March 22, 1949

PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

I should like to ask a question respecting section 36 of the act. The pertinent part reads:

36(1) Subject to the provisions of this act and the regulations and under the control and direction of the minister, the board may . . .

(b) In particular cases or classes of cases, from time to time prescribed terms and conditions for permits additional to those prescribed by regulation or prescribed special forms of permits in cases where none is prescribed by regulation.

As I read that section it gives the board the power to make regulations that would override regulations made by the governor in council. It gives the board the right in particular cases to amend or add to regulations, and apparently the regulations that the board makes do not have to be published in the Canada Gazette as do those made by the governor in council under section 35. In what particular cases or classes of cases has this section been acted upon?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Here again this is a provision inserted to give a reasonable degree of prac-

1750 HOUSE OF

Foreign Exchange Control tical flexibility to the act, and the variations from the formal regulations are somewhat minor in character. Section 36, subsection 1(b), as my hon. friend has pointed out, authorizes the board to prescribe special forms of permits and terms and conditions of permits additional to those contained in the regulations. Under this provision, for example, special forms of permits have been introduced for the export of currency by travelers; these are issued in lieu of the normal permit on form H.

First, there is the special border permit issued to commuters and others having occasion to cross the border frequently, authorizing them to carry a specified amount on any one trip. The permit is exhibited to a customs officer on each trip but need not be surrendered. Then there is the special business travel permit which is issued to business firms whose employees frequently require to travel to the United States on short notice when banks may be closed.

Special terms and conditions are attached to permits in various circumstances, examples of which are as follows: First, foreign

exchange is made available for any reasonable amount for genuine business travel. Businessmen obviously cannot, in many cases, estimate in advance what expenditures they will have to make, and where large amounts are asked for, they are normally made available on condition that on his return the traveler will furnish a statement of his expenditures so that the board can satisfy itself that they were in fact for business purposes.

Second, in certain cases of capital transfers from residents to nonresidents, payment is approved on condition that the nonresident reinvest the amount in certain classes of Canadian domestic securities. The effect is that the nonresident, while retaining his investment in Canada, is able to change its character if he wishes to do so. This procedure is applied principally in the case of capital payments between related parties.

Third, where a resident is authorized to make a new capital investment abroad to establish a business, it is normally made a condition of providing exchange for that purpose that earnings from the investment will be brought back to Canada.

I think these are fairly typical examples of the latitude given under that section to the administrative body to vary the formal conditions of the general applications which are set out in the regulations.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

Section 48 gives the board power to prevent a person from dealing with his own property. Has this power been exercised to any considerable extent?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I am informed that this power has been authorized in a number of cases, in most of which the prohibition related to withdrawals from bank accounts or access to safety deposit boxes by owners who, the board had reason to believe, were exporting capital from Canada. In one case a railway company was prohibited from delivering a shipment of Christmas trees for a nonresident who had bought the trees for unofficial Canadian dollars, pending adjustment of the transactions so that United States dollars were provided.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

Have there been a number of cases?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

My information is that there have been a number of cases in which it was suspected that capital export was being attempted.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

May I ask two questions about another matter under the regulations? Suppose a farmer who is growing old has sold his farm, has liquidated his assets and proposes to go to the United States to live with a son or some other relative; how much will he be permitted to take with him from this country?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I shall have to get that information and give it to my hon. friend in a few minutes. I have an idea, but I do not want to say positively.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

There is another question along the same line I should like to ask.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

It is an annual amount. If he cannot take the whole amount, we allow a certain amount annually.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Douglas King Hazen

Progressive Conservative

Mr. Hazen:

Take the case of a businessman whose health is bad and whose doctor tells him that if he wishes to live he must leave this country and go to a more favourable climate. If such a man liquidates his assets with the idea of moving to another country in order to go into business there, how much will he be permitted to take under the regulations?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

There again I shall have to get the information. I know that he would be allowed to take a reasonable amount, but he would not be allowed to take all his capital, particularly if it were a substantial amount. I hope to have that information in a few minutes.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Alan Cockeram

Progressive Conservative

Mr. Cockeram:

I notice that there is an increase of fifty-two in the staff of the board, whereas the cost of operating the board has increased from $810,668 to $1,334,930 in 1948, an increase of over sixty-two per cent. It would not seem that that increase in administrative cost is justified. Will the minister explain it?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I may have to inform myself a little more accurately on it. Certainly part of the increase in cost would be due to the general increase in salaries and expenses which occurred during the past year. Whether that would account for the entire amount to which my hon. friend refers, I would not want to say now. I shall try to give him a more specific answer later.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Alan Cockeram

Progressive Conservative

Mr. Cockeram:

The increase is $524,262, while the increase in staff is only fifty-two.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

Following the answers given by the minister last evening I should like to preface what I have to say in regard to refunds by asking the minister what recourse a person has who believes he has been unjustly deprived of his money under the provisions of the act and where forfeiture has been ordered?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I am glad my hon. friend raised that question, because last evening I was not thoroughly familiar with the procedural steps which could be taken under the act. I have had it looked into, and here is the position. The only case in which the board can make a decision as to forfeiture is the case involving $100 or less. The procedure is provided in sections 61 and 62 of the act. Briefly it is that when the seizure is made the board notifies the owner of the reasons therefor, and calls on him to furnish within thirty days evidence relating to the seizure if he wishes to do so. If evidence is furnished it is considered by the board, and the owner is notified whether or not the seizure is to be maintained. The owner may, within thirty days thereafter, object to a decision to forfeit the funds, in which case the board is required, upon request of the owner, to refer the matter to a court. Does that answer my hon. friend's question?

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

The provisions of sections 61 and 62 are applicable only when there is a large amount in dispute. A person who has $20, $40 or $60 taken from him, irrespective of how unjust the circumstances may be, is in effect denied any recourse. I mentioned two cases last evening. I have at least another half dozen cases in which individuals, and properly so, resent the orders that were made. In effect they have no recourse. If they decide to go to court under the provisions of sections 61 or 62, the costs are out of proportion to the benefits that will come to them. At the end of a lawsuit, even if they are successful, they will have nothing to speak of as a result of the litigation, because the legislation does not provide for their costs to the extent that it should. I am going to make a suggestion to the minister. According to the records, those who get in touch with me, and

Foreign Exchange Control through me communicate with the foreign exchange control board, are not nearly as successful as some others must be. During the last two or three years I have followed the course of not submitting cases that in my opinion are unjustifiable. With a number of them I have done nothing, because I felt that while the applicant resented having his money taken from him, in effect he had no proper cause for complaint. In the several cases I have brought to the attention of the board I have met nothing but a blank wall.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

Thomas Ashmore Kidd

Progressive Conservative

Mr. Kidd:

Hear, hear; that is right.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

When I read the records for 1947, which indicate that 347 seizures were maintained and 321 released, the failure of my advocacy on behalf of these people as their member becomes obvious. Apparently I have not the modus operandi, or the proper method of approach.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUANCE IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
Permalink

March 22, 1949