January 30, 1958

PC

Francis Alvin George Hamilton (Minister of Northern Affairs and National Resources)

Progressive Conservative

Mr. Hamilton (Qu'Appelle):

Mr. Speaker-

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

If the minister speaks now he will close the debate.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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PC

Francis Alvin George Hamilton (Minister of Northern Affairs and National Resources)

Progressive Conservative

Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):

A question has been asked by the hon. member for Mackenzie River, and I think I can assure him that the federal government will continue to follow the practice followed in connection with the Yukon territorial government. For some time they have had the right to borrow money, but in practice it is very difficult for them to borrow in the ordinary money markets. They do have to come to the federal government, and they do get special consideration. If the hon. member inquires into the interest rates they pay I think he will appreciate the significance of what I have just said.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Courtemanche in the chair. On clause 1-Further legislative powers of commissioner in council.


CCF

Herbert Wilfred Herridge

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

Mr. Herridge:

Could the minister explain this system? From whom would the commissioner normally borrow? Would it be from the government of Canada or from one of the lending companies? What is the procedure with respect to the commissioner lending money to the municipalities and school districts in the territory; how are those loans made, and how are they secured?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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PC

Francis Alvin George Hamilton (Minister of Northern Affairs and National Resources)

Progressive Conservative

Mr. Hamilton (Qu'Appelle):

The Yukon government have had the power to borrow money for some time, and they have found it difficult, as a territory, to borrow money. If you substitute the words "provincial government" you will understand the section. They borrow money the same as a provincial government, except that we have control of the natural resources. In so far as the Yukon

is concerned, the federal government has usually been the source of their funds for borrowing. In other words, they have not been able to get funds successfully from other sources. Legally they can go out in the money markets and float provincial bonds if they so desire, but in practice they tend to come to the Department of Northern Affairs and National Resources to see what financial arrangements we can make.

In so far as the Northwest Territories are concerned, they have not had the power to borrow, so we have had to work out an arrangement by which money was advanced for schools. A large proportion of the cost of schools has been borne by the federal government by reason of the fact the federal government has full responsibility in the Northwest Territories for the education of Eskimos and Indians, and the territorial government pays us back a certain proportion as a result of their responsibility for the proportion of white children in the territory. We have come to the stage where we give them the right to borrow and run their educational function as a province would run it. Does that answer the hon. member's question?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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CCF

Herbert Wilfred Herridge

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

Mr. Herridge:

Yes.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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IND

Henri Courtemanche (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Independent Progressive Conservative

The Chairman:

Shall clause 1 carry?

Mr. Hardier In reply to the last question asked by the hon. member for Kootenay West the minister said the practice in the Yukon has been to borrow money. But in actual fact is it not true that the Northwest Territories have been borrowing money from the federal * treasury to the same extent as the Yukon, but that this bill will make simpler the mechanics of the administration of such loans from the Department of Finance? Is that not all this bill is for, namely just to simplify the method of borrowing money from the federal government?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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PC

Francis Alvin George Hamilton (Minister of Northern Affairs and National Resources)

Progressive Conservative

Mr. Hamilton (Qu'Appelle):

Not quite. This is to set up the system. At the present time when they borrow money they do so by ordinance. This is to give them the right, in the same way a provincial legislature would have the right, so they are able-in this case the commissioner in council-to go ahead and borrow money as an organization just as a province may borrow money; it is to make it part of governmental technique. I think you might call it simplification, but actually it goes much further in giving them the constitutional power to borrow as an institution of government.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

I wonder whether I might ask the minister what kind of instrument is used as security for those loans. Is it a treasury bill of some sort? If so, just how is it issued?

96698-255J

Northwest Territories Act

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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PC

Francis Alvin George Hamilton (Minister of Northern Affairs and National Resources)

Progressive Conservative

Mr. Hamilton (Qu'Appelle):

I tnink the usual technique is that they issue debentures, the same as a province would issue them. They also issue promissory notes, which I think is a provincial technique. Those are backed by the pledge of territorial revenues, or in the case of a school district they would be backed up by the pledge of school district revenues. It is the usual type of security.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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LIB

Jean Lesage

Liberal

Mr. Lesage:

Of course the minister will agree that the borrowing will be from the federal government as in the case of the Yukon. The guarantee is very simple. Each year the government of Canada pays hundreds of thousands of dollars to both territories under the fiscal arrangements. The security is there all right.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

What was of interest to me was the type of instrument that is deposited rather than the security or in other words whether it is a treasury bill or whether it is a sort of debenture that is agreed upon, or what not?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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LIB

Jean Lesage

Liberal

Mr. Lesage:

In the case of the Yukon last year or two years ago, it was an ordinance of the Yukon territorial council approved by an order in council of the federal government. Those were the instruments.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

What I should like to find out is this. When an advance is made under the authority of an ordinance of the territorial council, what sort of instrument is deposited with the federal treasury in recognition of the fact that the advance has been made?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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LIB

Jean Lesage

Liberal

Mr. Lesage:

The order in council.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

What visible evidence is there that it has been made?

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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LIB

Jean Lesage

Liberal

Mr. Lesage:

The ordinance and the order in council are both the evidence and the instrument.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

But in all cases of such arrangements with the provinces, treasury bills are deposited by the provincial government with the federal treasury.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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LIB

Jean Lesage

Liberal

Mr. Lesage:

That is so.

Topic:   NORTHWEST TERRITORIES ACT
Subtopic:   AMENDMENTS TO AUTHORIZE COMMISSIONER TO BORROW AND LEND MONEY, ETC.
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January 30, 1958