September 11, 1939

LIB

Pierre-Joseph-Arthur Cardin (Minister of Public Works)

Liberal

Mr. CARDIN:

I move, Mr. Chairman,

that the preamble be stricken out and that the following be substituted therefor:

Whereas it is desirable to promote coordination and cooperation between existing organizations and to provide, if any need shall arise, for the assistance of the wives, children and dependents, resident in Canada, of officers and men who during the present war may be on active service with the naval, military or air forces of his majesty or of any allied or associated power: and, whei'eas it is desirable to provide an organization for such purpose:

Topic:   CANADIAN PATRIOTIC FUND
Subtopic:   PROVISION FOR ASSISTANCE TO DEPENDENTS OF OFFICERS AND MEN ON ACTIVE SERVICE
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Amendment agreed to. Preamble as amended agreed to. Bill reported, read the third time and passed.


COMBINES INVESTIGATION ACT

STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION


Hon. NORMAN McL. ROGERS (Minister of Labour) moved the second reading of Bill No. 3, to amend the Combines Investigation Act.


CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Hon. C. H. CAHAN (St. Lawrence-St. George):

If this were deemed to be a necessary war measures act, or for the purpose of dealing with the subject matter as a necessary provision in view of the fact that Canada is in a state of war, I would hesitate to object to its enactment. Under the War Measures Act the governor in council has full power to enact orders, rules and regulations which will have validity during the period of the war, and, subject to amendments during the war by the governor in council, to make all provisions necessary to modify the existing combines act or, in so far as it is deemed necessary, to modify any other act as a war measure. In the orders, rules and regulations which have

Combines Investigation Act

already been enacted and laid upon the table of the house, the governor in council very properly has dealt with the substantive provisions of certain existing acts. For instance, the Patent Act is changed in important particulars; and during the previous war, under the same War Measures Act, other fundamental acts were dealt with in so far as it was necessary to modify them temporarily or for the duration of the war. This measure is not, I think, a measure of that kind.

During a recent session of parliament, the session of 1937, the combines act was amended, and serious discussions took place in this house with regard to its provisions. Subsequently an agreement wTas made between this house and another chamber as to the terms of certain provisions which were then enacted and which are now being repealed, not for the duration of the war, but for all time. I suggest that it is far better, so far as the fundamental provisions of this act or of any other act are concerned, that they should not be repealed for all time under the guise of meeting certain exigencies which are likely to arise or which may arise during the prosecution of the war. Therefore I would suggest that, in so far as, during the progress of the war, it is deemed advisable to modify the existing combines act, it should be done under the provisions of the War Measures Act, and then the regulations so made may be amended from time to time, as they were during the last war, in order to meet war exigencies as they arise. The fact is, I do not think this measure is a legitimate measure, in that it makes the amendment of fundamental provisions of the existing combines act not temporarily, nor to serve the exigencies of the war, but to serve for all time. That is not now necessary, and it raises a dispute which it is advisable, or at least expedient, to obviate during this present session of parliament.

There is a provision which I suggest the minister should consider if it is decided to deal by order of the governor in council with these exigencies which may arise during the war, and it is this. I speak from experience in the last war. For two years and a half, at least, I was chairman of a board which had to do with the manufacture of armaments and supplies to the extent of many tens of millions of dollars, and, for that purpose, had under its control and supervision some fifty industrial corporations in the United States and Canada. It would, I think, have been impossible to have dealt effectively with the manufacture and production of those military supplies if there had been in force in the United States, where part of the manufacture took place, or in Canada,

where a portion of it took place, such very strict and severe provisions as are now found in the combines act.

Section 2 of the act, under "definitions," provides that:

In this act, unless the context otherwise requires,

(1) "Combine" means a combination having relation to any commodity which may be the subject of trade or commerce, of two or more persons by way of actual or tacit contract, agreement or arrangement having or designed to have the effect of

(a) limiting facilities for transporting, producing, manufacturing, supplying, storing or dealing, or

(b) preventing, limiting or lessening manufacture or production, or

(c) fixing a common price or a resale price, or a common rental, or a common cost of storage or transportation, or

(d) enhancing the price, rental or cost of article, rental, storage or transportation, or

(e) preventing or lessening competition in, or substantially controlling within any particular area or district or generally, production, manufacture, purchase, barter, sale, storage, transportation, insurance or supply, or

(f) otherwise restraining or injuring trade or commerce, or a merger, trust or monopoly; which combination, merger, trust, or monopoly has operated or is likely to operate to the detriment or against the interest of the public, whether consumers, producers or others.

I suggest, from experience, for the consideration of the government-I am not moving any amendment whatsoever-that in view of the efforts which must be made to mobilize industry in this country, it will be impossible to mobilize industry for the efficient production of commodities which are needed for the efficient prosecution of the war, if the producers are held strictly to the terms of this penal statute. I therefore suggest that the government should deal with it by orders under the War Measures Act,

which will have the same force and effect during the term of the war, the same validity, as if they were enacted by parliament, and which may be modified or amended by the government from time to time as the exigencies of war require, in order that there may be an effective mobilization of industry, and, with regard to certain branches of production, that there may really be a combine, if necessary, by those engaged in that branch of industry in order to produce more effectively, and, I think, more cheaply and satisfactorily. I protest against dealing now with this matter by legislation when the governor in council has full power now to deal with it from time to time under the War Measures Act, as the exigencies of the situation may reveal the need for changes in order that the commodities required for the prosecution of the war may be produced

12S

Combines Investigation Act

satisfactorily and effectively. I make that suggestion earnestly for the consideration of the government, because it seems to me this bill proposes to amend the fundamental provisions of an act, which in times of ordinary commercial transactions are sound and just, but which may require to be modified temporarily during the prosecution of the war, but the permanent modifications of which would require grave consideration and prolonged discussion.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Hon. H. H. STEVENS (Kootenay East):

I hesitate to introduce a note of discord into this session, but I confess that when I read this bill I was amazed that a bill of its nature should have been introduced in a session assembled under present conditions, and one which we had hoped might be marked by a degree of unanimity and concord not usually found in sessions of parliament.

In the absence of some special explanation I fail to see any need for amendment of the Combines Investigation Act or anything that could not have been- dealt with better, as the hon. member for St. Lawrence-St. George (Mr. Cahan) has so ably pointed out, under the War Measures Act. I have been debating in my mind whether I should say anything or should express myself at some length. But I have studied for a number of years the matters dealt with by the Combines Investigation Act. When the last amendments were made, I think in 1937, I declared that in 1923 when considerable time was devoted to the subject I took exception to the whole structure of the act. I think it is wrongly based; I have taken that position throughout the years.

I would point out that during the past fifteen or twenty or twenty-five years there has been a gradual change in our industrial and economic structure. When the idea of controlling trusts and mergers was originally conceived on this continent by the late Theodore Roosevelt in the United States in the early days of this century, conditions were entirely different from what they are to-day. The object of the Sherman Act, upon which this legislation is really patterned, was to deal with a group of individuals who might get together and conspire to bring about a condition inimical to the public interest. The idea of a trust at that time was not an institution that might be laudable in its objects, but rather a sinister institution the purposes of which were against the public interest. Legislation designed to deal with a condition of that kind is not applicable to-day because of the complete change that has come about in our economic structure. In the last few decades there has been a growing tendency to merge smaller businesses into larger ones;

we have great corporations, known as quasi monopolies, that have grown up in the economic realm. These are legitimate. I am not saying they are good or bad in themselves; that is not the point. The point really is that they do not come under this legislation; yet in some instances they may have upon the industrial and social life of the country an effect quite as injurious as a conspiracy of individuals might have. On the other side it may be said that many of these corporations or quasi monopolies are desirable because of their regulatory nature.

In this legislation we have been building up round an individual, the commissioner, as he is now called, a body of what the lawyers call case law. That is, he is clothed with powers-I am speaking of him not as an individual, but as an institution-that no individual should exercise. In this bill we are going still farther, I am sorry to see. I think the existing legislation goes farther than it should. Rather I will put it in this way: The existing legislation is not properly

adapted to the present economic structure.

But this particular bill bestows on the commissioner more and more arbitrary powers which in my opinion are not in any sense connected with war conditions. Let me illustrate. It has not hitherto been possible for the commissioner to retain beyond a reasonable time, while he is carrying on his preliminary investigation, which is generally speaking a secret one, control of all the books and records of the company or companies under investigation. But under this bill the commissioner would be empowered to order the production of books of account, documents, minute books and all the records of a company and to retain those books and documents for a period of four months. The object of the original legislation, and, indeed, of the legislation amended, was that the commissioner should make a preliminary investigation to ascertain whether or not the complainants had a real case. It was designed to protect rather than to persecute, to protect those charged from being exposed to public calumny without just cause.

Under this bill the government are now asking parliament to give the commissioner the right to hold those records. Of course I know the answer will be that it has been found that when they come to prosecute, after the commissioner has made his report, records may have disappeared. But under the statute as it now stands, the commissioner may take any portion of the records, have them copied and attest the copies as being true copies, and such copies are accepted in courts of law as of equal validity

Combines Investigation Act

to the original documents. There is no difficulty there, but I am- pointing out to the minister that in this respect the government are going too far.

Before I sit down I must refer to the two sections that are being repealed. The repeal of section 28, passed in 1935, is a serious matter. It provides:

No person shall be charged with, tried for or convicted of an offence under this act, by the same information, upon the same evidence or at the same time as he is charged with, tried for or convicted of an offence against section four hundred and ninety-eight of the criminal code.

I am not prepared, nor do I wish, to enter upon a lengthy argument, but I recall very well that this matter was thoroughly discussed and examined when this section was passed, and 1 believe it ought to be thoroughly discussed before this change is made. It is proposed to repeal this section without, I submit, proper time and consideration being given to it; yet it deals with charges under the criminal code. At the moment I am not prepared to go back over the old argument in an extensive way, but we ought to remember one thing. There are offences which may be considered such in a civil sense; we will say bad practice in business, and so on, but in themselves they are not criminal acts. There was some protection for the citizen in the section now to be repealed, so I say this is a serious matter. I am not debating the point; I am merely calling attention to the seriousness of it. The other section to be repealed also has considerable importance and should not be disturbed without careful consideration.

The point I wish to emphasize is that raised by the hon. member for St. Lawrence-St. George, which I think is well taken, that the proposals contained in this bill are not proposals which ought to have been obtruded upon this parliament during this session. They should come before parliament at an ordinary session, if at all, when we would have all the necessary time at our disposal to deal with them. We should have ample time to read and consider a bill of this kind, and it should stand until those who may be affected by it have an opportunity to present their views. It is serious legislation. On the other hand I point out, as the hon. member for St. Lawrence-St. George also indicated, that to the extent to which we wish to deal with peculiar circumstances arising under war conditions, that can be done much more effectively as war measures under the War Measures Act. The government may, as I expect it 87134-9

will, find it necessary, during the period of the war, to take certain positions which it would not consider it advisable to take in times of peace. I am quite sure the Prime Minister (Mr. Mackenzie King) will agree that this is likely to be the case. Therefore it is inadvisable to amend a bill for war purposes, if that is the object of this amendment. Let us deal with such matters under the War Measures Act, and let this bill stand for the present and come before parliament at an ordinary session when we shall have ample time and opportunity to debate it.

I want to conclude my remarks by saying that I feel very strongly on this matter. For years I have taken a definite position. Personally I am not prepared to-night to discuss the matter at length, nor do I wish to fight the measure. I can tell the minister and the Prime Minister, however, that if this were an ordinary session I would feel myself in duty bound to offer the most persistent opposition to this legislation. As I indicated this afternoon, however, we have come here in a spirit of accord. We desire to cooperate with the government, but we see no reason why this bill should obtrude itself at this time, and I earnestly suggest to the government that the bill be dropped until the next regular session.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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CON

Thomas Langton Church

Conservative (1867-1942)

Mr. T. L. CHURCH (Broadview):

Mr. Speaker, with all due respect to the Minister of Labour (Mr. Rogers) I would remind hon. members that this act has been on the statute books for many years. I have had some experience with it, and I can tell you that the procedure has killed the whole statute; it is too cumbersome. Take milk, bread, coal or any of the other necessities of life; that is where this war will react on the poor people of the country. In 1915, 1916 and 1917 we had a great deal of trouble with these combines in restraint of trade and enhanced prices in the city of Toronto. I preferred an indictment before the grand jury at the York assizes with regard to some of these very items I have named, but the law officer of the crown took the position that inasmuch as this act had taken combines in restraint of trade from under the criminal code, where they had been for many years, the presiding judge and the grand jury had no right to pass upon the indictment. We created a combines act and a whole lot of impossible procedure.

The fact that we are not making much headway in regard to the conflict of jurisdiction between federal and provincial powers, as set out in some of the decisions of the privy council, may be responsible for the fact that we are greatly handicapped in dealing with this problem. The right hon. Prime Minister (Mr. Mackenzie King) has taken a

Combines Investigation Act

^reat deal of interest in this question for many years. He was one of the pioneers in dealing with it, but I must say that I am very much dissatisfied with the whole procedure or with any regulation of it. It is too cumbersome. Four or five men go to see a lawyer and say, "Here, we have a scheme to advance prices." Take coal; there was a scarcity of coal in 1917, and in that year United States newspapers pictured Canada as a sort of Lazarus hanging round the coal yards of the New York Central, trying to buy or steal a few crumbs of coal. A year or two ago we had a coal investigation conducted by Doctor Tory, but in his report I cannot find one word about the consumer. The retail coal men have now acted splendidly. I was referring only to 1917.

The labour organizations of the country are continually complaining about these trusts and combines in restraint of trade, which react on the poor people and those on relief. They also affect the municipalities, who must not only pay rent for these people but provide food and coal in order to keep things going. Prices are increasing abnormally at the present time. Wheat has risen from 48 cents to over 80 cents; yet the people of this country had to peg the price not long ago, and every taxpayer in Canada might have had to contribute heavily as a result. So prices and profiteering should be checked.

As I say, the procedure is all wrong. I do not blame the commissioner, whom I have found to be efficient as far as he can go. The act itself, however, is absolutely inefficient, not practical, non-enforceable and useless. I have had a great deal of experience with the combines act over many years, and am disappointed at its lack of relief or any regulation. Under it we can go into a man's office, seize his books, keep them for months, and then maybe get nothing out of them. All we do is interfere with his business. If there is a combine, why do we not stop it? We used to try to stop combines under the criminal code, until it was decided that we should have a board. Dear knows, we have had nothing but boards and commissions for years in this country, and that is not the way to attack this problem. You will never get anywhere that way, and you will have all kinds of trouble in this country in this war emergency from combines in restraint of trade that now flourish like a green bay tree.

We must have a more modern and faster system. A year or two ago I received some letters respecting a combine. What would I have to do? Well, I would have to draw up a petition for the commissioner, and the com-

missioner would send someone to see the man in question. He goes round in a circle, and at the end of sixty days nothing is done. Combines are flourishing like a green bay tree. They snap their fingers at parliament. If the commissioner takes action, they go to a weekly court for an injunction.

This is one of the things I thought would have been cleaned up long ago by the so-called Rowell commission. However, by the time we get that report it will be ancient history, and will be consigned to the archives. Something should be done to help the people of Canada in this direction. Prices are so high they are ridiculous. Some articles cost two or three times what they used to cost. I do not know where it will end. That is what is causing communism, and many other isms in Canada-I am referring to an abnormal increase in rates which the poor people cannot meet.

No doubt the minister has looked into the matter. I would point out to him, however, that there was an investigation in British Columbia respecting fruit. Of what benefit was it to the industrial worker or the farmer of Canada? The same profiteering is going on now with respect to grain, and nobody is prosecuting it. They snap their fingers at the law courts, and there is no control over them. A commission may be appointed, and they do as they like.

Mr. KARL K. HOMUTH (Waterloo South): Surely the minister who introduced the bill will give us a reason more valid than has been given as to why he has introduced it. We are anxious to expedite the business of the house, but on this occasion, as an hon. member has said earlier this evening, we find a piece of legislation which, under the War Measures Act, is not necessary. Despite the arguments which have been urged, we have had no response from the minister, or any attempt, to give a reason. I suggest he might very well withdraw the bill, and let it come up at a regular session.

Hon. NORMAN McL. ROGERS (Minister of Labour): Mr. Speaker, I thought I had already exhausted my right to speak on second reading, and had intended to make a statement when the bill was moved in committee.

I followed carefully the arguments of the hon. member for St. Lawrence-St. George (Mr. Cahan) and other hon. members who have spoken. It is doubtless true-and we assumed it-that we could have proceeded with these amendments under the War Measures Act, by order in council. At the same time I had no desire to deceive the house as to my own belief that these amendments were required only in time of war.

European War-Orders in Council

The feeling of the combines commissioner is *-and I share it-that these amendments could be defended and would be desirable even in time of peace.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

That is a large question.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

I admit that, and I have no intention of deceiving the house on the point. I believe the amendments could be defended in time of peace. But there is additional need for them in time of war, and since the house is now in session and since these amendments were anticipated, I really felt that the government would be under some criticism if, knowing they were contemplated, we made no effort to take the house into our confidence, or to indicate exactly what we felt should be done to meet the situation.

On the other hand I quite agree there is nothing to be gained by proceeding with controversial legislation at this time, particularly when the main purpose can be realized, I assume, under the War Measures Act.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Very fully indeed.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

I would therefore say to the house at this time that I shall be glad if the bill is permitted to stand for second reading. Then, in the interval between now and tomorrow, I shall consult with my own officers to assure myself of the fact that the immediate purpose which we have in view can be met under the War Measures Act. If that is so, and since some hon. members have indicated that it would be unwise to introduce controversial legislation at this time, then I may say we shall be prepared to proceed under the War Measures Act., But I should like to leave that matter in abeyance for the time being, until I consult with my officers.

On motion of Mr. Rogers the debate was adjourned.

Topic:   COMBINES INVESTIGATION ACT
Subtopic:   STRENGTHENING OF PROCEDURE FOR INVESTIGATION AND PROSECUTION
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ADJOURNMENT-BUSINESS OF THE HOUSE


Mr. MACKENZIE KING moved the adjournment of the house. He said: I indicated in my remarks at the opening of the sitting that after the bill respecting the Combines Investigation Act and the bill respecting the patriotic fund had been discussed, the Minister of National Revenue (Mr. Usley) acting for the Minister of Finance, would bring down his budget. I notice the minister is not in the house at the moment. I believe in any event it would be advisable to wait until to-morrow to have him make his presentation. 87134-OJ


CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Is there anything coming up tomorrow, besides that which the Prime Minister has mentioned?

Topic:   ADJOURNMENT-BUSINESS OF THE HOUSE
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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:

As I said this afternoon, there is a bill to provide for the regulation of war charities, and a bill respecting a department of munitions and supplies. The resolution respecting the latter I shall have placed on the order paper to-night, so that it will be before hon. members in the morning. Perhaps the house would permit us to proceed from the resolution immediately to the bill itself, and through its different stages.

In speaking of the bill respecting the department of munitions and supplies, I mentioned that there would be a bill related to it to amend the Salaries Act. I did not imagine that anyone would think that particular bill related other than to the salary of the minister, for which provision would have to be made. However this is the capital city, and it is already abroad that there is a possibility of its affecting the salaries of all civil servants. I wish to make it clear that that particular bill relates only to the salary of the minister who may be appointed.

Motion agreed to and the house adjourned at 10.30 p.m.

Tuesday, September 12, 1939

Topic:   ADJOURNMENT-BUSINESS OF THE HOUSE
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September 11, 1939