April 6, 1951

LIB

Daniel Aloysius Riley

Liberal

Mr. Riley:

Don't look at us.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

I realize that all members over there except one are new.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

Solon Earl Low

Social Credit

Mr. Low:

There has been a real change since those days.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Daniel Aloysius Riley

Liberal

Mr. Riley:

Don't cast reflections on us.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

There is no reflection. The simple point is that if the members of that "Little Chicago" group were not appointed by the Liberal administration to try to silence this group of thirteen standing against the remaining members of the whole house, then all I can say is their performance on that occasion constituted one of the greatest disgraces in the history of the Canadian House of Commons. They helped also to stampede the country and parliament into the adoption of several genuinely iniquitous measures.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Daniel Aloysius Riley

Liberal

Mr. Riley:

Did they influence you?

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Not a bit, because we knew what it was all about; and if the hon. member is in any doubt he can ask us questions as the days go by and we will satisfy him on the matter.

I think the time has come when the house should contemplate seriously withdrawing from the Bretton Woods agreement and the international monetary fund. To that end I would invite the careful study of every

Gold Mining

member of the house and every person in the country. Until we can find a device whereby we can overcome the difficulty of the shortage of United States dollars we have not begun to see the light in the world with respect to convertibility of currency.

Is this parliament of this great nation, great already and far greater to be, to be trammelled to the extent that it cannot pass a simple innocent little measure like the one before us without going and pleading for the consent of the international monetary fund? Perhaps I had better not say what I think and know about the members of that organization for fear of doing them harm when they cannot answer in their own defence.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

Our own minister is one of the governors, and Graham Towers.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

If our own minister is one of the governors then we had better go right to work and1 educate him. Mr. Ilsley, who was minister of finance during the time when this measure was actually stampeded through the house-

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

Solon Earl Low

Social Credit

Mr. Low:

By threat of closure.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

-by the veiled threat of closure on the part of the prime minister, went to Toronto the next year or two years later and gave a most glowing speech of hope for the future because we had accepted the Bretton Woods agreement! Let hon. members behold what a glowing future we have had.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

Ernest George Hansell

Social Credit

Mr. Hansell:

He has gone to his reward.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

There is one other thing I think I had better say something about, the effect that Russia had in refusing to enter into the Bretton Woods agreement. I asked the hon. member for Eglinton if he believed that the entrance of Russia into the Bretton Woods agreement would have assisted in any way. I know I took him at an unfair disadvantage and I did not expect him to do anything except just what he did, and he did it very well. But let me say right now that if Russia had gone into the Bretton Woods agreement it would have made matters infinitely worse because you would have had this iniquitous international monster called the international monetary fund obtruding its offensive nose into the intimate affairs of every nation on the face of the earth, and with all the backing of the whole body of nations of the world.

The minister went and asked the monetary fund if he might introduce this resolution and pass the bill, and the monetary fund graciously consented that he might, because it really could not do much else. However, if the fund had the whole world behind it,

Gold Mining

including Russia, Australia and New Zealand!, one can imagine the way it would be cracking the whip and pointing to the line that Canada would toe not only with respect to developing our gold mines but every other kind of mining in Canada, and every other kind of industry in this country. Let not hon. members or anybody else lay any blame on Russia, Australia or New Zealand for the catastrophic failure of the Bretton Woods agreement. It was foredoomed to failure because it was founded on worse than quicksand if it was proposed to be a measure to improve the welfare of the world.

I am not going to go into detail on the general thesis that Russia's entrance would have made matters much worse instead of better because I think it would probably be a little too far afield from the measure. However, I say once more to members of the house and the people of the. country: Beware of Bretton Woods. Beware of the international monetary fund. The sooner these things are taken down from their high position, put away in mothballs and ultimately buried and forgotten, the better it will be for everyone in the world.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Joseph-Arthur Bradette

Liberal

Mr. J. A. Bradeiie (Cochrane):

Mr. Speaker, before I proceed to my main remarks, which are going to be fairly brief, may I say that I believe it is my duty and obligation to say a few words on this very important resolution, the primary reason being that for twenty-three years of my public life I have had the great honour of representing one of the greatest gold-producing regions of our country, the Porcupine section. In that occupation I have always pursued a middle course between producers and labour. I have always had the respect and attention of both parties, and from that experience I have an idea of the importance of gold mining to the national economy of Canada. I want to compliment the present Minister of Mines and Technical Surveys (Mr. Prudham) on the resolution, and also on his appointment as minister. I know he will follow in the footsteps of his predecessors of the Conservative and Liberal parties. Whoever they were they always made a point to come on the ground and study the situation that existed in the gold mining sections of Canada.

A few weeks prior to the appointment of the present minister we had the pleasure and the good fortune of having a visit from the Minister of National Revenue (Mr. McCann), who at that time also held the mines portfolio, to the northern section of the province of Quebec and the Kirkland Lake and Porcupine regions. As had been done on other occasions by previous ministers, he showed by the speeches he made, and at the meetings he

had with management and labour and the public, that he was fully familiar with the existing situation and the dire necessity of maintaining some assistance so far as the gold mining industry of Canada was concerned. I listened very attentively to the speech of the hon. member for Eglinton (Mr. Fleming). As usual he was eloquent; he presented some good arguments; I know he was sincere, and I compliment him on his remarks. I am not going to try to follow the hon. member for Lethbridge (Mr. Blackmore), who spoke almost entirely on the Bretton Woods agreement. All I want to say at this point is that the agreement did give us a yardstick based on gold standard; that is why gold is mentioned in the agreement.

I do not entirely agree with the statement of the hon. member for Eglinton that the present government has done almost everything possible to be disagreeable to the gold mining industry. After all, the situation confronting the gold mining industry in Canada was not created by the government. I remember vividly when Mr. Ilsley, then minister of finance, announced to parliament and the country that the Canadian dollar would be placed on a par with the United States dollar. I knew the gold mining industry of this country was going to be hit. That very night, while I was still listening to the minister of finance, I received phone calls from some people vitally interested in that industry. I told them there was no doubt they were going to be hit, but that personally I felt that in bringing the Canadian dollar to parity with the United States dollar the government was doing a good thing for the country as a whole and that some remedies would be found. I believe I was right in what I said at that time, and the Canadian people have agreed with me. That evening I also received three telephone calls from high officials of large newsprint and sulphite industries in my constituency, asking what was going to happen to them. I told them not to worry, because the prices of newsprint and sulphite were flexible and could go up or down as required, following world prices. I was much more worried about the gold mining industry, in which the price was standardized and is still standardized at $35 an ounce, than I was worried about the newsprint industry. As it has turned out I was absolutely right. We all know what happened to newsprint, pulp, sulphite, lumber and almost everything else. Lumber, for example, has gone up from 200 to 400 per cent since those days.

The Canadian parliament, and more particularly those hon. members in whose ridings gold mining was a very important factor, knew the situation was serious. I remember

that my dear colleague from Timiskaming spoke to me the same night, saying, "Joe, what are we going to do?" I replied that there was only one thing to do; we would go back to our respective constituencies and tell them the exact situation. They were reasonable people; they were good Canadians, and they would understand the situation. If it was a good thing for Canada as a whole to bring the Canadian dollar to parity I was sure our people would accept it, though it might seriously affect the gold mining industry. That is what we did. Within two weeks we visited our section of the country and explained the situation. Our people understood, though naturally they expected that the matter would receive the attention it deserved from the federal treasury, and to a large degree these hopes have been fulfilled. I agree with the hon. member for Eglinton that we should not necessarily be completely satisfied with this legislation. We want more. We are something like the western farmers, the eastern industrialists and all the others; the more we get the better we are pleased, though at the same time we are very practical in our requests.

I believe this is a good measure. The hon. member for Eglinton asked for permanent legislation but I must say that at the present time it is absolutely impossible to have permanent legislation as far as gold production is concerned. The hon. member made another statement with which I do not agree when he said that government officials and perhaps other people in Canada thought that if we increased the price of gold here it would have an inflationary effect. I have never heard one Canadian express the opinion that a higher price for gold would be inflationary. That statement has always come from the United States.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

If the hon. member will permit me, I do not think he quite followed what I said. I was dealing with a possible argument, and I said I did not think anyone could establish the proposition that an increase in the price at which Canadian gold might be sold abroad would be inflationary on the Canadian market.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Joseph-Arthur Bradette

Liberal

Mr. Bradefle:

I am glad to accept that

statement, because I do not know of any Canadian who would argue that an increase in the price of gold in Canada would be inflationary. Three years ago I visited Washington where I had some discussion and argument with some high officials of the government. They told us very definitely that it was impossible for the United States to increase the price of gold. At the time we thought we might have a chance to get some $10 to $15 more an ounce. I argued

Gold Mining

until I was blue in the face trying to show them that an increase in the price could not possibly be inflationary. I tried to point out that the United States was the greatest holder of gold bullion in the world, and that if the price was increased by their own volition it would only be beneficial to that great country. However, that feeling still prevails among the higher officials of the United States, and I believe it is one of the things on which the president is absolutely convinced.

Now I am going to say a few words about the Bretton Woods agreement, because in several places it mentions the necessity for at least a 25 per cent gold backing for that fund. I do not entirely agree with the opinion of the hon. member for Lethbridge. In my opinion the Bretton Woods agreement was a wonderful thing, not only for Canada, but for the whole of the civilized world. When that agreement was drawn up mentioning gold it showed that there was a reason for that metal; it showed there was a need for such a yardstick for our own monetary system and that of practically every other country. That is the first point in favour of gold production. Then there is a demand for gold by artists and craftsmen, in dentistry, and for many other things for which people would gladly buy gold if it were available. For instance, I believe that if tomorrow our mint should issue say $50 million in $5 and $10 gold pieces, they would be distributed within two or three weeks at the most. People want something tangible in their monetary system which they feel they do not have at the present time. They are right, of course, in that feeling, but I am just giving the opinion of the people in my own constituency. Only last evening at the reception at the French embassy I was told by a Frenchman from North Africa that practically the only currency which was accepted during the war in North Africa, Spanish Morocco, Sicily and southern Italy was the $5 and $10 gold pieces carrying the United States eagle. He told me, and I believe it to be true, that those gold pieces had saved the lives of hundreds, yes thousands of young Americans, Canadians and allied troops.

So there is a meaning for gold in our monetary system; and if there is a meaning and acceptance of it there is no reason why it should not be dealt with at least to some extent as other mining like base metals and other production is dealt with. We all know what has happened to steel, copper, lead, zinc and all the other metals. Mind you, gold is one of the most difficult metals to extract from the entrails of the earth. There is no placer gold in northern Ontario. At

Gold Mining

the present time there is only a little placer gold in Yukon and the Northwest Territories. There is no placer gold in northern Quebec or the Kirkland Lake section. It comes from solid rock, and many of the mines are operating today only by the skin of their teeth. The Hollinger mine, for instance, has always been working some very low grade ore, on which they pay very small dividends indeed. It is only because of the ingenuity of the men running these mines, their good management and the fine miners working in them that they have been able to keep in operation. What has happened to the base metals? What has happened even to silver? What has happened to cobalt and to aluminum?

The prices of those products have increased by twenty per cent, forty per cent, sixty per cent and in some cases by three hundred per cent. Gold production has remained absolutely stationary. This is a situation which cannot be tolerated much longer because gold production looms large in our national economy, as the member for Eglinton said so well a few moments ago. It has its beneficial effect in all streams of our Canadian life. It affects, beneficially, the cities of Toronto, Montreal and Vancouver, regardless of what the member for Comox-Alberni (Mr. Gibson) states. In our section we buy a lot of lumber from the hon. member's province, and we pay a great deal more for it than we used to pay. We are not complaining about that. The hon. member ought to realize what gold has meant to all sections of Canada, even the Yukon Territory, in the past, what it may mean in the future.

I have at least established this argument that gold is a metal which is not only being used as the yardstick for the monetary systems of most of the nations of the world, but it is a metal that the people generally throughout the world will accept, whether it be minted or in any other form. I recall that my grandfather had one of those heavy gold chains. I believe it was almost pure gold, twenty-four carat. It was an heirloom and he cherished it. If you try to buy one of those gold chains today, you will not be able to get it. Only a few days ago I was in one of the large jewelry shops in Ottawa. I was told by a responsible man in that shop that if they were allowed to buy gold and use it as they liked in jewelry they would buy hundreds of thousands of dollars' worth of gold. There is a reason for gold; there is a necessity for gold; there is a demand for gold. If there is a demand, it should follow the trend of other metals.

If there is no necessity for that yardstick in our monetary system, if the people do not request it, let us close the mines and forget about it. Then, you will have an immediate reaction because gold will always be a metal that not only carries glamour but has general acceptability. To illustrate to the Canadian people what it is worth in international transactions, I shall read a few sections of the Bretton Woods Agreements Act. Article IV, par values of currencies, section 8 dealing with maintenance of gold value of the fund's assets, reads:

The gold value of the fund's assets shall be maintained notwithstanding changes in the par or foreign exchange value of the currency of any member.

There, you see the thread of my argument. I am not speaking as a theorist because I participated in the discussion. A member of the Social Credit party was in attendance, and when that paragraph was mentioned it was agreed to by the member for Acadia (Mr. Quelch). I always listen to him with attention because he is well versed in the monetary systems, not only of Canada but of the world. Then, subsection (b) reads:

Whenever the par value of a member's currency is reduced, or the foreign exchange value of a member's currency has, in the opinion of the fund, depreciated to a significant extent within that member's territories, the member shall pay to the fund within a reasonable time an amount of its own currency equal to the reduction in the gold value of its currency held by the fund.

Again there is mention of gold there. It never disappears from that act.

Subsection (c) reads:

Whenever the par value of a member's currency is increased, the fund shall return to such member within a reasonable time an amount in its currency equal to the increase in the gold value of its currency held by the fund.

I shall not read at length, but I should like to cite one other section to show how important gold is considered. Article V, transactions with the fund, section 6, page 9 of the act reads:

Any member desiring to obtain, directly or indirectly, the currency of another member for gold shall, provided that it can do so with equal advantage, acquire it by the sale of gold to the fund.

Subsection (b) reads:

Nothing in this section shall be deemed to preclude any member from selling in any market gold newly produced from mines located within its territories.

Now, the terms of this subsection might seem to be ambiguous, but at the same time there is a good reason for it. This is not the time or place to discuss the reasons. I believe that these sections will prove to parliament that there is a necessity for maintaining the solidarity of something so basic

so far as the Bretton Woods fund is concerned, regardless of what some members say on that score. I agree with the member for Eglinton (Mr. Fleming) when he says that in the world of today gold should at least be twenty-five per cent of the currency used. There is no reason in the world why we should be denied a good price for gold because of this act. We are in a very difficult position so far as gold is concerned. I am no prophet, but I believe that if gold mining played as important a part in the economy of the United States as it does in Canada, the price of gold would have been increased quite a few years ago. South Africa and Canada are to a large extent dependent on gold and the largest producers, excluding Russia-we have no access there at the present time, although they have found it possible to unload a very large amount in recent years on the money markets of the world.

It should be within the orbit of the government, and within the power of this parliament, to tell the Bretton Woods management that it is unfair to Canada so far as the price of gold is concerned to have it pegged at the present price. I am not going to argue that point at any greater length. I believe I have shown parliament the necessity of getting a good price for our gold. I do not like subsidies. I believe I was interrupted by a C.C.F. member a year or two ago when I said I have always been against subsidies. What else can one do under circumstances of this nature? You are dealing with a metal which is, in certain circumstances, a commodity. It is used as the yardstick for the monetary systems of the world, but the price of gold has remained stationary, it has remained pegged. What would the western farmers say today if the price of wheat were the same as during the depression years? What would the lumber operators say if the price were the same as it was sixteen years ago? I would be the first one to get on my feet, under those circumstances, and speak in favour of the lumber industry and the farmers. The gold mining section of Canada is not prejudiced; we always take a national viewpoint. When I was home during the Easter recess I heard no criticism of the bonus that was paid to the western farmers. In fact, some said that we should have given them a little more.

I am making this plea because I know this situation. No one wants to see fine centres of population like Timmins closed up. I know that a large number of members have visited that section of the country. No one wants to see centres like Schumacher and

Gold Mining

South Porcupine closed and many towns in northern Quebec. The gold mining industry has established them and has established schools, good hospitals, and all the up-to-date necessary utility services. These centres have a fine, healthy, prosperous population- not so prosperous today, but it has been, and hopes to be again. *

Members may recall a few years ago there was a certain amount of colonization attempted in northern Quebec. When I was a young man going to school around 1900, I recall when the Canadian Pacific was built to North Bay. At that time it was thought that it was the extreme limit at which white people could live, according to the belief at that time. Today we are living four hundred miles from North Bay. In Hearst alone we have hundreds of people establishing themselves from year to year. You go into northern Quebec and you will find one of the finest colonization schemes. And how was it made possible? It was made possible not only because of the land and the forest, but because of the mines, copper and gold. No one wants to see that industry closed down. I know of the speeches that have been made here by the member for Lethbridge. Today the hon. member never said a word against gold, and I give him credit for that. He speaks as a Canadian. The leader of the party has been in our section, and he knows what a great factor gold mining is in our national economy. I also want to pay my compliments to the hon. member for Eglinton. I know that in his criticism he did not want to be unfair. He wanted to be constructive, because he also realizes the great importance that the gold mining industry is to Canada as a whole, and no one would want anything to happen to it. It is possible of solution. I do not believe in the open market.

No matter what we say, it is not only Bretton Woods that will stop us from selling on the open market. We must remember this. At the present time we may say that the United States is unfair to us; but when they increased the price of gold from $25 an ounce to $35 an ounce it was a marvellous thing for Canada. Every ounce of gold production was sent to the United States and paid for with United States dollars that we always needed. The same principle applies just as forcibly today. Every ounce of gold that is produced in Canada today finds its way to the United States, and there it helps us to balance Canadian dollars with United States dollars. Those are facts which we cannot forget in this country. To me it seems-I may be wrong-that you cannot bootleg against the United States treasury.

Gold Mining

We hear a lot of talk about South Africa selling their gold. I have several articles saying that in some places they get $62 an ounce for it. I think it is said that they get $62 an ounce in Calcutta, and at Hong Kong they get as much as $43.75 an ounce, and that in some sections of Europe they are getting $42.75 an ounce, and at other places they get $40 an ounce. But is that a steady market? Is that a permanent market? What kind of money will you receive in payment for that gold bullion, and who will do the collecting?

If we had an open market for gold I would not want the government to assume the role of collector. They have enough to collect at the present time. Who would try to collect for that gold? All these are things that we must be very careful of when we mention an increased price for gold.

We do not kowtow to the United States but it is fortunate for us to be their neighbour. How fortunate it is for Canada to have as a neighbour that great big friendly nation to the south of us. They have their faults, the same as we have. I have no doubt in my mind that when we present our case logically and justly we shall have as always a good listening ear and they will listen to what we have to say. I have no doubt they are beginning to realize at the present time- I think it may come in the very near future

that the price of gold must of necessity be increased. But until that is performed by the United States treasury then it is the duty of parliament to pass some legislation that will allow that fine industry to survive. I use the word "survive" deliberately, because anyone with any business acumen will readily understand the precarious position that that industry finds itself in at the present time when all metal production and all other production, whether of the farm, of the soil or of the forest, has increased in price, and we are in agreement with it, while the price of gold has been stabilized. The thing of necessity must receive the attention of the government on that score alone.

I come again to the Bretton Woods agreement, and I agree with the hon. member for Eglinton, although I know that as a member of the United Nations and as a signatory to the Bretton Woods agreement we must give up in some instances some of our national sovereignty. But I do not believe it was ever meant that sovereignty would be conducive to this, that this agreement would compel the gold producers of Canada to accept an arbitrary price at the dictation of the Bretton Woods agreement.

[Mr. Bradette.l

Again I repeat, if an increase in gold is needed under that monetary fund, then gold, being a metal, of necessity must follow the prices, or the trends of other metals. If it were a thing that you could find by the pocketful in some creek or a thing of that kind it would be different. No doubt the hon. member for Villeneuve (Mr. Dumas) will speak after me and will give the house some statistics as to the great efforts the gold mining industry this country has put forth, the inventiveness and the genius that they have employed to survive. We sometimes hear that we have some rich gold mines. There are some very high-grade gold mines in Canada. AVe have one or two of them in the Timmins section, like McIntyre, and there are one or two in the Kirkland Lake section. None of them is in the Quebec section, and none in the northwestern section of northern Ontario. The same applies to the Northwest Territories and to Canada as a whole. There is no bonanza anywhere so far as gold is concerned. They are able to exploit those mines now by ingenuity, by modern inventiveness, and by doing all that they possibly can they have been able to survive, hoping that they will have a better day, hoping that some day in the not too far distant future the nations will realize, the United States and no doubt the Bretton Woods agreement will realize, that if they want to maintain the fund as sound as they wish it to be they will have to increase the price of gold.

I should like some of the hon. members to visit some of the newer mines in northern Quebec, for instance, where they will see much machinery on the second floor of the buildings. They will hear its continual buzzing, purring and whirring, you may say. They will see those tremendous and great machines crushing enormous amounts of solid rock. They will ask themselves: Where is the manpower? They may see one, two, three men managing one whole floor. These mines have been able to survive because they have kept up to date; otherwise, they would have been buried under their own weight two or three years ago.

I have an appeal to make at the present time first of all to the national treasury, asking them to use all their influence to assist the gold mines, because the yardstick of gold must of necessity be maintained, and so that the Bretton Woods agreement will not have the right to dictate to our country what the price of gold should be.

Personally, I do not think that even in the United States an increase in the price of gold would be inflationary because my information is that the gold bullion that the United States had five, six or seven years ago is almost depleted at the present time, and there is no

doubt also that they will continue to buy it owing to the necessity and the urgency of maintaining their supply.

Some people may ask, why does the Canadian government not buy gold at $35 or $40 or more an ounce and issue their own currency. I believed, and I still believe it, when Mr. Ilsley announced in the House of Commons that the Canadian dollar would be placed on a parity with the United States dollar, that the Canadian dollar was the belle of the ball; it was the soundest money in the world. Whether it is possible for the government to do that, I leave the question with the treasury benches. It has been possible for the United States during the last twenty or twenty-five years to buy all the gold bullion in the world and pay for it with paper money. I want hon. members to realize there is a small margin so far as Canadian gold production is concerned between the selling price and the cost price. There is a very small profit. The profits have never been very high; and if it was possible for the United States treasury to pay for the gold- because they are good businessmen; there are too many hard-headed businessmen there not to realize the full value of gold-they did that for many years at the cost of billions of dollars in the United States money. If they were able to do that perhaps it may be possible in the meantime for the Canadian treasury to try and make an experiment in buying gold at, we will say, $5 or $10 more an ounce, because we must experiment and try new solutions. As the hon. member for Eglinton said a few moments ago, the measure we have before us is filling a gap. It is not a permanent solution.

I know in my section, and I know that every member of parliament who is familiar with gold production realizes this, we hope against hope that next week or next month, or next year or two years from now we will hear that the United States treasury is paying $40 or $45 an ounce. If that happens immediately you will see the northern sections of Canada flourishing because it will bring other mining activities. They are not only developing that industry in the search for gold. In their search the fine prospectors of Canada have found not only gold, they have found copper, and other metals. The Rouyn-Noranda mining industry in northern Quebec was found by gold prospectors. They could hardly believe their eyes when they saw these great formations of copper-almost solid copper. In those days the sale of copper was so low that they built up great dumps of it. But we know what happened to copper in the last six or seven years, and we know what the copper industry has meant to the whole of Canada.

Gold Mining

We would hope that within a reasonable period of time the price of gold might come into its own. We do not want an increase of 300 or 400 or even 100 per cent. We want only a reasonable increase in the price of gold. If that is done we will see those northern sections booming and coming into full fruition; there is no doubt about it. That will help every section of Canada. It will help the farmers in the west, the industrialists in the east, the lumber producers and industrialists in British Columbia. It will result in prosperity for all of Canada.

Let me again compliment those who have preceded me in the debate. There has been no acrimony. We all realize the seriousness of the situation in an industry which plays such a great role in the national economy of Canada.

Concluding my remarks, let me compliment again the Minister of Mines and Technical Surveys as well as the Canadian government and the Canadian parliament upon their open-mindedness so far as the gold-mining country is concerned. And if at the moment I speak on a matter of this kind, it is not because I have any personal interest. I am not a stockholder; but I have been in my constituency for the last forty-five years, and I realize the great part the gold-mining industry is playing in our Canadian life, and the great role it will be called upon to play in the future.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. E. D. Fulton (Kamloops):

Mr. Speaker, the subject before us this afternoon has been discussed on a basis which is the proper one upon which a debate like this should proceed, namely the interest of the nation. I should like to be able to emulate those who have preceded me in the knowledge they have displayed of the international issues concerned, but even though I may be unable to do that I hope I shall be able to emulate them in the high plane on which they placed their remarks, and in keeping the debate free from acrimony.

Before coming to the particular points I wish to make this afternoon I should like to associate myself to the full with what was said by the hon. member for Eglinton (Mr. Fleming) regarding the over-all view which should be taken respecting the position of the gold-mining industry in Canada, and particularly I would associate myself with that portion of his remarks in which he said he felt the time had come when we could no longer treat the gold-mining industry on a hand-to-mouth basis, but that its position in the national economy demands that its problems be regarded and dealt with on a long-term basis.

Gold Mining

I am not going to enter into the controversy referred to this afternoon as to whether an increase in the price of gold would mean inflation or whether it would help in the restoration of convertibility of currencies and therefore in the restoration of international trade in the world. I think, on balance, the probabilities are that the restoration of a free market for gold would do more to help than to hinder the free interchange of goods and the convertibility of currency. On balance, the evidence indicates also that a free market for gold or an increased price for gold would have more of a deflationary than an inflationary tendency.

But those are only opinions. I do not put them forward as expert opinions, because I do not regard myself as qualified to enter fully into those discussions, nor do I propose to pursue my remarks along those lines at greater length. However, I do think it is fair and also important to say that the policy suggested-and only suggested-by the hon. member for Eglinton, namely, a move in the direction of a free market for gold, which is a policy of which I should like to see further consideration, would have the effect of solving permanently the problem of the goldmining industry. It is to a permanent solution that, in my view, we must direct our minds. And it is particularly because I believe that the increasing of the price of gold or, if it should be found possible, the granting of a free market for gold, would provide a permanent solution of the problems of the gold-mining industry, that I support the investigation and the consideration of that question, which the hon. member urged the government should give at this time.

The position of the gold-mining industry was recognized by the minister this afternoon when he said that it was the search for gold which in large measure had resulted in the development of the great mining industry, covering many metals other than gold, which now occupies such an important place in the economy of our country.

Not only should the problem be approached from the point of view of the position of the gold-mining industry, but it is important to look at the position of the men who work in the mines. I do not approve of a policy of pleading special cases for special industries, because to make a special case of one industry or another generally creates more complications than it does benefits. The old adage is still true, that hard cases make bad law. But in respect of most industries- and I would not confine it to industries alone, but perhaps should include agriculture and every other type of occupation-in a normal and free economy it can be argued with

justification that those engaged in any particular pursuit take their own chances. No one forces them into a certain line of endeavour, and if they wish to go into it then, other things being equal, they must stand or fall by their decision and are not entitled constantly to come forward asking for special considerations. But the goldmining industry is one the actions and markets of which are not free, but which are closely circumscribed by governmental and international policy, which has set a definite price limit on the end product of those mines.

Gold is the only commodity which has not been decontrolled following the war. Never since the introduction of an official price for gold in recent years has that price been set free. True, it has been subject to adjustment; but the price of gold has never been decontrolled and it is the only commodity I can think of which has not at one time or another, following the end of the war in 1945, been decontrolled. So that the gold-mining industry is a special case. It is a case where the end product is controlled, but where all the articles entering into the cost of production are decontrolled. This industry is accordingly entitled to special consideration by the government and by parliament in virtue of its special position as a result of government policy. Whether that government policy be part of international policy or not, the result in so far as the gold mines of this country are concerned is the same.

We have an unusual situation here in that the men who are engaged in the industry, the men who are working in the mines, are asking for a higher price for the product of their industry. It is not very often that we find organized labour making a request for higher prices. Organized labour in the gold mines-as every other Canadian with average common sense must do-realizes that if the workers are to continue to receive a decent wage, a wage which compares with the wages in other industries not subject to this control, they must support the request that an adequate return to the industry in which they work be made possible so that their wages can be maintained at an adequate level and can compare favourably with the wages paid in other industry, particularly in other parts of the mining industry. We are therefore now in receipt of requests from the industry itself, from mining associations and from the men who work in the mines, through their unions, for a new policy with respect to gold.

I do not believe that the resolution stage on the bill is the time to enter into a discussion of the details of that policy. That might better be done when we are in committee on the resolution or perhaps best of all when we

have the bill before us. But I am justified in laying these considerations before the minister at this time by the fact that I have received a number of requests that the policy, in so far as it has been revealed through press releases, with respect to gold mining assistance, requires alteration if it is to meet the needs of the industry.

I think our best chance of getting an alteration in the policy is on the resolution stage before the bill is actually introduced. It is only from that aspect that I shall refer to the type of policy which it is suggested will solve the problem of the gold mining industry. It is not necessary for me to enter into details because these have already been adequately coveredi by the remarks of the hon. member for Eglinton (Mr. Fleming), the hon. member for Lethbridge (Mr. Blackmore) and the hon. member for Cochrane (Mr. Bradette). There are two alternatives that might be adopted in an effort to solve this problem, but one or other must be adopted in the interests of survival of the industry.

The first is a free market for gold. I believe that on balance the evidence which is before the house indicates that a free market for gold would have beneficial effects on international trade and the convertibility of currency. I realize, as do hon. members who have spoken, that there are many difficulties in the way of a free market for gold. Most of those difficulties revolve around the Bretton Woods agreement. But I believe that those difficulties can be faced, and if grasped can be dealt with and resolved satisfactorily. That is one possible solution to the problem of the gold mining industry.

But if that course is not adopted, then I believe that some further measures will be necessary beyond what are now contemplated by the government in the bill to be based on this resolution. A measure of further assistance will be necessary to enable the gold mines to continue to operate. I rest the justification for further assistance on the minister's own words in which he described the importance of the gold mining industry and the fact that the plight of this great industry has arisen as a result of governmental and international policy and not because of any action or lack of action by the industry itself.

In my constituency as it is now constituted is located the largest gold mine in British Columbia, the Bralorne mine, and also the Pioneer mine, another large operation. Those are the only two major producers in the constituency, but in the Bridge river valley in which they lie are a number of other mines. Some of these mines are virtually abandoned, but others are only temporarily

Gold Mining

closed and I understand would resume operations if the position of the industry were resolved favourably. There is thus a large gold mining industry, both actual and potential, in the constituency which I represent.

The mine unions, particularly the one at Bralorne, have made a number of requests and representations which I feel I should lay before the minister, asking that further assistance be given to the industry. They support the view that if it is not possible to resolve this problem by a free market for gold, then there should be a measure of assistance over and above what is now contemplated. I can assure you that the gold mining industry in British Columbia faces an acute problem and it is doubtful if it will be able to continue operations without a further measure of assistance.

The men who work in the mines are vitally affected by the continuance of operations. Their families and communities are at stake and they have asked that their requests be laid before the government. There has just come to my notice today a memorandum from the Mining Association of British Columbia with a covering letter dated April 2. I do not know whether the minister has seen this. They produce figures which seem to be accurate-there is a detailed tabulation attached to the memorandum-and which show that from the best reports available the program which the government intends to embody in the bill about to be presented will make less assistance available to the British Columbia gold mines than has been available in the past.

From the tabulation they present here it appears that the actual assistance received by the six leading mines in British Columbia under the gold mining assistance act during 1949 amounted to $907,000. It is estimated that under what is understood to be the proposed formula the assistance in 1951 will amount to $594,100, or a decrease of $313,300 in the assistance which these mines will receive. Then they go on to say as follows:

Because of wage increases granted during the past two years as well as substantial increases in the cost of supplies, equipment, and services, it is quite evident that the gold mines in British Columbia would, under the proposed new assistance formula, be much worse off during the ensuing year than at any time since emergency gold mining assistance was granted. Not only are costs higher for wages and supplies. The gold mines are subjected to an increasing disadvantage in competition for labour because of the unavoidable and growing discrepancy in wage rates. Competing sections of the mining industry are paying from $1.50 to $2.75 per day more for labour than the gold mines. Under these circumstances it is apparent that the gold mines in British Columbia will not be able to maintain production during 1951 at even the rate achieved during 1950, and there will be a consequent further reduction in assistance received.

Gold Mining

Then in conclusion they urge that:

. . . fullest consideration be given to this memorandum, and that the necessary steps be taken to provide for an immediate reconsideration of the proposed assistance formula,

I should say there that the reference to the position of the men who work in the mines and the wage rates paid in the gold mines of British Columbia is fully supported by the representations I have received from the Bralorne mine local concerning the "position in which they find themselves not only with respect to meeting their own costs of living but particularly in comparison with wage rates received in other parts of the mining industry in the province and in the rest of Canada. I believe there are some 6,000 actual workers engaged in the gold mining industry throughout the province at the present time. The house will realize that 6,000 men actually working in the mines means a good many more than that directly concerned as the families of these men. There are probably 18,000 persons, as a very rough estimate, in families directly dependent on employment in the gold mines. In addition of course there are the communities and service industries which have grown up and which are dependent themselves on the maintenance of these mines in prosperous and active condition. I mention that merely to emphasize the importance of this problem to the province of British Columbia.

In amplification and verification of that fact I should like to lay before the house the text of a resolution passed by the legislature of British Columbia yesterday dealing with the question of assistance to the gold mining industry. The legislature of British Columbia unanimously passed the following resolution:

Whereas the restricted price of gold is making it difficult for the gold mining industry of British Columbia to continue in operation, and whereas the gold mining industry in this province employs about 6,000 men who are located in such places that other employment is not available and on the continued employment of whom the existence of whole communities depends, and whereas the skill and experience of these men do not in many cases qualify them to find employment in defence industries so that a shut-down in the gold mines would result in much unemployment and hardship; therefore be it resolved that this house urge upon the dominion government the pressing necessity of taking such steps as may be requisite to ensure a price of gold which would keep the gold mines of the province in continuous operation.

That would verify, Mr. Speaker, if such verification be necessary, what I have said. I am quite certain that my colleagues from British Columbia will bear me out as to the importance of the problem to the economy of the province. The fact that the legislature of the province took the time, when they are engaged-as members who read the press well

know-in other very controversial issues, to pass a special resolution which received the unanimous support of all members of that house, indicates clearly to this house, the government and the minister concerned, the vital importance of the problem to our province.

Therefore on the basis of the representations received from the mine workers unions, the mining association, the communities affected, and lastly from the legislature oi the province of British Columbia, I would urge that even before the proposed bill is introduced the government's program and proposed solution for this problem should be re-examined in the light of these submissions.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Armand Dumas

Liberal

Mr. Armand Dumas (Villeneuve):

Gold Mining

I referred a few moments ago to a deposit found in northwestern Quebec. I am glad to say that this discovery was made by young Canadians from the constituency of my hon. friend from Chapleau (Mr. Gourd). In fact, the Leclerc brothers had gone to Barraute township looking for gold; but instead they found metals which are now of great importance to all of Canada.

So far, only a minute portion of that deposit has been explored, yet it has been proved to contain 17 million tons of commercial ore. A 5,000-ton mill will be built there very soon and this development will provide jobs for more than a thousand workers.

Are we to shut our eyes and imagine that this zinc was come upon through sheer luck? No, we must admit that this metal came tc light because of the hard work of the prospectors who found it in their feverish quest for gold.

Some people keep asking the government to shut down the gold mines. I believe those people do not realize all the hardships that might follow such a step.

What would happen if the government decided to shut down the gold mines? It is easy to say that gold miners could be put to work in other metal-bearing areas; but when we see towns organized mainly by mine-workers, I believe we would have to think twice before we could say that those people could be moved easily. But I do not want to labour the point. Canada is destined to become the principal world purveyor of a wide range of metals. Our mining industry has meant a lot to us in the past, and will mean even more in the future.

Another very important factor to keep in mind is that the metal-bearing mines of Canada give employment to more than 112,000 men, including 23,000 who work in gold mines, and have more than 500,000 dependents. Every year these people buy farm products to the substantial amount of $65 million. I have no ulterior motive in mentioning that particular figure, although it has been mentioned quite frequently of late. Every year our mining towns and villages buy $150 million worth of articles of clothing, blankets, furniture, et cetera. In considering that amount, we readily realize what it means for the manufacturing centres of the country.

(Text):

Now, Mr. Speaker, these substantial amounts which I have mentioned do not include other supplies such as lumber, machinery, electrical equipment and hundreds of similar products. Goods purchased in these categories during 1948 amounted to $151-5 millions. With your permission, sir, I should like to read into the record a list of those products and their value. The list is as follows: Tools and machinery, $16

million; mine cars and locomotives, $1-8 million; other iron and steel products, $16-7 million; reagents and chemicals, $5 [DOT] 2 million; coal and coke, $15-4 million; petroleum products, $4-4 million; rubber products, $1-3 million; building products, $3-2 million; lumber and timber, $8-8 million; electrical equipment, $7 million; air-operated equipment, $3-2 million; explosives, $6-8 million; hydroelectric power, $9-9 million; freight and express, $31 million; miscellaneous, $20-8 million. These figures are furnished by the Canadian Metal Mining Association. As I have already said, during the year 1948 Canadian mines bought products to the value of $151 million, which represents thirty cents out of every dollar of revenue. In addition to purchases in the communities which are closely related to the mines, Canadian mines bought in over five hundred other communities all across Canada.

The figures to which I have just referred do not include capital expenditure. Even if we consider only two of the new mines which were recently put into production, this represents a substantial amount. For instance, the capital expenditure for Campbell Red Lake before production amounted to $3 million and for East Sullivan mines amounted to $5-5 million. I believe we should^ stress that point. After hearing hon. members I realize that we shall not have too much trouble in putting our point to them this afternoon. Everyone seems to understand the difficult situation in which our mines find themselves today. If I make mention of the base metal mines, it is only because our gold mines are closely related to all other mines. The search for gold is responsible for the finding of many base metals.

In 1948 the Canadian government realized the difficulty in which the gold mines were, and they enacted the Emergency Gold Mining Assistance Act. This act has been amended, and today we are called upon to amend it again in order to change the formula

and so on. We all realize that the government knows this is not a true solution. I have taken note of what the minister has said, that we have certain responsibilities towards international agreements and we have to observe those agreements. I accept his word for that. We are taking the onlyway we can to accomplish our purpose.

I realize it is not possible for the government to break abruptly from the monetary fund, but I do hope that the government will find it possible to break away from this monetary fund. I believe that the Canadian government would be justified in paying higher prices for gold. It may not be possible right now, but I think it should be possible in the near future. If the United States could buy gold at $35 fifteen years ago, I should think that today, realizing the rise in the price of all commodities and wages, the Canadian government should see its way clear to asking a higher price for the gold. I think that is the true solution. If we believe we should stop the hoarding of gold, then the free market is not the solution because then we would be partners to such hoarding. I believe that the Canadian government is the one who should try to sell our gold at as high a price as we can get for it.

We have this resolution before us. We know that this act has been of benefit to the industry since it was enacted in 1948. It has helped many communities, it has helped the employees and the mines. Naturally, we hope that it will continue to do so. I am afraid that with rising prices the mines will have difficulty in keeping their costs down to avoid getting in the red. I shall support this resolution. I am very happy that it has been presented to the house today. From what we have heard, I believe it has the support of the whole house.

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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LIB

Elie Beauregard (Speaker of the Senate)

Liberal

Mr. Speaker:

Is it the pleasure of the house to adopt the motion?

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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CCF

Herbert Wilfred Herridge

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

Mr. Herridge:

I had hoped to speak this afternoon, but to facilitate the passage of the resolution, I shall leave my remarks until second reading.

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

Topic:   EMERGENCY GOLD MINING ASSISTANCE ACT
Subtopic:   MODIFICATION OF APPLICATION AS TO LAST QUARTER OF 1950 AND EXTENSION IN MODIFIED FORM TO 1951
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April 6, 1951