Howard Charles Green
What is the Newfoundland
Subtopic: AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
What is the Newfoundland
It is roughly $1 million.
It was $1,180,000.
I say roughly $1 million.
I understand it has been cut by several hundred thousands.
I will give that in a moment. I have it all here. I propose to answer most of the questions that were asked at the last sitting.
The hon. member for Greenwood asked: "To what extent have we got stock that is piling up and perhaps should be cleared out?" The answer is that with the exception of stores taken over in Newfoundland a year ago it is estimated that the value of stores inactive and unserviceable and obsolete in nature at the present is about $20,000. That is only about one per cent of the inventory value as at March 31, 1950, excluding Newfoundland stocks.
The hon. member for Greenwood wanted to get some kind of statement-not in exhaustive detail-as to what there is in stores now. I have quite a lengthy statement. I do not know whether the hon. gentleman wants me to put it on the record. Perhaps I can give some of the main divisions which will give an answer to what he wants.
For instance, in canals the divisions are something like this: general hardware and tools, metals, paints, spare parts, lumber, lubricants and fuel. In marine and radio the division is: general hardware and tools, metals, steamer supplies, lighthouse supplies,
paints, lubricants and fuel. In radio stations and airports the division is: general hardware and tools, radio equipment, parts and accessories, airport spare parts, accessories and miscellaneous supplies. In meteorological, the division is scientific instruments and miscellaneous supplies.
There is another long classification that I have, composed of twenty-seven different items, which are made up of iron, steel and other metals, castings, pipe and fittings of all kinds, tools, and so forth. Then there is a break-down of one of the depots in the canal service at Lachine.
Mr. Macdonnell (Greenwood):
I do not
think we will need to proceed any further unless we get into difficulties with the minister.
I hope my hon. friend will
not. I am the most co-operative minister in the house.
There was another question asked by the hon. member for Greenwood which I think is important and which should be clarified. He wanted to know why we buy all these different stores and carry them in stock when they might be purchased without delay in the ordinary course of merchandising. We buy in large quantities, and we like to buy in large quantities because we save substantial sums of money. For instance, by buying 5,000 gallons of anti-freeze for the various depots rather than buying it piecemeal for each requisition we save $2 per gallon. If we buy 10,000 gallons of paint in one lot we save $2 per gallon over the retail price. The same thing can be said of manila rope, white lead, binoculars, and so on.
The hon. member for Vancouver-Quadra wanted to know by how much the department had exceeded the advances of $1 million authorized by the present act. The present act provides in effect for a capital fund of $1,957,368, composed of the April 1, 1937, inventory, $957,368, and $1 million which was authorized as advances to the Minister of Transport. That inventory, exclusive of Newfoundland stores, as of March 31, 1950, stood at $2,059,000.
What about the increases?
There were amendments to the act in 1939 and in 1946, in each case increasing the amounts that could be held in stores.
The inventory as at March
31, 1950, exclusive of Newfoundland stores, was about $2,059,000. Therefore the advances were exceeded by $102,000 at that date. In the previous year, March 31, 1949, the
advances were exceeded by $72,491, exclusive of Newfoundland stores. Then on April 1, 1949, the Newfoundland stores inventory was
fixed at $1,158,000, but that has not yet been charged to the Department of Transport stores account. Provision for the acquisition of those stores was made in the supplementary estimates of 1949-50 under vote 673. However, when I stated in the original debate of May 5 that the advances were overdrawn to the extent of $1 million, that figure was based on the assumption that the Newfoundland stores had been transferred to the Department of Transport, but as stated, this is not so. The proposed amendments to the stores act provide for the inclusion of the Newfoundland stores in the over-all inventory.
So that there may be no misunderstanding about section 1, I intend to propose an amendment, which will cover the inventory. There was some anxiety indicated in the committee about the amount of the advances. It was thought that $5 million was far too much. Having regard to the explanations I have given and the conversations I have had with my officers since that time, it strikes me that if the committee were willing to authorize advances to the extent of $4,500,000, that would meet the position. I have asked the officers how they could get along with that, and they say that that would be running them pretty close but if they had less it would be difficult for them to operate. I hope it will be possible for the committee to approve this, and I intend to move an amendment to section 5.
There is an amendment before the committee at the present time.
This would be a subamendment.
You will have to wait until the amendment is disposed of.
When we get to it I will suggest an amendment providing that the amount of advances to the Minister of Transport shall at no time exceed $4,500,000, including the value of the stores from time to time on hand. There would then be no doubt that it included the $3 million inventory now on hand, and it would give a revolving fund or working capital of $1,500,000. Perhaps in view of these explanations the hon. member for Vancouver-Quadra will consider withdrawing his amendment.
The explanations given by the minister this morning help to clear up the difficulties we had when this bill was under discussion on a previous occasion. As the committee knows, the Department of Transport Stores Act was enacted in 1937. At that time there were two points that worried the members of the house. The first was that power was being taken to spend money before it
Department of Transport Stores was appropriated, and that is our main worry in connection with the proposed amendments now before us. Under this act the Department of Transport can spend a certain amount of money before it is actually appropriated by parliament, which is contrary to the whole basis of our parliamentary system. That particular objection was put very clearly by Mr. Bennett, then leader of the opposition, when he spoke on April 2, 1937, as reported on page 2488 of Hansard:
I say to the minister in the light of experience that there is nothing more inviting to permanent officials than the possibility of having an advance of great proportions.
The second worry in 1937 was that stores would be accumulated to a greater extent than was necessary. At that time the stores on hand were of a value of less than $1 million. The present Minister of Trade and Commerce (Mr. Howe), who was in charge of the bill at that time, said, as reported on page 2488 of Hansard of April 2, 1937:
It will be my aim to see that at the end of the year there are no surplus stocks.
The whole emphasis by the minister at that time was that surplus stocks would be cut right down to the minimum. In order to meet those two difficulties, provision was made in the original act that the advances to the minister would be limited to $1 million, and there was also a provision that the value of stores held after the inventory at the end of each fiscal year after 1936-37 should not exceed the amount of the stores inventory established as of April 1, 1937.
Those were the two restrictive provisions placed in the legislation to meet the objections raised. It is interesting to note what has since happened to each of these obstacles. That of the ceiling of $1 million has remained in the act to this date. In other words, right up to the present time the minister has never had the power to draw on the Department of Finance for more than $1 million. It is true that an amendment was made in 1939, but that was because of the wording of the original section 4. There had been some trouble with the Department of Finance. They read the original section 4 as still calling for an appropriation by parliament in each case. Therefore the act was amended in 1939 to provide for a straight advance up to a ceiling of $1 million. The value of the stores was increased in i939 to $1,250,000. Then during the war it was increased by order in council in 1943, I believe-the minister can correct me if I am wrong-to $1,500,000. In 1946, after the war, less than four years ago, it was increased again to $1,600,000.
Before I start discussing the terms of the bill now before the committee, I should like to
Department of Transport Stores point out that the position under the present law is that there is a ceiling of $1 million on the amount that can be advanced, and a ceiling of $1,600,000 on the value of stores that can be held in the inventory. Until this year the legislation has been based on those two different restrictions, one by way of ceiling on the advances, and the other by way of ceiling on the value of the stores in the inventory. For some reason or other the Department of Transport is now asking that those two items be lumped together, and that the new section read:
The amount of advances to the Minister of Transport shall at no time exceed $5 million.
In other words, they are lumping together the stores on hand and the amount that can be drawn before there has been an appropriation by parliament. We objected of course to the provision for an increase in the advances from $1 million to $5 million; at the same time there is a provision in the bill which strikes out the restriction on the value of stores; that section is being deleted.
I think the minister's offer to include in the new section 5 the words, "including the amount of stores on hand from time to time", meets one of the objections, but there remains the question as to the total figure that should be written into the section. Some of us have suggested to the minister that the figure should be $4 million rather than $5 million. We believe the amount that can be spent without appropriation by parliament should be carefully restricted. The minister is now basing his figure of $4,500,000 on an inventory of stocks amounting to slightly over $2 million, an inventory of stocks in Newfoundland of about $1 million, and then he wants working capital of $1,500,000. It is my understanding that the Newfoundland stores are largely at Gander airport, and that while at one time they reached the figure of about $1 million they have since been reduced by $300,000 or $400,000. It does not seem reasonable that half as many stores should have to be kept in Newfoundland as in all the rest of Canada. Yet that is exactly what the minister's figures mean. There are $2 million worth of stores in the rest of Canada and $1 million ih Newfoundland. That does not seem to be reasonable, As I said a moment ago, I am told that the Newfoundland stores have been drastically reduced, and that they are still being reduced.
Of course it was stated time -and again in 1937 by the present Minister of Trade and Commerce and also by Mr. Dunning, then minister of finance, that an attempt would be made to keep the stores down to a minimum. I believe the Minister of Transport should agree to a new figure of $4 million. I think that gives him ample leeway, and
it serves as a check on his officials. They are getting the right to spend money that has not yet been appropriated by parliament, and in addition they are getting the right to have this large amount of stores on hand. I think there should be a check placed on them. I do not believe they will be badly hurt if the figure is placed at $4 million. I hope the minister will agree. After all, there are only one or two other cases in our whole governmental structure in which departments can spend money before it is appropriated. The minister gave the printing bureau as an illustration, but I do not believe they have the right to draw in advance up to the amount of $1 million. He also gave the example of the Indian affairs branch of the Department of Citizenship and Immigration. Apparently they have the right to draw moneys in advance before appropriation.
Here we have a total turnover of only $8 million in the whole year. With the figure set at $4 million I think the minister's officials will have ample power to carry on. It will be an incentive to them not to draw ahead unless they have to do so, and it will also be an incentive to keep down the amount of stores on hand. If he finds in two or three years that they need a larger figure, then I think it is a very good thing for him to have to come back to parliament and explain why, because in effect parliament is being by-passed by legislation of this kind.
I hope the minister will agree to put the figure at $4 million. If he will do so I do not think there will be any more argument.
Is the hon. member withdrawing his amendment?
My amendment is standing at the moment.
Mr. Chairman, I want to thank the minister for the further, and dare I say better, explanation he gave this morning than was given on the 5th of May. I also want to say that I appreciate his readiness to meet some of the arguments that have been advanced from this side of the house by the amendment which he has indicated he will be prepared to move if the hon. member for Vancouver-Quadra will withdraw his amendment to.the first clause of the bill. It is difficult for us to judge whether $4,000,000 or $4,500,000 should be the figure. I think it is significant, however, that in view of the debate which took place, and the representations made from this side of the house, the minister has seen fit to split the difference and be satisfied with $4,500,000. But the more significant part of the proposed amendment, if I understand it, is that which makes it clear that the $4,500,000
would have to include both inventory on hand and cash advances made available. If it is clear that when the minister has on hand $3 million in inventory he can get only another million and a half by way of cash advance-
That is clearly understood in the amendment I intend to propose.
Very well; if that is clear, even with the qualification the hon. member for Vancouver-Quadra now makes, I feel more satisfied. The hon. member for Vancouver-Quadra points out that if inventory were reduced from $3 million to $2 million, then the minister could get $2,500,000 cash. But, in connection with the whole matter, can any stores in the inventory we are talking about actually be used without a charge being made against a vote provided in the estimates?