March 24, 1944

NAT

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

That is right, and I take full responsibility for it.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

With regard to Defence Industries Limited, I think in fairness all the fees collected by the company should be placed upon Hansard. I have a statement here which, with the unanimous consent of the committee, I will ask to have printed in Hansard. It is as follows:

Defence Industries Limited Operating Fees

Chemicals and explosives

Plant Paid to Dec. 31. Value of Per cent of fee to production1943 production valueNobel $ 796,000 $36,005,000 2-21de Salaberry 831.000 34.962,000 2-3Shawinigan . 42.000 3.268.000 1-28Winnipeg . . 585.000 25,006.000 2-34Beloeil 9.600 388,000 2-47Windsor .... 41,000 2,705,000 1-52$2,304,600 $102,343,000 2-2

War Appropriation-Supplies

Ammunition filling Percent of

Paid to fee to

Plant Dec. 31, Value of production

1943 production value

Bouchard ... $ 180,000 $114,603,000 0-16Pickering .. 248,000 228,230,000 0-11Villeray .... 25,000 4.408,000 0-57$ 453,000 $347,241,000 0-13Small arms and sundry Verdun $ 922,000 $ 41,446,000 2-2Brownsburg. Montreal 348,000 12,160,000 1-35Works .... 147,000 10,375,000 1-42Westmount . nil 3,785,000 nil$1,417,000 $ 67,766,000 2-09Total Operating .. $4,174,600 $517,350,000 0-8Construction Fees Chemicals and explosives Paid to Percent ofPlant Dee. 31, Construction fee to1943 cost costNobel $ 363,000 $ 11,278.000 3-2de Salaberry 137,000 14,323,000 0-96Sliawinigan.. 15,000 585.000 2-6Winnipeg ... 91,000 10,276,000 0-9W'indsor .... 15,000 866,000 1-8Beloeil 8,700 310,000 2-8Stormont ... nil 2,944,000 nil$ 629,700 $ 40,582,000 1-55Ammunition filling Bouchard ... $ 106,000 $ 13,277,000 0-8Pickering . . 86,000 11,489,000 0-75Villeray .... 25,000 2,244,000 M$ 217,000 $ 27,010,000 0-8Small arms and sundry Verdun .... Montreal $ 168,000 $ 15,593,000 1-1Works ... 101,000 9,529,000 1-1Westmount . 17,000 1,461,000 1-2$ 286,000 $ 26,583,000 1-08Total Construction. $1,132,700 $ 94,175,000 1-2Summary Operating .. $4,174,600 $517,350,000 0-8Construction. 1,132,700 94.175,000 1-2$5,307,300 $611,525,000 0-86

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

Do those fees include the salaries of officers engaged in operating the plant?

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

It includes the services of the company and its head office expense. The men actually engaged in the plants, are paid as part of the plants' expense. In connection with construction fees, my hon. friend will recall that Defence Industries Limited were also designers of the plants, and experts in the process involved.

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NAT

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

What

would be the average fee in commercial life as compared with the 1-2 per cent the minister has indicated?

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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I believe the standard fee is five per cent, but in a large work of this kind it would not be that much.

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

What I said may have been obscure. The figure the minister has given is the one I had in mind. I took it from a newspaper report that it was around the

8600,000,000 mark. That is where the figure crept in.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I see. While, as I pointed out, the average fee was -86, all this work was segregated in a corporation with a million dollar capitalization. This of course made its earnings subject to heavy taxation. That fee, after taxation, amounted not to -86 per cent but to -2 per cent, or one-fifth of one per cent.

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CCF

Clarence Gillis

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

Mr. GILLIS:

I understand it is the intention to go along with the estimates of the Minister of Munitions and Supply, as we did with those of the army, the navy and the air force. While the estimates set out specifically items covering almost everything one could discuss, there are some observations of a general nature I should like to make.

The hon. member for Rosetown-Biggar (Mr. Coldwell) stated in a general way the opinions held by this group respecting the minister's report to the committee. My own opinion is that under difficult conditions the minister has done an excellent job, from the inception of his department. When one stops to examine the record back to the outbreak of war, and realizes the position in which the minister was placed in a country totally unprepared for war, with the responsibility thrown into the minister's lap of putting Canada on a war-time basis, he can see that this was a big order to hand to any one man. The surprising feature is the success he has had, particularly in view of the lack of cooperation from the beginning on the part of those who were in a position to give him perhaps the only available assistance

180S

War Appropriation-Supplies

at that time. I refer to those organizations to which he handed so much power, a procedure for which I believe he has been justifiably criticized. When he first approached those organizations and asked for their cooperation in putting Canada on a war-time basis industrially, we remember that their only gesture of cooperation was that unless the clause providing for a limitation of profits to five per cent were removed, they would not be prepared to produce war materials.

The point I make is this: in examining the record of the Department of Munitions and Supply one must remember that the only machinery the department had to work with at that time was the then existing industrial establishment of the country. Any man who took that industrial machine and built from it the organization we now have must be handed a compliment, and it is one which I think he has justly earned. He had a terrific job, and received very little cooperation in the first instance from those who were in a position to give him real assistance.

The scene has changed, however, and a real organization has been built up. I agree with many hon. members who have said that to-day too much power rests in the hands of that group who are concerned about profits only. We do not quarrel with the controls, but rather with those who control, and what they control for. If the only desire in their minds is profits for themselves, that is a motive which the Canadian people, and particularly the members of this house, will have to watch very closely.

With respect to the industrial war machine that has been built up, the minister I think has proven that we have reached the peak of war production. The emphasis is changing; there is a slackening off, and a tendency on the part of those who are dominant in these controls, men from the larger industries, to create the opinion in the minds of the public generally that the war is near its end, and that the huge organization that has been built up for the purpose of prosecuting the war can now be unscrambled. I notice that many of the key people are resigning the positions which they have occupied for the past two years in the controls and are going back to their own private companies. When I say "going back", I should add that they are going back in name only, because they have never really left their own concerns. I think they reason this way: Controls have been developed, and certain legislation and orders in council have been passed, which make it unnecessary for us to remain in these controls any longer, because under the existing legislation and orders in council there is practically a guarantee to us that the emergency machine

that was built up for war purposes will not be utilized in the aftermath of the war in competition with those of us who believe in private enterprise-whatever private enterprise may mean. I have lived under so-called private enterprise for forty-five years or so, and it has been so private, so mysterious, that most of the citizens of this country have not yet had an introduction to it. I could not give a definition of it; it is something really mysterious to me. But if by private enterprise they mean the concentration of wealth and power in the hands of a few men like Sir Herbert Holt and the Royal bank, I can understand that.

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NAT
CCF

Clarence Gillis

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

Mr. GILLIS:

But he left footprints on the sands of time. If that is to be the motive in the future with respect to the utilization of this industrial war machine that has been built up, the Canadian people are in for a very unhappy experience.

I said a few nights ago that I consider the war supplies allocation board and the War Assets Corporation which have been set up under the Department of Munitions and Supply perhaps the most important post-war organizations that have been, instituted by the government. I have served on the reconstruction committee for the past two and a half years. The committee has heard many briefs and recommendations with regard to planning for the post-war period and creating jobs for those in the armed services when they return. But the only jobs that you will have in the post-war period which did not exist in 1939, when there were one million and a half people on relief in this country- and to-day many of those boys are in Sicily or Italy-will be the jobs created by this industrial war machine that has been built up under the Department of Munitions and Supply. But if that organization is not used for that purpose; if these industries are not converted to peace-time needs, you are not going to have any jobs for our boys to come back to from overseas. We have placed in the hands of the war supplies allocation board and the War Assets Corporation the power of utilizing, in such a way as they see fit, the great industrial organization that has been built up by the taxpayers of this country and from the very slight experience we have had with it so far I am sceptical as to how that power is going to be used. For instance, here is a statement in Toronto Saturday Night of a few weeks ago, "Canada far ahead on disposal of surplus war supplies." The thing that gives me concern in this article is that the manufacturers' association emphatically state that

War Appropriation-Supplies

in their opinion industry which has been created for war purposes must under no circumstances when the war ends be given to newcomers in the industrial set-up, to be used on a competitive basis with industries now in existence. In effect that means to me that those who dominated the industrial set-up in the field of private enterprise in 1939 before the war are of the opinion that this whole war machine should be scrapped now, that under no circumstances should the industrial organisation that has been built up during the War be used for the purpose of creating peace-time necessities and come into competition with the existing industrial organizations. That is the opinion of your manufacturers' association and your chamber of commerce; there is no doubt about that. The chamber of commerce in making their presentation to the reconstruction committee not so long ago stated emphatically that one of the basic principles they were advocating was that immediately on the cessation of hostilities the whole industrial machine that had been built up during the war must be scrapped and the field left open to private enterprise. The point I wish to make there is this, and I have no ulterior motive at all; I do not care what kind of tag you hang on to your order of society, but unless that order of society takes care of the needs of the people it has no right to exist.

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NAT
CCF

Clarence Gillis

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

Mr. GILLIS:

Then we must be in disagreement with the manufacturers' association and the chamber of commerce who advocate a return to 1939 conditions in the field of industry in Canada. That is their policy, and it is one with which I and those of us in this group disagree. I am glad to hear the hon. member for Rosedale say that we are all agreed on the principle of establishing an order of society that will take care of the needs of the people regardless of any particular group that may be injured in the process.

In the matter of utilizing the existing wartime industrial organization, I have had one or two little experiences which indicate to me that those who have the authority to dispose of surplus war materials and supplies have a certain definite policy that they are going to follow. Let me give the minister one example, a very small one perhaps.

An ex-service man who had been overseas for a couple of years came back and took work at a shipyard. He had previously been a miner. When the emergency fuel order came out he was directed by national selective service to go back to his old employment as a miner. He did so, going to the section to 100-114

which he was allocated by the selective service. His family was in another part of the country, and he desired to move them so that they could be together, but he could not find a place to live. There are barracks located in that town comprising some forty buildings. The barracks are new. They had been used for a short time, but were then unoccupied. He suggested to me that I get in touch with national defence with a view to his buying one of these buildings and convert it into a dwelling for himself and his family. I wrote several departments, not knowing exactly who or what this war allocations committee or corporation was. I was advised, after some considerable delay that, as far as selling any of these buildings was concerned, by virtue of the buildings having been put on land owned or leased by Dominion Steel and Coal Corporation Limited, that company had first option on them and it was believed that they would utilize them as homes for miners who might be directed from other industries into that section. Nothing has been done in that matter so far. The ex-service man who was directed to come back to that particular occupation still lives apart from his family.

I tried again. One of the larger credit unions in that area, desirous of obtaining more office space, wanted to purchase one of the. buildings. Upon writing about the matter I received exactly the same information.

These are small illustrations of a point which I wish to leave with the minister. My conception of the principle upon which this corporation and committee are going to work is this. Much of the money which through the minister's department has been put into industry for the purpose of expanding existing industry and developing new production has gone into plant and equipment on land held by private companies. Presumably the decision rendered by the board in the case I have mentioned is that upon which the whole industrial machine built by the minister's department will be disposed of.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I did not just follow the hon. member. May I ask, did he get his information from the disposal board in the case of the barracks at New Glasgow?

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CCF

Clarence Gillis

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

Mr. GILLIS:

The barracks were at Glace Bay, Nova Scotia.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Well, did he get his information from the army or the disposal board? Who told him?

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CCF

Clarence Gillis

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

Mr. GILLIS:

In the one case, national

defence secured it through the 'board; in the second case I myself secured it through the board.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Through the disposal board?

War Appropriation-Supplies

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CCF

Clarence Gillis

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

Mr. GILLIS:

Through the allocation committee.

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LIB

Clarence Decatur Howe (Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Ordinarily land acquired by

the army for barracks purposes has been .purchased by the army. I am not familiar with the arrangements. But as to buildings paid for by the Department of Munitions and Supply, in practically all cases the land is owned in fee by the crown.

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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March 24, 1944