June 26, 1951

LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxton:

If all the plans we made with respect to this item and every other item mentioned in the details at page 269 were accomplished during the fiscal year 1951-52 we would need $3,350,000 for this item. However, our experience is we cannot do everything we plan. We cannot do it that fast, and sometimes it is not desirable that we should. Therefore for the current fiscal year the amount that was expected to be spent on a headquarters out of the $3,350,000 is $1,100,000.

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PC

George Randolph Pearkes

Progressive Conservative

Mr. Pearkes:

With respect to the construction item for new headquarters, in the Department of Public Works would they not follow the procedure of revoting next year the amount which was not spent? This seems to be a more flexible method, and perhaps not quite such a desirable method because there may be too much flexibility. I believe that there is the power, with the authority of the treasury board-and I should like to be corrected if I am wrong-for the minister to transfer this amount to any other building or buildings, the acquiring of equipment, and so forth. Would it not be preferable to follow a more or less uniform policy in different departments, and, when it comes to the question of a building, vote the amount of money for the building and have it definitely earmarked? Then if it is not expended it can be revoted for the same building next year, as is done in the Department of Public

4734 HOUSE OF

Supply-National Defence Works. It seems to me that the Minister of Public Works has a more reliable system of seeing that the taxpayers' money is kept within certain channels rather than this loose way of doing it in the Department of National Defence.

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LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxion:

The hon. member for Nanaimo is quite right that for everything that is done under this vote the approval of treasury board has to be secured. The arrangement is flexible, and it is designedly flexible. We could not possibly contemplate a construction program of over $300 million this year without great flexibility because we do not know how much we will be able to have contracted for and completed within the building season. This depends on supply of materials and labour which are uncertain. Therefore it is virtually certain that we will not be able to complete all of this over $300 million construction program. How much we will be able to complete will depend on local conditions, labour, materials and so on, and also the supply of equipment from other countries. Great flexibility is required at a time of great development.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Every answer that has been given with respect to this item is one that demonstrates that we cannot rely on these figures. One of the purposes of bringing these estimates before the house is so that members will accept some responsibility for passing the items. The minister says that they must go before treasury board, but that does not in any way meet the responsibility of members to vote money. Our responsibility to vote money is perhaps the highest responsibility of members of parliament, to vote money with knowledge of what it is we are approving. When the minister says it is convenient to put in the whole amount for this particular plan and that is a satisfactory method, I would point out it is entirely contrary to the procedure that is adopted with respect to other construction of a very similar nature.

On January 2 this year it was officially announced that it had been decided to construct a new atomic reactor. The government's statement issued on that day indicated that the government would be spending $30 million on the new reactor. If hon. members will look at the estimates under the national research council and atomic energy control board on page 40, they will find that, although the plan has been stated by the government to cost $30 million, item 308 of the estimates under the heading "construction of a new reactor" is $7 million. The reason for that is that the department only expects to spend $7 million this year.

[Mr. Pearkes.l

Then again we have a similar situation with respect to television. We have been told that the government expenditure on television is to be a figure considerably in excess of the amount set aside this year. The amount included for that work, which we hope will be undertaken some time, is only an amount estimated to correspond to the amount spent this year. As I understand, one of the things that the Auditor General has been emphasizing over and over again in his reports is the obligation of those preparing the estimates to prepare them in a way that makes it possible for members to deal with them with some belief that they represent the actual amount that parliament is voting in a particular year for a particular purpose. In this case we are confronted with a figure of $3,350,000, yet we are told it is not expected that more than $1,450,000 of that will be spent. The minister says it is necessary to have flexibility. If a flexible sum is to be appropriated for purposes other than those designated, then there should be an entry showing that there is a figure to be allocated for any general purposes not covered by the specific items. We then would know we were voting an amount for that purpose.

It will be recalled that when this subject was under discussion last year in the public accounts committee it was indicated that there was what was described as a cushion of 10 per cent in a great many cases in the preparation of the estimates. That was a 10 per cent variable factor to provide for the possibility that expenditures might exceed by 10 per cent the amount estimated. But this is not a 10 per cent cushion; this is a cushion of approximately 100 per cent, and hon. members must immediately ask themselves how much of a cushion there is in this figure of $1,490 million. We are not here to vote cushions; we are to vote dollars, and we should be voting dollars with the knowledge that what we are voting is to be used for a particular purpose. When we ask that this should be the recognized method, then we should be realistic and prepared to concede that there may be need for some sum to be provided for contingencies. I should think the best way to do that would be to set up a contingency fund to be applied wherever it is required, if in fact it is required at all. It must be remembered that we are to meet again on October 9, and there is a practice of providing any additional money needed by supplementary estimates. That is a system by which this government can meet its requirements. In addition, if any further money is needed and it is not provided during the session that will begin early in October, we will meet again well before March 31 of

next year. At that time we can deal in a regular and proper way, by further supplementary estimates, with any amounts required.

To pass this vote with the explanation that has been given would simply be a declaration by the members of this house that with regard to a huge item of $1,490 million we do not have the slightest idea what it is we are really approving. In view of the answers given I suggest that the minister should agree to let this item stand or to reduce it to the amount he has said will be spent.

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?

Some hon. Members:

Carried.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

If this is carried with the explanation that has been given the members of this house might as well say now that they are not going to make any real attempt to examine the estimates, and that they are going to vote huge sums of money without being given any of the substantial and material facts as to how much of that money is to be spent.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Just following what the leader of the opposition has said I want to read a statement by the Minister of Public Works on June 21, describing the technique followed in his department, at page 4477 of Hansard:

We get an initial vote, we prepare plans, we acquire a site, we ask for tenders, we give a contract, but that contract may take one, two or three years to complete. We try to have as exact an amount as possible in our estimates.

The Department of National Defence has a different process. Where they are acquiring war materials we recognize that fact, and we recognize the special circumstances in which the vote is made. But for the life of me I cannot see that this item, having to do with the proposed building for headquarters, differs in any way from the kind of thing the Department of Public Works does, or why it should be dealt with in this way. Incidentally we are providing a very easy way for the Minister of Finance to have a surplus. Quite apart from that, however, it seems to me incredible that the minister can expect to have economy or that we can expect him to have economy if large sums of money are voted in this omnibus way and the money just left lying around loose.

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LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxion:

As I said before, the basis of making up these estimates is not established by me; I do my best to explain them. We have a construction program which lists all the projects we believe should be done to carry out the three-year program for the armed forces of Canada. They run into hundreds of items, a great many of which cannot be carried out in any one year andi S0709-301

Supply-National Defence many of which cannot even be begun this year. We put in the estimates the amount involved both in the way of cash and current year's commitment authority.

As hon. members will notice on looking at item 245 on page 36, if everything listed here were to be carried out the total amount of this year's estimates is $1,924,170,835. Of that it is estimated that total expenditures this year will not exceed $1,595,050,000, of which $183,050,000 is provided under the appropriation act of 1950. The amount we are asking for in the total vote is $1,412,000,000, and the total commitment authority for this and future years provided for in this vote is $3,831,270,000.

That is the way it has been put before this house for the last four years. I think the hon. member for Greenwood has a point. If this were the only item of the kind in our vote we should deal with it in exactly the same way as it would be dealt with by the Department of Public Works, but since it is not we have dealt with it in the same way as the other construction items and provided for both cash and commitment authority. With a total construction program for this year of about $330 million I do not see how it would be humanly possible to list the items in the same detail as in a static department. Then we would not get the job done at all.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

I think we are back to the basic difficulty as far as the estimates of this department are concerned. The minister says they have been brought down in this form for the last four years. I would remind him that for the last four years I have complained that practically the entire amount we are asked to vote for national defence has been in one item. In this case it is item 245, and the amount is $1,412 million. This means that any money covered by these sub-items given in the details at the back of the book can be moved around and used in any way the minister wishes. I have never been able to see why the department did not return to the method followed before the war and all through the war, of preparing their estimates much the same as any other department does. If they did that in this case we would have as one item the salary and motorcar allowance of the minister. The next item would be departmental administration; the next would be imperial war graves commission; the next would be navy, central administration, or something like that.

If the estimates were prepared in that way, as is done by every other department, we could have our discussion on each one and get it out of the way. We would know the money voted for a particular item, if it were departmental administration, would be spent

Supply-National Defence on departmental administration, that it would not be spent on a building in the Yukon or something else along that line. This method of presenting the estimates of this department, as I observed when I spoke on this matter first this evening, really removes parliamentary control over the spending of the Department of National Defence. What actually happens is that we vote the department a lump sum, in this case about a billion and half dollars, and then the department can do what they like with it. So far as I can see there are no restraints as to how they spend it. They can spend it on the details in the back of the book or they may not spend it on them. They can spend it any way they like. The ordinary system which has been in existence for so long, so far as English parliamentary institutions are concerned, disappears. We have lost the financial control which we are supposed to exercise, and for which we are responsible.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The minister has said, and I am grateful to him for saying so, that if this transaction could be isolated it could be dealt with in the same way as similar transactions are dealt with in the Department of Public Works; that is putting it very frankly. I have said to the minister that we recognize there are certain things in the Department of National Defence which have special features of their own, and which must be dealt with specially in voting the money. But nothing the minister has said tonight has convinced me that there is any reason in the world why this particular item of headquarters cannot be dealt with in precisely the way which the Minister of Public Works indicated was done in his department, and which I read a few minutes ago.

So far as I can see what is really happening is that we are being asked to vote money in a huge vacuum. The minister has told us, incidentally, that this is not the only case where we have this vague figure of commitment, as well as the figure of supposed expenditure. Therefore I want to check with the minister as to whether I am right in my understanding of his figure, that actually of the $3 million-and it was $3 million I believe which was mentioned in connection with the proposed headquarters-there is no expectation that more than $1,100,000 would be expended this year? If I am right in that figure, then I propose to move that this item be reduced by the difference between these figures, in other words by $1,900,000. I am basing that on my understanding of the figures the minister gave me.

In other words, what I am suggesting is that we should vote what money the department requires for the purpose which the

minister has indicated, but not vote the additional $1,900,000 of authority. I shall point out, at the risk of being a little tiresome, that I distinguish in my own mind this transaction, especially and definitely, from the other transactions where we have recognized that there must be future commitments authorized by reason of the fact the department must make contracts for munitions of war and other things which may take years to be completed. Therefore, Mr. Chairman, I move -unless the minister wishes to correct my figures, and I am ready to correct the figures so as to leave in the estimates the amount which I understood him to say was required. Subject to his correction, I move that $1,900,000 toe struck off this item.

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LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxlon:

I hope I can persuade the hon. member that that would not be a good thing to do. The situation regarding the Department of National Defence and the Department of Public Works with respect to this varies only in size. Perhaps I gave the wrong impression before, but if you look at page 373, for example, and the same is true of other details of the estimates of public works, you will see on page 373 a total for New Brunswick of $2,641,500, less estimated amounts by which actual expenditure on all listed projects will fall short of the total amounts that may be required for each $110,000. The amount stated there is $2,531,500.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

On what page is that?

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LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxlon:

Page 373, dealing with public works. There are similar items throughout the votes of the Department of Public Works. If you look at the details of the votes-

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

May I interrupt the minister there? This is doing what I am suggesting; it is deducting the amount not expected to be required during the year. That is what I am doing.

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LIB

Brooke Claxton (Minister of National Defence)

Liberal

Mr. Claxlon:

We do exactly the same, and that is the point I am trying to make. If you look at the vote for national defence on page 275, you see "total defence services program", $1,924,170,835.

Less estimated amount to be provided from section 3 of the Defence Appropriation Act 1950 as supplemented by item 426, $183,050,000.

Estimated amount for commitments nominally to fall due during the fiscal year, in accordance with the program detailed above, but not required for actual expenditures in that year, $329,120,835.

This makes a deduction of $512,170,835, leaving a total for defence services, estimated actual expenditure, $1,412,000,000. This is

the figure which appears in the main estimates at page 36.

Now, included in the amount of $329,120,835, is $1,900,000 in respect of this building. Those estimates were prepared during the months of December and January, and when they took their present form it was not known how much of which construction we could do. We would have liked to proceed with the preparation of plans, the acquisition of property and possibly the excavation of a foundation for a national defence headquarters, but it has not proved desirable to start that yet. This estimate of expenditure and commitment authority for this year of $3 million was reduced to $1,100,000.

If the hon. member's motion were carried, it would affect not the commitment authority and the plans for this year, but the cash available to meet this and other items that we hope to be able to do with the money voted by parliament. I would suggest, therefore, that perhaps with that explanation I have given it would not be necessary for him to press the motion.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I want to

be very sure of that. Does the minister now say, contrary to what I think we all understood before, that this deduction which I proposed to make by my motion is actually made in those figures on page 275? Does he say that in this figure of $329 million which is deducted from the $1,924,000,000, there is included this figure of $1,900,000: in other words, that the actual estimated expenditure of $1,412,000,000 includes only the $1,100,000 for this building?

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LIB
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Then that

is a very different story from what we had before, and I certainly withdraw my motion, because according to what the minister now says what I wanted to do is done by those figures.

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PC

George Randolph Pearkes

Progressive Conservative

Mr. Pearkes:

I should like to ask one

more question, if I may. Suppose none of this $3 million is spent on the acquisition of this property or in the preparation of the plans. How much of that $3 million would the minister, if he felt it was necessary to do so, be able to transfer, with the approval of the treasury board, to, let us say, the printing of departmental reports? Would it be the whole amount or that amount less the amount that is quoted?

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LIB

June 26, 1951