March 16, 1939

CCF

Charles Grant MacNeil

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

Mr. MacNEIL:

Will the minister explain

how this section will operate and how the appropriations will be presented to parliament?

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

Section

17 empowers the government to borrow money up to the amount designated as chargeable to capital account in the annual appropriations of the department. It will be recalled that the estimates recently tabled provided under national defence for ordinary expenditures of 834,000,000 odd and for capital expenditure of $29,000,000 odd.

The present section further provides for borrowing power during the current year up to this limited amount, something just over $29,000,000. Subsection 2 of section 17 makes formal provision for making the principal raised by way of loan, and the interest charged thereon, a charge on the consolidated revenue fund.

Section 18, provides for the amortization of the amount borrowed for expenditure on defence. It is provided that the capital sum shall be repaid in ten equal annual instalments out of appropriations provided by parliament for the department, and that the interest payable shall be at the rate of three per cent. There is also a formal provision that the sums required to be paid shall be paid at such times and in such proportions as the treasury board may from time to time direct.

In regard to the principle followed in separating the items in the defence estimates to be financed by capital expenditure from those to be financed in the ordinary way, the principle is based largely on the question of durable value. The amounts required for the replacement of current supplies belong largely to ordinary account. Fortifications, guns, or something else to be acquired whose lifetime would be from ten to twenty years would be financed from capital expenditure, repayable over a period of ten years.

Defence Purchasing Board

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
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SC

John Charles Landeryou

Social Credit

Mr. LANDERYOU:

There is provision for retirement of the expenditure, provision for a sinking fund. I understood the minister to say that this principle of repayment within ten years of the money we have borrowed would have to be set aside in the event of war, and drastic financial provisions would have to be made overnight. Just what drastic provisions would be substituted for this?

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

That, of course, will be a matter for the administration which is in charge when the emergency arises. There is no question that if a national emergency of any magnitude should arise, any government would be confronted with the necessity of providing large sums in x short space of time.

. Mr. ROSS (St. Paul's): Why is it that this principle of amortizing over a period of ten years the amount to be borrowed is not followed in connection with public works or other expenditures? Why should we depart in this particular case from what has been a recognized principle? I do not see any object in doing it, because it is only taking money from one pocket and putting it into another. It may make the expenditure for the year a little smaller, but the money is to be spent just the same as it would be on a public building.

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

It seems an

unusual procedure that one department should enter into this type of arrangement. It appears to me the procedure to be followed should be that the Minister of Finance would pay the money out of the consolidated revenue fund and, if required, float such bonds and loans as were necessary to repay it. It is unusual to tag what is really a financial bill on the end of a defence purchasing bill. Has the minister any reason for following that procedure? Is it customary?

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

I believe this is the first time we have done it in Canada.

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Was there

any particular reason for doing it? I was wondering why it was done. I am not protesting, because I do not understand the minister's reason for doing it.

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
SC

John Charles Landeryou

Social Credit

Mr. LANDERYOU:

Could the minister explain the purpose of having this provision in the bill?

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink
LIB

Ian Alistair Mackenzie (Minister of National Defence)

Liberal

Mr. MACKENZIE (Vancouver):

Considering the lateness of the hour I shall take due note of these profound questions and answer them when the committee sits again.

Section 17 stands.

Progress reported.

Topic:   QUESTIONS PASSED AS ORDERS FOR RETURNS
Subtopic:   NATIONAL DEFENCE
Sub-subtopic:   CREATION OF DEFENCE PURCHASING BOARD TO ENTER INTO CONTRACTS FOR MUNITIONS, EQUIPMENT, MATERIALS AND SUPPLIES
Permalink

At eleven o'clock the house adjourned, without question put, pursuant to standing order. Friday, March 17, 1939


March 16, 1939