Mr. McCullough (Moose Mountain):

A

meeting between the provincial authorities and the federal authorities, at which municipal finance may come up?

Mr. Abbott:

Well, the federal government is willing to listen to representations made by any provincial government. The door is always open. As a matter of fact, they are doing it most of the time, during my eight or nine years of experience on this job. The provincial governments, or most of them, are never reluctant to come forward and ask the federal government for money.

Mr. Adamson:

Might I ask the minister if this includes any payment to the township of Toronto in lieu of the A. V. Roe Company?

Mr. Abbott:

I could not answer that question offhand. I would appreciate it if we could defer detailed discussion of this question of municipal grants until next week, when I hope to have the new act under discussion. As the member for Winnipeg North Centre has said, I shall come better armed to discuss this question.

Mr. Adamson:

That suits me. I have just come back from Toronto where the question of the taxation of the A. V. Roe Company is a very lively one.

Mr. Macdonnell:

Will the minister say a word about what is the make-up of the consolidated deficit fund? Will he tell us why this matter is coming up so late-years after 1951, and just how much there is, and if there are any other skeletons in the cupboard?

Mr. Abbott:

I cannot give any blanket assurance that there are not other items or other matters in the cupboard or elsewhere that may have to be the subject of a vote such as this one. This is a write-off to

the consolidated deficit account that will be incurred upon the destruction of blank bonds, and is necessary in order to delete the costs from the books and in order that the balance in the blank bonds reserve account will reflect the true asset value of the account. It is essential to have an item such as this, as my hon. friend will appreciate. These bonds were printed and charged to this account, this blank bonds reserve account. Now, it is found they are not needed or they are no longer needed, so we are asking for authority to write them off.

Mr. Macdonnell:

I do not want to ask for information which is available already, but was the abandonment of this loan advised at the time or is it a matter we might be informed about now?

Mr. Abbott:

This amount of $11,200 represents the engraving cost of seventy thousand $1,000 coupon bond tints furnished by the Canadian Bank Note Company in 1951. There are fifty coupons attached and the bonds would be available only for replacement bonds of the long-term twenty-five year issue of January 15, 1953. The bonds are of no further use and the Bank of Canada has asked that they be allowed to advise the bank note company to destroy them.

I suppose that one may say, by hindsight, that it was unnecessary to order them.

Mr. Knowles:

I believe we had an item similar to this a year or so ago.

Mr. Abbott:

They are always coming up.

Mr. Knowles:

Does the minister not know in advance how many more he will be bringing in?

Mr. Abbott:

I perhaps should, but they are only called to my attention from time to time. They are matters of administration, and when they are brought to my attention and it is suggested the bonds are no longer of any use, then we should have an item authorizing the write-off. That seems to be the appropriate thing to do.

Mr. Noseworthy:

Does this mean that the government spent $11,200 in engraving bonds that were never used?

Mr. Abbott:

That is just what it is, yes.

Mr. Macdonnell:

Will the minister say a word about the trading loss in the securities investment account? We are aware that the

Bank of Canada deals in the bond market; but what is the securities investment account?

Mr. Abbott:

This is the account in which the government purchases bonds for its own account.

In 1952-53, the amount of trading loss of $40,072.79 in the securities investment account was written down in the finance books to non-active assets and accordingly constituted an expenditure charge in arriving at the budgetary surplus or decrease in net debt for the year. The purpose of this dollar item is merely to provide the necessary authority to write-off this non-active asset to the consolidated deficit account; it will therefore not involve any effect on the budgetary situation for 1953-54, nor on the net debt. Since it has already been written into the net debt and appears on the balance sheet as a non-active asset-this, in short, will permit writing it into the consolidated deficit account section from the capital and other non-active assets section of the net debt.

Mr. Macdonnell:

In other words, this is a hazard that you take when you invest your money and get a return on it, rather than let it lie idle?