1966-04-22

BROADCASTING, FILMS AND ASSISTANCE TO THE ARTS SECOND REPORT OF STANDING COMMITTEE

[Stage Direction]
Mr. Gerard Pelletier (Hochelaga) presented the second report of the standing committee on broadcasting, films and assistance to the arts.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.]


[Stage Direction]
On the order:
Introduction of bills. Mr. Choquette-Bill intituled an act to amend the Criminal Code (repeal of power to commute a sentence of death).
Mr. Speaker:: The point of order raised by the right hon. Leader of the Opposition is still under consideration, so this bill will stand.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I wish to direct two questions to the Secretary of State for External Affairs. Has he learned that statements he made in committee, which have not received the approval of parliament, referring to NATO and Canada's intentions in that regard, have aroused great fear and even consternation among NATO nations?
I ask him whether he heard the broadcast this morning from the C.B.C. representative in Bonn, and whether it is the intention of the government to make changes in Canada's NATO relationships. What is the basis for the plan, to which reference was made in that broadcast, for a rotation of troops every two months? Is the minister prepared to make a statement that will restore confidence among our allies in NATO?


Hon. Paul Marlin (Secreiary of State for External Affairs):: I would not agree Mr. Speaker, that there is any necessity for making a statement to restore confidence in Canada's position in NATO. I can say without any equivocation that Canada's NATO colleagues have the fullest confidence in Canada's interest and concern for the integrity and future usefulness of NATO.
I did listen to the broadcast this morning. My statement that Canadian forces were not in Europe for all time I should hope would gather support from my right hon. friend. Of course that statement does not mean that Canadian forces are going to be withdrawn in the near future, nor was there any such implication in the statement.
The absence of a permanent settlement in central Europe requires a strong NATO. NATO's purpose in addition to providing defence is to promote a peaceful settlement. When a settlement is finally achieved-and I do not wish to hold out false hopes for early success-there will no longer be a need for NATO in its present form.


John George Diefenbaker: Years hence.


Paul Joseph James Martin: The right hon. gentleman says "Years hence". That may be so. In the meantime we must do everything we can to promote a peaceful settlement. One might hope that in the long run, with the improvement of the international atmosphere, the United Nations would come to play a larger role in preserving world peace and stability. In that kind of world the substantial deployment of Canadian forces in Europe would no longer be necessary.


Mr. Herridge:: Hear, hear.


Paul Joseph James Martin: In the meantime it is not unreasonable to hope that the Europeans will themselves assume increasing responsibility for the defence of Europe. But that depends largely on developments in Europe. While we are needed, of course, Canada has already clearly indicated that she will not let NATO down.


John George Diefenbaker: It is odd that the minister did not think of this when he made the

April 22, 1966
Inquiries of the Ministry statement to which reference was made in the broadcast. What was the basis on which anyone with any knowledge of the responsibility which rests on the friends of NATO would suggest that there is to be a rotation of forces every 60 days? What was the statement in that regard?


Paul Joseph James Martin: I listened to the broadcast this morning, and my recollection is that it said nothing about the suggestion which was made by way of a question put to me by the hon. member for Winnipeg South Centre.


John George Diefenbaker: No, he was not concerned in this. It was the minister.


Paul Joseph James Martin: The broadcast this morning referred to my statement about the limited character of NATO itself and the need for United Nations participation in its operations. With regard to the question the right hon. gentleman has asked, I will state what was said yesterday in the committee.
As has been stated many times, a number of ways of effecting improvements and economies are naturally being examined by the departments concerned as part of the adjustment necessitated by the French government's decision. There are many possibilities, but not all of them will prove practicable and desirable in the light of our responsibilities in the alliance. The suggestions made by the hon. member for Winnipeg South Centre yesterday fall within the area of possibilities that will receive consideration, but I would regard them as extremely unlikely to be implemented.


Herbert Wilfred Herridge: should like to direct a supplementary question to the Secretary of State for External Affairs. While he is considering this most important matter will he give consideration to the policy of the New Democratic party in this respect?


Paul Joseph James Martin: No, Mr. Speaker.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I would like to ask the Secretary of State for External Affairs whether the significant changes that have taken place in Europe will induce Canada to advocate appropriate changes in NATO strategy and in Canada's contribution to NATO.


Paul Joseph James Martin: Well, Mr. Speaker, as my hon. friend well knows, that is the kind of question that cannot be answered on orders of the day. We discussed

that question in part yesterday, and we will have a further opportunity to do so when we give it the attention it deserves.


John George Diefenbaker: As a supplementary question, just for the benefit of those of us who have not got the latest revised version of the N.D.P. platform in this regard, would the minister let us know what it is?


Mr. Raymond Langlois (Megantic):: Mr. Speaker, I would like to ask the Secretary of State for External Affairs whether, following this change in the structure of NATO and in the event of extra expense being placed on Canada, France has indicated any intention to defray part of this extra expense.


Mr. Marlin (Essex Easi):: Well, as I said yesterday in the committee-and I think my hon. friend was present-these matters are now being studied by the French and Canadian governments. No final decisions have been made. Negotiations have not yet begun.


Raymond Langlois: As a further supplementary question, has a final date been set for ending these discussions or is that left open?


Murdo William Martin: The French government has given a terminal date by which time an endeavour will be made to deal with the questions involved. If we cannot conclude the negotiations by April 1, 1967, I would hope we would be given an extension of time.


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquillam):: Mr. Speaker, I would like to direct a question to the Prime Minister. In view of the case of Glyn Briscoe of Port Moody, B.C., which has had a good deal of press coverage, and in view of other cases which have come to my attention and that of other hon. members, of persons who appear to be Canadian citizens being called up by the United States authorities to report for selective service, is the government planning to make any statement to clarify the position of Canadian citizens and protect them from any embarrassment in the event that they should visit the United States at any time?


Right Hon. L. B. Pearson (Prime Minister):: As my hon. friend knows, Mr. Speaker, we
April 22. 1966	COMMONS
have given this matter very serious consideration. The Solicitor General, who is particularly concerned with it, is not in the house at the moment, but I should hope he could make a statement on this matter on Monday or Tuesday next.


Thomas Clement (Tommy) Douglas: May 1 ask the Prime Minister whether he or the Secretary of State for External Affairs is making any representations to the United States in order to clarify the situation; because some of these people, first of all, have been interviewed by F.B.I. agents and, second, have been told that if they should visit the United States at any time they are liable to arrest for failing to report for selective service.


Lester Bowles Pearson: Yes, Mr. Speaker. Instructions have already been sent to our embassy in Washington to make representations based on the case which my hon. friend has mentioned.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day;
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources. Can the minister report on the claim by an Iroquois chief that Tekakwitha island, proposed for a permanent Indian pavilion near the site of Expo, was donated without the authority of the Indian council on the Caughnawaga reserve?


Mr. Speaker:: Order. This question should be placed on the order paper.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Real Caouelie (Villeneuve):: Mr. Speaker, may I put a question to the hon. Minister of Transport?
In view of the new policy of the government which consists in postponing developments in Canada, can the hon. Minister tell the house if this new program will affect the construction of an airport at Val d'Or or can he assure me that it will actually be built this year?


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I would hope not, but I think it would be prudent for me to make inquiries before giving a final answer.
DEBATES	4153
Inquiries of the Ministry HIGHWAY SAFETY



RECALL OF DEFECTIVE AND UNSAFE AUTOMOBILES

[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Industry and is based on the fact that recently the automobile industry in the United States was obliged to recall defective and unsafe cars. Has the industry in Canada given the minister a detailed report on why there have been no recalls for similar models in Canada, and can the minister report to the house on any findings he has had from the industry?


Hon. C. M. Drury (Minisier of Industry):: Mr. Speaker, I have not yet had a detailed report, but when one is received I will be glad to make a statement.


William Heward Grafftey: Has the minister or anyone in the government inquired of the industry why these recalls are not being made in Canada? I am not saying they do not have a good excuse, but is anybody asking the industry why these recalls should not be made in Canada when similar recalls have been made in the United States?


Mr. Speaker:: Order, please.


William Heward Grafftey: Has any member of the government asked? Yes or no? Has anybody in the government asked the industry why?


Mr. Speaker:: Order, please.


David Réal Caouette: On a point of order, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: The right hon. Leader of the Opposition on a point of order.


David Réal Caouette: I am on a point of order.


Mr. Speaker:: We can have only one point of order at a time. The right hon. Leader of the Opposition has the floor.


David Réal Caouette: Was I not recognized?


Mr. Speaker:: Order, please.


John George Diefenbaker: Mr. Speaker, I submit that the hon. member for Brome-Missisquoi

April 22, 1966
Inquiries of the Ministry asked a responsible and reasonable question of the government. The minister stated in answer to that question that the matter was under consideration, but he was asked whether any representation has been made by the government to the automobile manufacturers concerning the changes being made in the United States, to preserve the lives of people within this country. Surely there was nothing unreasonable in that question. I submit with the greatest deference that it was a proper question and that the answer is one that Canadians want to know, because of the tremendous massacre which is taking place today on the roads of this country.


Mr. Speaker:: Order. The question put by the hon. member for Brome-Missisquoi was of course along the same line as the argument submitted by the right hon. Leader of the Opposition. It was not a question; it was an argument, and this is the reason the Chair could not accept it.


John George Diefenbaker: Mr. Speaker, I ask the question. Has any representation been made by the government to the manufacturers asking for the information and the assurance that was referred to by the hon. member for Brome-Missisquoi? There is no argument in that.


Lester Bowles Pearson: The original question was, has any member of the government made such an inquiry. I will be glad to look into the matter.


John George Diefenbaker: Very good. Then we have the answer.


David Réal Caouette: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: Order. The hon. member for Villeneuve.


David Réal Caouette: On a point of order, Mr. Speaker. For the last several weeks, and I think this is for the information-
1English1


Mr. Speaker:: Order, please.


David Réal Caouette: Mr. Speaker, I rise on a point of order. Following the question asked by the hon. member for Brome-Missisquoi (Mr. Grafftey), I think that this point of order can enlighten the house.
Some people are trying to downgrade the automobile industry in Canada and to play

politics with that matter. The hon. member for Brome-Missisquoi is sending up a trial balloon which is clearly and purely political.
The automobile industry is not responsible for accidents; road hogs, somewhat like Conservative members-


Mr. Speaker:: Order.


David Réal Caouette: -are to blame for accidents.


Mr. Speaker:: Order.


Hon. Marcel Lambert (Edmonton West):: That is not a point of order; sit down.


Mr. Speaker:: Order. I am convinced that after thinking it over the hon. member for Villeneuve will admit that there is not really any point of order. He submitted an argument which, to a certain extent, answers the one which was put forward by the hon. member for Brome-Missisquoi.
It is obvious that we are moving toward a debate on that matter. The question period is not meant for debate but for asking questions. I feel that there is not any point of order about the matter which the hon. member is bringing up at this time.


David Réal Caouette: Mr. Speaker, I again rise on a point of order. The hon. member for Brome-Missisquoi does not know anything at all about automobiles.


William Heward Grafftey: Mr. Speaker, I rise on a question of personal privilege, the first I have raised in eight years in this house. The hon. member for Villeneuve has raised a point regarding my motives in this issue. I think most members in the house know about my motives. I would say to the hon. member that in so far as he is an automobile dealer, he has a conflict of interest when he gets up and speaks in this house.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please.


Mr. John Addison (York North):: Mr. Speaker, I rise on the same point of privilege and say that I have been an automobile dealer for the last 10 years and have no conflict of interest in this respect. The safety of the people of Canada is my concern, just as much as it is the concern of the hon. member on the other side of the house. I should also like to point out to the hon. member-


Mr. Speaker:: Order, please. Two questions of privilege have been raised, and I suggest that we return to other matters which might be considered by the house at this time.
April 22, 1966



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I wish to put a question to the Minister of Transport.
Could the minister tell the house if, following the instructions given to the railways by the board of transport commissioners to the effect that almost all empty cars be sent to western elevators, he has received numerous protests and whether he intends to do something to alleviate the shortage of cars at Montreal elevators?


John Whitney Pickersgill: Mr. Speaker, I cannot accept the premise of the hon. gentleman; therefore it would be impossible to answer the question.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Joseph P. O'Keefe (St. John's East):: Mr. Speaker, my question is addressed to the Prime Minister. Can the Prime Minister inform the house what steps are now being taken to deal effectively with the disastrous situation at Bell Island, which affects over 9,000 people?


Lester Bowles Pearson: Mr. Speaker, since the announcement was made that the mine would be closing at the end of June, throwing I think 800 or 900 people out of work at Bell Island, the government at once considered this as a matter not only of seriousness but of an emergency character, and has been in touch with the government of Newfoundland, other government agencies and the Atlantic Development Board. I hope to be in a position to give a more detailed reply to my hon. friend on Monday.



ABSENCE OF MINISTERS AND SECRETARIES DURING ADJOURNMENT DEBATES

[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to direct a question to the Prime Minister. Is it now government policy not to have ministers or their parlia-
Inquiries of the Ministry mentary secretaries present to answer queries that are raised in the ten o'clock adjournment debate? If not, will the Prime Minister impress upon his ministers the necessity to have someone present to answer questions on these occasions?


Lester Bowles Pearson: So far as I am aware, Mr. Speaker, all ten o'clock questions have been effectively dealt with by the government.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Not last night. There was no minister or parliamentary secretary here. It was just contempt of parliament.


Mr. Aiken:: A supplementary question, Mr. Speaker-


Mr. Speaker:: Order, please. The Parliamentary Secretary to the Secretary of State.


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I raise a point of order.
In the same connection, I was here last night to answer a question and the one who raised it was not. This has happened on two occasions in the case of the member for Gaspe (Mr. Keays).


Mr. J. R. Keays (Gaspe):: Mr. Speaker, on a point of order, the hon. member for Bona-venture refers to the evening of March 31 when I did not show up for the debate. Could I remind the hon. member that I was not informed, although I probably should have been in the house at six o'clock; but I did not take the advantage which one of his colleagues in the former parliament took, of circulating the same accusation throughout my riding, bearing in mind that this person is at present employed as a public servant-


Mr. Speaker:: Order, please.


Gordon Harvey Aiken: Mr. Speaker, I had a supplementary question on the same subject. I should like to ask the Prime Minister whether he will arrange in the future to extend to hon. members who raise questions on the adjournment motion the courtesy of seeing that a minister or a parliamentary secretary is here to answer the questions.


Lester Bowles Pearson: Yes, Mr. Speaker.


Gordon Harvey Aiken: Last night no one was present to answer the question.

April 22, 1966
Inquiries of the Ministry


Lester Bowles Pearson: I will do that, Mr. Speaker, and I will also do my best, with the help of members on the other side of the house, to see that when questions are raised the members who raised them will be here, too.


Some hon. Members:: Oh, oh.


Stanley James Korchinski: A supplementary question, Mr. Speaker-


Mr. Speaker:: Order, please. It seems to me this is not a proper discussion. The question was raised by the hon. member for Mackenzie and a reply was given. It seems to me the matter should be considered closed. It is developing into a debate on whether questioners are here to pose questions at ten o'clock and ministers are here to answer the questions posed. The rules are there, and I believe there is no point whatsoever in pursuing the discussion on this matter.


Stanley James Korchinski: In reply to my question, Mr. Speaker, the Prime Minister indicated that ministers are always available. I should like to know why the minister was not available last night.


Mr. Speaker:: Order, please. The hon. member for Bow River.



FEDERAL SUPPORT FOR APPLICATION FOR OLYMPIC GAMES

[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: should like to direct a question to the Prime Minister. I wonder if he would advise the house whether any member of his government, any official from the Department of External Affairs or any other official is attending the meeting in Rome of the international committee which is deciding whether Canada should get the winter games at Banff.


Lester Bowles Pearson: Yes, Mr. Speaker. I should like to check, but I have been informed that an official from Ottawa and our ambassador are both attending this meeting. I should add, if I may, that the Minister of National Health and Welfare will be in Rome. I believe he is leaving this afternoon, and he will be there also.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: I should like to ask a question of the government house

leader. A situation has developed whereby a number of members who wish to speak in the budget debate will be precluded from doing so because we have agreed to terminate this debate at six o'clock today. In order to give these members, or as many of them as possible, an opportunity to speak I wonder if the government house leader would seek the unanimous consent of the house to sit during the luncheon period.


Hon. G. J. Mcllraiih (Minister of Public Works):: I would be happy to make such a request so there would be an opportunity for hon. members who wish to participate in the debate to do so. I hope they can make their remarks brief. I ask for an order of the house now.


Mr. Speaker:: Does the house so order?


Some hon. Members:: Agreed.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Michael Starr: I wish to ask a question of the Parliamentary Secretary to the Minister of Labour, in absence of the minister. I should like to ask whether the government is prepared to introduce an amendment to the 40-hour week legislation so that all those who are engaged in the interprovincial motor transport industry can be covered by this legislation?


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: I believe the minister replied adequately to this question on several occasions last week, if the hon. member for Ontario would refer to Hansard. In any event I will bring it to his attention when he returns on Monday.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberl):: should like to direct a question to the Minister of Industry. Has a formal contract announcement been made regarding the Bonaventure repairs? If not, when can we expect this announcement?


Charles Mills (Bud) Drury: An announcement has not been made, Mr. Speaker, but I expect it will be shortly.
April 22, 1966


Thomas Miller Bell: Will the minister check into reliable reports emanating from Halifax this morning as the Bona-venture left Halifax with Department of Industry officials aboard, that the estimate will probably go over $8 million?


Charles Mills (Bud) Drury: I shall be glad to do so, Mr. Speaker.



HOUSING


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to ask the Prime Minister a question arising out of a previous question I asked, in connection with the situation created by a lack of National Housing Act mortgage funds. Has he received a unanimous communication from the Ontario members of the National House Builders Association to the effect that they deplore the serious situation, critical to the house building industry, and urging immediate government action to re-establish the available direct N.H.A. mortgage loans in all areas? The Prime Minister said the matter was before the government, and it is one of such urgency that I wondered if he was in a position to answer today.


Lester Bowles Pearson: I am not in a position to answer today but I appreciate, as my right hon. friend does, that it is a matter of great urgency. It is being treated as such. I hope the minister will be able to make a statement on it at the beginning of the week.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: should like to direct a question to the Minister of Finance. In order that Canadian car parts manufacturers may compete more effectively and on a fair basis with their United States counterparts, would he not seriously consider removing the 11 per cent sales tax on production machinery?


Hon. Mitchell Sharp (Minister of Finance):: I suggest to the hon. member, Mr. Speaker, that this is a matter that can be discussed during the Budget debate. I shall listen very carefully to representations that may be made. Many have been made already.
4157
Inquiries of the Ministry EXTERNAL AFFAIRS



VIET NAM-MEETINGS OF INTERNATIONAL CONTROL COMMISSION

[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: I should like to ask the Secretary of State for External Affairs if he would inform the house whether discussions are still continuing amongst members of the international control commission with a view to a conference seeking peace in Viet Nam, or whether those discussions are now at an end.


Paul Joseph James Martin: The discussions are not at an end. I had one on Wednesday morning.


David Lewis: May I ask a supplementary question. In view of the developments in Viet Nam, can the minister inform us whether any progress has been made since the last time there were such discussions, or are we still at the same impasse with regard to the attitude of Poland in the matter?


Paul Joseph James Martin: It would be wrong to say that Poland was the obstacle, but I think my hon. friend will understand it is not possible for me to give any details about this matter at this stage.



RHODESIA-REQUEST FOR REPORT ON COMMONWEALTH MEETING

[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: I should like to ask a question of the Secretary of State for External Affairs which I hope will not be embarrassing. I should like to ask whether he has anything to report with regard to the recent meeting in London of commonwealth representatives concerning Rhodesia.


An hon. Member:: Help him up.


Paul Joseph James Martin: I just want to say to the Prime Minister that the reason I hesitated was that yesterday my hon. friend fired a loaded question at me which got me into some trouble, according to the Leader of the Opposition. I have decided from now on-


John George Diefenbaker: You need the Prime Minister's help.


Paul Joseph James Martin: -to pay perhaps even greater attention to questions that might not be intended to be loaded but undoubtedly have that result.


John Whitney Pickersgill: The answers are sometimes loaded.

April 22, 1966
Inquiries of the Ministry


Paul Joseph James Martin: My hon. friend the Minister of Transport says that sometimes the answers are loaded.


An hon. Member:: He ought to know.


Paul Joseph James Martin: As my friend says, he ought to know. I must bring this litany to an end. There was a meeting of the sanctions committee yesterday, but we have not had a report as yet.



AGRICULTURE


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, may I direct a question to the Minister of Forestry?
We do not hear very much about the ARDA program being carried out, I believe, throughout Canada at the present time. Is the department going on with its surveys in the province of Quebec? Where are the experts now? Where are the government experts working now?


Marcel Joseph Aimé Lambert: You will see; there is an election in the province.


Mr. Speaker:: I would suggest to the hon. member to put his question on the order paper.


David Réal Caouette: Mr. Speaker, I would like to have an answer today and not next week. I would like to know where the experts are now.


Mr. Speaker:: If the hon. member wants information, he can always get in touch with the minister concerned, but I do not think his question can be put at the present time.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Associate Minister of National Defence. My question relates to a matter concerning which certain assurances were given to us when the departmental estimates were before us a few weeks ago. Has the government made a decision to allow wartime service for pension purposes in the case of permanent force personnel?


Hon. Leo Cadieux (Associate Minister of National Defence):: The department has made a decision and made a recommendation to the government, which I believe is up for consideration now. The appropriate legislation should be before the house very shortly.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. G. L. Chatterton (Esquimalt-Saanich):: My question is for the Minister of Finance. Will the minister give consideration to referring the bill to integrate the various governmental pension plans into the Canada Pension Plan to a standing committee so representatives of the various civil service organizations may give evidence?


Mitchell William Sharp: Yes, Mr. Speaker. I will not give a definite undertaking that it will be referred, but I shall certainly take the suggestion under consideration.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, I rise on a question of personal privilege. I regret that I could not give you notice of my question, because I have just read what I wish to refer to in Hansard.


Michael Starr: Order.


Joseph Julien Jean-Pierre Côté: During the budget debate the hon. member for Hull (Mr. Caron) was making a speech, and he was interrupted by the hon. member for Villeneuve (Mr. Caouette).


Mr. Speaker:: Order, please. If there is a question of privilege arising out of something that happened yesterday I suggest to the minister that even though he has taken notice of the matter now for the first time, under the rules he still has to give prior notice to the Chair.


Michael Starr: In writing.


Mr. Speaker:: Perhaps if he will do this in writing, according to the rules, it can be brought before the house later.


Stanley Howard Knowles: It could be debated during the lunch hour.
April 22, 1966


Mr. Cole (Longueuil):: Mr. Speaker, I rise again on a question of privilege. Last night during the budget debate the hon. member for Hull (Mr. Caron) made a speech.


Michael Starr: Order.


Mr. Speaker:: Order, please. The minister was kind enough to give the Chair written notice of the question of privilege, but as he knows the rules of parliament require one hour's notice. This is one hour that did not have seven days.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: I rise on a point of order, Mr. Speaker. May I ask respectfully, if Hansard does not appear in the hands of hon. members one hour prior to the opening of a sitting, will we not be permitted to raise questions of privilege based on our reading of Hansard when we do receive it?


Mr. Speaker:: This is of course a very interesting point for hon. members. If we went along with the suggestion of the hon. member it would require every member to immediately get down to work and read the whole of Hansard the moment he received it, to make sure that the point of privilege could be raised at the first opportunity.


An hon. Member:: We should read our own speeches.


Mr. Speaker:: I still feel that any time an hon. member takes notice of something he should give one hour's notice. The rules require one hour's notice before any matter such as this may be taken up by the house. The rule is there. It does not make exceptions for matters which may be raised as a result of reading Hansard. I suggest that the rule should be followed in this also.


John George Diefenbaker: Would it not be possible, because of the understandable desire of the minister to place this matter before the house, for the house to give unanimous consent to his doing so?


Mr. Speaker:: If that is agreeable the Chair will be very pleased to hear the question of privilege.


Joseph Julien Jean-Pierre Côté: I thank hon. members of the house. To me this is an important question of privilege. While the hon. member for Hull was dealing with the subject of bilingualism the hon. member for Villeneuve said the Postmaster General was the worst.
Inquiries of the Ministry Then the hon. member for Hull said, "the Postmaster General was a good guy", and I agree with that. The hon. member for Villeneuve came back and said, "He is a unilingual who does not believe in bilingualism". My question of privilege is based on the fact that I believe in bilingualism. I speak and understand English quite well, and I am trying very hard to improve my French.


Some hon. Members:: Hear, hear.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: I have a question for the Associate Minister of National Defence, in order to take some of the burden away from the Secretary of State for External Affairs. My question is this. Is mobile command sufficiently integrated to provide from its static headquarters for a more rapid rotation of troops in Europe, in order to demonstrate the mobility of our Canadian forces and to gain experience in so doing?


An hon. Member:: That is a loaded question.


Mr. Speaker:: Order.



PAN AMERICAN GAMES-POSSIBLE VISIT BY QUEEN

[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, my question is addressed to the Prime Minister. In view of the fact that the Pan American Games Society would like to have Her Majesty the Queen visit Winnipeg for the games, can the right hon. gentleman say now where negotiations stand with respect to a possible visit to Canada by Her Majesty next summer?


Lester Bowles Pearson: I have already indicated to the house that we expect and hope that Her Majesty will pay a visit to Canada during centennial year. The details of that visit have not yet been worked out.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: I have a question for the Minister of Northern Affairs and National Resources. I would ask the minister whether he would look into a

April 22, 1966
Inquiries of the Ministry published report that a magistrate in Tahsis, British Columbia, has threatened to place the entire membership of an Indian band on the interdicted list. In his capacity as Superintendent of Indian Affairs, if this action has taken place will he make the strongest possible representations to the Attorney General of British Columbia against this discrimination and infringement of individual rights?


Mr. Speaker:: Order, please. The minister I am sure has noted the representation made by the hon. member for Comox-Alberni.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. R. R. Soulham (Moose Mountain):: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources, prompted by the many urgent representations I have received from various persons in Saskatchewan.
Now that the first anniversary of his announcement of a second national park for Saskatchewan has rolled around, can the minister say where this park is to be located and when its developement will commence?


Mr. Speaker:: Order, please. That question should be placed on the order paper.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture arising out of a statement made yesterday by the Minister of Citizenship and Immigration. May I ask the minister if the government, or his department, has looked into the problem respecting agricultural workers, and is he satisfied that all requirements for these workers can be met by Canadians, other than in southwestern Ontario?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, my department is continually looking into this problem and discussing it with various provincial officials and other provincial authorities. If we do find that in other areas they require workers from outside Canada, and if these needs can be met by a supply of workers from outside Canada, we would be prepared to look into any individual problem at any time.



REQUEST FOR CONSIDERATION OF TRESPASSING PROBLEM

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: wish to direct a question to the Minister of Agriculture. I know the question of trespassing comes under provincial jurisdiction, but I am asking this question at the request of some quite important organizations in this country. The point I raise has caused a great deal of trouble across Canada in the various provinces.
Would the minister place this question on the agenda of the next meeting of the dominion-provincial agricultural conference so it could be discussed with a view to finally evolving some formula to provide better relationships between farmers and hunters, who usually trespass?


Mr. Speaker:: Order. The representations made by the hon. member have been noted by the minister, and if the hon. member thinks a reply to this question is required that could be obtained by putting the question on the order paper.



REPORTED SPEECH BY MINISTER WITHOUT PORTFOLIO

[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: should like to direct a question to the Prime Minister and ask him whether the contents of the speech by the Minister without Portfolio on April 20, as reported in yesterday's press, with regard to what goes on in parliament, the attitude of the members, their thinking and so on, represent the views of the government, as expressed by the minister?


Lester Bowles Pearson: Mr. Speaker, I noticed a report in the press about the speech in question. To me it sounded like a very interesting speech, and I have asked the hon. minister to give me a copy of it.


John George Diefenbaker: Would he table it so we could all see it?



EFFECT OF POSSIBLE U.K. ENTRY INTO COMMON MARKET

[Stage Direction]
On the orders of the day:
Maurice Allard: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs, and my question is not dangerous.
April 22. 1966

In view of the instructions contained in the Speech from the Throne prepared by the Labour government regarding the entry of the United Kingdom into the Common Market, could the minister tell the house whether he has recently received any communication in this connection or whether he is having any discussion with the London government, or its representative, on the conditions of entry and on the implications, advantages and disadvantages for Canada and other Commonwealth countries?


Mr. Speaker:: The hon. member's question is very general in nature and unacceptable in its present form.
tEnglish1



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: My question is directed to the Prime Minister. I wonder whether the Prime Minister could inform the house when he expects to set up the special inquiry on security about which we have been so concerned?


Lester Bowles Pearson: At the moment, Mr. Speaker, consideration is being given to the terms of reference and the personnel of such inquiry. I hope there will be an announcement about this shortly.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Hon. J. A. MacLean (Queens):: Mr. Speaker, I would like to direct a question to the Minister of Transport. I regret that I have not been able to give him notice of it. Perhaps he can take my question as notice if he is not now in a position to answer it. Has his department an observer present at the U.S. federal aviation agency hearings which I believe are taking place at the present time, regarding safety measures on transatlantic flights.
I ask this in light of the views of the International Federation of Air Line Pilots Associations that the minimum allowed spacing between jets on transatlantic flights is not adequate for safety.


John Whitney Pickersgill: Mr. Speaker, I know that the proceedings in question are being very closely followed by the officials of my department.
The Budget-Mr. Bower Whether an official of my department is there
as an observer I shall have to inquire about. We are all deeply concerned about this matter.
May I be permitted to say that we appreciate the great public apprehension that has been caused about this matter, and we are pursuing every aspect of it just as thoroughly as we can. I am sure all hon. members realize that the Canadian air lines would be very concerned indeed if they felt they were doing anything that would endanger the safety of the passengers on transatlantic flights.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, April 21, consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. J. O. Bower (Shelburne-Yarmoulh-Clare):: Mr. Speaker, I have followed with interest the presentation of the budget by the Minister of Finance and the debate which has ensued. Taking into account the varied group ideologies of this house, it seems to me just about every aspect of its impact has been explored.
It is now apparent the budget attempts to do too many things in too many different ways, and that the end product may well have a sort of gigantic cancelling out effect. The temperatures in the economically overheated areas, where the minister apparently wishes to lower the fever, probably will not respond to the too bland treatment, and areas such as Nova Scotia beset by economic chills, may slip into a deep freeze. The classic monetary policy of tight money which is being and presumably is to be applied as an anti-inflationary move does not lend itself to selective regional application. It will impinge on the frailer economic zones as a chilling frost. Fiscal policies of hold-back and stretch out of government capital expenditures and/or grants hit areas of weaker economy disproportionately hard.
The Minister of Finance offers the country a deficit budget which is inherently inflationary. But he apparently implies that because the deficit contemplated is less than that envisaged in last year's budget, the present budget is therefore corrective of the threatened inflationary spiral and the consequent acceleration of the rise in the cost of living.
April 22. 1966

The Budget-Mr. Bower
What I do not find in either the budget, the estimates or the minister's remarks is a hard undertaking that selective fiscal moves are assured to assuage the deflationary effects the over-all policies will have in areas such as the maritime provinces. I do not have to labour the point of the undesirability of weakening an already relatively fragile economy. Dr. Deutsch, in the second annual report of the Economic Council of Canada, has stressed adequately the essentiality of ironing out regional economic disparities in order to avoid the perpetuation of a series of poverty pockets.
I believe the government could well take a page from President Johnson's book and note that, confronted as he is with every problem we face in Canada and more, he has not lost sight of the need to apply corrective measures in the solution of the problem of Appalachia, a situation parallel in many ways to the one Canada has in her Atlantic provinces.
Like most hon. members, I suppose, I took advantage of the Easter recess to visit broadly across my constituency. I was tremendously impressed with the consternation almost universally expressed by my constituents. This consternation stemmed from their conviction and fear that the budget presaged the administration of remedies calculated to counteract an illness not affecting their area, one which is certainly not affected by an overheated economy.
Shelburne-Yarmouth-Clare, the constituency I have the honour to represent, embraces the western end of our province and constitutes one of its areas of relatively low personal income, little industrial development and a disproportionally high percentage of the population aged 60 and older. Fishing, fish processing, wooden ship and boat building, the tourist industry, the ancillary service industries and the retail trade provide the bulk of employment. There is only one sizable manufacturing plant in the area, a cotton mill employing about 500 people.
A 1965 study of Yarmouth's economy, subtitled "A Preliminary Socio-Economic Assessment" by a group of four professors from the departments of economics, education and commerce of Acadia University points out that during the 1951-1961 period the natural increase in population, the excess of births over deaths, was 3,249. The census

reports, however, show the population increased only by 592. The Acadia group makes special note that-
-there exists a marked similarity between the structure of society and the economic problem experienced (in Yarmouth county) in the adjacent counties of Shelburne, and Digby of which latter, Clare is a municipal unit.
[DOT] (12:00 noon)
This all adds up to the fact that the constituency as a whole has a high proportion of elderly folk, most of whom live on small fixed incomes, are peculiarly vulnerable to rising living costs, and can easily be forced back on the municipalities for support. It also adds up to another load on the municipalities-the burden of educating the youth of the area who, in very high proportion, move away, as indicated by the static population, just as they are about to become productive. To provide good educational facilities and retain high quality teachers in competition with more prosperous sections of the province already extends to the limit municipal financial resources deriving from a narrow tax base.
During the past ten years it is true that Nova Scotia and Shelburne-Yarmouth-Clare have moved ahead notably, but as a province and as an area within a province they are insufficiently robust to withstand a prescription of fiscal sedation. I conceive Nova Scotia, Mr. Speaker, to be the great wharf of Canada and it seems to me that its potentials as such have yet to be exploited. For example, there is something incongruous in the fact that Canada, one of the greatest per capita exporting countries in the world, has a seagoing merchant marine one-twelfth the size of small, landlocked Switzerland. What would Russia give to have fine, ice-free harbours such as Shelburne and Yarmouth? With coal reserves, the possibility of hydro power, and perhaps even offshore deposits of oil and gas, I say the day can come when Nova Scotia and areas such as Shelburne-Yarmouth-Clare can broaden their economic base and raise their prosperity level to the national plane.
In my immediately foregoing remarks, Mr. Speaker, I have given myself the liberty of stroking with a pretty broad brush and treating of a future considerably beyond the purview of this year's budget. However, I have done this deliberately in order to justify, by demonstrating potentialities for future selfreliance, the immediate things that the government should consider this year instead of a Mother Hubbard application of tight money
April 22, 1966	COMMONS
and construction holdbacks. In areas, and there are probably many of them in Canada, where the economy is relatively low I contend all such strengths as exist at present should be fortified to offset as much as possible the debilitating effects I foresee in the Budget introduced by the Minister of Finance (Mr. Sharp).
To continue with my constituency as a sort of case history, Mr. Speaker, I say that the infrastructural needs such as wharves, dredging operations and other facilities calculated to fortify and strengthen the fishing industry should be met. Additionally, projects fomenting the regionally very important tourist industry should be prosecuted vigorously. The growth of our fishing fleet, both in respect of numbers and size of the fishing units makes once adequate structures inadequate and has brought about a need for additional shore installations. Interest in large scale operations involving fish processing plants with heavy fresh water requirements can be encouraged by governmental assistance in providing water supplies to towns and areas unable to afford such installations but which otherwise are attractive sites for such plants and other secondary industrial enterprises.
The tourist business is another place where federal assistance on an increased scale could do much to mitigate the over-all depressant effect of the Budget in areas such as Shel-burne-Yarmouth-Clare. In this connection I should like to mention the new national park in Nova Scotia, originally known as the western Nova Scotia park but now known as the Kejimkujik national park, I presume because it was not extended into western Nova Scotia, the point of entry for tourists from the United States by sea and air. This park should be enlarged to cover a portion of the existing contiguous Tobeatic game sanctuary which lies in parts of Digby, Yarmouth and Shelburne counties.
Access roads, on the basis of the roads to resources idea, should be built into the park from the towns of Shelburne, Yarmouth and Digby. Federal assistance along these lines would greatly stimulate the tourist trade and further, by providing easy access to fine recreational facilities, make the towns of the constituency more attractive sites for secondary industry so vitally needed to broaden the economic base. Full development of the tourist industry demands adequate travel facilities and I am disappointed to find the government lethargic in seeing that improvement is made along these lines.
DEBATES	4163
The Budget-Mr. Gilbert
It is my understanding that improvement to the Yarmouth airport to bring it up to high standards as befits an entry point for increased tourist travel from the United States is scheduled for 1970. The provision of modern aircraft of the D-9 type for the United States-western Nova Soctia service is also currently postponed in programming until 1970. Far from postponement these are moves that should be implemented at the earliest possible date.
The second ferry service from the United Stated to western Nova Scotia, a must both from a tourism point of view and to facilitate the export of the products of our fisheries, seems to be experiencing an extremely long period of gestation. The delay in getting this facility under way impedes the full development of our role as Canada's ocean playground. When I point out that tourism brought into Nova Scotia some $58 million in 1965 and the total landed value of our fish catch in the same year amounted to $48 million, perspective is given to the potentialities of the former activity.
The short term program of aid on the part of the federal government for a low economic temperature area in a low temperature economic zone which I have outlined, with appropriate changes to suit specific circumstances, I submit should be a government policy under this Budget in all such like areas and zones in the country. I would hope the government will see to it that through its departments and agencies such a policy is implemented.
It is no more than an investment against the danger of areas of income disparity being pushed below such levels as to demand future expenditures of a handout nature vastly exceeding in cost the more positive approach of providing now the means of more productivity and the road to national economic parity.


Mr. John Gilbert (Broadview):: Mr. Speaker, I must say that a new member experiences some amusement in hearing a government supporter speak praisingly of the Budget presented by the Minister of Finance (Mr. Sharp) and pat him on the back only to be followed by a member from the opposition parties, speaking in condemnation of the Budget and kicking the Minister of Finance in the lower part of the body. Probably the truth lies somewhere between the praise and the condemnation. There can be little doubt that the Canadian economy is in quite a different position from what it has been for
4164	COMMONS
The Budget-Mr. Gilbert some time. When one reads that we have just finished our second year in which the gross national product grew by over nine per cent in terms of current dollars, that is, without taking into account increases in prices of goods and services, and that in each of the years 1964 and 1965 the gross national product, after the effect of price changes on the physical output of goods and services was removed, still rose 6 per cent, most Canadians would be pleased with the steady rate of growth of our economy.
[DOT] (12:10 p.m.)
With the increased growth in the economy the unemployment rate has been reduced from about 5| per cent two years previously to 3i per cent today. The unemployment fiures indicate that today there are about
350,000	unemployed.
Along with this general increase in prosperity for Canadians price rises unfortunately began to accelerate. Two years ago the rate of inflation in price increases was 2 per cent a year. Last year it rose to 3 per cent and now it is 4 per cent. These increases have not been equal for all commodities, however, and the greatest increase was found in food prices which increased 6 per cent.
Wages, however, did not rise at dangerous rates in the past year. Average hourly wages in manufacturing rose just over 4 per cent. Had the productivity performance been better this would not have been inflationary at all. In the construction industry, however, there were definite wage cost pressures. For the past 12 month period available, November, 1964 to November, 1965, construction wages rose 10 per cent.
This, of course, is directly related to the present boom in the construction industry and the widespread shortage of many skilled tradesmen. The building boom has been created by the increase in residential building, particularly in the apartment field, and in business generally associated with the rapid growth in the economy in the past few years, but also by the centennial projects and Expo '67.
Looking back one can reasonably state that the economy is very healthy indeed but with the caution that price pressures and some bottlenecks are developing, particularly in the construction field. Unemployment has fallen sharply in Canada but it still has a long way to go to achieve the position of no unemployment.
DEBATES	April 22, 1966
The question arises as to what is the outlook for 1966. According to the government's forecast in the Budget speech, real output of goods and services cannot be expected to rise by more than about 5 per cent this year compared with 6 per cent in the last two years. Its reason for the reduction is that most of the slack in the economy has been taken up and future increases in the economy can only come from new resources, both natural and human, being brought into productive use.
The obvious question arises: If there are still 350,000 people unemployed, how can it be said there is no slack in the economy? The quick answer is that the unemployed are now largely unskilled or have skills not presently in demand while the shortages are in skilled labour in other fields. This situation can to a large extent be blamed on the government not having taken effective action in the manpower field. The Economic Council of Canada in its first annual review suggested that with an average rate of growth of 5J per cent in the economy and with price rises kept down to 2 per cent, unemployment in Canada should be able to be reduced to 3 per cent. However, in spite of growth higher than what was targeted for by the Economic Council, unemployment is not being reduced as much as it should be and the effects of high demand are higher prices rather than less unemployment at present. Unfortunately this situation cannot be changed overnight or by a single Budget. It can only be met by the government instituting effective manpower policies involving training and retraining, mobility assistance by grants rather than loans and effective placement and research services as suggested by the Economic Council.
In the meantime the object of the Budget is to nudge the economy down very slightly about 1 per cent of the gross national product. This Budget must be criticized not so much for its aggregate effect on the economy in the forthcoming year but rather for the make-up of the Budget from the point of view of (a) the fairness of its provisions, (b) the shaping of the country in the future and (c) its effects on productivity.
Some of my colleagues have dealt with various aspects of the Budget and have pressed for a prices review board, an adequate manpower program, full medicare and an immediate commencement of the Canada Development Corporation to take care of

April 22, 1966

The Budget-Mr. Gilbert
some of the problems confronting Canadians today.
I should like to direct my mind to the effect of the Budget on the construction industry and in particular the housing problems facing Canada today. In doing so, Mr. Speaker, I would ask you to note that the keynote of the message of the Minister of Finance is restraint on increases in spending rather than stimulus. His objective is a steady and sustained growth in our economy, and he warns that if we do not by one means or another moderate the increase in aggregate expenditures the most immediate penalty we shall suffer is an inflationary increase in prices.
On page 3379 of Hansard in his Budget address on March 29 he states:
As a practical matter in our society this danger cannot be avoided by trying to regulate prices and wages. We must deal with the basic issue which is at the present time an excess of spending power over what is available to meet demands. It is this excess which causes rising prices, costs and profits and which harms those in our society whose economic power and bargaining position are weak.
Most of the measures introduced by the Minister of Finance suggest that in his opinion demand is the trouble. So the cure is to take away money from business and those citizens who have some discretionary spending power. This will reduce the demand for capital goods such as machinery and new buildings and for consumer goods. This seems an odd way to deal with the economy in which one of the obvious problems is an acute shortage of money by many Canadians.
When one remembers there are 350,000 unemployed in Canada and that according to the 1961 census some 23 per cent of Canadian families had an income of less than $3,000 a year and some 700,000 Canadians had an income of less than $1,500 a year, or in other words 25 per cent or about four million Canadians live below the poverty line, one wonders where the surplus of money is. However, the government is determined to exercise restraint in many sectors and amongst its restraint measures it has pledged to cut back its own proposed construction program by some 10 per cent and has asked the provinces and municipalities also to take a serious look at their plans. What is the effect of this measure?
In the past two years the construction industry has pushed ahead at a very great rate. Investment has been high in all phases of the economy, for homes, apartment buildings, schools and recreational centres, plants,
factories and office buildings. The forecasts for the coming year show that the boom is likely to continue. Added to these natural causes are the many projects associated with the centennial of confederation celebrations and Expo '67. Not surprisingly this surge forward has resulted in sharp rises in construction costs and some corrective action became necessary. However, it is the method by which the government did it which we in the New Democratic Party question.
The major emphasis in the 10 per cent cut-back in federal construction plans is in the public sector. In the private investment field the government has taken some action to slow down the boom, but the fact remains that public and social capital are being cut back more rapidly than is private capital. The government is apparently giving a higher priority to the production of private capital than to the creation of social construction. Although both private and social capital are needed in our economy, the weight of evidence as brought forward by the second annual review of the Economic Council of Canada is that social capital in many fields probably in the long run leads to higher productivity within the economy than does investment in private capital. It is the problem of productivity that is becoming the most crucial in our economy, and its slow growth is one of the major causes of the general rise in prices.
[DOT] (12:20 p.m.)
Productivity can be raised by better education. Productivity can be raised by new processes developed through basic research. The government should carefully reflect on its priorities in this field. It should make certain that the genuine needs for social capital in this country are not sacrificed to short run private advantage and profit. Unfortunately the Budget proposes cutting federal government construction by 10 per cent; yet the anticipated cut-back in construction in the private sector as a result of the budgetary proposals is only anticipated to be between 3 and 4 per cent.
What is the present state of housing today? The Minister of Labour (Mr. Nicholson), who is in charge of housing, stated in Toronto in December, 1964:
For all the talk about what we intend to do, for all our efforts, nearly 100,000 Canadian families live every waking moment of their lives under housing conditions that are really appalling-a disgrace to the communities in which they reside. The same 100,000 families cannot find other accommodation on the open market at rents they can
April 22, 1966

The Budget-Mr. Gilbert afford to pay. and 20 per cent of all our occupied dwellings have very primitive bathing and toilet facilities. This. I suggest, is real poverty.
And quite apart from the despair and degradation of blight and decay, these neglected areas impose an unnecessary drain on the civic economy. Municipal services and other facilities cost more to provide, while assessments must decline. The extra overhead is subsidized by the taxpayers of the entire municipality-assessments must be increased in good areas to offset diminishing tax revenues in the run-down neighbourhoods.
Mr. Speaker, you would agree with me that this is not a bright picture. In the 1965 annual report by the president of Central Mortgage and Housing Corporation he stated that residential construction increased in 1965 but the increase was small compared with gains of previous years. It reflected a high level of housing starts in the first half of the year followed by a decline which almost completely offset the early gain. He claims that the fall was attributable to the shortage of mortgage funds as a result of a heavy demand for investment funds for other purposes. Housing starts for 1965 were 166,565 units compared with 165,658 for 1964, an increase of .5 per cent compared with 11.5 per cent in 1964 and 14.2 per cent in 1963.
The cost of houses financed under the National Housing Act increased in 1965 as it had in each year since 1961. This was largely because of rising prices for materials and rising construction wage rates and to some extent because of larger houses. These factors, together with supplementary costs such as legal fees, combined to raise the average cost of N.H.A. financed houses to $17,402 in 1965 from $16,478 the previous year.
He said that the characteristics of persons buying N.H.A. homes remained relatively unchanged from the previous year. The average borrower's income was $6,655; he was 35 years of age and had two children. He also noted that more than 65 per cent of all housing started in 1965 was financed by conventional mortgage loans by life insurance and trust and loan companies and that N.H.A. loans were increased on single dwellings from $15,600 to $18,000. He stated that the demand for housing remained at a high level throughout the year and if funds had been more plentiful in the latter part of the year 1965 could have ended with another substantial increase in housing starts, particularly in starts of dwelling units.
He also noted that amendments to the National Housing Act which were made in 1964, aimed at elimination of slum and blight areas and to meet the housing needs of the

aged and the poor, were finding acceptance and development by provinces and municipalities. We in the New Democratic Party welcome these changes and hope for an increase in the use of these provisions by the provinces and municipalities.
What are the changes needed to have an active housing program to fill the needs of all Canadians? The fundamental problem with regard to Canadian housing policy under the National Housing Act has been the almost exclusive concentration on loans for new houses. Although there is nothing wrong, and indeed much can be said for a federal agency to lend money and ensure mortgages at fair and reasonable interest rates to buyers of new homes, this attacks only one small part of Canada's housing problem. The problem is that only people who are fairly well off can afford to buy new homes even at the N.H.A. mortgage rate, currently 6f per cent, which is about 1 per cent below that usually paid for conventional mortgages.
The result of this can clearly be shown by a look at the average income of borrowers under the National Housing Act. The average income of N.H.A. borrowers was $6,375, far above the national average income. Thus those who had most benefited under the National Housing Act were in the higher income brackets, a situation which Professor James Murray, in a study for the Ontario Association of Housing Authorities, called "socialism for the rich and private enterprise for the poor." For the person in the higher-middle income bracket the National Housing Act has been a fair success.
For those in the lower income groups, however, housing policy in Canada has been a total failure. Since public housing plans were started in 1949, a total of only 10,625 public housing units had been completed to the end of 1964. In 1964 C.M.H.C. approved only 790 units in federal-provincial housing projects. This was down from the 989 units approved the year before. But what is the need in Canada? Professor Murray's study estimated that by 1981 the need will be for 1 million low income dwelling units and an additional 1 million units for so-called moderate income persons earning between $3,000 and $4,800 a year. The output to date has not even scratched the surface of the needs for publicly assisted housing in Canada.
In addition, special problems also exist with regard to housing for our elderly people. This group in some cases consists of lower income people. Recent studies indicate that
April 22, 1966

inadequate provision has been made across Canada for the housing needs of elderly people.
The New Democratic Party suggests the following program for housing in Canada, particularly concentrating on the needs of those in the low and middle income groups for whom private enterprise has failed in the provision of adequate housing:
First, there should be a federal ministry of urban affairs and housing. The present set-up of having housing as an appendage to the Department of Labour is not adequate. This need was also ably stated by the member for St. Paul's (Mr. Wahn) immediately after the last election and serious consideration should be given to this suggestion. Central Mortgage and Housing Corporation would report to the minister in charge of this department. It would have the function of suggesting the over-all housing policy for Canada, spelling out the objectives in legislation to be presented to parliament. The department would also be responsible for financing houses through loans and grants.
The department would be responsible for social, economic, technical and design research into housing and community problems. It would be responsible for co-ordination of the measurement of national housing needs as forwarded by the provinces and the determination of national priorities and programs, again with the necessary consultation with and agreement of the provinces. One would like to see C.M.H.C. taking an active part in implementing the plans set forth by Professor Murray with regard to housing needs determined for the year 1981.
Second, N.H.A. loans must be available to purchasers of existing homes whether they lie within a designated urban renewal area or not. Often people in the lower and middle income groups cannot afford the purchase of new homes but would be able to finance the purchase of older homes if mortgages were available demanding reasonable down payments and bearing low interest rates.
[DOT] (12:30 p.m.)
There is a striking example of the above need in my own riding of Toronto Broadview. There is an urban renewal plan development in my area which involves the three levels of government. Many problems have arisen in the first phase of development. The foremost has been the question of compensation to the home owner. The federal government takes the position that it is not responsible because, in the words of the minister, it
The Budget-Mr. Gilbert acts as only the banker or financer of the development. The provincial government refers the problem to the municipal government and in turn the municipal government claims it is bound by the expropriation act which is a provincial statute.
The result has been a failure by all levels of government to recognize a particular problem of urban renewal development programs concerning fair and adequate compensation to these owners. The expropriation act provides compensation only on the market value of these houses at the time of expropriation and does not take into account the compulsory taking or any replacement costs these people suffer.
This has resulted in owners having to pay at least 20 per cent to 25 per cent more than they have been offered for their homes for comparable homes in other areas. Many of these people are elderly and live on fixed incomes, and the necessity of moving and assuming mortgages renders a great hardship on them. Therefore I would ask the Minister of Finance to consult with the Minister of Labour who is in charge of housing and to press for and facilitate necessary changes by the provinces and municipalities to make more adequate compensation on the basis of market value, compulsory taking and replacement costs. Another step in the right direction would be taken if these persons who buy older homes were allowed N.H.A. mortgages at reasonable interest rates. Justice demands this type of treatment.
At this time I might mention also a necessary amendment to the National Housing Act which has been urged by the Ryerson Polytechnical Institute. A letter to me and to my colleagues in this party, dated March 11, 1966,-I am sure the Minister of Finance received a copy because he represents a riding in Toronto-reads as follows:
The board of governors of Ryerson Polytechnical Institute respectfully request your support to the amendment of the National Housing Act at the earliest possible moment which would permit loans to Ryerson for the purpose of construction of residential facilities. We realize that Ryerson is not alone in this matter and that the amendment would probably include an eligibility for such loans to post-secondary, non-degree granting institutes of which there are several across Canada. At present such institutes do not quality for N.H.A. loans.
Our present enrolment is 4,200 day students. Half of these students come from outside metropolitan Toronto. The availability of suitable private residential facilities is not good and is deteriorating yearly. As you are perhaps aware, the board has recently announced an expansion

April 22, 1966
The Budget-Mr. Gilbert program involving an expenditure of approximately $27 million for new instructional and administrative facilities. We are projecting for an increase in enrolment to the 10,000 level within the next five years. Our need is, of course, pressing Put is obviously growing at an alarming rate. Both the federal and provincial governments are contributing to this expansion program but our first concern is to provide instructional space. None of the $27 million I referred to will be devoted to residences. The board feels it must now pursue actively the matter of residential facilities.
We have requested the government to make this amendment and have every hope it is receiving favourable consideration. However, we earnestly ask your support and initiative in the early passage of such an amendment. Since you are a member of parliament for metropolitan Toronto, the sons and daughters of your constituents are not as directly concerned about residence facilities as those coming from outside the Toronto area. However, we are taking the liberty of writing to you because Ryerson has assumed such an important role in this province and in this area and because the need is growing at such a rapid rate.
We of the New Democratic Party, Mr. Speaker, ask the government to take immediate steps to bring forth the necessary amendment to meet this very urgent problem, whether it prevails in Toronto or elsewhere.
The third step with regard to housing which we in the New Democratic Party feel is necessary is that the N.H.A. interest rate must be reduced from the current 6J per cent. This high interest rate means in effect that people are paying for their houses an amount double that which they originally paid for their homes. The high interest rate also stretches out the period of payment, in some cases to 25 or 30 years, which must be very discouraging to couples buying a home. If they are 40 years of age when they buy it. this means they will be 65 or 70 years of age before the payments are completed. Some purchasers have told me, "I will never live to see the house paid for."
If the Minister of Finance suggests that a reduced rate of interest would be unjust to people who are already paying the higher rates, then I respectfully suggest that all Canadians should be allowed to claim as an expense against their taxable income any mortgage interest payments during the year. In so far as persons paying rent are concerned, they should be allowed 7 per cent of the rent paid during the year. I might say that a bill has been introduced in the state of New York which covers this particular matter. These measures would in some degree relieve the financial hardship experienced by people buying homes or paying the high rents of today.

I suggest also, Mr. Speaker, that in all N.H.A. mortgages there should be an allowance of approximately $2,000 for the purchase of fixtures, furnishings and appliances by the purchaser. This amount should be included in the N.H.A. loan. As the situation stands today, people buy a new home and then are immediately faced with the necessity of purchasing these new appliances and furnisnings and paying very high interest rates to loan companies. This operates as a hardship upon them in keeping up the payments on their home.
Fourth, housing must be made available to persons at a cost of not more than 25 per cent of their income. Rentals for public housing projects must be limited to this figure.
Fifth, public housing projects must be fairly small in size and integrated with the rest of the community. In the United States much of the effort in public housing has been wasted because the projects were made too large and isolated in special areas. This has caused the formation of ghettos for the less fortunate members of the community and will likely hinder the prospects of children coming from such homes being able to move upward on the economic ladder. It is much more egalitarian, much more in keeping with democratic ideals, to keep different sections of the community in communication with each other. Isolating neighbourhoods by income levels is one way of defeating this aim of our society.
Sixth, special emphasis must be given to adeauate housing for the elderly. In particular. there needs to be an increase in availability of suitable accommodations for unattached people, that is, widowed, elderly people, at a cost which they can be expected to afford.
Seventh, urban renewal plans must be totally co-ordinated and provision must be made for persons displaced by slum clearance. These persons must be guaranteed good housing at rents they can afford when they are moved out of their present premises. Much new housing for lower income persons must be provided before really serious attempts at slum clearance can bring the type of social progress visualized by the planners.
[DOT] (12:40 p.m.)
Eighth, loans for home improvements should be encouraged more than in the past. The 1965 annual report of C.M.H.C. indicates that for the fourth consecutive year there has been a decline. Homes in good repair are the
April 22, 1S66
best defence against blighted areas and also provide an avenue of employment during seasonal lay-offs in some industries.
We in the New Democratic Party, Mr. Speaker, feel that these measures would go a long way to solving Canada's housing needs. The building of homes helps in the building of character and a sense of pride and accomplishment which should be experienced and enjoyed by all Canadians.
tTranslation]


Mr. Gaston Isabelle (Gatineau):: Mr. Speaker, allow me to repeat in this house what has been heard over the last two weeks from all Canadian citizens. The budget tabled a few weeks ago by the Minister of Finance (Mr. Sharp) is the best balanced budget we have had for several years. It did not hold any great surprises, but it did contain a most timely one.
That surprise was the practical application of a principle which everyone and especially the leaders admit in se, but that no one had thought of putting into practice. That principle is the one that recognizes the small wage-earners, the economically weak, who make up the greater part of our population.
They are the ones who, in fact, must benefit from social and economic programs and who must pay less for those services. Those who can afford it understand that they must pay more, which is normal, to ensure the survival of those social and economic programs essential in any country. That is at least, Mr. Speaker, the opinion of the people I met in the riding of Gatineau. You know that as a result of studies made recently by ARDA in my riding and neighbouring ones, the riding of Gatineau was judged one of the most in need of help among all the ridings in eastern Canada.
On behalf of my constituents, I wish to thank once again the Minister of Finance for remembering them.
Allow me now to talk about a question which concerns more than one department and which will no doubt be the subject, in the years to come, of controversial and bitter discussions, of more or less partisan stands, but which, I am sure, will go its own way just the same; it is the creation of a federal district including part of the province of Ontario and part of the province of Quebec.
Right away I see people pricking up their ears to better hear those strange ideas and pursing their dips With worry, ready to answer such remarks spitefully. However, let us
The Budget-Mr. Isabelle keep calm and not say more for the moment except that, in principle, I am as much against the creation of such a district if it were to become a reality tomorrow morning. I know that most of the neighbouring cities and municipalities in the federal capital area to be included in the district do not consider very favourably, at the present time at least, that new geographic entity.
Several municipal councils have said publicly, through their mayors, that they are against the project, using various arguments ranging from a loss of autonomy, political intervention, racial drownings, loss of advantages and personal prestige to a host of others. All that is true but we must realize that one of these days we will have to face a very important problem which already hovers like a menacing cloud over our heads in this area.
I am glad to learn that studies are already under way on the Quebec side in this connection and that the value of such a project in the near future will be fully considered.
The establishment of a federal district, both geographically and politically, is premature at the present time, but the question should be put otherwise. Would we be in favour of setting up a federal district on a psychological level, so to speak?
As a member representing a large part of the city of Hull in Gatineau riding and as a representative of the greater part of the country where are located N.C.C. properties on the Quebec side, I would object to the establishment of such a district immediately. But I would not hesitate to foster this idea right now, while postponing its actual, geographical or political implementation until later, in a more or less distant future.
But inasmuch as:
(1)	The Quebec side gets its share of federal buildings;
(2)	The development of the huge territory of the national capital on the Quebec side is carried out more promptly and the driveways, roads and parks now lying fallow are developed within five years;
(3)	An extensive network of schools-an important condition-is built throughout the national capital area, both on the Quebec and on the Ontario side. These would be federal schools restricted to students seeking a career within the civil service. Their schooling standards would be similar and they would be bilingual and bicultural. This would: be the

4170	COMMONS
The Budget-Mr. Isabelle implementation of all suggestions and reforms advocated for a century in our country. The schooling would reach the secondary level.
(4)	The construction of two bridges across the Ottawa river at Lemieux island and between Britannia and Deschenes, two strategic locations already recommended by N.C.C. committees, to be carried out simultaneously. This is how I visualize the psychological federal district. This project will influence the future action that the residents of the national capital area will be called upon to approve.
(5)	The new capital is to become bilingual in every respect, economically, socially, culturally and administratively.
If the federal district does not come into being in the near future, the N.C.C. is to blame, because it has failed to make the appropriate recommendations to the various departments, especially the Public Works Department to which it is answerable.
Needless to say, it owns land on both sides of the Ottawa river and never advised any Department to put up buildings on the Quebec side.
The duties of the commission are set down in black and white as follows in the 1961 Canada Year Book:
Co-ordination and development of public lands in the national capital region are undertaken by direct planning and construction by the commission's staff; by co-operation with municipalities; by provision of planning aid or financial assistance in municipal projects; and by advising-
And please note this:
-the Department of Public Works on-
Here is the point.
-the siting and appearance of all federal government buildings in the 1,800-sq. mile national capital region.
Nothing says that the commission should build on one side more than on the other, and I do not see why the Quebec side should be less developed than the Ontario side. It is part of the national capital region.
Admittedly, the N.C.C. has done much to develop the lands in the national capital region; however, in the light of the above, I hope it will do more and a lot better in future if it wants the Quebec part to participate in this dream already half a century old.
In conclusion, please allow me to say a few words about this region rich in historic past and natural beauty which has inspired poets and writers.

DEBATES	April 22. 1966
I could quote scores of authors who have admired the marvels of this area in the Gatineau. But I shall quote only two. The first, Mr. Herbert Marshall, appearing in 1956 before the parliamentary committee charged, as we know, with reviewing the work of the Federal District Commission, as it was then called, whose responsibility it was to implement the National Capital Plan and report thereon:
Easy access to this magnificent natural area from Ottawa and Hull is a valuable asset not only to the inhabitants of the area but to visitors from near and far. Its natural wild beauty, variety of flora and fauna, picturesque sites, lakes and streams, mountainous terrain, everything contributes to make it a heaven for tourists, campers, skiers and for all those who love untouched nature and all this fills the needs of the calm and appeasing beauty of the Canadian woods.
Here, on the doorstep of the capital, can be seen at its best, spring renewal, teeming birdlife, flowers, wild animals and trees in the summer, the glorious colours of fall, the clean and stimulating whiteness of winter scenes.
And what about my second testimonial, possibly more eloquent than the first, given by Mr. Percy Sparks whose forebears arrived in this area before Colonel By.
Ten minutes after leaving the parliament buildings. the visitor will cross the Ottawa river and land at the very spot where Philemon Wright, the first white settler, established his colony in 1801. From this spot, he plunged into a wild area of 80,000 acres of wooded mountains, lakes and rivers where life beats in the raw and whose aspect has changed very little since the day Wright first gazed upon it.
Are they not beauty spots of nature which, one of these days, will have to be filled with federal buildings to embellish this unique and enchanting garden located only five minutes from the Canadian parliament buildings? Greber, who was a geographer and a poet, described also that marvel which is a true reflection of the appearance of the whole country, in its full geographical dimensions, the beautiful area of the federal capital consisting of Quebec and Ontario.
These are some of the reasons which could prompt me to ask the National Capital Commission to make recommendations to the Department of Public Works for the construction of federal buildings on the Quebec side of the national capital. It is not a matter of courtesy but of justice toward the people who have always given their best service to Canada and often under difficult conditions, which there is no need for me to recall here, I mean the French speaking people of the national capital area.
April 22, 1966

Just think that over a period of ten years, from 1954 to 1964, out of $221 million spent in the Hull area and on the Ontario side, only $9 million were allocated to the Quebec side.
Those are the remarks I wanted to make as my contribution to this debate.
[DOT] (12:50 p.m.)


Mr. Jack A. Irvine (London):: Mr. Speaker, I should like at this time to say a few words with regard to the Budget and perhaps some other measures of a fiscal character which were not included therein. I will make them as brief as possible because I know there are many other hon. members who wish to speak.
It is my impression that this is a negative Budget. This Budget was conceived in desperation and born in doubt. It is fraught with the prospect of giving birth to a baby Budget at any time. I am sure many people across this country were concerned about the changes in income tax. I think they were alarmed to find that the tax has been increased in the middle and higher income range. I think they were even more alarmed that greater reductions had not been made affecting those in the lower brackets. It seems to me that the dividing line is around $4,000.
In 1965 the previous minister provided for a decrease in income tax amounting to approximately 10 per cent. The increase this year is in the neighborhood of 14 per cent. I know it must have been merely incidental that in the period between came an election.
I have a chart here which contains some interesting figures. It was printed in the London Free Press on March 30, 1966. It shows that a single person, with no dependants, receiving $1,300 a year would last year have paid $15 in income tax. This year he will be able to make a great saving. He will pay only $13. This $2 represents approximately half a cent per day. In the $3,000 bracket a married person would have paid $65 last year. This year he will pay $59, a saving of $6. I do not think this sum will go very far in buying the necessities of life, the cost of living being what it is today.
Here is another example. A married person, with two dependants, earning $3,000-and there are many of them throughout this country-would last year have paid $22. This year he will be paying $20, a grand saving of $2. Six out of ten people are paying more money. The other four save $1 or $2 or $5. I contend that this is nothing but an election hoax.
The Budget-Mr. Irvine
I was concerned, as I know everyone was, that there was no increase made in old age security payments. I wonder why. The Prime Minister (Mr. Pearson) himself is reported to have said during a recent election campaign that he would make available $100 a month or up to $125 where necessary. I presume he meant on the basis of a means test.
The election is now ancient history. The amendment we moved during the debate on the address to increase these payments to $100 was voted down. The Prime Minister himself voted against his own election promise. How can the senior citizens of this country live on $75 a month as many of them are forced to do? The government has raised our salaries. The salary of the Prime Minister has been raised. Why would they forget old age security recipients?
I contend that the acceptance of such an increase would not cost as much as we are led to believe. Ninety per cent of the money involved in the extra $25 per month would, I am sure, go back to the general economy. A large proportion of this amount would find its way back into the federal treasury through different taxes. Many of these people, through no fault of their own, are hard hit by the rising cost of living. Spiralling costs make it almost impossible for them to live with any semblance of dignity. Someone once said there is nothing to fear from the present government while we are in a state of prosperity and nothing for us to hope for when we are in a state of economic distress.
I have here a clipping from today's Ottawa Journal. Incidentally, April 22 is an important day because it is the anniversary of the first battle of Ypres. The article reads as follows:
[DOT] (1:00 p.m.)
Hundreds of Veterans of the 1st Canadian contingent will gather in Ottawa to pay tribute to their comrades who fell victims to the horrible gas attack, and also to renew acquaintances.
The Prime Minister and his Liberal government should also remember that these surviving members are not only "veterans of war," but that all are now "old age pensioners," many of whom no doubt are feeling the pinch on $75 per month, and no doubt many will ask themselves was the sacrifice really worth it.
With regard to the refundable tax of 5 per cent on corporation profits over $30,000 I should like to ask, is this designed to place a brake on industry and on productivity and, if it is, how is the word "brake" spelled? Is it b-r-e-a-k or b-r-a-k-e? I am sure many firms would use this money for expansion if they
April 22. 1966

The Budget-Mr. Irvine had the opportunity, particularly the newer, growing institutions, and I would think this measure is encouraging them to borrow on the collateral they would receive from this saving at say 7 per cent, though the government is only going to give them 5 per cent on their own money. This could place another 2 per cent handicap on the operation of such businesses. I ask, how long can we continue to tax industry? Do we not by doing so price ourselves out of some very valuable foreign markets?
I would also refer to an item in the Budget dealing with the tax on production machinery and building materials. We are happy to see that the tax on certain production equipment is to be reduced by 6 per cent effective April 1 next year and that it will be entirely wiped out on April 1, 1968. But what about the tax on production machinery? The minister was questioned on this subject today and said he was taking the matter under advisement. I hope he gives it serious thought because it is my opinion that this tax is making it difficult for many Canadian firms to compete in foreign markets.
No intimation has been given that the tax on building materials might be changed, and I wonder why. It is a tax which is directed to everyone. It is a tax on a very sensitive sector of our economy. A young couple who want to build their first home at an approximate value of say $20,000, of which half would be made up of building materials, will pay a penalty of $1,100 for the privilege of buying a stake in our country. This is a great hurdle for them to jump and I ask, why impose such a penalty, particularly on young people?
This tax is daily increasing the cost of building. It is increasing the cost of building factories and manufacturing plants and of retail building. It is reflected in the retail prices of merchandise and it is one of the greatest inflationary pressures we are suffering at present. In my opinion the government is not only condoning this but actually is aiding and abetting it.
I have here another article written by a man well known in this house, Robert W. Needham of the London Free Press, dealing with restraints in the budget. He says:
On the demerit side, it can be argued with validity that it dulls . individual incentive and hence could lead to a reduction in productivity- a prime necessity in conquering inflation. It can be contended as well that the taxes of themselves can be inflationary, in this instance by inspiring demands across the board for wage increases.

Mr. Sharp further might be accused of a psychological and political blunder in his tax treatment of individuals as opposed to corporations:	the
specific charge, discrimination.
The article goes on to say:
This special levy on corporate earnings will be payable for 18 months and then will be handed back, with interest at the rate of 5 per cent, during the succeeding 18 to 36 months depending upon the state of the economy.
This device is intended to "freeze" a modest portion of business cash profits that otherwise would flow into capital expenditures.
In effect it is a compulsory savings scheme that will result in amassing a fund of $250 million. This will be freed and utilized to stimulate future economic growth.
However, the political if not the economic weakness of these two aspects of Mr. Sharp's program should be apparent. It might be summarized in the question: why tax increases for individuals, but compulsory savings for corporations?...
Mr. Sharp has promised to stand in the wings ready with a "baby budget" of readjustment should the need arise.
It's to be hoped that this will be unnecessary for what it would mean in terms, not of expansion, but of recession.
I should now like to mention one other thing upon which I have received many representations, as also has the minister. I myself have made representat.ons to him. It is with respect to the tax on jewellery. I have here a letter from the large jewellery firm of John A. Nash and Son, London, Ontario, which states:
The war has been over for 20 years. At that time a special excise tax was put on so-called luxury items. It has since been removed from cars, refrigerators and almost everything but on retail jewellery items.
We all feel-the retail jewellers-that this is a discriminating tax and should be removed.
I would respectfully ask the minister that he give this serious consideration.
I should now like to speak about N.H.A. loans but I will not expand on the subject because several hon. members have already spoken about the difficulty. But I must make strong representations because the difficulty is country-wide. It affects every community, including the riding I have the pleasure of representing. I have here an article from the London Free Press of April 15 which reads as follows:
Finance Minister Mitchell Sharp's crystal ball appears to have been accurate. His brakes on the construction industry arrive at a time when it was reaching high gear, exceeding the record 1965 level by over 12 per cent, and when building trade labour was extended to meet the demand.
Home and apartment builders say that the cost of homes and apartments with sales tax and high priced mortgage money is making housebuilding tbo costly. Sharp's directives may spread sparse construction workers over the extensive contracts
April 22, 1966

for industrial and institutional structures which are running far ahead of past years.
Home builders are complaining-and possibly rightly-that residential construction is being used unfairly by governments as means of controlling the economy. It is a field that is most readily reached and doesn't materially affect national productivity like controls on industrial building would, as Mr. Sharp well knows.
In spite of the housing contractors' complaint the forecast for general construction is that the second quarter of 1966 may equal the first quarter. There is some concern that the taxing measures may cut off some of the advance by the third quarter.
I contend that these are discriminatory things. I know the minister does not introduce them with that thought in mind, but I take this opportunity to advance my argument.
Lately we have heard a lot about the high cost of living and I am wondering what is going on in this direction. Why did the minister not see fit to take some action to halt the rapidly spiralling cost of living? During the world war II we had an institution known as the wartime prices and trade board. Perhaps we need a peacetime prices and trade board because somehow we must protect our position as a trading nation. We do not have to read the consumer price index to realize that goods are costing more. Anyone can go to a grocery store and there find that in the last six months such staples as bread, milk and canned goods have gone up 10 per cent in price.
[DOT] (1:10 p.m.)
If you go to buy a suit of clothes today, the price has advanced at least 10 per cent compared with what you would have paid for it one year ago. About this time of the day many of us find that we would like to go for our lunch, and within the last month in our own dining room the prices have advanced 20 per cent. The evidence is everywhere. How far can you go without some control? Personally, I would like to make it clear that under normal circumstances I do not favour controls, but for a short time it might be a wise thing. In this way perhaps we could do something about protecting the older people and also maintaining our foreign markets.
These are some of the things which I think must be said today. I am going to close with an item from the Tillsonburg News of April 1, 1966. I thought this was a very pointed statement, and I do not say it is pointed because it has to do with a man by the name of Sharp. It says:
Mr. Sharp talks of others curbing their spending but still plans to spend $743 million more than
The Budget-Mr. Gauthier last year, which amounts to $150 million more than he plans to take in, even after increasing taxes and slowing down capital construction projects. One might have expected a little bit more in the way of governmental good example when it comes to belt tightening.
I would close, Mr. Speaker, by saying as I did at the opening of my remarks that it is my impression this Budget was conceived in desperation, born in doubt and is fraught with the prospect of giving birth at any time to a baby Budget. I hope the minister, when he finds that the time has come, will not hesitate to do so. After all, we have to do certain things. One is to check inflation and the second, among many others, is to correct the inequities in the Budget.


Mr.   C.-A. Gauihier@Roberval: Mr. Speaker, I shall take a few minutes, during this Budget debate, to draw the minister's attention to the manner in which some funds are spent in the face of the war on poverty.
I shall not take time to repeat all the fully justified criticisms made by the hon. members who spoke before me. This Budget, as seen by a small businessman, is the funniest and most ridiculous ever produced by financiers. The first paragraph of the official communique, for instance, can be brought down to this: We are a highly productive country; the demand is too strong; let us stop producing.
Do you not feel that this is strangely similar to what Mackenzie King used to say: There are too many products; let us throw them into sea or burn them, so that starving children cannot have them.
It is always the great principle of high finance. Destroy the goods to impoverish, burn the food to starve the people, and starve the people to better enslave them.
Yes, Canada has to meet a great challenge, that of a strong demand, with unlimited production capacity. But is too cowardly to meet this challenge, and instead of rolling up its sleeves and getting down to serious business, it would rather sit idly and hold back, like the soldier on the front who, in the face of the oncoming enemy, would rather turn about and run. That is the emblem of the courage shown by the present government.
This shows, once again, how this government sneers at the people, dismissing all its nice promises made during the election of November 8, 1965.
Nothing for old age pensions which he had promised to raise to $100 a month, even $125,
April 22, 1966

The Budget-Mr. Gauthier according to some Liberal candidates; nothing tor family allowances which should be $25 a month at least; nothing to remove the discriminatory 11 per cent sales tax on building material; nothing for joint programs which the Prime Minister had promised to discontinue, but instead new ones have been established; nothing to solve the thorny question of receipts for charitable donations, except that in the future each presbytery will have to tack up its federal licence above its front door, just like a car owner has to display his licence plates; nothing to raise income tax exemptions to $2,500 for single persons and $5,000 for married couples.
An income tax reduction has been announced for taxpayers with an average or below average income. According to the old Age Security Act, an average income, in the opinion of the government, is $2,200 a year for a married couple; in other words, income tax is reduced in the case of persons not earning enough. How ridiculous can you get? After these so-called reductions, the minister candidly announced that he will get from the average workers a surplus of about $120 million a year. Is that enough for you, the small fellows? But do not touch the big fellows. For example, the tax on heavy production machinery and equipment will be reduced to 10 per cent. This is much more urgent than reducing the tax on building materials, because it directly affects the large companies which are so helpful at election time.
And most amazing of all, the minister announces that, probably to reduce unemployment and encourage labour-this must delight the future minister of manpower (Mr. Marchand)-he will reduce his 1966-67 construction program by 10 per cent. In addition, he promises not to launch any other program.
No wonder the future minister of manpower is thinking of bringing Jamaicans to allow our unemployed to stick to their trade for ever.
[DOT] (1:20 p.m.)
Again this morning I read about another decision taken by the government. The Minister of Labour (Mr. Nicholson) was announcing that the $500 premium granted toward the building of family housing during the winter would be abolished shortly.
It means that the new policy of the Minister of Finance (Mr. Sharp) is to deprive those who do not have enough to live. That is the logic of the present government. Besides,
(Mr. Gauthier.]
it is an economic logic which goes extraordinarily well with its monetary system based on indebtedness.
I read on page 6 of the official press release that 19 per cent of the whole budget will go for National Defence in order to pay soldiers to travel to various foreign countries, when we do not even have the competent people we need to protect us against criminals, fraudulent bankruptcies and narcotics. It will cost the Canadian citizens 14 per cent only to pay the interest on our national debt, that is on the credit which the Bank of Canada should have issued and which we had to borrow so as to steal more from the people. We will pay 11 per cent for transportation and communications, whereas the Canadian Pacific will make a net profit of $67 million at the expense of our crown corporation. Then, I wonder when such extravagance will stop and how much longer it will take the people to wake up?
And who pays for all those mistakes? For all those schemes? For so much incompetence? The Canadian people.
Are you sceptical? Read page 5 of the same press release.
What is done in the field of personal income tax, that is all the workers whose permission is no longer asked but from whom the state collects the tax directly on their gross salary, as soon as they start to work, and even before they have had time to put bread on the table at home? How do you call that if not a state dictatorship? The state first, and let the people die. We have gone that far; 28.5 per cent of the whole budget is thus taken from the small wage earners.
And what about the sales tax which again affects the majority of the working people and which makes up 18 per cent of the budget.
That means, therefore, that the small wage earner pays over 50 per cent of that astronomical and wasteful budget, with regard to the population of the country.
Add to that the tax of 21 per cent on the income of corporations or small businesses, customs duty, etc.
We are forever trying to find new taxation fields but nothing at all is done to recover our country's wealth and use it to promote the welfare of our people.
There does not seem to be any question asked as to whether the country could derive more benefit from its sovereignty rights. What is more, the mere thought of it seems to be cast aside, either not to disturb the foreign
April 22, 1966

trusts which literally plunder our country or not to dry up a source which might enable old-line parties to remain in power tor a few years to come.
At the risk of allowing the worst revolution to break out when the people will be fed up, further encouragement is being given to the reign of the most stupid financial dictatorship only to be found in a country as rich as Canada.
Our governments are merely vile braggarts inviting loan shark outfits and foreign companies to come and grab the tremendous Canadian wealth.
The only thing our statesmen have learned about administration is how to levy taxes, whereas the levying of taxes is precisely a clear indication of maladministration.
To my regret, I have to end my remarks that most people know to be true, without being honest enough to accept the necessary changes.
I could deal with economic matters for hours, but I shall keep my remarks for a much more receptive audience than the members of this house who seem impervious to common sense. As a matter of fact, the farmers and workers of my riding, the unemployed and the destitute are much more capable of understanding me.
I said at the outset that there was a very specific point I wished to call to the minister's attention, that is, the funds appropriated for the Pointe-Bleue reserve.
Again this year, a sum of money will be earmarked for the community service section of the Indian Affairs Branch.
I must also congratulate the government for having appointed to the Pointe-Bleue reservation an officer who is working in cooperation with the Indians to develop the community.
This delegate acts as liaison officer, giving the Indians their first opportunity to express their opinions on the administration and reorganization of the reservation.
This officer, appointed and paid by Ottawa, reports on his operations to the Department. Has his report been considered at its full value? This is the question to which I should like to call the attention of the Minister of Northern Affairs and National Resources (Mr. Laing) and the deputy minister and his staff.
At present, some consideration is being given to eliminating Mr. Boissonneault, but this would be a major error.
The Budget-Mr. Gauthier
Mr. Speaker, my words may harm some and possibly make a few little Caesars squirm in their seats, but I must inform them that I have never retreated from the truth and that I am a fervent defender of democracy, particularly when the poor, the have-nots and the oppressed are involved.
I have already mentioned in the house that there is a little dictatorship installed at Pointe-Bleue, where the big chief is a white man, and to support this, I received yesterday a letter signed by Chief Harry Kurtness of Pointe-Bleue but not written by him -however, I think I recognize the handwriting-in which I am bitterly blamed for having attacked the administration at Pointe Bleue.
The letter, Mr. Speaker, reads as follows:
I believe there are improvements-
I said so at the time.
-I believe there are improvements to be made in this direction.
I shall come back to this during the estimates of the department, because we have much to ask for the Pointe-Bleue reserve, particularly as concerns the administration.
[DOT] (1:30 p.m.)
The author of the letter, and I have a pretty good idea who he is, said:
You seem to go by the reports of one of your last election campaign organizer, Mr. Herbert Connolly.
We wish to inform you that no other person, association or organizer but the Band Council is responsible for the administration of the Pointe-Bleue Indian reserve.
If you have any criticism to make, we shall be glad to hear you at a meeting of our Band Council where any misunderstanding can be cleared up.
I answered the letter simply by saying to Mr. Kurtness-he is not the one who wrote the letter:
In reply to your letter, I wish to say that I will be glad to air my views before the whole Council.
You seem quite satisfied with what the government has done for your reserve up to now and I would like to hear you say so publicly.
If, in your opinion, your reserve does not need new paving, sidewalks and sewers, I want to hear you say so in public.
But have you not made it quite clear to me that you wanted to run your own business once and for ail, without being told what to do by a guy like Bourassa who, by the way, will not be the little Pointe-Bleue dictator very long.
Indians are just as smart as anybody else and the time has come for them to run their own affairs.
Therefore, I suggest a meeting in the college hall if necessary, in order to spell out the facts and correct the situation.
April 22, 1966

The Budget-Mr. Gauthier
I am waiting, Mr. Speaker, for an answer to my letter, in order to throw a little light on this case.
This great white chief indeed seems to support the bigwigs in Quebec and some of their cronies in Ottawa.
This will tell you beforehand that all the efforts made by this government to give back to the Indians the administration of their own business will be unsuccessful, in this dictatorship and its tentacles do not disappear first.
The reason why I speak today on this urgent matter is that I have just received a letter from the president of the Independent Community Association of Pointe-Bleue which is supported by more than 195 residents. Since I have but five days to plead this case, I must inform parliament about certain facts which occur at Pointe-Bleue before things get worse.
In fact, the minister knows that there is an association at Pointe-Bleue. Through that association, which forms part of the federal plan, the Indian people want to administer the amounts of money the Minister of Finance makes available to them. And, to support my argument, here is what was said at a meeting of that association.
This is the first official publication on the activities of your community association.
Since its foundation, the active members have worked hard to insure the speedy progress of the organization.
As you have read in the newspapers, and heard on the radio, some measures have already been taken through the welfare committee to ensure a better performance in this field.
Recently, the industrial committee also made some representations, while studying job opportunities, and more specifically to date, in field of forest concessions.
Through the efforts of several meetings, the active members finally succeeded in bringing about a first official meeting with the introduction of legislation and regulations, as well as setting up new committees and enrolment of new members.
I believe, Mr. Speaker, that this association should have the right to speak. I am sure that if the government trusts the officer it appointed, it will know the truth. I have here the letter of the president of the association with all the signatures of the active members -a 15-page letter-which states clearly what is happening at Pointe-Bleue.
I think the time has come in 1966 to provide Indian reserves with the necessary means to take their administration into their own hands. I believe that the old agency system is no longer justified on the reserves. Indians became mature enough to manage their own affairs long ago.

The impression given throughout Canada that Indians are not qualified to administer themselves is out of date, or rather, it is perpetuated by some small dictators or bureaucrats who place their own comfort above the freedom of Indian reserves.
Today, in his budget, the Minister of Finance will therefore have to provide more for the development of Indian affairs. He will particularly have to inquire about how this money is spent, and to correct the present administration, which keeps for itself the major part of the amounts voted.
It will be necessary to pay more attention to the majority voice of the Indians who are still free from fear and from the job offers of the department and to place less confidence in the few white people comfortably established for years and living off Indian poverty.
It will be necessary to hear the real members of the Band Council, not those who are under the agent's trusteeship, and to hear the free associations, all the residents who can still speak without fear of reprisals from the agent's office.
It will be necessary to reconsider the Boissonneault report upon which Mr. Belanger, of Quebec, "God, the Father", and Mr. Bourassa, of Pointe-Bleue, "God, the Giver", and certain bureaucrats in Ottawa did not look favourably, in connection with their positions.
While the government intensifies its efforts towards truly democratic action, its work is being annihilated by the very people who should support its efforts.
While the government works to give the Indian people administrative independence on their reserves, we note with sadness that they depend more and more on the Hudson Bay Company which has been fleecing them for a hundred years now, while local merchants get nothing but crumbs, because they are politically dependent on this shameless patronage.
Social dependence: most Indians have been put on social welfare and denied the opportunity to develop their own handicraft which would enable them to live according to their aspirations.
And, after all that, we are told right and left that Indians are lazy and incompetent. And to better keep Indians in that condition, as soon as one of them acquires enough culture to lead his group, he is immediately enticed away from the reserve by interesting salaries in the outside world.
April 22. 1966

These are the bare facts. The government has now been warned: let us see how it will act.
Mr. Speaker, my time has now elapsed but I shall surely bring up the matter again later. However, I felt I had to point out these facts to the minister and the government because, at the present time, the association which includes two thirds of the members of Indian reserves is about to revolt: it has given me five days to settle the matter.


Mr. Leonard Hopkins (Renfrew Norlh):: It
is encouraging to a new member of this house, Mr. Speaker, to know that the period of time allotted for the debate on the Speech from the Throne or the debate on the Budget provides him with an opportunity to express his views on a wide variety of topics or issues. Personally, I look upon these time allotments as being of crucial importance to parliament if the time is spent in a constructive and purposeful manner. One finds it a very enlightening experience to hear or study the speeches of hon. members from the various regions of Canada.
In this speech I want to discuss the present and future of Canada. But if one is to discuss the future of Canada he must first of all look to the history of this country and other factors that have played a part in merging this country into the nation it is today. If one does not take this approach he is talking about a structure without discussing, first of all, the foundation of that structure.
First, Mr. Speaker, I want to congratulate the Minister of Finance (Mr. Sharp) upon his very capable Budget presentation. It is certainly no easy task to prepare a Budget that will be readily acceptable to all people and all areas, whether they be geographical areas or economic areas. We have the privilege of living in a country that has an unequalled potential. Canada is 3,000 miles wide, it is larger than the United States, larger than Europe and one-third larger than Australia. The very size of the country can raise varied problems in the development of that country but those need not, by any stretch of the imagination, be insurmountable problems.
Canada has, indeed, been greatly affected by its geography. Professor Careless of the history department of the University of Toronto says:
[DOT] (1:40 p.m.)
Geography, of course, does much to influence the history of any nation. But this is particularly
The Budget-Mr. Hopkins
true ot a land as sprawling and spread out as Canada, composed of a number of different geographic regions, often with natural barriers between them, regions which in Europe might have contained a whole patchwork of separate countries. Thus Canadian history largely records a struggle to build a nation in the face of stern geographic difficulties. That struggle still goes on. The difficulties arise from the very extent and variety of the Canadian landscape; the range on range of far western mountains, the rough tracts of forest and bush, the Arctic and sub-Arctic wastes, and the infertile belt of ancient rock nearly a thousand miles wide, called the Canadian shield, which runs through the very heart of Canada. Barriers such as the mountains and the shield exact a heavy price in scattering the population. They make for sectional divisions and high transportation charges. They weaken national unity and retard national development.
They represent also the immensity of the problems of development that have been and still are slow and expensive of solution. They also represent some of the costs of geography that have been borne by the Canadian people throughout the course of Canadian history. The present Budget, like many other Budgets before it, is one that has been brought forth to meet the exigencies of the time. One has only to make a review of Budgets during the course of Canadian history to realize what a tremendous challenge it must be to a finance minister and to his colleagues to try to solve the major problems of their time and to attempt to give recognition to the many individual problems that are presented to them from time to time. As I have said, the geography of Canada has in itself presented many problems to finance ministers over the years.
Be that as it may, however, we must also be ever mindful that geography has also offered Canada many assets. In eastern Canada the sunken coastline of the continent formed the off-shore fishing banks that attracted many hardy Europeans to that part of the continent in pre-pioneer and colonial days, and which are so important to the economy of that area today. The St. Lawrence River invited people to venture inland and today is Canada's commercial highway. The great plains west of the Great Lakes have become the granary of the world. The Canadian shield was first of all a source of fur and then of timber. Today it is a source of pulpwood, minerals, and water power. The mountain ranges of the west have proven to be another storehouse of mineral riches. On the Pacific coast there are giant stands of timber and more fisheries. In southern Ontario and southern Quebec geography has presented us with an area that has proven to be suitable for mixed farming and rapid
April 22. 1966

The Budget-Mr. Hopkins industrial growth. In the sub-Arctic area the large mineral resources have only begun to be opened up. Geography may have made development difficult in Canada, but this same Canada has indeed been a rewarding one for those who have met its challenge. These are just some of the geographical factors that have played a part in Canada's growth.
The most important development on which we of today must focus our attention is the series of conferences of the Fathers of Confederation who 100 years ago spent several long and arduous days laying the constitutional framework for a new nation in the best way they knew how. It was their hope and their aim to build a foundation that would successfully support the edifice for years to come. As we look back we must agree that they did their work reasonably well. Many of us may feel that the several constitutional legal decisions handed down by the Judicial Committee of the Privy Council at Westminster during the last decades of the nineteenth century went a long way toward weakening the work and the good intentions of the Fathers of Confederation. Be that as it may, even with those unforeseen interpretations of certain sections or parts thereof of the B.N.A. Act, in particular sections 91 and 92, the constitution has been able to ride out many internal and political storms in the face of what looked like bleak and dismal horizons.
Two great Canadians stand out as having laid the political basis which made Confederation acceptable and practical to all people of this country during the first half century after the formal adoption of the B.N.A. Act. They are Sir John A. Macdonald and Sir Wilfrid Laurier. Their ability to weld together two political parties that had nation-wide support not only preserved our system of government in Canada, but they were able to unite all the major diverse characteristics of the country whether they were human, geographic or economic in nature.
Sir John A. Macdonald was responsibile for much of the geographical expansion in many areas of this country through such means as transportation, the railway route across Canada being finished in 1885. He had the uncanny ability to bring men together. His national policy protected infant Canadian industry and he also helped to overcome some of the worst qualities of geographic sectionalism in Canada.


Sir Wilfrid Laurier worked to bring the two major racial groups in this country together. He built another transcontinental railway along with several branch lines. He brought in two more provinces, Saskatchewan and Alberta, in 1905. He was a strong believer in Canadian autonomy and sacrificed possible political success in 1917 for the sake of unity in Canada. I personally have an appreciation for the contribution made to social reform by the late J. S. Woods worth at a time when Canada was in a stage of rapid economic and social change from an agricultural nation to that of a growing industrial power.
My own party is one that has had a tradition of promoting Canadian autonomy, social reform, the unity of Canada and economic growth. The Liberal party has been one of reform and change when change became necessary.
While there have been and are two major racial groups in Canada, we also have across this land people of a host of other racial origins who make up a large percentage of our total population. In my own constituency of Renfrew North there is a very large number of people of German origin whose ancestors came to this country more than 110 years ago. Along with a large number of constituents of French and Anglo-Saxon origin. I also have Polish, Italian and Jewish groups as well as several others. All of these people work together and get along in harmony.
The very basis of success in a multi-racial, multi-sectional country is to understand our fellow man and to appreciate the problems with which he is faced. National problems must be approached in a rational way rather than in an emotional way. In a country such as ours, which is multi-racial, if emotional arguments among racial groups or among the various sections of the country become the means of trying to solve geographic or social problems it would be difficult to reach a successful solution to any problem. Rather, instead of the overcharged emotional approach, rationalized well thought out discussions which alone will pave the way for stability, solidarity and a moderate nationalistic spirit are the only responsible-minded approach that can be taken by the leaders and the people of our country.
During the past decade we have heard and read about problems that would be facing Canada as we near our country's one hundredth birthday. I feel that it is time, as we
April 22, 1966	COMMONS
are almost on the eve of Canada's one hundredth birthday, for all members of all governing bodies at all levels of government and the people of Canada to stop and give the same serious thought today to the future of Canada as was given to the future of Canada by the Fathers of Confederation 100 years ago.
Only we as an aggregate people working together regardless of racial origin or geographical location will ensure the continuation of and the progress toward unity, harmony and nation-building which has been handed down to us by the Fathers of Confederation and succeeding generations. If all of us make a sincere attempt either to continue or develop an understanding of and respect for our fellow man, if there is a spirit of compromise on the part of everyone concerned in any disagreement that may exist and if all of us are willing to approach all problems of the present and future in a constructive and reasonable manner, then we will indeed be able to build a great future for this country and its people. I have faith in the members of this house to work toward these ends and I have faith in the future of Canada as a nation.
We of English Canada have sympathy for the great social and economic changes that are taking place today in the province of Quebec. I want to pay tribute to my French speaking colleagues from the province of Quebec for the many enlightening discussions I have enjoyed with them. I appreciate the fact that many of them are able to stand up in this house and deliver their speeches in either language, and I can say to them that I only wish I had the ability and the confidence to do the same.
Only on the basis of mutual respect and mutual confidence among the members and political parties of this house and, indeed, among all provincial and federal leaders can we meet the social, cultural and sociological problems that face Canada today. The problems that face us today are not isolated by any means in Canadian history. We have had some in the past that were somewhat similar but probably were not as important.
If we do not use the lessons we have learned from some of the stresses and strains that have been placed on Canadian unity in the past in order to solve our problems of the present, then we are giving validity to the saying that "if there is anything that we learn from history it is that we do not learn anything." Let us rise to the challenge that faces this nation and, by exercising mutual
DEBATES	4179
The Budget-Mr. Baldwin respect, confidence, patient dignity and constructive well thought out action, place Canada on the road to harmonious, united and progressive nationhood for another 100 years.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I want to join in the last remarks made by the hon. member who has just resumed his seat with regard to the extent to which we appreciate the contribution made by hon. members from the province of Quebec on all aspects in this chamber. In fact, were it not for the members from the province of Quebec, some from Cape Breton Island and one or two from other places, this would be a dull and lifeless chamber.
I want to make a brief comment about the method in which the Budget debate is initiated and proceeds. I think it leaves a great deal to be desired because all too often a Budget presentation consists of a few islands of statistical information surrounded by large lakes of unreality and deception. When I say "deception" I hasten to inform the parliamentary secretary that I mean it in its political form, its purest form.
I think a minister of finance should be qualified as a dress designer because he has to plan very carefully what he is going to emphasize, how much he is going to show and how much he is going to conceal. Those, I think, are the characteristics of a dress designer.


An hon. Member:: The minister has designed a bikini.
[DOT] (1:50 p.m.)


Gerald William Baldwin: The Minister of Finance (Mr. Sharp) is the designate of government to sort out all the hundreds of suggestions made to him both inside and outside of his department. Those measures he finally incorporates are the fiscal and monetary acts the government wishes to impose in its governing role.
From the time of Jeremy Bentham it has come to us that the role of government should be one which provides the greatest good for the greatest number. A critical contemporary has added a supplement, "and the least evil for the smallest number". This proviso is certainly part of today's concept in a truly democratic system of government.
We in this chamber must look carefully at these Budget proposals. It is not too easy a job. We are not economists, and I often thank God for that. I know that economists are inclined to look down their noses at politicians. But for my part, and here I borrow a
April 22, 1966

The Budget-Mr. Baldwin phrase, I believe that economics and the national economy are subjects far too important to be left to economists. Perhaps here I owe a word of apology to the Minister of Finance who was himself, I understand, an economist at one time. However, no doubt his presence in the cabinet has caused him to forget what economics he knew.
It is difficult for us to cover the whole waterfront. I think there is a way in which we in this chamber can come to a better understanding of these problems so that when the time comes to debate them we shall be better equipped to do so. I shall propose a suggestion along these lines before I sit down. With this in mind I intend to raise a few points with regard to the Budget. I do not offer them as being ideas with which I am irrevocably seized or as being essential for the good of the country. They are ideas in which I believe, and they could be the subject of discussion. In addition, they might have some effect in enabling us to arrive at a more logical conclusion with respect to the fiscal and financial policies of the government. I believe the public would like us to concentrate a little more on these economic issues which so closely affect them and less on some of the other things which have afforded a measure of light entertainment and heavy drama in the the past.
For example, I have an idea that people would like us seriously to consider the problems presented by inflation. That word, of course, is a bland euphemism used by those in authority to express the fact that the prices of meat, milk, bread, shoes, taxes, rent and so on are all going up and up, so much so that there is reason to believe that one of the unidentified flying objects about which we have heard so much has been identified as the cost of living index.
Certainly it is a matter of great concern, particularly to all those people who occupy the lowest part of the economic totem pole, the people living on fixed incomes or those whose incomes are largely determined by conditions external to this country. These are people whose incomes usually follow rather than precede the upward climb of prices, people who never have enough to permit them to pay more and more in order to buy less and less.
What remedies, if any, exist? I know the minister is fulfilling the orthodox economic advice given to him by his orthodox advisers. To this extent he has probably done the best

he could. I realize this is very faint praise but it is as far as I am able to go.
From my own state of blissful ignorance of orthodox economics I suggest that to raise taxes and syphon off purchasing power is simply not providing the greatest good for the greatest number within the meaning of the definition with which I began. I say this certainly will result in more evil for a larger number of people. It is like the carrot and the stick, only there is a new twist to it. The minister has presented the carrot to the people, but while the donkey is eating the carrot the minister at the same time is beating it with a stick, and I do not think this is very fair treatment. Someone else has suggested it is like giving a dose of castor oil in the morning and paregoric in the evening.
[DOT] (2:00 p.m.)
The minister has prescribed two companion steps, a system of forced savings which will syphon off money from direct investment and then an abandonment of the incentives which heretofore existed to promote development in industry. In that regard I would like to refer to what is contained in the second report of the Economic Council of Canada on this very issue of the necessity of providing incentives so that automation, diversification and more efficiency will result in our industrial activities.
Dr. Deutsch of the Economic Council has been concerned about this particular issue and, as a matter of fact, has suggested that we continue to maintain these same incentives. At page 174 of the report we find the following:
The experience gained-
The report is dealing with the experience gained with the incentives which we did have and which are being removed by the budget.
-should make it possible to develop a better and more effective scheme. An improved tax incentive program should be broad and widely available to small and large companies alike. It should encourage the taking of risks in the exploitation of new ideas and methods on the basis of widespread initiatives.
It is absolutely essential, in a country like ours with a small population, to provide our industrialists with the strongest possible incentives in the form of research and development. To help increase their efficiency is essential. Any attempt to water this down or get rid of it is, in my humble opinion, completely wrong and erroneous.
As a result of these proposals what could happen here is that for a very short term
April 22, 19G8	COMMONS DEBATES	4181
there might be a decrease in prices, although I have my doubts. But if the government and the minister genuinely believe that only through measures of this kind is to be found relief from inflation, why do they not plunge in and take the complete measures which are suggested by these proposals? I would not support that. I do not support these proposals. I think it would be unsatisfactory because the people who would suffer from it are the people who can least afford it. I do not think it is right, but if the government believes so, why does it not go the whole distance with it?
What will happen now is that the modestly well to do and the wealthy will continue to buy on an individual basis the things they think they need to make life comfortable, and if prices are in fact reduced by a lag in demand it will be on the part of the lower income brackets who will be compelled to limit their purchases because of lack of purchasing power. I am sceptical in any event.
What about the United States which is a potential powder keg of built-in inflationary dangers by reason of the Vietnamese war? Up until recently the President of the United States indicated that he was not going to raise taxes. I may have to take these words back in a week or two because he has not yet sent a message to Congress, but surely if there is any country suitable for the program devised by the Minister of Finance it is the United States where there is the grave danger of inflation.


Mr. Chretien:: Would the hon. member permit a question?


Gerald William Baldwin: Certainly.


Joseph Jacques Jean Chrétien: Is the hon. member aware that in the United States a married taxpayer with no dependants, with a gross income of $4,000 a year, pays $207 more in income tax?


Gerald William Baldwin: It may well be so and if the parliamentary secretary quotes these figures to me I am quite prepared to accept his statement to that effect, but this is not the point. We are now at a certain plane where taxes have been fixed and provide a certain amount both here and in the United States, and the minister is suggesting that in order to contain inflation he must raise taxes. I do not accept that as being a proper program, and with the greater danger that exists in the United States I say that if the United States authorities felt the same way about it the President and the government of the United
The Budget-Mr. Baldwin States would also have raised taxes. It is a matter of relativity rather than comparison, Mr. Speaker.
This whole business reminds me a lot of a device which was in existence in the early days in the United Kingdom. The Prince of Wales had a boy called a whipping boy and when the prince did something wrong the whipping boy was upended and received punishment. This is exactly what is happening here. Because of the errors made by the government and certain people in industry and finance, a large minority of people in the lower income brackets are the ones who are being punished, and that is not the kind of answer which is good enough for this house.
There are other issues which ought to be raised and made the subject of discussion in any proper Budget debate. To a very large extent prices are made up by cost generated by the imposition of taxes. Certainly the values of capital and labour which go into the price of a commodity or a service are in considerable measure fixed by taxation and, especially in modern days, the pyramiding effect of taxation. Taxation in turn is fixed by the cost of government and I suggest it is hypocrisy for the government to tell labour ar.d industry to follow guide lines until it itself submits to self-discipline and puts its own house in order.
There is the mounting tide of government employees. There is the rejection and refusal to follow all but a fraction of the Glassco commission recommendations. There is the incidence of error, of waste, of extravagance and non-productive payments which are contained in the Auditor General's report, and the government has also failed to follow 80 per cent of the recommendations of the Public Accounts Committee.
It is no wonder that industry and labour reply "so what" to the Minister of Finance and the Prime Minister (Mr. Pearson) when they very timidly suggest that they should limit their price increases and wage demands. I think they are perfectly entitled to say, "You start and we will follow." I think this is absolutely essential.
I should like to talk more about taxation but the time allowed is against me. However, there will be ample opportunity when the Carter royal commission report is brought in. But it is my submission that the present taxation system, like a crazy quilt, has been built up without rhyme or reason, without regard to the cardinal principle of an equitable tax system, namely, one which permits
April 22, 1966

The Budget-Mr. Baldwin people to have the fullest access to the resources of a country unimpaired by incentive destroying levies. I think the first essential is not an increase in taxation but a reduction, a reduction which follows a decrease in the cost of government, in the controllable cost of government expenditures with which this government has not shown the slightest intention of dealing.
On the other branch of fiscal policy, the tariff, there is the question if a policy of freer trade would not bring more goods at cheaper prices within the reach of the Canadian consumer. In this regard we must not lose sight of the psychological aspect of purchasing at the present time. One cannot call it hoarding, but there is no doubt that with the continuous talk of inflation and the learned dissertations of people about the overheating of the economy, and the grave and serious mien adopted by government people, financial editors and others, there has occurred a built-in psychotic feeling, the desire to buy something now even though one does not need it because it might not be available later or will only be available later at an increased price.
I suggest that a large amount of the purchasing taking place at the present time is because of this psychological factor.
If it were made aware to people that tariff barriers would be reduced to a limit that would permit a greater flow of goods coming into the country, a lot of this fear would be lost. I am not too concerned about labour and industry, in the sense that they are organized. My concern is with the consumer and I suggest, despite all opinions to the contrary, it is more than time that the industries which have become fat and lazy behind protection should be exposed to the cool fresh wind of competition and get out on their own.
[DOT] (2:10 p.m.)
Certainly this should be done on a staggered and progressive basis. There should be tax incentives for research development, improving techniques, and an orderly transition to the type of industrial activity where, with increasing productivity, markets can always be found at home and abroad in the face of any competition. Canadian industries with access to great and varied types of natural resources and with know-how and competence should be able to compete anywhere including their own country without the help of tariffs as they now exist. In the modern industrial age the benefits which have accrued through economy of scale now can be


matched and even surpassed by the economy of diversification and automation. This is where our destiny lies.
In this regard I should like to put before the house the bare outlines of some arguments made by others which bolster my own view. In the Toronto Telegram of April 19 I find that Mr. Douglas, the president of Douglas Aircraft Company, came to Canada and the following item appeared:
Lack of interest in subcontracting by Canadians startles Douglas chief. Canadian manufacturers have displayed a lack of interest in obtaining subcontracts from the Douglas Aircraft Company...
"Your government came down and leaned on us pretty heavily and said let's see some work in Canada"...
"But when we sent some teams up to Canada three or four years ago, people said we don't want your business."
Then, Mr. Speaker, again with reference to the Economic Council of Canada, at page 172 there is a very strong opinion to the effect that the role of Canada should be one which recognizes the growing degree of international economic interdependence. More specifically, an active and meaningful role by Canada in negotiations to broaden and deepen nondiscriminatory multilateral trade coincides with our long term interests and position as a major world trader. Putting it very shortly I suggest that freer trade, the opening up of our markets, and more and more goods and services coming in here would result in Canadian industry being compelled to become effective, efficient and demonstrate its ability to produce at lower costs. This would immediately make available not only more commodities to Canada at a cheaper price but would put us in a better competitive position with relation to the rest of the world.
I do not think it is good enough to say that because the tariffs have existed and because the Kennedy round of tariff negotiations is not proceeding as fast as it should we are not free to take action on our own. I think we are, and I would like to see this matter discussed. There are other considerations such as the question of United States capital coming into this country. There has been much opinion stated on that. I should like to refer hon. members to a book called "The Prospect of Change and Proposals for Canada's Future". This contains a number of essays by various people, some of whom are professors and even economists. One of them at page 245 is considering the effect of foreign ownership and control of Canadian industry. There a question is raised in respect
April 22, 1966

of whether there is a danger in reasonable and moderate use of foreign capital in Canada. I am not here taking sides one way or the other but I do suggest this is not a one-sided proposition and is one which should be considered. There are other considerations.
Mr. Harry Johnston, a well known Canadian economist, suggests that in his view there would be absolutely no advantage in the change suggested by the last minister of finance, that all it would do would be to pass control to James Street and Bay Street rather than Wall Street. I say that this is the sort of thing we should be discussing. There is the question of designated areas and the northern part of Canada having a tremendous potential for industrial development. This is progressing slowly because it takes risk capital. Every time I see under the designated area program the designation of certain areas to permit the continuation of an uneconomic industry, which is bound to be only for a comparatively short period of time, I think there is something wrong. I think it would be far more effective to go into an area like the north where the resources lie. If there is going to be a program of these incentives, surely it is better to go into these areas where we have the opportunity, the program and the resources. We did this in respect of the Pine Point railway. This was a partnership arrangement between the government, the railways and industry and it has been tremendously successful.
This is the sort of thing the government should be doing in the north. I think the time is very late when this should be done. I am sorry I have exceeded the time I had intended to take. My proposal is that when the Minister of Finance has brought down his Budget the debate well might be postponed to permit the subject matter of the Budget presentations, the fiscal and monetary policies which the government feels are necessary and adequate for the country for the next year, to be submitted to a committee before which would appear the advisors of the minister who have advocated these policies and before which also would appear others who do not agree with those policies. I think this would initiate in the country a real debate on and give us an opportunity to come to grips with the economic problems. This is something which is so essential and necessary.
I have sat through eight or nine Budget debates. This debate has been a good debate. However, this is the sort of thing we need
The Budget-Mr. Patterson rather than a debate in a vacuum, in a place where there is no conflict of ideas and no joinder of issue on the questions, the question of United States capital coming in here and the question of free trade. These are problems in which the people of this country are vitally interested. I think these things need to be brought out into the open, examined critically and considered thoroughly before the debate continues.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, in the course of the last election campaign I took the position that one of the greatest needs at the present time is responsibility in government. Because of the constant political campaigning which had characterized our parliaments and the ever present possibility of another election, I made the suggestion that it might be desirable to have a set term for parliament, such as four years, during which the only permissible occasion for an election would be on the defeat of the government on a straight want of confidence motion, the number of which would be strictly limited. I suggested that one such occasion would be the Budget debate, because we know the Budget is the main indicator of the monetary and fiscal policies of the government.
Personally I have refrained from supporting non-confidence motions based on specific issues, but because I was opposed to the position taken by the Minister of Finance (Mr. Sharp) with reference to general monetary and financial policy I found myself last evening in the position of being compelled to register my protest by voting non-confidence in the present government. I did so because I believe the general trend of the Budget speech and the policies enunciated by the minister is not in the best interest of this nation. I should like to read the first point mentioned in the press release from the office of the Minister of Finance outlining the highlights of the Budget.
[DOT] (2:20 p.m.)
The current economic boom, with rising demands pressing against available production capacity, presents a great challenge to Canada to manage our present prosperity and maintain a steady and sustainable rate of growth.
I would suggest, Mr. Speaker, that contributions during the course of this debate have raised a serious question as to the extent and magnitude of the suggested boom. It is true that many parts of the country and no doubt many citizens of the country are enjoying a very adequate share of the prosperity that is
April 22, 1966

The Budget-Mr. Patterson spoken of, but we dare not close our eyes to the fact that all is not as bright as the minister suggests.
For instance, I listened with a great deal of interest to the contribution to this debate of the hon. member for Kings (Mr. McQuaid). In the course of his presentation he gave a very dark and gloomy picture of the existing economic situation in his home province of Prince Edward Island. I am not saying that was overdrawn; I am not saying that conditions are not as dark as he suggested. I am just pointing out the fact that here was an hon. member who in presenting the conditions of his own province did not take the position that all was well and everything was bright and rosy. However, Mr. Speaker, I would suggest that perhaps in some instances such conditions are not altogether caused by a lack of recognition on the part of the rest of Canada of these particular situations. I am not going to say they exist because the policies enunciated by the federal administration are not adequate to meet the needs, but I would suggest there may be a possibility that provincial policies are not adequate to meet the demands at the provincial level.
Therefore I would suggest that in some of these areas people might give consideration to electing a Social Credit government which might be able to present a picture that is a little brighter, because where Social Credit has formed the administration conditions are very bright and encouraging and those areas are developing better and faster than any other part of our great nation. I throw that out, Mr. Speaker, as a suggestion. Perhaps if conditions are not right and things are not going well, if the economic situation is dark, these people had better look around for some other type of administration which can bring a degree of prosperity and assistance to areas in difficult straits.
I should like to re-emphasize the fact that provincial administrations do have a great deal to do with national progress and development because if policies are not adequate and effective in the various provinces then, of course, the revenue accruing to the federal administration with which to fulfil its responsibilities is also lacking. Therefore I would again point to my own province of British Columbia and the neighbouring province of Alberta and bring to your attention, Mr. Speaker, the economic and financial policies that are being applied there. I say they are resulting in a measure of development and


progress that is unequalled in any other part of this great country of Canada.
I have mentioned that there are areas of this country which are not enjoying the boom to which the minister has alluded. There are also various classes of our citizens who are not enjoying the affluence of which we speak. There has been considerable discussion this session of the plight of old age pensioners. Suggestions have been made, amendments have been proposed and speeches have urged the implementation of further assistance to our senior citizens to bring their income up to a level at which they can live with a measure of dignity and decency. But the attitude of the government has been that it is not in an economic or financial position to provide this assistance.
I suggest that if our economic and financial situation is not adequate to meet the needs of our senior citizens and others at that particular income level, there is something wrong with the administration of our national affairs if we are enjoying such a boom that we have to put on the brakes. I have spoken of the old age pensioner. I could refer to federal superannuates, I could speak of our veterans, I could call to your attention, Mr. Speaker, all those living on fixed or low incomes. I suggest that these people are not enjoying that standard of living commensurate with an affluent society, one in which the government feels it essential to brake and slow down our development. Therefore I suggest that not all areas or citizens of this country would support the claim that Canada is enjoying an unprecedented boom.
I should like to have referred to a number of specific matters in detail but because there has been agreement to limit our contributions in order that as many members as possible may take part in the debate this afternoon I shall refer to them only briefly. Some of the documents to which I intended to refer will be set aside and I shall refer only to some specific situations. First of all, Mr. Speaker, I should like to refer to the tight money policy being implemented by the federal government at this time. I do not know whether they would call it a tight money policy; they refer to it as slowing up a little, taking your foot off the gas to spread the boom out a little so it will last longer. But I would suggest that in the final analysis it is a tight money policy which will have very serious effects upon the development of this nation.
It has been brought to our attention that there is a severe shortage of money for
April 22, 1966

construction purposes. I have a telegram at hand from the Ontario Council of the National House Builders Association referring to the desperate situation created by the complete lack of N.H.A. mortgage funds, which is critical to the housebuilding industry. The members of this association strongly urge immediate government action to re-establish the program of direct N.H.A. mortgage loans in all areas. I have received other communications from builders' associations and those engaged in the construction industry pointing out the fact that this policy will have a very serious effect upon the whole construction industry and will also spread into a great many related and allied trades.
The suggestion is that there is a shortage of skilled labour. I should like to call attention to the April issue of the "Canadian Builder". After referring to the effect taxation is having on the industry, this publication refers to the alleged shortage of manpower and states at page 34:
The fact is that the short-sightedness of the immigration policies of various governments in this country has created this situation.
I would suggest that rather than slowing up construction and our economy because there may be a shortage of labour, we should see to it that sufficient labour is brought in to augment our labour force in order to carry through the tremendous program of development and progress that is possible in Canada at the present time.
[DOT] (2:30 p.m.)
Continuing along this line, Mr. Speaker, I should like to refer to the fact that we in the Social Credit party have advocated for a number of years that the Bank of Canada provide facilities and capital to assist our municipalities in their programs for the provision of services to their people. I should like to re-emphasize this this afternoon because I believe it is important and pressing. I suggest that without something like this our municipalities are not going to be able to carry forward their programs and meet the challenge of their growing communities. We have suggested that a municipal development bank be established as a branch of the Bank of Canada. Money would be provided at a very low rate of interest, perhaps covering the cost of administration or at least a very low rate of interest, in order that municipalities might provide the facilities that are required in their communities.
The Budget-Mr. Patterson
I thought for a while that the government was moving in the right direction by establishing the municipal development assistance fund or loan fund. They saw fit, however, to cut it back just when it was getting nicely into operation. I say that the municipal authorities are very unhappy about the decision of the government in this respect.
We think, Mr. Speaker, of the entire debt structure of Canada. Reference has been made to this by other speakers. At the moment the service charges on our national debt require $1,100 million annually. I suggest this is something that ought to cause great concern. 1 was interested, however, to note that the government is moving in a direction we Social Crediters have advocated for a number of years, namely, that the Bank of Canada take over the national debt, assume responsibility for it and work toward its liquidation. The Bank of Canada has purchased some bonds in the past.
I cut out of the Ottawa Citizen for April 18, 1966, an advertisement with reference to an issue of $325 million non-callable government of Canada bonds. The advertisement states that the Bank of Canada has already agreed to acquire a minimum of $50 million of the new bonds, open as to maturity. I suggest that this is a move in the right direction. There ought to be more of it because it is much better to pay the interest back to the Consolidated Revenue Fund since that means in effect that we are getting our money at practically no interest. I therefore commend the minister and the Bank of Canada for this action. We would only urge that it be extended still farther.
I believe it was the hon. member for Carleton (Mr. Bell) who, speaking last night, asked this question: If the government cannot balance the budget in boom times, when can it be done? I believe this is a question of which the Minister of Finance should take cognizance and provide an answer. If we cannot meet our obligations now, if we have to continue borrowing and building up the national debt, further increasing the debt charges at this time when the minister says we are in such a boom we have to slow up, then when in the name of common sense are we going to be able to get to the place where we can balance our budget and operate this country on a business basis?
I should like to refer, Mr. Speaker, to the cost of living index. It has been pointed out
4186	COMMONS
The Budget-Mr. Patterson that the cost of living is constantly increasing. The Ottawa Journal for April 7 contained an article with this headline, "In The Last Six Months, Food Prices Up 6 Per Cent." We are told we have not reached the peak yet, that we can expect a continuing rise in the cost of living and in the prices of our products. I believe that this is one of the most distressing factors in our whole economy today.
I have received letters, as I am sure many members have, from old age pensioners who have gone into supermarkets, compared prices and found that the little bit of money they try to stretch to provide even the basic necessities of life is not sufficient to purchase enough for them to get by.


Mr. Ricard:: Would the hon. member permit a question? Why did the hon. member vote against our amendment when we proposed to increase the old age pension to $100?


Alexander Bell Patterson: This is a complete misrepresentation of the facts, Mr. Speaker, and hon. gentlemen know it. They did not propose that in the amendment. They criticized and hammered the government for not doing it but they know as well as I do that to support that motion would not have brought the old age pensioners one nickel. Some of these politicians, Mr. Speaker, go up and down the country completely misrepresenting the facts, when they know they are not saying the right thing. I tell you, people are beginning to catch on.


John George Diefenbaker: They certainly are.


Alexander Bell Patterson: They are getting fed up with these political footballs.


J.-H.-Théogène Ricard: You can say that again.


Alexander Bell Patterson: I was talking about our senior citizens and veterans. They are the ones who are hurt most by the constantly increasing cost of living. You will have noticed, Mr. Speaker, that last night, because the government did not provide for certain things, including an increase in old age pensions, we voted against the government. Where were the Tories then?


J.-H.-Théogène Ricard: Here.


Alexander Bell Patterson: Check the record and see how many were absent. Perhaps the Leader of the Opposition is not able to control his group any longer and the result is that they are absent.

DEBATES	April 22, 1966
I am simply pointing out that the cost of living is constantly increasing and the ones who are getting hurt most are the ones who can bear it least. No attempt was made in this Budget to provide any of the assistance required. We talk about savings and investment. I am sorry that I am going on because I intended to be very brief but these interjections are interesting and provide some opportunity for a little digression.
However, in so far as savings and investment are concerned, I have an article here which I am not going to read. It is from the Ottawa Citizen for April 1, 1966. The heading is "Report Shows Canadians Can't Afford To Invest." The article goes on to say that Babson's estimates that a household with earnings of $7,000 a year after taxes spends 91 per cent on living expenses, leaving 9 per cent for accumulation. Of course, if you reduce that to the bracket in which many of our Canadian citizens live there is no money left for investment. In fact, the people cannot tighten their belts any more because they are so tight now the people would not get by if they tightened them any more.
[DOT] (2:40 p.m.)
I refer now to the income tax. The report which appeared in the newspapers following the introduction of the Budget stated that six out of ten would pay more taxes. Everybody knows that we have a social responsiblity in Canada to assist those who are unable to assist themselves. We have an obligation imposed by our need to have the government do for us collectively what we cannot do for ourselves individually. There is a limit financially, Mr. Speaker. You can kill the goose that lays the golden egg. I believe that is what is going to happen if the government maintains its trend of increasing taxes, overburdening the Canadian people and overburdening the taxpayers.
I have in my hand a letter from a young man who expresses deepest bitterness because the government is dictating to him how he is going to spend his money, implying that he has not enough brains to know how to spend it himself. I quote one brief paragraph:
Forgive me if I got carried away but I feel so strongly about this and other things that I am going to have to live with for many, many years. It seems that my future is being carefully plotted out for me while all that I can do is write letters and pray that I will still be able to have a choice of where I will work and what I will do as time progresses. Sometimes I feel as if I want to break out and scream as I watch my decisions made for me by a government that believes that I haven't got enough brains to take care of myself.
April 22, 1966

I believe that brings out the picture very clearly. It shows that some people think that the government says to people: You have not got enough sense to know how to spend your own money; we are going to look after it for you. Therefore the whole structure that is being erected is a denial of the rights of the individual to look after himself and to live his life as he wants to live it.
With regard to taxation policy the minister hides behind the fact that the Carter Commission has not made its report. I think the government is hiding behind that report. There is no reason why it could not proceed to bring about relief to the Canadian people. Instead, it hides behind this report, making excuses. We hope that the commission will report quickly.
In view of the agreed limitation of debate and the courtesy extended by the house, I am going to conclude my remarks at this time. I do, however, register my strong exception to the policies followed by the government in dealing with some of our national problems and I object to the lack of any policy with respect to other issues of concern to the Canadian people.


Mr. J. G. Lind (Middlesex East):: Mr. Speaker, allow me to congratulate you on your appointment as Speaker of this house. Everyone to whom I have spoken about you has praised your ability to handle difficult situations quickly, fairly and in an orderly manner.
I should like to thank the Minister of Finance (Mr. Sharp) for presenting to this house a wise budget which fits the needs of the hour. The task of the government is to sustain the longest economic expansion in Canadian history and therefore we must have some restraint in our expansion to safeguard the continued growth of our economy. Time Magazine says:
This inflation-dampening budget earned a round of editorial and business approval.
I have checked the reaction of many of my constituents to this budget. One farmer said, "It did not hurt us, but Joe Greene sure saved our hide". A businessman said that he thought it was a budget that should check inflation and it did not hurt him too badly; he had expected an increase in personal taxes but he did like the 5 per cent refundable corporation tax. "Over all" he said, "this budget should trim inflation." I quote from an article in the Globe and Mail of April 5:
Economists generally like the refundable tax, which they regard as perhaps the most sophisticated
The Budget-Mr. Lind instrument of economic control that Ottawa has devised in a generation.
What does the ordinary man on the street think of this budget? I have talked to many on this point. They generally agreed that it did not hurt us and they expected the minister to check the inflation so why not clip those who can afford it? This judicious rebalancing of income tax will help to check or dampen inflation without disturbing the underlying uptrend in business.
I would like to suggest to hon. members and the government that they consider the image of this parliament and the business life of our country by considering for a moment the meaning and value of integrity. Colton once said:
Nothing more completely baffles one who is full of trick and duplicity than the straightforward and simple integrity in another.
The Oxford Dictionary defines integrity as "wholeness, uprightness, and honesty". The World Book Dictionary defines it as "honesty and sincerity". A man of integrity is a respected man and I believe it is our duty as members to be respected men and women. I believe that a re-dedication to those principles for which our forefathers and predecessors stood is necessary if we are not to slip back into the morass of a totalitarian state. Popularity and public acclaim are not the measure of a man. What should matter most to hon. members is that we conduct the business of our country with integrity. We should, when necessary, operate as a trust, doing the unpopular thing when it is in the best interest of the country so to do and always foregoing self-interest. As the business leaders of Canada entrusted with the affairs of this nation, we must at all times exercise integrity.
Some hon. members may greet this suggestion with cynicism but it is not too difficult for the thinking person to see the practical values of integrity. It is both efficient and economical and although not always easy to practise its reward is serenity of mind.
I should like to suggest to the Minister of Finance and our government an area which I call the erosion of our tax base through business failures, namely, bankruptcies. Our government has and is doing something about this situation, but I urge them to speed up the process and save the consumer, the farmer, the businessman and corporation from the terrible loss through bankruptcies which, last year were in excess of $500 million in Canada.
4188	COMMONS
The Budget-Mr. Lind
Daily in our local papers we have been reading about the scandalous collapse of one of our largest finance companies. I quote from an article in the Globe and Mail of February 4, 1966:
Responsibility for the collapse of Atlantic Acceptance Corporation Ltd. last summer, rests entirely with a small handful of not-so-clever-but completely arrogant-scoundrels, thoroughly familiar with the bankruptcy game.
[DOT] (2:50 p.m.)
Some of the scandal took place in the constituency of Middlesex East. Just south of 401 highway-excuse me; it is known now as the Macdonald-Cartier Freeway-on one of the main access routes to London, Wellington Road, is situated a famous shopping area known as Treasure Island. It was here that a lawyer and a London businessman set up Wildor Holdings Ltd. and, either intentionally or unintentionally, they, along with some of the principals in Atlantic Acceptance Corporation, proceeded to demonstrate how to turn the corners in business. According to the reports in the London Free Press, even before the British Mortgage and Trust Company had advanced the moneys under the first mortgage, a particular gentleman had his hand in the bread basket and received some $10,000 for processing the first mortgage. It appears to me that a certain London lawyer seems to have been rather closely connected with this transaction.
Then suddenly we find the principals of Treasure Island running out of moneys to complete the project, so the British Mortgage and Trust Company foreclosed under their rights as the first mortgagee. At that time there was outstanding over $335,000 in mechanics liens against Treasure Island by local firms and supply houses. In addition, there were several thousands of dollars in judgments against this property. The businesses concerned, which had trusted the integrity of these London businessmen and this lawyer, now find themselves with their equity completely wiped out.
The next thing we know is that Treasure Island is refinanced by Atlantic Acceptance Corporation. The people of our area naturally expected some new principals. But who are the principals? None other than Wildor Holdings Limited. The same London lawyer and businessmen are involved. They finish Treasure Island and negotiate with a local farmer for an additional two acres of land on which to build an arena. Under the guiding hand of this London lawyer they pay $6,000 for the two acres of land. But the property is

DEBATES	April 22, 1966
registered in the name of a relative of the London lawyer and is immediately sold to Wildor Holdings Ltd. for a mere $100,000.
Someone cut the $94,000 melon. It would be interesting to know who got a slice of this melon. Maybe the Minister of Finance could bring this to the attention of the Minister of National Revenue (Mr. Benson). I should like to press for a thorough investigation into this Treasure Island debacle. Many of my constituents suffered while these fellows hid behind the law.
I could go on talking about this fraud at great length. I ask hon. members to realize that this happened right under the noses of our provincial authorities. Something is very much wrong with the administration of our laws when these rascals can fleece the small businessman and not be brought to justice. Let me remind you, Mr. Speaker, that this happened in my riding and not in the province of Quebec. Allow me to quote from an article in the Globe and Mail of February 4, 1966:
Many of the characters in the Atlantic affair were old hands in the bankruptcy game. We recognize a number of the individuals, and had known of their association with Atlantic for a long time.
Many of these names were also associated with British Mortgage and Trust, in which a large number of my constituents also lost heavily along with constituents of the hon. member for Perth (Mr. Monteith). Several of our older residents lost much of their savings and stocks last July before Ontario finally stepped into the picture and guaranteed the depositors. I urge the minister to consider bringing all near-banks and other such institutions which are taking deposit moneys under one single act so that we can in future avoid this rocking of our financial structure. The president of Clarkson and Company says: "Atlantic is probably the worst blow the free enterprise system in Canada has suffered in many years." I do hope that these individuals are pursued and brought to justice.
Let us look at some of the statistics on bankruptcies. In 1946 defaulted liabilities in Canada totalled $6 million, with 278 estates in bankruptcy. These jumped in 1950, the first year after the 1949 amendments to the Act, to 1,303 bankruptcies and $25 million of defaulted liabilities. If we admit the principle of the relation of cause to effect, we must conclude that the 1949 amendments resulted in an immediate increase of 500 per cent in the number of bankrupt estates and 400 per cent in the liabilities of bankruptcies in 1950 compared with 1946.
April 22, 1966

The operation was becoming so profitable that this increase continued, and at the end of 1963 the amazing figures were reached of 3,678 estates in bankruptcy and $193,700,000 in defaulted liabilities. It is a truly devastating torrent, and this during the most prosperous years experienced by Canada.
Confronted by this plague, certain associations and groups prepared some 47 briefs and presented them to the Minister of Justice (Mr. Cardin).
In reply to these briefs and to the suggestions made by these associations, it was stated in judicial circles that the Bankruptcy Act was well thought out and protected the creditors provided they used it when they believed their rights to have been encroached upon. Without pretending to know more than these lawyers, I do maintain that when creditors are systematically victimized by these organized frauds they are not at all protected by the Act. On the contrary, they are being duped. The responsibility for pursuing these bankrupts falls on the shoulders of the creditors who have already lost very heavily. It also becomes the responsibility of the creditors to inform the Superintendent of Bankruptcy.
What are the duties of the Superintendent of Bankruptcy? The answer is given in Section 3 of the Act. After speaking about his appointment by the Governor General in Council, subsections 2 and 3 contain provisions as to the powers and duties of the superintendent. The part most interesting to creditors is paragraph (f) of subsection 3 which says that the superintendent shall-
-receive and keep a record of all complaints from any creditor or other person interested in any estate and make such specific investigations with regard to such complaints as the superintendent may determine.
It must be noted that if the Act in using the word "shall" binds the superintendent to do a certain thing, the same act gives him complete freedom when it uses the word "may", because if the superintendent does not have the appropriate staff or the appropriate funds then there is physical incapacity. I strongly recommend that the phrase "may determine" he changed to "must determine" to do away with this distinct weakness in the present Act, and I urge this house to consider immediately the new amendments to the Bankruptcy Act found in Bill S-17 of the Senate. Surely the urgency of this matter is very obvious to hon. members when we consider the losses to individuals, businessmen and corporations during the last ten years.

The Budget-Mr. Lind
In 1955 the number of estates in bankruptcy was 1,795. In 1960 this number had risen to 2,828. Here are the figures for subsequent years: in 1961, 2,659; in 1962, 3,190; in 1963, 3,678; in 1964, 3,606; in 1965, 5,003. I would draw the attention of hon. members to the fact that in 1946 there were 278 estates in bankruptcy whereas last year there were no less than 5,003 estates in bankruptcy. Between 1955 and 1966 there was an increase of some 3,208 bankruptcies. Most surely, part of this increase must have arisen as a result of planned bankruptcies.
What about the defaulted liabilities over the period from 1955 to 1965? In 1955 total defaulted liabilities amounted to some $53 million. In 1960 the total was $174 million. In 1961 it was $116 million; in 1962, $149 million; in 1963, $194 million; in 1964, $203 million. In 1965 it had risen to $392 million, a figure which does not include the loss amounting to more than $100 million sustained by over 40 businesses which were put into receivership following the collapse of Atlantic Acceptance Corporation. I consider these figures conclusive evidence that the bankruptcy racket does erode the tax base, and that these losses must ultimately be borne by you and by my constituents, as well as causing many innocent victims to suffer injustice.
[DOT] (3:00 p.m.)
I believe the Minister of Justice (Mr. Cardin) has given the reason why changes in the act are necessary when he stated as reported at page 2211 of Hansard:
I am also very anxious to explain to members of the committee the difficulty which the minister has in trying to administer a very complicated, awkward, and obsolete act, in trying to deal with what has become sophisticated and, I understand, organized crime in the field of bankruptcies.
I urge that a committee study Bill S-17 and that immediately this committee make recommendations to the house for changes in this obsolete Bankruptcy Act. The Minister of Justice on March 4 outlined some of the changes to the act. These changes could return some integrity to business, instead of such scandalous reports as these.
In summary, I urge you to look at the figures. In 1946 the number of estates in bankruptcy were 278, with a total liability of $6 million. In 1949 the Bankruptcy Act was revised, and immediately bankruptcies jumped, so that in 1950 there were 1,303 estates in Bankruptcy with a total liability of $25 million. This bankruptcy operation was

April 22, 1966
The Budget-Mr. Lind booming-and by the end of 1963 the number of estates in bankruptcy had risen to the amazing figure of 3,678 with a total liability of $194 million. This is a devastating amount.
In 1964 the Attorney General of Quebec instigated a special investigation squad to check into bankruptcies, and under the present laws was able in 1965 to reduce bankruptcy liabilities in Quebec by some $5 million, and the number of estates in bankruptcy by 123.
What happened in Ontario, which also had a special squad of investigators, according to the deputy attorney general of Ontario? Ontario's bankruptcies jumped from a total liability in 1963 of $84 million to a total of $260 million in 1965, and this does not include the over $100 million caused by the Atlantic Acceptance debacle. Sir, this Atlantic Acceptance scandal has rocked the financial structure of our country; therefore I urge the Attorneys General of all provinces to take action to stop this fantastic situation.
We all know that the administration of justice is a provincial responsibility, but I urge co-operation with the provinces to investigate all fraudulent activity, in fact every estate in bankruptcy. Bankruptcy liabilities in Ontario increased by over 325 per cent from 1964 to the end of 1965, and in Canada by over 88 per cent. Therefore I urge the Minister of Finance, along with the Minister of Justice, to help the provinces fight this scandalous monster, bankruptcy.


Mr. McCutcheon:: Would the hon. member permit a question?


James (Jim) Gordon Lind: Certainly.


Malcolm Wallace McCutcheon: Before asking the question may I say I believe this was the hon. member's maiden speech and I would like to compliment him on the excellent material he dug up for it.


Some hon. Members:: Hear, hear.


Malcolm Wallace McCutcheon: But I have one thought in mind. In his remarks the hon. member mentioned a certain infamous London lawyer, and many rascals involved in this event that took place in his constituency. There are many reputable firms of lawyers in the city of London and I think the hon. member should name the one to whom he has alluded. We have had plenty of broadside accusations around the house recently, and I wonder if the hon. member would give the name.


James (Jim) Gordon Lind: I would be very glad to answer. I think if the hon. member would just go back and read the recent issues of the London Free Press, dealing with the investigation, he will know the London lawyer to whom I have referred.


James Russell Keays: Mr. Speaker, I welcome the opportunity to speak in this debate and I assure the minister that in any comments I make I do not wish to be offensive. Rather I hope they will be a contribution to help the thousands and hundreds of thousands of financially distressed people across the country who are clamouring for a better budget than this.
The budget presented during this session was nothing but a blanket blast at the Canadian economy, ignoring priority needs and promotional measures in areas of slow development. The economy in general is booming and the chief preoccupation of the government should be to sustain economic growth of such a nature as to prevent that unwanted spiralling price structure called inflation, the curse of all boom periods.
The government at such a time should appraise its own fiscal policies by taking a hard look at its spending program, curtailing projects where possible and giving high priority to those projects in areas of high unemployment which do not require the skilled labour of which we are so short today- projects which are ready for execution. In other words, I regret that the minister did not take a positive approach to the problem.
He has looked negatively at the Canadian economy. He has taken steps which will not reduce the inflationary pressure but will only serve to prolong this dreadful period and have it followed by a recession, which will place us in a position similar to 1956-57. What a retrograde step to be taken by a government which won the faith of an electorate by its promise to give the Canadian people a bold, imaginative and daring team. The positive approach would have been so reassuring for all Canadians, be they manufacturers, producers, service industry workers or consumers.
The government has not heeded the warnings of the Porter commission, which recommends the removal of all impediments to the free use of monetary and fiscal policies to meet the present situation. It has not thought it advisable to encourage productivity as a means of combating inflation. It wants to
April 22, 1966

discourage productivity, but I warn that increased productivity is an essential basis tor continuing prosperity.
I quote from an article which appeared in the Globe and Mail of April 15 which tells how Canadian General Electric increased productivity:
The company purchased declining businesses and stimulated them to higher levels of production and employment and also acquired vacant plants and re-activated them as basic approaches to the expansion program.
[DOT] (3:10 p.m.)
In the first category. Canadian General Electric bought the Scarboro plant of John Inglis Co. Ltd. of Toronto and Amalgamated Electric Corp. of Markham, Ont.
In the second category, the company bought inactive plants at St. Andrews East, Que., Lachine, Que., and Trenton, Ont.
"At the time of their purchase by us, none of the last three plants was contributing a single manhour of production to the Canadian economy."
There, Mr. Speaker, you have one of the positive approaches by a progressive company to meet the demand for increased productivity in our country. Had the minister, with all his imagination, brought forth measures to encourage the reopening of so many of those plants in Canada which now are closed, we would have had a part solution to the problem of inflation through this increase in productivity.
This is the sort of encouragement which the Budget should have brought in. An increase in the output of goods per man unit is essential to the social and economic growth and the full utilization of all plant and machinery, of all human resources not now employed, and can lead only to improved productivity and availability of products for all. These are the ingredients for a full fledged growth with sustainable yield-the true hope for the future.
During the life of an ordinary economy we seem to concentrate our efforts more to settling the problems existing in the urban areas of the country. This is understandable, because in these areas the people living there first of all are faced with having to pay rent and do not have many of the facilities which those living in the rural areas would have. Therefore, in a time of recession their problems probably are more pressing. How can the minister explain that in a period of high employment, and with the fact of shortage of labour in the urban areas, we have not concentrated our efforts in those areas of Canada where there exists high unemployment, and thereby give to those people a 23033-265J
The Budget-Mr. Keays level of income which would be equal to that enjoyed by those living in the areas of high employment.
This is a time when we should concentrate on these slow growth areas, the financially distressed areas, because we claim there are no more problems in the area of high employment. Therefore, why not direct our attention to the problems in the slow growth areas and thereby raise the incomes of those who have been waiting so long and so desperately.
It is difficult to understand why harbour and marine works in coastal areas are being restricted, when the minister knows very well that projects of this nature do not necessarily require all skilled labour. Also by this method of restriction we are impeding the possibility of increased productivity which after all should be our main concern today. By holding back these possible developments in designated areas we are planning to put these areas in a severe depression whenever we will face inevitable recession, which we will have by the effect of this Budget.
Our national capital market is being strained. The new 5 per cent forced savings tax on corporations will widen the gap between the available capital and the outlays for means of expansion, which in many cases are essential to survival of many of our corporations. The minister's intentions may be good, but how does he expect that large corporations with plans on the drawing board, with personnel available to administer a larger business, with a program geared to greater production, can hold back their investment plans. They will obtain their financing from other sources and thereby add to the cost of plant and equipment which can be repaid only-and I repeat only-by increasing naturally not decreasing, the price of goods to consumers. These companies must remain competitive and are forced to continue the normal requirements of expansion. There may be a few companies which because of the lack of capital will be forbidden to expand, but many of them will not stop their expansion programs by reason of this forced saving of 5 per cent.
What this will mean is that it will cause these companies to pay 6, 6J and six and a half per cent on their loans, and then in a few years they will get a rebate on their loans of 5 per cent interest. This cost of plant will be reflected in the cost of consumer goods.

April 22. 1366
The Budget-Mr. Keays
The Minister has not found it proper immediately to eliminate the sales tax on production machinery and building materials. As I said earlier, plans to expand are going on, notwithstanding the forced savings on corporation profits. By planning the gradual elimination of the sales tax on machinery, we are only prolonging the inflationary period in which, when competition becomes more severe, we will not be in the same league as those who will be competing for markets, either domestic or foreign. If eventually we are forced to sell to meet competition, then our corporations will not be making a profit and, this being so, will not be an asset to our country.
When I realize that power chain saws are subject to the 11 per cent sales tax, I cannot understand the reasoning behind such a move. We are penalizing the woodsman because he wishes to work, and are endeavouring to discourage him from producing more. Measures of this kind are not conducive to increased production. We have discouraged home building. I can refer the minister only to a statement made by Mr. Jean-Yves Gelinas, president, National House Builders Association. Mr. Gelinas states, as quoted in the Globe and Mail of April 7:
Government policy has helped push house prices beyond the means oi many Canadians. The 11 per cent federal sales tax that remains on building materials contributes to inflation. In a tight mortgage market the builder finds himself in the position of a drowning man coming up for the third time and having the government reach forth and pull him from his predicament through the simple expediency of putting some mortgage money on the market. The government is the hero. Of course what is forgotten is that the rescuer originally pushed the victim in.
The article goes on to say:
The industry was asked last year by the federal government to gear itself for a doubling of production. he said, but such planning requires an assurance that mortgage money will be available.
Then Mr. Gelinas proceeds to say:
[DOT] (3:20 p.m.)
Today the government, in its concern about inflation, has taken a deliberate course to restrict mortgage funds available under the National Housing Act.
Further on he states:
In some areas it appears that C.M.H.C. has refused to approve loans for pre-sold houses to home-owner applicants. It is our contention that this policy is not halting inflationary trends, but rather it is contributing to inflation.
There you have a statement by the president of the National House Builders Association with regard to a problem which in

itself is of great concern to all Canadians. The country is aware of the fact that we do not have the funds necessary to continue public housing because the commitments of 1965 were not in keeping with the increases of the preceding two years. There is in this country a shortage of housing and the government does not seem to be fully aware of the danger of allowing a regression rather than an increase, which there must be to meet the demand for housing and the immediate need for slum clearance.
The daring budget was not heard. There is no imaginative undertaking. We have not ventured into new grounds for increasing productivity. We are satisfied to withhold expenditures in those areas of high employment, forgetting totally those hundreds of thousands of Canadians who live in depressed areas and we seem to condemn them forever to a secondary way of living. I do hope the minister will reconsider the sad effects that his budget will be creating in the areas of high unemployment and will take steps to cause a greater concentration on a settlement of the problems in these areas, and thus bring their level of income within striking distance of those living in the high employment areas of our country.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the budget proposals of the Minister of Finance (Mr. Sharp) when he spoke several days ago can only have the effect of making the rich of this country richer, and of the poor and the sick continuing to live in poverty and ill health. If the minister has ever heard of the idea that a budget should be used to redistribute the income of the people of the country on a more equitable basis, he certainly did not give any indication in the budget that he considered this principle of any importance. This budget is characterised by its tremendous concern for the status quo, for not interfering with the right of business to make a profit under any circumstances.
Today I wish to speak about one phase of Canada's life which I think the minister ignored completely. I refer to the fact that if this country is to progress as it must, there is an immediate need for a tremendous increase in our efforts in the field of scientific research. The present Minister of Citizenship and Immigration (Mr. Marchand), while he
April 22, 1966

was president of the Confederation of National Trade Unions said in a speech in Montreal just over a year ago:
The core of modern economy is research, yet here we are spending 1 per cent of the U.S. research figure. We are situated in the zone of influence of the largest economy in the world, yet we have done virtually nothing towards research- the driving force of any economy.
The Minister of Industry (Mr. Drury), speaking in March of last year in the city of Montreal, said:
The need for more research means that first priority must be given to the universities and other educational institutions, to ensure a continuing supply of qualified engineers and scientists in future years.
In the same speech the Minister of Industry gave a list of nine countries and showed the percentage of their gross national product which was being spent on research. Interestingly enough, Canada is at the bottom of the list. The United States spends 2.84 per cent on research, the United Kingdom 2.37 per cent, Soviet Russia 2 per cent, Japan 1.48 per cent, West Germany 1.18 per cent, Sweden 1.7 per cent, France 1.5 per cent, the Netherlands 1.4 per cent, and Canada 0.86 per cent. In the light of these figures and the statements of these two ministers with regard to the importance of research, what do we find in the budget speech of the Minister of Finance? The minister makes the announcement that because of the boom the government has decided that a building required by the National Research Council, the major research organization in Canada, will not be proceeded with this year because we simply have to slow up the boom.
On the day on which the minister's budget speech was reported in the Ottawa newspapers there was a report in those same newspapers that one of the large builders in the city of Ottawa was going ahead this year with the construction of a $30 million office and apartment complex. He did not listen to the minister's call for restraint, for a stretch-out. I do not blame him. He was interested in making a profit. There is nothing wrong with that. He is interested in building facilities which people with money are willing to pay for, so he is going ahead.
I suggest that if the minister was concerned about the boom and directing it, instead of simply announcing that the government will not go ahead with necessary projects, projects of the greatest importance to the welfare of all the people of this country, he would have considered, as he has not,
The Budget-Mr. Orlikow some system of priorities so that if we have to curtail our building boom at all we would curtail those things which are of the least importance to the Canadian people.
The need for an increase in the expenditure of money and effort for research was very well documented by McGill University in a submission they made to the Bladen Commission. I want to read in summary some of the things they said. They point out, with regard to the biological sciences:
While comparatively well-supported, these sciences are in fact not given the support they should have, and their strength is comparative only.
Then they say that Canada is not putting enough money and effort into research and therefore all the areas of endeavour are under supplied. Then they say further:
In the case of the biological sciences, the main concern at present is the loss of American funds due to the change of policy whereby research funds are to be spent within the United States rather than outside it.
Has there been any announcement by the government that there will be a replacement of these funds? If there has, I have not heard of it and neither have the universities. What do they say about the physical sciences? This is what McGill University had to say in this submission:
The physical sciences are in a worse plight, both comparatively and absolutely. The cost of sophisticated equipment is now becoming such that a scientist being invited to join a university staff will often detail his equipment and funding needs as a condition of his acceptance. The shortage of staff in the physical science departments, due in part to the opening of new universities, the drain to the States, and the continual movement into industry, put the chairmen of these departments into a most unenviable position.
These are just two illustrations of the problems that McGill University is facing. In their submission to the Bladen Commission they made some very specific recommendations.
[DOT] (3:30 p.m.)
I want to quote just a few of them:
That the government at least double the funds now given to universities to support research in the sciences, with the particular intention that institutional block grants may be greatly increased.
That the government declare forthwith a policy of replacing United States financial support with grants from its own funds, as that support is withdrawn from Canadian projects.
That the government allow an overhead institutional charge of 40 per cent of the total amount of all grants made to academic personnel working in Canadian universities.
April 22, 1966

The Budget-Mr. Orlikow
This is just one illustration, Mr. Speaker. Several months ago in December 1965, a brief was presented to the government outlining the needs in the field of medical research in Canada. This brief was endorsed by about 100 of the most prominent medical scientists in Canada. I want to read a few sentences which outline the position of the medical researchers as they see it. I quote:
Although financial support has been increasing, medical research in Canada today is being conducted on an inadequate scale. As the Royal Commission on Health Services commented: "Available funds lag behind the amounts needed for the support of research".
A substantial increase in capital and operating support for medical research in Canada is needed at once. The key consideration is the creation of conditions which will encourage teacher-scientists to remain in Canada and in teaching and research; which will encourage Canadian teacher-scientists and graduates now in the United States to return to work in Canadian universities and hospitals; and which will encourage undergraduates to take up research in the medical sciences as a career. Unless a more favourable environment for medical research is provided as a matter of urgency, the skilled manpower on which all else depends will be inadequate both in quantity and quality.
The figures supplied to us by the United States Immigration Department indicate that every year for the last five years at least we have been losing scientists and research people at a fantastic rate. We have been losing in the neighbourhood of 500 doctors, 500 engineers, 500 professors and scientists of various types. A report issued last week by the
O.E.C.D. indicates that Canada is losing scientists at a greater rate, three or four times the rate of other countries in western Europe. There is no indication from the minister that anything will be done about this situation. It is not a new situation. It is one which, as I have indicated, has already been brought to the attention of the government.
I have before me an article which appeared in the Toronto Globe and Mail in October, 1964. It is datelined, Chalk River, and I should like to quote two paragraphs:
Canada is reaching a stage where it must consider providing facilities for research in high-energy physics and improve its support for low-energy physics research, the director of the physics division of Atomic Energy of Canada Limited said yesterday.
A small team of researchers who work in the frontier of these fields is essential to the development of a modern technological society. Dr. L. G. Elliott suggested in an interview. They constitute a very high level educational group which trains the teachers who in turn train the country's engineers and scientists.


Well, this was written a year and a half ago. What has the minister and the government done about it? They have done nothing. Then in January, 1965, another article appeared in the Globe and Mail, and I want to read just a couple of paragraphs from it:
Four Canadian universities that are constructing basic science buildings may be forced to plead for a grant from the United States to equip them because the Canadian government says "no mechanism exists" for such a capital grant.
Dr. D. V. Bates, assistant dean for graduate studies in research, faculty of medicine at McGill University, said yesterday that Canada's most urgent research need is for nearly $4 million to equip new buildings at McGill, Dalhousie, University of British Columbia and the University of Western Ontario.
"We can't bring scientists and show them empty floor space. How can we recruit good men? They can't work without tools", he said.
I believe these illustrations I have given indicate clearly the need. Because of my interest in this subject, I have had correspondence with a large number of scientists across Canada. Since we have been asked to restrict our remarks so that we can finish the debate, I would like to quote from just two communications which I have recently received. One is from Dr. John Beck, who is the physician in chief at the Royal Victoria Hospital and director, McGill University clinic. I will just read one paragraph in which he says:
In the current year research support applied for in the fall of 1964, for the year 1965-1966, amounted to $681,939. Of this amount the M.R.C. granted $371,958 or approximately 54 per cent of the money requested. I personally reviewed all the applications with the investigators concerned and can assure you that the requests made were in no way out of line. If these investigative groups are to continue to compete with their confreres in the U.S.A. then they must have the facilities, both equipment and personnelwise, to carry on with the ideas which they have put forth.
Then, Mr. Speaker, I have a letter from the head of the Department of Pharmacology at the University of Manitoba, Dr. Nickerson. He said, and I quote:
We have had no serious recent financial setbacks, but have suffered like everyone else from the trimming around the edges which has been necessitated by the limited M.R.C. budget. As you know, most of the increase in funds to this agency has been offset by the transfer of responsibilities previously covered by health and welfare and other bodies which have not had comparable increases. After standing commitments were taken care of, we could give only 47 per cent of the money requested for new and renewal annual grants this year. This meant that funds classified as Bl, highly desirable but not absolutely essential, could not be granted, and the expansion of a number of our projects fell into this category. It was hoped that
April 22, 1966

these could be covered by the supplemental appropriation, but from the letter which arrived today, it appears that this allowed only a small part of the B1 category to be funded.
This letter from Dr. Nickerson was written on April 19 of this year. In the light of this, is it surprising that an increasing number of Canadian scientists in the field of physics, chemistry, medicine and other types of research leave Canada and go to the United States? I once tried to get the Dominion Bureau of Statistics to estimate the cost to Canada of educating these highly skilled people who left Canada. Finally, after a great deal of thought, they estimated the cost in this respect at something like $25 million a year. In the report to which I alluded, the report of the committee on research at McGill University which was submitted to the Bladen Commission, the cost was estimated at $75 million a year. It sems to me, as so often happens in this country, that this government is being penny wise and pound foolish. Faced by a problem, we find that the government has fallen into the usual trap which one can expect from Liberal governments, and allowed things to continue as they were.
[DOT] (3:40 p.m.)
This means, as I said at the beginning, that those who are wealthy will continue to be wealthy. The builder that I mentioned earlier in Ottawa who is no different from other builders in Montreal, Toronto, Winnipeg, Edmonton or Vancouver will not only continue to be wealthy but will become wealthier and wealthier. That will be at the expense of the Canadian people, and science will continue to be ignored.
In this connection may I read from a letter which I received, dealing with this subject, from the chairman of the Manitoba Economic Consultative Board, Mr. B. H. Kristjanson, who is a very experienced and highly respected civil servant. In fact he is a top person. May I quote a couple of paragraphs from his letter:
A basic problem in slow-growth areas such as the prairie region is that the public sector has to carry a large part of the costs. Head offices of giant corporations are not located here and the smaller firms carry on little, if any, research. Our own public revenues are also relatively limited. Indeed we are hard pressed to meet general education requirements for teachers.
At the same time we believe that an increase in the growth rate in this region requires a significant increase in the investment in science and technology applied to the resources of the region. This led us to recommend the establishment of a research park with a view to assembling an effective constellation of scientific talent at one spot. We have

The Budget-Mr. Chretien
estimated that a group of fifty scientists would call for a budget of perhaps three million dollars per year.
Mr. Speaker, I pause for a moment to say that an expenditure of $3 million a year in the field of basic research in the province of Manitoba is a very small amount of money when one looks at the tremendous sums spent on such projects-and I am not being critical -as Expo '67 or the Pan American games which will be held next year in my own city.
I continue quoting from the letter I received from Mr. Kristjanson:
My principal concern is that the effort be on a scale sufficiently large to merit the respect and attention of scientists on this continent. And here is where a fair amount of money will be required. This is where it seems to me that a federal allocation of funds would be very much in order. The need is to provide sufficient funds to be able to attract first-class personnel and to allow an inter-disciplinary approach to problems.
I agree completely with Mr. Kristjanson. If one studies the budget proposed by Minister of Finance he will see that if the minister does not disagree with the proposal put forward by Mr. Kristjanson, he has succeeded in ignoring it completely. If there is anything in the budget which could really give hope to Canadian scientists, I have not been able to find it.
I want to conclude by reading one sentence to the Minister of Finance from a speech made by Dr. Hans Selye, one of Canada's most distinguished and outstanding medical researchers. I quote:
Would it not be wise, for example, to put aside a small fraction of the huge sums we pay for a semblance of armed security, to develop for our children the foundations of a distinctively Canadian culture and scientific effort?
I commend those words to the Minister of Finance and hope that if he cannot give to them the consideration in the year 1966 that they warrant, that he will perhaps do so in 1967. If he does that, Mr. Speaker, he will deserve the thanks of all Canadian people.


Joseph Jacques Jean Chrétien: Mr. Speaker, as this is my first opportunity to rise on the budget debate as Parliamentary Secretary to the Minister of Finance, I preferred to wait a few days before giving the house my views on the current budget in order to know exactly what kind of criticism the opposition parties could direct at the Budget speech of the Minister of Finance (Mr. Sharp).
April 22, 1966

The Budget-Mr. Chretien
I would have thought that the opposition parties would at least find one common ground to justify their attacks on the government, but such was not the case, and I realize that most of the newspapers were right in saying that the present budget was built on solid ground. As a matter of fact, if the main editorials written on the present budget were to be reviewed, they would prove to say almost unanimously that this was a realistic and adequate budget, taking a positive view of problems and offering adequate solutions.
If we analyse the budget, we realize that the Minister of Finance had in this budget presentation two main objectives in mind on behalf of the Canadian people.
First, the minister indicated his intention to lay down policies designed to extend the present period of prosperity, unprecedented in the history of this country and secondly, he is striving meanwhile to contain as much as possible the increase in the cost of living through stabilization of prices and production costs.
It is generally recognized that we are in the sixth year of continued prosperity in Canada, without any let-up of the economy and that our production capacity has reached the highest level in many years.
In fact, statistics prove that the unemployment rate decreased in 1965 to an average of 3.5 per cent, a rate unequalled in the last twelve years at least and, according to forecasts found in the budgetary papers included in the white paper tabled by the Minister of Finance prior to the budget speech, it is obvious that the growth of our economy will remain at an unexpected level, even unhoped for, in 1966, and that will improve the situation in the weaker economic areas.
However, too quick a growth creates strong pressures on the Canadian economy, particularly in some more favoured areas such as the larger centers of the following provinces: Ontario, Quebec, Manitoba, Saskatchewan, Alberta and British Columbia.
During the weeks prior to the budget, the governor of the Bank of Canada, Mr. Ras-minsky, told Canadians about the imminent danger facing an over-extended economy which could result in a blow-out in the economic system, and he said that to avoid serious difficulties, it would be in order to take concrete steps to reduce the pressures on domestic demand.
Excessive demand has resulted in the last few months in a noticeable increase in prices

in various sectors of the economy, particularly in the field of construction where production costs are excessive in several parts of Canada.
[DOT] (3:50 p.m.)
The President of the Economic Council of Canada made a speech in Toronto a few weeks ago on the same subject; he, too, warned Canadians against the danger of an overextended economy. Now, the Minister of Finance, after analysing the situation, came to the conclusion that it is time, not to check the economic growth but to rationalize it in that the level of the economic growth must be maintained at a reasonable percentage in order to achieve the intended goals. To this end, the minister proposed to restrain the excessive increases in the demand in some areas and encourage the productivity and the competitive position of the Canadian industry.
He suggested, for instance, that the sales tax on production machinery and equipment be progressively reduced in order to enable industrialists to plan their investments instead of making them all in the same year, as there was an impending danger, following the forecasts for 1966, that the industrial sector of the Canadian economy was again planning huge investments, which would have exerted still greater pressures on our economy.
Now, by withdrawing progressively the sales tax on production machinery and equipment, the Minister of Finance wanted to induce various industries to make only the investments which were absolutely necessary and he was satisfied to learn that industrialists will invest in 1966 more than they invested in 1965, in order to meet immediate demands.
In withdrawing progressively the tax on production machinery and equipment, the minister induced those who were not forced to make immediate investments to postpone them so that our economy may continue to improve in 1967 and 1968.
I believe, Mr. Speaker, that this is a worthy and fair initiative because, since the demand has been too heavy in 1965, and was anticipated to be even heavier in 1966, it was of the utmost importance to give the industrial sector a valid reason to postpone projects which are not absolutely necessary in 1966, till 1967 or even 1968, when the economy may be in need of these investments which would have worsened the pressures in 1966.
The minister forecast, despite this initiative that some consider untimely for fear of a
April 22, 1966

slowdown in the economy in 1966, the minister, as I say, forecast that the Canadian economy, would in the 1966 fiscal year produce 8.5 per cent more than in 1965. That is, in spite of the measures taken by him and calling upon investors not to go too fast in 1966, the minister estimates that the gross national product will increase by 8.5 per cent in 1966, the level considered appropriate for the Canadian economy to develop, without creating overheating difficulties. As I said previously, we are in our sixth consecutive year of economic expansion. This is the longest period of expansion ever experienced by this country in peacetime. In the past, such periods were often followed by depressions. However, if we manage our affairs soundly, there is no reason why there should be a regression after this prosperity. On the other hand, if we allow certain pressures to build up, then we will find ourselves in a situation where prices and costs will increase excessively, and if there is an excessive increase in capital outlays, then we will be in a period of difficulty.
What the Minister of Finance sought to do was to hold back certain capital expenditures so that the long-term requirements of Canada could be met without causing great fluctuations and our present capacity of meeting our investment needs would not be overtaken by demand in that field.
The Second Annual Review of the Economic Council of Canada points out how industrial investments can be a factor contributing to the instability of the Canadian economy.
Declines and expansions in investment have historically been an important factor contributing to the unstable and uneven growth of the Canadian economy.
That is what the report says. Then the council points out that, even if the actual volume of such investment will have to go on expanding considerably from current levels if potential output is to be attained in 1970, the recent rate of expansion in investment spending is clearly not sustainable on a long-term basis to 1970 and beyond-see page 29 of the report.
The council mentions that any program to stabilize the expansion must tend to encourage an upswing in business investment with as close a relation as possible to potential growth of production. That is why the council recommends:
-that careful examination of possibilities for postponing and stretching out major construction 23033-266

The Budget-Mr. Chretien projects in areas of particularly acute shortages of construction manpower and capacity.
See page 186 of the report. That is exactly what the minister did.
Mr. Speaker, I think the Minister of Finance showed a great deal of imagination and objectivity when he used the 11 per cent sales tax on production machinery and equipment as an instrument for planning Canadian investments.
In fact, some industrialists are not going to invest in 1966 and will decide to wait for a year, if possible, in order to benefit from a 5 per cent reduction on machinery and equipment they will have to use in their new undertakings. Those who are not in such a tight position may wish to wait two years before making the investments they deemed necessary, in order to benefit from the full exemption, that is 11 per cent on machinery and equipment.
As reported in Mr. Newman's column in the Toronto Star the day after the Budget speech, it is a very new concept of the federal budget and I quote:
[DOT] (4:00 p.m.)

Despite the caution inherent in his approach, Mr. Sharp boldly rejected the old fashioned idea that governments tax only to raise money. Instead, the new Minister of Finance firmly established his intentions of using taxation in its much more creative application as an instrument for modifying the nation's economic trends.

One of the criticisms often raised during this debate, which I should like to point out, came from the opposition members representing the Atlantic provinces who claimed that this budget did not meet the requirements of the economic situation in that part of the country, where economic conditions may not be as good as elsewhere in the country.
However, coming myself from a riding which is a designated area because its unemployment rate was recognized as being over the Canadian average, I can point out to hon. members that the Department of Finance admits there are in the country some areas where unemployment is a problem which has not yet been completely solved and which deserves particular attention.
But, before talking about the appropriate measures, allow me to point out that unemployment has decreased enormously in the disadvantaged areas of the Canadian economy. At page 29 of the economic white paper,
April 22. 1966

The Budget-Mr. Chretien I find, table 16 which shows the unemployment rates by region.
Well, if I take the unemployment rate for the Atlantic provinces, I find that in 1965 that rate was the lowest since 1956. In fact, in 1957, the unemployment rate in eastern Canada stood at 8.4 per cent; in 1958, 12.5 per cent; in 1959, 10.9 per cent; in 1960, 10.7 per cent and in 1961, 11.2 per cent, etc.
In 1964, the rate was down to 7.8 per cent and, in 1965, to 7.4 per cent; that shows clearly that in the last few years the situation has been much better in that part of Canada than it was in 1958, 1959, 1960 and 1961. However, we are ready to admit that this situation has not been completely corrected yet and it is necessary to give it particular attention.
In the present budget, the Minister of Finance adopted measures which will not be the same throughout the country in that all the existing measures to help areas which are faced with an economic slowdown will remain in force.
In fact, since the Maritime provinces and the whole of eastern Quebec are covered by the assistance program for designated areas, the present budget provides that those designated areas were not to be affected by the economic control measures proposed. Although amortization allowances with regard to property acquired in the next 18 months will be considerably reduced for a period of three years everywhere in Canada, the amortization allowance rate will be kept at the same level for the designated areas; that will create a more favourable situation for those areas which are faced with slower economic growth. Indeed, that sensible difference in amortization will encourage industrialists to look even more to those designated areas where the Department of Industry is already granting grants of up to 33 per cent for all new investments in machinery and industrial construction.
Moreover, in the designated areas, which include all eastern Quebec practically and all the Maritime provinces, the income of the new manufacturing or processing industries which are eligible for a three-year income tax exemption will also be exempted from the refundable tax of 5 per cent.
If we add to what I have already said the fact that the government intends to maintain and even increase its assistance to the Atlantic region, through numerous programs similar to ARDA, the $100 million fund for the development of the Atlantic region, it is

obvious that the present budget favours the underdeveloped areas of Canada.
It is also to be noted that the government will maintain its public works program in the Maritimes, while it will be trimmed down in other parts of the country; it is unfortunate that the new policy on the causeway between New Brunswick and Prince Edward Island has been so badly misinterpreted.
It is well understood that the causeway will be continued and completed as per schedule. Only one change was made: a new work calendar was accepted so that the greater part of the work would be performed during the off-season, that is when unemployment reaches a peak, so that the project might contribute even more to the economy of those provinces.
There is one point, Mr. Speaker, which I would like to bring up because it is of great comfort to me, in that it is a new initiative which proves great imagination.
I mean the 5 per cent tax on cash profits, that is profits after tax deductions. In view of the $30,000 exemption, it is not meant for small businesses for after all they will not pay it. However, it is intended to deprive businesses temporarily of part of their cash profits which they might otherwise be tempted to spend on capital expenditures this year. As there is a shortage of labour and material in capital goods industries, including construction, any additional expenditures would inevitably lead to increased costs and prices as a result of competition between businesses for labour and materials already in short supply.
It must be noted, however, Mr. Speaker, that this new initiative does not apply in areas recognized as less economically developed in Canada, namely, the designated areas.
The funds paid to the federal government will bear an annual interest of 5 per cent and may be repaid at any time, from 18 to 36 months afterwards, thus enabling the federal government to release them when resources are subject to lesser pressures and allowing investments to keep on expanding at a more easily maintained rate.
This notion of a refundable tax on cash profits is an entirely new one. It is somewhat similar to the Swedish program also designed to regulate capital expenditures. It is different in that, except for this $30,000 exemption, all companies are taxed, whereas the Swedish system is optional. It is also different in that Swedish authorities have set no time limit for
April 22, 1S66

repayment. In Sweden, finally, the funds can be released only for specific purposes or for use in specific areas. We believe that due to the situation in Canada, it is easier to achieve our aims by means of the provisions we have suggested.
Mr. Speaker, I would have a lot more to say, but a great number of members still wish to take part in this debate. I shall therefore conclude my remarks immediately. In conclusion, however, I should like to commend the Minister of Finance for having submitted to Canada an objective and realistic budget which was well received in all parts of the country. We only have to read the comments in the press to realize that the Minister of Finance was really successful in bringing down his first budget, as the new minister in charge of Canada's economy.


Marcel Joseph Aimé Lambert: Mr. Speaker, I am extremely sorry but I do not agree with the comments made by the hon. member for Saint Maurice-Lafleche (Mr. Chretien), Parliamentary Secretary to the Minister of Finance, about the budget. Unfortunately, we are moving toward the end of the Budget speech, and all the necessary time to criticize it will not be made available to me because it would take me at least two hours to do so, especially to point out some of the deficiencies which could be found in it.

Mr. Speaker, I want to make just a few brief observations. Many of my colleagues have spoken on specific subjects and I would not like to repeat all that has been said. But there is one brief remark I would like to make at the outset, and I trust Your Honour will permit me because on Wednesday afternoon my colleague from Yukon (Mr. Nielsen) delivered himself of a considerable speech on a subject irrelevant to this discussion.
I have nothing personal in this, except to say it involved his region of the Yukon, my city of Edmonton and the province of Alberta. I would merely say that the nature of the extravagant language he used in describing the actions of the city of Edmonton demonstrated in reverse ratio the strength of the case he was trying to put forward. Having said that, I think cool reason and a responsible approach to what we both are trying to do will achieve success, rather than standing on the side lines firing off soaring fireworks of extravagant allegations.
There are so many things that could be said about this Budget. First, I am going to
23033-266i
The Budget-Mr. Lambert put on the record a quotation from Dicken's "Tale of Two Cities", with due apology to Mr. Earle McLaughlin, President of the Royal Bank of Canada-with whose remarks I do not always agree, but I think in this case this is an apt description of the picture the minister tried to portray the other night. In speaking of 1965 Mr. McLaughlin used this quotation:
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us. we had nothing before us. we were all going direct to heaven, we were all going direct the other way-in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received. for good or for evil, in the superlative degree of comparison only.
[DOT] (4:10 p.m.)
I think that this would describe the minister's remarks of self-congratulation on the achievements of the administration which he represents, so far as fiscal and monetary conditions in Canada are concerned. Well, all we got out of it was that the minister finally admitted, after many denials by representatives on the government side, in the previous year, in the face of charges by members on all sides that inflation was becoming rampant in the country, that these were because of certain actions taken by the government-not by this minister, but by his predecessor. Therefore I certainly cannot share his remarks at the time of the Budget with regard to the actions of his predecessor, because I do not believe there have been any actions although perhaps well intentioned and well meaning, as foolish as those taken by his predecessor.
In so far as inflation is concerned, the minister is attempting to deal with it; but as my colleague from Carleton (Mr. Bell) pointed out yesterday, the minister's hands are tied by the policies of his own government in the previous years. The present Minister of Finance (Mr. Sharp) has no more control over the fiscal and monetary policy of Canada than I have over the depth of ash on the moon; I have no control there, but neither has the Minister of Finance, because first of all the dealings of this government with the provinces have given the provinces a far greater slice of the public share of the gross national product than has the federal government.
We are exhorted not only by the governor of the Bank of Canada but also by the minister
April 22. 1966

The Budget-Mr. Lambert with regard to restriction of activity and stretch-out of some building programs. Frankly, the stretch-out is peanuts, it is meaningless. However, the provincial administrations have taken the lid off their activities. In my own province of Alberta this year's budget is up 38 per cent over 1964-$682 million for 1,400,000 people. If there should be a policy of restraint-and I agree there should be-then this must be applied all the way around, because if the $1 that the Minister of Finance of Canada attempts to save-and does-is spent twice and three times over by a provincial treasury, or provincial administration or through it by a municipality, what does it do? The effect is the same on the inflationary pressure, and we are going to see a continuation of the increase in prices.
The minister said the federal government is going to cut back some $34 million of public works. Within the last two weeks a series of wage contracts have been signed in Montreal which will more than wipe out everything the minister has attempted to do. Already we can hear the rumblings in the Ottawa construction trade concerning what it will mean to the price of a house or building in late 1967, 1968 and 1969; it is going to be fantastic. Because this was started in the particular area of Montreal it will spread; it is now spreading to this area and soon will have a relative effect across the country.
Let us not hide our heads in some sort of a cloud of self-delusion that all is good and proper in the best of all possible worlds. I would have liked to see something in the Budget with regard to removing the ceiling on the gift tax so that it would be meaningful to institutions of higher learning-the universities. I know that perhaps the minister would like to do this. We receive so many requests on behalf of medical research. Our universities are crying out and are woefully short of plant and teachers for medical training and medical research, research in this country by our own people.
What is the good of training hundreds and hundreds of well educated medical graduates and then have them go to do their postgraduate work in the United States, where they remain in too great numbers. We look at the federal contribution to medical research; it is picayune. Perhaps we have seen the glimmer of something; I note in the report of the president of the University of British Columbia, which appeared the other day, that

the federal government has made an additional $3 million grant toward the construction of a teaching hospital on the campus to be administered by the University of British Columbia-an extra $3 million for the purpose of teaching, and I am told this is the first time. I hope this is repeated time and time again. However, I should like to see the private sector of Canada make similar gestures toward research, not only medical, but also scientific research. We have the people, but we must be able to pay them.


Mr. Deachman:: May I ask the hon. member
a question?


Marcel Joseph Aimé Lambert: I have only a few minutes and I would like to continue.
I should like to see this encouraged not only by the removal of the gift tax with these specific purposes in mind, but also by some meaningful exemption in relation to the estate tax with regard to particular matters of this kind. How can we encourage people to accumulate funds for these particular purposes, when somehow or other the accumulation of an estate has a bad name in Canada.


Grant Deachman: Who gave the $4 million to it.


Marcel Joseph Aimé Lambert: I know the gifts that were made by the Woodward family and others.


Grant Deachman: I will not confuse you with the facts. Go on with your story.


Marcel Joseph Aimé Lambert: I would like to be able to encourage the minister in this particular sector so that we can get this encouragement for our individuals, both with regard to the estate tax and the gift tax. This is a suggestion I would make. The last point I should like to refer to in these few remarks I have today is on the question of inflation. The other day when the minister was talking about an extension of some relief under the S.E.C. regulations in the United States I had asked what had been the quid pro quo given by Canada and I was told there was none. I wanted to be satisfied that in so doing the minister was not having a halter slipped around his neck, as was done in the case of his predecessor in 1963, in order to gain some short term advantage, and an illusionary advantage, under the equalization tax act of the United States.


Mitchell William Sharp: Access to the United States market is not very illusory.
April 22, 1966
[DOT] (4:20 p.m.)


Marcel Joseph Aimé Lambert: It was illusory in the long run for Canada in that we then undertook to limit our holdings of foreign reserves at $2,600 million expressed in U.S. funds. I simply say that the then minister of finance had a bridle slipped on him; he also took the bit, not one bit but two, a curb bit with a very tight curb. The net result is that the Minister of Finance, who should have a very useful tool at his disposal to curb inflation, is now prohibited from so doing by the agreement with the United States in that Canada must keep an artificial ceiling on its interest rate in order to discourage the coming into Canada of foreign funds, which must be controlled because of this agreed ceiling of $2,600 million. This is a proposal that I want considered: Would it not be better today to remove ourselves from the exemptions of the Interest Equalization Act?


Mitchell William Sharp: We would have to pay more for our borrowings.


Marcel Joseph Aimé Lambert: Yes, we would have to pay more for our borrowings, but the minister is now asking for the same thing in another way. We can argue this matter at greater length some other time. I cannot deal with it at length now because it would take from 20 minutes to half an hour to go into detail. However, Mr. Speaker, I ask that this proposal be considered, in order to allow us to use our own monetary tools to control our domestic monetary policy. We are hobbling ourselves with a foreign exchange tool of control. What is the greatest advantage to Canada in the long run? Is it the higher cost of funds borrowed in foreign markets, or the erosion of our savings in Canada, causing untold hardship to our people on fixed incomes as a result of inflation?
The minister has said he is trying to curb inflation, but let us refer to his Budget papers. On page 19 of the budget papers there is a paragraph on prices which indicates that there was a good 3 per cent increase in prices in 1965. Then there is this illuminating statement:
All of these factors, in the context of conditions in the early months of 1966, suggest that it would not be prudent to assume a rate of price increase any less than that recorded in 1965.
So we can expect the same thing in 1966 as we had in 1965. Does the minister mean that his efforts to combat inflation will not succeed in reducing the rate of inflation, or will he merely contain inflation to the level of
The Budget-Mr. Yanakis 1965? If that is all this budget is aimed at, I say it misses the mark and does not do the job that needs to be done in Canada.


Mr. Antonio Yanakis (Berlhier-Maskinonge-Delanaudiere):: Mr. Speaker, I should also like to congratulate in particular the Minister of Finance (Mr. Sharp) for the foresight he showed in his Budget speech, which is both cautious and realistic.
The first budget of the minister was a complex and skilfully introduced document, which evidenced not only the cool thinking and the ability of the Minister of Finance but also his hesitation to attempt any fiscal adventures.
The main purpose of the delicate balance in the series of measures proposed is to curtail the general requirements of the Canadian consumer and to encourage the Canadian businessman to slow down in his capital investments and his importations. The minister therefore wants to make our economy free from inflationary pressures and extend, beyond our centennial year, our present prosperity.
The budget speech itself was the least partisan of all those heard in the house of recent date.
The new Minister of Finance read his
16,000	word document with the brilliant selfconfidence of a reasonable man in an unreasonable world. To see him make his speech in the house was like seeing a perfectly adapted human machine at work.
In spite of the caution which he had to show, the minister rejected the obsolete concept according to which the government creates taxes for the sole purpose of collecting money. Instead the new Minister of Finance firmly declared his intention to use taxes in a much more creative way to alter the economic trends in the country.
The minister also re-asserted that, in spite of this age of co-operative federalism, Ottawa still has an important impact on the Canadian economy. Even the cautious measures of the budget will, in 1966, change the figure of the gross national product-the sum total of Canadian earnings and production-from 9 per cent to 8J per cent.
Mr. Speaker, one of the main objectives of the minister is to reduce substantially the capital outlays of the public and private sectors during the next year. As far as private undertakings are concerned, they are subject to two main measures intended to

4202	COMMONS
The Budget-Mr. Yanakis slow down their investment appetite. They will have to pay the treasury a 5 per cent refundable tax on their gross profits. They will also be granted a partial or total exemption from the 11 per cent sales tax on some capital goods, provided they agree to postpone the purchase of those goods for one or two years. These two measures will certainly regulate the flow of investments.
According to two Quebec economists, Messrs. Claude Masson and H. Djabanbin, the federal budget is economically sound in the circumstances; more particularly, it has certain flexible fiscal provisions which can be changed if need be. The budget of the minister obviously carries an incentive to reduce the rate of expenditure so as to extend the period of Canada's economic development. The maintenance of the 11 per cent tax on building materials is justified, since this is the area of highest inflationary pressure for the time being.
The president of the Confederation of National Trade Unions, Marcel Pepin, said he was pleased the federal budget did not increase the income tax for those who earn less than $5,000 a year. He also added:
It is a step in the right direction; soon, the taxable minimum will have to be raised.
All in all, the tax measures advocated by the hon. minister please the Labour Congress. That is the opinion expressed by the general secretary of the organization, Mr. MacDonald. He stated that the C.L.C. was very pleased to see the Minister of Finance was not a victim of those who endeavour to set off a general panic with regard to inflation. The union representative added that the minister's decision to reduce the taxes levied in the case of certain low-income groups was a first step in the war against poverty. Mr. MacDonald also said he was pleased with the initiative of imposing a special refundable tax on corporate profits. This measure will enable the government to plan certain long-term expenses. As far as the war on poverty is concerned, I dare hope that the Minister of Finance, in the obvious fight he is seeking to put up in order to maintain and distribute the national income amongst all classes of society, will find a way to provide for the most unfortunate class in Canada, that of people over 65 years of age, ..ho now get a lean $75 per month. It should be possible to implement, in the near future, the recommendations of the report brought down by Senator Croll, and to guarantee $105 per month for persons who live alone, without other
[Mr. Yanakis.1
DEBATES	April 22, 1966
sources of income, and $185 per month for married couples.
To bring about a change in order to extend rather than to check the development of the country, this is the significant wager that the Minister of Finance was willing to take up. It is felt that the measures he proposed will reduce by one third of a billion dollars the amounts of money which Canadian businessmen intended to invest with a view to developing their businesses this year. This, in addition to the other deflationary provisions of the budget, will quickly slow down the accelerated pace of our economy.
Two measures which will indirectly have a favourable effect on our current deficit is the abolition of the 15 per cent tax on the sale of Canadian government bonds in the United States, and the fact that a great part of the production machinery, the purchase of which is prevented by the budget, would have been imported from the United States.
[DOT] (4:30 p.m.)
1English]
The government, Mr. Speaker, has introduced a budget to pace prosperity. The boom was getting out of control and the Minister of Finance (Mr. Sharp) initiated action on a number of fronts. To begin with, he has restored about two thirds of Mr. Gordon's short-lived income tax cuts of 1965. There are still some wispy concessions to persons in the lower strata; but for the most part, things are pretty much as they were in 1964. Second, the government has deferred another group of construction expenditures, with a total value of $34.8 million. At the same time it has promised to forgo new spending programs, except in emergencies, and has appealed to the provinces to exercise similar restraint, notably with regard to highway programs.
A third major measure is the refundable tax on cash profits. The minister hopes, by this device, to divert probably for 18 months a portion of the flow of business funds into capital expenditures. Two other changes announced are intended to check inflationary pressure by inducing postponements of the capital programs which are bidding up costs. The minister has decreased them selectively. The new restrictions will not apply to heavy construction equipment or to equipment required for long-term utility projects, but they will bear on such assets as buildings and machinery.
April 22, 1966

In the same fashion, and with the further purpose of stimulating higher productivity, the Minister of Finance has made a distinction between production machinery, on which the tax is to be eliminated by stages, and building materials which could scarcely be cheapened without stimulating an already excessive demand. The minister dangles an effective carrot; the longer business waits, the cheaper the final investment.
General praise has been accorded the Budget. There has been commendation of the removal by stages of the sales tax on production machinery. The personal income tax changes, with small reductions for low income earners, were described as a move in the right direction by the Canadian Labour Congress. As far as manufacturers are concerned, it has been called a "groan today, grin tomorrow" budget. Mr. Fred Samis, general manager of the Canadian Electrical Manufacturers Association said that the budget has put his industry in a more competitive position in foreign markets.
The tariff changes in the budget drew approval from the Canadian Importers Association. A joint statement by the Canadian and Montreal Stock Exchanges said that the elimination of the withholding tax should relieve our balance of payments situation by making bonds more attractive to foreign investors.
The Minister of Finance has explained that his budget was designed to slow down but not halt the boom; to reduce the inflation factor in the increase in the gross national product; to steady the headlong Canadian course by cutting the amount of money individuals and business would have to send chasing after a short supply of labour and materials.
Federal, provincial and municipal governments will all find it easier to borrow money with the removal of the 15 per cent witholding tax on interest payments to non-residents on securities of Canadian governments. It is hoped that the change will enable some borrowing to be done in Europe.
In his attempt to use the budget as an important factor in influencing the economy on a short-term basis, the minister has fashioned a new tool. The compulsory savings plan for large businesses could, in theory, give the government the means to help decelerate or accelerate the economy at very short notice. As far as is known, the scheme is unprecedented anywhere. If the plan works, a
The Budget-Mr. Yanakis considerable step forward will have been taken toward the goal of managing the economy, so that the peaks and valleys of boom and recession are levelled out.
In the past, Mr. Speaker, ministers of finance have shared a certain resignation towards economic fluctuations. They believed that prosperity and recession came in cycles. These cycles might be influenced here and there, but they were like a solemn law of nature, not really to be avoided in their inevitable succession. Now, however, a new kind of hope is being entertained. The economic upswing has continued longer than anyone expected, longer than anyone thought possible. The hope grows that perhaps it can be kept growing indefinitely.
Most business executives agreed that the budget was the best statement of fiscal policy to come from the Liberals since they regained office in 1963. A typical reaction was that the refundable tax would help to dampen the leading edge of the boom without destroying it.
The Canadian Chamber of Commerce was generally favourable toward the budget and the chairman of its executive council said:
The budget recognizes that the economy's thermostat has been set too high, and appropriately and realistically calls for some measures of restraint to bring about a better balance of supply and demand.
The Canadian Manufacturers' Association called the levy imaginative. They said it was designed to meet current circumstances, and although it will not be liked by those affected it is much to be preferred to a flat tax increase. By providing for interest on the refund, the finance minister has demonstrated that he believes the modernization program of industry must only be reined in while inflation is a threat.
[DOT] (4:40 p.m.)
The Budget generally found favour among Canadians, because the minister was not a victim of those who have been trying to press the panic button on inflation; because of the reduction in taxes on low-income groups as a step in the right direction in the war on poverty; because of originality in the conception of the 5 per cent refundable profit tax, and because of specific measures such as the removal of sales tax on production machinery.

Mr. Speaker, that is my modest contribution to the present debate on the budget
April 22. 1966

The Budget-Mr. Macquarrie which, I am sure, will be interpreted by all Canadians as realistic and as maintaining Canada, whose growing economy makes the whole world envious, on the road of progress.
LEnglisM


Mr. Heath Macquarrie (Queens):: Mr. Speaker, I think it is always a good thing, but especially in the closing hours of a debate, for one to abridge his remarks as much as possible. I will try to do that.
Many of my colleagues from the Atlantic region have in my opinion made most excellent speeches on the very important problems facing our part of the country. In my few minutes I wish to talk about one aspect only, and that is the relationship of the regional economy from which I come to the national economy. One of the fundamental responsibilities of the national government is to use its power, economic and otherwise, to minimize inequalities which exist as between regions in the country, and between particular regions and the country as a whole. Some of these regions suffer economic inequalities in large measure because of national policies. Therefore the responsibility of the national government becomes all the more sharp. It is all the more incumbent upon those of us from such areas to bring our legitimate complaints and our carefully thought out suggestions to the government's attention.
I believe that this government, through its policies, is diminishing its power to equalize the economic advantages and disadvantages in this country. I believe the whole confederation process was in part a measure for sharing economic wherewithal, and sharing advantages and disadvantages. My colleague from Edmonton West (Mr. Lambert), or from Klondike South as he has facetiously been referred to did a good job in discussing the way in which the government has abridged its power to assist and to operate significantly in these areas.
I shall speak not of the power, and the diminution of that, but of the will to move in the direction of adjusting disparities between economic regions. I do not think that that will has been or is being shown. The parliamentary secretary to the Minister of Finance (Mr. Chretien) in my opinion made an excellent speech. Being a little more definitive, I would say that he did a fine job in arguing a very poor case.
I do not think that the strong point of the minister's Budget, or his Budget speech, was its attention to problems of regional economies
TMr. Yanakis.]

or to measures that the government has taken in relation thereto. In the past we have made many suggestions as to improvements in the Atlantic region, where the disparities are becoming more acute. Many of us from time to time have pointed out instances where the government's actions have directly contributed to widening the gap which exists economically between Atlantic Canada and the rest of Canada. Let me cite in our own city of Charlottetown the closing of the Enamel & Heating Plant also to be mentioned are the closing of military bases such as the one at Goose Bay, and the closing down of H.M.C.S. Queen Charlotte.
If my colleague from Prince Edward Island had not dealt so well and so convincingly with the causeway deferment or rescheduling, I would have discussed it. We may come to a miraculous manifestation. Our causeway is going to be built just as quickly, while less money is going to be spent on it. A shorter season of the year is going to be used, and so on. Having listened to words to this effect, I wonder why such an inconsequential thing was even mentioned by the minister in his Budget night presentation.
We shall remember in Prince Edward Island this little exercise in semantics and we shall remember certain commitments which have been made as a result of explanations of what the minister said, when he was talking about his deferments.
History will record, and one need not adopt a partisan attitude to say this, that this government has never manifested concern for the Atlantic region, such as its predecessor manifested from its first days in office.
The former minister of finance has left the cabinet. But it would appear that his maritime outlook still lingers on. He said: "Assistance should be given to the maritimes who might wish to move to other parts of Canada where there might be greater opportunities". That is a little travel subsidy. I heard that the people of Bell Island in Newfoundland are going to come into this category. As they face their bleak economic future they will receive assistance in moving out.
I say, do not subsidize a program of pushing the maritimers out of the maritimes. Do something, rather, to push the region ahead economically so that our young people may be able to stay there and make their contribution to Canada in their own part of Canada. Why should we be the economic transients of this country, subsidized in our
April 22. 1966

The Budget-Mr. Latulippe important, the relationship between the region and the rest of the country. It would give careful scrutiny to the adjustment of national policy in respect of increased economic goals for the Atlantic part of Canada. Important contributions have already been made by the Duncan and White commissions.
After watching painfully the way in which the national government has failed to show interest and initiative in dealing with the Atlantic economy I believe the time has come to set up another royal commission, comprehensive and all-embracing so that we may look quickly and with some sense of urgency at a situation where in a great and prosperous country such as Canada that part of Canada where confederation began slips further and further back while the rest of the country gets ahead. I believe another royal commission might at least focus attention on this question and amass information impressive enough for the minister, at some time, to use. I commend such a suggestion to him and to the house.


Mr. Henri Latulippe (Compton-Frontenac):: Mr. Speaker, I am glad of this opportunity to say a few words on the Budget speech and on the whole economic situation in Canada. We are told, according to this Budget speech, that Canada is prosperous, that prosperity is everywhere and that everything is running smoothly. Then, when things are going too well, restrictions are imposed to prevent further progress.
Mr. Speaker, we are told the economy is in fine shape-why then are there restrictions on credit and investments?
I wish I were strong and powerful enough to open the ears of the Minister of Finance and the other ministers, particularly those who are at the controls, and especially the Prime Minister, who is the one in charge of the present administration, the country and the people.
The Minister of Finance is at the controls of all the monetary, economic and political machinery concerning taxation, income tax and gains. It is up to him especially, as well as to the others, to analyse the revenues, expenditures and gains of citizens, families and institutions.
The minister knows very well, through experience, that our democratic and financial systems can no longer co-exist and that instead of democracy there is at the moment a dictatorship which prevents young and old, men
[Mr. Macauarrie.l

Quite frequently, the banks refuse loans, even family loans, when the customer's solvency leaves to be desired; in such cases, he is advised to apply for his loan to a finance company where he has better chances of getting it. If the customer does get his loan, he pays up to 24 per cent in interest.
If the finance company has the money, it is because it has obtained credit from the bank. That is the true picture, Mr. Speaker. It is an odd situation and we have some difficulty in understanding the reason for the general dissatisfaction among the citizens. Successive taxes create inflation and, to correct the situation, further credit restrictions are imposed, investments are restricted, supposedly to fight inflation.
Mr. Speaker, the inflation in the present system is caused by the governments, their taxes and the debts they enter into and the interest they pay to the financial authorities of this and other countries. It is not the money in circulation.
The government enforces credit restrictions because it is in agreement with the bankers, because the citizens are too deep in debt, and the same is true for the school boards, the municipalities and vestry boards, for institutions of all kinds as well as for the farmers.
Here we must ask ourselves this question. Why are the citizens and the governments so much in debt with some financiers? It is because the government of Canada has given up controlling the issue of money and credit and put it in the hands of some private institutions which, through that control and that power, cash in on our wealth, adding the citizens' assets to their own and putting on the debit side the assets and inheritance of past generations; thus the assets of the governments have been entered on the debit side.
Our governments, our ministers of finance bow before those trusts to such an extent that they have become the tools or servants of those private institutions.
Instead of taking over again the control of money and credit, they bow before those institutions, they put the country into debt, they let the citizens get into debt and be robbed. The Minister of Finance knows very well that it is mathematically impossible to reimburse more money than was received from those institutions. Bankruptcies, debts relinquished, unreceivable, citizens in debt, governments in debt, budgetary deficits, credit restrictions and limited investments are the results. There is more unemployment and
The Budget-Mr. Latulippe poverty, citizens are voicing their dissatisfaction, workers go on strike, families are being dislocated, children are left without anybody to care for them, without education, farmers leave their farms, businesses go bankrupt, the wealthy become wealthier, but fewer in number, there is more poverty, the working man is robbed to help the unemployed, a large number of people live on welfare, the federal government's contribution to social welfare is nearly $1.5 billion, as much as for national defence, besides the hundreds of millions of dollars paid by the provinces.
To develop our natural resources, build bridges and roads, expand industries, build family dwellings, schools, universities, churches, hospitals, establish municipalities, school boards, you have to run deeper into debt, and this falls on the taxpayer already crushed by private and public debts of the past.
The Minister of Finance is mainly responsible for our anti-social and anti-human system; usurers, usurpers, murderers who will lead future generations to suicide.
As a corrective measure, winter work programs were invented. It is the biggest farce yet. Seventy five per cent of the money given municipalities goes to waste.
People are even used as beasts of burden. I have seen in my own constituency people harnessed to a wagon to carry soil up a hill. Instead of using horses, 25 or 30 men had been harnessed to a wagon to carry stones and earth. It costs a hundred times more to use men instead of machines. Although machines are available, representing progress, we still prefer the ancient way of doing things with human hands.
Is that what is called progress? Is that the fine budget which newspapers and publicists praised to high heaven? A tremendous amount of publicity was given to a debt-incurring budget, which does not face up to realities in Canada.
There are in this house many members, including the Minister of Finance, who see only prosperity and growth. I submit that many institutions, like the stock exchange, fleece our people. Investors draw in interest three times the capital loaned and even at that the capital is still intact. That is, hon. minister, the area where you should keep a watchful eye.
The Minister of Finance foresees a marked increase in national production which will reach $54 billion but he provides no means allowing this increased prdouction to reach the householders, the tables of Canadians,
April 22, 1986

The Budget-Mr. Latulippe those who are unshod and shabbily clothed, and those families who are in need of better housing and who could make use of progress and scientific developments available.
No, the minister prefers to put the brakes on investments and credits which will increase even more the wealth of the blood suckers spawned by an obsolete and orthodox system, devoid of social sense and heedless of the common weal.
With a stroke of the pen the banker swells the figures in his books in order to increase the debts; as there are a great number of debt-ridden persons, they are refused more credit.
Others who do not like to get into debt avoid asking the banker to wield his pen. The figures remain static because they refuse to get deeper into debt.
No other pen than that one can write down figures giving a right to goods. It is not on God's orders that there are no others, but because of a stupid rule made by men, by those entrusted with the administration.
Figures are adjustable, but when they are related to amounts entitling to goods, it is man who is adjusted to the figures.
The man is there feeling hungry, there is food but no figure. A great many people find that normal and feel that this system is entirely sound and moral. Those who think like that are like those who have their nose in manure and smell nothing; they even think it smells good.
The financial system is a failure and yet the present leaders declares that it should be preserved and protected.
The present system put Canada $75 million in debt when Confederation was established. Today, after 99 years of unstinting work, our national debt has reached $25 billion and the indebtedness of all governments and of the Canadian people totals $86 billion. The public debt comprises money which does not exist, which never existed and which the governments have undertaken to repay with interest.
Our economic life is rotten. This way of coining money lending it and imposing an interest upon it at birth, is the most diabolical invention ever thought of to disrupt the economy, to sabotage, to sow discord and hate between nations and men and to change man into a wolf preying on his fellow men.
[DOT] (5:10 p.m.)
As a solution to this problem, Mr. Speaker, there are two ways by which men could


purchase their share of progress: first, by lowering the price of goods, to allow to get more for each dollar; second, by increasing the number of dollars in the hands of the consumers.
We are obliged to curtail production. But, Mr. Speaker, if there is no production then why curtail it? Then, there is no problem production wise.
Those who remain attached to the old method of financial distribution are enemies of progress. They paralyse its expansion in production and prepare the revolution; since progress is what distinguishes man from beast, Social Credit establishes a distinction between intelligent and stupid people.
Mr. Speaker, I would say in passing to the Minister of Finance that the income tax formula contains serious discrimination. Why not have the same income tax formula for all citizens? Why protect some groups in our society by taxing them less? All citizens should be on the same footing. Why allow some institutions to build up some reserves, undeclared or declared, so that they might invest in the stock market and other institutions, in order finally to declare that they are capital gains exempt from tax? This is one injustice I point out to the minister. There would be a lot more to say about that.
In order to be fair, single people who earn $3,000 should be tax exempt just like married people with an income of $5,000, and also there should be an exemption of $1,000 for each child.
As far as family allowances are concerned, in 1945 they were $5, $6, $7 and $8 a month and national production reached $11,400 million. Family allowances have remained almost at the same rate, that is $6 and $8 a month, while production reached $51 billion in 1965. Could we not have found two extra billion for the children 16 years of age or under who have no purchasing power? The amount of $6 a month or 20 cents a day is not even enough to buy a quart of milk or to pay the taxes included in the current cost of living of those children.
Old age pensions were increased from $40 to $46, from $55 to $65, and from $65 to $75. The cost of living of a child under 16 is just as high as that of a senior citizen.
The ministers and members in Ottawa, who are the only ones responsible for legislating and allocating funds in the field of family allowances, should first of all increase those allowances and adjust them to the cost of living.
April 22, 1966

Instead of laughing at families by giving them $6 and $8, we should give them adequate allowances instead of miserly ones. All other elements have been multiplied by 6, 8, 10 and 12. The 6.7 million children in 2.8 million families would thus have a purchasing power adjusted to the evolution of the economy since 1945 and the $2 billion injected in the consumption in the provinces, cities and rural areas would give new impetus to the economy, production, industry, trade, construction, education, labour and balance family payments throughout Canada, without distinction of race, religion, language, sex or nationality. That would be a proof of common sense with regard to our families and our children.
Progress causes unemployment, the system must cause lay-offs. Greater money supply without higher prices. Figures and prices must dovetail. There are no production problems, only purchasing problems. People do without things not for lack of production, but for lack of money.
Several members, of parliament and many Canadian citizens, might perchance be tempted to ask what would be the use of putting more money in circulation? But ask yourselves what is the use of having products if there is no money to purchase them. They only serve to create unemployment, frustrated and discouraged people.
With the present financial system, it is impossible to lower prices without harming the producer, as it is impossible to fill purses without raising prices.
If workers, through strikes or by other means, get higher wages, these raises are included in prices and the latter go up. The disparity remains between prices and buying power of money.
What should we do? We must put machines to work and distribute dividends to people. That is what we must do, Mr. Speaker.
Why should we ask for further production instead of asking for money to buy products which, in fact, are plentiful? To ask for work in order to buy the output of labour is tantamount to being forced to earn one's bread twice while eating it once. To ask for public works under the present financial system is just like asking for an increase in the cost of living.
Public production must be paid the same as private production.
The government makes us pay for public works through taxes. Do workers asking for

The Budget-Mr. Latulippe public works want more taxes, which are already very burdensome on the family budget? When some taxes are not paid by them directly, they fall back on the taxpayer anyway through prices.
The solution would be found in the distribution of more buying power, but without burdening the industry or the taxpayers. If the industry is asked to pay more, it will raise its prices. If the taxpayers are asked to pay more, the buying power is reduced.
Do you not see also that the present financial system is at the root of all our problems, all our difficulties in both the public and private sectors?
[English1


Mr. Deputy Speaker:: The hon. member for York North.


Mitchell William Sharp: Mr. Speaker, I rise on a point of order. As a comparative newcomer to this house, may I ask for your guidance in respect of whether as Minister of Finance I have the privilege of speaking again on the motion to go into committee of ways and means. I am a little uncertain and would not want to transgress the rules or do anything which is not in order.


Mr. Deputy Speaker:: Order. Perhaps I should refer the minister, in respect of his right of reply, to standing order 37 on pages 31 and 32. Standing order 37(2) reads as follows:
(2)	A reply shall be allowed to a member who has moved a substantive motion, but not to the mover of an amendment, the previous question or an instruction to a committee:
Then subsection (3):
(3)	In all cases Mr. Speaker shall Inform the house that the reply of the mover of the original motion closes the debate.
I think the question before the house now is whether or not this is a substantive motion. If the motion before the house to resolve itself into committee of ways and means is a substantive motion, then the minister is entitled to exercise the right of reply; if it is not a substantive motion, he has no right of reply. Therefore, the question before the house is, is this motion or is it not a substantive motion.
[DOT] (5:20 p.m.)
A definition of a substantive motion is given by Beauchesne at page 165 as follows:
A substantive motion is a self-contained proposal not incidental to any proceeding, amendable and drafted in such a way as to be capable of expressing a decision of the house.
April 22, 1966

The Budget-Mr. Addison
I would think the motion before the house is incidental to a proceeding of the house, in the sense that it is the procedure by which the house proceeds to the work of the committee of ways and means. I think this motion is a procedural and not a substantive one, and therefore the Minister of Finance does not have the right of reply.
May I refer hon. members to a ruling made by Mr. Speaker Beaudoin on April 2, 1957, when the then Minister of Finance, Mr. Harris, rose to speak in almost exactly the same situation. Mr. Speaker Beaudoin then ruled that while there was an argument for both sides, he would take the view that it was not a substantive motion and therefore the minister did not have the right of reply. I would give this information to the Minister of Finance.


Mitchell William Sharp: Thank you, Mr. Speaker, I would have welcomed the opportunity to make a few brief remarks in reply, but I shall certainly abide by your ruling.


John Hollings Addison: Mr. Speaker, I am sure the members in the house would rather hear from the Minister of Finance (Mr. Sharp) than myself at this time. I have been watching the clock and it seemed to me I would not have this distinct privilege but that he would. However, fate is sometimes in the hands of other people, and in this particular case Your Honour was the judge.
I wanted to speak this afternoon, and am delighted I have the opportunity to do so, because of the exchange that took place in the house this morning between the hon. member for Brome-Missisquoi (Mr. Grafftey) and the hon. member for Villeneuve (Mr. Caouette) with regard to the whole question of automobile safety. I listened very carefully this afternoon to the remarks of the hon. member for Queens (Mr. Macquarrie) who suggested that his was not a political argument and was not partisan in the sense that one political party was capturing the attention of the public in regard to the particular problem to which he was referring.
I for one certainly do not wish to see this question of automobile safety become a partisan, political instrument which can be used for a particular purpose or a particular party. I think everyone in this house is genuinely concerned about the safety of every Canadian citizen. I believe the problem facing us is a very substantial one. The hon. member for Brome-Missisquoi suggested that the hon. member for Villeneuve should not be included

in dealing with this problem because he had a conflict of interest. It may be assumed that I have a conflict of interest in this respect, but I would suggest this is an absurd assumption because those of us who are in the automobile business and understand it-and I have been in the business for 15 years-have something to offer for the general good.
I think we must identify the problem. I am sure we have all had experience through close, personal friends and others, of automobile accidents and deaths. Last year in Canada 4,879 people met their death in automobile accidents. A total of 395,310 people were injured in Canada last year. One traffic death occurs every 100 minutes in Canada, and one injury occurs every 3i minutes. In 1966, there will be 385,000 young Canadians who will reach driving age and only 6 per cent of them will have received any standard driving course. It is also interesting to note that 27 per cent of all traffic victims in 1965 were pedestrians.
Let us consider the statistics in the United States. Every 13 minutes a man, woman or child is killed in a traffic accident in that country. Every 18 seconds somebody is injured seriously enough to be disabled beyond the day of the accident. Financial losses in the United States pile up at the rate of $15,000 per second around the clock.
We have heard and read a great deal about the discussion that has been taking place in the United States with regard to automobile safety. Most of the publicity, serving the sensational side of this problem, is concerned with events after the accident has actually taken place, what happens inside the car, truck or other vehicle or what happens to the object it hits. It seems to me that the old adage "An ounce of prevention is worth a pound of cure" could well be applied here.
A program called "Elmer the safety elephant that never forgets" was instituted about 19 years ago in our public schools. This program is for children between the ages of approximately five to nine years and is sponsored in Canada by the Canadian Highway Council. A city that is very close to us, Hull, instituted this program a short while ago in 22 schools in the area. I am sorry the hon. member for Hull (Mr. Caron), who sits in front of me, is not here today. Comparing a five-month period when the Elmer safety program was not in effect with the same five months when the program was in effect, it was found that the accident rate in regard to children in Hull was cut by 50 per cent. This
April 22, 1S66

great reduction in accidents applies right across the country where the program is instituted, but it is only instituted in a fraction of the schools in Canada.
It is estimated that 85 per cent of motor vehicle accidents are caused by human error, 10 per cent by mechanical failure and 5 per cent by natural causes, weather, defective roads or whatever the case may be. I had the opportunity of speaking with a member from Vancouver today, who told me the experience in that city as a result of the safety check for motor vehicles that is mandatory. In Vancouver it is mandatory for each motor vehicle to be subjected to an inspection and safety test twice a year. Whereas the average across the country of automobile accidents due to mechanical failure is 10 per cent, because of the program in the city of Vancouver they have cut this figure to 1 per cent. This safety check program is rigidly enforced by the law in that city and the statistics prove conclusively that accident rates can be cut by proper maintenance of automobiles.
In the whole of Canada there are approximately 6,366,000 vehicles on the roads today. The alarming thing is that of this number,
5,200,000	are from three to nine years old. With regard to the 5 per cent of accidents caused by physical defects such as roads and so on, the Good Roads Association across Canada, together with the provincial Ministers of Transport, are inquiring into the problem. As I have mentioned already, 385,000 young Canadians will reach driving age this year, of whom only 6 per cent will receive standard driving training. In addition, Mr. Speaker, in Canada there are about 7,-
400,000	licensed drivers.
[DOT] (5:30 p.m.)
It is interesting to note that about one third of the licensed drivers in Canada are women. I am sure they will be glad to learn that men are involved in up to eight or nine times as many accidents as are the women. Of course, the men do much more difficult driving. Statistics do show that drivers who take a certified driver training course have 50 per cent fewer accidents and 81 per cent fewer traffic violations.
A great many people have been discussing what the role of the federal government should be in connection with this particular problem I should like to quote from part of the talk given by Mr. Keith H. MacDonald, general chairman of the Canadian Highway Safety Council, when he was speaking to
The Budget-Mr. Addison the British Columbia Highway Safety Council in April, 1966. This is what he said about the federal government:
The federal government, for example, must supply leadership in the fight for safety. It must demonstrate that it is concerned about improving the traffic conditions. It must do something more than acknowledge the problem.
As our biggest employer, the federal government can set an example for employers across the country by adopting the kind of employee education programs some of our large corporations have found effective. At present it is far behind industry in this respect. Governments should lay down safety standards for the vehicles they operate and provide adequate training and improvement courses for their drivers.
Ottawa can make extremely valuable contributions toward safety education through the facilities of the C.B.C., radio and T.V., and the National Film Board. Constructive support for organized safety campaigns by these public information agencies will get the safety message to a wider audience. This is, after all, the avowed purpose of their existence-public service.
What has the federal government done in the United States? It is startling when you hear it. President Johnson has proposed increasing federal spending for traffic safety by $700 million over the next six years. Under his program federal grants to the state would be increased, the Secretary of Commerce would be empowered to determine automotive safety performance criteria, and the federal government's highway safety research efforts would be expanded. The states would be expected to use their grant money for driver education and licensing, advanced traffic control techniques, vehicle inspection, the improvement of police and emergency medical services, and for other specific purposes.
So far as I have been able to ascertain, Mr. Speaker, the federal government contribution to the Canadian Highway Safety Council was $25,000 last year. We have made a magnami-ous effort and increased it to $40,000 this year. The Minister of Industry (Mr. Drury) has instructed the Canadian Government Specifications Board to inquire into the problem. The problem is of tremendous magnitude.
One thing we must do in Canada is to adopt uniform traffic signals. We cannot be in a position, for example, where the province of Quebec is changing to the international system; where the United States is changing to the continental system, and where a province is changing to another system. The traffic laws of Ontario permit you to turn right on a red light. In most of the province
April 22. 1966

The Budget-Mr. Addison of Alberta, you cannot turn right on a red light, but in the city of Calgary you can. Well, this is an absurd situation. We must have a uniform code for the rules of the road.
Each province has jurisdiction over traffic.
I suspect, however, that as emergencies arise, as in the case of the Atlantic Acceptance bankruptcy, the provinces will return to the federal government some of their jurisdiction and this will enable the federal government to conduct more properly the affairs of the nation. In the near future I predict a return to the federal government of authority in so far as traffic legislation is concerned.
We have three agencies in the federal government interested in this problem. There is the Department of Health and Welfare, which is obviously concerned with the welfare of the people. We have the Department of Justice, which does not administer but which has established the Criminal Code. We have also a Department of Industry which should be responsible for setting standards relating to automobile safety equipment. The code treatment which has been proposed by the Minister of Industry will deal with the human, mechanical and environmental aspects of automobile safety. I hope that at this conference which is proposed all interested parties would have an opportunity for presentations. This would include unions, associations, clubs, manufacturers, provincial authorities, roadbuilding officials, municipal officials-all the people who are concerned with automobile safety across this country.
If we are to have any semblance of order, then these programs must be adopted. There is no reason why all the municipalities and all the provinces together with the federal government cannot agree on a simplified, standard traffic code for this country. Perhaps conditions vary slightly from one province to the other but it does seem to be nonsense for each province to have different standards, particularly when we are inviting people to drive across Canada and encouraging visitors to come to Canada.
In closing, Mr. Speaker, I urge the Minister of Industry at the earliest opportunity, to bring before the house the Canada-U.S. automobile agreement, so that we can examine it. We have not accepted it in the house as yet, but in theory we have accepted a continental automobile industry. I suggest that in the future we will also have a continental approach to traffic. Some members have given notice of their intention to introduce legislation in this field. If we have to


legislate here, we must be very careful that we do not pass laws which will not apply to automobiles coming from the United States, and vice-versa.
I am not here to defend manufacturers, to defend governments or to defend anyone. This is a social problem. We spend millions and millions of dollars on old age pensioners, on grants to put our children through school and so on. This is a problem that can be cured and we know the cure if we will get down to work and adopt it. Last year the provinces gathered together, from taxes on gasoline, diesel fuel and motor vehicle license fees, $831 million. This is a sizeable amount of money, and I strongly believe part of this money should be spent on highway safety investigation. The federal government, because it is the central government, must take the lead. We have been neglecting the problem. We must accept the responsibility. Certainly the fact the provinces have jurisdiction presents a difficulty, but we have had experience in that particular field.
[DOT] (5:40 p.m.)
As I said at the beginning my purpose is not to criticize any particular group. To me, the best interest is to act in accordance with the leadership of the federal government. We know that modern scientific techniques which have been applied to car and truck manufacturing, to the building of roads and bridges and to driver training can bring about a program that will substantially reduce traffic fatalities. Mr. Speaker, we have waited too long to bring this about. I suggest we start now.


Mr. J. M. Forresiall (Halifax):: Mr. Speaker, in the few moments remaining in the Budget debate I wanted to place on the record matters that, had there been an extra 10 or 15 minutes, I should have gone into more thoroughly. However, I am grateful for the one or two remaining moments.
The first thing I wish to do is to thank the minister, and particularly the government, for the stated attitude that has been taken toward the maritime area, because the government will sit down in the near future with the provinces to discuss federal-provincial tax sharing for the period 1967 to 1972.
I hope that this attitude will be followed through to its hoped for completion. In my province of Nova Scotia this could result in an increase in revenue to the province of something in excess of $50 million. I hope, Mr. Speaker, that the minister will not stray
April 22, 1966	COMMONS
from these declared intentions. Indeed I hope and it remains a continuing hope that the government in the striking of a new basis for the sharing will not veer from the national average, but rather will stick to the average of the two highest provinces and use this as a yardstick when it enters into the tax sharing conference in the fall.
Very briefly, may I in one minute deal with what is rapidly developing into one of the most serious labour crises in the country. I refer briefly to two situations, the first concerning defence employees at H.M.C. Dockyard in Halifax, and the second concerning the army depot and naval magazine at H.M.C .S. Shearwater, where there is continued discrimination against certain kinds of employees.
Will you be good enough, Mr. Speaker, at the appropriate time to tell me when I should stop my remarks.
I do not propose to trace the history of the founding formula for the prevailing rates policy. It goes back to 1934 and 1935. I simply suggest that, perhaps, 30 years later it is time that the government found some other basis upon which to look at the matter of payment of hourly paid employees within the Department of National Defence throughout Canada.


Mr. Speaker:: Order, please. I draw to the hon. member's attention that the time has come for him to complete his remarks.
It being 5.45 o'clock it is my duty pursuant to special order made on Thursday last to interrupt these proceedings forthwith and to put the question on the main motion. Is it the pleasure of the house to adopt the motion?


John George Diefenbaker: On division.
Motion (Mr. Sharp) agreed to on division.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.
DEBATES	4213
Business of the House CUSTOMS TARIFF
1. Resolved, that Schedule A to the Customs Tariff be amended by striking out tariff items 945-1, 7905-1, 20925-1, 21045-1, 23505-1, 23705-1, 24100-1. 26325-1, 41105-1, 42205-1, 44043-1, 44047-1, 44125-1, 70500-1, 70505-1 and 84805-1, and the enumerations of goods and the rates of duty set opposite each of those items, and by inserting therein the following items, enumerations of goods and rates of duty:
Progress reported.

[Stage Direction]
Mr. Reynold Rapp (Humboldl-Melforl-
Tisdale): May I ask the house leader what the business of the house will be from Monday next?
George James McIlraith: It is a pleasure to be asked in such a way by such a member. The business for Monday and Tuesday will be as indicated last night.
The first item is No. 47 on the order paper, the resolution to introduce a measure to provide for collective bargaining for the public service; then item 42, second reading of Bill C-165, to provide for the construction of the Canadian National branch line in Northern Ontario; then item 15, second reading of Bill C-149, to provide for the establishment of a Science Council of Canada; then item 4, second reading of Bill C-150, to amend the Research Council Act; then item 8, with the house in committee on Bill C-145, to provide for the commercial fisheries in Canada; then the bill which is in today's Votes and Proceedings, to amend the Combines Investigation Act, and the Criminal Code.


The Deputy Speaker:: Would I be expressing the wish of the house if I called it six o'clock?


Some hon. Members:: Agreed.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, April 25, 1966