May 5, 1950

LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

Mr. Speaker, if it is the desire of the house we could go into a discussion of the bill now, and I could deal with the individual projects mentioned by hon. members. I am in the hands of the house.

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

Have you enough copies of the bill for those of us who do happen to be here?

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

Has the hon. member not got a copy of it?

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

It could not be distributed until it has had first reading, and that just took place a minute ago.

55946-141J

Department of Transport Stores

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

I am ready to proceed with second reading now if it is the wish of the house.

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

While I feel sure everyone is anxious to facilitate discussion of the bill, I think it would be well to follow the regular procedure and wait until the bill in printed form is before members of the house.

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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LIB

Joseph-Alfred Dion (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

When shall the bill be read a second time? Next sitting of the house.

Topic:   RAILWAY ACT
Subtopic:   AMENDMENT TO INCREASE ANNUAL GRANT TO GRADE CROSSING FUND
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DEPARTMENT OF TRANSPORT STORES

AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.

LIB

Lionel Chevrier (Minister of Transport)

Liberal

Hon. Lionel Chevrier (Minister of Transport) moved

the second reading of Bill No. 135, to amend the Department of Transport Stores Act.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Is the minister making a statement?

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

I wonder if I could make the statement in committee. Is there any objection to my doing so in committee?

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

No.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

It would be preferable to have it in the house.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

Your leader has said there is no objection.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I was only speaking for myself. If anybody else has any objection then I would certainly suggest that we have the statement now.

Bill read the second time and the house went into committee thereon, Mr. Dion in the chair.

On section 1-Outstanding advances not to exceed $5 million.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

Mr. Speaker, I think the house will expect some information with reference to the reasons why the department has seen fit to propose this bill to the house. I gave certain information when we had first reading of the bill, and I think that additional reasons should now be given for the proposed measure. The Department of Transport Stores Act was enacted in 1937 following the formation of the Department of Transport in November, 1936. There were at that time sixty stores depots scattered over Canada from coast to coast with as many as three, and in one instance four, in one city. There were also at that time ten separate votes in the department carrying their own stocks in a total of sixty stores depots. In the stores depots there were five or six separate compartments, and goods purchased under one

Department of Transport Stores appropriation were placed in one compartment and could not quickly be transferred to another compartment where the same stores were required. Now there is a consolidated account to meet stores requirements of fifty votes through thirty stores depots.

The purpose of the act was to enable the department to consolidate stores and stores depots, and to provide a centralized purchasing control over stores. To simplify the control and use of the stores the act provided for a single account called "Department of Transport stores account". This is the controlling account to which all stores are charged when purchased and to which all issues are credited.

In order to give the department working capital to be used for the purchase of stores in advance of appropriations voted by parliament the act authorized the Minister of Finance to advance to the Minister of Transport out of the consolidated revenue fund up to $1 million. This operates as a revolving fund. When the stores are issued for use in the various services such as lighthouse service, dominion steamers, air services, canals, etc., the value of such stores is charged to the proper appropriation and the revolving fund is credited with that amount. The fund is like the water in a well out of which the stores are drawn and which is fed by the appropriations. When stores are drawn the level of the water in the well is lowered but is restored again to its former level by new credits drawn from the appropriations.

There was a precedent for this fund in the Public Printing and Stationery Act amendment contained in chapter 5 of the statutes of 1928. Advances up to $700,000 were authorized to be made out of the consolidated fund to the king's printer to enable him to purchase materials and pay wages. This fund was subsequently increased to $2 million in 1946.

Section 6 of the Department of Transport Stores Act provided that the inventory of stores at the end of each fiscal year should not exceed the amount of stores inventory established as of April 1, 1937, which was $957,000. In 1939 the act was amended to increase this inventory ceiling to $1,250,000, and again in 1946 the inventory ceiling was further increased to $1,600,000. It is now considered that there should be no inventory ceiling at all and that it was a mistake to have one in the first place. The Right Hon. R. B. Bennett observed on second reading of the 1937 bill, as recorded at page 2488 of Hansard for that year, that it was a peremptory statement to put in a statute that the inventory must be reduced to the fixed limit,

and that if in the course of business the minister did not find it possible to reduce the inventory he is confronted by a statute that says he must do it. The difficulty is that the officers of the department cannot foretell prior to March 31 what the inventory will be at that date, which would enable corrective action to be taken at the proper time. In commercial business a merchant can put on a sale to reduce inventory but the department cannot do this, and it cannot issue stores unless they are required. The tendency has been for the stores inventory to increase owing to increased prices and additional requirements in Newfoundland and elsewhere, and now it is far above the statutory limit, being estimated at $3,200,000 as at March 31, 1950. There is no machinery for reducing inventory except to stop buying and to issue out the stock on hand.

It is submitted that the proper control over the size of the inventory is found in the amount of money which is authorized to be spent on the purchase of stores and by a careful scrutiny of purchase orders before the same are placed. If hon. members will look at the bill they will see that there are four pertinent amendments.

1. It is proposed to increase the amount

of the advances authorized under section 3 of the act as working capital from $1 million to $5 million. This is required for the following reasons: (a) Price increases. The $1

million will not go half as far as it did in 1939.

(b) Taking over Newfoundland stores estimated at $1,180,000.

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Where is that? What was the last one? Where were those stores?

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

I said taking over Newfoundland stores estimated at $1,180,000. What is the question?

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

I did not hear "Newfoundland".

Topic:   DEPARTMENT OF TRANSPORT STORES
Subtopic:   AMENDMENT OF ACT WITH RESPECT TO OUTSTANDING ADVANCES, OBSOLETE STORES, ETC.
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May 5, 1950