1966-05-16

['On division.']
Mr. Ron Basford (Vancouver-Burrard):: Mr. Speaker, I have just been advised by the chairman of the broadcasting committee that he is ill. Therefore I ask leave of the house to present in his name the motion for concurrence in the seventh report of the standing committee on broadcasting, films and assistance to the arts.


Mr. Speaker:: Does the hon. member have leave to make the said motion on behalf of the chairman of the committee?


Some hon. Members:: Agreed.


Stanley Ronald Basford: that the seventh report of the standing committee on broadcasting, films and assistance to the arts, presented to the house on Friday, May 13, be concurred in.


[Stage Direction]
Motion agreed to.
['that the seventh report of the standing committee on broadcasting, films and assistance to the arts, presented to the house on Friday, May 13, be concurred in.']
Stanley Ronald Basford: Mr. Speaker, I apologize for this procedure; I heard about this illness only 60 seconds ago.
[DOT] (2:40 p.m.)



Mr. Jean-Eudes Dube (Resligouche-Mada-waska) moved:: That the first report of the standing committee on external affairs, presented to the house on Thursday, May 5, 1966, be now concurred in.


Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, for the reasons set out previously, we object to concurrence in this report that the 13-member quorum be cut to 10. Out of a total of 25 we believe that the house should be able to find 13 members who will make it their duty and pleasure to attend the sittings of the committee on external affairs.
If there are not 13 who are ready to attend those sittings out of the 25 designated on that
committee, I believe those who are not interested in being on the committee should be replaced.
I know the reduction of the quorum has been accepted for other committees, but in my opinion, it is time to find another solution to allow this committee to perform its work, instead of reducing its quorum.
We have already made suggestions. We see that the government did not deem it advisable to take note thereof and to make the necessary changes. Therefore, I would like to move an amendment to the motion presented by the chairman of the committee on external affairs.
I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That the report be referred back to the committee with a view to amending the proposal and to suggesting that a substitute be appointed for each of the members of this committee.
This is a simple proposal, Mr. Speaker. There would still be 25 members on the committee, but each member would be assisted by a substitute. If a member of the committee cannot attend the sittings of the said committee, either because he is prevented from doing so or because he is not interested, then there will be a substitute to replace him, and this will make it easier to get the required quorum of 13.
I should like to move this amendment to the effect that the report be returned to the committee on external affairs so that the latter may suggest to the house the proposal just submitted, namely the appointment of a substitute for every committee member. The substitute would not automatically be a member of the committee, but would replace ipso facto by right the committee member absent for some reason or other.
In my opinion that is a reasonable proposal. I fail to see how the government or a member of the house could object to the appointment of a substitute, so that the quorum may be maintained at 13 and the work carried out effectively.


Mr. Speaker:: I make certain reservations as to the admissibility of this amendment and I would gladly hear the comments some hon. members would care to make in this connection.

May 16, 1966
Control of Drug LSD


Hon. G. J. Mcllrailh (Minister of Public Works):: I wonder, Mr. Speaker, if you would consider taking the matter under consideration until another day, so we would not necessarily take up the time of the house in discussing the matter at this moment.


Mr. Speaker:: If any hon. member is ready to comment immediately on whether this amendment is out of order or not, I shall give a ruling now.


Gilles Grégoire: Mr. Speaker, we are willing to accept what the hon. leader of the opposition has suggested, that is, that your ruling be postponed for a day to give you time to take the matter into consideration; we will probably find a solution to the problem of the quorum of the various committees.


Mr. Speaker:: Unless I am given a better reason for postponing my decision, I am ready to give a ruling now. It seems quite obvious to me that the amendment of the hon. member for Lapointe is out of order because, in my opinion, it covers more than the terms of reference of the committee in question.
That being the case, I do not believe the amendment can be accepted.
Is the house ready for the question?

Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.


Mr. Knowles:: On division.


Gilles Grégoire: On division.


[Stage Direction]
Motion agreed to, on division.


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, in view of the increasing publicity being given to the drug lysergic acid diethylamide, commonly called LSD, I thought it might be appropriate to present a short statement to the house outlining the consideration which is being given to this problem.
The drug in question comes within the category of hallucinogenic drugs which are

being used on an investigational basis in psychiatry. In 1963 the sale and distribution of this drug was prohibited except for small quantities provided by the manufacturer of the drug to institutions approved by the minister for clinical investigation and research.
I would also like to say that there is only one manufacturer of this drug in Canada, and there has been no suggestion that any of the supplies of this drug which have appeared in the illicit underworld market are connected in any way with this company.
It appears that LSD is being smuggled into Canada for illegal sale. In prohibiting the sale of the drug except under the conditions I have mentioned, there was not at that time any thought that the drug would lend itself to illicit trafficking. Developments, however, in recent months have unfortunately shown a growing interest in the drug by persons not under medical care.
The hallucinogenic effects of this drug have received wide publicity, giving the impression that such effects are intensely pleasurable and not in any way harmful to the individual. This is not so. Indeed, this is a highly potent drug, and cases of psychotic breakdown have been reported following its use.
I can assure hon. members that the Royal Canadian Mounted Police, who are concerned with this problem, are doing their best to eliminate illicit supplies and we have under consideration, in consultation with that force, special measures which will permit more effective control of LSD than is possible under existing legislation.
While I have indicated to members something of our concern over the illicit use of this drug, I would not wish to give any impression that such use is general in Canada, but there is some evidence that it is increasing. It is being used by individuals who choose to experiment with the drug for its special effects without full knowledge of the dangers which could result.
Mr. Speaker, I wished to make this brief statement to the house to indicate that the problem is one which we are actively considering with a view to adopting such measures as will be necessary to deal not only with the illicit traffic in this drug but its illegal possession.


Hon. J. W. Monteifh (Perth):: Mr. Speaker, I should just like to commend the minister for making a statement upon this drug at this time. I recall that some years ago, when I
May 16, 1966

had the privilege and honour of heading the department of which he is now minister, this drug was brought to our attention as being highly dangerous and leaving dangerous effects.
[DOT] (2:50 p.m.)
The hallucinations it causes were of some attraction to certain people, but I thought we had it under control. I realize that in recent years illicit traffic has developed. The minister has mentioned that the R.C.M.P. are endeavouring to prohibit the smuggling of LSD into Canada, and I think the control of its production under one manufacturer does give complete control through all legal channels.
I appreciate that the minister is faced with a problem, but on hearing his statement I am happy to realize that his department is on top of the matter and is using all its energies to control the situation.


Mr. William Dean Howe (Hamilton South):: Mr. Speaker, the minister's statement on LSD covers the fact that this is a problem, but so far as I can see does not outline specifically what can be done to solve what could be a rather serious difficulty.
What we are interested in are the methods to be used in controlling it. Food and drug regulations cover this to a certain extent by powers given to the minister in regard to its distribution and manufacture. The drug has a tremendous potential for medical research and should not be curbed in this respect. However, the real danger of this drug lies not in the control of its lawful manufacture and importation but the ease with which it can be made by amateurs and made available to younger people for the production of kicks. It is ignorance of this kind in younger people that produces the actual danger.
Therefore I feel the secret of control is in the education of all Canadians as to its uses, values and dangers, more particularly its dangers. Let us not wait until it is too late to do something, but let us do something now in a preventive way before we have to face a dire catastrophe.



VOCATIONAL AND TECHNICAL TRAINING


Hon. Jean Marchand (Minister of Citizenship and Immigration) moved: that the house go into committee at the next sitting to
Questions
consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure respecting allowances to persons being trained under technical and vocational training programs, and to authorize the entering into agreements with the provinces in connection therewith: and to provide further for certain changes incidental thereto in connection with the administration of the Unemployment Insurance Act.


[Stage Direction]
Motion agreed to.

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

Mr. McCleave: 1.	Has the government, or any department thereof, or the Central Mortgage and Housing Corporation, received Resolution 17, passed at the 22nd national convention of the Y.W.C.A. of Canada, concerning the need for adequate recreation space in many public housing developments?
2.	If so, is consideration being given to the resolution and has any policy been formulated to implement the resolution?


Hon. Judy V. LaMarsh (Secreiary of State):: 1.	No.
2.	See 1 above. However, in the development of multiple unit projects arrangements are made, where possible, for the provision of open areas with recreation facilities for the use of children. Public housing projects should not be expected to bear the costs of providing community recreational facilities. Such projects should be integrated with the neighbourhood and share municipal recreational and park facilities.


RAILWAY ACCIDENTS
Mr. Forresiall: 1.	In each of the years 1960 to 1965, what were the number of accidents, province by province, involving trains, both freight and passenger, on (a) all C.P.R. lines (b) all C.N.R. lines?
2.	What loss of life was incurred in each of these accidents?
3.	What is the dollar cost for repairs to both trains and roadbeds resulting from these accidents and to other public and private property?
4.	What was the cause of each accident?

May 16. 1966
Questions


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: The Board of Transport Commissioners for Canada advise as follows:
1.	Statistics regarding accidents reportable to the Board in accordance with section 288 of the Railway Act (except statistics regarding highway crossing accidents) are not maintained on a provincial basis. However, there is a statement included in the annual report of the board which shows the number of accidents, the number of persons killed and injured on the Canadian National Railways, Canadian Pacific Railway Company and miscellaneous railways. These accidents are divided into different categories showing the number of accidents which occurred under various causes. These statistics are given in the board's annual report as follows: Annual report for 1960, Statement No. 3, Page 63; Annual report for 1961, Statement No. 3, Page 73; Annual report for 1962, Statement No 3, Page 73; Annual report for 1963, Statement No. 3, Page 73; Annual report for 1964, Statement No. 2, Page 71.
As stated above, statistics regarding highway crossing accidents are maintained on a provincial basis. This information is included in the annual reports of the board as follows: Annual report for 1960, Statements 4 and 5, Page 65; Annual report for 1961, Statements 4 and 5, Page 75; Annual report for 1962, Statements 4 and 5, Page 75; Annual report for 1963, Statements 4 and 5, Page 75; Annual report for 1964, Statements 3 and 4, Page 74.
2.	See answer to 1.
3.	This information is not available in the board's records.
4.	See answer to 1.


PERSONS SERVING COMMUTED DEATH SENTENCES
Mr. Bell (Carleion): 1.	Referring to the table and supplementary table appearing as Appendix "D" to the white paper on capital punishment dated June 14, 1965, of the persons sentenced to death since 1920 whose sentence was commuted, how many, tabulated according to year of conviction as shown on said tables (a) are still imprisoned and have been continuously imprisoned since commutation (b) were released from imprisonment but returned thereto for breach of parole or other reason, and are now imprisoned (c) are now free from imprisonment (d) died in prison?

2.	Of the persons referred to in part 1(c), what term of years was served before release from imprisonment, this information being assembled so far as may be practical into a table showing the number of convicted persons released after particular periods of imprisonment?
3.	Since the coming into force of chapter 44 of the statutes of 1960-61 have any persons convicted of (a) non-capital murder (b) capital murder. whose sentences were commuted, been released from imprisonment and, if so, how many in each category and what was the term of imprisonment served by each releasee in each category?


Hon. L. T. Pennell (Solicitor General):: 1. (a)
The following is a list tabulated according to year of conviction of those inmates who were convicted of murder, and whose sentences were commuted to life imprisonment and who are still imprisoned, and have been continuously imprisoned since their sentences were commuted: 1922, 1; 1924, 4; 1931, 1; 1932, 1; 1933, 1; 1934, 1; 1936, 1; 1938, 1; 1940, 1; 1946, 2; 1950, 3; 1951, 1; 1952, 1; 1953, 5; 1954, 1; 1955, 5; 1956, 2; 1957, 4; 1958, 10; 1959, 11; 1960, 5; 1961, 11; 1962, 3; 1963, 10; 1964, 8; 1965, 7; Total 101.
1.	(b) The following is a list tabulated as to year of conviction of men who were convicted of murder and whose sentences were commuted to life imprisonment, who were released on parole, and whose paroles were revoked, and they were returned to prison. The list shows the year of conviction, the time served when parole was granted, the year in which each was paroled and the year in which each parole was revoked.
Year	Time served	Year	Yearsentenced years	paroled	revoked1920	10	1930	19321940	17	1957	19581943	12	1955	19591946	16	1962	1964The first	of these men	who was	convicted1920, and	revoked in	1932, was	reparoled
1949, and his parole was revoked again in 1962.
The second man was convicted in 1940, and he was revoked in 1958; he was reparoled in 1960 and his parole was revoked a second time in 1962.
Therefore, the answer to question 1(b) is that four men, as mentioned above, were released from imprisonment and were returned thereto, and are now in prison. Besides this, five inmates who had been released on
May 16, 1966

parole had their paroles revoked and were subsequently reparoled.
1.	(c) The following is a list of the persons convicted of murder whose sentences were commuted to life imprisonment, who have been paroled, and are now free from imprisonment, tabulated according to the year of conviction:
Year	Now	Year	Nowsentenced 1. (c)	free	sentenced	free1912	1	1938	41914	2	1939	31915	1	1940	71916	2	1941	21917	2	1942	41918	2	1943	11919	1	1944	21920	5	1945	21922	2	1946	41923	1	1947	21924	3	1948	31925	4	1949	51926	1	1950	11927	2	1952	11928	2	1953	41929	2	1954	21930	1	1955	21931	2	1956	41933	2	1958	11934	1	1959	11935	2	1936	3	1937 Total now	4 free: 103.	1.	(d) The following list shows the numberof men who were sentenced to death, and whose sentences were commuted to life imprisonment, who	died	in	prison, tabulatedas to year of	conviction:	1920,	1;	1921,	1;1922, 1; 1923,	1;	1926,	1;	1927,	1;	1932,	1;1938, 1; 1944,	2;	1946,	1;	1956,	1;	1958,	1;
1960, 1; 1962, 1; Total 15.
2.	The following is a list that shows the number of persons released on parole, from a commuted sentence of death, and a breakdown of the number of years served by each person before being granted parole.
Questions
Years served	Inmates involved
1-2	0
3-4	2
5-6	3
6-8	9
9 - 10	17
11 - 12	12
13 - 14	18
15 - 16	23
17 - 18	11
19 - 20	4
21 - 22	3
23 - 24	0
25 - 26	1 103
3.	(a) The answer to this is: none.
3.	(b) The answer to this is: none.


CENTENNIAL YOUTH PARLIAMENT
Mr, Olson: 1.	What is the present status and situation respecting the proposed centennial youth parliament?
2.	Has there been any new and recent initiative taken to develop a viable program in regard to the centennial youth parliament?
3.	Does the government and the centennial commission support this project?


Julia Verlyn (Judy) LaMarsh: I,	2 and 3. See statement by the Secretary of State on page 4070 of Hansard for April 20, 1966 in reply to an inquiry as to organization of youth parliament by Mr. J. M. Forrestall.


CIVIL SERVICE COMPETITION 66-T-609
Mr. Loney: 1.	Was an application for Civil Service of Canada competition No. 66-T-609 received from Mr. Robert
J.	McEwan, IA Falcon Lane, Highland Creek, West-hill, Ontario?
2.	Was the applicant one of the successful candidates?
3.	If not, what were the reasons?


Julia Verlyn (Judy) LaMarsh: 1.	Yes.
2.	No.
3.	Competition 66-T-609 was open to residents whose nearest postal centre is Kincardine. Mr. McEwan, who lives in Westhill, Ontario, was therefore not eligible to compete.

May 16. 1966
Questions


CANADIAN BORN CHINESE VISITING U.S.
Mr. Howe (Hamilton: South):
Has the government received complaints or information concerning discrimination against natural-born Canadian citizens of Oriental extraction attempting to enter the United States as visitors and, if so, has the government considered any steps to facilitate the entry of such citizens?


Julia Verlyn (Judy) LaMarsh: I am informed by the Secretary of State for External Affairs as follows: The government is aware of one incident which occurred in early December 1965 at a United States port of entry on the Canadian border where a natural born Canadian citizen of Chinese extraction, seeking entry into the U.S. as a visitor, was reported to have met discriminatory treatment. At our request an investigation of this incident was conducted and revealed that in this instance a misunderstanding appears to have arisen with respect to the procedure followed by a customs officer acting on behalf of an immigration officer.
The government took this opportunity to discuss the relevant U.S immigration regulations with the United States authorities and obtained from them confirmation that under present US immigration laws the norms for admissibility of non-immigrants are applied equally to all Canadians regardless of their racial origin


APPLICATIONS FOR RESEARCH GRANTS
[Stage Direction]
Question No. 1,216-Mr. Orlikow: Supplementary
Has the Department of National Health and Welfare received any applications for grants to finance research projects and, if so (a) how many in each of the past three years (b) what was their total dollar value (c) how many were approved in full (d) how many were approved in part only (e) how many were refused, and in each case, for what reason or reasons?
Hon. A. J. MacEachen (Minister of National
Health	and Welfare):	Yes.	1963-64	1964-	-65	1965-66(a)	13	19	20<b)	$ 137,789	$ 251,	380	$ 285,553(c)	7	4	9<d)	1	9	3(e)	5	6	8[Miss	LaMarsh. 1	
Research projects do not receive approval, as submitted under the national welfare grants, when they exceed the funds allocated for this purpose or when they are considered by appraisers, consultants and the advisory committee to be poorly designed or unsound research.

Mr. Woolliams: How much money has been spent by the federal government toward scientific research in Canada for each of the years 1956 to 1966, inclusive?


Hon. E. J. Benson (Minister of National Revenue):: The following table gives gross expenditures by the federal government for research and development and scientific activities both in house and extramural:
Year	In millions
1955-56	172.1
1956-57	194.4
1957-58	195.7
1958-59	222.6
1959-60	212.3
1960-61	228.8
1961-62	258.9
1962-63	255.7
1963-64	296.6
1964-65	333.6
1965-66	360.0 (estimated)
The source of data for the years 1956-58 is the Glassco report. Data for years 1958-63 is from D.B.S. biennial reports. Data for 196466 is from information supplied by departments and agencies to D.B.S. for compilation.


ENAMEL AND HEATING NEGOTIATIONS
Mr. Coates: Were officials of the Department of Industry, or the Department of Defence Production, involved in the contract negotiations between Enamel and Heating Products Limited and Douglas Aircraft with regard to an aircraft contract and, if so (a) what was the involvement (b) what was the result of the negotiations?


Hon. C. M. Drury (Minister of Industry):: At the request of both companies officials of the Department of Industry have been involved in bid negotiations between Enamel and Heating Products Limited and the Douglas Aircraft Company with respect to the possible manufacture, under sub-contract, of certain component parts for the Douglas DC-9 short range jet aircraft, (a) The involvement has
May 16, 1966

been to assist in bringing the two parties together and in the review of data required in Enamel and Heating Products' proposal to the Douglas Aircraft Company, (b) The result of the bid negotiations is that Douglas, after considerable review, finally decided on 28 April not to subcontract the work under consideration to Enamel and Heating Products.


ENAMEL AND HEATING CONTRACTS WITH CANADAIR
Mr. Coales: 1.	What contracts, or sub-contracts, have Enamel and Heating Products Limited received for the present fiscal year from Canadair Limited?
2.	What is the man-hour content of the contracts, or sub-contracts, and what aircraft are involved in the contracts in question?
3.	What is the estimated expenditure involved in these contracts and/or sub-contracts?


Charles Mills (Bud) Drury: In so far as the Department of Defence Production is concerned: 1. Canadair Limited has not issued any contracts to Enamel and Heating Products Limited during the present fiscal year, but one contract is presently being processed.
2.	Although the current work content of the contract is being processed at an interim figure of 5,000 man hours, it is estimated that the eventual total work content of this contract will be approximately 35,000 man hours during the present fiscal year. It is also anticipated that additional minor spares manufacturing contracts will be issued with an estimated work content of approximately
7,000	man hours.
The estimated work packages referred to above are for components for Argus, CF-104 and T-33 aircraft being processed at Canadair Limited.
3.	The estimated expenditure of all contracts and/or subcontracts to be issued by Canadair Limited to Enamel and Heating Products Limited will be approximately $230,000.


FOREIGN LOANS
Mr. Godin: During the last five years, has the Government of Canada contracted loans with any foreign countries and, if so, for each such loan (a) from what country was the money borrowed (b) what was the total amount (c) what is the interest rate (d) what is the due payment date?
Questions


Hon. Mitchell Sharp (Minister of Finance):: In June, 1962, the government of Canada contracted a line of credit of $400 million with the Export-Import Bank of Washington, an agency of the United States of America. The line was not used and it was reduced to $250 million in mid-September and terminated on January 3, 1963. The government paid a commitment fee of \ of 1 per cent per annum on the amount of the line of credit. No other loans have been contracted by the government of Canada with the governments of foreign countries during the last five years.


DEBTS OWED U.S. AND U.K.
Mr. Godin: 1.	Does Canada owe any sums (a) to the United States (b) to England?
2.	If so (a) how much (b) at what interest rate was each amount contracted (c) when is the payment due (d) as of the due date, what is the amount the government expects to have paid on each of these outstanding loans?


Mitchell William Sharp: 1.	The government of Canada does not owe any sums to the government of the United States or the government of the United Kingdom.
2.	Not applicable.


EXPO '67-OPENING AND DEFICIT
Mr. Coates: 1.	Will Expo '67 be in a position to open as scheduled on April 28, 1967, with all projects at present planned fully completed?
2.	What is the present anticipated deficit that has been agreed upon by the governments concerned?
3.	Have any projects originally planned been cancelled or substantially reduced in size and, if so (a) what are these projects (b) what was the original estimated cost of each (c) what is the present estimated cost of each?
4.	On what date will the estimates of the Department of Trade and Commerce involved in expenditures of Expo *67 be available for consideration by the standing committee on finance, trade and economic affairs?


Mr. Jean-Charles Cantin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. It is anticipated that Expo '67 will open as scheduled with all projects at present planned fully completed.
2.	82.7 millions.

May 16. 1966
Questions
3.	Cancelled or reduced projects of CCWE:
Original Current Project	Estimate Estimate
(a)	Heating & Cooling
Plants	$1,300,000	-
Remarks: Original plans called for the construction of plants to produce and sell steam and chilled water to all buildings. Feasibility studies indicated poor economic returns and the project was cancelled in 1964.
(b)	Habitat '67	$45,000,000	$15,000,710
Remarks: As a result of the feasibility
studies, the project was reduced from 968 units to 158 units.
expected that the "current estimate" will be reduced by re-sale.
4.	The Standing Committee on Finance, Trade and Economic Affairs is expected to begin its consideration of the estimates of the Department of Trade and Commerce on Tuesday, May 17, 1966. It is the Minister's intention to extend an invitation to the Committee to visit the site of Expo '67 and to meet with officials of the Corporation in Montreal.
[English1


GOVERNMENT DEBT TO CHARTERED BANKS
Mr. Godin: (c)	Expo Theatres $7,000,000	$2,570,000
Remarks:	Due to the lack of suitable
theatres in Montreal, CCWE proposed to construct two permanent theatres of 1,800 seats and 400 seats respectively. The city of Montreal later agreed to proceed with the completion of Place des Arts and the CCWE program was reduced to a 2,000 seat temporary theatre.
Is any money owed by the Government of Canada to the Canadian chartered banks and, if so (a) to what banks is it due (b) what is the amount owing in each case (c) what is the percentage of interest charged to the government?


Mitchell William Sharp: The government of Canada does not owe any money to Canadian chartered banks as a result of direct borrowing. These banks do
(d) Telecanape	$ 860,000	$ 200,000 however, hold large amounts of government
Remarks:	A transportation system pur- of Canada marketable securities. Holdings by
chased but not now required due to the can- banks as at the end of March 1966 are as cellation of the Paris-Montreal tower. It is follows, (in thousands of dollars):
Name of bank	Government of Canada treasury bills, at amortized value	Other government of Canada direct and guaranteed securities maturing within two years, at amortized value	Government of Canada direct and guaranteed securities maturing after two years, at amortized value	Total$	$	$	$1.	Bank of Montreal	256,624	212,201	295,245	764,0702.	The Bank of Nova Scotia	141,964	63,120	172,620	377,7043.	The Toronto-Dominion Bank	162,670	90,745	142,149	395,5644.	The Provincial Bank of Canada	35,264	10,494	31,945	77,7035.	Canadian Imperial Bank of Commerce	321,023	329,138	364,237	1,014,3986	The Royal Bank of Canada	383,027	203,284	343,573	929,8847.	Banque Canadienne Nationale	73,520	29,164	82,437	185,1218.	The Mercantile Bank of Canada	3,444	5,038	5,683	14,165Total	1,377,536	943,184	1,437,889	3,758,609
Source: Chartered banks of Canada. State- 1966. Supplement to the Canada Gazette, ment of assets and liabilities as at March 31, April 30, 1966.

May 16, 1S66


STORAGE OF DEFENCE PRODUCTION EQUIPMENT
Mr. Godin: 1.	How many units of the following unused equipment are stored in the warehouses of the Department of Defence Production (a) underwear (b) towels (c) linen (d) shirts (e) trousers (f) shoes <e) stockings (h) wooden ladders (i) aluminum ladders?
2.	For each of the abovementioned number of Items, (a) how much did the government spend for manufacturing or buying these items (b) were they manufactured in Canada or abroad?


Charles Mills (Bud) Drury: In so far as the Department of Defence Production is concerned:
Warehousing and Distribution Branch
1.	(a) Nil; (b) Nil; (c) Nil; (d) 483; (e) 32 prs.;
(f)	Nil; (g) Nil; (h) Nil; (i) 101.
2.	(a) Purchase price: Item 1(d) 206 at $3.50 each and 277 at $3.55 each; Item 1(e) $11.95 each; Item l(i) Ranging in price from $10.80 for 5' Step Ladder to $65.00 for 14' Step Ladder.
(b) All items Canadian manufactured.
Note: The above mentioned items have been transferred from the Department of Public Works to the No. 1 Canadian Government Supply Centre and will be reissued to that Department on request.
Emergency Supply Planning Branch
1. None. However, the following list of new and reconditioned clothing stores, some of which were purchased over 20 years ago, were declared surplus by DND and it was proposed to ask Crown Assets Disposal Corporation to dispose of them. After inspection of the items it was decided that they could be valuable for use by the Emergency Welfare Services of the Department of National Health and Welfare in case of national emergencies.
Consequently, it was arranged that the goods be transferred to ESPB but to remain stored in DND Warehouses throughout the country and the Department of Defence Production to pay warehouse charges. A percentage of the clothing stores has already been transferred and arrangements for responsibility for the balance are being made.
An effective working arrangement has been completed between DND, DDP, and the Emergency Welfare Services of the Department of National Health and Welfare, whereby regional Emergency Welfare Services representatives may call for the provision of such
Questions
clothing stocks to meet a local disaster situation where such material is required and not quickly obtainable from other sources.
(a)	703,051 units; (b) nil; (c) nil; (d) 116,121 units; (e) 226,909 pairs; (f) 104,853 pairs;
(g)	110,366 pairs; (h) nil; (i) nil.
2. (a) The following are average prices for each item, (a) $3.50 per unit; (b) N/A; (c) N/A; (d) $3 per unit; (e) $5.90 per pair; (f) $3.70 per pair; (g) 85 cents per pair;
(h)	N/A; (i) N/A.
(b) All items Canadian manufactured.


'WINTER WORKS PROGRAM, 1966-67
Mr. Irvine: Has the government received a petition from the council of the corporation of the city of London asking for an advance announcement of a winter works program for the 1966-67 season, to be established early, in connection with centennial year projects and, if so, what action will the government take regarding this matter?


Jean Marchand: Mr. Speaker, the answer to the first part of the question is yes.
The answer to the second part is as follows. The operation of the municipal winter works incentive program is always considered on a year to year basis. An announcement concerning a 1966-67 program will be made as soon as possible.


RETRAINING COURSES FOR UNEMPLOYED
Mr. Dinsdale: 1.	How many unemployed Canadians took retraining courses in (a) 1963-64 (b) 1964-65 (c) 1965-66?
2.	How many completed the course in each of the aforementioned fiscal years?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Citizenship and Immigration):: 1. Number of unemployed Canadians who took retraining courses in: (a) 1963-64, 48,923;
(b)	1964-65, 59,840; (c) 1965-66, 79,623.*
2. Number who completed courses in: (a) 1963-64, 18,081;	(b)	1964-65, 20,917; (c)
1965-66, 33,199.*
* Preliminary figures are shown for 196566; final figures will be available about May 31, 1966.

May 16, 1966
Questions


ARMED FORCES RECRUITING CAMPAIGN
Mr. Howe (Hamilton: South):
1.	Has the government initiated an armed forces recruiting campaign on television or by any other media and, if so, what will be the duration of this campaign?
2.	What is the anticipated cost to the government of this campaign?


Hon. Leo Cadieux (Associate Minister of National Defence):: 1. Recruiting advertising runs periodically throughout the fiscal year. All media are used including television, radio, newspapers, etc.
2. $817,000 is in the 1966-67 estimates for advertising.


OLD AGE SECURITY FUND
Mr. Winkler: What was the balance on account in the federal old age security fund as of December 31, 1965?


Mitchell William Sharp: The balance at the credit of the old age security fund as at December 31, 1965, was $139,974,933.15.


ADVISORY COUNCIL, COMPANY OF YOUNG CANADIANS
Mrs. Maclnnis (Vancouver- Kingsway): 1.	Did the government invite any women to serve on the 18-member provisional advisory council of the company of young Canadians?
2.	If so (a) how many (b) who were they (c) did any of these refuse to serve and, if so, what was the reason of each for refusing?
3.	What were the qualifications considered necessary for members of the provisional advisory council?


Mr. John R. Matheson (Parliamentary Secretary to Prime Minister):: 1. Yes.
2.	Other persons were approached and found themselves unable to accept. It would be a breach of confidence to make public either their names or the reasons which prevented them from accepting the invitation.
3.	It was considered desirable that members have been actively engaged in the youth community. Other factors considered were related experience, age, cultural and regional representation.


WHARF AND HARBOUR IMPROVEMENTS, LES MECHINS, QUE.
Mr. Keays: 1. Were there any wharf or harbour improvements executed at Les Mechins in 1965?

2.	If so, were they undertaken by contract, day labour or otherwise?
3.	If by contract, who were the bidders and who was awarded the contracts?
4.	If by day labour or otherwise, who were the foremen in charge?
5.	What amounts were paid for labour?
6.	What amounts were paid for material?
7.	Who sold the materials required for the jobs?
8.	What was the total amount spent on the jobs?


George James McIlraith: 1. Yes, wharf repairs.
2.	By contract.
3.	The bidders were: Charles Verreault, Boromee Verreault, Florian Pelletier. Contract awarded to Charles Verreault.
4.	Department of Public Works inspector, Emilien Bernier.
5.	6 and 7. Not known. This is the responsibility of the contractor.
8. $3,909 for contract work and $296.30 for inspection cost.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Forreslall: 1.	What is the present square footage of administrative space, other than for the Department of National Defence, at present in use in the city of Halifax, city of Dartmouth, and the county of Halifax, by the several departments and agencies of the government of Canada?
2.	What portion is under lease to the Crown?
3.	What portion is in Crown-owned space?
4.	What is the highest rate being paid for leased or rented space with normal services?
5.	What is the lowest rate for leased or rented space with normal services?
6.	What plans are in motion to increase this space?
7.	From what firms or individuals is space leased and what is the location?
Return tabled.


COMMEMORATION OF PRIME MINISTERS
Mr. McCleave: 1.	Which prime ministers of Canada are commemorated by having their names used for federal parks, public buildings, structures, edifices, highways, museums or other works of a federal public nature?
2.	Who are the prime ministers so honoured, and to which of the above are their names given?
Return tabled.
May 16. 1966


RAILWAY STATISTICS
Mr. Gregoire: 1.	What is the total number of miles of track owned in each of the provinces of Canada by (a) the Canadian National Railways (b) the Canadian Pacific Railway?
2.	What investments have been made by the government in each province for railway transportation. with regard to (a) the Canadian National Railways (b) the Canadian Pacific Railway?
3.	What is the volume, and also the value, of the merchandise transported by rail in each province during the last 10 years?
4.	In the province of Quebec (a) what capital investments have been made by the federal government for railway transportation (b) what is the total number of miles of track in each economic area?
Return tabled.


FEDERAL RIDINGS IN QUEBEC
Mr. Langlois (Megantic): What is the population and the area of each federal riding in the province of Quebec?
Return tabled.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Labour in connection with the longshoremen's strike on the St. Lawrence and the calamitous potentialities of that strike. Has the minister received a suggestion that he should intervene personally; what has he done in that connection, and what are the hopes for a settlement before the results reach the point where they can only be detrimental not only to the export trade in general but to wheat deliveries in particular?


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, the minister has received more than one suggestion that he might intervene. I might say that I, as minister, was very disturbed to learn on Friday that one of the parties to the conciliation proceedings which opened on Thursday had withdrawn from the negotiating table on the ground, which they put forward, that the strike was a wildcat strike and therefore illegal.
Personally, after discussion with my officers and some of my colleagues, I feel this is a most unfortunate development. The chairman of the conciliation board let it be known that
Inquiries of the Ministry the board would sit again today at 2.30 p.m. or shortly thereafter. I am still awaiting a report as to what I hope might have happened this afternoon, at 2.30. The minister is quite prepared to take his part in the negotiations if he feels that is necessary or desirable. I am hopeful that reason will prevail at today's meeting, in view of telegrams from representatives not only of the federation but of the unions concerned, and that they will get down to brass tacks later today.


John George Diefenbaker: Mr. Speaker, I assume that the one party to which the minister has referred is the shipowners or employers. Has he communicated with them, and does he have any assurance that when Mr. Justice Prevost meets this afternoon as conciliator they will be present? What pressure or suggestion has been exerted by the minister or his officials on the employers or shipowners to get them to view this as a national matter rather than one which only affects them?


John Robert (Jack) Nicholson: Mr. Speaker, at the risk of giving a prolonged answer perhaps I might read a copy of the telegram I sent to the shipowners on Friday evening. It was sent to the president of the shipping federation, and reads as follows:
It would appear that by the time I had an opportunity to consider your telegram today you had already advised the board of conciliation that you could not proceed with its hearings until the longshoremen obeyed the law and returned to work. I regret very much that the position of your federation may have the effect of preventing the critical negotiations before the board that are essential to a settlement of the dispute. Would urge that you facilitate arrangements for the conciliation board to meet over Saturday and Sunday, which are non-working days, without prejudice to your position on Monday. It is in the national interest as well as that of the members of your shipping federation that every effort be made to settle this dispute at the earliest time.
I am still waiting to find out what reaction there may have been when the conciliation board resumes this afternoon.


John George Diefenbaker: Mr. Speaker, would the minister put on record the telegram he received and to which he made reference?


John Robert (Jack) Nicholson: I will be very glad to table the telegrams, Mr. Speaker.


Mr. Speaker:: Is that suggestion agreeable?


Some hon. Members:: Agreed.


Mr. Reynold Rapp (Humboldf-Melfort-Tisdale):: Mr. Speaker, I should like to direct
May 16. 1966

Inquiries of the Ministry a supplementary question to the Minister of Finance under whose jurisdiction the operations of the Canadian wheat board fall. Has he made representations to the Minister of Labour on behalf of the farmers of Canada, urging him to do everything possible to settle this dispute so that Canadian grain can reach its destination before the end of the crop year?


Mitchell William Sharp: Mr. Speaker, I am quite sure the Minister of Labour is as sensitive to the needs of the western farmers as any member of this house.


John Robert (Jack) Nicholson: Mr. Speaker, I rise on a question of privilege. A few moments ago I stated that I hoped the conciliation board which is working on the problems involved in the waterfront strike in Montreal would be sitting at about 2.30 this afternoon. I have just been advised that the meeting will be held at 4.30 because the learned jurist, who was good enough to accept this responsible appointment on short notice, had a commitment in the courts at 2.30 which had to be dealt with at that time. He has been working on this problem and was prepared to work over the week end. In any event, the conciliation board will reconvene at about 4.30 rather than at about 2.30 this afternoon.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Hon. Michael Siarr (Ontario):: Mr. Speaker, I have a supplementary or related question I should like to direct to the Minister of Labour. Has he received any protests from the longshoremen on the west coast, who are on strike, in respect of the actions of the R.C.M.P.; and will the minister tell us what role is being played by the R.C.M.P. in this dispute?


John Robert (Jack) Nicholson: Yes, Mr. Speaker. I am not sure, however, whether the minister received the messages to which the hon. member for Ontario has referred in his capacity as Minister of Labour or as the member of parliament for a Vancouver riding.
As most members of this house know, although a great many people in Canada do not, except in the major cities, in western Canada police work is done by the R.C.M.P., but the police work in the large municipality

of Burnaby, which has a population of something over 100,000, is done under contract by the R.C.M.P., so that in effect the force is the local police force in that community. When disturbances arose it was only to be expected that the authorities would turn to that force for law enforcement and that is what has happened in British Columbia.
I was pleased to learn this morning that the attorney general of British Columbia has taken a special interest in the efforts to reach a settlement of this dispute in Burnaby. It has been a most unfortunate one resulting in far too much violence. In any event, the R.C.M.P. has been doing its duty as the local police force rather than as a national one. I thank the hon. member for his question because it has given me an opportunity to explain this to the people of Canada.



HOCKEY-RELATIONSHIP BETWEEN PROFESSIONAL AND AMATEUR LEAGUES

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Koofenay West):: Mr. Speaker, as an old sporting man I wish to address a question to the Minister of National Health and Welfare. In view of the national interest in professional and amateur hockey, has the minister any information to give the house in respect of the proposed study of the relationship between professional and amateur leagues, which is reported as being undertaken by a committee of the fitness council?


Mr. Speaker:: Order, please. I doubt very much whether this question is of an urgent nature, and with respect I suggest the hon. member might place it on the order paper.


Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, I rise on a question of privilege in relation to the subject of fitness and sport, and draw the attention of hon. members of this house to the fact that the University of British Columbia rugby team, which is presently touring eastern Canada, is at this time in the gallery.


Some hon. Members:: Hear, hear.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I have a question for the Associate
May 16, 1966	COMMONS
Minister of National Defence. It concerns the refusal of the Canadian armed forces to grant an exemption of one year to the president of the "Union Generate des Etudiants du Quebec", which would have postponed for one year his enlistment in the Royal Canadian Air Force under the R.O.T.P. program.
Can the Associate Minister of National Defence advise the house whether he is aware of this refusal and whether it is his intention to make personal representations so that the armed forces grant this one-year exemption to allow the president to complete his mandate?


Mr. Speaker:: Here again, I have doubts concerning the urgency or the general importance of the point raised by the hon. member in his question. It seems to me he could place it on the order paper and, if he prefers, raise it upon the adjournment motion.


Gilles Grégoire: Mr. Speaker, with regard to the question of urgency, the president of U.G.E.Q. has resigned because he was not granted this exemption and, as his resignation is now being considered by the association, the members of the "Union Generale des Etudiants du Quebec" would like an answer as soon as possible so as to know whether or not they should accept this resignation. That is why the matter is urgent.


Mr. Speaker:: It may be urgent but it is hardly a matter of national importance. The hon. minister might communicate with the hon. member and give him his answer; the hon. member could then communicate with those concerned.
[English1



CORRECTION OF FIGURES OF RECRUITMENTS AND RELEASES

[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, on Thursday, May 12 the hon. member for Winnipeg South Centre (Mr. Churchill) asked a question concerning withdrawals from the armed forces in relation to recruitments. In reply I gave some figures which had been handed to me but which related to voluntary releases only, and the figures I gave for voluntary releases were for 1965 rather than 1966. In giving the figures I omitted reference to the fact that they represented voluntary releases only.
I can assure the house that the omission was inadvertent. However, I want to apologize to the hon. member and to the house for
DEBATES	5167
Inquiries of the Ministry presenting the figures in this fashion, and for the obvious discrepancy with the figures given in answer to a written question on May 9.


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I have a question for the Associate Minister of National Defence. I wonder whether he would participate with the Minister of National Defence in advising the house that he also made a mistake on May 12, when according to page 5041 of Hansard the Minister of National Defence said:
The Associate Minister has just given me figures which show that for the first three months of the year-
We have now had it disclosed that the figures were for 1965, and that the figures were wrong.


Léo Alphonse Joseph Cadieux: Mr. Speaker, the figures were wrong. The figures for 1966 were 1,600 instead of 2,400, so that actually the situation is not as bad as my hon. friend would paint it. I made a mistake in handing the figures to the minister because they were computed in a different way, so if I did mislead the hon. gentleman I would apologize; but I want to remind him that the figures are 1,606 compared to 2,300 and something.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Hon. Alvin Hamillon (Qu'Appelle):: Mr. Speaker, my question is directed to the Minister of Labour in his capacity as one of the vice chairman of the centennial committee. Would the minister take up with the centennial committee the possibility of inviting to our centennial celebrations those airmen of the commonwealth who trained in Canada under the commonwealth training plan during the war? In support of my request I put forward the fact that on my recent trip down under, the New Zealand and Australian air force veterans asked if this invitation would be forthcoming.


Mr. Speaker:: Order. I am sure the hon. gentleman's remarks will be considered, but I doubt if this question can be asked at this time.

May 16, 1966
Inquiries of the Ministry



NATIONAL GALLERY


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Secretary of State. Can the minister tell us about the $6 million picture that her department is reported to be purchasing for the National Gallery?


Julia Verlyn (Judy) LaMarsh: There was no such report at all. The report, as I understand it, was that I said I should like to have such a picture purchased as a standard of excellence at which all Canadians might aim for their artistic lives. It was made very clear that this was my view. It has never been discussed with my colleagues, most notably the Prime Minister or the Minister of Finance. I was very happy to mention it in order to try to obtain the reaction of those present, which was very enthusiastic. I also wanted-


Michael Starr: How about raising old age pensions?


Julia Verlyn (Judy) LaMarsh: -to obtain the reaction of the rest of the country. I know my hon. friend who is now speaking, the former minister of labour, while he was in office informed Canadians that that government did not have any interest in the National Gallery. However, we are interested in it.


John George Diefenbaker: I should like to ask the Prime Minister whether any discussions have taken place with regard to the Hirschorn art collection which this gentleman brought together as a result of the wealth he earned in Canada. Has there been any suggestion that this art collection should be made available to Canada rather than transported out of Canada to the United States.


Mr. Speaker:: Order. The subject to which the right hon. Leader of the Opposition refers is not within my immediate knowledge, and I do not know to what extent it could be urgent. Perhaps the right hon. gentleman might indicate in what way it is, so I might allow the question.


John George Diefenbaker: I cannot imagine anything more urgent than the report that within three or four days this is going to take place. I do not know of any other opportunity of referring to the matter. We may lose this art collection, unless of course it is impossible for Canada to secure it in any way.


Righi Hon. L. B. Pearson (Prime Minister):: I have had no discussions with Mr. Hirschorn on this matter. I understand from what I have read that these pictures are not at the moment in Canada but are in the United States, although I know he has had pictures in Canada. I am sure we would welcome any donation to the National Gallery which might save us $6 million, if Mr. Hirschorn would find it possible to have some of his pictures donated. In fairness to him, in view of what the right hon. gentleman has said, I think it should be noted that Mr. Hirschorn made a good deal of his money in the United States, as well as some of it in Canada.


Michael Starr: Tell him to leave half the pictures, then.


Julia Verlyn (Judy) LaMarsh: I might also give some information to the right hon. gentleman in this connection. I checked on this matter this morning, and I am informed that in 1958 the then directors of the gallery, Dr. Jarvis and Dr. Hubbard, did have some conversations with Mr. Hirschorn with respect to his collection, which I understand has always been in the United States although it has been on loan to us and we did have a Durer Sketch at one time. The indication then was that the owner of these art works intended to build himself a gallery in New York similar to the Guggenheim gallery to house his own very massive collection.
There has been no indication since 1958 that he has changed his mind. In fact we are informed that the agreement between the President of the United States and this gentleman will involve an investment of several million dollars by the United States government for the construction of a new museum expressly for that purpose.


Mr. T. S. Barnett (Comox-Alberni):: May I
ask a supplementary question arising out of the answer of the Secretary of State. I wonder if this is one of the situations in which the Minister of Finance would be disposed to yield to pressure?


Mitchell William Sharp: This is a hypothetical question.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Jack Roxburgh (Norfolk):: I have a question for the Minister of Fisheries. With
May 16, 1966
the Lake Erie fishing industry still in a rather chaotic condition as a result of the extremely low prices paid for fish, has the minister given consideration to stabilizing the price through the federal stabilization board? If so, when may we expect an announcement on the decision made?


Hon. H. J. Robichaud (Minister of Fisheries):: Representations have been made by the industry, and the officials of the fisheries prices support board are now completing an investigation. They are expected to report to the board very shortly.



B.C. SALMON-REQUEST FOR REPORT ON NEGOTIATIONS WITH U.S.

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to direct a question to the Minister of Fisheries, and I ask it now inasmuch as tomorrow in Seattle, Washington, another meeting will open relating to problems of joint concern to Canada and the United States. I ask the minister whether any proposal has been made to the United States that Canada will desist from salmon net fishing operations on Juan de Fuca strait if the United States will cease and desist from net fishing British Columbia bound salmon through Alaska waters.


Hédard-J. Robichaud: The position being taken by Canada is well known. It will be the same position that was taken in Ottawa in February and at the previous meeting which was held in Washington last fall.


Frank Howard: I wonder if the minister would mind answering the question I put to him, namely, did Canada offer to cease net salmon fishing in Juan de Fuca strait in return for the United States ceasing fishing home bound British Columbia salmon in Alaskan waters?


Hédard-J. Robichaud: The details of the position taken by Canada will be known at the meeting that will open tomorrow in Seattle. I have nothing to add to what was reported following the meeting held in Ottawa early in February.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question
Inquiries of the Ministry to the Prime Minister supplementary to the question I asked him on Friday morning. At that time I asked if he would have consultations with Mr. Keate and get a report on the results of his efforts in connection with the dispute between management and producers of the Canadian Broadcasting Corporation. In view of the fact that Mr. Keate has gone back to Vancouver, and in view of what we read in the press, I wonder if the Prime Minister could now make a statement to the house on what Mr. Keate has reported to him.


Lester Bowles Pearson: He has only reported to me he has gone back to British Columbia so he can write his report in calm and peace. He is working on it there and expects, I understand, to have it in my hands next week.

REFUSAL OF PREMIER TO APPEAR On the orders of the day:


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, may I put a question to the hon. Secretary of State?
Does the hon. minister know why the premier of the province of Quebec should have refused to participate in the broadcasts "Sel de la semaine" and "Rencontres" which are organized, prepared and produced by the public affairs section of the C.B.C.?


Mr. Speaker:: This question is out of order.
[English1



VETERANS AFFAIRS

[Stage Direction]
INQUIRY AS TO LEGISLATON THIS SESSION On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: I wish to direct my question to the Minister of Veterans Affairs. Will the minister inform the house whether it is his intention to present any legislation concerning veterans affairs at this session, particularly with regard to the deletion of the 365 day section of the War Veterans Allowance Act?


Hon. Roger Teillet (Minister of Veterans Affairs):: I indicated earlier in answer to a question of this kind that I am waiting for the report of the Wood committee before I decide on what legislation can be introduced. Until I have that before me to decide what bearing it may have on other legislation, it is difficult to reach a conclusion.

5170	COMMONS
Inquiries of the Ministry


John (Jack) McIntosh: May I ask a supplementary *question, Mr. Speaker. May I inform the minister that the War Veterans Allowance Act is not under-


Mr. Speaker:: Order. The hon. member cannot inform the minister of anything.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: May I direct a question to the government house leader and ask him if, since last Friday, he has had an opportunity of discussing with his colleagues the question of referring Bill No. C-147, to amend the Yukon Act, to the standing committee on northern affairs and national resources.


George James McIlraith: No, not yet, Mr. Speaker.



INQUIRY AS TO FORTHCOMING LEGISLATION

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I ask the Prime Minister whether he is yet in a position to give the house the list of legislation that he promised last Thursday he would give at an early date. I refer to the list of important items of business that the government plans for this session.


Lester Bowles Pearson: Mr. Speaker, I am not in a position to do that today. I have been discussing the matter with some of my colleagues this morning, and as a result of that discussion it will be possible in a day or two to discuss with the house leaders of the other parties the possibility of a planned program from now until say midsummer.



COLUMBIA RIVER-OBSERVANCE OF BILL OF RIGHTS BY PROVINCIAL AUTHORITY

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of Justice. There is some urgency about it. I have been asked this question by employees working on the Columbia river treaty projects who want to know where they stand.
[Mr. Teillet.l
DEBATES	May 16, 1966
In view of the agreements between the government of Canada and the government of British Columbia with respect to the Columbia river treaty and protocol, would the minister inform the house if under these agreements there is any obligation, expressed or implied, on the part of the government of British Columbia that the B.C. power and hydro authority will be required to observe the provisions of the Canadian Bill of Rights in its dealings with its employees and all other persons?


Mr. Speaker:: Order. The hon. member is now asking for a legal interpretation or opinion, and for this reason the question cannot be accepted.



COLUMBIA RIVER-AMOUNT PAID BY U.S. AND EXPENDITURES BY B.C.

[Stage Direction]
On the orders of the day:
Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys):: While I am on my
feet, Mr. Speaker, may I answer the hon. member for Kootenay West. He has been very good today and has not had many answers.
Recently the hon. member for Kootenay West asked me for a comparison between United States payments-he referred to them as contributions, but they are in fact payments-to the cost of Columbia river projects in Canada and the amounts being spent by British Columbia on those projects. This information was confidential. However, always eager to please the hon member for Kootenay West, I have obtained authorization from the government of British Columbia to make these figures available to the public now. I am told that as of March 31 this year the Columbia river treaty fund, including interest earned, stood at $295,917,782. Expenditures on treaty projects by British Columbia at the same date, including interest charged, stood at $97,914,505.


Herbert Wilfred Herridge: That shows where we are going.



STATEMENT ON NATIONAL GRID STUDY

[Stage Direction]
On the orders of the day:
Jean-Luc Pepin: Mr. Speaker, may I give some information to the hon. member for Qu'Appelle in answer to a question he raised on May 10 having to do with the national power grid.
The interim report by T. Ingledow and Associates Limited has been distributed to
May 16, 1966

the members of the federal-provincial working committee on long distance transmission, and is being studied by that committee in conjunction with the consultants. They had a meeting here last week, for example. When this review is completed the consultants will present their final report on the stage II assessment and the committee will then be in a position to submit recommendations to the appropriate ministers of the governments concerned. Pending receipt of the technical advice of our committee, there is nothing to report other than this progress.
The second part of the question, Mr. Speaker, has to do with discussions between myself and the Ontario government regarding the inter-connection between Sudbury, Ontario and Manitoba. No such discussions have taken place, Mr. Speaker. The provinces, however, have provided their normal development proposals for use in the federal-provincial long distance transmission study, and Ontario's plans have been made a part of that study.



TORONTO-IMPORTS OF FOREIGN GASOLINE AT DISTRESS PRICES

[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a question for the Minister of Mines and Technical Surveys. I gave him only very brief notice of the question, so he may not have the answer ready at the moment.
Can the minister state what action will be taken in response to the urgent protest made by the Ontario retail gasoline and automotive service association on behalf of the service station industry, to the effect that the government's national oil policy was being disrupted by recent imports into Toronto harbour of three million gallons of foreign gasoline at distress prices?


Jean-Luc Pepin: Mr. Speaker, a protest has just been received by the National Energy Board a few minutes ago and they are presently investigating the matter. If the situation should be as the hon. member defines it, then it will be for the Department of National Revenue to take the necessary steps. But again, the matter is being investigated.
Inquiries of the Ministry



DOMINION-PROVINCIAL RELATIONS VACANCY IN SECRETARIAT OF RESOURCE MINISTERS COUNCIL

[Stage Direction]
On the orders of the day:
Jean-Luc Pepin: Mr. Speaker, while the house is very quiet this afternoon may I answer another question which was asked by the hon. member for Brandon-Souris, who inquired whether Mr. Walter Gray, formerly public relations and information officer for the Canadian council of resource ministers,, had been replaced. I have now received information to the effect that he has not yet been replaced, but I am told that Mr. Edgar Sarton is presently carrying out these duties until a replacement is found for Mr. Gray.
I have other replies, Mr. Speaker, but I will give them tomorrow.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Queens):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Can the minister advise whether he is now able to report on his investigation into the work of Doctors Mirkovich on an anti-cancer hormone made by the Ontario Cancer Treatment and Research Foundation?


Allan Joseph MacEachen: Mr. Speaker, a similar question was asked the other day by the hon. member for Winnipeg North Centre and I promised at that time that I would make a statement in reply. I will now do so in reply to the question put to me by the hon. member for Queens.
Dr. Mirkovich was in touch with the Department of National Health and Welfare early this year and also some weeks ago asking that clinical tests be conducted of this alleged cure by the Department of National Health and Welfare. The Department of National Health and Walfare does not have the clinical facilities to test any such drug, although the department does support the National Cancer Institute and provincial activities in the field of clinical testing.
With respect to the appropriate rules that must be followed under the Food and Drug Act, I should state that in order for this drug
May 16, 1966

Inquiries of the Ministry to be approved as a new drug certain preclinical testing has to be conducted, and the composition of the drug made known to the officers of the department. Dr. Mirkovich has been made aware of these regulations and has been given a full explanation of the requirements to be met before distributing a new preparation for clinical trials. The purpose and intent of these new drug regulations are to ensure that clinical investigators have a background of knowledge about the new drug before administering it to patients. In this way the clinician is able to make a sound judgment as to the validity of the use of the drug in humans.
The regulations provide assurance to both the clinical investigator and the patient that the necessary tests have been carried out prior to the administration of the drug to the patient.
I should say in summary, this being an important question and we all being concerned about a solution to the disease of cancer, that the department has attempted to be helpful but is not in a position to carry out the clinical testing which is requested by Dr. Mirkovich. I am hopeful that these important clinical tests can be undertaken under the auspices of agencies which have facilities to make such tests.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, would the Prime Minister be in a position to report on any discussions he has had with Ambassador Arthur Goldberg; and has there been any agreement arrived at with the United States respecting the recognition of communist China, in accordance with the interpretation placed by objective reporters on the address delivered in the United States last week by the Prime Minister?


Lester Bowles Pearson: Mr. Speaker, discussions have been going on with Ambassador Goldberg under the auspices, on our side, of the Secretary of State for External Affairs. I expect to participate in those discussions later this afternoon, so perhaps the right hon. gentleman would wait until tomorrow for any statement in regard thereto.


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Having in mind today's news from Viet Nam, I wonder whether the minister could give the house his opinion as to the confused situation there today.


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, I have just received notice of my hon. friend's intention to ask this question. I am sure he will appreciate that it would not be possible to relate the efforts of this country and the efforts of the members of the international control commission to the events reported in South Viet Nam this morning. I may say, however, that the Canadian proposal continues to be one that is foremost in our minds. I took advantage of the presence of United States Ambassador Goldberg to discuss certain aspects of the matter this morning. This proposal, together with other Canadian efforts, will be related to the situation in Viet Nam in an effort to contribute to the possibility of a negotiated settlement in that situa-ion.


[Stage Direction]
On the orders of the day:
John (Jack) McIntosh: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Can the minister inform the house whether he has had any recent word from the British government about the negotiations that are going on between certain officials from Rhodesia and officials of the British government with regard to settling the dispute between those two countries?


Hon. Paul  Marlin@Secrelary of Slate for External Affairs: Mr. Speaker, the Canadian government has been informed of the exploratory talks taking place in London. These are not in the nature of negotiations but constitute an effort to try to determine whether there is a basis for negotiation between the government of Great Britain and the illegal regime headed by Mr. Smith.
We have had a report on the latest meeting of the sanctions committee. The position taken by the British government, which has been supported by the Canadian government, for the use of moderation in this situation at
"May 16, 1966

the present time, is one that seems to have been accepted by the majority of the countries of the Commonwealth represented at that meeting.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. R. R. Southam (Moose Mountain):: Mr. Speaker, I wish to direct a question to the Minister of Mines and Technical Surveys in his capacity as the minister who reports to the house for Atomic Energy of Canada Limited. Can the minister advise the house as to the present status of the second heavy water plant in Canada?


Jean-Luc Pepin: My understanding, Mr. Speaker, is that Canadian General Electric still has to make its decision as to the location of the site.



INQUIRY AS TO REPORT ON ASSISTANCE PROGRAM

[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, since the minister of Mines and Technical Surveys seems to be in such a genial mood and has brought along his music and glad spirits, would he be so kind as to tell hon. members from Cape Breton Island whether he has heard anything further with respect to the Donald report on coal matters?


Jean-Luc Pepin: Mr. Speaker, I say with great sincerity that the people of Cape Breton Island are my main interest at the moment. The hon. member should not think, because I am not yet in a position to announce policies for Cape Breton, that we are not at work on those matters.


An hon. Member:: Where is the report?


Jean-Luc Pepin: We are presently devoting a great deal of attention trying to devise ways and means by which the situation in Cape Breton may be improved.


Some hon. Members:: Oh, oh.


An hon. Member:: I wonder who is training the minister to answer like that.
Tight Money Policy BUSINESS OF THE HOUSE



DINNER RECESS DURING DISCUSSION OF SUPPLY MOTION

[Stage Direction]
On the orders of the day:
[u'Mr. Speaker, I had to rise to my feet before I had the opportunity to join in the applause. I must confess, not only as a member of parliament from a British Columbia riding but as one who has had an interest in public utilities and particularly in the development of my own province for many years, that the question put by the hon. member for Kootenay West is very timely.\nWe all know something about the most important developments which have been taking place of late in all parts of Canada, and more particularly in British Columbia. With the Columbia river and Peace river hydroelectric projects both going on at the same time, with the major expansion in the pulp and paper industry, that is taking place in the province, where we have plants either being put into operation, under construction or on the drawing board valued at approximately $600 million, some problems have arisen.\nMy mind has been more or less continuously on housing for the last four or five hours. I am going to visit Prince Rupert, in British Columbia, on Monday next, for the sole purpose of getting a first hand report on housing conditions in that part of Canada, brought about by the tremendous expansion to which\nMay 16, 1966\tCOMMONS\nI have just referred. It is enevitable because of the demand for construction workers in the area, because of the increases of wages, because of shortages of skilled labour and of materials used in dam construction, that costs should go up. That is why I say that the question put by the hon. member for Kootenay West is such a timely one.\nThe only assurance I can give him is that I will make sure that my colleague, the Minister of Mines and Technical Surveys gets in touch with the government of our province, British Columbia, to see to it that the figures\nDEBATES\t5211\nProceedings on Adjournment Motion we are entitled to, for which the hon. member asks, are made available as quickly as possible. I think we should have the figures. I think we are entitled to them under our agreement. As is well known, the government of British Columbia has agreed to accept responsibility for the implementation of the obligations that the federal government assumed under the treaty and under the protocol that was subsequently negotiated with the United States.\nMotion agreed to and the house adjourned at 10.10 p.m.\n23033-330\ufeff5213', 'Tuesday, May 17, 1966']
Stanley Howard Knowles: May I direct a question to the Minister of Public Works in his capacity as house leader. In view of the fact that the order of business for today and tomorrow is under a time limit, would he ascertain whether the house might give unanimous consent to our taking the traditional supper recess today and tomorrow between 6 and 8 p.m.?


Some hon. Members:: Agreed.
Hon. G. J. Mcllrailh (Minister of Public
Works): Mr. Speaker, I should be very glad to agree to such a proposition so far as this side of the house is concerned.


Some hon. Members:: Agreed.


Mr. Speaker:: Order, please. With regard to the proposition submitted by the hon. member for Winnipeg North Centre, is it an order of the house that the house shall not sit between 6 p.m. and 8 p.m. today and tomorrow?


Some hon. Members:: Agreed.


Mitchell William Sharp: that the house go into committee of supply.



Hon. George Hees (Northumberland):: Mr. Speaker, for the past several months producers in this country have been finding it increasingly difficult to obtain the credit they need to carry out the normal expansion of plant, machinery and inventory which the increase in demand for their products requires. Plans for expansion have had to be curtailed or cancelled, with a consequent loss of production and prosperity. This is the identical situation, Mr. Speaker, in which the country found itself in late 1956 and early 1957 and which was the subject of the famous hidden report presented to the government by its economist, Dr. O. J. Firestone, early in 1957. In that report Dr. Firestone warned the government that if it did not withdraw and reverse its tight money policy, making credit easier to obtain than it had been for the preceding several months, a recession would

May 16. 1966
Tight Money Policy
follow. As we know, the government of the day planned to call an election in April and disregarded the warning of Dr. Firestone.


Mitchell William Sharp: Could I ask the hon. member for clarification of what he has just said?


Mr. Speaker:: Order, please. May we have order in the chamber.


Mitchell William Sharp: May I ask the hon. member a question, for clarification?


George Harris Hees: Certainly.


Mitchell William Sharp: Could he identify the report written by Dr. Firestone to which he refers? I am not familiar with it, I believe.


George Harris Hees: I am surprised to hear the Minister of Finance (Mr. Sharp) say that because I know that he was very familiar with this report when he was deputy minister of the Department of Trade and Commerce. I refer to the report made for the previous government early in 1957. It came into our hands after we had formed the government in June of that year.


Mitchell William Sharp: Mr. Speaker-


George Harris Hees: If the hon. member will look back he will become familiar with the report to which I refer.


Mr. Speaker:: Order, please. The hon. member for Northumberland has the floor.


Mitchell William Sharp: I just wanted to be clear what report was being referred to, Mr. Speaker.


George Harris Hees: Mr. Speaker-


Mr. Speaker:: Order, please. The minister may rise on a point or order, on a question of privilege, or in order to ask a question with the permission of the hon. member who has the floor. The hon. member for Northumberland has not indicated that he wants to allow the minister to put a question at the present time.
[DOT] (3:40 p.m.)


George Harris Hees: Mr. Speaker, I was quite willing to yield the floor to the Minister of Finance and answer his question. I believe I have answered his question and now I intend to continue my remarks. As I was saying before I was interrupted by the Minister of Finance, when the Conservative government took over late in June, 1957, a recession was well launched, as Dr. Firestone had said it would be if the government of that day did not reverse its tight money policy and make far

easier credit available to the producers of the country. It took us three years of hard work to bring the country out of the recession into which it had fallen due to the policies of the previous government to which I have just referred.
On January 21 last Dr. Firestone again warned the government that if their present tight money policy was not withdrawn and reasonable credit made available, a downturn in business could be expected. Once again the government has refused to heed this warning.
Tight money is this government's method of combating inflation. As we all know, inflationary pressures are caused when too much money is chasing too few goods. These pressures can be reduced either by the negative method of decreasing the amount of money available with which to buy the goods or the positive method of increasing the volume of goods available for sale. As we learned in the budget this year, the government has chosen the negative method of combating this problem by reducing the amount of money available to the Canadian people rather than doing those things which must be done so that our economy may proceed at a normal expansion rate.
The budget made it very clear that the government intends to restrict the money supply in three ways: through the tight money policy which they imposed several months ago, the increase in income taxes, and the snecial refundable tax of 5 per cent. We can well ask ourselves, why is the government limiting in this way the ability of industry to expand production and by this expansion relieve the inflationary pressure and increase prosperity?
It has become obvious that it is because there are not enough skilled workers in the country today to carry out expanded production. We might, again, ask ourselves why this should be so. It has been clear that unemployment has been decreasing steadily during the past five years and skilled workers have been in increasingly short supply during that period. Each year it has been more and more obvious that the program to train additional skilled workers is inadequate to meet the growing demand.
What has been sorely needed is an immigration policy with sufficiently attractive inducements to attract the required number of skilled workers from other industrial countries. The absence of such a program has allowed an increasingly difficult situation to become steadily worse. It seems to me that it is simply incredible that in a young and
May 16, 1966

.growing country such as Canada the government should be forcing industry to slow down on normal expansion programs. I think it is obvious to any thinking Canadian that it should, instead, be introducing policies to increase industry's capacity to produce and thereby keep pace with the growing demand for goods both at home and in the export market.
As a result of the government's negative and shortsighted policy we are losing sales which should be ours and which may be difficult or impossible to regain later. If this country is to meet foreign competition both at home and in the export markets we must make our prices increasingly competitive. Lower costs, as we know, are made possible by the economies of scale and those economies are made possible by increased production, not the reduced production which this government is forcing on industry today.
I think all hon. members would agree that one of the strongest inflationary pressures results from low productivity which forces up costs and thereby selling prices. During the five year period between 1960 and 1964 inclusive, productivity in Canada increased at an average annual rate of 2.9 per cent per year. But last year Canadians generally were alarmed to learn that productivity increased by only 2 per cent, or two-thirds of the average annual rate of increase for the previous five years. This is one of the principal reasons why the wholesale price index in Canada increased last year by 3.2 per cent over 1964 and was 50 per cent higher than the increase in the United States during the same 12 month period.
I think it is obvious that we need financial incentives to induce increased productivity so that our wholesale price index will rise at a reasonable rather than an excessive rate as it is doing today. I find it difficult to understand why, in the face of the drop in productivity that took place during the past year, the government did not introduce and has not yet introduced incentives to increase productivity and thereby make our products more competitive at home and abroad.
Another reason why incentives to encourage greater productivity should have been introduced by this government is that high prices are slowing down the annual rate of increase of our export trade. The industrial trade crusade which was introduced by the Conservative government at the end of 1960 produced, during the first year of operations in 1961, a 10 per cent increase in exports
Tight Money Policy
over the previous year and our first positive commodity trade balance in nine years.


Some hon. Members:: Hear, hear.


George Harris Hees: Since that time our exports have increased at a higher rate each year and our sales abroad in 1964 were 19 per cent greater than in 1963. However, last year our exports increased by only 4.6 per cent over 1964, or one-quarter of the rate of increase during the previous year. Higher prices of Canadian goods made them less competitive abroad and our sales drive slowed down accordingly. It is obvious that incentives to increase productivity are urgently needed to make possible a satisfactory yearly increase in our export trade.
I think it has now become obvious that in order to keep our economy healthy four definite things are needed. First, a greatly accelerated and expanded program to train the skilled workers which this country needs to carry out its normal industrial expansion. Second, an immigration policy which will attract the skilled workers that our training program is unable to provide. Third, incentives to promote increased productivity and thereby enable Canadian industry to compete successfully in the home and export markets.
[DOT] (3:50 p.m.)
Fourth, I urge that the government's tight money policy be replaced by a policy which will provide industrial loans at reasonable rates of interest so that Canadian industry can expand to keep pace with world demand and enable the country to reach its full economic potential.
I should like to deal now for a few moments with the acute shortage of mortgage money which is causing a serious slowdown in the building of houses, particularly those for people with modest incomes. 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, long term mortgage basis, particularly in the case of individual homes. 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.
This condition has been aggravated by the steady increase in the amount of maximum loans under the act to $18,000 which, of course, absorbed the available supply of funds into fewer units and brought many purchasers who in reality did not need N.H.A. financing into the N.H.A. mortgage

May 16, 1966
Tight Money Policy
market. This maximum ceiling, in my opinion, also had a tendency to encourage builders and lenders away from modest housing into middle-class development because of the profit motive for the builder and the apparent ability to repay the security for the lenders.
Added to this, of course, was the tremendous impact of large, multiple family, high-rise apartment complexes amounting to about 90 per cent in cities. Because of the size, cost of land and the luxury built into these complexes, they soon outstripped single family dwelling starts by 10 per cent and upwards. Apart from draining off badly needed mortgage money, the effect was and is to encourage lenders to put all their eggs in one basket, lessening accounting, processing, inspection costs and so on.
But the sad part of this is that because of the tremendous demand for mortgage money for the foregoing reasons, the small town, village or rural area finds it impossible to obtain funds at all. This then leads to the potential home owner seeking, but by no means always securing, mortgage funds through the participating members of the Mortgage Insurance Company of Canada, the M.I.C.C. This is expensive, in fact is often prohibitive, and excludes village or rural financing. Rates are 7J per cent on amounts up to 87J per cent of the M.I.C.C. valuation on a first and second mortgage, and when 2 per cent mortgage insurance plus application fee and legal fees are added this becomes difficult, if not impossible, for the local wage earner to consider.
As a result of the foregoing I recommend the following to the government:
First, that mortgages under the National Housing Act be redirected to the average home rather than the middle or executive type home, which is the case today.


Some hon. Members:: Hear, hear.


George Harris Hees: Second, that insurance companies, which seek insurance business all across Canada, be required to invest mortgage funds in towns and rural areas as a duty.
Third, that interest rates be reduced to 6 per cent, thus allowing banks to participate under the act.
Fourth, that the government set aside each year sufficient funds to meet the estimated requirements for the year under the act, which would be a marked increase over the amount it is making available today, so that builders may plan for a full year's operation

and not be restricted in their operations as they are at the present time.
Everyone in this house knows of the restrictions that have been placed upon builders trying to carry out their normal operations. I do not need to go into that in detail. We are all familiar with it in our own constituencies. It remains clear and obvious that the government should greatly increase the amount of money available for this purpose so that the normal building of homes for Canadians who desire to become home owners can go on as desired.
I believe that if the government will adopt these changes the achievement of our very worth-while objective of making Canada a country of home owners will be greatly accelerated. I think we all agree there is no finer move we as legislators can make than enabling as many families as possible to own their own homes, particularly those homes which families with modest incomes need and desire.


Some hon. Members:: Hear, hear.


George Harris Hees: Nothing builds up a family better than keeping its members together in their own home. Children who are brought up in such homes grow up far better citizens than those whose family interests are not concentrated in the home to such a great extent. I believe we would all agree that anything we can do to make this worth-while objective a reality is something we should lend our efforts to in every way we can.
In conclusion, Mr. Speaker, I strongly urge the government to withdraw the tight money policy which it has imposed on the country, and thereby enable our businessmen, our farmers, our builders and our other producers to carry out their normal plans for expanding their production. If it refuses to do so it will follow the pattern it set in the latter half of 1956 and the early months of 1957 and a business downturn will definitely follow just as it did at that time.
If the government does take this advice and makes it possible for our producers to obtain the credit they need to expand production and thereby lower costs and become more competitive, the prosperity which was made possible by the constructive policies of the Conservative government at the beginning of this decade will continue for the benefit of all Canadians.
May 16. 1966

Therefore, Mr. Speaker, I move, seconded by the hon. member for Edmonton West (Mr. Lambert):
That all the words after "that" be deleted and the following substituted therefor:
"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."


Mr. Colin Cameron (Nanaimo-Cowi-chan-The Islands):: Mr. Speaker, I must say it was a little difficult, as the hon. member for Northumberland (Mr. Hees) was speaking, to know on exactly what spot he was going to land. His speech was extremely general. His amendment, of course, is quite specific.
I have an idea that the proposals that are made to deal with the ills in our society tend to be somewhat simplistic and perhaps they are largely matters of semantics. Ever since I came to the House of Commons I have heard opposition members-and this applies to both major parties-attacking governments of the day for tight money policies, and I have always had great difficulty in getting this defined for me.
I look at the reports of the Bank of Canada and of the Dominion Bureau of Statistics and I see that the total money supply continues to rise. It may rise at varying rates but it is a fairly steady rise. I see interest rates go up but it appears sometimes that they do not have very much effect on total money supply. I suspect, Mr. Speaker, that our troubles are more deepseated. We have had, as the Minister of Finance (Mr. Sharp) has been telling us-in fact, he told us this with great fervour during his budget speech-the longest uninterrupted period of economic expansion in our history.
[DOT] (4:00 p.m.)
At the same time, however, we must face the fact that in spite of that and because of that-and this is very serious-we still have very large pockets of poverty in our country; we still have a stubborn level of unemployment.


An hon. Member:: A stubborn government.


Colin Cameron: Yes, and a stubborn government which we are not able to do much with. I remember that when the Conservative government was in office there was the same stubborn note of unemployment with which that government was unable to deal. When
Tight Money Policy
we are committed to this method of organization our society really is not able to deal with the problem of unemployment. When these parties tell us the whole trouble is tight money, then I suspect they are merely trying to beg the question. I have long suspected that their preoccupation with economic expansion and economic growth is to some extent at least an escape mechanism to avoid the problem of maximum distribution in our society. Neither Liberal nor Conservative governments has been very successful in dealing with that.
I notice that the Conservative party apparently is now prepared to depart so far from its traditional point in support of free enterprise as to insist that insurance companies shall be required to invest their funds where the government of the day decides they are needed. I am all in favour of that, of course, but I would go further and abolish the insurance companies. In this day and age I think it is a piece of nonsense that we allow private racketeers to enter into the business of collecting the savings of the Canadian people and investing them where they will. At every session including the present, we have a whole string of applications from those who want to get in on this nice little gold mine.
I wonder how long sensible people will permit this. I wonder whether the time has not come when we have to evolve a different method of pooling the savings of the Canadian people and investing them in the development of our country. I am hoping that before this session is over the present Minister of Finance will present to us the legislation to deal with the Canada Development Corporation which his predecessor brought before us during his term of office.
I would hope that the Canada Development Corporation as now envisaged by the present government perhaps will be an improvement on the suggestions made to us during the tenure of office of the last minister. At that time it appeared to me it was to be largely a private investment pool a mutual investment pool, if you like, in which again those who have would get a little richer, leaving those who have not in the same position. I would hope the Canada Development Corporation would be devoted to pooling the savings of the Canadian people as much as possible and investing them under public auspices in various sectors of our economy. Only in this way, I think, are we going to assure that we get the sort of thing the hon. member for Northumberland was speaking about, such as an

May 16. 1966
Tight Money Policy
adequate housing program and other things which he did not mention such as an adequate school system in Canada including an adequate university system throughout the country, and an adequate medicare program. Only by having at our disposal a very large part of the savings of the Canadian people can we achieve these things. Only in this way will we be able to deal with the rural conditions mentioned by the Minister of Forestry (Mr. Sauve) the other day.
The rural rehabilitation program will involve very large public expenditures. I am hoping those public expenditures will take the form of public investment to create a viable economic area for the people now living in the depressed rural areas of the country. My hon. friend from Northumberland suggests that the principle sin of this government-I do not know how he selects one sin over another-is that it has denied builders and prospective home owners the needed mortgage funds. I suppose when one stretches this a bit one can say it is the responsibility of the government, but I think the responsibility goes further than that.
I am very much disturbed to see in my own province of British Columbia that the investment in our major extraction industry is taking place without any regard whatever for a balanced economy and without any regard whatever for the development of the social capital which should accompany such investments. I suspect, Mr. Speaker, that one of our problems with regard to funds for housing stems from the fact that neither this government nor its Conservative predecessor nor the Liberal predecessor of that Conservative government has seen fit to take the necessary action to divert to the public treasury a very much larger proportion of the funds which now go into the treasuries of these enormous private corporations engaged in particular, as I was saying, in the extraction industries in western Canada and in parts of central and eastern Canada too.
This, of course, is the point at which we in this party part company with our friends in the Liberal and Conservative parties. We do not feel that the economy of this country should be operated primarily for the benefit of a number of fortunate people who own and control the productive enterprises of this nation. We feel very strongly that they should be servants of the Canadian people and that the people of Canada should have some say with regard to where the returns from our productive enterprises are to be
[Mr. Cameron (Nanaimo-Cowichan-The Islands) .3
channelled. They should not be channelled merely, as my hon. friend from Northumberland suggested, where the savings of the individual Canadian insurance policyholder are going to be channelled but rather where the real wealth is.
Our enormous internally generated savings are now in the hands of large corporations, and when they are in the hands of foreign corporations they are largely responsible for creating the condition that our present Minister of Finance and his predecessor both have deplored, the expanding foreign ownership of Canadian industry. To my mind this is the point at which there has to be a diversion from private to public hands if we are to deal with the problem of adequate housing and these other problems in various areas of the country.
To my mind it is fantastic that we should have existing at the same time in Canada a shortage of skilled workers and some-I do not have the exact figure-300,000-odd unemployed. Obviously no real attempt has been made to grapple with the problem of supplying our economic machine with skilled hands and at the same time coping with the problem of unemployment. I agree with the hon. member for Northumberland that there is, at least in some parts of the country, an acute shortage of money for housing projects, and I certainly agree with him that a great deal of those funds should be funnelled into middle and low income housing. I am not quite sure that he is on sound ground in his idea that we should encourage individual home ownership. I like the idea myself; I own my own home and I would not want to do anything else. I wonder, however, in this day and age and with the growth of the large metropolis, whether this is going to be feasible much longer and whether the people of Canada might be well advised to take a page from the book of the people of Europe and the practice which has been followed there for many decades whereby people live and expect to live during their whole lives in apartments. There is no reason that our apartments should not have all the amenities required for a family. We have perhaps fallen behind on that score in Canada.
[DOT] (4:10 p.m.)
All too many apartment owners put up signs, "no children wanted". I see no reason, however, why dwelling units cannot be designed to cater to the needs of young families through adequate playgrounds, recreational areas and facilities within and without the
May 16, 1966

buildings. Certainly they must be built on the understanding that they are to meet a need rather than to provide profit for speculators, building and real estate owners.
For those reasons, Mr. Speaker, I feel that one could hardly fail to support the amendment of the official opposition though I should have liked it better had it been couched in somewhat broader terms as a criticism not so much of the government's policy regarding housing or mortgage money or the alleged tight money policy, because I am rather doubtful that such strictures could actually be sustained, but rather as a criticism of the government's policy which allows certain groups in our society to control where the bulk of our wealth goes. We may very well have to make a drastic revision in our outlook as to the purpose of our society, but I feel that nothing less than what I have suggested will really solve these problems.
The government has a prefectly good answer for its alleged tight money policy, and it relates to the balance of payments situation. The balance of payments position is always referred to as a reason for coping with inflationary pressures within our own society. However, there are many economists, and perhaps even the bulk of at least Canadian economists, who feel we are tying our hands by maintaining a fixed exchange rate and that if we were prepared to go back to a floating exchange rate our balance of payments problem would solve itself and the question of tight or loose money, if that is the opposite term, would disappear. I am not an economist but I have discussed this matter with many and have found that there is a fairly unanimous opinion among Canadian economists that this might be the solution to our problems of alleged tight money, balance of payments and the necessity of having to put the brakes on our expanding economy to protect our own unit of currency.
Those are the points which I think this amendment should have included rather than the narrow point, important though it is, that money should be made available for adequate housing. I am not sure it is at all possible to ensure that money will be available for housing without taking much more drastic steps than the official opposition apparently is prepared to advocate or the government is prepared to undertake.


Mr. Macdonald (Rosedale):: Mr. Speaker, I wonder whether the hon. member would permit a question before he resumes his seat. I
Tight Money Policy
am in sympathy with this suggestion that some funds should be diverted to low rental public housing, but when he proposed that certain measures be taken in respect of certain extractive companies, was he proposing a fairly widespread program of nationalization in this country? I should like to understand his position in this regard.


Colin Cameron: I am very pleased to answer that question. As the hon. member for Rosedale is well aware, our constitution would place any suggestion such as he has made in respect of these extractive industries within the jurisdiction of the provincial legislatures which have control over property and civil rights.
For the benefit of the hon. member, let me say that I have advocated very strongly in my party and in my own province that the provincial authorities should take precisely that step. What I was proposing here is something that the federal government could undertake, that is, to take a much larger slice from the net returns of these operations than we are now taking and to take a much closer look at depreciation and depletion allowances and the various other ways by which the net returns of these industries are funnelled into private hands. I would not want for a moment to overlook the opportunity of telling the hon. member that I quite agree with his suggestion that these large extractive industries perhaps should come under public ownership within the provinces.


Donald Stovel Macdonald: Mr. Speaker, I want to point out that I was not making that suggestion but merely directing a question to the hon. member.


Gilles Grégoire: Mr. Speaker, X should like first of all to congratulate the hon. member for Northumberland (Mr. Hees) who has moved, today, an amendment which affords us the opportunity to discuss one of the most important problems in Canada at the present time, that is an economic problem, in short, a problem involving the economy of the country: the restrictions on credit, home construction, etc.
Mr. Speaker, there is much to say about credit, because with credit a country can develop but, without credit, not only does it not develop, but it falls back and goes into a slump.
As an illustration, I should like to mention the period, say, from 1933 to 1937 when credit

May 16, 1966
Tight Money Policy
restrictions brought about unfortunate results in every area.
It will be recalled, for instance, that due to credit restrictions in force at the time, the construction of the St. Lawrence development, more particularly at Beauharnois, for the production of electric power, was halted for lack of credit.
It will also be recalled that, at the time, pulp and paper companies had to lay off several workers and close their plants for lack of credit.
In the Saguenay-Lake St. John district, the Price Brothers Company, or at least members of the Price family had to let their shares go because the banks had cut their credit. Such pulp and paper companies were forced to sell and the bank directors succeeded in grabbing them because the banks were in control of credit and private companies were deprived of credit and could thus be bought for peanuts.
[DOT] (4:20 p.m.)
The same thing happened in the field of electricity, paper and even coal. As a matter of fact, it must be remembered that in 1934, when those credit restrictions were imposed, Senator Webster succeeded in taking over the coal trust in Canada.
In the field of electricity, the Holts and Gordons succeeded by restricting credit to private companies in getting control over the latter; as bank directors they had unlimited credit and succeeded in getting control over most of the big companies which existed then.
Today, in 1966, there is a lot of talk about credit restrictions, inside as well as outside the house.
Mr. Speaker, first of all I would like to make a distinction between credit for public purposes and credit for particular or private purposes.
Credit for public purposes is credit issued to help public works or public administration. It is put at the disposal of the federal or provincial governments, municipalities or school boards. Such credit is for public purposes. It can be used to make good the deficits of public administrations. Then, it is still credit issued for public purposes. It can be issued for works by various governments. For instance, in the case of the federal government, it can be used for the dredging of a river or a waterway. A provincial government can use it for the building of bridges and roads. It can also be used for the construction 
of post offices; then such credit is issued for public purposes.
In the case of a municipality, it can be issued for the building of sewer systems, streets, water systems. Again, such credit is issued for public purposes.
In the case of school boards, it can be spent to build schools; again, such credit is issued for public purposes.
If, as I was saying a little earlier, the federal government, a provincial government, a municipality or a school board shows a deficit at the end of the year and must borrow to make it good, there will be credit issued for a public purpose. That is what is called credit for public purposes.
We will see later the situation with regard to credit issued for private or particular purposes. At the outset, I would like to talk about credit issued for public purposes. First, and it is the first principle which I would like to mention today, it is that all credit issued for public purposes should be free of debt and interest-free, because it is meant to serve the public interest, the general interest.
It must not be issued in the form of debt but debt-free. Why? Because of the source of the credit so issued. If it is a public source, lending to public bodies, then no interest should be charged because its purpose is not profit but the interest and the welfare of the country. Therefore, there is no reason why loans from this source should bear interest or entail a debt.
However, if this public credit comes from private sources, public interests or private companies, then this does not make sense because it is not incumbent on private enterprise to finance public enterprise. It does not behove individuals to finance the government; it is not incumbent on private companies to finance a public concern such as the federal government, a provincial government, a municipality or a school board.
This is why credit must originate from a public source, that is a government body, and that government body now exists: it is the Bank of Canada. Today this government body, this public body, in short, this public source of credit exists not to make gains but to help other public bodies in Canada. That is why the Bank of Canada should finance, without interest, all public credit issued for public purposes, for public undertakings. Then, such credit originating from a public source, the Bank of Canada, being issued interest and debt free, must be used for
May 16, 1966

May 16. 1966
Tight Money Policy
Let us consider the situation of municipali- remain to leave them in a position to develop
ties. Some of them have to spend 25, 30 and 40 per cent of their budget simply to pay interest on their debt. A great number of Quebec municipalities must spend up to 40 per cent of their budget for the sole purpose of paying the interests on their debts. School boards are also in debt. The provincial government claims it provides the funds, but when a $100,000 grant is paid for the construction of a school and $10,000 are paid over a ten-year period, then the school board has to borrow $100,000, pay from 5 to 6 per cent interest, and the $10,000 yearly grant over a ten-year period is barely enough to pay the interest. There is something left to pay off a small part of the debt, but not too much.
In the field of education which comes under exclusive provincial jurisdiction, I admit, where costs are ever increasing nowadays, a public organization should be set up to finance the administration. What is being done at present? Taxes are increased. In the province of Quebec especially, taxes have increased at a quicker rate than in any other field. What has been increasing most in Quebec in the last six years, have been taxes, and especially school taxes. I am not against progress in the educational field, but I say there should be a public organization to finance public administration and development, at every level, eduational, municipal, federal or provincial.
In conclusion, Mr. Speaker, I believe that with regard to public credit facilities, the federal government should implement three principles.
First, the Bank of Canada should be given the power and the privilege to become a public credit organization to finance public administration and development in Canada. Second, the funds issued by the Bank of Canada, a public organization should be debt free and not have to be financed out of interests or taxes.
I also claim, Mr. Speaker, that the Bank of Canada should issue all public funds required to enable the country to develop normally, to progress into modern times and to meet the needs of the population.
Now for private funds. By then, private funds would serve exclusively to develop private companies or to help individuals. Banks, insurance companies, finance companies such as we have today would no longer be required to invest their savings in the public area. Sufficient funds and credit would

the private sector.
For instance, insurance companies would no longer be required to invest in Canada savings bonds because it would be the responsibility of the Bank of Canada. But insurance companies could lend for home building.
Mortgage loans will be available to Canadians the day the savings of the Canadian people are no longer used to finance the provinces or the country, the day when private savings are used to finance the needs of the citizens rather than the requirements of public bodies.
Let public credit sources be established such as the Bank of Canada and let all private savings and investments serve private development, trade, industry, and private housing.
Mr. Speaker, it is public knowledge that enormous and pressing needs exist for the development of private industry and especially in the area of mortgage loans for private housing.
Mr. Speaker, we only need to go into the large cities and even the small villages, Montreal, Jonquiere, Chicoutimi, Trois-Rivieres, to realize that there are families living in slums, in old, unsanitary houses where it is rot proper, not logical nor decent and human to raise families in 1966. There is a widespread need for home construction, but for that purpose, credit should be made available to the individuals, for lending to individuals.
But today, everything is topsy-turvy. Private savings are financing governments and governments are forced to finance individual expenditures. Thrifty individuals, Canadian citizens are asked to invest their savings in Canadian bonds and then, the government is asked to set up special funds to make mortgage loans to individuals.
If we only had a government organization to finance public works, well, there would be enough savings in the private area to finance private expenditure in home, industrial, private construction, etc. But things are upside down. Individuals are asked to finance the government and the government is asked to finance the individual.
[DOT] (4:40 p.m.)
The governments issue savings bonds and give them to individuals so that they may finance the government. Then, as it holds all the savings, the government is forced to establish a public fund and put it in the
May 16. 1966

hands of the Central Mortgage and Housing Corporation which makes individual loans. This is a ridiculous system. Why not rather have a public organization financing public governments and let private institutions, such as insurance companies, investment companies, loan companies, banks, chartered banks and credit unions finance private development?
Having gathered the money from all private savings and investments, however, the government says at a given moment, like today: Only so much will be given over to private investment.
Thus the government restricts credit for private investments. But it forgets one thing: that all the present credits of the federal government come from the private sector. After looting all private savings and investments, the federal government, at a given moment, as in the last few months, decides to cut off private loans for housing.
It is time to deal with this situation, for there is a great need in the field of housing. In fact, the amendment now before us specifically mentions housing.
Not so long ago, it may be remembered, a committee was established in Montreal and even the priests on the island of Montreal protested against the unbearable situation of the inhabitants of eastern Montreal, where there are slums and dirty districts which should not exist in 1966.
I think the government should take action. First, as I said earlier, it should stop taking the money of the people for its administration or for public works. The government should leave the people their savings and investments and create its own source of public credit for its administrative expenses and public works.
There is no need to worry, Mr. Speaker; I can assure you that if the people are left their savings and investments, they will be able to provide the money for housing construction. No longer having to finance the government, the chartered banks will be able to finance housing.
The insurance companies, no longer having to finance the deficits of the federal and provincial governments, will be able to lend money for housing construction and development. The credit unions and mutual funds, no longer having to assist the federal and provincial governments, the municipalities and school boards, will then be able to help housing development and give the necessary mortgage loans.
Tight Money Policy
The housing situation is serious in Canadian cities. It is inconceivable that our government cannot handle the situation. A good part of our people need decent housing, but they do not have the necessary funds to build them, for the federal government took away all their money.
We have the building materials, the land is there to build houses, there is plenty of wood, nails, plaster, bricks, stone, paint, piping, electric wires. Everything is there. There are unemployed people who would be very pleased to work; there are masons, plumbers, carpenters, bricklayers, electricians who are unemployed and who would be very glad to work on housebuilding.
Because the necessary credit is lacking, people continue to live in slums, our unemployed do not get work and the country remains in a state of stagnation, simply because there is no credit. It is a greater scandal than anything seen in the last hundred years: with plenty of products, an overcapacity of production, our families still live in slums, because they lack credit, because money is controlled by a handful of international capitalists who tighten up money to better keep the people in misery and, in this way, to better control them.
The present federal government and all those that preceded it have always been the slaves and servants of this handful of capitalists who keep the people in poverty instead of serving their interests and helping them out of misery. We now live in a century of affluence, in a country bursting with wealth, that can give all Canadian citizens the required homes, food and clothing and everything they may desire.
But there is a lack of money because a handful of financiers control credit and impose tight money for their own benefit.
The government should stop being the slave and servant of big finance. Let it become the servant of the people who elected it. Let it pass legislation in the people's interest and then we will be able to achieve something great in Canada. Let our production, our natural resources serve the people. Let us use our building materials to give homes to those of our citizens who need them. Let us achieve what everyone is hoping for and let those Canadian citizens who need it benefit from natural resources and production. Let us give everyone the security they dream of and need.
Tight Money Policy

May 16. 1966
[DOT] (4:50 p.m.)


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, on the side of the independents, we are not hampered by this constant consideration of having to protect the political party which we represent, because we do not belong to any. Instead, we try to throw some light on the various matters considered here.
I therefore listened with great attention to the speeches made by the hon. members for Northumberland (Mr. Hees), Winnipeg North (Mr. Orlikow) and Lapointe (Mr. Gregoire). Quite objectively, I must say that even if the three of them do not share the same economic philosophy, they said a lot of things which are quite true. They raised several matters which worry public opinion.
As pointed out by the hon. member for Northumberland, there is no doubt that credit restriction paralyses the economy to a certain extent and worry the Canadian citizens considerably. There is no doubt also that some other measures which resulted from the last budget create some very serious difficulties which are finally translated in privations for the poor and increased unemployment. The restriction on money available for mortgages on low-priced housing will create an extremely hard situation in many areas.
Is a vote of censure against the government warranted on that score? Of course, I am still wondering. I am not ready yet to decide whether or not the government deserves to be blamed since, in fact, it has been in office, for a few months only. But the fact remains that the government must search its conscience on all that.
On the other hand, the hon. member for Winnipeg North advocates, that is his party advocates, of course, the mobilization of national resources to distribute them later judiciously among those who have priority needs in the country. There is something to be said for that.
As for the hon. member for Lapointe, he told us about the organization of credit. He has a theory which his colleagues and himself have been advocating for some time but which has been rejected by the government in no uncertain terms, possibly too much so. I am wondering if, instead of making fun of that theory put forward by our friends in the Social Credit, we should not make a serious, conscientious and objective study thereof. Even if we cannot go as far as they want, it might be possible to reach a happy medium to remedy those deficiencies and things which

are unfortunate for everyone, in all the parties here and in all the classes of society.
This is obvious, Mr. Speaker, when we are told, for instance, that construction must be restricted for lack of money, and when we find too many people still live in slums, when full employment cannot be guaranteed and we must tell industries to slow down their expansion program, for a lack of money, when we deplore the fact that we lack technicians who could enable our economy to develop at the rate it could develop for lack of money, not only to build and equip institutions, but also to enable our young people to take those courses up to 18, 20, 22 and sometimes 24 years of age-and fathers of large families, who, like myself, have six or seven children completing their studies, know that this a problem. Although they profit by what we are agreed to call free education, they must nevertheless dress those adults, feed them, get them everything they need and specially when we consider, for instance, the case of citizens who need medical care and drugs and who cannot afford them, and to whom these cannot be given for a lack of money. The old age pension, which people are asking for cannot be given because it would require some $800 million. It cannot be given for lack of money.
In our advanced age, it is possible and probable, even unavoidable that we experience a cycle of good times and bad times. I say this quite objectively, without necessarily putting the blame on the government. I, too, believe that we have reached some kind of crossroads in the organization of our economy, and we will have to decide shortly whether the economy must be organized by the governments on the basis of the common weal or on the basis of a single privileged class.
I point out, Mr. Speaker, that we are perhaps afraid of novelty, of labels, and I must admit, that myself, up to fairly recently, I was afraid of certain words, such as socialization, socialism and even Social Credit. At a certain time, I was worried about this. I would not say readily that we should now decide overnight, all of a sudden, that the country should adopt a socialist or the Social Credit philosophy. Besides, there is some and even much contradiction between the two. But I wonder whether we should not take the time to ask ourselves if those words or labels do not correspond to quite plain truths which cannot be disregarded, to ills
May 16, 1966

that we shall certainly not cure by hiding our head in the sand like an ostrich.
I think that the government is aware of this to some extent, because for the last few years, it has been fond of so-called social measures. But they are being implemented too fearfully and faintheartedly perhaps, because the government might be a little too afraid to upset our long-standing financial theories, to give rise to conflict with other countries with which we have financial relations.
I am seriously wondering whether the government would not be well advised to look into the theory advocated by our friends of the New Democratic Party, taking into account, of course, certain priorities. There should be no question, for instance, of nationalizing all Canadian industries, but rather of making possible perhaps a certain competition between state and private intervention and in fields where private enterprise is unable to meet the essential requirements of every member in all segments of the great Canadian family.
Mention was made a while ago of that type of insurance organization that drains money from the Canadian economy and then distributes it, not always equitably, and not always in the public interest.
I will give you an example. Restrictions have been put on the construction of small homes for the small wage-earner, because there is no money for him. In the meantime, in large Canadian cities, huge "people boxes" so-called "apartment blocks" are going up which are not half rented, sometimes not a third rented; they do not necessarily correspond to a need but, in some cases, help to evacuate buildings that are not always fit dwellings. Hundreds of millions of dollars are thus secured which could otherwise be channelled toward a priority need, dwellings for the small wage-earner with a family. The government could perhaps step into that sector of the nation's economy, take control of it, and certain other spheres, and straighten things out.
I revert to something I said a while ago. I am of those who shied away from some words for a while; I saw in them consequences of a local nature perhaps. I may have feared that nationalization in certain fields might lead to political influence which in some cases might have degenerated into persecution of political foes, into unwarranted pressures in fields where the government should not interfere. This led me to be very
Tight Money Policy
reticent about the idea of nationalization in certain fields. But, I must say, due to circumstances, Canadian public opinion has evolved in this respect. Moreover, such abuse as was known in the past, repetition of which might have been feared, can no longer occur in view of the general mentality.
I was impressed especially to see that one of the spokesmen of our Quebec clergy which, for a long time, had the reputation of being somewhat conservative-in the economic sense, not the political one-is today in the van of this theory, and accepts even readily that consideration be given to this trend toward socialization which will ensure a better distribution of the nation's resources to provide more efficiently for the essential needs of all our citizens.
Even if those ideas come from an opposition party, even though they are advocated with a certain tartness of speech and sometimes accompanied by votes of censure which are not very kind and not always justified, I believe the Liberal party, which is in office, should be a party which has an ideology like the N.D.P. whose members are Liberals in a hurry, and should quicken the step because the needs of the Canadian people are perhaps more pressing than ever and people are less prepared to be patient than they were in the past. In the face of this explosion in nearly all fields, the people call for these basic things to which they are entitled-lodging, food, medical care, education, their place in the sun-and reject this idea of a privileged class, which, because of an established and long-standing system, lives in luxury while others have to deprive themselves.
Therefore, I repeat that I do not know yet if I shall vote for the non-confidence motion. I should like to hear additional speakers put forward arguments for or against the motion, and I hope they will do so in the same constructive spirit shown by those who took part in the discussion up to now. However, I should like to suggest, as dispassionately as I can, that social legislation should be emphasized and stepped up-there are a few measures on the program-so as to provide all Canadians with basic medical care, necessary medicines, pensions for older people geared to the cost of living, funds necessary to young Canadians to acquire a proper education, in short what a family man needs to decently raise his family. Our government should be bold enough to consider measures it never envisaged before. The government should

May 16. 1966
Tight Money Policy
place less dependence on the advice of its financiers who believe in an economic gospel which, in my opinion, is outmoded, but pay more attention to those who realize today that the common good must prevail.
The Social Credit members are right sometimes when they say that anything which is physically possible should be made financially possible, especially when we see in our country millions of dollars idle or improperly distributed or distributed to the wrong people, in areas where people have already more than their essential needs, while in other areas, they have to do without the necessities of life.
[DOT] (5:00 p.m.)


Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I should like to express my full support for the amendment moved by the hon. member for Northumberland (Mr. Hees) and in particular as it pertains to the existing tight money policy. I was very pleased to listen to the hon. member who has an appreciation of the problems that exist in the Atlantic provinces and who, when he was a member of the former Conservative administration, always showed a keen awareness of Atlantic area problems and of the best methods to combat them.
During the years 1957 to 1963 the Atlantic provinces were the beneficiaries of a new federal government philosophy. The Conservative government was willing to experiment with new types of legislation which might well be the answer to the problems we have had since the formation of the nation in 1867. For instance, we saw the passage of the legislation providing for Atlantic provinces adjustment grants. We saw the passage of the Atlantic Provinces Power Development Act and of the Atlantic Development Board Act. These and many more measures were examples of a new federal philosophy applied to the Atlantic provinces because of the unique circumstances in that area of Canada.
Prior to 1957 we in the Atlantic provinces experienced an approach by the federal government not dissimilar to the approach being taken today, and the present approach frightens me, Mr. Speaker, because I hate to think that the federal government is once again getting into the rut in which it appeared to be during the 22 years from 1935 to 1957. Those were terribly hard times for the people of the Atlantic provinces. There was a high unemployment rate and few opportunities. Indeed, they were such difficult times that

they led the hon. member for Davenport (Mr. Gordon) to produce a book containing a recommendation that one-way tickets be provided to transport people from our area into more prosperous areas in the other six provinces.
In the election campaigns of 1957 and 1958 the people of the Atlantic provinces indicated in a very definitive way that this was not the kind of philosophy they desired from the federal government, and they assisted materially in disposing of the former government. In 1963 there was chaos in Ottawa, and I believe the people of the Atlantic provinces adopted the attitude that six or seven years in the wilderness might have taught the Liberal party a lesson and that it might adopt a different philosophy toward them. But in 1965 the people of the Atlantic provinces again indicated in no uncertain terms that they did not like the kind of attitude the Liberal government was adopting and once again gave their support to the Progressive Conservative party.
If ever there was an indication that the Liberal party is falling back into the old rut it was best exemplified by this year's budget. I should like to quote from an analysis of current economic conditions and trends published in April by the Atlantic Provinces Economic Council, which certainly could not be considered an arm of the Progressive Conservative party, the Liberal party nor any other party. It is an independent body which has the best interests of the Atlantic provinces at heart and endeavours to point out, quite effectively I think, ways and means improving the economy of the Atlantic provinces. I quote from its analysis:
There are a number of indications that pressures on the Atlantic economy are nowhere near as great as in other areas of Canada.
For example, the regional unemployment rate in the Atlantic provinces averaged 7.5 per cent in 1965. This was more than twice the rate of 3.6 per cent for the other six provinces, and even higher than the national rate of 7 per cent during the 1960-61 recession years when the national economy was operating at 91 per cent of capacity. Last year the ratio of national output to the economy's potential was 97 per cent.
This situation must be looked at in a different light than that existing in Ontario and the prairie provinces where unemployment rates averaged only 2.6 per cent last year. Within this region the unemployment rate ranged from 5.4 per cent in Nova Scotia to 11.3 per cent in Newfoundland. Although regional unemployment has a large seasonal element it never really got below 4 per cent last year.
While the employment picture has brightened considerably since the beginning of the current expansion in 1961-
May 16, 1966

I should like to draw hon. member's attention to that phrase, "the beginning of the current expansion in 1961"-not on April 8, 1963 as some hon. members on the other side would like us to believe.
-the improvement has not matched that in the rest of Canada.
[DOT] (5:10 p.m.)
Farther on the report states:
The number of claims filed for benefits under the Unemployment Insurance Act declined 4 per cent in the Atlantic provinces, 17 per cent nationally, between December 1964 and December 1965.
There is no indication from that statement that there is any boom in the Atlantic area. With reference to the budget of the Minister of Finance (Mr. Sharp) the report goes on to say:
It would appear that little real consideration was given in the federal Budget to regional economic differences.
This is the problem which we face in the Atlantic provinces and the problem which this government is unwilling to face up to. Tight money is strangling the economy of the Atlantic provinces. It strangled it in 1955-56. I well remember the present member for Victoria-Carleton (Mr. Flemming), who was then premier of New Brunswick, talking about the damage the government of that day was doing to his province and to its economic prospects. He referred to it as the castor oil treatment. He said that the Atlantic provinces were being given the same dose of castor oil that the government considered the rest of Canada needed, just as a mother who had ten children would give all of them castor oil because one of them needed it. We are getting the same castor oil treatment today that we received then and it has the same result in slowing down our progress. This is the great danger, the frightening thing the government is doing at the present time.
I do not wish to leave the impression that we are not progressing in the Atlantic provinces today; we are. I do not wish to leave the impression that this government has done absolutely nothing to assist, because that is not correct. What I am saying is that it is not doing enough and is not adopting the right philosophy to continue us on the road to the prosperity we all are working so hard to achieve. Also, I am saying that our people have a right to expect the same kind of opportunities in our area of Canada that people in any other area of Canada have a right to expect. We do not ask for any more;
Tight Money Policy
nor do we expect to receive any less than anyone else in Canada expects to receive.
If the government continues to apply this tight money policy in a blanket way across the nation, great damage will be done to the economic prospects of our area of Canada. I think the report of the Atlantic Provinces Economic Council points this out in very realistic terms when it says:
The local effect of possible reductions in business investment spending is also a question mark. Should national and international firms regard projects in this region as being marginal in relation to those undertaken in other parts of the nation, the region's future economic growth could suffer heavily.
In other words, Mr. Speaker, the great industrial firms of this nation and the great international firms who are doing business in Canada have priorities and today they can secure only so much capital. They have to make a decision in respect of where they are going to spend that money. The great problem we face is that they are going to decide not to go forward now with their proper expansion in our area by reason of the difficulties in securing funds on a national level because of tight money.
The Economic Council of Canada, established by this government, has recognized the problems associated with the Atlantic area. They have said that the present government while slowing down the boom, could use its fiscal policy if it desired to do so to see that economic expansion continues in the Atlantic provinces where it is needed. The Atlantic Economic Council report put it in these terms:
Since fiscal policy, compared to monetary policy, is more capable of application on a regional basis, it seems unfortunate that the federal authorities did not give more attention to the potentialities of the Budget for attaining the economic and social objectives of the less prosperous areas of Canada at a time when the national economy is indeed booming.
It was a most unfortunate thing. There was no indication whatsoever by the Minister of Finance that he was going to treat the Atlantic provinces differently from the most prosperous area of Ontario or British Columbia or Alberta. We are all in the same package. The one policy applies, whether or not it should apply. This is the old Liberal philosophy, the philosophy which the present Minister of Finance no doubt had a good deal to do with developing and maintaining when he was the deputy minister of trade and commerce prior to 1957.

May 16, 1966
Tight Money Policy
The sad part of the situation, Mr. Speaker, is that things in the Atlantic provinces today are different from what they were in 1957. There is a good deal more hope in the minds of the people today and a good deal more aggressiveness is being shown by them in what they are endeavouring to do. I hold in my hand the Nova Scotia Newsletter issued in December, 1965, by the Department of Trade and Industry. The headline is "Boom Year 1965". At one point it says that there has been a 26.6 per cent increase in capital investment in Nova Scotia.
New capital investment reached $337,000,000, an increase of 26.6 per cent over 1964.
Manufacturing shipments showed a 6.5 per cent increase for a total value of $535,000,000.
Employment increased and the average weekly wage and/or salary rose to $73.76, an increase of 4.3 per cent.
In other words, we see that we are moving ahead in Nova Scotia, but we also recognize the fact that we are not moving ahead as fast as the more prosperous areas of Canada. Indeed, we must move ahead even faster in order to make up for the years when we fell behind so badly.
It is a crying shame that when the budget speech was delivered the only thing we could look to was a postponement of the New Brunswick-Prince Edward Island causeway. There was nothing of a positive nature to recognize our special problems. There was only a negative step which certainly will damage or economic prospects this summer.
[DOT] (5:20 p.m.)
The government and the Minister of Finance found it very difficult to convince the people of the Atlantic provinces that there was anything in the budget which would be of assistance to them. Soon after the budget was delivered a headline appeared in the Halifax Chronicle-Herald, of March 31, 1966, reading "N.S. Could Gain $27 million In Equalization Payments", with the subheading "Formula Under Study". This is a copyright story written by Eric Dennis and it refers to government sources in the Department of Finance without naming any specific individual.
The story outlines what might be made available to Nova Scotia in 1967 but makes no reference to anything contained in the Budget for the people of Nova Scotia in 1966. I hope that we may look forward to obtaining something in 1966 but apparently the people can only benefit if they ride along a little longer with the Liberal party. We are sick of 
pie in the sky promises and hopeful proposals that far too often never materialize. We are looking for concrete proposals which can be implemented immediately to assist us in our efforts to progress, but these proposals are not forthcoming.
Having regard to the Liberal philosophy in relation to manpower mobility, so far as the Atlantic provinces are concerned this means, as suggested by the hon. member for Davenport, a one-way ticket out of the area. These tickets can either be purchased on a time payment plan or perhaps obtained free in some manner from the government. One thing that is certain is that the people who live in the Atlantic provinces live there because they want to. They recognize that in order to live there they must be satisfied with lower wages and a lower standard of living, and to do so they are willing to make those sacrifices. Any program designed to provide the so-called one-way ticket out of the area is one that will not be adopted quickly by the people there as long as there is any hope for survival. I suggest there is still that hope.
I placed a question on the order paper in an effort to obtain some information about the success of the manpower mobility program. All I have been able to discover is that the government spends more money advertising the program than it does by the way of grants and loans. Surely that is an indication of the success of this program. The greatest interest in the manpower mobility program has been taken in the provinces of Ontario and Quebec where the people, like those of the Atlantic provinces, have a close feeling and affinity for their birthplaces. These people want to remain but they want to do so with the opportunity to make a living. The provincial governments in the Atlantic provinces are willing to do everything possible to provide employment opportunities in these provinces but in order to do so they must have the understanding and co-operation of the federal government. They are not obtaining that understanding or co-operation.
In 1955-56, when the last tight money policy was implemented, we encountered a recession. This was a direct result of the government tinkering with the fiscal and monetary policy of the nation. Let us hope that the boom we are enjoying today will not change to a recession. We in the Atlantic provinces are the last to feel the effects of prosperity but the first to suffer the results of a recession.
May 16, 1966

Many difficult problems must be faced by the governments in our provinces. The United States government is closing down an air base in Newfoundland. An iron mine is also to be closed in that area. These are difficult problems with difficult results which must be faced by that province. Such problems demand the greatest attention on the part of provincial governments and can only be solved through close co-operation on the part of the federal government.
In the province of Nova Scotia the government is continually faced with a problem relating to coal. At the present time there is a difficulty associated with the steel complex in Nova Scotia. The loss of this industry would do irreparable damage to the economy of that province. These problems cannot be tackled by the provincial or federal governments alone but demand the kind of co-operation that has not existed to any degree in recent years.
The same sort of difficulty exists in the provinces of New Brunswick and Prince Edward Island. Stability in the agricultural industry there can only be maintained if certain legislation is brought forward and passed by this house. The government has been slow and hesitant to move forward in this direction. We are not receiving the kind of attention we need in order to progress to that degree we feel we have a right to expect. The tight money policy being applied by this government on a national basis is doing tre-mondous damage every day it exists in its present form.
[DOT] (5:30 p.m.)
This government does not recognize the special problems existing in the Atlantic provinces and until it does much of the progress made by provincial governments through progressive legislation will be undone. I can only say that we must hope for a change in philosophy or we cannot be certain of the outcome for our people. I hope the Minister of Finance will reconsider his tight money policy as it applies to the Atlantic provinces. I hope he will take the advice of the Economic Council of Canada. I hope he will take the advice of the Atlantic Provinces Economic Council. However, I am indeed fearful that he will not take advice from anybody but will continue the philosophy he adopted when he was a bureaucrat in the last Liberal administration and which he now perpetuates as Minister of Finance.
23033-329J
Tight Money Policy


Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I should like to participate in the debate on the amendment introduced by the hon. member for Northumberland (Mr. Hees) which I submit is a very general motion dealing with the tight money policy as it concerns housing and urban development in this country. I have been one who has been most interested in this field for quite a number of years both before and since coming to this house. I suggest to hon. members that we all know that priorities have their place in the field of housing and urban development. I submit, as a result of condensing a great deal of experience into the short period of six or seven years, that the housing dollar has to be spread where it is most needed.
As the Minister of Finance (Mr. Sharp) stated in his budget address, during these times of tightening up a little on the finances of the country it is natural that one of the fields to be affected is the field of housing generally. It has been the private mortgage field that has been affected most because the private lender has been withdrawing from the field in order to put pressure on the government to bring about an increase in the interest rate on N.H.A. mortgages. The minister in charge of Central Mortgage and Housing Corporation knows that I have been opposed to any increase in interest rates on N.H.A. mortgages. In fact, I was opposed to the increase from 6J per cent to 6f per cent.
I suggest that we cannot forget we are experiencing today a dry run so far as mortgage loans from private lenders are concerned because they want to pressure the government into increasing the rate of interest. This cannot be denied, and I feel these people will not deny it.
However, I should like to review briefly the amendments introduced in June, 1964, to the National Housing Act. I doubt that anyone can challenge the fact that in no field has this government shouldered its responsibilities in a more determined fashion than it has in the field of housing. Since these amendments were passed the average Canadian family has been able to build or rent accommodation suited to the needs of that family and their finances. The sweeping changes that were made to the housing legislation also spelled out new hope for those who need to find decent housing for their families, and here I am speaking particularly of the low income groups and the elderly citizens of this country.



groundbreaking ceremonies for a senior citizens home in the city of Hamilton last week. This home is to provide housing for the elderly citizens of the city of Hamilton as well as citizens across the country. The federal government made a 90 per cent loan at low interest rates. These moneys have not dried up, so let us not be fooled into thinking that any tight money policy to control the economy is affecting funds which are made available to help our elderly citizens and low income families. That is not the case.
There is also in the 1964 amendments provision for a program of land acquisition and servicing for public housing purposes in advance of the development of the projects themselves. This new legislation provided loans, again from the federal government, of up to 90 per cent for this purpose. That is why I say that nowhere has this government shouldered its social responsibilities with more determination than in the field of housing, particularly public housing which is geared to low income families and our elderly citizens.
Again, in the legislative amendments of 1964, Mr. Speaker, assistance was made available for non-profit corporation housing. What did this mean? Organizations like the Lions Club, the Kiwanis, to which I belong and which has constructed an elderly citizens home under this legislation in the city of Hamilton, were able in servicing their communities, if they wished to, to construct low-income housing or apartments for elderly citizens with substantial loans from the federal government through C.M.H.C.
To do this a new section was added to provide for 90 per cent loans to non-profit companies, such as service organizations, for housing projects, either used or new, for low-income persons or families who are not eligible for public housing but are still unable to find suitable accommodation at rents which they can afford to pay. Therefore
C.M.H.C. was able to make loans to such companies to finance projects comprising not only self-contained student units but hostels, dormitories or any other combination of accommodation. Again, Mr. Speaker, funds are still available to these non-profit organizations for building this type of accommodation. There has been no drying up of these funds.
What about the case of loans to owners of existing houses in urban renewal areas? For the first time, under the amendments to the urban renewal legislation provision was made for C.M.H.C. to grant mortgages to owners of
Tight Money Policy
existing houses in urban renewal areas. I for one wish to see this legislation extended, I hope very shortly, to all existing houses. These loans are available to owners who apply and there has been no drying up of these funds. The funds are still available. You need only go to Central Mortgage and Housing Corporation if you wish to apply for such a loan and C.M.H.C. will take your application.
One of the most important facets of the National Housing Act has to do with university housing for single students and for married students with families. This sort of construction is occurring more and more on the campuses of the country. Again I speak of my own experience with McMaster University in the city of Hamilton where residences are being built for single and married students.
How was this vast growth possible? Under the amendments of 1964 C.M.H C. may grant loans to universities, colleges, co-operative associations and charitable corporations to assist in the construction or acquisition and conversion of accommodation for university students and their families. This accommodation may include the provision of self-contained units as well as hostels and dormitories. For this purpose the maximum amount authorized to be paid out of the consolidated revenue fund was increased to $150 million from $100 million. Provision was also made in this legislation to increase the maximum charge on the consolidated revenue fund for direct lending by C.M.H.C. to $2.5 billion from $2 billion.
What else did this legislation do, Mr. Speaker? It increased loan ratios for N.H.A. insured loans, making it possible for more families to purchase homes with a lower down payment.
I touch on these points briefly to bring to the attention of members of the house and the Canadian public that when a general motion such as this is moved in this house-in fact, I think the hon. member for Northumberland (Mr. Hees) spoke for only six or seven minutes-which alleges there is a tight money policy in effect, and then arguments are made which leave the impression that there is in existence a tight money policy, the people must be made aware of all facets of the economy of the country. It is incumbent upon the provinces, the municipalities and the people to take advantage of the amendments passed in 1964 relating to public housing and urban development programs, and it is important that they are made aware of the fact that the funds provided under these

May 16, 1966
Tight Money Policy
amendments have not dried up but are still available.
As I said earlier, Mr. Speaker, this house in 1965 approved an amendment which increased the funds provided by the legislation in 1964 by an amount of $300 million in order to carry out the purpose and intent of those amendments. So again I reiterate that there is no shortage of money for urban renewal; there is no shortage of money for public housing; there is no shortage of money for university housing accommodation; and there is no shortage of money to house the elderly citizens of this country. All one need do is to apply for assistance, and the co-operation which I know has been extended by C.M.H.C. to the provincial governments and the municipalities will be similarly extended to all applicants.
There is also no shortage of money for federal-provincial projects with respect to rental housing related to income, the so-called geared to-income housing. The federal government has such funds available and there is no drying up of funds for this purpose.
If I go on at length, Mr. Speaker, about housing and urban development legislation passed in 1964 it is because I want to dispel any suggestions which may have been put forward by hon. members opposite to the effect that there is a general drying up of funds to assist a very important sector of our economy, namely funds for housing for our low-income	groups-the geared-to-income
housing for low-income families and the elderly citizens of the country.
I for one have been greatly interested in the question of urban renewal, and I feel that our provinces and cities have to move to institute a crash program across the country. I have just returned from a 10-day tour across the country as a member of the transportation committee of this house, which has been holding hearings relating to the C.P.R. passenger service. While in the western cities we made ourselves aware of certain problems presently existing.
[DOT] (5:50 p.m.)
I, with my interest in housing and urban development, have noted that in cities such as Vancouver and Calgary, and even in smaller cities such as Brandon, Moose Jaw, Medicine Hat and Winnipeg, urban renewal schemes have been undertaken or are in progress. It

would be sad if the impression were left from anything said in this house that funds available for such projects had in fact been dried up by the federal government. That is not the case. I suggest that if a province or a municipality falls down with respect to urban renewal or public housing, for which there is a great need approaching emergency proportions, then it is the fault of such province or municipality. It is a local problem.
I have said in the house before and I now reiterate that the federal government should set up a department of housing and urban affairs to help, together with the provinces and the municipalites, in the solution of the urban problem. I do not ask the government to encroach on other jurisdictions. We must take a broad outlook at the real problem concerning housing and urban renewal. I am sure that if the provinces and municipalities can co-operate under the present legislation there is no reason why they could not cooperate with the present government if a department of housing and urban affairs were set up. We need co-ordination in that respect.
Although housing and urban renewal are the particular prerogatives of the provinces and municipalities, I must nevertheless commend the Minister of Labour (Mr. Nicholson), who is responsible for Central Mortgage and Housing Corporation and for the administration of the National Housing Act, for his action in going across the country when these amendments were passed in 1964 and holding in conjunction with the provinces what were termed "symposiums". These were held not only with the provinces and municipalities but with public service organizations, service clubs and other people across this country and had to do with the legislation which had been passed in 1947. In effect he said to all those attending: Do it and we will help you; the funds are there, so kindly make an application; should you fall down on this job, then you have only yourselves to blame.
I say again that my main purpose in rising to take part in this debate is to dispel the impression left by the generalized amendment now before us with respect to the work which has been done in the fields of urban renewal and public housing, particularly as they affect low income groups and elderly citizens. I want to dispel the impression left by some members opposite who wish to portray across this country that the government has dried up the source of funds to do this important work. That is not the case.
May 16, 1S66	COMMONS
It ill behooves any of us in this house to try to create this impression throughout the country. Public housing is an important field. A lot of work has been done in this field. When I heard the hon. member speak of the tight money policy, and here I am relating my remarks to housing and urban renewal, I at once thought of the niggardly increase from $25 million to $50 million made by the former government in the years from 1957 to 1963 with respect to urban renewal and public housing.
I think hon. members opposite should be the last to talk about a tight money policy as it affects housing and urban development across this country. During the period from 1957 to 1963 the only amendment to the National Housing Act for urban renewal purposes was an increase in the statutory limitation from $25 million to $50 million. If that was not tight money or a retrograde step in urban renewal in this country, I do not know what was.
The bill before the house in 1965 sought to amend the National Housing Act further to increase to $300 million the funds available for purposes of urban renewal and for the purposes of public housing that accompany urban renewal. Passage of the bill by the house assured that Canadian urban renewal projects would boom, as they have done. This program involving housing for our low-income groups-


An hon. Member:: Six o'clock.


Joseph Angelo Macaluso: -was introduced to make sure that there would be no restriction through lack of funds in carrying out those worth-while objectives.
I feel very strongly about urban development in this country. In my view we have fallen behind a great deal. I do not say that the government should take all the credit for the improvements brought about by the 1964 amendments but I do feel that credit ought to go where it is deserved. I believe that credit should be given to the government for bringing in a crash program, for bringing forward the amendments of 1964 and for providing the funds to implement the amendments.
More has to be done in the fields of public housing and urban renewal. More can be done. The provinces, the municipalities and the federal government have been working together and must continue to work together closely.
DEBATES	5193
Proceedings on Adjournment Motion
Finally, Mr. Speaker, may I again say that my purpose in rising to speak on this particular question is to refute the impression being sought to be conveyed that a tight money policy affects housing and urban renewal development in this country. The money is there. All the provinces and the municipalities have to do is ask for it.


Mr. Hales:: May I call it six o'clock.


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Speaker:: Order, please. Before an hon. member calls it six o'clock, I should bring to the attention of the house that the following subject is to be considered this evening pursuant to provisional standing order 39A: The hon. member for Kootenay West (Mr. Her-ridge), Power-Columbia River-reported increase in anticipated cost.
Pursuant to special order made earlier this day 1 do now leave the chair, it being six o'clock.
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.
Alfred Dryden Hales: Mr. Speaker, I welcome the opportunity to make a few remarks on the supply motion now before the house, and particularly the amendment moved which embodies the very important economic matter of loans for house building in Canada. Before I proceed further I should like to draw to the attention of my hon. friend from Hamilton West (Mr. Macaluso) to the fact that he seemed to stray from the amendment, and in order to put the record straight I think it would be as well to

May 16, 1966
Tight Money Policy
read the amendment that is before us. It is as follows:
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.
There is nothing in this motion that deals with loans for the building of residences for universities.


Joseph Angelo Macaluso: On a point of order, Mr. Speaker, I would draw to the attention of my hon. friend that if I had strayed from the subject matter of the motion the Chair would have drawn this to my attention.


Mr. Bell (Carleton):: That is not a point of
order at all.


Alfred Dryden Hales: I doubt whether that is a point of order. However, Mr. Speaker, the fact is that the hon. member discussed at great length the amount of money available for the building of residences on university campuses. We do not argue this point. We are talking about direct mortgage loans available to individuals. As a matter of fact, amendments to the National Housing Act permitting universities to build residences were introduced by the Conservative government in, I think, 1961. This legislation provided for an interest rate of 5 per cent, over a period of 50 years, and I am happy to say that practically every university in Canada has made good use of this program.
When talking about money being lent in order to build university residences, and the tight money policy of this government, I should like to point out that if the government were to examine some of the residences being built on university campuses, I am sure they would realize that these residences could be built for less money, be less luxurious, and then more money would be available for the building of homes.
Direct mortgage loans being reduced by 15 per cent is, when compared with the figures of 1965, a very, very serious situation in this country. If my hon. friend from Hamilton West does not realize just how serious this matter is, I would suggest that he sit down with the builders in his community, as I did a few Saturdays ago, and he would realize the problems they face. The builders certainly brought to my attention how serious the problem is. The men in the home building

industry are very, very concerned. Small builders are being put out of business. I refer to the man who builds five to ten homes a year.
The big builder seems to be getting enough mortgage money, but I am concerned about the small builders who face a very, very serious problem. I cannot understand why the minister cut by 15 per cent the money available, the same time as approved lenders were curtailing their loans. Here we have the two lending bodies drawing in the available money all at once. Why did not the minister wait to make his 15 per cent curtailment of funds until after the conventional lenders reduced the amount of money available? But here the two things happened at the same time, creating a drastic and serious situation as far as home building in Canada is concerned.
I do not think there is a member in this house who has not had representations made to him by builders in his community as to the serious problem created by the shortage of mortgage money. The president of the National House Builders Association had this to say in a telegram sent to the Prime Minister (Mr. Pearson):
[DOT] (8:10 p.m.)
Reports received today from member associations indicate further disruption and curtailment of employment due to lack of mortgage funds. Examples Winnipeg quote lay-offs by quality builders 120 shop labour. Other typical lay-offs 30, 35 and 15 respectively. Lakehead quote six builders report reductions in carpenter and labour force from 322 total to 57. Victoria quote 75 carpenters unemployed as compared to 14 this time last year. Calgary quote most home builders laid off approximately 10 per cent trades. About 75 per cent will have to be laid off in approximately 1| months. Ottawa quote Ottawa builders alarmed over prospects for next three month period. Montreal quote curtailment in excess of 70 per cent. Hamilton survey of eight builder firms indicate average lay-offs of 38 men per firm.-


Mr. Winkler:: Would the hon. member permit a question? Did he say this was in Hamilton?


Alfred Dryden Hales: Yes.


Eric Alfred Winkler: Would the hon. member mind repeating that for the benefit of the hon. member for Hamilton West (Mr. Macaluso)?


Alfred Dryden Hales: I think he should realize the situation in Hamilton. The telegram sets out the situation in the building trade today. In light of this, let us review the actions of this government, which asserts that it instituted
May 16, 1966



the war on poverty. Granted, its actions were copied from the Americans; but here we have the government doing the very thing which will bring about poverty by curtailing building funds.


Some hon. Members:: Shame.


Alfred Dryden Hales: I have the figures before me for the month of April in my own locality. The Guelph N.E.S. office listed 22 males unemployed in the construction industry, at the very time of year when these people should be busy at their trade. But they are unemployed because of lack of mortgage funds.
I am told that only one out of every five applications for direct mortgages is being granted at present. That is how serious the situation is. I am told that the rich can get mortgage funds but that it is very difficult for the average working man to get a loan. It is true that loans are available for apartment houses. Other loans are available for large, luxurious office buildings; but is that what we need the most in Canada today? I say that we want money to build homes for individuals.


Some hon. Members:: Hear, hear.


Alfred Dryden Hales: I am told that the large-scale builders can get loans, but the small builder, the man who builds five or ten houses a year is not able to get loans, and this is very serious for him. I am also told that large-scale builders who have reached the saturation point in their own areas are now moving into my own area to build houses, and that this is creating a real problem for the small builder.
I would recommend to the government that first and foremost it should not curtail by 15 per cent direct mortgage loans as compared with last year. They should provide the same amount of money as was available last year, especially at this season of the year. It should not postpone its decision on this until next winter or next fall. Now is the time when builders need and want mortgage money, and if the government wishes to impose this 15 per cent reduction it should postpone its enforcement until later on in the year. Let's get building-now.
There are many areas in Canada in which abnormal expansion and development are taking place. These areas need homes more than other areas. In this connection I think of my own community of Guelph, which is a university town, expanding at a great rate,
Tight Money Policy
bursting at the seams every place one looks. Yet additional loans are not being made available in this area. It receives the same amount of loans as other areas which are not expanding so quickly. I urge that more loans be made available, not necessarily residences for the university, but for university professors and others who wish to build their own homes in various parts of the city. There are many areas of Canada in the same position. There are areas in which great mining development is taking place, such as those areas in Saskatchewan where potash is being mined. There are many such areas as I have mentioned.
I am not so sure that money is so tight, because one member of the government the Secretary of State wants to spend $6 million to buy a painting for the National Art Gallery. That $6 million would build 300 $20,000 homes or 600 $10,000 homes. How tight can money be when people on the government front benches can talk in terms like that? If money is scarce maybe it is time we began operating on a priority basis. I think No. 1 on the list of priorities would be to put a roof over a man's head and give him a place in which to live. Believe me, Mr. Speaker, if this situation is not corrected, before long people are going to be living in tents. That is how bad it is becoming in some areas of the country.
If we are going to give some thought to a priority basis perhaps we should consider how easy it is at present to get loans to buy cars, appliances, and for travel at a time when money is being curtailed for loans to allow a man to build a home for his wife and family.
I am concerned about the married man with small children who may be earning $85 to $100 a week. Where is this fellow going to live? He cannot get into an apartment house because in many cases they do not accept young families. He cannot rent a house because there is a shortage of such accommodation. This is a mighty serious situation today and it applies in many areas across the country. At present I think those who desire to build, and need a loan, have to be in the $6,000 a year bracket, receiving about $120 per week income, in order to get a loan for a house costing approximately $18,000. It is a serious situation and needs every ounce of thought and research that we can give it.

May 16. 1966
Tight Money Policy
I would like to see the minister responsible for the National Housing Act give greater thought to research on building construction and supplies because I am sure there must be some cheaper way in which we can build. I am not seeking loans for speculator builders, but I am speaking for those people who really need a home, who have made an application, who have qualified and yet are told they cannot get a loan because there is a 15 per cent cutback in the amount available.
So, Mr. Speaker, I conclude by saying what I said at the beginning. I am happy to have had this opportunity to make these few remarks with respect to the curtailment of loans for building and with respect to the tight money policy which the Liberal government is imposing on the people of Canada. I am also happy to give my wholehearted support to the amendment before the house.
[DOT] (8:20 p.m.)


Joseph Angelo Macaluso: Would the hon. member allow a question? I am sure he would like to answer one. Would he give us his opinion as to why the private sources of mortgage funds, such as the insurance companies and some of the trust companies, have dried up their own particular source of investment money in the house building trade? I ask this question to obtain what information he has.


Alfred Dryden Hales: You are asking me for an opinion. First of all, it is because of the tight money policy of the government. Second, they are putting this money into apartment houses and office buildings where they have a nice tidy arrangement of one building rather, than a group of homes on which they have mortgages. This is the reason the approved lenders are interested more in this type of building than they are in homes.


Joseph Angelo Macaluso: It is because they are trying to force the interest rate up higher than it is now.


Eric Alfred Winkler: Why do you not confer at home?


Mr. John Gilbert (Broadview):: Mr. Speaker, the members of my party support the amendment which has been put forward by the opposition. The reason we do so is that it lays an emphasis on the real problem which is causing concern among many Canadians today, that is, the lack of housing. The hon. member for Hamilton West (Mr. 
Macaluso) made a very spirited defence on behalf of the government, but his main emphasis was with regard to amendments to the National Housing Act which were passed in 1964 and which concerned urban renewal and low cost housing, and housing for the elderly. These are very important matters, but as the previous speaker said, the main problem at the moment is getting direct loans for housing.
We feel the problem is not so much one of tight money, but rather that the government lacks a clear-cut policy with regard to housing today. For a moment I think I should dwell on a few of the remarks made by the hon. member for Hamilton West. He made quite an issue out of the fact that there is $300 million available which has not been picked up by the municipalities and provinces with regard to the projects he set forth.


Joseph Angelo Macaluso: Which has yet to be picked up.


John Gilbert: He asked the Minister of Labour (Mr. Nicholson) to cause to be set up a separate department for urban affairs and housing. When last week the Prime Minister (Mr. Pearson) presented a resolution in respect of the re-organization of the departments, a real opportunity presented itself to bring forth this new department to act as a liaison between the federal department and the provinces and municipalities on some of these problems. It seems rather odd that there would be $300 million available and that the provinces and municipalities would not make full use of it. We want them to make full use of it.
Perhaps I might mention an example in the city of Toronto and the riding I represent concerning the housing situation in Canada. The three levels of government have started an urban renewal project in my riding. It is amazing how much time it has taken to develop. One of the main reasons for the delay was the lack of consultation between the authorities in the interests of those who were being expropriated. One of the main problems these people are facing is that of compensation. The federal government took the easy position that it is only the banker, that it puts up the money and plays no part in awarding compensation.
The people feel that three elements should be embodied in compensation. Not only must there be consideration of the fair market
May 16, 1966

value, but also a relocation expense should be allowed. Then there is the compulsory taking aspect. At one time there was a 10 per cent allowance for this, but now it is not allowed. Judging from the experience we have had in Broadview, no wonder people are not jumping into some of these urban renewal projects. They are being offered prices which are at least 25 per cent below what they would have to pay for comparable homes in another area.
It is very disappointing when we see the Minister of Finance (Mr. Sharp) bringing forth his budget in which he asks for a reduction of 10 per cent in government building, and only a small reduction with regard to private capital in housing. The statement of the minister on May 3 with reference to the 15 per cent reduction in connection with direct loans for the year 1966 is very disturbing. When one looks at the Central Mortgage and Housing Corporation report for the year 1965 he finds there were 166,565 housing starts compared to 165,658 for 1964, an increase of .5 per cent compared to 11.5 per cent in 1964 and 14.2 per cent in 1963.
It is obvious that the trend is downward, and this should not be. When you add the 15 per cent reduction this year, it becomes a very disturbing picture. As a new member I looked upon the Minister of Labour (Mr. Nicholson) as a man of concern and compassion. I happened to read an article concerning a speech he made in Toronto in December 1964, when he said:
For all the talk about what we intend to do, for all our efforts, nearly 100,000 Canadian families live every waking moment of their lives under housing conditions that are really appalling-a disgrace to the communities in which they reside. The same 100,000 families cannot find other accommodation on the open market at rents they can afford to pay, and 20 per cent of all our occupied dwellings have very primitive bathing and toilet facilities. This, I suggest, is real poverty.
And quite apart from the despair and degradation of blight and decay, these neglected areas impose an unnecessary drain on the civic economy. Municipal services and other facilities cost more to provide, while assessments must decline. The extra overhead is subsidized by the taxpayers of the entire municipality-assessments must be increased in good areas to offset diminishing tax revenues in the run-down neighbourhoods.
This is a statement made by the minister in 1964. You get the picture for 1965 of a .5 per cent increase, and now he is asking for a 15 per cent decrease from the 1965 picture. Not only that, but the cost of houses financed
Tight Money Policy
under the act increased in 1965 as it has in each year since 1961 because of the increase in the price of materials and wages, and the high cost of land. In 1965 the average cost of an N.H.A house was $17,402 as compared to $16,478 in 1964, an increase of $924.
The president of Central Mortgage and Housing Corporation in his report indicated that the average income of a borrower under an N.H.A. loan was $6,655; the average age was 35 years and the borrower had two children. How many Canadians earn $6,655 per year and can qualify for a loan under the provisions of this legislation? I suggest that these provisions are too restrictive.
[DOT] (8:30 p.m.)
The ceiling on N.H.A. mortgages was increased from $15,600 to $18,000 last year. That is an increase of $2,400. The interest rate is now 6| per cent, having increased in the past years from 5 per cent. The interest rate on conventional loans now stands at 7| per cent, or 1 per cent higher.
The president of C.M.H.C. indicated that 65 per cent of all new houses were being financed by conventional loans from insurance and trust companies, whereas 35 per cent are financed through N.H.A. loans. It seems to me that this situation should be reversed, and that 65 per cent should be financed under N.H.A. and 35 per cent by conventional loans.
When one realizes that an individual who has a mortgage of $18,000 at an interest rate of 6j per cent would have to pay $1,200 per year in interest or, as the last speaker mentioned, if a worker earns $100 per week it represents three months' work per year, he must also realize that housing costs are too high. In most cases housing mortgages run for a period of from 20 to 30 years. A man now 40 years of age who wants to buy a home will be 60, 65 or 70 before he has paid for it, and will have paid twice the original cost of his house as a result of the high rates of interest.
The lack of a housing program on the part of the government gives little or no opportunity for elderly people to purchase houses. People who have reached the twilight years of their fife are being forced to live in rooms at high rents. The government should take the initiative to make sure that these senior citizens are taken care of in their latter years.
It is obvious that the average income in Canada today is so low that the majority of

Corporation, for a nation-wide housing program in order to take a great deal of the weight of responsibility off the shoulders of conventional lending institutions.
[DOT] (8:40 p.m.)
If there were a war, I am sure that Canadians would not hesitate to contribute to such a worthy cause as housing. Housing has become an urgent problem and the government must take immediate steps to solve it. We must take immediate steps also not only with regard to new homes but also with regard to older homes. In the riding of Broadview, which I represent many of these folk who are being ousted because of the urban renewal project are people who range in age between 55 and 60. They do not want to go to the suburbs but want to buy city homes and are faced with 8 per cent mortgages. There is a duty on the government, especially with regard to people who are being replaced because of urban renewal projects, to give them interest rates no greater than 64 per cent. This is something that should be done, and done immediately.
As the hon. member for Northumberland (Mr. Hees) said, the way housing is financed in Toronto today is that you get a valuation of 87 per cent on the house and you have to pay a very high interest rate of 8 per cent. You also have to pay a 2 per cent insurance fee, plus an application fee and a legal fee. Is it any wonder that Canadians are unable to buy homes these days?
One final word, Mr. Speaker, and it is with regard to home improvement loans. The best defence that we can take with regard to blighted areas is to have homes in good repair. Under the National Housing Act loans were given to people for repairs. According to the report of the president of Central Mortgage and Housing Corporation, from 1961 to 1965 there has been a steady decline in home improvement loans. People should be encouraged to take these loans for home repairs because, as I said, the best defence we have against an area becoming blighted is to have homes in good repair. I could not help but agree with the hon. member for Northumberland, the former member for Broadview who certainly took a very active interest in constituency problems, when he said that Canadians deserve good homes. This gives them a sense of pride and achievement. These are the things we shoud work for, strive for, to make this a better Canada.
Tight Money Policy


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: Although
it is very tempting, Mr. Speaker, I have no intention of entering into a controversy, even to the slightest degree, with my good friend the hon. member for Wellington South (Mr. Hales) who was a little more belligerent tonight than he usually is, or even to discuss the preamble of the hon. member for Northumberland (Mr. Hees) when introducing his amendment. I thought the young Conservatives were rather harsh with the former minister over the week end, particularly when one said to him, "This is the Pepsi generation, George, and you had better believe it". I suppose the hon. member for Northumberland, in referring back to incidents in 1956 and 1957 was only keeping pace with the type of attitude or atmosphere that has existed far too long in this particular house. I can be this sanctimonious about members referring to the past because I have not been here long enough to dig into the past and refer to each particular member, and some of the problems of a generation ago.
The Minister of Labour (Mr. Nicholson) who is responsible for the administration of Central Mortgage and Housing Corporation, intends to speak before the debate is terminated tomorrow evening. I would prefer to leave it to him to refute some of the very thoughtful arguments which have been placed before us today, not only by the hon. member for Wellington South but also by the hon. member for Broadview (Mr. Gilbert). Looking through some of the clippings this afternoon, Mr. Speaker, I find that statistics, for what they are worth, are reassuring to those members who are afraid that, as a result of the curtailment of money, there will not be as many housing starts this year as last year. I thought the hon. member for Broadview was rather pessimistic, so I should like to refer him to an editorial that appeared in the Globe and Mail on April 29.1 quote:
In the first place, although builders and members of parliament seem convinced that there will be a decrease in the number of houses built this year, the first quarter, in fact, shows an increase. Starts on single detached dwellings were up 18.9 per cent during the first three months of 1966 over 1965, and up 23.8 per cent in March over March of last year; and, as Mr. Nicholson pointed out, last year was the record year for house building.
I refer specifically to single dwelling homes, but I was interested in the remarks of

May 16, 1966
Tight Money Policy
the president of Central Mortgage and Housing Corporation, Mr. H. W. Hignett when he addressed the National House Builders Association and suggested that by 1970, 70 per cent of adult Canadians will be either in their twenties or older than 65, the ages of apartment dwellers. He left that association with the thought that perhaps the time had come for builders and the government to put the emphasis on a different style of home. Obviously by 1970 the plight of our senior citizens will be even more acute than it is today.
I think the recent report of the Senate committee on aging, which I believe is a rather historic document and one which will be to the everlasting credit of the Senators who worked on it, stresses the plight of the senior citizens of this country. Mr. Jean Lupien, vice president of Central Mortgage and Housing Corporation said to the same House Builders Association that they had become too dependant on government agencies for the flow of funds and that they were not meeting the real needs of Canadians for housing. Mr. Lupien is an expert in the field, and I am not. He says this:
You are trying to impose the wish for a house on people who cannot afford it. You put the houses away out where they create transportation costs for the buyers and you add to municipal problems.
I can only speak with some knowledge of my own community, Mr. Speaker. In a country as large as Canada, I realize that problems in the field of housing vary tremendously from area to area. I come from a province which should hang its head in shame, the province of Quebec, in so far as its approach to housing is concerned In this House of Commons, I represent the city of Verdun, a constituency of 90,000 people which has yet to build or stimulate the building or create the incentive for the co-operative building of even the first home of any description for senior citizens. I think it is a shame and it underlines one of the main problems which we have in a country made up of 11 different governments.
[DOT] (8:50 p.m.)
In my community since 1962 I have been prodding the mayor and city council to take advantage of the terms offered by Central Mortgage, to no avail. In 1964, thanks to members in all parts of the house, I am sure, section 16A of the National Housing Act was amended to provide money by way of

loans up to 90 per cent of the purchase price of apartments, dwellings and homes for senior citizens and to those families of low income.
When that was done, once more I prodded my community to take advantage of this legislation, and I mention this because I am sure there are thousands of communities of which the same can be said. The 90,000 people of my constituency are concentrated in an area I could walk around in half an hour. They live in homes four or five storeys high, no less than three. The people live in rooms on $75 a month, in loneliness, in pathetic conditions, paying more than they can afford for a dingy room on the third floor.
Why is this so, Mr. Speaker? It is not because the federal government has not put the funds at the disposal of the provinces or the municipalities. It is not because Central Mortgage and Housing Corporation has not been willing to place at the disposal of interested parties their assistance and experience. It is because there has not been sufficient pressure placed on municipalities at the civic level to take advantage of the legislation waiting here in Ottawa.
I can talk, of course, only of conditions in my own riding and I have no right to pass judgment on other ridings. I cannot cry at all for the fellow down the street who is having a hard time deciding whether to buy an $18,000 home or a $22,000 home. I cannot get too excited about him. I am concerned about the senior citizen who cannot find a flat for $40 a month and has to leave his or her spouse and move in with the children. These are the people I am concerned about, and I am concerned because I know that money to assist them is lying idle in Ottawa because through indifference, callousness or through ignorance of the fact that it is available, communities refuse to take advantage of it.
Some hon. members may ask, why not do something about it in your community? Well, Mr. Speaker, I did do something. About six or eight months ago, tired of the procrastination of the city council, I wrote every organization in the city of Verdun-service clubs, the Lions club, Kiwanis, the Richelieu club and senior citizens organizations. Finally I organized representatives from 30 of these bodies into a committee on housing. We then marched upon city hall a month before the civic elections and presented a brief requesting that the city of Verdun set up a housing committee consisting of eight people, four
May 16, 1S66

representing the city and four representing the citizens, in order that we might eventually stir the community or the municipality into action and request relief from the federal government under section 16A of the National Housing Act. I might say, Mr. Speaker, that in this venture we were successful. Our brief has been read, council has acted upon it and the committee has been set up. Central Mortgage and Housing has been contacted.
The procedure, Mr. Speaker, is rather laborious because this civic housing committee must now contact provincial authorities to make sure that it does not become involved in one of these federal-provincial disputes, but eventually a request for housing for senior citizens in my community will come to Ottawa to be, I hope, approved, provided certain norms are met.
I am not interested in giving this government or the previous government credit; credit is not important. But when we talk about housing for senior citizens, when we talk about slum clearance or when we talk about urban redevelopment, I think Canadians must realize that the responsibility for the implementation of much of the legislation in connection therewith falls upon their shoulders, as well as on the shoulders of the hon. member for Verdun, or the hon. member for Wellington South (Mr. Hales), or the hon. member for Broadview (Mr. Gilbert), or any other fine gentleman in this house.
I know, Mr. Speaker, there are certain communities, such as those like the city of Hamilton, certain sections of Toronto and probably some out west, which have taken advantage of the assistance offered by Central Mortgage to help our senior citizens. But hundreds and thousands of Canadians, according to the Senate report on aging, are living in conditions that are a shame to Canada, with our tremendous standard of living. This state of affairs is not brought about by a government unwilling to do anything to correct it: The fault lies in the red tape which exists between federal, provincial and civic authorities, which prevents our walking into a community and saying that we should knock down 25 blocks square and build some decent housing for the citizens. This type of initiative must come from the civic level.
Many of the provinces have already realized that this should be the approach, and at
Tight Money Policy
least four or five of them have supplemented the assistance offered in worthy cases. The province of Quebec is probably the most backward of all provinces in this regard, but there are indications that in the very near future that province will be setting up an association or department similar to that existing in Ontario and in other provinces.
However, Mr. Speaker, I wonder whether private builders, who have had the best of both worlds for so many years now, with housing shortages and ample funds from private industry, private enterprise, other private sources and from the government, have really done their part in the matter of funds. Looking around some of the communities close to Verdun and some of the housing projects which have been constructed, it does not take very much vision to foresee the slums of the future. It seems to me that a review of housing in general is needed. The Minister of Labour (Mr. Nicholson) has been the ideal man to look after Central Mortgage. I do not know who chases whom, but it came under his jurisdiction when he was postmaster general, and it is again under his jurisdiction now that he is Minister of Labour.
The minister pointed out the other day that we were cutting back funds by 15 per cent, not over the average of the last five years, but 15 per cent of a record year. I do not think in all fairness that the government should be chastised for adopting such a policy. The members who have spoken so far have spoken well, but their comments have been made really in a different light. The hon. member for Broadview, the hon. member for Hamilton West (Mr. Macaluso) and the hon. member for Wellington South have pointed to a social illness, namely the lack of housing in general, which I do not think is tied in too much with interest rates. I think this question is tied in with the logical profit-making attitude of private industry. I believe it is time for the government to give more directives and more incentives to build the type of housing I envisage, the type of housing which the president of Central Mortgage and also the vice president politely pointed out is so badly needed now, and will be even more badly needed by 1970.
[DOT] (9:00 p.m.)
In certain communities such as mine, the people cannot afford the luxury of a nice home in the country with a lot 50 x 50, a garden, and all the rest of it. That sort of

May 16, 1966
Tight Money Policy
thing might be the dream of the young executive who can afford it. It cannot be the dream of our senior citizens in the community in which I live.
This is why I am pleased that the government, in its policy of restraint respecting tight money, has been very careful not to curtail the moneys available for these types of enterprises which have to do with senior citizens.
I am saddened that the municipalities across this country, either through lack of communication, indifference, or callousness, have not faced up to the responsibilities they have toward the citizens of their communities. These responsibilities should not rest on the shoulders of the federal government alone. They must be met through co-operation between the civic, provincial and federal levels of government.
I thought when the federal government made changes in the National Housing Act, granting up to 90 per cent coverage on loans on projects dedicated to providing housing for senior citizens, and also those with low incomes, that there would have been generated the biggest building boom in the housing history of Canada. That has not happened. Frankly, why it has not happened has puzzled people who are close to the problems of senior citizens. It has puzzled those who are active in the field of social welfare-such as volunteer workers, or the members of the Victorian Order of Nurses-who day in and day out see the dilapidated conditions under which senior citizens live, many of them paying $50 or $60 a month for a room on the island of Montreal because no other type of housing is available. That sort of thing is a sin; it is a shame. The responsibility is not entirely that of the federal government. It falls simply on the shoulders of the citizens of those communities, who are responsible for citizens less fortunate than they are.
Those are the people who refuse to march on city council demanding housing for senior citizens. They do not send resolutions to the provincial government asking it to get in touch with the federal government and ask for money- money which is waiting for them and which, as I understand, although I have no statistics in front of me, has never been used to its fullest extent. There has never been pressure on the government to expand these types of funds because they have never come anywhere near to being completely used by communities for the purposes I speak of.

I know what I have done in my community. I know what we shall be doing for our senior citizens in our community. But I do not think it is my duty as a federal member of parliament to have to generate interest on the civic level about the things I speak of. I believe that the role of the members of this house is to provide the plan, the money and the know-how. People all across Canada should take a look at their own communities, at their own church group, at their own social groups, and perhaps ask themselves; "I wonder what conditions that old gentleman who has just passed us lives under? Does he live in a room? Why is there no housing in our community? Why are there not homes for senior citizens around here?
I might add, Mr. Speaker, it is not because money is not available; it is not because the know-how is not there; it is not because the builders are not there. It is because in this big country in which we live, where you have federal, provincial and civic administrations all working very delicately together, all afraid to step on each other's toes, we have to start with requests on the civic level, going up the ladder to the provincial government, and then to the federal government.
I resist the temptation to answer some of the very pointed, and at times logical questions that were raised in this debate. I will leave that pleasant chore for the minister tomorrow evening.


Mr. More:: You might do it more capably than he can. Let us hear you.


Bryce Stuart Mackasey: Thank you, but I have a very high regard for my minister. I frankly think he will answer, as he should, more adequately than ever I could.
I am here speaking as a representative of a community that I think has let its people down badly. As I look at the statistics on my desk I have the very uncomfortable feeling that my community is of the type that are in the majority; that, unfortunately, it is not the exception, but the rule.


Mr. Lawrence E. Kindt (Macleod):: Mr. Speaker, I am pleased to have the opportunity of saying a few words on this supply motion. Why is that, Mr. Speaker? The answer is simple. I want to talk about certain specific policies and situations designed and created by this government.
May 16. 1966



The three legs of the stool that have brought about the present situation are, first, the supply of money. Second, the demand for loan money, and third, out of the interplay between these two, the interest rate.
This government's policy has been one-sided, having to do with the supply of money. First of all you have the statement by the Minister of Finance about paying 5 per cent on taxes taken, with the promise that this would be paid back later. That is a policy to dry up the supply of lendable funds. There is no doubt about it. Then there are other policies, such as those implemented by the Minister of Labour who is responsible for central mortgage and housing, which are responsible for raising the mortgage rate of National Housing Act mortgages from 6J per cent to 6J per cent.
Anyone who has watched the result of this action-and I have seen its results in my area-knows that for many people it is hard to find lendable funds. In many cases they have been unable to find them. Many people have deferred their plans to build because of raised interest rates, which have cut the demand for lendable funds. People who do not believe that are like the ostrich which puts its head in the sand.
I notice that the Minister of Fisheries shakes his head. I would ask him, how many fishermen would go fishing, and would buy boats, and so on, if the interest rate on the things they had to buy went up, up and up? They would not engage in fishing because they would not be able to figure where they could come out with a profit. After all, they are all economic men; that is, they are out to make a profit. If they feel that they cannot make money, they will not be induced to work. Similarly, rising interest rates mean a lower demand for lendable funds. Those funds have been curtailed. All that stems from what this government has done. In other words, money for housing has been deliberately dried up.
There are other things to be considered. Take bank loans as an example. Banks are not interested at the present time in making small bank loans because of the shortage of funds. They can make much larger loans, however, at the 6 per cent rate. So when the small businessman comes along and wants a loan; they way, "No, we just have not got the
Tight Money Policy
money". The banker cannot tell the businessman exactly why he is not making the loan to him.
[DOT] (9:10 p.m.)
The banker will tell him that his security is not good, his chances of making a profit are not good, or something of that sort. In 1962 this government had an election platform which included a policy and program to help small business. Let me read exactly what they said they would do to help small business. They said they would ensure a square deal for small business; they said that Libera] policies were for more plentiful credit, lower taxes and expanding business; they said that economic measures would be designed to broaden opportunities for the various enterprises of our smaller manufacturers, retailers and service businesses.
Has this government forgotten its promise of 1962, or has it changed its mind? This was their platform in 1962. Now they are doing just the opposite. I was amazed by the statement of the hon. member for Verdun (Mr. Mackasey). He said he had prodded different local people to bring into effect certain policies for housing, old age pensions, and so on. He said he had prodded and prodded them and still had not been able to get them to act. Did the hon. member ever consider that there was a more serious fault than people in local communities suffering from inertia? Unless you implement over-all policies, which this government has never done, you will not get the proper reaction from local people. I will refer to this election campaign propaganda a little later on.
I draw attention to this three-legged stool; the supply of money on one side, the demand for loans on another, and the interplay of both creating a higher interest rate. In the result the interest rate goes up. What you are doing in these circumstances is closing off those people who want loans to purchase consumer goods, thereby preventing putting this money back into the process of production and producing goods for export. You head off inflation but the economy suffers; there is no question about that.
This government has restricted the supply of money. As a result our people are crying out for consumer goods and there are not enough consumer goods to go around. That is the interrelationship effect on our economy of increasing the interest rate. I suspect that the government has raised the interest rate on

May 16, 1966
Tight Money Policy
Central Mortgage and Housing loans from 6J per cent to 6J per cent because they intend to amend the Bank Act to raise the 6 per cent interest on bank loans. I am waiting for them to do this, and I have both barrels cocked if they do.
The raising of the 6 per cent interest rate on bank loans will not solve the present economic ills of this country, because we have in our economy certain rigidities; we have a monopolistic economy wherein competition is not the same between different groups. I can prove my point by simply saying that you may have perfect competition, for example, between one large number of producers. To illustrate my point I would refer to our farmers who produce wheat; one farmer does not realize that his neighbour, also producing wheat, is in competition with him. In other words, there is perfect competition between these farmers. This is a term that economists use and it applies to two farmers, for instance, each of whom does not know that the other is a competitor.
This is a vastly different situation to that applying to the eight chartered banks we have in this country. I may go into one bank and borrow money from them, but have dealings with another bank. I may talk to one bank manager and indicate that I paid so much interest in another bank. I do not know whether banks circulate this information among themselves, but they find out these things-there are many ways in which this can be done-and there is an interchange of views. At various dinners, for example, they get together, or while at their clubs, and find out what the other is charging as interest on loans, and that sort of thing; then they make reports periodically.
Therefore you have a degree of monopolistic competition in the banking industry of this country. I would point out to the house that what will work among farmers will not work among banks. If you start raising the interest rate beyond 6 per cent, you will generate with regard to the banks of this country the demand for reform. There may be pressure upon parliament to bring in a new measure to take over the supply of lendable money. An element in the west will be saying that the Bank of Canada should take over the lending function of our chartered banks. I am not one of those who advocates this being done, but this will be suggested; make no mistake about that. The

Bank of Canada, as everyone knows, is the fountain-head for funds, with the exception of deposits. It stimulates deposits by lending money to the chartered banks, and they in turn extend credit to around twelve times the funds they have borrowed. When those funds are re-deposited in the banks, they lend them again at the expanded rate, and so the cycle continues. This is how the banks receive their lendable funds.
If the ceiling on the interest rate is removed and banks are allowed to charge more than 6 per cent, we will be breaking faith with an undertaking given to the people of this country a good many years ago, that the interest rate would be 6 per cent. This will be evidence of the fact that this government has not the capacity or know-how to control our economy without raising the interest rate and placing a heavier burden upon the man who wishes to own a house. He will be paying a much higher rate of interest on his mortgage money and, being a small borrower, will not be able to borrow more money. I hope the government will bear these facts in mind and think twice before they embark upon a policy such as the raising of the interest rate on bank loans.
[DOT] (9:20 p.m.)
Let us spend a few moments considering the effect of this tight money policy. There is no doubt that it is a tight money policy. The government is restricting the supply of money, by one means or another, by government measures and edicts, and that is curtailing the expansion of the economy. There is now a greater demand for the money that is available, and so interest rates rise. It is like a dog chasing its tail. Everybody wants more money and pays higher interest rates. The only check is when interest rates climb so high that nobody can afford to borrow because they will not make a profit. Consequently they do without. That is not what we want in our economy.
Look at the cost-of-living index. Everything is costing more, whether for production or consumption. The housewife knows what she has to pay when she goes to the store. There has never been such a rapid rise in the cost of living as there has been since this government took office. The D.B.S. statistics clearly illustrate this.
The value of the dollar has depreciated in relation to purchasing power. The old age
May 16, 1S66

pension of $75 a month is now worth about only $70 in terms of purchasing power. My hon. friend from Verdun was shedding crocodile tears for the old people, but he did not tell us that the rising cost of living is taking the bread out of their mouths and cutting their standard of living from under them. There are thousands of others, retired civil servants and people on fixed incomes, who are terribly hurt by the rise in the cost of living.
Rising costs are also affecting those who manufacture goods for export. I have talked to many of them in my part of the country and they tell me they are being priced out of foreign markets. Markets which they enjoyed for years are diminishing, simply because of high costs.
It is not so long ago since we concluded the Columbia river deal. Today I was amazed to hear the Minister of Mines and Technical Surveys (Mr. Pepin), who represents the constituency of Drummond-Arthabaska, in answer to a question put by the hon. member for Kootenay West (Mr. Herridge), saying that the funds which have been received from the United States to build Columbia river dams had accumulated certain interest. Those of us who studied the treaty had this figured out. The minister also said that a portion of these funds had been spent, but he did not tell us whether the money which was received from the United States to build these dams will now be sufficient in view of inflation, the rise in the cost of consumer goods and all the other things that make up the costs of production.
He simply told us that interest had accumulated. I did not rise in my place to criticize him because I did not ask the question, but I can assure the hon. member for Kootenay West that if he looks at the minister's answer in Hansard he will find it was no answer at all to his question.


Herbert Wilfred Herridge: I intend to say that at ten o'clock.


Lawrence Elliott Kindt: I am glad to get a rise out of the hon. member for Kootenay West and I think we will all enjoy staying at ten o'clock to hear what he has to say.
I would now like to go into other aspects of what the government has not done.


Hédard-J. Robichaud: Before the hon. member changes subjects, would he answer a question.
Tight Money Policy


Mr.   Kindi@: If I have got sufficient time to complete my remarks I shall be glad to do so.


Hédard-J. Robichaud: Would the hon. member explain why the mortgage interest rate on N.H.A. joint insured loans was increased from 6 per cent to 6| per cent from 1959 to 1960, and under what conditions?


Lawrence Elliott Kindt: I do not have the past figures on C.M.H.C. loans, and in order to answer the question fully it would be necessary to cover all the adjoining factors. I was here at the time, but the two situations are not comparable. Furthermore, more money was put into housing at that time than is the case at present. The Minister of Fisheries (Mr. Robichaud) thinks he has a point and he is trying to save what he could call the good name and good policies of his government. I do not want to get sidetracked on an across-the-floor question, but there were different factors then as compared with now. The former government never embarked upon a policy of introducing tight money, not to the extent that the present government is doing. The two situations are completely non-comparable.
o (9:30 p.m.)
Coming back to the Liberal program as outlined in the general election of 1962, I should like to go into the field of community development and housing, because different members have spoken on this particular subject. I should like to place on the record what the Liberal party had in mind in 1962, and then we will see how much of that they have carried out. They said they would set up, if a Liberal government were elected, a municipal loan fund which, working with the provinces, would provide money for needed municipal services. They said:
We need better streets and roads to reduce traffic congestion, less pollution, more parks. A great backlog of needed projects is held up for lack of municipal financing. The fund will make loans for sound municipal improvements which provincial governments approve but for which capital is unobtainable on reasonable terms from existing Canadian sources.
Noble thoughts; but how much has been done. The hon. member for Verdun (Mr. Mackasey) was lamenting the fact that nothing had been done in his community. This is what they said they would do when they were fighting an election. Let me read the next one. They said they would clear slums and renew blighted areas of our cities and

May 16. 1966
Tight Money Policy
towns. This is how they explained what they would do. They said:
Federal grants for urban renewal projects will be extended in scope and increased in amount. This is essential to civic progress in many areas.
How much of this was ever done? May I say, very little. Here is the next promise to the people. They were going to increase the low rental homes. Here is what they said they were going to do:
New homes for rent are the positive side of slum clearance. A new Liberal government will join with the provinces and municipalities in a major campaign. It will give special attention to the housing needs of old-age pensioners.
What did my hon. friend from Verdun say? He said that nothing had been built for old age pensioners. Here they fought an election and put out bait to try to get the old age pensioners to vote for them. Do you think they will ever vote for them again? This is what they said in 1962. Have they forgotten what they said in 1962; have they changed their minds? Different speakers on the government side already have said in this evening's debate that nothing had been done in respect of low rental housing; that is, that there has been no program to bring that into being, nor has there been a program of homes for the aged.
I like to put this on the record, because these things are coming back to haunt this government. They should be put on the record because the members of the government have forgotten about them. They said that if they were elected in 1962, they would extend national housing legislation to provide N.H.A. insured mortgages for the purchase of existing homes as well as for building new homes. They said that this broadening, under proper safeguards, would enable more Canadians to become home owners. What are they doing now? They are raising the interest rates from 6J per cent to 6f per cent. This is just the opposite to what they said they were going to do.
Here is another one, and in this case they even are trying to get the farmer's vote. They said they would improve rural housing:
A new Liberal government will bring to national housing policy the flexibility in planning, standards and finance necessary to meet the varied needs of different areas.
They said they are going to help the farmers with their homes. How much have they done? There are a lot of poor farm homes in

my area and I have not seen any benefits there. It is just another gimmick. I have here a document of several pages. I could read many extracts setting forth different policies of this government, but one is as futile as the other. This is the 1962 platform of the Liberal party. I am not trying to pull the wool over your eyes; I am trying to take wool off your eyes, and off the eyes of the public so that they will see exactly what this government has been doing in respect of carrying out its pledges which it made to the people.
Now, in concluding my remarks, I should like to say that what is needed is the creation of a condition in the economy so that jobs will be available and so that everyone can earn a little money in order to purchase consumer goods. At the same time there should be an adequate supply of goods so that prices can be kept in check and so that there will be a proper balance between supply and demand for mortgage funds, and supply and demand in respect of the goods which are available.


Mr. H. E. Gray (Essex West):: Mr. Speaker, in rising to ask the house to reject the amendment proposed by the official opposition, I feel I must start by pointing out that, contrary to what seems to have been suggested by members of the official opposition until now, looking at when they had the opportunity to alleviate the problems of which they speak, their record certainly does not justify their asking for the support of this house or this country for the amendment they have put forward. I presume they have put it forward under the guise of a suggestion that they have a greater capability to deal with the problems of housing which still remain in this country than has the government.
It is interesting to note that in 1962 housing starts totalled only 130,095; in 1963 they jumped to 148,624, and from there, in 1964, they jumped to 165,658. Finally we find that in 1965 there were 166,565 housing starts. In other words, in less than four years there has been an increase of 22 per cent.


Mr. Chatterton:: May I ask a question of the hon. member.


Herbert Eser (Herb) Gray: I would be happy to answer questions when I have completed my remarks. It is not my habit to make an extended speech. If time does permit, I would be happy to answer questions for my hon. friend or for any of my colleagues in this house.
May 16. 1966

It seems to me, Mr. Speaker, that this dramatic improvement did not come about merely by chance. My colleague the hon. member tor Hamilton West (Mr. Macaluso)- the distinguished chairman of the transport committee-I thought outlined most effectively the measures which have been put into effect by this government to stimulate the building of homes generally and to stimulate activity throughout this country in an effort to deal with the problem of supplying proper housing for the older people and people on low incomes. He also outlined our efforts in the field of urban renewal.
[DOT] (9:40 p.m.)
I think the measures of the type to which he referred, including the provision for 90 per cent financing of low rental public housing, increased federal funds for urban renewal and, contrary to what was suggested by the hon. member who just spoke, making N.H.A. loans available for older homes, provided they are located in urban renewal areas, have all had a lot to do with the very important increase in housing starts since this government took office. There has been a dramatic increase in the supply of funds available through the federal government for urban renewal and low rental housing. This, as well as many other measures, has contributed to this improvement.
If I refer to a particular example of one community in this country of ours I think it will help illustrate what I am trying to say about this difference which has come about since this government has had an opportunity to bring in measures to increase the amount of housing available for Canadians. In my own community of Windsor in 1962 there were only 495 units started. In 1963 this number increased to 728; in 1964 to 1,125 and in 1965 to some 1,800. It is interesting to note that in 1965 for the first time housing starts reached a total greater than the 1,700 which occurred in 1954. In other words, when our hon. friends in the official opposition were in office and had charge of the housing policy of this country, just taking the period from 1959 to 1963, in the Windsor area the annual total averaged between 500 and 700 units as compared with the prospective 2,000 starts for 1966. There are some 695 publicly owned low rental units either under construction now or to be started within the next several weeks. I think some of the measures of this government to which I referred have had a very
Tight Money Policy
important effect in bringing about this improvement in the Windsor area.
Reference has been made by various speakers to the effect of the present government's policy on the housing picture for the current year. It seems to me that it should be emphasized that this government has made it clear that it does not intend to reduce the number of direct loans to be made available to the home building industry this year. Last year some 31,500 direct loans were made available for the construction and purchase of homes. The hon. Minister of Labour (Mr. Nicholson) has stressed in this house that the government program for this year will not reduce that number below that level.
It should be remembered that of the 166,000 starts in 1965 the majority were financed by private lenders. If the prospect in this country at this time indicates that this record level of starts may be reduced by 15 per cent this coming year the blame for this decrease must fall upon private lenders who are not carrying out a definite social responsibility of providing loans at the same level.
I do not agree with those hon. members who have suggested that the Minister of Labour has announced that this government has decreed a 15 per cent cutback in housing starts in Canada for 1966. I read the minister's statement and as far as I can see he merely conveyed to this house the latest information available in relation to projections for housing starts in the current year. I hope that the final result of construction programs financed through either direct loans from C.M.H.C. or through private lenders will not be less than the record number of starts in 1965. At the same time I cannot help but note that there are areas in this country, including the Windsor area, which at the present time still have a serious housing shortage. The efforts of this government since it took office have helped to begin to fill the gaps which exist in housebuilding in areas such as Windsor where a serious need still exists.
The very important and significant increase in employment in the Windsor area since 1963 has created an additional pressure on the limited supply of housing available at the beginning of this period of improvement in economic conditions. I suggest this improvement in the economy of this area is a direct result of some of the economic programs implemented by this government, including the designated area measure and the automotive pact.

May 16, 1966
Tight Money Policy


Some hon. Members:: Hear, hear.


Herbert Eser (Herb) Gray: At this time I should like to call upon the minister and this government to develop and put into effect as quickly as possible policies and programs which will give special attention to the needs of areas such as Windsor in order that these housing needs will not remain unfilled in the immediate future. I am sure the minister will do everything possible to encourage private lenders to become more actively engaged in the housing field. If his efforts, by way of what I might call morale suasion, are not successful in bringing to their minds a sense of responsibility the government will have to give active consideration to a greater direct involvement in the mortgage financing field.
At the present time the government should take steps to give special attention through its program of direct lending to such areas as Windsor. Special attention should be given to the creation of quotas greater than those which might otherwise be available in those areas which have a special need for housing. I must stress that this need would have been much worse at this time had it not been for the efforts of this government under the leadership provided by the hon. Minister of Labour. This government in making efforts through the Central Mortgage and Housing Corporation and through co-operation with municipal and provincial governments to find an answer to these needs.
The time has also come when we must encourage private industry to take a more active part in providing housing for their employees.
[DOT] (9:50 p.m.)
This is not merely a matter of responsibility on the part of those industries to the communities in which they find themselves. Surely, in areas such as Windsor it is also in the direct interests of the industries in question to make certain that they are able to keep the skilled working force they have, to attract additional workers to fill the jobs that are being created in large part because of the success of the economic policies of this government. I think that the minister, both directly and through Central Mortgage and Housing Corporation, should encourage the major industrial firms in communities like Windsor, either to do something themselves in the field of housing for their employees or to combine together to form non-profit corporations which, with the assistance of Central

Mortgage in planning and perhaps in financing if necessary, would help fill the demand for housing in areas such as the one from which I come.
Another point I should like to make at this time, Mr. Speaker, is that I feel the income scale now being imposed by the Ontario Housing Corporation on new public housing projects, which are being constructed in areas such as Windsor, has a definite need of revision. I feel that a study of this scale will indicate that the penalty rent level comes in to play too quickly and fails to take into account the realities of the wages that people who work in our factories actually earn today, as well as the costs they have to meet out of those wages. I recognize that the principle is that people above a certain income level are to be discouraged through the application of the rental scale from staying in those units. They are thus being encouraged to go into the private housing market. At the present time, however, in many areas of this country, there is a shortage of private housing for these people. It either does not exist or if it exists at all, is at a rental which is difficult for factory workers or other people in that type of job to meet. I think that equity and the needs of the people in the lower income ranges demands a revision of this income scale on the part of those concerned.
I have not hesitated to speak in a way which might be taken by some to contain a note of criticism of those responsible for our housing policy, perhaps not criticism so much as calling for further action in certain directions. At the same time, Mr. Speaker, I want to stress again my feeling that, in spite of this call for further action I can at the same time ask this house to reject this amendment offered by the official opposition. I say this because of the record of achievement of the present government, which I feel justifies all hon. members in this house in having a feeling of confidence that this government is capable of continuing to meet the needs that still exist for better housing for our citizens in every part of this country. Because of this confidence on my part, because of the evidence on which this confidence is based, I feel that the amendment offered is not well founded when it, in effect, criticizes the government for bringing about difficulties in the availability of funds.
I reiterate that we have reached the point where there must be a development and a
May 16, 1966	COMMONS
putting into effect of policies under which special consideration is given to areas which still have a serious need of housing. At the same time I feel that the achievements to which I have referred are such that this house is obliged to vote against this amendment, to continue to support this government so it can continue to move ahead to deal with the housing problems that still remain in a way in which I am sure they are able to do, based on the clear record of their period in office.


George Louis Chatterton: Would the hon. member permit a question? He cited the number of housing starts during the early 60's; will he now quote the number for 1955, 1956 and 1957 resulting from the previous tight money policy of that government?


Herbert Eser (Herb) Gray: I believe I have the statistics here.


An hon. Member:: We would be much more interested in the future than the past.


Herbert Eser (Herb) Gray: Yes, that is the trouble with the official opposition; they are living in the past rather than the future. I will answer the hon. member's question. I just want to make sure I have the right line here in the Canadian Housing Statistics: 1956, 95,615; 1957, 87,995; 1958, 107,839; 1959, 108,059; 1960, 90,113-goodness gracious, what happened in 1960? Do you want me to continue?


Alfred Dryden Hales: Will the hon. member permit another question? Can he advise how many of these direct mortgage loans are made to the United States citizens living and working in Windsor?


Herbert Eser (Herb) Gray: No, I am not able to do that because I do not believe the statistics are computed on that basis. If these people have come to make their homes in Windsor, they have affiliated themselves with our community, are paying taxes municipally, provineially and federally, and I think therefore that the question is irrelevant.


Mr. Keays:: May I call it ten o'clock, Mr. Speaker.


PROCEEDINGS ON ADJOURNMENT MOTION
[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
DEBATES	5209
Proceedings on Adjournment Motion

Herbert Wilfred Herridge: Mr. Speaker, on May 12 I asked the minister the following question:
In view of press reports that there will be an over-expenditure of some $200 million on the Columbia treaty projects before they are completed, would the minister inform the house whether any reports from the federal representative on the fed-eral-British Columbia liaison committee, or from the federal representative on the joint engineering board, indicate that the projects will cost considerably more than the government of British Columbia has received from the United States under the terms of the Columbia treaty?
My question is based on newpaper reports and other information I have obtained from British Columbia sources with respect to two things: first, faulty engineering studies and, second, the anticipated cost of other Columbia treaty projects with respect to faulty engineering studies, I wish to quote from the Nelson Daily News for February 24, 1966:
Vancouver sources reported Wednedsay that the construction schedule at the dam has been hard hit by inaccuracies in engineering data supplied to the dam builders. Core drillings reportedly showing solid bed rock proved false when the underlying structures were found to be weakened by dirt seams and cracks.
Now, Mr. Speaker, I was rather surprised to read this report in view of the fact that the engineers of the federal water resources branch appeared before the standing committee on external affairs when it was giving consideration to the Columbia river treaty and protocol in April, 1964 and stated they had every confidence in the engineering studies undertaken by the water resources branch, their counterparts in British Columbia, and the various engineering consulting firms.
[DOT] (10:00 p.m.)
I just want to quote briefly from the Revelstoke Review. Mr. Strachan, when addressing a public meeting, had this to say:
When the Columbia treaty was signed the government claimed $273 million paid for downstream benefits would be invested and with accumulated interest would total $501 million in 1973. Mr. Strachan said this was supposed to pay the cost of three dams and one half the cost of generators at Mica Creek.
"Because of this we went ahead with High Arrow, which will flood good farm land and probably wreck some fine sport fishing," he said. "Now we find that this will not provide enough money, and that the people will have to find the balance."
May 16. 1966

Proceedings on Adjournment Motion
Many people in British Columbia are concerned about this information, which appeared in several newspapers in the province.
In the first instance, I was surprised to find, in view of the project cost estimates submitted by the water resources branch, to be found at page 185 of No. 3, Minutes of Proceedings and Evidence, Standing Committee on External Affairs, as submitted by the water resources branch, that these preliminary cost estimates used in making evaluations were made by the water resources branch and its engineering consultants.
I was also surprised, Mr. Speaker, in view of the evidence given by Mr. G. M. MacNabb of the water resources branch, to be found at page 248 of the Minutes of Proceedings and Evidence given before the Standing Committee on External Affairs on Friday, April 10, 1964, in which he said:
At the end of the construction period you will see that we have a surplus of $53 million in 1973, after paying all construction costs over that period.
I was also surprised in view of the evidence given by the Secretary of State for External Affairs before the standing committee on external affairs, during the course of which he was asked this question:


Mr. Davis:: The compensation for the sale of this service in monetary terms is more than enough to build the projects?


Paul Joseph James Martin: Oh yes, there would be a surplus of $53,000,000.


John (Jack) Davis: Some of this will go for generating on-site power.


Paul Joseph James Martin: That surplus will provide for about one half of the cost involved in establishing the generating machinery.
I was also surprised, Mr. Speaker, in view of the evidence given by Hon. Ray Wil-liston, which appears at page 317 of the Minutes of Proceedings and Evidence, Tuesday, April 14, 1964. I will not quote it at length because I see my time is running out, but he recognizes, as does everybody else, that the most critical aspect of this problem occurs around the Arrow lakes. During the course of his evidence he said:
I think our estimates are well within any costs which might occur.
I am informed that Hon. Robert Bonner, Attorney General of British Columbia, has told the press that the increased cost of the Columbia river project is caused by the 11 per cent sales tax. I would appreciate the minister informing us, when he takes the

opportunity to reply, whether this tax has been responsible for the increase in the cost of building the Columbia river projects.
I was very pleased to hear the Minister of Mines and Technical Surveys inform us today that as far as figures are concerned the Columbia river fund to date, with interest earned, totals $295,917,782, and that the expenditure to date has totalled $97,914,505. These figures do not tell the whole story, however, Mr. Speaker. They do not include the commitments which have been made to date, of which I have fairly good knowledge, with respect to contracts let at the present time. We must have the commitments made to date-that is, as at March 31-if we are to draw any accurate conclusions.
In my opinion the people of Canada and the people of British Columbia in particular are entitled to the facts with respect to the costs and commitments entered into in the development of the Columbia river treaty projects, and I look forward to hearing further from the minister with respect to my question, which is of interest to a great many people.


John Robert (Jack) Nicholson: Tuesday, May 17, 1966