June 26, 1961

LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

I hear an hon. member saying "That is a lie". I take it he will withdraw that observation.

Topic:   BANK OF CANADA
Permalink
PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

I am sure the hon. member spoke in haste and will be quick to make amends for something that has universally been held to be contrary to parliamentary practice.

Topic:   BANK OF CANADA
Permalink
PC

Gage Workman Montgomery

Progressive Conservative

Mr. Montgomery:

I withdraw the first part. I said that had been denied.

Topic:   BANK OF CANADA
Permalink
LIB
PC
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

It certainly sounded like "a lie" here. In any event, that is what I said, that the minister did not quote; that before this dispute is settled in favour of the government the man who has been attacked should be given a chance to appear before a committee and defend himself.

Topic:   BANK OF CANADA
Permalink
PC

Egan Chambers (Parliamentary Secretary to the Minister of National Defence)

Progressive Conservative

Mr. Chambers:

Will the Leader of the Opposition permit a question?

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

I will answer questions, like the minister did, at the end if my statement. There is something else the minister said which should be replied to immediately. The minister made a great play in building up his case for this dispute between the bank and the government which has extended now over four years, on the fact that in 1958 the governor of the bank refused to take the action which the government asked the bank to take with regard to tight money and lower interest rates. He had some strong things to say about the governor angrily refusing to take certain action. It is surprising that the minister, having made that statement,

Governor of Bank of Canada did not take this opportunity to tell us the evidence on which it is based; because on June 21 we asked him a question on this very point. The hon. member for Welland put the question.

Topic:   BANK OF CANADA
Permalink
PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinton):

Page?

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

Page 6812. The question reads as follows:

1. Did the Minister of Finance ask the governor of the Bank of Canada to increase the money supply on any occasions since June 21. 1957?

2. If so, on what occasions?

3. Did the governor refuse to accede to any such request?

4. If so, which ones?

What did the minister say on that occasion? Compare this with what he has tried to say this afternoon.

Mr. Speaker, the communications between the governor of the Bank of Canada and the Minister of Finance have always been regarded as privileged.

Then the hon. member for Welland put this question:

1. Did the Minister of Finance ask the governor of the Bank of Canada to take steps to reduce interest rates on any occasion since June 21, 1957?

2. If so, on what occasions?

3. Did the governor refuse to accede to any such requests?

4. If so, which ones?

This was the answer of the Minister of Finance:

Mr. Speaker, the answer to this question is the same as that given to the previous one.

The minister, however, purported to give an answer this afternoon, and the answer he gave this afternoon is contradicted by his own statement at the time. On February 14, 1958, according to a Canadian Press story the minister had this to say, and I quote from this report which has never been denied:

Whatever may have been said for the tight money policy in 1955 and 1956, it is evident that it does not fit the needs of 1958.

Then he went on to say this:

Money is more plentiful, credit is somewhat easier and interest rates have been reduced to a remarkable extent in recent months.

Does that look as if the Bank of Canada was not co-operating with the Department of Finance in these matters?

Topic:   BANK OF CANADA
Permalink
LIB

John Whitney Pickersgill

Liberal

Mr. Pickersgill:

He just said that for the electorate, of course, during an election campaign.

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

Of course, Mr. Speaker, that was an election speech, and as the Minister of National Revenue, whose absence from the house and especially the reason for it we all lament, said on one famous occasion, "Election promises really do not mean very much".

This short bill which we have before us, Mr. Speaker, is the result that was made necessary by the difficulty, if you like by the

Governor of Bank of Canada mess, that the government has got itself into through its mishandling of this matter, through its customary ineptness and procrastination, this time extending over four years, in dealing with a problem through its customary procedure, its customary practice of allowing a problem to deteriorate until it becomes a crisis and then taking sudden and panic action to deal with it. This situation in which the government finds itself, this controversy between the government and the governor of the Bank of Canada, has already-the minister himself has said this- done harm to Canada's prestige and Canada's position, and I agree-

Topic:   BANK OF CANADA
Permalink
?

An hon. Member:

Good.

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

-with the minister and with all members of this house, I hope, that this matter should be cleaned up with a minimum of delay. But it should be done in the right and proper way. Justice cannot be subordinated to speed, desirable as speed is in this case. I agree and I have just repeated that the governor's usefulness has ended as long as this government is in charge of finance.

Topic:   BANK OF CANADA
Permalink
?

An hon. Member:

Are you going to hire him back?

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

But the governor's usefulness has been destroyed by this controversy precipitated by the government, and I will go into that in some detail later. Because of that the governor has become a scapegoat, and he is becoming a scapegoat without an opportunity for an inquiry and without parliament being given an opportunity to inquire into all the facts, into the charges-and more have been made this afternoon-and the countercharges.

The bill makes no such provision before dismissal, provision for the right of inquiry, the right of every public servant to have an inquiry, whatever his position, before dismissal if he does not hold his position at pleasure, and the governor of the bank does not. Incidentally, the minister referred to the governor of the bank as a public official, which is correct. The Prime Minister referred to him incorrectly over the air the other night as a civil servant.

The governor of the Bank of Canada does not hold his position at pleasure. He holds it during good behaviour. When a man in his position is being forced out of office as he is by this legislation, then irrespective of the merits of the case he should be given an opportunity to state his case before a parliamentary committee because it is parliament, the high court of the land, which is being asked to take action. If parliament is being asked to take this kind of action, surely in simple justice the man concerned should be

given the opportunity to appear before a parliamentary committee. That is why, Mr. Speaker, I asked the minister once again after his statement this afternoon whether he would not ensure that the bill would be referred at once to a committee where evidence could be taken and witnesses could be heard. If he had said yes, and he should have said yes, that would have ended second reading as far as we are concerned.

Topic:   BANK OF CANADA
Permalink
LIB

Paul Joseph James Martin

Liberal

Mr. Martin (Essex East):

Instead of hanging a man on the prejudiced statement of the Minister of Finance.

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

And, Mr. Speaker, this action, this denial of justice, this denial of the right to appear before a committee of the House of Commons which is asked to discharge this man, is being taken by a government which boasts so often about the bill of rights it asked this parliament to pass, one part of which includes words to the effect that no such act-Canadian act of parliament-order, rule, regulation or law shall be construed or applied so as to "deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations".

Perhaps the Minister of Justice will tell us whether he has examined this bill in the light of the bill of rights and whether this bill, in the form in which it is presented to us and in the light of the refusal of the government to permit the hearing we have asked, is consistent with the letter or at least the spirit of the bill of rights.

The issue in this bill is not, as the minister tried to tell us this morning, who governs this country. There is no doubt about that. Parliament and the people govern this country. The issue is not who governs this country; the issue is how this country should be governed. The issue in this bill is not Mr. Coyne or his financial and monetary views. We on this side have criticized his views when the Minister of Finance defended him. The minister brought forward some evidence a few moments ago, and I am not quite sure whether he was in favour of Mr. Coyne or against him. He brought forward the statement which he said he remembered Mr. Coyne made, that it was outrageous the way we criticized Mr. Coyne in committee.

Topic:   BANK OF CANADA
Permalink
PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinion):

It was the hon. member for Essex East in that committee to whom he referred.

Topic:   BANK OF CANADA
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

The minister quoted the governor's statement which he remembered so well, which was not in writing, that the questioning of the hon. member for Essex East, who was speaking as a Liberal member of parliament, was outrageous.

Topic:   BANK OF CANADA
Permalink

June 26, 1961