Mr. MACMILLAN:

1. Yes.

2. Officers, $1.70 a day effective 1 September, 1939; other ranks-$1.25 a day effective 1 October, 1942.

3. Not applicable.

Mr. MACMILLAN (Queens):

Mr. Chairman, with the consent of the committee I

should like to place on Hansard the answers to certain questions which were asked during the discussion of estimates of the Minister of National Defence for Air (Mr. Power). The leader of the opposition (Mr. Graydon) asked a question with regard to sergeant-pilots on leave without pay at civilian operated schools. His questions and the answers are as follows: Question:

1. How are sergeant-pilots chosen to be on leave without pay for civil-operated schools?

2. What is the basis?

3. How many of them are there?

Answer:

1. Staff pilots on leave without pay are now employed at air observers schools only. Procedure for choosing staff pilots is as follows:

A request is received from the manager of an air observers school for a certain number of pilots. Instructions are issued by air force headquarters to the commanding officers of secondary flying training schools to select this number of suitably trained graduates. By "suitably trained" is meant trained on twin-engine aircraft and above average in navigation. Personnel so selected by their C.O.'s are posted to the air observers schools on service strength. If they prove satisfactory, and acceptable to the civilian manager, after a reasonable period of service, they are requested to make application through the R.C.A.F. chief supervisory officer at the school and the civilian manager to be released on leave without pay. The application is reviewed at air force headquarters, and if satisfactory, the pilot is struck off strength on leave without pay.

Occasionally, the civilian manager of an air observers school will request the services of a specific pilot who has been employed on staff or instructional duties at an R.C.A.F. training unit, and who has a large number of flying hours to his credit. Each of these cases is reviewed strictly on its merits, with due regard for the individual's value to the R.C.A.F. in that capacity at that particular time.

All pilots on leave without pay at civil-operated schools are subject to immediate recall at any time.

2. Answered in question 1.

3. Figures for sergeant-pilots alone are not immediately available. The total number of staff pilots on leave without pay at eight civil-operated air observer schools at 29th February, 1944, was 596. A very few might be officers, the remainder being non-commissioned officers.

The hon. member for Peterborough West (Mr. Fraser) asked a question with regard to discharges and retirements, and the medical reasons therefor. The answer is as follows:

War Appropriation-Air Services

Discharges and Retirements-Medical Reasons September, 1939-February, 1944, inclusive

1. A total of 7,872 R.C.A.F. personnel have been medically boarded ApBp (medically unfit for any form of service) from September, 1939, to February, 1944, both inclusive. Most of these personnel have already been discharged or retired-a few cases are still pending. _

2. Table I provides a breakdown of the 7,872 cases by diagnosis for male and female personnel separately.

Table I

Approved Medical Boards-ApBp-R.C.A.F. Personnel September, 1939-February, 1944, Inclusive

Diagnosis

Nervous and mental disorders Diseases of digestive system .

Foot conditions

Ear conditions

Injuries

Eye conditions

Respiratory diseases

Heart, arteries and rh. fever .

Hernia

Tuberculosis (all forms)

Arthritis and rheumatism . .. Other diseases and conditions

Total

R.C.A.F. R.C .A.F. Total(Male) (W. D.) No. % No. % Number2,392 32-2 196 44-0 2,588849 11-4 14 3-1 863281 3-8 13 2-9 294213 2-9 7 1-6 220487 6-6 13 2-9 500213 2-9 9 2-0 222609 8-2 22 4-9 631689 9-3 28 6-3 717114 1-5 1 0-2 115355 4-8 24 5-4 379232 3-1 3 0-7 235992 13-3 116 26-0 1,1087,426 100-0 446 100-0 7,872

3. The figures in table I include both officers and other ranks.

The hon. member for Souris ('Mr._ Ross) isked a question with regard to airframe overhaul contractors. The answer is as follows:

Overhaul Contractors.

In answer to the House of Commons query regarding the number of civilian contractors engaged in overhaul and repair of aircraft tor the R.C.A.F. the following list shows:

(a) Airframe overhaul contractors

(b) Engine overhaul contractors

(c) Miscellaneous repair contractors.

(a) Airframes

Aircraft Repair Ltd., Edmonton, Alta. Canadian Pacific Air Lines, Vancouver, B.C. Canadian Car & Foundry Ltd., Amherst, N.b. Central Aircraft Ltd., Crumlm, Ont.

Clark Ruse Ltd., Dartmouth, N.S.

Clark Ruse Ltd., Moncton, N.B.

Coates Ltd., Vancouver, B.C.

Cub Aircraft Corp., Hamilton, Ont.

Fairchild Aircraft Ltd., Longueuil, P.Q. Leaven Bros., Toronto, Ont. _ ,

M & C. Aviation Ltd., Prince Albert, Sask. MacDonald Bros., Ltd., Winnipeg, Man. Midwest Aircraft Ltd., Winnipeg, Man. Noorduyn Aviation Ltd., Montreal, P.Q. Patterson & Hill Ltd., Toronto, Ont.

Prairie Airways, Moose Jaw, Sask.

St. Maurice A/C Repair, Cap de la Mad., P.Q. T.C.A., Mai ton, Ont.

(b) Engines

Aircraft Repair Ltd., Edmonton, Alta. British Aero Engines Ltd., Montreal, P.Q. British Aero Engines Ltd., Sea Island, B.C. Canadian Airways Ltd., Winnipeg, Man. Canadian Pratt & Whitney Ltd., Longueuil, P.Q.

Canadian Wright Ltd., Montreal, P.Q.

Central Aircraft Ltd., Crumlin, Ont. DeHavilland A/C of Can.. Ltd., Toronto, Ont. Laurentian Air Services, Ottawa, Ont.

M & C. Aviation Ltd., Prince Albert, Sask. Midwest Aircraft Ltd., Winnipeg, Man. Ottawa Car & Aircraft Ltd., Ottawa, Ont. Standard Aero Engines Ltd., Winnipeg, Man. T.C.A., Winnipeg, Man.

"Rrnsr Tnrnnfio. Out.

(c) There are 110 firms engaged on overhaul of components such as instruments, electrical equipment, mechanical equipment such as oleo legs, etc., and recapping of tires.

The hon. member for Cape Breton South (Mr. Gillis) asked with regard to the admission price to the theatre at Sydney Air Station. The answer is as follows:

(a) Price of admission is 25 cents. This price was agreed to by station personnel until such time as a loan obtained from outside sources for the purpose of installing the present moving picture equipment has been liquidated.

(h) Revenue from the theatre is intended to cover only operating costs and liquidation of the loan over a reasonable period. If there should he any profit, it becomes part of station non-public funds, to be used for the benefit of station personnel. Price of admission is subject to review from month to month, and no complaints have been received on the station regarding the present admission price.

(c) Present price of admission is not considered exorbitant, as the quality of films shown is comparable to commercial theatres in Sydney, where the admission price is approximately 45 cents.

War Appropriation-Air Services

The hon. member for Lake Centre (Mr. Diefenbaker) asked a question with regard to annotated positions and the number of officers who thereby secure exemption from income tax. The questions and answers are as follows:

1. Q. The minister possibly can give us an answer that will cover the situation by telling us the number of administrative officers who fill annotated positions and who thereby secure exemption from income tax although they are not actually engaged in flying.

A. Only general list positions are annotated and in the event of a non-flying list person filling a general list position which is exempt from income tax, the non-flying list person is not exempt from income tax by reason of the position annotation.

2. Q. And will the minister give the committee a list of the annotated positions?

A. It would take considerable clerical work to complete a list of all annotated positions but it is felt that the following definition of the policy covering position annotations will suffice:

(a) The following positions are annotated:

(i) All general list positions established for aircrew duties.

(ii) The commanding officers of stations where the primary function is flying operations.

(b) The following positions are NOT annotated:

(i) Any position at air force headquarters or the headquarters of a command, group or wing.

(ii) The commanding officers of units whose primary function is not flying, e.g., repair depots, wireless schools, initial training schools, equipment depots, etc.

(iii) General list positions in ground instructional schools or ground instructional sections of a flying school, second in command of stations, or any other positions which do not require the performance of continuous aircrew duties.

Questions were asked by various members with regard to civilian flying schools. The answer is as follows:

Re: Civil Flying Schools E.F.T.S. When it was decided that flying clubs should be asked to sponsor E.F.T.S. pains were taken to appoint a committee consisting of the most competent and experienced people available. This committee included: Colonel K. S. McLaughlin, then Acting Deputy Minister of National Defence; Air Marshal G. M. Croil, then C.A.S.; Brigadier Orde, Judge Advocate General; Mr. M. A. Seymour, K.C. and Mr. C. W. Nicholl, C.A. as representing the Canadian Flying Clubs Association; Mr. Henry Borden, K.C.; Mr. H. G. Norman, C.A., now Financial Adviser to the B.C.A.T.P. This committee drew up a form of contract as between the Crown and the individual operating companies, in most eases sponsored by the flying clubs. It had no experience to draw upon; yet the form of contract has functioned fairly satisfactorily with the exception that the remuneration proved somewhat generous and took the following form:

(a) Savings on management fee.

(b) Profit per flying hour.

(c) Savings on gasoline and oil.

(d) Savings on crash reserve.

(e) 25 per cent savings on operation and maintenance.

The contract provided for an adjustment between the contractual parties at the end of each 24 weeks period to be based on the experience of the previous 24 weeks.

The schools were originally opened to provide for a pupil population of 48 and all were from time to time increased to a pupil population of 90, 120, 180 or 240.

These increases detracted from the value of the cost of operation experience gained when endeavouring to apply these in adjusting the allowances by the crown.

The various sources of profit or savings which I have mentioned also tended to complicate the situation and this was brought out at the enquiry before the parliamentary committee.

In an endeavour to simplify the situation, the operating companies voluntarily agreed to reduce their flying hour profit from 50 cents to 25 cents and later to eliminate it.

They also agreed to forgo profits or savings on gasoline and oil as well as on their crash reserve. No fees were paid to directors and the only disbursement made out of profit was the 5 per cent dividend on the subscribed capital.

All surplus funds accruing in the hands of the operating companies were invested in noninterest beai'ing certificates of the Dominion of Canada.

When the contracts were renewed as on the 1st April, 1943, the above concessions were legalized, management was included in operation and maintenance and all savings on operation and maintenance were made divisible as to 80 per cent and 20 per cent between the crown and the companies, instead of 75 per cent and 25 per cent as heretofore.

These concessions or modifications have resulted in considerable savings to the crown. At the same time the subscribed capital of these companies was refunded to shareholders out of surplus in the hands of the companies, thus eliminating the dividend.

The companies have now only one source of profit which is the savings on operation and maintenance and the contract declares ". . . that any savings or profits accruing shall not be distributed and shall be held by the company in a reserve account until the termination of the contract and shall then be paid to a flying club approved by the minister, failing which they shall revert to the crown."

During the operation of these contracts, the pro forma or basis for payment to these companies have been carefully revised at the end of each 24 weeks period and despite the revision downwards per pupil population intake, the companies, through increased efficiency in operation, have continued to make savings, some of them more than others, depending upon the efficiency in operation, the terrain in which they function, etc.

The modifications in the terms and conditions of the contract and the concessions demanded from time to time have been immediately and generously conceded by the operating companies who have declared that they are more anxious to do a good job than to make profits. Their only desire is that upon completion of the contract, each school will be able to hand over

War Appropriation-Air Services

to its sponsoring flying club sufficient funds to rehabilitate its club so that it may in the post-war period continue in advancing civil aviation in Canada.

A special form of charter and by-laws under part II of the Dominion Companies Act have been drawn up and approved by my department under which any club benefiting from these profits must be incorporated and w'hich protect such profits in the hands of the flying clubs from being exploited.

A meeting of managers of all E.F.T.S. was held lately when they agreed to recommend to their directors that all and any profits or

savings, accruing from the operation of their school and in turn to their sponsoring flying club, be limited to $5,000 per annum. Resolutions of the board of the various operating companies to this effect are now being received.

Of the 80 per cent savings in operations $1,951,404.40 has actually been returned to the crown and a further $1,250,000 is now available for return, for which demands are being sent out this month, in accordance with the terms of the agreement.

Up to 2nd January last, 38,775 pupils have graduated from E.F.T.S. at an average cost of $911.55 per pupil.

Statement Showing Financial Situation Between Companies Operating Elementary Flying Training Schools and the Crown as on 2nd January, 1944

E.F.T S. Excess of allowances over expenditures 80% returnable to Crown Balance remaining (see Note 3) Returned to Crown on account of 80%

No. of School Name and address

S cts. $ cts. $ cts. $ cts.2 Thunder Bay Air Training School, Ltd., Fort William, Ont. 208,546 62 166,837 30 41,709 32 108,896 934 Windsor Mills Flying Training School, Ltd., Windsor Mills, P.Q. 96,409 82 77,127 85 19,281 97 10,000 005 High River Flying Training School, Ltd., High River, Alta. 342,896 86 274,317 49 68,579 37 150,000 006 Northern Saskatchewan Flying Training School, Ltd., Prince Albert, Sask. 205,669 53 164,535 62 41,133 91 73,000 007 Windsor Flying Training School, Ltd., Windsor, Ontario. 184,276 48 147,421 18 36,855 30 95,000 009 St. Catharines Flying Training School, Ltd., St. Catharines, Ont. 257,487 59 205,990 07 51,497 52 146,028 8410 Hamilton Flying Training School, Ltd , Pendleton, Ontario. 186,623 22 149,298 57 37,324 65 40,431 6011 *Quebec Airways (Training) Limited, Cap de la Madeleine, P.Q. 284,528 47 227,622 77 56,905 70 89,332 5712 Huron County Flying Training School, Ltd., Goderich, Ontario. 351,883 43 281,506 74 70,376 69 169,612 9213 Eastern Ontario Flying School, Limited, St. Eugene, Ontario. 234,963 37 187,970 70 46,992 67 55,000 0015 Regina Elementary Flying School, Limited, Regina, Sask. 387,123 56 309,698 85 77,424 71 215,000 0017 Nova Scotia Flying Training School, Ltd., Stanley, N.S. 109,791 73 87,833 38 21,958 35 19 Virden Flying Training School, Ltd., Virden, Man. 322,347 83 265,878 26 66,469 57 125,949 2820 Ontario County Flying Training School, Ltd., Oshawa, Ont. 224,521 28 179,617 02 44,904 26 76,215 878 and 24 fVancouver Air Training Company, Limited, Abbotsfortd, B.C. 269,343 22 215,474 58 53,868 64 31 Malton Flying Training School, Ltd., De Winton, Alberta-now- De Winton Flying Training School, Ltd., De Winton, Alta. 250,933 27 200,746 62 50,186 65 110,000 00

War Appropriation-Air Services

Statement Showing Financial Situation Between Companies Operating Elementary Flying Training Schools and the Crown as on 2nd January, 1944-Con.

E.F.T.S. Excess of allowances over expenditures 80% returnable to Crown Balance remaining (see Note 3) Returned to Crown on account of 80%

No. of School Name and address

$ cts. $ cts. S cts. $ cts.32 Edmonton Flying Training School, Ltd., Bowden, Alta. 215,042 95 172,034 40 43,008 55 128,936 3933 t Boundary Bay Flying Training School, Ltd., Caron, Sask. 476,920 32 381,536 26 95,384 06 155,000 0034 now 25 Central Manitoba Flying Training School, Ltd., Assiniboia, Sask. 188,410 97 150,728 78 37,682 19 133,000 0035 now 26 Miramichi Flying Training School, Ltd., Neepawa, Man.-now- Moncton Flying Training School, Ltd., Neepawa, Man. 251,584 77 201,267 82 50,316 95 70,000 00

* All Savings revert to the Crown.

t Vancouver Air Training Co., Ltd., and Boundary Bay Flying Training School, Ltd., have undertaken to surrender all Savings accruing from the operations of No. 8, Vancouver, B.C., No. 18, Boundary Bay, No. 33, Caron, and No. 24, Abbotsford, B.C., with the exception of $30,000.00 set aside for Aero Club of B.C. (sponsoring Club) subject to approval of Minister.

Note (1)-From the surplus arising through excess of Allowances over Expenditures the subscribed Capital of the Operating Companies has been refunded and necessary working capital provided.

Any surplus funds remaining in the hands of the Operating Companies over Working Capital requirements varying with the size of the School are invested in Dominion of Canada NonInterest Bearing Certificates.

Note (2)-No. 1-Malton was transferred to No. 31 E.F.T.S. Do Winton, Alta.

No. 3-London, Ont., closed 3rd July, 1942.

No. 8-Vancouver, was transferred to No. 24 E.F.T.S. Abbotsford, B.C.

No. 14-Portage la Prairie, Man., transferred to No. 25 E.F.T.S. Assiniboia, Sask.

No. 16-Edmonton, Alta., transferred to No. 32 E.F.T.S. Bowden, Alta.

No. 18-Boundary Bay, B.C., transferred to No. 33 E.F.T.S. Caron, Sask.

No. 21-Chatham, N.B., transferred to No. 26 E.F.T.S. Neepawa, Man.

No. 22-Ancienne Lorette, Que., closed 3rd July, 1942.

Note (3)-Out of these sums the Companies have paid Income Tax and dividends at the rate of 5% per annum up to 31st March, 1943 (date of Renewal and Modification of Agreement) when subscribed capital was refunded out of surplus earnings. Any residual amount, in accordance

with paragraph 5 of Schedule II of Agreement, ".shall not be distributed and shall be held

by the Company in a reserve account until the termination of the Contract and shall then be paid to a Flying Club approved by the Minister, failing which it shall revert to the Crown."

24th May, 1943.

1. Yes, in accordance with regulations laid down by national war labour board.

2. Yes.

1. (a) (i) One officer of the permanent force.

(ii) Three permanent force officers presently on retirement leave-two retirements effective in June and one in July, of this year.

(iii) Five permanent force officers whose retirements have been authorized but not yet promulgated.

(b) Nil.

(c) Nil.