February 3, 1939

BREN MACHINE GUN CONTRACT

PUBLIC ACCOUNTS AND REPORT OF AUDITOR GENERAL -REFERENCE TO PUBLIC ACCOUNTS COMMITTEE


Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, pursuant to notice given I move: That the public accounts and the report of the auditor general for the fiscal year ending March 31, 1938, be referred to the standing committee on public accounts. Motion agreed to. Bren Gun-Point oj Order


CCF

Charles Grant MacNeil

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

Mr. C. G. MacNEIL (Vancouver North):

Mr. Speaker, on a point of order, yesterday, having given earlier in the week the notice required under the rules of the house, I endeavoured to move a motion which was read to the house, and on your order it was allowed to stand. I submit that on this occasion my motion has priority to that which has been introduced now by the Minister of Finance (Mr. Dunning) inasmuch as the first part of my motion deals with a reference to the public accounts committee of the public accounts and the report of the auditor general.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

On the point of order, I also gave notice several days ago of my intention to move this motion. From my point of' view it is a formal motion, one which it is my duty to move.

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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

It has to be done.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It must be done, I think. I am not interfering at all with my hon. friend.

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

May I have permission to move my motion?

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LIB

Robert Emmett Finn

Liberal

Mr. FINN:

I think that-

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

I desire to move, seconded by the hon. member for Weyburn (Mr. Douglas):

That the public accounts and the report of the auditor general for the fiscal year ending March 31, 1938, together with a copy of the agreement between the government and the John Inglis Company of Toronto for the manufacture of Bren machine guns, the report of the royal commission dealing with said agreement and all related documents, evidence, vouchers and exhibits, be referred to the standing committee on public accounts.

I have already declared my views with regard to this situation. I do not intend to weary the house at this stage with any needless repetition. I merely point to the fact that on page 35 of the report the Hon. Mr. Justice Davis says very definitely:

It will be for those charged with the responsibility of dealing with the facts, i.e., the government and parliament, to examine and study them and to take such action ... as they may see fit.

I submit that this house cannot evade its responsibility in respect of the specific issues referred to parliament by the commission, namely, one, as to whether or not the possibilities of public manufacture or manufacture in publicly controlled factories were fully explored by the government instead of resorting to-

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. Are there any

other hon. members who wish to speak to

the point of order? The hon. member has given me a motion to be presented, but F have not yet put it.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I submit, Mr. Speaker,

that there is no point of order.

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

The second specific reference is contained on page 35 of the report wherein parliament is asked to judge whether the conduct of the individuals concerned was above question. I wish to make it clear that the question of personal corruption and graft is not a matter of reference to the committee, but there is a necessity for inquiring as to whether or not accurate statements were made. .

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I would direct the attention of the hon. member to the fact that the motion he has handed me for presentation to the house is in one respect similar to a motion already moved by the Minister of Finance (Mr. Dunning). Standing order 47, paragraph 384 reads:

It is a rule in both houses, which is essential to the due performance of their duties that no question or bill shall be offered that is substantially the same as one on which their judgment has already been expressed in the current session.

A motion was presented by the Minister of Finance and adopted by the house, and as I read the motion which the hon. gentleman now proposes to submit, it is substantially the same.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

On the point

raised, may I say, Mr. Speaker, that, as I see it, the essential feature of the motion proposed by the hon. member for Vancouver North (Mr. MacNeil) is to get a certain agreement referred to the public accounts committee. When that agreement is before the committee he wishes also to be sure that the public accounts of the year and the report of the auditor general have been submitted. The Minister of Finance, following the customary procedure in this house, immediately after the committees of supply and ways and means had been set up, tabled the public accounts and the auditor general's report and requested that they be referred to the public accounts committee, which committee was constituted some days ago. That part of the motion of my hon. friend has now been complied with, but what he is mainly after is the reference to the public accounts committee of the contract with the John Inglis Company Limited, also the report of the royal commission on the Bren machine gun contract. That is the part of his motion which my hon. friend is concerned about, although it refers also to the other two reports. As regards the other

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two, I submit it is raising a question on a mere technicality and the house should not pay attention to that aspect of it, but should allow the hon. gentleman to proceed with his motion.

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Before you give your

ruling, Mr. Speaker, may I say that I entirely agree with the Prime Minister. The motion of the Minister of Finance is a pro forma motion and while there is some overlapping, it is not intentional.

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

It would be better if the hon. member deleted the words having to do with the reference of the public accounts and the auditor general's report to the public accounts committee.

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

I was under the impression that I was following the prescribed formula necessary to secure reference of the matter to the public accounts committee. I thought that in order to attain this end it was necessary for me to introduce my motion with the preface which it carries. I understand the Prime Minister agrees that there is no overlapping.

If I may proceed, the third issue which should be referred to the public accounts committee, and on which parliament was asked to judge, was whether adequate reasons existed for the failure of the interdepartmental committee to report back to the government when the system of supervision of contracts broke down. Reference to this will be found on page 41 of the commissioner's report.

The fourth point is whether the procedure followed in negotiating the contract protected the public interest. That reference is on page 49.

The fifth and final specific reference is whether proper steps were taken to ensure proper discharge of the responsibility assumed in the selection of a favoured contractor. That reference will be found on page 50.

I wish to add, before I take my seat, that in my opinion it is the responsibility of this committee to examine the system of awarding contracts of this kind to ensure that the operation of political patronage does not in any way prejudice the public interest. I submit that the proper method of inquiry is through a standing committee of this house. It may not be necessary to review all the evidence that was heard before the commissioner, but certain facts have been cited, and starting at the point where the commission left off parliament should deal with the matter in a very searching and adequate way. I submit that this matter should be referred Without delay to the standing committee on

/Mr. Mackenzie King.]

public accounts with instructions to go into it thoroughly and report back to the house thereon, and I so move.

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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

I rise not in any way to oppose the motion of my hon. friend, but rather to remind him that the government indicated some days ago that they were quite prepared to support his motion and to allow it to carry. In fact, when my hon. friend sought yesterday to have the motion carried without debate, the government acquiesced at once, and only because of an objection raised by the leader of the opposition (Mr. Manion) has the motion not already carried and the reference been made to the public accounts committee. An objection having been raised to having the motion carry without debate, I feel I should say a word or two regarding the circumstances which governed the actions of the administration in having the matter referred to in the motion already inquired into.

As the house is aware, the occasion of the inquiry was the publication in Maclean's magazine, on September 1, of a sensational article entitled Canada's Armament Mysteiy. This article attracted a great deal of attention in the public press. It did not contain any charges, but it had allegations of a sort which were calculated to create suspicion with respect to the manner in which government contracts in connection with armaments and munitions were being awarded or carried out. When this article appeared inquiries were made immediately of the Minister of National Defence (Mr. Mackenzie), of myself and others as to what we thought about it. As I recollect, the Minister of National Defence was on his way back from British Columbia to Ottawa when he was interviewed by a reporter of one of the newspapers and asked what he thought about the allegations that were made in the article. The minister replied that he thought that, as soon as parliament met, the article itself and all matters to which it referred should be made a subject of reference to the public accounts committee and the fullest possible inquiry made by the committee into the particular contract to which the article referred, namely, the contract respecting the manufacture of Bren machine guns which had been awarded to the John Inglis Company Limited. That was the minister's position the moment he saw the article.

As I have said, the article was published on September 1, and the minister reached Ottawa a few days after. When he arrived in Ottawa there was a meeting of the cabinet which he attended. He brought the matter up for the consideration of the government, and

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he felt, and other members of the government felt, that if this article with the allegations it contained were to go without investigation until parliament reassembled, which would be some time in the new year, there would immediately be created in the public mind considerable concern over these allegations and it would be assumed that the government was seeking to avoid inquiry into the matter. The government took the alternative course of not delaying for one moment the matter of instituting an inquiry, and adopted the course which would afford the most effective means for the fullest and most searching kind of inquiry, namely, an inquiry under royal commission by a judge of the Supreme Court of Canada.

I ask hon. members if it is not a fact that had there been no judicial inquiry into this matter up to this time, the government would long ere this have been charged with having waited until this parliament met before having any inquiry made into the allegations. That is undoubtedly the indictment which we would have met as soon as we assembled here, that serious charges had been made against the Department of National Defence on a matter connected with that department at a time when conditions in the world were very critical, and that we had allowed months to pass without having any inquiry made. The government felt that the matter was allimportant, in the sense that it was desirable that any ground even for suspicion concerning the conduct of the minister or any member of his staff or anything that had been done or left undone by any official of the government should be immediately known or removed and not permitted to remain a matter of conjecture. The government therefore decided to have a royal commission appointed at once.

In connection with the appointment of the royal commission I should like to draw the attention of hon. members to the fact that the government selected as the commissioner one holding such a high judicial position and so well known by the citizens of Canada generally that there could be no doubt in the mind of anyone as to the appropriateness of the appointment for an inquiry of the kind. The government made its selection from the personnel of the Supreme Court of Canada. May I also draw to the attention of the house the fact that the judge of the Supreme Court selected was not a member of the judiciary who had been appointed under a Liberal administration but one who owed his appointment to a Conservative administration, an administration of which my hon. friend the present leader of the opposition was a member. I think I am right when I say that throughout Canada generally it was felt that if the government had searched the country over, no single person, unless it were the chief justice himself, could possibly have been chosen who would have been regarded as so completely disinterested and so well qualified to perform the function of commissioner in an investigation of this kind as was Mr. Justice Davis.

The article as I say appeared on September 1. It was on September 7 that the commission was issued to Mr. Justice Davis. The commission opened its proceedings on September 19; the proceedings continued until November 24; on December 29 the report of the commissioner was presented. It was immediately translated into French, printed in both French and English, and was tabled the day after this house began its session. I ask if more expedition to have all the facts brought out in the inquiry made available to this House of Commons when parliament met, was possible.

I have mentioned the eminent suitability of Mr. Justice Davis as commissioner, and the expedition with which the whole inquiry was conducted. I should like to emphasize as well the thoroughness with which the investigation was carried on. Perhaps before indicating what Mr. Justice Davis himself felt about the thoroughness of the inquiry, I might give to the house the text of the order in council pursuant to which the commission was appointed. The order will indicate more clearly than anything else the scope of the authority which the commissioner had in conducting the inquiry. The order is dated the 7th September, 1938, and is as follows:

Topic:   BREN MACHINE GUN CONTRACT
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February 3, 1939