Right Hon. J. G. Diefenbaker (Prime Minister):

Mr. Speaker, with a view to regularizing the proceedings today I will simply say at this time that provided it is acceptable to the opposition, in order to make possible today a discussion of external affairs the Secretary of State for External Affairs will, when the orders of the day are called, follow the course that was taken on March 15, 1957. At that time the Leader of the Opposition (Mr. Pearson), then secretary of state for external affairs, moved the following motion:

That this house do now adjourn and that, in order to permit a debate on external affairs, standing order 32(2) shall be suspended in relation thereto.

In that way, following the course that was taken at that time, the house will be in a position to carry out the suggestion made last Friday and have a discussion of foreign affairs. I hope that course will meet with acceptance by all hon. members of the house. 1 simply mention at this time that that course will be followed.

Hon. Lionel Chevrier (Laurier):

Mr. Speaker, I think the circumstances under which the Leader of the Opposition, when he held the position of secretary of state for external affairs, made the motion to which the Prime Minister has referred were entirely different from those which exist at the present time. I feel it is my duty, sir, to bring those circumstances to the attention of the house. They were made after unanimous consent, not only by both parties but by all parties in the house.

Such was not the case here. The Prime Minister knows full well that when this announcement was made by the acting house leader the other day I asked under what authority it was made. He replied that it would be made by virtue of a motion to adjourn the house. I think, sir, I am entitled to put on the record here exactly what happened in connection with this matter on earlier occasions.

Mr. Speaker:

I suggest that the hon. member defer his comment on this matter until it comes before the house at the proper 90205-6-191

time. The Prime Minister's statement was just an announcement to the house by way of introduction. When we come to orders of the day, then it will be in order to deal with the matter.

Mr. Diefenbaker:

While that is quite proper, I see no reason, if the house will agree, why the hon. gentleman should not proceed now if Your Honour would permit, because we are entirely at the disposal of the house. If there is any question that this debate should not go on, then I can only say that we accept the viewpoint of the house in general. I make it very clear and definite that if hon. gentlemen do not want a debate on external affairs at this time, then we are willing to accept that viewpoint. If hon. gentlemen will say "We do not want it", then I will say immediately we will accept that and proceed with the business for today.

I can say that in bringing this forward on Friday evening I outlined the request from the Leader of the Opposition during his speech and the request made by the hon. member for Vancouver East. However, if there is any question whatever that hon. members do not wish to give unanimous consent, then of course we are willing to defer this debate. I am not sure, though, that there would be any discussion of the matter before Christmas.

Mr. Speaker:

With all due deference to the suggestion made that we proceed now, if the motion is made the matter will be properly before the house. There are some preliminary matters to be disposed of before the orders of the day. Of course, the proposed motion could properly be made at any time and if the Secretary of State for External Affairs wishes to make his motion at this time I shall entertain it and then the pros and cons can be discussed. Otherwise I feel it would be in order to continue with the routine proceedings so they can be disposed of.

Mr. W. H. Jorgenson (Parliamentary Secretary to the Minister of Agriculture):

I wish to inform the house of a decision by the Canadian wheat board, pursuant to section 16 of the act, to exempt producers from delivery quotas on deliveries of grain to specified feed mills. I should outline briefly the background of this decision.

290 HOUSE OF

Exemption from Grain Delivery Quotas

When the Canadian Wheat Board Act was amended in 1950, feed mills were brought under its jurisdiction. They were thereby placed in the same category as country elevators and became subject to delivery quota regulations. As long as producers could deliver all their grain within a crop year, the enforcement of delivery quotas was not difficult. Since 1953 the quantity of grain on farms has been in excess of the available elevator space, and the enforcement of delivery quotas in the case of feed mills became more difficult.

In 1957 a Manitoba feed mill appealed a conviction for violating board delivery quota regulations. A similar case arose in Alberta in 1958. In both cases the appeal courts, in 1959, upheld the power of the board to regulate deliveries to feed mills. While the board's authority was sustained, there was a period of slightly over two years, from 1957 until late 1959, when the board was unable to enforce delivery quotas to feed mills because its powers to do so were before the courts.

In the meantime the matter was considered by the standing committee on agriculture and colonization. In July, 1959 that committee recommended that the position of feed mills in the grain trade should be clarified.

The committee again took up the matter in 1960. In its report of June 27, 1960, it found that too much inflexibility in the allocation of quotas to feed mills is not in the best interests of either the producer or the consumer of grains for feed. It recommended that the apparent discrimination between agreement and non-agreement mills be studied to maintain a fair position between them.

Early in the present crop year the board gave careful consideration to its position. The feed mills, in their representations and in their statements to the standing committee, had emphasized that they are engaged in a local business, that their operations are continuous and that their intake of grain should not be based upon space available from time to time in country elevators.

For its part, the wheat board appreciated that it is primarily engaged in the marketing of wheat, oats and barley moving in interprovincial and export trade, and that some relaxation in respect of controls applicable to the local trade of feed mills would not necessarily affect its over-all operations. In its examination of the matter the board gave consideration to the fact that probably less than 10 million bushels of grain were purchased by feed mills as compared with over 500 million bushels marketed by producers through country elevators.

In October the board met with representatives of the feed mills. The outcome was a

proposal which would exempt feed mills from delivery quotas if they in turn accepted certain undertakings. In these discussions, representatives of the feed mills expressed the desire that their problems should be met within the terms of the Canadian Wheat Board Act, and they indicated that they would be prepared to accept an annual contract with the board which would be applicable to all classes of feed mills.

It is on this basis that the wheat board has acted. The announced policy applies only to those feed mills which sign the necessary contract with the board. Feed mills signing the new board contract agree to purchase grain from permit holders within the province in which their feed mill is located and to use such grain for resale as "prepared" or "processed" feeds within the said province. Exceptions will have to be made in a few cases where feed mills are located close to provincial boundaries. Feed mills signing a contract with the board will purchase grain from permit holders on a non-quota basis at prices negotiated with producers.

This in brief, Mr. Speaker, is the policy which the wheat board has decided upon.

Mr. Hazen Argue (Assiniboia):

Mr. Speaker, I regret very much the announcement that has been made this afternoon, and I want to give one or two reasons. The Canadian wheat board, as the parliamentary secretary has said, appeared before the agriculture committee a year ago, but the Canadian wheat board very strongly protested the very policy that has been enunciated today. This policy will weaken beyond question the quota regulations that have been provided by the wheat board. The wheat board in policing its quota regulations has been upheld in the courts and therefore was in a position to maintain wheat quotas and wheat prices.

What will happen now is that it will be legal for feed mills to go out and buy grain from producers within that province at as low a price as they can obtain it. This means undercutting of the wheat board price. This means lower prices to the grain producers, and I am afraid it is just the thin edge of the wedge in undermining and destroying the quota system that has been built up over so many years.

In my opinion, Mr. Speaker, this announcement is an indication that this government has capitulated to the pressures of the private grain trade, and this policy that has been enunciated is a retrograde step.

Mr. Speaker:

Order.

Right Hon. J. G. Diefenbaker (Prime Minister):

Mr. Speaker, I do not want to make any reference that is not proper, but the

statement made by the hon. gentleman and which went far beyond what is proper and fitting, as I see it, cannot go unchallenged. I challenge the facts and also the conclusions expressed' by him.

Mr. Argue:

I accept the challenge.

Mr. Speaker:

In the closing remarks by the hon. member for Assiniboia I also felt that he had gone beyond the limit of recognized comment. He has commented on the statement, and the matter is one for debate at the proper time. However, the point taken by the Prime Minister was the reason for my rising at the time I did so.

Mr. Argue:

Mr. Speaker, if I may just give a brief explanation, I took a very active part-

No.

Mr. Speaker:

Order. A point of order has been raised, and I think, the hon. member who has been called to order has the right to explain, provided he does not continue with the statement.

Mr. Argue:

Mr. Speaker, I wanted to explain that I had taken a very active part in the deliberations of the agriculture committee-

Mr. Horner (Acadia):

You attended about two committee meetings.

Mr. Argue:

-and in the discussion that went on in regard to this situation-

Order.