April 11, 1957


AFTER RECESS The committee resumed at eight o'clock.


PC

Harry Oliver White

Progressive Conservative

Mr. White (Middlesex East):

Mr. Chairman, I rise to take part in this debate on the resolution in which the government is asking for supply. It seems to bring to my mind my boyhood days when my father used to say to me, "What did you do with the last five dollars I gave you?" That is fairly well the question we are going to ask the government, namely "What did you do with all the money we gave you last time?" We shall try to bring them to account.

I just wanted to comment on the speech made by the hon. member for Mackenzie who immediately preceded me. It was one of the type made by those who belong to a group which never in the foreseeable future will be called upon to form a government.

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CCF

Thomas Speakman Barnett

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

Mr. Barnett:

We shall be called upon before you will.

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PC

Harry Oliver White

Progressive Conservative

Mr. White (Middlesex East):

They do not like it. Consequently they can make all kinds of statements and rash promises because they will never be expected to carry them out. I agree, however, on the question of pensions which many others have mentioned and which I have mentioned from time to time. In view of the tremendous increase in the cost of living it certainly seems to me that the $6 increase is not adequate. I have said before and I say again that if the pensions could be hooked to the cost of living, the government, the old age pensioners and Canadians generally would know just where they stood, and they would not be obliged to face, every once in a while, this question of increasing old age pensions and other pensions. According to the Gordon report-if the Gordon report is to be taken as gospel-it would look as though in the next 15, 20 or 25 years the

cost of living, if all these things are going to go on, would march on up and up. If that is the case, every four or five years the government are going to be faced with this recurring problem.

Some things have been said about trade. Trade is our economic lifeline. To me the disturbing feature is that we are employing people abroad in other countries to do and produce many of the things that we ourselves could do and produce. We are importing a large amount of agricultural products and we are exporting many of our raw materials in order to buy them back as finished products. I was greatly interested in what the Minister of Finance had to say this afternoon when he was dealing with the attitude of this government and of people generally toward the Geneva trade treaties known as GATT. I am one of those who have always been critical of the GATT because we have surrendered our authority to a group of civil servants sitting beyond our boundaries who decided whether my business or your business will sink or swim. They are so far removed from the people that you have not any opportunity to argue with them or deal with them. Yet when it came to a showdown and when it looked as though the maritimes were going to slip entirely out of the grasp of the government, all of a sudden they found a way in which they could circumvent these GATT treaties. It seemed to me that it was a bit of a deathbed repentance or a conversion at the last minute. No doubt within the next two months we shall see more of this sort of thing and we shall hear about some changes that are being made to fit the occasion. It is regrettable that it must come at a time when an election is near and not necessarily when it was needed. This need has been known for quite some time.

I was also interested to note that the minister agreed that agriculture was not receiving its just and fair share of the national income. However he went on and tried to justify the government's position by saying that in almost any other place in the world farm products are cheaper than they are here. However that does not solve the farmer's problem and he is not happy about it. I am rather of the opinion that farmers generally would have taken it with a great deal more grace if the government had tried to do something about it but they have not done so except with regard to potatoes.

I think that all groups within the country recognize the economic squeeze that is affecting the farmer because those industries that are supplying goods to the farmer are finding that business is dull. Many of

the machinery companies are being obliged to reduce their activities. Some are going broke. That situation only reflects the buying power in the hands of the farmer.

I was glad to see that the government had at last taken some action to bring to the maritimes some measure of help, late as it is and probably it is not too great. Some time ago the Minister of Public Works turned the sod for the Fanshawe dam at London, Ontario. We now have an investment there of several millions of dollars and the project is about half completed. But when delegations from the city of London and other Thames river valley municipalities waited on the minister two years ago the matter was going to be given some study. Then lately the project was turned down because he said they were not able to prove that the moneys spent would create enough saving to warrant the expenditure. Should floods occur on the upper Thames river, a sizeable area to the north and west of London could well be under water again as it was in 1937, I believe, and the property damage-to say nothing of the loss of lives-could run into many millions of dollars.

The part that I do not like about it is that we had $1 million with which to help Nasser clean up his canal, and that we have other millions to throw around the world in order to make good fellows of ourselves. Yet we have not any money to spend on our own people. The people of Saskatchewan have been asking for help in connection with a dam there. I do not think there is any doubt that the increased prosperity that could be brought to that area would pay far greater dividends than will the $1 million we spent in connection with the Suez and the money we have spent in other places abroad. I just want to put this question up to the government because one never knows what can happen on these rivers in the springtime.

As I said, many millions of dollars have been invested in the Fanshawe dam, in some reforestation projects along the watershed and the smaller auxiliary dams, and if this river should go on the rampage this spring or some other spring and a disaster occur, would the government be as quick to come to our assistance in the Thames valley as they were to spend millions of dollars on Suez or as they were to give assistance to Cabano and Rimouski at the time of the disastrous fire? I have not forgotten that, and I do not think a good many other Canadians have forgotten it.

There is another subject I want to discuss tonight. During this session and other sessions I have mentioned some things about

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agriculture. I am going to mention them tonight from an entirely different viewpoint. For many years Canadian agriculture provided not only food for this nation but was able to export food to the United Kingdom and other countries, especially during wartime. Today, except for wheat or grain, we are not self-supporting. We are spending over $2,000 million every year, and have been since Korea, on national defence. Let us hope a war never occurs, but if it is advisable and wise to spend that much money on national defence it would seem to me that all the money will be wasted if our communications are broken and we are without food. We are in a very serious situation in that regard. You will recall that Britain has struggled heroically to make her island self-sufficient so far as food is concerned. No one knows what might happen, but I say that if a war should occur there is no doubt in the world but what the United States would look after herself first. If the lines of communication were broken we would find ourselves with an army and a civilian population without sufficient food.

A lot has been said about civilian defence; how they are going to evacuate the cities and take the people out into the country. It seems to me like a wild idea. Where are you going to put them in the country, out in the barns? How are you going to feed them? The farmers of the country have been treated by this government in such a manner that they are daily leaving the soil and going to the cities because of shorter hours and higher pay. As I say, if a disaster should strike, the United States will take care of the D.E.W. line and their own country and we might find ourselves in a very serious situation. If the evacuation of our cities were to take place during the winter, I do not know what would happen. If it took place in the summer and the people were sent into the country areas, they would only be there about a month when they would be eating grass because we could not produce enough food to feed our own people. I feel it is a shortsighted policy to spend $2,000 million a year on national defence when the first essential for defence is food. The aim of German submarine warfare was to starve Europe, and we could find ourselves in a similar situation. I would say it was the folly of the century to let our agriculture deteriorate as it has during the last few years.

Just to give you some idea of the amount of food imported in 1956 into an agricultural country such as this. There were 3.5 million dozen eggs imported; 9 million pounds of cheese, in a country that used to export millions of pounds of cheese to the United

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Kingdom; 3 million pounds of powdered milk; 4 million pounds of canned corn; 26 million pounds of canned tomatoes; 3 million pounds of canned beans; 22 million pounds of dressed poultry. All this was imported into a country which throughout its history was an exporter of food products. I feel it is the duty of a government to protect the lives and livelihood of its people. This government seems to be worrying about the people in Egypt, Europe and Asia more than they are about our own people. I say, what good is an army, navy or air force if you have not any food to feed the people? The government is now asking us to vote them supply so the people can vote them confidence on June 10 next. I have an idea the people are not going to be quite as certain as the government seems to be that they are going to get that confidence.

I have in my hand a marketing service report from the Department of Agriculture. This is a weekly report, and it is amazing to see the amount of agricultural products that are brought into this country each week. This report refers to vegetable and fruit products, and I am only going to mention three or four of them. During the week ending March 1, there was imported into this country 107 carloads of tomatoes; 41 carloads of apples; 25 carloads of onions; 46 carloads of potatoes. I believe what I am saying about these products applies particularly to southwestern Ontario. When I think of the number of tomatoes that used to be grown, and could be grown, on the shores of lake Ontario and in the counties of Essex and Kent, I am surprised to find we are importing this amount. The minister shakes his head, and I know he will say these are fresh tomatoes.

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I just shook my head because there are more tomatoes grown there today than ever before.

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PC

Harry Oliver White

Progressive Conservative

Mr. White (Middlesex East):

That may

be, but there are not enough. We could still have more grown if we had more people.

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Support our immigration

policy and we might have more people.

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PC
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

You could not work one; you do not know how.

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PC

Harry Oliver White

Progressive Conservative

Mr. White (Middlesex East):

They used to grow onions on the farm occupied by the late Mr. Hepburn, but they are not growing onions now. They are not growing onions as they used to do in Erieau or on point

Pelee. They could not market their onions, and onions were being imported at that time.

During the week of February 15, there was imported 33 carloads of onions; 33 carloads of carrots. During the week of February 8, there was imported 56 carloads of potatoes] 22 carloads of apples. All this took place at a time when our farmers were finding it difficult to market some of their products. During the week of March 8, there was imported 119 carloads of vegetables; 48 carloads of onions and 30 carloads of carrots. This gives some idea of the large amount of food imported each week. During the week of March 22, there was imported 104 carloads of celery; 168 carloads of tomatoes; 41 carloads of onions; 76 carloads of potatoes; 5 carloads of pears and 14 carloads of apples. I am using these figures because I wish to show the situation in which this country could find itself in so far as food is concerned if disaster should strike.

I am just pointing that out because with that much food coming in every week how long would we last if our lines of communication with the United States were broken? Here we are spending, as I said, $2,000 million every year for national defence; we are exhorting our citizens to prepare for civil defence, and the mainstay of the people is food. If they have no food they soon perish. I think it is indicative of the lack of foresight on the part of the government that the agricultural producers are finding themselves in the position in which they are now.

I hold in my hand the new stamps that were issued yesterday depicting a loon. I wonder whether they are also indicative of things to come; I wonder whether they have any reference to coming events on June 10.

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CCF

Frederick Samuel Zaplitny

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

Mr. Zaplitny:

Mr. Chairman, this apparently is going to be the last opportunity to deal with matters of a general nature, and I wish this evening to raise a matter which I do not think has been raised at all in general debate in this house during this session. I believe it is a very important matter to a large number of Canadians. I refer to the position in which our retail merchants find themselves today. In my opinion the small businessman in this country is in danger of becoming the forgotten man. We hear a great deal in this house, and rightly so, at every session about all forms of primary production. We hear a great deal about labour and industry, but very little attention has been paid over the years to the position of the independent small merchant who for many years has served the community faithfully and, in more ways than one, is the backbone of the community.

At this time there is a real danger facing the small independent merchant of this country, a danger which may force him almost into extinction unless this parliament takes some action. I say that would be a terrible loss to the country because those of us who have had something to do with operating small businesses know that the small businessman, the independent merchant, is called upon to support every type of community enterprise in the community in which he lives and by and large he has done so very generously and without any protest or complaint.

But at this time a situation is developing in our country which, in my opinion, could force the small independent businessman entirely out of business. I wish to refer to Hansard of April 1, of this session. I raised this matter in the house in a question to the Prime Minister. I think I should repeat the question in order to set the background correctly. At that time I referred to a letter which had been sent, I understand, to all members of parliament by the retail merchants association and I asked the Prime Minister the following question, as reported at page 2910 of Hansard:

I would like to ask the Prime Minister if he has received a letter from the retail merchants' association of Canada, claiming that the situation is rapidly approaching "where a few large corporations are gaining a stranglehold on the retail trade of our country"? If so, will the government give consideration to appointment of a royal commission to investigate the retail practices and to recommend appropriate remedial action for this dangerous situation.

In reply to that the Prime Minister, first having commented on the fact that he had received the letter that day and had not had time to give it full consideration, said this:

The matter has not yet been considered by the government but from the looks of this circular I would imagine it has probably been addressed to all the members of this house.

I will read it, and after having done so I will see if there is any reason why the government, as a government, should give the matter consideration.

I failed at that time to understand, and I still am puzzled as to what is meant by that last line where the Prime Minister said:

... if there is any reason why the government, as a government, should give the matter consideration.

I do not know how else they would do it except by the government-

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Obviously what the Prime Minister had in mind was whether the request made by the retail merchants' association was within the jurisdiction of this government.

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CCF

Frederick Samuel Zaplitny

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

Mr. Zaplilny:

Certainly the question that I addressed to the Prime Minister was squarely within the jurisdiction of this government.

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In fact, it is the only place where it could be done, because what I suggested to him I still think is the only practical step to take since what was contained in this letter is only part of the problem affecting the retail merchants. The only practical step that could be taken at this time to investigate this problem, and other problems affecting the retail merchants, would be to appoint a commission with the widest possible powers to make a complete investigation into the situation, and then the government would be in a position, as would parliament, to decide on what steps should be taken to remedy the situation.

I wish to remind the Minister of Finance that the last time at which such a wide investigation was made was back in 1934. It was started earlier than that, but the report was published in 1934. It was conducted under the direction of the minister of trade and commerce at that time, the Hon. H. H. Stevens, and the results of that investigation were a great shock to the Canadian people and apparently an even greater shock to the minister of trade and commerce of the day because, as is well known now, it was one of the things that led up to his resignation from the government and his attempt to start a new political movement in this country which apparently did not get very far. I draw attention to that because since that date nothing has been done to make a complete investigation into the merchandizing methods and into the trade practices which have been growing up in our economy in the retail trade.

Some of the things which have happened within the last 10 years particularly have caused the retail merchants' association to speak out in a very unusual manner, because if there has been one body or one organization which has always spoken with great modesty and a great deal of moderation it has been the retail merchants' association. But on this occasion, they felt that something was needed to shock this government and this parliament into action. I therefore propose to quote from part of the letter to which I referred on April 1 and which was sent to the members of this house under the date of March 30. This letter was sent by the retail merchants' association of Canada and was signed by David A. Gilbert, general manager. Here is what it has to say:

During the last 10 years a condition has been developing in Canada which is rapidly approaching the point where a few large corporations are gaining a stranglehold on the retail trade of our country. Unless there is fast legislative action

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to counteract this trend, small business, the mainstay of free enterprise and effective competition, may be elbowed out of existence.

The situation is serious. Within the next five to 10 years, unless action is taken now, these large corporate retailers may well control the supply and price of all retail goods to all Canadians. We have seen similar developments in the automobile industry, and in the gasoline business.

Further on the letter had this to say:

The results of this inequality-

That is, the inequality between large corporations and small businesses.

-are clearly visible in every Canadian city today. The corporate or chain outlet has vast, new, expensive buildings, parking lots and equipment. The independent merchant is found in old buildings, and with out of date equipment.

He concludes the letter with this paragraph:

Canadian retailing is a 14 billion dollar a year industry-one of the nation's largest. It is too important-too basic to our needs and way of life-to be allowed to fall into the monopolistic control of three or four large corporations.

Can we count on your help to support legislation which will correct this situation and keep Canadian retailing free and independent?

I think the writer of that letter was a little optimistic when he asked hon. members of this house for their support for legislation which would correct the situation because I suppose he had in mind that the government was going to bring some legislation before this house in order to do that. Judging from the reply of the Prime Minister on April 1 and the complete lack of any action since that time apparently it is not the intenion of the government to do anything about this situation.

I have made one proposal as to what could be done immediately, that a study be initiated now in order to be ready perhaps for the next parliament, but nothing has been done and nothing is being proposed. Since I raised that matter in the house I have received a certain amount of confirmation from other sources as to the seriousness of this situation. One of the sources is a letter dated April 8, 1957 written by one of the councillors of the city of Montreal by the name Valere Vachon who has quite a number of interesting things to say. I shall just pick out certain comments that are applicable to this question.

First of all he refers to the fact that the situation in Montreal is serious, in these words:

Such a situation is particularly bad in Montreal-

He is referring to this unfair competition which is developing between the large corporations and the small independent businesses. The letter continues:

-and the same abuse is spreading in the suburbs of Montreal and has already gained a foothold in Quebec city; the hardware, electric appliances and

retail furniture dealers are affected and in fact it threatens the very existence of the small and independent business.

Further down in his letter he refers to the fact that unless something is done it is his opinion that in a very short time 50 per cent of independent small businesses will close their doors. This is the opinion of a person who occupies a responsible position in Canada's largest city and who is in a position to know what is happening to the retail trade of our country.

I have done a little research along that line and came across a submission made to the Gordon commission on March 8, 1956 by a group of individuals whose names I shall list. The people in question are George E. Britnell, Vernon C. Fowke, Mabel F. Timlin and Kenneth A. H. Buckley, all of whom are members of the department of economic and political science of the University of Saskatchewan. I propose to read from their submission to the Gordon commission on the question of competition and monopoly.

Their submission, of course, dealt with the over-all philosophy of business, competition and monoply and it is a rather significant submission because for many years members of the party with which I am associated have warned the small independent merchant that he is in the same danger as a result of the monopolistic tendencies of this economic system as is the farmer, the labourer or anyone else in this country.

I must say that in many cases the independent merchants did not readily agree with that idea. Through the process of a great deal of expensive propaganda which is being dished out by the bushel every day and even more so now by the huge corporations, the independent merchant had been sold on the idea that after all he is a sort of small brother capitalist of the big capitalists and therefore he is nearly in the same boat, and what is good for big business is good for small business. That concept was repeated again and again and drummed into the ears of the small merchants until he almost began to believe it. In a way they are almost in the same position, just like the fishermen and the fish are almost in the same position. When a fishermen goes out fishing it can be truthfully said that both he and the fish are in the fish business but usually the fish ends up in the frying pan of the fisherman rather than the reverse and that is exactly what is beginning to happen to small business. They are beginning to realize that the whole tendency of this monopoly system is for collectivism and in that respect it is almost a brother of communism because both are collectivist, both are materialistic, both are ruthless in

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II, 1957


their methods and both are enemies of economic democracy and therefore of political democracy. I was surprised how clearly that opinion was confirmed by this group of learned people in their submission to the Gordon commission. First of all they refer to a new type of thinking which seems to have permeated into the ranks of the government and I suspect that the Minister of Finance in particular must have read some of the theories of one modern economist whose name is Schumpeter who has come out flatfooted in recent years to claim that the collectivist idea of capitalism, or in other words monopoly and combine, is a good thing for our economy. He bases his theory on the fact that monopoly becomes a sort of "engine of progress", as he calls it, in that it favours not only innovation but investment. It is claimed that the only way you can accumulate capital is by allowing business to be monopolistic, to become so huge that it can accumulate large reserves of capital and that capital can be used for innovation, expansion and modernization. This group of professors make reference to that theory and to the position that the state or the government occupies with regard to this situation and I want to quote their words as will be found on page 10 of their submission. This is what they say: If the state, having created the legal framework within which the great corporation exists, connives at the accumulation of monopoly or oligopoly profits as a means of promoting innovation and accumulation generally, there is a danger that it may create conditions which threaten its own life. Now is that not exactly what this government has been doing? I am not saying that this government has been doing it on account of the theory of Schumpeter but they may have reached the same conclusions by other channels. The action which this government took last year in creating one of the greatest private monopolies that exists in this country today, the Trans-Canada Pipe Lines company, is an indication that the government is prepared to go along with this new theory, the opposite to the "trust busting" theory which was popular in the United States in the 1930's. They are now prepared to go along with the theory that big business is good business and the bigger the business the better it is for the country and that of course leaves the small business out in the cold. This group continues their submission with these very important words: The long-run implications of the idea- That has reference to the Schumpeter idea that big business is good business- Interim Supply -that monopoly may be an engine of progress are not lost upon certain of its originators. For Schumpeter, the final outcome of innovation and accumulation through the hegemony of the large firm is the automatization of progress and the obsolescence of the entrepreneurial function. Now, that type of language means that those who so believe think there is no room for the small businessman. And then he goes on: The resemblances of his theory of economic development to Marxist ideology are plain. According to Karl Marx, the transformation of private property into "capitalist private property" through the same type of concentration in the hands of the few would bring into being the first phases of communism, with entrepreneurs transformed into hired managers. Now is that not exactly what is taking place and is that not exactly what the retail merchants are complaining about? They are being put into the position where one by one they become the victims of these monopolies, this giant octopus. They are going to have to close their doors and hire themselves out as managers to run the business on a salary for the big groups. This is a very, very serious situation and I want to say to the government in all sincerity that this may be a warning; this may be the writing on the wall because if the government will only think back I think they will realize that the small businessman, the independent merchant, has been the backbone and support of their party. This has been the sector of our economy upon which they have depended most heavily for consistent support. Now we And that the primary producers are discontented and if the government loses the support of the independent, small merchant class-which they appear to be in great danger of losing unless they pay heed to these warnings-they are going to find themselves without their chief support. I would like to refer to another matter which affects the small independent merchant in a slightly different way. On March 26 last I addressed a question to the Minister of Justice, as reported on page 2691 of Hansard: Has the Minister of Justice received a recent request from the Canadian association of consumers for an amendment to section 369 of the Criminal Code in order that effective action may be taken with regard to trading stamps? If so, is it the intention of the minister to recommend an amendment this session to this section of the act? The Minister of Justice simply replied that he had not received any such request. Of course that was a complete evasion because he had received such a request although it had not been a recent request. So my hon. friend, the hon. member for Moose Mountain, immediately rose to ask the minister if he had ever received such a request from the



Interim Supply Canadian consumers association and then, of course, the minister went on to explain that he had received such a request, and here is the part of his reply which is significant. In giving the reason why the government was not prepared to take any action he said: No court in Canada has held that this present law against trading stamps is either invalid or unenforceable. Indeed, there cannot be such a decision until there is an unsuccessful prosecution under the law. Pending such a prosecution we do not wish to ask parliament to amend the law until we shall have been informed in what respect the courts consider it to be invalid or unenforceable, that is until we know in what respect it should be amended. Well now those are a lot of words which boil down to simply one thing which is that the government is not prepared to do anything, because the Canadian association of consumers had already taken up this matter, had tried to lay the information and initiate a prosecution under the Criminal Code with reference to trading stamps in the province of Ontario and had been told by the attorney general of that province that as the law now stands there was a loophole so great in it that no self-respecting prosecutor would even attempt to pin down a prosecution on it.


LIB

Marie Ann Shipley

Liberal

Mrs. Shipley:

Would the hon. gentleman be kind enough to tell the house what that loophole is; I have been trying to find out and would he mind telling me.

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CCF

Frederick Samuel Zaplitny

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

Mr. Zaplitny:

Well, Mr. Chairman, I do not have the act before me at the moment but if the hon. member will only look back at the circular letter sent out by the association of consumers that section of the act is quoted. There is reference therein to that part of the section which they find weak and which the attorney general has described as a loophole. I am not in a position, in view of the fact that I do not have the statute before me, to spell out the exact terms of that act.

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LIB

Marie Ann Shipley

Liberal

Mrs. Shipley:

Would the hon. member permit another question. Having just read the act as quoted by the Minister of Justice and having read the article to which he refers and in which I cannot find any loophole, would my hon. friend tell us again what loophole he is talking about?

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April 11, 1957