1965-05-04

PRESENCE IN GALLERY OF CANADIAN MOTHER OF THE YEAR

Mr. Lawrence Watson (Assiniboia):: Mr. Speaker, I rise on a point of privilege. I should like to draw the attention of hon. Members to the fact that we are honoured today in having in the Speaker's Gallery the Canadian Mother of the Year, Mrs. Henriette Van Der Breggen of Weyburn, Saskatchewan. Mrs. Van Der Breggen was a native of Den Helder, Holland. She is the mother of seven children, two of whom have been adopted since they became Canadian citizens in September, 1964.



BUSINESS OF THE HOUSE


Hon. G. J. Mcllrailh (President of the Privy Council):: Mr. Speaker, as requested yesterday I propose to make a very short announcement of the business of the House following the conclusion of the budget debate. We propose, on completion of the budget debate, on Thursday to call the resolution preceding the decennial revision of the Bank Act. It has been the practice in the past, I am told, that the legislation respecting amendment of the Quebec Savings Bank Act goes along with that, since the legislation does not differ as between the different institutions.
When that is completed, on Friday we propose to call the Senate reform legislation and on Monday to call a supply motion. When the supply motion is called on Monday we will ask the House to consider having ten departments entered rather than the usual six. This, of course, would in no way prejudice the full rights respecting the remaining five supply motions or the length of time used. The purpose is merely to have the departments entered with a view, if it can be worked out, to having the estimates referred to committees for detailed examination.



VETERANS AFFAIRS


Hon. Roger Teillel (Minister of Veterans Affairs):: I should like to table a report received from the Army Benevolent Fund, in English and in French.


Mr. F. J. Bigg (Athabasca):: Since I presume the statement being tabled is in reply to a question I asked two months ago, I wonder if the Minister could tell us whether this reinstatement may be taken as an indication that this valuable public servant has been completely exonerated of the suspicions thrown upon his character and his value to this nation.


Roger-Joseph Teillet: I think the report speaks for itself.


Frederick Johnstone (Jack) Bigg: In connection with my request, I should like the consent of the House to have this statement published in Hansard.


Mr. Speaker:: Does the House give consent?


Some hon. Members:: Agreed.
[Editor's note: Text of report referred to above is as follows:]
Army Benevolent Fund
Serious allegations were recently made by a number of individuals concerning the operations of the Army Benevolent Fund. After due consideration, the Army Benevolent Fund Board decided that each allegation should be carefully examined. Since the Office of the Auditor General was currently engaged on a mid-year, or interim, audit of the Fund's records, the Board asked the Auditor General to enlarge the scope of his interim test checks to include an enquiry into the allegations.
In order to facilitate this, the Board decided on February 22, 1965 to relieve the National Secretary of his duties (without loss of emolument) and to appoint an acting office manager for the period of one month required for the enquiry. Arrangements satisfactory to both parties were made during this time for the disposition of the National Secretary's personal effects and mail.
At a meeting of the Board held in Montreal on March 26, 1965, an interim report (pending completion of the audit of the Fund's operations for the full fiscal year which ended March 31, 1965) from the Office of the Auditor General was received and examined. Since this interim report did not disclose any financial irregularities during the period

May 4, 1965
Inquiries of the Ministry under review, the National Secretary, who was present at the meeting, was advised by the Board that he was reinstated effective March 26, 1965.
J. GUY GAUVREAU National Chairman
Montreal, April 29, 1965



ADMINISTRATION OF JUSTICE


Hon. Guy Favreau (Minister of Justice):: have pleasure in announcing the names of the members of the Special Committee on Corrections which was forecast some time ago and mentioned in the Speech from the Throne. The composition of the Committee is as follows: Chairman, Hon. Mr. Justice Roger Ouimet, of the Superior Court of the Province of Quebec, District of Montreal; Vice Chairman, Mr. G. Arthur Martin, Q.C., Toronto. The two other members are Mrs. Dorthey McArton, B.A., of Winnipeg and Mr. W T McGrath, B.A., M.S.W., of Ottawa.
Mr. Justice Ouimet has long taken a keen interest in the field of corrections. Mr. Martin is a very well known defence lawyer. Mrs. McArton is the executive director of the Family Bureau of Greater Winnipeg and a graduate in social work. Mr. McGrath, also a graduate in social work, is the executive secretary of the Canadian Corrections Association, a division of the Canadian Welfare Council.
A panel of consultants from the professions and disciplines concerned with corrections is being drawn up, upon whom the committee may call for advice relating to such matters as after care, criminology, custodial institutions, courts, law, parole, police probation, psychiatry, psychology, social work and sociology. It has been decided, however, not to announce the names of this panel or of the members of the secretariat until after consultation with at least the chairman of the committee.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I would ask the Prime Minister to give the House a statement regarding the meeting-I presume the proper expression under the circumstances would be "summit conference"-between himself and the Premier of Quebec. Is it correct, as was stated in the press, that arrangements were

consummated at this meeting and has there been acceptance by the Government of the principle enunciated by Premier Lesage when he stated in reference to the agreement signed February 27 between Quebec and the French government, that a precedent had been set and the Canadian Government did not interfere in any matter concerning this document? Would the Prime Minister be in a position to let the House know the facts?


Right Hon. L. B. Pearson (Prime Minister):: Yes, Mr. Speaker. I had the pleasure of meeting with Mr. Lesage and Mr. Gerin-Lajoie last evening and we discussed quite a number of matters of mutual interest including-I mention this because I had mentioned it in the House previously-treaty arrangements within our constitution. There were no decisions reached, Mr. Speaker, and no arrangements in any of these matters consummated, as the press report indicates. The discussions are to be continued within a few days, I hope.


John George Diefenbaker: If no arrangements were consummated would the Prime Minister be able to say whether he made it clear to the Premier and Mr. Gerin-Lajoie that only the Federal Government can enter into treaties, ententes, agreements or whatever the expression may be, that in any way concern foreign governments?


Lester Bowles Pearson: Mr. Speaker, the Federal position in this matter has already been made clear to Mr. Lesage and Mr. Gerin-Lajoie through the statement made by the Secretary of State for External Affairs some days ago; and in the discussions last night, which were very friendly indeed, we did not depart from that position.


John George Diefenbaker: Well, Mr. Speaker, I was quite surprised that it should have been the foreign affairs minister who made the statement respecting this matter unless in fact there was some recognition of the status of both the federal and provincial governments being in that category. But I ask the Prime Minister this categorical question. Did he make clear to those with whom he met that all agreements, treaties, ententes or accords that are made with foreign countries can only be made by the federal authorities and no one else?


Lester Bowles Pearson: Mr. Speaker, it is perfectly clear and has been made clear to all those interested, including our visitors last night, that no agreement that has international
May 4, 1965	COMMONS
standing or is accepted in international law can be made except by Canada.


John George Diefenbaker: And was it made clear that that applies to education and other matters that fall within the jurisdiction of the provinces?


Lester Bowles Pearson: Mr. Speaker, I have just stated what was made clear.


Some hon. Members:: Hear, hear.


John George Diefenbaker: That is the second retreat.
[DOT] (2:50 p.m.)


Hon. Paul Martineau (Pontiac-Temisca-mingue):: A supplementary question to the Prime Minister. Could he tell us whether among the questions of mutual interest which were discussed the question of an early Federal election was one?


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: May I ask the Prime Minister whether he has received any information from the Government of the United States as to its intentions, purposes and objectives in the Dominican Republic? Will he also tell us whether any representations have been made by the Canadian Government to the United States to the effect that the people of the Dominican Republic should be given some voice in the selection of whatever individual is to become president there after the United States troops have been withdrawn? May I ask him also whether representations have been made that ex-President Bosch, who was democratically elected in the republic, should be given an opportunity to be chosen by the people of that area to serve again in his former post if they so desire?


Lester Bowles Pearson: We have made no representations to the United States with respect to the position of ex-President Bosch in this matter, or what should be his position in developments as they occur within the Dominican Republic. Naturally-and I do not think it is necessary for us to tell the United States Government this-we hope that any political arrangements which are made for the restoration of peace and security to the island will be made by and for the people of the Dominican Republic.
We are attempting, naturally, to get all the information we can in regard to this situation, but I have very little to add to what I
DEBATES	887
Inquiries of the Ministry said yesterday, though additional information and reports have reached us since then. As I emphasized yesterday, these are not conclusive concerning the degree of communist involvement in the fighting in Santo Domingo. However, a number of communists are involved with the insurgents to the best of our information and some have received guerrilla training in communist countries including, I have no doubt, Cuba.
At the same time I should like to make it very clear that we do not at the present time have information which would enable us to arrive at a definite conclusion concerning the direct involvement of communist countries in the Dominican Republic rebellion. However, we are in close consultation through diplomatic channels with all sources of information available to us, including our own embassy there, concerning developments in the Dominican Republic and are striving to get as complete an account as possible.


Thomas Clement (Tommy) Douglas: I am sure the House welcomes the statement by the Prime Minister that we all desire the people of the Dominican Republic to have some voice in deciding on whatever Government is to take over. May I ask the right hon. gentleman whether any representations will be made by the Government of Canada to the United States to make absolutely sure that the people of this island do not again have foisted upon them a military dictatorship such as deposed President Bosch a short time ago?


Lester Bowles Pearson: I can only express a hope that this will be the result of the present unhappy developments in the Dominican Republic. If this should be the outcome then perhaps something of advantage will have resulted to the people of that country.


Mr. R. N. Thompson (Red Deer):: I have a related question for the Minister of National Defence. Can the Minister inform us whether reports are true that a Canadian warship has been posted to the Caribbean area? If so, why has it been sent to those waters?


Hon. Paul Hellyer (Minister of National Defence):: There was one in the area and it has been ordered to stand by in case it is required.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. George C. Nowlan (Digby-Annapolis-Kings):: I wonder whether I may direct a
888	COMMONS
Inquiries of the Ministry question to the Minister of Finance, notice of which has not been given to him; he may have anticipated it, however, from a news story which appeared in the Globe and Mail this morning. If not, I am sure he will take this as notice and reply to my question later.
I should like to ask what progress is being made with respect to the renegotiation of the tax treaty between Canada and the United Kingdom. Would the hon. gentleman also comment on a statement made yesterday in Toronto that in the budget brought down in London the withholding tax is to be 42J per cent in respect of Canadian corporations which are not protected by the tax treaty?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, the bill that was brought down following the British budget was only made public recently, within the last week or so. It is being studied. I do not think I can give a specific answer to my hon. friend, and I think it would be unwise of me to comment upon the newspaper reports to which he referred.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I should like to direct my question to the Minister of Justice. I was informed a few minutes ago that, unfortunately, an officer of the R.C.M.P. was wounded at Cowansville, or near Cowansville, in the province of Quebec. Could the minister inform the house on that matter?


Guy Favreau: Mr. Speaker, I wish to thank the hon. member for giving me notice of his question as soon as he could.
That report reached me only a short time ago. I am informed that on Saturday, May 1, two citizens having found a container near Noyan, handed it over to the authorities of the Quebec provincial police. An instrument of the grenade type and involving detonators was found in the container. On Monday the Quebec provincial police, in turn, informed the local division of the R.C.M.P. about that discovery. Corporal Poirier, a member of the local division of the R.C.M.P., examined the container and during his investigation one of the detonators exploded and he was superficially wounded. He was hospitalized for a short period.

DEBATES	May 4, 1965
The circumstances surrounding that discovery are being investigated.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Industry. Is the Government taking any steps to alleviate the apparent acute steel shortage in Canada? It is my understanding in this regard that the shortage at Stelco and other large steel companies is such that steel has to be rationed to the producers of secondary steel products in Canada.


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I think most members of the House will be aware that as a consequence of the threatened steel strike in the United States there has been, both in the United States and Canada, some anticipatory stockpiling. It is hoped that as a result of the tentative settlement of this strike, or at least its deferment, this stockpiling and consequent pressure upon steel supplies will be eased.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker, I should like to ask the Minister of Transport whether he has received the wage bill from the two major railways, in regard to the fact that their freight rate structure is frozen. If he has received it, I would ask what the Government's plans are to do something about seeing that payment is made.


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, the Prime Minister did receive a communication some little time ago -I think there was some reference to it in the newspapers-from the Presidents of the two railways, and the matter is under active consideration at the present time.


Douglas Mason Fisher: Is the Government in a position, for example, to table any of the projections that have been given in terms of the size of the labour force and the wage costs, in view of the fact that we expect the railway legislation this session?


John Whitney Pickersgill: I think probably it would be better for the Government to reach some
May 4, 1965

determination about this matter on its own part before communicating anything to the House.
[DOT] (3:00 p.m.)



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. D. W. Groos (Victoria (B.C.)):: Mr. Speaker, I have a question for the Minister of Finance. Is the Minister, as guardian of the public purse, consulting with the Minister of Trade and Commerce, who is responsible for arrangements for the 1967 World's Fair, to provide a suitable reward for the public spirited person who blew out the $15,000 gas flame at the World's Fair in Montreal and lighted that 20 cent candle?


Mr. Speaker:: I recognize the hon. Member for Royal.


Mr. Fairweather:: I have thought better of it, Mr. Speaker.


Some hon. Members:: Oh, oh.



HARBOURS


[Stage Direction]
On the orders of the day:
Hon. Leon Balcer (Three Rivers):: Mr. Speaker, I should like to put a question to the Minister of Transport.
Could he tell the house whether his department is considering the advisability of building breakwaters on Lake Saint Peter so as to maintain the water at a reasonable level in Montreal harbour?


John Whitney Pickersgill: Mr. Speaker, the hon. gentleman was good enough to give me notice of three questions. The restraint shown by the hon. Member for Royal created so much commotion in the House I was not able to determine which of the three questions the hon. Member for Three Rivers was asking. They all relate to the St. Lawrence below Montreal, and particularly to Lake Saint Peter. I may indicate that the whole matter is under study and I will endeavour to make a statement to the House at the earliest opportunity.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to
Inquiries of the Ministry direct a question to the Minister of Justice, asking him whether, with the passage of some two months, he is now in a position to say that the bankruptcy file in respect of the Sefkind brothers, Max and Adolph, who engaged in benevolent furniture transactions, will be made available to the House by tabling them, so we can make an examination of the unique circumstances under which they operated.


Guy Favreau: Mr. Speaker, I have already answered quite clearly, I hope, a question asked by the hon. Member for Yukon (Mr. Nielsen) in respect of this subject. I must stand by that answer.


John George Diefenbaker: Mr. Speaker, I find it difficult sometimes to understand the Minister of Justice. I am asking him now whether he will produce this document so we may examine it and ascertain the beneficent circumstances under which furniture was furnished to two persons who are now members of the Cabinet. Will that document be produced?


Guy Favreau: Mr. Speaker, I am very sorry if the right hon. gentleman sometimes finds it difficult to understand me, but I did answer that question quite clearly, it seems to me and to other Members.


John George Diefenbaker: Mr. Speaker, I should like to ask the Minister now whether the words "yes" and "no" are not in the Minister's vocabulary. Will this document be produced, or will it be hidden in the way the Minister has hidden other things?


Guy Favreau: Mr. Speaker, I shall not accept the implication or insinuation that because the law does not allow me to produce a document, I am placed in the position of trying to hide something.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I should like to ask a supplementary question. The Minister has not yet answered a question I directed to him several weeks ago as to whether charges were being considered or had been laid as a result of the report of the trustee to the superintendent. If the document is not to be tabled, will the Minister tell us whether charges have been laid or considered, particularly in view of the fact that the Government of Quebec has not got this or associated companies under investigation?


Guy Favreau: Mr. Speaker, I do remember having an answer prepared to the question asked by the hon. gentleman for Yukon, but because of the fact that he has not been in this House for the last week or so, I did not
May 4, 1965

Inquiries of the Ministry r provide the answer. I will, however, provide that answer.


Mr. Remi Paul (Berihier-Maskinonge-Dela-naudiere):: Mr. Speaker, I wish to ask the Minister of Justice a supplementary question.
Could he table at the same time the whole file on the bankruptcy of the McFarlane Construction Company, in Ottawa?


Guy Favreau: Mr. Speaker, I will be happy to consider the matter.


Mr. Frank Howard (Skeena):: Mr. Speaker, I should also like to direct a question to the Minister of Justice, asking him whether one Andre Durocher has recently joined the staff of his Department.


Guy Favreau: I will look into that situation, Mr. Speaker.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, being an old labouring man myself, I should like to address a question to the Minister of Labour arising out of the picketing on Parliament Hill yesterday by some Members of the S.I.U. who expressed themselves as being very dissatisfied with the action of the trustees, indicating that the S.I.U. was worse now under the trustees than it was under the jurisdiction of Mr. Banks. Did they make representations to the Minister in respect of their complaints and, if not, will that representation of the S.I.U. have an opportunity of appearing before the Industrial Relations Committee to express their dissatisfaction?


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, the gentlemen in question did see me briefly yesterday, at which time they did promise to follow up their verbal representations by a written document, which I in turn promised to receive and consider.


Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I have a supplementary question. I should like to ask the Minister whether Mr. Justice Dryer will be brought back to the committee, in view of the fact that he refused to give evidence but went back to British Columbia in a huff after stating he would not give evidence before the committee?



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to address a question to the Minister of Agriculture. Can the Minister inform the House whether all the new classifications and categories for livestock shows have been determined? Perhaps the Minister could also indicate the extent to which these will be applicable during the ensuing season, and whether the exhibition boards that will be affected have been notified.


Hon. Harry W. Hays (Minister of Agriculture):: Mr. Speaker, in respect of the new classifications, in so far as beef and dairy animals are concerned, I have been advised by most exhibitions in the Prairie Provinces that they will accept the new classifications. I understand that about 80 per cent of the classifications will be accepted in Vancouver. It is also my understanding that the Royal Winter Fair, the Western Fair at London, the Ottawa Winter Fair and some exhibitions in the Maritimes, will accept the new classifications. I might add that the new pilot classification approach in respect of sheep and swine has been accepted by all the Prairie shows. I have not yet heard from the remainder.


Horace Andrew (Bud) Olson: I have a supplementary question. In respect of those exhibitions or fairs that do not accept the new classifications, will the Federal Government provide prize money on the basis of the old classifications?


Harry William Hays: Yes, Mr. Speaker.



REQUEST FOR INCREASE IN BILINGUAL STAFF OF DEPARTMENT

[Stage Direction]
On the orders of the day:
Mr. Auguste Choquetie (Loibiniere):: I
should like to address my question to the Minister of Agriculture. I should like to ask him if he is aware of the fact that the bilingual staff in his department is not sufficient, and has he any intention of increasing that staff?


Harry William Hays: I will look into this question.



TAKING OF BLOOD SAMPLES FROM ONTARIO DAIRY FARMS

[Stage Direction]
On the orders of the day:
['No, Mr. Speaker. When the invitations to the conference were sent and the date of May 31 was suggested, the Premier of British Columbia indicated to me that unfortunately he would be in Japan on that date but if all the other heads of provincial governments found that date satisfactory, naturally he would not wish to urge another date and would send a member of his cabinet to represent him at the conference.']
Mr. R. A. Webb (Hastings-Frontenac):: should like to direct my question to the

May 4, 1965

Right Hon. Prime Minister. In view of the serious implications contained in the answer given by the Minister of Agriculture yesterday, implying that dairy farmers might have some unmentionable contagious disease, could the Prime Minister check with the Department of Health to make clear to the public that there is no danger?


Lester Bowles Pearson: Not only will I check with the Department of Health, but I will check with the Minister of Agriculture.


John George Diefenbaker: He did not know what the disease was.



[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I should like to direct a question to the Minister of Justice. Inasmuch as article 3 of the treaty between the United States and Great Britain relating to boundary waters of the Great Lakes states that the provisions of the treaty "are not intended to limit or interfere with the existing rights of the Government of the United States and the Government of the Dominion of Canada on Governmental works in boundary waters, provided that such works are wholly on its side of the line and do not materially affect the level of the boundary waters", can the Minister of Justice define the word "materially", or will he ask the Supreme Court of Canada for a definition of this phrase?
[DOT] (3:10 p.m.)


Mr. Speaker:: Order, please. I have grave doubts whether this question is in order, but in any event perhaps the hon. Member will put it on the order paper.


Ralph Bronson Cowan: Ten o'clock, Mr. Speaker.


[Stage Direction]
On the orders of the day:
Mr. C. S. Smallwood (Bailie River-Camrose):: Mr. Speaker, I have a question for the Acting Secretary of State for External Affairs. I would like to ask him whether Mrs. Lucien Rivard has been granted her passport.


Charles Mills (Bud) Drury: I will find out and provide an answer tomorrow.
t Inquiries of the Ministry


Clifford Silas Smallwood: And at the same time would you check on what date she applied for this passport?


Eldon Mattison Woolliams: wish to ask a supplementary question of the Minister of Justice. It is several weeks since Rivard escaped, and I would like to ask him whether he has anything to report to the House on the escape of Rivard in order to bring the House and the country up to date.


Guy Favreau: The investigation is being continued, Mr. Speaker.


[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I should like to direct a question to the Prime Minister. Has the Prime Minister received notification from the Premier of the Province of British Columbia that he refuses to attend the Dominion-Provincial Conference on May 31 because of possible discrimination against his Province?


Lester Bowles Pearson: No, Mr. Speaker. When the invitations to the conference were sent and the date of May 31 was suggested, the Premier of British Columbia indicated to me that unfortunately he would be in Japan on that date but if all the other heads of provincial governments found that date satisfactory, naturally he would not wish to urge another date and would send a member of his cabinet to represent him at the conference.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, on Thursday last I directed a question to the Prime Minister in relation to the new policy which has been announced with regard to the construction of homes on Indian reservations. At that time I asked the Prime Minister if he could say why the decision was made to try this out in Saskatchewan and whether it had been initiated by the Province or by the Indian Affairs Branch. The Prime Minister replied as follows:
Well, Mr. Speaker, I cannot answer that question, but I will talk to the Minister about it and perhaps he can answer tomorrow.
May 4, 1965

Inquiries of the Ministry
As this is the fifth tomorrow, can the Prime Minister say whether he has had a chance to discuss this matter with the appropriate Minister?


Lester Bowles Pearson: Mr. Speaker, perhaps the Minister of Citizenship and Immigration will be able to answer the question as to the initiation of the housing project in Saskatchewan.


Hon. J. R. Nicholson (Minister of Citizenship and Immigration):: Mr. Speaker, we have had discussions with the Provincial Government of Saskatchewan with regard to two types of houses, some to be built in or near the two potash communities located in that province, and houses for the Indians and Metis in the northern part of the province. The negotiations are still under way and I believe they are progressing satisfactorily. I was speaking to Premier Thatcher yesterday and a further meeting with C.M.H.C. officials will be held within the next few days.


Robert Simpson: A supplementary question, Mr. Speaker. I was inquiring the other day with regard to whether this same policy would be available in each and every province, and just how this new housing policy differs from the present policy applicable in respect of homes on Indian reservations. I did not receive an answer.


John Robert (Jack) Nicholson: Mr. Speaker, I thought the Prime Minister had answered that question the other day. The Prime Minister made it clear that the program for northern Saskatchewan is an experimental one. We have been working on it with the province for some months. If it is successful we hope it will be extended, and it probably will be, to other provinces of Canada.


Frank Howard: A supplementary question, Mr. Speaker. In the course of working out this experimental plan were any of the Indian people consulted?


John Robert (Jack) Nicholson: Mr. Speaker, I would not want to answer that from memory but I will be glad to look into the matter. However, it is my recollection that officials of the Department of Welfare of the Province of Saskatchewan did discuss the matter with the Indians and with others interested.


Frank Howard: The Minister will check into it?


John Robert (Jack) Nicholson: Yes.



PUBLIC UTILITIES


[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I want to ask the Minister of Transport a question. What action will the Government take in regard to the proposal contained in a resolution passed by the council of the Township of Thorold and endorsed by the Council of the City of Toronto for the appointment of what they describe as a "public utility ombudsman", whose duty it would be to represent the public at hearings involving rates or policies of the Bell Telephone Company or other public utilities under Federal jurisdiction?


John Whitney Pickersgill: Mr. Speaker, I think the Government will start by reading the resolution.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to address a question to the Minister of Industry. The Vice President of Chrysler of the United States, when speaking before the Ways and Means Committee of Congress recently, stated that many manufacturing companies would suffer because of the Canada-United States automobile treaty. He stated that most of the companies that would suffer would be on the Canadian rather than on the American side of the border. When may we expect some form of legislation that will be helpful to these manufacturers, the type of legislation incorporated in the United States bill now before Congress?


Charles Mills (Bud) Drury: Mr. Speaker, the Government is keeping in close touch with developments on the Canadian side of the industry as well as the American, and as soon as the necessity for legislation of the kind inquired about by the hon. Member becomes apparent I think we will be in a position to introduce it.


Alfred Dryden Hales: A supplementary question, Mr. Speaker. I think it is the Canadian manufacturers with whom the Minister should be keeping in close touch. On many occasions we have sought an answer, once from the Prime Minister, as to why Canadian made Ford cars are being sold in Buffalo at United States
May 4, 1965

prices whereas Canadian consumers have to pay much higher prices. We want to know the reason.


Charles Mills (Bud) Drury: I do not think there is much I can add to the answer given by the Prime Minister. Ford cars manufactured in Canada were sold in Buffalo by the Ford Company of the United States. What their reasons were for selling them at that particular price we do not know. What price Ford of the United States paid Ford of Canada for these cars is likewise within the company itself.


Alfred Dryden Hales: A supplementary question, Mr. Speaker. In view of the fact that the Canadian Government has contributed $50 million to the car manufacturers, does the Minister not feel that the Canadian people are entitled to the same deal?


Charles Mills (Bud) Drury: Mr. Speaker, assurances have been given to the House that as soon as the current plan becomes effective and significant reductions in the cost of manufacturing cars in Canada can be achieved, it is anticipated that the price of cars in Canada will go down. In the meantime, if Canadian manufacturers are to export it is quite clear that in selling abroad they must meet local prices. Otherwise they will not be able to sell.


Mr. H. W. Danforih (Kent, Onf.):: Is it the
opinion of the Minister of Industry, Mr. Speaker, that the necessary legislation will be passed and implemented by the United States so the duty will be removed on car parts entering the United States early enough that it will not be a factor in Canadian tenders for United States orders on 1966 models?


Charles Mills (Bud) Drury: Yes, Mr. Speaker.



REQUEST FOR ESTABLISHMENT OF AUTOMOBILE SAFETY COUNCIL

[Stage Direction]
On the orders of the day:
Mr. Guy Marcoux (Quebec-Montmorency):: Mr. Speaker, I should like to direct a question to the Minister of Industry.
Do the minister and the cabinet intend to promote the establishment of a national council of automotive safety, as requested by many Canadian municipalities, including the city of Ste. Foy, in Quebec?


Charles Mills (Bud) Drury: Mr. Speaker, I do not think I have to remind the hon. member that road safety comes under provincial rather than federal jurisdiction.
Inquiries of the Ministry


Guy Marcoux: A supplementary question, Mr. Speaker. This has to do with safety precautions in the manufacturing of automobiles. The federal government has been asked to promote the establishment of such a council.


Charles Mills (Bud) Drury: Mr. Speaker, I shall examine the question.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Max Sallsman (Waterloo South):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. In view of the fact that the large number of applications from the Portugese community of Waterloo South for the admission of relatives to Canada has seriously overloaded the facilities of the Department of Citizenship and Immigration and is causing long delays in the processing of these applications, can the Minister inform the House if it is his intention to increase staff so these requests may be handled promptly?


John Robert (Jack) Nicholson: Mr. Speaker, the simple answer to the question is yes, but I feel that some further explanation is called for. Consideration is being given to increases in the staffs of several of our immigration offices in western and southern Europe, and to the establishment of some additional offices. In saying this I wish to make it clear that I am not referring specifically to our office in Portugal but rather to Europe generally.
I am sure the hon. Member and other hon. Members will appreciate that when we were faced with the serious unemployment situation that existed in Canada up until a relatively short time ago, the extent to which we should step up our immigration services was questionable, especially in those countries from which we were getting immigrants, having no special skills or trades. I might say that the situation is very different today, and the Assistant Deputy Minister of Immigration and the Director of Overseas Immigration Services have been in western Europe for about 10 days, I believe, visiting the different offices. My Deputy Minister and the Director of Immigration Services here in Canada are joining them later this week for a full scale discussion in London, and inquiry as to what additional staff and what additional facilities may be needed.
May 4. 1965

Inquiries of the Ministry [DOT] (3:20 p.m.)
I might say that the prime purpose or prime objective of this meeting is the accumulation of information that is needed for the white paper upon which we are now working. The information is required largely because of discussions we have had with several of the Provinces, some four or five at least, and with industry regarding the need for skilled workers. The whole matter is under active study.



SOCIAL SECURITY


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a question to the Secretary of State, and ask him whether within the last two or three days the Government has decided to call for quotations, and is now asking for quotations, for a new form of social security card which will remove the coat of arms of Canada from the card and substitute the new flag.


Hon. Maurice Lamonlagne (Secretary of State):: I will take the question as notice, Mr. Speaker.



IMPROVEMENT OF WORKING CONDITIONS OF INTERPRETERS

[Stage Direction]
On the orders of the day:
Mr. Robert Beaule (Quebec East):: Mr. Speaker, may I put a question to the Secretary of State?
Following an article published yesterday in Le Droit concerning the predicament of the house's interpreters, does the minister intend to remedy the situation by improving those people's working conditions?


Maurice Lamontagne: Mr. Speaker, the question is under consideration.


Jean Robert Beaulé: How long yet will it be under consideration?


Maurice Lamontagne: Mr. Speaker, we will surely have an announcement to make soon.



CONSIDERATION OF RECOMMENDATIONS OF PROCEDURE COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. Speaker:: The hon. Member for Peace River.


Mr. G. W. Baldwin (Peace River):: I wish to thank Your Honour for the recognition the Early Bird satellite has made possible. I have a question for the Prime Minister, and I am asking this question in view of certain press stories, which may be inspired or speculative, that the Government will propose parliamentary procedural changes. Could the right hon. gentleman advise whether the suggestions made by the Parliamentary Committee including, inter alia, those which would be effective in containing and curbing the growing concentration of power in the executive, will be among them?


Lester Bowles Pearson: Mr. Speaker, the ideas and recommendations of the committee have all been considered in the Government's examination of this matter, and I think my hon. friend will find them reflected in the proposals which will shortly be put forward in the House.



EXPO '67 CONTRACTS WITH UNIONS RESPECTING BUILDING CONSTRUCTION

[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Pictou):: I should like to direct a question to the Minister of Trade and Commerce who reports to Parliament for Expo '67. In his absence I will direct it to his Parliamentary Secretary. Is it correct that Montreal contractors who have submitted tenders for the construction of buildings at Expo '67 have stipulated in their tenders that they will not be bound by the agreement which was reached between Expo '67 officials and certain trade unions? They state they have an agreement, in many cases, with other trade unions. I ask this question because the Minister stated at that time that the reason the original agreement was signed with certain trade unions was to accelerate construction. If this is so, what action will the Government take to ensure that this important project is continued and completed on time?


Mr. Jean-Luc Pepin (Parliamentary Secretary to Minister of Trade and Commerce):: I will get a translation of the question and try to bring in an answer.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. G. L. Chaiterton (Esquimall-Saanich):: Can the Minister of Transport say when
May 4, 1965
the interdepartmental committee considering ship subsidies will be reporting?


John Whitney Pickersgill: I will make some inquiries.


George Louis Chatterton: May I ask a supplementary question. In view of the fact that other than for a couple of commercial fishing vessels no new contracts have been let since the freeze was announced three months ago, will the Minister use his influence to have the committee submit its decision early?


John Whitney Pickersgill: Of course the Government is not anxious to have any delay on this matter at all.



ST. LAWRENCE-REPORTED STATEMENTS RESPECTING ACCIDENTS

[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I would like to direct a question to the Minister of Transport. On Tuesday and Wednesday of last week I asked the Minister certain questions about statements by Mr. McLagan of Canada Steamship Lines and the operation of certain of its ships on the Seaway, and if I remember correctly the Minister said his research had not taken him too far into that matter. Has he anything to report to the House now about the accidents on the Seaway? While I am on my feet may I also ask whether he received a letter from the Seafarers' International Union regarding the operation of a Greek registered ship, the Atrostos, which has been carrying fuel oil between Toronto and Quebec, presumably in contravention of the Canada Shipping Act?


John Whitney Pickersgill: Mr. Speaker, to the best of my knowledge I have not seen, or at any rate I have not consciously examined, the letter in question, though no doubt it exists. As for the general representations made to my Department by the S.I.U., they are receiving very careful consideration. Several officers of the Department have been in touch with Mr. McLaughlin with a view to getting particulars which would make it possible to investigate in a specific way the allegations he has made. I will look into the question of this letter and see what should be done about it.
895
Inquiries of the Ministry NATIONAL ANTHEM



CONSIDERATION OF IDENTICAL FRENCH AND ENGLISH VERSIONS OF &quot;O CANADA&quot;

[Stage Direction]
On the orders of the day:
Mr. Clement Vincent (Nicolel-Yamaska):: Mr. Speaker, may I put a question to the right hon. Prime Minister?
Does the right hon. Prime Minister not believe that it would be desirable to create right now a committee of the house charged with recommending identical French and English versions of O Canada, which is to be adopted as the national anthem during this session?


Lester Bowles Pearson: I do think this is a suggestion that merits careful consideration, and that is being given to it.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. N. Ormision (Melville):: My question is for the Minister of National Defence, and it is based on an article in last Saturday's Ottawa Journal which reads in part as follows:
The Canadian Army is so hard pressed for infantry battalions that the defence department has had to select for U.N. duty in Cyprus, the unit which performs the changing of the guard ceremony on Parliament hill.
I wonder if the Minister could tell the House whether or not there is a shortage of front line infantry battalions in the country at the present time, and what steps are being taken to bring the second battalion Canadian Guards up to full strength.


Paul Theodore Hellyer: There is no shortage of battalions. The number of battalions has been fixed for a considerable period of time. As I indicated last year, the changing of the guard on Parliament Hill does interfere with the training requirements of the Guards battalions. Nevertheless, it was considered advisable to continue this national ceremony this summer. I am sure we will be able to make up the deficit from the other battalions in order to enable both battalions to do their work during the summer.



May 4, 1965
Inquiries of the Ministry


James Norris Ormiston: Is it a fact that the second battalion of Canadian Guards is under strength at the present time?


Paul Theodore Hellyer: I suspect it is a little under strength, but the actual number I could not say offhand. I would be glad to get the figure for my hon. friend if he desires it.



NATIONAL EMPLOYMENT SERVICE


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: I should like to ask the Minister of Labour whether he feels he will be able, at an early date, to make a statement to the House about what changes in the administration and program of the National Employment Service have taken place since it was transferred to the jurisdiction of his department. Can he also deal in such a statement with the provisions that are being made for the division of premises which have been jointly occupied by the unemployment insurance service and the National Employment Service in the various centres across Canada?


Allan Joseph MacEachen: As my hon. friend knows, the National Employment Service is now part of the Department of Labour. As I indicated to the House, it is intended to secure the services of a management consultant firm to advise the department on the appropriate integration of the National Employment Service with the other manpower operations of the department. Until that study is completed and a decision is taken, it will not be possible to indicate finally how the National Employment Service will be fully integrated or how it will operate within the manpower field, except that as I have already stated it is expected it will be keyed operationally into the implementation of manpower policy. I would be glad to get some information on the premises aspect of the question and give it to my hon. friend. [DOT] (3:30 p.m.)


Thomas Speakman Barnett: As a supplementary question, am I to take it then that there will be no changes of substance in the operation of the National Employment Service until the survey to which the Minister refers has been completed?


Allan Joseph MacEachen: Changes will be made; whether they will be changes of substance is a question of judgment, but the final, firm relationship of the National Employment Serv-

ice to this other role, and its relationship to other aspects of the Department, will not be determined until after we have had the benefit of advice from a consulting agency.


Thomas Speakman Barnett: Is any extension of the field service operations of the National Employment Service contemplated in the immediate future, or is it taking place at the present time?


Allan Joseph MacEachen: We have added staff to the National Employment Service, increasing the complement by several hundred, and the staff requirements of the National Employment Service are currently under review.



CANADIAN CITIZENSHIP


[Stage Direction]
On the orders of the day:
Mr. K. H. More (Regina City):: Mr. Speaker, I wish to direct a question to the Minister of Citizenship and Immigration. A short time ago I asked him about the establishment of further citizenship courts, especially in regard to Saskatchewan and Regina. Has he any information today on this matter?


John Robert (Jack) Nicholson: Mr. Speaker, I thank the hon. gentleman for giving me time to look into the matter. We now have citizenship courts in six of the provinces. We intend to proceed gradually with the establishment of such courts in the other provinces, and the next two on the list are Saskatchewan and Nova Scotia.



ST. LAWRENCE SEAWAY ACTION BY GOVERNMENT WITH RESPECT TO DEFICIT

[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Albert):: Mr. Speaker, I have a question for the Minister of Transport. In view of the St. Lawrence Seaway report just tabled which shows a record deficit of $14 million, and in view of the very serious criticism by the Auditor General contained therein with respect to this deficit, will the Minister say whether the Government is giving immediate attention to it, and how soon can we expect some remedial action with regard to it?


John Whitney Pickersgill: Mr. Speaker, I think the hon. gentleman, who is a great student of these matters, is well aware of the fact that the tolls are fixed by joint agreement between Canada and
May 4, 1965
the United States. There are discussions proceeding on this matter at the present time, which have not reached a conclusion.


Thomas Miller Bell: As a supplementary question, is the Minister aware that the action that is now being taken is definitely quite illegal, in the words of Mr. Henderson, and that quite a few Canadian taxpayers, particularly those in the Maritimes who do not get any benefit out of the Seaway, are concerned about this type of bookkeeping?


John Whitney Pickersgill: Mr. Speaker, unlike the Auditor General I am forbidden by the rules of the House to express a legal opinion.


Mr. Joseph Macaluso (Hamilton West):: would like to suggest to the Minister of Transport that during the negotiations which are going on, discussions be seriously entered into by the Canadian Government to see that the Seaway be returned to an all-Canadian nature and that tolls be abolished thereon-


Mr. Speaker:: Order.


John Whitney Pickersgill: Mr. Speaker, that would require action by this House, and the other place, and the Crown.



REQUEST FOR INTRODUCTION OF NATIONAL CO-OPERATIVE LEGISLATION

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the Secretary of State whether he has received any representations from the Co-operative Union of Canada and any other co-operative organizations requesting that a national co-operative act be introduced in this House? If so, is the Minister giving sympathetic consideration to introducing such legislation?


Maurice Lamontagne: Mr. Speaker, I have indeed received representations, and they have been accepted in principle. I am now giving consideration to appointing a special committee of experts to draft the necessary legislation.
[DOT] (3:40 p.m.)



THE BUDGET


[Stage Direction]
The House resumed from Monday, May 3, 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.
The Budget-Mr. Grafftey
William Heward Grafftey: Mr. Speaker, this is certainly a wait and see budget. As the Minister of Finance (Mr. Gordon) delivered his budget address the other night it was well nigh impossible to count the number of times he used the expression, "we shall have to wait and see", or something similar to it.
Members of this House and the Canadian people must fully recognize that Canada's financial position is strengthened and our economy moves forward only when the Government does everything possible to improve and strengthen Federal-Provincial relations. Yet we are told to wait and see regarding Federal-Provincial relations and affairs relating to our constitution; wait and see while the Government stumbles from crisis to crisis; wait and see while the Government stumbles from crisis to crisis when basic action is needed immediately.
I say, together with the right hon. leader of my party, that the Government must immediately convene a national conference to study our constitution, and an all-party Parliamentary Committee should meet with similar bodies in every Province. The result will be a Made in Canada Constitution, a modern Constitution suited to modern times.

That conference must be convened as soon as possible. The Canadian constitution must be brought up to date; we need a constitution made right here in Canada.

We are asked to see whether the war on poverty will begin by itself. While those in the higher income brackets are to get a $600 tax saving, those in the lower brackets are to get a cut amounting to less than two cups of coffee a week. A Government which ignores the problems of price stability tells us to wait and see whether inflation will merely pass away. Meanwhile those who are trapped in grinding poverty must pay higher prices on fixed or shrinking incomes.
This Minister tells us to wait and see whether the war on poverty will begin by itself. We are told to wait and see whether by some stroke of magic the poor will become richer. Mr. Speaker, the budget is meant to be the Government's main annual social and economic document outlining, together with its course of action, the objectives of the administration both short term and long term.
I ask the Minister: Is this the beginning of the war on poverty, or does the Government merely intend to raise the expectations of

May 4, 1965

The Budget-Mr. Grafftey Canadians living in poverty and want by cruel and empty slogans, although it is action which is needed, and needed now?
The young people and the students of Canada are told to wait and see by a Government which hopes they will conveniently forget the promise of 10,000 university scholarships; by a Government which attempts to mobilize the idealism of youth while turning its back on its election speeches and promises. A Government which tolerates wrongdoing in high places and permits at least three and possibly four or five of its Members and supporters to remain in this House, when in any other free Parliament in the Western world those Members would long since have departed. Hon. gentlemen opposite wait and see and hope the public will conveniently forget that complete integrity is a prerequisite of good government in Canada.
We have to wait and see whether our products can become competitive at home and abroad while a tax of 11 per cent is hung around the necks of many of our producers. The farmer is told to wait and see by a confused Minister of Agriculture who keeps telling eastern farmers they never had it so good. Well, last Sunday a farmer phoned me in my riding and said: "In 1958 I received $3.10 per hundred for my milk and I am still receiving $3.10 per hundred for my milk". I should like the Minister to repeat to that farmer his statement that "he never had it so good". I will tell you one thing, Mr. Speaker. The poor farmers in Eastern Canada will not wait for the war on poverty to begin while the Minister responsible for rural development forgets the job he should really be doing and goes around wondering whether the new wing of the Liberal Party is going to survive in Quebec. The public in general, finding it difficult to afford the high cost of drugs and medicines, is told to wait until the Minister is given the findings of a committee report. I will say this: No Minister of Finance in the history of this young country has waited for the findings contained in so many reports, while an angry public witnessing the breaking of one promise after another calls for action. Management and labour are told to wait and see by a Minister of Finance who refuses to chart short and long term goals. At the same time, the majority of the recommendations of the Economic Council are either ignored, misunderstood, or, what is even worse, put on the shelf. Businessmen want to know more about the Canada Development

Plan before the private sector of the economy can raise investment capital. They, too, are told to wait by an indifferent Minister. The universities need help-not tomorrow but today. They, too, are told to wait and see, pending the report of the Bladen Commission. Hundreds of students were turned down by our medical schools this year. A lack of research and teaching facilities is the major reason for this state of affairs. Our medical schools are crying for increased assistance in research but they, too, are told to wait and see by an indifferent Government and by an indifferent Minister. Textile manufacturers are told to wait and see by a Government which will not or cannot arrive at sensible and realistic agreements with our trading partners.
Why is this a "Wait and See" budget? The answer should be very clear to most Members of this House. The fact is we are still suffering from the effects of the first budget which the Minister brought before this House. For the first time in the history of this country a Minister of Finance had to withdraw all the major proposals he had made. It was easily the worst budget ever presented in the history of Canada. The hon. gentleman had to withdraw all the major proposals of his first budget and he is now too terrified and too timid to act when action is patently necessary.


Some hon. Members:: Hear, hear.


William Heward Grafftey: As he stands paralysed in a strait-jacket of fear an anxious Canadian public "waits and sees" how long the Prime Minister will allow him to occupy such a sensitive post in our nation.
I have already drawn attention in my opening remarks to the need for calling a national constitutional conference as soon as possible. We know that no plans which the Minister may make to better the financial and economic position of this country can come to fruition unless everything possible is done to improve our constitution and lead to better Federal-Provincial relations. But this Government-and I speak as a Canadian representing a riding made up for the greater part of the two founding races of this country -stupidly stumbles from crisis to crisis. The Minister of Finance is a prime example. His whole domestic economic program floundered on the rocks because he did not understand the basic initiatives required in the field of Federal-Provincial relations. He should have made himself familiar with this situation
May 4, 1965	COMMONS DEBATES	899
years ago. But he failed to do so and as a result his whole program floundered with consequent damage to our national unity. Last week we saw a dispute between this Government and the Government of Quebec over treaty making powers. This week it is a dispute between this Government and the Province of Quebec over job placements. A new dispute has arisen over housing.
Why has this situation come about? It is because Members opposite refuse to heed in a bipartisan way the suggestions made by my right hon. leader-suggestions which were not made in a party spirit but for the good of Canada because in this instance, as in all other instances, the Leader of the Opposition places his country before party. This Government refuses to convene a national conference to renew and modernize our constitution. Its Members simply stumble from crisis to crisis.
Why must such a conference be held? This has been explained time and time again in the House but it must be repeated until this Government learns. Many metropolitan areas are today administering budgets larger than the budgets of some Provinces. These metropolitan areas are not cities and towns in the old 1867 sense. While they fall within the jurisdiction of the Provinces, which have the primary responsibility, the Federal Government certainly cannot turn its back on the many complex problems facing our sprawling city and metropolitan areas today. There is education, which falls under the purview of the Provincial Governments. Who in 1867 would have ever envisaged the expenditure on education which is taking place today?
[DOT] (3:50 p.m.l
This is another point I want to make, Mr. Speaker. It is hard to explain in words, but in many ways I have learned it since coming to this House of Commons and associating with many of my good colleagues from the West. What is going on in Quebec today? The Legislature of the Province of Quebec are studying necessary changes in our constitution; but I feel that very often we in the East fail to realize that since 1867 between the lakehead and the foothills of the Rockies, millions of Canadians have poured into the great West of our land. Today these people have a unique, outward-looking and dynamic idea of what Canada should be and should look like. Instead of dividing this country by inactivity, when will this Government accept the suggestion of our right hon. leader and do the basic job that is necessary?
The Budget-Mr. Grafftey
The people from my Province perhaps have a different idea of what Canada should look like today than have the people in other parts of Canada. I happen to think that regionalism in many ways is a good thing as we underline "unity in diversity" in Canada today. But surely the time has come for these points of view to be brought to the conference table, instead of smearing my leader every time he opens his mouth about my Province. When he makes a suggestion to better Quebec, he is smeared with this anti-Quebec label. Every time he puts forward a suggestion inside or outside this House, he is smeared in this regard-and I know that the Liberals are up to their same old tricks-with "anti-Quebec", "anti-Canadian".


An hon. Member:: Who is smearing him?


William Heward Grafftey: Yes, and probably the hon. Member is one of those.

Last night Mr. Lesage came to Ottawa. Next week Mr. Pearson will go to Quebec City; and he gives throughout the country the impression that he is in the process of working out an agreement between two countries.
I ask the Prime Minister to convene such a national conference as soon as possible.

Sir, every day this Government waits to establish such a national conference to study our Constitution is a wasted day. The Canadian people will not tolerate this. They will not wait and see whether or not the Prime Minister is going to negotiate us out of Confederation. The Canadian people want to see the Prime Minister lead us into one united Canada. This suggestion will certainly have to be acted upon very, very soon, and the people of Canada will not wait and see.
What about the war on poverty. The Throne Speech said that the Government was going to declare a war on poverty.


Eldon Mattison Woolliams: On the poor.


William Heward Grafftey: Again I say, Sir, that every sensible Member of this House and every conscientious Canadian recognized that if the Government was really sincere, it was in the budget, the major annual, social and economic document of the Government, that the government should outline in some detail at least how they would carry out this war on poverty. But what do we see? While those in the higher income brackets-I repeat again-are accorded a $600 tax reduction,
900	COMMONS
The Budget-Mr. Grafftey the lower income bracket earner gets a couple of cups of coffee a week. The question of inflation, which so touches the poor people in our country who are living in grinding poverty, was not considered by the Minister at all. The Minister falls into the classical pitfall of the affluent society. He has the gall to quote statistics to the millions of Canadians living in poverty, destitution or deprivation. It is not statistics they want from the Minister of Finance, who looks upon their plight with indifference, but they want action from a Government that is bogged down in the mire of indecision and confusion.
Mass poverty is one thing in the African and Asian countries. It is yet another thing in Canada where we have the second highest standard of living in the world. In my opinion, Mr. Speaker, and I am sure this is the opinion of many Members of this House, far too many Canadians are not truly sharing in our nation's prosperity. Right here, at home, we have done a poor job at pushing back the frontiers of poverty and want. Individual and national excellence will be a meaningless idea if millions of Canadians continue to barely exist in substandard conditions. We shall have to put an end to poverty in the midst of plenty at home, otherwise what will our answer to Communism be abroad? I will tell the Government this, Mr. Speaker, that you do not declare war on poverty in a concrete way by slogans alone.
The gross national product-and this is something the Minister of Finance should be very well aware of, and yet he is not, as he cites statistics and tells the people they have never had it so good-may be up and unemployment may be down; yet the poor still remain poor. In fact, very often an ever increasing gross national product locks more people into poverty. Today our rising gross national product means that many Canadians are becoming richer, while more than 4 million are becoming poorer. Four fifths of us earning salaries or having incomes tied to rising production or prices are not affected by this, but the other one fifth must pay these higher prices with shrinking and dwindling incomes. I ask myself, what percentage of this one fifth group will be covered by contemplated measures such as the Canada pension plan? I ask myself, what percentage of this one fifth group will be helped by this budget which is meant to begin the war on poverty-and I say none, Sir. I think it is a depressing thing when a Government, with slogans, builds up and raises the expectations

DEBATES	May 4, 1965
of millions of Canadians living in poverty and want, and the first major document, namely their budget, which they bring before this country has nothing in it for the poor.
Today rural poverty has become a great challenge to all of us. The rural poor and unemployed are to be found in our countryside, villages and small towns. A farmer owning his own land must gross $2,500 a year if he wishes to barely exist. By these standards we have subsisting at or under such a level 500,000 rural families. These families, together with the city poor, make up one fifth of our nation's population. The rural poor of this nation will not wait for the Minister of Forestry and Rural Development to decide, while he neglects his job, whether the new guard of the Liberal Party is going to survive in the Province of Quebec. Instead of the Minister continuing his war with the Prime Minister regarding who is going to clean out the old guard in Quebec, when is he going to administer his department and meet the challenge of rural poverty in this nation?
As the more affluent members of our society move to the suburbs, the city poor are still to be found in the millions at the centre of our metropolitan regions. Here we find the disabled, the unskilled and the aged in rundown housing areas. Need I say more in order to spell out the problem, Sir? Let us face it with the realization that wherever there is economic opportunity most men will willingly work. What are some first steps? Having found out where poverty is located, the next step involves the appropriate remedies. What are they? Roads, schools, parks and hospitals must be built by governments. And let us not imagine that only a small amount of money is involved in this regard. Area development, rehousing, retraining, health measures, urban renewal are only a few matters we should act upon immediately.
[DOT] (4:00 p.m.)
I should now like to deal with rural areas, Sir. First of all the Agricultural Rehabilitation and Development Act legislation must be spurred on. Rural poverty has been largely located, and there is absolutely no excuse for further delays in implementing concrete plans which will bring results in terms of better land use, good farmers on good farms and social justice for those who wish to remain in rural areas.
Second, more vocational and trade schools must be built and staffed. As medium and light industries move into rural areas these schools will train and retrain rural citizens
May 4, 1965	COMMONS
who do not wish to locate and should not be relocated in our cities.
Third, straight grants to industries, for training or retraining workers up to definite standards on the job should be considered.
Mr. Speaker, when tax concessions are given to certain companies moving into designated areas, unemployment figures should not be the only statistics or factors considered before an area is so designated. Often there is no unemployment in a region simply because there is no growth. The grinding poverty and stagnation is appalling.
Let me refer to some first steps in respect of our cities and our metropolitan areas. While cities and towns come under the jurisdiction of the Provinces, many of our larger metropolitan areas are no longer cities in the sense they were in 1867. Today many metro governments administer larger annual budgets than a great number of our Provinces. While the Provinces have their primary responsibilities over cities and towns, the Federal Government cannot turn its back on the problems facing our sprawling cities and metropolitan areas.
Sir, in 1961 the Federal Government and Provinces called a conference relating to our material resources. The result was the eminently successful Resources for Tomorrow Conference. This was a high water mark in Federal-Provincial co-operation. In a similar spirit I believe that after much preparation the Federal Government and Provinces should call a conference on human capital and human resources.
To a great extent such a conference would involve problems facing our cities and metropolitan areas. Principles would be laid down and a line of action determined. Urban renewal, rehousing, communications, physical fitness, automation, delinquency, problems facing the aged and disabled, health and social justice would certainly head the list on the agenda of the conference.
These are merely some first steps that I believe must be taken immediately in order to face and solve a problem that has been with us far too long. The continuance of grinding poverty is not inevitable. If it is, what does democracy mean to the millions of Canadians who live in destitution, poverty or deprivation? This budget takes no first step in the war on poverty, and the time to begin is not tomorrow but now.
Sir, let us look at the economic goals for Canada to 1970 as outlined in the first annual report of the Economic Council of 22620-58
DEBATES	901
The Budget-Mr. Grafftey Canada, and determine what if anything the budget under discussion does to move us any closer to these goals. Let us look at three of the five goals stated in the Council's terms of reference. The first goal listed is that of "a reasonable stability of prices." In Canada last year over 3 per cent of our gross national productivity gain can be attributed to inflation and higher prices. Yet in his budget address the Minister ignored the problem as if it never existed. Certainly no constructive proposals were made in this regard. If the Minister continues to ignore this problem he does so at his own and certainly at his nation's peril.
The second goal listed by the Economic Council's annual report is "a viable balance of payments". In order to attain this goal I believe our products must remain competitive in the world markets, but the failure to abolish the 11 per cent tax, and the budget failure to advance one single measure to increase productivity brings us no closer to this goal.
The third goal set out by the annual report is an "equitable distribution of rising incomes." Mr. Speaker, I read this to mean that more Canadians should share in our nation's prosperity. Certainly more Canadians should share in our nation's prosperity, just as the Government should begin this war on poverty. A budget that favours the high income earner with a $600 per year tax saving and the lower income earner with a tax saving equivalent to the cost of a couple of cups of coffee, and a Government that ignores the effects of inflation on the 30 per cent of our population living in poverty, destitution, and deprivation, Sir, does not seem to be concerned very much with the goal of "an equitable distribution of rising income."
The first annual review of the Economic Council of Canada points out time and time again that Government has a major role to play in encouraging individual and national excellence. This budget now under discussion fails to recognize this fact.
Mr. Speaker, naturally every political party would claim to be the champion in encouraging individual and national excellence. This is to be expected. It is not my purpose to challenge other parties' views. I merely wish to underline what I consider the basic Conservative approach to the subject. While the Conservative recognizes that, in many ways, the old frontier days are a thing of the past, he still places great importance on the individual citizen and his legitimate aspirations. He also recognizes that nations are best at
May 4, 1965

The Budget-Mr. Lamontagne doing certain things. Nations, like individuals, have their specific aptitudes and qualities. In brief, the Conservative places a high premium on constructive national purpose and individual enterprise. This is no mere cliche, but something that is deeply felt and deeply believed in, namely that the Government has a dynamic role to play in encouraging individual and national excellence. That is something this Government has failed to recognize, but must begin to recognize if Canada is to move forward as a country.
[DOT] (4:10 p.m.)


Maurice Lamontagne: Mr. Speaker, in rising to participate in this debate I should first like to draw the attention of the House to the new environment in which the budget has been brought down, and to which reference was made by the hon. Member immediately preceding me in the debate.
Since the last budget, we have had the first results of an exciting and significant experiment in national economic planning. I am referring to the first annual review of the Economic Council of Canada. This Council, which held its first meeting in January 1964, and published its first report in January 1965, is made up of three full time members-a chairman, a vice chairman and a director, who serve in their professional capacity as economists-and 25 part time members who were appointed after consultation with appropriate organizations. The latter were drawn approximately equally from four areas: labour, industry and commerce, agriculture and other primary industries, and the general public.
The Council has acquired a small but singularly competent staff of highly qualified experts. It is a unique organization, a sort of continuing royal commission on Canada's economic prospects and potential. Its first report provides, in my view, a strategy for policy, a set of goals and targets against which the actual performance of the economy should be measured. It provides a prescription of what the Canadian economy can and should achieve in the period to 1970. For the first time in the Canadian experience there exists the essential and basic framework within which economic planning in the public and private sectors can be effected. Within this framework the needs of tomorrow can be brought to bear on the policies of today.
This Government believes in economic planning, in indicative planning. We believe

that, in the face of a rapidly changing technological, commercial and political environment, a conscious and organized attempt must be made to co-ordinate public and private policies more rationally in order to reach agreed upon economic goals. This kind of planning should proceed in three stages. There should be an examination and specification of national goals in the light of the economy's potentialities and prospects. On the basis of a comprehensive assessment of the problems which may arise in achieving these goals, advice should be forthcoming on the means to achieve economic potentials. Policies, public and private, appropriate to bringing the prospects in line with the potentialities should be pursued and encouraged.
Within this framework of indicative planning the vital role which has been assigned to the Economic Council is to indicate the economic potentialities, to specify the national goals and targets, and to advise on the means to achieve them. The role of the budget and other Government policies is to use such advice to change economic prospects, if necessary, so that they will fulfil the potentialities. This is why from now on the budget ought to be considered and reviewed in the light of the annual reports of the Economic Council.
In its first annual review the Council dealt with the prospects and problems of the Canadian economy during the period to 1970. That report should carry great weight not only because of the excellence of its analytical content and substance but also because it is an expression of a consensus achieved amongst important decision makers in the private sector, including labour leaders, businessmen and representatives of the general public.
What are the goals and potentialities indicated by the Council? They are briefly defined as follows, and I will be more specific than the hon. Member for Brome-Missisquoi (Mr. Grafftey). The first goal is a net increase of a million and a half jobs from 1963 to 1970; second, an average annual rate of increase of 5.5 per cent in total real output and, third, an annual rate of unemployment of 3 per cent. A necessary condition in achieving of these targets, according to the Council, is a reasonable degree of price and cost stability. The Council suggests that if the range of price and cost movements can be successfully contained within the limits of the relatively moderate average annual
May 4, 1965
changes in prices and costs annually recorded in Canada over the past decade, that is, 2 per cent, this necessary condition will have been met. In the opinion of the Council, if these targets are achieved we will have a high standard of living and a high employment economy in the period to 1970. If they are not achieved, then our economy will operate below its potential unless specific steps are taken to improve economic prospects. The Government, as indicated by the Minister of Finance (Mr. Gordon), has accepted the targets and the goals proposed by the Economic Council.
It is in the light of these goals, therefore, that we must appraise the economic prospects for 1965 as indicated in the budget speech. What are the prospects? The Minister of Finance has stated that in the last two years 500,000 new jobs have been created in our country. This certainly reveals a healthy rate of improvement which, if sustained, will result in achieving the Council's employment target some time in 1968 instead of 1970. The Minister of Finance forecasts an increase in prices of goods and services within the range suggested by the Council. However, the prospective performance of the economy in 1965 falls short of the targets in two respects. The Minister of Finance forecasts an increase of 5 per cent in real output instead of the 5.5 per cent average proposed by the Council, and the most recent statistics reveal a rate of unemployment of 3.9 per cent of the labour force. Such conditions, in the Council's view, call for a relatively small deficit. Indeed, the members of the Council say:
"We would favour a combination of levels of tax rates and expenditure programs which would yield a rough balance if the economy were operating at potential output."
Since the economy in 1965 is expected to operate slightly below its potential, the Minister of Finance has decided to stimulate total demand, more specifically consumer demand, and to cut taxes in a way intended to close still further the gap between the level of performance of the economy and its potential rate of real output. This should help also further to reduce unemployment.
We are, therefore, rapidly approaching the stage where we will have eliminated what the Council has termed "demand deficient unemployment". This, however, is not sufficient. We all realize that we must address ourselves to the problem of hard core unemployment and that measures other than tax cuts are needed to alleviate structural 22620-58J
The Budget-Mr. Lamontagne or chronic unemployment. The Council in its report has a great deal to say about the need for upgrading the skills and enhancing the mobility of our labour force. The Minister of Labour (Mr. MacEachen) is developing new manpower policies with the objective of achieving an optimum utilization of our rapidly growing labour force. This comprehensive program will attempt to remove the occupational, industrial and geographic obstacles that stand between the displaced worker and his new job. Better criteria are being developed to be applied to designated areas. Greater assistance through ARDA and the Department of Industry will be available to those areas where unemployment is high and where incomes, if they are available at all, are low. We intend to implement, in collaboration with the Provinces, new and better co-ordinated regional policies which will create new opportunities for depressed areas, and cure chronic pockets of unemployment in a way consistent with the achievement of the national economic goals.
[DOT] (4:20 p.m.)
The Council indicates that the effective achievement of potential output, with adequate accompanying labour market policies and other measures to facilitate adjustment to change, will significantly improve the standards of living of low income groups. However, the Council recognizes "that there will be Canadians who, for various reasons, will be unable to participate in the high employment and income opportunities under conditions of rapid and sustained growth and whose poverty may become more acute and more obvious in a high income, high growth economy". The war on poverty program announced by the Government is an energetic response to his challenge. The budget is the Government's first participation in the new Canadian experiment in planning.
In January the Economic Council provided the strategy for policy. It has indicated the targets, the goals and the potentialities of the Canadian economy through to 1970. The Minister of Finance (Mr. Gordon) has presented policies which will contribute to our economy, realizing its potential in the participation of that strategy. This is a landmark in our history and the Minister of Finance is to be congratulated for having taken this very important step which places the budget in a completely new prospective.
We are also, of course, most grateful to the Economic Council for its very fine report. From now on, no serious economic discussion

May 4, 1965

The Budget-Mr. Lamontagne can take place without taking into consideration the work of this new and significant national institution. The Government, in the Budget, has accepted the goals and prescriptions of the Economic Council. Those who are opposed to the budget proposals should also, if they want to be consistent, attack the Council's report on which these proposals are based, and say how and why the targets and recommendations of the Council are deficient. The Members of the Opposition during this debate are not even trying to do so.

In his speech the Minister of Finance also dealt with the federal-provincial relations problem. I should also like to deal with it. I will first go over the main stages in the development of our political system since 1867; I will then explain the nature of cooperative federalism and, finally, show the main results obtained since its inception just two years ago.
From 1867 to 1920, the central government dominated within our confederation. The political union of 1867 was a compromise between legislative union and confederation. On the other hand, the federal government assumed the great tasks of the state, at the time, and provincial legislatures were put under its control. It was to organize the former colonies into a common market, standardize the currency, extend the territory from the Atlantic to the Pacific, help to develop the country by completing the railway and canal system, foster colonization through immigration and protect infant industries by establishing customs tariff. It was given full authority to discharge its duties in the fields of currency, national and international trade, and it could use every means or systems of taxation.
Such was the spirit of confederation in the beginning. Although the provinces gradually freed themselves, it is safe to say that this federalism, which I shall call a trusteeship federalism, was maintained until after the first world war.
The second important phase of our political evolution took place between 1920 and 1940 and was marked by provincial supremacy and by a federalism of coexistence. The federal government had accomplished the great tasks it had been entrusted with in 1867. On the other hand, due to technical progress -the invention of the automobile for instance-due to industrialization and urbanization, which also became sources of eco-

nomic instability and social insecurity, due finally to some decisions of the privy council, the field of provincial responsibilities was considerably widened in such areas as highways, education and welfare, because the municipalities could no longer cope with the task.
During that same period the provinces had to increase their revenues and instead of using the field of direct taxation which was opened to them, they invaded, through a legal stratagem, the field of indirect taxation which was prohibited to them under the constitution. In the province of Quebec, for instance, taxes on gasoline, which are indirect taxes, were levied as early as the 1920s, while the first provincial personal income tax which is a direct tax, was levied in 1939. Thus, during that period, every province widened the scope of its responsibilities and increased its sources of revenues without paying attention to the actions of the neighbouring provinces and of the federal government which was marking time anyhow. That was the era of coexisting federalism.
The depression of the thirties was to lead to the bankruptcy of that confederative federalism and the second world war was its finishing stroke. Confederative federalism had not solved the economic and social problems of that time but it had led several provinces to the threshold of bankruptcy.
The third phase of our political evolution, from 1940 to 1963, started with the second world war and was characterized by a return to central predominance. During the post-war period, when the hard times of the depression were still in everybody's mind and when the provinces did not have any inclination nor administrative capability to give leadership, the federal government assumed the new tasks of the welfare state in an attempt to deal with the problems that confederative federalism had not been able to settle. The tasks, briefly, were to promote industrial development, stabilize the economy at the level of full employment and set up a comprehensive system of social security. In order to carry on efficiently its new functions, the federal government thought it necessary to enjoy an exclusive use of direct taxation. That is why the wartime fiscal arrangements were extended, with some amendments. So the central government was, once again, in control of the economic and social activities of the country, acting alone or offering to share in joint plans with the provinces. We had thus come back to an inflexible trusteeship fed-
May 4, 1965
eralism wanted by the poorer provinces, tolerated by the rich provinces and where only Quebec was practising a passive opposition.
In my opinion, two very important lessons arise from our political experience and that of other countries having a federal constitution. The first concerns the distribution of functions between the various spheres of government. Not only is it desirable but it is also necessary for the sake of order to assign certain duties exclusively to one government or the other; however, it is impossible to set up a definite and comprehensive system of distribution of government responsibilities in a complex and changing society.
[DOT] (4:30 p.m.)
Federalism has to be adjusted constantly as the duties of the state change and its responsibilities increase. Every time such changes occur, the necessity arises of redistributing the duties between the different levels of government. Consequently, federalism is never definitely settled.
A tight partitioning of the duties of the state is also impossible. The existence of men living in society constitutes a well-integrated entity; we can, to be sure, make distinctions between various areas in the abstract and consider them separately, but realities do not permit such distinctions. Human problems, whether economic, social or cultural, are becoming increasingly indivisible and their necessary solutions are often beyond the limits set up at first.
There will always be matters of concurrent jurisdiction and problems, such as unemployment, which will require joint action by the governments in order to be solved in the best way possible. In other words, governments, within federalism, can rightly consider themselves as independent from one another in some fields, but in many others, they must consider themselves as interdependent, if they are fully aware of their responsibilities with regard to the common good of their citizens.
The second lesson emerging from our political evolution is that interdependence, however essential to federalism, has never been recognized until lately through a system of consultation and co-ordination of government policies. That is why in a great measure, our federalism has swayed from one extreme to the other, from a trusteeship system to a quasi-confederative system-an extreme gradually generating its opposite-without ever striking a happy medium.
The Budget-Mr. Lamontagne
It is precisely that middle point, that happy medium between trusteeship federalism and confederative federalism which is struck by co-operative federalism. This type of federalism could be summarized in three words: interdependence, consultation and coordination in fields of concurrent jurisdiction or in matters requiring joint action on the part of the governments.
The era of co-operative federalism was born in 1963. Since July of that year, five plenary federal-provincial conferences and several other special meetings were held. During that time, there have been nearly constant contacts between senior officials of both levels of government.
At the Quebec conference, it was decided to set up a federal-provincial tax structure committee. Composed of cabinet ministers and experts, the committee has been entrusted with the task of suggesting, on the basis of new government priorities, new ways of sharing the taxation fields. We have here a collective study that could very well lead us to entirely new approaches in a vital area of our federalism.
During the past two years, the organization of the Montreal world fair and the confederation centennial has been modified to ensure the full co-operation of all governments. The federal government's municipal loan fund has been established without infringing on provincial jurisdiction over local authorities. Finally, a contributory old age pension plan was set up with the best features of both the initial federal scheme and the Quebec program for the greatest benefit of all Canadians. There you have, in short, the first results of co-operative federalism.
Even if, essentially, co-operative federalism boils down to the idea of interdependence, consultation and co-ordination of some important government policies, it also has other characteristics. For instance, co-operative federalism must be associated with the idea of decentralization, in the present circumstances.
The provincial governments have considerably improved their civil service in the last few years; therefore, they are in a better position than ever before to face their own responsibilities. Besides, their will to assume those responsibilities themselves is stronger. From that standpoint, Quebec does not go against the general trend but is leading the movement. Finally, it could not be denied, two years ago, that the provinces had to get more revenues and that some of their responsibilities had priority.

May 4, 1965

The Budget-Mr. Lamontagne
Because of those various factors, and others as well, trusteeship federalism is a thing of the past and co-operative federalism, based on consultation and co-ordination between equals, would be impossible without decentralization. That is at least a concomitant to the establishment of a new federalism. What have we done in that regard in the last two years?
First, we have promoted justice and fiscal decentralization. As early as November 1963, by re-establishing the principle of equalization, we have repaired the injustice done to Quebec and to other provinces, as compared with Ontario, in 1962. Besides, the exclusive share of succession duties coming to the provinces has been increased from 50 to 75 per cent. Under a commitment made in April 1964, the provincial share of the personal income tax will be increased by 2 per cent in 1965-66 and by another 2 per cent in 1966-67. Finally, we gave another 3 per cent to Quebec to make up for the extension of family allowances, which had already been done in that province.
What do all those changes mean in additional revenue for Quebec in particular? If you take into account the extension of the technical training program, our province will receive approximately $300 million more, from 1964 to 1967, under the new federal-provincial arrangements made in the last two years.
We promoted fiscal and legislative decentralization in another important way. We gave the provinces the opportunity to opt out of joint programs already existing and entailing relatively stable annual expenditures and offered to compensate the provincial governments by increasing their share of direct taxes and equalization payments. That reform, approved in its first stage by parliament recently, will give a new direction to our federalism, will center it more strongly on provincial autonomy and will enable the provinces to assume their own responsibilities if they so desire.
The federal contribution to joint programs covered by the opting out formula amounted to approximately $644 million in 1963-64.
The province of Quebec, by taking advantage of this offer, will receive by way of compensation, besides deficiency and equalization payments, 20 per cent of the federal personal Income tax in the form of an exclusive and additional taxation right.
That is an unprecedented measure of decentralization in our political history. Early in 1962, the portion of federal personal in-

come tax that Quebec could collect while still avoiding double taxation was 13 per cent. In 1966-67, if we take into consideration the new fiscal arrangements and the implementation of the opting out formula, that portion will reach 47 per cent. With the equalization payments, it will go over 70 per cent.
With trusteeship federalism, the strength of the central government rested too often on the weakness of the provinces. With con-federative federalism, the strength of the provinces rested on the weakness of the federal government.
I think we should avoid those two extremes which were detrimental to the interests of the Canadian people in the past. The decentralization movement which was initiated in 1963 is a sound one, for it announces the end of the trusteeship federalism. However, the new growing strength of the provinces should not rest on the weakness of the central government in its own fields of jurisdiction. Such an outcome would not be in the interests of Canadians who would sooner or later ask for a return to trusteeship federalism. A strong and prosperous Quebec more particularly needs a powerful and dynamic Canada.
That is why since 1963, the federal government has taken again the initiative at the international level and considerably increased our assistance to underdeveloped countries. We have put the monetary, trade and fiscal policies at the service of our industrial development, and, as a result, the Canadian economy presently enjoys a great development and unemployment has never been as low since 1957.
Finally, we are taking the necessary steps to strengthen the cultural institutions under our jurisdiction. As the chief editor of Le Devoir wrote on June 16, 1964:
We want a federal state strong and articulate enough to ensure efficiency in our country.
And I would add: so that it may play its part fully and vigorously in our political system.
Co-operative federalism, which strikes a happy medium between trusteeship federalism and confederative federalism, is rejected by both extremes facing each other at present in this country, by both separatisms, English and French. But I am sure it will be accepted by all Canadians endowed with clearsightedness and good will, who are the vast majority in this country, and that it will contribute to rebuild our national unity on a more realistic and more dynamic basis.
May 4, 1965

[DOT] (4:40 pm.)


Mr. Murdo  Marlin@Timmins: First, may I say how pleased I am that the Liberals and the Conservatives have finally relented sufficiently to give me an opportunity to speak, at my third try. I cannot help but wonder whether this is due to the benevolent influence of the visit we had today from the Mother of the Year. If this is so it would lead us to believe that whatever else we may say about Liberals and Conservatives, they still are for motherhood.


Eric Alfred Winkler: What about you?


Mr. Murdo  Marlin@Timmins: Before turning to my main topic I should like to deal with something which was said the other day by the Parliamentary Secretary to the Minister of Finance, the hon. Member for Brant-Haldi-mand (Mr. Pennell). The remarks to which I refer appear on page 744 of Hansard for April 29 as follows:
It would be most instructive. Mr. Speaker, to examine the consequences of the proposals contained in the subamendment. The proposal to raise the personal income tax exemption by $500 for single persons and $1,000 for married persons and to raise the old age security payments to $100 per month, would cost $1,150 million per annum. If the hon. Member intended that the $100 per month under the old age security was to be paid at age 65, as his party proposed in the last session, then the total national bill would be $1,790 million per annum.
Now let us consider the wording of the amendment moved by my hon. friend from Nanaimo-Cowichan-The Islands (Mr. Cameron).
-by exempting from income tax all single persons with incomes up to $1,500 and all married persons with incomes up to $2,000 and by failing to raise the old age security pension to $100 a month.
I do not want to waste too much time on this, but I would say that in the light of these words and the interpretation placed on them by the Parliamentary Secretary one can only be led to assume that the hon. gentleman cannot read or, if he can read, that he cannot understand, or, if he can understand, that he has tried to distort their meaning.


Frank Howard: I am inclined to believe the last supposition is correct.


Mr. Murdo  Marlin@Timmins: I believe the amendment is a simple one. It proposes that help should be given where help is most needed. As far as the other part, the part dealing with old age security, if the Parliamentary Secretary is wondering where to find the money for that, he need look no further than the
The Budget-Mr. M. Martin Minister of Finance himself, because the Minister has told us that the old age security fund showed a surplus of $68 million last year and that a surplus of $240 million is predicted for the coming year. Last year the fund amounted to some $900 million. An increase of one third in this amount would provide the money required within the surplus projected by the Minister himself.
We find in "The Blasted Pine" some beautiful words which well describe the situation presented to us by the budget which the Minister of Finance has brought down. Just two or three lines.
As bees on flowers alighting cease their hum, So settling on high places, Whigs grow dumb.
For the benefit of hon. Members who may be too young to be familiar with the word "Whigs", this is what gentlemen opposite used to be called before they became semantically progressive and called themselves Liberals. In any event, these lines were written by someone who knew those gentlemen very well, whether they go under the name of Whigs or Liberals.
To me, the most striking aspect of the present budget is the degree to which it shows just how rapidly Whigs grow dumb when it comes to progressive measures, or even to progressive talk. If we look back to the budget presented by the Minister in 1963 we find he talked then about a Canadian Development Corporation as an instrument of planning. I will not discuss now what happened to that budget. One year later we found that the Minister was still talking about planning but he had lost the instrument. Now, in 1965, we find no talk of planning whatsoever, but the Minister has come up with an instrument. It is an instrument which the Liberals used in 1949 when they sold Cana-dair. Now they are proposing to sell the Polymer Corporation along the same lines, though the Minister gave no details.
I should like the House to consider for a few moments what happened on the last occasion when the Government used this particular instrument. When we look at the record of the debates of the session 1953-54, volume one at page 223, we find that the hon. Member for Nanaimo-Cowichan-The Islands (Mr. Cameron) had this to say:
What else has this Government done? It sold a very valuable business in 1949, which cost the taxpayers of Canada same $25 million. It sold that business to private interests for a total of $3,760,745. That has been one of this Government's contributions to the economic problems of today. I would remind you. Sir, that that plant, which was

May 4. 1965

The Budget-Mr. M. Martin sold in this light-hearted manner, for a small fraction of the cost to the taxpayers of Canada, was the property of these men and women who are living on incomes of $3,000, $2,000 and $1,500 a year.
I suggest that all hon. Members should bear that in mind.
As I say, the Minister did not announce any plan. But, again, 1 think we should turn to Hansard at page 566. My hon. friend from Nanaimo-Cowichan-The Islands said:
Now Mr. Speaker, you may say that this is all water under the bridge, that this transaction has taken place and there is nothing we can do about it. But it has this interest, I think, or should have for members of the House, that it should cause us to scrutinize with the utmost intensity any further sales of Government property. I say this because, despite the qualified denial given in the chamber last week by the Minister regarding the Government's intentions with respect to the Polymer Corporation, there are still rumours current throughout this city that the Government does intend at some future date to dispose of that extremely valuable and profitable piece of property of the people of Canada, and I think in the light of the history of the Canadair Corporation transaction we should be prepared to scrutinize it with the utmost care. X have come to the conclusion, Mr. Speaker, that our government has been acting the part of Robin Hood in reverse, because the owners of the property were poor people and the people who got it were very well heeled.
Just how valuable has Polymer been to the Canadian people? When we look through the reports of this Corporation we find that since that time, since 1949, this industry has paid into the Federal treasury in taxes and in profits between $180 and $200 million. This is the property the Government is prepared to get rid of. It would mean, of course that this money which is flowing into the Federal treasury would have to be found from some other source; it would have to come from the pockets of the taxpayers.


Mr. Godin:: The industry would still pay taxes.


Mr. Martin (Timmins):: Yes, but where would the profits go? It is just another sellout, a return to the philosophy of the past under which business and industry are allowed to conduct their own affairs almost without restriction, a situation which has given rise to serious problems in this country from coast to coast.
[DOT] (4:50 p.m.)
What are the results of this indiscriminate, thoughtless way we have gone about our business over the years? We find that some of our biggest problems today are the water table levels in the Great Lakes and the St. Lawrence Basin; flood damage across the country; the erosion of valuable, irreplaceable land; pollution of lakes and rivers; slums


in our cities and towns; sprawling suburbs on the outside of every city, completely cutting off recreational grounds and parklands from our citizens. Here we are with a brand new country to develop, and already we have our hands tied behind our backs because we are using half of our strength and wealth and everything else trying to correct the mistakes of the past, without being able to tackle the future.
How much of our energy and wealth today goes into trying to correct these ills of the past? Let us take a look at them. The Department of Forestry was brought into being for practically this sole purpose, because Governments of the past have permitted individuals and corporations to milk millions of dollars from our forest resources, leaving utter desolation behind them; and now we have to go back and pick up the pieces. This was followed, of course, in many areas by attempts to farm improper farmland that could never sustain farming. So we are met with pockets of poverty and degradation that we are going to have to cope with sooner or later. We have seen this put off and put off until finally it has got to the stage where it can be put off no longer. Our Department of Industry was instituted for practically the same purpose, to try and do something with the slow growth areas that are, again, a heritage of our past. The Department of Labour is trying desperately to cope with a situation where we have people flooding the labour market who have neither the education nor the skills to be absorbed back in industry. They are going to try and do something about that, again. There is the Department of Welfare, where so many of our older citizens and some of the more unfortunate ones have to trust themselves to the mercy of the various Governmental agencies that look after this sort of thing, or service clubs or the host of other bodies that are scratching around trying to do a job and not really accomplishing much.
How many Elliot Lakes have we got across this country, where millions and millions of dollars were squandered on a five-year contract, where people were enticed by the thousands to come in, and lost their homes and their life savings, while the companies and the industry were guaranteed their profit within the terms of that five-year contract? Now the latest word we have in the North Country is that to try and correct the mistakes of the past the Government are even going to try and steal the smelters, which
May 4, 1965

should properly go into the Timmins region, and put them into Elliot Lake to cover up for their past mistakes.
At the rate we are going it will only be a very short time before our whole budget will be required to try and correct the mistakes of the past. Right now we have to run like hell to stand still; and pretty soon, no matter how fast we run, we will be slipping back. And all because the growth and conservation and everything else was left in the past to the whim of individuals and the corporations whose only responsibility was to themselves and their shareholders, while the Government, which is supposed to bear the responsibility of the public and the country, have been taking this wealth that belonged originally to the people and have permitted individuals to make great fortunes out of it, leaving desolation behind them, and then calling on the people again to pick up the pieces and try and patch things up. This is the result we have after 97 years of Liberal and Conservative Government. This is the heritage we are faced with today. Each in its turn has evaded this responsibility to the country and the people of the country. Each of them has sounded very progressive w'hen in opposition. I would suggest, Mr. Speaker, that a good idea for the people of Canda, before it is too late, would be to put them both in opposition, and when they both become progressive at the same time there might be some hope for this country in the future.
The Provinces today are showing far more leadership in this field than is our Federal Government. That is why today when you see agreements signed between the Federal Government and various Provinces you usually find they are what might be termed mutual agreements, with the Federal Government playing the part of a mute.


Mr. Regan:: Mr. Speaker, would the hon. Member permit a question?


Murdo William Martin: Certainly.


Gerald Augustine Regan: Would the hon. Member agree that had policies on tax incentives and decentralization, such as have been brought in by this Government in the past two years, been undertaken by former Governments many years ago, the problems of having too many industries concentrated in one area probably would not have occurred? Would he further agree that had that been done at a much earlier stage, there would not have been the need for Provinces to get into the
The Budget-Mr. M. Martin industrial promotion field to the extent that they have in an effort to overcome this lack of Federal policy in the past?


An hon. Member:: This is another speech.


Mr. Murdo  Marlin@Timmins: First of all, Mr. Speaker, I am very, very pleased to see that there is a Member on the Government side who realizes just what are the problems that have accumulated over the years. As far as the faith that he shows in these particular measures is concerned, I am afraid that I cannot share that faith with him; because we had a great conference up in Timmins a little over a year ago about this new incentive business, and there was a lot of enthusiasm generated. It was an excellent meeting and was attended by people from many miles around. The last time I was talking to the representative from the Department of Industry I was told there had not been one single application come in; because once they went into the thing and really examined it, they found it was not really as good as it looked and they were not able to take advantage of it. This is part of the trouble with the measures that have been adopted today.
If we look across the country, Mr. Speaker, we find that the Provinces are showing some leadership in this field. In fact, I get quite excited today with the developments that are going on in the Province in which I was born and raised, the Province of Quebec. If they continue in the vein they have followed for the last couple of years, I would say that in five years time Quebec will be showing its heels to the rest of the country; because they are finally adopting measures that should have been adopted all across the country many years ago. We have an example in New Brunswick in the Bathurst region, which used to be one of the slow growth and depressed regions of the country. Now we see what can be done when industry, Government and the people work together.
But there is one other thing that surprises me, Mr. Speaker. This Government tries to tell us that we are living in a nuclear age and we find that we are budgeting something like $1J billion a year, and have been for a considerable length of time, because we must maintain our defences in a nuclear age; but if they really believe that, why are they continuing to allow industry to cram into tiny areas in our country so they can be wiped out completely with one hydrogen bomb?
910	COMMONS
The Budget-Mr. M. Martin


Mr. Depuiy Speaker:: Order. I regret that I have to interrupt the hon. Member, but it is five o'clock.


Mr. MacNaughi:: Mr. Speaker, if I could have the unanimous consent of the House, I would suggest that the private Members' hour be waived for this day. I understand it has been cleared with the leaders of the various groups and they are in agreement, and it has also been talked over with Members whose private bills might come before the House at this time. Therefore I suggest that private Members' hour be waived for this day.


Mr. Deputy Speaker:: Is there unanimous agreement for the suspension of private Members' hour this afternoon?


Some hon. Members:: Agreed.


Mr. Lambert:: Without prejudice.


Guy Marcoux: Mr. Speaker, I wish to point out that in spite of the position taken last night on the occasion of the division, by the party in power and the official opposition, we agree to the suspension of the private members' hour this afternoon.
tText]


Murdo William Martin: As I was saying, Mr. Speaker, while we on the one hand budget $11 billion a year because we are supposed to be living in a nuclear age, on the other hand we pay no attention to this fact as far as our industrial development across the country is concerned.
[DOT] (5:00 p.m.)
I find this very difficult to understand. I do not understand why more thought for the future, and even for the present, has not been directed toward this particular problem. I cannot understand why we have not embarked on a program to encourage industry to build in areas where the resources exist. Surely they should be encouraged to create a nucleus of industry throughout this country in those areas where the local conditions are suitable.
As an example of what I have in mind, Mr. Speaker, let me remind hon. Members of the tremendous discovery in the Timmins area by the Texas Gulf Sulphur Company. Located in this area are all those things necessary for the development of a great industry. First of all, there is the tremendous ore discovery which would supply an industry with copper and zinc ore for the next 50 to 100 years.

DEBATES	May 4, 1965
Natural gas is available in the area as well as tremendous hydro power and an ample supply of water. In spite of these things, there is still a lot of dabbling taking place in respect of the construction of a smelter some 500 or 1,000 miles away.
Some leadership should be given by the Federal Government so that when a discovery of this kind occurs these people would know automatically that this Government's and this nation's policy is that the industry should be developed in the area of the resource. Not long ago I was talking to a Member on the Government side of this House who indicated that he had visited the Sept lies area and was almost sick when he saw trainload after trainload of raw material being taken out of this country to be processed in the United States or some other place, providing many thousands of jobs in those areas. The same thing is taking place in the Kirkland Lake area as a result of the development of the Adams iron ore mines.


Mr. Moreau:: Would the hon. Member permit a question?


Murdo William Martin: I am afraid that I only have a few moments left at my disposal, but I will be prepared to answer your question after I have completed my remarks.
We must realize that if we are going to do a job of this kind we must change our ideas. We must change our policies, such as the policy which has been in existence for some time in this country in respect of transportation. In this regard the taxpayer reaches in one pocket to subsidize the transportation of raw material, and in the other pocket to pay a superficially high price for the finished product. In other words, the taxpayer is paying to ship the raw material out, and paying to bring the finished product back in.
Such a policy may work satisfactorily in isolated areas where there is only a small amount of raw material which would not ordinarily be developed without the benefit of a transportation subsidization. At the present time such a suggestion in respect of the resources in the Timmins area would be considered as idiotic. No one would contemplate that it would be more economical to ship out that raw material by rail or by road, in spite of the transportation policy in this country.
Let me make it perfectly clear that I am not advocating that the companies that make these discoveries in our country should be throttled. We should recognize the principle that these companies should be allowed to
May 4, 1965

recover their exploration costs. They should also be permitted to make a reasonable and good profit. It should also be apparent to them, however, that the policy of this country is that these discovered resources must be developed in the best interests of the citizens of the discovery area, and of the country in which they have been found.
The Government must provide leadership in this regard. There is nothing whatever in this budget which gives me any encouragement that the Government has considered this idea, or realized the benefits of it and is prepared to carry it out. In fact, in view of all the economic circumstances which now exist in this country, it is my opinion that a Government which brings in this kind of budget at this time in this country should hang its head in shame.


Maurice John Moreau: Would the hon. Member now permit a question?


Mr. Pennell:: Mr. Speaker, I rise on a question of privilege. During the course of the rather interesting remarks of the hon. Member who has just completed his speech, some suggestion was made that I may have attempted to distort the facts. I should like to place on record the statement that I have never had a design at any time to distort any facts in this House.


Mr. Peiers:: You just succeeded by accident.


Mr. Murdo  Marlin@Timmins: In answer to that statement, Mr. Speaker, let me say that I proposed three choices. The hon. Member either did not read the amendment or did not understand it. That leaves only the other alternative, which is distortion.


Lawrence T. Pennell: Mr. Speaker, I respectfully submit that the hon. Member converse with my good friend, the hon. Member for Nanai-mo-Cowichan-The Islands (Mr. Cameron). I am sure that if he does so he will understand clearly why I did not interrupt him during the course of his remarks.


Maurice John Moreau: Would the hon. Member not agree that the iron ore deposits in Labrador would not have been discovered except for the fact that there was a tremendous market in the United States for that ore? I am suggesting to the hon. Member that if the United States steel mills had not invested and explored in that area, that development would not have taken place.


Mr. Murdo  Marlin@Timmins: Mr. Speaker, in answer to that question let me state that
The Budget

Mr. Davis the development was not carried out by United States iron or steel companies, but by the Hollinger mining concern with the money that it made in the development of the gold mining industry in the Timmins area.


Mr. Jack Davis (Parliamentary Secrelary lo Ihe Prime Minister):: Mr. Speaker, I should like to begin my participation in this debate by complimenting the Minister of Finance (Mr. Gordon) upon his remarkable achievements over the past few years. Since he became the Minister of Finance he has managed to balance the nation's financial budget. He has changed the financial picture from a deficit of as high as 10 per cent to a balanced account. Shortly before he assumed his portfolio the Government was spending $110 for every $100 it was receiving, but during the past year he has been able to bring this situation close to the balancing point. If one is at all optimistic about the next year, more optimistic than the Minister of Finance was in his tentative forecast, he will also see a balanced budget for 1965.
It is not my intention to deal with the subject of a balanced budget because that is a secondary consideration. A balanced budget gives confidence to the business community and in respect of our international monetary affairs, but it is secondary to our over-all economic growth.
Unemployment during the last two-year period has been cut in half. That in itself is a remarkable achievement and one which is even more important than the balancing of a budget. Also in terms of our economy we have seen a remarkable rate of economic growth. There was an increase of something of the order of 2 per cent a year in the late 1950's and early 1960's, one which barely kept up with population growth. This rate of growth has been increased to approximately 6 per cent per annum. This is the kind of growth rate that we should maintain.
The Economic Council of Canada has indicated the desirability of maintaining a growth rate over a long period of something of the order of 5J per cent, in order to maintain an increase in labour demand which will accommodate the young citizens of this country who come of age and require jobs. This is something which must be considered in assessing the longer term factors influencing economic growth.
912	COMMONS
The Budget-Mr. Davis
During the remaining time available to me this afternoon I should like to direct my remarks toward the longer term outlook, and to concentrate particularly on scientific research and development. The scientist in his laboratory looks ahead for a great many years. He cannot expect the result of his efforts to be of any significant financial advantage to his employer within months, or even years. In other words, the investment in his time, and the plant and equipment he uses is predicated upon longer term expectations.
In this country we must specialize because of the relatively small size of our population and because, at least for the time being, of the relatively specialized nature of our industry. In the area of scientific research and development we should specialize as well.
[DOT] (5:10 p.m.)
In the current budget, there are measures of tax relief which will apply generally throughout our economy. These are measures which have the character, if I may use the phrase, of a shotgun approach to the stimulation of research and development. That is part of the necessary arsenal, but I also believe we need a few rifles as well. We need a specific approach to complement the shotgun approach of general tax concessions for research and development. In other words, we must also specialize in respect of Government support for research and development.
It used to be loosely said that the main factors promoting growth were land, labour and capital. By "land" was meant those resources which went along with the effort or musclepower of mankind and money. But today most economists agree that what is needed is more than that. We need resources, labour, although admittedly small amounts, and capital or money, but basically we also need ideas. Ideas are the fourth major element of economic growth. Indeed, ideas in the sense of research and development, the stimulation of new ideas and the production of new products and the creation of new and more efficient processes, are more important than man's physical effort. They are beginning to be regarded as more important than new capital in the sense of machinery and equipment. They are beginning to challenge even our basic resources such as forests, minerals, land and so on as the most important factor generating long term economic growth. So I should like to suggest that the industry of ideas is perhaps more important to us than any factor of production in this country, other than the raw resources. Indeed 
DEBATES	May 4, 1965
it is challenging the value of the resources themselves.
We in this country have very few people and consequently we have to try to magnify their importance by generating more ideas and easing the flow of ideas between ourselves, between corporations, between Government and industry in this country. This must be done to increase our long-term rate of economic growth, to make it of the order and magnitude which has been anticipated and set as a target by the Economic Council of Canada.
In addition to the flow of ideas I should like to stress the need to direct this effort in producing more ideas. I have suggested it should be directed in a more specialized fashion, perhaps in some cases toward resource development, certainly toward development in industries which have already shown some indication of success. In other words, we should reinforce success. The Government, as does private enterprise, should consciously direct its research effort more toward those activities in which we have already been successful in the hope and, indeed, the expectation that we will be more productive with the passage of time. We must manage these research and development activities.
One of the great problems in respect of research and development is compartmental-ization. A scientist shuts himself off in a laboratory and he stays to himself. He may generate ideas. He may even communicate with other scientists at great distances and they may have what they regard as a useful exchange of information. But this does not necessarily benefit those around them, certainly those engaged in the production of useful goods and services in their immediate vicinity. We need more communication between the scientist and the development engineer, and between them in turn and those responsible for production. There should also be more communication with those responsible for selling the product and those involved in financing, in getting costs and prices down and expanding output. In other words, the problem common to management of large corporations, of communication between basic research on the one side and increased sales and profitability on the other, must be met. We must try to do this in Canada. We must try to do it in an over-all sense. We must also break down the very obvious and, I think, flagrant compartmental-ization between Government and industry in this country.
May 4. 1965

Much of the research that has been done in Canada has been useful but it has been of the nature of basic or fundamental research. We in this country have specialized much more in basic and fundamental research than is the rule in more industrialized countries, certainly industrialized countries like the United Kingdom, West Germany and even the United States. They have applied the results of basic research but we have not been able to do so to the same extent.
Of our Federal outlays more than 80 per cent go into Government establishments of one kind or another. These Government establishments are rarely in direct communication either with our universities or with industry. It is because of this preponderance of effort in Government establishments, in what are usually called "in house" activities, departmental activities, N.R.C. activities and so on, and the lack of effort and the lack of financial assistance flowing from Government to industry and to the universities for research purposes, that we have failed to distinguish ourselves in the field of applied research-particularly in those fields which would inevitably result in a higher rate of economic growth.
This can be shown in reverse. I think one could even expand it into a tangible recommendation for a research policy. One need only look at the geographical development of research and development activities in a large country like the United States to indicate what should be done. In the most successful research and development complexes you need a university, preferably more than one; you need a government research establishment, preferably several in close proximity to the universities; and you certainly need science based on research and development conscious industries in close proximity to the universities and government research establishments.
There is one such complex in the Boston area. This is the most desirable type of development with universities, government research establishments and research conscious industries all in close geographical proximity one to the other.
Next in line, but less likely to spin off new products, are centres like Ann Arbor, in Michigan, where you have a university or universities and research conscious firms in close alliance with the graduate study departments and faculties of those universities. There are other developments in other places where government research laboratories of
The Budget-Mr. Davis quality have been established in close contact with industry, but for the greatest likelihood of success you need all three. You need universities, government research establishments and industries exchanging ideas one with the other.
In Washington, D.C., there are government laboratories and defence based industries. In Ottawa, Canada, as the result of large Federal investment in laboratories in this city we are beginning to see some science based industries. Those in the electronics field are good examples.
So far as Canada is concerned, as well as following the shotgun approach of tax concessions and grants generally to all industry in respect of research and development, I think we have to decide to promote centres of excellence, similar centres of intensive research and development activity in Canada. At the outset there will not be a very great number. We only have one or two at the present time. We also have to decide how we will specialize in each of them, perhaps a complex with emphasis on forest products research and development in one area, mineral processing in another, oceanography in a third, agriculture in a fourth, medicine in another, and so on.
This specialization is necessary because of our relatively small population and our limited financial resources. It is also necessary because of the basic economics of communication. Ideas which are generated in the universities, in the government laboratories, and in energetic firms with regard to new product development must be kicked around frequently. The opportunity to discuss them and take advantage of the most profitable must be present. It will only come about as the result of winnowing through innumerable ideas and inventions, many of which will never be productive in the commercial sense of the word.
I should like to say a little bit about management in research. Research is like everything else. It costs money and a vested interest arises in continuing that research. Personnel become wedded to the idea that some development will eventually materialize, regardless of the lack of current success. It is, therefore, necessary to bring some of these efforts to an end. Certainly, after five or ten years of frustrated effort other projects should be put in their place.
[DOT] (5:20 pjn.)
There are techniques being developed, certainly in private enterprise, for determining when ideas should be pursued, how long they

May 4, 1965
The Budget-Mr. Davis should be pursued, when they must be cut off by drastic surgery if necessary and when other more productive research undertaken. One type of analysis referred to generally by economists as benefit-cost analysis is sometimes applied. Simplified, it may be put in these terms: What is the hoped for benefit? This might be put down in one column in financial terms, that is the benefits listed out over the years. In another column, you list the annual costs. If total benefits exceed total costs, it is conceivable that you go ahead with the project. However, the benefits must exceed the costs in a ratio which reflects the probability of this experiment coming off. Indeed regard must be had continuously to the possibility of this particular research and development paying its way and, as an alternative, the possibility of paying royalties and getting others to supply the knowledge or know-how must always be kept in mind.
Canada has grown largely as a result of technological developments in other parts of the world, and our willingness to import these ideas and put them to work in a practical way in this country. I hope we will continue to do this, and continue to do it on the largest possible scale. So, in respect of our own research and development efforts, we must frequently look over our shoulder and consider the possibility of paying royalties to others to supply this technical knowhow rather than paying the cost of our own developments. A decision must be made based on the intimate knowledge of the prospects that are immediately before us. These checks and balances, therefore, should exist. Indeed they must exist in respect of our more massive Federal Government programs. I would suggest that this approach be applied soon to atomic energy in this country. We should take a good, hard look at a program which requires $50 million a year from the Canadian taxpayers, more than $2 per capita, more than $6 per family per year, which is a big investment in research and development in any enterprise. This is big league, to say the least. It is an enterprise in which other more financially competent countries, are engaged. It is this type of analysis which we must apply, not only toward big programs but lesser programs. This is the type of analysis which private business must apply in respect of research and development. I suggest more of this hard-headed type of approach should be applied to government research and development, and if it is it will release more money

for Canadian development in the years ahead.
I want to say a brief word about the new Science Council of Canada. We have, if we are following my reasoning, to pinpoint some of these major areas of development and not simply rely on the general tax incentives. We need advice here. I say "we" and I mean both Canadian industry and the Canadian Government. We need to have at the Government's elbow, and periodically releasing reports, an advisory committee like the Economic Council. And our Science Council should be made up not only of representatives of Government, but even more important, knowledgeable people in research and development from universities and from business.


Mr. Orlikow:: Are they going to have more money, or is it just talk?


John (Jack) Davis: This Advisory Council, drawing on its scientific knowledge, should be making recommendations as to what is technically possible. Meanwhile the Economic Council should indicate what research is likely to be economically profitable, to pinpoint the types of development, which should be curtailed and which types of research and development should receive assistance from the Federal Government.


David Orlikow: Would the hon. Member permit a question?


John (Jack) Davis: We should also decide which should receive assistance from Provincial Governments because we have in this country the problem of compartmentalization and a lack of communication between our several levels of Government as well. I trust that the new Science Council of Canada will perform these functions.
We already have in being a Science Secretariat, and that Secretariat will be the Secretariat for this Advisory Council. This Secretariat will work in close concert not only with the Economic Council in respect of economic judgments governing scientific endeavours, but also with Treasury Board in respect of other priorities.
Within Government each department, in my view, should have its own scientific group. This is particularly necessary in areas like Agriculture, Mines and Technical Surveys, Forestry, Fisheries and so on. This is not altogether agreed upon in other countries. In the United Kingdom at the moment they are withdrawing what technically I might
May 4, 1965



call scientific divisions or groups from other departments, and putting them into two newly established departments.
There has been recently constituted a new department of education and science and a new department of technology. The basic research activities and information activities go to the department of education and science. All other technical research and development go to the department of technology. In my view, this is a retrograde step. I think that scientists who are specialists in agriculture should be in the Department of Agriculture. I think scientists, like economists, should be distributed amongst the departments. Those who specialize should make their specialized knowledge available to the departmental officials responsible for administration and policy. Each Minister, in turn, will be better advised from a purely scientific point of view.
This raises the awkward question of coordination. It raises the awkward question of priorities. This is where the new Science Secretariat, advising the Science Council, can make its major contribution. It is interesting to note that in the United States, particularly since the late President Kennedy's election as President, there has been a science advisory council established there. Indeed, it is loosely referred to in Washington as the "inner sanctum for science". The President's scientific adviser is very close to the President. He has a small staff of 19 members. These men are men of broad experience, not necessarily scientists and certainly not practising scientists, but men with a general understanding of the usefulness of science. These men each cover broad general areas. In respect of water resource development, for instance, there is one man who looks at all scientific matters relating to water. He draws information from a great many departments-agriculture, the interior, the United States Corps of Army Engineers which is responsible for flood control, navigation and so on. This information is co-ordinated and priorities are established. They are established, first, with regard to the technical possibilities by this science secretariat and the last judgment is made by the bureau of the budget which, after getting advice from this scientific advisor decides which of these research and development activities shall proceed and which shall not.
[DOT] (5:30 p.m.)
I think in Canada the time has long since passed when we could do without a Science Council. We have had councils of different
The Budget-Mr. Davis types allied with the National Research Council. Initially they were set up to take a broad look, not only at Government activity but at research activity in industry as well. But they have tended to focus onto basic research, and in particular the activities of the National Research Council. They have not performed the function of co-ordinating and setting priorities, which the new Science Council will be asked to do.
It will use this permanent Science Secretariat which is being built up at the present time. This will be its staff, and the Science Secretariat at the same time will on occasion be the science staff for the Economic Council, and more particularly for the budget making officers in the Canadian Government.
I have referred very briefly to the organization of scientific matters in the United Kingdom and in the United States. In Sweden there is one central advisory council. The Prime Minister is the honorary Chairman of that council. This indicates that country's determination to make science and technology a subject of intimate knowledge to the top political level there. This has been eminently successful, and it parallels the recent United States practice.
It is at variance, however, with the current practice in the United Kingdom where basic science is being compressed into one department, technology into another department, and all other departments are left high and dry so far as an intimate knowledge of scientific affairs is concerned. I think Canada must avoid such a course.
Again I stress the need for communications. This is basically the industry of ideas. These ideas have to flow between people in different activities, in research, industry, sales and finance. They have to flow between governments and different levels of government, and hence communications are very important.
We need direction in the sense of specialization, particularly in a country like Canada, with a limited population and limited financial resources. We need specialization, not only backing up our more successful and profitable resource industries, but those of our industries which, because of tax and other assistance, show success. We need specialization in areas of development such as this which, because they have shown we can break through and lead the pack for the time being, can stand further encouragement and provide more income and employment for this country.

May 4, 1965
The Budget-Mr. Davis
As to the particular Minister to whom the Science Council should report, I am not so certain. It could report for the time being to the Prime Minister. It could report to the President of the Treasury Board, as recommended by the Glassco Commission. But this Science Council must certainly have a loud voice in Cabinet. It should have through that Minister, whether he be the Prime Minister or one of the other Ministers, a Minister who in effect acts as a sort of spark plug not only with the Government but in setting policy with respect to research and development in industry as well.
In this country, and indeed throughout the world, we are seeing time being compressed and space being compressed. We are seeing the industry of ideas growing at a rapid rate. Research and development is growing at an annual rate of 10 per cent in the United States. In this country we will do well to keep our expenditures on research and development rising at that rate. We must not emphasize, however, too much of the Government approach.
We need more activity in industry, in the applied fields, and particularly in universities, and it is in these second and third areas we need the greatest effort. There the annual growth rate in respect of research and development must be more like 25 per cent. This is the figure to which the Minister of Industry (Mr. Drury) referred recently, in respect to hoped for private industry investment in research and development-25 per cent. These, then, are some of the targets.
I compliment the Minister of Finance upon his general approach in respect to tax measures designed to encourage more research and development. This is the broad shotgun approach. But we still need decisions which focus upon specific industries, specific areas, and specific products. This more specialized approach, this rifle aiming approach, will be necessary in order to supplement our great effort in research and development.
In other words, I have been advocating a two pronged approach to research and development. If we take this course, and the Minister of Finance, the Minister of Industry and the Ministers responsible for all our other resource industry departments cooperate, we will achieve some of the economic targets which the Economic Council sets out for us in the years ahead.


David Orlikow: Would the hon. Member permit a question? Could he tell us what the Science Council or the Scientific Secretariat
should do to bring to the attention of the Government the fact that medical research funds, which have been coming from the United States, have been cut very drastically in the last year, and that the Medical Research Council has not been able to come anywhere near meeting the reductions that have been made, with the result that a large number of research people in Canadian universities will have no alternative but to move to the United States this year?


John (Jack) Davis: Certainly I think the Science Council of Canada should be concerned with the amount of moneys forthcoming to support research, be it basic research or applied research, be it in fields like chemical engineering or medical research. These deficiencies will continue. However, the Science Council will make us more aware of these deficiencies than has been the case in the past.
I know the Minister of Finance has been struggling with this particular problem and I hope he will be able to give us some answers soon.


David Orlikow: As a supplementary question-


Mr. Deputy Speaker:: Order. The hon. Member's time has expired.


Mr. Heath Macquarrie (Queens):: Mr. Speaker, many things have been said about the Minister of Finance (Mr. Gordon), some complimentary, others not. I would like to compliment him in one field in that he has driven more of his colleagues to the path of classical quotations and allusions than any other Member of the House. I have heard many people quoting the expression that the mountain was in labour and brought forth a mouse. I notice the hon. Member for Pictou (Mr. MacEwan) used a version of it from Horace last night.
Following in that vein I went back to read Phaedrus, and his version was as follows, "The mountain was in labour sending forth dreadful groans and there was the highest expectation throughout the region, but it brought forth only a mouse."
I recall the speculation in the press about what was going to happen, and comparing it with the reality I can understand why our colleagues headed in this direction. I found nothing in this afternoon's discussion from the opposite side which would lend support to the view maintained by the Minister of Trade and Commerce (Mr. Sharp) that this document would make a good election budget. I
[Mr. Davis.)
May 4, 1965

do not know if he is unique in that point of view, or whether this is one of the times when it is not popular in that quarter of the House to suggest elections-this prompts me to recall another allusion to another great classical day, the time Horatius maintained the watch on the bridge. I remember this reference to the forces across the Tiber:
But those behind cried forward And those before cried back And backward now and forward Wavers the deep array.
The Minister of Forestry (Mr. Sauve) has been talking about the old guard and the new guard. Perhaps it is not that in the Liberal Party, but a rear guard and a front guard. The rear guard wants to go forward and the front guard wants to go back. I do not know; it is not for me to decide.
I notice one place in the budget address where the Minister of Finance came very close to modesty and suggested that there were some questions for which he did not know the answers. I refer to his statement at page 432 of Hansard for Monday, April 26 when he said:
It is evident, however, that more needs to be done in financing higher education in Canada, though just what should be done and in what way are unresolved questions.
[DOT] (5:40 p.m.)
This is a statement of invitation for suggestions, and some hon. Members of the House have put forward very useful and helpful suggestions. The seriousness of the subject cannot be overestimated. As the Minister of Forestry said in his famous Bowmanville speech, "Education was and still is the key to everything else." To that part of his speech I subscribe completely. Much more must be done in all the categories which the Minister mentioned on budget night-technical and vocational training-(that great project of the ingenuity of the hon. Member for Ontario (Mr. Starr)) university grants, loans to
The Budget-Mr. Macquarrie C.M.H.C. for building student residences and grants for scientific research. Much more must be done in all these fields. We all recognize this. The figures setting out what we are doing are seemingly large, yet they amount to only about one third of 1 per cent of the total of our federal spending.
One field is open to immediate improvement. There should be a quick alteration of the figure relating to university grants. It will not be necessary to await the Bladen report or anything else. The grant per capita must be raised from $2 to $3 to bring it somewhere near modern needs. I was impressed by the speech of the hon. lady from Saskatoon (Mrs. Jones) the other day. She drew attention to something that is very important, namely that university grants are geared to the population of the country, which grows by about 2 per cent a year, while university expenditures are related to the university population which is soaring at the rate of 11 or 12 per cent a year. The figures with regard to this are challenging. Grants in 1962-63 amounted to $26,300,000. In 1964-65 they were $27,264,000. This does not represent a substantial rise because these amounts are geared to population. However, the number of students in the universities rose in that period from 88,751 to 113,111, so the amount per student actually declined from $297 to $241 a year.
I have a brief statement here, Mr. Speaker, showing figures for all the Provinces. If I were to be given unanimous consent to have this inserted in Hansard, it might be helpful.


Mr. Deputy Speaker:: Is it agreed that the table referred to by the hon. Member should be inserted in Hansard as part of his speech?


Some hon. Members:: Agreed.


Heath Nelson Macquarrie: Thank you, Mr. Speaker.
[Editor's note: The table referred to above is as follows:]
May 4, 1965

The Budget-Mr. Macquarrie
CANADIAN UNIVERSITIES FOUNDATION UNIVERSITY GRANTS PROVIDED FROM FEDERAL FUNDS 1962/63 TO 1964/65
($2.00 per head of population)
Population (DBS) 1961 12,941,410	1962 13,165,000	1963 13,389,000	1964 13,632,000Province	Grants	Students	Amounts per student to nearest dollar	1962-63	1963-64	1964-65	62-63	63-64	64-65	62-63	63-64	64-65B.C.	3,318,000.00	3,390,000.00	3,476,000.00	15,159	16,516	17,958	219	205	194Alta.	2,740,000.00	2,810,000.00	2,864,000.00	9,379	10,446	12,517	292	269	229Sask.	1,860,000.00	1,866,000.00	1,886,000.00	6,907	7,652	9,456	269	244	199Man.	1,870,000.00	1,900,000.00	1,916,000.00	7,583	8,516	8,892	247	223	215Ont.	12,684,000.00	12,896,000.00	13,172,000.00	35,185	39,964	46,778	360	323	282N.B.	1,214,000.00	1,228,000.00	1,234,000.00	4,892	5,143	5,759	248	239	214N.S.	1,492,000.00	1,512,000.00	1,520,000.00	6,943	7,505	8,297	215	201	183P.E.I.	212,000.00	214,000.00	214,000.00	705	734	802	301	292	267Nfld.	940,000.00	962,000.00	982,000.00	1,998	2,244	2,652	470	429	370National average:	Totals:	$26,330,000.00	826,778,000.00	827,264,000.00	88,751	98,720	113,111	297	271	241


Heath Nelson Macquarrie: I hear one of my hon. friends suggesting I should table the whole speech. However, I believe that is a refinement confined to the House of Representatives in the United States. Whether or not they accomplish more there than we do in this Parliament I do not care to investigate, in case I should arrive at a conclusion which is not favourable to us.
The problem to which I have referred is an urgent one and I am glad so many hon. Members have mentioned it during this discussion. Even the Minister of Finance (Mr. Gordon) referred to it. We in the Maritimes face it in a particularly acute way because so many of the students at our fine institutions come from parts of Canada other than the Atlantic region. This shows their good judgment, but it leads to severe demands on the administrators of our universities. Nova Scotia has been referred to by the hon. Member for Digby-Annapolis-Kings (Mr. Nowlan). We in Prince Edward Island require an immediate expansion of our facilities because we, too, are facing a serious problem. I should like to suggest that a special program of assistance for the Maritimes based on the same kind of thinking that went into the Atlantic Provinces Adjustment grant in

1957 should be put forward in relation to this important field of human resources, the training of our young people. This would be an ad hoc, interim step. Then there should be further moves to bring the full strength of the nation into this drive to develop our human resources. I am sure the people of Canada are pragmatic and practical enough to be able to find the means of massing the resources of the nation on behalf of education without any painful trespass upon Provincial rights. I am told the opting out formula, about which there has been much discussion and misunderstanding, might be adapted as a useful vehicle for this vital operation of national self-help for, as the President of the University of Toronto, the second greatest university in Canada, said in Halifax the other day:
These are days when abnormal growth without adequate nourishment may lead to a pernicious intellectual anemia that not even the splendors of the Expo ('67) can conceal.
This I believe was before the torch was put out.
I said earlier that my speech like Gaul would be in three parts. I should like now to refer to something the Minister said early in his speech with reference to the Govern-
May 4, 1965	COMMONS
merit's economic objectives, as the hon. gentleman called them. To use his words, "we wanted a better regional balance in both employment and growth". I say to him, or I would say to him if he were here, that he has no reason to assume that this has been attained. Far from it. In the Atlantic region of Canada unemployment is twice as high as it is in the rest of Canada, and our per capita income still lags about one third behind the rest of the country. The latest D.B.S. figures show that as of February 20, 1965, the unemployment figure for the Atlantic region was 13 per cent. In the previous year it was only 12.7 per cent. Thus, while there was a decline nationally the figure for our region actually rose in the one year period. The latest statistics we have show the figure for all of Canada, the Canadian average, standing at 5.6 per cent. Incidentally, this compares not so favourably with the 3 per cent to which the Secretary of State (Mr. Lamontagne) referred this afternoon as being one of the goals, and a good goal, of the Economic Council. However, the national average is 5.6 per cent, while unemployment in the Atlantic region stands at 13 per cent. It is in this light we should consider the statement that "we wanted a better regional balance in both employment and growth."
Are we in the Atlantic region to accept a situation where one in eight of our people are to be considered as chronically unemployed, with no hope but to move to other areas such as Toronto where the figure is 3.1 per cent? I have not heard lately whether the Minister still believes, as he did when he put forward the report of the Royal Commission on Canada's Economic Prospects, that our travel to one of these better-off areas should be subsidized.
I submit that in Prince Edward Island this Government has done things which have been positively harmful to the employment situation. The closing of H.M.C.S. Queen Charlotte, a fine new building, naturally had its effect. The drying out of sub-contracts for the Enamel and Heating plant in Charlottetown caused unemployment which was significant and painful to that city and the surrounding areas. I notice that even in the realm of administration we are losing employment, jurisdiction for lighthouses in the Charlottetown marine district having been transferred to the Newfoundland district. We require now, as we have done for some time, massive help and a higher priority
DEBATES	919
The Budget-Mr. Macquarrie than has been given since the days of 1957 and 1958 when special grants were made available, when special interest was taken in a part of the country that had long undergone economic disadvantages, many of them resulting from the location of the region, and many indeed from Confederation itself.
[DOT] (5:50 p.m.)
The Government and the Prime Minister are sometimes criticized for imitating the Americans in their war on poverty. I do not think we need worry about such imitations; we have been doing it for a long time. I would suggest that they imitate them still further, launch something like the Appalachian blitzkrieg, and try to deal with some of our long standing, Atlantic economic injustices. In a spirit of helpfulness, Mr. Speaker, I will suggest one or two things which they might do. I would suggest that they start moving surely, swiftly and authoritatively by way of an announcement and commitment in regard to the construction of the Prince Edward Island causeway. I would suggest that they start moving, too, on the corridor road, which would do a tremendous job in improving-


Mr. Francis:: Mr. Speaker, would the hon. Member permit a question?


Heath Nelson Macquarrie: I think the hon. Member realizes the hour, Mr. Speaker; but when my time is up I will be delighted to entertain his question. I think it is known how much the corridor road would do to diminish our transportation difficulties. The State of Maine is interested, the Province of New Brunswick is interested, the Province of Quebec is interested. Would it not be a helpful thing if some agency of the Federal Government showed some interest? Perhaps even a royal commission could be appointed, since there is such a proclivity toward such activities.
I say, too, that we must take some action in the Maritimes with regard to the small farming areas. I think these areas of the Maritimes are, as I have stated, ideal for an expansionary and imaginative program under ARDA. Let us put this into action. I would make a practical suggestion. The Minister made reference to it the other night in connection with the storage facilities for grain, and it is to be found at page 436 of Hansard. Those who grow grain are important. Those who grow potatoes are also important. They, too, build storage facilities. They, too, could be given the same kind of useful consideration that was mentioned. That will be helpful to the in-
May 4, 1985

The Budget-Mr. Macquarrie dustry, and I would suggest that this consideration be given.
If the hour were not so advanced, Mr. Speaker, I would give the Government many suggestions, because I do not believe in keeping good ideas to our own side of the House. Since I am long in faith and perhaps shorter in experience, I send them over in the hope that they will be acted upon. It is easy for Maritimers to talk about Maritime rights; we have done it for so long-but any nation is only as strong as its several parts. Confederation was many things; but one that it was, surely, Mr. Speaker, was the sharing of advantages and disadvantages, economic and other kinds. All our disadvantages do not stem from the Act of 1867, or 1873 in the case of my Province; but some of them do. I say this, not in a partisan sense at all, but the people of our region gained new hope in 1957 when in this era efforts were made by the national Government to redress century-old wrongs, to turn the attention of the whole nation to one of its parts which required special consideration, if only under the concept of long-delayed justice.
Perhaps, although we Maritimers are very wise, so other people say, we lost some of our initiative in the early days, when I consider the way in which we who were in at the very beginnings saw the expansion of all the other Provinces up into the vast northland and we, whose boundaries were complete at the time, sat by and let this happen. Indeed, if one would look at the map of 1867 he would see the boundaries of the then four Provinces; and if we look at what has happened since then we might find that from geography would come a lot of political and sociological truths that we should have seen long ago. It is very rarely in this House of Commons that anyone has ever looked upon this. We talk about the resources and the development of the North, but our people were also involved in the development of these things. So when we asked for subsidies, when we asked for considerations such as those that were given in 1957, we approached the national Government, not as mendicants, not as suppliants but as people who saw in the Confederation process a constant need for readjustment, for a new look, for rearrangement, for the old fashioned word that seems not so popular now-equalization -and a recognition of fiscal ability and fiscal need. These were the kind of things that were talked about in the days of the Rowell-Sirois investigation. Now the cliche seems 
to be co-operative federalism, which is interesting and important, if we all know what it means. I say it is the role of the national Government to move courageously and wisely to bring about something like economic equality of opportunity for all Canadians.
There is one final, very important part of my talk, Mr. Speaker. No nation can be strong economically if it is weak politically. Economic institutions are grounded upon the political institutions, and it is only right and proper that Members, such as the hon. Member for Brome-Missisquoi (Mr. Grafftey) and others, should look in this debate at some of the great questions facing our political institutions, and into our political society itself. We live in an era of the denigration of Parliament, of excessive Provincialism, of uncertain and lacklustre national leadership. The B and B Commission talks about a crisis in our relations. Many Canadians are genuinely concerned, the thoughtful ones at least, as to whether the cohesive forces in our country are sufficient to hold us together; and they would be very imperceptive if they were not concerned. It requires that we look at the national scene, that we look at our problems and that we do not anaesthetize them by platitudes on the one hand, nor on the other scarifying them or irritating them by chauvinism or sectionalism.
Many of us have been greatly stirred, greatly encouraged, by what is referred to as the social revolution in the great, old Province of Quebec. Many of us, too, have seen the increased voice of Quebec's leaders in national affairs. Many of us have been stirred to a new consciousness by some of the problems they face. It was a shocking thing, for instance, that our great manual, Beauchesne, written by, I presume, a French Canadian, should for years have gone through edition after edition never having been translated.
Mr. Speaker, may I call it six o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Mr. Cowan-External Affairs-Boundary waters-Request for definition concerning governmental works.

At six o'clock the House took recess.
May 4, 1965



COMMONS DEBATES AFTER RECESS

[Stage Direction]
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.
Heath Nelson Macquarrie: Mr. Speaker, as I said before dinner, I am one of those who is dedicated to doing everything possible to assist in every way possible French Canada to attain a more meaningful and fuller place in Confederation, one prepared to recognize the justice of complaints and value and virtue of the grievances which the leaders of French Canada rightly bring to the attention of the nation as a whole. I would not wish to prolong the two solitudes approach to the fulfilment of our national destiny. I think the expression "two solitudes" is an apt one-a sadly apt one. I will never support, by word or deed, that which in modern and somewhat unsavory jargon can be called the backlash. I would rather end my modest political career immediately and forever than be a party to such a nation-destroying and Can-ada-defeating role or attitude. I believe that a better Quebec means a greater Canada.
I take second place to no Member from English speaking Canada in my desire to learn to understand and to know the problems of our fellow Canadians whose language is French and whose background is different from mine. Yet, Mr. Speaker, I would be less than candid if I did not say that, out of the wellspring of my feeling in this regard, I am troubled by some recent developments in that area of French Canada. My anxiety exists, not because of the reaction of extremists nor the extreme actions of the terrorists, nor from the violence of isolated incidents, nor the exasperated minority which preach a drastic form of separatism. Anyone who knows Canadian history knows that down through the years we have had separatists and we have had some occasional violence. My political ancestors of 1849, threw unpleasant objects at the Queen's Viceroy, Lord Elgin. This was followed up with the suggestion that we should join the United States. Some of the people of that day became politicians, while others went into something
The Budget-Mr. Macquarrie better, or more lucrative, and became brewers. We had Joseph Howe, who was determined to lead Nova Scotia out of Confederation; and 20 years later we had Fielding who worked his way into power by pledging that Nova Scotia would go out. Of course, this did not follow. British Columbia was somewhat restless in those early days. It is not only British Columbia of 1965 that was controversial. We on the Island were still for keeping on the cautious side, but at one time we used to say that if we had our chance to move out tomorrow, we would take it. We have, however, never taken the drastic action of doing that.
My anxiety is not with extremists, but with those who claim to be the moderates. I want to help build a bridge of understanding, but one cannot build a bridge of understanding if the opposite bank disappears. I am troubled and concerned about recent utterances from responsible people in Quebec who suggest that the activities and jurisdictions, well established in the national field, should be pre-empted by Provincial authority. I read that the Minister of Labour suggested that unemployment and the placing of workers should become a Provincial responsibility. The equality of job opportunities for all Canadians I think is an essential of the good society and of a united Canada.
I read where Mr. Eric Kierans suggested that there will be a terrific battle at the forthcoming Provincial-Federal conference over Ottawa's banking policies. I would urge the Minister of Finance (Mr. Gordon), for once in his life, to be firm and hold to his opinion regarding the necessity of financial institutions of this kind being national institutions.
I read also about housing being assumed, by the appropriate Minister, as being an exclusive field of opportunity for the Province of Quebec. We all have heard the utterances, and I hope they were misquotes and overstatements, of the education Minister in reference to treaty rights for the Province of Quebec.
I do not think any of us, and least of all I, would want to diminish by one jot or tittle the rights of the Province of Quebec. It is a great Province, and in many ways a unique Province but we cannot go on diminishing the national entity and continue as a great national state.
We want the people of French Canada to have their full say. We want to hear their grievances, and they do have some. We want
922	COMMONS
The Budget-Mr. Macquarrie a partnership, but if in place of a partnership we find that there are those leaders in responsible positions who prefer not a partnership, not equality, but withdrawal, it makes it painfully difficult for those who want to do nothing more than extend the hand of fellowship and the hand of friendship to try and compensate for past failures, misunderstandings and inequities, and there have been some. We want to move forward together and recognize that there are economic inequities which Quebec has suffered. As a Maritimer, I have great understanding of what Quebec has gone through. They have not received their proper share in many fields. There must be a united effort in this regard.
I have described myself in this House before, and I retain that description of myself, as an anti-separatist. Let us move closer together. Let us discuss these problems. Let us not say that at this time of national sensitivity there should be pre-emption of more and more fields by Provincial authority. Perhaps economically Quebec can pre-empt these fields, but other provinces cannot. Other provinces do not wish to do so. What will become of the great national entity if one significant part of it, no matter what its culture or language-(that is not the significant aspect of this discussion)-decides to go it alone? I suppose no one would think of stopping anyone from going it alone, although Nova Scotia found some years ago that it could not.
9 (8:10 p.m.)
I hope the Prime Minister (Mr. Pearson) will be more forthcoming than he has been before in his reports of discussions with the Premier of Quebec. 1 hope that the statement of the Secretary of State for External Affairs (Mr. Martin), unique as it was in its clarity and decisiveness, will serve as a standard around which this Government will rally, not in coercion, not in narrowness but as an expression of Canadianism, of nation building and of clarity in this important phase when provincialism in my opinion is rampant and the national identity gravely undermined. I should like to conclude my few words with a quotation from a great international lawyer under whom I had the opportunity of studying at McGill University in the great and colourful City of Montreal. Dean Maxwell Cohen wrote in today's Gazette:
Mr. Pearson and Mr. Lesage would do well to meet as soon as possible and to agree on what it is that will be most helpful to Quebec looking for new links to the French speaking world; pro-

DEBATES	May 4, 1965
viding, however, that there are safeguards to Federal Canada as the only "sovereign" Canadian state known to the world-and to France. Not to find some proper answer would have us drift into an "associate state" situation or quasi-separatism by the back door of loose practices when today we are trying to find better formulas for the New Quebec and the New Canada through the front door of the Canadian constitutional dialogue.
I say, Mr. Speaker: Let that front door remain open. Let the hand remain extended. Let the dialogue-that is the fashionable word -continue. But let us implore those who would depart to think twice and to hesitate. No one wants the people of any part of this great country even to prepare themselves in thought for separation from the rest of us because the whole and the parts will both suffer grievously thereby.


Mr. Gerard Chapdelaine (Sherbrooke):: Mr. Speaker, even if we had the opportunity to do so, our party would not introduce any amendment to the motion of the Minister of Finance (Mr. Gordon) on his annual financial statement, since we do not believe that such a procedure would be conducive to the expansion of the Canadian economy. It would be a negative gesture that would only serve the political aspirations, often unspeakable, of those who use them.
I intend to analyse briefly various provisions of this budget and also to expose the hypocrisy shown by certain opposition parties in this house during the budget debate.
I would like to deal first with this last suggestion which is rather humorous and would not bear the cold analysis of the figures presented in the budget.
Last night we had the opportunity to vote on a motion of non-confidence introduced by the Conservative party. As you already know, we members of the Social Credit party have, as a group, supported the present government. Before this vote was taken we had made known our intention to support the government because we do not believe in the outmoded procedure used by the various opposition parties every time they have the opportunity to do so.
It is strange to note that during a previous vote a large majority of Conservative members were absent from the house because they did not know if at least one of the opposition parties would support the government so it would not be defeated. But yesterday the situation was different, because we had made it known that we would support
May 4, 1965
the government. We saw in the house most Conservative members who did not hesitate to vote against the government and jeered at us because we were supporting it.
I feel that is the most obvious display of chronic hypocrisy from the old guard politicians with regard to the administration of this country's business, which they neglect to make fantastic turnabouts. Had there not been seven responsible opposition members in the house last night the government would have been toppled by a vote of 107 to 104 and today, we would be in the midst of an election campaign.
It is not an election campaign which would have been disastrous but the discomfiture of those government and opposition members who want anything but an election. The Canadian people are certainly not interested in going back to the polls in the present circumstances, and I wonder what political parties in the house at the present time would be bold and daring enough to pretend that they would gain public support should an election be called in the near future.
If, on the occasion of the budget debate, we go into a detailed study of our political situation, starting with the party in office, we readily realize that the Liberals have not had time to recover from the scandal brought forward by the hon. member for Yukon (Mr. Nielsen) and that they find themselves with quite an awkward cabinet. Then, they were immediately compelled to get rid of the youngest minister whose taste for horse races compares only with Lucien Rivard's boldness. To offset such a situation at election time, the Minister of Finance should have sought inspiration from the monetary reform advocated by the Social Credit; but instead of that, he came up with a budget which is neither fowl nor fish and which in no way can make us forget the series of scandals which rocked the Liberal party.
The situation is even more ludicrous within the Conservative party which has been singing for some time now a modern version of an old song. The omnipotent Leader of the Opposition (Mr. Diefenbaker) continues to lose his grip on Canada where, in his opinion, the province of Quebec is no longer existent but where candidates from all quarters are lining up to take over a leadership which, because of him, has become pitiful. If the present Leader of the Opposition is serious when he is clamouring for an election in order to instil new life in the country's economy, then it is more serious than I
The Budget-Mr. Cha-pdelaine thought, for I would say this is a sadistic attitude. It is really sadistic to want to drag down with him all that remains of a career which ceased to glitter a long time ago.
Perhaps the New Democratic party was hoping for an election before it realized that the Conservative party had left in Ontario a vacuum which it can no longer hope to fill because the voters would probably elect independent candidates who would be a better reflection of the parliamentary image of integrity which all Canadians expect from politicians. I think that the New Democratic party, by associating itself with old-line parties when voting on non-confidence motions and also by its absenteeism when they could not forecast the results of the vote, has fallen into the trap of parliamentary hypocrisy and that the people will not forget it.
[DOT] (8:20 p.m.)
It is very hard for me to find a reason which would justify the attitude of the Creditistes on those non-confidence motions, since this group of men, that I cannot call a party, has not been elected as such, this grouping of men, as I say, has lost ground m the province of Quebec and there is no hope for them to be re-elected to this house.
As for us, Mr. Speaker, I repeat that we are the only ones who acted responsibly by supporting the government and by avoiding an election that would have settled none of the problems which we must face in this parliament and which we want to solve for the benefit of all Canadians. I think this attitude of responsible men who refuse to indulge in childish games, like the one served on us in the form of non-confidence motions, will be recognized by the people and appreciated throughout Canada.
I cannot help but mention that I saw a number of happy faces among the members of the opposition after the vote last night. It is not due to any lack of admiration, but rather out of sheer embarrassment, that they refrained from showing us openly their deepest gratitude.
While we do not think that such non-confidence motions are apt to improve the admiration of Canadians, we feel that it is essential to make positive suggestions so that, in the next budget, they may be taken into consideration and even implemented, if it is found advisable.
The budget announces a 10 per cent income tax reduction which is completely inadequate and does not benefit the lower brackets.

May 4, 1965

The Budget-Mr. Chapdelaine
If, instead of granting a 10 per cent tax reduction at the present level, the government had increased the exemptions to $4,000 for married people and to $2,000 for single persons, this would have affected all that low income category where such tax reductions are really needed, and this would have been the first step in the war on poverty that the government plans to launch in the near future.
To meet the deficit involved by such a decision without causing any dislocation, the government could easily have raised the tax scale for those earning over $4,000 a year, because they are not as acutely affected by the iniquity of a too heavy tax burden.
There were some other commendable proposals in this budget, such as the Canada Development Corporation, patterned after the General Investment Corporation of the province of Quebec and I commend the Minister of Finance for having taken from Quebec another brilliant idea of which we are capable. I am sure that all Canadians will be proud and happy to become shareholders in such a corporation, because they will have the satisfaction of participating in the development of our country and in the investment of Canadian capital on Canadian soil.
There are also the other measures respecting foreign periodicals and newspapers, agriculture, industry, scientific research, etc., all of which contain some good and which we will be proud to support after discussing them in this house.
In closing, Mr. Speaker, I would like to recall that on the occasion of such a budget speech last year, I had directed to the Minister of Finance a question which remained unanswered. I do not know whether the Minister of Finance (Mr. Gordon) did not have time to answer, or was afraid to answer or if it was merely through unconcern for the financial problems this country is now facing, in short, I do not know the reasons why he did not even deign to show interest.
He is undoubtedly aware that the service of the Canadian debt has now reached the unprecedented level of $1,100 million, which represents a $62 million increase for the last fiscal year, and I do not see anything announced in the budget to correct this alarming situation.
It is quite normal that when one borrows money, one must pay the interest to his lender when it is in the field of private enterprise. But when the government borrows for public investment purposes, that is for

non-productive investments, why does not the Minister of Finance think of finding the necessary credit to finance public utility investments on which he should not have to pay any interest since the investments themselves do not yield anything.
It would be very easy for the Bank of Canada to create new credit for the implementation of those public utility projects, in proportion to the amounts required for investment in that field and without the government having to pay the bank any interest on the credit thus created.
To prevent that supplementary credit from giving rise to inflation, the Minister of Finance would just have to tell the Bank of Canada to reduce the margin of credit the chartered banks are allowed to create on the basis of their deposits with the central bank, in other words, to reduce the amount of credit available to private enterprise in proportion to the increase in credit for public utility purposes.
That way there would be no inflation, we would no longer have to pay interest on new loans and, gradually, we could get rid of those debt charges which now amount to $1,100 million.
That is the suggestion I made to the Minister of Finance last year and I repeat what I said at that time: If you can prove that my proposals do not make sense, then I shall refrain from making such recommendations.


Mr. Herman Laverdiere (Bellechasse):: Mr. Speaker, on Monday of last week all Canadians the least bit interested in politics were wondering what would be in the budget now under consideration in the house. I did not find therein all I would have wished for, but I realize the complex nature of a budget which affects every Canadian.
[DOT] (8:30 p.m.)
What did the Canadian people expect from the budget? What made them say that such a change, such an improvement, such a tax cut was needed? It is quite normal that the general public should judge a budget according to what they get from it or what it takes from them. However, an increase or a reduction in direct or indirect taxes must not be made without taking into account the general economy.
Canada, especially in the last few years, has experienced a fast economic growth which will continue-according to every forecast- and this will benefit the population as a whole.
May 4, 1965	COMMONS
I am very happy to note that growth which,
I hope, will be beneficial not only to one segment but to the whole population.
It is a growth budget, they say. I rather think that this is the prominent feature of the budget, since it fosters great hope for the establishment of new industries, especially in less favoured areas, for some special assistance to industries already established in underdeveloped areas, for an increase in capital invested in various concerns, in short we hope that the whole economy, especially the farming area, will benefit from that growth and we expect an immediate effort in order to alleviate hardship prevailing in some areas of the country.
I hope, Mr. Speaker, that all possible and special attention will be paid those underdeveloped areas and that efforts will be centred toward reorganizing the economy of those areas where the people do not yet take advantage or full advantage of this expansion we have been hearing so much about for a few months.
We are told that, throughout the country, the income and the standard of living are increasing rapidly, that there is considerable industrial development and that unemployment is decreasing. That is what we hear, that is being repeated, particularly of late.
Evidently, that is the case as far as the majority of the population is concerned; none the less, thousands of families in the poorer areas are frustrated, and it is high time that they enjoy this economic growth and that they do not feel as if they were forgotten Canadian families.
That is also the case of the whole region I have the honour to represent, particularly the northern part of this country and other adjoining counties, where a short visit would suffice to convince some of those responsible for putting these policies forward to forget their theories which they seem to consider as corollaries. Certain general reports coupled with some statistics may seem to indicate that a given situation is really what we think it is. However, a closer examination, for instance of the true average income of farm workers and others, in a given area, will readily show that the average income may be very low. Obviously, it is then necessary to adjust the economy of such areas where the people as a whole, and rightly so, seem to wonder if they are not really being ignored.
There is obviously quite an imbalance be-
DEBATES	925
The Budget-Mr. Laverdiere
In 1964, while the gross farm income in marginal areas was going up less than 1 per cent, the net income was decreasing by more than 6 per cent. When the average income of farmers in a given area is between $1,200 and $1,500, it seems superfluous to call for immediate action; yet, Mr. Speaker, we are still begging, as if those were not facts or as if they were the product of a limited knowledge of the situation as it exists, or if they were exaggerated for the sole purpose of obtaining assistance in an area where the people are closer to us. However, there is nothing in such allegations. The facts are there.
The farmers in Bellechasse, Mr. Speaker, just like those of other underdeveloped areas, do not ask for charity. They only ask to be treated on an equal footing with all other Canadian workers. They only ask to be able to earn from their farms-and I am speaking here only of the full time farmers- a larger and more stable income, so that their living and working conditions may compare with those of people engaged in other sectors of the economy, as mentioned in the speech from the throne.
I hope that the recommendations contained in the speech from the throne will be implemented as soon as possible.
Mr. Speaker, one cannot blame the farmers for finding that the government hesitates too much in introducing the required farm legislation.
The shy measures introduced up to now have not been of much assistance. We need a courageous and imaginative over-all policy, based on a real awareness of the needs, of a nature such as to assist the average farmer, as compared to the big operators who can benefit most from all the grants or any other direct assistance coming from government.
Mr. Speaker, some parishes in the Bellechasse constituency date back to 1692 ' and 1693, and among them are Beaumont and St. Michel; such parishes, with their villages, their institutions, some houses more than two centuries old, just by their picturesque presence, remind us of the very beginnings of New France in Canada. A major part of the present population of Bellechasse can trace its origins to the brave, bold and enterprising pioneers of those two parishes and a few others which were founded during the 18th century.
These people, of whom I am so very proud, tween the cost of production and farm have inherited the eagerness, the steadfast-income.	ness, the love for work well done, all the
926
May 4, 1965

The Budget-Mr. Laverdiere qualities that characterized their pioneering ancestors, and they have remained deeply rooted to the soil cleared by their forefathers.
They want to live there with dignity. Had it not been for their typical courage and steadfastness, many more farms would be abandoned today by those farmers who, like others, would have gone to the cities, leaving behind the kind of work they did like, but which did not permit them to earn a decent living for their families.
Many farmers are wondering why their costs are so high while their products sell at such low prices, why it is so hard for them to secure stable prices, why they cannot get a fair price for products such as beef, pork and cheese, while we have to import such products; why can the full time farmer not get an income equal to the average income of an industrial employee, although his working hours are longer; why do the policies advertised by the government have to be so indefinite that one cannot know what will come out of them? Why is it that the farmer has to draw attention to his claims by resorting to extraordinary means, such as marches on parliament? Should there be no change soon in this state of affairs, I shall feel bound to encourage such marches on parliament in Ottawa, that the leaders and members of the Catholic Farmers' Union could organize.
Why is it that farmers have so much trouble in obtaining assistance of any kind, such as social assistance, when they really need it under the present circumstances? I know personally that most of them use it only when they are absolutely forced to do so, as they are very often considered by a few officials of those organizations as people who only want to live on sources made available by the government to the needy.
Why, they ask, are we somewhat forgotten? Why can we not benefit from the country's prosperity, in spite of all our work and efforts? Why is unemployment insurance still out of our reach? Why have some areas been designated and not ours, which is so poor?
And yet, Mr. Speaker, at the turn of the century, according to certain reports of the Quebec department of colonization and mining-at the very beginning of the century, in fact around 1901-Bellechasse was one of the most prosperous agricultural counties in the province. Today, due to several factors, including the mechanization required and stiffer competition on the various markets, the situation is just the opposite. On this I am in almost complete agreement with the recom-

mendations of the Ontario Farmers' Union, which are identical in many cases with the claims of the Catholic Farmers' Union. I also give my unqualified support, or just about, to the positive suggestions of the latter organization, the Catholic Farmers' Union, with regard to clear and precise positions, in order to assist, as soon as possible, farmers who are now in real need, particularly in some areas.
I admit, Mr. Speaker, that it is very interesting to give one's attention to politics in general, to follow the details of national or international problems. But, at the risk of being accused of dealing simply with regional or provincial politics, in the sense of eastern politics in general and Quebec politics, I believe very sincerely that I have to deal with the politics regarding precisely the people I have the honour to represent in the House of Commons. It is essential to point out the needs of those who wanted-
[DOT] (8:40 p.m.)


Mr. Deputy Speaker:: Order, please. May I bring to the attention of the House that it is difficult for the Chair and for other hon. Members to follow the speech being made at the present time.


Herman E. Laverdière: Mr. Speaker, I feel it is essential to point out the needs of those who chose us to represent them, especially when their situation is as precarious as it is at present.
It is true, as I read in a newspaper last week, that certain members are entirely taken up by regional problems, by the great number of letters and representations they receive. I readily admit it, and I agree also that more time would have to be spent on research and study, on the country's business in general and on all government measures submitted to the house.
However, as I said earlier, at the risk of being accused of provincialism and regionalism I feel duty bound to point out the problems of my riding as far as possible.
I must also add that several hours could be saved each week if some government employees were a little more impartial and objective in dealing with requests made to them.
I had a few remarks to make on that matter but I will skip them to deal with another subject.
May 4, 1965

Mr. Speaker, I would like to speak briefly about national unity, a matter which is of interest to all Canadians worthy of that name.
I must say, and this is my personal opinion, that in our first years in elementary school our teachers give us an idea of the incidents which marked the beginning of Canada, with all the dates, names, battles, etc. to remember. From what I learned, the French were good and the English bad. How many happy or unhappy scenes have passed through the mind of each of us, depending, of course, on the good or bad results of these battles described sometimes quite vigorously.
On reading some of the history books on Canada available to school children of the provinces other than Quebec, I have had the impression that our heroes were just the opposite on the English side.
It is therefore logical for one to ask himself to what extent the views of many Canadians, which are absolutely contradictory in many cases, are due to a teaching of history which is partial and prejudiced from the start.
I do not want to cast any reflection on the teachers of that time, because I had excellent teachers even if they may seem to have had little success with me. I merely wish to stress the need for every Canadian to reconsider objectively his own concept of Canada, as it now stands as a whole. History is one of the most humanizing disciplines, but it is a science where objectivity must enable everyone to realize that Canada was founded by very worthy men who came from France, England and other countries. One must recognize that Intendant Bigot's self-centredness was just as despicable as Lord Durham's attitude and conclusions.
Today, all those conflicts of the past, all that one-way teaching of the history of Canada seem to break to the surface. We are facing a tense and disturbing situation the implications of which extend well beyond the policy of such a party aiming first of all at having re-elected the largest possible number of members. Before such a situation, the latter attitude must be forgotten. Which attitude should we take? What should we do? Blame one another? Quarrel? Fight or try to understand one another?
I believe sincerely that our problem of unity is one of misunderstanding. We do not know one another well enough. Many, even members of the elite, jump to conclusions on the basis of incomplete information, just as many declare themselves for or against, while they do not even know the first thing about a
The Budget-Mr. Laverdiere democratic system, while they only have very elementary knowledge of their history, of the economy of their province or their country and all consequences resulting from extremist attitudes.
One thing is sure. French Canadians were very docile, very submissive after the defeat of 1759, too submissive perhaps in spite of the understanding and good-will shown by most leaders of that time. Our forefathers cooperated, even if some reports state otherwise, such as this one on the American invasion of 1775-76 which says about the people of Beaumont: "Except for five or six good subjects, that parish (Beaumont) relished very much the spirit of the rebellion."
French Canadians co-operated at the time of the abovementioned invasion; we cooperated in 1812 right after the vexatious measures taken by Craig; we co-operated in 1842; we co-operated in 1848; we co-operated in 1867; we co-operated in 1914; we co-operated in 1939. We have always co-operated.
We made concessions time after time; in addition to all these concessions, which one do you think we have not made that we should have? But what did we gain by that? A few crumbs, such as bilingual cheques, bilingual currency, bilingual stamps and a few other minor things.
It makes you wonder what is left for us to do after 98 years within confederation. What stand should we take? What should we do now to unite our country? What else should we concede?
The time for concessions is past, it is time now to substitute for that policy of co-operation a policy of give and take, based on equality and dignity. We extend our hand, as we have always done, but it is a firm and resolute hand. We have been co-operating long enough, perhaps with some apathy, in order to maintain peace.
We no longer intend to beg for unity; we wish to be treated on an equal footing to arrive to an official recognition of our presence, of what we are and represent. Mutual understanding is necessary, but I am convinced that we can only attain it provided a concession on our part is met by a similar concession on the other part.
I sincerely believe that French Canadians can no longer be satisfied with half-measures and a few crumbs. Such an aspiration is very natural and legitimate.
Quebec is a French Canadian state whose rights as defined in the 1867 Act must be respected. We have become an adult people,

May 4, 1965
The Budget-Mr. Nielsen decolonized at last and conscious of our dignity, and we want nothing else but to be masters in our own house.
A strong people is above all a united people, and therefore a people which respects the deepest aspirations of each of its fellow citizens.
[DOT]	(8:50 p.m.)


Erik Nielsen: Mr. Speaker, before getting on with some remarks I have to make with respect to the budget of the Minister of Finance (Mr. Gordon) and to the financial policies of the Government as displayed in that budget, I want to take this opportunity to remark on the speech of the hon. Member for Verdun (Mr. Mackasey), whom I am very happy to see in his seat this evening, when he spoke during the Throne Speech debate. I, of course, was unavoidably absent from the House at the time the Member for Verdun delivered himself of his oration and, unlike the supposition of the Minister of Justice (Mr. Favreau) when he alluded to it this afternoon, the absence was a short one, as it has been throughout this session-and certainly the Minister of Justice has no room for criticizing others for absence from this House.
It must have been a moving experience, Sir, to hear the hon. Member for Verdun coming to the defence of a hapless and helpless and hopeless Prime Minister (Mr. Pearson). The Member for Verdun, and I believe I am quoting him correctly, attacked me for what he called "another vicious, unwarranted, but I suppose utterly predictable attack upon the Prime Minister and upon the front bench of this Party". I do not intend to refute the rather far fetched defence of the hon. Member for Verdun except to say how much I agree with the remarks of the hon. Member for Port Arthur (Mr. Fisher) when he said that he was "getting sick and tired of the kind of people who wrap themselves in the flag of God and the family, and all the rest, when they are under attack. I am sick of the whiners, and the Government Party has one of the greatest collection of whiners I have ever encountered." We have many examples of this, Mr. Speaker. I think the hon. Member for Port Arthur (Mr. Fisher) left out one descriptive adjective when he failed to call them "whimperers" as well, for that is what they are.
[DOT]	(9:00 p.m.)
We also had a display by the Prime Minister (Mr. Pearson) in March in the western part of this country complaining about fili-

bustering and obstructionist tactics on the part of the Opposition, and saying that all they were trying to do was prevent them from implementing his program of new politics. Well, Sir, I think we have all had a bellyful of this so-called new politics, and it is time we cleaned this whole House out.
The hon. Member for Port Arthur said:
I was here in a Parliament when a very small nucleus of members of their Party, and particularly that prince of partisanship, the hon. Member for Bonavista-Twillingate (Mr. Pickersgill), unleashed day after day after day, through 1962 and 1963, a kind of attack that has made some of the things the Opposition has done in this Parliament seem pretty pale.
I forgive the hon. Member for Verdun (Mr. Mackasey) for not recalling those things, because he was not here during those days, but obviously he has forgotten matters as recent as 1962, which I will bring to his attention very shortly, in connection with certain things that were said by those individuals now in supposedly responsible positions in the front benches.
As I sat in the House on a previous occasion on the other side contemplating the day -and this is always inevitable, and might be worth while for those on the other side to remember-that I would be in the Opposition, I thought to myself, that if I were in the Opposition, whom would I want to emulate. I could not find a better example of an Opposition Member of that day that I should like to emulate more than the hon. Member for Bonavista-Twillingate.
Unfortunately, many Members, like the hon. Member for Verdun, are very thinskinned. I suggest that, even though a young Member in this House in terms of sitting years, he had better develop a little thicker hide than he now has.
I wonder whether he remembers the rumours that they in that Party started in 1962 to the effect that the Prime Minister of that day had Parkinson's disease-and that is where that rumour originated. Do they remember the speech made by the present Minister of Public Works (Mr. Cardin) attacking the then Prime Minister-a speech which we are told in a recent article in La Presse was commanded by the Leader of the Liberal Party of that day? Do they remember, Sir, the description by the hon. Member for Bonavista-Twillingate of the then Prime Minister as an "evil genius"?
Let me quote, Sir, from a speech made by the present Minister of Public Works which appears at page 1142 of Hansard for Febru-
May 4, 1965	COMMONS
ary 22, 1962. He then referred to the Prime Minister of that day and accused him of toying with the truth. He accused him of having a cynical attitude and using disparaging words and remarks about the then Leader of the Opposition, who is now the Prime Minister. On the right hand column of that page he accused the Prime Minister of toying with the truth. That speech is shot through with this kind of remark, which caused a cartoon to be drawn by one of the more eminent cartoonists of the country depicting the Minister of Public Works in the cellar of this building among the heating pipes, over the caption "How low can you go". Those are the things that the hon. Member for Verdun should remember.
He should also remember speeches such as the one his own Leader, the present Prime Minister, delivered, a copy of which I have in my hand, on September 18, 1962 at a testimonial dinner honouring Toronto and district Liberal Members of Parliament at the Royal York Hotel in Toronto. I quote from a transcript of that speech. The second paragraph reads:
The first is the gross and unpardonable deceit practised on the electorate-
That was the now Prime Minister referring to the then Prime Minister, and at the bottom of the page he is reported as having said:
Why. the Minister of Agriculture, Alvin Hamilton, after the election on June 20, still kept up the deceit-
I suppose in the mind of the hon. Member for Verdun this is the kind of remark he would refer to as constructive. That is how he referred to them in his speech the other night.
On the second page of the transcript of that speech, again speaking about the then Prime Minister, the present Prime Minister said:
Was there ever a greater deceit perpetrated on an electorate.
Further down the same page the present Prime Minister is reported as having said:
The Prime Minister now has an explanation for this "sudden" crisis, one that is as original as it is false
Those are the words of the present Prime Minister not less than three years ago, made in a constructive speech, I dare say.
We do not even have to refer back that far. We just have to turn up a speech delivered on February 10, 1965 by one who was supposed to be protecting the rights of justice and fair play in this country, the present Minister of Justice (Mr. Favreau).
DEBATES	929
The Budget-Mr. Nielsen He made this speech in Quebec City to the Reform Club on February 10 of this year. I have a transcript of that speech in my hand and on page 3 that Minister is reported to have said, when speaking of the present Leader of the Opposition (Mr. Diefenbaker>
under the heading "The Artisan of Disaster", that the Leader of the Opposition used some unkind words about the Government. He accused the Leader of the Opposition of having illusions of grandeur, of an unhealthy distrust of those about him, authoritarian temperament, morbid irresolution and nar-cism. That is supposed to be constructive criticism, I dare say.
The Member for Verdun has the gall and effrontery to stand in his place and be critical of the comparatively mild remarks that I made about the ineptness, inadequacy and incompetency of this collection of fum-blers and bumblers sitting in the treasury benches on that side of the House.
Not all the emotional defences that can be prepared for the hon. Member for Verdun and his colleagues, nor all the gimmickry at the disposal of the Liberal headquarters can obscure the real crisis in the Liberal Party, and that is all they are trying to do with all these red herrings they are drawing, such as the one which was dragged across the trail by the hon. Member for Verdun.


An hon. Member:: Which party are you referring to?


Erik Nielsen: I am speaking of that Party which is controlled by the old guard. I am speaking of that Party, for which I hold great hopes that one day the brilliant and intelligent Members, such as the hon. Member for York-Scarborough (Mr. Moreau), will force their way into the front benches and rid those benches of some of the deadwood that sits there now.
It is interesting to reflect on the circumstances under which the hon. Member for Verdun succeeded to his position as Chairman of the Liberal caucus. Who knows but for one of those small errors of fate the hon. Member for Dollard (Mr. Rouleau) might have been making that defence of the Prime Minister made by the hon. Member for Verdun the other evening. I should have thought that the hon. Member for Verdun, whom I know personally and have worked with, would have been the last Member to stand up and say the things he did. I would have thought that he would have been grateful to me for bringing certain matters to the attention of the House, particularly those I

May 4, 1965
The Budget-Mr. Nielsen referred to on November 23. I wonder what he would have done in similar circumstances. Does he condone the situation, as he knows it and as he has accepted it, of those days? Does he condone what happened in connection with the conduct of the former Minister without Portfolio? Does he condone the action of two Members from Quebec with respect to a certain bankrupt company in the Province of Quebec? Does he condone all these things, and what would he have done under those circumstances?
[DOT] (9:10 p.m.)
This crisis in the Liberal Government has been ably documented in the press throughout Canada. I do not stand alone in making these observations. These paragons of virtue, as the Member for Verdun would have us believe all Liberal Members are, are described by the national press, and some of the most severe criticism has come from their own supporters in that press. I can think of no finer example than the Winnipeg Free Press which on March 29 last had this to say:
It is becoming increasingly clear that Prime Minister Pearson, sooner or later, must make substantial and drastic changes to his Cabinet. For the good of the Government, of Parliament and of the country as a whole, the sooner the Prime Minister faces up to this embarrassing but necessary task the better.
I wonder whether the hon. Member for Verdun agrees with that criticism by the Liberal press. The same editorial in the Free Press mentions that the Prime Minister no doubt is waiting for the report of the Dorion Commission before making some of his changes, but the editorial continues:
There are changes urgently needed that do not touch on any of the Ministers who may be involved in the affairs into which the Dorion inquiry is looking, changes in such fields-
I hope the Minister of Finance (Mr. Gordon) is listening.
-as finance and welfare.
Then the editorial concludes with these words:
Until, by one means or another, there is a stronger ministry at the head of the country, a ministry capable of giving firm and vigorous leadership and of commanding the confidence of the nation as a whole, the prospects for an improved Parliament and for an effective handling of the nation's affairs seem bleak indeed.
There is an unbiased sort of analysis for the hon. Member for Verdun to consider. The Winnipeg Tribune was no less emphatic in its assessment of what the country needs. I quote from an editorial in that newspaper on March 30:

Mr. Pearson could be busy during an Faster recess cleaning up his Cabinet and his Party.
It is a Herculean task, I admit.


An hon. Member:: He would need more than an Easter recess.


Erik Nielsen: It might take a few Easter recesses to accomplish this end. I firmly believe it might, indeed, to accomplish that which the Prime Minister does not seem to have the fortitude to do himself. I continue quoting the editorial:
He may not be personally responsible for the actions of erring politicians, but surely he is under obligation to see that the Liberal party is purged of the men who have brought shame on it and on the conduct of public business.
There is a representative press opinion. On the previous day, March 29, the same newspaper had this to say:
Mr. Pearson has the job of recasting his cabinet. He has backed away from this decision so many times that it is now all the more difficult to carry out. He also has yet to demonstrate that he can provide the politicai leadership required of a Prime Minister. The Grits are so trapped by a seemingly endless series of misadventures, many made by their own clumsiness, that restoration of confidence in their ability to govern will be a monumental task.
I believe that with the material available among the old guard on the front benches now it is an impossible task, and I again invite the Prime Minister to look at the array of fine talent he has on the back benches and move it up. Freshen up the House of Commons and restore the confidence of the people in this country by putting some of this talent on the front benches.
The Montreal Star has always been a faithful Liberal paper. In fact, the hon. Member for Verdun quoted liberally from an article in the Montreal Star. In its March 30th edition that newspaper had this to say:
Unless a thorough spring cleaning is done quickly there is every prospect that the Liberals will have to fight another election with the "assistance" of the old guard and its assorted unsavoury hangers-on.


Wallace Bickford (Wally) Nesbitt: Why don't they call in Bob Thompson?


Erik Nielsen: I continue:
It is all very well, as Mr. Favreau did, to talk of the new Liberal federation as "the vigilant conscience" of a permanent revolution. But something more than conscience is needed to clean out stables and freshen up atmosphere. To take one example, how many of the 21 constituencies on Montreal Island qualify as reaching Mr. Favreau's new look standard?
That is how the Montreal Star assesses the situation. I might interject here and ask,
May 4, 1965

perhaps rather rhetorically, whether the riding association of the hon. Member for Verdun or that of the hon. Member for St. Lawrence-St. George (Mr. Turner) qualifies under this assessment of the Minister of Justice? The Montreal Star goes on to say that the Minister of Justice should be relieved of his job as Quebec leader, and it adds the following:
If there are those in the Cabinet or the Quebec caucus opposed to Mr. Sauve it might be pertinent to ask them what they would prefer-Mr. Sauve, as the new Quebec leader, or a continuance of the same sour political atmosphere which has characterized the Quebec wing of the party.


William Heward Grafftey: A pretty rough choice.
The Budget-Mr. Nielsen


Erik Nielsen: The Toronto Telegram catalogues the various misadventures of the Minister of Justice, and then concludes as follows:
We must get rid of this man-he's an obstacle to justice in Canada. He may have done no wrong: he has certainly done nothing right.
The Toronto Telegram could have included a good many other Ministers in this general description.


Miss Jewett:: What did you think of the budget?


Erik Nielsen: John Bird of the Financial Post-


Erik Nielsen: There is a representative provincial newspaper speaking about what the situation is on the front benches, the Minister of Forestry (Mr. Sauve) being suppressed, being smothered, being strangled by the old guard in his own Party, and all because of a small clique around the Prime Minister with such great influence.


An hon. Member:: Who is your Quebec leader?


Erik Nielsen: Smarten up, you young, vigilant backbench Members. The Toronto Telegram is equally unimpressed with the performance of the Minister of Justice. The criticism is not confined to the press of his own province. Even Ontario papers share the opinions of the Quebec press. In an editorial on March 5 the Telegram quoted the Minister of Justice as having said that he would "tolerate no form of corruption or influence peddling whatsoever". The Telegram observes:
Justice Minister Guy Favreau is incapable oi honouring any such high sounding guarantee foi he is blind to the political facts of life and would not recognize corruption or influence peddling if he saw it. He has proven himself, once again, inepl and sickeningly unfit for the administration oi justice.
That was an editorial on March 5, not very long ago. Can anyone remember a comment like that on a Minister of Justice in Canada? Can the hon. Member for Verdun remember any comment by a national newspaper such as that, or the comments in the Montreal Star and the Winnipeg Free Press? Yet he speaks of making a constructive contribution to debate.


William Heward Grafftey: Take off your partisan
blinkers.


Walter Lockhart Gordon: To whom are you talking?


Pauline Jewett: I thought you were going to talk about the budget.


Erik Nielsen: I hear one of the more brilliant backbench members coming through faintly. This is the kind of individual I should like to see a reinvigorated Government bring forward to the front benches. We have had enough of the shenanigans of the Minister of National Health and Welfare (Miss LaMarsh), who could not even pilot her own bill through the House. Why does the hon. lady not move up and perhaps improve the situation?


An hon. Member:: She smokes.
[DOT] (9:20 p.m.)


Erik Nielsen: Now, Sir, John Bird of the Financial Post, a member of the distinguished and objective Press Gallery is generally regarded as a newsman who is close to the Liberal hierarchy. Mr. Bird states in an article on March 27 that the Minister of Justice (Mr. Favreau) will not be fired from the Cabinet but will insist on resigning. He adds that, and I quote-
-in Ottawa the hot inside tip is that the Liberals would like to bring Paul Gerin-Lajoie into the Federal Cabinet.
Well, even that would be an improvement. Of course, Leslie Roberts is also close to the Liberal hierarchy and he insists, in an article dated April 3 in the Montreal Star, that the Minister of Forestry (Mr. Sauve) will make it at long last as Quebec leader. Mr. Roberts has some interesting revelations to make about the attempts on the part of the dominant Liberal old guard to keep the Minister of Forestry out in the cold. According to Mr. Roberts the Minister could, and I quote-
-barely get the time of day anywhere near the summit. He was, they said, difficult. He was, at that.

May 4, 1965
The Budget-Mr. Nielsen
Maurice Sanyo had not gone to Ottawa to assist in perpetuating an apostolic succession of gentlemen whose robes and togas stood in need of dry cleaning. What Sauve always wanted was new men, in new, clean, togas.
Here is a man very close to the higher echelons of the old guard of the Party speaking. Mr. Roberts goes on to detail the work of the Minister of Forestry in working out details of the pension plan arrangement with Quebec. Apparently it did not make much difference in the attitude of the Liberal old guard. Mr. Roberts puts it this way:
The determination to push the Minister of Forestry back into obscurity seemed stronger than ever. The old Grit guard who still hang on to considerable power in Federal affairs, especially in Montreal, made it clear that they continued to want no part of the man.
Now, it is still anybody's guess whether we will have the wholesale Cabinet shake-up that is called for under the circumstances. Mr. Patrick Nicholson, columnist for the Thomson newspapers, believes that we will have a new Liberal leader. In an article which appeared in the Quebec Chronicle-Telegraph of March 22, Mr. Nicholson mentions the speculation that had been taking place in the press about the Conservatives. He adds, and I quote:
But the most important story of all slipped through the fingers of the eager beavers with the notebooks. That is that the faithful caucus of Liberal M.P.'s, so dedicated and affectionate toward their charmingly dilletante leader, may soon have to chip in to present him with one of those autographed silver salvers so popular as farewell testimonials.
Mr. Nicholson says there is a possibility that the Prime Minister (Mr. Pearson) will head up a new United Nations organization responsible for peace keeping contingents. Well, perhaps so. Mr. Nicholson says that the Prime Minister finds political life uncongenial, and now that he is faced with the urgency of having to use the hatchet, which feels so strange in his hands accustomed to the suede gloves of the diplomat, he has decided the only answer is to give the Government a fresh start under a new leader. This is certainly an opinion that is widely shared across this country and certainly on this side of the House.
Mr. Nicholson goes on to say that the Liberals have a tacitly accepted heir apparent ready and anxious to be called. This is the man Mr. Nicholson describes as "smiling Bob" Winters. "Smiling Bob" will have plenty of competition for the job. Peter Bruton, the Queen's Park correspondent of the Toronto

Telegram told us in his April 8 column of a luncheon between Keith "the rainmaker" Davey, Charles Templeton and the hon. Member for St. Lawrence-St. George (Mr. Turner). I truly regret that the hon. Member is not in his seat this evening, Mr. Speaker. According to Mr. Bruton-
-it was Mr. Davey who suggested, quite straight faced, that he just knew the next Federal leadership contest when the Prime Minister steps down would be between his two luncheon guests.
Only two months ago Mr. Peter Newman, whom the Member for Verdun (Mr. Mac-kasey) quoted so copiously in the Throne Speech debate, told us in the Toronto Star of some of the Cabinet battles being fought by the Minister of Trade and Commerce (Mr. Sharp). This has been the theme of what I like to call the Sharp propaganda machine.
Whenever a Minister is in trouble word is whispered about that Sharp counselled against his appointment in the first place. Whenever a Government measure faces a public outcry, word is passed around that Sharp fought valiantly and unsuccessfully against it. Whenever the Government does something popular, Sharp pressed it home on his colleagues. Hardly a day goes by, Sir, that we do not hear some whispering from the Sharp machine. Sober Sharp, the only restraining voice in the Cabinet. Honest Sharp, the man who is demanding a housecleaning. Clairvoyant Sharp, the man who fights against the Minister of Finance. Responsible Sharp, who fought against the Labour Code and other socialistic measures, and the leftward leanings of the Minister of Labour (Mr. MacEachen). The Sharp propaganda machine is employed full time making sure that the Minister is right- right in retrospect.
An hon. Member opposite asks about the Budget. The Minister of Trade and Commerce is down in the United States today speaking with great responsibility as a member of the Canadian Cabinet about a more equalized tariff on fish sticks.


Mr. Deputy Speaker:: Order, please; the hon. Member's time has expired.
[DOT] (9:30 p.m.)


Mr. Gilbert Hondeau (Shefford):: Mr. Speaker, we are now considering the federal budget-


Mr. Deputy Speaker:: Could we have order, please? I should like to bring to the attention of hon. Members that the hon. Member
May 4. 1965

for Shefford has the floor and is trying to make a speech.


Gilbert F. Rondeau: Mr. Speaker, we are now considering the federal budget, only a very short while after having examined the speech from the throne. Indeed, the speech from the throne, which was read on April 5, had a rather unusual characteristic, at least as far as the government was concerned, because the latter has come to realize that there is poverty in Canada and has declared its intention of waging war on poverty. Consequently, we were anxious to get to April 26, that is 21 days later, to hear what kind of a budget the Minister of Finance would present and what kind of legislation he would propose to fight poverty in Canada.
Contrary to the speech from the throne, however, the budget speech showed us that far from waging war on poverty, the government keeps picking on Canadians who are destitute. It wages war on the poor and not on poverty, because it is not with a tax reduction of $3 per year for a father of a family who has two dependants and who earns $3,000-a reduction of about $3 a year or a little less than one cent a day-that one can fight poverty in Canada. That budget will create even more poor people, will even mass-produce them, if I may use that expression.
While in Ottawa a lot was being said about poverty, about two days after the speech from the throne, the Quebec government announced that various taxes were being increased. Poverty is discussed in Ottawa and taxes are increased in Quebec. That is an instance of co-operative federalism which we are asked to swallow. It is probably the kind of co-operative federalism which, according to the Secretary of State (Mr. Lamontagne), is to be found between trusteeship federalism and confederative federalism. For the Secretary of State, co-operative federalism is to be found between two chairs- and let us say in passing that he knows a lot about furniture. While poverty is discussed in Ottawa, taxes are discussed in Quebec.
The present Quebec government, which can be compared with that of Ottawa, has levied 87 kinds of new taxes since 1960. Nevertheless, we had been told at that time that the government would administer the province without any increase in taxation. Has the premier of that province been playing on words or did he intend to administer the province with a 22S20-60
The Budget-Mr. Rondeau hundred kinds of new taxes. If such is the case, he would lack only 13 of them to reach his goal.
Instead of fighting poverty in Canada, our government is trying to help the poor in other countries, especially those in England. Did we not grant a $268 million loan without interest to the Bank of England in order to save the pound sterling? But to save the needy in Canada, they will continue to invent all possible kinds of taxes. To help others, let us burden our own people. That is what the government seem to be saying. They maintain their policy of trying to help the poor in foreign countries rather than those who have difficulties in our own country, Canada, a country so rich in production, in natural resources, in all kinds of things but where, according to the speech from the throne, poverty is to be found.
Looking into this mirror held up to facts, in the face of poverty in Canada and considering the wealth of resources of this country, we see in the last budget speech, no solution to deal with this problem, to attack or change the financial system or to correct the financing system, because of which the production is not geared to consumption.
This evening I should especially like to develop one point which the Minister of Finance laboured for quite a while in his budget speech, namely public capital. Because for quite a long time we of the Ralliement Creditiste have been stating that there is an enormous difference between social capital, or public capital, and private capital.
Private capital is a productive capital. It is a capital that can be invested in an industry, in a private enterprise. Production can be made with such capital, and with such production, profits can be made, and out of those profits, interest can be paid. On the other hand, there is also a public capital. That capital does not produce; it does not yield anything to anybody, it does not bring any return to the community, to the Canadians as a whole. And today with our present finance system everything is confused. No difference is made between private and public capital. No attention is paid to the difference between the two. The worst nonsense is that people realize now that public capital is a danger to private capital.
When bridges, roads, schools, sidewalks, sewer systems, waterworks or any public capital development which belongs to everybody is built, it produces nothing, because a school cannot produce a school after ten
May 4. 1965

The Budget-Mr. Rondeau years, nor a bridge produce another bridge after 15 or 20 years, and it is the same for a road. This capital does not yield anything.
Then, why does our present financial system compel society, when we build bridges, roads, schools, sidewalks, waterworks or any public social development, to pay three, four, five, seven and ten times for that public capital, while it has been produced only once?
It is a mathematical nonsense, and that is where our present financial system is un-arithmetieal, unscientific, while the Social Credit system which we advocate would put the Bank of Canada at the service of public capital, of social capital, at the disposal of our public institutions so that they could realize their development of public capital without compelling individuals to pay five, six, seven, eight and even ten times for those achievements.
[DOT] (9:40 p.m.)
I was talking recently with a staunch Liberal who was saying that taxes were increasing every day and every year and once I had shown him the comparison between social capital and private capital, he agreed with me.
Nowadays the sidewalks, bridges, waterworks and sewer systems in our municipalities and cities cost more, after a number of years, than the houses near which they are built.
The sidewalks that are built are paid 15 and 20 times over. The Jacques Cartier bridge was built a few years ago. Its cost was paid more than 20 times over through interest and the debt still exists in the books; as a matter of fact, it is part or our national debt.
Why is it that our sidewalks, our bridges, our highways, our sewer systems and our schools cost so much nowadays? It is due to the fact that we do not have any financing system in the public sector. We make no distinction between public capital and private capital. Why cannot our municipalities, our school boards borrow from the Bank of Canada, by way of bonds, the sums required for their development? Those sums would then be repaid to the Bank of Canada according to the depreciation of our public developments. The credit of the Bank of Canada, under Creditiste principles, would be put into circulation in terms of the development in the public sector.
For instance, if we built a school costing a million dollars, a credit of $1 million would be granted to the school board concerned in

order to build its school. If according to the engineers, the school would last 20 years, the Bank of Canada would be reimbursed at a rate of $50,000 per year. This means that at the end of 20 years the total debt, or the cost of the public capital involved, would have been repaid.
But today it takes 25, 30, 40 or 50 years to pay for a school, so that by then it is obsolete. The same thing applies to roads unfit for traffic and for bridges no longer in existence; yet, the amount of public capital involved still figures in our national debt.
The present structure of our financial system, according to the Creditistes, will in the long run completely destroy the public financial sector and reduce by 100 per cent the value of money in Canada. Why? Because the federal government, responsible for the administration of public affairs, has no financial system to satisfy the many needs for public capital in the country. The only thing they can do, and they do it, is to borrow from the United States. They borrow in Europe and everywhere in the world, or from Canadian chartered banks.
They borrow from private institutions to develop the public sector and that is why we claim that the Minister of Finance (Mr. Gordon) will be required through legislation and with the assistance of a credit commission, to make credit a social proposition, if you wish. In other words, public capital will have to be made available to companies at administrative cost, because today public capital is destroying private capital due to taxes that are going up constantly; indebtedness is increasing. In fact, the interest on the public debt this year will exceed $1 billion. Why? To pay interest to private institutions, to banks, because they have advanced to the government of our nation the necessary credit to permit the development of the public sector. On the other hand, under the Social Credit doctrine the federal government could use the Bank of Canada to put credit in circulation or withdraw it according to the depreciation of public developments.
That is where our system is scientific. We put money or credit in circulation according to the existing guarantees or values. Instead of assuming obligations toward other countries to bring money to Canada, we could assume commitments toward the Bank of Canada to put our credit in circulation, according to the development of our country, and take money out of circulation according
May 4, 1965

to the consumption of our public production, to the depreciation of our social capital.
If we are unwilling to stop and see that our financial system itself is carrying a cancer, we will not succeed in finding a way out. If the federal government insists on leaving the control of finance and credit in the hands of individuals, namely eight private undertakings which are the banks, it is obvious that those private undertakings called banks will ruin the country and also the savings of individuals and investors.
It is ridiculous that sidewalks, sewers and roads built in front of our houses should cost more than the houses themselves. None the less, that is the present situation, which proves that our financial system is archaic, out-dated and out-moded. That is why members of Parliament should awaken, should stop playing politics and tackle the only real problem which exists in Canada-finance.
We are wasting time in this house in trying to find solutions. We are looking in the wrong places to find money for the administration of the country. Yet, it was Mr. Mackenzie King, the former Prime Minister of Canada, who said:
Give me control over money and credit of a nation and I need not care about its lawmakers.
The statement made by Mr. Mackenzie King in 1935 is still true today. Those who control our financial system do not care about us, in this house. Why? Because, as far as they are concerned, we are only makers of laws that will bring interest to those who hide behind the bank counters and who make money as they see fit and as much as they want.
If they decide one day to bring about prosperity in Canada, they put billions of dollars in circulation, but the day after, if they decide to restrict credit, they declare that money is scarce. Then businesses become shaky and bankruptcies increase. Why? Because a group of individuals have been allowed to control our finance and they can do as they please, because the Minister of Finance fails to assume his responsibilities, having been elected by those who actually control finance behind their counters.
That is why we, in this corner of the house, are shocked at the position taken by the Liberal party which pretends to fight poverty but keeps on maintaining a financial system likely to mass-produce poor people, because the exemptions announced in the budget will still favour the rich at the expense of the poor.
22620-60 2
The Budget-Mr. Rondeau
Mr. Speaker, if hon. members could be serious for a moment, they would consider our suggestion. If there are other suggestions, let them be made without delay so that our city problems may be settled. In fact, I know of towns in the eastern townships, in the province of Quebec and elsewhere in Canada, where nearly 65 or 70 per cent of the municipal budget is assigned to interest on the municipal debt. There remains only 20 or 25 per cent to be spent on waterworks, police services, in brief on municipal services. Some 65 to 70 per cent of the budget is used to pay the interest on municipal debts while we, in this house, could enable our public bodies and municipalities to obtain the necessary public capital and to pay the cost once only.
Mr. Speaker, we, from the Ralliement Creditiste, do not say that we will give schools to everybody, that we will build roads without having to pay for them. We do not say that we will build sidewalks and that we will have nothing to pay for that. We never said that. We always stated that the Bank of Canada should issue credit in keeping with public development and remove it from circulation according to public consumption.
If a bridge costs a million dollars and will last 20 years, we should remove $50,000 a year from circulation over 20 years; after 20 years the bridge would be depreciated and the debt would be paid. Under this system we would have paid once for our public capital, our schools, our sewers and our sidewalks. But under the present financial system, we pay the cost of one school for us against the cost of five schools to finance companies.
We pay the cost of one road for us and that of five or ten roads to the financiers. We pay the cost of one sidewalk for us and that of ten to the financiers. And yet we get only one sidewalk, one bridge, one road. A school does not multiply at the end of the year, nor does a road or a bridge.
If public capital is non-productive capital, if social capital does not benefit anyone, why force the Canadian people to pay 10, 15 and even 20 times their public capital?
That explains why our public debt keeps increasing; that explains most of the municipal, provincial and school board debts.
It is easy to say: Masters in our own house. But where does the money come from? From foreigners. We know that last year we gave more than $1 billion in interest to the banks. We gave $1 billion in profits to financiers. Had we had a financing service of public capital through the Bank of Canada we could
May 4, 1965


Mr. Deputy Speaker:: The hon. Member for Durham.


Mr. Russell C. Honey (Durham):: Mr. Speaker, I observe that it is now one minute to ten o'clock, and in order that I may have the opportunity to make my remarks without their being broken over the evening adjournment, may I call it ten o'clock.


Mr. Deputy Speaker:: Is it the desire of the House that the Chair call it ten o'clock?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Provisional Standing Order 39A deemed to have been moved.

Ralph Bronson Cowan: Mr. Speaker, this afternoon I rose and asked a question of the Minister of Justice with regard to the International Boundary Waters Treaty of 1909. This is a question of immediate, pressing moment to the Government and to the Department of Justice in view of the filling that is going on on the north shore of Lake Ontario between the Humber River
May 4. 1965

Proceedings on Adjournment Motion be asked to definitively interpret the meaning of the word "materially" which appears in Article III of the treaty between Canada and the United States, dated 1909. I hope he will at the same time seek a legal and binding interpretation of the phrase "patented water lot".


Mr. D. S. Macdonald (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, hon. Members will recognize at once that this is an important and very serious question in respect of which the hon. Member for York-Humber (Mr. Cowan) and the hon. Member for York West (Mr. Kelly) have been very active. I think it is very clear from the
presentation this evening by the hon. Member for York-Humber that both as a matter of fact and as a matter of law this is an exceedingly complicated question. It is a very difficult situation which involves an interpretation of a Federal statute, the Navigable Waters Protection Act, as well as an interpretation of the Boundary Waters Treaty. This will involve very difficult questions of law. The Department of Justice will want to give serious consideration to both the suggestions of the hon. Member, that binding interpretations of the relevant provisions be sought from the appropriate authorities.
Motion agreed to and the House adjourned at 10.07 p.m.

Wednesday, May 5, 1965