It has turned out a type of ship vitally important at this time; and I can say to the house that within the last three weeks we have had most urgent cables for help in delivering 4,700-ton ships to Great Britain, urgently needed for operations within the next three or four months. Pictou has turned out practically all of the 4,700-ton ships which have been built. I think two or three were built on the St. Lawrence, two or three at Saint John, and the rest at Pictou. But we were able to supply a considerable number of 4,700-ton ships to meet those very urgent demands from the United Kingdom, and I am glad we were able to do so. I am willing to take the full responsibility for having ships built in a high-cost yard at a time when they could not be built in any other yard in Canada. We have had to build where we could; we used the facilities that were available. We

War Expenditures-Mr. Howe

have had to move into second-grade facilities when first-grade facilities were not available. If there is any tapering off in the programme we shall be able to move from second-grade facilities into good facilities. That is what we will do in shipbuilding. As long as this urgent war-time demand continues I am going to build these ships anywhere I can, and pay whatever price I must.

My hon. friend has spoken of the condition when the committee's examination was made. That was at least six or seven months ago. I can tell him that the position has improved greatly since that examination was made. I invite the committee on war expenditures to return to the same shipyards it has criticized in its last report, and examine the situation anew. I know its members will be surprised at the improvements in cost that have been effected in these yards.

Mr. HOMUTH:

Then the hon. member was right.

Mr. HOWE:

What is my hon. friend suggesting now?

Mr. HOMUTH:

I am saying the hon. member was right in the report of six months ago.

Mr. HOWE:

Did I say that he was not right? Where did this argument start? It occurs to me to wonder what the people of Canada will think of this committee, which is supposed to safeguard the treasury in the expenditure of government moneys for war. My department is doing the same work as this committee. We have an investigation branch and we investigate anything that comes in, in the nature of a complaint or criticism. We even investigate anonymous letters. Several people are in gaol to-day because of the investigations that have been carried out by my department. We are investigating continuously. We have a staff not quite as large as the membership of the committee, but that staff is engaged continuously on investigations and have been for three .years. I have expected a great deal of help from this committee, and it has been a help. The investigations of the committee have acted as a spur to our people toward making sure that the situation is in hand.

Let us examine this aluminum situation. The Canadian treasury is a buyer of fabricated aluminum. Less than one million dollars worth has been bought directly by the government, and indirectly through contractors about

840,000 worth of fabricated aluminum has been bought. My officers tell me that in 1941 the results to the aluminum company showed a net profit of 3-7 per cent on sales to the dominion government and its contractors,

while in 1942 there was a substantial loss on the books of the aluminum company in carrying out these contracts. These contracts do not carry an escalator clause, and the increased costs of aluminum were for the account of the aluminum company and not for the account of my department. These are the only transactions affecting the Canadian treasury in the whole aluminum company picture.

What do we find? We find that this committee has investigated the question of cartels, the question of whether the aluminum company was a member of a cartel. Does that affect the Canadian treasury? We find that it has gone into the question of government ownership as against private ownership. Does that affect the Canadian treasury? I may say that subject was looked into very carefully before we made any decision in connection with the expansion of the aluminum company. We took account of the fact that part of the operations of the aluminum company were in British Guiana, that other operations were in Newfoundland and others in Canada. We also took account of the fact that when we entered the aluminum picture the British government had already made a great investment in this country, using its own capital.

We decided that it was not a situation calling for government ownership. We made that decision knowing all the facts, and it was a decision purely by the government. It is all very well for the hon. member for Rose-town-Biggar (Mr. Coldwell) to say that we should have built aluminum facilities as a public enterprise, but that ivas a decision for the government to make. Once that question is accepted, I think everything else falls into place naturally. In the matter of special depreciation, we did everything that had to be done in order to keep faith with other governments which wished1 to purchase aluminum in this country. Neither the British government nor the Australian government nor the United States government were able to buy aluminum from any source at a price lower than aluminum was bought by them in the Dominion of Canada. I think those members of the committee who heard the evidence will admit that at once.

I ask why the committee spent weeks of its time investigating aluminum when that fact was well known to them. Purchases by other governments were made by government agencies when those governments knew all the facts. Those governments believed they were being fairly dealt with by the aluminum company in this country. There were private transactions between a government agency in the United States and the Aluminum Company of Canada, and between an agency of the

War Expenditures-Mr. Ross (Souris)

British government and the Aluminum Company of Canada. The fact that in one or two transactions I happened to act as the agent for the British government has nothing to do with the Canadian treasury, because anything I did in that connection was done for the British treasury and not for account of the Canadian treasury.

It may have been necessary to go into the cost of ingot aluminum as a factor in the case of fabricated aluminum, although I think even that is rather far-fetched. The committee has obtained reams of evidence on the cost of ingot aluminum. I reiterate that the aluminum situation as it affected the Canadian government was a simple one. We bought about $45,000,000 worth of aluminum, not directly by the government but mainly through contractors, and the report of the committee states that, on balance over the whole transaction, the aluminum sold to the Canadian government by the aluminum company was sold at less than the cost of production. We have bought fabricated aluminum for our aeroplanes cheaper than any other government has been able to buy fabricated aluminum for its aeroplanes. I have ample, evidence to support that statement.

I suggest for the future guidance of the committee that it accept the place intended for it, namely, that it act as an assistant to the treasury of the government of Canada in time of war, in an effort to make sure that improvident transactions are not entered into. My department will welcome any help we can get of that kind. We have in the past, and I can assure hon. members of the committee that we will in future take active steps to correct any situation that the committee may bring before us. If it can bring us &n example of dishonesty I shall be the most delighted man in the world. Members of the committee can regard it as scoring off the government if they like, but I will regard it as a means of recapturing money that has been taken wrongly from the public treasury. I am looking for that sort of thing constantly myself and I shall be very glad to have the help of the committee in that direction. I welcome their investigations of comparative prices. Perhaps we may know of them, but if they are brought forward by a committee we shall take still more energetic steps to correct discrepancies. It does not seem to me that this should be treated as a game in which the effort must be to score against the government. Rather it is a question of getting behind the treasury and helping the Department of Munitions and Supply to save every last dollar that can be saved. I appeal to all hon. members to stop the type of debate we

are having here to-night. This is no time for a contest between one party and another. The situation is that we have a committee, its members drawn from all parties in the house, faced with a common task and we hope working toward a common objective. If the committee will work in that spirit, I can assure its members that their work will be more effective, and that the work of my department will be more satisfactory to the people of Canada.

Mr. J. A. ROSS (Souris):

Mr. Speaker, I have been ruled out of order at other times in trying to discuss the war expenditures committee, and I shall take only a few moments now.

First, I wish to express my disapproval of the manner in which the committee has sat in camera. The committee is composed of twenty-four members-eighteen government members and six for the opposition, all told. The committee has sat in camera, and a wrong impression has been created in that regard because the Prime Minister (Mr. Mackenzie King) speaking yesterday, after citing the manner in which a similar committee sat in camera at Westminster, stated:

There is always opportunity for hon. members to discuss matters before the public accounts committee if they have reason to believe that there are situations which should be discussed there.

All I have to say in reply to that is that on May 19 of last year the hon. member for Vancouver South (Mr. Green) moved and I seconded a motion that the subject of the wartime information board be brought before the public accounts committee for investigation. A lengthy argument ensued in the house, led by the Minister of Mines and Resources (Mr. Crerar), the Minister of Agriculture (Mr. Gardiner) and the chairman of the war expenditures committee, the hon. member for Halton (Mr. Cleaver), supported by the government, and the motion was voted down. They stated that the proper place to investigate that matter was before the war expenditures committee. That was the government's attitude at that time. That was oveir nine months ago. As I stated, the chairman of war expenditures committee argued that the matter should be investigated, if anywhere, before 'the war expenditures committee. Yet to my knowledge the matter has never been investigated before that committee.

There are many other matters to which I should like to refer, but since they are not mentioned in the report I might be ruled out of order. There was the purchase of

764 COMMONS

War Expenditures-Mr. Ross (Souris)

property at exorbitant prices. There has been wasteful and extravagant expenditure of the taxpayer's money in these years of war.

What do you recommend?

Another hon. MEMBER: How do you know?

Mr. ROSS (Souris):

I have all the details of the purchase of Gimli airport in Manitoba. The statement was made here that the government paid an average of $72 an acre for that property.

Mr. GOLDING:

That is not true.

Mr. HOWE:

The hon. member is going back to 1941. What report is he referring to? Certainly not the 1943 report.

Mr. ROSS (Souris):

An hon. member asked me how I knew that there had been extravagant expenditure.

Mr. GOLDING:

The hon. member's statement a moment ago was not true.

Mr. ROSS (Souris):

I will prove before this session is over, if we complete the session, that it is still true. I will produce the evidence at the proper time. I say that there have been many other such matters which are not included in this report which we have never had an opportunity to investigate properly. The point I was trying to make clear was that the Prime Minister stated yesterday that we could discuss matters before the public accounts committee if we had reason to believe there were matters that should be discussed there, and I have already cited one example which occurred last year which the government refused to let us consider before the public accounts committee.

Mr. CLEAVER:

On a question of privilege, Mr. Speaker, I take it that when a member misrepresents a report to this house it is distinctly the privilege of any member of the house to call Your Honour's attention to it. The hon. member has stated that the wartime information board was not referred to a subcommittee for investigation. I ask him to read the minutes of the committee of July 22, 1943, where he will find that the matter was referred to subcommittee No. 3 and on account of the length of the aluminum inquiry it simply was not reached. The members of that committee worked hard-

Mr. ROSS (Souris):

That is exactly the statement I made, that it was not investigated by the war expenditures committee, and the chairman has just borne out my statement.

There is a statement in the report with respect to agricultural implements. I do not

''Mr. J. A. Ross.]

know how much time the committee spent in investigating this matter or how much it cost the taxpayers of this country, but I do know that the average farmer, at least in western Canada, knew the condition with respect to shortage of agricultural implements long before the committee investigated. We have known for some time that agriculture, despite a reduction of twenty-three per cent in labour, has increased agricultural production of this country by some forty-eight per cent. Only thirty-eight per cent of our Canadian farm machinery is produced in Canada, sixty per cent being used in the west and forty in the east. I wish that the committee had spent some of their time in investigating wasteful and extravagant expenditures of the taxpayers' money. If they had gone about that in proper fashion they might have brought about a very great saving to the taxpayers.

I am utterly opposed to sitting in camera, and the very fact that the committee sits in camera is a green signal to those people in this country-and I am sorry that we have them- who are looking for easy money from the public treasury to go ahead and get this easy money where it is possible to get it. If they knew that all these matters would be investigated in the open many of them would never attempt to get this easy money in the fashion in which they got it in the past. The Truman committee in the United States sits in the open, and I think that if we conducted our sittings in Canada in the open we could bring about a tremendous saving in war expenditures to the taxpayers of this country.

Mr. DIEFENBAKER:

Mr. Speaker, there is a question of privilege which I wish to raise. This afternoon while I was speaking regarding air observer schools in this dominion the hon. member for Halton (Mr. Cleaver), who throughout the day has been rising on all kinds of questions, made the statement that what I had stated was not in accordance with the facts and that all difficulties connected with the air observer schools and the very large profits which they had been receiving had been entirely settled in the summer of 1941. I had made the statement, Mr. Speaker, that the matter was not settled until May, 1942, when I brought the matter up in the house, and up until that time the only assistance I received from the hon. member for Halton was interference when I endeavoured to show in this house that these schools were receiving exorbitant profits. I now refer to the pages in question which establish that what I said was in accordance with the facts and that it was not until May, 1942, that this matter was brought before the house by myself.

War Expenditures-Mr. Boucher

I refer first to page 2357 of Hansard of May 12, 1942, where I pointed out the profits these companies were receiving. Then at page 2370 I went on to discuss the set-up of these companies, and I showed where certain parent companies were receiving from $12,000 to $15,000 from the companies that had contracts with the government. Then I referred this afternoon to the fact that while the Minister of National Defence for Air (Mr. Power), thought the statements that I was making were not in accordance with the facts, because he relied upon statements made by the hon. member for Halton which were subsequently established to be far from in accordance with the facts, the minister stated the following day, as reported in Hansard for the same year, at page 2391:

I owe an apology to the hon. member for Lake Centre for having to some extent doubted the statement which he made with respect to air observer operating companies having a parent company.

Then the matter was continued until the minister investigated it, and as I paid a tribute to him this afternoon I stated that he put an end to this condition of affairs that was wrong but was defended by the hon. member for Halton, who stated all too frequently while I was bringing the matter before the house that the profits to which I referred as exorbitant were non-existent. At page 2701 of Hansard of the same year there is a complete answer given by the Minister of National Defence for Air, setting out in detail, on pages 2701 to 2705, the profits that these various companies were receiving. It was not until after May 25, 1942, after I had brought the matter before the house, that finally the minister, recognizing in all fairness that the thing was wrong, put an end to it.

Mr. G. RUSSELL BOUCHER (Carleton):

I did not at first contemplate entering this debate to-night, but, having heard the accusations of the hon. member for Halton (Mr. Cleaver), the present chairman of the war expenditures committee, in connection with the partisanship of this whole expenditures committee, I feel that as a member of the 1943 war expenditures committee it would ill befit one to hold a seat and not rise on this occasion,

I think the debate so far has amply illustrated the confusion, the confounded confusion of the public of Canada and the members of the House of Commons over the whole existence of the war expenditures committee, when you have the Minister of Munitions and Supply (Mr. Howe) start up to-night as he did in this house and ask the war expenditures committee what they were doing in this investigation, what a nuisance they were to him, and what trouble they were raising.

Oh, oh.

Mr. BOUCHER:

I think the very words of the Minister of Munitions and Supply indicate clearly that the war expenditures committee has been functioning as an obnoxious organization for this parliament to have. And then, when we turn around and find that members of this house are being asked to vote concurrence in a report brought in by twenty-four members, eighteen or whom are on the government side and six on the opposition; when 245 members who cannot hear a word of the evidence, who cannot be told a thing about the evidence, who can be given a report and not given an ounce of material wherewith to judge the wisdom or the folly of the recommendations or the truth of the allegations set out are asked to put the seal of their approval, as elected representatives of the people in a democratic state, on a report of this kind, that is to deny the existence of democracy. I say that hon, members have been elected to the House of Commons to perform a function on behalf of the people who sent them there. If the members of the House of Commons are denied the privilege of looking into the expenditures in this great time of expenditures, this time of war, and to report to the House of Commons itself, simply because witnesses are called by the chairman of the committee and told it would be in camera; that is, because they were told >t would be in camera the members of the house cannot be given the data, then there is something wrong with the supremacy of parliament. We are denied the privilege of acting and functioning as we should, as representatives of the people, according to a truly British-Canadian institutional procedure. To think that 245 members of the house, less twenty-four, cannot go into such matters as wartime housing, the manufacture of aluminum, and the building of the Gimli airport, and that such things must be kept secret for fear they should console the enemy; in other words, that we must vote blindly and ignorantly concurrence in the report, does not add up.

I say to the members of this house through you, Mr. Speaker, that when a member of parliament elected to represent not only his own constituency but Canada at large, cannot compare costs, cannot get evidence, whereas the Minister of Munitions and Supply (Mr. Howe) and the parliamentary assistant to the minister (Mr. Chevrier) can rise in their places and give facts from the department which the members of the committee are denied the right to give, there is something wrong with democracy.

War Expenditures-Mr. Boucher

Mr. OHEVRIER:

On a point of order, if the hon. member will read the remarks which I made yesterday he will find that everything contained therein is contained in the report and these are not statements which are not available to the committee.