1967-03-13

Mr. F. J. W. Fane (Vegreville):: Mr. Speaker, I rise on a point of personal privilege. It concerns the statement made by the Minister of Veterans Affairs when tabling part I of the Hawthorn-Tremblay report "A Survey of the Contemporary Indians of Canada" on behalf of the Minister of Indian Affairs and Northern Development.
Shortly after that report was tabled in the house on Friday the hon. member for Chateauguay-Huntingdon-Laprairie (Mr. Watson) spoke on a point of privilege which Your Honour suggested was not a point of privilege, but he was allowed to continue speaking because of the agreement of all members who were in the house at that time. His point of privilege had to do with reports appearing in newspapers throughout Canada for a week before the royal commission report was tabled. Apparently the hon. member obtained a copy of the report immediately it was tabled, and read from it.
My question of privilege is that representing the constituency of Vegreville in Alberta, I represent the Saddle Lake Indian reserve which has some 2,000 residents. I have not had a copy of the report delivered to me yet. I have not seen a copy of it, and my question of privilege requires four answers.
First, I want to know how the newspapers got copies of this secret document which was not supposed to be available to anybody until it was tabled in the House of Commons. I also suggest that tabling one copy of a report in the house is not sufficient for the immediate requirements of 265 members of the house.
I	want to know why copies of the report of this royal commission have not been delivered to members of the house. At the time I left my office this afternoon at 2.30 a copy of the report had neither been delivered to my office nor was there one in my mail box. I also want to know when hon. members will receive copies of the report so we can discuss the matters in it concerning the various Indian reserves.
[DOT] (2:40 p.m.)


Hon. Roger Teillel (Minister of Veterans Affairs):: Mr. Speaker, my understanding is that members who were interested in obtaining copies of this report have received them and if these copies have not been delivered to all members I can only take the matter in hand and suggest to the department that this be done immediately. I apologize that this has not been done before now, but my understanding is that the report is available.



MAIN ESTIMATES, 1967-68

[Stage Direction]
A message from His Excellency the Administrator transmitting estimates for the financial year ending March 31, 1968, was presented by Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board) and read by Mr. Speaker to the house.
['Mr. Speaker, I wish to table copies in French and English of the extradition agreement between the government of Canada and the government of the state of Israel.']
Mr. Benson:: Mr. Speaker, I should like to table copies in English and French of the main estimates for the fiscal year ending March 31, 1968 referred to in the message from His Excellency.



Hon. Paul Martin (Secretary of Stale for External Affairs):: Mr. Speaker, I wish to table copies in French and English of the extradition agreement between the government of Canada and the government of the state of Israel.



TRANSPORT


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I should like to make a brief statement concerning the question of tolls on the St. Lawrence seaway. On January 9 I tabled the report on St. Lawrence seaway tolls prepared by the St. Lawrence seaway authority. I had previously indicated that the proposals in that report and in the parallel report of the St. Lawrence Seaway Development Corporation of the United States
March 13, 1967


Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, we have been waiting for some time for information on this matter, and I may say at the outset that it comes none too soon for those who have to plan for the season.
This is a very detailed statement and we will have to give it great consideration, particularly because there is more sectionaliza-tion than before. I think this points up the necessity of referring this entire matter to the transportation committee for study, in light of the costs and revenues and the plans originally set up when the seaway was instituted. I cannot say that we are in agreement with the changes because I do not know enough about them at the moment. Let me say, however, as one from the maritimes, that we still feel the seaway should bear a greater share of its costs, as it was constituted to do.
[DOT] (2:50 p.m.)



CANADIAN WHEAT BOARD ACT


Hon. Robert Winters (Minister of Trade and Commerce) moved: for leave to introduce Bill No. C-279, to amend the Canadian Wheat Board Act.


Some hon. Members:: Explain.


Robert Henry Winters: Mr. Speaker, the main purpose of this bill is to deal with the provisions of the current act which will expire in midyear; therefore it is necessary to amend the act to perpetuate the provisions thereof.
Motion agreed to and bill read the first time.



MANPOWER AND IMMIGRATION


Hon. L. T. Pennell (for the Minister of Manpower and Immigration) 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 provide for the establishment of a Canada manpower and immigration council, of advisory boards and of regional and local manpower committees; to provide also for the appointment of the members thereof, their remuneration, allowances and other expenses; and to provide further that all expenditures for the purpose of the act shall be paid out of moneys appropriated by parliament therefor.


[Stage Direction]
Motion agreed to.
Questions

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

Mr. Isabelle: 1.	Have the studies undertaken on the Alexandra bridge, for the purpose of determining whether it should be demolished, been completed?
2.	If so, what were the results of that survey?


Hon. G. J. Mcllrailh (Minister of Public Works):: 1. Surveys to determine the condition of the bridge have been substantially completed.
2.	The surveys indicate that the piers are sound, but that, because there has been corrosion of certain steel members of the bridge, the continuation of the load restrictions that have been in effect for some time is warranted. The consultants will soon provide a report listing the necessary repairs.


CHIEF OF MANAGEMENT SERVICES SECTION, INDIAN AFFAIRS
Mr. Orlikow: 1.	Who Is the chief of the financial and management services section in the Department of Indian Affairs and Northern Development?
2.	How long has he held the position?
3.	What are his academic qualifications?
4.	What is his previous experience in working with Indians either in the department or elsewhere?
5.	What are his duties and responsibilities and to whom does he report?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: 1. The
position of the chief of the financial and management services was not established as such. The revised organization of the Indian affairs branch provided instead for a branch financial services adviser. The incumbent of this position is Mr. Jean-Marie Thibault.
2.	Since January 1, 1966.
3.	(a) Columbia University, N.Y., M.B.A.; (b) Ecole des Hautes ICtudes Commerciales, L. Sc. Com.; (c) Member of Institute of Chartered Accountants.
4.	Since joining the Indian affairs branch more than a year ago, Mr. Thibault had numerous occasions to meet the Indian people, to discuss their problems and to study various projects designed by the branch to improve the living standards of the Indians in Canada.

March 13, 1967
Questions
5.	His duties and responsibilities are: Under the branch director, to provide financial advisory services to senior branch officials; to be responsible for the overall direction of financial management within the branch; to review and analyse program budgets at the branch level including the co-ordination of submissions to treasury board; to be responsible for the accounting services of the branch. Mr. Thibault reports to the director of Indian Affairs.


FEDERAL CONTRACTS WITH TRANSOL, INC., QUEBEC
Mr. Ricard: 1.	Does Transol, Inc., 500 Grande Allee East, Quebec city, hold contracts from any federal department or from any crown corporation in addition to the mail box collection contract in Quebec city and suburbs and the transport contracts for the Canadian National Railways?
2.	If so, what are the details of these contracts, the names of bidders, the amounts of the tenders for each, and the length of said contracts?


Hon. Judy V. LaMarsh (Secretary of Slate):: I am informed by all the departments and crown corporations as follows: 1. No.
2.	Not applicable.


FEDERAL CONTRACTS WITH SONAREX LTD., QUEBEC
Mr. Ricard: 1.	Does Sonarex Ltd., 500 Grande Allee East, Quebec city, hold any contracts from any federal department or any crown corporation?
2.	If so, what are the details of these contracts, the names of bidders, the amounts of the tenders for each, and the length of said contracts?


Julia Verlyn (Judy) LaMarsh: I am informed by the Department of Public Works as follows: 1. Yes.
2.	Sonarex Ltd. is carrying out an appraisal of six houses in Quebec city which may be required for government purposes. For this type of work there are no tender calls, but a submission of a fee estimate, which in this case is $808.85. There is no set time limit but a stipulation is that the work must be done promptly.


C.N.R. CONTRACTS WITH TRANSOL LTD., QUEBEC
Mr. Ricard: 1.	Does Transol Ltd., 500 Grande Allee East, Quebec city, hold any transportation contracts on behalf of the Canadian National Railways?
2.	If so, what contracts does it hold?
[Mr. LaingJ
3.	Were tenders called in each?
4.	If so, what are the names of the tenderers and the amount of each tender?
5.	How long have these contracts been in existence and for how many years will they remain in force?


Mr. J. A. Byrne (Parliamentary Secretary fo Minister of Transport):: The management of Canadian National Railways advises as follows: 1. Yes.
2,	3 and 5. A list of eligible carriers was obtained from the Quebec transportation board and those carriers were invited to submit bids for the over the highway cartage services between Levis, Quebec and L'lslet-ville and Riviere-du-Loup and L'lsletville, serving intermediate points. Transol Inc. submitted the lowest tender and contracts dated October 9, 1963, were entered into with that firm for an unspecified period of time, subject to termination by either party on 30 days' written notice.
In addition, the railway on occasion requires extra vehicles to handle the delivery of carload freight locally in Quebec city and on such occasions it utilizes the services of Transol Inc. as well as those of other cartage companies, depending upon the availability of trucks.
4. It is not the practice of the company to disclose names of firms or persons submitting tenders nor to disclose information respecting proposals received.


EDUCATIONAL SUPERVISION CHIEF, INDIAN AFFAIRS
Mr. Orlikow: 1.	Who is the chief of the educational supervision division of the education directorate of the Department of Indian Affairs and Northern Development?
2.	How long has he held the position?
3.	What are his academic qualifications?
4.	What is his previous experience in working with Indians either in the department or elsewhere?
5.	What are his duties and responsibilities and to whom does he report?


Arthur Laing: 1. Mr. Leslie George Postille Waller.
2.	Since April 1, 1956.
3.	Academic qualifications, (a) Alberta University, B.A.; (b) Alberta University, M.A.; (c) Alberta University, Professional teacher's certificate; (d) Alberta University, B. Ed.
4.	Mr. Waller held the position of regional inspector of Indian schools in the Alberta region from 1951 to 1956; during that period
March 13, 1967

he had close contact with Indian children, their parents and band councils.
5.	His duties and responsibilities are: Under direction responsible for the supervision of a field staff of school administrators and specialists; direction of the joint school capital program; analyses of data in the fields of school administration and curriculum for the purpose of policy making; supervision of the teacher's registry and statistical sections; serves as consultant in federal-provincial negotiations on Indian education. Mr. Waller reports to the director of education.


UNEMPLOYMENT AND INCOME FIGURES, QUEBEC CONSTITUENCIES
Mr. LeBlanc (Rimouski): 1.	What were the unemployment figures for the past five years In the following constituencies: Rimouski, Matapedia-Matane, Rivifere-du-Loup-Tomiscouata?
2.	What is the income growth index over the past five years for these constituencies?
3.	What is the income growth index over the past five years for these constituencies, as compared to the national average?


Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of Manpower and Immigration and National Revenue as follows: 1. Unemployment figures are not available for electoral districts.
Annual averages of unplaced applicants on file in the Canada manpower centres in the Gaspe are shown below for each of the past five years.
1962 1963 1964 1965 1966 Causapscal	1,884	1,862	1,728	1,489	1,327Matane	2,352	2,274	1,724	1,724	1,701Rimouski	3,570	3,226	2,707	2,510	2,504Riviere-du-Loup 4,031	4,016	3,534	3,362	3,273
The area served by the Causapscal Canada manpower centre includes most of the county of Matapedia, as well as four townships in the county of Bonaventure. The Matane centre serves most of the county of Matane and part of Gaspe North. The Rimouski centre serves all of the county of Rimouski and small parts of the counties of Matane and Matapedia. The area served by the Riviere-du-Loup Canada manpower centre consists of the county of Temiscouata (this census county includes the provincial county of Riviere-du-Loup) and the county of Kamouraska.
2	and 3. Statistics relating to incomes of individuals as reported on tax returns are not maintained on the basis of electoral constituencies.
Questions
The taxation division of the Department of National Revenue publishes annually a book known as "Taxation Statistics" which provides aggregates of income figures compiled from tax returns for counties or census division as well as for Canada as a whole.


REPAYMENT OF NATIONAL DEBT
Mr. Godin: How many years will it take the government of Canada to reimburse the debts it has been accumulating since 1867?


Hon. Mitchell Sharp (Minister of Finance):: The government of Canada's outstanding debt represents the cumulative total of all government cash deficits less surpluses since 1867. The deficits have been financed through the sale of cash securities while surpluses have been used to reduce the total of securities outstanding. Changes in debt for any period of time, assuming a constant cash balance, represent the difference between government cash receipts and expenditures of all kinds and are, therefore, the consequence of the government's fiscal operations. Since these fiscal operations have a very important effect upon Canada's economy, fiscal policy must take into account prevailing economic circumstances and the probable consequences of any action taken. It is not possible to predict when economic circumstances would make it appropriate for fiscal policy to aim at achieving cash surpluses. It is, therefore, not possible to forecast whether or to what extent the government would consider it appropriate to reduce or eliminate all its outstanding debt.


CHANGEOVER TO CANADA MANPOWER SERVICES
Mr. Irvine: 1.	What was the total cost of changing the national employment services over to Canada manpower services?
2.	Of this amount, how much was expended in (a) alterations in buildings, including signs (b) letterhead stationery etc. (c) advertising (d) other?


Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of Manpower and Immigration and Public Works as follows: 1. $583,371.87.
2.	(a)	$508,867.84;	(b)	$43,532.90;	(c)
$23,319.93; (d) $7,651.20.

March 13. 1967
Questions


WINTER WORKS PROJECTS, LONDON, ONT.
Mr. Irvine: What is the total amount of projects approved under the winter works program during the current season in the city of London, Ontario?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: The answer to the question is as follows. During the current municipal winter works incentive program, 21 projects have been approved for the city of London, Ontario. The total cost of these projects is estimated to be $4,367,443 with the estimated federal government incentive payment amounting to $509,375.


STRENGTH OF ARMY UNITS
Mr. Harkness: 1.	As at December 31, 1966, what was the strength of (a) each of the armoured regiments (b) each of the artillery regiments (c) each of the infantry battalions (d) each of the engineer squadrons (e) each of the signal companies or squadrons?
2.	In each of the above cases, what is the war establishment of these units?


Hon. Paul Hellyer (Minister of National Defence):: 1 and 2. It has not been considered to be in the public interest to divulge war establishments of military units, nor is it departmental policy to release individual unit strengths. However, as of December 31, 1966, there were (a) four armoured corps regiments with a total strength of 1,979; (b) four artillery regiments with a total strength of 2,266; (c) 13 infantry battalions with a total strength of 8,709; (d) four engineer squadrons with a total strength of 962; and (e) a signals regiment and1 brigade signal squadrons with a total strength of 1,176.


REPRINTS OF DEFENCE MINISTER'S SPEECH
Mr. Harkness: 1.	How many reprints on smooth paper were produced of the speech made by the Minister of National Defence on moving second reading of Bill C-243?
2.	What was the distribution of the copies of this speech?
3.	What was the cost and to what vote was it charged?


Paul Theodore Hellyer: 1. 45,240.
2.	About 29,500 copies were sent to units of the regular and reserve force for distribution to personnel. 8,070 copies were distributed to news media, including service newspapers, military writers, other government
[Miss LaMarsh.l
departments, foreign military establishments, veterans associations and interested individuals.
3.	$5,397.92. Fe 609030 Div 71 est 1339 Vote 200 Prim 09 Obj 095 Sub Alct 30.


C.N.R. STATION, MONCTON, N.B.
Mr. Coates: 1.	Is it the intention of the Canadian National Railways to enlarge and improve the facilities available to passengers using the C.N.R. station at Moncton, N.B.?
2.	On what date was the station at Moncton opened to the public, and have many complaints been received by the management of the Canadian National Railways regarding the facilities in existence at the present time?


James Allen (Jim) Byrne: The management of Canadian National Railways advises as follows: 1. Yes, but plans for an extension to the Moncton station are being deferred until a proposal to relocate the main railway line through the city has been fully investigated.
2.	November 3, 1963. Representations to enlarge have been received.


ANDRE SIMARD-EMPLOYMENT BY FEDERAL GOVERNMENT
Mr. Howard: 1.	Since January 1, 1966, have any representations been made to the Minister of Indian Affairs and Northern Development regarding employment for one Andre Simard and, if so, what is the name, occupation (if known), and address of each person who made such representations, the employment asked for, and the details of any reply?
2.	Is the said Andre Simard currently employed by the government of Canada and, if so, in what capacity, for what term, and at what salary?


Julia Verlyn (Judy) LaMarsh: I am informed by the Minister of Indian Affairs and Northern Development and the Civil Service Commission as follows: 1. A representation has been received, but the details are of a privileged nature. The reply advised that the candidate was not successful in the particular competition.
2. No.


REPRINTS OF SPEECH BY DEFENCE MINISTER
Mr. McCleave: 1.	Who ordered the printing and publication of "Address on The Canadian Forces Reorganization Act, the Hon. Paul Hellyer, Minister of National Defence. On moving second reading of Bill C-243 in the House of Commons December 7, 1966"?
March 13. 1967

2.	Who printed the said publication?
3.	Who edited the speech before publication?
4.	Why were interjections of various hon. members not included in said publication?
5.	How many copies were printed, and where were they distributed?
6.	What is the estimated cost of printing and
distribution?
7.	What was the purpose of printing such publication?
8.	Did those responsible consider the alternative of distributing copies of Hansard of that day?
Hon. Paul Hellyer (Minister of National
Defence): 1. The Minister of National Defence.
2.	The Queen's Printer.
3	and 4. The publication contains the speech prepared for delivery by the minister with the addition of a number of illustrations. There are minor variations from the speech as recorded in Hansard. No editing of the speech was done before publication.
5.	45,240. About 29,500 copies were sent to units of the regular and reserve force for distribution to personnel. 8,070 copies were distributed to news media, including service newspapers, military writers, other government departments, foreign military establishments, veterans associations and interested individuals.
6.	Printing, $5,397.92; distribution was made through service facilities.
7.	To provide members of the armed forces and others interested in Bill C-243 with a convenient reference document of the background and explanatory material given by the minister in support of the bill.
8.	Yes.


RECRUITING DRIVE, MANPOWER AND IMMIGRATION DEPARTMENT
Mr. Hales: Is there a recruiting drive to hire 500 university graduates for the Department of Manpower and Immigration and, if so (a) how many people has the department hired to interview these graduates (b) how many students have been interviewed for these positions (c) how many graduate students has the department hired to date (d) did these students write civil service examinations and, if so, by whom were these examinations (i) set, and
Questions
(ii) conducted (e) who made the final selection and under what circumstances-the department or the Civil Service Commission (f) for what positions in the department were these graduates hired?


Julia Verlyn (Judy) LaMarsh: I am informed by the Civil Service Commission as follows: Yes.
(a) None; (b) 1,589 as of February 6, 1967; (c) 10 as of February 6, 1967; (d) Under delegated authority from the Civil Service Commission, pursuant to section 39 of the Civil Service Act, departmental officers conducted the interviews in (b) above to ascertain whether or not candidates possessed the qualifications prescribed by the Civil Service Commission under section 33 of the act. No written examination was used, (e) The department, under delegated authority from the Civil Service Commission under section 39 of the Civil Service Act. (f) As manpower counsellor trainees at the various Canada manpower centres across Canada.


CANADIAN INVESTMENT BY FIRST NATIONAL CITY BANK
Mr. Reid: Does the First National City Bank of New York have any investments in Canada in the financial field at present other than the Mercantile Bank and, if so (a) what are the names of the companies it has invested in and what is the extent of their investment in these companies (b) what is the nature and extent of the business of these companies in which the First National City Bank of New York has an interest (c) do these institutions raise money in the Canadian market and, if so, how much have they raised during the last seven years, by year, and to what use are these funds put?


Mitchell William Sharp: (a), (b) and (c): The only known investment of the First National City Bank of New York in Canada, other than the Mercantile Bank, is the International Trust Company, formerly the Mercantile Trust Company. This is a Quebec incorporation and reports of the inspector of trust companies for that province show that it had the following amounts of assets and liabilities in company funds and guaranteed funds:
As at Dec. 31	Company funds	Guaranteed funds	Total1960	$ 181,967	$ -	$ 181,9671961	605,152	105,984	711,1361962	625,335	1,827,656	2,452,9911963	760,227	485,824	1,246,0511964	1,270,174	7,902,988	9,173,1621965	2,329,900	21,004,770	23,334,670
March 13, 1967
Questions
It is believed that nearly all the amount in public. The distribution of assets in guaran-guaranteed funds was borrowed from the teed funds was as follows:
As at Dec. 31	Cash in banks	Stocks	Bonds and Debentures	Loans against securities	Mortgages1960	$ -	$ -	$ -	$ -	$ -1961	104,375	-	-	1962	825,035	-	298,020	-	602,4771963	263,022	-	-	-	222,8031964	74,987	-	5,074,030	750,966	2,003,0051965	3,945,652	290,438	9,098,195	509,449	7,161,037


PRESERVATION OF TOTEM POLES, UNIVERSITY OF BRITISH COLUMBIA
Mr. Priiiie: 1.	Has the Department of Indian Affairs and Northern Development been informed that a number of irreplaceable totem poles at the University of British Columbia are rotting because of lack of a museum in which to preserve them?
2.	Has the University of British Columbia requested the department for financial assistance to construct a museum for the preservation of these totem poles?
3.	If the answer to part 2 is yes, what reply did the department make to the University of British Columbia?


Arthur Laing: 1. The department has been informed that a number of totem poles are at the University of British Columbia. However, I am informed that these poles are not rotting as they have been treated with a wood preservative and are adequately protected from the elements by suitable coverings.
2.	No.
3.	Not applicable.


VISIT OF U.S. NUCLEAR SUBMARINE TO ST. JOHN'S, NFLD.
Mr. Crouse: 1.	Did a United States nuclear submarine visit St. John's, Newfoundland, on February 6, 1967?
2.	If so, was permission given by Canadian authorities for this landing?


Mr. D. S. Macdonald (Parliamentary Secretary to Secretary of State for External Affairs):: 1. Yes.
2. Yes.


EFFECT OF CHAIN STORE BUYING PRACTICES
Mr. McCutcheon: 1. Has the Department of Agriculture ever studied the impact of chain store buying practices on the small food processors and producers groups?

2.	If so, what were the findings?
3.	If not, would the department consider such an investigation?


Hon. J. J. Greene (Minister of Agriculture):: 1.	No.
2.	N/A.
3.	Yes.



Mr. McCutcheon: 1.	Has the Department of Industry ever studied the impact of chain store buying practises on the small food processors and producers groups?
2.	If so, what were the findings?
3.	If not, would the department consider such an investigation?


Hon. C. M. Drury (Minister of Industry):: 1. No.
2.	Does not apply.
3.	Since this matter has already been studied by the royal commission on price spreads and the combines investigation branch, the Department of Industry does not believe that an additional study is warranted at this time.


DISPOSITION OF PART OF FORT OSBORNE BARRACKS, WINNIPEG
Mr. Sherman: What are the present plans of the Department of National Defence with respect to the future of the old section of Fort Osborne barracks in Winnipeg, and (a) does the department intend to sell these facilities (b) if so, what date is envisioned for the sale (c) how will the sales procedure be carried out?


Hon. Leo Cadieux (Associate Minister of National Defence):: The old section of Fort Osborne barracks in Winnipeg will be used by the Pan American Games Association during the summer of 1967. No decision has been taken on the future use of this property.
March 13, 1967


INFANT MORTALITY RATES
Mr. Dinsdale: 1.	What was the infant mortality rate in Canada for each of the past ten years among (a) Indians (b) Eskimos (c) other Canadians?
2.	What are the reasons for any differences which might exist between the three groups?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: 1.	Infant mortality per 1000 live births		
(a)	(b)	(c)Year	Indian	Eskimo	All Canadians1956	96	238	321957	85	228	311958	86	235	301959	75	206	281960	79	210	271961	76	211	271962	75	194	281963	70	157	261964	62	94	251965	Not available	95	24
Data on Indian infant mortality for 1965 are not yet complete but present indications are that the downward trend has continued in 1965 and in 1966, preliminary figures suggesting the rates may now be around 60. Although still two and a half times the national infant mortality rate, Indian infant mortality has been reduced in the past decade by 36 per cent to less than two-thirds of what it was in 1956.
Eskimo infant mortality, originally fairly consistently some seven to eight times the comparable national rate has, since 1961, been reduced by 61 per cent to 39 per cent of what it was in 1956 and is now less than four times the current national rate.
In the same period the national infant mortality rate has declined by 23 per cent to 77 per cent of what it was in 1956. The decline in both Indian and Eskimo infant mortality has, therefore, been more rapid, in the case of the Eskimos almost three times as rapid.
2. The Indian infant mortality rate is high compared to the rate for all Canadians largely due to the fact that some 25 per cent to 30 per cent of pregnant Indian women still do not take advantage of available medical services and a further 30 per cent only report late in pregnancy and reap relatively little benefit. The infant mortality rate amongst children of Indian mothers who do make adequate use of the services available to them is around 30 per 1000 live births or very little in excess of the national 23033-878
Questions
rate. Some 12 per cent of Indian mothers, usually older women, still seem to prefer to be delivered in their own homes by untrained native midwives and the infant mortality amongst the children of these mothers is around 17 per cent as against 3 per cent among women making proper use of available medical and nursing care.
The reasons for the continuing higher infant mortality amongst Eskimos, the total number of actual deaths involved in 1965 being 50 deaths of children under one year of age out of 524 born that year, are mainly associated with the special hardships inherent in their traditional way of life to which Eskimos expose their children. The principal causes of Eskimo infant mortality are outstandingly pneumonia and accidents. The severity of the climate, the types of dwellings they use, ignorance of safe domestic hygiene and good feeding practices, often inability to apply what knowledge they have when travelling or camping for lack of facilities, all play a part. Remoteness and inaccessibility frequently feature as contributory factors, resulting in delay in getting medical aid. This affects some Indian groups also but to a lesser extent than Eskimos where climatic conditions more often complicate communication and transport difficulties. Some Indians and Eskimos, also, still show some reluctance in seeking medical aid promptly, tending to delay until the situation is critical before calling for help.


WAR ON POVERTY EXPENDITURES
Mr. Peters: 1.	What is the total amount of federal funds that have been spent, as of December 31, 1966, on all the programs comprising the government's "war on poverty" since its inception?
2.	How do these expenditures break down by major program categories?


Mr. John R. Matheson (Parliamentary Secretary to Prime Minister):: 1. and 2.
While a large number of continuing programs form a part of the federal anti-poverty and opportunity program, there were seven major programs between April 1965 and December 31, 1966: (a) Expanded ARDA programs, $33,006,577. (b) Area development agency: grants for industry, $1,000,000. (c) Manpower programs: (i) Manpower mobility program, $1,000,000; (ii) Technical and vocational training agreement, $275,575,386; (iii) Older workers program vocational rehabilitation, $1,713,000; Total manpower, $278,288,386. (d) Canada Assistance Plan: Claims not yet

March 13, 1967
Questions
received from provinces: projected per year, $85,000,000. (e) Department of Fisheries: Centralization program for families in outlying areas, $480,000. (f) Company of Young Canadians: July 1966 to December 1966, approximately, $600,000. (g) Health resources fund: July 1966 to December 1966, no firm commitments: projected in first year, $20,000,000.


ESTABLISHMENT OF ZOO IN CAPITAL REGION
Mr. Bell (Carlelon): 1.	Have any representations been made to the government and/or the national capital commission for financial or other assistance in the establishment of a zoo in the national capital region?
2.	If so, what has been the nature of such representations?
3.	What consideration has been or is being given to them?
4.	When may a decision be anticipated?
5.	Has the national capital commission suggested any site for such zoo?
6.	If so, where is such site located?


George James McIlraith: 1. Yes.
2. The Ottawa Board of Trade proposed the establishment of a zoo in the Ottawa area. Envisioned was a zoological garden located on a 200 acre site, partially on city of Ottawa property and partially in the green belt, in the vicinity of Green creek, north of the Queensway.
3.	The centennial administrator, to whom the proposal was referred by the then minister of transport, reviewed it in consultation with the N.C.C. He concluded that this was not an appropriate centennial project. However, the chairman of the N.C.C. considered that a joint committee might be an avenue for the consideration of the proposal for the consideration of the proposal for the establishment of a zoo.
4.	The idea is not under active examination at this time.
5 and 6. It was thought by the N.C.C. that suitable land might be available in either the green belt or the Gatineau park.


COMPLETION OF ROADS TO RESOURCES PROGRAM
Mr. Korchinski: 1.	How many miles of roads have not been completed in each province under the roads to resources program?
2.	What is the estimated cost which would be involved in completing these programs in each province?
3.	What plans does the federal government have to complete these roads?


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: 1.
Total by provinces*
Federal Unexpended
Estimated	share	Balancetotal	contributed	ofProvince	mileage of project	Mileage approved	Mileage completed	Mileage incomplete	to the program	federal shareAlberta	.. 407.65	326.48	326.48	81.17	$ 7,420,984.04	$ 79,015.94British Columbia	.. 323.00	213.00	188.00	135.00	7,339,011.07	160,988.93Manitoba	.. 719.50	339.60	338.80	380.70	7,500,000.00	NilQuebec	.. 181.00	181.00	179.00	2.00	7,500,000.00	NilNew Brunswick	.. 439.40	263.50	263.40	176.00	6,749,999.39	750,000.61Newfoundland	.. 270.78	270.78	270.78	Nil	5,653,576.94	1,846.423.06Nova Scotia	.. 489.50	357.00	350.10	139.40	7,488,792.42	11,207.58Ontario	. . 578.00	364.00	332.00	246.00	7,254,394.80	245,605.20P.E.I	.. 450.00	429.90	411.40	39.20	6,992,951.80	507,048.20Saskatchewan	... 941.60	469.70	455.60	486.00	6,792,704.75	507,295.254,800.43	3,214.96	3,115.26	1,685.47	70,692,415.21	4,307,584.79
* March 1, 1967.
2. No current estimates have been made of cost of completing road mileages in excess of funds available under the terms of the agreements with each province.

3.	The government fully intends to complete its contractual obligations under the roads to resources program.
March 13. 1967


LEVIS, QUE. POSTMASTER
Mr. Caoueite: 1.	How long Is it since Mr. L. P. Sirois retired as postmaster of Levis?
2.	What was the result of the competition organized to find a replacement for him?
3.	Will a new competition be held?
4.	Who has taken over the position in the meantime and how many months has he been in charge?
tTranslation]


Hon. Jean-Pierre Cote (Postmaster General):: 1.	June 30, 1966.
2.	Mr. J. H. Gelinas, Postmaster, Cap-de-la-Madeleine was selected as a replacement.
3.	No.
4.	Mr. J. D. A. Fradette has been Acting Postmaster since June 30, 1966.


RADAR STATION, SAINT-SYLVESTRE, QUE.
Mr. Caoueite: Regarding the radar station in Saint-Sylvestre (Lotbinifere), which is no longer in operation (a) what was the cost of construction (b) when was it finished (c) for how many years was it in operation (d) when did it cease operating, and for what reason (e) by whom and to whom was it sold (f) for what amount?


Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of National Defence and Defence Production as follows:
(a)	$13,200,000 (Canada's share $1,740,000);
(b)	1954; (c) Ten years; (d) 1964, as it became redundant due to increased coverage of other radar sites; (e) By Crown Assets Disposal Corporation to Domaine St. Sylvestre Inc., Victoriaville, Que.; (f) $120,030.


IMPORTS OF SEMI-FINISHED TEXTILES
Mr. Allard: 1.	Did Canadian textile companies import semifinished products such as yellow cotton, in 1966 and in 1967 and, if so (a) are these unfinished textile products spun and woven abroad and subsequently bleached and printed in Canadian textile industries and then sold as Canadian products (b) what countries send these semi-finished textile products, and which Canadian textile companies promote such imports?
2.	Are these semi-finished textile products part of voluntary self-imposed quotas accepted by Japan, Hong Kong and other countries which have accepted voluntary quotas with regard to Canada?
3.	Do these semi-finished textile products enter Canada as raw materials and as such, are they subject to low Canadian duty rates?
4.	What was the quantity and the overall value of semi-finished textile imports as compared with all textile imports into Canada, for the years 1965 and 1966?
Questions


Mitchell William Sharp: 1. (a) (b) A variety of types of textile products at varying stages of manufacture are imported by Canadian textile companies for further processing in Canada. These include greige woven cotton fabrics which are bleached, printed or otherwise finished in Canada. Many countries export partly-processed textile products to Canada for further manufacture, tout because of the statistical problem, (explained below in answer to question 4) it is not possible to identify the particular countries or the particular Canadian companies involved.
2.	The limits applied by a number of countries on their exports of certain textile products to Canada generally do not exempt partly processed products which are intended for further manufacture in Canada.
3.	The rates of duty for textile products generally increase with the degree of processing, although there are a few exceptions. Thus partly processed products generally bear lower rates of duty than fully processed goods.
4.	The value of all textile imports in 1965 was $581,880,000. The 1966 figure is not yet available. It is not possible to divide this figure between semi-finished and fully finished products. This is because no distinction is made in DBS import statistics between greige fabrics imported for use as such and those imported for further processing. For some types of textile products both partly finished and fully finished products are grouped together in the statistics.


ARDA REPORT ON EASTERN NOVA SCOTIA
Mr. MacEwan: Has the report of the joint task force of ARDA on the nine eastern counties of Nova Scotia been completed, and (a) if so, has it been submitted to the government (b) if not, when is it expected that this report will be completed?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: (a) The report by the joint task force of ARDA on the nine eastern counties of Nova Scotia has not been completed, (b) It has not been submitted to the government, (c) It is expected that this report will be completed and submitted to the government by March 15.


DISMISSALS OF CIVIL SERVANTS FOR CAUSE
Mr. Winkler: How many civil servants have been dismissed for cause in the last year for which statistics are readily available?

March 13, 1987
Questions


Julia Verlyn (Judy) LaMarsh: I have been given the following information by the Civil Service Commission, which covers all employees under the Civil Service Act: 159 employees for the year 1966, and 453 employees were rejected during probation.


FEED GRAIN SUBSIDY, NEW BRUNSWICK
Mr. Fairweather: What amount of money did the government of Canada pay in the way of subsidy or any other assistance for feed grain coming into the province of New Brunswick for each of the years 1965 and 1966?


Maurice Sauvé: Transportation assistance on feed grains shipped to the province of New Brunswick in the fiscal year ending March 31, 1965 amounted to $1,118,529.31, and in the fiscal year ending March 31, 1966 amounted to $1,156,724.12. During these two years the government of Canada also paid winter storage charges on grains. Due to the loss of identity of the grain on conversion to animal feeds it is not possible to give an accurate provincial expenditure. It is estimated feed grains and feeds shipped to New Brunswick were assisted under this program by $31,746 in the fiscal year ending March 31, 1965 and $33,503 in the fiscal year ending March 31, 1966.


PRODUCTION OF FILM ON SEAL HUNT
Mr. MacRae: Did the government co-operate in the making of the films which were taken by the officials of the society for the prevention of cruelty to animals during the 1966 seal hunt in the gulf of St. Lawrence and, if so, did the government approve of the said films as being an authentic record of sealing operations in 1966?


Hon.   H.-J. Robichaud@Minister of Fisheries: The Department of Fisheries provided aerial transportation for a number of officials representing humane and conservation organizations to visit the area of the seal hunt in the gulf of St. Lawrence in 1966. Some, if not all, of these officials on their own initiative took still and/or moving films of scenes at the hunt, using their own equipment. None of this photographic material was submitted to the department for verification of authenticity.


MANPOWER RETRAINING PROGRAM, ST. JEROME, QUE.
Mr. Godin: 1.	Under the manpower retraining program, to which province and to what kind of employment

are the unemployed workers of the shoe manufacturing industry, particularly those from St. Jerome, Quebec, being sent?
2.	What was the number of unemployed persons registered in this community as at December 31, 1966?
3.	Of this number, how many have since found employment?


John Carr Munro: 1. Unemployed workers from the shoe manufacturing industry at St. Jerome have been referred to employment at General Motors, Ste. Therese, and at Canadair, Montreal, in the main. To date, no such workers have been referred outside the province of Quebec.
2.	1,489 men and 664 women.
3.	The Canada Manpower Centre has placed 347 persons in the period between December 31, 1966, and February 24, 1967. The total number who have found employment on their own initiative is not known, but 89 of those who lost their employment in the shoe manufacturing industry are reported to be in permanent employment.


LIVESTOCK FEED BOARD
Mr. Godin: When will the livestock feed board (Bill C-218) come into operation, and will the farmers in the regions concerned benefit through a decrease in the price of grain?


Maurice Sauvé: As was stated in the house on February 9th it is expected that appointments to the Canadian livestock feed board will be made before March 15. It is not expected there will be any immediate effect on the price of feed grains when this board is appointed. This board will, within the powers provided by the Livestock Feed Assistance Act, take steps to ensure the objects are attained within a reasonable period of time.


ESTATE TAX, SASKATCHEWAN
Mr. Pascoe: 1.	What was the total amount paid in Saskatchewan in estate tax for the year 1966, and how was this amount shared by the federal and provincial governments?
2.	Has the government entered into an agreement with the government of Saskatchewan to eliminate the collecting of this tax in that province and, if so, when will the necessary legislation be introduced in this house?
March 13, 1967


Edgar John Benson: 1. The amount shared by the federal and provincial governments is the amount of estate tax assessed, allocated on the basis of property which was situated in the province of Saskatchewan. For the fiscal year 1965-66 this amount was $3,206,000 of which 75 per cent would go to the provincial government and 25 per cent to the federal government.
2. No.


NATIONAL REVENUE OFFICE, CHATHAM, ONT.
Mr. Danforth: Has a decision been reached by the Department of National Revenue to open up a new office in Chatham, Ontario, to deal with taxation and if so (a) what is the number of employees contemplated for the staff (b) what procedures will be followed to obtain the necessary office space (e) will space be available in present offices leased or rented by the government or will additional office facilities be procured?


Edgar John Benson: The Department of National Revenue, taxation division, has no plans to open up a new office in Chatham, Ontario.


&quot;CAPITAL COST ALLOWANCE&quot; RESPECTING OLD AGE SUPPLEMENT
Mr. Coates: 1.	What is the meaning of "Capital Cost Allowance" as set-out as an example of a deduction that can be made against rents received insofar as the guaranteed income supplement is concerned and which is more particularly described as item 7, on page 10, of the guaranteed income supplement folder distributed to recipients of old age security?
2.	Can an applicant for the old age supplement use a deduction from rents received, property tax, insurance and capital cost allowance?


Allan Joseph MacEachen: 1. Capital cost allowance referred to in section 7 on page 10 of the guaranteed income supplement booklet is a term found in the Income Tax Act and regulations. It is an amount which may be deducted in computing income in lieu of depreciation. Section ll(lXa) is the authorizing section of the Income Tax Act and parts XI and XVII of the regulations set out the amounts which may be deducted.
2. Yes.


APPLICATIONS FOR OLD AGE SECURITY SUPPLEMENT
Mr. Diefenbaker: 1. How many persons, by province, as of this date, have been notified that their applications
Questions
for the supplementary payment under the recent amendments to the Old Age Security Act, of $30 per month, have been approved?
2.	How many applications for the supplement have been received, by province, as of this date?
3.	In how many cases have the applicants been informed that their applications have been turned down as being unqualified because they have means or income which denies them the said payment?


Mrs. Margaret Rideout (Parliamentary Secretary to Minister of National Health and Welfare):: 1. None. It is not planned to send any notification prior to the issuance of the cheques. Those who applied for $30 and whose applications have been approved in time for the payment to be included in the March old age security cheque will receive a cheque for $165 at the end of March. Those eligible for the $30 supplement who do not receive an adjustment in the March cheque will receive a payment of $195 in the April cheque issue.
2. At the close of business on February 27, 1967 the following applications had been received:
Newfoundland	17,619
Prince Edward Island	6,407
Nova Scotia	32,305
New Brunswick	21,903
Quebec	142,474
Ontario	158,100
Manitoba	40,352
Saskatchewan	30,277
Alberta (including Yukon the Northwest Territories)	38,875
British Columbia	68,695
Total	557,007
3. No information is available at this time. However, as the work of checking, making determination of eligibility and notifying applicants proceeds in the weeks ahead data will be available.


REGULOTIONS UNDER CANADA ASSISTANCE PLAN
Mr. Smith: 1.	Have any regulations under the provisions of section 9 of the Canada Assistance Plan been made?
2.	If so, what are those regulations?
3.	If not, when is it expected that regulations will be made and published?
4.	What provinces have entered into agreements with the government of Canada under the provisions of section 4 of the Canada Assistance Plan?

March 13, 1987
Questions


Margaret Isabel Rideout: 1. Yes.
2.	The Canada Assistance Plan regulations were made by order in council P.C. 1967-143 of January 26, 1967, and were published in the Canada Gazette on February 8, 1967.
3.	See answer 2 above.
4.	Agreements under the Canada Assistance Plan were sent to the provinces during the week of February 20 for consideration and signature; replies are expected within a few days.


TRAVEL BUREAU OFFICES ABROAD
Mr. Isabelle: In what countries does the Canadian Government Travel Bureau maintain offices?


Mr. Jean-Charles Cantin (Parliamentary Secretary to Minister of Trade and Commerce):: At the end of the fiscal year 1965-66, the travel bureau had offices located in London, England; Paris, France; Frankfurt, Germany; Mexico City, Mexico; Tokyo, Japan; Sydney, Australia and Amsterdam, The Netherlands.
In the United States of America, offices of the travel bureau are located in the following cities-New York, Los Angeles, San Francisco, Minneapolis, Chicago, Boston, Cleveland, Detroit, Washington, Seattle, Denver, Philadelphia, Rochester, Cincinnati and Indianapolis.
In 1967, the bureau proposes to open a new office in Copenhagen, Denmark, and one in Rome, Italy.


LANGUAGES OF TRAVEL BUREAU LITERATURE
Mr. Orange: Does the Canadian Government Travel Bureau or any other agency of the government produce and distribute tourist literature in languages other than English and French?


Jean-Charles Cantin: The Canadian Government Travel Bureau continues to increase its production of travel literature in languages other than English and French. A good start has been made in producing travel literature in German and Japanese, and more publications will be available this year in these languages as well as Dutch, Spanish, Italian, Swedish, Danish, Norwegian and Finnish.


RETIREMENT AGES OF ARMED FORCES OFFICERS
Mr. Hales: 1.	What is the normal compulsory retirement age for officers of the rank of commander, R.C.N., lieutenant-colonel, army, and wing commander, R.C.A.F.?
2.	Are any officers of that rank and above that age still drawing full service pay and if so (a) what is the name, rank, pay and allowances, and post of each (b) are such officers singled out for special treatment in regard to continuous service pay and, if so, for what reasons?
3.	Is such over-age employment taken into account in calculating the pension of these officers?
4.	What is the estimated retirement date of each, and on that basis, what is the estimated pension each will draw?


Léo Alphonse Joseph Cadieux: 1.	Commander
Lieut. Colonel	Wing Commander
Officers other than medical instructors and chaplains	 50
Medical and instructor officers....	51
Chaplains	 55
Officers other
than Chaplains 51 Chaplains	 55
Officers on flying
list	 49
Non-flying list .. 51 Chaplains	 55
2.	No.
3.	Pensionable service is based upon full time paid service and any officer employed beyond his compulsory retirement age would be allowed to have such service taken into account.
4.	Not applicable.


REPORT ON PRINCE EDWARD ISLAND CAUSEWAY
Mr. Macquarrie: 1. By whom was O. J. McCulloch commissioned or requested to prepare a report on the design for the Northumberland strait crossing?
March 13, 1967

2.	Was a copy of his report sent by the government of Prince Edward Island to any department of the government of Canada?
3.	Does Mr. McCulloch in this report propose that a level causeway could be constructed at a cost of approximately $60,000,000?
4.	Does Mr. McCulloch in his report express doubt that the bridge and tunnel approaches of the presently projected crossing could withstand the extremely severe ice conditions which prevail in the Northumberland straits?
5.	Is Mr. McCulloch's report currently under study by the Department of Public Works and are alterations in the projected design under contemplation?


George James McIlraith: 1. Mr. O. J. McCulloch was not commissioned or requested to prepare a report on the design of the Northumberland strait crossing by any department or agency of the government of Canada.
2.	No, but Mr. McCulloch sent a commentary to the Department of Public Works in July, 1966. A revised version was received from him on February 6, 1967.
3.	Yes. However, the estimate of $60 million does not cover damage to property resulting from changes in tidal elevations that would result if a solid crossing were to be constructed.
4.	Yes.
5.	Yes. Studies completed to date do not indicate any need for changes in the design.


FILING OF CONFIDENTIAL CENSUS REPORTS
Mr. Crouse: 1.	Is consideration being given by the Department of Trade and Commerce to a later date for filing of confidential census reports covered by retail forms numbered 01, 03 and 07 which require by law a filing within three weeks of their receipt by merchants, with a threat of penalties for noncompliance? [DOT]
2.	So that small firms will be in a position to provide the information specified: will the department give consideration to extending the filing date to April 30, the same date required by the Income Tax Act?


Jean-Charles Cantin: 1 and 2. The Dominion Bureau of Statistics is constantly striving to produce more statistical data as quickly as possible. In this respect, the bureau continually seeks to improve and simplify its methods of gathering information and providing accurate and up-to-date information. In order to do this, D.B.S. is dependent on the co-operation of respondents in getting the information to the bureau at the earliest practical date.
Orders for Returns
The 1966 census of retail and service business, which is conducted at five year intervals, is a large undertaking involving over 200,000 retailers and service business operators. The 1966 questionnaires are much shorter and easier to complete than the 1961 forms.
However, if any firm requests an extension of time due to unusual circumstances, it will be given consideration.



QUESTIONS PASSED AS ORDERS FOR RETURNS


[Stage Direction]
Question 2,369-Mr. Orlikow:
1.	What is the dollar value of equipment purchased by the government of Canada in each of the past ten years from the Continental Telephone Supply Company of New York city?
2.	Of this amount, how much was purchased by each government department?
3.	What types of equipment were purchased from the Continental Telephone Supply Company by government departments?
4.	What was the purpose of the purchase of this equipment?
Return tabled.
Mr. Irvine: 1.	How many people are employed in the city of London, Ontario, by the federal government?
2.	Of this number how many come under the Civil Service Commission?
3.	How many do not come under the Civil Service Commission, and in what departments do they serve?
4.	How many are under annual contract and in what departments do they serve?
5.	How many are casual or non-permanent employees and in what departments are they employed?
6.	How many are in other classifications?
7.	Of those listed under parts 3, 4, 5 and 6, what holiday, vacation, pension and compensation benefits do they receive?
Return tabled.


Mr. Knowles: During the calendar year 1966, or during the latest twelve-month period for which figures are available, how much was spent by each department of the federal government on advertising by (a) radio over C.B.C. stations (b) television over C.B.C. stations (c) radio over private stations (d) television over private stations?
Return tabled.

March 13, 1967
Orders for Returns


Mr. Gregoire: Since 1944, what annual grants were paid for sugar beets in each province?
Return tabled.


Mr. Irvine: 1. How many people were employed by the London post office and other postal services in London, Ontario, as casual and/or part-time workers during each month of 1966, and for how many days in each instance?
2. How many people were employed by the London post office and other postal services in London, Ontario, as casual and/or part-time workers in each of the years 1960 to 1966 inclusive, and in each of these years, how many of these workers were employed (a) for 60 to 100 working days (b) for 200 days or more?
Return tabled.


Mr. Schreyer: 1.	Since the inception of the industrial area development and incentives program, what amounts have been expended by the government of Canada in each year by province?
2.	How many applications for development grants have been received to date, by the area development agency from persons or corporations seeking to construct new facilities or expand existing facilities in the area of Manitoba census divisions 19, 3, 4, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17 and 18?
3.	With respect to part 2, how many of these applications were approved and what was the amount of the grant in each case?
4.	How many applications were received under the area development program from persons or corporations seeking the accelerated capital cost allowance of this program with respect to the construction of stores, warehouses, motels and apartments in these areas?
5.	With respect to part 4, how many applications were approved and what was the differential between the accelerated capital cost allowance allowed as compared to ordinary capital cost allowance applicable in each case?
6.	What is the date of expiry of the accelerated capital cost allowances feature of the area development program and is it the intention to extend this?
Return tabled.


Mr. Orlikow: 1.	When was the supersonic wind tunnel constructed for the National Research Council?
2.	What was the cost of constructing the supersonic wind tunnel?

3.	What has been the cost of operating and maintaining the supersonic wind tunnel annually since it went into operation?
4.	For what research and development projects has the supersonic wind tunnel been used since its inception?
Return tabled.


Mr. Howe (Hamilton: South):
1.	What was the total quantity of imports of baler and binder twine into Canada in each of the years 1955 and 1965 and what were the countries of origin?
2.	What was the total quantity of baler and binder twine manufactured in Canada in each of the years 1955 and 1965?
3.	What percentage quantity of the total consumption in each year of 1955 and 1965 was imported and what percentage was manufactured in Canada?
4.	If the percentage of total consumption met by imports increased during this ten year period, what steps are being taken to protect the Canadian industry and Canadian labour employed in that industry?
Return tabled.


Mr. Woolliams: 1.	Is it a fact that the opening of the Drumheller penitentiary has been delayed because of shortage of houses for a staff of approximately 175 employees, necessary for the operation and opening of the institution?
2.	Would the Minister of Labour give details as to what direct negotiations have taken place with Central Mortgage and Housing to make a deal with the city of Drumheller to expedite the building of houses, so that this institution can be opened and relieve the crowded conditions of other institutions?
Return tabled.


Mr. Nielsen: Under the recently inaugurated northern mineral exploration program of the Department of Indian Affairs and Northern Development (a) how many applications have been made in connection with work to be performed in the Yukon Territory (b) by whom were such applicaions made (c) for how much was each application made (d) which applications, if any, have been approved?
Return tabled.
March 13, 1967	COMMONS


Mr. Godin: 1.	Has Canada exported eggs in 1965 and 1966 and, if so (a) to what countries (b) in what quantities?
2.	During the same period, what quantities were imported and from what countries?
Return tabled.



TELEVISION


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I will direct my question to the Acting Prime Minister. It has to do with the supplementary estimate of the Secretary of State providing authorization for the setting up of a corporation and for the minister to make payments to provide broadcasting facilities for educational purposes. In view of the fact that it is rather unusual to create a corporation by a supplementary estimate, and considering the delicate position of education and the fact that the exclusive authority over education rests with the provinces, would not the Acting Prime Minister, in his best parliamentary manner, direct that this question come before the house in the form of a bill so that discussion can take place thereon, rather than circumvent parliament in connection with this information through the instrumentality of a supplementary estimate?


Paul Joseph James Martin: Mr. Speaker, I can assure my right hon. friend that there is no intention on the part of the minister or the government of circumventing parliament in any way. The right hon. gentleman is, of course, correct in saying that the normal process is through a bill. However, there are precedents for the use of an estimate. This device has legislative consequence, to implement the purpose the government has in mind.
One of the difficulties in the present situation is that in spite of the progress that has been made legislatively, we have not been able to implement the full legislative program of the government. It is for this reason that it has been found necessary to resort to this particular method, which I repeat is a legislative method, to achieve the purpose the government has in mind. For the moment, I would suggest that this response be left at that. If there is any further consideration that
Inquiries of the Ministry can be given to this matter, perhaps later I might report.


John George Diefenbaker: May I ask the minister, in view of the fact he admits this is a short-cut and not the normal process, and since in a matter affecting education arguments such as that are not very effectual-so it will take a long time to pass legislation of this kind, will he not do more than he has done already and, with his wide knowledge of parliament and its rights-enjoin his colleagues to preserve those rights so that a corporation be not set up by subterfuge in this manner?


Mr.   Marlin@Essex Easi: I can only say that the adjectives my hon. friend has employed are not warranted in the circumstances. The government is not employing any subterfuge. The government is not interested in bypassing parliament.


John George Diefenbaker: Well, it is doing it.


Paul Joseph James Martin: All my hon. friend has done is to indicate that we propose to take a legislative step in a manner that is not generally adopted, but for which there are precedents. I cannot put my finger on them, but I am sure that during the time the right hon. gentleman was prime minister his government introduced legislation in this form. In any event, my right hon. friend may be assured that the government has given careful consideration to all points of view on this matter. He may be assured that we, no less than he, are anxious to preserve all the privileges and obligations of this free parliament.


Mr. R. W. Priltie (Burnaby-Richmond):: wonder if I could direct a supplementary question to the Secretary of State. Will the government give consideration to introducing this measure by way of the C.B.C., which is set up at the moment to do educational broadcasting? I realize one of the difficulties facing the government is that they are awaiting the report of the committee on educational television, but could they not give this work to the C.B.C. pending a final decision?


Julia Verlyn (Judy) LaMarsh: The item in question does not propose to set up a corporation which would deal with programming for educational television, which of course is within the constitutional responsibility of the provinces. This is to be a corporation which will create facilities for the rental of time to provincial agencies of one kind or another. The reason the government decided to introduce it by way of a supplementary item instead of by way of a bill, which would
March 13, 1967

Inquiries of the Ministry have to pass through all stages, is that this should properly be part of the Broadcasting Act which is not expected, by reason of the committee not having yet reported, to be presented during this session of parliament.
The proposal to legislate by means of an item in the estimates is not intended to be a final solution. It is proposed that subsequently there will be a piece of legislation, and it certainly was my intention, and the government's, that a very full explanation would be given when the item was called in an attempt to live up to an undertaking, particularly to the province of Alberta which is desirous of getting on with educational television in 1967. If this does not meet the wish of parliament, however, and it would prefer to require the province of Alberta to wait until 1968, of course the item can be withdrawn, and at such time as there is legislative time available a bill can be brought forward. It was hoped all hon. members would appreciate the importance of creating facilities in order that the provinces might get on the air, particularly in the rather remote sections. This was an attempt to co-operate with the provinces.


Mr. Fairweather:: The minister still has not answered why the Canadian Broadcasting Corporation cannot fulfil this function.


Mr. Speaker:: Order, please.



RESEARCH


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquiilam):: May I direct a question to the Minister of Transport, Who was designated by the Prime Minister on Friday to look after the communications satellite program. Has his attention been drawn to the fact that the McGill University space research institute is running out of money for its high altitude research program, generally referred to as HARP, and that the income from the federal government is to end on June 30? I wonder if the minister is aware of the fact some 20 per cent of the staff have already been laid off. In view of the Chapman report concerning the urgency of Canada getting into the satellite communication field, is the government giving any consideration to continuing its financial assistance to McGill University for HARP?


John Whitney Pickersgill: I think perhaps I should clarify the matter. The HARP program is not concerned with communications at all. It is a research

program and is engaged in research activities. The support that has been given to this project has been given through my colleague the Minister of Industry, and I believe any questions would be more property directed to him.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question of the Minister of Industry. In view of the fact that HARP is not designed to deal with satellites but to put satellites into orbit, and in view of the fact the Chapman report says it is most urgent that Canada get into this field if it is not to lose its position, may I ask the minister if any consideration is being given to continuing financial assistance to the HARP program at McGill University.


Charles Mills (Bud) Drury: There is in the Chapman report a lengthy analysis of the HARP program itself, but the conclusion of that report is not such as to encourage me to recommend continuing financial support in view of other demands on research funds.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. Real Caouette (Villeneuve):: Mr. Speaker, I have a question for the Secretary of State for External Affairs.
Saturday night, he made this statement before the officers of the Junior Chamber of Commerce:
The Canadian government will contribute $50,000 to partly or wholly French speaking universities.
Could the minister tell us whether Canadian universities interested in spreading or teaching French will benefit by this contribution?


Paul Joseph James Martin: Mr. Speaker, this grant of $50,000 will go toward the establishment of a private organization known as the A.U.P.E.L.F., that is the Association des uni-versites partiellement ou entierement de langue franchise. The objective of this organization, made up of representatives of universities of several countries, is to foster the exchange of teachers and students among all French speaking countries.


David Réal Caouette: Mr. Speaker, a supplementary question. Would the minister be in a position to tell us whether the same principle
March 13, 1967	COMMONS
for the promotion of exchanges among the various French speaking countries could be applied to Canadian provinces interested in such exchanges or in spreading the knowledge of both languages in Canada?


Paul Joseph James Martin: Mr. Speaker, not through that organization, but the same principle could be applied to promote the exchange of students between the various provinces.



NATURAL GAS


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to address a question to the Minister of Energy, Mines and Resources. In view of recent developments in the United States before the federal power commission in connection with the application of Trans-Canada for the approval of the Great Lakes project, has there been any revision of the timetable or target date both with respect to hearings and the delivery of additional gas to eastern Canada?


Jean-Luc Pepin: Mr. Speaker, the federal power commission has decided to skip what is called the presiding examiner's report and deal with the matter directly. On April 24, I think it is, the commission will be seized of the situation, and it is expected that a decision will follow shortly after that.


Horace Andrew (Bud) Olson: A supplementary question, Mr. Speaker. Has the minister been assured by Trans-Canada Pipe Lines that there is still sufficient time to build the additional facilities required to deliver gas to eastern Canada to meet the anticipated additional requirements for next winter?


Jean-Luc Pepin: Mr. Speaker, the objective is to make sure that additional quantities of gas will be delivered next winter in eastern Canada. However, it very much depends upon whether you are an optimist when you try to assess if the decision of the federal power commission will be in time to realize this objective. As the situation stands now it is hoped that a decision will be given in late April or early or late May, depending on your degree of optimism or pessimism.
If this is the case, Mr. Speaker, then the company might have enough time to build the
Inquiries of the Ministry Great Lakes project next summer. If it should not be so, Trans-Canada Pipe Lines has been advised by the government that it should have an alternative project ready in time to be put before the National Energy Board.


Horace Andrew (Bud) Olson: A further supplementary question. Is the alternative project to which the minister refers the twinning of the northern Ontario route?


Jean-Luc Pepin: When I refer to the alternative project, Mr. Speaker, I am referring to that.


Mr.  M. W. Marlin@Timmins: A further supplementary question, Mr. Speaker. Has the minister any recent evidence to show that there is a possibility of delay occurring through appeals following the decision of the F.P.C.?


Jean-Luc Pepin: I cannot understand the question. Would the hon. member repeat it?


Mr.  M. W. Marlin@Timmins: At one stage, Mr. Speaker, it was intimated that even when the decision of the federal power commission is handed down there could still be considerable delay because of appeals being taken to the Supreme Court, and so forth. Has the minister any information in this regard?


Jean-Luc Pepin: No, Mr. Speaker. When the federal power commission makes a decision I would think Trans-Canada Pipe Lines and the Great Lakes project could proceed without further delays, if the decision is favourable.



EXPO '67 COMPLAINTS RESPECTING REQUESTS FOR ACCOMMODATION

[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, 1 have a question for the Minister of Trade and Commerce. Is the minister investigating complaints that Logexpo is not answering mail inquiries for accommodation at Expo '67.


Robert Henry Winters: Mr. Speaker, there might have been minor grounds for some complaints. I think Logexpo was waiting until it had found accommodation before replying to letters received, but this procedure has now been changed and it is acknowledging letters when they are received.


Gordon Harvey Aiken: A supplementary question. Can the minister assure us, then, that all inquiries that are being received by mail, particularly
13894	COMMONS
Inquiries of the Ministry those from outside of Canada, will be acknowledged promptly if not acted upon immediately?



REQUEST FOR INCREASE IN PRICE UNDER INTERNATIONAL WHEAT AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, I have a question for the Minister of Agriculture but in his absence I will address it to his parliamentary secretary. In view of the announcement today by the Minister of Transport of the increase in tolls on the St. Lawrence seaway, a step which will reflect on the cost of delivery of grain from western Canada, will the minister advise this house what steps have been taken by the Canadian government to increase the price of wheat under the international wheat agreement?


Mr. Bruce S. Beer (Parliamentary Secretary to Minister of Agriculture):: I will be pleased to bring this question to the attention of the minister, Mr. Speaker.



SALE IN CANADA OF GOODS CONFISCATED IN CUBA

[Stage Direction]
On the orders of the day:
Mr. J. R. Keays (Gaspe):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. Does the government intend taking any action to outlaw the entry into Canada of goods confiscated in Cuba and sold at auction in Montreal?


Robert Henry Winters: I shall have to take that as notice, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I should like to ask the Minister of National Defence a question. Has the minister communicated with Washington to ask his mentor, Mr. McNamara, if the proposed unification of the Canadian forces may be postponed?


Paul Theodore Hellyer: Mr. Speaker, I am sure my hon. friend is not putting this question forward

DEBATES	March 13. 1967
with too much seriousness; therefore I hesitate to reply. I am also sure that the United States appreciates the wonderful co-operation which has existed between our two countries over the past years, and anticipates that nothing will detract from that co-operation in the years ahead.



FINANCE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to ask a further question of the Acting Prime Minister. Has the Canadian government received any reply from the government of the United States to the protest regarding the ruling by the federal reserve board that that board can inspect banks operating in other countries, including Canada?


Hon. Paul  Marlin@Acting Prime Minister: Not as yet, Mr. Speaker.


John George Diefenbaker: Is this one of the subjects that will be discussed during the Prime Minister's social visit to Washington later this month?


Paul Joseph James Martin: A reply will be given in the normal course of events, Mr. Speaker.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, my question is to the Acting Prime Minister. I should like to know whether any plans have been consummated for the holding of the meeting of Canadian ministers and secretaries of the United States which is customary at this time of year.


Paul Joseph James Martin: Yes, Mr. Speaker, the government has been in touch with the government of the United States and it has been proposed that the next Canada-United States ministerial meeting be held in June on Expo territory. Both governments have accepted this in principle and we are now trying to work out a date. I hope the meeting will be some time toward the middle of June.


Francis Alvin George Hamilton: A supplementary question having to do with the agenda of this meeting. I wonder whether the Acting Prime Minister
March 13, 1967	COMMONS
would give the house the assurance that either he or the Prime Minister will consult with the chairman of the legislative group which has been meeting with its United States counterparts in 1965 and 1966. It was apparent from the last discussions which were held in Washington that there was no consultation between the legislative branch and the executive branch. Therefore I would ask the Acting Prime Minister whether he would take it upon himself to consult with the chairman of the Canadian side at least to the end that the subject matters discussed by the legislative branch will be brought forward for discussion by the executive branch.


Paul Joseph James Martin: Yes, Mr. Speaker, I will.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Julia Verlyn (Judy) LaMarsh: Mr. Speaker, last Friday the right hon. Leader of the Opposition made some remarks and inquiries in respect to the provision by the Canadian Broadcasting Corporation of colour television sets. I have been able to get some information which I should now like to give both him and the house.
The C.B.C. has advised me that it had not provided the specific names of staff members occupying positions to which colour sets have been assigned because of an understanding over the years that it is not the intent of parliament to require crown corporations to make public information which is basically related to their internal administration and management.
While the corporation has always replied freely to parliamentary questions on matters of C.B.C. policy, it has from time to time sought the indulgence of parliament in not providing information of a detailed operational nature. In the view of the corporation the question with respect to the colour television sets came within this category. If the corporation is in error in this interpretation of intent and is so advised by parliament, then the names will be provided. The C.B.C. cannot and will not refuse any information requested by parliament, and this applies to the present instance. While the corporation is in the hands of parliament, it respectfully suggests that a continuation of past policy and practice in principle is essential to the most efficient operational needs of the corporation in all their aspects.
Inquiries of the Ministry
The corporation does not require regular reports from occupants of those positions assigned colour T.V. sets, but requires them to be conversant with either or both the programming and technical aspects of its colour programming. Because colour television is new the discussion and assessment of the colour performance is carried out by C.B.C. staff on a continuing and near daily basis rather than at periodic intervals. It is also part of most program and technical meetings.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: I have a question for the Minister of Labour in his capacity as the minister responsible for housing. In view of the steady worsening of the housing crisis in Canada, and reports that starts in the first two months of this year were reduced by 38J per cent as compared with the first two months of last year, can the minister inform the house whether he is considering reducing the interest rate on N.H.A. loans and enabling such loans to be made directly to prospective home owners as well as to construction companies?


Hon. J. R. Nicholson (Minister of Labour):: While it is true that housing starts were down during the months of January and February, I think it is safe to say that our experience of the last four weeks illustrates the wisdom of changing the rate to 7i per cent, since I understand that we have had more applications from approved lenders in the last four weeks or so than in the entire six months before the increase in the interest rate took place; that is, while the old rate was in effect. When the new rate became effective there was a certain element of flexibility attached to it. It is tied to the yield on bonds issued by the federal government. We see no necessity for further change at this time.
I personally am very encouraged about the reports which have been received on the number of loan applications accepted by approved lenders in the last three or four weeks. It has been exceptionally high, certainly not in line with the figures for January and February, because those were tied in with loan applications made last fall when the old rate was in force.


David Lewis: May I ask the minister, who is rather easily encouraged, I think, whether he or the government is considering any new
March 13. 1967

Inquiries of the Ministry policies at all relating to the housing program. If so, when can this house expect the announcement of such new policies, unless the minister is satisfied with everything about his policies as they are?


John Robert (Jack) Nicholson: With all due respect, in spite of the hon. member's sarcasm, I wish to make it clear that neither the minister nor the government is satisfied with the number of housing starts, and the matter of what further action should be taken is constantly under review.


David Réal Caouette: Mr. Speaker, I wish to ask a supplementary question.
The hon. minister has just said that the increase in the interest rate was an incentive for the building of new dwellings in Canada. Does the hon. minister agree that the building problem in Canada would be solved, as he says, by increasing the interest rate from 1\ per cent to 20 per cent?


Mr. Speaker:: Order. That is an argument rather than a question.


Mr. W. B. Nesbitt (Oxford):: I have a supplementary question for the Acting Prime Minister. In view of the general interest in increasing housing starts throughout Canada, would the hon. gentleman recommend to his colleagues on the treasury benches the removal at once of the 11 per cent sales tax on building materials?


James Russell Keays: A further supplementary to the Minister of Labour, based on the fact that applications are now being received from people who wish to borrow money directly from C.M.H.C., which money will not be available until April 1. In view of the decline in housing starts, would the minister inquire whether these loans could not be made available as of now rather than as of April 1?


John Robert (Jack) Nicholson: We have already had some discussion in the house today about the importance of coming to parliament in connection with certain matters. We are beginning a new fiscal year on April 1, and this is why we have advanced the date for the making of application without waiting until the next fiscal year. The funds will come out of next year's estimates.


Mr. G. L. Chatterton (Esquimali-Saanich):: Can the minister assure the house that any

person who would otherwise qualify but who cannot get a loan through an approved lender will be able to get a direct loan from C.M.H.C?


John Robert (Jack) Nicholson: No, Mr. Speaker, I cannot give any such assurance. I can give the assurance, however, that applications received both from builders and from individuals who wish to build their own homes will receive prompt consideration provided the applicants are reasonably good risks and satisfy the other conditions which come into the loan picture.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: I wish to direct a question to the Minister of Veterans Affairs. In view of the delay in the tabling of the Woods committee report and the continuing hardship experienced by recipients of veterans pensions, will the minister reconsider his previous decision and extend the recent 15 per cent increase to dependants as well?


Roger-Joseph Teillet: First, the delay in adjusting the pensions of veterans is not because of the Woods report; it is awaiting the report of another nature from another group in my department which is dealing specifically with pension rates. I can assure the hon. member and the house that if the report does not come to hand in the fairly near future we shall perhaps have to consider making some adjustment in pension rates in the interim period. I am hoping the report will be to hand in time for this to be avoided, and for an adjustment to be made consistent with some logical basis.


Alexander Bell Patterson: Does this contemplated revision include dependants as well as the recipients?


Roger-Joseph Teillet: All aspects of pension rates are being considered in this study.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. E. Nasserden (Rosthern):: I have a question for the Minister of Labour. Has the department under consideration any special program designed to satisfy the demand for farm labour during the seeding season which is coming up?
March 13, 1967	COMMONS


John Robert (Jack) Nicholson: believe that in line with the new division of responsibilities announced in December, 1965 by the Prime Minister, this is a question which more directly concerns my colleague the Minister of Manpower and Immigration. However, I will be glad to take the matter up with him. One thing that the Minister of Labour has done, in line with requests from members of all parties in the house, has been to promote a change in the regulations governing unemployment insurance, in the hope that this may improve the situation with regard to the availability of more farm labour.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I would like to direct a question to the Minister of Labour supplementary to one that was raised earlier. In view of the fact that the unemployment insurance regulations prohibit the employment of relatives in the farm industry, is the minister receiving complaints in regard to this matter and is he contemplating any change in this restriction?


John Robert (Jack) Nicholson: As you might expect, Mr. Speaker, we have had a few complaints but they are not appreciable in number. The matter has been under study but I do not anticipate any change in policy at this time.



REQUEST FOR ANNOUNCEMENT OF DAIRY POLICY

[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I wish to direct a question to the Acting Prime Minister. Can he inform the house that as usual we may expect an announcement of the 1967 dairy policy on or before the 31st of this month and, if so, will it include a 5, 6 or 7 cent increase in the price of manufactured milk to producers?


Mr. Speaker:: Order, please. A similar question was asked on at least one occasion last week.


Eric Alfred Winkler: The situation is becoming very critical, Mr. Speaker, and I think the hon. gentleman, with his interest in agriculture, could probably answer the question.



QUEBEC-POSSIBLE SALE OR LEASE OF ELEVATOR

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I would ask the Minister of
Inquiries of the Ministry Transport whether there is any basis for the suggestion in the press regarding his visit to Quebec that the grain elevator in the port of Quebec is to be sold. If so, under what conditions is it to be sold, and are tenders to be called?


John Whitney Pickersgill: If by "Quebec" the right hon. gentleman means the city of Quebec, let me say I have not visited that city for a very long time. I did happen to be in Montreal over the week end.
As to the question of the grain elevator, I think I explained to the house some time ago that the National Harbours Board was entertaining applications for either the lease or the sale of the elevator under certain conditions, and I believe certain propositions have been received.
If Your Honour would permit me, I should like to repeat the assurance I gave earlier that all agencies of the federal government interested in the transport or sale of wheat will be consulted before any final action is taken.


John George Diefenbaker: Did the Minister of
Transport suggest that additional elevators will be built by private firms? I ask that question because it seems strange, bearing in mind the tremendous amounts of wheat which have to be stored, that the government should be considering, through the harbours board or otherwise, disposing of facilities which are certainly much required.


John Whitney Pickersgill: I do not know anything about any plans of private firms to build additional elevators. I certainly made no statement about them. So far as the elevator at Quebec is concerned, the only circumstance under which the government would consider agreeing to any proposal from the harbours board to dispose of this elevator, either by sale or lease, would be in order to increase the throughput of grain through that elevator. If that would not be the consequence then we would not want to do it.


Francis Alvin George Hamilton: Mr. Speaker, my supplementary question follows an earlier question I put on this matter. Has the minister had conversations with the Quebec minister of agriculture, who sent a wire asking that he be consulted before any action was taken on the matter of this elevator?
13898	COMMONS
Inquiries of the Ministry


John Whitney Pickersgill: I have not actually had any conversations. I did have some correspondence with the minister of agriculture of Quebec and I conveyed to him the same message I have conveyed to this house, namely, that all those departments of the government of Canada that were interested would be consulted before any action was taken and we would, of course, pay the most careful attention to any representations that were made by anyone concerned. Since I communicated with him, to the best of my knowledge I have received no further representations myself although the harbours board may have.


Hon. Theogene Ricard (Sainl-Hyacinihe-Bagoi):: As a supplementary question, in view of the fact that the assurances the minister is giving with regard to the sale or possible rental of this elevator are not satisfactory to those interested, can the minister say in black and white whether he is going to permit or refuse the rental or sale of this elevator?


John Whitney Pickersgill: Mr. Speaker, I could not say in black and white what would be done about a hypothetical proposition that I have not seen, but I think I can assure the hon. gentleman that no sale or lease of that elevator is going to take place unless it is the belief of the government that it will contribute to the national interest, to the interest of the consumers of domestic grain in the province of Quebec, and to facilitating the export of our grain.


J.-H.-Théogène Ricard: We are not satisfied with that.


Mr. Ed. Schreyer (Springfield):: As a supplementary question I wish to ask the Minister of Transport whether he can say that it is government policy to encourage the sale or lease by the National Harbours Board of these facilities.


John Whitney Pickersgill: I think I could put it this way, sir. It is the policy of the government to take every practical and sensible step to see that the maximum use is made of these facilities because, as the Leader of the Opposition pointed out, our exports are growing, our grain traffic is growing and we have to make the best possible use of the limited facilities we have.


John George Diefenbaker: I wish to ask one question in that connection. Surely the minister does not suggest that private interests taking over this elevator could assure a greater put-through, which I think was the expression he used.
DEBATES	March 13, 1967


Mr.   Marlin@Essex East: Throughput.


John George Diefenbaker: Throughput. I put it the
wrong way, end to.


John Whitney Pickersgill: It is the same thing.


John George Diefenbaker: But surely the minister does not suggest that private interests operating this elevator would be able to do a better job than the government?


John Whitney Pickersgill: I think that is quite probable.


Mr. Speaker:: Order, please. We have had a number of supplementary questions on this subject and I suggest to hon. members that we might go on to another matter.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Koolenay West):: Mr. Speaker, I wish to address a question to the hon. Miss Secretary of State. Has the minister received any representations from the Minister of Agriculture for the improvement of C.B.C. programs in accordance with his suggestions to the national banquet of the curling association when he was guest speaker about a week ago?


Mr. Speaker:: Order, please, The hon. member knows he cannot ask about communications between members of the cabinet.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I should like to put a question to the Secretary of State.
For the past two or three evenings the broadcasting of the national news has been interrupted to give the local news of Ottawa. Could we have at least on the French network the same service as on the English network, that is the entire broadcast of the national news in the evening and the local news, if any, afterwards?


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

March 13, 1967



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the President of the Treasury Board. Can the minister say whether we will be dealing with any of the estimates he tabled today in this session or will we deal with all of them in the next session of parliament?


Edgar John Benson: Mr. Speaker, on the presumption that this session will be ended very quickly I would hope they would be dealt with in the next session.


Stanley Howard Knowles: As a supplementary question, may I ask the minister whether the government will be seeking interim supply before the Easter recess?


Edgar John Benson: Mr. Speaker, it would be my hope that we would get interim supply so we would have supply before the Easter recess as it probably will extend into April.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I would like to give the Secretary of State an opportunity to demonstrate whether the confidence which was expressed in her by the Minister of Industry last Friday is well founded. He informed my colleague, the hon. member for Skeena, that she had heard the representations and would act on them and make available to Indian bands across the country copies of the Hawthorn-Tremblay interim report-


Mr. Speaker:: Order, please. The hon. member knows that according to the rules he has to ask a question. A question should not be prefaced with a speech, however long.


Some hon. Members:: Oh, oh.


Thomas Speakman Barnett: Mr. Speaker, I would like to ask the Secretary of State whether she has acted upon that request and will in fact make copies of the report available to Indian bands across the country without cost so they may study it?
Bank of Canada Act


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, I would think normally this would lie within the responsibility of my seatmate, but do I take it that my hon. friend is asking a question about printing?


Thomas Speakman Barnett: Mr. Speaker, perhaps if I might-


Mr. Speaker:: Order, please. Perhaps the hon. member and the minister might get together after we call orders of the day and decide whether or not they have a question.
[DOT] (3:40 p.m.)



BANK OF CANADA ACT


[Stage Direction]
The house resumed, from Friday, March 10, consideration in committee of Bill No. C-190, to amend the Bank of Canada Act-Mr. Sharp

Mr. Batten in the chair.
The Chairman:: When the committee rose on Friday clause 1 was being discussed.
On clause 1-


Mr. Gauthier:: Mr. Chairman, I wish to make some remarks at this stage of consideration, in committee, of Bill No. C-190, for the good reason I was not on the committee because we were entitled to only one representative, according to the proportional representation.
Obviously, I could have made those remarks on motion for second reading as others did; however, I have chosen to wait for the results of the work of the committee.
This will allow us, after going through previous studies, to make a more realistic comparison of the work done.
This is the third decennial revision since the establishment of the Bank of Canada, and we find that nothing has been changed in the essence; in its endless repetition history reminds us of the hands of a clock.
Nothing has been changed, either in the procedure applicable to special and standing committees, or in the way witnesses are called before the standing committee; it has changed even less as far as evidence is concerned, except for the more ruthless way of dismissing embarrassing witnesses.
As a matter of fact, most witnesses are carefully selected in advance by a steering committee which must take a vote. The briefs themselves are appraised in advance by that select committee before being read

March 13, 1967
Bank of Canada Act
by the standing committee. As a result, with a tew exceptions, the only documents to be submitted to the standing committee are those suitable to the financiers, that is, which are in accordance with the present financial system.
In that connection, a member of the committee to whom I was pointing out such unfairness answered me that, under the rules, the steering committee was fully empowered to decide not to discuss such or such a question or not to submit such or such brief to the standing committee. And he further added: Yes, but any brief not discussed or read in committee appears in the proceedings as an appendix:
What is the use of putting it into the report if it has not been considered? It is as if a question was filed in the archives without first having been studied at all.


Mr. Gray:: May I ask the hon. member a question? Did he say that some papers had been brushed aside by the steering committee on finance, trade and economic affairs? If he has said that, he is mistaken.


Charles-Arthur Gauthier: I said that some briefs which have not been discussed in committee should appear in the report. But you will not allow such reports to be introduced and discussed in the committee.


Herbert Eser (Herb) Gray: On a question of privilege, Mr. Chairman, I wish to assure my hon. colleague that when the briefs which were only included in the record, it was because those who presented them stated that they did not wish to appear before the committee.


Charles-Arthur Gauthier: Mr. Chairman, I would have the chairman of the committee note that the briefs I have mentioned have been discussed by the steering committee and that it was probably decided to discard them, and not to submit them, and I shall simply mention that the brief of the hon. memer for Compton-Frontenac (Mr. Latulippe) has probably been forgotten or set aside and will appear only in the 'report of the committee. But I believe it has not been thoroughly discussed in committee. This is what I would have the chairman of the committee note.


Herbert Eser (Herb) Gray: I should like to point out, Mr. Chairman, that the hon. member for Comp-ton-Frontenac was fully entitled to appear before the committee and to present his report. He was present often enough at the sittings to ask questions and to take part in

the discussion. It was his own decision not to appear before the committee. And I think you should complain to your colleague from Compton-Frontenac on this score.


Charles-Arthur Gauthier: Mr. Chairman, the chairman of the committee, I think, is saying that the member for Compton-Frontenac was not entitled to present a brief to the committee because he was sitting on the committee. Is my interpretation correct?


Herbert Eser (Herb) Gray: Mr. Chairman, you will certainly allow me to answer this question. The hon. member for Compton-Frontenac had a right to sit in the committee as a regular member, to present his brief and to answer the questions that would have been asked of him about the recommendations in his brief. I want to assure the members of this committee of the whole that the hon. member for Compton-Frontenac very often attended our meetings and that he worked considerably on matters in which our committee was interested.


Charles-Arthur Gauthier: I know that the member for Compton-Frontenac fulfilled his duties quite satisfactorily in the committee, but I also know that he prepared a brief which has been discussed. I am talking about the attendance, the discussion or the permission to ask questions of the witnesses, because I shall have something to say about this later.
[DOT] (3:50 p.m.)
But this brief was never presented to the standing committee, because it was decided, I think, in the special committee, that there was not sufficient time to submit it to the standing committee. They simply decided to table it.
As far as I know, that is what happened concerning this report.


Mr. Clermont:: Mr. Chairman, would the hon. member permit me a question?


Charles-Arthur Gauthier: Yes, provided that questions and discussions will not take up all my time.


Gaston Clermont: Mr. Chairman, I think the hon. member should check with the hon. member for Compton-Frontenac, because if he had wanted to be heard as a witness by the committee on finance, trade and economic affairs, he could have testified. However, the member for Compton-Frontenac, who is here near me, did not insist to be heard.


Charles-Arthur Gauthier: Mr. Chairman, that is exactly what I discussed with the hon. member for Compton-Frontenac. Please note that
March 13, 1967

he lives with me, since we share the same apartment.
The hon. member says that he did not insist?


Gaston Clermont: He did not, Mr. Chairman.


Charles-Arthur Gauthier: I think there was no need for him to insist, Mr. Chairman, because it was a matter of tabling his report. If the committee is to be impartial, it should table this report like any other, and that is precisely why I raise the point.
In my opinion, this is the very basis of all financial dictatorship to which we are more and more subservient every day in our economic structure; furthermore, we find a second control, that is the one exercised upon those who question the witnesses and who have the favour of the special committee. Indeed, when some members of the standing committee who are known as opposed to the government group question the witnesses, a well directed artillery was put into action with a view to annihilating the evidence as much as possible. We have proof of this, and here it is. I will simply mention the most recent case which, to my mind, is the most subtle one.
In this respect, I ask the house to refer to page 125 of the provisional report that was handed to us concerning volume 49 which had not already been translated into French when motion for second reading of the bill was put -and here I wish to thank the members of the bureau for translations who have brought forward the French copies of the true proceedings-when the hon. member for Comp-ton-Frontenac, representing the Ralliement creditiste was questioning Mr. Rasminsky.
The other day I did not have those memoranda before me to start the discussion, and that is precisely why I wish, Mr. Chairman, to tell this house that I wanted to have the proof in order to point out what was happening in the committee.
After a great many sneaky detours to keep the hon. member for Compton-Frontenac from questioning Mr. Rasminsky, the chairman of the committee, realizing that he could not do otherwise, finally agreed to recognize him in the following terms, as recorded in the report:
You may start your questioning and if the members of the committee and myself, as chairman, think you are out of order, we can resume this discussion in due course.
Bank of Canada Act
And a second fiddle, the hon. member for Quebec-Montmorency (Mr. Laflamme) added:
Perhaps we could simply advise Mr. Rasminsky to answer more concisely than before.
Mr. Chairman, as recorded at page 125(2) of these reports, it is there very plainly in the verbatim notes I have just read, but what do we find in the printed report? This is the reason why I do want to put the record straight at this stage.
For instance, instead of reporting the hon. member for Quebec-Montmorency as saying:
Perhaps we could simply advise Mr. Rasminsky to answer more concisely than before.
the report distributed to us says:
We want to let Mr. Rasminsky know that it is not necessary for him to repeat what he has already said.
Mr. Chairman, in plain words instead of legal jargon, that means that Mr. Rasminsky does not have to answer the questions put to him by the hon. member for Compton-Frontenac. I can assure you that such speech, from the mouth of a member who may think of himself as a genius in monetary matters, because he has studied law, are likely to deter a business operator like the hon. member for Compton-Frontenac.
In fact, if one reads impartially the questions asked by the hon. member for Compton-Frontenac, one notes that they are as timely and sensible as any asked by any other member.
I was getting a while ago to other remarks made by the hon. member for Quebec-Montmorency. Having failed to understand clearly a question put by the hon. member for Compton-Frontenac, Mr. Rasminsky said quite simply:
I do not understand the question.
Once again, to make fun of the hon. member for Compton-Frontenac, the hon. member for Quebec-Montmorency said to Mr. Rasminsky:
You do not have to understand.
Mr. Chairman, all those questions do something to us and when we read the evidence and see such things happening, I assure you that we are right to be ashamed sometimes.
The supremacy of the government is proclaimed in Bill No. C-190. Finally, in the proposed amendment it is said that the government will hold supreme authority over the Bank of Canada. Under the new amendment, the Bank of Canada will have to pay interest but it is not told how to act with our capital which it gives so generously to foreigners. It

March 13, 1967
Bank of Canada Act
is asked to pay interest on foreign capital it holds in deposit, but it is not told what to do about the amounts it just gives to foreigners. Finally, all this is only a giant smoke screen to create even more confusion among the people about our monetary system and the governor of the Bank of Canada was chosen because he is an expert at confusing people.
[DOT] (4:00 p.m.)
Mr. Chairman, in this regard, since we are speaking of confusion, I am not the one who claims that the present government, as did former governments, endeavours to muddle up our monetary system in order to annoy everyone.
I should like to quote a few lines of one of the best of our outstanding members of the press gallery, Amedee Gaudreault:
When the high priest of our Canadian monetary system Mr. Louis Rasminsky comments publicly, two or three times a year, on the state of our Canadian economy, a goodly part of his statements savours of parables. Some people-who wrote the text-find it all very clear, while others, amongst the experts I have consulted, give hesitant and diverse interpretations of the thoughts of the governor of the Bank of Canada.
Thus, Tuesday, before the Montreal Chamber of Commerce, did Mr. Rasminsky advocate or not credit restrictions? Speaking in French, he expressed himself with elegance, calling it, for instance a "policy of more selective credit". He stated that, since 1961, the Canadian money supply has increased steadily by 8 per cent annually, and that "in the last 12 months, it has increased even more rapidly than during the three preceding years."
The speaker, however, recognized that it was impossible to control interest rates in the last year "including those in the field of mortgages",...
In not being able to control them, perhaps the parties concerned were following the advice of the minister who, when speaking of interest rates, earlier, said that the increase in those rates had promoted construction.
Mr. Chairman, I think statements of that sort are completely contradictory and can only further confuse the people.
I wonder what is the reason for those attempts to create confusion. They are probably meant to baffle the enemy, in this case the people.
Indeed, the people must not know that our national bank plays second fiddle while all publicity media are used to tell them that the Bank of Canada has absolute control. The country must not know, either, that under the present system, the more it produces, the more it increases the national debt. The people must not glimpse the possibility of a

monetary reform, for this would be the end of the golden age of the trusts which feed our government leaders so well.
As long as a government elected by the people does not decide to undertake financial reform on a humanitarian level, we will always remain in the orbit of high finance without any hope of breaking free.
We maintain once again that in 1967 the people will be sacrificed to the financial circles because until now, no government has had the courage to bring the financial world to heel for the people's benefit.
We understand quite well why the minister and his supporters are acting this way; it is because they have been elected by the financiers to whom they owe a debt of gratitude for their political life.
Therefore, I address myself to all those who will read the House of Commons Debates to tell them that only the people, through their vote freely given, can bring about a radical change in this perpetual debt system and bring to light the true accounting practices of the country.
Since I am not an expert on the matter, although, for a number of years I have made an effort to try and distinguish right from wrong in that phony system, in that carefully set up myth, and so as not to be called conceited, I now want to take a few minutes to quote some statements from knowledgeable people who came and testified during the last review in 1954 and who all wondered, namely with regard to the Bank of Canada: What is the Bank of Canada? What should it be? And to get a clearer picture, you can read in the 1954 proceedings, the excerpts that I have chosen, in order to hear the experts, and to try and get out of those data a few ideas for change.
If we ask ourselves what is the Bank of Canada, we will find a disguised definition in the Act itself, where it says:
Whereas it is desirable to establish a central bank in Canada to regulate credits and currency in the best interest of the economic life of the nation, etc.-
And that is how the people came to believe: Finally, a central bank, a bank for the people will control those private companies which are the chartered banks. The Canadian people believed that.
Imagine, for instance, that I own a company in which I control only 6.6 per cent of the shares; can I seriously pretend to exercise
March 13, 1967

an absolute control over that company? Unless words have lost their true meaning, you will answer me that it is absurd. However, that is what the the government would like us to believe as far as the Bank of Canada is concerned.
I do believe that honest practitioners would find it somewhat difficult to give a definition of the Bank of Canada, in order to emphasize the meaning sought by the financiers and their accomplices, the ministers of the crown.
Some compare it to a clock and Mr. Towers, a former governor of the Bank of Canada, stated, as recorded on page 32 of the 1956 committee report:
The policy of the Bank of Canada can but influence the conditions, how could I put it? It may tend to make borrowing easier and less costly, or more difficult and more expensive.
Therefore, according to Mr. Towers, the Bank of Canada makes its control conditional upon indebtedness only. That is the very basis of our monetary system.
And it is precisely owing to that control over indebtedness that the Bank of Canada has unlimited powers to provide the chartered banks with the oportunity of getting into debt the whole country and its inhabitants. The Bank of Canada is therefore an indebtedness agency.
And, once more, I base my statement on what Mr. Towers said. As shown on page 138 of the same report, Mr. MacDonald asked him whether at the present time that power was curbed and Mr. Towers stated magnanimously that the resignation of the governor of the Bank of Canada would be the only curb.
But then what are the special powers of chartered banks? They will only have to maintain an average of 6.6 per cent of their deposits in the Bank of Canada during any month of the year. I stated that it was an average, because if the term seems to be unimportant in itself, practically it has some serious consequences.
In fact, I believe that it is not wrong to say that most of the time, the reserve of chartered banks will be lower than the average standards.
Can you imagine that? When chartered banks lend you $100 for example, they will only have $6.60 in the Bank of Canada. They create out of thin air, with the stroke of a pen, the amount of $93.40 which they do not have. But they will charge you 8 and even 9 per cent, since the ceiling has been abolished, on your $100 loan.
Bank of Canada Act
In brief, the $6.60 will produce $8 and $9 at the end of the year, and that with the help of the Bank of Canada.
No wonder foreign financiers own 80 per cent of Canada. Finally, if we persist in keeping such a ridiculous system, in ten years or less, financiers, owing to chartered banks, will own 100 per cent of this country. A striking proof of such progress may be found in the speech delivered on February 16, 1967, by the hon. member for Portneuf (Mr. Godin). Here is what he said, as can be seen on page 13124:
True, the financiers are getting more and more prosperous but Canadians have never paid so many taxes.
Let us no longer try and persuade the public that our monetary system is the soundest of all on account of the presence of the Bank of Canada, the government's sentinel. Those who are not unduly impressed by the billions of dollars imposed by the old parties are becoming rapidly aware that this so-called sentinel is nothing but a dummy. A firm grasp of facts may be had by listening to the wishes expressed by hon. Mr. Macnaugh-ton, former speaker of the House of Commons, at the time he was a member of the committee on banking and commerce, in 1954:
Now and forever, I believe, it seems that if we succeeded in-
[DOT] (4:10 p.m.)


Herman Maxwell Batten: I must advise the hon. member that the time allotted to him has expired.


Mr.   Paiierson@: Mr. Chairman, I appreciate the opportunity of taking part briefly in the debate this afternoon on Bill C-190, an act to amend the Bank of Canada Act. The points I wish to raise this afternoon do, or should fall within the jurisdiction of the Bank of Canada. First of all I would like to refer to the speech of my colleague, the hon. member for Okanagan-Bevelstoke, who raised a number of pertinent questions on Friday and placed before the committee in a very capable manner some of the main issues that confront the country with regard to the Bank of Canada and its policy.
This afternoon I wish to mention, first of all, one of the matters which he raised, namely, the monetary policy of this country. I would also like to deal briefly with something which I believe should be considered as a function of the Bank of Canada, the provision

March 13, 1967
Bank of Canada Act
of adequate public capital to meet the need of governments at all levels to provide services to the people. Finally, I would like to refer to the national debt and the continuing cost of servicing our national debt.
First of all let me deal with the question of monetary policy. Sometimes it may be a little difficult to separate monetary policy from fiscal policy, but I call attention to a question and answer found in a booklet entitled "Money Facts". It was presented to the subcommittee on domestic finance of the committee on banking and currency of the House of Representatives, 88th congress, second session, on September 21, 1964. Question number 133 is: "What is monetary policy?" This is the answer:
Monetary policy deals with the operating instructions of the managers of our money factory. Monetary policy is what fits money into the structure of the economy. In specific terms it consists of the decisions the money managers make about the quantity of money, the price of money, and the availability of money ... In the broadest sense, monetary policy can be thought of as manipulation of the money supply in the pursuit of broad economic goals.
I suggest that the term "manipulation" should be interpreted in the best possible light because I believe it can be very properly used in this connection. The answer I have quoted points out that in a broader sense monetary policy can be considered to be a manipulation of the money supply in the pursuit of broad economic goals. I think this emphasizes the importance of the consideration of monetary policy.
Many times we are concerned about other factors and other issues. In fact I received a letter yesterday from an individual calling attention to the fact that the committee, in much of its work, dealt with issues that were on the circumference of the problem and failed to take cognizance of and deal with the very heart and core of our monetary policy. Therefore I believe we should recognize the fact that monetary policy should be dealt with in a very specific and detailed manner because until we do so we are not going to find an adequate solution to the problems that confront us in our country. This points up the importance of monetary policy and that it should be attended to.
The body responsible for monetary policy has been questioned in times past. Some who have served as minister of finance in this country have indicated that the government is not responsible for monetary policy, that this matter should be left strictly to the Bank of Canada and to the governor of the Bank of
[Mr. Patterson.!
Canada. We have seen the conflicts that have arisen because of this confusion. There have been times when it seemed as though government policy approved by parliament was moving in one direction while the policy of the Bank of Canada was trying to take us in another. I suggest that this is a completely unsatisfactory situation because there should be harmony between the policies adopted by the parliament and the policies that are carried out by the Bank of Canada. Therefore it is a matter of satisfaction to note that in the bill the clear statement is made that monetary policy must be carried out by the Minister of Finance and the Bank of Canada but that in case of conflict, directives may be issued by the minister and must be observed.
The government has established its jurisdiction but the main question is whether it is prepared to assume and discharge its responsibility or whether it will continue to follow monetary policies which in the past have failed to meet the requirements of our nation. A challenge is presented to the government because the government, having made clear that it is responsible for monetary policy, will have to take the responsibility if the results are not satisfactory. On the other hand, if the policies are effective and accomplish their desired objectives a measure of credit and approval will be given to the government which implements those policies.
I should like to deal also with the representations that we in the Social Credit party have made time and time again regarding the necessity for establishing as a branch or arm of the Bank of Canada what we have termed a municipal development bank. I notice that on various occasions it has been referred to in other terms but we appreciate the fact that sometimes it has been referred to as the municipal development bank. I do not think there is any need for us to argue the necessity for urgent consideration of the needs of municipalities in providing facilities which in turn will provide services to the people over whom they have jurisdiction. I refer particularly to such institutions as hospitals, schools and other municipal capital projects which are not profit-making ventures. They exist solely to provide services to the people. I believe, therefore, that they should be set apart from other projects and enterprises whose main objective is to make a profit, although services may be provided as well.
March 13, 1967

[DOT] (4:20 p.m.)
We recognize the tact that a number of attempts have been made to meet this situation in the past. First of all, the Municipal Improvements Assistance Act was passed in 1938. Unfortunately this piece of legislation was short-lived. In fact, in 1957 the late Mr. Irwin, who was a member of the Social Credit party, asked these questions as recorded on page 389 of Hansard for October 24, 1957:
1.	Has section 8 of chapter 180, R.S. Canada, 1952, Municipal Improvements Assistance Act, 1938, been Invoked?
2.	If so, on what date?
3.	How many applications have been received from municipalities under this act since 1940?
4.	How many applications prior to 1940?
The answers to those questions were given by Hon. Donald M. Fleming, then minister of finance:
1.	The power of the governor in council under section 8 of chapter 183, R.S. Canada, 1952, to fix and determine a date after which no loans should be made any municipality under the act, has not been invoked.
2.	See answer to No. 1.
3.	As loans were discontinued after December 31, 1940, no applications have since been entertained.
We note how short-lived this legislation was. The act was passed in 1938 but was discontinued after December 31, 1940.
4.	143 applications were received, of which 110 were approved for loans.
This simply shows that even back in 1938 some attempt was made to provide assistance to municipalities. As I have pointed out, it did not last very long. All the applications that were made were not approved. We find that later the Municipal Development and Loan Fund was established. I suppose it was established as the result of an election campaign promise. We were really expecting something wonderful to happen from the implementation of that promise. However, we discovered that the fund, rather than having as an objective the assistance of municipalities, was mainly to provide job opportunities. Nevertheless, some worth-while results were achieved and it was a matter of extreme regret on the part of the municipalities that this plan was discontinued. It could have con-inued to fulfil very important functions and could have had tremendously beneficial results for the municipalities and the people. For some reason or other the government felt the plan should be discontinued and therefore this legislation as well was dropped.
Bank of Canada Act
In view of the fact that the municipalities are providing services to the people and facilities in the form of hospitals, schools and other projects, we had insisted they should have access to capital at the cost of administration or at very low interest rates. I do not believe any valid argument can be voiced against this proposition. Considerable amounts of money are lent to countries abroad, and we are not complaining about that. The government is lending millions and millions of dollars to other countries without interest. Yet we find our municipalities trying to keep up with the demands for educational and health facilities and having to go out and borrow money at fantastic rates of interest.
I do not believe this is right. I do not believe it is proper. I do not believe it is just. We submit to the Minister of Finance once again, therefore, that a branch of the Bank of Canada be established, call it a municipal development bank or whatever you like, that will provide money for these capital social projects at the cost of administration or, if there must be an interest rate, the interest should be turned back into the consolidated revenue fund. Capital must be provided in order that our municipalities will be able to keep pace with the increasing demand for these facilities in their areas.
I believe such a program would have beneficial results. If capital at cost or a reasonable interest rate were provided, it would save the taxpayers of this country a great deal. Instead of paying twice the value of the project in accumulated interest the municipalities would be able to double the facilities that are provided. If a building were going to cost $1 million rather than paying over $2 million for it on the basis of amortization over a period of years a municipality could provide two such institutions at the same cost. In addition, such a program would release private capital for national development.
I believe this would have a beneficial effect upon our economy as well. There is a great deal of talk about the lack of adequate capital for investment and development. I submit that if municipal and other governments were taken out of the borrowing field, much of this capital would be available for productive enterprises and for the further development of our country. I have the feeling that this would tend to reduce interest rates and the capital available would be more than adequate to meet the needs of our people.

March 13, 1967
Bank of Canada Act
There is one other matter with which I should like to deal briefly. I refer to the national debt. We do not worry too much about the national debt, I suppose, as long as we can keep the ship sailing and as long as the people receive fairly good services. I am sure that the government is not concerned at all about the national debt. I should like to refer to a document entitled, "In Growing Debt We Trust", which was prepared by Wilfrid C. Krug, Canada Building, Windsor, Ontario. I believe this gentleman is a business consultant. This statement is made about the national debt on page 9:
The Canadian government has used Its newly-acquired power over money to create a fantastic unpayable interest-bearing debt and, in recent years, has refunded the debt at much higher interest rates and extended the maturity date up to 30 years making the debt a $900 million annual burden to the taxpayer.
Of course the amount would be higher than that now because this document was prepared in 1961.1 continue with the article:
[DOT] (4:30 p.m.)
This terrific debt and its impact on society is bound to stimulate fresh and deeper investigation and lead to a higher stage of organization in the realm of money. When the Canadian people once know, as a result of the revolutionary changes in monetary matters, that it is now unnecessary for the government to pay $900 million interest on its own credit, they will demand monetary reforms. Indeed, with the power over monetary matters which the government possesses, no government in a true democracy has any moral right to bind its people for one minute longer than it holds office. Jt has no moral right to impose its will on the future generation compelling it to pay 51 per cent interest on non-callable bonds for the next 30 years.
The article then goes on with this statement:
If the government financed needed deficits and retired its maturing debt through the central bank, this would bring us back to pre-world war I days when there was practically no government debt.
In his presentation Mr. Krug referred to an interest charge of $900 million on the national debt. According to the summary of the estimates which have just been tabled this afternoon I notice that the interest on the public debt amounts to $1,273,906,400. So the figure has increased from the $900 million referred to by Mr. Krug to over $1,273 million. And I suppose the end is not yet, Mr. Chairman, because we will continue to face this problem until parliament and this government act, and act decisively, to make some fundamental changes in monetary policy to meet the needs of the present day.
There is reference in this booklet to another proposal which has been put forward

by Social Credit for quite a number of years, namely, the progressive transfer of our national debt to the Bank of Canada. I believe 1 have previously made reference to an advertisement in a newspaper on November 28, 1966 in regard to the issue of $500 million of non-callable government of Canada bonds. The advertisement stated that the Bank of Canada had already agreed to acquire a minimum of $35 million of these 5i per cent bonds which are due January 15, 1968. I suggest that if the Bank of Canada can assume a few million dollars of our national debt it can certainly go further and assume all of our national debt through a progressive transfer.
If I may deal with one other aspect of this problem I should like to make reference to another statement by Mr. Krug in the booklet "In Growing Debt We Trust". On page 6 there is reference to the three methods of financing deficits. First of all, the government can print $1 billion worth of bonds and sell them to non-banking groups. Second, the government can borrow the money from the private banks. Third, the government can borrow the $1 billion from the Bank of Canada which is owned by the people. This method of financing does not create an interest burden because the profits of the Bank of Canada are turned over to the government.
I am not going to say anything further on the issues I have raised today, but I believe they are very important and bear repeating. First of all, there is the question of monetary policy. Second, we must consider the provision of capital to the level that governments need to take care of their social capital requirements. Third, we should take care of our national debt by transferring it to the Bank of Canada and liquidating it, thus saving the taxpayers over $1,273 million. I believe that the people of Canada would prefer to invest in the development of this country rather than in our national debt. If this policy were followed, Mr. Chairman, and our national debt transferred to the Bank of Canada and eliminated, then our people would invest in the development of our country and we would see tremendous advances right across the nation.


Edward Nasserden: Mr. Chairman, the measure before us is a unique reminder of another parliament and of another prime minister, the late Right Hon. R. B. Bennett who, leading the government of his day, placed upon the statute books the Bank of Canada Act. The action that his government took was designed
March 13, 1967

to strengthen the hand of the federal government and its control over monetary policy within the nation. The result was to provide parliament with a new weapon to influence financial and economic conditions. That government, led by Calgary's most noted son, wanted to preserve the heritage and resources of Canada for Canadians. It wanted to make sure that the future of this country would not be left to chance or whim.
I recall the origin of that legislation. I recall how it was labelled by some as so much nonsense and heresy. That image has now largely faded, but today we are faced with a Prime Minister and a government which, by their actions during their term of office and by the deeds they have committed, have placed this nation in the economic jungle of an entirely new era.
One need only consider for a moment the economic conditions prevailing with the nation today to realize the ground that has been lost under the present administration led by the Prime Minister. One might well ask the question: Where has he led us? The answer to that question is written in privation, hardship and opportunity denied. Indeed, the monetary, fiscal and taxation policies of this government have led to the greatest period of labour unrest that this nation has ever witnessed. The result of these policies has been evidenced as well by the steadily increasing cost of production and the lack of that productivity which is essential to the welfare of all our people. Not only that, sir, but there has been increase after increase in the cost of living, increases taking place consecutively from month to month and year to year. Canadians now have the highest cost of living in the entire history of the nation. All Canadians have had to pay a fearful price because of the role played by this government. In addition, taxes have increased beyond anything visualized even a few years ago.
Why have these things occurred if not as a result of the callous, careless abandonment of sound economic policies on the part of the Prime Minister and his ministers opposite, who like to plead innocent? But events from day to day tell a different story. We have tight money in this country today, the highest interest rates in our history and the highest cost of living. The Minister of Finance smiles when these things are mentioned as tough they do not work hardship on the people of this country.
Bank of Canada Act
[DOT] (4:40 p.m.)


Mitchell William Sharp: Mr. Chairman, may I ask the hon. member whether he has noticed a very rapid drop in interest rates in the last few weeks or whether he is still thinking about the situation as it was some months ago?


Edward Nasserden: Even today, in the House of Commons, one of the minister's colleagues in answer to a question intimated that the increase in the cost of C.M.H.C. loans brought about by the government was something to brag about. It is an indication of the attitude taken by hon. members opposite as they try to come to grips with the problems which face the economy today. I hesitate to believe that ministers opposite are so ignorant as to fail to realize the impact their policies have had upon our economy and upon the future prospects of this nation.
Incidentally, I hope the minister is not taking this too hard, but I see he has left the chamber. I thought he could take it better than that. But there are other ministers present and I say to them that Canadians will have to pay a colossal price for this carelessness. Future generations will pay and pay and pay because of the failure of the government to follow sound economic policies suitable for this day and age. This government, led by the Prime Minister, has set in motion a sinister, creeping phenomenon which could be described as a disease capable of weakening and eventually paralysing productivity in this nation. It might even threaten the identity of Canada itself.
Our industrial potential cannot help but be retarded and a large part of the Canadian heritage is bound to be lost for future generations. The government made decisions. The government set out on a deliberate course designed to bring about rising interest rates. It succeeded in those efforts. Despite what the Minister of Finance said a few moments ago, interest rates were never higher than they are today. The government opposite ignored the warnings of the opposition. It ignored warnings from its own ranks. It created a crisis with regard to housing in this country.
I say the blame for all this rests upon the shoulders of hon. gentlemen opposite. It is they who are responsible for the tight money situation which has bedevilled the housing picture from one end of Canada to the other. The Minister of Finance does not like to hear these things. I was about to say that he had left the chamber while I was discussing them in order to show his contempt.

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Bank of Canada Act


Robert Henry Winters: He had other reasons.


Edward Nasserden: Even though the minister does not like to hear these things, they are part of the heritage he is giving to Canadians, and the time which was consumed in the Liberal caucus in order to subdue the more enlightened members of that caucus in connection with interest rates has had a serious and inescapable effect on the money markets of our nation.
The opposition parties were ready to deal with these problems. But the Prime Minister wanted to point with pride to the pansies around him and declared that no division of opinion existed in his party. Canadians had to wait while this domestic quarrel within the Liberal caucus resolved itself. Thus it was that the economic situation in Canada worsened. Tight money and rising interest rates are part and parcel of the consequences of actions taken by the government. The government made a further decision which again was a delaying manoeuvre to cover up the cowardice of the administration in the field of consumer loan controls and legislation. Here again, the determination of priorities is revealed as one of the prime weaknesses of the government led by the present Prime Minister.
The Bank of Canada Act reminds us all that monetary control is the responsibility of the government, a responsibility which it cannot shirk if the best use is to to be made of the resources of our nation and if the greatest possible development is to take place. The hon. member who has lately resumed his seat expressed the opinion that the conditions which now prevail will continue to prevail and perhaps get even worse unless parliament acts and acts decisively. I say to him and to his group: Why does he not act decisively together with the other members of his party? Time and time again they have assisted a government that is guilty of the errors which have brought about high interest rates, tight money and rising living costs.


Alexander Bell Patterson: May I ask the hon. member a question?


Edward Nasserden: As soon as I have finished I will be glad to answer any question which the hon. member wishes to ask.


Some hon. Members:: Oh, oh.


Edward Nasserden: On the other hand, I would be glad to answer the question now.


Alexander Bell Patterson: I was about to ask the hon. member whether he does not recall the time
[Mr. Nasserden. 1
when the same group maintained in office a government of which he was a supporter. We supported that government in the interest of stability until the people had an opportunity of assessing the work which was being done and the people decided that his government was not doing the job.


Edward Nasserden: I welcome that question. At that time, when he and his friends supported those who now comprise the official opposition, we did not have the high interest rates which prevail today. There was no tight money situation such as exists today. We did not face the high cost of living that we face today. We did not have a crisis on housing such as exists today.


Mr. Cashin:: You just had unemployment.


Edward Nasserden: The hon. member and the group he represents have given support to a government which perpetrated these crimes against the Canadian people.


Alexander Bell Patterson: I should like to ask the hon. gentleman whether he remembers the time when this party voted for an amendment submitted by the official opposition, an amendment which, if carried, would have defeated the government because it was a vote on the budget. But so many of his hon. friends were out of the house that the amendment was defeated.


Edward Nasserden: I do not remember anything of the sort.


Some hon. Members:: Oh, oh.


Richard Joseph Cashin: You were not here.


Edward Nasserden: Everyone in this country knows that time and time again members of that party have looked across the chamber and counted the members to see whether or not the government would be defeated.
[DOT] (4:50 p.m.)


Alexander Bell Patterson: That is not true.


Edward Nasserden: Mr. Chairman, don't you think that reveals something in regard to the sincerity of these hon. gentlemen when they talk about the monetary policy of the government and the responsibility of parliament? How can parliament act decisively if a certain group in this house reneges on its responsibilities in the manner that it has done so many times during the last three years? People across the country have come to believe that the Social Credit party is even more liberal than the Liberals themselves, and it is
March 13, 1967

a sorry day for Canada when we consider that fact.
I had not expected to be drawn into this byplay this afternoon. I wanted to draw attention to the fact that the government's monetary policy has been lacking in that decisiveness and purpose which are so essential if this nation is to prosper and if the heritage to be handed down to future generations is to be what we would like it to be. I wanted to bring attention to those shortcomings of the government that we on this side of the house see and to express the hope that even now it is not too late for the ministers to mend some of their ways and change the course which they set out upon so carelessly and so wantonly ever since they first took office.
When we think of monetary and taxation policies and the double-barrelled effect they have on the economy, we cannot help but condemn the government in the strongest possible terms not only because of the things it did not do but because of the deliberate decisions it took which have resulted in the conditions I have described this afternoon. It is a noted fact that ministers have been warned time and again, not only by the opposition in parliament but by many great trade organizations across the country, by businessmen and business institutions, but they have turned a deaf ear to all pleas and have continued on their way carelessly, wantonly, irresponsibly, frittering away part of that heritage which should be the right of Canadians when one considers the tremendous wealth of our country and the tremendous opportunities that are ours.


Some hon. Members:: Hear, hear.


Herbert Wilfred Herridge: Mr. Chairman, I listened with great interest to the speech made by the hon. member for Fraser Valley and I must say that on this issue the hon. member for Fraser Valley and the hon. member for Kootenay West are two hearts that beat as one.


Stanley James Korchinski: Lonely hearts.


Herbert Wilfred Herridge: I take this opportunity to speak this afternoon because I want to take advantage of Social Credit principles. I know the hon. gentleman will send out hundreds of copies of today's Hansard in which my speech will be included, at no cost to me.


Stanley Howard Knowles: On a debt free basis.


Herbert Wilfred Herridge: Quite correct. This bill, Mr. Chairman, seems to include amendments that 23033-879J
Bank of Canada Act
provide for the improved administration of the Bank of Canada. However, in my opinion it completely fails to get to the heart of the question, which is to give the Bank of Canada authority to provide the social capital required by the federal, provincial and municipal governments for the building of hospitals, universities, schools and other publicly owned projects about which we talk at such great length in this house.
I think clause 6 of the bill provides the major amendment to the Bank of Canada Act. The explanatory note says of it:
This amendment defines the relationship between the government and the bank in regard to monetary policy. It makes clear that there is a process of continuous consultation between the government and the bank in this regard and provides a procedure whereby, in the event of a disagreement between the government and the bank, the government may issue a directive to the bank as to the monetary policy that it is to follow. The amendment also eliminates the power the governor now has to veto any action or decision of the board of directors or the executive committee.
The responsibility of the government for monetary policy having been established, that is why some of us at this end of the chamber are appealing to the Minister of Finance this afternoon to deal with the heart of the matter and provide for the issuing of funds by the Bank of Canada.
I was very disturbed the other evening to hear a report on television that we borrow approximately $900 million a year from United States sources, which credit is entirely based on their knowledge of our natural resources, industrial equipment, our capacity to produce, and our integrity and willingness to repay the loans in question. I speak with a great deal of conviction on this question because I am rather conservative in finance. I was brought up to waste not and want not, and never to buy anything unless I had the cash to pay for it. I believe that two and two make four in finance, and I believe this is one field in which we can establish that Canada is a sovereign state. All we are asking is that Canada become a sovereign nation by giving the Bank of Canada the right to issue the capital for the social investments I have mentioned.
It may interest the Minister of Finance to know that the provincial convention of the British Columbia Liberal party unanimously adopted a resolution in 1932 urging not only the issuance of currency and credit by the Bank of Canada but also the nationalization of the banks of Canada. That resolution was sponsored by the late Senator Gerry McGeeer and the late Right Hon. Ian McKenzie. I sat in

March 13, 1967
Bank of Canada Act
that convention beside those two gentlemen and they were very active in getting the resolution adopted, a resolution which was actually more radical by far than what we propose this afternoon.
During the provincial election of 1933 the late Senator McGeer published a pamphlet entitled, "The Conquest of Poverty Through the Reform of the Banking System," which was distributed wholesale in British Columbia. It urged the reform of the banking system and indicated that these were the views of the Liberal party at that time. This, Mr. Chairman, is a story which has been told repeatedly in this house in other parliaments and also in the legislatures. President Lincoln, during one of his campaigns, recognized the fact that governments are controlled by those people who have the right to issue money. Thomas Jefferson, who was the first Secretary of State of the United States, once said:
I was duped ... by Secretary ol Treasury (Hamilton) and was made a tool for the forwarding of his schemes, not then sufficiently understood by me . .. The issuing power should be taken from the banks and restored to the government to whom it rightfully belongs.
That is what we are arguing this afternoon. I remember that a former prime minister of Great Britain, Mr. Gladstone, also recognized this fact. I remember that on one occasion, Mr. Woodsworth, speaking in this house on February 22, 1934, as recorded at page 834 of Hansard for that date, had this to say:
I would urge today that the power of finance in Canada is almost supreme. I think I am not going too far to say that in practice it is greater than that of the government. In recent years some of us have been almost shocked when we learned that the army and the military clique in Japan had never been brought under the control of the parliament of that country. Well, I take it that in Canada the financial powers have never been brought under parliamentary control. Even as far back as the time of Mr. Gladstone I find that there was a dawning recognition of the tremendous power of the banks.
Reading from Morley's Life of Gladstone I find a statement from Mr. Gladstone:
"From the time I took office as Chancellor of the Exchequer I began to learn that the state held, in the face of the bank and the city, an essentially false position as to finance. The hinge of the whole situation was this: The government itself was not to be a substantive power in matters of finance, but was to leave the money power supreme and unquestioned. In the conditions of that situation I was reluctant to acquiesce, and I began to fight against it by financial self-assertion from the first... I was tenaciously opposed by the governor and the deputy governor of the bank"-
[DOT] (5:00 p.m.)
That is the Bank of England.
-"who had seats in parliament, and I had the city for an antagonist on almost every occasion."

On the next page Mr. Woodsworth went on to say:
I submit, Mr. Speaker, that unless some body, either the newly appointed bank-
The Bank of Canada.
-or the government, itself exercises what is here termed sovereign authority, we are not going to secure the full control of credit, and are not going to be able to control price levels. I think that nothing short of that is going to help us in a material way to solve our present difficulties.
For many years in this house the late William Irving made speeches which clearly indicated the international control over the banking system of the world, largely by European and United States banks. On June 27, 1938, as found on page 4271 of Hansard, Mr. M. J. Coldwell made some comments during a discussion of a bill to amend the Bank of Canada Act. These quotations indicate that for years and years, according to Mr. Woodsworth's speeches and the speeches of other progressive members of this house, this party had advocated the very policy which has been advocated this afternoon. This is what Mr. Coldwell said:
This measure can be of great practical importance. It depends on how the new Bank of Canada functions and to what extent it is made an instrument of public policy. I should like to think that just as in Sweden, New Zealand and other countries where the central bank is under national ownership and control, the Bank of Canada will play an important part in preventing booms on the upswing and deflationary depressions on the downswing. I believe that a central bank publicly owned and properly operated can do much in these directions.
During Mr. Coldwell's speech Mr. R. Reid,
who was the Liberal member for New Westminster at that time, expressed his en-dorsation of this principle. That was during the days when the Liberal party in British Columbia was all for nationalization of the banks. Mr. Coldwell went on to indicate how progressive members of this house had since 1924 urged the establishment of a nationally owned central bank which would be responsible for the issuing of money.
I also find that when speaking in this house on March 13, 1944, the present member for Winnipeg North Centre endorsed the same principle. At that time he was speaking about the social capital that would be required after the war was ended for the building of various public projects for the federal government, the provincial governments and the municipalities. This is what he had to say:
First, there is the fact that the bill gives the Industrial Development Bank-
March 13. 1967

The Industrial Development Bank, of course, is an agency of the Bank of Canada.
-or shall I say, the industrial development wicket of the Bank of Canada, no power of issue. To my way of thinking, as other hon. members who have spoken have pointed out, that is a serious shortcoming.
Secondly, I would point out that the amount of money to be provided under the terms of this bill for industrial development is hopelessly inadequate to meet the problem which it proposes to attack, namely, that of sufficient assistance in post-war production-to maintain a high level of economic activity, a high level of industrial production.
Since that time members of this party have continually supported this principle and have urged the government to take action along these lines. I will summarize my remarks. I approve of the remarks made by the hon. member for Fraser Valley. I will not repeat some of the material he presented to the house during his excellent speech. I do not always call his speeches excellent but this time I quite agree with every word he said.
If the Bank of Canada is given the right to issue the capital required for social investment by federal, provincial or municipal governments, if the Industrial Development Bank is given the same right through the Bank of Canada for the provision of capital for smaller industries, if the private banks of Canada continue to fill the short-term financial needs of corporations, companies and individuals and if, underlying that, the credit unions provide the capital for investment in consumer goods, in my opinion we will have established the sovereign right of Canadians to control their social capital requirements. We will have established Canada definitely as a sovereign state, we will have established the value of our resources, industrial and other developments, and we will have provided a sound credit foundation for the purchase of consumer goods.
In my opinion, if we could get the minister to agree to the policies expressed this afternoon, we would have a sound banking system. I know the minister is an honourable gentleman and as I look at him it seems to me that he is almost persuaded by the remarks made by speakers this afternoon. I had intended to say more at this time, but obviously there is no necessity. In concluding my brief remarks on this subject I should like to ask the minister to tell us why the Bank of Canada and the Industrial Development Bank cannot be banks of issue to provide the social development capital which is necessary for public projects in this country for federal, provincial
Bank of Canada Act
and municipal governments. Before this debate terminates I should like the minister to give his opinion in respect of the representations which have been made to him this afternoon, because we believe this is the basis which will enable us to place our financial system in this country on a sound footing, provide for the development of hospitals, schools, roads, universities, and even provide the minister with an opportunity to pay to Premier Bennett of British Columbia the $100 million he is seeking to make up for the deficit in the building of the dams on the Columbia river.
[DOT] (5:10 p.m.)


Mr. Latulippe:: Mr. Chairman, I am pleased to say a few words this afternoon on the banking system, the Bank of Canada, its aims, its principles, its achievements and the prerogatives it should make use of.
The Bank of Canada is only playing half its role. The Minister of Finance and Receiver General (Mr. Sharp) and most hon. members do absolutely nothing and let things drift, they do not want to straighten out the abnormal economic situation which now prevails throughout the country.
The Bank of Canada Act is the greatest piece of legislation, one concerning which the highest authorities must make use of their powers. The Bank of Canada does not play its part and nobody in the house is concerned about it, except the hon. member for Kootenay West (Mr. Herridge), whom I wish to congratulate, and the hon. member for Fraser Valley (Mr. Patterson) and also those who understand the meaning and the duties of a national bank. And now, Mr. Chairman, this is the point I want to make.
We can see very few members in the house. In fact, we are talking before empty seats whereas the legislation in question has indescribable importance.
The house is ready to let everything go. as in the past. Private institutions have been entrusted with such controls and sovereignty as belong to the state. The sovereignty that should rest with the Minister of Finance was given to private establishments, and people do not give a tinker's dam.
When the Minister of Finance needs money to conduct the nation's business, he has to go on bended knees to the private finance companies to whom we have surrendered our sovereignty. Such is the responsibility of every member of this house.

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Bank of Canada Act
We would have a great deal to say. We could speak for hours on end about the improvements which could be made in the Bank of Canada. But some Canadians elected by the people and answerable to them do not care at all about the population. As a matter of fact, they submit to a few financiers who control the finances of our country at the expense of the people. That is the point I am trying to make.
Mr. Chairman, I should like to define the nature of the Bank of Canada and its responsibilities; I want to bare all this before parliament, before the Canadian people and members of this house who seem more or less interested in dealing with the most urgent problems facing a country.
Mr. Chairman, the Bank of Canada was established under the act of 1934 by the Canadian parliament, with a view to controlling credit and currency in the best interests of the Canadian economy. That is not what it is doing. That is not the responsibility entrusted to the Minister of Finance and Receiver General. He is not the one to carry out the responsibility which is supposed to be his and this parliament, which is nevertheless sovereign, does not entrust him with it.
Members of parliament are shirking their responsibilities. Now, I am telling you, before this parliament, before this house, before the French Canadian nation, that one of these days they will have to assume them. That is why they were elected. Again I say that this is one of the greatest responsibilities they have to exercise in this parliament, yet they refuse to do so.
What I am saying is very important, because I am speaking of the very purpose for which the Bank of Canada was created.
Can the minister define money, credit, the economic life, the nation? Four words: credit, money, economic life and nation. Four words to remember when discussing the Bank of Canada Act and the chartered banks and near banks act.
We have asked a lot of questions to the finance, trade and economic affairs committee, but 99 per cent of the answers given were evasive and were not directly related to the questions asked. They are afraid to tell the nation the facts; they do not want the Canadian people to know the financial situation; they do not want to come out and say what are the rules behind this financial system; they do not want to explain to the people
[Mr. Latulippe.l
what is finance, what is wrong with the economic system and the things which should be rectified in this system.
The Minister of Finance himself may be afraid to answer. As a matter of fact, in answering questions, he beats around the bush as much as he can. I have heard him in the committee, Mr. Chairman.
What is a nation? A definition can be given. The Bank of Canada is responsible to the nation. All corporations, whether banking, industrial or commercial, financial or agricultural, religious, university or college, municipal, provincial or federal, all are responsible to the nation.
These bodies have a right to live, not only to incur debts, to tax the people, imposing tax upon tax until the situation is untenable. These bodies have the right to live, and each individual also has the right to live.
One must mingle with all the different classes of society in order to see that our society is badly organized, and that the extremities of our economic body are diseased because the bloodstream of our economic structure does not reach all the limbs. And therein lies our duty: to see to it that the bloodstream of our economic structure reaches all spheres of society and all areas of the economy. The blood pumped by the economic body which is the Bank of Canada must reach all the limbs of our society, so that the Canadians may live adequately and honourably in a country overflowing with riches. But we are evading our responsibilities.
Is not the nation made up of all the human beings in the country? What do people across the world mean when they speak of Canada, Mr. Chairman? Do they mean its population or the land itself, its natural resources or its inhabitants? Private and public institutions succeed each other. Are they not merely the instruments of administration, of production of goods and services, of material or intellectual assets or possessions belonging to the individuals who make up the nation?
Are not money and credit instruments of exchange, of trade, serving economic life and representing the value of the goods and services exchanged between the individuals of whom the nation is composed?
If we started by assessing the situation, the words we use when considering and discussing our legislative reforms, we might have a better chance to arrive at more encouraging, more positive and progressive results.
March 13, 1987

Why not determine exactly what currency is, so that we might know where we are going with that. What is credit? Why not issue some? And why not create currency, which is so necessary to the economic life of the country, which has the power to create and manage credit? It is the duty of the Minister of Finance and of the hon. members to place the currency in the hands of institutions which need it to develop the country.
Let us say that, at a certain moment in our economic life, we put $5,000 in circulation. Those $5,000 constitute Canadian currency, if they are deposited in the branch of a chartered bank. But, they are no longer Canadian currency if they are put in the branch of a tiust company or a credit union. They are not Canadian currency any more. A loan of money made by a chartered bank represents a tax increase on Canadian currency, on the whole economic life of the nation. A loan of money granted by a Caisse populaire or by a finance company represents only a transfer of funds between two corporations.
[DOT] (5:20 p.m.)
Everything is so thoroughly mixed up, confused and complicated that the economists and the bankers themselves no longer understand anything at all. They no longer will take the risk of defining the words: money, credit, nation, Canadian currency, money supply, total money or credit supply in Canada. Questions were asked in committee and the Minister of Finance and all the members of the committee know that questions were asked to find out the nature of money, of currency in circulation, what constitutes the money supply and so forth.
If one is to understand the monetary system well, one must understand that. And it is so complicated a matter that it is almost incomprehensible.
First of all, there is what university scholars call small coinage: cents, nickels, dimes, quarters and fifty-cent pieces. That is the metal money of which, all told, there is almost $300 milion worth in circulation across Canada. Then we have the Bank of Canada notes in denominations of one, two, five, ten, twenty, fifty, one hundred and one thousand dollar bills. They bear the signature of the governor of the Bank of Canada. They represent approximately $2,700 million.
There, then, is all the visible money in Canada: $300 million in metal coins and $2,700 millions in notes, for a grand total of
Bank of Canada Act
$3 billion in legal money issued by the Bank of Canada in circulation throughout Canada. Now, when we speak of the Canadian money in circulation, we claim it amounts to $21 billion. Where do those $18 billion come from. I put that question to the Minister of Finance. In addition to the $3 billion in real, metal and paper money. This is where scholars and economists start mumbling and each of them has a different story.
Who, then, created the $18 billion of Canadian money supply, if we have, in fact, only $3 billion in money coined by the government and supplied by the Bank of Canada? There again, economists mumble, and to realize it, you only have to re-read the many excerpts of their official evidence given before the committee on finance, trade and economic affairs, as recorded in some 20 reports of proceedings distributed to each member and each minister.
The Bank of Canada has been in operation for 30 years. It is time to put some order in our monetary system. They do not yet know what is credit, what is the money supply, what is Canadian money or who prints the $18 billion in excess of the $3 billion that can be seen.
I am not saying that does not make sense, I am only saying that we do not know what we should know. Why is the money deposited with a trust company, a finance company or a credit union not included in the money supply? That is another mystery that could not be solved in committee. Evasive answers only were given. And yet, we were there to enlighten the people, to put before them the results of the monetary systems as they are. And such information was denied us.
Therefore what is the purpose of the Bank of Canada? Why do the banks have the power to create billions of dollars worth of deposits on bills or bonds? Why does not the government give them the power at least to create enough so that our provinces and all our public institutions would not have to go to foreign countries to get funds?
That is the important matter that should be examined and that I would like you to see and settle it once and for all.
Take for instance companies, municipalities or provinces. Why are those guarantees sufficient when foreigners lend us money on our own credit? Why are those credits good for securing foreign currency? Why are they not good enough to enable the government to capitalize sufficiently, with these same credits, to finance those same agencies?

March 13. 1967
Bank of Canada Act
This is a big question that was never understood, that neither the Grits nor the Tories ever accepted to settle in this parliament. No one in this parliament ever accepted to settle or to attempt to solve this matter. Some day it will have to be dealt with.
This maze of credit money, financing, and company shares gives rise to a lot of questions. There are so many weird intricacies about the various kinds of reserves, with different rates, with reserve bases being used as guarantees for all sorts of savings, with various basic rates for reserves to insure the circulation of currency, of chartered banks accounting system.
And this mystery will still remain, in spite of all the efforts of a few honest members to obtain some explanations on those basic matters of our economic life, on our monetary and financial systems, on our system of currency and credit, on our banking, business and government systems; on our system of currency and credit, share capital and bonds; on our system of taxation and cheque circulation; on our system of income, expenditure and profits among individuals, families, companies and institutions.
This could be quite simple, if we took the trouble, Mr. Chairman. The matter would be quickly settled once it had been decided to administer the Canadian nation for the benefit of its people, of 20,400,000 human beings, rather than for a few institutions or corporations which control the economy of Canada, because they have been granted the right to exercise such control.
So we must add that one of the objectives of the Bank of Canada is to look after the question of money, credit and even capital, in the best interests of our economic life. The bank will have to see to it that it will never be necessary, from now on, for the provinces and municipalities to go to foreign countries to borrow, by way of issuing bonds at a high interest rate and on a long-term basis, to finance Canadian institutions.
The Bank of Canada, on the guarantee of our natural resources and Canadian labour, should be able to facilitate all issues of capital in the form of bonds that foreign banks are willing to issue on any kind of guarantee.
If we were looking after our own business, we would be able to guarantee all those goods and services the population needs so badly and we could thus remain masters in our own home, without giving up everything to strangers.
[Mr. Latulippe.l
Why should Canada not be in a position to produce its own capital, as it is capable of producing its goods, especially as far as municipal and provincial services are concerned? The Bank of Canada should issue all the money needed for the progressive administration of our municipalities, provinces and school boards.
[DOT] (5:30 p.m.)
There is no need, Mr. Chairman, to go to New York, Paris or elsewhere in order to create new bonds guaranteed by our resources and our people capable of producing and of paying taxes for the repayment and interests or administration costs.
Such is the aim, Mr. Chairman, of a resolution I shall move in due time before this Parliament, with the support of a colleague.
Thus, the Bank of Canada will finance provinces and municipalities and it will be a right and an obligation on the part of chartered banks to finance individuals and private enterprise, according to the present system.
We do not intend to deprive the chartered banks of any of the existing methods, but the duty of the existing chartered banks lies in the financing of private enterprise. On the other hand, it is up to the state, to the government, in brief to the hon. members to see to it that the Bank of Canada should finance other people's property. In so doing we would be improving the lot of the Canadian nation.
I already said, Mr. Chairman, and I repeat it, that it is not power we are seeking, but monetary reforms. We know that the few people who have at least had the benefit of catching a glimpse of our financial system, who have some idea of what the Bank of Canada stands for and of what it can do for people and for this nation, are calling upon the Bank of Canada to act are demanding a reform of our statutes, are asking for the necessary amendments so that the Bank of Canada may regain control of its money and its credit in order to finance all our public institutions as well as the future ones which will have to be developed.
If the Canadian people are able to produce, the Minister of Finance, with parliament's permission, is certainly able to take steps to finance the present production, even the future production of this country. We are certainly able, Mr. Chairman, to eliminate in a few years the dreadful public debt that is crushing the people and obligating a nation to pay ever increasing taxes which they find revolting. Mr. Chairman, it is those taxes that the people find sickening.
March 13, 1967

In fact, one needs only to look at what is happening to see how much the people are disgusted.
If, across Canada, there are so many endless strikes-one strike follows another and one is not settled that ten others break out-this is due to dissatisfaction. Nobody tries to solve the economic problem.
Mr. Chairman, at each federal-provincial conference it seems that the provincial premiers claim as strongly as possible money from the Minister of Finance, as well as action; in brief, they are asking for the necessary capital to finance their respective provinces. However, no one demands monetary reform, because this is not deemed proper. If the Minister of Finance has not taken such steps it is because, to his mind, it is better to maintain the status quo, to let the debt go on snowballing and Canada getting poorer and poorer. As Canadians develop their country, we allow those institutions to enter to their credit the assets of the citizens, that is the assets of the country and put the country and its population on the liability side. Here are responsibilities we have not been able to assume.
Monetary capital is only the expression of the economic capital itself. Money and credit are only words meaning goods and services that citizens barter. Why should we lack tokens and symbols, when we possess in fact plenty of goods?
Why should we reach the acme of ignorance and ignominy and ask other countries for the authority to create in our stead the capital we require? Yet, such is the current situation. The Minister of Finance may find this funny but it will not be quite as funny, when the revolution is here and he is asked whether he has taken his responsibilities.
If our country has reached its centennial, hence its majority, and if it now has a literate population of over 20 million, there is no valid reason for us to remain dependent on neighbouring or far-off countries simply to create our monetary capital. Mr. Chairman, we have our accountants, our bankers, our Canadian ministers, in short, our own parliament, who are capable of determining the economic, monetary or administrative symbols of all the private or public wealth our country is capable of producing. Are Canadians unable to produce, Mr. Chairman, in pursuing their daily tasks, whether they are material, intellectual, spiritual, or if you prefer, cultural activities? Is the government unable to 23033-880
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control the Canadian economy, so that each citizen can normally enjoy a pleasant life and a reasonable standard of living which the country can afford?
One can hardly say, Mr. Chairman, that there is a lack of production in Canada. It will reach $62 billion in 1967. Perhaps $38 or $39 billion worth of goods will be sold, but $20 odd billion worth of goods will remain in warehouses and on shelves, unsold, because available means will not have been taken, because the government will not bring about the necessary reforms in the Bank of Canada, because they do not want to take the necessary steps so that the Bank of Canada can distribute the goods and services that the people of Canada are asking for, goods and services which have been produced to meet the needs of the Canadian people. I think it is a crime that goods should be allowed to remain like this in warehouses. I think it is also a crime that some people should be jobless and drawing social welfare allowances and unemployment insurance benefits which, in fact, are paid at the expense of the working man.
To give to the unemployed, the working man is robbed, and it is a crime, Mr. Chairman, to tolerate such a state of affairs in a country where the economic situation could be adjusted so easily.
I could go on and point out many other things, Mr. Chairman, but I will close with these few words.
The role which a central bank should play inside and outside Canada, Mr. Chairman, is this.
If the Bank of Canada fulfilled its duty, if it discharged its responsibilities, we would not be ashamed, humiliated and accordingly burdened with a drop of our Canadian dollar below its par value of 100 cents per dollar. We would not be faced with 7 and 8 cents cuts such as we witness today.
Let the Bank of Canada play its part fully, concerning foreign countries, private banks, the federal government and the provincial government; then, no more will be asked, everyone will be satisfied and the private banks will find it easier to play their own part, according to the economic needs of private individuals and private institutions.
Mr. Chairman, the Bank of Canada is 33 years old. For 33 years it experimented, searching for balance, for its own purpose in the changing pattern of economic life in Canada among the nations of the world.

March 13. 1967
Bank of Canada Act
I', is a positive role that the Bank of Canada will be called upon to play in the future, within as well as outside Canada.
Therefore, we must take advantage of this decennial revision of the Bank Act, the act concerning the near banks and the act of the Bank of Canada, because upon them revolves the whole economic life of the nation and that of all the Canadian institutions as well as the economic life of each and every one of its 20,400,000 citizens in the 4,800,000 families or homes in Canada.
[DOT] (5:40 p.m.)
Mr. Chairman, in Canada there are 20,400,000 people or 4,800,000 families consisting of two or several people. There are 400,000 institutions of all kinds of which 80,000 limited companies, 800 large companies or corporations which are listed on the stock exchange, eight chartered banks-we shall have ten in a short while-and only one Bank of Canada which must control and reduce the credit of the nation, which must give-


The Acting Chairman (Mr. Richard):: Order, please. I am sorry to interrupt the hon. member but his time is expired. I recognize now the hon. member for Lapointe.


Mr. Gregoire:: Mr. Chairman, today we are studying amendments to the Bank of Canada Act.
The Bank of Canada might be called the brain that directs the whole economy in this country, that should direct the monetary resources toward all areas across the country, at all levels of activity, and see to it, from an economic standpoint, that the country may expand and progress. Is this the case today?
Mr. Chairman, whenever we consider the changes to be made to the Bank of Canada- the computer of our economy as a whole and of its development-the first question that comes to mind is how those in charge of our monetary system look at its management and orientation. Knowing that when all is said and done, it is the Minister of Finance (Mr. Sharp) who-and the more so under the new legislation-controls our monetary system in general, that he can give orders to the governor of the Bank of Canada and thus influence our economy, we wonder how the Minister of Finance reacts or thinks in relation to our monetary system.
As recorded in the Minutes of Proceedings and Evidence of the committee on finance, trade and economic affairs, page 2998, I directed to the Minister of Finance the following question:

If you have authority over the volume of money supply, on what do you base your decisions to set the money supply at a given level?
Please note the importance of the question, Mr. Chairman, since I had earlier asked the minister who had authority over the volume of money supply, that is, how much money there should be in circulation in Canada. Well, since it is the minister who has the authority to decide how much money will be put in circulation in Canada, I asked him:
-on what do you base your decisions to set the money supply at a given level?
And what did the minister answer? Something out of this world. Mr. Chairman, the hon. members of this house should be overwhelmed with admiration at the minister's guilelessness, because his answer was really out of this world. As a matter of fact, this is what he replied, as recorded in the Minutes of Proceedings and Evidence of the committee on finance, trade and economic affairs, on page 2998:
When a Governor of the Bank of England, Lord Norman, was once asked that question by J. M. Keynes, he said:
"I do it by feel and flair."
Indeed. So, I asked the Minister of Finance the following question:
-on what do you base your decisions to set the money supply at a given level?
I say to the Minister of Finance: You are responsible for determining how much money Will be put in circulation in Canada, and the minister agrees to that. And then, I asked him:
On what do you base your decisions to set the money supply at a given level?
And in reply the minister quotes the answer given by Lord Norman, Governor of the Bank of England:
"I do it by feel and flair."
If I have any feeling of love for my fellow citizens, I will see to it that a greater money supply is put in circulation so that they will be able to buy what is being produced.
That is one feeling. Therefore, if he gets up in bad humour one morning, with a feeling of hatred, for even the hon. Minister of Finance and Receiver General may have different moods, according to his feelings, well, he will withdraw the money from circulation to create hardship for his fellow citizens, and this according to his feelings. Such feelings may be of varying degrees.
March 13. 1967

But according to his feelings the minister decides how much money will be put in circulation in Canada. The minister also says "by flair". So then we must have a minister with flair.
I should like to know how the right hon. prime minister proceeds when he has to appoint a Minister of Finance. What kind of tests must the hon. minister undergo in order to prove whether he has flair or not? For the money supply in circulation in Canada increases according to the minister's flair, whether he is keen-scented or not.
The minister admitted that himself; I am coming back to the question I asked him on page 2998 of the Minutes of Proceedings and Evidence No. 43 of the standing committee on finance, trade and economic affairs:
-on what do you base your decisions to set the money supply at a given level?
Here is what the hon. minister answered:
When a Governor of the Bank of England, Lord Norman, was once asked that question by J. M. Keynes, he said:
"I do it by feel and flair".
The minister said that, not I. One must have flair, be shrewd, be far-seeing, in order to decide how much money will circulate in Canada.
Industries may produce, but that is of no account, it is not the minister's flair. Numerous workers may be working, that is of no account, it is the feeling of the minister that counts. In March or in April, when flowers begin to bloom, feelings are better then, so the money supply is being increased. Comes autumn and the yellowing of grass and the money supply is decreased because all that may influence the feelings of the Minister of Finance. That scientists and technicians find new production methods is not important. It is the flair of the minister that counts. His flair.
Mr. Chairman, where can we go with our monetary system if our Minister of Finance has decided to rely on his flair and feel?


An hon. Member:: What if he has no flair?


Gilles Grégoire: Somebody is asking me: what if he has no flair? Well, if he has no flair, we will sail on the rough waters of our economic system like a rudderless ship.
Mr. Chairman, the answer given by the Minister of Finance shows that our economic system has no scientific basis, as it should. Instead, it is based on chance, on flair, on feel. It has no scientific basis and its only purpose is nothing less than to satisfy the 23033-880j
Bank of Canada Act
hunger for profits of a group of big bankers who become richer because they know that the Minister of Finance, the present incumbent or the others, has no flair or feel. This is the reason why our economic system is drifting along because our system is unscientific, unrealistic and does not take into account the technological development and progress but relies on the minister's insight and feelings. [DOT] (5:50 p.m.)
Mr. Chairman, you will agree that something must be done about it. Do you think that the Minister of Finance (Mr. Sharp) is the only one to have such opinions?
I should like to quote, in the first place, another answer of the Minister of Finance when I asked him insistently as shown on page 2999 of the same booklet and I quote:
Mr. Sharp, I am not talking about a budget which is a forecast of what is to come, but I am talking about the volume of money. I wonder if you take into consideration when you make your forecast the actual situation in Canada; I mean the total goods and services available which is, in fact, what is behind the money supply. Does it become a question of judgment or a question of statistics?
Then, the Minister of Finance replied:
Every time the Bank of Canada operates in the money market in its day to day transactions, it is having to make a judgment not only about the quantity of money and credit available now, but it has to make a judgment on whether the existing situation is going to be sufficiently encouraging or discouraging, as the case may be,-
Aga.n, the point in case is simply chance, Mr. Chairman,
-to influence the course of events in the future.
After all, the most important decisions that are made affecting the volume of business and the level of employment, are the decisions that are made in the business sector as to the volume of capita) investment.
And the Minister of Finance completed his reply as follows:
Each of these considerations has to be taken into account in every decision which is made either in the monetary field or in the fiscal field. I only wish, Mr. Gregoire, that I had a computer that could take all these factors into account and then could come out with an answer, not only about the present but about the future. I can guarantee you that the Minister of Finance would stay in power forever and whatever government he belonged to could go to the people with an unblemished record.
The Minister of Finance tells us that if he had a computer, he would no longer have to go by flair and take his feelings into account. He could use scientific data, accumulate them in the computer and receive an answer on

March 13, 1967
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present and future measures which would enable him to report to the people with an impeccable file.
For my part, I say to the minister that if he needs a computer, an electronic machine to complement or at least replace his feelings, this flair, I am willing to move an amendment to this Bank Act to allow him to buy an electronic computer to which he can then feed the required scientific data to obtain an adequate reply. It would be well worth it, because as things now stand, he says he follows his feelings and relies on his flair. With a computer he could go about it scientifically.
Mr. Chairman, I believe it would be worth it. I feel it may even be imperative that the Minister of Finance get a computer. Our economy can then be based not on haphazard or sentimental data, but on scientific data.
Mr. Chairman, on study of Section 1 of the bill to amend the Bank of Canada Act, I should like to limit myself to general considerations and reserve specific remarks for the detailed study section by section.
I asked the minister another question-


Mitchell William Sharp: Might I pose one first, Mr. Chairman? Might I ask whether the hon. member for Lapointe would comment upon the statement I made during our very interesting exchange in the committee when I said that Social Credit, if I may say so, seemed to me a sophisticated form of inflationary finance put forward most skilfully by people like the hon. member for Lapointe?


Gilles Grégoire: Mr. Chairman, I consider that interjection as a compliment, since the minister mentioned our ability in putting forward our doctrines, but it did not really require much ability, so simple it was to show and prove that the manner in which the Minister of Finance judges and appraises a monetary system is not normal.
When the minister tells us that he lets his feeling govern his actions, one does not have to be very smart to prove that it is not the right method of appraising the economic and monetary system.
On the other hand, when the minister says that he needs a computer, that is much more important. I feel one should be made available to the minister and it does not require much ability either to have everybody agree on that point, since the minister says he needs a computer in order to establish the monetary

system on a scientific basis rather than on an emotional basis.
Well, Mr. Chairman-


Mr. Chreiien:: If you will read out the whole sentence in which he referred to feel and flair, I think he concluded by saying that it was judgment. And this is not what the hon. member is showing at the present time.


Gilles Grégoire: Mr. Chairman, it would be necessary then, if there is a mistake in the report or in the Minutes of Proceedings and Evidence-


Joseph Jacques Jean Chrétien: Read further after "flair". You will see that he refers to judgment.


Gilles Grégoire: I will read out the sentence once more and if there is a mistake in it, well, the minister can tell us and we will correct it. And I quote, from page 2998, Mr. Sharp's sentence:
When a Governor of the Bank of England, Lord Norman, was once asked that question by J. M. Keynes, he said, "I do it by feel and flair" and I do think that to some extent that it remains a question of judgment.
And I read further on in the same paragraph:
There is no mathematical formula by which the money supply can be regulated.
No mathematical formula. And he quotes Lord Norman, who says: "I do it by feel and flair", but the Minister of Finance is not sure. He only thinks-"I do think"-that to some extent, but no more than to some extent, it remains a question of judgment. But only up to a point and no more, while the governor of the Bank of England says totally and completely by feel and flair.
The question of judgment is only to some extent, it is not certain-"I do think"-but only to some extent. And this supports what I was saying a while ago, that is that the minis-er operates by feel and flair. And if he needs a computer, we are ready to vote one to the Department of Finance, so that we may have a scientific monetary system instead of a sentimental monetary system such as we now have.
I shall resume my remarks which were interrupted by the brilliant parliamentary secretary of the Minister of Finance (Mr. Chretien). When I see the Minister of Finance applauding, I wonder why he is applauding. Is it because his parliamentary secretary must have appealed to his feelings also? Because I
March 13, 1967

think there can be two teams: one for the feelings and another for the flair.
Mr. Chairman, I asked another question of the Minister of Finance:
Mr. Sharp, I am not asking you questions about the future. We will discuss this afterwards. I am asking you questions about the after-effects of the reports. Do you feel that actually in Canada the money supply is sufficient for the expansion of Canada? Answer: Shall I put it this way? I believe that during the term I have been in office the money supply has been sometimes more than adequate for the purpose. I have not-
And it is the Minister of Finance who is speaking:
-not been concerned about a deficiency of money and credit. Maybe in the future I will be, but up until now I have not been.
Then, Mr. Chairman, the Minister of Labour rose and said: We have no money to build houses. The Minister of Finance answered him: I have never been concerned as yet, by the lack of money. Well, people are not building houses, but it is not for want of money, because this has never been of any concern to him.
[DOT] (6:00 p.m.)
The provincial governments must borrow. They have to borrow from the United States, but the Minister of Finance is not concerned with the lack of money, of course. Of course not. The 11 per cent sales tax on building materials will be raised to 12 per cent; he imposed a tax of 11 per cent, which climbed to 12 per cent, but he is not concerned about a lack of money. I must admit here that I had not entirely grasped the minister's answer when he said that he was not at all concerned about a lack of money because I was so flabbergasted.
There is unemployment in Canada. People are deprived of the necessities of life, housing is slowing down, everyone has to borrow in order to buy, or to buy on finance, but the minister is not concerned about a lack of money. Not at all. I was so surprised that I asked the minister to repeat his answer. He had not been concerned about what? And he replied:
I have not been concerned about a deficiency of money and credit. I may be concerned about that in the future but during my year or so in office I have not been concerned about that problem.
Not concerned about the lack of money. I see members from all parts of the country. Go to your ridings and tell the people that there is no problem, that the Minister of Finance is not concerned about the lack of money.
There are hon. members from Quebec here. Quebec says: We do not have enough money
Bank of Canada Act
to develop adequately our education system. And Quebec is asking for more fiscal revenue. Quebec says to Ottawa: Give us back our fiscal revenue. Then the Minister of Finance says: We cannot do that.
But when the time comes to study the Bank of Canada Act, he says:
I am not concerned about a deficiency of money.
That, Mr. Chairman, should be sent in writing to all provincial ministers of finance who should all come to Ottawa next week to tell him: You are not concerned about a deficiency of money, therefore give us back the fiscal resources, give us back the taxes. If you do not need any money, we do. And the provincial governments tell the Minister of Finance that they are concerned about a need for money to build roads, schools, hospitals, to carry out public works and develop natural resources.
You, members of this house, go and ask municipalities whether they are concerned about the lack of money and tell them: There is no problem, because the Minister of Finance said that he was not concerned about a deficiency of money. Perhaps in the future, but at present, there is no lack of money. Go and tell that to your school boards, your municipalities, your constituents. What will they say about the Minister of Finance? And the unemployed, what will they say about him?


Joseph Jacques Jean Chrétien: In all fairness, the hon. member might read the other paragraph of the answer.


Gilles Grégoire: I can read the whole proceedings, if you like. What I quoted was the first answer of the minister. I asked him to repeat it, and he said:
I have not been concerned about a deficiency of money and credit. I may be concerned about that in the future but during my year or so in office, I have not been concerned about that problem.
That is all he said then, that is the end of his answer.


Joseph Jacques Jean Chrétien: But read what he said in reply to the next question.


Gilles Grégoire: I shall now refer to another question. But do not say that I did not quote his whole answer, because I quoted it completely. When the minister had finished, I put a further question to him. Be honest.
And to what do you compare your satisfaction? Is it to actual production of Canada, the actual goods produced in Canada?

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And the Minister of Finance answered:
It is the pressure upon our resources which arises from demands upon them.
Notice that, it is delightful. I am glad that he does not lack for money, because the demand on our monetary resources is heavy.
In other words, I have felt that economy required, for stability, some restraint-
Delightful. If you want to stabilize the economy, you place restraint on it. The population is increasing, our scientists find new techniques of production, so the economy has to be developed. Therefore let us stop trying to stabilize and let us take steps to expand for a while. But, no, the economy must be sta-blized.
You know what a stable man is? When he stands up, push him, you will make him fall. When he sits down, push him, you will make him fall; when he is on his knees, push him, you will make him fall; but when he lies down on the ground, whether you push him or not, he will not fall anymore, he is stable. As for you, you want to stabilize the economy, to curb it by "a few restrictions". And he continues:
-otherwise governments and private industries and consumers were going to demand more than could be physically produced at the time.
Obviously, the money supply should not be increased to the point of exceeding production. But this is not the case in the field of housing, and the Minister of Labour (Mr. Nicholson) knows it, as do also the Minister of Finance and all the members in this house. Lack of money is restraining production. But increase housing credit, and you will see our employed building houses.
Today, to stabilize the economy, we restrict production by withdrawing some of the money in circulation so that the people cannot buy the goods produced. We should do the opposite. We should allow the people to produce as much as they can and then give them the credit they need to buy what they have produced. Is that clear? We must promote economic growth instead of restricting the economy and trying to stabilize it in a country where expansion and progress are in full swing. The government wants to check this progress. Why do they want to stabilize the country? Here we have a young country eager to develop, and the Minister of Finance, who claims to have the authority over the monetary system, wants to stabilize and control it.

The Minister of Finance said:
I know that... in this year of unprecedented prosperity and expansion-
Yes, I am going to say this in any county and to any of our unemployed. Believe me, th's is what the Minister of Finance said: This is a year of unprecedented prosperity and expansion. I ask the Minister of Finance to say this in my county, to the unemployed in my region. He would soon be back here. Go and say to the Quebec farmers that this is a period of unprecedented prosperity and expansion.
I am ready to tour the Saint-Maurice-La-fleche riding with the parliamentary secretary and say to the unemployed, the workers, the farmers and the businessmen there: Gentlemen, the minister has said that unprecedented prosperity and expansion are taking place.


Joseph Jacques Jean Chrétien: In the past three years, the number of unemployed in the county of Saint-Maurice-Lafleche has diminished by 3 per cent.


Gilles Grégoire: How many are there in Quebec, Mr. Chairman? According to the latest report we have received, there were more in January this year than in January last year. The number of unemployed in January this year has increased compared with last year. The welfare organizations which take care of those who cannot be considered as unemployed find that the number of cases helped has increased compared with last year.


Joseph Jacques Jean Chrétien: Give us the difference between 1963 and 1966. Talk about the time the Conservatives were in power.


Gilles Grégoire: We shall talk about it. Unfortunately, I did not bring the statistical report on unemployment, but I can speak twice or even three times on this question. I know there is another member who wishes to speak. In the meantime, I shall go and get the figures and show them to your face. I have them in my office. I cannot bring all my data with me but I shall show them to you to your face, to the face of the parliamentary secretary to the Minister of Finance, that the number of unemployed in January this year, according to the latest report we have received for January-February has increased compared to January-February last year. It has increased, in spite of this being a year of unprecedented prosperity and expansion.


An hon. Member:: And the collective debts have also increased.
March 13, 1967


Gilles Grégoire: Yes and the collective debts have also increased. And let the minister come and refute this. The minister continued:
I know that there are still or have been in this year of unprecedented prosperity and expansion, some unused resources.
Well, there have been some unused resources. All our unemployed manpower, that is an unused resource. That was not used.
But those resources have not been available in the places where they could be used. So that is why I say during the year that I have been in office, I have not been troubled about a deficiency of money and credit.
One of the places where those resources have been unused is surely in the construction industry which is one of the main areas of the economy of a country. The resources have not been used in that area. But it does not matter, in spite of all that, he says that there has been no deficiency of money and that he has not been troubled about that.
There are other fantastic questions in this issue. Unfortunately, in that committee, all the questions we wanted to ask could not be put and we have not been given the scope we wanted.
[DOT] (6:10 p.m.)
I was not a member myself of the committee and when I wanted to carry the matter further, I did put the following question to the Minister of Finance:
-Mr. Sharp, when, you yourself, or the Bank of Canada decides to increase the money supply which is done almost every year how do you proceed to increase that money supply?
You will note, Mr. Chairman, that I asked the Minister of Finance how he proceeds to increase the money supply. But the minister would not answer. He then turned to the chairman of the committee-


The Deputy Chairman:: Order. Order. I regret I have to advise the hon. member that his time is up.


Gilles Grégoire: I shall continue later, Mr. Chairman.


Horace Andrew (Bud) Olson: Mr. Chairman, in considering Bill C-190 after all the time which was spent on it in the standing committee, of which I was not a member, it seems to me the amendments contain very little except for steps to correct a few weaknesses which have become evident, apart from the clause which deals which the authority to be vested in the Minister of Finance and the government to issue a directive to the governor of the Bank
Bank of Canada Act
of Canada in the event that there is a conflict of opinion on what future monetary policy should be.
A recommendation to that effect was contained in the report of the Porter royal commission on banking and finance. At the time that report was made public we in this party commended the people who prepared it because for too long we had heard ministers of finance deny in this house that they and their governments could assume full responsibility for monetary policy. I do not suggest that the present minister made such a statement but it is a fact that in 1961 the then minister, the hon. Donald Fleming, said he could not assume responsibility for monetary policy. He went on to say that he was almost astounded by what he found in the statute books at the time that he had a conflict with the then governor, Mr. James Coyne.
On that occasion I sat in the gallery and listened to him say that the events which took place sent him scurrying to the statutes to find out where such authority finally rested. He said he was astounded and amazed, and I think he was disappointed, when he finally discovered that the governor of the bank was the final authority on monetary policy. But now a government directly responsible to parliament is going to assume full responsibility for the direction that monetary policies take, and we in this party give our full support to that amendment.
Surely the purpose of the Bank of Canada is to adjust monetary policies from time to time to make them appropriate for current economic conditions. This purpose must be achieved in anticipation. In other words, the Bank of Canada, the Minister of Finance and all those who are directing monetary policies must constantly look ahead because those policies must be established in advance of immediate requirements. The effectiveness of a monetary policy does not take place immediately.
Predictions cannot always be accurate. We do not expect that. But for too long the legislation establishing the Bank of Canada and providing it with its authority has been leading Canada into an undesirable situation. This afternoon much argument was advanced by the hon. member for Fraser Valley, the hon. member for Kootenay West and other hon. members that the Bank of Canada ought to be a bank of issue, at least to the federal government during those times when it is desirable to have an expansion in the money supply. Members of the Social Credit party have been advocating this step for 25 to 30

March 13, 1967
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years in this house and there is good reason why we continue to advocate it. The reason is very simple. We believe that the money required for capital expenditure at the federal and other levels of government should be provided at low interest rates and by an institution that is owned and controlled by the people of the country.
The second but equally important reason for our advocating this is that the earnings of the Bank of Canada must be turned back into the consolidated revenue fund. I have before me the 1964 annual report of the governor of the Bank of Canada. At page 45 of that report there appears the Bank of Canada statement of income and expenses. Total income of the bank in 1963 was $127,851,000. There were total operating expenses of $10 million, and after depreciation and other items had been taken into account $116,386,000 was left as net income which was paid to the Receiver General of Canada to be placed in the consolidated revenue fund. In 1964 this amount increased to $128,237,000 and in 1965 the operations of the Bank of Canada produced a net income of $143 million payable to the Receiver General of Canada.
The more bonds the Bank of Canada holds, whether they be government bonds or other kinds, and the more assets it has, the more will be the net income transferable to the consolidated revenue fund. To me this seems relatively simple to understand because when this money comes into the federal treasury it provides funds for all of the expenses of the federal government. It is equally easy to understand that the Bank of Canada is an institution owned by the people of Canada. All its shares are held by the Minister of Finance in the name of the people of Canada.
For hospitals, schools, federal government buildings and all the other capital projects mentioned by the hon. member for Fraser Valley, we contend that the original capital ought to come from the Bank of Canada. Such projects are non-profit or not immediately profit producing. If they were financed by the Bank of Canada we would only have to pay for them once. We would not have to pay their cost over and over again in the high interest charges imposed during debt amortization.
At this stage in our development it cannot be said that this kind of policy is ridiculous and that we who advocate it do not understand the financial and monetary system of the country. I have before me three advertisements, and I could produce more, showing that in fact the Bank of Canada does buy

federal government bonds. Some 15 or 20 years ago we were ridiculed for suggesting that this could and should be done. Now, to a degree, it is being done. For example, one of these advertisements appeared in a daily newspaper of April 1, 1965. The advertisement states:
[DOT] (6:20 p.m.)
Issue of $175,000,000 non-callable government of Canada bonds.
Then there is this paragraph:
Bank of Canada has already agreed to acquire a minimum of $75,000,000 of the new bonds.
There it is, Mr. Chairman. They are doing it. I have another advertisement which appeared in the Ottawa Citizen of June 14, 1965. This one reads:
Issue of $325,000,000 non-callable government of Canada bonds dated July 1, 1965.
Then there is the following paragraph:
Bank of Canada has already agreed to acquire a minimum of $75,000,000 of the new bonds open as to maturity.
I should also like to read from an advertisement referred to by the hon. member for Fraser Valley a few minutes ago. The date of issue of the bonds in this advertisement is December 15, 1966. It reads:
Issue of $500,000,000 (or thereabouts) non-callable government of Canada bonds.
This advertisement appeared in the Ottawa Citizen of November 28, 1966. One paragraph reads as follows:
Bank of Canada has already agreed to acquire a minimum of $35,000,000 of the 51 per cent bonds due January 15, 1968, a minimum of $175,000,000 of the 53 per cent bonds due December 15, 1970, and a minimum of $40,000,000 of the new 53 per cent bonds due September 1, 1992.
There are different maturity dates, but of this issue on December 15, 1966, the Bank of Canada agreed to acquire $250 million of these bonds, or 50 per cent.
If I am correct and I have not seeen all these advertisements-this is the largesrt amount the Bank of Canada has agreed to acquire in advance of an issue. We commend the government for this action. We commend the Bank of Canada for buying up this public debt. No longer is it a question of whether they can or cannot do it. They are doing it. When the Minister of Finance and his parliamentary secretary say that it is foolish for us to advocate that the Bank of Canada should buy these government bonds they are flying in the face of what is actually being done. Therefore we urge the Minister of Finance
March 13, 1967

not only to continue but to accelerate this kind of policy.
We would hope that eventually, over a period of perhaps 25 years-it may take that long for all these issues to mature-all the public debt will be transferred to the Bank of Canada. Once that has happened it will not make much difference to me whether the rate of interest is 1-J per cent, 1 per cent or 2 per cent, which some hon. members have suggested would be the cost of carrying the debt. It might even be 5 per cent. It does not make much difference what the rate is because the money is being paid back to the people again through transfer to the Minister of Finance and the consolidated revenue fund. In my view it is not a very bad situation in so far as the whole country is concerned if we are taking the money out of one pocket and putting it into the other.


An hon. Member:: Within Canada.


Horace Andrew (Bud) Olson: Yes, the hon. member says, within Canada. That is also important. If the Bank of Canada is to provide the capital requirements of the federal government and, through the federal government, of the other levels of government, it is absolutely essential that the Minister of Finance must act in a sound and responsible way in so far as how much expansion should take place at any given time is concerned. No one denies that. So far as I am concerned I am not sure there need be a more rapid expansion of the money supply than there is today.
I believe that this Minister of Finance and his successors will act in this way. I also believe the governor of the Bank of Canada will act in this way. We do not want one-way inflation. We are not asking for an enormous expansion of the money supply that would dilute the value of all the money in existence today but we also know there is a continuing expansion of the money supply in the country, which is the correct action to take. So long as our economy is expanding obviously it will take more money in toto to do the job that this means of exchange is called upon to do within the economy.
Therefore, Mr. Chairman, I commend the minister and his immediate predecessor for the steps they have taken because they certainly are an improvement over what was done many years ago. As a matter of fact, when Hon. Donald Fleming was minister of finance I believe he also took some action along this line, or at least a purchase of some
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bonds of the government of Canada was made when he was minister of finance.
I think there should be a very distinct separation of capital expenditure and what might be termed operating expenditure in so far as the federal treasury is concerned. I believe that the receipts in the treasury every year other than borrowings should be sufficient to meet the expenditures. I believe we should face up to the fact that in any year we must have revenue from taxation and other sources sufficient to meet all the demands which the people of Canada make for which members of this parliament authorize expenditure. There need not be any delay in making expenditures for whatever good reason in excess of what we are willing to tax our people. I suggest that this is the proper attitude to take in respect of what might generally be called operating expenditures. They include such things as payments to civil servants, old age pensions, family allowance payments, and so on.
Then there is a need for some capital expenditure. This could be in the form of new public buildings, wharves and even expenditures in respect of the seaway authority, and I believe this would be a legitimate place for the Bank of Canada to supply funds. In this way we would not be paying interest in perpetuity on these assets which the resources and labour of Canadians have already built.
These are important basic matters. There is no mention in this bill of any intention to accelerate the program of transferring the public debt to the Bank of Canada. I believe there ought to be. I agree wholeheartedly with the hon. members for Fraser Valley, Kootenay West and others who have advocated this. I should like the minister to answer this question. If there is an increase in the money supply-and he knows this is going on all the time-is it any more inflationary to have it provided by the Bank of Canada than by the chartered banks in the country? Is it any more inflationary to have this increase in the money supply provided by the Bank of Canada than by imported capital?


Mitchell William Sharp: Mr. Chairman, may I answer the question? The answer is yes.


Horace Andrew (Bud) Olson: The minister will have to give a detailed explanation of the reason. I realize that unfortunately there has been some need for the importation of capital to meet our international balance of payments from time to time. I am not suggesting that the Bank of

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Canada has any means other than by importations of capital to meet this situation satisfactorily, but I am speaking of the economic and financial system within the country. I should like the minister to elaborate, when he speaks, as to why the $100 million provided by the Bank of Canada to the Minister of Finance to cover various expenditures would be any more inflationary than an authorization for provision of this money by the chartered banks. I cannot understand why that would be any more severe.
[DOT] (6:30 p.m.)
As I said a few minutes ago, we must have a Minister of Finance and a governor of the Bank of Canada who will act in a responsible and sound manner in order that we have a supply of money. There is no question about that.


Mitchell William Sharp: In order to clarify this point, so that I understand what the hon. member is saying, let me ask him whether he is suggesting that the Bank of Canada should have increased its assets by more than $200 million per year, which has been the average increase during the last five years, and that if it had, that would not have been more inflationary?


Horace Andrew (Bud) Olson: I am not suggesting that at all. I fully agree that the Bank of Canada quite properly increased its assets, as the minister said, by about $200 million per year for the last five years.
What I am suggesting to the Minister of Finance, as he well knows, is that there has been a greater increase than $200 million per year in the money supply. He also knows very well that his extra increase in the money supply was provided by the chartered banks as a result of increased deposits. What I am suggesting is that the extra money over and above the $200 million could have come from the Bank of Canada, and this would not have been any more inflationary so far as the total economic and financial system is concerned.
This party has been advocating for 25 or 30 years that the Bank of Canada should acquire as much of the national debt as possible. We appreciate that a great deal has been done in this regard as a result of the $250 million that went out, I presume, on December 15, 1966. From that day forward the interest will be paid to the Bank of Canada and ultimately that interest will find its way into the consolidated revenue of this country. I am sure the minister agrees with that statement. Far

more of this should be done in respect of capital expenditures for public works projects of various kinds at the federal, provincial and municipal levels.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, did I understand the hon. member to say at one point that the Bank of Canada should assume the entire debt of Canada? Perhaps he modified that a little bit later. I am very interested in this suggestion because I have lent a modest amount to the government of Canada. What is the hon. member suggesting should be done with my investment in the federal administration of Canada?


Horace Andrew (Bud) Olson: Mr. Chairman, I thought I made it perfectly clear that it would take a number of years, perhaps 25, to transfer the public debt of Canada to the Bank of Canada. I mention that figure because the suggestion bears some relationship to the bond issues by the government of Canada. In my view these are firm contracts that the Minister of Finance and the government of Canada must honour. For that reason there is no possibility of transferring that indebtedness until those bonds mature and all the terms are met so far as the individuals who own them are concerned.
I am not particularly concerned about the bonds which are fairly well spread throughout the Canadian population, and I refer to Canada savings bonds, because obviously the interest goes out to a great number of people across the country and represents purchasing power.
As I say, I am not particularly concerned about Canada savings bonds, although I realize they represent a fairly large part of the total indebtedness of the Canadian government. What I did suggest was that perhaps even these bonds could be diminished to some extent over a period of time. In case the hon. member for Nanaimo-Cowichan-The Islands is concerned, let me suggest that there is no question at all in my mind as to whether or not Canada savings bonds and other government bonds are firm contracts which must be honoured. Payments must be made and the interest must be paid. We do not advocate that this or any other government should welsh on these contracts.
In closing let me suggest to the minister that he continue to expand the policy that was commenced a few years ago, having in mind that eventually, 10, 15 or 20 years from now, the total indebtedness of the federal
March 13, 1967

government, with the exception of perhaps Canada savings bonds, will be transferred to the Bank of Canada.
There is another useful purpose for these bonds which is somewhat different from the use of ordinary government bonds. There may be certain economic activities in the country which would make it desirable to float a fairly large government savings bond issue. This might be desirable to drain off some purchasing power, or to slow down or take the heat off the economy. Such an issue of bonds may serve that useful purpose for some time in the future.


Edward Richard Schreyer: May I ask the hon. member a question?


Horace Andrew (Bud) Olson: Yes.


Edward Richard Schreyer: I find myself trying to agree with the hon. membr, but I should like to ask him whether he is advocating that the federal government budgeting be divided into current and capital categories, with current requirements being met by a comparable increase in revenue by way of taxation, and capital requirements being met by the Bank of Canada picking up government securities? I cannot really visualize the effectiveness of that, because people with funds to lend would be restricted to buying bonds on the private market. Would this not tend to cause tremendous cost push influence?


Horace Andrew (Bud) Olson: It is apparent that the hon. member has comprehended fairly accurately what I was trying to say. There would naturally be a long transitional period before the Minister of Finance could request the Bank of Canada to look after all capital expenditures. I have no fear of a cost-push influence developing in the private market if all private funds had to be invested there. One of the things which has caused interest rates to go up-and this could have been avoided-relates to the government going back to the private money market time and time again for large issues of money. This could have been avoided because the interest on these private funds would have found some place in the private market for the expansion of the industry and commerce. I cannot conceive of any long period of time in Canada when there would be more private funds available than the private market was willing and ready to use for the benefit of the whole country.
[DOT] (6:40 p.m.)
Surely it would be advantageous, even today, for those people who are trying to
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borrow money in the private money market, if there was no competition from the federal government in that market.
So, again, the answer to the hon. member's question is that he understood what I am trying to say. Obviously it could not be done suddenly, but over a long period of time I think it would be beneficial. In closing, Mr. Chairman, I wish to refer to one other matter about which I am concerned. This has been mentioned before. The estimates that have been placed before this house today, for the fiscal year ending March 31, 1968-


Herman Maxwell Batten: Order. I must advise the hon. member for Medicine Hat that the time allotted to him has expired.


Some hon. Members:: Carry on.


Horace Andrew (Bud) Olson: Mr. Chairman, I will not take up any more of the time of the committee because it would take probably five or ten minutes to deal with this matter. I will take advantage of another opportunity to put forward this point.


Gilles Grégoire: Mr. Chairman, when I spoke a while ago I only had time to explain one point which I would now like to summarize: at the present time, our Minister of Finance sees in our monetary system a matter of flair, a matter of judgment, and not a scientific matter, a scientific problem, something scientific.
He may say: That depends on flair, on feelings but he is not quite sure; perhaps to a certain extent it can be a matter of judgment. At any rate, that is not sure, for I believe that, up to a point, it is a matter of judgment, but assuredly not one for flair and feelings.
We say, Mr. Chairman, that our monetary system must be organized scientifically, realistically, to match mathematically the possibilities and wealth of the country with the possibilities of the people for availing themselves of the wealth and production of Canada.
Among others, Mr. Chairman, I asked the following question of the Minister of Finance. It can be found on page 3000 of No. 43 of the report, in the penultimate paragraph, and I quote:
How can you be satisfied with the amount of money in circulation when they do not have enough money to buy what they have worked for and they still have to borrow when they are producing?

March 13, 1967
Bank of Canada Act
In other words, I was asking the minister why it is that, with all kinds of goods already produced, the people should still have to borrow to purchase them?
This is the reply I received from the minister:
Mr. Chairman, the whole of our society is built on the foundation of credit. I am not at all happy that there is as much consumer credit in existence as there is, but every transaction in production nowadays involves some credit. Our system would not work very well if this were not so and I am, therefore, not concerned that there is a great volume of credit being used. This is, I think, normal. It is healthy and, indeed, unless there continues to be a rising volume of bank credit, then we would have good reason to be concerned about the future of Canada.
Mr. Chairman, this answer involves many things. The minister finds that healthy; he refers to the increase of the credit load of banks. He says it is logical that our society should be based on such a system, which he finds normal, and he wants this bank credit to continue to increase.
Now, Mr. Chairman, I should like to draw a parallel with another answer by the Minister of Finance, this time to the hon. member for Compton-Frontenac (Mr. Latulippe), as reported at page 3012 of the same report:
The process of credit creation is a familiar one.
You will note, Mr. Chairman, that in his first answer the Minister of Finance thought that this credit increase was normal and healthy.
In his reply to the hon. member for Compton-Frontenac, the minister explained how credit was created and he told us:
The process of credit creation is a familiar one. The banks make loans. The proceeds are left on deposit with the banks. They become part of the money supply. That is one way in which they are created. It is a familiar method.
The process of credit creation, I repeat it, because it is very important. It is the minister's answer as found on page 3012 of Minutes of Proceedings No. 43 and I repeat it:
The process of credit creation is a familiar one. The banks make loans.
The method used to create credit is simple: the banks make loans and when they do they create credit.
And I continue:
The proceeds are left on deposit with the banks. They become part of the money supply. That is one way in which they are created.
Thus credit is created. The chartered banks create credit. To create means to make something out of nothing.

That explanation has never changed; otherwise it is manufacturing. But to create is to make something out of nothing. The Minister of Finance admits that the chartered banks can create credit, as shown in the text on page 3012 in an answer which cannot be clearer:
The process of credit creation is a familiar one. The banks make loans.
It is as clear as daylight, Mr. Chairman.


Mitchell William Sharp: Mr. Chairman, may I draw attention to both the English and French versions of the proceedings. I know my hon. friend wants to be fair to me, as I was so fair to him in these comments that I made In French I said:
That is one way in which it is created.

In English I said:
That is one way in which they are created.


Gilles Grégoire: Would the minister repeat that, please?


Mitchell William Sharp: "That is one way in which they are created."


Gilles Grégoire: I think that the meaning is almost the same. This is one way to create it.

"This is one way to create it."


Mitchell William Sharp: My hon. friend implied that
I said that was the only way.
[DOT] (6:50 p.m.)


Gilles Grégoire: Mr. Chairman, if I return to the minister's statement and read it again, this is what I find:
The process of credit creation is a familiar one.
The process of credit creation is a familiar one.
The banks make loans.
That is how credit is created. Therefore, the banks create credit.
The minister answered elsewhere:
Our system would not work very well if this were not so and I am, therefore, not concerned that there is a great volume of credit being used.
The banks create credit. They are the ones to benefit from the credit created, and the minister tells us that "our system would not work very well if this were not so", if there were not a great volume of credit.
March 13, 1967

I deplore the fact that there is so much credit, because when one has to borrow from the bank creating the credit to purchase goods, it then makes all the difference in the world, as far as the people and the federal government are concerned. As a matter of fact, when you have to borrow from the very banks that create credit, you pay a high rate of interest, and as banks are creating the credit, the system is working to their advantage, for the more money they lend the more money they make.
Consequently, if the minister, who has the authority to do so, were to organize a system whereby the Bank of Canada would create credit, neither by instinct nor on the flair of the minister, but in a scientific way, based on possibilities and on Canada's production, on the work done by Canadian citizens, then the individual would not have to go to finance companies or banks, which create credit, to purchase everything he has already produced. The Bank of Canada would then create credit and it would be beneficial to the whole country, to all Canadians. But as the minister is against the Bank of Canada creating credit, I say there must either be a complete lack of knowledge of what is going on in our monetary system or there is some amalgamation or participation with the chartered banks to exploit the people.
As reported on page 3030 of the Minutes of Proceedings and Evidence No. 44, dated Tuesday, February 7, I directed the following question to the minister:
If the Bank of Canada was creating that money instead of the chartered banks, would not the government of Canada then, and all other public governments, be entitled to borrow directly from the Bank of Canada-
Please note, Mr. Chairman, that I said "the government of Canada and all other public governments". I am not including individuals or private enterprises. I said:
-the government of Canada then, and all other public governments, be entitled to borrow directly from the Bank of Canada on a debt free system instead of going to the chartered banks to borrow the money the chartered banks are creating?
Yet, the Minister of Finance had stated the
day before:
In my opinion, Mr. Gregoire, that would not be good public policy. I would consider it a very inferior type of system and one that would not serve the public as well as the present system of banking.
But, Mr. Chairman, who does the present system serve? It serves the big bankers, the
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big capitalists. The Minister said so as evidenced by an answer he gave to a question put by the hon. member for Compton-Fron-tenac, which I quoted earlier:
The system used to create credit is well known. Banks grant loans.
That is the way credit is created. Whenever the federal government needs money, it goes and borrows from the chartered banks, the banks lend it money, thus creating credit and money.
We ask the minister. Why could the Bank of Canada not lend the funds instead of the chartered banks, no more no less, but the same amount? Why could it not be the Bank of Canada which would create credit instead of the chartered banks? That is what the chartered banks are doing at the present time.
The Minister of Finance answers:
In my opinion, Mr. Gregoire, it would not be a good policy.
Indeed, a good policy is one which makes the banks rich; to try and prevent the people from Quebec from paying as much in taxes, to make them pay only interest, no, that is not a good policy.
The good policy is: enrich the banks.
Why? I would like to know why the government-I mean any of our governments since 1934-has been so anxious to enrich the chartered banks by leaving with them the exclusive privilege of creating money?
At one time, I have asked the Minister of Finance the following question, which appears at page 3030:
Can the trust companies and the savings banks do the same kind of operations?
In other words, can they create money too? To that, the minister answered:
I doubt it very much.
He doubts it very much, but he knows very well that it is not so.
Chartered banks are the only institutions in Canada that have the exclusive power and the privilege to create credit in debt form.
And the minister agrees with that. The system used to create credit is very well known, the banks make loans; that is the system for credit creation.
The Minister of Finance agrees that savings banks cannot do it. Credit unions cannot do it; the Bank of Canada is unable to do it; not even himself or the government can do it. Only the chartered banks have the right to create credit.

March 13, 1967
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And when I ask the hon. minister: Why would the Bank of Canada not do this? When they would have created the credit, they would lend it, say, to the federal government to build post offices; to the provinces to build hospitals, colleges, without interest. Oh no-that is not good-nothing doing.
I ask the minister, what is binding the government to the chartered banks? That would be a good question. What is binding your government to the chartered banks? Can you give a real answer? Why do you grant the chartered banks the most potent privilege in the world, the one to create credit, while you would not want the Bank of Canada to exercise the same right, the same privilege that could be used to erect buildings that will be useful to the whole population, to build hospitals, schools, bridges, roads, public works.
Mr. Chairman, it is seven o'clock. I am giving the minister the dinner hour to answer this question. I shall ask it again, Mr. Minister. I see you are busy with your deputy minister, I do not know with whom. But before we adjourn, Mr. Minister, I am giving you until eight o'clock. I hope that you will reply to this question: Why is your government not ready to give the Bank of Canada that privilege which you give the chartered banks so that the Bank of Canada may lend without interest to the institutions that will be doing so much good to the people of Quebec, our hospitals, our colleges, our universities?
Mr. Minister, you have one hour to prepare an answer for us. Why could the Bank of Canada not have the same privilege which the chartered banks have now? Until eight o'clock, Mr. Chairman.


Herman Maxwell Batten: It is my duty pursuant to standing order 39A, to inform the house that the questions to be raised at ten o'clock this day are as follows: the hon. member for Villeneuve (Mr. Caouette), public buildings- demolition of former printing bureau; the hon. member for Vancouver-Kingsway (Mrs. Mac-Innis), old age assistance-British Columbia -denial to old age pensioners of provincial supplement.
The committee will resume its sitting at eight o'clock.



SITTING SUSPENDED

[Stage Direction]
[DOT] (8:00 p.m.)

[Stage Direction]
The committee resumed at 8 p.m.
Gilles Grégoire: Mr. Chairman, when the house adjourned at seven o'clock I had directed a question to the Minister of Finance (Mr. Sharp), and I had asked him to reply after supper. I see him coming in, Mr. Chairman. Then, I should like to ask him the question once again and give him an opportunity to answer it. This is the question and it arises from replies given by the Minister of Finance before the finance, trade and economic affairs committee.
On page 3012 of Minutes of Proceedings and Evidence No. 43, the Minister of Finance replied this way to a question of mine:
The process of credit creation is a familiar one. The banks make loans.
This is the minister's first answer.
When I asked him if he was satisfied with the volume of money supply in Canada, he answered:
Our system would not work very well if this were not so, and I am, therefore, not concerned that there is a great volume of credit being used.
Therefore, the minister is satisfied that the people have to borrow a great deal. And he added:
This is, I think, normal. It is healthy and, indeed, unless there continues to be a rising volume of bank credit, then we would have good reasons to be concerned about the future of Canada.
But when credit increases, it is because the banks have created money, and the minister admitted it in his first answer which I quoted a moment ago:
The system used for creating credit is well known. The banks make loans.
In what proportion do the banks make loans? The answer is on page 3029 of Minutes of Proceedings and Evidence No. 44, where the minister says:


Mitchell William Sharp: When the Bank of Canada puts cash into the hands of the banks, they are under great pressure to find some means of increasing their liabilities, so I hope that when the bank is increasing the money supply, the banks respond by making more loans and otherwise increasing the volume of money and demand in the economy. This is the purpose. Similarly, when the Bank of Canada contracts the money supply, the banks then have to withdraw in order to retain a legal ratio between their cash and their liabilities.


Gilles Grégoire: In a proportion of 12 to 1?


Mitchell William Sharp: Yes. The banks have their own ideas of what is the proper proportion; the law specifies the minimum.
March 13, 1967


Gilles Grégoire: Then the law specifies the proportion of 12 to 1?


Mitchell William Sharp: A minimum proportion.
So, the minister concedes, in answer to the first question, that in making loans banks are creating credit. The answer to the second question is that whenever banks create credit, they need but one dollar in order to create $12.50. The answer to the third question, which can be found on page 3000 of No. 43 of the Minutes of Proceedings and Evidence, is that the minister is happy to see that there is not much money in circulation and that the people have to borrow from the chartered banks and finance companies; banks are then creating a credit of $12.50 whereas they have but one dollar, even with nothing, and are earning big interests and large profits by lending money that does not exist.
On the basis of those three answers from the hon. minister, I should like to ask him: What is binding this government, as previous governments were also bound, to chartered banks in such a way as to grant them the exclusive privilege of getting rich at the expense of the Canadian people?
Why does not the Minister of Finance want to change such a system, as he said so clearly in answer to a question I put to him, when he stated that it was the best system in his opinion and that there was no need for another one?
Well, what is the minister waiting for in order to amend this legislation and entrust the Bank of Canada with the privilege of creating credit instead of leaving it into the hands of the chartered banks? Why is the minister so keen about leaving such a privilege into the hands of the chartered banks? What links does the Minister of Finance have with the chartered banks? What ties has the government with those chartered banks? How can the chartered banks have a stranglehold on the government and hinder the Minister of Finance from passing legislation of benefit to the Canadian people rather than to the chartered banks?
This is the question I was asking before the adjournment of the house at seven o'clock tonight, and I would like the Minister of Finance to give me an accurate reply, because my question is based on three statements which are reproduced in the proceedings and evidence of the committee, and were made in reply to my query. I would therefore ask the minister to answer this very definite question.


Joseph Jacques Jean Chrétien: Mr. Chairman, would the hon. member for Lapointe (Mr. Gregoire)
Bank of Canada Act
allow me a question before he gets a reply to his?


Gilles Grégoire: Certainly.


Joseph Jacques Jean Chrétien: Would the hon. member explain to the house why it is that for instance, while the Minister of Finance has repeatedly claimed that he would like to see more competition in the field of banking, many banks setting up business in Canada, why it is that credit unions, whose business is akin to banking, should not have been interested in obtaining charters, as their request would obviously have been looked upon with favour by the present government?


Gilles Grégoire: Mr. Chairman, I do not believe that question relates to mine in any way. Only this afternoon I quoted a question of mine and the reply the minister gave me, both of which can be found on page 3030 of No. 44 of the report. I quote:


Gilles Grégoire: Can the trust companies and the savings banks do the same kind of operations?


Mitchell William Sharp: I doubt it very much.
The minister doubts it very much. Well, we do not doubt it. The minister knows full well that the credit unions cannot create credit by loaning money. Credit unions loan what they have while chartered banks can create credit.


Joseph Jacques Jean Chrétien: Why do they refuse to become banks? We have suggested to them that they become banks but they are not interested. If it is so advantageous, why do they not become chartered banks?


Gilles Grégoire: Mr. Chairman, I have not discussed the matter with the interested parties, that is credit union officials, but I have always heard that credit unions are cooperative undertakings and not business or commercial banks. They are co-operative companies whose purpose is to channel the savings of their depositors toward specific goals. The credit unions operate with Quebec charters and not federal charters, and therein lies the difference. Were they to ask for federal charters, they would have to stop being co-operative companies governed by co-operative rules, in order to submit to the rules provided for the chartered banks, and that is not at all why they were founded. There are all kinds of banking institutions. Credit unions were not founded to deal in commercial or banking operations but rather to become co-operative companies. Moreover,

March 13, 1967
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each credit union is autonomous while the large chartered banks all have ties with a central office.
[DOT] (8:10 p.m.)
As for the question of the parliamentary secretary to the Minister of Finance, I shall be glad to inquire from the officials of the "caisses populaires" and to let him know the answer before consideration of the bill concerning the Bank of Canada. But 1 believe that the question of the parliamentary secretary is intended only to get attention away from this, while my own question was very precise.
Even if the "caisses populaires" held a federal charter, the question would be the same and I ask again the Minister of Finance: Why leave to private institutions the responsibility of creating credit and of getting interest from it, when the Bank of Canada could create the same credit and lend it with no interest, for public development, meaning the development of such public services as roads, bridges, schools, universities, colleges, post offices, etc? That is what we want. We want the Bank of Canada to create the yearly increases in credit now created by chartered banks. We do not want this to be left in the hands of private institutions for we do not believe it is the responsibility of private institutions-whether they are called "caisses populaires" or otherwise-to make Canada's credit bear fruit, for that credit is generated by the work and the production of the Canadian people as a whole and not by the work of a banking institution.
That is why I ask the Minister of Finance to tell us why the government does not legislate to permit the Bank of Canada to create credit in behalf of the people, Canadian people, instead of leaving that privilege in the hands of private institutions, which use it in their own private interests.
I do hope that the Minister of Finance will answer this question.


Mitchell William Sharp: Mr. Chairman, both during the committee and recently I have been doing my best to explain to the hon. member for Lapointe how the present monetary system works. As I said during the committee, Mr. Chairman, though of course I benefited greatly from my discussions with the hon. member, I have apparently not progressed very far with his education.
May I try to answer as simply as I can the question put by the hon. member. There is no

particular magic in the sytem of financial institutions that we have in this country. They exist throughout the world and they operate on very much the same principles everywhere. If I may say again to my hon. friend, they exist notwithstanding the blandishments of Social Credit theory. Indeed, nowhere in the world do I know of any country that has succumbed to the allurements put before us by my hon. friend.


Thomas Miller Bell: Russia.


Mitchell William Sharp: No, not even in the Soviet union has the Social Credit system been accepted, and neither has it in any free country that I know of.
I made a number of statements in the committee which when I look at them, I only regret because they have given my hon. friend an opportunity to make another speech; but on the whole I still defend them as being reasonable. Although it is true that one way in which credit is created in the banking system is the one I have described, it is still nevertheless the fact that banks, like any institution, must borrow in order to lend. A bank borrows in various ways. It borrows to provide resources to people like the members of this parliament who from time to time I am sure go to a bank to borrow money. In order to provide those resources the banks have to pay interest on the deposits, or on a large part of them. Even where they do not pay interest a certain cost is involved in providing the resources to the borrower.
Let me say this to my hon. friend the hon. member for Lapointe. When a bank lends money the borrower may obtain a loan which he deposits 'in the bank, but this is only the first step. In order to retain that deposit the bank must persuade the depositor to maintain his deposit with the bank. After all, if my hon. friend from Lapointe goes to a bank and borrows money he does not leave it on deposit, but uses it. People who have money might like to deposit it in a bank, but they will do so only providing the bank gives them some return on it. So that these are not costless deposits.
If the hon. member were to look at the financial return of any chartered bank he would see on one side the assets and on the other side the liabilities. Then there will be a balancing item to cover the capital and the surplus. It would certainly be a new system-and perhaps this is what the hon. member is thinking about-if the banks were able to handle this process on a costless basis, as the hon. members seems to suggest they can.
March 13, 1967

The present financial system is nothing very unusual, and there is no particular magic about it. I suggest-


Gilles Grégoire: Mr. Chairman, I do not think the minister would like to impute to me words I never said. I never said that banks should not charge interest in return for money lent. If banks lend money to individuals, they charge an interest rate. But if they create new money this is where I do not think interest is logical or realistic. I suggested that new money created by the Bank of Canada should not carry interest. Money in the accounts of credit unions, savings banks or the chartered banks should demand interest, but any new money representing an increase in the money supply in any one year should not carry interest and should be created by the Bank of Canada. I should not like the Minister of Finance to put into my mouth words that I did not say.


Mitchell William Sharp: I am quite happy to accept the words the hon. gentleman has just uttered, Mr. Chairman. All I said was that the deposits which appear on one side of a balance sheet as liabilities of a chartered bank cost the bank something either in the form of interest on the deposits or servicing of the deposits. There is no costless system under which a bank can operate; otherwise they would be much more profitable institutions than they are. I suggest that the hon. member is really misleading the committee when he suggests that there is some magic way in which the banks create something out of nothing. That is simply not so.
[DOT] (8:20 p.m.)


David Réal Caouette: Mr. Chairman, the Minister of Finance (Mr. Sharp) has not been very precise nor very convincing in his reply to the question put by the hon. member for Lapointe (Mr. Gregoire). He said that he found it quite difficult to educate the hon. member for Lapointe but the Minister of Finance did not attempt to educate those who advocate social credit in Canada, because it is precisely by studying in detail the system endorsed by the Minister of Finance and by those who came before him that we came to the conclusion that social credit offers a solution to the problem the Minister of Finance is unable to solve at the present time.
The minister says that social credit exists nowhere. This does not mean that social credit is wrong, and it does not disprove the fact that the financial system in which the minister flounders still remains a monkey
Bank of Canada Act
system, an unrealistic system, a system which is not based on facts, a system which penalizes the Canadian worker, the Canadian people.
The Minister of Finance gives his fatherly and favourable blessing to a system which I would call "cannibalistic".
Mr. Chairman, it is easy for the minister to say that everyone is familiar with the process, but I think that he is not so sure himself that he knows it in depth, and he proves it when he says that anyone who wants to lend money must first borrow it.
Has the minister ever seen a chartered bank borrow money? Has he ever seen a chartered bank lend its savings deposits? Has he forgotten what Mr. Graham Towers, former president of the Bank of Canada, said in 1939: "The chartered bank does not have the right to lend its deposits."
Now one must really know why the Bank of Canada was created in 1934 and to what purpose. The Minister of Finance probably never read this but here is what it says at page 1054 of the 1966 Canada Year Book:
The Bank of Canada is Canada's central bank. It was incorporated under the Bank of Canada Act in 1934 and commenced operations on March 11, 1935.
A Conservative government was in office then. It is under a Conservative administration that the Bank of Canada was created.
This was in 1935, 32, or 33 years ago.
The Act of Parliament which established the central bank charged it with the responsibility for regulating "credit and currency in the best interests of the economic life of the nation", and conferred on it certain specific powers for discharging this responsibility.
Through the exercise of these powers, the Bank of Canada determines broadly the combined total of the basic forms of Canadian money held by the community-currency outside banks plus deposit balances in chartered bank accounts.
By virtue of the provisions of the Bank of Canada Act, which enable the central bank to increase or decrease the total amount of cash reserves available to the chartered banks as a group-
Available to the people, to chartered banks.
-the Bank of Canada is able to determine broadly the over-all level of the total assets and deposit liabilities of the group, and hence of the combined total of currency and bank deposits.
Mr. Chairman, here on page 1055 of the Canada Year Book, we find the following concerning the Bank of Canada:
The chief method by which the Bank of Canada can affect the level of cash reserves of the chartered banks and through them the total of chartered bank deposits, is by purchases and sales of government securities.

March 13, 1967
Bank of Canada Act
My deposits, not those of the Minister of Finance, not the money or deposits of the Canadian people.
-Is by purchases and sales of government securities. Payment by the central bank for the securities it purchases in the market adds to the cash reserves of the chartered banks as a group-
Which means that if the central government, if the Minister of Finance issues a million-dollar bond, it adds to that immediately.
If the Bank of Canada buys these bonds, this increases the reserves of all the Canadian chartered banks. So they are allowed to created $12,500,000 for each million in bonds. Where do those $12 million come from? From whom do the chartered banks borrow these $12 million? From nobody at all, but they are allowed to put into circulation $12 million and a half of new credits and this does not affect the deposits of the customers, but that is authorized by the government issuing one million in bonds. That is the way it is.
Mr. Chairman, when paying for the securities which it buys on the market, the Bank of Canada adds to the reserve of all the chartered banks and allows them to increase their assets and their deposit liabilities.
On the other hand, when paying to the bank the securities which they sell, the chartered banks reduce their reserves and must reduce also their assets and their deposit liabilities.
Such is the economic cycle which is announced to us seriously from time to time. When the Bank of Canada buys government bonds or securities, thereby allowing chartered banks to expand credit in Canada, the standard of living is improved and a new stimulus is applied to the Canadian economy. When the Bank of Canada decides to sell securities to the government, credit then becomes tighter. That is the explanation of those economic and financial cycles.
And, Mr. Chairman, what do we say to the Minister of Finance? Series of bankruptcies stem directly from that system. We suggest that the Minister of Finance amend the Bank of Canada Act, and we would be ready to pass such a piece of legislation. Parliament is fully empowered to pass the required amendments so as to put the Bank of Canada at the service of the country, rather than at the service of the chartered banks, and to prevent the Bank of Canada from being hog-tied to the Canadian banking

system. Even though the minister says that this system is the most appropriate for us, he knows that this system is not in keeping with the present needs of Canada. All departments are short of credit and money, be it the Departments of Labour, National Defence, National Health and Welfare, they all claim: we need money.


Gilles Grégoire: May I put a question to the hon. member?


David Réal Caouette: Yes.


Gilles Grégoire: Is the hon. member aware that the hon. Minister of Finance said before a committee on February 6, last:
I was not concerned about a shortage of money or credit; perhaps I will be in the future, but until now it never worried me.
Has the hon. member heard of this statement made by the hon. Minister of Finance?


David Réal Caouette: municipal and school, to pay twice to produce something, to build something, to achieve something and leave the control in the hands of a few individuals?
Mr. Chairman, we are not asking the minister to nationalize the banking system, no. We ask that full and complete use of the services of the Bank of Canada be resorted to, through mobilization and through usage, so that it may enable our school boards for instance, to get out of the financial mess in which they are now, for the provinces to secure credit, instead of forcing them to go on bended knees to New York or to Belgium to obtain funds to develop their provinces and to ask Washington for permission to build a road in the province of Quebec or in the province of Ontario to build power dams in our province, to go and get funds in Belgium or France and to compel the province of Quebec or any other Canadian province to do likewise, while we have the required technicians, engineers and all that in Canada.
We are unable to have a monetary system make it possible for us to finance the public sector which concerns all the people and ourselves. The Minister of Finance does not say a word about that, he is as good at mathematics this year as he was last year or three years ago. There are only two ways for him to find money-loans or taxes. Before taxing he must borrow-and the minister, of course, agrees with that. And when enough taxes have been levied and there is till a lack of funds, one has to resort to loans, one takes on new debts and taxes are collected under a new form as it was recently done for old age security. Taxes are doubled from $120 or $122 to $240. That is the Minister of Finance's system. And when we tell him that we are living in a financial world which can be dubbed a world of lunatics and that we are administered by the most prominent among them, we are called demagogues. This is what we are told when we say to the minister that he should assume his responsibilities and not amend the monetary system as he is now doing.
We have had typically Liberal or Conservative monetary reforms. Sure. We once had very small five-cent coins. A monetary reform was undertaken and nickel five-cent coins were issued. That was a monetary reform. At one time, we had small twenty-five-cent bills. They were replaced by twenty-five-cent pieces. Another monetary reform.
Bank of Canada Act
However, this did not increase the amount of money in circulation. Nothing was changed. And the situation remains the same.
A former Liberal Canadian prime minister, William Lyon Mackenzie King, said in August 1935, before the general elections and after the Bank of Canada Act was passed and implemented in that year, that as long as the government and parliament did not regain control of the amount of money put into circulation and the credit issued in Canada, it was futile and useless to believe in a sound democracy. It was a waste of time. Those were the words of Mr. King, former spiritual father of the present Minister of Finance. The Minister of Finance has completely forgotten this fact, but we remember it, Mr. Chairman.


Jean-Thomas Richard: The
hon. member for Mount Royal.


Mr. Trudeau:: Would the hon. member allow me to ask him a question?


David Réal Caouette: Certainly.


Pierre Elliott Trudeau: Does he not think that the people would not make an effort to buy government bonds with their savings if the government did not pay interest?


David Réal Caouette: This has nothing to do with the question. Let the government have recourse to issues of bonds bought by the Bank of Canada. Why should the Bank of Canada not be the one allowed to multiply this sum by 12.5?


Pierre Elliott Trudeau: The people are the ones who pay. Would they do so if they knew they would get no interest?


David Réal Caouette: Instead of paying the government or financing the government, the people would finance the establishment of new industries, for example in the province of Quebec, which is said to be underdeveloped, and perhaps also in other provinces. Instead of letting the central government benefit by these savings, let us use them to encourage the people to invest their savings in the establishment of new industries and the development of natural resources in the province. That would be logical and we would agree to such a thing.


Pierre Elliott Trudeau: I believe that the hon. member has not quite understood. Would the public lend money, in the public sector or elsewhere, if no interest were paid?

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David Réal Caouette: No, indeed not. I agree with the hon. member on that point. If the hon. member lends me $10 and I pay him back $10.50, that is quite normal. But if chartered banks are authorized, under the act, to create $12 million for every million of bonds issued by the government and to charge interest, in that case, we are against that interest and the currency created.
When one lends something to someone who does not have it, and the latter refunds one with interest, it is quite normal. We are not against interest on that which exists, no, but we are against interest on created credit; and interest is precisely the nightmare of the government.
This year, Mr. Chairman, we shall pay over $1,215 million in interest on the government debt only, which has never been anything but a simple national debt. The interest on the national debt will amount to $1,215 million this year. Why has the federal government not used that money? The situation is very clear. The proof is that the national debt amounts to $26 billion and the total money in circulation in the country does not even reach $20 billion at the present time.
This year the amount of $1,274 million will be appropriated for the federal government debt charges only, apart from the debts of the provinces, municipalities and school boards. Now the amount of $1,274 million represents in interest alone, more than one ninth of the total national budget. The budget will reach what amount? About $9 billion?


Pierre Elliott Trudeau: But to whom is this interest paid? I would very much like to know.


David Réal Caouette: To those who have created Canada's debt, that is to the chartered banks. For the information of the hon. member for Mount Royal (Mr. Trudeau), I shall say this: each time a Canadian boy, a Canadian worker buys Government bonds, 85 per cent of such bonds go into the hands of the Canadian chartered banks as collateral for loans granted by the same banks. Where is the control of the Canadian debt? Into the hands of the chartered banks of Canada and not into those of the Bank of Canada. We owe nothing to the Bank of Canada, and yet, it is our own institution, however, we are of course indebted to the Canadian and American banking systems.
Mr. Chairman, all this is to say that we are in possession of all the required means-and

I am calling on the Liberals as well as on the Conservatives-
[DOT] (8:40 p.m.)


Mitchell William Sharp: Mr. Chairman, might I ask the hon. gentleman a question. I am sure he wishes to be factually correct.


David Réal Caouette: Yes.


Mitchell William Sharp: I wonder whether he had referred to the figures before he gave his estimate of 85 per cent of the public debt being in the hands of the chartered banks, because I have here the latest summary for February 1967 of the Bank of Canada. I am referring to pages 107 and 108, and it shows that out of the total of $21,290 million outstanding, $4,116 million is in the hands of the chartered banks.


David Réal Caouette: Precisely. That is what the the hon. minister knows indirectly. That is the amount controlled by the chartered banks which granted loans to the minister directly.
However, I myself have seen businessmen from Montreal deposit $1,700,000 of the central government bonds in the Canadian National Bank in Montreal as a collateral to secure a bank credit. Does this mean that the bonds belong to the borrower or the chartered bank? And the minister knows this.


Mitchell William Sharp: The borrower.


David Réal Caouette: That is right. That part is controlled by chartered banks, and is not included in the $4 billion just mentioned by the minister. That is a different matter.
I mean to say that all those people who bought up to 85 per cent of bonds were forced to deposit them as a guarantee in chartered banks-


Joseph Jacques Jean Chrétien: Mr. Chairman, for the benefit of the hon. member for Villeneuve (Mr. Caouette) those bonds are not listed under the liabilities of the bank but are kept in reserve simply as collateral; they do not appear under the liabilities of the bank or on its balance sheet.


Pierre Elliott Trudeau: What about the bank's
balance sheet?


David Réal Caouette: It does not figure in there.


Joseph Jacques Jean Chrétien: Instead of keeping their bonds in a drawer at home, they hand them over to the banker.
March 13, 1967


David Réal Caouette: More than that, at one time, those people were told: "Listen, we will buy, because we will not lend you any more on bonds you have deposited here as collateral -that was when tight money was introduced three years ago-however, we are prepared, for instance, to purchase your bonds, but instead of paying $1,700,000-we will pay $1,100,000. At that time, Canada bonds were not selling at par, but at a lower price than paid by those who had purchased government bends. The banks which were controlling then control now. And when I say that Canadians generally had to hand over their government bonds to chartered banks as collateral, this is a fact; the bonds are there and the banks can at any time tell the borrower: "We are keeping your bonds because your credit is no longer acceptable to us".
People can have their credit cut off overnight or within ten minutes. That is how the present banking system works.
At the banking committee, I heard bankers, bank vice presidents and general managers say that they had but one purpose: to help the Canadian nation, those in the lower income bracket, and that if they were allowed to raise the rate of interest they would be in a better position to help those with low income, I say that is not the way to help them, to serve the common interest of the Canadian people or of Canada.
Hours on end are spent discussing trifling matters, but the financial system seems of no concern and is of course not considered worth studying so that it could be amended and brought up to date. That is a fact, but should a member bring up the matter of a scandal in this house-Rivard's escape, the Gerda Munsinger affair, and similar things- and the reporters section up there will be filled to capacity, because it would be considered an important matter; but when the economic blood of a nation, the control of a nation is in the hands of money and credit handlers, that is not important, it is normal to carry on with the present system and follow the same beaten tracks.
Mr. Chairman, large newspapers are controlled by that financial group. They cannot even say what they think, but only what is dictated to them by the financiers, and that is why the press is not only poisoning the public at large and the ordinary working man, but also university students. The financiers have but one objective and that is to make money and try to control and crush
Bank of Canada Act
anyone who does not conform to the present financial system.
Mr. Chairman, the Creditistes are right in calling for amendments. The amendments passed this year will last ten years, for the renewal of the banks' charter will be for a ten-year period. Are we going to give ten more years of power to those who control money and credit? Are we going to entrust them again with that weapon which is represented by finance, that weapon which was condemned not only here in Canada but even in the United States, by former American presidents I have already quoted in this house, who said: "Our enemies are not the armies, no, but the financiers".
Here in Canada who are our real enemies? The Americans? No. The fact that the English do not speak French and the French do not speak English? No. Our enemies in Canada, and those who are sowing discord and taking advantage of divisions and misunderstandings, are precisely the financiers, who are not people of a particular language. Their monetary system has no religion either, the dollars are even colorless and especially heartless.


An hon. Member:: You should try and convince the hon. member for Lapointe (Mr. Gregoire).


David Réal Caouette: We must leave to the hon. member for Lapointe (Mr. Gregoire) the responsibility of his actions. He is the one that answers for his actions. We are democrats, in that sense at least.


Gilles Grégoire: I can answer for my actions, while it is impossible for the parliamentary secretary of the Minister of Finance to answer for his.


David Réal Caouette: Let us simply demand, and we need not demand, we have only to adopt laws, to tell the bankers: "You can do this, but you cannot do that." There is nothing easier than to tell the Bank of Canada: "You are going to finance the public sector." Then, any new credit will be created by the Bank of Canada to serve the public sector.
[DOT] (8:50 p.m.)
The chartered banks will not have the right to multiply that credit 12.5 times. On the other hand, in the private sector, they should keep the rights they now have by depositing with the Bank of Canada so that we can have some control on our monetary system. There is no need to nationalize anything for that. It is enough to use our best judgment to put that finance at the service

March 13. 1967
Bank of Canada Act
of the Canadian citizens and not of parliament.
But parliament has to pass the act. And Mr. Graham Towers said that parliament has full power to adopt amendments, to amend the Bank Act to make the Bank of Canada more flexible, not to put it at the service of the chartered banks but at the service of the Canadian citizens-in order to regulate credit and currency in the best interests of the economic life of the nation and to improve the economic development of the nation by maintaining Canada's economic growth. That is why the Bank of Canada was created. Our debts can be paid in the same way they were made.


Mr. Mongrain:: Mr. Chairman, I would like to ask the hon. member a question. I suppose that you will find it objective and that I suppose that the hon. member for Villeneuve has studied the system in operation in Europe, in the Netherlands especially. It is called municipal credit. Does not the hon. member for Villeneuve feel that it would be a practical and workable stage toward the monetary reform he advocates since it has been working for at least a hundred years?


David Réal Caouette: I thank the hon. member for Trois-Rivieres (Mr. Mongrain) for his question. As a matter of fact, I think that a municipal development bank or a municipal or school credit bank would greatly help, provided that bank were the Bank of Canada and not the chartered banks. Because, precisely, municipalities and school boards fall in the public sector. This is the case in certain countries, such as the Netherlands. Yes, for this system of municipal credit exists. But is it controlled by the central bank of those countries or is it in the hands of chartered banks instead of in the hands of the central bank? We could do exactly the same as we do with the Industrial Development Bank, which is now a branch of the Bank of Canada.
The present Minister of Finance may not be minister of finance ten years hence. But while he is, in view of his great knowledge of the present financial system and in view of the fact that he looks like a good guy, and that he gives the impression that he understands easily, I suggest he should bring in some concrete amendments which would make it possible to use Bank of Canada interest-free credit for the public sector and would make the chartered banks serve the private sector as they have always done in this country.


Horace Andrew (Bud) Olson: Mr. Chairman, when I was speaking earlier this evening I suggested to the Minister of Finance that the Bank of Canada should purchase a greater amount of the bond issues of the government of Canada. I am sure the minister agrees with me because certainly his policy has been that the Bank of Canada purchase at least part of the bond issues floated from time to time. As I pointed out in respect of the $500 million issue of December 15, 1966, the Bank of Canada agreed to acquire a minimum of $35 million of one type, $175 million of another type and $40 million of the third type, and I use the word "type" in the sense of maturity date. There was an agreement to purchase $250 million of this issue. In other words the Bank of Canada agreed to pick up 50 per cent of the total. Therefore there seems to be some degree of agreement between the Minister of Finance, his government and the Bank of Canada.
It is important that this policy be extended because we are not even holding our own so far as debt charges are concerned. The new book on estimates placed before the house today indicates an item for public debt charges at page 140 in respect of interest and annual amortization of bond discount premiums and commissions in the amount of $1,270,939,500. This represents an increase of $88,488,000 over the previous fiscal year. The increase in net earnings of the Bank of Canada transferred to the consolidated revenue fund between 1964 and 1965 was only $15 million. For this reason we are deeply concerned about this amount of public debt to be carried by the Bank of Canada and we suggested that it should be increased. The Bank of Canada should be purchasing a greater percentage of these new issues.
The $1,270,939,500 required for the ensuing fiscal year is about one half of the personal income taxes paid in this country. This is far too much. Yet, as I pointed out in response to-some questions, we as a nation must honour all the bonds which have been issued as they mature. This is the area in which the Bank of Canada should be involved to a greater extent.
We have all heard a great deal of discussion and disagreement about how the money supply is increased. The minister has acknowledged that the Bank of Canada has been responsible for increasing the money supply to the extent of about $200 million per year for the last five years. That does not represent the total amount of the increase.
March 13, 1967

March 13. 1967
Bank of Canada Act
our industrial base. I suggest, also, that this is proven by the enormous amount of foreign capital that pours into Canada year by year. If it were not for the private funds of individual Canadians going into government bonds, there would be only one other place for them to go, and that would be into the equity of Canadian industry. I think it would be desirable for a situation to be created whereby Canadians would be encouraged to place their savings in the industrial and commercial enterprises of this country.
One of the serious problems that Canada faces today, and which will be even more serious in the future, is that so much of our industry and development is achieved as a result of foreign capital, and the ownership lies with those investing the money, and the interest and dividends that accrue from that development go to the investing country. This is one of the things that is causing difficulty in our international balance of payments situation, because the interest and dividends that accrue from this investment go out of this country.
In my opinion there is no problem at all in finding a place for the private funds of Canadians with respect to such things as housing, industry and commerce within our whole economic and financial system.
Apparently it is only a matter of degree, because the minister agrees that the Bank of Canada should continue to buy the bonds that are issued by the federal government which are required from time to time to take care of maturing issues. The degree should be higher; the amount the Bank of Canada buys should be greater, because we are not holding our own. The increase in net earnings to the Bank of Canada between 1964 and 1965 was up by only $15 million. The situation is better than it has been, but it is not sufficient to reverse the trend in the annual increases in interest required to service the national debt. I hope that very soon we will reach the stage where the earnings derived by the Bank of Canada from holding this public debt will be greater than the increase required to service the debt, so that we will gradually start to move back again to a better financial position.
I have before me a table. It is the table for 1963, not the latest in this regard. It deals with federal, provincial and municipal governments revenue, expenditures and debt. This table is to be found at page 11 of a document entitled "Consolidated Public Finance, Federal, Provincial and Municipal Governments Revenue, Expenditure and Debt," issued by the Dominion Bureau of

Statistics. Item No. 21 on page 11 of this document is headed "Debt charges excluding debt retirement." During 1963 the federal government's provision for these debt charges was $822 million, for the provincial governments it was $122 million, and for the municipalities $200 million. The federal government's requirements for servicing the public debt since that year have gone up substantially; in fact, by over $200 million.
The requirements of the municipalities for debt service charges has gone up even more. Therefore this municipal development fund is becoming an urgent matter, one so urgent that municipalities are continually seeking assistance from the provinces, and the provinces in turn are seeking assistance from the federal government. They are asking for more and more money, particularly to meet their debt service charges.
I hope the minister will take these representations seriously and will try to make some adjustment so that we may reverse this trend, not only in absolute but in relative terms with respect to the total revenue, and the fact that the money of the taxpayers of this country is simply being used to meet the servicing of our public debt.
In conclusion, Mr. Chairman, I would say that I do not despair because nothing is being done. The quotations I have read indicate that some progress is being made in this area. We suggest that this progress should be accelerated so that the taxpayers of Canada may look forward to the day in the not too distant future when we will begin decreasing the public debt charges of this country that are such an enormous load upon all levels of government today.


Edward Nasserden: Mr. Chairman, I have a question for the Minister of Finance. However, before I ask it I should like to express my surprise and disappointment at the extent of the disagreement that now apparently divides the Liberal, Creditiste and Social Credit parties. I remember the day when they were glad to join together to vote for an amendment in support of funny money.


An hon. Member:: Debt free money.


Edward Nasserden: Yes, debt free money. Are we to conclude today that that honeymoon is over? I should like to ask the minister whether it is true that he has lost confidence in the Social Credit party, after witnessing the action of the hon. member for Red Deer, the leader of the Social Credit party, who has admitted that he and his colleagues are unable to cope with the financial problems of their party.
March 13, 1967


Mr. Gilbert:: Mr. Chairman, the Minister of Finance and other hon. members have been treated to Social Credit theories for the last three hours, and I thought I could possibly direct our attention back to the amendments contained in Bill C-190. My colleague the hon. member for Nanaimo-Cowichan-The Islands set forth the position of the New Democratic Party with regard to the amendments contained in this bill. I will deal with a few of the gaps that were left.
[DOT] (9:10 p.m.)
He indicated our support for the amendments, the main one being contained in clause 6, which deals with section 14 of the act. This defines the relationship between the Bank of Canada and the government with regard to the responsibility for monetary policy.
According to the explanatory notes to the bill, there is a process of continuous consultation between the government and the bank in this regard, and a procedure is provided whereby, in case of disagreement between the government and the Bank of Canada, the government may issue a directive to the bank as to the monetary policy it is to follow. The amendment also eliminates the power the governor now has to veto any action or decision of the board of directors or the executive committee. This amendment by and large follows the recommendation set out at page 543 of the Porter commission report. It states:
We believe that central bank independence within the context of government responsibility for monetary policy can best be assured by a dual system of responsibility under which the bank formulates monetary policy and executes it from day to day but under which the government must accept full and continuing responsibility for the policy being followed, although not in the normal course for the details of its execution. The Bank of Canada Act should be amended to make this clear and to provide the Minister of Finance with the right to issue a directive to the bank if the government disapproves of its policy. We believe that this procedure of government direction of the bank's policy should be used only as a last resort and after extensive and conscientious attempts to reach agreement have failed. If such a situation ever arose, its seriousness would call for highly formal procedures designed to focus full and intelligent public discussion on the matter under dispute. We therefore recommend that any directive take the form of an order-in-council to ensure that it receives cabinet consideration; that it be as specific as possible in its terms, making it clear that the government feels the bank has been too restrictive or too expansive in its policy, pointing out in a closely reasoned way how its actions have conflicted with national economic policies, and indicating what steps-including possibly a change in bank rate, market yields, or the cash reserves of the banking system-the government wishes carried out; that it be published with the briefest of delays, say within 15 days of issue; that it be accompanied by a statement from the governor 23033-881
Bank of Canada Act
setting out his opinion of the matter; and that it should automatically lapse after 30 days so that it would not become in effect a continuing directive.
The government's amendment to the Bank of Canada Act largely carries out the recommendation of the Porter commission, except that the 30 day period has been amended to "a specified period". This is probably a better arrangement than the one which the Porter commission supported, and yet it still carries out the spirit of the recommendation. Some flexibility should be allowed when a directive is issued so that the consequences of the directive may flow for an anticipated period of either 30 days or longer. Whether a maximum period should be specified is a matter of concern and we would appreciate hearing from the Minister of Finance on this matter.
If the government has the ultimate responsibility for monetary policy, then parliament must have some way of examining it and seeing how it is being carried out. Monetary policy is more than an administrative matter. It has a strong bearing on the economic climate in Canada. All Canadians are affected by its workings. Parliament at the present time has no opportunity to examine this matter in a regular way.
The Third Annual Review of the Economic Council of Canada recommended that three documents should automatically be referred to a standing committee of the house for examination, to help determine the economic policy of the nation. The three documents were: first, the annual review of the Economic Council; second, the white paper on the outlook for private and public investment in Canada; and third, the budget white paper. We in the New Democratic Party would add a fourth document, namely the annual report of the Bank of Canada. This would give members of the house a chance to examine the governor and to inform themselves on the conduct of our monetary policy.
Last Friday the hon. member for Kamloops suggested that clause 9 (5) of this bill and section 72 of the Bank Act be referred back to the standing committee on finance, trade and economic affairs for further representations and study because of the letter of intent issued by the governor of the Bank of Canada to change from a monthly averaging of cash ratios to a twice monthly averaging period 12 months after the act comes into force. We in the New Democratic Party do not agree with the hon. member for Kamloops. Full representations were made before the standing committee, and nothing more could be added. Any further persuasion can

March 13. 1967
Bank of Canada Act
be supplied during the present debate by hon. members supporting the monthly averaging, when the particular clause comes up for debate.
Finally I would like to underline again the suggestion made by my colleague concerning the fact that the Bank of Canada publishes its economic studies in the same way as does the U.S. Federal Board of Reserve. I am not suggesting studies on internal matters, but there must be many studies that could be carried out in this matter. In his appearance before the committee the governor suggested that this might be started. It cannot be started too soon.


Mr. Johnston:: Mr. Chairman, I should like to endorse the remarks that have been made by my colleagues, the hon. members for Medicine Hat and Fraser Valley, and also those remarks of the members of the Ral-liement Creditistes who have participated with considerable effect in this debate. I might also mention the hon. member for Kootenay West who has expressed some sentiments in this debate not too far from our hearts.
We are very much aware in Canada today of the need for capital to be distributed among the people, and not to be increasingly concentrated in a few hands. Anyone who is in agriculture today knows that his income will no longer depend on the strength of his back but will depend almost entirely on the amount of capital that he can amass, obtain or borrow in order to finance the automation and mechanization of his farm. The government has realized to some extent the need to control the money supply; but, for example, they have concentrated far too much on the housing industry rather than on dealing with the basic problem. For several years the policy of the government has been to allow a small cycle of boom and bust in the housing industry as one of the means of influencing the monetary system in this country.
[DOT] (9:20 p.m.)
If you talk to people from the housing industry you will find that their main plea is for sustained financing for that industry, so that they will not be constantly pushed out of business by the fluctuations of the government's policies in this respect. Just the other day the minister's colleague, the Minister of Labour, spoke in Vancouver regarding that industry. The headline on the article in the newspaper is, "Most Private Housing for Middle Class, Labour Minister Says". The article also mentions the need for public housing for a group of people that it has been
TMr. Gilbert.]
traditionally assumed could finance their own housing. One would wish the Minister of Labour, as well as the Minister of Finance, would look at the basic problem rather than at some of the tinkering that can be done in an attempt to improve the situation. The Minister of Labour must know, after talking to people in the housing industry, that public housing is the most expensive of all forms of housing that is constructed in this country at the present time. The real cost of housing is not the lumber or the cement but the financing of the money that is necessary for it. It is this problem of financing the debts that are involved in the construction of housing, hospitals, schools and for the development of this country that is one of the greatest problems facing us today.
My colleagues have spoken ably on the question of a municipal development bank, so I shall not spend too much time in that area. However, I feel we still have a need to educate the people of Canada to the significance of the government's monetary policy. We had a wondrous example during the meetings of the finance committee when we heard representatives from the Bankers Association attempt to over-simplify the entire structure of the monetary system. I referred to this last Friday in mentioning the attempt to equate money with all the other commodities with which we are familiar. It was a deliberate attempt to mislead the people of Canada as to the meaning of money, and its place in the economy today. Economists who read that series of reports must squirm as they read these over-simplifications attempted by the bankers, apparently in some hope the people of Canada would be taken in by them and would place the problem of the monetary supply somewhere other than squarely at the feet of the government in power today.
The hon. member for Medicine Hat has spoken about the role of the Bank of Canada in accepting part of the responsibility for the national debt and therefore, in effect, increasing the money supply in the country. I know the governor of the Bank of Canada has said he would rather see the money borrowed from the United States than produced this way by the Bank of Canada, but we in this party feel there is a much greater role for the Bank of Canada to play in monetary policy and in the monetary supply in Canada.
I was happy this evening when the Minister of Finance extended the debate into the international sphere when he said that no country in the world had elected a Social Credit government so far. He of course knows
March 13, 1967

why. One of the reasons is that the policies advocated by Social Credit as far back as 1935 have been adopted in part by many governments throughout the world, including the government we have in Canada today. Our argument is that governments could go further in adopting some of the policies advocated by Social Credit, and in many cases the partial adoption of these policies has convinced the public that nothing further is needed.
As we move into the technological age we in Social Credit can see that we have not gone far enough, and that a more wholehearted acceptance of our policies will become necessary as we go along. The bill before us of course is related to the problem of international finance, and that problem relates directly to the monetary supply of a country as well.
I should like to refer to an article in the "New Republic" for September 25, 1965 by Nathaniel McKitterick, entitled, "Closed Shop for Monetary Reform". This article contains some suggestions to the leaders of the world with regard to monetary policy and their relationship to the bankers union, which effectively controls monetary policy at the international level. The article reads:
The Bankers Union is in a bind because its jurisdiction over money-or more precisely over the maintenance of confidence in money-is threatened. And good members of the Bankers Union, like good trade unionists, regard their first duty to be protection of their jurisdiction against intrusion by outsiders.
The threat to the bankers' jurisdiction comes, not from another union, but from responsible political leaders-that is, politicians responsible to the voters for their offices.
I am sure the Minister of Finance must have quivered slightly as he heard the returns from the recent election in France, where the political leadership of that country has adopted monetary policies more orthodox than anything seen in this world for some time, and where the voters of that country have administered a severe setback to that political leadership. The article continues:
Now, the Bankers Union fears, and with good cause, that responsible leaders may want to reduce the role of gold as an international medium of control in favour of discretionary policies, implemented through the international monetary system, to sustain increasing flows of goods and capital among countries.
We have been asking for this type of greater discretionary policy on the part of this government in relation to the monetary supply of this country. The same policy holds good at the international level as well. This evening we have heard various attempts to 23033-8815
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ridicule the policies put forward by Social Credit speakers. We might be a little more concerned about that ridicule if it were not a fact that the present international monetary system and monetary thinking, in itself, does not bear examination.
The article continues:
In this scientific age the sound of otherwise intelligent and responsible men rallying the country to the defence of gold at $35 an ounce (which is the inescapable meaning of a "defence of the dollar" under the present system and in present circumstances) has more in common with a Pawnee rain dance than with stalwart statesmanship.
This has been one of the problems facing the world, that there is no logic in the monetary system that has been built up by accident in the past. Social Credit has been attempting for many years to educate the public to that fact. We have suggested that there are reasonable, logical and sound policies that can be adopted which can get us out of this cycle of boom and bust that we have experienced, and will continue to experience if bold and imaginative measures are not taken.
[DOT] (9:30 p.m.)


Gilles Grégoire: Mr. Chairman, I shall only take a few minutes to ask again the same question I directed to the Minister of Finance, because I believe he has not answered the question I put to him; maybe he did not understand its meaning.
The Minister of Finance has seen fit to reply to my question mostly in respect of interests that must be paid to the individual investor. In this connection, I would say that I quite agree with him: if a Canadian citizen, or a Canadian company, lends their money to another individual, then I see nothing wrong with an interest on this loan. If in our present system an individual grants a loan of $100 to the federal government to purchase a federal government bond, then it is money that the individual had already which he loans to the federal government. It is normal that savings should bear a profit, that is interest.
A moment ago, I heard the member for Mount Royal (Mr. Trudeau) ask the member for Villeneuve (Mr. Caouette) if he thought that the Canadian citizen, who lends money to the federal government, say $100 for a savings bond, should receive interest? To this I would answer yes. Otherwise, would the individual lend money to the federal government? Surely not, and that is exactly the problem.
We would like the Bank of Canada to finance public development of the country instead of the Canadians themselves, so that

March 13, 1967
Bank of Canada Act
the Canadians, when making savings available for investment, would place them in the development of our natural resources, our secondary industries, and not invest as they now do in the debt of the country. They would rather invest their savings in the development of Canada.
However, it would be necessary for the public sector to dispose of another source of money, and in our opinion, this source should be the Bank of Canada.
According to the minister, the government can only And money from two sources, either through taxation or by borrowing and if it borrows money by issuing bonds, it has to pay back interest. Well, I say to the minister that there is another source of revenue, the new credit created every year and representing this country's development.
The new credit created every year by the banks. We saw this afternoon that the Minister of Finance agreed that credit is created by chartered banks when they make loans. What does that mean and how much does it represent per year? I should like to refer to statistics from the Bank of Canada Statistical Review. The figures I shall quote are taken from the October 1966 issue. The minister may have a more recent edition than mine, but I think this one will suit the purpose I have in mind.
Let us refer, for instance, to page 661 of the October 1966 issue. In the minister's edition, it would be at the very beginning, on page 3 or 4 of the statistical review, or rather on page 4, right after the Bank of Canada reports and before the chartered banks reports. The title is Chartered Banks Monthly Series. It is at the very beginning of the Bank of Canada statistical review.
One finds, for instance, that in 1964 the money supply reached $15,598 million, made up of the cash reserves of chartered banks, $1,263 million, and deposits in Canadian dollars, $15,598 million or on the whole, an average coefficient of 8.1 per cent in cash reserves.
The following year, the same money supply was increased to $17,186 million. That means, then, that during the course of the year, $2,588 million of credit was created, since the money supply for the previous year was $15,598 million. The next year, it was $17,186 million-so there was then an increase, in that single year 1964-1965, of $1,588 million. All this credit was created by the chartered banks of Canada.

Well, what we would like, is that such a difference, such an increase, such an extension of credit be created by the Bank of Canada rather than by the chartered banks. Those $15,598 million are in circulation, that is a fact; they are in the area of the chartered banks; that sum may be loaned by the banks and bear interest; we are quite ready to admit it.
The following year, when credit is expanded by $1,588 million, such an increase should be created by the Bank of Canada and not by the chartered banks. Not necessarily the entire $17,186 million of 1965, but simply the $1,588 million which should be created by the Bank of Canada to be added to the $15,598 million which was in existence the previous year.
It is the increase and only the increase we would have created by the Bank of Canada and have such increase interest free, because when the chartered banks create it, at the time the chartered banks create such a increase, they will not be required to pay interest to anybody. They lend and the people to whom they lend have to pay the interest. On such an increase, the chartered banks will not be required to pay interest to anyone. It is new money they have created and not money held on deposit, on which they are not required to pay interest to anyone and it is that increase which in 1965 represented compared to 1964, the sum of $1,588 million which could have been created by the Bank of Canada and loaned without interest for the public sector.
Now, let us consider the other year. In September 1966, the last month for which I have statistics, the money supply had increased then to $18,855 million. At the same time, the year before, it stood at $17,186 million. In 1966, that money supply of $17,186 million could be lent by the chartered banks, on interest. This money is already on the market. But since the money supply, at least by September 1966, had increased to $1,869 million and reached $18,855 million, this new increase, corresponding to the development of the country, should be created by the Bank of Canada and lent interest-free to municipalities, school boards and the provinces.
The following year, the money will have reached $18,855 million, and again the increase in the money supply, not that which is already in circulation at the beginning of the year, but that which is produced during the year, and which is being created at the present time by the chartered banks, should be
March 13, 1967

created by the Bank of Canada and lent interest-free, in the public sector.
What would be the result of this in concrete terms? To take a concrete example, suppose there is an increase of $1,669 million, as happened last year-what happens under the present system? The chartered banks are the ones who create the credit-I have no need to prove that, since the hon. Minister of Finance admitted it in the committee on finance, trade and economic affairs-which is raised by $1,669 million, representing merely the increase and not the part existing already.
Thus the chartered banks create this credit of $1,669 million. They lend it to the federal government, the provincial government, municipalities, or school boards. The banks do not pay interest when they create and lend this sum. However, they charge 6 per cent interest when they lend the money to a government or an individual. The latter return the deposit to the banks, who pay them 3 per cent interest. And this is how one proceeds under the present system.
If there was a system such as the one which we are advocating, the Bank of Canada would create the increase, the credit of $1,669 million which makes up the annual increase over the previous year. The Bank of Canada would grant interest-free loans to Quebec City, Toronto or Winnipeg either for the construction of hospitals, roads or bridges and, I repeat, they would be interest-free loans.
If for instance an amount of $10 million were allocated for the construction of a hospital, this construction would entail the payment of wages and the purchase of materials. Then, those who would receive the wages, those who were paid for building materials would obtain that money and deposit it in the bank, as it is usually done, and the bank would pay them 3 per cent interest and afterwards would lend it again in the private sector at 6 per cent interest.
The difference is that the money in circulation would have entered interest free into the public sector to develop public investments and would come back afterwards in the private sector.
[DOT] (9:40 p.m.)
The difference also is that the bank would have the money on deposit before lending it while at the present time, it lends the money without having it on deposit. It has nothing at all; it lends at a 6 per cent interest charge and its loan is again deposited in the chartered banks system at 3 per cent interest.
Bank of Canada Act
Under a system such as the one which we are advocating, when some new credit is created, it is created by the Bank of Canada and lent interest free to finance public undertakings and I insist on the word public-such as the construction of bridges, highways, colleges, hospitals, sewers, waterworks, etc.
Those who receive that money afterwards, as wages or as payment for their material, deposit it in the chartered banks, and receive 3 per cent. Then, these banks lend ceive 3 per cent. Then, these banks again lend this money to the private sector at 6 man, is that all public sectors have taken advantage of interest-free loans for public projects instead of private works. If one wants to know what it can mean at any given time, well, the member for Villeneuve spoke about it a while ago, when he said that if this had existed in Canada in the last 50 years, the $1,274 million required to pay interest on today's debt could be used to administer the country. What does this represent? The combined total of family allowances and old age pensions.
Municipalities having to pay interests representing 30, 35 and 45 per cent of their budget would have 30, 35 and 45 per cent more at their disposal in their budget to carry out work projects. And there lies the difference between the existing system and the one we are advocating.


David Réal Caouette: Would the hon. member permit a question?


Gilles Grégoire: Yes, certainly.


David Réal Caouette: Does the hon. member not think that when he says, for instance, that banks are paying a 3 per cent interest, that it is only on savings accounts? Banks do not pay 3 per cent on current accounts. Now, current accounts are far more numerous and far larger than savings accounts. Then, does not the hon. member think that savings accounts earning a 3 per cent interest constitute in turn a new reserve for the chartered banks under the system of the Minister of Finance and that such a new reserve allows them to multiply again by twelve and a half the amount they can lend through the use of such savings accounts as reserves in the Bank of Canada?


Gilles Grégoire: Mr. Chairman, I agree with the hon. member for Villeneuve when he says that chartered banks do not always pay interest on current accounts, and that on savings accounts, they pay 3 per cent, on the lowest amount deposited during the month.

March 13, 1967
Bank of Canada Act
If a depositor keeps $1,000 in his savings account for a month, and that at the end of that month, he has only $200 left for one, two or three days, it is only the lowest amount that will bear interest.


David Réal Caouette: That is probably why the Minister of Finance has no savings account.


Gilles Grégoire: Not only that, but the
federal government maintains,-and I would like to be able to give the correct figure, I could provide it tomorrow, because it is scandalous,-deposits that amount to approximately $300 million.


Mr. Tremblay:: No, it is $100 million.


Gilles Grégoire: It would be $100 million according to the hon. member for Matapedia-Matane. I am quite ready to accept that for tonight. However, I will check that answer in the proceedings of the standing committee on finance, trade and economic affairs; anyway, the government keeps, generally speaking and on the average, deposits of the order of $100 million on which the chartered banks do not pay any interest. There are at least $100 million deposited in chartered banks accounts by the federal government, by the Minister of Finance, and on which no interest is paid. The interest would represent $3 million-


René Tremblay: Would the hon. member permit me a question?


Gilles Grégoire: Certainly.


René Tremblay: In the statement he made a moment ago concerning the amount that could be created by the Bank of Canada instead of by the chartered banks, he probably forgot the effect that this reserve could create by the issuing of new money by the Bank of Canada, issuing which would absorb yearly $1,669 million in Canada government bonds and which would enable the chartered banks to create considerable inflation.


Gilles Grégoire: Mr. Chairman, the day when only the Bank of Canada has the right to create credit, the chartered banks will no longer be able to multiply by 12.5 the money, I ke the reserves, as they do now. Then, the chartered banks will cease to be in a position to contribute to the increase of credit and will not be able to create inflation. Now, it is claimed that the Bank of Canada can absorb part of those $1,669 million. How can it? In 30 years of existence, it has accumulated

only three billion dollars' worth of bonds. That is, about $100 million a year. That is nothing compared to the $1,669 million of credit created outright by the chartered banks in 1965. There is the difference. As the hon. member for Matapedia-Matane (Mr. Tremblay) said, the cash reserves must be taken into account. But let us not forget that in 1966, in September 1966, the money supply was $18,850 million. That means reserves of $1,650 million that is 8.08 or 8.1 per cent. This would mean that the chartered banks, with $1,524 million, were allowed to create, over the years, the sum of $18,858 million, which represents the present debt of Canada.
If we have a debt now in Canada, it is reflected, virtually cent for cent, in the creation of credit carried on over the years by the chartered banks. The day we take this privilege to create credit away from the chartered banks, we will have put a stop to Canada's indebtedness because the government will have found a new source of revenue other than taxes and loans, since it, rather than the chartered banks, will create credit, neither more, nor less, but let us say exactly the same amount per year than the chartered banks create.
It is not a matter of putting the money press to work but of doing exactly what the chartered banks are doing, what the Bank of Canada will have to do after getting the authorization of parliament to give back to the Canadian people a real degree of control over credit. Then all the public bodies in Canada would have benefited in 1965 from an interest-free credit increase of $1,669 million.
Mr. Chairman, there is a difference. And that is the question I put earlier to the Minister of Finance and Receiver General. And he answered me by asking me: Do you think the chartered banks should charge interest? I say yes. But on the money they already have on deposit and not on the money they create. That is the difference. Not on the increase in credit which is created by the chartered banks. That is what I am against, Mr. Chairman. The increase in credit, in the money in circulation in Canada does not belong to the chartered banks but to the Canadian people as a whole. If the chartered banks can increase credit it is because the people of Canada have worked hard to produce more; that increase in production is represented by an increase in credit.
March 13, 1967


Pierre Elliott Trudeau: Would the hon. member allow me a question?


Gilles Grégoire: Certainly, Mr. Chairman.
[DOT] (9:50 p.m.)


Pierre Elliott Trudeau: Am I to understand that the hon. member for Lapointe thinks chartered banks have a definite role to play and that he does not object to it? He seems to say that the creation of credit allows the banks to use unjustifiable practices with regard to interest. If that is the case, how does he explain the fact that money invested in banks gives about the same return as money invested in industry?


Gilles Grégoire: Yes, of course; money invested in banks gives an even greater return than money invested in industry or in any other field. To ascertain it, if the hon. member for Mount Royal disagrees, he need only see how a Bank of Montreal or a Royal Bank share bought 20 years ago has tripled in value today. Even then, the return on it is still 8 or 9 per cent, but on three times the sum actually invested; no other industry gives such dividends today.
The member for Mount Royal should examine the figures I have been given and he will see the light. But I made no comparison between the yield of bank securities and industrial securities. Where I find the role of the banks justified is where they have the privilege of creating credit and to lend it with interest, while the new credit represents the growth of the country and this is something which does not belong to the banks.


Joseph Jacques Jean Chrétien: I have a question for the hon. member. I think the committee would be agreeable to facilitate matters for the hon. member to obtain, if he so wishes, a bank charter in his own name, and then we would see how well he would do.


Gilles Grégoire: Mr. Chairman, I am being egged into political partisanship and chicanery when I am trying to express ideas. If that is the only way the parliamentary secretary can reply to the ideas that are being put forward, it means that he has no argument to counter what is being suggested. And if the hon. Minister of Finance cannot reply himself but has his parliamentary secretary give such answers, it is not worth much, Mr. Chairman. If the Minister of Finance has another question it is up to him to put it.
Bank of Canada Act


Mitchell William Sharp: May I ask the hon. gentleman a similar question. Why is there such great difficulty in financing new banks in this country if they are as profitable as suggested by the hon. member?


Gilles Grégoire: Mr. Chairman, I do not see that it is so difficult to establish a new bank in Canada. I do not see that it is so difficult. Let the minister tell me what the problems are.


Mitchell William Sharp: May I remind the hon. gentleman of the testimony that we heard from the Bank of Western Canada, which seems to be having some difficulty in marketing its shares.


Gilles Grégoire: Mr. Chairman, the difficulties of the Bank of Western Canada were not due to the lack of funds, but to the fact that too many people wanted to borrow. One had to refuse some of them, as the hon. Minister of Finance knows. Our chief difficulty was that the whole group of British International Finance wanted to borrow from the Bank of Western Canada while the bank authorities did not want to grant them loans. That was the main trouble. It had nothing to do with the banking operations, as the Minister of Finance knows very well. It was only an internal difficulty, and this is what the minister answered to the committee of finance, trade and economic affairs.
But when one tries to discuss and to bring arguments to the minister, he cannot answer. Let the minister answer the arguments I put forward a while ago. Then I will ask the following question:
Why not let the Bank of Canada create the new credit which represents the money supply increase, new credit which will be used to finance public works, instead of letting the chartered banks create such new credit which they lend with interest to individuals?
Why would it not be up to the Bank of Canada to create such new credit, namely the yearly increase, not what already existed formerly, as I was saying a while ago, but the yearly increase in credit? Why would it not be up to the Bank of Canada to create it and to lend it without interest to different

March 13, 1967
Business of the House
public bodies, be they federal, provincial, municipal or educational, and that money would inevitably return in the banking system and then, the banking system would be able to lend it again with interest; we would accept that. But at the time that new credit is created, why would it not be up to the Bank of Canada to lend it without interest?
Could the minister tell me, could he answer such a precise question, not by evading the point, not by beating around the bush, but by replying directly? Are there any objections to that? Does the minister see any serious objections to the fact that the yearly credit increase would be loaned without interest, to the public, by the Bank of Canada? Could the minister answer that question?


Mitchell William Sharp: Yes, Mr. Chairman, very great difficulty indeed.


Gilles Grégoire: Mr. Chairman, one can tell the minister does not know quite what to say. He says, "Yes, I see many difficulties there indeed." But which difficulties? Can the people of Canada be content with that? The minister admits openly-and he admitted it in his reply to a question of mine-that banks loan 12J times their cash reserves, while admitting in the same breath, "There is a lot of credit and that is normal; it is healthy and beneficial to chartered banks." The minister accepts that, but can the Canadian people accept that? The minister says, "Yes, I can see many difficulties there." But which difficulties? The Bank of Canada Act is reviewed every decade. In this case, it has not been reviewed in 12 years. I will not be content with answers such as that one. Let the minister tell us what difficulties there are. That is what we demand of the minister, that he tell us what difficulties he sees.


Mitchell William Sharp: Well, Mr. Chairman, if I may say so once again, I consider that such action would be very detrimental to the interest of the people of Canada because it would be very inflationary, and all of these arguments being presented by the hon. member for Lapointe are simply a camouflage for one of the oldest practices in the world, which is the practice governments have indulged in in the past, and I hope will not indulge in in the future, and that is printing money for the purposes of meeting government expenditures.

[DOT] (10:00 p.m.)


Gilles Grégoire: Mr. Chairman, I shall put the question again to the minister, but this time I ask him to be honest. Without minting a single coin-let the minister listen well- without increasing the money supply more than the chartered banks did, not by a penny more than the banks did in the past, the latter did it for $1,588 million in 1965, $1,669 million in 1966, but without doing it for a single penny more, if the Bank of Canada were to do it instead of the chartered banks, and without doing it for a penny more, that would not be inflationary. Perhaps the minister could answer that one. If the Bank of Canada were to do it for not a penny more than the chartered banks did in the past, would that become inflationary just because the Bank of Canada would be involved? If the Bank of Canada did it for not a single penny more, provided, of course, the chartered banks no longer had the right to multiply that by 12?
Naturally, I insist on saying this to the minister: provided the chartered banks no longer had the right to multiply that by 12. But if the Bank of Canada created the same amount as the chartered banks, without multiplying, without having to multiply by 12 like the chartered banks, would that become inflationary? I give notice of that to the minister, so that he can think about it.


An hon. Member:: Mr. Chairman-

Progress reported.



BUSINESS OF THE HOUSE

Mr. Monleith:: Mr. Speaker, does the house leader intend to announce the same order of business that he announced on Friday?


George James McIlraith: Yes, Mr. Speaker.
Mr. Monieiihr May I assume at this time it is definite that the Bank of Canada Act will be followed by the Bank Act?


George James McIlraith: Yes. I would hope we would make good progress tomorrow.


Jay Waldo Monteith: I trust that you will not have to give the same message tomorrow night at ten o'clock.
March 13, 1967	COMMONS



PROCEEDINGS ON ADJOURNMENT MOTION

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

David Réal Caouette: Mr. Speaker, the matter I intend to raise tonight-I am happy to see that the Minister of Public Works (Mr. Mcllraith) is present-concerns the contract awarded for the demolition of the old printing bureau, a matter uppermost in the minds of the people of Hull and the area.
As a matter of fact, the president of Thi-bault Lumber stated to Le Droit, on Wednesday, March 8, that the federal government, the Department of Public Works in particular, was in fact making a gift of $50,000 to the firm of Cohen & Cohen to which the contract for the demolition of that building was awarded.
Now, following publication of this statement of Mr. Thibault, who incidentally is president of a Hull business specializing in building demolition for 35 years, the Minister of Public Works said to the representative of Le Droit of Ottawa:
Those who had time and competence were invited to bid.
This means that the other contractors within the area and without did not have the time and mainly that were non competent. Those who were invited to bid for a contract of some $100,000-the contract was awarded to Cohen & Cohen for $92,777- without any public call for tenders, through the newspapers, were: Hugh Grant Limited, of Ottawa, $99,000; Teperman and Sons Ltd., Ottawa, $102,420; Greenspoon Bros. Ltd., Toronto, $115,000; Palmer Levitan Ltd., Hull, $117,200 and Hurdman Bros Ltd, Ottawa, $119,750.
Mr. Speaker, I would like the minister to tell us if some French Canadian contractors could not have been asked to submit tenders at that time? What would have been the reaction of the English speaking contractors if the minister had asked French speaking contractors only to submit tenders for the wrecking of the old printing bureau?
I think that this is a clear case of discrimination. There is something else. It has been rumoured in the area that someone in Toronto 23033-882
Proceedings on Adjournment Motion was asked to submit a tender. Were people in Montreal asked? Were companies in Hull asked to submit tenders for the wrecking of the old printing bureau? No.
Mr. Speaker, when Mr. Thibault claims that he could have done the wrecking for $50,000, that is far less than what the government is now paying, people begin to wonder. Have public funds been fooled around with to play politics? Are the contractors concerned personal friends of the Minister of Public Works? Did the companies agree that the firm of Cohen & Cohen should be awarded the contract for $50,000 or $40,000 more than others could have done the work for? Would there be in this a possible gift to the electoral funds of the Liberal party of the Minister of Public Works? Would the companies not have agreed among themselves, for instance to take $4,000 or $5,000 each and let Cohen & Cohen get the contract for the demolition of the national printing bureau?
Mr. Speaker, I believe there is some discrimination in that case. When we see in other newspapers during the same period that is on March 3-another here on February 24-that for trifles the Department of Public Works is calling for tenders amounting to $2,000 or $3,000 and those calls for tenders have appeared in the Progres de Hull on two occasions: tenders for the removal of ashes and refuse at the testing laboratory of the Department of Public Works to empty trash cans-one wonders what is going on.
To install chemical extinguishers in the Hunter building, tenders have been called, but to demolish a building for an amount of $92,777, the minister answers:
We then checked the financial stability of each one of those companies.
Does this mean that only these six companies are financially stable? The minister is fully aware of the fact that if he had used the press or a public channel to call for tenders for the demolition of the old printing bureau, perhaps 15 or 20 contractors would have tendered for the contract. For my part, I do not discriminate against anyone; I do not care whether one is English speaking, French speaking, a Jew, a Ukranian, it makes no difference, the party submitting the lowest tender must do the work, unless he is insolvent. It does not take three weeks to find out whether a contractor is solvent or not, as the minister knows; his officers have only to phone the bank manager, who knows about the solvency of contractor Thibault or Filiou or of any other contractor in our area.
13948	COMMONS
Proceedings on Adjournment Motion
Mr. Speaker, when the minister says that only those who could offer financial guarantees were invited to tender, he does not help our small contractors in Hull or the average contractors in our area or in the city of Montreal or in other places in Canada, and he knows it.
Therefore, I say that there was some political intrigue in the awarding of this contract for the pulling down of the old printing bureau. And the minister went on to say:
-the government could not allow itself to wait while a contractor was looking for funds.
He can learn tomorrow of my financial standing by calling the manager of my bank and asking whether my business is profitable or not, whether I am stable enough financially to operate such a business. And as regards a firm such as the Thibault Company, I do not mean that the Thibault Company should have been awarded the contract, but that the Thibault Company, should have had an opportunity to tender as much as the others.
Such is the unfairness of the Department of Public Works, in that some Canadians and other companies have been prevented from submitting a tender under the pretext that time was short and the work had to be done so hastily.
We know for a fact that anyone of those contractors could have demolished the old printing bureau as it can now be demolished and at a lower price than the government is going to pay, out of the taxes of the Canadian people. Let the minister give us some explanation now and tell us why were not all Canadian contractors allowed to submit tenders?
[DOT] (10:10 p.m.)


George James McIlraith: Mr. Speaker, the hon. member has raised an interesting plea on behalf of a man in Hull. The facts about this contract are rather simple, and information is available to the public and to anyone in the industry who is interested in it. It is interesting that the man the hon. member speaks about did not come near the department to seek to bid on this matter although he knew, as did all the trade, that the building was coming down.
Public tenders were invited from six firms in the wrecking business who are doing work in this area and all of them bid on the job. I believe the names of the six firms were correctly given. One of them is in Hull, four are in or have branch offices in Ottawa and one is

DEBATES	March 13, 1967
in the western Ontario area. I think the bids and a knowledge of the industry will show that they are certainly not friendly to each other; they are highly competitive. As for suggesting that they are friends of mine, with the exception of two firms I do not think I know any of them; they are merely names in the business.
The situation was that the old printing bureau, which is a rather substantial building, was built very close to one of the few roads connecting Ottawa and Hull, and therefore it can only be wrecked in a certain manner and not by the simple, easy method of what is called ball and chain wrecking. It has to be knocked down and the site cleared and made ready for parking for the centennial show "Son et Lumiere" that will be put on starting in the middle of May this year. This is part of getting that project ready. To have advertised the tenders in the newspapers in the ordinary way could have been done, but it would have delayed proceedings somewhat more than three weeks, from 23, to 28 or 29 days.


David Réal Caouette: Oh, oh.


George James McIlraith: I am sorry the hon. member interrupts. I did him the courtesy of listening to his remarks and not interrupting. Perhaps it is not too much to expect that courtesy from him in return.
We had to bear in mind the safety measures that will be enforced, which involve certain technical aspects of demolishing this building. We also had to bear in mind the time limit involved. The departmental officials picked the firms most likely to be equipped and able to provide the necessary financial bonding quickly, and invited them to bid. The six firms bid in a range from $92,000 to $119,000, and the contract was immediately awarded to the lowest bid.


David Réal Caouette: That is not an answer.


George James McIlraith: It is an answer. I am sorry the hon. member does not understand the answer. I should like to refer to the hon. member's remarks about the ethnic origin of the people bidding. The firms in this business were invited to bid, and no questions whatever were asked about their ethnic origin; and I hope that in this parliament no questions will be asked about the ethnic origin of any person bidding on a Canadian contract. I am very much disappointed in the fact that the hon. member for Villeneuve (Mr. Caouette) has seen fit to interject this note into the matter.
March 13, 1967	COMMONS
I received this morning a report from a local meeting on political matters in another city adjacent to this. It indicated that the hon. member would raise this point, and why he would. If there is any political background in this matter, it is in the hon. member's ambitions with respect to some elections he expects in the near future.


Gilles Grégoire: That is not an acceptable answer. This is patronage.



OLD AGE ASSISTANCE-BRITISH COLUMBIA- DENIAL TO OLD AGE PENSIONERS OF PROVINCIAL SUPPLEMENT

Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, last Friday I tried to draw to the attention of the Minister of National Health and Welfare (Mr. Mac-Eachen) the situation in British Columbia where very large numbers of old age pensioners are being denied the full benefit of the $30 supplementary allowance which has been established recently. This evening I wish to read a form which is being sent out to old age security pensioners who also receive the present provincial government supplementary allowance, which amounts to a maximum of $30. This form is being received throughout British Columbia and it reads as follows:
To: present recipients of supplementary social allowance to their old age security pension, February 20, 1967:
1.	In the month you receive a retroactive payment of the federal government guaranteed income supplement, your provincial government will also pay the provincial portion of the supplementary social allowance you received heretofore.
2.	In subsequent months, the amount of the provincial government supplementary social allowance to which you will be entitleu will be based on your actual needs in accordance with the information shown on your file. If further information is required, you will be contacted either by mail or by a social worker,
3.	It is regretted that this review has to be made, but it is due to the fact that the federal government would not agree to exempt the guaranteed income supplement when determining entitlement to supplementary social allowance.
4.	Receipt of the guaranteed income supplement, however, will not affect your health services and the medical card you presently hold will continue to be valid unless you are notified to the contrary.
I would point out that the over-all effect of these principles will mean that thousands of both single and married pensioners will not receive the full benefit of the new $30 federal allowance. What the federal government gives them on the one hand will be taken away by the provincial government on the other.
23033-882J
Proceedings on Adjournment Motion
We find that the federal and the provincial governments are blaming each other. Undoubtedly both are correct in doing so. However, the initial responsibility must rest with Ottawa for a number of reasons. Last fall there was a situation where the old age pension was very far from meeting the needs of the old age pensioners, and obviously something had to be done. The government had been warned by many agencies, including the committee on aging, a year ago last January, that the very least that was necessary for a decent income for a single person living on old age pension was $138. All the government needed to do was to make an across the board increase under the old age security legislation of 1951 with no questions asked and no strings attached, and of course it would take back in income tax what was not needed. It was not a case of giving to millionaires; it was a simple giving out to those people who needed it and taking back in the regular form of income tax from people who did not need it. However at that time the government was anxious to prove itself guiltless of imposing a means test. It used fancy language of all kinds and it prostituted the term "guaranteed income" which, it had no business using.
The government was so anxious to prove itself guiltless of a means test that it established very complicated means test regulations. I have been going through them and I do not see for the life of me how old people can be expected to understand how to work out those things by themselves. Most of their neighbours and friends, to say nothing of some of their members of parliament, would be hard put to it to explain all the complications to the elderly people.
[DOT] (10:20	p.m.)
In addition to making these elaborate means test regulations, the federal government failed to do what it should have done, and what was vitally necessary, that is to hold talks with the provinces to make sure that the provincial supplement would not be diminished when the federal supplement was given. Some of us drew this to the attention of the government at the time. I pointed out that it was most essential to know that the provincial supplement would not be withdrawn. At the time, we had no satisfactory reply from the federal government. The federal government took no care to see to it, when it gave the supplement, that it was geared to the real income needs of the elderly people.
In addition to that, of course, the minibudget added to the discomfort of elderly
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Proceedings on Adjournment Motion people by shortening up their living allowance even more by the addition of 1 per cent to the sales tax, raising it to 12 per cent. This bore very heavily on most of the things these people need. I want to say that as a result of all this thousands of pensioners in British Columbia, single and married, are not receiving and will not receive the full benefit of the new $30 federal allowance.
I want to know what action this federal government proposes to take to see to it this situation is rectified. I do not know whether the same situation exists in the other provinces, but I do know that it exists in British Columbia. I know the problem is the result of the federal government's failure to see to it by seeking agreement with the government of British Columbia that such would not be the case. I believe the federal government should not permit itself, nor should it be allowed to permit these elderly people to be kicked like footballs back and forth between the two governments. There should be something done now, to clarify and rectify the situation. I ask what that action is going to be.


Margaret Isabel Rideout: Mr. Speaker, I will not comment on what the government of British Columbia may be saying about the federal government in relation to supplementary allowances. I am, however, happy to be able to clarify the situation.
The payment to old age security pensioners of the guaranteed income supplement is in-
DEBATES	March 13, 1967
tended to ensure that all old age pensioners will be guaranteed a minimum income of $105 a month. Where provinces have been paying supplementary allowances, the cost of which has been shared by the federal government, the need for such payments will be substantially reduced with a consequent saving to provincial treasuries. It has been made clear to all provinces, Mr. Speaker, that where the combined old age security and guaranteed income supplement are insufficient to meet the need of pensioners, the federal government will continue to be prepared to share with the provinces in the costs of additional supplementary allowances based on need. There is no ceiling on the level of federal contribution for this purpose, it being left to the provinces to determine the amount of the supplementary allowances it wishes to pay.
I might note, Mr. Speaker, that in determining the need for supplementation, it will be apparent to members that the payments by way of old age security and the guaranteed income supplement should be taken into account. I might add also that, through the Canada Assistance Plan, the federal government is now able to share, for the first time, in the costs of health care and welfare services. The provision of federal contributions to these services will enable the provinces to provide these important services without incurring the burdensome costs that they would otherwise face.
Motion agreed to and the house adjourned at 10.27 p.m.

Tuesday, March 14, 19G7