February 23, 1951

CCF

Joseph William Noseworthy

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

Mr. Noseworthy:

I have studied practically every sessional paper bearing on the subject and such statistics as I can find. However, we will get to a few things about which we can be more exact. One of the questions asked in sessional paper 239-D is:

What loss in the revenues of Canada, either by way of loss on excess profits or otherwise, was caused by allowances of the said depreciation?

The answer is:

No loss of revenue was caused.

The answer went on to say:

These allowances were made to cover the cost of facilities for the production of munitions and other war supplies which facilities otherwise would have had to be paid for out of the government revenue.

Apparently, if the government had not given private enterprise this $444 million by way of accelerated depreciation, the government would have been obligated to put its own money into the construction of the buildings and providing the plants which were necessary for the maintenance of war production in a time, I may say, of great national emergency.

Another interesting statement in sessional paper 239-D is as follows:

The facilities were adjudged by a competent independent tribunal to have no value except for the production of war material. This total is purely a war cost and cannot be viewed fairly in other light.

I do not think we need statistics. This publication to which I have already referred

covers the years 1939 to 1944, and was published November 1, 1945. Concerning that $500 million private capital investment, we read:

Information available (in 1945) indicates that at least seventy per cent of this investment will have a post-war value.

Place against that the statement contained in the sessional paper to the effect that a competent independent tribunal claims that this has no production value except for war materials. I suppose that even after 1945 many of these plants were used for the production of war material. Anyone who knows the industrial picture across this country knows that most of these plants which were built with taxpayers' money by way of subsidy or depreciation went back to the owners at a very greatly reduced price, and that most of them remain in production.

There were a few special cases of accelerated depreciation to which I wish to call the attention of the house. I refer to sessional paper 239-A. A question was asked for a break-down as follows:

What amount of accelerated depreciation has been allowed to individuals or firms for the purpose of

(a) erecting or extending or improving buildings;

(b) other purposes?

The answer was:

Information not available.

Then the following question was asked:

What were the amounts of the ten largest allowances for (a) buildings; (b) other purposes?

The answer was:

Information not available.

Some questions were asked regarding the depreciation allowance made to two firms. Probably we can take these as samples. The firms were Massey-Harris Company, Limited, and Cockshutt Plow Company, Limited. We find that for the years 1939 to 1946 special depreciation for the Massey-Harris Company, Limited, amounted to $1,367,525.35 and for the Cockshutt Plow Company, Limited, for the same years, 1939 to 1946, the accelerated depreciation amounted to $1,936,943.99. Then the following question was asked:

What use is now being made of each such plant?

The answer was:

No information available.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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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:

I must inform the hon. member that he has exhausted his time.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
CCF

Joseph William Noseworthy

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

Mr. Noseworthy:

In conclusion, Mr. Speaker, I would ask the minister, in replying or speaking to the bill, to indicate to us government policy; to give us an explanation of the housing situation that I raised and government policy regarding the question of decentralization of contracts and war or defence industries. I should like a statement

Defence Production Act regarding the government policy on profits in the period into which we are now entering, and whether the government intends to follow the somewhat generous policy of accelerated depreciation and subsidy to industries in the future as it did in the last war.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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SC

Solon Earl Low

Social Credit

Mr. Solon E. Low (Peace River):

Mr. Speaker, I do not think it would be wise for me at this time to enter into any extended attempt at criticism. We feel that we should like to wait until the bill is before us to see what it contains, and also to take a look at the statement which the Minister of Trade and Commerce may make in reply to the questions that have been asked him thus far.

I think the hon. member for Vancouver-Quadra (Mr. Green) has placed before the house and the government a number of considerations in which we are interested. I should not like to take the time of the house to repeat them now. Let me just say that we agree with the policy outlined in the resolution. We think that the problem of procurement and production for defence purposes will be big enough to require a department. Certainly when one is seized with the immensity of the emergency that does face us, he can understand why the Prime Minister (Mr. St. Laurent) would want all of the work of procurement of defence production centralized into one department.

I think it is only fair to say that Canada is fortunate at this time to have available the services of a man of as great experience in this kind of work as the Minister of Trade and Commerce (Mr. Howe). Whatever one's personal views may be about what he has done in the past, we cannot help feeling that here again is a case of the man and the hour coming together. I would say that, from my own personal point of view, I thank God we have the brains, the experience and the integrity necessary to meet the situation that does face us.

I listened with some interest to the hon. member for York South (Mr. Noseworthy), and I must say that many of the points he brought out this afternoon have crossed my mind. But the fact is that in times of emergency and war unusual means do have to be taken to ensure production, and we have to take unusual risks to get that production. After all, the production is the thing that counts, and the delivery of the goods at the time and place required is of the most importance. I realize all too well that that must be the guiding influence in whatever the government does.

Such things therefore as accelerated depreciation and subsidization by government loans, it seems, have to be used to induce the effort to make the production available quickly, so

Defence Production Act as to meet an emergency. What are the alternatives? That is the question I would ask. I suppose hon. members to my right- and I say this with all respect-would say that there ought to be more government enterprise. My own feeling toward that alternative would be that we would probably suffer greater losses. That has been my experience in the past.

There is only one other alternative, and that is sufficient assistance for private enterprisers, private producers-because they will not take a chance on losing their shirts. Something has to be done to guarantee that they will come out of a war period in at least no worse condition than they went into it. Otherwise they will not come forward to give assistance in meeting the emergency.

Those are the only two 'alternatives. We grant that the government will probably have to take a hand; it may have to do what it did during the last war and set up some industries itself. If that becomes necessary, then, go to it-and I think the people of Canada will back you.

However, we have committed ourselves in Canada to a system of private enterprise. That being so, it seems to me the government is bound to use whatever means may be available to get the production from private enterprise required to meet this emergency. I for one will support the government in doing that. It is true that one could go back through the records of the last war and find instances, such as those cited by the hon. member for York South, where there was accelerated depreciation, thus putting into the hands of certain people after the war plants for which the taxpayers of this country may have put out large sums of money. But I am going to say right here and now that if such a plant as Canadair happens to be one of them, then I thank God we have Canadair.

After all, we have to take these things relatively, so far as we can. What would be the relative loss between the way the government did it and the way some others have done it? That is what we have to consider. I will say for the hon. member for York South that I believe he has drawn to the government's attention the necessity for using extra precautions, and for seeing to it that the taxpayers' money and interests are safeguarded. I go along with him one hundred per cent in that. I advocate that in whatever we do the taxpayers' interests shall be safeguarded so far as is humanly possible.

Then the hon. member for Vancouver-Quadra (Mr. Green) issued warnings, and I agree with them, too, one hundred per cent. He mentioned one point about which

I should like to speak briefly, and that was the revolving fund sought in the resolution. Unless one has had some experience with a revolving fund of that kind it is easy to see how there may be fears in people's minds in connection with its control. I believe however that it is a wise provision. I do not see how in the world a huge department of this kind could procure or could induce the production of the things we will need to meet this emergency without having some kind of revolving fund.

I have helped to operate revolving funds before-not as large as this one of course by any means-but we feel that one of the important things in its favour is that it cuts down to a minimum the competition for goods in short supply. I do not see how in the world we could get along without it, if every department which required, for example, building materials went out to buy those materials on the market. Such action naturally would push prices up to the extent of perhaps twenty, thirty or forty per cent. But, having the purchases concentrated in one department, under a revolving fund, a supply of such goods can be laid in and then allocated to the various departments as required, having regard to proper priorities. It seems to me that in this procedure we would certainly save money and keep prices within reason.

Another point is that of allocation. I do not know how in the world we could allocate unless we had a stockpile. How could we allocate to the various departments requiring these goods, at the time they require them? That is the purpose of the revolving fund, and I am sure that is what the minister has in mind.

There is only one point to remember, and that is that even if the revolving fund does make for more orderly purchasing, we do have to take unusual care in seeing to it that the controls are set up in a way so as to safeguard the interests of the taxpayers. I think that is what the hon. member for Vancouver-Quadra had in mind.

Just one more point and I shall have finished. In any effort made to decentralize industry during this emergency, no matter how long it may last, I hope the government will not lose sight of the natural advantages offered in those various parts of the country where there are few industries at the present time. I believe the far east and the far west ought to have more industries-and in this I speak for both of them. If I say something in particular about the part of the country from which I come, it is only because I am more familiar with that part. I believe we may safely lay down the principle that in a

time of war or danger it is wise to have our industry dispersed as far as possible over the whole country. That is prudent action, for the safety of the people.

Secondly, it is wise not only in wartime to have industrialization spread so far as possible throughout the country, because in the various economies we have had in the provinces in the past there has been a lopsidedness which has not redounded to the welfare of the people of those provinces or to the country as a whole. The country cannot be any stronger than the provinces comprising it. The weakest of them will certainly tear down the strength of our country considerably. I recall that not very long ago my own province of Alberta had an almost entirely wheat economy. Under that wheat economy we suffered a great many reverses that could have been avoided had there been industrialization on anything like a commensurate scale. Now we are emerging into a period where we could be a great industrial province if our natural endowments were used as they ought to be used. We are not suggesting that this belongs entirely on the doorstep of the dominion government-not by any means- but we do say that in the period ahead the government could do a great deal to see to it that provinces like Alberta, British Columbia and the far eastern provinces-perhaps others if I have not named them-get a fair share of the industrial growth that always comes through war and wartime.

I should like to point out just one specific example, and I think the Minister of Trade and Commerce (Mr. Howe) and perhaps the Prime Minister (Mr. St. Laurent) may know about this. The minister is familiar with the shortage of sulphur that has developed. I am told that as the years go by it will become more difficult to get supplies of sulphur. One of the results of the shortage of sulphur in Canada is that pulp and paper manufacturing cannot go ahead as rapidly as the orders come in.

Some of our oil wells and gas wells, particularly in the southern part of Alberta, contain a high sulphur content. It would not cost a great amount of money to separate that sulphur from the gas. In order to have gas in the quantities that would make it possible to produce sulphur economically it would be necessary to have an accumulation of industry, either in the province or nearby, to use the gas from which the sulphur has been separated.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Or export it.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
SC

Solon Earl Low

Social Credit

Mr. Low:

Yes, or export it. I am glad the minister brought that up because it gives me an opportunity to say that the province of

Defence Production Act Alberta is prepared to export gas just as soon as it has the assurance that there is a sufficient reserve to safeguard the people's interests for, say, thirty years ahead and to maintain a supply in the pipe lines that may be built to other places. It is only a question of what the reserves are.

The next important question is: Why take the gas away from the province when you can perhaps build industries more cheaply right in the province? Stop and think what it costs to build a thirty-inch pipe line to go 2,200 miles. Put a fraction of that cost into the development of factories and industry within the province and the people will save a lot of money. On the other hand, when we do find that there are sufficient reserves I am sure we will be glad to share our good fortune with other parts of the country.

I am simply saying that the government most certainly can use its influence and wisdom to see to it that there is a balance of allocation of the new industrial effort that may be required to meet this emergency. I am making this appeal, not only on behalf of Alberta but on behalf of those other parts of Canada that have not been developed industrially. We shall reserve any criticism we have to make until we see the terms of the bill, and in the meantime I assure the Prime Minister and the Minister of Trade and Commerce that we support the principle of the resolution.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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CCF

Wilbert Ross Thatcher

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

Mr. W. Ross Thatcher (Moose Jaw):

Mr. Speaker, I should like to say just one word on this resolution. As has been stated, we are going to support it. There is one feature which has been mentioned time and again in this house to which I should like to refer again-the problem of decentralization. I think there are obvious reasons why we should decentralize. Up to this point apparently the policy of the Canadian Commercial Corporation has been not to decentralize its defence contracts.

In an order for return which I received the other day in reply to a question I had asked I find that Saskatchewan got only about one-tenth of one per cent of the contracts for defence which were let in the first nine months of this year. I find also that three maritime provinces, excluding Nova Scotia but including Newfoundland, and three prairie provinces, a total of six provinces, got only 4.5 per cent of those contracts.

The minister can easily say that there is no industry in those parts of the country, but I say to him that all we want him to do is to use the industry already there. My own province got only $450,000 worth of contracts in the first nine months of this year, which is just a little better than what the

624 HOUSE OF

Defence Production Act Yukon got, but not much. I got a wire from the chairman of the industrial development council in my province who wanted to know what that $450,000 was for because he could not find a trace of it. . He thought it must be for airport buildings or something. I have not been able to get a break-down of it as yet. This is a situtation which concerns me very much.

Hon. members will recall that during the last war the population of the prairie provinces and of some of the maritime provinces dropped rather drastically. It was probably the worst in Saskatchewan. In 1939 Saskatchewan had 906,000 people, but because so many of our young men joined the services or had to come east to go into industry, by 1945 our population had dropped to 845,000, a net loss of 61,000 people. It is only within the last few years that those people have come back and we have recovered our population. According to the Canada Year Book our population is now 861,000.

If there is another war and the same process starts over again Saskatchewan is going to see its population depleted. If that process is repeated we are likely to see our province remain an agricultural province for the years to come. I ask the minister to use whatever industries we have. I hope that in the future this new department will be able to give us much more than we obtained in the first nine months.

There is only one other thing I should like to mention, that is the committee to go over defence expenditures. I am sorry the Prime Minister (Mr. St. Laurent) will not set up a special defence committee and I do hope that when the public accounts committee meets next Thursday they will go into defence expenditures, including the expenditures by this department, in some detail. I agree with other hon. members who have said that the interest of the country as a whole would certainly be served if that were done.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
CCF

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

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

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, I should like to take just a few minutes to emphasize a couple of points in connection with this matter while we have the ears of the Prime Minister (Mr. St. Laurent) and the Minister of Trade and Commerce (Mr. Howe), who we all expect will head up this new department. It has been made clear that parliament as a whole will support this resolution and will also support the bill which will follow the resolution providing there is nothing objectionable in it.

The points of emphasis I wish to make have been made time and again on the floor of this house. Some hon. members may think that we have worn them threadbare. That is only

because we have lived such a large part of our lives either in times of actual war or in times when we have been concerned over the outbreak of war. Nevertheless, we should not forget the strong feeling in the minds of the Canadian people against profiteering, either in time of war or in connection with defence preparations.

I shall take a moment to repeat this emphasis because in addition to my own conviction about it, in addition to my feeling that it is the view of the Canadian people that we do not want profiteering in defence production, there is the fact that we have in the Minister of Trade and Commerce (Mr. Howe) a man whose yea is yea and whose nay is nay. He is a man who, when he wants to get something done, gets it done. We know that, and I think there are probably members of the Liberal party who know that if he is against something they do not get it.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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PC

William Joseph Browne

Progressive Conservative

Mr. Browne (St. John's West):

Since when?

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Always open to reason.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
CCF

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

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

Mr. Knowles:

I hope the minister will not spoil the characterization I am drawing of him because I am satisfied that if there is any attempt at profiteering, if there is any attempt at patronage in connection with defence preparations, we have in the Minister of Trade and Commerce the man to stand up and say no and, if I am not mixing my metaphors too much, the man to put his foot down.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
PC

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

What are you looking for?

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
CCF

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

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

Mr. Knowles:

I am looking for a firm stand by the minister, and I am going to quote as an authority in support of the contention that we have got to watch this sort of thing none other than the late Right Hon. W. L. Mackenzie King. This is a quotation that has been given to the house a good many times. In fact the volume of Hansard from which I am reading is well worn through members turning to this page. However, I think it is well to quote it again. Mr. King was speaking in the debate on the address in reply to the speech from the throne at the opening of the special war session in September, 1939. I well remember being a visitor in the south gallery and hearing his speech on that occasion. At page 22 of Hansard for September 8, 1939, Mr. King said:

I come to profiteering. I believe I have already stated in this house that I know of nothing in the world more contemptible than that any man should seek to profit from the sacrifices which others are making. And if the laws and other measures which this government may introduce and seek to enforce are not sufficiently strong to destroy anything in the nature of profiteering, X hope hon. members of this house will bring to our attention, in a way that will also bring it to the attention of this country, what we ought to do to achieve that all-important end. There are some things that are very difficult

ol accomplishment. Unfortunately human nature has its weak and its bad sides as well as its strong and good sides. Sometimes it is very difficult to cope effectively with the underworld and its methods. But let me say this: I care not who the individual may be, how respectable in his own eyes or in the eyes of others he may appear, or what position he may hold; if in this crisis he seeks to profiteer he belongs to the underworld and should be treated as one of those who menace all that is sacred in human relations.

I have other quotations but I shall not take the time of the house to give them. Notably there are remarks of the late Ian Mackenzie at the time that he was piloting through the house the bill that -established the defence purchasing board in March, 1939. If I may paraphrase him, he at that time made statements similar to those of Mr. King, namely, that the government was absolutely against profiteering in time of war or in a time when the nation was preparing its defences.

As the government knows, at one time there was on the statute books what was known as the Defence Purchases, Profits Control, and Financing Act. It was passed in 1939, and contained a clause, well known to all members of the house, known as the 5 per cent clause limiting profits to that figure. Hon. members know that when the Department of Munitions and Supply Act was passed the provisions of that clause were superseded, and in June of last year another act was passed, namely, the Defence Supplies Act of 1950, which superseded entirely the Defence Purchases, Profits Control, and Financing Act.

That means that no clear-cut profit limiting legislation is now on the statute books. We have to depend for the limitation of profits and for steps to prevent profiteering in defence contracts upon the government itself, and we have to depend in particular upon the minister who will head this department. Therefore I have taken a few moments to read to him again the statement which his former leader made in the house on September 8, 1939. Not only did the former prime minister speak for all of us with regard to profiteering, but he did likewise with respect to the question of patronage. I quote again from the late prime minister's speech on September 8, 1939, at page 23 of Hansard for that special session. Mr. King said:

Then there is the matter of patronage, of favouritism. May I say this to my own following in this House of Commons: If any of you desire to have

persons given positions, in connection with this war, simply because they are favourites of yours; if primarily for such a reason you want to have anyone given some special post, keep away from me, for I will never listen to you. I say the same to every hon. member of this house, and I say it not only on my own behalf, but on behalf of the government. We want no favouritism in this war. We want the name of this government and this country to be honourably sustained, and the man

Defence Production Act who seeks to profit indirectly by having his relatives or friends gain this contract or get that commission simply because they are among his favourites is no true friend of this administration.

As hon. members know, I am not fully satisfied that in the general conduct of affairs in this country it can be said that this government has forgotten the word "patronage"; there are too many evidences of it. However, I am not going to speak now of the practice of that art as this government carries it on in the general affairs of the country, which I deplore. But I do ask that the words of the late prime minister be taken to heart certainly so far as defence contracts and preparations for the defence of Canada are concerned. The minister who will head this department should put that paragraph on his office desk as a motto which I hope he will observe without fail.

I wish to express just one other thought and then I shall take my seat. During the discussion in September, 1939, with respect to the setting up of the department of munitions and supply, the question of the relationship between armaments and munitions on the one hand and the general economy of the country on the other was also discussed. I hope that there will be the most effective co-ordination between the work of this department, in so far as it is concerned with defence contracts, and economic policy generally. What I want to say was again said so well by the late Mr. King that perhaps the best thing for me to do is to quote him. Here again I shall read from Hansard for the special session of September, 1939. At page 172 Mr. King said:

Furthermore the experience of the last war-

Of course, he was referring to world war I; that has to be said because now the words "last war" mean world war II.

has clearly shown that the problem of securing armaments and munitions cannot be separated from the general economic organization of the country. For example, if too much energy and material is thrown into the manufacture of munitions, some other industry equally essential to the national effort may be crippled. In order to prevent such a situation arising, the governmental body must have power, not merely over the production of munitions themselves, but over production of related supplies, if a proper balance is to be maintained, and the most effective use made of our varied resources.

I know that the government is conscious of the fact that this is not a period of actual warfare. That is revealed in the nature of the other bill before us in the name of the Prime Minister (Mr. St. Laurent), Bill 24. The government is anxious to restrict, to some extent at any rate, the powers that it asks parliament to give it because this is only a period of defence preparation rather than actual war. Because of that the government

Defence Production Act is reluctant to exercise to the full such controls as were exercised over the economy during the last war. But my contention is that, in a time like this when we are upsetting the economy by the extent to which we are going in for defence production, it is important for the government to think about all those other things, the general price level, the extent to which homes are needed, and all the other things that are necessary to maintain the national effort and to maintain our national morale. I urge upon the minister who will head up this department to think in terms not only of actual war materials that need to be produced, but to think in terms of the economic picture as a whole, to attempt to guide and control it where necessary in the best interests of all our people and in the best interests of the country.

Motion agreed to and the house went into committee, Mr. Dion in the chair.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Will the Minister of Trade and Commerce deal with the questions I raised?

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

I believe it will be much simpler, Mr. Chairman, to deal with them when we have the bill before us. Then we cam discuss them in an orderly way as they refer to the various clauses in the bill.

A point that my friend was making that Vancouver is handicapped in delivering to central stores in Ottawa is, of course, true. Vancouver would be handicapped to a still greater extent if Toronto could compete for deliveries in Vancouver, eliminating the freight rates. The production of this country has developed under a system of freight rates. There are certain territories which are economic for certain areas of the country, and certain areas which are uneconomic. I think my friend will find that certain sections would be under a greater handicap in competing for war orders if the question of freight were eliminated than is the case under the present system. My officers have studied the situation, and that is the conclusion to which they have come.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Is there any way of preventing the manufacturer in the east from taking advantage of the freight rate to Vancouver, which was certainly done in this particular case? He just added on most of the freight rate from Vancouver to Ottawa, and was still able to get the contract because it was lower than the Vancouver price plus freight. There should be some way of stopping that.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

I do not know what the commodity was, but it may have been a commodity in which only firms in Vancouver, Ottawa and Toronto can compete.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

It was brooms.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink
LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Brooms are only made in two places. Perhaps our buyers were not very skilful in getting the price down. Ordinarily, there is enough competition in the locality to make sure that no sum that is not essential to the production is added into the cost. I would not take the broom situation as typical, as I do not think there are many products in that category.

The hon. member mentioned the subject of dispersal, and sometimes that can be accomplished. We were successful in doing quite a bit of it in the last war. For instance, explosives plants were dispersed in various parts of the country. I made very sure that they did not locate one at the head of the lakes, because I do not like the sort of plant that has no future. A good many parts of the country, however, were keen to get them, and did get them. I succeeded in locating the first big plant in Alberta to use natural gas, that is the Alberta nitrogen plant. It has had a successful post-war life, and is today an important part of the economy of Alberta.

Ordinarily putting a factory down in a small town in a distant locality involves serious problems. Suppose, for example, we built a factory employing 5,000 people in the town of Qu'Appelle, Saskatchewan, a beautiful town and well located for most purposes. It would mean building houses for 5,000 families, and transporting people from other parts of Canada to that locality. It can be done sometimes, but if you expect an industry of that kind to have any post-war life you have to make sure it can compete on reasonable terms with similar industries in large centres of population. Those facts have to be taken into account. It is not a matter of saying that we are going to build a war plant, so we will build it in the maritimes because they have not a similar war plant. Unless it is the type of industry that would be able to live in peacetime, that would not be a kindness to the maritimes.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
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?

An hon. Member:

Shipbuilding.

Topic:   DEFENCE PRODUCTION ACT
Subtopic:   CREATION OF NEW DEPARTMENT
Sub-subtopic:   MOBILIZATION OF ECONOMIC AND INDUSTRIAL FACILITIES
Permalink

February 23, 1951