Mr. Chevrier:

I should not like to lose my right to close the debate, but I do not want to close it at this stage.

Mr. Speaker:

If the minister speaks now,

he will be closing the debate, unless he has unanimous consent of the house to make a statement and then have discussion.

Mr. Graydon:

By consent.

Mr. Martin:

He wants to explain something.

Mr. Speaker:

By consent.

Mr. Chevrier:

If the house would like to

know now, I may say that I intend to accept the suggestion that the matter be referred to the committee on external affairs, which I think is an excellent one. But in case there might be some misunderstanding as to the countries that have already indicated their intention of ratifying this agreement, I should like to put on the record the names of those countries, because there are far more than I mentioned yesterday. In fact the United States has consented, and that seemed to be the doubt in the mind of the hon. member for Peel (Mr. Graydon).

Mr. Graydon:

I understood they had not

ratified it.

Mr. Chevrier:

Thirty countries have ratified the convention. I named several yesterday, but there are a large number that I did not mention. Perhaps I could put them on the record now. They are, in addition to those previously mentioned: Byelorussian

Soviet Socialist Republic, Egypt, Finland, France, Greece, Iceland, India, Iraq, Israel, Lebanon, Mexico, New Zealand, Roumania, Switzerland, Thailand, Turkey, Ukrainian Soviet Socialist Republic, Union of South Africa, Union of Soviet Socialist Republics, United Kingdom, the United States and Yugoslavia.

The Secretary of State for External Affairs (Mr. Pearson) tabled this agreement over a year ago. I say that in answer to the suggestion that this matter is being brought down in the later days of the session. There was an opportunity of considering this matter before-I had the document before me-at least upwards of a year ago when the document was tabled in the house.

In view of the suggestions which have been made, and which I think are reasonable, it might be well that the committee on external affairs study the contents of the world

Department of Transport Stores meteorological convention. With that purpose in mind I move that this convention be referred to the committee on external affairs.

Mr. Speaker:

I understand that this motion [DOT] is presented and accepted with the unanimous consent of the house.

Agreed.

Motion (Mr. Chevrier), for reference of convention to standing committee on external affairs, agreed to.

Hon. Lionel Chevrier (Minister of Transport):

When this matter came up for discussion on May 5, I believe there was some confusion-in fact, a great deal of confusion -in the minds of some members; and I would not be frank if I did not admit that there was an equal if not greater amount of confusion in my own mind. I think that can be readily understood when one realizes that this bill has reference to two departments besides the Department of Transport, namely, the Department of Finance, and the division of the Auditor General. In fact it is a matter which concerns the Department of Finance far more than it does the Department of Transport; it is more or less incidentally that it concerns transport, because of the situation in regard to the stores of that department.

During the debate a number of questions were asked, and perhaps, before dealing more particularly with section 1 of the bill, I should try as best I can to dispose of some of the apprehensions and misunderstandings that were voiced during that discussion.

In the first place I should like to say that there is, with reference to the department, what is called a stores capital fund. The stores capital fund is exactly the same thing as the advances to the Minister of Transport mentioned in section 1 of this bill. Thi stores capital fund means the total sum required (a) to cover the value of the inventory of stores on hand, which has already been indicated as $3-2 million, or, roughly speaking, $3 million; (b) to purchase stores in order to maintain stock levels required by the operating services; and (c) to cover the value of stores issued until payment for

EMr. Chevrier.]

them has been received from the appropriations or the votes under the various items.

The working capital means that portion of the stores capital fund which is not tied up in stores stock. In other words, with reference to the bill now before the committee, it means $2 million; because the amount tied up by stores in inventory amount to $3 million. The revolving fund means the same as stores capital fund; and the advances, as I have already stated, means exactly the same as the stores capital fund.

The Department of Transport includes three major operating services: canals, marine and air services. Because there is a considerable degree of uniformity in facilities operated by the canals service, the stores requirements in the canals service are fairly similar and fairly simple. They are a little bit more complicated when one gets into the division of marine and air services. Under marine, for instance, stores are required for various facilities known as aids to navigation, such as lights, lighthouses, lightships, beacons, buoys and fog alarms. Then there is the group, still in marine services, having to do with dominion icebreakers. They have a varied and long list of stores required for those operations. Then the air service embraces the operation of airways, airports, radio stations, meteorological stations, telegraph and telephone services, which require a broad range of stores. There are nearly 2,800 operating stations and establishments in the department, and they are divided as follows: 62 for canals; 1,164 for marine services; 1,544 for air services.

The purpose of this bill is to provide for a consolidation of stores in one account. The principle has already been approved in the two measures that have come before the house previously, and I will not deal with that feature. But with reference to this bill in particular, the purposes are manifold. First, it is to enable the establishment of an effective central purchasing control over the purchasing of stores. Stores purchased are paid for out of the stores capital fund, and the value of such stores, when issued, is charged to the appropriation of the services concerned and credited to the stores capital fund. The purpose of the bill is also to promote economy through bulk purchases; also to facilitate the transfer of stores from one depot to another; to promote the orderly planning of purchases of stores that are required for certain seasons of the year; and finally, to facilitate the acquisition of supplies for outlying districts.

I shall now deal more particularly with section 1, which reads as follows:

The amount of advances to the Minister of Transport shall at no time exceed $5 million.

The proposed $5 million would really be a stores capital fund, against which the present inventory value of approximately $3 million would become a first charge, leaving a balance of about $2 million of working capital which the Minister of Transport may draw upon for the acquisition and replenishment of stores as required from time to time. It is money that is voted to the minister for use; it is money that is in the Department of Finance in the hands of the Minister of Finance, which may be advanced to the Minister of Transport from time to time.

He may not need the $2 million; he may need only a small portion of it, but the information that has been provided to me is indicative of the fact that he will require it for the reasons that I shall give at a later stage.

May I revert for just a moment to the position which existed prior to the passing of this act-for instance, the position which existed in 1937. The stores act of that year provided in effect for a similar capital fund of $1,957,368, composed of inventory of $957,368, and, in addition, an authority to obtain advances from the Minister of Finance of $1 million. In other words, the position was: inventory of $957,368, plus advances to the minister of $1 million.

The information that has been given to me is that because of the advances, as indicated by the dominion bureau of statistics, in commodity wholesale prices, there has been a general increase in price, and on this basis the equivalent volume of stocks would be valued today at slightly more than $2 million. By adding to this figure the value of the inventories of stores taken over in Newfoundland about a year ago, which was roughly $1,200,000, we would have a total inventory of $3,200,000. This figure is somewhat greater than the actual inventory of stores as at March 31, 1950, which was given at $3 million in round figures, and which as we go along I should like to use as the amount of inventory with reference to section 1, now on hand. There remains $2 million, which is a sort of revolving fund. The $2 million remaining out of the $5 million which has been referred to previously as working capital will not actually be paid over to the Minister of Transport, but as already pointed out, will simply be available to be drawn upon as needed.

The figure of $2 million does not seem to be unreasonable considering the fact that in 1937 parliament authorized an advance of $1 million to be used as working capital in conjunction with the stores inventory of about the same amount, $957,368 to be exact. Today in reality we are asking for an advance for working capital of $2 million in relation to

Department of Transport Stores inventory of $3 million. These figures combined represent the proposed stores capital of $5 million referred to in the bill as advances to the minister.

It is estimated that approximately $2 million is needed to purchase stores required to maintain stocks at necessary operating levels and to cover the time lag between the dates when stores are issued and date when the stores account receives credit from the votes concerned.

This figure also includes a margin of around $500,000 to take care of temporary upward fluctuations in value of inventory, which may occur as a result of relatively light withdrawals and heavy receipt of stores during certain periods.

This is all I need to say at this time on section 1. There are a number of questions which I feel I should reply to, and I think I can do it fairly quickly.

Mr. Green:

Before the minister leaves section 1, can he tell us the annual turnover?

Mr. Chevrier:

The annual turnover, as I will indicate in answer to a question which was asked on the last occasion by an hon. member, is $8 million.

Mr. Knowles:

What guarantee will we have in the legislation, or anywhere else, that the $5 million asked for in this bill will include both the inventory now on hand and such additional advances as the Minister of Transport may get from the Minister of Finance?

Mr. Chevrier:

I propose to move an amendment when I complete my statement which I think will cover the greater part of my hon. friend's suggestion, if not all of it.

The hon. member for Winnipeg North Centre asked whether I would indicate, just as an example, where in the estimates there are items to pay for some of the things that have been bought out of these advances. These are to be found in most of the operating votes in the Department of Transport- certainly the vote for the operation of canals, the vote for the operation of marine agencies, the vote for the operation of airports, and so forth.

The hon. member for Greenwood asked this question: "I should like to know how

much we have relative to what is used from time to time". That was not an easy question.

Mr. Macdonnell (Greenwood):

I do not

know what it means now.

Mr. Chevrier:

I did not. I do not think I was able to give an answer; but if it means what we think it does, then the answer is this.

Department of Transport Stores The inventory as at March 31, 1950, was approximately $3 million, as I have already indicated, while the value of stores issued in the preceding twelve months was $8 million. That is the answer that I gave to the hon. member for Vancouver-Quadra a moment ago.

The hon, member for Greenwood asked another question: "To what extent has Mr. Howe's promise of 1937 to eliminate surplus stocks been carried out; also to what extent are we piling up stocks in any way?" Inventory value as at March 31, 1937, was $957,368. The record shows that the value of the stores inventory as at March 31, 1939, two years later, was $876,877, or approximately $81,000 less than two years previously. The inventory value today-by "today" I mean March 31, 1950-exclusive of Newfoundland, was $2,059,730. And that of course, as already stated, was owing to the increase in prices from that date to this, and also to the addition of new divisions in the department.