March 14, 1939 (18th Parliament, 4th Session)


Major James William Coldwell

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


As I say, the minister
did mention it, but the minister placed on record substantially the minority report, favouring private manufacture, making only a brief reference to the much more important report of the majority of that committee.
In my opinion the bill as presented to this house does not give adequate control of profits incidental to the private manufacture of arms. It deals only, for example, with contractors selected without competitive bids. In support of that statement I direct attention to the explanatory notes which are printed opposite page 2 of the bill, where I read:
Net profits on contracts awarded by the board-
That is, the board named in this bill.
-without competitive tender, and subcontracts in connection therewith, are to be limited to five percentum per annum on the average capital employed or to be employed in the performance of the contract. Effect is to be given to this provision by the levy of a tax equal to the amount by which profits exceed the maximum of five per centum per annum on the average capital employed.
And may I again emphasize this:
Net profits on contracts awarded by the board without competitive tender. . . .
Then, if we turn to section 7, page 6 of the bill, subsection 9, we find these words:
For the purposes of this section the word "contract" shall include contracts entered into under the authority of this party and subcontracts in connection therewith, but shall not include (a) contracts awarded as a result of competitive tender or subcontracts in connection therewith, and (b) contracts or subcontracts to the extent that such contracts or subcontracts are performed outside of Canada.
Then if we turn back to section 4, subsection 4, on page 3, we find this:
In respect of all contracts, the board shall, wherever practicable, invite tenders either by means of advertisements in the public press or otherwise.
Defence Purchasing Board

"Where practicable" tenders shall be invited. In other words, and primarily, the bill contemplates the calling of tenders for the making of arms; and contracts entered into by tender, according to the section I read immediately before this one, are not. so far as the five per centum profits go, under the control of the board. In the minister's speech on Friday last he made the statement that in the past few years this government had awarded by tender some sixty per cent, I think it was, of the contracts, and forty per cent by the other method.

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