April 30, 1942

SC

Charles Edward Johnston

Social Credit

Mr. JOHNSTON (Bow River):

It is still being conducted, is it?

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Hon. C. D. HOWE (Minister of Munitions and Supply):

In the course of this debate much has been said about the duty of the war expenditures committee to investigate the Department of Munitions and Supply. I think anyone who followed this debate would assume that up to this time someone had prevented this committee from investigating the Department of Munitions and Supply. Let me say that that department was the first department of government investigated by the committee. My officers were before the committee for, I think, some two weeks, were excused, and fully expected to be called back. We were visited by a man who said he was chairman of a subcommittee of the main committee to investigate the Department of Munitions and Supply. We gave him the information for

(Mr. Ralston.]

which he asked. I had a special officer delegated to see that the committee was served in any way that was required. It was the duty of this man to meet any members of the committee and to see that officers having special knowledge of the problems were placed at the disposal of the committee when required.

We have heard in the course of this debate many loose statements about the Department of Munitions and Supply, many from members of the committee. I suggest that the members of the committee are criticizing themselves when they make loose statements about the Department of Munitions and Supply. Here was a committee charged by parliament to investigate war expenditures, and now members of the committee rise in their places in this house and criticize the transactions of the department without ever having given the department a chance to lay the facts before them. I think it ill becomes any member of the committee, which has had all the facilities of the department placed at its disposal, to criticize the transactions of the department.

We have heard suggestions that there are men in plants who are not working as hard as they could work, and that there are plants which do not have all they could do. Surely it is the duty of the members of the committee to look into any case of that kind, obtain information on it and bring down a judicial finding, not just to make loose statements in this house. I believe two hon. gentlemen opposite visited my city and made a statement that they knew of thirty men who were out of work. I suppose thirty out of about 750,000 is a serious matter and worthy of comment. I am not objecting to statements of that kind, but I do say that when the information is readily available to members of the committee, such statements should not be made. It is very damaging to the war effort to have distrust built up about the Department of Munitions and Supply. I think the public in general have confidence that my department is carrying on its work honestly and with some efficiency. That being so, it is extremely important, when we are asking every man, woman and child in this country to buy war bonds, that that confidence should be preserved. If there is anything wrong with my department, there is no one more anxious to know about it than I am. We have special men constantly on the watch for irregularities or wrongdoing. We brought two or three men before the courts; they were brought before the courts, not by any outside investigators but by our own internal investigators. We shall be delighted if someone from the outside will give us a hand in finding any irregularities that may exist. I can assure hon. members

War Expenditures-Mr. Marshall

that if there has been any irregularity, the guilty party will be punished to the full extent that the courts provide punishment.

I do not know that I should go into the specific charges that have been made in rather a loose way, whether or not it is worth dealing with them. I do say, however, that during this debate I have heard nothing which I am not prepared to discuss fully with the committee at any time. The files in my department are open to the committee. By international agreement we have undertaken not to publish lists of contracts, or to make public certain information. Those rules are much stricter to-day than they were a few months ago; but as far as the committee is concerned, and as long as it meets in camera, we are prepared to lay any document in the department before it or to have any of our officers appear before it to discuss any situation the members might wish to discuss.

I felt that I should say this. I believe every member of, this house knows that what I have said is the situation, but just to keep the record straight I thought a statement of this kind on my part was warranted.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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SC

James Alexander Marshall

Social Credit

Mr. J. A. MARSHALL (Camrose):

Mr. Speaker, I was honoured by my group by being appointed to the committee set up last session to investigate war expenditures. I regret that circumstances over which I had no control did not permit me to attend all the sessions that were held, but I wish to say that my relations with the other members of the committee were of the most cordial nature. I looked upon the work of the committee not in any partisan or political light but rather as a service I might give my country, because of my inability to serve in any other capacity. I gave up my work on the committee quite willingly, and for the balance of the time this group was represented by the hon. member for Macleod (Mr. Hansell) who, I believe, carried on in a very creditable manner. I feel sure that the hon. member who will represent us this year, the hon. member for Bow River (Mr. Johnston), will bring to the work of the war expenditures committee the same high purpose and high motives which inspired those who performed this work last year.

I listened with strict attention to the remarks of the Minister of National War Services (Mr. Thorson), and as a private member I desire to say that I agree with the minister in almost every particular. I fully realized from the beginning that we were not engaged simply in a fishing expedition. Rather our object was, as the minister stated,

to view the situation in the broadest possible way and bring to the government and to the officials of the department helpful recommendations. I did not delude myself into thinking that this was a one-year job or a two-year job. It is a job that will tax the ingenuity of the members of the committee during the entire period of this war.

As a member of the war expenditures committee I understood that there was a definite and clear distinction between its work and that of the public accounts committee. I understood, further, that if anything came to our attention which seemed irregular, we could pass the information along to the public accounts committee for investigation. We spent a number of the early sessions in becoming thoroughly conversant with the routine operations of the Department of Munitions and Supply. This, to me at least, was fundamentally essential to the work which was to follow. If I were to offer any criticism in regard to the work done during the time I was a member of the committee, I should say that our meetings were too infrequent. We should have met more often in order to clear away the preliminary work with dispatch, and get down to matters of greater consequence.

I desire now to say a word or two about sittings in camera. As I understood it, there was more or less unanimity among the members of the committee with respect to this question. It was understood and agreed that we should sit in open session most of the time, but that if any matters came up of such a nature as to warrant a session in camera, the general committee or the subcommittee would weigh the facts and, if they were found to be sufficiently significant, would readily agree to such a sitting. But after many years of working on committees of various kinds I have come to the conclusion that sittings in camera are a joke. They are made such by the members themselves, who do not appear to know the meaning of the term "in camera" or the words "on your honour." I will admit that a very large amount of information which was given to us in the various sittings which were held in camera was of such a commonplace nature that it could have been given quite properly in an open session. One of the most informative articles I have ever read was published in Maclean's Magazine, and the information which formed the basis of that article was given in camera in a session of the committee of this house. I discovered that information of a more or less confidential nature was being constantly given out with perfect freedom and with utter abandon; and for that reason I believe the sittings in camera are a joke.

War Expenditures-Mr. Marshall

There seems to be some confusion, in the minds of some hon. members about the war expenditures and the public accounts committees. It has been stated that the war expenditures committee has superseded the public accounts committee. If that is actually the situation, then I deplore it. I believe a very important part can be played by both the war expenditures committee and the public accounts committee.

As a member of the public accounts committee I frankly confess I have been disappointed because it has not been functioning. It should function, not for the purpose of washing dirty linen or of endeavouring to make political capital out of some situation, but rather to run down some of these insinuations, accusations, rumours and allegations which crop up from time to time. Let me cite an example. On one occasion I heard a member of the house make the statement that a building which normally would cost a million dollars would eventually cost two million. The information was given in such a way as to lead one to believe that something was radically wrong. I recall that the Minister of Munitions and Supply said he would see that a matter of this sort would be thoroughly investigated, and that an individual making an allegation such as that would be compelled to substantiate his statement. I have waited a long, long time, but nothing has come of that.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

As a member of the committee may I ask the hon. member why, if he considered that situation serious, he did not investigate it at first hand, and call for documents. I cannot be expected to run down every rumour.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

We were told definitely by the chairman of the war expenditures committee that matters of that sort did not fall within the purview of the committee, but rather were a question for the public accounts committee. It should not be necessary for any individual to rise in his place and make direct accusations in order to bring the public accounts committee together. The simple fact that a statement has been made should be the basis upon which we would be called together to run down an allegation, and see what it was all about.

I believe most of the recommendations made by the war expenditures committee would have been put into effect eventually, even if they had never been recommended by that committee. They were too obvious to be overlooked by a first-class business executive. I claim that nothing has been done thus far by the war expenditures committee which could not have been done in

less time, at less expense and with less fuss by one good civilian cost accountant, one good office management expert and an experienced businessman. A committee of three men of this calibre would have accomplished more in one month than the war expenditures committee accomplished in the whole year.

However, the ground work has been laid, and the committee can build from that ground work. If irregularities can be found, I suggest that they be referred to the public accounts committee. I believe we who constitute the membership of that committee will endeavour to find out the real saboteurs of Canada's war effort, and recommend to the house what treatment should be meted out to them.

Canada is fighting for her national existence, and has given the "full speed ahead" signal to her Prime Minister. I assure the Prime Minister that I for one stand ready to do my part to see that we win this war, and to see, too, that proper punishment is meted out to those human vultures who would feed on the lives of patriotic Canadians.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Clarence Gillis

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

Mr. CLARENCE GILLIS (Cape Breton South):

I am going to be brief and explicit in what I have to say. I am prompted to rise at this time by the remarks of the Minister of National War Services (Mr. Thorson), who was chairman last year of the war expenditures committee. According to what he said, the committee did not have a very clear conception of its duties. In defending the activities of the committee this afternoon he made the statement that the probing into war contracts let by the Minister of Munitions and Supply (Mr. Howe) was not the function of the committee, that it was not a fact-finding committee.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Joseph Thorarinn Thorson (Minister of National War Services)

Liberal

Mr. THORSON:

I did not say it was not

the function of the committee; I said it was not the primary function.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Clarence Gillis

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

Mr. GILLIS:

That is only quarrelling with words.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Joseph Thorarinn Thorson (Minister of National War Services)

Liberal

Mr. THORSON:

There is a big difference.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Clarence Gillis

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

Mr. GILLIS:

The Minister of Munitions

and Supply now tells us that the vouchers and records of his department were open to the committee at any time they wanted to make an examination. I consider the work of the war expenditures committee to be one of the most important functions of this parliament.

I believe one of the best ways of maintaining the morale of the Canadian people at the present time is to guarantee that the money appropriated by means of war taxation is being spent to the greatest advantage in Canada's war effort. In going through certain sections of the country from time to time I find

War Expenditures-Mr. Gillis

serious misgivings on the part of the people as to whether this is being done. In my opinion the committee should have been functioning since the outbreak of the war. It has a task of great magnitude before it; it will have to go back into the business which has been transacted since the outbreak of the war. A statement by the Minister of Trade and Commerce (Mr. MacKinnon) which appeared in the Monetary Times of January 10, 1942, gives a clear picture of what the committee is up against at the present time. Referring to the war effort generally and war expenditures, he said:

Its efforts in this direction are being stimulated by the war contracts awarded by the Department of Munitions and Supply, which at the end of September had reached the enormous total of approximately $2,600,000,000. In order that our industries may be able to carry out their contracts, some $550,000,000 has been provided in the form of capital assistance for the construction of new plants, the extension of old plants, and the installation of new machinery and equipment. Again, since shipping is required to win the battle of the Atlantic and to carry our products to overseas markets, a programme of some $500,000,000 of new shipping has been authorized and some of these ships have already been launched. Indeed, our shipbuilding industry employs eight and nine times as many workers as it employed at the outbreak of war.

The wages of most of these workers have been frozen. From time to time the general public get the picture from the press that the workers in Canada consider that they are not getting what they should get in the way of wages and working conditions. They believe that production is not what it should be as exemplified in the steel industry, the mining industry and the shipbuilding industry. Union men have set up, of their own volition, production committees to see if industry cannot be speeded up. They are not quarel-ling about the question of wages.

The war expenditures committee is the only guarantee that the Canadian public have that the money is being spent to the greatest advantage. As I see it, the committee has avoided inquiry into the expenditures made by the different departments. According to the report which the committee made last year, I consider that its work was wasted. It inquired into the headquarters set-up of national defence, air, navy and army. There was no necessity for that. The different ministers come before the house with appropriations for their respective departments and we can make our inquiries from them. There is no necessity of a committee sitting in camera to inquire into the normal or natural expenditures of these departments. What is needed is an inquiry into the enormous expenditures made by way of contracts let,

44561-130}

not only by the Department of Munitions and Supply but by the Department of National Defence. There is a great necessity to dispel the rumours that are being circulated. As an example, I would mention the airport at Sydney, Nova Scotia, a national defence project. People whom I consider as responsible have asked me questions about this. One of the tenders for the original contract for the construction of the buildings at this airport was $250,000, but it was refused. Yet the buildings were finally completed at a cost of $1,500,000. Why was this tender not accepted? This is the rumour, and I do not know whether it is true or not.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

May I suggest to the hon. member that he should not help to spread rumours of that kind. As a member of the committee he could get the facts.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Clarence Gillis

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

Mr. GILLIS:

I am not a member of the committee.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Surely the hon. gentleman

has friends. They only need to meet tomorrow and ask for vouchers on that, and the documents will be right there and every question will be answered.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

The committee has not met since August.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I suppose it will meet when this debate ends. As far as I can see, my hon. friend is preventing it from meeting.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

We have not prevented it from meeting during the last three months.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Clarence Gillis

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

Mr. GILLIS:

If the war expenditures committee were functioning as it should be, I could answer these rumours by saying that that was not possible, that there was a stop-block in the war expenditures committee which was checking these things. But the committee has not been fulfilling this function.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I suggest that the hon. member's criticism should be of the committee and not of the way in which contracts are let.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

It should be of the government for not setting up the committee sooner.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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LIB

Ian Alistair Mackenzie (Minister of Pensions and National Health)

Liberal

Mr. MACKENZIE (Vancouver Centre):

It was not our fault.

Mr. COLDWELiL: It was not our fault because we nominated our men early in the session.

Topic:   WAR EXPENDITURES
Subtopic:   APPOINTMENT OF SPECIAL COMMITTEE
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April 30, 1942