March 16, 1954

CCF

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

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

Mr. Knowles:

But in all cases, at one stage or another, it will be provided that parliament will have a chance to approve of the item in question?

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Finance)

Liberal Labour

Mr. Benidickson:

The hon. member will know that parliament voted for the expenditure for the property in the first instance. Parliament annually would have voted a certain grant to a department for certain general purposes. If that sum was inadequate to take care of a replacement as the result of destruction of property, then this fund could be utilized if there was an urgency for replacement of the property within a period of, we will say, twelve months as a maximum, when parliament would not be available. But certainly if those resources were not available, then in the next session of parliament there would be a new vote which would be charged to the department concerned. Then the fund would have credited back the equivalent in money, as voted by parliament.

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
CCF

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

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

Mr. Knowles:

I take it that it will not be necessary for the fund to have further moneys voted to it, apart from these moneys that replace the amounts spent? In other words, $5 million is the ceiling on this fund?

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Finance)

Liberal Labour

Mr. Benidickson:

That is the maximum.

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
SC

Ernest George Hansell

Social Credit

Mr. Hansell:

We in this group have talked over the resolution. As we know, very often there are more details than meet the eye. It would seem from the resolution that the government is setting up a fund of $5 million to replace losses by fire of any government property, such losses to be returned to the fund at a later time through a vote by parliament, so the government would not be delayed in the replacement of the damage. That is what I understand about it. When the bill is introduced there may be other details that we do not know about.

Since we are at the resolution stage may I ask the parliamentary assistant this question, because a principle is involved here. Is it expected that the government may have to do more than meet the fire loss, we will say, in a certain project? Let me put before the parliamentary assistant a specific but

hypothetical case. Suppose a building worth $100,000 is completely destroyed by fire. Would the government assume the authority under this legislation to erect another building worth $2 million or $3 million, and instead of erecting it at the same location on Wellington street decide to put the building in some other place, even in Montreal?

That is an extreme case, and the parliamentary assistant will rise and say it is not probable that it could happen. I fancy that what we are really doing-and I am not saying we are not in favour of the resolution-is giving the government authority to replace losses even to the extent of rebuilding a project without our knowing what the project may be, or seeing the plans, or even being able to ask questions about the contract. Really that is what I envisage in this as a danger. I am not saying the government would do it. Perhaps they would bring about a serious filibuster at the next session of parliament if they did it; nevertheless I am under the impression that it could be done. Can the parliamentary assistant throw any light on that?

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Finance)

Liberal Labour

Mr. Benidickson:

I appreciate the implication in the remarks of the hon. member for Macleod. He will also appreciate, of course, that legislation has to be reasonably elastic; and when we speak in terms of replacement of property I think he will understand that draftsmen for this type of legislation would likely provide that we would not be restricted by a limitation that would mean we would have only an expenditure equivalent to the original cost.

Hon. members will very quickly understand that if it were applicable to a building erected some 25 or 50 years ago the replacement value today would be very much greater than the cost of construction 25 years ago. My feeling is that in drafting a bill one would have to allow a certain amount of freedom in this respect. On the other hand, I would imagine that in examining the use of legislation of this type the official who is responsible to this house, the Auditor General, would doubtless draw to the attention of the house any very great departure from the intent as laid down by the particular act.

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
CCF

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

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

Mr. Knowles:

Any departure at all.

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Finance)

Liberal Labour

Mr. Benidickson:

Any departure at all, probably, even without taking into calculation the inflated costs of replacement, of something that was constructed 25 years ago and had to be replaced as the result of a fire, let us say, in the current year.

Export and Import Permits Act

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
CCF

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

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

Mr. Knowles:

One other question. There are three significant words here: "lost,

destroyed or damaged". Do the words "through fire" qualify all three of those words?

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Finance)

Liberal Labour

Mr. Benidickson:

I had not particularly studied that phrasing, Mr. Chairman, but having regard to the title of the bill, the introduction of the bill and the general phrasing I would think that "fire" is the governing word.

Resolution reported, read the second time and concurred in.

Mr. Chevrier (for Mr. Abbott) thereupon moved for leave to introduce Bill No. 377, to establish an account for the replacement of government property lost, destroyed or damaged through fire.

Motion agreed to and bill read the first time.

Topic:   CONSOLIDATED REVENUE FUND
Subtopic:   ESTABLISHMENT OF ACCOUNT FOR REPLACEMENT OF GOVERNMENT PROPERTY
Permalink

EXPORT AND IMPORT PERMITS ACT

EXTENSION OF CONTROL OF STRATEGIC MATERIALS

LIB

Lionel Chevrier (Minister of Transport)

Liberal

Hon. Lionel Chevrier (for the Minister of Trade and Commerce) moved

the second reading of Bill No. 374, to control export and import of strategic materials.

Topic:   EXPORT AND IMPORT PERMITS ACT
Subtopic:   EXTENSION OF CONTROL OF STRATEGIC MATERIALS
Permalink
LIB

John Horace Dickey (Parliamentary Assistant to the Minister of Defence Production)

Liberal

Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Defence Production):

Mr. Speaker, it had been hoped that the house might have been able to deal with the second reading of this bill today, but I understand that it better meets the convenience of hon. members if second reading is simply called now and a statement is made with respect to the provisions of the bill which will amend and re-enact the Export and Import Permits Act.

The position is that the present Export and Import Permits Act will expire on the 31st day of July of this year. The bill now before the house will provide continuing authority for control over exports and imports for certain purposes. As regards exports, the purposes of control will be found set out in clause 3 of the bill; and as regards imports, in clause 5.

The scope of this bill is very similar to that of the present act, but there has been a marked change in the emphasis to be attached to some of its purposes. In the exercise of export control supply reasons or purposes have become relatively less important, and strategic purposes relatively more so.

The main changes sought under this bill as compared with the present act are intended to improve our system of control over the export of strategic materials. Control

Export and Import Permits Act over the movement of strategic materials is an international problem requiring a great deal of international co-operation. By a United Nations resolution Canada is committed to the embargo of the shipment of arms, ammunition and military material to communist China. Again we have an understanding with the United States by which we enjoy freedom on our own behalf from the operation of their export control, but we in turn undertake to control the re-export of United States goods from Canada to overseas destinations.

Along with the United States, the United Kingdom and most of our NATO allies, Canada seeks to promote uniformity in the list of commodities that are kept under control by each participating country. I mention these instances particularly because they serve to illustrate the ramifications of effective control in this field which bear directly on some of the provisions of this bill. Our chief problem is not in controlling the initial export of strategic materials from Canada but rather in following our control through to ensure that the goods are not diverted in transit to destinations that we have not approved.

There is no simple answer to the question, "What are strategic materials?" Obviously these include arms, ammunition and implements of war. They include also raw materials such as non-ferrous metals, minerals and chemicals in primary or manufactured forms; in fact, any product which has a significant usage in defence industries might be classed as strategic. Examples among the raw materials would be nickel, copper, lead, aluminum, asbestos-at least the spinning grades-and high-grade abrasives. In equipment, the list would include automatic machine tools, large generators and turbines, chemical plant and aircraft. With the powers provided under this bill we will make some changes in the present pattern of our export controls, and it is the intention to publish at an early date a schedule of what we generally regard as strategic materials so there need be no uncertainty in traders' minds.

Decisions to include or exclude items in the list of controlled commodities are made in consultation with other governments. These lists are under continual review by an international co-ordinating committee. There would be no point in our denying ourselves a market for machinery, for instance, which another country stood ready to exploit. There is no purpose either in our denying direct shipments of commodities such as nickel or aluminum if other countries are unwilling or unable to safeguard their re-exports of such materials received from Canada.

I believe that the basic machinery of our export control is well known to hon. members. Anyone seeing the permit application form would immediately grasp the essential facts. The exporter or his agent must be the applicant; the goods must be precisely described; quantity and value must be shown; any substantial United States content must be disclosed; the port of exit must be given; the country of ultimate destination must be named. The permit itself has to be surrendered to the customs officer clearing the export of any shipment, who holds a duplicate copy for checking purposes which is supplied directly to him by the Department of Trade and Commerce.

This procedure was adequate by itself when control of exports was intended solely to conserve supplies. Later it became necessary to institute import certification and delivery verification as we became more concerned with ensuring delivery to the specified destinations of our strategic materials. This procedure has been of special benefit in establishing the bona fides of the foreign importer where he is otherwise known to us only as a casual customer. Further steps may still be necessary to make it more difficult for unreliable operators to arrange diversion of goods in major transfer ports.

This is a more serious problem for European countries with a large entrepot trade, but we ourselves have to be equally careful of the business conducted through Canada, particularly that from United States sources. Moreover, we have always the responsibility that Canada shall not be used as a base for the type of trader in small arms and ammunition whose activities need to be closely watched.

Normally, diversion of a shipment is only possible after it has passed through customs in the export country and before it has reached the hands of the importer at its proper destination. Diversion occurs by cargo being rerouted on land or remanifested aboard ship, by transshipment in part, by reshipment from bonded warehouse, and in extreme cases by re-export from the importing country. At some point, therefore, new or altered instructions have to be given to the carrier or the holder of the goods. That act must be made illegal if it is committed knowingly and with illegal purpose or effect.

It is our purpose to work toward a minimum list of commodities under control but a maximum effectiveness of the machinery of control itself. In the past we have lifted export control from commodities as soon as conditions permitted. We have reduced the list of commodities controlled from 407 in 1948 to 184 in 1953. The number of licences

issued has fallen from 113,094 in 1948 to 26,635 in 1953, although the volume and value of our external trade in that period has expanded immensely. This shows how greatly the incidence of the controls has been reduced as regards what may be called normal trade.

We intend immediately to reduce the list of countries covered by our area control list. This means that, with the improved provisions of this bill relating to the control of intransit diversions, we shall be able to relax the licensing requirements on shipments to almost all countries outside the Soviet bloc. With more effective means enabling us to better control back-door exports of United States goods via Canada we shall be able to de-list some commodities which we do not produce or which we do not classify as strategic in the forms in which they are available in Canada and from Canadian sources. Our over-all objective is the same as it always has been, to limit the control of exports to the essential minimum.

Apart from strategic controls, we still have export controls for supply reasons on a very short list of products and, of course, atomic materials remain under strict export control.

The provisions of this bill, Mr. Speaker, with regard to the control of imports, differ

16, 1954

Export and Import Permits Act from those in the existing act only in that the purposes for which import control may be exercised, as set out in section 5, include specific authority "to implement an intergovernmental arrangement or commitment." This change is being made to define more clearly the power that is required from time to time to carry out arrangements with other countries, particularly with the United States. It is preferable on occasion that we control our imports at the request of the United States, rather than leave it to the United States to impose export controls on shipments to Canada. The wisdom of this course has, I believe, been well proven over a period of years.

On motion of Mr. Bell the debate was adjourned.

Topic:   EXPORT AND IMPORT PERMITS ACT
Subtopic:   EXTENSION OF CONTROL OF STRATEGIC MATERIALS
Permalink

BUSINESS OF THE HOUSE

LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. Chevrier:

Mr. Speaker, tomorrow we shall take second reading of the Emergency Gold Mining Assistance Act; second reading of the Export and Import Permits Act; and if there is any time left we shall consider once again the Criminal Code.

On motion of Mr. Chevrier the house adjourned at 9.55 p.m.

Wednesday, March 17, 1954

Topic:   BUSINESS OF THE HOUSE
Permalink

March 16, 1954