1966-12-19

Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, I should like with the consent of the house, and in accordance with regular practice, to report briefly on the NATO ministerial meeting in Paris from which the Minister of National Defence and I have just returned.
The major problems which arose at the last meeting in Brussels concerned the process of adjusting to the consequences of France's decision to withdraw from NATO's integrated military structure. By contrast, at this meeting, France's relationship with the alliance was not a subject of discussion, since the necessary adjustments had already been largely completed. Our discussions reflected the fact that a new relationship between France and the 14 other nations in the alliance is being achieved.
The new foreign minister of Germany, Mr. Brandt, made an important statement. The coalition government having just taken office in Germany, particular interest was attached to this first statement of policy. Mr. Brandt gave welcome assurance of the German government's dedication to the alliance and of its desire to make progress in its relations with the countries of eastern Europe.
Mr. Brandt also spoke of his government's intention to promote contacts between the peoples of west Germany and east Germany, without compromising the Federal Republic's position on the non-recognition of the German Democratic Republic or on the important goal of German reunification. He stressed the German government's intention to maintain democratic institutions. He reiterated that the Federal Republic seeks neither national control of atomic weapons nor national ownership of such weapons.
In December, 1964, Canada proposed a study of the future of the alliance. This suggestion was adopted by the council but was not acted upon, for fear that it would lead to a break with France At this meeting,
however, with France already having taken its action in respect of NATO, it was decided at the suggestion of the Belgian foreign minister that the time was now ripe for a wide-ranging study of the objectives and future tasks of the alliance. This study, which is to be presented to the meeting in December, 1967, could enlarge the area for political activity by the alliance.
The main attention at this meeting was directed to east-west relations. A full study prepared after the Brussels meeting confirmed that it was desirable to improve our relations with the countries of eastern Europe, bearing in mind that the over-all objective is a peaceful settlement in Europe. The meeting recognized that for the present bilateral relations represented the most likely area for immediate progress.
As one suggestion for improving east-west relations, a number of countries, including Canada, alluded to the possibility-and I do not suggest that this is for the immediate future-of reciprocal reductions in opposing NATO and Warsaw pact forces.
[DOT] (2:40 p.m.)
In the political sphere, the Russians have recently shown interest in encouraging improved relations between east and west. This is an attitude which NATO's military strength has encouraged over the years s nee NATO was formed. However, Soviet forces in eastern Europe are being continually strengthened. Accordingly, while we want to encourage improved east-west relations, we cannot afford to reduce our over-all level of forces unless the Soviet side is prepared to do likewise.
I suggested that it might be useful to keep under review possibilities for gradual reductions in western and Soviet forces in central Europe. Then if opportunities arise we should know what was reasonable to propose on our side, and what reciprocal action we might expect on the other side.
For Canada's part, we continue to support the alliance as the best guarantee of the security of its members. We consider that Canada's interests and responsibilities require at present an appropriate continuing contribution to the military strength of NATO.
NATO, of course, has great military strength. This strength is contributed by the
11282	COMMONS
Report by Minister of Paris Meeting members of the alliance collectively and its management is equally a collective responsibility. Important progress was made at the meeting with the establishment of new improved machinery for nuclear defence management. Membership in the new organization does not increase or affect the nuclear commitments of its members. Its purpose is to permit fuller and wider participation in the formulation of NATO's nuclear defence policy and to give the non-nuclear countries a readier appreciation of what is involved in planning for defence against possible nuclear attack.
Another important aspect of this decision is its direct connection with the practical pursuit of disarmament. We are determined that this new method of co-operative defence will make it unnecessary for the western countries to set up any new joint nuclear force such as the proposed multilateral force. Indeed, I believe that what we are doing in NATO is already helping in bringing within reach a non-proliferation agreement, that is, an agreement to prevent the spread of nuclear weapons.
With this statement, Mr. Speaker, I would like to table copies in English and French of the final communique.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I must say that the minister is to be congratulated on the report that he has given. It is terse and reasonably complete. It indicates that the meeting of the NATO powers did bring about a new stance, if one can use that expression.
Mr. Willy Brandt brought to NATO new concepts which cannot but be beneficial. In particular I refer to the agreement set out in the communique whereby these nations, all of them that are members of NATO, agreed that there should be a call for development of human, economic and cultural contacts between the two parts of Germany. This is a long step forward from the occurrences of the last 15 years.
In so far as reduction of forces is concerned, Britain today has some 55,000 members of its armed services stationed on the continent; the United States has 225,000 and Canada has the force that it has had there in recent years. At this time, when there seems to be a diminution in the tensions between east and west, there are widespread demands that there should be a pronounced reduction in those forces. The demands spring from the point of view of the assurance of peace, and also to benefit the economic situation in the various

DEBATES	December 19, 1966
countries, because the contribution to the NATO forces has added greatly to the costs of those countries.
I am beginning to feel that with a diminution of tension, and because there is a preponderance of nuclear power in the United States the ground forces do not have the importance they had from the beginning of NATO.
Canada should give consideration to reducing the numbers of her forces on the continent of Europe. There was reference to the contribution by Canada to non-proliferation of nuclear weapons. I am not going to bring back other days, sir, but in 1963 when we took that stand, realizing that the day of the bomber was over, we were strongly criticized by the Liberal party. In the intervening period they have become converted to the idea that there should not be proliferation. This is indeed worthy of comment and appreciation.
I should have liked to hear the minister place before this house the reaction of the nuclear powers to the Canadian government's adoption of unification of the forces. That would have been an interesting story. The Minister of National Defence (Mr. Hellyer) shakes his head in an affirmative way. We have seen him do that before when the facts were opposite. I should like to hear him in this regard, because I am sure he rose to heights of eloquence in placing before the NATO powers the fact that Canada is going to become a pioneer in the field of removing all the insignia and traditions of the past.
I wish the Minister of National Defence would translate that nod to a vocal assertion. I am sure the house would find it interesting because the information the press gave is that the nations of NATO laughed at the idea. We shall see if we are able to get an answer from the Minister of National Defence, something we have not succeeded in doing up to the present time.
However, if the Secretary of State for External Affairs always reports to parliament with the lucidity and clarity he exhibited today, he will always receive a welcome.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, the right hon. Leader of the Opposition (Mr. Diefenbaker) has said so many kind and flattering words to the minister that I will not endeavour to repeat them.
We shall read very carefully and with a great deal of interest the statement of the minister and the communique. May I say, however, that I believe we and many other
December 19, 1966
Canadians may have very serious doubt and regret about the fact that Canada has felt it necessary to take part in a committee to examine or to concern itself with the exercise of the nuclear component of the alliance. We believe it would be better for Canada to take the position that we are not a nuclear power and do not wish to have any responsibility in any shape or form for this nuclear strategy. Also, along with many other people in the world, we view with apprehension any suggestion that West Germany in any shape or form should have any control, or participation in the control of nuclear weapons.
[DOT] (2:50 p.m.)
We believe this has been one of the obstacles to a non-proliferation treaty. We would much prefer Canada's taking the position that she has no wish to participate in the nuclear strategy. We should say to our ally, West Germany, that we think it would be better for the peace of the world if it, too, took no part whatsoever, not only in the actual physical control of nuclear weapons, but in any nuclear strategy, and as a member of the NATO alliance renounced any wish to take any such part in any way, shape or form.
I regret that in this statement once again there was absolutely nothing definite about any proposal made by Canada to phase out or get out of the present tactical nuclear role in which she is engaged in Europe. We believe that the diminution of tension to which the minister referred provided a first rate opportunity for Canada to say that her contribution to the alliance should be purely in the form of a mobile force without nuclear armaments of any k nd whatsoever. We regret that we are apparently failing to do this, and that the m nister has said absolutely nothing about acquainting our allies with an intention, not to reduce our forces as the Leader of the Opposition suggests but to opt out altogether from this nuclear role. These omissions we think are serious and important, and we hope we will have a chance to hear something from the minister in respect of these matters.


Mr. Gerard Laprise (Chapleau):: Mr. Speaker, my comments will be brief on welcoming back the Secretary of State for External Affairs and the Minister of National Defence (Messrs. Martin and Hellyer) who have just returned from the last NATO meeting held in France.
According to the statement made by the minister, it would seem that recent political events in Germany had caused some concern
Report by Minister of Paris Meeting to the other members of NATO. However, the fact that reunification was studied should lead us to believe that Europe is committing itself to finding a way which will bring peace to that area.
One point worries me however, and I wonder if I understood clearly the statement made by the minister, which statement I am anxious to read at my leisure. I note that once again we discussed disarmament while unfortunately, taking care to ensure that we are armed to the teeth. We are told that the United States will soon conduct another nuclear explosion; in fact, some are being announced here and there throughout the world. New countries are adopting nuclear arms, taking great care to say that these are intended for defence. But the fact remains that nuclear arms are dangerous to handle. I feel that no effort should be spared toward disarmament and that, once and for all, that aspect of peace should be looked into. So long as we plan for war, we cannot achieve peace.
We will study the statement made by the minister on the NATO meeting in order to benefit therefrom as much as possible.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, we welcome the report of the Secretary of State for External Affairs following his visit to the NATO ministerial conference. I would have appreciated some reference by the minister to reports which appear in today's press regarding the withdrawal of some of the R.C.A.F. squadrons, both reconnaissance and attack, serving at the present time under NATO. Likewise it would have been appreciated had the minister told us something about the relocation of No. 1 wing at Marville, and the headquarters at Metz. While this was not a direct concern it must have formed part of the discussions which were held, because it is related to our own NATO contribution.
It is reassuring to hear the minister suggest that the policy of the government is to continue its support in the NATO alliance. I think it is realized that while the United Nations has its place in the whole area of peaceful negotiation in the world, the real peace keeping organization is NATO, and the fact that Canada will continue her role in that organization is most important. I had hoped the minister might have mentioned the decision that will have to be made regarding the approximately 70,000 troops that France has in Germany at the present time, and whether

11284	COMMONS
Report of Mediator in Railway Dispute these forces will continue under some bilateral agreement.
It was reassuring also to hear the minister say that the new German foreign minister and the defence minister reiterate the stand taken by their predecessors, that Germany really has no intention of wanting any part in or control of the NATO nuclear deterrent. This does not detract from the fact that it is now general knowledge that the communist buildup of their forces on the eastern side of the dividing line in Europe is continuing to increase.
Unless there can be some agreement that gives the assurance that this will not continue, and that there will be a co-operative decrease in the forces of the Warsaw pact countries, we cannot really talk about cutting down our own contribution. Co-operative defence is one of the reassuring areas of co-operation among nations, such as we have among the nations of the NATO alliance.



LABOUR RELATIONS


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, pursuant to section 9 of the Maintenance of Railway Operation Act, Dr. Carl Goldenberg, the mediator, submitted a further report to me on the evening of Saturday last, just a few hours before his extended term expired. With the consent of the house I wish to table a copy of his report in English and a copy in French.
I might say that the terms of the settlement are not set out in the report. This could not be done until the railway workers concerned had been advised of its contents. I am reliably informed that the bargaining representatives of the 100,000 railway employees directly affected by the settlement reached, and the two railways concerned, have already expressed their appreciation of the job done by the mediator, Dr. Goldenberg.


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: The negotiations were complex, they were difficult, they were time consuming, involving long hours on many occasions during the mediation proceedings. I should like at this time to express publicly the thanks and the sincere appreciation of the government to Dr. Goldenberg for a job well done. I am sure that I also speak for parliament and the people of Canada in expressing
[Mr. Thompson.)
DEBATES	December 19. 1966
appreciation for this very good work under difficult and trying circumstances.


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: Incidentally, Mr. Speaker, I am pleased to note that Dr. Goldenberg is in the visitors' gallery this afternoon and that he has had an opportunity to hear this expression of appreciation from the members in all parts of this house.


Mr. Speaker:: Has the minister leave to table the report to which he has referred?


Some hon. Members:: Agreed.


John Robert (Jack) Nicholson: Mr. Speaker, I should like to ask that the report of Dr. Goldenberg be printed as an appendix to today's Hansard if the house is agreeable.


John George Diefenbaker: Mr. Speaker, I suggest that this should not be printed as an appendix to Hansard, but that it should be included in Votes and Proceedings.


John Robert (Jack) Nicholson: Mr. Speaker, such a course will be quite satisfactory.


Mr. Speaker:: It is understood that the report will be printed as an appendix to the Votes and Proceedings.
[DOT] (3:00 p.m.)




John Robert (Jack) Nicholson: Mr. Speaker, pursuant to an assurance I gave the house last week, I should like to file a copy of the appointment of Hon. Mr. Justice C. Rhodes Smith as the industrial commissioner to inquire into the recent work stoppage on the west coast.


Mr. Speaker:: Is it agreed that the minister file a copy of the appointment?


Some hon. Members:: Agreed.



BANKRUPTCY


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, in view of the questions which were directed to me last week, and of certain
December 19, 1966

statements made by Mr. William Gruber over the week end, I thought I might make a brief statement.
First, may I say that Mr. William Gruber was once employed by Mr. Morris Stein, the former auditor of the Prudential Finance Corporation, and was dismissed by Mr. Stein. Mr. Gruber first contacted the Toronto office of the Superintendent of Insurance in January of 1966. Because the department of insurance had no legal authority to assure him that he would be protected from legal action, he refused to disclose even the name of the company about which he said he had information. From the remarks which Mr. Gruber made, however, officials of the department of insurance concluded that he was probably referring to Prudential Finance.
As I said, he did not say that; this was just an inference which the officials drew. The [DOT]department of insurance was already exercising close surveillance over its federally incorporated subsidiary, The North American General Insurance Company, as a result of its recent purchase by the Prudential group. The result of this surveillance was in part the discovery in November of the theft of securities from the North American General Insurance Company.
Subsequent to his discussions with the department of insurance in January, Mr. Gruber met with an official of the Department of National Revenue and, under the protection of the Income Tax Act, made certain statements about Prudential Finance. He was informed that the Income Tax Act prevented that department from forwarding that information to any other department or authority.


Mr. Fulton:: Can the minister inform us of the date?


Mitchell William Sharp: I do not know the exact date but it was some time in January. As I said, Mr. Gruber was informed by the officials at that time that the Income Tax Act prevented that department from forwarding information to any other department or authority.
When the department of insurance inquired further from the Department of National Revenue, that department properly refused to divulge any information, but did say that there was nothing in what Mr. Gruber said that was of concern to the department of insurance, nor did his statements contain any evidence of tax evasion. The officials of the Department of National Revenue also indicated that they had had previous contacts with Mr. Gruber on a number of occasions, which
Bankruptcy
had led them to feel that he was generally an unreliable informant.
The department of insurance has had no correspondence whatsoever with Mr. Gruber on the subject of Prudential Finance or the North American General Insurance Company. The only correspondence it has had with him at all referred to a toy company, which is not related. This letter was forwarded to the Superintendent of Bankruptcy by the department of insurance. The acknowledgement received in reply by Mr. Gruber is apparently being displayed by him as proof that he told these agencies about the affairs of Prudential. It is not related.
Neither I nor any other minister has ever met Mr. Gruber personally. In fact his first direct approach to any minister was on December 13, 1966, just a week ago, when Mr. Gruber left a telephone message at my office indicating that he intended to make public what he called "the facts" about Prudential at a creditors meeting on December 15.
He indicated that the Ontario Securities Commission knew of this matter, and he also gave the name of Inspector Thurston of the Ontario Police Commission as a further reference. He said as well that he had corresponded with the hon. member for Yukon, Mr. Erik Nielsen.
When Mr. Gruber spoke with officials of the department of insurance in January he refused to provide them with anything that they could possibly refer either to another federal department or to the authorities of the province of Ontario. In any case he made it clear that he himself was contacting other federal government departments and the Ontario authorities with the intention of revealing the information he had refused to the Superintendent of Insurance. I understand that Mr. Gruber now denies this, but this was the clear understanding of federal officials.
Officials of the federal department of insurance have a close and continuing contact with officials of the Ontario department of insurance. In fact over the past year federal and provincial insurance officials have had numerous conversations involving North American General Insurance, Wenworth Insurance, which are subsidiaries of Prudential Finance, in the course of their regular business.
Federal officials have been aware for some time of the Ontario government's interest in Prudential Finance. Had Mr. Gruber provided any worth-while additional information, it would have been transmitted to them in the normal way. He did not do so.

December 19, 1966
Bankruptcy
The office of the federal Superintendent of Bankruptcy was not contacted at all by Mr. Gruber about Prudential Finance or its related companies until after Prudential had made a proposal to its creditors in November of 1966. The Superintendent of Bankruptcy had no previous knowledge of the affairs of Prudential Finance, and in any case his responsibility commences when a firm is declared bankrupt or makes a proposal to its creditors, and not before.
However, I am informed by the office of the Superintendent of Bankruptcy which received last week this information from Mr. Morris Stein, the former auditor of the Prudential Finance Corporation of Toronto, that Mr. Ted Brown, chief auditor for the Ontario Securities Commission, has met with Mr. Stein, to discuss the affairs of Prudential on several occasions since 1963. In March of this year there was an inquiry into the affairs of Prudential Finance at which Mr. Harry Bray, director, Ontario Securities Commission, Mr. Ted Brown, Ontario Securities Commission, Mr. G. Gillman, Ontario Securities Commission, Mr. Brien, president, Prudential Finance, Mr. William Deslauriers, of Tory, Tory, Des-lauriers and Binnington, Mr. Morris Stein and a stenographer were present.
In June of this year Mr. Gillman of the Ontario securities commission reviewed the affairs of Prudential with Mr. Stein once again.
Prudential Finance is a provincially chartered company and the Ontario authorities have been aware of its problems for some time. The federal government is concerned when any group of Canadians suffers in this way. We have a particular interest in this latest case, beyond the general protection of Canadian investors, because a federal company, North American General Insurance, was undermined by the collapse of a provincial company-Prudential Finance. The collapse of Prudential Finance and others that have gone before could only have been prevented by the improvement of provincial laws and administration.
Our jurisdiction is limited; nevertheless we are not satisfied with the general level of protection afforded the investor in Canada. The provincial authorities must find ways to make that protection more adequate, and the federal government is prepared to assist them. We are already reviewing our own laws and administration as they relate to federally incorporated finance companies. We urge the

provinces to do the same within their areas of jurisdiction.
[DOT] (3:10 p.m.)
In conclusion, may I make clear, in view of what Mr. Gruber said over the week end, that I have never been contacted personally by Mr. Gruber at any time and he did not call my office until after the collapse of Prudential on December 13. At no time did he reveal to the department of insurance anything of value, not even the name of the company.
The Ontario authorities were fully aware of the Prudential Finance, which is a provincially incorporated company subject to provincial laws and administration.


John George Diefenbaker: Mr. Speaker, we have just listened to the minister producing a mystery within a mystery. He obviously had a prepared statement designed in general to exculpate the government of Canada and, in particular, himself. With the greatest respect to the minister, and accepting his statement that the man in question never communicated with him, that in no way answers the situation that has been created.
It is the most amazing story that the minister tells. Gruber did meet with government officials in Toronto and no one knew what he was talking about. The officials had a suspicion he was talking about the Prudential Finance Corporation, and when they were informed of that they made certain investigations, apparently, although they did not say anything to the government of the province of Ontario.
The minister says now that the government of Canada is disturbed over the losses. Why was there no communication? The excuse he gives is that the Department of National Revenue could not furnish any information because of the provision of the statute. If ever there was an example of transparent excuse and subterfuge, that is one. While this department plays around and the minister engages in this artful dodging, 20,000 Canadians will have their insurance policies cancelled, according to the liquidator. The minister produces an alibi for the fact nothing was done to notify the government of Ontario.


Mitchell William Sharp: We had nothing to notify.


John George Diefenbaker: Nothing was done. Why? Can you imagine, Mr. Speaker, whatever the information was, it must have been of some consequence.


Mitchell William Sharp: No, it was not.
December 19, 1966


John George Diefenbaker: It was not?


Mitchell William Sharp: Not even the name of the company.


John George Diefenbaker: Nobody communicated with the minister. Whatever was said in Toronto on January 24 to officials in the civil service was not transmitted to the minister.


Mitchell William Sharp: It was not important enough.


Some hon. Member:: Oh, oh.


Mr. Horner (Acadia):: Twenty thousand people.


John George Diefenbaker: "It was not important enough"; that is interesting. At what degree does a matter become important enough?


An hon. Member:: To this government.


John George Diefenbaker: Yes, to this government- to have it brought to the attention of the minister? It was brought to the attention of the Department of National Revenue and that department showed a complete lack of concern. They relied on the letter of the law rather than recognizing that the information they had should give cause for investigation.
I feel sorry for the minister. There he was in solitary isolation, nobody telling him what was going on. At the same time there apparently was information of such a nature that the informant was afraid unless he was given protection, he would be in danger. What he was afraid of I do not know, but that is what he said. Surely a person with information he was afraid to reveal in detail should have produced a very complete and thorough investigation. It is a mysterious story. It is patent, Mr. Speaker, that the minister today is trying to get away from the responsibility of the federal government.


Mitchell William Sharp: Trying to tell the facts.


John George Diefenbaker: They have no responsibility for insurance companies. That is the attitude.


Mitchell William Sharp: Trying to tell the facts.


John George Diefenbaker: They have no responsibility. That has been their attitude on bankruptcies for too long. That has been their attitude. They say: We have no responsibility. Surely this government cannot stand idly by in a matter coming under a federal charter. Surely a simple inquiry by the Superintendent of Insurance is not enough in a case involving dislocation and financial manipulations on a
Bankruptcy
massive scale. Yet the minister's whole attitude is that there is really nothing for the Government of Canada to be concerned about.
Are we to tolerate piratical actions by those who operate insurance companies? What happened to the $500,000 in securities? They were there in September and gone in November. The minister says nothing can be done. Surely some law should be in effect regarding foreign corporations in Canada.


Mitchell William Sharp: Why did not the right hon. gentleman bring one in?


John George Diefenbaker: Surely the federal government, which more than any other government is responsible for the direction of economic development is responsible to Canadians who invest in companies, as these did. Something must be done other than wafting idle verbiage before the House of Commons, and believing the matter has been settled.
Surely, when the national economy and the savings of so many are involved, there is need for more than a passing gesture representing almost contemptuous disregard of people's rights. The overwhelming number of businessmen and industrialists in Canada are honest and progressive; they operate on a fair and reasonable basis.


An hon. Member:: Within the law.


John George Diefenbaker: Nevertheless, it is obvious that an increasing number of interests are placing themselves in positions of control. They apparently make the rules as they go along. They have little regard for ethics, law or the interest of shareholders. What about this government's attitude? I would have thought the minister would have risen today and said: We are getting to the bottom of this.
They do not want an investigation into this, Mr. Speaker. We asked for the appointment of a royal commission, to operate immediately, and this was turned down. Now I suggest that we get the facts-not the ex parte prepared, exculpatory statement which has been produced, but the true facts. Let us place this whole matter before a committee of parliament and get the facts. Surely the minister will immediately agree to that.


Mitchell William Sharp: There is no objection.


John George Diefenbaker: He agrees. He is willing to agree to that. We have made some advance from the other day. I look forward now to the government's immediately making available to a committee of the house the power to

December 19, 1966
Bankruptcy
investigate, to look into the entire ramifications of this matter. I thank the minister for his acceptance of the idea.
Sir, because of the revelation Canada's reputation for honesty and integrity in business is being challenged in various parts of the world. We cannot allow that reputation for integrity to be questioned. We cannot permit Canada to be a happy hunting ground for unscrupulous operators who believe that the law of the jungle should be their guiding theme.
[DOT] (3:20 p.m.)
I will have more to say about this on a later occasion. What the minister has done today is to open a box so that we just get a glimpse of what it contains. The degree of supervision exercised over the activities of companies under federal responsibility is not what it should be. There have been several instances of sufficient magnitude in the past two years to cause uneasiness and disquiet. There have been failures on a large scale; there has been a legion of bankruptcies in suspicious circumstances. These things will, I hope, first be looked into by a committee of this house.
Before I conclude, I have certain questions I should like to address to the minister. Did the federal government or the office of the bankruptcy division receive information from Mr. Gruber regarding no fewer than five other bankruptcies this year? Did Mr. Gruber write to the bankruptcy division on November 2 last relating to a bankruptcy in Canada, and what action was taken? I think the letter will be available.
Finally, I say the time has come for this government to shed its present attitude of not being responsible. Hon. gentlemen opposite are responsible as far as the insurance companies are concerned. Let them shake themselves out of this lethargy, so that in the future not only other Canadians may be protected from wrongdoing, but so that those people who invested because this was a company under federal responsibility will not be made the goats, and suffer, because they believed that an insurance company was something apart from the ordinary run of corporations. They thought that when they took out insurance they would be protected, and that when they bought shares in an insurance company they could do so in the confidence, on the basis of experience and law, that examinations would be made regularly to the end that they would not suffer financial loss.

The minister laughs and smiles. He and his hon. friends smile while unfortunate people are suffering losses.


An hon. Member:: Who is smiling?


John George Diefenbaker: Do they interject and say, no? These people invested their life savings. They have lost them, now, and all the government says is: We wash our hands; we are without sin; we did not do anything, but we did not have anything to do. That answer is insufficient.


Mr. David Lewis (York South):: The matter the house is now discussing discloses a shocking lack of legal protection, both federal and provincial, against irresponsible profit seekers in the finance and acceptance corporation field.
I must say that the minister's statement today astonished me somewhat, because parts of it were in direct contradiction to one of the things he said last Friday. If I heard him correctly, he said that Mr. Gruber saw members of the insurance division of his department in January last and told them something about a toy company, which was not connected with Prudential at all.


Mitchell William Sharp: I said that the only correspondence on file between Mr. Gruber and the Superintendent of Insurance related to the bankruptcy of a toy company.


David Lewis: I am glad to hear that correction. The hon. gentleman left with me the impression that I stated. But I would remind him, merely to make a point which I think is of wider and more important application, that as reported at page 11221 of Hansard he said this:
In January of this year, Mr. Gruber said he had information to disclose which would be significant to anyone concerned about the affairs of Prudential Finance or its subsidiaries-
The minister went on to say that Mr. Gruber would only make the disclosure if he were offered legal protection. To date I have not heard what sort of legal protection he was asking. The main point in that statement is that he said he had information which would concern anyone interested in the affairs of Prudential Finance or its subsidiaries. And one of its subsidiaries is, of course, the North American General Insurance Company for which the minister has responsibility.


Mitchell William Sharp: May I rise on a point which disturbed me a little when I read Hansard? I am informed by my officials that they only
December 19, 1966

made an inference about Prudential Finance. The first time they spoke of this they had not looked at the records and their recollection was that Mr. Gruber had mentioned Prudential Finance. But when they looked at the notes which had been kept they discovered he had not named the company, and they had only drawn the inference. I should like to make this correction now.
[DOT] (3:30 p.m.)


David Lewis: May I ask the minister to stop being defensive, and to cease concerning himself about who surmised what? The important fact, as far as the Canadian people are concerned, is that the officials of his department had reason to be concerned about a company, a subsidiary of Prudential Finance, over which the federal government had jurisdiction, and it was their duty to do something about it. It was also their duty at that time to get in touch with the provincial authorities. It was not good enough for them to take the lofty position the minister took on Friday, as appears at page 11271, that as far as he knew Mr. Gruber passed the information along to the provincial authorities at the same time as he passed it to the federal government. Mr. Gruber now denies having done that. I do not think any member of this house is concerned with precisely how much reliance is to be placed on Mr. Gruber's statement. I have never met him in my life; never spoken to him. I submit that what is of concern to this parliament, and what the minister would do well to admit for the sake of Canada, is that there was a slip up-there was a failure to act when the department should have acted last January.
If the minister had the touch of greatness which is required, I believe he would do this. It is not his personal responsibility, and we would know that having admitted a failure in this case a s'milar failure was less likely to occur in the future. But one cannot help being concerned at this attempt, now, to gloss over something which is indefensible, this failure on the part of officials of the hon. gentleman's department who might otherwise be entirely competent and good officials-I do not know them, either. But in this case they did a disservice to Canada and a disservice to the policyholders and investors who had trusted Prudential Finance and North American General Insurance.
I want to make two or three points of a more positive character. It seems to me this entire, regrettable and shocking case shows that there is great danger in permitting any
Bankruptcy
person, and any group of people who are concerned with nothing else but the profit they can make out of it, to set up finance companies, to lend poor consumers' money at exorbitant interest rates, and then to permit them to proliferate into all sorts of subsidiaries which may swallow up insurance companies at the expense of the policyholders and of the integrity of this country.
I say that what is needed is not an inquiry by a parliamentary committee, which seems to me to be very limited indeed. On our behalf, I urge the minister to consult with the provincial authorities in this country, to make a thorough inquiry in this entire field, both federal and provincial, of these small insurance companies and of these, as it turns out, thieving finance and acceptance corporations.
I say secondly, Mr. Speaker, this situation clearly shows a lack of adequate legislation on the federal level and the provincial level. It is not enough for the minister to blame the Ontario government and to try to clear his skirts by doing that. I agree with the minister that the Ontario authorities are fully as much responsible, if perhaps not even more directly responsible, as the federal authorities. But it seems to me the federal government has a responsibility to convene a conference of all provincial authorities, not only the insurance companies but the authorities within the provinces, in order that a combined and consistent effort can be made to plug the loopholes in our legislation and a stop called to th:s thieving that has gone on, with the failures that have followed.
Finally, Mr. Speaker, as we approach our centenary, may I say it is a heartbreaking thing to see these important events, affecting the lives and the future of thousands of Canadians, taking place in separate compartments in this country. The lack of co-operation between Ottawa and Queen's Park, and the similar lack of co-operation between Ottawa and other provincial centres, is a disservice to this country. I express the hope that th s sad incident, which cannot now be cured so far as the investors, the policy holders and the many people who have lost their savings are concerned, will teach us to establish a line of authority and co-operation between the federal and provincial governments that will be of real value to our country.
On behalf of our party I should like to urge the right hon. Prime Minister that the federal government seek to co-operate with the provincial government of Ontario, and other governments if they are involved, to find some

December 19, 1966
Bankruptcy
way of compensating the poor investors and policy holders who have suffered from this tragedy which our government and the provincial government failed to prevent.


Mr. H. A. Olson (Medicine Hal):: Mr. Speaker, I do not intend to try to attach any blame, or to comment on the relationships of the failure of the Prudential Finance Corporation to the Minister of Finance (Mr. Sharp). However, I think the minister has a responsibility to see whether or not there are any other federally chartered insurance companies that may be controlled by these so-called "10 percenter'' finance companies. These finance companies, of course, are under the jurisdiction of provincial governments.
I agree that we have had too many of these failures which have involved the savings of a lot of innocent people. Therefore, there is an important responsibility on the part of the Minister of Finance to see that these insurance companies are not being bought up or controlled by this type of finance company.
The minister said earlier that there was nothing said to the officers in his department that was worthy of referring to any other department or, for that matter, to the officers in the government of Ontario. When Mr. Gruber came to the office of the superintendent of insurance and explained to the officials there that there were some problems involved, I cannot accept the fact that those officers did not at once examine the corporate structure of the company to see how it was controlled. Surely if there is any reason at all for requiring a federal charter for insurance companies, it must be to give some legal protection to the people who invest in those companies.
I am not suggesting that a federal charter in any way guarantees success within those companies, but it certainly ought to guarantee honesty, something which has not been present so far as the administration of the North American General Insurance Company is concerned.
The minister also said that Mr. Gruber never called at his office, never telephoned him, and so on. That is of no particular consequence to me because I think there are other ways of communicating information, such as to the department, and the department should act on that information. The minister went on to say that he is not satisfied with the federal legislation we have at the moment respecting this kind of problem, and that he is not satisfied with the federal legislation we have at the moment respecting this kind of problem, and that he is not satisfied with what is in

the provincial statutes. We, too, are not satisfied in that respect, and we can at least agree with him that something ought to be done to tighten up these laws so that there may not be a repetition of this incident.
We would support the suggestion that an inquiry should be made into this matter. I am not entirely sure a parliamentary committee should be the first step taken to look into the matter, but I think it might be a logical second step, after we have had a thorough investigation by a royal commission to make sure there are no more corporate structures of this kind whereby provincially chartered companies have control of federally chartered insurance companies.
If there are such corporate structures and we see that there may be the possibility, or the probability, of some of them being in a weak financial condition with respect to their obligations, then some action should be taken, and taken right away. In conclusion, Mr. Speaker, I want to say on behalf of this party that we are not satisfied with the explanation that has been given today or with what was done with the information that was in the hands of some of the federal government officials several months ago. We hope we are not going to have any more excuses or buck-passing in the house, and that positive action will be taken to clear away this mess and strengthen legislation so that there will be no repetition of it.



QUESTIONS

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

Mr. Stanbury: 1.	Regarding the answer to question No. 1,749, answered on June 29, 1966, has the government received any further information about the national manpower conference announced last March by the education ministers of Ontario and Quebec, to be held next fall with federal representation invited?
2.	If not, will the government make inquiries from those provincial ministers about progress of plans for such a conference?
3.	When discussing this matter with the provinces, will the government request that the subject of joint initiatives in immigrant education be included on the agenda of the conference?


Mr. John R. Maiheson (Parliamentary Secretary to Prime Minister):: 1. Approximately 300 delegates and observers attended the first interprovincial conference on education at Montreal on September 8, 9 and 10,
December 19, 1966

1966. Federal government representatives included the Minister of Manpower and Immi-gation and officials from the Department of Manpower and Immigration, the Department of the Secretary of State, the Special Planning Secretariat of the Privy Council Office, and the Economic Council of Canada. Special papers for the conference were prepared by the Economic Council of Canada and by Air Canada.
2.	Not applicable.
3.	The conference centred upon the discussion of seven subjects: (1) The relationship of education to economic and social goals.
(2)	Relationships between industry and education. (3) Education and the development of public and community services. (4) The retraining of manpower and continuing education. (5) Training and the new educational technology. (6) Educational research and development needs and opportunities. (7) The reorganization of structures at the post-secondary and university levels to meet the needs of the professional sector.
Aspects of immigrant education were discussed as part of these subjects.


REPLACEMENT OF RETURNING OFFICERS
Mr. Lambert: 1.	With respect to the reply to question 1,933, Hansard October 5, 1966 p. 8,337, what are the names of the returning officers who have been named in the constituencies referred to as in the province of Alberta?
2.	What are the dates of their respective appointments?
3.	From what persons were sought, and from whom were received, recommendations for each of such appointments?
4.	If no such appointments have yet been made, when is it expected that such nominations will be made and announced?


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: 1. Alberta, 19.
(1)	Athabasca, Mr. Louis Badry, P.O. Box 476, Lac de la Biche.
(2)	Battle River, Mrs. Jessie Burgess, Cam-rose.
(3)	Calgary Centre, Mr. William A. Peters, 1405, 7th Street N.W., Calgary.
(4)	Calgary North, Mrs. Joan Anderson, 103 -43rd Avenue N.E., Calgary.
(5)	Calgary South, Mr. William C. Morley, Calgary.
(6)	Crowfoot, Mr. Lee Sims, Veteran, Alta.
(7)	Edmonton Centre, Mr. George J. H. Baribeau, 13503-115th Street, Edmonton.
Questions
(8)	Edmonton East, Mr. James Salyzyn, 12120-52nd Street, Edmonton.
(9)	Edmonton-Strathcona, Mrs. A. P. Hunter, 8315-120th Street, Edmonton.
(10)	Edmonton West, Mr. Louis O. Ohlsen, 13202-81st Avenue, Edmonton.
(11)	Lethbridge, Mr. Edwin Frank Hem-broff, 1105-6th Ave. South, Lethbridge.
(12)	Medicine Hat, Mr. Gilford J. Emery, 910-3rd Avenue S.W., Medicine Hat.
(13)	Palliser, Mr. Louis Schmaltz, Beiseker.
(14)	Peace River, Mr. Paul E. Maisonneuve, Guy, Alta.
(15)	Pembina, Mr. Frank F. Appleby, Athabasca.
(16)	Red Deer, Mr. Neil Leatherdale, Olos.
(17)	Rocky Mountain, Mr. Len Clatiotis, Banff, Alta.
(18)	Vegreville, Mr. Roland F. Rocque, St. Paul, Alta.
(19)	Wetaskiwin, Mr. Lawrence Wilson, Wetaskiwin, Alta.
2.	Nos. 3, 4, 8, 9, 10, 11, 12, 14, 19 were appointed September 29, 1966. Nos. 1, 5, 13, 15, 16, 18 were appointed October 20, 1966. Nos. 2, 6, 17 were appointed October 27, 1966. No. 7 was appointed November 24, 1966.
3.	From responsible persons who made it a point to recommend such appointments.
4.	N/A.


MANITOBA-RETURNING OFFICERS IN NEW CONSTITUENCIES
Mr. Dinsdale: 1.	Have returning officers been appointed for the new constituencies in Manitoba?
2.	If so (a) what are their names and addresses (b) upon whose recommendation and under whose authority were the appointments made in each case?


Albert Béchard: 1. Yes.
2.	(a) For Brandon-Souris, Kenneth O. Bicknell, 136-11th St., Brandon. Churchill, Orson F. Wright, 35 Main St., Flin Flon. Dauphin, Mr. Roderick J. A. Dewar, Dauphin. Lisgar, Mr. James Hunter Treble, Crystal City. Marquette, Donald Ross, Minnedosa. Portage, Elwood Brooker, 37 Royal Road S., Portage La Prairie. Provencher, Mr. Anton Weselak, Beausejour. St. Boniface, Mr. Jean-Marie Deniset, 62 Springside Avenue, St-Vital. Selkirk, Donald N ghtingale, 471 Linden Ave., Winnipeg 15. Winnipeg North, Greg Ratuski, 34 Daffodil, Winnipeg 17. Winnipeg North Centre, Tom Blaine, 933 Garfield Avenue,

December 19, 1966
Questions
Winnipeg 3. Winnipeg South, Arthur Wortz-man, 233-233 Portage Ave., Winnipeg 1. Winnipeg South Centre, Ron Gillies, 288 Moorgate St., Winnipeg 12.
(b) Recommended by the Secretary of State under the authority of section 8 of the Canada Elections Act and section 27 of the Electoral Boundaries Readjustment Act. (13 Elizabeth II Chap. 31).


BANFF NATIONAL PARK-ACCOMMODATION CONCESSIONS
Mr. Fane: 1.	From whom were tenders received regarding hotels, motels or room accommodation concessions in Banff National Park, Alberta in 1964, 1965 and 1966?
2.	What is the name of the company or companies submitting tenders that were accepted?
3.	What are the names of the directors and members, and the offices held, of the successful firm or firms?
4.	What are the amounts of the tenders accepted?
5.	When were the hotels, motels or room accommodations authorized and when were or will they be opened for business?
6.	What companies are now operating them if already opened for business?


Hon. Arlhur Laing (Minister of Indian Affairs and Northern Development):: 1. Few
tenders were called for the provision of hotels, motels or room accommodations in Banff National Park in the years 1964-65-66 because nearly all suitable serviced land is already under lease by private persons or corporations. The function of the Minister is confined to confirming whether the proposed use of the land is consistent with the terms of the lease and the zoning regulations. An exception to this is and will be the visitor
services centres, the first of which is being developed at Lower Lake Louise. A tender for the development of Motel Site No. 3 in this centre was received from Power Corporation Developments Limited on September 8, 1965. A tender was also received from Brent Holdings Limited for the development of low cost staff accommodation in Banff Townsite on November 30, 1965.
2.	Power Corporation Developments Limited's bid was not accepted because it did not meet specifications. The bid submitted by Brent Holdings Limited of Edmonton was accepted on condition that suitable financing would be arranged. The company was unable to arrange the necessary financing and the bid was withdrawn on March 15, 1966.
3.	Hans Hartwig, President; Marianne Hart-wig, Secretary-Treasurer.
4.	The tender submitted by Brent Holdings Limited and accepted conditionally was $222,000.
5.	As indicated in (1) above, most or nearly all suitable serviced land is already held under lease by private persons or corporations. In this category, the following hotels, motels or room accommodations were either started or completed in the years 1964-65-66 according to the department's records: Deer Lodge: Banffshire Inn Motel, Voyager Inn Motor Hotel, Bow View Motor Lodge. Banff Motel: Mountain View Bungalows, Pinewood Bungalows, Sunshine Village Lodge. Ski Club of the Canadian Rockies: Charlton Cedar Court, Towne House.
6.	See 5 above. New or expanded accommodations either started or completed in the years 1964-65-66:
Name of Company	Name of Development	No. of units	Cost of construction1. Crosby Company Limited	Deer Lodge	24	$239,0002. Rundle Construtcion Limited	Banffshire Inn Motel	54	$309,3683. Banff Voyager Inn Limited	Voyager Inn Motor Hotel	88	$900,0004. Bow View Motor Lodge Limited	Bow View Motor Lodge	59	$454,9415. A. Kilinowski	Banff Motel	21	$ 93,9526. Thomas Brown and Coy Amelia Brown	Mountain View Bungalows	6	$ 14,3007. Marob Holdings Company Limited	Pinewood Bungalows	24	$ 70,0008. Sunshine Village (Banff) Limited	Sunshine Village Lodge	60	$592,0009. Ski Club of Canadian Rockies Lake Louise	Ski Club of Canadian Rockies	24	$ 82,48810. Elmer Rob nson Charlton and Grace Charlton	Charlton Cedar Court	16	$115,00011. Brent Holdings Limited	Towne House	42-	bachelor apartments	$715,575

December 19, 1966


CALENDAR REFORM
Mr. Bell (Carlelon): 1.	Has any consideration been given by the government to the subject of calendar reform?
2.	If so, when and by what agency of government?
3.	Have any tentative conclusions been achieved?
4.	Have there been any negotiations or discussions with any international organizations or with other nations on the subject of calendar reform?
5.	If so, what is the nature and result of such negotiations or discussions?


John Ross Matheson: 1. The subject of calendar reform was considered in 1955 by several departments concerned with the effects of a reform of the calendar as a result of a request by the Secretary-General of the United Nations that the Canadian government forward its views on the desirability of reforming the calendar.
2.	See answer to previous question. The matter was considered in 1955 by an interdepartmental committee on calendar reform composed of representatives of the Departments of Citizenship and Immigration, External Affairs, Labour, Mines and Technical Surveys (Dominion Observatories), Secretary of State, Trade and Commerce (Dominion Bureau of Statistics) and Transport.
3.	No Arm conclusions have been reached on this matter. The reply to the Secretary-General's request, embodying the recommendations of the interdepartmental committee, stated that "the Canadian Government has come to the conclusion that a study, under the auspices of the Economic and Social Council, of the possibilities of calendar reform might prove useful. While expressing an interest in a study of calendar reform proposals and possibilities, the Canadian government does not wish at this time to support or commit itself to any specific reform". Generally speaking, it is considered that for Canada to initiate a reform of the calendar on its own would be to invite many inconveniences, not only to ourselves, but to other countries dealing with us. Consequently, whatever reforms are made should be made on an international basis. Should a serious international interest in reform plans develop, the government would be prepared to consider the question in a worldwide context under the auspices of the United Nations.
4.	The question of world calendar reform was considered in 1956 by the twenty-first session of the United Nations Economic and Social Council, of which Canada was a member at that time. In the brief debate which
Questions
took place in ECOSOC most representatives expressed the view that the time was not ripe calendar reform. At the close of the discussion a proposal to adjourn indefinitely consideration of the question was adopted by a vote of 15 to 0 with three abstentions. Canada abstained on this proposal because we were unwilling to vote in favour of the indefinite postponement of this question and felt that continued study of calendar reform under United Nations auspices would be worthwhile. At the same time, we recognized that there was relatively little interest internationally in this question. There has been no further discussion on the matter of calendar reform in the United Nations since 1956.
5.	See answer to previous question.


APPOINTMENT OF RETURNING OFFICERS
Mr. McCleave: Has the government, or any department, appointed returning officers for the ridings in the next general election and, if so, how many are the returning officers who served in the 1965 general election?


Albert Béchard: Mr. Speaker, the answer to the first part of the question is yes. The answer to the second part is, 52.


LIVE ATTRACTION AT HALIFAX CITADEL
Mr. Forreslall: Is it the intention of the government to introduce any form of live attraction, such as is the case at Fort Henry, at Halifax Citadel for our Centennial year?


Arthur Laing: The
development at the Halifax Citadel will not have reached a stage by Centennial year to provide live attraction, although such a project may be considered after possible restoration has provided a safe and historically accurate context in those areas requiring renovation.


IMMIGRATION OFFICES OUTSIDE CANADA
Mr. Wahn: 1.	In what cities outside Canada does Canada maintain its own immigration offices where applications can be filed and immigrants interviewed for entry to Canada?
2.	In the last financial year for which figures are available, how much did the government of Canada spend in respect of each such office?

December 19, 1966
Questions


Mr. J. C. Munro (Parliamentary Secretary Immigration offices in the cities listed below, to Minister of Manpower and Immigra- Indicated opposite each office is the cost of tion):: 1 and 2. Applications can be filed and operation for the fiscal year April 1, 1965 to immigrants interviewed at the Canadian March 31, 1966.
City	Operational '
Athens	$ 73,594
Belfast	43,325
Berlin	32,458
Berne	63,043
Birmingham	
Bordeaux	30,208
Bristol	52,186
Brussels	87,807
Cairo	51,054
Cologne	303,574
Copenhagen	86,642
Dublin	24,867
Glasgow	126,336
Hamburg	40,943
Helsinki	30,428
Hong Kong	209,843
Leeds	87,203
Lisbon	69,242
Liverpool	87,537
London	471,266
Madrid	42,606
Marseilles	23,675
Milan	29,922
Munich	30,023
New Delhi	88,624
Oslo	31,385
Paris	327,958
Rome	268,659
Stockholm	52,081
Stuttgart	39,181
Tel-Aviv	37,333
The Hague	73,279
Tokyo	12,414
Vienna	114,865


MONTREAL, P.Q.-LEASE BY C.B.C. FROM NAMI INVESTMENTS CORPORATION
Mr. Allard: 1.	Were tenders called for the lease between the C.B.C. and Nami Investments Corporation in connection with the new C.B.C. site in Montreal and, if so (a) under what procedure (b) for what amount and under what conditions was the said lease entered into (c) did any other group of persons offer to enter into a lease under the same conditions offered by Nami Investments Corporation and, if so (i) who are they (ii) if the conditions were different, in what way?
2.	When the C.B.C. sells, buys or leases, are tenders called and, if so, how?


Hon. Judy V. LaMarsh (Secretary of State):: The C.B.C. informs me that: (1). No. Nami In-[Mr. Wahn.)
(Opened Sept. 1966)
Began operations May 1965.
Began full operations June 1965. Began operations August 1965.
Began operations June 1965.
vestments Corporation approached the C.B.C. (a) N/A. (b) $43,593.75 for a period of 12J months from December 1, 1966, with all buildings and services to be removed by date of expiry of lease, December 15, 1967. (c) Yes. A second proposal was made subsequent to negotiations having been commenced with Nami Investments Corporation, (i) "Motel 67" represented by J. Morin, (ii) N.A.
2. No. When the Corporation sells surplus real properties it advertises them for sale and accepts the highest bidder. In the case of purchasing or leasing real properties, the Corporation negotiates the best possible agreement.
December 19, 1966


EXTRA HIGH VOLTAGE TEST CENTRE
Mr. Hales: 1.	Is it the intention of the National Research Council to build and equip an Extra High Voltage Test Centre?
2.	If so, when, and where is the location?
3.	To what does Vote 5 on page 316 of Estimates 1966-67 for National Research Council to the amount of $7,033,000 refer?


Hon. C. M. Drury (Minister of Industry):: 1.	The National Research Council of Canada has under consideration and is looking into, all aspects of the problems concerning the building and equipping of high voltage research facilities.
2.	No decision has been made concerning when, and where these will be constructed.
3.	Vote 5 on page 316 of Estimates 1966-67 for the National Research Council to the amount of $7,033,000 refers to provision for construction of buildings, for associated equipment and planning, and for alterations and extensions of a capital nature. Projects which are underway are located in Nova Scotia, Ontario, Manitoba and Saskatchewan.
CORN IMPORTS FROM UNITED STATES Question No. 2,214


Mr. Peters:: 1.	What Is the number of bushels of corn Imported Into Canada from the United States in 1965?
2.	What was the amount of duty paid on the com imported from the United States in 1965?
3.	What was the total number of bushels of com designated for manufacturing and that designated for feed purposes?
4.	What was the rate of duty paid per bushel on com imported from the United States for (a) feed purposes (b) seed purposes (c) manufacturing purposes?
5.	What was the total break-down of American imported corn by grades and the duty paid on each grade in the year 1965?


Julia Verlyn (Judy) LaMarsh: I am informed by the departments of Trade and Commerce and National Revenue as follows: 1. Imports of Indian corn, shelled* into Canada from the United States in 1965 amounted to 18,179,700 bushels, valued at $27,788,976.
2.	The duty paid on imports of Indian corn, shelled* from the United States in 1965 was $1,453,867.
3.	Information requested is not available.
Questions
4.	(a) (b) (c) eight cents per bushel.
5.	A breakdown by grades and duty paid on each grade is not available. The same rate, eight cents per bushel, applies to all grades.
*Corn imported in bushels is recorded in statistics under the description Indian corn, shelled.


FUNDS IN R.C.M.P. SUPERANNUATION ACCOUNT
Mr. Knowles: 1.	What was the total amount of money In the
Royal	Canadian	Mounted	Police	Superannuation
Account as at (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?
2.	What rate of interest does the government pay for the use of this money?
3.	What amount of interest was credited to the
Royal	Canadian	Mounted	Police	Superannuation
Account during the fiscal years ending (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?
4.	What was the total amount paid out of the
Royal	Canadian	Mounted	Police	Superannuation
Account during the fiscal years ending (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?


Hon. L. T. Pennell (Solicitor General):: 1.
(a) $45,986,906.99;	(b)	$57,706,948.59; (c)
(c) $65,411,253.45.
2.	Interest is credited to the superannuation account on the last day of each quarter in each fiscal year and is calculated at the rate of 1 per cent of the balance to the credit of the account on the last day of the preceding quarter.
3.	(a) $1,576,978.32; (b) $1,929,488.33; (c) $2,420,759.75.
4.	(a) $573,195.38; (b) $666,752.98; (c) $848,113.32.


SURPLUS UNITS IN ROYAL CANADIAN NAVY
[Stage Direction]
Question No. 2,249
Mr. MacEwan:: 1.	What units of the Royal Canadian Navy are now being declared surplus or will be declared surplus at an early date?
2.	What is the type and classification of each individual ship?
3.	In what month in 1967 will tenders be called for the four new all-purpose destroyers?


Hon. Leo Cadieux (Associate Minister of National Defence):: 1. and 2. The following ships are being prepared for disposal through the Crown Assets Disposal Corporation:

December 19, 1966
Questions
Name of Ship	Type
H.M.C.S. Granby	YMT 180
H.M.C.S. Antigonish	DE 301
H.M.C.S. Beacon Hill	DE 303
H.M.C.S. Jonquiere	DE 316
H.M.C.S. New Waterford.	DE 304
H.M.C.S. Sussexvale	DE313
H.M.C.S. New Glasgow	DE315
H.M.C.S. Swansea	DE 306
H.M.C.S. Stettler	DE311
H.M.C.S. Ste. Therese	DE 309
3.	It is expected that tenders will be called for anti-submarine helicopter destroyers in March 1967.


REPLACEMENT OF INSIGNIA ON AIRCRAFT
Mr. McCleave: 1.	Have the words "Royal Canadian Air Force" been painted out and replaced by the words "Canadian Armed Forces" on (a) C-45 Expediter Aircraft number 2368 (b) any other aircraft of the Royal Canadian Air Force?
2.	Is there now a legal entity known as "Royal Canadian Air Force"?
3.	Is there now a legal entity known as "Canadian Armed Forces"?
4.	If the answer to Part 1 is yes, on whose authority was such done?


Léo Alphonse Joseph Cadieux: 1. (a) Yes, temporarily, for the purpose of taking a picture, (b) No.
2.	Yes.
3.	No, although section 15 of the National Defence Act refers to the Canadian forces.
4.	The base commander.


QUEBEC-LAND GRANTS FOR PARKS
Mr. Duquet: Has the federal government, since 1960, been granted land by the government of the province of Quebec to be used for national parks or historic sites in the province of Quebec and, if so, where in the province and to commemorate what historic event?


Arthur Laing: Yes, in Quebec city relating to the development of the National Historic Park commemorating Jacques Cartier's wintering.
(Mr. Cadieux (Terrebonne).]
Classification Bangor class diesel Minesweeper Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate Prestonian class frigate


OROMOCTO, N.B.-BOARD OF COMMISSIONERS
Mr. MacRae: 1.	Have representations been received by the federal government from the government of the province of New Brunswick or any official thereof in connection with the provision of elected representatives to the Board of Commissioners of the town of Oromocto
2.	If so (a) on what date were they received (b) by whom were they made (c) what was the answer given to the province of New Brunswick by the federal government?


Léo Alphonse Joseph Cadieux: 1. Yes.
2. (a) June 6, 1963. (b) W. R. Duffle, Minister of Health and Welfare, (c) the then Associate Minister of National Defence, the Hon. Lucien Cardin, subsequently held discussions with the Premier of New Brunswick. No further action has been taken.


CHANDLER, P.Q., POST OFFICE REPAIRS
Mr. Keays: 1.	Were there any repair jobs done to the Chandler, Quebec post office during 1965?
2.	If so, (a) who were the tenderers (b) what were the amounts (c) who was awarded the contract?
3.	Does the Department of Public Works award contracts to registered employers only?


Hon. G. J. Mcllrailh (Minister of Public Works):: 1. Yes.
2.	A repair job was carried out at Chandler during 1965. This was emergency plumbing done by Alcide Bonthier at a cost of $165.92. Tenders were not obtained.
3.	No.


GROSS NATIONAL PRODUCT
Mr. Lalulippe: What was the amount of the gross national product (a) in current dollars (i) 1946 (ii) 1966 (b) in constant dollars (i) 1946 (ii) 1966?
December 19, 1966


Hon. Robert Winters (Minister of Trade and Commerce):: (a) and (b)
Gross National Product,
Millions of Current Dollars
1946	11,850
1965 (latest year
available)	51,996


SAINT-HYACINTHE, P.Q., RAILWAY TUNNEL
Mr. Ricard: What was the cost of the tunnel that was built under the Canadian National Railways in Saint-Hyacinthe?


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: Assuming that the question refers to the subway constructed at the crossing of the Canadian National Railways and Highway No. 9, Sir Wilfrid Laurier Highway, Saint-Hyacinthe, P.Q., the Board of Transport Commissioners for Canada advises as follows:
The total cost of constructing the subway was $583,238.89. The board authorized and paid from the Railway Grade Crossing Fund $466,591.11; $87,485.84 was paid by the Quebec Department of Roads and the Canadian National Railways paid $29,161.94.


CUMBERLAND COUNTY, N.S.,-GRADE SEPARATION STRUCTURE
Mr. Coates: 1.	Did the Department of Public Works receive a proposal from the government of the province of Nova Scotia for construction of grade-separation structure at the intersection of the Race Track Road in Cumberland county that would be part of the Trans-Canada Highway agreement with the province of Nova Scotia and, if so, what was the decision regarding this proposal?
2.	If a negative decision was reached, what was the reason for such a negative decision?


George James McIlraith: 1. A proposal was received, but it was not approved under the Trans-Canada Highway agreement.
2. Traffic on the Race Track Road is too light to satisfy the established criteria under the agreement.


FORTEAU-CHURCHILL FALLS ROAD CONSTRUCTION
Mr. Dionne: 1. What is the percentage of the federal government contribution for the construction of the road connecting Forteau with Churchill Falls?
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2.	How many employees are now involved in this project and how many aircraft are being used to transport men and materials?
3.	What is the estimated cost of building this road?


Julia Verlyn (Judy) LaMarsh: 1. The government has no knowledge of any road being constructed between Forteau and Churchill Falls and is obviously making no contribution to such a project.
2 and 3. See answer to part 1.


UNEMPLOYMENT INSURANCE FOR CANADIAN WORKERS IN U.S.
Mr. Dionne: Have further steps been taken by the government with the aim of concluding an agreement with United States authorities to make it possible for Canadian workers in the U.S.A., particularly in the states of Maine and New Hampshire, to receive unemployment insurance allowance and, if so, what are the results to date?


John Robert (Jack) Nicholson: No. Representatives of the government of Canada have made repeated efforts to arrive at such an agreement, especially with respect to Canadian workers employed in the states of Maine and New Hampshire. At the time of the most recent discussions those states made it clear that they were not willing to make such an agreement and this was reported to this house at the time.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Brand: 1.	How many and what kinds of aircraft at the airforce base at Saskatoon have been declared surplus to Crown Assets Disposal Corporation?
2.	How many have not been declared surplus?
3.	Have any of these been sold by Crown Assets Disposal Corporation and, if so (a) how many (b) what kinds (c) for what price (d) to whom?
4.	Were these aircraft sold by tender or in what manner?
5.	Were any Canadian firms or individuals refused permission to tender on the above aircraft?
6.	Are there any conditions attached to the sale of the aircraft in order to prevent them from being bought for military use?
Return tabled.
Canada Millions of Constant, 1949 Dollars 15,251
33,770
December 19, 1966

Inquiries of the Ministry BANKRUPTCY


PRUDENTIAL FINANCE CORPORATION-PAYMENTS TO COMPENSATE FOR LOSSES THROUGH COMPANY FAILURE
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, since this matter covers more than one department I should like to address my question to the Prime Minister. Whatever the division of responsibility between the federal and the provincial governments, will the government give consideration to making good the losses of investors in the insurance company and ensure that the 20,000 people who have purchased insurance will be protected by the transfer of their policies to other companies with the government on behalf of the people of Canada covering the expenses in that connection?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I have the greatest sympathy with the purpose behind the right hon. gentleman's question, as I am sure have all hon. members. We are looking into the implications of action of this kind and I certainly should like to study the situation before I give a considered reply, which I hope to do very very shortly.


DISCUSSIONS WITH PROVINCIAL MINISTERS TO ENSURE INSPECTION AND REGULATION OF FINANCE COMPANIES
[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: Mr. Speaker, my question is for the Minister of Finance. The minister on Friday told us that he had called the insurance companies together for a meeting, in particular to discuss the possibility of improving and closing loopholes in the legislation in their regard. I should like to ask the minister now whether, at the same time or at an early date, he would consider a similar process with regard to finance campanies incorporated under the laws of Canada. And simultaneously in that connection would he discuss with the provincial ministers as well, the question of tightening the loopholes in the operation of the laws relating to finance companies, with a view possibly to bringing them under an over-all umbrella of control in the form of inspections and regulations, possibly through some such device as the lender of last resort, or other measures which might be considered. Will the department look into this at the same time?


Mitchell William Sharp: Yes, Mr. Speaker. As I said, I am calling the insurance companies together to see whether

we can specifically improve federal regulations. I have also already called a meeting of my own departmental officials to look at the more general questions surrounding the adequacy of control that now exists in the general field of finance companies.
I took the opportunity this morning of talking to one of the Ontario ministers, Mr. Rowntree, to find out whether he would be interested in meeting with us. 1 do not know whether he spoke on behalf of his government, but he indicated he would be willing and very eager to hold such discussions.


Mr. Fulfon:: When the minister is making these urgent requests, may we understand that the scope of these conferences will be such as to include representatives of the provinces, as well as federally incorporated finance companies?


Mitchell William Sharp: Yes. My purpose in speaking to Mr. Rowntree of Ontario was to find out whether he would be interested personally in such discussions. I think he spoke for his government. If ministers of other provinces are like-minded, we will hold such a conference.


FINANCE
[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, I have a supplementary question which I should like to direct to the Prime Minister. It deals with the fact that on April 30, 1965 I asked this following question of the Minister of Finance:
Will the minister tell the house if the government intends to take any action on the Porter Commission recommendation concerning securities administration and control?
The answer given by the minister at that time, Hon. Walter L. Gordon, was that the matter was under study and had been for some time. In view of the circumstances of this past week, would the Prime Minister now give very urgent consideration to carrying out the recommendation of the Porter Commission dealing with the national securities commission, in co-operation with the provincial securities commissions, and also in co-operation with the S.E.C. in the United States.


Lester Bowles Pearson: Mr. Speaker, as my hon. friend knows the federal government has been looking into this matter since the day of that question, indeed,
December 19, 1968

before that. We set up a task force under a very competent and experienced lawyer who visited every provincial capital and discussed the problem with all the provincial governments. As a result of that discussion and the report which he made to the federal government, a federal-provincial conference was held which reached certain conclusions. It is hoped that these conclusions will result in legislative action, both federally and provincially, in order to deal with this very serious problem in a more efficient way in the future than perhaps has been possible in the past. As has been pointed out, action already has been taken at both levels of government and we hope before long to be in a position to announce what we will be able to do legislatively. We hope that the parliaments and governments of the provinces will be able to take similar effective action.


Francis Alvin George Hamilton: Mr. Speaker, would the Prime Minister also consider the obvious necessity of having some sort of understanding between our national securities commission in co-operation with the provinces, and also with the securities commission in the United States, because of the flow of securities and the necessity to maintain Canada's reputation in these fields at all times?


Lester Bowles Pearson: This is one aspect of the problem which undoubtedly will have to be considered, and which is being considered. It will require that kind of co-operation between the agencies of both countries, if this action is to be fully effective in our country.


Hon. George Hees (Northumberland):: Mr. Speaker, in view of the fact that this matter is becoming more urgent daily, could the Prime Minister give some indication of when we might expect some action? Some time in the future could mean that it might drag on for months and years.


Lester Bowles Pearson: Yes; it could drag on for months and years. As a matter of fact it had dragged on for many many years before the action which we began. I agree that action should be taken and not merely considered. We are in the process of drafting legislation ourselves, and we will be considering that legislation with the provincial governments as quickly as we possibly can. As a matter of fact there is a federal-provincial meeting in Ottawa today. The Minister of Finance was in attendance at this meeting this morning and will be returning this afternoon.

Inquiries of the Ministry LABOUR CONDITIONS


SYDNEY, N.S.-REQUEST FOR EMERGENCY MEASURES TO RELIEVE UNEMPLOYMENT IN STEEL INDUSTRY
[Stage Direction]
On the orders of the day:
David Lewis: Mr. Speaker, I have a question for the Minister of National Health and Welfare. I should like to ask him whether he has received a telegram from a citizens committee of Sydney, Nova Scotia, expressing great concern about the continuing unemployment resulting from the fact that 35 per cent of the Sydney steel plant work force is directly affected either by layoffs or wage reductions, and asking him and other members of the government to take emergency measures. If the minister has received that telegram, would he or one of his colleagues inform the house whether such emergency measures are being contemplated and what they are.


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, I have received such a telegram this morning and I have discussed by telephone with Mr. Na-thanson, who sent the telegram, the possibility of a meeting in order to discuss this problem at the earliest possible date.


John George Diefenbaker: Mr. Speaker, I should like to direct a supplementary question to the Minister of National Health and Welfare. According to the telegram to which reference has been made, 35 per cent of the working force at the Sydney plant has been directly affected by the lay-offs and wage reductions, and emergency action should be taken. Will the minister indicate what immediate action is being taken to meet the bleak future for the whole area of Cape Breton? Is it a fact that an agreement has been arrived at between the federal government and the province of Nova Scotia whereby some $50 million will be made available in the Cape Breton area over a period of years?


Mr. Speaker:: Order, please. Before the
Minister of National Health and Welfare answers the question let me say it should be obvious that when the original question was asked by the hon. member for York South, I took it for granted, perhaps erroneously, that the question had reference to action which might be taken by the minister in his capacity as minister of the department.

December 19, 1966
Inquiries of the Ministry
On other occasions I have ruled, rightly or wrongly, that a question of this type could not be referred to a minister in his capacity as a representative of a provincial region. I believe that ruling is supported by precedent. I will accept the question now posed by the right hon. Leader of the Opposition, if it has reference to the minister's responsibility in his official capacity.


John George Diefenbaker: Mr. Speaker, I asked the supplementary question without in any way endeavouring to evade the very sound ruling you have made in that connection. Let me direct this question to the Prime Minister, who is responsible for certain decisions in every department. In order that the Prime Minister will know what the question is, let me again ask him what emergency action is to be taken to meet what has been described in the telegram as a very bleak situation in Cape Breton. Has there been any arrangement entered into between the federal government and the provincial government of Nova Scotia whereby some $50 million will be made available to the Cape Breton area over a period of years?


Lester Bowles Pearson: In respect of the first part of the question, I shall discuss what emergency action has been or can be taken with the Minister of Labour and the Minister of Manpower and Immigration. Perhaps one of those ministers will be able to reply tomorrow.
In respect of the second part of the question, as was indicated in the house last week, we have been discussing with the government of Nova Scotia an agreement regarding a coal policy for Cape Breton. I hope that agreement has been almost completed. One or two points are still outstanding, but we hope to have them cleared up within the next day or so, after which I will be able to make what I hope to be a fairly comprehensive statement on this whole question.


John George Diefenbaker: Mr. Speaker, I have difficulty in knowing to which minister to direct these questions. The Minister of Labour is always willing to answer, so perhaps I should direct the question to him. I do not see the Minister of Manpower and Immigration in the house at this time, so perhaps by way of elimination the Minister of Labour gets the opportunity to tell the people of Cape Breton what is going to be done by way of emergency legislation activity to meet the problems faced by these people.
[Mr. Speaker.)


John Robert (Jack) Nicholson: Mr. Speaker, regrettably I cannot add much to what the Prime Minister has stated. It is a fact that my colleague the Minister of Manpower and Immigration, myself and two or three other colleagues have had discussions, and some of my colleagues have had talks with the province regarding this subject. We hope to be able to announce something tomorrow.


Mr. E. Nasserden (Rosthern):: I have a supplementary question. Will the Prime Minister discuss this matter with the Minister of National Health and Welfare as well? He really looks crestfallen.


Howard Russell MacEwan: I have a supplementary question for the Prime Minister, Mr. Speaker, arising from the reply he made to the Leader of the Official Opposition. If it has not already been done, will the Prime Minister, in respect of any agreement with the province of Nova Scotia take into consideration the DOSCO-owned mine in the constituency of Pictou, which will also require aid?


Lester Bowles Pearson: All relevant matters have been considered in relation to this very important question.


UNITED NATIONS
[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Will he indicate to the house what reply he has made to the action taken by the U.S.S.R. at the United Nations? I refer to the unwarranted attack made on Friday last by the U.S.S.R. against Canada in relation to her role in peace keeping, and the Canadian motion now before the United Nations which would make peace keeping and peace keeping financing more practical?


Paul Joseph James Martin: Mr. Speaker, the Canadian ambassador at the United Nations replied to the statements made by the Soviet Union representative regarding the Canadian peace keeping resolution. There was a motion this morning at the general assembly to postpone the vote until this afternoon. I do not know what the outcome will be.
December 19, 1966


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. Although the minister may already have taken some action, I should like to direct a question regarding the capsizing of the Cabot in the Montreal harbour on Friday, with a consequential loss of life to two men aboard that ship? Has the minister taken any action in respect of an inquiry into that accident?


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, this very unfortunate accident was under investigation by my department within a matter of a few hours of its occurrence. I am afraid that investigation has not reached the stage at which I could throw any light on the cause of the accident.


Frank Howard: I have a supplementary question. I presume the inquiry that is taking place is being conducted by an officer of the minister's department. Does he have any intention of directing a formal inquiry into this accident, which was very similar to another accident involving the Fort William?


John Whitney Pickersgill: Mr. Speaker, I think it would be wise to wait for the report of the first investigation before deciding to hold a second one.


NATIONAL DEFENCE
[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I have a question for the Minister of National Defence. In view of the serious reduction in personnel strength of the Canadian navy and the reduced number of ships now available for service, can the minister indicate what reduction in our NATO commitment was made by the minister at the recent NATO conference?


Hon. Paul Hellyer (Minister of National Defence):: No reduction was made, Mr. Speaker. My hon. friend will be pleased to know that the maritime commander expects we will be able to man all of our post-war destroyer escorts next summer. Let me again reassure my hon. friend that the capability of the Royal Canadian Navy, in so far as its 23033-7151
Inquiries of the Ministry primary role in the anti-submarine field is concerned, has never been higher.


Gordon Minto Churchill: A supplementary question, Mr. Speaker, which will give the minister the opportunity to make another bombastic reply. I am not talking about next summer. What is the state of the efficiency of the navy right now, in the personnel available and the number of ships available? Supposing an emergency arose immediately, what is the state of efficiency of the navy?


Mr. Speaker:: Order, please. I do not think the minister should be given the opportunity to make a bombastic reply.


Paul Theodore Hellyer: It would be a very short reply Mr. Speaker: Just "excellent".


Mr. J. M. Forrestall (Halifax):: Mr. Speaker, I wonder if the Minister of National Defence could advise the house whether that assurance, which is most welcome, about the manning of ships includes members of the reserve force, in order to make up the required complements?


Paul Theodore Hellyer: No, Mr. Speaker. But my hon. friend will be glad to know that in so far as our forward planning is concerned, we are trying to obtain more realistic co-ordination between the reserve forces of this country and the regular forces in being. I think this is just another indication of the kind of intelligent, forward planning of which the Department of National Defence is capable.


John George Diefenbaker: Where did you get the
intelligence?


Mr. Speaker:: Order, please. It seems to me that the questions now being asked are of a very general nature. Hon. members might have an opportunity to ask these questions when the national defence bill is before the house, perhaps before Christmas.


Some hon. Members:: Oh, oh.


UPWARD REVISION IN PAY SCALE OF RESERVES
[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a supplementary question for the Minister of National Defence. Has the decision been made to revise upwards the salaries of the reserve forces? The minister indicated some weeks ago that the matter was still under consideration.


Paul Theodore Hellyer: No, Mr. Speaker; but the whole question of the pay of the reserves is under

December 19, 1966
Inquiries of the Ministry review, in order to make it as realistic and effective as possible and to provide some incentive for those members of the reserves who have undergone training, as against those who are just entering. Once again, I think this is a forward step and reflects credit on the director of the reserve forces, who is doing an excellent job in this whole area.


REQUEST FOR CONTINUATION OF HYDROFOIL PROGRAM
Mr. Speaker:: Order, please. I would not think the question asked by the hon. member is in order at this time. The hon. member seemed intent on making representations and giving information rather than seeking information with his question.


George Harris Hees: With respect, Mr. Speaker, I am really seeking information. I think it is a most important question, and I believe the Prime Minister would like to answer it, if he were allowed to do so.
On the orders of the day:


Mr. Robert McCleave (Halifax):: Mr. Speaker, I wish to ask a specific supplementary question. Will the minister and his department continue the hydrofoil program?


Paul Theodore Hellyer: Mr. Speaker, it is being carried on for a number of weeks while we assess more precisely the extent of the damage caused by the fire. Certain parts of the repair process are proceeding in order to give us a clearer picture of exactly what is involved in time and cost, as well as the technological problems which may have developed from the fire. Once all that information is at hand, which will be a matter of about two months, we will be able to decide whether to proceed.


Howard Russell MacEwan: Mr. Speaker, following that question, I wonder whether the minister would reply to the question I placed on the order paper on November 8 regarding the hydrofoil. I refer to question
No. 2,166.


Paul Theodore Hellyer: I will be very pleased to do so, Mr. Speaker. I do not know exactly what the question is at the moment. I will look it up.


FINANCE
[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, I should like to address a question to the Prime Minister. In view of the announcement of the decision of the United States government to tighten its guide lines controlling the operation of all United States companies operating in other countries, has the Canadian government advised the government of the United States that we already have a trade deficit with that country of more than $1 billion, and that therefore there is no need to tighten those guide lines in this country?


Lester Bowles Pearson: Mr. Speaker, I was merely going to say that I appreciate the concern of my hon. friend in this matter. I heard him express this concern last night on a very interesting television program. In reply to his question, I would say that we have made the United States government aware of our interest and concern in this matter, not once but several times.


Mr. Nielsen:: You could not have been watching Mr. Gruber.


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskatoon):: Mr. Speaker,
I should like to direct a question to the Secretary of State. On October 7 I asked the hon. lady whether she would be prepared to table a copy of the Sheppard report. She stated at that time, as reported at page 8443 of Hansard, that this is a confidential report prepared for the office of the Secretary of State. She also said that if it was to be tabled, and that decision had not yet been made, it would not be soon. In view of the fact that the report has apparently been printed on page 25 of Saturday's Toronto Daily Star, would the Secretary of State now be prepared to let the house in on the rest of the contents of this most interesting report?


Julia Verlyn (Judy) LaMarsh: It is confidential, Mr. Speaker. Hon. members will just have to buy last Saturday's Star.


Lewis Mackenzie Brand: A supplementary question, Mr. Speaker. I think this is a very important matter. This report has obviously been released to the Toronto Daily Star. If it has been released to them and not the House of Commons, I think it is a breach of the privileges of this house.

December 19, 1966


Julia Verlyn (Judy) LaMarsh: I agree that it is a breach of privilege arising from some place, Mr. Speaker, but it was not done with the authority of my office.


Mr. R. W. Priltie (Burnaby-Richmond):: have a question for the Secretary of State, supplementary to one asked by the hon. member for Saskatoon concerning a report by Gordon Sheppard. X should like to ask the minister, now that the report has been at least partially revealed, whether she would consider tabling the rest of it so as to give some assistance to the committee on broadcasting when they are discussing the white paper on broadcasting?


Julia Verlyn (Judy) LaMarsh: This report concerns cultural affairs in the government generally. It has been sent to all agencies for consideration, but no response has been received from them as yet. The fact that someone has permitted this to be published without having authority to do so, notwithstanding the fact that the author has been paid, and the fact that there is a contract which gives ownership of the report to the government does not mean that the government will change its mind and hand the report to the committee before the government has had full opportunity to consider the report.


PUBLIC SERVICE
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the President of the Treasury Board? In view of the minister's personal commitment to br ng before the house a motion enlarging the terms of reference of the joint committee on the public service so that we might discuss the question of the pensions of retired civil servants, could that matter be attended to before we rise for the Christmas recess?


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: Mr. Speaker, I should like to congratulate this particular committee on how it is proceeding with the very important legislation before it. I can assure the hon. member that I will continue my battle to see that the matter to which he has referred is brought before the committee.
Inquiries of the Ministry


Stanley Howard Knowles: A supplementary question, Mr. Speaker. Is the minister aware that at least two of us in the committee have committed ourselves not to debate this motion in the house? In the light of that, will he bring it on soon?


Edgar John Benson: Mr. Speaker, I cannot answer with respect to commitments of hon. members; I can merely carry out what I have indicated I will try to carry out.


David Lewis: A supplementary question, Mr. Speaker. I think the house would be interested in knowing who the minister is battling to get this motion before the house. He said he would continue his battle. I would be very interested to know with whom.


Lester Bowles Pearson: The opposition.


Edgar John Benson: It is mainly a battle with the opposition, but time is involved.


Mr. Speaker:: Order, please. The minister would have to battle with the Chair to answer the question.


CRIMINAL CODE
[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I wish to address a question to the Minister of Justice. Having in mind the announcement over the week end by the Dominion Bureau of Statistics that there has been a 21 per cent increase in the death toll of Canadians in traffic accidents on our roads, will the minister give consideration to an early introduction of amendments to the Criminal Code aimed at reducing this death toll, which is now up to 588 a month?


Hon. Laden Cardin (Minister of Justice):: Mr. Speaker, as part of the general Criminal Code amendment program, particular consideration is being given to the problem of impaired driving with a view to reducing the serious hazard to life from this cause. No final decision has yet been reached. Of course the hon. member realizes that there are other aspects to the problem which must be taken into account.
The hon. member will also appreciate that a total or complete solution to the problem of traffic deaths in Canada does not lie within the realm of federal jurisdiction alone; but to the extent that we do have responsibility in this matter, every possible consideration is being given to the problem.

December 19, 1966
Inquiries of the Ministry FINANCE


REQUEST FOR REVIEW OF DECISION RESPECTING 3 PER CENT PERPETUAL BONDS
[Stage Direction]
On the orders of the day:
Mr. Lawrence Watson (Assiniboia):: Mr. Speaker, I had intended to address my question to the Minister of Finance. In his absence,
I would direct it to the Prime Minister. With the confidence of a large number of investors being replaced by a feeling of distrust of finance companies today, and in view of the uncertainty and resentment on the part of holders of Dominion of Canada 3 per cent perpetual bonds issued in 1936, will the minister review his decision and redeem this issue? It seems very unfair that the government should exercise an option in a manner that is so detrimental to such a large number of Canadians who invested in these bonds in 1936.


Mr. Speaker:: Order, please. I am sure the hon. member will appreciate that his question goes beyond the normal limits of a question. It was put more in the form of a representation, which I am sure the minister will take into consideration.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbiil (Oxford):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. In view of the fact that the government has recently been extending an olive branch to the People's Republic of China, can the minister offer any explanation as to why the Peking government has reportedly so abruptly snapped off the olive branch by refusing the Canadian Consul General in Hong Kong permission to visit the Peoples' Republic of China?


Paul Joseph James Martin: Mr. Speaker, I cannot give the answer. Of course, this is not the first time this has happened, but I would not think there was any necessary relation between the event and the fact referred to by my hon. friend.



TRANSPORT


[Stage Direction]
On the orders of the day:
Walter Gilbert Dinsdale: have a question for the Minister of Transport.
(Mr. Cardin.]
In view of the continuing uncertainty, could the minister assure the house that all applications for the abandonment of unprotected lines in western Canada will be processed under the provisions of the new act and the new board rather than the old act and the old board, as is the case with the current data being assembled by the Board of Transport Commissioners ?


John Whitney Pickersgill: I think the hon. member could do more than I to achieve that objective. No one can abide by a law which has not yet been passed.


Walter Gilbert Dinsdale: I have a supplementary question. The minister referred to an ambiguous reply the other day. I think the same can be said of his reply today. Will the processing of branch line abandonments be done under the terms of the new act when it is passed?


John Whitney Pickersgill: Sir, I think it would be a very useful subject for debate in about three quarters of an hour.


John George Diefenbaker: The minister is usually very helpful in his answers. This is a matter which affects many towns and villages in western Canada. Apparently the railway companies, or one of them, is proceeding as though parliament did not intend to act. In view of this, will tire minister not make representations to the railway companies to desist from their actions in giving public notice of the probable closure of railway lines, until this legislation is passed? Surely a representation like that, coming from one with the authority and prestige of the minister, would have some influence on the railway companies.


John Whitney Pickersgill: I think the right hon. gentleman, with his many other responsibilities, failed to read the answer I gave to the hon. member for Assiniboia. My answer last Friday was quite clear and precise, namely that the chairman of the Board of Transport Commissioners had assured me that none of these applications would be heard while the legislation was before parliament.
I think the question of what will be done when something-else is done is a hypothetical one which it might be appropriate to consider when we are debating the legislation but about which I could not possibly be expected to give a categorical answer on orders of the day, even when asked for in such a conciliatory way by the right hon. gentleman.


John George Diefenbaker: Apparently even the minister's unambiguous answer on Friday was
December 19, 1966
COMMONS DEBATES	11305
completely misunderstood. Did the minister receive a telegram from Fred Tully, executive secretary of the Branch Lines Association of Manitoba? After having read the clear statement, which the minister describes his statement as having been, I am still very gravely in doubt as to what it actually meant.


John Whitney Pickersgill: I do not know whether I received another telegram. I answered one on Saturday by letter. Evidently the hon. gentleman's mail deliveries are more rapid than mine.


Walter Gilbert Dinsdale: Can the minister make a very short reply to a very unambiguous question? Is the Board of Transport Commissioners still gathering data with a view to processing railway line abandonments?


John Whitney Pickersgill: I expect so, but the method by which the hearings will be held has not yet been determined.



THE SENATE


[Stage Direction]
On the orders of the day:
Mr. Speaker:: The hon. member for Shel-burne-Yarmouth-Clare has been waiting very patiently and now he may have the floor.


Mr. J. O. Bower (Shelburne-Yarmouih-Clare):: My question is directed to the Prime Minister. Although he has apparently indefinitely postponed making the appointment to the other place of the representative from Nova Scotia, I should like to ask him whether he intends still to give predominance to the French Acadian fact in making this appointment?


Mr. Speaker:: Order, please. I do not think that the question can be asked at this time, although if the hon. member feels that it is a matter of grave urgency he has a remedy; he might discuss it at ten o'clock.



WINTER WORKS


[Stage Direction]
On the orders of the day:
Mr. G. L. Chalierlon (Esquimalt-Saanich):: have a question for the Minister of Manpower and Immigration, but in his absence perhaps his parliamentary secretary can take it as notice. There is an impression among the municipalities that this is the last winter in which the municipal winter works program
Old Age Security Act Amendment will apply. Could the minister make a statement in the near future denying this, so as to allay the fears of the municipalities and assist them in their preparations for next year's budget?


John Robert (Jack) Nicholson: As acting minister, I will bring these representations to the attention of the Minister of Manpower and Immigration.



FISHERIES


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, before orders of the day are called I should like to direct a question to the Secretary of State for External Affairs and ask him whether he will be in a position to fulfil his commitment that the straight base lines will be proclaimed before the end of the year?


Paul Joseph James Martin: I doubt that I could assure my hon. friend that they will be proclaimed before the end of the year.



OLD AGE SECURITY ACT AMENDMENT


[Stage Direction]
The house resumed from Friday, December 16, consideration in committee of Bill No. C-251, to amend the Old Age Security Act-Mr. MacEachen-Mr. Batten in the chair.
On clause 3.
The Chairman:: Order, please. When the committee rose on Friday, December 16, an amendment to clause 3 proposed by the hon. member for Winnipeg North Centre was under consideration. The amendment reads as follows:
That clause 3 of Bill C-251 be amended by deleting from sub-section (1) of the new section 8 being enacted thereby, the words "minus one dollar for each two full dollars of his monthly base income, being one-twelfth of his income for the preceding year", as found in lines 1, 2, and 3 on page 3 of the bill.
The question is on the amendment. Is the committee ready for the question?


Mr. Rynard:: Mr. Chairman, I have a few words to say about the amendment. First of all, I should like to say that there is a growing tendency in the government for interdepartmental snooping. When I first came to the
11306	COMMONS
Old Age Security Act Amendment house it was a recognized fact, as I understood it, that no one was permitted to look into the returns of the Department of National Revenue.
[DOT] (4:20 p.m.)
No information was given out. Next, we had the social security number, and the suspicion grew that this was the opening of the door for snooping. Then, along came the Canada Pension Plan Act and the suspicion grew that it was necessary to have interdepartmental communication, it became a fact. Now, the government has gone a step farther. There must be communication between the officials administering old age security, or the guaranteed income, and the Department of National Revenue. If this trend continues, and the Minister of National Health and Welfare has to agree with it, we shall become completely state controlled in the too distant future. There will be no private life, everybody's business will be public knowledge. This, I say, is a downward path and is certainly invading privacy as it has never been invaded before.
Another thing bothering me, and this was brought out by the Minister of Transport, is that the old people will be paid 2 per cent extra for the rising cost of living per year or $1.50 per year. That is completely wrong on principle because everybody knows that food costs last year went up by 10 per cent and rents by 10 to 20 per cent. Giving them only 2 per cent or $1.50 is a disgraceful way to use our older people.
It means, Mr. Chairman, that in 1975 that 2 per cent base will remain the same over the year. One only has to think back to 1935 and compare the dollar of that day with the dollar of today to realize that that dollar only has one third of the value of the 1966 dollar. I am sure that can be verified by asking the Minister of Public Works who sat in the government at that time, I believe as secretary to the minister of trade and commerce. In one year alone, recently, inflation increased by 15 per cent. How, in all sincerity, can we ask the old people to accept 2 per cent, when many of them cannot work to help themselves. If they do work, they will be penalized. The minister will not grant them any benefit even though they earn low wages.
Another point bothers me, and if my arithmetic is not correct I ask the minister to look into it. The Minister of Transport the other night stated in the house that only 1 per cent of income tax returns needed checking, and that less than 1 per cent of the old people of
[Mr. Rynard.l
DEBATES	December 19, 1966
this country would put in false returns. The Minister of Health and Welfare also said in the house that on the average, 900,000 old people get $22 per month. If you take 1 per cent of that number you get 9,000 who might make false returns. If that is not correct, will the minister say so?


Allan Joseph MacEachen: Mr. Chairman, the $22 figure I mentioned was the average supplementation paid by provincial governments to recipients of old age security. This is the average benefit they received.


Philip Bernard Rynard: Then, Mr. Chairman, I shall not have to adjust my figures. Taking the figure at $22, and bearing in mind that 9,000 people will be dishonest-


John Whitney Pickersgill: I am sure the hon. gentleman will permit me to say a word.


Philip Bernard Rynard: On a point of order?


John Whitney Pickersgill: No, not on a point of order. I am sure the hon. gentleman did not want to take what I said in a figurative way as literal. He knows, as well as I know, that we cannot be certain how many old people will make mistakes. We do not know how many people will make false returns. All I was trying to say, in an exaggerated way, was that I believed most of my fellow citizens are honest, just as the hon. gentleman believes that.


Philip Bernard Rynard: Perhaps I was hewing to the line too closely, but I was just repeating the statement of the minister. If the minister was a trifle overgenerous in what he said perhaps he might be forgiven around Christmas time. At any rate, taking 1 per cent of the people, or 9,000 pensioners, the total cost comes to $2,367,000. Let me explain that.
You will have to pay snoopers to snoop -because this is snooping-into the private affairs of people who have always minded their own business. Some of these people had not much education. They had not the same chances as the Minister of National Health and Welfare or the Minister of Transport to obtain an education, many of them not attaining more than a grade 3 education. At today's wage levels the 400 full time civil servants at $7,000 each, needed to carry out investigations will cost $2,800,000. That figure does not provide for offices, cars or incidental expenses. Right there, we have a figure greater than that involved in the 1 per cent the Minister of Transport cited.
December 19, 1966
COMMONS DEBATES	11307
[DOT] (4:30 p.m.)
Let us go farther and take into account the 675 part time workers. If I understood the Minister of National Health and Welfare correctly, he said most of them would be employed at income tax time. I may be wrong, and if I am I hope I shall be told I am wrong. My opinion is that unless there is some collusion between the income tax department and the minister's department, these 675 employees will work a minimum of nine months in the year, because, as I read the relevant clause, applications must be in by the first day of October. If the part time workers are paid, say, $3,500 a year the cost would be $2,362,000. If my figures are correct, here you have an expenditure of $5,162,000 to bring about a check on overpayment of $2,367,000. Is something not wrong? Does this not show the minister that Parkinson's law will be in operation? We shall be getting more and more bureaucracy and building an empire at the expense of the poor old age pensioner. I resent this. I think the old age pensioner is getting a beating.
He is getting it on the 2 per cent increase in the cost of living which we have found over the years is much greater than that, and now we are beating the taxpayers of this country. Tonight we are to have a mini-budget, when all that was required was a little saving in departments which have spent so much money. Instead, the minister is coming here to tell us: we had to make these tax increases for the old age pensioners. But will he tell the house that the government is proposing to employ civil servants at a cost of over $5 million, not counting their cars and incidental expenses to save $2,367,000.
I hope I am not being too critical, but this is something which bothers me as a Canadian and as a member of this house, that we should just be doing these things carelessly while pretending they are being done for the benefit of poorer persons. Talk about a guaranteed income. This is just a poverty income. We are treating the old people of this country unjustly.
In many parts of Canada it costs between $125 and $150 a month to enable a single person to live. We are to employ a group of civil servants to administer this plan, yet the people who need the money have to resort to the Canada Assistance Plan for help. The government should have raised the pension to $100, fair and square, and then allowed the Canada Assistance Plan to operate through the provinces in cases of need. Instead, we have 23033-716
Old Age Security Act Amendment another group of civil servants imposed on the taxpayers and on the old people of this country. That is my criticism of this clause.


John George Diefenbaker: I do not wish to speak at length. I want to point out there are certain questions which the minister has left unanswered-questions which we asked earlier and to which no reply has been made. We are anxious to co-operate during the passage of this legislation, but we have a right to hear the answers to the questions which have been asked. I have in mind particularly a subject which has not been dealt with by the minister at all, that is, the way in which this bill in general, applying as it does a means test, will be applied in the province of Quebec. What are the plans in this regard?
The setting up of a separate scheme in the province of Quebec would mean the presence of two systems in Canada. Will this means test which is contemplated by the government apply in the province of Quebec in the event legislation is passed in that province? I see the Postmaster General is saying something. I do not know whether he is giving some information to the minister or not, but if he is I would be happy to have that information. Suppose the province of Quebec were to pass its own legislation,-and under section 94A it has that jurisdiction-how is this means test to be applied in that province? Any province which chooses to bring in legislation in this field would constitutionally have the right to do so. Certainly this was the view taken by Mr. Mackenzie King. I could deal at length with what he had to say in 1942 and 1943. His view was that the provinces had exclusive jurisdiction in this area. That jurisdiction has not been taken away by the agreement which was made between the federal government and the provinces when the amendment to which I referred some time ago, was passed. I want the minister to explain to us whether, if the province of Quebec passes legislation which does not contain a means test-call it what you will, an income test, a poverty test-this section will apply in the province of Quebec.
Will the legislature of that province, when it brings in such legislation, be able to secure a grant or a subsidy from the federal government to the extent that is required to provide the additional payment under this legislation? The minister has not dealt with this point at all. He felt the other day, no doubt, that this problem would be solved by the efflux of time.
11308	COMMONS
Old Age Security Act Amendment It has not solved itself in that way. The minister suavely smiles. He believes that is a substitute for information. But we cannot accept it as such, greatly though we appreciate being the recipients. We want to know how this scheme is going to work.
Let us place an example before the minister. The legislature of Quebec brings in legislation providing for a pension of $75 a month. As far as the initial amount is concerned, does the government of Canada intend to follow the course it has followed in other fields and make a subsidy available? If the legislation in the province of Quebec provides for a pension of $105, with a means test in respect to the extra $30, what will the government of Canada do? Will it pay to the province of Quebec a subsidy to cover the $30? The minister is bound to answer that question.
A moment ago there was a suggestion that this aspect might be ignored. It cannot be. The parliamentary secretary is a man of unusual capacity for language. I should like to hear him on this subject, because he must have given ad hoc consideration to the question. How will this means test be applied when the legislature of Quebec carries out the undertaking which was given in the speech from the throne? That is the first question, and it is one which must be answered.
We do not intend to end this debate before we get this information. We can conclude it quickly after consideration has been given to the amendment now before us, provided we are given this information. But we do not intend to give a blank cheque to the minister to spread around in whatever way he can manage through a diplomatic approach to any province.
[DOT] (4:40 p.m.)
We believe Quebec or any province has the right to enter the field of old age pensions. But when a province does so, what are the arrangements the minister contemplates bringing into effect in order to assure the operation of the plan?
I do not want to repeat what has already been said about this section, but it is a strange commentary on a government that when people, who invested in insurance companies and the like, could possibly have been forestalled in their wrongdoing, the government took the stand that the national revenue act prevented any revelations regarding income tax. That was a declaration based on the law. Why change it when the old people of this nation are involved? Why place them in a position where the government will apply to

DEBATES	December 19, 1966
them something it will not apply to those who are strong and powerful?
A moment ago the hon. member for Simcoe East said that we started on the downward path with the social security number. I was opposed to that security numbering. I did not want to be numbered. I have never taken out a security number because it can only be excused as being a step along the way to an autocratic state. I am one of those who have never taken the number. I have not got one, and the minister is in the same position.


Allan Joseph MacEachen: No.


John George Diefenbaker: Oh, he is numbered.


Allan Joseph MacEachen: You haven't got my number.


John George Diefenbaker: If you don't give that $25 million to Cape Breton your number will be up. Anyway, no matter what hon. members say, the old people of this nation are going to be subjected to examination by Peeping Toms who are going to do that which snoopers are always desirous of doing, namely, examining the income of other people. What will be the result? I have had many letters on this subject. I am sure hon. members supporting the government have had their share of letters condemning this plan. The Minister of Public Works indicates in the negative. Will none here in Ottawa be affected?


George James McIlraith: Mr. Chairman, I was not indicating anything about the right hon. gentleman's remarks. I was quite preoccupied with something else.


John George Diefenbaker: That was the general philosophy that built this country. Now, here is a lady who says, "I have pinched my pennies over the years to have a little set by for the time I achieved old age, and now I am going to be denied. My income will be about $5 more than the maximum fixed, and therefore I am to receive nothing."
She points out, without criticism, that people who came to Canada within the last 12 years, who did not contribute a lifetime of effort to this country, will be entitled to the additional amount of pension. She spent a lifetime doing her bit to build this nation, but she is denied the extra amount. That shows the unfairness of the plan. She has gone on to say, "To subject our old folks to a means test is degrading and I know many who would rather starve than go through it."
The government is dividing our senior citizens over 69 years into two groups, the haves and the have-nots. You can imagine pensioners meeting each other and asking each other, "Are you going to get it? Are you a have, or are you a have-not? " This thing is all wrong. The government is bringing into effect the widest possible snooper legislation ever placed on our statute books.
1 looked at the provision in the previous act, and it was the pathway to the highway of today. Surely, the government doesn't need this power. Surely it does not want to tramp on the right of a Canadian, a right that should be upheld at all costs, not to have his income tax returns examined for the purpose of ascertaining that the statements he made were the truth.
The government did not do that with the insurance company when it was going into bankruptcy. Today the Minister of Finance wrapped himself up in the garments of legalized purity and said, "We could not do that." Some 20,000 shareholders got cheated because of a government that did not act. Now, the old age pensioners are to be treated as second class citizens in order to qualify for the $30, or any portion of it.
The Liberal party used to stand for freedom for the individual. That was prior to 1940. Since then its members have followed another course. Since then they have developed the philosophy that, "After all, it does not really matter so long as it is efficient". Just yesterday I read the interesting memoirs of Chubby Power. I doubt if the hon. member for Verdun paid attention to the same section that I did, and which I found very interesting. I found his revelations regarding the conscription issue 23033-7165
Old Age Security Act Amendment very helpful to an understanding of what happened.
I just interpolate at this point that the Minister of Finance, who tonight will bring in the mini-budget to tax us although there is $400 million already on hand in the old age pension account, must have studied under the late hon. C. D. Howe.
[DOT] (4:50 p.m.)
We have a government with a bureaucratic mentality-efficiency rather than freedom; get it over. Let them snooze. Chubby Power was considering whether he would become a candidate in 1948 for the Liberal leadership. It is interesting that he was approached by Sir James Dunn of Algoma Steel to become a candidate. He said:
I stated further that the only thing that might induce me to accept the nomination would be if Howe were to be the directing force behind St. Laurent. In that event there would be no change for the better in party politics, as Howe had consistently disregarded parliamentary procedure, and apparently did not believe in a government responsible to the people through their representatives. Actually he favoured government by boards, committees, crown companies, and commissions, all headed or controlled by the same person: Howe.
Now, the Minister of Finance is an understudy. His attitude with regard to a powerful corporation engaged in skinning prospective investors is that you do not have their income tax returns looked into. But, when it comes to the old age pensioners, the bureaucratic mind comes to the fore, and we are asked to pass this legislation. I know, Mr. Chairman, that in your own province of Newfoundland that legislation would not go through, but we in parliament are asked to say to the government of Canada, "Here is a ticket for snoopers". What a field day it is going to be.
I have said enough to indicate that I am opposed to this clause. If there should be any misunderstanding, I wish to make that clear. Here we have a legion of Liberals who have come in dur.ng the last while to be ready for the vote and to be here to stand up for the principles of Liberalism. This clause is the embodiment of the tyrannical dictum to "line them up". Surely, you are not going to do that. You cannot get away with the explanation that you are doing it for their own good. You are doing it because so many in this government are former civil servants. You admit that only less that one per cent, under any circumstance will endeavour to mislead for the few dollars you anticipate might be saved by this procedure. I ask this house not to vote down the amendment which has been moved, but to support it.
11310	COMMONS
Old Age Security Act Amendment


Herman Maxwell Batten: Is the committee ready for the question?


Some hon. Members:: Question.
Amendment (Mr. Knowles) negatived: yeas 31; nays 62.


Edmund Davie Fulton: Mr. Chairman, before you dispose of this proposed section in clause 3 of the bill, and before we leave it, I should like to point out an apparent complete inconsistency which further supports the argument made by those who were opposing the inclusion of subparagraph (a). I should like to ask the minister whether he does not think this whole proposed section should be taken back for reconsideration and redrafting. The inconsistency I should like to point out arises when you look at subsection 4 of section 17 in clause 3 of the bill. You will note that subsection 4 provides:
Notwithstanding any other act or law, no officer or employee of Her Majesty shall be required, in connection with any legal proceedings, to give evidence relating to any information that is privileged under subsection (1) -
Now, what is the situation that we find here? We find that the minister is asking parliament to enact that in the courts of the land-and it is in the courts that the rights and obligations of citizens should be determined-no officer or employee shall give a breath of information, notwithstanding anything in any other act. In other words it will not be right to demand of the public service that they disclose information; that is the principle asserted here. And this is the same minister who in respect of the preceding proposed subsection, said that public servants within the government may pass confidential information back and forth between one another, at will, it order that privately, behind closed doors, they may determine the rights and obligations of citizens.
That is the situation. How can the minister, who says in respect of proposed subsection 3 that this confidential information can be passed back and forth behind the backs of the people, then say in respect of the next subsection that with regard to legal proceedings in Her Majesty's courts of Canada-in which courts by our tradition the rights and obligations of our citizens are determined-this information which they are so ready and so willing to make available to everyone for purposes of private snooping, cannot be produced?

DEBATES	December 19, 1966
[DOT] (5:00 p.m.)
How can the minister square these two completely irreconcilable and different principles? Unless and until he does, the whole new section should be opposed and should be sent back for redrafting.
I have some reservations as to whether or not this kind of information should be immune from production in court where one has the protection of the judge and the rules of evidence. These safeguards would make it certain that the information was not frivolously or improperly sought or produced. There may be some argument, however, that even under those circumstances it should not be produced. I would have to hear such argument, and think a good deal about it, before I would be convinced of the soundness of that proposition. But I have no doubt whatsoever about the complete inconsistency here between subsection (3) and subsection (4). This inconsistency makes the whole proposition intolerable and unacceptable. Has the minister no explanation? Has he nothing to say about the courts? Does he not care about the position of the courts in this regard?


Allan Joseph MacEachen: Mr. Chairman, subsection (4) is intended to remove a situation which has prevailed in the past. If the hon. member will turn to page 12 of the bill he will see that section 9 subsection (1) (d) provides that a person who discloses or communicates any information or evidence obtained under the act or the regulations, unless the disclosure or communication is necessary for the administration of the act or is required by law is guilty of an offence. In other words, members of the department who have received information under the Old Age Security Act for the purposes of administering the act are not entitled to disclose that information. On a number of occasions, one of the points at issue has been the whereabouts or location of individuals. Naturally there is a great deal of information available to the department in respect of the whereabouts of individuals who are receiving old age security or family allowance. Individuals write to the department asking us to indicate where such a person is. The attitude taken by the department is that this information cannot be disclosed.
Apparently officers of the department have been asked to go to court as witnesses and have by court order been obliged to disclose to the court the whereabouts of persons as derived from information which they have obtained for the purposes of administering the act. They have naturally been placed in a
December 19, 1966	COMMONS DEBATES
position of conflict because, on the one hand, the act says they cannot disclose that information, yet on the other hand the court orders them to do so. It is for purposes of clarifying that situation that section 17(4) is included.


James Ross Fulton: Mr. Chairman, the subsection goes far beyond what the minister has just said. There may be a type of case in respect of which information obtained as a result of a return under this act should not be subject to production in court. That does not mean that the whole area should be blanketed by one provision. That is the first inadequacy of the minister's explanation. The second is his complete failure to reconcile what I point out again is a most blatant discrepancy.
The minister would have parliament say on the one hand that not one tittle of information will be given to a court, no matter what the prejudices may be to an individual whose rights and obligations are on trial in that court, even though these individuals would be subject to the safeguards of the rules of evidence and the protection of the judge. In spite of that not one scintilla of information could be given to the courts to determine those rights. On the other hand, by the immediately preceding subsection, everything in a return can be made available as between departments for a secret determination, behind closed doors, of the rights and obligations and position of persons concerned. It is that irreconcilable difference that the minister has completely failed to explain.


Allan Joseph MacEachen: Mr. Chairman, it seems to me that because of the argument adopted by the hon. member for Kamloops he places himself in a contradictory position. He is objecting to the fact that the Department of National Health and Welfare may ask the Department of National Revenue to match certain income information which they have received. We are not asking for authority to examine income tax returns and no official of the Department of National Health and Welfare will ever see the income tax returns.


James Ross Fulton: Mr. Chairman, that is contrary to the terms of the provision we have just been discussing.


Allan Joseph MacEachen: All that is being sought is authority to permit the Minister of National Revenue to match information in respect of income. The procedure to be followed is simply one of a request to the department to match information we have received. It is not proposed that officials of my department will ever see the income tax returns.
Old Age Security Act Amendment


James Ross Fulton: May I just say to the minister-


Allan Joseph MacEachen: The hon. member for Kamloops is objecting to this very limited exchange of information between two departments, and he is now objecting to the fact that we are preventing officials from giving the courts information that we regard as privileged. This is a contradictory position, because the purpose of this subsection is to protect officials from giving information which the law prohibits them from giving by a literal understanding of the law.


James Ross Fulton: That is my objection. The minister need not worry about my position because there is no contradiction in it. There is a contradiction in his own position which he deliberately refuses to admit. He has now let the cat out of the bag. He has said that subsection (4) is to protect the officers of his department. That is what the minister just said.


Allan Joseph MacEachen: I said it was to protect the officials from being placed in a position of conflict.


James Ross Fulton: I think I heard the minister correctly. He just told us, by his own words, that subsection (4) is to protect his officials, not citizens, and protect them from the courts.


Allan Joseph MacEachen: To protect them from disclosing-


Edmund Davie Fulton: That is who the minister is protecting.


Allan Joseph MacEachen: -information that they are not entitled to disclose.
Mr- Fulion: He is protecting them from liability to an order of a court requiring them to give information. Surely, one place where information should be acceptable is in a properly constituted legal proceeding, because this is the proper method of determining the rights and obligations of the people. The minister has just told us that subsection (4) is included to protect officials from orders of the courts. That is a strange concern on the part of a minister of government, in view of the fact that the same concern is deliberately withheld from citizen taxpayers.
[DOT] (5:10 p.m.)


Allan Joseph MacEachen: Mr. Chairman, may I ask the hon. member a question?


James Ross Fulton: Perhaps I could finish, and I will be only a moment, exposing the extent of the minister's contradiction and the callous
11312	COMMONS
Old Age Security Act Amendment attitude of this bill. There is not contradiction in my position. I have said that, with some reservations, I think the provisions of subsection (4) are perhaps wrong. I have also just finished voting for the deletion of subsection (3), which I think is totally wrong. I ask the minister how he can justify the retention of subsection (3), which gives his department the right to obtain complete disclosure of all income tax material? This information can now be completely disclosed as between officials; his officials can rush in and snoop around the documents in the other department; or if they are in a hurry they can ask; "Can you give us complete information about the income tax return of so-and-so?" There is absolutely no protection of the taxpayer there.
The minister says that kind of disclosure is confined to very limited matters relating only to income and the source of income. This is not the case at all. The minister has not read the section. I ask him to read it with me. Subsection (a) says:
-the Minister of National Revenue or any person designated by him for the purpose may, upon the request of the minister-
That is the Minister of National Health and Welfare sitting opposite; our colleague in this committee.
__furnish to the minister or to any officer or
employee in the Department of National Health and Welfare designated by the minister for the purpose, any information obtained pursuant to any other act-
That includes the Income Tax Act.
-relating to the income or income from a particular source or sources of an applicant-
That refers to the applicant, but it is not confined to him.
-or beneficiary or the spouse of such applicant or beneficiary-
So, it applies to the spouse or beneficiary of such applicant. But note this:
-or otherwise relating to any such applicant, beneficiary or spouse, for any purpose relating to the administration of this act;-
Where in those words can the minister find the restrictive qualification about which he spoke? This subsection refers to actual income or sources of income-


Allan Joseph MacEachen: What I said is stated there clearly.


Edmund Davie Fulton: I direct the minister's attention, again, specifically to the words which I quoted last, from lines 2 to 5 at the top of page 10. I am sorry if his deputy minister did not bring

DEBATES	December 19, 1966
this to his attention, but the words are there. The information covered is not just concerned with the income of the applicant, his spouse or beneficiary; it is information "otherwise relating to any such applicant". It covers any information about the applicant contained in the return; such information can be disclosed to the minister or any official of his department.


Allan Joseph MacEachen: Does not that relate back to income?


Edmund Davie Fulton: Certainly not; not in my view nor in the view of my colleagues who are learned in the law. But, Mr. Chairman, let us not make too much of the point of how narrowly this information is restricted. In my view, it refers to information relating to anything covered in the return. All such information can be revealed. But the important point is that there is no protection of the taxpayer or the old age pensioner. The only protection afforded by this provision as proposed is protection of officials. Protection against what? Protection against an order of a court; an order which would in any event require that to give information for this purpose it must be established to be logical, legal, lawful and reasonable. What a use of the word "protection".
Apparently our words fall upon deaf ears, because the principles of Liberalism are now foreign to hon. gentlemen opposite. But those are the facts. This is a most ill-Liberal, inconsistent and repulsive section, and the whole thing should be defeated. It should be taken back, redrawn, scrapped and started all over again.


Allan Joseph MacEachen: Mr. Chairman, I merely wish to make one point in reply to what has been said by the hon. member for Kamloops. The point is simply that no information received by an official can be given out, either in court or outside of court, except with respect to the administration of this act. That is the point. The purpose, of course, is to protect the citizen.


John George Diefenbaker: How does that protect the citizen?


Allan Joseph MacEachen: It protects the citizen in the sense that information received in respect of the administration of the act could be given out freely in the absence of this section, and has been given out in court even though it was information acquired in connection with the act and not asked for in connection with the act. The purpose-and I am not arguing
December 19, 1966	COMMONS
with hon. gentlemen; I really want to make the point-is that no information, in accordance with this section, can be given either in court or outside of court unless it is information in connection with the administration of the act. If that is a bad feature, then hon. gentlemen can defeat it.


Mr. Baldwin:: The enforcement of the act, too.


Mr. Aiken:: Mr. Chairman, there is another point that disturbs me in connection with the section we have just been discussing. It is the fact that not only is the return of the applicant or beneficiary involved, but also his spouse or any other person whose return relates to such applicant or beneficiary or spouse. I maintain that this provision extends the permission to examine information in other persons' returns far beyond what has ever been allowed in other acts. This subsection is worded in a very broad manner, and the wording is:
-relating to the Income or income from a particular source or sources of an applicant or beneficiary or the spouse of such applicant or beneficiary or otherwise relating to any such applicant, beneficiary or spouse, for any purpose relating to the administration of this act;-
As I read this subsection, it would permit information to be given from the income tax returns of a spouse of the applicant where there may be no relationship between them financially or they may not even be living together.


Allan Joseph MacEachen: Would the hon. gentleman not consider that the final phrase, "for any purpose relating to the administration of this act", limits the purpose and extent of the information?


Gordon Harvey Aiken: How do you know whether it is going to relate to the act until you have looked at it? After you have looked at it, what difference does it make, because the information has been revealed?


Allan Joseph MacEachen: The Minister of National Revenue would not be permitted to give any other information.


Gordon Harvey Aiken: This provision says, "otherwise relating to any such applicant, beneficiary or spouse", which would cover any employer or employee of the applicant, his landlord, or his tenant if he were a landlord; it would cover the returns of any person with whom such individual had had any financial relations. The minister says it is purely for the purpose of this act. Those words are there. But what
Old Age Security Act Amendment happens when a person tries to establish in court his right to a supplement? The department has information Which he cannot get.


Allan Joseph MacEachen: Oh, yes. If it is an action in court with respect to this act, then of course this information could be produced.


Stanley Howard Knowles: The lawyers are confusing one another terribly.
[DOT] (5:20 p.m.)


Gordon Harvey Aiken: If that is related to this amendment I ask then how can the returns of the landlord, tenant, employer or employee of an applicant be brought before the court when the applicant himself cannot get this information? The department has knowledge which the applicant himself cannot get. For example, he cannot find out whether his landlord, tenant, employer or employee has filed a return which is consistent with what he knows or believes. Therefore, he has no way of preparing himself for his application, and yet this information is in the hands of the department.
This is where I believe the provision goes far beyond what we expected in permitting the return of the applicant to be revealed to various people. Unless I have misread the clause, it states that the return of a person relating to the applicant, a beneficiary or spouse, can be examined for the purpose of this act to find out what the financial relationship is. The minister says that this is done only for the purpose of this act. This may be true, but if this information relates in any way to the individuals involved, the departmental officials can say "we have to find out something about this man's wife and what she is earning so we will have to look at her employer's return".
This is what I am objecting to. I would like the minister to say whether I am wrong in assuming that these people are liable to have their income tax returns examined. For example, if I were employing someone who had applied for the supplement to the old age security pension could I assume that the Department of National Health and Welfare could go to the income tax people and say "I want to see what is being paid to this employee so may we have information on the employer's income tax return"? It will not be enough to obtain information regarding one person only. We want to know the whole payment rate because we want to see whether it is reasonable and consistent."
I would hate to see this provision used to have my income tax returns hauled out of a
11314	COMMONS
Old Age Security Act Amendment file in the Income Tax Department and information contained in them provided to the Department of National Health and Welfare. I would like to be certain as to what information would be provided. The minister says that this will be done only for the purpose of this act. Can he tell us where the line will be drawn and what extracts can be taken out?
Will only information regarding one person be supplied or will the whole employment record be turned over? Who is to make the decision? I wonder how much information will be revealed for the purpose of this act.
As the hon. member for Simcoe East has said, this is an extension of the provision. We made objections to the cross-checking of information under other acts. This bill seems to go much further than other acts and it is expanded to include other persons than the applicant himself.


Allan Joseph MacEachen: Mr. Chairman, all that the Department of National Health and Welfare will want to do is to cross-check the information of the Department of National Revenue. The most likely procedure to be followed would be for the officials in the Department of National Health and Welfare to ask the Department of National Revenue to tell them whether the information which they have is correct and whether it matches with information which that department has. Sometimes mistakes are made. We do not intend to have any income tax forms in our department and we do not intend to have any employees of the Department of National Health and Welfare looking at these forms.
All we want to do is to verify the information provided to us with respect to information which is available on income tax returns. The other day we were told by the hon. member for Winnipeg South Centre that information with respect to a pensioner who does not file income tax may be available on his employer's form. This is all we have in mind in this proposal with respect to the purposes of this act. This is all that is involved here.


Gordon Harvey Aiken: May I ask the minister whether anyone from his department will be located in the income tax branch to examine and extract information from the income tax returns?


Allan Joseph MacEachen: No, Mr. Chairman, this is not the proposed procedure. According to the proposed procedure we will ask the Department of National Revenue to tell us whether such and such information is accurate by way of an exchange of correspondence.


Stanley Howard Knowles: What is the difference?

DEBATES	December 19, 1966


Allan Joseph MacEachen: The difference is that employees of the Department of National Health and Welfare will not be examining income tax returns in the Department of National Revenue. All that the Department of National Health and Welfare will have is limited information with respect to income telling us whether the information which we have is correct.


Stanley Howard Knowles: The officials of the Department of National Revenue will be examining income tax forms for the purpose of assisting the Department of National Health and Welfare to check on the correctness of the applications. What is the difference?


Allan Joseph MacEachen: We would agree with the editorial which appeared in this morning's Gazette that if the whole income tax system is offensive we should do away with it, but it does not seem to me that an additional problem is involved in permitting the same officials who are acquainted with the forms to look at them for this reason.


Mr. Barnett:: Mr. Chairman, a few moments ago before the minister spoke I tried to catch your eye for the purpose of suggesting to the minister that if the bill had said what he has just finished saying, we might have avoided a rather extensive discussion both before and since the amendment moved by the hon. member for Winnipeg North Centre was voted upon. The minister has made a statement of intention concerning what he has in mind with regard to supplying certain information. In effect, the Department of National Revenue will tell his officials whether or not a statement contained in an application for the supplement is correct.
I agree that this might be reasonable under the terms of the bill, and under the system which the minister is proposing, but I submit that this is not what the bill says. We have been told many times in the house that we cannot rely upon the statements of intention given to us by the ministers while a bill is under discussion. We have to go by what the bill says. The bill says that the Department of National Revenue can disclose to officials of the Department of National Health and Welfare all the information about the income, sources etc., of people who may be applying for this supplement.
[DOT] (5:30 p.m.)
If the bill had said that when the minister and his officials get an application they think is not quite correct they could send it over to the Department of National Revenue for the
December 19, 1966	COMMONS
officials to see whether it is correct, then the minister could inform the applicant that the Department of National Revenue states his application is not correct and until the department is satisfied he will not qualify for the supplement, that would have been reasonable. One might accept that as a reasonable proposal within the general framework of the minister's bill.
That is not what the clause says. If the minister intends it to be that way, why does he not bring in a bill saying that? Why does he not leave out all these details of income, etc. which are to be available from the Department of National Revenue people to the Department of National Health and Welfare.
We have listened to many lectures from many ministers at various times over the years about the sacredness of the information in the hands of the Minister of National Revenue and his officials. Some of us have been sold on this idea to an extent that may prove embarrassing to this minister. Why should he unnecessarily depart from that principle? If all the minister wants is to be able to check whether an application is correct and then to be able to inform the applicant about this, why is all this necessary?


Allan Joseph MacEachen: There is no reason to have any further information so far as the administration of this program is concerned. That is the purpose of this clause, to empower the Minister of National Revenue to supply information about the accuracy of information we get. As you will notice, minor differences of up to $24 in certain categories would not be material. And, if the Department of National Revenue says, "There is a singiflcant variation, or a difference here" we would write to the applicant and say, "You have made a mistake. What is wrong? Would you like to reconcile this?"
We think this is a reasonable request and that is the purpose of the clause. I do not think anything I have said is inconsistent with this authority sought in this part of the bill.


Gerald William Baldwin: I have spent a great number of years representing people when the crown has exercised rights which different acts gave it. I point out to the minister that under subclause 4 there is nothing to stop the income tax return itself from being introduced as evidence. Subclause 4 reads:
Notwithstanding any other act or law, no officer or employee of Her Majesty shall be required, in connection with any legal proceedings, to give evidence relating to any information that is
Old Age Security Act Amendment
privileged under subsection (1)-or to produce any statement or other writing containing any such information.
Subclause 5 goes on to say that so far as the proceedings concerned with the administration or enforcement with this act are concerned, subclause 4 does not apply. In my interpretation, if subclause 4 does not apply, then that does not apply to information with regard to various matters referred to in paragraph (a). Gone is the prohibition against producing a writing containing information. What other writing contains the information here referred to than an income tax return? This is a possibility. Granted, we hope that the right conferred by this part of the bill may not be exercised. On the other hand, taking these words in their common, ordinary interpretation, they give an officer of the department the right of being called as a witness in court and in testimony producing writing which contains the information in question. No longer shall people be covered by the cloak of protection surrounding income tax returns.


James Ross Fulton: This is what concerns me also. The protection is gone if the government is prosecuting, if it is enforcing this legislation. Then the officials can produce any information they wish, including the income tax return. But, for a private citizen seeking to establish his rights, the cloak of secrecy is on, because officials must be protected to use the ministers' words.


Allan Joseph MacEachen: The officials of the Department of National Health and Welfare will not produce income tax returns because they will not have them.


Thomas Speakman Barnett: That is not what the act says.


Edmund Davie Fulton: That is the point I just dealt with.


Mr. Crouse:: Did I understand correctly that these provisions, are to enable the national health and welfare authorities to check with the authorities in the income tax department on applications made? Does this mean that every application, for example, will be checked with the income tax department? If that is so, surely the income tax department will require an additional number of people. Also, it seems to me that having breached the security of the Income Tax Act, primarily for the purpose of this act, there is nothing to stop the government from taking similar action in future to find out about returns being filed by citizens of Canada.
December 19, 1966

Old Age Security Act Amendment
The truth is, and this is my view, that our income tax returns are no longer the confidential documents they have been in the past.
My question to the minister is this: how many of these applications will be checked? Will you take a spot check of so many applications or will you only check those which have been improperly filled in, ones you feel are attempts to make false representations to secure funds? What will your yardstick be before going to the income tax department and asking for a person's income tax return to be made available to your department so that your officials can make a comparison.


Allan Joseph MacEachen: Mr. Chairman, we shall not ask for an income tax return to be made available to the Department of National Health and Welfare. If there is any reason to believe that a form is mistakenly filled out, then we shall ask the information to be checked. I think the normal procedure would be to conduct a sample or cross check, as recommended by the Senate committee.


Edmund Davie Fulton: In my humble submission there is nothing in this act to limit its operations in the way the minister suggests. In paragraph (a) the Minister of National Revenue may make information available to the Department of National Health and Welfare relating to any applicant:
-beneficiary or spouse, for any purpose relating to the administration of this act-
There is nothing in that subparagraph or subsection which says that the Minister of National Health and Welfare cannot get from the Minister of National Revenue a copy of an income tax return for the purpose of making available the information that is sought. Furthermore subsection 5 says:
Subsections (1) and (4) do not apply in respect of proceedings relating to the administration or enforcement of this act.
As I said a moment ago, it is intolerable that if the department is prosecuting in proceedings relating to the enforcement of the act the information, so to speak, is home free.
[DOT] (5:40 p.m.)
Then the officials can talk to their hearts' content, but when private citizens are involved the veil of silence falls.
However, leaving that point aside, I submit that in any proceedings for the enforcement of this Act the obvious way for the minister to establish the point which the department is trying to maintain would be to produce an income tax return at variance with a return


filed under this legislation. How could a court be convinced that there was documentary evidence to the contrary unless the department produced an authenticated copy of the document itself? The framing of the legislation invites the production of the return when the department is prosecuting, and there is nothing here which would limit or prohibit production in such case. If the intention is that the complete income tax return should not be shown to the minister or to his officials, but only information extracted therefrom, then in my submission the legislation does not say so. Over the course of time, it invites those developments which I have in mind whenever the department, in the process of administration on enforcement decides it will go to court and produce the evidence at its disposal.


Allan Joseph MacEachen: I appreciate the comments which have been made by the hon. member for Kamloops. I can only repeat the statement I have made about the procedure contemplated. The Department of National Health and Welfare does not propose to have income tax returns at its disposal. Not having the advantage of a legal training that the hon. member for Kamloops and the hon. member for Peace River have enjoyed,-


Stanley Howard Knowles: Is that an advantage?


Allan Joseph MacEachen: -I would think that the expression "for any purpose relating to the administration of this Act" limits the information which the Minister of National Revenue could make available. He could only make available information relating to the purposes of this Act.


Edmund Davie Fulton: Would the minister look at subclause (5) in that connection? Subclauses (1) and (4) do not apply. In other words, the limitations are removed in respect to proceedings relating to the enforcement of this Act. So, whatever restrictions there may be are lifted when it comes to administration or enforcement.


Stanley Howard Knowles: Then what does the clause say?


Edmund Davie Fulton: I think the proper procedure would be to request that this proposed section 17 stand while the minister considers with his officials the introduction of words in the bill Which would embody the limitations which he himself has stated to be in contemplation, so that the measure may reflect the practice which he says will be followed. I suggest that consideration be given to whether one or two
December 19, 1966

of the subclauses might not be reworded so as to carry into statute law the expression of intention which the minister has given us.


Allan Joseph MacEachen: A moment ago the hon. member for Kamloops argued that this information should be available to the courts. Now, he has changed his mind and is suggesting that it should not be. He has turned a full circle.


James Ross Fulton: Let us not move into the area of semantics. I have said only that if there are to be restrictions on disclosures, they should be complete. I have objected to limitations being placed on disclosure when a citizen who wants the information for the purpose of protecting his rights in court asks for access to it, but full right of disclosure being given to government for purposes of administration and enforcement. But it is obvious that the minister does not intend to remove the limitation in the interest of the citizen. Again, I have won the argument, though we would probably lose the vote if a vote were taken on the point.
But now, I am asking the minister to look at the other side of his own argument. He says that the complete information available in income tax returns will not be disclosed to him or his officials even for the purpose of enforcing that Act. I am asking him to write that into law, because there is nothing in the law as it now stands to prevent that happening. Indeed, the lifting of the limitation when it comes to enforcing the act invites the disclosure and production of the whole income tax file.


Allan Joseph MacEachen: I would argue that we are limited. The Minister of National Revenue can only give information to us which is necessary for the administration of the Old Age Security Act. He cannot go beyond that. I would argue that the Income Tax Act does not permit the minister to make the form available to another department. It follows that the document would never be in our possession or in the possession of officials for the purpose of prosecution.


Gerald William Baldwin: I am compelled reluctantly to disagree with the minister. Let me remind him of subclause (3) which says "notwithstanding any other act or law-". We come down to the question of enforcement. Unless countermanded in this bill, the rules of evidence are that the best evidence must be given and I have no doubt that any judge would tell an official who appeared before him

Old Age Security Act Amendment and attempted to give hearsay evidence as to the contents of a document, that the document itself should be produced.
The rule is that the best evidence must be produced, and it appears to me that under certain conditions the rule would only be satisfied by the production in writing of the document on the basis of which the enforcement proceedings were begun. The minister has told us what his intentions are. In the circumstances, it would be simple to insert a subclause here to the effect that it is the intention that no income tax returns shall be available for use in court at any time. It would be a simple clause giving effect to the protestations the minister has made. This would set at rest the very real fears which have been expressed on this side of the house.


Gordon Harvey Aiken: I should like to put a direct question to the minister in connection with the administration of the act. Let us suppose that the income of an applicant is questioned. Let us suppose that the spouse of an applicant has given information concerning her income. Let us also suppose that the applicant and the spouse dispute the information which is in the possession of the investigating officer. In such a case, I would assume, the officer interviewing the applicant would say: "You say you only got $300 last year, but your employer says you got $500." The applicant says: "That is not true; I do not believe what you are telling me."
Is it not to be expected that at this point the applicant would go to his wife's employer and say: "I got this information from the man at the national health and welfare office. He has your income tax returns and he say that you paid more than I said."
[DOT] (5:50 p.m.)
What is the employer going to feel about the confidentiality of his income tax return if some person who has worked for him casually for a few weeks during summer comes to him and says, "I have been told your income tax return shows certain things. I got this from an investigating officer of the Department of National Health and Welfare, and he has the information on his file"? It seems to me there is both a legal and practical implication here, and I cannot think of anything worse respecting the confidentiality of income tax returns. This is a practical example of what could happen.
The broadness of the words proposed, "relating to any applicant, beneficiary or spouse" could extend the provision into other

December 19, 1966
Old Age Security Act Amendment areas such as the relationship between landlord and tenant, or any other financial relationship with any other person who files an income tax return. If the minister's intention is to keep the information limited within the department, then let the new section clearly say so. This is the only basis upon which we could reasonably accept the wide wording of this subsection which would appear to allow income tax information to enter the hands of any local investigating officer.
I am sure there would be no point in saying that the information will be revealed only to somebody in Ottawa, because the information will be passed to the local investigating officer, in Vancouver, Parry Sound, or anywhere else, who will be dealing with the individual applicant. I think the wording is much too broad and much too loose, and I support the arguments that have been made that the bill should have a definite provision stating how far the Department of National Revenue can go in providing information.


Gordon Minto Churchill: Mr. Chairman, I think sufficient information has now been supplied to the minister to show the weakness of the proposed section. The suggestion that the section be stood and an attempt made to redraw it, is sound. I like the proposal put forward by the hon. member for Comox-Alberni, suggesting that instead of the Department of National Revenue providing information to the Department of National Health and Welfare, the Department of National Health and Welfare should submit the information supplied it by an applicant to the Department of National Revenue, with a simple request asking whether the information is accurate or inacccurate. If the information is inaccurate then the applicant would be obliged to furnish the Department of National Health and Welfare with a better statement.
This would avoid disclosure of income tax returns, which is what hon. members are objecting to, and would keep inviolate the requirement pertaining to income tax information. Despite what the minister may intend, there is a loophole in the proposed section as it now reads, which might be taken advantage of by someone. Our purpose is to put the bill in such a form that it will not have to be modified within 12 months, and that it will not permit people to take advantage of some omission on our part. The suggestion made by the hon. member for Comox-Alberni might well meet the objections that have been raised from other quarters in the chamber.

As I understand the minister, all he wants to know is whether an applicant is giving correct information with regard to his income. If we are correct in our assumption that a very small percentage of people will give inaccurate information, perhaps a few deliberately and some by inadvertence or error, then why open up the Income Tax Act and the secrecy surrounding returns? The minister's purpose would be accomplished by a simple answer from the Department of National Revenue.


Edmund Davie Fulton: The minister appears to be determined to ignore the reasonable request that the final three subclauses stand. As an alternative, and not to put the minister on the spot, may I suggest that we rise for two hours during what is normally the dinner recess so as to allow him to consider the matter?


Allan Joseph MacEachen: I have listened very carefully to the representations made by members of the committee, and I have listened to the hon. member for Comox-Alberni who, I know, understands the procedure which I am recommending in this connection. The first point to be made is that the Minister of National Revenue makes information available on the request of the Minister of National Health and Welfare. The Minister of National Health and Welfare must ask the Minister of National Revenue for information relating to the income, or income from a particular source or sources, of an applicant.


Edmund Davie Fulton: Any person designated by you could make that request.


Allan Joseph MacEachen: It is upon the request of the minister, and naturally we know officials are designated to act for ministers, but the information sought is related to the income "for any purpose relating to the administration of this act". The Income Tax Act would prohibit the Minister of National Revenue making the full income tax form available to the Minister of National Health and Welfare, or any of his officials. He could not do that because there is information on the income tax return which is much broader than information required for the "administration of this act."
I think we are agreed as to the procedure to be followed, and I do not see any better way of reflecting this in the law. I have explained to the committee the procedure we propose to follow. It is precisely the procedure as described by the hon. member for Comox-Alberni and the hon. member for Winnipeg
December 19, 1966

South Centre. We will say to the Department of National Revenue, "You tell us if this is accurate." If it is not accurate, if there are significant differences then we will have to ask the applicant for further information.


Gordon Minto Churchill: The minister has ended up on the right note but he did not start that way. The minister started by saying his officials would ask the Department of National Revenue to give information with regard to the income of the applicant. That is wider than what is suggested by the hon. member for Comox-Alberni and by myself. What we have suggested is that the minister, or his officials, submit the statement of the applicant to the Department of National Revenue and ask the simple question, "Is the income statement on this form accurate or inaccurate"? They should stop at that point.
[DOT] (6:00 p.m.)


Allan Joseph MacEachen: Well, this is precisely the procedure which we propose to follow. We will submit the information and ask whether it is accurate. Naturally, if it is inaccurate, the department will tell us and we will have to obtain more information.


Edmund Davie Fulton: That is the reverse of what the bill says.


The Deputy Chairman:: Order. Perhaps at this time the Chair might be permitted to give the questions to be asked on the adjournment debate.

It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be debated at the time of adjournment tonight are as follows: The hon. member for Lapointe (Mr. Gregoire), shipping-use of Russian icebreaker in St. Lawrence River; the hon. member for Renfrew North (Mr. Hopkins), public works-Pembroke, Ont.-wharf facilities; the hon. member for Lotbiniere (Mr. Choquette), administration of justice-amendments to Criminal Code and Canada Evidence Act with respect to prisoners' confessions.


Stanley Howard Knowles: Mr. Chairman, I had in mind asking whether we were going to have any time off for supper, but I see the Minister of Transport in his place and he is never interested in things like that.


Thomas Speakman Barnett: Invite him to leave the house, and then come back to your question.
Old Age Security Act Amendment


Stanley Howard Knowles: I will return to this matter later. May I ask the Minister of National Health and Welfare what the plans of the department are at the inauguration of the supplementary payment? As I see it, in the months of January, February and March the department possibly will receive three quarters of a million applications for the supplement. With respect to how many of these does the department intend to check the information from the Department of National Revenue and on what basis will these cases be picked up?


Allan Joseph MacEachen: Mr. Chairman, I dealt with this question earlier in reply to a question raised by the hon. member for Queens-Lunenburg. I am quite satisfied that the main procedure will be to conduct a sample check of these forms, unless there is some apparent reason that the forms should be verified. This is the procedure which has been recommended by the Senate committee; that is, that sample checks be conducted. This is the main procedure which will have to be followed. We do not propose to send every form to the Department of National Revenue for verification. We will do it on a sampling basis.


Stanley Howard Knowles: In other words, it will just be made clear to the applicants that any particular application may be sent over to the Department of National Revenue for a check.


Allan Joseph MacEachen: I think it will be a good idea to make that clear to the applicant.


Mr. Leboe:: Mr. Chairman, it seems that it is going a bit far to start sampling when you do not have an idea there is anything wrong. I think that if the applicant files a return and there is nothing in it which suggest there is anything wrong you should not take this discriminatory action. This is something to which I object in respect of other forms of legislation. It is an act of discrimination when merely because somebody's name turns up in a hat a check is made of that individual's form. In this case, the individual is put through the wringer while dozens are going scotfree. I do not think this is a proper procedure at all. Surely, there must be a better way in which to find out whether or not there is anything wrong. I think that in looking at an application the individual dealing with it should have a question in his mind about it before he does any checking.


Robert Jardine McCleave: Mr. Chairman, the hon. member for Winnipeg North Centre suggested that I make a try for the supper break. I
Old Age Security Act Amendment should like to do so even though the Minister of Transport shakes his head. That is not unusual conduct on the part of the Minister of Transport.
The point I wish to make is that by suggesting the sampling of a certain number of applications the minister is opening the way for a game of Russian roullette with the problems of our old people. It seems to me that the danger in respect of these proposed sections is that they open the way for spiteful letters to be written by people who do not sign their names. These letters might be written to a department indicating that some old age pensioner is not entitled to receive the supplementary benefit. I think by this action the minister is opening up a Pandora's box of every type of imaginable evil. I hope he will consider the very good suggestion made here in respect of amendments to proposed section 17 which were presented by those who have taken part in this debate.
I seem to recall an occasion, under the former administration, when a court held that an income tax return was compellable evidence and the Minister of National Revenue of that day immediately caused an amendment to be made to the law to see that the complete umbrella of privilege was given to the income tax return. I commend that course to the Minister of National Health and Welfare. I should like also to point out that if these 500 people who are hired full time to look into these returns wish to keep themselves occupied, surely they are going to have to write to an equivalent number of civil servants in the Department of National Revenue who will haul out these returns and give the answers. Not only will we have the direct proliferation of 500 full time civil servants plus the part time civil servants in the Department of National Health and Welfare-what an empire builder the minister could become-but in the Department of National Revenue, not for empire building but for the sake of preserving the department's sanity, hundreds of civil servants would have to be hired to answer these questions.
It is easier to ask these questions than it is to answer them, so the net result may be that for every new employee hired by the Department of National Health and Welfare you would have to have two new civil servants appointed by the Department of National Revenue. I think the minister should be persuaded to allow us a supper break while he looks into the points I and other members of the committee have made this afternoon.

December 13, 1966


Horace Andrew (Bud) Olson: Could the minister give us some explanation in respect of the handling of these applications from those people who feel they made available through the post offices? Will the provincial welfare departments assist in filling them out in the initial stages, or will the applicants have to wait until there is a federal staff in the field which can take the applications from those people who feel they may be qualified? How is it going to be done? Perhaps information in this regard would assist members of the committee a little in trying to evaluate all the ramifications which will be involved in getting the applications back to the department in as accurate a form as possible.
[DOT] (6:10 p.m.)
Perhaps the vast majority of those who will be eligible will have their applications approved in time to receive their payments toward the end of March.


Allan Joseph MacEachen: We propose to send out application forms to all old age pensioners so they will be able to fill them out and return them as quickly as possible. My hope is that the bulk of the cheques will go out in March, with perhaps a few going out in April, but that situation may in fact be reversed. I have no authority until this bill is passed to have these application forms printed, and that will take some time. After this bill is passed, we will get the forms printed and mailed out as quickly as possible. We think most old age pensioners will be able to fill them out quickly and send them back. We will process them as soon as possible.


Horace Andrew (Bud) Olson: Is the minister now saying that these forms will not be as complex as the income tax forms, for example? In some cases I presume there will be some complexity in calculating net income, particularly on the part of those pensioners who have property investments of one kind or another. In some cases the senior citizens will have to deduct the expenses involved in administering their property, in which case these application forms may be as complex as income tax returns. The minister knows, as does the Minister of National Revenue, that most citizens in Canada who have a complex income structure cannot fill out income tax forms by themselves but go to lawyers, public accountants and chartered accountants for assistance.
Perhaps the minister could explain to the committee how a senior citizen who has an involved income structure will be able to arrive at a net income in some way more

December 19, 1966

simple than that required in respect of income tax forms. Does the minister have some other basis of calculating income in mind in so far as applications for supplements are concerned which would be significantly different from the method required under the Income Tax Act.
The Income Tax Act is very complex, and while there are reasons for that complexity perhaps the minister can tell us how this process of arriving at net income is to be simplified for these applicants for the supplement?


Allan Joseph MacEachen: The proposed form is to be much more simple than the regular income tax form. If there are pensioners with complicated income structures, then they must be filling out income tax returns and are aware of the complexities involved. I believe the number of pensioners with complicated problems such as those suggested will be small. We will give every possible assistance through the income tax offices and district pension offices. That is the way we hope to proceed.


Horace Andrew (Bud) Olson: Let me pursue this subject a little further by asking one more question. I cannot agree with the minister's suggestion that all those pensioners who have complex income structures are now filing income tax returns. It is possible to have a complex income structure without receiving sufficient income requiring you to file an income tax return. Only those people who have a taxable income after claiming their personal exemptions are required to file an income tax return.
Some senior citizens may have small property holdings which do not return a sufficient net income to be taxable. It seems to me that in fairness we should apply the same laws in arriving at net income in order that our senior citizens may obtain the benefit of supplements. They should be allowed to make the same deductions from their gross income as they are in arriving at net income for the purposes of taxation. Many of these senior citizens are not familiar with deductions and exemptions. Their net incomes may have been worked out over the years by the national revenue department. With all deference to the minister, I cannot accept his suggestion that senior citizens who have complex income structures necessarily file income tax forms.


David Lewis: Mr. Chairman, I do not intend to speak on the matter before us, but I should like to make a serious appeal to the ministers present that we have a break for dinner. I am reminded that the hon. Minister of Transport

Old Age Security Act Amendment and I attended what was called a hunger lunch earlier today. We ate little and learned much. We are expecting the budget to be brought down at eight o'clock, which may be a little tough to take on an empty stomach. In all seriousness it seems to me we would not be wasting our time by taking a break. On the contrary, we may actually save time.


John Whitney Pickersgill: Mr. Chairman, the hours of sitting are prescribed. We hope, too, to have a recess for a longer period of time and not just for those purposes suggested by the hon. gentleman. It is not the intention of the government to call any other item of business this afternoon once the item of business before the house now is concluded. If this bill can be passed, I would then ask the committee to rise to take a break for the necessary purpose so eloquently referred to by the hon. gentleman.


Gordon Minto Churchill: Mr. Chairman, we are constantly being subjected to specious types of blackmail. We are always faced with the suggestion that we can take a supper break if we agree to certain things.


John Whitney Pickersgill: Mr. Chairman, I rise on a question of privilege. I think the hon. gentleman on reflection will regret the use of that word. Perhaps he was not present in the committee last Friday, when at three thirty in the afternoon, his colleague the hon. member for Ontario indicated that the members of his party had completed their discussion of the bill in committee and thought that it should be dealt with in about half an hour. I do not know what circumstances have arisen to change that situation, but we have not objected to the time that has been spent on this bill. We agree it is one of the most important pieces of legislation we have ever had before us. I think if we used the time prescribed by the rules to get on with this business and pass this legislation, we would be assisting the Minister of National Health and Welfare in getting these application forms printed in order that the measure can be carried out.


Gordon Minto Churchill: Mr. Chairman, I have no regret about my use of the word "blackmail" and I use it again. I was present last Friday during committee proceedings. We were prepared at that time to go ahead, but circumstances changed between then and later as they have changed now. I was also here on Thursday night when the Minister of Transport tried to practice some of his well known trickery on the house. I say, following what was said by the hon. member for York South, that we are being subjected to blackmail in
11322	COMMONS
Old Age Security Act Amendment this house because of various things the government wants to do. Yet we have worked all year, and faithfully, and sat through luncheon hours and dinner hours to accomplish our purpose.
[DOT] (6:20 p.m.)
However, Mr. Chairman, now we are told that if we do not do this we will not have a supper break, or we may have to stay later before Christmas or come back earlier after the new year. This is the type of thing to which I object. We are here on serious business, and the serious business before us right now is trying to get this bill put into the shape in which it should be, in order to meet valid objections that have been raised by responsible members in the house. What surprises me is that the Minister of National Health and Welfare will not yield, when the point has been impressed upon him time and time again, and make the necessary adjustment.
Let me repeat our point. The secrecy of the Income Tax Act is being affected by this intrusion if the bill. All we are asking is that we retain the secrecy of the Income Tax Act and not try to modify it through other bills that may be passed by this house. In order to bring the matter to a head, Mr. Chairman, I propose the following amendment:
That section 17, subsection (3) (a) be modified as follows:
That all the words after the word "purpose" in line 46, page 9, be struck out and the following substituted therefor: "a report as to the accuracy of the information concerning income submitted by the applicant."
Then the section would read as follows:
(3) Notwithstanding any other act or law,
(a) the Minister of National Revenue or any person designated by him for the purpose may, upon the request of the minister furnish to the minister or to any officer or employee in the Department of National Health and Welfare designated by the minister for the purpose, a report as to the accuracy of the information concerning income submitted by the applicant.
I send this amendment up to you, sir. I move it, seconded by the hon. member for Ontario. I suggest that if this wording is not satisfactory to the law officers of the crown, it can be modified so that it will stand up under scrutiny. The intent and purpose as expressed by the minister himself is contained in the suggested amendment. There will be no intrusion on the secrecy of income tax returns. It is not a question of the officials of the Department of National Health and Welfare asking the Department of National Revenue to give them the figures on income tax returns of an applicant; it is the other way around. The

DEBATES	December 19, 1966
Department of National Health and Welfare submits the figures given by the applicant in disclosing his income for the purposes of this act, and the Department of National Revenue, without showing any form of giving any additional information or anything of that nature, or disclosing the secrecy of the information they have at their disposal, simply replies, "the information is accurate" or, "It is inaccurate". I suppose they would have to expand upon the last statement and say, "There is a lack of disclosure of further income". Then, the onus of proof rests on the applicant to show that he has disclosed his full income.
There is no need then for any search of additional questions by the Department of National Health and Welfare of the Department of National Revenue. The income tax return then stays as it is now, not open to any one at all. The Minister of Finance twice, last week and again today, mentioned the fact that under the act of that department they are prohibited-these are the words he used today-from forwarding information to any other department or authority. It is rather interesting that on Friday the Minister of Finance used words similar to that and again today he used those words, just as if he were somehow indirectly attempting to influence the Minister of National Health and Welfare with regard to this section in the bill. I am sure the Minister of Finance and the Minister of National Revenue could not agree on this provision because it is opening the door to what has been secret in the past with regard to income tax returns.
I would, therefore, suggest that amendment, sir, or an amendment that can be fixed up by the law officers of the crown so that it will not be misunderstood by anybody. I drafted the amendment hastily here, of course; but I repeat that it shows the intent that the minister himself disclosed this afternoon.


John Whitney Pickersgill: Mr. Chairman, I wonder whether while the minister is being given a minute to consider this amendment I might humiliate myself a little, and perhaps in doing so restore some good humour that may temporarily have gone from the committee. I was told years ago that one should never apologize and never explain. I never thought that was a very good principle; I have tried to apologize every time I thought there was any real ground for doing so. I have taken the things that have been said about me, and what happened the other day, in as good a part as I could without any attempt to make any reply. But I do hope that hon. members,
December 19, 1966	COMMONS
whatever they may have said publicly, do not really feel that what they said was quite justified. I may have acted in a foolish fashion, I may have acted in a tactless fashion, but I did honestly think I was following the rules. No one had ever told me there had been an arrangement of the sort that my hon. friend the Minister of Public Works told me about when he came in that evening.
I readily and immediately agreed that if I had made that kind of mistake, it ought to be repaired. I just want to say that, Mr. Chairman, because although I really do not particularly relish having to say this, it happens to be the truth.


Gordon Minto Churchill: Mr. Chairman, what the Minister of Transport has said is a fair statement. I fully believe that he was acting within what he considered to be the rules of the house the other evening. Frankly, I did not say it to his face but I told my colleagues that he was just being quite alert and politically smart, in the proper sense of the term. But we have had a full explanation now of what was intended during the course of the year, so we will absolve the minister from anything with regard to what some people would call skulduggery. However, we will keep a very close watch on him in the future. If he really wants to be in the proper Christmas spirit and help everybody out, I hope he will immediately get in touch with Air Canada and find out whether they are supplying as many flights to the maritimes and western Canada as they are to Florida and places like that. Some of us would like to know whether we will be able to get home for Christmas.


John Whitney Pickersgill: Mr. Chairman, I think hon. members on the other side of the house are more particularly interested in this information and it is desirable that they receive it. I will do my best to help to facilitate arrangements of that kind, and I will do it very happily. My hon. friend the Minister of National Health and Welfare is considering the amendment, and it has been suggested to me that he would like to further consider the suggestion made by the hon. member for Winnipeg South Centre.
[DOT] (6:30 p.m.)
Perhaps we could allow this new section to stand and proceed to consideration of the next one.


Herman Maxwell Batten: Order, please. Perhaps for the benefit of members of the committee I
Old Age Security Act Amendment should read the amendment moved by the hon. member for Winnipeg South Centre:
That section 17, subsection (3) (a) be modified as follows:
That all the words after the word "purpose" in line 46, page 9, be struck out and the following substituted therefor: "a report as to the accuracy of the information concerning income submitted by the applicant."


Allan Joseph MacEachen: Mr. Chairman, I should like to have an opportunity to consider this amendment and especially to ensure that it is put in proper legal form. I do not know whether members of the committee have any further problems with respect to the remaining clause in the bill. Perhaps we could move on to that clause and dispose of it. We could then recess and deal with the clause now before us at 7.45.


Thomas Speakman Barnett: I think the suggestion just made by the minister might very well appeal to hon. members in all parts of the committee. However, while the committee appears to be in this mood, I would like to take a moment to sing the praises of the hon. member for Winnipeg South Centre, something which perhaps does not happen every day of the week from this particular quarter of the house. I appreciate very much the fact that he has taken the trouble to draft in amendment form a suggestion which I put before the minister previously. I certainly agree that the drafting of this particular amendment should be carefully considered. It appears to me that this might be a situation where the hon. member for Winnipeg South Centre, the Minister of National Health and Welfare and I might be close together and we could come to a very happy accommodation on the point which has been the subject of considerable discussion.


Allan Joseph MacEachen: As far as I am concerned, the general intent of the amendment is acceptable. I want to make sure of what the report covers, that is if it does not check we want to have more information than just the fact that it does not check. We also want to provide for the necessity of acquiring information on the income of the spouse in the case of a joint application for married couples under the act.
I would be quite happy to agree to an amendment that would call for a report from the Department of National Revenue instead of income tax returns which I never intended to have anyway. I am very anxious to see the next clause passed before we adjourn and then to come back at 7.45 to consideration of the amendment before us. I do not think there
11324	COMMONS
Old Age Security Act Amendment is anything very difficult in the next clause. It has to do with regulations which affect what has been passed already.


Stanley Howard Knowles: I think this suggestion is not unreasonable. It is my impression that we may not be very long on the next clause on which I have one or two comments. However,
I wonder whether instead of coming back at a quarter to eight we could not do so later tonight, after the budget speech and the remarks from the hon. member for Perth. If we come back at a quarter to eight and do not complete our consideration of the bill then the Minister of Finance will be frustrated and we would not want to be the cause of that.


Bert Raymond Leboe: Mr. Chairman, we have no objection at all to the amendment. We think it covers the point I was trying to make a while ago because under the bill we are asking for a comparison and a statement if the information of the Department of National Revenue does not agree with that which is supplied by the applicant. This satisfies the point I was trying to make.


Gordon Minto Churchill: May I say one more word? The hon. member for Peace River and the Leader of the Opposition raised a constitutional issue on Friday and again today to which the minister has not yet given an answer. Will we have an answer with regard to this matter before this bill is passed because this is one of the stumbling blocks at present?


Allan Joseph MacEachen: I will be glad to make some comments on that before the bill is completed. I am sure there will be an opportunity for that during third reading of the bill.


Herman Maxwell Batten: Does the committee agree to stand new section 17, which of course means that the whole of clause 3 will stand, and to proceed to a discussion of clause 4?


Some hon. Members:: Agreed.
On clause 4.


Stanley Howard Knowles: Mr. Chairman, I have a brief word to say with particular reference to the new section 18 being enacted by clause 4, and more particularly with reference to sub paragraph (a), which has to do with the application forms which pensioners will be required to complete in order to receive the supplement. The minister has told us that this is a very simple form, but that he cannot let us see it in advance.

DEBATES	December 19, 1966
Perhaps I should not be so suspicious just six days before Christmas but I have a gnawing notion that when we see this form, and the explanations which will be given to the people on how to fill it out, we will find it not to be as simple as the minister assures us it is. I think he should be more precise. He must have some idea of what will be in this form. I think he should read the terms of it to us. I do not think it would be proper for him to insist that he does not know what is in it because he is a member of the Liberal party and I received today the Bulletin of the Liberal Federation of Canada dated December 1966 which deals with the guaranteed income plan. It is a very interesting document. My chief quarrel with it is that the document ends with a preposition, but I have a few other things to say about it as well. The following sentence appears in the middle of one paragraph:
If the bill is approved before the Christmas recess a simple form will be mailed to all recipients of old age assistance-
I believe the Liberal Federation made a mistake. It should read "old age security". It then goes on:
-in their January cheque envelopes. All the information that this form requests is the gross income of the pensioner in the previous year, this same information is provided by the pensioner each year on his income tax return, and the only purpose of the form is to calculate the amount of extra benefit the pensioner is entitled to.
I ask the minister to take note of the tense of that sentence. It reads: "All the information that this form requests is". Apparently the Liberal Federation of Canada, located at 251 Cooper Street, Ottawa, has seen the form. If the Liberal Federation has seen it and knows what is in it, why should not parliament have it too?


Allan Joseph MacEachen: I assure my hon. friend that the Liberal Federation has not seen the form and if it had, the commentary would have been somewhat different. I think the form is quite simple, maybe that is because I am a bit simple minded. It is simpler than the income tax form.


Robert Jardine McCleave: Anything is simpler than that.
[DOT] (6:40 p.m.)


Allan Joseph MacEachen: The applicant will be
asked to list his sources of income. There will be several categories as reminders; there will be earnings, interest and so on. Other information will be asked with respect to age, date of birth, marital status and if they want to take one of the retirement options in the bill.
December 19, 1966

They will have a chance to place a tick in the appropriate spot and we shall send out a form to them. The sources of income are listed. There are eight sources and above that there is an indication of what not to regard as income along the lines I described to the house. I think that is it.


Stanley Howard Knowles: It sounds as if the minister is looking at a copy of the form. If he has got one he should let parliament have it. What he said in the last few minutes shows it is not as simple as he says or as the Liberal Federation insists. If there are all these categories of what is and what is not income, and if the calculation of income as defined in the new section 9 and the statement as set out in new section 10 are included in the form, I am afraid the pensioners will find themselves with quite a job when it comes to filling out this form.
A moment ago the minister said he was a simple minded person. I wish he were simple minded enough to realize that it would be far better if we did not have this test at all. What we should have is just a straight addition of $30 a month to the old age security payment.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: And do you know what, Mr. Chairman? I think the minister agrees with us.


Bert Raymond Leboe: Can the minister tell us whether the figures on the form are to be net figures after taking into account depreciation on such things that may be needed to bring about a net figure? Will depreciation, and so on, be considered? Will you be asking for net figures?


Allan Joseph MacEachen: Yes, Mr. Chairman. Of course we should require net figures. I think there has been an excessive desire to make the subject look complicated. Undoubtedly, there will be a small number of pensioners who will have a complicated financial picture. I suggest that some of those are already fami-lar with filing income tax returns and would not be bewildered. If there are pensioners with complicated problems, they can get assistance from the income tax department, from the district pension office or, perhaps, from members of parliament.
For the great bulk of them, it will be a simple operation. For a small group, there may be complications but they can get help.


Bert Raymond Leboe: These figures then are to be net figures, no matter if there are complications?

Old Age Security Act Amendment If the pensioners are to put down figures on the application form those figures will be what they consider net figures, I take it?


Allan Joseph MacEachen: That is right.


Stanley Howard Knowles: Mr. Chairman, I had to pass on my Liberal Federation bulletin; there seems to be a great deal of interest in it. But may I ask the minister whether the Liberal Federation was correct in the statement that these forms would be mailed out to our old age pensioners with the January cheque?


Allan Joseph MacEachen: It depends-and I am very timid about making this comment because I do not want it to be thought that I am trying to push the committee faster than it wants to go-on when the bill is passed. I would give authority to get these forms printed then. It takes a number of weeks to get them printed because of printing schedules. It will be January or possibly February before we can get them out.


Stanley Howard Knowles: It seems to me that the minister should make an effort to get the forms out sooner than that.


Allan Joseph MacEachen: We did make that effort.


Stanley Howard Knowles: Granted that it will take time to process the forms, but if we ask these people to fill out something they should have a chance of having it before them. They should have a chance to fill out the forms.


Allan Joseph MacEachen: I agree with my hon. friend. I have been trying to accelerate the printing. The moment parliament passes the bill the printing will get under way as quickly as possible.


Thomas Speakman Barnett: Perhaps the minister might get a little help from the hon. member for Winnipeg North Centre who, at some time, was a printer. Perhaps, he could help with the forms.


Stanley Howard Knowles: It would be an awfully simple form if I printed it.


Thomas Speakman Barnett: I wish to ask a question of the minister arising from the new proposed section 18 which has to do, as I understand, with a re-enactment of the section in the Old Age Security Act providing for authority to make regulations on the part of the governor in council.
Up until now the only questions involved in old age security administration, so far as qualifications are concerned, have been age
11326	COMMONS
Old Age Security Act Amendment and residence. I have already spoken of those. This bill does, of course, open up other considerations which have been discussed at great length. Before posing my question, I should like to remind the minister of a statement he made to be found at page 11266 of Hansard of last Friday. Hansard records this:


Allan Joseph MacEachen: In calculating the supplement payable to a married person the idea is to take into account the combined income of a married couple. This part provides for the case where a married pensioner has an unmarried spouse-


Stanley Howard Knowles: An unmarried spouse?
The question I wish to ask the minister is, what about the case of the unmarried pensioner who has an unmarried spouse? The minister will recall that in certain other legislation, such as veterans' legislation, there is in fact provision made for this kind of situation, what is commonly referred to as a common law marriage. I ask the minister whether there is any arrangement within the redrafting of the regulations providing benefits where a pensioner has a spouse who has not been legally or formally put into the position of being a spouse. I do not want to get into a lengthy discussion but it seems to me that this situation might properly be taken care of under regulations without having it set out in great detail in the bill itself.
I again remind the minister that this situation has been dealt with by parliament in certain other related legislation. I particularly refer to legislation affecting war veterans' pensions. I hope to get some sort of answer from the minister to the question I posed.
[DOT] (6:50 p.m.)


Robert Jardine McCleave: The minister may wish to wait a few moments while advice comes to him from the gallery where, no doubt, his officials are.
Since we are close to rising for supper, perhaps I may make a suggestion to the minister. Admittedly, it has to do with proposed section 21. This is the last suggestion for an amendment that the official opposition would like to make with regard to this bill. If the committee is agreeable, I could proceed to make a short speech outlining it now. If not,
I will wait until later.
I take it that the committee is agreeable. The danger about 21 (1) (c) is that summary conviction proceedings may be used against any person who had received overpayments or who had wrongly received benefit. Under new section 20, such a person is required to return the amount of the overpayment or benefit. But under the paragraph I have just

DEBATES	December 19, 1966
mentioned, criminal action could be taken. I make this brief point: the courts of this land are most unwilling that criminal processes should be used to recover civil debts. By putting these words in the bill a heavy club is placed over the heads of the people who might, in all innocence, have been unable to fill out the form correctly.
These people might think they are entitled to benefit when they applied and then, after they had received it, it would turn out that they were not. Ordinarily, under the criminal law, mens rea or criminal intent would be a factor. But this is not so under 21 (1) (c) which deals with a simple failure to return an overpayment. A person might not be in a position to do so. He might have received the money without there being a criminal thought in his head. Yet, he can be brought before a magistrate's court.
I realize the minister may say this is precisely the same procedure as that which now exists in connection with old age security legislation. But I do not believe it is the same. I can see that under old age security legislation if a person fraudulently gives an incorrect age as a means of obtaining benefit to which he is not entitled, that person should be punished. But in the present case the mistakes which arise will, more likely, be errors of judgment. For this reason, I suggest that either 21 (1) (c) be removed from the bill or, if the minister wishes to keep this paragraph, the word "fraudulently" be placed in front of it so that there must be evidence of criminal intent before any action can succeed in the courts.


Allan Joseph MacEachen: The answer to the hon.
member for Comox-Alberni is that the case he has mentioned is provided for inasmuch as an applicant may in this case apply as a single person, if he so wishes, or as a married person.


Edward Nasserden: I should like to support the argument put forward by the hon. member for Halifax with regard to the provision to which he was referring. A number of cases have come to my attention concerning people who find themselves in difficulties after receiving supplementary assistance under the Old Age Security Act. An estimate is made of their income during the year. Then, after the year has gone by, it is found the amount was $12 or $14 or $25 higher than had been estimated. The department then rules that they were not eligible for any assistance at all, and they are charged with the entire amount of benefit they have received. In most cases, the money
December 19, 1966	COMMONS
has been spent and there is no way in which the money can be recovered. I understand that in fact the department deducts if from pension cheques in succeeding months. Nevertheless, much hardship is caused to these old people. In many cases, it appears to me that the situation is brought about by whoever in the department had determined that a certain figure would be a fair estimate of the income of the person concerned. Surely there is no need to include in the bill a provision as harsh as this one seems to be.


Robert Jardine McCleave: I understand that the minister will be studying my suggestion with his legal advisers during the supper period. My suggestion is that the word "fraudulently" be inserted, but if the minister can think of some better term we should be interested to hear what he has in mind. The hon. gentleman will understand our concern about using a criminal action in order to follow up what is essentially a civil wrong.


Mr. Regimbal:: We have been objecting strongly to the "snooping" aspect of this legislation. Here, we have a good example of the way in which these things can build up and spread. The minister has suggested that some of these pensioners might be able to count on the assistance of friends or relatives when filling out these forms-that they could, perhaps, consult a relation or a member of parliament. Does not this imply that those who help in this way may have to hire "snoopers" to find out whether pensioners are telling the truth or not?


Allan Joseph MacEachen: Has the hon. member never helped an old age pensioner to fill out a form? I certainly have.


Roger E. Régimbal: But this is brand new. We are not familiar with these forms. What control has one over the information which is given. If misleading information is given, do these helpers become accomplices? When there is snooping, one thing leads to another.


Allan Joseph MacEachen: With regard to the point raised by the hon. member for Halifax (Mr. McCleave). What was he referring to?


Robert Jardine McCleave: It was 21 (1) (c) on page 12.


Allan Joseph MacEachen: I do not understand the point. We provide for refunds in the case of overpayment.


Robert Jardine McCleave: I am not objecting to the principle of recovery. That, of course, involves a civil action and under new section 20 the
Old Age Security Act Amendment minister clearly has the right to proceed for recovery of overpayments. I am objecting to this additional club which is being placed over people's heads inasmuch as they can now be taken into court under a process of summary conviction, found guilty and either fined or sentenced to a jail term for failing to return the amount of the overpayment.
My point is that the criminal courts are reluctant to be used as a means of recovering civil debts. The second point is that it would be simple enough for a person to make a mistake when determining income, for example, and find himself the recipient of a few extra dollars each month. Eventually, the department catches up with the mistake. Not only is action taken for recovery of the money, but there is a threat of action in the courts, and the danger is that a perfectly innocent person, with no intention to defraud, would find himself treated as a criminal.
[DOT] (7:00 p.m.)
Therefore I suggest to the minister and his officials that they use some word such as "fraudulently" so that the element of criminal intent is clearly brought in. Then, if somebody sets out to defraud the treasury of Canada of even a few dollars, he will be punished. I have no brief for any pensioner who engages in fraud. My brief is for the person who can fall into error, who can make a mistake in arithmetic and suddenly finds himself threatened with criminal action.


Stanley Howard Knowles: Mr. Chairman, in support of the point that the hon. member for Halifax is making, is it not enough, except in cases of fraud, that the government has the power to recover by withholding what is owing from future cheques? Most people who are going be affected by this legislation, whether they are pensioners or beneficiaries of pensioners, are going to be the recipients of government cheques-old age pensions or what have you. So I repeat my question, is it not enough that the money be recovered by retaining payments out of future cheques except in cases of fraud? Is that not what the hon. member for Halifax is asking?


John Whitney Pickersgill: The words are there now.


Allan Joseph MacEachen: We are merely re-enacting what is in the law now. It applies to a person who knowingly makes a false or misleading statement.


Stanley Howard Knowles: But "knowingly" does not apply to (c), only to (a).
December 19, 1966

Old Age Security Act Amendment


Allan Joseph MacEachen: It reads:
-being the payee thereof-fails to return a cheque or the amount thereof-
There is no semicolon there.


Stanley Howard Knowles: But, Mr. Chairman, the "knowingly" is in paragraph (a) and I submit therefore applies only to paragraph (a). If it were intended that the word "knowingly" was to apply to paragraphs (a), (b), (c) and (d), it would be in the top line after the phrase "every person who."


Robert Jardine McCleave: The minister makes the error that all these are combined in one offence. Paragraphs (a), (b), (c) and (d) contain four separate offences.


Stanley Howard Knowles: I suggest that the minister might look at this over the supper half hour, which we might yet get.


Allan Joseph MacEachen: Mr. Chairman, maybe it is because I have been in the committee so long that I do not understand the point of the complaint that is made. Persumably the hon. gentleman is referring to a pensioner who, by accident, receives an overpayment-


Robert Jardine McCleave: Yes, that is it.


Allan Joseph MacEachen: -and has not done so knowingly. Then, of course, it is up to the department, and it is only in case of absolute fraud that the department has ever taken any action. It has only been very rarely that it has taken such action.


John George Diefenbaker: If that is so, why not
provide so?


Allan Joseph MacEachen: Only a few very rare cases have been brought to my attention since I became minister where it would be essential to prosecute because of obvious fraud. However, we would be glad to take another look at this language over the dinner recess.


Stanley Howard Knowles: Has the government not got protection under the Criminal Code in case of obvious fraud? Where there are overpayments the government has the authority, under section 20, to recover them in various ways. The Financial Administration Act gives power to recover. Where there is fraud the provisions of the Criminal Code would apply.


Bert Raymond Leboe: I think the hon. member for Winnipeg North Centre has suggested the answer when he referred to putting the word "knowingly" in line 20 after the phrase "Every person who."


Robert Jardine McCleave: I think a person would know he was failing to return a cheque, but I believe the person the department would want to get after would be the one who defrauds from the very beginning.


John George Diefenbaker: Mr. Chairman, if the minister gives consideration to this point I think he will make the alteration, because the fact that the section is almost a duplicate of the old section 9(1) indicates that we failed to do our duty when that legislation was before the house.
With respect to the "knowingly", I point out that you cannot knowingly fail to return a cheque just because you do not return it. The "knowingly" cannot refer to the failure to return a cheque or the amount thereof, as required by section 20. No one wants to convict a person for failure to return a cheque or the amount thereof, as required by section 20, unless that is done in a fraudulent manner or with intent. The minister says that of course the department would not prosecute a case unless there were fraud, but the fact remains that the law being what it is, on the face of it a person could be convicted.
For example, let us say I receive a cheque. I place myself in that position, not that I will ever get one under this legislation or indeed under the old age pension legislation at all, but if I got a cheque and did not return it it could have been negligence. It could have been through failure to appreciate the necessity of returning it. Therefore I am sure that if the minister looks into this he will realize that as it stands mere neglect could convict a person under paragraph (c). With respect to paragraph (b), that paragraph reads:
(b) being the payee thereof, negotiates or attempts to negotiate any cheque to which he is not entitled,
There the intent is present because if the payee negotiates or attempts to negotiate any cheque to which he is not entitled the law presumes that that person knows the natural consequence of his act. Paragraph (b) is therefore all right, but under paragraph (c) the failure to return the cheque or the amount thereof should only be made an offence when it is done with a fraudulent purpose. I can see no reason why the minister would not accept the reasonable suggestion made by the hon. member for Halifax.


Allan Joseph MacEachen: Mr. Chairman, I will be happy to consider this aspect and see if we can produce some wording to cover this point. If this is the last point in connection with the
December 19, 1966	COMMONS
last clause I suggest we stand new section 21, pass the rest and then rise for a brief dinner adjournment.


John Whitney Pickersgill: Until a quarter to eight.


Herman Maxwell Batten: Is there any further discussion on new section 18? Is it agreed to stand new section 18?


Some hon. Members:: Agreed.


Herman Maxwell Batten: Is there any further discussion on new section 19? Is there any further discussion on new section 20? Is it agreed that new section 21 stand?


Some hon. Members:: Stand.


Herman Maxwell Batten: Is the discussion on new section 23 completed?


Some hon. Members:: Agreed.


Allan Joseph MacEachen: Mr. Chairman, I wish to have this clear. I have to report back to the committee on this particular point which we have discussed for some time now, and on the points raised by the hon. member for Winnipeg South Centre.


Gordon Minto Churchill: May I say one other thing. It would be wise to discuss the matter I raised earlier about the confidential issue in committee, rather than on third reading. On third reading we are restricted in debate, so there will be these three things to be covered.


John George Diefenbaker: I know the minister is just panting for the opportunity to be able to answer the questions about the situation that might be created by a province. It can happen under proposed section 23 which reads:
[DOT] (7:10 p.m.)
(1) There shall be established an account in the consolidated revenue fund to be known as the old age security fund to which shall be credited from time to time in respect of each fiscal year.
(a)	an amount equal, in the opinion of the Minister of National Revenue, to
(1)	the old age security tax collected, in that year before the time of crediting, by virtue of section 22,
minus
(ii) the aggregate of
(A)	amounts previously credited in respect of that year under this paragraph, and
(B)	such amount as should be allowed for refunds that have been made or will have to be made: and
(b)	the amount of each temporary loan made pursuant to this section.
(2)	All benefits payable under this act shall be paid out of the consolidated revenue fund and charged to the old age security fund.
Old Age Security Act Amendment
All these sections, of course, will be difficult to interpret should the legislature of the province of Quebec carry out its intention as evidenced by the speech from the throne. I should like to hear from the minister in this connection. We have been waiting with anticipation and hope that he would be able to explain what on the face of it appears to be unexplainable. Possibly that is the reason that up to the present moment he has shown no avid disposition to place before the committee and the country the views of the government on this very important matter.
When these moneys are paid into the consolidated revenue fund and a province has opted out-I presume that is the proper expression to use-from the federal legislation, what is the government's intention? There must be a decision made in this regard. The government knows now what it is going to do. No doubt it has discussed this matter at length. It evolved the system of opting out. I want to see the govermnent opt in in so far as this legislation is concerned and place the house and the country in full possession of the facts and the view of the government.
The minister has an unusual capacity for explanation. He has shown that in respect of different bills. He has made a thorough study of this matter. The very simple question I place before him arises out of the constitutional issue. Does the government not agree that if any province so decides it may have its own old age pension plan? If that be the interpretation, and I can see no other on the basis of the statute as it now is and on the basis of the section in the B.N.A. Act, then if the legislature of a province decides it is going to have its own system for its own province, old age pensions being within the jurisdiction of the province except in respect of the limitations made by the amendment of some years ago, how is the government going to go about it? Are you going to take the moneys out of this fund which have been collected from the people of nine provinces and hand them over to the tenth province? If two provinces follow this course, are you going to use the moneys collected from the people of eight provinces and hand them to the other two provinces with no strings attached?
You are not going to get this legislation through until you tell us this. We simply want your answer. We will accept it. We know that you will have an ingenious plan in mind. I should like to know how you are going to do it and on what you have determined. The Prime Minister has stated in effect that constitutionally the government is convinced that the
11330	COMMONS DEBATES	December 19, 1966
Old Age Security Act Amendment course it is following is entirely a correct and apt one. However, the government of the province of Quebec, following in the footsteps of its predecessor and also the incitement given by the Prime Minister and members of the government to the opting out concept, has declared its intention to establish its own system. We want to know what you are going to do about it. This is not a matter for next month or next year; it is not being postponed until July 1, 1968. This legislation is to come into effect immediately and, that being so, we are most anxious to know how this abstruse proposition is going to be met by a government noted for its diplomatic approach to problems and its failure to face up to those problems.
I am sure many thousands of people will await with tense interest the explanation of the minister. It is something that will tax the capacity of the government. That is about the only thing which has been left untaxed by this government, and we will get more taxes tonight. How are you going to do this? You collect the money through taxation, and the rumours are that all this government will be able to do will be to increase the income tax of those who have incomes of $6,000 or over. My friend moves his head in a negative manner. What are you going to do about this matter? When you collect the money how are you going to distribute it? You cannot force any province to accept something which constitutionally falls within the ambit of its authority.
I do not wish to detain the minister. It may be that he is not ready to reply and would like to stand this question along with the others until he is able to secure information.


Allan Joseph MacEachen: Mr. Chairman, I promised the hon. member for Winnipeg South Centre, and I repeat the promise to the Leader of the Opposition, that I will make some comments on the issues which have been raised. I am sure they will be inadequate to meet the much more experienced constitutional mind of the Leader of the Opposition. I am an amateur in this field but I will try later to make some comments.


John George Diefenbaker: Why not now?


Allan Joseph MacEachen: There has been an agreement that we rise until eight o'clock. Otherwise I should be quite happy to remain until eight o'clock to discuss the matter. At eight o'clock we have the budget and when that is completed we will return to this order. I

should like to make the point that the committee has concluded its discussion of proposed section 23 and therefore we will have to discuss this point and the other two points which remain on the title.
Progress reported.


George James McIlraith: Eight o'clock.


Mr. Deputy Speaker:: Am I to take it that there is agreement to suspend the sitting until eight o'clock?


Some hon. Members:: Agreed.



SITTING SUSPENDED


[Stage Direction]
The house resumed at 8 p.m.


Mitchell William Sharp: That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said: Mr. Speaker, this is not intended to be a full-fledged budget statement with the usual details of our finances and of the economic situation. I shall take the opportunity for a brief interim review of our fiscal position and its relation to the economic situation, but my main purpose tonight is to place before the house proposals for financing the guaranteed income supplement for those receiving old age security pensions. We shall be having to pay out about another $280 million a year for this purpose, commencing as soon as possible after January 1st, and I shall propose that we raise additional revenues of about that amount for budget and economic reasons.
In July, at the time of the announcement of the guaranteed income supplement, it was made clear that the government intended to cover the cost by additions to revenue. On September 8th, as the house will recall, I stated:
It was indicated in July that revenue measures would have to be considered to meet the burden of the income guarantee program. I have reached the conclusion that when this program is enacted it will be necessary to increase taxes or to introduce new taxes to meet our total requirements and to prevent the government's own increasing expenditures from having inflationary effects.
December 19, 1966

In the last two completed fiscal years,
1964-	65 and 1965-66, that is, the two years ended 1966, our budgets have been very close to a balance in terms of our public accounts -there have been deficits amounting to only about one half of one per cent of our revenues. Looking at the position from a somewhat different point of view, that is, the overall economic effect of the federal government's receipts and disbursements, what the economists refer to as the national income accounts, there were surpluses of some $300 million in 1964-65 and about $600 million in
1965-	66. These surpluses, in economic terms, have been helpful in pacing our economic expansion and in providing some of the savings required to finance the high level of investment needed for our rapidly growing economy.
Current Year Figures
In the current fiscal year I now forecast that our budgetary revenues before the tax changes I shall propose would be approximately $8,240 million compared with $8,300 million forecast in the budget last March. The reduction is chiefly due to corporate profits turning out to be less than expected, with the taxes thereon correspondingly reduced. In addition of course, the forecasts now reflect the effects of additional income tax abatements granted in favour of the provinces effective January 1st. I expect that our expenditures Will be about $8,580 million compared with $8,450 million forecast in the budget last March. The increases here are spread over a large variety of programs and reflect in considerable part the increased levels of pay and prices. These forecasts of revenues and expenditures would leave us with a budgetary deficit of approximately $340 million compared with the budget forecast of $150 million. Our surplus in terms of the national economic accounts I would forecast at roughly $140 million compared with the budget forecast of $455 million. The refundable tax on cash profits is excluded from both of these figures.
[DOT] (8:10 p.m.)
Our net financing requirements for nonbudgetary transactions, before tax changes and excluding transactions in our own debt, I estimate to be $342 million compared with $190 million at the time of the budget, taking into account the refundable tax. Members of the house will recall that in my last budget speech I said that it was not my intention to
The Budget-Mr. Sharp disburse the funds received from the refundable tax but to hold them as an addition to cash balances unless economic circumstances were to change and make it desirable for us to borrow less and ease the pressure on the capital market. This is still my intention. The possibility cannot be excluded of course, that our requirements will make it necessary for the government to borrow extra funds in the market before the end of the fiscal year.
Prospects for 1967-68
I do not propose at this time to forecast the budget for the next fiscal year. That will be done in the spring as usual. Our expenditure programs are still being worked out by the Treasury Board. It is still too early to forecast the economic position with enough accuracy and confidence to estimate our revenues. It is already evident, however, that our expenditures will continue to rise next year quite apart from the guaranteed income supplement. We have already taken on two major commitments in increased equalization payments to the provinces and substantially increased assistance for higher education. We have many large and important programs which are expanding, such as those for scientific research and development, and those for foreign aid. These are worthy projects supported strongly in this house and by the public. Having said this, I want to repeat what I said in this house on September 8th and on other occasions, that we must moderate the rate of increase in new public expenditures. Neither the capacity nor the willingness of Canadians to pay higher taxes should be taken for granted.
On the revenue side the situation in the next year is complicated by our relations and arrangements with the provinces. Already we have undertaken to recommend to parliament
a further abatement of our income taxes____
personal and corporate-next year in order to make more room for the provinces to increase such taxes to meet the rapidly rising costs of higher education including technical education. The income tax bill, which I plan to introduce before the recess to implement the portions of the March budget resolutions not dealt with in the bill passed in July, will contain clauses to provide for these abatements. In view of the discussion in the committee last friday, I might also mention at this time that we had put in this bill a specific provision exempting from tax social assistance payments based on needs or means, and made under either federal or provincial legislation.

December 19. 196S
The Budget-Mr. Sharp Economic Situation
When I reviewed the economic situation in September, I thought that it might be necessary to increase our revenues in order to counteract the increase in some of our other expenditures this year, and to make possible some relaxation in monetary restraint. Developments in the past three months, however, suggest to me that the undesirable acceleration of the demands upon our economy has moderated. There has been some economic readjustment taking place following the excessive rates of expansion that occurred earlier this year. The effects of a large number of strikes have also been appearing in the statistics. My judgment is that the economic expansion now taking place is more in line with the capability of our economy to grow steadily without inflation. While prices and wages are increasing at rates that are still excessive, I now believe we can expect some moderation in the trend of wage increases and further restraint in pricing policies. Our current position is one of delicate balance and we want to ensure that our economic policies do not contribute either to a serious decline in 1967 or to a re-emergence of strong inflationary pressures as we attempt to adjust to a sustained rate of economic growth.
The Canadian economic outlook for 1967 cannot be fully assessed as yet. We do not yet know enough of the capital spending plans of business or of provinces and municipalities. I believe, however, the rate of increase in such capital expenditures will be less than in the past two years, and should be a closer match to our growing capacity. Moreover, our exports, and our general business behaviour, are much influenced by the economic situation in the United States and that is unusually difficult to foresee this December. Within a few weeks we will know much more of United States policy in regard to defence expenditures and the fiscal measures likely to be proposed to deal with them. We will be in a much better position in several months to appraise our outlook and take promptly such action as may be necessary. Should some relaxation of restraint be needed there will be no difficulty in moving quickly in either the monetary or fiscal field or both. For example, the government will not hesitate to bring before parliament at short notice a measure to end the collection of the refundable tax on business profits or even to make reductions in taxes if that is necessary to achieve a proper fiscal policy for economic reasons. I believe,

and in this my views are shared by the governor of the Bank of Canada, that the appropriate mix of policies in such circumstances would be one which permitted some easing of the credit situation.
On the other hand, in 1967 we cannot be expected to permit a degree of expansion of the total demands on the economy that would encourage or endorse further increases in wages and prices at the rates that have been occuring during 1966. If some moderation in demands with inflationary consequences does not occur we may well find it necessary to impose sufficient fiscal restraint upon the economy as a whole to check them. At this time, I am very happy to say, it does not appear such further action will be necessary, and I certainly hope it will not be.
General Policy
Consequently, I am not proposing tonight any general changes in taxation for the purpose either of stimulating or of applying further restraints to the economy. The measures proposed are intended only to counterbalance, financially and economically, the expenditures on the guaranteed income supplement with a small margin to allow for the fact that the payments we make to the old age pensioners are sure to be spent while some of the revenues we get will come out of savings. Given our present economic and budgetary situation, I believe this neutral action to be about right.
To raise all the revenues that are required by all governments in Canada-about $18 billion a year currently-requires a large variety of taxes and charges. We can count on a growth in these revenues as our economy grows and prospers but the rate of real growth in the economy is limited by the growth in our labour force and the improvement in its use and productivity. It is all too easy to anticipate the growth in our revenues and to commit ourselves to spending programs that outrun it. The consequence of over-running it, which those who elect us and make demands on us must face, is that we must raise by increased taxes for public purposes or for redistribution of income an increasing fraction of our total national product. It is because we are in that position that tonight we are asking the Canadian public to accept increased taxes in order that we may distribute more to our old age pensioners with low incomes.
[DOT] (8:20 p.m.)
Old Age Security Fund
I turn now to the tax measures I am proposing-two increases in existing taxes. The first
December 19, 1966	COMMONS
is an increase in one of the taxes under the Old Age Security Act, which will increase the revenues of the old age security fund. Let me first explain the situation of that fund and the policy I propose in regard to it.
When the Old Age Security Act was passed late in 1951 it set up this fund to which were to be credited the revenues from certain specified taxes levied under that act, and which were regarded at the time as essentially contributions for the financing of the pensions authorized by the act. While individual pensions were not related to the taxes or contributions paid by the pensioner, it was felt the aggregate pensions should be related to the revenues of the fund. This was intended to be a means of ensuring the proper financing of the pensions and of ensuring a sense of responsibility in determining from time to time how much the pensions ought to be. The Minister of Finance is required to review an-
The Budget-Mr. Sharp nually the state of the fund and to recommend measures to increase the revenues of the fund if it appears the revenues for the ensuing year will not be sufficient to meet the charges on the fund without further loans from the consolidated revenue fund.
I would ask permission of the house to insert here in Hansard, for the convenience of hon. members, a table showing for each fiscal year since the act was passed the pension payments made from the fund, the revenues credited to it for each of the three taxes levied under the act, and finally the deficit or surplus for the year, with footnotes indicating how these deficits were dealt with.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The table referred to is as follows:]



TABLE 1

[Stage Direction]
OPERATION OF OLD AGE SECURITY FUND, FISCAL YEARS ENDED MARCH 31, 1952 TO MARCH 31, 1967 ($ millions)
Year	Pension Payments	Sales	Corporation Income	Individual Income	Total	- Annual Surplus (+) or Deficit (-)1951-52<«	
76	24	2	0.1	26	- 50"'1952-53	
323	142	37	45	224	- 99"'1953-54	
339	147	56	91	294	- 46"'1954-55	
353	143	46	101	290	- 63<*1955-56	
366	160	53	102	315	- 50">1956-57	
379	179	67	125	371	- 8">1957-58	
474	176	61	135	372	- 102"'1958-59	
559	174	55	146	375	-184"'1959-60	
575	270	91	186	547	- 28">1960-61	
592	270	104	229	603	+ 111961-62	
625	285	100	259	644	+ 291962-63	
734	302	115	274	691	- 431963-64	
808	332	116	303	751	- 58"'1964-65	
885	383	145	432	960	+ 751965-66	
927	522	152	495	1,169	+2421966-67"'	
1,031	561	153	552	1,266	+235
"'Program commenced January 1952.
"'Estimated (excluding the guaranteed income supplement and tax change).
"'Provided for by budgetary expenditure.
"'Written off against reserve for losses on realization of assets.
"'Financed by loan which has been repaid out of subsequent surpluses shown in this table.
Mitchell William Sharp: It will be noted that during the first eight fiscal years of its operations, the fund incurred deficits amounting in all to $602 23033-7171
million. These were met out of general revenues, or in one case charged to the reserve against losses on realization of assets, which

December 19, 1966
The Budget-Mr. Sharp amounts to much the same except for accounting purposes. Hon. Donald Fleming, in his budget of April, 1959, concerned over these increasing deficits taken in conjunction with the recent increases in pension rates, increased the rates of all three old age security taxes from 2 per cent to 3 per cent, which brought about a rough balance in the fund for the next three years. Increasing deficits then occurred, accelerated by the increase in pensions early in 1962. They were financed by temporary loans from the consolidated revenue fund. When the rate of the pension was increased to the present level in the autumn of 1963 the rate of contribution from the tax on personal incomes was raised from 3 per cent to 4 per cent effective January, 1964. This, together with the removal of exemptions from the sales tax and the effects on revenues of increasing incomes and sales, brought in sufficient revenue to produce surpluses in the fund during the past two fiscal years, and this year as well. These have resulted in the repayment of the temporary loans made to the fund in the preceding two years and the accumulation of a credit balance of $217 million at the end of the last fiscal year, and of $353 million at the end of October. This surplus is much less, it will be noted, than the total deficits in the fund in the 1950's that were not carried forward but written off. Over the whole period of the fund up to this October, the expenditures have exceeded the revenues by $238 million.
Parliament has recently imposed large additional future burdens on the fund by providing that the age at which payment of pensions will commence will be reduced year by year starting in January, 1966 until it reaches age 65 in January, 1970. Even after taking account of the growing revenues of the fund, the increasing pensions would exceed the annual revenues in the fiscal year 1970-71, when the full effects of the age reduction are first felt. Addition of the guaranteed income supplement, however, would immediately bring the pensions in the next fiscal year 1967-68 above the revenues anticipated from the present taxes, and this annual deficit would grow rapidly. It would use up the accounting surplus in the fund by mid-1969 and produce an annual deficit of nearly $400 million in the fund by the time the age reduction already in the law takes full effect.
Such is the situation in terms of this particular account. When we consider the economic and financial effects of old age security payments, however, we must look not to the position in a single account but to total cash
[Mr. Sharp.l
flows. In introducing the guaranteed income supplement we are adding $280 million a year to our cash outflow, and this must somehow be matched by increased cash revenues if we are to avoid increasing our cash deficit with all its financial and economic consequences. The accumulated surplus of the old age security account is not held in a separate cash balance. The cash received and credited to this account is and always has been pooled in the consolidated revenue fund into which parliament requires all revenues to be paid and from which the payments authorized by parliament are made. If parliament increases the payments out of this consolidated revenue fund, it must replenish the fund with revenues, or the government has to borrow more to finance the deficit. Given the present and prospective economic situation I do not think that we should finance this large increased cash outflow by increased borrowing. If the economic situation should develop in a way that makes it desirable to reduce our cash inflow from taxes, and borrow more, we can quickly take action to do this. But we should not use the possibility of such a contingency as an excuse for taking the soft option and dodging a difficult issue.
Old Age Security Tax On Income
I am proposing therefore that we act to meet our immediate cash requirements and also to provide properly in our accounts for the burdens which parliament has imposed and is now imposing on the old age security fund during the next four years while the age reduction program is coming fully into effect. The first measure I recommend to the house, therefore, is that we raise the maximum amount payable by an individual on the 4 per cent tax on personal income under the Old Age Security Act, from $120 per year, as it has been for the past three years, to $240 per year. This would yield about $135 million a year at current income levels. It would be effective from January 1st but since deduction at the source cannot start immediately, relatively little will appear in this fiscal year's accounts. The forecast effects of this change on the future years' accounts of the old age security fund are shown in a table which I would ask permission to place in Hansard at this point for the assistance of hon. members.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The table referred to is as follows:]



TABLE 2

[Stage Direction]
ESTIMATED POSITION OF O.A.S. FUND, 1965-66 TO 1971-72 ($ millions)
Minimum Eligible Age	Fiscal Year	O.A.S. Pension Payments	Revenue from Present Taxes	Difference Col. (2)-Coi. (1)	G.I.S.w Payments	Difference Col. (3)-Col. (4)	Revenue^® from 1966 Change	Combined Revenues Col. (2)+ Col. (6)	Combined Payments Col. (1) + Col. (4)	Annual Surplus or Deficit Col. (7)-Col. (8)	Balance in account at end of year**'(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)Jan. 1, 1966	Age 69	1965-66	927	1,169	+242	-	+242	-	1,169	927	+242	+217Jan. 1, 1967	Age 68	1966-67	1,031	1,266	+235	70	+165	9	1,275	1,101	+174	+391Jan. 1, 1968	Age 67	.. 1967-68	1,146	1,381	+235	286	- 51	137	1,518	1,432	+ 86	+477Jan. 1, 1969	Age 66	.. 1968-69	1,296	1,427	+131	318	-187	147	1,574	1,614	- 40	+437Jan. 1, 1970	Age 65	. 1969-70	1,464	1,505	+ 41	346	-305	157	1,662	1,810	-148	+289Age 65	. 1970-71	1,619	1,590	- 29	367	-396	168	1,758	1,986	-228	+ 61Age 65	1971-72	1,689	1,687	- 2	363	-365	180	1,867	2,052	-185	-124
(1) Represents estimated payments in respect of each fiscal year.
<2) Assumes new tax deduction tables can be put into effect on Feb. 1, 1967. w Deficit of $25 million at March 31, 1965.
[Stage Direction]


o
cn
[Stage Direction]


w
>
The Budget-Mr. Sharp
[Stage Direction]
December 19, 1966
The Budget-Mr. Sharp Mr. Sharp: It will be seen that with this increased maximum tax the requirements of the fund, to which the law directs our attention, are met until the end of the 1970-71 fiscal year, the first full year after the age reduction program is complete. By that time parliament will have had ample opportunity to review our whole tax structure and decide what should be done not only with this element of our taxes but with the old age security fund generally.
This tax change will affect only those taxpayers with taxable income exceeding $3,000 after all exemptions and deductions. This means that a married taxpayer with two children will not have any increase unless he is earning more than $5,700 a year-which is well above current average wage earnings. The proposed tax increase will affect only the upper third of present income taxpayers.
Some hon. Members:: Hear, hear.


Mr. Graffiey:: The Liberal party is the only party in history that can applaud a tax raise.


Mr. Speaker:: Order, please.


Mitchell William Sharp: I continue.
Addition to General Revenues
The second tax change I am recommending is intended to add to our general revenues to provide the remaining cash required to pay the guaranteed income supplement.
The choice of the tax to increase for this purpose is a difficult one. Normally one would look to our regular personal income tax because, being progressive, it is one of our fairest taxes. However, we share this tax field with the provinces. We have emphasized to them in recent months that they have access to this field of taxation just as we do and must share responsibility for its use. We are proposing, as I have said, to abate our income tax for 1967 to make it easier for the provinces to raise theirs in order to help finance the rapidly growing burden of higher education. We will want to discuss with the provinces in the coming year or two various ideas proposed to reform the income tax so that we may achieve as much harmony as possible in our use of this most important tax field.
[DOT] (8:30 p.m.)
In these circumstances and having in mind the impending major overhaul of our tax system which we will undertake in the light of the report of the Royal Commission on Taxation, I have come to the conclusion that we should not use the personal income tax to 
raise the additional funds we need now. We must, at this time, as the provinces frequently have to do, rely upon other taxes to meet our increasing burdens.
In making the choice of taxes we must also keep in mind that the corporate income tax in Canada cannot get seriously out of line with that in the United States without endangering our competitive position. Already our competitive position is being weakened by recent increases in costs.
Sales Tax
I have come to the conclusion, therefore, that we should obtain the revenue we need by adding one per cent to our general sales tax, making it 12 per cent in total, instead of 11 per cent, with two exceptions.


Some hon. Members:: Oh, oh.


Mr. Bell (Carleion):: Shame, shame. You will never get away with it, never.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.


Mitchell William Sharp: The only comment I wish to make, Mr. Speaker, is that if we had followed the advice of members on the other side of the house it would have led to much greater taxation increases.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: I hope that hon. members realize that the government in this respect is being responsible not only with respect to its expenditures but also with respect to its taxes.


William Heward Grafftey: I have always admired the minister's modesty.


Mitchell William Sharp: This will be done by amending the Excise Tax Act. I propose that this change take place January 1st so there will be no danger of confusion or price increases arising from it during this Christmas period. The foreknowledge of an increase as small as this for this short period should have no significant economic effects. The revenue authorities will be careful to ensure that sales which are properly taxable after January 1st are not attributed by some artificial action to the period between now and then.
Last spring, we decided that the sales tax should be removed from production machinery and equipment in two steps, one in April, 1967 and one in April, 1968. It is proposed that the one per cent increase in the tax now being made should not apply to these goods
December 19, 1966

for the three months before the changes now in the law come into effect.
I am also proposing that the increase in the sales tax should not apply to building materials. The government wishes to see more houses built in 1967. The competition of other demands for capital funds this past year has brought about a serious reduction in mortgage lending for the building of houses and particularly of apartment houses. Unless this trend is reversed it will lead to shortages of housing and increased rents. The government is pressing ahead with action under the National Housing Act, as recently amended, to help meet this situation. Most of the houses needed, however, must be financed and built by private enterprise, subject to market forces. We would not wish an increase in the sales tax to impede an expansion of house building at this time.


Thomas Miller Bell: But everything else. Everything else.


Mitchell William Sharp: I suggest again to my hon. friend who is interrupting that the expenditures he proposed would have compelled me to raise taxes-


Some hon. Members:: Oh, oh.


Mitchell William Sharp: The indignation of my hon. friend is greatly misplaced.


Lloyd Roseville Crouse: Why throw it on the Conservatives?


Mr. Speaker:: Order, please.


Thomas Miller Bell: Live with Mitch. Sing along with Mitch.


Mr. Speaker:: Order please.


Mitchell William Sharp: The yield of this increase in the sales tax at the current level of sales and prices my department estimates to be approximately $155 million a year, taking the exemptions into account. It should add about $20 million to this year's revenue.
We shall wish to reform our sales tax as well as our other taxes over the next few years. I recognize, just as I am sure all members of this house recognize, that any sales tax cannot fully take into account ability to pay, although our tax, which exempts food, fuel and services, is better than many. Over a fairly wide income range it is proportional or mildly progressive in its incidence. Taken in conjunction with our progressive income tax, and the heavy taxes on certain items such as liquor, it produces an over-all result which is
The Budget-Mr. Sharp reasonable. We will examine this over-all result in revising our tax structure and will aim, of course, at a fair incidence of the total of taxes and benefits after our reforms are made.
The increase in sales tax can be expected to increase the prices of those goods subject to it-though just how much will depend on the market conditions in each commodity and in various distribution channels. Indeed in some cases the increase may not be passed on. Certainly it should increase the cost of living by much less than one per cent, taking into account that services and a wide range of goods are exempt. I should remind consumers that virtually all foodstuffs are exempt from the sales tax and therefore this increase in rate will have no effect upon this very important portion of their expenditures.
Conclusion
Before concluding, I would ask permission to place on Hansard at this point for convenient reference a brief table showing our revised forecast of revenues and expenditures this fiscal year, and the old age security revenues and expenditures and other non-budgetary requirements after taking the proposed tax changes into account, compared with the forecasts made in the budget in March.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The table referred to above is as follows:]



TABLE 3

[Stage Direction]
Fiscal Year 1966-67 March December Forecast Forecast (Millions of dollars)
Budgetary Revenues Budgetary Expenditures	8,300 8,450	8,260 8,580Budgetary Deficit	-150	-320Old Age Security Payments Old Age Security Revenues	1,035 1,277	1,051 1,275Surplus of Old Age Security revenues over payments	+242	+224Other Non-Budgetary Requirements, net (after including yield of refundable tax)	-432	-557
Mitchell William Sharp: In conclusion, Mr. Speaker, I think I should recall the positive, humani-		
tarian purpose which motivates us tonight.


Some hon. Members:: Oh, oh.


Mitchell William Sharp: We are creating in Canada a most complete system of old age pensions.
11338	COMMONS
The Budget-Mr. Monteith


Some hon. Members:: Hear, hear.


An hon. Member:: The best in the world probably.


Mitchell William Sharp: One of my colleagues says it is probably the best in the world.


William Heward Grafftey: I admire the minister's
modesty.


Mitchell William Sharp: For the long term we have the combination of the basic old age security pension and the Canada Pension Plan. For those in special need we have the Canada Assistance Act. For those already retired or retiring in the next few years and whose incomes are small we will have this guaranteed income supplement. All Canadians will share its cost under the measures proposed tonight. It is fitting in this Christmas season that we should be engaged in making a major contribution to the comfort and dignity of our senior citizens.


Some hon. Members:: Oh, oh.


Some hon. Members:: Hear, hear.



OLD AGE SECURITY ACT RESOLUTION

[Stage Direction]
Resolved that it is expedient to amend the Old Age Security Act to provide that for the 1967 and subsequent taxation years the maximum amount of old age security tax payable on the taxable income of an individual be increased from one hundred and twenty dollars to two hundred and forty dollars.

[Stage Direction]
Resolved that it is expedient to amend the Excise Tax Act to provide that, effective January 1, 1967, the rate of the consumption or sales tax imposed under section 30 of the said Act be increased from eight per cent to nine per cent with respect to all goods subject to the said tax, except articles enumerated in Schedule V to the said Act and building materials that were exempt from the said tax immediately prior to June 14, 1963.
Hon. J. W. Monteith (Perth):: Mr. Speaker, the Minister of Finance started off this evening trying to maintain throughout his speech a tone of sweet reasonableness. So reasonable were the minister's remarks that there was an almost complete lack of applause from his side of the house.


An hon. Member:: Oh, no.


Jay Waldo Monteith: Oh, yes. What happened when he announced the increase in personal

DEBATES	December 19, 1966
income tax from $120 to $240? What happened when he announced the increase in sales tax, which means, incidentally, that he is presuming to impose the sales tax on the old age pensioners? He is taking the pensioners' benefits away in higher sales taxes. The sales tax hits everybody. There has been nothing in the minister's remarks to change what I had intended saying.


Julia Verlyn (Judy) LaMarsh: It would not have been much of a speech.


Some hon. Members:: Oh, oh.


Jay Waldo Monteith: We fully expected that there would be increases in taxation. This budget has been called a mini-budget. That name is applicable to it. It should be compared with a mini-skirt. Taxes are getting higher and higher but covering less and less. The budget has been said by the minister to contain a Christmas present for the older people of Canada. I claim that this is no Santa Claus budget but a Scrooge budget. It appears to me that tonight a quotation from Charles Dickens well describes the minister-"with affection beaming in one eye and calculation shining out of the other."
[DOT] (8:40 p.m.)
Before discussing the details of the budget, let us turn for a few moments to a matter of urgency which is now before the Canadian people, and to a situation which is in itself a reflection of the inaction of the Minister of Finance. I refer to the inept handling of the Prudential Finance shambles-


An hon. Member:: By the province of Ontario.


Jay Waldo Monteith: As I understand the situation, this company had a provincial charter but operated outside Ontario as well.


Some hon. Members:: Oh, oh.


Jay Waldo Monteith: The company has failed dismally, causing untold hardship to countless citizens who had every reason to suppose their life earnings were safe. Many hundreds are destitute. This sort of thing has gone far enough. How many more financial calamities will there be before this government acts?


An hon. Member:: Ask Robarts.


Jay Waldo Monteith: There seems to be a difference of opinion as to the extent of federal and provincial jurisdiction in certain fields of finance. To a degree I think these differences arise because of the lack of a proper
December 19, 1966

definition of banking. During recent meetings of the committee on finance, trade and economic affairs almost all witnesses have indicated their belief that there should be an alternative to the present definition which simply says that a bank is "a bank to which this Act applies". Then a list of banks is given in a schedule. I suggest that the government should at least take action to the extent of asking the Supreme Court of Canada for a decision; otherwise we could go on forever suffering confusion. I know there is no law which prevents any individual from accepting money and paying interest thereon, but when corporations set themselves up in the business of taking loans, then surely protection should be afforded to persons lending money to such corporations.
The minister told us he acted in the only way open to him; he could not have done other than he did. I say he was wrong. Whether or not Mr. Gruber expected the Minister of Finance to pass on his warnings to the Ontario authorities is beside the point. I say the minister should have done so. It was his duty. The fate of hundreds and hundreds of depositors was at stake. The minister says it was none of his business. I say it was. Surely he owed something to those people all over Canada who today are suffering from this mess.
The minister has not only been negligent; he has done a great deal of damage to the reputation of sound and reputable Canadian insurance companies. On December 12 he made statements both inside and outside the house which could have implied that only British and foreign companies were dependable and safe. The inference was that Canadian companies do not have any securities deposited with the Department of Finance in Ottawa. In this connection I would refer to a letter which I have received from the managing director of a Canadian insurance company. He writes:
As you probably know, a good deal of damage to the reputation of Canadian insurance companies has been done, principally because of the impression created that the Canadian companies do not have any deposits at all in Ottawa.


Mr. Speaker:: Order. I hesitate to interrupt the hon. member but it seems to me there are too many conversations taking place in the chamber at the moment.


Jay Waldo Monteith: Thank you, Mr. Speaker. I know there have been many complaints from the other side concerning the contents of the budget, and of course they are taking it out on my speech.
11339
The Budget-Mr. Monteith
The managing director goes on to say:
As one of the smaller Canadian companies we have deposits with the minister in excess of $400,000 and of course comply fully with the requirements of the department. Our securities are held for safe custody by a trust company in their vault. The provisions of our by-laws insure that no securities can be released except on the signature of two officers of the company and consequently there would therefore have to be collusion to execute any misappropriation. Actual instruments never go through this office, but are handled exclusively by the trust company and, as a further safeguard, all officers and members of the staff are bonded.
The letter goes on to point out that the minister's somewhat half-hearted retraction received considerably less publicity than his original damaging statement. The damage has been done, the writer states. The minister should make a stronger retraction. I suggest this is an example of the ineptitude with which the minister has been handling this whole affair, offering nothing but alibis.


Frank Howard: Would the hon. member permit a question Would he mind identifying by name the insurance company whose managing director he has just quoted?


Jay Waldo Monteith: I have no objection. It is the Perth Mutual Fire Insurance Company of Stratford. The minister even procrastinated about the one small step he has taken in the hope that it might eventually provide some protection. His deposit insurance legislation is not obligatory on institutions other than the chartered banks, so I understand, and the chartered banks do not need it. The most important aspect of this matter, however, is that we have not seen the legislation. It has been promised for months and months, and when asked about it the minister simply says, "soon". This ridiculous situation has existed continually since the finance committee has been meeting to study amendments to the Bank Act. We have expert witnesses appearing before us; yet we can only ask hypothetical questions because the legislation is not available to us. It is an unbelievable situation.
I would also make a strong complaint about the lack of action on the part of the Minister of National Revenue (Mr. Benson) in the deplorable bankruptcy of Prudential Finance. When the officials of his department heard allegations of possible fraud, why did his income tax inspectors not make an investigation for income tax purposes? He would have been justified in taking such action. It is easy to conclude what would have been the result if he had taken this step. The minister should not suggest it would be improper to take this
December 19. 1966

The Budget-Mr. Monteith action. We know his inspectors often make investigations of taxpayers on less evidence than was available in this case.
Income tax inspectors often take action after receiving anonymous tips. Maybe these are provided to the department out of pique, jealousy, or for some other reason. Sometimes, I understand, the department even pays rewards for such information. Here we have a case where a definite warning has been ignored. Had the minister acted promptly something, at least, might have been saved.
[DOT] (8:50 p.m.)
Now let us look at tonight's budget. In a way it too is in the pattern of this government's failure to look at Canada and the practical needs of our people. Mr. Speaker, I suggest th!s budget presented to us tonight should never have been delivered. There is no need for it. True, the minister said last September 8 he would present a budget this autumn. But that was last September. He knows the economic situation in Canada is standing still, if not in a recession, and I suggest the minister is not doing anything to improve the situation.
If any second budget is necessary then it should only be because of a real crisis. I claim there is not that crisis to bring on this effort of the minister's tonight, even though there has been plenty of poor planning. All this is going to do is make it more difficult for the average person to get by in his or her day-today existence.


Some hon. Members:: Hear, hear.


Jay Waldo Monteith: We have faced, are facing, and will in the future face frightening increases in the cost of living. Is it really any wonder that we have been having demands for larger pay increases? The housewife goes marketing and she finds food, clothing, whatever it may be, continuing to rise in price and at a rapid rate. She goes home and tells her husband and naturally he is unhappy and anxious to demand higher pay, but the Pearson formula of wage increases has set standards which can have only one outcome. The resultant increased costs have not even been felt yet, and now the minister takes another slice off the husband's take-home pay.
It is interesting to compare some of the prices the housewife in Canada pays compared with those the housewife pays in the United States. I have here a comparison list of food prices in Canada and the United States. I have taken prices from advertisements in the Ottawa Journal of December 14, and American food prices from advertisements in

the Washington Post of December 12, just two days previous.
In Canada sirloin steaks were advertised at 97 cents a pound; in Washington they were advertised at 87 cents a pound. Bacon in Ottawa was advertised at 89 cents a pound and in Washington at 65 cents a pound. Chicken breasts were advertised in Ottawa at 65 cents a pound and at 45 cents a pound in Washington.


An hon. Member:: What size?


Jay Waldo Monteith: Frozen french fries were advertised at 59 cents for two pounds in Ottawa and at 29 cents for two pounds in Washington. Hon. members opposite may think this is funny, but the average Canadian housewife does not think it funny when she goes to the supermarkets.


Some hon. Members:: Hear, hear.


Jay Waldo Monteith: I give one more example. Picnic ham was advertised at 49 cents a pound in Ottawa and at 37 cents a pound in Washington. These are just five items from the list. The housewife in Washington is paying considerably less for food than the housewife at the local supermarket in Canada.


Mr. Bell (Carleton):: And the salaries are better in the United States.


Jay Waldo Monteith: Yes, the salaries are better. There are many things that the minister could have done to bolster our economy at this time when it is so direly in need of bolstering. He could have accelerated the withdrawal of the sales tax on building supplies and materials. This would have encouraged home construction, so badly needed. Tonight the minister apparently thought he was doing quite a thing when he refused to add the extra 1 per cent sales tax on to building materials, but he has left the tax on construction materials. If he really wanted to do something to encourage the Canadian economy I repeat that he could have accelerated withdrawal of the 11 per cent sales tax on building supplies.
He could have rescinded the 5 per cent forced savings tax on certain corporations. This would assist in expanding production to meet the demand and help combat inflation. He could have abolished the amendments to the Income Tax Act introduced by his predecessor, which were supposed to encourage minority Canadian ownership in foreign controlled companies. It has not worked. The minister knows it, and abolishing it might
December 19, 1966

have stopped some repatriation of funds to the United States.
But the best thing of all that he could have done would have been to admit his error and not brought down a budget until next spring.


Some hon. Members:: Hear, hear.


Jay Waldo Monteith: Mr. Speaker, all predictions seem to be that tight money is here to stay for some years. When a company like Imperial Oil issues 20-year debentures at 6f per cent, non-callable for 12 years, it is easily seen what it thinks of the money market. These high interest rates can only add to the cost of production and the high cost of living. Mr. Speaker, we are being squeezed out of the markets of the world by the restrictive and negative approach that the government has been taking.
Why does not the government itself practice some economy and set a pattern for others, particularly other governments? Surely this would be the first step in any sensible approach. Mr. Speaker, I claim the government is guilty of gross fiscal mismanagement.


Some hon. Members:: Hear, hear.


Erik Nielsen: Spending money like a drunken sailor.


Jay Waldo Monteith: Let us look for a moment at Canada's economic condition and ask ourselves what will be the effect of more taxation. Look at housing. In the third quarter of this year house construction dropped by 25 per cent, from 49,551 units to 37,145 units. Housing construction is in a serious position, so what does the minister do? Tax more.
Look at the stock market. There is actually a net outflow of funds to the United States because American equity stocks now look so attractive by comparison with prospects here. This is a dreadful commentary on the state of Canada on the eve of its centennial. In the first eight months of 1966 we had a net outflow of $308 million compared with $174 million in the same period of 1965 and only $53 million in the same period of 1964. So we tax more.
We should be encouraging Canadians to invest in their own country. This is not the time to raise taxes in Canada. There are many signs that while the cost of living continues to rise, there is a tapering off or a slowdown ahead in economic activity. This is happening both in Canada and in the United States.
Car production and steel production have declined in the United States. New car sales
The Budget-Mr. Monteith are down. A particularly volatile item is the level of debt in the United States. The average United States consumer is now paying out 22 per cent of his income to pay off debt, compared with 19 per cent only six years ago. The consumer, so important in maintaining a boom, is in no position to increase his spending in that country.
Similarly, Mr. Speaker, in Canada consumer credit is high. Total consumer credit now stands at over $7,000 million, compared with only $4,000 million just six years ago. The cash loans of consumer loan companies now are double the level of just six years ago. The personal loans of chartered banks are some $2,370 million, nearly double the level of just over two years ago.
Our people are so in debt and our financial institutions are so lent out that there is a real danger that demand cannot be sustained in the consumer sector of the economy. Yet this is the time the government adds to the burden by increasing taxes. President Johnson has held off any tax increase in the United States; yet our government goes ahead in its stubborn way. I wonder whether the Minister of Finance really does know the state of the Canadian economy. Dr. Deutsch, the distinguished head of the Economic Council of Canada, had this to say before the joint committee on consumer credit:
[DOT] (9:00 p.m.)
At the present time the economy is flattening out. Up to recently, it has been fully loaded, until this flattening out. It may be a little overloaded in some respects. If this flattening out continues and even goes down, it will not be overloaded.
Only a few months ago, the economy was fully loaded and in some ways overloaded; but since then there has been a flattening off and the pressure has come off a bit and the problem now is, is this flattening out going to continue and become a turndown. If it is there will be room then for production-[DOT]
A few lines later, he continues:
If it flattens off, it will not take long before you find yourself not absorbing your labour force and you are really not using your capacity. The question now is: do we continue to flatten out or go up again, or will we go down?
That was Dr. Deutsch speaking. At that time he intimated that there are signs pointing in both directions. What does the Minister of Finance say about all this? Incidentally, these are the remarks of Dr. Deutsch when he was speaking on November 24 and they are reported at pages 1540 and 1541 of the minutes of proceedings and evidence of the joint committee of the Senate and the House of Commons on consumer credit. It was only two
December 19, 1966

The Budget-Mr. Monteith weeks later, on December 9, that the minister declared that there is nothing to this talk at all. The minister replied to a question asked in the house by the hon. member for Northumberland (Mr. Hees). The hon. member referred to the statement made by the president of the Banque Canadienne Nationale which contained the following words:
The current state of the economy presents a forewarning of an impending recession or at least a very serious slowing down of the growth.
What did the minister say? These are his words:
This is not the consensus of view of all economists in the country, least of all is it the view of one of the most eminent advisers, the head of the Economic Council of Canada.
Mr. Speaker, I suggest that the minister get together with Mr. Deutsch. Whose advice are we taking? Which way are we going?


An hon. Member:: Not your way.


Jay Waldo Monteith: Mr. Speaker, I should like to reiterate that this party is against the means test. Our party's position is firmly against the means test in old age security. Now we have added the other side-a mean tax. We have proposed a $100 a month pension to all pensioners at an estimated additional cost of $100 million.
We are against the government's new gimmick. I should like to point out why. It reintroduces the means test which has been abolished since 1951. The minister has said that out-of-country benefits will not be paid because they are too hard to investigate. Are we going to bring back the regime of the prying eye? We are against it because it does nothing for the pensioners who are faced with cost of living increases, and again tonight there is going to be an increased cost of living to the pensioners. The $75 a month to the pensioners, given later in 1963, is worth a lot less today. The consumer price index has jumped nearly 12 points since the last pension increase. Today's pension of $75 is worth less than $66 in real terms. Yet nothing is being done to improve the lot of these Canadians.


Mr. Ricard:: Another one per cent has been added to the sales tax.


Jay Waldo Monteith: Yes, another 1 per cent has been added to the sales tax tonight which will have to be met by those in the middle and high income groups. I am not pleading the case for those in the high income brackets. I

am thinking of those in the low income brackets. I should like to ask the Minister of Finance what is the size of the old age security fund. I believe he gave us that information this evening. I think it was $353 million as at the end of October. What right is there to overtax the Canadian people and hold out on our old age pensioners? Is the government by any chance holding off until the eve of another election?
I realize that the cost of social welfare has to be met, but I understand that the legislation concerning the Canada Assistance Plan has not yet been proclaimed and that no payments are to be made under the old age security amendments which are now before us until at least next March or April. But then, this is Christmas. As Dickens said of Scrooge:
And it was always said of him that he knew how to keep Christmas well, if any man alive possessed the knowledge.
I ask, Mr. Speaker, why bring in this tax now and further dampen down the economy? The date of the next regular budget would have been plenty early enough. Psychologically this is not the time to increase any taxes. To me this budget seems to be an exercise in nonsense. It is not needed and will only put a further brake on our economy and again increase the cost of living as do all taxes.
This budget obviously does not meet the needs of Canadians today. I therefore move, seconded by the hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard):
That all the words after "that" be struck out and the following substituted therefor:
The government give consideration to meeting the proposed selective means test payments for old age pensioners by drawing on the surplus now in the old age security fund, before any increase be made in the oppressive burden of general taxation whose effects at this time will intensify rather than alleviate the hardships being experienced by Canadians generally, whose living standards are being seriously reduced by inflation and by the steadily rising cost of living.
Mr. Speaker, may I adjourn the debate?


Some hon. Members:: Agreed.


Mr. Speaker:: Order, please. Perhaps someone else might move the adjournment because the hon. member at this point has an amendment before the house. I am sure there will be no difficulty about someone else moving the adjournment of the debate.


George James McIlraith: Mr. Speaker, I move the adjournment of the debate.


An hon. Member:: It was moved over here.
December 19, 1966


Jay Waldo Monteith: May I move the adjournment of the debate, Mr. Speaker?
[DOT] (9:10 p.m.)


Mr. Speaker:: Of course, there is the
procedural difficulty that the hon. member cannot put two motions at the same time. Perhaps the simple solution would be to allow the amendment to stand, which would have the effect of allowing the hon. member for Perth to move the adjournment of the debate. The amendment could then be formally put when the debate was resumed.


Jay Waldo Monteith: I should like to allow my amendment to stand, Mr. Speaker.


George James McIlraith: I move the adjournment of the debate, Mr. Speaker.


Mr. Speaker:: Order, please. In order to make this clear let me understand what the hon. member for Perth wishes. Do I take it he has suggested that his amendment be put formally when the debate is resumed and that in the meantime he will move the adjournment of the debate?


Jay Waldo Monteith: No, I meant to put the amendment formally at this time. You then ruled that I could not move the adjournment of the debate.


George James McIlraith: Mr. Speaker, I move:
That the debate be now adjourned.


Edmund Davie Fulton: Mr. Speaker, with all respect I think there is a precedent for the proposition of the hon. member for Perth. An hon. member speaking on the main motion may move an amendment. After moving the amendment it is put and he then moves the adjournment of the debate. As soon as the amendment is put the hon. member is speaking to the amendment and at that stage he moves the adjournment of the debate.


Mr. Speaker:: If the hon. member can cite a precedent in support of the proposition he is advancing I will consider it, but I am advised to the contrary. Since there seems to be little consequence I wonder whether the easiest way to proceed is that to which the hon. member for Perth has agreed. I assume that what he intended was to continue his speech later.


Jay Waldo Monteith: It was my desire to move the amendment but you intimated, sir, that having done so I could not adjourn the debate and continue my speech later.
Old Age Security Act Amendment


Mr. Speaker:: In view of the circumstances I repeat my suggestion, that the motion to adjourn the debate be allowed to remain in the name of Mr. Mcllraith. Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed consideration in committee of Bill No. C-251, to amend the Old Age Security Act-Mr. MacEachen-Mr. Batten in the chair.
On clause 4-
Herman Maxwell Batten: When the committee rose earlier this evening new section 21 of clause 4 had been stood.


Allan Joseph MacEachen: Mr. Chairman, when the committee rose we were discussing new section 21, paragraph (c) of clause 4. Hon. members raised a point in respect of paragraph (c) which reads:
(c) fails to return a cheque for the amount therefor as required by section 20, or
It was argued that a person who merely failed to return a cheque should not be regarded as punishable on summary conviction. I might point out that this merely carries forward a paragraph which has existed in the Old Age Security Act. However, after considering the eloquent point made by the members of the opposition I am prepared to have my colleague, the Minister of Transport, move the following amendment:
That paragraph (c) of new section 21 of clause 4 be deleted and that the word "or" be inserted in line 30 and that paragraph (d) be renumbered as paragraph (c).


John Whitney Pickersgill: Mr. Chairman, I so move.


Herman Maxwell Batten: Is the committee ready for the question?
[DOT] (9:20 p.m.)


Some hon. Members:: Carried.


Herman Maxwell Batten: Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
Herman Maxwell Batten: Does this complete the discussion on new section 21?


Some hon. Members:: Agreed.
! 1344	COMMONS
Old Age Security Act Amendment


Herman Maxwell Batten: Shall clause 4 carry?


Stanley Howard Knowles: As amended.
Clause as amended agreed to.


Herman Maxwell Batten: The committee will now revert to clause 3, new section 17.
On clause 3-


Allan Joseph MacEachen: Mr. Chairman, the hon. member for Winnipeg South Centre proposed an amendment which was not put to the committee. He asked to have his amendment considered and suggested that if I could put the essence of it in suitable words he would be agreeable to considering my effort. I am quite agreeable to accepting the intent of the amendment, which was to make clearer the purpose of this particular subsection of new section 17.
In this particular provision we had in mind that the Minister of National Revenue would be empowered to give a report to the Minister of National Health and Welfare with respect to the income of applicants or beneficiaries of the supplement. There was some fear that this report might take the form of an income tax return from the Department of National Revenue to the Department of National Health and Welfare. Accordingly the hon. member for Winnipeg South Centre proposed an amendment to strike out all the words after "purpose" in new section 17 (3) (a), line 46, page 9, and substitute therefor: "a report as to the accuracy of the information concerning income submitted by the applicant".
During the dinner adjournment I have considered this amendment and am quite prepared to accept its intent, namely, that a report be given by the Department of National Revenue to the Department of National Health and Welfare. I have gone further and am prepared to delete the words "any information" from line 47 in the relevant subsection.
I am also prepared to delete from paragraph (a) of new subsection (3), lines 2 and 3 on page 10, the words, "or otherwise relating to any such applicant". These were the offending points, as I understood them. I am quite prepared to accept the clarifications proposed by members of the committee. Accordingly, Mr. Chairman, I will read to the committee the proposed amendment, which I have in both languages and which if acceptable might be moved by the hon. member for Winnipeg South Centre. There would be a new section
[The Chairman.]
DEBATES	December 19, 1966
17, subsection (3), paragraph (a) which would read as follows:
(a) the Minister of National Revenue or any person designated by him for the purpose may, upon the request of the minister, for any purpose relating to the administration of this act,-
This makes it clear with respect to the purpose.
-furnish to the minister or to any officer or employee in the Department of National Health and Welfare designated by the minister for the purpose, a report providing information available to the Minister of National Revenue relating to the income or income from a particular source or sources of an applicant or beneficiary or the spouse of such applicant or beneficiary; and
The reason I have deleted the word "accuracy" is that there might be a presumption in the amendment moved by the hon. member for Winnipeg South Centre that the information in the files of the Department of National Revenue was the correct information, while it is just as likely that the information provided on the form submitted by the applicant to the Department of National Health and Welfare would be accurate. It is for this reason that the word "accuracy" was removed, merely to remove the presumption that the information in the files of the Department of National Revenue was the accurate information, when it is just as likely that the information in the form submitted to the Department of National Health and Welfare would be as accurate. If this is agreeable to the committee, I would be happy if the hon. member for Winnipeg South Centre would move this amendment.


Gordon Minto Churchill: Mr. Chairman, it is very kind of the minister to suggest that I should do this, but I am not certain whether his wording is exactly what I would recommend if I had time to study it. I should like to be even more charitable and allow the Minister of Transport to move this amendment. He had such difficulty striking out a clause that I should like him now to have the opportunity of putting one in.


John Whitney Pickersgill: I am delighted and flattered, and I so move.


Herman Maxwell Batten: Order. Before the Minister of Transport moves this amendment, perhaps the hon. member for Winnipeg North Centre-


Stanley Howard Knowles: Winnipeg South Centre.


Herman Maxwell Batten: -the hon. member for Winnipeg South Centre would like to withdraw the amendment he moved earlier this evening.
December 19, 19SB	COMMONS DEBATES


Gordon Minto Churchill: Yes, Mr. Chairman, I withdraw the earlier amendment.


Herman Maxwell Batten: The amendment is withdrawn.


John Whitney Pickersgill: I so move the amendment referred to, Mr. Chairman.


Herman Maxwell Batten: The Minister of Transport moves to delete paragraph (a) of subsection (3) of new section 17 of the bill and substitute therefor:
(a) the Minister of National Revenue or any person designated by him for the purpose may, upon the request of the minister, for any purpose relating to the administration of this act, furnish to the minister or to any officer or employee in the Department of National Health and Welfare designated by the minister for the purpose, a report providing information available to the Minister of National Revenue relating to the income or income from a particular source or sources of an applicant or beneficiary or the spouse of such applicant or beneficiary: and


Gordon Minto Churchill: Mr. Chairman, I want to say a word here. This amendment goes part way toward what we were asking and is perhaps a remarkable concession on the part of the minister, who has been rather reluctant to accede to any of our requests. It does not go the full way. It still does not put it the way we wanted it put, namely, that the Minister of National Health and Welfare would submit his information to the Minister of National Revenue who would thereupon declare whether it was accurate or inaccurate. But I believe that in view of the concession made by the minister, which will improve his standing with the opposition, perhaps we might let this go through on division.
[DOT] (9:30 p.m.)


Herman Maxwell Batten: Shall the amendment carry?


Mr. Ballard:: Mr. Chairman, I am wondering about the workability of this amendment as it is now proposed. It is all right to say under this legislation that the Minister of National Revenue may-I	emphasize the word
"may"-supply this information, but if memory serves me correctly section 133 of the Income Tax Act forbids the minister or any employee of the Department of National Revenue supplying this type of information to anyone. As a matter of fact it has been a longstanding custom of the Department of National Revenue to treat all information supplied to it by taxpayers in a very confidential manner. The sort of amendment which is proposed now endangers the tradition of confidentiality between the Minister of National Revenue and the individual taxpayer.
Old Age Security Act Amendment
I believe that this year an amendment was made to this particular section of the Income Tax Act which leaves a slight loophole in the law. This was demonstrated in a recent case in Ontario where a court was able to call on an employee of the income tax department to supply certain information in connection with an estate. I cannot recall the name of the case at the moment but this information was supplied by the income tax department. I think this was probably the first instance of the department supplying such information except in a criminal case.
I suggest that this amendment does not do what the hon. member for Winnipeg South Centre intended it to do. I suggest that the leg.slation is permissive but that the Income Tax Act is self-restrictive in this matter. Therefore the suggestion of the hon. member for Winnipeg South Centre should be heeded and the amendment worded in such a way that the Department of National Health and Welfare can check the veracity of statements made by old age pensioners but on the other hand the Department of National Revenue cannot be asked to make its files available even to another government department. Therefore I think that the amendment must be reworded.


Herman Maxwell Batten: Shall the amendment carry?


Some hon. Members:: Carried.


Gordon Minto Churchill: On division.


[Stage Direction]
Amendment agreed to.
Herman Maxwell Batten: Shall clause 3 carry?


Gordon Minto Churchill: Mr. Chairman, I had an understanding with the Minister of National Health and Welfare that in answer to the Leader of the Opposition and the hon. member for Peace River and before we completed discussion of the bill in committee an opportunity would be given to exchange opinions across the house on a certain matter. I think it should be considered under clause 3 because the discussion started on Friday under this same clause. I am speaking about the constitutional issue which was raised by the two hon. members on this side of the house.


Allan Joseph MacEachen: Mr. Chairman, I am quite happy to make whatever few remarks I can on this subject at this time in the committee rather than later. Hon. members opposite have quoted frequently section 94A of the British North America Act which provides
U346	COMMONS
Old Age Security Act Amendment that the parliament of Canada may make laws in relation to old age pensions and supplementary benefits including disability benefits, irrespective of age but no such law shall affect the operation of any law, present or future, of a provincial legislature in relation to any such matter. We believe that section 94A of the British North America Act provides the authority to the parliament of Canada to legislate in the field of old age pensions. That right has been exercised by previous governments and it is a right which still exists.
If it is constitutionally appropriate for the parliament of Canada to legislate an increase of $10 a month or $25 a month in old age pensions, then this supplement is granted on exactly the same basis. We believe that the parliament of Canada has jurisdiction in the field of old age pensions. We also believe that the provinces of Canada have concurrent jurisdiction in the field of old age pensions. There is one example in Canada at present of a province paying an old age pension. The province of Prince Edward Island is now paying an across-the-board increase of $25 a month in old age pensions. This step was taken by the former government of Prince Edward Island and the payments are still continuing.
There is a provision in this bill by which any supplement or pension paid by a provincial government will not disqualify a recipient from receiving the benefits of the Old Age Security Act or the benefits of the supplement. At least in this case there is nothing to prevent the pensions payable in Prince Edward Island from continuing and the pensions proposed in this legislation from being paid to the citizens of Prince Edward Island, so that each jurisdiction is exercising its authority.
The right hon. Leader of the Opposition and other hon. members have asked me to speculate on what the situation would be if the province of Quebec were to establish a system of guaranteed income in that province. As has been pointed out by the hon. member for Dollard, we are faced with a statement of intention contained in the speech from the throne in that province, and it certainly would be unwise for me to attempt to describe a situation based on hypothetical assumptions. Members of the opposition have asked what would be the situation if such and such happened. It certainly would be very unwise and improper for me to go beyond what I have stated already. When hypothesis becomes reality, that would be the occasion to make a

DEBATES	December 19, 196S
statement on what would be the situation in these circumstances. This summarizes all I have to say on this particular question at the present time.


John George Diefenbaker: Mr. Chairman, that answer was one which must have taken considerable contrivance because it answers nothing. It bases the refusal to give an answer on the fact that the question asked is hypothetical. There is nothing hypothetical whatsoever in the declaration which was made by Premier Johnson of Quebec nor in the declaration of intention in the speech from the throne. It is of significance that the government of Canada did not act in bringing forward legislation on this question until the declaration of intention was made by the government of Quebec in the speech from the throne.
[DOT] (9:40 p.m.)
What the minister said was simply, if I understand it, that there is nothing to prevent a province from providing old age pensions, that the section in question of the British North America Act constitutes a declaration of equality, as it were, between the federal and provincial authorities on the subject of old age pensions. But he does not meet the problem by pretending there is something hypothetical about the matter. He says that the questions are founded on hypothesis. They are founded on an actual declaration. It was apparent that the reason the government rushed on with this legislation was its concern to offset the effect of any action taken by the government of Quebec. The problem cannot be brushed off in the manner the minister is attempting. What he actually says is that he will wait and see. That has been the attitude of this government. They have done a lot of waiting in respect of everything that has come forward.
In this case they face a situation where the government of Quebec contends that when it legislates on the subject of old age pensions that subject falls within the jurisdiction of the province. The provincial authorities have some ground for believing that the federal government only has jurisdiction if it has not been countermanded by subsequent action by a province making declarations and legislating.
What is the attitude of the federal government today? Are they going to pay a sum to any provincial government that takes itself out of the federal old age pension plan or assistance plan? That is the question you have to face. Has it been discussed in any way at
December IS, 1966

any of the dominion-provincial conferences? Has a legal opinion been secured from the law officers of the crown? My information is that there has been an opinion from the law officers, and the house has the right to see it. The government should produce that opinion. There is nothing confidential in respect thereof. Legal opinions used to be regarded as not available. In recent years, however, the trend has been in the direction of making such opinions available.
I say to the minister that the brush-off he gives to a matter that is serious in respect of the national unity of our country cannot be excused. We want to know where the government stands, if it knows. Surely it cannot have contemplated bringing a plan such as this before the house without having weighed the situation. Furthermore, since the declaration of the government of Quebec an anomalous situation has been created which demands that the view of the federal government be given. I impress on the minister the necessity of going farther than he has gone. We are not to be brushed off with a cursory statement that is meaningless and brief. What attitude does the Canadian government take?
The Minister of Manpower and Immigration is quite an authority on the subject of constitutionality. He had strong views about the C.N.T.U. and the right of the C.N.T.U. to bargain within the province of Quebec. Those were his declarations before he became a minister. After he became a minister he forgot all the declarations he had made in that connection in the past. I should like to hear from him because invariably he seems reluctant to enter the discussions when the question of constitutionality arises. Is he of the same view that he was three years ago which was, as I recall it, that old age pensions came within the jurisdiction of the provinces?


Richard Albert Bell: He nods his head.


John George Diefenbaker: He nods his head affirmatively. This indicates that the two ministers had better get together. I say to the Minister of National Health and Welfare that he can afford to sit at the feet of Camelia, Camelia in the form of the Minister of Manpower and Immigration. The Minister of Manpower and Immigration has effectively accepted the proposition I have advanced.


John Whitney Pickersgill: Oh, well-


John George Diefenbaker: No, I did not ask the
Minister of Transport what his opinion was,

Old Age Security Act Amendment but with his customary restraint he has propelled himself into a subject about which at the present time he has revealed no knowledge. Has he consulted with the minister of manpower in this connection?
Seriously speaking, however, this again indicates the cabinet solidarity that prevails. One wing takes one view and another takes the opposite view, and the minister says, "Do not ask me, I am not making any declaration on this question because it is hypothetical". It was not hypothetical when the Minister of Manpower and Immigration mounted his charger of provincial autonomy in this connection.
The Minister of Manpower and Immigration was one of the most eloquent of men before coming to the House of Commons. Since then he has maintained, with one exception, a discreet silence. The exception had to do with the Ottawa terminal bill. He rushed in and got into an argument one day and gave his view. The Prime Minister came along and shrugged the whole thing off to one side. The government withdrew the bill to save the Minister of Manpower and Immigration from the embarrassment which we are all glad he was saved from.


Mr. Prud'homme:: What has happened now?


John George Diefenbaker: Now there is a young man with views. I wish I had his faith, because he is tremendously interested in expressing his views outside the house in connection with this problem. He has not expressed them in the house because they would come in conflict with what the government has declared.


Rémi Paul: Come on, be serious.


John George Diefenbaker: I am trying to understand the views of the minister. I want the views of the minister speaking for the government. At the present time I have not experienced any degree of success. It is most amazing the degree to which this government, when faoed with problems, endeavours to dissipate them by not discussing them. They believe that problems go away. That is what happened to the Minister of Finance in connection with companies in Toronto. He thought the problem would go away but now it is on the doorstep. That is why this problem is now on your doorstep. You do not clear up matters such as this by saying, "Well, I am not going to discuss mundane matters such as hypothetical questions."
December 19, 1966

Old Age Security Act Amendment
[DOT] (9:50 p.m.)
I do not intend to say anything which will be in disagreement with the Minister of Manpower and Immigration or, indeed, with the parliamentary secretary to the Prime Minister, who is not present on this occasion but has expressed himself in stentorian tones about the rights of his province under this great national plan of co-operative federalism. We have plenty of time to hear the minister on this subject. We want to know what his stand is on this question. What does he intend to do? I ask the simple question: If legislation such as has been promised is brought in, is a subsidy to be handed to the government of the province of Quebec? Hon. gentlemen opposite have to face this question. This legislation will be meaningless unless it covers Canada.


Some hon. Members:: Hear, hear.


John George Diefenbaker: But you do not go about covering Canada unless, constitutionally, you have the right to do so.


Allan Joseph MacEachen: May I ask the Leader of the Opposition a question? Is there any doubt in his mind as to the constitutionality of this bill, the right of the federal parliament to legislate this bill? That is a simple question.


Some hon. Members:: Hear, hear.


John George Diefenbaker: That does not in any way give an answer to the question I asked.


Some hon. Members:: Oh, oh.


John George Diefenbaker: You have the right under that section, provided the province does not exercise its right. The provinces enjoyed a particular right when the agreement was entered into between the federal and the provincial governments to permit this amendment to the constitution. What was accepted was that the provinces would still have this right.


An hon. Member:: They do.


Mr. Fairweaiher:: Not if it is occupied.


John George Diefenbaker: We are all getting into the act. Hon. gentlemen opposite think that by hiving together, as they are doing now, they will frighten us. But even when they hive together they are separate as far as the views of some of them and the views of the Minister of Manpower and Immigration are concerned. We want to know what tire government intends to do about this. I should like to hear from the Minister of Manpower and Immigration. He is usually so vocal about these

things; he can speak without any preparation or knowledge of the subject.


Some hon. Members:: Oh, oh.


John George Diefenbaker: I should like him to do so now. Five minutes are available and I know that in five minutes he will be able to tell us everything he knows about the subject. We wait for him right now.


Mr. Gregoire:: Mr. Chairman, the commotion now going on shows how courteous the Liberal members can be.
While the Minister of Finance and Receiver General (Mr. Sharp) was delivering his budget speech, his baby budget, all members listened to him and made little or no remarks, but when the financial critic of the opposition made his comments-I believe it was the former minister of national health and welfare (Mr. Monteith)-a continuous uproar could be heard on the Liberal side. When a Liberal member is speaking, all the others listen to him politely. When the Minister of National Health and Welfare (Mr. MacEachen) was speaking earlier, I listened to him without saying a word. On the other hand, as soon as an opposition member speaks, catcalls are heard all the time on the Liberal side. It shows how polite they are.
Mr. Chairman, this is nothing new. Some will say after this: here is one who wants to destroy everything here. And that is the example set for us, or for me, during the past five years, by those rude and impolite Liberal members. That is the example they are giving us. That is why we sometimes act as they do, even though we try not to. I hear some of them whispering, yet they never rise to speak. They are perhaps satisfied with whispering because their whip tells them: Do not speak, keep quiet.


Maurice Rinfret: I would ask the hon. member for Lapointe to deal with the matter now before the committee, clause 3 of Bill C-251.


Gilles Grégoire: Mr. Chairman, I shall revert to clause 3. I said what I wanted to say on this subject and I hope that they will take heed of this lesson.
Clause 3 refers to payments made to the provinces under the Old Age Security Act. Moreover, section 94 (a) of the British North America Act has been quoted so often here, since the beginning of the debate, that I do
December 19, 1966

not think it necessary for me to read it over again. In other words, this section provides that if a particular province wishes to legislate in this field, it has priority.
In view of the fact that, as the Leader of the Opposition (Mr. Diefenbaker) so ably said a while ago, the province of Quebec has indicated, in the speech from the throne, that it intends to take over their rights in the field of old age security, I wonder why the Minister of National Health and Welfare does not include a provision in his bill granting a tax credit to those provinces who, in the future, may wish to occupy the field of old age security.
The Minister of National Health and Welfare has an answer for this: he says this is hypothetic. Mr. Chairman, it is more than a hypothetic question, since it was announced in the speech from the throne. The speech from the throne represents the will of the Queen of Canada, through the lieutenant governor of the province of Quebec. Does the voice of the Queen of Canada, heard through the lieutenant governor of Quebec, have no meaning for the Minister of National Health and Welfare? If so, Mr. Chairman, the Minister of National Health and Welfare is guilty of high treason.
Mr. Chairman, I think, on the contrary, that the intention indicated in the speech from the throne is serious and that the Minister of National Health and Welfare should amend his plan accordingly.
Mr. Chairman, may I call it ten o'clock?


Maurice Rinfret: Order. Should I rise, report progress and ask leave to sit again at the next meeting of the house?


Some hon. Members:: Agreed.

Progress reported.



BUSINESS OF THE HOUSE

Mr. Starr:: Mr. Speaker, I should like to ask what the business of the house will be tomorrow. Before I do so I might ask the government if it would consider this situation. I have been informed, as we all have, that there is a possibility we may recess on Thursday evening. Instead of sitting on Thursday evening I would ask that we sit on Wednesday evening and that we sit on Thursday only
Business of the House until six o'clock. If possible, we might conclude the business before us on Wednesday evening so that we might adjourn for the recess on Wednesday evening rather than on Thursday. In any event, if that is not possible we could sit Wednesday evening and recess at six o'clock on Thursday.
[DOT] (10:00 p.m.)


John Whitney Pickersgill: Since the house leader is not here at the moment-


Michael Starr: Here he is. It may be necessary, Mr. Speaker, for me to repeat what I said earlier. I was asking whether the government would consider sitting on Wednesday evening, instead of Thursday evening, and recess at six o'clock on Thursday. If the government saw its way clear to agree to sit on Wednesday evening we might be able to recess on Wednesday.


George James McIlraith: With respect to the business of the house, I still hope that some time we will get the old age pension supplementary payments bill through all stages and to the other place. We want to get royal assent to that bill before the Christmas recess. The other place has been ready and waiting for it for some time, and they have made it clear-


Edmund Davie Fulton: We were waiting for it for some time too.


Mr.   Mc@: Perhaps I should not deal with this digression, but I would invite hon. members who interrupt to think about what the conduct of their party has been both Friday and today with respect to that bill, especially in relation to the time spent on it and the wish, I believe of almost all members on both sides, to get it passed.
To come more directly to the question asked by the official opposition house leader, I would hope we could get that bill through so that we would not be in a position of having to wait for the other place to deal with it and so be kept here unduly late for the Christmas recess. This is the problem. It is a very real problem, as I explained to the house leaders. It is a matter of trying to get the bill over to the other place.
Then there are a few smaller bills to be dealt with and there is the transport bill which, because of its implications to a great many municipalities and their plans and to certain shippers and other interests, we are most anxious to get before the committee of

December 19, 1SS6
Business of the House the whole house and to have the discussion advanced before the recess.
As I indicated this morning, I was very anxious to be in a position to make a firm commitment for the recess and I would like to do that, but I think all hon. members will appreciate that it must be dependent on the progress made with the old age security supplementary payments bill. There is one thing I might suggest for the consideration of the house. If the old age security supplementary payments bill had passed the committee stage tonight it could have been printed for use tomorrow on third reading.


Edmund Davie Fulton: Why not sit tonight?


George James McIlraith: If the house wishes to consider that, it is up to the house. I am not pressing it particularly but I would draw to the attention of the house that it might be helpful in making progress. I believe that the house might wish to complete the committee stage tonight.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: No, no.


Edmund Davie Fulton: I don't know why you insisted on the medicare bill going through when it was not necessary.


John (Jack) Henry Horner: It is just bad management.


Thomas Miller Bell: May I ask
how the passage of certain sections of the transport bill will assist in the financial arrangements of municipalities?


George James McIlraith: Because the bill contains legislative provisions effective the first of the year, and it would remove the fear that some of them seem to be developing that the house is not willing to deal with the measure.


Lloyd Roseville Crouse: This is ridiculous.


George James McIlraith: You must remember it is some three years and 13 days since that legislation was first presented to parliament.


Lloyd Roseville Crouse: Why didn't you bring it in before medicare?


John (Jack) Henry Horner: Why didn't you postpone the medicare bill?


Mr. Speaker:: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.

Gilles Grégoire: Mr. Speaker, last December 13, I put the following question to the Minister of Transport (Mr. Pickersgill):
Mr. Speaker, I should like to ask the Minister of Transport whether it is true that the Russian government recently announced that a Russian icebreaker would be assigned to the St. Lawrence river next winter in order to make winter shipping easier for Russian ships on that river?
I was expecting a serious answer from the minister as to whether that was true or not. But all he said was that he was not a spokesman for the Russian government. Well, I think that if the Russian government had to choose a spokesman, it would not select him.
Mr. Speaker, my question was based on an article published not on the news page but as an editorial of the Toronto Telegram on December 9, 1966. This is what it said, and I quote:

Moscow also recently announced that a Soviet icebreaker would be assigned to the St. Lawrence river this winter to ease the way for the vessels of the Soviet merchant fleet. Surely Canada won't permit this. If we are to have a winter route, we should maintain it ourselves.

Mr. Speaker, this is quite clear and written not by a news reporter but by an editor. All this was taken from a notice published by the Minister of Transport in number 48 of a weekly publication which is not even published in French in spite of the statements of the hon. minister concerning bilingualism in Canada. The December 2, 1966 edition-which is fairly recent-of this publication, Notice to Mariners, contained notice No. 1023, entitled:

The St. Lawrence river-Quebec harbour to Montreal harbour-assistance of icebreakers.
Commercial shipping using the St. Lawrence river ship channel between Montreal and Quebec is hereby warned that floating aids to navigation cannot be depended upon after November 30 owing to possible ice conditions.
December 19, 1966

Commercial shipping is also warned that icebreaker assistance to ships will not be available in this area. A small force of icebreakers will be working there but this will be for the sole purpose of preventing flooding.

Mr. Speaker, the notice is very clear, icebreakers will not be there to give assistance to winter shipping but for the sole purpose of preventing flooding.
To have 11 icebreakers and not allow them to open the St. Lawrence to winter navigation and moreover to force the Russians to attend to this matter is something ridiculous and stupid.
I have here an editorial from La Presse of Saturday December 10, 1966, signed by Mr. Roger Champoux, bearing the title: "Running with the hare and hunting with the hounds".
The Gllles G rcgoire incident, which has been for 20 hours the subject of current events, has permitted the minister to give those who are interested in winter navigation on the St. Lawrence, the most ambiguous answer possible.
Closely questioned by Mr. Gregoire, the minister, who means to be wise, (and he is so), answered the following: "I do not propose to take extraordinary steps to accelerate such navigation no more than I propose to take any steps to impede it". The hounds ... are Halifax; the hare . . . is Montreal.
Mr. Speaker, another newspaper that can surely not be branded as separatist, the Montreal Gazette, said in its editorial on December 10, 1966:

The government is making a mistake in limiting the role of its icebreakers in keeping the St. Lawrence channel open in winter, up to Montreal. [DOT] (10:10 p.m.)
It is easy to understand that the government is sensitive about feelings in the maritimes. If too much is done to keep the St. Lawrence open in winter, if too much is done to make Montreal a winter port, complaints from the maritime ports will come thick and fast.
But in its policy the government is really trying to turn the clock back or, at least, is hesitant about helping it forward.

That is, Mr. Speaker, the government's policy. In that respect, the Estates General of French Canada submitted a working paper at their last meeting and here is their conclusion.
We conclude that it is unacceptable that, to satisfy the ports of St. John and Halifax, the government should impede directly or indirectly the development of winter navigation on the St. Lawrence and the Saguenay rivers, experience having shown that winter navigation is possible and economic for the big ports on the Saguenay and the St. Lawrence up to Montreal inclusive and that it is more economical for shipping to go as far as possible inland.
Proceedings on Adjournment Motion
And it is asked that the ports be open, that navigation be open. That was a conclusion of the Estates General of French Canada.
Why this refusal to open up winter navigation on the St. Lawrence? Merely not to displease the port of Halifax. And the journalist from La Presse, Jacques Pigeon, admitted it himself when he said, on December 8 last:
As one knows, that is a psuedo-problem which, in theory-
The La Presse journalist may call that a pseudo-problem, but the editorialist of that paper admitted that the problem was real.
. a pseudo-problem which, in theory, sets maritime members (the Minister of Transport represents a Newfoundland constituency) up against Quebec members.
Naturally, the government could not grant his request.
That is my request.
The Le Devoir journalist, Jean Dufresne, went further when he said, on December 8:
Indeed great pressures are being placed upon the government by maritime port interests and the department does not wish to further promote navigation on the river, for this would be detrimental to the port interests on the Atlantic coast.
Mr. Speaker, all this is inadmissible. Halifax harbour cannot prevent the development of Montreal harbour. We are told that this is due to pressures on the part of some members. I will say this to the hon. Minister of Transport: there are only two members of parliament for Halifax, and both of them belong to the Conservative party. On the other hand, Montreal has 18 members, 17 of which are Liberals, and only one Conservative. Therefore, Mr. Speaker, and I conclude by saying-


The Acting Speaker (Mr. Rinfret):: Order.


Gilles Grégoire: Never has Montreal been so badly represented by its 17 Liberal members.


The Acting Speaker (Mr. Rinfret):: I regret to interrupt the hon. member, but the time allotted to him has expired.


Gilles Grégoire: I still have one minute left, Mr. Speaker.


John Whitney Pickersgill: Mr. Speaker, the hon. member for Lapointe asked me whether the Toronto Telegram was correct in a report which contained a statement that the Soviet union
11352	COMMONS
Proceedings on Adjournment Motion proposed to send an icebreaker to the St. Lawrence. I do not regard the Toronto Telegram, any more than I regard myself, as a spokesman for the Soviet Union. The Toronto Telegram is not my favourite reading and I had not seen the story. I did make some inquiries and I understand the same story appeared last year with exactly the same consequences. Of course a Soviet icebreaker, if it came to Canada purely on a visit, would be quite welcome, but if a Soviet icebreaker came here to deal with the problems which are encountered in our territorial waters, I do not think that would be acceptable to any Canadian in any part of Canada.
As to the broader question raised by the hon. member, I did say in Halifax the other day and I repeat here that I believe the government is pursuing the right course in doing nothing at the present time to accelerate icebreaking activities, and in doing nothing to impede navigation. Those owners of ships who want to take the risks of plying these waters in winter are not impeded in any way. If they get into any kind of distress, then, as with any other ship, we do our best to meet their problems. It would cost many, many millions of dollars-


Gilles Grégoire: How much?


John Whitney Pickersgill: It would cost many millions of dollars and it is hard to estimate-


Gilles Grégoire: It would cost not one more.


John Whitney Pickersgill: I obeyed the rules when the hon. member was speaking and I ask him to hear me out. It would cost many, many millions of dollars which would have to be collected from Canadians in every part of Canada to ensure regular and reliable navigation each winter in the port of Montreal.
I am sure that some day, with technological developments, it will come. But at the present time it would be a really tremendous addition to the cost of government in Canada which I doubt would be warranted by the amount of benefit that would come to Canada from the assurance of traffic during the winter months. We have to remember that it would take a comparatively small amount of money to subsidize the traffic to Halifax and Saint John. If we are to use the taxpayers' money in one way or the other, I think we have to balance the one against the other. At the present time we are taking the view, and I think it is the right view, that ships that are ice-strengthened and want

DEBATES	December 13, 196S
to take the chance of going up to Montreal, because there has to be ice-breaking during the winter to prevent flooding, can take advantage of that, but that exceptional expenditures at the present time would not provide a benefit comparable with the cost.


Gilles Grégoire: Mr. Speaker, I would like to point out that all the Montreal members who are present applauded, which is a shame.


The Acting Speaker (Mr. Hinfrei):: Order. I would point out to the hon. member for Lapointe (Mr. Gregoire) that at this stage of the business of the house, according to standing orders a member has seven minutes to make representations; and the hon. minister or his representative has three minutes to answer. Following these two interruptions, the time allotted for debate has expired.



PUBLIC WORKS-PEMBROKE, ONT., WHARF FACILITIES

Mr. Leonard Hopkins (Renfrew Norih):: Mr. Speaker, at this time I want to put forth two or three vital arguments to explain why it is necessary to get improvements under way on the Pembroke waterfront next year. The present wharf was built after the first world war and consists of wooden piles which support a relieving platform of wooden material. The platform in turn supports a concrete cap and earth fill. When the Des Joachims hydro dam was built, the water level of the Ottawa river in front of this wharf changed considerably and the water level was lowered. As a result portions of the wooden piles and the relieving platform were exposed to the air and serious rotting set in. As the wooden supporting timbers rot, the earth fill on top drops into the water and much of this fill is carried away by the current. In past years large quantities of fill have been placed in the holes that have occurred, but in its present state the wharf has become a menace to the public. Signs stating "This wharf is in disrepair'' have been erected and flex-beams now enclose the whole wharf area. These were put in about three years ago.
At the present time there is a great danger of children being trapped underneath the relieving platform, and several near fatalities have been narrowly averted. The plain truth of the matter is that during the last 40 years very little maintenance work has been done on the wharf and it no longer provides any service. In fact, it has become a detriment to the public.
December 19, 1966	COMMONS DEBATES	11353
Therefore my first argument is based on the need for safety by removing this danger. It is now proposed to cut or remove the piles and relieving platform and drop the concrete cap, which would form a shore protection along the north and west end faces, rather than reconstructing both these sections as wharves. A new timber crib wharf, about 200 feet long, should be constructed along the east side, which is generally protected from winds, rather than constructing the north and west faces as wharves. A small breakwater, about 40 feet long, would also be required at the northeast corner to give protection from the prevailing northwest winds.
[DOT] (10:20 p.m.)
The cost of this proposal would not be greater than that of the original proposal advanced by the town about two years ago. In my opinion this is a much better scheme in that the total cost is not more than the original one and furthermore it would develop a small bay at the mouth of the Muskrat river where the town has already placed a large amount of fill to raise a swamp area to be made useful for a small boat harbour.
A fire destroyed the many boathouses in front of the government wharf several years ago and no suitable area has been developed since that time to accommodate the hundreds of boats in the area. I use the term "hundreds of boats" because I have made a check with the customs office in the town of Pembroke and have learned that there are 3,131 small boats registered for that area. This points out the great need for launching facilities on the Ottawa river. In addition, we depend a lot on the tourist trade during the summer months and want to promote this industry inasmuch as Renfrew country in general is so suitable and so attractive.
A launching ramp was placed on the shore of the bay at the west end of the present wharf but there are two major problems with this location. The bay itself has to be dredged now and will have to be dredged from time to time in the future because silt is constantly drifting into it and settling there. Second, in order to launch a boat in that location one must block a road with his car and trailer. The road serves as an exit and entrance to the adjoining municipal park. There is also no place to park cars and trailers satisfactorily. For this reason it has been proposed to move the location of this single boat ramp and put in a double launching ramp at the head of the bay at the mouth of the Muskrat River. The town would be quite willing to deed a right of
Proceedings on Adjournment Motion way to the Crown in that area. The money that would have to be used to dredge the bay at the west end of the present wharf could be used to pay for part of the cost of constructing the double launching ramp in the new location in the bay near the mouth of the Muskrat river and east of the present wharf.
I know how much this new development will mean to the safety of youth and to the large percentage of the 3,131 boat owners in the area who would make use of the new facilities. The total amount of money that has been spent on such projects as tourist wharves and launching ramps has been very small over the past years and I would like to recommend that this small amount be increased because it helps to provide good recreation for Canadians.
In conclusion, Mr. Speaker, I would like to say that I have nothing but admiration for and confidence in the present Minister of Public Works, and I would like to thank him for his excellent co-operation in the past.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: This is the Christmas spirit.


Leonard Donald Hopkins: Due to the fact that very little money has been spent on projects of this type in the town of Pembroke during the past 40 years I would appreciate it and the mayor and the council of the town of Pembroke would appreciate it if the minister could see fit to give this situation his serious consideration in 1967.


George James McIlraith: Mr. Speaker, I must begin my remarks with a word of appreciation for some references the hon. gentleman made at the conclusion of his remarks. I am completely unaccustomed to receiving that kind of comment in the House of Commons and it was indeed refreshing and a pleasure to hear it.


Stanley Howard Knowles: Even the opposition joined in.


George James McIlraith: I do not want to deal with the project in a detailed way because it seems to me that that would not be particularly helpful at the moment. Rather I want to use the limited time I have to indicate that I think there are two problems here. One relates to the existing public wharf that is in a state of bad disrepair. The department has studied this matter and at the moment is giving active consideration to undertaking the requested repairs in the coming year. That part of the problem can be settled.
11354	COMMONS
Proceedings on Adjournment Motion The second part of the problem relates to developing what is a rapidly increasing small boat requirement in the area. This involves certain works to make the harbour or dock, Very much in demand in this pleasant part of the magnificent Ottawa river, really effective. That comes under marine policy and is dependent on arriving at a satisfactory agree-
DEBATES	December 19, 1966
ment with the municipal or local authorities. That is in the process of active study and it is a question of what agreements we are able to work out to complete this matter. I hope then to give the matter active consideration resulting in appropriate cost-sharing agreements.
Motion agreed to and the house adjourned at 10.30 p.m.

Tuesday, December 20, 19G6