March 14, 1939

SC

René-Antoine Pelletier

Social Credit

Mr. PELLETIER:

We in this comer rather agree with the attitude of the Prime Minister towards the amendment. We feel that this board is an entirely different department. It will be a supply department to meet the needs of the Department of National Defence. What I cannot find logical in the attitude of the leader of the opposition is this. He criticized bitterly the closeness of certain contracts in the Department of National Defence. Well, here it is proposed to move these things as far as possible from the Department of National Defence, but now he seeks to bring in some liaison officer, thereby nullifying the attitude he has taken in the past.

Furthermore, the very fact that there would be someone from the defence council as a member of the proposed purchasing board would be detrimental to the board; for this very good reason, that as time goes on the board itself might very well become used to taking suggestions made by a member of the defence council; and inasmuch as a part of their duties would be to look into records and make certain that the requisitions of the Department of National Defence are what are really needed, the time might come when, instead of making inquiries as fully as they should do in the line of their duty, they might simply take the word of the representative of the defence council and let things slide in that way. If that connection were made it would be harmful to the board. They should have as much freedom of action as possible. If the amendment is proposed we will oppose it.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

If that is the case, I must sadly accept the opposition. I would point out to the hon. member that my criticism was not of the department having something to do with the contracts. My criticism was of the government generally for permitting the Bren gun and the Montreal Construction Company's contracts. It was of the whole government and perhaps of the minister, if you will. I was not, however, criticizing the technical officers of the department. The technical officers are the only people who, as far as I am aware, know anything about these matters. I do not accept the minister or his assistant, the Minister of Pensions and National Health, as an authority, as knowing any more about the matter than I do from the technical point of view. I suggest that

Defence Purchasing Board

the board be not merely a group without knowledge of these matters, their only liaison being the minister, so that in the ordinary course, when they wished to have some matter discussed, the minister might send them anyone he pleased.

May I deal with a remark made by the Prime Minister, that he hoped this board would advise the government as to how much they should spend-in other words that it should help them make up the estimates for the Department of National Defence. That is boiling it down to a sentence.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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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:

When requisitions come from the Department of National Defence to this board, one of the duties of the board will be to satisfy itself that these requisitions are necessary to the extent to which they are made out.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

I do not see how this board will satisfy itself in that regard. The board is being placed above the military machine. I have no reason to think it is not a good machine, and now a certain number of men are to be brought in and put above the whole defence department. That is what it amounts to.

Showing that these sums of money are already allocated, we have already passed clause (ii) which says that this means any contract for:

(ii) the construction, erection, repair, improvement or extension . . . which involves an expenditure by the department of a sum in excess of five thousand dollars, and for which parliament has appropriated moneys or authorized commitments.

In other words, the money has already been appropriated.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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LIB

Charles Gavan Power (Minister of Pensions and National Health)

Liberal

Mr. POWER:

Not specifically. Suppose

they need 10,000 blankets, we do not come to parliament for that. And the board might say that 5,000 would do.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

But from what T understood the Prime Minister to say this board is to advise the government how much money is to be spent. The Prime Minister said the S63.000.000 is nothing to what the Defence department wanted if added all together.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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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:

I said that

the greatest difficulty the government had was to be satisfied in its own mind that all of these things are necessary. The government's mind will be much relieved if after parliament has appropriated moneys and before they are used to the extent that may be desired by some branches of the defence service, the government is satisfied that those expenditures are absolutely necessary.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Well, never in my experience have I known of a government that had to have its mind made up for it by someone else as this government has.

Paragraph (a) of subsection (3) of section 4 refers to:

. . . the defence equipment to be purchased, the quantity thereof and specifications therefor . . . the parliamentary appropriation available for such purchase. . . .

"The parliamentary appropriation available for such purchase." This board has nothing to do in regard to telling the government as to the necessities of the Department of National Defence. The department itself, like every other department, makes up its estimates-

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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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:

I did not say this board is to advise the government in making up its estimates. I said my experience in dealing with this question when the estimates were being prepared showed the necessity of having some authoritative body that could say whether or not what is recommended and appropriated is absolutely necessary.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

That is true of every

department. The Minister of Finance in every government has to fight every department, because they all want more money than they get. That is one of the difficulties a government has to deal with. I agree with the Prime Minister that all the departments ask for more than the government feels it can give them, and I understand the Department of National Defence at the present time wanting more than it gets; but it seems to me that is settled irrespective of this board.

This board is not for the purpose of going over the estimates of the Department of National Defence. Once the minister of the department has submitted to the Minister of Finance, or to the government, or to the treasury board if you will, its estimates, and this $63,000,000 has been arrived at without any committee to help them decide, then this defence purchasing board is for the purpose of seeing that the expenditure of that money is carried out in a proper fashion. That is the real duty of this board as I see it. I again suggest to the minister or his colleague or the Prime Minister that one or another of them tell us something as to who is to be on this board. I do not mean the names; but in view of the remarkable statement made by the Prime Minister, will he tell us what kind of men are to be on this board? The Prime Minister's statement gives a new purpose for this board; surely he has something in the back of his head that he is not telling the committee in regard to the type of or

Defence Purchasing Board

the occupations of the men who will constitute a board of this kind. I am going to sit down and let one of the three hon. gentlemen tell us what kind of board it is to be.

Amendment (Mr. Manion) negatived: yeas, 15; nays, 72.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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SC

René-Antoine Pelletier

Social Credit

Mr. PELLETIER:

The last clause of subsection 1 of clause 3 reads:

. . . who shall be appointed by the governor in council and who shall hold office during good behaviour for five years.

The usual phraseology employed in a case of this kind simply says "shall hold office during good behaviour" or "during pleasure." There must be a definite reason for using the language used in this clause. Is it because the government contemplates or believes that at the end of five years they will no longer need to purchase munitions? I should like to know just why these words were inserted.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

I assure my hon. friend that is the phraseology usually employed. The appointment is definite for five years.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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SC

René-Antoine Pelletier

Social Credit

Mr. PELLETIER:

There is no provision here to reappoint them after the period of five years expires. Further clauses provide that certain members may be replaced, but what happens at the end of the five years? Would it be necessary to enact new legislation reappointing these people, or in what manner may they be reappointed? I assume the term of five years is taken as a definite commitment, and it would be necessary either to amend the section or to use some other authority to reappoint these people.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

The point made by my hon. friend has perhaps some force. The words "may be reappointed" might be inserted, but I do not think it is legally necessary. I shall, however, be glad to look into it.

Section 3, subsection 1 agreed to.

Section 3, subsections 2 and 3 agreed to.

On section 3, subsection 4-Chairman to devote whole time.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

When this bill was in the resolution stage it was said from all comers of the house that the effectiveness of this piece of legislation would depend very largely upon the integrity and ability of the personnel. If the persons selected for this board are of high calibre they can do some very effective work; if they are not we are wasting our time here this evening. In the investigations carried on after the war in Great Britain, France and the United States, unfortunate conditions were

revealed of men holding positions of similar character who were found to be either directors or shareholders in large armament concerns. I think the government is to be commended for having suggested that the chairman of the board shall not after his appointment be an officer or director of any industrial corporation or company. I wonder, however, if the minister would consider adding to that the words: "nor shall he be a shareholder in any firm engaged in the manufacture of armaments." I do not want to make it too strict. The man selected may be in business, and he should not be expected to drop all his connection with the business world; but the confidence of the Canadian people in such a board and its personnel would be strengthened if they could be absolutely sure that he had no business connection whatsoever with companies that might receive contracts from this board. If he had shares in such companies there is no reason why he could not sell them; it would be simply a matter of asking any man who takes this position to dispose of any shares he holds in any company likely to make application for a contract. And if any company in which he had shares were not making application at the time but later decided to make application, it would be his duty to sell his shares in that company. Only in that way can we give the people of Canada a feeling of confidence in the board that is to be appointed as a result of the legislation we are now considering. I will not move any amendment until the minister has said something about it, but I would suggest that in line 29 of subsection 4 of section 3 the words "nor shall he be a shareholder in any firm engaged in the manufacture of munitions" be added.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

The point mentioned by my hon. friend was carefully considered before the legislation was brought in. While I have a certain amount of sympathy with the point of view he has expressed, I am very much afraid that, since it is the desire of the government to obtain an outstanding business man for this position, it would be practically impossible to ask any business man not to be a shareholder in any company. I would agree with my hon. friend if he were to say "a shareholder in any company doing business with the board or the government"; then it would be a different matter, but I think it is going rather too far to extend the principle as far as my hon. friend would carry it.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

I am afraid

the minister misunderstood me; that was not what I said. I am not suggesting that the word "shareholder" should be inserted after

Defence Purchasing Board

the word "director." That would be unfair. Any man now engaged in business could not be expected to terminate his contact with the business world because he accepted this responsible position. What I am suggesting is that the words "nor shall he be a shareholder in any firm engaged in the manufacture of armaments," be inserted after the word "company" in line 29. That would not touch any other kind of firm, and I think that makes it quite specific. Certainly I would not extend it to every firm.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CON

Karl Kenneth Homuth

Conservative (1867-1942)

Mr. HOMUTH:

What docs the hon. member mean by "armaments"?

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

I would mean any firm that might be likely to obtain contracts from this board. No matter how fairly it might be done, I think the man himself, if he thought it over, would want to have this provision inserted; because if any firm in which he held shares should receive contracts from this board in any considerable amount he would never be able to remove the suspicion from the minds of the Canadian people that those contracts were granted to that firm primarily because the chairman of the board held shares in it. I would think he would want that provision inserted for his own protection. I know any man I have in mind who might be considered likely to be appointed to this position would, for his own protection, sell any shares he held in any armament manufacturing concern.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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LIB

Charles Gavan Power (Minister of Pensions and National Health)

Liberal

Mr. POWER:

Personally I would be inclined to urge the minister to accept the amendment suggested by my hon. friend, but I am not quite sure whether the word "armaments," as has been pointed out by the hon. member for Waterloo South, would cover it. For instance, as has been already pointed out in this house, munitions might mean wheat, feed, fodder, and a thousand and one things. Perhaps by reference to section 2, paragraph (b) (i), we might find some better expression; I see there the words "defensive equipment." I am not quite sure what term I would feel like recommending, but in principle I would be quite prepared to recommend the adoption of the suggestion of my hon. friend, if we could agree upon the proper phraseology.

Topic:   NATIONAL DEFENCE
Subtopic:   CREATION OP DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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March 14, 1939