April 1, 1938

IND

James Samuel Taylor

Independent

Mr. TAYLOR (Nanaimo):

Two per cent for forty years would not represent more than seventy per cent.

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CCF

Abraham Albert Heaps

Co-operative Commonwealth Federation (C.C.F.)

Mr. HEAPS:

Two per cent each year amortized over a period of forty years would be, as far as I understand arithmetic, approximately one hundred cents on the dollar, and not seventy, as the hon. member states.

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CON

Alexander McKay Edwards

Conservative (1867-1942)

Mr. EDWARDS:

Seventy per cent is about right.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Two per cent of the bonds, not two per cent capital.

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CCF

Abraham Albert Heaps

Co-operative Commonwealth Federation (C.C.F.)

Mr. HEAPS:

Well, if it is two per cent of the bonds, that is eighty per cent.

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CON

William Earl Rowe

Conservative (1867-1942)

Mr. ROWE (Dufferin-Simcoe):

That is near enough.

' Mr. HEAPS: I do not wish to continue the discussion on this point because the facts

are obvious even to my hon. friends. The issue is not whether the income was $273,000 and the expenditure was $65,000 a year. The question is whether there should be a bridge there owned in part by the province of Ontario, or whether we should allow a private corporation to construct a bridge which will be owned in perpetuity by a United States company whose head office is in that country. That is my main reason for supporting the present bill. I saw the old bridge a few weeks ago down in the Niagara river, and I think it was not a bad place for it to be. It is unfortunate for the people who owned the bridge that it is where it is; but so far as the people of Ontario are concerned, it would be very desirable from a purely Canadian standpoint, as a "Canada first" policy, may I say, to-have the people of Canada own that part of the bridge which is located in the Dominion of Canada.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Why does the hon. member not put that in the statute?

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CON

Joseph Henry Harris

Conservative (1867-1942)

Mr. HARRIS:

I am glad to see the hon. member for Winnipeg North enrolled in the ranks of the "Canada first" party. Forty years at two per cent would be eighty per cent of the cost of the bridge; we can admit that.

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?

An hon. MEMBER:

No.

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CON

Joseph Henry Harris

Conservative (1867-1942)

Mr. HARRIS:

As regards this particular

clause-

The company may construct, maintain and operate a bridge across the Niagara river-*

-the company owns only half; the legislation embodied in this particular bill does not make proper provision for the consummation of the work at the other end. In the committee of which I had the pleasure of being one of the members it was quite clearly shown that since the advent of the Peace bridge the revenue has gone down there considerably. The hon. member mentioned the cost of maintaining the bridge; to-day he goes a degree further and adds the depreciation charges; but what about the interest on the four million dollars which it is proposed to spend on this particular project?

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CCF

Abraham Albert Heaps

Co-operative Commonwealth Federation (C.C.F.)

Mr. HEAPS:

I did not discuss the cost of the new bridge.

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CON

Joseph Henry Harris

Conservative (1867-1942)

Mr. HARRIS:

Interest costs money, and five per cent a year on four million dollars is $200,000 of the $273,000 mentioned. That leaves only $73,000-S65,000 for the operation of the bridge and less than $10,000 for depreciation-and anyone who is in business knows that is not nearly enough. Over and above that, do we know that $4,000,000 will be sufficient? Members of the committee

Supply-National Defence

remember that the original bill provided for some 87,000,000 if necessary and 8500,000 for some other costs. Then they drop down to

84.000,000: they divide that up and show where it is going to be spent. Two million dollars is the cost of the bridge and two million dollars is the cost of the approaches on either side of the bridge.

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?

An hon. MEMBER:

Perhaps.

in the woodpile. Perhaps between now and next Tuesday, when the bill again comes before the committee, the minister will tell us just where that Ethiopian is.

Progress reported.

The house in committee of supply, Mr. Sanderson in the chair.

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CON

Joseph Henry Harris

Conservative (1867-1942)

Mr. HARRIS:

Somebody has said "perhaps," and that remark is well placed. But if it is one million dollars of assessable value taken out of the city of Niagara Falls, where is that city to get its assessment on which to levy taxes to keep going? What provision is being made for that? What provision was made for the city of Niagara Falls to come forward and state its case?

With regard to this particular bridge, as compared with the bridge of the International Railway Company, it is said that it will cost two million dollars. I should like to see a publicly owned bridge there, but I object to this extra two million dollars for the costs of the approaches on either side. I should like to hear some sort of analysis of these figures by the Minister of Transport before I vote on the passage of this particular bill. In the railway committee they called the company twopenny-halfpenny because it only had four lanes of traffic. In the case of the old company, foundations worth half a million dollars are there and will not have to be built again, but under the ownership setup of this new bridge they must be compensation to the International Bridge Company-another added cost to the new project. All this is going to make it a very expensive affair for the people of Ontario. Why should the province have to find $4,000,000 for a bridge which is being sponsored privately for the time being, because, according to the statement of the Minister of Transport, there is no other way to introduce the legislation? Then the owners will be bought out with

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DEPARTMENT OF NATIONAL DEFENCE


Departmental administration, $425,720.


LIB

Vincent-Joseph Pottier

Liberal

Mr. V. J. POTTIER (Shelbume-Yarmouth-Clare):

When the committee rose I was attempting to give the approximate per capita expenditure of the world for defence. I gave the figure of S6.49, saying that Germany had the highest, 841.72, and Panama the lowest, 16 cents, while Canada's per capita expenditure was $3.18. Out of the fifty-nine nations that I said were listed, Canada is twentieth from the bottom of the list; in other words, thirty-nine nations spent more per capita than our estimated expenditure for last year.

Another interesting deduction which can be taken from the statement I refer to is the expenditure of the chief dictator groups, Germany, Italy and Japan. It is estimated that last year their expenditure was $3,513,889,500. The next group that is interesting to study is the chief democracies, in which I include England, France and the United States. Their estimated expenditure was $2,708,838,375. The other group that we might consider is that which represents the communistic mode of thought. They spent something over $4,000,000,000 in national defence. When we compare those figures with the estimated expenditure for Canada of $34,000,000 for this year, we have a very small expenditure indeed.

Another important item that we should consider is the expenditure for defence on the North American continent. For last year it is estimated at $1,075,000,000. I include in that the islands adjacent to the continent. The per capita expenditure on the

the money of the province of Ontario. To North American continent last year was estimy mind something more should come out mated at S6.24. Canada's was $3.18. with regard to this particular bridge. As Complete figures for the fifty -nine countriessomeone suggests, there may be an Ethiopian are as follows: Country Approximate Estimated amount Expenditure Approximatedefence-1937 per sq. k.m. per capitaAlbania . $ 222,360 $ 7 92 $ 0 20Argentina . 48,933,450 18 11 3 90Australia . 32,662,792 4 23 5 40Austria . 39,197,450 466 63 6 50Belgium , 53,533,000 1,784 00 6 51Bolivia . 58,560,000 45 00 19 50Brazil . 61,981,400 7 16 1 45Bulgaria . 15,628,380 156 20 2 51

Supply-National Defence

Country

Canada

Chile

China

Columbia

Costa Rica

Cuba

Czechoslovakia

Denmark

Dominican Republic

Ecuador

Egypt

Estonia

F inland

France

Germany

Greece

Guatemala

Haiti

Hungary

India

Iran

Iraq

Irish Free State

Italy

Japan

Latvia

Lithuania

Grand Duchy of Luxemburg

Mexico

Netherlands

New Zealand

Nicaragua

Norway

Panama

Peru

Poland

Portugal

Roumania

Russia

Salvador

Siam

Spain

Sweden

Switzerland

Turkey

Union of South Africa

United Kingdom and Northern Ireland..

U.S.A

Uruguay

Venezuela

Kingdom of Yugoslavia

Estimated amount Approximate Expenditure Approximatedefence-1937 per sq. k.m. per capita$35,000,000 $ 3 68 $ 3 1820,760,000 27 96 5 00144,900,000 13 05 0 326,888,000 6 18 0 75424,800 7 00 0 7518,381.600 183 00 4 6962,586,170 447 04 4 129,552,780 222 13 3 00380,000 7 63 0 251,246,560 4 00 0 6010,627,050 10 60 0 674,939,500 105 08 4 4519,879,205 51 23 6 33437,558,875 794 11 10 652,799,620,600 5,956 64 41 7227,880,837 214 46 4 501,778,400 16 09 0 711,360,000 52 31 5 0017,380,000 185 37 1 94154,775,140 33 65 0 4216,349,880 11 87 1 065,142,956 11 35 1 747,328,437 106 20 3 50313,267,500 1,010 54 7 45401,001,400 594 95 4 147,990,200 121 05 4 6312,919,200 230 60 5 16336,800 168 00 1 1322,240,000 11 68 1 2341,120,050 1,177 01 5 124,918,725 14 62 4 00470,850 4 50 0 7510,311,000 34 33 3 6884,400 1 00 0 168,554,000 6 08 1 39145,689,600 375 23 4 2628,000,080 304 30 3 8468,322,890 231 60 3 654,020,440,000 191 42 20 071,440,000 42 35 0 8710,252,000 19 79 0 7568,559,200 136 30 2 7645,795,420 104 06 0 7423,628,045 576 04 5 7550,976,200 66 81 3 148,140,981 6 75 0 881,278,079,500 5,238 03 27 19993,200,000 127 33 7 757,593,600 40 60 3 757,750,000 8 51 2 2754,501,840 220 65 3 60

Afghanistan, Saudi Arabia, Honduras, Liberia and Paraguay are not listed on this table. I could not obtain any adequate rate of exchange.

I mentioned that these figures are given in Canadian currency. We must keep in mind, when comparing expenditures with other countries having a lower standard of living, that the same amount will produce more value in labour and material in such countries. As Canada has a high standard of living, it would make the proportion for defence less than in a foreign country for the same amount.

I have made no reference to colonies or dependencies, as they have themselves no budget for defence. They have police forces

[Mr. PottierJ

which act as defence guards, but their cost is not included in this statement.

I do not agree with the hon. member for Greenwood (Mr. Massey), when he said in effect that the expenditure for Canada is grossly inadequate. We have to keep in mind in connection with our expenditure for defence our internal possibilities, and a balanced proportion to other expenditures must be maintained. We cannot afford to spend all our money on training a new army when we already have with us an army on relief. The maintenance of Canadian unity is also a serious factor. It is just as serious to have bankruptcy and dissension from within Canada as war from without. I should say, however,

Supply-National Defence

that I support the suggestion made by the hon. member for Parry Sound (Mr. Slaght) that as our next step we must try to increase our air force and develop within the next two years say one thousand Canadian air pilots. I recommend this suggestion to the Minister of National Defence and to the government for their most serious consideration. In other words, I submit we should go as far as possible, keeping the expenditure within a reasonable proportion and maintaining an increasing defence in the air. The trend of defence in other countries in the development of their air forces is out of proportion with the other units of defence, and Canada must keep this in mind.

In this morning's paper we find a declaration from Rome yesterday by the premier of Italy in these words:

Aerial warfare is destined to become increasingly important in the war of to-morrow.

Developments the world over substantiate that statement, and Canada must not forget this development.

I have gone over the amount of our estimates for defence as well as the estimates for other countries. We must realize that huge expenditures are being made throughout the world, and these expenditures are apparently on the increase, in that for 1938 the estimates for Great Britain, the United States, France, Germany, Italy and Japan are growing by leaps and bounds. We saw an announcement from Tokyo last Sunday stating that the government had introduced and gained enactment of the regular budget of $830,000,000 and a military budget of $1,400,000,000 to meet the cost of the war in China in 1938; in other words, more than three times the expenditure estimated by the League of Nations for Japan in 1937.

We have in this morning's paper a further declaration from the premier of Italy referring to the cost of war. He declares that by arming further, regardless of cost-note that-he intends to assure general peace, but above all "our peace." This may all end in the general bankruptcy of nations. I sometimes wonder whether that is not the next hazard of this world rather than that of war. The figures I have just given are food for serious thought in that regard. The expenditures of Canada, however, must be viewed from two angles: How much can we spend, and how far should we go? The proper course is not going to be that indicated by one extreme or the other; the proper course must be that followed by the best considered opinion of Canadians as a whole, keeping in mind the past, having a thought for the present, and an eye for the

future. It appears reasonable that we should at least follow the other dominions of the commonwealth. We are in more or less the same position as they are. On looking at the estimated expenditures for 1937 of Australia, Canada, the Irish Free State, New Zealand and the Union of South Africa, we find a total of $88,000,000. Out of that Canada spent $35,000,000. Australia, it is true, has increased her expenditure this year. The average per capita expenditure for the nations of the commonwealth outside Great Britain amounted to $3.39 as compared with Canada's $3.18. I am of the opinion that the estimate which we are going to be asked to vote upon for national defence is a fair amount, having in mind our external situation, our financial ability and our geographic position, and I intend to support each item of the estimates when they are voted.

I have referred to expenditure. I now propose to deal with the policy of the government in making those expenditures, having particular reference to the maritime provinces. It has been declared by the Minister of National Defence that the Canadian defence policy is in the first place for the preservation of Canadian neutrality; in the second place for the defence of Canadian coast lines, ports and terminals, and for the defence of the focal areas of our trade routes in case of necessity. We in the maritimes are particularly interested in the defence of our coast lines, ports, terminals and trade routes. I think at this time it is fair to go back to the last war, 1914-1918, and try to find indications there of what we can expect in the next war. We find that on the Atlantic coast at the close of the war, as nearly as I have been able to get the correct figures, we had:

10 auxiliary patrol vessels

12 Canadian trawlers 7 trawler sweepers

36 trawlers

36 drifters

15 drifters (imperial and temporarily loaned) 6 United States submarine chasers 1 United States torpedo boat.

In all, on the Atlantic coast we had 123 ships. It should be realized by every hon. member that German submarines were within twenty-five miles of the Atlantic coast during the last war. I well remember vessels that I had seen a number of times which were sunk within seeing distance of the shore. This may surprise some hon. members, but in order that there may be no doubt whatever in their minds I should like to refer them to the report made by a commission appointed by this government. I refer to what is known as the reparations commission, which reported first

Supply-National Defence

in 1927 and again in 1930, 1931, 1932 and 1933. This is officially known as the report of the royal commissioner appointed by His Excellency the Governor General in Council in pursuance of the Inquiries Act to investigate and report upon all claims which might be submitted to the commissioner for the purpose of determining whether they were within the treaty of Versailles, and the fair amount of such claims. At page 21 of this report it is indicated that in class A, having to do with fishing schooners and fishermen, there were 758 claims amounting to $1,113,384.09. Then on page 71 of the report there is an illustration of what was occurring:

He Schooner Nelson A

Claimant is a Canadian. The schooner, 72 tons, %vas captured by enemy submarine August 4, 1918, and sunk by bombs twenty-five miles from Shelburne. She had sailed from Yarmouth in July and was returning from a fishing trip off the Nova Scotia coast, with a catch of 625 quintals of halibut.

There will be found in the report reference to twenty-one vessels that were dealt with in that way, a number of them close to the Atlantic coast.

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CCF

Charles Grant MacNeil

Co-operative Commonwealth Federation (C.C.F.)

Mr. MacNEIL:

Were these vessels sunk by direct enemy action within Canadian coastal waters?

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LIB

Vincent-Joseph Pottier

Liberal

Mr. POTTIER:

No; they were not within the three mile limit, if that is what my hon. friend means.

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CCF

Charles Grant MacNeil

Co-operative Commonwealth Federation (C.C.F.)

Mr. MacNEIL:

Were they within the twelve mile limit?

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April 1, 1938