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


Major James William Coldwell

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


Thank you, Mr. Speaker; I will endeavour to abide closely by the rules. With your permission I must refer from time to time to some of the phraseology of the bill. If, then, we may just look at section 7, subsection 1 we shall see the principle involved:
The maximum net profit received by any person in respect of any contract to which this section applies shall be limited to an amount equal to five per centum per annum on the average amount of capital of such person employed in the performance of the contract.
And a little further on we have this:
. . . shall be based upon the actual cost (less depreciation at a rate deemed reasonable by the board) of the physical assets including plant, machinery, equipment and working capital. ...
1 am anxious to find out when we get into committee just what the term "working capital" involves, because upon its definition, I take it, a great deal will depend in relation to the limitation of profits under this bill. Of course if it includes capital used in the purchase of material and in the employment of labour, the definition would indeed be very wide, and the real profit, therefore, increased substantially. I submit, therefore, that the first part of the bill does not satisfy that large body of public opinion which demands the elimination of private profit in the manufacture of arms, or even the substantial curtailment of private profit in that manufacture.
So far as we in this group are concerned, my hon. friend from Weyburn (Mr. Douglas) and others of the group have moved on occasion the point of view we hold, which is that in the manufacture of munitions and war materials private profit should be eliminated, and for this purpose the industry should be brought under public control. That does not mean that one would expect those engaged in the industry to render services to the nation without recompense, but it does mean that at least the element of private profit

Defence Purchasing Board
should be eliminated. Therefore, in any bill which is brought before this house dealing with this particular matter, not forty per cent but one hundred per cent of those supplying munitions and arms to the Dominion of Canada should be brought under the control of parliament in relation to profits that are made; if they are allowed at all.
Turning to part II of the bill, we object to the manner in which the bill has been presented. The bill should have been divided into two-there should have been two bills- because it deals with two different things. The first part of the bill quite clearly deals with the purchase of armaments, which in my opinion ought to be considered apart from the financing of capital expenditures under the Department of National Defence. I submit to the minister that we may find ourselves in this position, that while we may agree with one principle of the bill we may be in direct conflict with another principle of it. It is therefore unfortunate that it has been brought down in this particular form. It would have been more satisfactory to the house and particularly to our group had it been brought down in two bills instead of one.
I am not a lawyer and therefore may not understand the import of section 17 of part II of the bill, and until some explanation is given I would hesitate to vote for it. A good many members of the house are uncertain what the clause means. Perhaps it can be explained later before we are asked to vote upon it.
While we welcome the suggestion of a defence purchasing board as a method of meeting a given situation, we should have been better pleased had the government contemplated wider public manufacture of munitions. I realize, of course, as I believe most members do, that the manufacture of all that is required would not be possible, but at this moment a greater measure of control over private manufacture ought to have been instituted in a bill of this sort.

Full View