May 1, 1951

SUPPLEMENTARY ESTIMATES, 1951-52


A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1952, was presented by Hon. Douglas Abbott (Minister of Finance) and read by Mr. Speaker to the house.


LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Hon. Douglas Abbott (Minister of Finance):

Mr. Speaker, this special supplementary estimate is for an item of $2 million to provide assistance to unemployable veterans who are in receipt of disability pensions under the Pension Act. Ordinarily I would make the formal motion that it be referred to the committee of supply, but since this estimate, together with other matters respecting veterans, is to be considered by the veterans affairs committee, I move instead:

That the message of His Excellency, together with the estimates presented this day. be referred to the special committee on veterans affairs, saving always the powers of the committee of supply in relation to the voting of public moneys.

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Motion agreed to.


COLLECTION OF MONEY TO PROVIDE HOLIDAY FOR PAGE BOYS

LIB

Daniel (Dan) McIvor

Liberal

Mr. Daniel Mclvor (Fort William):

Mr. Speaker, on a question of privilege, I want to thank hon. members of the house, members of the press gallery and a number of the elevator operators for the cheerful and generous response to the suggestion that the page boys be given a holiday. I apologize for not having got in touch with everybody yet, but the door is still open.

I will turn over to the Sergeant-at-Arms the list of donors, with what they have given. Your donations of a dollar or more must not prejudice the bonus for the page boys at the end of the session. The mayor of Montreal has telephoned an invitation, and he will show the boys the big things in his city. I suggest that next year the bachelors of the House of Commons should provide a trip for the stenographers.

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RAILWAYS AND SHIPPING


Fourth report of special committee on railways and shipping owned, operated and controlled by the government.-Mr. Cleaver.


NEWFOUNDLAND

LEASED BASES AGREEMENT-RECOMMENDATION OF PERMANENT JOINT BOARD ON DEFENCE

LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Right Hon. L. S. St. Laurent (Prime Minister):

Referring again to the question raised last week by the hon. member for Trinity-Conception (Mr. Stick), I now have a statement relating to the United States leased bases in Newfoundland, about which the permanent joint board on defence has made certain recommendations. I apologize in advance for the length of the statement, but I think it is a matter of general interest to all members of the house.

In March, 1941, as hon. members will recall, the United Kingdom leased to the United States for ninety-nine years land for naval and air bases in several colonies and territories including Newfoundland. This leased bases agreement empowered the United States to establish and operate naval and air bases, and also provided extensive rights and privileges for the United States forces to be stationed at these bases. These rights related to such things as the jurisdiction of courts, customs and excise taxes, income tax, and military postal facilities. Pursuant to this agreement the United States established and still maintains four bases in Newfoundland. These are: Pepperell air force base near St. John's; Harmon air force base near Stephen-ville; McAndrew air force base at Argentia; the naval operating base at Argentia.

On February 10, 1949, in the course of the debate on union with Newfoundland, I made a reference to these leased bases. It might be useful if I repeated what I said then. It is as follows:

If and when Newfoundland becomes a part of Canada, those leases will still be valid leases affecting the lands described in them. They contain provisions which go beyond the provisions to which the Canadian government has agreed with respect to anything done by the United States government in the territory of Canada, and we hope that it will be possible to get the government of the United States to agree that it will not exercise those rights in a manner that would offend against our rights of sovereignty in Newfoundland. But that is something that will have to be brought about by negotiation and agreement with the government of the United States. The situation is the same as if the hon. member, having a farm. leased a building lot on it for ninety-nine years and then sold his farm. The acquirer would have to take the farm and respect the agreement the hon. member had made with regard to the building lot. But he could go to the man who had the lease on the building lot and try to make a new deal with him. That is

Leased Bases in Newfoundland what we intend to try to do with the government of the United States. But if they are not disposed to make any change in the arrangement, we shall be obliged to respect the rights that exist there, just as we shall be obliged to respect as a fact the existing situation in the territory of Newfoundland.

Before the union with Newfoundland we informed the United States government that the Canadian government hoped the United States would consider relinquishing some of the extraterritorial rights conferred by the 1941 agreement on United States forces in Newfoundland. The Canadian request said, in part:

In the opinion of the Canadian government the prospective change in the status of Newfoundland justifies a modification of the 1941 bases agreement in respect of the Newfoundland bases in order to bring that agreement into accord with the principles which, for many years, have governed the defence relations between Canada and the United States.

Thus the joint statement issued by the Prime Minister of Canada and the President of the United States on February 12, 1947, refers to the "underlying principle" that " all co-operative arrangements will be without impairment of the control of either country over all activities in its territory," and the recommendation of November 20, 1946, of the permanent joint board on defence, which has been accepted by both governments, states that defence co-operation projects in either country should be agreed to by both governments, should confer no permanent rights or status upon either country, and should be without prejudice to the sovereignty of either country.

In seeking the modification of provisions of the lease, the Canadian government recognized, as I have indicated, that we were asking the United States to give up legal rights of undoubted validity. As is customary in our discussions with the United States, the request was considered by the United States authorities on a higher plane than the plane of strict legality.

Our two governments decided to ask the permanent joint board on defence to examine and report on the Canadian request. The board undertook an exhaustive study of the complex questions involved, and the United States members, on behalf of their government, co-operated in a spirit of friendship in the search for a solution.

In March 1950 the board formulated a recommendation which has now been officially approved by both governments. This approval, which it is proposed to incorporate in an exchange of notes, will constitute a modification of the leased bases agreement. I am sure that all hon. members will share the appreciation felt by the government of the decision of the United States to give up voluntarily certain rights which were legally conferred for ninety-nine years by the 1941 agreement, before Newfoundland became a province of Canada. .

TMr. St. Laurent.]

The recommendation of the joint board is in four parts which relate to income tax, customs and excise, postal privileges and the jurisdiction of the courts. I shall now table the recommendation and give a brief explanation of the effect of each part.

First: Income tax. On June 12, 1950, a new double taxation convention between Canada and the United States was signed. It has been approved by the parliament of Canada but is awaiting ratification in the United States. When it comes into force it will replace certain exemption provisions now in the bases agreement. In addition the board recommends that the United States waive the exemptions given by the bases agreement on contractors' 'profits, on United States civilian employees of such contractors and on the families of these employees. This part of the recommendation will place income tax exemptions of United States personnel in Newfoundland on the same basis as in the rest of Canada.

Second: Customs and excise. The United States will also waive duty and tax exemptions given by the bases agreement on:

(a) contractor-owned equipment; (b) personal belongings and household effects of contractors and their United States employees other than on first arrival, and (c) individual purchases in Canada by United States personnel.

Customs and excise exemptions for post exchanges and service clubs will continue, it being understood that the United States authorities will endeavour to increase purchases for these institutions in Canada and will take special steps to prevent abuse of privileges continued under the agreement.

Third: Postal privileges. Originally Canada asked for replacement of United States military postal facilities by Canadian post offices. Although the United States authorities were not prepared to accede fully to this request, under the board's recommendation the United States will not establish normal civilian postal offices and will limit the use of their army post office system strictly to mail destined to United States territory or to other United States army post offices.

Fourth: Jurisdiction of the courts. This part of the recommendation covers four matters:

(i) The United States waives all rights of jurisdiction, permitted under the bases agreement, over British subjects and over aliens other than United States citizens;

(ii) The United States suspends for five years exercise of rights of jurisdiction over United States civilian personnel and all other rights conferred by article IV of the bases

agreement, subject to revival on notice thereafter or in event of war or other emergency;

(iii) The Canadian government will seek to amend the Visiting Forces (United States of America) Act to permit of compulsory attendance of witnesses at United States courts-martial;

(iv) The Canadian government will seek legislation to protect security interests of the United States forces in Canada, as required under the bases agreement.

The recommendation that the United States give up or suspend jurisdictional rights under article IV of the bases agreement is conditional upon the Canadian government, with the concurrence of the Newfoundland government, giving to the United States government assurances that the new arrangements will in practice give United States officials in Newfoundland a degree of jurisdiction comparable to that which they have in fact exercised up to now. The attorney general of Newfoundland has been consulted and he advises that there will be no difficulty about giving these assurances because, in fact, the United States officials have exercised in a reasonable manner their jurisdictional rights under the bases agreement. They have not, for example, attempted to exercise the jurisdiction over Canadian citizens which the bases agreement gave them.

What the condition and the assurances mean is that, in practice, members of the United States forces in Newfoundland will generally be dealt with by United States service courts, which is a reasonable and sensible arrangement in the circumstances. Corresponding treatment is in fact given to Canadian forces which may be stationed from time to time in the United States.

The board's recommendation will provide the occasion for the extension of the Visiting Forces (United States of America) Act as revised to Newfoundland and remove what is perhaps the most objectionable feature of the bases agreement, namely, the right of jurisdiction by United States courts over Canadian citizens.

Referring to the recommendation as a whole, it meets most of the specific requests which the Canadian government originally put forward. Obviously a negotiation of this kind required a willingness on both sides to give and take. In the view of the Canadian government, the recommendation removes the features, most objectionable to us, of the taxation and jurisdictional rights conferred by the leased bases agreement.

Leased Bases in Newfoundland

The government will in due course be making to the house five legislative proposals flowing in whole or part from the recommendation.

In connection with the customs tariff it has already been proposed, in the budget speech, that item No. 708 of the customs tariff should be revised. At present it deals with customs privileges for the United Kingdom government only.

In connection with military post offices, an enabling clause will be included in the proposed bill to amend the Post Office Act.

In connection with the recommendation for security legislation, there will be two measures. First, a bill along the lines of the Official Secrets Act is proposed for the protection of allied governments. Second, a new section in the Criminal Code for the protection of property of allied forces is also under consideration.

It is proposed to add to the Visiting Forces (United States of America) Act a new section under which the governor in council would have authority to provide by regulation for compulsory attendance of witnesses before United States courts-martial, in the same manner as now applies to courts-martial of the Canadian forces. This amendment will, for convenience, be included in a Canadian forces bill which will deal with a number of other subjects related to defence.

Of the five proposed legislative measures, only one will refer expressly to United States forces, and that is the amendment to the Visiting Forces (United States of America) Act. When the time comes to examine the other four it will, I think, be agreed that, quite apart from the recommendation of the permanent joint board on defence, they are useful and possibly necessary measures to enable Canada to discharge obligations under the North Atlantic treaty.

The government believes that on consideration, hon. members will agree that the solution which has been recommended by the board is a reasonable compromise in an admittedly unprecedented situation.

Perhaps it may suit the convenience of the house if these recommendations I am tabling were printed as an appendix to Hansard today, so that hon. members will see the exact text.

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?

Some hon. Members:

Agreed.

(For text of recommendations of permanent joint board on defence, see appendix, page 2601.)

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. George A. Drew (Leader of ihe Opposition):

Mr. Speaker, I am sure the

Leased Bases in Newfoundland members of the house will echo the hope expressed by the Prime Minister (Mr. St. Laurent), that on consideration they will find this is a reasonable arrangement in regard to the leased bases which were taken over under agreement by the United States prior to the time that Newfoundland came into confederation. As I was not previously aware of any of the arrangements that had been made, I shall of course require to give that consideration, as will other hon. members. There are, however, one or two observations I should like to make at this point, in view of the comprehensive statement the Prime Minister has made.

I notice that the arrangement with respect to jurisdiction, which the Prime Minister has stated to be the most important subject under consideration, provides that the United States give up or suspend certain jurisdictional rights, but that is conditional upon their being able to exercise in practice, even if not in strict verbal legality, the same authority that they exercised before. This seems to be giving with one hand and taking away with the other. I am interested in why it is necessary to go through such substantial formality if in practice the situation in that respect is to remain the same.

There is one thing about which I am sure all hon. members will be in hearty agreement, and that is that the Canadian government found it easy to deal with the government of the United States on a friendly basis and were not being shoved around. There has been some concern aroused in the minds of the members by things said outside of this house, if not in the house, as to whether we are still operating on a friendly and democratic basis with the government of the United States. This statement by the Prime Minister will reassure the members, and in the proper place, that it is now, as it has been in the past, easy to deal on a friendly and satisfactory basis with the government of the country which geographically is closest to us, and whose destiny in the years to come is inseparably linked with ours. The statement that this required a willingness on both sides to give and take merely indicates the firm foundation on which agreements of this kind are and should be established.

The Prime Minister has pointed out that one of the legislative provisions contemplated as a result of this arrangement is an amendment to the Criminal Code for the purpose of extending a greater measure of security to the forces of the United States. He has indicated that it will likely take the form of a provision which is to give a special measure of protection to the forces of any

allied country. In making that announcement he has emphasized the vitally important position that the new province of Newfoundland now occupies, not only in the defence of Canada but in the defence of the whole North American continent, and, as a result in the defence of freedom itself. No matter whether all the details of this agreement may be found entirely satisfactory after examination by those who live in Newfoundland and by other members of this house, certainly every one of us will hope that this agreement, in itself, may be regarded as a symbol of that firm and strong unity of purpose between these two countries, which is not only an advantage to ourselves but an advantage to the people of the whole world in these critical days.

I hope that the very necessity for introducing an amendment to the Criminal Code to increase the security of the allied forces will suggest to the Minister of Justice (Mr. Garson) the advisability of bringing in the long-required amendment to the Criminal Code which will make it possible to deal with any kind of threat to security by communist activities, whether in Newfoundland or any other place in Canada. This agreement in itself suggests the desirability of recognizing the constant threat presented to the defence of this country, and of every other country, by men who are serving a foreign state with the purpose of destroying our democracy by every device available. Most certainly they will seek, if it is within their power, to weaken this strong bastion of defence. Therefore, in view of the fact that there is to be an amendment to the Criminal Code for security of another kind, I once again strongly urge the consideration of that other type of security which would deal with this particular form of crime in a way that it cannot be dealt with' under any provision in the Criminal Code which is now on the statute book.

In view of the importance of this announcement, I hope that the Prime Minister will be prepared to answer questions which may be presented by hon. members from Newfoundland, amplifying the information that we have received this afternoon.

Topic:   NEWFOUNDLAND
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LIB

Leonard T. Stick

Liberal

Mr. L. T. Stick (Trinity-Conception):

Mr. Speaker, as I raised this question first with the Prime Minister (Mr. St. Laurent), I should like to say to this house that we in Newfoundland have to live with these Americans down there, that we have found them to be fine people to live with, and that our relations with them have been on the most cordial basis. It is a matter of satisfaction to have such a statement as that which has been given by the Prime Minister, showing

that the negotiations were carried on in the most cordial and friendly manner. That is a matter of satisfaction to us in Newfoundland, and I should like to thank the Prime Minister for his full and explanatory statement.

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PC

Gordon Francis Higgins

Progressive Conservative

Mr. G. F. Higgins (Si. John's East):

Mr. Speaker, I should like to echo the sentiments expressed by the hon. member for Trinity-Conception (Mr. Stick) and, if the Prime Minister (Mr. St. Laurent) does not mind, I have two questions that I should like to ask at this time in connection with his statement, for purposes of clarification.

The Prime Minister referred to the jurisdiction of the courts. In that connection, I wonder if there is any difference in the position from what it has been in the past few years. In other words, if action is taken against a United States soldier for negligence -we will say, for instance, in connection with driving a motorcar, even when he is on United States forces duty; if judgment is obtained against him, the only recourse open to the individual who suffers the damage is to claim against the soldier himself, and not against the United States government as such. That is one point I should like to ask about. Has there been any clarification in that connection?

The other point is this. What is to be the situation with respect to the use of Goose Bay and Gander airports? They are not within the leased areas, but United States forces are there in great numbers at Goose. Are they to be included in the agreement as well? What is to be the situation at Gander? Then I believe there is to be an amendment to the Income Tax Act. What will be the position of United States nationals at Gander, say, in the employ of the air lines? Will they come within the provisions of this income tax amendment or otherwise, or what is to be the position?

Then the other question is one that was up before: in the event of war, what is to be the position with respect to the commanding of the forces in Newfoundland? Will the commander be a Canadian general or a United States general? Is there any change in the right to the United States forces to acquire other properties in Newfoundland if they require them? As provided in the bases agreement, they can take what properties they want in the event of war. Will that provision still be in force? Has any discussion taken place with respect to the use by Canadian vessels of docking facilities at St. John's and Argentia9 I refer to the use of

80709-163J

1* 1951 2553

Commonwealth Division in Korea United States army docking facilities by Canadian vessels. Has any discussion taken place-

Topic:   NEWFOUNDLAND
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?

Some hon. Members:

Oh, oh.

Topic:   NEWFOUNDLAND
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PC

Gordon Francis Higgins

Progressive Conservative

Mr. Higgins:

This is the last question, Mr. Speaker.

Topic:   NEWFOUNDLAND
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Order.

Topic:   NEWFOUNDLAND
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PC

Gordon Francis Higgins

Progressive Conservative

Mr. Higgins:

I think I am in order, Mr. Speaker.

Topic:   NEWFOUNDLAND
Subtopic:   LEASED BASES AGREEMENT-RECOMMENDATION OF PERMANENT JOINT BOARD ON DEFENCE
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?

Some hon. Members:

No.

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May 1, 1951