Right Hon. J. L. ILSLEY (Acting Prime Minister):

I intend to deal in my budget speech with the matter referred to in the hon. member's questions.

Mr. GRAYDON:

When will that be?

Mr. COLDWELL:

When may we expect the budget?

Mr. ILSLEY:

I shall announce that date just as soon as I am in a position to do so.

Mr. D. G. ROSS (St. Paul's):

I should like to direct a question of the Minister of Reconstruction. It arises out of a statement made by the deputy coal controller, Mr. Ian MacLaren. He said that widespread unemployment would result next winter because of the coal shortage. He said that it is not possible to assess fully the tremendous damage that the recent bituminous coal strike has caused Canadian industry, because of the possible shortage of 5,500,000 tons of coal. Would the minister comment on what his associate, the deputy coal controller, has said, and give us some idea of what our people are to have in the way of coal next winter?

Hon. C. D. HOWE (Minister of Reconstruction and Supply):

The statement of the coal controller is quite correct. We are behind in normal shipments of coal from the United States to the point of about five and a half million tons. The fact that there is a seamen's strike on the great lakes is putting us still farther behind. It seems impossible that we can make up the shortage between now and the time that coal will be required. We are doing the best we can. It is quite useless to ask me to-day where we shall stand next December. I have not the faintest idea, but I can assure hon. members that anything that, can be done will be done to provide heat for domestic users and for industry during the next cold season.

Mr. ROSS (St. Paul's):

If I may ask the minister a further question, is anything being done to get coal from Alberta, for instance? What effort is being put forward as far as that is concerned?

Mr. G. R. PEARKES (Nanaimo):

Mr. Speaker, the hon. member for Vancouver South (Mr. Green), speaking yesterday in the debate on the motion for second reading of this bill, called attention to one of the objections to it, in that no provision is made for the payment by crown companies of any taxes, federal, provincial or municipal. I intend to devote my brief remarks this afternoon to that aspect of the bill before us, and that aspect only. I believe it is of interest to hon. members on both sides, since I notice on the order paper in the name of the hon, member for Vancouver North (Mr. Sinclair)

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a notice of motion referring to the heavy and unequal burden that is placed upon certain municipalities by these tax exemptions. This comes pretty close to home, because just across the border from my constituency is a small municipality of some 1,500 ratepayers. This I will use as exhibit A to show the burden which may be placed upon a small municipality which has within its borders a large number of government-owned buildings.

I desire to refer to the municipality of Esquimalt as the example, I might almost say the horrible example, of a small municipality which is throttled by the octopus of government-owned tax-free property. Out of a total assessment on land in 1946 of $2,000,000, nearly $700,000 is crown property. Referring to the improvements on this land, out of a total assessment of $11,000,000 for improvements, $9,000,000 is represented by improvements on crown properties which were erected prior to the outbreak of hostilities. That figure does not include improvements which have been erected during the years of war. It is impossible to give an accurate estimate of what those improvements might amount to, but a rough estimate would easily place them at an additional million dollars. Disregarding those improvements and dealing with the land alone, this small municipality suffers an annual loss of $22,912 at the present mill rate. During the war many of the choicest building sites and waterfront locations were expropriated by the government for the construction of crown properties, and in this connection there is an annual loss of revenue amounting to $7,500 from land which has been appropriated.

It is of little value to say that the' wages paid those employed in these government owned properties increase the wealth of the merchants of the community, because that is not so. Those working there are principally men connected with the services. The navy have their barracks and the army have their fortifications in the municipality of Esquimalt. If these men are married they have their families living in the nearby city of Victoria. When they wish to spend their money for recreational purposes they do so either within their own barracks or in the city of Victoria. Yet this small municipality has to maintain a road system which carries much heavier traffic than it was designed to carry, because of the government-owned properties now located within its boundaries; it has to maintain additional police services; it has to look after the additional garbage, lighting, and perhaps hospital and school services.

I do not intend to elaborate on this; I merely want to say that this municipality is

an example of what may happen if a small community finds itself with a large number of government buildings or crown companies established within its boundaries. The municipality of Esquimalt will wonder how far these crown companies are going to be extended. They will look tc their ship yards and to their dry docks. They will ask whether these ship yards, now run by Yarrows, are going to be turned into a crown company, and if so, will they be free of taxation. I believe that if hon. members of this house will consider the position in which Esquimalt has been placed for many years; if they will realize the burden borne by the municipal council, which has not been able to find any solution to the problem though in past years appeals have been made to this government for grants, they will think twice about giving the government carte blanche in regard to the establishment of crown companies in other small communities.

As I said, I intended to deal with only this one phase, because I feel that other phases have been dealt with adequately and effectively by other hon. members. Therefore I rest my case at this point and ask hon. members to bear in mind the example I have given. This is not the place to suggest remedies for the particular situation at Esquimalt. That I intend to do on a later occasion.

Mr. DONALD M. FLEMING (Eglinton) : Mr. Speaker, some remarkable attributes of the present bill have been brought to light in the course of the debate. If one is to judge by the effect it has had upon certain quarters of the house, thfen indeed it is a most versatile bill. It is an inspiring bill: it inspired the hon. member for Vancouver East (Mr. Maclnnis) last night to deliver a eulogy on socialism and on the minister who introduced the bill. It inspired the Minister of Veterans Affairs (Mr. Mackenzie) to embark upon a eulogy of the minister, and upon what Re, I am sure, on calmer reflection will wish he had not indulged in, namely, comments of a personal nature on the observations made by an hon. member on this side of the house when that hon. member urged that the house do not give second reading of the bill.

Reading Hansard, I find in the remarks last night of the Minister of Veterans Affairs that he invited me not to participate in the debate at that particular juncture. Were he in the house at this time I should have liked to assure him that my failure to participate in the debate at that point was in no way attributable to his invitation. In fact if his remarks had not been lost in the din in the house at the time, I should have been most happy to participate then. -

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I should like, if I may, to contribute by way of clarification of the essential issues presented on the motion for second reading of the bill. I regret to say that those essential issues have been greatly beclouded during the debate.

Mr. HOWE:

Hear, hear.

Mr. FLEMING:

I am glad the Minister of Reconstruction (Mr. Howel agrees with me. I should like to dispel those douds, so far as I can, and direct our thoughts to what exactly is involved in the bill before us and what is the principle thereof.

The justification offered by the Minister of Reconstruction for the bill, as stated by him in the course of his observations on the resolution, is that the method of joint stock company administration is a more useful vehicle in the administration of enterprises of certain kinds carried on by the government than is direct administration under his department. That, I take it, is the gist of the minister's remarks, and the reason he has given for introducing the bill.

I would ask hon. members to look farther and to see that that is not the issue on which the house is now deliberating. The issue presented by the bill is not whether the method of joint stock company administration shall be preferred in respect of certain forms of government enterprise to direct administration by a government department; rather, it is the issue as to whether parliament shall hand over to a minister the power to continue to set up crown corporations and to finance them without specific reference to the house having been made in advance. That is the issue.

It is all very well for the minister to make a speech outlining the advantages of the corporate form of administration. But again, that is not the problem presented by the bill. We can have those advantages and at the same time stay within the four corners of the sound principles laid down last night by the hon. member for Vancouver South (Mr. Green) in his most useful and thoughtful contribution to the debate. .He made it clear- and I ask hon. members to underline what he said-that in any specific situation in which the Minister of Reconstruction or any other member of the house thjnks administration can better be performed by a joint stock company controlled by the crown than by direct administration under a department, then the house is prepared to review that situation and that proposal on its merits; and, if satisfied that the company form of administration is to be preferred it will give effect to the minister's request. But I take it, Mr. Speaker, that we are not prepared, without 63260-136

regard to such situations as may arise, to hand over holus-bolus to the government the power to go on setting up and financing crown companies-

Mr. McILRAITH:

There is no such power in this bill.

Mr. FLEMING:

-without reference to parliament. In other words the principle put forward by those of us who oppose second reading is this, that parliament must retain control. It must be for parliament to decide whether in any particular situation a crown corporation is to be set up. That, we think, is the parliamentary method; that, we think, is the sound democratic way of meeting the problem.

The government may be assured parliament will give careful study to any such bill presented. Indeed, parliament has already given proof of its willingness to give careful consideration to proposals for the incorporation of crown companies on a statutory basis. For instance, at the last session of parliament we passed a bill to incorporate the Central Mortgage and Housing corporation. Parliament gave consideration to that bill, approved the principle on the 'whole, and in that particular instance established a statutory corporation. Other corporations have been established in the same way. Surely the names of at least half a dozen corporations spring to one's mind when one thinks of crown corporations established under special acts. One thinks immediately of the Canadian National Railways; one thinks of Trans-Canada Air Lines; one thinks of the Canadian Broadcasting corporation. I draw attention to the fact that order No. 21 on the order paper is a resolution standing in the name of the Minister of Trade and Commerce (Mr. MacKinnon) setting out a proposal to establish a corporation to be known as the Canadian Commercial corporation. It would not be proper for me to make any comment on the merits of that resolution, but I do say that the method is sound, and that the Minister of Trade and Commerce is in that respect following a sound course. In the bill now before us the Minister of Reconstruction and Supply is following an unsound and unparliamentary course. I have placed before the minister these various examples of statutory corporations, the establishment of which parliament has approved, and I point out to him that it is a method which ought to be followed in all cases.

Does the minister say there is no danger in this bill? That, I take it, will be one of his arguments. As a matter of fact he will be hard put to it to convince the house that there is no socialistic danger in the measure,

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in view of the eulogy, concerning the bill and the minister who introduced it, delivered in the house last night by the hon. member for Vancouver East. I do not believe that at this session of parliament, or in the first one, we ever listened to such transports of delighted oratory as we listened to last night from the hon. member for Vancouver East. It seemed as though the millennium had arrived. I thought he was about to burst into a nunc dimittis. Actually it seemed that the bill gave him everything he had been waiting for so long, everything he had been praying for, as an advocate of and a believer in complete socialism. .

I fancy that having delivered that speech the hon. member for Vancouver East must have realized that it presented some embarrassment to the minister whom he had so fulsomely eulogized. It will not have escaped the notice of the house that the next member of the C.C.F. who spoke, the hon. member for Qu'Appelle (Mrs. Strum), was quite restrained in her favourable comments on the bill. As a matter of fact the tone of the remarks of the hon. member for Qu'Appelle was to this effect: Oh, well, after all, this bill has a quite limited application; if you look at the minister's remarks you will see he intends to exercise these powers only for the purposes of continuing the three corporations, Polymer, Eldorado and Canadian Arsenals Limited, which now owe their existence to orders in council. The reason is obvious. The minister must have been embarrassed by the eulogistic oratory of the hon. member for Vancouver East, and the apparent purpose of the hon. member for Qu'Appelle in speaking was to play down somewhat the effect of the bill.

I listened with interest to some of the remarks from the opposite side of the house. It was suggested that the view put forward by the hon. member for Vancouver South was based on a complete antipathy toward government ownership. Obviously that was not a fair interpretation of the remarks of the hon. member for Vancouver South. Where a situation calls for incorporation by statute of a crown company, then I take it that all parts of this house are prepared, to entertain such a measure, review it and bring their best judgment to bear upon it. But it is the view of those of us who sit in this part of the house, and perhaps it is also the view of the Social Credit group, that in such a situation this House of Commons is going to see fair play for those who may be adversely affected by the bill. In - this instance I am thinking particularly of the municipalities.

There have been some who have expressed the view that if this bill should be adopted

we might expect corporations to be set up by a number of ministers. It may be a perfectly sound view, but I am more disposed to think that the Minister of Reconstruction will retain control in his own department of all corporations which are likely to be set up. I say that because he has retained to himself the two corporations which have fallen most closely under his administration by taking them out of the control of the minister who presides over the department to which they are assigned by statute. I refer to his having retained control, when he gave up the ministry of transport, of Trans-Canada Air Lines and radio broadcasting. I think it is not unlikely that if the Minister of Reconstruction should go on incorporating companies and proceed to take over the responsibility of some other portfolio, he will take with him into the new department all companies incorporated under this measure.

It is not enough to have assurances as to any limitation of intent on the part of the minister. I am confident that when the Minis- . ter of Reconstruction rises to speak he will say again to the house: We have in mind at the present time only three comapnies, the three I have referred to; it is not our thought at the moment to extend in the next two or three years others of the thirty-one corporations set up under orders in council during the war. That may be his view at the moment, but I suggest it is the duty of this house to go much farther in testing the propriety of giving endorsement to the principle of this bill.

The minister asks for broad powers, but does not think he will use them all; that is the pith and substance of the view which has been put before the house by the government.

I suggest that that should be enough to defeat this bill in principle. Parliament has no business whatever giving powers to the government for which the government cannot make out an appropriate case right now or within the period that may expire before the next meeting of this house.

The minister says in effect: this gives us general powers for the future to bring new corporations into existence; it is general in its application. I say that that is not good enough. When the minister makes out a case, as he considers he has, for the continuation of three crown corporations, then I say his case is confined to the continuation of those three companies. The proper method for him to follow would be to bring in three separate measures providing for the continuation of the corporate existence of those three companies. This method would be in keeping with the sovereignty of parliament.

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It is not good enough to have the statement of the minister to the effect that there has been a good deal of exaggeration of the effect of the bill. That is no answer to the clear argument, based on the terms of this bill, that the bill gives to the minister sweeping powers which this parliament ought not to be handing over to any minister. There is not a dictatorship on the face of the earth that did not begin as a benevolent dictatorship. Dictatorships never get an opportunity even to begin except on the basis of being benevolent. I do not suggest that we are going to open the way to a dictatorship of the kind that was defeated at the hands of the united nations in the recent conflict, but we have to have regard for the dangers inherent in a bill of this kind. There' are always those, such as our friends of the C.C.F., who are ready to repeat the old, old story, "It can't happen here." If enough bills of this kind are introduced, if powers as sweeping as these are given to enough ministers, it can happen here. It is our duty as the House of Commons to see that it does not become possible for dictatorship in any form to happen here in Canada.

Let us have regard to the particular scope of this bill. As was pointed out by the hon. member for Vancouver East, this bill and the two accompanying bills-one having to do with the incorporation of an atomic energy control board, and the other having to do with an amendment to the National Research Council Act-form a pattern. The other two bills give those bodies, with the approval of the minister, the widest possible powers to set up crown corporations. This bill will permit the governor in council to finance crown corporations to the extent of a million dollars each, half a million dollars for capitalization and half a million dollars for works. There is the pattern.

Are they limited in the field they are to cover? The bill before us does not tie the government down to any particular field. Whenever the government holds the power to establish a corporation under part I of the Companies Act, it will at once be able to apply all the provisions of this bill. There is no limitation as to the field; the field is broad, as broad as Canada. If other ministers obtain power by statute, or by order in council having the force of statute, to set up corporations within the ambit of their respective departments, all the provisions of this bill can be put into effect by them in the way I have mentioned. Every power provided by this bill will under those circumstances be enjoyed by every minister with respect to every cor-63260-1361

poration whose stock is owned completely by the crown. That is the situation in naked fact.

I am not commenting on the methods of administration of certain fields of public enterprise. I have made it quite clear, Mr. Speaker, that I am dealing with the principles presented; with the question whether this House of Commons should hand over to the minister these broad powers without reference to parliament. In one interjection he made last evening the minister sought to indicate that this bill of itself does not create the power to establish the companies. He indicated that the scope of the bill is confined to financing such companies and clothing them with certain additional powers not related to the original incorporation. Now, let us examine , that-not, I trust, in any spirit of hair-splitting, but having regard to the realities of the situation.

We have at the present time, or have had established by order in council under the authority of the War Measures Act, thirty-one companies which came into existence by what I understand to be the following method. Under authority of the War Measures Act the governor in council passed an order in council authorizing application to be made to the Secretary of State under part I of the Companies Act for incorporation of a company for certain purposes and under a certain name. Those corporations came into existence by letters patent. At the present time, we are told, twenty-six of them are in the course of being wound up and their charters surrendered; two are to continue for a limited period, and three for an indefinite and perhaps permanent period.

Now, if this bill does not give, as the minister seems to suggest, power to incorporate companies, it certainly does not give power to continue companies in existence. The three corporations to which we have referred particularly-and we might include the two others, Wartime Housing Limited and Park Steamships, which are to continue for a period of several years at least-these five corporations must find, on the minister's argument, some basis for continuing their corporate existence. Where do they get it? Are they to go on simply on the basis of having been brought into being under part I of the Companies Act pursuant to an order in council passed . under the War Measures Act? If they do, I cannot square that with the proposition that the minister suggested last night in his interjection. If this bill does not give power to establish or incorporate companies, it does not give power to continue those corporations; and I am arguing that either the Minister of Re-

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construction is going to carry into peace-time corporations which owe their existence entirely to an order in council passed under the authority of the War Measures Act, or he must come back to parliament in the case of each of these companies for a special act continuing or giving statutory authority for the continued corporate existence of these three companies. If the second alternative is correct, and the minister must come to parliament for authority to continue those three corporations, would not the sensible course be that suggested by the hon. member for Vancouver South, namely, to introduce in the case of each of these companies a separate bill and to get away entirely from the vice of the bill which is now before us?

If the first alternative is the one on which the minister relies, namely that crown corporations brought into existence in war-time pursuant to authority contained in an order in council passed under the War Measures Act, can continue as such, then I think it is quite clear, certainly to every lawyer in the house, that he has similar powers under the National Emergency Transitional Powers Act passed at the first session of this parliament. And if he has powers under that-which I think is clear to all, if his reasoning is correct-the governor in council has the power right now to go along setting up more crown companies under the authority of that act, bringing them into existence with the machinery contained in part I of the Companies Act. There is the situation. If the minister is correct in saying that this bill does not permit the incorporation and the bringing into existence of new corporations, he still has that power under the emergency legislation passed at the first session of this house; and it is clear, on the record of this government, that the minister will not hesitate to use that power if so minded in any particular situation.

That is not the whole story, either. I am pointing out the breadth and the scope of this bill if we approve it in its present form. If we approve it, what is the other aspect? It is this, that there are two other bills which are being considered along with this bill. Both bills make provision for the incorporation of an unlimited number of limited companies. I ask you to have regard in that respect to the words used by the Minister of Reconstruction himself at page 1897 of Hansard. He was then dealing with the bill to empower the national research council to establish crown companies with the approval of the minister himself. When the minister was asked as to the extent and the scope of this provision, how far it was

intended to extend it or within what area it was intended to confine it, what did he say? These are his words:

I have no desire to limit the number of companies which the research council can have. If it needs twenty, then it should have twenty.

And, Mr. Speaker, by parity of reasoning, under the measures now before this house you can have scores and scores of companies set up under these acts, power being given under the bill now before us to finance them up to the extent of a million dollars apiece without reference to parliament, and thus to transact a substantial part of the business of government in this country without reference to parliament in advance, without seeking parliamentary approval, and for that matter, to embark on an excursion into socialism without consulting parliament. That is the naked reality of the principle of this bill. There is no escape from it, and it is not good enough for the minister to say: Well, I do not intend at the moment to give it that wide application. That is not good enough. The minister has no right to ask parliament for these broad powers when no present justification for them exists. We say, Mr. Speaker, that the proper method in any particular situation requiring it is the creation of a statutory corporation.

I want to say a word on one particular vice of this bill which has been already referred to by certain hon. members. We are being asked to give the governor in council power to establish an unlimited number of crown companies for purposes which are not disclosed, and to do so on the basis that not one of these crown companies shall be subject to taxation by a province or a municipality-yes, more than that, shall not pay anything by way of taxes to such bodies. I asked the Minister of Reconstruction and Supply in the committee stage of this bill if it was not the intention of the government to insert a provision in this bill that such corporations should submit to taxation, should agree to pay amounts in lieu of taxes to municipalities in which they might acquire property; and the minister said, no. I want to deal with that for a moment.

The hon. member for Vancouver South has dealt with the situation in the city of Vancouver. The hon. member for Nanaimo (Mr. Pearkes) has dealt with the situation in Esqui-malt. That situation is duplicated many times over in the municipalities throughout the length and breadth of this country. Take for instance the city of Toronto. At the present time property owned by the crown in the right of the dominion in that city, including crown companies, totals $15,187,981-over $15 million.

Go vent men I Companies

Mr. HOWE:

I suggest that no crown company owns any property in Toronto not subject to taxation at the present time.