1967-10-05

Mr. Barry Mather (New Westminster) moved: for leave to introduce Bill No. C-157, to amend the Broadcasting Act (cigarette advertising).
He said: Mr. Speaker, the purpose of this bill is simply to extend the powers of the Broadcasting Act to enable the Board of Broadcast Governors to regulate cigarette advertising in the interests of public health.
Motion agreed to and bill read the first time. INDUSTRIAL DEVELOPMENT BANK ACT



AMENDMENTS INCREASING CAPITAL AND BORROWING AUTHORITY, ETC.

Hon. Mitchell Sharp (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Industrial Development Bank Act to increase the authorized capital of the bank from $50 million to $75 million: to increase the authorized borrowing authority of the bank to an amount not exceeding ten times the aggregate amount of its paid-up capital and reserve fund; and to make certain other changes in connection with the administration of the act.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I have a question for the Minister of Justice.
Would the minister care to comment on the statement of the premier of Quebec concerning national unity and the constitutional problems.


Hon.   P.-E. Trudeau@Minister of Justice: Willingly, Mr. Speaker. In the first part of his statement, the premier of Quebec has indicated that the first duty of the people of Quebec was to use their powers under the Canadian constitution as it is. That has always been the position of our government.
Secondly, he has indicated that certain rights of the French-speaking community in Canada should be included in the new constitution and that is exactly the position taken by the right hon. Prime Minister of Canada (Mr. Pearson) when he suggested a conference of the provincial premiers at the July 5 meeting on a constitutional Bill of Rights.
On these points we are in perfect agreement with Premier Johnson. We are happy that he is finally coming around to our point of view.


Martial Asselin: Mr. Speaker, I have a supplementary question. Will this statement bring the Minister of Justice to call a federal-provincial conference at the shortest possible time to consider all these constitutional questions?


Mr. Trudeau:: That is not, Mr. Speaker, the position of Premier Johnson.
He has indicated that the conference called by Mr. Robarts is most important, and that is also my view. We are most happy that this conference should take place and we hope that, on this occasion, those who for a long time have been uttering vague formulas will finally negotiate on fact. After that we will be happy to meet the provinces to discuss facts, not words.


Martial Asselin: Mr. Speaker, I should like to put another supplementary question. In view of the fact that the minister has just said that the conference called by Mr. Robarts is most important, will he not change his mind and will he not attend as member of the government? Will he not change his mind and will he not personally represent the Canadian government at this conference?


Pierre Elliott Trudeau: Mr. Speaker, Premier Robarts indicated that it was an interprovincial conference. Under the circumstances, it would be difficult for the federal government to be
October 5, 1987

Inquiries of the Ministry represented there by one of its members since we do not want to interfere with provincial matters. However, we shall be very happy-in fact we have already said so to Premier Robarts-to send senior officials as observers.


Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Justice, in view of his interpretation of the recent statement made by Premier Johnson.
Is the Minister of Justice aware of the fact that the Quebec premier, contrary to every stand taken by the minister himself in this chamber and elsewhere, is in favour of a particular status for the province of Quebec?


Mr. Speaker:: The hon. member for Sherbrooke is asking the minister whether he is informed of a situation and, as phrased, I do not think that the question is in order.


Maurice Allard: The minister does not seem to be informed at all, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wonder if the Prime Minister is in a position to answer the question asked two days ago by my colleague the hon. member for York South. Perhaps I might be permitted to summarize the question. What attitude did the Minister of National Defence take toward the proposal made at the meeting of the nuclear planning group of NATO at Ankara? The proposal called for nuclear mines to be laid on the eastern border of Turkey which is also the border of the Soviet union. Can we be assured that Canada will oppose this proposal in view of our support of the principle of non-proliferation?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, the nuclear planning group of NATO was established last year in order to permit the allies of the United States to participate in the formation of nuclear strategy. As my hon. friend knows, the ministers of defence of the member countries met at Ankara to consider the progress of a number of studies presently under way. One of those is on the question of atomic demolition mines. I might add, Mr. Speaker, that the nuclear planning group is not a decision making body but, rather, makes recommendations to the NATO council.


The question of the use of atomic demolition mines as defensive weapons has been under consideration in NATO for some time. Because of the geographic situation of Turkey and the nature of the terrain of the Turko-Soviet border the Turkish government has been particularly interested in the possibility of using atomic demolition mines for the purpose of creating obstacles in the way of invading forces.
The nuclear planning group has accordingly been studying this question. Further study is being given to the matter, and the results are to be considered by the next ministerial meeting of the nuclear planning group in the spring of 1968. The Canadian position in connection with this proposal is primarily to assure ourselves that no arrangements would be recommended regarding these defensive weapons which could increase the danger of escalation or involve any form of nuclear proliferation.


Mr. Donald Maclnnis (Cape Breton South):: Why is it, then, that in 1965 the Canadian government denied any knowledge of this matter and later, when it was brought out, decided that it was classified information?


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


Malcolm MacInnis: Then I will ask the Prime Minister a straightforward question. When did this information become unclassified?



WINTER WORKS


[Stage Direction]
On the orders of the day:
Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, may I ask a question to the hon. Minister of Manpower and Immigration.
I should like to know the reply of the minister of manpower to the representations of the provinces, asking that the starting date for winter works be set by the municipalities rather than by the province.


Hon. Jean Marchand (Minister of Manpower and Immigration):: Mr. Speaker, I contacted Hon. Mr. Dozois who wrote to me on this matter, and I explained that we could not grant his request, because, from the administrative point of view, it would be absolutely impossible for us to control this program if each municipality were left free to choose a suitable date. That was my reply to Hon. Mr. Dozois.
October 5, 1967


Charles-Eugène Dionne: Mr. Speaker, I would have a complementary question.
Am I to conclude that this is just about the answer you would give if further representations were made by the province?


Mr. Speaker:: Order.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-stoke):: My question is for the Secretary of State for External Affairs. As warfare in Nigeria reaches a climax, has any effort been made by the government to mediate in an attempt to settle the dispute?


Hon. Paul Martin (Secretary of State for External Affairs):: No, Mr. Speaker.


Howard Earl Johnston: Is consideration being given to striking a commonwealth committee which might be of assistance in mediating this dispute?


Paul Joseph James Martin: I have had discussions with interested Canadians who have a wide acquaintanceship with persons in Nigeria, and a close knowledge of conditions there. We have held discussions with Mr. Arnold Smith, secretary general of the commonwealth secretariat in connection with this matter, and we have been in consultation with other countries. The hon. member may be assured that the matter is one which engages our active interest.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I have a question for the Minister of Fisheries with
respect to the recent meetings of the federal-provincial British Columbia fisheries committee. Was any indication given at those meetings that the government of British Columbia intends to participate in the fishing vessel regulations which were recently amended by the minister?


Hon.   H.-J. Robichaud@Minister of Fisheries: I understand that this matter was discussed but no decision was reached.


Frank Howard: Am I correct in understanding, then, that British Columbia still does not
Inquiries of the Ministry participate in the subventions under the fishing vessel regulations?


Mr. Robichaud:: Yes, Mr. Speaker.



BRITISH COLUMBIA-EFFECT OF FLOOD CONTROL WORKS ON COWICHAN RIVER

[Stage Direction]
On the orders of the day:
Mr. David Groos (Victoria (B.C.)):: Can the
minister assure the house, as a result of these meetings, that he is aware of what I understand to be the imminent plans of the British Columbia government in connection with flood control on the Cowichan river on Vancouver island? If so, are his officials studying the impact these might have on the sports fishing on this world famous river?


Hon.   H.-J. Robichaud@Minisfer of Fisheries: Yes, Mr. Speaker. I understand the provincial authorities in British Columbia have contacted our area director in Vancouver with regard to this project, and our departmental engineers are now studying the effect it may have on local fisheries.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (Saint-Hyacinlhe-Bagot):: Mr. Speaker, I wish to direct a question to the Minister of Manpower and Immigration.
Yesterday, in reply to a question from the hon. member for Sainte-Marie (Mr. Valade), he stated that his department would make special efforts to check the unemployment crisis foreseen this winter in the province of Quebec due to the closing of Expo '67. Could he tell us when these steps will be made public?


Jean Marchand: Mr. Speaker, I cannot recall making the statement attributed to me by the hon. member.


J.-H.-Théogène Ricard: Please refer to page 2802.



EXPO '67 LACK OF AGREEMENT TO ENSURE TRANSPORTATION SERVICE

[Stage Direction]
On the orders of the day:
Mr. Roger E. Regimbal (Argenfeuil-Deux-Montagnes):: Mr. Speaker, I wish to direct a related question to the Minister of Trade and

October 5, 1967
Inquiries of the Ministry
Commerce. Has an agreement been made be- lines to those whose activities have the great-tween the minister, the transport unions and est effect on the cost of living, as one means Montreal Transportation Commission to en- of trying to stem the rapid increase in the sure transportation to the exhibition site dur- cost of living which has taken place during ing Expo?	the past three months?


Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, we have been trying to work out the best transportation arrangements. Unfortunately it has not been possible to resolve this unhappy strike, which is depriving a great many people of the opportunity to see one of Canada's great centennial developments. I met with representatives of all three levels of government in Montreal last Friday to explore the situation, but unfortunately it has not been susceptible to solution so far.



AIRPORTS


[Stage Direction]
On the orders of the day:
Hon. E. D. Fullon (Kamloops):: Mr. Speaker, I wish to ask a question to the Minister of Transport. In view of the serious implications for air transportation arising out of the strike at Consolidated Aviation Fueling Limited in Toronto, can the minister make a statement on the matter, and in particular tell of any plans the government may have for alternative service in order to prevent the possibility of a shutdown at Malton?


Hon. Paul Hellyer (Minister of Transport):: Mr. Speaker, I am not in a position to give a detailed report at the moment, but I am hopeful we can manage to maintain the service so it will not be necessary to close the airport facilities.


Edmund Davie Fulton: As a supplementary question, has the minister plans in hand for that eventuality?


Paul Theodore Hellyer: Mr. Speaker, I have been working on the matter for some time this afternoon, but I do not think it would be particularly useful to disclose what the possibilities might be in the event that there was a shutdown.



THE CANADIAN ECONOMY

[Stage Direction]
STEPS TO MEET INCREASE IN COST OF LIVING On the orders of the day:
Hon. George Hees (Northumberland):: Mr. Speaker, I wish to direct a question to the Prime Minister. Is the government giving consideration to issuing of economic guide


Lester Bowles Pearson: Mr. Speaker, as the Minister of Finance indicated in his statement yesterday it is essential both for industry and labour groups to consider after consultation with, and I would hope co-operation from, governments how best we can achieve by voluntary action a reduction in the rate at which prices and costs are increasing.
As my hon. friend no doubt knows, this matter has been the subject of an extensive review by the Economic Council of Canada in its third annual report. The council found serious difficulties in the way of guide lines in the form of an "incomes policy", to use the phrase given in the council's report. Nevertheless the whole question of how to achieve the necessary restraints on prices and costs is a matter which is under continuing and active consideration.


Mr.  R. Gordon L. Fairweafher@Royal: Mr. Speaker, I would like to direct a supplementary question to the Minister of Finance. What category of the minister's priorities or guide lines requires the presence next week in Edmonton of four senior ministers, two parliamentary secretaries and a member of parliament to open the Camsell hospital, and are we to take this as an example-


Mr. Speaker:: Order. I suggest to the hon. member that the question is argumentative.


George Harris Hees: Mr. Speaker, I wish to direct a question to the Prime Minister. Was the Minister of Finance expressing government policy yesterday in stating in this house, as recorded at page 2809 of Hansard, in the left hand column, about two thirds of the way down:
I feel that we must-and we will-find some way to bring this inflationary movement under control even, if necessary, by letting the economy develop a little more slack for a year or two while price and cost increases taper off.


Stanley Howard Knowles: Explain.


Lester Bowles Pearson: Yes, Mr. Speaker; the minister was suggesting, and very wisely, that all governments, including the federal government, should reduce their demands on the capital market and on available resources. I am sure my hon. friend would approve of that.
October 5, 1967


George Harris Hees: A supplementary question, Mr. Speaker. Is the minister not aware that in ordinary language the expression "develop a little more slack in the economy" means to deliberately allow unemployment to develop?


Mr. Speaker:: Order, please.


Lester Bowles Pearson: The hon. gentleman should tighten up his question.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. The hon. member's supplementary question is argumentative.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, my question is directed to the right hon. Prime Minister. Could the Prime Minister tell us when the Centennial Commission mandate is to end, and whether the commission's financial statement is to be submitted for approval to the standing committee on public accounts?


Mr. Speaker:: I do not see any immediate urgency in the hon. member's question. It seems that it could easily be put on the order paper.



INQUIRY AS TO USE OF ELEVATORS AT CHURCHILL

[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to ask the Minister of Trade and Commerce whether it is the intention of the government to completely ignore the terminal at Churchill during the winter months. I am wondering whether the box cars which have accumulated on the railway sidings in Saskatchewan and Manitoba as a result of the strike at the lakehead will be moved to Churchill, or is it the intention to have these cars taken down to the lakehead before the freeze-up?


Robert Henry Winters: Mr. Speaker, as I announced several weeks ago it is the intention of the Canadian Wheat Board to fill the elevators at Churchill this fall.
Inquiries of the Ministry HOUSE OF COMMONS



REQUEST FOR SCREENING OF WINDOWS IN CHAMBER

[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Calgary North):: Mr. Speaker, I have a question for the Minister of Public Works, notice of which I have given him. In order to prevent any further impairment of the eyesight of members sitting opposite the three large and improperly screened windows on the west side of the chamber, will the minister take action to see that these windows are properly screened as they were previously, and as are the two windows on the southwest side of the chamber?


Hon. G. J. Mcllraiih (Minister of Public Works):: Mr. Speaker, I should like to thank the hon. member for giving me notice of his question. Since I am very sure it is in the interests of parliament and the country that the eyesight of hon. members be unimpaired, I will look into the matter immediately.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, I have a question for the Minister of Fisheries arising out of the question I asked him on Tuesday. In his discussions with the minister of fisheries of the Soviet union did the minister of fisheries for the Soviet union indicate that his country would be willing to join the north Pacific salmon fisheries treaty?


Hon.   H.-J. Robichaud@Minister of Fisheries: I believe the minister of fisheries for the U.S.S.R., Mr. Ishkor, made it very clear, particularly at a press conference in Vancouver when he said his country is not interested in joining the north Pacific treaty under its present terms.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the Minister of Finance. Yesterday the minister was good enough to say that he might be able to indicate when he would be in a position to publish the regulations under the interest disclosure section of the Bank Act.

October 5, 1967
Inquiries of the Ministry


Mitchell William Sharp: Mr. Speaker, the regulations relating to cost of borrowing provided for in section 92 of the Bank Act and section 80 of the Quebec Savings Banks Act will be published in the Canada Gazette on October 11 and come into effect on October 16. I shall be glad to table these regulations as soon as they are published.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, my question is for the President of the Treasury Board. Could the hon. gentleman advise us when the government intends to put into effect the large number of recommendations of the Glassco report which have not yet been implemented? I ask this question in view of the speech made yesterday by the Minister of Finance in reference to what he called the severe question of inflation, or in his own quaint language "managing the prosperity".


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: Mr. Speaker, I shall be speaking in the budget debate on the matter of expenditures of the federal government. I should like to point out that practically all the major recommendations of the Glassco commission have been put into effect by this government.


Some hon. Members:: Oh, oh.


Gerald William Baldwin: Mr. Speaker, I will not be argumentative. I simply ask the hon. gentleman whether he will arrange to accelerate the implementation of those recommendations which would make more credible the efforts of the Minister of Finance in his dealings with industry and labour.


Edgar John Benson: I should simply like to say that the government and the civil service have been moving as fast as is humanly possible in the implementation of the recommendations of the Glassco commission. I believe that if someone were to ask Mr. Glassco, his reply would be that he is astonished to find how much has been done.
(Mr. Lambert.)



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
David Walter Groos: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Is the minister in a position to tell the house whether the province of British Columbia has as yet signed the agreement with the federal government with regard to the occupational retraining program?


Jean Marchand: Mr. Speaker, I think the officials of both governments agree entirely on all the terms of the agreement, and we are now waiting for the signature of the minister of education for British Columbia.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Queens):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Can he advise whether the Canadian UN delegation plans any initiative in the fourth committee of the general assembly designed to translate into more effective and more meaningful action the widespread disapproval of the discriminatory racial practices still being carried out by the illegal Smith regime in Rhodesia?


Mr. Speaker:: Order. This question would appear to be of considerable scope, and I wonder whether it should be allowed at this time. I notice that the minister appears to be anxious to answer the question. I may be wrong in my estimation of the question, and if this is so I will allow the minister to reply.


Paul Joseph James Martin: I am glad to note the interesting conflict between this question and the question asked by the hon. member for Winnipeg South Centre.



FISHERIES


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I should like to address my question to the
October 5, 1967

Minister of Fisheries. In view of the lower prices for herring meal and herring oil does the minister or his government intend to take steps to ensure that there will be a herring fishery this winter on both the Atlantic and Pacific coasts?


Mr. Speaker:: Order. Again I wonder
whether this is a matter of immediate urgency, and whether it should not be placed on the order paper.


Frank Howard: If I might be permitted to say so, Mr. Speaker, there is an element of urgency to the question because of the need for the fishermen to know as far in advance as possible what their position might be. At the moment it would appear that it might be a disastrous one unless the government can make a declaration about its position.


Hon.   H.-J. Robichaud@Minister of Fisheries: It is not the intention of the Department of Fisheries to curtail in any way the herring fishery during the coming winter.


Frank Howard: I did not ask that. I asked what is going to be done to assist them.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Stanley James Korchinski: Mr. Speaker, may I direct a question to the Minister of Manpower and Immigration. I should like to ask him whether, as a result of the recent declaration of government policy on immigration, he has made any special effort on the part of the department to set up a new group of individuals within or behind the iron curtain or in those areas where the most difficulty has been experienced in trying to recruit or admit people-


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


Stanley James Korchinski: May I then rephrase the question and ask the minister whether any effort has been made to recruit members within his department to go behind the iron curtain so they may place more people in Canada than normally have been admissible?


Mr. Speaker:: The rephrased question also should be placed on the order paper.
Inquiries of the Ministry VETERANS AFFAIRS



INQUIRY AS TO REPORT ON PENSION COMMISSION

[Stage Direction]
On the orders of the day:
Mr. J. N. Ormislon (Melville):: Mr. Speaker, since I do not see the Minister of Veterans Affairs in his place may I direct this question to the Prime Minister. Would it be at all possible to have copies of the Wood report made available to members of the house before the estimates of the Department of Veterans Affairs are before the house for consideration?


Lester Bowles Pearson: Mr. Speaker, I will be very glad to find out whether this is possible, and if so it will be done.


Mr. F. J. Bigg (Athabaska):: Mr. Speaker, I rise on a question of privilege. I apologize for not having raised this matter at the proper time, but I wish to make a correction to Hansard. It appears that I gave the impression in the country that I had available the meat of the Wood report. I hasten to say that I do not have access to the Wood report but only to the evidence which is, I believe, before the committee at the present time.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO JOINT SECURITIES AND EXCHANGE CONTROL

[Stage Direction]
On the orders of the day:
Maurice Allard: Mr. Speaker, I have a question for the Prime Minister concerning the recent statement made in Toronto by the Registrar General (Mr. Turner) on the advisability of creating in Canada a federal-provincial control on securities transactions.
Is it the Prime Minister's intention to convene a meeting of the premiers on that matter shortly or to put this item on the agenda of discussions for his meeting with the ten premiers next January?


Mr. Speaker:: The hon. member is referring to a conference to be held next January; in the circumstances, the question could easily be put on the order paper.
October 5, 1967



DEFENCE PRODUCTION


[Stage Direction]
Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, my question is directed to the Minister of Industry. In view of the pessimistic report, released on Monday of this week, regarding the future of steel at Sydney, may I ask the hon. gentleman what efforts will be made by the government to assist in this very serious problem?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, the recently issued report is now under study. It is my proposal to have a meeting with the senior management officials of DOSCO to see what can be done.


Robert Muir: A supplementary question, Mr. Speaker. May I ask the hon. gentleman what success he has had with his representations to the president of the new transportation board, the former minister of transport, regarding the restructuring of freight rates in the shipment of steel from the Atlantic provinces?


Charles Mills (Bud) Drury: None as yet, Mr. Speaker.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the President of Treasury Board. Has the government yet reached a decision on the introduction of legislation to increase the pensions of retired civil servants, as recommended on May 8 by the special joint committee on the Public Service of Canada?


Edgar John Benson: No, Mr. Speaker.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. Is the matter still on the cabinet's agenda?


Edgar John Benson: Yes, Mr. Speaker.


Hon. R. A. Bell (Carleton):: Mr. Speaker, may I ask the hon. minister when he anticipates that a decision will be reached?


Edgar John Benson: In due course, Mr. Speaker.

On the orders of the day:


Mr. J. M. Forrestall (Halifax):: Mr. Speaker, I should like to ask the Minister of Industry a question supplemental to the one asked yesterday by the senior member for Halifax, concerning the four new d.d.h.'s. Could the minister allay the fears that exist in this regard, because they are growing and are real in Halifax, by indicating that the tenders for these four new ships will be called this fall.


Charles Mills (Bud) Drury: Yes, Mr. Speaker.


Mr. MacEwan:: "Yes" what?



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development, but in his absence perhaps the parliamentary secretary could answer. Has the minister received a copy of the highly critical report of the coroner's jury convened to investigate the circumstances surrounding the tragic death from malnutrition of the 14-month old Indian girl on the Peigan reserve in Alberta? If so, what action is being taken to implement its recommendations for programs to avoid similar tragedies?


Mr. Stanley Haidasz (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I will take the question as notice and bring it to the attention of the minister when he returns to the house.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Stanley James Korchinski: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Has the minister's department given any consideration to appointing to ambassadorial or lesser positions people who understand the language of the country in which they will serve after appointment, or are these appointments based primarily on whether the people concerned are purely Liberals.
October 5. 19G7	COMMONS


An hon. Member:: How can you be "purely" a Liberal?


Mr. Speaker:: Order, please.


Stanley James Korchinski: This is a serious question, Mr. Speaker.


Mr. Speaker:: Order, please. The question may be very serious, but it would be just as serious if it were placed on the order paper.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker,
I should like to direct a question to the Solicitor General. I would ask the minister whether he can indicate to the house when he might be preparing for introduction changes in the law based upon the recommendations of the committee on juvenile delinquency.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, we are now in the final stages of preparation of a draft discussion paper, which will be forwarded to the various provincial authorities. We shall be proposing a meeting perhaps a little later in the year.



PRESENCE IN GALLERY OF SIR ROBERT


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I wonder whether I might have the permission of the house to draw attention to the presence in the gallery of a very distinguished commonwealth and world statesman, the former prime minister of Australia, Sir Robert Menzies.


Some hon. Members:: Hear, hear.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. G. L. Chaiterton (Esquimali-Saanich):: Mr. Speaker, on Tuesday the right hon. Prime Minister undertook to look into the question of whether the request of the provinces for a conference on medicare would be acceded to. Can the Prime Minister now give us an answer?
DEBATES	2835
Inquiries of the Ministry Right Hon. L. B. Pearson (Prime Minister):
No, Mr. Speaker. Unfortunately the Minister of National Health and Welfare had to leave yesterday. I hope to be able to do this tomorrow morning.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I should like to direct a question to the Secretary of State for External Aflairs (Mr. Martin).
Can the minister tell us if the French ministers who are coming to Quebec one after the other to sign agreements with that province are invited to Ottawa and, if so, why they fail to come as they might be expected to?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, I can assure the hon. member-and he knows it very well-that all those ministers are always invited to Canada and that our relations with the government they represent are normal.


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquelle (Loibiniere):: Mr. Speaker, may I put a question to the hon. Minister of Justice and Attorney General (Mr. Trudeau)? I assure you it is not the one I put yesterday.
Mr. Speaker, can the hon. minister tell us whether since the Conservative party and the member for Winnipeg South Centre (Mr. Churchill) have adopted the "two nations" theory, the committee headed by Mr. Carl Goldenberg has reported to him on the matter, and whether he agrees with that theory?


Mr. Speaker:: Order. The question may be different, but it is just as out of order as the one asked yesterday.


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Could
2836	COMMONS
The Budget-Mr. Gilbert the minister explain to the house why exports fell off in August after a series of rises? Does this, in his opinion, reflect the inflationary pressures that are making it more difficult for our products to be sold?
Hon. Robert Winters (Minister of Trade
and Commerce): With regard to the last part of the question, Mr. Speaker, the answer would be in the negative. Generally speaking, exports last August were down compared with August of the year before because of three main factors. One was the fact that wheat was not moving as well this year, partly because of the strike on the great lakes. Second, we were in a period when the automobile industry was changing over its models. Third, last August, for a variety of reasons, was an extraordinarily good export month.


Hon. J. A. MacLean (Queens):: Mr. Speaker, I would like to ask the Minister of Trade and Commerce a related question. Is the government presently taking any action which would result in the greater use of the metric system by Canadian industry, thereby improving Canada's competitive position in a large segment of the world market?


Mr. Speaker:: Order. This is a very general question. I do not believe it is so urgent that it cannot be placed on the order paper.



THE BUDGET


[Stage Direction]
The house resumed, from Wednesday, October 4, consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Monteith (p. 1197), and the amendment to the amendment of Mr. Cameron (Nanaimo-Cowichan-The Islands) (p. 1201).
Mr. John Gilbert (Broadview):: Mr. Speaker, prior to the adjournment last evening I was directing my remarks to the Minister of Finance and I stated that the mere fact he has made two speeches in the last two days with regard to the economic state of the nation clearly indicates the seriousness of the situation and the inability of the government and more particularly his own inability to cope with the problems and to provide adequate solutions. When one thinks of the Minister of Finance one thinks of a person who has attempted to show the Canadian
[Mr. Hees.l
DEBATES	October 5, 1967
people how to manage their own affairs, to show how he would balance the deficits of the nation, and how, by practising frugality and good management, we would have prosperity and stability.
I pointed out to him that this has not been so since he has taken office and I set forth three examples to prove how miserably he has failed to come to grips with these problems. The first example was the consumer price index which has shown a steady increase in the Canadian economy. I indicated to him that the Dominion Bureau of Statistics' figures show that the consumer price index has increased from 139.5 in July, 1965 to 144.3 in July, 1966 and to 150.2 in July, 1967. This would indicate that the Canadian people are paying, as of July of this year, $150.20 for purchases for which they would have paid $100 in 1949. I also told the minister that in my opinion the people whom this situation affects most are those who live on fixed incomes such as the old age pensioners and people in the lower income bracket.
The second problem with which the minister has failed to deal is unemployment. Unemployment has been a continuing festering sore on the Canadian economy. D.B.S. figures inform us that since 1965 there has been an upward trend in unemployment despite occasional seasonal declines. In July, 1967, the number of unemployed stood at 330,000 in absolute figures. Shown as a percentage of the labour force, the number of unemployed has increased steadily since the end of 1965 despite periodic declines. I said that graphs published by D.B.S. indicate a steady increase in unemployment since the beginning of 1966. In fact the D.B.S. table, which is adjusted to seasonal variations, indicates that in Ontario the number of unemployed is 3.5 per cent. In the Atlantic provinces the number has increased to 6.8 per cent, and even in the province of British Columbia the figure stands at 5 per cent. This is a disgrace to the Canadian economy.
The third point I mentioned concerns the high interest rates which were reflected in the recent increase in the N.H.A. rate on mortgages to 8.25 per cent. I indicated to the minister that in areas such as Toronto interest rates vary from 8.75 to 9 per cent. At that point the Minister of Labour (Mr. Nicholson) challenged the figure of 9 per cent and suggested that in Toronto interest rates for conventional loans only varied .5 per cent. I should like the Minister of Finance and the Minister of Labour to know that according to the information I have received the rate on
October 5, 1967

loans on prime properties in Toronto stands at 8.5 per cent and on secondary properties the variation is between .25 and .5 per cent, which would bring it close to 9 per cent. The interest rate on prime properties in Sudbury stands at 9 per cent and the interest rate on prime properties in London, Ontario is 8.75 per cent.
I also pointed out that the guaranteed investment certificates of the National Trust Company now pay 6.75 per cent and that in order for the company to make a margin of profit it would have to lend money at a rate of interest between 8.5 and 9 per cent. These were three of the items that I mentioned in the house last evening.
Yesterday we heard the remedies which the Minister of Finance proposed to some of these problems. He stated that the real causes could not be found in any one place and he suggested there may be two areas in which the government and business can show restraint. The first one was restraint on government expenditures, and he indicated that the government has made special efforts to trim down the estimates for the next year and that it will be his aim to reduce our present deficit.
The cutting back of government expenditures has also been proposed by the Conservative party. In fact the hon. member for Edmonton West (Mr. Lambert) yesterday took the government to task with regard to government expenditures without making suggestions as to what expenditures the government should reduced with the exception of the social and welfare areas. He said in fact that if we cannot afford to pay for old age pensions and medicare programs we should make cut-backs in those areas. This appears to be a far cry from the pressure which the Progressive Conservative party tried to apply during the early part of the year to increase old age pensions for the senior citizens of the country. The Conservative party has not indicated, nor has the Minister of Finance, that in cutting back government expenditures we should cut subsidies to the wheat farmers or cut our defence budget thereby affecting the maritime provinces and the province of British Columbia. The members of that party have not suggested that we cut the subsidies to the coal industry and no suggestion has been made with regard to a cut-back on educational grants or other social services.
It is true that government expenditures have risen within the last few years but it has been to cover an increase in social and
The Budget-Mr. Gilbert welfare programs, educational grants, transportation, interest on the public debt and subsidies. All these increases have been necessary for the over-all good of the country and they are to be expected. The Economic Council of Canada stated that in the future the government must participate in these types of programs if the progress and prosperity of the Canadian people are to continue. All too often increases in government expenditures are translated into a criticism of increasing government waste in its departments and agencies and of the application of Parkinson's law as well as excessive bureaucracy and lax administrative control. It is necessary that the government adopt better measures of reviewing and auditing government expenses, but this is secondary to its main function of determining the priorities of the government in facilitating high standards of performance in the nation's economic and social development, for example, with regard to education, health and welfare, transportation, resources development and the improvement of the quality of life of all Canadians.
a (3:30 p.m.)
We in the New Democratic party feel that the government has failed miserably in determining the priorities for its expenditures. The most flagrant example is this regard in the field of housing. The serious shortage of housing today is an indication of the lack of foresight and leadership of the federal government in respect of an urgent and pressing problem.
The solution of the Minister of Finance (Mr. Sharp) appears in Hansard for Monday, October 2, where as reported at page 2730 he recognized the problem and stated:
-there is no doubt that now there is a shortage of housing accommodation in Canada. This shortage, of course, is particularly to be found in the very rapidly growing urban centres, one of which I help to represent in this House.
The minister then set forth his solution to the housing problem in Canada and as reported at page 2731 said:
The first problem we have to deal with, if we are going to face up to the housing problem adequately and not in a partisan fashion, looking at the realities of the situation, is the shortage of capital or I might say, if you want to put it another way, the shortage of savings.
Then the minister went on to set forth the necessity for high interest rates to attract United States capital to participate in the economy; otherwise there would be a drop in the housing program. The minister said:
Canadian rates must be high enough in relation to those of the United States that they will attract
October 5, 1967

The Budget-Mr. Gilbert
into Canada the capital required to supply our deficiency. This is just a fact of life. There is nothing we can do about it unless we can increase our own savings-
That is his solution to the housing problem, Mr. Speaker. I was hoping that the Minister of Labour (Mr. Nicholson) would be in the house because I wanted to remind him that in the symposium on housing held in Toronto in the spring of this year the former president of Central Mortgage and Housing, Mr. Mansur, took an entirely different approach to this problem. The minister has stated that there is a shortage of savings. Mr. Mansur stated that the real problem with housing in Canada today is not a shortage of mortgage funds but the high cost of houses. The main elements in the high cost of houses are the high cost of land, the high cost of labour and materials, and the high cost of interest rates. In fact, Mr. Mansur put it rather dramatically and said that there was enough mortgage money pouring out of the ears of the finance companies to take care of this problem but it was just that we have outpriced ourselves because of the high cost of housing.
This is a far different approach from that taken by the Minister of Labour and the Minister of Finance who say there is a shortage of savings and that we do not have the necessary capital. We in the New Democratic party say that there is a shortage of savings by the Canadian people, that it is the lack of direction and the misallocation of funds to meet the present economic and social needs of the country that is the cause.
I should like to give hon. members an example. Many people say that Canadians are great savers. There is plenty of evidence to support this contention. In 1947 Canadian savings amounted to $6 billion, in 1950 to $7 billion, in 1955 to $10 billion, in 1960 to $15 billion, in 1965 to $25 billion and 1966 to $27 billion. This indicates the tremendous savings that are made by the Canadian people.
The problem as we see it is the direction of the savings of the Canadian people. The main bodies that control the savings of the Canadian people are the lending institutions. For example, I should like to mention the direction of Canadian investments by the Canadian life insurance companies. In Canada life insurance companies do about 50 per cent of the insurance business; the balance is in the hands of United States and English companies. According to the superintendent of insurance, total investment in 1965 on the part of Canadian insurance companies amounted to $12 billion. These investments


comprised four main	categories-bonds,
stocks, mortgage loans and other assets. The report of the superintendent indicates that only 65 per cent of this $12 billion was invested in Canada. The remaining 35 per cent was invested in the United States, the commonwealth and other countries. We feel that there should be a high percentage of the savings of Canadians directed to investment in Canada so as to take care of the economic and social needs of the nation.
Although one is disappointed at the investment picture of the insurance companies, one can be greatly disturbed when one looks at the mutual funds in Canada. They have no social conscience whatsoever. In fact, most of the investments of the mutual funds are not placed in Canada. The great majority of these funds, the savings of the Canadian people, are invested in the United States. Therefore we feel that the government must give direction to the savings of Canadians so as to provide the necessary money for the development of Canada. There would not be this serious housing crisis today if the government had given direction to the lending institutions in investing the savings of the Canadian people.
Another area where Canadian savers could place their money is in the Canada Development Corporation, which could be another useful instrument in the development of Canada by providing an opportunity for Canadians to participate in the development of the country and giving them a fair return on their money. However, Mr. Speaker, the government has been talking about this corporation for quite some time but as yet has not taken any action. One is therefore led to believe that the main reason the government has not taken action is that the very institutions that give money to the government at election time have either discouraged or restrained the government from doing so. We as Canadians cannot buy back Canadian industry, as has been stated by one of the ministers of the government. We must direct the investments of Canadians to the development of industry and to meeting the social needs of the country.
Another area where the government could show leadership is in resource industries such as mining, oil, pulp and paper and the like. Here the government should be giving direction and encouragement to develop our manufacturing industries in Canada and help them specialize so they can supply the home market as well as compete successfully in the international market. Too many of our
October 5, 1967

natural resources are being exported to countries like the United States, where in turn manufacturers make the products which we in Canada have to buy back again. We feel that greater emphasis should be placed on our natural resources and more opportunity given to Canadian companies to develop these resources to their full utility so they can make products we now have to buy from our neighbour to the south and are also able to compete successfully in the international market.
[DOT] (3:40 p.m.)
Perhaps the best example of this is to be seen in the remarks of the Minister of Trade and Commerce (Mr. Winters) as they appear in the minutes of the meeting of the committee on finance, trade and economic affairs of June 13. The hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) asked the minister the following question having to do with the production of nickel in Canada. On page 57 of the report the following appears:
I would like to ask the minister to make some further comments on a matter that he discussed in the house on June 5 with my colleague, Mr. Saltsman, on the question of the nickel production and supplies of nickel for the domestic market.
I have here a report in the Globe and Mail of April 20 of the annual meeting of the International Nickel Company, and this does not seem to track very well with the reports of D.B.S. and with your own statement, Mr. Minister, about the production of nickel. Mr. Wingate had this to say:
"Production this year will be a record but not as great as last year's deliveries of 500.2 million pounds, which included 100 million pounds of U.S. government surplus nickel sold at no profit."
I was wondering if I could get some explanation of what that means.
I have also had reports of domestic users who have been restricted in their deliveries while at the same time our exports to the United States have been increasing. The fact is reported that in 1966 we exported 1.7 million pounds more than we produced.
I was wondering if the government has in mind any possibility of stockpiling a certain amount of it here in Canada rather than leaving some of our domestic users in short supply and continuing the exports to the United States at the rate they are presently being undertaken.
The minister replied:
The stockpile in the United States has distorted the supply and demand figures. There has been a drawdown on the stockpile which gave the impression that there was a greater availability of nickel than there really is from world production. World production is not able to meet world demand at the present time, and the stockpile is getting pretty well eroded. The strike at Sudbury last year distorted the production figures considerably and set back the supply side of the supply and demand relationship.
The Budget-Mr. Gilbert
International Nickel has been pressed to meet demands on a world basis for nickel; they have not been able to cope with it. In this situation, they have undertaken to provide to Canadian users-
This is the important sentence:
-100 per cent of their utilization of last year.
The hon. member for Nanaimo-Cowichan-The Islands then said:
But with no provision for any expansion in their operations.
Later he said:
Does the government not think that the primary objective of the government should be to see to the expansion of Canadian industry that is dependent on nickel supplies?
The minister replied:
We think that is a primary objective; but, as I said, we have got to balance that against our export commitments, and we attach great Importance in Canada to a high level of exports.
That shows that the government puts great stress on export of our natural resources. I think the evidence is obvious, as we see it, that the government will give to Canadian industry only 100 per cent of the utilization of 1966, with no provision for expansion. We say that Canadian natural resources should be made available first to Canadian manufacturers. Canadian industry should be developed first and only the surplus ought to be exported.
The N.D.P. also feels that an investment advisory board ought to be set up to guide the investment of retained earnings of Canadian corporations within the country. Such a measure would cope with many economic and social problems. The Minister of Finance is quite familiar with the technique involved. Not long ago he imposed a 5 per cent surcharge tax on Canadian corporations. He allowed them 5 per cent on their money and promised to return it with interest within a period not to exceed 36 months. The minister became generous and returned their money to the corporations within a much shorter period. Now the minister talks of an excess of demand in the Canadian economy. Perhaps he ought to impose a similar tax again, but this time he might be well advised to lead our corporations toward the best types of investment to keep our economy stable and growing.
To dampen inflationary tendencies the minister said yesterday that he would ask industry and labour to restrain themselves with regard to prices and wages. I submit it is only fair, if labour unions in Canada are to

October 5. 1967
The Budget-Mr. Davis go through the complex process of negotiation, mediation, conciliation and arbitration before going on strike for higher wages, that Canadian corporations ought to be placed in a similar position. That is why for some time we have urged the government to set up a prices review board. It would examine any unjustifiable increases in the prices of Canadian goods. As the government imposes the restrictions I have mentioned on labour, surely it has a duty to impose similar restrictions on industry. Just asking industry to restrain its pricing policy while at the same time proposing a complex process for the trade unions to follow is not fair in the circumstances.
Substantially, Canadians must run their own economy for their own development; they should not be the tools of corporations when it comes to direction and development. This party feels that if we were to implement the measures I have tried to outline Canada would enjoy more stable growth and our people would become the first priority.


Mr. Jack Davis (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the lead-off speaker for the official opposition, the hon. member for Edmonton West (Mr. Lambert), yesterday complimented the Minister of Finance (Mr. Sharp) for polishing his image as a "pater familias". I am not a lawyer; my background is engineering. I shall have to take the hon. member's definition as being correct. At any rate, he translated it to mean "the good, prudent man". I agree with him. I think the present Minister of Finance is a prudent man. Certainly he is a good manager. He has the vital interests of the Canadian family at heart and is doing a first class job.


Stanley Howard Knowles: Another polisher.


An hon. Member:: Don't smile.


John (Jack) Davis: 

slowing down as an economy which is flat out begins to operate as I hope it will for many years to come.
There are several other figures to which I want to direct the attention of the house. There is, first of all, the order of magnitude of the transfers to the provinces. I said we were running a deficit of 2 per cent on a national accounts basis. We have a total budget on that basis of the order of $11 billion. Of that amount, $2 billion goes to the provinces as a direct transfer into provincial treasuries. Thus, if hon. members want a true picture of what the federal government spends for federal purposes within the B.N.A. Act, it can be said we were running a surplus of nearly 20 per cent. The federal government has certainly balanced its budget. It is handing over to the provinces no less than $2 billion and the provinces are using this money for local and provincial economies.
It is not easy to produce figures showing the extent of federal assistance province by province, but one can get some indication of them from the reports of the Economic Council of Canada. Reading the second report of the council I find that in Newfoundland and Prince Edward Island at least 50 per cent of the provinces income is derived from Ottawa in one form or another-equalization payments, payments in connection with joint cost programs, and so on. In Nova Scotia and New Brunswick federal assistance ranges between 30 per cent and 40 per cent. In Quebec, Manitoba and Saskatchewan it is about 20 per cent and even in the so-called "have" provinces, Ontario, Alberta and British Columbia, federal support for all provincial purposes, including municipal purposes, amounts to about 15 per cent.
Thus, when we look at the federal budget we are looking at more than the national accounts as they relate to moneys taken in and expended for purely national purposes. We are looking also at surpluses generated for payment to the provinces, not only to those with low average income and high unemployment but to all of them.
We have certainly introduced a number of expensive programs in the area of social security. However, I should like to point out that most of these are not in themselves inflationary. We have made new expenditures and in some cases we have obliged the provinces to incur new expenditures. But we have always made sure that the revenue necessary to meet these payments is available. The programs have been organized in that fashion.
The Budget-Mr. Davis
Consider, for example, the old age assistance legislation. I well remember how bitterly both the official opposition and the New Democratic party criticized the increase in taxation which the Minister of Finance introduced to meet the cost of increases in these pensions. But as a result of the action he took the whole of the old age pension account is now in balance. As much is being taken out of the economy as is necessary to make these benefits available to our older citizens. The old age program, as it has been managed by the minister, is not inflationary.
The Canada Pension Plan is not inflationary. There were many who said that more would be taken from the Canadian people in the form of contributions than would ever flow back into the economy through reinvestment by provincial governments. Ottawa has been the keeper of the accounts; it has been collecting this money and passing it on to the provincial governments. The plan has not been inflationary and the money paid out has not exceeded income contrary to the dour expectation of pessimists opposite. It has not had a depressing effect on our economy; it has not, of itself, been inflationary.
The unemployment insurance fund is in the black. It was in the red back in 1961 and 1962. Today it is managed in such a way as to be substantially in balance. Even the government legislation having to do with medicare contains its own provision for balancing income and expenditure. If people take a sufficiently broad view of the medicare scheme they must realize that there will be few, if any, more doctors at work after the plan is introduced than there are at the present time. The doctors will not suddenly be submitting larger bills and charging higher fees to their patients. In other words, a different system of accounting will be in effect. The manner of collection and payment will have been changed but the economic impact of keeping our accounts in a different way will not be appreciable. Indeed, I have sufficient faith in the medical profession to think that medicare will not be inflationary at all and that we will be getting good value for our money under a financial scheme which sees a mixture of public and private plans in effect across the nation. These new arrangements in themselves are not inflationary.
[DOT] (4:00 p.m.)
What can be controlled and certainly influenced by the actions of the government

October 5, 196?
The Budget-Mr. Davis are the expenditures of many of our departments. Here the most inflationary single element is in the category of salaries and wages. For example, take the accounts of the Department of National Defence. I remember the former minister, now the Minister of Transport (Mr. Hellyer), explaining his estimates last June. He made it abundantly clear that if it had not been for salary and wage increases, increases in pay and allowances to the armed forces, his budget would have been down by about 10 per cent. The very modest increase in the national defence budget is entirely due to increased wages, salaries, pay and allowances.
This problem of increased wages and salaries runs throughout the entire civil service and throughout the economy in general, but certainly that the area of the civil service, of the departments, is one that should be under the control of the government and the government should do something about it. I think the sort of thing the government should do is to go slow on its hirings. On balance let retirements reduce the payroll of many of our departments. I know of a few examples where branches, boards and departments have increased not twice or three times in the last decade but have gone up 10 or 15 times through proliferation, through the rounding out of jobs which do not need to be done in such an elaborate fashion. I would like to be quite specific in respect of some of our crown corporations.
I notice according to the estimates in the blue book that for the current year C.B.C. expenditure is to go up by some $30 million, from $115 million to approximately $145 million. I do not think there is anyone in this country who is not alarmed about the budget of the C.B.C., but there are very few people who seem to be able to put their fingers on some of the difficulties, the errors, the miscalculations, the plain mismanagement that goes on within that large corporation. It badly needs a shaking up, and I am sure it will get a shaking up as soon as the new broadcasting act has been introduced and a new management installed.
To give an example, I have a clipping here from the Vancouver Sun of September 29, 1967. It is a column written by Mr. Les Wedman. In it he refers to a so-called popular program which has appeared on C.T.V., "Mission Impossible," a United States produced series. C.T.V. ran the series last year for a given fee. However, before C.T.V. could reach the source of the series in the United States to cancel it for the coming year, they

were met by a shamefaced executive from the company which films "Mission Impossible" who said that C.T.V. could not have it anyway because they had been outbid. The C.B.C. is going to run it this year for twice the price. The C.B.C. had not even bothered to check with C.T.V. to see whether it could take up C.T.V.'s option and get the series for half the price that we, the Canadian taxpayers, are now going to pay for that program.
I think some hon. members opposite will be interested in another example given in Mr. Wedman's column, dealing with the coverage of the recent Progressive Conservative convention at the Maple Leaf Gardens in Toronto. Certainly the television coverage was good, and everyone I have talked to thought it was a great event. I think it was a very fine event and deserved full coverage. I only trust that future conventions will get as good coverage but here is what Mr. Wedman wrote about it:
C.B.C. spent in excess of $400,000 to cover the convention and used 486 people to bring it to viewers. C.T.V.-with more hours on the air and scooping C.B.C. all along the line-did a better job with only 48 people at a cost of $43,000.
C.T.V. did the job for roughly one tenth the cost and with one tenth of the personnel used by C.B.C. Probably the C.B.C. could have held its own convention in Toronto at the same time and it would have been an impressive one with all those people present. But it is not good value for the taxpayers' money.


J.-H.-Théogène Ricard: What are you going to do about it?


John (Jack) Davis: This type of thing should stop. I now wish to deal with a few projects out west. I personally worked hard to get the federal government to build a new crossing over the harbour in Vancouver. Finally, the National Harbours Board and the Department of Transport-


Mr. Scoil (Danforth):: Would the hon. member permit a question?


John (Jack) Davis: I would like to finish this example.


Reid Scott: It is on the C.B.C. I do not want the hon. member to get sidetracked from it.


John (Jack) Davis: I will answer your C.B.C. question.


Reid Scott: Now or later?
October 5, 1967


John (Jack) Davis: Later. Now we are going to have a federally financed crossing built over the harbour in Vancouver but the costs will be substantially, if not totally, repaid by tolls. The costs will be defrayed substantially if not totally by the users of the facility, with the federal government merely acting as a banker just as it does with respect to housing. This is fine. The user knows what he is getting and what he is paying for it.
In this connection I point out that the people of my riding, who number 150,000, look with some envy at the people of Prince Edward Island. The people of Prince Edward Island, whose population is 105,000 have been promised that a crossing will be built between the mainland and Prince Edward Island. It may well be a causeway. This is an obligation of the Canadian people that dates back to confederation. I think all of us agree that the people of Canada should shoulder the cost of a good, adequate, but economic means of transportation and communication between Prince Edward Island and the rest of the country. This is agreed, but I would like to be assured that we all get good value for our money.
I have seen various estimates of the cost of a causeway to Prince Edward Island varying from $100 million to $150 million and maybe more. I might point out that there are other ways of getting people and goods backward and forward across water. On Vancouver island we have 330,000 people, three times the population of Prince Edward Island. There are greater distances involved. Far greater tonnages of goods and numbers of people move across Georgia strait than between New Brunswick and Prince Edward Island, and we do this with a capital investment of less than $70 million. Approximately 5 million people moved backwards and forwards between the mainland and Vancouver island last year, well over 1 million vehicles, freight cars, goods of all kinds in bulk and in packages and all this, as I say, for a capital investment of less than $70 million.
I know that the federal government looks at alternatives quite seriously. If a mixture of public and private enterprise can do a job on the west coast of this order of magnitude for a capital investment of $70 million, then it should also take another look at the causeway proposal and the alternatives to it. In fact I expect the government to take a hard look at the alternatives. The government must see if a causeway will last almost indefinitely with little maintenance because in that case possibly the benefits would exceed the cost in the 27053-1801
The Budget-Mr. Davis
long run and so a causeway could still be the answer.
[DOT] (4:io p.m.)
I want to be sure, however, and know at first hand through seeing the arithmetic, that the right decision is being made. I do not wish this just for myself. I want the people of my riding and the people on the west coast to know this. One of the things they grumble about is investment of this nature where they believe the federal government is engaging in give-away programs merely to buy votes. Obviously, from the result of the last federal election, causeways do not buy any seats in the House of Commons, although they may-still be important in the eyes of some people.
Then there is the matter of the coal subsidies. Much has been made of this. I am glad to see that in the blue book they are down by about $3 million in the estimates for this fiscal year. This is a move in the right direction. I do not like subsidies. I want to see the subsidies used in the movement of coal from western sources in the prairies and British Columbia to the coast eliminated. All this coal is moving to Japan for the steel and power industries there.
I do not believe we should be subsidizing exports in this way, especially exports of a non-renewable resource. I have been told that the Japanese do not want coal on the basis that there is substantial government support because the government in the country of origin might pull its subsidy out some day and they would be caught with a bill which they would have to pay for many years after. I think that in order to trade with the Japanese in respect of coal we should do it on a businesslike basis without subsidy, as private enterprise would do it.
I gather that one of the terms of the General Agreement on Tariffs and Trade and one of the understandings among nations in respect of the promotion of more trade throughout the world is that countries should not subsidize their exports in this way. This is one area in which Canada really has not been living up to the principles of the General Agreement on Tariffs and Trade. I believe it is good policy to phase out the subsidies on coal for export which moves from our western coal mines. As a member from the west I think I can speak for many western people on this subject. I know that the great majority of the people in my part of the world would be glad to see these subsidies phased out. Here is another place where

October 5, 1967
The Budget-r-Mr. Davis the government can save some money and be businesslike as well.
I should like to refer now to the matter of atomic energy and research. In 1961 I had the temerity to appear before a committee of this house on research. I suggested that benefit cost studies be carried out on a nuclear power program in this country. I suggested that one of the questions which should be answered is what should be the appropriate level of research in the broad area of nuclear power production. At that time I suggested that the $40 million budget be cut back and that some of the cut-back might be used in other areas of research. I could be wrong. But I would still like to see a benefit cost analysis done on our present program in an effort to see whether the benefits exceed the cost, allowing always that there is some uncertainty about whether our reactors will be the best in the world and whether nuclear energy will in fact be cheaper than certain other alternative sources of power.
The budget of Atomic Energy of Canada Limited is in the order of $70 million this year. Thus far we have spent about half a billion dollars on nuclear research and development in respect of Atomic Energy of Canada Limited and its related activities in this country. Half a billion dollars is a lot of money. It could go a long way toward buying many alternative benefits and paying for other research. I am not saying the money is misspent. We have a first class reactor and possibly a world leader; I hope it is, but this has yet to be proven.
Must we continually go on pumping money into research in this country at the rate of $70 million a year? It is interesting to note that the United Kingdom finally has decided not to keep in the running in the area of jet aircraft development. This program became quite expensive. They did not drop out as dramatically as we did in respect of the Arrow program, but they found they could not compete with the subsidized jet program of the United States. Now the United Kingdom is wondering whether it should do the same thing in respect of atomic energy.
Why should we not do a good cost benefit analysis in respect of the atomic energy program in this country so that we can either be comforted in the knowledge that we are spending money on the right scale or be informed concerning the right order of magnitude of any cut-back? Although I was a scientist at one time, I am not one of those who believe that a scientist is any different from anybody else. He likes to run his own

empire and have more people working for him. He is no different from anyone else; he is dedicated and wants to do a good job. But he lacks perspective and he is the last person to ask how much money should be spent on his program in the public interest.
The Science Council of Canada recently made a recommendation, or at least a meaningful reference, to a project called I.N.G., the intense neutron generator project. It is rather fond of this project, as is Atomic Energy of Canada Limited. At page 12 of the first annual report of the Science Council of Canada, 1966-67, we find that these-
-research facilities would cost over $150 million to build, spread over a seven-year construction period, and that the operating budget in succeeding years would be over $20 million per annum.
This might be fine but we would be putting a lot of eggs in a single basket. I would rather see ten separate projects costing $15 million and ten separate projects with operating charges of $2 million a year paid out of the federal treasury in respect of experiments related more closely to the processing of our resources. This alternative of carrying out different researches with different research teams, different research leaders and so on, a variety of programs rather than one big one or a very few big ones, I think is sound. Certainly it spreads the risk. I believe it is economically defensible and fits in better with the regional development of this country in that we would have research scattered regionally across Canada and not situated in one spot at the centre of our great nation.
In respect of social security, I think our social security program is excellent. I believe a great many measures have been brought in in respect of which we can all take pride. These are measures which Canadians are gradually coming to understand. But for the time being at least we have gone far enough with expensive programs. I was therefore glad that the Prime Minister said in an interview with Mr. Ross of the press gallery, as reported in the July edition of Maclean's:
-we've pretty well established what I have called the basic foundation of social security. From now on, we will improve and refine rather than extend.
Personally I was very much heartened by that comment, as I am sure many other people were as well.


The Acting Speaker (Mr. Rinfret):: Order. I regret to interrupt the hon. member for Coast-Capilano but the time allotted for his speech has expired.
October 5, 1967


Some hon. Members:: Go ahead.


The Acting Speaker (Mr. Rinfret):: Does the hon. member have unanimous consent to continue his speech?


Some hon. Members:: Agreed.


John (Jack) Davis: October 5, 1967
The Budget-Mr. Davis process we will improve our productivity. The Economic Council of Canada has been harping on the question of productivity, and well it might. We need to improve our output per man-hour. We can do this if people move to areas of greater opportunity, to growth areas with new industries. In these areas the latent abilities of people could really be put to work.
There are many initiatives which I should like to see the federal government take in the months and years ahead. I should like to see us not only set up a department of urban affairs or a department of housing and urban affairs, or whatever the title may be, but one which would deal with more than just being the banker for people who need housing. I should like to see the federal government enter even more into the planning process with the municipalities.
I should like to see such a department help to solve not just the housing problems of people but their transportation problems, their sewage disposal problems, and so on. I should like to see the department deal with the provision of services primarily through its banking function. In effect, the money would be lent and it would be paid back by the users. It would be directly related to the value received. I think this is the businesslike way of doing things and I should like to see the federal government act more in this way.
Central Mortgage and Housing Corporation and the National Housing Act of this country have been great successes. These were federal initiatives in an area which the constitutional lawyer has always said was reserved to the provinces. Ottawa took the lead in the early 1940's. It established a building code. Many progressive municipalities adopted the code. Progressive municipalities, provincial governments and private organizations have joined in creating facilities which would not otherwise have existed. Shelter has been provided for people of different incomes and in all parts of the country. This has been all to the good.
In respect of transportation I should like to see the federal government do what has been done by the federal government of the United States. That government has built great highways, throughways, connecting streets and so on through a special fund. This fund has been developed by imposing a tax of roughly one cent per gallon on gasoline and diesel oil. The tax money accumulating in the fund is paid out to municipalities in order that they may build highways, throughways, connecting streets, etc. The federal authorities in the

United States make sure that there is adequate planning and they often help the municipalities to plan. Once the plans are agreed upon the federal government of the United States, through this fund, puts up as much as 90 per cent of the capital cost of all the new facilities they need.
We could at least go 50-50 with the municipalities, or the municipalities and/or the provincial governments. The user of these facilities the man paying the one cent a gallon tax, would be seeing the results of the tax turning up in terms of more efficient streets, better highways and less time lost in transit. I am sure he would get value for the money paid in the form of this tax. He would get value in the form of a lessening of the time taken to travel, reduction of the wear on tires, brake shoes, and so on. I am sure he would see a reasonable relationship between this tax and the facilities progressively made available to him. He would also see an account that would be in balance.
In putting such a program into effect we would be relating benefits much more directly to costs. This is the type of program that we need. We need it, by all means, with the help and blessing of the provinces, but I for one would not drag my feet and wait indefinitely for all the provinces to get on this bandwagon because, as the Economic Council of Canada has so clearly pointed out, the urban problem, the great movement of Canadians from outlying areas into our big cities, is going to be with us a long time.
We are reaching the point where 80 per cent of our people will be living in the great metropolitan areas. The figure will perhaps be 85 per cent by the turn of the century. So let us have a department that looks ahead in trying to solve the biggest single problem that we face. Let us have not just departments dealing with rural affairs and matters like ARDA and so on, praiseworthy as they may be, but a department that deals more with the really big problems of the future, problems that will involve many more people who will have even greater difficulties adjusting themselves to the circumstances in which they find themselves.


Mr. Herridge:: Mr. Speaker, would the hon. member permit a question?


John (Jack) Davis: I am just coming to the end of my remarks, Mr. Speaker. We need to tie benefits to costs. We need a more meaningful accounting of our economy. I also believe that we need-I know this is not the opinion of the government and it does not appear to
October 5, 1967	COMMONS
be the opinion of the Economic Council of Canada-guide lines in instituting such a program. I do not mean rigid guide lines laid out in legislation but the frequent reiteration of what is reasonable in respect of wages, what is reasonable in respect of price increases.
I believe in a modest degree of inflation, not inflation that continues indefinitely but perhaps 1 per cent or 2 per cent a year, in order to keep the economy buoyant and growing.
[DOT] (4:30 p.m.)
But I do not believe in inflation that is up in the 5 to 10 per cent bracket. An inflation of 1 per cent per year, accompanied by a 2 per cent per annum increase in productivity, will tolerate an average wage increase of 3 per cent a year or at the most 4 per cent a year. Our economy cannot tolerate wage increases or price increases of more than 3 to 4 per cent a year on the average without genuinely affecting those who rely on their savings or those on fixed incomes who are bound to be hurt by inflation in any case but are badly hurt by inflation that is running away.
The main message I am trying to get across is the need for a better accounting of our income and our expenses. I would more closely relate revenues to expenditures. I would do this on a program basis. I would want to be sure that benefits exceed costs and that we are going to engage in programs which have the highest relation of benefits to costs, not just more benefits than costs but a benefit to cost ratio of two or three to one. There are many opportunities in this country which will turn out to have benefit to cost ratios of that order of magnitude. We need to grasp them and we need to be more businesslike.
I was glad to hear the Minister of Finance say that he is cutting back, that he is determined to have a balanced budget, at least balanced on a national accounts basis, next year. We are growing very rapidly. Our economy has a high head of steam on but it needs at least a balanced budget, not a deficit budget, in national accounts terms if we are not to add to the fires of inflation.


Herbert Wilfred Herridge: Would the hon. gentleman permit a question? I was most interested in his thoughtful speech but he did appear at one time to suggest that the drift to the cities was inevitable. This is something which is completely against my own personal philosophy. Does he not think we could use the ARDA program to decentralize industry and build up the smaller towns and communities,
DEBATES	2847
The Budget-Mr. Baldwin provide better living conditions for these people and get greater value for the dollars spent in that way rather than make the tremendous expenditures required in developing services as these other centres grow and the horde of parasites with them?


John (Jack) Davis: The World Health Organization and many other organizations, including the Economic Council of Canada, are continually showing us projections indicating a gravitation of the majority of people toward big metropolitan areas. I think this will go on for a while and we should face up to this problem. However, I agree that government at all levels should do its utmost to make sure that people live in pleasant surroundings. I would like more people to live in a community or a riding such as I represent where we have forests and mountains at our backdoor. This is marvelous, but it will not come over night and in many areas it is a very expensive proposition.


The Acting Speaker (Mr. Tardif):: The hon.
member for Compton-Frontenac. I apologize to the hon. member for Compton-Frontenac, but the next speaker is the hon. member for Peace River followed by the hon. member for Compton-Frontenac.


Gerald William Baldwin: Thank you, Mr. Speaker. I also apologize to the hon. member for Compton-Frontenac for making him listen to me.
Some remarks have already been made in the house in a more formal way with regard to the changes in the ministry. I was not present at the time and I do not intend to say anything on this subject although normally I would. The only suggestion I have to make along these lines, which I hope will be passed on to the Prime Minister (Mr. Pearson), is that when further changes are made I hope they will involve the shifting sideways of some of the present ornaments of the cabinet benches. Never have I seen so many gloomy and dejected faces peering at us, even with the problems posed by the lighting system here, as we have seen inhabiting the treasury benches in the last week or ten days. I do not resent their gloom. Never has a group of men worked so hard and toiled so diligently and so brilliantly to earn the right to be gloomy, and I give them this privilege. They are entitled to it, but it would be nice if they shifted sideways a little once in a while.
Yesterday the Minister of Finance (Mr. Sharp), in his second contribution to the budget debate, indicated certain views with
October 5, 1967

The Budget-Mr. Baldwin regard to the position of the economy and the position of the government. In one instance he referred to the great attempts being made by the government to curtail expenditures in the estimates for the coming year. My good friend, the learned and hon. member for Edmonton West (Mr. Lambert), has already dealt with this subject. I want to make another reference to it at this time because I think it is very important. I agree entirely with what the hon. member for Edmonton West said but I think there is more to the matter. The Minister of Finance would have us believe that a great melodrama takes place at the meetings of the Treasury Board, that, like Horatio at the bridge, the minister lays about lustily with his broad, red pencil, mutilating and destroying various estimates from time to time, and that the floor of the Treasury Board room is littered with the corpses of these projects. I wonder whether this is so. It seems to me more likely that something entirely different takes place, and I might give my view of it very briefly.
Let us say the Secretary of State (Miss LaMarsh) is discussing her estimates. The Minister of Finance would say: "Judy, I see $1 billion for the new five year project of the C.B.C., for the anticipated five year program. You know our new rules and regulations concerning economy. I think we have to cut you down somewhere. I see one item of $25.67 in your estimate of $1 billion for whisk brooms to brush dust off the clothes of the dignified commentators and their guests on the program "Twenty Million Questions". I think we should cut out this $25.67 and when that has been done we can say you have conformed to the new regulations."
Let us say that in another instance the Minister of National Health and Welfare (Mr. MacEachen) is asking for $900 million for medicare and other welfare programs for the next year. An item might be included there with respect to which the Minister of Finance might say: "Allan, I see an item for $5,400 covering the services of a filing clerk to file newspaper clippings of speeches made by your fellow Nova Scotian who has recently arrived in Ottawa. Having in mind that we may not need to employ this filing clerk at full capacity, possibly we could dispense with this item of $5,400."
I believe this is the kind of discussion which takes place at a meeting of the Treasury Board, but we are ready to wait and see. I suggest that the minister and the government make every possible effort to

bring down these estimates as soon as possible and let the standing committees examine and compare them with the programs of previous years so as to see to what extent there has been a real effort to reduce expenditures to manageable proportions.
I must say I was a little worried by the statement of the Minister of Finance when he indicated yesterday that an attempt would be made only to reduce the growth in expenditures. I took a little time and went through the estimates of several of the departments. Four of the departments in which changes have taken place have dealt with comparable projects, namely, the Departments of Labour, Manpower and Immigration, Secretary of State and Citizenship. My calculation is, comparing the actual expenditures for the fiscal year 1962-63 with the actual expenditures for the fiscal year 1966-67, that there has been an increase of over $400 million.


Mitchell William Sharp: How much was it between the years 1958 and 1962?
[DOT] (4:40 p.m.)


Gerald William Baldwin: I am not here at this stage to do anything else than deal with the efforts of the government and the budgetary proposals of the Minister of Finance and to see whether or not the government has justified the faith which the people of Canada put in it. It seems to me that it has not. The fact is that there has been an increase of $400 million in those years. I suggest that these are the kind of programs that the standing committees of the house, exercising their functions intelligently and responsibly, should examine so as to see to what extent there has been a real effort on the part of the government to reduce the programs, as has been suggested by the Minister of Finance.
Apart from that, Mr. Speaker, and getting to the heart of the issue here, this government stands charged that it has mismanaged both its affairs and the affairs of the country, particularly in the realm of the economy, and not only has not done the things it should have done but has done things it should not have done. If I could, Mr. Speaker, I would call as witnesses here to substantiate my allegation all of the people in the country who over the last year to year and a half have been trying diligently to secure for themselves adequate housing accommodation. I am not going to go into that question. We have had an interesting debate on it as well as one or two motions and some questions. I think these people alone, this long, dreary queue of pepple, who in their essential and reasonable
October 5, 1967

This is the sort of thing which every small businessman and farmer has to contend with. When a farmer harvests his grain, when a businessman looks at his year-end statement, he asks: How much money shall I put into a new house, how much shall I plow back into the business or farm? It is important for the government to think this way.
Taxes and appropriations do not create wealth; they redistribute it. The only way to create wealth is by the application of labour to natural resources. That is what the government ought to have looked at for a long time. We can point to the record of the previous government in projects such as roads to resources program. We can point to the imaginative proposal-vocational training schools-which was advanced by the hon. member who is now acting leader of this party and was then the minister of labour. We can also point to one of the brightest jewels in our party's diadem, our party's contribution to national development, the Pine Point Railway. It was brought about in the face of bitter obstruction from the then opposition which now forms the government. Projects such as these create wealth. This project created a great increase in national wealth at no real cost to people.
One fault which can be attributed to this government is its refusal to recognize and deal with this aspect of the use of our national income.


Mitchell William Sharp: No government has done more for education than this one has, and education is most important.


Gerald William Baldwin: We have heard the minister already, Mr. Speaker. No doubt we shall hear from him again. The charge I have levelled at the government will hardly be met by extraneous observations of this kind.
I really enjoyed the words the minister used in his defence. He said that we must manage prosperity; earlier he had said that we must pace the economy. I delight in these words. As I recognize them, they amount to an admission by the government that we have a serious problem of inflation and we must try to do something about it. I go along with the minister on that score.
The minister's speech yesterday, in which he tried to defend his policies, reminded me of the surgeon who after an operation talks to his colleagues and says: "Yes, the operation was a tremendous success, it was highly technical, everything was fine, but the unfortunate patient died.'' That was the type of defence the minister offered us yesterday.
27053-181 j
The Budget-Mr. Baldwin
The government is flustered and annoyed by the criticisms. It counters by saying, "Well, what would you do if you were us" or "why did you vote for such and such a project?" That is not germane at this time. The government sought for and secured from the people of this country the power to govern. It must govern. The collective conduct of the government is always a legitimate issue because it involves the assessment to be made by the public as to the government's fitness to carry on governing. That fitness is to be decided at an election.
I know that the position is difficult. The options open to the government have now narrowed. Perhaps I might make one parting statement in this regard. The government's actions might be compared to those of the captain of a fishing schooner. As you will notice, Mr. Speaker, this party has taken on a somewhat more nautical aspect in the last few weeks. I am speaking of the captain of a fishing schooner who, in the face of radio warnings of storms, in the face of storm signals, nevertheless insists on taking his ship out to sea. When he is caught in a hurricane he whines, whimpers, wrings his hands and says: "What are we to do?" That is the position of the government today. Of course, the captain can lighten his vessel and trim his cargo. He may do a number of things.
[DOT] (5:00 p.m.)
I must say something about these things because I believe hon. members are very disturbed by the statement made by the minister yesterday, which appeared to constitute a warning that steps would be taken to increase taxation or otherwise to affect a cooling off in the economy. This holds out the spectre of artificially created unemployment as a means of relief from the difficulties in which we find ourselves. I reject such a proposal. While it is true that the Economic Council of Canada did not approve the use of guide lines too strongly, may I point out that its comments in this regard were contained in the third annual review published in November, 1966, almost a year ago. To condense what was said in the report I point out that, the council suggested there were a number of measures which might be adopted. It did not urge the placing of too great reliance upon an incomes policy or a guide lines policy, under normal conditions, though it made it plain that if conditions continued to worsen it might be necessary to adopt such a course. Chapter 5 of the review issued in 1966 contained a number of proposals connected with
October 5. 1967

The Budget-Mr. Baldwin monetary and fiscal policy, the possibility of using an incomes policy, and so on. A number of alternatives are indicated.
As I consider the government's actions, I do not think much has been done in the field of guide lines. I would refer hon. members to page 43 of the fourth annual review where the Economic Council had this to say-and I am sure that in making this statement the council intended it to be taken in conjunction with what had been said in the third report with regard to guide lines. I quote:
There is a clear possibility that strong underlying private demand pressures, accompanied by rapidly rising government expenditures, may exceed the capacity of the economy to accommodate them, and thus result in unacceptably high price and cost pressures over the medium-term future. This possibility is one which requires special attention in the present circumstances.
I suggest this is a direct invitation to the government to consider, among other proposals, the question of guide lines at this time. I know this presents a difficulty for hon. gentlemen opposite. I addressed a question today to the President of the Treasury Board (Mr. Benson) with regard to the implementation of the proposals made by the Glassco royal commission. If my arithmetic is right, there are still almost 120 recommendations of that commission which have yet to be implemented.
The commission made its report four and a half years ago. The recommendations were in the hands of the government when it took office in 1963. I think it is a sad story when we are told after all these years that 120 of its recommendations still remain to be implemented. How is it possible for the Minister of Finance, in the face of the figures I have quoted from the reports of the Bank of Canada and the Economic Council, to meet with labour and industry-
The Acfing Speaker (Mr. Tardif): Order. I regret to interrupt the hon. member but the time allotted to him has expired. Does the house give unanimous consent for the hon. member to continue?


Some hon. Members:: Agreed.


Gerald William Baldwin: Thank you. I assure the house that I will not abuse the generosity shown to me.
The position of the government is almost impossible in the light of its record with regard to government expenditures and its refusal to put into effect the proposals suggested in the Glassco report.


Mitchell William Sharp: The hon. gentleman knows that is not so.


Gerald William Baldwin: My arithmetic is based on the statement made by the Auditor General. Since his report that 151 of the proposals had not been implemented, 29 have been brought in. However, the minister can deal with this question later if he wishes to do so.
The credibility gap remains wide so far as the government is concerned. It is a form of hypocrisy-I use the word in its political sense-or at best it is colossal gall for the minister to go to the representatives of labour and industry and say: We want you to observe restraint despite our own bad conduct in the past. As far as I am concerned, I will attempt to do whatever has to be done to meet the serious situation which is upon us. I say this with regard to the proposals which the government may bring down.
Before I resume my seat I should like to refer briefly to the subamendment moved by the New Democratic party. I find it difficult to support, despite my sympathy for some of its objectives. In the first place, it is framed in such a way as to make it impossible for our own amendment to be considered. Again, the government has made it clear that it is intended, after briefs have been received, to bring down a white paper and initiate a course of conduct which will permit full and unabridged discussion of all the Carter commission recommendations affecting every aspect of taxation. I think that at this stage it would be premature to take such a position as the N.D.P. recommends.
Our attitude toward other matters dealt with in the subamendment has been made clear on other occasions. On the whole it seems to represent a piecemeal approach to our problems and one which I cannot support. For these reasons I intend to vote against the subamendment when it comes before us for consideration.
[DOT] (5:10 p.m.)


Mr. Henri Lalulippe (Complon-Fronfenac):: Mr. Speaker, I am pleased to have the opportunity to take part in the debate on the budget.
At the outset, may I say that a budget must necessarily either balance or tip over. The more we advance, the more we apply the principles of our present-day economy, the more we throw our budget out of balance. The more we grant salary increases, the more we levy taxes; the more we increase the rate of interest, the more we unbalance the budget and our economy, and the more we increase the cost of living. The more the cost of living

October 5, 1967

increases, the more the value of the dollar goes down. It is said that the value of the dollar should be brought back to par, and all the rest. When will the value of the dollar return to par, if we keep on running the administration of the country like at the present time?
Mr. Speaker, it is a pity to see and hear the Minister of Finance of Canada (Mr. Sharp) declaring in the face of Canada and the whole world his professional incompetence.
The minister admits his incapacity to deal with the present problem, although it is easy to solve. If the amendments to the Bank Act which were proposed at the previous session had been passed, the budget would now be balanced; Canada's debt would be repaid within 10 years, everybody's taxes would be reduced by 50 per cent. I can prove it. As a matter of fact, I did it before.
So, our memorable centennial year is marred by the greatest administrative failure, in the second most prosperous country of the world. Is it not said that Canada is the most prosperous country after the United States? If we are that prosperous, how is it that we are unable to balance our budget? Why are we unable to stop the rise in the cost of living and the devaluation of our dollar? Why? If war broke out tomorrow morning, the minister would find solutions to all the problems.
I would like to speak less harshly to the minister, but, as a taxpayer and a member of this house it is my duty to tell him things which I do not like to say. However, these are actual facts that must be pointed out. The world fair in Montreal simply showed, for all the world to see, the inability of our Minister of Finance to make at least a coherent speech, to provide logical explanations and to refute the illogicality of our financial situation, as reflected by increased production, continuing progressive deficits, a tremendous and fantastic capitalization, envied throughout the world but also by perpetual debts and deficits within the administration and at all levels of government. The accounts of the provincial governments, municipalities and school boards show large deficits-a really shameful situation in a country such as Canada.
The profits made by large companies are increasing, there are even cases of a capitalization of $20 billion on a $62 billion production, and yet it is impossible to balance the budget of the country. It is impossible to give
The Budget-Mr. Latulippe some encouragement to these who lack the very necessities of life and get deeper and deeper in debt because of their inadequate income.
The higher the taxes, the smaller the purchasing power of the taxpayers, who then find it increasingly difficult to make an honest living in a country overflowing with wealth.
When the government must refund $350 million worth of old debts at 3| per cent, it can find nothing better to do than to borrow the same amounts anew at 6 per cent, that is to cause a 60 per cent increase over a period of 26 years. Shame. Curses. The mind flounders. Unspeakable behaviour or misconduct on the part of a human being who bears the title of Minister of Finance.
"Let us make man in Our image, after Our likeness", said the Great Master on the first page of the Bible. It was certainly not the face of the Finance Minister of Canada which He saw then in His divine wisdom.
Indeed, Mr. Speaker, God's administration shows better balance and more majesty. The sun, the moon, the stars, the earth, the rivers, the oceans, all that runs better than the words of the Minister of Finance when he mutters his undecipherable labyrinths of economic theories that seem learned because they are incomprehensible.
The minister will not stoop to the present system. He does not want to understand the simplicity of the system; he prefers to understand complexity and try to understand whatever is complex or unsoluble.
The people are aware of the failure, of the administrative failure of our governments. And I say that for the Conservatives as well as for the Liberals, because when the Conservatives were in office, they did nothing else than redeem bonds at 2, 3, 4, 4J and 5 per cent. Increasing high finance, making the rich wealthier and the poor poorer, the Conservatives did that as much as the Liberals. Whichever party, there is no difference at all. We are facing the same situation and the same problem when the government changes, the only thing that is done is to change the driver. The car is worn out and should be replaced; but instead of changing it for a new model, the driver only is replaced. Nothing more is done.
What will the new Leader of the Opposition do in the present situation with our pile of debts and deficits, with an upside down, unbalanced budget and economy? There is
October 5, 1967

The Budget-Mr. Latulippe nothing more to understand in that economy. What will he do about all those things?
It is said that a change of political party will change all that. The whole system needs changing, Mr. Speaker, and to change it the Liberals and the Conservatives must get it into their heads that they must deal with the problem. To solve it, there is no other way than grappling with it and overcoming it.
We pay $3,600,000 for a royal inquiry on taxation, we receive a 2,600 page report where it is shown that large corporations must be taxed at the same rates as individuals. But the Minister of Finance prefers to listen to the bankers, manufacturers and brokers associations as well as the chambers of commerce, which utter their unanimous objection to the conclusions of the Carter report. Should the people come and ask the minister to support and implement the decisions contained in the Carter report, he would turn his back on them and pretend not to hear. Carry on, great learned gentlemen, but remember that the Lord is watching you and that the people see you.
Deficits, unbalance, mismanagement, shame before the world, all that does not affect us any more. Our friends pile up billions, no kidding, more than $20 billion in capitalization on $62 billion in production during the year 1967. Therefore, who piles up those billions out of the people's poverty? No one else but the directors of 800 large corporations who make more than $1 million every year in declared profits.
[DOT] 15:20 p.m.)
Why such surpluses and profits on the one hand and such deficits and debts on the other? There is only one possible answer, that is the Minister of Finance is incompetent or an accomplice, clumsy or dishonest. He can choose the qualification which he prefers since he chooses the means available to balance the Canadian budget and distribute the benefits of the national economy taking into account the individuals, families and companies, the income, expenses and profits, taxes and reserves, employers, employees and private citizens, factories, shops and kitchens, capital, labour and the right of citizens who have no capital and no employment.
The Minister of Finance no longer deserves any indulgence, because he is responsible for the situation. He is responsible for everything that is done within the government because he runs the government. He is responsible for


the resulting damage and he is guilty of pursuing a fiscal policy which is leading us to final disaster, when he could prevent it.
May I have the attention of the house for one moment? Can any of the 265 members or ministers of the crown consider the following facts with unconcern?
In Montreal, workers earning $8,000 are asking for $11,000: flat refusal; strike. In Quebec city, professionals earning $32,000 are asking for $44,000. Refusal, strike. In Ottawa, capitalists making profits of $37,500 are asking for $60,000: full agreement without any discussion and automatic extension for 26 years, if you please. And that is the renewal of the loan of $225 million, that was granted over and above the other one for $235 million.
Yes, Mr. Speaker, one million dollars at 3| per cent; that is $37,500, but at 6 per cent, it represents $60,000. Therefore, our Canadian millionaires who already made $37,500 a year on each million dollars loaned to the government of the people will now get $60,000 for that same million, without doing a stitch more work.
That is where the Minister of Finance should look and see, and act by applying sanctions. Go ahead. You represent the people. The people can just as well pay $60,000 as $37,500 to its millionaires. But, who pays for elections, publicity, university professors, speech writers, perhaps even the speeches of the Minister of Finance?
If a good bus driver asks for $3,000 more, he is roundly denounced, and if a professional asks for an increase of $12,000, the outcry is somewhat smaller, but if a millionaire asks for an increase of $22,500, the Minister of Finance immediately gives in with an elegant smile and hands over the gift quietly, without anybody knowing about it. Millionaires must not be exposed to the misinterpretations of the people, their newspapermen, trade-unionists and other defenders.
If there is such disparity in the treatment of the classes of our society, the trade-unionists who make $8,000, the professionals who earn $32,000, the capitalists whose $37,500 are suddenly increased to $60,000, we should also think of the other citizens who pay unemployment insurance and earn less than $5,400 a year, not enough to pay income tax, or who do not earn any income at all but wb<' must
October 5, 19S7	COMMONS
nevertheless pay taxes in order to take care of the interest on the $28 billion debt which the government must pay, stuck as it is with such a Minister of Finance. Not only the present Minister of Finance but all before him have been that way. None of them has ever balanced the budget for years and years. No other solution has been found, no other means than building up masses of deficits and increasing the debt of the people and impoverishing the population, thus reducing the purchasing power of the citizens.
Do you want more follies due to our Canadian finance ministers? One thing should be recalled in this abnormal situation of our finances. We have lost control and we do not wish to take it back because we do not have it yet on our shoulders. We do not have it yet in our minds, that control of the country. But it is still time to get it back. There is still time to take it back and follow the right path. Let us aim properly and not miss the mark.
Mr. Speaker, no purpose is served by speaking any longer in the house. I am simply asking the Minister of Finance to grant me a private interview. I will meet him with pleasure. I will give him face to face the explanations. I know it would be profitable to him and that he would be satisfied just like the Canadian people.
Pending his invitation, in view of the uneasiness indicated by strikes, by inflation, by the deficits of our public administrations, in view of the increase of interest rates, the increase in workers' wages and the increase in government taxes which all contribute to the increased prices and higher cost of living even for those who have no income, no work and no capital, I would recommend that you read over the speech I made on September 9, 1966, at the time of the C.N.R. employees' strike, a strike which necessitated a special session of parliament last year. Look over also my speech of February 15, 1967, in this House of Commons on inflation of capital and deflation of purchasing power for more than half of our working population. Look over again the brief I submitted to the banking committee on October 25, 1966, which was officially delivered only on March 16, 1967 in the 53rd and last issue of the reports of the committee on finance, trade and economic affairs.
These three public and official documents by themselves represent an over-all view of
DEBATES	2855
The Budget-Mr. Latulippe our economic situation, of the main uneasiness, of the major imbalance between the various elements of our national economy and simultaneously indicate efficient means to set things right rapidly without interfering with the basic structure of our monetary, economic or political institutions.
If it is recognized that the conventional and orthodox fashion of carrying out our public affairs has led Canada to a disastrous situation, as stated by the Minister of Finance it certainly proves Canada's economy must be considered anew.
Instead of always favouring the financial tycoons or the members of our powerful unions, some day or other, and the sooner the better, we will at least have to consider our economy, not in the light of capital and labour but also and above all, in the light of the needs of the many citizens who have no income, no work and no money.
The minister and the hon. members know that, in Canada, one third of our people who are able-bodied, live on social welfare at the expense of their fellow citizens. It is like robbing Peter to support Paul. And this has reached such a point that those who are working, have so many deductions from their salary that they are no better off than those on relief.
[DOT] (5:30 p.m.)
So, Canadian people get discouraged, and this explains why there is so much dissatisfaction in Canada. As you know, raising salaries and the cost of living does not solve the problem. It is also well known that unions look out for themselves by demanding all kinds of salary increases, but this only raises the cost of living. The problem is never solved. As time goes by, things become increasingly difficult for others who do not belong to unions, who are unemployed. As you know, there are 7 million workers in Canada. Of this number, there are close to 2,400,000 people, I think, who do not earn enough money to pay income tax.
So, Mr. Speaker, the situation is more than critical. Those who pay income tax are a minority; in brief, it is always the low income workers who put money in the pockets of people in the higher brackets.
Indeed, every increase in interest rates, that is allowed benefits the big fellow at the expense of the little fellow. That is the kind of government we have, the kind we always had, because we never had any men who
2856	COMMONS
The Budget-Mr. Latulippe really worked for the people. We represent the financial community, of course, but we also represent the rank and file. This we should never forget, although we unfortunately have forgotten it in the past. This is the main difference between the new approach in regard to the management of our present and future economy and the old approach, the conventional and orthodox method which has put us in a most disastrous situation.
This is not the time to panic. Pretending that nothing can be done would not get us anywhere. Let us think this way: our methods have been good and efficient for many years and in much more difficult times, but today they are obsolete, out of date. They must of necessity be renewed, adapted to the new circumstances, transposed to the new economy which is obviously required.
Instead of remaining bogged down in our old thoughts, our old methods, our old customs, let us adopt a new methods of distribution which will meet the essential needs of each and every family in Canada, on the basis of our actual superabundant production, even if the yearly rate of growth of our national capitalization has to be somewhat reduced.
All our economists, engineers and advisers have long enough emphasized productivity, capitalization, financial, commercial and industrial concentration; the time has now come to balance all those achievements against the needs of people who cannot enjoy them, who cannot participate in them, simply because the methods used in the distribution of the purchasing power have remained tied to the old techniques of capital and labour, which suit only 7,400,000 citizens and ignore the 13 other millions dependent upon our total population of 20,400,000 Canadians who have the right to live.
Now, Mr. Speaker, I should like to read again at this stage a small portion of the speech made by the hon. Minister of Finance and Receiver General (Mr. Sharp), which can be found on page 2731 of Hansard, and I quote:
I am concerned about these high Interest rates.
I regret very much that interest rates have had to rise. They have been rising throughout the western world. They have been rising in industrialized countries and in the underdeveloped countries of the world. As I said in my statement on motions today, last week I was in Rio. There, I had the

DEBATES	October 5, 1967
opportunity to meet all the ministers of finance of the world. We met many times in large groups and in small groups. One of the main problems we discussed was the problem of interest rates. As I said jokingly to one of my friends today, it was pleasant to meet with ministers of finance from around the world because at least we could console one another. We looked at this problem; we examined it carefully and at length for a week. There was not one of us who could come up with an easy or early solution to the problem of high interest rates.
But I think that the minister had forgotten to take a Creditist along.
Now then, it is impossible to argue, it is impossible to go on with a system such as that which rules the country at the moment. I said, right in the beginning, that it should either balance or tip over. Well, it is about to tip over since every step taken by the Minister of Finance is helping to make our economy tip over.
When our economy tips over, it will be hard to set it back on an even keel and I wonder if it is the present minister who will have the courage to do so.
Now, why criticize and denounce the present financial system? Because it falls short of its aim, because it does not fulfill its purpose.
The purpose of the financial system, Mr. Speaker, is to finance the production and the distribution of goods to meet the needs. When it does that, the financial system discharges its responsibility, it plays its part; otherwise, it does not play its part, it does something else, in short it is out of character.
Well, the present financial system is out of character it does not perform its function, it does not reach the goals and purposes that it should. It does not reach its objective because there are public and private goods required by the people which it would be physically possible to supply but for the financial system's inability to finance production. On the other hand, there are goods to be provided to needy persons or families who are unable to have them, because the financial system does not finance consumption. Production is inadequately financed and consumption is still less financed because the consumer is denied his purchasing power.
Each time investments and all those related matters are mentioned, it is stated that we must obtain foreign capital, because Canadians do not have the necessary capital. Why, Mr. Speaker, do Canadians not have the required capital to invest in Canada, to develop our economy? Because the Minister of
October 5, 1967

Finance is overburdening them with taxes, and afterwards, the federal, provincial and municipal governments, as well as the school boards sell bonds and get hold of the money of those who have succeeded in making some savings. There is nothing left for private enterprise, then; yet, that is where there are shortcomings in our economy. That is where they do not see that there is something to be done, that they refuse to assume their responsibilities.
There are heavy responsibilities to be assumed. It is unfortunate that there are so few members in the house because I have many things to say. I shall, however, limit myself because I have spoken enough and because the Minister of Finance knows what to do. If he does not do it, it is because he does not want to do it or because he is so well bound that he cannot budge. There is something wrong somewhere. If he is bound, well, let us free him. It is up to us to free him.
Mr. Speaker, we should have financial credit. We should be able to finance all our production, and also every citizen who benefits from social welfare allowances-at least a third of the population is either idle or unproductive-should be put to work so as to contribute to production. In spite of the fact that many of our fellow citizens live at the expense of the others, thanks to social welfare-which means that they do not produce -we managed to reach, in 1967, a total production of $62 billion. We capitalized $20 billion and also a large percentage of the income-I had it here somewhere-with a $62 billion production-
[DOT] (5:40 p.m.)


The Acting Speaker (Mr. Tardif):: Order! I am sorry to interrupt the hon. member but his time has now expired.


Henry P. Latulippe: I will come back later, Mr. Chairman, for I do not want to take other member's time-


The Acting Speaker (Mr. Tardif):: Does the house give unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


Henry P. Latulippe: Mr. Speaker, I will not speak much longer because I want to give other members an opportunity to speak. If we grant additional time to all members, some who have something to say will not have any time to speak. Therefore, I will conclude my comments by telling the minister, once again, to look, listen and face the situation, and
The Budget-Mr. Lachance bring forth reasonable solutions, which will be good for the people, in short solutions which would enable our people to live decently, reasonably, and to develop fully in a country bursting with riches. The things we are now facing are unacceptable and people will realize it some day.


Mr. Georges C. Lachance (Lafonlaine):: Mr. Speaker, we have resumed consideration of the budget debate, interrupted June 6 last and, more especially, of the motion of the hon. Minister of Finance (Mr. Sharp) for the house to go into committee of ways and means.
After this motion, the official opposition moved an amendment which reads as follows:
That all the words after "That" be struck out and the following substituted therefor:
"this government has failed miserably to set an example of responsibility by its refusal to reduce taxation, by its reckless increase in governmental expenditures, thus contributing to the steadily rising cost of production to the great detriment of the Canadian economy and to the sharp increase in the cost of living, already overburdensome to the Canadian people."
Furthermore, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) moved the following amendment to the amendment:
That the amendment be amended by deleting therefrom all the words between the word "taxation" and the words "the sharp increase" and by substituting therefor the following words: "particularly its failure to revise the income tax structure so that a married couple with an annual income of $4,000 or less would not be subject to tax; its failure to remove the sales tax from building materials and supplies used in housing construction: and its failure to take any steps to deal with"
The end of the main amendment follows.
Yesterday, the Minister of Finance gave the house a summary of our economic situation as he sees it, followed by an outline of the revenue and expenditures and, finally, by a few remarks about the changes in the tariff rates brought about by the Kennedy round and many other matters.
The minister underlined satisfactory economic prospects with regard to employment and our balance of payments and he indicated also a strong demand in exports and consumer goods. All in all, the future was not cloudless but quite good, taking into account the increasing trend in prices and the cost of living.
The minister also told us that the most important problem was to manage our prosperity and that he did not anticipate a future
October 5, 1967

The Budget-Mr. Lachance reversal of the trend towards progress in our economy.
He implied that production was increasing at a normal rate of approximately 7 per cent and that we are succeeding fairly well in changing from the system of accelerated expansion of last year to the more reasonable rate of growth which has recently become noticeable.
I do not intend to summarize the minister's staiement, but I wish to stress his intellectual honesty and his frankness.
However, I read with anguish recently that the Vietnam war is giving rise to an international financial situation that cannot but concern us. That is why the government must unite with all other countries to try and restore peace in that part of the world.
Of course, restoring peace is not the only reason, but it is an excellent one in the framework of our present discussion.
The hon. minister endeavours to prove and suggest that the government is reducing the expenditures planned for the coming year.
I agree with this, but I favour above all the planning of priorities in expenditures. I should like to stress the importance of a few of these. I shall not give them in order of priority, but just mention them as they occur to me. To my mind, they are all important and deserve priority.
For instance, the extrapolation of Expo could be on the part of the rest of Canada, a gesture of friendliness and confidence toward the province of Quebec. There is no need to underline the outstanding success that celebration has had on the occasion of the centennial of confederation, but it is now coming to an end. Studies have been made on the future possibilities of Expo, and each and every one of us may have personal ideas on what uses it could be put to.
I feel that, in connection with reducing expenditures, priority should be given to the future of Expo, whether it is used for educational purposes-which I would favour-or touristic or any other purpose.
I trust the federal government, as it has done in the past for that demonstration, will continue to give its whole-hearted support.
To my mind, Mr. Speaker, priority should also be given to reform of our penal institutions and our judiciary system in Canada, so that we might solve rapidly the problem of rehabilitation of those who must pay their debt to society.

I have had the opportunity of discussing this matter several times in the house; it is one of my favourite topics.
[DOT] (5:50 p.m.)
Although the matter has been tossed around for a few years, I must say I still do not see being taken by the government in this area, legislative action of the kind that would provide for the suppression of criminal records, for instance, or the development of a rehabilitation agency for ex-convicts that would promote planned training in our penitentiaries and see that all civil service doors, be they federal, provincial or municipal, are eventually open to released convicts; in short, a humane penal reform that goes beyond prison stone walls.
There is another priority matter which could, I hope, avoid the steam-roller; I mean the field of education and manpower retraining.
Our economy being in progress, technology has been so perfected that it surpasses intelligence, perhaps not intelligence so much as the knowledge we have of the effects of technology; and there should be action for fuller integration of human activities, science and machinery.
To permit such an integration of technology and manpower, I think all possible means of education and manpower retraining should be promoted.
I must admit that the government has made some progress in that field, that legislation has been brought down, but it is essential that such legislation be pushed to the highest degree.
Generally speaking, there is also a whole educational project. The Canadian people have a high standard of living and the choice of education-


Henry P. Latulippe: It is all on credit!


Georges-C. Lachance: It may be on credit but it is based on the credit and the value of the Canadian potential, generally speaking, any educational project.
I am keeping for the end of this list, Mr. Speaker, the most complex problem of federal-provincial relations. A better distribution of jurisdiction in the tax field would be a powerful lever to solve our constitutional problems.
Mr. Speaker, on June 3 last, I had the opportunity of speaking before an audience which was not only particularly interesting but also interested in these problems of federal-provincial relations. It was at the closing
October 5, 1967

banquet of the second centennial of the College de Montreal at the Windsor Hotel.
I will spare the house the preliminary observations and come to some ideas I expressed at that time on the state of federal-provincial relations and the allocation of jurisdiction.
I said amongst other things:
The evolution of the human race and the new needs created by scientific progress require us to reassess our teaching methods and adapt them to the new needs. Personally, I am just as much in favour of eventual constitutional reforms to meet the new needs and the legitimate aspirations of the new generation.
Some are against too drastic constitutional changes and prefer a slow but progressive evolution; others are more in favour of a special status for all the provinces, which some are loudly requesting at least for the province of Quebec.
Personally, I believe that a careful study of the present political situation, of our constitutional documents and of our present and future needs will show the necessity of making some major changes both in the spirit and in the letter of our Canadian constitution.
After a hundred years, it is undeniable that the province of Quebec has become the fatherland of French Canadians and that, on that basis, it must give to all its French-speaking citizens the best possible means of subsistence and development, without forgetting, nevertheless, that other Frenchspeaking Canadians are scattered throughout Canada-
But after a hundred years, it is undeniable that it would be in the interest of the provincial and federal governments to reappraise and amend certain powers deriving from their respective jurisdiction to meet the economic and cultural needs of Canadians.
In short, it could be in the interest of the provinces to surrender to the central government, partly or entirely, temporarily or permanently, certain powers deriving from their exclusive jurisdiction and the same could apply to the central government with respect to the provinces.
And that is why, Mr. Speaker, I stressed as a priority problem federal-provincial relations with regard to the transfer of fiscal jurisdiction or of some jurisdiction, in part or in full, temporarily or permanently. I take, for instance, the problem of securities, of the various securities commissions. A hundred years ago, that sector of our economy was almost non-existent, and today, the exchange of securities is of capital importance.
The matter comes under provincial jurisdiction but, in my opinion, it should at least be under national jurisdiction or be considered on a national, if not federal, basis.
That is one example to prove how antiquated our constitution is and how much it needs to be amended, although that does not mean it must be completely changed from A to Z.
The Budget-Mr. Lachance
Now, Mr. Speaker, there is the problem resulting from the Kennedy round of negotiations. In one of the first speeches I made in the house in the spring of 1964, I expressed interest in the Kennedy round of negotiations which were to begin in the near future.
I greatly favour free trade and, in respect of the Kennedy negotiations, it would be interesting to read what the Economic Council of Canada has to say in its fourth annual review, a copy of which we have received only a few days ago.
I do not want to quote too long an excerpt but on page 252, here is what it says:
Canadians should derive great benefits from the widespread reduction of trade barriers as these tariff changes are implemented over the next several years.
I would suggest-I know that the hon. members of this house will agree-that this part dealing with the Kennedy round of tariff negotiations is interesting.
The hon. member for Peace River (Mr. Baldwin) quoted from it-


The Acting Speaker (Mr. Tardif):: Order. It being six o'clock the sitting stands suspended until eight o'clock p.m. this day.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Georges-C. Lachance: Mr. Speaker, I need only a few moments to complete the remarks I was making when the house took recess at six o'clock.
I greatly enjoyed the speech made here by the hon. member for Peace River (Mr. Baldwin). However, I cannot agree fully with his criticism of the speech of the Minister of Finance and especially when he quoted extracts from the fourth annual review of the Economic Council of Canada. On the contrary, I congratulate the Minister of Finance for having to a large extent drawn inspiration, and rightly so, from the conclusions of this report.
In conclusion, Mr. Speaker, so far as the amendment to the amendment moved by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Colin Cameron) is concerned, I must say that, in my opinion we should study the Carter report and also await the government's white paper before taking a decision

October 5, 1967
The Budget-Mr. Fulton concerning the income tax structure and especially tax exemptions for married couples having an annual income of $4,000 or less, and that is the least that can be said.
As for the amendment moved by the Conservative party, well, the criticism does not seem serious enough to me to warrant a non-confidence motion against the government.


Edmund Davie Fulton: Mr. Speaker, at this stage in the budget debate I am quite sure that you and all members of the house would agree that the core of our discussion is and must be the problem of inflation, the constant increase in the cost of living, the constant erosion of the standard of living of Canadians which follows from that increase in the cost of living and inflation, and therefore the question of what to do about this problem. What can we do in the House of Commons and what can the government, which is responsible to the House of Commons, be expected and asked to do about these problems?
It is in this spirit that I should like to approach these problems; a spirit that does not minimize their seriousness, that does not minimize the difficulty of dealing with them but, on the other hand, does not excuse the government for its failures to deal with them. In this approach we, on our side, do not go so far as to say that the government can provide all the answers and solve all the problems; nor do we go so far as to say that the government is entirely responsible for the situation which now presses so heavily on the Canadian people. Notwithstanding that approach, however, we do say, and I think it is the responsibility of this House of Commons to say this to the government, that the government should take a hard look at its own position and its own conduct to see the extent to which it has contributed to the problem. It should also take a hard look at its own position in order that it may come up with answers and courses which would lead it to refrain from actions that create or aggravate the trend toward inflation.
Second, we say that not only should the government take this hard look at its own position and its own responsibility but it should take the initiative and show leadership in suggesting and following up solutions to these problems. While we are, therefore, prepared to recognize the over-all importance and over-all necessity for co-operation in the search for solutions, we say that the government must accept its primary responsibility

in the two fields I have referred to, namely, its own action in contributing to the situation and its own responsibility for suggesting solutions.
Looked at in this light I must say that the minister's speech of yesterday, his second budget resume, his second rehearsal of the fiscal policies of the government, represents a serious disappointment on both the counts that I have mentioned. That is so, because, first, the minister failed to recognize and admit that government conduct has directly contributed to the forces of inflation, has directly fanned the fires of inflation; and second, because his speech failed entirely to suggest any effective remedies for the situation that the government was prepared to apply. In this context his speech amounted to nothing more than a moral exhortation, coupled with a threat, to others to do better than the minister and the government are prepared to do themselves. There was the threat that if they do not do better, "then we are to freeze the economy and create a large measure of unemployment."
It amounted to nothing more than a moral exhortation and threat which are the more unacceptable in that the government itself shows no readiness to adopt the prudent measures and restraints that it so piously suggests and urges on others.
Let me document my case, Mr. Speaker. I have said that the government is responsible, first, because it adopts and follows policies which fan the fires of inflation. I should like to give some concrete proof of what I have said. The government does this by its direct actions as well as by the example, the bad example, that it sets to industry, labour, and >
ther parts of the Canadian economy, e (8:10 p.m.)
As my first example, I draw attention to the imposition and retention of sales tax on building materials and production equipment. We on this side recognize that the government is bound to raise revenues with which to meet its proper responsibilities and that it must therefore impose taxes. But why choose a tax which is directly inflationary in its effects? This is what the country has been asking for months. Why impose a tax which must by its very nature contribute to increases in the cost of things which are bought and sold in Canada as well as in the cost of houses which are bought, rented and lived in by Canadians? There are other sources of revenue which are not so directly inflationary; indeed the use of these sources might
October 5, 1967

well have a contrary effect. The government adopted this tax because it was not prepared to be square and fair with the Canadian people. It thought it could conceal its actions by collecting indirectly what it was not prepared to collect directly. It therefore resorted to the most reprehensible and inflationary tax it could possibly conceive.
Second in the category of actions which have fanned the fires of inflation and set a bad example to others concerned with the management of business and economic affairs, I would cite the upward spiral of government spending and extravagance. For at least three years the government has been following a trend which can only be characterized as the proliferation of its departments and staffs in the most profligate manner. This proliferation produces no results in terms of increased productivity but it does produce important and damaging results in terms of unproductive spending.
I know the minister tells this house and the press and television audiences that he is slashing expenditures, applying the axe to the level of government spending and saving money. That is the impression he tries to give. Mr. Speaker, it is a joke. In the context of the seriousness of the situation I would say, even, that it is an attempt at a hoax on the Canadian people because it has become perfectly clear during the last two days, if it were not so before, that it is not with respect to current spending that the minister is applying the axe, but with respect to next year's spending proposals.
We all know that this review of future expenditure is an annual process. Every government reviews the estimates before they are presented to the house and suggests or insists to the departments, that spending proposals be reduced. That is why the Treasury Board exists. I am disappointed, if not surprised, that the Minister of Finance (Mr. Sharp) should elevate to the stature of a virtue something which is no more than his plain and simple duty.
The question is: what, if anything, has this minister done to reduce spending this year?


An hon. Member:: What would you suggest?


Mr. Fulion:: I would be interested to hear the hon. member answer his own question because I hope his answer will indicate the concern which the Canadian people expect him to show.
When the minister asks for our approval because he is planning to reduce the spending
The Budget-Mr. Fulton proposals which the departments have submitted for next year he reminds me of the man who says: I have just saved $10,000 because though I originally proposed to buy a Rolls Royce next year I have decided to buy a Ford instead. This is the measure of the minister's boasts about the savings he will effect next year.
The Minister of Finance should be cutting down expenditures this year. Instead, he is doing the opposite, and the government of which he is a member has been doing precisely the opposite by causing a proliferation of government departments and embarking on unnecessary and extravagant spending. It seems to me that every time hon. gentlemen opposite have a new idea they set up a new department. What the country would like to see is some co-ordination instead of all this proliferation.
Let me cite particular examples. I have in mind the Department of Industry and the three departments which are now doing the job formerly done by the Department of Justice. There are other examples I could give, including the Department of Manpower and Immigration and the Department of Labour and the relationship between them. However, I will deal with the examples I mentioned first as being prime examples of the point I am making.
Everything that is being done by the Department of Industry could well be done by a branch of the Department of Trade and Commerce. This parliament was told when the Department of Industry was set up that it would be taking over not only personnel from the Department of Trade and Commerce and the Department of Defence Production but that it would be carrying out functions which would otherwise fall to those two departments. It was explained that there would, therefore, be no increase in government spending but, rather, a degree of economy through increased efficiency resulting from the setting up of the new department.
Let us now examine the record in terms of personnel only-I am talking, now, only of departmental administration. One might have thought that if the Department of Industry were to take over the functions and personnel of other departments the spending of those other departments would have been reduced. Exactly the opposite has occurred. If hon. members look at the records in the blue books of estimates for the years concerned they will find that in 1963-64 when the Department of Industry was first set up it had an establishment of 274. In the estimates for

October 5. 1967
The Budget-Mr. Fulton 1967-68, the current estimates, the proposed establishment under departmental administration amounts to 783, an increase of 509, or nearly 200 per cent.
[DOT] (8:20 p.m.)
One might be inclined to say, if the personnel in other departments had gone down, this may be a justifiable measure. But unfortunately one finds that the absolutely opposite trend has taken place. In the same narrow category, departmental administration, you find Defence Production departmental administration personnel have increased from a total of 1,699 in the year 1963-64 to 3,684 in 1967-68, an increase of 1,985, or over 100 per cent.
Let us look also at the Department of Trade and Commerce. I can appreciate that trade involves external relations, but commerce I would have thought involved domestic problems, including domestic industry. Even the President of the Privy Council (Mr. Gordon) would agree that that is a reasonable assumption.


Mr. Gordon:: May I ask my hon. friend what he said I would agree to?


Roger E. Régimbal: Pay attention.


Walter Lockhart Gordon: I don't think he should put words in my mouth.


Edmund Davie Fulton: I said the minister would agree with a reasonable assumption, but perhaps he doesn't because he is not reasonable.


Walter Lockhart Gordon: I was questioning the presumption.


Edmund Davie Fulton: The presumption that you are reasonable?


Walter Lockhart Gordon: Your presumption.


Edmund Davie Fulton: My assumption was that you would agree that commerce includes generally the field of domestic industry. If the minister disagrees with that perhaps he will make his case.
Personnel under departmental administration in the Department of Trade and Commerce in the same year, 1963-64, the year the Department of Industry was set up, totalled 514. That is increased this year to 812. In summary, one finds that Department of Industry personnel in that category have increased by some 200 per cent, and that the other departments' personnel have increased by over 100 per cent in the one case, and by about 60 per cent in the other. So, the total

personnel involved as between the three departments, in departmental administration alone, has increased from 2,487 in the year when the Department of Industry was set up, to 5,279 in the current year's estimates, an increase of 2,792, or again over a 100 per cent increase.
If one looks at the spending figures for the Department of Industry alone, the department which we were told was going to coordinate activities, be efficient and not involve the country in greater extravagances, one finds that in the year 1964-65, the first year it really got under way, the figure given for its total spending was $25 million. In the next year, 1965-66, it was $36 million. In 1966-67 it was $51 million, and in the current year the estimated spending is $146 million, an increase of over five times, nearly six times, over the spending in the first year of the organization of that department.
One finds the same situation with respect to the division of the functions performed by the Department of Justice. Previously the Department of Justice in general terms, carried out responsibilities now assigned to three ministers, the Minister of Justice (Mr. Trudeau), the Solicitor General (Mr. Pennell), and the Registrar General (Mr. Turner).
Again if one looks at the record of personnel one finds the same trend. In the year immediately prior to the division of functions the Department of Justice had a total of 220 persons engaged in departmental administration. In the year following the division, 1966-67, according to the estimates for that year Department of Justice administration personnel went up to 245, the Registrar General had 82 in that category, and the Solicitor General with a modest beginning had seven. But in this year's estimates the Department of Justice total has gone up to 341, the Registrar General has 84 and the Solicitor General 28, so that from a beginning of 220 in 1965-66, when all these functions were performed by one department, we have at the present time 453 people engaged in departmental administration, again an increase of over 100 per cent.
This is the trend to which I refer when I say that the minister and his government have been following courses which directly contribute to inflation and completely disentitle the government to make these pious, moral exhortations to business and labour in Canada with respect to the courses they should be following.
The second area of disappointment, and therefore of justifiable criticism with respect
October 5, 1967

to the minister's speech and his omission to put forward a program, is the complete failure to suggest priorities, not only within the federal government program but also failure at any attempt to get agreement with the provinces with respect to priorities to be followed in the realm of government spending and government activity generally.
I say, sir, that the minister's whole approach is wrong. I refer, for instance, to his statement on Monday of this week that with respect to priorities it is not what you put at the top but what you drop off at the bottom which counts. This is a completely impossible approach, impossible in the sense of producing any realistic results because priorities require planning, and when you make a plan you don't ask first, "What is least important for me to do?" Rather, if your plan is to have realism you ask, "What is most important for me to do?"
I know that such planning takes not only courage but judgment. I do not accuse the minister of any lack of courage but I do accuse him of complete lack of judgment in this kind of approach to the problem of priorities and planning. His attitude, of course, is the reverse of positive-that we do not discuss first what is most important to do but rather we try to decide what is least important to do; and this is the typical attitude of the Liberal party-backing into the second century of Canada's history; in other words government in reverse.


Mitchell William Sharp: What would you drop off at the
bottom?


Edmund Davie Fulton: I would not be concerned at the outset with what should be dropped off at the bottom. I would be concerned to sit down with my own colleagues and see what are the real problems of confederation. Then, having obtained agreement on that point, I would be concerned to sit down with my colleagues in provincial governments and say, "Let us discuss what are the real problems of confederation that require action"-


Some hon. Members:: Hear, hear.


Edmund Davie Fulton: -action which is made impossible in so many spheres by the conduct of this government in loading on the top of the heap those things which do not have first priority.


Mitchell William Sharp: Such as old age pensions?


Edmund Davie Fulton: I am coming to that in a moment. I am sorry the minister requires all this instruction. He obviously hasn't the first
The Budget-Mr. Fulton idea what are the top priorities in Canada today. That is his trouble. He has not addressed himself to that question. He wants to go to the bottom of the heap to see what we can strike off first. What a completely negative attitude for a so-called responsible government. The trouble here, Mr. Speaker, is that the minister has refused to face the question realistically. He has loaded, and has permitted the government to load, the statute books of Canada with unproductive and expensive programs,-


Mitchell William Sharp: Give us some examples.


Edmund Davie Fulton: -so that he now has no leeway for the urgent needs of the country, the areas where provinces and municipalities are in urgent need of assistance. He refuses to face the question realistically.
Now I will answer the minister's question. Medicare is a case in point. The provinces are anxious to have a review not only of the timing of the medicare program but of certain basic aspects of the program forced on them by the federal government, aspects which have an important bearing on the cost of the program.
[DOT] (8:30 p.m.)
But last night on the television program "20 Million Questions" we saw the unfortunate spectacle of the minister backing and filling on the question of medicare, leaving his viewers filled with confusion not only concerning the proper position but also uncertain as to whether or not the minister had a view or position on it. I suggest to the Minister of Finance, as the minister primarily responsible for the setting of priorities and the working out of a sensible plan of spending, that he must review the whole question with the provinces, as they have requested, not only as to the date of implementation but also as to the basis of the program because the minister has committed himself, this parliament and this country, to an expenditure estimated at $450 million to implement it.


Mitchell William Sharp: Did you vote against it?


Edmund Davie Fulton: The minister can read my speech about medicare in which I set out my views in opposition to the government. But there, in that question, is the same attitude I had in mind when I made my reference to the government backing into Canada's second century. It becomes reasonably apparent that it is a waste of time to talk about sensible programs of priority spending with this minister. I had hoped it would not be so, but this

Ociober 5. 1967
The Budget-Mr. Fulton is the sort of flippant attitude he takes. He tries to pretend that the responsibility belongs to the opposition instead of to the government. The minister knows that when a government brings forward a program it must take responsibility not only for the content but also for the timing of that program.


Mitchell William Sharp: We do; we did.


Edmund Davie Fulton: Would the minister say that if we had voted against it that would have changed his position?


Mitchell William Sharp: No, you supported it.


Edmund Davie Fulton: But I am not going to be drawn too far along that line. We moved a number of amendments to reduce the cost and to increase the reality of the medicare program. The government refused to accept those amendments. Now, the minister is trying to say that because we did not defeat the medicare program we have to accept responsibility for it. Is he afraid to accept responsibility?


Mitchell William Sharp: Mr. Speaker, I accept full responsibility.


Edmund Davie Fulton: Then I suggest that instead of indulging in this kind of evasion of responsibility the minister should get together with his provincial counterparts and get down to the business of discussing how we can work out a real program of priorities. If the minister is not prepared to accept this responsibility, let him step aside with all his colleagues and we will be glad to take on the responsibility.
This, of course, brings me to the consideration of the action the minister has proposed. The suggestion contained in his speech was very limited and disappointing. After a lot of double talk about how much the government is doing to cut spending, after a lot of double talk about next year while actually he is doing nothing about reducing this year's inflationary deficit, he gives as his only substitute for real leadership a sort of moral exhortation to others to be prudent coupled with a threat of a deliberate freeze on the economy and the creation of unemployment if his moral generalizations do not work.
Now, as I have said, I believe we all are united in respect of the economic objectives in this country. We all want to achieve stability of prices and a high level of employment. We recognize that this problem of inflation and budgetary control is a serious problem; but we also recognize that it is a continuing

problem in a modern society. It is not a new problem. We are a modem society. It is a problem which is inherent in a modern society and it should have been thought about before by this government. As a continuing problem, it is essential that we work out the techniques to deal with it.
I should like, accordingly, to couple some positive proposals with my criticisms. I should like to suggest, first of all, that budgetary and monetary planning, together with a real plan of priorities for spending, is necessary.


The Acting Speaker (Mr. Rinfret):: I regret to interrupt the hon. member, but the time allotted for his speech has expired.


An hon. Member:: Carry on.


The Acting Speaker (Mr. Rinfret):: Is there unanimous consent that the hon. member continue with this speech?


Walter Lockhart Gordon: Mr. Speaker, I am sure we all would like the hon. member to continue, but I hope that he would not take very long because I should like an opportunity to reply
to some of his comments before the division.


Mr. Mongrain:: Mr. Speaker, on a question of privilege. I am awfully sorry to interrupt my hon. colleague, whom I hold in great esteem, but as an independent member I have not had my turn to speak yet and I would like to withold unanimous consent until we, the independents, have had the right to take part in the debate.
The Acling Speaker (Mr. Rinfret): Order. There is no need to justify unanimous consent. The hon. member may either agree or object to the hon. member for Kamloops (Mr. Fulton) speaking longer than 30 minutes.


Joseph-Alfred Mongrain: I object to it, Mr. Speaker.


Gilles Grégoire: I do too, Mr. Speaker, because I have been waiting for five days to speak.


The Acting Speaker (Mr. Rinfret):: Order. I would ask the hon. member for Lapointe to resume his seat. When the Speaker asks if there is unanimous consent, the hon. members answer only by yes or no; they are not required to state their reasons.
Therefore, I am asking the hon. members if they are giving unanimous consent in order that the hon. member for Kamloops may continue his remarks.
October 5, 1967


Gilles Grégoire: No.


Joseph-Alfred Mongrain: No.


Edmund Davie Fulton: No, Mr. Speaker; I have too much respect for the rules of the house, and I have been here too long to ask hon. members to extend time when there is any objection. I should have been able to conclude my remarks in the time provided although I think perhaps I was led off a little because of the interruptions. In any event, since there are so many others who wish to speak I do not wish to impose on my colleagues by asking for extra time.


Walter Lockhart Gordon: Mr. Speaker, I am sure I speak for most members of the house when I say that I wish it had been possible for the hon. member for Kamloops (Mr. Fulton) to continue his remarks for a reasonable time. He was saying things which certainly left some of us in a position where we felt we must reply.
I do not believe I have spoken in this house more than once or twice in the past 18 months.


An hon. Member:: You have not been around.
Another hon. Member: You have been busy writing books.


Walter Lockhart Gordon: One cannot do everything. I shall come to that in a moment but before I do I should like to congratulate the hon. member for Kamloops for his effort and his performance during the recent convention of his party.
[DOT] (8:40 p.m.)
I think we all felt that he conducted himself in a way in which I hope all members would in similar circumstances. Naturally, he and his supporters were disappointed that he did not win, but I think he put up a very good show and I want to congratulate him for it.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: I hope the hon. member will forgive me if I do not continue in the same complimentary vein.


Edmund Davie Fulton: I did not expect that you would.


Walter Lockhart Gordon: Quite frankly, Mr. Speaker, I was rather disappointed in the hon. member's

The Budget-Mr. Gordon speech. It seemed to me that he exaggerated out of all proportion the rather uncomfortable but obvious difficulties in the economic situation that we face at the present time. I should like to remind him and all hon. members that Canada faces only three major and really serious problems.


Mr. McCleave:: We could solve one by having an election.


Walter Lockhart Gordon: I have never found that these side or snide remarks of the hon. member for Halifax (Mr. McCleave) are of a kind that really make much impression on anybody.


Robert Jardine McCleave: Never snide, but always constructive.


Walter Lockhart Gordon: We have three serious problems which I think all Canadians recognize. The first is the problem of world peace. I cannot let this opportunity pass without complimenting my colleague, the Secretary of State for External Affairs (Mr. Martin), for his recent speech at the United Nations general assembly.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: On that occasion I think he said the things that are in the hearts and minds of all of us. We all know that no defence is really effective any more in this world except peace. If we kid ourselves that anything else will be effective, we are very foolish indeed.
We have a second problem that is perhaps closer to us here and we are very much aware of it. That is the question of the continuation of confederation and the unity of our country.
I am not at all convinced that it is helpful for people like myself from English speaking Canada to say too much about this question at the present time. I think we all have a sympathy and understanding of the difficulties through which our friends and colleagues from Quebec have been going. I think we have a much better appreciation now of some of the injustices from which our friends from Quebec have suffered. I think those of us who are not French speaking are fully determined that if we have the chance we want to rectify those injustices. But I believe we know that primarily these things must be settled and determined by our friends from the province of Quebec, and that the rest of us should be cautious, careful and moderate in our language.


Some hon. Members:: Hear, hear.
2866	COMMONS
The Budget-Mr. Gordon


Walter Lockhart Gordon: There may not be the same unanimity on the next question, but I think the great majority of Canadians feel that there is a third problem.


Edmund Davie Fulton: The Liberal government.


Walter Lockhart Gordon: Let us not be silly.
Not only have we the problem of obtaining peace in the world in which we live, not only have we the problem of achieving unity within our country, but we also have the problem, living next door to the greatest nation in the world, of maintaining our own independence. Most of us in one way or another are searching for the solution to that problem. I hope that before very many months have passed, the government will be able to table a white paper which will at least provide a focus for debate about what should be done in this respect.
Apart from those three problems, if we are honest and fair, and if we really lift up our heads and think ahead, we must agree that this is the country with the greatest future of any country in the world.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: We have a tremendous potential and a terrific opportunity. If we indulge in too much petty squabbling over little problems, I think we will perhaps forget the real opportunities that we have. Those are some of the reasons, Mr. Speaker, for my mild disappointment in the speech of my hon. friend, for whom I have the greatest admiration. I think he exaggerated our present economic difficulties out of all perspective.


Edmund Davie Fulton: I expected you to say that.


Walter Lockhart Gordon: It seemed to me that the hon. member was unconvinced-


Edmund Davie Fulton: Why not talk about the budget?


Walter Lockhart Gordon: I find the hon. member's interjections less than impressive.


Edmund Davie Fulton: The admiration is mutual.


Walter Lockhart Gordon: His remarks about inflation were understandable. Everybody deplores inflation. Everybody deplores the increases in the cost of living. But I wonder whether my hon. friend has informed himself of the projections of most of the best analysts in this country, who suggest that the inflationary pressures that were obvious and evident in 1966 and the beginning of this year are clearly moderating, and that the expectations for
tMr. Gordon.]
DEBATES	October 5. 1967
1968 are not nearly as serious as my hon. friend has suggested.


Some hon. Members:: Hear, hear.


Edmund Davie Fulton: Mr. Speaker, I would be grateful if the minister would quote such an authority apart from his colleague, the Minister of Finance (Mr. Sharp). It would be very interesting to study it.


Walter Lockhart Gordon: I would be glad to, Mr. Speaker. Has the hon. member ever heard of Wood Gundy & Company? I suggest that the hon. member examine the report which they issued privately within the last two or three weeks. I would be glad to give the hon. member more authorities of the same character.


Edmund Davie Fulton: Has the minister read the recent report of the Bank of Canada, on the declining purchasing power of the Canadian dollar?


Walter Lockhart Gordon: Anyway, Mr. Speaker, with the greatest respect, I do not think my hon. friend has contributed very much this evening either to the knowledge or the peace of mind of the people of this country.


Some hon. Members:: Hear, hear.


Mr. Crouse:: Would the hon. member permit a question?


Walter Lockhart Gordon: I would be glad to, Mr. Speaker, at the end of my remarks. I do not think I have very much more to say, and perhaps hon. members would let me finish. My hon. friend, in the usual unimaginative way of hon. members opposite, dragged up that old, hoary subject of the sales tax on building materials.


An hon. Member:: Why not?


Walter Lockhart Gordon: That is not the real cause of the increase in the cost of housing. Nobody in this country who has any sense of responsibility is unaware of or unconcerned about the increased cost of housing. But I suggest to all hon. members that most of us have taken a little trouble to analyse the real reasons for this increase in cost. We all know, if we have done that, that most of the increase, or the biggest single increase in the cost of a home results from the increased cost of land.


Edmund Davie Fulton: Ah.


Walter Lockhart Gordon: My hon. friend says "Ah." Why doesn't he study the figures.


Some hon. Members:: Hear, hear.
October 5, 1967


Walter Lockhart Gordon: Why doesn't he ask people in the industry and inform himself, beiore making what I think are these rather irresponsible statements? I happen to be one of those who think that the ordinary Canadian with an average income should have an opportunity to own his own home.


An hon. Member:: Then do something about it.
[DOT] (8:50 p.m.)


Walter Lockhart Gordon: My hon. friends over there say, do something about it. Believe me, this government intends to do something about it.


Robert Muir: That is the stock answer. We mean soon.


The Acting Speaker (Mr. Tardif):: Order, please.


Walter Lockhart Gordon: Why does the hon. member not think of something new? If hon. members recall the 11 per cent sales tax-


Robert Muir: We remember your whiz kids and your budgets.


Walter Lockhart Gordon: -they will remember that the net result was that the budget, for all practical purposes, was balanced within a couple of years; and it will be again.


Some hon. Members:: Oh, oh.


Walter Lockhart Gordon: It seems to me that although my hon. friend was perhaps trying to be helpful, his efforts were not too impressive, even given the scope of the problems to which he was addressing himself. He suggested that one of our great troubles was caused by the separation of the Departments of Trade and Commerce and of Industry. In a happier era when I was self employed I happened to be engaged in the business of management consulting and I was fully aware of the principles of organization. One of the principles of organization which I would commend to my hon. friend is that one does not combine two dissimilar functions under one head. The main objective of the Department of Trade and Commerce is to promote exports. The main objective of the Department of Industry is to promote the manufacturing industry; not all industry, not farming, not wheat growing, not the production of pulp and paper and our other great export industries, but to concentrate primarily, although not entirely, on the manufacturing sector. Before the Department of Industry

The Budget-Mr. Gordon was created, manufacturing in this country was no one's prime responsibility. This may not have mattered very much to my hon. friend for Kamloops (Mr. Fulton) but it mattered a great deal to industry and to the people employed in industry, both in the province of Quebec and the province of Ontario. One of the things which we thought was important was to have a minister who, first of all, would be informed about the problems of the manufacturing industry and, second, would proceed to do something about them. Everyone knows that the sector which is developing at the fastest rate in our export trade is manufacturing.


Edmund Davie Fulton: I thought the Department of Trade and Commerce was interested in exports.


Walter Lockhart Gordon: Of course it is, but you cannot export things until you have them produced at prices which can compete in world markets. Perhaps my hon. friend may not know this but I suspect there are members on his side of the house who are not completely unfamiliar with the manufacturing sector or the millions of people who find their employment in the manufacturing industry. This is something which will be increasingly important in the future and, whether we like it or not, I think it is desirable. I, for one, think we need a minister and a department concentrating on that matter.


Mr. MacDonald (Prince):: We certainly do.


Walter Lockhart Gordon: Did I hear a voice from the wilderness? I have great respect for the hon. member for Prince (Mr. MacDonald) and I will not comment on what he said except to say that he has to do better than that.
The hon. member for Kamloops stated that we must establish priorities. Everyone agrees with that. However, we all know that the priorities upon which some of us might agree may not be too acceptable to others. It so happens there is a difference in political philosophies.
For example I was surprised that my hon. friend should have raised doubts about the importance of medicare in Canada. There are no doubts on this subject on this side of the house. We in the Liberal party are for medicare. We are committed to it and we will do our damndest to see that it is implemented. It may be that some Conservative elements opposite would prefer to see this great improvement in social security dropped, deferred, or put off.
2868	COMMONS
The Budget-Mr. Gordon


J.-H.-Théogène Ricard: The government has already-deferred it for one year.


Walter Lockhart Gordon: But let us not put it off any longer.


Robert Muir: Does the hon. member not remember it was started as far back as 1919? The Liberal government has been committed since 1919.


Walter Lockhart Gordon: I must say, Mr. Speaker, that I was surprised to hear a man who very nearly won the leadership of the great party opposite suggest in this house that this particular social measure should be put aside. If that is my hon. friend's idea of priorities, we want no part of it.


Edmund Davie Fulton: I am sure that my hon. friend would not wish to deliberately distort what I said. I said that I felt the Minister of Finance should discuss with the provinces not only the date of implementation of the medicare plan but some of the aspects of the medicare program which the federal government has imposed on them. Is the minister opposed to discussing with the provinces a program in which they have a very real interest?


Walter Lockhart Gordon: I apologize to the hon. member if even by inference I appeared to distort anything he might have said. I would remind him, however, that a law has been passed by this parliament and so far as I am concerned, and I am sure so far as most hon. members are concerned, this law should be implemented.
I did not mean to enter into a heated debate when I rose to speak. I only wished to emphasize that in my opinion this country is not in the dire straits which my hon. friend seemed to suggest. 1 think we are on the threshold of a tremendous improvement in the standard of living of all Canadians. I suggest to hon. members who take a different view that in the last five years-I will not say in the last four years so as not to be accused of inadvertent partisanship-


Robert Muir: Oh, no.


Walter Lockhart Gordon: -none of my friends opposite would ever accuse me of that-the standard of living of the average Canadian has gone up tremendously. I suspect that in the next five years this increase will continue at roughly the same rate. So, let us not cry too much. Let us keep on trying to improve what

DEBATES	October 5, 1967
we are doing, but for heaven's sake let us not try to put the clock back even 20 years, let alone back to the last century.


Lloyd Roseville Crouse: Would the hon. gentleman answer a question? I am sure that we all listened with interest to his strictly non-political comments on the budget and on the speech of the hon. member for Kamloops (Mr. Fulton). My question to him is: does he agree with the headline which appeared in the Financial Post of October 7-which I admit is two days ahead-which states the following:
[DOT] (9:00 p.m.)
Inflation misery gets worse... The erosion of the Canadian dollar is now the fastest it has been since Korea.


Walter Lockhart Gordon: Mr. Speaker, I do try to keep up as closely as I can with current events, but quite frankly I have not looked ahead to
November 7.


Lloyd Roseville Crouse: Not November, October 7.


Walter Lockhart Gordon: I have not even looked ahead that far in so far as the Financial Post is concerned. I suspect however, that if that headline referred to is supported by the text that follows, it is highly exaggerated.


The Acting Speaker (Mr. Tardif):: The hon. member for Brome-Missisquoi (Mr. Grafftey).


Joseph-Alfred Mongrain: Mr. Speaker, I rise on a point of order under standing order No. 29 which reads as follows:
When two or more members rise to speak, Mr. Speaker calls upon the member who first rose in his place; but a motion may be made that any member who has risen "be now heard'', or "do now speak", which motion shall be forthwith put without debate.
I suggest that the hon. member for Lapointe (Mr. Gregoire) be now heard.


The Acting Speaker (Mr. Tardif):: Would the hon. member put forthwith a written motion to that effect?


Joseph-Alfred Mongrain: Mr. Speaker, if you can
show me that under the rules I have to submit a written motion, I shall be glad to do so, but after persusing the standing orders, I cannot find anything to that effect.
It seems to me that an oral motion would be sufficient. Besides, I have learned that through experience, because I have seen that situation happen here on a few occasions.


Gilles Grégoire: Question.
October 5, 1967


Mr. Graffley:: Mr. Speaker-


The Acting Speaker (Mr. Tardif):: Order. A point of order is now being considered.


Marcel Joseph Aimé Lambert: For the guidance of the hon. member, Mr. Speaker, I must point out to him that standing order No. 43 reads as follows:
All motions shall be in writing, and seconded, before being debated or put from the Chair.


Joseph-Alfred Mongrain: Mr. Speaker, my written motion is ready.


The Acting Speaker (Mr. Tardif):: Order.
The motion is as follows: Mr. Mongrain, seconded by the hon. member for Roberval (Mr. Gauthier) moves:
That the hon. member for Lapointe now have the floor.

All those in favour of the motion please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Tardif):: All those against the motion will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Tardif):: In my
opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Tardif):: Call in
the members.


Mr. Speaker:: I declare the motion lost.
Order, please. It being nine forty five o'clock it is my duty pursuant to section 4 of standing order 58 to interrupt these proceedings and forthwith put the question on the amendment to the amendment.

October 5, 1967
Division


Mr. Speaker:: I declare the amendment to the amendment lost.


William Heward Grafftey: May I call it ten o'clock, Mr. Speaker.


David Walter Groos: Mr. Speaker, I was paired with the hon. member for Edmonton East (Mr. Skoreyko). Had I voted, I would have voted against the motion.


Mr. Speaker:: It being after ten o'clock, this house stands adjourned until eleven o'clock tomorrow morning.


[Stage Direction]
It being ten minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, October 6, 1967