1966-09-08

EXTERNAL AFFAIRS


Mr. D. S. Macdonald (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, the Department of External Affairs has recently received a report of an investigation by the international commission for supervision and control in Laos of an attack on Dong Hene by North Vietnamese troops. For the convenience and interest of hon. members I would like to table two copies of this report.


Mr. Speaker:: Has the Parliamentary Secretary to the Secretary of State for External Affairs leave of the house to table this report?


Some hon. Members:: Agreed.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of
the Opposition): Mr. Speaker, I wish to ask the Acting Prime Minister whether last night's broadcast interview of the Minister of Finance (Mr. Sharp) was an indication on the part of the government that it does not intend to proceed with medicare.
Hon. Paul Martin (Acting Prime Minister):: Mr. Speaker, I did not hear last night's speech of my colleague. I am sure it was a notable performance, as one would expect from him.


Mr. Diefenbaker:: "Notorious" would be a
better word.


Paul Joseph James Martin: The government does intend to proceed with the medicare bill this session.


John George Diefenbaker: Will the Acting Prime Minister now tell the house, with his usual lucidity and careful choice of words, whether the government of Canada, in view of the fact that only a few provinces have signified
their intention of going into the plan dictated by the federal government, now intends not to proceed with the medicare plan? If this is not the case, can the Acting Prime Minister tell us what was the significance of the words of the Minister of Finance last night?


Paul Joseph James Martin: I just indicated, Mr. Speaker, that we were going to continue with the plan.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Acting Prime Minister whether he is now in a position to answer the question I put to him yesterday as to when we will be given the statement indicating the date on which we will proceed with the old age pension legislation and with medicare.


Mr.   Marlin@Essex East: As my hon. friend knows, the government house leader will discuss this matter with the other house leaders, all distinguished men including my hon. friend. I am not saying that facetiously; I mean it, because my hon. friend is a distinguished member of this house. After these gentlemen have had their conference we will be in a better position to give a more specific response to this worthy question.


Stanley Howard Knowles: If I cannot get a better answer than that from the Acting Prime Minister I will have to put my question
tonight at ten o'clock.


Paul Joseph James Martin: May I simply say, in answer to my hon. friend's question, that since yesterday when the hon. member asked me for a statement on priorities I have had the chance to read what the Prime Minister said on September 1. In answer to a question by the hon. member for Winnipeg North Centre he said that as soon as we completed consideration of the railway legislation it was his intention to make a statement in the house about the priority attached to other pieces of legislation.


John George Diefenbaker: Then we will get that today.


Stanley Howard Knowles: Ten o'clock, Mr. Speaker.
September 8, 1966

Inquiries of the Ministry


Mr. Eric A. Winkler (Grey-Bruce):: I should like to ask a supplementary question of the Acting Prime Minister. Does the government intend to proceed with the increase in old age security pensions?


Paul Joseph James Martin: My hon. friend knows, of course, if he wishes to recollect, that no government in our history has done more for the old age pensioners than Liberal governments, including the present government.


Eric Alfred Winkler: In the light of that reply I should like to ask the Acting Prime Minister if he is aware that he had better act soon before it is too late, or he will be classified as the government was in 1955.


Mr.   Marlin@Essex East: I am aware of the
fact that the people of Canada know that practically all-


Mr. Speaker:: Order, please.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Robert C. Coales (Cumberland):: My
supplementary question is based on the telecast of last evening. I should like to ask the Minister of Finance if he is now in a position to indicate the extent of the reduction in federal government spending for the remainder of the present fiscal year as a result of the economic indicators mentioned.


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I am waiting most anxiously for
the debate on the transportation bill to terminate so I can make a statement.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: I wanted to
ask this question of the Secretary of State but in her absence may I direct it to her parliamentary secretary. In view of the fact that the board of directors of the Canadian Broadcasting Corporation is now meeting, can we have information as to whether the board intends to implement the Keate report or the parliamentary committee report at its present meeting?


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: I shall take the question as notice.


David Lewis: Mr. Speaker, may I now ask the Secretary of State the question I asked earlier before she came into the chamber. In view of the fact that the board of directors of the Canadian Broadcasting Corporation is now in session, could the hon. lady inform the house whether the board has any intention of implementing at this meeting either the recommendation of the Keates report or the recommendation of the report of the parliamentary committee; or will the present vice presidents remain in their positions instead of some meaningful changes being made?


Hon. Judy V. LaMarsh (Secretary of State):: Mr. Speaker, I had the opportunity to meet in
a social way with the members of the board last night, and I was informed that this question was on the agenda of the directors' meeting. I should remind my hon. friend that a couple of months ago a C.B.C. release stated that it was intended to appoint two new vice presidents, one from French radio and one from English radio. I assume, indeed I heard, that the C.B.C. was interviewing various persons during the past month or so with respect to these positions, though I have no later information as to whether anyone has been accepted.


David Lewis: A supplementary question.
Perhaps it was merely a slip of the tongue, but the hon. lady referred to the appointment of one vice president from French radio and one from English radio. Is there any significance in those words?


Julia Verlyn (Judy) LaMarsh: I think I was using "radio" in the sense that one talks of communications, and it includes, of course, television.



GERALD CAPLAN-INQUIRY AS TO CONTINUATION OF EMPLOYMENT

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbilt (Oxford):: I should like to direct a question to the Secretary of State, but in her absence I direct it to the parliamentary secretary. I see the Secretary of State has now joined us, so I shall direct the question to her in her capacity as spokesman in this house for the Canadian Broadcasting Corporation. Is the Canadian Broadcasting Corporation planning to engage Mr. Gerald Caplan for any further interviews on the
September 8, 1966

subject of Rhodesia? If so, is it correct that Mr. Caplan's current engagements are sponsored by an African organization known as ZAPU?


Mr. Speaker:: Order, please.


Julia Verlyn (Judy) LaMarsh: It did sound to me like that but I am not sure, Mr. Speaker.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Real Caouetie (Villeneuve):: Mr. Speaker, I should like to put a question to the Minister of Citizenship and Immigration.
I heard him last night on television, and I think he made objective remarks. I even thought at one point that he was becoming a Creditiste.
Here is my question, Mr. Speaker. The minister said last night that the 18 per cent increase granted to the railway workers within two years is a minimum, but does he feel that after the negotiations they will obtain more than the 18 per cent he mentioned last night?


Hon. Jean Marchand (Minister of Citizenship and Immigration):: Mr. Speaker, it is the mediator or the arbitrator who will eventually settle this matter.



BILINGUALISM AND BICULTURALISM


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: I wonder if the Acting Prime Minister can inform the house when he expects the report of the royal commission on bilingualism and bicultural-ism will be completed and published.


Paul Joseph James Martin: I do not know, but I will find out.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Hon. R. A. Bell (Carleton):: May I ask the
Acting Prime Minister if he can report to the
Inquiries of the Ministry house, as a result of his inquiry undertaken yesterday at the request of the hon. member for Ontario, whether the report of the Spence royal commission has been received? Has this savory document been flown to London for the edification of the Prime Minister?


Paul Joseph James Martin: No, sir.


Eric Alfred Winkler: May I
ask a supplementary question. Is the Acting Prime Minister in possession of it?


Paul Joseph James Martin: No, sir.


Richard Albert Bell: The Acting Prime Minister failed to answer the first question, although he did answer the second. Is he going to answer?


Paul Joseph James Martin: I have.


Eric Alfred Winkler: Mr. Speaker, I have a question for the Acting Prime Minister. Could the Acting Prime Minister inform the house whether any member of the cabinet is in possession of the Spence commission report?


Paul Joseph James Martin: No, sir.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is addressed to the Minister of National Health and Welfare. In view of the statement made in the last few days by the president of the Canadian Medical Association regarding the shortage of medical personnel-and I am asking my question independent of any considerations of medicare-is the government now seriously considering an emergency crash program to recruit medical personnel, including doctors, for Canada?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, this matter is receiving the consideration of the government, but there is no consideration of any crash program.


William Heward Grafftey: Could I also ask the minister this question. Since the academic year at our universities is just beginning, is the government seriously considering grants for medical research at the universities so we can keep our medical teachers in Canada?
September 8, 1966

Inquiries of the Ministry


Allan Joseph MacEachen: Mr. Speaker, this is a matter which is under consideration and review by the government.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to address a question to the minister of manpower. In view of the great number of people who have been laid off or transferred in the motor car industry due to the Canada-United States car treaty, is the transitional allowance benefit insurance fulfilling its original purpose, and approximately how many workers are using it?


Jean Marchand: Mr. Speaker, those who are laid off on account of a drop in production which is related to the trade pact are allowed to receive the TAB benefits. I think the question as to how many receive them should be directed to the Minister of Labour, who is responsible for TAB.



ROYAL CANADIAN MINT


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Minister of Finance. In the light of the recent lay-offs of employees, notably pressmen, at the mint, with a view to increasing employment and increasing the numismatic interest in Canadian coins would the minister consider instituting the minting of proof sets, as distinct from proof-like sets, for this and for subsequent years?


Mr. Speaker:: Order, please. I suggest to the hon. member that this is not a question of urgent national importance. Perhaps it could be placed on the order paper.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, I should like to put a question to the Secretary of State for External Affairs (Mr. Martin) and Acting Prime Minister.

In view of the recent press reports that, a few days ago, in the course of a speech at a dinner in honour of the French Minister of Education, the minister is reported as having announced that the government is prepared to make available to six French libraries in various parts of France, a collection of some 800 works in English and in French. May I ask the minister when the government intends to proceed with this well-inspired gesture and what may be the approximate proportion of English and French works?


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



TRANSPORT


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I wish to direct a question to the Minister of Transport (Mr. Pickersgill).
Can the minister inform the house if Bill No. C 231 now under consideration caused any reaction in the various Canadian provinces, particularly in the province of Quebec? Has the minister received from the provincial authorities objections with regard to Bill No. C-231?


Hon. J. W. Pickersgill (Minister of Transport):: In the case of the provincial authorities of Quebec, up to now no representations have been brought to my attention.



COMMONWEALTH RELATIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would ask the Secretary of State for Exernal Affairs, in connection with the prime ministers' conference in the city of London, whether the stand of the Canadian government now is that the situation in Rhodesia is a dangerous and difficult one, and that it should be dealt with by the prime ministers' conference rather than being submitted to the United Nations.


Hon. Paul  Marlin@Secretary of State for External Affairs: Mr. Speaker, the debate on Rhodesia at the prime ministers' conference began, as we all know, the day before yesterday. It is possible that the Prime Minister
September 8, 1966

will be making an intervention later today or tomorrow. In view of the fact that at this stage these discussions are held in camera, and as there is no finality in the matter at the moment, I feel that it would not be in the interests of a solution if I were now to anticipate the stand that Canada may take with regard to this question.
In the light of proposals which are now before the conference, proposals that have been made by the Prime Minister of Singapore, the foreign minister of Zambia and several other representatives, I would prefer-and I think my right hon. friend would agree-that the matter should be left this way at this stage.


John George Diefenbaker: A supplementary question, Mr. Speaker. Apparently the minister has not been informed of what the Prime Minister said on arrival in the United Kingdom, as reported in the London Times of Tuesday, which says:
Refusing to commit either himself or his country-


Mr. Speaker:: Order, please. The right hon. gentleman knows that according to the rules he cannot quote directly from the report on which he wishes to base his question.


John George Diefenbaker: Mr. Speaker, I had to refer to what was reported in the London Times so I could bring it to the attention of the minister. May I ask the minister, did not the Prime Minister himself on arrival in the United Kingdom advise that this matter should be dealt with by the prime ministers' conference and not by the United Nations?


Paul Joseph James Martin: At the opening of this conference the position of a good number of the countries in the Commonwealth was that it would be desirable if possible to try to bring about a solution of the Rhodesia problem within the Commonwealth. I believe this is something for which we all would aim. This does not, of course, preclude the possibility of examining a resort to procedures which might be available under the charter of the United Nations. I am not saying that resort will be made to such procedures, but in the discussion which is now underway there will undoubtedly be proposals calling for an examination of alternatives.


John George Diefenbaker: The minister mentioned the proposal of the prime minister of Singapore. Would he not agree that the acceptance of the proposition put forward by the prime minister of Singapore for the sending
Inquiries of the Ministry of troops, from whatever part of the Commonwealth they might come other than the United Kingdom, is not in keeping with Commonwealth responsibility or tradition?


Paul Joseph James Martin: We all have our views as to what would be the wisest course, but I think instead of declaring these views while the conference is in progress it would be better to suspend judgment.


John George Diefenbaker: The Prime Minister has made his statement.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Earlier this week, in reply to a question I asked, the Acting Prime Minister said he hoped within several days to make an announcement in connection with the plans for the visit to Canada of Her Majesty the Queen. In view of comments in the press and reports coming from London, I wonder whether he has a statement for the house at this time.


Paul Joseph James Martin: The Prime Minister has been in communication with the premiers of the provinces. He has not heard from three of them, and I am afraid that the anticipation I expressed the day before yesterday may not be realizable this week.


Robert Norman Thompson: Does an invitation to Her Majesty the Queen to Canada involve permission from the provinces before it can be extended or announced?



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Max Sallsman (Waterloo South):: I wish
to address a question to the Minister of Citizenship and Immigration. In view of the 200,000 immigrants expected in Canada and the serious shortage of housing to accommodate them, can he tell the house what action he intends to take to ensure that adequate housing will be available for these immigrants?


Jean Marchand: The figure mentioned by the hon. member relates, as he said, to the number of immigrants anticipated. I do not know whether those who have not yet
September 8. 1966

Inquiries of the Ministry arrived will find appropriate accommodation in Canada. As far as the others are concerned, we have not received too many complaints yet, and I see no major problem at this stage.


Max Saltsman: Regardless of the number of immigrants expected, has it not been drawn to the minister's attention that immigrants to this country trying to find housing are encountering serious difficulties?


Mr. Speaker:: Order. This question is not allowable on the orders of the day.


Mr. J. H. Horner (Acadia):: A supplementary question. Is the government taking any special steps to encourage immigration from Great Britain in view of the austerity program in that country at the present time?


Jean Marchand: We receive immigrants
from all parts of the world, many of them from Great Britain, and we shall continue to receive them in about the same numbers as last year.


John (Jack) Henry Horner: But is the government making any special effort or taking any special steps in view of conditions in Britain today?


Jean Marchand: We do not take any special steps. I know that some of the provinces do, as the hon. member read in the newspaper. I think the province of Manitoba is sending a group of men overseas who will look for immigrants, but we are not making any special effort this year with respect to immigration from Great Britain.
{Translation]


Mr. Auguste Choquette (Lolbiniere):: A supplementary question, Mr. Speaker.
In view of the way Mr. Fouchet, the French Minister of Education reacted to French immigration to Canada, does the minister intend to take special action to get around the difficulties brought to light by Mr. Fouchet and to stimulate French immigration in accordance with a policy he announced previously?


Jean Marchand: Mr. Speaker, if I am not mistaken, the French Minister of Education stated that his country favoured immigration, not emigration. He indicated that he was not anxious, nor was the French government anxious to see French workers

leave the country. We knew that. Besides, all we want, notwithstanding the French government policy, is that where there are Frenchmen who wish to immigrate, we would like them to come to Canada, and we will concentrate our efforts in that direction.


David Réal Caouette: One further question, Mr. Speaker.
The minister stated on television the other night that immigration was as much a provincial responsibility as a preoccupation of federal authorities, and I agree entirely, because section 95 of the British North America Act-


Mr. Speaker:: Order. Does the hon. member have a question?


David Réal Caouette: Is the minister making the necessary arrangements or consulting with the province of Quebec so that the latter may assume its responsibilities with regard to immigration?


Jean Marchand: Mr. Speaker, I was inaccurately quoted in the preamble to the question-it is not my wish to engage in debate over this, but I at least want to point out that the quotation was inaccurate, since there is no jurisdictional equality-however, I have already met with Quebec representatives and I invited them to do like Ontario and the other provinces are doing, namely deal with immigration within the limits of their jurisdiction.



NATIONAL HOCKEY LEAGUE


[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I wish to direct a question to the Solicitor General of which I have given him notice. Will he be notifying that slave-holding state known as the National Hockey League that the free laws of Canada apply to hockey players as well as to all other men in Canada?


Mr. Speaker:: I have the impression that the hon. member is aching for an opportunity to discuss this at ten o'clock.


Some hon. Members:: Oh, oh.


Ralph Bronson Cowan: Ten o'clock.
September 8, 1966



PILOTAGE


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, in view of the interest previously shown during the question period about royal commissions may I ask the Minister of Transport about a royal commission that really is important, namely the royal commission on pilotage.


John Whitney Pickersgill: Mr. Speaker, the last time I made inquiries I was told it would be some considerable time before the report of this royal commission could be available. If the hon. gentleman felt that any influence he could exert would speed it up, I would be grateful.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, there is a question I would like to ask the Acting Prime Minister which also arises out of that memorable broadcast of last evening. Has the government determined on the appointment of a price spreads commission similar in purpose and aim to that set up under the government of Right Hon. R. B. Bennett? If such a determination has been made, have any invitations been extended to potential members of that commission?


Hon. Paul  Marlin@Acting Prime Minisier: No, Mr. Speaker.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Solicitor General, supplementary to one that was put to him yesterday by the hon. member for Red Deer. When the Solicitor General makes his statement in the house giving the reasons for commuting death sentences would he also consider telling the house what consideration the government may have given to bringing in its own bill for the abolition of capital punishment?


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, I believe the question raised by the
Inquiries of the Ministry hon. member covers a matter of government policy, and I am not in a position to answer at this time.



FORESTRY


[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I wish to direct a question to the Minister of Forestry. Can the minister inform the house when he will be in a position to make a statement on the comprehensive forestry policy which was recommended by the resources for tomorrow conference, and upon which his officials have been working for some time?


Hon. Maurice Sauve (Minister of Forestry):: Mr. Speaker, I discussed this subject during the last debate on the estimates of my department.



EXPO '67 REQUEST FOR STATEMENT ON INAUGURATION PROGRAM

[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I wish to put my question to the Acting Prime Minister (Mr. Martin).
Would the minister tell the house whether the government has received from the authorities of the World Exhibition the program for the inaugural day and would the minister repeat in this house the names of foreign personalities who are going to participate in this inauguration?


Mr. Speaker:: I suggest to the hon. member that this question is not urgent and I ask the hon. member to place it on the order paper.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. Chester MacRae (York-Sunbury):: Mr. Speaker, I wish to direct a question to the Minister of Veterans Affairs dealing with the report of the veterans affairs committee concerning the prisoners of the Japanese during world war II. Is the minister in a position to advise what action is being taken on the recommendations of the committee?

September 8, 1966
Inquiries of the Ministry Hon. Roger Teillet (Minister of Veterans Affairs): Mr. Speaker, I wish to thank the hon. member for giving me notice that he would ask this question. The fourth report of the standing committee on veterans affairs supported the recommendations made by Dr. Richardson in his report of January, 1966, on the problems and disabilities of Hong Kong veterans. His recommendations were already being implemented, and this required a detailed review of the record of every Hong Kong veteran.
The review is well advanced but has not been completed, because it has been found necessary to examine veterans who have previously been unwilling to report for examination, and others who have not been seen in recent years. The commission is now studying the committee's further recommendations, which are supplementary to and conditional upon completion of the above review, with a view to determining how they may be implemented.
[ Translation]



REPORTED ABUSE OF FRANKING PRIVILEGES

[Stage Direction]
On the orders of the day:
Auguste Choquette: Mr. Speaker, I should like to put a question to the Postmaster General (Mr. Cote).
In view of the fact that the separatist member for Lapointe (Mr. Gregoire) said during a press conference that he would use his franking privilege to promote separatist publicity in Canada or in the province of Quebec; in view also of the fact that a number of Conservative members of the house misused their franking privileges for election propaganda purposes when parliament was dissolved in 1965, will the minister restrict the franking privileges of the members?


Mr. Speaker:: Order. The question put by the hon. member contains several allegations and may certainly not be asked at this time.



NATURAL GAS


[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, I would like to ask the Minister of
Mines and Technical Surveys whether the fMr. MacRae.]
government has received any appeals against
its decision to prohibit Trans-Canada Pipe Lines from building its new gas transmission line in part through the United States.


Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys):: Mr. Speaker, I do not think there is a possibility for a legal appeal against the decision of the government, but a meeting has been arranged for tomorrow morning between some members of Trans-Canada Pipe Lines and some members of the government to hear the company's point of view.



AGRICULTURE


[Stage Direction]
On the orders of the day:
William Heward Grafftey: Mr. Speaker, in the absence of the Minister of Agriculture, I wish to direct my question to the Minister of Forestry.
Has the government received a telegram from the officers of the Quebec Miners Association, who are holding an emergency meeting in Quebec city, protesting against the decision of the federal government to abandon the policy of free feed grain storage?


Maurice Sauvé: Yes, Mr. Speaker, and we do not intend to reconsider our decision.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Ed. Schreyer (Springfield):: Mr. Speaker, I would like to ask whether the Secretary of State for External Affairs has an answer to the question I asked him yesterday and which he undertook to answer some time today, relating to the return to Canada of four escapees from a Canadian penitentiary.
Hon. Paul Martin (Secretary of State for
External Affairs): Yes, Mr. Speaker. My hon. friend's question has to do with a statement which is supposed to have been made by the Attorney General of the United States concerning escapees from a Canadian penitentiary who are now in custody in the state of Indiana.
We have made inquiries of the United States state department about this matter and I have
Sepiember 8, 19GS

been advised that the authorities in Washington deny that the Attorney General made any such statement. The United States authorities immediately concerned have confirmed that one of the escapees was indeed of North American Indian origin, but they have also expressed the opinion that this fact would not in itself involve the waiving of the extradition arrangements in effect between our two countries. There are consultations now in progress between Canada and the United States on the matter.



TRANSPORTATION


[Stage Direction]
The house resumed from Wednesday, September 7, consideration of the motion of Mr. Pickersgill for the second reading of Bill No. C-231, to define and implement a national transportation policy for Canada, to amend the Railway Act and other acts in consequence thereof and to enact other consequential provisions.
Mr. Speaker:: If the minister speaks now he will close the debate. The right hon. Leader of the Opposition.
Right Hon. J. G. Diefenbaker (Leader of
the Opposition): Mr. Speaker, I wish to make a comparatively limited number of observations on this important bill. It covers a subject that has been before parliament on a number of occasions and the subject of a series of royal commissions. The problems surrounding the bill's application have been fully discussed by members of all parties and in particular by members of Her Majesty's Loyal Opposition. The detailed examination given by members indicates the attitude of the opposition about a problem of deep significance. It is one requiring the fullest consideration and discussion by the committee when it is set up.
The bill is of a complexity that makes necessary complete and thorough examination. In committee hearings I hope that counsel will be provided to ensure that representative groups will be assured that their evidence will receive fullest consideration and in the presentation of it they will have the benefit of counsel learned in this abstruse field of the public service.
In 1931, under the prime ministership of Right Hon. R. B. Bennett, a commission was set up to inquire into transportation in Canada, particularly in relation to railways, shipping and communication facilities, having regard to
Transportation
present conditions and probable future development, and to report their conclusions and make such recommendations as they thought proper. The order in council gave an indication of the comprehensive nature of the transportation problem:
-the vital importance of transportation to the trade and commerce of Canada, the serious and continuing deficits of the C.N.R. system, and the diminished revenues of the C.P.R. system, conditions which have been brought about, in part, by duplication of tracks, facilities and services of every kind, and in part by competition by other modes of transportation, particularly motor vehicles operating on highways-
Reference to that order in council is indicative of the fact that the problem has changed little in 35 years. The Duff commission on September 13, 1932, recommended:
-affording early relief to the federal treasury by reducing the alarming and increasing deficits and the demands for further capital expenditure in connection with the C.N.R. system.
Through the years the problem has remained unsolved and indeed insoluble. In conclusion the 1932 report stated:
We feel compelled, as a matter of public duty, to strike a serious note of warning to the people of Canada. Unless this country is prepared to adopt the plan we have proposed, or some other equally effective measures, to secure the economical and efficient working of both railway systems and thereby not only reduce the burden on the federal treasury but improve the financial position of the privately owned railway, then the only courses left would be either to effect savings in national expenditure in other directions, or to add still further to the burdens under which the industries of the country are suffering by the imposition of yet further taxation-
I refer to this because there are those who would have us believe this problem has developed only recently. When we on this side were charged with the administration of affairs, we decided, as a matter of major importance, in order to bring about development on a fair and equal basis in all parts of Canada, there must be an examination in detail of the transportation problem. In particular, we decided, without other matters taking a secondary position, the discrimination in freight rates which has played havoc in western Canada and the maritimes should be studied in search of a fair and reasonable formula.
The order in council which set up that royal commission made it clear the removal of discrimination was of major importance. Time passed. The commission made its report. There have been some suggestions there was delay on the part of the government of

September 8, 1966
Transportation
that day. The first report of that commission was received in March and released on April 10 of 1961.
At that time the commission set forth the general principle that burdens which are the result of obligations imposed upon railroads by tradition, law and so on should be lifted. Its major recommendations were that there should be self-liquidation of subsidies starting at $97.3 million in 1961 and reducing gradually to $30 million in 1965 to meet the removal of distortions which have resulted from national obligations and so on, that unnecessary passenger services should be discontinued, and that branch lines which are unnecessary should be closed. A $13 million loan fund was recommended to be established to offset the cost of maintaining certain uneconomical branch lines during the 15 years of the transitional period. It also stated that the statutory rates on grain were considered to be too low and that in their place a subsidy of $23.3 million should be substituted.
[DOT] (3:20 p.m.)
A second report was tabled on January 23, 1962. The recommendations included first, the removal of the $7 million bridge subsidy on rail shipments across northern Ontario, second, the withdrawal of federal subsidies on goods moved by rail within the maritime provinces and, third, the appointment of a national transportation advisory council to report to the Minister of Transport and be responsible for assessing the impact of decisions made by all regulatory transportation agencies. Finally, it was recommended that there be the creation of a transportation statistics committee and the inauguration of an industrial freight traffic survey.
We had the legislation ready. It took some months to get that legislation ready, and in the fall of 1962 the undertaking was given that early in 1963 we would proceed with the legislation. We were defeated in the house, went to the country and a new government came into office. There was no delay or failure to take action for which we can be criticized, because we had to wait for reports.
That being so-and I have simply outlined some of the general considerations-what are the matters in issue?
The first, as I see it, is that if the legislation in its present form is not amended there will be continuing discrimination against the maritime provinces, the western provinces especially and northern Ontario in part. The railways will be all-powerful. They will be

able to exact, almost without limitation, anything the traffic will bear. That is a serious matter.
After the war there were increases of 157 per cent in freight rates across the board excepting within the limitations of the Maritime Freight Rates Act and the Crowsnest pass arrangements. The result was that the discrimination of 1945 which in western Canada, according to my recollection, had begun at 17 per cent was accelerated by across-the-board additions to freight rates, thereby penalizing even more the western provinces. This again was subject to the terms and limitations provided under the Maritime Freight Rates Act.
Unless this present legislation is changed by parliament we will have in Canada for all time to come the injustice and distortion that result from certain areas of Canada having to pay freight rates far greater than other areas which have access to water or other transportation. This legislation cannot be accepted in its present form because it will result in continued unequal development of Canada.
This cannot be brushed aside. We cannot as Canadians, wherever we live, accept the principle that some parts of Canada are a noman's land for future development because of the acceptance of discrimination perpetuated in legislation. That is the first serious objection and one upon which I hope representatives from all parts of Canada will give evidence before the committee. This serious short coming must be rectified.
On the question of rationalization, I am seriously concerned about the results that will follow in the setting up of a board in name only, without power. The first thing the government should do, and I hope the minister will announce this today, is to have the railway companies withdraw applications made to date for the closing down of some 8,000 miles of railway lines across this country.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I think it is fundamental-


John Whitney Pickersgill: Mr. Speaker, I wonder whether the right hon. gentleman would permit me-


John George Diefenbaker: Perhaps the minister would allow me to continue. I know what he said the other day and I am asking him when he speaks today-on this occasion he is going
September 8. 1966

to follow me, apparently; I have often felt that I could give him some good leadership if he would do that in many other things-to deal with this question. The minister is going to follow me and then he will be able to answer. I know the undertaking that he gave the other day, but I should like to see the railways show their bona fides now by having the minister announce that these applications are withdrawn, not in the future, not when the committee is set up or is giving consideration to the matter, but now, because there will be grave injustice perpetrated unless action along this line is taken. An announcement by the minister today will show that we are not to accept the nebulous promises of the future as to action on the part of the railways in this regard. It could be explained clearly, that in consequence of representations made during this debate there will be action now to remove the overhanging fear facing various areas affected by the applications.
The third important matter is that there must be a body to control unjustifiable increases in freight rates. Are we going to hand over to the tender mercies of Canadian National Railways and the Canadian Pacific Railway the right to say: This is what we are going to charge, we can get away with it because there is no right of appeal or no effective appeal? They can charge whatever the traffic will bear.
That is a proposition I cannot accept.
What would be the consequence of such a proposition in connection with the tremendous developments that have taken place in potash mining in Saskatchewan, although I am not arguing this case from the point of view of western Canada alone but of the nation as a whole? When I was a boy these areas were regarded as completely unfit for cultivation. They were salt areas, alkali flats and the like. I know that the Minister of Transport is fully aware of this because the same situation prevailed in his area in Manitoba. We did not know that we had not a gold mine but a golden mine underneath our province and spreading to a lesser degree into the adjoining provinces.
[DOT] (3:30 p.m.)
There can be no competition to keep down the price of freight on potash within Canada if this legislation is passed. It might be argued that there could be competition from the trucking companies. Trucks cannot meet the problem of transporting hundreds of millions
Transportation
of tons of potash, and in saying that I deliberately understate the potential of potash. We must not allow the removal of national direction in connection with freight rates. Is the government going to give to the railway companies-I mentioned potash as an example-the complete privilege of exacting whatever they wish without any limitation by competition? To do so will provide a field day for those who operate railway companies. Surely we have not come to that position yet.
I believe that we have imposed on rail transportation too much legislation and too many rules. Some of those rules must be revised but that does not mean that we should give to those kindly, gentle and philanthropic boards of directors of the great railway companies the power to make-Canadians pay through the nose where there is no competition to keep freight rates down.
I emphasize the need of a complete review not in the interest of one part of Canada but in the interest of the whole country. There is no reason why we who live in western Canada and those who live in the maritime provinces should be placed in a secondary position because of freight rates which will impose upon these areas to a far greater extent than on any other parts of the nation.
In this connection I think the editorial which appeared in the Telegraph Journal on; August 31 is of importance. It was headed: "National Transport Policy: This Area Must Be Alert." That was the view expressed by various maritime members during the progress of this debate. The editorial went on to say:
A national transportation policy based solely on "compensatory" freight rates-(i.e. keeping only profitable lines operating) could do immense harm to the maritimes.
It then continued:
So far, Ottawa seems to be keeping this in mind. It will be up to the Atlantic provinces to be sure their interests are protected as parliament legislates in this crucial field.
The next point I wish to raise is that we must not place the trucking industry of Canada in an unfair competitive position with the railways. The trucking industry is an industry of great importance in this nation. This legislation will continue to subsidize the railways within the limited areas which are referred to in the statutes but there is nothing that will protect the trucking companies from unfair or unjust competition.
I will give an example that has been brought to my attention of a case which

September 8, 1966
Transportation
cannot be justified. The case to which I am referring indicates the kind of injustice that this industry can suffer under the present laws. I am prepared to give the name of the company but I think the house will agree that in fairness it should not be mentioned. I will show the minister the letter in question so that the company's name will be available to him. This is a cartage company licensed for highway hauling. The letter reads in part:
I could give you many, many instances of rate cutting and agreed charges which have forced independent truckers out of business since 1959, but I will give you one complete example which happened to us.
The author of the letter then goes on to point out that a certain shipper was receiving poor and indifferent service from the railway and this company agreed to haul the freight at the rate of 82 cents per hundredweight. Three months later, after the company had begun hauling the commodity, it was advised that the C.N.R. had lowered its rate to 68 cents per hundredweight. The company agreed to continue at this rate. Two months later the company was advised that the C.N.R. had cut the rate to 55 cents per hundredweight and again it agreed to this rate. Two months later it was advised by the shipper that an agreed charge had been made with the C.N.R. which meant a further reduction.
[DOT] (3:40 p.m.)
That is not fair competition. We subsidize the Canadian National but the truckers, as I see it, have no protection whatever. They are subject to competition such as this that is neither economic, just nor equitable. There must be within this legislation protection against that type of unjust competition which destroys private enterprise. Are we going to give the railways an open season on the Canadian consumer?
These are some of the problems that face the committee and which will require the most careful consideration. We had hoped that the amendment which we endeavoured to move yesterday would have been accepted. However, Your Honour ruled it out of order. I am impelled to say, although possibly I ought not to, that the way in which Your Honour has discharged the responsibilities placed upon him has added a new stature to the position of Speaker of this House of Commons.


Mr. Speaker:: Perhaps I should bring to the attention of the right hon. gentleman the fact

that I cannot claim credit for ruling the amendment out of order yesterday.


John George Diefenbaker: No, Mr. Speaker, I do not confine my remarks to that. I think it was a decision in keeping with the traditions of the house. We were trying to have a principle determined. The hon. member for Middlesex West (Mr. Thomas) showed clearly that our purpose was not to defeat the bill but to improve the ultimate law that will be passed. I shall refer later today to the functions of an opposition because last evening in a broadcast the Minister of Finance (Mr. Sharp) gave his considered opinion that an opposition is apparently to be seen and not heard, that the only trouble with the opposition is that it is too strong. If only the government had 175 members they would be able to tell the opposition to take that course which my respect for parliamentary rules forbids me to mention. A parliamentarian with the grace and distinction of the Secretary of State for External Affairs (Mr. Martin) or one with the wide knowledge of the Minister of Transport (Mr. Pickersgill) would never have made such a statement, I am sure, because that kind of statement is not a tribute to the parliamentary system. I do not believe in that doctrine.
I have mentioned this statement so I must quote it now in order that no one will say I have misstated the purport of the views of the Minister of Finance, who apparently was speaking for the government. He said:
I don't think that the opposition has been helpful to the government in restraining these pressures. Their attitude in the House of Commons has always been to put pressure on the government to make decisions quickly, to disregard what may be proper cautions-
I am living right up to that principle. I am saying, do not rush in with this legislation in its present form. Then Mr. Gordon, who was interviewing the minister, said:
More than legitimate pressures?
The minister replied:
I think so. And this wouldn't matter so much in a house in which we had the dominant majority, but we have slightly fewer than half the members, and therefore what happens in parliament today and the attitude of the opposition is far more important than it has ever been. If we were sitting there with 175 members we could ignore the opposition and say-*
I know that neither of the two ministers sitting on the front bench, to whom I have referred, would ever advance such a proposition. Then he went on to say-


John Whitney Pickersgill: Even with 208 you could not do it.
September 8, 1966


John George Diefenbaker: I hope the hon. gentleman is not approving the statement made by the minister. The Minister of Finance then said:
-well, you know, that's just what you expect.
That is what the Minister of Finance would say to the opposition if he had 175 members-now, you can go to the other place with my compliments. This is clearly not the attitude to be expected from a minister of the crown, although it is indicative of a state of mind to which allusion has been made by members of the opposition on a number of occasions. I will amplify that later.
I hope that the Minister of Transport will not adopt those words in reference to the suggestions I am making for the purpose of rendering this legislation effective in the national interest. In its present form it cannot contribute to the unity of this country. It will simply accelerate the distortions of geographical growth and development, and the absence of competition will bring about concentration of industrial development in the central provinces to an even greater extent than is the case today. I hope the Minister of Transport will not adopt the curious, archaic and dictatorial attitude of the Minister of Finance as indicated in these words:
If we were sitting there with 175 members we could ignore the opposition and say: Well, you know, that's just what you expect.
I hope that the suggestions I have made will bring together the views expressed by many hon. members and I hope the views expressed by hon. members from this side of the house will receive the serious consideration of the government. There must be fairness, and there will be no fairness if discrimination, even if it came into being through the oversight of the Board of Transport Commissioners, is not to be entirely removed, and if an open season is to be declared on the consumers of Canada.
Now, sir, there is one other matter and that is the question of research. We hear a great deal today about the brain drain from Canada to the United States, about the thousands who leave for better opportunities in that country. It is also true that a number of people from the United States come to Canada, particularly in connection with the petroleum industry. However, there is a drain from this nation. What takes a highly trained man with unusual talents and abilities to a country other than his own? Some say it is better pay or material considerations. This
Transportation
can be explained in a general way as greater opportunity.
[DOT] (3:50 p.m.)
That is the challenge that faces our country. You cannot strengthen political and national unity by accelerating freight and transportation rates in a way to perpetuate inequity.
We in Canada have fallen behind in the field of efficient, high-speed ground transportation. I see the minister agrees with that generalization; he has indicated his agreement. There are three areas in this country where the need for a positive policy is vital. There are the maritimes, to which I referred on an earlier occasion, the west coast of Canada and, believe it or not, Canada's industrial heartland, that narrow band of economic activity extending from Quebec City to Windsor.
So far as the maritimes are concerned, I have suggested, and I am not going to repeat it, that the railway line today is an anachronism, that what is needed is a faster and more direct connection between the maritimes and the industrial heartland. The present line runs from Montreal through Richmond, Levis, Mont Joli down to Moncton and is 840 miles in length. I suggested that a direct route from Richmond, Quebec, through the top corner of Maine to Woodstock, New Brunswick, and from there utilizing the present main line into Saint John and down to Moncton, would cut one-third off the distance. I am not going to give further details because I dealt with this matter on an earlier occasion, but the press in the maritimes has stated that this is a suggestion that deserves attention.
The west coast presents a different type of problem. I think the house is aware of the bottleneck impeding the convenient and efficient flow of goods to the port facilities of British Columbia. The Rocky Mountains have their scenic beauty but they contribute little to the transportation of goods. The mountains seriously hamper economic expansion of the prairies.
Rail facilities between British Columbia and the rest of Canada are no further advanced than they were 50 years ago. Despite the growth of Canada economically and in population, and despite the many technological achievements on virtually all fronts, we still have two companies with but one single railway track each linking the economic wealth and facilities of British Columbia with other parts of Canada.

September 8, 1966
Transportation
I believe we will have to catch the vision of further development, that we will have to build another rail line adjacent to those that exist today or, even though the cost be high, elsewhere, so that there will be additional tracks to carry the increased traffic that is bound to follow. On some future occasion I am going to deal with this matter in detail, but at the moment I am just trying to picture the kind of Canada we may have not many years hence if we catch something of the opportunities that are ours.
The third area that merits searching examination is Canada's industrial centre. It is my opinion, though hon. members may disagree with it, that within the next ten years the area in Canada between Quebec City and Windsor will be a 50-mile wide megalopolis. There will be a tremendous concentration within that area which will embrace 65 per cent of the population of Canada and 84 per cent of its industrial activity.
The railways have fallen far behind. They have simply carried on from year to year making technological changes and improvements to rolling stock but failing to envisage the greatness of Canada's future and the need for action now. I believe we must provide, within the area between Quebec City and Windsor which I have mentioned, the best ground transportation facilities possible. To fail will mean that we cannot take full advantage of the economic potential available. If our ground transportation is expensive, inefficient and disorganized, it will be a burden rather than a blessing to this highly sensitive industrial complex.
What should we do in order to meet the greatness of the transportation challenge? They laughed at Macdonald when he pictured the opening up of the west. Those who opposed said it would mean railroads from wigwam to wigwam. There was a revised version, Mr. Speaker, in 1958. When we placed before the people of Canada the opening of northern Canada, making available to the provinces the exploitation of great resources via our roads to resources program, it was said to be a concept of roads from igloo to igloo.
[DOT] (4:00 p.m.)
It is the duty of government to provide certain basic services to facilitate the successful operations of free enterprise. A special research division of the federal Department of Transport is something that I have advocated for some time and I should now like to see it developed. There should be a most

exhaustive research program into all forms of ground transportation. We have never done that in Canada except in a haphazard way by one corporation or another. The research should be carried out in co-operation with private industry, the provincial governments and universities. We have badly neglected research in the field of ground transportation. When this legislation has gone through committee, it would be a massive step forward if the minister would set up a research program to give consideration to new vistas of opportunity for all parts of Canada, giving young Canadians something of that pioneering spirit of our forebears when they first devised our transportation system.
In the national interest action along these lines must be taken. If it is not taken, this legislation, when it is finally completed, will be merely an evanescent thing, lacking the impetus and inspiration that come from adoption of new ways and new opportunities.


John Whitney Pickersgill: Mr. Speaker-


Mr. Speaker:: Order, please. If the minister speaks now he will close the debate.


John Whitney Pickersgill: Mr. Speaker, I do not want hon. members to have any heart attacks. I hope, therefore, they will be prepared for a shock when I say that I agree with a great deal of what has been said this afternoon by the Leader of the Opposition (Mr. Diefenbaker).


Mr. Churchill:: You are mellowing with the years.


John Whitney Pickersgill: But if there are any differences on any of the points they are not on one point that the Leader of the Opposition made when he referred to the gentleman who presides over the house. The Leader of the Opposition having brought an apple for the teacher, I bring one too. I do feel, sir, that all of us in the house will echo the words of the Leader of the Opposition when he says that you have brought to the office you grace a new dignity and a new serenity.
I agree very heartily, and I hope no one will question my sincerity when I say this, with what the Leader of the Opposition said about improving this bill. Also, I think I cannot be expected to plead guilty to the charge made in a jocular vein by the hon. member for Winnipeg South Centre (Mr. Churchill) last night, and not repeated, I am happy to say, by the Leader of the Opposition
September 8, 1966

in his very fair presentation today, that this is instant legislation. I cannot think that any bill has ever been introduced in this parliament

I know this parliament has not had a very long life since it was only elected last November-which has had more careful preparation than this one. In saying that I pay tribute to the previous government.
In my opening speech I paid tribute to the right hon. gentleman for appointing that royal commission which I think did a great deal to expand our horizons and increase our knowledge of the problems of transportation and which also has pointed to the solution of some, though by no means all, of those problems. I am grateful as well to the previous government. The hon. member for Winnipeg South Centre made a slight error in his remarks. The government's child never actually got born, though last night he said it had been. That was just a slip. But it was ready to be born in 1962.


An hon. Member:: It was conceived.


John Whitney Pickersgill: Yes, it was conceived. About seven months had passed and then, as the right hon. gentleman has pointed out, there was a miscarriage. We had the benefit, sir, of that bill. We had the benefit of that draft bill which followed, as did the earlier bill I introduced, rather more closely the recommendations of the MacPherson Commission than this one does. I may say that nearly every feature of this bill to which exception has been taken in the debate, with the sole exception of the Canadian Transport Commission which did not appear in that bill or in my previous bill, was contained in the bill which hon. gentlemen opposite were just about ready to bring to the house.
We have built on the foundation that the hon. gentlemen opposite laid, and I hope that once this debate is over there will be no attempt to sap that foundation. It was, sir, in the light of developments, in the light of experience, and in the light of criticisms inside the house, in the parliamentary committee and outside the house, that the bill now before us was produced.
[DOT] (4:10 p.m.)
Although we have not accepted all suggestions, because some were not acceptable, to the best of my knowledge we have taken account of and given the most careful consideration to every representation that has come to me, to the officers of my department or to my colleagues from every source in this
Transportation
country, not the least important of which are the hon. members on both sides of this house, as well as from provincial premiers, interested bodies such as chambers of commerce, the Canadian Federation of Agriculture, the wheat pools, the grain trade and shippers of all kinds. In every way we could we have tried to produce a better bill than the one which was offered in the last parliament in 1964. And I believe this is a better bill. As I said when opening the debate on second reading, we do not believe that all wisdom is contained in this bill-


Mr. Hamilton:: Would the minister allow me the privilege of asking him a question in the middle of his speech?


John Whitney Pickersgill: By all means.


Francis Alvin George Hamilton: The hon. gentleman will remember that an unofficial committee composed of representatives of all the parties met with the officials. This is my question: Did the minister receive the representation I made on behalf of the Conservative party that in this bill we should give either to the board or to the government the power to direct the railways to operate rationally? Did he receive the representation I made at that time that if the companies did not run the railways rationally they should not receive a subsidy?


John Whitney Pickersgill: That representation was received and I will be glad to have a further discussion of it when we reach the committee stage. I am giving an offhand opinion, but as long as there was no direct financial implication I believe it would be competent for an amendment to be introduced in committee on this very point. I think so, but I hope that in giving an off-the-cuff opinion of this sort I shall not be held to it should the lawyers show that I am wrong.
We did give very careful consideration to that point and we went what I consider to be about three-quarters of the distance in the direction the hon. gentleman is now suggesting. In the terms of the bill before us now, the Canadian Transport Commission will have the authority to recommend things of that sort. But we felt that the time-honoured principle which has been followed up to now with respect to railways, that management of the railway, even of the publicly owned one, should not be undertaken by politicians or by bureaucrats but should be left to management, would be interfered with if some other body was given power to direct the positive

September 8, 1966
Transportation
actions of the railways rather than merely inhibit improper, unlawful or undesirable practices which the railways might follow and which parliament might have forbidden.
This may not be a conclusive argument. I think there is plenty of room for debate on this question. I am not dogmatic about it. But I am trying as honestly as I can to tell the hon. gentleman why we did not go all the way along the road he has in mind. We have gone a considerable distance.


Francis Alvin George Hamilton: Would the minister allow one more question?


John Whitney Pickersgill: Certainly.


Francis Alvin George Hamilton: The hon. gentleman has said he proposes to follow the traditional policy of making recommendations only. Surely he is aware that in 1934 parliament passed a statute similar to this one recommending to the railways that they should co-operate and giving many examples. The railways refused to do so. A Senate committee met in 1938 and 1939 and discussed the failure of the railways to act, and strong recommendations were being prepared so as to force the railways to act. Then the war intervened and nothing was done along those lines. Now it appears we are going to repeat that mistake. Is the minister aware of all this?


John Whitney Pickersgill: I would not be so immodest as to say I am aware of all this. I am aware in the main of the circumstances to which the hon. member refers and, as I say, I believe this subject could very easily be pursued when we are discussing the relevant clauses in committee. I can assure the hon. gentleman that my mind is not closed to suggestions of the kind he has made or, indeed, to any other suggestions.
I wish to repeat that in hesitating to accept the procedural suggestions of hon. gentlemen opposite we were not seeking to ram anything down anyone's throat. I say this because I do not want a wrong impression to be left. As I said in my original speech, my view is that the principle of this bill is that there should be established a single unified, or integrated, or even coagulated Canadian Transport Commission-call it what you wish-


Gordon Minto Churchill: Hellyerised?


John Whitney Pickersgill: -which would take over the functions of the Board of Transport Commissioners, the Air Transport Board and the Canadian Maritime Commission as well
as assuming certain other functions not now performed by any federal agency in cases where it is necessary. This is one of the things the government is recommending and it is part of the principle of the bill. This commission is to be the agency through which regulation and control would be exercised over the various forms of transport which are under the jurisdiction of parliament in so far as parliament deems it fitting to impose regulation and control.
I also consider that the rationalization of the railways along the broad lines recommended by the MacPherson Commission is a principle of the bill and that second reading would constitute acceptance of it. But I do not consider that any of the details are being accepted by the house if hon. members give the bill second reading. I entirely agree with the right hon. gentleman that this is a highly complex measure and that in the task before us we should give full weight to the views of every interested party in this country. Such is the importance of this legislation to our national life. I am sure no one will ever accuse me of backtracking or retreating if I accept suggestions made in good faith by hon. gentlemen opposite. I believe this is the proper way to deal with legislation of the kind before us.
After the most mature consideration that it was possible to give if we were ever to have any action, the government has come to the conclusion that there should be one transport commission and that there should be a rationalization of the railways along certain lines. As to the detail, however, I will say only that if there can be improvements, no matter by whom they are put forward, I hope they will be accepted by the committee. I hope too, that when this bill comes back from the committee to this chamber, some time in October, I trust, for third reading in October or November, it will be a better bill than it is now.
Having said that, I think I should go on to deal particularly with the speech made by the Leader of the Opposition because, in a way which is not always his way-and I know he will not think I am being unfair in saying this-he spoke rather succinctly today. He made his points with clarity and definiteness, and his speech is therefore not only an easy one to reply to but also a pleasant one to reply to.
One of the points he made was raised earlier by a number of hon. members. I notice he did not suggest that this bill was

September 8, 1966

introducing any new kind of discrimination. But he did refer, if I caught his words correctly-if I did not I am sure he will correct me-to "continuing discrimination" against the maritimes, the west, and the northern parts of Quebec. He will understand me if I say "the Atlantic provinces" instead of "the maritimes", because I am sure this is what he meant.
I can assure hon. members that to the best of my information there is no discrimination of any kind in this bill against those areas. But there is, of course, a continuance and even some expansion of-I suppose this is the right word-discrimination in the interest of fairness in favour of those areas as part of the historic policy which not one but successive governments have followed.


Eric Alfred Winkler: May I interrupt the minister to tell him that the fear which exists for us in Ontario, in the light of the rate structure to the west of the province as well as in northern Quebec, is that discrimination will be directed against us? If the railways are to be given the right to open their rate structure the people who are already paying more than their fair share are likely to be saddled with a heavy burden of new increases simply because they find themselves in the only areas which will be open to such discrimination.
[DOT] (4:20 p.m.)


John Whitney Pickersgill: I would prefer to come to the hon. gentleman's point a little later. I have it very much in mind. It is a point I intend to deal with but first I am very anxious to make this point over again, one which I have made several times. I have even been accused of smuggling it into the speeches of hon. gentlemen opposite, although I think I have always politely asked for permission before making any interjections.
I wish to make it clear that this bill in no way touches the Maritime Freight Rates Act which remains the law of Canada, remains in full force and effect and will remain in full force and effect unless and until the parliament of Canada changes it. It is not affected in any shape or form. That is the first point.
The second point is that the rates which were frozen in 1959 under the Freight Rates Reduction Act, an act which has not been continued but which the railways have followed voluntarily for a number of years, are also to be continued for a two-year period because during that two-year period the government expects to receive the report of the
Transportation
study now being undertaken on transportation generally in the Atlantic provinces and expects to be in a position to deal with that problem within that time. I would also point out that the Atlantic and Eastern Rates structure on export grain, which was never protected before, will be protected under this legislation in the same way as the Crowsnest pass rates are protected in order that there will not be any discrimination against the Atlantic ports in the export of grain. That is something new in this bill.
In so far as the historic rates in western Canada are concerned, the Crowsnest rates are not only not touched in any way but they are guaranteed indefinitely by this legislation.


John (Jack) Henry Horner: Would the minister permit a question on that point? If the Crowsnest pass rates are guaranteed forever and a day, why is there a particular clause in the bill saying that a three-year study will take place?


John Whitney Pickersgill: That is a very simple question to answer. Mr. MacPherson said that the Crowsnest rates were costing the railways a considerable sum of money and he was asking the government to pay something over $20 million to the railways because of these losses. We are not willing to agree that there are any losses. We are going to have a three-year study to find out if there are any losses, and if it is found after that study that there are losses then the commission may recommend to the government that something be done about those losses to the railways, but the commission cannot recommend that anything be done about the Crowsnest rates themselves.
This is following precisely the general provisions of Mr. MacPherson's recommendation that if for national reasons we ask the railways to perform a service that does not pay, then the treasury should pay for it. That is one of the basic concepts of the rationalization that is provided for in this bill, but we were not willing to accept the view that the MacPherson recommendation was a fair measure of the loss in this instance. We are not willing to accept the view that there is necessarily any loss. It is the intention to have a scientific study made, and if there is no loss the railways will get nothing.


John George Diefenbaker: Would the minister allow another question?


John Whitney Pickersgill: Just before I do I wonder whether hon. members would undertake not to restrict my time?

September 8. 1966
Transportation


John George Diefenbaker: This is just one question on the subject of the Crowsnest pass rates which, as the minister knows, are the charter of the westerners. Would the minister be prepared to have a clause placed in the bill saying that the Crowsnest pass rates shall not be altered?


John Whitney Pickersgill: If it not sufficiently clear already and if that would add any additional guarantee I would not hesitate for one minute. Mr. Speaker, before I allow any further questions may I point out that I believe I am allowed to speak for only 40 minutes. If there could be a gentlemen's agreement-


John George Diefenbaker: No limitation.


Stanley Howard Knowles: Another one of those things?


John Whitney Pickersgill: -or even an order of the house that I could speak until I run down, then I would be delighted.


John George Diefenbaker: Mr. Speaker, all of us are
tremendously interested in the minister, his works and words, and I am sure this does not need an order of the house. We want to hear him to the last word.


Stanley Howard Knowles: We would like to see the time when he does run down.


John (Jack) Henry Horner: In view of the generous attitude of the house would the minister permit another question?


John Whitney Pickersgill: Certainly.


John (Jack) Henry Horner: In connection with the Crowsnest pass rates and the proposed new section 329 which states that the commission shall report to the Governor in Council and the Governor in Council shall take such action as he deems necessary in view of that report, would the minister be willing to change that to provide that the commission shall report to parliament and that parliament may take such action as it deems necessary?


John Whitney Pickersgill: Mr. Speaker, I think I was rude enough to interrupt the hon. member for Peace River (Mr. Baldwin) to make the point that if there was any doubt about the meaning of that clause, any suggestion that the Governor in Council could take any action without parliamentary approval, I would be glad to have the clause changed. I do not believe there is anything the Governor in Council could do about the matter without parliament anyway.
[Mr. Pickersgill.l


John (Jack) Henry Horner: We see it happening in other departments.


John Whitney Pickersgill: I do not mind the hon. gentleman asking me questions but I wish he would let me make my own answers.


John (Jack) Henry Horner: I had the same trouble when I was speaking and you were asking me questions.


John Whitney Pickersgill: Mr. Speaker, I think this is important enough that I should make it clear that if there is any doubt at all about the real meaning of that clause I certainly want to remove it. I want to say categorically that there is no intention and no desire to leave any doubt in anyone's mind that the Crowsnest pass rates remain a part of the continuing policy of the government and of parliament, consecrated in legislation, and the only way in which the commission can deal with this matter is to find out scientifically, notwithstanding the hon. member for Crowsnest, by cost analysis, done not by the railways but done for the government what, if any, losses there are, and all that can be done then is for the government to decide, if it wishes to decide, to ask parliament to do something about those losses. That is all.


Mr.   Kindi@: Would the minister give a very simple answer? I say that the bill is not clear as it now stands. Is he willing to make it clear before we pass second reading?


John Whitney Pickersgill: Well, I think if I could just say yes to that about four times-before second reading it is impossible, but before third reading, yes, yes, yes, yes.


Some hon. Members:: Hear, hear.


Mr. Baldwin:: That could become a habit.


Robert Carman Coates: May I ask another question about the Crowsnest pass rates?


John Whitney Pickersgill: I think in fairness to the Leader of the Opposition I should be allowed to reply first to the points he made, and if I do not make my answers clear then I would be very glad to answer any other questions that are relevant.


Louis Ralph (Bud) Sherman: By four words, all yes.
[DOT] (4:30 p.m.)


John Whitney Pickersgill: Well, I am a yes-man; everybody knows that. The next point made by the Leader of the Opposition is a crucial one, a very crucial one indeed. He said that if there was no amendment to this bill the
September 8, 1966



railways would be all-powerful in the setting of rates. This is the first time I have to take issue seriously with the Leader'of the Opposition, but I have to take very serious issue because nothing is clearer than that the railways do not have the power to set rates except below a maximum in every case where someone can show he is a captive shipper. Any person, such as the shippers of potash who obviously cannot ship by truck or by any other means, obviously is a captive shipper. Every captive shipper is protected under this bill by a maximum rate. The railways will have no freedom to set a rate above this maximum. They will have freedom to give a lower rate than the maximum. Indeed, most large captive shippers today, by having agreed charges with the railways, do have rates which in fact I believe are somewhat lower and in some cases quite substantially lower than the maximum rate.
I do expect that in the committee we will have very serious debate about the maximum rate formula. It is a very large question and perhaps is a little more important to the prairies than to other parts of Canada, but not much. It is very important to many shippers in northern Ontario and in northern Quebec. As I say, when we come to examine this thing carefully I think we will find that most of those shippers will have protected themselves already by agreed charges, because they are very big shippers who have a considerable bargaining power of their own.
The only area in which the railways will be free under this legislation to set their rates is where there is effective competition. In our opinion, and in the opinion of Mr. MacPherson and also in the opinion of the previous government as reflected in the legislation they were about to introduce, effective competition will itself provide protection because nobody is going to be such a fool as to pay a higher rate to the railways than he can get from trucks, ships or any other effective competitor. Surely that is just ordinary common sense.


John (Jack) Henry Horner: Mr. Speaker, would the minister permit another question on this particular part of his remarks? Would the maximum rate apply just as effectively on goods shipped under class rates?


John Whitney Pickersgill: The maximum rate will apply to anyone who has no effective alternate way of shipping.


John (Jack) Henry Horner: If he is shipping goods under class rates I understand that the
Transportation
railways can raise the rates as high as they like.


John Whitney Pickersgill: They cannot raise any rates higher than the maximum formula in the bill, if the shippers are captive. If they are not, they can ship in some other way.
I really think, Mr. Speaker, if we are going to get into a debate on the detail of the bill-the kind of debate which should properly take place in committee-the tolerance of the house will be exausted before I am. I should not like that unfortunate situation to arise.


John (Jack) Henry Horner: Mr. Speaker, I should like to ask one final question. How would the maximum rate apply on less than carload lots? It will be a lot higher on less than carload lots even if the maximum formula is used.


John Whitney Pickersgill: Not being an expert on these matters I would not attempt to give an answer to that. I am sure, however, that the hon. gentleman will be able to obtain an answer from someone far more competent than I ever will be in this field when we get into the consideration of this matter by the committee. What I am seeking to do here is to allay fears based on what I believe to have been genuine misunderstandings about the bill. The fact is that there will be, after this bill is passed, three or four different kinds of freight rates. There will be rates which are protected by the maximum rate formula, because the shipper can make no bargain of his own with the railways and therefore has the protection of the law. There will be agreed charges which are not in any way changed from the law as it now stands. There will be statutory rates such as the Crowsnest pass rates, the maritime freight rates and certain others. There will be competitive rates which will be based on the railways' judgment in respect of how they can get the business.
There is one very important thing I should like to say about these competitive rates, and this also deals with another point made by the right hon. gentleman. I refer to the question of the competition with trucks. In this bill it is provided that the railways must not carry goods at unremunerative rates. In other words, they must charge what it costs the railway to carry the goods. This is put in precisely because we do recognize that the railways are large and powerful and that many of their competitors will not have the same economic bargaining power. Therefore

September 8, 1966
Transportation
they are not allowed to use loss leaders to put people out of business.
Under the present law a competitor has no effective appeal. In this bill a trucker, believing the railway is seeking to put him out of business by quoting unremunerative rates, may appeal to the commission and have the matter adjudicated. So there will be a protection which does not exist at the present time. I think this is very important, because it would be a very bad thing indeed to permit a railway or any other powerful body to crush competition by this kind of practice and then find themselves in a position to raise rates again. This is a valuable protection.
The railways do not have any similar protection against the truckers. At the present time we do not think that is necessary because I do not think there are any trucking firms in Canada large and powerful enough to put the railways out of business. If they started charging unremunerative rates for any length of time, I imagine the people who would be put out of business would be the truckers themselves. What we are endeavouring to do is to make the bargaining powers relatively even in this connection.
A question which does arise and seems to bother a good many people has to do with the suggestion by me, by the Prime Minister (Mr. Pearson) and by others that this legislation will permit the railways to earn more money than they are earning at the present time. Everybody seems to assume that the only way they can do that is by raising rates. I do not have any doubt that they will raise some rates if they can raise their competitive rates and still obtain the business, and I do not see why they should not because everybody else is allowed to do it. I do not see why they should not be allowed to go out, compete for business, take the burden off the taxpayers and let the users pay so long as there is an alternative for the shipper. I do not think this will happen especially in western Canada; I do not think it will happen especially in central Canada. I think it will happen all over the country.
I think the main virtue of this legislation is that the railways will be able to make bargains right away instead of having to file tariffs, wait 30 days, and be shackled by many things which make it impossible for them to run their railways in a business-like way. I would guess that much of the additional revenue they will get may come from cutting rates, not from raising them at all but

cutting them enough to get some of the business back.
[DOT] (4:40 p.m.)
We all know that the share of the freight that is being carried by the railways today compared with what it was before 1950 is lower. It is in fact very much smaller. This measure will give the railways a chance to compete. I think all those in the house who believe that competition and what we usually call freedom of enterprise are a good thing for the progress of the country should welcome this legislation. We are doing our best to see that there is complete protection for those who are not protected by competition. Where there is a monopoly situation the bill gives protection. Where there is a competitive situation we think the competition should give the protection. That is the attitude adopted to all other kinds of businesses and it does not seem an unreasonable one to take with respect to freight rates.
With respect to branch line abandonment the right hon. gentleman made an appeal to me to do something that I cannot do. He made an appeal to me to say here and now that the railways would withdraw their applications for abandonment right away, today. I assured the hon. member for Qu'Appelle the other day that the presidents of the railways had authorized me to tell the house that they would withdraw all these applications on the day on which this bill was passed by parliament. I think that was a reasonable position for them to take, because if the bill did not pass they would be just prejudging their position under the present law. Surely in fairness to them, until they know what parliament is going to do they should not be expected to withdraw these applications. But I do intend, as I told hon. members, early next week, I hope, or at any rate by the middle of the week to be able to send to every member of parliament the map showing the branch lines on the prairies, in fact, the whole network of lines, that the government intends, if this legislation passes, to guarantee will continue in operation until January 1, 1975. This map will show the network on which no applications will be considered for abandonment once this law is passed.
I should like to have given this map to hon. members today but I think I explained at the beginning of the debate, and this still applies, that there are one or two details I have to iron out with the officials and my colleagues before it is in final form. But it will be, I
September 8, 1966

confidently hope, published next week and I am very anxious that it be published. I believe that when it is published nearly all the fears about the abandonment of branch lines will disappear. There will be certain lines that will still be candidates for abandonment, but even the candidates for abandonment will not automatically be abandoned. There will still have to be applications which will still have to be considered by the commission, and the protection of the law will still be there in respect of those lines.
The hon. member for Qu'Appelle was very helpful and constructive in this matter, as he has been in general with respect to this legislation. While the hon. gentleman did not agree with all the details of the branch line proposal, he felt that in general it will result in a very marked improvement in this connection. Now I come to potash. 1 am sorry the Leader of the Opposition-


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


Some hon. Members:: Carry on.


Mr. Deputy Speaker:: Does the house give unanimous consent to the minister to continue?


Some hon. Members:: Agreed.


John Whitney Pickersgill: I come now to potash. In the main I have dealt with this matter before, but I thought of a feeble joke and I am terribly sorry that the Leader of the Opposition is not here. I was going to say, if he had been here, that there is a lot more alkali in Saskatchewan than there is in Manitoba and that is probably why we from Manitoba have sunnier dispositions than they have in Saskatchewan.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: However, since the Leader of the Opposition is not here I will not say it.


Mr. Fairweaiher:: Mr. Speaker, may I ask
the minister a question?


John Whitney Pickersgill: Yes.


Robert Gordon Lee Fairweather: We have just given the minister unanimous consent to carry on. Must we put up with his jokes?


Some hon. Members:: Oh, oh.
Transportation


John Whitney Pickersgill: It will be singular, Mr. Speaker, in more senses of the word "singular" than one. Potash is protected because up to the present time the companies mining potash are all captive shippers. Therefore they will either have agreed rates or the protection of the maximum rate. I feel reasonably confident that practically all of them secured agreed rates from the railways before they ever started mining operations.
Now I come to the question of research. I want to thank the right hon. gentleman for what he said about this subject. He was very helpful about it when my estimates were before the committee of supply earlier this year. He has reiterated what he had to say about the subject, and it is something with which I thoroughly agree. I think it is frightfully important that we carry out adequate research in a field which from a material standpoint is as important as any to the development of our whole country. I agree with the right hon. gentleman about the importance of research in the Atlantic region. We are doing some right now of a very fundamental character. This was recommended by the MacPherson Commission and I hope it will be very fruitful in its results.
I am sure the premier of British Columbia will not like what the right hon. gentleman said about there having been no improvement in the railway structure in British Columbia for 50 years, because the great pride of the premier is his own railway, the Pacific Great Eastern. I also agree that the port of Vancouver is the main funnel through which about one-third of the exports and imports of this whole country now come or go. It is our second largest port. The facilities there are not adequate. We are trying to improve them as fast as we can, and we cannot do it too fast. I think all of us worry, after some of the recent experiences we have had, about the problem to which the right hon. gentleman referred, and I believe that the research now being carried out will have to be augmented by still further research.
I am also most interested in what the right hon. gentleman said about the megalopolis extending from Quebec to Windsor and the importance of the new problems of transportation in that area. I also want to put in a word, since the right hon. gentleman did not do it, for the prairies. It is of the utmost importance that we modernize-and here I am echoing the hon. member for Qu'Appelle-the grain handling facilities on the prairies because, as he so rightly pointed out,

September 8, 1966
Transportation
we have every reason to expect that the much higher volumes of grain produced in the last few years will, although there may be variations from one year to another, continue indefinitely into the future and that there will be a market in the world for what is produced.
I think that covers all the points that were made by the right hon. gentleman. I have trespassed longer than my 40 minutes on the good nature of the house. If there are no additional questions that any hon. member wishes to put to me for the elucidation of this matter before second reading, I should like to conclude in one or two sentences.


Gordon Minto Churchill: Mr. Speaker, in view of the fact that the bill is on the point of being given second reading and the minister has concluded his remarks, I wonder whether I might ask him a question, recognizing that he is an experienced parliamentarian. We have now spent the equivalent of three and a half days discussing one of the largest bills to come before us. Is the minister in agreement with me that this is the amount of time the house should spend on a matter of this importance and that there was not a filibuster of the legislation? I wondered what the minister's comment would be on that in view of his experience in this chamber.
[DOT] (4:50 p.m.)


John Whitney Pickersgill: I think my silence on this subject up till now has surely been my best comment. I have endeavoured in every way possible during the course of this debate, by taking advantage of the new rules, to make sure that every hon. member who had something which he considered would be a worth-while contribution to this debate would be given the chance to do so. I recognize fully the importance of the subject and certainly I have no complaints whatsoever.


Robert Carman Coates: Mr. Speaker, I have a short question to ask the minister with regard to the freeze on freight rates in the Atlantic area for the next two years. Could the minister give us some indication and some assurance that before any final action is taken on the recommendations flowing from the study they will be placed before the house so that members may be able to express their views on them? I think the minister appreciates the fact that at the present time the Atlantic provinces are attracting a great deal of industry and I am sure he is anxious, as I am, to see this continue. However, I am afraid that a two-year freeze is not sufficient. This will not

help to convince industrialists that they should establish their companies in these provinces, because freight rates are a very important aspect in their decision to do so. It is from this point of view that I ask the minister my question.


John Whitney Pickersgill: I can assure the hon.
gentleman, without even knowing what will be reported by the consultants who are now doing the study, that it is my intention to make the study public as soon as it is received. These studies are similar to the report of a royal commission, although the consultants do not carry out public hearings in the same kind of way. However, I do not regard these consultants as advisers merely to the government. I indicated that very clearly in the letters that I wrote to the premiers of the Atlantic provinces before the study was undertaken. I intend to make this study public and I anticipate that legislation is likely to be based upon it. In any case, if I am in a position to do it-and none of us knows what his fate may be from day to day in this house-and if any group of hon. members would seriously like to see the study itself referred to some parliamentary committee for further examination, I will be very glad to facilitate that.
There is nothing I want more than to make sure that we do the right thing in respect of this problem which was not dealt with by the MacPherson Commission because they d d not have the time but which they said was an urgent problem to be dealt with and which I believe to be one of our biggest national problems. I would like to think that I will contribute something to its solution.


Robert Carman Coates: Mr. Speaker, I wish to make one further comment in this regard. The minister, in his very capable way, appears to be giving us an assurance but at the same time he did not come directly to the point I raised and in which I am most interested, namely, an assurance from him that the house will have the final say on these recommendations. I think that if we had this assurance we would feel much better about the legislation that is now before us than is the case at the present time.


John Whitney Pickersgill: If I understand the parliamentary process correctly, there is very little the Governor in Council can do about a matter of this kind except to bring in some kind of legislation or estimates before the house. Happily, in this country the government cannot appropriate money, and if it
September 8, 1966

tries to do so without the approval of parliament there is another institution in the country where the ministers who do that kind of thing are apt to end up.
I am not trying to equivocate in any way. I am merely trying not to arrogate to myself, as one minister, authority which I do not have and to show proper respect (a) for my colleagues in cabinet and (b) for parliament itself. However, I can assure the hon. gentleman that, apart from purely administrative matters on which the law is now quite clear and where improvements might be made quickly when the study is received, anything of any substance or importance which would require any kind of parliamentary action will be brought before parliament as soon as the government is able to make up its mind on what is the proper thing to recommend.


Robert Carman Coates: Mr. Speaker, I would like to make it clear to the minister that I do not want to be put in the position of adopting legislation which will place the super board after the two years are up in a position of being able to implement the recommendations without prior acceptance by parliament.


John Whitney Pickersgill: The commission will not be another parliament. It will have no power that parliament has not given to it by this bill. If, on examination of the bill in committee or by questioning the expert, the hon. gentleman can find anything which the commission could do that would go behind the back of parliament, I will undertake to do my best to get the lawyers to draft a clause so as to make sure it cannot be done.


Eric Alfred Winkler: I wish to put a question to the minister following the one I put to him earlier. Has the government considered at any time the possibility of implementing some plan, particularly in the province of Ontario, in view of the fears which I have expressed earlier in regard to rate structures, whereby areas outside the "golden horseshoe" or southern industrial area would have a greater inducement to expand and to attract industry through a rate structure based on a mileage formula? Has the government considered such a plan rather than continuing the discriminatory method they have used in applying the designated area program? I believe the minister would be doing a great service to that province by considering such a plan, if he has not already done so, in the terms of this particular bill.
23033-519J
Transportation


John Whitney Pickersgill: I am not sure I grasped completely what the hon. gentleman is trying to say, but I can assure him that I shall be only too happy to contribute to the well-being of my native province of Ontario.


Mr. Kindt:: Mr. Speaker, there is a feeling, and I have received telephone calls substantiating it, that if we are not careful we may be buying a pig in the poke on second reading of this bill. I am willing to take at face value the assurances which the minister has given us. I am glad he gave them because some of us were not very happy with the national news broadcast last night when Mr. Cameron said we were filibustering this bill. The minister himself has stated that this is one of the most far reaching bills that has ever come before parliament and that it requires a long study. I am of the opinion that we have not even scratched the surface in the time that has been given us to consider it. The three days we have spent in debate on this bill are little or nothing compared with the time which will be needed before this bill is finally adopted.


John Whitney Pickersgill: Mr. Speaker, the hon. gentleman's intervention seemed to be a question as to whether more time will be needed on this bill. Last night I asked the hon. member for Winnipeg South Centre (Mr. Churchill) if he would quote the concluding sentence of a paragraph of which he flattered me by quoting the first sentence. In the concluding sentence I said something like this, that the bill would require long and laborious examination at the committee stage. This remains my opinion, fortified by the very penetrating analyst of the hon. gentleman who has an expertise in this matter most of us in the house have not got and that all of us appreciate.
[DOT] (5:00 p.m.)


Mr. Danforth:: May I ask the minister a question? I know the minister is anxious to get this bill before a committee as soon as possible. In view of the great complexity of the bill, have I the assurance of the minister that there will be ample copies available right away to cope with the tremendous demand that I foresee for this bill from interested parties?


John Whitney Pickersgill: I will take every step that it is possible for a minister to take in respect of the responsibility of one of his colleagues to see that that happens and that it is available in both languages.

September 8. 1966
Transportation


Mr. Nowlan:: I have a supplementary question. Can the minister give the same tour yeses on the maritime freight rates as he is prepared to give on the Crowsnest pass rates?


John Whitney Pickersgill: I do not believe I would give it in exactly the same way, and I do not believe the hon. gentleman would want me to if he would refresh his memory by taking another look at the report of the MacPherson Commission. I think the way I would like to give the undertaking is that I will never be a willing party to any alteration in the Maritime Freight Rates Act that the people of the Atlantic region generally do not consider will give them greater benefits than that act gives. In view of the changes in transportation, in view of the development of highways and trucking and all the other forms of transportation, it might be concluded by everyone there, after a study has been done and after the commission has examined the whole problem, that the amount of money that parliament appropriates annually under the Maritime Freight Rates Act at the present time, to help overcome the transportation disability of the region, would be better used in a slightly different form but without reducing the quantity or value of the aid. I would never under any circumstances be a member of any government that ever did that.
I had hoped it might have been possible to include in this bill one provision or section that I have not found it possible to put into the bill. Hon. members from western Canada, hon. members who live anywhere along the national transcontinental railway or the Intercolonial Railway or the Prince Edward Island railway or the Newfoundland railway, know that the main line of the Canadian Pacific Railway under the original agreement made in 1880 and covered by the statute of 1881 is exempt from local taxation, and that it is not competent for the municipalities to tax the property of the federal crown, and that railways owned by the crown cannot be taxed. It has been the custom in the case of government owned railways, as distinguished from other parts of the Canadian National system, for the Canadian National to make some grants in lieu of taxes. It will be the intention of the government when this legislation has been passed, as a contribution toward the process of rationalization and equal treatment for all parts of Canada, to instruct the Canadian National Railways to make payments to these municipalities as

though they were taxable. We have the power to do that without express legislation.
In so far as the Canadian Pacific Railway is concerned, I should like to read a document which I think all hon. members, and especially those who live in the southern part of the prairies, will regard as an historic document. It is headed, "Canadian Pacific Railway Company, Montreal, August 29,	1966." I
quote:
Dear Mr. Pickersgill:
You will recall conversations we have held oyer some months relative to whether as a contribution to the rationalization of Canadian transportation legislation, Canadian Pacific would be prepared voluntarily to forgo perpetual exemption from municipal taxation provided in clause 16 of its contract of 21st October, 1880, which is the Schedule to the Canadian Pacific Railway Act, S.C. (1881) Chap. 1.
This exemption from municipal taxation applies to the main line of Canadian Pacific outside of the boundaries of the original "Postage Stamp'' province of Manitoba, across Saskatchewan and Alberta. This exemption has contractual, statutory and constitutional validity.
One of the points that you raised in our discussions was that the exemption imposed a burden upon the affected municipalities which is not borne by other municipalities on the Canadian Pacific system. You also raised the point that a perpetual provision such as that referred to did not take into account changes and varying circumstances which had occurred in the many years since the contract was executed by Canadian Pacific and the government of Canada.
I have discussed the matter with the directors of the company and they have authorized me to say that, under the arrangement hereinafter mentioned, the company is prepared to forgo voluntarily perpetual exemption from taxation by the local authorities on our main line in the prairie provinces in three equal stages: one-third for the year commencing January 1 after legislation is enacted modernizing and rationalization existing legislation and taking into account, among other things, the effective changed conditions on freight rates otherwise fixed; a further one-third in the succeeding year; the balance in the third year from the commencement of the period as stated.
The Canadian Pacific proposes that the government of Canada ascertain from the municipalities involved the municipal taxes that would have been payable, subject to statutory procedures as to assessment appeals, had the exemption not been in effect. When this amount has been determined, Canadian Pacific would make a grant of an equal amount to Her Majesty the Queen in the right of Canada for distribution to the municipalities involved in such manner as the government of Canada might from time to time deem appropriate.
At any time after the expiry of the period indicated above, the Canadian Pacific would have no objection to action being taken to amend the constitution and the legislation to terminate the perpetual exemption from local taxation referred to.
You are free to make the position of Canadian Pacific public whenever it seems to you desirable to do so in the public interest.
Yours very truly,
Ian D. Sinclair.
September 8, 196G

I should like, if I have the permission of the house, to table this communication in English and in French and ask that it be appended to today's Hansard.


Mr. Deputy Speaker:: Order. Does the minister have consent to have this document made an appendix to Hansard?


Some hon. Members:: Agreed.


John Whitney Pickersgill: If I could just say a word in explanation of the way in which this has to be done, I may say it appears from the best legal advice the government is able to attain that this perpetual exemption from taxation enjoyed by Canadian Pacific on its main line is part of the constitution of Canada and also part of the constitutions of Manitoba, Saskatchewan and Alberta. It is not competent for this parliament by a simple act of parliament, under the constitution as it now stands, to make this change. An amendment would be required also to the constitutions of those provinces. For that reason it is not possible for this parliament to make the Canadian Pacific main line subject to taxation, nor is it possible for the provincial legislatures to do so.
This is just one more good reason why we should tidy up our constitution so we can do these things ourselves in the proper way. In effect what Canadian Pacific is doing is to say that over the three years after this legislation comes into force they will give up the perpetual immunity they were given under very different circumstances in the 1880's. I am sure that all members, whatever their views may be about some of the other things which the Canadian Pacific has done, will agree with me that this particular act is an act of good corporate citizenship.
[DOT] (5:10 p.m.)
Now, sir, I just want to conclude in a few words by thanking hon. members for listening to me for so long and to express the hope that in committee we will give this legislation the most searching examination that is required in the national interest but that we will seek to do that without undue delay having regard also to the importance, through this legislation, of putting the railways in a position to conduct their operations in a more businesslike way to make them more competitive with other forms of transport and therefore better able to rely upon their own resources in dealing with the public, their employees and everyone else. In doing so, it would be my hope, Mr. Speaker, that among
Supply-Finance
other things this legislation would make collective bargaining between the railways and their employees more meaningful than it has been in recent years.


Maurice Allard: Mr. Speaker, before he introduced this bill, last Tuesday, the minister stated in the house that the government or himself had written to the ten provincial governments and that replies
had been received.
Now, here is my question. In those replies, has any provincial government expressed concern or reservations over the establishment of a Canadian transport commission, and what was Quebec's reaction?


John Whitney Pickersgill: Mr. Speaker, I will be very glad to table tomorrow all the correspondence. I would do it today only I have not got it with me.


Mr. Deputy Speaker:: Is it the pleasure of
the house to adopt the said motion?


John (Jack) Henry Horner: On division.
Motion agreed to on division, bill read the second time and referred to the standing committee on transport and communicatibns.

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



DEPARTMENT OF FINANCE

[Stage Direction]
1. Departmental Administration including administration of the Guaranteed Loans Acts and the Inspector General of Banks' Office, and payments to provinces and grants as detailed in the Estimates, $4,332,900.
Stanley Howard Knowles: Mr. Chairman, before the minister begins and in order that his speech will not be interrupted, in fact, in order that this debate will not necessarily be interrupted, I wonder whether we could have one or two understandings?
In the first place, I think the committee would not want to go to private members' hour in the midst of this important discussion. In the second place, I wonder whether we could have an understanding that we would take an hour off for supper?


Some hon. Members:: Agreed.


John Whitney Pickersgill: Let us fix the time now.

September 8. 1366
Supply

Finance


Mitchell William Sharp: Mr. Chairman, may I just say a word on this. My statement is of some length. I think I shall probably complete it by six o'clock and it would seem to me that it might be appropriate then to adjourn for dinner.


Stanley Howard Knowles: Can it be understood that at whatever point the minister concludes his speech we will take an hour off by agreement?


Herman Maxwell Batten: Does the committee now agree that when the Minister of Finance has completed his speech the committee will adjourn for one hour?


Some hon. Members:: Agreed.


Mitchell William Sharp: Mr. Chairman, the fact that the committee and the government regard the threat of inflation as an important and urgent matter is evidence that Canada will not drift into a period of continually rising prices and costs. As Minister of Finance with a special responsibility for the economic position of this country I welcome the opportunity afforded by this debate to place the facts of the situation before hon. members of all parties and before the public.
I might add, Mr. Chairman, that it is a remarkable but perhaps not surprising coincidence that today President Johnson has announced new steps that the United States is taking to curb inflationary pressures, some of these, I might add, of a character that we took some six months ago. I believe this indicates that throughout North America and throughout the world this is a matter that does demand the attention of legislators.
Here in Canada we have had a long and strong economic expansion in the past five and a half years. It has carried us from a condition of serious and persistent unemployment to one of widespread prosperity and virtually full employment. There is still too much unemployment in certain areas and among those who are poorly educated and unskilled, but this arises from reasons other than a shortage of opportunities in Canada taken as a whole. The total expenditures of money by consumers, by business, by government and by those who want our exports are now more than adequate to support a healthy level of economic growth.
Our main economic problems are now twofold: First, the longer term problems of educating and adapting our growing labour force and improving our capital resources to meet the opportunities presented in our modern world and, second, the shorter term problem

of preventing excessive total expenditures and excessive increases in prices and in costs of production. It is this second range of current problems which concerns the committee today and about which I will speak.
Canada's general record in regard to prices and costs during the past 30 years has been good. Our war finance and wartime price and wage control were effective and reasonably fair. During the period of decontrol and readjustment to peacetime conditions we suffered some inflation, as everyone else did. Much of it was inevitable as we readjusted to price levels in the United States and elsewhere.
During the Korean war in 1950 and 1951 prices rose too rapidly in Canada as well as elsewhere. I think now that we all should have done more to check them. Since that time, from 1952 until about a year ago, our prices were reasonably steady, rising over the period by an average of 1.4 per cent per year in the case of consumer prices, which was less than that of almost all other countries although slightly more than the United States.
[DOT] (5:20 p.m.)
This period covered the boom of the midfifties, the period of relatively high unemployment of the late fifties and early sixties and most of the recent long period of expansion. Over this period average hourly earnings of Canadian workers increased by an average of about 4 per cent per year, as shown by our statistics, and average personal incomes per capita for all Canadians by 4 per cent.
By the middle of last year it was evident that costs and prices in the field of construction were rising too rapidly, and in the summer of 1965 the government began to cut back its own construction programs to counteract this and urged others to do the same. We have kept this policy of restraint since that time, though it has not achieved as much success as I would like to have seen.
Speaking generally, Canadians have been very impatient to get on with very many things both directly and through their governments and now we are paying the price of trying to do too much all at once.
During the past 12 months the increases in costs and prices have been spreading in Canada as elsewhere. The chief cause is the continued rapid growth of total expenditures and a very high level of demand, which make it possible for labour and business to demand more and get it. There are Canadians in
September 8, 1966

almost all walks of life who seem to have reached the conclusion that now is the time to get more while the getting is good. As a result we have had accelerating increases in prices and costs, accompanied by urgent and pressing demands by special groups for more income, using whatever means are open to them.
We have now reached a position that is unstable. The present trends just cannot continue for long into the future. We cannot all get what we want and do what we want, and if everyone tries there is going to be an excessive rise in prices and in costs because right now the country just could not, no matter how hard it tries, produce enough to meet all the demands. If this kind of boom goes on, many will suffer as a result of higher prices and from the inevitable upset that will follow. All Canadians will suffer if a continued boom should lead to a bust. We must moderate our pace so that we can continue to grow in a steady way, with a continually increasing standard of living and with the economic and social improvements that we can afford year by year. Such moderation does not require that we cease to make progress toward social justice nor that those who have lacked opportunities must be left without help.
I should like to make this point because sometimes I think it is misunderstood. We in this country are the most fortunate people in the world. We have the means to make progress but we have got to pace our progress so that we do not exceed our means.
Let us bear in mind some simple facts. We are now producing about all we can in Canada this year. We have excellent market opportunities at home and in other countries. We have again been lucky in getting huge grain crops at a time when grains are in great demand. Our labour force is growing at a rate of a bit over 3 per cent a year and is becoming better educated and trained. Our productivity-the volume of goods and services per worker that we can produce-is growing somewhere between 2 and 3 per cent a year over all. Canadians can expect an increasing standard of living, on the average, which increases at a rate that bears some relationship to their average increase in productivity, say about 3 per cent a year over a long period.
By international standards this is a reasonable rate of increase. There are many countries that envy us very greatly. Those are
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countries where standards of living are not rising at all because population is rising even more rapidly than the means of production. In Canada this rate of increase in productivity involves the doubling of the standard of living of the average Canadian within a generation. We have no reason to be anything but thankful to live in a country such as Canada.
If, however, some succeed by the strength of their position in getting substantially more than this increase in real income from year to year, others must get less than this increase. This applies to the owners of companies that sell goods to earn profits as well as those who sell their labour to earn salaries and wages.
We must also recognize that the average Canadian, although he is a fortunate citizen of the world and can look forward to a steadily rising standard of living, cannot have the same standard of living as the average United States citizen-at least not for some years. We just do not produce as much-we have not the same productivity in our industry-and we are not as rich in capital and technical capacity.
Our prices and wages are the result of bargaining and of market forces and of the efforts of individuals, businesses and groups to better their position. Prices are not held under control by governments either federal or provincial, apart from minor exceptions such as public utilities which enjoy monopoly positions. There are laws to prevent businesses from combining to increase or maintain their prices and profits. Such laws do not apply to workers, however, who are not only permitted but encouraged to organize and bargain collectively. This is one of the cornerstones of modern industrial democracy. On the whole this system has worked and has enabled great progress to be made in improving the incomes and status of workers. Parliament is engaged this session in setting up a framework for the extension to its own civil servants of this power to organize and bargain collectively, so it is clear we think well of it in principle.
Our experience this year, however, shows that these processes, whether they are the processes of making profits or the processes of bargaining for wages or salaries, by which Canadians increase their incomes have dangers as well as virtues. They can bring about excessive demands and excessive increases. They can promote inflation at the high levels of employment and low levels of unemployment which we have now achieved. It is clear

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that if we are to succeed in maintaining high employment with price stability we must improve the working of our economy. We do not want to be forced to aim at a lower level of employment in order to avoid inflation. To me, this is the kind of cure for inflation that could be almost as bad as the disease and is to be avoided if at all possible. But to maintain high levels of employment without inflation is not a task for the government alone. It is only possible if business and workers will accept it as a serious objective and help to make it possible.
I think we would all agree that we should not let our economy persist in this rising and excessive rate of increase in prices and costs, including wages. But it is easier to reach that judgment than to implement it. What practical means can we use to check this rise and to get back on to a stable path of economic growth?
First we recognize that most of us do not want, and in any event we cannot impose, federal government control over prices and wages generally. This is only within parliament's powers during a national emergency such as war. In practice, price and wage controls would be unworkable in a diverse economy such as ours which is so actively engaged in foreign trade and based essentially on a free market system for business and collective bargaining for labour. I say this as one of those actively involved in the successful wartime price and wage controls. Moreover, we as politicians really do not want the responsibility for deciding on everyone's prices and wages. We would be in endless trouble. Our recent experience in trying to deal with railway wages is evidence enough on that point.
Second, we must consider the possibilities of an "incomes policy" such as some overseas countries have had, or "guideposts" for wage and price increases such as the United States has had. An incomes policy implies not a government control but the expression of government views to focus public opinion on changes in particular prices and particular wage disputes. It involves persuasion and if necessary criticism, with voluntary and systematic adherence to certain policies and standards. It would require, in Canada, cooperation between federal and provincial authorities and a willingness in the business world, as well as in unions and the ranks of labour, to follow voluntarily a central lead that enjoys a wide consensus of agreement and respect. While all these conditions do not now

prevail, I hope that in time we can meet these requirements, achieve this consensus and develop this kind of voluntary policy. But we cannot get an incomes policy now by merely voting for it here or advocating it. We have to work it out not only here in parliament, where we must develop attitudes and laws that will earn respect, but in the labour movement and the business world where private interests and processes of bargaining must be reconciled with a regard for the public interest.
As the house is aware, the government asked the Economic Council, which is representative of all the principal economic groups, to study the interrelationship between prices, costs, productivity and incomes, and to review policies and experiences of other countries in the world. I have just heard from the Economic Council that this report is expected late next month.When it is received the government plans to refer it to a parliamentary committee along with other matters to be raised in accordance with the notice on the order paper today. I should add that it has taken the Economic Council quite some time to study and discuss this problem, which is perhaps the best evidence of its inherent complexity and the need for reaching a consensus before we can proceed.
[DOT] (5:30 p.m.)
As for guideposts, certain elementary considerations are self-evident. To achieve full stability of our consumer price level would require that our average increases in incomes per capita in Canada would have to be limited to about our over-all increase in productivity. To maintain the degree of price stability we have experienced on the average over the past ten years, it is evident from our productivity performance that we could not have increases in average incomes of more than four or five per cent a year. These facts of economic life, and they are facts, are some guide in themselves. Yet the typical increases taking place in money incomes in recent months have been in excess of this. Many current demands are much more. Many employers will have to grant large increases in the next few months simply to keep their men. We shall have to do so in certain categories of the public service. But somehow we must get back as soon as we can to more reasonable increases-average figures that do not exceed what I have mentioned. Some can, of course, be larger, as long as the average remains within reason.
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What is needed, I feel, is a widespread understanding of the situation by the public, by business and by individual workers. Management, on its part, must make a special endeavour to keep prices down in order to dampen down and help bring to an end this spiral of price and wage increases. It would be helpful if some industries were to give the public the advantage of increasing productivity by reducing prices. In my view the advantages of increased productivity should not accrue solely to the owners and the employees but to the consumers as well.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: September 8, 1966
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removal of the sales tax on production machinery and equipment as a further inducement to defer capital spending.
We made clear it was the purpose of these measures to slow down the rate of increase of business and consumer expenditure, stretch out our prosperity and sustain our economic growth. These measures were clearly of the right kind. They have worked. They have been approved in Canada and elsewhere, recently, for example by the authoritative Federal Reserve Bank of New York which commented:
Canada has clearly made a major effort to adapt general monetary and fiscal policy to the requirements of a strongly stimulated economy and has, in the process, broken new ground in the development of flexibility in fiscal policy.
I should like to say that had our example been followed elsewhere I think the world would not be suffering inflationary pressure quite as strong as it is.
[DOT] (5:40 p.m.)
It is now evident, however, that the total effect of our monetary and fiscal measures has not been enough to keep the total increase in the demands on the economy down to the objectives set in the budget. I think the monetary policy of the Bank of Canada has been well conceived and skillfully applied, despite the very difficult circumstances with which it has had to cope. But I think that we in Canada, and other countries as well, have left too much to be done by monetary policy. This has resulted in conditions in the capital and money markets which are now so difficult and abnormal that they may impede the smooth and efficient flow of savings into productive investment. A larger flow of savings would help to meet the situation.
Savings are a most important aspect of the fight against inflation. Canadians, either as individuals or through corporations, lay aside a good proportion of their earnings for future use. We are one of the countries of the world which save a high proportion of their income. Our over-all rate of savings compares well from year to year with many other countries. In this present situation an increase in corporate and individual rates of savings would serve both to moderate the level of demand and to reduce the pressure in capital markets, and as one means of encouraging individuals to save we shall shortly be offering a special centennial issue of Canada savings bonds. I expect the announcement to be made in a few days.

It is clear, Mr. Chairman, that we should strengthen our fiscal policy so that it can carry a greater share of the load of restraining the excessive growth in demand now taking place. Ordinary budget considerations lead to this conclusion as well as the present economic circumstances.
In the budget in March, after taking into account the tax changes then proposed, I anticipated budgetary revenues this year of $8,300 million, excluding the yield of the refundable tax. Our budgetary expenditures I forecast at $8,450 million. This left a budgetary deficit of $150 million. In terms of the national economic accounts I forecast a surplus of some $650 million including the refundable tax yield.
That was a budget designed to restrain inflation. That is why I have no hesitation in saying it was the right kind of budget, and I am sorry it did not work as well as we all hoped it would for reasons which have emerged since the budget. In fact, I recall in the debate which took place on that occasion some members wondered in the spring of this year whether we were going to be faced with inflation or recession. The government certainly had no doubt. I certainly had no doubt, and I am happy to say we did bring in that kind of budget.	,
Our latest estimate for our revenues this fiscal year shows them at approximately the same level as forecast in the budget. The yields of some items such as corporation income tax are down slightly below the forecast, while others are up enough to offset these.
On the expenditure side it is harder to make a revised forecast at this stage until we know the timing of some of the changes that are under way. Parliament has not yet decided, for example, on what date the income guarantee program, announced by the Minister of National Health and Welfare in July, will come into effect. This is one of the unknowns.


Stanley Howard Knowles: Has the government decided?


Mitchell William Sharp: Yes, and parliament has yet to decide, but the government has its plans. These will be announced in due course, and there is no intention of changing anything about that.
As is now widely known, we will have to face some increases in pay for the armed services, and I should add in veterans' disability pensions and veterans' allowances. It is
September 8, 1966

too early to forecast just what these will mean in this current year. I would think, however, it would be prudent to anticipate a total of $8,600 million in budgetary expenditures quite apart from the income guarantee program. Consequently we now anticipate a budget deficit of about $300 million and a corresponding reduction in the surplus on the national economic accounts basis.
The development in the economic situation since the time of the budget indicates the need for a stronger fiscal policy, taking into account what I have said about excessive reliance on monetary policy. May I say in this connection that this is a complaint that is equally applicable in many other countries of the world, particularly in North America. In the United States monetary conditions are even tighter than they are in Canada, and the President of the United States and the Secretary of the Treasury have, like myself, admitted that there has been too great reliance on monetary policy.
It was indicated in July that revenue measures would have to be considered to meet the burden of the income guarantee program. I have reached the conclusion that when this program is enacted it will be necessary to increase taxes or to introduce new taxes to meet our total requirements and to prevent the government's own increasing expenditures from having inflationary effects.
When we have before us, perhaps in late October, the measures to authorize the increased revenues made necessary by the income guarantee plan we will be able to review our general fiscal position and consider what changes are desirable in the light of the economic and financial situation. Until that time I will not endeavour to be more precise as to magnitudes nor announce any decision as to the nature of the measures that would be most appropriate. Needless to say, one can never anticipate tax changes.
In order to keep future tax increases to a minimum and still contain the inflationary pressures, the government has decided that it must moderate the rate of increase in expenditures, deferring some programs already planned, terminating others, and putting restrictions on still others. We are having a long and painful review of these expenditure programs with this in mind.
One of the decisions taken was to discontinue the winter housebuilding incentive program, which now does not appear to us as necessary since the same effects in regard to the volume of construction in the winter can
23033-520J
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be obtained through suitable control of the direct lending by the Central Mortgage and Housing Corporation.
While the government is strongly in favour of increasing grants for research as a basic long-term policy, we will have to exercise more restraint in the rate of increase this year than we had hoped would be necessary.
The scholarship program which it had been our original intention to introduce this year will be deferred. I think the essential needs at present can be met from our student loan program on the one hand and the extensive provincial student aid programs on the other hand.
The agreements with the provinces for support of certain forestry programs expire next March and we have decided they should not be renewed as we feel the provinces are quite able to carry on themselves.
We are seeking to hold down the size of the defence budget despite the inescapable increases in pay and in the prices of what we have to buy. We shall continue to restrict our capital expenditures although this will mean some slowing down in a number of desirable programs and a postponement of good projects. I noticed the recognition of some hon. members opposite that many good projects may have to be deferred, and that is why I said this has been a painful review, very painful, and even after we have made all the changes that will be made there is still bound to be a substantial increase in government expenditures.
We have decided that we must defer the commencement of one major program that is already before the house. Many of the provincial governments have indicated that they feel we are attributing too much urgency to the introduction of full medicare programs right away, and they do not feel prepared to proceed to put such programs into effect next summer as provided for in the bill before the house. We therefore propose to defer the effective date of the plan for a year until July 1, 1968. The legislation will be proceeded with in the house as a high priority item when we reassemble at the beginning of October. The government has no intention of changing the substance of the bill other than its effective date.
Obviously this decision on medicare was a difficult one for this government to make because we have been, and remain, so strongly in favour of this major social reform. We feel, however, that the delay will help to meet the immediate financial problems of

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both the federal and provincial governments and contribute to the ultimate success of the program.
The provinces and the municipalities have been increasing their expenditures as well as the federal government, including of course their very large expenditures on education. They face just as great demands as we do for increased services and facilities, and they have been sharing with us the unpleasant necessity of increasing taxes. It is certainly desirable that we and the provincial governments should harmonize our policies in expenditures, as in fiscal policies generally, taking due account of priorities and economic circumstances.
I shall of course be discussing these matters and others with provincial representatives in the tax structure committee next week. The provinces have made clear that they need and want more revenue and would like us to reduce our taxes so that they can increase theirs, as we have done for a number of years past. Our present economic situation and our foreseeable federal financial position do not permit such action on our part now. Discussions of our problems and policies as well as the general fiscal and economic outlook are necessary before we all make our plans for next year, to be submitted to parliament and the legislatures, including the main fiscal arrangements between us for the five years commencing in 1967.
[DOT] (5:50 p.m.)
It is to our fiscal policy therefore that we must look for some further assistance in restraining during this boom period the excessive total demands upon the economy that are currently making possible and in part bringing about the increases in costs and prices that are causing concern to hon. members and to very many Canadians. This is not an easy answer nor a very welcome one to those of us who must take action to cut back expenditures or increase taxes. Higher taxes are cold comfort to those troubled by higher prices, but they can help prevent prices going up more and more. I can assure the house that if higher taxes are necessary they will be proposed with a careful concern for ability to pay.
Measures such as these are, nevertheless, a relatively small cost to pay for the continuation of an expanding Canada-to avoid the grim alternative of boom and bust. We who have the responsibility of government intend to face up to the task confident that we shall

have the support of parliament and of the Canadian people.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: Just before sitting down, Mr. Chairman, may I indicate the measures President Johnson has announced today which have a familiar ring. He has proposed in a five point program a temporary suspension of the tax credit which permits firms to deduct from their tax bills up to 7 per cent of the funds spent on plant expansion and modernization and a six month suspension of laws permitting corporations to benefit from an accelerated depreciation program. These are very similar to the measures we took earlier this year in the budget. He also proposes that he would carefully review appropriation bills clearing Congress and establish priorities to see what could be impounded, postponed and stretched out. I could not give a better description of what I have been saying today. This is a necessary condition and one which is to be found in the United Kingdom. I hope we never will have to emulate the British course here. It was necessary there because they were unable to contain their inflationary pressures soon enough. If we keep ourselves expanding in accord with our physical possibilities, I think we can avoid stop and go. All it requires is a little sense and some restraint.
The President also proposed that Treasury Secretary Fowler would conduct a survey to determine what federal securities should be withheld from the already tight money market. Finally, he would ask the Federal Reserve Board in the light of the other actions to move to help bring down soaring interest rates. I should like to add that if the kind of measures I am proposing today are implemented I think this will help bring down interest rates.


Francis Alvin George Hamilton: Mr. Chairman, may I call it six o'clock?
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be raised at the time of adjournment tonight are as follows: The hon. member for Winnipeg North Centre (Mr. Knowles)-Inquiry as
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to consideration of medicare and old age pensions; the hon. member for Trois-Rivieres (Mr. Mongrain), External Affairs-offer to six libraries in France of a Canadian book collection in French and in English; the hon. member for York-Humber (Mr. Cowan), National Hockey League-application of Canadian laws to hockey players.


Stanley Howard Knowles: Mr. Speaker, when we were in committee of supply I think there was an
agreement that we would take a supper hour from six to seven o'clock. If we do that, I think that would take care of the private members' hour.


Mr. Trudeau:: Does Mr. Gregoire agree?


Stanley Howard Knowles: I think he has gone to Quebec.


John Whitney Pickersgill: Mr. Speaker, if it could be made an order of the house that at this moment Your Honour would go back to the chair in committee and that the committee would then rise and resume its sitting at seven o'clock, I think that would meet everyone's wishes.


Mr. Deputy Speaker:: Is it agreed that the private members' hour be suspended and that the house resume the business which was interrupted a few moments ago?


Some hon. Members:: Agreed.

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


Herman Maxwell Batten: Order. This sitting is suspended for a period of one hour. The committee will resume at seven o'clock.


[Stage Direction]
At 6 p.m. the sitting of the committee was suspended.
[Stage Direction]
The committee resumed at 7 p.m.
Herman Maxwell Batten: Order. House again in committee of supply, estimates of the Department of Finance, vote No. 1, to be found on page 118 of the blue book.


Francis Alvin George Hamilton: Mr. Chairman, when it came to my attention that I was to lead off for the opposition on this item I began to put down the observations that I wished to make in the time allotted to me. The first thought that
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flashed through my mind was: Never had a speaker, on the opening estimates of the Department of Finance, so many targets. It reminds me of a time during the depression when the rabbit population got very thick on the prairies and many of us went out to reduce that population somewhat, partially for sport and partially for food. As the owls chased the rabbits in from the fields toward the bluffs and the trees on the farm you could fire your rifle as fast as you were able, and they still kept coming in waves.
That is the way this government has been functioning for three and a half years: No matter how many mistakes they have made, they keep coming in waves with more-and the mistake that I think is inherent in the minister's statement this afternoon will probably be one more and one of the most serious. It has been said that to be minister of finance is the graveyard of politicians who have ambition.


Gordon Minto Churchill: Also national defence.


An hon. Member:: Well, you survived.


Francis Alvin George Hamilton: The remarks made by the minister this afternoon put him very deep in the six-foot hole that is customary in graveyards. In my judgment the speech this afternoon was a complete victory for the establishment. The same establishment that we met up with when we were the government has now won a complete victory.
Let me remind the committee that one of the great stories that has to be told is that in 1945, following the war, Canada was faced with inflationary pressures and the civil servants of that day had to meet them. In the Korean war there was another inflationary period, and the civil servants of that day had to help meet it. Then we had a period of the great influx of capital into our country from 1953 to 1955. This was an altogether different type of inflationary pressure-and the civil service had to help the government meet it.
These three great crises in the financial aspects of running a government so thoroughly penetrated the thinking of those who advise the government on financial matters both fiscal and monetary that they lived in everlasting fear of inflationary pressures. When we were the government we faced two recessions, in 1957-58 and again in 1961. Even when we were facing recessions we had advice poured on us to take anti-inflationary measures. The worst feature of this situation was that the person who was the spokesman and had control over the monetary policy was

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going one way, with a tight money policy, and the government formed of the elected representatives of the people of this country was going the other way. We finally resolved that difficulty by the dismissal of the governor of the Bank of Canada.


Mr. Deachman:: He resigned.


Francis Alvin George Hamilton: Let us not go into the details
of that manoeuvre.


An hon. Member:: No, let's not.


Francis Alvin George Hamilton: All I want to point out to the committee is that any person who reads the report of the royal commission on banking and finance, the Porter royal commission, will realize that never in the history of this country has there been an indictment of a public servant such as there is in this volume.


Mitchell William Sharp: And of the government.


Francis Alvin George Hamilton: And of governments, including our government and the preceding one.


Mitchell William Sharp: Yours.


Francis Alvin George Hamilton: Our government was included, and so was yours, because we were both part of the end product being produced in this country by the financial establishment. This group is so able, so sincere and so dedicated that they find it very easy to persuade themselves that they know how to run the country better than the elected representatives of the people.
[DOT] (7:10 p.m.)
This is what the statement of the minister means tonight, that he has completely accepted their point of view. He has accepted a series of techniques of dealing with financial measures which are as old and as orthodox as financial measures both fiscal and monetary could be. This is simply a retreat into techniques that have not worked in the past, that have destroyed governments and that will destroy this government.


Mitchell William Sharp: And that have brought about the most prosperous conditions this country has ever seen.


Francis Alvin George Hamilton: The government today is living in the most prosperous conditions this country has ever known and which were brought about in 1961. Every action of the government since it came to power in 1963 has led to the conditions in which we find ourselves today. Let no one think this happened since the last budget. Let your mind go

back to the last three and a half years. In the fall of 1962, with a minority government just elected continuing the expansion program of the previous two years, the leader of the opposition, who is now the Prime Minister of Canada, announced on several occasions in the month of September that he considered it his duty to stop anything going through this house and to force the government of that time to its knees.
That is the start of the policy for which the minister is paying a price tonight. We were able to pass no estimates and no legislation. The wealthy and the "wise" of this country got together to destroy us; but now the minister has put himself in the hands of those who destroyed us. The result of that will be that he and his government will face the same fate. That is the significance of his remarks tonight. This is the victory of the old fashioned techniques of bringing in measures too late and increasing the possibilities of a recession in 1967. Everyone knows that for the last two years our Canadian economy, because of the drive we started in 1961 toward expansion at home and abroad, has been walking on a tightrope, a tightrope between recession on one hand and inflation on the other.
This is not a new subject, Mr. Chairman, and I intend to deal with what has been said by those of us on this side of the house concerning this matter. However, before I get into the actual facts respecting a situation which is very serious, and will have negative results for the future of Canada, let us look at the members of the cabinet. Anyone with half an eye can see that there is something drastic disturbing them. I saw the Minister of National Health and Welfare-


Gordon Minto Churchill: Where is he?


Francis Alvin George Hamilton: Running around with a tight face. I knew immediately that there was something wrong. I know when a man walks through Gethsemane; I know he appealed to one man and another of his colleagues because the government was in crisis again. And where is the minister tonight? He has been destroyed by the cabal which is temporarily in control in the cabinet. I have watched the ministers being destroyed one after another in the last three and a half years, as different groups in the party fought each other. I saw the Minister of National Health and Welfare and the new minister of manpower, one of the most promising men to
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have come up from French speaking Canada in recent years, led to the slaughter on the railway strike bill, sacrificed on the altar. I have seen these men betrayed and the rug pulled from under them.
This is a divided government, one that has always been divided. They do not worry any more about crises cropping up once a year or once a month; now they worry about them every minute. This is a divided cabinet, which has to go.
Let us look at all the other measures which will be cut down, ones that the traditional type of finance minister thinks of cutting first, such as the $500 to try and even out the flow of employment in the construction of domestic homes in winter. Research is another victim, although it is certainly one of the things that would cause a reduction of inflationary pressures. Education, a longterm solution to inflation in any country, is also to get the axe. Forestry, at a time when forestry products in the northern hemisphere, are in the greatest demand, is to be curtailed. I will not say a thing about defence. It has already been indicated that instead of maintaining an army to defend this country and to bear our share in the defence of North America, we are now establishing a police force armed w_th police billies instead of rifles. Capital expenses will be cut down.
That brings me to the question of the old fashioned technique of cutting down what is vulnerable, such as, for instance, medicare. A year ago I said in this house that any person who tries to pretend to the people of Canada that medicare will be put into effect in Canada by July 1, 1967 is only fooling the people. And yet we have witnessed a great campaign through the press, radio, through pamphlets and managed news in the magazines that medicare will bring an end to all our problems, that every ache and pain will be over on July 1, 1967. This was backed by a pledge of the minister who was allowed to make that pledge. The truth has now come home, and another minister is biting the dust. The provinces have been led to believe that with the Liberal party in power all will be well. Next week the axe will fall on them also.
Today we heard the minister telling us, in smug terms of the statement made by President Johnson in the United States. We would be better off if the government would stop thinking about the United States and trying to keep in step with that country. We must realize that the same bunch of people in
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the United States are cosy with a similar bunch of people in Canada. You cannot tell the difference between their policies on defence and fiscal matters, and our policies. They are good, sincere and able men, but their minds are fixed on the past. They will not listen and let the fresh air of new ideas come into their thoughts. They destroyed us and they will destroy this government.
Last night I listened with interest to the minister's speech on television. He tried to blame everyone but the government for inflation.
[DOT] (7:20 p.m.)
Who is to blame for this inflation, the opposition? He says the bad boys of the N.D.P. are pushing us too fast. He says these bad boys in the Conservative party push us too fast. He says the opposition is to blame. Who took the attitude that all democratic government would stop in the fall of 1962? The present Prime Minister took that attitude. He had a group of devoted people behind him who stopped everything we tried to do from this side of the house in the fall of 1962. Who brought in the budget in 1963, the opposition? Then, we had 60 days of decision. That budget was a restrictive budget. That budget inferred all the th'ngs the royal commission had intimated in 1957, and Mr. Gordon undertook to put into it the ideas set out in "Troubled Canada" as well as the restrictive ideas developed at the Kingston conference.
All these higher taxes were part of the 60 days of decision. Who started the 11 per cent tax on production machinery that added to the costs at the very root of all costs? If 1 remember accurately all the parties in the opposition condemned the government for adding on that 11 per cent tax. However the government believed in restrictions. This was their name for planning. The establishment was in control. Well, we got a few of the restrictions removed, but it was not the opposition that put on the taxes or put on the restrictions.
Then, let us jump ahead to the budget of 1965. I spoke during that debate and I have a copy of my speech here. This was a year and a half ago, Mr. Chairman, and I warned the government then about what was happening. The present member for Davenport was then the minister of finance. He said that we were going to have an inflationary budget to get this country going, but he was going to an election. So, we have this silly situation, with

September 8, 1966
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inflation beginning to show signs of gathering momentum in 1965 and a finance minister thinking in terms of one thing only, namely getting the Liberals back into power with a majority. I have the record here and I intend to quote from it. However, I should like to remind the committee that this is not only my view. I just happened to be reading an article in Time magazine a few months ago. This article is dated June 3, 1966, and the subject is "The Realm of Canada". The part I should like to quote is under the heading, "Everything but Business", and states:
Gallup's conclusion that the "Munsinger affair did considerable harm to the image" of the P.M. was something of a surprise, considering that the Liberals intended it to cut the other way. Obviously, the answers were weighted by the universal assumption that Pearson will not contest another election. But the Gallup poll also failed to note that the mood was as much inspired by a series of earlier irritations. First there was the budget blight of 1963, then the flag argument of 1964, followed by last year's Rivard affair, and penultimately the sticky business of postal clerk spy George Victor Spencer earlier this year. The fact that Pearson personally telephoned Spencer to ask if the spy wanted a judicial inquiry was not the first instance of the P.M.'s diplomatic instinct leading him politically astray, but possibly it was the worst example of his unnecessary dabbling in dirt. Munsinger was too much. "More than anything else," suggested a Toronto Liberal last week of Pearson's diminished public support, "it's just an accumulation of everything but doing the nation's business."
This is the charge I level at the government tonight. They have time for "Bi and Bi" commissions; they have time for debates on capital punishment; they have time for flag debates. All these things have merit, but the government has no time for the nation's business. This government has been so busy carrying on elections that they have no time for anything else. The 1963 election was unnecessary, and the one in 1965 was doubly unnecessary. Now, as a result of the sheer weakness of their position, we are stumbling into another one in 1966. This government has been so busy trying to get a majority so they will have complete control of the country, as they believe, that they have no time to govern. We are paying for their sins now.
In the time that is left to me, I want to deal, and I can only do so in very elementary form, with the fact that there are long-term solutions to inflation, and short-term solutions to inflation, as the minister stated. No one quarrels with the desire to find out more about an income policy. No one quarrels with any of these long-range objectives which we all have. The problem as I pointed out in

1965 and again in 1966 in my budget speeches, is one of finding short-range solutions. This country today is even more precariously balanced on the tightrope than it was five months ago. Five months ago I proposed, in essence, that the answer was not a whole series of anti-inflationary measures, just as the answer was not a whole series of inflationary measures. The obsolete proposals for coping with these problems are all on file in the offices of this government, available for every minister; but is it not about time we began to use the knowledge we have and to realize that today there are some forces in Canada that are deflationary, just as there were a year and a half ago? These deflationary forces are there. Likewise there are pressure points for inflation.
Budget making now in 1966 is not the same as it was in the days of the horse and buggy or in 1867. I suggested that we should have a series of short-range proposals, some of which were anti-inflationary and some of which were expansionist. These things work against each other, and would keep us balanced on the tightrope until we got through this pressure period. Without going into great detail, I will start with the budget of 1965, and some of my statements. I quote:
Now, Mr. Speaker, this budget adds another inflationary force by trying to increase consumer spending. Second, there is a shortage of skilled labour in almost every line of activity, and this produces a cost-push inflation . . .
Third, there is a tremendous need for new capital for plant expansion . . . Why is the government not aware of them?
I put forward three propositions and asked why the government was not aware of them. I did not know they were planning an election; I was simply trying to be constructive. I dealt with this 11 per cent tax and said that this was at the root of a lot of our trouble. Then I quoted from a document published by the Economic Council and proceeded to outline 17 or 18 proposals, mostly short-range, which would help the government ease away from this inflationary pressure. They are all there-one, two, three, four, five, six, and right down to 14. I was trying to be constructive.
This year, I was even more precise because I saw the situation more clearly. Let me quote just a few paragraphs from what I said on April 1, 1966, as recorded at page 3751 of Hansard:
9 (7:30 p.m.)
If the previous minister of finance was following nationalistic policies that are 60 years out of date,
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I think it can be said of the present Minister of Finance that he is only 25 years out of date.
I change that now and I say that they are both 60 years out of date. I went on:
Last year the minister supported his predecessor's proposals. Last year the minister and his predecessor ignored the clear and present warnings which we on this side of the house gave about inflation. Last year the Minister of Finance indicated that he would stand or fall with his colleague. This year I think one can say he has done nothing in particular, and has done it very well.
Then I went on and talked about the fundamental problems that we had been talking about, and I said:
The tragedy of this budget, Mr. Speaker, is that the minister has not faced up to the fundamental decision which confronts Canada, and that is how to utilize the human and material resources of Canada so that the economy can operate closer to its essential capacity.
Then I proceeded in a series of positive suggestions to pick out those areas, and I can summarize them in this way. First of all there was the principle of selectivity. In some areas you should force expansion by offering incentives. These areas embrace the steel industry, the petrochemical industry, and so on. Then there are areas where you should check expansion-for example the construction industry-by selection of your fiscal program to meet the needs in each of the industrial segments. This is one positive approach which has never been utilized in this country.
Second, I made a big pitch for a temporary manpower policy. Instead of waiting for all of these long-range solutions of the minister of manpower, we should get right down to the facts. We have thousands of able people who are willing to help but are not being given the chance. I would point out that only 34 per cent of our women between the ages of 21 and 45 are in the work force. This is the lowest percentage in the world of women in this age group who are working.
Our women are just as able to meet a national emergency as any other group in the country, but there is no leadership. We have great numbers of people who are retired at 55, 60 and 65 and who are at the peak of their mental capacity, and they are willing to be called on a temporary basis back to the working force. We do not have to wait a year or two for them; they will go back to work in two weeks. If the government would say what their policy is, the manufacturers, the hospitals and all the other people who need help will get them back to work. It can be done very simply on a fiscal incentive basis which is not inflationary, but will get at one
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of the basic causes, namely labour shortages in certain segments of the economy.
The third point that I made last April was that no one has looked seriously at the various ways of meeting inflation on the monetary side The minister was quite right today when he said that we put too much faith in the monetary capacity of the Bank of Canada to settle this question. The bank has only a marginal impact. What it is, no one knows-20 per cent, 30 per cent; I do not know. But when you put the millions of little people in this country on your side, they know all about the high cost of meat and the high cost of everything which they buy, and they are willing now to co-operate with you. You can kill two birds with one stone by using the little people of this country, who have only a few dollars a month, to help the situation out. If they knew they would get their money back, they would be much more willing to put it aside.
What does the minister imply today? The old-fashioned technique of taxing the people and taking their money away by that method. And I have not mentioned the worst aspect. If the government want to clear the pressure on capital spending, there is one move they can make. Under the Canada Pension Plan the government will take $400 million a year out of the people of this country, which represents 3.6 per cent of the labour payroll. The government turns this $400 million over to the provinces.


Mitchell William Sharp: That is what we have done.


Francis Alvin George Hamilton: That is what you have done. But what do the provinces do? They have no responsibility for fiscal policy. They put this money into circulation.
Let the government go back to their original plan if they like. Mr. Lesage has gone; he cannot stop you now. The government does not have to make a backroom deal with Mr. Johnson. Let them do it openly. Let us get back to the system of pay-as-you-go and get this rate down to less than 2 per cent, and the funds back under control of the federal government.
The workingman has only been assessed this amount of deduction during the last few months. Half of 3.6 is 1.8. Can you blame the labour union leaders for asking for more when the pay of the workers keeps going down? Who started this inflation? The government who started it had high hopes, but they fell flat on their faces as they made deals with Lesage which hurt this country,

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and which are hurting it more than anything else at the present time.
Let us turn the people loose, because they want to help. They want to cut their costs and they are quite willing to go out and work. They are not going to stay in the labour force once the emergency is over in the next two or three years; they will be glad to go back home. But give them the incentive to work. This is what I call a peaking policy. Give the little people of the country the chance to save, and in such a way that they know that by saving they are going to reduce the cost of the things that they buy, and that they are going to get their money back with increased increments when the time comes.
I could go on and list suggestion after suggestion, but I will not. All I will do is to plead with the minister that, as he prepares his baby budget this fall, that he break clear from these reactionary right-wing, obsolete methods of the last century. I ask him to give some of the new thoughts an opportunity to be tried out. This country is not going to collapse. We are strong; we are just beginning to get up speed. Our railways need to expand and our steel industry needs to expand. The government should back that expansion, and at the same time put the antiinflationary forces to work to balance that expansion. I ask the government to give us some leadership. If they do, I am sure they will be surprised at how the people will respond and follow the leadership of 20th century thinking. But they cannot help but be disillusioned by leadership under the hand of a reactionary group of the old guard on 'fiscal and monetary matters who draw their inspiration from the 19th century.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, it would not be quite true to say that I was surprised at the statement of the minister this afternoon. I did not expect very much, though I must say that I was somewhat surprised at the lengths to which he went in promoting extremely orthodox views, not to say reactionary views. I do not intend to deal with his statement yet because I have some quite positive suggestions to make to which I hope the minister will listen with some attention.
The only comment that I want to make on his speech at the moment is to remark on the airy assumption that he made, without the slightest supporting evidence, that we are inclined to do too many things in Canada at the same time; that we have reached the
(Mr. Hamilton.]
limit of our productivity. There is no evidence at all to support that statement and, on the other hand, there has been no examination of how our resources are being used at the present time.
The minister makes this statement in light of a report from the Economic Council of Canada that per capita productivity in Canada is 23 per cent less than it is in the United States. I would suggest to you, Mr. Chairman, that unless we are prepared to accept the idea that Canadian workmen are less competent, less efficient and lazier than those of the United States, this would indicate to me that there is something radically wrong with the structuring of our industrial society.
This question of inflation, of the rise in the cost of living, cannot be fruitfully considered in isolation or dealt with in the way the minister proposes-by monetary and fiscal measures divorced from the general economic picture.
[DOT] (7:40 p.m.)
Primarily it must be considered in terms of our actual and potential productivity, to determine whether or not we really have actual and runaway inflation which can be cured only by drastic monetary and fiscal measures, and whether in fact the situation conforms to the classical definition of too much money chasing too few goods.
We must examine our whole industrial and financial machinery to determine how well it is succeeding in using our human and material resources to produce the maximum in goods and services for the Canadian people. On the face of it, one must view with considerable suspicion the contention that Canada has reached its limit in this regard. I, for one, find it an insult to my intelligence to be told that 20 million people with an exceptionally high level of technical skill, in possession of the world's largest per capita store of unexploited natural resources, are not capable of producing goods and services to satisfy their demands. Yet, this is what the minister says. This is what we are told when terms such as "an overheated economy" are used to describe a society which, owning enormous real and potential wealth, yet suffers slums, housing shortages, inadequate educational and health services and, I might say, a barbarical-ly low cultural level to exist within its boundaries.
I think it is time perhaps that we kicked this bogeyman of runaway inflation, this
September 8, 1968



scarecrow that is held up to frighten us, out of the way, and took a hard look at the institutions and arrangements which link our economy with the rest of the world-the institutions and arrangements by which we produce wealth from our enormous natural resources. For one thing I think we should take a look at our tariff structure. It has something to do with our link with the rest of the world. First of all we must examine our own internal legal and institutional arrangements to see how well or ill they contribute to the goal of maximum production. We are again being offered all the old moss-grown explanations for the rise in the cost of living. Faced with steadily rising prices, the consumer is being persuaded to place the blame on labour, and in some instances, on the farmer. Labour is accused of exorbitant demands which increase costs, with the added suggestion that the Canadian worker does not work hard enough to justify his demands. The farmer is accused of inefficiency and of failure to keep up with the times.
With regard to the charge against labour, there has been a continuing battle of the statisticians and economists. One can prove anything by carefully selected statistics and I do not propose to enter into the battle, which in many cases tends to be one between special pleaders. I have no hesitation in saying that anyone who has worked as it is possible that some of us have, in Canadian industrial plants, or who cares to enter and observe the operations in a Canadian factory will be unable to leave that factory convinced that the Canadian worker does not work hard and efficiently with the means placed at his disposal by his employer. Furthermore, no fair-minded person, on examining the wage scale of the Canadian working force will be able, in good conscience, to contend that the Canadian working force draws an undue share of the wealth which it produces. The charge against labour is in essence a demand of other and more fortunate sections of the community to continue to enjoy a privileged position in our midst.
The charge against the farmer is, if anything, even more ill founded than the charge against labour. In no section of our economy has the impact of modern technology been so great as it has been in the agricultural sector, with the consequent result that efficiency and productivity have been increased. The proof of this is to be found in the enormously increased agricultural production, coupled
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with the dramatic decline in farm population. If the farmer is to be blamed for anything, it is for his failure to combine with his fellow farmers, to ensure the distribution of agricultural products to the consumer at prices that will be fair to himself and to the consumer.
It is too easy, too simplistic to find the cause of the continual rise in the cost of living in the greed and indolence of labour, and in the stupidity of the farmer. These are myths without foundation in fact, and we must dig deeper to find the real causes.
From time to time, Mr. Chairman, faced with the rapacity of the free enterprise system, legislators and parliaments have enacted legislation in an attempt to cope with the more rapacious aspects of the acquisitive society. In the course of time such legislation, without regard to its effectiveness in the public interest, has come to assume the position of a sacred cow, taking its place in the pantheon of the good, along with motherhood, marriage, thrift, and piety. One such sacred cow has been the Combines Investigation Act, and I am well aware that when I propose, as I am about to do, that we scrap this legislation, I shall run the risk of being charged with hardly less than sacrilege. If we look this sacred cow firmly in her soft brown eye, we shall find she is what dairy farmers call a "boarder"-a cow that looks nice but provides no butterfat.
In the first place this act is ineffectual. It would be difficult, and perhaps impossible, to cite a single instance in which an action under the Combines Investigation Act has proven successful in preventing collusion to act in concert by businesses which are supposed to be, ostensibly, in competition.
Even more difficult to be proved would be the contention that a success in preventing such collusion would have been in the public interest. The truth is that the developments which the act was designed to frustrate are developments inevitable and necessary in an industrial society-the growth of units of production of a magnitude great enough to be capable of the most economical and efficient use of human and material resources-a magnitude which will vary from industry to industry, and from period to period.
This is not to say, Mr. Chairman, that the large enterprises necessary to modern production do not place in hands of their owners and managers enormous power to levy an unconscionable tribute on the public. Other means than the prevention of this development must be found to curb the misuse of

suggested that he now agrees with us -though he did not agree with us some months ago-that he has been relying too much on monetary control and not enough on fiscal policy. But even his attempt to use monetary policy has been based, I suggest, on at least one big fallacy. I suggest to the minister that contrary to the conventional wisdom that high interest rates have a deflationary effect and act to cool down an overheated economy, any real examination of their effect in the present stage of our economy must lead to the opposite conclusion.
In the first place, directly or indirectly, interest enters into every cost and as it is inevitably passed along to the end of the line where the consumer stands, it must have the effect of increasing prices. The argument that high interest rates tend to cut down consumption is simply not borne out by the facts. The businessman will not be deterred by high interest rates, so long as a booming full employment economy exists. He will be confident of being able to pass it along the line.
Evidence before the banking and commerce committee in 1955 or 1956 proved that the client of the small loan companies is not only not deterred by high interest rates but does not even bother to find out what he is paying. The terms of repayment are his only concern. If the monthly payment seems within his means he has little care about the rate. As for slowing down the investment rate it is obvious that interest rates are of marginal importance in an economy in which over 70 per cent of all investment comes from internally generated savings. High rates encourage the inflow of foreign capital and in the final analysis merely increase costs and raise prices. For these reasons we suggest that to prevent a general rise in interest rates, with its inflationary results, the government should take action to prevent such a rise by using the powers conferred on it by the British North America Act. This would not only control the inflationary effect of high interest rates but would enable the government to take steps to allocate credit to areas which might otherwise be starved, such as housing, and enable us to set some social goals.
Earlier this afternoon the minister told us that the government was seeking to curb inflationary measures by cutting down public expenditure. He went on to say that he was using persuasion with those in the private sector of our economy. I can tell him that in my part of the country his persuasion does not seem to have had very much effect. On
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the outskirts of the small town in which I live on Vancouver island, two enormous shopping centre complexes are being built at the present moment, one of them costing over $11 million. We already have five shopping centres in the area. Evidently, the minister was not able to persuade these people to defer their expenditures. He preferred, rather, to cut down on the expenditures of government-to take the position that those who own and control supermarkets can spend anything they like, but that Canadians acting in concert to develop amenities for their own purposes must not be allowed to do so. I think the minister had better take a correspondence course in persuasion, since his efforts have obviously had no effect whatsoever on those who control the private sector of the economy.
I would hate to be a Liberal tonight. It will be very difficult for them. But I have a suggestion I should like to pass on to the minister-it came from one of my colleagues. He suggested that since we are not to have medicare now, why not postpone it until 1969 and make it a nice, round, half-century since the minister's party first promised it to the people of Canada.
I have tried to place the question of inflation and the rising cost of living within the total framework of our economic possibilities in Canada. I wish now to place it within an even wider context. There has been a long continuing	debate-perhaps	"muttering"
might be a better word-among certain hon. gentlemen opposite and I take it that the present Minister of Finance is on one side of this debate, or muttering, and that the former Minister of Finance is on the other. It is a debate between nationalism and continental-ism. There are those on one side who tell us that as next door neighbours to the United States, as those who share this rich North American continent with the United States, we must adjust ourselves and our economy to the necessities of continentalism even at the expense of our national identity.
[DOT] (8:00 p.m.)
Then we have those on the other side who suggest to us that while it is true there are a great many benefits to receive from being part of the North American industrial and economic complex, we must preserve our national identity even at the cost of relinquishing many of the advantages that might come to us through continentalism.
It seems to me that this is too simplistic, too black and white, too much the concept of

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either or. I suggest to the minister through you, Mr. Chairman, that if he will just proceed with policies that will assist our industrial productivity potential, and at the same time not allow the private sector to waste resources, if he will take positive steps to curb that tendency, then we can hope to lay the foundations of a policy which will enable us to gain the benefits, and they are undoubtedly tremendous benefits, that accrue from being part of the North American continent, next door neighbours to the richest and wealthiest nation in the history of the world.
But we are not going to do this as long as our Minister of Finance sits back and, without a shred of evidence, tells us that we have reached the limit of our productive capacities, that we must not expect to go on as we have been doing, and yet at the same time we have only to look around the private sector and see the gross extravagance and misuse of resources. In this situation the minister relies on persuasion to get them to stop doing these nasty things, and they pay no attention to the minister, just as I would not if I were in their shoes. I would only pay attention to a minister who is decisive enough to say, "This is a control that is going in and it is going to have the force of law; and that is that."


An hon. Member:: Didn't the government do that with the railway workers?


Colin Cameron: That is different. The people who on shopping centres and high-rise apartments, and all the other more spectacular aspects of the affluent society, are in a different category than your friends the railway workers. I am surprised that you mention such lowly creatures here in this context. They must not be treated in the same way. But seriously, Mr. Chairman, I am appalled that the minister is prepared to advance today in this house, in 1966, the old shopworn ideas that did not work in the past and which he hopes will work in the future.
I would remind the minister, since the hon. member for Qu'Appelle failed to do so-I know why he failed to do it-of what happened to the Conservatives when they brought in their austerity program, and cut back on all public expenditures in the hope that they were going to contain inflationary pressures.


Mitchell William Sharp: That is not what they did. They were so irresponsible that they had a financial collapse.


Stanley Howard Knowles: A political one, too.


Colin Cameron: It was not exactly a financial collapse; but what I am afraid of is that we are going to have a social collapse in this country.
I would like the minister to examine the propositions I have put before him tonight, to ask himself very seriously whether he has made any examination of the structuring of our industrial economy, and whether he has any evidence that we have reached the ultimate in our progress because, if he has not, then he has no right to come before the representatives of the Canadian people and tell them the Canadian people are too lazy, too stupid and too dishonest to take advantage of their unexampled opportunities as inhabitants of one of the richest countries in the world.
I hope the minister will consider this. I hope that the violent reactions he is going to get from his reactionary speech tonight will make him realize that the government in dealing with inflation must not rely on sudden, ad hoc, violent fiscal and monetary policies because they won't work, but must seriously examine the whole structure of our society and decide what steps the government can take to rationalize it, to increase its productivity and to lay the basis for a wealthy society that no longer will need to tolerate slums, poverty, deficient education, deficient health services, and all the things of which every decent Canadian is ashamed of today. I hope the minister is not so sunk in his 19th century orthodoxy that he will refuse to look at these things.
I shall conclude by telling the minister this incident. When he was speaking in the house in the debate on the Bank Act I had a friend here from a foreign country who, to my mind, was not particularly progressive or leftist. He listened to the Minister of Finance and when I went to collect him from the gallery and we were walking along the corridor he said to me, "But, but, but I don't understand. Your minister comes right out of the 19th century. How can you have any planification"? I said, "My dear man, we have no planification because our minister and government do come straight out of the 19th century". Mr. Chairman, I suggest they try to move into the 20th century before the last part of it disappears.
September 8, 1966

[DOT] (8:10 p.m.)


David Réal Caouette: Mr. Chairman, we listened closely to the Minister of Finance (Mr. Sharp) this afternoon when he informed us of the government's plans to meet the financial conditions now prevailing in Canada.
In order to check inflation and try to prevent economic chaos, the minister proposed this afternoon certain measures which will require further sacrifices from the Canadian people, and mean, in a word, that they will have to tighten their belts once again in order to avoid the worst. It is always the same old story year after year; the Canadian people are asked to make sacrifices, to do without such and such a thing in order to establish an economic balance according to the requirements of the monetary and fiscal system existing in our country.
The minister said this afternoon:
We have had a long and strong economic expansion in the past five and a half years. It has carried us from a condition of serious and persistent unemployment to one of widespread prosperity and virtually full employment. There is still too much unemployment in certain areas of Canada, and among those who are poorly educated and unskilled but this arises from reasons other than a shortage of opportunities in Canada taken as a whole.
It is no doubt because there is no shortage of opportunities that workers are transferred from one place to another, 1000, 1500 or 2000 miles apart.
And he added:
Total expenditures of money by consumers, by business, by government-and by those who want our exports-are now more than adequate to support a healthy level of economic growth.
The minister admits that the demand is more than adequate to support a healthy level of economic growth.
But he contradicts himself. The government has been in contradiction since it came to power. Last week, we were considering two bills: Bill C-230 to provide for the resumption of operations by the railway workers by granting them an increase of 18 per cent in wages. At the same time, we were being presented with bill C-231, to authorize in proud terms, the railways to increase their freight rates, which will obviously bring about a further increase in the cost of living. The government asked us to pass the two bills last week and, this week, the Minister
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of Finance (Mr. Sharp) keeps on repeating
his gospel:
Speaking generally, Canadians have been very impatient to get on with very many things both directly and through their governments-and now, we are paying the price of trying to do too much all at once.
Mr. Chairman, I do not know who are the economists advising the minister of Finance or the government, but it seems to me these are direct contradictions, from A to Z, from the first to the last page of the epistle which the Minister of Finance presented to this house this afternoon.
The minister continued:
As a result, we have had accelerating increases in prices and costs, accompanied by urgent and pressing demands by special groups for more income, using whatever means are open to them.
At this point, the minister was alluding to the recent rail workers strike and to other strikes in every sphere of the Canadian economy.
The minister also said:
We have now reached a position that is unstable.
Last week we were in a stable position; this week we are in a position that is unstable. This reminds me of what the Liberals said in the province of Quebec during the last election campaign: For a stable government, for a stable economy, for a stable country, vote Liberal.
I see the hon. member for Mercier (Mr. Boulanger) is applauding; it is because this is way over his head.
Mr. Chairman, what does stability mean? According to the dictionary, the word "stable" means something that does not move, that does not go forward, nor backwards, nor sideways. This is about what we have with the present government A government which contradicts itself from week to week, ever since it took over the administration of the affairs of Canada.
And the minister adds:
The present trends just cannot continue for long into the future. We cannot all get what we want.
I would like to ask the minister's secretary to be careful about the French translation next time. Words are missing, sometimes, and it should be a perfect translation of what the minister said this afternoon. In any case, I am using the French text and here is what it says further:
We cannot get all that we want.
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September 8, 1966
We cannot.
If everyone tries there is going to be an excessive rise in prices and in costs because right now the country just could not-no matter how hard it tries-produce enough to meet all the demands.
Mr. Chairman, the Minister of Finance knows that this statement is inaccurate; right now in Canada there is not a single industry which is not capable of increasing its production.
The farmers in the province of Quebec are literally starving because their production is not selling. And yet they can increase, multiply, triple, quadruple and quintuple their production as early as next year if the government will give them the assurance that their production will sell.
The minister has just told us that we cannot produce more. In the clothing industry in the province of Quebec, as well as in other provinces, plants had to close their doors because they could not sell their production. And the minister tells us that we produce everything we can.
The automobile industry, and I know what I am talking about, can increase its production as early as next year, if it is assured that its cars will sell.
In the field of farm machinery, in any field of national production in fact, our production can increase and double within a short time.
The Minister of Finance and Receiver General tells us that we cannot produce enough to meet all the demands. It is not the demand that cannot be met. Finance is to blame for +he failure to distribute goods and services in Canada to those who need them. The minister does not have the courage to cut into the monetary system, he prefers to cut into private industry, among individual Canadians who are building Canada, rather than among the financiers who are destroying and swallowing Canada.
The minister goes on to say:
Let us bear in mind some simple facts. We are now producing about all we can in Canada this year.
One more mistake and, tomorrow, all across Canada, newspapers will spread the minister's comments. But these same newspapers will shy away from reporting the comments of those who are pinpointing the real source for the "inflationary" situation in which we find ourselves at present.
Mention of this will be avoided; people will be told to tighten their belts. Why? Because
[Mr. CaouetteJ
important newspaper owners are financed in exactly the same way as the government, namely by the controllers of the economic life blood of the country, without whose permission nobody can breathe anymore. The Minister of Finance thinks he is supposed to tell the Canadian people to tighten their belts and keep from breathing for a while, for the sake of Canada's economic stability.
The Minister of Finance goes on to say that our productivity is growing by 2 or 3 per cent per year and he adds:
Our labour force is growing at a rate of a bit over three per cent a year-and is becoming better educated and trained. Our productivity-the volume of goods and services per worker that we can produce-is growing somewhere between two and three per cent a year over-all. Canadians can expect an increasing standard of living-on the average-[DOT] which increases at a rate that bears some relationship to their average increase in productivity-say about three per cent a year over a long period.
Would the minister wish to make a comparison at this stage? It results in an invitation to the workers not to demand a wage increase beyond three per cent, that is to say no greater wage increase than the increase in productivity.
Is the minister very conscientious when comes the time, for instance, to portion out the federal budget? When we see that, for the year 1966-1967, 14.9 per cent of each federal budget dollar is paid to financiers solely to cover the interest on Canada's debt. [DOT] (8:20 p.m.)
Has the minister ever considered discontinuing payment of this interest over a period of "x" months, namely until Canada's economic stability has been regained? Let us discontinue payment of interests on the debt. If we ask the workers to tighten their belts, the mothers to refrain from buying what their families need, the aged not to ask for an increase of the old age pension, because that would contribute to inflation, is it not true then that the interest paid on a flictitious national debt is, in fact, contributing to inflation? A billion and a quarter, this year, in interest on the national debt alone. Why did the minister not make the statement, on an additional page which could have been page No. 10, that from now on no interest will be paid if it stems from our financial system which is strangling Canada?
If workers, families, businessmen and manufacturers are asked to make sacrifices, big financial interests should not be spared, and then the Minister of Finance will have shown courage.
September 8, 1966


Some hon. Members:: Hear, hear.


David Réal Caouette: Mr. Chairman, on page 3, the Minister of Finance goes on to say:
There are laws to prevent business from combining to increase or maintain their prices and profits.
There are laws to prevent this. There is no law, for example, concerning the workers; they may go on strike, and the minister says that there is no law preventing them from striking or asking salary raises if they wish to do so.
Yet there are laws "to prevent business from combining to increase or maintain their prices and profits." But when did the minister use those laws to control businesses combining or agreements to maintain or increase prices and profits? Prices are fixed; if someone is found out, he is sued in court and fined $25,000. When those people have made perhaps thousands of dollars in profits, as the minister mentioned here, they are fined $25,000 and then they are told to go on. So they continue operations. If there were a law whereby these people who are ruining the consumers could be imprisoned, do you think the government would not be more successful than it has been since coming into power? This does not date back to 1963.
In 1946, 47, 48, 49, we faced the same situation following the war. In 1956, there was a recession. The Conservatives came into power in 1957. In 1961, there were one million unemployed in Canada; 208 Conservative members in the house could not deal with unemployment nor restore economic stability in Canada.
Mr. Chairman, this does not go back to yesterday. It is always the same, everything must always be done over again. Like the Prime Minister and like the finance minister of the former government, our economists have advised us to stop giving a $500 bonus to whoever builds a house in winter; they have told us to stop spending; our economists in the Bank of Canada have told us to do this or that. All their recommendations have tended to belittle the individual, the worker helping to build the country.
The minister continues on page 6:
I think the monetary policy of the Bank of Canada has been well conceived and skilfully applied, despite the very difficult circumstances with which it has had to cope.
Before the house adjourned in July, were we not presented with a bill to allow banks
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to raise their interest rate? Was not a resolution also presented to allow chartered banks to multiply, not by 12 but by 14, their reserves in the Bank of Canada? Is the government scrupulous as to this? No. The Bank of Canada is proceeding skillfully, "despite the very difficult circumstances with which it has had to cope", and this, when the Bank of Canada does not even assume its responsibilities. Mr. Chairman, I have proof here. A short time ago, on July 21, the newspaper VAction published the following statement made in Washington by the Secretary of State for External Affairs (Mr. Martin):
Canada made known yesterday its intention-
Mind you, "its intention"-
-of reducing the cost of money loaned to developing countries.
Let us increase the cost of money here in Canada, but let us reduce it for developing countries.
The Secretary of State for External Affairs, Mr. Paul Martin, speaking before the members of the O.E.C.D., said that Canada will reduce by three fourths of one per cent the administration costs applicable to low interest loans.
Low interest means that we have actually loaned money without interest to some countries, including the West Indies, to build sewers, roads and houses. Canada has loaned money. But the paradox is this: Where do we find the money to lend it to Jamaica, the West Indies and all the other countries? We borrow it at high interest rates, whereas we lend it wothout interest to developing countries. I have never seen such a stupid thing. Canada is not yet completely developed, it is still being developed, and the minister informs us that we must postpone certain government projects, in short, that we must back out of certain material projects for lack of financial means. Let us wait until later when the economic situation has improved.
The Secretary of State for External Affairs also stated:
This means that Canada's contribution to development will be interest free loans repayable over a period of 50 years, with 10 years of grace.
That means 60 years, Mr. Chairman. When Jamaica starts paying us back, the Prime Minister will have reached 130 years of age. But at the age of 130 years, he will not be here, but others will be here who may have to do then what we have done not long ago for Britain which could not pay back the $2 bill1 on; that is let them pay it back in the year 2003.

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Jamaica will act in just about the same way.
Mr. Chairman, it is not that I oppose the aid we are in a position to give such countries, it is only that I object to having the Minister ot Finance imposing upon us in Canada, upon people who have not enough even now, restrictions which no one thinks of imposing upon the financial system. That is revolting.
Reverting to the quotation from the article:
He spoke before the delegates of industrial nations supplying 90 per cent of foreign aid last year, which, including the communist countries last year totalled $11 billion.
That is $11 billion last year, in 1965.
As for the chairman of the World Bank, Mr. George Woods, he was highly critical yesterday of the aid given by industrial countries to developing countries. Mr. Woods stated that the amount of financial assistance to developing countries was inadequate by any reasonable standard. Since 1961, the level of net expenditures in capital funds of the O.E.C.D. member countries for underdeveloped countries has remained steady at approximately $6 billion per year, he said, and compared to the increasing revenues of O.E.C.D. countries, such expenditures have fallen from 0.8 per cent to 0.6 per cent. Exportation of private capital has increased but the major part has gone to few countries, and very little to the poorest countries.
The Chairman of the World Bank, whose statement was in strange contrast with the relative optimism shown before by the chairman of the committee, Mr. Willard Thorp, and the United States Secretary of State Mr. Dean Rusk, stated that the conditions for granting assistance tend to become more and more difficult-
That is why the Secretary of State for External Affairs said that while we were charging three quarter of one per cent for administrative costs on loans spread over periods of 50 years, with periods of grace of 10 years, there will be no more interest or administrative costs. We will pay ourselves, here in Canada, the administrative costs.
Mr. Chairman, it seems to me that the Canadian people are being laughed at; a monetary policy is in use for foreign countries, a foreign policy definitely out of date for Canada, and the members of Parliament act as weathercocks according to statements which are an insult to the Canadian people.
The Minister of Trade and Commerce, Mr. Winters, said not long ago, in March 1966, as can be seen in La Presse:
Canadians should restrict their demands on the federal treasury.
Everything indicates that we can expect another year of economic progress for Canada, keeping in mind, however, that inflation remains a constant problem, said the Minister of Commerce, Mr. 
Robert Winters, speaking before the Canadian Club in Toronto.
The deficit in the balance of payments, which amounted to 1 billion dollars last year, will be higher this year.
That means that our deficit will exceed $1 billion this year.
I continue:
Mr. Winters said he was concerned about the fall in the sale of Canadian surpluses on foreign markets.
The Minister of Finance said this afternoon that we cannot produce more than we are now producing, that we cannot produce enough to meet the demand. That means that our production is not high enough.
And now the Minister of Commerce goes to Toronto and says that we are worried about our surpluses in Canada.
[DOT] (8:30 p.m.)
One tells us that Canada is not producing enough, that there are not enough products, and the other states that he fears we might not sell our surplus products. Who is making sense in this matter? Of the two ministers, who is lying? The Minister of Trade and Commerce or the Minister of Finance?


An hon. Member:: Both are liars.


David Réal Caouette: I think so.
Mr. Chairman, again I quote the article:
Mr. Winters said he was concerned about the decline in the sales of Canadian surplus products abroad. It is important to maintain costs and remain competitive on foreign markets.
Because taxes are an important part of costs-
That is right; remove taxes and costs will go down.
And the minister goes on to say:
Canadians should not ask so much of the federal treasury.
Canadians want nothing from the federal treasury, except what they are entitled to by the work they do to build their country, nothing more. They are not so demanding; the government is expecting more from the Canadians than the Canadians are expecting from the federal treasury.
The minister continues as follows:
If we want to avoid creating too big a gap between our taxes and those of the countries with which we are competing, the government should carefully select its spending programs and remain indifferent to pressures to spend more than it can afford.
How much can we afford? Is this, in fact, not determined by our capacity to produce?
September 8, 1966

To the extent that we produce, should we not create the capital which would enable us to sell our products? Our Canadian monetary system is only as strong as the Canadian production made by Canadians. There is no doubt about that. The more we produce, the more credit there should be available and, not restrictions on credit. And as I said a while ago, there is no economic sphere in our country unwilling to increase its production.
This is what the Minister of Trade and Commerce (Mr. Winters) added:
It was hard for the Liberal members of the House of Commons to vote against the motion recently put forward by the opposition, to increase old age pensions to $100 per month from $75, as at present.
Hard as it was, the minister will tell us why he voted against a pension of $100 per month. He is very frank about it. He did not ask himself: Can Canada produce clothing and food to dress and feed adequately our older citizens, or build houses to accommodate them properly? That is not what the minister asked himself before the Canadian Club in Toronto. No, he explained why:
We wish we could have done it-
We would have been pleased to give $100 instead of $75.
-however, since it would have cost $800 million per annum and also since, even in the present circumstances, it is difficult to find enough revenues to cover our expenses at their present rate, this additional amount would have strained our economy to a point difficult to cope with.
This is the answer or the statement given by a minister regarding our senior citizens. But did the same minister oppose the interest-free loans that have been granted to foreign countries in the world?
Mr. Chairman, possibly the members of the government, the Minister of Finance, in brief, some people still find facetious the solution advocated by Social Credit-


The Acting Chairman (Mr. Cameron (High Park)):: I regret having to advise the hon. member that his time has expired.


David Réal Caouette: Two minutes?


Donald Cameron: Has the hon. member leave of the house to continue speaking?


Some hon. Members:: Agreed.
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David Réal Caouette: Mr. Chairman, I will not take advantage of my hon. colleagues' kindness and I thank them for this favour; I will not abuse their generosity.
Mr. Chairman, I have this to say: people may laugh at the suggestions made by the Creditistes, suggestions coming from the Social Credit party, Mr. Chairman, but if there are other workable and logical answers, it is time for members of the government to bring them forth. It is time for members of the government to stop running around in circles, always getting the same results. It is time members of the government went after the real troublemakers, namely the financiers; they are the ones responsible for inflation, and responsible for misery in times of plenty, responsible for poverty in many areas of Canada. The hon. member for Lot-biniere (Mr. Choquette) brought up the question at noon, and he was right; I congratulate him for the question he put on the order paper.
Mr. Chairman, we speak of war on poverty. How is it that the government who has promised us to wage war on poverty is today asking us to tighten our belts, rich and poor alike, or simply calls for more poor people, as my colleague from Roberval (Mr. Gauthier) says, instead of making war against poverty? These statements which the minister made this afternoon mean a war against the poor; war against the poor people, that is the path along which we are presently treading.
Mr. Chairman, when a financial system is elaborated which at all times will place in the hands of the Canadian people a purchasing power corresponding to Canadian productivity no more but no less, and when we resort to the distribution of a national dividend based on this productivity, made available to each and everyone of the Canadian citizens, we will have accomplished something. In one year it will be the same old story, in two, ten years we will still be faced with the same gaps, the same situation, just as we have had to put up with this situation ever since Confederation. We will not give relief to the Canadian people with debts and interest on imaginary debts; we will help them by turning over to them what is theirs by right and in justice, and this is what members of the Ralliement are trying to do.

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The only thing I wish is that members on both sides of the house consider other proposals than those brought forward by the minister. Let hon. members propose something else; let us stop imposing sacrifices and let it be clear, once and for all, that Canada is capable of providing an honest affluence to each and everyone of her citizens, that Canada is capable of providing security with personal freedom.
[DOT] (8:40 p.m.)


Robert Norman Thompson: After listening to the statement of the Minister of Finance this afternoon, Mr. Chairman, and the speeches of the representatives of the different parties on the opposition side, I can only say that this is a discouraging debate upon which we have now entered. It is discouraging because as we look back at the last election campaign and the one previous to that, we find that we were told over and over again that the Liberal party had the answer to the economic problems of this country. They were going to completely reverse the trends of recent years and we would be on our way to perpetual prosperity. After listening to the Minister of Finance, I find that he has actually become an apologist for the very policies he used to criticize. It is obvious he has been unable to come up with anything different. He says that we must tighten our belts; that we are now headed into a dangerous economic period.
It is stated that Canada now faces the worst inflationary spiral since the end of the last boom in 1957. Today the Minister of Finance lined himself up with those who see a great economic crisis just ahead. He has joined with those who see disaster, and well he should because if we continue as we have been without coming up with a different type of financial policy, whether it be fiscal or monetary, we are headed for economic disaster. In order to ward off this danger, the government has reversed its policies of less than a year ago. It has become painfully obvious now that in the internal struggles in the Liberal party so far as financial policies are concerned, the orthodoxy of the Minister of Finance has come out on top. It is not a very happy picture, Mr. Chairman. If this so-called inflationary situation should continue, the Canadian people will be robbed of millions of dollars. Those who live on fixed incomes, those who are not able to do anything about increasing their earnings, such as old age

pensioners and farmers, will find themselves in a more difficult situation.
The end result will be that we will be completely priced out of the world markets. We are going to find ourselves suffering from a lack of markets and from unemployment. I am convinced that unless something different is tried, unless some different financial policy is implemented, then it will be only a matter of months until we will be in the same position as Great Britain is in today. I agree with the minister when he says our basic economic problems are twofold. The first is the longer term problem of educating and adapting our great labour force, as well as improving our capital resources to meet the opportunities present in our modern world. Second, there is the shorter term problem of preventing excessive total expenditures, excessive increases in prices and costs of production. True, within the framework of the policies the minister outlined in his first budget, and as he outlined again tonight, these are our basic problems.
However, they need not be our basic problems if we had different financial policies. We, in Social Credit, disagree completely with the proposed cure. As we interpret what the minister has said, it seems to us that he is intent on only diagnosing the symptoms of the disease and not considering its source, the basic cause of the economic sickness that is presently upon us is completely ignored. In no way is he coming to grips with the basic problems. If this course is continued, then in my opinion the affluent Canadian society faces a financial crisis that will make the thirties look like a picnic. Because of the uncertainty that is evident within the economy today, and the prospect of a bust following the present boom, we could tip over into a depression. Then, our financial institutions, as they exist today, would collapse and 75 per cent of everything we own, along with the mortgage companies, would be lost. This country faces a pretty grim prospect.
The minister says that the Canadian people will suffer if a continued boom should lead to a bust. Why should there be a continuous boom and bust cycle in the economy with the tremendous resources that we have, with our ability and our know-how, with our ability to consume and with the markets of the world reaching out to us? Why should there not be a continuous development and growth in our economy? So long as we continue to use the policies that are advocated by the present
September 8, 1966

.government, and they are basically no different from the policies of the administration before them, we face the prospect of a continuing boom and bust cycle.
What we have been trying to say for many years in Social Credit, and we say it again now, is that with a different fiscal policy and with a logical monetary policy-you cannot separate the two-there is absolutely no need for the boom and bust cycle of the present orthodox economic policies that we have had since long before world war I. Until we wake up and realize that there is a new approach; until we understand that the old system that has been geared to production, while it has performed a useful purpose in the past, is inadequate to meet the problems of a society that has solved the problem of production; until we face the basic problem of distribution, then we will continue to bungle along toward the economic chaos and confusion that threatens us today.
In his statement tonight, the minister said that we are now producing about all we can in Canada this year. This is a false statement, Mr. Chairman. We can increase the productive capacity of this country by 50 per cent within two years. We would not have to worry about where we were going to get the resources or where we were going to get the manpower to do it. Just the other day, I was reading a report from one of our automobile manufacturing companies. This report stated that company could increase the productive capacity of its factories by 50 per cent and not add more than 10 per cent to the labour force, and without adding any new equipment. It is untrue to say we have reached our productive capacity in this country. The things that people need to live form just a fraction of our potential productive capacity. In a world that is starving, in a world that cannot find enough to meet the needs of its people, the greatest challenge that faces Canada is to move out and become not only the breadbasket of the world but the source of know-how to help other countries increase their own food production. This is our challenge; this is our world mission.
We are faced with the prospect of one of the largest grain crops we have ever had in Canada. We could produce to capacity in every area of agriculture within a couple of years if we could be assured of the markets that are waiting beyond our shores. There are millions and millions of starving people today in the southern hemisphere and on the Indian
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subcontinent and many other parts of the world who need what we have.
[DOT] (8:50 p.m.)
The minister talks about price controls. During the war price controls worked pretty well and perhaps they were necessary in a wartime economy. But do we have to resort once more to controls which not only limit our production but also our distributive capacity, simply because we refuse to face up to the basic economic reforms that are necessary to make a system which has been developed over the years just a little bit better, and which put it in tune with and on the same wavelength with automation and cybernation, which come to us as a blessing?
When I hear hon. members talk about full employment it seems to me they are closing their eyes to the facts. What we should be looking for today is not for the myth of full employment but for full unemployment. That is the blessing that can come if only we can use the productive capacities which we have developed and which are at our fingertips. The fact is that the day of full employment in the sense of working a 40 hour week 12 months in the year will have gone, if we can put our productive capacity to work.
With our ability to produce ought to come that leisure which will improve our culture, which will permit us once again to enter into the era of art and refinement and cultural development for which we do not have time today as we try to survive and keep enough food in our stomachs and sufficient clothes on our backs.
The minister talks of restricting expansion. He has cancelled the medicare program of the government. Why did he not cut down government expenditure last March? He outlined in his statement today that government expenditure this year is going to be $8,600 million. True the government has cut back on certain phases of development. I believe what if we really wanted to get down to help the present situation we are facing under the orthodox framework put forward by the minister, the first step would be to control and to hold steady on government expenditure.
In his statement today the minister said that the anticipated deficit is $300 million. What happened as a result of the first budget brought down by the minister? Income tax was increased for six persons out of ten; business has been forced to put 5 per cent of its cash into compulsory savings; it restrained new projects. Yet the minister brought in a

September 8, 1966
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budget which showed an increase over the previous year's budget of approximately 10 per cent.
These are questions which are difficult to answer. I believe that we have to come back to basics. There is a lot of talk about inflation. The word "inflation" is used by the minister and by every newspaper today. Every speech relating to the economy of the country includes the word "inflation".
Inflation in its true sense means that we have too much money. Too many dollars are chasing too few goods. We do not have inflation in this country today in the orthodox sense of the word. To use that word is to raise a banner which gives a false impression. What we have today is tight money-deflation.
As far as our monetary situation is concerned-and inflation usually means money problems-what we have is deflation, not enough money to finance the development of our resources and to carry on the expansion of our industries, to finance our trade policies, particularly as they relate to some of the newer nations of the world. But we do not have inflation.
In this regard I agree with the hon. member for Nanaimo-Cowichan-The Islands when he says that the government is going to have to decide whether to face up to an economic problem which really is inflation, or whether it will have to face up to something else which is sending the cost of everything which we buy higher and higher. If it is inflation that we have, it is an inflation of prices, an inflation of our cost of living. It has nothing to do with the inflation of money; it has to do with deflationary monetary policies.
It was also said that we must deal with fiscal policies, placing the emphasis there rather than on monetary policies. It is the government which decides both financial policies and fiscal policies, and the two cannot be separated. Until we bring in financial reform and combine the two with some logical fiscal reform, the problem will never be solved.
I believe that if we are to face up to the realities as they present themselves today, we will have to quit hiding behind phrases which deceive the public and which coerce them to go along with policies which perhaps are necessary within the framework of orthodoxy that the minister presented to us tonight but which are absolutely unnecessary on the basis of logic and reason.
What we are facing in Canada today is a price explosion. Our cost of living goes up

and up. I want to say right now that at the root of this problem is the debt system. The hon. member for Qu'Appelle made an eloquent speech but he did not get down to any different approach. He merely talked in political terms so as to defend what happened under the last administration in light of what is happening now.
During the less than five years of that administration there was a governmental deficit in the country on the federal level as it relates to direct debt, foreign debt and balance of trade of more than $5 billion. That was accounted for in less than five years, and it now is going on and on. With it goes the cost of servicing the debt. If we did not have to pay the $1,180 million that we paid last year by way of interest, where would our deficit be today? Gone.
Why is it necessary to have deficit financing? If perchance the argument that the minister put forward tonight is correct, it seems to me that the first step which he should take as far as governmental expenditures for which he is responsible are concerned is to balance his budget this year.
In addition to this there is the matter of private debt, corporate debt and mortgage debt. The handmaiden of debt is higher taxation-you cannot get away from that. Taxes will inevitably go up. Behind the inflationary crisis we are facing is this cause. It is neither the profits which the corporations make nor the wages that the working people must demand through their labour organizations, or strikes. These are merely the symptoms of something which is much deeper. If the cost of living continues to go up, then the income in the pockets of the people must go up in proportion, or their standard of living will go down.
Along with this is the simple fact that we operate in this country on a debt policy which requires deficit financing on one hand and gross indebtedness on the private sector on the other hand, supported by a continually spiralling increase in the tax load that we carry.
Our budget this year at the federal level is over $8.5 billion. When we get the supplementary estimates that we can expect, the figure will be well over $9 billion and on the way to $10 billion. If we combine this with the cost of municipal and provincial government in this country we reach a figure that is not very far short of $20 billion for governmental expenditure alone.
September 8, 196S

We in this country are grossly over-governed. Compare that figure with the net national earnings in this country-not the gross national product but net national earnings, money coming into the pockets of the Canadian people, whether by way of commissions, the sale of produce, salaries, or what have you. Last year this figure was about $41 billion. Let us suppose that this figure increases by a reasonable amount this year; to be liberal in our estimate, let us say $43 billion is the figure for this year. What percentage of that figure is taken up with expenditure on government at the different levels? It is more than 45 per cent. In other words, more than 45 cents of every dollar which we earn goes to pay for the cost of government.
[DOT] (9:00 p.m.)
History will tell us, if we read history correctly, that no free country, no free society has ever survived when the cost of government has exceeded 50 per cent of the earnings of the people of that society. At more than 45 per cent, this is the problem we face today. This is something that must change. If the minister had really wanted to deal with this inflationary situation as it relates to the cost of living, this situation which has brought about tight money that at the present time we have in Canada, then, I think, the first thing he might have done would have been to hold firm on government expenditures, at least.
Let us look at the picture from a very elementary point of view. It is good to be elementary once in a while. Our problem in Canada is not production. We can produce far more than we are producing. We, perhaps more than any other nation-and I say this even considering the economic wealth of the United States-have solved the problem of production. Neither is our problem consumption. Sure, our standard of living has gone up, but there is nothing wrong with that. If we have the natural resources, the ability and the will to develop those natural resources, why should not our standard of living go up? Why should not every family have a home? There is nothing wrong with having a two-car garage, if that is the standard of living we want.
Our problem is not consumption. Even if we had solved that, and were consuming to our capacity, what about the millions of others in the world who go hungry? No, the
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problem is not consumption at all. Our problem today is one of distribution. We have not solved the economics of distribution. We are trying to apply those economics to a debt system that was geared to production in the days when there was a scarcity, and when we could not produce enough to meet our needs. We had to adapt ourselves to the conditions of the economy at that time. But conditions have changed.
Bring in a monetary policy which will cure the problems of distribution, and all these problems will disappear, as will the booms and busts of our economic system. Instead, there will be a logical and steady growth, even as every living organism must grow.
Beyond this debt picture that we have been talking about is the monetary policy that brings money into our economy. But the essential function that that money performs is that of a debt. They ridicule us, in this party, for talking about debt free money. But money was never intended to be a commodity. It is because we try to make it a commodity that we find ourselves in our present difficulties. Money is a service, a service through which we distribute our wealth, by which we are able to produce the wealth that others may consume.
It is necessary to bring our financial and monetary policies up to date, in an era where the production potential has reached tremendous heights, where there is automation and cybernation, in order for those to be geared to the distribution problems which we have. Yes, we demoralize our people. We demoralize our people today so that we, who as a people have more insurance per capita than any other people in the world, are not willing to invest our own savings in the development of our own resources. We go out and invest in our debts, instead. We hear criticism about so much United States ownership of Canadian industry. The truth of the matter is that for every per capita dollar the United States invests in Canada, three per capita Canadian dollars are invested in the United States. That is done because we do not have confidence in our own country.
Apply this regionally, and look at the west where productive capacity has expanded at an unprecedented rate, both in relation to the population and the economy at large. We do not even have financial policy here in the east, where our fiscal policies are made, where our financial centres are, to encourage investment in the west of our country.

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The other day the government cancelled plans for a pipe line that was to pass through part of the United States, a pipe line that opens unlimited markets for Canadian gas across the border, and would benefit the Ontario user of gas by lowering the price which he would have to pay. In other words, we cut it off. It does not suit our national interest to let it go across the border-never mind the economy. I sometimes wonder if the government is not afraid of another pipe line debate, and rather than let the matter come before the house it disposed of the matter before it got here.
We discourage the investment of our own savings in our own resources. What we need in this country is a stable financial policy that will give us a stable dollar. We have a stable yard; we have a stable pound; we have a stable gallon. Why cannot we have a stable dollar? Why do we have to rob the generations of the future of the savings which have been put away for them today? Why do we have to rob our older citizens, our senior citizens, of their hard-earned savings that they have put away for their latter years? Why should we destroy our own savings? Why are we using a system in which a dollar is a debt dollar, which depreciates in value every year, so that over every ten or 15 year period we know it will be worth 25 per cent less? That is what the cost of living is doing to our dollar today. Why cannot we have a financial policy that will give us a stable dollar; a dollar that is worth a dollar today, tomorrow, next year and ten years from now. It can be done.
One would think with all the ability displayed on the front benches of the government, that something helpful could be defined. I do not care if it is called Social Credit, or anything else. That is not the point. We need a fiscal policy that will work, that will encourage our own people to invest, not in debts of yesterday-no-but in the prospects of an unprecedented productive tomorrow.
Today in Canada our most valuable resource is our own credit. That is something which ought to be used, and used, with the resourcefulness of our own people. Why cannot we use our own credit and our own resources, for the benefit of our own people? That we do not is a paradox.
I would say in closing-my time is nearly up-that the number of ridiculous paradoxes in our economy shows that it is redirection we need, rather than reduced speed. Why

dampen the boom? The construction industry is forced to slow down because of manpower shortages. Nevertheless the cost of governmental administration grows by leaps and bounds, to meet the needs of the new welfare state measures. We are urged to buy Canadian assets back from the United States, but the provisions of our present financial policies make it necessary for our industry to turn to the United States for the kind of risk capital it needs. That is why the west is moving forward; it is not because it is disloyal to Canada, but because the financial centres of the east do not have the vision necessary for the nation.
Why cannot we use our own credit, and our own capital. Canadians invest in the national debt because the return is more secure than from an investment in resource development. Though it is necessary to improve our balance of payments problem, tight money policies and taxation tend to put our producers in a non-competitive position. As I say, the problem is not that of production, but rather the facilitating of measures to enable the distribution of what we are able to produce.
An economist recently commented that we are learning to live with prosperity but we do not know as much about managing it as we do about getting there. Our need in Canada is not to hold back, but to move ahead. In the distribution of goods and services we are in a field where we are just beginning to tap our potential. We pat ourselves on the back for being good businessmen, but we rationalize our dollars-those dollars which have been expended, which have been invested-as being good dollars. At the same time our trade deficits grow and our production slows down.
We slow down the building industry. Today, in Canada, apartment occupancy is at 99 per cent. It is easy to cut a building program off; it takes much longer to get it going again. The disposing of surpluses is a narrow and old fashioned way of assessing our tremendous production potential.
[DOT] (9:10 p.m.)
What about those many countries which do not have enough to eat? What about world markets for our primary and secondary products? The time has come to institute policies which go beyond the mere sale of surplus commodities or the cutting back of productive capacity.
September 8, 1966

Finally, we need to make advances in the field of distribution, moving goods from where-ever they are produced to wherever they are needed. World trade on a new basis for international settlement presents another challenge. We cannot continue in this regard as we have done in the past in the face of one of the greatest challenges of our generation.
Only when all Canadians have an adequate standard of living, only when all Canadians are adequately housed and properly fed, can we adopt the attitudes which have been expounded tonight and pat ourselves on the back. Only when trading policies are developed which are capable of channeling our surplus goods to the needy populations of the developing countries will we be able to congratulate ourselves on what we have achieved. In the meantime, there are too many things to be done, for us to express approval of the financial policy which we have heard enunciated tonight.


William Heward Grafftey: Mr. Chairman, our primary concern when debating this problem of inflation tonight is its effect upon the Canadian people. While I do not belong to the generation which remembers the kind of inflation which occurred in Germany between the two wars, even those of my years are reminded of those days when the people of Germany had, literally, to take their money to market in wheelbarrows. It is because we recognize that inflation affects each and every citizen of this country that every member of this house is taking the present debate very seriously.
I should like to point out that those who suffer most from the effects of inflation are, almost invariably, the poor-those families which are locked in poverty, deprivation or destitution. Time and time again hon. members belonging to the New Democratic Party have recognized that when inflation strikes it strikes with greatest force at such things as food, clothing and housing, all of them nonluxury items, essential items which vitally concern those who are perhaps less fortunate than ourselves.
What I found most disturbing about the minister's speech this afternoon was the fact-and many hon. members have already mentioned this-that he had decided to adopt negative, old fashioned methods of coping with modern problems. Invariably the solutions he proposed in his statement this afternoon, the horse-and-buggy methods which he
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has in mind, are bound to adversely affect the poor, the destitute and the deprived more than any others in this country. Those who are living on fixed or on shrinking incomes, those who are already suffering from the serious inroads of inflation, will be even more seriously affected by the measures which the minister has proposed today.
As my hon. friend from Qu'Appelle so ably said a few moments ago, instead of relying on this negative, horse-and-buggy approach the minister should be enunciating a system of positive politics and policies to deal with modern problems.
We are told that the parents of school children will have to pay up to 15 per cent more for school clothing compared with a year ago. That is the amount of increase in the price of shoes and all the other things needed before children can be sent back to school. What about food prices. Last year, processed cheese cost 39 cents a pound. This year the price is 41 cents. The price of cheddar cheese last year was 65 cents. This year, it is 69 cents. A pound of bacon cost 89 cents last year. Now it costs $1.39. Corn cost 35 cents a dozen, peeled. This year the price is 49 cents.
Every housewife who went to the supermarket last week knows these things. A ten-dollar basket of groceries a year ago cost $13.08 today. Is there a single measure announced by the minister today which is likely to alleviate this situation? I say that the negative, bureaucratic methods of approach adopted by the minister will not even begin to solve the problem of inflation which is besetting the Canadian people.
The minister told us: We are doing pretty well, compared with other countries. We hear such things said time and time again. Sir, when I bring this statement to the attention of my constituents and of other Canadians in all walks of life, they tell me they do not care what is going on in other countries. They say it is our job here in Canada to solve Canadian problems. The fact that other countries are not doing well is no excuse for us to say we can do badly. It is rather like finding satisfaction in the fact that a deskmate has flunked his examinations when you yourself have failed. And the minister is going to fail his examination in tackling inflation if he thinks for one moment that these negative policies of his will work out satisfactorily. They will not.
In outlining the principles of inflation the minister told us that basically speaking we

September 8, 1966
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are faced with long-term problems and shortterm problems. The long-term problems includes automation, technical training, and preparing our work force for new roles in a scientific age. But though he said these things this afternoon, what were the first two priorities to be cut in the short-term program?
We were told we could expect cuts in assistance to research. We were told that the provision of scholarships to universities would be delayed. In other words, it is as if the minister were telling a runner to put on heavy working boots rather than running shoes before trying to win a mile race.
Everyone in this house realizes that while Britain spends $5 per scientist and the United States between $10 and $15, Canada spends only $1 per scientist. Everyone recognizes that government, which has a vital and genuine role to play in positive policies as a means of combating inflation, will have to increase, and increase again, the amount of its assistance to research.
[DOT] (9:20 p.m.)
We have a terrible situation in Canada, where we are losing doctors and medical personnel because we have not supported research in our universities. Yet, of all things, the minister places at the top of his list of cutbacks today assistance to research and education, two primary measures which we must bolster if in a long-term manner we are going to combat the problems of inflation. This is a paradox which I do not believe the government can explain away.
This country is going to be in serious trouble in terms of inflation, in terms of our economic approach to Canadian problems unless we drastically step up our assistance to research; but the government has told us today that, along with postponing assistance to higher education, research is going to get the axe.
I can quite understand the minister saying we must deal with short-term measures; but his negative short-term measures, plus the fact that they interfere with the long-term measures we need to combat inflation, are not the answer. Everybody in this House of Commons who talks with constituents in the lower income brackets, people who have a motivation upwards to better their role in Canada, recognizes that housing, clothing, education and foodstuffs are the main things in their economic picture. But what are we told? Not only does inflation affect the poor, but it is mainly the poor, the deprived and the

destitute who are told to buckle their belts in the program the minister has announced.
What the minister told us today in effect is that the reactionary right-wing group in the Liberal party is finally triumphant; and that, Mr. Chairman, is one of the reasons I quit that party 12 years ago. I realized that this was going to happen. I recognized that when loyal and excellent civil servants like the Minister of Finance and half the range of the front bench finally took over control of the Liberal party, along with the rest of the establishment, that would be the victory of the right-wing, and it has happened today. Where are all the young, forward-looking members in the Liberal party? They are not in the chamber tonight supporting the minister, because not for one minute do they believe in the policies he has enunciated.
Where is the Minister of National Health and Welfare ever since he was told summarily this afternoon that medicare was now in limbo?


An hon. Member:: Where are those who support you?


Mr. Fulton:: Right here.


William Heward Grafftey: They are not behind the curtain, they are in the chamber.


An hon. Member:: Where is your leader?


William Heward Grafftey: I believe he is preparing a speech for tomorrow. This is a serious proposition and I shall repeat it in this debate three, four and five times. It is a tragedy that in 1966 the poor, the destitute and the deprived, the people most seriously affected by inflation, are faced with policies that are going to affect them much more than the rest of the country. I say, let no more members get up in this debate, as did the minister and some others, and praise the prosperity of this country. What does prosperity mean to 35 per cent of the people in this so-called rich nation who are living in destitution, deprivation and poverty? We should not be patting ourselves on our backs about prosperity, and we should not be patting ourselves on our backs about the minister's announcement, which will not in one iota assist these people.
I do not want to be a demagogue. I do not want to say it is an easy problem; but I do say, as has been said in this debate already, that the minister's reactionary, out-dated, horse-and-buggy, negative approach to this whole problem-what I call an establishment
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approach-will not satisfy very many Canadians when they read about it tomorrow morning.
Rather than emphasize a negative approach, let us talk about the positive things we can do in the short-term and in the long-term to combat inflation. I for one do not believe, for example, that housing should be considered in the cyclical approach to combat inflation. Canada is almost the sole country in the modern western world that has not a public or quasi public approach to housing.
Housing is not always considered as a social welfare measure, but at least in western Europe and in most countries in the modern western world it has never been taken into governmental plans in terms of combatting inflation. Today thousands upon thousands of young and middle-aged Canadians are looking for proper housing, but last year 85 per cent of the housing loans made by C.M.H.C. were to Canadians with incomes of $6,000 and upwards.
What are we doing for the poorer people in this country who want decent housing? Our negative, dinosaur Minister of Labour-God Almighty, when will he resign; it won't be too soon for me-not only has ruined labour-management relations but has no housing policy. He and the rest of the ex-bureaucrats sitting on the treasury benches are telling the poorer people of Canada that because of inflation and their own old establishment method of dealing with it, they are not going to have any more houses.
What is happening today? There are hundreds of thousands of Canadians, young and middle-aged, who are looking for houses, but the government tells them the situation is going to be much, much worse before it gets better because we have to combat inflation.
We are told that medicare is postponed for a year. We are told that the Canadian people will have to postpone the fulfilment of their desires for new housing. In Toronto at present the housing situation is more critical than during the second world war. People in my riding, young married people with families who were born at the beginning of the last war, living on incomes of $65 to $85 a week, are paying $75 to $80 a month in rent for terribly rundown houses; yet for the same money they could be paying regular capital and interest payments for C.M.H.C. financed housing. What is the Minister of Labour doing about it? Absolutely nothing. He is just going to let the thing find its own level, and 23033-521J
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this afternoon the Minister of Finance said that the situation is going to get worse because housing is a factor we must cut back on in terms of battling inflation.
Who is it that gets it in the neck every time, Mr. Chairman, as a result of such negative, horse-and-buggy methods? It is the poor again, again and again, who are already so seriously affected by inflation and who will be even more seriously affected by the old, establishment, classical method used to combat it.
I cannot find all the statistics I have gathered on this matter at the moment but I do have a note here which says, for example, that in 1961 when Britain spent $3.15 per capita on public housing, and the United States .08 cents per capita, Canada spent only .10 cents per capita. How about that for a record in the housing field, in a nation that pats itself on the back whenever we get on our feet to say we have the second highest standard of living in the world?
The fact is that we have no housing policy for people in the lower income groups. I suggest that the government should devise a public housing policy in the very near future to deal with this problem, because that coupled with what is happening in rising prices for foodstuffs and clothing, all essential, nonluxury items, affect those people who should be least affected in the whole, total picture of inflation.
[DOT] (9:30 p.m.)
Sir, as the hon. member for Qu'Appelle so ably said, rather than have this negative approach, this restrictive approach, to the problems of our country in so far as inflation is concerned, we should challenge the imagination of the Canadian people, As a Conservative, I say that we should not talk down to the Canadian people with restrictive and negative policies and only tell them to tighten their belts and this sort of thing. We will have to tighten our belts, but this should not be the be-all and end-all of our policy. We should recognize that the government should emphasize the fact that excellence, quality and specialization should characterize our approach to social, political and economic problems both at home and abroad.
I believe that rather than have negative policies we must emphasize a program of positive politics which simply recognizes the spiritual character as well as the dignity of the individual. Building on that which is best from the past, we should usher in in Canada an age of excellence and an age in which we

September 8, 1966
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enunciate a program of positive politics. We should expect nothing but the best from our nation and from each and every individual citizen.
In tackling the problem of inflation, I believe the government has a dynamic part to play in encouraging individual and national excellence. Let me put before the minister and the house a few basic ideas. I believe, as the minister stated today, that men in public office must be willing to emphasize the duties as well as the rights of the individual citizen. The minister did that and did it well today. But what about research, which received the axe from the minister in his speech. I believe that rather than cut back government assistance to research-one of the long term measures which materially will combat inflation-if we Relieve that Canada has a role to play so far as national excellence is concerned, the government must immediately increase its assistance to basic research, especially medical research. For every dollar we spend on research the British spend three and the Americans spend 10 or 15.
I plead with the minister not to approach this aspect of the subject with a closed mind. I cannot for one minute believe, when the government has a sober second thought on this, that assistance to research can or will be cut back sharply in this program.


Mitchell William Sharp: May I ask where I made any reference to cutting back on research. The statement was that the rate of spending on research in Canada must not be as rapid as it
might be.


William Heward Grafftey: I do stand corrected when I used the words cut back, but even if it is not going to be as high as expected, I still am
very concerned.
I believe this perhaps is delving into the realm of theory, but rather than looking over our shoulder at what is going on in the United States and asking whether their cost of living or standard of living is higher or lower than ours, we in Canada should realize that excellence invariably means specialization and selectivity. We live next door to the United States which has the highest standard of living in the world and too often we are influenced by considerations of bigness. Invariably we enter into areas of activity in which we have no business. If we are to encourage national excellence in a positive way, in dealing with problems such as inflation, we should do so by concentrating on

those things which we are by nature best at
doing. We should moreover place more emphasis on the quality of our undertakings than on the bigness of our ventures.
As has been said in the house during the railway debate we must seriously consider, and soon, how best we can bring down progressive management-labour legislation in order to help in this situation. I realize the minister has mentioned the possibility that we will have a national income policy. Let us at the next session get down to business and bring these measures before the house in a positive manner as quickly as possible. I recognize the problems the minister has talked about in respect of Canada, especially when enunciating a guide lines policy for wages and prices. Even in the United Kingdom, where they have a unitary state and where the population in this homogeneous island invariably rallies behind government leadership, they are finding difficulty in making the policy work. Here we would have the problem of sharing jurisdiction with the provinces and, as the minister so well said, we do rely on imports and exports, and this makes it more difficult to have a meaningful set of wage and price guide lines. Yet I feel the federal government can and possibly should take the leadership at the next federal-provincial meeting and indicate wage and price guide lines which can be meaningful. This is one more reason that we should convene as quickly as possible a conference to modernize our constitution so that Canada will have a modern constitution to deal with modern problems in modern times. It was only five or six years ago that no minister of finance would have admitted in this house that the federal authority really could not control inflation of prices and wages. The Wartime Prices and Trade Board did have constitutional difficulty in this regard. I think it is right to say that no minister of finance in the last five or six years would ever have said that it is pretty hard for the federal authority to give meaningful leadership in combating inflation in the decade of the 60's.
I recognize the minister's difficulties, but I agree, with Premier Johnson of the province of Quebec that we cannot divorce fiscal matters from constitutional problems. I believe that at the next federal-provincial conference a beginning should be made to tackle th problems in a sensible approach so that we can have a made-in-Canada constitution suitable to modern times, if we ever are to expect the federal authority to give proper
September 8, 1966

leadership in tackling problems such as inflation.
[DOT] (9:40 p.m.)
What else must we do in a positive way if we are to combat inflation, especially in regard to those now living in destitution, poverty and deprivation in Canada? What are some appropriate measures that must be taken? I do not want to be partisan but I will tell the minister that most people who believe in modern methods to tackle the modern problems brought before us by modern inflation have been rather disappointed at the steps proposed. I include in this category many of the backbenchers in the minister's party, who will probably tell him in the next caucus how disappointed they are with the old-fashioned techniques and methods the minister enunciated this afternoon in the House of Commons.
What are some of the remedies we will have to think about in a positive way? First, excessive interest rates must be controlled. Today-and I am now speaking for myself-the farmer can obtain a farm improvement loan at a reasonable rate of interest. These loans are backed by the government and administered by our banks. Household and consumer loans must be established in a similar manner so that the householder may obtain appliances without paying an interest rate which at times is as high as 35 per cent. I believe that this house should seriously consider providing household and consumer loans under a household and consumer loan act if we are to deal adequately with high interest rates and their effect upon inflation. Such a measure would help people especially in the lower income groups. We must recognize that area development, rehousing, retraining, health measures, urban renewal, the building of technical schools, the training and retraining of our workers are all long-term measures that can never be deferred by short-term approaches, if in the end result we are to lick the problem of inflation.
My great fear is that the minister, in today enunciating negative, short-term remedies to combat inflation will diminish for the next year federal support, initiative and interest in all those problems involving federal government expenditure such as retraining, rehousing, rezoning, ARDA legislation and the problems that will face us in our large metropolitan areas and such as decentralization of industry into rural and suburban areas. The
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hon. member for Red Deer a few minutes ago
was decrying the fact that government-


Herman Maxwell Batten: Order. I apologize for interrupting the hon. member but his time has expired.


Some hon. Members:: Carry on.


Herman Maxwell Batten: Does the committee give
unanimous consent to the hon. member to conclude his remarks?


Some hon. Members:: Agreed.


William Heward Grafftey: I would just like to say that the hon. member for Red Deer, the leader of the Social Credit party, was decrying the fact that government expenditure had become so large, and he said that no nation in the past has been able to survive these kinds of expenditures. I would point out, Mr. Chairman, that no nation in history has been confronted with the modern problems that confront modern governments. Whether we like it or not, big government-whether we are left wing, right wing or in the middle of the road-is here to stay and we will have to accept this fact. More public money will be spent and the money will have to come out of the taxpayers' pocket. Therefore long term measures must be taken to combat inflation and help those who need help in a country, especially where the silent, voiceless poor often do not fall under the aegis of private or public help.
It is my hope-and I am being partisan when I say this-that we shall not compound the felony of the minister's announcement of this afternoon. Not only will his short term, negative measures not work in my view, but I am concerned that they will have a negative result on the long term, basic measures which ultimately will combat inflation.
I hope the government will have sober second thoughts. The Canadian people in business, labour, farm groups, taxpayers and everybody else are ready to tighten their belts in the national interest. But the Canadian people realize that, basically, only positive policies will solve this problem. But this is not the message they got from the minister today. I hope that the triumph of the right wing side of the ministerial benches will be short lived and that the grass roots members in the party opposite will soon rear their heads and the real national interest will be served.
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September 8, 1986


Mr. Mongrain:: New Democratic Party, if he had to assume the responsibilities of the government and solve that problem created by inflation which today is an international problem to which the best experts cannot find an adequate solution. I feel that he would not be happier if he had that responsibility. Fortunately, he does not have it and then he can allow himself to dazzle us with a display of brilliant remarks and well-balanced sentences.


Some hon. Members:: Hear, hear.


Joseph-Alfred Mongrain: When I heard the hon. member for Villeneuve (Mr. Caouette) and the hon. member for Red Deer (Mr. Thompson) tell us that the government stated, without any evidence, that we had reached our maximum production, I asked myself some questions. I told myself that explanations should have been given, of course. I think the minister meant our maximum production with the means at our disposal right now. But like everyone else, I read in the newspapers that our industry and our economy are paralysed up to a certain point, because we do not have the leaders we need. We have to import each year over 1,000 engineers or technicians who are the leaders, w ->
put the producers to work in our industry, because there is a shortage of technicians in Canada. It is a brutal fact for which the Liberal party or the Conservative party or the N.D.P. are not responsible, but it is still a brutal fact which we must admit and live with.
I think this shows the hon. minister to be right when he tells us: I think we have reached our production limit with the means at hand. Let us find other ways to increase our production we do not lack resources.
The hon. member for Villeneuve really amuses me. He also enlightens me, for he is tenacious and most inspired. His colourful language is, I think, also interesting for the House of Commons. I am always the better for having listened to him. Before the last election he came one time to speak in Trois-Rivieres, and the Creditistes took 4,500 votes. He came twice during the last election; they took 2,000 votes. I shall invite him to come and speak three times at the next elections; they will probably win 200 votes.


Some hon. Members:: Hear, Hear.


Joseph-Alfred Mongrain: I must say, Mr. Chairman, that nevertheless I listen to him with interest, just like the crowds back home who gather to hear him, and then tell me: We are happy
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with Real, because he gives us a good time and does not collect any amusement tax.


Some hon. Members:: Hear, hear.


Joseph-Alfred Mongrain: Mr. Chairman, our Creditiste friends give me the impression of being dreamers, of doing what is called wishful thinking. It's nice; I too would like to see our economy re-drawn along different lines, but I do not think one has to take a course in advanced economics to realize the close interrelationship between our financial system and that of other countries of the world to realize that we cannot revolutionize the others, unless there is a response, or a similar movement within the countries which we do business with.
Therefore, blaming the government for not doing that revolution right now is truly indulging in wishful thinking, dreaming a little, Mr. Chairman. For instance, when I hear the leader of the Social Credit tell us: Remove taxes and thus reduce the cost of living, it is simple. Of course, it is a truism: reducing taxes will reduce the cost of living, and at the same time he tells us: Increase family allowances, increase unemployment insurance, pay a dividend to every Canadian citizen.
Of course, if we could, with the help of all the countries whose economy is closely related to ours, make such a revolution, it is possible that that theory might be acceptable, but at the present time I think that it is a dream. I think that we have to cure a serious disease called inflation. That reminds me of a fable by La Fontaine which said: All the animals ill with the plague did not die but all were stricken. Inflation affects all of us, and not only in Canada. The Liberal party is not to blame.
I would also like to take a few minutes to prove that this disease of inflation bears some resemblance to the Spanish flu which we knew in 1918, which struck but did not kill everyone and gave rise to a host of quacks who said: Do this, do that, I will cure you. Quite often, unfortunately, people died instead of getting better. That disease is an international one; it is not raging in Canada only but throughout the world.

May I call it ten o'clock, Mr. Chairman?
Progress reported.
September 8, 1966
8246	COMMONS
Proceedings on Adjournment Motion PROCEEDINGS ON ADJOURNMENT MOTION
A motion to adjourn the house under provisional standing order 39 (A) deemed to have been moved.


Stanley Howard Knowles: Mr. Speaker, on Monday, August 29,
I asked the Prime Minister whether we could anticipate something being done about old age pensions in this part of the present session. The Prime Minister's reply was to the effect that the government's legislative program for this part of the session would be made known to the house as quickly as possible.
[DOT] (10:00 p.m.)
Then, on Thursday, September 1, I asked the Prime Minister whether he was in a position to reaffirm the government's intention to have medicare in effect on July 1, 1967. The following was his reply:
Mr. Speaker, as soon as we complete consideration of the railway legislation it is my intention to make a statement in the house about the priority attached to the other pieces of legislation to be dealt with during this part of the session. The medicare legislation will be included in that list.
There were two commitments by the Prime Minister to make a statement to the house on the legislative plans for this part of the present session. On the second occasion in particular, the Prime Minister stated that he would be making a statement to the house and that the list of legislation to be dealt with during this part of the session would include medicare.
Yesterday, in the absence of the Prime Minister, I asked the Acting Prime Minister (Mr. Martin) if he could tell us on what day that statement by the Prime Minister would be made. He asked me to wait until today. I asked the question again today. We had an interesting and amiable exchange, but got no information. I suppose, Mr. Speaker, I will be told that I have had my answer in the statement made today by the Minister of Finance (Mr. Sharp). I suggest that today's statement is not an answer to the questions I put to the Prime Minister asking him for a statement to the house as to the government's legislative intentions.
We have been told, of course, by the Minister of Finance that the government intends to go ahead with medicare legislation.
[Mr. Mongrain.J

Oh yes, we are told it is going to be put through at this session. But the effective date is to be changed from July 1, 1967, to July 1, 1968. I suggest, Mr. Speaker, that this way of stringing the house and the country along has gone on far too long in Canada. With respect to old age pensions, again we have been strung along. Today, the Minister of Finance talked about the income guarantee program, and we know that is the name the government applies to its old age pension proposal. However, today we were not told what would be the effective date of whatever program the government proposes to introduce.
Now, despite the answer given today by the Minister of Finance I still put my question. We, in this house, are conscious of the number of times that this government has had to change its position, the number of times it has had to retreat. I suggest that the public outcry will call for a change on these two points. The government cannot get away with no action, not even a statement to us, on the old age pension question. The government cannot get away with another year's delay in medicare. To say that these things are inflationary is utter nonsense. They are the least inflationary expenditures the government could make, namely money for old people to buy the necessities of life and a medicare program which simply redistributes the way in which we spend our money on medical care.
I suggest, therefore, that my question still stands. May I put it to the Acting Prime Minister, or whichever minister is going to answer it, in this way: Are you going to raise old age pensions in this session? Are you going to stick to July 1, 1967, as the effective date for medicare? Or are you going to let the brunt of the high cost of living fall most heavily on the people with medical bills and on our senior citizens? It is not good enough for the government to pull the rug out from under its ministers, to pull the rug out from under the people of this country. If we are going to have respect for parliament, let us stand by our commitments. I ask the government tonight what it is really going to do on these two issues: an immediate increase in the old age pension and standing by the effective date of July 1, 1967, for medicare?


Hon. G. J. Mcllrailh (Minister of Public Works):: Mr. Speaker, I am amazed at the unusual type of question put by the hon. member tonight in this adjournment debate. He has addressed himself to a question that is usually dealt with by the house leaders in their meetings and discussions-that is, the
September 8, 1966

priority to be given to legislation before the house. Particularly am I surprised at his attitude when the government has already given its firm commitment that it intends to proceed this session to enact both the measures to which he referred. The government will proceed with the legislation on medicare and the supplementary old age pension legislation just as quickly as it can.


Frank Howard: Let us meet next week then instead of taking a recess.


George James McIlraith: Our present and firm intention, which I think was indicated to the other house leaders, was that when we resumed the session we would deal first with the second reading of the Bank Act legislation so as to get it to committee and then take the medicare bill.
Nothing has been said in the house that would in any way interfere with that program. Nothing has been said today or at any other time that in any way calls into question that program. The program remains unchanged.


Stanley Howard Knowles: Did you not hear the Minister of Finance?


George James McIlraith: Yes.


Paul Joseph James Martin: He never said anything contrary to that at all.


George James McIlraith: In view of the interjection, I should add that the Minister of Finance said nothing that is in any way in conflict with what I have said now.


Stanley Howard Knowles: Just a full year's delay.


EXTERNAL AFFAIRS-DONATION OF CANADIAN BOOKS TO FRENCH LIBRARIES
Mr.   J.-A. Mongrain@Trois-Rivieres: Mr
Speaker, with your kind permission I will try to make my remarks in English in response to my colleagues in the house who occasionally display a lot of effort in extending this same courtesy to the French speaking members when they try to speak French. Therefore I beg the indulgence of the house, because I am not a master of the English vocabulary and cannot speak it as well as French.
This afternoon I asked the Secretary of State for External Affairs a question as a result of seeing something in the papers today. He had announced during a dinner for a French minister that the government is considering offering to six French libraries in
DEBATES	8247
Proceedings on Adjournment Motion different regions of France a collection of Canadian books, both in English and French, 800 in all. I am not trying to be destructively critical; I am just trying to give an opportunity to the government to clarify the situation and perhaps give more information to the public.
I should like to know from the minister or his parliamentary assistant when the government plans to make this gift of books. Second, what will be the proportion of French books and English books? Third, who will be in charge of choosing the French books, and what kind of French books are to be considered? Will they be novels, detective stories, best sellers, or will they be about all kinds of subjects so as to give an idea of our Canadian culture, if there is any? I suppose these books will be bought through Canadian booksellers. I should like the government to assure us of this fact. The last question is this: Is the government considering doing this same thing year after year-that is, doing it next year, and in the years that will follow?
[DOT] (10:10 p.m.)
I conclude my remarks by saying that this is a very constructive move. This is very good public relations and I am sure all members of the house will want to congratulate the government for doing what it has done.


Donald Stovel Macdonald: I would like to thank my colleague for Trois-Rivieres (Mr. Mongrain) who was kind enough to ask his question in English and I would like to return the compliment in the best Canadian tradition by answering in French.
Mr. Speaker, that project has been devised to put at the disposal of the French public in general, such as specialists, scholars and researchers, the bulk of our publications in the main fields of culture in Canada. It is part of the cultural agreement signed by France and Canada on November 17, 1965.
The books were chosen by experts in our National Library in consultation with the services of the Department of External Affairs, taking into account the standards used in libraries. The proportion of French books is approximately 65 per cent.
Virtually all areas of Canadian culture are represented: French and English Canadian literature, history, geography, sociology, economics, politics, philosophy, science etc.
8248	COMMONS
Proceedings on Adjournment Motion
The National Library has already acquired most of the selected titles and is now busy with the listing and labelling. As soon as the department and the French authorities, working in co-operation, have made their choice of the recipient libraries, we will proceed with the distribution of collections. In this connection, the departmental officers took advantage of the presence in Ottawa of the French Minister of Education, Mr. Christian Fouchet, to establish the facts of the question with him today. He promised he would soon communicate to us the list of libraries suggested by the French authorities.
We are of the opinion that this presentation of books should contribute to make Canadian culture better known in France and to bring our two countries closer.
The possibility is not excluded, subject to the means at our disposal, that we may consider, if such were the desire of French authorities, bringing up to date later the collections that we are about to offer the French government.


Ralph Bronson Cowan: Mr. Speaker, might I thank the hon. member for Trois-Rivieres for his courtesy toward English speaking members. I regret that the hon. member for Rosedale did not extend the same courtesy.
This afternoon I thought it advisable to ask the Solicitor General this following question with regard to the hockey player, Carl Brewer. I asked whether the Solicitor General will-
-be notifying that slave-holding state known as the National Hockey League that the free laws of Canada apply to hockey players as well as to all other men in Canada.
This question was prompted by two very pompous statements which have been made, one in Toronto and one in Montreal, by two officials connected with professional hockey in this country.
Carl Brewer is a man of 27 years of age who during the past season attended the University of Toronto. He has been asked to accept a position on the Canadian national hockey team which will be competing for the world championship in Europe and he has been very anxious to accept such an opportunity. But when he spoke to the officials of the Toronto Maple Leaf hockey team who, in

DEBATES	September 8, 1966
the parlance of the game, "own" him, he was advised by the coach and general manager that it would be impossible to release him because if he were to be placed on the waiver list New York would pick him up.
The Canadian Press, a nation-wide news gathering organization which has a reputation extending over 60 years, reports Punch Im-lach as having stated with regard to Brewer:
There's no possible way I can put him on the list, knowing that the New York Rangers would pick him up. It's not me that's going to stop him. it's the whole league.
It is interesting to note that the "whole league" consists of four American teams and two Canadian teams. It is also interesting to note that four American teams would have the right to stop a Canadian boy from playing on Canada's national hockey team after he had expressed a desire to do so.
Even more mouth-filling and pompous are the remarks attributed to Mr. Clarence Campbell, president of the National Hockey League out of Montreal in which he pointed out that not only would the National Hockey League have to grant waivers, but every team in the three minor professional leagues, American, western and central would have to refuse to draft him for a price of $3,000.
I have referred before, particularly on December 21, 1963 in this house, to the slaves who are performing for professional sports in this country, particularly hockey, and when you find them talking about a draft price of $3,000, and hear them talking about the "owners" of a player, and when you see there is no freedom of movement, no further evidence is needed that there is a slave situation in the National Hockey League.
I say that any adult citizen of a free country-and I consider Canada to be a free country-should be able to live his life exactly as he thinks best without being told by some would-be employer: You must work for me and for nobody else. How would you like it if you belonged to one of the professions, let us say the law, and you were told you were obliged to work for a particular employer, the XYZ Corporation, and that if you did not agree to do so you would never be allowed to practice law?
This is the arrangement which the National Hockey League puts into its nefarious agreement with the Canadian amateur hockey association and the international ice hockey federation. I call on the Solicitor General of Canada to advise this National Hockey League or at least those teams which perform
September 8, 1966

under Canadian names that the laws of this country take precedence over any house regulations which have been drawn up either by the National Hockey League or by the Canadian Amateur Hockey Association with regard to the movement of players from one team to another, or out of the league, should they wish to go.
On December 21, 1963, I drew attention to the fact that on July 4, 1963, Mr. Justice Wilberforce in the chancery division of the High Court of Great Britain had ruled in the celebrated case of Eastham v. Newcastle United Football Club, in which that club had not been using the services of Mr. Eastham, that the action of Newcastle United with regard to this player was restraint of trade, and that the player was entitled to make whatever deal he could with owners of other clubs, wherever he might wish to go.
[DOT] (10:20 p.m.)
I would ask the Solicitor General of Canada, if he is not willing to introduce an emancipation bill to release the slaves, at least to draw the attention of the National Hockey League to the decision of Mr. Justice Wilberforce who has ruled that a player has the right to deal with the owners of other clubs, wherever he might wish to go. This is
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Proceedings on Adjournment Motion a legal precedent which can be quoted and used in this country, taken from Britain where it was handed down on July 4, 1963.


Lawrence T. Pennell: Mr. Speaker, I thank the hon. member for raising a matter of considerable interest. Earlier this year the President of the Privy Council (Mr. Favreau) informed the house that the director under the Combines Investigation Act takes the position that the field of professional sport is outside the purview of the act. On the same day the minister further informed the house that the question as to whether and to what extent services may be included under the ambit of the act is presently under consideration.
I wish to confirm that a study into service industries at present not within the scope of the Combines Investigation Act, including professional sports, is being undertaken in the combines branch. As previously announced, however, it is not the intention to make piecemeal amendments to the act at the present time pending the findings and recommendations of the Economic Council of Canada concerning combines, mergers, monopolies and other matters recently referred to it by the government.
Motion agreed to and the house adjourned at 10.25 p.m.
8250

September 8, 1986



APPENDIX


[Stage Direction]
Montreal, August 29, 1966
Ian D. Sinclair,
President
Dear Mr. Pickersgill:
You will recall conversations we have held over some months relative to whether as a contribution to the rationalization of Canadian transportation legislation, Canadian Pacific would be prepared voluntarily to forgo the perpetual exemption from municipal taxation provided in Clause 16 of its contract of 21st October, 1880, which is the Schedule to the Canadian Pacific Railway Act, S.C. (1881) Chap. 1.
This exemption from municipal taxation applies to the main line of Canadian Pacific outside of the boundaries of the original "Postage Stamp" Province of Manitoba, across Saskatchewan and Alberta. This exemption has contractual, statutory and consti-titional validity.
One of the points that you raised in our
discussions was that the exemption imposed a burden upon the affected municipalities which is not borne by other municipalities on the Canadian Pacific system. You also raised the point that a perpetual provision such as that referred to did not take into account changes and varying circumstances which had occurred in the many years since the contract was executed by Canadian Pacific and the Government of Canada.
I have discussed the matter with the Directors of the Company and they have authorized me to say that, under the arrangement hereinafter mentioned, the Company is
prepared to forgo voluntarily perpetual exemption from taxation by the local authorities on our main line in the Prairie Provinces in three equal stages: one-third for the year commencing January 1 after legislation is enacted modernizing and rationalizing existing legislation and taking into account, among other things, the effective changed conditions on freight rates otherwise fixed; a further one-third in the succeeding year; the balance in the third year from the commencement of the period as stated.
The Canadian Pacific proposes that the Government of Canada ascertain from the municipalities involved the municipal taxes that would have been payable, subject to statutory procedures as to assessment appeals, had the exemption not been in effect. When this amount has been determined, Canadian Pacific would make a grant of an equal amount to Her Majesty the Queen in the right of Canada for distribution to the municipalities involved in such manner as the Government of Canada might from time to time deem appropriate.
At any time after the expiry of the period indicated above, the Canadian Pacific would have no objection to action being taken to amend the constitution and the legislation to terminate the perpetual exemption from local taxation referred to.
You are free to make the position of Canadian Pacific public whenever it seems to you desirable to do so in the public interest.
Yours very truly,
Ian D. Sinclair
Hon. J. W. Pickersgill,
Minister of Transport,
Parliament Buildings,
OTTAWA, Ont.
[Stage Direction]
Friday, September 9, 1966