February 13, 1939

CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

If my hon. friend wants an answer I shall give it to him.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

They are composed in entirely the same manner in accordance with the practice in this house and the practice at Westminster.

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Does my hon. friend want an answer?

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

Let me put this question to the members of the opposition groups: From the moment that Colonel Drew wrote his article and it appeared in Maclean's magazine, has there been the slightest reluctance on the part of this government to submit this question to the most complete and exhaustive investigation? Was there any delay in creating the royal commission? Was there any lack of care in the selection of the

royal commissioner? Was there any restriction put upon the terms of reference which would in any way prevent the commissioner from making a finding upon the facts?

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

There was by the counsel.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

I shall deal with that in a moment. The answers to these questions are, I suggest, clear and conclusive, but apparently they have to be repeated again and again in order to correct the impression which speakers from the opposition are attempting to have go out from this house to the country. The Prime Minister (Mr. Mackenzie King) put the position in the clearest possible light when he opened this debate on February 3. I quote his words:

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 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.

So far as I can recall, the only objection taken by anyone to the form of the original inquiry by Mr. Justice Davis was that raised by the leader of the opposition when he suggested that the commissioner had submitted under pressure of counsel to a restriction of the scope of his findings. I do not wish to misquote my hon. friend, and I shall give his exact words on that point, on page 706 of Hansard:

In other words I find myself asking, was the whole investigation turned into a farce, in this way: that Mr. Justice Davis apparently desired to give opinions but was influenced so strongly by the views I have quoted, including the views of government counsel, that he did not, presumably, dare to do so?

Those are the words used by my hon. friend when referring to this matter.

No one who has even a slight acquaintance with Mr. Justice Davis would believe for one moment that he would be influenced by counsel against his better judgment, and I suggest that it is a reflection on him even to make a suggestion of that kind. The truth is that any restrictions accepted by the commission were not imposed by counsel at all but

Bren Gun-Mr. Rogers

were based upon the provisions of the Inquiries Act, combined with the fact that Colonel Drew, with more caution than he usually displays, failed to make any specific charges against any individual in the article published in Maclean's magazine. So that the suggestion of my hon. friend that it was counsel who imposed a restriction upon the commissioner is surely very wide of the actual facts.

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Would the hon. gentleman quote-I shall not quote it-what Mr. Justice Davis said about that on page 35 of the report?

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

Well, Mr. Speaker, I have read the report; I am capable of forming [DOT] my conclusions from the report in the same way as my hon. friend has done, and I suggest to him that it was for the commissioner to decide-

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

According to the report, he did decide.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

-after arguments of counsel, whether or not he could deal with charges which had not been made specifically by Colonel Drew in the article written in Maclean's magazine. There was no restriction imposed by counsel, least of all any restriction imposed by the government. The only restrictions accepted by the commissioner were those implicit in the terms of the Inquiries Act.

Let me turn now to the issue which is actually before the house in this debate. Perhaps my hon. friend will allow me to state the issue as I see it, even as, a little while ago, he stated it as he saw it. In simple terms the issue before us is this: In the light of the report made by the royal commissioner on the Bren gun contract, should that contract be cancelled forthwith, or should the contract itself and the several questions referred by the commissioner for the consideration of parliament be referred to the public accounts committee for further investigation and report? These are the two. alternative procedures before the house at the present time. In his original amendment my hon. friend proposed that the Bren gun contract should be cancelled forthwith. When that was ruled out of order, the hon. member for Kootenay East (Mr. Stevens) moved another amendment which, I suggest, was in effect for the same purpose, namely to bring about the immediate cancellation of the Bren gun contract; whereas the hon. member for Vancouver North (Mr. MacNeil) who moved the original motion suggested that the report on the contract and allied matters should be referred for investigation to the public accounts committee.

In the first place neither the report of the commissioner nor anything that has been said

in the course of this debate can be urged in justification of the cancellation of the Bren gun contract. There are only two sufficient reasons which might be given for the cancellation of this contract. The first is that the contract is tainted with fraud and corruption, and the second is that in substance it is not a good contract. I think at this point it might be useful to refer to what was said a little while ago by the leader of the opposition with respect to charges that had been made by Colonel George Drew, charges which subsequently were fully investigated by Mr. Justice Davis. The leader of the opposition has said that he is now making no charges of fraud or corruption with respect to the Bren gun contract. In the most recent issue of Maclean's magazine I read these words:

There is not one word in the Davis report which disputes the facts disclosed in Maclean's article.

But I suggest that one thing which has led to the confusion in this debate is this, that members on the opposition side have been dealing in large measure with the evidence brought by Colonel Drew before the commission, and have been ready to draw inferences from that evidence which were entirely rejected by the royal commissioner, Mr. Justice Davis. Maclean's magazine refers to the facts having been fully borne out by the investigation. But it was not the facts alleged by Colonel George Drew in the article which he wrote in Maclean's magazine that caused the most damage in this country, and my hon. friend, I am sure, is fully aware of this. What really tended to create suspicion and undermine confidence in the Department of National Defence were the insinuations and innuendoes which were drawn from those facts by Colonel George Drew. I suggest that the whole purpose of the article written originally by Colonel Drew and published by Maclean's magazine was to prove that there had been fraud and corruption in connection with the Bren gun contract.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

To make the Canadian people think so.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

Undoubtedly that was the impression which was sought to be created in this country by the publication of the article by Colonel George Drew. If there was any doubt on that matter, it was dissolved by the charge made by Colonel Drew to the commissioner in the course of the investigation. Colonel Drew attempted to prove fraud and corruption in this contract and he failed completely to do so. That was the purpose of the attack on *he minister and the Department of National Defence. That was the impression

Bren Gun-Mr. Rogers

which was sought to be created in the country by the proprietors of Maclean's magazine. If I am asked why these specific accusations were not made in the original article, the answer is so clear that he who runs may read. Colonel Drew knew that what he wrote in that original article would expose him to the law of libel and slander, and he preferred apparently to damage other reputations rather than risk his own. He knew equally that what he said in the course of the inquiry before Mr. Justice Davis would be protected by the privilege which surrounds judicial proceedings.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

No, no. The minister certainly cannot go that far. Even a commissioner is not protected.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

I am going to refer in a moment to what Colonel Drew said.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

I have read a judgment of the judicial committee to the effect that the commissioner himself is not protected by any privilege.

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

If it was not the intention of Colonel Drew to prove that there had been fraud and corruption in connection with this contract, how else can one account for his boast, given at the Ontario Conservative convention, that the contract itself would be cancelled before the opening of this session of parliament? Surely it would be only upon the basis of some fraud or corruption in connection with the contract that any government would have been justified in cancelling it, particularly in view of its close connection with the contract let by the British war office. If there had been fraud or corruption in connection with this contract it would have been condemned with equal vigour on all sides of the house. But upon that point the commissioner has left no one in doubt. The leader of the opposition apparently objects to the repeated reading of that section of the report which deals with this important matter, but I suggest that if this entire question is to be placed fairly before the people of the country it is well that we should remember three things: First, that it was the intention of this article in the first place to create the suspicion that there had been fraud and corruption in connection with this contract; second, that all the evidence in the matter was brought before the commissioner; and, third, that the commissioner found that there was no evidence which would justify even the suspicion of fraud or corruption. These are his words:

There is no evidence that any member of the Senate or of the House of Commons of Canada was admitted to any share or part of the contract, or to any benefits to arise therefrom,

or had been promised or given any suggestion that he was to have any share or part of the contract or was to be admitted to any share or part of the contract, or to any benefit to arise from the contract.

The evidence relating to the activities of Mr. Hugh Plaxton prior to the making of the contract has already been set out or referred to in this report, and with that exception (and excepting of course the minister presiding over the Department of National Defence) there is no evidence that any member of the Senate or of the House of Commons of Canada had any connection with or took any part in the discussions or negotiations leading up to the contract.

There is no evidence that any senator or member had any connection with or took any part in the affairs of the company or in the sale of shares or securities of the company.

I think it right to say that there is no evidence (nor is there in the evidence any ground for suspicion) that the minister or the deputy minister or any officer or official of the Department of National Defence was guilty of any act of corruption or anything in the nature of corruption.

Surely in the light of the evidence brought before the commissioner, and in the light of his own findings, it could not be suggested for one moment that there was the slightest ground for the cancellation of the Bren gun contract because of any taint of fraud or corruption.

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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

The minister is trying to clear up the situation, and I should like to understand whether from his standpoint the granting of special privileges to one individual would come in any way under his terms of "fraud" and "corruption?"

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

Upon that point I should say that all the evidence was before the commissioner as to the method of negotiation of the contract, and the commissioner found no evidence of fraud or corruption with respect to that. I should think that would answer my hon. friend completely. The commissioner says further at page 49 of the report:

No substantial objection can be taken in my view to the provisions of the Canadian contract, though in the absence of any competitive bids or terms of manufacture, I am unable to pass upon the substance as distinct from the form of the contract.

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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

Is that not the

point?

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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

I am coming to that:

It is important, of course, that the contract be a good and businesslike contract; but what is more important after all is whether the procedure adopted in making the contract was that best calculated to protect the public interest and to secure the confidence of the people of Canada that there would be no improper profiteering in the private manufacture of war armaments for the defence of the country.

Bren Gun-Mr. Rogers

I have read the entire paragraph given in the report. We will take it for granted, as it ought to have been taken for granted from the beginning of the discussion, that there is no ground whatsoever for the cancellation of the contract upon the basis of its having been tainted in the slightest degree with fraud or corruption.

That brings us to the question of the substance of the contract, as to whether it was in all the circumstances a good contract. The leader of the opposition said that there had been some confusion in the minds of speakers in this chamber with respect to the matters that were really at issue, and I have no doubt that he had in mind that this house had not given sufficient attention to the substance of the contract. Well, I have followed this debate carefully from day to day and certainly the suggestion of my hon. friend did not apply to a number of addresses given from this side of the house by those who were competent to refer in an authoritative manner to the provisions of this contract. I have in mind the speech from the hon. member for St. John-Albert (Mr. McAvity), the speech of the hon. member for Parry Sound (Mr. Slaght), the speech of the hon. member for Vancouver-Burrard (Mr. McGeer), and the speech of my colleague, the Minister of Transport (Mr. Howe). These men spoke either as engineers or as lawyers with respect to both the form and the substance of the contract, and I recall that the member for St. John-Albert stated that the practice followed in the awarding of the contract did not differ in any important respect from the procedure followed in the letting of contracts by the imperial munitions board during the last war. Not onty that, but the Minister of Transport, who is an engineer of long experience, also stated, after a thorough examination of the contract, that in substance it was the kind of contract which would be regarded as a good one had it been entered into by a private corporation in this country.

There is the further question whether or not this contract ought to be rejected simply because it was not given after competitive bids. There are large questions of policy involved in any suggestion of that kind, and that question of policy has been discussed to a limited extent in the course of this debate. It is stated against the method actually followed that it involved the giving of a special privilege to one selected contractor, and the suggestion was made that this practice of necessity should be condemned, because it assumed the form of political patronage. Now, it does seem to me, as one examines the question in terms of policy, that those who 71492-55J

say that we should manufacture all munitions directly in government factories are at least logical to this extent, that by that method one would avoid any suggestion of patronage. But I have not heard it suggested seriously by anyone who has taken part in this debate that in the light of the urgency of the last two years and the critical position of international affairs it would have been wise or practicable for this country to accept the delay that would have been consequent upon the manufacture of Bren guns in a government factory which did not at that time exist.

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February 13, 1939