Mr. Chevrier:

-because he is not the

sponsor of this bill; it is the Minister of Transport who introduced this bill to the house. Unless the Minister of Transport will accept the definition given by the hon. mem-

ber for Gaspe; that would be different. But as tar as I am concerned, I am not ready to accept it as an explanation of the expression "the proceeds of a pledge".

Mr. English:

Mr. Chairman, I have

expressed my opinion about the definition of "a pledge" and if I am wrong, I would certainly be pleased to hear the hon. member for Laurier give us his definition.

Mr. Chevrier:

1 am not the sponsor of the bill.

Mr. Pigeon:

Mr. Chairman, I should like to make a suggestion. Let a page boy bring a Larousse dictionary to the hon. member for Laurier; he would certainly find the definition there.

It is the minister who should have a dictionary.

(Text):

The Chairman:

Shall clause 7 carry?

Mr. Benidickson:

I think the minister might enlighten the committee as to the result of operations in connection with this line. Would the surplus, the profit or the loss, be incorporated entirely within the normal financial statement of the Canadian National Railways or does the minister propose to come again to the House of Commons in connection with this investment and ask, as he does in the estimates for 1961-62, page 76, item 417, for the house itself to approve payments to the C.N.R. for deficits certified by the auditors of the company arising in certain circumstances?

Will this particular line of the railway be incorporated in the C.N.R. operating expenses for future years or will an item be required such as those enumerated in vote 417 of the estimates in connection with which, if a deficit arises, a parliamentary vote is required.

Mr. Balcer:

To the best of my knowledge it would be the first alternative.

(Translation):

Mr. Chevrier:

No, Mr. Chairman, I do not want to insist unduly, but I think the minister should now be in a position to give us at least an explanation or a broad definition of what is meant by that phrase, and in what way the "proceeds of the pledge" will be paid into the consolidated revenue fund.

Mr. Balcer:

The definition I have before me is: "The proceeds of the pledge is the amount obtained through the borrowing,

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Canadian National Railways against a transfer of security, chattels or real estate".

Mr. Chairman, such "proceeds of any pledge, sale or other disposition of securities" must be deposited to the credit of the Receiver General of Canada in repayment of the temporary loan or loans granted by the government.

(Text):

The Chairman:

Shall clause 7 carry? (Translation):

Mr. Chevrier:

I would refer the minister to subsection (2) of clause 7.

The board of directors of the company may authorize application to be made to the Minister of Transport for the release of any part of the proceeds deposited pursuant to subsection (1) to the company.

Could the minister explain that second subsection?

Mr. Balcer:

I do not think many explanations are necessary here. The subsection is clear; one only has to read it carefully.

The board of directors of the company may authorize application to be made to the Minister of Transport for the release of any part of the proceeds deposited pursuant to subsection (1) to the company.

Which provides that:

The proceeds of any sale, pledge, or other disposition of any guaranteed securities shall in the first instance be paid into the consolidated revenue fund or shall be deposited to the credit of the Minister of Finance in trust for the company, in one or more banks designated by him.

Therefore, it is the Minister of Transport who authorizes the withdrawal of that money and its use for the purpose of building the railway.

Mr. Chevrier:

But what I would like the minister to clarify is how the proceeds of the sale or pledge of securities from the C.N.R. are to be deposited? It is said in subsection (2) that the application to the minister must originate from the board of directors of the company, or the C.N.R.

This matter does not seem clear to me. This is why I ask the minister to explain.

Mr. Balcer:

I did not fully understand the question. Would the hon. member state it again?

Mr. Chevrier:

I do not understand the exact meaning of subsection (2), and here is why:

I am wondering how the proceeds of the sale or pledge which will be paid into the consolidated revenue fund can be returned or

Canadian National Railways requested from the minister, by the board of directors of the company, pursuant to subsection (2), for the purpose of meeting expenditures in respect of the construction of the railway line.

Because under the terms of the clause we just discussed, the C.N.R. may borrow either on notes, or through bond issues. This is the alternative.

I cannot see any need for subclause (2) of clause 7. Could the minister offer any explanation on that matter?

Mr. Balcer:

Subclause (2) provides that:

The Minister of Transport may approve the applications, and upon the request of the Minister of Transport, the Minister of Finance may pay the amount or amounts of such applications or part thereof accordingly.

I think the very wording of the subclause answers the member's question.

(Text):

The Chairman:

Clause 7 carried?

Mr. Chevrier:

I have a remark to make with regard to the schedule, Mr. Chairman. Could the minister tell us if there is a marked difference between the estimated cost of the Canadian National and the actual cost?

Of course, he would be unable to answer that question with regard to the present line, because it has not yet been built.

However, the transport division must have faced that situation on some previous occasion. I cannot remember it right now, but, was the estimated cost of the Canadian National in the past not exceeded by the actual cost?