The licence system is new, but in the future we will be limiting contracts to those having licences. I cannot say that the Post Office Department has done that last year because there were then no route licences issued.
The complaint is made by many firms in the flying business in the north that the department is allowing under-bidding. For instance, a company will have an air mail contract and be giving satisfactory service over a certain route. When the contract expires and a new contract is called for, some
other company which may have just opened up over-night will put in a lower bid. The result is that rates are forced away down. As the minister stated, the post office is making a substantial profit on this northern air mail service. I believe Canada is the only country in the world where a profit is made on an air mail service of this type. I suggest to the minister and the government that there should be an inquiry into the whole situation from the point of view of the national interest in the development of flying in the north.
I should like to know if the minister would have any objection to giving power to the board of transport commissioners to set fair rates for air mail. I do not believe that board has this power now, but a similar board in the United States, known as the civil aeronautics authority, were given similar powers last year. I have here an article which appeared in the New York Times of April 16 citing a decision of this authority on air mail rates, and I should like to read two paragraphs. This is a ruling of the civil aeronautics authority in the United States. I think it is important to Canada that the situation should be looked into. The statement is as follows:
In announcing its decision-
That is, the decision as to the air mail rate.
-the authority pointed out that under the formula prescribed by the civil aeronautics act, iiiail rates must be compensatory-
That is the key word.
and must assure the "stable economic development of the carrier to meet the needs not only of the foreign and domestic commerce and the postal service of the United States, but also the needs of national defence."
"Ihe development and encouragement of air transportation through an air mail rate which takes into consideration the general factors of the public interest, as set forth in the act " the authority went on, "require that the ratemaking provisions of the act shall be administered in such a manner as to expedite and not retard the attainment for air carriers of an economically sound and stable condition."
I think this bush flying is of such vital importance to Canada that the whole situation should be looked into as quickly as possible by the government.
I think I can answer that in one moment. I agree with the hon. member. It is a matter which has been receiving consideration. The Postmaster General cannot derogate from the right of the Post Office Department to fix the mail rates; but in connection with the first contract falling due,
I have asked the transport board to advise us as to what would be a fair and proper rate for air mail service compared with express service, taking into consideration all the other factors.
May I make just one suggestion to the minister? We have inaugurated this year a new mail service which is of great importance. The next item deals with stamps and matters of that sort; and if we can discuss on that item anything in connection with the air mail we can pass this item to-night.