1967-06-12

Mr. Speaker:: I have the honour to inform the house that the Clerk of the House has received from the chief electoral officer certificates of the election and return of the following members:
Of Melville Eud Germa, Esquire, for the electoral district of Sudbury.
Of Aurelien Noel, Esquire, for the electoral district of Outremont-Saint-Jean.



NEW MEMBERS INTRODUCED

[Stage Direction]
Pierre Caron, member for the electoral district of Hull, introduced by Right Hon. L. B. Pearson and Hon. Jean Marchand.
Aurelien Noel, member for the electoral district of Outremont-Saint-Jean, introduced by Right Hon. L. B. Pearson and Hon. Jean Marchand.
Andre Ouellet, member for the electoral district of Papineau, introduced by Right Hon. L. B. Pearson and Hon. Jean Marchand.
Jacques-R. Tremblay, member for the electoral district of Richelieu-Vercheres, introduced by Right Hon. L. B. Pearson and Hon. Jean Marchand.


Hon. John N. Turner (Registrar General) moved: the first reading of Bill No. S-10 (from the Senate), to amend the Canada Corporations Act.
Motion agreed to and bill read the first time.



VETERANS AFFAIRS


[Stage Direction]
On the order:	Government Notices of
motions:
January 9, 1967-The Minister of Veterans Affairs -The following proposed motion:-That the annual 27053-89J
report of the Department of Veterans Affairs, the Canadian Pension Commission and the War Veterans Allowance Board for the fiscal year ended March 31, 1966, be referred to the standing committee on veterans affairs.
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.



QUESTIONS

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

Mr. Coales: 1.	Was the fence at the young offenders penal institution, Springhili, Nova Scotia, damaged in a wind storm and, if so (a) has it been repaired (b) if it has not been repaired, for what reason?
2.	What was the reason for the damage to this fence, who will be responsible for repairing the fence, and what is the estimated cost of repairs?
3.	What are the names of the individuals who carried out the investigation, and when were the findings of these individuals made available to the Solicitor General?


Hon. G. J. Mcllrailh (Minisler of Public Works):: 1. Yes; (a) repairs are underway; (b) not applicable.
2.	An unusually severe storm caused the wire fence fabric to ice up, creating undue wind resistance. The Department of Public Works is presently having the fence straightened at a cost of $7,950.
3.	The findings of C. D. Davison & Co., Halifax, were made available to the Solicitor General on April 4, 1967.


COSTS OF TAX COLLECTION
Mr. Sallsman: What has been the cost to the federal government for each of the fiscal years 1966-67, 1965-66, and 1964-65, of collecting the (a) federal income tax (b) federal sales tax (c) federal excise tax (d) federal estate tax?


Hon. E. J. Benson (Minisler of National Revenue and President of the Treasury Board):: (a) and (d). The cost to the federal

June 12, 1967
Questions
government of collecting federal income tax and federal estate tax is not maintained separately. The combined figure representing the cost of collecting both of these taxes, the levy under the terms of the Old Age Security Act, and including the cost of collecting those provincial income taxes for which the federal government is the collecting agent is:
Fiscal year 1966-67 $46,936,000 (preliminary)
"	"	1965-66	$45,454,000"	"	1964-65	$42,164,000
For the fiscal year 1964-65 only, an estimate is available of the cost of estate tax collection which has been calculated to be $1,524,000.
(b) and (c). It is not possible to calculate costs of collecting excise taxes separately from sales tax because these taxes are administered jointly, being applied under the same statute at the time of sale by manufacturers.
The following figures represent the cost of collection of domestic sales and excise taxes only. When these taxes are collected at Customs ports upon importation, they are collected in conjunction with customs duties; futhermore, they are small in relation to gross revenues.
Fiscal year 1966-67 $7,416,817 "	"	1965-66 $6,324,524"	"	1964-65 $5,952,484


FERRY SERVICE BETWEEN P.E.I. AND PORT HOOD, N.S.
Mr. Muir (Cape Breton: North and Victoria):
Did any members of the cabinet receive a resolution from the municipal council of the municipality of the county of Inverness, dated February 10, 1967, supporting a ferry service between Prince Edward Island and Port Hood, Nova Scotia, and, if so (a) which members (b) what reply was given by each member?


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: In so far as the
Minister of Public Works is concerned, yes: (a) The Minister of Public Works, (b) That this was a matter for the Department of Transport. In so far as the Minister of Transport is concerned, yes: (a) The Minister of Transport, (b) Potential benefits of the service did not appear to justify the capital expenditures and operating subsidies required.


HIRING PROCEDURES, KEJIMKUJIK PARK DEVELOPMENT, N.S.
Mr. Crouse: 1.	What procedure is followed when hiring men and trucks for the Kejimkujik park development in Queens and Annapolis counties, Nova Scotia?

2.	Does Mr. James Smith of Harmony, Queens county, occupy a toll gate position of authority in the hiring of personnel in Queens county?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: 1. Men
are hired through the Canada manpower office in Liverpool, N.S. Truck rentals are obtained by tender calls.
2. No.


LABOUR FORCE CENSUS
Mr. Reid: 1.	What is the scope and nature of the labour force census taken by D.B.S.?
2.	To what use is this information put?
3.	How often is this census taken?
4.	Has any consideration been given to taking it oftener, and (a) if so, how often would it be taken (b) if not, for what reason?
5.	Has any consideration been given to taking this survey in five-year periods and, if not, for what reason?


Mr. Jean-Charles Caniin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. The 1961 Census of Population included the following labour force questions asked of persons 15 years of age and over: Did you have a job of any kind last week? (Even if not at work, or part time?) Did you look for work last week? Did you have a job at any time in the past 12 months? Number of hours usually worked each week? For whom did you work last week (or when you last worked)? What kind of business or industry was this? What kind of work did you do in this industry? Did you operate your own business or work for others in this occupation? In how many weeks did you work for wages or salary in the past 12 months? What was your gross wage and salary income (before deductions) in this period?
2.	Census labour force statistics are used by federal and provincial government departments in assessing problems related to the labour force, particularly its under-utilization, and in developing and implementing manpower policies; they are used to measure changing labour occupation and industry mix, and as a guide to potential labour shortages and surpluses. They are used extensively in industry and universities for a wide variety of manpower studies and research.
3.	A census including labour force inquiries has been taken in Canada on a decennial basis since 1871, in the years ending in "1".
4 and 5. A national population census was taken in 1956 and 1966 in lieu of censuses of
June 12, 1967

only the prairie provinces which were taken in earlier decades. Consideration was given to the inclusion of a number of labour force questions in 1966, but it was not possible in view of the commitments of staff resources to finish 1961 census special tabulations and plan for the 1971 census. The 1971 census of Canada will include questions on the labour force.
Current information on labour force activity is obtained from the monthly labour force survey, and results published in the monthly bulletin "The Labour Force", giving estimates of employment and unemployment for Canada and the five main regions of the country.


INTEREST ON POST OFFICE SAVINGS BANK DEPOSITS
Mr. Aiken: 1.	What is the current rate of Interest on post office savings bank deposits?
2.	Has there been any change in the interest rate within the past five years and, if not, for what reason?


Hon. Jean-Pierre Cote (Postmaster General):: 1. 2i per cent per annum.
2. No. The rate of 2J per cent has been considered fair because interest on postal savings is calculated on a monthly basis. A depositor can make deposits or withdrawals at any savings bank post office in Canada without paying a service charge.


OVERPAYMENTS UNDER CANADA PENSION PLAN
Mr. Hales: 1.	What is the amount of the employers' overpayment to the Canada Pension Plan since the inception of the plan?
2.	How many employers are involved?
3.	What arrangements are being made to have this overpayment returned to the employers?
4.	How much money was collected in overpayment by employees since the Canada Pension Plan was started?
5.	How many employees were involved?
6.	How much money was returned to the employees?


Edgar John Benson: 1. Unknown.
2.	Unknown.
3.	This problem is still under study.
4.	Unknown.
5.	Unknown.
Questions
6.	Employees' applications are still being processed and will not be finalized for another six weeks. As at May 19, 1967, $4,579,808.05 has been refunded to the employees.
Note: Answers to questions 1, 2, 4 and 5 cannot be provided until all returns filed by employees have been processed and statistics related thereto accumulated.


LEAVE OF ABSENCE FOR SPECIAL ASSISTANT TO HEALTH MINISTER
Mr. Coates: Has William MacEachern, special assistant to the Minister of National Health and Welfare, been given leave of absence from the department to take part in the Nova Scotia election campaign?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. William Mac-
Eachern, special assistant to the Minister of National Health and Welfare, formally requested and was granted leave of absence without pay for a period totalling three weeks during the month of May.


PLEASURE CRAFT HARBOURS PROGRAM COSTS
Mr. Stefanson: 1.	What is the number of projects and estimated cost of same undertaken under the capital assistance for pleasure craft harbours program?
2.	What are the number and estimated cost of
projects by provinces?
Hon. G. J. Mcllrailh (Minister of Public
Works): 1. Eleven projects estimated to cost $572,500.
2.
New Brunswick	1	$ 23,400P.E.I.	1	28,600Quebec	3	305,000Ontario	2	30,500B.C.	4	185,000$572,500


MANITOBA-PLEASURE CRAFT HARBOURS
Mr. Stefanson: June 12, 1967
Questions


McBETH POINT, MAN.-HARBOUR FACILITIES
Mr. Slefanson: Are there any plans for improving the breakwater and harbour facilities at McBeth Point on Lake Winnipeg, Manitoba and, if so (a) what is the estimated cost (b) what is the nature of the work (c) when will this work be commenced?
Hon. G. J. Mcllrailh (Minister of Public
Works): The possibility of constructing a timber cribwork breakwater is being considered. It is not customary to publish estimated costs before tenders have been received.


ST. LAURENT, MAN., POST OFFICE
Mr. Slefanson: During the past year has there been a change in the status of the post office at St. Laurent, Manitoba and, if so, does the government plan on constructing a federal building?


Joseph Julien Jean-Pierre Côté: No, there has been no change in the status of the St. Laurent post office which is still in that class of office where the postmaster, as a condition of employment, is required to furnish suitable and adequate premises in which to operate the office.


RELEASES AND RECRUITMENT, ARMED FORCES
Mr. Forrestall: 1.	By service, and rank, what has been the number of releases from the Canadian forces during the months of January, February, March and April 1967?
2.	For the same period, what have been the recruitment figures for the three services for (a) commissioned ranks (b) others?
3.	What was the strength of the Canadian forces at the first of each of the past 12 months?


Hon. Paul Hellyer (Minister of National Defence):: 1.

Ranks (equivalent)	January 1967	February 1967	March 1967	April 1967	RCN	CA(R) RCAF	RCN	CA(R) RCAF	RCN	CA(R) RCAF	RCN	CA(R)	RCAFLieutenant General	1	Major General	3	Brigadier	1	1	2	2	1	1Colonel	3	1	1	1	7	2	2	5	1Lieutenant Colonel	8	4	1	7	7	5	5	10	5	5Major	
10	11	19	5	11	21	7	9	13	8	8	11Captain	
4	17	37	5	9	46	4	18	24	14	19Lieutenant	
1	7	10	3	5	11	2	10	9	1	5	142nd Lieutenant	2	1	1	Officer Cadet	
3	77	36	10	30	11	18	29	26	4	27	30Warrant Officer Cl 1	
6	4	4	5	5	6	14	10	6	8	9	2Warrant Officer Cl 2	
11	11	4	13	5	9	13	20	14	6	24	12Staff Sergeant	
9	11	21	7	19	23	11	21	16	5	31	11Sergeant	
15	33	40	8	27	36	10	27	21	3	25	22Corporal	
24	54	56	22	45	31	12	59	40	17	46	50Private	
139	481	161	79	220	115	61	336	176	153	295	229Soldier Apprentice	4	4	5	6	June 12, 19G7	COMMONS DEBATES	1387
Questions

June 12, 1967
2-	(a)
Questions
January	February	March	April1967	1967	1967	1967


R.C.N... C.A.(R). R.C.A.F.
[Stage Direction]
(b)

[Stage Direction]
6	54
12	103
120	42
131	365
327	310
287	439
1	6
71	6
156	48
291	176
486	510
682	360
3.
1 June 1966	
1 July 1966	
1 August 1966.... 1 September 1966. 1 October 1966... 1 November 1966
1 December 1966 1 January 1967... 1 February 1967.
1 March 1967...
1 April 1967...
1 May 1967	
106,681 106,186 105,335 104,767 104,449
(Due to changeover of records to conform to introduction of new trade structure
and pay rates, no figures were published
for 1 November 1966.)
105,366
104,957
104,533
104,972
105,584
105,602

Mr. McQuaid: 1.	When the Canadian forces left France after the withdrawal of France from NATO did the Canadian government own any real or personal property in France?
2.	If so, what is the estimated value of this property?
3.	Has any arrangement been made whereby the Canadian government will be compensated for what has been left?
4.	What is the amount of the compensation agreed upon?


Paul Theodore Hellyer: 1. The question of Canada's interest in property formerly used by the Canadian armed forces in France is being studied at present in the light of related arrangements and agreements.
2.	It is not possible to give an answer to this question pending completion of the study referred to in 1.
3.	Not as yet.
4.	Not applicable.


MINIMUM SECURITY INSTITUTION, P.EJ.
Mr. McQuaid: 1.	Have representations for the establishment of a minimum security institution in Prince Edward Island been received from the government of that province?

2.	Is it the intention of the government of Canada to proceed with the establishment of such an institution?
3.	What progress towards this end can be reported to date?


Hon. L. T. Pennell (Solicitor General):: 1. No
representations for the establishment of a minimum security institution in Prince Edward Island have been received from the government of that province. However, a communication was received from the government of Prince Edward Island regarding the establishment of a maximum security institution in that province.
2.	It is not, at present, the intention of the government of Canada to proceed with the establishment of a federal penal institution in that province.
3.	Not applicable.


FEDERAL GRANTS TO JOHN HOWARD AND ELIZABETH FRY SOCIETIES
Mr. Badanai: 1.	What was the federal government's contribution to the John Howard and Elizabeth Fry societies, by year, since 1960?
2.	Is the government giving consideration to an increase in grants to enable these societies to carry on their functions of human rehabilitation?
June 12, 19G7


Lawrence T. Pennell: The
grants in each year were as follows:
	John Howard	Elizabeth Fry
	Societies	Societies
1960-61	$ 93,100	$ 2,7001961-62	97,300	6,0001962-63	113,650	8,3501963-64	103,475	7,4501964-65	119,450	8,8001965-66	154,404	9,4501966-67	216,433	15,646
2. Yes.


EXTENSION OF FISHING VESSEL ASSISTANCE TO MANITOBA LAKES
Mr. Stefanson: Does the government now have plans to extend the fishing vessel assistance plan to make it available to inland fishermen including those on lake Winnipeg and other Manitoba lakes and, if so, when will this plan be implemented?


Hon.   H.-J. Robichaud@Minister of Fisheries: Although the possible desirability of extending fishing vessel assistance in some form to inland fishermen has been discussed with the federal-provincial prairie fisheries committee no decision has been reached and there are not now plans to extend this assistance to fishermen on lake Winnipeg or other Manitoba lakes.


BESTOWAL OF TITLE &quot;RIGHT HONOURABLE&quot;
Mr. Diefenbaker: 1.	Has the Prime Minister requested Her Majesty the Queen to give approval to the designation or title of "Right Honourable" being made available to any Canadian or Canadians although such person or persons are not members of Her Majesty's imperial privy council?
2.	Has any order in council to such effect been passed?
3.	If not, what is the authority on which such action is based?
4.	Is it the intention of the government of Canada to deny Canadians hereafter appointment to Her Majesty's imperial privy council?


Right Hon. L. B. Pearson (Prime Minister):: The answer to the first part of the question is that before the appointment of the present Governor General I petitioned the Queen to approve a change in the table of titles for Canada to provide that henceforth the Governor General of Canada shall carry the title "Right Honourable" for life.
Questions
The answer to the second part of the question is no.
The answer to the third part is, the change falls within the area of the royal prerogative in which the sovereign acts on the advice of the prime minister.
The answer to the fourth part of the question is, membership in "Her Majesty's Most Honourable Privy Council" is on the recommendation of the prime minister of Britain since it is technically the privy council of Britain. There has been no decision to deny Canadians appointment to the British privy council if at any time a prime minister of Britain were to wish to recommend such an appointment, just as there has been no decision to alter the practice by which United Kingdom citizens have, on occasion, been offered membership in the Canadian privy council.


POLICY RESPECTING PURCHASE OF CANADIAN PRODUCTS
Mr. Godin: Does Canada have a preferential policy as regards to the purchase of Canadian products, and what exactly Is this preferential policy?


Edgar John Benson: The purchasing policy of the Canadian government is consistent with that of foreign governments concerning preferential treatment accorded to domestic industries. Canadian experience indicates that foreign governments direct procurement to their own industry or give their industry preference over Canadian suppliers, in some cases. Canada follows the same practice by giving preference to Canadian industry when there is a need to maintain a Canadian source for strategic reasons or when there is a unique capability in Canada, and always provided it is not necessary to pay excessive premiums in order to buy in Canada.


EMIGRATION OF PROFESSIONAL PEOPLE TO U.S.
Mr. Orlikow: How many Canadians scientists, research workers, engineers, university professors, and medical doctors left Canada to work in the United States in each of the past three years?
Mr. Jean-Charles Caniin (Parliamentary Secretary to Minister of Trade and Com-

June 12, 1967
Questions
merce): Immigrant professional workers ad- totalled $1,396 million, made up of the fol-mitted to United States whose last residence lowing amounts:
was Canada. Occupation	Year ending June 30 1964 1965 1966	Government of Canada issues Provincial direct and guaranteed	million $ 32Scientists	163	196	159	issues	$448Engineers, professional	789	892	852	Municipal	$179Professors and instructors 125	132	158	Corporate	$737Physicians and surgeons	440	380	393	Of this amount $1,345 million	came fromNote: Research workers are not listed as residents of the United States and $51 mila separate classification.	lion from residents of other countries.
Source: United States: Immigration and Naturalization Service, Department of Justice.


PER CAPITA DEFICIT IN BALANCE OF PAYMENTS WITH U.S.
Mr. Allard: In 1966, what was the per capita deficit of Canada in the balance of payments with the United States?


Jean-Charles Cantin: Canada's net purchases from the United States of goods and services (including investment income) during 1966 amounted to $1,982 million. Canada's population in mid-1966 was estimated to be 19,919,000 and Canada's net per capita balance of payments deficit on current account with the United States was accordingly equivalent to $99.50.


FOREIGN INVESTMENTS IN CANADA AND CANADIAN LOANS OBTAINED ABROAD
Mr. Allard: 1.	What was the value of foreign investments in Canada in 1966 and 1967 and where did they originate?
2.	For 1966 and 1967, what was the value of the loans obtained by Canada's municipal, provincial and federal governments and Canadian commercial firms on foreign money markets and which foreign markets made these loans?


Jean-Charles Cantin: 1. The book value of long-term foreign investments in Canada at the end of 1964 was $27,354 million. This was made up of investments of $21,443 million by residents of the United States, $3,463 million by residents of the United Kingdom and $2,448 million by residents of all other countries. Data for later years are not yet available.
2. New issues of bonds and debentures sold to non-residents of Canada during 1966


RESEARCH FUNDS TO QUEEN MARY VETERANS HOSPITAL STAFF MEMBERS
Mr. Allard: 1.	What are the names of the members of the medical staff of the Queen Mary veterans hospital in Montreal who obtained funds for research from the Defence Research Board and the Medical Research Council for the year 1966?
2.	What was the amount awarded to each of these persons for research funds in 1966?


Hon. Roger Teillel (Minister of Veterans Affairs):: 1, 2. No member of the medical staff of Queen Mary veterans hospital obtained funds for research from the Defence Research Board or the Medical Research Council for the year 1966.


IMPORTS AND EXPORTS, RUSSIA AND CHINA
Mr. Allard: 1.	What was the total dollar value of goods imported from Russia in 1966?
2.	What was the total dollar value of goods imported from communist China in 1966?
3.	What was the total dollar value of goods exported to Russia in 1966?
4.	What was the total dollar value of goods exported to communist China in 1966?


Jean-Charles Cantin: 1 and 2. The total dollar value of goods imported during 1966 is as follows: Russia $11,653,833; communist China, $20,594,268.
3 and 4. The total dollar value of goods exported during 1966 is as follows:
Communist Russia	China
Domestic exports $320,604,868 $184,879,317 Re-exports	4,405	941
Total exports $320,609,273 $184,880,258
June 12, 1967


NATIONAL DEFENCE EXCHANGE AND LIAISON OFFICERS IN U.S.
Mr. Ormiston: 1.	How many Department of National Defence exchange officers and men are at present posted in the U.S.A.?
2.	How many Department of National Defence liaison officers and men are at present posted in the U.S.A.?


Hon. Leo Cadieux (Associate Minister of National Defence):: 1. 74 officers, nine men.
2.	83 officers, nil men.


ARMOUR STONE, P.E.I. CAUSEWAY
Mr. Coates: Is it the intention of the Department of Public Works to request reconsideration for the use of Wallace sandstone as an armour stone in the construction of the New Brunswick-Prince Edward Island causeway?


George James McIlraith: Yes.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Coates: 1.	What will be the anticipated final cost for constructing the young offenders penal institution at Springhill, Nova Scotia?
2.	Were additional moneys paid to Foundation Maritime Limited from the original contract signed on November 9, 1964, and, if so, what was the additional amount and what was the reason for the additional payment or payments?
3.	Has the government taken any action against Foundation Maritime Limited for not meeting the completion date of May 9, 1966, as specified in the original contract and, if so, what was the penalty imposed?
4.	Have the buildings constructed by Foundation Maritime Limited passed inspection by the Canadian penitentiary service and, if not, for what reason, and what is the anticipated date when these buildings will be turned over to the government by the prime contractors?
5.	Have employees of the Canadian penitentiary service been transferred from other institutions to the young offenders penal institution at Springhill and, if so, how many and what are their present duties?
6.	On what date will the first inmates be transferred to the young offenders penal institution at Springhill?
Return tabled.
Orders for Returns


OPERATIONS OF C.G.S. ''C. D. HOWE&quot;
Mr. Orange: 1.	Is it the intention of the government to operate the C.G.S. C. D. Howe on the eastern Arctic patrol during the summer of 1967 and, if so, has a schedule been worked out and what communities will this ship visit?
2.	How much did it cost to operate this ship on the eastern Arctic patrol in the summer of 1966?
3.	How many tons of freight did it carry from ports in the south to northern points of debarkation in the same year?
4.	How many tons of freight did it carry from point to point in northern Canada?
5.	How many persons were examined by medical teams aboard the ship?
6.	How many persons were evacuated as a result of these examinations (a) by ship (b) by aircraft (c) by a combination of both aircraft and ship?
7.	How many personnel were carried on the ship excluding persons normally engaged in the operation of the vessel?
Return tabled.


FEDERAL EXPENDITURES ON RECREATIONAL AND SPORTS FACILITIES
Mr. Munro: 1.	What was the total amount of money spent by the federal government on all recreation and sports facilities for the years 1962, 1963, 1964, 1965 and 1966?
2.	What individuals, associations, corporations, governments or other entities were the recipients of such amounts and what was the amount allocated to each?
Return tabled.



VETERANS AFFAIRS


Mr. Speaker:: Does the minister wish to revert to motions?


Roger-Joseph Teillet: If I may. I believe the other day I undertook to table a letter, and if this is the moment I would appreciate the opportunity to do so.


Mr. Speaker:: Does the minister have leave to table the letter?


Some hon. Members:: Agreed.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: I should like to ask the

June 12, 1967
Inquiries of the Ministry Prime Minister what Canada's position is regarding the stand announced by Israel through Premier Levi Eshkol to the effect that Israel will not agree to revert to the situation which existed with respect to boundaries until a week ago? Will the Prime Minister tell the people whether Canada intends to stand with Israel in this regard?


Lester Bowles Pearson: Mr. Speaker, it would of course be quite premature to attempt to answer a question of that kind, which would depend on so many circumstances. However, I can say that I think Israel is quite entitled to receive from the international community a greater guarantee of her security than she has had in the past.


John George Diefenbaker: Mr. Speaker, would the Prime Minister say what instructions are being given to the Canadian ambassador to the United Nations on the Russian resolution which provides that the Israelis shall withdraw to the former boundaries, or those in existence when hostilities broke out?


Lester Bowles Pearson: No, Mr. Speaker, I cannot deal with that subject until it appears before the security council. It has not been considered yet by the security council, so I cannot go beyond the answer I gave my right hon. friend in regard to the commitments which the Israelis are undoubtedly entitled to receive from the international community and the security council, which would give her greater security than she has had in the past.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I should like to direct my question to the Prime Minister. Has any attempt been made to implement the suggestion, apparently made first by India and then by Canada, that the secretary general of the United Nations send a special representative to attempt conciliation talks between Israel and the Arabs?


Lester Bowles Pearson: I think, Mr. Speaker, that one of the resolutions before the security council has now dealt with the matter in a limited and brief but not direct way. I know it is being considered at the United Nations whether it would be desirable for the secretary general or someone designated by him or responsible to him to go to the Middle East at the earliest possible date to see whether it would be possible to accomplish the purposes which my hon. friend mentioned.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, may I ask the Prime Minister whether today he received representations from the Voice of Women organization with reference to the world situation, particularly with reference to the war in Viet Nam.
Can the Prime Minister also tell the house whether the Canadian government intends to make any further representations to the government of the United States and the government of Hanoi in the hope of bringing about a settlement there? In addition, in view of the fact that the security council has had some success in bringing about at least a cessation of hostilities in the Middle East, would the Canadian government consider trying to have the security council interest itself in bringing about a similar settlement in Viet Nam?


Lester Bowles Pearson: Mr. Speaker, I understand that a delegation from the Voice of Women organization was received this morning by the parliamentary secretary to the Secretary of State for External Affairs in the absence of the minister, who is attending a meeting of the NATO council. I understand that the representations they made at that time are being referred to me this afternoon, and of course I will consider them.
So far as the last part of the question is concerned, which asked whether the security council could not take cognizance of this situation, my hon. friend knows that several efforts have been made in the past to bring the Viet Nam question before the United Nations or the security council. There are some very real difficulties in the way of doing this, the North Vietnamese having shown no inclination to go to the security council or the United Nations because, of course, they are not a member of that organization.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. In view of the fact that Canada is a member of the international control commission, would the Prime Minister take under serious consideration the advisability of Canada raising this matter in the security council, of which Canada is a member, in the hope that this might bring the two parties together for some discussions within the security council?
June 12, 19S7


Lester Bowles Pearson: Mr. Speaker, I should like to think this matter could be brought before the security council or some other agency of the United Nations, even the general assembly; but I know that whenever efforts were made in past months to accomplish this they were not successful. I would be very glad to look into the possibility again.


AGRICULTURE
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, 1 wish to direct my question to the Minister of Agriculture. In view of the concern of the Canadian Federation of Agriculture with the procedures and principles followed in connection with the expropriation of land, would the minister inform the house if the views of the Canadian Federation of Agriculture on the question of expropriation will be referred to the next dominion-provincial conference on agriculture?


Mr. Speaker:: Order, please. I suggest to the hon. member that this question is much too large in scope, and cannot be asked at this time.


INQUIRY AS TO CHANGES IN DAIRY POLICY
[Stage Direction]
On the orders of the day:
John George Diefenbaker: I would direct a question to the Minister of Forestry and Rural Development. The minister, who participated in answering the farmers when they made their pilgrimage to Ottawa, indicated to them that the government would answer by a specific date. When questioned in the house he replied: "We had announced, after the meeting with the leaders of the farm organizations, that before June 10 the government would make its position known on the farmers' requests for changes in the dairy policy".
Has that undertaking been carried out, and would the minister let the house know what the government intends to do about the serious dairy situation?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: Mr. Speaker, I answered a similar question last Friday. I mentioned on behalf of the Minister of Agriculture, who was then absent, that the announcement was made by the Canadian dairy commission, if I remember well, on
Inquiries of the Ministry Friday, June 2, about the dairy policy and some changes to that policy.


John George Diefenbaker: I now ask the Minister of Agriculture, has he received representations from the dairy farmers and particularly from those who participated in the visitation to Ottawa that came to such an untimely end with the doors of parliament being locked? I ask whether the government has now come to any decision and, at the same time, whether a request has been made by the dairy farmers, in view of the promise of the government to give them an answer regarding their problem, for another opportunity to meet with the minister some time between now and June 23.


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, I think all the farm organizations were made aware of the changes in the policy which were announced by the Canadian dairy commission one week ago last Friday. I have received a wire today from the heads of the Ontario Federation of Agriculture, the Ontario Farmers' Union and l'Union catholique des cultivateurs, requesting a further meeting.


John George Diefenbaker: Would the minister say whether the communique which was issued by the representatives of the farmers to whom he referred said that the eastern farmers would start writing to the minister and telling him in their own words what is the state of the industry?


John James Greene: That was not in the communication I received, but I read in the press that this organization or these organizations, or their leaders, apparently made some such release to the press.


John George Diefenbaker: You do not read these things?


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: May I direct a question to the right hon. Prime Minister. Has he received a telegram from the marine workers' and boilermakers' industrial union, local No. 1, Vancouver, drawing attention to the fact that the Burrard Dry Dock Company Limited has laid off 350 of its 800 employees?
In view of the serious repercussions this will have on our employment situation in

June 12, 1967
Inquiries of the Ministry British Columbia, which is not too healthy at the present time, may I ask the Prime Minister whether he has received this telegram and, if so, what action the government proposes to take to try to improve the situation?


Lester Bowles Pearson: I cannot recall having received it, but it may have come in during the morning. I will check when I get back to my office.


MR. JUSTICE LANDREVILLE REQUEST FOR HOUSE CONSIDERATION OF PENSION REQUEST
[Stage Direction]
On the orders of the day:
Mr. Robert McCleave (Halifax):: I have a question for the Prime Minister. Would the right hon. gentleman and his cabinet consider the reintroduction of the address to parliament in the event a request for a judge's pension comes from one L. A. Landreville of Sudbury?


Mr. Speaker:: Order. The hon. member will recognize that this question is hypothetical.


Robert Jardine McCleave: Then I should like to discuss the hypothetical question at ten o'clock tonight.


FISHERIES
[Stage Direction]
On the orders of the day:
Mr. J. O. Bower (Shelburne-Yarmouih-Clare):: I have a question for the Minister of National Health and Welfare who is ex officio the minister from Nova Scotia. Since I see neither the minister nor his parliamentary secretary in their places I would direct it to the Prime Minister.
I wish to ask the Prime Minister whether to his knowledge the Minister of National Health and Welfare has received a communication from the government of Nova Scotia soliciting the co-operation of officials of the government of Canada in determining the extent of losses incurred by the people engaged in the lobster industry in Nova Scotia during the disastrous storm of April 28 and 29, and also soliciting a financial contribution from the federal government to supplement provincial aid. If so, can the Prime Minister give an assurance that the government will comply with the provincial requests?


Lester Bowles Pearson: I do not know whether the minister has received any such communication. In any event,

it would normally go to the Minister of Fisheries, who would be the minister responsible.


John Oates Bower: I understand the communication from the province-


Mr. Speaker:: Order. The hon. member has to ask a question.


John Oates Bower: Would the Prime Minister be good enough to find out?


Mr. Speaker:: Order, please. The question put in this form is not in order.


Lester Bowles Pearson: Yes, I will find out.


John George Diefenbaker: I suggest, with great deference, that the question was perfectly proper.


Some hon. Members:: Order.


John George Diefenbaker: I do not take directions from the noisy people opposite, who change Hansard when their answers are not appropriate. My hon. friend asked a reasonable question, and I suggest he should be entitled to an answer.


Lester Bowles Pearson: With great respect, Mr. Speaker, I think your ruling was perfectly proper.


John George Diefenbaker: That being so, I ask Your Honour now to make the ruling.


Mr. Speaker:: I have already made a ruling.


John George Diefenbaker: Oh, no. Did Your Honour rule that the question was improper? Is that supposed to be a precedent? I ask Your Honour.


Mr. Speaker:: I am afraid that many of the rulings I make are precedents, and perhaps this one is also. In any event the ruling has been made.


REPORTED INFESTATION OF LUMBER EXPORTED TO AUSTRALIA
[Stage Direction]
On the orders of the day:
Mr.  A. B. Patlerson@Fraser Valley: I wish to address a question to the Acting Minister of Trade and Commerce, and ask him whether his attention has been called to a report from Sydney, Australia, to the effect that pest control experts said on Saturday that carpenter ants which have caused millions of dollars worth of damage apparently had been hatched in lumber brought from Canada. Has
June 12, 1967

this been brought to the minister's attention, and is an investigation being held?


Hon. Jean-Luc Pepin (Acting Minister of Trade and Commerce):: I will look into this and try to answer the question tomorrow.


FINANCE
[Stage Direction]
On the orders of the day:
Mr. D. V. Pugh (Okanagan Boundary):: My
question is directed to the Minister of Finance. Has the minister kept a record of the distribution of the new 1967 coinage? My reason for asking is that supplies in the west seem to be very short in comparison with circulation in the rest of Canada.


Mr. Speaker:: I doubt whether this question is in order, but if the hon. member thinks it is a matter of urgency he might give notice of his intention to discuss it at the time of adjournment.


David Vaughan Pugh: With deference, I asked this question because on July 1, 1967 we are celebrating our centenary. One of the things the government has done has been to produce new coinage in connection with this event, and the coinage is not being as well distributed in the west as it is in the rest of this country.


David Vaughan Pugh: Mr. Speaker, perhaps you will bear with me now when I rephrase my question which is of urgent importance to all Canadians. Will the Minister of Finance indicate whether he will take steps to look into the distribution of the new centennial coinage, not only to the various provinces but also to other countries, particularly to the United States?


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I have already looked into this matter and have been informed that a very large quantity of new currency has already been put into circulation. It is my understanding, like the hon. member's, that regional distribution has not been too good.


David Vaughan Pugh: Thank you for that information. May I ask the minister whether he will take steps to see that the distribution of this currency is undertaken on a more equitable basis, keeping in mind the west as well as the rest of the country?
Inquiries of the Ministry PRIVILEGE


MR. MCINTOSH-ATTRIBUTION TO PRIME MINISTER OF REMARK IN DEBATE
[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: I rise on a question of privilege. It was brought to my mind by the refusal of the Chair to allow a question directed to the Prime Minister by my hon. friend from Shelburne-Yarmouth-Clare. If everything is to be done according to the rules and regulations I will raise my question of privilege, and it is this. As reported at page 1340 of Hansard, June 9, 1967 a question was asked in this house by the Leader of the Opposition as follows:
I do not know whether the Prime Minister heard the question I asked a while ago. I now ask him specifically, in view of the fact that the statutes of Canada refer to July 1 as Dominion day and he this morning called it Confederation day, does this mean more chiselling away of part of our heritage, when the government refers to this as Confederation day without a decision of parliament?
The Prime Minister answered:
Mr. Speaker, I really cannot answer such a picayune, chiselling question.
The report continues:


John George Diefenbaker: I ask the Prime Minister this question, which is not to be answered by facetious attempts at wit. Is the "Dominion" in Dominion day a dirty word now?


An hon. Member:: It could be.


Lester Bowles Pearson: I did not say that.


John (Jack) McIntosh: I heard it and saw it.


Lester Bowles Pearson: On a question of privilege, I made no such observation and the hon. member has no right to say I did. He had better withdraw this allegation.


John (Jack) McIntosh: I am surprised the Prime Minister should get up in this house and refuse to back up the words he used when he was sitting in his seat.


Mr. Speaker:: Order. When an hon. member states he heard another hon. member utter certain words and the other hon. member says he did not utter them, there is not very much that can be done about the situation. The rule of the house is that we have to accept the word of an hon. member. We have to accept the word of the hon. member that he heard certain words uttered, and the statement of the other hon. member that he did not utter those words. I would say that the Chair can certainly do nothing.

June 12. 1967
Inquiries of the Ministry


John (Jack) McIntosh: I not only heard it, I saw his lips move.


Lester Bowles Pearson: On a question of privilege, I said I made no such observation. I uttered no such words, and the hon. member must accept my denial and withdraw his statement.


Some hon. Members:: Hear, hear.


John George Diefenbaker: There is nothing to withdraw. I was sitting here on Friday-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -and I can get any number of hon. members who are not inclined to ascribe Charlie McCarthy words to anyone, and they heard what the hon. member for Swift Current-Maple Creek has just averred.


Lester Bowles Pearson: I repeat that I made no such observation and used no such words, and if the right hon. gentleman says I did he must accept my denial and withdraw his statement.


Roger-Joseph Teillet: It was I who made the remark that I think the Leader of the Opposition is referring to. I said at the time that his attitude was tending to made it a dirty word. Those are the words I used at the time.


Lester Bowles Pearson: Now perhaps the right hon. gentleman will withdraw the statement that I uttered any words of that kind at the time. I ask him to get up and withdraw that statement.


Mr. Speaker:: Order, please. Obviously we are getting nowhere at all. I suggest to hon. members that we do not serve any purpose by joining in these-


Mr. Habel:: Mr. Speaker-


Mr. Speaker:: Would the hon. member kindly resume his seat. I believe I stated the position as it is a moment ago. When a statement is made by one hon. member and the right hon. Prime Minister makes a statement formally denying that he used certain words, I remind hon. members that we have to accept the statement of any hon. member, of each and every individual member of the house. On the other hand I do not think the right hon. Prime Minister can ask the hon. member for Swift Current-Maple Creek to withdraw his statement. I am sure his statement was made in good faith, and I do not see how the Chair can ask the hon. member to withdraw his words. At the same time I

suggest that the house has to accept the statement made by the right hon. Prime Minister, in the same way as we have to accept the statement made by any other member to the House of Commons.


Mr.   J.-A. Habel@Cochrane: On a question of privilege, Mr. Speaker, I want to deny categorically what the hon. member has said. I am the one who said "maybe", and I am not ashamed of it at all.


John George Diefenbaker: How many McCarthys are there over there?


Mr. Speaker:: The hon. member for Red Deer.


Lester Bowles Pearson: Mr. Speaker, I take it the hon. member has withdrawn his statement that I uttered any words of that kind. I take it he has withdrawn that.


Mr. Speaker:: Order, please. I suggest to the right hon. Prime Minister that the hon. gentleman does not have to withdraw the statement he made. He has said he heard these remarks. I am sure the hon. member, as do all other members of the house, has to accept the statement by the Prime Minister.


Lester Bowles Pearson: Mr. Speaker, all I am asking him to do is accept my statement that I did not utter those words. If he would do that in accordance with the rules the incident would be ended.


John George Diefenbaker: The ruling has been
made.




[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I wish to ask the Prime Minister whether today's report is true that the Egyptian government has forced the closing of part of the Canadian embassy in Cairo. If it is true, has the government of Egypt given the government of Canada any explanation, and what steps is the government taking?


Lester Bowles Pearson: Mr. Speaker, I understand that the United Arab Republic authorities asked our embassy a few days ago to remove part of the embassy staff from our chancery as a precautionary measure in view of widespread demonstrations. The embassy continued to function with reduced staff, and according to the latest information from our ambassador the embassy
June 12, 1967

is now functioning normally and all members are safe and well.


Robert Norman Thompson: As a supplementary question, has the Prime Minister any word that this action was taken because the Canadian embassy was carrying on some of the normal functions of the embassy of Great Britain due to the lack of diplomatic relations between those two countries?


Lester Bowles Pearson: Mr. Speaker, for some months now, as my hon. friend knows, we have been looking after British interests in Cairo, and the British official personnel there come under our ambassador. In am not aware that the U.A.R. asked for the evacuation of the British interests section of the Canadian embassy. Our latest information is that there has been a U.A.R. request for a reduction in the staff of the British interests section which is now occupying the British owned chancery premises.


NATIONAL DEFENCE
[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I wish to direct a question to the Minister of National Defence on a matter on which I am sure Your Honour will understand that we require an immediate explanation. Can the Minister of National Defence explain to the house why he is not now at the NATO ministerial conference, and why the President of the Privy Council is there in his place as the military adviser to our Secretary of State for External Affairs?


Paul Theodore Hellyer: Mr. Speaker, the spring meeting is one usually attended by the secretaries of state for external affairs. At the suggestion of several members of the government, including the Prime Minister, the President of the Privy Council accompanied the Secretary of State for External Affairs at this time, which is not unusual. Often ministers of finance or other interested government officials travel with these parties in order to get first hand knowledge of the latest problems of the alliance, and I think this is quite in accord with the precedents that exist.


Harold Edward Winch: As a supplementary question, in view of the answer given by the minister and in view of recent statements regarding NATO made by the President of the Privy Council, could he inform the house whether this is a brainwashing endeavour?
Inquiries of the Ministry Mr. Speaker: Order. The question is supplementary, but also out of order.


AGRICULTURE
[Stage Direction]
On the orders of the day:
Mr. Gaston Clermont (Labelle):: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
Since March 22, 1967, has his department negotiated with the provincial agriculture department on assistance to potato producers? If so, what are the results?


Mr. Speaker:: It is difficult for me to determine whether the question of the hon. member for Labelle is urgent. I am inclined to think that this question should be put on the order paper, but, if the hon. member feels this is an urgent question of national importance, he could bring it up on the adjournment motion.


Gaston Clermont: Mr. Speaker, it is because the premier of Quebec claimed that a request
for such assistance had been made by the Quebec authorities and that the federal agriculture department had rejected it.


INQUIRY AS TO STEPS TO MEET INCREASED DEFICIT
[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Minister of Trade and Commerce but in his absence perhaps I might ask it of the Minister of Finance, since they both share the blame. In view of the startling increase in our trade deficit for April, as shown in the D.B.S. weekly report issued on Friday last, according to which our deficit rose from $1 million to $73 million-


Mr. Speaker:: Order. The hon. member ha* to ask his question.


Gordon Harvey Aiken: -for the month of April, what
action is the government taking to improve this dangerous situation and, in particular, will the Kennedy round of tariff reductions further affect this balance?


Mitchell William Sharp: Mr. Speaker, developments in our trade situation are pretty much as we had expected. I

June 12, 1987
Inquiries of the Ministry am happy to share with my colleague the Minister of Trade and Commerce the credit for the remarkable increase in exports from this country. I think the trade balance will turn out about as expected, and I do believe the Kennedy round will benefit both the consumers and the exporters.


PUBLIC SERVICE
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would direct a question to the Prime Minister, at the request of various superannuated civil servants across the country, asking when they may expect the increases which were recommended by the parliamentary committee, the matter having recently been before Treasury Board. There is a great deal of anxiety among these people, and I think deservedly so.


Lester Bowles Pearson: Mr. Speaker, I think this matter was dealt with the other day in reply to a question directed by my hon. friend the hon. member for Winnipeg North Centre. It was stated then, and I am glad to repeat now, that the matter is under active and urgent consideration.


Mr. Stanley Knowles (Winnipeg North Centre):: As a supplementary question, Mr. Speaker, may I ask the Prime Minister if he can now assure the house that the matter will be before parliament this month?


Lester Bowles Pearson: That depends, Mr. Speaker, on how we get along this month among other things.


Stanley Howard Knowles: Is the legislation ready to be placed before parliament?


Some hon. Members:: Order.


INQUIRY OF THE MINISTRY
[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I wish to direct a question to the Prime Minister. Is it the intention of his government to prevent the government of Nova Scotia from dealing with the cabinet minister from Nova Scotia except on matters pertaining to national health and welfare?


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


Malcolm MacInnis: Mr. Speaker, I fail to see where such a question is out of order, though I accept your ruling. The Prime Minister has indicated to the house that representations coming from the government of Nova Scotia must be channelled through the Minister of Fisheries. If this is so it is certainly a break from long established precedents.


Lester Bowles Pearson: On fisheries matters.


Mr. Speaker:: I do not think the question is in order, and I thank the hon. member for his acceptance of my ruling.


FISHERIES
[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-AIberni):: Mr. Speaker, I have a question for the Minister of Fisheries, and not as an Atlantic province minister. My question arises out of a statement he made before the Fishery Council of Canada on May 7, in which he indicated that within a month the government would begin to initiate the straight base lines. In the absence of the Secretary of State for External Affairs I should like to ask the minister, who I know follows this matter closely, whether such initiation has commenced and whether the situation has changed in any way since his estimates were under discussion in the house not long ago.


Hon.   H.-J. Robichaud@Minister of Fisheries: Mr. Speaker, I would refer the hon. member to the statement I made when my estimates were introduced in the house on Monday last. I am sure the hon. member will understand that because of the international situation which has existed since then it has been impossible for the Secretary of State for External Affairs to give this matter the attention it really deserves.


Thomas Speakman Barnett: I have a supplementary question. I recognize the truth of what the minister has said, but I should like to ask him whether he has been following this matter through his department during this particular time.


Mr. Speaker:: Order, please. The supplementary question is repetitious.


Mr. G. L. Chatterion (Esquimalt-Saanich):: have a supplementary question, Mr. Speaker. I should like to ask the minister whether,
June 12, 1967

when the co-ordinates and base lines are announced, this will mean that all matters concerning historic and treaty rights will have been settled with other countries.


Mr. Robichaud:: I already stated that at the time the Secretary of State for External Affairs makes his statement he will give all the details available on the matter.


PRESENCE IN GALLERIES OF TELEVISION CAMERAS
[Stage Direction]
On the orders of the day:
Mr. Robert Stanbury (York-Scarborough):: Mr. Speaker, in the absence of the government house leader may I direct this question to the acting house leader or to the Prime Minister. In view of the presence of television cameras in the gallery, are we soon to bring the Canadian people into closer contact with the proceedings of parliament through radio and television coverage of this house or its committees?
tTranslation]


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I wish to ask a question to the hon. Secretary of State.
Like my colleague for York-Scarborough, (Mr. Stanbury), I see television cameras in the east and west galleries of the house. Could the hon. minister tell us whether the permission of members is required for the broadcasting of the debates?


Miss LaMarsh:: That is Mr. Speaker's
responsibility.


Mr. Speaker:: Order, please. The question is out of order. I suggest that notice can be given.


John George Diefenbaker: Mr. Speaker, I am not sure how to preface this question, but with great respect the questions asked by the hon. member for York-Scarborough and the hon. member for Saint-Denis were questions that affect the rights of members of parliament and this House of Commons. No one can conclude that these machines are here just for storage.


Mr. Speaker:: Order, please. Perhaps I may have leave of the house to revert to motions
Inquiries of the Ministry for the purpose of indicating that to the best of my information the cameras were placed in the galleries at the request of hon. members who decided to support a C.B.C. centennial project in reference to the operations of parliament. I believe that when a certain bill which is now on the order paper is reached, arrangements will be made with house leaders for the filming of certain parts of the debate on that bill. I am also informed with authority that the house leaders have already discussed this subject. I might add that independent members have also been consulted by the Chair, and their support or approval was obtained some weeks ago.


THE CANADIAN ECONOMY
[Stage Direction]
On the orders of the day:
Gordon Harvey Aiken: Mr. Speaker, I should like to direct a question to the Minister of Finance. What action is the government taking to level off the dramatic increase in the cost of living index as reported for May in the weekly Dominion Bureau of Statistic bulletin on Friday?


Mitchell William Sharp: Mr. Speaker, I think I gave a fairly lengthy answer to that question when I presented my budget.


PUBLIC BUILDINGS
[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Minister of Public Works which is of urgent importance to the city of Vancouver. Has the minister received a copy of the resolution passed by the Vancouver city council regarding the location of the new federal building for Vancouver? If so, what consideration is being given to this request for a change in location?


Mr. Speaker:: Order, please. It is my opinion that this question cannot be asked at this time.


Harold Edward Winch: Mr. Speaker, I am certain the minister would be happy to answer the question if you will allow him to do so. The Vancouver city council would like to have an answer.


Mr. Speaker:: The hon. member knows
there are rules of this house, and that one of

June 12, 1967
Supply-Finance
those rules is that if a question is ruled out of order on the basis of urgency members can give notice of their intention to debate the matter on the adjournment motion. That is the course I suggest the hon. member for Vancouver East follow.


FINANCE
[Stage Direction]
On the orders of the day:
Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I have a question for the Minister of Finance. I understand the tax structure committee will be meeting tomorrow in Toronto. Can the minister give us any information as to what will be discussed at that meeting?


Mitchell William Sharp: Mr. Speaker, the tax structure committee, which is a committee of federal and provincial finance ministers, is meeting in Toronto because of difficulty in obtaining accommodation in Ottawa. I may say I am happy that the meeting will take place in that city.
We are going to review the main conclusions of the Carter commission; that is, the royal commission on taxation. The purpose of the meeting is not to discuss particularly the commission's views on federal-provincial matters, but to examine the basic proposals on tax structure which have been put forward and to look carefully at their implications. Of course I shall welcome the views of the provincial ministers on this important matter.



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


DEPARTMENT OF FINANCE
[Stage Direction]
1. Departmental Administration including administration of the guaranteed loans Acts, the Inspector General of Banks' Office, and payments to provinces and grants as detailed in the Estimates, $3,806,600.
The Acting Chairman (Mr. Dube):: Order, please. House again in committee of supply, estimates of the Department of Finance for fiscal year ending March 31, 1968. Vote No. 1 is to be found on page 140 of the blue book with the details thereof listed on page 143. Shall vote 1 carry?


Mr. Lambert:: Mr. Chairman, I felt that on this occasion we might have a statement from 
the Minister of Finance, notwithstanding the fact that he delivered himself of a budget speech the other night. There are a number of items that should be discussed because of their rather technical aspects. Perhaps the minister could give us some information. While I do not wish to get into a budget debate or anticipate the type of speech I would make in such a debate, there are a number of matters with regard to which we must ask the Minister of Finance for the views of the government and his predictions.
I turn first of all to the subject of interest rates. As we know, the Bank Act which was passed recently by this parliament has within the provisions of section 91, if my memory does not fail me, a rather intricate formula for the, shall we say, triggering-off of any ceiling on interest rates chargeable on some of the loans chartered banks may make. It is a sort of trigger formula for the removal of any ceiling on these interest rates.
[DOT] (3:30 p.m.)
At the time the committee and this house were considering Bill No. C-222 last year there was a very clear indication by the minister and his officials that the interest rate of last year, in terms of the average rate for government short term loans, was declining. In effect, it was as a result of the minister's remarks that the committee decided to make an amendment to the act whereby the ceiling was fixed at 7| per cent for the balance of 1967. This was done because it was indicated that if interest rates declined as they had been doing over the course of the winter, some time next November the trigger in the Bank Act could operate, and it was deemed that there could be too sudden a change and therefore the rate should be phased out. But since then one has been hearing reports that a trough has been reached with regard to the decline in interest rates. As a matter of fact, the financial press has been replete with articles indicating that notwithstanding the relative freeing of money, interest rates are going into a reverse process and will probably go up as a result of strong demands for funds.
Does this mean that the trigger will not apply with regard to the Bank Act? I think the minister should now be in a position to tell us what he anticipates for the next half year with regard to interest rates in so far as they relate to the trigger formula under the Bank Act. I think the minister should also report in some detail on the developments under the Bank Act, the developments with regard to the Bank of Western Canada and
June 12, 1967

the Bank of British Columbia. We have also received notice now through the publishing of advertisements that there is another bank proposed for incorporation this year, the Bank of Alberta.
I ask the minister: is there anything in what some financial writers have said? Is there now too much competition? What are the views of the minister with regard to the developments under the Bank Act? I think this is an admirable time for the minister to give us his assessment of the situation. The new Bank Act has been in force only six or seven weeks, but already we have seen some significant developments with regard to types of savings accounts, the interest rate that is being paid to depositors in these bank accounts and the reaction of the near banks to them.
The next matter is related to the Bank Act but concerns a different subject. Is the minister in a position to tell us when the government intends to refer to the committee on finance, trade and economic affairs the regulations that were to be made with regard to interest disclosure? They may have been published in the Canada Gazette, but the Minister of Finance is not the one who files these details. This is done by the President of the Privy Council. As a matter of fact, it was only by a careful combing of all the Votes and Proceedings that I found that some weeks ago the President of the Privy Council had tabled the regulations made under the Canada Deposit Insurance Corporation Act. It must be remembered that in this regard there was a very definite undertaking that the regulations would be sent to the finance, trade and economic affairs committee. I suggest this should not be done at the tail end of this session.
I think it is unfortunate that the committee did not have direct access to these regulations. Of course, the members of the committee can get the order in council and see what the regulations are, and I have already done so with regard to the Canada Deposit Insurance Corporation, but the matter should be referred to the committee by way of resolution. The minister must bring in a resolution to refer these matters to the committee. I think the sooner this is done, the better off we will be. I hope to see such resolutions on the order paper within the next week with regard to both the Bank Act and the Canada Deposit Insurance Corporation Act so that the rules and regulations will be turned over to the committee and we may consider them. We will not be able to attend to them before the
Supply-Finance
end of June, when parliament is scheduled to rise for a recess of an indefinite period, but at least we will have them before us and can talk to our friends and contacts within the banking system and the near banking system, who will be able to give us a professional assessment of these rules and regulations. We can then in the month of September, or earlier if that is to be the case, come back and be prepared to get down to work and discuss these matters rather more intelligently than would be the case if we were to arrive back here cold, as it were.
Therefore, Mr. Chairman, I make a special plea to the minister to see that his colleagues agree to these matters being put on the order paper and dealt with. As far as I am concerned and, I think, my colleague the hon. member for Perth-I cannot speak for my colleagues on the committee from other parties-we would be prepared to see such resolutions go through the house without debate in this instance so those regulations may be sent to the committee.
I trust that the minister will tell us something about a matter dealt with in numerous speeches which he has been making of late. The minister has a very good distribution service from his office and I receive pages and pages of speeches. They all have one central theme-the wisdom of Canada not doing anything to upset a continuing, strong flow of foreign funds for investment in this country. While the Minister of Finance has been making these speeches, ably assisted by the Minister of Forestry and Rural Development, other members of the cabinet have made speeches on a different theme. I do not know why we have not had a duel between the Minister of Forestry and Rural Development and the President of the Privy Council, because in other jurisdictions this is apparently how differences between members are sometimes settled. I suppose ours in Canada are really verbal duels.
[DOT] (3:40 p.m.)
However, so far as ideas are concerned there is a head-on confrontation between the Minister of Finance and his associate, the minister of forestry on the one hand and the erstwhile minister of finance on the other. We know that a few weeks ago he really gave the old pail a solid kick and threatened to upset it when he spoke out on the subject of Viet Nam. Personally I find I cannot accept the view of the hon. member for Davenport concerning cabinet solidarity and his semantics regarding the expression of government poli-

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cy and the expression of views or opinions. That is one luxury which the President of the Privy Council can no longer have now that he is back in the cabinet. Now he is off to the NATO ministers' conference in a related field of foreign affairs I fear we should tremble in dread of what ukases may come forth from him with regard to that aspect of our foreign affairs.
To return to the subject of foreign investment in Canada I point out that the speech from the throne dredged up as a prospective bride, for the fifth time I think, the Canada Development Corporation. I suppose it was originally in the thought of the then minister of finance who first propounded this idea that the Canada Development Corporation should be set up by the government of Canada. How was it going to operate? We were going to either buy back Canada or borrow back Canada. Here I am not using an original phrase; others have used it far more effectively than I can. We were going to go into debt financing rather than equity financing. However, this is not the time to argue in detail the pros and cons of equity versus debt financing, and I am certainly not going to argue ahead of time what I consider to be the potential tragedy in the introduction of the Canada Development Corporation. I can only point out that I do not think the Canadian people support this idea.
In a province as wealthy as the province of Alberta the Alberta Development Corporation was started. It was anticipated that $10 million would be raised in the first year, which is all right for a provincial jurisdiction. However, I doubt that they received subscriptions for $2 million. That is how far it went. In so far as the Canada Development Corporation is concerned, now that the Canada Pension Plan is siphoning off some $800 million a year from the private sector of investment into the public sector, there is to be even much less money available for investment in the Canada Development Corporation. Therefore I think the concurrent existence of the two, both competing for money, will place one more demand upon less and less dollars which are available to the taxpayers or the investors of the country. Notwithstanding the fact that the Canada Development Corporation has been referred to in the speech from the throne, I hope the Minister of Finance will see to it that this idea gets lost amidst the shuffle and press of parliamentary business and that it will ultimately be pigeonholed and there gather dust and remain merely an interesting idea which 
was put forward at one time by a man who had extremely nationalistic ideas in so far as Canada is concerned.
There is also another matter on which the minister may have made a brief statement. He will recall that when we were considering last year the estimates of the Department of Finance and also the Bank of Canada Act there was a good deal of discussion concerning the concrete decision by participants in the World Bank with regard to a new world monetary exchange unit. I believe that a conference was held not long ago and the minister reported to the house that he was disappointed that not as much progress had been made in this regard as he had hoped. I think he could elaborate on that subject so that we can see just where we are heading with regard to our world foreign exchange relationships.
There are indications of greater and greater pressure being put on the U.S. dollar, and certainly the results of last week's activities in the Middle East are likely to create a very serious potential problem for Great Britain, virtually a convertibility crisis in the making, because if a number of oil-rich Arab states which now hold tremendous sterling deposits in the United Kingdom suddenly get it in their minds that they will withdraw their funds and go off in a huff-I do not know where they would place their money-this would pose a very serious problem. As a matter of fact, we might see a further deterioration in the relationship between Great Britain and its erstwhile friends in the Middle East which would cause a blocking of sterling balances. This would upset the whole world pattern and prove the necessity for some form of agreement at least between the major countries of the world to ensure that a national unit shall not serve as the ultimate reserve for international exchange payments.
Several of my colleagues intend to speak in detail about the minister's estimates. There are one or two points that arose the other day when I attended a meeting of the committee on external affairs. As a matter of fact members of the committee were mystified at the tables which the director of the external aid branch produced with regard to the quantum of external aid supplied by Canada, and it was found that the figures he was using bore absolutely no relationship to the estimates as they appear in the blue book. The partial explanation was that the total of external aid was made up from a number of departments including, as the witness said, the Department of Finance. In this connection I would like to
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know if there is some other source of external aid, apart from item 50, in the very general wording of these estimates which the Minister of Finance would consider as his contribution to external aid. If so, perhaps the minister could indicate it to the house.
[DOT] (3:50 p.m.)
Recently the minister issued some statements concerning small business loans made under the act of that name. One of these was dated June 2, 1967. I believe this act has been much maligned by being ignored by the public and the news media. As we know, this measure was brought into its modern dress and completely overhauled in 1959 or 1960, if my memory serves me right. I would not like to insist that the previous administration introduced that act because I have not been able to check that aspect, but certainly it was brought up to date about 1960.
It is very instructive to see how much money has been available to small businesses under this act. On June 2, 1967, the minister announced that loans totalling $3,590,997 were made to 401 borrowers under the Small Businesses Loans Act during the months January to March. The announcement does not say "inclusive" so I am not sure whether the minister was reporting for the first quarter of the calendar year 1967 or for only two months. At any rate, under this legislation the government may guarantee loans made by chartered banks for a wide range of business improvement purposes to small business enterprises engaged in manufacturing, wholesale and retail trade or in the service industries. A maximum of $25,000 may be lent to a borrower at any one time. Loans must be secured and may be repaid over periods of up to ten years. The maximum rate of interest is 5.5 per cent.
In my opinion, it is instructive to see how much money the banks have lent at 5.5 per cent over the past several years when money was allegedly so tight. The same situation applies, of course, to the Farm Improvement Loans Act, with regard to which I have a recent statement by the minister. In any event, I notice that according to the minister's statement the date of origin of the Small Businesses Loans Act was January, 1961, so I was not too far out when I suggested 1960. Since then, to the end of March, 1967, there have been 16,636 loans made for a total of $150,763,473.
I think this points up a salient fact, namely, that this was good legislation and the arrangements made thereunder with the banks and with the public have been working well.
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Over 16,000 businesses, with a gross annual revenue of about $250,000 each, have benefited from this measure. Recently the maximum estimated gross annual revenue was raised to $500,000. These businessmen have been able to borrow $150 million at 5.5 per cent interest. I believe this is a clear indication that this was good legislation. I hope there will be a continuation of these facilities, that businessmen will avail themselves of them and that the banks will take advantage of the guarantee so the program will continue to be a satisfactory one.
The same remarks may be made in connection with the Farm Improvement Loans Act. In March of this year the Minister of Finance announced that 15,380 loans had been made for a total of $37,227,219 during the period October 1 to December 31, 1966. The total in 1966 was 85,553 loans for a total of $212,796,464 compared with 91,191 loans in 1965 for a total of $202,706,910. So here we have two heads of legislation, one for the small businessman and the other for the farmer for farm improvements. The Farm Improvement Loans Act is not designed to cover the purchase of farms because that comes under the Farm Credit Corporation. It is actually for the improvement of farms. When we look at these two measures we can see that the banks, with government co-operation, will provide loans at 5 per cent with the result that progress can be made.
I am not going to go into the details about the quantum of loans made under these acts. I merely point to them as examples of the fact that progress can be achieved with government co-operation without setting up government agencies. This is not what I want to do. I do not want to have the government acting as big brother. There is all too great a tendency toward this today. The government, along with business and individuals who may want to do some financing, can get an intelligent, workable program which does have good results.
There are a number of other people who want to speak on the estimates of the minister so I am going to conclude my remarks by saying that I hope the minister is not going to feel the estimates of his department are going to pass in a great hurry this year at the tail end of the session. I trust we will have a good discussion today. I do not believe we need to have an interminable discussion, but certainly we should have a reasoned and intelligent discussion. I am sure there will be other questions raised, but I should like the minister to give me answers to the points I have mentioned.

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Mr. Cameron (Nanaimo-Cowichan-The Islands):: had perhaps missed an opportunity at the time of the regrettable collapse of one or two of these institutions, when I am sure that every provincial government was shaking in its shoes, in that he did not at that time suggest to them that the course of wisdom would be for them to insist that financial institutions licensed by the legislatures of the different provinces should voluntarily come under federal control and inspection.
I had the feeling at that time that every provincial government would have realized that this was the lifeline of safety in face of the very serious developments which were taking place within the financial institutions of the different provinces. I am quite sure the minister is fully aware that that was the psychological moment to do it and that he was deterred from doing it for fear of adverse reactions from one particular province. I think that federal governments will have to get over their continual phobia about the possibility of reactions from that province if we are going to advance as a nation.
I should like to say a word or two about another of those ticklish questions which came before the committee, and that is the position of the Mercantile Bank of Canada. I raised the matter with the minister not long ago in the house on the basis of an article which appeared in the Executive magazine which, while it was not conclusive, suggested to me that Mr. Rockefeller and his associates are planning to do precisely what I suggested they might do when the motion which I seconded was introduced in the committee to give the bank a five year period in which to expand their operations and make their shares attractive to Canadian investors. I had an uneasy feeling at that time, despite the blandishments of the hon. member for Verdun, that Mr. Rockefeller and his associates might be preparing to play a game of Russian roulette with the minister and would keep telling him that the time is not now propitious to put their shares on the market, that they would finally come up against the five year limit and would point out that it was still not propitious, and then would say to the minister: "What are you going to do now? Are you going to confine us to the 20 to one ratio or are you going to allow us to go on expanding in defiance of your legislation?"
I should like to be sure that the minister is keeping a very sharp eye on this situation. I confess that my interest is largely because of the history and the record of this financial group in the United States of America and its 27053-90
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operations outside that country, which lead me to the conclusion that while there may perhaps be a case to be made out for permitting a foreign bank to enter the Canadian business community, this is not a group that I should like to see in Canada. I say that because their record in other countries renders them, to my mind, somewhat suspect of being rather ruthless, rather concerned for their own interests to the neglect of the interests of the host country.
I too, like the hon. member for Edmonton West, was interested in the minister's remarks about the necessity to maintain the inflow of United States capital. I noticed that at least in one speech he based his anxiety that the flow should continue on the need to have capital to expand the Canadian economy. If one looks at it in one way I suppose that is a reasonable and correct estimate, but actually I am sure the minister knows there has been almost no net inflow of United States capital for development in Canada for some time. What we do have is an inflow of capital which balances the now rapidly increasing outflow. In fact, we need more in order to pay for the loss of previous investment. The bulk of the expansion of the Canadian economy in non-Canadian hands takes place on the basis of the retained earnings of existing subsidiaries of foreign corporations. Eventually I think the minister will have to face up to this problem and determine whether or not we are being fair to the people of Canada by allowing this continual expansion on the basis of funds earned in Canada from the work of Canadians to result in expansion of foreign holdings in our economy.
[DOT] (4:10 p.m.)
I have wondered whether the minister has considered the possibility of fiscal measures that would make it a little less attractive to plow back such an enormous volume of retained earnings, that would make it a little less attractive to have such a large body of retained earnings. After all, when we find that 70 per cent-perhaps it is over 70 per cent now-of capital for new investment comes from internally generated savings we can see that this is a most serious matter.
The hon. member for Edmonton West had some acid comments about the Canada Development Corporation. I will not make acid comments about it until I find out what type of beast it will be. It has had a number of sea changes and it may have some more. I can see that such a corporation might be

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extremely useful, not to buy back foreign-owned holdings in Canada which, to be fair, I frankly believe is an imbecility, but to act as a means of expanding the Canadian economy in Canadian hands so that the proportion of foreign-owned holdings in Canada will decline in relation to the whole.
I can see where the Canada Development Corporation could be a very valuable institution into which to pool a large part of the capital required for our expansion.
The hon. member for Edmonton West had some scathing comments, or, to use another word, some deplorable comments to make about the effect of the Canada Pension Plan and that it drained so much money from the private sector into public hands. No one would expect me to sympathize with the hon. member on that score. I wish at this time to reiterate a proposal that I have made a number of times in the house. I hope that the Minister of Finance at some time will see that my proposal is not so much for a publicly owned banking complex as something that it would be sensible for a harassed minister of finance to follow. My proposal is that we extend the operations of the Canada Pension Plan and that we offer the Canadian people a series of options. I do not see why we should allow private groups-and we are licensing more and more of them every session of parliament-to take control of the savings of the Canadian people and to do with those savings what they will. Indeed, if the minister is concerned about continuing the flow of United States capital to balance the outflow and to produce investments he will keep a careful eye on the investment dollars of life insurance companies in Canada, both Canadian and foreign owned, and he will find, interestingly enough, that there is nothing to choose between them in their investment policies.
Canadian and foreign owned life insurance companies invest up to 50 per cent of their total investments outside Canada and not in the development of this country. That is a compelling argument for expanding the operations of the Canada Pension Plan in such a manner that it will attract the vast bulk of the savings which now go into private hands, and over which, as investment funds, we have no control.
I, too, wish to say a word or two about the reform of the international monetary system. First, I wish to pay tribute to those officials of the Bank of Canada who have worked extremely hard in presenting Canada's view at

international conferences on this matter-regrettably, without too much success-and I express the hope that before long we shall persuade the other trading nations of the world of the necessity of establishing a new and additional unit of international exchange; I hope that we shall not be frightened by the possible implications of such a move that was suggested first, I think, by the prominent economist, John Maynard Keynes. I think that it was the late Lord Keynes who said, after he had introduced his idea of Bancor, that if it were adopted it would be the first step toward global administration.
He should have kept his mouth shut, because I am sure his suggestion frightened many people off at that time, just as I am sure the same idea frightens them today. Nevertheless, so far as I am concerned, this is an added argument in favour of a reformed international monetary system. If exchange positions have been acute up to now-and I know that opinions vary on this topic-I think we can all be sure that they will become increasingly acute as the United States economy suffers from increasingly severe strains owing to its military commitments in southeast Asia. The United States strains will bring an almost unbearable load to the international monetary system and methods of exchange as they now exist.
I was greatly heartened to see that in Canada we have extremely competent people in the Bank of Canada who are fully aware of these problems and are advancing our ideas in the world. I hope that the minister and the Government of Canada presses these ideas as decisively as possible.
The reform of the international monetary system is essential, not merely to deal with the present volume of world trade, but, more importantly, to solve the problems of the present century in promoting the development of the undeveloped countries of the world and to enable their populations to enter the twentieth century. That can be made possible only by the technological revolution of our times. Nothing must be allowed to stand in the way of that development. It is not a matter of charity, philanthropy or humanitarianism; it is a matter of survival. If Canada and the other members of the affluent world are not prepared to grapple with this problem of developing the undeveloped countries, then humanity will be in a precarious way. One of the tools with which we must work is a modernized international monetary system of exchange.
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With those words I share with the hon. member for Edmonton West the hope that the minister, before we are finished this debate, may give us his ideas on these and other points which I am sure he has in his mind.


Mr. Rynard:: Mr. Chairman, I wish to bring a few points to the attention of the Minister of Finance. I criticize the failure to provide sufficient funds in the estimates in those areas where money is so sorely needed. Also, I wish to compliment the minister for removing the sales tax on drugs, something which I and other members of the house have advocated for many years. That was a worth-while step.
I am interested to know what the minister intends to do with respect to the drug industry as an industry. I shall mention only a few firms. In this country we have old firms such as Ayerst, McKenna & Harrison, Limited which produces natural hormones for the production of estrogen and other valuable drugs as well. Such firms produce drugs which are of great benefit to Canada and other countries. The industry also employs many men who do research that is beneficial to agriculture. Especially useful is that research that has to do with mares for the production of estrogen.
[DOT] (4:20 p.m.)
I refer also to the Warner-Lambert firm, a multimillion dollar outfit that came to Toronto and is doing medical research, research into the production of drugs, which we have not got at present, and research in many fields which if it was not done would be a great potential loss. I also want to draw to the attention of the minister that this firm brought in Dr. Lumb, a British scientist doing research in the United States, which is one instance of a reverse brain drain. They were able to set up in Toronto a multimillion dollar investment in plant and equipment. I am also going to mention Smith, Kline and French. They have invested over $2 million in the Montreal area where they are conducting an extensive research program.
What is the intention of the government? Is it to remove all the advantages of this drug research or do they propose, as they propose in industry, to subsidize all those industries in Canada which find it difficult to meet competition from abroad? I think these are the questions that the Minister of Finance must ask himself, because the drug industry in Canada is far too important to write off with a shrug saying that cheap drugs are the only advantage we require in this country. We have to think of the research done and the
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scientists and other people who are trained and developed in Canada, as well as employment. Has this investigation been done?
I want to deal also with the health resources fund from the point of view that today we are tremendously short of doctors. Three years ago I drew this problem to the attention of the hon. member for Davenport, then minister of finance, and said the government should be getting ready to provide finances to run medical schools during the summer. This government brought in the medicare legislation two years before it goes into effect. I do not blame the Minister of Finance for the delay because he said there were certain financial problems involved, but I am saying that he said: Come what may we are going to bring it on July 1, 1968. I want to ask him what provision has been made to service the medicare contracts that they propose giving to the Canadian people. Are they going to cheat them and say they cannot possibly fulfil them because they have done nothing to guarantee there will be the number of doctors required to fulfil the demands of medicare across this country?
I have urged him to do this and newspapers have urged him to do it. There have been half a dozen editorials such as one in the Toronto Star a couple of weeks ago urging the government to supply the funds for summer terms in medical schools. This is an easy thing to do. It is not expensive. All you have to do is have the medical students who are taking a six year course at Queen's or at the University of Toronto take summer courses and you will create doctors in four years. This would mean an increase of one and a half times in the number of doctors graduating. This would in some measure meet the requirement for doctors set out in the Hall commission report.
Some may say, why was it not done? The biggest problem, according to what I have been told by people in the know or who should be in the know, is that funds would have to be provided to enable these medical students to go to school in the summer and not have to go out to work. The money could be made available through loans because once they graduate they are able to earn the money to repay any advances. But over and above that you will not be cheating the Canadian taxpayer out of something he is entitled to receive and for which he will be paying the bill under medicare.
Just in case the minister thinks I am rather hot on this point I want to draw his attention to an article by Dr. K. C. Thomson, past

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president of the Canadian Medical Association. He was describing the health resources fund of $500 million. This fund which was announced with glowing praise was described as a source of moneys to provide Canada with health education facilities. The need had been emphasized earlier by the Hall commission as a requirement to be met before Canada introduced any medical health insurance scheme whatever.
The minister said it is coming on July 1, 1968, without proper preparation. That is the only conclusion one can draw. The Hall report called for a great increase in doctors, nurses, technicians and all the personnel required for adequate medical care before medicare was instituted. Doctor Thomson goes on to say it is all right to build these structures if the provinces can match the grants dollar for dollar. Again I want to say to the minister that taxes went up 14 per cent federally last year. Some of us criticized him for that. I did not criticize him on that occasion. But at the same time provincial taxes across Canada went up by 25 per cent. I know he wants to be fair. With these increases, how in the world can the provincial governments go ahead and match the health resources fund dollar for dollar unless they are among the wealthiest provinces in Canada? I do not believe any of them can do it.
But after the minister has done that and has provided for the buildings, what about the staff facilities? What is the use of putting $500 million into buildings if we have not got the personnel to operate them? It comes back to the point that we are not providing the funds to do it. Again I quote this medical research report. It states that medical research needs a minimum of $56 million during 1967-68. For 1967-68, government grants total $25 million or less than half the amount prescribed in the report. This is not good enough. I tell you, Mr. Chairman, that there is a crisis in the medical profession. Town after town in Canada is without doctors. I drove through one the other night which the doctor had left just the other day. In the town of Wingham two of the four doctors have pulled out and of the two who remain one is suffering from a heart condition and the other is getting along in years. There is a hospital in that town. Who will serve the public there? Who will do the night calls?
I am not blaming the federal government entirely because this is also a provincial affair but I come back to the point that the federal
[Mr. Rynard.l
government is not pulling its weight in providing the necessary funds so that the provinces can discharge their responsibilities. This is the point I am making. I want to read again from Dr. Thomson's report and put it on the record that we cannot afford to forget research. Canada has a brilliant record. He points out that the American Medical Association has quoted the Economic Council of Canada as the authority for saying that 2,000 graduate physicians and surgeons left Canada in the decade 1953-1963.
[DOT] (4:30 p.m.)
That is over a ten year period and it means 200 physicians per year. At present it costs $50,000 to graduate a doctor. I do not have to belabour the economics of that because the minister should be smarter than I am in this field. Further, many of those who go to the United States are doing research work there.
We in Canada have had a spectacular record in research. It was in Canada that insulin was discovered by Banting and Best. Look at the boon to diabetics that was and money it has brought in on patent rights. We had Collp with the isolation of hormones from the parathyroid, the pituitary and the placenta, the discovery and introduction of anti-coagulants, major surgical achievements in epilepsy, and revascularization of the heart vessels. Look at Montreal, at Vineberg and the work he did. Other Canadian successes have been the use of hypothermia in surgery, cyclopropane in anesthesia, and the identification of the sex chromatin. I could continue with the list.
The Canadian Medical Association reports on the brain drain and hopes that it may be stemmed or even reversed. Dr. Thomson and his associates hope so. Just in case the minister might think I am over zealous I wish to quote an article which appeared in the Oshawa Times on June 5, 1967. It reads:
The shortage of medical men in Ontario is a problem of growing and serious proportions.
And this applies across Canada.
Back in 1964 anxiety over the situation was expressed by the Hall Royal Commission on health services . ..
The four medical schools of Ontario have been graduating 300 doctors every year since the second world war. In the same period the population has almost doubled.
According to Dr. John Evans, dean of the medical faculty at McMaster University, the profession is fighting a "losing battle" in trying to supply new doctors.
I want the minister to pay particular attention to that because he is the one who finally
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put the stamp on medicare which is to come into force on July 1, 1968, no matter what happens. I continue the quotation:
A start has been made. At Queen's, Toronto, Western and Ottawa, medical schools are being expanded. A new medical school at McMaster will open in two years.
But Dr. Evans claims that this is not enough. He suggests that the medical course should be shortened.
I am not an expert on the training of doctors and I am sure the Minister of Finance is not either, but I believe we can shorten the present course to four years by making it a continuous course and dividing it into three semesters. By doing that we would produce as many doctors in four years as it is presently taking us six years.
It now takes a medical student seven years after grade 13 before he can qualify for practice. Another two or three years must pass before he can specialize.
Now comes the point that I want the minister to consider:
If the government underwrote medical education completely, it would not be necessary for students to take four months off in the summer to earn money to continue, the Kingston Whig Standard comments.
In passing I would point out that the Minister of National Revenue comes from Kingston where Queen's University is situated.
Under a new system training could go on all year. Also, as is being shown at Queen's, the course can be safely shortened by eliminating nonessentials. McMaster plans to cut a year off the four years of medical studies by carrying on all year.
It would not be a loss to Canada if the government underwrote medical education completely. The money could be given as loans to students and every nickel would be paid back. Such a scheme would guarantee more doctors and perhaps stop some of the brain drain to the United States.
Another thing I want to point out to the minister is that it is my understanding that at present we have fewer interns in Canadian hospitals than we have had at any time during the last five years. At the same time there is more outpatient care at our hospitals. Outpatient care is increasing at the rate of about 15 per cent per year but the hospitals are understaffed. I ask the minister, what does he propose to do about this? He is the one who put the stamp of approval on the medicare bill which is to come into operation on July 1 next year.
I am not being critical of the minister. I am not being critical of anybody. I am merely
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trying to direct the attention of hon. members to a very serious situation. Every dean of medicine across Canada can testify to the crisis we find ourselves in today, but the government sits here, not providing the funds to do the things that are necessary in order to graduate the doctors that are needed. The situation is so bad that if a person moves to another town and does not know a doctor there or is not recommended to one the only place he can get attention is in the emergency department of a hospital. This is because all doctors are busy and overworked.
I warn the minister that a cracking point comes, and the cracking point in this case comes when governments make a second class profession of the medical profession because of their lack of support. I appeal to the Minister of Finance to provide the funds necessary to allow medical schools to operate during the summer. He should also provide funds for teaching and facilities in the new medical centres which are to be built whenever the provinces find themselves in a position to match dollar for dollar the funds granted by the federal government.


Herbert Wilfred Herridge: Mr. Chairman, I was raised in a somewhat Calvinistic atmosphere in my home. I was always told by my father and mother that I should never buy anything unless I had the cash to pay for it. I have tried to practice that throughout my life. They also told me that if I denied myself in order to save money to buy the things I wanted, I would get more happiness from those things than if I went into debt to get them. So, Mr. Chairman, although I am one of the most progressive members of this group I am somewhat influenced by my home environment when I approach questions of finance.
I have always believed that the people of Canada are entitled to all the programs they are willing to support but that nothing is free. People are entitled to all the programs they want if they are willing to support the taxes required to pay for the programs. The money has to be taken from some one. No government can give anything in the way of services or funds to any group of person without taking it from some other group or person in our society. We have to realize the significance of that.
First, Mr. Chairman, I want to say I appreciate the minister's personal attention to any problems I have brought to his notice. I might say that my constituents also appreciate receiving copies of his letters which show

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that he has replied in person to the problems they brought to my attention and that I later brought to his notice.
[DOT] (4:40 p.m.)
Let me say that I was glad to hear that the competent officials of the Bank of Canada are working to promote international monetary reform. I think this is urgently necessary in the first instance if we are going to have complete national control of our own finances and independence in that direction, and also if we are to accept our global responsibilities to the underdeveloped countries which require our assistance on a logical, long-term and sound basis.
Once again let me bring to the minister's attention that I am one of those who believe that the Bank of Canada can be used to provide the social capital required by federal, provincial and municipal governments and that we should utilize the Bank of Canada for that purpose. I understand there are certain steps being taken in this direction but that nothing very much has been done to date. When I look at our debt charges, which I judge to be over $127 million per year, I think this is more than ever necessary.
I am not going to repeat the things I said the last time I spoke on this subject, but I should like to bring to the minister's attention some interesting correspondence from a certain gentleman writing on behalf of the Social Credit federal election association. Fancy me quoting them. The letter is from the honorary secretary, Mr. George Howland, 361 Vancouver Avenue, Nanaimo, British Columbia. The correspondence reads as follows:
A reduction or cancellation of the 8 per cent of bank deposits gives a golden opportunity to provide for short term interest free loans to he made available.
The bank should not have so valuable a proposal handed to them free of charge, so to speak.
Part of the extra dollars which would come within their grasp should be made, by compulsion, available to those provinces asking for interest free loans, when they can back their requests with satisfactory evidence that they could supply as cover, bonds saleable on a par with other gilt-edged securities.
It is an indisputable fact that Mr. Robert Thompson, leader of the Social Credit party and Mr. T. Douglas, leader of the New Democratic Party are 100 per cent in favour of interest free loans; letters from them are evidence of this. If the Creditistes and either the Liberal or Conservative leaders also favour such loans, now is the time for action.
Today we are having a revision of the Bank Act; to lose this opportunity might mean many years wait for another one.


Mitchell William Sharp: Has the hon. member converted his fellow N.D.P. members?


Herbert Wilfred Herridge: Yes, and I shall read a letter which will show that I am right on the beam. This correspondence was sent to my leader who replied on July 2, 1965. I want to place his letter in reply on the record. It is addressed to Mr. George Howland and states:
Dear Mr. Howland:
Thank you very much for your letter of June 25 and for enclosing the leaflet advocating interest free loans to provincial governments and local government bodies.
This is in keeping with the program of the New Democratic Party. Indeed, I think we must go further and have the federal government make grants for at least 50 per cent of the expenditures for schools, hospitals, etc. in areas which require such assistance.
Thanks again for writing me in this connection and kindest personal regards.
Yours sincerely,
T. C. Douglas.
I hope the minister will not ask any more questions as to whether I am dealing with party policy, because this is the best evidence I could possibly give of my leader's support for the programs I have been urging upon the Bank of Canada from time to time. A great deal could be done in this direction because these loans would be made on our ability to repay, on our resources and industrial structure, as well as on the capacity of the Canadian people to produce. Why should we not use the Bank of Canada to develop our country in the way I suggest?
I was very interested in the remarks of the hon. member for Nanaimo-Cowiehan-The Islands regarding the accumulating Canadian pension fund capital. Surely that could be used in conjunction with action on the part of the Bank of Canada to promote public and private investment in this country. Surely there are plenty of opportunities for this money to be used on a sound and satisfactory basis.
In addition we have the Industrial Development Bank which provides capital for smaller private industries. It has been very useful to several small industries in my own constituency which required assistance at a certain time. As a result of that assistance these industries were established, have become successful and have grown.
I believe there has been a failure in recognizing the great opportunities for the development of the credit union movement in this country as it relates to the mobilization of the savings of the working people. I called the
June 12, 1957

first meeting for this purpose in my constituency when I was in the provincial house and helped organize the credit union in Trail. At the time this credit union was organized there were six or seven people present and it was obvious that many of the workers did not feel the working man could handle his own money properly. It may be of interest to note that at the present time in the constituency of Kootenay West there is over $15 million in the capital of credit unions. They provide loans to working people in respect of consumer goods as well as an opportunity for investment. These credit unions are now supplying money to road contractors and people of that sort, and did so particularly at a time when they were unable to obtain money from the banks. The federal and provincial governments could do a lot more to promote and stimulate this movement.
What we need at this time is a national credit union act. This is particularly true because these credit unions are operating as a result of the participation of those Canadians concerned. This provides a tremendous opportunity for the mobilization of a very large amount of capital which can be used for consumer loans, investment and in the development of small local industries in the areas where the credit unions are organized. When the minister replies I hope he will indicate the government's intention in respect of a national credit union act. Let me emphasize the fact that there is tremendous opportunity in this field and tremendous enthusiasm on the part of those groups who utilize these credit unions and support them.
I should also like to ask the minister what progress has been made in the study of charitable donations. Chambers of commerce, farmers organizations and other groups have throughout the years made certain representations in connection with exemptions for donations to charitable organizations. I am in favour of providing an exemption if the donations are actually made to charitable organizations and not to organizations masquerading as such.
[DOT] (4:50 p.m.)
When the minister replies I hope he will have something to say in this regard, and I hope he will give some further consideration to those individuals who are holders of perpetual bonds. I have received quite a lot of correspondence about this matter, as I am sure other members have, and I have always felt that these people were not being treated fairly in respect of the small amounts they
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hold. I think consideration could be given to their circumstances, especially where they bought these bonds having in mind that they would be something to fall back on when they reached retirement age. The persons I hear from generally are those who have a number of these bonds and who expected the interest would be available and would be useful at a time when they were no longer working. I do urge further consideration of this problem.
I had several other questions to bring to the attention of the minister. I have written him about these matters and he has replied promptly and in detail. I think consideration should be given to the sort of overlapping between federal and provincial responsibility in connection with certain financial questions, acceptance corporations and things of that sort. It is a very foggy area at the present time and should be more clearly defined.
That is all I have to say at this moment. I certainly look forward to hearing what the minister intends to do about the several matters I have brought to his attention. Before I sit down may I say I can almost feel that I have made him a convert to my philosophy with respect to the issuing of loans by the Bank of Canada to all governments that require them for investment in social capital.


John George Diefenbaker: Mr. Chairman, I ought to say a few words about the estimates of the Department of Finance. I regret that the former minister of finance, now President of the Privy Council, is not here to give the house the benefit of his philosophy, which for some reason seems not to be accepted by the present minister and others of the cabinet. But the Minister of Finance's loss is NATO's gain.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Totally unacquainted with international affairs, the President of the Privy Council left Canada a couple of days ago to accompany the Secretary of State for External Affairs to deal with problems of NATO. This is a matter of very considerable importance when one considers the expenditures in respect of foreign affairs. Whether there is any significance in the fact that he is now abroad, having expressed the view that NATO should be abolished, will be an interesting study during the days ahead.
Why did the former minister of finance depart this country at a time when his views would have been so helpful, namely, when the estimates of the Minister of Finance are before the committee? The President of the Privy Council has gone abroad to deal with

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international affairs, a subject he has shown no capacity to understand up to the present time. Is it a fact that having joined the entourage for NATO is the first indication by the government that his views are now being accepted and that NATO, at a time when it should be strengthened, faces the danger of being weakened if the philosophy of the former minister of finance is accepted? These things occur to those who endeavour to look at what is called in certain circles the spectrum created by a government that goes every direction on every subject and is always able to say that some minister has taken a position contrary to that followed by the others.
In this centennial year the Minister of Finance has much to boast about. It begins to look as though he will be the Minister of Finance with the greatest deficit in Canada's peacetime history. It looks as though we will have a billion dollar deficit unless there is an assiduous application of paring down. Up to the present time this government has shown no sign of believing in the necessity of that. The Minister of Finance is able to boast in centennial year that he has introduced the heaviest taxation in Canada's history. During his period of office he has increased taxation in several fields to the extent of hundreds of millions of dollars. He is able to boast in centennial year that under his administration the highest cost of living in all history has been attained.
These things are deserving of mention, particularly when it is realized that the minister belongs to that group that had all the answers to all the problems in 1963. At that time, when Canada was spending something over $6 billion, it was a frightful situation for this nation. This year it will be at least $400 million more.


An hon. Member:: Four billion dollars more.


John George Diefenbaker: Yes, $4 billion more. After all, as Mr. Howe said, "What's a million, anyhow?" The only difference between Mr. Howe and this government is that they have substituted "billion" for "million".
I do not wish to deal with the budget directly at this time, but I am sure, Mr. Chairman, you will allow me to say that while everybody commends the removal of the tax on drugs it is particularly appropriate, having regard to the things I mentioned a moment ago-the prospective billion dollar deficit, the highest taxes in Canadian history and the highest cost of living in Canadian history-that aspirin will now be cheaper.

This will no doubt assist Canadians as a whole to suffer less pain. Again I say I do not want to deal with the budget because it will be dealt with later. In fact there was no budget; therefore there can be no infraction of the rules in simply referring to that document.
I wish to deal with the fiscal payments to the provinces. There, too, the great men who now sit opposite had all the answers. They would bring about a fiscal system that would help the provinces, and deny any possibility of injustice or unfairness. On page 149 of the present estimates the statutory payments to the provinces are listed in accordance with the recent fiscal arrangements. During our period of office we would not have had a deficit in any year, I think, had it not been for the increased payments that we made to the provinces in order to assist them to discharge their jurisdictional authority and responsibility.


Some hon. Members:: Hear, hear.
# (5:00 p.m.)


John George Diefenbaker: In 1958 we entered into new agreements. We did not have to enter into new agreements; the agreements still had four years to run. We entered into new agreements because we realized that the provinces could not carry out the responsibilities set out in the British North America Act. We helped them. We gave new hope to the Atlantic provinces. We made it easier for the people of the maritimes to walk as Canadians, upright and without fear. The hon. member for Vic-toria-Carleton, who at that time was premier of New Brunswick, knows it well. Now what has happened? The government has been tinkering with this problem, failing to face up to it.
The figures relating to the distribution of increases in 1967-68 over the previous year give an indication that there is something radically wrong with the fiscal policies, of this government. In 1967-68 Newfoundland is to receive $71 million compared with $47 million in the previous year. Prince Edward Island receives $14.2 million compared with $10.4 million. Nova Scotia receives $79.3 million compared with $50.8 million. New Brunswick receives $70.6 million compared with $46.4 million. Even with these increases the provinces cannot carry out their responsibilities.
Quebec receives $280.5 million compared with $158.7 million in the previous year. Ontario will receive in 1967-68 $18.8 million and in the previous year it received $17.1
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million. I will leave it to the Ontario members to devote themselves to the study of the figures that I place before the committee.
I come to western Canada. Manitoba receives $34.2 million compared with $30.7 million. Saskatchewan was forgotten. It is to receive this year $28.9 million compared with $35.4 million, a substantial reduction of some $6.5 million. Alberta will receive the same sum as it did the previous year. Why has there been such a reduction in the sum given to Saskatchewan? What is the variety of abstruse mathematical calculation performed in the recesses of the Department of Finance? Why was this done. All the mathematical formulae that can be produced, all the juggling that the minister can do, cannot explain the unfairness to the province of Saskatchewan. I would be the last to suggest that there were any political connotations or that the province is being penalized to any extent because of the last federal election. But why is there such a situation? Am I unfair in this criticism?
Anyone who thinks so should hear what the premier of Saskatchewan has to say. He knows this government. He is fully acquainted with the Minister of Finance, and his views are of a nature that I would not want to repeat them in the House of Commons lest the government blush with shame. Somewhere in this equation there is an X factor. Is the X factor related to the voting record? These are questions that naturally arise. The minister cannot say that the province wanted it this way because he will recall his hurried trip to Toronto to meet the premier of Saskatchewan. That was not a get-together for social purposes. What explanation did the minister advance to the premier of Saskatchewan for having knocked down the $35 million to approximately $29 million? These are things which we would like to hear about from the minister.
The situation today in dominion-provincial fiscal relations is far removed from the concept that the Fathers of Confederation had in mind and also far removed from the principles that activated the Mackenzie King and St. Laurent administrators in their day. No glib response can answer the charge that this government has failed the provinces. There is no question about it. It is because it has failed the provinces that it refuses to convene a dominion-provincial conference on the subject of confederation. We have asked for it. The Canadian people are in a mood to bring about the necessary agreements on the constitution 27053-91
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in keeping with the experience of 100 years, agreements which will assure the provinces that they will be able to carry out their responsibilities.
We were told for about a year and a half the government could not act. The minister said he could not do anything because the Carter commission had not reported. When the Carter commission did report the alibi was that they had to examine the recommendations very carefully. That is true and I can understand it. Now consideration is to be postponed again. There is to be another meeting as mentioned today by the Prime Minister. It is just simple eyewash on the part of the government to pretend that it intends to do something about the Carter recommendations while at the same time it does everything it can to postpone and procrastinate in anticipation hopefully of not having to do anything. What is going to be done? This cannot go on. Confederation cannot live with the day to day and year to year handouts which this government perpetuates.
There will have to be acceptance of the principle that in certain fields the provinces have rights of taxation, otherwise we will build up within this nation concepts far removed from the determination of the Fathers of Confederation. I might deal with this later after the minister gives an answer to the questions that have been asked.
I come to a matter of interest not only to Canada but to western Canada in particular. What has happened to the Bank of Western Canada? It was not very long ago that Sinclair Stevens and his group, B.I.F. and all the subsidiaries which he had gathered together, were going to operate the bank. This was the new wizard of finance with all the ideas. Trust companies were absorbed and included in B.I.F. He decided he should go into the banking field. One can understand why he thought action was necessary. I should have paid a further tribute to the minister. He is the minister who, in this confederation year, has produced the highest interest rates. Everybody is being mulcted under this government. We have the highest taxes, highest interest rates and highest cost of living.
[DOT] (5:10 p.m.)


Mitchell William Sharp: The highest standard of living and the highest employment.


John George Diefenbaker: I heard the highest employment. Don't you think you ought to-


Mitchell William Sharp: You don't want to hear about it.

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John George Diefenbaker: No, I am not waved aside when he waves his imperial hand as easily as the flunkies under the minister.


Mitchell William Sharp: Just as you are doing.


John George Diefenbaker: I say to him, when he speaks about unemployment, will he tell us why the number of unemployed in Canada is approaching, if correctly computed, half a million?


Hédard-J. Robichaud: Half of what it was in 1960.


John George Diefenbaker: Here is the fishmonger general, the man who cannot look after the skinning of seals. If you want a man who knows and understands skinning, then I say to the Minister of Finance, get the Minister of Fisheries. He is an authority on that subject. I am glad he interrupted. Any further interruptions from him will be welcome.


Hédard-J. Robichaud: I am glad to help.


John George Diefenbaker: The minister should not get annoyed.


Mitchell William Sharp: I am not annoyed.


John George Diefenbaker: I have a great regard for the minister when I see him on television. I say, there but for the grace of God-I listen to him because there is something deeply attractive about him. He and I are not blessed with physical beauty but he has an attractive manner. He should not get annoyed now. If I thought he was going to get annoyed, Mr. Chairman, such is my regard for him I would not continue. The question of unemployment is a touchy one for him. He is aware that the Canada-United States automobile agreement is now being revealed as unjust to Canadian workers in so many types of manufacture. I was dragged into that because of the interruption, so I return now to the Bank of Western Canada. If the Minister of Fisheries has anything more to say, I welcome it because it will not be long before he goes to the other place whence no one returns.


Hédard-J. Robichaud: Will the right hon. gentleman permit a question? Will the right hon. gentleman, before talking about seals, check the position of his own members on this matter?


John George Diefenbaker: I did not know they wanted to be skinned. All I have to say to the minister is that it is fortunate he is about to go to the other place because something will have to be done. He has stubbornly refused to

accept the recommendations of such bodies as the council of the city of Windsor.


Hédard-J. Robichaud: Oh.


John George Diefenbaker: Don't laugh at the city of Windsor. It is fortunate the Secretary of State for External Affairs is not here. Don't ridicule the city of Windsor or there will be further division within the government.
What about the internal struggle that is going on in the Bank of Western Canada? Is the government not aware of the potential damage to investors in the Bank of Western Canada? Will the minister say what the present position is? A licence was given. Can a bank receive a licence on the authority of parliament and fail to be set up as a chartered bank
What has happened in connection with the Bank of Western Canada represents an elegy of indifference to the interests of western Canada. What is the minister going to do about this? Will he place before the house and the country the position he is taking? What is he doing to bring reason among the warring factions? The Bank of Western Canada was set up particularly to assure that the western provinces would have a chartered bank. Difficulties arose. It was found that the controlling group was mainly from elsewhere, at least, that was the allegation. Today the question is being asked, what is the present position? This is something that comes right under the minister's department. He has these things at his fingers' ends. He will be able to answer without difficulty.
Is the Bank of Western Canada, which parliament set up after a two-year fight in the other place, to be permitted to die or to be in a state of suspended animation because of internecine strife? The people of western Canada expected the bank to be set up at the earliest possible date. I think it was expected to open in April or May. There is no indication now of any action.
I ask the minister to clarify the two matters to which I have referred. Later, if the opportunity arises and the minister is still in the good humour he is exhibiting at the moment, I will have a number of other matters to raise.


Mr. Haidasz:: Mr. Chairman, my interest in taking part in the study of the estimates of the Department of Finance this afternoon arises both as a doctor and also as the member for Parkdale. I wish to express my appreciation to the minister for having taken steps, as outlined in his budget, to reduce the
June 12, 19S7



cost of drugs and for announcing the date on which the federal sales tax on drugs will be eliminated. In my personal experience I have had patients who could pay for the diagnostic services but had to forgo treatment by drugs or medication because of their high cost. I am happy to tell the minister that patients who have been in that predicament will find it easier to purchase the drugs they need to treat their ills.
The second reason for taking part in this debate on the estimates of the Department of Finance is to express my appreciation for all this government has done to assist municipalities in relieving the local unemployment problem and providing more public services. However, I should like to emphasize again the necessity for increasing financial aid to our municipalities. I have at hand a letter I received from the mayor of the city of Toronto requesting the Minister of Finance to take into consideration a resolution that was passed at the national conference of the Association of Mayors and Reeves in Niagara Falls on May 16. This resolution urges the government of Canada to enact legislation to exempt from income tax the interest payable on bonds issued for purposes of providing public housing. Such legislation would reduce income tax revenues but municipalities would gain through reduced interest charges. Similar legislation, Mr. Chairman, was enacted under the Kennedy administration in the United States. I hope it will be possible to have such legislation introduced in our parliament.
[DOT] (5:20 p.m.)
I should also like to bring once more to the minister's attention the plight of the home owner, especially in the city of Toronto. In the past 12 years the residential taxes of home owners in Toronto have doubled. Today taxes are at an intolerable level. I hope it is possible for the Minister of Finance to study the feasibility of exempting residential taxes from federal personal income tax levy.
The third point I wish to make is to bring to the attention of the minister the plight of those Canadian citizens who are still awaiting the settlement of their claims against certain governments of Europe. These are claims that were submitted many years ago but are not yet settled. These people, who are all Canadian citizens, have had property nationalized or confiscated by governments in Europe and they believe that today these governments are in a position to make a settlement of their claims. I would ask the Minister 27053-9H
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of Finance to make a statement this afternoon or at some other time on the progress of the negotiations in respect of such claims.


Mr.   Mc@: Mr. Chairman, I have a very simple request to make of the minister and perhaps he could reply to it when he replies to the other requests that have been made. I want to raise a problem in connection with the working mother who is a widow, has children and perforce has to engage a babysitter to look after her children while she earns their keep. I think that this problem is fairly common in different parts of Canada, and it is one I should like to see tackeld by the Department of Finance through the budgetary laws of the country to the end that such people may be given some relief. For a few hours of the day they are required to hire a babysitter for their children, and part of what they earn is spent on this purpose.
When a man suffers bereavement through the loss of his wife certain provisions in the income tax law give him relief. However, this problem has been drawn to my attention by various widows in the Halifax area. I realize that the widows in the rest of Canada belong to the hon. member for Kootenay West but there are a number who are pleased to present their problems to me. I believe that the problem is a substantial one with which parliament should come to grips. Such expenditure is surely a legitimate expense that should be deductible from gross income. Parents do have obligations to look after their children and payments of this sort in effect reduce a widow's earnings. I hope my short plea will commend itself to the minister and his department and that something can be done for these people.


Harold Edward Winch: Mr. Chairman, may I open my remarks by saying that I am perhaps one of the few members of the House of Commons who would be quick to tell the Minister of Finance that he is not an expert on financial matters. I assure the minister that when I study company and bank balances, credits and debits, appreciation and depreciation, income tax, corporation tax payments and reserves for same, quite honestly I become completely confused. I am one-I think there are many more like me in this house-who, when I receive my cheque at the end of the month and deposit it in the bank, pay my bills and anxiously look forward to my next month's cheque hoping that what I have left will last

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till that time. Therefore in making my remarks this evening I am not speaking as an expert on finances in any way.
There is one phase of financial investment about which I hope the minister will give an explanation to a great many people in the country. I refer to those in the aged group who have only a little money, those typically who have $1,000, $3,000, $5,000 or perhaps $10,000. Thousands of people in Canada who have but little money and do not want to lose it honestly believe that the finest guaranteed investment they can make is in federal government bonds. This is almost axiomatic in the thinking of people with small savings, with only so many years ahead of them, who want to know that they are going to be paid interest on their investment and, in particular, will never lose their capital. In addition, Mr. Chairman, there are certain types of trust, such as education trusts, which by law can invest only in government bonds or, on occasion, in first mortgages.
What has been the experience of these people to whom I refer? Over the months I have received letter after letter from people who have invested their money to provide for themselves in their declining years. However, sometimes an emergency arises and they have to sell their investments. What happens to those who invest in government bonds? They find themselves in a paradoxical situation financially that I confess I do not understand. They sell their government bonds sometimes at heavy loss on their capital investment. I understand the reason for this is the money market, and that when you invest money you do so on the understanding that you hold your security until maturity date. I once had an experience, not a personal one, with an education trust where money was suddenly required and I believe the trust lost about $8 of its capital investment on each $100 bond purchased.
[DOT] (5:30 p.m.)
The only point I am trying to make is that there are thousands of people who trust the federal government and who are not familiar with the complexities and intricacies of finance and the effect of the money market on government bonds. As I say, these people trust the federal government and trust investment in federal bonds. I have recently been advised that such people cannot sell their bonds without suffering a capital loss. It is true that they can borrow money from the bank on the security of their government

bonds but then they suffer a loss because of the interest they have to pay. The loss through interest payments is not as great perhaps as the loss they would suffer by the sale of their capital investments.
Perhaps my presentation is needlessly complex, but this question concerns thousands of Canadians. They have put their trust in the federal government and in federal bonds. Can the minister say what action people ought to take when they wish to reclaim some of their money? What are they to do if they are not to lose part of their capital and retain their trust in government bonds? The government has needed money and has entered the world financial market. The people of our country have invested in government bonds but when they are in dire need of money and wish to sell their bonds they lose on their capital investment.
I hope that the minister understands the point I am trying to raise because I do not know how else to put it. I have received many letters asking that the problem I have referred to be corrected. Those buying government bonds are real Canadians who by thrift have saved their money and have invested it in Canada. They are people who, when they are in dire need, find that the Canadian government lets them down and allows them to lose money on the capital they have invested in Canada.


Mr. Monteiih:: I shall be brief, Mr. Chairman, and I wish to ask the minister a question. Though the hon. member for Vancouver East suggested that he was not an expert on finance he expressed himself very well on behalf of those Canadian citizens who have been holding government bonds which have deteriorated in value. I am interested in the minister's reply to the hon. member for Edmonton West's question concerning the reserve unit. The governor of the Bank of Canada in his annual report dealt with this matter, which has some urgency. I am also interested in the minister's reply'to the question asked by the hon. member for Parkdale, which had to do with the situation of Canadians with claims against various European governments.
I now wish to ask one or two questions. I am interested in how many refunding issues the minister contemplates for this year and how many new issues he contemplates to meet the projected deficit. Could he outline his intentions in this respect? The other question I wish to raise stems from a letter I
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received today and it concerns a suggested reduction in tariffs on church vestments, prayer shawls and the like. A clergyman who moved to Canada and who brought some vestments was told by a customs official that there had been a reduction in the customs tariff on such vestments in the most recent budget but there was uncertainty whether the reduction would take effect immediately. The clergyman is waiting before claiming his articles because he wants to see what is to happen with regard to the duty that is applicable on them. Those are the only questions I wish to ask at the moment.


Mrs. Maclnnis (Vancouver-Kingsway):: Mr. Chairman, I want to add to what has already been said about making it possible for women working outside the home to deduct the expenses of babysitters or housekeepers from their income tax returns. They should be able to make a deduction for those expenses in the same way as businessmen deduct for business expenses. It is necessary that this be done.
Great numbers of women working outside the home are the sole support of their families and if their families are not to be neglected they must have housekeeping or babysitting services during working hours. There is no provision in any thoroughgoing way for housewives to deduct these expenses at the present time. We also find that in many families the husband is a widower and has to work and provide housekeeping services for his family. It is important that children should not be allowed to run at large or be without proper housekeeping services. Such expenses also ought to be deductible.
Many women who work outside the home cannot possibly afford from their wages or salaries the expenses of babysitters. In certain countries such as the United States and the United Kingdom the tax position for married women is quite favourable. Here I am thinking about the way married women are permitted to make deductions for their expenses from income tax. For example, in the United States a working wife can deduct up to $900 for child care expenses when there are two or more children, or $600 for one child. The stipulations are that the child be not more than 12 years old and that the joint income of the parents not exceed $6,000.
In the United Kingdom preference is given to working married women. They get a single person's tax free allowance for earnings, in addition to the husband benefiting from the married man's allowance which is nearly double the single person's.
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The tax structures in a few countries, on the other hand, appear to be intended to discourage the wives of all but the neediest of husbands from employment. In the Netherlands, for example, a married woman's earnings are taxed 15 per cent if she is not the breadwinner.
My remarks at this time are directed particularly to the plight of the nursing profession. It is essential that married women who are nursing be able to deduct the expenses of housekeeping services. For married nurses, who represent 60 per cent of all nurses employed full time, the present tax policies must be frustrating, costly, and discouraging. That these nurses continue to work in spite of them is proof of their desire to remain active in the profession.
[DOT] (5:40 p.m.)
For the 19,781 married nurses listed as "not employed in nursing" in 1965 the present income tax policies undoubtedly discourage reemployment. The return of even a portion of these women to active nursing would do much to lessen the effect of the shortage of nurses throughout this country. This is only one example of what could be achieved by permitting women to deduct the expenses of housekeeping and babysitting for income tax purposes. We are complaining because we lack sufficient numbers of medical personnel. Some people say we cannot launch the medicare plan because we do not have sufficient numbers of trained personnel. I can tell the minister that a great many nurses would be available right now if they were able to deduct for income tax purposes the expense of hiring a proper housekeeper. At present they cannot do so because of the expense which would be involved.
I should like the Minister of Finance to tell us why this should not be a legitimate busi-siness expense in the case of women working outside the home. Today 30 per cent of the labour force is made up of women. Why should they not have the same rights as men so far as deductions for income tax purposes on account of expenses are concerned? Certainly, a deduction in respect of housekeeping and babysitting expenses is one which might legitimately be claimed. The most effective way of enabling trained women to undertake important work is to allow them to deduct for income tax purposes the amounts paid in respect of housekeeping services.
I should like to hear whether the minister's ideas have changed in this regard. I would point out that more and more women are bringing pressure on us to recognize the case

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for allowing expenses of this sort. Such a concession is only logical if these services are to be given without unnecessary anxiety as to the well-being of the families concerned.


Gordon Harvey Aiken: Mr. Chairman, I wish to take this opportunity to make some comments on the general direction in which events in this country are moving. I do so on the basis of reports on Friday last showing a worsening in our balance of trade.
We have been saying for a long time that the government is permitting the cost of living to increase dramatically. I have the figures and I will produce them in a moment. Taxation in Canada has been increasing. The cost of government administration has been increasing in alarming fashion. The number of persons in the government service has increased dramatically-something like 12,000 within the past year. Government overhead expenses, the non-productive part of government, have been increasing faster than the productive portion of this country's economy.
All of us have been asking for months: Where is this leading and where will it end? I think we are beginning to see where it is leading. We have seen in the most recent return from the Dominion Bureau of Statistics evidence of a worsening of our trade position. During the months of April, 1966, imports amounted to $774 million. In the same months in 1967 imports amounted to $973 million, an increase of 25 per cent. It should also be said that there has been an increase in exports and for this, of course, we have to give credit where credit is due. But the increase in exports has not been sufficient to balance the increase in imports since a year ago when there was a small favourable balance amounting to slightly over $1 million. There is today an adverse balance amounting to over $73 million or, in terms of percentage, a 6,000 per cent increase. The result of the use of percentages gives an unreal figure but in fact that is what it amounts to. It is an indication that Canada is losing the fight to provide for its own people by means of its own productive capacity.
At the same time, employment is not increasing as it should and unemployment is increasing. It is not my purpose to stand here, as hon. members on the other side did for two or three years, beating away at the question of unemployment. They knew then, as they know now, that to a degree the unemployment figure is a false one. In many cases it does not mean hardship. Indeed, it is relatively meaningless in some respects because it is
[Mrs. Maclnnis (Vancouver-Kingsway) .1
calculated on the basis of the numbers looking for work. It is not related to destitution.
Nevertheless, we in Canada are increasing the cost of producing goods in this country to the point where we are not competitive with countries abroad. For some time we have been saying this would happen. Now it has happened, as the figures on external trade clearly show. If we were to take the figure for September last and compare it with a month earlier this year, the minister might say: There is a seasonal drop in April so you cannot compare the two months. But the hon. gentleman cannot say this drop is seasonal because I have been comparing identical months. It cannot be claimed that this is an odd or unusual situation because the import balance position has gradually been worsening as far as Canada is concerned. I am very worried in case we are gradually drifting toward the imperceptible point of no return at which we can import goods into Canada more cheaply than we can produce them. When that point comes, we buy more goods from countries abroad and sell less beyond our own borders.
[DOT] (5:50 p.m.)
I wonder whether the auto trade agreement has something to do with the situation. The minister may say it is temporary and that in the long run the auto trade agreement may work out to our benefit. But there are a lot of things the government has done about which it has said, "Well, in the long run, this is going to be better." We have to look at the figures which are given to us in this context.
According to the latest dominion bureau of statistics figures which were issued on Friday last, in 1966 we imported $72 million worth of motor vehicle parts. This year we have imported $98 million worth of parts, an increase of roughly $26 million. In 1966 we imported $24 million worth of what are referred to as new closed sedans. This year we have imported $63 million worth, an increase of roughly $40 million. Imports of trucks, tractors and chassis have risen this year to $8J million from $5i million in 1966. If this is the benefit we are getting from the auto trade pact, to me it does not seem to be much of a benefit. I could use other examples but I am not going to go into the details at this time.
These are not items for which the Minister of Finance is necessarily and primarily responsible. They are covered by government policy. But we are permitted to beat him over the head with them when discussing his estimates because it is his responsibility to see
June 12, 1967

that the budget is kept in accordance with the Canadian economy and to see that the economy of the country is kept viable through what the Department of Finance does. I never like being a prophet of doom. I hope the figures are all wrong. I hope we are making great progress, but I cannot see it in anything emanating from the dominion bureau of statistics.
Granted we sometimes take too much comfort or discomfort out of d.b.s. figures because from time to time they may not reflect the true picture. If we want to we can always make a case using d.b.s. figures, but the cost of living figures are very telling. In February, 1963, the year that the government took office, the cost of living index stood at 132.3. From 1957 until 1963 it increased by just over 11 points from 121.9 to 132.3. By 1964 it had increased to 134.5 and by February, 1967 it had risen to 146.1 an increase of 12 points within a few years. The figure for May of this year is 148.1, two full points above the February figure.
We know the reasons for the increase. It is partly due to free spending without real thought given to the productive value thereof. It is partly due to carelessness and neglect. We can blame programs and policies if we like, but with the government permitting the cost of living to increase so dramatically we are losing our ability to compete in world markets, and that ability is one of the fundamental bases of our economy. We are drifting, and I have seen no evidence from the minister's statements that the government is going to halt the drift and say, "Look, we are now at the critical point."
One of these days we are going to lose our markets. We are already starting to lose them. We are importing too many things. We have a great economy and we could maintain it by greater production. We rely on trade but there is something wrong with the current trend. It is going the wrong way and I take this opportunity to protest as strongly as I can. Our balance of trade figures are starting to show a bad trend. We are starting to lose the battle. When the saturation point is reached we will be in great difficulty.
I wish to conclude by referring to another subject. I have been very critical during the past year of the Industrial Development Bank for its lending policy, but in the last few months I have noticed that the officials are making a greater effort and I want to acknowledge that effort. I have noticed that more loans are being made to companies that
Canadian Wheat Board need help to become productive. I have noticed an increase in the amount of loans made to service the tourist industry, in which I am particularly interested. This trend should be encouraged to continue. Maybe my prodding had something to do with it. I hope the trend will continue because the bank's job is to increase production in Canada. By helping business become more productive we can somewhat reduce our adverse trade balance.


Jean-Eudes Dubé: It being six o'clock it is my duty to leave the chair in order that the house may proceed to the consideration of private members' business.


PROCEEDINGS ON ADJOURNMENT MOTION
The Acting Speaker (Mr. Dube):: 

CANADIAN WHEAT BOARD


Mr. Reynold Rapp (Humboldt-Melfort-Tis-dale) moved:: That, in the opinion of this House, in order to remove any misunderstanding among foreign purchasers of Canadian grains to the effect that wheat only is handled by the Canadian Wheat Board, the government should consider the advisability of introducing legislation for the purpose of renaming the said board the "Canada Grain Board" and thereby indicate that other products such as oats, barley, flaxseed, rapeseed and rye are also handled by this board.
He said: Mr. Speaker, I introduce this motion somewhat reluctantly because the Canadian Wheat Board since 1935 when it came into being to handle Canadian grain because of very serious problems in respect of

June 12, 1967
Canadian Wheat Board price, has built up a very good reputation. At the time it came into being the farmers were not in a position to hold their wheat and sell when the price was high. Very often they had to sell at a lower price because of the need for money. At that time the Canadian Wheat Board handled only Canadian wheat but in 1949 oats and barley were also brought under the jurisdiction of the board.
This year I was a member of the delegation that flew to Russia on the inaugural flight of service between Canada and Russia by Aeroflot and Air Canada. We spent a few days in Russia, and as a result of being able to speak their language I found that many people there thought that the Canadian Wheat Board handled only wheat. They were not aware of the fact that in 1949 this board was given the authority to handle oats and barley as well as wheat.
There is a strong feeling in the three western prairie provinces that rapeseed and flaxseed should also be placed under the jurisdiction of the Canadian Wheat Board. It is my feeling that by changing the name to the Canada grain board we will indicate to people in foreign countries that this board handles not only wheat but all the other grains grown in this country. It may well be that this board will be given the authority before very long to handle other grains, and if the wrong impression which exists in foreign countries is allowed to continue we may lose many markets for these other grains. We now have markets in China, in Japan and in a number of European countries. I might say that Japan is our best customer for rapeseed.
As I said earlier, Mr. Speaker, I brought forward this motion with some hesitation because of the fact that the Canadian Wheat Board has built up a good reputation and has helped the farmers of Canada save a great deal of money by finding markets for their products at stabilized prices. The time has come when the name should be changed. World demand for our grain is growing and if foreign countries have the impression that the Canadian Wheat Board handles only wheat we may lose a number of valuable customers.
I have discussed this matter with some members of the wheat board who feel a little bit reluctant about a name change because of its good reputation. Our customers know that if they buy a certain grade, whether it be No. 1, 2 or 3, through the Canadian Wheat Board they will receive that grade. On the other hand, if the name is not changed to make it

readily apparent to prospective customers that the board handles other grains as well our Canadian grain growers may lose these potential markets.
At the present time China and other countries buy mainly wheat from Canada but the time is coming when more rapeseed and other grains will be grown in Canada and markets will have to be found. For this reason I think all grains grown in the west should be brought under the same agency. I hope this motion will not be talked out and that consideration will be given to changing the name from the Canadian Wheat Board to the Canada grain board.


Mr. Russell C. Honey (Durham):: Mr. Speaker, I should like to take a little time to discuss my hon. friend's notice of motion, and let me indicate at the outset that I am sure there is no desire on the part of any hon. member to do other than offer constructive criticism of the recommendation contained in this notice of motion. I want to confine my remarks to an analysis of the terms of the notice of motion and, for whatever help it may be, to indicate to hon. members the serious doubts I have as to whether it would be in the interest of the western Canadian producers of grain and the country generally to accept this motion at this time.
[DOT] (6:10 p.m.)
I should like to direct my remarks to two aspects of the notice of motion. Perhaps I may do so, Mr. Speaker, by referring to its terms. I think the hon. member who is sponsoring the motion is trying to do two things. First, he states in his notice of motion:
That, in the opinion of this house-
I think this is the hon. member's first point.
-in order to remove any misunderstanding among foreign purchasers of Canadian grains to the effect that wheat only is handled by the Canadian Wheat Board-
I hope I am being fair to my hon. friend when I suggest this is the primary reason for the suggested change.
-the government should consider the advisability of introducing legislation for the purpose of renaming the said board the "Canada Grain Board" and thereby indicate that other products such as oats, barley, flaxseed, rapeseed and rye are also handled by this board.
It would seem to me that the second objective of the notice of motion of my hon. friend is to bring about indirectly something that probably would not pass constitutional scrutiny if the house were to deal with it in this manner. Dealing with the argument of the
June 12, 1967

hon. member that the change of name should be made to make clear that the Canadian Wheat Board is not merely a wheat marketing agency, I think it would be wise to remind hon. members at this point that the Canadian Wheat Board is at this time a marketing agency in international and interprovincial trade in wheat, oats and barley.
I listened carefully to the argument of the sponsor of the notice of motion. I listened for evidence in support of the hon. member's argument. It was a good argument. However, I should like to have seen it supported by, for example, a resolution of the Canadian Federation of Agriculture, the National Farmers Union, or resolutions of other agricultural groups. I think this would have given the sponsor a much stronger argument to present to members of this house.
As I understood the argument of the hon. member it was based to a great extent on his own opinion. I respect the hon. member's opinion but would point out that it is the opinion of only one member of this house and it is unsupported by the sort of evidence that would have made it a much more compelling argument. It would have been a much more compelling argument if the hon. member could have backed it up with evidence such as I have indicated which might have been forthcoming from agricultural and producer groups.
I wish to make my first argument a positive one and say that I have great concern, and I think other members of this house have similar concern, about whether the change suggested in the notice of motion would create a great deal of confusion in the minds of the customers with whom the Canadian Wheat Board deals. I believe it would have this effect. My hon. friend who sponsored the notice of motion has indicated that such a change would be helpful in eliminating confusion but, with respect, Mr. Speaker, he did not give us any evidence to indicate that such confusion does in fact exist. I believe, therefore, that we would only be creating more confusion in making the change suggested.
I have a personal interest and a little knowledge in this matter because of some years spent in close association with the farming industry of Saskatchewan. I am very anxious to agree with my hon. friend about the reputation the Canadian Wheat Board has earned not only among the grain producers of western Canada but among the customers with whom the wheat board deals.
Canadian Wheat Board
I well recall, as does my hon. friend, the days before the Canadian Wheat Board was set up in western Canada. In those days there was in the marketing of wheat and other grains a great deal of confusion. It was not a form of marketing that was in the best interests of the producers. I join the hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp) and agree that the Canadian Wheat Board has done a good job in this respect. I suggest to hon. members that we would not want to detract from the good job the board has done. In particular we would not want to detract from the relationship of the Canadian Wheat Board with our international customers by changing the name of the board unless there was a good, concrete and compelling argument put forward for our so doing.
In this respect perhaps we should rely on the old saying that there is nothing that succeeds like success. I think hon. members will agree that the fact is that this is the record of the Canadian Wheat Board since its inception in 1935. In the marketing year 1965-66 the board visited 30 countries, some of them several times, in order to maintain the close contact it has with millers, grain traders and government officials in those markets. The hon. member did not suggest that there is confusion in the minds of the officials of approximately 100 countries of the world as to the functions of the board and what products it handles.
The second theme that I suggested is inherent in this notice of motion is one for which my hon. friend is well and properly noted and regarded in the house and throughout the country, at least throughout western Canada. I refer to the hon. member's record of championing the inclusion of other grains, particularly rapeseed, in the list of grains handled by the Canadian Wheat Board. I think the second objective of my friend is to introduce into the list of grains handled by the board flaxseed, rapeseed and rye because these are not not handled by the board in international and interprovincial trade. If we were to adopt the notice of motion it might be a basis for an argument that we were trying to accomplish in an indirect fashion something that the house has felt it advisable not to accomplish in a direct fashion when it has considered the matter. In my opinion the inclusion of flax, rye and rapeseed within the group of grains handled by the wheat board in international markets should be effected by an amendment to the Canadian Wheat Board Act. I think we should not try to make

June 12, 1967
Canadian Wheat Board changes of such magnitude through an indirect method.
[DOT] (6:20 p.m.)
As you know, Mr. Speaker, and as other hon. members know, the question of including other grains in the list that the Canadian Wheat Board is entitled to handle in export and interprovincial markets was considered by the house very recently during its examination of amendments to the Canadian Wheat Board Act. It would seem to me, and I make this suggestion to my friend, that if such a change were to be made it was at that time that it should have been made. In view of the fact it was not made at that time, it seems to me the house would not want to give any suggestion, indirect as it may be, of support for such a change at this time.
I do not make these suggestions in a negative sense, nor do I make them in a political sense. I think all members of the house recognize the sincerity with which the notice of motion has been advanced and the weight of argument, although I have been critical of it in some aspects, with which it has been put forth by the sponsor of the bill. However, I suggest that we should be very cautions in adopting this notice of motion. To do so might injure the great reputation which the Canadian Wheat Board has established for itself not only in Canada but throughout our trading markets in the international area.
Although I cannot document it at the present time, I think I am correct that the chairman of the Canadian Wheat Board, Mr. McNamara, when speaking before the agricultural and rural development committee, indicated a great lack of enthusiasm for any change. My recollection is that one of the arguments he used was that a change in name might have the effect of watering down the very substantial reputation which this agency has created for Canada in international markets.
I think there is no doubt that Canadians, particularly those in western Canada and those who have had relations with the Canadian Wheat Board, are of the opinion that this is probably the most successful and outstanding agency of the federal government that we have ever had in our history. I believe my hon. friend, the sponsor of the motion, would probably agree with that. In fact, he said the same thing in different words. In no way would I want my remarks to be interpreted as being critical of the Canadian Wheat Board. All I wish to say is that I think

the house should zealously guard the reputation which the board has established for itself both in Canada and abroad.
The last matter I want to mention briefly is one to which I referred earlier. My hon. friend's argument would have been much more substantial had he been able to produce definite evidence of a desire for such a change on the part of the people directly concerned with the operations of the wheat board. To my knowledge the producer groups and the agricultural agencies of western Canada who are most directly concerned with the operations of the board have not indicated any such desire. It seems to me, and I hope hon. members will concur, that until the sponsor, other hon. members or, indeed, the government receive representations from these interested groups that it would be in the interest of the western producers and of Canada generally to make such a change, it is not one of the functions of the house to change the name of an agency which has established a sound reputation for well over 30 years, is acknowledged throughout the world and is particularly appreciated by the producers whom it serves.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I was particularly interested in the remarks of the last speaker who seemed to indicate that if the house took some action on this motion it would immediately produce some result. I point out that the key words in the motion are, "the government should consider the advisability of introducing legislation". I do not see how anyone can object to the consideration of the advisability of introducing legislation. I am of the opinion that the house should be willing to consider almost anything and there should be no fear of considering the matter.
The hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp) mentioned that he had introduced several times the proposal to consider the addition of rapeseed and other grains to the grains handled by the Canadian Wheat Board. If it were not for the fact that I have been here a long time and heard the predecessor of the hon. member for Hum-boldt-Melfort-Tisdale refer on numerous occasions to rapeseed in a very decided and knowledgeable way, I might be prepared one of these days to introduce a motion to change the name of rapeseed to "rappseed".
Two points should be taken into consideration in examining the proposed change of name from Canadian Wheat Board to Canada
June 12, 1967

grain board. First there is the sentimental aspect attached to the name of the wheat board. As the previous speaker has indicated, many farmers in western Canada would be opposed to changing the name to Canada grain board on the basis of the fact that this is one of the few government agencies about which more favourable than critical comments are made. I think that in the main most farmers, most politicians and in fact the majority of the Canadian people accept the Canadian Wheat Board as a viable and very useful implement of the government. For this reason a sentimental and historical attachment surrounds the name of the Canadian Wheat Board. This is the opinion of the president of the Canadian Wheat Board who, as the previous speaker mentioned, has shown little enthusiasm for a change in the name of the board. Incidentally, I find he shows little enthusiasm for any change. For that reason I discount his objection to this change.
The reason this matter should be referred to the committee and why the government should give it consideration is that I believe we could probably solve the problem much better by changing the name of the board to the "Canadian wheat and grain board". Even this does not go far enough because of the simple fact that at present oats and barley are included under the act and these are cereal grains. However, this name would not include other grains such as flax, rapeseed and grass seed which, we normally call grains and which are mechanically handled in the same way as other grains but which are not in the same botanical category.
[DOT] (6:30 p.m.)
We in the agricultural field consider these grains and seeds to be in the all embracing category of grain. However, there are those who say that grains should be the botanical grains, and the others should be considered as seeds of the oil bearing type. It may therefore be necessary to add grains and oil seeds to the title of the board, so we might get a very complicated name that would not only confuse the farmers but would confuse the board and everybody else. For this reason I agree that there has to be some consideration given to changing the name. It would seem to me that the name might be changed to the Canadian grain board. However, such a change would not accomplish the purpose of the hon. member who introduced this motion.


Gordon Harvey Aiken: May I ask the hon. member a question?


William Arnold Peters: Yes.
Canadian Wheat Board


Gordon Harvey Aiken: Following the hon. member's line of argument, one might come to the logical conclusion that we could just call it the board.


William Arnold Peters: There are so many of them that this would be confusing. I will agree, however, that if you talked about the board in western Canada there would be very little argument about what board you meant. Here in eastern Canada we might get into some difficulty because of the Board of Transport Commissioners and other boards that are better known. Eventually I think we are going to have to solve this problem. Probably the simplest way of solving it is by setting out in legislation a list of the grains to be handled by the board, including flax and rapeseed. I presume such action would not offend the botanists, the farmers or the board. It is possible we will be able to solve the problem by simply including these products under the act.
This matter was raised at a number of the meetings of the agriculture committee in western Canada. I will agree that it received varying degrees of support depending upon the area in which the meeting was held. The matter was raised continually on the prairies and has become a problem we are going to have to face. I agree with those people who believe that the Canadian Wheat Board is in a different position today than it was when it handled coarse grains. We were surprised to find that coarse grains actually were being handled through the Winnipeg grain exchange, and there was a totally different system being used for the handling of these grains. For this reason, there probably has been a good reason for retaining the name.
However, I agree with the hon. member that this is a subject which could well be given to the committee for study to ascertain the effect of such a change upon our domestic population and our customers abroad. If, as the hon. member states, the customers who are interested in purchasing these other grains from us are of the opinion they could not do this with the wheat board, then I feel the wheat board has been negligent in issuing propaganda throughout the world. This board has the responsibility of handling oats and barley. I was of the opinion they were marketing as much of these products as they could. If the suggestion is to change the name to assist in extending the sales of these products, then I feel this measure would be worthy of committee study.

June 12, 1967
Canadian Wheat Board
I, Mr. Speaker, would be opposed to accepting this motion as an amendment at the present time, but I believe it could well receive the support of the house if the subject matter were referred to a committee for further study. It is becoming more and more important, with increasing production, that coarse grains and oil seeds should be handled by a board. I can see merit in changing the name, and at least we should be willing to refer the matter to the agriculture committee for detailed study because obviously it is going to become a greater problem in the years ahead.


Robert Norman Thompson: My remarks will be very brief with regard to this motion, which has been presented by the hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp). I am somewhat amazed at the arguments that have been presented, particularly some of those presented by the hon. member for Durham (Mr. Honey) and some of those presented by the hon. member for Timis-kaming (Mr. Peters), although I agree with the latter speaker's basic analysis of the situation. I think I have some familiarity with the agricultural situation in the west. All the farmer in the west is asking is that other grains, including rye, rapeseed and flaxseed, be given the same marketing and handling facilities as the wheat board has provided for wheat. This is not a criticism in any way of the wheat board, but I think it is an expression of the value of some of the facilities it has provided to the wheat grower in western Canada.
I can well understand the hon. member seeking to have this subject referred to the agriculture committee. I hope, too, the agriculture committee of the Liberal caucus will consider it, because it seems to me it is a very practical suggestion. It is not one, really, in which sentiment is involved, although I can understand how sentiment might be involved on the part of those farmers who have been more or less satisfied with what the wheat board has done.
We want the name of the board to represent the actual functions the board is expected to carry out. If other grains have been added to the responsibility of the wheat board, if it is logical to assume the same service is going to be extended to include flaxseed, rapeseed and rye, then it is only reasonable that the name be changed to reflect the two functions of the board. Surely in the years ahead the wheat board is going to be concerned not only with marketing wheat but also these other grains and seeds.

[DOT] (6:40 p.m.)
It seems to me that the hon. member for Humboldt-Melfort-Tisdale should be commended for bringing the motion before us at this time. I hope the house can accept it because all he is requesting is that the government give consideration to changing the name of the wheat board to a more distinctive title. Now that the wheat board has taken on a more permanent structure-and it is good this is so-I think it is all the more urgent that consideration be given to this question. The hon. member for Timiskaming has already mentioned that the agriculture committee had this question brought before it at various points during its trip to the west, and it is certainly one that should be given further consideration by the committee and by parliament. The very fact that it has been brought up is indicative that there is genuine worth in the motion before the house now, and I hope hon. members will accept it.


Mr. T. Lefebvre (Poniiac-Temiscamingue):: Mr. Speaker, since we are considering today motion No. 5, the purpose of which is to rename the Canadian Wheat Board, I wish to make known my views fully.
I first want to congratulate the hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp) who is certainly an expert in the field of western agriculture in general, and especially, with regard to the growing of rapeseed. Besides, he is the proposer of that motion.
I was able to appreciate his knowledge during a trip to the western provinces with other hon. members, members of the committee on agriculture, forestry and rural development.
During our meetings, he explained to us on many occasions the significance of rapeseed.
However, before voting on such a piece of legislation, I think that we ought to give it further consideration.

There are several other points that should be brought up in a discussion such as that brought on by the motion that now occupies our deliberations. We should consider the implications of the fact that the bulk of our coarse grains production is actually consumed within Canada, whereas the bulk of our wheat production is exported overseas. The Canadian Wheat Board's agents are, of course, members of the grain trade whose Canadian headquarters are to a great extent located in Winnipeg, close to that board. The
June 12, 1967

bulk of the sales of Canadian grain are made by these grain firms acting as export agents for the Canadian Wheat Board.
Of course when the state trading nations are in the market they do approach the Department of Trade and Commerce and the Canadian Wheat Board in the first instance in order to arrive at an over-all agreement. But by and large the Canadian Wheat Board rely on their agents to sell the bulk of the wheat exports. In like manner I suppose they look to these same companies to merchandize oats and barley.
It therefore seems to me, Mr. Speaker, that while I would take nothing away from the Canadian Wheat Board as far as their excellent reputation in world grain circles is concerned, I would nevertheless have to believe that an equally fine reputation is needed by each and every one of the export grain firms who act as the export selling agents for the board. Those reputations, coupled to that of Canadian grain, are responsible in large measure for the successful marketing operations carried out on behalf of Canadian grain producers.
That would appear to bring me to the second theme that I detected in the motion now before us, namely the handling of flax, rye and rapeseed by the Canadian Wheat Board. During the recent debate on Bill No. C-106, to amend the Canadian Wheat Board Act, several members brought un the subject of putting flax, rye and rapeseed under the jurisdiction of the Canadian Wheat Board, making that board the sole marketing agency for those grains. I was somewhat surprised. Mr. Speaker, when the hon. member for Hum-boldt-Melfort-Tisdale (Mr. Rapp) did not rise on that occasion to bring to the attention of hon. members once again his ideas concerning either the changing of the name of the board or the matter of giving the board jurisdiction over flaxseed, rye and rapeseed.
The hon. member for Provencher (Mr. Jorgenson) was one of those who took the trouble to bring to the attention of the members of this house the inclusion of flax, rye and rapeseed under the provisions of the Canadian Wheat Board Act. He correctly explained that a problem does exist, in that the board applies delivery quota restrictions to the deliveries of rye and flaxseed in particular. He mentioned that a recommendation had been submitted in the report of the standing committee on agriculture, forestry and rural development at the close of the last session.
Canadian Wheat Board
My reading of the committee's report, Mr. Speaker, leads me to believe that what the committee was actually recommending was not that these other grains should be brought under the jurisdiction of the Canadian Wheat Board, but that at least a plebiscite should be held, probably in like manner to those held several years ago in Australia. And again of course some enabling legislation from provincial governments would be required before any action could be taken. This is very important, and I feel that all members should bear in mind the constitutional problems inherent in these marketing shemes.
To sum up, Mr. Speaker, I am not among those who would be in any haste to change the name of the Canadian Wheat Board. I do not stand with those who would impose upon the grain producers of western Canada the obligation to deliver all their marketings of all their grains to the board; nor, indeed, would I be in any haste to require of the board that they be the sole buyer of these farm products. I do not believe sufficient study has yet been given to either of these matters. We realize that we really do not have an idea of what is likely to be the impact of a change in the board's name. Nor are we yet well enough acquainted with the possibility of improvements to net farm income if the Canadian Wheat Board were to become the sole buyer and initial seller of virtually all grain grown in western Canada.
One further point that should be made, Mr. Speaker, is the confusion that the change in name of the board could generate in the minds of overseas customers, between the Canada grain board-the name suggested by the hon. member for Humboldt-Melfort-Tisdale-and the Board of Grain Commissioners for Canada. The similarity between the two names is already confusing enough, even to members of this house, many of whom do not have a clear idea of the jurisdiction and responsibilities of each of these boards. The change in name would not improve this situation but would I suggest only aggravate it.


Gaston Clermont: Mr. Speaker, the motion introduced by the hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp) seems to deal with at least two points. The first concerns the changing of the name of the Canadian Wheat Board. The second point is more subtle and concerns the different grains which would be handled by this board.

June 12, 1967
Canadian Wheat Board
I must say, Mr. Speaker, that the Canadian Wheat Board Act, or Bill No. C-106, which gave rise to several debates in this house recently, mentions wheat, oats and barley only, whereas the motion now before us deals with the sale of wheat, oats, barley, flaxseed, rapeseed and rye which the Canadian Wheat Board might handle for the western producers.
When the directors of the Canadian Wheat Board testified before the standing committee on agriculture, forestry and rural development, in February last, in the city of Winnipeg, the hon. member for Humboldt-Melfort-Tisdale asked the chairman of the Canadian Wheat Board, Mr. McNamara, what were his views concerning a new name for the board. Here is what Mr. McNamara answered him, and I quote:
[DOT] (6:50 p.m.)

All I can say is that a rose by any other name would smell as sweet and I hope we would smell just as sweet in the eyes of the world as we do now in being called the Canadian Wheat Board. I assume this developed from the pool organizations calling themselves wheat pools, but handling all grains. The Australian wheat board merchandizes only wheat. There is an Australian barley board which is a separate organization. But I am surprised to hear you say that in your visit abroad you ran into people who do not realize we are also interested in marketing Canadian barley and oats and that we are also interested in doing what v/e can to market flax, rapeseed and develop business generally for Canada in these markets. As I say, I never thought about changing our name. In a commercial organization, if you have a product that is well known in the world, whether it is White Rose flour or something like that, you try to capitalize on your reputation. I am just vain enough to think that the reputation of the Canadian Wheat Board throughout the world is such that we should continue to capitalize on it.
And there you have, Mr. Speaker, the opinion of the chief commissioner of the Canadian Wheat Board, which he has led so ably and so successfully during the last ten years or so, on the matter of changing the name of the Canadian Wheat Board to the Canada grain board.

I wonder, Mr. Speaker, what the western farmers would think if the name of the board were changed, since this name is known all over the world.

It is interesting to note that the Australian experience has been somewhat like our own. In 1935, which happens to be the year that the present Canadian Wheat Board was

inaugurated, the Commonwealth of Australia tried to set up a wheat marketing board having trading powers, and legislation was actually passed by the commonwealth parliament. However the privy council made the plan unworkable in a decision that declared that section 92 of the Australian constitution bound the commonwealth equally with the states. I am sure hon. members will find no difficulty in seeing the parallel here.
Upon the outbreak of war in 1939, the commonwealth government established the Australian wheat board, giving it complete trading powers. So it is evident that while the Australian wheat board was first established under national security regulations at the beginning of the second world war, it could not have continued in existence without some further action to get them over their constitutional obstacle. In Australia plebiscites have been held twice since the war on the question of the introduction of a wheat stablization plan involving the retention of the Australian wheat board as the sole marketing authority. These ballots indicated that the Australian wheat growers were in favour of the plan. Since the last ballot in 1953, grower's support has been so evident that ballots have not been considered necessary.
I bring this to the attention of hon. members, Mr. Speaker, to indicate that we are not the only nation with constitutional problems concerning the marketing of our agricultural products. I really did not intend to go further in this description of the Australian experience, Mr. Speaker, but I find it so very fascinatingly close to our own experience that I would ask your indulgence for a few moments more to add just one or two further sentences about the Australian situation.
The Australian wheat board, like our own, has a monopoly trading powers. The growers are required to deliver to it all wheat other than that retained for seed or feed on the farm where it is produced. The wheat board negotiates export sales direct with overseas buyers. However sales to the United Kingdom, Europe, the Middle East and India are usually made through the Australian wheat committee, an agency of the Australian wheat board located in London. Wheat flour is sold overseas by private traders under the general control of the Australian wheat board. Where their board differs from the Canadian Wheat Board is in the matter of the grains they handle. In Australia, the wheat board is concerned only with wheat. As hon. members are quite aware, the Canadian wheat board is the sole initial buyers of western wheat, oats and
June 12, 1967

barley that enter commercial channels crossing interprovincial and international boundaries.
There is an Australian barley board, Mr. Speaker, but its name is a legacy from the second world war. In Canada, the Canadian Wheat Board was originally established to handle only wheat. In the beginning this was on a voluntary basis, and did not become compulsory until September, 1943, when the Canadian Wheat Board became the sole marketing agency for wheat produced in the designated area. It was not until August 1, 1949, that the Canadian Wheat Board became the sole marketing agency for oats and barley produced and sold in the prairie provinces of Manitoba, Saskatchewan and Alberta.


An hon. Member:: Author?


Gaston Clermont: And bearing in mind the Australian experience, hon. members should take note that before the Canadian Wheat Board could become the sole marketing agency for oats and barley enabling legislation was required from each of the provincial governments of Manitoba, Saskatchewan and Alberta. The extension of their monopoly to oats and barley was made possible by an amendment to the Canadian Wheat Board Act which was passed on March 19, 1948. Although this was so, the government of the day had refused to proclaim this amendment until the governments of the three prairie provinces had passed the enabling and complementary legislation.
There was no thought in anyone's mind at that time to change the name of the Canadian Wheat Board to indicate that the board now marketed coarse grains in the same way as wheat.


The Acting Speaker (Mr. Dube):: Order. Since the hour for consideration of private members' business has expired, the house will now revert to business interrupted at six o'clock.

The house will now resume the business which was interrupted at six o'clock.

The house in committee of supply, Mr. Dube in the chair.
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Jean-Eudes Dubé: Order, please. The house again in committee of supply. It being 7 p.m. pursuant to standing order 6(2), the committee stands suspended until 8 p.m.
At seven o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
The Acting Chairman (Mr. Legaull):: House again in committee of supply, estimates of the Department of Finance, vote No. 1.


Stanley Howard Knowles: I gather that the minister is now ready to reply to some of the points which have been made in the discussion thus far. I will take only a minute or two, but I should like to add a couple of items to his bill of fare. I believe they have not been discussed by other hon. members.
First I should like him to comment on a matter about which some of us have been asking for a long time, namely improving the section of the Income Tax Act which has to do with the deductibility of trade union dues for income tax purposes. As the minister knows, I was one who pressed for this legislation a long time ago and I welcomed the decision of the government to bring in this provision, but it seems to me there is an element of unfairness about the way in which some portions of trade union dues are not allowed for income tax purposes, specifically any portion of those dues which would go into a building fund or for certain specified purposes.


An hon. Member:: Such as the N.D.P.


Stanley Howard Knowles: May I point out that there is no such treatment of donations to a charity or to a charitable organization. There is of course a percentage limit on the amount a taxpayer can claim in relation to his income, but the government does not presume to tell a church how it can spend this money, at least in so far as income tax deductibility is concerned; and it seems to me similar treatment should be accorded to the trade union movement and that the government should not tell the unions the way in which they may spend their money, as far as deductibility for income tax is concerned.
I would not object if a percentage limit were introduced similar to that applied in the case of the charitable contributions, but in

June 12, 1967
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any event I should like the minister to comment on this matter. My contention is that the full amount of trade union dues should be allowed as deductible. I would remind him that this must be the tenth or the fifteenth time I have raised this question since deductibility in respect of trade union dues was allowed 15 or 20 years ago. There has always been some reason for not taking action. For the past few years it has been the Carter report. Well, we now have the Carter report and I should be glad to hear the minister's views.
The other subject on which I should like the minister to comment has to do with the transferability of pension funds and pension rights as between certain kinds of employment. As the Minister knows, the government has boasted of the extent to which it has provided this kind of transferability. It is possible for a person to go from the public service to the service of a crown corporation and carry his pension rights with him. It is possible for this to be done in reverse. It is also true that agreements have been made between the federal government and certain universities, and perhaps some other employers, to the same end.
[DOT] (8:10 p.m.)
I realize this is something that has to come about step by step, certainly where private employers are concerned, but it has been drawn to my attention that there is one area where transferability is not allowed, and it does seem a bit unfair. I refer to the fact that persons employed by the Department of National Defence, for example in the air force, can transfer to the public service and take their pension rights with them, but if they transfer to a crown corporation such as Air Canada they cannot do so.
As I understand it there is a fair amount of this transferability from public service to crown corporations and to some private employers, and vice-versa, but amongst the kinds of transferability that cannot take place is the one I have identified, namely from any employment under the Department of National Defence, or in any of the armed forces, to a crown corporation. In the past when the government brought in legislation or announced regulations regarding this matter it boasted that it was a very good thing to have pension transferability. I wish it were more or less universal. I realize it is difficult to effect it where private employers are involved, but surely where the crown is involved it should be possible to establish universal transferability without further delay. I

should hope the minister would comment favourably on this and on the other matter which I have raised tonight.


Mitchell William Sharp: Mr. Chairman, I did not make an opening statement because it is only a few days since I presented the budget, and I felt that it would promote better and more thorough consideration of the estimates if I were to reply to questions rather than to make another speech on the subjects on which I wished to give a dissertation. I am grateful, however, to the committee for calling the finance estimates somewhat earlier than usual. It is customary in our proceedings for the finance estimates to go through at the last minute when no one has any time left, and the minister of finance is not given an opportunity of answering some of the questions that ought to be answered and of defending more adequately the policies that he administers. Therefore I propose, Mr. Chairman, to deal with some of the questions that have been raised tonight.
Perhaps, however, I ought to make one general comment at the beginning, and that is that I do not look upon this as an extension of the budget debate, and if I do not deal with some of the questions relating to technical matters of taxation it is because I think it would be better for me to do this in an orderly fashion when the budget is under discussion.


Stanley Howard Knowles: Except that you are not amending the Income Tax Act.


Mitchell William Sharp: That is right, but I have to defend that decision in the budget debate and will deal with those questions then.
The hon. member for Edmonton West began his remarks by referring to monetary developments, and he asked me in effect if I would make some projections of interest rates. This of course I would not do since, like other people in the financial world, I do not know what will happen to interest rates. However, I would like to make one or two comments in reply to some of the specific points he made.
Since the passage of the Bank Act, and even during its passage, interest rates began to decline and there was quite a marked drop both in short and long term rates. As I recall it, the rates on treasury bills, for example, declined from levels well in excess of 5 per cent down to less than 4 per cent. Subsequently they have increased again moderately and are now in the neighbourhood of 4.4 per cent, or something of that kind.
June 12, 1967

Interest rates on long term also declined quite significantly, but not to the same extent, nor did we expect that they would, even in a period of easier monetary conditions and declining interest rates. They have in fact gone up again, not to the high levels that were attained last year, but they have responded in the main to influence in the United States, where long term interest rates are about at the level that they attained at the height of the monetary squeeze. It is of course impossible for Canadian interest rates to diverge very widely from the United States because we are, and will continue, so far as I can see into the future, to be a capital importing country. Therefore we must have a scale of interest rates in relation to the United States that enables us to borrow in that country to meet our requirements.
The hon. member also asked about the interest ceiling under the Bank Act. As he will recall, section 91 of the Bank Act as approved at the last session, provided that the interest rate ceiling would be removed when average of the market yield on short term bonds of Canada for all Wednesdays in any period of three months ending after December 31, 1966, was less than 5 per cent. In fact the average of the market yield on short term bonds of Canada did fall below an average of 5 per cent during a period of three months and therefore, in the parlance of the street, the trigger has released, and it has been announced publicly that after December 31, 1967, there will be no ceiling on bank interest rates.
As hon. members know, during the time since the passage of the Bank Act there has been a very great increase in competition among the banks, and between the banks and other financial institutions. Indeed the complaints that I have heard, perhaps more than others have heard, are complaints about the competition, particularly from other institutions that are finding they are no longer protected as they were by the Bank Act and now have to compete for their funds with the banks.
The banks have increased the interest they are paying on deposits, and immediately after the Bank Act came into effect they reduced the prime rate from the prevailing rate of 6 per cent down to 5f per cent. As expected, and as was intended, interest rates charged by the banks are no longer uniform. They differ between institutions and they differ in accordance with the credit rating of the borrower so that you have a range of interest rates going from a prime rate of 5| per
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cent up to the present ceiling of 1\ per cent.
Moreover the banks have been moving in a massive way into housing loans from which previously they were excluded. Therefore the Bank Act is having, as we intended, a very marked effect upon bank practices, upon the service the banks are able to perform for the public, and most of all there has been an enormous increase in the competition among them and between them and other institutions, this for the benefit of the public, e (8:20 p.m.)
The hon. member also asked if I would refer the regulations under the deposit insurance act to the committee on finance, trade and economic affairs. I apologize for not having done so earlier. It is my intention to do so, and I shall forthwith. The reason I did not do this earlier is because the committee was not organized, and when I spoke to the chairman he asked me not to do so until the committee was under way. It is now under way and I will be happy to refer these regulations and whatever other matters it might be useful to have the committee discuss. It is my opinion that it would be very useful for the public's education to have these regulations under the deposit insurance act scrutinized, and I believe it would also be useful for the education of the public to look at other regulations in respect of consumer loans. All of these matters deserve public airing, and that can only do good.
As I understood the hon. member for Edmonton West, he said he hoped the legislation to establish the Canada Development Corporation would be lost in the shuffle. I regret to disappoint him, because that is not my intention. It is my intention to proceed with the Canada Development Corporation legislation as soon as we can find a place for it on the order paper.


Stanley Howard Knowles: It is very thin right now.


Mitchell William Sharp: I can assure hon. members that the legislation is almost ready to present and it will be presented shortly after we resume. Those are not all the comments I wish to make in reply to the remarks of the hon. member for Edmonton West, but I will reserve some of my other comments in order that I can deal with his remarks together with those made by other members on the same subject.
The hon. member for Nanaimo-Cowi-chan-The Islands made some comments about the Bank Act, in respect of which he as well

June 12, 1967
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as other members ol the committee on finance, trade and economic affairs, are now somewhat expert. That committee did an extremely good job of work on the Bank Act and there are now many members of this house who know a great deal more than they originally did about the workings of our banking system and the effect of the Bank Act upon those institutions and others with which they compete.
I do hope that hon. gentlemen will agree that there has been a very big change in the way in which the banks have operated since the passage of the Bank Act amendments. I will not say that competition has been restored, because it never existed, but it has been established. I expect in the next few years to see changes in our whole financial structure arising out of this new kind of competition, changes that even now we cannot foresee or envisage.
The hon. member made some comment about splitting of shares. I inquired during the dinner interval as to whether either the inspector general of banks or I had any responsibility, or whether we had to give any approval, and I found that neither of us has any responsibility in this regard under the Bank Act. While I recognize there are many reasons for splitting the shares, I do think it is important that in respect of institutions like banks the price of the shares should not be so high as to discourage investment by relatively small investors. Therefore, I believe that splitting of shares, while this may be in the interest of existing shareholders, is also in the interest of maintaining as wide a distribution of these shares as possible.
The hon. member also referred to near banks. I hope he has followed very closely the developments which have taken place in connection with the application of deposit insurance, because I do suggest to him and to other members of the committee, particularly those who took such a close interest in this matter while the legislation was under discussion, that developments have been pretty much as predicted.
Federal deposit insurance is now in effect in respect of all publicly incorporated companies and all provincially incorporated companies, except those incorporated in the province of Quebec, under arrangements made between the other provinces and Ottawa, so that deposit insurance in so far as nine of the ten provinces are concerned is operating just as we hoped it would. There was a short time when, because of the pressure of events, and
TMr. Sharp.]
because of some undesirable developments in the financial world in respect of certain Ontario companies, Ontario deposit insurance came into effect as an interim measure. However as the Ontario government minister said, as soon as the federal legislation was available the insurance was transferred from Ontario to the federal institution.
Let me suggest to the hon. member for Edmonton West as well as the hon. member for Nanaimo-Cowichan-The Islands that the attitude of Quebec toward deposit insurance does support the argument that I made both in the house and before the committee on finance, trade and economic affairs, that if we had introduced legislation to bring near banks under federal jurisdiction, using the power that we believe Ottawa has in connection with banking, that legislation would have been challenged and today there would not have been the degree of supervision over deposit taking institutions which exists in nine of the ten provinces.
That was one of the reasons the government decided deposit insurance was the most practical step to take. At least this brought the institutions in nine of the ten provinces under supervision and gave the depositors there a greater assurance of safety in respect of their deposits than they had before. If we had proceeded to legislate in respect of near banks, that legislation would certainly have been challenged by Quebec, which even now challenges our jurisdiction in respect of deposit insurance and thus held up the whole legislation. By following the procedure we did, by which institutions could only come under federal insurance with the approval of the provinces, we have avoided the kind of stalemate I do not think any one would want to have seen.
Perhaps I could go on to the next point made by the hon. member for Nanaimo-Cowichan-The Islands, about the Mercantile Bank. The committee will recall that at the last minute in our discussions of the Bank Act amendments a proposal was made that the extension of time should be subject to review by the governor in council. We have not yet had an application from the Mercantile Bank for an extension of time beyond December 31, 1967. I have indicated to such of the directors as have happened to see me that this approval would not be given unless the Mercantile Bank put before us its plans for the disposal of stock. In other words, I have made it quite clear, as I said in the house and before the Senate committee when the bill
June 12, 1967

was before the other place, that the extension of time was given for a particular purpose. I quite agree with what the member for Nanaimo-Cowichan-The Islands said, that the most regrettable thing that could happen would be for the Mercantile Bank to proceed to expand, and for us to find at the end of a period of five years that nothing had happened, and no effort had been made to dispose of the shares, in order that they could get out from under the restrictions, or find an extended basis on which to support their deposits. I believe that parliament acted very wisely in restricting that approval to the prior approval of the governor in council from time to time.
[DOT] (8:30 p.m.)
Perhaps I may return to a point made by the hon. member for Edmonton West and the hon. member for Nanaimo-Cowichan-The Islands, namely the state of play in the discussions of international liquidity. I believe the members of the committee are well enough aware of the history of these consultations that I need not take the time now to go through all that history except to remind the committee that deputies of the ministers and governors of the Group of Ten-which vire the ten most important countries, from the financial point of view, in the world -were instructed in October, 1963, to undertake a thorough examination of the outlook for the functioning of the international monetary system and of its probable future needs for liquidity. That is the instruction upon which the Group of Ten ministers and their deputies have been operating. There have been various developments. I have had the privilege of sitting in on one or two of the meetings since I have been minister, and I have in front of me an official who was at all the meetings.
Last September, at the meeting of the governors of the International Monetary Fund, it was proposed that the executive board of the International Monetary Fund should meet with the deputies to attend a meeting of the Group of Ten. These meetings have been held. There have been three joint sessions of two or three days each and another is scheduled to take place in Paris next week. I expect I will be asked, as minister, to attend the meeting of the Group of Ten in July. Efforts have been made to find a suitable date and I am not quite sure which day in July it will be, but it looks as if something will be possible about the middle of that month. Then, of course, we will be reporting again at
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the International Monetary Fund meetings in Rio in September.
I think it is fair to say that most of the technical studies necessary to establish a new reserve asset have now been made. What is needed now is agreement amongst governments as to the major characteristic of the new asset. The basic point at issue is what, if any, condition should be attached to the new asset affecting its use and transfer ability. Speaking as the Canadian minister, as one of the Group of Ten, I am inclined to a more unconditional kind of transfer ability. I would hope that at a meeting of the ministers and the governors that I have been speaking about, and at the annual meeting in Rio of the governors of the International Monetary Fund, further progress will be made in resolving differences amongst governments on these matters.
I should like to make one point clear because of a remark that was made during these discussions. The new asset would not replace any of the existing forms of reserves. It certainly would not replace gold, and it would not replace the United States dollar; and in so far as sterling is used as a reserve currency, it would not replace sterling. It would be an addition to the assets that are available to finance world trade and world payments.
The hon. member for Simcoe East put forward a very strong appeal for further support for the teaching of doctors, and generally for the support of the training of medical personnel. I could not help remarking, as I listened to the hon. member, that this is an example of what I said in my budget speech, of worthy but expensive projects that add to government spending and is one of the reasons why there is a problem not only in Ottawa but in all the provincial capitals and in all city councils, namely of trying to find enough money to do all the good things we would like to do.
Personally I agree with the hon. member. I would like to see more resources devoted to this purpose. I have been moderately encouraging to some of the doctors who have come to me in search of support of medical research, which is another aspect of the same problem. May I add that this is the first time it has been said in this house that I insisted upon medicare coming into effect on July 1, 1968. Most of the criticisms I have heard have been to the opposite effect, that I insisted upon its postponement until July 1, 1968. I am very, very grateful to the hon. member for having put this problem into perspective.

June 12. 1987
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Philip Bernard Rynard: I want you to be well prepared.


Stanley Howard Knowles: It has not yet happened.


Mitchell William Sharp: Now I come to the intervention of the hon. member for Kootenay West. I enjoyed this intervention perhaps more than any other. I do not refer to the hon. member's comments about perpetual bonds or any of the other things he mentioned, but the evidence that he gave that he and his colleagues had been converted to the principles of Social Credit.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: This delighted me. I knew that the hon. member for Kootenay West had moved in that direction, but when he brought forward evidence that the leader of his party and his whole party had moved in that direction, I was delighted. It had occurred to me from time to time that perhaps this might be so, but I found it hard to believe until that evidence was put forward, namely that the hon. member for Nanaimo-Cowichan-The Islands, who has such a firm grasp of these things, had somehow slipped. It gives me a little encouragement in my own errors from time to time to think that even a man like he could have slipped in such a way.


Colin Cameron: It is the fault of my colleagues, Mr. Minister. I have not yet been able to disabuse my colleagues of the fact that there are fairies at the bottom of the garden.


Mitchell William Sharp: It is always delightful to hear the hon. member for Kootenay West. I hope his party enjoyed his speech of this afternoon as much as I did. He made one or two comments about credit unions and asked whether there should not be a national credit unions act. I would point out to him that in fact there is one. At the federal level there is the Co-operative Credit Associations Act which provides for the incorporation by special act of the parliament of Canada of co-operative credit societies. I might add that amendments to this act are under consideration at the present time. This is one of the reasons why, when we brought forward the deposit insurance legislation, I did not include credit unions as the sort of deposit-taking institutions that would be subject to insurance. It seemed to me that they were of a different character, and what we think would be more appropriate for the development and assistance in the development of those institutions would be

facilities by which they might be able to obtain loans to increase their liquidity when they needed it. After all, these are not deposit-taking institutions in the ordinary sense. They deal with their own members, and you have to become a member of the co-operative before you can have deposits with it.
* (8:40 p.m.)
I have answered a great many questions in the house on the subject of perpetual bonds and I do not think there is very much that I can add. Like other hon. members, I have received many letters. Indeed, for a while, they formed a very high proportion of my correspondence. It would appear there were many people who purchased these bonds originally, or perhaps even at later stages, who misunderstood their character. They were intended to be perpetual bonds. When they were issued they were considered to be excellent buys, indeed they went to a premium. It is difficult for us to realize now that when these bonds were issued some 30 odd years ago a 3 per cent rate of interest forever looked like a wonderful bargain when the short term rate of interest was 1 per cent. However, they were intended to be perpetual bonds. The government looked at the possibility of paying them off on a selective basis, but after thoroughly examining each one of these alternatives we came to the conclusion that the only way we could deal fairly with all concerned was to treat them as what they are, namely perpetual bonds that never have to be paid off. They vary in price in accordance with the interest rates on the market. When you can get 4, 5 or 6 per cent on other forms of investment, of course you will not buy these perpetual bonds which yield 3 per cent for more than 50, 60 or 70 per cent of their value. But if interest rates were to go down again to levels around the 3 per cent, which is conceivable, as interest rates are essentially unpredictable, then these bonds would again rise in value to somewhere near par. We thought of paying off those individuals who bought the bonds originally and held them until now, but that would be unfair to those who had been advised to sell them earlier. They would have as great a claim upon the government as those who held them. So in the end we had to decide that even though we knew there were people who had been misled in buying these bonds, in order to deal fairly and in the interests of all concerned we had to treat them as perpetuals, which is what they are.
June 12, 1967


Carl Legault: I regret to inform the minister that his time has expired.


Some hon. Members:: Carry on.


Carl Legault: The
minister has the unanimous consent of the committee to continue.


Mitchell William Sharp: I thank you, Mr. Chairman and members of the committee. I will pass over the comments of the Leader of the Opposition and come back to them later.
I should now like to deal with some of the specific points raised by the hon. member for Parkdale. He suggested that there might be some exemption for the interest on certain types of bonds issued by municipalities. We have examined that proposition from time to time and have come to the conclusion that it amounts to an indirect subsidy to the municipalities. It seemed to us that if we were going to give subsidies to municipalities, it should be done on a much more logical basis and in accordance with a government policy, and not just because a municipality decided it was going to issue some bonds now, whereas another municipality which had issued its bonds earlier would not have the advantage of a tax free status.
On the question of whether there should be a deduction on home owners' taxable income, we have looked at the matter from time to time and found that it has one obvious fault, namely that it is a suggestion which favours one particular kind of resident, that is one who happens to own his home and not rent it. Of course this is not fair, particularly to those who live in apartment buildings. So I felt that as Minister of Finance I could not recommend to the government the proposals put before me by the mayor of Toronto, which have been mentioned by the hon. member for Parkdale.
The hon. member for Parkdale asked me for a report on the claims of Canadian citizens on foreign governments for the settlement of nationalization claims and other matters of that kind. Perhaps I could give a brief progress report. We have completed our negotiations with Bulgaria. A settlement was made last year and announced in June, 1966. Negotiations are now in progress with Hungary. Indeed a Hungarian delegation is in Ottawa now. Czechoslovakia and Rumania have now both agreed to enter into negotiations. Canadian claimants have been asked to submit the details of their claims. With Poland, with whom the negotiations have been
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perhaps more difficult than with any other country, these negotiations, which have been under way for some time, are to be resumed after a break. We now believe that they can be resumed within the next few weeks or months.
As I said, I will not deal with questions of taxation policy. I think these should be dealt with in the budget debate.
The hon. member for Vancouver East raised a general question about government bonds and the investments of individuals who find, when they want to realize these bonds, that they have declined in price. This related not only to perpetual bonds but to all market issues of Canadian bonds. All I can say to the committee is that this is why Canada savings bonds were created. Today very few people of modest circumstances buy market issues of Canadian government bonds because of the fluctuations which take place in their price. Now they buy Canada savings bonds which can be cashed at their face value at any time.
The hon. member for Perth asked me how we were going to finance ourselves in the next year. He will realize that it is not possible to predict in advance the exact amount of any particular bond issue, even a bond issue which is only a refunding issue. However, I can say that in general I do expect to refund all maturities coming due during this fiscal year. In the white paper which appeared with the budget there is a list of the unmatured debt, from which one can get a list of all the bonds that are maturing this year. These maturities, coming due during the remainder of this fiscal year, will total $525 million on October 1, 1967, and $515 million on January 15, 1968. As to the new issues for cash which the hon. member understands I will have to make, I cannot add anything to what I have said in my budget address.
He also asked about church vestments and inquired about the item which appears among the resolutions in the budget. I am answering this question because I understand there is an inquiry about its meaning, but I will not discuss the policy. In fact, the rate on church vestments was reduced to 10 per cent in 1960. All that this resolution does is to bring parts of vestments into line at the same rate. So there should be no reason why the customs officials should not just proceed to enter church vestments at the prevailing rate of 10 per cent.
The hon. member for Parry Sound-Muskoka drew attention to the April figures on imports. I should like to point out to him,

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if he had not noticed it, that in the release which was made on these figures, the figure for April included some technical adjustments which exaggerated the imports. This is the short answer to the point he made. In fact, we had been expecting some improvement in the trade balance and this has been happening. The April figures are not contrary to the trend, but they are exaggerated by these technical adjustments.
[DOT] (8:50 p.m.)
The hon. member for Winnipeg North Centre raised some points about the deduction of union dues and the transferability of pensions. In so far as the second of these points is concerned, I was unaware of this limitation on transferability. I will certainly look into it. Referring to the deduction of union dues, I may say this is more of a budget matter. I hope the hon. member can raise the question again when we get back to the budget debate.


Stanley Howard Knowles: Can the minister tell me at what point in the budget debate we can deal with that since there are to be no amendments to the Income Tax Act?


Mitchell William Sharp: Neither are we amending the income tax now, so it will be just as good a time to discuss it when discussing tax matters.


Stanley Howard Knowles: At which time will one get action?


Mitchell William Sharp: This whole question, I am sure, will be discussed when the government brings forward its general proposals on the Carter commission toward the end of the year. Matters like this will then be open for discussion because the Carter commission has a great deal to say about this matter.
I will conclude, Mr. Chairman, by referring briefly to the comments of the Leader of the Opposition. I am sorry he is not here. I could not help, when I was listening to those comments, but think back to the events of 196263, particularly to the events preceding the coming into office of the present government, and the financial mismanagement which brought about an exchange crisis, probably the most unnecessary exchange crisis this country has even had to suffer. I think it is quite noticeable that, notwithstanding the views that the right hon. gentleman had expressed, there are no signs of any loss of confidence in Canada today nor in the Canadian dollar. This is my brief comment on his intervention. It seems to me that his memory is peculiarly

short to have forgotten so soon these events of 1962-63.


Marcel Joseph Aimé Lambert: You were not there in 1964, when we almost had the same thing.


Mitchell William Sharp: Again, the right hon. Leader of the Opposition indulged in this game of criticizing the government for its growing expenditures and then proposing very large increases in those expenditures. He criticized the government for not having dealt fairly with the provinces, but I could just see those tens of millions of dollars totalling up in his mind as he thought how lavish he would be if he were in office. When the hon. member for Perth was commenting on the budget the other day, he castigated me and the government severely for rising expenditures.
Now, I understand these things. I do believe that it is incumbent upon everyone in this house to look very carefully at government expenditures. It is not only incumbent upon the Minister of Finance, it is incumbent upon all members. However, I do wish whenever members criticize the government for its increasing expenditures they would follow through by not proposing something that would increase those expenditures by tens of millions of dollars. This is just a simple request, and I know it is one that will be acted upon.
In the course of his comments the hon. gentleman referred, for example, to Saskatchewan. Now, the hon. member for Burna-by-Coquitlam knows what has happened. It has been brought to his attention before. In recent years, there has been an enormous improvement in the condition of Saskatchewan. Whether this is due to the fact there is a Liberal government in office in Regina or in Ottawa, I am not sure. Whatever the reason may be, there has been an enormous improvement in the condition of Saskatchewan since the Leader of the Opposition left office as Prime Minister and since the hon. member for Burnaby-Coquitlam left office. The reason there has been a reduction in these payments is that Saskatchewan is now one of the "have" provinces, one of the most prosperous provinces.


Thomas Clement (Tommy) Douglas: May I ask the minister if he would give us the figures which would show Saskatchewan was also a have province before 1964, except we had a much more generous financial arrangement between the federal government and the provinces. It is much less generous now.
June 12, 1967


Mitchell William Sharp: I deny this; there has never been such a generous arrangement of financial affairs between the federal government and the provinces. Indeed, I was looking at the figures as I quoted them in my budget speech, and our expenditures in this respect are going up by hundreds of millions, when we take the whole range of adjustments that have been made in the financial arrangements with the provinces this year alone as compared with last year. This results from a much greater generosity in connection with these claims, as well as the fact that this arrangement which is in effect now is neutral. It does not select any one tax, it selects the whole range of provincial taxes and equals them up to the provincial average. In the course of this development Saskatchewan has been moving toward being one of the "have" provinces and is not any longer entitled to payments from Ottawa. For that reason, we have arranged a system of graduated payments so as to phase Saskatchewan out of the very large payments she has been getting. It may be, of course, if there is a short crop there will again be a time when Saskatchewan becomes entitled to payments. The main reason, and I repeat it, is that in recent years, for whatever reason-it may have been, but I will not claim it was, because a Liberal government was in Ottawa and in Regina; that may be just a coincidence-Saskatchewan is very much more prosperous than it has ever been before.


John (Jack) McIntosh: In spite of the government.


Mitchell William Sharp: There was some reference to the Bank of Western Canada by the hon. member for Edmonton West and the Leader of the Opposition. Personally, I would be very happy to see the Bank of Western Canada open its doors and get into business. I have followed these developments closely indeed. I get reports two or three times a week on the latest developments. I can say one thing to the committee, that the present owner of a great block of shares who lives in eastern Canada would be only too happy to find buyers in western Canada. I believe, myself, this would be a very happy outcome, but in the meantime such buyers have not been found. There remain however some difficulties in getting this operation under way.
I was thinking when I was listening to the right hon. Leader of the Opposition talk about the Bank of Western Canada, criticizing Sinclair Stevens, how greatly things had changed in recent years. At one time, Mr. Coyne was the man who was responsible for
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all the troubles that his government suffered in a financial way; yet today the Leader of the Opposition has become such a staunch supporter of the president of the Bank of Western Canada.


Jay Waldo Monteith: June 12, 1967
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provinces had received much greater amounts, to the detriment of others which suffered accordingly. I only wish to mention that, if I understood his remarks this afternoon correctly, the right hon. gentleman was not suggesting larger contributions should be made to the provinces at this moment, though this might well be called for; he was suggesting that there had been some inequity of treatment.
The last matter mentioned by the minister with which I wish to deal is this. He said that I had apparently castigated the government for their present expenditure. I certainly did so in my reply to the budget speech, and I will do. This is not in contradiction to what was said by the Leader of the Opposition this afternoon. With those remarks, Mr. Chairman, I will resume my seat.


[Stage Direction]
Item agreed to.
3. Grant to the city of Ottawa toward the cost of the civic centre; the government of Canada's share not to exceed $1,000,000; amount required for 196768, $400,000.
Jay Waldo Monteith: I want to refer to the legislative item that is not subject to vote. I was wondering whether the minister would explain the statutory items under public debt charges, the servicing costs and costs of issuing new loans. The amount is not large but it is less than last year. Would the minister give us a short explanation?


Mitchell William Sharp: Mr. Chairman, the decrease of $70,500 is attributable to an over-estimation of the figure for 1966-67. While the estimate for 1966-67 was $790,000, the actual figure was of the order of $690,000. So that this does not represent a decline; the reduction is due to an over-estimate the previous year, which appears to indicate a decline.


Reynold Rapp: Mr. Chairman, I have made representations to the minister and to previous ministers of finance about edible oil and soybean oil entering this country from the United States. Canada pays a tariff on edible oil going to the United States. Would the minister look into this?


Mitchell William Sharp: May I suggest to the hon. member that he wait until he sees the results of the Kennedy round.


[Stage Direction]
Item agreed to.
Subsidies and other payments to provinces-
5. Payments, computed in accordance with terms and conditions approved by the Governor in Council, to the government of each province, in respect of

income tax paid by corporations whose main business is the distribution to or generation for distribution to the public of electrical energy, gas or steam; the said payments to be made in respect of such part of the income of the corporations for the taxation year ending in the calendar year 1965 (as determined under and for the purposes of the Income Tax Act) as is derived from the said distribution or generation in the province to which payment is made and in respect of similar income of such corporations for any taxation year ending in a calendar year prior to 1965 that was not taken into account in computing payments made in respect of that taxation year, $6,700,000.
Item agreed to.
Municipal grants-
10. Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder, and grants to municipalities in lieu of redevelopment charges in accordance with terms and conditions prescribed by the Governor in Council, $40,700,000.
Jay Waldo Monteith: Mr. Chairman, I should like to ask a question on this item. I have before me some correspondence between the city of Stratford and the Department of Finance having to do with part of the federal building which has been used by the Emergency Measures Organization. The city have pointed out to the department that the Department of Public Works is actually receiving rent for that portion of the basement being used by the Emergency Measures Organization. As a consequence of this organization using part of the basement, the grant to the city in lieu of taxes has been reduced. This means, according to their calculation, a saving to the government in the neighbourhood of $2,713.26.
I do not want to go into detail tonight, but this matter is of importance to the city of Stratford. I would ask the minister whether he would mind looking into the mechanics of this. Although I have an explanation on the file from certain members of the department, I wish he would look at it again.


Mitchell William Sharp: I would be very happy to do so, Mr. Chairman.


[Stage Direction]
Item agreed to.
15. Grants to provinces in respect of a fiscal year commencing after December 31, 1966, and in respect of federal property situate therein, where a real estate tax has been imposed or levied on property by a province to finance services that are ordinarily provided throughout Canada by municipalities, the grants to be calculated, subject to terms and conditions approved by the Governor in Council, in the same manner as grants to municipalities under the Municipal Grants Act, $1,000,000.
Herbert Wilfred Herridge: Mr. Chairman, I want to talk about the appropriations not required for 1967-68, which I think comes under vote 15. Would the minister explain what this actually
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means? 1 am not very bright on these things, not having had a postgraduate course in the finance committee.


Mitchell William Sharp: Mr. Chairman, might I refer the hon. member to page 151 of the blue book where there is a full explanation of this item. I am sure he would not want me to read it, but it does authorize the Minister of Finance to establish a special account in the consolidated revenue fund to be known as the foreign claims fund, to which shall be credited various items to the amount of $1,000.
[DOT] (9:10 p.m.)
It also authorizes, notwithstanding the Currency, Mint and Exchange Fund Act, the transfer from the exchange fund account to the consolidated revenue fund of the profit of the calendar year 1964 and each subsequent calendar year from trading operations in foreign exchange, gold and securities, and from the net valuation adjustments on unmatched purchases or sales during each such year. The total given for the two items is $1,001. The $1 is for the purpose of making it legal to transfer these amounts of money; that is an enabling item. The $1,000 is largely for the same purpose.
If the hon. member is not able to understand this, he is in very good company.


Herbert Wilfred Herridge: What is the foreign claims fund? Is this a new fund?


Mitchell William Sharp: It is established in the vote, as shown in the blue book. I hesitate to read the whole paragraph-but that is what the fund is for.


Colin Cameron: Mr. Chairman, I wish to ask the minister something about the earlier part of vote 15 which refers to grants in respect of federal property on which real estate tax would have been imposed. I notice that the amount is $1 million. Is this a new appropriation? Could the minister say what sort of situation this $1 million is supposed to deal with and why it has not been included before?


Mitchell William Sharp: Mr. Chairman, this vote would give the government authority to pay grants in lieu of real property taxes, in respect of departmental properties, to provinces which impose such a tax to finance services that are ordinarily provided throughout Canada by municipalities. The payments would be calculated in a manner closely similar to the payments in lieu of real property taxes made to municipalities under authority of the 27053-92
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Municipal Grants Act. The Municipal Grants Act contains some limitations on grants, one of which is that payments may be made only in respect of taxes which are levied in municipalities by municipal taxing authorities. A separate vote is therefore necessary for payments to provinces. Additional payments, not covered by this vote, would be made by crown corporations, with each body making payments on the basis which it uses for grants in lieu of municipal real property taxes.
It is difficult at this stage to estimate the amount of the new grant payments. The amount shown, of $1 million, is less than the normal annual cost which is estimated at $1,700,000. It is considered unlikely that the grants in respect of the first year of the program could be calculated and paid in full during the 1967-68 fiscal year as the property in respect of which payments would be made would have to be valued for tax purposes. For this reason only $1 million has been included in the vote for 1967-68.
The principal beneficiaries of the new grants would be the provinces of British
Columbia and New Brunswick.


Herbert Wilfred Herridge: My curiosity is aroused. Is this something new? Does this cover some new situation, or some new type of case?


Mitchell William Sharp: There has been a change in the rule that we previously imposed of only dealing with municipal taxes. Now we are dealing with provincial taxes which, in other provinces, would be levied by municipalities.


Thomas Speakman Barnett: Speaking to the same point that was raised by the hon. member for Nanaimo-Cowichan-The Islands, what interpretation does the minister place on the phrase "services that are ordinarily provided throughout Canada by municipalities". Would this include the equivalent of land taxes for school financing purposes and education?


Mitchell William Sharp: Yes. This is intended to be of a general character. You see, as the hon. member knows, taxation systems are changing and the provinces are imposing taxes upon property that would be imposed in other provinces by municipalities, for the same services. This is an attempt to avoid the discrimination that would arise if the payments were to be made only to municipalities, and it covers the same area as the municipal grants do now. It is not an expansion of the payments; it is only where provinces are replacing municipalities as the taxing authority that this applies.

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Mr, Barnell:: I had in mind the manner in which our consolidated school districts operate in British Columbia. A certain tax is levied on real property for school purposes throughout the school district, and inside an incorporated municipal area within the school district. The taxes are levied and collected by the municipal authority.
But in the so called unorganized areas of the school district the levy, which is arrived at by the school board as a result of calculating its need, is actually collected by the provincial taxing authority. That normally has the effect of creating a uniform tax rate throughout the whole school district, for school purposes. A charge is levied on property, in unorganized parts, within the boundary of the school district. I wonder whether this proposal would apply to federal property or installations lying within the boundaries of a school district where the tax is collected for the school board by the provincial tax collector.


Mitchell William Sharp: One of the reasons that we brought in this item this year in this manner rather than by legislation is that we should like to gain some experience in the sort of situation the hon. member has described before bringing permanent legislation forward. It is in such unorganized areas that we have not had experience. It would be the intention to apply in unorganized areas the same rules that we apply in an organized municipality.


Mr. Alkenbrack:: I have a brief question for the minister. I realize that no municipal authority can impose taxes on the federal authority. It must receive whatever the federal government sees fit to grant in lieu of taxes. To determine the final amount to be paid in lieu of taxes I believe the federal authority sends an assessor to the municipality. My question is this: Why is the federal assessment of the amount to be paid in lieu of taxes in some instances being lowered, resulting in less revenue for some municipalities. I am referring to post office buildings, local armouries and buildings like that.


Mitchell William Sharp: Mr. Chairman, I am not familiar with the particular instances that the hon. gentleman is now raising. Perhaps he might write me a letter and I shall be happy to get whatever information I can for him.


Jean-Eudes Dubé: Shall vote 15 carry?


Reynold Rapp: Mr. Chairman, may I ask the minister a question about the statutory payments made under the British North America Act? Every province in Canada except Saskatchewan had its 1967-68 payments increased. The payment to Saskatchewan was decreased by $7 million. The details of this are found on page 149 of the blue book. Someone has to stick up for Saskatchewan.
* (9:20 p.m.)


Mitchell William Sharp: I understand this is caused by population changes. These statutory items were provided for originally in the British North America Act, as the hon. member has stated. The subsidies were established by the terms of confederation and subsequent arrangements. They include allowance per head of population, interest on debt allowances and other special amounts as agreed upon under the terms of union, and subsequent to union.
Allowances per head of population are based on the decennial census except in the prairie provinces of Manitoba, Saskatchewan and Alberta where, on account of the former rapid growth of population, the allowances are also based on each quinquennial census and on an estimated population midway between each decennial and each quinquennial census.
There are changes in the subsidies estimated to be payable to Newfoundland and the three prairie provinces as compared with 1966-67 estimates. The estimates for the other provinces, being based on provincial populations as of June 1, 1961 census are unchanged. While the 1967-68 and 1966-67 estimates for the prairie provinces are based on an estimate of their populations as of June 1, 1966 the estimate employed was revised downward, in preparing the 1967-68 estimates, from that employed to determine the 1966-67 estimate. The population estimate will have to be replaced by actual figures from the quinquennial census which recently became available.
So Saskatchewan may get the $3,000 back.


[Stage Direction]
Item agreed to.
Comptroller of the treasury-
20. Administration, including the administration of the Superannuation and Retirement Acts and recoverable expenditures on behalf of the Canada pension plan, $32,402,000.
Marcel Joseph Aimé Lambert: Somehow or other I keep
getting complaints from widows of superannuated public servants that on the death of their husbands an incredible long period of time elapses before a settlement is received from the superannuation branch. I realize
June 12, 1967

that in some cases difficulties will arise, but delays have usually been accompanied by an apology for somebody having "dropped stitches". I hope this can be avoided in future because these cases usually concern older people and delay bears heavily upon them.


Mitchell William Sharp: I can assure the hon. gentleman I will bring his remarks to the attention of the officials and I will take a personal interest in this. As he knows, there are sometimes very peculiar situations.


Harold Edward Winch: In connection with vote 20 there is a matter which I hesitate to raise because it concerns the affairs of an organization we much admire, the Corps of Commissionaires. I refer the committee to the details of the estimate on page 152 where an amount of $46,300 is earmarked for commissionaires' service. I am aware of the wonderful work being done by the Corps of Commissionaires in their 17 divisions across Canada in finding employment for individuals, some of whom are disabled and unfitted for heavy, physical work.
In the past few days I have been in touch with Mr. Leggat, the president of the corps -unpaid, may I say-because I have been receiving complaints from members of the Corps of Commissionaires. Following those complaints I raised certain matters with the president of the corps and in his answer, which I received only last Friday, he told me that the Corps of Commissionaires obeys all laws and meets all statutory requirements. But members of the corps here in Ottawa tell me this is not true. They inform me that when they work overtime, as is sometimes the case when somebody fails to turn up, they are paid for the extra hours but not at overtime rates. They are paid straight time. The law, apparently, says that if you work over eight hours, you work at overtime rates. The president says they obey the law, but members of the corps tell me that here in Ottawa they are paid straight time for overtime. The men also tell me that provincial and federal law lays down statutory holidays, but that when they work on statutory holidays they do not get a day off in lieu of working on that day nor are they paid for an extra day because they have worked on a statutory holiday.
Those are just two examples of what members of the corps working in Ottawa have told me in my office in the course of the last two or three weeks. I raise this matter knowing what the corps does. I ask the minister this: When provision is made here for $46,300 for 27053-92J
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commissionaires' services, is this estimated on a contract basis with a divisional headquarters? Are inquiries being made to find out whether the president is correct when he says that all laws are obeyed, or are the men correct when they come to me and say that the corps does not abide by the law because they are not paid overtime rates and they are not paid for statutory holidays?
[DOT] (9:30 p.m.)
I do not want in any way to upset the work or the employment of the commissionaires. Through you, Mr. Chairman, I ask the minister to see that an investigation is made into the employment of commissionaires in Ottawa, and that they receive their full entitlement under provincial and federal laws.


Mitchell William Sharp: I will be very happy to take these remarks into account, Mr. Chairman.


Jay Waldo Monteith: Would the minister explain the increase from nothing to $96,700 for "other professional and special services" on page 152? What does the department contemplate?


Mitchell William Sharp: I regret, Mr. Chairman, I am not as well informed on that item as I might be. I would think it relates to a program for computers being introduced into the comptroller's office, but I am not absolutely certain.


Jay Waldo Monteith: Would the minister write a note about it, and at the same time let me know the reason for the $80,000 increase for travelling and removal expenses?


Mitchell William Sharp: I will be very happy to do so, Mr. Chairman.


Mr. More:: I am intrigued by the second item from the bottom on page 152 which reads, "Expenditures chargeable to the Canada Pension Plan account for services normally rendered by other departments free of charge." If other departments render the service free of charge, why is there a charge in this case, and what is it for?


Mitchell William Sharp: I really cannot answer that question. I do not have an explanation for this group of items here, but I will write the hon. member and let him know.


Harold Edward Winch: Can we have an explanation of
the $77,000 increase for travelling and removal expenses before these estimates pass? We

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who are members of the public accounts committee are becoming more and more concerned about travelling and removal expenses going up year by year. Just why, in this fiscal year, in this department, do you require an additional $77,000 which will boost the cost from $275,000 to $352,000? We hear a lot of talk about the expenses of government increasing. If you watch a few dollars they become hundreds of thousands of dollars, and if you watch the hundreds of thousands they become millions of dollars. We want answers.


Mitchell William Sharp: Mr. Chairman, I welcome the attention that is paid to these items. Before these items were put in the estimates book they were very carefully screened and scrutinized by the treasury hoard, and I can assure the committee at least of this fact, that when they pass that test they are necessary expenditures. I regret I do not have a detailed explanation here for the items in this group. I would point out that this is the office of the comptroller of the treasury. While that may add to the weight of the question asked by the hon. member, in fairness I should say that this is not the whole of the travelling account for the department.


Harold Edward Winch: It is $352,000 for one office alone.


Jay Waldo Monteith: The minister says he does not have the detail at the moment. With all due respect I suggest he should have an explanation to give to the committee for this item, although I do not propose to hold up the estimates because of this lack of information. The minister intimated that he would write me later as to the reason for the increase, but I think the committee as a whole should be given the opportunity of knowing why this estimate for travelling and removal expenses has gone up so considerably.


Harold Edward Winch: I too do not want to delay long, but this is an opportunity to examine government expenditures. I presume that the operation of the comptroller of the treasury is a fairly permanent one. Why then does this office have a policy of renting equipment? The estimate for the rental of office equipment shows an increase from $675,000 to $1,397,000. That is quite an increase. Good heavens, that must be an awful lot of equipment that is being rented. It is something that should be investigated. We should get answers. To me $1,397,000 for rental of office equipment in that one department does not make sense.


Mitchell William Sharp: Mr. Chairman, there is a relatively quite simple explanation of that sort of charge. This is the rental of computers which cannot be bought, and the main reason for the big increase here is the introduction of the Canada Pension Plan, the payment of salaries and so on. We are trying to automatize these matters. The comptroller of the treasury is responsible for all those operations within the government, and so it is not surprising that the sum for the renting of office equipment should have risen very substantially. As hon. members know, in all businesses these days it is necessary to pay very large rental charges for equipment that cannot be purchased. Some computers are not for sale. They are only provided on a rental basis, and with the renting goes the service. If you buy them you are stranded without any service. The only way you can get this equipment is on a rental basis, and that is the explanation of this particular item.


Marcel Joseph Aimé Lambert: Mr. Chairman, there has been constant reference to expenses on behalf of the Canada Pension Plan. These appear in the blue book as a charge on the consolidated revenue fund. Some of them are indicated to be recoverable from the Canada Pension Plan. On the top of page 153 there are given certain amounts for administration which are chargeable to the Canada Pension Plan. My recollection of that act was that it was to be a self-sufficient operation, and that the fees charged on the fund were the expenses of administration.
* (9:40 p.m.)
Why do these things which are matters of accounting have to be funnelled through in the estimates of the Department of Finance to artificially inflate public expenditure? These are not expenses at all, because they are chargeable to the Canada Pension Plan which is not supposed to be a part of ways and means. We do find that in some ways these expenses are being shown in the general estimates as a charge against ways and means. I would have thought that a neater way of segregating these would be to charge them to the funds, without putting them in the blue book. In this way they would not clutter up the records of the Department of Finance.
Earlier this session, I referred to a similar situation in the estimates of the Department of External Affairs. Items for external aid seem to come from various places, and unless one has a complete list from the directorate he is unable to find out just how much external aid we are contributing. In the same way
June 12, 1967

this does not indicate how much of this is chargeable to the Canada Pension Plan unless we check little items here, there and everywhere.


Harold Edward Winch: May I just add that it was thoroughly understood that the Canada Pension Plan was to be completely self-supporting, and that after it because self-supporting money would be lent to the various provinces. If we accept the answer I received a few moments ago, that this is a charge on the comptroller of the treasury for equipment required for administering the Canada Pension Plan, then it does not belong here because it is a charge on the Canada Pension Plan. Perhaps the minister is prepared to indicate that we will find a revenue or credit somewhere else which will offset this amount. This is the sort of difficulty we find in the public accounts committee. This is apparently a charge against the Canada Pension Plan for necessary computers. If that is so, it has no business here because that plan is supposed to be self-supporting.


Mitchell William Sharp: Perhaps the hon. member will turn to page 153 where he will find under the first item a figure which offsets this amount. It refers to a deduction of the amounts recoverable from the Canada Pension Plan, $1,287,200, and from the National Harbours Board, $396,000. Let me say in defence of this method that it reveals more of what is going on than if we carried our accounts in any other way.


Thomas Speakman Barnett: Let me return for a moment to the subject raised a short time ago by the hon. member for Vancouver East. He asked several questions about the operation of the corps of commissionaires. If I heard the minister correctly he said he would look into the matters raised. While he is doing so will he also provide answers to one or two other questions I have had in my mind for some time about the operation of this corps, with particular reference to individuals working under various functions of the federal government.
Specifically I should like to know who sets the rates of pay received by members of this corps, and whether these rates are set on the prevailing rate principle as is the case in respect of certain other operations of the federal government. As the hon. member for Vancouver East quite rightly suggested, the operation of this corps has made employment opportunities available to veterans who might
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otherwise find it difficult to obtain employment because of disabilities. In my own area certain members of this corps are receiving very substantially less in the way of remuneration than other people who may be as disabled-and I am thinking of people required to do light jobs. According to the information I have, they are hardly receiving enough to provide for a reasonable or decent standard of living. These are questions in the minds of members of this house which deserve some clarification. There is increasing evidence of dissatisfaction in respect of the operation of this body, which I think would be unfortunate if continued.


Stanley Howard Knowles: Has the minister anything more to say in this regard?


Mitchell William Sharp: Mr. Chairman, I nodded to the hon. member indicating that I did understand his comments and would look into the matter. I would think that some of these questions might also be directed to my colleague, the President of the Treasury Board. He is much more directly concerned with the determination of pay. In any event I will also look into these matters.


Stanley Howard Knowles: Mr. Chairman, this is a rather broad administrative item covering all the work of the comptroller of the treasury, but I note that it includes the administration of various superannuation funds. May I ask the minister where the responsibility regarding superannuation matters now rests. Are policy matters to be taken up with the President of the Treasury Board or with the Minister of Finance? Is there an element of policy in this or is it just administration? I am not quite sure which answer I want the minister to give, but I ask the question anyway.


Mitchell William Sharp: In so far as the administration of present law is concerned, this comes within a division of my department. I very rarely have questions raised with me by the administrator because he is carrying out the laws as they now exist. Other questions about superannuation of retired civil servants, the matter in which my hon. friend is particularly interested, are discussed not only by the President of the Treasury Board and the Minister of Finance, but from time to time by the whole government.


Stanley Howard Knowles: The minister was quite right in suspecting that my question was related to this subject. As he knows, we have been discussing this matter with the President of the Treasury Board. The minister admits that he

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comes into the picture as well, and I hope he realizes how strongly some of us feel about the position of retired civil servants. The minister knows that it took a long time to get the government to agree to have the matter of their pensions referred to the special joint committee on the public service, but at long last it was referred to that committee, which made its recommendations to parliament on May 8.
[DOT] (9:50 p.m.)
I spoke about this matter with some vigour last Thursday evening in an overtime debate, so I will not now repeat what I said then. But I hope the Minister of Finance and his colleagues in the government realize that some of us feel this is a matter that cannot be put off even for another few months. I hope he realizes that some of us feel this matter should be dealt with before the house breaks for a summer recess. I am referring in particular to the implementation of the recommendation of the special joint committee on the public service of Canada that increases be now granted to civil servants already retired.
The question has been raised a good many times on the orders of the day. In fact, it was raised again this afternoon by the Leader of the Opposition, and we got one of those stock answers that is sometimes given to us by the government, namely that we have to wait and see where it fits into the parliamentary program. I remind the Minister of Finance that there is practically nothing on the parliamentary program between now and the proposed summer break, certainly hardly any proposed legislation, and that answer is not good enough. He tells us it is a complicated question. That answer is hardly good enough, either. After all, a solution of sorts was found to the problem back in 1957 and 1958, and I am sure the people concerned have been working on the problem for a long time. To ask these people who have waited for a long time for a measure of justice in this respect to wait until fall would be, I think, most unfair. As a matter of fact, one can be sure that a good many of these people will not live to receive their pension increases if they are put off until fall. I do not need to go into all the arguments with the minister. He heard them frequently in the past when he was fully responsible. But I hope that he and his colleagues fully understand that some of us feel very strongly that parliament should not break for a summer recess without dealing with this matter. Does the minister realize that?


Mitchell William Sharp: Mr. Chairman, it would be impossible to be a member of this house and not be aware of this problem, when I consider all the representations that have been made by the hon. member.


Kenneth Hamill (Ken) More: Mr. Chairman, I have one simple question to put to the minister for clarification. The administration of central office and branch offices of the comptroller of the treasury comes under vote 20 of the estimates we have before us. Is this a renumbering, because it seems to me it is when one looks at the supplementry estimates for 1966-67. Those supplementary estimates indicated that this was vote 25g. Has there been a renumbering this year? I am seeking clarification in this respect so I may make some comparisons, or drop making comparisons if I am wrong in relating these items.


Mitchell William Sharp: I do not know whether I quite understand, Mr. Chairman. The comparative figures are shown.


Kenneth Hamill (Ken) More: Supplementary estimates (G) for the fiscal year ending March 31, 1967, under vote 25g show a heading of "Central office and branch offices administration." I ask for clarification because in those supplementaries there is reference to "Professional and special services" and "Travelling and removal expenses." The question has been raised about the central office and branch offices administration, vote No. 20 in the estimates we are considering of $96,700 for "Other professional and special services." There is no comparable item in the estimates of 1966-67, but according to the supplementaries there is an item of $21,000. It is not shown opposite "$96,700" in the estimates for 1967-68, but they seem to be comparable; they both have beside them "(4)" and seem to be related. I also raise this question because there was in the supplementary estimates for 1966-67 an item of $30,500 for "Travelling and removal expenses." Is this amount included in the $275,000 shown for 1966-67, or is the $30,500 additional? These are the points I wanted to make.


Mitchell William Sharp: Mr. Chairman, I now have the explanation for a couple of the questions asked earlier, including the question concerning professional services. This item of $96,700 was the conversion of family allowance accounts to computers. The key punching is being carried out by a commercial firm plus one government department. I was pretty sure that many of these items related to the conversion of these accounts to computers.
June 12, 1967

The item of "Travelling and removal expenses" which has, as the hon. member for Vancouver East pointed out, risen by some $70,000 results from the centralization of certain of the operations of the comptroller of the treasury in moving some of their operations from outlying points into central places where computers can be used more effectively. This is resulting in our having to pay certain removal expenses.


[Stage Direction]
Item agreed to.
Tariff board-
25. Administration, $358,000.
Marcel Joseph Aimé Lambert: Mr. Chairman, can the minister tell us how many references are still outstanding with the Tariff Board and when we may expect reports on those references?


Mitchell William Sharp: Mr. Chairman, the board has before it now, as directed by me as Minister of Finance, the following references: chemicals, on which they have reported in part, equipment for hospitals and other institutions, and precision instruments and apparatus. These are the three references outstanding at the moment.


Marcel Joseph Aimé Lambert: Mr. Chairman, does the minister expect a report in the relatively near future, or are these, like the chemicals reference, rather long range examinations?


Mitchell William Sharp: No, Mr. Chairman, I expect we will receive reports fairly soon on these references. The chemicals reference is probably the biggest reference ever made to the Tariff Board; indeed it was so large that we still have not recevied the whole of the report and have only a summary of it, which we found useful in connection with the Kennedy round. There have not yet been published all the reasons for the recommendations of the Tariff Board. As I understand it, the Tariff Board is not now under the pressure that it was, and we expect to receive their reports much more quickly.


Mr. Orlikow:: Mr. Chairman, I wonder
whether the Minister of Finance could tell the committee, perhaps next time we meet, if he has been considering the various recommendations made by the Restrictive Trade Practices Commission over the years recommending that where a combine exists-I am not going to go over all the different reports tonight, but we had fine papers, electrical goods and so on-tariff reductions be implemented. I wonder if the minister can at some point report to the house whether these
Business of the House
recommendations have been considered, whether the government intends to implement them or whether they are going to continue to gather dust in the back files of the minister's office.
[DOT] (10:00 p.m.)


Mitchell William Sharp: Mr. Chairman, I can only give the hon. member the same advice I gave to another hon. member, namely that he should wait for the results of the Kennedy round of negotiations to be published.


David Orlikow: Mr. Chairman, some of us have been asking this Minister of Finance and former ministers the same question for years. I do not see why recommendations to try to control combines which are against the law, recommendations made by a government agency that the government use its powers to reduce the tariff or to wipe it out to stop the people who are robbing Canada of millions of dollars, have to wait for the results of the Kennedy round. It seems to me the government could use the very simple tool at its disposal of cutting the tariffs so as to protect the interests of the people of Canada.


Mitchell William Sharp: Mr. Chairman, I notice it is ten o'clock but perhaps I might just say that it is always desirable when cutting one's own tariffs to get some reductions in other people's tariffs at the same time, if one can manage it. I suggest to the hon. member he will not have to wait very long for the results of the Kennedy round. I believe these will be published on July 1.
Item stands.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: Mr. Speaker, I wonder if I could ask a question about tomorrow's business. Does it include only the estimates of the Department of Defence Production or does it also include the estimates of the Department of Industry?


Lawrence T. Pennell: Mr. Speaker, it is proposed to call the estimates of the Department of Defence Production and the National Research Council. Perhaps I misunderstood the hon. member. I did not catch the full import of his question.


Mr. Drury:: I may say that the estimates of the Department of Industry are currently under study by the house committee and have not yet been reported out.
June 12, 1967

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



CONSUMER CREDIT-INQUIRY AS TO LEGISLATION THIS SESSION

David Orlikow: Mr. Speaker, on June 1 I asked the Registrar General whether he intended to introduce legislation in this session to incorporate any of the recommendations of the joint committee on consumer credit. To say the least, the reply of the minister was pretty vague. Certainly he gave no indication that action would be taken this session. This is a matter which is of great concern to many people. Members of parliament have been increasingly aware of the tremendous problems faced by people, particularly those in the low income groups. The result was that over the years as many as a dozen bills were introduced by various members of the house, from all parties, which had the object of controlling the rate of interest, calling for the publication of the true rate of interest, and controlling the door to door sale of merchandise so as to give people the opportunity to cancel the contract, if they signed one, to purchase things without real, knowledge of the facts.
So insistent were the complaints, Mr. Speaker, that the government finally agreed to the establishment of a joint committee of the House of Commons and the Senate to study the question of consumer credit. This committee was chaired jointly by Senator Croll and the present Minister of Agriculture (Mr. Greene), the hon. member for Renfrew South. The committee held its first meeting on June 2, 1964, more than three years ago. So important was the subject which the committee was considering that the committee recommended, and the house approved for the first time, the hiring of expert staff. The committee had working with it a chartered accountant and a lawyer who were able to give the committee expert advice.
The committee heard representations from a large number of organizations representing the retail trade, the finance companies, credit unions, co-operatives, government agencies such as the superintendent of insurance and the Bank of Canada, consumers associations, the Canadian Federation of Agriculture, and a host of others. It became obvious that it was necessary for the government to move into this field by passing legislation.


The committee was confronted by evidence that people were paying 20 per cent to 30 per cent interest; that people were borrowing money or purchasing goods when they did not have the slightest idea of the amount of interest they were paying; that people were purchasing goods and the companies selling the goods were selling the contracts for the collection of money to a third agency; that sometimes the merchandise was inferior and even after it was returned the people were still required to pay the money they had contracted to pay. The committee made a series of recommendations concerning the type of legislation that should be passed.
Before I go to that, I want to point out that the committee found what many lawyers already knew, namely that the field of jurisdiction was divided between the federal and provincial governments. The provinces have begun to move in this field. In the Finanaal Post of April 15, 1965 a story appeared which summarized the legislation being considered or already passed by the provinces of Newfoundland, Nova Scotia, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. These provinces have either passed or are considering the passage of legislation covering their jurisdiction.
Now, the committee made some excellent recommendations. It recommended for example that legislation be passed which would spell out what had been commonly referred to as truth in lending so people would know exactly the total cost of credit expressed both in a lump sum and in terms of simple annual interest. The committee recommended that the advertisements which offered credit should be required to set out annual percentage rates, as well as in dollars and cents, the cost to the consumer for the use of money. The committee recommended also that the protection accorded to borrowers under the small loans act be increased from the present limit of $1,500 up to $5,000. Incidentally this recommendation was made by the Porter commission.
The committee recommended a cooling off period of three days for reconsideration by the purchaser of goods on credit from other sources than stores. This committee recommended terms upon which a purchaser may, without penalty, return goods or recover any moneys paid by him, and so on. This was an excellent report.
[DOT] (10:10 p.m.)
We now have a department of consumer affairs which will be in the charge of the
June 12, 1967

Registrar General. To my knowledge, Mr. Speaker, no minister has had the kind of publicity that the Registrar General has had. Every newspaper and magazine in Canada has been filled with stories about the great things the Registrar General is going to do. The Financial Post for April 15 carried a story which summarized the ideas the minister had about amending the combines act to give it new and sharper key, extending the legislation to cover service industries and to open the way for injured parties in price fixing cases to sue in civil courts for damages. Then the minister promised a complete review of the Canada Corporation Act, and so on.
Here is a committee which has gone in great detail into a very important field affecting most of the people in Canada, particularly those in the lower income groups.


The Acting Speaker (Mr. Dube):: Order. I regret I must interrupt the hon. member but his time has expired.


Mr. Ovide Laflamme (Parliamentary Secretary to Registrar General):: Mr. Speaker, just a few words in reply to the opinion expressed by the hon. member for Winnipeg North (Mr. Orlikow) to let him know that the government is very much aware of its responsibilities with regard to the consumers.
The hon. member, who is well acquainted with the important work performed by the joint committee of the Senate and House of Commons on consumer credit and cost of living, knows full well that the over-all legislation to improve the fate of the consumers generally touches upon every measure which can be passed by every level of government, on the provincial as well as on the federal level.
The government, at least for this session, has made known its views on consumer problems generally in the speech from the throne of May 8, when it listed the various legislative measures that it would introduce in the house, and the hon. member also knows that, from the beginning of the session, it has not been possible to introduce such legislation.
Once the legislation suggested in the speech from the throne is decided upon by the cabinet, it will be announced to the house in the usual manner, and hon. members will then have an opportunity to debate it.


David Orlikow: This session?
Proceedings on Adjournment Motion


Ovide Laflamme: Most definitely this session. I may also say to the hon. member that if he has supplementary questions to put to the Registrar General concerning the minister's intentions, he will have an opportunity to do so on Friday of this week, when we will consider the estimates of that department. He will then have the opportunity to ask any question concerning the problems of consumers which, I am sure, interest not only the hon. members opposite, but the government itself which intends to take all the steps that lie within its power in order to deal with the problems facing all consumers, including ourselves.



IMMIGRATION-U.S. CITIZENS IN CANADA TO ESCAPE ARMY DRAFT

Mr. Ralph Cowan (York-Humber):: Mr. Speaker. I have a question to bring before the house which is considered the highest court in the land. Before I give some details you might be interested in knowing that the department of immigration has known for some days that I was to raise a question tonight regarding a Greek citizen now visiting in Canada. I am appealing for fair consideration of his application to remain here as a landed immigrant, but the house will be interested to know that the department of immigration, through a man I could identify, an employee of the department in Toronto, notified this Greek citizen on Friday last by telephone to be ready to leave Canada next Friday, June 16. I should not like to accuse the department of immigration of having already made up their mind before they hear the matter that I wish to discuss, but it does appear somewhat as though an appeal court had said to an appellant: "We will hear your appeal tomorrow but be ready to go to Kingston penitentiary the day after".
The last time I had occasion to take up a matter with the parliamentary secretary to the minister I can assure you I received the kindest consideration, and I am expecting the same tonight.
On June 6 I asked this question in the House of Commons, as reported at page 1191 of Hansard:
Mr. Speaker, I have a question which I would like to address to the Minister of Manpower and Immigration. Can he give us any estimate as to how many United States citizens may be visiting Canada at the present time in order to avoid the army draft?
I asked that question because of this Greek who is 23 years of age, unmarried and living
June 12, 1967

Proceedings on Adjournment Motion with an uncle in the riding of York-Humber. This Greek came to Canada as a visitor last August. When he came here he came to visit relatives, fully intending to return to Greece. At Christmastime he got in touch with me to ask if I could get an extension of his three month visit so that he could spend Christmas and New Year with his relatives here. This the Department of Manpower and Immigration readily granted.
I never heard from the Greek man until about three weeks ago when I ascertained for the first time that he had made an appeal for landed immigrant status and had been turned down by the immigration department and by the immigration appeal board. Interestingly enough, he was turned down in the first instance on March 8 and appealed some time later in the month, was turned down and ordered deported.
I must bring to the attention of the house and of the Department of Manpower and Immigration that on April 10 and 11 the Minister of Manpower and Immigration issued two statements which I have in my hand, about changes which have been made in the qualifications with respect to landed immigrant status. Those changes are such that the Greek can qualify to remain in Canada as a landed immigrant.
Much more important is the fact that on April 21 there was a revolution in Greece and the country is now in the hands of the army.
When I raised this point with the Minister of Manpower and Immigration in the latter part of May and told him of this young lad who has done service in the Greek army and who does not wish to return to Greece because his country is in the hands of the army, and because the premier has been deposed, and because they do not have democratic government in Greece, I was assured with the answer: "We can assure you that everything is fine in Greece."
On May 29 I received a letter signed by the Minister of Manpower and Immigration-so it must be official-in which this appears:
In addition to the circumstances of the individual case, you will be interested to know that the department has made enquiries through the Department of External Affairs regarding current conditions in Greece. Our ambassador in Athens reports that conditions are quite stable, and that persons returning to Greece have no reason to fear hardship or difficulty.
That is terrific. With the army in control I imagine conditions are stable in Greece. I can tell the Minister of Manpower and Immigration that conditions are very stable in

Washington and New York, in Buffalo and Los Angeles. The government is in control in the United States. Why do we not force the 300 odd Americans who are over here dodging the draft in the Viet Nam war to go back to the United States? Why force this one Greek who has already done his two years in the army, who has already served his country, to go back to a land that is in the hands of the army?
If conditions in Greece are so stable why are we keeping a Canadian army contingent in Cyprus. I know that Cyprus is an independent republic, but also remember that the hon. member for Villeneuve (Mr. Caouette) and the hon. member who once represented Lac-Saint-Jean (Mr. Lessard) who is no longer with us, kept asking what is to happen to Canadian troops when the Greeks land in Cyprus? The Minister of National Defence (Mr. Hellyer) said that the plans for the evacuation of Canadian troops when trouble starts in Cyprus are complete.
Why send the Greek back to Greece if there is some likelihood of the Greek army invading Cyprus, where we now have Canadian troops. I submit that if we are not ordering the 300 United States citizens back to their country we have no right to order the one Greek back to Greece.
A member of the Canadian federal cabinet went on a United States network and admitted that there are perhaps 300 draft dodgers in this country. I have nothing against them; they have to live with themselves. I remember that between 1914 and 1917 Canadians went to the United States, so perhaps we should not mind if a few people from the United States now come to Canada. Americans can quite easily come to Canada and lose themselves in the population of this country, but a Greek has to provide a visitor's visa when he comes in; his every address is known, as is his every movement. I say, let us be fair to the Greeks in the same way as we are trying to be fair with the Americans. Let us not make fish of one and fowl of the other.
[DOT] (10:20 p.m.)


The Acting Speaker (Mr. Dube):: I am sorry I must interrupt the hon. member to tell him that his time has expired.


Mr. John C. Munro (Parliamentary Secretary to Minister of Manpower and Immi-gation):: The hon. member for York-Humber (Mr. Cowan) has referred to present conditions in Greece. The department has made inquiries through the Department of External Affairs and we are informed that the ordinary
June 12, 1967

Greek citizen who is returning to his country, voluntarily or otherwise, has no reason to fear persecution.
The hon. member also has referred to my department's policy toward aliens who may be subject to military call-up in their homelands. An individual's status with regard to compulsory military service in his own country has no bearing upon his admissibility to Canada either as an immigrant or as a visitor; nor is he subject to removal from Canada because of unfulfilled military obligations in his country of citizenship. In any event, in the particular case of Mr. Sistanis, the young man already has completed his period of compulsory military service in Greece and we have no evidence that he is subject to any further compulsory service there.
Mr. Sistanis entered Canada as a visitor and later applied for immigrant status here. He did not comply with the conditions for such a change of status and was asked to leave Canada. His failure to do so resulted in the holding of an inquiry and the issuance of an order for his deportation. The immigration appeal board dismissed his appeal against the order and recommended that the deportation be carried out. The minister can find no reason to change their decision.
Whether or not Mr. Sistanis might qualify for admission to Canada from Greece when new immigrant selection criteria come into force is beside the point. He does not qualify under the conditions the minister announced to the house last July. As hon. members know, the minister is proposing to change and, I believe, improve the criteria for the selection of immigrants. The minister made it
Proceedings on Adjournment Motion clear to the parliamentary committee, however, that it will be some months before our officers are in a position to apply new rules and procedures. No one can say at this point how Mr. Sistanis, if he were in Greece, would stand under those rules. Therefore, it would be unfair to other people if, on the basis of the personal view of the member for York-Humber, the minister were to act now on the assumption that this particular young man is going to be admissible.
It must be clear to any practical person that we would have chaos if the minister were to exercise his discretion to defer settling a case until it could be dealt with under the new criteria, as anything more than a rare exception for particularly strong reasons. The minister is prepared to do this when special hardship may otherwise be involved. Indeed the minister has done so already in a few cases, but he is satisfied that Mr. Sistanis does not come within that category. Therefore the immigration officials will arrange for his deportation as soon as possible.
If he wishes to apply in Athens, in the normal manner, for readmission to Canada as an immigrant when the new selection criteria come into force, the minister wishes to assure the hon. member that his deportation will not be held against him in any way.
Motion agreed to and the house adjourned at 10.26 p.m.
[The following items were passed in Committee of Supply this day:]



DEPARTMENT OF FINANCE

[Stage Direction]
1, 3, 5, 10, 15, 20.
27053-93\
[Stage Direction]
Tuesday, June 13, 1967