1963-06-24

Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, this is the feast day of St. John the Baptist, the patron saint of French Canada. I am sure I speak for all hon. members of this house and especially, may I add, for those of the English language, when on this day I extend to our countrymen of French language and culture in the province of Quebec and elsewhere in Canada an expression of sincere good wishes and deep respect. Down the years French Canadians have drawn on deep reservoirs of courage and faith, dedication and vitality, in making their indispensable contribution to the development of our country while maintaining their special loyalty and devotion to their own rights and traditions within that country.
On this day of commemoration for one of the founding races in the great partnership of confederation I think we would do well to remember that diversity and not uniformity of race and culture is the essential and basic characteristic of Canadianism. This need not, however-I suggest must not-lead to any sacrifice of unity in the achievement of a common Canadian purpose. Other Canadians can share in the pride of French Canadians in their own traditions, their own culture and their own language, just as all Canadians of whatever origin and culture can share in the resolve to work together to realize a common future and a good future within confederation.
This is also, Mr. Speaker, what is known in Newfoundland, I believe, as Discovery day. It is a day which has particular meaning in the history of Canada, for it was on this day 466 years ago that the redoubtable explorer John Cabot had the great good fortune to discover a land that became the ancient colony and is now the Canadian province of Newfoundland.
I am certain that all hon. members of this house will join me in paying a sincere tribute to the vigorous, warm hearted and courageous people of that land. How fortunate we are to have them in confederation. We owe much to John Cabot, Mr. Speaker.
(Translation):


Right Hon. J. G. Diefenbaker (Leader of ihe Opposition):: St. John the Baptist's day awakens in every French Canadian deep and lasting memories. This fine day is the occasion for celebrations as imposing as they are colourful.
The festivities recall the traditions of the French Canadian people and quicken their patriotism.
St. John the Baptist was chosen as patron of French speaking Canadians because of his courage, his strength, his humility and his great faith.
French Canadians are justified in being proud of their past and of their present contribution.
On this significant day in the history of Canada, I extend my best wishes to all French Canadians.
(Text):
Mr. Speaker, I join in the words expressed by the Prime Minister regarding Newfoundland, this being Discovery day. I would add my word of tribute to the people of that great island and province, and on behalf of all of us say how very much their joining Canada has added to the strength of our country. I am glad that the tribute was paid to John Cabot, though the Prime Minister turned to his right and indicated that he had another John in mind.
(Translation):


Mr. Marcel Lessard (Lake Si. John):: Mr. Speaker, I am pleased, on behalf of my fellow French Canadians, to acknowledge the kind words just spoken by the Prime Minister (Mr. Pearson) and the Leader of the Opposition (Mr. Diefenbaker).
Today, June 24, feast of St. John the Baptist, is the national holiday of French Canada.
I know that the more than six million French Canadians scattered all over Canada are commemorating this day, June 24.
In view of the fact that the French Canadians are the descendants of the brave pioneers who set foot first on the soil of America and that they are today the most important ethnic group in Canada, it is fitting to recall their national holiday.
Mr. Speaker, I feel that a new era is beginning today for the French Canadians and I hope that many other anniversaries will follow. In view of the increased good will between the two main ethnic groups in
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St. John the Baptist Day Canada, I am sure that we can hope in the years to come to see that understanding deepen; and then, hand in hand, we will be able to build a strong and powerful Canada, one that will belong to Canadians.
(Text):


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, as a Baptist it is a particular pleasure for me to extend greetings to our French Canadian friends on this, the national holiday of French Canada, St. Jean Baptiste day. We sincerely hope that our friends the French Canadians on this day will be able to celebrate this great holiday of theirs and work out together with us that great partnership within confederation which was the dream of the founders of Canada.
It is rather significant that the newly elected Pope, Pope Paul VI, has as two of his Christian names Giovanni Battista, which is the Italianized form of John the Baptist and which I am sure will give the French Canadian population of Canada a feeling of kinship with the new Pope.
I also join with the Prime Minister in paying tribute to the province of Newfoundland on this day when they are celebrating the 466th anniversary of the discovery of that great island, and I express the hope that the province of Newfoundland will continue to be a happy member of the Canadian family of provinces.
(Translation) :


Hon. Lionel Chevrier (Minister of Justice):: Mr. Speaker, I am glad to join the preceding speakers in offering my congratulations to my fellow countrymen in the province of Quebec as well as in the other provinces, on our national holiday.
On this occasion I would also like to thank the Prime Minister (Mr. Pearson) who, in the name of English speaking Canadians, was kind enough to offer congratulations to my fellow countrymen.
In the last few years an unusual evolution has been taking place in all spheres in the province of Quebec. It is by taking that evolution into account that the new Canadian government wants confederation to develop from now on according to the principle of equality between the two peoples who founded our nation, allowance being made for the contribution of other national groups to the cultural enrichment of our country.
Some of my fellow citizens suggest that we follow the way towards separatism. As far as I am concerned, I am convinced that this is bound to lead to serious disillusions. The only course acceptable is the one which will allow us to become equal partners in a renewed confederation.


Such is the purpose of the new Canadian government and such is the wish of the major part of our people. This wish I express with joy and pride on this national day.
I should like also to congratulate our colleagues and our countrymen from Newfoundland on this anniversary of the day of discovery.


Mr. Gerard Girouard (Labelle):: Mr. Speaker,
I rise on a question of privilege. With reference to the fine words of the hon. Minister of Justice (Mr. Chevrier) and as we are celebrating today our national holiday, I am asking the government to hoist immediately on the Peace tower the fleur-de-lis flag as a tribute to French Canadians.
This in no way would be illegal, since Canada has no national flag at the present time.
(Text):

Mr. Robert Muir (Cape Breton North and
Victoria): Mr. Speaker, I have a question for the Prime Minister. In view of the remarks
made by the Prime Minister at the commencement of today's proceedings, is he aware that the Cape Breton historical society, led by the president of the ladies Liberal association of my riding, is today celebrating the landing of John Cabot on Cape Breton island? In fact the ceremonies are on just about at this time.


Lester Bowles Pearson: Mr. Speaker, I knew I was treading on matters of very immediate controversy as well as of great historical significance, and I am sorry if I offended my hon. friend and any of his friends by giving the wrong pronunciation to the name or even suggesting that he went to the wrong place.



FINANCE


Hon. J. R. Garland (Minister of National Revenue):: Mr. Speaker, as I indicated on Friday to the hon. member for Medicine Hat I should like to make an explanation today with regard to the application of the sales tax on building materials and production machinery.
In the budget speech the Minister of Finance indicated that relief would be granted where a manufacturer or contractor is prevented by a fixed price contract from including the new tax in his selling price. The provision for this relief is found in paragraph 13 of the excise tax resolution.
This provision for refunds covers all building materials and production machinery for which exemption from tax has been withdrawn by the resolution. It covers both

manufacturers and contractors but the procedure to be followed in these two cases differs.
The first situation where relief is granted is where a person, such as a manufacturer or licensed wholesaler, is required to pay-sales tax on his sales after budget date but is prevented by reason of a contract signed before June 14, 1963 from adding this tax to the price at which he sells the said goods. In order to qualify for a refund the goods must be sold and delivered before June 14, 1964. The relief will take the form of a refund of the tax to the manufacturer or licensed wholesaler, or the granting of a deduction for an amount equal to the tax from the total amount of sales tax otherwise payable by the manufacturer or wholesaler for the month. The manufacturer or wholesaler does not have to make formal application for the refund. In practice he will likely refrain from paying the tax in question to the government and will satisfy the tax auditor by producing the written contract.
The second situation where relief is granted is where a person, such as a building contractor, has not paid the tax directly. He finds on the one hand that the building materials he must purchase after budget date have been increased in price by the addition of the sales tax but on the other hand he is prevented from making a corresponding increase in the price of the building he is constructing by reason of a fixed price contract signed by him before June 14, 1963. The relief in this case takes the form of a payment by the Minister of National Revenue to the contractor equal to the amount of the tax paid on the goods purchased by the contractor. In order to qualify for this payment the goods must be delivered before June 14, 1964 and the contractor may make application to the Minister of National Revenue at any time but not later than June 14, 1966.
It will be noted that the contract fixing a price must be in writing and have been signed by the parties thereto before June 14, 1963. It should also be noted that refunds, however, cannot be made until after this house has passed the enabling legislation.
There are different types of contractual obligations, and where a person is in doubt as to whether or not his contract comes within the relieving provision it is recommended that the contractor or vendor submit a copy to the Department of National Revenue for review. We are presently reviewing various contracts which have been referred to the Department of National Revenue.
When the sales tax exemptions for building materials and production machinery and
24, 1963	1471
Statement on Building Materials Sales Tax equipment were withdrawn on June 13, certain exemptions for specified purchasers were left untouched. These include the following:
1.	Articles and materials for the sole use of any bona fide public hospital certified to be such by the Department of National Health and Welfare continue to be exempt. This exemption includes building materials purchased to build a hospital.
2.	Purchases by any institution certified by the Minister of National Health and Welfare to be a public institution whose principal purpose is to provide shelter and care for children or aged, infirm or incapacitated persons who reside in the institution will continue to be exempted by way of refund. This will provide an exemption for building materials used to build such old folks' homes, orphanages, etc.
3.	Municipalities will continue to benefit from the exemption from tax on their purchases of the goods listed in schedule III under the heading "Municipalities". These include:
Culverts; diesel fuel oil for use in generating electricity; equipment at a price in excess of $500 per unit specially designed for road making, road cleaning, or fire fighting; fire hoze and nozzles; fire truck chassis; laminated timber for bridges; precast concrete shapes for bridges in public highway systems; structural steel and aluminum for bridges.
The excise tax resolution proposes that goods forming part of sewerage and drainage systems be exempt from sales tax when sold to or imported by a municipality for its own use and not for resale. This exemption will also cover purchases of materials for sewerage and drainage systems by subdividers or building contractors who are required to instal these services and turn them over to a municipality.
4.	Crushed stone, sand, gravel and fieldstone continue to be exempt.
5.	Farm machinery including farm tractors and equipment used in commercial fishing continue to be exempt.
I should add that the Department of National Revenue is doing its utmost to be of assistance to all concerned. Any person manufacturing or producing goods which he has reason to believe might now be taxable should get in touch with the nearest excise tax or customs office. These officers are to supply him with a brief questionnaire the answers to which will indicate whether or not he is required to be licensed. He will be supplied with copies of the Excise Tax Act and the budget resolutions as well as a copy of the general regulations. Although the initiative rests with
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Statement on Building Materials Sales Tax the manufacturer to take the first step, the department is proceeding on its own to send out questionnaires and the above information to those whom they know or feel would be concerned.
As there seems to have been some misunderstanding as to the level at which the sales tax applies, I should point out that it is a manufacturers' tax and, therefore, applies at the first step in the distribution process. Perhaps I can best illustrate this by reference to its application to building materials used in the construction of a single detached house financed under the N.H.A. which act is administered by the Central Mortgage and Housing Corporation for which I report to parliament.
The average single detached house financed under N.H.A. in 1962 had a total cost of $15,233 of which $12,204 was for construction. It is estimated that of the $12,204 for construction costs, building materials account for $5,500, the remainder being labour costs and allowances for overhead and profit, etc.
In assessing the effect of the sales tax, two circumstances must be taken into account. First, even prior to the recent budget announcement, the sales tax was being paid on certain building materials. Manufactured kitchen cabinets, electrical wiring and plumbers' piping were among these. These items accounted for about 5 per cent of the value of building materials used in the average house. Second, the sales tax is applied to the manufacturers' sale price, that is: before the mark-up for overhead and profit applied by dealers and other distributors of the building materials.
When allowance is made for these considerations, it is estimated that the 11 per cent sales tax to be applied to building materials not formerly taxed will be based on the manufacturers' sale prices of $3,913. This implies an increase in tax for the average N.H.A. house of $430.
Of course, when we look at the effect on an N.H.A. financed house we must also take into account the effects of other measures included in the budget. I refer particularly to the increased loan amount that will be available in the N.H.A. and the reduction in the maximum N.H.A. rate of interest. The effect of these measures is, in fact, to reduce the down payment and leave the monthly carrying charges approximately the same.
I hope the explanations I have given today will prove to be helpful. It is realized, of course, that in an over-all explanatory statement of this kind it is impossible to envisage and answer all individual situations and cover all possible questions. I suggest, however, that there will be other opportunities where it is customary to deal with such


particulars in greater detail. These opportunities will come when the house is in committee to debate the budget resolutions and, subsequently, to consider the provisions of the bill to amend the Excise Tax Act.
Meanwhile the department will continue to answer questions referred to it and assist the taxpayers in any of their problems.
In order to be of assistance to persons who believe they are entitled to relief because they are a party to a fixed price contract, as explained earlier, the department is willing to examine their contracts if they wish to forward them to the customs and excise division in Ottawa before they go to the work of preparing their refund claims.


Mr. H. A. Olson (Medicine Hat):: I am
sure all members of the government will welcome what has been said by the Minister of National Revenue in clarification of this regulation. I personally appreciate the effort he has made in giving us at least a partial explanation of the application of this new tax.
If I understood him correctly, he said there would be refunds in respect of all building material going into jobs where there had been fixed contract prices. I think this would include such things as the Peace river dam, which was contracted prior to June 14. I understand that negotiations with the federal government are now being carried on with regard to this matter. Here there is still an area of confusion, because all the material to be purchased in connection with this contract would certainly not be purchased before June 14. I was happy to hear the minister say that some exemptions would be made in the case of social services and development schemes carried out by municipalities; also that there would be exceptions made in the case of institutions designed for the shelter and care of children and the aged.
However, there were one or two things which were not explained. I refer to the collection of this tax at what I took the minister to mean the primary level, and I have in mind in particular the lumber industry. Are we to understand there would be no sales tax, for example, on windows and doors, which merely represent the secondary stage of manufacture, and that the sales tax is to apply only to the raw material, or the first stage of manufacture? It would appear that this would come under the heading of rough lumber only. However, I am not sure this is the meaning to be drawn from what the minister has said. Obviously we should not like to see a situation where

there would be double taxation applicable to these secondary stages of building material manufacture.


John George Diefenbaker: Mr. Speaker, I think there will be general disappointment at the announcement made by the hon. gentleman. While his statement does remove one or more of the anomalies in connection with the imposition of this tax, 1 feel he should have gone further and that consideration should have been given to the withdrawal of these charges, which cannot but have a colossal adverse effect on production and economic growth in our country. A patchwork of this kind simply emphasizes the fact that insufficient study was given to this matter before the tax was imposed.
There is one phase with which I should like the minister to deal. Apparently the government intends to push this through regardless of the avalanche of criticism which has come from all parts of this country. The Question I have in mind is this. Where large construction projects have been agreed upon by corporations or individuals and the tenders have not yet been let, is it the intention to impose the tax as of June 14? If it is, I am sure that many projects running into the tens of millions of dollars will be denied unless action is taken in this respect. I do not wish to go into the details mentioned by the minister; these details are insignificant when compared with the problem as a whole and the possible detriment to the Canadian economy at this time.


John Richard Garland: I am reluctant to answer these questions off the top of my head when they concern a matter as important as this, but it seems to me the question which the former prime minister has raised is one which could be discussed more properly when the resolutions are being debated. Today I am simply interpreting the resolution as it appears.


Mr. Reid Scoff (Danforth):: Speaking for the New Democratic party may I say we were glad to hear the hon. gentleman's statement, which has to some extent alleviated the worst features of this tax on materials. I am glad to see that some exemption from the effect of this tax will be granted with respect to certain public institutions such as hospitals and homes for the aged. It is regrettable, though, that no exemption is provided in the case of schools, universities, certain provincial programs, public investment programs and private investment projects.
Notwithstanding the minister's remarks, we are firmly of the opinion that the whole tax is a regressive move. It has singled out
North Pacific Fisheries Treaty the most important and sensitive section of the development part of the economy, and it is bound to affect adversely our development program from coast to coast. We believe it is incompatible with the government's announced aim of obtaining full employment. On the one hand it holds out the hope of increased revenue, while on the other it sets in progress a movement in the economy which will reduce employment, increase the price of houses, and likely reduce the government's total income. In this regard I would endorse the words of the Leader of the Opposition; having begun to back down on this tax it would be more appropriate for the government to withdraw it entirely.



FISHERIES


Hon. H. J. Robichaud (Minister of Fisheries):: I should like at this point to make a further report to the house on the progress of the north Pacific treaty negotiations which commenced in Washington, D.C. on June 6. These negotiations recessed on June 21 and are tc recommence this autumn.
As many hon. members already know, the present international convention for the high seas fisheries of the north Pacific ocean came into force June 12, 1953, for a definite period of ten years, after which it could be terminated on one year's notice by any one of the three parties, that is to say Canada, Japan er the United States. The ten years are now over and the recent conference was held at the request of Japan to consider the possible need for modification of the convention.
The present convention, alone among all fisheries treaties, embodies the principle of ahstention. Under this principle if one or more of the parties are exploiting a fish stock to the full and are restricting their fishing by regulations based on scientific research in order to maintain that fish stock at a productive level, the other party or parties will abstain from entering the fishery.
In accordance with this principle Japan, under the present convention, is required to abstain from fishing the important salmon, halibut and herring stocks of North American origin, and Canada abstains from fishing salmon in the Bering sea. Our fisheries have in this way had a very large measure of protection from the expanding Japanese high seas fishing operations. There have been some difficulties in the application of the principle of abstention, but our experts believe that no stocks which do not qualify now remain under abstention and that all stocks which qualify are presently under abstention. Continuation of the present convention, including
1474	HOUSE OF
North Pacific Fisheries Treaty the abstention principle, is thus very important to the Pacific fisheries of Canada.
This convention has not been popular in Japan because it has restricted the expansion of their fisheries in the northeastern Pacific. Early during the present negotiations the Japanese delegation proposed a revision of the treaty to eliminate the principle of abstention, which they claim to be monopolistic and contrary to generally accepted principles of freedom of fishing on the high seas. With this principle removed the convention would provide for joint conservation measures, but would not afford protection to the fisheries which have been brought by Canada and the United States to high levels of utilization and productivity through great efforts on the part of our two countries.
During the negotiations the Canadian delegation supported the principle of abstention, claiming that the last ten years have shown it to be an equitable and workable means of maintaining the unique fisheries to which it applies in the north Pacific. Our delegation pointed out that the abstention principle had majority support at the conference on the law of the sea and has achieved a large measure of international recognition. The Canadian delegation also pointed out that not only are the stocks of salmon, halibut and herring, to which the abstention principle applies, fully utilized by our fishermen but have been maintained at their present high productive levels by strict regulation of our fisheries based on scientific research.
Furthermore, our countries have brought these fisheries to their present high levels of utilization and productivity at considerable cost, not only for research and enforcement of restrictions on our fishermen but, especially in the case of salmon, through positive fish culture measures and through abstaining ourselves from using the rivers in which the salmon are bred for other purposes such as power development, irrigation, waste disposal, etc. The maintenance of these fisheries, already difficult and expensive, would become almost impossible if the benefits of these measures were not reserved for our own fishermen. The Canadian and United States delegations were in complete accord in insisting on the continued inclusion of the abstention principle in the north Pacific treaty.
During the conference there has been an exchange of views which has clarified the positions of the three parties. The convention has defined the problems and indicated in a preliminary way some of the possible means of solving them. One of the most difficult problems is caused by the intermingling on the fishing grounds of halibut which require


protection under the abstention principle with larger stocks of other bottom fish which are not now intensively fished by the United States and Canada and from which Japan has no obligation to abstain. The problem here is to devise means by which Japan can make use of these stocks, some of which are already being fished extensively by the Soviet union, while at the same time affording protection to the halibut fisheries which have been maintained at a high level by a convention between the United States and Canada which is one of the oldest and most successful fisheries treaties in existence.
Although Canada, Japan and the United States all agree that a convention among our three countries is necessary to maintain the fisheries of the north Pacific in the interests of the fishing industries of our three countries, no agreement has yet been reached regarding modification of the present convention to this end. The Canadian delegation believes that all these problems, including both the special protection for our unique salmon, halibut and herring fisheries and the conservation of the north Pacific fisheries generally, can be solved within the framework of the present convention and will endeavour in the further discussions planned later this year to bring this about.
I would reiterate, Mr. Speaker, that any tentative agreements reached during these negotiations will be fully discussed before the standing committee on marine and fisheries before final acceptance by the government.


Hon. J. A. MacLean (Queens):: Mr. Speaker, on behalf of the official opposition I welcome this statement from the minister, but I think in common with Canadians everywhere I regret the unfortunate circumstances which made an agreement of this type apparently not possible at this convention in Washington.
However, I do agree with the minister that the retention of the abstention principle with regard to this fisheries treaty is of vital importance to Canada. As the minister pointed out, Canada and the United States have large investments in these stocks of fish and have reserved various rivers for their use so that it will be possible to reproduce their kind. Both countries have large investments in fishways and other assistance to the migration of fish, along with the greater amount of public funds which have been invested in research in this regard. Therefore Canada and the United States have a special proprietary right to these stocks of fish, and it is the hope of myself and my colleagues that this right can be protected, that an agreement will be reached eventually which will retain the abstention principle, and that the treaty may

be maintained under all circumstances for the future orderly development of the living resources of the north Pacific.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, we welcome the report of the Minister of Fisheries relative to the meetings which have just been held. I am sure all members of the house realize the importance of the matters which have been discussed in this connection. Even though some of them may have had special application to the west coast, we are glad that hon. members from all parts of Canada recognize the vital importance of the Pacific fisheries oft our west coast.
We appreciate the stand which has been taken by the Canadian delegation with respect to the maintenance of the abstention principle. There had been widespread fears that Japan was endeavouring to take over piece by piece until they would have unrestricted right to exploit the fisheries, and this question has been brought to the attention of the minister on a number of occasions. We are happy that the delegation has insisted on the retention of this principle, and we do trust that in future negotiations this position will be maintained.
We are also happy today to hear that these matters will be referred to the committee on marine and fisheries before any final decision is taken with respect to them. This is something we have been requesting, and we trust that all these matters relative to the fisheries industry will be presented to the committee for consideration and recommendation.


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I am sure hon. members of the house are glad that the Minister of Fisheries has given us a rather lengthy statement on the negotiations which took place in Washington with respect to the north Pacific fisheries treaty. I must say that I feel the minister has not really told the house a great deal of what actually went on in Washington. Most of his statement outlined the provisions of the present treaty, and in so far as that was done I think it may serve to give all hon. members of the house who are not intimately acquainted with this treaty a full understanding of what is involved, and from that point of view I welcome his rather expansive statement in this connection.
I was certainly glad to hear him say that our delegation in Washington took a position on the question of the retention of the abstention principle. I hope this position was a strong one and that the other delegations from the present member nations of the treaty did not go away from these preliminary discussions with any idea that Canada would cavalierly or lightly accept any modifications in this connection. I think it is important that all
28902-5-94J
Questions
members of this house recognize just how vital a question this is to the Canadian nation, and that it is not something which should concern only those of us who happen to live near the shores of the Pacific ocean.
I do most heartily welcome one statement the minister made, if I heard him correctly, when he said that the marine and fisheries committee would have an opportunity of going into this matter prior to any final decision being reached by the Canadian government. I think that is perhaps the most significant part of the minister's statement for those of us who have been attempting to follow developments in this connection. I would have welcomed some indication from the minister that the delegations of the various nations in Washington who are now members of the current treaty had given consideration to and discussed the advisability of inviting other nations in the Pacific basin to participate in a newly negotiated treaty, if it is going to be revised.
The minister has not given us any indication that this will be done, and I think the house should recognize that there are some indications that other nations are taking an interest in this matter. My questions to the Prime Minister in this connection have not led to anything very conclusive, but certainly I think we all recognize that at least one other nation is vitally concerned in the north Pacific fishery, and perhaps consideration should be given to having that nation included in the treaty.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Pigeon: 1.	Who is responsible for the education of Indians in Canada?
2.	Are both official languages taught in their schools?
3.	What school textbooks are used in Indian schools and who is responsible for their preparation or selection?


Mr. Munro:: 1. Subject to the provisions of the Indian Act, the federal government is responsible for the education of Indians in Canada.
2.	The program of instruction in Indian schools is that of the province in which the Indian school is located. The extent to which both official languages are taught in Indian schools therefore depends upon the structure of the provincial course of studies.
3.	The text books used in Indian schools are those authorized by the provincial governments. The text books are prepared and

Questions
selected under the guidance of the provincial departments of education or their counterpart.


R.C.M.P. BARRACKS, SELKIRK CONSTITUENCY
Mr. Slefanson: 1.	How many R.C.M.P. detachment barracks were built between March 31, 1958 and April 8, 1963, in the federal constituency of Selkirk?
2.	Where are these located; when, and at what cost, were they built?
3.	Have sites been bought at other locations for R.C.M.P. detachment barracks and, if so, where and when have sites been purchased, from whom, and at what cost?
4.	When are tenders expected to be called, and work to be completed?


Mr. Macdonald:: 1. Three.
drug directorate. The Food and Drug Act does not grant any authority for approving the marketing or use of any pesticides.
With respect to pesticide formulations the Food and Drug Act provides authority only for the control of residues of their toxic ingredients in or upon foods.
ages of veterans and veterans widows


Mr. Mather: 1 Approximately how many first or second world war veterans of the Canadian forces are between the ages of 65 and 70?	.
2.	Approximately how many veterans widows are
between the ages of 65 and 70?
3.	Is consideration being given to making veterans and veterans widows eligible for old age assistance Dension benefits without the means test.
2.	Selkirk, Manitoba, built in fiscal year 1958-59 at contract price of $41,951. Lundar, Manitoba, built in fiscal year 1959-60 at contract price of $47,012. Gimli, Manitoba, built in fiscal year 1961-62 at contract price of $31,291.
3.	Yes, Teulon, Manitoba in 1962 from the United Church of Canada at a cost of $750. Ashern, Manitoba in 1962 from Mrs. Alice E. Irwin at a cost of $600.
4.	No funds have been provided in the 196364 R.C.M. police estimates for construction at Teulon and Ashern, Manitoba, and consequently it is not known when tenders will be called or the work completed.


* PEST-KILLING PRODUCTS SOLD IN CANADA
Mr. Fairweather: 1.	Are any of the following pest-killing products
now being marketed in Canada:	(a) Algimycin
200 (b) Algimycin 300 (c) Hari-Kari Lindane tablets (d) Lindane pellets (e) Lindane "Bug Pill" tablets (f) Lindane "Vapo-Tabs" tablets (g) Perma-Guard?
2.	If so, has each of the products been approved by the food and drug directorate of the Department of National Health and Welfare?


Mr. Dupuis:: 1. Pest control products, before being marketed in Canada, are required to be registered under the Pest Control Products Act, administered by the Department of Agriculture.
"Lindane pellets" is a generic term applied to several lindane products. Lindane "Bug Pill" tablets are registered for fumigation, but not for continuous vaporization. Lindane "Vapo-Tabs" tablets are registered for continuous vaporization in commercial premises, but not for use in residences. "Hari-Kari Lindane" tablets were refused registration in Canada.
"Perma-Guard" is not registered.
"Algimycin 200" and "Algimycin 300" are not regarded as subject to the Pest Control Products Act.
2.	No, none of the products listed in question 1 has been approved by the food and


Mr. Pickersgill:: 1. It is estimated that there are approximately 76,700 veterans of the Canadian forces in world war I now living in Canada who are between the ages of 65 and 70. The corresponding estimate for world war II veterans is 3,900.
2.	It is estimated that there are approximately 26,000 widows of deceased members of the Canadian forces now living in Canada who are between the ages of 65 and 70.
3.	Old age assistance is administered and paid by the provinces under provincial law. Under the authority of the Old Age Assistance Act the government of Canada shares the cost of assistance paid by the provinces to the persons and under the conditions specified in that act and the regulations made under it. There has been no discussion by federal authorities with the provinces for the purpose of considering conditions of eligibility for veterans and veterans widows.


SENTENCES OF PREVENTIVE DETENTION
Mr. Howard: 1 Since January 1, 1960, has any application for a 'sentence of preventive detention been made under section 660 of the Criminal Code and, if so, for each month since that time what was, by provinces (a) the age of each individual (b) the number known to be narcotic addicts (c) the total number (d) the number of sentences so imposed (e) the number of applications still pending (f) the number of dismissals?
2.	With respect to each individual, what were the three separate and independent occasions upon which he had been convicted of an indictable offence, and for which he was liable to imprisonment for five years or more?
3.	By provinces, how many persons are presently serving a sentence of preventive detention, and how many of these have been so detained for (a) one year (b) two years (c) three years (d) four years
(e) five years (f) six years (g) seven years (h) eight years (i) nine years (j) ten years (k) eleven years (1) twelve years (m) thirteen years (n) fourteen years (o) fifteen years?
4.	How many persons who have been sentenced to preventive detention have been paroled after serving of that sentence (a) one year (b) two years (c) three years (d) four years (e) five years (f)
[Mr. Munro.I

six years (g) seven years (h) eight years (i) nine years (j) ten years (k) eleven years (1) twelve years (m) thirteen years (n) fourteen years (o) fifteen years, and how many have violated that parole?
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Donald Stovel Macdonald: 1 and 2. These applications are made to the courts and therefore the information is not available in the Department of Justice.
	N.B.	Que.	Ont.	Man.	Sask.	B.C.	Total
Less than							
1 year	1	5	1	3	101 year	1	1	3	52 years	2	1	3	4	103 years	2	1	1	1	1	1	74 years	1	1	1	2	55 years	1	2	36 years	1*	2	37 years	1	3	2	68 years	1	1	1	39 years	2	1	2	2	710 years	1	1	1	311 years	1	1	212 years	1	1	213 years	1	1	214 years	nil15 years	nilTotal	6	4	19	7	13	19	68
*One inmate confined provincial mental hospital since April 1959.
4.	Time served when paroled
(a)	one year to two	0(b)	two years to three	0(c)	three years to four	0(d)	four years to five	3(e)	five years to six	0(f)	six years to seven	13(g)	seven years to eight	15(h)	eight years to nine	8(i)	nine years to ten	3(j)	ten years to eleven	5(k)	eleven years to twelve	0(l)	twelve years to thirteen	0(m)	thirteen years to fourteen	0(n)	fourteen years to fifteen	0(o)	fifteen years and up	0Total	47
Parole violations
Revocations (breach of parole condition) 9 Forfeitures (further convictions)	2
Total	11


MORRIS-ROLAND, MAN.  MAIL CONTRACT
Mr. Jorgenson: 1.	Has the contract been awarded for hauling mail between Morris and Roland, Manitoba and, if so, who was the successful bidder?
2.	What were the names, and the amounts of each of the bidders?


Mr. Denis:: It is presumed that this question refers to the mail service between Morris and Myrtle, Manitoba, for which tenders have recently been invited. Mails for Roland are not routed through Morris, Manitoba.
1.	No.
2.	Winston Charles Watson, Myrtle, $1650; Clarence A. Fredrick, Box 179, Altona, $1950; Alvin H. Dyck, Box 84, Morris, $1950; Arnold Heinrichs, Box 176, Morris, $2000; Omer Laferriere, Morris, $2182.44; Daniel Lohr, Box 136, Morris, $2200; Arthur J. Desaulniers, St. Elizabeth, $2240; Reinhold J. Stober, Box 320 Morris, $2300; John R. Koop, Box 335, Morris, $2300; Henry K. Enns, Box 126, Lowe Farm, $2799.


FIREFIGHTING EQUIPMENT, NORTHWEST TERRITORIES
Mr. Rheaume: 1.	What firefighting equipment is now available at each of the following airports in the Northwest Territories (a) Fort Smith (b) Yellowknife (c) Inuvik (d) Frobisher Bay?
2.	What standards does the department of transport follow when providing firefighting equipment for airports under its management?
3.	Is the available equipment at the above northern airports adequate to meet minimum requirements and, if not, what steps is the department taking to improve the situation?


Mr. Cantin:: 1. The following crash firefighting equipment is now available at:
(a)	Forth Smith airport, one crash rescue truck (jeep); (b) Yellowknife airport, one crash

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rescue truck (jeep); (c) Inuvik airport, one crash rescue truck (jeep); (d) Frobisher Bay airport,
Department of Transport: One crash rescue truck (jeep); one crash fire truck; one crash fire water; nurse truck.
United States air force: One crash rescue truck; three crash fire trucks; one crash fire water; nurse truck.
2.	Standards for providing firefighting equipment on international and trunk airports operated by the Department of Transport are as follows:
Airports with 150 movements or more per ' month of aircraft operating at weights in excess of 200,000 lbs: 1 rescue truck; 2 crash trucks; 2 water trucks.
Airports with more than 50 but less than 150 movements per month of aircraft operating in excess of 200,000 lbs: 1 rescue truck; 2 crash trucks; 1 water truck.
Airports with 50 movements or more per month of aircraft operating at weights in excess of 120,000 lbs: 1 rescue truck; 1 crash truck; 1 water truck.
Airports with movements of 150 or more per month of aircraft operating at weights in excess of 60,000 lbs: 1 rescue truck; 1 crash truck.
3.	Up until recent changes were made in the aircraft used by the air lines to serve Fort Smith, Yellowknife and Inuvik, the firefighting equipment was adequate to meet the minimum requirements. With the introduction of larger aircraft at these airports some increase in the firefighting equipment may be required. The Department of Transport is presently developing an extension to the existing standards which will establish the firefighting equipment to be authorized for feeder airports such as these. The equipment available at Frobisher Bay airport is adequate to meet the minimum requirements.


MUNICIPAL TAXATION OF MAPLE LEAF SERVICES, CAMP BORDEN
Mr. Madill: Has the Minister of National Defence noted the report concerning Maple Leaf Services v. Townships of Essa and Petawawa in "Ontario Reports", issue of May 24, 1963, and will the minister consider the application of municipal taxes on an equalized basis against Maple Leaf Services, the retail organization operating at Camp Borden?


Mr. Cardin:: Yes, the effect of the judgment is that Maple Leaf Services is not liable to municipal taxation or business tax under the Ontario assessment act and there can be no application of municipal taxes on an equalized basis. As Camp Borden and Camp Petawawa are self contained defence establishments no grant in lieu of municipal taxes would be payable in respect to the buildings in question.

(Translation):


ELIGIBLE LIST, MONTREAL POST OFFICE
Mr. Valade: 1.	How many persons are on the eligible list for supernumerary jobs with the general post office in Montreal?
2.	Does the Post Office Department intend to award jobs on the basis of chronological order of job applications?


Azellus Denis: 1. There is no eligible list.
2.	N/A.


*NEW TRANS-CANADA HIGHWAY ROUTE, MONTREAL
Mr. Valade: 1.	Does the federal government intend to approve a new lay-out for the trans-Canada highway, as suggested by the Quebec minister of highways, in such a way as to allow the construction of a throughway along the shore of the St. Lawrence river on the island of Montreal?
2.	If such a change is approved, will the province of Quebec be able to benefit from federal government participation in costs of construction of the trans-Canada highway?
3.	When does the federal government intend to give a decision on this matter?
4.	Does Metropolitan boulevard, in Montreal, form part of the official lay-out of the trans-Canada highway?
5.	What sums have been paid to the province of Quebec for construction of this boulevard?
6.	Will such sums have to be reimbursed to the federal treasury if a second lay-out is approved?
7.	Has the Minister of Public Works or other members of the cabinet had meetings on this subject with (a) Quebec provincial authorities (b) the municipal authorities in Montreal and, if so, what are the results of these talks?


Mr. Badanai:: 1. Unofficial discussions have been held in that connection with representatives of the province and the latter was asked to submit its plans for the new lay-out of the highway but the plans have not yet been received.
2.	Yes.
3.	See answer to No. 1.
4.	Yes.
5.	No payment has yet been made in that respect.
6.	Yes, if payments are made in that connection under the present trans-Canada highway agreement.
7.	(a) Yes. (b) Yes, but no special proposal was made to the federal government.
(Text):



INDIAN AFFAIRS


[Stage Direction]
Question No. 455
Mr. Fisher:: 1.	What help or assistance in detail (personnel, type of personnel, days employed, type of project, results) did the Department of Forestry give the Indian affairs branch in the geographical areas of Ontario, Manitoba, and Quebec during 1963?
2.	If no help or assistance was given in one or any of these geographical areas, were any requests for such received from the Indian affairs branch?


Mr. Nicholson:: 1. Manitoba: No work has been done by the Department of Forestry on Indian reserves in Manitoba in 1963.
Ontario: A preliminary multiple use forest management plan for the Christian island Indian reserve No. 30 was prepared in 1963, based on a field survey made in 1961, and involved one forestry officer of the department spending the period June 10 to 14 on the reserve.
The Indian affairs branch requested air photography of nine Indian reserves in Ontario, with a total area of 199 square miles. Contracts for this photography have been placed by the interdepartmental committee on air surveys.
Quebec: No work has been done by the Department of Forestry on Indian reserves in Quebec in 1963. Air photography of Doncaster Indian reserve No. 17 and Weymontachi
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Indian reserve No. 23 was arranged by the interdepartmental committee on air surveys.
2.	No requests have been received beyond those included in a plan for forest surveys on Indian reserves previously agreed upon. One forestry officer and one technician are engaged full time on office compilation and mapping of such surveys and in an advisory capacity.



WORLD FAIR DIRECTORS

Mr. Fisher: 1.	Has the world's fair a board of directors?
2.	If so, what is the name, address, occupation and primary language of each director?
3.	Are meetings of the board carried on in French or English or bilingually with a translator?
4.	Is the fair considered to be primarily a Montreal or a national show and, if the latter, how is that part of Canada outside Montreal represented on the board?


Hubert Badanai: 1. Yes.
		Primary
2. Name and address	Occupation	languageT. Nobert Beaupre,	President,	English1190 Melville street,	British Columbia Forest	(Bilingual)Vancouver, B.C.	Products Limited.	Paul Bienvenu,	Commissioner General	FrenchSuite 2401,	Canadian World Exhibition	(Bilingual)The Royal Bank bldg., Place Ville Marie, Montreal 2, Que.	Corporation Montreal 1967.	Cecil F. Carsley, M.B.E.,	Deputy Commissioner General	EnglishSuite 2401,	Canadian World Exhibition	(Bilingual)The Royal Bank bldg., Place Ville Marie,	Corporation Montreal 1967.	
Montreal 2, Que. Jean Drapeau, Q.C.,	Mayor of City of Montreal.	French
City Hall,		(Bilingual)
Montreal, Que . Jean Lanctot,	President,	French2055 Favard street, Montreal, Que.	Rougier Inc.	(Bilingual)Herbert H. Lank,	President,	English1135 Beaver Hall Hill, Montreal, Que.	Du Pont of Canada Limited.	(Bilingual)Victor de B. Oland,	President,	English65 Hollis street, Halifax, N.S.	Oland & Son Limited.	Dr. Lucien Piche,	Vice Rector,	FrenchP.O. Box 6128, Montreal 3, Que.	University of Montreal.	(Bilingual)Claude Pratte,	Executive,	French105 Cote de la Montagne, Quebec City 2, Que.	Pratte & Cote Inc.	(Bilingual)Harry L. Price,	President,	English15 Toronto street,	Harry Price Insurance Ltd.	
Toronto, Ont.
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2. Name and address	Occupation	Primary languageMaurice Riel, Q.C., Suite 311, 10 St. Jacques street west, Montreal, Que.	Lawyer, Riel, LeDain, Vermette & Marin.	French (Bilingual)Andre Rousseau, Postal Box 188, St. Jean Port Joli, Que.	President, Rousseau Metal.	French (Bilingual)Lucien Saulnier, City Hall, Montreal, Que.	President, Executive Committee, City of Montreal.	French (Bilingual)Fridolin Simard, 3033 Jarry street east, ville St. Michel, Que.	President, Simard & Freres Cie Ltee.	French (Bilingual)3.	They are being held bilingually without a translator. All directors are supplied with bilingual copies of minutes, resolutions, etc.4.	The fair is definitely considered a national event. That part of Canada outside of Montreal is represented on the board by members from the provinces of British Columbia, Ontario, Nova Scotia and Quebec.



WORLD FAIR OFFICIALS

Mr. Fisher: 1.	Has the world's fair of 1967 any commissioners and planning and information heads and, if so, what are their names, occupations and primary language?
2.	Including these posts and the positions of directors, how many and what provinces would seem to have representatives?


Hubert Badanai: 1. Yes. Regarding commissioners see answer to question No. 473.
Mr. Claude Robillard is the director general of planning. He joined the World Exhibition Corporation following a 20 year experience in the same functions with the city of Montreal. It was felt that the location of the fair rendered his contribution a necessity. Mr. Robillard's primary language is French, although he is perfectly bilingual.
Mr. Guy Beaudry is the director of promotion and information services, after being with an advertising agency and the Montreal Star. Mr. Beaudry's primary language is French, though he is perfectly bilingual.
2. Four provinces: British Columbia, Ontario, Nova Scotia and Quebec.
^NATIONAL HIGHWAY SAFETY AUTHORITY


Mr. Malher: Has the government given consideration to contacting the provinces with a view to the establishment of a national highway safety authority for the purpose of taking steps to reduce the rising death toll on our highways?


Mr. Haidasz:: Yes, this matter was discussed by the dominion council of health on which the provinces are represented by their

deputy ministers of health or their chief health officers. The department is actively working in association with national medical, public health, and other interested groups, with a view to establishing an organization to stimulate and assist research into the medical aspects of traffic accidents.



CHAPLAIN SERVICES, ARMED FORCES

Mr. Fisher: 1.	Did the Department of National Defence attempt or carry out any consolidation of the chaplain services in the Canadian armed services within the past five years and, if so, what was the general plan, and how much was it designed to save in terms of senior postings, over-all number of personnel and dollars?
2.	What is the present situation of the chaplain services in the services in terms of unification or interpenetration of work?


Louis-Joseph-Lucien Cardin: 1. Integration of the chaplain services at national defence headquarters and at commands was introduced in 1958. The object was to facilitate policy direction at headquarters and command level. No significant reduction in senior postings or reduced costs was anticipated. Two senior positions were eliminated.
2. Each service retains its chaplain service with interpenetration at headquarters level as above and at some locations the chaplain of one service attends to the spiritual needs of all three services.



GOVERNMENT TRAVEL BUREAU ADVERTISING

Mr. Thompson: 1.	What amount was spent by the Canadian government travel bureau on advertising during the fiscal years 1961-1962 and 1962-1963?
2.	What agencies were being employed by the Canadian government travel bureau as of March 31, 1962, in placing advertising in Canadian and foreign newspapers, magazines, and other media, and how much was paid to each such agency during the financial year ending on that date?
3.	Since March 31, 1962, have the services of any of the above agencies been terminated and, if so, on what date, and for what reason?

4.	Since March 31, 1962, has the Canadian government travel bureau entered into contracts for the services of any other advertising agency or agencies and, if so, on what date, and for what reason?
5.	What agencies were retained for placing advertising in Canadian and foreign newspapers, magazines and other media by the Canadian government travel bureau during the fiscal year 1962-63, and how much was paid to each agency during that period?
6.	What plans, if any, does the government have to implement the recommendations of the Glassco commission in relation to the placing of advertising contracts by the Canadian government travel bureau?


Mr. Pepin:: 1. The Canadian government travel bureau spent the following amounts on advertising: 1961-62, $1,673,893.02; 1962-63, $1,817,451.02.
2.	The following is a summary of the agencies employed by the Canadian government travel bureau as of March 31, 1962, in placing advertising in Canadian and foreign newspapers, magazines and other media, and the amount paid to each during the financial year ending on that date:
Dalton K. Camp and Associates, Ltd., Toronto, Ont., $699,512.68; Burns Advertising Agency Ltd., Montreal, Que., $414,987.22; Stanfield, Johnson and Hill, Ltd., Montreal, Que., $344,255.80; F. H. Hayhurst Co. Ltd., Toronto, Ont., $215,137.32.
3.	No.
4.	No.
5.	Dalton K. Camp and Associates, Ltd., Toronto, Ont., $961,582.87; Burns Advertising Agency Ltd., Montreal, Que., $518,377.13; Stanfield, Johnson and Hill, Ltd., Montreal, Que., $337,491.02.
6.	Full consideration is being given to this and other recommendations made by the Glassco commission wherever deemed necessary. Action toward implementation of such recommendations will be announced.



REPORTS TO DOMINION STATISTICIAN BY CORPORATIONS AND UNIONS

Mr. Fisher: 1.	By June 1, 1963, had the dominion statistician found it necessary to use the authority granted him by 10-11 Elizabeth, chapter 26, sections 6 and 7, 11 and 12, and, if so, to what corporations and what trade unions has the dominion statistician sent registered letters?
2.	If not, is the dominion statistician satisfied, as of June 1, 1963, that every corporation and every union which comes under this statute has made the required report?


Jean-Luc Pepin: 1. The Corporations and Labour Unions Returns Act stipulates that every corporation and labour union to which the act applies shall file their first annual returns with the dominion statistician not later than six months after the act comes into force. As the act came into force on January 1, 1963, filing of the first returns under the 28902-5-95
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act is not legally required before July 1, 1963. Consequently, sections 7 and 12 of the act (which authorize the minister to demand by registered letter that a delinquent corporation or labour union file a return as required by the act) had not been implemented as of June 17, 1963.
2. Not applicable.



RETURNS TO GOVERNMENT BY LABOUR UNIONS

Mr. Fisher: 1.	On June 1, 1963, how many statements required under 10-11 Elizabeth, chapter 26, section 13, were filed in the office of the Secretary of State and in the office of the Minister of Labour?
2.	How much money has been collected by each of these offices as fees for the inspection of these documents?
3.	Has the Department of Labour made an analysis of the returns in order to prepare any report which shows trends and scale of interrelationship between international unions and their Canadian locals: if so, is this analysis available to the public, and, if not, will such an analysis be made?


Yvon Dupuis: 1. None.
2. and 3. Not applicable.



BROADCASTING


Mr. Fisher: 1.	Did the Minister of Transport obtain advice other than from his own departmental officials when he rejected the application, recommended by the B.B.G., for the establishment of a French language broadcasting station in the Hull-Ottawa area and, if so, from whom, and in what form (i.e. letters, briefs, personal interview)?
2.	Has the minister received any communication from the B.B.G. subsequent to his rejection of the recommendation and, if so, what is the gist of it?
3.	Did the minister receive any communication from the C.B.C. either before or since the rejection and, if so, what is the gist of it?


Jean-Charles Cantin: 1. The minister reached his decision on the basis of his own knowledge of the facts involved.
2.	Yes. An acknowledgement.
3.	No.



SEARCH AND RESCUE OPERATIONS IN NORTH

Mr. Rheaume: 1.	What was the extent of the R.C.A.F. search and rescue operations looking for overdue or missing aircraft in the N.W.T. and Yukon for each of the years 1960, 1961, and 1962 in terms of (a) hours flown (b) miles flown (c) dollars?
2.	What was the cost of P.O.L. issued to or purchased for private operators who assisted the R.C.A.F. during the same periods?
3.	How many such overdue or missing aircraft had SARAH emergency radio on board during the above periods?
4.	How many such searches were successful in locating the overdue or missing aircraft?


Louis-Joseph-Lucien Cardin: 1. (a) 1960, 534 hrs; 1961, 816 hrs; 1962, 2171 hrs.
(b)	not recorded.

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(c)	aircraft operating costs 1960, $31,000; 1961, $56,000; 1962, $244,000.
2.	P.O.L. supplied to private operators during search operations is integrated with R.C.A.F. usage during the same operation therefore records do not provide an answer to this question.
3.	The answer to this question is unknown.
4.	36 out of 39.



SUGAR IMPORTS

Mr. Cote (Chicoutimi): 1.	Since January 1, 1963, what countries have supplied sugar to Canada?
2.	For each month, what were the quantities obtained and the prices paid in each case?
3.	Is sugar imported only in its unrefined state?


Jean-Luc Pepin: 1. and 2. Imports, by countries, of sugar in January and February 1963 (latest figures available) were as follows:
January 1963	February 1963
Class	Country	Cwt.	Value	Cwt.	ValueRaw sugar for	Mauritius & dependencies	169,164	$	627,236	$ -refining	Republic of South Africa	5,339	23,412	60.483	265,220(class 262)	India	-	-	76,090	232,706Australia	220,139	827,209	247,402	1,135,984Fiji	-	-	232,959	842,457British Guiana	205,882	889,172	221,358	1,344,162Jamaica	-	-	136,288	570,404Cuba	-	-	52,795	127,888Totals	600,524	$2,367,029	1,027,375	$4,518,821Raw sugar	n.o.p.	India	-	-	429	1,278(class 263)	British Guiana	249	1,241	-	-Totals	249	$	1,241	429	$ 1,278Refined sugar	United Kingdom	36	229	(class 267)	Germany West	42	2,071	15	543Republic of South Africa	-	-	225	1,026United States	4,879	37,969	4,010	36,125Totals	4,957	$	40,269	4,250	$ 37,694
3. No; sugar is not imported only in its unrefined state.



SPECIAL ASSISTANT TO PRIME MINISTER

Mr. Fisher: 1.	Has the Prime Minister taken an executive assistant or a special assistant on staff and, if so, what is this person's name, age, place of birth, institutions of education and educational qualifications, governmental or business experience (position held, length of experience, name of firm) and initial and present salary with the government?
2.	What length of time has this assistant undertaken to serve the Prime Minister and/or what engagement in length of time was given to the assistant by the Prime Minister?
3.	In brief, what particular qualities of this assistant led the Prime Minister to engage him?


Lester Bowles Pearson: 1. Yes; executive assistant: Miss Mary Elizabeth Macdonald. Age: 45. Place of birth: North Cobalt, Ontario.
Educational institutions:	Public school,
Schumacher, Ont., St. Patrick's girls school, Ottawa, Ont., Notre Dame convent, Ottawa,

Ont., University of Ottawa, St. Patrick's College, Ottawa, Ont., Postgraduate studies in school of social welfare.
Educational qualifications: Bachelor of arts, University of Ottawa, 1938 (magna cum laude); Master of arts-political science course, University of Ottawa, 1948.
Business experience; 5 years Metropolitan Life Insurance Company, Ottawa (investigation division and C.H.O. account)-1938-43. Editor, The Canadian News Review, 1941-43.
Overseas service: 1943-1945, Canadian Red Cross corps, headquarters, London, England 1943-44; attached to No. 12 Canadian general hospital stationed in France and Belgium, August 1944 to December 1945 as It. welfare officer.
Government experience; February 4, 1946, joined external affairs as clerk grade IV, March 1947 posted to staff of under secretary of state for external affairs; September-November 1948 assistant secretary, Canadian

delegation to the United Nations, Paris, France; February, 1949, posted to staff of secretary of state for external affairs; January 1, 1954, appointed private secretary to the secretary of state for external affairs; March 3, 1958, appointed private secretary to the leader of the opposition; May 30, 1963, appointed executive assistant to the Prime Minister.
Salary: Initial 1946, $1,620; present 1963, $13,600.
2.	While services required.
3.	Ability and experience.



WHEAT AND FLOUR EXPORTS

Mrs. Konanlz: 
Jean-Luc Pepin: 1. Canadian exports of wheat and wheat flour (in terms of wheat) reached a post-war peak (world war II) in the crop year 1952-53.
2. Exports of wheat and wheat flour in terms of wheat amounted to 385,526,541 bushels during the crop year 1952-53.
3 and 4. Exports of Wheat and Wheat Flour in Terms of Wheat-Crop Years 194748 to 1961-62:
Crop		All destinations
	Mainland	except Mainland
Year	China	China
	Bushels	
1947-48	29,880	194,952,4631948-49	872,838	231,456,4971949-50	141,430	224,995,3551950-51	59,054	240,901,7921951-52	3,960	355,821,2921952-53	-	385,526,5411953-54	-	255,081,4061954-55	-	251,909,1321955-56	-	312,259,7021956-57	-	264,395,8261957-58	3,786,907	316,505,9291958-59	463,867	294,081,6531959-60	-	277,290,9531960-61	38,972,7261	314,276,71321961-62 28902-5-95J	82,119,5021	275,902,3202
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ilncludes a total of 14.4 million bushels sold to mainland China but diverted by that country to Albania and East Germany during the crop years 1960-61 and 1961-62.
2Excludes a total of 14.4 million bushels sold to mainland China but diverted by that country to Albania and East Germany during the crop years 1960-61 and 1961-62.
5.	The average quantity of wheat and flour in terms of wheat exported to all destinations except mainland China during the five year periods 1952-53-1956-57 and 1957-58-196162 were 293,834,521 and 295,611,514 bushels, respectively.
The average quantity per annum of wheat exported with the provision of export credits insurance was:-
Crop years: 1952-53 to 1956-57, 11.4 million bushels; 1957-58 to 1961-62,	8.7 million
bushels.
All wheat was insured for government account under the authority of section 21 of the Export Credits Insurance Act.
Average selling price per annum of flour exported with the provision of export credits insurance was:-
Calendar years: 1953 to 1957 inclusive, $1.4 million; 1958 to 1962 inclusive, $10.4 million.
All flour was insured for account of the Export Credits Insurance Corporation. Quantities exported are not available as the policyholders are not required to report such information.



URBAN MILITARY HOUSING UNITS, SUMMERSIDE, P.E.I.

Mr. Macquarrie: 1.	Has the number of urban military housing units for Summerside, Prince Edward Island been reduced from 275 to 175?
2.	Has an option been obtained for land in the area and, if so, from what companies or individuals was it obtained?
3.	What is cost per acre?
4.	Is this land in the town of Summerside?
5.	Will a change in the site delay the project?
6.	Will public proposals be called for this project?
7.	How long has C.M.H.C. been working on project?
8.	When will it be started and what is completion date?


Louis-Joseph-Lucien Cardin: 1. Yes.
2.	Yes, Hillcrest Housing Limited.
3.	$1,000 per acre.
4.	Yes.
5.	No.
6.	Yes.
7.	Since April 1962.
8.	This cannot be determined at the present time.

Questions



ALERT BAY, B.C.-SITE FOB FEDERAL BUILDING

Mr. Barnell: Has a contract been awarded for the removal of existing buildings from the property acquired as the site for a federal public building at Alert Bay, B.C., and, if not, when is it expected that such a contract will be awarded?


Hubert Badanai: No. By the terms of the purchase of the property from the school board, the crown agreed to move the existing buildings to other property held by the board. No definite commitment was made as to the time for removal of the buildings. However we are now taking action and a contract should be let shortly.



ASSISTANCE TO VETERINARY COLLEGES

Mr. Ormision: Has the federal government given any financial assistance to Canadian veterinary colleges past and present and, if so, what amount, and under what authority?


Mr. Beer:: The government of Canada in accordance with the provisions of the Agricultural Instruction Act, over the ten year period of the act, 1913-1923, granted to the two veterinary colleges of Canada $200,000.
The Agricultural Instruction Act provided for the granting of $20,000 per year for ten years to the veterinary colleges of Canada, the said $20,000 to be divided annually in proportion to the number of students enrolled.
There were two veterinary colleges in Canada during the period 1913-1923, the Ontario veterinary college at Toronto, which received approximately $145,000 and the school of comparative medicine and veterinary sciences, Montreal, which received approximately $55,000.	'



* DISTRIBUTION OF COPIES OF BUDGET SPEECH

Mr. Martineau: 1.	For distribution purposes, were any copies of the budget speech or summaries thereof, prepared in advance of delivery by the Minister of Finance to the House of Commons, by officials of the Department of Finance, of the Bank of Canada, or by other person, or persons working with or under the direction of the Minister of Finance?
2.	Were any copies of the budget speech or summaries thereof mailed by the Minister of Finance, officials of the Department of Finance, of the Bank of Canada, or other person or persons working with, or under the direction of the Minister of Finance and, if so, (a) how many such copies or summaries have been mailed (b) to whom were they addressed (c) when were they mailed, giving the date and hour thereof?


Mr. Gordon:: 1. Yes.
2. In accordance with long established practice copies of the budget speech in sealed parcels were sent out from Ottawa by air express, rail express or Department of 
External Affairs courier before the budget speech was delivered in the house.
(a)	466.
(b)	and (c) Sealed parcels addressed to the agents of the Bank of Canada in Halifax and Saint John, N.B., were turned over to the C.N.R. express office at 10 p.m., June 12.
Sealed parcels addressed to the agents of the Bank of Canada in Montreal, Toronto, Vancouver, Calgary, Regina and Winnipeg were turned over to the C.N.R. express office at 10.30 p.m. June 12.
Sealed parcels addressed to the high commissioner for Canada, London, England, the consul general of Canada, New York city, the minister (economic) and the counsellor (finance) of the embassy of Canada, Washington, D.C., were turned over to the Department of External Affairs at 11 a.m. June 13, for delivery by hand of diplomatic courier.
A sealed parcel addressed to the agent, Bank of Canada, Montreal, was turned over to the C.N.R. express office at 12.30 p.m. June 13.
The agents were under instructions that when the sealed parcels were received they be retained unopened in safe custody until the release authorization was given from the head office of the bank in Canada.
When, during my presentation of the speech to the house, I reached a prearranged point in the text, an official of the Department of Finance, who was in the gallery, telephoned the head office of the bank and authorized release of the copies for distribution. The head office of the bank then passed the release authorization over its telex lines to each of the agencies. The agencies, on receipt of the authorization message, broke the seal on the parcel and commenced distribution.
In the case of the copies sent to London, the parcel did not arrive there until the morning after the speech was presented. The parcels for New York and Washington arrived at the consulate and the embassy in the late afternoon of the 13th-several hours before I was due to start the speech. To safeguard against any premature disclosure, the copies were in sealed parcels addressed personally to previously arranged responsible officials, to be delivered personally only to those officials, and each sealed parcel bore the caution that it was not to be opened before 9.15 p.m. eastern daylight time 13th June.
I have not as yet received the list of persons or firms to whom the 466 copies were released. However when this information is available I will table it in the house.



BRIEF FROM CANADIAN CONSTRUCTION ASSOCIATION

Mr. Fisher: 1.	Has the present government received any brief or briefs from the Canadian construction association and, if so (a) when (b) did the ministry note its contents (c) did any such brief or briefs contain references to the 2 per cent mortgage insurance fee on N.H.A. houses and, if so (d) what was the gist of the references?
2.	Has any such reference been drawn to the attention of officials of C.M.H.C.?
3.	If so, have they any new or previously announced policy regarding possible changes in this mortgage insurance fund arrangement?


John Richard Garland: 1. Yes (a) May 6, 1963 (b) yes (c) no (d) see answer to (c).
2. and 3. Answered by 1(c) above.



PROVISION OF FEED GRAIN, FRASER VALLEY, B.C.

Mr. Willoughby: 1.	Is the present subsidy sufficient to make it economic for large areas of British Columbia to import feed grain?
2.	Has the government any other plans to assist ranchers in south central B.C. and the Fraser valley, with the importation of feed grain from southern Alberta and the Kootenay areas of British Columbia?


Bruce Silas Beer: 1. In the crop year 1961-62, 164,272 tons of feed grain moved under the freight assistance policy to feeders in British Columbia. Movements during the early months of this calendar year were about the same as a year ago, which is an indication that the subsidy is sufficient to make such movements economic.
2. The broad question of feed grain is under review.



INSPECTION AND CONTROL OF SLAUGHTERING ESTABLISHMENTS

Mr. Laprise: Have any of the officials of the Department of National Health and Welfare met with representatives of the governments of Quebec and Ontario in connection with the inspection and control of animal and poultry slaughtering by small slaughtering establishments and, if so, what decisions were taken in this matter?


Stanley Haidasz: Officers of the food and drug directorate of the Department of National Health and Welfare have met with officers of the Ontario department of health. These meetings resulted in a joint inspection in 1962 of 164 slaughterhouses and a number of poultry processing plants in Ontario. The plants inspected in this joint survey were mainly small plants not under inspection by the health of animals division of the federal Department of Agriculture.
Provincial health officials in both Ontario and Quebec are periodically contacted by inspectors of the food and drug directorate of
Questions
the Department of National Health and Welfare in connection with the examination by the latter of slaughterhouses and poultry processing plants.



POPULATION OF MENTAL INSTITUTIONS

Mr. Mather: 1.	How many persons were in Canadian mental institutions at the end of the calendar years 1942, 1952 and 1962?
2.	What percentage or ratio of population did these numbers represent?
3.	How many persons were admitted to Canadian mental institutions in the same years?
4.	What percentage or ratio of the population did they represent?


Jean-Luc Pepin: 1. Patients in Canadian mental institutions at the end of calendar year, including psychiatric units of general hospitals: 1942, 45,937; 1952, 57,621; 1961,a>
66,546.
2.	Ratio per 100,000 of the general population: 1942, 394; 1952, 399; 1961,'">
365.
3.	The number of persons is not known.
The total of first admissions and readmissions is: 1942, 10,692; 1952, 20,957; 1961,<* 47,758.
Based on 1960 experience the number of persons is estimated as: 1942, 10,418; 1952, 20,249; 1961,'">
45,594.
4.	The ratio of persons is not known.
The ratio of first admissions and of readmissions is: per 100,000: 1942, 92; 1952, 145; 1961,262.
Based on 1960 experience the ratio of persons is estimated as: 1942, 90; 1952, 140" 1961,'">
250.
<n Latest available figure.
(Translation):



LISTS OF PUBLIC WORKS TENDERS FOR MEMBERS

Mr. Pigeon: Will the Minister of Public Works send to all members a list of tenderers and prices for all tenders called after the latter have been opened?


Hubert Badanai: No, but if the hon. member will write me and let me know what tenders he is particularly interested in, I will see to it that he gets the information.



*LIST OF DEFENCE PRODUCTION TENDERS TO MEMBERS

Mr. Pigeon: Will the Minister of Defence Production send to all members a list of tenderers and prices for all tenders called after the latter have been opened?


Mr. Drury:: No. The department receives more than 325,000 tenders each year which amounts to more than 2 million prices, because the tenders involve an average of six items and, in many cases, there is more than one delivery point. It would not only be

Questions
impractical but also very expensive to provide all the required data and such substantial costs could not be justified.
The department provides, on request, details regarding contracts awarded and issues twice a month, in French and in English, a press release listing all the unclassified contracts over $10,000 which have been awarded.
(Text):



POST OFFICE CONSTRUCTION, INWOOD, MAN.

Mr. Siefanson: Is it the intention ot the government to build a post office at Inwood, Manitoba, this year?


Azellus Denis: No.



RECOMMENDATIONS RESPECTING POLITICAL AND ECONOMIC CONTENT

Mr. Matheson: What steps have been taken and what recommendations have been advanced by the government of Canada since 1956 to give to NATO, apart from the military, a political and an economic content?


Mr. Stewarl:: Information about individual recommendations and activities of NATO member states in the NATO council is classified. In December 1956 NATO published the report of the committee of three on non-military co-operation which established guide lines to improve and extend political and economic consultation. The present Prime Minister of Canada was a member of the committee of three. As a result of this report, which still forms the basis for the non-military activities of the alliance, NATO established the political advisers committee, the committee of economic advisers, the science committee and a program of visiting NATO fellowships. Canada supported the establishment of these bodies and actively participates in their deliberations.
There have also been established the organization for economic development and co-operation and the development assistance committee whose membership consist not only of members of NATO but other countries as well. The functions of these bodies are complementary to the purposes outlined in article 2 of the NATO treaty.
Since 1956 there have been impressive strides within the alliance in the scope and content of consultation on non-military problems. At the recent NATO meeting in Ottawa the Canadian delegation expressed the determination of the Canadian government to play a full and constructive role in this aspect of the day to day work of the NATO council.
IMr. Drury.]



DEFENCE EXPENDITURES

Mr. Matheson: Expressed as a percentage of Canada's gross national product, what was the federal expenditure for defence in each of the years 1950, 1960, and 1962?


Jean-Luc Pepin: Federal expenditure for defence as a percentage of Canada's gross national product for years requested: 1950, 2.7 per cent; 1960, 4.3 per cent; 1962, 4.2 per cent.



EXTERNAL AID EXPENDITURES

Mr. Matheson: Expressed as a percentage of Canada's gross national product, what was the federal expenditure for external aid in each of the years 1950, 1960, and 1962?


John B. Stewart: Defining external aid as the total official flow of financial resources to the less developed countries, and comparing expenditures in the fiscal years 1950-51, 196061 and 1962-63 with gross national product for the calendar year in which the bulk of the expenditures occurred, federal expenditures for external aid assumed the following percentages of gross national product: 1950, .07 per cent; 1960, .20 per cent; 1962, .18 per cent.



EFFECT OF EXCISE TAX ON MACHINERY AND MATERIALS

Mr. Lambert: What effect on the level of prices of commodities entering into Canada's export trade is expected as the result of the recent imposition of the eleven per cent excise tax on production machinery and processing materials which enter into the manufacture of such commodities and to what extent?


Mr. Benson:: Information not available.



NUMBER OF UNEMPLOYED, YORK NORTH CONSTITUENCY

Mr. Addison: What is the total number of unemployed persons in the constituency of York North?


Mr. Byrne:: This information is not available.



* REVENUE FROM TAKE-OVER TAX

Mr. Alkenbrack: Has any revenue been realized from the imposition of the 30 per cent take-over tax on stock purchases by non-residents and, if so, how much?


John Richard Garland: No. N/A.



COLLECTIONS UNDER SECTION 11 OF EXCISE TAX ACT

Mr. Thomas: 1.	Was any tax actually collected under section 11 of the Excise Tax Act before it was withdrawn?
2.	If so, will such money be refunded?


John Richard Garland: 1. No.
2. N/A.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Hales: 1.	Since January 1, 1963, what contracts have been let, and on what dates, to de Havilland Aircraft of Canada, Malton, and Hawker Siddeley Canada Ltd. (Orenda engines div.), Malton?
2.	What were they for, and what was the amount of each contract?
3.	When were tenders called?


Yvon Dupuis: Return tabled.


QUEBEC LAWYERS RETAINED BY JUSTICE DEPARTMENT AND C.M.H.C.
Mr. Pigeon: For each electoral district of the province of Quebec, what are the names and addresses of all the notaries or lawyers whose services are now retained by the Department of Justice and Central Mortgage and Housing Corporation?


Yvon Dupuis: Return tabled.


CIVILIAN EMPLOYEES, R.C.A.F. STATION, COMOX, B.C.
Mr. Barnett: 1.	What rates of pay are currently in effect for each classification of civilian employee at R.C.A.F. station Comox?
2.	How many hours per day and days per week constitute the regular work schedule of each classification of employee?
3.	How long has each of the present rates been in effect, and what was the rate in effect before the last change?
4.	Are all rates for civilian employees at this station set on the basis of "prevailing rates", and, if not, which classifications or groups of employees have their rates set on this basis?
5.	At whose request, and by whom, were the most recent "prevailing rate" surveys made for each classification?


Louis-Joseph-Lucien Cardin: Return tabled.



FINANCE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a question to the Prime Minister, and ask him whether the government has yet come to a decision as to whether or not it would consent to the appointment of a committee of the house for the purpose of considering matters relating to the preparation of the budget, and to enable the calling of witnesses respecting the circumstances, to which I am not going to refer at the moment because they are known. Has a decision been made in this regard?
Inquiries of the Ministry Right Hon. L. B. Pearson (Prime Minister):
The considerations in the mind of the government in setting up a committee of inquiry of this kind were well put forward on June 8, 1959, by the right hon. gentleman, the Leader of the Opposition, as recorded on page 4410 of Hansard. These are the conditions in the mind of this government in dealing with the question the right hon. gentleman has just raised. I quote:
The circumstances under which a committee is set up are very clearly shown to be based upon a charge or charges made by a member of this house. All of us know what happens when charges are made. If charges are made, the house has the opportunity of determining whether they should be submitted to a committee. And if any hon. member makes a charge he, of course, has to substantiate that charge, and if he fails to substantiate the charge the parliamentary tradition, indeed all the experience of the past, indicates that such a member having made a charge unconfirmed and unsupported may be himself adjudged guilty of a breach of the privileges of the house.
Then the right hon. gentleman went on to say this:
Sir Wilfrid Laurier, when prime minister in the House of Commons debates of 1907, at page 5664 of Hansard, with all his regard for the traditions of parliament and the necessity of their maintenance inviolate, made this statement that is most pertinent and applicable:
inc xnjuse,

** **'**[DOT]' ucyaiu Aium uie buuna
traditions which have come to us from England and according to which there could be no inquisition into any man's conduct or standing except on charges made specifically."


John George Diefenbaker: May I suggest to the Prime Minister that the circumstances are quite different-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -and in the United Kingdom, since he has seen fit to cite the United Kingdom and what I said under circumstances quite different from those today, committees are set up. I ask him this, he having refused to set up this committee. Prior to the 30 per cent tax on securities being set aside, withdrawn or suspended, were there discussions with Mr. Smallwood of Newfoundland to the effect that unless this tax were withdrawn the transaction between Canadian Javelin or involving Canadian Javelin would fall through?


Lester Bowles Pearson: As the right hon. gentleman has indicated, the circumstances are now quite different from those which I mentioned, in that he is now sitting on the other side of the house. The right hon. gentleman by his statement has indicated that there is some wrongdoing. If he has evidence of the fact that there is wrongdoing, a committee will be set up.
As to the other part of the question, there was no discussion by me with Mr. Smallwood on this matter or any matter related to it, direct or indirect.

Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, does the right hon. gentleman not know that all across Canada there has been criticism-


Some hon. Members:: Order.


John George Diefenbaker: -of the fact that they brought in three outsiders and, second, that the announcement was made in the house before the stock markets closed, thereby permitting transactions that otherwise would not have taken place? Does he not realize the necessity for an investigation?


Lester Bowles Pearson: Mr. Speaker, I realize that if the right hon. gentleman has a charge to make he should have the courage to get up in the house and make it.


Some hon. Members:: Arrogance.


Mr. Speaker:: Order. In my humble opinion we have had sufficient discussion along this line.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Prime Minister. When the Minister of Finance told the house last Wednesday and Thursday that he had neither informed nor consulted with anyone other than the Prime Minister and some members of the cabinet regarding his intention to withdraw paragraph 11 of the budget resolutions, was the Prime Minister himself aware of the fact that Messrs. O'Connell, Conway and Stanley had been given information regarding the minister's intention?


Lester Bowles Pearson: Mr. Speaker, I do not think my hon. friend quoted accurately what the Minister of Finance said, but in any event the Minister of Finance will be dealing with that matter in the speech which he is in the process of making and which he will continue shortly.


Some hon. Members:: Answer the question.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I did not ask about the Minister of Finance. I asked if the Prime Minister himself was aware that these three gentlemen had been informed.


Lester Bowles Pearson: How could I have been aware of it, Mr. Speaker, when the three gentlemen were not informed when the cabinet was told about it?


John George Diefenbaker: Retreats.


Hon. J. W. Monieith (Perth):: Mr. Speaker, may I direct a question to the Minister of Finance. In relation to the 30 per cent penalty on the sale to non-residents of shares of public companies listed on certain stock exchanges, and since withdrawn, the minister in presenting his budget said:
Measures are under consideration, and may be discussed with the provinces-


Mr. Speaker:: Order. Will the hon. member come to the point of his question?


Jay Waldo Monteith: I am just explaining what the minister said in the budget, which is applicable to it.


Mr. Speaker:: This type of question is much better asked during the debate on the budget or during the debate on the budget resolutions.


Jay Waldo Monteith: I would ask the minister, does his action of last Wednesday reflect any change of thinking in his consideration of the sale of private companies, such as he indicated was under consideration in his budget speech?


Walter Lockhart Gordon: All I am going to say is that I expect to deal with this subject in my speech, and I do not believe very much can be gained by trying to deal with it in a truncated way on orders of the day.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I rise on a question of privilege. In Hansard for last Friday, June 21, at page 1421, the second column, the question was asked by the hon. member for Winnipeg North Centre (Mr. Knowles):
Mr. Speaker, will the Minister of Finance tell the house who outside of these people were so informed?
I underline the word "informed".


Walter Lockhart Gordon: The deputy minister, the senior assistant deputy minister who was working on this particular tax, Mr. Stanley, Mr. Conway and Mr. O'Connell.
Therefore the statement made by the minister on Friday that these gentlemen had been informed, and the Prime Minister's statement now that they had not been informed, certainly do not agree.


Some hon. Members:: Oh, no.


Lester Bowles Pearson: Not at all, Mr. Speaker. The hon. gentleman is putting words in my mouth and misrepresenting what the minister said. I would inform the hon. gentleman that when the Prime Minister and the cabinet were consulted, no one had been informed.


Mr. Speaker:: I am sure hon. members will forgive me if I refer once more to section 171 of Beauchesne's fourth edition, which it may be appropriate to quote at this time:
In putting a question a member must confine himself to the narrowest limits.
In making a question, observations which might lead to debate cannot be regarded as coming within the proper limits of a question.
The purpose of a question is to obtain information and not to supply it to the house.
A question oral or written must not-
And this is what I would like to stress, subsection (v), which I referred to on Thursday or Friday of last week-

A question oral or written must not:
(v) anticipate an order of the day or other matters.
Now, the order of the day is the budget debate, and following that I presume the budget resolutions. This seeking of information on the details certainly should be reserved to the general discussion on the budget or the budget resolutions, where details can be sought and received.


Thomas Clement (Tommy) Douglas: On a point of order, Mr. Speaker, I am not anticipating the debate. I am not asking the question of the Minister of Finance. This is a simple question to the Prime Minister; and it is, when the minister said these gentlemen had not been informed did he himself know they had been?


Lester Bowles Pearson: The answer to that question is no.


John George Diefenbaker: Why didn't you say so?


Lester Bowles Pearson: When the cabinet were consulted on this matter, no one had been informed. The information to which my hon. friend refers was given just before the minister came into the house that day, and this was made perfectly clear more than once in the house.


Hon. George C. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, might I ask the Prime Minister how he knows that no one had been informed before the cabinet and the house?


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I would like to ask a question of the Minister of National Revenue, which I think is of real urgency. In view of all the trouble that we members are getting into now, could the minister tell us what are the regulations or what information has been sent out to contractors and subcontractors who hold contracts, on the 11 per cent tax? We are going nuts trying to find the answer. Will the minister tell us what information is going out to the thousands of subcontractors as to what they should do?


John Richard Garland: Mr. Speaker, I can do no better than to refer to my statement which has indicated that all our officers across Canada have been advised of this and they are ready, willing and waiting for inquiries.


Hon. Paul Martineau (Ponliac-Temisca-mingue):: May I ask a supplementary question. Is the department contemplating taking on additional personnel to handle these inquiries?


John Richard Garland: No, Mr. Speaker.


Mr. Speaker:: Might I point out that every minister is entitled to notice of a question
Inquiries of the Ministry and of course questions of this type are more in accordance with our customs and not with our rules. Also, hon. members cannot insist on answers. The minister has made a statement today, and the proper time for details is at the time of the discussion of the resolution.


Harold Edward Winch: Mr. Speaker, you said the minister has made a statement. He has just now said his office is waiting for inquiries. Should not the information have gone out to the contractors rather than have his office waiting for inquiries?


John Richard Garland: I think if the hon. member will contain himself and read my statement he will see the answers to the questions he has just put are contained in the statement.


Mr. C. S. Smallwood (Battle River-Camrose):: Mr. Speaker, in view of the fact that there is no reference in the statement made by the Minister of National Revenue to the prefabricated home business, I now ask him with regard to the 11 per cent tax which will be applied to prefabricated homes; and in view of the fact that only part of the sale price-


Some hon. Members:: Order.


Mr. Speaker:: I must interrupt the hon. member. That question should be put on the order paper, and it refers exactly to what I was discussing 10 minutes ago. If the hon. member will refer once more to the section in Beauchesne he will see that a question must not anticipate an order of the day or other matters. The hon. member knows that as well as I do, and I wish he would conduct himself accordingly.


John George Diefenbaker: On the point of order, I suggest to Your Honour with great respect that that is not a proper ruling. This is a matter of deep importance to people everywhere across Canada. If people have to wait for the government to make a decision in this regard they will have to wait a long while, apparently. I think the question is very appropriate. Might I also add, Your Honour, that a moment ago you were making a statement as to the nature of questions. I should think the same rule applies also to answers, which should be answers to the question rather than statements.


Lester Bowles Pearson: On that point, Your Honour, I suggest you will get strong support for the position you have taken from the rulings of the hon. member for Edmonton West when he was Speaker.


Clifford Silas Smallwood: On a question of privilege. I was putting a short question on a subject which is of great importance across this
1490	HOUSE OF
Inquiries of the Ministry country. If hon. members opposite want to argue, very well, but I wish to put the question.


Mr. Speaker:: I think the hon. member understands the position which has been taken by the Chair. I do not think any question of privilege arises.


Clifford Silas Smallwood: I will shorten my question. In view of the fact that only a part of the sale price of a prefabricated home represents building materials, will the government look into this matter to ensure that purchasers of these homes are not paying the tax on labour, advertising, and so on.


John Richard Garland: I shall be glad to look into the matter.


Hon. Leon Balcer (Three Rivers):: I should like to direct a question to the Minister of National Revenue. I wonder if he can tell the house whether the three tinkers imported by the Minister of Finance were consulted or informed before the hon. gentleman made his statement this afternoon on the 11 per cent sales tax on building material.


John Richard Garland: I am reluctant to answer a question of that kind. How does one accept a description of individuals as referred to by the hon. gentleman? Moreover, it is hardly the responsibility of the Minister of National Revenue to know what takes place in relation to officials in other departments of the government.


Léon Balcer: Then may I direct my question to the Minister of Finance.


Mr. Speaker:: With reference to the same point which arose a few moments ago, I am sure the hon. member will realize that if we could get on to the budget debate, during which I understand the Minister of Finance is to speak immediately, many of these questions would be answered. I therefore doubt the urgency of a good many of these inquiries.


Hon. Gordon Churchill (Winnipeg South Centre):: On a point of order, Mr. Speaker, I do not see that it is possible in the course of a debate with the Speaker in the chair to have answers given by whoever has the floor, unless he yields from time to time when questions are put. It does not follow that the Minister of Finance will answer in the course of his speech questions such as are being put to him now. These are surely proper questions to be asked before the orders of the day.


John Whitney Pickersgill: On that so-called point of order which the hon. member for Winnipeg South Centre has just raised, I would draw Your Honour's attention to the fact that it is an immemorial


rule in all British parliaments that ministers take responsibility for statements they make, and there is no right to question ministers about which officials participated in the preparation of those statements. That is a rule upon which the right hon. gentleman opposite and the former minister of finance relied on many occasions in a previous parliament.


John George Diefenbaker: Did we ever import interested parties?


John Whitney Pickersgill: The right hon. gentleman asked me a question. I ask him this. Did they ever import experts?


Some hon. Members:: Order. Address the Chair.


Mr. Speaker:: Order. I am standing. Will hon. members please take their seats. This, I think, illustrates very well the amount of time which can be lost if we do not follow the rules of the house. It is now nearly ten minutes after four, and while the Chair wishes to be as receptive as possible, especially at this time-and I think hon. members will agree that last week the Chair leaned over backward to accommodate everyone

I must point out that the business of the house is extremely important, and that unless questions are of an urgent nature and have arisen within the last 48 hours they should not be put. Hon. members have the order paper at their disposal should they wish to put questions of a less urgent character. I suggest that hon. members should assist the Chair; that they help me to try to help them get on with the business of the house which, as I say, is extremely important.
(Translation):


Mr. Remi Paul (Berihier-Maskinonge-Delanaudiere):: Mr. Speaker, on a point of order. I am of the opinion that the house must abide by your rulings when a member rises on a question of privilege, whoever he may be, the Secretary of State or someone else; I do not think that he has the right to stir up a discussion or even less to try to give an answer to questions which do not come under his jurisdiction.
(Text):


John Whitney Pickersgill: On a question of privilege, Your Honour heard the hon. member for Winnipeg South Centre. There was no interruption from this side of the house, but when I endeavoured to deal with what the hon. gentleman regarded as a point of order I was interrupted and howled down by hon. members opposite. I should like, on a question of privilege, to continue what I was about to say when I was interrupted. I was about to say that the right hon. gentleman knows full well that a large number of people paid

Inquiries of the Ministry
salaries by their employers were, with his Mr. Maclnnis: My question is, at what time knowledge and the knowledge of the former did the Prime Minister first become aware of minister of finance, brought in at the time the fact that the three outsiders were in-of the conversion loan. No questions were formed of the withdrawal or suspension of raised at that time by the opposition.	the 30 per cent withholding tax?


George Clyde Nowlan: On the question of privilege, since the name of the minister of finance was mentioned-I do not know whether the hon. gentleman was referring to the immediate past or to the minister once removed -let me say that I had nothing to do with the conversion loan, but certainly having been close to that matter as minister of national revenue I can assure the hon. member that no outsiders were brought in.


John Whitney Pickersgill: To clear that up, it was
the minister twice removed.


Mr. Speaker:: Order. I think hon. members should realize that this is a question period, not a time for debate.


Mr. George Muir (Lisgar):: Mr. Speaker, I should like to direct a question to the Minister of Finance, and I am sure it is one he will be touching on in his subsequent statement. Will the minister inform the house why he considered it necessary to inform his three outside advisers-


Some hon. Members:: Order.


George Robson Muir: -that he intended to withdraw the 30 per cent tax-


Mr. Speaker:: Order. That question has been raised and asked many times.


Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Prime Minister. At what time did the Prime Minister first become aware of the fact that the three outsiders-


Some hon. Members:: Order.


Mr. Speaker:: Order. I have just ruled a previous and similar question out of order.


Malcolm MacInnis: With all respect, sir, this question has not been asked today.


Mr. Speaker:: The question is very similar in its nature, and consequently if the first question was ruled out of order I think the hon. member's should be ruled out accordingly.


Malcolm MacInnis: Mr. Speaker, on the point of order, this particular question has not come before the house. It is a direct question to the Prime Minister, and one I think he should be in a position to answer.


Mr. Speaker:: I must apologize; I did not hear all the question. Perhaps the hon. member would put it again.


Lester Bowles Pearson: Mr. Speaker, I know that question has been ruled by you, and properly, as out of order. Again I regret hon. gentlemen opposite referring to the three special consultants sworn in as such in the minister's office as "outsiders" or "tinkers", or other expressions of that kind insulting to them. But leaving that aside, I heard about that matter at the cabinet meeting on the morning in question. In case there is any misunderstanding, I heard about the matter from the minister, about what he proposed to do, and he brought the matter up at the cabinet meeting that morning before the statement was made here in the house.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Does the minister's recent employment of the troika of advisers mean there will be a reduction in the number of civil servants on his staff and that there will be a reclassification of positions to allow for the future employment of advisers having positions senior to those already within the department?


Mr. Speaker:: Order. That is a question for the order paper.


Mr. D. V. Pugh (Okanagan Boundary):: should like to direct a question to the Minister of Forestry, Mr. Speaker. Has the minister received any communications from British Columbia, from anyone connected with the lumbering industry or the sale of lumber products, stating that the 11 per cent tax on building products made effective by the budget is having a harmful effect on lumber production and sales?


Mr. Speaker:: Order. This also is a question that is not in order at this time. May I once more call the attention of hon. members to the fact that it is now 4.23 or thereabouts, and an important debate is to follow the question period. May I suggest, therefore, that unless questions are extremely urgent or important we get on with the business before the house.


David Vaughan Pugh: With respect, Mr. Speaker, during the last 24 hours I have received numerous telegrams. I was in the riding on Saturday and received many telephone calls from people in the lumbering industry who stated that they were going to send telegrams, etc., to the Minister of Forestry. I am now asking whether he has received these communications

Inquiries of the Ministry relating to the harmful effect of the 11 per cent tax on our lumbering industry. May I have an answer?


John Robert (Jack) Nicholson: Mr. Speaker, like other hon. members of the house and the cabinet, I have received a great many wires.


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: Coming more directly to the question of wires from British Columbia, I intend to go west later this week to discuss with the forest industry matters referred to in these telegrams.


David Vaughan Pugh: A supplementary question, Mr. Speaker. Has the minister drawn such communications to the attention of the cabinet?


John Robert (Jack) Nicholson: As I have already stated, Mr. Speaker, several wires have been received by members of the cabinet, but if I were to give any further information at this time it would be a violation of my oath as a privy councillor.


Léon Balcer: Mr. Speaker, I should like to ask the Minister of Finance whether he has received a telegram from the president of the granite producers association of Canada complaining of this 11 per cent sales tax on building materials, and contending that the whole industry will face bankruptcy if this tax is not withdrawn.


Mr. Speaker:: Order. The hon. member knows that this question has been under discussion all afternoon. I do not think the question is proper at this time.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Minister of National Revenue. Could he tell us whether the particulars contained in the very important statement he made today, dealing with the exemptions from the sales tax on building materials, were worked out after June 13?


John Richard Garland: Certainly, Mr. Speaker. They were worked out and prepared over the week end by myself and two senior officials of the Department of National Revenue. We worked on this last night in order to give the house, as we had promised we would on Friday, a statement on this matter this afternoon.


Gerald William Baldwin: A supplementary question, Mr. Speaker. Does this mean that these particulars were not considered at the time the budget was presented?


John Richard Garland: Mr. Speaker, even the hon. member must know that is a question which should be directed to another minister.
[Mr. Pugh.)


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a very important question to address to the Minister of National Revenue. It arises out of an article appearing in today's Toronto Telegram. I want to ask the minister whether an announcement concerning the exemption of hospitals, old folks' homes and municipal institutions was actu-ually circulated to the Liberal caucus last Wednesday, as is reported on the front page of today's Toronto Telegram?


John Richard Garland: Mr. Speaker, I am not in a position to answer as to what newspapers are publishing, but I can tell the hon. member that the direct answer to the question is no, and that the exemption referred to has been on the statute books since the 1930's.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Heaih Macquarrie (Queens):: I have a question for the Secretary of State for External Affairs. Before I put my question, may I offer him belated birthday congratulations on having attained not only 60 days but 60 years.
Can the minister advise the house on the situation in Laos where there are reports of resumption of heavy fighting, along with a request by the Pathet Lao for the withdrawal of the international control commission from Attopeu?


Hon. Paul Martin (Secretary of State for External Affairs):: I thank the hon. gentleman, first of all, for giving me notice of his intention to ask this question, and for his congratulations. I should tell him however that it is not permissible in this house to mention any hon. member's age, after the age of 30.
In answer to the hon. gentleman's question, may I say that the basic difficulty in Laos-is that although a provisional government representing the three important political tendencies was established last summer when the international agreement on Laos was signed in Geneva, the administration and armed forces of Laos have not yet been integrated. The country therefore remains in effect divided into zones controlled by the forces of the right wing, the neutralist party and the Pathet Lao.
During the past few months there has been a marked deterioration, I regret to say, in the political and military situation in that particular country. The Pathet Lao with the help of some dissident neutralists, has forced the main neutralist army to give up several important points in the plain of Jars. Within

the past ten days there have been reports of fighting also in the region of Attopeu, in the southern part of the country.
The government has been following these developments with concern because of our membership with India and Poland on the international commission for supervision and control in Laos. The commission has been doing its best, in very difficult circumstances, to exercise a calming and stabilizing influence, and to report on the situation objectively to the governments signatory to the Geneva agreement. It has been our view that the commission should send or station its representatives in troubled areas. A commission team has in fact been stationed on the plain of Jars at the request of the prime minister of Laos, since April 29. The Polish delegation is unfortunately not represented on this team.
Last week the Indian and Canadian commissioners decided to send their military advisers to the Attopeu area to report to them on the situation there. The Polish commissioner did not send his military adviser. The Pathet Lao radio has commented adversely on the visit of the Canadian and Indian military advisers to Attopeu, and it is this comment which has probably given rise to the news reports referred to by the hon. member.
The commissioners are now deciding, in the light of their military advisers' reports, what they can usefully do to help restore peace to the Attopeu area. I can only say that Canada, as a member of that commission, is doing everything it can in that very disturbed area.


APPOINTMENT OF CANADIAN REPRESENTATIVE TO VATICAN
[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is of a specific nature, but I think nevertheless of importance. It is addressed to the Secretary of State for External Affairs. In the light of the active leadership for world peace and for the easing of tensions between east and west given by the late Pope John XXIII and the recent election of a successor, has the government given consideration to Canada having a permanent representative at the Vatican?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, we will all agree, I am sure, that by example and speech Pope John XXIII made a constructive contribution to the cause of world peace, and all men of good will will look to Paul VI to continue in that role. As to the particular ques-
Inquiries of the Ministry tion, this is a matter of government policy which cannot properly be discussed on orders of the day.


ROYAL CANADIAN NAVY
[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: wish to direct a question to the Minister of Justice. Has the minister received a message to the effect that a Mr. Eric Petersen, a former petty officer in the Royal Canadian Navy, was refused permission to re-enlist because his father in law was alleged to be a communist in the thirties? If so, will the hon. gentleman inquire into this matter.


Lionel Chevrier: I have not received such a letter yet, though I did read in the press this morning that one was on its way. When I do receive it I will give it my best attention.


COLUMBIA RIVER
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: I wish to address a question to the Secretary of State for External Affairs. I apologize for not having sent him notice, but the question arose at 2.22 p.m. This is a matter of national importance with some local application. Could the minister assure this house that he endorses and stands behind all the letters written during the past year by that late-blooming hydrologist with respect to the Columbia river treaty. The hydrologist I mentioned is the under secretary of state for external affairs.


Paul Joseph James Martin: I have listened with great interest to the question put by the hon. gentleman, and he may be sure that all letters of interest on this important subject are continuously under review by the Secretary of State for External Affairs.


[Stage Direction]
On the orders of the day:
Stanley James Korchinski: I wish to direct a question to the Minister of Trade and Commerce. Does the fact that the wheat quota in western Saskatchewan, or in that area which normally ships to the west coast, has been raised to 12 bushels, though the eastern part of Saskatchewan has been excluded,

Inquiries of the Ministry together with the imminent departure of Mr. McNamara to Hong Kong mean that a deal for the sale of more wheat to red China similar to the one signed by the previous government is to be expected shortly?
Hon. Mitchell Sharp (Minister of Trade and
Commerce): I can confirm to the hon. member that Mr. McNamara is very assiduous in his duties in selling wheat, and is engaged on a mission which I am sure carries the endor-sation of the hon. member. May I also say regarding the distribution of quotas that no one in the house from the province of Saskatchewan can assert this has anything to do with politics.
(Translation):


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assomplion-Montcalm):: Mr. Speaker, I have a question for the Prime Minister. Before starting the discussion on the resolution pertaining to the universal pension plan, does the Prime Minister intend to refer that measure to the interprovincial conference which will gather in Halifax next fall, so as not to intrude upon provincial jurisdiction and in conformity with the wish of the St. Jean Baptiste societies? (Text):


Lester Bowles Pearson: Mr. Speaker, this is a matter which is under consideration. I support provincial jurisdiction in all fields which are under provincial jurisdiction.
(Translation):


Louis-Joseph Pigeon: A further question, Mr. Speaker.
(Text):


Mr. Speaker:: I am sorry; supplementary questions are by grace, not of right. I think the hon. member's first question did not have that sense of urgency which it should. It was important, but I think he received a complete answer.
(Translation):


Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a question to the Prime Minister.
Has the Prime Minister also decided to refer the bill concerning loans to municipalities to the interprovincial conference that is to be held next fall in Halifax, in order to comply with a request made by the St. Jean Baptiste societies?
(Text):


Mr. Speaker:: I think the hon. member realizes that that is exactly the same question he asked before.


Louis-Joseph Pigeon: Mr. Speaker, a question of privilege.
(Translation):
I rise on a question of privilege, Mr. Speaker. This question is very timely. The provinces, and particularly the province of Quebec, are forever asking that those bills, which infringe on provincial autonomy, be submitted to the interprovincial conference at Halifax. This question is urgent and topical and I should ask the Prime Minister, the right hon. member for Algoma East, to answer me if possible.
(Text):


Lester Bowles Pearson: Mr. Speaker, this is an interprovincial conference, quite outside the jurisdiction of the federal government, and if we took an initiative in this matter the hon. gentleman would be the first to complain that we were intervening in provincial affairs.


Some hon. Members:: Hear, hear. (Translation):


Louis-Joseph Pigeon: A supplementary question, Mr. Speaker-
(Text):


Mr. Speaker:: No, I am sorry. The question has been raised twice and has been answered. I think the hon. gentleman should be satisfied with that.
(Translation):


Louis-Joseph Pigeon: Mr. Speaker, I rise on a point of order. I should just like to say that I have a supplementary question for the Prime Minister. If it is out of order, I will abide by your decision and resume my seat, but I would ask you to pass on the relevancy of the question if possible. Could the Prime Minister tell the house what reply he sent to Mr. Lesage's written request?
(Text):


Lester Bowles Pearson: Mr. Speaker, this is of course an improper supplementary question, but I would tell the hon. gentleman that the letter has not been answered, so how could I give the answer to the house?



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. J. H. Horner (Acadia):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Is he prepared to answer my question of Tuesday, June 18, with regard to the six pipe line companies which asked for special assistance with write-offs of their income tax for exploration of oil and gas?


Walter Lockhart Gordon: Mr. Speaker, I know nothing about their having asked for it, but the names are:

Trans-Prairie Pipe Lines Ltd.; Pembina Pipe Lines Ltd.; Federated Pipe Lines Ltd.; Trans-Canada Pipe Lines Company Limited; Western Pacific Products Crude Oil Pipe Lines Ltd.; Westcoast Transmission Company Ltd. I shall have more to say about this in the course of my speech.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. C. O. Cooper (Roselown-Biggar):: Mr. Speaker, I should like to direct my question to the Minister of Transport regarding the May 30 meeting with delegates of the railway workers of the western division with respect to the run-through divisions of the C.N.R. Could the minister say when we may expect a report on this meeting, and what decisions were made?


Hon. G. J. Mcllraiih (Minister of Transport):: Mr. Speaker, the subject matter discussed at this meeting has been getting very close consideration, and I expect to be giving replies to the delegation within the next few days.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question for the Minister of Labour, notice of which I have given him. In view of the reported serious lay-offs in the construction industry at this time, can the minister undertake to give a report to the house in the near future on the present and prospective position of the unemployment insurance fund?


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, the answer to that question is that I shall attempt to give a report just as soon as the latest information is available to me.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. G. L. Challerlon (Esquimall-Saanich):: Mr. Speaker, my question is for the Minister of Veterans Affairs. Could the minister say whether the $10 to be granted immediately under the Canadian pension plan to old age security recipients will count as income in calculating the maximum permissible income of war veterans allowance recipients?


Hon. Roger Teillei (Minister of Veterans Affairs):: Mr. Speaker, it was very difficult
Inquiries of the Ministry to hear the hon. gentleman because of the noise across the way.


George Louis Chatterton: Then may I repeat my question. Will the $10 to be granted immediately under the Canadian pension plan to old age security recipients count as income in calculating the maximum permissible income of war veterans allowance recipients?


Roger-Joseph Teillet: Of course that question is quite improper, and I could not possibly answer it. Government policy in this regard will be announced in due course.


Mr. Speaker:: That is a question for the order paper.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I have a question which I think is of utmost importance, and I will put it as clearly as I possibly can in view of its importance. I would like to ask the Minister of Justice-or perhaps the Prime Minister himself-as the Minister of Justice is the man who is responsible for peace, law and order in Canada, whether any consideration whatever is being given to the extraordinary situation whereby a member of the House of Commons, namely the deputy leader of the Social Credit party, has given a press statement and a tape recording release to the effect that he sympathizes with and understands the F.L.Q. and their disorders and bombings in Canada?


Horace Andrew (Bud) Olson: I rise on a question of privilege, Mr. Speaker. I have that report before me, and the remarks attributed to the deputy leader of the Social Credit party by the hon. member for Vancouver East simply are not true.


Harold Edward Winch: Mr. Speaker, could I ask whether the tape recording will be produced by the hon. member; because I understand there was a tape recording; and may I ask if this is a matter which would come within the purview of the Minister of Justice?


Lionel Chevrier: Mr. Speaker, I have not seen the statement that the hon. member alleges has been made. In any event, I am afraid if it were made, which the hon. gentleman who has just spoken denies, it would be a matter, under the administration of justice, for the province to determine or the local authorities, and certainly not for the Minister of Justice.


Horace Andrew (Bud) Olson: Mr. Speaker, I did not deny that some statements were made, but the remarks made by the hon. member for Vancouver

The Budget-Mr. Gordon East, suggesting that the hon. member for Villeneuve (Mr. Caouette) said he sympathizes with the F.L.Q. or any other terrorist organization, are not true.



THE BUDGET


[Stage Direction]
The house resumed from Friday, June 21, consideration of the motion of Hon. Walter L. Gordon (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Nowlan.
Walter Lockhart Gordon: Mr. Speaker, when I began my remarks on Friday I was outlining what the budget proposals set out to do. I pointed out that major changes were required in the structure of Canadian industry if more jobs were to be provided in the future, and I suggested that our chronic payments deficits were the root cause of the difficulties that confront us. Wrapped up in this is the extent of absentee control of the Canadian economy. We must take steps to check this steadily mounting absentee control if we are to resolve our difficulties and remain masters of our destiny. It was for this reason I outlined the views of the government respecting the best way of preserving harmonious relations with foreign investors in Canadian industry. I believe this is the first time this has been done in any formal way.
The budget proposals include a variety of measures designed to plug loopholes in the tax system, and two major measures for producing additional revenue this year and to a greater extent next year. The latter include the requirement that corporations should file their tax returns and pay their taxes on the same dates as individuals do, and the withdrawal of the sales tax exemption on building materials and production machinery.
In the opinion of the government it would have been unwise not to take some preliminary steps to reduce the budgetary deficit. Various methods of doing this were considered but they boiled down essentially to three. These were, first, a substantial increase in the sales tax across the board. This would have meant an increase in the ordinary living costs of everyone in Canada regardless of income, and was resisted for this reason. The second method was an increase in personal income taxes. If this were to produce the desired amount of revenue it would have been necessary to apply the increase at all levels. Again, the government was reluctant
[Mr. Olson.1

to add to the burdens of those in the lower income brackets who have already had to bear the burden of considerably increased living costs. To have been effective in producing a substantial increase in revenue, an increase in personal income tax would have had to be accompanied by an equally substantial increase in corporation income taxes. This would have slowed production and reduced employment.
The third possibility was the removal of the exemption from sales tax on building materials and production machinery. Quite frankly, Mr. Speaker, no government could be happy about doing any of these things. All of them would be bound to be unpopular. None of them is pleasant. Nevertheless, given the premise that some kind of a start should be made to bring our affairs into balance and to reduce the deficit, it was decided that the withdrawal of the exemption was much the least objectionable of the three courses mentioned.
We all know that any tax increase adds to costs and has some ill effects on production. More income tax or a higher sales tax on the things that everybody buys would have had a far worse effect-a worse effect, especially, on employment. I hope that there will be a lot more discussion about the objectives of the budget and about the specific proposals put forward during the remainder of this debate. I shall have something more to say about this a little later.
However, as much more attention has been given so far to the assistance received in preparing the budget than to the budget itself I should first like to say something on this latter subject. When I was appointed Minister of Finance I believed it was my urgent duty to provide a national accounting as soon as possible. There was a vital need to develop new policies for the encouragement of employment, and that meant preparing in my department major legislation for the municipal development and loan board and the Canada development corporation. That was in addition to all the work which had been accumulating during the election.
Faced with tasks of this magnitude and urgency, the Department of Finance was seriously overburdened. There is a limit to what it is fair and possible to ask even of men of such devotion to duty and such ability as the officials of the department. I therefore decided that it would be desirable to bring in some temporary help to assist with the drafting of legislation and the preparation of the budget. My colleagues agreed with me and I secured the services of the four men whose names have been mentioned in the debate. As soon as they arrived in Ottawa I gave instructions that they should take or be

given the oath of secrecy and this was done. Everyone who worked on the budget swore an oath of secrecy.


An hon. Member:: Did they keep it?


Walter Lockhart Gordon: An hon. gentleman across the way says, "Did they keep it?" and I answer, yes, they did.


Lester Bowles Pearson: Another smear.


Walter Lockhart Gordon: From then on, Mr. Speaker, I considered everyone concerned, whether they were full time members of the civil service or consultants attached to the Department of Finance, to be in the same position as confidential officials.
Special mention has been made of the fact that Messrs. Stanley and O'Connell did not receive remuneration from the government for their services other than a per diem allowance to cover their expenses. It has been suggested that if they had been paid a salary this would have avoided a question of conflict of interest; to put it another way, that things would have "looked better" if this procedure had been followed.
In retrospect I obviously agree it would have looked better to arrange things in this way. But in practice, however, if it is accepted that the men in question were planning to return to their firms within a relatively short time, it is questionable whether the actual payment of salaries would have changed the situation in any real or material way.
There have been many discussions about the question of conflict of interest. In the last analysis these matters must be resolved by a man's conscience, integrity and his sense of personal honesty. Members of parliament and members of the civil service are in positions of trust and no one would suggest that any of them would use information for personal gain which came to them because of their positions. Surely the same criteria must apply to all others engaged in government service, either on a permanent or a temporary basis. I have complete confidence in the integrity of the many senior civil servants and of the special consultants who assisted me in the preparation of the budget. As I said on Friday, June 14, I take personal responsibility not only for the budget itself but I accept personal responsibility for the secrecy with which it was prepared.
Now, Mr. Speaker, I have no complaint about the questions that have been raised by hon. members on this matter, in so far as they have been directed to myself. I could have taken the safe, cautious and traditional course of producing a budget at some later date. I decided, and it was my decision, to take steps to speed up the proceedings so that
The Budget-Mr. Gordon Canadians might know where they stood, and might be informed about the policies the government proposed as quickly as possible. What I am particularly sorry about, however, is that my decision has caused a debate which has reflected on the integrity of able and patriotic men who were willing to come here and serve their country to the best of their ability. I can only hope that what has been said and insinuated about these three men in the past ten days will not discourage other able and honourable Canadians from serving this government and other governments in the future.
Let me now return to the budget itself, which is the subject of this debate. It is complex, and it is novel in many of the proposals it contains. I became convinced that one of them, the proposed 30 per cent tax on foreign takeovers of Canadian firms, while highly desirable in its objective, would not work in practice in the form in which it was presented. Having reached this conclusion, I recommended to the Prime Minister (Mr. Pearson) that it should be withdrawn immediately pending a further examination. I have now made that examination and have come to the conclusion that this tax is not practicable for this budget.
It was not easy last Wednesday to decide to withdraw the tax. However I thought, and the government thought, this was the proper thing to do and that the withdrawal should be announced to the house at the earliest possible moment. In my opinion, Mr. Speaker, and in the light of the stock market action at the time, it was best to have made the announcement when I did. I have been criticized for informing the three special consultants of my decision to withdraw the tax on takeovers before the announcement was made publicly. All I can say in reply to this is that, in view of their work on the budget and the fact they were sworn to secrecy, I believed it proper to inform them of the change I proposed to make, just as I thought it proper to inform the two senior permanent officials of the department concerned. If the consultants were to have been treated differently while they were attached to the department, then they never should have been taken on in the first place.
Now, Mr. Speaker, it has been suggested that the house was misled as to the circumstances surrounding the withdrawal of the takeover tax. I certainly had no intention of misleading anyone. If some hon. members feel that they were misled, I apologize to them. But nevertheless, having reread Hansard carefully, I am convinced in my own mind that my answers were at all times accurate and proper replies to the questions asked. On

The Budget

Mr. Gordon Wednesday last, the right hon. Leader of the Opposition (Mr. Diefenbaker) inquired as to whether I had advised Mr. Kierans or anyone else as to withdrawal of the takeover tax. The suggestion, as I understood the question at the time, was anyone else connected with the stock market. In my reply I said I had given no information to Mr. Kierans or anybody else. I added that I had, of course, talked to the Prime Minister and members of the cabinet. I said in my answer, if I remember correctly, certain members of the cabinet, because all of them were not present at the time.
On Thursday, the hon. member for Three Rivers (Mr. Balcer) asked whether I had consulted, he used the word "consulted", my three outside advisers before withdrawing the tax. I replied to him that no one but the Prime Minister and members of the cabinet were consulted. This was absolutely true. Perhaps I should have added that I had informed the departmental officials, including the three consultants, of the decision. But I would remind hon. members that this was not the question asked. On Friday, the hon. member for Winnipeg North Centre (Mr. Knowles) asked whether anyone else besides the top officials of the Department of Finance had been informed of the decision. My answer was, yes, I had informed the deputy minister, the assistant deputy minister dealing with taxation, and Messrs. Stanley, Conway and O'Connell.
It has been suggested that this answer on Friday differed from the answer I had given to the Leader of the Opposition on Wednesday. The answers differ because the questions were not the same. The question asked me on Wednesday was whether I had advised Mr. Kierans of the Montreal stock exchange on the previous evening or advised anyone else that day. I took it for granted that the question referred to other stock exchange officials who had come to see me, and I think everybody knew they had come to see me. It did not occur to me that the Leader of the Opposition meant to include in his question members of my departmental staff, and frankly I do not believe the Leader of the Opposition intended at the time to do so. If he had so intended, he would have framed his question differently. And if he had framed it differently, I would have answered it as forthrightly as I answered the hon. member for Winnipeg North Centre (Mr. Knowles) on Friday.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: If there has been a misunderstanding in this matter, I can only apologize to the house, but I repeat there was no intention on my part to mislead anyone.


In the course of the debate a number of proposals have been made by hon. members respecting other items in the budget. For example, the hon. member for Digby-Anna-polis-Kings (Mr. Nowlan) questioned the desirability of giving the Minister of National Revenue discretion to deal with questions involving dividend stripping. I can assure him I shall give this careful consideration before the bill comes before the house.
I think it was the hon. member for Acadia (Mr. Horner) who raised a question about the desirability of making certain amendments with respect to pipe line companies retroactive to April 10, 1962. This was done to avoid some very complicated drafting, and because I was informed that the companies in question would not benefit from such retroactivity in any way. However, I shall look into the matter again and consider it before the bill is introduced.
I hope very much, Mr. Speaker, that other hon. members will bring forward their proposals for improvements. It seems to me that is what a budget debate is for, and I can assure the house that all such proposals will be considered very carefully. If they are practical proposals that will improve the legislation, appropriate changes will be made either when the budget resolutions or the bills are presented for approval.
Now, Mr. Speaker, there is one thing I should like to say in conclusion. In the past week some hon. members of the house-I hope not too many-and some people outside the house have made it plain that they would like to see me leave public life.


An hon. Member:: No.


Walter Lockhart Gordon: I have made mistakes and I may make some more if I stay here. This is inevitable, I suppose, if one's objective is to get things done regardless of the difficulties to be overcome. All I can add is this: as long as I remain a member of the house I shall strive to do those things which I believe to be in the best interests of the great majority of the people of this country.


Mr. Lambert:: Mr. Speaker, may I ask the Minister of Finance a question.


James Allen (Jim) Byrne: If it is in order; you should know.


Norman Platt Lambert: Can the Minister of Finance agree that any discussions concerning the circumstances of the preparation of the budget, were discussed during the budget debate at the direct invitation of the Prime Minister and the house leader?


Walter Lockhart Gordon: I do not follow the question, Mr. Speaker.


Lester Bowles Pearson: It is a stupid question.


Norman Platt Lambert: 1 will put it again. Would the Minister of Finance not agree that any references to the circumstances leading to the preparation of the budget, and related questions, discussed during the budget debate so far, were at the direct invitation of the Prime Minister and the house leader, as of last Monday?


Walter Lockhart Gordon: I do not know who started the kind of debate that has been going on, but I deplore the insinuations, innuendos and slanders in these speeches.


Jay Waldo Monteith: Mr. Speaker, as this is my first formal address in this session of parliament I would like to congratulate you, the Deputy Speaker and the deputy chairman of committees on your election to the offices you hold. You all have great responsibilities and I wish you well in the discharge of your duties. It being practically five o'clock I wonder if I could continue my remarks at eight o'clock.


Mr. Speaker:: It being five o'clock the house will now proceed to the consideration of private members' business, as listed on today's order paper, namely notices of motions.



INCOME TAX


Marcel Lessard: That, in the opinion of this house, the government should study the advisability of amending the Income Tax Act so that all revenue deriving from a contribution to a recognized pension fund be exempt from income tax up to a maximum of $3,000 a year.
He said:
(Translation):
Mr. Speaker, this notice of motion I have introduced and which is being considered today follows many other resolutions designed to improve the financial situation of those who have reached retirement age. Most of those workers have contributed to pension funds by way of deduction from their salaries in order to get some security and an income when the time comes for them to retire, at 65 years of age.
The motion provides:
That all revenue deriving from a contribution to a recognized pension fund be exempt from income tax up to a maximum of $3,000 a year.
Mr. Speaker, when a worker has contributed all his life to the welfare of the country, he is entitled to our gratefulness. At present, those who are nearing retirement age dread the day when they will have to live even more sparingly than before.
Income Tax Exemptions
Having worked throughout their life, without even having had the opportunity to visit their country, to the development of which they have contributed, they see themselves, at 65 years of age, cast aside, condemned to be ignored till their death by the other members of the community.
Statistics show that a large number of pensioners die during the first years following their retirement on account of the sudden change and of worries about their lower income, since in several cases, they still have heavy family responsibilities.
I know that when we are contributing to a pension fund, contributions are not taxable. But, as these amounts are invested in state funds and in private trust funds, I believe that they are highly profitable to the government through the years, since these funds are used to finance the government or companies whose profits are then taxed by the government.
Therefore, I feel the government should accept that recommendation and take it into consideration when implementing the portable pension program it has just put on the order paper.
I know there is much to be said on the subject, and we shall no doubt have the opportunity to do so later.
I do not wish to spend too much time on the matter, because I know how interesting it will be to hear what other members will have to say in that regard.
So I shall end my remarks here and yield to those who want to take part in this debate. I ask them to judge that motion on its merits so that they may give credit to those who helped build this country in which we live and develop this strong nation of which we are proud.
(Text):


Edgar John Benson: The question
which the hon. member has raised is an interesting one. I must admit that when I first read his motion I did not fully understand its meaning. It reads:
That, in the opinion of this house, the government should study the advisability of amending the Income Tax Act so that all revenue deriving from a contribution to a recognized pension fund be exempt from income tax up to a maximum of $3,000 a year.
When I first read these words I thought the hon. member wished to have pension plan deductions increased from the $1,500 which is allowed at present to $3,000. It occurred to me, though, that perhaps he wanted the income received by a pension fund, from the investment of funds contributed by employers and

Income Tax Exemptions employees and put into investments in bonds and securities, to be exempt in the hands of the fund, which is already the case. After listening to the hon. member I understand that what he is really seeking is to have the exemptions of people over 65 years of age increased from the present limit of $1,000, or $2,500 in the case of a married couple, to $3,000 per person or perhaps to $3,000 in total if they have money coming to them from a pension fund. Which of these he desires is not clear in the resolution.
I think that under our present legislation a situation arises where people in the lower income group are treated differently from people with higher incomes who have reached the age of 65 and who have income from various sources whether from pension funds or otherwise. At present, a person who is relatively wealthy when he reaches the age of 65, and whose wife is also receiving income, may claim an exemption of $1,000, as may his wife, plus $500, plus medical and donations exemption of at least $100. This means the two persons, each of whom has an income in excess of $1,000, may be eligible for total exemptions in the amount of $3,200. On the other hand, in cases when a married man is in a lower income tax group-let us assume his wife does not receive income in excess of $1,000-may claim only a total exemption of $2,600, that is, the exemption of $1,000 for himself, $1,000 for his wife and $500 because he is beyond the age of 65, plus $100 basic exemption for medical and charitable payments.
I agree with the hon. member who introduced this motion that this situation is unfair to persons who are in a lower income tax bracket. However, I believe the motion is unnecessary. I know this matter has been raised with the Minister of Finance and I am sure it will be considered carefully in the future so that the anomaly now existing in the Income Tax Act may perhaps be corrected in the future.
At this time I should like to review some of the provisions of the Income Tax Act with respect to pensions-provisions which I think are fair and reasonable both to those who are contributing to pensions and to those who are receiving funds by way of pension. First of all, however, with regard to exemptions generally, let me repeat that I agree there is an argument in favour of increasing to $3,000 the total exemptions for a man and his wife, when they reach the age of 65. However, I do not think this should be confined to amounts received from a pension fund. I do not agree that pension receipts should be treated differently from funds derived from any other source when a man and his wife reach the age of 65. In con-

nection with this conclusion, I should like to refer to the Income Tax Act and some of its provisions with regard to pension funds. Looking at section 11 (1) (i), we find that amounts contributed by the taxpayer to or under registered pension fund or plan are deductible from income in an amount not exceeding in the aggregate $1,500 in the year if retained by his employer from his remuneration in respect of services rendered in the year; or paid into or under the fund or plan by the taxpayer as part of his dues for the year as a member of a trade union. That is, the individual has the right to deduct from his income his actual contributions to the pension fund up to $1,500 a year. In addition, he may deduct an additional $1,500 in respect of payments making up for past contributions should he have entered the pension plan late in life. Similarly, under section 11 (1)	(g) and section 11 (1)	(h) of the
Income Tax Act an employer has the right to deduct from his income contributions which he may make on behalf of an employee to a registered pension plan in order to build up a pension fund for the benefit of the employee when he retires. The amounts he may deduct in these circumstances are similar to those of the employee, that is, he may deduct an amount up to $1,500 in respect of each employee he has for present services and he may deduct an additional amount in respect of past services. In addition, under section 76 of the Act, an employer may make deductions with regard to a lump sum payment to build up the actuarial amount necessary to provide pensions for employees on retirement. Section 5 (1) (a) of the act excludes amounts which are contributed by an employer to build up a pension fund for an employee from income of the employee during a specific year. Thus under the present provisions of our Income Tax Act an employer and employee may together make current contributions of up to $3,000 to a registered pension fund all of which are deductible from the taxable income of the employer or employee. In addition amounts may be deducted in respect of past services.
When I first looked at this resolution put forward by the hon. member for Lake St. John (Mr. Lessard) I felt he was seeking to have this amount increased beyond the present $1,500 level for each during a year up to an amount of $3,000 each, and I took the trouble to look into what it would cost the treasury. Such an increase would cost in the area of six or seven million dollars annually. Throughout a man's lifetime and during the period he is employed he may make contributions to a pension fund, and deduct them

in addition to his ordinary personal exemptions, in determining the amount on which he pays tax. A person who pays into a pension fund is thus in the position where he has had an advantage over the individual working for himself who may not have been fortunate enough to contribute to a pension fund.
This was the situation up until 1957, when the idea of a registered retirement savings plan in Canada was put forward. Beginning with the 1957 taxation year individual taxpayers could obtain a limited deduction of premiums paid under registered retirement savings plans, also referred to as pensions for the self-employed, in computing their income tax each taxation year. However, as is presently the case with funds received from a pension fund, all amounts contributed by an individual to a registered retirement savings plan are taxable along with interest earned when received back by the individual. It really gives the individual the right, in effect, to somewhat average his income over his lifetime. He can by contributing to funds such as this, reduce his taxable income during years of high earnings, and then when he has reached retirement age at 65 or perhaps 60, or whenever he chooses to retire he may take these funds into his income and the amounts he receives will be taxed at lower rates at a time when he is in a much lower income tax bracket. The idea of a retirement savings plan was a fine one when introduced in 1957. It provided a chance for the individual not employed or not a member of a trade union, where people did have an opportunity to contribute towards pension funds, to set up his own pension plan and create a retirement allowance for himself when he reached 65 years of age.
The registered retirement savings fund follows the principle that an individual may contribute to a plan which is set up by him and cared for by a trustee. He may deduct an amount equivalent to 10 per cent of his income for the year, not exceeding $2,500. It would seem at first glance that he has been treated rather favourably as compared to the employee who is able only to deduct an amount up to $1,500, so provisions were put into the plan which was incorporated in the Income Tax Act whereby a person who is contributing to an ordinary pension plan would be allowed to make additional contributions to a registered retirement savings plan which he could set up on his own up to an amount of $1,000, so that he could make a total contribution of $2,500 into some sort of retirement plan, which contributions would be deductible for income tax purposes. Thus we are in a position where an individual
Income Tax Exemptions working in a plant or for an employer who has a pension plan might actually have an amount up to $4,000 each year going into retirement plans set up on his behalf, which contributions either he or his employer could deduct from income in that particular year. These funds are allowed to accumulate at interest or be invested and earn dividends, which is the case with many retirement savings plans. Many plans such as this have been set up by trust companies, banks and insurance companies. Indeed, there is a great variety of plans. There are plans which allow an individual to invest in equity stock, so that in that way he wrill not suffer from the diminishing value of the dollar. His stocks will appreciate in value as the dollar feels the effect of inflation, which is all to his benefit.
On these grounds I think there is no serious argument that funds received out of a pension plant at age 65 or at an earlier age should be treated any differently from funds from any other source. As I said previously I think there is validity in the argument that a person at age 65 who is married and receiving funds, whether they be out of a pension or otherwise, should be allowed a total deduction of $3,000; that is, both he and his wife should be allowed the extra $500 deduction permitted at age 65. As I have discovered from the hon. member's interpretation of his motion, I do not think there is any argument that funds received out of a pension plan by people who have retired should be treated any differently from income received from any other source, in that the individual has been able to deduct the amount contributed to this pension fund in arriving at his taxable income over the years.
Many people in years gone by used to buy themselves a government of Canada annuity out of their own capital funds. There is a provision in the present Income Tax Act whereby the only amount taxable in the hands of such people is the amount of the income increment to the fund over the period of investment. If one invests one's own capital in an annuity and does not deduct it at the time it is invested, then it is not taxable when it comes back. The only amount taxable in the hands of the individual under the Income Tax Act when such amount is returned to them is the sum deducted during the years of employment from their taxable income, plus interest, earned by the fund.
There has been a great deal of discussion about the portability of pensions and the right of people to move their pensions from place to place. There is on the order paper at the present time a resolution proposed by the present government providing for the full portability of pensions, and also for a
1502	HOUSE OF
Income Tax Exemptions universal pension plan available to everyone in Canada. I think the idea of this pension plan as proposed in the resolution which will ultimately be discussed in the form of a bill later on will warrant support by everyone in this house. I believe this pension fund will provide a basic pension for all. It will provide the working man with the right to move his pension from place to place and will, I think, give to the people of Canada a type of social security they have never enjoyed up to this time.
In conclusion, Mr. Speaker, I would simply like to say, with respect to the hon. member's motion, now that I understand it-I must admit that I had some difficulty when I first read it-I am sympathetic to his view, if his view is that a married couple of 65 years of age should be entitled to a total exemption of $3,000 regardless of the amount of their income; that is, that there should be no difference between the rich and the poor when they reach 65 years of age. However, I cannot accept, and I do not think many hon. members can after the explanation I have given as to how pension contributions are treated throughout a person's lifetime, that pension fund receipts after age 65, which have been deductible from a person's income during his period of high earnings, should be treated any differently than any other type of income which is received by a person after he has retired.


Louis-Joseph Pigeon: Mr. Speaker, I should like to ask a question of the parliamentary secretary. He was referring a few moments ago to resolution No. 15 on the order paper. I would ask the hon. member whether he thinks the government will submit this resolution to the provinces before we deal with it in the house, in view of this question being the responsibility of the provinces.


Edgar John Benson: Mr. Speaker, I am very glad to deal with this question. With regard to the question of pension plans, I do not think this resolution throws open the whole question of pension plans for discussion in the house-


Mr. Deputy Speaker:: Order. I am sorry to have to interrupt the hon. member but I must inform him that his time has expired.


Mr. M. W. Martin (Timmins):: Mr. Speaker, with the usual brevity displayed by the members of my party I would like to express our support of this resolution, for a very good reason. I think this is one field regarding which the attention of governments both present and past has been very sadly lacking.
I refer to just what is a proper amount of income to be exempted from income tax. It seems to me that the amount proposed in this


resolution of $3,000 a year is a very reasonable minimum in this day and age. After all, what is income tax; on what basis should it be applied? I am one of those who thinks that income tax is a tax that should apply only on a surplus of income, and by surplus of income I mean something over and above the bare necessities of life. Certainly in the present day and age, with the cost of living rising to its present height, this whole field needs a great deal of reconsideration. I am one of those who, with many, many people in Canada, was quite disappointed with the present government. While they seemed, like governments in the past, to realize this necessity while sitting on the opposition benches, they promptly forgot it when they again moved over to the treasury benches.
It would seem to me that every argument that could be put forward in support of this resolution as it applies to pensioners would apply equally well, and possibly even more so, to wage earners. There are certain expenses that are even greater than those incurred during the years of retirement and receipt of pension. I am thinking of such expenses as acquiring a home and raising a family. These are expenses that are not normally encountered by people who are in receipt of a pension.
While I express support for the resolution and would like to congratulate the hon. member for raising the matter for discussion at this time and for reminding the government that certainly in this field they have been rather neglectful in not recognizing this situation and doing something about it, I would say that the minimum amount expressed in the resolution should apply all across the board and should not be confined to people who are in receipt of pensions. This is something, as I have said, that has been sadly neglected in the past. I think it is about time we took a realistic look at this question and brought the exemptions from income tax up to date so they will have a more realistic meaning in the present day and age.


Mr. Lloyd Francis (Carleton):: Mr. Speaker, like the hon. member for Kingston (Mr. Benson), I had some difficulty in understanding this resolution. After the explanation of the mover of the motion, the hon. member for Lake St. John (Mr. Lessard), I think it is now clear what is intended. All of us must agree with the general intention of the resolution, to provide some relief in later years and try to make them as comfortable as possible. I think, however, as a member of this house that the motion in its present form would not be the most equitable means of achieving this purpose. The hon. member for Kingston outlined the history

of tax legislation concerning pensions in this country. He pointed out the general evolution of the principle of pensions. First, there were a number of persons who purchased pensions with money which they retained after taxes; then they had the privilege in later years of drawing payments from the pension plan and paying income tax only on the interest portion of the moneys invested. Then came exemptions built into the legislation to protect the person on payroll, first with respect to the contributions by the wage earner himself, then the contributions in respect of past service, and the contributions by the employer matching, in many cases, those of the employee. I think the hon. member for Kingston pointed out the total amount of exemption which could be claimed by those on payroll. Then there were provisions to deal with independently employed persons.
I disagree with the hon. member for Kingston in one respect. He said he saw no reason why income from a recognized pension fund should be treated any differently than income from other sources. I think there is a good reason why it should, and I would like, if I may, to develop two examples. We will first take employee A, who lives in Ottawa, of course-probably in the Carleton riding- who undertakes a program of systematic saving through his life and participates in a form of investment which is quite usual in this area, he buys a property, in which he lives, and has some income. It may be a duplex or a triplex, but it is a fairly modest property. He purchases that property out of income left after taxes. He enjoys no income tax exemption in respect of that type of purchase. Then in later years part of his retirement income consists of the rents from such property. He pays tax on the income before he makes the investment; then he pays income tax on the money he earns from that investment.
Contrast employee B, who is entirely on payroll. He gets an income tax exemption for his contributions to the pension plan, and the motion as presented to us would grant him an exemption on the money he derives from a pension plan, on which he had an exemption in the first place. This is a discrimination. It compounds the discrimination in respect of income from different sources. To be perfectly equitable you would have to say, in my opinion, that the exemption would be given to income from a source other than a recognized retirement savings plan or pension plan for which an income tax exemption has been given in the first place. Only on this basis would the two be treated equally.
But I think we would all agree that there is a limit to how far we can go in this kind
Income Tax Exemptions of approach. The proper approach to deal with the matter is to deal with it in terms of the exemptions which are enjoyed by older persons at the time of retirement when they need the benefit most. The hon. member for Kingston (Mr. Benson) referred to the basic exemption of $1,000, the additional age exemption of $500 and the medical-charitable exemption of $100, or a total of $1,600 per person or $3,200 per couple, now enjoyed by persons regardless of the source of their income.
I submit that this is the proper approach to deal with this problem. It is a problem of exemptions under the general income tax laws, treating income from various sources equally and not discriminating in favour of income from a registered pension plan or retirement savings plan as against income from another form of life savings.
I think there is another reason why we should think twice about acting on the motion in its present form at this time. We have already had the attention of the house called, of course, to the resolution respecting the Canada pension plan found in order No. 15 on today's order paper. This was referred to by the hon. member for Joliette-L'Assomp-tion-Montcalm (Mr. Pigeon). I think I have got the three names of his constituency correctly. This resolution refers to the Canada pension plan which it is the intention of the government to establish and for which purpose legislation will be brought before the house as soon as the resolution is adopted. Certainly we will have to look at the provisions of this legislation bearing in mind the problem which the mover of the resolution now before us has brought to our attention.
At this point I should like to digress a little and call attention to the resolution found in order No. 13 which has to do with the establishment of the Canada development corporation and which reads in part as follows:
-and generally to further the development of the resources and industries of Canada; and for such purposes to establish an investment company, to be called the Canada development corporation, with a share capital structure whereby the largest possible numbers of Canadians may directly and indirectly invest capital in and profit from the ownership of Canadian industries and undertakings and the development of Canada; to authorize a guarantee by Canada of certain obligations of the corporation-
And so on. I would hope that as a result of this proposal, which I am confident will be adopted by the house, it will be possible to recognize contributions made to the Canada development corporation for pension purposes, and I have no doubt in my mind that one of the purposes which the mover

Income Tax Exemptions of the resolution now before us has in mind might well be achieved if the government were to give consideration to the recognition of contributions to the Canada development corporation, which in my opinion represents a very convenient and desirable form of channelling the savings of Canadians.
We need savings. Canada never had a greater need for capital to further her growth than at the present time. We need measures that are designed to encourage savings in an orderly form and to channel them into the direction of Canadian resources which will be retained under Canadian ownership and whereby the equity represented in such resources will be available to finance the retirement of older citizens. I would think that such would be a highly desirable, if secondary, purpose of such legislation and I hope that when it is brought before the house there will be an opportunity for further examination.
In brief, Mr. Speaker, I believe that the resolution now before us discriminates in favour of one type of income and against another type of income, that it does not recognize the problem represented by the fact that savings are desirable from a public point of view and take many different forms and that we should not just recognize one of them. I believe that the general purpose of the resolution is laudable and all of us can support it without qualification, but such a purpose can be best achieved through an amendment to the Income Tax Act in respect of the basic exemptions enjoyed by persons who are retired.
Finally, I think that the resolution should be considered in relation to at least two proposed pieces of legislation which will come before the house whereby it is possible to consider all of the ramifications and to make the necessary adjustments at that time if such are called for.


Mr. J. J. Greene (Renfrew South):: Mr. Speaker, like other members of this side of the house I had some difficulty originally in deciphering the intent of the hon. member's notice of motion. At first I was under the misapprehension that my hon. friend was concerned with the deduction of $3,000 per year. At present, as the house knows, professional men and ^others in specified categories can deduct up to 10 per cent of their income to a maximum of $2,500 per year but beyond that they cannot make deductions. I was afraid that my hon. friend, who is a member of the Social Credit party, was concerned with persons making more than $25,000 per year and I was rather shocked to think that this might be his concern, inasmuch as I know that his party purports to speak for and 

represent average citizens and ordinary people. It is well known by the people of Canada, as they have shown at the polls on many occasions, that those on this side of the house are the champions of the ordinary people of this country with average incomes. Therefore I was quite concerned when I thought that the Social Credit party was now representing people who make $25,000 or over a year.
However, in listening to the hon. member I was glad to see that this was not his main concern, but rather the return of the payments and not the deduction of premiums. From the standpoint of deductions from income of persons over the age of 65 years I think that none of us would disagree with the fact that a $3,000 exemption is certainly little enough for someone who has lived in this country all his life, contributed to the country and paid his taxes. Certainly a married couple should be entitled to a $3,000 exemption.
As the first speaker on this side of the house pointed out, I think this is now the case in respect of a married couple over 65 years in that each of them can claim $1,500. The motion limits the deduction to recognized pension funds. I take it that the hon. member means registered pension funds, which is the term used in the Income Tax Act. I would deduce from his presentation of the motion that he does not wish the deduction to apply in respect of all pension plans but merely those recognized under the Income Tax Act and referred to as registered plans.
In my view there is inherent in the motion a very broad concept that is no doubt giving trouble to all of us and particularly to members of the cabinet who are concerned with the over-all financial and fiscal picture of the country at this time. There was a day not too long ago, Mr. Speaker, in the days of the laissez-faire free enterprise economy which are not too far behind us, when it was thought that a citizen should provide in large measure for his own future and well-being and that of his dependants. At one time this was possible for people who were industrious, thrifty, farsighted and able to find work.
We have, certainly since the war, come into a new concept of the responsibility of the citizen. We have, to a very large measure, made it impossible for the average citizen to look after his own future and that of his dependants in his old age. I suggest, whether we like it or no, whether we are free enterprisers or whether we are Galbraithian Liberals on this side of the house, every state has to decide where the funds are coming from, how they will be collected, and how the total wealth of the country shall be spent.

A state must also take some responsibility, if she is going to be the great collector of revenues, for the well being of her citizens in those years when they are no longer the producers in the country.
I am quoting off the cuff now, but I believe I have seen statistics to indicate that if we take corporate taxes, federal income taxes, provincial income taxes, indirect taxes and municipal taxes, for governments big and small and state with a small "s" and a big "s", there is some 55 per cent of the total production of this country in each year appropriated for the purposes of the state. Now, the minute we realize that this is what is happening, then of course, we must realize that there are two problems presented. Perhaps my figures are a little high because they include corporate taxes. However, if as I say, 50 per cent of the total production is taken for taxes, then we reach two problems.
In the first place, how is the average citizen going to provide for such necessities as his old age and the education of his children? These things are impossible for him to provide as long as the state is going to take such a great percentage of the total production as she definitely has, and as we demand. We who sit in this house know how very great are the demands of citizens for services from the state. We get nothing for nothing in this world. If the state is going to provide these services, then it is going to require these funds. It is going to have to assume responsibility for the well being of our citizens in their old age to a far greater degree than has been the case in the past.
I point out, Mr. Speaker, that there is one other problem created by this large proportion of our total national production being taken by the state. Not only are our citizens unable to provide for their own old age, but they have too little to put back into economic development of this country. This is the tragedy that we are facing now as was seen by the recent ill-destined 30 per cent takeover tax. I think all of us in this country are concerned, irrespective of the side of the house on which we may sit, irrespective of the method whereby we on this side of the house tried to prevent this taking over of our industry by foreign capital. We would like the Canadian economy, and in particular the control of our natural resources to be in the hands of the Canadian people rather than in the hands of foreign investors.
I believe that our friends south of the border have done a far better job than we have of creating people's capitalism. South of the border we see a far greater proportion of equity financing of large corporations owned by the average citizen, the working man and woman. Members of labour unions 28902-5-96
Income Tax Exemptions down there buy shares so that the base of the corporate ownership of their resources is far broader than it is here in Canada where the average working man and woman has not been able to purchase an equity in our Canadian economy because of our tax structure.


Louis-Joseph Pigeon: Mr. Speaker, I raise a point of order. I think we are not discussing the budget now, but a motion; and I think the hon. member is not on the track.


John James Greene: With respect, Mr. Speaker, my contention is to this effect: We have here a resolution which, if anything is done as a result of it, infers a greater proportion of our national savings being funnelled into the pension plan method of saving. We know, Mr. Speaker, that the pension plan method of saving does not result in investment in risk ventures. These savings do not go into the development of natural resources in our country or new industries. By definition, they cannot go into these avenues. The funds that go into the pension plans go into the trust type of saving method, possibly mortgages or office buildings, but nothing riskier than that.
I suggest, Mr. Speaker, this is one of the great needs of our economy. We are faced with high corporate taxation and high taxation on property. Yes, we need to look after our old people, but we must also remember that we need to encourage far greater numbers of our people to invest in the equities in this country, to invest in new businesses, to invest in our natural resources so that our natural resources will not be controlled outside of this country. The more we put into pension plans, the less there will be in the total savings of this country to put into the risk area, the new development area, which we need to do so urgently.
For all these reasons I submit, with respect, Mr. Speaker, that my argument on this point is pertinent. There should be an over-all plan whereby a person who has been a citizen of this country, played his part in peace and war, brought up his family and contributed to the future of this country, paid taxes in this country for all his working life, will be looked after in dignity. Certainly, he should be looked after in such a fashion that he will not be in want during his senior years.
Along with that, I think we must consider the over-all picture. It is very easy for us to sit here in the back rows on both sides of this house and criticize government measures. It is because the entire picture must be considered that the preparation of a budget is most difficult. In considering this particular motion, Mr. Speaker, I must say that in my opinion the principle enunciated is a good one, mainly, that our older citizens should be

Income Tax Exemptions allowed $3000 a year without the state sticking its ever-grasping hand in their pockets. This is the very least that they should be allowed. However, I suggest that this should not be limited to pension plan type of savings which, by their definition, precludes their investment in the development of new industry or national resources where the need for risk capital is so urgent.
I think one of the greatest challenges in this country today, if we are going to live by the free enterprise system in which most of us believe, but which today has become a sort of laissez-faire free enterprise with small "s" socialism-welfarism if you like-is that our people's needs must be met to as great a degree as possible without complete over-all state planning, leaving a maximum of freedom to the individual so that he can provide for himself.
If we are going to have this type of free enterprise, and if free enterprise is to survive some of the great challenges facing it, we must strive for a more broadly based free enterprise system than we have now. We must do to a far greater degree what they have done with some success in the United States. We must encourage the average citizen to become a part owner of our industrial, corporate and natural resources, in order that the free enterprise system will mean something to him, and not remain the exclusive domain of those few who now own shares and those few who are so often quarrelled with by hon. members across the aisle. Our future should be held corporately by as many people as possible across the land, and I do not think this resolution tends towards that end, although its motive and intent are good.
I suggest that this resolution should be considered along with the other resolution brought forth by the government, and in the over-all if we consider the Canadian pensions act I think it will give a better way of life to our senior citizens, and will assure that those who have contributed so much to this country will in their declining years have some security and sufficient income to live in dignity. At the same time it will take into account the over-all needs of the country, and in particular the need for a greater proportion of the total savings of our people to go into equities, new industries and our natural resources, so that all our savings will not be held by trust companies and banks, but that more of our savings will go into the development of Canada.
If that is done, then tomorrow we will not see the situation that exists today where so many of our resources are held by people who do not owe any allegiance to Canada, and our natural resources will be controlled by Canadians through Canadian savings.


(Translation):


Mr. G. C. Lachance (Lafonlaine):: Mr. Speaker, I take the liberty to congratulate you on the skill and competence you
have shown since you have been called to preside over the debates of the house; it is the first time I am given the opportunity to do so officially since the opening of the present parliament. I am happy to notice that you fill your post with dignity, and the same is true of others who have occupied the chair.
I am of the opinion that the hon. member for Lake St. John (Mr. Lessard) will not mind if I take advantage of this day, the 24th of June, to extend my best wishes to my fellow French Canadians. At the same time, as the member for Lafontaine since June 18, 1962, I wish to remind you that my constituency owes its name to Sir Louis Hyppolite Lafontaine, who took an active part in the founding of the St. Jean Baptiste Society, on June 24, 1834.
Mr. Speaker, I revert to the object of this resolution. I do not want to roam far afield more than is necessary, even though the hon. member for Joliette-L'Assomption-Montcalm did so himself a few moments, because the question he asked them had nothing to do with the discussion on the measure now before us. However, I think the resolution introduced by the hon. member for Lake St. John offers a great interest, all the more so since it fits very well into the present budget debate and, also, into any discussions on tax matters.
During the budget debate, it would certainly be interesting to discuss the matter and more particularly the adequacy of taxation in Canada and especially between the province of Quebec and the central government.
What impresses me most in the resolution is the fact that it discriminates against a great segment of the population, against those who are still working while others are ready to take their pension, against self-employed workers who did not have the opportunity to contribute to a pension plan, against those who were not forced-"forced" is perhaps a little too strong-to contribute to a pension plan. It also discriminates against those who made personal investments, against those who, rightly or wrongly, invested in the private corporations, who in many cases largely contributed to the financial development of Canada. It discriminates also against those who have no pension at all, who did not have the opportunity to work for companies or governments, whether it be federal, provincial or municipal having a pension plan of their own.

It is on that aspect of the question that, in my opinion, this resolution does not meet the requirements and thus cannot get the approval of the members of the house. Besides this matter has been remarkably well discussed by the parliamentary secretary to the Minister of Finance (Mr. Benson) in a clear and detailed speech on what is involved in the resolution moved by the hon. member for Lake St. John (Mr. Lessard).


Louis-Joseph Pigeon: Mr. Speaker, it is six o'clock. Do not let him kill this notice of motion.
(Text):


Mr. Deputy Speaker:: Order. It being six o'clock I do now leave the chair.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


[Stage Direction]
The house resumed consideration of the motion of Hon. Walter L. Gordon (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Nowlan.
Jay Waldo Monteith: This afternoon I had the opportunity to pass on to you and to your colleagues, Mr. Speaker, my good wishes and congratulations on your election to office. I now come to my remarks concerning the budget.
In his opening words on budget night, the Minister of Finance (Mr. Gordon) indicated that his horoscope for the day was: don't worry over money matters. He suggested it was probably not appropriate for the occasion, but I fear this budget was drafted with just that in mind. If he did not worry sufficiently, I can assure him the rest of Canada has been worrying plenty ever since its presentation. Never has there been such an outcry against a budget. The minister called it a face the facts budget. I call it a hit and miss budget. He spent a great deal of time hitting at the previous government and all the time he missed the true significance of what a budget means or should do. In the ten years in which I have sat in this house I have never missed a budget speech. I have never heard in all that time a more political one, or one which was more ill conceived than the budget delivered by the hon. gentleman the other night.
28902-5-96i
The Budget-Mr. Monteith
Last Friday the minister tried to cover up much of his ineptness. He has taken a different approach; he is all sweetness and light. He would like us to consider the terms of the budget in all seriousness. I intend to do this in the short time available to me. I suggest, however, that if he had shown just a little humility on budget night he would have found himself in a much happier position today. The minister said this afternoon -and I think I am quoting him correctly- that he deplored innuendo. He should have thought of that on the night of June 13, because his own budget speech was full of innuendo. The hon. gentleman's present approach is all too late. The explanations he gave this afternoon were weak and uncertain. It is true he received plenty of applause from hon. members on the benches surrounding him. But what else could they do? That is not their feeling when they are not here in the house under the gun, so to speak. Despite all this, it was obviously his swan song.
I said I would have something to say concerning the budget provisions. I now come to these. The Minister of Finance did admit in his budget address that in 1962 the gross national product increased by some 8 per cent. He estimated that in this coming year the increase would be about 5 per cent. Well, he is apparently looking toward a decline in the economy with the present government in power. I would point out that the final report of the royal commission on Canada's economic prospects in November, 1957, estimated that the gross national product would not reach $40 billion until the year 1965. I point out that with a Conservative government in power this figure was reached in 1962.


Walter Lockhart Gordon: Would the hon. gentleman permit a question? In what kind of dollars was that estimate made?


Jay Waldo Monteith: I simply took the figure out of the report of the royal commission. No doubt the minister was basing his estimates at that time upon what a Liberal government could have expected to obtain. He has reverted to a smaller estimated growth as being a reflection of Liberal endeavour. In the light of the 1962 increase of 8 per cent in the gross national product and the minister's own projection of a gain this year of only 5 per cent, one does not have to be a mathematician to project this sort of progression to a state of complete economic standstill and stagnation.
As pointed out by Mr. John Meyer in the Montreal Gazette of Thursday, June 20, there is at least one notable omission from the budget. There has been much talk of freer

The Budget-Mr. Monteith trade by this government. There has been no suggestion whatever of what is going to happen to companies which have only been operating in Canada because of some tariff protection. What is going to happen to these companies, and are they going to be helped through any transition period? I can name dozens of companies in my own constituency which are understandably concerned about this situation.


Paul Joseph James Martin: And who have been for the last six years.


Jay Waldo Monteith: I would tell the Secretary of State for External Affairs that the companies in my constituency have never been more prosperous than under the rule of the Conservative government, and they all say so.
I am convinced this budget represents the thinking of a minister and of a government which are looking to the day when Canada will have a completely planned economy. The gimmicks in this presentation demonstrate just how far hon. gentlemen opposite would like to go in developing an ever more complex bureaucracy. Just one such gimmick is the suggestion of a wage sharing contribution up to a maximum of $75 a month to any business giving employment to an unemployed person over the age of 45. The minister says the suggestion is not without difficulties and risks and will require careful administration and safeguards. While appreciating the intent, I say this scheme is so full of pitfalls it will need an army to administer.
I do not think I have time to deal at any length with the proposed 30 per cent tax on sale of shares of public companies listed on certain stock exchanges to non-residents, and since withdrawn. This has been gone into in detail by my hon. friend from Digby-Annapolis-Kings as well as by others in this house. I would say, however, that before such a far reaching suggestion was proposed in this house the government should have had some knowledge as to the possibility of its administration. This afternoon the minister came to the conclusion that the proposal was not practicable for this budget. Why in the world did he not know this before causing such havoc on the financial markets? If these special advisers he has been admiring this afternoon were half as good as indicated, they should have known that the scheme was unworkable. What concerns me more is the minister's intimation on Friday, and again today, that if he could not overcome the administrative difficulties inherent in this tax, and could not re-introduce this particular iniquitous takeover penalty-and we now know he cannot-he proposes to introduce some new, some unknown curb on takeovers 
which will, perhaps, be just as destructive. Again today he said that something must be done. Does the minister propose to employ the same three brain trusters to conjure up this new and threatened impost, or will he rely on the tried, trusted and proven personnel of the finance department.
This afternoon the minister tried to justify his announcement of the withdrawal of the 30 per cent takeover tax at the opening of the house of Wednesday last. Why did he do that when never before have such announcements been made until after the closing of the financial markets? Was he frightened that due to the state of the market the country was going bankrupt? Why did he break all precedent? Any of his department advisers could have told him that this just was not done. The minister has gone into some detail to show us how he is trying to achieve 25 per cent Canadian participation in foreign-owned corporations. I agree with his objective.
I feel the one basic weakness in Canada's economy today is the huge annual payment of interest and dividends we must make to owners outside this country. When the previous government came into office we faced a trade deficit of some $753 million annually. We overcame that obstacle. We changed that deficit into a trade surplus over the last few years. In the meantime the balance of payments has been adversely affected by an ever increasing outgo of interest and dividends. I repeat that I agree with the minister's objectives, but is it the right method? Is it any more administratively possible than the ill-begotten $50,000 daily maximum permissible sales of Canadian corporations to non-residents? I do not think so. How is anyone to know from day to day the exact number of shares foreign-owned or Canadian-owned? For one thing stock transfer ledgers cannot be kept right up to the minute. What would happen if Canadian holdings were 24 per cent one day and 26 per cent the next? I have heard that the legal fraternity are already figuring out ways to try and beat the new proposals, such as allowing more than 25 per cent Canadian ownership of a participating common stock but non-voting, and have a small issue of voting stock. This might well help the imbalance of payments, but not the actual control in any way. Surely all this cannot help but create uncertainty and cause an outflow of foreign capital and even Canadian capital.
It seems to me that a more positive approach should be taken. Instead of penalizing the foreign investor, make it more attractive to the Canadian investor to invest in Canadian equities. Otherwise the foreign investor is definitely going to lose confidence in our economy, if he has not already done so. How

can he help it? I would like to give an actual illustration of just what this type of thing means. I will call the American subsidiary operating in Canada, to which I refer, company A. Company A has Canadian management. All its employees are Canadian. It has grown in 10 years from giving employment to 50 people to a position where it gives employment to 250. It has built up an export business. It has never paid a dividend to its American parent company. Some of its directors are Canadian. This company A had two deals pending whereby it would take over existing companies and in both cases could use its existing outlets to increase sales, increase exports, which are so important, and thereby increase employment which we all agree is paramount. If this proposal goes through I am afraid it will be the death knell of that increased employment. And to think this suggestion came from a government which had the temerity to say they could regain foreign confidence. I am as sure as can be that the foreign investor is today saying: "Oh for the good old days of the Conservative government when Canada followed sound financial policies".
There is a proposal in the budget to allow new manufacturing and processing enterprises, located in designated areas of slower growth, freedom from income tax for three years from their inception. Exactly what does this mean? Does inception mean incorporation or commencement of operations? We all know that the period between incorporation and the commencement of business often stretches into many months or more. Experience shows not too many enterprises make profits the first two or three years. Is extra depreciation as suggested of any real value during those years? New businesses if they are to qualify must be certified to have come into existence within 24 months following these measures becoming law. These terms are for a limited period. Are these enterprises going to find it advantageous to carry on after this period has expired? Personally, I feel section 40A of the Income Tax Act should be retained, as it is a continuing incentive to increased sales and, as a consequence, increased employment. It has not had a reasonable trial. I must agree with the objective desired, but I have grave doubts as to the actual application of these suggestions bringing about this objective. Only time will tell.
Then there is the proposed 11 per cent sales tax on building materials and production machinery and equipment. It will produce revenue, yes. But surely the minister is aware by now what a price he is going to pay by way of loss of jobs. I have heard it said that by the time sales tax is added to
The Budget-Mr. Monteith new machinery and also to the finished product, the actual building materials could be some 18 per cent higher in cost. The minister said in his budget speech that-
-there are good reasons for using the manufacturers sales tax rather than increased income taxes.
I wonder whether that is so, Mr. Speaker. As it is, he has chosen to stifle the construction business which is so vital to our over-all economy.
There have undoubtedly been thousands of protests about this move, but let me read a letter I received this morning. This letter, Mr. Speaker, is from the rector of the United Missionary Church in Listowel, Ontario, which is in my constituency. He says:
I am writing you regarding this 11 per cent federal tax which the Liberal government brought in in their recent budget. We are building a new church in the town of Listowel and were within four days of having our contract let and signed when the tax was imposed upon us. We feel this very keenly and it is going to work great hardship on our small congregation.
I noticed an article last evening in the Kitchener. Waterloo Record which I shall include in my letter. If there was the possibility of doing something or lifting the tax on senior citizens homes, would churches not also come under this category as they are a non-profit organization?
How this is going to help the economy of the country I cannot see, when the Liberal government said they were going to allow anyone who built a home in the winter a $500 premium and then a few days later a 11 per cent tax is put upon us. If there is anything you can do in this connection we would appreciate it greatly.
I would bring very forcibly to the attention of the minister the plight of these people.
This afternoon the Minister of National Revenue (Mr. Garland) tried to give some explanation of the regulation and as to how the operation of this new tax was going to be handled. He mentioned that certain things were going to be exempt-hospitals, public institutions, municipalities and so on. Did he mean churches? I do not think so; there was no mention of them. This was the situation when, as I mentioned, they were within four days of signing a contract. The whole gist of the explanation of the Minister of National Revenue (Mr. Garland) this afternoon was ill founded in that this had not been decided upon before the budget was presented to the house. I would like to know, Mr. Speaker, whether the Minister of Finance (Mr. Gordon) has any estimate as to the adjusted income which it is proposed he will receive because of the explanation of the Minister of National Revenue this afternoon, which course had not been determined at the time of the presentation of the budget. I think the whole thing is completely unsatisfactory and I believe, as the right hon. Leader of the Opposition (Mr. Diefenbaker) expressed it this

The Budget-Mr. Monteith afternoon, the removal of the exemption from sales tax of building supplies should not be proceeded with.
There are several other proposals in the budget, some of which I agree with at least in part. The minister has said the Glassco commission recommendations that may be expected to result in greater efficiency in the public service or in useful reductions in expenditure will be implemented as quickly as possible. I hope so. An economic council is to be set up. We proposed this last session and it was blocked by the opposition of the day.


An hon. Member:: That is not true.


Jay Waldo Monteith: It is true. The minister says this government intends to maintain the fixed exchange rate at its present level. I believe it should. I cannot help but remind hon. members of the cry which went up from the present Minister of Finance and his colleagues at the time the present exchange rate was set by the previous government. They predicted gloom and doom, greatly increased prices and disaster to Canada. Now they agree with it. I feel we will all agree that excess expense accounts and high priced imported automobiles are unnecessary. It is proposed that section 18 of the Income Tax Act be repealed. This deals with lease option agreements. Due to abuses which have built up, I cannot disagree. I believe that the suggestion to make rebuilt or remanufactured goods subject to sales tax is going to hurt many small businesses. This proposal must be examined in detail at the resolution stage. I agree that the excise duty on exports of electrical energy should disappear. My colleague the hon. member for Digby-Annapolis-Kings (Mr. Nowlan) has dealt more than adequately with the proposal that the Minister of National Revenue be vested with discretionary powers. I agree with him completely, particularly in light of the debate in this house some two years ago having to do with legislation concerning class or kind of goods made in Canada. Mr. Speaker, I am pleased, if I understood him correctly, that the minister this afternoon said he would have another look at this whole question.
There is a proposed amendment to stop a so-called device whereby a company that has experienced losses is purchased for the purpose of applying those losses against income from another business. I can understand the desire behind this amendment, but I would caution the government that there could be other objectives in purchasing such a company. Possibly by application of more knowledge, experience, sales outlets, and so on, such a company could honestly be expected to turn its losses into profits. This proposed amendment should be examined

closely. There are, of course, several customs tariff changes which must be studied in detail when we get into committee on the resolutions.
The minister has estimated a deficit of $565 million for the current fiscal year. To alleviate his position in subsequent years the minister has accelerated corporation income tax payments by two months. True enough, this will provide some additional nonrecurring revenue. He says it is desirable that corporations should pay their income tax as their income is earned to a greater extent than they do at present. Mr. Speaker, the minister left the impression that corporations would now be paying their income tax in a similar manner to that of individuals because they would both have to file their returns four months after their fiscal year end. I would point out that the individual is presumed to have approximately 100 per cent of his tax paid by the year end, either by way of deduction by his employer or by quarterly instalments. The corporation is not obliged to have its last instalment paid until four months after its year end. My only thought in mentioning this is that presumably some other finance minister might at some time in the future decide that he in turn would like to have available some nonrecurring revenue and there is still scope in this instance to move up payments another two months or even another four months.
I cannot help but predict an actual deficit of much larger proportions before the fiscal year is ended.
There will be large supplementary estimates before next March 31. The expected return from the sales tax on building supplies, machinery and equipment will not materialize, in my opinion, simply because construction will lag due to the increased costs, and consequently the industry will suffer. I would stress that this is not my main worry concerning the sales tax, but rather the resultant loss of jobs.
As to the position in 1964-65 one can only hazard a guess at this time. The suggested old age security increase for a full year would probably be in the neighbourhood of $130 million to $140 million. Increases in salaries paid by the government are, I believe, estimated to run some $65 million in a full year. To the best of my understanding a commitment has to all intents and purposes been made to the province of Quebec to increase its annual share of tax revenue. Naturally this would include all provinces. Any such step would obviously involve many, many millions of dollars. If this government fulfils all its promises, Mr. Speaker, I do

not see how it can escape a deficit approaching $1 billion in each of the next two years, unless it raises taxes.
In conclusion, Mr. Speaker, I must say that this budget has been born out of political expediency due to rash promises made by the Prime Minister (Mr. Pearson) and his colleagues during the election campaign. But this is the accounting of the country's finances not only to Canadians but to the world. It is inexcusable that such a hash should be presented in this House of Commons. It is obvious that it was prepared without due consideration of all the possible implications. There is a lot of froth undoubtedly whipped up by the three wise men, but there is no substance, as would probably have been the case if the proper channels had been followed.
I utter harsh words, Mr. Speaker, but I feel they must be said. This afternoon the minister in some respects met certain complaints raised in this house during the past week. There is still much unexplained and his words cannot repair a great deal of damage already inflicted. His statement has done nothing to remove the calamitous uncertainty overhanging the securities market. Fortunes, I believe, have been made and lost these past few days. By the way, the Prime Minister this afternoon refused the request of the Leader of the Opposition for an inquiry into stock market transactions. What now can be done to bring this situation to an even keel? Certainly not the statement of the minister this afternoon.


Mr. Deputy Speaker:: Order. I regret I must inform the hon. member that his time has expired.
(Translation):


Marcel Lessard: Mr. Speaker, having read the report of the Gordon commission on the economic prospects of Canada, following a survey which took place from 1955 to 1957, I was, in a way, pleased to find in the budget some concepts which were based on suggestions made in that report, more particularly those which tend to ensure the safeguarding of our industry and the gradual recovery of all we lost or never had.
Like all right-thinking and sincere Canadians, I would have liked a little more firmness, but I find that the government has, at most, confirmed the policy initiated by its political predecessor, which had been qualified as anti-American by some Liberals.
Mr. Speaker, to want Canadian ownership in Canada in no way indicates that we are nurturing feelings of animosity against anyone investing in this country. Be it far from
The Budget-Mr. M. Lessard me to think so, and I cannot understand how anyone can accuse of being anti-American those who want to show a proud spirit of national independance.
We in Quebec are accused of being troublesome fellows as regards confederation, because of our nationalist mind. I want to assure our English speaking fellow citizens that we are not "anti-everything". We are not "antiAmerican". No, we are pro-Canadian, that is all. We are not anti-English Canadian. No, we are pro-French Canadian and, as far as I am concerned, there is quite a difference. We are proud of our Canada, we are proud of the dual culture prevailing in this country. We are fighting for biculturalism, because we want Canada to be different from the United States.
We appeal to your co-operation, we want you to understand the issue and realize the urgency of acting in this matter before it is too late. Let us become aware of the superiority our Canadian nation will get from biculturalism.
I would like to quote here the remarks which a prominent member of the London privy council made in the course of a lecture he was giving in Montreal a few years ago. He had asked the audience:
What is a French Canadian?
Whereupon a young newspaperman told him from the front row:
Sir, a French Canadian is a man who has acquired the two greatest cultures in the world. The French-Latin culture which is made of sensibility and subtlety, and the Anglo-Saxon culture which is made of honesty and on immense practical sense.
And the lecturer replied:
Sir, this is the best explanation possible for the marvelous behaviour, the peerless value I always noticed when your solicitors came before the privy council in London.
Mr. Speaker, this in my opinion is an unequivocal proof of the value of our two cultures. This is why we must together extend that heritage to the greatest possible number of our fellow citizens and to those who will come after us.
I would not for a moment entertain the idea of compelling all Canadians to become bilingual and to acquire perfect mastery of the wide scope of our two cultures; this would certainly be marvellous, but it would not in any way be justified practically.
Yet, I believe that it is logical to expect in the near future that 10 per cent of our population will be more or less gained to the

The Budget-Mr. M. Lessard principle of biculturalism and will be able to occupy administrative positions in the public service and in all the areas of our social and economic structures.
Thus constituted, the Canadian nation would obtain an increasing recognition and a great many of our fellow Canadians would occupy prominent positions in the international field.
At present, we are experiencing growing pains, we are a new nation which grew fast and has some difficulties finding a suit which will fit its continued development.
We are in search of our true features, those our fathers of 1867 wanted us to have. I feel sure that with a little good will here and there we shall build a strong Canada respected by all.
Canada needs leaders able to set on a very high plane the ideal to be reached and to indicate clearly the paths leading to it.
I note with satisfaction that for some time we have been making progress towards greater mutual understanding and I dare hope that such is only the beginning and that we shall remain in those good dispositions.
Mr. Speaker, we are now examining the budget presented to us by the Minister of Finance (Mr. Gordon), and I should like to refer to the tone strongly flavoured with political bias in which the speech was read last Thursday. Personally, I deeply regret it because I thought very highly of the minister who always seemed without pretence, humble and sincere; what I particularly liked about him was the fact that he did not have that detestable political arrogance, so detrimental to the high regard in which politics should be held.
What comforts me, however, is the fact that I suspect him not to be the author of those uncalled for remarks but I think that they come rather from one of his colleagues whose heart is still filled with the resentment collected during the last six years spent in the gloom of the opposition.
The minister did not have to attack a defeated opponent to justify some of his omissions in the budget or to make Canadians gulp down the increase of some $100 million in taxes which the small wage earner will have to pay.
In this, he carries on the policy of his predecessors who always made the little fellow pay for the administration's errors, while helping the big man accumulate millions, because, as far as they are concerned, there can be no question of tightening one's belt. Indeed we have always seen them this way.
I hope that the minister will not let himself be guided by such bad advisers, and that
[Mr. Lessard (Lake St. John).!

he will, as he did before, serve us his own ideas, which all hon. members have appreciated during the short period of time the hon. member for Davenport has been sitting in this house.
I can assure the minister that he still has my esteem though I am aware of the bad influence to which he is exposed from those who surround him.
I would like to point out to the minister that Canadian products find it very difficult to compete on external markets and this will become more and more so.
May I quote an excerpt from an item published in the Financial Post of February last, in which an economist who investigated the situation in Germany-a situation always held up as an international example of planned revival-and which reads as follows:
(Text):
Its industries no longer have the enormous backlogs of unfilled orders that characterized the past decade and its exporters are doing business in world markets where oversupply and overcapacity increasingly are the rule.
(Translation):
If I refer to his statement, I find that he points out that, at the present time, Germany must, to maintain its level of economic growth, go more and more on the export market, on that market that is already completely saturated by various products. Therefore, I wonder what we, in Canada, are able to do, what we can contemplate to compete with such countries as Germany, France, Belgium and England.
In secondary industry, I am of the opinion that we will meet strong competition and our chances of success are slim. I do not want to be pessimistic but I think that Canada, like the United States, should look within her own borders. That is what President Kennedy did in the United States, our southern neighbours.
In my opinion, that is what we should also do north of the 45th parallel if we really want to find a practical solution to our unemployment problem. I wonder whether the Minister of Finance realizes that he cannot achieve this by himself, that without the co-operation of his cabinet colleagues, the possibility of success is slight. Nevertheless, there are solutions within reach, but he persists in disregarding them.
Everyone admits that the number of our secondary industries must be increased.
Everyone admits that we must produce ourselves everything that is physically and economically possible to produce.

If the minister looks around, he will see that in the government administration and in the crown corporations, hundreds of millions of dollars, resulting from taxes paid by the citizens, are used each year for the purchase of materials, machines and services directly from foreign countries. Now, those things could be produced here in a large proportion. I am convinced-as he is himself- that that is the only way to stem unemployment at present. It would be interesting for the people to see what influences, let alone bribes, are at work, before those purchases from abroad are made.
It is enough to mention here the strange bargaining that is now taking place in the eventual purchase of jet airplanes for the Trans-Canada Air Lines. According to all evidences, the Caravelle seems to be the best choice. Its efficiency has been tested from all viewpoints and we now have a choice between three airplanes which are actually Caravelles, or modified versions of that aircraft. We have been offered the Caravelles and we were told that they may be built in Canada.
The Minister of Finance might seize this opportunity to restore our external trade balance, and, in so doing, he would get out of the tight corner where he has been put by our international deficits. Those $250 million which Trans-Canada Air Lines is going to spend could be spent in Montreal on that order which, placed with Canadair, would give work to several thousand Canadian technicians and qualified workers.
We have seen in the press where another Canadian company-not a crown corporation this time-is thinking of building 18 cargo-boats at a cost of more than $1 billion. And where would these ships be built? In Japan.
Well, Mr. Speaker, I feel that if a billion dollar contract were granted to shipbuilding companies in Canada, in the province of Quebec or in the maritime provinces, the Minister of Finance would surely find it easier to balance his budget or, at least, to restore our foreign trade balance. I told him the other day that he might possibly bring pressure to bear. He answered that he was not allowed to make any pressure but I feel that he should at least make suggestions which would be more appropriate at this time of the year when we are faced with yet another deficit of half a billion dollars for the year 1963-64.
Last Monday, we opened a debate on certain alleged indiscretions or certain methods which are reported to have been followed for the preparation of the budget. The members of our group did not want to have a full debate on that point because we 28902-5-97
The Budget-Mr. M. Lessard knew that it would lead us nowhere in the long run since, at ten o'clock in the evening, there would be nothing left to say and we would have gained nothing for our trouble.
However, that does not mean that we approve the manner in which the budget was prepared. We feel it is most improper to call in strangers for the establishment of the policy under which our country is to be governed during the coming year because that could enable some people and their associates to make undue profits overnight at the expense of a defenceless and powerless public.
Nevertheless, I doubt that the minister set a precedent in doing so. It is most likely that something similar was done in the past and if the hon. gentlemen who sit on this side of the house and who accuse the minister of unspeakable actions, took the trouble of reviewing their administration in years gone by, they might And that they acted in a somewhat similar fashion if not exactly the same way. Having heard considerable talk about this matter these past few days, I feel this issue has been sufficiently thrashed out and should be dropped.
Mr. Speaker, if the Minister of Finance introduces another budget next year-I am doubtful because of certain rumours going round-I suggest that he should invite every representative public body to submit briefs on fiscal matters. Subsequently, he could look into those briefs in consultation with the senior officers of his department and, in the light of the suggestions submitted to him, he would then be in a position to prepare a budget in the best interests of the country.
Everyone admits that the Minister of Finance cannot know everything and it is normal that he should seek the required information among the general public or probe public opinion. Therefore, he should call upon representative bodies to submit briefs every year in the fiscal and economic fields, which he could study afterwards in conjunction with his officers and experts. On the other hand, I hope he will not always go to Toronto to seek experts. He should look elsewhere, in Montreal or in Vancouver. Anyhow, I hope that with the assistance of his experts and senior officials, he will be able to draft a budget that will be acceptable to everybody. To summarize, I wish him greater success than the last time.
In his 1957 report on Canada's economic prospects the hon. minister stated that full employment contributes to inflation but, quite recently, in answer to one of my questions on that statement, he told me that I would find the answer in the efforts made by the government in its budget to eliminate unemployment.

The Budget-Mr. M. Lessard
Unfortunately, I have to advise the minister that many points of his budget are entirely negative and that they checkmate every effort made by the Minister of Labour (Mr. Mac-Eachen) to reduce unemployment.
The minister did suggest a few measures to bring about economic recovery but with only one of his negative actions, he has wrecked the positive accomplishments which one could expect from the budget.
The harmful and backward measure I am referring to is the 11 per cent tax imposed upon building materials. The minister knows better than anybody else, since he received all those telegrams and messages, that this tax is unpopular. Of course, the question is not whether the tax is popular or not, for we all know that there is no such thing as a popular tax, and we are not concerned presently with the popularity of the tax itself but with its devastating effects.
Both the Minister of Labour and the Minister of Finance have stated that unemployment should be eliminated, that it has lasted too long already; of course, no one can disagree with that. But when on the one hand he makes minor concessions and on the other introduces taxes to kill the advantages offered through other measures, we wonder what the members of the cabinet plan to do with such a procedure.
Mr. Speaker, this new tax shows the state of confusion which pervades the cabinet. They take back with one hand more than they gave with the other and each department seems to work in isolation.
Following the coming to power of a Liberal government a few members of which are prominent planners and economists, after all the promises they had made, we believed that we would see the unemployment problem solved and everything going perfectly smooth. But how disappointed are the Canadians. One is wondering whether one of these days one will not be asked to establish a department of planning to plan some of the government's planners. Things have reached that point.
The Minister of Labour offered a $500 bonus to those who will build during the winter months. The Minister of Finance imposed an 11 per cent tax on building materials. The Minister of National Revenue (Mr. Garland) proposed to reduce by one quarter of 1 per cent the interest on mortgage loans, but where would all that lead us? If the left hand doesn't know what the right hand is doing, we would be better off if nobody gave anything, since in the end the cost to

government for collecting taxes and giving back bonuses or some other kind of grants will consequently reduce the government tax revenues. In a way, we are carrying water with a bottomless pail and I wish to stress that the people are not getting anything out of it.
The people were expecting much, they have been utterly disappointed, those thousands of Canadians who are hungry and lack the necessities of life. Following the promises made by this government in the last two general elections, we were entitled to expect a much more positive and speedy action from the Liberals. Some will say that election promises are just as good as a drinker's determination. And once more, unfortunately, this proverb has been confirmed, yet there will be some to wonder why some voters are cynical and do not have any respect for those who administer the business of this country. Keep on like that, keep on protecting capitalism, and a day will come, which is not too far away where we will fall into the quagmire where other countries have foundered into most complete anarchy.
Mr. Speaker, I do not know whether the government are aware of the situation, but I feel it is time they react because pretty soon it will be too late.
In order to encourage the establishment of industries in depressed areas, the minister provides certain allowances and, by the way, I should like to know on what basis the Minister of Finance and the members of cabinet will determine in what depressed areas industries will be allowed to settle in order to enjoy the benefits provided for in the budget. That would be a good thing to know so that it does not work to the advantage of the richer areas.
Besides, the solution provided by the multiplication of secondary industries cannot be carried out overnight and something more will have to be done to eliminate unemployment quickly.
Mr. Speaker, I had expected much more from the municipal development bank and I must say that I am greatly deceived. I realize that many amendments will be needed to Bill C-76 before we can expect from it substantial benefits to alleviate unemployment.
Mr. Speaker, I realize that time flies. I shall summarize by saying that this budget as a whole is disappointing. It contained some interesting proposals, but the withdrawal of the 30 per cent tax-not so much the 30 per cent tax in itself, but the principle which it confirmed-has somewhat disappointed me.

I think that the Liberal party went right off the track. But considering the fact that the government has now been in office for only two months and that they had many promises to fulfil, we shall grant them a reprieve so that they may either redeem themselves or to prove completely before the people that they are incompetent.
I am sure the people will accept for another period of time to tolerate the government they have elected. Now the opportunity is being given to them to judge the two old line parties. As a matter of fact, they have already dealt with the Conservatives and they are now trying the Liberals who went into retreat for a few years. The people, probably convinced that the Liberals had been chastened by their penance, realize now, a few months later, that the government is changed, but that we have actually been keeping the same administrators and that we should not expect great solutions to the problems facing the nation and the Canadian economy.
The government has submitted its budget and the minister has assumed full responsibility for it as he has assumed the responsibility for the withdrawal of the 30 per cent tax. We criticized him. We submitted proposals to him, as it is our duty to do, and we are asking him to take them under consideration. Time will tell who provided the right answer to the problems facing our country.
(Text):


Hon. Mitchell Sharp (Minister of Trade and Commerce):: Mr. Speaker, I should like to deal with the amendment which has been proposed by the hon. member for Digby-Annapolis-Kings (Mr. Nowlan). I should like to deal with it in two parts, first the part which deals with the procedures in the preparation of the budget, and I shall read the words contained in that part of the amendment:
This house regrets that the Minister of Finance by failing to maintain the constitutional practice of the essential secrecy of the budget has seriously weakened public confidence;
I shall deal with that point first; and then I shall go on to deal with the balance of the amendment which has reference to the contents of the budget itself.
I am one of those who is new in the house, but with some experience in government as a civil servant, I can understand the anxiety of hon. members that the essential secrecy of the budget should be maintained.

97i
The Budget-Mr. Sharp At the same time I must say I deplore the insinuations which reflect on the honesty and integrity of certain persons who have been named in this house without any evidence whatsoever to support those insinuations and reflections.
May I deal with the procedures? I naturally agree with the hon. member for Digby-An-napolis-Kings (Mr. Nowlan) that secrecy is absolutely essential. If there were any suggestions in anything that was said in this house that the secrecy of the budget had been in any way impaired I would be one of those who would vote for the amendment. But there have been no charges made of any kind, and when the Leader of the Opposition was challenged to make such charges he flunked. I know the reasons why it is of great importance, indeed, essential, that secrecy be maintained not only because of the importance of the question itself but also because we all recognize that no one should be in a position to exploit prior knowledge for personal gain. This is a principle upon which we all agree. I should like to draw the attention of hon. members to another financial operation conducted a few years ago in which there was great opportunity for personal gain for individuals having prior knowledge.


An hon. Member:: Make the charge.


Mitchell William Sharp: I am making no charges. I am dealing with this incident, and I hope the hon. member will listen very carefully to what was done by the opposition of that day. I am referring, of course, to the conversion loan. This was an operation of the previous government the financial implications of which were at least as large as, indeed far larger than those provided by this budget or by any budget presented to the house with respect to opportunities for profit by any investment dealer privileged to have inside information. What did the previous administration do at the time of the conversion loan? The loan was to be announced to the public on a Monday. On the previous Thursday, 14 investment dealers and bankers were assembled in Ottawa. On Friday, 28 more were assembled and these gentlemen were asked to advise on the technical details of how this mammoth financial operation should be handled. On the Saturday, about 200 of the senior members of investment and banker institutions were added to the circle of people being given inside information.


George Clyde Nowlan: Nonsense; sheer nonsense.


Mitchell William Sharp: All these people were sworn to secrecy. Many could have profited greatly by breaking that oath. But there has never

The Budget-Mr. Sharp been any suggestion that any improper use was made of their information. It was, and is, a great tribute to the integrity of Canadians and of those individuals who were privy to this inside information from which they could have profited, had they broken their oath-


George Clyde Nowlan: Would the hon. member permit a question? When he becomes minister of finance will he not consult bankers before he negotiates a loan?


Mitchell William Sharp: That is exactly the point that I think ought to be borne in mind by all hon. members. There are occasions when it is necessary to do these things. I am not criticizing the previous government for having done what it did. That is not the point of my speech.


Paul Raymond Martineau: I should like to ask the minister if he thinks matters pertaining to the budget can be assimilated to any other matters with regard to which the government might seek advice.


Mitchell William Sharp: I suggest to the hon. member that the essence of the case is the same. There is no greater need for secrecy about the budget than there is about a loan from which millions of people could have made a profit.


Léon Balcer: Would the minister permit a question?


Mitchell William Sharp: I think I have been charitable in allowing interruptions, and I should like to finish what I have to say. I believe there is one more speaker, at least, and I should like him to have an opportunity of addressing the house.
When my colleagues were in opposition- I was not here at that time; I was earning a living-they criticized and rightly criticized the conversion loan with respect to its financial effects. They never suggested the government had been wrong to rely on the honesty of Canadians. They never suggested that information which the government gave to people in a position to profit by it was in fact used for such a purpose. That is the distinction. The present Leader of the Opposition, at that time prime minister presumably knew how the conversion loan was handled. Presumably he knew that many men who derived their income from financial operations were given information from which they could have profited had they broken their oath of secrecy and used that knowledge for their own ends or for the companies who paid their salaries.
The Leader of the Opposition was prime minister when 200 people were trusted in this way, yet he now pretends to see a con-

flict of interests when two people are trusted. By insinuation and innuendo, but never by charges, he suggests there was impropriety. What can one say of this? I can say only that the whole issue upon which so much of the time of the house has been spent in the last few days is a false issue. Canadians who take oaths, at least in my experience, can be trusted. The right hon. gentleman's government, when he was in power, acted on that assumption.


An hon. Member:: Where is the evidence?


Mitchell William Sharp: Well, you trusted them. The right hon. gentleman's government trusted them in their hundreds. My colleague, the Minister of Finance, has trusted two.


An hon. Member:: He said three.


An hon. Member:: Four.


An hon. Member:: Five.


Mitchell William Sharp: Any more?
The Leader of the Opposition was right.
I am not criticizing him. He was right when he gave his trust. I am not suggesting there was anything wrong about it. But I do suggest he is wrong when he insinuates there was a betrayal of trust, a betrayal of budget secrets, because two men were brought from the financial community to assist the present Minister of Finance.
As all hon. members are aware and, more particularly, those who recently occupied the treasury benches, the budget, as well as other form of legislative action, is becoming more complicated as governments necessarily intervene in trying to influence the economy. It is necessary to bring in outside experts of one sort or another to help governments as temporary officials in departments or as members of commissions. In my opinion this is a useful development. I have served in government and I have served outside. I think some exchange of government specialists with businessmen from time to time on special assignments is a most useful development, and I hope it continues. I do not look on it as any reflection on the civil service that these two, four, or as many as you like to say, came in to help the Minister of Finance (Mr. Gordon) in preparing the budget and other legislation which was part of the economic program. I should like to pay tribute to the men, many of whom I have known when I was a permanent civil servant myself, many hundreds, indeed perhaps thousands, who from time to time gave their services to the government without hope of gain, many with great cuts in their incomes, just in order to make a contribution to the public welfare.
Although perhaps this is redundant, I should like for a moment to repeat in a

different form two or three of the points made today by my colleague the Minister of Finance when he was dealing with the three consultants who have been under discussion in this house. As hon. members know, no budget has been debated in this house for two years. There was a budget last April but it was never debated. In fact, there has been no accounting of the financial affairs of this country for two years. No opportunity has been given hon. members of this house to discuss the financial affairs of the country thoroughly and at length until now. Somebody suggested to me the other day that in view of the criticism which has been made of this budget it is small wonder that the previous government did not bring one down for a couple of years. It was also most important, not only for a financial accounting of this country, which was so long overdue, but because of the economic problems being faced by this country, that a budget should be brought down as quickly as possible, and for that reason the Minister of Finance had to resort to special procedures in order to get help in the preparation of his budget.
We could have proceeded otherwise. We could have delayed this budget for quite some time. But I suggest to hon. members that it is important to have a budget even if the opposition does not thing so, as their actions show. Moreover, I think the Minister of Finance was right when in his budget he brought forward part of the program of this government for employment and the supply of those incentives which are so needed if this country is to make the progress that it should be making. It was also necessary to bring it in at once if these measures were to have the desired effect with regard to next year's unemployment. This meant a heavy work load on the Department of Finance, where there is already a shortage of senior staff. It would have been impossible, as those on the opposition benches who were formerly in government knew, to have been able to get permanent civil servants at this time to do this work.
The hon. member for Digby-Annapolis-Kings (Mr. Nowlan) suggested that these gentlemen wrote the budget. I am sure the hon. gentleman knows that, in the final analysis, no one writes the budget except the minister, and he gets help from many officials. These officials who are under criticism here had no executive power. They had no power to make any decisions. They were merely advisory. They were in the same position as were any permanent civil servants.
Let us look at the position as it emerged. Those on the treasury benches recognize as much as everyone else the special necessity
The Budget-Mr. Sharp for secrecy in connection with the preparation of the budget. This is a tradition which is well established and certainly one which my colleague the Minister of Finance honours, and I am sure will honour regardless of how many budgets he brings in. Everyone who worked on this budget was sworn to secrecy. There has never been any suggestion that they were not. Under the circumstances it is obviously better that anybody working on the budget or any other financial legislation be paid by the government. This government would not lightly depart from that general rule. I was interested in the observation of my colleague the Minister of Finance when he said today that perhaps in a technical sense he had departed from a convention. But there was no suggestion by anyone that these individuals were in any way prejudiced or hampered in the discharge of the temporary duties they had undertaken by the fact that they had not been taken off the payroll of the companies concerned, but paid by them during the temporary period they were employed in the government; nor has anyone suggested that this made any essential difference to the conflict of interests.
May I go back to a much more important occasion when there were at least 200 people brought in and given inside information. Nobody suggested at that time that they should be taken off their payrolls while they gave temporary advice to the government on a matter on which they might have made a fortune had they broken their oaths of secrecy. Moreover, Mr. Speaker, it seems to me that if these men who are from time to time called in to give temporary service to the government are required to sever all their connections with the companies they serve, it will be very difficult indeed for this government to get help from time to time, or for that matter for the next government, to whichever party it may belong, to get the help it requires if individuals have to terminate their careers in private business for a short period, and then return to them. I think this is an impracticable state of affairs in the world in which we live today where, as I say, it is from time to time necessary for the government to get technical help of one kind or another.
If there were any risk whatsoever that budget secrecy would be destroyed by asking people to come and serve the government for a temporary period, then everyone would agree that it would be better to do without them even if their services would be invaluable. But it never occurred to anybody concerned, least of all, I am sure, to my colleague the Minister of Finance, that there was any risk. The probity of these gentlemen is beyond question. It has not been challenged by the

The Budget-Mr. Sharp Leader of the Opposition (Mr. Diefenbaker) nor by any other hon. member of this house. These men, as I have said, were not brought in to make decisions; they were not brought in for executive responsibility of any kind; they were brought in to advise.


Jay Waldo Monteith: What horrible advice.


Mitchell William Sharp: What, then, could be alleged against them?-that they twisted, or slanted, or influenced the budget because of their normal occupations?


An hon. Member:: Talk about the 11 per cent and 30 per cent taxes for once.


Mitchell William Sharp: I would suggest to hon. members that any suggestion that anyone-


An hon. Member:: Talk about the budget.


Mitchell William Sharp: -twisted, or slanted, or influenced the proposals made by the Minister of Finance is simply making an allegation that is about as unconvincing as any I have ever heard. The record of the Minister of Finance, his personality, his experience, his reputation establish beyond doubt that he is a man who would not be influenced, and particularly would not be influenced in ways which, with his business experience, he would be more alert than anyone to protect if there were any question of special interest at work.
So we are left with one other possibility, that these men leaked budget secrets. This is one charge of substance that could be made in this matter, but it has not been made. The Leader of the Opposition (Mr. Diefenbaker) was challenged to make it today and, as I said before, he flunked.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: If the Leader of the Opposition would like to make the charges now-


An hon. Member:: Don't eat up the clock.


John George Diefenbaker: The tradition is that when an hon. member is making a maiden speech, one does not interrupt.


Mitchell William Sharp: I only say to the Leader of the Opposition that I was interrupted three times before he came in.


John George Diefenbaker: But not by me. The tradition is that we do not do that.


Mitchell William Sharp: I can assure the Leader of the Opposition that if he would like to intervene now and make these charges, I would not be offended in the least.


Some hon. Members:: Hear, hear.


John George Diefenbaker: You have not very much to cheer about over there.


George Clyde Nowlan: Don't kill too much time, boys.


John (Jack) Henry Horner: Set up the committee and then we will prove it.


Mitchell William Sharp: Mr. Speaker, I believe there is another hon. member who wishes to speak on this subject. I am sorry I have taken up so much time on this point. However, may I just conclude my remarks by again repeating the words-


An hon. Member:: Oh, no.


Mr. Bell:: How about repetition?


Mitchell William Sharp: Let me again repeat the words of the first paragraph of the amendment:
This house regrets that the Minister of Finance by failing to maintain the constitutional practice of the essential secrecy of the budget has seriously weakened public confidence.
I say to the house that this is a very serious charge. I am surprised-


John (Jack) Henry Horner: Set up the inquiry, then.


Mitchell William Sharp: -that the hon. member for Digby-Annapolis-Kings should have put his amendment in these words-


George Clyde Nowlan: In such a moderate way.


Mitchell William Sharp: -and may I suggest that if there is any substance in this charge, the charges should be made now.


Some hon. Members:: Hear, hear.


George Clyde Nowlan: Mr. Speaker, on a question of privilege, the minister said a few moments ago that anyone making a charge should make it now. Now he says that I made a charge in this amendment. He said that if a charge was made, the government would set up a committee. According to his words I made a charge; then let the government set up a committee.


Mitchell William Sharp: My concluding words, Mr. Speaker, are these, that all there is in the first paragraph of this amendment is innuendo and insinuation.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I listened with a good deal of interest this afternoon to the Minister of Finance (Mr. Gordon). I must say that I have never listened to a weaker defence. The minister who came in here on June 13 and made one of the most belligerent and partisan budget speeches that I have ever listened to at least appeared today in a much humbler and wiser mood. I think the author of "Troubled Canada" will now be able to write an autobiography called, "A Troubled Canadian".
Mr. Speaker, this is a thoroughly bad budget presented with an unbelievable amount of fumbling, bungling and ineptitude. Let me

deal first of all with the matter of the presentation of the budget itself. The ineptitude is shown up on two counts. First of all there were the three budgeteers from Bay street. At first the minister tried to evade this question, and then some five hours later he came into the house and admitted that they had been brought in as consultants. These men cannot be compared, as the Minister of Trade and Commerce (Mr. Sharp) compared them, with some consultants brought in for consultation for one or two hours. These were men who were hired for several weeks and yet were retained on the payrolls of their respective companies. This arouses the whole question of the conflict of interest. It is not enough for the Minister of Trade and Commerce to stand up and say "Let somebody make a charge". It is not enough that the public interest be protected; it must manifestly be seen to be protected.
This afternoon the Minister of Finance (Mr. Gordon) beat his breast about the innuendoes and insinuations that have been hurled at these innocent victims of political chicanery, but he himself put them in that position by bringing them here and making them privy to the preparation of the budget while they continued to be employed by investment dealers. It is only natural that newspapers and others who have seen strange happenings on the stock exchange should draw conclusions which may not be warranted. But the minister himself has put them in this awkward and embarrassing position. I suggest that when the Prime Minister gets his report from the stock exchanges, as he has promised to do, it will warrant a thorough and complete investigation into the block trading that took place immediately prior to and immediately after the presentation of the budget.
The other ineptitude was shown in the handling of the 30 per cent takeover tax which the minister announced in the house on June 13; then on June 19, less than a week later, he came into the house and said he was withdrawing the tax because of administrative difficulties. Mr. Speaker, was he not aware of these administrative difficulties? Had he not consulted his officials prior to putting this tax into the budget? Had there been no consultation with the Minister of National Revenue (Mr. Garland) and his officials? What was there six days later that made administrative difficulties more apparent than had been six days before? This was the very essence of ineptitude. When the minister was asked on the 19th of this month, last Wednesday, he said no one had been informed about this except the Prime Minister and some members of the cabinet. But on Friday last we found that all three of the budgeteers from Bay
The Budget-Mr. Douglas street had been informed prior to this statement being made in the house. The minister may talk about being misunderstood but to me this was a matter of misleading the house. I suggest that no member can mislead the house without receiving the censure of the house. I want to say that the presentation of this budget is the acid test of the Prime Minister's sense of responsibility to parliament and to the conduct of public affairs in this country, and it will be for him to decide whether or not the minister in question should continue to occupy the portfolio he now holds.
The outrageous manner in which the budget was presented, Mr. Speaker, should not be allowed to obscure the fact that the budget itself is a dismal failure in the light of the economic problems that confront this country and the state of the Canadian economy. There are four things about the budget that I would criticize. First of all, it is not an expansionary-budget. It is a regressive and schizophrenic budget. It does nothing effectively to regain control of the Canadian economy and it does nothing about increasing Canada's export trade. I doubt that in the time at my disposal I can deal with all four points but I will deal with as many as I can.
First of all, I say this it not an expansionary budget. The crying need of this country is to remove unemployment by promoting a higher rate of economic growth. This will not be done by this budget. In the first place, it will not be done by allowing business corporations to keep a larger share of their profits as an incentive to investment. From 1957 to 1961 real investment declined by 11 per cent and in the same period of time business savings increased by 4 per cent.
Nor will we cure unemployment and promote economic growth by providing larger profits to business as an incentive to investment. During the period 1955 to 1957 inclusive the corporate tax burden was greater per dollar of profit than it has been since 1957. Yet this was the period of our greatest investment boom. Why? Not because profits were greater-they were less-but because there was anticipation of an increased effective demand. That effective demand did not materialize but the fact is that this was the incentive, and the need in our economy today is to increase effective demand so that a larger portion of our population in Canada can buy the goods and services that our economy is capable of producing in this technological age.
There are two ways in which we can increase this effective demand. The first is by injecting massive doses of social capital into our economy in order to put the unemployed to work and to increase productivity. We should use the Bank of Canada and we should

The Budget-Mr. Douglas be prepared to accept the need for extensive deficits and deficit financing. The Minister of Finance (Mr. Gordon) said this afternoon that he had only three alternatives. He said he had to increase income and corporation taxes or he had to increase the general sales tax or he had to impose a sales tax on building materials and production machinery. He said that these were the three alternatives if you accept the premise that we must move toward a balanced budget.
There we have the kernel of the whole matter. We in this group do not accept this premise. As a matter of fact, when I listened to the minister delivering his budget speech I thought he had found an old budget speech of Mr. Fleming's lying in the office and had simply dusted it off and brought it before the house.


Some hon. Members:: Oh, oh.


An hon. Member:: Never.


Thomas Clement (Tommy) Douglas: Someone has said that the more things change the more they are the same. This country need not be afraid of deficit financing. As my colleague, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) pointed out, Sweden, which has full employment and a higher standard of income per capita than Canada, has a deficit of nearly 3 per cent of its gross national product, twice that of Canada. We in this country could double our deficit financing without being in serious difficulty. We would not lose by it. In the long run increased productivity, what we would save by putting the unemployed to work and increased economic activity would bring the government back a great many economic returns both in tax revenue and in other ways.
But the government has done just the opposite. Instead of seeking to stimulate the economy it has applied an 11 per cent sales tax on building materials and production machinery and this will have the effect inevitably of slowing down construction. This is going to have the effect of throwing people out of work. This is going to stop some of the building programs that were being planned. This is why I say this is a schizophrenic budget. We have set in motion two great forces going in opposite directions, the one cancelling out the other. On the other hand we say we have got a budget that is going to promote full employment and on the other hand we impose taxes that will produce unemployment and stop economic growth and development.
The municipal development and loan fund will help, of course, but social capital cannot be supplied only by the municipalities.

What about the provincial governments, and the federal government carrying their share of supplying social capital? There is nothing in this budget that will do that. The minister knows better. The minister began his speech by making a good Keynesian case for deficit financing and then, having made his proper genuflections to the Mecca of Keynesian economics, he took off across the arid sands of orthodox financing that lead to the land of unemployment and economic stagnation.
The other thing that needs to be done to increase effective demand is to put purchasing power into the pockets of that section of our economy which is unable to buy the goods and services which this country has to sell. We do this by putting unemployed people to work at decent wages. We do this by increasing the old age pension and lowering the age to 65 years. You do it by increasing family allowances and veterans pensions. You do it by lowering the income tax on the lower and middle income groups and you do it by lowering sales taxes, not increasing them, so as to lower the cost of living, thereby increasing the purchasing power of great sections of our population.
I want to say, Mr. Speaker, that there is nothing in this budget designed to promote full employment. There is nothing in this budget that will help promote economic growth. This budget is a regressive budget. At the present time federal taxes are divided roughly into 60 per cent direct taxes and 40 per cent indirect taxes. When the provinces and municipalities are included, the average Canadian pays about half his taxes indirectly and half his taxes directly. There is no more vicious or regressive tax than an indirect tax. The minister took the one place to find the money he thought he needed, not in the field of direct taxes, not by a capital gains tax, not by taxing those who have more than they need, but by placing an additional $700 on the cost of a small house. This means that a man purchasing that house under N.H.A. and paying 6i per cent over 25 years will have $1,377 added to the cost of purchasing that house. This is why we say this is a regressive tax, placing a burden upon those who are least able to bear it. It is for this reason, Mr. Speaker, we in this group cannot support this budget, nor will we be associated with the cloud of suspicion that has surrounded its presentation.
On the other hand, on March 27 last on a national television program, I made a commitment to the people of this country that if a minority government were elected in Canada we would give that minority government,

whichever party formed it, a reasonable period of time in which to carry out its program for economic recovery. This government has not yet had a reasonable period of time. They have not yet made much use of the time they have had. However, we believe they are entitled to a reasonable period of time. Therefore we find ourselves in a dilemma. We are not prepared to vote confidence in this budget or in the manner of its presentation. On the other hand, the amendment moved by the hon. member for Digby-Annapolis-Kings (Mr. Nowlan) is not only a statement of opinion, with which opinion we largely agree, but written into that amendment is the provision that the government should be turned out and that a general election should be held.
We do not believe the people of this country want an election. This would be the third general election in 15 months. We believe that the people of this country want this parliament to get on with the job of governing Canada. For that reason, we of the New Democratic party, will abstain from voting on this amendment.


Some hon. Members:: Shame, shame.


Thomas Clement (Tommy) Douglas: By abstaining from voting we are saying to the government that we are prepared to see you stay in office in the hope that you will do something to implement the promises you made to the people of Canada. But by abstaining, we are also stating that we have no confidence in this budget, that we will not be associated with this dismal budget and the disastrous consequences which we believe will flow from its implementation.


Mr. Speaker:: Order; it being nine forty-five o'clock, it is my duty, pursuant to section 5 of standing order 58, to interrupt these proceedings forthwith and put the question on any amendment now before the house.


John George Diefenbaker: After the vote has been taken I wish to rise on a point of order before determination and tabulation takes place.
On a point of order, not because it will affect the result at all, but with a view to preventing a precedent being established here, I wish to draw your attention, Mr. Speaker, to the fact that no member in the house, in his seat in the house, can refrain from declaring his vote. That has been an accepted principle throughout the years. I refer to Bourinot's Parliamentary Procedure at page 381 where it is stated:
If a member of the Commons who has heard the question put does not vote, and the attention of the Speaker is directed to the fact, the latter will call upon him to declare on which side he votes; and his name will be recorded accordingly.
The only exception is where there is a motion not properly before the house. I direct your attention to Hansard 1956, volume 5 at pages 4553 and 4554 when the Conservative party, at that time in opposition, did not vote on a course of action submitted by Mr. Speaker. During the taking of the vote, Mr. Speaker said:
Those who are opposed will please rise.
Hon. Mr. Drew said:
We are not voting because there is no question properly before the house.
When a question is properly before the house it is requisite that members shall vote if they are in the house. That goes back to May 12, 1879, and it has never been departed from since. At that time a certain hon. gentleman, a Mr. LaRue, voted although he had been paired. Sir John Macdonald said that it rested with the hon. member to say whether his vote should remain on the record or not. If he chose to have his name recorded it was for him to say so. Then these significant words:
Every member in the house, if called upon was compelled to vote, and, even if a gentleman got up and stated that he had paired the house could compel him to vote, because, if he had paired, he must leave the house before the vote was taken.
That was the general principle. I raise this point at this time not because it will in any way alter the result of this vote, but a precedent of this kind is detrimental to the proper processes of parliamentary procedure, if members sitting in the house in their places say that they will not vote on a measure before the house.


Lester Bowles Pearson: Mr. Speaker, in the first place I think it would be helpful if you would rule on the

right of the right hon. Leader of the Opposition (Mr. Diefenbaker) to raise a point of order before the vote has been announced and during the taking of the vote. Apart from that matter, the point which the hon. gentleman now makes with such emphasis apparently did not occur to him when he was prime minister and leader of the house when, in a vote in the last session of parliament the hon. member for Halifax, one of the former prime minister's followers, abstained from voting and that abstention was not mentioned or noted by the right hon. gentleman.


Harold Edward Winch: Mr. Speaker, on a point of order-


Mr. Speaker:: I am sorry, it is after ten o'clock.


Harold Edward Winch: -the result of a vote must be announced before any hon. member can say he was paired. Therefore no question can be raised till the vote is announced and the pairs are also announced.


Mr. Speaker:: In order to unravel this little tangle I should like to have the vote announced, and I am prepared to give a ruling right afterwards. I am not sure it will please everyone but at least it will be a ruling.
And the result of the vote having been announced: Yeas, 73; nays, 113:


Mr. Speaker:: I declare the amendment lost.


Mr. Mackasey:: I was paired with the hon. member for Bow River (Mr. Woolliams). Had I not been paired I would have voted against the amendment.


Mr. Cardiff:: I was paired with the hon. member for Algoma West (Mr. Nixon). Had I voted I would have voted for the amendment.


Mr. Roxburgh:: I was paired with the hon. member for Regina City (Mr. More). If I had voted I would have voted against the amendment.


Roger-Joseph Teillet: I was paired with the hon. member for Portage-Neepawa (Mr. Enns). Had I voted I would have voted against the amendment.


Hubert Badanai: I was paired with the hon. member for Victoria-Carleton (Mr. Flemming). Had I voted I would have voted against the amendment.


Mr. Brown:: I was paired with the hon. member for Simcoe East (Mr. Rynard). Had I voted I would have voted against the amendment.

Division


Mr. Blouin:: I was paired with the hon. member for Waterloo North (Mr. Weichel). Had I voted I would have voted against the amendment.
(Translation):


Mr. Jean-Pierre Cole (Longueuil):: Mr. Speaker, I was paired with the hon. member for Waterloo North. Had I voted, I would have voted against the motion.


Mr. Clement Vincent (Nicolet-Yamaska):: Mr. Speaker, I was paired with the hon. member for Riviere du Loup-Temiscouata. Had I voted, I would have voted for the amendment.
(Text):


Mr. MacEwan:: I was paired with the hon. member for Shelburne-Yarmouth-Clare (Mr. Armstrong). Had I voted I would have voted for the amendment.


Mr. Speaker:: I might say immediately that when the Leader of the Opposition (Mr. Dief-enbaker) raises these interesting matters I am always impressed at first with the experience of the right hon. gentleman and his knowledge. However, he referred to Bourinot and the citation to which he referred involved an incident many years ago. Sir Erskine May's Parliamentary Practice, sixteenth edition, page 434, refers to the British house of commons and says:
Practice in the House of Commons-A similar rule formerly obtained in the House of Commons, but in session 1906, in connection with the changes made in taking divisions which have been already mentioned, the house agreed to a new standing order-now S.O. No. 33-which provided that a member might vote in a division although he had
not heard the question put, and that a member was not obliged to vote although he was in the house when the question was put.
Then dealing with a very similar situation, Mr. Glen, as reported in the debates of the House of Commons for September 28, 1945, page 542, said:
Mr. Speaker, this question has always been somewhat confused in this House of Commons. The hon. member for Cariboo (Mr. Irvine) spoke of an incident which occurred at a time when he was a member of the house. He has pointed out that on that occasion the matter was brought to the attention of the house and that the hon. member in question was requested to record his vote.
This is the important part.
A year ago when we were dealing with a revision of the rules this matter was considered carefully by hon. members of the committee. At that time they did not think they should make a recommendation to the house in this connection. The position I always took when I occupied the Speaker's chair was that an hon. member who was in the house should record his vote; but if he did not do so the Chair had no power to compel him to do so.
So in accordance with previous precedents I must regretfully reject the suggestion.


Mr. Nugent:: Mr. Speaker, on a point of order, no member had recorded a vote to the house-


Mr. Speaker:: I am sorry, I am in the happy position of not allowing any debate on my ruling.
On motion of Mr. Nasserden the debate was adjourned.


[Stage Direction]
It being twenty two minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, June 25, 1963