Right Hon. C. D. Howe (Minister of Trade and Commerce):

I desire to lay on the table two statements relating to the operations of Trans-Canada Air Lines. The first is a copy of the property and equipment budget of the company for the fiscal year ending December 31, 1950. The second is a summary of the operating budget of the company, comparing the financial results of Trans-Canada Air Lines for the fiscal year 1949 with the financial forecast for the fiscal year 1949 and the financial forecast for the fiscal year 1950.

Right Hon. C. D. Howe (Minister of Trade and Commerce) moved

that the house go into committee at the next sitting to consider the following resolution:

That it is expedient to present a bill to amend the Canadian Wheat Board Act, 1935, inter alia, to extend the provisions of "Part II-Control of Elevators and Railways" to August 1, 1953, to extend the definition of "pool period" to include each crop year subsequent to July 31, 1950, and prior to August 31, 1953; to vary the payments by the board to producers selling and delivering wheat produced in a designated area; to extend the provisions of "Part IV-Regulation of Interprovincial and Export Trade in Wheat," to August 1, 1953; and to substitute a schedule of mills and warehouses declared works for the general advantage of Canada for the present schedule to the act.

He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.

Hon. Alphonse Fournier (Minisier of Public Works) moved

that the house go into committee of supply.

Mr. Donald M. Fleming (Eglinlon):

Mr. Speaker, the motion that the house resolve

itself into committee of supply affords members an opportunity of bringing before the house what may be considered to be grievances. It is in that light that I bring before >

the house a matter which has been touched upon on two occasions but in my submission has not received consideration at the hands of the house, and certainly has not received from the government the consideration which the seriousness of the matter justifies.

On March 29 my leader raised the question by way of illustration of the dangers of unlimited and arbitrary powers being vested in government officials without any recourse or appeal to the courts. The subject to which I refer is of course the recent action of the deputy postmaster general in denying to certain persons in the province of Ontario the use of the mails.

The subject was again referred to in the house on April 5, when the leader of the opposition (Mr. Drew), at page 1562 of Hansard, put certain questions to the Minister of Justice (Mr. Garson). My leader said:

I wish to ask the Minister of Justice whether he has given consideration to the extent to which the Post Office Department is usurping the authority and responsibilities of the Department of Justice in acting as a court by making decisions as to the guilt or otherwise of certain people using the mails of Canada.. According to his published statement, the deputy postmaster general is deciding, without notice to the people affected, whether they may or may not use the mails.

To that inquiry the Minister of Justice made this reply:

Without in any way acquiescing in the allegations of fact which the hon. member has made in his question, I may say that the matter to which he has referred has had consideration and is still under consideration.

We have had no information whatever from the Minister of Justice as to the outcome of the consideration which his department is giving to the question. I submit it is a matter of great importance, and unless the government takes the house into its confidence and either justifies what has been done, on whatever grounds may appear to the government to justify the action, or expresses disapproval of the action taken, then I think the house has every right to feel that the matter has not received from the government the consideration to which it is entitled. Certainly when it was referred to in the house by my leader on March 29 in the statement he made at that time it was not even mentioned in any

1638 HOUSE OF

Denial of Postal Services reply by the government, and I think the attitude taken by the government on that occasion was quite cavalier.

Putting the facts briefly, they amount to this: that by decision of the deputy postmaster general-

Mr. Lapointe:

Of the Postmaster General.

Mr. Fleming:

Of the Postmaster General; and I am sorry it is necessary for me to raise [DOT] the question in his absence. We all regret his illness, and if the matter were not an urgent one I would have much preferred to await his return to the house. The Solicitor General is the Acting Postmaster General, and I should like to proceed with it under those circumstances.

By decision of the Postmaster General, the use of the mails was denied to some dozen or more people. I think the circumstances under which that denial came about are less important than the clear and far-reaching issue raised by the fact that the action was taken without giving any opportunity whatsoever to those concerned to take their cases to a court or other tribunal where the issues might be discussed, and where they might have an opportunity to disprove the allegations made against them.

I am not undertaking this afternoon to pass judgment, either for or against, on the actions of the persons concerned. I do not think there is any person in the house who is justified in undertaking to do so without having heard both sides of the case. I doubt if anybody in the house has heard both sides of the case. We have seen in the press the statement issued by the deputy postmaster general several weeks ago in which he said in effect that the reason for this strong action was that the persons concerned, most of whom I believe were brokers, were either sending or receiving through the mails matter designed to promote the sale of certain stocks, which matter he thought contained statements which went beyond the facts. He may or may not have been correct in that conclusion; but not only are those dozen or more people affected by the drastic action taken by the Postmaster General, but there are also a great many more who in the ordinary course are in communication with those dozen or more people through the mails.

In one case, about which I know something, the action taken of course affected the person concerned, and will probably have a very serious effect on his business. It will probably end his business, because anyone in that position simply cannot continue if he is denied the use of the mails. The point which I think should be of interest to all members of the house is that about a thousand people

were affected by the denial of the use of the mails to that one individual. Let us not think of this simply as a matter of a dozen brokers doing business. It is a question of the rights of those with whom they are ordinarily in contact and who have certain interests at stake in the light of the treatment that their mail receives. In that one case about a thousand people are involved. They are losing money, and may lose investments as a result of the action taken with respect to one man.

I emphasize again that I am not undertaking to pass judgment on the way any of these people conduct their business. No member of the house is going to look with equanimity on the attempt of anyone to use the mails for a fraudulent purpose. We have laws to deal with such cases. We have the Criminal Code, and, as to the rights between broker and client and the measure of responsibility that those engaged in the purchase and sale of stocks owe to the public, we have in all provinces-we certainly have in Ontario -securities laws and securities officials. This case may be, and no doubt is, one for the securities commission of the province of Ontario, which has ample power to deal with brokers who are carrying on their business in violation of the law or without due regard for honesty in business dealings. Therefore in my submission it is not necessary for the Post Office Department to undertake to make laws in substitution for the Criminal Code of Canada as enacted by this parliament, and in substitution for the laws of the province in relation to regulation of transactions involved in the purchase and sale of stocks and the control and regulation of the activities of those engaged in that business.

I have mentioned that in the light of this arbitrary action there is no recourse whatever to the courts on the part of those concerned. No opportunity is given them to seek, at the hands of the courts of this land, an adjudication of the question whether they are guilty of the offence charged against them. In that respect, sir, in my submission it is striking at the very heart of the freedoms that indi-' viduals enjoy in this country, at the rights that ought to be guaranteed them beyond any attack at the hands of officials of this government.

Hon. members who take the trouble to read the provisions of the Post Office Act will see that where parliament has created offences under this act, parliament has been careful to define the penalty in each case and to enact laws leaving to those charged with such offences an open door to the courts. In the action taken in this instance, however, there is no open door to the courts.

Those affected by this action on the part of the department have nowhere to go. By the action of the Postmaster General they are marked and labelled as culprits and malefactors, and are given no opportunity to place their side of the case before a properly constituted tribunal. They have no appeal whatever.

As to the spirit in which the action has been taken, I have only one observation to make, because I think it is indicative of the mentality of government officials when these drastic, sweeping and arbitrary powers are placed in their hands, far beyond challenge in any court. I am informed that the statement was made by the deputy postmaster general in [DOT]the presence of a former Liberal member of this house that he did not care what the Supreme Court of Canada or any other court might say in this matter; that he had powers given him under the act and regulations, and he would use those powers without the slightest regard for what the courts might say. If the Department of Justice is prepared to hold that the action taken by the Post Office Department in this case was within the terms of the Post Office Act or any regulations issued under it, all I have to say is that parliament ought to deplore that in enacting this legislation a previous parliament went much further than it ought to have gone, certainly much further than it would have gone, I am sure, if it had foreseen the use that would be made of those powers and the advantage that would be taken of them in this arbitrary way.

When I hear of government officials holding senior positions, having in their hands the interests not alone of these dozen or more people but of a great many other citizens doing business with them, taking that arbitrary attitude and saying: Well, the courts have no control over me, and I do not care what the courts say, then I think it is high time that parliament took cognizance of the situation and asked itself, in the first place, whether it would be justified in leaving on the statute book measures which are capable of such arbitrary use, and, in the second place, whether it should tolerate the retention in office of officials who take such a high-handed attitude. I am afraid we are seeing, in this attitude on the part of one official, the result of the schooling he has received over the years.

The extent to which this action had its inspiration in requests emanating from the United States has not yet been fully clarified. The fact of the matter is that this action accompanied somewhat similar steps taken by the United States authorities, of course without consultation with the officials of the securities commission of the province of Ontario. I am

Denial of Postal Services sure every member of this house always wants to approach matters of common concern as between Canada and the United States in a spirit of the utmost co-operation, but there are limits to the extent to which officials of the Canadian government are justified in acting at the request of officials of the United States government. Our principal responsibility is to our own people. Those who sat in the last parliament will not soon forget that an extradition treaty which would have placed Canadian citizens substantially at the mercy of the securities officials of the United States was actually submitted to a committee of this house for review. If I remember rightly, that was during the session of 1945. After a detailed and thorough investigation of that extradition treaty and its implications with respect to citizens of Canada, the external affairs committee recommended to this house that it should not be ratified or permitted to come into force in Canada. Why? Because it placed Canadian citizens virtually at the mercy of the securities laws and securities officials of the United States. I think that committee adopted a very sensible attitude in saying that the people of this country should be guided by the laws of this country. When they offend or infringe our laws, they should be dealt with according to those laws; but while residing in Canada they should not be subjected to the laws of another jurisdiction.

In conclusion, Mr. Speaker, I say to you that this is much more than a question of the rights of some twelve people, and much more than a question of the rights of those doing business with them. When you see the Post Office Department simply stepping in and saying to a person that he shall not receive any mail, you realize how drastic that action is, and how seriously it challenges what we conceive to be the fundamental freedom of the citizens of this country. Parliament must take cognizance of this occurrence. Parliament ought to express itself as completely disapproving arbitrary actions of this kind. Parliament should say to the Post Office Department: We have laws in this country to deal with matters of this kind; if there has been an offence against the Post Office Act or against the Criminal Code, the law should be put in motion and those persons prosecuted to the limit of the law. If it is a matter of improperly imposing upon clients or those doing business with them, then I am sure the securities commission of the province of Ontario can be trusted to take the necessary action to deal with brokers who have offended against the law. But, sir, I submit that parliament has no right to tolerate a situation in which people find themselves virtually denounced, and certainly held up before the public malefactors and felons, when no opportunity whatever is

Denial of Postal Services given them to disprove the charges. If the law permits what was done in this case, the law ought to be changed. Parliament ought to put it beyond the arbitrary reach of any government official to place people in such a position that they may be virtually found guilty and denounced without having had any opportunity to submit their case to the courts of the land.

Mr. Coldwell:

Mr. Speaker, I do not want to pursue this particular matter. I wish to raise a different question.

Mr. Garson:

If my hon. friend is going to pass to another subject, perhaps I might be permitted to reply.

Mr. Coldwell:

That is exactly why I mentioned it. I do not want to lose my right to speak.

Mr. Speaker:

If another subject is introduced at this time, then the house cannot revert to this subject upon this motion. _ I understand that the Minister of Justice wishes to speak on the question which was raised by the member for Eglinton?

Mr. Garson:

Yes.

Mr. Speaker:

Very well.

Hon. Stuart S. Garson (Minister of Justice):

Mr. Speaker, that the member for Eglinton (Mr. Fleming) has brought up a matter which we in the Department of Justice have regarded from the outset as one of considerable importance, I think no member of the house will doubt. That the hon. member has been fair enough in his examination of the details not to pass judgment for or against until he has the facts before him, we shall also all agree.

I want to confess at once that I find myself at the moment in a position of considerable embarrassment, which arises from these facts. When this matter was brought to the attention of the Department of Justice, it appeared that some time previously the Broker-Dealers Association had interested itself in this order, and, through its counsel, Hon. Charles P. McTague, K.C., made representations to two outstanding civil servants. I was informed and believed, and the facts proved that the information was correct, that in due course Mr. McTague would write to me setting forth the considered views of the Broker-Dealers Association upon this important matter. Being desirous, so far as it lay within the power of the justice department, to hear both sides of the case, we did suspend any opinion that we might reach in the matter until after receipt of that letter. I have been waiting for the letter from Mr. McTague, and it was for that reason, amongst others, that when the question was raised by the leader

of the opposition I indicated that the matter had been under consideration and was still under consideration.

As a matter of fact the letter from Mr. McTague did come forward, but only a few minutes before noon today. I have it in my hand, but I have had no opportunity of reading it, let alone discussing it with my colleague the Acting Postmaster General, or with any of his officials or with any of the officials of my own department. The letter is four and a half pages of single-spaced typewriting. I have no doubt it deals in a comprehensive and exhaustive manner with all the important points, some of which have been touched upon by the member for Eglinton, as to why the act itself may be considered unfair from the standpoint of the broker; and, in addition, to the question whether the way in which it was invoked in the present case may also be considered unfair.

In fairness to all concerned, and as well to the members of this house, I think it would be much better for the government to make a statement on this matter after considering not only the excellent statement made by the member for Eglinton, which I am sure he himself would be the first to admit might not be as comprehensive as that of counsel who had gone into the matter thoroughly, but also in detail the arguments presented by Mr. McTague. If the members so desired we could file the McTague letter, and then make a statement in which we would take up point by point all those allegations which he makes. I suggest that is the course we should follow. I would hope then that the judgment which my friend the member for Eglinton has so far reserved might be exercised on a complete statement of the facts and the law; because it then would be worth while for him to exercise his judgment. He would not then be making the statements he has made this afternoon, which I think with all respect he would find some difficulty in supporting, about what Mr. Turnbull, the deputy postmaster general, is supposed to have said to some person concerning his position in relation to the superior courts. He would not then make the statements he has made concerning the position of the people other than dealers who are affected by these orders, nor would he make the slightest suggestion that this order was made at the request of the authorities of the United States of America.

As the member for Eglinton has indicated, and I am in entire agreement with him, this is an important matter, involving, amongst other things, that most important question of individual rights of the subject. It is a

matter in respect of which I think it is desirable that we have a careful statement of the law and facts before we reach any sort of judgment, even the collateral judgments such as my friend appears to have reached. I suggest therefore, Mr, Speaker, that within a day, or perhaps two days, I should on a similar occasion on going into committee of supply, after conferring with the Post Office Department as well as with our law officers, and after consideration of the full arguments which Mr. McTague has developed, make a statement first of all of the law and the facts, and then examine these important points which my hon. friend has raised.

Let us go into the merits of the section involved, as well as the question whether the action which has been taken in this regard was within the law as it now stands. Perhaps the most important question of all is whether the set of facts with which the Postmaster General was dealing warranted the drastic action which he took-because the action was certainly drastic, under powers which are drastic. It may well be, and indeed I suspect it may prove to be the case, that the set of facts upon which that action was taken were rather serious, even heinous. I am not suggesting for a moment that the matter should be prejudged. Indeed, as the member for Eglinton pointed out, it is desirable that it should not be. I think the proper method is to meet the arguments which we have in this letter, and indeed the arguments of my hon. friend as well, point by point, both as to the law and as to the facts, when we shall have had a reasonable opportunity of considering them.