November 14, 1941

LIB

Norman Alexander McLarty (Minister of Labour)

Liberal

Mr. McLARTY:

This is the first time that the matter has been brought to my attention. When the hon. member speaks of a policy, I believe his question is more or less confined to the Prairie Farm Rehabilitation Act. If I remember correctly, I do not think the Department of Labour has any specific policy with reference to that. The only general policy, so far as wages are concerned, which we have that would be applicable is the minimum wage law, which applies to all dominion projects.

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CCF
LIB

Norman Alexander McLarty (Minister of Labour)

Liberal

Mr. McLARTY:

For men we increased the rate from thirty to thirty-five cents and for women the rate was increased from twenty to twenty-five cents.

The War-Labour

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CCF

Percy Ellis Wright

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

Mr. WRIGHT:

Will this minimum wage law apply to a company supplying goods to the government? Take a lumber company selling 25 per cent of their output to the dominion. Would the minimum wage law apply to that?

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LIB

Norman Alexander McLarty (Minister of Labour)

Liberal

Mr. McLARTY:

Yes; if they were selling that amount, the minimum wage law would apply.

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CCF

Percy Ellis Wright

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

Mr. WRIGHT:

The minister has made

certain statements which I think are creditable. He said that it is fair to say that the Department of Labour has in every way sought, first, to protect every worker by establishing fair wage standards and to prevent industrial strikes, and second, to protect the lower paid workers against the attempts of unscrupulous employers to deny them the minimum compensation to which they are entitled. We have in operation in northeastern Saskatchewan a lumber company which I believe is the largest company of the kind in the province, the B. F. Harris company. They not only operate their own limits but buy a considerable amount from other dperators in the district. They have a minimum wage rate of 224 cents an hour plus the cost of living bonus. They work their employees on double shift, twelve hours in each shift. Seventy per cent of their employees are receiving less than thirty cents an hour and 70 per cent of the employees are working a twelve-hour shift. This company are not only selling their own products, but buying from the smaller operators in the district on the basis of the present fixed prices for lumber in this country. At the same time, according to the information I have, they are exporting approximately 50 per cent of their products and receiving for that, according to the Minister of Munitions and Supply yesterday, 20 to 40 per cent more than the domestic price. If my information is correct, they are also selling to the government 20 to 25 per cent of their output. What action does the minister propose to take in such a case?

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LIB

Norman Alexander McLarty (Minister of Labour)

Liberal

Mr. McLARTY:

I know that the hon. member will no* expect me to pass judgment on the particular circumstances of an individual case such as that. All I can say is that I shall be glad to have the matter investigated and checked up in order to see what can be done to bring it into line, assuming, as he suggests, that it is out of line.

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NAT
LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I shall be glad to meet the hon. member's request to see whether the matter is one which can be dealt with by the United States authorities in conjunction with our own. It is an individual case that requires looking into, and I should hope that it would be dealt with sympathetically.

While I am on my feet, may I say that immediately after eight o'clock the Minister of Finance will make his statement on the question of the cost of living bonus in relation to dependents' allowances, veterans' allowances and allied matters. I think we might have it understood that after the minister's statement has been made the time will have arrived when hon. members may regard themselves as free to talk in committee on anything.

At six o'clock the committee took recess.

After Recess

The committee resumed at eight o'clock.

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STATEMENT OF MINISTER OF FINANCE IN RESPECT OF VARIOUS WAR ALLOWANCES

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Hon. J. L. ILSLEY (Minister of Finance):

Mr. Chairman, during the late summer and early fall months the government has received numerous representations from individuals

War Allowances-Mr. Ilsley

and organizations in various parts of the country suggesting that in view of the rising cost of living steps should be taken to provide cost of living bonuses for persons receiving pensions or allowances of various kinds, representing in some cases payments for services being rendered or something in the nature of awards for services rendered in the past, or, in other cases, awards or payments made on the basis of need. In most cases I believe that these representations were made not so much because of existing conditions but rather in anticipation of a continuing rise in prices and the cost of living. I am glad to say that since the policy of establishing a general ceiling over the prices of commodities, rents and services, and of stabilizing wages, was announced, there has been a noticeable falling off in the number of these representations. This is another of the strong arguments for the price and wage stabilization policy adopted by the government, because I think it was primarily the fear that the cost of living would be allowed to go spiralling upward that caused so much anxiety, so much sense of insecurity and of impending hardship on the part of recipients of small fixed incomes. However, I want to assure the committee that all these representations have been the subject of very careful study over a period of several months; and it is the results of these studies and our conclusions therefrom that I wish to announce to-night.

First I will take up dependents' allowances. In the field of allowances paid to soldiers' dependents, the government believes a real case has been made for some remedial action.

When the present scale of allowances was adopted at the outbreak of war, the allowances were deliberately made high in order to take account of the fact that during the course of the war there would undoubtedly be a rise in prices and in the cost of living. Experience, however, has shown that while they are adequate for most dependents, there are certain cases where undue hardship results, particularly in the case of families which have more than two children.

The government therefore proposes, in the case of personnel below the rank of warrant officer class 1, to provide an additional allowance of $9 for the third child, and an additional allowance of $6 for the fourth child. This would mean that the total allowance for a wife with three children would be increased to $68, which with $20 assigned pay, makes a total of $88 per month; and the total allowance for a wife with four or more children would be increased to $74, which with $20 assigned pay, would make a total of $94 per month.

We do not propose to make any additional allowance in respect to children beyond the

fourth child, because we believe that definite steps should be taken to discourage the recruiting of men with large families.

What I have said applies to dependents of men in the army and air force, whose allowances are paid by the dependents' allowance board. The allowances to dependents of men in the naval services are paid directly by the Department of National Defence for Naval Services and on a different scale and principle. The question of making adjustments applicable to the naval services will be gone into promptly, and such changes as may be found to be appropriate will be made.

We have also thought it desirable to provide that in certain cases, and in accordance with methods which I will later explain, dependent mothers should receive an increase in the allowance paid them up to 25 per cent of the present allowance. It will be recalled that while the allowance paid to a wife is $35, that to a mother is now only $20, and it appears to be true, in some cases at least, that this differential is too great. Provision will also be made under certain conditions to prevent the mother from being penalized if she is willing to work and make some modest earnings.

It is estimated that these changes will provide benefits for approximately one-third of the present recipients, at an estimated cost of from $8,000,000 to $9,000,000 per annum.

It is very difficult at the present time to make detailed comparisons of the total pay and allowances under these new scales with the rates in effect in Britain and Australia, because complicated changes have recently been made in the systems in both those countries, and I have not sufficient information to make a proper comparison. However, at least until recently the rates of pay plus allowances in south Africa were the highest of any of the English-speaking countries, and the following table shows how the Canadian rates of pay and allowances with the present changes compare with the south African rates:

South Canada Africa

Private and mother

$ 64 $46.20Private and wife

74 52.80Private, wife and 1 child... 86 59.40Private, wife and 2 children.. 98 66.00Private, wife and 3 children.. 107 72.60Private, wife and 4 children.. 113 85.80

A private in the United States army receives pay of $40 a month after one year's service, which compares with $39 a month pay in the Canadian Army, but the United States as yet makes no provision for the soldier's dependents. In the last war, a private in the Canadian Army received pay of $1.10 a day, or $33 a month; his wife received a separation allowance at the rate of $30 per month at the end of that war, and I may add that this was

War Allowances-Mr. Ilsley

at a time when the cost of living price level was very much higher than it is to-day. There were no allowances for children, but the Patriotic fund provided assistance on the basis of family needs.

Even with these changes there will be special cases of difficulty which will require special treatment. The government is determined to afford the most adequate protection to all soldiers' dependents, and, after going most fully into the matter, they have found that the problem is not just a matter of financial assistance, which is susceptible of treatment by any uniform rule. There are special cases involving special or emergency consideration and special forms of assistance, as, for instance, when the family has had the misfortune of serious illness with heavy medical expenses, or when there are older children deserving special training or education, or when the family is large, or the difficult case of the change in status of a dependent mother when the son marries. Such special conditions create special needs which cannot be covered by any reasonable change in the standard rates ' and require assistance which will vary with the size of the family, conditions in the particular locality, and other special circumstances. The government therefore has tried to find some way to bring into play all the administrative resources available in the country so that the dependents of our men overseas should be given protection and service suited to the circumstances of the particular case.

We have therefore concluded that we should make provision for what might be called a war allowances adjustment fund, the moneys to be provided by a grant from the treasury under the War Appropriation Act, and that this fund should be administered by a national board of trustees appointed by the government, which would be given powers adequate to deal with special situations with a considerable measure of flexibility. This board of trustees would consist of

(a) A representative of the dependents' allowance board;

(b) A representative of the veterans' welfare division of the Department of Pensions and National Health;

(c) A representative of the Canadian Legion;

(d) A representative of the Canadian Welfare Council;

(e) A representative of women's institutes, or other person familiar with the problems as they present themselves in rural areas;

(f) A representative of labour;

(g) A representative of the comptroller of the treasury or the auditor general; and

(h) An independent chairman who has had experience in dealing with similar problems.

The national board would have under it a number of local or regional committees which would in so far as their composition is concerned be essentially replicas of the national board. There would, however, be certain differences; for instance, on the local or regional boards, instead of a representative of the dependents' allowance board, there would be local representatives of the Department of Pensions and National Health, or of the soldier settlement board, (varying with the particular community). Also, instead of the Canadian welfare council, there would be a representative of the most appropriate local social agency, or in large communities of mixed population representatives of several local social agencies.

These local or regional set-ups should be worked out by the national board of trustees in cooperation with local authorities, and the national board should appoint the chairman of the local or regional committee.

There would have to be a considerable number of these local committees, at least sixty or seventy, and perhaps as many as one hundred and fifty, if it were desired to expedite the work as rapidly as possible, In the division of the country into local regional districts, it would be intended to take the fullest possible advantage of existing divisions for the purpose of social service administration.

The local or regional committee would deal with applications and make recommendations to the national board of trustees on the basis of principles laid down by the national board. While limited powers would probably have to be given to the local committees to make emergency payments in certain cases, the general procedure would be that application and recommendation would be sent in by the local or regional committee to the national board, which would make the decision and issue supplementary allowance by means of a cheque direct to the particular recipient. In other words, the local or regional committee would not be administrative in character; they would advise in regard to scales of assistance in the particular community, make investigations and verify the special circumstances involved and provide direot personal assistance or advise. They would, of course, use so far as possible the services of experienced social service workers already working in the locality, and perhaps as well, in certain cases at least, the skilled staff of a provincial government. The government hopes that by making use of the special knowledge and skill of such qualified persons, it will be able to get the plan into full operation with the minimum of delay, and also with the maximum of efficiency and equity.

War Allowances-Mr. Ilsley

It will be noted that no large administrative organization would be set up, but rather arrangements made for a pooling of existing administrative resources, and the only cost should be the payment of perhaps a per capita fee to the local social agency for investigations and recommendations. ,

In addition to other special cases, the new organization should deal with cases where supplementary allowance not in excess of 25 per cent of the present allowance would be made to mothers of soldiers, and also with cases where it would be desirable to allow children, by continuance of allowances, to attend high school until they have reached the end of their eighteenth year, if such children have good prospects of matriculating.

The major arguments for the scheme just outlined may be summarized as follows:

([DOT]a) It is far more equitable than any alternative arrangement, providing for the meeting of need or protection against hardship, no matter what the need or the hardship may be, and eliminating a needless waste of taxpayers' funds such as would be involved in any uniform regulation which sought to meet the difficulties of certain special cases by a uniform increase in the standard scale of allowances.

(b) It is wholly flexible, allowing need to be met in accordance with the merits of the particular case and the conditions of the particular region. It will allow the greatest measure of assistance possible to those who need it most. Emergency and unusual requirements can be met as well as common and recurrent ones.

(c) It provides for meeting the special needs of special cases by bringing into play the judgments of a considerable number of people who know the local and individual situation.

(d) It avoids the necessity of building up a large new administrative organization which would involve a lot of unnecessary administrative cost. It will make possible the use of the existing social service machinery of the nation in reporting upon and examining individual cases and, where desirable, in providing more than mere financial assistance.

*(e) It is hoped that this far-reaching and flexible system of supplementary allowances will not only ensure that all dependents are safeguarded against economic dangers, but also that it will give the men overseas the confidence and assurance that all the administrative resources of the community are standing by the home in their absence, and that even in the case of unforeseen emergency at home, their families will be looked after and will not suffer hardship.

In summary we believe that the changes we are suggesting will provide a measure of very

real social security, democratic and fair in its underlying principles, and efficient and adequate in its administration. Naturally in view of its character, I cannot give any estimate in advance of the funds that will be required to finance it, other than the estimate I have already made of the probable cost of the changes made in regard to the third and fourth child and the mother.

I come now to war veterans' allowances: The War Veterans' Allowance Act was enacted in 1930 to assist in the maintenance of the aged or totally incapacitated veteran in necessity and incapable of maintaining himself. Allowances under the act were made payable to veterans upon attaining the age of sixty years and1 to those of any age who were permanently unemployable.

These allowances are limited in the case of a veteran with dependents to $480 per annum, and income from all sources, including veterans' allowance, must not exceed $730 per annum. In the case of a veteran without dependents the maximum allowance is $240, and income from all sources, including veterans' allowance, must not exceed $365. The act provides that no deductions shall be made in the allowance because of receipt by the veteran of helplessness allowance, clothing allowance, additional pension allowance payable on account of children, grants received by the veteran by reason of having been awarded the V.C., M.C., or D.C.M., and casual earnings not exceeding $125 per annum. In all eases the amount actually paid is based on an investigation of the need of the recipient and there are many cases where the maximum allowance is not paid.

A great many recipients of the war veterans' allowance are also in receipt of pensions under the Pension Act. Quite a number have other sources of income such as mothers' allowances under provincial legislation, rentals from property owned but not occupied, insurance disability benefits, casual earnings, et cetera. There are, however, quite a number who have none of these special types of income and who by reason of age or infirmity are unable to supplement their veterans' allowance by casual earnings. Within this latter group there appear to be certain cases involving actual hardship, and it seems desirable to make provision for additional allowances in special cases after investigation has established actual need. In this connection it is proposed that the additional allowances be limited to a maximum of $5 per month for single men and $10 per month for married men. These additional allowances would only be given after investigation to veterans who are now in receipt of

War Allowances-Mr. Ilsley

the maximum allowances permitted under the act and who have no other earnings or income of any kind.

It may be observed that when the War Veterans' Allowance Act was passed in 1930, the cost of living index stood at 120-8 per cent. In other words, in spite of the increase in cost of living which has taken place since the outbreak of war, the latest index available is still more than five points below the point at which the index stood when the legislation was enacted and the amount of the allowances originally determined,

I come now to pensions under the Pension Act. These pensions are part of the compensation which is paid to a member of the armed forces or his dependents because of his disablement or death. The basic rates of pensions now paid are governed by schedules to the statute enacted in 1925 and are based upon the -rates of pension and bonuses established in 1920 when the cost of living index stood at 150-5. The parliamentary committee which reviewed the problem in 1920 had been of the opinion that in view of the possibility of declining prices in future years increases in pension should in the main be effected by way of a bonus to be continued until such time as the cost of living warranted its modification. As the bonus was included in the basic rate of pension in the schedule to the act of 1925, it has remained in effect notwithstanding subsequent reductions in the cost of living.

In addition to the cash pensions paid on this basis, disability pensioners are free to accept employment, and their earnings do not in any way affect their pension entitlement. Such pensioners of the first great war also benefit by conditions which offer a wider scope of employment for those who are able to work, by reason of a primary preference under the Civil Service Act and preference in all government contracts and war work. In addition, they are given free hospitalization with pay and allowances for disabilities related to service. If over sixty years of age or permanently unemployable or if, despite the preferences granted, they are incapable of maintenance, such pensioners are eligible for assistance under the War Veterans' Allowance Act.

In view of all these circumstances and particularly because the cost of living index is only 115-5 as compared with 150-5 when the basic rates of pension were established, the government believes that no additions to these pensions could be justified at the present time.

I come now to old age pensions and pensions for the blind. Representations have been received by this government asking that a cost of living bonus be added to old age pensions, thereby raising the maximum amount of such pensions above the figure of $20 a month provided in the act. The question is one of extraordinary difficulty for reasons which I am about to mention.

I might remind the committee that these pensions are paid by the provinces, under agreements made by the governor in council with the lieutenant-governors in council of the provinces, in accordance with the Old Age Pensions Act of 1927. The act provides that every agreement shall continue in force as long as the original statute remains in operation or until after the expiration of ten years from the date upon which notice of an intention to terminate the agreement is given by the governor in council to the lieutenant-governor of the province with which the agreement was made.

The dominion's contribution of 75 per cent of the total pension paid is contingent upon the amount of the province's contribution, which is 25 per cent of the total, and therefore varies from province to province. The average monthly pension paid in each province as of June 30, 1941, was as follows:

British Columbia $19.12

Alberta 18.56

Saskatchewan 16.97

Manitoba 18.72

Ontario 18.55

Quebec 15.72

New Brunswick 14.71

Nova Scotia 14.97

Prince Edward Island 11.26

It will be noted that in several provinces there is considerable leeway for increasing the average amount of pension paid if the province so desires. As advantage is not taken by certain provinces of the leeway which already exists, it is apparent that any provision for an increase in the minimum amount of pension payable would be used very much more by some provinces than by others, which would mean that the additional funds would be distributed very unequally between provinces.

Under the present scheme any increase in the amount of the maximum pension payable would require not only an amendment to the dominion act but new agreements with all the provinces. Several provinces would almost certainly be neither willing nor able to pay their proportionate share of a larger pension. If on the assumption that all provinces would not agree to increase the pension on the present cooperative basis the dominion undertook to pay the whole cost of a supplementary pension, we would be following the

War Allowances-Mr. Ilsley

unsound and dangerous principle of one government bearing the total cost of a service for the administration of which another government was solely responsible. This unsound principle would be coupled with the further objection, already mentioned, that the benefit of the dominion payment would in the main accrue to only a few provinces which are already paying a higher average rate of pension than other provinces which, except in a limited number of cases, would not benefit from the scheme although obviously the taxpayers of the latter provinces would have to bear some share of the higher payments made to pensioners in the former group of provinces.

There is the further fact that the cost of living index to-day, 115-5, is five or six points lower than the level at which the cost of living index stood at the time the Old Age Pensions Act was passed and during the early years of its operation. Thus in 1927 when the legislation was passed, the cost of living index stood at 119-9. In 1928 the index had risen to 120-5; in 1929 it was 121-7; and in 1930, 120-8. It would therefore seem very difficult for the dominion government, in the present war emergency when it is taking nearly 40 per cent of the national income for war purposes, to justify the addition of a general cost of living bonus to a rate of pension which was determined and established at the time when the country was enjoying a peace-time boom and when the cost of living index was five or six points higher than it is to-day.

In this connection it must be remembered that there is a real distinction between the granting of a cost of living bonus, on the one hand, to workers employed by private industries or by governments, and, on the other hand, to persons who are being given an award at the public expense because they may not be in a financial position to provide for themselves. In the former case it must be remembered that wage-earners are forgoing increases in their basic rates of pay and the cost of living bonus is really an arrangement to effect a stabilization of wages in order to make possible the maintenance of a price ceiling and safeguard against an inflationary spiral which would have, it is believed, a disastrous effect on the economy as a whole and would create real hardships for wage-earners as a class and, particularly wage-earners in the lower income groups, and pensioners and others in receipt of small fixed incomes.

No decreases in the amount of the old age pensions were made in 1931 or following years when the cost of living declined to levels far below what it was when the act was passed. It was taken for granted then that the pension

was independent of changes in the cost of living. Because of this, and the fact that the cost of living has not yet even reached the level at which 'it was when the amount was determined by parliament, a cost of living bonus to supplement it would be wholly inappropriate. It would only be a disguise for a permanent increase such as took place under similar circumstances in respect of war disability pensions in 1920.

The question then arises as to whether there should be a permanent general increase in old age pensions in all the provinces at this time, and if so whether the dominion or the provinces should bear it.

The government believes that this problem of making adequate provision for the aged can never be satisfactorily solved until we are in a position to set up a contributory old age pension scheme which would make it possible to commence the payment of pensions at a lower age than seventy years and probably to make the pension payments more generous. However, for reasons which are wholly familiar to the house, such a dominion contributory old age pension programme would be impossible without a constitutional amendment.

The dominion must, I am convinced, take the position that old age pensions of the noncontributory type now in effect are primarily a provincial responsibility, the role of the dominion being that of a contributor financially assisting the provinces to discharge this responsibility. This has been the rule consistently applied since 1927 by all governments. There are excellent reasons for the rule. Apart altogether from the constitutional reason there are the differences in living conditions, cost of living, living standards and social outlook in different provinces. A scale appropriate to one province is not appropriate to others. The figures I have given of average pensions show the differing views which the provinces have as to amounts which should be paid.

The dominion, overburdened as it is with its own responsibilities and obligations, nevertheless does not shrink from assuming further responsibilities in its own fields. As examples I cite the increase in dependents' allowances and war veterans' allowances which I have just announced. But in a provincial field the dominion should not operate in such a way as to throw further burdens exclusively upon dominion taxpayers. Furthermore we should be exceedingly careful not to act in such a way as to place virtual compulsion upon provincial governments and thereby on provincial taxpayers.

On the other hand, our laws should be such that if any province, due to public sentiment or local conditions existing in that province,

Privilege-Mr. Mackenzie King

wishes to supplement the old age pensions paid in that province under our act, there should be no automatic reduction in the pension jointly payable by the dominion and the province on the 75 per cent-25 per cent basis. If any of the provinces desire to do so, the government is prepared to amend the regulations and, if necessary, the act, to ensure that such supplementary payments by a province do not entail a reduction in the pension payable under the act.

Indeed the government is prepared to consider going further than this. It believes that, for the reasons already outlined, it would be impossible to justify an increase in the maximum rate of pension payable if the whole cost were to be assumed by the dominion, and that such cases as appear to present immediate difficulties can be met by the provinces on the basis of established individual need. If, nevertheless, all, or substantially all the provinces should make representations to the dominion government in favour of some increase in the maximum amount of pension payable, the additional cost to be shared between the dominion and the provinces on the same basis as the present cost, I can assure the committee that the government will be prepared to give consideration to such representations.

There is one other matter connected with the administration of old age pensions which may be of some interest to the committee.

Under the act, the pension is not permitted to bring the total income of the pensioner above $365 a year.

By section 17 of the regulations, income includes contributions by children. This expression has been interpreted as including assigned pay. Representations have been made that in many cases assigned pay is not a true contribution within the meaning of the regulation, as it is sent to the parent to be kept for the member of the forces assigning the pay, or for some other purpose not connected with the support of the parent. Distinctions between cases where this is true and where it is not true are impossible to draw as a matter of practical administration, and I am given to understand that all the provinces would be likely to accept an amendment to the regulations providing that pay assigned by a member of the forces to his mother or father in receipt of old age pension should not be regarded as income for the purposes of this act, providing the parent is not in receipt of a dependent's allowance as well.

I am therefore proposing that the regulation in question be amended by adding the provision that in all cases where no dependents'

allowance in respect of the parent or the parent's spouse has been awarded, any pay allotted or assigned, as the case may be, by a son or daughter, grandson or granddaughter who is a member of the naval, military or air forces of Canada, serving on active service, may be disregarded in calculating the income of the pensioner. This will have the effect in many cases of increasing the amount of pension payable to old age pensioners in receipt of assigned pay.

Topic:   STATEMENT OF MINISTER OF FINANCE IN RESPECT OF VARIOUS WAR ALLOWANCES
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PRIVILEGE-PRESS REPORT OF STATEMENT OF MR. POULIOT ON NOVEMBER 11

LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

I take advantage of this my earliest opportunity to rise to a question of privilege. It is I think the proper moment to bring the matter referred to to the attention of the house. I saw for the first time a few moments ago in the Ottawa Evening Journal of to-day an article headed "Pouliot provides sensation-says Mr. King saved troops at Dunkirk." The article is credited to the Canadian Press and is as follows:

Considerable discussion has developed among members of the House of Commons over a statement made by Jean-Frangois Pouliot (Lib., Temiscouata) in his speech to the house last Tuesday.

Mr. Pouliot said he felt it his duty to answer "some charges, some insinuations" made about Prime Minister Mackenzie King. He did not identify the charges and insinuations specifically.

Then the article goes on to quote the hon. member for Temiscouata as follows:

"There is something . . . that has not been said either over the radio or elsewhere about the recommendation made by my chief (Mr. King) to the commander of the Canadian army in England (Lieutenant-General A. G. L. McNaughton)". He said.

Then there is a subhead "Takes up hecklers," and the next paragraph is a quotation purporting to be what the hon. member for Temiscouata went on to say. I think the hon. member is reported correctly, as follows:

"It was this, that he should do his best to spare the lives of his soldiers; and the young fools that made some noise when the Prime Minister visited them ignored the fact that if they were still alive, if they had not been killed in the Dunkirk retreat, it was because of the very wise and patriotic recommendation of my leader, the chief of the Liberal party, the Prime Minister of Canada. It is time to say that."

I may say first of all, Mr. Chairman, that when the hon. member for Temiscouata was speaking the other evening I was in conversation with my immediate neighbour, the Liberal whip, and I did not catch this remark myself, but my colleague mentioned to me:

Privilege-Mr. Mackenzie King

"The member for Temiscouata is talking about you." I immediately turned to listen. I had missed what he was saying about myself and at the time I turned toward him he was beginning to speak of the new leader of the Conservative party. I thought it was time for me to get up and say that I felt we had better get on with the business before us, that I understood the hon. member for Temiscouata was trying in some way chivalrously to defend me on some matter. I had not been paying attention to what he was saying, otherwise I should immediately have taken care to correct my hon. friend in the statement he made.

May I say that at no time have I made any recommendation whatever to General McNaughton on any matter. I think, however, I understand what was in the mind of the hon. member for Temiscouata when he spoke. I have at different times mentioned to members of my own party and to others the many reasons I have for having profound faith in the judgment, wisdom and caution of General McNaughton as the commander of the Canadian forces overseas, and I have instanced, and am pleased to instance here in the House of Commons to-night, what he said to me in the last conversation we had together before he left to go overseas. He came to call on me at my office, and I took advantage of the opportunity to repeat what I had said before and to give the thanks of the Canadian government to him for undertaking that great responsibility and to express our deep appreciation, and gave him the assurance of my entire confidence in him and of his being able to count on my support on all occasions. The general's last words to me were that I could depend upon it that he would take care to see that lives were not needlessly sacrificed. I remember those words very distinctly, that he as commander of the Canadian forces would take great care to see that lives were not needlessly sacrificed.

As to Dunkirk, it is now a matter of public record that General McNaughton before he undertook to take his men across to Dunkirk made a survey of the situation himself and made his own report upon it which was, I believe, to the effect that he did not think Canadian troops should be asked to participate in that venture at the time at which he was being asked to consider the matter, that to take that step at the time would be to incur the sacrifice of life to no purpose. I have mentioned that repeatedly to others, and that, I assume, is what the hon. member for Temiscouata had in mind. I was giving it as an illustration, just as I give it now, of why I and the citizens of Canada generally, particularly those who are in the forces and the

parents and relatives of those in the forces, have every reason to have confidence in the present commander in chief of the Canadian forces overseas and be prepared to trust his judgment, that he himself would be cautious in the matter of any directions that he might advise or give.

The hon. member for Temiscouata is quoted in that same article in the Evening Journal as having referred to another matter, an incident that took place at Aldershot, a demonstration by a section of the troops when I appeared on the field to address them. It was a small demonstration. I do not think I need to go into the reasons that occasioned it, but I wish that all present here might have been there to have heard for themselves the alleged demonstration and also the demonstration that followed after I had spoken to the troops. I think I can explain to hon. members the occasion of such preliminary demonstration as was made at that time, because it has come to me from many sources. It was this, and this article helps to illustrate it.

I found on reaching England; indeed, I had heard rumours of it before, that among our troops there was being spread a rumour that the reason why they were being kept in Britain and were not allowed to go to Africa or other parts was because of some direction that I had given or was responsible for with respect to the movement of the Canadian troops, that I had sought to confine the field of their activities with a view to

I suppose it might as well be expressed here-saving the sacrifice of the lives of some of our men. Mr. Churchill has answered that rumour I think quite effectively. He has taken care to express to the troops themselves and to the public generally that the reason why the *Canadian troops have remained in Britain and have not been sent outside has been that those in command feel that the greatest service that it is possible for the Canadian troops to render is that of guarding the citadel of freedom right at the heart of the empire, where the first great attack which would stab the empire's heart would likely occur. I think that some of the young men in our forces had the feeling that I had taken a position of the kind, and when I made a reference to their enforced inactivity they did make it quite clear that it was something which they did not appreciate. But when I also made it clear that as far as the government of Canada were concerned we were placing no restriction whatever upon the movement of the troops from Britain elsewhere, and had given authority to the commander in chief with due regard to ministerial responsibility to do as he might deem best

War Allowances-Mr. Stirling

with regard to movements based on Britain, and to take such immediate steps as he thought it advisable in certain circumstances to take, that impression, I believe, was effectively removed.

There is only one other thing that I should like to say. I was rather surprised that so much importance was given to a matter, which really could only be a misrepresentation of the facts in their true light, by a communication which went out through the Canadian Press from Aldershot on that day. I believe that, if hon. members will look in the 'British newspapers, they will find that there was not a single mention of any incident which was unpleasant in connection with my visit to the troops, and I believe that the representatives of the United Press and other press representatives who were there did not feel it necessary to send out any statement of the kind. But, for reasons best known to the representative of the Canadian Press, that particular report was circulated to all parts of the world, as a means, no doubt, of helping Canada's war effort.

INTERNATIONAL SITUATION SINCE JUNE 14, 1941- Canada's war effort

Topic:   PRIVILEGE-PRESS REPORT OF STATEMENT OF MR. POULIOT ON NOVEMBER 11
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NAT

Grote Stirling

National Government

Mr. STIRLING:

Mr. Chairman, I am glad that the government has paid considerable attention to the many representations which have been made to it on behalf of pensioners of various descriptions because of the increased cost of living. The minister is to be commended for making this statement-this rather elaborate statement-before the house

adjourns. It would hardly be possible to discuss it in any detail this evening. The first portion of it-that which deals with dependents' allowances-is quite easy to follow, but when one gets into the other categories they are not so easy to follow, and certainly I anticipate that the response of the government to the appeal of the old age pensioners will not be very warmly received. It will be of very little interest to the old age pensioner who began to receive such pension within the last few years that the index figure was at such a height and is lower to-day than when the pension legislation was started. The government, however, has given its consideration to what is obviously a particularly difficult matter, entering as it does into a constitutional realm; and it leaves one with the idea that possibly, had the events of January gone a different way, the government might not be faced to-day with so difficult a problem in that regard.

The third category entailed the setting up of a national board, not at any expense, because the individuals who will compose it will be

drawn from departmental bodies and boards which are already dealing with these matters. It will be supplemented by the work of regional boards. I anticipate that these regional boards must of necessity be located in one spot in each of the various districts over which they will hold sway, and I wonder what the minister contemplates with regard to getting information of the affairs of an applicant who desires assistance. Let me put it this way. A person who considers that he needs assistance along these lines, and who perhaps is resident two or three hundred miles away from the place where that regional board will carry out its work, must of necessity, I assume, make application by form or by letter. Then investigation on behalf of that regional board will be necessary before they can advise the national board. Would the minister give us some indication of how the regional board will go to work to get information in detail with regard to the applicant's case?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I cannot give it in any more detail than I did. I said that there would certainly be sixty or seventy, and perhaps as many as a hundred and fifty regional committees throughout the country, and they would consist of or be assisted by trained investigators in so far as those are available. They are available in a good many parts of the country. I do not remember just how the trustees of the Patriotic fund operated in the last war, but I am told that that was a very efficient organization and that it did just this kind of thing.

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NAT

Grote Stirling

National Government

Mr. STIRLING:

It will do some travelling, I take it.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Well, I do not know about that.

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NAT

Howard Charles Green

National Government

Mr. GREEN:

Have any of the provincial governments made representations to the dominion government that they would be willing to pay their share of a bonus to the old age pensioners? I understood the minister to say that if any province should make such representations, the dominion would give them favourable consideration.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

No, I did not say that. I said that in the event of an increase in old age pensions being considered desirable in any province, or in respect of particular cases of hardship in any province, the dominion did not feel that it should bear the cost of that itself, because it regarded that as primarily a provincial responsibility. Second, the dominion has no objection to the province bearing that cost. At the present time it may be that, if a province did increase old age pensions, in that particular province the pensions payable

War Allowances-Mr, Neill

under the dominion act would be decreased, because they might- be regarded as income and therefore the result might be some decrease in the pension payable. It is the view of the dominion government that that is not as it should be, and we are prepared to make an adjustment there, so that if a province wishes to bear in any case the full additional cost, it will be free to do so, without that entailing a reduction in the pensions payable under the dominion Old Age Pensions Act.

With regard to the third position, it is this: not, if one province says, "We would like to have the maximum in the old pensions act raised", but if all or substantially all the provinces make representations to the effect that they would like to have that maximum raised, the dominion government is prepared to given consideration to those representations. But I do not believe that, if one province alone, or merely one or two provinces, wanted to have the pensions raised, it would be the duty of the dominion government to get in touch with all the rest of the provinces to see whether they also wanted the increase, because there is a big conflict of opinion in the country. From the province in which the hon. gentleman resides a great many representations have come in favour of an increase in the old age pension, but from some provinces we have had no representations at all; in fact the reverse opinion is expressed a great deal.

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NAT

Howard Charles Green

National Government

Mr. GREEN:

In other words, if British

Columbia should increase the pensions or should be willing to pay a cost of living bonus added to the old age pensions, the dominion would not help out?

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November 14, 1941