1966-11-24

Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I am sure the house will be pleased to learn that shortly before the house opened this afternoon my department was notified that an agreement in principle had been reached between the bargaining committee for the Air Canada machinists and Air Canada-


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: -which the bargaining committee will recommend to the membership in the course of the next few days.


Mr. Woolliams:: Twelve days too late.



DOMINION DAY ACT AMENDMENT


[Stage Direction]
Mr. Gaston Isabelle (Gatineau) asked leave to introduce Bill No. C-247, an act to amend the Dominion Day Act.
Some hon. Members:: Explain.


Mr. Isabelle:: Mr. Speaker, according to this bill, the 1st of July will be known as Dominion day, but the celebration thereof will take place on the first Monday of July.
[DOT] (2:40 p.m.)

The effect of the measure would be thus to make it certain that the holiday coming on a Monday would make for a longer week end, which seems to be more practical and advantageous. A holiday that falls, for instance, in the middle of the week is destructive to business and industry and does not bring the same pleasure and happiness to ordinary employees and civil servants who might otherwise make plans for a long week end.
Motion agreed to and bill read the first time.



BANK ACT AND QUEBEC SAVINGS BANKS ACT

Hon. Mitchell Sharp (Minister of Finance) moved: the first reading of Bill No. S-53 (from the Senate) to amend the Bank Act and the Quebec Savings Banks Act.
Motion agreed to and bill read the first time.



CANADA LABOUR (STANDARDS)CODE

['I would be very glad to consider that suggestion, Mr. Speaker.']
John Robert (Jack) Nicholson: the first reading of Bill No. S-54 (from the Senate) to amend the Canada Labour (Standards) Code.
Motion agreed to and bill read the first time.



[Stage Direction]
On the orders of the day:
R ght Hon. J. G. Diefenbaker (Leader of the
Opposition): I direct the attention of the Prime Minister to the report of the rising danger of famine in India and the possibility that thousands-and more-are faced with death from starvation. Has the government of Canada had any conversations with the representatives of India, since Canada is one of the countries in a position to help? Will the government give consideration to earmarking wheat and flour in sufficient quantities to be of some use, the question of terms of payment not being a primary consideration?
Right Hon. L. B. Pearson (Prime Minister):: The Department of External Affairs and 1 have been in touch with the government of India in connection with this tragic possibility. Last week end I had a discussion with the Indian High Commissioner and I have received through him a letter from the Prime Minister of India explaining the difficulty and inqu.ring whether it would be possible for us to assist in meeting this difficulty-"difficulty" is a mild word-and we are now considering how we could help India and help her quickly.


Mr. Diefenbaker:: Would the Prime Minister not consider that a fund might be launched immediately to give Canadians in all walks of life an opportunity to contribute in

November 24, 1966
Inquiries of the Ministry order to meet the horrible situation in which these people find themselves?


Lester Bowles Pearson: I would be very glad to consider that suggestion, Mr. Speaker.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, may I direct a question to the Minister of Labour regarding the situation in the ports on the west coast where the dismissal of several hundred longshoremen has cut down by some 50 per cent the amount of traffic being handled. These men have been laid off allegedly for slowdowns, whereas the men claim these lay-offs are due to lack of supervisory personnel and hazardous conditions. Will the minister use the good offices of his conciliation service in an endeavour to bring the parties together, and particularly to resolve the matter of allowing the foremen to bargain collectively, a practice which is common in many parts of the country?


John Robert (Jack) Nicholson: Mr. Speaker, the supervisory officials looking after the loading of cargo, some supercargoes and foremen in this industry on the west coast, appl.ed some time ago to the Canada Labour Relations Board for certification, and after a hearing that board decided that since they were really part of management this group was not an appropriate bargaining unit. However, that does not, of course, prevent an agreement being reached between management and the employees concerned, if they see fit to so agree. That is a matter between employer and employee.
I m ght add that I have received requests from the international representative of the union concerned, as well as representations from the management side, that I should go west. Having discussed this at some length with them over the past several weeks, I would like to be brought up to date, and in view of the announcement I was able to make here a short time ago, I propose to go west tomorrow to participate in discussions. I hope a solution can be found.


Thomas Clement (Tommy) Douglas: May I just say to the minister that I think all parties in the house will welcome this statement by him and we hope he will be successful in bringing the parties together.
[Mr. Diefenbaker.l


Hon. Michael Starr (Ontario):: As a supplementary question, before the minister takes any further action would he not get in touch with his industrial relations officer on the west coast to ascertain what the possibilities are, and what services might be rendered by that branch, or by h.mself as a representative of that branch, in endeavouring to work out some amicable solution to this problem?


John Robert (Jack) Nicholson: Mr. Speaker, the senior offic al of my department in B. C. is fully alive to the situation. He actually sat in on discuss ons I had with the international president and international representative of the union in Vancouver some weeks ago. He has been following the situation closely and if his services can be of any use to either side, he is fully briefed.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Real Caouette (Villeneuve):: Mr. Speaker, I wish to direct a question to the Minister of Finance and Receiver General.
A few days ago Canada granted a $1,620,000 interest-free loan to Bolivia. Could the minister tell us if it was made through the Bank of Canada or chartered banks?


Mr. Speaker:: Order. I do not think that the question as put is in order.


David Réal Caouette: I rise on a point of order, Mr. Speaker. 1 find it strange that each time we want to ask a question dealing with the Department of Finance about loans granted to other countries we can never do it at the opening of the sitting even when the minister is willing to give us an answer.


Mr. Speaker:: The hon. member could easily put the question on the order paper, and if he feels that there is really some urgency, he knows that he can ask that the question be studied on the adjournment motion.


David Réal Caouette: Mr. Speaker, again I rise on a point of order. When the minister is willing or ready to answer, could you not allow him then to give me a reply?


Mr. Speaker:: The minister can do it by
getting in touch directly with the hon. member.
November 24, 1966



ITALY-FURTHER REQUEST FOR AID

[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It concerns the continuing critical situation in northern Italy due ot the unprecedented floods there. It also relates to the fact that the National Art Gallery has offered the assistance of experts for the restoration of art treasures damaged by the floods. Can the Prime Minister tell us whether the government of Canada has taken any decision to render assistance to Italy?


Lester Bowles Pearson: Yes, Mr. Speaker. I had hoped to be in a position to announce a program of help and relief this afternoon on orders of the day, but I may be able to do it a little later during discussion of the estimates of the Department of External Affairs, or tomorrow morning on orders of the day, when I will have an opportunity to explain what we are proposing to do.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Heward Graffiey (Brome-Missisquoi):: Mr. Speaker, I w.sh to address a question to the M n'ster of Labour. I should like to ask him, in v ew of the number of strikes of organ zat ons under federal jurisdict on wh;ch have taken place th s year, and in view of the urgent recommendations put forward by the Econom c Counc 1 relating to the fact that the federal government should introduce legislation to improve management-labour relatons and conciliation procedures, is the government now considering taking action in this regard?


John Robert (Jack) Nicholson: The government is considering and is taking some action. The government actually has set up a task force to make such a study as has been suggested. I am sure this will be announced by the Prime Minister. This work is already under way.


William Heward Grafftey: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration.
Inquiries of the Ministry
Did the minister express to his cabinet colleagues and more particularly to the Minister of Labour the same feelings as he did in Montreal with regard to the management council and can he explain that statement?


Mr. Speaker:: I do not believe that the supplementary question is really supplementary and I suggest it is out of order.


Eldon Mattison Woolliams: have a supplementary question, Mr. Speaker. In view of the answer of the Minister of Labour to the last question, I am wondering whether what he had in mind when he made his remarks was implementation of the legislation wh ch now has been put on the books by the Liberal premier of Saskatchewan?


Mr. Speaker:: I doubt whether this question is in order.


Mr. David Orlikow (Winnipeg North):: May
I ask a supplementary question, Mr. Speaker. I should like to ask the Minister of Labour, in respect of the task force he has in mind, whether the members of this task force have in fact been appointed, and if so who they are. I should like to know also whether they have as yet held any meetings?


John Robert (Jack) Nicholson: I think it is safe to say that the Prime Minister will be making an announcement in th s regard at an early date. The personnel of the task force itself have been agreed upon. We are stffl in touch with industry and labour with regard to the consultative committee which must work very closely with the task force. When the consultative group has been agreed upon, I am sure the Prime Minister will make an announcement.


William Heward Grafftey: I have a supplementary question, Mr. Speaker. We are a great nation for setting up study committees and task forces, but can we expect action in this regard soon before our economy gets tied up again?


John Robert (Jack) Nicholson: Since the hon. member has referred to disputes within federal jurisdiction, some time soon I should like to give him and other hon. members a description of how the federal government and the federal Department of Labour have worked to bring about settlement in hundreds of cases which never have reached the public eye or never heard of, and of the effective work which is being done in this regard by the permanent officials of my department.

November 24, 1966
Inquiries of the Ministry GRAIN



INQUIRY CONCERNING INCREASE IN INITIAL PAYMENT

[Stage Direction]
On the orders of the day:
Mr. J. E. Pascoe (Moose Jaw-Lake Centre):: Mr. Speaker, I have a question for the Minister of Agriculture who has just returned from the west. In Saskatoon the minister held out the hope that the initial payment for wheat will be increased. Could he tell the house whether he was speaking on behalf of the Canadian Wheat Board in this regard?


Hon. J. J. Greene (Minister of Agriculture):: Inasmuch as this government has the interests of the western farmers continually at heart-


Some hon. Members:: Hear, hear.


John James Greene: -the question of the initial payment is under constant review. In this regard any announcement to be made would be made by the Minister of Trade and Commerce, if there is to be any change.



AGRICULTURE


[Stage Direction]
On the orders of the day:
John James Greene: Mr. Speaker, while I am on my feet I should like to answer a question raised yesterday by the hon. member for Wetaskiwin in respect of subsidy payments to dairy producers. I am advised by my officials that active consideration is being given to providing more detailed information on subsidy cheques issued under the dairy support program.
In reply to earlier questions on the subject of dairy assistance I am pleased to report also that it has been possible to develop a procedure to change payments to cream shippers from a quarterly to a monthly basis.This change to more frequent payments to cream shippers is being planned in stages. Most producers of cream have been paid dairy assistance to the end of September. Creameries are being asked to provide shipment records for October and November as early as possible in December. December and records for subsequent months are being requested by the end of each following month.
I might add that early difficulties encountered with respect to this enormous administrative undertaking have largely been overcome. With very few exceptions, prompt and accurate producer records are now being received regularly from processing plants, and

payments to the great majority of producers are being made on schedule, with a total of nearly $49 million having been mailed to producers to date.


Hon. D. S. Harkness (Calgary Norih):: have a supplementary question for the Minister of Agriculture. Did the taxpayers pay for the minister's recent visit to the west during which time he made a speech designed to stir up antagonism between the eastern and western parts of this country?


John James Greene: No, Mr. Speaker, and I am sure that any antagonism which may exist can be related to what took place at the Chateau Laurier last week.


Mr. Simpson:: Mr. Speaker-


Mr. Speaker:: Order, please. Is the hon. member's question supplementary to the question asked by the hon. member for Wetaskiwan, or supplementary to the question asked by the hon. member for Calgary North?


Robert Simpson: My question is supplementary to that asked by the hon. member for Calgary North.


Mr. Speaker:: I am afraid that a supplementary question to the question asked by the hon. member for Calgary North is not in order.


Robert Simpson: In view of the fact the minister answered the question, I think I should be allowed to ask a supplementary.


Mr. Speaker:: I do not believe the minister's answer related to the question asked by the hon. member for Calgary North, in which event both the question and the answer were out of order.


Mr. W. M. Howe (Wellingion-Huron):: Mr. Speaker, I have a question for the Minister of Agriculture that arises out of his reply a few minutes ago in connection with dairy products. I am sure the cream producers will be very happy to receive their cheques monthly rather than having to wait, as they have in the past. However, due to the fact that so many small creameries will have to close down because of the lack of patronage and we will have to import butter, will the minister consider increasing the price of cream to the producers so that butter production will not be reduced in Canada?
November 24, 1966


John James Greene: Mr. Speaker, I hope that well in advance of the next dairy year the National Dairy Commission will be appointed, under whom this entire question will fall. I feel sure they will take into consideration the suggestion of the hon. member.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Justice. In view of the shocking violation of civil and trade union rights by the planting of electronic listening devices in the hotel rooms occupied by the officials of the Pulp and Paper Workers of Canada, has the minister received any resolution or representation from trade unions or other groups asking for amendments to the Criminal Code which would protect the civil liberties of all citizens from eavesdropping and spying through electronic devices, phone tapping and other such means?


Hon. Lucien Cardin (Minister of Justice):: Mr. Speaker, I am not aware of any such representation from trade unions concerning eavesdropping and spying through the use of electronic devices. However, I can inform my hon. friend that the officials of the Department of the Solicitor General and the Department of Justice have had this as well as wire tapping problems under study for some time.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, on November 9 I asked the Secretary of State a question regarding the peremptory demotion of Earl Cameron, and I quote "who has become known as the news broadcaster 'Mr. Canada' ". Will the minister now tell us whether the C.B.C., out of its kindness of heart, is prepared to furnish the information which is now 14 days overdue, as to why this action was taken? What are the circumstances and under whose authority was this done? Why were
Inquiries of the Ministry two news broadcasters, Lamont Tilden and Earl Cameron, with 25 years experience with the C.B.C., treated in this way?


Hon. Judy V. LaMarsh (Secrelary of Slate):: Mr. Speaker, the right hon. gentleman has added a considerable number of questions today. I have not had a chance to look this matter up. I did answer his query about two days after he raised it, at a time when I replied to two or three questions. I am sorry that I did not specifically draw it to the attention of his office. The right hon. gentleman may have been out of the house at the time.


Mr. Stanley Knowles (Winnipeg North Centre):: A supplementary question, Mr. Speaker. Can the Secretary of State inform the house whether any changes are contemplated in connection with C.B.C. news broadcasts that would include the sponsoring of those broadcasts by commercial interests?


Julia Verlyn (Judy) LaMarsh: I have seen speculation in the press. I do not know, but I shall be happy to find out.


Stanley Howard Knowles: And bring it to the attention of the house, please.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Russell C. Honey (Durham):: Mr. Speaker, I have a question for the Minister of Transport. May I ask the minister whether he can now report on the tragic accident at the C.P.R. level crossing on Hope Street in Port Hope last Saturday night.


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I promised to make inquiries, and found that as early as 1962 the board recommended that automatic protection should be installed. The town of Port Hope, unhappily, felt that the expense was too great at that time and did not proceed with it. The board recommended it subsequently. It was not until January, 1966, that the municipality requested the protection. As soon as the application was received and considered, the board issued an order to the C. P. R. to put in the protection. The protection was all but on the point of being installed when this unfortunate accident occurred. It is regrettable that on account of the unfortunate chain of circumstances it was not done earlier.

November 24, 1966
Inquiries of the Ministry FINANCE



REQUEST FOR REMOVAL OF SALES TAX ON RESIDENTIAL BUILDING MATERIALS

[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 Labour. My question is based on five telegrams I have received from builders, real estate companies and related building trades people since the minister made the announcement of the increase in the interest rate on C.M.H.C. loans from per cent to 7i per cent. Is the minister giving consideration to a suggestion made by the president of the National Home Builders Association in which he recommends that the 11 per cent sales tax on residential building materials be remitted, similar to the situation that exists in respect of schools and other buildings?


John Robert (Jack) Nicholson: Mr. Speaker, I believe that a similar question was put to my colleague the Minister of Finance yesterday who said that, while the housing problem was always under study, no thought was being given to implementing at this time the suggestion put forward by the hon. member. I may say also that I have received several messages from housebuilders associations commending the government on its recent action.


Alfred Dryden Hales: A supplementary question, Mr. Speaker. Has the minister read the other recommendations as contained in the news release from the president of the National Home Builders Association?


John Robert (Jack) Nicholson: Yes, I have read the brief with interest. I will be communicating with the president of the National Home Builders Association regarding the brief.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Minister of Transport and ask whether he is yet in a position to make any announcement about changes in the regulations which apply to the manning of ships and safety matters, particularly with reference to the St. Lawrence.
[Mr. Pickersglll.l


John Whitney Pickersgill: No, sir, I am not in a position at the moment to do this. My hon. friend the Minister without Portfolio is giving very particular attention to this matter. When there is an announcement to be made, in view of his labours in this field I am going to ask him to make it.


Frank Howard: May I direct a supplementary question to the Minister without Portfolio and ask whether he would be kind enough to be here on Sunday evening at ten o'clock so we can talk about this matter.


Some hon. Members:: Oh, oh.



REQUEST FOR TARIFF PROTECTION AGAINST SHOE IMPORTS

[Stage Direction]
On the orders of the day:
Mr. Alcide Simard (Lac-Saint-Jean):: Mr. Speaker, my question is directed to the Minister of Trade and Commerce.
Will the minister take the necessary measures to protect the interests of the Canadian shoe manufacturers, in view of the importation of shoes from foreign countries?


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Mr. Speaker, I shall inquire about that matter, and I shall be able to give an answer to the question tomorrow.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquette (Lotbiniere):: Mr. Speaker, my question is directed to the Minister of Forestry and Rural Development. Yesterday he made a stirring speech in Montreal in support of the hon. member for Mercier (Mr. Boulanger) who made also a stirring speech and was cheered by the members of his association.
The question I want to put to the minister is this. Is he in a position to announce, today, or fairly soon, the names of the future members of the new livestock feed agency?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: Mr. Speaker, I hope to be able to announce the names of those appointed to that agency before the end of this session.
November 24, 1966	COMMONS DEBATES	10279
Inquiries of the Ministry
[English]	date of the extension of C.B.C. television
UNITED NATIONS	service in northern Manitoba.



PROTESTS BY ASIAN NATIONS CONCERNING MAINLAND CHINA POLICY

[Stage Direction]
On the orders of the day:
["Mr. Speaker, I should like to ask the Prime Minister a supplementary question. Would his government be willing to approach the government of the People's Republic of China to see whether we might not have a two-China policy in so far as the exchange of diplomats between ourselves and that country is concerned?"]
Mr. F. J. Bigg (Athabasca):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In the minister's absence perhaps the Prime Minister would answer it. In the minister's "Nobel" efforts to strengthen the United Nations, would he inform the house how many Asian nations have strongly protested Canada's stand on the two-China policy?


Lester Bowles Pearson: Mr. Speaker, I will be glad to bring the question to the attention of the minister at the United Nations.


Hon. Martial Asselin (Charlevoix):: Mr. Speaker, my question is intended for the Prime Minister.
Would he tell the house whether the Canadian formula for the admission of the two Chinas to the United Nations will be supported by the great powers which are members of that organization?


Lester Bowles Pearson: Mr. Speaker, I understand the estimates of the Department of External Affairs will be before the house shortly. Perhaps this matter could be dealt with at that time.



[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I should like to ask the Prime Minister a supplementary question. Would his government be willing to approach the government of the People's Republic of China to see whether we might not have a two-China policy in so far as the exchange of diplomats between ourselves and that country is concerned?



TELEVISION


[Stage Direction]
On the orders of the day:
Robert Simpson: Mr. Speaker, I should like to address a question to the Secretary of State. Is she now in possession of the information which she said would be necessary before announcing the definite 23033-651


Julia Verlyn (Judy) LaMarsh: No, Mr. Speaker. The president of the corporation was before the committee until yesterday, and I was here in the house while my estimates were being discussed. I have not had a chance to discuss this matter with him today, what with cabinet meetings, etc.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, I should like to address a question to the Minister of Veterans Affairs. Since the minister announced the new increases in war veterans allowances and disability pensions, has he received many representations asking that consideration be given to increases in the long service pension, and does he contemplate any action in this area?


Hon. Roger Teillel (Minister of Veterans Affairs):: Mr. Speaker, I do not recall any representations with that particular point in mind. I will have it checked and perhaps give the information to my hon. friend tomorrow.



AMENDMENT RESPECTING WITHDRAWAL OF 365-DAY PROVISION

[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: A supplementary question, Mr. Speaker. Several days ago I asked the minister a question which the acting minister took as notice. I wonder whether the minister can now tell us anything with regard to the consideration being given to the 365-day clause under the War Veterans Allowance Act?


Roger-Joseph Teillet: Mr. Speaker, it is not contemplated that under the amendments that will be submitted by reason of the supplementary estimates there will be any change with respect to the 365-day clause; not at this time.



INQUIRY OF THE MINISTRY

[Stage Direction]
*
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I have a question I would like to address to the Solicitor General, who is responsible for the Royal Canadian Mounted Police. Since the Santa Claus case murderer, Marcotte, is now doing life for murdering two
COMMONS DEBATES	November 24, 1966
Inquiries of the Ministry policemen, would it be possible that the cabinet might dispense with any trial for the chap in Edmonton who has only shot one, so that his parole six years from now will not be unduly delayed?


Mr. Speaker:: Order, please.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put a question to the Minister of Finance and Receiver General or, if the matter does not come within his purview, I would ask the Prime Minister to answer it.
In order to better determine the economic fluctuations which cause increasing concern, does the government consider setting up a research institute on economic matters and ordering that the Dominion Bureau of Statistics be extended?


Mitchell William Sharp: Mr. Speaker, the Economic Council of Canada has made suggestions along these lines and they are being studied by the government.



LAFONTAINE, ONT.-DISCOVERY OIL DEPOSITS

[Stage Direction]
On the orders of the day:
['Mr. Speaker, I must say at the outset that the type of attack launched in this house by the hon. member for Prince Edward-Lennox is totally unwarranted.\nOn behalf of the President of the Treasury Board I have the following statement to make in reply to the hon. member. On the recommendation of the Civil Service Commission the Treasury Board has established, by Treasury Board Minute 658237 of October 20, 1966, a differential of 7 per cent of the actual rate of pay, rounded to the nearest dollar, received by employees in secretarial, stenographic and typing positions in which adequate performance of duties and effective service to the public requires the use of both official languages, and has approved payment of the differential to incumbents of such positions who are required to use and are actually using a second official language at least 10 per\nProceedings on Adjournment Motion cent of their time in the performance of their duties and are qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages.\nThe Treasury Board minute requires the deputy head to certify that an employee is qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages, and provides that payment of the differential may be made with effect from a date not earlier than October 1, 1966, provided the deputy head applies to the Civil Service Commission for a test of competence and the employee is qualified by the commission before February 1, 1967.\nEmployees occupying positions in the secretarial, stenographic and typing group may be deemed to have been qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages if, at the time of their appointment, the essential qualifications included knowledge of both official languages under the provisions of section 47 of the Civil Service Act. Other employees in such positions must submit to a test of competence in the other official language in order to qualify for the differential.\n[DOT] (10:10 p.m.)\nIn future, any candidate for appointment in this group claiming competence in both official languages or any employee already in the group who believes that he has acquired the necessary proficiency may be tested in both languages for the purposes of meeting this particular condition for payment of the language differential. In these cases the differential would be payable with effect from the date of the appointment if the other conditions are met.\nIn instances in which an employee who was not tested on appointment and who was found, after February 1, 1967, to occupy a position for which the differential was warranted, the differential will be payable with effect from the date on which the commission is requested to establish the competence of the employee concerned.\nMotion agreed to and the house adjourned at 10.15 p.m.', '\n\nFriday, November 25, 1966']
Joseph Alcide Simard: Mr. Speaker, I shall direct my question to the Minister of Energy, Mines and Resources.
Can the minister tell us whether it is true that his department intends to prevent 70 French Canadian farmers in Lafontaine, Ontario, from pumping oil discovered on their lands?


Mr. Speaker:: Order. I think that this question should be placed on the order paper.

,	FISHERIES
MINIMUM PRICES RECEIVED BY FISHERMEN On the orders of the day:


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, a little earlier the Minister of Agriculture was involved in questions about subsidies to producers. I should like to bring 
his colleague the Minister of Fisheries into the picture by asking him a question arising from a press release datelined Vancouver which reached my office today from his department, indicating that 11 cents per pound may be paid to fish.ng companies for skinned dogfish flaps, and that the fishermen must be reimbursed at specified minimum costs. I would ask the minister to spell out what are these specified minimums to be paid to the fishermen inasmuch as 11 cents a pound is being paid to fishing companies.


Mr. Speaker:: The immediate urgency of the question is not quite apparent to the Chair. If the minister feels there is urgency he might answer the question, but certainly I do not think it is urgent.


Hon. H. J. Robichaud (Minister of Fisheries):: Mr. Speaker, it would take too much time in the question period to answer the question in detail, so I will ask the hon. member to contact my office and I will be able to give him the information.

The house in committee of supply, Mr. Batten in the chair.



[Stage Direction]
1. Administration, operation and maintenance including payment of remuneration, subject to the approval of the Governor in Council and notwithstanding the Civil Service Act, in connection with the assignment by the Canadian government of Canadians to the staffs of the international organizations detailed in the estimates, and authority to make recoverable advances in amounts not exceeding in the aggregate the amounts of the shares of those organizations of such expenses, and authority, notwithstanding the Civil Service Act, for the appointment and fixing of salaries of Commissioners (International Commissions for Supervision and Control in Indo-China), secretaries and staff by the Governor in Council; assistance and repatriation of distressed Canadian citizens and persons of Canadian domicile abroad, including their dependents; payment to the Roosevelt Campobello International Park Commission for the purposes and subject to the provisions of the act respecting the commission established to administer the Roosevelt Campobello International Park; a cultural relations and academic exchange program with the French community; payment to the Gut Dam International Arbitral Tribunal, and grants as detailed in the estimates, $15,403,400.
The Chairman:: Estimates of the Department of External Affairs for the fiscal year ending March 31, 1967, vote No. 1. This item will be found on page 94 of the blue book.


John George Diefenbaker: Mr. Chairman, the arrangements made under the new rules with regard to the limitation of time on estimates
November 24, 1966

have proven ineffectual, as I dared to argue when we discussed making these changes. Many hundreds of millions of dollars will receive consideration in a matter of hours, because of limitations imposed by the rules which deny to parliament the right fully to investigate and examine expenditures.
Our experience With the Department of External Affairs during the last few weeks, when we have endeavoured to secure information on the government's stand on the admission of Communist China to the United Nations, has been that j.he answers have been evasive and a denial of the rights of parliament. For answers we have had to read the press.
I have asked a number of questions. I am not going to make reference to them in detail because I want to Emit myself so that others can advance their views. But the answers given by the minister of external affairs and the Prime Minister during the last two or three weeks, when I asked whether certain plans were being made, indicated that references in the press were merely speculative. We found ourselves faced with fatuous answers, some of them self-contrad ctory, and we have had to wait until the presentation of Canada's position by the minister in the United Nations to ascertain Canada's stand.
In the last few days there have been serious revelations about this government's attitude in playing with the money that it has at its disposal. How do we know for example, whether expenses incurred in connection with travelling-and no government has ever travelled farther with less result-are actually to be found in the estimates? How are they being covered up? How are they being concealed?
We have only to look back to the situation a few days ago when we in the opposition were arguing the case in connection with unification. The threat of the government was that unless we passed those estimates and discontinued the argument, government employees would not receive their salaries. That was a deception practised on parliament. Finally the government found it had available several millions of dollars hidden away from the people of Canada in Benson's sock. This was only revealed when it was necessary to find a way to prevent the opposition from continuing its argument regarding unification, and the necessity for the unification measure to be placed before a committee.
According to the Auditor General, what was found was not $7 million, as was stated at the 23033-651J
Supply-External Affairs time, but some $30 million. This is an indication of the way the government plays with the rights of parliament. Here is a government which casually scrapes up $30 million, and has that sum available when needed in order to defeat the right of parliament to discuss a matter of national importance.
[DOT] (3:20 p.m.)
The government had a special open account. There was another account, and they dug into that. They took from it something that had not been approved by parliament. Is it any wonder that this government stands condemned by the Auditor General when he says, as reported in the press of today's date-and I use his words-that parliament's role in controlling the public purse has been eroded in the past three years. This is a most serious situation, the eroding of parliament by a government that plays with the rights of parliament and with the money of the people of Canada. This indicates how far removed from parliamentary government we have been in the last three years-and that is the view of the Auditor General of Canada. It is an example of methods introduced by a government composed of many ex-bureaucrats. It is time for the Prime Minister to answer the people of Canada, who are paying the highest taxes in history. Where does their money go? Imagine a government that finds $30 million-


Mr. Johnston:: On a point of order-


John George Diefenbaker: -that it did not realize-


Howard Earl Johnston: On a point of order, Mr. Chairman.


John George Diefenbaker: -was-


Howard Earl Johnston: On a point of order, Mr. Chairman.


John George Diefenbaker: Is this a point of order?


Howard Earl Johnston: Which estimates are before the house at the present time?


Lester Bowles Pearson: Finance?


John George Diefenbaker: Mr. Chairman, I am speaking about the estimates and I am dealing with the way in which this government plays fast and loose with parliament. What is that to the hon. member? His party supports the government, right or wrong-they think it is always right.
Having said that-


Howard Earl Johnston: On a point of order.


John George Diefenbaker: Having said that-
November 24, 1966

Supply-External Affairs


Howard Earl Johnston: Mr. Chairman, I rose on a point or order.


John George Diefenbaker: On a point of order?


Howard Earl Johnston: Yes, on a point of order. I did not hear any reply, Mr. Chairman, to the question of which estimates are before the committee of the house at present.


Herman Maxwell Batten: The estimates before the committee at present are the estimates of External Affairs found at page 94 of the blue book. The right hon. Leader of the Opposition.


John George Diefenbaker: The right of parliament is to examine-


Howard Earl Johnston: On a question of privilege, Mr. Chairman-


John George Diefenbaker: -accounts. I shall refer in a moment to the way in which this parliament has been fooled by this government in the last few weeks-


Howard Earl Johnston: I rise on a question of privilege.


John George Diefenbaker: If you will allow me-on the question of the recognition or omission of Communist China from the-


Howard Earl Johnston: On a question of privilege; the right hon. Leader of the Opposition has made a serious charge that this party supports the government on each and every issue. I ask him if he has not heard about yesterday afternoon, which was one example of the several times when we have not supported the government.


Herman Maxwell Batten: I am sure the hon. gentleman agrees that there is no question of privilege.


John George Diefenbaker: I say to the hon. gentleman, if the batting average is one in a hundred votes, he should not boast about how he voted yesterday. From now on November 23 will be a red letter day in the history of Social Credit, for yesterday, when they looked around and saw the government could not be defeated they joined with the opposition.


Lester Bowles Pearson: Why could they not be defeated?


John George Diefenbaker: Sir, what has happened with the finding of these millions indicates that the government regards parliament as a nuisance. That is their general attitude.
For the past several weeks we had been trying to find out what the government would

do about admitting Communist China to the United Nations, and the answers we received were not true.
That is the second phase of how this government disregards parliament. I refer to the answers given in the last few days. On November 18 we asked what the situation was and what action would be taken. We wanted information on Canada's stand on the two-Chinas proposition, and the Secretary of State for External Affairs said as reported on page 10044 of Hansard:
Mr. Speaker, in my absence the Prime Minister dealt with questions not unlike those which have just been put by the right hon. gentleman. As he said, the story in the press was speculative, and the story which I saw this morning is also speculative.
It was not speculative; it was true, Mr. Chairman. The press of this country and other parts of the world had the information which was denied parliament. I can give other examples. On November 15 the Pr me Minister gave answers. On October 5, answering a question by the hon. member for Oxford there was the same evasion. On November 10 I asked this question as reported at page 9764 of Hansard:
The question I have in mind I direct to the Prime Minister because of news items appearing in various parts of the world regarding the seating of Communist China in the United Nations. We have not been able to get any conclusive information here and I now ask the Prime Minister whether or not Canada is joining with a number of other nations in presenting a resolution to the United Nations under the terms of which the Secretary General will explore the basis upon which Communist China might be seated in the Security Council and Nationalist China in the assembly.
And the Prime Minister said:
Those stories to which the right hon. gentleman refers are purely speculative and it would be quite improper for me to comment on speculative stories, especially when they deal with so important a matter.
Those answers were not truthful and were an evasion of parliament. At the very time the answers were given, the stand that would be taken by the Canadian government at the United Nations was being made known in various parts of the world. Yet parliament could not secure the information available to other nations. We asked that no decision be made until parliament had an opportunity of discussing the matter, and that was brushed aside, not because it was speculative but because it was contrary to the general concept of this government.
Going back to 1965, on November 17 the Secretary of State for External Affairs, in a
November 24, 1966	COMMONS DEBATES
statement that wafted a breeze of ambiguity in dealing with the admission of Communist China, said this:
Canada would have welcomed the opportunity to see Communist China take a seat in the world organization had Peking made this possible. If that has not yet happened, it is because Peking itself has set a price on participation which is unacceptable. In view of the Canadian government it is not for the United Nations to accommodate itself to the views of a single nation, however powerful or populous. It is for Communist China to make that accommodation. Much to the regret of the Canadian government there is no present evidence that she is ready to do so.
Then he says that he believes in universality and that because of certain things which have happened Communist China will not be supported in its application to the United Nations. On page 3 of the statement issued by the department we find this:
-after very careful consideration, the Canadian government decided that it could not in present circumstances do other than vote against the resolution which was before the Assembly. In voting as it did, the Canadian government was guided by the following considerations.
[DOT] (3:30 p.m.)
First, in a press conference on September 29, the Communist Chinese foreign minister, Marshal Chen Yi, posed a number of new conditions which would have to be satisfied if Communist China was to agree to take its seat in the United Nations.
Note the words, "was to agree to take its seat".
As part of these conditions the United Nations was asked to rescind its resolution condemning Communist China as an aggressor in Korea where Canadians fought and died to defeat aggression. The organization was being asked to review and revise its charter and it was being asked to admit to membership all so-called independent countries and to elect from membership all those which Peking chooses to regard as "imperialist puppet states".
Second, there is another condition of long standing from which Communist China has never departed. This is that the population of Formosa must be denied any form of representation in the United Nations.
And so it goes.
It remains the hope of the Canadian government that Communist China will itself come to recognize that it must be prepared to take a seat in the United Nations and negotiate its differences as other states have done and are bound to do under the United Nations charter.
I therefore ask the Prime Minister this: what differences have come about in the attitude of Communist China and the viewpoint of its leader Mao Tse-tung or its foreign minister since November 17, 1965, when the Secretary of State for External Affairs said we should in no circumstances
Supply-External Affairs admit Communist China to the United Nations on the basis of the terms it was seeking to impose?
Have those terms changed? Have there been any communications from Communist China to indicate that the views held a year ago have altered? There has been nothing of the kind. Those views have not changed. What has happened, then, in the last year, to change the attitude of the government? What has happened to encourage the government to repudiate the declaration by the Secretary of State for External Affairs to the effect that Canada could not accept Communist China as a member of the United Nations on the basis of the considerations which that country had put forward?
Now, the United States, through its information service, has issued a summary of these matters, and regarding the setting up of a committee has this to say:
If such a committee could produce a solution "taking into account the existing situation and the political realities of the area," as the resolution provides, most U.N. members would probably be delighted to put an end to the annual ritual of the China debate. For its part, certainly, the United States wants its position to conform to these realities, but it also seeks a clear understanding of what the realities are.
One is that the Peking regime controls the mainland of China. Another is that the government of the Republic of China controls the island of Taiwan.
Then, they ask:
Will (Communist China) assume the obligations of the U.N. charter, in particular, the basic obligation to refrain from the use or threat of force against the territorial integrity or political Independence of any state?
I ask the Prime Minister to tell us why the government has changed its viewpoint on this issue since a year ago. Has the tiger of Communist China become a lamb in the intervening months? Ask the people of Japan. Ask the people of India. Ask the people of southeast Asia. Has there been a change in the thinking of the Chinese Communists? They have exploded the biggest firecracker in Chinese history, the fourth in a line. There was the amazing performance, recently, when they were able to set off into space an atomic weapon effective up to 700 miles, bringing India, Malaya and Japan within the area of threat from Communist China.
What is the reason for the new attitude? Did it grow out of the tour of the Secretary of State for External Affairs? Every time the government gets into trouble locally, somebody sets out on an external affairs jaunt.
November 24. 1966

Supply-External Affairs The hon. gentleman went to Moscow. Was Gromyko impressed? What was done at Moscow with regard to representations from Canada on behalf of the captive peoples? Many of their representatives are Canadians today. What was done there in support of the right to self determination of the people of Ukraine and the Baltic countries? Other problems are d.scussed, rather than those affecting many of the people of Canada. I therefore ask: what assurance has Canada, or any nation in the western world, received from the government of Communist China regarding the acceptability or otherwise of the proposal which has been advanced?
What is the attitude of that great man Chiang Kai-shek who stood with his people for freedom and who has stood, with a population of 12 millions, against hundreds of millions across the strait of Formosa? Has he been consulted? What is his attitude? Was Canada consulted about the Italian proposal to set up a study committee, before that proposal was formally advanced? I ask this because when I raised certain questions respecting Canada's attitude, the answers indicated the press references were speculative.
The minister went to New York. He spoke eloquently. 1 heard him. But what was the reaction? Was he merely playing to the gallery or is there to be any assurance given to the people of the western world, as well as to the people of Asia, that Communist China is willing to turn its back upon its past, to repudiate its wrongdoing and its tyranny?
The kind of international gamesmanship which Canada is playing has done harm to this country's image abroad. What is the attitude of the United States toward this new proposal of the Canadian government? Did Chester Ronning try at any time to obtain assurance that the proposal would be acceptable? If no such assurance was received, and there has been no change since a year ago, then what happened in the United Nations as far as Canada's representative was concerned was simply an exercise in futility, one which brought no distinction to this country.
[DOT] (3:40 p.m.)
I turn now to the next problem, Rhodesia. You, Mr. Chairman, w 11 recall that from January to May, the Prime Minister and the Secretary of State for External Affairs sa d that the sanctions would be effective within weeks. The hon. member for W nnipeg South Centre and the hon. member for Oxford said this was nonsense but the government of Canada said, just watch.
IMr. Diefenbaker.l
The government took a strong stand in favour of sanctions because sanctions would not hurt Canada. I asked at that t.me what would be the attitude of the United Kingdom? You cannot control the Smith reg me unless South Afr.ca is controlled. That is as clear as can be. We asked would Brita n part c.pate in a system of sanctions that would deny her exports worth $750 million a year? We asked, when it is finally decided that noth.ng can be done and the matter comes before the Un ted Nations w 11 the United Kingdom support sanctions against South Afr ca? W 11 it deprive itself not only of $750 mill on exports but also of approx mately $150 mill on a year in investment income? These are things about which the government should be informed.
Sanct ons have not worked. Sanctions did not work in 1935 and 1936 when it was felt they should be imposed against Italy by the League of Nations. The reason no act on was taken at that time was that the government of Canada, under the r ght hon. Mackenzie King, repudiated the stand of the Canadian representative at the League of Nations. During a recent visit to Ottawa, Anthony Eden, now Lord Avon, told a press conference that sanc-t'ons w 11 not be effective. In these circumstances, we have a right to know what is the pol'cy.
What is Canada go ng to sacrifice? What trade w'll be affected withn this nation? Article 41 of the Un ted Nat ons charter permits, among other th ngs, complete or part al inter-rupt'on of economc relat'ons. When the security council calls member states to apply such measures they w ll be under b nd ng treaty obl gation to do so. Even non-members may be forced to participate and these, among others, include West Germany and Switzerland.
What is France's attitude? Up to the present, France has given no indication of supporting a policy of sanctions. Without that support can sanctons actually be introduced by the United Nations?
With n the last month the United Nations General Assembly voted 89 to 2 with 17 abstentions in favour of the use of force. The Pr me M n ster of Canada has stated Canada does not accept that v ew, and that force will not be used. But what is the attitude today? At the t me sanct ons were appl ed we said ths was a matter part cularly within the responsibility of the United Kingdom. We doubted whether it was a matter that should come within the ambit of the United Nations.
November 24, 1966

We doubted that it was a question that could properly be dealt with in the Commonwealth Pr,me Ministers' Conference. What action was taken there? They produced a communique, after days of argument, in September, 1966, which was worded in such a way as to secure the support of all but one of the African nations within the Commonwealth. But now, we are at the point of decision and the moment of truth. What does this government now contemplate that will be effective? Does Canada now assert that she is prepared to join in the application of sanctions under the United Nations, not only against the alleged wrongdoer but also against South Africa?
We want to know the government's attitude and we have the right to know, even though over and over agam we have been denied information.
I turn now to another matter and you will note, Mr. Chairman, that I am just covering these items as quickly as I can. There is Viet Nam. There are some who have rapid fire solut ons for every problem, and who say that the United States should get out of Viet Nam immediately. Viet Nam cannot be solved in that way.
During the last month General Eisenhower gave an interview in which he discussed the strange and bizarre development, that has taken place in the relationship between Communist China and the U.S.S.R. He said:
In the long run, Asia may become our most serious foreign problem. If Red China continues to develop destructive power, and remains dedicated to world revolution by naked force, then it is a problem that will have to be handled one of these days-and it is not going to be pleasant. The hope is that as a nation gains in wealth, as It gets more consumer goods, then it tends to become more cautious, in order to protect its investment. Some say this has happened in Soviet Russia. This is possibly true. If Red China dedicates everything, not to developing the welfare of its own people but to a doctrine of world revolution by force, then it will be a serious problem.
Some say the United States should get out of Viet Nam. If they get out of Viet Nam freedom is challenged all over the world. That does not mean that everything should not be done to bring about a negotiated settlement. I know there will be disagreement on this, but I cannot see a return to the Geneva Agreement as being within the realm of possible implementation.
What can be done? Some say the way to victory is to destroy. That has been the history of warfare for 2,000 years. Bombing has
Supply-External Affairs not succeeded in undermining the determination of the Viet Cong. It has had almost the reverse effect, similar to the result that followed when Nazi Germany decided to blow up London. It has engendered a resistance increasing with the passing months.
There are those who say, "Let us increase the area with.n which bombing operations take place in North Viet Nam". I believe that in addition to military considerations, political cons.derations must be given the full sway. Is it not possible, that if at this time the United States declared an end to bombing for a period of two months as a beginning, there would be laid a foundation from which the possibility of peaceful negotiation might be the result?
[DOT] (3:50 p.m.)
There have been two examples in the past. There was the one in early 1965 of a few days and the one of 37 days in December of 1965 and early 1966. The discontinuation of the bombing d.d not have the effect that was hoped for. In the last eight or ten months the United States has bombed that area to an extent beyond that to which any other part of the world has ever been saturated. I am theo-riz ng now when I say this, but does there not come a time when it may be hoped that a change has taken place? I support the stand of the United States in remaining there. I oppose their withdrawal without assurance that those countries wh.ch adjoin Viet Nam, such as Thailand, Laos, Cambodia, Burma, Malaya, and so on, shall be protected. Holding that v.ew, I am more and more driven to the conclusion that, as a nation, we should call upon the United States to discontinue bombing. Now, the military men will say, "Oh no; we cannot do that". That has been the story from the time of Julius Caesar to the present; that is, that the only way to win is on the battlefield.
There are, however, two battlefields today, one of war and one of ideology. We do not convert people to think our way by pouring bombs upon them, day after day and week after week. In the United States more and more outstanding authorities are saying they cannot win there. They will not lose, because they keep increasing the numbers of troops. They cannot lose, but they cannot win. I admit to a strong feeling of sentiment in respect to the tremendous sacrifice the United States is making in the cause of freedom. We as their neighbours should call upon the United States to end the bombing for a reasonable period in order to ascertain whether or not there may be any alteration in the viewpoint of Hanoi or of the Chinese.
November 24, 1966

Supply-External Affairs
The U.S.S.R. stands by. Hanoi is stubborn because standing behind it is Peking, at the very time when Peking is doing everything it can to incite and destroy United States troops in Viet Nam, and at a time when it has 100,000 Chinese troops on the northern boundary of Viet Nam ready to move, the government of Canada takes it upon itself to say to communist China, "Come in to the United Nations". Everyone believes in universality. Canada believes in universality. But before that invitation to China is given, the government of Canada should tell the people, instead of concealing the facts as it continually has done with respect to this subject, whether Communist China is prepared now to turn its back on its past and present as becomes a member of an organization dedicated to peace.
There are other matters with which I could deal, but I am restricting myself to these points on this occasion. We have had insufficient opportunity to discuss these matters in this house. The government has answered with half-truths. Indeed I am complimenting the government when I say it has given us half-truths on this subject, but I do so because I never will ascribe to this government such wrongdoing as mere stupidity will explain. That has been their attitude. They have failed to take the people of Canada into their confidence. They run down to the United Nations, spreading abroad a great speech in respect of what Canada stands for and Canada's policies, and yet the people of Canada have no idea before the speech is made what it is going to be except by reading the international press.


Mr. Brewin:: Mr. Chairman, this debate on the estimates of the Department of External Affairs, although in this case restricted in time, does afford to the parties in the house-if not unfortunately to very many individual members-the opportunity to state their views in respect of at least some of the great international issues which face the world. As the available time is limited, it is necessary to concentrate on the highlights. Before I go into this in detail, however, I should like to consider in a very general way the sort of world in which we live. Barbara Ward, in a book entitled, "Spaceship Earth" has summed it up well in the following phrase:
In our world today all the irresistible forces of technology and scientific change are creating a single, vulnerable, human community."
The primary task of this generation is to create functioning world wide institutions. These institutions are required to breach the
[Mr. Diefenbaker.i
gaps of power, of wealth and of ideology which threaten the world with unprecedented disaster in the nuclear age.
Therefore, Mr. Chairman, I propose to discuss two of the continuing problems which face the world today. I also wish to address myself to one immediate issue; failure to solve this immediate problem will make progress in the solution of other problems difficult if not impossible. The continuing problems to which I refer are, first, the need for reconciliation between one quarter of the world which is governed by the People's Republic of China and the rest of the world. The second is the question of the vast and growing disparity between the extreme poverty of one part of the world and the relative affluence of the other part. The immediate problem to which I refer, and to which the right hon, Leader of the Opposition already has referred, is the continuation of the war in Viet Nam which stands as an obstacle to progress toward a more orderly world community. During the past week the government of Canada, at long last after many years of wavering, has taken a step forward in openly proclaiming in the United Nations the vital importance to that organization of securing the adherence of the People's Republic of China and, indeed, has made proposals designed to bring this about. I will have more to say about the Canadian proposal later.
In so far as this represents an important step in the direction which we in this party have urged for many years, we naturally welcome it and commend the government for its initiative. Later, I propose to suggest that the government go further if its initiative is to bear fruit and, indeed, if its initiative is not to appear hypocritical and unreal.
[DOT] (4:00 p.m.)
Before doing so, I should like to ask the committee to take a look at the broad general situation. Since 1949 the People's Republic of China has been the effective government of mainland China. The regime is a revolutionary regime, the result of a very genuine revolution, and I suggest it is very hard for contemporaries to look at such revolutions with historic perspective and with detachment.
The cost of revolutions runs high, not only in lives but in human passions. Revolutions are often ruthless, particularly in the phase in which the revolutionaries fear counter-revolution and suspect that such counter-revolution will be aided by external force. The French and Russian revolutions are evidence of this, and the Chinese revolution is no exception.
November 24, 1966	COMMONS DEBATES
Revolutions are often fanatical and selfrighteous. They claim a monopoly of the truth, but it is a mistake to spring from this to the conclusion that China is committed to world conquest. In fact, many of the most scholarly observers of the Chinese scene are convinced that this policy of China is based less on ideology and more on the history and traditions of China; its nationalistic ambitions and grievances.
China has suffered from a long period of humiliation from the western world. There is no need to detail here the history of crushing defeats in war, unequal treaties, foreign concessions and extra territoriality for foreigners. If we exercise any imagination at all, we should not be surprised to find, now that China is growing in strength, that it should express itself in bitter and uncompromising self-reliance. I suggest it would be wrong to go from this observation to a conclusion that western policy should be based upon containing communism and isolating one quarter of the world. Unfortunately, there are powerful governments, notably the government of the United States, which seem to base their policies unon the necessity of containing Commun'sm. It follows from that that they believe in the isolation of the People's Republic of China from diplomatic and other contacts with the western world.
It is our conviction, shared I believe by many members of this house, that this approach is a fatal mistake which sets the western world, particularly the United States of America and China, upon a collision course. It creates and at the same time feeds upon the view that war is inevitable. A wiser judgment is that when revolutionary regimes gain power they, like other human institutions, change in the course of time.
The men who made the revolution are nearly always intolerant and suspicious, but they grow in confidence and security. The practical problems of administering a new order bring to the fore new and less revolutionary and less isolationist groups of governors. On the other hand, enforced isolation prolongs the revolutionary era. It is not fanciful to attribute the Stalinist excesses in Russia to the indirect result of intervention and isolation of the U.S.S.R. Continued isolation of China may well play into the hands of Chinese extremists and might well postpone the day when more moderate elements will be ready to rejoin the world.
It is for these reasons that we warmly welcome the fact that at long last the Secretary of
Supply-External Affairs State for External Affairs, speaking for Canada at the United Nations, has proposed that the People's Republic of China should take the place of the National Republic of China in the general assembly and on the security council of the United Nations. This is a recognition of reality. For 17 years now, mainland China has been firmly governed by the present regime. The pretense that the Nationalist Republic of China controls China is clearly an empty sham which in no way corresponds with the realities. There is no sense in hoping that the future peace of the world can be based upon perpetuating a situation which is based upon such a sham.
It seems quite useless to talk about a two-China policy which accepts the claim of the Nationalist Republic of China, which now controls Formosa, to have control over China as a whole. Indeed, such a view would perpetuate the myth that there is some real prospect that by means of counter-revolution the nationalist regime may take control of China. The Chiang Kai-shek regime itself does not recognize the two China concept. We, in this party, are prepared to recognize the fact that the nationalist Chiang Kai-shek regime controls the island of Formosa. We think that if this regime seeks admission to the United Nations general assembly on this basis, the fact of its control of Formosa should be recognized and it should be admitted on that basis.
Admittedly it may not be possible for many years, but when it is possible the people of Formosa should be given an opportunity to determ no their own destiny. It may well be that the present regime in Taiwan would be unwilling to accept a place in the United Nations on this basis. In other words, it would be unwilling to give up its claim to speak for China as a whole, but I suggest the fact that it controls the island of Formosa is the only factual basis upon which it is entitled to sit at the United Nations. If the regime there does not choose to accept this position, that is its own affair. It should not be permitted to hold up, by a claim which no longer is real, the acceptance within the community of nations of the government which in fact has clearly demonstrated its control over the mainland of China.
We believe that the government of Canada must follow up its first step by further action. The government of Canada cannot of course control the decision of the United Nations or the views of its allies, but it should have the courage of its convictions and should now
10288	COMMONS
Supply-External Affairs afford diplomatic recognition to the People's Republic of China.
We have pursued trade with China and since 1961 have sold $700 million worth of Canadian wheat to that country. This is a policy approved, I believe, by Canadians of all parties. I may possibly exclude the party for which the hon. member for Red Deer speaks.


Robert Norman Thompson: Thank you very much.


Francis Andrew Brewin: However, I say it would be hypocritical for Canada to continue to accept the benefits of trade, to propound in the United Nations the need to end the isolation of the People's Republic of China, and then fail to take a step which is w thin its power. That step is to afford diplomatic recognition. I suggest it would not only be hypocrit cal to do so, but it would appear to be hypocritical and would destroy all of the benefits that may flow from the in Dative the government has undertaken in the United Nations.
It may be said that this recognition is no more than an idle gesture. I suggest, however, it is very much more than a gesture. It would be a symbol of reconciliation. Even if impossible conditions on the exchange of diplomatic missions were to be imposed by the People's Republic of China, a milder regime in the future might well take up the offer that ought to be made by Canada.
Let me pass from the subject, Mr. Chairman, to a closely related subject, the continued acceleration of the war in Viet Nam. It is not necessary for me to repeat the view that members of this party have advanced from time to time. This view has been that the involvement of the United States in that war is and has been a tragic mistake which is endangering the whole world and is, in fact, defeating the vital interests of the United States itself.
In the present context all that is necessary to be said is that since we last discussed this matter in th;s house this war has continued to escalate. I heard on the air today that the United States now has about 380,000 troops involved. It is continuing a massive and expanded program of bombing North Viet Nam with which it is not formally at war. There is no end to this tragic conflict in sight, certainly not from the military point of view. The escalation has not reached the possible end of its course. The right hon. Leader of the Opposition referred to the 100,000 Chinese troops on the border. They have not been used, thank God; but perhaps with a further escalation of the war they may come into action.

DEBATES	November 24, 1966
Then, we will have tragedy compounded on tragedy.
[DOT] (4:10 p.m.)
We have expressed our view that in so far as United States involvement has been based upon a theory that Chinese Communism must be contained, this is a mistake. We disagree not only with the basic theory but with the effectiveness of the method sought to be used to contain Commun.sm, the escalation of the war in Viet Nam, which is likely to produce precisely the opposite result.
The real problem at the present time is not what were the causes of the war, but how to put an end to hostilities. It is perfectly obvious that there is no way to do this except through a process of negotiation. The key issue, therefore, is how can the process of negotiation be init.ated and brought to a successful conclusion? The Secretary of State for External Affairs recently visited Poland the U.S.S.R. and Italy, and also spoke to His Holiness the Pope. No doubt in recent days he has been in close contact with the Secretary General of the United Nations, whose efforts to bring about negotiations are well known.
I ask the government spokesmen-indeed I ask the r.ght hon. Prime Minister-to tell this house very frankly whether or not all of these governments and authorities have not expressed to our representatives and our government a clear view that a necessary preliminary to negotiation is that the United States of America should cease the bombing of North Viet Nam. I ask whether or not the Canadian government is willing to associate itself clearly and unequivocally with this view. Has the government said, or will it say, to the United States of America that Canada advises this step, namely the cessation of bomb ng, be taken in the interests of peace? If such advice has been given, will it be given publicly and openly?
In the statement made by the Secretary of State for External Affairs the other day on his return from his recent trip, he referred to what he called certain oversimplified suggestions that were being put forward. He included in these so-called oversimplified suggestions the proposal for unilateral decision, presumably by the United States, to stop the bombing of North Viet Nam, with no indication of what the other side might do in return. In these words, the minister appears to be adopting the view put forward by the administration of the United States that before it stops the bombing of North Viet Nam it must have assurances of the withdrawal of
November 24, 196$

North Vietnamese units from South Viet Nam.
I suggest that this is an impossible condition. The involvment of North Vietnamese units in South Viet Nam is by no means to be equated with the American bombing of North Viet Nam. After all, the Geneva agreement does not recogn ze the existence of North and South V.et Nam as separate entities, but has stated that there is a temporary line of demarcation between them.
It has been the contention of the National Liberation Front of the North Vietnamese that what in effect is taking place is a civil war. A parallel to the United States demand that the North Vietnamese units be withdrawn from South Viet Nam before the United States ceases the bombing would be the demand of Hanoi that the United States withdraw their forces from South Viet Nam before they will negotiate. This is a demand which indeed has been made, but is equally quite unrealistic, we all agree, if genuine negotiations are to take place.
I know it is said that the bombing of North Viet Nam is a necessary military action. Its results to date certainly do not appear to have demonstrated its efficacy. In any event-and in this, at least, I agree with the right hon. Leader of the Opposition-the political importance of an end rather than a continuance of the war makes it essential that political considerations predominate over purely military considerations.
It is also stated from time to time that the United States has proposed negotiations, only to have them consistently turned down by Hanoi. This version of the facts is all too simple. The fact of the matter is that there have been continued escalations of the military effort by the United States, which have frustrated the possiblity of fruitful negotiations. It was shortly after Mr. Ronning returned from Hanoi and reported to the government here, and through them to Mr. Harriman for the United States administration, that a further United States escalation of the war took place in the bombing of Hanoi and Haiphong in the north.
The government has first-hand information from Hanoi, through Mr. Ronning, as to whether or not it is hopeless to contemplate negotiations with Hanoi. The government knows whether of not, in fact, it was the attitude of Hanoi or the further escalation of the war by the United States that frustrated the prospect of negotiations at that time.
What we have urged is that this government put its full weight behind the almost

Supply-External Affairs universal plea that the United States should once again seek the road of negotiation by a cessation of bombing. This would it seems to us, do more than anything else that Canada could do to end this tragic war. May I say, Mr. Chairman, that I do not believe our involvement in the International Control Commission is any reason why, on this vital issue, we should not express our views clearly and forthrightly.
I do not have time to expand upon the steps necessary to build a world community by more strenuous efforts to end the growing gap between the poverty of what might be called the "slum areas" of the world and the complacent "suburb", which includes Canada. In this party we differ sharply in our view of priorities in building a world community. We believe the time has come for a dynamic new stance on Canada's contribution to defence and international affairs. We think Canada is in a position to make clear that its defence contribution will be primarly available to support peace keeping and the growth of the rule of law within the ambit of the United Nations. This will involve a change in the present dispositions within NATO. The government appears to have adopted a static policy in this respect; it has not told this house very much about any changes that it proposes.
We believe that a substantially increased contribution by Canada to economic aid is called for, and that the present effort is just not good enough. Perhaps other occasions will enable us to expand, and give in detail, our views on these matters.
I had not intended in these remarks to touch on the question of Rhodes;a. The right hon. Leader of the Opposition did so. I will content myself by saying to the Prime Minister-and I think I speak on behalf of my party-that we will support the government in the imposing and enforcing, so far as Canada can do so, of effective sanctions on the illegal reg'me in Rhodesia. We will be happy to do so, either at the request of the United Kingdom government, which is the legal sovereign in that country, or through action at the United Nations.
[DOT] (4:20 p.m.)
We believe it is absolutely essential to maintain confidence not only in the United Nations but in the good faith of the western world and indeed of the Commonwealth. It should be made quite clear that the gestures we are making to bring this illegal regime to an end are not intended to be empty gestures or gestures which will be ineffective, but are

November 24, 1966
Supply-External Affairs designed to establish a legal regime, one which will not be based upon a colour bar or racial discrimination.
The Leader of the Opposition asked some questions on this subject. We do not ask questions; we are stating to the Prime Minister that we will support the government in any action that it takes in support of international law and the interests, of the world community.
May I conclude by saying that we in this party believe there are not only changes in detail required in our external policy, but also changes in the style and tone of Canada's contribution. We do not mean by this that Canada should repudiate its alliances or try to assume in international affairs a weight or importance that its power and position does not justify. We believe there is no doubt an important place for quiet diplomacy and for the influence which may be exercised, particularly in Washington, by means of such quiet diplomacy. However, we believe that the Canadian government owes it to the Canadian people, and more particularly to the younger people of Canada, to take a more vigorous and independent line on the great issues which are facing the world.
We welcome the new initiative taken in the United Nations by the Secretary of State for External Affairs on behalf of this government. It indicates a change in attitude and that we should be ready to put up with some criticism and coolness on the part of any of our allies who disagree with us. It is not enough today, if we are to have any pride in Canada's contribution as a nation, to be right or enlightened, as it were behind closed doors; we must be seen to be right and enlightened. I think that very often Canada's policies in this field are right and enlightened, but it is very d.fficult for the Canadian people to discern this in the miasma of words and ambiguities that often seem to shroud our policies.
In our view, Mr. Chairman, this does not mean that the conduct of our diplomacy should be a matter of emotional declamation. It means a continued and outspoken concentration an all these policies which we believe to be vital to the building of a world community and to a reconciliation between nations.


Robert Norman Thompson: Mr. Chairman, it is a privilege to be able to take part in this brief debate on external affairs, as a discussion of the estimates of this department permits us to do at this time. I am grateful to the hon. member for Greenwood for disassociating myself from
tMr. Brewin.]
the policies that he tried to enunciate. I respect his sincerity as a friend, but I fail to follow his logic.
However, while one might disagree with what should be Canada's external affairs policies, there is some satisfaction in at least knowing the policies in which he believes. As I listened to the Leader of the Opposition, I found it very difficult to determine just what were the policies of his party as they related to some of the major problems he discussed.
In the limited time at my disposal, I propose to limit my remarks to two specific areas of foreign affairs. First of all, I should like briefly to discuss NATO. It has been my privilege, along with 14 or 15 other members of this house and the other place, to take part in the recent NATO parliamentarians conference in Paris. That conference gave us the opportunity of visiting and seeing at first hand our own NATO forces in Europe and of talking with both officers and men. We saw the job they were doing, the problems they faced and were made conscious of the purpose of their being there. At the end of the conference we had a brief one-day visit to the free city of Berlin.
I point with considerable pride to the fact that the parliamentarians conference in Paris this year saw it change from an annual conference to some semblance of a permanent body. At the conference it was decided to transform the annual parliamentary conference into a permanent north Atlantic assembly, and hereafter the annual meeting will be just that. As the responsibilities and powers of this new north Atlantic assembly take shape, I think you will see for the first time a very definite organization, made up of parliamentarians and other representatives from the 15 member nations of NATO, which will assume a greater role in policy and decision-making.
I also draw to the attention of the house the fact that the president of this first north Atlantic assembly is a Canadian, the hon. member for Restigouche-Madawaska. In view of the fact that the concept of a parliamentarians conference was originally largely due to the vision and efforts of a great Canadian, who served as first president of the former organization, we now have the honour of being the country to supply the first president of the new organization. I am sure I am expressing the goodwill and opinions of all members of this house when I say that this is truly another indication that Canada is growing up and is playing a bigger and bigger role in this ever-narrowing world community of nations.
November 24, 1966

With regard to the position of NATO at the present time, despite the difficulties that have been caused by the withdrawal of France from the integrated military command, the role and purpose of NATO is even greater than before. I think this is realized particularly by our own personnel who serve NATO; and in this regard more than 11,000 of our armed forces are serving in France and Germany today. The men of the three air wings, and the brigade serving with them, are not only doing a tremendous job as ambassadors of Canada, but represent a great devotion and dedication to purpose so far as peace in Europe is concerned. They certainly play a very major part in maintaining the peace of the world.
I also say that the role of NATO is changing. This factor was a basic topic of discussion in the various committees at the parliamentarians conference. No one will deny that NATO's role is changing. Whatever was the motivation and reason for France's military withdrawal, it has precipitated a more rapid change in the role of NATO than ever. It was brought to our attention by the Secretary General of NATO and others that there is still a continuing military role for NATO in Europe. We talk of a detente and we hear a good deal spoken of the new softer relationships between east and west. This is good and we are grateful for every bit of ground that is gained.
[DOT] (4:30 p.m.)
However, the Secretary General of NATO brought to our attention that the armed forces of communist nations, under one direct command, have increased during the last year by some 40 per cent on the eastern side of the iron curtain; that today, facing the NATO military forces in Germany and France are more than 2 million communist troops at combat readiness, and that the armaments of those troops include nuclear arms. Also it was pointed out that particularly those nuclear arms, and he refers to missiles, have increased by 50 per cent in the last three years. It is wishful thinking for anybody to say that the time has come for the military withdrawal of NATO altogether. This is wishful thinking so long as communist forces continue to build up on the eastern side of the iron curtain.
Those who have had the privilege of visiting Berlin and seeing the wall of shame -incidentally it has been completely rebuilt and modernized into a permanent structure-will understand that the division of Germany is complete and the basic problem of
Supply-External Affairs peace in Europe is a long way from being settled. As against that, a most significant development of our parliamentarian's conference this year came about in the special committee of underdeveloped NATO nations. Specifically, I refer to Greece and Turkey. The delegates from Greece and Turkey, both leading parliamentarians in their own countries, sat on either side of the chairman of this committee. Both men agreed that relations between their two countries have improved a great deal in recent months, as evidenced by the four economic projects developed as a result of the committee. That is most encouraging. Those four projects relate to the development of irrigation and hydroelectric projects along the river forming their common boundary; to their common interests in tourism, an important industry in those ancient countries; to the development of markets for vegetables and other products of those countries, and to the improvement of their own exports and balance of payments.
In other areas it was seen that NATO ties are very important economically, as well as militarily. One cannot emphasize the importance of these ties which were strengthened by the parliamentarians of NATO countries getting together to discuss the solutions to the problems existing between the two nations, to which I have referred. The two countries mentioned have the focal point of their troubles in Cyprus, where thousands of our Canadian boys are serving as peacekeepers between them.
I say, Mr. Chairman, that any money this country spends on its NATO commitments, whether those be for the defensive role on the military side of NATO or on the political, scientific or cultural side, or for special projects such as the committee I have referred to, is money well spent. I underline the fact that those who say it is time for NATO to disappear, that NATO has fulfilled its purpose and that NATO has been destroyed by France, are completely wrong. I say, Mr. Chairman, and I am talking about NATO, that the next conference, the first meeting of the new North Atlantic assembly, should be held in Canada. I ask the Prime Minister whether this could not be done. The president of the North Atlantic assembly wishes an invitation to be extended for the first session of the new assembly to be held in Canada next fall. It is only reasonable that the assembly should come here, because a Canadian is president of it; also, because it is necessary to move the headquarters of NATO and SHAPE to Belgium, accommodation will

November 24, 1966
Supply-External Affairs not be ready tor the parliamentarians' conference, and we should render NATO a service if an invitation could be extended to hold the first North Atlantic assembly here.
This would fit in with Canada's developing role in national affairs. It would show genuinely that we do have a role to play in world affairs. I hope the Prime Minister will consider seriously what I ask. I suggest also to the Prime Minister that what I have said is an adequate reason for the committee on external affairs to assemble immediately. I believe positive issues can be considered by that committee. It need not become involved in the major issues of the world, but I hope that an invitation to the new North Atlantic assembly will be the first item on the new agenda.
I regret that the Secretary of State for External Affairs is not with us. It is difficult to have any real debate on external affairs without his presence, particularly when one remembers recent developments in Europe and at the United Nations.
Preceding the NATO conference, the Secretary of State for External Affairs visited Poland and Moscow. I will not take time to discuss the reported reasons for that visit, nor the objectives which might have been gained by it. I assume that in Poland most of the conversation centred around the role of Canada and Poland on the international truce commission. None the less, some reports coming out of Moscow, and some reasons which have been given for the trip being made by the Secretary of State for External Affairs, are disturbing. I say that particularly because of the remarks I have made about NATO. The objectives of Stalin and Khrushchev were to weaken and destroy NATO. There was great rejoicing in Moscow, when General de Gaulle visited there, over the role France had played in recent months in NATO. No one can doubt that the action of France greatly weakened the effectiveness of NATO, albeit what has happened may prove the starting point of a complete overhaul of the functions and objectives of NATO in the changing situation in Europe.
What happened next was that the Secretary of State for External Affairs decided to go to Moscow. It seems to me, as has already been said in the press, the minister is playing a rather curious and dangerous game. You will recall that prior to his departure there were reports that a member of our own civil service was involved in espionage. This espionage has since been brought to light. We understand that the espionage consisted of the giving of

certain vital and important maps of our east coast to the U.S.S.R.
[DOT] (4:40 p.m.)
This is not an isolated case. It is reported that the U.S.S.R. is of the opinion that we carry on anti-Soviet campaigns in Canada, though the visit of the deputy premier should have eliminated that idea. Nevertheless, there has been persistent espionage activity in this country by Russia which claims now to be our special friend and a country with whom we are enjoying ever closer relations. We do want closer friendships with every country of the world and I believe that the Chinese situation, as it affects the Soviet Union, w.ll inevitably draw Russia closer to the western world. But let us not deceive ourselves into thinking that Russia's present policy of co-existence with Canada and the western world is as innocent as some Canadians seem to believe. The more contacts we have with that country the better, but let us keep both eyes open in assessing the objectives of the present policy of coexistence which is probably no more nor less than an expression of the attitude the Soviet Union has always taken toward the spread of international communism, only without the use of military force.
We cannot go much further into these developments in the time available to us. I mentioned the visit to Russia of the Secretary of State for External Affairs in the light of the pronouncement by Canada at the United Nations in the last few days of what is, apparently, a new Canadian policy. Undoubtedly this policy was discussed during the visit to Moscow. Similarly, I have no doubt, it was discussed with Italian representatives during the visit to Italy. Now, we see it made public at the United Nations.
What has now become evident to all Canadians is a fact which many of us have been suspecting for some while: a complete change in Canadian policy is now taking place. If we turn our thoughts back to November 28, 1963, we will find that speaking in this chamber the Secretary of State for External Affairs clearly enunciated government policy on some of these major issues. Referring specifically to China; he said: "We have had a recent example of China taking the initiative to intensify her own isolation." The hon. gentleman was obviously convinced that it was China which was isolating itself from the world, not the world which was isolating China.
November 24, 1966	COMMONS
Further on in his policy statement the hon. gentleman said:
The avowed intention of Peking to occupy Formosa stands as a serious obstacle to both the seating of Communist China in the United Nations at this time and to the recognition of the Peking regime.
On May 22, 1964, the secretary of state had a great deal more to say about Canadian policy toward Communist China. But it was on November 17, 1965, that the hon. gentleman made the most comprehensive statement about problems concerned with Red China-one of the clearest statements he has ever made, in my opinion, on this aspect of policy. If one compares the statements made in this speech of November 12 with the statement which was made in the United Nations a couple of days ago one finds there has been a complete reversal of the Canadian attitude toward this issue. I do not believe Communist China has changed her ideas. Looking at the reports which come out of China I get the impression that Chinese policy is unchanged except that it is being pursued with a higher degree of intensity than ever before. Since China has not altered her policy, it must be that Canadian policy has changed.
In 1965 the Secretary of State for External Affairs outlined his reasons for not voting in the United Nations for the seating of Red China. Now, he says Red China must be seated. I agree it would be ideal if Red China could enter the United Nations on the same terms, in accordance with the charter, as every other member. World tension would be greatly relieved if, somehow, the two Chinas could be made to understand that both should have a seat and that Red China, because of her size, should, logically, have a seat on the Security Council.
But what the Secretary of State for External Affairs has said on this subject amounts, in my opinion, to wishful thinking -talking to the wind for some purpose which I do not understand. I say this because Red China has evidently no intention of accepting the terms of the United Nations charter and no intention of recognizing the fact that the 12 million people who live on Taiwan have as much right to representation as large numbers of other states which have been admitted recently without questions asked.
Further, it is obvious that at the present neither the United Nations nor any group of nations within that organization, is keeping Red China out of the UN. It is Red China herself who is responsible for the present position. Talk about universality is all very well,
Supply-External Affairs but there must be qualifications, and those qualifications are inherent in the terms of the charter itself. Until Red China is willing to take her seat on the same conditions as affect every other nation, there can be no question about her admission. Yet at a time when even communist nations are on the verge of withdrawing recognition from Red China because it has been impossible for them to get along with her, we find Canada running behind that nation and pleading with her to come in-for what purpose, I am not sure.
Even while the Secretary of State for External Affairs was in Europe a memorandum was circulated to some 40 nations, I think, outlining the action Canada intended to take. Yet Italy-and some people say we were outmanoeuvred-came forward with a resolution which, it seems to me, embodied a more realistic approach than the one suggested by the Secretary of State for External Affairs in his speech made the day before yesterday.
As I have said on a number of occasions it is impossible to separate economic affairs from defence policy or foreign policy. Perhaps the reason Canada is adopting her present course is simply that she has permitted herself to enter into trading relations with Red China without counting the full cost which is bound to be felt on the political side.
[DOT] (4:50 p.m.)
Before concluding this discussion, Mr. Chairman, I wish to say it is imperative that in forming a policy with regard to Red China we must face the reality of the situation as it exists, and look with a practical eye to the future. It follows from the statement made by the Secretary of State for External Affairs to the United Nations that if Canada is to maintain her honour before the rest of the world, she must seek to establ sh and maintain diplomatic relations with Red China. How will this benefit Canada?
Great Britain has had diplomatic relations with Red China since 1949, even though she has not been able to maintain an embassy at Peking, and merely is served by a charge d'affaires. What benefit has this been to Great Britain in so far as handling the problems created by Red China are concerned? It might be that we should continue to use the good will that we have throughout the world, and in the United Nations, to try to bring together those who take an obstinate stand on this problem, so that they may be persuaded to work out some sort of agreed policy. Until that can be done any talking that we do now is just so much smoke in the wind.

November 24, 1966
Supply-External Affairs
As recently as today it has been reported that some of Red China's immediate neighbours, like Japan and Indonesia, disagree completely with Canada's present approach. I hope that we will give support to the Italian resolution and at the same time continue to use our good will, without making fools of ourselves, in an effort to solve this problem. I agree it is a problem that must be solved. We cannot expect to have world peace until it is, but we must approach its solution on principle, facing the realities, with practical reasoning behind the policies that we develop.
Our new policy on this matter is a complete reversal of our policy just a year ago, and this is difficult to understand. If the reasons given in November, 1965, for the policy we had then were valid, then they invalidate what has been said by the Secretary of State for External Affairs within the last few days.
In closing, Mr. Chairman, there is one overriding factor that I would like to see become a part of our role in world affairs. It is that we over shadow all others in our possession of know-how, and in actual production, as the food basket of the world. Those of us who know India are especially concerned to read of the tremendous famine problem which that country faces, to read that literally millions of people are going to starve to death within the next month because they have no food. The problem of world food production seems to worsen year by year. The rich get richer and the have-not nations have less and less.
One of Canada's principal tasks should be to move forward, not only in sharing the wealth we have but also in sharing the know-how we have. We should be using our good will to formulate a new policy that will help meet the basic problem of all mankind, that of having enough food in order to survive. Instead of wasting our time on some matters upon which we cannot expect to have very much influence-


The Deputy Chairman:: Order. I regret to interrupt the hon. member but the time allotted to him has expired.


Robert Norman Thompson: I am just in the middle of my last sentence, Mr. Chairman. Instead of wasting our time, instead of advancing policies which are contrary to our former policies which I believe were and are sound, instead of wandering out into water that is way beyond our depth, we should be providing an answer to some of the basic problems of human beings. If we could convince the people who live behind the iron curtain and the bamboo curtain that we are not against them, that

we want them to have what we have, we would be doing something more in meeting the problems of the world than we are doing at the present time.


Lester Bowles Pearson: Mr. Chairman, we are discussing the estimates of the Department of External Affairs under a rule, approved by all parties in the house, that there should be a limitation imposed of a certain number of days for supply discussions. That is the reason we have not perhaps as much time as we would have liked to have had to spend on this very important subject today. However, Mr. Chairman, I point out that there have been a good many discussions of external affairs in this parliament and in the standing committee on external affairs. I venture to say that if the record were looked up it would show that there was as much consideration given to external affairs in this parliament as in any previous parliament, in respect of general foreign policy matters.
I would like also to point out that when we discuss external affairs and we, as a government, are criticized for not informing the House of Commons in advance of the positions we are taking at the United Nations General Assembly on certain issues, or in respect of diplomatic discussions that are going on with other countries, we are following a traditional parliamentary practice of conducting negotiations, as a government must conduct negotiations at times with other governments, in confidence. The principles on which those negotiations should be conducted are principles which should be stated to parliament, and within those principles diplomatic arrangements and diplomatic discussions are carried on and, when a government takes a position as a result of these discussions then, naturally it stands or falls on that position.
I have been looking up the record with regard to information given to parliament before meetings of General Assemblies in the past on the question of Chinese representation, and I find that this certainly was the practice in those years before 1963-


John George Diefenbaker: But only after discussion in parliament.


Lester Bowles Pearson: I did not want to spend much time on this point, Mr. Chairman, but it looks as if I should give some detail, having made the statement. Before the United Nations General Assembly met in 1958 there was no report made to the House of Commons by the then secretary of state for external affairs in regard to the question of China, which was on
November 24, 1966

the United Nations agenda; there was no report made in 1959 before the General Assembly discussed the question of Chinese representation, and there was no report made before the General Assembly meeting of 1960.
In 1961, the prime minister of that day was asked about Canadian policy on September 20, just after the General Assembly met, and he said he was not able to go into detail beyond saying that the question was a very important one and that the people of Taiwan should have the right to decide their own future.
The stand taken by the government at that time was made known in the United Nations, and parliament then had the responsibility, if it so desired, to decide whether or not that was a right stand. That is the traditional parliamentary practice. I think it is well that parliament should discuss external affairs matters both in committee and in committee of the whole house. I think the record of the last three or four years in that regard has been a good one. I call attention to the number of times the standing committee on external affairs met when the question of China and its relationship to the United Nations has come up, and also the number of times when it has come up in the House of Commons.
[DOT] (5:00 p.m.)
I think China is the subject that I should deal with first because it is one that has been touched upon, and in some cases more than touched upon, by those speakers representing the various parties who have preceded me. It has been suggested that the answers which have been given to questions in the House of Commons recently have been definitely misleading. I do not accept that statement, Mr. Chairman, and I think that if the statement made yesterday by the Secretary of State for External Affairs is examined in detail by those who are interested, they will find that what has been said in the House of Commons is not in contradiction to what the Secretary of State for External Affairs said in New York yesterday. The Canadian position in respect of this very important matter of the representation of China at the United Nations I believe was very clearly outlined in the statement made yesterday. The Secretary of State for External Affairs-and I wish he were here to speak on this matter himself; perhaps no one wishes this more than I do-outlined the essentials which we would consider would constitute a reasonable solution to this problem. I know it is difficult to formulate an important matter in a word, but in a word the proposal

Supply-External Affairs was that the governments of both the Republic of China and the People's Republic of China should be represented in the General Assembly in respect of the territories under their effective jurisdictions and that the government of the People's Republic of China should be the permanent member on the Security Council representing the territory over which it effectively has had jurisdiction for 15 or more years now and which includes 700 million people.
The position embodied in the minister's statement was framed specifically to avo.d interference in what must be considered as internal Chinese affairs and in particular to avo.d pre-judging the question of China's being a s.ngle sovere.gn entity, as both Ch.nese governments cla m at the present time. Of course we know this. Therefore, this proposal or suggestion is not an attempt to create two Ch.nas; it is an attempt to outl.ne what m.ght be a reasonable interim solution to the problem of Chinese representation, strictly limited to the United Nations context, with no implications in respect of the questions of sovere gnty or territorial rights which one day will have to be settled by the Ch nese themselves including those who live on Taiwan. That was the purpose of the statement. The pol cy embodied in that statement has been given to th s house by the Secretary of State for External Affairs and indeed by myself on more than one occasion. It is a pol.cy based on the desirab 1 ty of universality in a world organization. In that statement of yesterday we have not abandoned the belief that the policy of universal ty should be implemented in such a way that it would not expel a present member government from the United Nations.
In making that statement and in outlining this policy the objective was to begin, and we hoped it would begin, a process of breaking the log jam which has faced the United Nations assembly for many years. We hoped it might produce some ideas which might result in some progress be'ng made in dealing with the matter of representat on of Ch na wh ch is on the agenda of the United Nations, as it has been now year after year for more than 15 years. I believe the statement which has been made w'll have a helpful effect in that direction. I hope that it will result in other motions being made at the United Nations General Assembly in the form of new and positive approaches to at least an examination of this problem with a view to finding a solution.
Before the United Nations assembly at present there are three resolutions which deal with the question of Chinese representation.

November 24. 1966
Supply-External Affairs There is the resolution which comes up every year, and this is the one which I hope will be decided first, to decide whether or not this question is an important one within the meaning of the rules of procedure of the United Nations. If it is considered to be a question of great substance-and I cannot imagine a question of much greater importance-it then would require a two thirds majority. That is important. This is one resolution. Then there is the perennial Albanian resolution which provides for the admission of the government of Peking, and at the same time for the expulsion from the United Nations of the government of Taiwan.
When the Secretary of State for External Affairs issued his statement on Chinese representation in November 1965, he was deal-ig with the Albanian resolution and explaining why we would not support it at that time. We do not propose to support it this year either, because we cannot vote for a resolution which in its terms would expel the government of Taiwan from the United Nations. Presumably this resolution will come up early next week for decision. There will be the same reluctance, and indeed impossibility on our part, to support a resolution in those terms.
Then, there is a third resolution put forward by the Italian, Belgian, Chilean, and I think one or two other, delegations which provides for an examination of the matter by a committee which would report back to the United Nations assembly a year from now. In its terms, it is almost the same kind of resolution which the Canadian delegation put forward in 1950 without very much success.
We appreciate the desire of the sponsors of this resolution to join us and others in making a step forward and in making some progress in this matter. We feel it is a satisfactory resolution so far as it goes, but we do not feel that it goes far enough to ensure that at the end of the year's examination we shall be faced at the next meeting of the assembly with a realistic and helpful report on this matter which could lead to further desirable action. That is the reason the Secretary of State for External Affairs made a statement yesterday and proposed an examination of the question, not in the form of a resolution but rather in the form of a suggestion put forward for consideration and discussion. In this form it goes somewhat further than the Italian resolution, because it lays down certain guide lines-if I may use that word-which would influence the examination which is
about to be made. It suggested that that examination should not be carried on by a committee of the assembly, because it would be difficult indeed to get a satisfactory committee. The suggestion was that this be carried out by the president of the assembly himself, with all the help he can get from the many sources available to him and particularly from the Secretary General of the United Nations.
This proposal which was put forward yesterday embodied a policy which goes a long way back before this session of the general assembly. I believe it will continue after this assembly rises. It is not embodied in a resolution. Had we made this suggestion in the form of a resolution-and we had been considering that right up until the last few days-it might have been, and indeed I think it would have been, defeated by a large majority as going too far for some and not far enough for others. With the Italian resolution which is on the order paper providing for an examination, such a proposal by Canada might have received an inadequate number of votes and, that particular kind of a proposal having been defeated in the form of a resolution, it might have been more difficult to resurrect later. However, in the form of the proposal as made in a statement by the Canadian delegation, it is now open for discussion and consideration.
[DOT] (5:10 p.m.)
More than one speaker this afternoon has asked how the government of Peking and its policies have changed so as to warrant the Canadian delegation putting toward a proposal of this kind at this time. There is no one who can be optimistic, in the light of events, that it would be possible to find any resolution which would be acceptable to the Peking government except one in the terms of the Albanian resolution, which we could not support because of its expulsion clause. We have no illusions about that and we have no illusions that Peking's policy has suddenly changed or that the government of Peking by any change would suddenly become eligible for participation in the United Nations as a peace-loving nation within the terms of its charter. If one applied that standard literally to all the members of the United Nations today, or to the nations who may apply in future, I do not know how many members of the United Nations would be able to subscribe to such terms without some qualification.
The question is not whether the policies of the government of Peking have suddenly changed in a way that makes it an acceptable

November 24, 1966

representative at the United Nations which has no revolutionary or aggressive instincts, or that it has suddenly abandoned certain policies which could hardly be called peace-loving. That is not the question which faces the United Nations at this time. The question is whether or not the United Nations is going to take its responsibility in doing its best to see that a suitable basis can be found in that world assembly so that a government which represents effectively 700 million people in this world can be represented in that organization. We will discharge our responsibility as a member of the United Nations if we try to find a basis of negotiation with Peking. Having done that, it will be up to Peking to made a dicision. It may well be that the government of Peking will spurn, as indeed it has already given some indication it will, this kind of offer to find a basis on which membership could be granted. The United Nations and its members will have discharged this reponsibil-ity if an effort is made to find such a basis for membership. That is the purpose of the examination that has been proposed by the Italian and other delegates, and it is the purpose of the proposals that have been put forward by our Secretary of State for External Affairs.
Let me now move from China and its representation at the United Nations to the second subject which has been referred to this afternoon. I should like to deal with the question of Viet Nam and southeast Asia. There is no more important matter on the international scene at this time, nor one more fraught with immediate danger to general peace in that area.
It is very discouraging, but realistic, to note that since the house last discussed foreign affairs there has been no movement in Viet Nam which brings us any closer to a peaceful settlement. Despite repeated attempts to find a basis for peace talks, the problem in Viet Nam is still being tackled today as a military problem. We have made clear our belief, and I know this house shares this belief because hon. members have made that clear this afternoon, that the removal of this source of serious instability in southeast Asia-that is putting it mildly-will not be achieved by military means alone. The right hon. Leader of the Opposition has emphasized this fact.
It is precisely because we are convinced of the need for a political solution that we have made every effort within our power to see whether we could help in finding a basis for a political solution. That is also the reason we
Supply-External Affairs have welcomed the repeated expressions of the United States' willingness to enter into negotiations leading to a lasting settlement. That is also why we are discouraged and disappointed that there has been no expression of such intention, desire or willingness on the part of the government of North Viet Nam, which is certainly a party to this conflict.
While I can understand the difficulty of the government of North Viet Nam relating any kind of movement toward peace to the bombing of its territory or, as long as the bombing of its territory is going on, to talk about a peace movement, I find it very difficult to understand why that government has refused to accept missions, including the mission of commonwealth prime ministers, which desire to discuss with that government the basis upon which some kind of peaceful negotiation could be brought about. The mission I mention consisted of prime ministers of countries not unfriendly to the North Vietnamese side of this case, and none committed to the United States side. That has been very discouraging indeed.


John George Diefenbaker: Who were those prime ministers besides Nkrumah?


Lester Bowles Pearson: They included the man who was then representing Ghana, President Nkrumah, the Prime Minister of Ceylon and the Prime Minister of Trinidad-Tobago, Dr. Eric Williams.
We have always held the view that the bombing of North Viet Nam was, and indeed remains, the key element in this dangerous military and diplomatic impasse. We have made that view known more than once in Washington and at least once in public in the United States. We have also made clear our belief that the bombing is unlikely to stop merely as a result of denunciatory declarations or appeals. Nor is any practical impact going to be made by an over-simplified and unrealistic prescription for peace which places on only one side the full burden of responsibility for making essential concessions.
I should like to hear a statement from Washington to the effect that bombing will stop, and I should like to hear a statement from Hanoi that if the bombing stops the infiltration of troops into South Viet Nam will stop. There are indications that this is the direction of United States policy statements. If there is any fear on the part of North Viet Nam, communists in North Viet Nam, in Peking, in Moscow or anywhere else that the
November 24. 1966

Supply-External Affairs United States will not withdraw from South Viet Nam after peace negotiations have begun, or perhaps brought to an end, I should like it made crystal clear that the United States has no intention of remaining in South Viet Nam. I believe that to be the case.


John George Diefenbaker: Would the Prime Minister permit a question? What was the reason for the United States imposition of the six month's rule? I do not understand that.


Lester Bowles Pearson: I should not like to try to explain the significance of that specific declaration. What I am trying to point out, and I am sure my right hon. friend and other members will agree with me, is that if the suspicion that the United States is going to stay indefinitely in Viet Nam can be removed, and if these powers can be convinced that the United States is there for one purpose, to support a government which it considers to be the victim of aggression, the situation might improve. If these people can be convinced that once this aggression, as the United States and South Viet Nam see it, has stopped, and once peace talks have started, that the process of withdrawal will begin, that South Viet Nam is not going to be a base for the United States, as I believe the United States does not wish it to be, and that the people as a result of peace talks will have the opportunity of deciding their destiny for themselves as a neutral power-if they so wish-I am sure the results will be beneficial.
[DOT] (5:20 p.m.)
I think it is important to remove any fear. We have discovered this fear in all the talks and discussions we have had with communist representatives. They say that the United States have not moved into the area with the forces they have, with the facilities they have brought in, with the work that has been done there-the building of harbours, and all that sort of thing-unless the United States are going to stay. If that fear could be removed, it would be a great step forward. There must be the removal of this fear if there is to be peace. The people of the area must also have the chance to vote freely as to what they want to do, and under what regime they want to live. If we could remove these fears, I think we would progress a long way on the road to peace. But that is a very big "if" indeed.
I do not think there is anything more I can usefully add at this time, except perhaps to repeat what the Secretary of State for External Affairs said the other day. In the talks we have had recently, and through his

visit to Moscow and Poland, we have found little for encouragement in so far as the prospect for immediate improvement in the situation is concerned. There are very great differences of view, for instance, between ourselves and other western countries and the Soviet union, though I believe the Soviet union is as anxious to bring this war to an end as we are. But they feel that this cannot be done unless the United States stops its bombing and fighting and begins to remove its troops. They say that at that time there will be the right kind of reaction from the north. The United States feels it should not be asked to take those steps unless there is some assurance that they will result in negotiation and peace. So, there does not seem to be much likelihood of a quick settlement.
The question of Rhodesia was discussed by previous speakers. I will try to deal with some of the points that have been raised. I think the Prime Ministers' conference of a year ago was correct in discussing this question. The right hon. gentleman felt that it was not a matter for the Prime Ministers, that it was a matter for the United Kingdom government. It seems to me that if the government immediately concerned with the problem of Rhodesia, which is the United Kingdom, because it has still the immediate responsibility, brought the question before the Prime Ministers' conference, and the other members of the conference were anxious to discuss it -certainly the Africans were, and insisted on a discussion-we would have been defaulting on our responsibility had we said: No, this is not a matter we should discuss. This is especially so in view of the fact that the Prime Ministers' conference, quite rightly, discussed the question of South Africa on a previous occasion. Anyway, the question of Rhodesia was discussed. The United Kingdom, which admitted its immediate responsibility, asked for the views of other members of the Commonwealth as to how the question could best be settled in a way which would protect the interests of the majority of the people.
There were those at the meeting last January who were demanding military intervention at once, that force be used to put down the illegal regime. It was argued that if the illegal regime had been black, and the majority had been white, there would not have been any delay by the United Kingdom or anybody else concerned in using force. There was a great deal of suspicion that there was no sincerity on the part of certain members of the Commonwealth in their desire to
November 24, 1966

see that the rights of the majority-who number about 4 million to 200,000-were protected and respected.
Before that time the United Kingdom government had laid down Six points which governed its pol.cy in Rhodes.a. These have been the bas.s of its pol.cy. Our government has supported those po.nts. We made them clear to the House of Commons last spring. We continue to support those points. They provide for unimpeded progress toward the establishment in Rhodesia of a government wh.ch will represent the majority of the people on non-rac,al 1 nes.
It was felt by the United Kingdom that the appl cat.on of voluntary sanct.ons m.ght be effective. We were told that they were l.kely to be effective. The Prime Minister of the United K.ngdom was optimistic at the conference in Lagos. These sanct.ons, as I sa.d the other day in the house, have not been effective. We learned th s morn.ng that if progress is not made in the next few days in the discussions between Salisbury and London-and I can see very little l.kelihood at the present time of any progress on that front-the Secretary of State for Commonwealth Relat.ons is going to Sal sbury today to see the governor, at the request of the governor, before the final break occurs in the sense that d scussions are cut off, there will then be recourse to the United Nations.
Progress may be made in these discussions, but I have not very much optimism in this respect. We will see whether Mr. Bowden, when he returns to London, brings with h m some information which will make unnecessary recourse to the United Nat.ons. But I think we have to assume that it is likely the matter will be brought before the United Nations Security Council in the first instance by the United Kingdom government. The United K ngdom government has been discussing with other members of the Commonwealth procedures that should be adopted with regard to the resolutions which may be brought forward. The United Kingdom is comm.tted to this course because of the meeting we had in London last September. At that meeting we agreed that if progress had not been made by, I think it was the end of November, and if the Commonwealth members supported the United Kingdom in the steps that would be taken, sanctions and resolutions would be brought forward under chapter 7 of the United Nations charter.
Chapter 7, part 1, under which the United Kingdom would presumably be operating, provides for obligatory economic sanctions.

Supply-External Affairs Under that section of the United Nations charter this action could be taken. There is, of course, a very great difference between the kind of sanctions put into effect last year and the sanctions which would be put into effect if the security council agreed, to make them obligatory on all United Nations members. The right hon. gentleman said this course could not be effective unless those sanctions were extended to South Africa. I know this is a very great difficulty, and I suppose the United Kingdom knows even better that it is a very great difficulty.
I would only point out that if the United Nations and all its members were sincere in their desire to put into effect selective obligatory sanctions, and took the necessary steps to carry them out, it would be possible, by selecting certain key exports from Rhodesia, to do very great and perhaps crippling damage to the economy of that country, because it would be possible to police these sanctions in a way that was not possible in respect of the present sanctions. There are only five or six commodities which are of critical importance to Rhodesian exports. It would not be easy to export those commodities through South Africa, to members of the United Nations who were putting sanctions into effect, without the importing countries knowing that they came originally from Rhodesia, because in most cases they would know the commodities were not South African at all in their origin.
It is a question of whether the United Nations wishes to take this step and whether the members of the United Nations fall behind it and do their best to make it work. If they do not do this, these sanctions will not work either, if they are put into effect. We are committed to the policy of co-operating in regard to selective obligatory sanctions under chapter 7 of the United Nations charter when they are brought before the United Nat ons, because we feel they will-and we hope they will-have the effect in Rhodesia of bring ng about a state of mind which would result in negotiations on the basis that the rights of the majority in that country are respected as to the form of government under wh'ch they wish to live. This is the only basis on which these negotiations would ever succeed.
[DOT] (5:30 p.m.)
We also made it clear that we do not think that objective will be accomplished by the use of military force which might have results far beyond those which are visualized by pressing for that kind of military sanction. Therefore, we believe we should confine our efforts in
November 24, 1966

Supply-External Affairs this regard to economic sanctions and the financial and economic isolation of this de facto illegal government.
The hon. member for Red Deer spoke of the NATO assembly which had been meeting in Paris, and I should like to echo his tribute and congratulations to the hon. member for Res-tigouche-Madawaska for having been chosen the first president of the North Atlantic assembly.
I wish I had more time to discuss NATO, Mr. Chairman, but I have not. I know that the committee is anxious to get on with other business. But while we have been considering China, southeast Asia and Rhodesia we should not overlook the fact that a key area of the world remains eastern and western Europe, and that NATO remains a vital agency for peace and progress in that area through its provision of machinery for collective defence and for building up the Atlantic community.
Important changes are taking place in NATO. We who have believed in NATO from the beginning, as I know all members of this house have, should remember that what was exactly the right form of organization for 1949 is not necessarily the right form of organization for 1966. I think these changes will have to be reflected in the form and structure of NATO.
For one thing, Mr. Chairman, the European countries should be given or should take a greater share in the control and functioning of the collective defence organization. But if they are to do this, they will also have to take a greater share in responsibility too. I think that if we are to keep NATO going as an effective	organization-and I hope we
can-we will have to move toward a form of partnership between the North American side of NATO and the European side of NATO, both sides working together. We in NATO will also have to move away from the immediate military defensive side toward-and I hope this turns out to be the case-political discussion with eastern Europe and the countries behind the Iron Curtain.
We in NATO have been talking about this for the last ten years but have shied away from it. Some of its members have thought that this would be a sign of weakness or would be too defensive, but it is pretty well agreed now that a very important function of NATO is to establish contact with the other collective security organization in Eastern Europe. If this is to be done, then all members of NATO will have to work together, and this includes France.

I am sure no one regrets more than the members of this house the abandonment by France of its position in NATO so far as an integrated military organization is concerned. But France still remains a member of the organization, and we must do everything we can to see that she is given no reason for withdrawing from the political side of NATO. In the future, I hope that France may come back even into the military side of NATO. To be a member of a defence organization like NATO and to take part in collective defence but to say that you will not organize for collective defence until the emergency occurs, flies in the face of all history, especially modern history. So, I hope that perhaps even in that respect there may be developments which will strengthen NATO in the years ahead.
I have taken up more time than I should, Mr. Chairman, because I understand we are-


Thomas Clement (Tommy) Douglas: Mr. Chairman, as the Prime Minister is about to begin his peroration, may I ask him a question? He made no comment about the suggestion raised by the hon. member for Greenwood with respect to Canada's recognition of mainland China. The hon. member pointed out that, while we have not sufficient control as to what the United Nations will do about admitting mainland China, Canada has it within its power to extend diplomatic recognition, which might set an example to other countries and also be proof of our good faith in this regard.


Lester Bowles Pearson: There are two aspects to this question, Mr. Chairman. There is the aspect of trying to get the Peking government into the United Nations on terms acceptable to the members of the United Nations. Chinese representation at the United Nations through the government of Peking would be a form of recognition which might be accepted by members who voted for such representation.
If this is impossible at present, and we make no progress on this score, then we have to consider the other form of recognition by approaching the government of the country concerned to see whether bilaterally recognition can be brought about. That is all I should like to say about it at the present time.
However, perhaps I should add that it may not only be a question of Canada recognizing Communist China; it may be a question of Communist China recognizing Canada. As my hon. friend knows, this is a complicated subject. I would prefer to concentrate upon our interest at the present time in seeing what we
November 24, 1966

can do at the United Nations to get that government into the United Nations. If this effort fails and there is no hope for progress, we could consider the other question of diplomatic recognition by bilaterial negotiation.


Robert Norman Thompson: Mr. Chairman, might I be permitted to ask the Prime Minister whether consideration is being given to inviting the North Atlantic assembly to Canada for its first meeting in the fall of 1967?


Lester Bowles Pearson: I am sorry, Mr. Chairman, I did overlook that. It would be quite appropriate, of course, to have the assembly meet here. The North Atlantic council has met here twice and I believe the other organization, the nonofficial organization, met here once.
We will have a lot of meetings in Canada in 1967, our centennial year, and whether or not this would be a good year to have the meeting in Canada, I am not sure. By the end of the summer or October we might all be exhausted from meetings of one kind or another. But I will be very glad to look into this and find out whether it can be brought about, and whether it should be brought about.


Herman Maxwell Batten: Shall vote 1 carry?


Some hon. Members:: Carried.


Mr. Churchill:: No, Mr. Chairman, I do not think the guillotine should be applied at this time. The knife will get dulled; we want it kept sharp until Friday. In any case, this is not the arrangement. We were to go on with the Department of Finance estimates. If you are going to deal with each item now, there are some matters I myself would not mind raising on the subject of external affairs in which I have been interested over the years. I think we should move right on to the estimates of the Department of Finance, we having met the informal arrangements made last night with regard to the time element.


Mr. Mcllraith:: Mr. Chairman, I wonder whether the hon. member would not reconsider and let us call these items and have them passed. I think that this is the 71st day on supply in this session, which is the longest time spent on supply in the history of parliament in this country. I do not want to debate the subject now and eat up more time, but I wonder whether I could appeal to the hon. member to reconsider.


Gordon Minto Churchill: Mr. Chairman, one way to get a debate going is to give the committee inaccurate information. We are dealing with a
Supply-External Affairs limit of 30 days on estimates, which amounts to 17 per cent of the number of sitting days in this session if we go on to December 20. In other years we have devoted 40 per cent of the sitting days in a session to supply. But in this session, the government has arranged this guillotine procedure.


George James McIlraith: Mr. Chairman, I want to raise a question of privilege here. It just is not responsible to make a charge of that kind against this government. The facts are that this is the 31st day on estimates, after having spent eight days on supply motions, in this session to deal with this fiscal year's part of the estimates. Not only that, Mr. Chairman, but for the first time in the history of this country some dozen committees have held sittings, many of them holding close to 40 sittings, and all dealing with the estimates of different departments. At no time in the history of parliament in Canada over the last 100 years has so much time or such thorough examination been given to the study of the very important matter of supply.
[DOT] (5:40 p.m.)
I do not want to take up the time of the committee discussing this aspect-


Michael Starr: You will not have the last word.


George James McIlraith: -but I do appeal to the hon.
member to let us get on and have these estimates passed so that we shall not be met with the specious argument on Friday night that there are hundreds of millions of dollars in estimates to be passed. The truth of the matter, as I have ind'cated, is that a greater amount of time has been spent on supply bus ness in th:s session than has been spent at any previous session in the history of Canada.


An hon. Member:: You are doing the talking.


George James McIlraith: And if we go about it in an orderly way it would be helpful.


Gordon Minto Churchill: You want us to pass $150 million in about 30 seconds.


George James McIlraith: That is my request of the hon. member in view of the way he has wasted the time of the house in supply in this session.


Gordon Minto Churchill: Perhaps I can now speak on external affairs and deal with those estimates. If the house leader does not want to go according to the program he arranged-if he does not want to get into the subject of
November 24. 1966

Supply-External Affairs finance, then we will have to carry on with these est.mates. Does the house leader want to stand by h.s word of last night with regard to the d.v.s.on of time in th.s house?


George James McIlraith: Yes, the house leader does. The house leader has tr.ed his best within the last few days to get some order and reason into th.s house, and he has been continually obstructed by the wilful bad humour of the hon. member. I am qu.te prepared, rather than have the hon. member continue to obstruct the bus ness of the house, if it wdl expedite matters in any way to ask the committee to give unanimous consent to let this item stand so that he can continue his obstruction, while permitting the rest of the house and especially some hon. members op-pos.te to have an opportun ty to d.scuss housing on the estimates, as they indicated was their desire yesterday.


Michael Starr: You have taken up most of the time.


Mr. Patterson:: I do not understand why all th's debate is going on at the present time, because there was an agreement that we would debate the estimates of the Department of External Affairs for a certain length of time and then proceed with finance, during wh ch the matter of the housing announcement could be cons dered. We have already discussed these estimates for about 2J hours, and I thought the understanding was that there would be a two hour debate on external affa rs. It seems to me, in order to mainta n some balance in this situation, we should recognize the agreement which was made and proceed now with the estimates of the Department of Finance.


Some hon. Members:: Hear, hear.


Michael Starr: Mr. Chairman, I want to explam the understand ng with the house leader. We were to spend two hours on th s department. There was no agreement that any item would be passed in those two hours, but that an opportun ty would be provided to discuss th s department for two hours. We have run over the agreed time by 25 or 30 m'nutes, and I do not understand what the house leader is trying to do by chang'ng the agreement wh'ch was made. We should proceed with the Department of Finance. We should not waste the tme of hon. members who w.sh to discuss the finance est'mates.


George James McIlraith: I am not seeking to change any arrangement.


Michael Starr: Of course you are.


George James McIlraith: I was only trying to give expression to the arrangement a few minutes ago. I now have suggested to hon. members, that if the committee wished we would ask to let this item stand and call the finance department estimates so that housing could be discussed. If hon. members opposite do not want that-


Michael Starr: We could have done that five minutes ago.


George James McIlraith: -because they-


Michael Starr: You used up most of the time.


Herman Maxwell Batten: Order, please. Does the committee give unanimous consent to stand item 1?


Some hon. Members:: Agreed.


Michael Starr: You are trying to break the agreement.
Item stands.


Herman Maxwell Batten: The committee will now proceed with the estimates of the Department of Finance for the fiscal year ending March 31, 1967. These estimates are to be found at page 118 of the blue book.
DEPARTMENT OF FINANCE Administration-
1. Departmental administration including administration of the Guaranteed Loans Acts and the Inspector General of Banks' Office, and payments to provinces and grants as detailed in the Estimates, $4,332,900.


Mr. Keays:: Mr. Chairman, it was interesting this afternoon hearing the Minister of Labour tell the house that he was receiving favourable comment from across the country on the announcement he made concerning the increased interest rate on mortgages. The information and news releases I have do not bear out his statement. It is true that the National House Build ng Association commends our interest, at last, in housing, but they are deeply concerned that the increased costs of funds will preclude people from buying homes. They call on the government to offset these difficulties through incentive programs.
The study of the estimates of the Minister of Finance gives us an opportunity to appraise the recent announcement by the Minister of Labour that the interest rate under the National Housing Act is hiked from 6J per cent to 7J per cent. To many people, at first glance, this hike is not unreasonable. But it is, after
November 24, 1966

all, an 8 per cent increase in the cost of borrowing for those who want to build a home. Add to this the 7 per cent increase of January, this year, and we see that the prospective home builder or owner is faced with a 15 per cent increase in interest rates on money for construction.
Can this government say to the Canadian people that this is truly realistic, when so many other factors should have been considered before the announcement was made? Does the increase in the rate of interest answer the serious problem with which the housing industry is confronted? Does it answer the plight of those prospective home owners who have searched in vain during the last 12 months for sources of money for mortgages? Notices, warnings and warning signals have been given to this government continually during the last year about the housing shortage and about the lack of mortgage funds. These warnings were ignored until recently, when Central Mortgage and Housing Corporation received authorization to increase direct loans. Unfortunately the extra allotment was not enough to meet all requests, and we have again had to resort to the normal supplies of mortgage money. Returns on normal mortgage moneys have been made more attractive. That action, in an industry that has been used as an instrument of economic leverage, with this government's policy of indifference, has placed many Canadian prospective home owners in a really sad position.
Through its policies, the government has subdued to a state of despair the lower and middle class wage earners who must buy shelter for their families. The cost of the average house is now out of proportion to the average salary, and we are adding extra costs by increasing interest charges, by increasing costs of building materials, by permitting high wages, and so on. Does the government believe that the 8 per cent increase in interest, plus the 7 per cent increase of January, will produce funds which will be invested in the housing industry?
[DOT] (5:50 p.m.)
If so, will it provide sufficient funds to meet the demands and requirements of the immediate future? Conventional mortgage rates are now running at approximately 8 per cent and the new rate set under the National Housing Act is certainly not likely to create a competitive market for housing mortgages. Do we not also acknowledge that the shortage of funds will in turn bring about shortage of housing 23033-652
Supply-Finance
units, and that the process of supply and demand will entail higher rental costs to be borne by those with whom we are mainly concerned-the lower and middle class wage earners? This latest decision is just another government contribution to the inflationary pressures which are haunting our economic welfare. It all adds up to action taken by an irresponsible government unaware of the problems of the common people.
Earlier, I mentioned that we seem to be witnessing the whittling down of various benefits and safeguards in the housing field. First of all, there was the government's refusal to eliminate the 11 per cent sales tax on building material. Second, there was the announcement that the $500 bonus for winter construction would no longer be granted. Now comes approval of this increase in the interest rate. It all amounts to a staggering cost burden on those who can ill afford to bear it.
Government policy must be flexible enough to be capable of adaptation to sudden and unexpected reactions. I believe that if home owners or intending home owners are obliged to pay additional costs in connection with their borrowing requirements, they should also receive the benefit of other measures whose effect would be to soften the blow. For example, why should not such people benefit immediately from a rebate of the 11 per cent sales tax? Why should it not be provided that school or municipal taxes be deductible for income tax purposes? Such an announcement, coming at this time of the year, would undoubtedly encourage prospective home owners to proceed with their construction projects provided funds were available.
The money market today is in an unstable and uncertain position largely as a result of the government's delay in bringing down the revisions to the Bank Act. It might have been possible to avoid the increase now contemplated in interest rates had the Bank Act in its revised form been passed by this house. Canadians will condemn this government for the priority which it has accorded to some legislation while delaying the progress of such essential legislation as the Bank Act.
We are of the opinion that mortgage moneys must ordinarily come from the private sector, but that when the private sector cannot meet the requirements of the population it becomes a duty of the state to enter any particular field of operations in order to fill the gap. If the government has been able to authorize lending at 6J per cent to home builders in the past, it should consider making

November 24, 1966
Supply-Finance
loans available once again at the same rate, if the private sector cannot meet the need. If this were done, some of the financial strain which home owners will experience as a result of this higher interest proposal would be alleviated.


Mr. Addison:: 
Mr. Ricard:: We had that in our program.


John Hollings Addison: Yes, I know. It is not an original suggestion. To me, it is rather strange that a person operating a business where property is involved is allowed to deduct his municipal taxes from income tax but the home owner does not have this benefit.
In recent days numerous newspaper articles have appeared indicating that the government should subsidize interest rates in Canada to provide mortgage money for house building at, say, 5 per cent. I contend that the government is, in effect subsidizing interest rates by guaranteeing mortgages under the National
November 24, 1966

Housing Act and that, in effect, people using that act are borrowing money cheaper than in the open market.
One of the areas in which the government is showing leadership is in the proposed amendments to the Bank Act, which are presently being considered by a committee of the house, whereby banks will be allowed to enter the mortgage field. They have been virtually restricted from doing so up until now because they were not allowed to charge more than 6 per cent. During the last two or three weeks that I have served on this committee I have learned from bankers that they are anxious to enter the residential mortgage field, and I feel this will help the situation.
There is a critical shortage of housing and it will continue into the near future. But this afternoon we listened to the Prime Minister outlining some of the problems that face the world. In the face of those problems we must consider ourselves very lucky to be Canadians. But I believe it is the responsibility of the government to manage the country's economy in such a way that we do not have booms or busts, so that we can level our booms and lift up the economy on a gradual, rising scale.
Interest rates around the world are high. Perhaps this is only a transitional period. Certainly, the experience in Canada has been that each time the interest rates go up they come down again, but they never come down to the point from where they started. The result has been that we have had a built-in, gradual inflationary effect in the area of interest rates. Perhaps we in Canada have been living under an artificial umbrella. Now as the rest of the world grows closer, and certainly as the commercial and banking worlds grow closer, world interest rates are going to affect Canadians. As we move into areas of free trade and accept more and more responsibility, both in peace keeping operations and in world trade, we will have to recognize that although a government never wants to raise interest rates, it may have to do so.
The Porter commission has pointed out that a government is always reluctant to raise interest rates, but I believe in this instance the government has accepted a principal recommendation of the Porter commission report. I feel that under this system, with the concept of a cabinet or government administering N.H.A. rates, for political reasons or otherwise-I do not suggest governments have been doing this-and with a free floating rate, over the long run mortgage money will 23033-652i
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become more readily available because investors will invest their money in guaranteed N.H.A. loans.
Individuals have a freedom of choice as to where they are going to invest their dollars. When they have a reasonable degree of security they will invest their dollars where they feel they will earn the most return. If we believe in the free enterprise system, and if we have the necessary safeguards to protect against abuses, I believe this is what will provide the impetus to attract capital which will build more and better homes for Canadians.


Mr. Scott (Danforth):: Mr. Chairman, the debate we are now having arises out of the attempt made by the opposition yesterday to have a special debate on the announcement the Minister of Labour made about the increase in interest rates. It gives us an opportunity to comment on that announcement and express our views as to what the likely result will be.
I hope the minister will not take anything I say as aimed at him personally. I am no longer convinced, as I once was, that he is prepared to fight for an effective housing program, but I realize many of the constitutional difficulties which lie in the way. I shall come back to those, and deal with his attitude to them, in a few moments.
The reason given by the minister for this increase in interest rates is that it is necessary in order to attract additional funds into National Housing Act loans. He has said that the private lenders have refused to lend any further under the old rate, that sources of capital have dried up, and that the increase in the rate will re-attract them into the housing field. I hope the minister will tell us how this is going to happen and on what basis he arrived at this decision because we know that there is only so much investment money available today.
People who have arranged private mortgages have paid up to 8J per cent and 8J per cent interest. Industrial sections of the economy are paying 10 per cent interest, and the commercial sections are paying almost anything that is demanded of them. The minister takes the position that we are living in a free enterprise economy, and under that system investors will place their money where they receive the greatest return. If that be so, it is hard for me to understand how they will be attracted into the N.H.A. area where administration costs are greater, and where net returns are lower than on the type of loan.

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The only other thing I wish to say, as a general observation, is that the government will never be able to solve all the problems in respect of housing unless it is prepared to create a separate ministry of housing and urban affairs and to delegate to it a full-time minister. I am not criticizing the present minister because he has had more than his share of labour troubles this year. I am sure it is on very rare occasions that he has a chance to sit back and think seriously about the whole housing crisis which exists in this country, and rarely that he can devote his energy and initiative to this field. This seems to be necessary if we are to even hope to find a solution.
I am sure that even with the appointment of a minister to a department of housing and urban affairs there will be no easy solution to this problem because of the jurisdictional matters involved. In this regard I quarrel with the minister who said in a Vancouver speech that he was opposed to the creation of such a ministry. He indicated that there are other ministries which should receive priority in their creation. What more important area could there be than housing which affects every Canadian from the cradle to the grave, which influences his evironment and has such a profound effect upon all his activities? What more important area could there be to justify the appointment of a full-time minister?
I know there is a constitutional problem which exists and which has always existed. When I was in the Ontario house I was told nothing could be done because of the federal problem. I am told in this house that nothing can be done because of a provincial problem. A constitutional game of hide and seek has been taking place.
When one reads the representations that have been made to the government, he realizes that our provinces and municipalities are desperate about this whole area of housing. They are crying out for leadership, direction and help and if this is not to come from Ottawa from where will it come? If initiative does not come from us now, when will there ever be initiative taken in this whole field?
Our whole approach today has been unproductive and without real response. As a result, the majority of Canadians are still not receiving the aid and direction they need. If we do not have a minister who is spending his full time in meeting with provinces, and through them with municipalities, to organize the conferences which are required, who is going to lead the way? We should have a minister travelling across the country to fight against

the maze of outdated building codes, stupid building regulations and prejudices among our local councils about public housing.


John Robert (Jack) Nicholson: Would the hon. member permit a question?


Reid Scott: Yes.


John Robert (Jack) Nicholson: Is the hon. member seriously suggesting that a federal minister should go into the different provinces and suggest to the municipalities that they should rewrite their laws, and that this minister should get into arguments with the municipalities about provincial laws when they are the responsibilities or as some say the creatures of provincial governments? Should a federal minister project himself into such a situation?


Reid Scott: I am not suggesting that at all. I am suggesting that a federal minister should be prepared to go to the provinces and to organize conferences within those provinces, just as the minister has done in the past year, but in a very limited way. I think he took a very important step. I was glad to see that he accepted our suggestion because it has been productive of results. All I suggest is that a minister should lead the way and meet with provinces in an attempt to iron out these jurisdictional problems. I do not suggest they will easily or quickly be solved, but if we do not start now these problems will become worse. All these inbuilt rigidities will become more magnified in the future, making the solution of our housing problems more difficult.
As a first step we must have a minister and a department. The second thing we require, as is pointed out in the economic council's report, is the provision of more mortgage money at low enough rates to enable people to afford to buy houses. This does not involve throwing the whole problem of mortgage money on the private investment market, because that has not worked in the past and there is no indication it will work in the future. This again is an area where social and political decisions are needed in addition to the operation of the market place. This is again an area in which the government must lead and accept the responsibility for the general welfare of the public. This will again involve a complete reversal of the thinking that has taken place here in Ottawa. It will require the acceptance of the social responsi-bTty which rests upon the government in more and more areas of this kind.
As I say, conventional lenders cannot hope to supply the demand. We must be producing over 200,000 units per year by 1970, and that
November 24, 1966



is not far off, if we are to meet the targets set by the economic council. We are now a long way below that and the way we are going there is little possibility that we will really catch up. There must be a constant source of funds rather than the turning off and on of an economic tap, as it seems to me we have been doing in the past.
I have already alluded to the third thing required. We must have an enormous general planning program. This is not an original suggestion but was recognized by Mr. Deutsch in the report of the economic council. He suggested the whole problem has resulted from the failure of both levels of government to sit down together and plan some orderly development in the field of house construction generally. He suggested very strongly that these meetings should take place, that there should be conferences each fall and that a great deal more information should be collected as a result of conferences and discussions between all levels of government.
As a fourth step, we must expand enormously the activities of our co-operatives in public housing. We have just about reached the limit in many ways in the private sector, but the whole area of co-operative housing opens up tremendous possibilities in this country. In this way, perhaps we could make it possible for people collectively to build homes which they could afford to live in and purchase.
Our record in public housing is a disgrace. We have never really mastered the whole business of promoting public housing in this country, yet by the minister's own standards nobody earning under $5,000 per year can afford to buy a house in this country. These people will have to be housed in some way through public housing. Right now in Toronto we could place 25,000 people in public housing if we had the accommodation available. That is how desperate the situation has become. If you could see the chicken-coops and dog kennels, almost, in which Canadians are living in some of our large cities you might appreciate the gravity of the situation.
[DOT] (6:30 p.m.)
We have never really got into the whole area of public housing. Again, leadership in this field must come from the central government; nobody else can give it. If the government does not give leadership, I do not think anybody will. Finally, Mr. Chairman, we have to launch a major assault on the whole area of urban development. There is some movement in this direction, but it is totally inadequate.
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Even the minister has admitted this in his various speeches. We have a long, long way to go in this respect. This is an area in which you are fighting all kinds of local problems and prejudices.


John Robert (Jack) Nicholson: And local landlords.


Reid Scott: I agree; you are also fighting local landlords. Name it, and we have it; the whole gamut is there presenting a bulwark against any sort of social progress in this field. The minister, in his speeches, has indicated his awareness of this fact. Housing has been kicked around in Ottawa from department to department, and we have never had a really sustained program laid out by a minister.
These are some short-run solutions which seem to me to stand some chance of dealing adequately with the housing problem in Canada. We have not even touched upon the long-run solutions, of course. I can remember speaking in 1963, I think it was, on the same subject and suggesting to the minister that Canada faces problems of urbanization that stagger one's imagination; that as we move in the direction of urbanization, fantastic problems will be created for the urban dweller. There will be problems in the fields of transportation and communication. The whole problem of the urbanization of this country is falling upon us. I can find nothing that indicates that we have any idea of these long-run implications or what the long-run solutions may be. At that time we suggested to the minister that this was one area where a royal commission would be of use. I do not usually favour them; they are not always very successful. But it seems to me that in an area of gathering statistics and trend production a royal commission could be of great value. It could lay out for us-


John Robert (Jack) Nicholson: Mr. Chairman, would the hon. member not agree that this is a field in which the Economic Council, in view of their recommendations, might undertake the study?


Reid Scott: I do not think so, because when the council appeared before us today they indicated that the informationgathering facilities in Canada are so poor they have virtually no really reliable statistics. An enormous change would have to be made in this type of statistical gathering before it would be reliable. The chairman was very honest and frank. He went right down the list and showed us the many areas in which no reliable statistics are available.

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Therefore, Mr. Chairman, I do not think the economic council could be properly used in this respect. It seems to me they will have their hands full in the next few years trying to gather the right kind of information on which to make projections in the field of investment, manpower, employment, trade, exports and those other matters which must be considered if we are to make any sort of adequate goals for the economy. I still think the royal commission would be a good idea. But if the minister can set up some investigating body under the council, I do not really care, as long as something is done now to find out what urbanization will do to Canada. If we wait, as we have waited with regard to housing, and just deal with it one a year-to-year crisis basis, many people of this country will curse us in the future.
Half the troubles in our big urban centres today have been caused by the fact we have never really planned ahead and tried to figure out these problems. We have never studied where we are going in this field and what we will need; therefore duplication and wastage of money can be found all over the place. If we do not do something to solve these problems, I think we will be cursed by later generations. There is also a committee of the house that might do some useful work in this area. To my knowledge, the housing committee has never met. There is no reason why some of this material should not be referred to that committee and useful studies undertaken by it. But the committee has not been convened, and nothing has been referred to it.
Those are the few remarks I wanted to make on behalf of the New Democratic Party. We do not think this change in the interest rate is justified or warranted. We think it will create hardship for our people. We do not think it will provide the flow of funds required, and even if it does bring in the money high priced houses will be built that the vast majority of people cannot afford anyway. As has been said, the N.H.A. is socialism for the rich and free enterprise for the poor. That is all that will be accomplished, even if you get the flow of money into the housing field. In the final analysis, the success or failure of the whole question of housing will devolve, I think, on the minister.
I repeat what I said three years ago, that the minister has an opportunity that most people in this house would envy. With sufficient energy, initiative, intelligence and resourcefulness, he has it in his power to start the process that will change the whole face of

this country. He has it within his power to regenerate our cities, to house our people adequately, to look after the elderly, to prepare for the growing families, to take care of our small towns which need rehabilitation, and to take care of the farm housing problem which exists. All this lies within his power if he has the initiative and courage to undertake it. This has not happened to date. I am not being unduly critical because the minister, as I said, has just too much to do. But perhaps now that he has all the strikes settled and all the labour problems out of the way, he can deal with this serious housing problem. I see that the minister raises his fingers, indicating that he has two labour problems to settle. Well, perhaps by Christmas the minister will have those problems out of the way, and for 1967 as his centennial project he might consider initiating a genuinely effective, progressive housing policy for Canada.
[DOT] (6.40 D.m.)


Mr. Chretien:: Mr. Chairman, I have nothing much to add to the speech made by my hon. friend.
Of course, I think as always that the main deficiency of his speech is a lack of realism. For approximately half an hour, he dealt briefly with socialism, the housing problem, but mostly with urban development. If we want Canada to be a united country, we must realize that there is a constitution. I do not want to pass for a constitution maniac, but after seeing the federal government concern itself repeatedly with problems that are none of its business, such as urban development in Canada which comes under provincial jurisdiction, unnecessary conflicts are created. Federal members may have their own opinion about the problems of urban development, but even though they wished to solve them, they have no jurisdiction to do so. Why take up hours and hours to try and solve those problems in this house? We shall not succeed in solving them, and if we try, we shall only cause unnecessary trouble once again. Let each one stay in its field. We have enough problems to settle at the federal level; we should leave provincial problems in the hands of provincial authorities. I believe that is the only way to administer the country properly.
But I would rather deal with the rate of interest announced by the Minister of Labour (Mr. Nicholson) the other evening. I think that we should approach that problem realistically. Many will perhaps feel that the per cent
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rate of interest is exaggerated. But the present circumstances must be taken into account. When we consider that the rate of interest of the C.M.H.C. is 6f per cent and that the province of Quebec has to pay more than 6J per cent on its bonds, well, it is unrealistic to want to borrow money for private houses at a lower rate than the governments must pay themselves for their own financial needs.
The interest rate on C.M.H.C. loans for urban renewal projects, low-cost housing, university students' residences, sewage systems, etc., varies every three months according to a formula included in the bill and according to a differential of J of 1 per cent more than the borrowing rate of the government.
As far as the present problem is concerned, if the general rate of interest of the C.M.H.C. does not change, along with the other interest rates of the corporation, then we develop a policy detrimental to the financing of public institutions, such as low-cost housing, university students' residences, etc. The minister responsible for the C.M.H.C. had no alternative but to change the rate of interest and set it at a more realistic rate.
Why set that rate? Because, at the present time, there is not a single private institution which is interested in lending money under the National Housing Act. Why? Because the rate of 6i per cent is not adjusted to the present interest rate. One knows very well that there are people who want to build houses and who now get loans at 8 and 8J per cent from financial institutions; consequently, why should those companies lend money at 6J per cent when they can get 8 per cent? Of course, the difference of 1| or 1J per cent was enough to cover the greater risk.
But if the interest rate is raised to 7J, then the private institutions might be interested in lending money under the National Housing Act. And those who are now getting loans at 8 per cent will get them at 7i per cent. Thus, we are helping those who want to build their own homes get lower interest rates. It may be too much at 7J per cent but, as mentioned earlier by the hon. member for York North (Mr. Addison), in those countries which are so dear to our friends of the New Democratic Party, in Sweden for instance, the interest rate on housing is higher than in Canada, and that country is supposed to be an earthly paradise. We know also that the rate in England and in France is much higher than in Canada. Of course, one must live with the times. The
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interest rates are high because the international economy is forever expanding and the demand in all sectors is sustained. The demand being so heavy, the interest rate increases because there are less and less funds. To be practical, solutions must be found to help housing, and this is one of the solutions found by the minister, because it is said the present government is doing nothing to help housing.
In 1965, this government loaned directly, under the National Housing Act, $435 million, which is an unprecedented amount since the establishment of the corporation. As a matter of fact, from the time we came to power in 1963 until now, no previous administration has made more funds available to the C.M.H.C. than the present government.
One can say we are making a real effort. Maybe we could do more, but we must keep in mind the limits of the physical possibilities on the government; the borrowing capacity of any administration cannot be burdened indefinitely. I think we have, in the province of Quebec, a government which realizes that one cannot borrow without any limits. The problem is obvious enough now, what with the difficulties experienced at the moment by the province of Quebec in finding lenders on all the international money markets.
Therefore, Mr. Chairman, I think a certain flexibility had to be introduced in this legislation. Since there was some flexibility in interest rates of loans for urban renewal of low-rental housing, student residences and sewage systems, the minister wanted to introduce the same flexibility here. Because of the present high interest rate in Canada, the interest rate for construction work will be 7i per cent, but if the money market becomes easier in the following months through the flexibility which the minister wanted to introduce in the legislation, then the interest rate will diminish. There are immediate advantages to be derived from this measure: many Canadians, I am sure, will be able tomorrow to get loans from private institutions at 7J per cent because of the change made by the minister. If the minister had not made this change, the same people who now want to build houses would have to pay 8, 8J or even 8J per cent interest on a first mortgage.
Therefore, I believe that, in introducing this legislation, the minister took a step which will help many Canadians to build a house more cheaply than they now can. If the 7J per cent rate seems rather high, in my opinion 7J per

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cent is better than 8]- per cent, and I must support the minister in this initiative.


Alexander Bell Patterson: Mr. Chairman, when the minister made the announcement on Tuesday-evening that the interest rate for national housing was to be raised, my colleague the hon. member for Okanagan-Revelstoke voiced the concern that we in this group share over a course that we believe will have nothing but detrimental effects upon our society as a whole. We cannot understand how the increasing of the interest rate for residential construction will be of benefit except perhaps, as has been pointed out, to some of those in the higher income brackets who will be able to go ahead and construct homes that only they are able to acquire. It means, as was pointed out in the memorandum from the Canadian Labour Congress, that those who are in the lower income brackets will have to be satisfied with the cast-offs of those who are in a better financial position.


Reid Scott: They will be unable to afford homes at all.


Alexander Bell Patterson: That is right. Under the circumstances, it is difficult to understand just how they will be able to secure any type of accommodation.
The reason the minister gave for this increase in the interest rate was that it was to encourage or attract investment capital for residential construction. The question has been raised just how this will happen. I do not believe that this step will result in the realization of the stated objective; but as I have pointed out we do know that it will create a very unhappy situation for prospective homeowners.
An article appearing in today's Gazette in the colunm "Your Business" by John Meyer carries the heading "New N.H.A. rate right step taken much too late". I do not agree that it is a right step, but I should like to read part of the second paragraph so as to raise the question whether the step taken by the government is actually going to improve the supply of capital for residential construction:
The increase in the rate from 62 to 72 per cent is not going to attract much in the way of new funds, certainly not enough to make an appreciable difference in the number of starts during the first half. Conventional mortgage rates are 8 per cent or higher; with a spread of 2 point or more, N.H.A. mortgages simply aren't that competitive.
So, this writer raises the question whether this step will help reach the objective outlined by the minister.

In speaking on the second reading of the housing act amendments bill I made some general observations, which I do not intend to repeat at this time. Canada's housing requirements have been referred to on a great number of occasions. I think the hon. member for Danforth is quite right when he says that we must look upon housing as something that is absolutely essential to the social structure of our nation. It cannot be looked upon just as a matter of economics. We must consider the fact that if we are to promote that type of society and family life which we believe will be effective in the development and maintenance of our national life, housing is absolutely essential.
[DOT] (6.50 p.m.)
We know that housing requirements will have to meet the needs of increased numbers of immigrants if the government's plans work out. A great many homes are required to meet the needs of new family formations. We cannot, therefore, look with any degree of equanimity at a situation that allows us to lag so far behind in meeting essential housing needs.
Several factors militate against the housing situation and the availability of housing for our people. The high cost of housing now pretty well leaves the vast majority of Canadians out in the cold. They have no possibility of investing in a home under the present circumstances. Many people must be satisfied with inferior types of housing, left by some of those who have moved higher in the scale. High interest rates are another hurdle our people have been fighting to overcome. Now, we find that the people have to face an even higher interest rate which will militate against any possibility of their achieving homes of their own.
Tight money, the labour shortage and all these other things have been referred to, and they all have a detrimental effect on housing. We heard a great deal a couple of years ago about the desirability of home ownership, and we talked about the possibility of every person in Canada being able to acquire his own home, to maintain dignity and give a sense of security. We felt that this was good for this great and growing nation. We talked in glowing terms of the time when all people would be able to own and occupy their own homes.
Immediately thereafter the government engaged in actions that worked to the opposite effect, making it practically impossible for the people of Canada to realize their objectives of home ownership. I suggest that instead of the
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government moving towards increased interest rates, tightening money and so on, it should be engaged in a program that would enable our people to obtain and enjoy their own homes, to be able to bring up their families in decency as they have every right to do.
The government imposed the 11 per cent sales tax on building materials, and this followed immediately after that talk of the desirability of people owning their own homes. The government moved toward withdrawing the exemption of sales tax on building materials. It was very difficult for the people of Canada to understand why the government moved in that direction, and it was difficult for them to understand how the government could reconcile its action with the talk that everybody should own his own home.
I think the request is properly in order. It is made by the National House Builders Association. The association suggests, in a document I hold that:
The rebating of the 11 per cent sales tax on residential building materials could prove most effective.
The minister is aware of the representations which have been made about this matter. The government refused to yield and still refuses. Now, it has increased the interest rate making it almost impossible for most Canadians to own their own homes.
There was also a grant program that enabled people to construct their own homes and to receive a rebate of $500. That has gone by the board. I do not know why. Perhaps it was too effective, so the government decided to withdraw from that program. Here again, the government action militates against those objectives it was encouraging in Canada. It is hard to reconcile the two positions of the government. There are those words uttered by the Prime Minister about the desirability of extending the house building program and making funds available for home purchases, and the present government announcement. It is difficult to reconcile the two.
A suggestion by the National House Builders Association is for the introduction of legislation to amend the Income Tax Act to allow home owners to deduct from their taxable incomes payments of taxes and mortgage interest. This would have a beneficial effect. It is said that the administrative problems might be so great as to prevent the implementation of such a thing, but I do not believe that. Such an amendment ought to be brought in and implemented.
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In addition to that, we ought to consider the recommendation this afternoon of the hon. member for York North that consideration be given to allowing depreciation on residential housing. After all, consideration is given to depreciation with respect to commercial property. Residential housing ought to be considered in the same way as commercial property. Here again, though the people are asked to accept an added burden, they would feel they were benefiting, and that they were not suffering too greatly by government action.
Instead of hiking the interest rate, the government should provide additional capital at much lower rates to continue the housing program and to help our people.


Some hon. Members:: Hear, hear.


Mr.   Paflerson@: On second reading of the banking legislation I suggested that to release the pressure on private investment capital the government, through the Bank of Canada, ought to make social capital available for schools, hospitals and things like that. The government should make available, through a municipal development bank or some agency of the Bank of Canada, capital to meet those needs thereby taking the pressure off the available private capital which would then be diverted to housing.
I want once again to state, as strongly as I can, our objection to the procedure that the government is taking in this particular area, because it will drastically affect the welfare of our people in all walks of life from coast to coast.


Mr. Chailerfon:: I had hoped to speak during the committee stage on Bill No. C-241 but unfortunately I could not. I am grateful for th's opportunity, in the estimates of the Minister of Finance, to say a few words about housing.
Again I want to commend the minister for the amendments, by way of Bill No. C-241, to provide N.H.A. loans for older homes. Of course, these loans have been promised since 1943. I am glad that belatedly this promise has been fulfilled. I again urge the minister not to set the amount of loans too low, because if loans go up to $10,000 only-as has been quoted-they will not have the effect of rehabilitating those houses most in need of rehabilitation. In other words, if a loan is for $10,000, and of that $2,000 has to be used for improvements, that loan will not rehabilitate the type of house most capable of being rehabilitated. I suggest that a figure of $14,000 or $15,000 would be more reasonable.

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[DOT] (7:00 p.m.)
I wanted to say to the minister that by the answers he had given in the house I knew he was considering raising the interest rates. I wish to advance at least one reason why I believe it would be better to make more money available through direct loans than to increase the interest rate.


John Robert (Jack) Nicholson: Would the hon. member permit a question? If the government keeps borrowing, does he not think the government's rates for such borrowing will also go up?


George Louis Chatterton: Yes, indeed. But looking at this from the point of view of the individual I believe it is good for a young couple to own their home. I am thinking particularly of those in the lower income brackets. Housing is not entirely a matter of finance. There is a social aspect involved.


Some hon. Members:: Hear, hear.


George Louis Chatterton: I believe that the federal government has a responsibility for showing initiative. Responsibility also rests with provincial governments and the municipalities. But the initiative lies with the federal government and the action which the government has now taken will, I believe, make it still more difficult for those who most need housing to raise the money they require. Admittedly the government's action will make more money available. That is obvious, I think. As to the provision for making loans available in respect of existing houses, that is a major step in the right direction and I commend the government on having taken it.
One reason the minister should have made more money available by means of direct loans arises out of the condition created by the press release which C.M.H.C. issued on July 27 and bulletin No. 181 of July 29. I have read these documents repeatedly. I agree that if one reads them very carefully one will see there is an out inasmuch as they say "subject to moneys being available". But I wish to tell the hon. gentleman very sincerely that I have spoken to many contractors in my own area and to the president of the Victoria Home Builders Association, and I know that a general impression was created among the builders, particularly among the smaller ones, that the whole intent of this press release and bulletin was to announce that funds would be available for the winter period.
The result was that many small contractors did not apply for funds before August 1 because the bulletin gave the impression that they had until the end of September in which

to make application, during which period direct loans would be made available to speculative builders as a means of increasing construction in the winter. This was the impression created, particularly in view of the fact that the $500 winter construction bonus was to be removed. I am not blaming the manager of the local C.M.H.C. branch office, because he had been urging all contractors to make their applications early. As it was, many of those who put in their applications early enough were given direct loans-nine, in one case, and so on. I agree that now the interest rate has been raised a greater amount of conventional money will be available, but the builders who put in their applications early and received direct loans will nevertheless be in an unfair competitive position compared with those who did not get their applications in before August 1.
As to the whole question of the government's attitude toward housing, I have indicated that I believe there is a social aspect involved. A man earning $8,000 or $10,000 a year can normally finance a home whether the interest rate is 7j>- per cent or 8 per cent. But people earning lower incomes and elderly people find themselves in a very different situation. I am sure the minister has read the report of the Senate committee on aging. According to that report there are some 300,000 elderly families and elderly single people who are in need of housing. The type of financing we are talking about this evening cannot help them in any way. According to the minister's own report, fewer than 1,700 units have been provided by way of public housing.


John Robert (Jack) Nicholson: I would not want any such impression to be left on the record. In the province of Ontario alone indications are that there will be as much public housing built or started in 1966 as was built in approximately half the last decade, as much in one year as in five years in one province.


George Louis Chatterton: I was speaking of actual starts. I am sure that what the minister said is correct. The minister spoke of anticipated buildng. But that does not mean very much since according to the Senate committee report only 13,000 rental units have been provided since 1939 of which only 167 were earmarked for old people. Even if this record were increased fivefold it would not touch the need. The annual report of Central Mortgage and Housing Corporation says that according to statistical evidence the housing need among old people in Canada is large and widespread.
November 24, 1966

I have been talking about the immediate demand for housing on the part of elderly-people. The next group I wish to consider consists of people earning less than $5,000 a year. I am sure the 11 per cent sales tax on building materials was a wrong tax, one of the worst that could have been imposed. Granted, the government needed money but surely there was a better means of obtaining revenue than by imposing a tax on building materials. One of the largest house builders in my area told me that the effect of this sales tax was something like $1,000 per house. I understand that in the Toronto area the cost of the average house has increased by 26 per cent in the last 18 months. The first increase this year was on January 10, a 15 per cent increase in the cost of building. This puts even farther out of the reach of the low income family, the family which in my opinion needs it most, any prospect of decent housing.
[DOT] (7:10 p.m.)
I can do no better, Mr. Chairman, than to quote from today's Ottawa Citizen, a paper that has not been too hostile to the Liberal party, an editorial headed, "Try Again, Mr. Nicholson." It reads in part:
Labour Minister Nicholson, in announcing higher interest rates on National Housing Act loans late Tuesday evening, has just added to the pressures that are making the ownership of new homes increasingly out of the range of people in middle income brackets.
The editorial says "middle", and I would say even farther out of the reach of the low income bracket people. I continue reading from the editorial:
-where Mr. Nicholson has so far erred is in insisting that Central Mortgage and Housing Corporation's participation in the direct loan field has to be limited to a small proportion of the total of insured loans offered by N.H.A. Throughout the year Mr. Nicholson has been insisting home builders should be seeking their funds on the regular money markets. The effect has been that the government's direct loans for residential construction have been limited to 31,500 units, the same as last year, in a period when government policies have dried up funds from investment houses.
I conclude with this quotation from the last paragraph of the editorial:
The errors of our ways are pointed out in detail in the Economic Council report. It is up to the government now to come up with some long-range solutions.
I believe the minister to be sincere and conscientious. I know he has been busy with all kinds of problems and is involved with two major ones at the moment, but I urge him to look at this matter not from the point of view of straight finance but from the point of view of the social impact of housing in a country
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such as Canada. I have always believed that if a couple own their own home they own a piece of Canada. They are more likely to be responsible citizens who take an interest, first of all, in local affairs and then go from there to provincial affairs, then to national affairs and eventually international affairs.
I do not say that when our government was in power it was perfect in any way or that it did all those things which it should have done. But I do say that the statistics are clear as to the growing number of families needing homes. This problem is going to become aggravated. The action of the government in raising interest rates will provide some additional money but it puts home ownership farther out of the reach of the people who need housing most. I urge the minister to make more direct funds available for prospective home owners, even at the increased interest rate if that is necessary.
I think the statistics provided by C.M.H.C.. are probably better in many respects than those provided by the Dominion Bureau of Statistics. We have all the necessary information available. We should use it to provide a long-term plan, keeping in mind the social aspects of housing in a country like Canada.


Herman Maxwell Batten: The hon. member for
Verdun.


Mr. Mackasey:: Mr. Chairman-
[Translation]	,,


David Réal Caouette: Mr. Chairman-


Bryce Stuart Mackasey: -recognizing that other hon. members want a chance to participate in the debate-


David Réal Caouette: November 24, 1966
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Herman Maxwell Batten: The hon. member for Ville-neuve can be quite sure that the Chair will recognize him but at the moment the Chair recognizes the hon. member for Verdun.


Reid Scott: On a point of order, Mr. Chairman, I do not think we can let that remark pass. All of us in the chamber are aware of your fairness and impartiality, and I think the record should show that nobody in the Creditiste group stood and indicated a desire to speak prior to the appearance in the chamber of the leader of the party just a short time ago.


David Réal Caouette: It is the custom in the house when we start debating a question that each party has the opportunity to speak. We did not attempt to use our opportunity at the start but I want to use it now, and I think I was fair in saying what I just said.


Herman Maxwell Batten: Order, please. I think the hon. member for Villeneuve should recognize that when this discussion first began an effort was made by the Chair to recognize each party in turn, as is usually done. Nobody from his party rose at that particular time. The hon. member for Fraser Valley spoke following that, and the Chair now recognizes the hon. member for Verdun.


David Réal Caouette: That is all right.


Bryce Stuart Mackasey: Thank you, Mr. Chairman. I shall keep my remarks brief and to the point, following the trend of the very objective discussion we have had so far and the very encouraging suggestions that have been made. I find myself practically in complete agreement with the hon. member for Danforth and other speakers-


Reid Scott: You were not the other night.


Bryce Stuart Mackasey: I said practically. It is just a matter of degree, because I think the theme running through most of the speeches so far is that there is no member of the House of Commons who believes there should be any Canadian without decent housing, particularly in a country that prides itself on its affluent society and the fact that it is one of the richest nations in the world.
Where I may differ a little with some hon. members is on the matter of priorities, and I wish to make my point in my own rather odd manner. I should like to review briefly the

history of housing in Canada and the evolution of C.M.H.C. and the National Housing Act. 1 wish to review the situation in 1946 when C.M.H.C. in essence, took over the various federal departments that existed then looking after housing during the war.
All of us who are old enough to recall 1946 will remember it was the year when thousands of members of the armed forces were returning to Canada, anxious to forget the war years and particularly anxious to enter what they called civvy street, to attend universities, to resume their marriages or to get married. This created a particular type of housing problem, one that was very adequately met by legislation and amendments to the National Housing Act that were introduced to help alleviate the problem.
I can recall 1946 very vividly from personal experience. I bought a home that year under the provisions of the National Housing Act. At that time land in my riding, because it is on the island of Montreal, was fairly expensive but I and many other people were able to obtain a good, self-contained dwelling on a lot 50 feet by 100 feet for $5,000. At one time such dwellings could be obtained for $4,800 but by the time I, like other timid people, took the plunge they were selling around $5,000. I am using round figures for simplification's sake.
* (7:20 p.m.)
This meant that with a mortgage spread over 20 years, available from a life insurance company and endorsed by the government, the principal cost me $20 a month. The interest, at the prevailing rate at the time of 4J per cent, came to another $15 a month and municipal taxes $25 a month, making a total of $60 a month. For $60 a month I was able to fit in the price picture mentioned by the hon. member who just sat down. For $60 a month and a rather modest down payment I could own my own home, garden and the rest of it. This is very realistic. This experience, of course was repeated across the nation. But hon. members know the economic changes we went through. Land became scarce, particularly in the centre of cities and even on the immediate perimeter, and people were forced out to suburbia, as we call it, in order to take advantage of lower land costs. Municipalities then began introducing stricter building codes which added to the cost. The people who moved out to these areas found that what they had saved on land they were losing in transportation costs and so on.
November 24, 1966



Twenty years later the situation has evolved into one where the same type of person is faced with the fact that if he wants similar accommodation to that which I had he must assume a mortgage in the amount of $15,000. In an effort to verify this fact I inquired today at Central Mortgage and Housing Corporation and was advised that on the average the amount of an N.H.A. mortgage is $15,000 per home. With the increase in the interest rate this will mean an increase of $4.50 a month in the payment. The point I am trying to make is that even at a 2 per cent interest rate, with the tremendous increase in municipal and school taxes the average couple in my area would be expected to meet a monthly payment of close to $175. These are the facts, even figuring it at 2 per cent, let alone at 7-| per cent.
Like the hon. member for Danforth and others I am vitally concerned about the plight of the senior citizens and those people whom we used to call the poor. The average income in Canada is around $6,000. A man earning $6,000 cannot afford a $15,000 mortgage today. This is what we should understand. The increase in the interest rate, which will generate more money, no doubt will stimulate housing starts in the category of $15,000 mortgages, but I couldn't give a damn, if I may use that expression in the House of Commons, for the people who need that type of a home. I am concerned about those who are earning $4,800, $5,000 or $6,000, as well as the older people who go into convalescent homes and other fire traps where they are left to die. The Eskimos were more kind to their senior citizens when they left them on an ice floe. These are the people in whom I am interested. The rate of interest in respect of loans available to help this group of people has not been increased. I think this is important.
In all fairness to the minister I think it should be re-emphasized that the rate of interest has not been increased in respect of loans to municipalities and through provincial housing authorities under section 16A of the National Housing Act which are designed to provide homes for the senior citizens of Canada. This is done through municipal authorities or by non-profit organizations, service clubs and other media with which I and everyone in this house is familiar. Many of us who have participated in this debate because of our deep concern for the plight of the people and the obvious necessity for a new or expanded policy in respect of urban renewal have forgotten the fact that the increase in the interest rate will work a hardship on persons who can
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afford a $15,000 mortgage. The amount of the average mortgage under the National Housing Act is $15,000. I feel that if a young man can afford a $15,000 mortgage he can also afford $4.50 more a month in interest. He is not concerned about the interest rate but rather with the fact that money is not available at all. He is quite willing to pay 10 per cent if he can find the money.
These are accurate figures, and this brings me back to the point made by the hon. member for Danforth and others. What is the federal policy in respect of providing housing for those people in Canada who need it? Let us define who these people are. I will shorten my remarks. I had intended to quote some statistics, but I know that at least two ministers wish to participate in this debate. I think we must be blunt and say to the average married couple who are 22 or 23 years of age that it is not in their best interests to assume a $15,000 mortgage particularly when they have no children or perhaps only one or two. What we need and need badly in this country are housing projects in which the average young couple just starting out in the labour force can rent an adequate home. I am not speaking of projects such as we had 10 or 15 years ago which became slums. I have in mind projects which will have some dignity and will have recreational areas and schools close by. This is what we need. I think too the government and Central Mortgage and Housing Corporation must investigate the new concept of land leasing.
I might mention a good example of a land leasing operation in my area. A project is being developed on precisely these terms. A person can buy a home and rent the land for 99 years. As usual this type of imaginative project is being financed and sponsored by United States interests and with United States capital. An effort was made over a period of ten years or more to find the capital in Canada to develop this project and because it was unsuccessful United States interests were finally attracted to the project.
I know there are many others who wish to speak and I will be brief. I should like to say, however, that we just cannot hide behind the B.N.A. Act. We must give direction and I think we are giving direction. I refer to the latest bulletin issued by Central Mortgage and Housing Corporation. I am sure that everyone who has participated in this debate must have had a look at it. Normally Quebec looks upon

November 24, 1966
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this type of financial assistance which is available to municipalities with a degree of suspicion. However, I note, for instance, that a loan of $350,000 was advanced to the Y.W.C.A. for the construction of a hostel which will have 112 beds. This is just a random example.
[DOT] (7.30 p.m.)
There are other examples to be noted. For example, a loan was provided to the city of Montreal that ran into millions of dollars to provide housing for those people who really need it rather than for young people who can afford a $15,000 mortgage. I am concerned about the man who makes $92 a week and goes to work with a lunch pail under his arm. He wants to rent a decent flat at a fair rental, preferably in the heart of the city near recreational facilities and his church. This is the challenge which faces Canadians, but it is not a challenge to be faced exclusively by the federal government.
Many months ago I mentioned my own community as an example of communities that have not assumed their moral responsibility to their senior citizens. Cities and towns should develop their own housing projects. I had suggested this so often in debate that someone wrote me a letter pointing out that I was not only a member of parliament but a citizen of a community and asked me what I had done about the situation. This bothered me for several reasons and I did something about it. I went to the community and appeared before the local council and acquainted them with what is available in the way of money. This community has now reached an agreement on a project and has been informally assured by the province that it will approve the project. In the city of Verdun we are now building a community project for our senior citizens which should accommodate over 100 couples. At the same time the local Lions Club in conjunction with the city, which is going to either give them the land, lease it or lend it to them for 100 years, intends to build a project which will accommodate 35 or 40 individuals.
The whole point I am trying to make is that the federal government is not shirking its responsibilities in this important area. There are millions of dollars available to communities which get off their fannies and do something about this problem instead of coming here whining to the federal government or to members of parliament. The citizens of the communities should be getting after their reeves or aldermen and asking them what they are doing for the $400 a month or so they
[Mr. Mackasey.l
are receiving. In other words, social groups and church groups should re-examine their consciences and get after their civic representatives to do something and take advantage of federal legislation. No matter how much we rant and rave about the situation we can do nothing under the B.N.A. Act but make money available and hope the communities will take advantage of it.
Let me put on record one or two examples of what took place in September, a month which was full of activity in public housing. Some communities across Canada are doing things in conjunction with the federal government to solve their housing problems. I heard someone suggest that the federal government advance money for research before a project is started. We do just that, Lachute, Quebec, received in September, $14,000 to pay for research to determine exactly what its need is. As the hon. member for Danforth suggested, this type of research could be done through a royal commission, but funds are available to communities right now.
Let me point out to members the scale on which these funds are available to municipalities across the country. After all, the communities should know their needs best and it is up to the civic leaders elected to do something about the situation. Longueuil received $15,000, Newmarket, Ontario, received $6,900, and Shaunavon, Saskatchewan, received $7,500.
This document also indicates that $1,688,082 was authorized by the federal government during the month for low rental projects comprising 82 self-contained housing units and hostel accommodation for 250 persons. It then gives details of loans approved under section 16A of the act, but I shall not read them all. Fort Qu'Appelle received $204,000; Gladstone, Manitoba, received $89,000; La Sarre, Quebec, received $291,000-these are round figures -Lundar, Manitoba, received $72,000; Ottawa received $277,000; Quebec city received $350,000; Regina, Saskatchewan, received $45,000, and Yorkton, Saskatchewan, received $357,000. I am more impressed by these figures and the projects for which these loans are being made than I am by complaints of young executives who are upset because of some unaccountable reason they cannot find the ways and means of assuming a $15,000 mortgage.
I agree with a great deal of what has been said today and the principles enunciated by hon. members. It is a shame that any Canadian should be living in a substandard
November 24, 1968

hovel, which is what too many of them are doing today. The fact still remains however, that we have a duty to establish priorities and stick by them. The last individual who needs assistance, as long as our senior citizens cannot find accommodation, is the one who can afford a $15,000 mortgage. I am worried about the individuals who earn $89, $100 or $110 per week and who can afford to rent a decent place in which to live but cannot because such housing is in short supply. I am sure the hon. member for Danforth and those of other parties who have spoken are also concerned about these people.
When members get up in this house and say that because we have allowed the interest rate to increase by half of one per cent, we are creating a tremendous hardship they are not being accurate. The increase will in effect mean an increased payment of $4.50 per month for those who have a $15,000 mortgage. I do not know of anyone who is in a better position to pay $4.50 per month than the individual who is earning $8,000 to $12,000 per year.
Before anyone, including myself, condemns the federal government, let us do a little soul-searching as individual citizens of communities. Let us ask the elected officials of those communities why they do not take advantage of the money made available by the federal government in order to wipe out slums and provide decent housing accommodation for the senior citizens. If there is anyone here today that should be doing some soul-searching in respect of this problem it is not the Minister of Labour nor the House of Commons; it is those individuals who run the communities across the country. They continually try to transfer their responsibilities to the shoulders of higher authorities.
We provide the money, the research and the know-how. We have regional offices all across the country. We can do nothing more under the B.N.A. Act but ask those communities to seize the initiative and take advantage of funds available to bring to their communities the type of housing they need.


David Réal Caouette: Mr. Chairman, my first words are directed to the hon. member for Verdun (Mr. Mackasey) who is asking the municipalities and the communities of our country to take their responsibilities. I wish to tell him that he should start by bringing
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some relief to the Canadian taxpayers, so that they may be able to pay their school and municipal taxes; then, the school boards or the communities will probably be able to allow these individuals to have some property or some assets.


Bryce Stuart Mackasey: Mr. Chairman, I rise on a question of privilege. I have a high respect for the hon. member and I think in all sincerity he does not wish to misconstrue my remarks. I was referring to the areas where interest rates have not been increased. I was talking specifically about the funds available to communit;es within his riding for senior citizens' projects, low rental projects, slum clearance and improvements of this kind in the social area. This has nothing to do with school taxes or municipal taxes; it is a medium by which communities can borrow from the federal government 90 per cent of the money needed, with repayment over a greatly extended period of time.
[DOT] (7.40 p.m.)
I agree with the hon. member that the average community, particularly in my province, is paying through the nose for school taxes and the average home owner in small communities cannot afford this additional burden. This brings me back to my original argument, that young people between 20 and 25 years of age who are thinking of assuming a $15,000 mortgage should get the advice of someone they can trust, someone who can put the facts before them and point out to them that it is not always in their best interests to assume this kind of burden at that age.


David Réal Caouette: I would ask the hon. member to join another political party so we can solve this problem, because there is no solution in what the government is proposing now.

Mr. Chairman, in my opinion, raising of the interest rate on loans from 6J per cent to 71 per cent, ostensibly to help small wage-earners, does not bring any solution to the problems with which we are now faced. And I am sorry that the Minister of Finance and Receiver General (Mr. Sharp) is not in the house at the present time. His parliamentary secretary (Mr. Chretien) is here but the minister himself is absent.


Mitchell William Sharp: Mr. Chairman, may I answer the question put by the hon. member? The money is raised either from the taxpayers or by borrowing on the market, just as we
November 24, 1966

would raise money for any other purpose. I can assure him that it costs the taxpayers their taxes or costs the government money to pay interest on the money the government has to borrow. It is not borrowed by the Canadian government without cost.


David Réal Caouette: 
Mitchell William Sharp: The answer to that question, Mr. Chairman, is also simple. This is a form of external aid. I am sure that my hon. friend would agree that Canada has a responsibility to help underprivileged countries of the world which do not enjoy the good fortune of Canada.


Some hon. Members:: Hear, hear.


David Réal Caouette: I enjoy the applause by hon. members of the Liberal party, but would the minister come with me to my own district or to the city of Montreal, the city of Quebec, or around Lake St. John or to the western part of Canada or to the maritime provinces, where I can show him just as much misery as exists in Bolivia, the Congo or anywhere else in the world?

I hear the hon. member for Saint-Maurice-Lafleche (Mr. Chretien) say that it is not true. I will take the hon. member to his own city of Shawinigan and show him the misery which prevails in his own region.


Joseph Jacques Jean Chrétien: I would rather live in
Shawinigan than in Bolivia.


David Réal Caouette: Certainly, in view of the salary you are getting here, you are certainly better off living in Shawinigan than in Bolivia. However, the rest of the people in Shawinigan, the workers, the unemployed, and those who have to live on social allowances only are not much better off than those in Bolivia, the Congo or any other African country.


Joseph Jacques Jean Chrétien: That is demagoguery.
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David Réal Caouette: Mr. Chairman, as I understand it, it is always demagogy when the time comes to help our own people. But when it is time to help others and assume our responsibilities, it is a different matter. I have no objection to helping other people who need assistance, but I object when the powers that be refuse to help first our own people who lack the necessities of life throughout the country.


Joseph Jacques Jean Chrétien: What about social security?


David Réal Caouette: Mr. Chairman, the hon. member for Saint-Maurice-Lafleche talks to me about social security.
Just before coming in the house, I was reading a letter from my riding where there is no more hardship than in Shawinigan, Drummondville or Victoriaville, or in the riding of the Minister of Finance.
Let us take, for instance, the case of a mother with four children who only gets $125 a month and pays a monthly rent of $60. How can she manage with $65 a month to provide for herself and her children?


Mitchell William Sharp: Could I ask the hon. gentleman a question?


David Réal Caouette: Certainly.


Mitchell William Sharp: Does he not realize that there are a great many people in the world whose annual income is not as large as the monthly income of those people in his constituency, who I am quite sure deserve more help and I hope will get it? But I do not think this is any excuse for our not helping the millions and millions of very poor people in the world who without our help are going to die.


David Réal Caouette: Mr. Chairman, speaking with full knowledge of the facts, I wish to say that I visited Iran not so long ago, two months ago as a matter of fact, accompanied by some of my good friends from the Liberal party. We have seen poverty, even abject poverty. It is a fact. One evening, at the Canadian embassy, we met people from Canada, Canadian engineers teaching mechanical engineering to Iranians. One of the professors I met told me: I have been here for nine months. I have tried everything to drill technical know-how into Iranians; after nine months I have not succeeded in teaching one iota of what I have learned in Canada. And the Canadian government wants me to teach

November 24, 1966
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them in two years what it took me six years to learn in Canada.
Mr. Chairman, we saw real poverty. I have seen it with my own eyes. For instance, I went, with my good friend, the hon. member for Chambly-Rouville (Mr. Pilon), to the northern mountains of Teheran, towards the Caspian Sea, where we saw antiquated things, such as could be seen in ancient times: camel, mule and donkey caravans. We would have seen our Saviour Jesus Christ with the twelve apostles and we would probably not have been surprised, because their standard of living and their way of life have remained what they were 2,000 years ago. But that does not mean, Mr. Chairman, that we should neglect Canada or the Canadian people. I have no objection to doing everything we can to help those people. But let us stop imposing on Canadians as a whole more sacrifices to make them tenants instead of home owners. That is where I do not go along with the Minister of Finance.
The Minister of Finance is well aware of Canadian production. It is very well to rise and say: we should feed the poor of the world, we should help them; our own people on social or public assistance are better off than the working people in those countries.
It is all very well for them to sing us that song here and I sincerely believe that we have people getting social assistance benefits who live better than the working people in those countries. But if those people are unable to improve their financial system in a better way than Canada is improving its own, requiring all the time sacrifices from plain folks and allowing the people to get richer, the Creditistes are not going to accept that.
[DOT] (8:00 p.m.)
The hon. Minister of Finance is aware of the situation. If our Canadian people do not have the standard of living they should enjoy and are entitled to, this is nothing to do with national production; it is a question of national revenue, a question of monetary policy, and until such a policy has been adjusted to conditions, production or physical possibilities we have in Canada, the Minister of Finance will spend his time introducing measures like this, namely increasing the interest rate from 6f to 7J per cent, so as to help plain folks to lose their property. The Minister of Finance knows that when a Canadian buys a $15,000 house, taking into account the interest rate that will be required as of now on and the reimbursement

period spread over 25, 30 or 35 years, that house will cost from $25,000 to $30,000.
Mr. Chairman, the Minister of Finance is very well aware that the house building problem and the housing problem, as regards everybody in this country, is not a problem of physical possibilities. All the unemployed living at present in Quebec, or elsewhere, could be hired to build good houses for the Canadian people, and in order to do this, it is not necessary, as pointed out earlier by the hon. member for Verdun, to resort to the British North America Act. It is not necessary to appeal to anybody, if the minister can or decides to assume his own responsibilities. Let the minister stop once and for all telling us that only two ways of getting money are available to the government when it needs it, namely taxes or loans. That is what the minister told us a while ago; Only two ways of securing funds are available to the government, loans or taxes, and I should like the minister to tell me-


Mitchell William Sharp: Mr. Chairman, I did not say that there are only two methods of raising money. I said we are employing only these methods. There is a third method that apparently the hon. member advocates, and that is inflation. That we are trying to avoid.


David Réal Caouette: Mr. Chairman, I am pleased to hear the minister say that the third way is inflation.
For his information, I will tell the minister what I read in the Canada Year Book recently and told the members of the Canadian bankers association who were present at the meeting of the finance, trade and economic affairs committee tonight at eight o'clock. When the federal government issues bonds for $1 million-and the Minister of Finance knows this-our national institution, the Bank of Canada, buys one million dollars worth of federal bonds; this increases by as much the total reserves of the Canadian chartered banks and allows the latter to issue $12.5 million dollars of new credit and to lend money to the government. The minister knows this. Instead of issuing one million dollars worth of bonds, why does the minister not issue $12.5 million in credit without interest, instead of forcing the Canadian people to pay interest on fictitious credit issued by the Canadian chartered banks?
Does the minister wish to say anything else?
November 24. 1966


Mitchell William Sharp: Mr. Chairman, there is a short answer to that question. The method we are now following I think will have much more beneficial effects than the application of Social Credit principles which have not been adopted by any country in the world.


David Réal Caouette: This is a fine reason, Mr. Chairman. For 2000 years now, the Bible has been preached throughout the whole world, and there are still people going to the devil every day. Will the fact that people are going to the devil every day keep preachers from going on with their preaching?
The minister points out the fact that there are no Creditistes or no Creditiste government anywhere in the world. Is this an answer? Does it mean that we cannot begin, here in Canada, giving an example to the whole world? With respect to peace, we all say, with the Secretary of State for External Affairs (Mr. Martin): let us set an example for the world. But in the financial field, Mr. Chairman, if the Minister of Finance, (Mr. Sharp) and the present Liberal government decided to show the way to the world, not by printing money without restriction or without any consideration, but by implementing a monetary system corresponding exactly to the physical criteria, to our country's production, would this not set an example for other countries in the world to follow? Could we not finance by ourselves what we can develop here?
Mr. Chairman, why must we always go to the United States, for instance, or to Europe- but most of the time to the United States-to beg financial permission to build a trans-Canada highway, schools, hospitals, to develop our provinces and our municipalities? Why, if we are physically able to develop our own country, Canada, can we not create the credit or the currency corresponding to our own production?
And then, as Abraham Lincoln, one-time President of the United States said, our money would be as sound as our country would be, because, to the extent that the people, with the help of their government-naturally- with the help of their Minister of Finance, their economists, will build a country represented by an adequate monetary system, there will be security and freedom for each and everyone.
Mr. Chairman, my colleagues, members of the Ralliement Creditiste and myself object to
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this increase in the rate of interest on residential housing projects. It does not solve the problem and, as the Minister of Labour (Mr. Nicholson) was saying yesterday, chartered banks will enter the conventional loan market. Eventually, they will come into this market and will be able to grant loans bearing interest at a much lower rate than 7J or 6] per cent, since their power to multiply money enables them to operate at costs ranging between 1J, If, or 2 per cent.
Mr. Chairman, when people apply for loans, why does the Minister of Labour or the Minister of Finance object? Why do they submit plans to increase the interest rate when those interests are at present the cause of inflation in Canada. And when the Minister of Finance told me laughing that there were three means to meet the financial needs of the country: in the first place, loans, second, taxes and third inflation, it is exactly the third means which the Minister of Finance now suggests that is inflation which makes the poor poorer and the rich richer.
Well, Mr. Chairman, we will side with the poor to fight the rich who want to continue their shameless exploitation of the common workers in Canada and in Quebec.


John Robert (Jack) Nicholson: Mr. Chairman, I welcome this opportunity to participate in the debate on this most important subject of housing and what should be done to try to solve the problem. In participating I may say that my only wish is to try to put the subject into some reasonable or logical context.
I have listened with great interest and great satisfaction to the remarks of most members who have participated in the debate. The remarks on the whole have been constructive. Hon. members have shown a knowledge- perhaps I should also say a sympathy-with regard to this important problem and they have suggested various methods of solving it. Some hon. members have criticized the increase announced two days ago in the interest rate on most N.H.A. lending. That I will refer to later.
[DOT] (8:10 p.m.)
More than one reference has been made in the course of the debate to the very marked decline in housing starts this year. As I have said more than once, starts this year will total approximately 130,000 units compared with 166,600 last year. Dwelling completions this year, however, have been much higher than

November 24, 1966
Supply-Finance
the number of starts; also there was an encouraging number of starts after the middle of August. This year we shall complete 155,000 houses, slightly more than the number of completions in the record years prior to 1965. These totals, I must say, compare with an increase in housing needs which may average close to 170,000 houses per annum for the next three years or so. Indeed, as mentioned by the hon. member for Danforth, it may well reach a level of 200,000 per annum in the early '70's.
The government recognizes that this disparity between housing production and housing needs cannot be allowed to continue. The Economic Council of Canada has pointed out in its recent report the necessity for early action and I entirely support the recommendations the council has made. The need is to find solutions to bring about the desired result. I might say that there is no single action which could be taken by this or any other government to bring those two figures into better balance. There must be an attack on several fronts and in this connection a few figures might be helpful in placing the matter in proper perspective.
Of the 130,000 housing units started in 1966, close to 50,000 units are being financed by the federal government under the National Housing Act. This is an increase of over 30 per cent over any other year in Canada's history. Another 60,000 units are being financed by conventional loans from the lending institutions, as against a total of 100,000 by them in previous years, a drop of 40 per cent this year. The remaining 20,000 or so units are being financed outside the institutional mortgage market by people who can afford to use their own money or borrow from the banks, or perhaps they sell one house and build another with the proceeds. But of the 50,000 units financed under N.H.A., nearly 35,000, approximately one-quarter of our total housing production in Canada in 1966, are being financed by direct loans through C.M.H.C.
This is a much higher proportion of government assistance to the housing program than at any time in Canada's history. This assistance has involved an expenditure of public funds through Central Mortgage and Housing Corporation amounting to more than $600 million in one year. This, I might say, is well above the 1964 and 1965 record totals of $400 million and $500 million respectively. I might also mention that the increase has been even more marked in the field of assistance to
housing for low income groups and for the elderly. A record figure, $65 million, was spent in 1965 for such housing, but the total will be approximately $100 million in 1966 and there is every indication that in 1967 the figure will be considerably higher still.
In Ontario, the province has embarked on a program to build within two years approximately the same number of public housing units as were built in the whole of Canada in the previous decade and I am advised that the program is right on target. Ninety per cent of the money for that program is being provided on loan by the federal government, and we are continuing to provide it not at 7| per cent or 6f per cent but at 6J per cent. These are the figures which hon. members should keep in mind when they ask whether any thought has been given to the needs of the people in low income brackets.
I am sure that all hon. members regardless of party will agree that the figures I have just cited show that the effort of the federal government to assist the Canadian housing program is a really magnificent one. Possibly we could do more. We would if the money were readily available. But as the Minister of Finance pointed out a few moments ago there are two ways of raising money, by taxation or by borrowing. The federal government is lending money for housing in the rural areas at the rate of only 5 per cent. What reference has been made to that in this house during the last two days? We are continuing to lend this money at 5 per cent, yet this has not been mentioned. We are also continuing to lend it for university housing, and under the new legislation we shall make it available for college and technical and vocational school housing and the interest rate there is 6J- per cent, not 7,j- per cent. The same is true of other loans to municipalities for projects which have an important bearing on housing. Sewage treatment loans are continuing at the level of 6j per cent. Have we heard any reference to this action by the government in the last two days?


J.-H.-Théogène Ricard: Would the minister permit a question? Will he tell us which administration started the loans for sewage projects?


John Robert (Jack) Nicholson: Yes. If the hon. member had been following the debates on housing in the last year or so he would have heard me say on more than one occasion that these loans were started under the former government, and I gave due credit for that.

November 24, 1966


J.-H.-Théogène Ricard: I should like very much to hear it again.


John Robert (Jack) Nicholson: When my time is limited I do not like to repeat compliments that I have already paid.
I wish to assure the committee of the government's genuine interest in housing of all kinds, especially in housing for people with low incomes, the elderly and the others who need special assistance in this field.


William Heward Grafftey: We want action, not interest.


John Robert (Jack) Nicholson: Well you are getting it. As was pointed out by my parliamentary secretary earlier this evening, there is a class of people with incomes of $10,000, $12,000, $15,000 or more who wish to build homes. Some are already occupying housing units, and they are buying expensive automobiles and expensive furniture and are paying for colour television sets at interest rates of between 9 and 11 per cent, or even higher. Why should these people not pay 7J per cent for housing and make more money available at lower interest rates for those in Canada who really need it and cannot afford it?
[DOT] (8:20 p.m.)
As I say, at this particular time we must attract a larger flow of private funds into the mortgage field, and after getting the advice of the Bank of Canada and of the Department of Finance and the experts who advise C.M.H.C. we are firmly convinced that this can only be done by allowing the N.H.A. interest rate to become reasonably competitive in the market and by providing flexibility so that the rate can change with changing market conditions.
This was pointed out by the hon. member for York North earlier today when he quoted from the report of the Porter commission, a commission set up by the previous government, a commission presided over by a distinguished jurist, the chief justice of Ontario, a man who had appreciable experience not only as provincial treasurer of Ontario but in municipal affairs and in the economic development of that province before becoming provincial treasurer. That report recommended almost exactly what was announced by the government on Tuesday night, a fluctuating interest rate. The Porter commission recommended an interest rate 1J, per cent above the interest rate being paid by the federal government on its long-range borrowings, and this is exactly the figure now in effect. Seven and a quarter per cent is 1J per cent above the cost of money, the interest that the
Supply-Finance
federal government pays on its long-range borrowings.
Little reference has been made in this committee to the fluctuating provision in the formula. The traditional lenders, the insurance companies, mortgage companies, banks and others, have more money today for investment than was available to them last year. Last year they were heavily committed at this time of the year because of the hundreds of millions of dollars worth of pulp and paper plants being constructed. This is a field in which I have at least a little knowledge. Those plants are completed or are now nearing completion. At least three of them have been brought into operation in British Columbia this year. Thus the need for money for office buildings, for other service units and for industrial expansion is now not so great, and our information is that these lending institutions will have more money available for lending in 1967 than they had this year.
If we really believe in a free enterprise economy, is it reasonable to suggest to these people that they should lend their money at per cent when the Porter commission and all the economists who have studied this problem have recommended that the spread should be 1J per cent over what the government pays? That is all that we are trying to do by this measure, and it will have a very desirable effect. It will bring in more money and will help correct the very serious housing situation that has developed within the last few months.
It is a matter of experience that a spread of 150 basis points between the National Housing Act interest yield and long-term government bonds is necessary to ensure a significant flow of institutional funds into mortgages. The records of C.M.H.C. over the last 20 years show that this to be a fact. A narrower spread has always resulted in a reduction in the flow of funds. This spread has been declining since early 1966, and there is now a difference of only 93 basis points, a drop of more than one-half per cent. At this level approved lenders are virtually non-operative under the N.H.A. and are likely to remain so as long as that condition persists. Under these circumstances, and with this fluctuating formula, the government has temporarily increased the interest rate to 7J per cent.
At the same time we have introduced a procedure for quarterly review from March next onward to ensure the required flexibility. In the opinion of the experts who advise us-and both the Minister of Finance and I

November 24, 1966
Supply-Finance
have questioned them at length-this should accomplish two things. In the first place, it should bring about a transfer of mortgage funds from conventional mortgage companies to new housing. There is no difficulty today in borrowing money from many mortgage companies through the traditional form of lending, but you will have to pay 8 per cent or higher. People who want to borrow money on a house today, if they are good credit risks, have no great difficulty getting money at 8 per cent, 8J per cent or 9 per cent. On the basis of history, which shows that there should be a spread of 1J per cent, many people who are borrowing money from the conventional lenders and paying rates of 8 per cent or more will be able to get money at 7,1 per cent under the National Housing Act provisions.
It has been suggested by the hon. member for Esquimalt-Saanich that six months will elapse before we can expect improvement from the new interest rate. I would point out that it is in the month of December that the conventional lenders finalize their investment programs for 1967, which will start in January of that year, and we made the announcement at this time so that they will know they can get 7-J per cent at least until the end of March, and that there will be no change unless economic conditions warrant the fluctuation that I have mentioned of one-quarter per cent.


Alfred Dryden Hales: May I ask the minister a question at this point?


John Robert (Jack) Nicholson: I should prefer to answer questions at the end because my time is limited.
We believe that these companies will be in a position to find more money for investment in the first quarter of next year because of notice of this change at this time, something they could not do if the announcement were made in January, which was the time we gave a somewhat similar notice last year.
Second, the increase in the N.H.A. interest rate should bring about an over-all and substantial increase in the volume of mortgage funds for housing in 1967. Many of the remarks made by the hon. member for Danforth were constructive and worthy of most serious consideration. I wish time permitted discussion of them in more detail, but I was particularly interested in his remarks about the appearance of the president of the Economic Council of Canada before the prices committee today. I was interested to know if the hon. member had the opportunity of cross-examining the president and asking him if he had

any objection to the increase in the rate from 6J per cent to 7J per cent. My information is that no such question was asked.


Reid Scott: I would have asked it but the reason I did not was that I did not think it fair to inject him into the middle of the political controversy raging today.


John Robert (Jack) Nicholson: I thought perhaps it was because his answer might have been that the Porter commission had recommended it and he would not quarrel with it.
I am not suggesting that the higher rate of 7;\ per cent will not work some hardship on some. As was pointed out earlier, it will mean an increase of approximately $4.50 per month on the repayment of the average N.H.A. loan. There is no question but that this will be a burden for some people. I am sure the hon. member for Macleod, who is an economist, will bear me out, however, that this will tend to diminish the demand from many potential home owners, but this will work both ways. It may work a hardship on a relatively small number but it will provide a benefit to those who are now paying 8 per cent or 9 per cent for their money. The point is that it is better to have lending institutions meeting a reduced demand for N.H.A. loans at 7J per cent than to supply virtually no funds whatever at 6 J per cent.
[DOT] (8:30 p.m.)
Let me tell you what has happened. Fourteen months ago lenders were lending money at 6J per cent and were glad to do so. Two years ago they were prepared to lend it at an even lower interest rate. The situation, however, is very different today. They tell me that they are prepared to lend at a reasonably increased rate and will come back into the field. Because of their interest they have provided the money, as they did in 1965, to finance the erection of 100,000 homes or more. In the last six weeks the number of loans has gone down to a trickle of between 400 and 500 a month. There is a great difference. Yet we have the assurance that there will be a substantial increase in lending if the rate is reasonably in tune with the times.
Let me add one more point about the interest rate. The legislation which just has been passed in respect of N.H.A. loans will bring about a significant reduction in interest charges which are paid on mortgage loans for less expensive housing. The other day I heard that a purchaser of an older house was asked to pay 14 per cent interest on a mortgage.
November 24, 1966

This information has been verified. It is outrageous. This new legislation certainly will help to correct that situation.
I have referred already to public housing, housing for senior citizens and others. I should like, however, to supplement what was said by one or two speakers earlier this evening about the effect this increase will have on people in the low income tax brackets. A lot of any size today in a city costs a minimum of $5,000 and in many instances as much as $8,000 or $9,000. You might be able to put up a tent on that lot and get by but you would not be able to do much more than that. If we can provide funds in an increasing amount for people who are at an income level where they can afford to build houses on these lots which cost $5,000, $6,000 or $9,000, we will be releasing existing housing for others who under the new policy can move in, improve and be able to own houses of their own. Those who live on farms will be able to get help through the other fields to which I have referred.
My time is nearly up, Mr. Chairman, but I should like to say that the government regards the increase in the N.H.A. rate as perhaps an unpleasant step but one which is an essential one in the serious measures which must be taken to bring about an increase in housebuilding activity in Canada. I would expect that much of the increase which takes place will be in rental housing. That is where the fall-off has been of late. This is where most people with incomes from $400 a month to $10,000 a year must find their homes. They will make their homes in apartments until they have very substantial incomes. We need more money for that type of housing and it has to come from the conventional lenders. If they will not lend it unless the interest rate is increased half of one per cent, then we have to give it to them. More and more in every part of Canada, particularly in view of the trend toward urbanization, much of the demand is for rental housing. This demand must be met more effectively and I believe one of the greatest contributing factors will be the increase in the interest rate to approved lenders which was announced on Tuesday night.


Mr. Kindt:: Mr. Chairman, may I ask one question? This is not in the form of a criticism. I am merely asking for information. If the fluctuation in the N.H.A. interest rate is geared to the cost of money to the government, then there is a possibility that the rate may go higher than 1\ per cent. The minister did not speak of this but he did mention the
Supply-Finance
fact it could go down. It could also go up. Is that right?


John Robert (Jack) Nicholson: Yes. We are hopeful it will go down but it could go up.


Mr. Baldwin:: Mr. Chairman, I should like to deal with a matter which is not related to what has been discussed so far but which is within the ambit of the Department of Finance. I do so because this is the only opportunity I will have. Tomorrow at five thirty or six o'clock, when this committee is engaged in the dizzy intoxication of shuffling hundreds of millions of dollars into the jaws of the juggernaut government, we will have no opportunity to say yes or no to the respective votes with which we will be dealing.
With regard to vote 15 of the Department of Finance I must register my objection and say that if I had the opportunity I would vote against this item in the way in which it is now constituted. A few days ago in the public accounts committee it was indicated that vote 15, as it was constituted in the previous fiscal year, was properly passed by this house. That being the case, while it may not have been wise to do so it was done legally and the government had the right to exercise the power it gave. My objection is to the use of the words, "to supplement other votes". This permits the government, as was the case in respect of the passage of appropriation bill No. 8 which involved $55 million less such payments as had been made, to appropriate any part of this money to any other vote in the estimates. For example, if the Secretary of State saw fit she could, with the approval of the Treasury Board of course, take $6 million or $8 million of this money and use it to purchase works of art. This would be a perfectly legitimate purchase. Members of the government may say of course that they would not do that. They would lift their eyes and blissfully and innocently say, "We would not do that". I do not accept that. They would do it if it seemed appropriate. This is the nature of the beast.
I wish to take this opportunity to register my objection and say that if I had the opportunity I would vote against this item so that next year I would not be faced with the statement that I should have voted against it when the opportunity arose.


Mitchell William Sharp: Mr. Chairman, I just wish to say that I believe there are only five or six minutes left and I would hope that when we reach the end of the period the estimates of the Department of Finance could be approved.

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This is the fourth day now that they have been before the house. I realize that the hon. gentleman who has just spoken did not say that this is the first consideration we have had of these estimates. This is the fourth day. If there is an argument that there has not been sufficient time, I do not think it applies to the Department of Finance and I hope that our estimates will be approved at this time.


Mr. Fulion:: Mr. Chairman, I rise at this point to register the strongest possible objection to what I can only describe as a sloppy and careless exercise of administrative and legislative responsibility on the part of the government as exemplified in the Department of Finance at the present time with regard to the specific subject of the leigslation having to do with deposit insurance. These estimates may have been before the committee on four occasions; I do not know.
[DOT] (8:40 p.m.)
The fact is, however, that we have been pressing the minister for four weeks, even longer than that, to get this legislation before us. The committee on finance, trade and economic affairs is sitting and has been sitting for some time. It has had before it now for two weeks or more representatives of the Canadian Bankers Association. The examination of those witnesses is drawing to a close. I hold no brief for the banks of this country as such, but I do hold a brief for the borrowing and business communities, large and small, in Canada.
We have been discussing the banking legislation in so far as this matter is concerned in a complete vacuum. It is not as though the Bank Act revisions suddenly descended upon this government or the Minister of Finance. They have been before them for three years and for at least a year and a half this minister has had in mind the enactment of a deposit insurance scheme; yet we have not had that legislation introduced. It condemns the House of Commons and the committee on finance, trade and economic affairs to an exercise in futility to review the Bank Act legislation without this new important scheme before us.
We are very close to the time limit placed upon us for consideration of these estimates and I believe that on behalf of this house, the citizens of this country and the borrowers of this country, large and small, I should make this protest. I make it because this is a typical example of the ineptitude, sloppiness and carelessness of this government and I do not think it should be allowed to get away with it without some protest.


Mitchell William Sharp: Mr. Chairman, may I just say a word about the deposit insurance proposals that the government has under consideration? First of all, I should like to remind the hon. member for Kamloops that I have only been the Minister of Finance for 11 months, which is not quite as long as he suggested.


Mr. Fulton:: It seemed longer than a year and a half.


Mitchell William Sharp: It seems to be longer than that to me as well.


Thomas Clement (Tommy) Douglas: What about us?


Mitchell William Sharp: The banking legislation was not the only legislation I had to consider when I took office. In fact I do not think the time is being wasted by considering this legislation. We are now discussing it with the provinces in principle and I know from the reports I have received from my officials that these consultations will probably result in better legislation than if we had introduced it first and had our consultations afterwards.


Edmund Davie Fulton: Why did you not have your consultations six months ago?


Mitchell William Sharp: Perhaps that might have been better, but the deposit insurance legislation was only decided upon six months ago. The hon. member will recall that my predecessor did not propose this legislation. This is one of the innovations I made after I became minister. The hon. member will also realize that this legislation is not the result of a recommendation of the Porter commission. The Porter commission did recommend that banking should somehow be defined, and I know my hon. friend thinks we should be able to do this. Perhaps we will do so in due course, but in the meantime it may be very useful to have deposit insurance. Moreover, as my hon. friend knows, I should like to get this brought forward quickly so it can be considered with the banking legislation as a whole. It is not our intention, of course, to proceed to enact it at this session.


Mr. Webb:: Mr. Chairman, I will be very brief. I should like to ask the Minister of Labour, who is the housekeeper for housing legislation, how he reconciles his announcement made the night before last regarding the increase in interest rates, because money was not available and the interest rate did not attract lenders, with the answer he gave on October 21, 1966 to a question I asked him about the drying up of mortgage money in the Peterborough area. The answer he gave is
November 24, 1966	COMMONS
recorded at page 8954 of Hansard and it reads in part as follows:
I am very happy to be able to answer the question asked yesterday by the hon. member for Hastings-Frontenac. At that time I intimated that I did not think that all loans had been cut off in Peterborough and I find that to be correct. In recent weeks there has actually been a marked improvement in loans in that area and elsewhere.


John Robert (Jack) Nicholson: The answer is very simple, Mr. Chairman. The loans made available in Peterborough were made from the $600 million put up by the federal government as direct loans. Those loans did not come from the conventional field because that field had dried up. They came rather from moneys that the federal government has made available.


Herman Maxwell Batten: Order, please. I understand there was an agreement among the parties that the discussion on the estimates of the Department of Finance would last for three hours. That time has now expired. I presume the committee will now move to consideration of the estimates of the Department of National Health and Welfare.


Mitchell William Sharp: Are you going to call the estimates of the Department of Finance for approval, Mr. Chairman?


Herman Maxwell Batten: Shall vote No. 1 carry?


Gordon Minto Churchill: Mr. Chairman, I am willing to agree in this respect, but the government house leader urged me not to speak on external affairs in order that we could fulfil the agreement which was settled upon the other night. If we are now to switch to the next department I think we should move to national health and welfare immediately.


Herman Maxwell Batten: Does the committee give its unanimous consent to stand vote No. 1 of the Department of Finance?


Some hon. Members:: Agreed.


[Stage Direction]
1. Departmental administration including recoverable expenditures on behalf of the Canada Pension Plan, $2,495,800.
Mrs. Rideouf:: Mr. Chairman, I must first explain that the minister will be here very shortly, and if you will allow me I will begin his opening remarks. This is indeed a pleasure for me and I hope the house will not deprive me of this wonderful opportunity.


Alfred Dryden Hales: Forget about the minister. Carry on.
Supply-National Health and Welfare


William Heward Grafftey: We would rather have you anyway.


Margaret Isabel Rideout: I must remind hon. members that the speech I am about to make is the minister's.


Edmund Davie Fulton: Why not make it your own?


Margaret Isabel Rideout: Mr. Chairman, I take great pleasure in presenting to the committee the estimates of the Department of National Health and Welfare for the year 1967. Because of the time problem I intend to be brief so that members will have as much time as possible for the consideration of these estimates.
At the outset I should mention that the main estimates were subjected to a detailed scrutiny by the standing committee on health and welfare during eight sittings last summer. This examination proved to be very helpful from my point of view and I hope to hon. members as well.
I might also point out that there is a resolution on the order paper relating to guaranteed income security for old age pensioners. I hope this will be before the house very soon, and this will afford an opportunity to discuss the whole subject of income maintenance for Canada's senior citizens.
Since the estimates of the minister's department were last considered by this committee the Canada Asssistance Plan legislation was adopted by parliament in mid-July. Subsequently steps have been taken to ensure its effective implementation. The provisions of the plan relating to mothers' allowances have been put into effect and all provinces have submitted claims respecting their mothers' allowance programs and have benefited in the amount of $18,900,000.
Intensive discussions have taken place with the provinces on the development of regulations required prior to the signing of agreements under Part I of the act. Officials of the department have visited all provinces at least once for discussions on regulations to ensure that the regulations will meet with the various conditions which are to be found across Canada.
The aim is to have the plan clearly reflect its objective as a broad and flexible public assistance measure. The regulations will be submitted to the provinces for review in the near future and agreements can then be entered into with the provinces. The target date for the signing of the agreements is January 1, 1967.
10330	COMMONS DEBATES	November 24. 1966
Supvly-National Health and Welfare
[DOT] (8:50 p.m.)
As all hon. members know, the Health Resources Fund Act was passed on June 27 of this year. The advisory committee as authorized by that act has been established and held its first meeting on October 6 and 7. At this meeting the preliminary five year programs which the acts requires provinces to prepare were reviewed and a number of urgent programs within them identified. Regulations respecting the time and manner of payment are now in the course of preparation and will be enacted shortly.
Mr. Chairman, I wish now to turn to the printed estimates and explain briefly the highlights. The estimates as originally tabled were in the amount of $1,263 billion, plus $1,035 billion for payments from the old age security fund. Subsequently supplementary estimates amounting to $2.1 million have been tabled. The supplementary estimates are mainly to cover the administration expenses of the proposed guaranteed minimum income program and an increase in family assistance payments to newly arrived immigrants.
I would like the committee to consider both the supplementary and main estimates at this time. These amount in the total to $2.3 billion, including the old age security fund, and are explained as follows: Old age security fund; it is estimated that payments from this fund will amount to $1,035 billion. Statutory items are estimated at $1,144 billion. Items to be voted by parliament amount to $121.1 million, made up of $119 million in the main estimates and $2,100,000 in the supplementary estimates.
The total increase over last year is $1,719,000. This is the result of an increase of $130 million in old age security payments, a decrease of $134,400,000 in budgeted statutory items and an increase of $6,100,000 in voted items.
The decrease of $134.4 million in budgeted statutory items relates mainly to the opting out by the province of Quebec from various cost-sharing programs in accordance with agreements reached under the Established Programs (Interim Arrangements) Act and to the reduction in the spendings on old age assistance, disabled persons allowances and blind persons allowances programs caused by the recent lowering of the old age security eligibility age to 69 and the scheduled reduction to 68 on January 1, 1967.
The main items making up the increase of $6.1 million in voted items are, a $2.8 million increase for salaries and wages, a major part of which is the transfer of 205 positions in

prosthetic services from the Department of Veterans Affairs, a $1.3 million increase for the administration of the proposed guaranteed minimum income program requested in supplementary estimates C, a $1 million increase for the operation of medical services mainly due to increases of native population and the opening of new facilities such as the Charles Camsell hospital, a $1.5 million increase in family assistance due to a forecast increase in the rate of immigration into Canada, of which $750,000 is requested in supplementary estimates A, a $900,000 increase in the grant to the University of British Columbia for the construction of a health science centre, a $800,000 increase in cash required to meet commitments to provinces under general health grants, and an increase of $500,000 in national welfare grants as approved for the fourth full year phase of the program. Offsetting these main increases is, of course, a decrease of almost $3.7 million in the provision for the construction of the Charles Camsell hospital. That briefly is the general picture of the department's spending program for the current year.


Mr. Brand:: Mr. Chairman, may I say at the outset how pleasant it was to hear a speech from someone who is much prettier to look at than the minister.


Some hon. Members:: Hear, hear.


Lewis Mackenzie Brand: I congratulate the parliamentary secretary on her presentation. I am sorry, however, that she made it and did not give the minister a chance to read his speech so he would know what it is all about. However, I congratulate the minister and his department on many of the programs they are bringing forward.
After listening to the parliamentary secretary to the minister I wonder whether we should agree to a supplementary estimate for the guaranteed income security program with respect to administration costs until we have had an opportunity to discuss the resolution in the house and perhaps look at the legislation.
I was disappointed, after looking through the estimates of the department, that many things seem to have been forgotten. I worried for a time, and I am glad this was cleared up, about the tremendous decrease in the hospitalization grants but I believe this is due to the opting out of Quebec from this program. The health grants to many of the provinces are lower. When you look at the blue book you see they are down quite a bit, particularly
November 24, 1966	COMMONS
in certain areas such as the Northwest Territories and the Yukon. I wonder why the minister felt it necessary for these grants to be reduced in view of how they could be used by the territories and provinces to improve the situation in such fields as infant mortality, to take one example.
As the minister undoubtedly knows, the infant mortality rate for Canada is 24.7, but for the Yukon and Northwest Territories the estimates for health grants were reduced even though the infant mortality figures are 38.9 and 69.5 respectively. I find it very difficult to understand why there should be a reduction in health grants when there is such a need for important work to be done in the infant mortality field, particularly when we know that Canada is away down in the world list so far as infant mortality is concerned.
I was also surprised to notice that the hospital construction grants were down in the estimates. Why is this? I understand the minister will be bringing the medicare bill before committee of the whole next week. If this program is to be effective across the country we will need more hospital beds. The need is there now. Instead of reducing hospital construction grants, they should be increased. Not only should they be increased in number but the government should be doing something about the amount allowed per bed, which has not changed since the government of the right hon. Leader of the Opposition. The allowance is $2,000 per hospital bed and $750 per bed for living quarters for nurses and interns. These amounts have not been increased.
Many times in this house I have heard members from all parties ask that something be done about easing the burden of hospital construction across the country. Nothing has been done about it. I think the minister should look very closely at this situation, particularly in view of the increasing costs of construction. There seems to be no end to rising costs all across the country. They seem to be spiralling upward, as can be seen every time we look at the newspapers. The recent debate pointed up, for example, spiralling interest rates.
There is nothing to indicate any increase to take care of the rising costs of the operation of hospitals. There was nothing in any previous legislation brought forward by the minister and there is certainly nothing in these estimates to indicate that this will be done. There was nothing in the speech we have just heard to indicate an increase in grants in this field. The minister knows, because I am sure
Supply-National Health and Welfare it has been pointed out in the house before, that the administration costs of hospitals, teaching hospitals in particular, run as high as 27 per cent. This poses a very real problem for teaching hospitals in particular. Considering the job that they are doing in attempting to produce more medical personnel to help service some of the schemes being proposed by the government, I think it is up to the government to help in every possible way, particularly in this one field for which help has been asked on so many occasions by the Canadian Association of Medical Colleges, the Canadian Hospital Association and many others.
[DOT] (9:00 p.m.)
I was sorry to notice that there was no great increase in grants for such things as shelter workshops. The former member for my riding of Saskatoon, Dr. Eloise Jones, spoke very eloquently in this house on the need for shelter workshops for the mentally handicapped and mentally ill who are coming out of mental hospitals, and for the mentally retarded. She made a very eloquent speech in this house in which she asked the minister for a grant of $350,000 for a shelter workshop project for the mentally handicapped in the city of Saskatoon. She pointed out that this project would focus on the research aspects of this type of sheltered employment. It would anticipate future applications of a partial assistance program of this kind on a national scale. It would be a pilot project. I see nothing in these estimates to cover this very worthwhile suggestion, one which would go a long way toward understanding what can be done about the mentally handicapped, and to take people out of mental hospitals much earlier and put them in an area where they could be rehabilitated.
Another problem I do not see taken care of in the estimates is financial assistance to those who are mentally ill. What about money allotments for mental illness? Where are the great amounts of money which are so necessary to meet this very serious problem today? I think it is a very serious matter when the government turns a blind eye to this problem.
I notice an allotment of $40,000 in a related field, the mentally retarded program at present being conducted all across the country. The minister knows that at the present time the Canadian Association for the Mentally Retarded is carrying on a program throughout the country to raise $15 million. I notice in the booklet they have put out, which I have before me, that their total program involves
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Supply-National Health and Welfare $14,763,281, less anticipated federal and provincial capital and other grants estimated at $9,761,161. What do you suppose they will say when they see in the estimates for this year an allocation by the government of $40,000 to take care of this very serious problem?
I see nothing in the estimates to encourage more rehabilitation of the handicapped such as the blind. Surely it is much better not only to pay money to the blind every month but also to encourage the training of the blind for the type of job they can do so well and to make use of the skills which these fine citizens certainly have. How much better it would be to provide this type of care.
Let me touch on a few more items, Mr. Chairman. I see nothing in the estimates to take care of the narcotics problem. I heard no suggestion in the speech of the parliamentary secretary that the government would be making changes in the future to provide L.S.D. legislation, or legislation to deal with marijuana or things of that nature which are becoming a very serious problem in the country. I was hoping that the minister would suggest the pilot type of project being adopted in Britain where particularly for narcotic addicts narcotics are provided under a controlled atmosphere, in this way doing away with the illicit narcotics market in the country. All the minister seems to be interested in is handing money out for welfare here, there and everywhere. There is nothing to bring out the true worth of people.
This brings me to another problem. I was really shocked today when I went looking for a copy of the report of the fitness and amateur sport directorate. The only report I was able to obtain from the minister's office a few minutes ago was for last year. This surprised me because under the act brought in by the government headed by the present Leader of the Opposition the aim was to encourage fitness and amateur sport and there was a statutory provision of $5 million a year.
Section 13 of this act says:
The minister shall, within three months alter the termination of each fiscal year, prepare an annual report on the work done, moneys expended and obligations contracted under this Act and cause a report to be laid before parliament if parliament is then sitting or, if parliament is not then sitting, on any of the first fifteen days next thereafter that parliament is sitting.
So I ask the minister, where is this report? The end of the last fiscal year was March 31. Has the report been tabled in the house according to the statutory provisions of the act, which is the law of this country? Or does the minister feel that parliament does not need to

DEBATES	November 24, 1966
know where this money goes and what is being done with it? I think that arrogance of this kind should cease and the minister should lay this report before the house without delay so we can see where this money has gone. I believe it is of great importance to know where this money has gone because from looking at the estimates it seems to me that very little of the statutory amount allowed is being used and I should like to know why.
For example, for the year 1963-64 the amount was $1,549,824. It went up $400,000 in the following year, 1964-65, to $1,996,603. For the year 1965-66 it is estimated at $2,700,000. Many of the projects mentioned in the last report available to me are very worth while, and I commend the department for what has been done in various fields such as scholarships, helping out various national and provincial competitions and assisting many of the other areas so important to physical fitness in our country.
In the last report available to me, the one for the year 1964-65, I notice that a new committee of the national advisory council examined other means of encouraging broader participation in fitness activities at all age levels, and according to page 5 of the report its studies are continuing. I would very much like to see in what other ways this money could be spent. Obviously it is there to be spent and it is not being spent. The minister cannot deny that there are many areas where the money could be spent to improve the level of physical fitness in our country. As I look around the House of Commons I can see many prime examples. I know that the minister has a pugilistic background because I always see him sparring with other members in the house.


Mr. Groos:: Careful.
[DOT] (9:10 p.m.)


Lewis Mackenzie Brand: That is true. I cannot see him outside because I understand he has been well trained in that sport. However, I am sure he understands the great necessity for physical fitness. I urge that more of this money be used in various programs across the country to improve the level of physical fitness. Perhaps some of it could be used to set up gymnasiums. Do hon. memers remember the dictum of Robert Tait McKenzie, first dean of the faculty of physical medicine, McGill University? It was: a healthy mind, a healthy body.
Looking at this act I see that other provisions are not being used. For instance, section 4 states:
The Minister, in furtherance of the objects of this Act, may with the approval of the Governor
November 24, 1966
in Council make grants to any agency, organization or institution that is carrying on activities in the field of fitness or amateur sport.
This has been interpreted up to now to mean national and provincial agencies and bodies such as the Canadian Amateur Swimming Association, the Canadian Snow-shoers' Union, as it is called, or any like body. It was the hon. member for Kootenay West who asked on June 11, 1965, whether the minister, in view of the mounting interest in the sports and fitness program in Canada, would consider providing other avenues for sports and other groups to make representations to the advisory council on fitness and amateur sports. That question is on page 2254 of Hansard of that year. The minister at that time said that the matter would be taken under advisement to see if there was some appropriate way to deal with representations from sports groups which have not had their applications referred to the council by their national bodies. So far, from what I have found out, nothing has been done about this.
I urge the minister to do everything possible to implement this type of recommendation and to make use of these moneys which are essential for promoting physical fitness in Canada. Nothing, so far as I know, has resulted from the suggestion of the hon. member for Okanagan-Revelstoke who, as found on page 1445 of Hansard, asked:
-is the government prepared to set up a federal royal commission to examine the status of amateur athletics?
That is a matter very dear to the heart of the Prime Minister. I think the hon. member's suggestion is one that should be supported by all hon. members. On March 8 of this year the hon. member again repeated this request, but so far nothing has come of it. I should also like to see the minister entertain the idea of using of these moneys not only for research as such but for the provision of facilities for the training of amateur athletes. There is no question that the provision of field houses at universities and swimming pools to be used for those training for national, interprovincial or internation competitions is very much needed in our country today, and not just in large centres.
I appreciate what the government is providing for the Pan-American games in Winnipeg and I commend them for this. But we will not be in a really competitive position in this country until every citizen has access, within reasonable distance, to the types of facilities necessary to train champions. I should like to
Supply-National Health and Welfare see some of the unused money used for these purposes. I do not say that the blame lies entirely on the federal government, because many provincial governments have failed to pick up their allocations. With a little needling from the federal department they might pick them up. Needling will do no harm if you needle in the right places. Perhaps what I suggest has already been done; I do not know. I have not seen the annual report which should have been tabled many months ago and which still has not been tabled.
I do not wish to take any more of the time of the committee as other members wish to speak on this important department. I hope the minister will take time to look at some of my suggestions to see what their intrinsic worth may be and whether something cannot be done to help improve the lot of so many Canadians, because many Canadians have not been afforded the advantage of the opportunity provided to them by the federal government for the type of life which I believe every Canadian has a right to live.


Herman Maxwell Batten: Shall item 1 carry.


Lawrence Elliott Kindt: I wish to ask two questions of the minister. First, if I understood the fair lady the total vote in this department is $2.3 billion. Second, I should like to know what appropriation for medical assistance to Indians, as provided by the Department of National Health and Welfare, is contemplated for the next 12 months in these estimates. Can the minister answer these questions?


Mr. MacEachen:: On the first question, Mr. Chairman, as my parliamentary secretary said, the estimates as originally tabled were $1,263 billion plus $1,035 billion for payments from the old age security fund. The supplementary estimates were in the amount of $2.1 million and are principally to pay for the administration expenses of our new pension.


Lawrence Elliott Kindt: What is the aggregate for the department?


Allan Joseph MacEachen: It is $2.3 billion.


Lawrence Elliott Kindt: Have you the second answer?


Allan Joseph MacEachen: The immediate information is that the medical program for Indians is in the amount of $37 million. We shall be continuing this program for the Indian population.


Lawrence Elliott Kindt: Is $37 million the aggregate amount?

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Supply-National Health and Welfare


Allan Joseph MacEachen: That is the aggregate for the medical services branch.


Lawrence Elliott Kindt: May I ask a supplementary question? Does this amount include hospital construction or matters like that?


Allan Joseph MacEachen: No, Mr. Chairman. It does not include hospital construction.


Lawrence Elliott Kindt: Is there another item which includes hospital construction?


Allan Joseph MacEachen: Yes, it is vote 25 which reads:
Construction of acquisition of buildings, works, land and equipment including payments to hospitals and other institutions which care for Indians and Eskimos as contributions toward the construction of hospitals and related facilities.
[DOT] (9:20 p.m.)


William Heward Grafftey: I assume, Mr. Chairman, that we are still on vote 1 and I wish to return to a question I asked of the minister in the house yesterday. I think it is terribly important that we arrive at a decision in this regard very quickly. I put my question on the order paper some months ago and the parliamentary secretary gave me an answer at the time regarding studies which are being made.
The problem in brief outline is that at the end of last week the Department of Health, Education and Welfare of the United States ordered that all 1968 automobiles sold in the United States in 1968 should be equipped with anti-fume devices because of the serious pollution threat in that country. I recognize that the problem in Canada is not entirely similar but there is an important body of opinion which says we are already polluting the air in our metropolitan areas such as the metropolitan regions of Toronto, Montreal and similar places.
I do not believe there is any need for further studies. I should like the minister to assure this committee that the same regulations as apply in the United States shall apply in Canada. There may be people ready to advise the minister along the following lines, that measurements have been taken in some of our large metropolitan areas and they show that no crisis has yet arisen. This is the same old story. All too often we wait for the crisis to arise and then we attempt to do something about it. If we act now we can save dollars and we can solve this problem before it becomes worse. While admittedly we do not yet face the same serious problem as that which faces Philadelphia, New York and Los Angeles county, we are nevertheless polluting the air in Canada in the same way as we are

DEBATES	November 24, 1966
polluting our waterways. The more time we waste, the more expensive it will be when we are finally obliged to confront the situation we have created.
I say to the minister: if all new cars sold in the United States in 1968 are to be fitted with anti-fume devices by federal law, can he not guarantee to this committee tonight that Canadian citizens will be protected by federal legislation just as United States citizens are to be protected by United States law and that the federal government in Canada intends to ordain that all new cars in 1968 will be equipped with anti-fume devices so that our own people can receive protection similar to that provided for citizens of the United States?
Let the minister not tell us there is need for further consideration. I have consulted with the motor industry and if they can fool the Canadian government they will do so. If we can be convinced, like good northern colonials, that we are not polluting the air, we shall not have this safety measure applied in Canada. I repeat: there is no need for further studies. Let us not wait until the air in our metropolitan areas has been polluted. Let us act now and get a head start on the problem. Let the minister guarantee that something will be done.


Stanley Howard Knowles: Mr. Chairman, if I make any remarks which duplicate anything that has been said since these estimates were called this evening, perhaps I might be forgiven since I had to be out of the committee for a while in connection with an important appointment. But I should like to say a few words on these important estimates of the Department of National Health and Welfare.
The first comment I should like to make is this. I believe all of us who are members of the standing committee on health and welfare were delighted with the excellent opportunity we had during the course of this session to go over these estimates in great detail. For my part I have always appreciated the dedicated work which is done by the officials and employees of the Department of National Health and Welfare. We saw once again during the sittings of the committee how conversant they are with their work and how interested they are in the progress of this department and in the service it renders to the people of Canada. I cannot speak of other committees which may have dealt with estimates but I know that in this committee we made a very interesting and useful survey of the amounts of money which have to be voted.
November 24, 19G6
The minister knows me well enough to realize that having handed out a compliment or two I have something else to say. He also knows what it is I wish to say. I had something to do with the arrangements concerning the estimates which would be discussed in these dying hours of our 30-day period. One of the reasons I was anxious that the committee should have these estimates before it, even for a little while, was in order that we might make yet another appeal to the Minister of National Health and Welfare with respect to two pieces of legislation in his name with which we shall be dealing next week. Since we shall be dealing with them next week it is not necessary to debate them on item 1 of these estimates but, as I say, I make a further plea to him to exercise what I believe to be his own best judgment with respect to these two measures.
The first, of course, is medicare. It is good to expect or, at least, to hope, that at long last we are to have federal legislation in this field. I submit, however, that the arguments for postponing this legislation for another year do not hang together at all. As a matter of fact I suggest to the minister that the facts brought out in the third annual review made by the Economic Council of Canada make it even more ridiculous for the government to contend that in the interest of fighting inflation medicare has to be put off. I urge the minister as strongly as I can that he consider this matter between now and Monday when his medicare bill will be before the committee of the whole house. I urge upon him that he leave the effective date which is in the bill as it is. He does not need to bring in an amendment to postpone that effective date at all.
[DOT] (9:30 p.m.)
At the same time I hope he will consider some of the other points we have been making about the medicare legislation. One plea we make is that the provision respecting private carriers be deleted from the bill. We also plead that the kinds of services that are to be covered under medical care insurance be extended. As I say, Mr. Chairman, we will be dealing with these matters on Monday when we are in committee of the whole but it would save a great deal of debate on that occasion, and the minister would be a much happier Minister of National Health and Welfare, bearing in mind the philosophy that I think is his, if he would go all the way with that bill and make it a really satisfactory medicare bill.
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Supply-National Health and Welfare
The other piece of legislation with respeci to which I make a plea to the minister is the proposal to provide extra money for our old age pensioners. It is good to note that at long last there is a resolution on the order paper to do something about this. It is good to note that the figure of $105 a month is being suggested as a figure for some of Canada's old age pensioners, but I urge upon the minister the proposition that the full amount be paid to all our pensioners, that we ought to stay with the advanced position we took when we made the old age pension universal, and that we should not reintroduce the means test.
I do not care what name the minister proposes to attach to it. I do not care how hard he tries to call it a needs test or an income test, or how hard he tries to tell us it is a humane kind of test. The fact of the matter is that it is a retrograde step. The minister knows it, but he has got time between now and whatever day next week we get to that measure to make the necessary changes.
We do not know what goes on in government circles but it has been pretty clear from the long time it has taken to get this legislation on the order paper, and from the various rumours and leaks and bits of speculation there have been, that the government has changed its mind about the details of this legislation several times during the past number of months. There are still a few more days in which the government could change its mind again, and I urge it to do so.
I submit that it is a retrograde step, that it is a political mistake of the worst kind for parliament to be asked in 1966 to reintroduce the means test on any portion of the old age pension. I remind the minister of what happened when in 1957 the government of that day would not accept our advice when we asked for a reasonable increase in old age pensions. It thought it could get away with a $6 increase. The minister knows what happened.
I suggest that if we now put back on the old age pension a means test in any form, such as we had prior to 1952, it will become a major political issue for the next two or three elections until we get rid of it. If the minister wants to go down in history as one who did something progressive in the field in which he is now working, I say he has got his chance to try to convince his fellow cabinet ministers that the mistake which is contemplated in this legislation should not be made.
I suppose all of us are influenced by the kind of correspondence that we get. In that

10336	COMMONS
Supply-National Health and Welfare connection I recall an incident earlier today where a reference was made from this side of the house to a certain type of correspondence, and from the government side of the house it was said that the very opposite view was being expressed in correspondence received by members over there. However, I can tell the minister that most of the time I have been in parliament most of my correspondence has been with respect to pensions of various kinds, and at the present time it is running higher than ever with respect to old age pensions.
Letter after letter comes day after day from individuals who, receiving the old age pension, have enjoyed the dignity and self-respect that goes with getting it without any test but who are concerned and feel a sense of humiliation and despondency over the fact that the day may soon come when, in order to get the full amount of the federal pension, they will have to submit to some kind of test or to report their income, and even the right of appeal in the proposed legislation does not get away from that.
I almost feel I should say to myself that it is stretching the rule to be talking about a piece of legislation that is going to be before us next week but I do it, Mr. Chairman, because I think this kind of plea ought to be made to the minister at this time. He has got several days in which to put both of these pieces of legislation in the form in which they ought to be, medicare and old age pensions, and I urge him to take full advantage of these few days. One of my colleagues suggests to me some good advice to pass on to the minister, that the Minister of Finance should be sent to Bermuda for the next three or four days so that the Minister of National Health and Welfare can make his own decision with respect to these important matters.
I hope the minister will tell us something about the situation with respect to grants to the provinces for the construction of hospitals. It seems to me the time has come either to raise the amount that the federal government contributes per hospital bed or to introduce some kind of percentage formula so that the needs for hospital construction across the country can be better met.
I would like to hear the minister reply to the point raised by the hon. member for Brome-Missisquoi, both on orders of the day and this evening, and I shall content myself on this occasion by referring to just one other matter. I have in mind the many tragedies that take place because small children get

DEBATES	November 24, 1966
hold of bottles of lemon oil furniture polish and items of that kind, and in many instances actual death takes place. I have had some correspondence with the minister about this matter and, as he knows, my colleague from Hamilton South has a private members' bill on the order paper dealing with the subject.
The correspondence I have had with the minister raises the whole problem of federal-provincial jurisdiction, but surely this is a matter about which concern ought to lead to some action at an early date, whether it be legislation to prohibit the production of the kinds of substances that are lethal when small children get them or whether it be provision for better marking of the bottles and containers. On this point I hear my colleague from New Westminster urging me to say something about another poisonous product, but I do feel that poisonous substances in furniture polishes and other household items should be of concern to the minister.
My time is limited, Mr. Chairman, and there are others who wish to speak. I do not feel as badly as some may over the fact that we do not have a great deal of time to deal with these estimates in the house, simply because we did have a good go at them in committee. In conclusion, if the minister really wants a compliment from this source I tell him he has the opportunity to get it next week if he will bring in the medicare legislation to be effective when the government promised it, on July 1, 1967, and if he will bring in the old age pension increase without a means, needs or income test of any kind.
[DOT] (9:40 p.m.)


Ralph Bronson Cowan: Mr. Chairman, in the few moments allowed to me this evening to discuss the estimates of the Department of National Health and Welfare there are two points to which I should like to make reference. I support the hon. member for Winnipeg North Centre when he states that in the committee on health and welfare we gave the estimates of the Department of National Health and Welfare a very thorough scrutiny. Certainly the minister produced all the officials whom any member of the committee might have wished to question. Their answers were frank; they were not answers which were censored and dictated by the minister as has been the case in respect of some other departments. We were given a great deal of information from the senior men, all of whom were experienced and knowledgeable in their own field of endeavour.
November 24, 1966	COMMONS DEBATES	10337
If hon. members would take the time to read the report of the committee on health and welfare they would find that we were asking serious questions of the senior men in the department as to whether or not overtime is paid to the employees and nursing staff of hospitals which are under federal control. In the estimates you will find numerous references to overtime in piddling amounts of $1,000, $2,000 and sometimes as high as $5,000. Inquiries as to what this overtime covered brought out the fact that the clerical staff sometimes is paid time and a half if called in to work on a Sunday or on a statutory holiday. The question concerning whether or not extra time is paid to the nursing staff elicited the information that the women who render such valuable service in this field of health care are paid straight time on a 40-hour week basis under the Department of National Health and Welfare. We were advised that under the Canada Labour Code if they were allowed to work overtime they could get time and a half in some cases but that in most cases they were forced to take time off.
I am a member of the health and welfare committee and when we were examining the estimates of the department I was privileged to go along with other members of the veterans affairs committee to Europe. I deliberately spent a day and a half checking with the authorities there in respect of the operation of their national health scheme. I subscribe to a British publication called "Nursing Mirror" which I find very interesting and forward looking. I not only spoke to senior officials in the British department of health, but also had an enjoyable hour and a half with the senior staff of the "Nursing Mirror". I was pleased to learn that in this field Britain is setting the pace. I do wish that we in Canada would follow their example of paying a premium rate of pay for Sundays to the nursing staff. All over the world there is a terrific shortage of nurses. This is something which has been mentioned by every speaker when speaking on the subject of national health services. I know we are on item 1 in these estimates but in vote 5 there is an item called "professional training grant to assist in an extended program for the training of health and hospital personnel".
In Canada, were it not for the married women who are fully trained nurses and are willing to register on the staffs of hospitals and were it not for the nurses we are able to bring in from the Philippines, Jamaica and Great Britain, who are willing to come to this
23033-654^
Supply-National Health and Welfare country and leave behind the country where they gained their training, we would not be able to keep our hospitals open. I maintain that if Canadian hospitals paid a premium rate of pay to nurses on Saturdays, Sundays and statutory holdays, over and above what is known as the regular five day week, we would be able to attract young women into the nursing profession. We have a serious shortage of nurses simply because the hours of work are not satisfactory and the remuneration is not large enough to attract young girls into spending their lives in a very necessary service. I think it is absolutely ridiculous that we have in Canada a shift differential for nurses only in the provinces of Saskatchewan and Quebec. In British Columbia shift differentials are paid to other than nurses in the hospitals. An interesting anomaly is that in British Columbia hospital personnel other than nurses are willing to accept shift differentials but the nurses are not, although they gladly accept them in Saskatchewan and Quebec.
If the federal government is willing to make a contribution toward the shift differentials paid to nurses in Quebec and in Saskatchewan, I wonder why the federal department of National Health and Welfare could not demand of the other provinces that shift differentials be paid throughout the length and breadth of Canada. Since we have shown we are willing to pay the cost of shift differentials in two provinces, and in the case of hospital personnel other than nurses in British Columbia, it must be apparent to the other provinces in the Dominion that they could introduce shift differentials in their hospital operations and secure federal support in that field if they would follow the example of Quebec and Saskatchewan in that regard. Could we not also follow the wonderful example of Great Britain where in the last two years they have been paying a day premium to those nurses who work on Sundays? At the present time in Britain they are only paying extra for Sunday work and they told me that for the past two years they have been paying one pound sterling extra for the nurses who report for duty on Sundays.
In Canada in the past when this has been discussed we have always been met by the' statement that surely you would not pay extra on Sunday and bring in nurses who would not. work on the other days of the week. They said that by doing this we would have difficulty in finding nurses who would work during the week days. The answer to this is provided by the experience in Great Britain. There are
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Supply-National Health and Welfare many, many nurses, particularly those who are married, who are quite prepared to nurse from Monday morning to Friday evening but who are not prepared to sacrifice their Saturdays and Sundays. If this premium pay were to be paid over the week end it would attract back to the hospitals other nurses who would be willing to work on the holidays because of the higher rate of pay for a shorter number of hours.
When I asked in Great Britain whether they found that the nurses on the floors of the hospitals demanded that they be given the opportunity to work on Sunday because of the extra pay, they laughed and said that far from that being the case the girls do not want to work on the week ends. They said that they work from Monday to Saturday noon and that 85 per cent of the staff is different on Sundays when they pay the extra bonus. There are registered nurses who will come out for the extra bonus on Sunday who will not work the other days of the week. I was advised that if it were not for the contribution of these people who have been attracted to the floors of the hospitals by the premium rate of pay the hospitals in Great Britain could not satisfactorily operate seven days a week on a 24-hour a day basis.
An interesting sidelight on this situation is the fact that when I asked these people in Great Britain if they were paying a premium rate of pay for a national holiday

that was the word I used-they said, "we call it a bank holiday." Call it what you like. In Canada we would call it a national holiday. If you wish to call it a bank holiday, that is all right. I said, "If you pay an extra pound on Easter Sunday, do you pay an extra pound on Easter Monday?" They said, "No, Mondays and Saturdays are part of the regular working week." I said, "How can you pay a woman an extra pound for working on Easter Sunday and not pay her extra for working on Easter Monday when the nation as a whole is on a holiday?" I was asked by the officials of the department of health in London not to speak so loudly because their expenses had gone up enough in respect of the Sundays without bringing the extra holidays into the act.
[DOT] (9:50 p.m.)
However, I am certain that in Britain they will reach the day when they will voluntarily pay the extra pay on bank holidays and on Saturdays in order to attract back to the hospitals those people who do not wish to work as much as a five day week. I should like to see the day premium rate pay plan introduced

DEBATES	November 24, 1966
in Canadian hospitals, and I should like to see the federal government introduce this method of pay in hospitals under the jurisdiction of various departments, particularly the Department of Veterans Affairs.
The overtime and shift differential payments of the Department of Veterans Affairs are a disgrace. They amount to 8 cents an hour on evening shift and 12 cents an hour on night shift, but only apply between the hours of 6 p.m. and 6 a.m. My only comment on that situation is that it has taken years to get any shift differential in hospitals under the jurisdiction of the Department of Veterans Affairs. I have congratulated the Minister of Veterans Affairs on several occasions for having introduced this shift differential in veterans hospitals, but the Treasury Board introduced the most ridiculous hours of payment of which I have ever heard.
I referred to this situation in the committee discussions on the matter. Shift differential is only paid between 6 p.m. in the evening and 6 a.m. in the morning, so if a nurse is working from midnight to 8 a.m., on what everybody else would call the night shift, she gets twelve cents an hour from midnight to 6 a.m. and regular pay from 6 a.m. to 8 a.m. If she is working from 4 p.m. to midnight on the evening shift she gets the regular rate of pay from 4 p.m. to 6 p.m. and the evening rate of differential from 6 p.m. to midnight. When you consider that such an individual would be receiving 8 cents an hour it must be obvious that she would pick up an extra 48 cents for working the evening shift compared with working the day shift. I wish the Department of National Health and Welfare would include a statement in its estimates to cover rate differentials as the Department of Veterans Affairs does in order that the hospitals under its jurisdiction could follow the example set by the Department of Veterans Affairs.
Over and above that, I wish both departments, the Department of Veterans Affairs and the Department of National Health and Welfare, would pay day premium rates of pay and set an example for the whole of the Dominion of Canada. If we make the remuneration satisfactory to these young girls I am sure we will get a tremendous influx of young women in our schools of nursing, with the result that we will not have a shortage in that very vital element of our national life.
Time is running short and I wanted to speak at some length on a question involving malpractice insurance for hospitals in Canada. This is a deep subject and one that must
November 24, 1966	COMMONS DEBATES
receive the immediate attention of provincial and federal governments. There is a tremendous case going on right now in the courts involving one hospital in this country and a large sum of money.
Doctors demand that hospitals carry malpractice insurance coverage. I can tell you from personal experience that it is very difficult for hospitals to get satisfactory malpractice insurance coverage because insurance companies do not like to place this type of insurance. When an insurance company does give malpractice coverage many types of individuals are covered. The troubles connected with malpractice assurance are not confined specifically to the medical field. They relate to human nature. If malpractice insurance is carried by a hospital, a practitioner knowing that he is protected against any lawsuit for damages may well decide to let the insurance companies worry about a situation which may arise. These companies do not like to provide this kind of insurance and I for one do not blame them.
When an insurance company in this country does cover a hospital with malpractice insurance it includes a limiting clause in the policy which states that the insurance company can make its own settlement with any claimant and the hospital or doctor must agree to that settlement. One can see readily that there is something seriously wrong with this entire business. These insurance companies could not care less about making an admission that a doctor or a hospital was at fault if they can settle for $1,500 or $2,000, because they may save themselves a great deal of money by settling out of court. The insurance company will readily blacken the name of the hospital or the doctor if they can prevent a claimant from taking a case to court, as a result of wh ch they may have to pay $10,000, $20,000 or $30,000.
The three companies in Canada that issue malpractice insurance for hospitals all have limiting clauses in their policies to the effect that they can make a settlement with the claimant and if the insured, being the hospital or the doctor, refuses to accept the settlement the insurance company does not have to pay any sum over and above that original proposed settlement which may be awarded by a court of law. This is a ridiculous situation because no coverage whatsoever is given under the guise of malpractice insurance. I maintain and believe that even at my age I will live to see the day when the hospitals of the various provinces have co-operative insurance in respect of malpractice. This type of
Proceedings on Adjournment Motion insurance as in effect in the state of California at the present time where there used to be a large number of lawsuits against hospitals and doctors.
In Canada doctors are protected by the Canadian Medical Protective Association which has its head office here in Ottawa. It is practically compulsory to have a co-operative effort in respect of malpractice insurance and doctors have found this highly valuable. I maintain that hospitals will follow the example set in California and adopt a scheme of co-operative malpractice insurance and get away from this so-called coverage by private carriers of insurance who have limitations in their contracts. These policies do not adequately cover this field to the satisfaction of the hospitals and doctors of this nation.
This is a very vital fact in the practice of medicine and the provision of hospital services in this country, and I sincerely urge the Minister of National Health and Welfare to take the lead in establishing co-operative malpractice insurance in the hospitals in the provinces which make up the Dominion of Canada, along the lines now in effect in the state of California. In this way every doctor and hospital would be fully covered, and the hospitals and doctors would not have to rely on insurance companies which are willing to admit malfeasance, so to speak, in order to settle on a small scale rather than protect the reputation and name of an individual hospital or doctor for fear of facing a larger settlement.
May I call it ten o'clock, Mr. Chairman.
Progress reported.
[DOT] (10:00 p.m.)


[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
Mr. A. D. Allcenhrack (Prince Edward-Lennox):: Mr. Speaker, what I have to say tonight I could say in my own riding to a receptive and agreeable audience, no doubt, but what good would that do? I might better say it here even though some hon. members may disagree. I rise this evening pursuant to my question in the house on Friday last. At that time I asked the following question of the Prime Minister (Mr. Pearson):
Mr. Speaker, will the new bonus to be paid bilingual civil servants also be paid to civil servants
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Proceedings on Adjournment Motion who are bilingual in any language combination other than English and French?
Since then I have had the opportunity to point out to the house the shallow, supine and discriminatory policy being practised by the government in this regard, because they do not intend to give recognition to any bilingual civil servants other than those they wish to placate, namely, those of French origin who can speak some English. I pointed out to the house that there are people of other racial origins all across Canada working for the government who are bilingual in other languages. But, of course, it is evident that these people are regarded by the Pearson government as second-class citizens. I say to the Prime Minister-this is my main reason for rising in my place tonight-and I say it on behalf of millions of Canadians, that he and his government have gone far enough with the bilingual and bicultural patronage system that he has so foolishly adopted. He has gone far enough with this devilish plan that day by day is dividing Canada.
We all have our linguistic rights in this country. No language is outlawed. In fact, they are all indispensable to those who use their particular language. None of them is second class. But now, mainly due to the patronizing attitude of this government toward what seems to be a fanatical racist and linguistic demand, I am informed that there are members of this house who will not accept a messenger summoned to a member's office if that messenger does not speak French. I will accept any messenger who can perform the duties I ask of him, regardless of his mother tongue. In fact, Mr. Speaker, I like to have a French messenger so that I can speak French to him and learn more of that noble language. If there are members of this house who think I am speaking just to hear myself talk, I say without any doubt in my mind that no English speaking member of the house has ever sent a messenger from his office because of his mother tongue.
Moreover, Mr. Speaker, I would remind hon. members who may think I am speaking just to hear myself talk that 67 per cent of Canadians speak English only, 19 per cent of Canadians speak French only, 13 per cent are bilingual and 1 per cent speak other tongues only. These figures are reliable because they were taken from the last census.
The hon. member for Hastings-Frontenac <Mr. Webb) and the hon. member for Halifax (Mr. McCleave) both raised the question of the wholesale discharge of the last 18 English

DEBATES	November 24, 1966
speaking government telephone operators on Parliament Hill. They received no satisfaction in reply to their questions. There are 60 operators in total. The discriminatory policy of this Pearson government could not even allow these last 18 employees to remain even though they were less than one-third of the total. They had to go only because they were English speaking, because they were no doubt Anglo-Saxon. This government makes it clear that it is very much out of caste, context and custom to be of Anglo-Saxon race or extraction these days. I resent this.
There is a row on in the Liberal caucus, they tell me, and I give great credit to those Liberal members who are resisting government policy in this respect. I note that this evening's edition of the Ottawa Citizen quotes the hon. member for Trinity-Conception (Mr. Tucker) on this question as follows:
The need for bilingual civil servants is grossly exaggerated.
How correct is the hon. member for Trinity-Conception. In the same article he called the replacement of the English speaking operators "discrimination of the worst kind".
A society works, Mr. Speaker, mainly because its institutions and regulations are accepted to be the way of life for the majority. But in order to achieve the fullest measure of success a culture must accept and allow for a tolerable range of temperamental differences of its citizens, not just for the average or the mean. It is a give and take arrangement that is mutually rewarding.
If I may refer once more to the bilingual clerks who will receive the 7 per cent government largesse under this measure, we have the clerk who cannot qualify, probably because he speaks English and perhaps another language other than French, working alongside the clerk who does qualify under this narrow, discriminatory measure, but the former has to pay taxes to contribute to the 7 per cent bonus enjoyed by his office mate. In other words, this government makes part of the civil service pay a special salary to a chosen few. This is one of the death throes of the Pearson-sponsored bilingualism and bicul-turalism; this particular aspect has gone completely awry.
Bilingualism, Mr. Speaker, is a good thing if it does not exclude languages other than French. There are many people in our civil service who can speak more than two languages. This government would discriminate against them. Those qualities and attributes of
November 24, 1966
a linguistic cosmopolite this government does not recognize. The attributes that make for better relationships with our many neighbours in the world this government does not recognize. All they think about is a few votes in certain parts of the country that will perpetuate their poisonous form of politics and placate a few people.
The Liberal party embraced bilingualism here in the capital and we agreed with it to a certain limited extent, but the Liberal party does the opposite in the province of Quebec. They reject bilingualism and embrace and adopt unilingualism. I have reference here to a recent article which appeared in the Ottawa Citizen reporting on the latest provincial Liberal party meeting in Quebec. The Ottawa Citizen is not unfavourable to the Liberal party and on November 21 it carried an article headed "Bilingualism Row: Issue Sparks Uproar Among Quebec Grits". The issue involved was bilingualism. They have no use for it down there. This is typical of the Liberal party and always has been. There are no truths in Liberalism, only deception.


Mr. Deputy Speaker:: Order. I must advise the hon. gentleman that the time allotted to him has expired.


Mr. Stanley Haidasz (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I must say at the outset that the type of attack launched in this house by the hon. member for Prince Edward-Lennox is totally unwarranted.
On behalf of the President of the Treasury Board I have the following statement to make in reply to the hon. member. On the recommendation of the Civil Service Commission the Treasury Board has established, by Treasury Board Minute 658237 of October 20, 1966, a differential of 7 per cent of the actual rate of pay, rounded to the nearest dollar, received by employees in secretarial, stenographic and typing positions in which adequate performance of duties and effective service to the public requires the use of both official languages, and has approved payment of the differential to incumbents of such positions who are required to use and are actually using a second official language at least 10 per
Proceedings on Adjournment Motion cent of their time in the performance of their duties and are qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages.
The Treasury Board minute requires the deputy head to certify that an employee is qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages, and provides that payment of the differential may be made with effect from a date not earlier than October 1, 1966, provided the deputy head applies to the Civil Service Commission for a test of competence and the employee is qualified by the commission before February 1, 1967.
Employees occupying positions in the secretarial, stenographic and typing group may be deemed to have been qualified by the Civil Service Commission as meeting an appropriate standard of competence in the two official languages if, at the time of their appointment, the essential qualifications included knowledge of both official languages under the provisions of section 47 of the Civil Service Act. Other employees in such positions must submit to a test of competence in the other official language in order to qualify for the differential.
[DOT] (10:10 p.m.)
In future, any candidate for appointment in this group claiming competence in both official languages or any employee already in the group who believes that he has acquired the necessary proficiency may be tested in both languages for the purposes of meeting this particular condition for payment of the language differential. In these cases the differential would be payable with effect from the date of the appointment if the other conditions are met.
In instances in which an employee who was not tested on appointment and who was found, after February 1, 1967, to occupy a position for which the differential was warranted, the differential will be payable with effect from the date on which the commission is requested to establish the competence of the employee concerned.
Motion agreed to and the house adjourned at 10.15 p.m.



Friday, November 25, 1966