1966-05-17

COMMITTEES OF THE HOUSE

[Stage Direction]
Sixth and seventh reports of standing committee on finance, trade and economic affairs-Mr. Gray.
First and second reports of standing committee on agriculture, forestry and rural development-Mr. Whelan.
First and second reports of standing committee on national defence-Mr. Groos.
[Note: Text of the foregoing reports appears in today's Votes and Proceedings.]
[DOT] (2:40 p.m.)


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, the house will undoubtedly recall that last July at the federal-provincial conference the Prime Minister stated that the federal government would be prepared to make contributions to provinces with respect to medical care programs if such programs met four principles established by the federal government. The hope was expressed at that time that a commencement date of July 1, 1967 would be found to be practicable.
Subsequently, at a meeting of ministers of health held early this year in Ottawa, it was announced in the final communique that several provinces had accepted the federal medical care proposals and had indicated their readiness to commence programs by July 1, 1967. Certain provinces, however, were unprepared to make definite commitments at that time. Nevertheless it was made clear that the objective of the federal government was to commence to make contributions on a nation-wide basis by the target date.
During recent weeks there have been further indications of readiness to proceed on the part of other provinces, through statements made in provincial legislatures. Questions have been raised in this house as to whether the federal government would proceed as from the target date regardless of the
number of provinces committed to participate.
In order to make the position of the federal government quite clear in this regard, and to enable the provinces to plan in an orderly way in advance of the commencement date, I should like to state that the federal government proposes to proceed with the medical care program in the form, and from the date, originally planned. It is proposed to introduce the necessary legislation to enable the federal government to make contributions to any province having a program in operation on July 1, 1967 which meets the four established principles, irrespective of the number of provincial governments having such programs in operation at that time.


Some hon. Members:: Hear, hear.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to say just a word to express a very warm welcome for the statement the Minister of National Health and Welfare has just made to the house. The statement is so welcome that I shall not make any comment about how long we have been waiting for it.
We approve of the four conditions which the government laid down when it got into business in this field, namely the coverage of most kinds of medical care, universality as far as people are concerned, all plans to be government operated, and each plan to be fully portable. The one weakness in the government's position until a few weeks or a few months ago was that the government seemed to be waiting for all or most of the provinces to indicate their willingness to come in. The announcement today that the government is prepared to bring forward this legislation and let it come into effect in any of those provinces which are prepared to co-operate constitutes a signal and important statement.
We believe that if the government will bring this legislation before parliament at an early date it will find this house ready to co-operate in order to get the measure through so that we can at last take this important step in social legislation.

May 17, 1966
Inquiries of the Ministry PRIVILEGE



MR. GORDON-RULING BY MR. SPEAKER

Mr. Speaker:: Before calling orders of the day perhaps I may be allowed to refer briefly to the question of privilege raised by the hon. member for Davenport (Mr. Gordon) last week, at which time I told him I would study his statement and determine whether what he had raised constituted a bona fide question of privilege. My understanding is that his statement was based on a disagreement as to what actually was said by the then minister of finance at a meeting which took place some time ago.
To my mind the fact that someone outside the house places a different interpretation than does the hon. member on what was actually said at the relevant time by the hon. member in his then capacity as minister of finance does not constitute an infringement of the rights and privileges of the hon. gentleman as a member of the house. I must rule, therefore, that there is no prima facie case of privilege.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker, I wish to address a question to the Minister of Labour. In view of the collapse yesterday of the talks in the Montreal dock strike, and because of the great importance of the situation, would the minister advise the house as to his plans to bring about a settlement of the dispute? Will he now take action to sit down with the parties concerned in order to bring about a settlement and, if so, will he hold such meetings in Montreal or here in Ottawa?


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, the government has been considering this matter very carefully since the unfortunate development late yesterday afternoon. It is our decision to appoint a bilingual mediator, one with broad experience in this field. I am not in a position to announce the name of the mediator, but I hope to be able to do so within a matter of hours.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I wish the minister had gone so far as to say whether this mediator would have the power and authority to determine the course that would be followed. If the mediator does not have that power, then the national crisis facing us

will not be settled. Has the government given consideration to the appointment of an administrator so the serious situation that has been created will be met instead of dawdling with it?


John Robert (Jack) Nicholson: With all due respect, I take exception to the suggestion that this matter is being dawdled with. The government appointed a conciliation board at the request of the parties, and the conciliation board's functions have been terminated by the action of one of the parties, not by the government. The usual course provided by law has been followed. As a result of yesterday's action what was an illegal strike yesterday and today may become a legal strike within a matter of days. Until that situation arises the only course that is open to the government is to have the minister, or another person with perhaps better qualifications than a minister, such as the mediator we have in mind, deal with the situation.


Michael Starr: Whether the strike is legal or illegal, nevertheless it presents a very serious situation so far as our shipping is concerned. Instead of delaying in the appointment of a mediator, will the minister call these parties to Ottawa and have them sit down, as has been the custom in the past, to bring about a quick solution to this serious situation?


John Robert (Jack) Nicholson: Mr. Speaker, consideration has been given to inviting the parties to come to Ottawa. There has been discussion on this with some representatives of both interests. Our feeling is that more progress will be made-and this is indicated by telegrams and other messages that have come to me from both sides-by the appointment of a mediator. That, it is felt, is the proper course to follow under the circumstances. We want to get a good mediator as quickly as possible and I think we have such a person in mind.


Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, may I put a supplementary question to the Minister of Labour?
In order to anticipate such disputes and in accordance with the suggestion made by the Montreal Chamber of Commerce, would the government not consider allowing workers or longshoremen to have their say within the National Harbours Board, so that they might express their views?
May 17, 1966


Mr. Speaker:: Order. This question is not exactly supplementary to the previous one, since it deals with general policy. I do not think it is in order at this time.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I should like to direct a question to the Solicitor General, of which I gave notice this morning and to which I understand he is prepared to give an answer. Last week the minister stated that a major policy decision was being considered almost immediately relative to the transfer of narcotic addicts from the women's penitentiary at Kingston to Matsqui in British Columbia. I am informed that this decision now has been reached. I should like to ask whether the minister would inform us of the decision, because this is a most urgent and important matter.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, I appreciate the hon. member's active interest in the field of corrections. I am pleased to advise him that a decision now has been taken not to transfer the present inmates to Matsqui unless they so wish.


Some hon. Members:: Hear, hear.



LABOUR CONDITIONS

[Stage Direction]
QUEBEC-SUMMER WORK FOR STUDENTS On the orders of the day:
Mr. Real Caouetie (Villeneuve):: Mr. Speaker, in the absence of the Minister of Citizenship and Immigration I would put my question to the Minister of Labour.
In view of the numerous applications for employment received from students who are now in holidays, is the minister or his department taking any action to enable students to get jobs during their holidays?
[English1


John Robert (Jack) Nicholson: Mr. Speaker, as acting minister I will take notice of the question and see to it that the suggestion is passed on to my colleague as soon as possible.
Inquiries of the Ministry



BILINGUALISM AND BICULTURALISM


[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, my question is for the Secretary of State. Is the minister aware that the bilingualism and biculturalism commission has hired a United States survey company from Detroit to carry out a survey for the commission in the Windsor area?


Mr. Speaker:: Order. I suggest that this question is not so urgent.


Eric Alfred Winkler: Mr. Speaker, with all deference I suggest it is very important.


Mr. Speaker:: It may be very important, but I suggest to the hon. member that it should not be asked at this time. It could be placed on the order paper. If in the opinion of the hon. member there is a degree of urgency it might be discussed on the adjournment debate.


Eric Alfred Winkler: Mr. Speaker, because of the serious situation that exists in the field to which I have reference, I should like to ask the Secretary of State for External Affairs whether he is aware of what is going on in the Windsor area with regard to the B and B Commission.


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, there is no one who is more aware of what goes on in Windsor than I.


Mr. Speaker:: Order.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Prime Minister. Yesterday in reply to a question asked by the Leader of the Opposition concerning the possibility of Canada recognizing red China, the right hon. Prime Minister said he would be in a position to make a statement in this regard today after certain discussions. I am wondering whether the Prime Minister might now be in a position to make that statement.

May 17. 1966
Inquiries of the Ministry


Right Hon. L. B. Pearson (Prime Minister):: I think I said I would be in a better position today to make a statement about the discussion which my hon. friend the Secretary of State for External Affairs and I had with the United States ambassador to the United Nations. One of the subjects we discussed yesterday was the situation regarding China's membership in the United Nations and what may be expected to happen in this regard at the forthcoming meeting of the assembly, in so far as we were in a position to estimate what would happen. We also discussed the Rhodesian question which I understand is coming before the security council today, and other matters which might appear on the agenda of the assembly in September.


John George Diefenbaker: Mr. Speaker, I should like to ask the Prime Minister whether the visit of the United Kingdom ambassador, Lord Carradon, together with the expected visit of Mrs. White, Britain's Minister of State for Foreign Affairs, indicates that an early decision is to be made on the question of the recognition of communist China.
Would the Prime Minister say whether the views he expressed in his speech the other day were not generally interpreted as being indicative that communist China is to be recognized? Would the Prime Minister also assure the house that before any step such as this is taken, the membership of this house will have an opportunity to discuss it? Will he also assure us that the present republic of China on Formosa shall not be sacrificed in any way?


Lester Bowles Pearson: Mr. Speaker, the right hon. gentleman has drawn more specific conclusions from my speech than I think are warranted. In so far as the visit of British officials which he mentioned is concerned, the purpose of that visit is not to arrive at any conclusion or definitive result in regard to policy respecting communist China. That may, and I am sure it will, be one of the subjects discussed, but it is not the purpose of the visit. Perhaps I will be in a position to make a report on that discussion after it takes place.


John George Diefenbaker: Will the Prime Minister indicate whether the government is giving consideration to recognition, because that was the interpretation given to the speech made in the United States by everyone able to read?


Lester Bowles Pearson: Yes, Mr. Speaker, we are giving consideration to this matter, as I am sure the right hon. gentleman did when he was prime minister. I am sure his government gave continual consideration to this important matter. I can only repeat what 1 have already said. No decision has been made, and there has been no change in government policy on this matter.
I must point out, as indeed I did point out in my statement, that there is one very great difficulty in regard to the admission of communist China to the United Nations, in that there may be a determination on the part of the government in Peking to insist on recognition that it rules over Formosa as well as continental China. Such a determination would present a very real difficulty for representatives in the United Nations.


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I should like to address a question to the Prime Minister arising out of my own reflections on some answers he has been giving in the last few days on the question of the recognition of China, to which reference was made in his recent speech. I would ask the Prime Minister to clarify whether the implications of his recent speech go beyond those in the statement made by a former prime minister, Mr. St. Laurent, a number of years ago in Tokyo, when he said that sooner or later we would have to recognize the kind of government-


Mr. Speaker:: Order, please. This is not a question but an argument.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Heward Graffiey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. In view of the important statement he just made relating to medical care, I should like to ask whether the government has formulated specific plans in order to avoid the serious and critical shortage of doctors and medical manpower which will occur.


Allan Joseph MacEachen: The answer is yes, Mr. Speaker.


William Heward Grafftey: Without being too specific, will the minister indicate to the house what are those plans?
May 17, 1966	COMMONS


Allan Joseph MacEachen: Yes, Mr. Speaker. We propose to introduce legislation as early as possible during the session to establish a health resources fund, the object of which will be to provide additional facilities for the training of medical personnel.


Eric Alfred Winkler: Mr. Speaker, I have a supplementary question. Is consideration being given to an increase in grants for hospital construction?


Allan Joseph MacEachen: Mr. Speaker, consideration was given to this question and an announcement was made last January that we were extending this particular program for an additional two years.


Eric Alfred Winkler: I have another supplementary question, Mr. Speaker. I asked the minister whether consideration was being given to an increase, in view of the fact that this program will create a very acute problem in the hospital field.



AUTHORSHIP OF LETTER CRITICIZING BROADCASTING COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, in order to promote the spirit of fair play and good will among members of all parties, I wish to draw the Prime Minister's attention to a letter which appeared in the May 14 issue of the Ottawa Citizen criticizing the conduct of the chairman and members of the parliamentary committee on broadcasting, films and assistance to the arts, signed by one John P. Matheson.
In view of the fact that some members, and other persons in Ottawa, are of the opinion that this letter was written by the Prime Minister's parliamentary secretary, the hon. member for Leeds (Mr. Matheson), would he mind explaining this obvious case of mistaken identity?


Lester Bowles Pearson: Mr. Speaker, I am grateful to my hon. friend for giving me notice of this question. I assure him that my parliamentary secretary wrote no such letter nor had anything to do with the writing of the letter which is, indeed, signed by John P. Matheson, not John R. Matheson.
DEBATES	5217
Inquiries of the Ministry PENITENTIARIES



REQUEST FOR APPOINTMENT OF FEMALE DEPUTY COMMISSIONER

[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I should like to direct a question to the Solicitor General arising out of a brief which, according to press reports, was received by the government today from the Elizabeth Fry Society of Kingston. Will the minister give consideration to the appointment of a female deputy commissioner within the penitentiary system?


Mr. Speaker:: Order, please. I suggest that this is not a very urgent question. It might be placed on the order paper.



VETERANS AFFAIRS

[Stage Direction]
INQUIRY AS TO LEGISLATION THIS SESSION On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, I should like to direct a question to the Minister of Veterans Affairs. In view of his reply to my question yesterday and my understanding of the terms of reference to the Wood committee, that it is to deal only with the Pension Act and not with the War Veterans' Allowance Act, will he now assure this house that some amendments to the War Veterans' Allowance Act will be placed before us at this session?


Hon. Roger Teillei (Minister of Veterans Affairs):: Mr. Speaker, as I answered in reply to this question yesterday, I am awaiting that report not because it has to do with the War Veterans' Allowance Act but because it is not impossible to imagine that the results of the inquiry might influence our thinking with respect to other parts of the veterans charter. This is why I answered in the manner I did yesterday. At the moment there is no intention in that regard, but I did not want to put it that categorically because this report might well influence our judgment as to other acts affecting the veterans charter.



CANADA ASSISTANCE PLAN

[Stage Direction]
INQUIRY AS TO DATE OF IMPLEMENTATION On the orders of the day:
Mr. Heath Macquarrie (Queens):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. Can the minister advise of the government's

May 17, 1966
Inquiries of the Ministry plans in respect of the Canada Assistance Plan, considering that the April 1 target has now been missed?


Allan Joseph MacEachen: Mr. Speaker, it is proposed to proceed with the Canada Assistance Plan. The resolution is now on the order paper, and it is expected that the plan will be made retroactive to April 1 this year.



INQUIRY AS TO FINAL DELIVERY QUOTAS

[Stage Direction]
On the orders of the day:
Mr. Lawrence Watson (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Finance, who is in charge of the Canadian Wheat Board. Have the government and the Canadian Wheat Board set any figure as to what they hope will be the final quota farmers will be able to deliver before the end of the crop year on July 31? If they have, will the minister try to bring about a working arrangement between the elevators and the railways so that most of this grain can be moved before the last two weeks of July, which has happened in the last two or three years?


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I will be very happy to discuss this matter with the Canadian Wheat Board who have, of course, the authority to fix quotas in an effort to promote equity amongst farmers. I know the wheat board are very anxious to achieve as high and as equal a rate as possible. I will discuss the matter with them and see if I can give a report to the house.



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to ask the Minister of Transport, in view of the fact that it has been several weeks since he informed the house that he had received a copy of the Thompson report, whether he can tell the house when the report will be tabled.


Hon. J. W. Pickersgill (Minister of Transport):: I think the hon. gentleman is mistaken in his assertion that I ever informed the house that I had received a copy of the Thompson report. I said the Privy Council office had received the report and it was
[Mr. Macquarrie.l
being translated and printed. I hope it will be available very soon indeed.


David Orlikow: A supplementary question, Mr. Speaker. Can I take the minister's reply to mean that the story circulating in Winnipeg, that the report will not be published before the Manitoba election, is not true?


Mr. Speaker:: Order, please. The question is argumentative and cannot be received.


John Whitney Pickersgill: It is speculative.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the fact that the People's Republic of China has just exploded what is described as the dirtiest of all nuclear bombs, is the government of Canada planning to express any strong protest through its various channels of communication to the government of the People's Republic of China?


Paul Joseph James Martin: Mr. Speaker, the way in
which to express such a protest is to renew, as we did yesterday, our plea to China that it should join those powers who have committed themselves not to carry out nuclear tests in the pact signed in Moscow in August, 1963.


Wallace Bickford (Wally) Nesbitt: A supplementary question, Mr. Speaker. I did not hear everything the Secretary of State for External Affairs said. Do I understand from his reply that yesterday some communication was sent to the People's Republic of China exhorting that government to participate in the nuclear bomb pact?


Paul Joseph James Martin: No communication was sent to the Chinese people's republic because at the moment Canada does not recognize that regime. But I did express the strong view that the time had come when China should join the majority of the nations of the world and adhere to the Moscow nuclear test ban.


Wallace Bickford (Wally) Nesbitt: A further supplementary question. Was this view of the minister and the government-and it is a very appropriate view-communicated directly or indirectly in some way to the people's republic, other than the minister's statement?
May 17, 1966


Mr. Marlin (Essex Easl):: No.


Michael Starr: It was communicated by mental telepathy.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Reid  Scoll@Danforlh: Mr. Speaker, I wonder whether I might direct a question to the Solicitor General or the Minister of Justice. In view of published reports indicating a substantial increase in the use of wiretapping and other such electronic listening devices, has the minister or his government reached any decision on a national law dealing with this important and disturbing subject? If so, can we look forward at this session to a law on wire-tapping and other such listening devices?


Hon. Lucien Cardin (Minister of Justice):: Mr. Speaker, the subject matter of the hon. member's question has been studied. It is still under consideration, but no decision has as yet been taken on the matter.


Mr. Erik Nielsen (Yukon):: A supplementary question, Mr. Speaker. Will the government consider reintroducing Bill No. C-103 which was before the house in 1964, sponsored by the now Solicitor General?


Mr. Robert Stanbury (York-Scarborough):: A supplementary question, Mr. Speaker. Will the government consider studying private members' Bill No. C-33 on today's order paper, dealing with the same subject?



THE SENATE


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the difficulties which have apparently faced our native Indian people in having those of their own race elected to this house, would the Prime Minister follow the commendable lead set by the Leader of the Opposition when he was prime minister and consider appointing more people of Indian heritage to the other place so that in time we will have at least one member from each province?
Inquiries of the Ministry


Mr. Speaker:: Order, please. This question is of a very general nature and cannot be asked at this time.


Robert Simpson: With all due respect, Mr. Speaker, this is a very important question. As far as its urgency is concerned, I might point out that as the house is faced with a vote on a supply motion this evening, this may be the last time the Prime Minister will have a chance to consider it.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: Mr. Speaker, I will be glad-


Mr. Speaker:: Order, please. The question is out of order.



SUGGESTED ACTION LEADING TO ABOLITION

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. One forward step has been announced today; perhaps we could have another. In view of the fact that Premier Lesage's promise to abolish the upper house in his province is based on a course of action taken by this government, will the government consider taking the same course of action with regard to our Senate, so we can abolish it too?


Some hon. Members:: Shame.


Mr. Speaker:: Order, please.


Stanley Howard Knowles: Mr. Speaker, perhaps we could abolish the Senate at ten o'clock tonight.


John George Diefenbaker: Mr. Speaker, I suggest that most of my hon. friends to the left would be very glad to be in the Senate if they had the opportunity.


Mr. Monleith:: We have certainly had proof of that.



DOMINION-PROVINCIAL RELATIONS QUEBEC-PETITION RESPECTING CHANGE IN PROVINCIAL CONSTITUTION

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I want to ask the Prime Minister whether he has yet ascertained from the United Kingdom government the course of action to be followed in connection with the ex parte application of the Lesage government for an amendment to the constitution to remove the upper chamber in the province of Quebec.
May 17, 1966

Inquiries of the Ministry


Lester Bowles Pearson: Mr. Speaker, I think I can say in reply to that question that my inquiries have indicated that there is no likelihood of action being taken on this matter in the United Kingdom parliament in the immediate future.


John George Diefenbaker: Do they recognize the unconstitutionality of it?



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: Mr. Speaker, on May 10 the hon. member for Churchill asked me a question, and in so doing drew to my attention the fact that a judgment of the court of appeal of the province of Manitoba had had the effect of applying the Migratory Birds Convention Act to Indians living in that province.
I want to tell the hon. member that I have found there were two cases to which the act applied the first being the Daniels case. Mr. Daniels has now told us that he would like to appeal, and we have undertaken to finance an appeal against the decision to the Supreme Court of Canada.



TORONTO-IMPORTS OF FOREIGN GASOLINE AT DISTRESS PRICES

[Stage Direction]
On the orders of the day:
Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys):: Mr. Speaker, yesterday the hon. member for Greenwood asked what action would be taken in response to the protest made by the representatives of service station operators in Ontario regarding a recent importation of gasoline into Toronto.
The letter of protest to which the hon. member referred had not reached me at the time of his question. I was aware of the shipment, however, and my officials and I have been in touch with the company concerned for some time with a view to ensuring conformity of the company with the national oil policy. I expect to have further discussions with the company in the immediate future to determine whether any special action is required. I do not think I need assure the house that the government stands firmly by the national oil policy.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question which can be accepted by the Minister of Labour, the minister of northern affairs or the Minister of National Health and Welfare. May I ask one of these gentlemen whether the government has taken any appropriate action to alleviate the situation which is developing at Fortress Louisburg.


Mr. Speaker:: This question seems to be of a very general nature. It is very difficult for the Chair to determine how urgent it is because it is couched in very general terms.


Malcolm MacInnis: Mr. Speaker, it appears to be in general terms but I am sure the Minister of Labour or the minister of northern affairs, to whom I have spoken about the situation outside the house, or the Minister of National Health and Welfare, with whom I have attempted to get in touch but have spoken to his executive assistant on the matter, should have an answer to the question.

The house resumed, from Monday, May 16, consideration of the motion of Mr. Sharp for committee of supply, and the amendment thereto of Mr. Hees.



FINANCE-TIGHT MONEY POLICY-NEGATIVE APPROACH TO PROBLEMS

Mr. J. R. Keays (Gaspe):: Mr. Speaker, we are now witnessing a novel situation where the official opposition has brought in an amendment to a supply motion-and the three members on the government side who have so far spoken in the debate have all admitted that there were problems in housing in Canada. I hope tonight these gentlemen will vote for the amendment, they having realized that there is a problem which must be cured in the immediate future.
The amendment moved by the hon. member for Northumberland deals with the tight money policy of the government, how it is affecting the economy of the country and housing in particular. The amendment relates to the existence of this tight money policy and the economic ills which have brought it about. The tight money policy of today has been caused by the financial blunder of the budget brought down by the Minister of Finance.
May 17, 1966

No one speaks today of an inflation psychosis. It is real, and it is with us. As I have said, the financial blunder of the budget is the cause of this inflation. It has been brought about through the indecision of the government in monetary matters and in not using effectively the monetary machinery and techniques available to the government to check the continual decline in the value of the dollar which, if left unchecked, could lead us to the brink of bankruptcy.
I said on a previous occasion that the approach of the Minister of Finance to inflationary problems in this nation today has been negative. It has completely ignored the increase in productivity; has discouraged the expansion of production in this country; has withheld certain projects which could contribute to an expanded production; and has allowed the reduction of our productive capacities across the country. This was the negative approach taken by the government. I believe, Mr. Speaker, everyone will admit that the only possible solution to this inflationary pressure in Canada is to increase productivity.
A growing economy needs a growing supply of money, thus assuring a fairly steady growth curve. A full economy requires the full employment of our human and material resources. This is not the approach taken by those who sit on the treasury benches. They believe in a tight money policy similar to that of 1956, which opened the door to recession and retarded economic growth. Shortage of funds is not the responsibility of the banks, the insurance companies or other lending institutions. Shortage of money is the outcome of the policies of the government of the day.
If the government is sincerely in favour of tight money to fight inflation, then why does it not explain its policy to the people? It hates to face up to or discuss the problem, hiding behind the blame which is placed on the banks and the other financial institutions of this country. This is unfair to the banks and is creating a superficial inflation additional to an already existing and real one.
It is well known that tight money comes about when the Bank of Canada decreases the cash reserves of the banks or holds them constant, when growing demands exist from bank customers for more loans. The end result is that money and credit grows scarcer and inevitably dearer. The long delay in the revision of the Bank Act is the largest single 23033-3311
Tight Money Policy
contributor to the fact that today there exists in this country a tight money policy.
[DOT] (3:20 p.m.)
Since 1963 we have been speaking about bringing in revisions to the Bank Act. That, to date, has not been done, with the end result that today banks, and other lending institutions do not care over much to place their money in the mortgage field. Those institutions possibly are carrying larger cash reserves than are necessary. I believe the financial institutions want to know what will happen to them after the Bank Act is revised. Passage of this measure will greatly relieve the money supply situation. Only then will people be able to get money for house building and for urban development.
I therefore urge the government to pass this legislation as soon as possible, thereby allowing banks and lending institutions to know the conditions under which they will operate for the next ten years.
The tight money policy is affecting those who today need housing. It is also affecting the small businessmen of our country. They are the ones caught in the squeeze. In most cases they deal with consumers and if the consumers, pressed by inflation and additional living costs, cannot make ends meet, cannot look after their own material welfare, how can they pay their bills? As a result the businessman is caught in the financial squeeze, and because of the tight money policy cannot borrow more money from the lending institutions. As a result he cannot expand, and in some cases has to retrench his position because he is not paid for his products.
I am convinced that by increasing national productivity; by making more goods available and making inventories reasonably sufficient to meet daily requirements is one way of meeting inflationary pressures. However, that is not the only way to cure inflation.
I strongly urge the government to take another look at its fiscal policies, with a view to possibly changing them in order to relieve the country of the inflationary danger which now faces it. An economy to keep growing requires full employment of human and material resources. We are neglecting those whose fate it is the hardest to solve; those now living in pockets of high unemployment and poor productivity.

May 17, 1966
Tight Money Policy
We must also realize that to combat inflation and the causes of tight money the government should retrench with respect to federal expenditures. I agree with this move which the government has tentatively made. However, I think it should have gone further and retrenched in expenditures on projects which by their nature are unproductive. It should have concentrated on projects in areas of high unemployment, which could have been a contributing factor to increased national productivity. That indirectly would have raised the standards of living of those who still aspire to reach the average national income.
Insurance companies and large lending institutions are in an unsecure position. They have a greater proportion of liquid assets on hand than is necessary. This is because they are awaiting the amendment to the Bank Act.
Yesterday we heard many hon. members speaking about the needs for additional housing in this country. I do not think it would be unrealistic to state that in 1966 we need not 160,000, not 170,000 dwellings, but 190,000 dwellings. Statistics will show that people now coming into the labour force, that estimated 1 million people for whom we shall have to find jobs in the near future, all aspire to having a home. It is regrettable to note that we shall build fewer homes this year than we did last year, when we ought to be building 5 per cent to 10 per cent more. Two billion dollars will be needed for mortgage financing in 1966. I hope this money will be made available, either by direct government lending or by informing lending institutions of how they will be affected by the new Bank Act, thereby possibly bringing about a release of money for the home building industry.
I am not sure whether the government is delaying construction during the summer . months in order to allow more building to take place during the winter months when unemployment is higher. I would, however, utter a word of caution. In certain areas of Canada it is practically impossible to build a home in the winter as cheaply as in the summer. Many of those who were promised the $500 bonus for building during the winter months to date cannot obtain their money; not because they have not completed their houses inside; not because the houses are uninhabited, but in five cases that I personally know of because houses could not be completed owing to the rigours of the winter. I hope the minister realizes that finishing bricks, mortar and other exterior parts of

houses is difficult when those building the houses face temperatures of 10, 15 or even 20 degrees below zero.
Possibly I should not neglect at this time to thank the Minister of Labour for having opened an office in the lower St. Lawrence region. That will permit prospective home builders to obtain advice and to meet at first hand the employees of the office, thereby facilitating ways and means by which funds can be obtained. I hope that opening the office does not mean that no more money is available for the lower St. Lawrence; I trust there will be funds left over for those in that region who wish to borrow.
[DOT] (3:30 p.m.)
One of the dangers of curtailing the housing program is the possible loss of our skilled labour force. The president of the National Housebuilders' Association, Mr. Gelinas, is accusing the government of having pushed house prices beyond the means of many Canadians. He also states that last year the federal government asked the industry to gear itself in readiness to double production. Obviously such planning needs an assurance that mortgage money will be available. Mr. Gelinas is reported in the Globe and Mail of April 7 as saying:
Today the government, in its concern about inflation, has taken a deliberate course to restrict mortgage funds available under the National Housing Act. Our members have already experienced the apparent new policy which has even removed Central Mortgage and Housing Corporation from its normal role as a lender of last resort.
In some areas it appears that the corporation has declined to approve loans for presold houses to home-owner applicants. Mr. Gelinas comments:
It is our contention that this policy is not halting inflationary trends, but rather is contributing to inflation.
When a man with the authority and experience of Mr. Gelinas speaks on this subject everyone must recognize that there is a danger attached to the restriction of the housing program. I believe that the tight money policy, if unchanged, will lead to economic disaster in those areas of Canada where there is at present a depression or where unemployment figures are high. People living in such areas never seem to reach a fair goal. When times are good across the country we bring in a tight money policy. We say there are inflationary pressures in the economy and proceed to carry out measures of retrenchment.
May 17, 1966

On the other hand, during a period of recession we tend to bring in policies beneficial to areas which have shared most in the good times and the other people to whom I have referred are left to suffer their fate. I sincerely urge the government to take a second look at those of its policies which have helped to create inflation and to introduce others designed to remove inflation as quickly as possible. They should not allow their present policies to prolong the inflationary pressures now present in our economy and which must be eradicated if we are to bring a fair degree of prosperity to our citizens.


Mr. Gerard Loiselle (St. Ann):: Mr. Speaker, I was somewhat surprised when I read the motion of censure moved by the hon. member for Northumberland (Mr. Hees) to see that the government is blamed for restricting loans made by the Central Mortgage and Housing Corporation.
People seem to think that the C.M.H.C. is a lending company which must loan money to the contractors who want to expand their industry.
Such is not my opinion because the C.M.H.C. exists only to stimulate the private sector of the building industry. I would like to quote from a booklet published by the C.M.H.C. about some of the responsibilities of that corporation which is not, in my opinion, a lending company:
As a result, the corporation is concerned with all the aspects of housing, of the expansion and development of cities. In addition to looking after mortgage loans, the corporation is concerned with research on housing, city planning and urban renewal, with the creation and expansion of the mortgage market, with the improvement of house plans and building as well as with the construction of houses to meet the needs of some particular groups, such as old people, low-income families and university students.
That is the framework within which I will discuss this afternoon the motion of censure before the house.
People seem shocked because the government is limiting borrowing sources. In a statement made last May 3, the responsible minister said:
-the government is taking, and will continue to take every step necessary to ensure a program of direct mortgage loans by Central Mortgage and Housing at the same level as that of last year when, including the fall program, loans for approximately 31,500 houses were approved-
Tight Money Policy
There is no restriction. The government is undertaking today to continue the same expansion program in the housing field as last year.
The government does not refuse to guarantee loans. It is up to private industry to find lending companies which will enable it to continue its work.
Personally, since I represent a riding in the city of Montreal, I will limit my remarks to urban renewal in connection with the construction of one-family dwellings.
In Montreal now the problem is as follows: a part of the population is leaving to settle in the suburbs. The same thing is happening in most of the large cities, and that is why there are houses to rent. They are vacant because it is impossible to offer the citizens modern and sanitary housing such as they can get in the suburbs.
[DOT] (3:40 p.m.)
I have friends of my own who bought houses in the suburbs and, within a year, they were obliged to come back to live in the city of Montreal for the school boards of certain suburbs could not provide the facilities available in the metropolis. Some families must therefore come back to the big city of Montreal, where they have all the required facilities.
I do want to discuss urban renewal, because I five with this problem in the city of Montreal. I have referred to this problem on many occasions in this house, and, in my capacity as a member for 16 years of the Montreal municipal council, I shall continue to advocate urban renewal.
I am very pleased that the Central Mortgage and Housing Corporation Act was amended in 1964, precisely to facilitate these renewal developments.
The problem faced by our municipalities in the province of Quebec is that the provincial government did not always take a hard look at this problem. In all other provinces, the authorities have set up a municipal board, tp provide the various municipalities with the facilities to consider the renewal problem. That is what we lacked in the province of Quebec.
The city of Montreal succeeded, in the past, in developing the housing centre known as "Les habitations Jeanne-Mance". The only outlay by the provincial government was a $1 million grant, and had it not been for the good will of the municipal administration at

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Tight Money Policy
the time, which concentrated its work toward the improvement of the centre, "Les habitations Jeanne-Mance" would not exist today.
Since then, we have had two large sections expropriated for renewal in Montreal, that is the C.B.C. section and Victoriatown, which were torn down for improvement; but no other area was restored since the construction of "Les habitations Jeanne-Mance" in Montreal.
Even if the situation requires it, no other project is being developed at this time. But a 263-acre project called 'La Petite Bourgogne" will shortly be started, in my constituency. This 263-acre area is going to be a most difficult problem for the city of Montreal, because the province of Quebec organized the General Housing Corporation only a year ago. That body is still surveying the problems and cannot, at this time, assist in any way the municipalities which would call on its services. I hope that the government will shortly take the necessary steps to help it show what it is worth.
The evil of slums is not simply an almost latent sore but a grave illness affecting a large part of the social body of which we are all limbs. Those who have had to live in those slum areas know what it means. Unfortunately, members who live in areas where construction is largely of the detached unit type are not aware of the problems involved in renewal. It would surely be proper if every member were informed of this problem. Before lending money for the construction of single family units, the Central Mortgage and Housing Corporation should- and will-contribute to further promotion of the renewal plan. I understand that the C.M.H.C. can do nothing unless the provincial government helps the municipalities in these areas.
The first responsibility for a building lies of necessity with the owner who must protect his building against wear and tear, make it pleasant and clean and modernize it. The tenant also has some responsibilities: he must co-operate with the owner in the maintenance of the building, or that part of the building he is using, and pay a rental appropriate to the quality of the premises.
Studies of certain housing projects in Montreal have shown that tenants do not apply to their housing the share their income would justify. Thus, the 220 tenants living in the district commonly known as Victoriatown, in Montreal, were devoting an
[Mr. Loiselle.l
average of 10.8 per cent of their income to lodging while, according to the C.M.H.C. scale of rents, they should have paid twice that amount, and that without considering the cost of services. Those living in the district now occupied by "Les habitations Jeanne Mance" and the C.B.C. were in a quite identical situation.
Moreover, too often the municipal land tax, far from promoting urban redevelopment, brings about a gradual deterioration of buildings; a window made more attractive, a lawn improved, a balcony or a flight of steps repaired, are all improvements increasing the land assessment of the building and, hence, the municipal taxes.
No wonder that the owner does not repair his building which falls to pieces; consequently, the municipality's main source of income dries up instead of increasing.
The role of enterprises, institutions and public bodies must not be merely that of owners or tenants, as I outlined, but also constitute an incentive for governments and small owners, so as to promote conservation, restoration and redevelopment of properties.
If the primary responsibility for urban renewal falls on the taxpayers, the initiative must be taken by the municipality whose responsibility it is to develop a program of urban renewal.
In the field of loans for the purchase of houses, federal legislation led to significant accomplishments in the province of Quebec, but in the fields of public housing, renovation and renewal, we did not get our share.
I am not trying to blame the Central Mortgage and Housing Corporation. If the province of Quebec did not get its share of the amounts at the disposal of the corporation, I ascribe this to the fact that it did not have, within its administration, any commission to maintain contacts between the provincial government and municipalities and the central government. This is being settled. Unfortunately, it has taken too much time; the government of Quebec thought that other problems were more urgent. I have always said that urban renovation in the city of Montreal, just like in other areas of the province of Quebec, is a matter of urgency and must come about. I hope that the Lesage government, which will be re-elected on June 5-


Some hon. Members:: Oh, oh.


Gérard Loiselle: -will concentrate on this problem. I am certain that everything I said
May 17, 1966

is true; the member for Villeneuve (Mr. Caouette) knows that very well but he does not want to admit it.
[DOT] (3:50 p.m.)
Two years ago last January the Montreal city council passed a motion of mine to facilitate urban renewal by private enterprise. We know that the Central Mortgage and Housing Corporation Act now provides for payment by the said corporation of up to 50 per cent of expropriation costs upon demolition of a sector. At that time, I had suggested that the city of Montreal should order some sectors torn down, after carrying out a study, with the consent of the Central Mortgage and Housing Corporation, and that, upon completion of land expropriation, this land should be resold to private concerns which would then build houses according to municipal standards and regulations, in order to give the sector a better appearance.
The fact is the Central Mortgage and Housing Corporation Act does not now provide for the cost of renewal by private enterprise and, as a result, all fields are affected.
I have mentioned the city of Montreal, because it is my city. If it decided to expropriate certain sectors, with the agreement of the corporation, and if it could sell the land to private concerns, then the profits derived from such sales could be shared between the Central Mortgage and Housing Corporation and the city of Montreal under a previously signed agreement. The Central Mortgage Act does not yet provide for assistance for installation of water-mains and sewage systems, for street repaving, and tree planting, etc. The act provides benefits which it is incumbent upon us to use. Unfortunately, the province of Quebec did not have in the past any opportunity to take advantage of those benefits. The city of Montreal does what it can, and in fact it adopted a building code about one year ago. By applying this code, we can prevent houses from deteriorating too fast. In some areas, we have 15- or 20-year old buildings that could be called modern slums. The building code the city council adopted will force property owners to restore and keep these buildings in good repair, so that they will not become slums which we would have to expropriate and demolish after a few years. If that building code is adequately enforced, it should accomplish a great deal.
I hope the Central Housing and Mortgage Corporation will study that building code; it
Tight Money Policy
will then know what is expected. To prevent thousands of wage-earners from going into debt and tying up their future earnings in order to solve their housing problem, the federal government asked parliament to pass certain amendments to the C.M.H.C. Act during the 1964 session.
In order to remedy this situation, the Central Mortgage and Housing Corporation Act provides for credit and subsidies for the construction of low-cost dwellings. There is also an agreement between the federal and provincial governments on the construction of housing and rental units, where existing, dwellings are restored to house families in the lower income bracket.
But, as you know, when there is expropriation after agreement with the C.M.H.C., the city has to find housing for the small wage-earners. Now, the C.M.H.C. amendment of 1964 stipulated that municipalities or the provincial government could purchase certain existing buildings, renovate them and help the small wage-earners to move into them.
Renovating does not mean merely demolishing and building anew. There are two aspects to the problem: the first is the renovation of unsanitary dwellings; the other is the assistance required by families in the low income bracket.
In this regard, the Montreal city council expects to set up a three-fold system. I have already spoken of the Petite Bourgogne center that the city of Montreal is undertaking this spring and which will cover an area of 263 acres. The city of Montreal, in its eagerness to stimulate urban renewal, has found a formula which is unique in North America, I believe.
First, there is a grant for renewal. I spoke of that amendment in the last speech I made during the last parliament and I want to repeat it. This grant for renewal will help the owner who wants to repair his house according to the standards of the city of Montreal, the latter will be entitled to a certain amount according to the cost of repairs. That will help the owner who does not have the means to restore his dwelling and make it adequate.
Second, a grant for demolition and building. When we speak of housing, it is not only a matter of demolishing, as I said a while ago, for the purpose of rebuilding. In some cases, we must not raze everything to the ground. We can repair, renovate, demolish and rebuild when that must be done. In certain cases where the city would force an owner to tear down his building because it is

May 17, 1966
Tight Money Policy
not adequate or because it is substandard, the owner, if he accepts to rebuild on the same site according to the standards and regulations of the city of Montreal, will be given a grant of so many dollars by the city.
Those are advantages that, I believe, the General Housing Corporation of Quebec will make its own. I would like to see the Central Mortgage and Housing Corporation include amendments concerning renovation.
Third, the city of Montreal will provide rent grants. This may seem extraordinary at first, but it is quite simple. If, by renovating, the city or a government forces a landlord to demolish and rebuild, it is logical to think that this landlord will not be able to rent the rebuilt or renovated premises for the same price as the old ones which rented for perhaps $30 or $40 a month. A modern, rebuilt apartment cannot be rented under the same conditions. That is why the city of Montreal decided to subsidize rents by giving landlords an additional amount of money fixed by the Rental Office according to the means of the head of each family, his salary, his dependents and the rent he is able to pay.
This is another amendment which would be helpful to all municipal governments wishing to make renovations. I know that all municipal administrations will not find it easy to put this amendment into practice, but I believe it can easily be done with a provincial agreement between all levels of government and the C.M.H.C.
As I said earlier, Montreal now has the "La Petite Bourgogne" project. Many other districts in the city of Montreal should be renovated, but they cannot be without the help of Quebec or the central government.
The problem of urban renewal is not confined to the metropolis. A report published some time ago showed the acuteness of the housing problem in Trois-Rivieres; a few months earlier, Quebec and, recently, West-mount found it necessary to undertake some renovation.
In considering the great cost of urban renewal, one should also bear in mind that cost is of no consequence when the health of almost half the population, the development of family life and the freedom of community life are involved.
Now, I spoke of renovation. There must certainly be other ways to remedy the situation, for it must be improved. Suggestions are not always accepted by higher authorities, but they must be made, so that the authorities may see what can be done.

Three suggestions were made in the magazine Commerce published last year. One was that the province of Quebec withdraw from the joint program offered by the national act and pass its own housing act.
It surely has deficiencies, but it also contains many provisions from which the Quebec government might take inspiration. I am not quite sure whether the Quebec government should draw up its own legislation and withdraw from this joint program. It is urgent, however, that it should take prompt action in order to help our municipalities to carry out renewal projects.
But I feel the third suggestion was the best of all. Municipalities should be left to transact business themselves with the C.M.H.C., just as other provincial governments, but part of the cost charged to municipalities should be paid, because their applications would have been approved by the C.M.H.C. This is how the "habitations Jeanne-Mance" in Montreal were built. The government of the day gave full authority to the city of Montreal to transact with the Central Mortgage and Housing Corporation and that is how the only low-rental housing project in the province of Quebec came about. I trust that others will follow in the not too distant future, that other municipalities in the province of Quebec will be able to benefit from the Central Mortgage and Housing Act. But I would also like to see the C.M.H.C. help private enterprise, because in the field of urban renewal, it must be recognized that urban housing cannot be fully made up of low-rental dwellings; modern houses must also be built for citizens who can afford them. But private enterprise and our municipal governments must be allowed to submit such plans to the citizens of Canada. I trust that the Central Mortgage and Housing Corporation, in addition to what it is already giving, will be able in the near future to make amendments so as to promote renewal.
[DOT] (4:00 p.m.)


Hon. Hugh John Flemming (Vicioria-Carleton):: Mr. Speaker, I consider it a great privilege to take part in a debate of this nature on a most interesting and important subject. Because of the very word "money" and its implications and the fact that it contributes to the well-being of so many people, I feel this is a most fascinating subject. It seems to me that at this time a
May 17, 1966

repetition and careful analysis of the amendment itself might be useful. The amendment states:
The policies of the government in imposing tight money and denying builders and prospective homeowners needed mortgage funds, constitute a negative approach to the problems facing our economy and are seriously impeding the development of the nation.
That is a serious indictment, and the fact that no one speaking from the government side has attempted to explain or deny that tight money exists or has explained the reseasons for its existence is indicative of the government's failure. It is not my intention to stress the problems of housing. It is rather my intention to emphasize the general desirability of not applying uniform methods to combat the present existing situation. Uniform methods cannot be successfully applied throughout the length and breadth of this country because there is too much diversity of income, diversity of climate, diversity of general economic activity and diversity in many other ways. It is impossible for any government to adopt a uniform policy to deal with a situation which we all agree exists in this country and in the United States. I refer, of course, to the danger of inflation.
The hon. member for Northumberland (Mr. Hees) deserves credit for bringing this matter to the attention of the members of this house by way of his amendment. The events leading up to the present situation should be carefully examined with a view to understanding the actions of the government in dealing with the whole question of inflation or the danger of inflation.
In my view the government has permitted inflationary pressures to build up. Last year the money supply available in this country increased very rapidly. The government is now attempting to correct that situation but it is late in doing so. I am not one of those who suggest it is too late; I just say it is late. It has been the attitude of many speakers supporting the government that the attention of the house and the country generally should be directed to the fact that we have been enjoying a boom period. Certainly that is a correct statement, and it is a source of great satisfaction to each and every one of us that we are still enjoying a boom period.
It seems to me that the existence of a boom should bring about a need for the government to take appropriate action, but that is exactly what this government has not done. This government should have succeeded in balancing the budget during this boom period.
Tight Money Policy


John Robert (Jack) Nicholson: Mr. Speaker, would the hon. gentleman permit a question?


Hugh John Flemming: There is no reason why I should not.


John Robert (Jack) Nicholson: Does the hon. gentleman not agree that with a budget of some $8 billion the government has virtually balanced it by coming within $43 million of the budget estimate? The hon. gentleman has had experience in this field, so I ask him for his view.


Hugh John Flemming: I should like to say that I am actually talking about the situation in 1964 and 1965. The minister was busy with one of his colleagues at the outset of my remarks and perhaps did not hear me say that I intended to deal with events leading up to the present situation.
I am sure hon. members would agree that it is necessary at times to indulge in deficit financing, and I would be the first person to acknowledge the truth of that under certain circumstances. I do not believe that is the case in times of booming economies. In this year of our Lord, 1966, we are faced with a situation which demands drastic action. I do not suggest it is too late to take action at this time and I am not one who is particularly pessimistic about the outcome, but the government must recognize certain basic fundamentals if it is going to deal with the situation. One fundamental that must be recognized by the government is that it cannot deal with every section of this country in the same way.
Last year we experienced a reduction in income tax and an enlargement and extension of the supply of money. However, production did not grow to the same extent as the gross national product. We should have learned from this fact that it is necessary to maintain productivity at about or more than the same level as the gross national product. Surely that is a reasonable statement. But that was not the case last year.
How does one maintain this level? That is a very good question, Mr. Speaker, and I propose to answer it to the extent I am able. I have referred to boom times and the question of deficit financing. In booming times we should balance the budget and indulge in that kind of cyclical financing which brings about a surplus in good times to provide for the proverbial rainy day. It is my observation that this sort of doctrine is not popular in this day and age. Everyone wants men and

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Tight Money Policy
women in public life to get up and advocate more and more spending. In my opinion the government should have followed a different course in attempting to balance the budget.
[DOT] (4:10 p.m.)
We heard the Minister of Trade and Commerce (Mr. Winters) say in the house a few days ago that there was to be a great upsurge in capital investment this year. This we were glad to hear. But we find there has been no great curtailment in public spending. The hon. member for Gaspe (Mr. Keays) mentioned this in the course of his remarks. It seems to me to be a matter of ordinary common sense that in a period when private enterprise is willing to increase its investment by the almost astronomical figure of 13 or 14 per cent over last year the government should of necessity curtail some of its expenditures, particularly along certain lines. What are those certain lines? I submit, Mr. Speaker, that in the important matter of credit certain steps must be taken. I happen to be one of those who went through the depression of the 1930's and I submit that looking back on those days one realizes that certain situations could have been pretty well cured had a supply of credit been available to business.
Therefore I submit that a sufficient supply of credit is one important way to meet difficult situations. In this day and age when inflation is at least considered I believe credit should be available for certain things. One is the expansion of business. My hon. friend from Northumberland in the course of his remarks said that business should be encouraged to expand. I do not think that every business should be encouraged to expand in times like these when the government-and I give them full marks in this respect-is attempting to deal with a difficult situation. Since I do not believe that every business should expand I think it is proper for me to name those that I think should expand. In this category I place first those businesses which are producing goods for export, because we have a balance of payments problem. I think we should also encourage those industries producing goods which we are importing at the present time. In my opinion these two things go pretty well together.
I think there should also be some selectivity of regions. We in the Atlantic provinces happen to be in one region of Canada where incomes are below the national average. I do not overemphasize this but it is the situation in our part of the country and it is one that

Canada as a whole has to deal with. Therefore, Mr. Speaker, I submit for the consideration of the government, and especially for the Minister of Labour (Mr. Nicholson) who is in his seat, that some way should be decided upon whereby the government, faced with the special situation which exists in the Atlantic provinces, will not deal with this situation in the same way as it deals with a region of Canada where there is tremendous overactivity.
I cannot give the house any great words of wisdom in this connection, but I would refer to the so-called castor oil treatment, as it was called, and for the information of the minister I would say that I knew something about the castor oil treatment statement. In 1956 I was in a position of some public responsibility and it came to my attention that people in New Brunswick with raw materials at their disposal, with plant and personnel available and with markets for their finished products, were unable to go ahead because of the tight money policy of the then Liberal government. I was informed that the amount of money in circulation had been reduced substantially by the action of the Bank of Canada. I was told that the reason for this was inflation in the central provinces of Canada. I said, "Perhaps there is inflation in the central provinces of Canada but there is no inflation down here in the Atlantic provinces, so this sort of thing will not do."
At that time I said it would be just as ridiculous to have a uniform policy of credit availability for all ten provinces of Canada regardless of general economic conditions as it would be for a mother of ten children to give them all castor oil regardless of their individual needs. I believe the same principle applies today. Therefore I ask the minister through you, Mr. Speaker, to take this message to his colleagues in an attempt to exert moral suasion over them in order that a special program may be made available for the people of the Atlantic provinces, one of which is the minister's native province.
In this respect we find history repeating itself. Ten years later we have another Liberal government applying the same treatment to a simiar situation. So I say there should be a more liberal-with a small "1"-policy applied to the Atlantic provinces than is applied to the provinces of central and western Canada. In this connection I should like to read from the last Newsletter issued by the Atlantic Provinces Economic Council in which they speak about the question of a
May 17, 1966

special situation. It seems to me this bears repeating and placing on Hansard. The article was published in March, 1966, and says:
The general conclusion appears to be that in the Atlantic provinces, where the problem is greatest, the program has been less successful than in the rest of Canada during its initial period.
They are talking about the designated area program, but their words apply in general terms to the whole economic situation. The article goes on to say:
It is designed to meet the general Canadian problem of low income and high unemployment in small areas in an environment of high income and employment. Since the problem in the Atlantic provinces is quite different, there would appear to be no reason to anticipate that this situation will change significantly.
Then they go on to say:
In a country as large and diverse as Canada it is quite unrealistic to adhere to a rigid formula devised on broad national considerations which fail to recognize regional differences. The concern should not be with the application of a formula but with the social and economic development of a nation. There should be no great obstacles to the introduction of sufficient flexibility to permit the designation of the whole Atlantic region in the interest of its development and of Canada's.
I am not particularly arguing the latter point at the moment; I am making the point that there is this difference and I believe it should be treated as a situation different from that which exists in other parts of Canada to which these remedial measures, in so far as the danger of inflation is concerned, are being applied. I should also like to read from this document marked Exhibit B what was said at the first conference of the Atlantic provinces:
Through its monetary and fiscal policies the federal government has wide powers to control the level of economic activity in the cquntry as a whole. In the last decade, however, there have been many occasions when policies which were sound for the national economy were not suitable for the economic situation in this region. For example, a policy of high interest rates may be called for to check inflation when the economy, considered as a whole, is fully employed. But the effect of high interest rates on the Atlantic region, when resources are not fully employed, may be most adverse.
[DOT] (4:20 p.m.)
That is the message I should like to give through you, Mr. Speaker, to the Minister of Labour, and I am sure he will give it every consideration. I return to the question of selectivity of industry. Under this heading I ask the same question which I asked before and have already answered, namely, what type of industry should be encouraged? The answer is industry which exports and industry which provides goods we now import. We
Tight Money Policy
should also pay some attention to the development of natural resources, something in which we in Canada have a natural advantage.
I am connected with a business which exports practically its whole production and always has. I also know similar types of businesses which do this. There are many other businesses of like nature which could expand but they cannot do so without credit. So again this is my basic reason for bringing to the attention of the house the fact that it is not only difficult but is not a good thing to have a fixed, rigid principle in these matters.
I am one who believes in long term loans, and by "long term" I mean 10, 12 or 15 years. There are many businesses which could expand and purchase more machinery. We must acknowledge the fact that today we are living in an age of automation. Machinery is expensive and cannot always be manufactured in Canada. Even the tooling expense is very great. If only ten machines of a certain type are made and a great tooling expense is involved, the cost becomes prohibitive. So these machines sometimes have to be brought in from the United States or some other country.
The point I am making is that to increase productivity we should buy more machinery. If people are able to borrow money over a 10, 12 or 15 year period and make repayments which are constant so they know exactly the cost per month of that machinery and equipment, then it seems to me that this is a policy which should be encouraged by the government or by any government with responsibilities to its people.
It has been said that it is incredible that industry should slow down at a time of good demand for our products in world markets. Would anyone disagree with that proposition? That is what the hon. member for Northumberland said yesterday and I am sure no one would disagree. It is incredible that industry should slow down.
The hon. member also said that sales are being lost because our prices are not competitive. I do not propose to embark upon a dissertation on the question why our products are not competitive. In many respects I think they are competitive. I think our exports are deserving, and I am sure that the minister, with his great experience in business, realizes that generally speaking we are quite competitive. So far as our steelworkers are concerned, I think they are second to none.

May 17. 1966
Tight Money Policy
I think that very often production or productivity and expansion of industry are curtailed-this is particularly so at the present time-due to the fact that people are unable to get credit and spread their repayments over a period of time. Do not the figures showing the reduction in exports prove my point? If I go back to 1965, our exports increased by a very small percentage, certainly not nearly as much as they should have increased had other methods been adopted.
It has been said that the present existing, strong inflationary pressure is caused by a shortage of goods. This brings me to the question of how we deal with inflation. Do we apply a negative policy of restricting credit or a positive policy of producing more goods? I think these are the questions which the government must answer, and they have chosen to answer them in the negative. The government have chosen to say that it is better to curtail credit. By the policy they are apparently supporting they have chosen to say it is better to reduce the amount of money available for goods than to make money available for production of more goods. That is where the matter stands at the present time, Mr. Speaker.
It has been said that we need financial incentive to increase productivity. I am one of those who believe in this doctrine. I believe that financial incentive to increase productivity is one of the ways in which industry in general and the people connected with industry can stimulate production. This goes right down to the worker himself. People with financial incentive and a production bonus are those whose business today is going full blast; they are the people working overtime. This involves reward for effort made and interest taken, and I submit that the government have the means available to do something along this line.
It has been said that the gross national product was nearly double the increase in exports last year. It has also been said that mortgage money should be provided for the average home, not for the expensive luxury home, not for the apartment house, but for the average home. I am sure we all recognize that what really builds a country are the citizens of the country who own their own homes. These citizens immediately acquire an interest in their homes and they have a stake in their country. They take great pride and care in their homes because they are theirs.

I have no reason to believe that our homebuilding policy will change. However, I submit to the minister for his consideration that if the choice lies between a big office building or apartment house and 25 or 30 small houses he should decide in favour of the small houses.
Another factor to bear in mind is that homes are very important to the expansion of industry. Expansion of industry calls for increased personnel possessed of technical knowledge and skills. The first thing these people look for in a given locality are homes to live in. I know certain areas where such homes are not available. These people require housing and schools for their children and if they are not available they will decide to go elsewhere.
It has been said-the hon. member for Northumberland made this point too-that insurance companies should invest in small towns in rural areas. I believe that is true, but the experience we have had in trying to persuade large companies to invest in this way has not been encouraging. I submit that especially in the Atlantic provinces such investment should be made.
It has also been said that the government should earmark funds for the particular purpose of providing loans. In this connection I am certain that the Minister of Finance (Mr. Sharp) would tell us that the Industrial Development Bank is available for this purpose. The Industrial Development Bank is available for the purpose, but unfortunately I do not think the Industrial Development Bank is carrying out the function for which it was established. The function for which it was established was to make term loans and provide loans Ordinary banks were not able to furnish under their charters. I believe that is the reason for having the Industrial Development Bank. However, today we find that the Industrial Development Bank is not easy to deal with. In fact, it has become a money making machine. Let me say that I am one who believes in profits. Profits make a business go. Profits make good times not bad times. I believe, however, that the Industrial Development Bank should be a little more lenient in its approach than are the chartered banks because it is allowed to be more lenient by the terms of reference that set it up.
[DOT] (4:30 p.m.)
I think it might be interesting if I were to read what has been said about the Industrial Development Bank and what it should be
May 17, 19G6

doing. I will do so, Mr. Speaker. I read from the Newsletter of March, 1966:
The bank, when considering an application for a loan, must be satisfied that the proposed project Is reasonable and sound, the management efficient, and the plan capable of carrying the additional financial burden.
No one will quarrel with that. I continue:
The money obtained through the bank may be used to purchase land and buildings, alter or enlarge existing buildings, construct new buildings, or to purchase machinery and equipment.
I think that is true. Unfortunately, it does not work out in practice. I am wondering how much the present tight money policy has to do with the attitude of the people who are administering the affairs of the Industrial Development Bank. The deputy minister of trade and commerce is, I believe a member of the board. If the Minister of Trade and Commerce were here I would ask him to carry a message to his deputy who is a director. Instead, I ask the Minister of Labour to carry my message to the director. It is: Is it not possible to be more lenient especially toward the Atlantic provinces which need the financing?
I continue reading:
The Bank does not provide funds to finance inventories or receivables, but it may in a few carefully considered circumstances-
That does not make any difference because it is a function of the chartered banks, as the hon. member for Carleton (Mr. Bell) knows.
-extend a loan to assist working capital requirements. In instances where a business may benefit from a change of ownership, the bank may consider a loan to help finance this necessary transfer.
We hear a lot of talk about United States ownership of our businesses. I am not scared of that. If somebody comes along, invests his money in Canada and is willing to comply with our laws, then he has made a contribution to the general well-being of this country. I am not a bit alarmed about that sort of thing. As a matter of fact, I know of many businesses which would not be in existence today had it not been for the financing they were able to secure in the United States.
I do not for a moment go along with those gentlemen who express fear because some people outside this country have a stake in businesses inside this country. Such people are subject to Canadian laws just as citizens of this country are. Where could we get the money to develop the country, because we have an undeveloped country, if it were not from the United States of America? I have
Tight Money Policy
seen figures as to the amount which would be required to purchase the interest now held by people in the United States. They are astronomical and so large that I could hardly quote them. It is beyond our ability to have that much money.
I now return to my subject, from which I digressed. The Newsletter continues:
Although the purposes for which the Bank may allow funds are numerous, primarily IDB is interested in the groundwork financing of a "soundly conceived new business".
I submit that a soundly conceived new business is not very much different from the expansion of an existing business. Both are going to employ more Canadians. Both are going to export and assist in helping with the general balance of payments problem.
In connection with loans I would submit that the Atlantic provinces are fertile ground for loans. As I understand it, 35 applications for loans connected with projects in the Atlantic provinces have been received, compared with 68 from the rest of Canada. On page 2 of the Newsletter there is the following:
This means that there has been about one application to every 12,600 members of the labour force in designated areas in the Atlantic provinces and one to every 8,500 in designated areas in the rest of Canada. These applications represent an investment of $35 million in the Atlantic provinces and of $101.25 million in the rest of Canada.
It should be the reverse. I do not wish to weary the house by reiterating all those things I have tried to point out to the best of my ability. I only want to summarize briefly what I have tried to say. I think the government is making a grave mistake if it tries to have a fixed and uniform credit policy applying to all parts of our great country. Conditions across the country from place to place are so very different that this would be an impractical policy.
I return now to the question before the house, our regret that the government has imposed a tight money policy. I should be interested in hearing the minister's explanation for the imposition of tight money. I should also be interested in knowing what he wishes to do with respect to mortgage funds for home owners.
I have been quite disappointed in some of the speeches which have been made in the last two days. But I repeat that this is one debate at least for which we should not apologize. Nothing could be more important than the discussion of the availability of money in Canada at the present time. Getting

May 17, 1966
Tight Money Policy
the views of all hon. members on this question is of vital importance to the nation and of interest to the government.
Therefore I say to the government that it will not be successful by having a uniformly inflexible fiscal policy for this country. I feel it should introduce some degree of flexibility with respect to credit, and when I say that I have the Atlantic provinces in mind. I also believe that businesses in general should not all be treated in the same way, that there should be diversity of enterprise, that perhaps one business ought to be encouraged at the moment and another perhaps not encouraged to the same extent.
This is the sort of message I have tried to get across. These are the sorts of things which I think deserve the consideration of the government. I appeal to the government to take some notice of the representations which have been made.
[DOT] (4:40 p.m.)


David Réal Caouette: Mr. Speaker, we have before us a very serious amendment concerning the credit restrictions imposed on home builders and home buyers.
During the 1965 election campaign, I warned the people in Quebec and Canadians in general, against the credit restrictions that the government would impose on us once the campaign was over.
Since November 8, 1965, we have seen credit restrictions being imposed in the United States, urging American investors to stop or decrease their investments. In the past few months, the Minister of Finance has been telling us that the various branches of his department have to submit to credit restrictions for a certain time in many fields, and more especially in the home building field.
There is a strong tendency to slow down home building through measures as drastic and extravagant as those advocated by the government at present.
Between 1964 and 1965, there was a marked improvement in the construction field. However, this improvement has failed to meet the constant demand for housing units in our country.
Even though the demand was greater than the financial situation allowed at the time, now in 1966, a slowdown is called for in the construction field.
Mr. Speaker, I entirely disagree with the member for St. Ann (Mr. Loiselle) who said

that the C.M.H.C. has not imposed any credit restriction nor reduced the opportunities for building.
Now I think I am appealing to people who know a little more than the hon. member for St. Ann about housing construction in Canada, especially in the Ottawa-Hull area.
I have here a copy of a letter sent on April 26, 1966, to the right hon. Prime Minister (Mr. Pearson) and to the leaders of the various political parties in the house by Mr. John Hilson, president of the Building and Construction Trades Council of Hull-Ottawa and District. Here is what Mr. Hilson wrote to the Prime Minister of Canada on behalf of local builders:

Dear Sir:
Faced with the most serious unemployment in the construction trades that Ottawa has experienced for many years, I am appealing to you on behalf of the Ottawa Building Trades Council to take whatever steps are possible to substitute a program of planning for employment in place of the present situation in which we are facing planned unemployment.
At the end of March we appealed to the government to reverse its cut-back on its construction program for the Ottawa area. At that time the government had announced a cut-back of one-third of its estimates for construction in the current year for this area. The cut-back for the Ottawa area was one and a half times the total cut-back for the rest of Ontario.
We were greatly concerned at that time by the fact that of a work force of approximately 8,000 persons in the construction industry in the Ottawa area, some 1,700 were out of work representing an unemployment rate of over 20 per cent. With regard to the prospect of a seasonal improvement, we were very much discouraged by the fact that building permits issued had dropped from $25,000,000 for the first quarter of last year to $10,500,000 for the first quarter of this year.
A letter from Hon. G. J. Mcllraith made light of our concern and predicted a "general pick-up in the spring". Instead of a pick-up there has been a steady worsening in the employment situation as projects have been completed and no new projects are available to provide further employment for the workers laid off.
The Hon. G. J. Mcllraith referred to the excellent employment situation that existed during the past winter and it would appear that his optimism is based on past events rather than assessment of what is happening now and what can be expected in the future.
One of our affiliated unions which handles 90 per cent of the total structural steel erection for this area reports over 30 per cent of its members are unable to obtain employment in the Ottawa area. If the steel is not going up now, there will be further worsening of the employment opportunities for other trades in the immediate future. Other construction unions report high and worsening unemployment. Figures on unemployment among our affiliates run as high as 40 per cent, with workers leaving the area because of the poor prospeets.
May 17, 1966

The letter continues:
Since we made our previous protest, the predicted spring pick-up has failed to materialize and the construction industry is faced with further difficulties as a result of tight money. While we do have occasional conflicts of interest with our employers in the construction industry, we naturally share with them concern as to the future of our industry in this area. We sympathize with them in the difficulties and bankruptcies which are inevitable unless some positive action is taken.
[DOT] (4:50 p.m.)

Mr. Speaker, it seems to me that those people have the experience necessary to call the government's attention to the harmful effects which result from the application of a restrictive monetary policy.
I am wondering at this stage how it is that a government such as ours, a Minister of Finance such as ours, can find the financial means needed to make interest-free loans to foreign countries and, at the same time, with the utmost seriousness, impose credit restrictions on our own people, on those who are ready and willing to develop our country and their respective provinces.
In addition to that letter from The Building and Construction Trades Council, I have here a letter from the provincial Association of Building Contractors of Quebec, from the town of Mount Royal, to the effect that the president of that association supports the Henry report on housing.
Mr. Fernand Boisse, of Sherbrooke, president of that association says:
The report prepared by Mr. Robert Henry, editor in chief of Bdtiment, for the Association of Building Contractors of Montreal, Includes all the problems which the housing industry must face in Quebec.
Mr. Speaker, the president of that association of building contractors must certainly know as much about that matter as the hon. member for St. Ann who tells us that there is no restriction.
We know that in all our ridings the C.M.H.C. is subject to restrictions ordered by the government, which hamper the building of houses.
Are they trying to prevent the construction of houses because people are well accommodated in our cities or urban areas? Are they not rather preventing the construction of such houses because there is a shortage of funds, in other words, a shortage of credit?
And when there is a shortage of credit, Mr. Speaker, one never hears a minister blame that monetary policy.
Tight Money Policy
I heard the hon. member for Victoria-Carleton (Mr. Flemming) former premier of New Brunswick, tell us: If we cannot borrow from the United States, what will we do? The United States are there to supply us with the funds needed to keep up our construction or development.
Mr. Speaker, the ministers, the government, even each federal member should consider this very important question: How is it that the United States are able to loan money to every country in the world and, at the same time, not borrow from any of them? No one is asking himself that question. Where is the money that the United States can supply to the whole world coming from? Loans to Viet Nam, loans to Russia, loans to Canada, loans to any country in the world. And the United States never borrow a nickel or penny from any country whatsoever. Who is making the credit of the United States?
Does credit grow on trees in the United States more than in Canada?
I stress that point, Mr. Speaker. When we have here, in Canada, the necessary brains, good will, materials and physical possibilities to build houses so as to lodge our people adequately, why do we have, to ask the United States permission to build housing units or develop our natural resources?
Why do we not put our financial system in order, instead of always suggesting to the people to tighten their belt, and putting our builders on the brink of bankruptcy with tight money policies? Why do we always have to ask permission from the United States? Who makes credit in the United States? Where do they get the credit or the money they need to lend billions of dollars to Canada?
Were the United States concerned about knowing whether there was not enough money to develop Ungava, in Quebec? Were the United States short of credit to buy the oil production of Alberta and the western provinces? No indeed. The United States monetary problem is settled on the spot. Why? Because the magnates, those in control, live there, and they are the ones who give orders to countries like ours.
And people talk about parliament's supreme authority, Canada's sovereignty, Canada's independence.
In the field of housing, Mr. Speaker, do we need the United States' permission to build small houses? Do we need the United States' permission to clear away the slums in the

May 17, 1966
Tight Money Policy
city of Montreal, for instance? And we know how many slums there are, not only in the city of Montreal, but in every city. We see slums in all cities, all towns and villages, in the country all over Canada. Are we short of materials, as I said a moment ago, to replace these slums by sound houses? No. We have everything except credit. And because we do not have credit, the building of houses is restricted. That is why this tight money policy is inadmissible.
That is why, Mr. Speaker, I consider well-advised the amendment moved yesterday by the opposition to the effect that the policies of the government, in imposing tight money and denying builders and prospective home owners needed mortgage funds, constitute a negative approach to the problems facing our economy and are seriously impeding the development of the nation. It is admitted that these tight money policies seriously impede the development of our country.
I go on quoting the letter of the Quebec province Association of Building Contractors.
Mr. Boisse says:
It will be recalled that during the recent construction strike in Montreal, a brief had been prepared and released to the press as well as to the highest provincial and federal authorities. The brief, entitled "Survey of the residential industry and the causes threatening its immediate disappearance" contains a full statement, based on statistics, of the causes of deterioration of an industry essential to the public: housing.
[DOT] (5:00 p.m.)
Mr. Fernand Boisse, who has long been striving to secure for the housing industry the right to negotiate labour agreements with the unions, adds: The day is past when the builders kept mum, leaving the industry at the mercy of the government's lack of interest. Everyone, the ministers first of all, must now realize once and for all that the housing industry is not an economic endeavour like the others and that vague slum clearance projects will not solve the No. 1 problem of Quebec families: to own their homes and to be adequaiely housed at reasonable prices. Slum clearance is not enough, says Mr. Boisse, but new ones must be prevented from developing. Only through direct association between private industry-that is the builders-and the General Housing Corporation can the government adequately solve problems that are not only administrative, but also technical and human problems.
The Henry Report, adds Mr. Boisse, perfectly represents the position of our industry: On the brink. It also indicates that the builders are not alone on the brink: any threat to the housing industry involves the people's right to own their homes and to be adequately housed.
Mr. Fernand Boisse adds: "We have asked again and again that a builders union be authorized under which would permit to select of builders, clean up the market, progress and serve the public
[Mr. Caouette.l
better. The provincial government has only to append its signature. But it is essential for the public. Our request is sensible:	electricians,
plumbers, real estate operators all have unions. Why is the builder, who hires such plumbers and electricians and has the responsibility for those houses and apartments, why should he not be entitled to a union?
This is obviously under provincial jurisdiction.
Home builders and the public, adds Mr. Boisse, will no longer be satisfied with promises, still less with silence.
The provincial Association of Building Contractors of Quebec comprises nine local associations covering the whole province, namely Montreal, Quebec, Sherbrooke, Hull, Bois-Francs, Saguenay, Lake St. John, Joliette, Drummondville, Thetford Mines and almost all residential housing.
Here is a testimonial to the fact that credit restrictions are unacceptable in a country where everything remains to be done, in a country where tens of thousands of homes are lacking to house our people properly. And contractors from the Ottawa area, Mineault Desnoyers Construction, write to us along the same lines:
Mr. Desnoyers says:
The home building industry in the Hull area is deeply hurt by the credit restrictions of the Central Mortgage and Housing Corporation and the lending companies.
A member of the government has just said that C.M.H.C. does not impose any restrictions. It is obvious that the housing construction industry is now in utter chaos. In his letter, Mr. Desnoyers continues:
The majority of the housing projects in the area are financed by C.M.H.C. Because of the small number of loan companies that grant direct loans in our region, the C.M.H.C. remains the main source of mortgage loans.
When the buyer of a house asks the C.M.H.C. to finance him, the Minister of Finance (Mr. Sharp) tells him to go to private enterprise, insurance companies, those that lend money outside C.M.H.C. Why then was it created? Why was it instituted? To serve the people or to annoy them?
Yesterday, my colleague for Lapointe (Mr. Gregoire) said, and rightly so, that the present government drains individual and company earnings into the purchase of government bonds, and the government endeavours to finance individuals and private companies. It is not up to the government to do that. Its duty is to see that the public in general is treated fairly and reasonably. C.M.H.C. was created precisely to facilitate the removal of slums in Canada and the
May 17, 1966

building of dwellings to house our Canadian families. And Mr. Desnoyers pursues:
These measures put us, the builders, in a desperate situation where huge amounts have already been committed through the purchase of land or other agreements.
This causes losses and considerable increase in the cost of operations. The housing construction market will be flooded with requests for mortgage loans and applicants will be refused the required funds. We maintain that the present restrictions are inflationary and that they beneflt profiteers who give conventional loans at usurious and prohibitive rates of interest.
To conclude, we protest energetically against that policy which we consider to be discriminatory to one particular industry which gives employment to thousands of workers.
In this case, Hull is concerned in particular, but we know the problem exists everywhere.
In my own area, I have asked time and time again the C.M.H.C. to open an office in Rouyn-Noranda. Those two cities have a total population of 35,000 inhabitants. It is an area inhabited by more than 150,000 people and the C.M.H.C. does not give us any answer. The government does not take a stand.
According to reports made on television, Abitibi would be an underdeveloped area where there are slums. There are no more than in the city of Montreal. But the problem is not solved. We need the help of the C.M.H.C. We do not want the corporation to own those houses, but we want it to help private enterprise make possible adequate and low cost housing, for our Canadian families.
And Mr. Desnoyers says in his letter:
In closing, we strongly protest against this policy we think unfair for a particular sector of industry that provides employment for thousands of workers. In view of those facts, we demand that measures be taken immediately to free the direct loan market and that private companies be forced to put up the required funds for loans guaranteed by C.M.H.C. We support any other measure that will contribute to rectify this systematic freezing of funds to the detriment of our industry and our people. Remedial action is needed immediately and any delay can only make the situation increasingly serious.
Desnoyers Construction Ltee.
And it is signed: Charles Desnoyers, President.
I cautioned the Canadian people against credit restrictions in November 1965. Now, those people did not believe in credit restrictions. As a matter of fact, the government loudly stated that credit would never be restricted. They even said then, as Jean Lesage now claims, that I was a witch-hunter. The sorcerers and the witches are in the
Tight Money Policy
government now, and it is true that we are going to hunt away as much as we can, because we cannot admit credit restrictions in a country where everything remains to be done, where everything has to be built.
We have a Canadian people that is capable, determined to develop what has to be developed in this country and credit restrictions laid down by the federal government are going to slow down the progress of business in Canada.
[DOT] (5:10 p.m.)
The government should be the first to object to that restrictive policy which is preposterous. And yet the same government is so open-handed with the funds it gives to foreigners. Was there any discussion at all on the grant of $1,625,000 to Jamaica for the construction of a sewer system, for the construction of a bridge, for the construction of a highway in the region? That 60-year loan to Jamaica was interest-free.
The government quite readily makes interest-free loans to foreigners, but it makes interest-bearing loans through C.M.H.C. to house Canadians. Then the government says it is impossible to do otherwise and that, in these times, we must tighten our belts and accept sacrifice. Have the Canadian people not made enough sacrifices in the past to serve the magnates of finance and the Canadian and American bankers who control the economic blood of the nation? Open-handedness or liberalities for foreigners; restrictions for Canadians.
Mr. Speaker, I wish to repeat that I see no objection to our assisting underdeveloped countries such as Jamaica, Tobago or Commonwealth countries located in the Caribbean. I agree that we should help them, but let us at least help our own citizens. How can we help others, if we are not able to help our own people?
All slums are not done away with. What happens now, with the restrictions on credit? We create poverty. The government gives the restrictions its blessing and, instead of fighting poverty, it now fights the poor.
It is nobody's secret that when we go through lower Montreal, we can meet people earning less than $2,400 per annum, workers who live in slums, and I would even say, in dog houses. Mr. Speaker, we allow people to live in such houses. Canadian mothers, fathers and children presently live in dreadful conditions in the very city of Montreal, the

May 17, 1966
Tight Money Policy
metropolis of Canada, the second Frenchspeaking city in the world. Slum areas still exist, not only in Montreal but in Toronto.
I was in Brockville yesterday and I saw slums there. They are everywhere, in spite of our having the means and the power to make them disappear and provide adequate housing for our people; but credit restrictions are allowed, ostensibly to fight inflation while actually the contrary is true.
Credit restrictions will raise interest rates. When interest rates rise of course houses cost more. The government runs true to form after levying the 11 per cent sales tax on building materials. On the one hand, the government generously grants a $500 bonus for winter-built houses then it turns around and slaps a sales tax on building materials which raises by $1,000 the cost of a $13,000 to $14,000 house.
The government thinks it is generous to the Canadian people. Why always crush those who are building up the country? Are we here to crush the Canadian people or to serve them? We are here to serve the people; let us then serve them instead of kotowing to the big financial interests. Then perhaps we will have found an acceptable solution.
The other day, I heard the hon. member for Montmagny-L'Islet (Mr. Berger) repeat his charges whereby we, the creditistes, are always concerned with one and the same thing: money. What about the government? It is always concerned with the same thing. What is credit restriction? Instead of issuing money when the economy is buoyant, when Canadian production can reach a new high the money is restricted to punish the Canadian people. Well, the Canadian people, the population of the province of Quebec, will not put up very long with this policy of restriction.
Mr. Speaker, we have had our fill of these far-fetched solutions which always mean that finance must be protected and that the Canadian people must foot the bill. I think that the classes of Canadian society have suffered enough in the past from this belttightening policy, which allows poverty to exist in the midst of plenty.
Mr. Speaker, I conclude my remarks by saying that what Canada needs at present is a policy of credit expansion according to our possibilities. And I repeat now that the point is not at all to issue money or credit without any consideration, but to develop the country,

build houses and develop our natural resources according to our physical possibilities and our capacity.
In a few days, we will consider the estimates of the Department of Trade and Commerce. The minister knows the facts because he is aware of our great possibilities, not only in the province of Quebec but all over Canada.
We should consider these physical possibilities and adjust our financial system accordingly. I am convinced that we would then serve the best interests of the Canadian nation as a whole.
1English1


John Robert (Jack) Nicholson: Mr. Speaker, I must confess that when I listened yesterday to the remarks of the hon. member for Northumberland (Mr. Hees) which preceded his amendment I felt somewhat like the hon. member for Nanaimo-Cowiehan-The Islands (Mr. Cameron) in that I found great difficulty in deciding just where the hon. member was heading. His remarks were interesting, but I wondered about their direction.
Yesterday there happened to be an observer in the house-not a member I might add

who supplied the answer to my question about the hon. member's remarks. This morning he was thoughtful enough to draw my attention to an address that was prepared and delivered by the hon. member for Northumberland in Lindsay, Ontario, on May 13 to the Ontario Municipal Association. I myself address municipal organizations on occasion because I find they provide a good forum for political speeches. Rather, it was because of the fact that the hon. member's speech was a political speech delivered to a political association that I found myself in the same difficulty as the hon. member for Nanaimo-Cowichan-The Islands, because the unconnected political speech preceded the motion.
If you compare that speech with the speech delivered by the hon. member in the house yesterday, you will find that the last five and a half pages are much the same as the last four columns of the hon. member's remarks as they appear in Hansard for yesterday. There was one difference. The hon. member was speaking in generalities. He spoke about tight money in generalities, he spoke about immigration, high-rise apartments, luxury suites and other things in generalities, but he never did mention any facts or figures to support these general statements.
May 17, 1966

The hon. member did make some statements about immigration. In that lies the one difference. He said employment had been increasing steadily for the past five years in Canada and that we should have opened the doors to more immigrants. I agree entirely that we need more immigrants and that we should open our doors and welcome them. I am proud to say that I played some part in doing just that, opening and holding open the doors. The figures on immigration for the last nine years will reflect what I have said.
In the year 1958, the first full year in which the official opposition was in power, the total number of immigrants admitted to Canada was 124,851. In 1959 that number dropped to 106,928. In 1960 it dropped still further to 104,111. In 1961 the figure dropped to 71,689. In 1962 the figure was slightly higher but still only 74,586. In 1963, the first year in which this government took office and we were in office for only two-thirds of that year, immigration jumped from 74,000 in 1962 to 93,151 in 1963, to 112,606 in 1964 and to 146,758 in the year in which I happened to be the minister. That is more than double what it was for the last two years when the hon. member for Northumberland was a member of the former government.
I am happy to say that the indications are that as a result of the change in immigration policy which has taken place over the last two years there will be a still higher figure, with an additional 20,000 to 30,000 immigrants coming into Canada in 1966, many of them with skills and others with strong backs and aptitudes which will make them desirable citizens of this country.
I said I found it difficult to follow the remarks of the hon. member, but I also felt that his remarks on immigration should not go unchallenged. In the light of the remarks not only of the proposer of the motion but in light of the tenor of the remarks of other speakers during the course of the last day and a half, it might be appropriate and perhaps helpful at this time if I spoke briefly about some of the facets of our housing situation.
Most of the speakers have been prone to ignore and forget the real facts of this troublesome period in our housing history. It is my sincere hope that a frank expression of a few thoughts on a matter of such national economic and social significance may assist us to have a better over-all view of the picture. It is, of course, no secret that all of us in this house have been the recipients of, I would
Tight Money Policy
say, a massive aggregate number of telegrams, letters and other communications from organizations and individuals. The hon. member for Villeneuve (Mr. Caouette) has just read two or three of them. We have received this correspondence during recent weeks. The main purpose of all this correspondence is to ensure that the cabinet and other members of parliament are fully cognizant of the difficulties being encountered in obtaining adequate mortgage financing for the year 1966 in respect of residential construction.
[DOT] (5:20 p.m.)
It is quite likely that this correspondence accounts largely for the motion we are now debating. But another purpose of the correspondence is undoubtedly to prod the government into finding a solution for this problem, trying to put it on the shoulders of the government. I am very sorry that the hon. member for Northumberland and the hon. member for Victoria-Carleton (Mr. Flemming) are not here because they have both come forward as friends of free enterprise. In fact, we heard the hon. member for Victoria-Carleton bragging about it this afternoon. There is no reason why he should apologize for being a great believer in free enterprise; I happen to be one myself. But I ask hon. members to keep in mind constantly that what has happened has been brought about by the free action of the private lending institutions in this country and is a direct result of the great prosperity, the boom in which we now find ourselves.
On this point I should like to make two or three very brief comments. I am prompted to do so by some of the remarks the hon. member for Villeneuve made just a few moments ago. He referred to letters that had been sent and had been unanswered. I should like to assure the house that I have probably received more letters on the subject of housing than any other member of the house, and there is not a single letter on housing that has come into my office up to 48 hours ago that has not been answered and answered promptly.


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: The suggestion that Central Mortgage and Housing Corporation or the government are trying to refrain from or are afraid of answering questions is just not in accordance with the facts, and my files show it. In this connection, it might be well if I read a letter to which I sent to the president

May 17. 1966
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of the National House Builders Association, Mr. Gelinas, whose name has been mentioned more than once in the debate this afternoon. Mr. Gelinas is a friend of mine. I thanked him for his telegram of May 9 and went on to say:
In my recent statement in the House of Commons I stated that the government would continue to take every step necessary to ensure a program of direct mortgage loans by Central Mortgage and Housing Corporation at the same level as that of last year when, including the fall program, loans for approximately 31.500 units were approved. I would hope that this announcement will assure the builders that there will be no contraction in the corporation's direct lending program this year.
The corporation will again make loans available for the autumn and winter building period, and expects to begin accepting applications for this aspect of the program in August.
I will have something to say on the significance of that date later. My letter continues:
The assurance that funds will be available to the same extent as last year will also enable the corporation to meet the most urgent needs arising in the early summer, particularly in the resource development areas and certain other areas where the rapid expansion of industry has caused special problems.
Here again I would pause to draw this to the attention of the hon. member for Vic-toria-Carleton and others who spoke on this subject and commented on the need and importance of making provision in these special areas. The letter continues:
I know you are aware that the direct lending program of Central Mortgage and Housing Corporation cannot meet all of the demands arising from a buoyant market, and builders may not be able to obtain all the direct loans they desire. Nevertheless the corporation will do everything possible to meet the most urgent housing needs with the funds available.
The government has recognized for the past several months that Canada was approaching a period of restricted mortgage financing for new house construction. Indeed, as far back as the summer of 1965 we were aware of what might happen, as was everybody else who knew the facts, including the members of the National House Builders Association. Bulletins were sent out by Central Mortgage and Housing Corporation drawing their attention to the situation, drawing their attention to what might normally happen in the last three months of last year and the first three or six months of this year. I would point out in this connection that while the housing figures are rather interesting there has not been the catastrophic state of affairs that some people would

have you believe and as many of the messages which have been sent to members of this house would indicate.
In 1958 we had a good year in housebuilding; 146,686 houses were completed. But by
1961	that number had dropped to 115,608. In
1962	it was slightly higher, 126,682. In 1963 it was 128,191, and in 1964 the figure had jumped to roughly 151,000 houses, a record year. The year 1965 was another record year, 153,037 houses having been completed. Hon. members were led to believe that we were going to fall woefully short of what was done last year and I immediately rose to challenge that, because a simple statement of the facts will show how false it is.
In the biggest year we ever had in housing in this country we completed 153,037 homes. That was last year. In January of this year, due to the accent that had been placed on winter home building and to the switch in financial arrangements, we had 120,000 houses actually under construction, and Central Mortgage and Housing Corporation provided in the first month of this year funds for another 15,000 houses. This makes a total of 135,000 already as against 153,000 in the best year we ever had.
In addition, realizing that because of the play of economics and of supply and demand the private, traditional lenders were making funds available for the building of office buildings and for industry and that for other people interested in mortgage money these funds were not being made available, the government announced, so that housebuilders could plan intelligently, that we would make funds available for direct lending for another 16,500 houses. So you have a total of 151,500 houses in 1965 without any more money from the private lenders, and do hon. members think for one moment that with the principles enunciated in the budget there is not in the next few weeks going to be some additional private money made available for housebuilding?
[DOT] (5:30 p.m.)
I mentioned in my remarks on the budget that firms which are building pulp and paper mills and other great industrial plants in the country realize that substantial savings will be made due to the fact that no sales tax will be payable on machinery and equipment in 1968 and that a substantial reduction will be made in 1967. I am glad the hon. member for Victoria-Carleton has returned to the house because I want to say that I agree with his
May 17, 1966

remarks that we should not in this day and age curtail investment in industries which are expanding to take care not only of our export needs but our essential needs at home, but particularly our needs in the export field. The hon. member stressed the desirability of balancing our payments with other nations. I agree with him.
I should like to point out, however, to the hon. gentleman that he, having served with distinction as Canada's first minister of forestry, will be very conscious of the fact that in 1963 a survey was made of world requirements for forest products. We know that by 1975 there will be an increased demand over 1963 of approximately 50 per cent. We also know-figures are available in the library and in the Department of Forestry to show this -that this great pent-up demand will not manifest itself at the present time but will appear in about 1973 and 1974. Therefore, why should we build industrial plants now which can be built in 1968, 1969 and 1970 in good time to take care of this demand? It is really a question of priorities. As soon as this is realized by industry and the financial people I am sure we will find there is more money available for housing and other developments in the country.
Another interesting suggestion made by the hon. member for Northumberland, whose motion we are now considering, is this. He said-and this was a most extraordinary statement coming from the lips of a man who sat on the treasury benches for several years -that attention should be given to changing the interest rate. I should like to quote his words as reported at page 5175 of yesterday's Hansard:
One of the main difficulties is that the federal government has not been able to keep insurance and trust companies interested in lending on a low interest . . . basis-
I am omitting a few words.
This was partly due to the government increasing the interest rate. When the rate rose above 6 per cent the banks, of course, were eliminated from N.H.A. financing.
A law student or any person with any knowledge of the Bank Act, Mr. Speaker, knows that banks cannot lend money on mortgages for housing purposes regardless of the interest rate. Perhaps this situation should be corrected and in time it may be, but you cannot get money from banks at 6 per cent interest simply by directing a change in the interest rate or by reducing it to 6 per cent because banks are barred entry into the field
Tight Money Policy
of first or second mortgages on real estate or anything of that nature.
It might also be well to recall that mortgage money was in plentiful supply in the first half of 1965, as it was during all of 1964. This resulted in the unusually high activity in house-building to which I have referred. In 1964 it was high; in 1965 housebuilding was up 8.3 per cent over 1964. However, after July 1, 1965, funds from traditional lenders became increasingly scarce; yet in spite of that we had a record housebuilding year. It was in this atmosphere, an atmosphere which I say had already cast its shadow in July, 1965, that the government undertook on January 7 of this year, and undertook only after very exhaustive examination, to increase the national housing maximum rate from 6J to 6| per cent.
As a direct result of this, Mr. Speaker, I am sure not ten members of the house realize that national mortgage lending by approved lenders during the first two and a half months of this year was higher than it was in the same months in 1965 and 1964. I have already indicated that we will come to within about 10 or 15 per cent of last year's record level, perhaps even closer to that level.
However, having said that I believe in the free enterprise system, and many of those who have taken part in this debate having said the same thing, I am sure we will all agree that we cannot legitimately criticize approved lenders, whether they be life insurance companies, trust companies or any other lending institution, for lending their money to sources from which they get the best rate of return. That is only normal business and it is something which is governed by the law of supply and demand.
It is now apparent that the increase in long-term bond interest rates has offset the stimulus given loans for housing purposes in the first two and a half months of this year. I am sure that when the effect of the budget becomes apparent the pendulum will begin to swing in the opposite direction. I am not sufficient of a prophet, nor have I a crystal ball, to say how far the swing will go but it seems inevitable that a swing will begin in this direction.
While I have said more than once that the federal government would make available for direct lending no less amount of money that it made available last year to ensure the construction of another 31,500 units during the calendar year 1966, or possibly I should say housing starts during the latter part of

May 17, 1966
Tight Money Policy
the year, I think we must recognize that for an indefinite period the conventional lenders are going to make an election which it is open to them to make in a country such as ours, namely, whether to invest in office buildings, apartment blocks, private homes or in industry, as they see fit.
I think that the reason for the decreased participation in lending for housing purposes on the part of conventional lenders during the last two or three months is understandable to anyone who really believes in the free enterprise system. Particularly in a burgeoning economy we cannot always spread our bread with butter on both sides. In other words, we must always consider priorities. Where one demand is more urgent than another, that is the one to which we are most likely to respond.
What I say now may not apply to all of my hon. friends in the house. We are not all businessmen. Some of them have different political beliefs and ideologies from mine, and, of course, I respect them. But those of us who have had a business background, and I think that all reasonably well informed members of the house, should not lose sight of the fact that when financial institutions lend money it is their job, as the hon. member for Victoria-Carleton pointed out, to make a reasonable profit for themselves. If these institutions can get an extra half of 1 per cent or three quarters of 1 per cent out of one sound investment as against another, then that is their privilege; and when that happens no one should criticize.
[DOT] (5:40 p.m.)
When you have houses being built within a small margin of the number built during the record year you can hardly expect the government, if it believes in the free enterprise system, to bail out housebuilders or anyone else at a time when for the first time in 13 years they are beginning to feel a little pressure during the spring and summer months of the year. Instead of coming to the government for help I suggest that they do a little soul searching or a little fiend searching, that they go to the financial institutions in their own ridings, of which there are many in this country, including insurance companies, mortgage companies and others and try their luck there.
Instead of directing their appeals to the 264 hon. members of this house, why should not the builders, the National Housebuilders Association, the chambers of commerce, the

labour organizations and the agricultural and other organizations direct them to the private lending institutions, pointing out to them that it is good business not to switch completely from one line of investment at this particular time but to put money into mortgages. A little effort like that, I am inclined to think, would bring about results.
The government, in its policy announced regarding the provision of direct lending in the same amount as last year, is dealing with a situation that cannot be ignored. As has been stated more than once by the Minister of Finance (Mr. Sharp) and by others, the keynote of the budget is moderation. We want to extend, to spread out our prosperity.
Reference was made by the hon. member for Villeneuve to shortages of houses in the Ottawa-Hull area. I respectfully submit to each and every hon. member that you can see some vacant houses and vacant apartments in this area every day of the week. In fact, Ottawa is overbuilt as regards houses. There is greater need for housing in communities such as Prince George, Gold River and Vancouver island than here. There is a greater need for houses around the borders of the city of London and in southwestern Ontario where the automotive complex is situated, than in some of the larger urban areas of this country. All the government is saying is: "Let us spread it out".
There is no doubt that when the billion dollar expansion programs we are now engaged in are completed there will be plenty of housing. However, there may be some inconvenience to some people during the next year or so.
I would ask hon. members to bear in mind what has happened in other countries which have become industrialized. We have become more heavily industrialized in Canada in the last 23 years than in the preceding 100 years. When one looks at countries such as Sweden, Germany, France and Russia, which have been putting emphasis on and stressing the importance of new production facilities of the kind that the hon. member for Victoria-Carleton mentioned today, it will be seen that they all emphasize completing the plants that are going to create jobs and then building houses as quickly as possible thereafter. That is what we are trying to do at this time.
I think our housing policy today reflects that thinking. In the budget, Mr. Speaker, there was no element of panic, no lack of confidence, no suggestion of a diminishing faith in this country. Our examination of the
May 17, 1966

facts has led us to quite a different conclusion which is that we are in every way sound and strong and a great nation. However, there is a limited amount of skilled labour available; there are limited amounts of certain building materials; there is a limited amount of money in the hands of private lenders.
May I just quote some figures. When we built a record number of 153,000-odd houses last year in this country, how many do hon. members think were actually financed by the government? The figure is 31,500 with direct loans, similar to this year's announced figure, and roughly another 24,000 by way of guaranteed loans. But 100,000 houses in Canada were built with moneys provided without government money or guarantees of any kind, with moneys provided by the conventional lenders of this country.
Is anyone sufficiently childish to suggest, because for the first time there is pressure during the spring and summer months of the year to build more houses at once, that the government should step in? The builders quite naturally would like to keep building at the same level they have achieved during the last three years. They would like to continue doing that each year. To enable them to do that the private lending institutions would have to lend, as they did last year, $1,5G0 million.Were the government to step into the field, in addition to the approximately $450 million it has made available, it would have to provide another $1,500 million. Frankly, that would not make sense to me. Nor would that sort of thing make sense in the other countries to which I have referred which are placing primary importance on the need for industrialization, particularly where they have raw materials that can be converted to secondary and tertiary products, and placing lesser importance on other things.
I would not want anyone to create the slightest impression that housing is not considered by the government to be of the utmost importance. It has a high level of priority. It is because it has such a high level of priority that the government has taken the actions it has. I submit that in recent years we have clearly demonstrated our attitude. One only needs to look at the record of the last three years or so to see that.
In addition to the types of housing I have referred to, the 150,000-odd houses that were built last year and the 140,000 or possibly the
150,000	that we expect will be built this
Tight Money Policy
year, other types of housing are very important. In these fields there has been and is no curtailment. Instead, there has been every encouragement by the government.
Only this afternoon while sitting in the house I signed submissions that should bring into being hundreds of units of public housing in the province of Ontario alone. In 1965,
4,000	housing units were authorized compared with only 600 in 1964. It is true that most of this activity was in the province of Ontario, and I must give them credit for doing so much. What was done was done with public money, 90 per cent of which was supplied by the federal government through Central Mortgage and Housing Corporation.
I also want to make it perfectly clear that in addition to the funds for the direct financing of 31,500 loans and in addition to the guarantees there will be no diminution in funds for public housing. As a result we not only have public housing being built in Ontario on this very encouraging scale but also in other parts of Canada. Apart from the greatly expanded volume of public housing, an extensive program of low-rental housing for the elderly and for families with restricted incomes is now also being carried out -there is no restriction in that field-with N.H.A. assistance to private and publicly sponsored limited-dividend and non-profit corporations. Loans of this type amounted to more than $14 million in 1965, with a substantially higher amount being indicated for 1966. These projects will increase the number of housing units that will be made available to people with low incomes, to senior citizens and to others in this country.
We cannot have everything at once, Mr. Speaker. At this point in our national development it is not likely that we can have everything at once. The important thing in the field of housing is to do the right thing so that we take care of what one might term the important or urgent needs.
[DOT] (5:50 p.m.)
Admittedly in the field of housing there still exists a buoyant demand. We would not want it otherwise. We shall have an opportunity to take care of any demand that we have not supplied this year during next year or the year after next. Having said this, however, I would be derelict if I were to suggest there were no immediate or serious housing problems in Canada. I see in the house today members from constituencies to

May 17. 1966
Tight Money Policy
which these remarks apply. I refer for instance to housing in southwestern Ontario, to places in Labrador and Quebec, to parts of Manitoba, Alberta, Saskatchewan and many sections of British Columbia following the huge industrial development there.
There are other needs in the housing field, for example, housing for Indians. Only a few weeks ago my colleague the Minister of Northern Affairs and National Resources (Mr. Laing) announced a housing program of vital significance to every decent-minded person in this country. I happen to know something about it because I participated in some of this work. I visited 20 of the Indian communities last summer. I saw the housing conditions in which they live. I noted the absence of electrification, which is an almost indispensable part of housing today. The northerly parts of Alberta, Saskatchewan, Manitoba and British Columbia are regions where normally the days are short and the nights are long. An Indian child may get home from school at 4.30. How can he read a book if his home is not properly lit?
This is a type of housing that I happen to consider as being of great importance, more important in my opinion than some of the high-rise luxury apartments referred to by the hon. member who moved the motion we are considering. The government is not ignoring this need; in fact, $112 million is being put into this kind of housing and improvements.
All things taken into consideration, the government has no apologies to make about the adequacy of the moneys it is making available for housing. If time permitted I should like to deal with some of the points which have been raised by hon. members, but I believe the time allotted to me has almost expired. I agree with the hon. member for Victoria-Carleton that no uniform inflexible money policy is advisable. I hope hon. members will have gathered from what I have already said that we are not following an inflexible policy. Even in our present program priorities are being adhered to and applied in the case of low income citizens, Indians and others with special needs.
Perhaps I might conclude this statement by reiterating an observation I made in this house on April 27 when I referred to the housing situation and said:
The situation is serious, but I am happy to say, as a result of studies I personally have made in conjunction with senior officials of Central Mortgage and Housing Corporation, that while it is more

serious in a few areas than in most others, it is not as serious as one would be led to believe by the telegrams and messages coming to members of this house.
I trust hon. members will agree with that comment after the short analysis I have been able to give this afternoon. We are being subjected to pressure by people who have certain interests. They are not to be blamed for trying to foster their interests. But we must be strong enough to resist this pressure and go along in accordance with priorities which we believe are in the best interests of this country.
The government and its advisers keep a close watch on the housing situation and other factors where credit is involved, and because of this and because of the facts I have stated in the house this afternoon I urge all members to vote against the motion put forward by the hon. member for Northumberland.


Mr. Hales:: Would the minister permit a question? He has given us some reasons why private lenders have moved out of the market recently. Does he not think another reason might be that they are waiting for the government to announce its policy as far as the Bank Act is concerned?


John Robert (Jack) Nicholson: I hardly think that would be a fair assumption because, as I have said already, the banks are not in this field now. If the banks were to come in it could only be as a result of an amendment to the Bank Act. I cannot say whether there is to be any such amendment. There is no doubt about it, however, the conventional lenders to which I referred are institutions other than banks. They should be encouraged by those organizations I have indicated, boards of trade and so on, to get out and do their part in the present situation. They have found housebuilders to be good risks in the past and I hope they will be persuaded that it is sensible to continue this policy in the future.


Michael Starr: I have another question for the minister. In view of the fact that private lenders are out of the market in the homebuilding field, does the minister not feel there is an obligation on the part of the government to see that those people who wish to have their own homes are not deprived of an opportunity to do so? Does he not feel the government is under an obligation to step into this field and fill the gap?
May 17, 1966


John Robert (Jack) Nicholson: I am glad the hon. gentleman asked that question. If hon. members will analyse the figures I ouoted they will see that last year we built 153,000 houses. Of these,
100,000	were financed by traditional lenders. There were 120,000 houses under construction in January of this year, so the conventional lenders have not abandoned this field. They have made substantial loans already, but they made them earlier because of the winter housing program and it is reasonable to suppose they will be active again later this year. May I call it six o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. I
should bring to the attention of the house that the following questions are to be considered this evening pursuant to provisional standing order 39A: The hon. member for Skeena (Mr. Howard), Grain-Prince Rupert, B.C.-increase in elevator capacity; the hon. member for Winnipeg North Centre (Mr. Knowles), The Senate-suggested action leading to abolition.
Pursuant to special order I do now leave the chair, it being six o'clock.


Mr. More:: On a point of order, did I not understand that the minister's time had expired?


Mr. Deputy Speaker:: Maybe the time for raising a point of order is not now but I would point out that the minister has unlimited time.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
[Stage Direction]
The house resumed consideration of the motion of Mr. Sharp for committee of supply, and the amendment thereto of Mr. Hees.
Mr. Speaker:: Order. I understand the hon. member for Winnipeg North Centre (Mr. Knowles) wants to raise a point of order.
Tight Money Policy


Stanley Howard Knowles: Yes, Mr. Speaker. My point of order relates to the fact that there may have been some slight misunderstanding, but at any rate there are two or three hon. members who yet wish to speak, and I wonder if the house would give consent to postponing the taking of the vote until nine o'clock so that two or three short speeches might be made.


Some hon. Members:: Oh, oh.


Mr. Speaker:: I gather from the reactions of hon. members that there would not be unanimous agreement to the proposal advanced by the hon. member for Winnipeg North Centre.


Kenneth Hamill (Ken) More: Mr. Speaker, first of all I want to say that I think the hon. member for Danforth (Mr. Scott) might well have caught your eye first, and I want to place on record the courtesy he has extended me in allowing me to make my few remarks. No doubt, the Minister of Labour (Mr. Nicholson) is occupied with other duties, but I want to put on record the situation in my own constituency regarding housing. The last report available for the month of April indicates that single unit housing starts in Regina totalled 47 as compared with 104 last year. The situation in regard to mortgage money is such that although a local survey indicated an absolute minimum need of 1,200 housing units this year, it is not expected that more than 800 will actually be constructed.
This is a critical situation and I want to place it before the minister. I do not think he intended to indicate in his remarks that the people who have made representations to hon. members of this house have made false representations. Perhaps they have overemphasized part of the situation, but I think the figures I have quoted indicate that there is a serious situation in the industry.
I am one who believes that government intervention in the private sector should be limited when the private sector is able to look after itself, but when pressures on the private sector are such that there are needs it cannot fill, then I believe government intervention is warranted.
Although there was a high level in housing construction last year, in fact a record level as the minister said, the pressures for more housing in certain categories, over and above subsidized housing and housing for the aged, are greater now than they were last year. Therefore a cutback in the program at this time does not lend itself to achieving the aims of what government policy should be.

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Tight Money Policy
It is to be regretted that the government has taken the position it has at this time. The situation I have pointed out in Regina is similar to the pressures and needs found in the northern area, in the city of Saskatoon and its adjacent areas. Industrial development, particularly potash mining, in that area is creating a greater need for housing units.
The suggestion that contractors should turn to other lenders for funds is rather facetious because we know funds have dried up. At the present time there are just not sufficient funds available, and what funds are available are being lent at such high interest rates that they do not provide the moderate type of housing that is required, for instance, houses in the $13,000 to $16,000 category. One of the mistakes the government made in its policy was to raise to $18,000 the maximum value of a house under N.H.A. legislation. The minister suggests that sufficient money will be provided to equal the 31,000 housing starts made last year, but I suggest that more money will be needed. Because of the higher price of houses the government's policy will be affected.
We have a so-called war on poverty, but the results of the government's policy will be to put pressure on people who are outside the range of that war. I do not think this is good. I do not want to take up a lot of time, Mr. Speaker, since there are only a few minutes left before the taking of the vote. 1 have put the situation in Regina on record. The minister has had representations on it. I know the people concerned feel the situation is so critical that they are going to make representations to the minister through other sources, and these representations will reach him in a different manner. I am quite willing to let him judge what they are, as I am not going to tell him now.
Another matter I want to bring to hon. members' attention has to do with the fairness of governmental decisions, and in this I am not critical of the minister because I do not think the final decision has yet been made. I have no quarrel with the extension made in connection with homes in flooded areas of Manitoba, where work had to stop due to floods. But the fact that a strike took place in Regina and continued beyond the deadline that houses had to be completed was just as devastating as the floods. In Regina at present there are some 25 units that are affected, and unless the government decides that the strike was responsible, payment in

respect of these houses will not be made. I believe the government should extend the period for completion of the houses, now that the strike is over. That is only reasonable and fair.
There was absolutely nothing that could be done to complete these homes while the strike was in progress. We all recognize that labour has a right to strike in order to satisfy its own demands, and in a case like this the government should give recognition to the situation. I believe representations have been made to the government about these houses and I ask the minister to give sympathetic consideration to those representations so that the situation may be corrected.


Mr. Reid Scott (Danforth):: Mr. Speaker, I was very glad to yield the floor to the hon. member for Regina City (Mr. More), and I sort of wished he would talk the clock out because in five minutes there is very little comprehensive analysis that one can make of the minister's speech. However, that will keep until his estimates are before the house, at which time we can go into it more fully.
If there is anything evident from the minister's speech this afternoon, it is what we have been saying for many months in this bouse, namely that there is no housing policy here in Ottawa, no national, comprehensive housing policy at all. It is sort of like a yo-yo policy: It goes up and down. It is like a tap one turns on: When he wants to increase employment and help expansion, he throws a lot of mortgage money on the market and hopes something good will come of it.
The minister took a lot of time this afternoon to heap mountains of self-congratulatory praise upon himself, and pointed out what a wonderful job the government was doing because it was going to fall only 15 per cent below the housing target. I suggest that some time between now and the time when his estimates come before the house, the minister take a pretty serious look at the National Housing Act because N.H.A. should more accurately be called the national hoaxing act.
When it was brought into effect, I believe in 1945, it was a genuine workingman's act. Houses were selling for $6,000 at that time. Mortgages were issued for $4,800 and carried for $30 a month. Today the houses built under it are selling for $23,000, with average mortgages of $18,000 against them, hopelessly beyond the reach of the ordinary person in this country. The statistics indicate that the
May 17. 1966

minimum salary to qualify for N.H.A. housing at present is $6,500 a year.
[DOT] (8:10 p.m.)
Mr. Speaker, the latest statistics show there are 7,637,000 Canadians whose income is less than the minimum necessary to qualify under the National Housing Act. What kind of housing act is that? I would have liked very much to go into the minister's analysis of the mortgage shortage and point out the basic inconsistencies in his position. He urged on us the virtues of the private enterprise system and ignored the fact that the artificial pegging of the interest rate by this government has created this situation. It is all very well to tell the builders to go and talk to the mortgage companies and tell them they should be good citizens and lend them the money under the N.H.A., and at the same time tell them they are in a free enterprise economy where the insurance companies cannot be blamed for putting their money where they realize the maximum return on it. But there is inconsistency in the whole approach the minister is taking. We should sit down in this house and take a look at the housing picture in Canada; perhaps we can do it when we have the minister's estimates before us. It is a national disgrace that from coast to coast there is no national program or development.
Our senior citizens are living under disgraceful conditions. Every member in this house has made a speech about the deplorable way we treat our senior citizens. Our great cities are rotting at the core. If I had time, I could go into the small potatoes of what has resulted from the 1964 act. I am not blaming the minister for this. He is new to the business and he is fighting the provincial and municipal governments. We can work in Ottawa for the next ten years and never really have a national housing policy, unless we do two or three things. We must have a full time minister. This is no criticism of the Minister of Labour, but he cannot do two jobs and sell a massive housing program like that. Second, we must have a new department of urban development where we could have a minister who would be able to devote his whole time and energy in an effort to co-ordinate the provinces and the municipalities in this scheme. We need some sort of conscience so that we can establish a common goal in respect of housing. I wish the minister had had a royal commission on urbanization, because then we would have had some sort of
Division
blueprint as to where we would like to take Canada. As it is, we have nothing.


Mr. Speaker:: Order, please. It being 8.15 p.m., pursuant to section 4 (d) of standing order 56, it is my duty to interrupt the proceedings and put forthwith the question on any amendment before the house.


Mr. Speaker:: I declare the amendment lost.


Herbert Wilfred Herridge: Mr. Speaker, I was paired. Had I voted I would have voted tor the amendment.


Mr. Howard:: Mr. Speaker, the hon. member for Matapedia-Matane (Mr. Tremblay) and I were paired.


Mr. J. M. Forrestall (Halifax):: Mr. Speaker, in the opportunity provided following the vote for members to raise particular grievances, I wonder whether I might indulge the house for a few minutes to turn to what is developing into one of the most serious labour situations in our country. I refer, Mr. Speaker, to two situations; the first concerns defence employees at H.M.C. Dockyard and its related facilities in Halifax, and the second concerns employees at H.M.C.S. Shearwater, where there are now what are commonly known as Canadian force bases.
[DOT] (8:50 p.m.)
I do not propose to detain the house in tracing the history of the formula on which the prevailing wage rate concept is based. That goes back to the late 1920's and the early 1930's. However, as other hon. members from Halifax have indicated, in the mid 1960's the basing formula for wage rates established in the 1930's is somewhat out of date.
It appears, Mr. Speaker, that legislation affecting collective bargaining will be brought before the house in the months that lie ahead. Perhaps in that legislation will be found the answers to many of the problems that I raise. However, the essence of the grievance that I raise tonight is that I do not think the government has a clear understanding of the urgency that faces not only our part of the country, but the entire nation in this regard. The employees of H.M.C. Dockyard in Halifax are adamant in their position. They strongly feel that they are entitled to a new basing formula recognizing the principle of equal pay for equal work.
I am not one of those, Mr. Speaker, who would cry danger where no danger exists. I do suggest that unless the government pays immediate attention to the problems at the dockyard, problems that affect on an over-all basis in Halifax approximately 5,000 men, those men are going to walk off their jobs. If that were to happen we shall find that our navy, army and air force based in the Nova Scotia area will be unable to function, and their operations will come to a grinding halt. Anybody who in the past has said that we do not have effective armed forces will be vindicated in that statement by the end of June
May 17, 1966

or early July unless immediate attention is paid to what these men feel are legitimate demands.
Of immediate concern for the Halifax dock workers are such matters as wage parity with their west coast equals. There are substantial differences in pay schedules between workers in the Department of National Defence dockyards on the west coast at Esquimalt and those at Halifax.
As we struggle in the Atlantic area to close the economic gap existing between ourselves and the rest of Canada, the federal authority must play its full role in helping us to achieve our goal. We cannot talk about equality of opportunity, and equal sharing in our national prosperity unless we are all prepared to do something actively and positively toward that goal. Otherwise we are paying lip service to that concept.
The concept of wage parity-to use a well worn but familiar phrase-is not new. That concept was the concern not only of this government, but of its predecessor. The government in 1961, led by the right hon. gentleman from Prince Albert (Mr. Diefenbaker) decided, in the case of the Department of National Defence employees in the Halifax area, that the formula governing their wages should be changed from the traditional formula governing prevailing rates. That government, as an alternative vehicle, chose a formula based on the average schedules of pay in the seven most highly paid dockyards on the Atlantic coast, including the St. Lawrence river yards. This was tantamount to a recognition by a federal authority of a national basis upon which to calculate the pay of prevailing rates for hourly paid employees.
However, when this new formula I speak of was adopted, it was generally agreed that what had been done was only an interim step. That step was designed to enable the government to arrive at a truly national formula of pay based on the averages paid in shipyards from coast to coast and on both coasts. As I say, that was an interim step. However, the government of that day had recognized the worthiness of the plea by the dockyard workers with respect to equal pay for equal work. Subsequent events have not brought about the full extension of this previous program. They have not brought about a national basis for wage rates of dockyard employees.
These employees of the federal authority remain the only group of employees who do
Labour Conditions
not enjoy national parity with respect to wages. I do not know of any other branch of service, be it the armed forces, the civil service, or any other establishment, where that condition prevails. All employees of the government except these dockyard workers, to whom our country must turn and upon whom we must keep our instruments of defence viable and actionable, enjoy national wage parity.
It is 1966 now, Mr. Speaker. It has been five years since an interim step was taken by the federal authority. Nothing further has been done. We have had lots of promises. Everybody agrees that the basing formula must be looked at with a view to changing it. So far however, nothing has been done.
Last autumn the Trades and Labour Council at H.M.C. Dockyard in Halifax presented to the government a brief in which it outlined a five year program to achieve wage parity for dockyard workers from coast to coast. This program was an orderly, well thought out and responsible map of action on their part. It showed that the program could not be carried out without consideration being taken of the effect that it would have on community businesses, doing the same repairing and overhauling as H.M.C. Dockyard, in the Halifax area. The members of the Trades and Labour Council were well aware that wages paid at the dockyard affect wages paid in similar areas of concern in the private sector of business.
May I say for the record that the formula the council proposed-it presented it to the government last fall-would have provided an opportunity for review by both the government and local interests of matter pertaining to wage parity respecting various trades within the dockyard. In no way did this brief recommend anything of an insurmountable nature. Indeed, the program set out called for the achievement of wage parity in this matter: in the first year, there would be paid 25 per cent of the difference in the schedules of wages between the west coast and east coast; in the second year, 33 per cent of the remaining difference would be paid; in the third year 50 per cent; in the fourth year, 70 per cent, and in the fifth year 100 per cent of the remaining difference would be paid.
[DOT] (9:00 p.m.)
To say the government simply shelved the proposal and hid behind the excuse of waiting until the collective bargaining bill became an act might be oversimplification; it might,

May 17, 1966
Labour Conditions
in one sense be not entirely correct. But this does not in any way lessen the seriousness of this presentation by the employees at the dockyard and the other national defence facilities in the Dartmouth-Halifax area.
The failure of the government to act on this question of wages has brought about a situation among these highly skilled technicians-instrument makers, machinists, boilermakers-which might have been avoided. These are people skilled at trades which are vital to keeping our navy at sea and, in these days of integration, to keeping our army on wheels and our air force mobile.
In the last 12 years, in order to get a highly trained group of men into the dockyard, an apprenticeship training scheme has put 244 young men through a full course of instruction. Of these 244 people, 121 have gone elsewhere in the country to find employment simply because they found they could get more money outside the dockyard. Not all these people have left the Halifax area. They can get more money with a dozen different national companies which have established businesses in our area. This is an indication of what is happening as a result of the inability of the government to act.
I do not suggest the government must completely satisfy these men at the dockyard. They are reasonable men. They are labour men. They know there is give and take. But remember, it has cost the taxpayers of Canada more than $18,000 to train each of the apprentices I mentioned and it goes without saying that the men at the dockyard would much prefer to have had that money in their pockets than to see it go into the United States, or the west coast, or Ontario or anywhere in the private sector.
A dockyard in the eyes of many people is simply an excellent training ground for machinists, boilermakers and skilled men of all kinds. This is not why the dockyard was established. Bearing in mind the urgent necessity for wage adjustments at the dockyard before the implementation of legislation affecting collective bargaining I would ask the Associate Minister of National Defence (Mr. Cadieux) and those on the treasury benches seriously to consider a thorough review of the question of wage parity at the dockyard. I suggest the government give serious consideration to the brief submitted to them last year. These men want an answer. They do not want to be put off. They want an answer with regard to wage parity.

If the government would do this and supply the trades and labour council at the dockyard, as well as the motor transport section at Canadian Force Base Shearwater with a reasonable answer, a major step might be taken to avert what could be a most serious situation. These men have now gathered about them substantial outside support within the trades and labour council including many unions with national and international affiliations.
Each day these people are getting, union by union, more and more substantial support and confirmed intention of support through letters and other documents. I am not standing here to make a noise or to create any alarm which does not exist. I have followed the situation at the dockyard as far as it concerns this question of wages for some ten years, in spite of the fact that I am a very junior member for Halifax, and I suggest to the government that the position has never been as serious as it is at this moment.
There is a second matter on which I wish to speak. I will deal with it briefly before resuming my seat. My purpose is to outline the difficulties being experienced by the motor transport section at Canadian Force Base Shearwater. Here again the government is well aware of the difficulties faced by its employees. Not only is there disparity over the whole field of equal pay for equal work, but we also have within the region men doing exactly the same job as their counterparts two and a half miles away while being paid substantially less.
[DOT] (9:10 p.m.)
Although the personnel at Shearwater find themselves in an identical environment, faced with similar tax rates, tax structure, merchandise costs, rental costs and construction costs as their counterparts at Dockyard in the naval armament depot, the naval magazine and other supporting facilities at the army centre, they receive an across-the-board 20 cents an hour less for their labour.
We live in an age when in our thought processes we must not overlook the dignity, value and worth of the individual. Unless we do this we are not ordained for any reasonable, Christian or otherwise, future.
I should like for a few moments to quote from certain sections of the brief prepared by the motor transport section of H.M.C.S. Shearwater on this matter. I should like first of all to put it on the record, and second, to establish in the minds of all hon. members
May 17, 1966

the urgency tor over-all consideration of the national defence employees and their plight, and the additional plight being faced by a certain group within the general complex in the Halifax area.
I quote from the brief as follows:
We would like to bring to your attention the discrimination of some of the employees in the Halifax-Dartmouth area. We are speaking of the personnel of M.T. section (H.M.C.S. Shearwater).
I notice they have not yet learned to call it the Canadian forces base.
We would like to point out the different rates of pay in this area of personnel who have the same employer (Department of National Defence). On checking with the rate scale in this area, we find the rates are as follows:
H.M.C. Dockyard	H.M.C.S. Shearwater
Driver	$2.05 Driver	$1.85
These are hourly rates in the integrated motor pool, and if these men walk out, anybody who drives a government vehicle is not going to be able to go to work in the morning. In this one category the difference is 75 cents an hour. A heavy equipment driver at Dockyard gets $2.25 an hour, and at H.M.C.S. Shearwater $2.05, 20 cents an hour less for this whole schedule of employees. Naval magazine rates are the same as Dockyard. The naval armament rates are the same as Dockyard, and also the Shannon Park rates. But Shearwater is a naval establishment. We fly airplanes from there. Although it is a naval establishment it has been classified as something less than a ship's service centre, and so the employees get 20 cents an hour less.
I would now like to give a few figures from outside the area with respect to drivers. E.M.I. Cossor pays $2.25 an hour, Imperial Oil $462 per month for a 40 hour week, which works out as $2.89 per hour, Volvo $2.05, Fairey Aviation starts at $2, and Texaco starts new men at $2 an hour.
With reference to the question of disparity of wages there is one other little group to which I should like to refer, namely employees of the marine agency of the Department of Transport in my area. They find themselves in exactly the same boat as the hourly paid employees of the Department of National Defence.
Why is it in 1966, when the government pays great lip service to the principle of equal opportunity, saying that everybody must share in the national prosperity, that these people do not obtain equality? With full awareness of what is going on at Dockyard
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and the impact that this will have on our economic structure in the private sector, I simply ask the government, is it fair, is it right and is it just to continue in 1966 to avail itself of a principle and policy evolved in the late 1920's and early 1930's?
It was an effective and responsible principle through the 1930's, 1940's and perhaps through the early 1950's, but if the government wishes to say we are enjoying unprecedented prosperity, let us recognize that fact by giving consideration to the prevailing rate men at Dockyard. If the government does not give them the consideration that they deserve then, as I said at the outset of my remarks, we are going to have totally immobile Canadian forces in the Halifax area on July 1.


Mr. Deputy Speaker:: Order. May I ask the
hon. member for Vancouver East (Mr. Winch) if the remarks which he is about to make concern the same grievance as voiced by the hon. member for Halifax (Mr. Forrestall)?


Harold Edward Winch: Yes, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Vancouver East.


Harold Edward Winch: I am very glad that the junior hon. member for Halifax (Mr. Forrestall) has raised this particular matter this evening. I certainly do not think he should apologize-


J. Michael Forrestall: If I might interrupt for just a moment, it is incumbent upon me to refer to myself as the very junior member for Halifax, but it is not incumbent upon the hon. member for Vancouver East (Mr. Winch).


Harold Edward Winch: Well, Mr. Speaker, I most certainly will refer to the hon. member as the hon. member for Halifax, but you know I am a good listener and when he referred to the junior member, the very, very junior member, I thought I was being very, very nice when I said the junior member, and not the very, very junior member.


J. Michael Forrestall: Thank you very much.


Harold Edward Winch: However, Mr. Speaker, I am very happy that the junior member for Halifax has raised this particular matter at this time. As I started to say, he most certainly should not and need not apologize if he appears to be making a loud noise on this particular grievance. A loud noise and emphatic statement are required on this grievance because it is just as serious as he

May 17, 1966
Labour Conditions
pointed out. It is serious not only at the dockyard at Halifax but also at the dockyard at Esquimalt in B.C., where the identical situation pertains.
Year after year in this parliament the identical problem that the hon. member has spoken of has been raised, not only when the present government was in office but when the Conservative government was in office, and the only answer we received was that the matter was under consideration, and was being studied, and that something was going to be done. I know we raised this issue twice in the preceding session and that was the answer we got.
[DOT] (9:20 p.m.)
I want to add my voice to that of the hon. member for Halifax (Mr. Forrestall) to say that the employees at the dockyard of Esquimau feel exactly the same way as the employees at the dockyard at Halifax. They no longer are going to be satisfied with an answer to the effect that something is going to be done or that the matter is under consideration. It also is my information that if something is not done inside of 30 days, action will be taken by the men themselves and it will be an action which will be very detrimental to the maintenance and operation of our armed forces. I never have been able to understand the thinking of the government or the departments as indicated by the way they handle their wage rate policies in the dockyards of this nation. As a matter of fact their policy seems to vary from department to department, and indeed within a department itself.
In the dockyards we have a black situation. Let us take the case of the electrician. In the dockyards at Esquimau and Halifax there are two types of electricians employed; you have the inside wire men who do the construction and maintenance work, and you have the inside wire men who do the ship work. An inside wire man who works on a ship is paid at a lower rate than an inside wire man who does the construction and maintenance work on the dockyard itself.
However, under what was supposed to have been the policy, the payment should be on the basis of what is termed the prevailing rate, and the prevailing rate is the trade union rate in that locality outside the dockyard. What happens at Halifax and Esquimau? Here we have maintenance electricians on the land and the ship electricians on the ship; the ship electricians receive the

ordinary or normal rates, but in respect of the electricians in the dockyard, the Department of National Defence maintains that since they are in the dockyard they are in the same position as the inside wire men on the ship. These maintenance men never put a foot on board ship, so they cannot do any work on board ship, and yet they are cheated. They are classified at the same prevailing rate of the shipyard instead of being paid according to the poUcy which states that it shall be the prevailing rate of an inside wire man on construction and maintenance. That has been going on for years; they have been complaining for years, and still no action is taken.
There is another matter in respect of the dockyards at Halifax and Esquimau which I did not hear mentioned by the hon. member for Halifax, but it is a most intriguing and important one. At the dockyard there are many occasions when additional skilled men are required. They are brought in as extra men, as temporary but skilled men. They are brought in at the prevailing rate, the trade union rate, and are paid the full trade union rate. What happens to the permanent men who are on the job on the dockyard all the time? Because they know what has to be done and know how the job should be done, they supervise the work of these temporary men who are brought in. So you have the situation where the man who was brought in on a temporary basis is being paid at a far higher rate than the dockyard man who is supervising his work.
What kind of policy is it where you have the skilled man on the job receiving a lower rate of pay than the man he is supervising? That is the policy which has been pursued for years and which is being pursued right now at the dockyards of Halifax and Esquimau. I marvel at the patience of those thousands of employees who have put up with it for this length of time. It is no wonder they are dissatisfied; it is no wonder they have reached the limit of their patience and have reached the point where they are not going to stand for any more promises or talk. They want action or they will take action.
I have no hesitation, Mr. Speaker, in saying, from information I have received from Halifax and Esquimau, that I believe the government and the Department of National Defence right now is sitting on a powder keg and the fuse is about to be lit. You have only about 30 days and if there is no action, the government has only itself to blame.
May 17, 1966


The Acting Speaker (Mr. Rinfrei):: May I
ask the hon. member for Halifax whether he wishes to speak on the same grievance.


Mr. Robert McCleave (Halifax):: The same grievance, Mr. Speaker.
I support my colleague from Halifax (Mr. Forrestall) and my colleague for Vancouver East (Mr. Winch) and should like to say that what they have indicated to this house, in my opinion, is pretty accurate forecast of what will happen. I think the government is sitting on a burning powder keg in connection with its prevailing rate policy in respect of the dockyards at Esquimalt and Halifax. I do not believe there is a great amount of time in which to solve the problem. Action is needed now.
I am happy to see that the Minister of National Defence (Mr. Hellyer) and the Associate Minister of National Defence (Mr. Cadieux) are in the chamber to hear these contributions. I would suggest they take to their government and more particularly to the Minister of National Revenue (Mr. Benson), as the minister in charge of Treasury Board, the points of view which have been expressed by the previous speakers, as well as mine. These are matters which should be dealt with quickly.
I speak particularly of the 2,400 men classified as prevailing rate employees who work in H.M.C. Dockyard. Before I go over some points in addition to those raised by my colleague, I should like to commend him for his hard work in dealing with this problem. It is not a pleasant problem to deal with. We are members of the opposition, and I suppose we could take the attitude of shrugging our shoulders and moving away from a very bad situation; but we do represent the Halifax area and we do feel we have a responsibility, if we as members of parliament are going to play any useful role at all in seeing that this situation is solved and that somehow the aspirations of these 2,400 men are met in some satisfactory way.
When my colleague and I return to our constituencies week end after week end it is not pleasant for us to see the frustrations of these men who are trying to achieve some more reasonable wage formula. So we continue to work with them. We work as a conciliatory force, and not as a force egging or urging them on. We act as a conciliatory force with the Department of National Defence in an effort to bring forth justice and
Labour Conditions
order. Nobody wishes to be a member of parliament for an area where a severe strike could break out.
No one would be proud to be a member under such circumstances, and anyone who would allow a strike or walkout to develop without an endeavour to head it off would be doing a disservice to his constituency and, since we have elements of national defence which are involved, a disservice to the whole country. My colleague has played the more active role in our dealings with this problem, but both of us have been dealing with it.
[DOT] (9:30 p.m.)
I think the points of view he has expressed here in a moderate and reasoned fashion, yet none the less with chilling overtones of what could happen if the problem is not dealt with, is an indication of his sense of responsibility, the extent of his study and his willingness to spend long hours researching into prevailing rate formulas, and factors that have to be considered by the department.
It may be suggested that collective bargaining for government employees is just around the corner and that this will provide an answer to the problems. The department or the minister may suggest that we should wait until collective bargaining is established, but I suggest that will take place too late and will only come into effect after the end of June. It will be too slow in coming and too late to deal with this particular problem. What is needed is a policy and that policy is needed now.
The Minister of National Defence, the Associate Minister and the Minister of National Revenue (Mr. Benson) must realize that a policy regarding wages for non-civil servants who are classified as prevailing rate employees must be spelled out in positive terms. If there is to be collective bargaining at some future time the collective bargainers on the government side must have some policy spelled out, so they will know what to do when they sit down with the employees. The department should consider quickly a wages policy for dockyard employees so as to give at least some indication as a guideline to be applied, if not now, then when a collective bargaining team is appointed. The simple fact that collective bargaining is just around the corner is not in my opinion a sufficient answer to the situation.
My colleague has pointed out some of the factors which bedevil the Halifax situation, factors such as costs and lower wages for

May 17. 1966
Labour Conditions
dockyard employees which drive skilled workers from the area. This is something about which all Nova Scotians, maritimers and, indeed, Canadians should be vitally concerned, because these are factors which become incentives to individuals to go elsewhere, and factors of economics which cause waste and high costs in training apprentices. The cost figure in respect of training apprentices given earlier this year in answer to a question asked by my colleague was $17,000 to $18,000 per apprentice. That is taxpayers' money that is being spent. Yet many of these apprentices are going elsewhere where they can make a better living for themselves and provide more appropriately for their families. These are points that must be considered when one deals with the seriousness of the situation.
What about the formula itself? These men are classified as prevailing rate employees. In using a prevailing rate formula one looks around for comparable industries and sets wage patterns in a particular area as a result of those comparable industries. Even this procedure has its farcical aspects. As my colleague pointed out, there is a vast difference in wages paid to prevailing rate employees at the Canadian forces base at Shearwater as compared to those employed at H.M.C. Dockyard; yet men employed at both leave their places of employment to go home to adjoining houses. H.M.C. Dockyard and the base at Shearwater are very close, so there must not be a prevailing rate in existence there because of the startling wage rate differentials that exist.
A prevailing rate formula I suggest is not inappropriate for either H.M.C. Dockyard at Halifax or the station at Esquimalt. Indeed, some recognition of this fact was given by the former government in 1961 when it departed from the formula then in existence, which equated the dockyard workers with the workers at the Halifax shipyards, right next door on the Halifax waterfront, and instead adopted a formula based on an average of seven east coast yards. This represented a significant breakthrough which was achieved by the Diefenbaker government and gave heart to many maritimers, because it showed at least a glimmering of some aspect of a national wages policy, rather than a policy narrowly anchored within specific areas. This was a march in the right direction, and I suggest it is a march that should go further.

How should a wages formula be determined? I suggest that the day has long passed when dockyard workers in this country should be tied in with shipyard workers. Without denigrating the shipyard workers of this country in any way, I suggest that dockyard workers are part of today's modern sophisticated type of defence industry which relies on electronics and which is far removed from the shipyard-dockyard comparison which existed 20 years ago, near the end of the second world war.
Because of the growing sophistication in the defence industry, the dockyard industry should be treated as part of it, and if a prevailing rate formula is to be adopted, the Department of National Defence should look to other defence industries in an area to determine wage rates for dockyard workers and not look exclusively to neighbouring shipyard industries.
It must be admitted that ship construction and repair yards in Canada are not enjoying in general the economic growth which this country is enjoying. I think this is the case principally because, as a maritime nation, we are a high cost nation in competition with other countries of the world and have not fared as well as others in our shipyard industry growth.
Finally, in deciding how this formula should be considered, it is a legitimate request on the part of dockyard workers on the east coast that the government should look at wages paid to dockyard workers on the west coast as some kind of a guide as to what are proper wages. Of all industries that are comparable, surely the dockyard industry is one that falls at the top level.
In short, sir, I suggest that a national policy is needed to deal with problems raised regarding the wages paid at Esquimalt and Halifax to dockyard workers. There are legitimate grievances which are now festering in both these areas, and if these grievances are allowed to continue to fester they will erupt and break out, as forecast by the hon. members for Halifax (Mr. Forrestall) and Vancouver East (Mr. Winch). I suggest the answer is for the department to come quickly to grips with the problem in order to devise a formula which will fit the situation which exists in the mid-1960's, rather than carrying on a philosophy which was developed at some time in the mid-1920's.
[DOT] (9:40 p.m.)
It might have been somewhat easier for my colleague and myself, from the Halifax area,
May 17. 1966

simply to let the government and the department struggle with this problem. We could have shrugged our shoulders and said, "No, we are in opposition; there is really nothing we can do to help. We cannot advance a point of view for you because no one will listen." I do not think that is a responsible attitude to take and certainly, as a member of parliament for this area, which has grievous labour problems, I do not want to take that attitude. My colleague and I are offering all the assistance we can to the government in connection with what we regard as a very difficult problem. I repeat my colleague's request and add to it my own in beseeching the government to come seriously and quickly to grips with what is a very serious problem.


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker-


The Acting Speaker (Mr. Rinfret):: May I
ask the hon. member whether he wishes to speak along the same line as the three other members?


Mr. Mongrain:: It is a related grievance which is not quite similar to those just raised by the previous speakers.


The Acting Speaker (Mr. Rinfret):: May I
ask the house whether we may hear another grievance?
[English1


Mr. Churchill:: We should hear from the Associate Minister of National Defence (Mr. Cadieux).


Hon. Leo Cadieux (Associate Minister of National Defence):: I wish to point out very briefly that we are aware of the problems raised by three previous speakers and that we are now looking into them, in co-operation with the Treasury Board, the Department of Labour and the Civil Service Commission.
I know that the members who raised this matter indicated that a solution to this very difficult problem is urgently needed. I shall not give a detailed account of the various phases we went through to end up with such serious difficulties. Hon. members know as well as I do how this situation started and developed.
A review of classifications is now being made by the Civil Service Commission. That is what is imposing limitations to some extent on any possible action at the administrative level of the Department of National Defence.
Labour Conditions
Even though we are concerned with this problem and its urgency, we are restricted to a certain extent because of this reclassification undertaken by the Civil Service Commission.
Personally, every time I have had the privilege and pleasure of talking with representatives particularly from the Halifax areas, we have been able to approach the problem and exchange useful views in order to settle, temporarily at least, the most urgent matters pending the complete plan that is to be submitted by the Civil Service Commission.
As far as the two members for Halifax (Mr. Forrestall and Mr. McCleave) are concerned, I undertake, as requested by the senior member, for instance, to take up with to the Minister of National Revenue (Mr. Benson) the question of whether things could not be activated. We all know that the Civil Service Commission is trying to achieve what they call occupational categories and thus set a basis for collective agreements in the various contracts that have to be renegotiated.
The date set by the Civil Service Commission is October 1, 1966. According to the hon. members, that is much to late. I am inclined to agree. There is one fact we must bear in mind: we are faced with a massive reclassification. It should be recalled that when the members of the national defence staff in particular are considering these trades -we have reduced the number as much as possible; but we still have 110-in each case they have to examine a difficult problem by itself. Speaking for myself, I have never encountered such a difficult and frustrating experience as trying to consider simultaneously 110 different problems, none of which may be considered in the abstract but each of which, as the hon. member for Halifax pointed out, involves an employee, a human being with his pride, who is entitled to some regard and to receive a decent salary for the work he is doing.
I am sure, as far as our department is concerned, that we are doing everything possible to study all these problems in the right perspective with a view to finding a fair solution. I promise the hon. members, specially the member for Halifax, and without forgetting the member for Esquimalt-Saanich (Mr. Chatterton), that I shall do everything in my power so that this salary revision is completed and we can find a solution which might not only be a rule for the present but also the key for continuity in that labour

May 17. 1966
Quebec Labour Relations classification, where social justice would remunerate equitably the employees of national defence and the other employees in the same area.
The minister has assured me that we will do everything in our power to give satisfaction to those people who have waited so long. The Civil Service Commission and the people in charge of labour relations are working on this problem which concerns us, in an endeavour to find a satisfactory solution.


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, my grievance tonight deals with a situation which probably concerns the whole house, because it relates to the present strike on the St. Lawrence and the great lakes.
The regional industry of Trois-Rivieres, which I represent, is affected, and this holds true more particularly for the 500 or 600 employees directly involved; further, I do not refer to the effects from the national point of view. I believe that up to now the Minister of Labour (Mr. Nicholson) has done everything that was humanly and logically possible, by appointing the arbitration board which invited the two parties to sit Friday. I was scandalized and amazed that the management representatives refused to attend and negotiate.
I noted, like all members, that those people were invited Saturday and that the judge was asked whether he was ready to sit, because it was an urgent matter. We were hoping until Saturday afternoon, from 2.30 to 4.30 p.m., but the management representatives refused to take part in the negotiations.
Well, Mr. Speaker, I think we have reached a point where we should ask the minister to take strong action and, if he lacks the powers necessary to force the management representatives to the negotiation table, I think he should ask the house for the emergency powers he needs. I have no doubt that the whole house would be pleased to give them to him, because Canada's economy as a whole is affected.
I would not want to give the impression that I have mentioned these facts for demagogic purposes; rather it is because I recall that, in 1961, when we had trouble caused by the S.I.U., when violence flared up, the employers applied to the courts for an injunction-I was mayor of the municipality and I took the necessary action to force the employees on the waterfront to comply with the
[Mr. Cadieux (Terrebonne) .1
terms of the injunction. We took strong action and forced them to comply with the law.
Then it was the employees' turn. There should not be a double standard, especially in the present case. Because of the consequences on the economy of our country, it is even more important.
I submit, and this is the suggestion I want to make on behalf of my area, knowing that there will be repercussions-I would like to ask the Minister of Labour to avail himself as soon as possible of all the authority he can dispose of to force the management representatives to negotiate. If he does not have the necessary authority, he only has to ask the house to give it to him. Afterwards, if they did not want to comply, the minister could take steps in order that navigation and transshipment of freight could continue normally.
I believe that the labour representatives, even if I do not have the authority to speak in their name, would understand, after this gesture of good will and this proof of energetic authority on the part of the minister, that it is in their interest to resume work during negotiations, because they can expect that the matter will not drag out unduly as it has dragged on since last September.
[DOT] (9:50 p.m.)


Mr. A. D. Alkenbrack (Prince Edward-Lennox):: Mr. Speaker, I have a grievance different from the subjects discussed this evening. I might run five minutes past the hour in completing my grievance, so may I have your permission to do so?
I rise at this time to protest the policy now being pursued by the government in connection with naming designated areas and rewarding industry that locates and settles in these designated areas at the expense of the whole country. This policy, which is one of sheer favouritism, gives all the advantages of attracting industry to these designated areas.
I think it is also timely that I protest against this policy tonight, because at this very minute the executive and members of the Prince Edward Chamber of Commerce are meeting in Picton, Ontario, to wrestle with the problem of our failure to attract new industry. The same problem exists in Lennox as well, which has people, problems and industrial circumstances similar to those of Prince Edward.
May 17, 1966

The policies of the government are seriously impeding the economies of these two great counties. Prince Edward county has already lost a good prospective industry. The persons acting for the industry said that they could not consider locating in Prince Edward, even with all its many advantages and good qualifications, because the federal government grants were so substantial that they could not afford to pass them up.
We have in my riding, Mr. Speaker, all the responsibilities to keep our economy buoyant and rolling that are faced by the people in designated areas. We have children to educate, bills to pay, taxes to pay, taxes which are used by this government to the advantage of the designated areas and to our disadvantage. We try to promote industry but to no avail, as we cannot compete in the situation brought about by the discriminatory policies of this government. Even our students, Mr. Speaker, cannot get summer jobs because of the lack of industrial growth in the county. They go elsewhere for employment-yes, for permanent employment
I have here an article which appeared in the Picton Gazette of May 6, and I should like to quote parts of it:
Already one industry has turned down the Prince Edward area in favour of the heavy federal government assistance available in a designated area. The recommended resolution calls for Prince Edward to either be designated for industry grants or given assistance so the county can compete with designated areas.
The latter is preferable.
I submit, Mr. Speaker, that industrial and economic progress can be maintained and nurtured in this country without a preferential government policy of the kind presently existing. This practice and policy of the government is creating much unrest in the nation. It is turning city against city, municipality against municipality. Who knows-as time goes by we may find that some of these federally subsidized industries have located in the wrong place and the wrong area, and may in the long run have done better to settle in the very area or areas which were turned down at the beginning. Such an area is Prince Edward-Lennox, which is splendidly located approximately half way between the two greatest metropolitan markets in Canada-I refer to Toronto and Montreal with first class rail and deep water transportation facilities, a good, vigorous, intelligent and basically capable labour pool; with living conditions and environment and recreational
Labour Conditions
conditions second to none. With these characteristics these counties can offer prospective industry the best of advantages. Existing industry now prospering in our counties is proof of this. But we cannot compete at this time with the present policies of the government, which are so partial to our neighbouring designated areas.
The Prince Edward Chamber of Commerce is working harder than ever before on industrial promotion, as is the Napanee Chamber of Commerce. But Prince Edward is getting no new industry; neither is Napanee. Both Picton and Napanee assist and encourage their existing industries all they can. The pace of present-day standards of taxation, of competition, of living, and of population growth demand that we multiply our enterprises, that we produce more in our own areas in keeping with all the circumstances pertaining to our ambitious and vigorous Canadian economy.
Prince Edward-Lennox, the Ontario home of the Loyalists and older than Canada itself, is one of the cradles of Canadian civilization. The area developed on an agricultural economy which still flourishes, despite some disadvantages. But now in 1966, Mr. Speaker, agriculture, although it can feed us, cannot keep and provide employment for us all.
That is why I call upon this government either to do away with this law delineating these designated areas, or to bend these binding restrictions on our area and make an arrangement whereby we can compete with our neighbours toward a more prosperous Canada.
Motion (Mr. Sharp) agreed to, and the house went into committee, Mr. Batten in the chair.
The estimates of the following departments were first taken up and entered for consideration:


[Stage Direction]
1.	General administration, including the promotion of a program for the employment of the older worker; the promotion of programs for combating seasonal unemployment; the organization and use of workers for farming and related industries; and the manpower consultative service, $3,913,500.
[Stage Direction]
1.	Department administration including the care, maintenance and custody of standby defence plants! buildings, machine tools and production tooling and grants to municipalities in lieu of taxes on Crown-owned defence plants operated by private contractors, $21,330,800.
May 17. 1966
[Stage Direction]
Estimates Entered for Consideration DEPARTMENT OF FINANCE
1.	Department 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.
[Stage Direction]
1.	Administration, including the office of the Superintendent of Bankruptcy, grants and contributions as detailed in the Estimates, gratuities to the widows or such dependants as may be approved by Treasury Board of judges who die while in office and authority to make recoverable advances for the administration of justice on behalf of the governments of the Northwest Territories and the Yukon territory, $2,719,950.
[Stage Direction]
1.	General administration, including grants as detailed in the estimates, $15,772,000.
[Stage Direction]
1. Allowance in lieu of residence to the Speaker of the Senate, $3,000.
[Stage Direction]
1.

Maintenance and operation of the Prime Minister's residence, $35,000.
Mr. Mcllraiih:: Mr. Chairman, before you leave the chair I want to indicate, so that it will be on the record, that the number of departments called tonight was by agreement.


Gordon Minto Churchill: Is there still one left open?


George James McIlraith: There is still one left open, the estimates of the Solicitor General.
[DOT] (10:00 p.m.)
Proceedings reported.


George James McIlraith: I wonder if the house would revert to motions for the purpose of making changes in a committee, and for the purpose of hearing an announcement by the hon. Minister of Labour.


Mr. Deputy Speaker:: Does the house give unanimous consent to revert to motions?


Some hon. Members:: Agreed.



LABOUR RELATIONS


John Robert (Jack) Nicholson: Mr. Speaker, I am sure that all hon. members of the house and all Canadians will welcome the announcement that His Honour Judge Rene Lippe, who performed such outstanding service for Canada in the fall of 1963 at the

time of the water front trouble in Montreal, and who has since continued to render outstanding service to Canada as a member, and latterly, as chairman of the Maritime Board of Trustees, has agreed to accept the responsibility of mediator in the new Montreal dock trouble.
The Prime Minister and I have been talking to Judge Lippe this evening. He is returning to Montreal tonight. The first meeting of the parties with him in his capacity as mediator will take place in his office in Montreal at 2.30 tomorrow afternoon.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, tomorrow we propose to bring forward for consideration item No. 52 on today's order paper, the resolution dealing with the provisions for term 29 of the agreement with Newfoundland; then, item 60 on today's order paper, the resolution preceding the bill respecting allowances to persons being trained under technical and vocational training programs; then the estimates of the Post Office Department, Department of Industry and the Department of Defence Production. We will continue any unfinished part of that program on Thursday.


Mr. Depuly Speaker:: Order, please. Is the Chair correct in its understanding that there has been agreement to have no proceedings on the adjournment motion this evening?


Stanley Howard Knowles: I did not understand that. I believe that one of the questions that had been announced was to be postponed, but that was far as it went.


George James McIlraith: That was my understanding.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Stanley Howard Knowles: Mr. Speaker, on the orders of the day this afternoon I addressed a question to the Prime Minister with reference to a new way in which the Senate might be abolished. My question was based on a news report of the intention on the part of Premier Lesage to abolish the upper house in the province of
May 17, 1966	COMMONS
Quebec. It was on the basis of the manner in which Premier Lesage proposed to take this step that I put my question to the Prime Minister.
Mr. Speaker thought that it was an improper question for the orders of the day and so I suggested that we could perhaps abolish the Senate at ten o'clock tonight.
I hope the applause is recorded in Hansard.
I think I should quote a couple of sentences attributed to Mr. Lesage in yesterday's edition of the Montreal Gazette. It is an excellent statement of the proposition that an upper, non-elected house should be abolished. These are the words from yesterday's Gazette:
Mr. Lesage said abolition is necessary to transform and democratize parliamentary procedure and put government in the hands of the people. In the future the decisions of the representative of the people must be final; they cannot be in the hands of those who are appointed.
I agree thoroughly with the sentiments expressed by Mr. Lesage, and though all members of parliament do not yet realize it-they will in due course- I believe the day has come when the affairs of our democracy should be in the hands of those who are elected by and are responsible to the people of Canada.
I raise this question, however, because I think Premier Lesage has made statements which make it necessary for this government to come forward with some comment. As hon. members are aware, in the last session of the previous parliament we were informed that the government of Quebec had asked the government of Canada to endorse a petition from the lower house of Quebec to Her Majesty the Queen for an amendment of the constitution in a manner which would curb the powers of the Quebec upper house.
I for one fully agree with Premier Lesage's aim to curb those powers or to do away with the upper house altogether. But the way in which this proposition was placed before us last session did raise some questions as to the manner in which we should amend our constitution.
Mr. Lesage has gone one step further. He has told the electors of Quebec that he now proposes to abolish the upper house in that province. He says that if his government is returned to power and if Westminster agrees to amend the British North America Act as he has requested, Quebec will then be in a position in which measures passed by the lower house cannot be vetoed by the upper house for more than a year.
DEBATES	5257
Proceedings on Adjournment Motion
So, says Mr. Lesage, the government of which he is Premier will cause to be passed a measure in the lower house abolishing the upper house. Then, if the upper house refuses to agree, a year later the lower house will pass the measure again and, ipso facto, the upper house goes.
If this is being done in Quebec on the basis of action taken by this government in Ottawa in sending the matter on to Westminster, it would suggest a course which might be taken to get rid of the upper house in the parliament of Canada. I suggest it follows. If it can be done there, in that way, in Quebec, it could be done in the same way here. We could pass a resolution in the lower house of parliament asking that the powers of the upper house be curbed so that it cannot veto a measure from this house for more than one year. Then we could ask the government, without going to the upper house for approval, to send that resolution to Westminster.
[DOT] (10:10 p.m.)
We would thus be asking Westminster to amend our constitution. Then a year or so later, the power of the other house having been curbed, we could pass a bill in this house abolishing the other place, and a year later that would be the end of the Senate.
I want to say categorically that as a lifelong abolitionist so far as the Senate is concerned, I would not do it that way. I think it is a devious way to deal with the matter, and I would do it more directly; but this is the position that the government has helped to create. The government supported the proposition of sending a resolution from one house in Quebec to Westminster, even though the other house did not approve it.
Now we have Mr. Lesage putting everybody in a difficult position, and most of all putting Westminster in a difficult position. The tradition at Westminster is to approve without question requests for amending our constitution, and their hope is that we will not send them requests of this kind many more times. But when Westminster is told in very plain language that this present amendment of the constitution is going to be used for a purpose that was not stated when the amendment was sought, it will put the British government and the British parliament in a rather awkward position.
This was one of the reasons I asked this question this afternoon, namely that the government should be making a statement on this matter. Either the government should
May 17. 1966

Proceedings on Adjournment Motion admit that it has helped to work out a simple formula for abolishing an upper house-and if it works for Quebec it should work for this parliament-or it should take another look at what it has gone along with in sending, by executive action, approval of Mr. Lesage's request for an amendment to the B.N.A. Act, even though we in this parliament had no chance to vote for it.
I realize, Mr. Speaker, that there is a bit of a mixture in the things I am talking about. I take my stand with Premier Lesage, that democracies should be run by members who are elected. There is no place for appointed upper houses, either in Quebec or here, and some day we shall be rid of them; but I do think we have to look at the niceties of constitutional procedure, and I would be interested in knowing what the comment of the government is on this very interesting development.


Mr, John R. Matheson (Parliamentary Secretary to Prime Minister):: Mr. Speaker, we have just heard from a member of this house who has served long and in an illustrious manner, and who has spoken many times on the form and function of parliament. But I would remind hon. members, before we talk in terms of destroying a constituent part of parliament, that there was much reason and logic to the creation of this particular institution, the Senate, by the founding fathers.
This evening I spent some time reading the address given by the then Attorney General, John A. Macdonald, on February 6, 1865, in the parliamentary debates on the subject of the confederation of the British North American provinces. One cannot read this lengthy address by this constitutional authority of the day without appreciating that many of the problems facing the colonies of those days still continue to exist in Canada.
Actually, though my experience in this house is very limited in comparison with that of the hon. member for Winnipeg North Centre (Mr. Knowles), I remember vividly the year 1961 when on two occasions, in the case of class and kind legislation and in the Coyne affair, many Canadians were grateful for the existence of the other place. Sir, economic life today is governed by a mixture of private decisions taken in the corporate sector of the economy and of public decisions taken by governments, with the latter constantly assuming greater importance.
I do not think there is any argument that in the post-war years there has been a profound change in distribution of income and in economic organization, and this is to the good. But to do this soundly and well there have to be certain constitutional safeguards. It is a fact that government action brings more and more aspects of life and affairs within its orbit. Perhaps one can even say that the citizen is progressively stripped of effective influence on certain directions of government. Perhaps it is the Senate in certain particulars which becomes the great safeguard of the liberties of the public. I think of some of the persons presently holding seats in the other place whose wisdom, judgment and experience in matters of civil liberties and in matters of welfare and economic change are significant and important to the future growth and well-being of this country.


Mr. Deputy Speaker:: Order, please. The time allotted to the hon. gentleman has expired.


Stanley Howard Knowles: The Senate is saved by the bell.
Motion agreed to and the house adjourned at 10.20 p.m.

Wednesday. May 18, 1986