1966-06-08

CRIMINAL CODE


Mr. Barry Mather (New Westminster) moved: for leave to introduce Bill No. C-195, to amend the Criminal Code (tire safety).


Some hon. Members:: Explain.


Barry Mather: The purpose of this bill is to protect the public against unreasonable risk of highway accidents occurring as the result of motor vehicle tire failures. It would do this by an amendment to the Criminal Code which would prohibit any persons from manufacturing, selling or otherwise disposing of tires which might endanger the life or property of others. The governor in council will, by this proposal, establish and define safety standards for tires. I might say that this bill is similar to one adopted by the United States Senate.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. Smallwood: 1.	Were any public funds expended to move Mr. Victor Spencer's personal luggage and possessions from one point to another in B.C. and, if so, how much?
2.	Were any public funds expended to pay Mr. Spencer's board or to maintain him in various private hospitals in B.C. and, if so, how much?
3.	Is Mr. Spencer in receipt of unemployment insurance because of his inability to get a job and is he in receipt of any public funds?
4.	Are R.C.M.P. officers assigned to keep watch on Mr. Spencer, and in fact instructed to protect him?
5.	Have any arrangements been made by anyone in the employ of the government of Canada with Mr. Spencer, under which Mr. Spencer has agreed to be silent on the matters and circumstances leading up to his dismissal from the public service of Canada?


Hon. Judy V. LaMarsh (Secretary of Stale):: I am informed by the Royal Canadian Mounted Police, the Departments of Labour and Veterans Affairs as follows:
1.	No. However, on one occasion during the investigation the R.C.M.P. conveyed his luggage a short distance by police car.
2.	No information available.
3.	Mr. Spencer is not in receipt of unemployment insurance benefit.
4.	The R.C.M. Police are taking such steps as are deemed necessary in the interest of national security.
5.	No.


CENTENNIAL RECORDING BY R.C.M.P. BAND
Mr. Bell (Carleton): 1.	Was any plan formulated for the recording of music by the R.C.M.P. band for use in the centennial celebrations?
2.	If so, what is its present status?
3.	If such a plan was formulated and is not being proceeded with, what are the reasons therefor in detail?
4.	Have representations been made in this matter by the Solicitor General or the commissioner of the Royal Canadian Mounted Police and, if so (a) to whom (b) to what effect and (c) with what result?


Hon. L. T. Pennell (Solicitor General):: 1.	Yes, by a Canadian recording company.
2 and 3. It is understood that the Canadian recording company was not granted permission by the American Federation of Musicians to make a recording by the R.C.M.P. band because members of that band are not members of the musicians' union.
4.	No. The Minister of Labour used his offices in this connection with negative results.


UNION REFUSAL OF PERMISSION TO RECORD R.C.M.P. BAND
Mr. Faulkner: Did the American Federation of Musicians recently forbid a Canadian record producer to make a recording by the band of the R.C.M.P. and, if so, on what grounds was the Canadian record producer denied the right to make the recording?


Lawrence T. Pennell: Yes. It is understood that the Canadian record producer was not granted permission by the

June 8. 1966
Questions
American Federation of Musicians to make a recording by the R.C.M.P. band because members of that band are not members of the musicians' union.


SHORTAGE OF GRAIN CARS, MONTREAL
Mr. Allard: 1.	Is there at present a lack of freight cars at the grain elevators at Montreal and. if so, does the government intend to make immediate recommendations in order that steps may be taken to alleviate this shortage?
2.	Has the Board of Transport Commissioners of Canada issued directives to the railways asking them to send almost all their empty freight cars to the elevators in western Canada, in order to ensure the delivery of grain sold to countries abroad?
3.	Has the government received protests and complaints from organizations, agricultural cooperatives or other groups in the province of Quebec who need supplies of feed grain for animals?


Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of Agriculture, Finance, Forestry, Transport and the Prime Minister's office as follows:
1.	No information available.
2.	No.
3.	Yes.


CONSTRUCTION OF NATIONAL MUSEUM
Mr. Reid: 1.	Has the government cancelled or postponed the building of the new National Museum and, if so. for what reason?
2.	Where does the project now stand in the government's order of priority?


Hon. G. J. Mcllraiih (Minister of Public Works):: 1 and 2. The government has postponed the start of the construction on the new National Museum until after the 1966-67 fiscal year in accordance with announced policy.


ROAD CONSTRUCTION NORTH OF NAKINA, ONT.
Mr. Reid: Under the roads to resources program, is a road being constructed going north of Nakina, sometimes called "Nakina northerly" and, if so (a) has the federal government contributed to the cost of this road (b) what was the total cost of this road (c) what was the federal government's share of this cost (d) how much of this road has been constructed so far (e) what is the intended destination (terminus) of this road (f) is this road open to tourists and to local residents for pleasure purposes and, if not, for what reason (g) is the road open for all its constructed length and, if not, for what reason?


Mr. Jack Davis (Parliameniary Secreiary to Minister of Mines and Technical Surveys):: Yes-(a) yes; (b) $1,768,027; (c) $797,516; (d) 50.89 miles; (e) Durer lake; (f) yes; (g) The last 4.84 miles (south side Terrier lake to Durer lake) was constructed with Anaconda Iron Ore Company paying 100 per cent of the cost of construction. This section of the road is closed to the public.


VICTORIA MEMORIAL MUSEUM, OTTAWA
Mr. Reid: 1.	What is the cost of the normal maintenance of the Victoria Memorial Museum building in Ottawa?
2.	Is the condition of this building deteriorating?


George James McIlraith: 1. Approximately $130,000 annually.
2.	The condition of the building has deteriorated slowly over the years. Since 1960 when regular close observation was begun, the change has not been significant.


BINDER AND BALER TWINE
[Stage Direction]
Question 1,448-Mr. Schreyer:
1.	Have any complaints been received alleging quality and standards deterioration in the binder and baler twine manufacturing industry?
2.	Have any complaints been received alleging price fixing or collusion in price setting in the binder and baler twine manufacturing and distribution industry?
Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of Agriculture, Defence Production, Trade and Commerce, the Prime Minister's office and Privy Council office as follows:
1.	No.
2.	No such complaints have been received by the director of investigation and research under the Combines Investigation Act.


ATLANTIC DEVELOPMENT BOARD FUNDS COMMITTED
Mr. Coates: 1.	What is the total amount of the $100,000,000 fund of the Atlantic Development Board that has been committed to date?
2.	What is the breakdown per province?
3.	What is the estimated dollar value of requests before the board at the present time on which decisions have not been rendered?
June 8, 1966


Hon. J. W. Pickersgill (Minister of Transport):: I am informed by the Atlantic Development Board as follows:
1.	$95,155,264 including $5,380,914 balance of $20 million earmarked for aid to industrial development in Nova Scotia.
2.	Nova Scotia $25,603,324 including $5,380,914 balance of $20 million earmarked for aid to industrial development. New Brunswick $27,323,546; Prince Edward Island $7,033,327; Newfoundland $33,180,067; projects of a regional nature $2,015,000.
3.	A number of requests are before the board and are in various stages of investigation but, at this time, it is not possible to estimate the dollar value of these requests.


NAVAL, PROMOTIONS
Mr. McCleave: How many promotions have there been in the Royal Canadian Navy, by year from 1960, including a forecast for 1966, from (a) Lieutenant Commander to Commander (b) Commander to Captain (c) Captain to Commodore (d) Commodore up?


Hon. Leo Cadieux (Associate Minister of National Defence):: R.C.N. Promotions
(a)	(b)	(c)	(d)
Promotion to:
Year	CDR	Capt	Cmdre	RADM VADM	1960	17	8	3	2	11961	24	8	8	2	-1962	18	8	6	4	-1963	26	7	1	-	-1964	30	13	2	1	11965	36	15	5	1	-1966 (1 Jan. to 31 Mar.)	6	1	3.	No. 2 Temporary No. 3	"
Questions
Career planning indicates that a number of officers of the rank of lieutenant commander and above will be promoted to higher rank this year. It is not possible, however, to give a precise forecast of the total number of promotions in each rank in any year due to changes in establishments, vacancies created by releases due to illness, and unexpected commitments.


WARTIME TEMPORARY BUILDINGS, OTTAWA
Mr. Bell (Carleton): 1.	What so-called wartime temporary buildings are still in use by the government in the national capital?
2.	When was each of these buildings erected?
3.	What departments of government are accommodated in each of these buildings?
4.	What specifically are the plans for the cessation of use of each of these buildings and for their demolition?


George James McIlraith: 1. Temporary buildings No. 2, 3, 4, 5, 6, 8, 9, A, B, C, Daly annex and Justice annex.
2. No. 2 Temporary constructed in 1940 No. 3 Temporary constructed in 1941 No. 4 Temporary constructed in 1942 No. 5 Temporary constructed in 1942 No. 6 Temporary constructed in 1942 No. 8 Temporary constructed in 1943 No. 9 Temporary constructed in 1943 A, B and C constructed in 1938 Daly Annex constructed in 1942 Justice Annex constructed in 1943.
Department of Defence Production Department of Industry Canadian Arsenals Limited.
Department of Transport Department of Finance
Department of National Health and Welfare.
Department of Defence Production Department of Industry Department of Transport.
Unemployment Insurance Commission National Revenue Taxation.
National Revenue.



June 8, 1966
Questions
No. 8 Temporary	-
No. 9	"	-
A, B and C Temporary	-
Justice Annex Daly Annex
4.	No. 2 Temporary	-No. 3	"	-No. 4	"	-No. 5	"	-No. 6	"	-No. 8	"	-No. 9	"	-A, B and C	-Justice Annex	-Daly Annex	-
Note: Times indicated for demolition of these buildings are estimates of the present time table and are subject to variations.


U.S. INVESTIGATION INTO ORGANIZED CRIME
Mr. Caouelie: 1.	Did the government of Canada, the R.C.M.P., or other federal bodies have either an observer or an exchange of correspondence with the United States justice department, in relation to and at the time of the latest Inquiry into organized crime in the United States?
2.	Has the government of Canada asked for a transcript of testimony by a key witness named Joseph Valachie?
[Mr. Mcllraith.l
Dominion Bureau of Statistics National Health and Welfare Department of National Defence Department of Veterans Affairs.
National Revenue.
Department of National Defence Defence Research Board.
Department of Agriculture.
Defence Research Board.
Planned for demolition in 1973-74 to coincide with proposed move of Defence Production and Department of Industry to new building.
Planned for demolition in 1971-72 when new building for Department of Transport completed.
Same as No. 2 Temporary.
No demolition date has been established.
Planned for demolition in 1971-72 when National Revenue-Taxation move to new building.
No demolition date has been established. Same as No. 6 Temporary.
For demolition when new construction completed for Department of National Defence sometime in 1972-73.
For demolition in 1967 when new building for Agriculture completed.
Same as for No. 6 temporary.
3.	Has the government of Canada had an exchange of correspondence with the United States justice department in relation to the visit of the Quebec minister of justice, Mr. Claude Wagner, to Mr. Katzenbach?
4.	Has the government of Canada consulted the United States F.B.I. following the aforesaid inquiry?


Julia Verlyn (Judy) LaMarsh: I am informed by the Royal Canadian Mounted Police as follows:
1. It is assumed that by the words, "latest inquiry", the hon. member is referring to the hearings before the permanent subcommittee on investigation of the committee on government operations, United States Senate, concerning organized crime and illicit traffic in
June 8. 1966

narcotics which commenced in September, 1963 and terminated in 1965.
No representative of the R.C.M. Police attended these hearings as an observer, nor was there any direct exchange of correspondence between the R.C.M. Police and the United States department of justice concerning these hearings.
There is constant and almost daily exchange of correspondence between the R.C.M. Police and the federal bureau of investigation, as well as with other United States federal enforcement agencies and local enforcement agencies, concerning all aspects of organized crime of mutual interest. This correspondence, on numerous occasions, touches upon the evidence, testimony and activities of many of the same people as were mentioned in the hearings.
2.	No. The testimony of the witness, Joseph Valachie, was included in the published reports of the subcommittee which are on file with the Department of Justice and the R.C.M. Police and which are available to the general public by purchase from the United States government printing office in Washington.
3.	No.
4.	Answered by No. 1.


TRANSPORTATION ASSISTANCE TO QUEBEC FARMERS
Mr. Caouelte: 1.	Is the government helping Quebec farmers in the matter of the transportation of certain products and, if so (a) how (b) what products are covered by this aid (c) what percentage of the transportation is defrayed by the government?
2.	Are transportation subsidies the same everywhere in Quebec?
3.	Does the government intend giving higher subsidies to farmers who live far from the main centres?


Julia Verlyn (Judy) LaMarsh: In so far as the Department of Agriculture is concerned:
1. Yes. (a) by reimbursing the province of Quebec for a proportion of expenditures under joint programs administered by the Quebec department of agriculture and colonization.
(b)	lime, breeding ewes and ewe lambs from western Canada, and livestock entries to the Royal Agricultural Winter Fair, Toronto.
(c)	in the case of lime, 60 per cent of Quebec expenditures, including transportation costs, to a maximum of $1,205,000 per annum; in the case of breeding ewes and ewe lambs,
Questions
half of the Quebec expenditure up to 50 per cent of the transportation charges; and in the case of livestock entries for the Royal Agricultural Winter Fair, Toronto, 75 per cent of the amount paid by Quebec for transportation charges.
2.	No.
3.	Transportation assistance under these programs now increases as distance from source to destination increases.
In so far as the Department of Forestry is concerned:
1.	Yes. (a) Transportation assistance on western feed grains and grain products of prairie origin from Fort William to various consumption zones in Quebec. This assistance is paid through wholesalers or semi-wholesalers who in turn credit their clients with the amount of aid applying in each case.
(b)	Wheat, oats, barley, rye, No. 1 feed screenings, sample feed grain; wheat bran, wheat shorts and wheat middlings produced in western Canada and shipped to a destination in eastern Canada or produced in eastern Canada from wheat grown in western Canada.
(c)	Approximately 95 per cent of the strict cost of transportation from Fort William to the centre of each zone in Quebec. There are 14 such assistance zones in the province of Quebec.
2.	No. See (c) above.
3.	This is already applied. See (c) above.


CANADIAN RESIDENTS NOT CANADIAN CITIZENS
Mr. Slanbury: How many (a) British subjects (b) citizens of the Republic of Ireland (c) citizens of the Republic of South Africa (d) others, have resided in Canada for at least five years but have not acquired Canadian citizenship?


Hon. Robert Winters (Minister of Trade and Commerce):: The information requested is not available but the following information extracted from the 1961 census of Canada may be of some assistance.
As of June 1, 1961 the number of immigrants to Canada who still hold citizenship in the countries from which they came but have been resident in Canada for more than five years was as follows: Commonwealth countries-146,459;	United	States-51,357,
European countries which include the Repub-lice of Ireland-233,567; Asiatic countries- 8,003; and other countries which include the Republic of South Africa-14,055.

June 8, 1966
Questions
COMMEMORATIVE STAMP FOR NEWFOUND- 'REQUEST FROM QUEBEC MINISTER FOR LAND "COME HOME YEAR"	CRIME INQUIRY


Mr. Tucker: Has the Post Office Department given consideration to the printing of a stamp to commemorate Newfoundland's "come home year"?


Hon. Jean-Pierre Cote (Postmaster General):: The Post Office Department has not included in its 1966 philatelic program a postage stamp specifically designed to commemorate Newfoundland's "Come Home Year". It is not the policy of the department to issue commemorative stamps, the theme of which could be construed as promotional in nature and designed to further regional activities.


BRIDGE CONSTRUCTION, EAST FLORENCEVILLE, N.B.
Mr. Flemming: With reference to question No. 1,419, dated May 4, by Mr. Flemming (Victoria-Carleton) and answered by the Minister of Public Works, is it the intention of the Department of Public Works to build a highway bridge across the Saint John river at East Florenceville on the Trans-Canada highway this year?


George James McIlraith: I am advised that tenders were called by the province of New Brunswick on May 24 and will close June 15. I presume construction will follow.


STRENGTH OF CANADA'S INFANTRY BATTALIONS
Mr. MacRae: What is the effective strength as of April 30, 1966 of Canada's nine infantry battalions?


Hon. Paul Hellyer (Minister of National Defence):: 1. Canada has 12 infantry battalions and one anti-tank infantry battalion. On 30 April, 1966, eight infantry battalions and the anti-tank battalion (less one detached company with the Canadian brigade group in Germany) were serving in Canada; three infantry battalions were serving overseas with the Canadian brigade group; and one infantry battalion was serving in Cyprus.
The total strength of the 13 battalions on 30 April, 1966, was 8,718. The eight infantry battalions in Canada had a total strength on that date of 4,925.


Mr. Diefenbaker: Did the Minister of Justice receive a letter or letters from the Quebec Minister of Justice demanding a royal commission on crime at any time since the first day of July, 1965 and, if so, on what date or dates?


Hon. Lucien Cardin (Minisier of Juslice):: The answer to the question is no. The Minister of Justice of the province of Quebec did not write to the Minister of Justice of Canada demanding a royal commission on crime. However, on March 11, 1966 the Solicitor General wrote to all the provincial attorneys general and the Minister of Justice of the province of Quebec inviting them to give their views as to the desirability of reassembling the federal-provincial conference in order to discuss the problem of organized crime and the suggestion of a royal commission on crime attributed to the Minister of Justice of the province of Quebec in newspaper reports. The Minister of Justice of the province of Quebec, under date of March 15, replied to the Solicitor General. The reply of the Minister of Justice of the province of Quebec to the Solicitor General is marked "Personal".


CONDITION OF NATIONAL MUSEUM
Mr. Orlikow: 1.	Has the government been advised that the physical condition of the National Museum is such that it represents a safety hazard?
2.	Have any precautions been taken to provide for the safety of children being taken on conducted tours of the National Museum and, if so, what are they?


George James McIlraith: 1. No.
2. See reply to question No. 1,616.


CENSUS OFFICIALS, ASSINIBOIA CONSTITUENCY
Mr. Watson (Assiniboia): 
Mr. Jean-Charles Canlin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. The census commissioners appointed for the constituency of Assiniboia are: Mrs. Margaret Ayotte, P.O. Box 76, Minton, Sask.; Mr. Murray W. McCormick, P.O. Box 999, Weyburn, Sask.; Mrs. Lucy McHarg, P.O. Box 39, Radville, Sask.; Mr. Joseph N. Jelinski, Claybank, Sask.; Mrs. Helen Foley, Coronach, Sask.; Mrs. Nan Klein, P.O. Box 131, Assiniboia, Sask.; Mr. Harold F. Brodin, Mossbank, Sask.
2.	There were no assistant commissioners or area supervisors appointed for the 1966 census of Canada.
3.	Census commissioners are paid the sum of $1,100 when the field work is completed to the satisfaction of the dominion statistician. In addition, travel expenses are allowable in accordance with government travel regulations in rural areas, and an allowance of $20 and $40 in lieu of travel expenses in the urban and semi-urban areas.
4.	The appointments were made by the Minister of Trade and Commerce following recommendations and interviews by the regional office representatives of the Dominion Bureau of Statistics.


TRADE WITH SOUTH AFRICA
Mr. Allmand: 1.	What was the value of Canada's export trade with South Africa for 1964 and 1965?
2.	What were the principal products of this trade?
3.	What was the value of Canada's import trade with South Africa for 1964 and 1965?
4.	What were the principal products of this trade?


Robert Henry Winters: 1. and 3. The value of Canada's export trade to the Republic of South Africa and the value of Canada's import trade from the Republic of South Africa for 1964 and 1965 is as follows:-
	1964	1965
	$'000	$'000
Domestic exports	69,166	76,226Foreign exports	875	2,027Total exports	70,041	78,253Imports	28,777	27,113
2. The principal commodity Divisions or Groups included in Canadian exports to the
Questions
Republic of South Africa for	1964 and	[ 1965were as follows: - Description	$'000	$'0001964	1965Cereals unmilled	9,029	Crude non-metallic minerals	2,173Lumber	4,553	7,359Wood pulp and similar pulp	1,242Paper for printing	8,216	7,977Fine paper	1,370Animal oils and fats	1,184Synthetic and reclaimed rubber and plastic materials, not shaped	2,434	1,443Plate, sheet and strip, steel	1,112	Aluminum, including alloys	8,825	11,351Road motor vehicles	19,710	26,2604. The principal commodity Divisions or	Groups included in Canadian	imports	fromthe Republic of South Africa	for 1964 and	1965 were as follows: -	1964	1965Description	$'000	$'000Fruits and berries, fresh or chilled	3,689	3,691Fruits and products, canned (except infant foods)	1,488	1,921Sugar, molasses and syrups	12,130	8,017Fermented alcoholic beverages	506	551Distilled alcoholic beverages	578	624Oil seeds, oil nuts and oil kernels	677	495Wool and fine animal hair	762	553Metals in ores, concentrates, and scrap	663Crude non-metallic minerals	1,293	1,114Wood pulp and similar pulp	1,308	1,648Ferro-alloys	2,850	4,778[English] OFF BASE LIVING, ARMED FORCES IN EUROPE


Mr. Allmand: 1.	Do members of the armed forces stationed in Europe receive a special allowance when they live off base?
2.	Are they free to live off base if they so desire?
3.	Do single persons have the same right in this respect as married persons?


Léo Alphonse Joseph Cadieux: 1. Members of the Canadian armed forces stationed in Europe as part 4 Canadian Infantry Brigade Group and 1 Air Division are entitled to payment of an overseas allowance which varies by location,

June 8, 1966
Questions
rank and whether the member is: (a) married and accompanied by dependants living in public married quarters; (b) married and accompanied by dependants living out of public married quarters; (c) married but unaccompanied by dependants and living in public single quarters; (d) married but unaccompanied by dependants and living out of public quarters; (e) single and living in public quarters; (f) single and living out of public quarters.
2.	Only if suitable public quarters are not available.
3.	Yes.


CENSUS OFFICIALS, WETASKIWIN CONSTITUENCY
Mr. Moore: 1.	What is the name and address of each census commissioner for the 1966 census in the electoral district of Wetaskiwin?
2.	What is the name and address of each assistant commissioner for the 1966 census in the electoral district of Wetaskiwin?
3.	What is the name and address of each enumerator for the 1966 census in the electoral district of Wetaskiwin?


Jean-Charles Cantin: 1. The census commissioners appointed for the constituency of Wetaskiwin are: Mrs. Marguerite E. Martin 5349-49th Ave., P. O. Box 852, Lacombe, Alta.; Mr. R. D. Broughton, 5408-59th St., P. O. Box 1150, Ponoka, Alta.; Mr. Wilton Lindberg, Lindy's Trailer Court, Rimbey, Alta.; Mrs. Myrtle Aboussofy, 4305-55th St., Wetaskiwin, Alta.; Mr. Lawrence P. Wilson, P. O. Box 351, Wetaskiwin, Alta.; Mr. Robert G. Mullen, P. O. Box 210, Calmar, Alta.; Mr. Cedric P. Dolling, Telfordville, Alta.
2.	There were no assistant commissioners appointed for the 1966 census of Canada.
3.	Names of census enumerators are not yet available as they are appointed by the census commissioner in their area on behalf of the Minister of Trade and Commerce.


CENSUS OFFICIALS, VEGREVILLE CONSTITUENCY
Mr. Fane: 1.	What Is the name and address of each commissioner for the 1966 census in the electoral district of Vegreville, Alberta?
2.	What is the name and address of each assistant commissioner for the 1966 census in the electoral district of Vegreville, Alberta?

3.	What is the name and address of each enumerator for the 1966 census in the electoral district of Vegreville, Alberta?


Robert Henry Winters: 1. The census commissioners appointed for the constituency of Vegreville are:	Mrs. Kathleen McKenzie, 5119-55th
Ave., Vegreville, Alberta; Mr. Mike Kondro, Myrnam, Alberta; Mr. Nick A. Shandro, P.O. Box 239, Willingdon, Alberta; Mr. Lloyd Sereda, Mundare, Alberta; Mr. R. Christie, Bruderhein, Alberta; Mr. Steve W. Roman-chuk, Smoky Lake, Alberta; Mr. Mike Kapach, Redwater, Alberta.
2.	There were no assistant commissioners appointed for the 1966 census of Canada.
3.	Names of census enumerators are not yet available as they are appointed by the census commissioner in their area on behalf of the Minister of Trade and Commerce.


BORDER CROSSINGS BY JOE BONANNO
Mr. Nielsen: 1.	Has the Department of Citizenship and Immigration any knowledge to indicate that Joe Bonanno of New York and other places, generally regarded as number four in the international Mafia, has been back and forth across the border visiting Canada during the past eighteen months?
2.	If so, has the department any record showing his comings and goings over the international boundary, and the dates thereof?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Citizenship and Immigration):: 1.	The Department of Citizenship and Immigration has no knowledge to this effect.
2.	Not applicable.


CENSUS OFFICIALS, HASTINGS-FRONTENAC CONSTITUENCY
Mr. Webb: 1.	What is the name and address of each commissioner for the 1966 census in the electoral district of Hastings-Frontenac?
2.	What is the name and address of each assistant commissioner for the 1966 census in the electoral district of Hastings-Frontenac?
3.	What is the name and address of each enumerator for the 1966 census in the electoral district of Hastings-Frontenac?


Jean-Charles Cantin: 1. The census commissioners appointed for the constituency of Hastings-Frontenac are: Mr. Frank M. Pepper, R.R. #2, Verona, Ontario; Mr. Thomas M. Neal, Harlowe, Ontario; Mr. J. Elmer Wood, Crookston, Ontario; Mrs.
June 8, 1966

Mary E. Edmunds,, Norwood, Ontario; Mrs. H. Elizabeth Hattin, P. O. Box 2, Bancroft, Ontario; Mr. Patrick G. Fitzgerald, Greenview, Ontario.
2.	There were no assistant commissioners appointed for the 1966 census of Canada.
3.	Names of census enumerators are not yet available as they are appointed by the census commissioner in their area on behalf of the Minister of Trade and Commerce.


DETERIORATION OF MUSEUM BUILDING
Mr. Orlikow: 1.	Has any settlement been detected in the National Museum building and, if so (a) when was this first detected (b) what is the cause (c) has there been any increase in the settlement during the last year?
2.	What, if any, precautions have been taken to protect those who work in the museum and the visitors against injury caused by an abrupt or serious collapse of the building?
3.	Is the building, with any precautions now in effect, regarded as safe?


George James McIlraith: 1. Yes, (a) Even between 1906 and 1910, when this building was under construction, settlement was observed. By 1915 settlement was such that a portion of a high tower over the entrance was removed.
This is a massive structure. The exterior walls are heavily buttressed masonry bearing walls. The floors above the first floor level are carried on steel plate girders, simply supported and spanning from wall to wall. There is a complete basement and a partial sub-basement. The basement floor and the first floor are supported on a system of steelwork, simply supported and spanning from the exterior walls to interior cast iron columns, which in turn rest on the foundation walls of the subbasement. The footings supporting the exterior walls and the interior columns for the first floor are generally at two levels, approximately 12 feet and 22 feet below grade, (b) The site on which this building stands is not rigid. There is a stratum of man-made fill, about 8 to 10 feet in thickness, which is separated from bedrock by approximately 100 feet of soft sub-soil. This soil is subject to shrinking and swelling as the amount of water present in it varies. Moreover, the type of floor framing that was in practice at the time of the construction of the building is especially sensitive to differential settlements such as are observed in this building, (c) Where there has been slight total settlement in the past
Order for Return
year there has been no differential settlement which is the destructive force.
2.	Because of the problems caused by differential settlement during construction, the building has been under observation from time to time throughout its entire existence. These observations were intensified in 1958 when the Department of Public Works undertook a comprehensive engineering study of the structure. It was established that the basic structure was such that it was impractical to undertake changes to eliminate all the superficial damage caused by the differential settlement. It was decided the building should be checked regularly and this has been done. This inspection has been increased in the last year with the installation of special instrumentation for continuous observation of elevations and ground water levels. These are reviewed monthly and special examinations will be made should any construction activity take place on adjacent sites which could effect water levels.
The number of persons permitted in some areas has been limited. The number of persons in the auditorium, for example, has been limited to the number of permanent seats, i.e. 600. In addition, limits have been placed on the stack loads permitted in the library area. It is important to note that 95 per cent of the load on the footings is due to the weight of the structure and not to the weight of persons or materials occupying the building.
3.	Yes, the constant observation of the site conditions and of the structure, together with the care taken to limit use of certain areas, make the building safe.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Hees: 1.	In each of the years 1964 and 1965, how many Canadian companies were advised by the Departof Trade and Commerce of opportunities to sell their products in specific export markets?
2.	How many trade missions were sent overseas by the Department of Trade and Commerce in each of the years 1961, 1962, 1963, 1964 and 1965?
* * nat w ao

 v omo Ul L.UIlllilUUILy exports to and imports from the United States in the years 1961, 1962, 1963, 1964 and 1965?
4.	Have any new trade commissioner offices been opened in the United States since May 1, 1963 and if so, in what cities?
5.	Has the Department of Trade and Commerce brought any groups of buyers of consumer goods from the United States to Canada to inspect Canadian products since May 1, 1963 and, if so (a) from


MOTIONS FOR PAPERS
Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Notice of motion for papers No. 134 is acceptable to the government.
Would Your Honour call notice of motion No. 135?


HIGHWAY CONSTRUCTION, GOOSE BAY TO GULF OF ST. LAWRENCE
[Stage Direction]
Motion No. 134-Mr. Brand:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house copies of all letters and other communications that have been received by the Prime Minister or other members of the government of Canada since the first day of June, 1965, from the premier or other members of the government of Newfoundland, and/or John Doyle and Canadian Javelin Limited regarding the sharing of costs in the building of a highway between Goose Bay, Lake Melville and the gulf of St. Lawrence.
Motion agreed to.

[Stage Direction]
Motion No. 135-Mr. Skoreyko:
That an order of the house do issue for a copy of all correspondence and other communications in the Department of Citizenship and Immigration regarding the application by Mrs. Munsinger to enter Canada as an immigrant in 1951 and any subsequent correspondence up to and including December 31, 1955.
Hon. Jean Marchand (Minister of Citizenship and Immigration):: Mr. Speaker, Mrs. Munsinger's file is held by the Spence commission. As soon as it is sent back to the department I am ready to table the correspondence with persons outside the department and the government.


Mr. Speaker:: Subject to the reservation or condition expressed by the Minister of Citizenship and Immigration, is it the pleasure of the house that notice of motion No. 135 be deemed to have been adopted?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
[Mr. Hees.)
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, on a point of order I should like to ask the Minister of Justice when my question No. 1,170 currently on the order paper will be answered.


Louis-Joseph-Lucien Cardin: Mr. Speaker, I will look into the matter and see that an answer is brought in as soon as possible.


LABOUR RELATIONS
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, today, if I might refer to it, is a most unusual centenary of parliament, being the one hundredth anniversary of the first convening of parliament in Ottawa. It is the anniversary of an occasion that has meant much to freedom within our country.
Having prefaced my question by that statement, I now ask the Minister of Labour whether, on this anniversary day-and on this day 100 years ago some most important things were done-the minister would say what expectations there are that the strike in Montreal, which has begun to assume proportions which raise the concept of eternity, is about to be settled.


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I can only say that I have had a report from the mediator within the last 20 minutes. He met this morning with one of the groups. There was an extended session. A caucus followed, and that caucus may still be proceeding. Further meetings are being arranged for this afternoon and this evening. I am following the situation very carefully. My deputy minister is standing by, as I am, watching the proceedings closely. I cannot say anything more at this time, and I do not think it would be wise for me to do so.


John George Diefenbaker: Arising out of that question and in view of the prospect of further strikes, would the Prime Minister say what he has in mind by way of action on the part of parliament to meet this strike situation; and what plans there are to meet the projected strike of transport and general workers on the seaway which, if carried out, would completely freeze shipping on the great lakes?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, on the particular matter of the
June 8, 1966	COMMONS DEBATES	6137
Inquiries of the Ministry
threatened strike on the seaway, the Minister of Labour and I had a discussion this morning. He is in touch with the situation, and we hope a mediator will be appointed without delay. We have ourselves been considering a name, and we hope to secure the services of this particular gentleman very shortly.


Hon. Michael Starr (Ontario):: Mr. Speaker, I have a supplementary question for the Prime Minister. Will the Prime Minister as head of the government now consider calling both parties to the longshoremen's dispute to Ottawa to have it mediated by someone of the calibre of the minister of manpower and immigration? I am speaking seriously, Mr. Speaker, because I think this will be the solution to the bringing about of a settlement to this very grave dispute.


Lester Bowles Pearson: Mr. Speaker, I am sure that my hon. friend, with his experience in the Department of Labour, would not wish the government to interfere with meetings which are going on this afternoon and this evening, and which we hope will be successful.


Michael Starr: Then I put a further supplementary question to the Prime Minister. I am not trying to put a hypothetical question, but let me ask him this. Will the Prime Minister take action along the lines I suggested if these meetings today are not successful?


Mr. Speaker:: Order, please. We will leave it at that. I take it that the hon. member did not intend the question to be hypothetical, but I am afraid it is.


Mr. T. C. Douglas (Burnaby-Coquiilam):: have a supplementary question for the Minister of Labour regarding the longshoremen's strike in the St. Lawrence river ports. May I ask the minister whether he has considered asking the two parties their views regarding possible legislation which would appoint an administrator on a temporary basis, under which the men would return to work on the basis of the wage increments which I believe appear to be acceptable to both parties concerned, leaving the other matters in dispute to negotiation following the report of an industrial inquiry commission under the Industrial Relations and Disputes Investigation Act.


John Robert (Jack) Nicholson: Mr. Speaker, consideration has been given to a number of proposals and they have been discussed with both sides. I cannot say that all the conditions my hon. friend has suggested have been brought into
the discussions, but certainly some of them have been pursued and are being actively pursued today.


Mr. R. N. Thompson (Red Deer):: I have a supplementary question for the Prime Minister, Mr. Speaker. In view of the prospective series of strikes which threaten the entire transportation system, I wonder whether the government has given consideration to the reconstitution of the emergency measures act, which I think was dropped in 1955.


Lester Bowles Pearson: Mr. Speaker, my hon. friend will no doubt recall the debate we had in this house some years ago which led to the abolition of the existing emergency measures act at that time.


Mr. Eldon M. Woolliams (Bow River):: wish to direct a supplementary question to the Prime Minister. Did the Prime Minister state yesterday or today, to the press or to anyone else, that there will be a special cabinet meeting and that the government is anxious to bring in legislation to end the strike in question in view of Mr. McNamara's recent statement for the wheat board that we have already lost 30 million bushels of wheat?


Lester Bowles Pearson: No, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, can the Prime Minister say whether the Ottawa Citizen, which usually has such a close relationship with the government-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -is well founded in its statement that unless a settlement is effected today the government will bring in or impose compulsory arbitration by a bill which will be presented on Thursday?


Mr. Speaker:: Order, please. It is not in order to ask whether a press statement is correct or incorrect.


John George Diefenbaker: Mr. Speaker, then I will not refer to the Ottawa Citizen. I did so in order to give my question the respectability that the Ottawa Citizen always enjoys.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Does the government intend, if unsuccessful today in these general discussions, to bring in a bill tomorrow or later this week to do that which the St. Laurent government did during its period of office?
June 8. 1966

Inquiries of the Ministry Mr. Speaker: Order, please. The question is Hon. Jean Marchand (Minister of Ciiicouched in hypothetical terms, and is not in zenship and Immigration): I did not stop in order.	Quebec city yesterday, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, I do not want to make it hypothetical, because 30 million bushels of wheat sales have been lost through the failure of this government to act. Is the government going to act?


Mr. Speaker:: Order, please.
[Later:~\


Mr. E. F. Whelan (Essex South):: A supplementary question for the Prime Minister. Has he consulted the Prime Minister of Great Britain, who heads the Labour party, with a view to obtaining advice on settling the dock strike in Canada?


Michael Starr: He should consult somebody.


Mr. Speaker:: Order.


Mr. Donald Maclnnis (Cape Breton South):: My question is addressed to the Minister of Public Works in his capacity as leader of the house. Is it the intention of the government to rearrange the business of the house and introduce tomorrow a bill dealing with compulsory arbitration?


George James McIlraith: No, Mr. Speaker.


Mr. W. H. Jorgenson (Provencher):: Mr. Speaker, I would like to ask the Minister of Finance if he could advise me who will be picking up the tab for the demurrage charges that will be incurred at the ports which are strike bound.


Mr. Speaker:: Order, please. I suggest to the hon. member that is not a question that is extremely urgent. The matter of who will be incurring charges is something which might be considered by the minister, but certainly this is not the type of question which should be asked now.


Hon. Marlial Asselin (Charlevoix):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration.
While he was in Quebec city yesterday, did the minister meet with representatives of the Longshoremen's Union and did they ask and beg him to talk to his colleagues about ending the present strike in Quebec harbour?


Martial Asselin: Mr. Speaker, may I put a supplementary question to the minister? Was he not in Quebec city the day before yesterday?


DOMINION-PROVINCIAL CONFERENCE QUEBEC INQUIRY AS TO AUTHORIZED REPRESENTATIVE
[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I wish to put a question to the right hon. Prime Minister.
Can he tell us if he has received any written communications from Hon. Jean Lesage, since June 5 last, and if these indicated that he wished to go on being recognized as premier of Quebec at the coming federal-provincial conferences?


Lester Bowles Pearson: Mr. Speaker-


Mr. Speaker:: Order.


Gilles Grégoire: Mr. Speaker, I rise on a point of order.
It seems to me the right hon. Prime Minister was prepared to answer. It took a few seconds longer because of the interpretation but, in my opinion, we should not be at a disadvantage because of that.


Lester Bowles Pearson: To my knowledge I have received no communication from the prime minister of Quebec in the last few days.


Gilles Grégoire: Mr. Speaker, I have a supplementary question to the one I put a while ago.
The right hon. Prime Minister did not exactly answer my question when he said that he had received no communication from the premier of Quebec. Was he referring to the new premier or to the former? For my part, I was referring to the Hon. Jean Lesage.


Lester Bowles Pearson: Mr. Speaker, I was not referring to the premier supported by my hon. friend.
June 8, 1966


Gilles Grégoire: On a question of privilege, Mr. Speaker. In my opinion, the right hon. Prime Minister must withdraw his words, for that is a gratuitous, unfounded statement, and he should know better, unless he is not aware-


DOMINION-PROVINCIAL RELATIONS QUEBEC-PETITION RESPECTING CHANGE IN PROVINCIAL CONSTITUTION
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. What is now the status of the communication which was sent to Westminster concerning the powers of the upper house in Quebec?


Lester Bowles Pearson: I do not know whether that is a hypothetical question or not, but I will answer it by saying that in my view its status is a little uncertain.


Some hon. Members:: Oh, oh.


OLD AGE SECURITY
[Stage Direction]
On the orders of the day:
Mr. J. E. Brown (Brantford):: I wish to direct a question to the Minister of National Health and Welfare. Is the government still giving consideration to increasing the old age pension?


Mr. Speaker:: Order, please. This question is of a general nature and concerns general policy.


PUBLIC SERVICE
[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put a question to the Prime Minister.
Is he in a position to advise the house whether the government intends very shortly to grant a bonus for bilingualism to certain federal civil service employees? If so, when may we be informed of the amount of the bonus and of the terms under which it will be granted?
Inquiries of the Ministry


Mr. Speaker:: Order. I suggest that the hon. member should place his question on the order paper.


Maurice Allard: Mr. Speaker, I should like this question to be discussed at ten o'clock.


INDIAN AFFAIRS
[Stage Direction]
On the orders of the day:
Eldon Mattison Woolliams: My
question is directed to the Minister of Northern Affairs and National Resources who is now, I believe, responsible for Indian affairs. Did the minister receive a petition from the Alberta Indian Teachers Association setting out certain grievances with regard to Indian Schools, mentioning particularly the lack of proper medical attention and sanitation facilities? Is he aware that eight teachers have resigned because of the situation, and has he any comment to make?


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


Eldon Mattison Woolliams: With the greatest respect, this is an urgent matter because these students are in the middle of their term work. Could I put the question in another way


Mr. Speaker:: As the hon. member knows, if he thinks the matter is extremely urgent and should be considered at an early date he has a recourse, and can bring the matter up for discussion on the adjournment motion at ten o'clock.


Eldon Mattison Woolliams: Well, I should like to give notice accordingly.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: I wish to address a question to the Prime Minister. In view of reports which are circulating concerning the publication of the final report of Mr. Justice Spence on the Munsinger affair, could the Prime Minister tell us whether the Chief Justice has informed him when the report will be submitted?


Lester Bowles Pearson: No, Mr. Speaker.

June 8. 1966
Inquiries of the Ministry HOUSE OF COMMONS



INQUIRY AS TO DESIGNATION OF JULY 1 HOLIDAY

[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Meganiic):: I should like to direct my question to the Prime Minister. In a few days we shall be enjoying the traditional holiday on July 1. Has the Prime Minister decided what we are going to call this holiday in future bearing in mind that in 1967 we are celebrating our 100th anniversary?


Mr. Speaker:: Order. The hon. member may wish to place this question on the order paper. He will probably receive an answer before July 1.
question is based was both inaccurate and misleading. Whether intentional or unintentional, stories such as this can do nothing but create confusion and consternation both inside and outside the armed forces.


John George Diefenbaker: The government needs no help.


Paul Theodore Hellyer: With respect to the inaccuracies, first, the armed forces are not enlisting youths with normally unacceptable educational standards; quite the contrary. The army, for example, has raised its standards.
Second, the army has a program of putting youths into extended and technical training courses. The minimum educational standard for these young men is at least equivalent to the minimum educational level re-



EXPO '67 COUNTRIES REPORTED NOT PARTICIPATING BECAUSE OF STRIKE

[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (Saini-Hyacinihe-Bagot):: Mr. Speaker, my question is addressed to the Prime Minister.
Would the Prime Minister deny or confirm reports that five or six countries have decided not to take part in Expo '67 because of the delay due to the longshoremen's strike?


Lester Bowles Pearson: No, Mr. Speaker, I know nothing which would confirm that rumour. I do know there will be more foreign governments participating in Expo next year than ever participated in any international fair at any time.
quired by the older private-


Mr. Speaker:: Order, please. I am sure the information the minister is conveying to the house is both interesting and timely, but it seems to me it is going beyond the scope of the question asked by the hon. member for Winnipeg South Centre.


Paul Theodore Hellyer: Mr. Speaker, may I finish very quickly?


Mr. Speaker:: Order, please.


Mr. Churchill:: Mr. Speaker, I have a supplementary question, my original question was not based on press reports, but the minister is referring to them. Does he not think he should place greater emphasis on the fighting efficiency of our armed services rather than on the building of a monument in stone to himself?


Paul Theodore Hellyer: Mr. Speaker, fighting efficiency is precisely the emphasis that I want.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, I wish to direct a question to the Minister of National Defence. Due to increasing public uneasiness because of repeated and alarming reports of a serious decline in the strength of the armed services, what steps are being taken by the minister to ensure that the fighting efficiency of our services is maintained?


Paul Theodore Hellyer: Mr. Speaker, the Canadian Press story upon which I presume my hon. friend's


Mr. Speaker:: Order, please. The question is argumentative.


Paul Theodore Hellyer: Mr. Speaker, may I ask the hon. member for Winnipeg South Centre a question?


Some hon. Members:: Oh, oh.


Mr. Speaker:: The hon. member for Winnipeg North Centre.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, is the Prime Minister
June 8, 1966

yet in a position to answer my question of Monday concerning the proposal to erect a building just west of parliament hill that would be higher than the peace tower?


Lester Bowles Pearson: Yes, Mr. Speaker. I am examining the comparative measurements of the two buildings.


Stanley Howard Knowles: Ten o'clock.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I have a question for the right hon. Prime Minister. At five o'clock this afternoon in private members' hour a motion is coming up in my name asking that the government consider establishing a compensation fund for the victims of murderers. I would like to ask the Prime Minister, if by any chance this motion should be talked out in the one hour available to private members, will the government make time available to give the subject complete and full consideration in the way that retentionists granted unanimous consent for the hanging debate?


Mr. Speaker:: Order, please. The question is hypothetical.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, since the house is in good spirits today, I should like to ask the right hon. Prime Minister whether he proposes to take part in the softball game between the members of parliament and the members of the protective staff, to be held tonight?



BANK ACT


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, may I direct a question to the Minister of Finance and ask him whether he has yet been able to manoeuvre the Bank Act bill through its various internal obstacles and when he will present it to the house.


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I can assure the hon. gentleman
23033-389J
Income Tax Act
that the government will carry out its intentions by presenting the Bank Act to the house for consideration very shortly.



REQUEST FOR REPORT OF COMMITTEE ON ELECTION EXPENSES

[Stage Direction]
On the orders of the day:
Barry Mather: Mr. Speaker, may I ask the Prime Minister whether he is in a position to state when he expects to receive the report of the committee on election expenses.


Lester Bowles Pearson: Mr. Speaker, I understand it is almost ready for printing, and is being translated. As you know, Mr. Speaker, I have already expressed the hope that it would be before the house in June. I still hope that may be possible by the end of this month.


Frank Howard: As a supplementary question may I ask the right hon. gentleman if he would approach the royal commission on pilotage and ask what progress it is making with respect to its report?


Lester Bowles Pearson: I shall be glad to do that, Mr. Speaker.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.

[Stage Direction]
That it is expedient to introduce a measure to amend the Income Tax Act and to provide among other things:
1.	That for the 1967 and subsequent taxation years the deduction from individual income tax equal to the lesser of 10 per cent of basic tax or $600, described in subsection (4) of section 33 of the said act, be replaced by a deduction equal to the lesser of 20 per cent of basic tax or $20, and that for the 1966 taxation year the deduction be equal to the aggregate of
(a)	4 per cent of basic tax or $240, whichever is the lesser, and
(b)	12 per cent of basic tax or $12, whichever is the lesser.
2.	That for the 1967 and subsequent taxation years,
(a)	a gift made to a charitable organization in
Canada exempt from tax by paragraph (e) of subsection (1) of section 62 or to a corporation or trust resident in Canada exempt from tax by paragraph (f) or (g) of that subsection may be deducted in computing taxable income for the year only if the donee is a registered Canadian charitable organization, and for this purpose a registered Canadian charitable organization shall mean
[Stage Direction]
June 8, 1966
Income Tax Act
(i)	a charitable organization in Canada exempt from tax by paragraph (e) of subsection (1) of section 62 or a corporation or trust resident in Canada exempt from tax by paragraph (f) or (g) of that subsection, or
(ii)	a branch, section, parish, congregation or other division of an organization described in (i) that receives donations on its own behalf,
that has been registered in a prescribed manner with the Minister of National Revenue and has filed a return in prescribed form; and
(b) the aggregate of gifts that a taxpayer may deduct in computing his taxable income for a taxation year by virtue of paragraph (a) of subsection (1) of section 27 of the Act may include a gift made
(i)	to the United Nations or any agency thereof,
(ii)	to a university outside Canada prescribed to be a university the student body of which ordinarily includes students from Canada, or
(iii)	to a charitable organization outside Canada to which Her Majesty in right of Canada has made a gift during the calendar year coinciding with or ending in the taxation year.
3 That with respect to bonds or other obligations issued after April 15, 1966, interest on such bonds or other obligations
(a)	of or guaranteed by the government of Canada,
(b)	of the government of a province,
(c)	of an agent of a province, an educational institution or a hospital, where repayment of the principal amount thereof and payment of the interest thereon is guaranteed by the government of the province, or
(d)	of a municipal or local government established under provincial law,
be exempt from the 15% non-resident withholding tax.
4.	That with respect to taxation years ending after March 29, 1966, a corporation whose principal business during the year after that date was trading or dealing in bonds, shares or debentures will not be eligible to pay tax at the special 15 per cent rate of tax provided by section 70 of the said act.
5.	That with respect to dividends received after March 29, 1966, a non-resident-owned investment corporation may not deduct from its income in computing its taxable income a dividend received by it from another non-resident-owned investment corporation other than a dividend paid by a nonresident-owned investment corporation that had previous to the payment of the dividend, and at a time when it was taxable as a non-resident-owned investment corporation, paid dividends (other than dividends on which no tax was payable under the said act) the aggregate amount of which is not less than the corporation's surplus determined in the manner prescribed for purposes of subsection (la) of section 196 of the said act for taxation years for which it was not taxable as a non-resident-owned investment corporation.
6.	That for the 1966 and subsequent taxation years an employee may not deduct in computing his income an amount in respect of tuition fees paid on his behalf by his employer in excess of the amount included in his income in respect of the said fees.
7.	That with respect to a benefit received after March 29, 1966 by virtue of a plan under which a corporation agrees to sell or issue shares to its

employees, the rules described in subsection (2) of section 85A of the said act that an employee may elect to use to calculate the amount of tax on the said benefit be amended so that the 20 per cent of the amount of the benefit referred to in subparagraph (ii) of paragraph (b) of the said subsection will not exceed $200, but that this amendment shall not apply if the right to acquire shares was given to the employee before March 30, 1966 and the benefit is received before January 1, 1968.
8.	That it be declared for greater certainty that the expression "in Canada" in the said act includes and has always included the sea bed and sub-soil of the submarine areas adjacent to the coasts of Canada in respect of which grants are issued, by the government of Canada or of a province, of a right, license or privilege to explore for, drill for or take any materials or substances.
9.	That with respect to operations that come into commercial production after March 29, 1966, the definition of a mine be amended so that all wells, the material that is extracted from sylvite deposits by means of which is sent to a single plant for processing, be deemed to be one mine, and that where an operation that would qualify as a mine by reason of an enactment based on this resolution came into commercial production within the 3 years preceding March 29, 1966, that part of the income of the operator, thereof that is attributable to commercial production therefrom in the part of the first 36 months of such operation that falls after March 29, 1966, shall be deemed to be income from the operation of a mine.
10.	That the date before which a new manufacturing or processing business must have commenced manufacturing or processing in reasonable commercial quantities in a designated area in order to qualify for an exemption from tax on its income from such operations for 36 months after the commencement of operations be changed from April 1, 1967 to April 1, 1968 in the case of a manufacturing or processing business where evidence satisfactory to the Minister of Industry is furnished to establish that
(a)	the facilities to be used in the said business were in the process of being constructed, installed or assembled on the site of the proposed business premises on March 29, 1966, and
(b)	the said business is unable to commence manufacturing or processing in reasonable commercial quantities before April 1, 1967, by reason of an event beyond the control of the said business.
11.	That the provisions of section 79C of the said act dealing with deferred profit sharing plans be revised and in particular that the said provisions
(a)	authorize the governor in council to make regulations to define the property in which funds of a trust governed by a plan may be invested.
(b)	require that property of a trust governed by a plan be vested in the employees who are beneficiaries under the plan, and
(c)	provide rules for taxing amounts reallocated when employees who are beneficiaries under a plan cease to be beneficiaries under the plan.
12.	That paragraph (u) of subsection (1) of section 11 be amended to provide that the deduction from income provided thereunder shall not apply with respect to amounts paid after March 29, 1966, to a trustee under a deferred profit sharing plan.
June 8, 1966
[Stage Direction]
13.	That section 79A of the act, dealing with supplementary unemployment benefit plans, be amended to provide for the registration of such plans for the purposes of the said act and to authorize the making of regulations governing the qualifications required of such plans for registration.
14.	That with respect to each taxation year included in whole or in part in the period commencing May 1, 1966, and ending October 31, 1967, a special refundable tax at the rate of 5% shall be payable by all corporations that are not exempt from tax under the said act by virtue of section 62 thereof and by all trusts (other than trusts arising on death) calculated, in the case of a corporation, on a tax base (hereinafter called the corporate tax base) comprising the aggregate of
(a)	its taxable income or loss,
(b)	amounts deducted under paragraph (a) of subsection (1) of section 11 in computing its income,
(c)	amounts deducted under paragraph (b) of subsection (1) of section 11 in computing its income,
(d)	business losses sustained in other years that are deducted in computing its taxable income,
(e)	the amount by which any amounts deducted under section 83A of the said act in computing its income exceed any expenses described in that section actually incurred by it in the year,
(f)	dividends received from corporations described in paragraphs (d) and (e) of subsection (1) of section 28 of the said act that are deducted in computing its taxable income, and
(g)	income from the operation of a mine not included in computing its income by virtue of subsection (5) of section 83 of the said act, minus the aggregate of
(h)	$30,000, but where the corporation is associated with one or more other corporations in the year then 30/35ths of the amount allocated to it for the year under subsection (3) or (3a) of section 39 of the said act,
(i)	the aggregate of the payments made in the year by the corporation (not exceeding the aggregate of the amounts specified in sub-paragraphs (b) and (e)) each of which was a payment as or on account of principal made in retirement of a debt owed by the corporation or made into a sinking fund that under an agreement in writing entered into before March 30, 1966 was required to be established for the purpose of the retirement of a debt owed by the corporation, if
(i)	the original term for all repayment of the debt was three years or longer,
(ii)	the payment was required to be made in the year under an agreement in writing entered into before March 30, 1966, and
(iii)	the payment was made to a person with whom the corporation was dealing at arm's length,
(j)	payments made in the year by the corporation to redeem shares of its capital stock where such redemption was authorized by or on behalf of the corporation before March 30, 1966, or required by an agreement in writing entered into before that day, and
(k)	the following taxes payable by the corporation in respect of the year, namely
(i)	income tax payable to Her Majesty in right of Canada,
(ii)	income tax and logging tax payable to Her Majesty in right of a province, and
Income Tax Act
(iii)	income and profits taxes payable to the government of a country other than Canada, and in the case of a trust, on a tax base (hereinafter called the trust tax base) comprising the aggregate of
(l)	its income or loss from all businesses carried on by it,
(m)	its rental income not included in computing the amount determined under subparagraph (1),
(n)	amounts deducted under paragraph (a) of
subsection	(1)	of	section 11 in	computing	the
amounts specified in subparagraphs (1) and (m), and
(o)	amounts deducted under paragraph (b) of
subsection	(1)	of	section 11 in	computing	the
amounts specified in subparagraphs (1) and (m), minus the aggregate of
(p)	$30,000,
(q)	the aggregate of the payments made in the year by the trust (not exceeding the amount specified in subparagraph (n)) each of which was a payment as or on account of principal made in retirement of a debt owed by the trust, if
(i)	the original term for full repayment of the debt was three years or longer,
(ii)	the payment was required to be made in the year under an agreement in writing entered into before March 30, 1966, and
(iii)	the payment was made to a person with whom the trust was dealing at arm's length, and
(r)	income and profits taxes payable in respect of the year to the government of a country other than Canada.
15.	That for the purposes of the special refundable tax, the corporate tax base and trust tax base for any taxation year part of which is before May 1, 1966 or after October 31, 1967, shall be that proportion of the said tax base that the number of days in the taxation year that are after April 30, 1966 or before November 1, 1967, as the case may be, is of the total number of days in the taxation year.
16.	That payment of the special refundable tax shall be made,
(a)	in the case of a corporation, in monthly installments on the last day of each month commencing with May 31,	1966, and ending with
October 31, 1967, with each installment calculated by reference to the corporate tax base for the same taxation year of the corporation as is used in computing or estimating the corporation tax payment that is due on the same day, and
(b)	in the case of a trust, in equal installments on June 30, September 30 and December 31, 1966, and in equal installments on March 31, June 30 and September 30, 1967, calculated by reference to the trust tax base for the preceding taxation year or the estimated trust tax base for the taxation year in which the installments are paid.
17.	That each installment of special refundable tax shall be,
(a)	in the case of a corporation, that proportion of the tax calculated or estimated to be payable for the taxation year, that one is of the number of installment payment dates in the taxation year that are after April 30, 1966 and before November 1, 1967, and
(b)	in the case of a trust, one third of the tax calculated or estimated to be payable for the taxation year,
[Stage Direction]
June 8. 1966
Income Tax Act
and that
(e) the final adjusting payment, if any, shall be due, In respect of each taxation year, three months after the end of the taxation year, and
(d)	a return in prescribed form shall be filed by a corporation within six months from the end of each taxation year and by a trust within ninety days from the end of each taxation year.
18.	That the special refundable tax shall be refunded together with interest at 5% per annum to taxpayers at such time or times as may be prescribed but not less than 18 months nor more than 36 months after the later of
(a)	the day on which the payment of tax to be refunded was due; or
(b)	the day on which the payment of tax to be refunded was paid.
[DOT] (3:10 p.m.)
Mr. Brewin:: Mr. Chairman, yesterday my colleague, the hon. member for York South, dealt critically with the budget resolutions from the point of view of their impact upon any inequalities of income as between individuals within society, and also with the need to use fiscal policy as a tool for keeping the economy functioning. I wish to direct my remarks to a slightly different aspect of the problem. I want to refer to the impact of the resolutions on inequalities as between different regions of Canada.
My criticism of these resolutions will be that they and the policy they represent fail to take account of the need to level out regional inequalities. I need not remind members of the committee that one of the accepted economic purposes for government today is to iron out and eventually eliminate regional discrepancies or inequalities or inequities.
A balanced economic development of all areas of Canada was a goal which the Economic Council of Canada was directed to study. I am sure it is quite unnecessary to recall that that council in its second annual report, chapter 5, reviewed the question of regional growth and regional disparities. This chapter documents the persistent long-term disparities in economic growth, in income, in employment, in social services, and reveals that there is a substantial and long continued gap between the conditions in respect of these matters and the standards in these matters in some parts of Canada and other parts; and I refer particularly to the Atlantic provinces. I am aware that there have been set up a number of instruments of economic planning designed to deal with this very problem. The Atlantic Development Board, of course, is an illustration, and there are various provincial boards established and various

acts passed. Nevertheless, unless all the policies of government both federal and provincial are co-ordinated in a strategy of economic development, we will not achieve the goal of eliminating or ironing out these regional inequalities.
I should like to analyse the budget resolutions for a moment in order to show where I think they fall down. First of all, as I understand the policy which lies behind these budget resolutions it is that certain measures should be taken to cut back capital investment both private and public at the present time. As I understand it, and as explained by the minister, the reason for this is that in certain sections of our economy there is danger of overheating; that is, we have reached a stage in our expansion where there is virtual full employment and where there is a danger of inflation threatening the possibility of rising prices. Therefore certain steps were taken in these resolutions to damp down, as it were, the possible fires of inflation.
I should like to point out that this sort of a policy very well may make sense in parts of Canada but makes absolutely no sense in such areas as the Atlantic provinces where there is a 10 per cent rate of unemployment and where the urgent need is for more capital investment both public and private. I wonder whether the persons who advise the Minister of Finance are not able to devise some method to deal with this sort of problem without applying their policy to a section of the country in which there is certainly no need to dampen down the expansion but where there is every need to encourage investment. They should make sure that these measures do not apply in this area.
Paragraph 10 of the resolutions we are discussing deals with another matter which illustrates again the application of policies to Canada as a whole that make absolutely no sense in certain regions of the country. Although I do not wish to discuss paragraph 10 in detail now as I believe that will come up later, I do want to refer to the fact that paragraph 10 is designed to extend the incentives in the form of certain income tax exemptions for a further period. This applies to manufacturing or processing in designated areas. As we all know, this was discussed in the house the other day under the estimates of the Department of Industry and I shall not expand on it at any length because our views are known. The designated areas are defined by certain criteria which make perfectly good
June 8, 1966

sense, I suggest, generally speaking in respect of certain areas of the country, but they make absolutely no sense whatsoever in their application to the Atlantic provinces. I wish to refer to the eighth publication of the Atlantic pi'ovinces Economic Council. On several occasions that council has urged that the whole of the Atlantic region should be designated as an area for special assistance; yet, in the resolutions before us we have continued a designation based on a series of criteria which absolutely stand in the way of effective growth within the Atlantic provinces. It is true that this is under the Department of Industry Act, but it is made applicable by these resolutions.
I know of no economist who has studied this matter who does not agree that the whole of the Atlantic provinces, for example, should be a designated area. It makes absolutely no sense that areas of growth such as Halifax, Sydney, Saint John and Moncton-I name only the four which come to my mind at the moment-where there is a natural ability to develop economic growth should be excluded from the special incentives when we have been declaring it to be a matter of national policy to aid those areas of the country in which there is not adequate development and these are the very places in that area where the prospects of growth are most hopeful.
I pass on to another feature of our fiscal system which I suggest has exactly the same unfortunate effect. I refer to the way in which we obtain our tax for old age security. As hon. members know, this is at the rate of 4 per cent on the first $3,000 of taxable income up to a maximum of $120 a year. This tax is regressive. For all people whose income is above this amount the ceiling still is $120. When we consider the distribution of income as between regions in Canada we certainly should consider removing the regressive feature of this type of tax. In my view this tax is a relic of the age when it was considered as a source of revenue rather than as a means to regulate our economy and institute social policies.
When you have an area like the Atlantic provinces where incomes, as documented by the Atlantic Provinces Economic Council report, are away below the average level this means that when you have this regressive type of taxation we are asking the people in the poorer regions of Canada to pay a larger portion of their incomes to finance old age security. If we are serious about ironing out
Income Tax Act
these inequities I suggest we should do something about this. I should like to say the same thing with regard to the Canada Pension Plan. This is all a part of the fiscal policy and tax structure. As I understand it, contributions to the Canada Pension Plan can be deducted for personal income tax purposes. The net result of this is that those with high incomes recover a great proportion of their contributions to this scheme. Because of the level of the tax they pay they get a higher percentage of benefit from the exemption that is granted while people at the lower income tax levels, on the other hand, get a lesser benefit.
This is another illustration of the fact that our tax structure and our fiscal system are not designed having in mind all the areas of Canada. I know we are going to have a report of the royal commission on taxation, but I suggest this is a matter which could be and should be dealt with now. I should like to refer to the special refundable tax, if that is the correct way to refer to it. The hon. member for York South dealt with it in detail. I do not wish to repeat what he said but I should like to apply what was said by him to the whole question of regional inequality. As he pointed out, no doubt the purpose of the 5 per cent refundable tax was to cut down on the moneys available for over-construction and over-investment and thereby slow down capital investment at the present time. It is proposed to release these funds 18 months, I believe, from the date the resolution becomes effective.
[DOT] (3:20 p.m.)
My friend the hon. member for York South pointed out that this scheme, excellent as we believe it to be and a welcome innovation in the fiscal tools used by the government, is not as flexible or as adequate as the similar scheme carried out in Sweden. Under the system prevailing there the money is saved, I think on a voluntary basis, but then is released by the government according to government plans and not just at some rigid date 18 months away to be spent in any way that is seen fit. Certainly the corporations who contributed the tax may ask for the money back, get it back and spend it any way they wish, because after all it is their money. But they are given a substantial incentive in the form of exemption from taxation where they are ready to apply the savings so secured to investments aproved by the government.
By doing this it is possible to carry out long-term objectives of the government and

June 8, 1966
Income Tax Act
particularly-this is the point I want to emphasize-to use the funds so saved to carry out a policy of regional development. I know very well that the Atlantic Development Board and those scholars who are working for it are preparing detailed plans for the expansion and growth of the Atlantic provinces. But unless there are adequate capital funds, both public and private, available for investment, and I think private funds will follow public funds, then all these beautiful schemes that appear on paper will fall by the wayside and just be pigeonholed like so many other reports and schemes that are brought forward in this house.
I suggest to the minister that in looking again at this refundable tax he should consider whether it is not possible to provide inducements and flexibility such as exist in the Swedish scheme and apply them on a regional scale so we will have the means with which to carry out the policies we profess to have. A few of the members listening to me

I notice that a few of them are listening-may well ask the question why it is that I, representing a constituency in the Toronto area and a rapidly expanding part of our economy, should be speaking to the committee in regard to the problems of the Atlantic region. I know there are many people in the house able to discuss the problems of the Atlantic region with a great deal more knowledge and fervour than I, for the simple reason that they know the area they represent a lot better than I possibly could. But apart from the fact that the economic policies of the past caused a great many people from the Atlantic provinces to migrate into my own constituency and many of my constituents come from Cape Breton, Newfoundland and others of the Atlantic provinces-and I do not regret it at all; this has perhaps given me a special interest in the problems that caused their migration to the city I happen to represent-it seems to me that all of us who are members of this house from whatever part of Canada we come should seriously accept the fact that regional policies should be considered as part of a national policy aimed at a faster rate of national growth.
In our view a co-ordinated strategy to iron out and eliminate regional inequalities will be beneficial to Canada as a whole, and those of us who like myself come from the central provinces have a very real and distinct interest that government policy including fiscal policy, including Budget policy, should take this objective into account. It is my view
[Mr. Brewin.i
with regard to the resolutions we have been discussing that as we look at them we cannot help seeing again and again that this aspect of national policy appears to have been overlooked. I hope that if it is overlooked now it will not continue to be overlooked in the future.


Mr. McIntosh:: Mr. Chairman, I would ask the minister to clarify what is meant by the term "Canadian charitable organization" in paragraph 2. It seems to me that this is a little different from the description given to these organizations in the past because of the addition of the word "Canadian". I ask the question for two reasons. First, are there other, non-Canadian charitable organizations operating in Canada which will not be or are not entitled to exemptions? Second, can a Canadian charitable organization be set up in Canada by a group which does not and will not claim Canadian citizenship?
This matter is of concern to me and of particular concern to my area and the prairie provinces because it has to do with the Hutterites. The reason for my participation in the discussion on this particular item is to bring to the attention of the minister a group which I believe has special privileges under our income tax legislation. Much has been said on this subject over the years, although no particular action has been taken to remedy the situation that exists in western Canada. I am not blaming the minister for the situation that exists there because on previous occasions, in fact when our party formed the government, this question has been drawn to the attention of the government.
However, because there was not enough time no action was taken in this regard, or the reason for the problem not being solved was that action was not taken by the Department of National Revenue to bring this matter before the courts and obtain a settlement. I would ask the minister to pay particular attention to this problem which will be a very serious one in Canada in the near future.
The Hutterite problem in western Canada is becoming more serious and it is growing at a very alarming rate. It will become really difficult to solve in the not too distant future. Without taking up too much of the time of the committee at the moment to go into the detail of the problem, I would refer the minister to a speech made by the hon. member for Acadia on March 22, 1960, reported at page 2335 of Hansard. If the minister wants
June 8, 1966

more detail in this repect I suggest that he read that speech. On March 23, I960, I also made a speech which is reported in Hansard. at page 2362. In that speech I went into the origin of this group in Canada, in fact to their origin in 1526 in Switzerland. They claim that they are not citizens of Canada nor of any other country in the world. I suppose that in a country such as Canada, wherein we enjoy the freedom that is ours, they are entitled to this belief.
However, Mr. Chairman, my contention is that although they are entitled to that freedom they should be subject to taxation the same as all other Canadians, and under our present system they are not. Possibly because there is a loophole in the act they are not treated in the same way as other Canadians. I believe that in the last week or ten days the Minister of National Revenue has indicated that the department is going to prosecute certain groups in the courts under the income tax legislation, and if this prosecution is successful perhaps the problem will be solved. However, if it is not successful I would ask the Minister of Finance to give consideration to this problem and investigate it before it becomes more serious than it is at the present time.
I want to refer to the speech made by the hon. member for Acadia in 1960. I will not read it all but I would ask the minister to read the whole of the speech when he is studying this matter. The intention of the hon. member at that time was expressed in these words:
[DOT] (3:30 p.m.)
I feel that they are in a sense receiving a subsidy from all the rest of the taxpayers in Canada and that is my only grievance.
He then stated:
I should point out, Mr. Speaker, that the Hut-terites as individuals are subject to income tax.
He referred to section 62, subsection 1, of the Income Tax Act. I will not go into that. He also pointed out that possibly there are loopholes in the act. He said:
An interesting point concerning income taxes is made in the Alberta report on page 11 where it is stated that at one time they were assessed and the elders journeyed to Ottawa and presented their case. Subsequently, unlike any other partnership, the profits are theoretically divided equally amongst the members for the purpose of taxation. I say to you, Mr. Speaker, that nowhere else is a farmer with half a dozen sons allowed to theoretically divide his profits so that he may not pay income tax.
Income Tax Act
He went on to illustrate his point with examples of several cases. In one case a farmer had a great number of sons and was not allowed the same privileges which the Hutterites enjoyed. He had to present a net worth statement and pay taxes. The Hutterites are not subject to this obligation.
There is another question which I should like to put to the minister. How does this group of people evade the section in the Income Tax Act which refers to gift taxes in the case of the establishment of another colony? I do not know what procedure they adopt but I do know that within the last few days offers have been made in my constituency to one or two farmers. In one case a farmer was offered $2 million in cash for his holding if he would sell it to the Hutterites. In another case a farmer was offered $350,000 in cash. Most of these farmers are reluctant to sell to the Hutterites because they know what the consequences of such a sale might mean to the community.
This is a serious problem, Mr. Chairman. I understand the Hutterites hide behind the guise of a charitable or religious organization, which they are not. The definition of the term "charitable organization" entails assistance to the poor in the region, assistance to education and so on. The religion of the Hutterites, however, does not require them to help anyone except themselves. I believe they do not send their children to school beyond grade 8. They do not help the community and in fact they are a detriment to the community. Furthermore I feel it is unfair that the people who compete with them are subject to taxation, because such is the situation in these particular areas. The people who live in these areas have to pay for the subsidies from which organizations such as the Hutterites profit and to which I say they are not entitled. The Hutterites stay in one community only until their number reaches 100 and then they swarm like bees in search of another location. When they find an area in which they wish to locate they are willing to pay any price which the farmer asks for his piece of land, and they can always pay in cash. They are in direct competition with the neighbouring farmer who may not be able to pay this money because his surplus cash has been paid to the government in taxation.
Why are these people allowed to accumulate this amount of money and use it in direct competition with the small business man or farmer in this community? As I said before, I
6148

June 8. 1966
Income Tax Act
am not blaming the minister for it but I wish to ask him to look into this situation.
I understand that one method by which they evade income tax at the present time is be setting themselves up as a corporation. I ask the minister whether it is fair for them to have it both ways. I understand that under the Corporations Act any group which establishes itself as a corporation is not entitled to receive subsidies in the form of family allowances, acreage payments and so forth. However, on many occasions these people claim such privileges as family allowances and subsidies on their produce and they evade paying income tax because of a loophole in the act. I say to the minister that this is not fair and that they should not be able to have it both ways.
I wish to ask the minister once again to define the term "Canadian charitable organization". What is the reason for the word "Canadian"? This is a Canadian charitable organization set up by non-Canadians, by people who have openly expressed the fact that they do not wish to be Canadians which means they do not want to accept the responsibilities of our country. However, they accept all the benefits which are given to them by this country. I therefore ask the minister to investigate this problem.


Mitchell William Sharp: Mr. Chairman, may I deal briefly with one point raised by the hon. member for Swift Current-Maple Creek. There is no special significance to the words "registered Canadian charitable organization" which appear in paragraph 2 because the definition follows immediately. As the lawyers would say, it is just a term of art in order to save words.


John (Jack) McIntosh: I wonder whether the minister would say a few words in answer to the two brief questions I asked him. My first question is whether non-Canadian groups can set up a Canadian charitable organization. My second question is whether there are any non-Canadian charitable organizations operating in Canada which are exempted from income tax.


Mitchell William Sharp: I find it very difficult to understand what a non-Canadian charitable organization might be. resumably there are charitable organizations operating in Canada to which non-Canadians who are performing very useful and highly commendable activities belong. I do not know of any specific organization of this kind, but since I am not in a position to answer legal questions on this

occasion I can only refer this matter to my colleague, the Minister of National Revenue.
The hon. member will see that the definition of a registered Canadian charitable organization is set out in the resolution in these words:
2(a) (ii) A branch, section, parish, congregation or other division of an organization described in (i) that receives donations on its own behalf, that has been registered in a prescribed manner-
The rest of the section deals with administrative arrangements. So far as I know there is no specific prohibition preventing a nonCanadian from forming a Canadian charitable organization.


Mr. Rynard:: Mr. Chairman, I wish to make a few remarks regarding, first, personal income tax and, second, the 5 per cent corporate tax. I wish to say to the minister first of all that according to that portion of the Income Tax Act dealing with personal taxation a family of two would require, according to urban estimates, a minimum subsistence rate of around $350 a month. This family of two will pay $90 or more income tax. They will also pay approximately $60 on the Canada Pension Plan. They will pay another $50 or more on old age security. In addition to all this in most provinces, certainly in Ontario, they will pay a 5 per cent provincial sales tax. I do not believe the minister has given this aspect of the matter serious consideration.
[DOT] (3:40 p.m.)
This same family will pay the 11 per cent tax on building materials and supplies as well as the 11 per cent tax on their drug purchases. This makes it extremely difficult for the small wage earner who owns his own home or is buying it to make ends meet. At the municipal level he finds himself taxed heavily for education. Approximately 50 per cent of his taxes at the municipal level goes for education, and he is allowed no income tax deduction in this regard. He does not get any income tax deduction for the interest on his mortgage payments. If something is not done for these people, there will be no incentive to own property. As a matter of fact, there will not be much incentive to work. When you add to all this the 10 per cent hike in food costs last year you get a rather dreary and dismal picture for these people.
I should like to ask the minister if he does not think this is one of the causes of the labour unrest across Canada. People are being pinched because they have not got
June 8, 1966

enough to make ends meet, so in self-defence they go out on strike. I should like to ask the minister if he has given any consideration to that problem. I think it is a No. 1 priority.
I should like to say a few words now about the regional discrepancies in pay and costs of living across Canada. These remarks apply not only to people who earn their incomes in these areas and pay their taxes but they also apply very pointedly to the old age pensioners. I wonder just how these people are living on $75 per month. I should like to remind the minister that about 70 per cent of the ladies of this country who are 70 and over and about 60 per cent of the men have no other income but the pension. I say to the minister that, with taxes and inflation, this is tragic.
I should like to say a few words about the 5 per cent corporate tax on businesses earning over $30,000. In my opinion this tax will increase the cost of production and the prices of the products these corporations are selling. I believe this is a vital matter because our productivity now is only about two-thirds of that of the country to the south of us. We have to meet world competition. I wonder about the paradox of this situation and I should like the minister to think about it.
I am not critical of the designation of incentive areas across Canada because it does create employment. But how in the world does the minister square the fact that on the one hand he offers an incentive of up to 20 per cent of capital costs and accelerated write-offs to business going into these areas while on the other hand he puts a 5 per cent tax on the corporate income of those business firms that are already producing and meeting competition in world markets? The only thing I can say to the minister is that in my opinion this is a complete paradox. He imposes a tax to hold some corporations back and slow down inflation while on the other hand he goes around offering incentives to other corporations which creates inflation. What sort of paradox is this?
I want to go a little further and comment on the idea of giving back the money from the 5 per cent tax to these corporations in 18 to 24 months. I think the minister is a real sharp financier because at the present rate of erosion of the dollar-it was 4 per cent last year-he is going to clip the amount down to the point where they will not be getting their 5 per cent. I ask the minister to take another look at the $145 million he hopes to raise by this method.
Income Tax Act
In conclusion I should like to make a suggestion to the minister. In formulating the rules and directions for preparing income tax returns the department should make them simple enough that the ordinary man can interpret them. We have rules and instructions now which the ordinary taxpayer cannot interpret. He has to get a specialist to interpret them. Surely this wrong should be corrected. The people we work for should be able to interpret the rules that we lay down.


Mr. Barnett:: I believe it should be apparent to the Minister of Finance by now, Mr. Chairman, that the members of the New Democratic Party have been examining the proposals he has put forward in the income tax resolution from two points of view. On the one hand, we have been concerned about the extent to which the income tax proposals are being utilized as a tool for economic planning. On the other hand, we have been concerned about whether and to what extent the income tax proprosals move in the direction of achieving social justice through an appropriate restructuring and amendment of the Income Tax Act. I have some comments I should like to make about the income tax resolution from both those points of view.
I listened to my colleague, the hon. member for Greenwood, a short time ago suggesting that the proposals of the minister are inadequate in relation to furthering the appropriate regional expansion in Canada, particularly from the point of view of those areas where the rate of economic growth is by all counts completely inadequate.
I happen to come from a part of Canada which has been expanding at a very rapid rate, particularly in the primary industries which lie in the area of my constituency. In recent years I have sometimes had the feeling that one could expect an announcement of a new, multi-million dollar pulp mill expansion or building project almost every other week. Certainly some of the corporations that have been engaged in this form of activity have been showing a very handsome profit picture and will be among those corporations in Canada that will be affected by the minister's so-called refundable tax proposal. I share the views of my colleagues that the minister's gesture is a very feeble and halting one. It is not designed to overcome in any way what I consider to be the very serious disparity of growth within my own area. I am referring to the disparity of growth between industrial plant and the necessary community facilities
23033-390J

June 8. 1966
Income Tax Act
that should go with the growth of industry so that the people who are going to provide the work force can enjoy the normal amenities of modern life.
[DOT] (3.50 p.m.)
In my view, if the sort of move the minister is proposing in this tax, which has been discussed in some detail by the hon. member for Greenwood and earlier by the hon. member for York South, is to have any real effect for the benefit and welfare of the people of Canada, one of its purposes should be to assist in ensuring that along with industrial growth goes the necessary and proper expansion of the normal community facilities which enable people to live and raise and educate their children.
It seems to me that far from taking into account this aspect of growth in our country the government has in another proposal moved completely in the opposite direction. The only announced public policy in this field is the cut-back of 10 per cent in government spending in its own construction program. This, particularly in areas where there is rapid economic growth and expansion, can and does result in very real hardship to the people who are asked to go and live and work in these areas. In an area along the seacoast such as mine the necessary public wharves, seaplane landing floats and all those facilities which come under the responsibility of the federal government must be provided to keep pace with the needs of the people and industry of the area.
In the field of housing-if the Minister of Labour were here he could verify that I have had some rather extensive discussions with him with respect to the proper expansion of housing facilities-the policies which have been followed under the direction of the Minister of Labour and the government as a whole have resulted in the basic disparity between economic industrial expansion and the provision of housing and related facilities becoming worse and worse.
If the Minister of Finance, in his use of income tax as an economic tool, had made some provision in his proposals to redress the balance between the kind of expenditures that large corporations are able to make apparently at will in order to build new pulp mills and other plants of that kind, or to develop overnight very large mining operations to ship iron ore to Japan, by redirecting the funds that the minister suggests should be withdrawn from these corporations to the

provision of a balanced growth in areas like those to be found in many parts of British Columbia, I for one would have been a much happier member in rising to discuss the minister's income tax proposals.
Having said that, Mr. Chairman, I should like to turn my attention to the other aspect of the proposals which, as I have suggested, is a major one so far as the members of the New Democratic Party are concerned.
I am going to bring to the attention of the minister an example of what I consider to be a complete ignoring of a basic injustice in the present income tax structure. It is a basic injustice which divides the people of Canada according to the particular form in which they receive their income.
As the Income Tax Act now stands there is built into it a dividing line which discriminates against the vast majority of Canadians whose source of income is from salary or wages. I have quoted in the past many examples of this situation. As a matter of fact, I believe I have raised this question in every budget discussion while I have been a member of the house. I cannot recall whether I raised it when Hon. Douglas Abbott was minister of finance but I certainly did on several occasions when Hon. Walter Harris was the minister. At least two ministers of finance of the Conservative administration also heard from me about the matter. Last year I raised it in the house when the hon. member for Davenport was minister of finance and he went as far as saying that he would have a look at the matter.
So far as public statements in the house are concerned the matter is not as far advanced as it was when Mr. Harris presented his last Budget. It had been completely ignored for a number of years but Mr. Harris publicly admitted on the floor of the house that discrimination did exist in this area and that he and his department were prepared to take a look at it.
I could cite a number of examples of such discrimination but I will cite only one. Most members of the Canadian medical profession are in private practice. They are not on salaries or wages, though many men in that profession, of course, do draw their income in that way. If I understand correctly the application of the present Income Tax Act, a medical man in private practice who wishes to purchase certain medical textbooks to assist him in the carrying on of his work is quite properly able to deduct the expense from his taxable income. On the other hand,
June 8, 1966

Income Tax Act
if a medical man is in a salaried job and needs the same textbooks he is not able to deduct the cost of the books from his gross income for income tax purposes.
In my submission this is a problem which applies much more broadly to people who are engaged in the teaching profession, almost all of whom are working and receiving their income in the form of salaries or wages. For that matter, the textbooks required by students at universities and other schools are not considered to be expense items deductible for income tax purposes.
One could cite other examples, Mr. Chairman. I have raised many times one aspect of this matter which affect a great many people in my constituency. I refer to workers who are engaged in the type of employment which requires them to travel in the course of their work from their regular place of residence to camps where they live and pay board and also incur travel expenses in going to and from their homes from time to time. Various occupational groups are particularly concerned, such as miners and loggers. Fishermen are not too much affected because for income tax purposes most fishermen are classified as self-employed and do indeed enjoy benefits under the Income Tax Act which are denied other workers.
[DOT] (4:00 p.m.)
In this connection I should like to remind the house that this longstanding discrimination was aggravated in 1957 when the former member for Eglinton presented his first budget. Because of a particular situation that had developed in the preceding parliament he saw fit to introduce an amendment to section 5 of the Income Tax Act providing for specific exemptions for certain classes of workers who have to travel. I refer, of course, to the amendment providing exemptions for those who are engaged in the construction field.
I suggest that in section 11, subsection 5, of the Income Tax Act there is an example-and I am not quarreling that this exemption is allowed-is to be found of another particular group or class of employees whose incomes derive from wages or salaries and whose expenses incurred in a certain way may be deducted from such incomes. This is the provision that refers to people who are employed by railway companies. It allows them to deduct expenses for meals and lodging while they are from their normal places of residence.
It seems to me, if we are to move toward achieving social justice in the application of
income tax, that it is not good enough to pick out a particular group now and then and provide the kind of exemption to which I have referred. It does not matter whether you pick out railway workers, construction workers or others.
In 1956 the Liberal minister of finance stood up in the house, admitted that discrimination existed under the act and said that he was prepared to look at it. The present Minister of Finance has not been in office too long. I do not know what opportunity he has had to examine this question. Perhaps he has been preoccupied with his famous 5 per cent refundable corporation tax.


Stanley Howard Knowles: The minister will tell you that they are waiting for the Carter commission to report.


Thomas Speakman Barnett: I hope the minister will tell us not only when he expects to receive the Carter commission report but what he will do with it after he gets it.


Mitchell William Sharp: I shall have to read it first.


Thomas Speakman Barnett: I am not quarreling with the need for particular examinations of the tax structure to determine in a general way where we ought to go. But in view of the examples of glaring discrimination which exists under the tax law I submit that we do not need to wait for any royal commission to report in order for it to be appropriate for the Minister of Finance to introduce the kind of amendments I suggest.
May I draw to the attention of the Minister of Finance Bill No. C-51 which stands on the order paper in the name of my colleague, the hon. member for Skeena. It sets out a possibly suitable amendment to section 5 of the Income Tax Act as it now stands. I have put forward the substance of this bill in committee as an amendment to the Income Tax Act on one or two occasions. I have suggested such an amendment to both Liberal and Conservative ministers of finance. The chairman of the committee suggested that it was not within my prerogative as a private member to move such an amendment, so I offer it on a silver platter to the minister for him to deal with on his own initiative.
The Minister of Finance is the fifth or sixth minister to whom I have addressed this plea. I know this matter is not covered in the resolution, but will the minister indicate to the house that he will be prepared to incorporate the proposals, set out in Bill C-51 in the bill that he hopes to introduce before very long? Were he to do this I should be

June 8, 1966
Income Tax Act
saved considerable trouble and expenditure of energy in the future. I do not know how long I shall be spared to be a member of this house, but I want to assure the minister that while he is Minister of Finance and so long as action along the lines I suggest is not taken he will hear from me about it. Perhaps in parenthesis-


Stanley Howard Knowles: That is for a long time.


Thomas Speakman Barnett: -it might be noted that since 1953 I have been elected five times and defeated once. I do not expect to be defeated again unless the Minister of Finance is prepared to suggest that the party now in the official opposition may make a sweep similar to the one it made in 1958. I am sure he will not advocate the likelihood of that happening.


An hon. Member:: Don't bet on it.


Thomas Speakman Barnett: I do not suggest that this amendment will correct all the things that in our party's view are imperfect in the existing Income Tax Act or in the minister's proposals. The hon. member for Vancouver-Kingsway referred last night to some important, discriminatory features in the existing Income Tax Act. Her proposals were not quite as definite as mine. They did not take the form of an actually proposed amending clause. But having known the hon. member for Vancouver-Kingsway for a number of years I ought to remind the minister that he should look seriously at the inequities she brought to the attention of the house last evening, because if he does not the hon. member for Vancouver-Kingsway, who is very persistent and energetic and has the support of her colleagues in the house, will keep reminding him of them. The hon. member for Vancouver-Kingsway has the support of her colleagues even though she may be the only member of her party who can claim the graces she has.
I await with interest the reply that I have been hoping to hear from the lips of the Minister of Finance for some considerable time.


The Deputy Chairman:: Has the hon.
Minister of Finance (Mr. Sharp) any observations to make at this time?


Mitchell William Sharp: Yes, I do.


Maurice Rinfret: The hon. member for Bow River.


Mitchell William Sharp: May I interrupt the discussion and assure my hon. friend that I do not want to prevent him from speaking.


J.-H.-Théogène Ricard: It cannot be done.


Mitchell William Sharp: I wish to ask whether, in order to facilitate the consideration of the paragraphs of this resolution, we might not distribute now to the members of the committee copies of two amendments that I should like to have moved so that they could be considered in the event that we conclude the discussion this afternoon.
[DOT] (4:10 p.m.)


Eldon Mattison Woolliams: Mr. Chairman, I wish to deal for a few moments with the changes in the first paragraph of the resolution. In doing so I must agree with the hon. member for Simcoe East that these changes, the increase in relation to certain tax brackets and the decrease in respect of others, have not eased the pressure. We must ask what is really the purpose behind these changes. Was it to produce more revenue? For an answer we may have to refer to the minister's own words at the time he made his Budget statement.
Consider the labour situation. We have problems today with the longshoremen, with employees of the Canadian National Railways and with employees of Trans-Canada Air Lines. In fact there is trouble right down the road. Surely this is all due basically to the high cost of living which the budget did nothing to cure. In my opinion inflation is still rampant. The wage earners find that they are taking home less pay because of increases in taxation. In addition, of course, the purchasing power of their wages has declined. I notice that today the dollar is worth only 37J cents compared with its value at the end of the war. This is the main reason we have all these troubles.
The minister said he made these tax changes so as to curb inflation. The Globe and Mail had this to say:
Finance Minister Mitchell Sharp was at pains to explain that his budget was designed to slow down but not to 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.
The Globe and Mail goes on to say that the whole trend of the minister's remarks was to indicate the need for restraint. That was the keynote of his message. But restraint by whom?
June 8, 1966

The hon. gentleman is seeking to ensure by these changes that the consumers spend less money. So far as labour and materials are concerned I do not believe there is any shortage in this country. The big shortage in Canada today is money. What did the government intend to do? The minister said that the budget was designed to curb inflation and hold the cost of living steady. But it has done nothing in this regard. The purpose which the minister was trying to achieve through taxing individuals has been upset by the government itself, because the government intends this year to spend 9.6 per cent more money than in 1965-66. In that year the budget totalled $7,707 million. For 1966-67 it was increased to $8.5 billion, an increase of almost 10 per cent. In other words, the government is saying to individuals that though it intends to spend more they shall have less to spend on consumer goods as part of an attempt to control the boom.
In my opinion, Mr. Chairman, the boom is a fiction because if one goes into the average home owned by an average wage earner or small farmer or businessman one finds that he is suffering today as he suffered in the recession of the thirties because of less money to spend on consumer goods and the necessities of life. The budget has done nothing to help in this regard.
The minister talks about tax cuts. What did these cuts amount to? For the bulk of the people, for the 60 per cent of our taxpayers who pay 88 per cent of all the income tax, the tax bill will be higher. Th's section includes those who are on strike today or who are about to go on strike with an adverse affect on the whole picture of gross national production. I say this because the Canadian Wheat Board admits we have lost contracts for 30 million bushels of grain. The board takes a much more serious view of this matter than the minister under whose responsibility it comes. Indeed, the officials say now that the loss may amount to 75 million bushels. Meanwhile the government is accepting no responsibility to assist the nation in getting this grain market.
It is not only the farmers of western Canada who are affected. The longshoremen's strike is damaging the whole economy of the nation. In my opinion this budget was a straight bluff. It did noting to curb inflation. The blame for what has happened lies on the shoulders of the present government. No explanation is ever given us of what these resolutions mean. What do they mean? I have
Income Tax Act
pointed out that more than half our taxpayers will have to pay more. What about the others? To a man with a wife and two children earning $4,000 a year, which is above the average as the minister knows, this so-called tax cut means $3 a year, which amounts to nothing when one considers the cost of living today. This is why we have strikes on the Great Lakes and on the St. Lawrence. This is why we will have a strike at Air Canada and in various other places -trouble everywhere, in fact. If this government could be labelled and given a new name it might well be called the government of trouble and crisis. Hon. gentlemen opposite are not measuring up to their responsibilities.
We on this side of the house continually put questions to the Prime Minister and the Minister of Finance. We get no answers. What did the minister say with reference to the wheat situation? He said it was very serious. Yesterday I asked him a simple question. I asked him whether the strike would affect the contracts we have with Russia and other nations. In reply he said: Well, it is going to be serious. But when the officials of the Canadian Wheat Board appeared before the committee they told us what the facts really were.
The minister has removed a tax cut given by his predecessor before the government went to the people. He would have us believe he is reducing the tax for those in the lower income brackets. But this so-called reduction amounts to only $3 a year and will have no effect whatever on the cost of living. Yet the cost of living is the biggest problem facing parliament today. I say the Minister of Finance has failed in his responsibility to curb inflation and that his budget has done nothing in this regard.
The leading newspapers of this nation, the Globe and Mail, the Winnipeg Free Press, the Calgary Herald and other papers in western Canada, all agree that the budget did nothing to curb inflation or prevent the cost of living from rising further. I see hon. members on the other side looking at me while I am speaking. They know, as I do, that the biggest volume of mail crossing our desks today as members of parliament is mail complaining about the high cost of living. In my opinion this is the reason the former minister of finance was fired. He was not fired because he recommended the calling of an election which did not work out very well. He was fired because his policies were aggravating the situation.

June 8, 1966
Income Tax Act
[DOT] (4:20 p.m.)
The minister has done nothing to undo the harm caused by the former minister of finance, and that is the point which must be driven home when considering the income tax resolution. The first part of this resolution reads:
That tor the 1967 and subsequent taxation years the deduction from individual income tax equal to the lesser of 10 per cent of basic tax or $600-
This provision, of course, is going to wipe out that reduction for a certain group of people.
-described in subsection (4) of section 33 of the said act, be replaced by a deduction equal to the lesser of 20 per cent of basic tax or $20-
Putting it in plain ordinary language, the tax changes for those people are peanuts. As I said at the beginning, the purpose of this Budget was to slow down the boom. While there may be a boom for certain classes of people there certainly is no boom for the average Canadian who is trying to get by on take-home pay.
If the minister reads Hansard he will see what I and other opposition members said about the introduction of the Canada Pension Plan. We pointed out that the plan and the manner in which it was brought in would only aggravate inflation. Today every small business firm has to employ one person for every other five people just for the purpose of keeping government records. That in itself has increased overhead costs.
On top of that employers are paying more tax. They pay Canada Pension Plan contributions for their employees. Professional men have been forced to increase their fees and small businessmen have raised their prices. Thus the spiralling rise in the cost of living continues.
Despite all this the government refuses to produce any concrete policy. It would rather have the country believe that the opposition obstructs. My answer to that is that the government has never brought in those pieces of legislation that would have helped cure our economic problems. The government is scared to bring in the amendments to the Bank Act because of political sensitivity.
Cabinet ministers wanted to govern and wanted responsibility. They said so during the election. Why don't they accept that responsibility? We cannot be charged with obstruction when we have never had any serious legislation to obstruct. The government is sitting on all legislation that would

help the situation and which parliament could examine. It is hoping that something may happen between now and an adjournment so that the political sensitivity will die down.
From what I read in the newspapers about leakages from the Liberal caucus I know that the Minister of Finance is concerned. In the caucus there is a group led by the former minister of finance and the present minister has his own group. The two groups cannot come together on amendments to the Bank Act and changes in the Income Tax Act.
There is trouble in the government and in the Liberal ranks. Government supporters know it. I see two of them smiling. They are probably wondering where I get my information but what I am telling them is absolutely correct. One does not even have to read the papers. Sometimes when you go up and down in the elevators you get a free bit of information from the Liberals themselves.
Liberal members are sitting around in their offices wondering which minister of finance they should support, and the Prime Minister is the biggest juggler. When he makes a speech you do not know whether he is supporting the former minister or the present minister, both of whom are politically ambitious and are looking to the throne of the Prime Minister with envious eyes.
The main problem today besides the cost of living is the shortage of money. The little man who wants to buy a home cannot get a dollar on a mortgage. In the city of Calgary, and I am sure the same is true in many other cities, people are paying interest rates as high as 12 and 15 per cent because the government will not introduce amendments to the Bank Act. The government has tightened the money supply just as the Liberals did in 1956. There is no money for small people to carry on business. Contractors are going broke. Housing is a problem, and it is all because the government will not face up to its responsibility. In particular it is the responsibility of the Minister of Finance.
I say kindly to the minister that if his cabinet colleagues are so timid and will not do the things that are necessary it is up to him to tell them: I am a man who likes to show that I accept my responsibilities and will take action. If his colleagues will not go along with him then, the minister knows the decision he must take, and it may be the same decision as the former minister. Because of tight money some contractors cannot complete apartment block buildings.
June 8, 1966

I wish the minister of northern affairs were in the chamber. I was told by an official whom I cannot and must not name that in our national parks on some nights last year there were more than a thousand people who could not get accommodation. Yet motel operators in our parks cannot borrow money to expand. One reason for that is the tight money policy of the government and another is that it has taken away from these people security of tenure in the land on which they operate with the result that they cannot borrow what they need.
There is trouble everywhere on the labour and management scenes. Some of that trouble could be solved if the minister would stand up to his own colleagues. These income tax changes mean nothing. They merely undo what was done last year when the Liberals tried to get a majority and failed. As I pointed out, the reduction in taxes means an additional $3 a year to throw around.
The minister should go to Safeway and find out the price of beef today. It is $1 a pound.


An hon. Member:: You cannot get it for that.


Eldon Mattison Woolliams: Then I must go to a cheaper store. To the average wage earner with $350 a month and two or three children this income tax cut means $3 or only three pounds of beef, not enough for a Sunday dinner. That puts the budget in proper perspective in plain, ordinary, simple terms.
I am tired of sitting in my place and hearing people talk in circles. Let us deal in dollars and cents. On that basis I say the government is a failure. I believe that what happened in the province of Quebec recently could very well happen throughout the nation. We have had five elections in eight years. I would point out that the responsibility for some of those elections rests on the government's shoulders because when we were dealing with income tax resolutions in 1963 the Prime Minister, who was then the leader of the opposition, said he would do everything and obstruct, everything to defeat our government, which he did.


Mr. Grafffey:: Power at any price.


Eldon Mattison Woolliams: Yes, power at any price, but now they do not accept their responsibility to come to grips with Canada's problems. The Globe and Mail had this to say on March 31 last:
Mr. Sharp's budget may, in other words, take some of the steam out of an overheated economy; but that was not its basic purpose. Had it been, the finance minister might have been tempted to apply
Income Tax Act
the credit restrictions of the 1950's; they checked inflation in a hurry. But Mr. Sharp was not entirely frank with the electorate.
This is the leading newspaper in the minister's own riding.
The biggest shortage in Canada today is not labour and it is not materials-though both are certainly short in particular areas. The biggest shortage in Canada today is money.
Mr. Sharp's budget was only partly designed to dampen inflation-
I think that is being very kind to the minister. The budget did nothing.


Mitchell William Sharp: That is not what it says. Read the whole thing.


Eldon Mattison Woolliams: I imagine you have read it so often that you know it by heart. You probably have it right by your bedside.


Mitchell William Sharp: Read the whole of it.


Eldon Mattison Woolliams: I am going to read it.
Mr. Sharp's budget was only partly designed to dampen inflation; its chief purpose was to give governments a head start over individuals and business in the chase after money.
Despite the government being given a head start over individuals, it is spending another billion dollars this year and telling the people of Canada to tighten their belts.
[DOT] (4:30 p.m.)


Mr. Stewart:: Read more.


Eldon Mattison Woolliams: The hon. member wants me to read more. He will be disappointed because it gets worse paragraph by paragraph. In fact I did not want to be too hard on the Liberals this afternoon.
Mr. Sharp s budget was only partly designed to dampen inflation; its chief purpose was to give governments a head start over individuals and business in the chase after money.
He could have presented a case for this head start. Governments, in many cases, are spending more money because the electorate has demanded more services. In some cases, as with education, the money is actually an essential investment in future prosperity. Mr. Sharp could have told us that none of these things come free, that governments pay for nothing, that the taxpayers-however disguised the bite may be-pay for all. That would have been the truth.
It continues, and here is the biting sentence you want to hear:
It is a pity the government does not believe Canadians are to be trusted with the facts.
Never has the Liberal party trusted Canadians with the facts, because they lied the last government out of office on the devaluation of the dollar and on the nuclear

June 8. 1966
Income Tax Act
question. The Globe and Mail came to grips with the subject so tar as the budget is concerned, and I have made my point in this regard. The Budget did nothing to cure the cost of living. We are right back at tight money. You should stand on the platform and say, "I support the government, I stand and vote for them, and I believe in tight money, inflation and a high cost of living." That is the platform you stand on but that is not a platform that will get you elected.


Mitchell William Sharp: Mr. Chairman, may I proceed to deal with these two amendments which I should like to have made to paragraphs 7 and 14 of the resolution. First, on paragraph 7, which deals with stock options, the proposal that was made in the budget to withdraw part of the extremely generous features of the existing formula has given rise to some protest from interested employees. Broadly speaking these protest have concentrated on three points. First, it is urged that some tax concession should be granted to provide incentives to key employees; second, it is urged that Canada should not tax special benefits more severely than similar benefits are taxed in the United States; third, it is claimed that the proposed change is retroactive in effect.
On the first of these points, there has been a fairly prevalent view that the holding of stock by employees, particularly key employees, is an incentive to their putting in their best efforts on behalf of the company. However, the proposition that special low rates of tax should be provided for certain forms of remuneration of employees in order to provide incentives for greater effort has not to my knowledge been advanced in a serious way before.
The tax system has been used to provide incentives for business and perhaps it could be used to provide rewards and incentives for employees but any tax provision for this purpose would have to be both fair and effective and I question whether it should be left entirely to employers to select the beneficiaries of such a scheme as it is under the present arrangement for stock option plans.
On the point that stock options should not be taxed more heavily in Canada than in the United States, the present Canadian formula taxes these benefits in some cases at a rate much less than in the United States even though in that country such benefits are taxed at the long-term capital gains rate of 25 per cent if they conform with the rule?

governing qualified stock option plans or employee stock purchase plans. A qualified stock option cannot be issued at less than the market value of the stock when the option was issued. The option must be exercised within five years and the stock acquired on exercise of the option must be held for three years. Whether or not stock option benefits are taxed less heavily in the U.S.A. the granting of stock options is not the only way to compete with United States employers for key employees. It may also be of interest that the recent budget speech in the United Kingdom proposed that full income tax and surtax be applied to benefits received under stock option plans.
On the third point, it has been alleged that the proposed change is retroactive in that some employees who were granted options to purchase shares in past years will now find that the benefit they receive when they exercise the option will be more heavily taxed than it would have been under the law that existed at the time the option was granted. These assertions raise the whole question of what is retroactive legislation. I believe that to change the rate of tax on income already received would be retroactive but surely no taxpayer has justification for expecting that the rate of personal income tax on his income will not be changed. An individual who enters into a contract of employment, or a business that enters into a business undertaking expecting a certain rate of return, cannot be assured that rates of income tax will remain unchanged during the term of that contract or business undertaking.
This point, and I should like to stress this, may have significance in the months ahead. It is to be expected that the report of the royal commission soon to be received will recommend changes in our tax laws. If the gov-ment accepts its recommendations it cannot defer implementing changes until all existing contracts, arrangements, undertakings and options have run their course.


Mr. Lambert:: That is a capital gains forecast.


Mitchell William Sharp: It is no such thing. I just wish to lay this down as a general proposition. This principle is put forward here so there will be no misunderstanding of the government's atitude, and I am sure the attitude of this house, toward this question.
I think that two of the suggestions made to me concerning this proposal should be acted
June 8. 1966

upon and I would like to propose a modification in the resolution now before the committee. As the resolution presently reads the existing formula for taxing benefits from stock options will remain unchanged with respect to benefits received under options granted before the beginning of 1965 and exercised before the end of 1966. It has been represented that it will be difficult in some cases to change plans or otherwise arrange for employees to exercise existing options before the end of this year. From the information that has been presented I think this is a valid point and I will propose an extension of this time limit. It has also been urged that if employees who were given options before
1965	are to be allowed a period of time in which to exercise these options, this privilege should also apply with respect to options granted in 1965 and in 1966 up to the date of the budget. I think this is also a reasonable suggestion. I shall therefore ask that the paragraph be amended by deleting the concluding three of four lines and substituting wording to provide that the new formula shall not apply if the right to acquire shares was given to the employee before March 30,
1966	and the benefit is received before January 1, 1968.
Where an employer modifies a plan to permit an option to be exercised some time before 1968, this change will not be regarded as a further benefit for tax purposes. Where an employee has subscribed for shares under a stock purchase plan before March 30, 1966, he shall be deemed to have been given the right to acquire shares before that date.
If the committee accepts this proposed modification the result will be that there will be no change in the method of taxing benefits received under stock options that were granted on or before budget date provided these are exercised during the next year and a half. This should provide reasonable time for those who wish to exercise outstanding options under the existing taxing formula. It will leave the present formula unchanged with respect to existing options for a period that should be adequate to study any recommendations that may be made in connection with benefits of this kind by the royal commission.
For any benefits received under options granted after March 29, 1966 the new formula proposed in the resolution will apply. I should emphasize, however, that no guarantee is being given that the new formula proposed for options granted after March 29, 1966 will
Income Tax Act
remain in effect indefinitely or until all these options have been exercised. This provision of the law, like any other, will always be subject to change by parliament as conditions warrant.
[DOT] (4:40 p.m.)
I should like to ask my colleague the Postmaster General if he would move the following amendment:
That paragraph 7 of the Income Tax Act resolution be amended by deleting therefrom the words
"but that this amendment shall not apply if the right to acquire shares was given to the employee before 1965 and the benefit is received before January 1, 1967."
and substituting therefor the words
"but that this amendment shall not apply if the right to acquire shares was given to the employee before March 30, 1966, and the benefit is received before January 1, 1968."
May I also go on and deal with the second of these proposed amendments.


The Chairman:: Order. I think it might be well if we were to deal with this amendment first.


Stanley Howard Knowles: Mr. Chairman, I was just wondering what we were doing procedurally. I certainly have no objection to this amendment being put at this point provided it is understood that for the purposes of discussion we are still on paragraph 1.


Herman Maxwell Batten: Order. Has there been any consent in the committee to deal with this resolution paragraph by paragraph?


Marcel Joseph Aimé Lambert: Yes, Mr. Chairman. Yesterday there was first of all a wide-ranging, general discussion on the whole resolution. Subsequently we dealt with the resolution paragraph by paragraph and if any hon. member had any observations to make on a particular paragraph they were to be made before the question was put on that paragraph. With regard to the Excise Tax Act resolution the minister introduced a couple of amendments at a similar stage. They happened to be of a technical nature so discussion was deferred until we reached the particular paragraphs. Amendments are being made in this instance but they are certainly not being carried. I think the procedure is quite clear.


Mitchell William Sharp: Mr. Chairman, I thank the hon. member for Edmonton West. I think this is perhaps the more convenient way of dealing with it. When we come to paragraph 7 the motion will be made to amend. May I go on

June 8, 1966
Income Tax Act
now to paragraph 14. This deals with the 5 per cent-


Herman Maxwell Batten: Order, please. I apologize for interrupting the minister but the Chair is in some difficulty here. There is only one resolution before the committee. The committee can deal with the resolution in one of two ways. It can deal with it as a single resolution or paragraph by paragraph. My problem now is to know what is the wish of the committee.


John George Diefenbaker: There is still further discussion on paragraph 1, Mr. Chairman. We have not concluded that discussion. I am not trying to impede the progress of this resolution, but the minister has placed before us the amendment he intends to move with regard to paragraph 7. It might be well to allow time for study of it, because it is a rather involved amendment, and permit a continuance of the general discussion if in so doing there will be no unfair interference with the minister's presentation.


Marcel Joseph Aimé Lambert: I think we are getting a little behind ourselves and becoming involved in a procedural difficulty in that if the minister is allowed to introduce the amendment there can still be comment on it in the general discussion. If the introduction is deferred until we come to the paragraph, then we are limited at that particular time. The sooner we see these amendments, the better.


John George Diefenbaker: We have seen them.


Marcel Joseph Aimé Lambert: The sooner we see them formally, the better. It has not created any confusion.


Herman Maxwell Batten: The hon. member for Edmonton West is quite correct. My only desire is to be sure that the Chair knows the wishes of the committee.


Mitchell William Sharp: Mr. Chairman, my understanding is that we are dealing with the whole of this resolution, and I thought it might help in the consideration of the resolution if there were formally before the committee at this stage the proposed amendments that I would like to have moved at an appropriate time. These are quite important to the discussion of the whole matter. I have no objection, of course, to what the Leader of the Opposition said, namely, to a general discussion upon any part of the resolution. I believe that is quite appropriate.
May I then deal with what I will propose as amendments to paragraph 14. This is the

paragraph dealing with the 5 per cent refundable tax on corporations. In the Budget speech I referred to the fact that this was a novel measure and I said I would welcome constructive suggestions concerning the application of the tax. I am pleased to report that I have received a number of comments and suggestions. These have been very helpful and they have all been examined with great care. Although I have not found it possible to accept all of these suggestions there are several modifications which I would like to recommend to the committee. I should add that these modifications are of a kind that would not normally be discussed at the resolution stage but would be left to be incorporated in the bill. However, since the resolution described this tax in conciderable detail and since there is widespread interest in these details, I think it would be preferable to make these changes known now. The simplest way to do this seems to be by amending the resolution. The changes proposed are all to paragraph 14. I have now distributed to hon. members the text of what I will have moved at an appropriate time.
It will be noted that the amendment is in three parts or paragraphs. Paragraph (a) proposes that three types of investment company, and also charitable trusts, be made exemp from the tax. The first kind of investment company referred to is an investment company described in section 69 of the Income Tax Act. The companies described in section 69 are often called investment funds or mutual funds. These companies or funds are widely used by individuals who seek to diversify their investments. These companies must operate in a certain way in order to qualify for the special provisions of section 69. For example, at least 95 per cent of their income must be from investments, 85 per cent of gross revenue must be from sources in Canada, and 85 per cent of income after taxes must be distributed each year. It is considered that this kind of company, which is merely a conduit for receiving investment income, should not be made subject to the special 5 per cent tax.
I might add that mutual investment funds operated through a trust instead of through a corporation will not have any amount subject to the tax unless they receive rents or conduct a business. Interest and dividends received by such a trust would not be considered business income.
The second kind of investment company referred to is a non-resident owned invest-
June 8, 1966

ment company, usually called by my officials, to my great confusion, an NRO. These companies are established by non-residents to hold investments in Canada. If they conform with the rules found in section 70 of the act they pay a special rate of tax of 15 per cent which is, in effect, a prepayment of the non-resident withholding tax. These companies are also merely conduits for receiving investment income. Moreover, they will receive dividends from other Canadian companies which have borne the special 5 per cent tax. It seems reasonable that this kind of company should not be subject to the 5 per cent tax.
The third kind of investment company referred to is also wholly owned by non-residents. These are companies which have little or no property in Canada and which do not invest in Canada. They are companies which collect dividends and interest from various parts of the world and forward this investment income to their non-resident shareholders. It would not be in keeping with the purposes of the 5 per cent tax to include these companies.
The charitable trusts which this part of the amendment would exempt are described in section 62 (1) (g) of the Income Tax Act. These trusts must meet certain requirements, including one which prohibits them from carrying on a business. Since charitable corporations described in this section of the act are to be exempt it is considered reasonable that charitable trusts, which are very similar, should also be exempt.
[DOT] (4:50 p.m.)
Paragraph (b) of the amendment which has been placed before the committee would make two changes. First, it provides that amounts that must be included in the computation of the base for tax by corporations shall not include capital cost allowances deducted in respect of property described in class 12 of schedule B to the income tax regulations. The property referred to is a range of comparatively short-life items such as tableware, a die, jig or pattern, medical or dental instruments costing under $100, uniforms, linen and the cutting or shaping parts of machines. These items are depreciable at a rate of 100 per cent and the amounts deducted under the heading of capital cost allowances are more in the nature of current operating expenses.
Second, this paragraph places a ceiling upon the amount that must be added to the
Income Tax Act
base for tax on account of capital cost allowances deducted by the taxpayer. This ceiling is 50 per cent of the taxpayer's gross revenue. This ceiling will be of interest to those companies for which deductions on account of capital cost allowances are a very high proportion of their gross revenue, for example, certain car rental companies, many of which made representations to me and may have done to some hon. members of the committee.
Paragraph (c) of the amendment would provide for trusts the same two changes concerning capital cost allowances that I have just described for corporations. In this case the ceiling on the amount of capital cost allowances added to the base for tax is 50 per cent of that part of the gross revenue of a trust that is included in computing its business or rental income.
Mr. Chairman, I think that these changes will remove some unintended features and improve the operation of the 5 per cent tax and I should therefore like to read into the record the amendment which I would like to have moved at an appropriate time by one of my colleagues.
The amendment reads as follows:
That paragraph 14 of the Income Tax Act resolution be amended as follows:
(a)	by deleting therefrom all the words that precede subparagraph (a) thereof and by substituting therefor the following words:
"That with respect to each taxation year included in whole or in part in the period commencing May 1, 1966, and ending October 31, 1967, a special refundable tax at the rate of 5% shall be payable by all corporations that are not exempt from tax under the said act by virtue of section 62 thereof, other than
1.	investment companies described in section 69 thereof,
2.	non-resident-owned investment corporations described in section 70 thereof, and
3.	corporations more than 95% of the property of each of which throughout the taxation year was situated outside Canada or consisted of shares in or obligations of corporations or other persons not resident in Canada, the aggregate value of any shares in or obligations of corporations or other persons resident in Canada or carrying on business in Canada acquired by each of which in the taxation year did not exceed 5% of its income for the year, and all of the shares of each of which were throughout the taxation year owned by non-residents of Canada, and by all trusts (other than trusts arising on death and trusts described in paragraph (g) of subsection (1) of section 62 of the said act) calculated, in the case of a corporation, on a tax base (hereinafter called the corporate tax base) comprising the aggregate of"
(b)	by adding to subparagraph (b) thereof the following words:
"(other than amounts deducted in respect of property described in class 12 of Schedule B to

June 8. 1966
Income Tax Act
the income tax regulations) not in excess ol an amount equal to 50 per cent of its gross revenue for
the taxation year,"
(c)	by deleting the word "and" at the end of paragraph (n) thereof and by adding thereto the following words:
"(other than amounts deducted in respect of property described in class 12 of Schedule B to the income tax regulations) not in excess of an amount equal to 50% of that part of its gross revenue included in computing the amounts specified in subparagraphs (1) and (ml, and".
Mr. Chairman, I regret the complexity of these provisions but their intent is somewhat simpler than their expression in the law.


John George Diefenbaker: Mr. Chairman, I will not speak at length at this late hour. I have listened to the speeches made by the hon. member for Simcoe East and the hon. member for Bow River. They placed before the house the thinking of the average Canadian. The fabulous increases in expenditure by this government after its promises of economy are becoming more and more apparent in the degree to which this government has gone on a spending spree.
I will not go into other details this afternoon except to refer to one example which is a perfect commentary on the wastefulness of this government. I am referring to the undertaking, which is now apparently in the embryonic stage, of building in the city of Ottawa a $100 million pentagon building which, by the time it is completed, having regard to the way costs are going up, will cost the Canadian people $125 million to $150 million. There can be no excuse for this expenditure. Certainly improvements can be made in the housing for those engaged in defence and in the defence department but this is an example of the degree to which this government has lost all sense of proportion. Tax, tax, and spend, spend.
The whole concept consists of a tremendous venture. Someone suggested today it will be built of white stone. If it is, it may well earn the appellation of "Canada's white elephant".
I cannot conceive, with taxes being raised as they are now being raised by this government to being the highest level in peacetime history and at a time of the greatest cost of living in peace or war, that a government should engage in this type of self-glorification. Originally it was intended that the building should cost $35 million.


Mitchell William Sharp: Mr. Chairman, may I rise on a question of privilege? Yesterday when the same statement was made about the cost of the national defence building my colleague, the Minister of National Defence, arose on a
[Mr. Sharp.)
question of privilege, denied the figures and suggested that the actual estimate was approximately $30 million. I think this should be put on the record.


John George Diefenbaker: I appreciate that. I read Hansard and I find that the denial yesterday in no way meets the situation. I will point out what the undertaking is. It is to be a 36-storey, 450-foot edifice with twin side towers and will dominate the Ottawa skyline.


An hon. Member:: Shame.


John George Diefenbaker: What we want is somebody to dominate the thinking of this government and convince it that this type of expenditure, whether it is $30 million or $50 million, is not justified. Across this nation there are people who find it difficult to carry on in the face of the increasing cost of living in respect of which no action has been taken. Yet the image created by this government is that no matter how ridiculous the plan may be the Canadian people shall continue to be taxed in order to meet its grandiose conceptions. An example of this attitude of mind was shown by the Secretary of State when she flew a kite to ascertain whether or not Canadians were sufficiently artistically-minded to accept paying $6 million for a painting to be placed in the national gallery. Whether it is $35 million or $50 million or whatever the amount of expenditure for the building in question may be, this is no time for the glorification of the minister of defence by such an expenditure. It is now five o'clock. I will have more to say about this subject tomorrow.


Herman Maxwell Batten: It being five o'clock the house will proceed to the consideration of private members' business.
[DOT] (5:00 p.m.)


CRIMINAL INJURIES COMPENSATION BOARD
Ralph Bronson Cowan: That, in the opinion of this house, the government should consider the expediency of introducing legislation for the creation of a criminal injuries compensation board to hear the pleas of persons who have suffered permanent injury or disability as the victims of crime and award compensation to such persons or their dependants as would seem fair in the circumstances, and wherever possible to do so, to impose payment of compensation by criminals to those they have injured.
He said: Mr. Speaker, this is private members' hour and as the word "hour" indicates that is the length of time that will be devoted
June 8, 1966

to this question. I do not intend to speak at length because I should like to see this motion come to a vote today so that the cabinet can be advised of the feeling of the House of Commons on the matter enunciated in the notice of motion. As a private member it is impossible for me to introduce a bill involving the expenditure of public moneys.
The only way to draw the cabinet's attention to the fact that we are desirous of seeing a compensation fund established so that the victims of criminals can be compensated for injuries that they or their dependants suffer is to introduce a notice of motion advising the cabinet that they should consider the expediency of introducing legislation for the creation of a criminal injuries compensation board. This notice of motion was entered on the order paper on January 20, two days after the house met in January of this year. Five days of the time of this house were devoted to a discussion of the abolition of capital punishment, three in March and two in April. Those five days can be described as days devoted to seeking an improvement in the lot of the criminal element in the nation. Only a minimum of time was spent in discussing the fate of the victims of murderers.
This motion has been brought forward by the retentionists, as they are called, in order to show that there are people in this nation who are sympathetic to the victims of murders, homicides and manslaughters and are sympathetic to the dependants and relatives of those victims. The way the state rushes to provide psychiatrists to examine everyone accused of murder and rushes to see that they are given most comfortable surroundings while awaiting trial, it does seem that the state is willing to spend money on behalf of the criminal but has not given any thought to the victim. I am sorry to state that I have some personal knowledge of a number of murders in the city of Toronto where I was not only connected with a large newspaper but was a member of a large congregation. The fact that the victim of murder is not given any consideration by the state is very upsetting to millions of people in the Dominion of Canada.
I am thinking of a little seven year old girl in our Sunday school who was murdered one Tuesday evening by a man in his early twenties. He has been ajudged insane. He is going to spend the rest of his life in an asylum at the expense of the Canadian taxpayers, having three meals a day, comfortable quarters and a comfortable bed. No doubt
Criminal Injuries Compensation Board within eight or ten years the parole board will find that his sanity has been restored and he will be released into society after many thousands of dollars have been spent in his behalf. What has the state done for the little seven year old girl? I happen to know that the public school which the little doll attended started a fund to aid the family at the time of their distress and collected a total of $191. This included $75 from Victoria Presbyterian Church where the little girl attended Sunday school. Other people went to work and collected a fund on behalf of the family. I am happy to state that many people sent in contributions, having heard on the radio or read in the newspapers about the dastardly crime. A few thousand dollars were contributed to the relief of the family.
This was a voluntary effort. Nothing was contributed by the state in any manner, shape or form. The state was far too busy providing a defence in the way of psychiatric examination and all that for the accused; they had no time for the little girl. Hon. members may recall the two policemen who were shot in Montreal. Of course, their relatives would be eligible for compensation from the policemen's compensation fund. We had a case of a policeman in Toronto, McQuillan, who was shot and killed by a man about 20 years ago. He also was a member of Victoria Presbyterian Church. In this case the policeman's family was able to draw compensation from the policemen's injury and death fund.
What about those people who are not policemen and who are killed? What about their families? I do not need to give a long recitation about the families where murders have been committed and the breadwinner has been lost. In many cases the widow has to go to work to support the children because no compensation is given for the loss of the breadwinner. In some provinces she immediately becomes eligible for mother's allowance, but no particular compensation is given because the breadwinner has been shot down in cold blood.
It is ridiculous to think of the time and energy that the state spends looking after the best interests of the criminal and seeing that he gets a fair trial. If he cannot pay for a lawyer himself, then the state provides a lawyer. In all cases the expenses are paid by the state, by you and by me, by all of us including the family of the victim of the murder because they are taxpayers too.
We have the case of Trans-Canada Air Lines
6162	COMMONS
Criminal Injuries Compensation Board -if my French speaking friends do not like that name then I will say Air Canada so they will understand what I am talking about- which is an arm of the government We have to pay the deficits of that air line. When they have a crash, as they did at Ste. Therese de Blainville or as they did at Armstrong about 20 years ago or when a plane disappeared west of Vancouver and has never been seen since, compensation is paid to the families of the victims of these air crashes. The airplane can be considered an arm of the government. However, there is no compensation for the victims of murderers.
Let us consider the case of the Canadian National Railways, which is an arm of the government or a crown corporation, if you wish. If there are deficits the Canadian taxpayer has to pay them. If people are killed as the result of negligence on the part of C.N.R. employees, by being run down at railroad crossings or as passengers on trains who are killed as a result of the negligent operation of the train, they can collect from the Canadian National Railways.
[DOT] (5:10 p.m.)
I am glad to say that in most provinces today there are workmen's compensation funds. If a workman is killed in the course of his duties compensation is paid to his family out of provincial funds so that the family will not immediately be placed on welfare and have to live on handouts from people filled with compassion. The state looks after families whose breadwinner is killed in the course of his work through the medium of the workmen's compensation fund.
As another example, if a person is run down by a motor car on the highways of the nation his family can sue the person who caused his death or injury. If they cannot collect from the person who caused his death or injury because that person has no insurance or no means, then resort may be had to the unsatisfied judgment fund which is maintained by the provincial governments for such cases. If a person is killed by a car his family has a means of redress; if the same person is killed by a murderer no compensation from the state is provided his family.
In discussing this matter only yesterday with the hon. member for Parry Sound-Muskoka (Mr. Aiken) we were smiling over the fact that, under the dog tax and sheep protection act of the province of Ontario, if a farmer loses sheep because dogs get into his pen and destroy them that farmer can

DEBATES	June 8. 1966
collect compensation for the loss of his sheep. But if the hired hand murders the farmer's daughter, as happened recently at Dublin, Ontario, which is between Stratford and Goderich, then the farmer has no claim unless he wants to sue the murderer's family. But who wants the families of victims such as this to have to go to court and prolong the agony associated with a murder in their family?
By the way, Mr. Speaker, the Dublin case is interesting in view of all the hullabaloo and uproar raised by the Truscott matter. The Truscott affair occurred at Clinton. The murder of the farmer's daughter by the former hired hand occurred at Dublin, Ontario, which is only 10 or 15 miles from Clinton. There is hardly anybody who is seeking to abolish capital punishment who cares about Lynne Harper, the girl murdered at Clinton, or about the farmers' daughter shot dead at Dublin.
If a car leaves the highway and crashes through a fence and kills a cow or a pig, the farmer can collect compensation from the driver if he goes to court about the matter. But whoever heard of a father, mother, wife, brother or sister collecting compensation through the courts because someone near and dear to them had been killed by a murderer?
I do not wish to talk at length on this matter. I believe the subject matter in itself carries conviction. I should like to see the House of Commons support this motion so that the cabinet will know that the people of Canada wish them to establish such a compensation fund to relieve the families of murdered victims, or victims of other crimes in the future. I sincerely trust that this matter will come to a vote today.


Mr. Enns:: Would the hon. member permit a question? In opening his remarks he mentioned that this was a separate motion from that presented by the abolitionists. In other words, it was promoted by the retentionists. Does he expect the abolitionists to endorse the meaning and purport of his motion?


Mr. Deputy Speaker:: Order. This question has reference to a proceeding which has already been before the house.


Ralph Bronson Cowan: Yes.


Mr. F. J. Bigg (Athabasca):: Mr. Speaker, I think this is a most challenging motion which has been brought before the house by the hon. member. It has always seemed strange to me, both while I served in the Royal
June 8, 1966

Canadian Mounted Police and as an ex-member of that force, that in the division between civil law and criminal law a man who is responsible for negligence involving monetary assessment is not responsible in cases of murder, deliberate assault or, as was often the case, grievous bodily harm. In the case of murder, of course, his act ended in the death of the breadwinner of a family.
I think that this oversight, which is historical and of long standing, is probably due to the fact that at one time felons who were guilty of such crimes as murder, grievous assault, robbery and certain other crimes against the state forfeited all of their property automatically to the crown. In those days the poor, were not looked after except through the largesse of the king. Naturally there was no point in fining the criminal because he had no property anyway. So the crown undertook responsibility for looking after victims, if indeed they were looked after at all.
I think there is a great deal of merit in the idea that compensation should be paid to people who have suffered personal injury or have lost money due to felonies committed against them. I am not sure that the hon. member has the right answer when he says that we should set up another board. It seems to me that with a fairly simple section inserted in our criminal law we could give a judge the power to assess against a criminal's estate the full amount necessary to compensate the victim or victims of the offence to the extent that the estate was able to pay. Some action of that kind I feel is necessary.
There is another way to bring about the objective of the motion which the house might like to consider. I think that if criminals are not hanged-apparently they are not; most of them are kept in jail for a certain length of time-they should be paid for work they do in the penitentiary and should be assessed the full amount of the monetary consequences of their crime by way of compensation. Some people do not mind going to jail. Jails today are fairly comfortable compared with the medieval institutions which used to exist. There is television, the men are given a ration of cigarettes, some of them work in the library and others in the flower garden. Their feelings are always taken into consideration and they can have a pretty decent time in jail today. I think that we should strike a happy medium between the punitive side of imprisonment and the justice
Criminal Injuries Compensation Board aspect. Certainly I do not think that all of the consideration should be given to the criminal.
I agree with the hon. member that the person who is the object of the crime should be considered first. The person who has been hurt should at least be considered equally with the person who has committed the wrong. I think it would be more than just to reduce penalties to the lowest common denominator, good old money, something for which every human being I have met has considerable respect.
You would reach a criminal's conscience psychologically provided he knew that if he committed a crime and was caught and brought to justice he would not only spend a few months in a comfortable jail watching television and planning his next crime but would also go to work, labour productively, even if only on the good old rock pile, and be paid $1.25 an hour, the minimum federal wage. He would not get rich because I would have him pay back to society every cent he owed, including the amount which the judge considered he owed the people he had wronged.
There would be nothing unfair about this method. We would not have to say that we thought he had done a day's work. We are living in the age of electronic computers, and he would be able to push a loaded wheelbarrow over an electronic scale and the value of the number of tons of dirt he had shovelled or the number of tons of rock he had crushed would be credited to his account. Before he left the penal institution he would be forced to pay in full the exact amount involved in his crime. Going back to the good old Gilbert and Sullivan solution to the problem I say, let the punishment fit the crime.
[DOT] (5:20 p.m.)
Most crimes boil down to dollars and cents. Robberies in which violence is involved stem from greed. I do not think there could be anything better psychologically-psychology is as old as the jungle-than making criminals understand that when they break into an old widow's home and steal the savings she has put away in her tea pot they will have to pay. If you run over a widow with a motor car on the highway the civil law of the land will make you pay damages. If you have a flat tire and your car skids into her the civil court will still hold you responsible for her damages. Surely if the damages to such a woman are intentional those damages ought to be made good. The court ought to allow her a good holiday in Bermuda.
June 8, 1966
6164	COMMONS
Criminal Injuries Compensation Board
In Alberta there was a case where a couple of men sawed off an old man's legs with a hacksaw. They picked up $20. If the law were amended as I should like to see it amended, that would be the most expensive fifteen minutes fun such men would ever have. The old victim ought to be given two years in Bermuda or any other island of his choice. I expect he would like to get away from Alberta in the winter. The criminals would pay for the plane fare and the holiday. There would be no tiger in the tank handout because the holiday would be awarded as a matter of right.
The criminal would not decide how many tons of dirt he would have to move because this would be decided for him by the electronic wheelbarrow. Some of these young fellows today play it hard because we play it soft. They might say they were not going to work, but I have some news for them. Everything would be voluntary. They would have to pay for their board and go to a commissariat as we had to do in the army. If you wanted a beer for 2d you got a beer for 2d. If you wanted a better beer you had to pay more. If these young men wanted a T-bone steak they would have to pay $2.75 for it. To earn that much they would have to wheel so many tons of sand or dirt over the electronic scale. But if they do not want to work there is no need for them to starve. They can always go to the cookhouse and get a bowl of lukewarm mush flavoured with iodine and all sorts of vitamins to keep a man alive, which would be very distasteful. The bones of such a man who has eaten the mush would meet the full approval of the medical profession because all the necessary vitamins would be present. If the man works he gets $1.25 an hour. If he does not work he gets nothing. Should the man decide to work, he should be given a decent bed with white sheets and pushbutton television at two bits an hour. On the other hand, if he decides not to work he sleeps on a straw tick. We had those in the army and they were fine. We did not see anything wrong with them. They were called straw palliasses. They are nice and soft. You do not get lumbago from them because they keep your back straight. If a man slept on one he would wait until the temperature got to 49 degrees Fahrenheit, when he would be shivering just a little bit, before getting a blanket. If he wanted to return to work he would get the $1.25 an hour and the nice, comfortable bed.

I have only had 23 years experience with these people and I know that they appreciate justice. They do not like unpleasant people who do not treat them nicely. They appreciate justice and they could not argue with the computer. Their wages would be paid in direct proportion to the amount of dirt they moved. I believe that if we set up such a camp the criminal population, especially the repeaters in our penal institutions, would be reduced to zero. These people cannot stand justice.
I think it is high time we took a new look at criminology, penology and the rest of the "ologies", and came back to good old-fashioned common sense. It is no use condemning people to slavery in jail where they do not get paid for their work. It would be much better if criminals had to work to pay for their crimes.
I should like this matter to come to a vote. I say to the members of the house that we should give it careful consideration. Now is the time to act if anything is to be done. Were this resolution adopted it would not be necessary to build the $8 million, $20 million or $50 million penitentiaries because criminals-there would be no repeaters-would take care to stay out of jail. Criminals must learn that they must pay for their crimes, and I do not mean in any spiritual sense. They ought to pay in dollars and cents earned by working hard with their hands. The callouses will be there and the electronic machines will see that they do enough work. The computer will see that the mayor's son and the poor boy from the other side of the tracks are treated exactly alike. Criminals cannot stand such treatment. You see, they want justice. There will not be any repeaters.


Mr, Andrew Brewin (Greenwood):: Mr. Speaker, I think this resolution should be commended to the house for approval. In saying this I certainly do not want to associate myself with some of the remarks made by the hon. member who introduced it.
The proposal, however, to set up a criminal compensation fund for the victims of crime or to set up a criminal injuries compensation board is a sensible, progressive-minded and intelligent one and it should be given full consideration. I should be remiss in my duty if I did not say to the house that to arrive at this conclusion one certainly does not have to support the philosophy pronounced by the hon. member for York-Humber (Mr. Cowan). Indeed, I hasten to say that I repudiate his

June 8. 1966
philosophy. So far as I understand it, I find it totally repugnant. You do not have to be a retentionist to support this resolution. I know the hon. member's views on this matter, and he is entitled to his views which he expresses with vigour. I respect him for that.
I and many people who believe that the proposal in this resolution is excellent totally disagree with the punitive philosophy which seems to be behind some of the remarks made by the hon. member and which I thought crept into the remarks made by the hon. member for Athabasca (Mr. Bigg). So far as I am concerned, and I think I speak for some others in this house and certainly for those in this party, I am concerned about the criminal, although some people may call it mollycoddling. We know that the so-called criminal is often a victim of circumstances. He is a human being whose problems have to be studied. We do not in the slightest apologize for supporting those aspects of criminal law which in a modern and enlightened age are remedial rather than punitive. We do not dispute the necessity for punishment in the interests of society. The reaction of a barbarous era which fortunately has passed to the modern concept of criminal treatment is to term such treatment "mollycoddling". We want to strike at the roots of crime.
The house may well support this resolution. Our reason for supporting it is that it proposes a social measure of some importance. The modern outlook is that if any member of society is the victim of circumstance, all society should be prepared to bear the burden. The victims of crime are, in effect, victims of society, not only of the individual criminal. This being so, it is a reasonable, sound and forward-looking proposal which the hon. member has made that there should be a fund of the sort suggested.
[DOT] (5:30 p.m.)
The hon. member for Broadview (Mr. Gilbert), speaking on March 24 in the debate on capital punishment as reported in Hansard at pages 3148 and following, made reference to this very matter and put forward the type of proposal which the hon. member for York Humber has placed before the house. The first part of the hon. member's speech was a vigorous and to my mind moving argument for the abolition of capital punishment based on the hon. member's understanding of the implications of the Christian faith. I would be the first to admit that different implications could be drawn by different people. But that was the basis of his contribution.
Criminal Injuries Compensation Board


Mr. Deputy Speaker:: Order. Is the hon. member not now referring to a debate which has taken place in this house during the present session?
Mr. B re win: I was about to call the attention of the house to the fact that this particular matter was dealt with by my hon. friend as reported at page 3150 of Hansard where it is made clear that precisely the same proposal was brought up. I adopt the language used at that time. It was pointed out that in England a white paper on compensation for victims of crimes of violence was approved by way of motion on May 5, 1964, by the House of Commons and on May 7 by the House of Lords. A criminal inquiries compensation board was directed to be set up to compensate victims of criminal violence including the spouse or dependants of a person fatally injured. This board operates in much the same manner as does our workmen's compensation board and in the case of a fatal injury any compensation awarded to the spouse or dependants is assessed on the same principles as a claim under the Fatal Accidents Act, except for a restriction in the calculation of the loss of income of the deceased. I believe that New Zealand and California have introduced similar legislation. I agree that Canadians are entitled to ask for precisely similar legislation to be approved here.
There is one aspect of the resolution on which I should like to comment. The last part says that wherever it is possible to do so payment of compensation to those they have injured should be imposed on criminals. I would point out that this is probably a matter for civil law and that at the present time the law provides that if a person injures another by a violent criminal act-and I have no doubt murder would fall into this category under the Fatal Accidents Act-there is a right of civil action for damages against the criminal. The trouble is that most criminals, particularly when they have been executed by due process of law, which happens to a few of them, are not in a good position to pay damages. This is precisely the reason we should set up a criminal injuries compensation board as is proposed in the excellent suggestion before us.
This last part of the proposal is, I believe, unnecessary; it might even be unconstitutional. Nor do I think it would be particularly effective. Certainly if it was designed as extra punishment for those who commit crimes it would in my view be inadequate.

June 8. 1966
6166	COMMONS
Criminal Injuries Compensation Board
However, the resolution deals mainly with the victims of criminals and is a commendable means of assisting them. If it comes to a vote I will certainly support it. It seems to me the suggestion is an excellent one and that it ought to be referred to the committee of the house which has been set up to look into matters involving criminal justice. I do not want to see this resolution die without action being taken.
I had hoped that legislation of this sort would emerge from the Department of Justice itself. But legislation emanating from the Department of Justice to amend and improve the law seems to be non-existent as far as I can make out. I believe the minister has talked about setting up within the department a branch which would look into the reform of the law, but nothing has happened yet. Private members who as an alternative introduce motions of this sort ought to be commended. However, there is a measure of futility involved unless we carry through. For this reason I urge that this resolution be referred to the committee on justice and legal affairs to enable further study to be made and action taken.


Mr. Forest:: Would the hon. member permit a question? Would he not agree, as someone who is a lawyer and constitutional expert, that the setting up of such a commission would be a provincial responsibility?


Francis Andrew Brewin: I have thought about that question. The offhand views of lawyers are not as valuable as they would be if they were paid adequate fees to investigate these complicated issues. But I would answer the hon. member by saying that I believe the setting up of such a board would fall within the powers of the federal parliament to legislate in respect of criminal law. This is something which would have to be submitted for legal opinion before proceeding with legislation. But I believe the subject falls within the competence of this parliament.


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, first I want to assure the hon. member for York-Humber (Mr. Cowan) that I do not intend to speak long enough to talk out his motion. So far as I am concerned there will be an opportunity for the sense of the house to be taken on the notice of motion he has brought forward for discussion.
I agree with the intent of the motion now under consideration, partly for the reasons which the hon. member who introduced it has


already advanced. I cannot, however, subscribe to his analogy between the justice of providing compensation for the victims of crime and providing facilities for seeing that justice is done to an accused person. I do not see the validity of this analogy. I am not suggesting that the hon. member put this forward as the basis of his whole argument though in fact a large part of his time was spent in making this comparison.
[DOT] (5:40 p.m.)
I have no objection to the state providing facilities to ensure that all reasonable action is taken to see that justice is done to the accused, because until a conviction is handed down we cannot be so presumptuous as to say that the accused is guilty. We may reach such a decision in our minds based on evidence we may have seen, but it is up to the courts to decide whether an accused is guilty and until that decision is handed down we cannot withdraw any of the facilities or money necessary to see that all reasonable action is taken in order that justice may be done to an accused.
Having said that it is also well to say that I do not see any reason why support of this motion should be equated with people who may or may not have supported another measure which was dealt with by the house previously. I believe that is also a false argument so far as support for the motion is concerned. The motion itself is far more adequate to meet the need than the argument advanced by the hon. member who moved it. He based his whole argument on the need for compensation to victims of murder and I do not believe it should be confined to that one kind of crime.
The motion itself refers to victims of crime and I suggest that embraces crimes other than murder. There is need for such a criminal injuries compensation board to look into the matter of compensation for victims of rape, assault and all other crimes of violence.
There may be a right of action under civil law, as suggested by the hon. member for Greenwood (Mr. Brewin), so that victims can take an action against a criminal but this is not satisfactory. In most cases the criminals have no funds and it would be an exercise in futility unless there were an unsatisfied judgment fund.
In my province there is such a fund to cover the victims of automobile accidents and most of the money is provided through an extra charge when a licence is purchased.
June 8. 1966	COMMONS
There would be no similar way to set up such a fund to compensate victims of crime and so it would be necessary for the state to provide the funds.
Then there is the question of administration. I do not know if the hon. member intends that this fund should be operated with the same legal processes as unsatisfied judgment funds. In Alberta there is no way for a victim to get compensation out of the fund unless he first secures an unsatisfied judgment. All the defendant's assets and insurance must first be realized and then the balance is paid from the unsatisfied judgment fund.
References have been made to people being able to collect substantial amounts for slipping on a sidewalk, being caught in a door or injured in an automobile accident in which there was no deliberate criminal intent. The law provides for the collection of such damages but makes no such provision when there is both deliberate and criminal intent.
I have before me some newspaper clippings dealing with people who have been the victims of crime but I shall not take the time to read them into the record. I shall just indicate that there are many cases in which there have been severe miscarriages of justice because the law does not contain any means of providing adequate compensation.


Mr. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, I am rising to support the motion and I do not intend to talk it out. During the debate on capital punishment, when I both spoke and voted in favour of abolition, I and others were accused of being more sympathetic to the criminal than to the victim. This was never so. Many of us thought that the abolition of capital punishment would be a step forward in building a more humane and civilized society and would promote an atmosphere in which there would be less violence and crime.
I do not believe that those hon. members who supported abolition were more concerned about the criminal. We were equally concerned about the victim, and right now I give my full support to this motion. As has been mentioned by other hon. members, it seeks to provide compensation for the victims of all crimes, not just murder, but I note that it refers to people who have suffered permanent injury. I would support giving compensation to people who have suffered any type of injury, whether permanent or not, as the result of criminal activity.
DEBATES	6167
Criminal Injuries Compensation Board
I would like to examine the reasons for supporting such a motion. First, I believe the state should compensate the victims of crime because the state did not adequately protect the citizen from the crime. When citizens gave up their right to carry guns to protect themselves they placed their trust in the state to protect them. It is the state's duty to provide adequate police forces and to have control of arms and other dangerous objects, including automobiles. If the state does not do this and the citizen is injured, then the state must bear the consequences.
Second, if the state does not take sufficient measures to prevent criminal behaviour it should also bear the consequences. The state should take measures to see that certain conditions which breed crime are eliminated, conditions such as slums, inadequate housing, inadequate recreation, inadequate education, inadequate opportunities for employment and inadequate family assistance. If the state does not take measures to eliminate these things then the state should compensate the victims of crime to which these things give rise.
Third, and most important, all our Canadian provinces have civil laws which allow the person injured to sue for injuries. He can sue the tort feasor or person who causes the injury, but this is an illusory right of action for the person who is injured in a crime, first, because the criminal is not always caught, second, if he is caught he is often insolvent or has hidden his assets before being caught and, third, if he is caught and convicted he is sent to prison and cannot go to work to pay off the compensation due to the victim.
[DOT] (5:50 p.m.)
Compensation boards of this nature are not entirely new to Canada and its provinces. We already have boards and funds, such as the unsatisfied judgment fund, to provide compensation to victims of auto accidents. We have compensation for the families of victims of war and victims of industrial accidents. Other countries already have accepted this idea and have passed legislation to set up such boards. In 1964 New Zealand passed an act to provide compensation for victims of crimes of violence. They established a crimes compensation tribunal to grant expenses incurred as a result of the crime and compensation for any pecuniary loss and for pain and suffering.
In Great Britain they have followed the example of New Zealand. There are several
6168	COMMONS
Criminal Injuries Compensation Board interesting studies which have been proposed. These studies have been referred to by hon. members. One of them is a study published in 1962 by the Conservative party's advisory committee on policy entitled "Victims of Violence". The second was published by the British section of the International Commission of Jurists in their magazine "Justice". It is entitled "Compensation for Victims of Crimes of Violence". Both of these recommended a board to provide such compensation.
Finally, a very interesting book was published in 1960 by Dr. Stephen Schafer at the University of Maryland entitled "Restitution to Victims of Violence". In this book Dr. Schafer makes a comparative study of the laws on this subject in 29 countries. At the time his book was written only Cuba and Switzerland had such funds and boards. He did point out that several countries had a system whereby the criminal could not be granted a suspended sentence or probation unless he guaranteed that the victim of his crime would be compensated. With regard to financing the compensation fund the suggestion found in this book is that the fund should be financed primarily from fines that the state collects in respect of crimes of all types; in other words, the moneys from these fines should go into the fund to pay compensation to the victims injured in crimes. It also is suggested that the board in fact should try to collect from the criminal money or property he may have to help pay the compensation.
I should like to urge the passage of this motion. Such action has been taken in many other countries and I think it would fit into our criminal justice here in Canada.


Yves Forest: Mr. Speaker, I regret that in view of the lateness of the hour, it should be impossible to discuss this motion at length. Knowing the determination of the mover, I am sure it will come back later and that I shall have the opportunity to discuss it at greater length. My congratulations to the mover of this motion. It calls public attention to the often difficult position in which are placed the victims of certain crimes, not necessarily of murder.
The hon. member spoke mostly of murder victims, but in considering his motion, I believe that it could equally apply to all damages that may result from all types of crimes. Clearly, this is a most desirable social measure which can quite properly be added

DEBATES	June 8, 1966
to our social legislation which is improving daily, and that is a very good thing. However, Mr. Speaker, it was pointed out that the victims have certain legal claims against those responsible, but such claims are often most difficult to pursue, because the responsible parties are not always known and most of the time obviously, criminals are not very solvent people and the claims or judgments which could be secured against them would not be worth very much.
Mr. Speaker, my main remark, which I shall not have the time to develop, is that, to my mind, a provincial jurisdiction is involved here, it is a question of property, of civil law. Claims arising out of physical wounds are clearly under provincial jurisdiction, it seems to me. It would be up to the provinces to establish commissions to compensate the victims of accidents and crimes who could not obtain compensation. This would surely be a most beneficial piece of social legislation, meeting a definite need, because as noted, victims of labour accidents are being compensated, in most provinces, victims of automobile accidents who could not collect on judgments, because those responsible for the accidents were insolvent, can recover a significant amount of damages, and it should be quite proper and equitable for innocent victims of crimes also to obtain compensation from the state for their losses. Mr. Speaker, it is an excellent suggestion and I hope the authorities concerned will implement it.
Mr. Speaker, may I call it six o'clock?


John B. Stewart: Mr. Speaker, this resolution undoubtedly is an interesting one; it certainly has excited the attention of hon. members of the house. But what I think is most distressing is the fact that almost everyone who has spoken on this resolution has interpreted it in a different way. Consequently, I am doubtful about what the resolution means. One view was put forward by the hon. member for Athabasca (Mr. Bigg) and another interpretation was put forward by the hon. member for Greenwood (Mr. Brewin). I do not see how it can be proposed that the house should adopt a resolution when those who support it cannot agree on the meaning of the resolution. Mr. Speaker, may I call it six o'clock?


Mr. Deputy Speaker:: The hour for the consideration of private members' business has expired.
June 8, 1966



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, tomorrow we propose to submit for consideration the income tax resolution, then the training allowances bill, the bill relating to the setting up of the performing arts corporation, the resolution having to do with film development, and then the estimates. Perhaps I should indicate the order in which the estimates would be called. We would propose to call first the estimates of the Department of Citizenship and Immigration, then the Department of Veterans Affairs, then Legislation, then the Privy Council, the Unemployment Insurance Commission, then the Department of Labour and the Department of Public Works. In the event that the estimates of the Department of Fisheries should be returned from the committee tomorrow I would reserve the right to call them.


Gordon Minto Churchill: Between nine thirty and ten o'clock?


George James McIlraith: Yes, or perhaps ahead of the Department of Labour and the Department of Public Works. I might indicate some business for Friday. Our present intention is to submit as the first item of business the legislation setting up the Company of Young Canadians. We would then go on with the student loans legislation and the Bank of Canada resolution, followed by the estimates. On Monday
Business of the House
we expect to start with the resolution on the Canada Assistance Plan followed by the resolution on the health resources fund.
[DOT] (6:00 p.m.)


Mr. Monieiih:: Will we go on with these items no matter what the stage of discussions is on Friday?


George James McIlraith: I reserve the right to change the order of business for Friday or Monday but I hope we can follow the plan of starting with the Canada Assistance Plan on Monday. Similarly we will start with the discussion of the Company of Young Canadians on Friday.


Mr. Rapp:: Mr. Speaker, will we be also considering the Central Mortgage and Housing Corporation which comes under the Department of Labour?


George James McIlraith: I do not know about that point at the moment. I believe there was some discussion on it when those estimates were up previously.


Stanley Howard Knowles: There was an understanding when we were in committee, and I am sure it appears in Hansard, that we would revert to item No. 1 of the Department of Labour for the purpose of dealing with housing when we had finished discussion of that department.


[Stage Direction]
It being four minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, June 9, 1966