February 10, 1939

LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

Absolutely

incorrect.

Topic:   CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

The British government is continuing production of the Bren gun, but is it not also providing for the production of a still more modern and reliable light machine gun? Technological advance has been rapid in the armament industry during recent years What assurance have we that, by reason of the policies pursued by the minister, we will not be stuck, to use the language of the street, with 7,000 guns as obsolescent in 1941 as the Lewis gun is to-day?

Topic:   CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
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LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

Is my hon. friend suggesting for one second that the Bren gun is not a most modem, efficient weapon?

Topic:   CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

That is what we intend to ask.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

And therefore we should do nothing.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

Because the hon. member intends asking.

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

In the light of our experience with the Ross rifle we intend to ask the minister in the public accounts committee as to the accuracy of these reports.

Topic:   CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
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LIB

Alexander MacGillivray Young

Liberal

Mr. YOUNG:

Does my hon. friend know of a better gun?

Topic:   CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

The minister's eulogy of Major Hahn will prompt further investigation into the representations made by Major Hahn to the department and the British war office as to his financial stability and his business connections. When he first went to England he was the head not of the John Inglis Company but of the British Canadian Engineering Company. He was not the head of a company worth two million dollars, as the prospectuses issued on behalf of his company at that time would seem to indicate. As far as the evidence shows, no attempt was made to correct the false impressions created within the British war office at the outset of negotiations. He was simply a promoter astute enough to expand a thirty dollar cash consideration into a financial transaction on paper involving $1,-

400,000.

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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

Did Colonel Drew write what the hon. member is reading?

Bren Gun-Mr. MacNeil

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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

I am making this statement on my own responsibility. The minister can make his.

The minister gave no answer to our question as to why it was necessary to set up a series of dummy companies, unless to conceal profitable trading in stock issued. The minister knows as well as I do that in the not too distant future those who have participated in this deal will reap a rich reward quite apart from the profits guaranteed by the contract for the manufacture of the Bren gun.

When the minister repeated his statement of a former occasion that this was the finest contract ever made on behalf of the Dominion of Canada he attempted to justify that statement by asserting that it has effected a saving to the country of something like $1,300,000. When we break this figure down in the light of the evidence given by members of the interdepartmental committee, we find that they claim a saving of capital expenditure of something like $551,000 because the British government will pay one-third of the capital investment. We find that another saving is claimed of $864,000 because the John Inglis Company will carry out a complementary order for the British government. According to the evidence the estimated cost of making 7,000 guns would be $5,402,000, and the estimated cost of making 7,000 guns as part of a production of 12,000 guns would be $4,537,000.

I refer again to the evidence which discloses that the British government in the original agreement with the patentee made provision for manufacture in the dominions provided such manufacture would be carried on in government-operated factories. I submit that this same saving, or one even greater, could be achieved under public manufacture. If the British government was willing to invest over half a million dollars in the capital outlay of a private enterprise to secure a secondary source of supply, it is safe to assume that they would be much more willing to extend the same assistance to public enterprise. It follows that we could have made the same saving on capital expenditure in a government-operated factory. If the British government were willing to place an order for 5,000 guns with a private firm, they would have placed the same order with equal alacrity with a government-operated factory. It follows that we could have made the same saving, under public manufacture, on production.

In addition, under public manufacture, this country would have saved the profits allowed to the John Inglis Company under the contract. Whatever may be said about separate contracts, the contract from the

British government was negotiated with the aid of the Canadian government. The minister stated, in answer to a question put last session by the then leader of the opposition, that it was not through the good offices of the Canadian government, although it has been clearly proven in evidence that Major Hahn acted, while a potential contractor, as the accredited representative of the Canadian government in respect of the Bren gun deal. As a matter of fact the Minister of Agriculture (Mr. Gardiner) described it as a joint contract. If we are to have such joint contracts, why should we have such hypocrisy about the matter? It is vastly preferable that we should accept orders from the British government for manufacture in .government factories than that we should be involved in a profiteering deal such as we are discussing.

I propose to vote against the amendment because I consider it hopeless to continue a satisfactory inquiry into the matter in committee of the whole because of the attitude taken by the government. I can only hope that by persistent endeavour in the public accounts committee the truth about the situation will be made known to the public.

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LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

Hear, hear. So do we.

On motion of Mr. Pouliot the debate was adjourned.

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NAVAL SERVICE ACT

SANCTION BY PARLIAMENT OF ACTION BY NAVAL FORCES OTHER THAN FOR DEFENCE


Mr. C. G. MacNEIL (Vancouver North) moved for leave to introduce Bill No. 17, to amend the Naval Service Act. Mr. LAPOINTE'(Quebec East): Explain.


CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

The purpose of this bill is to amend the Naval Service Act to make it conform with the present constitutional status of Canada.

Topic:   NAVAL SERVICE ACT
Subtopic:   SANCTION BY PARLIAMENT OF ACTION BY NAVAL FORCES OTHER THAN FOR DEFENCE
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LIB

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

Liberal

Mr. LAPOINTE (Quebec East):

Is this the same bill as was introduced last year?

Topic:   NAVAL SERVICE ACT
Subtopic:   SANCTION BY PARLIAMENT OF ACTION BY NAVAL FORCES OTHER THAN FOR DEFENCE
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CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

It is the same bill.

Motion agreed to and bill read the first time.

Topic:   NAVAL SERVICE ACT
Subtopic:   SANCTION BY PARLIAMENT OF ACTION BY NAVAL FORCES OTHER THAN FOR DEFENCE
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MILITIA ACT AMENDMENT

SANCTION BY PARLIAMENT OF PLACING MILITIA ON ACTIVE SERVICE BEYOND CANADA

February 10, 1939