1967-02-06

Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I should like to table an exchange of letters between myself and the premier of Ontario regarding the latter's suggestion for a meeting to discuss confederation.


Mr. Knowles:: Are you both in favour of it?


Mr. Speaker:: Has the right hon. Prime Minister leave to table the documents?


Some hon. Members:: Agreed.



MR. JUSTICE LANDREVILLE CONCURRENCE IN FIRST REPORT OF SPECIAL JOINT COMMITTEE

Mr. Ovide Laflamme (Quebec-Montmo-rency) moved:: That the first report of the special joint committee of the Senate and the House of Commons respecting Mr. Justice Landreville, presented to the house on Thursday, February 2, 1967, be concurred in.


[Stage Direction]
Motion agreed to.

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

Mr. Lachance: 1.	Is it true that the inmates in the Kingston penitentiary, of whom 30 per cent are French speaking, cannot benefit from the services of any French speaking teacher?
2.	If so, does the government intend to correct this situation soon?
3.	Does the same situation exist in the other penitentiary institutions in Canada?


Hon. L. T. Pennell (Solicitor General):: 1.
There are three teachers on the staff of the
Kingston penitentiary, of whom one can converse reasonably well in French, but not to the extent of being able to teach in French. The services of part time bilingual teachers are available on request; however, no such request has been received from inmates. Correspondence courses are available to all inmates in both French and English. The stated percentage of 30 per cent of French speaking inmates needs clarification, inasmuch as this percentage estimate is based on the inmate's family name and not on the language spoken on a day to day basis. A large number of the inmates thus categorized were raised in Ontario and use the English language as a matter of choice.
2.	Yes. The next teacher vacancy, which will occur by virtue of the retirement of any one of the teachers now on staff, will be advertised, stating bilingualism as a requirement.
In any event, it is usually possible to transfer a French speaking inmate from an English speaking institution to a French speaking institution, where he so requests.
3.	Yes, a similar situation exists at Dorchester penitentiary where French speaking inmates form 23 per cent of the total inmate population.


FUNDS IN PUBLIC SERVICE SUPERANNUATION ACCOUNT
Mr. Knowles: 1.	What was the total amount of money in the Public Service Superannuation Account as at (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?
2.	What rate of interest does the government pay for the use of this money?
3.	What amount of interest was credited to the Public Service Superannuation Account during the fiscal years ending (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?
4.	What was the total amount paid out of the Public Service Superannuation Fund during the fiscal years ending (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966?


Hon. Mitchell Sharp (Minister of Finance):: 1.	Balance in superannuation account as of
(a)	March 31, 1964, $1,856,407,622; (b) March 31, 1965, $2,161,828,358; (c) March 31, 1966, $2,390,383,091.

February 6, 1967
Questions
2.	Interest is credited to the superannuation account on the last day of each quarter in every fiscal year, calculated at the rate of 1 per cent of the balance to the credit of the account on the last day of the preceding quarter.
3.	Interest credited to the superannuation account during fiscal years ending (a) March 31, 1964, $71,756,270; (b) March 31, 1965, $78,715,785; (c) March 31, 1966, $89,499,085.
4.	Total amounts paid out of the superannuation account during the fiscal years ending (a) March 31, 1964, $56,807,908; (b) March 31, 1965, $64,160,629; (c) March 31, 1966, $69,906,914.


ACCEPTANCE OF SANITARY CODE BY RAILWAYS
Mr. Reid: With respect to the Department of National Health and Welfare's national sanitary code applicable to Canadian railways, has this code been accepted and implemented fully by all railroads in Canada and, if not, what parts of the code have not been implemented by what railways?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: The potable water regulations for common carriers which have been in effect under successive orders in council since 1923 are being implemented without significant difficulties. It is generally recognized that water and ice made available on common carriers for consumption by the public are safe and free from harmful bacteria and chemicals. From time to time, sanitary officers of the Department of National Health and Welfare detect deviations from the practices or equipment specified in the regulations. These are brought to the attention of the railway authorities and corrective action as prescribed by the department is carried out by them.
In 1966 a set of additional standards was developed by the Department of National Health and Welfare after consideration of the views of the Canadian Railway Association and representatives of employee organizations, and recommended for implementation. Implementation is proceeding as older equipment is being replaced by new, or as governed by negotiation between labour and management. It is anticipated that complete implementation will require a considerable time. No detailed inventory of progress is maintained in the Department of National Health and Welfare.


GREAT LAKES-LEGISLATION RESPECTING DISCHARGE OF WASTE
Mr. Tolmie: Is the government proposing to introduce legislation to control the increasing pollution problem in the great lakes arising from the discharge of human waste and garbage from commercial vessels now in use in the great lakes and those to be constructed in the future?


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, the answer to this question is yes. When the legislative timetable permits, the government intends to introduce an amendment to the Canadian Shipping Act to authorize regulations to be made respecting the discharge of sewage and garbage from ships.


KEEPER OF SANDFORD LIGHT, YARMOUTH COUNTY, N.S.
Mr. Bower: 1.	Has there been a change in the keeper of the Sandford light, Yarmouth co., Nova Scotia?
2.	If so, how long had the incumbent held the post, what were the reasons for his dismissal and how long had the reasons for his dismissal obtained?
3.	Has a new keeper been named?
4.	If so, will the new incumbent be unimpeded during the day from attending the light because of his customary activities?


Mr. J. A. Byrne (Parliameniary Secreiary io Minister of Transport):: 1. Yes.
2.	Since November 1, 1964. Report received that the light was left unattended and that the incumbent who was a part time keeper receiving an annual fee of $480 was also employed full time by the provincial government. Investigation confirmed that he had been so employed as sign painter by the province for the past 10 years.
3.	Yes.
4.	Yes. The new incumbent has agreed personally to attend the operation of the fog horn at the lighthouse during the day.


CONVENTIONS OF COMPANY OF YOUNG CANADIANS
[Stage Direction]
Question No. 2,451 (Correction)-Mr. Hales:
1.	How many general meetings or conventions has the Company of Young Canadians held since incorporation?
2.	Where were they held?
3.	How many people attended each convention?
4.	What were the hotel or accommodation charges for each convention, including telephone, room service, etc.?
February 6, 1967
[Stage Direction]
5.	What were the transportation charges for each convention?
6.	Is there a report available for each convention and, if so, from whom?
7.	Who are the auditors for the Company of Young Canadians and what yearly audit fees have been paid?
Mr. John R. Maiheson (Parliamentary Secretary to Prime Minister):: I am informed by the Company of Young Canadians as follows: 1. Apart from staff meetings, meetings of the provisional council and the two training programs, the company has held one general meeting since incorporation.
2.	This meeting was a regrouping of volunteers already in the field, and was held at Orillia, Ontario, from October 29 to November 5. The purpose of the meeting was to provide new training and orientation information to the company's volunteers, to provide those volunteers with an opportunity to discuss common field problems, and to assist the company develop plans for its third training program based on actual field experiences. Other volunteer regroupings are planned on a regional basis. No further centralized regroupings are planned.
3.	69
4.
Food and accommodation	$3,930.79
Telephone charges	226.78
Other charges	Nil
5.	Transportation charges
Council members	$ 112.00
Volunteers	4,117.20
Staff	180.00
Consultants	329.00

6.	No report is being published but a record of the sessions of the Orillia meeting was kept by the staff. The executive director reported on the regrouping to the provisional council.
7.	The Auditor General. No fees are charged.


SUPPLEMENTARY WORKS PROGRAM, CAPE BRETON HIGHLANDS PARK
Mr. Muir (Cape Breton: North and Victoria):
1.	On what date was the supplementary works program announced for the Cape Breton Highlands national park, Nova Scotia?
2.	Was such an announcement made by the Minister of Indian Affairs and Northern Development, by the Minister of Labour, and if by neither, who made such announcement?
Questions
3.	How much money was allotted for the aforementioned program and what projects are to be undertaken at the Cape Breton Highlands national
park? .
4.	How many men have been hired since the announcement of the supplementary works program, and how many men were employed immediately preceding the announcement of the program?
5.	What is the dollar value of the announced program to be expended in the Victoria county area of the Cape Breton Highlands national park?
6.	Of those hired since the program was announced (a) how many are veterans (b) how many are from the following areas: Ingonish, Ingonish Beach, Bay St. Lawrence, Ingonish North, Neil's Harbour, Dingwall?
7.	How many men have been employed on the supplementary works program (a) from Inverness county, Nova Scotia (b) from Victoria county?


Hon. Arihur Laing (Minister of Indian Affairs and Northern Development):: 1. The
supplementary works program was announced on November 25, 1966.
2.	Hon. A. J. MacEachen, Minister of National Health and Welfare, made the announcement.
3.	$100,000 was allotted for the program. Projects are as follows: (a) Black Brook campground-day-use area, (b) Sanitation cutting, (c) Broad Cove campground expansion. (d) Construction of picnic tables, (e) Foot bridge-Warren Lake, (f) Maintenance supervisor's office-lunch-room Ingonish. (g) Installation of portable washroom at Ingonish beach, (h) Improvement to golf course, (i) Boundary line clearing, (j) Scaling slide areas -North and French mountains, (k) Hiking trail construction-Cheticamp and Fishing Cove. (1) Renovation-carpenter shop-Cheticamp. (m) Replace bridge-Robert Brook.
4.	Ninety-nine men have been hired since the program was announced. No casual employees on payroll prior to program announcement. Only 39 operation and maintenance employees were on payroll before program commencement.
5.	Project allocation-Victoria county, $52,900.
6.	(a) Veterans with overseas service: (i) Victoria county, 8 men; (ii) Inverness county, 2 men. Veterans with no overseas service: (i) Victoria county, 4 men, (ii) Inverness county, 4 men. (b) Ingonish, 9 men; Ingonish Beach, 15 men; Ingonish North, 0; Neil's Harbour, New Haven, 7 men; Dingwall, 0; Bay St. Lawrence, 2 men.
7.	(a) Inverness county, 50 men; (b) Victoria county, 49 men.

February 6, 1967
Questions


FEDERAL EXPENDITURES ON RETRAINING PROGRAMS, MANITOBA
Mr. Schreyer: 1.	What is the federal cost share of each of the classes or courses presently operating under program 5 of the T.V.T. agreement wiith the province of Manitoba?
2.	Of the above amounts, how much is spent on operational costs and how much on allowances?
3.	How many in plant or in service special training programs have been conducted either jointly with the province of Manitoba or with particular industries concerned in that province during 1966?
4.	With respect to part 3 above, how much was the federal expenditure in each of these programs for (a) equipment rental (b) space rental (c) instruction id) living allowances for those enrolled?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: 1.	The federal share of operational costs for program 5 courses is 75 per cent. The federal government also shares in allowances paid to trainees at the following rates: (a) 100 per cent of a basic $35 per week training allow ance; (b) 90 per cent of supplementary allowances up to a maximum of $55 per week per trainee.
2.	Federal payments to the province of Manitoba toward the costs of program 5 courses, April 1, 1966 to January 15, 1967 were: (a) Operational expenses, $400,021; (b) Allowances to trainees, $933,368.
3.	There were 47 in plant training projects initiated in Manitoba during the current fiscal year.
4.	The federal expenditure toward in plant
training projects in Manitoba, April 1, 1966 to January 15, 1967 were: (a) Equipment rental, approximately, $30,000.	(b) Space
rental, approximately, $3,000. (c) Instructional costs, approximately, $85,000. (d) The amount of the federal payments for allowances are not available because claims based upon the total attendance are not submitted until a course is completed.


CENTENNIAL TRAIN
Mr. Allard: With regard to the centennial train (a) who built it (b) how much did it cost (c) who paid for the building of this train (d) who pays for its maintenance and use (e) what will be the approximate cost of its maintenance and use during the centennial year (f) with regard to the staff, how many Canadians are there whose mother tongue is French and how many whose mother tongue is English (g) among the employees responsible for welcoming visitors (i) how many employees regard French as their mother tongue and how many employees regard English as their mother tongue (ii) what is the number of bilingual 
employees (h) are employees appointed to be responsible for welcoming visitors required to be bilingual and, if not, for what reason (i) would the government agree to recommend that all employees appointed to be responsible for welcoming visitors should be bilingual (j) where and how were each of the employees for the centennial train selected (k) after the centennial tour has been completed, what will be done with this train?


Hon. Judy V. LaMarsh (Secreiary of State):: (a) The Confederation Train made up of fifteen (15) cars was constructed by the Canadian Pacific and the Canadian National Railways and the contents of the six (6) exhibit coaches were built and installed by Design Craft Ltd., Toronto.
(b)	The total cost of the train, including purchase and rental of equipment, design and installation of exhibits, equipment modification is $1,438,252.
(c)	The Centennial Commission paid for the construction of the Confederation Train.
(d)	The Centennial Commission is responsible for paying the cost involved in the maintenance of the train during 1967.
(e)	Operating costs during the period January 2 to December 5, 1967 are estimated at $1,347,488.
(f)	Of twenty-five (25) Commission personnel, excluding members of the R.C.M.P., on the Confederation Train staff, twelve (12) have French while thirteen (13) have English as their mother tongue. The manager of the train is bilingual.
(g)	(i) Nineteen (19) members of the train staff deal directly with the public. Eleven (11) have French while eight (8) have English as their mother tongue.
(ii) The number of bilingual members on the train staff is twelve (12).
(h)	The Centennial Commission's policy in recruiting the crew of the train was to represent insofar as possible every province and territory of Canada. The emphasis, because of need, was placed on ability in both English and French. However, the employees from Prince Edward Island, Newfoundland, Yukon Territories and British Columbia are unilingual English. The French speaking population in these areas did not produce candidates. Of four (4) recruits from Ontario, two (2) are bilingual.
The proportion of bilingual personnel is sufficiently high, in the view of the Centennial Commission, to ensure adequate service to visitors in both official languages.
(i)	See reply to (h) above.
February 6, 1967

(j)	The employees for the train were selected from applications received after a nationwide advertising campaign was conducted by the Department of Manpower and Immigration, and through application directly to the Centennial Commission.
The personnel division, using a three-man review board and the merit principle, either set up boards in the nearest centre to the applicant's residence, or in some cases of managerial level, brought the applicant to headquarters to appear before the three-man board.
(k)	The eventual disposal of the Confederation Train is under discussion at present but no recommendation has yet been made by the Centennial Commission.


APPLICATION OF EASTERN TIME ZONE TO MARITIME PROVINCES
Mr. Fairweather: Has any consideration recently been given to the possibility of the maritime provinces of Canada, or some of them, becoming part of the eastern time zone?


Mr. Jack Davis (Parliamentary Secretary to Minister of Energy, Mines and Resources):: No consideration has been given by the Department of Energy, Mines and Resources to the possibility of the maritime provinces of Canada, or some of them, becoming part of the eastern time zone.
The time service section at the Dominion Observatory, though charged by order in council P.C. 6784 dated August 28, 1941, as the custodian of correct time for official purposes in Canada, has no authority for the definition or regulation of time zone boundaries and there is no federal regulatory body or office in Canada to review and revise time zone boundaries.
Each province has legislation regulating the time being observed within provincial boundaries. From time to time these regulations are modified to accommodate the wish of a community near the zone boundary to adopt the time and the adjacent zone.


TENDERS FOR MAIL COLLECTION, QUEBEC
Mr. Ricard: 1.	From what date has Transol Inc., 500 Grande A lice East, Quebec, held the contract for collecting mail from letter boxes in the city of Quebec and the suburbs?
2.	Had any calls been made for tenders?
3.	If so, give the names of those who submitted tenders and the amount of each tender.
4.	For how many years will this contract remain in force?
12673
Questions


Hon. Jean-Pierre Cote (Postmaster General):: 1. From November 21, 1966, Transol Inc. has held a "Combined Urban Service" contract which includes collection of street letter boxes, delivery of parcel post items and delivery of special delivery items.
2.	Yes.
3.	Transol Inc., 124 St. Pierre St., Quebec, 15.8 cents per item; Frangois Nolin, Box 10, 131-7th St., Limoilou, Quebec 3, 17 cents per item; Federal Delivery Inc., 842 Moreau St., Ste-Foy, Quebec 10, 17.5 cents per item; Transport Frontenac Ltd., 256 St. Paul St., Quebec 2, 21.4 cents per item; Jean-Paul Pichette, 1995-4th Ave., Quebec, 21.5 cents per item.
4.	Four years.


POST OFFICE HOUSEHOLDER DIRECTORY
Mr. Mandziuk: 1.	How often is the householder directory of each federal electoral district brought up to date?
2.	Is each postmaster responsible for the correctness of the list of patrons?
3.	Is the postmaster's salary based on the number of patrons at his post office?


Joseph Julien Jean-Pierre Côté: 1. Annually.
2.	Yes.
3.	No.


ADVERTISING OF OLD AGE SECURITY SUPPLEMENT
[Stage Direction]
Question No. 2,497
Mr. Irvine:: 1.	What was the total cost of advertising or acquainting the public with the terms of the supplement to old age security since the passage of Bin C-251?
2.	How many newspapers were used (a) dailies
(b) weeklies?
3.	What other news media were used and what was the expenditure in each case?


Allan Joseph MacEachen: 1. It is estimated that the cost of the advertising campaign in progress to acquaint the public with the terms of the guaranteed income supplement to old age security will be $380,000. To date, no invoice has been received and no payment made.
2.	To date use has been made of 105 dailies and 273 weeklies.
3.	None to date. Arrangements are being made to use radio, television, booklets and informational inserts with old age security cheques.

February 6, 1967
Questions


COST OF TELEVISION INTERVIEW WITH VON THADDEN
Mr. Diefenbaker: How much did the C.B.C. expend In securing the
interview on the program "Sunday" of the 22nd of January with Adolph von Thadden (a) for payment of crew and interviewers (b) telephone and telegraph messages (c) for a honorarium or payment to von Thadden (d) total other expenditures, not Including the foregoing?


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I am informed by the C.B.C. that approximately $3,000 was the cost of the European assignment for a four man team which included camera fees, travel and equipment expenses. Approximately $300 was spent on telephone and telegraph messages, and $960 for film stock, processing and editing. It has not been the custom of parliament to ask that the C.B.C. disclose honoraria or payments made to individuals.


ROYAL PROCLAMATION RESPECTING NATIONAL FLAG
Mr. Macquarrie: 1.	How many copies of the reproduction of the royal proclamation of January 28, 1965, respecting the national flag of Canada were produced by the Queen's Printer?
2.	How many requests for copies have been received from (a) Individuals (b) organizations in each of the provinces of Canada?


Julia Verlyn (Judy) LaMarsh: 
PRODUCE OF EXPERIMENTAL FARM, MORDEN, MAN.
Mr. Douglas: 1.	What was the total quantity of (a) fruits, and (b) vegetables, produced at the dominion experimental farm, Morden, Manitoba, in each of the years 1965 and 1966?
2.	In what way were the (a) fruits, and (b) vegetables, disposed of?
3.	If all, or part, of the (a) fruits, and (b) vegetables were destroyed, what was the reason for their destruction?


Hon. J. J. Greene (Minister of Agriculture):: 1. No estimates are available because total yields were not measured for the bulk of experimental material. Yields were calculated

from harvesting representative samples of crops.
2.	Samples were picked, processed, or stored for experimental use. Some material went to the Morden hospital and charitable organizations. The remainder was not harvested.
3.	In any hybridization program, many thousands of plants are produced from which the outstanding specimens are selected and it is normal procedure to discard much of the remainder. It is too costly to gather and sort edible or marketable produce from diseased, overripe, and inferior material.


TRADE MISSIONS IN CONJUNCTION WITH EXPO '67
Mr. Reid: Are there any trade missions planned for 1967 in conjunction with Expo '67?


Mr. Jean-Charles Caniin (Parliamentary Secretary to Minister of Trade and Commerce):: Yes. The trade missions program of the Department of Trade and Commerce is highlighting Expo '67 by concentrating on incoming missions whose memberships will all have the opportunity to visit Expo '67 at the conclusion of their Canadian tours. Tentative plans anticipate about 20 incoming trade missions in the fiscal year commencing 1 April, 1967.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Stanbury: What action is being taken and is planned to implement the recommendations of the Economic Council of Canada, that Canada increase the export of end products?
Return tabled.


TOLLS COLLECTED, QUEBEC WHARVES
Mr. LeBlanc (Rimouski): For each of the past five years, what were the gross and net totals for tolls collected at each of the following wharves:	Riviere-du-Loup (main
wharf), Riviere-du-Loup (river wharf), Rimouski East, Pointe-au-Pere, Matane, Trois-Pistoles, Cap Chat, Ste-Flavie, Ste-Anne des Monts, Mont-Louis, Marsoui, Gaspe, Sandy Beach, Chandler, Forestville, Baie Comeau, Sept-iles, Havre St-Pierre, province of Quebec, plus Bathurst and Dalhousie, province of New Brunswick?
Return tabled.
February 6, 1967	COMMONS


WINTER WORKS, PONTIAC AND TEMISKAMING COUNTIES, QUEBEC
Mr. Lefebvre: 1.	What projects have been approved this winter under the winter works program in (a) the county of Pontiac (b) the county of Temiskaming, and how large are they?
2.	What was the total sum paid to each municipality, taken individually in (a) the county of Pontiac (b) the county of Temiskaming, under last year's program?
3.	Have all the municipalities in these two counties received payment for winter works completed last year?
Return tabled.


MARITIME UNIONS BOARD OF TRUSTEES
Mr. Herridge: 1.	What was the total amount of the indemnity received to December 31, 1966, by each trustee of the board of trustees of the maritime transportation unions since the board was established?
2.	What amount did each receive for expenses since the board was established up to December 31 1966?
3.	How many persons have been employed by the board of trustees of the maritime transportation unions since it was established up to December 31, 1966, and what is the amount of salaries and expenses received by each employee to December 31 1966?
4.	What is the total amount of other expenses
incurred by the board of trustees of the maritime transportation unions from the date the board was established until December 31, 1966?
Return tabled.
[DOT] (2:40 p.m.)



FINANCE


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I rise for the purpose of moving the adjournment of the house in accordance with standing order 26 to discuss a matter of urgent public importance, namely the startling disclosures made by the president of the Bank of Western Canada to the effect that:
(a)	the directors of the British International Finance (Canada) Limited and Wellington Financial Corporation Limited, now the York-Lambton Financial Corporation, and/or subsidiary corporations have endeavoured to attempt to get credit from the Bank of Western Canada;
(b)	that the said company or its subsidiaries are engaged in a borrowing operation with
Bank of Western Canada United States banks which involves the giving of an option of 10 per cent of the total shares of the Bank of Western Canada and various arrangements designed to tie the management and operations of the bank to the operations of these United States banks, again contrary to statements made when applying for a charter, which disclosures indicate that the applicants for charter for the said bank, in making their presentation to the committee of the House of Commons on finance, trade and economic affairs, misled the committee and the House of Commons, in contempt of parliament.
I move that motion, Mr. Speaker, seconded by the hon. member for Perth (Mr. Monteith).


Mr. Speaker:: Would the Leader of the Opposition address the Chair on the question of urgency of debate at this time.


John George Diefenbaker: Mr. Speaker, I am not going into the detail of the allegations made over the week end by the president of the Bank of Western Canada, except to say that his allegations charged that the intent of the legislation granting a charter to the bank, with the express proviso of the Treasury Board granting exemption from certain clauses of the legislation, has been infringed by the controlling organization, British International Finance, in a way to countermand the wishes and intent of parliament.
When the rights and privileges of parliament have been contravened and a prima facie case has been made out, no other matter can take primacy in this House of Commons. In other words the rights and privileges of parliament cannot be shamelessly treated or contemptuously disregarded. Whenever that takes place the urgency thereof is second to no other field or area of legislative responsibility in parliament.
It might be said that the budget debate will be commencing soon and that therefore this matter can be discussed at that time. It is difficult enough to get answers in parliament at any time during debate; how much more difficult in a matter such as this. I would hope the government would immediately agree to the adjournment of the house, to the end that the basic foundations upon which our financial institutions stand, namely integrity and honesty in the presentation of grounds for incorporation, are in no way undermined.
This is a specific issue, Mr. Speaker, dealing with the conditions under which a charter was granted by parliament and expanded by Treasury Board in its decision to exempt this
12676	COMMONS
Bank of Western Canada particular bank from the provisions forbidding concentration of ownership in a proportion greater than 10 per cent. The exemption was granted, one of the conditions being that there would not be financial intercourse between the Bank of Western Canada and the controlling companies with the bank being in the position of a lender. According to the president of the Bank of Western Canada this provision, by a species of financial wizardry, has been swept aside and abrogated.
[DOT] (2:50 p.m.)
Indeed, what can be more urgent than the president's statement to the effect that there had been an attempt to breach the conditions set down by Treasury Board, in other words a deliberate, intentional and indeed planned flouting of undertakings given again and again to parliament in the committee-and I have the various quotations here-to the effect that the Bank of Western Canada would not under any circumstances become a kind of milch cow for the Stevens group. Yet that is one of the things the president says is being attempted.
If the facts alleged by the president of the bank are true we have an issue that goes to the heart of parliament's rights. Parliament must go into the financial operations of this group, the Stevens group from Toronto, and British International Finance Corporation. It must look into the power that has been accumulated over six years when less than $300,000 of capital, by reason of interlocking directorates and other manipulations, has given two or three men control over $130 million of capital in various corporations, the Wellington Bank, York-Lambton Financial Corporation, York Trust, Canada First Mortgage, and so on.
These are matters that cannot be dealt with in a budget debate. We cannot get answers. I was away for a few days during the recent debate on unification. On reading the reports I find I missed nothing in the way of information. The minister gave no information at all.
We want to guard against that. We ask for the opportunity of debate, to learn whether the allegations are correct and to put an end to the kind of financial operation exemplified by Mr. Stevens saying that the president of the Bank of Western Canada had only a $7,600 interest in these corporations. What business had Mr. Stevens to say that? That type of arrogance deserves to be looked into. Parliament has the right to investigate this matter. Every hour of delay leaves open the
[Mr. Diefenbaker.l
DEBATES	February 6, 1967
door for further important financial repercussions which affect the lives of Canadians. We do not want another financial mess on our hands such as we have had recently.
There has been too much nonchalance regarding these financial matters. I say they must be dealt with now. They require the fullest inquiry. We want to know from the government whether there was deception.
I have here the record of the evidence given in the committee. I say, on the basis of the evidence given by Mr. Stevens, what has taken place here is a flouting of the pledged word. The whole labyrinthine complex of the Stevens combine must be looked into. It cannot be done by questions. Questions have been asked all the way through. On December 1, 15 and 16 I endeavoured to secure from the minister or Prime Minister some indication of concern by this government regarding what was being done. On January 17 I again raised the matter with regard to the Treasury Board exemption. On January 18 the Minister of Finance tabled Treasury Board Order No. 658,534. The hon. member for Nanaimo-Cowichan-The Islands asked what was the meaning of the series of operations reported in the press, in December, having the effect of concentrating control in the hands of a few individuals. The minister promised to look into it, but a licence to operate was issued regardless.
This is a serious matter, something which cannot be glossed over. This is the first opportunity parliament has had to inquire into it. There is no other way in which we, on behalf of the Canadian people, can ensure that such experiences as Prudential Finance, insurance company bankruptcies and the like shall not become permanent features of the financial landscape. Nothing comes before the right of members of parliament to examine and crossexamine. They received an assurance that these things would not take place. Now the president of the bank resigns because he says that undertakings honestly given, as he says, have been contravened. We cannot shut our eyes to the revelations which have been made.


Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: As Your Honour is aware, I had prepared a motion to the same effect as that prepared by the Leader of the Opposition, though I must say at the outset that I had hoped a statement from the Minister of Finance would have obviated the necessity for presenting such motions. Indeed, I am
February 6, 1967	COMMONS
somewhat surprised that he did not seize the opportunity when it arose.
As to the matter of urgency of debate, I think really there can be no question about that. Here we have a situation in which, for the first time in many, many years, a chartered bank of Canada-and no matter how slightly the Bank of Western Canada has entered into the banking field it is now one of Canada's chartered banks-comes under the winds of suspicion. I suggest that unless the government is prepared to announce certain action to correct the situtation we may well create a lack of confidence in the whole banking structure, something which we in this country cannot afford.
Another argument in respect of urgency is that at this very moment we are in the process of carrying out the decennial revision of the Bank Act, which is now before the committee on finance and economic affairs. If something is to be done about this specific case something must also be done about the arrangements which were made under the Bank Act and certain provisions in the bill before us. I do not think this is a matter which can be left where it is in the absence of a declaration by the government of Canada clearly indicating that this is an occasion for serious concern, especially when it arises, as it does, after a number of events in the financial world which have badly shaken the confidence of the Canadian people. Also, I might say, the government's reluctance to assert its authority in some areas in which it is suggested there is no doubt about its provenance gives rise to a certain amount of misgiving and apprehension as to whether the government is fully seized of the nature of the events now revealed by the president of the Bank of Western Canada.
Before I close, may I say I think we should commend Mr. Coyne for his frankness in bringing this matter before the people of Canada. He may have been naive in his choice of business associates, but I suggest no member of this house and no member of the public has ever had any doubts about Mr. Coyne's honesty and integrity. I urge you to accept this motion, Mr. Speaker, so the people of Canada may be reassured with regard to the affairs of one of the chartered banks of Canada.


Mr. Speaker:: The Minister of Finance.


Mitchell William Sharp: Mr. Speaker-


Mr. Speaker:: I did not notice that the hon. member for Red Deer had risen. Perhaps the
Bank of Western Canada Minister of Finance would allow the hon. member for Red Deer to make his remarks before taking part in the debate.
[DOT] (3:00 p.m.)


Mr. R. N. Thompson (Red Deer):: Thank you, Mr. Speaker. My remarks will be very-brief. With regard to the importance of the topic which has been raised at this time, in my opinion there can be no doubt that a trust has been violated so far as this house is concerned, and to have something like this come up at a time when we are considering the over-all banking picture is certainly very disturbing. I believe it is in the national interest that it be dealt with as quickly as possible.
I join with the hon. member for Nanaimo-Cowichan-The Islands in saying that one would have thought the Minister of Finance would have taken the lead and made a statement on motions, because it was only to be expected that this important matter would be raised today.
Notwithstanding the fact that the committee on finance, trade and economic affairs is currently meeting and the Minister of Finance is appearing before it as a witness, I believe the importance of this issue is such that it is imperative we debate it. Therefore, Mr. Speaker, as you are making your decision I trust you will have regard to this aspect of the matter, and I hope your decision will be in favour of the motion made by the right hon. Leader of the Opposition.


Mitchell William Sharp: Mr. Speaker, I think it is highly desirable that the charges made by Mr. Coyne should be investigated, but I doubt very much whether they can be successfully investigated on a motion to adjourn the house.
Mr. Coyne has made certain specific charges against his colleagues in the Bank of Western Canada. I believe those should be investigated. This morning I also received a message from Mr. Sinclair Stevens which I should like to read:
I am sorry I missed speaking with you at the Park Plaza yesterday and I was unable to contact you by telephone this morning but I wish to assure you that my associates and myself are more than willing to meet with you personally or to appear before any committee or other group that you may feel desirable to clarify or contradict statements which are attributed to Mr. Coyne in the press.
Sinclair Stevens.
I do believe it is highly desirable, Mr. Speaker, that both Mr. Coyne and Mr. Stevens should appear before the committee
February 6, 1967

Bank of Western Canada of this house on finance, trade and economic affairs, before which the original application for the charter of the Bank of Western Canada was heard and where Mr. Coyne, incidentally, would like to make some suggestions about further amendments to the Bank Act.
Personally I have no difficulty in dealing with the government's responsibility in this matter, but before I am asked to make a judgment, which I am required to make under the act, I would like to know what the issues are, and I do believe that we would better advance the business of the house and the business of the nation, in which we are all interested, if these charges and the reply of Mr. Stevens could be heard before the standing committee of the house which is charged at the moment with the amendments to the Bank Act.
Moreover, Mr. Speaker, if we just wanted to have a general discussion about this matter, there is ample scope in the budget debate.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, may I say a word on the matter of urgency. The Minister of Finance has argued that this matter should be investigated but that it can be more properly investigated by the standing committee on finance, trade and economic affairs, and that he would be quite prepared to make a statement to the house but it is necessary that he know what the charges are.
I want to suggest to Your Honour that the matter of urgency has not to do solely with the question of charges by Mr. Coyne. The matter of urgency has to do with the manner in which the Minister of Finance himself has been discharging his responsibilities. The commitments which were made by the Bank of Western Canada through the banking committee of the House of Commons prior to the bank's incorporation are one thing, but there is an agreement between the Treasury Board and the Bank of Western Canada, which arose out of the extension of the ownership clause to allow them to hold more than 50 per cent of the stock. That agreement was specific in setting out what the bank could not do. It could not make loans to the B.I.F. companies; it could not deposit money with those companies, that it could not guarantee any liability of that financial group or purchase any assets from that financial complex.
It seems to me the house has a right to a statement from the minister as to whether this agreement has been complied with,

whether any of the provisions of this agreement have been violated or circumvented. It is not now a matter of the charges of Mr. Coyne versus Mr. Sinclair Stevens. The question at the moment is whether the Minister of Finance, who is the watchdog for parliament and the Canadian people with respect to the operations of this bank, has been doing his duty, and whether he can assure this parliament that the bank has complied fully with the agreement.
If he cannot tell us that, then we are in a bad way. If there has been no investigation, or if there has been no supervision, then certainly we are in a bad way. Surely we do not have to depend on Mr. Coyne and Mr. Stevens to tell the house whether an agreement, entered into between a chartered bank and the Canadian Treasury Board, has been lived up to in every detail. It seems to me this is a matter which makes it most urgent that the subject be discussed.
There is also the matter of the bank itself to be considered, and public confidence in it. This will not be cleared up until the Minister of Finance has given us the kind of assurance that I have suggested he ought to be able to give us at this time.


Mitchell William Sharp: Mr. Speaker, not in the interests of prolonging this debate but because of the effect of these statements upon public confidence, may I be permitted to extend the few remarks I made? I was trying to avoid dealing with questions of substance-


Mr. Speaker:: Order. I suggest to hon. members that if we were to give effect to the suggestion now made by the Minister of Finance we would effectively get into the debate itself. I am sure that to some extent, to some considerable extent, we have gone beyond the very limited question of urgency of debate to which we should normally be restricted by virtue of the standing order itself, as dealt with in citation 100 of Beauchesne. The decision I have to make at the moment is on whether there is urgency of debate.
I refer hon. members to citation 100(3) in Beauchesne's fourth edition:
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate", when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough and public interest demands that discussion take place immediately.
I am in full agreement with the submissions made by the right hon. Leader of the Opposition, the hon. member for Nanaimo-Cowichan-The Islands and the other hon.
February 6, 1967	COMMONS
members that this is a matter of urgency, but the house is in a position where, within an hour or so, we will revert to consideration of the budget.
A suggestion was made by the Leader of the Opposition that it might be easier for the opposition to obtain information and the views of the government if the debate on this important matter were held under the terms of standing order 26 rather than in the course of the discussion on the budget, but I cannot agree with this suggestion. It seems to me that the only difference between one debate and the other is that speeches during the budget debate are limited to 30 minutes, and speeches in a debate under standing order 26 could be for 40 minutes. That is the only procedural distinction I can see between the two types of debate.
Hon. members will have an opportunity to make their statements later on this afternoon and in the course of the evening, and for all intents and purposes I would think we would achieve the same objectives during the budget debate as those which are sought at the present time by the mover of the motion, the right hon. Leader of the Opposition.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. I wish to ask him whether he would elaborate, for the benefit of parliament, on the statement he is reported to have made over the week end to a group of students to the effect that Canada, if requested, would send medical supplies to North Viet Nam. I should like to ask him how this statement fits in with the minister's oft repeated declaration that North Viet Nam is in fact the aggressor and must be dealt with as such.


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, as I said in answer to the students, and as I had said in answer to another question a few days ago in the city of Ottawa, there has been no request for medical supplies for North Viet Nam by the government of North Viet Nam. Any assistance given by Canada under its external aid program is in pursuance of a request from a government. If a request came from the government of North Viet Nam it would be examined in the light of the over-all picture.
Inquiries of the Ministry That is what I said on Friday and that is as far as I can go. If such a demand does come it will be examined by the government in the light of all the circumstances.


John George Diefenbaker: Mr. Speaker, I can make
no observation on that factual statement, but I should like to ask the hon. gentleman whether he is in a position to advise us whether anything in the nature of authentic peace feelers have come to Canada from North Viet Nam within the last five days; and has the minister, the Prime Minister or either of them been in touch with Washington suggesting that as a preliminary to hopeful or fruitful negotiations a cessation of the bombing should take place at once?


Paul Joseph James Martin: Mr. Speaker, the Canadian representative on the Viet Nam international control commission is now in Ottawa. He has been reporting to the government. He was in Hanoi on January 6 and remained there for a period of eight days. We have been in consultation with the government of the United States as well as other governments, but I am sure my right hon. friend will appreciate that, if efforts in this area are to succeed, what is desirable now is that there should be careful consultation conducted within the context of confidential discussions, until such time as it is possible to take a more public position.


John George Diefenbaker: Mr. Speaker, I have one other question for the minister. Is he in a position to deny the suggestion which appeared in the press that because Mr. Ronning has dared to speak out, he is going to be required to cease his efforts on behalf of Canada in relation to North Viet Nam?


Paul Joseph James Martin: There is no basis whatsoever for the suggestion that because Mr. Ronning has exercised the rights of a free citizen he should not be used, as he was constructively used for the two visits he made to Hanoi on behalf of the Canadian government.


Mr. R. W. Prittie (Burnaby-Richmond):: have a supplementary question, Mr. Speaker. It is supplementary to the first question asked by the leader of the official opposition. I wonder whether either the Prime Minister or the Secretary of State for External Affairs is in a position today to report to the house about the request from the Quakers for medical aid; not a request from the government, but a request from the Quakers.
February 6, 1967

Inquiries of the Ministry Right Hon. L. B. Pearson (Prime Minister):
A reply to that question is going out this afternoon and should be in the hands of those who made the request tomorrow. I would prefer to make known the nature of the reply after they have received the answer. I expect to be able to make a short statement on the matter tomorrow.


Mr.  R. Gordon L. Fairweather@Royal: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Is it expected that Mr. Chester Ronning will use the same channels in his contacts with North Viet Nam?


Paul Joseph James Martin: The channel which Mr. Ronning established successfully on the two occasions in March and June of 1966 continues to be open. We have had confirmation of this fact and the government has stated, through me and through the Prime Minister, that we are prepared to use this channel when we are satisfied that there is the slightest reason for it being used again. In the meantime our representative on the commission has been to Hanoi, as I said, on January 6. One of our military officers will be in Hanoi next week. There will be continuous contact with the government of the north. This is known to the government of the north. We are disposed to do anything we possibly can in this situation if the opportunity presents itself.


Mr. David MacDonald (Prince):: May I ask
a supplementary question, Mr. Speaker. My question is in the form of a suggestion to the Prime Minister. For some days now, or some weeks, there has been considerable discussion and interest both in the house and in the country with regard to the rapid developments in Viet Nam. I wonder whether the Prime Minister would consider giving directions for the calling of the committee on external affairs so it could hear key witnesses on this subject particularly the people we have had in Viet Nam over the past year. I think this is important especially with the discussions presently going on with the United States.


Lester Bowles Pearson: I think this might be useful. I understand from the Secretary of State for External Affairs that some arrangements are being considered in this regard at the present time.


HIGHWAY SAFETY
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kooienay West):: Mr. Speaker, I wish to address a question to the hon. and gallant Minister of Industry. I might say, Mr. Speaker, that I have been waiting for 52 years to ask a question in the hope of putting a brigadier on the spot. In view of a Washington report to the effect that a safety consultant has resigned his government post because he cannot in good conscience accept the government's safety standards, as they will not contribute effectively to safety since they are totally inadequate; and as we have a tendency in Canada to follow United States action in this regard, can the minister assure the house that Canada's auto standards when announced will be totally adequate and contribute effectively to safety?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, in reply to my equally hon. and gallant colleague in the house, I regret that he has not chosen the right opportunity to put a former army colleague on the spot. The resignation which has taken place reflects a difference of opinion between Dr. Haddon and one of his advisers. As the hon. gentleman knows, I think, all these questions of additional safety measures for automobiles represent a compromise between practicability and the desirability of assuring a maximum of safety. These are matters of judgment, and as you know judgments are not always the same. I can assure the hon. gentleman, however, that in this country we will have the safety of the public as our foremost preoccupation.


HOUSING
[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I would like to direct a question to the Minister of Labour.
Can the minister tell us if the Central Mortgage and Housing Corporation has agreed to finance the purchase of prefab houses which the Aluminum Company of Canada is planning to build in Canada? Can he tell us also if studies were made to establish if those houses meet present housing standards in Canada?
February 6, 1967	COMMONS


Mr. Speaker:: The hon. member will no doubt allow me to tell him that his question is of a very general nature and not so urgent that it cannot be put on the order paper.


FINANCE
[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Mr. Speaker, my question is directed to the Minister of Finance. I wonder whether the minister would inform the house when he expects the commission report on taxation to be tabled?


Mitchell William Sharp: Mr. Speaker, I hesitate to give a date until I am absolutely sure of it. I am not yet absolutely sure.


BANK OF WESTERN CANADA-LOANS TO PREFERRED SHAREHOLDERS
[Stage Direction]
On the orders of the day:
Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I have a question for the Minister of Finance. Has the Bank of Western Canada or any of its shareholders asked the minister to permit the bank to make loans to any of its preferred shareholders in accordance with the terms of the order in council of August 3, 1966, which I believe is No. 658-530?


Mitchell William Sharp: Mr. Speaker, the answer to that question is no. The terms of this order prohibit the Bank of Western Canada directly or indirectly making any of its funds available to any of the preferred shareholders without the prior approval of the Minister of Finance.
I want to say two things. First of all, no one has asked me as Minister of Finance to give my approval. Second, I have made it clear to the people concerned that if I was asked for any such approval it would be given only under the most exceptional circumstances, because the terms of that order are intended to separate the financial operations of the Bank of Western Canada and those of its shareholders.


Colin Cameron: Mr. Speaker, I have a supplementary question for the Minister of Finance. Could I ask the minister whether, in the light of the circumstances referred to by the hon. member for Hamilton West to which
Inquiries of the Ministry the minister just replied, he has been in contact with the chairman of the committee on finance and economic affairs to arrange for the two gentlemen, Mr. Coyne and Mr. Sinclair Stevens, to appear before the committee, which according to their statements they both wish to do?


Mitchell William Sharp: Mr. Speaker, I have had a brief conversation with the chairman. I would not like to commit him but I think he would welcome this provided that it did not prolong unduly the discussion of the provisions of the Bank Act.


Hon. J. W. Monteith (Perth):: Mr. Speaker, the minister mentioned a moment ago a communication he had received from Mr. Stevens. Has he had any communication whatsoever with the president of the Bank of Western Canada since late last week?


Mitchell William Sharp: No, Mr. Speaker, I have not had any communication with Mr. Coyne since the time he made his statement. I did have a telephone conversation with him in which he told me that he was going to make a statement. He did not tell me the nature of the statement, but he gave me advance warning that one was going to be made.


John George Diefenbaker: A supplementary question, Mr. Speaker. The minister has said that he informed certain individuals that if such an application was made, namely to have loans from the Bank of Western Canada to this great complex of financial monopoly, it would not be granted excepting under stringent rules, as I understood him. Who were these people with whom he communicated? When did he communicate this view to them? Was it before or after the president of the Bank of Western Canada made his statement to the press?


Mitchell William Sharp: Until the president of the Bank of Canada, Mr. Coyne, made his statement I was unaware of this issue. The order speaks for itself. The order says this bank shall not have financial dealings of the kinds outlined in the order with its preferred shareholders. This is the law. As far as I am concerned the law is going to be enforced. The only question that arises is the circumstances under which I might give prior approval to something that would otherwise be prohibited. I have said in this house that there would have to be very exceptional circumstances for me to give that approval. I have had no application from anyone asking me to exercise this discretion.
February 6, 1967

Inquiries of the Ministry


John George Diefenbaker: That answer does not cover the situation at all. The treasury order says it shall not take place except under the exercise by the minister of a discretion, which he says will be restricted to the limit. In all the circumstances revealed by the president of the bank, is not the minister prepared to say that in this case it is not going to be granted?


Mitchell William Sharp: Mr. Speaker, I am sure the right hon. gentleman would not want me to make any such statement, or expect me to do so.


John George Diefenbaker: I do.


Mitchell William Sharp: The law says there shall be no such transactions except with the prior approval of the Minister of Finance, and we are not going to change that law. Because I do believe there may be very exceptional circumstances in which it might be in the interests of the public and in the interests of the shareholders for some sort of transaction to take place, I could not say in advance whether this would be so. But I make it quite clear again that this order was drawn and approved precisely for the purpose of preventing the sort of financial relations between the Bank of Western Canada and its shareholders that I believe should be prohibited.


John George Diefenbaker: Does the minister not agree that when evidence was given by the Stevens interests before the committee there was a specific undertaking that this would not be done, and that this vast complex of companies would not be able to get itself into the trough and borrow from the bank controlled to the extent of 51 per cent by the Stevens firms?


Mitchell William Sharp: I am not completely aware of what went on before the committee, but I do know that as Minister of Finance I would not have approved of an arrangement relating to the Bank of Western Canada unless those terms had been in the order; because I personally, and the government as a whole, believe that these kinds of transactions between the Bank of Western Canada and its preferred shareholders are not desirable.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to ask the minister a supplementary question. The minister has said that Mr. Coyne phoned him prior to the time Mr. Coyne made his public statement. I would ask the minister whether Mr. Coyne divulged to the minister the nature of the

statement he was about to make, and whether as a result of that information the minister took any steps to investigate if there was any danger of the terms of the agreement being violated or circumvented.


Mitchell William Sharp: Mr. Speaker, I thought I had just answered that question very clearly. I said Mr. Coyne did not divulge the terms of his announcement to me. Indeed, he said "I do not think you should know what I am going to say."


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker, so I may be quite clear about it. Am I to understand that Mr. Coyne merely phoned the Minister of Finance and said he was going to make a statement, but he was not going to tell him what it was?


Mr. Speaker:: Order, please. Hon. members will recognize that I have exercised a considerable degree of leniency with respect to the questions that have been asked on this very important and urgent matter, but I do not think the question period should be allowed to change into a series of questions in examination and cross-examination.


John George Diefenbaker: Would you allow one more question, Mr. Speaker?


Mr. Speaker:: One more question in crossexamination by the right hon. Leader of the Opposition.


John George Diefenbaker: Mr. Speaker, I thought all the sharks were in the ocean off Florida, but since I came back and read Mr. Coyne's statement I find that I was wrong. Will the minister answer the question I put to him a while ago, when he stated voluntarily that one or more of these people had communicated with him to ask what was the attitude of the government in regard to granting such a discriminatory right? Will he tell us who are the people who telephoned him in that connection suggesting that they would like to have his consent?


Mitchell William Sharp: No, Mr. Speaker, no one has asked me for prior approval of anything. I said that I had indicated to one or two people since Mr. Coyne made his statement that the terms of the order speak for themselves, that I was not going to give approval to transactions of the kind outlined here, and that it would require very exceptional circumstances for me to exercise my discretion. I said that in one case to Mr. Sinclair Stevens and in another to another member of the associated group.
February 6, 1967	COMMONS


John George Diefenbaker: Will the minister tell us who that other person was?


Mitchell William Sharp: I would have to refresh my memory, Mr. Speaker.


AGRICULTURE
[Stage Direction]
On the orders of the day:
Mr. S. J. Enns (Porlage-Neepawa):: Mr. Speaker, my question is directed to the Minister of Agriculture. I would like to ask him whether the government has received from either the premier of Manitoba or his minister of agriculture a formal request to call a national conference on agricultural policy centring on one basic theme, namely farm income.


John James Greene: Mr. Speaker, I believe a request was received from the province of Manitoba with respect to a national farm conference. I do not recall that it was to be specifically limited to farm income.


Siegfried John Enns: A supplementary question, Mr. Speaker. Do I take it from the answer of the minister that such a conference is being called or planned?


John James Greene: Mr. Speaker, I stated that the request had been received. The department officials are now considering the practicability of such a conference and whether it could have any useful results.


SHIPPING
[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, I should like to put a question to the Minister of Transport.
Since a few ships are now ice-bound on the St. Lawrence river between Sorel and Montreal and others are being delayed precisely because the river is closed to shipping, a situation which threatens to last several more days, can the minister tell us whether his department is making special efforts to open the St. Lawrence river so as to enable those ocean-going vessels to go through?


John Whitney Pickersgill: Mr. Speaker, I do not have any later
Inquiries of the Ministry information than what I read in the Gazette this morning to the effect that all the ships have been freed largely as a result of the efforts of the coastguard.


Gilles Grégoire: A supplementary question, Mr. Speaker. Is the minister suggesting-I am afraid I did not understand correctly-that all ice-bound vessels and all those unable to go through, can now proceed on the St. Lawrence as far as Montreal?


John Whitney Pickersgill: I said, sir, that I read that in the Gazette. I did not say I knew it of my own knowledge. I read the item just before I came into the house and I have not had time to make any check on it. However, I would imagine that since it appeared in the Gazette it is likely to be accurate.


Gilles Grégoire: On a point of order, Mr. Speaker.
Under the rules of this house, anyone seeking to put a question based on a newspaper item is immediately called to order and his question ruled unacceptable.
Now, here we have ministers quoting newspaper items to give information to members.
Mr. Speaker, I feel that this is out of order, that you have given your ruling on this point on several occasions and that the minister is not entitled to give-


Mr. Speaker:: Order.


Gilles Grégoire: -answers based on newspaper reports.


Mr. Speaker:: Order, order.


Mr. Thomas M. Bell (Saint John-Alberi):: supplementary question, Mr. Speaker. Will the minister inform the owners of these ships that the ports of Halifax and Saint John are open all the time, and that they will not have any trouble if they go there?


John Whitney Pickersgill: If they have any doubt about it I will certainly resolve that doubt.


Gilles Grégoire: A supplementary question, Mr. Speaker. Would the hon. minister make sure that it is the same for the port of Montreal?


John Whitney Pickersgill: That will depend on circumstances, Mr. Speaker.
February 6, 1967

Inquiries of the Ministry


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I wish to direct a question to the Minister of Industry following the question I asked him on Friday with regard to a meeting which the United Automobile Workers were trying to arrange with certain ministers to discuss the employment situation and factors arising out of the Canada-United States auto agreement. The minister said on Friday:
I have not been able to communicate with the Minister of Labour in this regard, but I have every expectation the matter will be satisfactorily resolved.
The matter to be resolved was to be discussed at a meeting which was to last half an hour, from 12.30 to one o'clock on Wednesday, and those concerned felt quite properly that half an hour would not begin to make it possible to look into this matter adequately. Has the minister been able to resolve this matter with the Minister of Labour and the Minister of Manpower and Immigration, who I believe are meeting the U.A.W. delegation?


Charles Mills (Bud) Drury: Mr. Speaker, I have not been able to speak to the Minister of Labour but I have seen the telegram which was addressed to him. Knowing my colleague the Minister of Labour, I am sure this matter will be resolved satisfactorily.


CONSIDERATION OF COLLECTIVE BARGAINING FOR EMPLOYEES OF PARLIAMENT
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. Has the government taken note of the recommendation contained in the sixth report of the joint committee on the public service of Canada to the effect that consideration should be given to the introducing of legislation to provide for collective bargaining for the employees of parliament similar to that which is to be provided to public servants generally? Is favourable consideration being given to this recommendation?


Hon. E. J. Benson (Minisier of National Revenue and President of the Treasury Board):: Mr. Speaker, perhaps I could answer
[Mr. Pickersgill.l
this question. I understand that the matter was considered by the committee dealing with the public service legislation, and of course the report of the committee will be given due consideration by the government.


CANADIAN CENTENNIAL
[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of National Defence based on representations from Kootenay West and Kootenay East. Can the minister inform the house why the Canadian armed forces tattoo "Red Train" will not appear in any place in the Kootenays, British Columbia, during centennial year?


Mr. Speaker:: Order, please. I do not think
this is the type of question which can be asked at this time.


AIR POLLUTION
[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, in view of the announcement made in Washington last Saturday relating to United States federal regulations for air pollution standards for cars, has the Minister of Industry carried out the undertaking which he made to the house a number of days ago? Has he got in touch with the automobile industry to make sure that the clean air package will be introduced in Canadian cars as standard equipment?


Charles Mills (Bud) Drury: Mr. Speaker, when this question was first asked I pointed out that the extent to which the so-called package is needed in Canada is currently under investigation by the Department of National Health and Welfare as this is a feature more related to air pollution than to auto safety. I am advised that the Department of National Health and Welfare have not yet concluded their studies.


William Heward Grafftey: A supplementary question, Mr. Speaker. Is there any doubt whatsoever on the part of the government that the air pollution problem is as severe in Canada as it is the United States?


Mr. Speaker:: Order, please.
February 6, 1967


TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. J. E. Pascoe (Moose Jaw-Lake Cenlre):: Mr. Speaker, I wish to direct my question to the Minister of Transport. I understand that the minister will be making a statement on February 15 regarding operations on the St. Lawrence seaway. Has he received letters from farm organizations expressing opposition to any increase in seaway tolls because of the higher cost which this would entail for grain shipments?


John Whitney Pickersgill: Mr. Speaker, this is the first time I have heard I am going to make a statement on February 15, so the rest of the question would not be relevant.


James Ernest Pascoe: Will the minister not be making a statement on February 15?


John Whitney Pickersgill: I have no such intention at present, but I might take it into my head to do so later.


THE BUDGET
[Stage Direction]
The house resumed, from Monday, December 19, consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Monteith.
Mr. David Lewis (York South):: Mr. Speaker, in resuming the budget debate which was adjourned some time ago I want to say that it is very difficult to say anything about the budget because in my opinion and that of my colleagues it was an entirely unnecessary exercise in which the Minister of Finance indulged last December. I think it was shameful of him to have attempted it, and I suggest it was a deliberate attempt on his part to frighten the Canadian people away from seeking increases in social welfare programs from now on with the threat that there would be an immediate and equivalent increase in taxes.
[DOT] (3:40 p.m.)
This becomes clear, Mr. Speaker, when we look at some of the statements which he made
The Budget-Mr. Lewis on December 19 when he introduced this so-called mini-budget. He said that he was introducing these taxes because it was necessary for the people of Canada to realize that every time they want any social expenditures, taxes for them must be found. At page 11332 of Hansard the minister is recorded as saying:
It is because we are in that position that tonight we are asking the Canadian public to accept increased taxes in order that we may distribute more to our old age pensioners with low incomes.
This was an inaccurate statement, Mr. Speaker. It was a deliberately misleading statement to the Canadian people. The minister had the funds and admitted that he had the funds to distribute more to our old age pensioners on low incomes. He admitted he had the funds until at least this coming spring when he would bring down the regular budget. I suggest his statement was a deliberate misrepresentation of the financial position.


Mr. Speaker:: Order. I am sure, knowing the hon. member for York South, he would not want to use words which are obviously unparliamentary. No hon. member can say in the House of Commons of Canada that a statement made by another hon. member is deliberately misleading.


David Lewis: I am sorry, Mr. Speaker; I will put it this way without casting the aspersion which my previous words contained. The effect of the statement was to give a false picture of the financial position of the old age security fund in that the minister's own tables showed there was enough money in it to take care of the old age pensioners under the supplementary payments bill without requiring further taxation. In fact, time and time again in his speech the minister seemed to me to be waving his admonitory forefinger at the people of Canada as if they were school children and telling them that if they ever wanted any more social welfare they must remember they would have to pay for it and pay for it immediately no matter what the circumstances may be.
There was no reason for the budget, Mr. Speaker. Indeed, the Minister of Finance said two things about the Canadian economy during his speech on December 19 which clearly emphasized the fact there was no reason for the budget. After reviewing the situation and the developments in the past three months, the minister is recorded as saying at page 11332 of Hansard:
Developments in the past three months, however, suggest to me that the undesirable acceleration of the demands upon our economy has moderated. There has been some economic readjustment taking

February 6, 1967
The Budget-Mr. Lewis place following the excessive rates of expansion that occurred earlier this year. The effects of a large number of strikes have also been appearing in the statistics. My judgment is that the economic expansion now taking place is more in line with the capability of our economy to grow steadily without inflation.
This was a clear statement that there was nothing in the development of the economy at that time that justified any action by him in withdrawing any part of the purchasing power of the Canadian people. Later in his speech he certainly emphasized two or three times that in December the economic situation could not be foretold, that he had to wait, if I remember correctly, for the situation to become clearer in the United States, that events were still in a state of development and it was impossible for him to make any definitive forecast about the economy in 1967.
What does that add up to, Mr. Speaker, except a statement to the house and to the country that in fact he did not have the information necesssary to take any fiscal measures which would be related to the economic requirements of Canada? This is what he said. So far as he was able to see, the economy had levelled off, economic expansion had slowed down and no action by him was necessary. I suggest to him that he was going around the mulberry bush. At one point he said we needed no action, at another point he said he was not in a position to take action, and at a third point he said he was taking "neutral action".
What does neutral action mean? As I listened to him and as I reread his speech, I wondered what he meant. It reminded me of some people who talk about equality and insist that some people are more equal than others. It seemed to me that his December budget was a little more neutral than others. It was intended to have no effect, but it is having a deleterious effect on the economy and particularly one part of it to which I shall refer in a moment.
I really listened to the minister with amazement and I read his speech with even greater amazement. It is clearly obvious that there were only two reasons for introducing the budget. The first one was that in September, perhaps out of genuine fear of what he called inflationary pressures, he undertook to introduce a mini-budget. When December came he found it really was not necessary, but he felt that he was committed to take an unnecessary and unwise step. The second reason I have already given. It seems to me the minister was deliberately setting out to slow

down social progress in Canada, to warn the Canadian people that from now on, so far as he and his colleagues are concerned, the progress of the Canadian people in regard to welfare would have to be slowed down because he said that we can no longer afford these vast payments. I say, Mr. Speaker, that this is a retrograde step, a regressive policy, an unjustified attitude in these modern times. He and I hope, as does everyone in Canada, that the Canadian economy will continue to expand. I say to him that it will be as unnecessary in the future as it has been unnecessary in the past to match welfare increases by precise increases in taxes. This is what his budget did.
I always hate even trying to be technical about these things, but it seems to me the budget was extremely illogical in another way. If the minister had come before parliament last spring and given an indication he intended to come before parliament this spring with the proposition that he must balance his budget in every way, then I could understand him attempting to balance the particular expenditures under the old age supplementary payments bill. I would not agree with him but I could understand it. However, in the same speech in which he insists he must increase taxes to raise precisely the amount it will cost to implement old age supplementary assistance payments, he also tells us the budgetary deficit is going to be greater than the amount he estimated last spring. This action, I suggest, emphasizes and underlines my suspicion that he sought to place the situation before the people of Canada in such a way as to make certain that from now on Canadians will be frightened to ask for improvement in the welfare of the young, the old or the ill because immediately they will be faced with an equal adjustment in their taxes.
[DOT] (3:50 p.m.)
I feel that this action is both unreasonable and undesirable. However, if the minister came to the conclusion that he needed a tax increase, we in this party, think that one half of the steps he took was correct. We disagree that there was any need at all for a tax increase, for the reasons I have tried to indicate. But if the minister determined that he was going to increase taxes he was certainly right in increasing the special income tax which is related to the old age security fund. As far as we are concerned the minister should have raised the ceiling even higher
February G, 1967

than he did if he wanted more money than this increase will provide.
A careful study of the minister's budget speech shows the following situation, which really condemns beyond words his increase in the sales tax. At page 11335 of Hansard appears Table 2 of his budget speech and, basing himself upon the table, the minister said, as reported in the first paragraph on page 11336.
It will be seen that with this increased maximum tax-
The increased maximum tax related to the old age security fund.

the requirements of the fund, to which the law directs our attention, are met until the end of the 1970-71 fiscal year, the first full year after the age reduction program is complete.
What reason then is there, Mr. Speaker, for any further tax? If, as the table at page 11335 of Hansard shows, the increase in income tax in connection with the old age security fund will place the fund in such a position that it will have the necessary money to meet the progressive reduction in the age of recipients as well as the additional payments under the old age supplementary payments bill for the next five years until 1970-71 what possible reason or justification can there be for an increase in another tax?
According to the minister's argument, which I reject, it was necessary for him to raise the additional funds by way of tax. Enough money was raised for five years by the simple increase of the maximum rate of the old age security tax from $120 to $240 a year. That, Mr. Speaker, gave him all he wanted from now till the first year the full program of age reduction is complete, sufficient. I repeat, not only for the $75 a month old age security pension but also, as the table clearly shows, for the additional payments that will have to be made under the supplementary payments legislation.
Despite the fact he had already raised sufficient money-which I repeat he did not have to do in the first place-to meet his requirements, the minister then imposed a totally injustified additional 1 per cent on the sales tax. I must say he did it with some obvious feeling of shame and regret. He himself admitted that it was a regressive tax and almost apologized for imposing it. Nonetheless he did so while at the same time making more exemptions, exceptions and long apologies.
I have tried to understand why the minister took this step, and again I can only repeat my earlier suggestion, that it is his determination
The Budget-Mr. Lewis to rap the knuckles of the Canadian people for wanting any advance in the welfare services or of the people in Canada who require welfare assistance of any sort. If I may summarize, there was no reason for any budget at all. But if there was any reason whatever for raising extra revenue this was fully accomplished by the progressive increase in the income tax and there was no justification for any additional increase in the sales tax.
As reported at page 11337 the minister said:
The increase in sales tax can be expected to increase the prices of those goods subject to it-
I stop in the middle of a sentence. Here is a gentleman who for a year has been crying about what he called inflationary pressures in the economy. This is a government that has been faced with constant increases in the cost of living. We have a situation in Canada where the housewives of this country have been protesting against increases in prices. A joint committee has been dealing with the problem of the rising cost of living. Without any necessity whatever for his action, and after he has met all his requirements, the minister puts on the statute books an increase in the sales tax and blandly says that the increase in sales tax can be expected to increase the prices of those goods that are subject to it.
I am aware, of course, that food and some other things are excluded from sales tax, but this sales tax hits the housewife in many other areas: clothing, fixtures, household appliances, furniture and all the other things a family needs. To impose an additional 1 per cent at a time when it is totally unnecessary and the economy does not require it is an act of sheer thoughtlessness for which the only explanation, as I have said, is the desire of the minister to rap the knuckles of the Canadian people.
The fact of the matter is that despite his action of not putting the additional 1 per cent on certain building materials, this increase has already had an effect on prices. In the same paragraph from which I have already quoted-I am not going to take the time to re-quote it, but if you will permit me to paraphrase it the minister can correct me if I paraphrase it wrongly-the minister said that in his opinion the increase should be very minimal; it should be less than 1 per cent, he said.
The fact is that there have already been price increases announced in the press of 2 per cent, li per cent and more than 2 per cent on many of the goods on which this sales

February 6. 1967
The Budget-Mr. Lewis tax falls, as could have been foretold by him and his advisers. There are situations where an increase of 1 per cent on a certain item would be so small a fraction of a cent that the manufacturers or others would take advantage of the 1 per cent increase in sales tax to get to the nearest half cent or full cent increase in prices, with the result that the total increase is, in fact, 2 per cent or more. Once more I ask the Minister of Finance what possible justification he can have for this thoughtless addition to the cost of living in Canada today.
I have in my hands a letter which one of my colleagues received from a building materials firm, and one paragraph reads as follows:
Prior to the current increase-
That is, prior to the current increase in the sales tax.
-it was possible to make up a bid using 11 per cent on everything. Now it is necessary to take some items at 11 per cent and the increased items at 12 per cent. This causes no end of work to all the trade and will no doubt result in considerable extra expense for the department, as it will entail a far greater amount of checking into the various accounts.
I have the suspicion, Mr. Speaker, that if a mistake occurs it will likely be on the side of 12 per cent than on the side of 11 per cent.
In my view, the minister ought to have looked in particular at the effect of this tax increase on housing. Instead of increasing the sales tax by 1 per cent, he should have given careful consideration to the housing needs of this country and to the question whether it was not his duty to remove the sales tax on housing materials and building supplies entirely. I suggest to him that that was his duty. It was not his duty to increase the sales tax by 1 per cent.
[DOT] (4:00 p.m.)
We are faced in this country, as the minister and every member knows, with a serious housing crisis. Everybody uses the term. In this country, in parliaments and legislatures, we have got into the habit of dealing in percentages and global figures-millions, hundreds of millions and billions of dollars. We talk of houses in terms of large numbers of homes. Sometimes I feel, when we use these figures, particularly when they are large figures, that we forget we are really speaking of the plight of thousands of Canadian families, men, women, and particularly children, who have to live in unsanitary homes, unpleasant surroundings leading to broken

homes and juvenile delinquency. That is what we speak of when we talk of housing figures. Those figures represent broken lives in Canada. The Minister of Finance had a moral and social duty to be concerned about the broken lives of people living in unsanitary homes. He ought not to be concerned with the silly promise he made last September which he felt obliged to implement in December despite changing economic circumstances.
The housing facts have been placed on the record time and time again. Until this government acts and until some of the provincial governments join with it to take adequate action. They will have to be repeated. In 1965 housing starts in Toronto, in round figures, totalled 30,000; in 1966 they were about 21,000, a decrease of 30 per cent. According to the authorities we need at least 40,000 new homes in Toronto-I have been dealing with Toronto and my figures were for that city alone. Instead of 40,000 new dwellings started in 1966, 21,000 were started, about 50 per cent of the requirements of that metropolitan area.
In the whole of Canada there are about
50.000	publicly owned low rental housing units, less than 1 per cent of all dwellings in the country. The 1961 census showed that
923.000	households, just short of 1 million, in this country lived in broken down, crowded or unsanitary homes. The likelihood now is that instead of the number being under one million it has risen to about one and a half million. A great many Canadians are living in such homes.
In Vancouver from 400 to 500 families are on the waiting list for public housing, and less than half the required number of units are scheduled for completion within the next two years. They are not even completed now. This sort of thing is true right across the country. In every urban area the housing lack is disastrous for the people of Canada.
1 do not refer only to new homes. Slum areas ought to be redeveloped. There is a lack of parks and recreational facilities. Air and water are polluted. All these factors are making life for many hundreds of thousands of Canadians in our larger metropolitan areas really unpleasant, unsanitary and uncomfortable.
This is the situation the minister ought to have dealt with last December and for which he ought to have made provision so that the Minister of Labour responsible for housing might have made in this house a statement that really meant something when dealing with the housing crisis. Instead, we had the
February 6, 1967

picayune policy announcement which my leader justifiably and graphically described as giving a peanut to an elephant to assuage his hunger. Because the minister and the government fail to deal with the basic issues facing the Canadian people we get little bits here and little bits there, slowly, totally inadequately, and totally undesirable in most instances.
Since the minister was determined to make a budget speech in December-I suggest he could have spared himself the trouble and us the pain had he looked at the economy and the situation then-he should also have been concerned, as he says he is, with a matter about which his colleague, the Minister without Portfolio from Toronto, is so terribly concerned. I assume that the question of the lack of adequate control by Canada of its own industry and resources must be of great concern to the present Minister of Finance. Unlike another minister of the government, he agreed to serve on the special committee of ministers going into this question. I suggest to hon. members, and this is without disrespect for the Minister without Portfolio from Toronto for whom I have a great regard, that in parliamentary history there probably is no parallel for a member of parliament being invited to rejoin the cabinet and then being promptly appointed chairman of a royal commission of inquiry. This is what the committee of ministers to look into these matters is really about.
I say to the Minister of Finance and to the government that the New Democratic Party and others have waited for years for the long promised Canadian Development Corporation. At its founding convention in 1961 our party suggested that one of the best ways of regaining greater control over Canada's economy was to establish a publicly organized, publicly directed and managed-I emphasize totally publicly directed and managed-Canadian development fund, as we called it. In it would be gathered the savings of the Canadian people in appropriate ways. In it would be placed such savings as insurance companies and the like hold, voluntarily if possible but by a requirement of the law if necessary. Such a Canadian development fund would then have the necessary savings of Canadians to invest in new industries, in underdeveloped regions of this country and, whenever necessary, in repatriating parts of the economy it may be desirable to repatriate. Two or three years after 1961 we heard from the government that it proposed to establish what it called the
The Budget-Mr. Lewis Canadian Development Corporation. But we find that it is now on the shelf, as are so many things this government has placed there, resting peacefully and gathering dust.
[DOT] (4:10 p.m.)
I suggest to the Minister of Finance and to the house that the concern felt by the people some years ago about Canada's economic selfreliance, Canada's economic independence, ought to be a great deal deeper today than it was even then. The fact is that the control of Canada's economy by foreign corporations continues apace. The reinvestment of undistributed profits by subsidiaries of United States corporations gives them an ever-increasing weight in the economy. Moreover, in the last two or three years there have been examples of interference with the laws and policies of Canada and attempted interference with lines of economic development in this country. All this makes it more important than ever before that we should take steps to give Canada greater economic self-reliance.
I need not recall the famous guide lines which were issued from the United States according to which Canadian subsidiaries of Unites States corporations were required to send their undistributed earnings back home to their parent companies. More recently, if we had any sense of Canadian identity and Canadian pride we all stood aghast at the temerity of the United States authorities in sending sharp notes to the Canadian government with regard to the Mercantile Bank.
Why is not the Canada Development Corporation legislation before us? What is the reason, other than the division in the ranks of the government, the difference of opinion which has been disclosed from time to time between the Minister without Portfolio (Mr. Gordon) and some of his supporters in the cabinet and other ministers with their supporters? The result of this indecision, of this conflict within the ranks of the government, is that an important piece of legislation, one which alone, in our view, can effectively bring about the control of our economy by Canadians, lies on the shelf.
These are the matters with which the minister ought to have been concerned, in my view, last December. I summarize by saying that in my opinion the supplementary budget was unnecessary and the increase in the sales tax was a shameful, undesirable imposition on the people of Canada.


Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I think it would be more appropriate in debating this supplementary budget to
February 6, 1967

country should not have anything to say about anything that happens in our country.
There is little or no evidence to suggest that American businessmen are interested in anything but the returns they can get upon the capital they have invested. I have been a member of this house for ten years and have never been approached by people associated with United States industries telling me we should do certain things for the United States because they have invested money in certain industries in this country. I am sure hon. members generally can say the same. The United States has never encouraged lobbies to force Canada to follow its line of thinking in any given situation. Indeed, every day it becomes more and more evident that Canadians speak their own minds whenever they desire on any aspect of government policy.
The tight money policy of the federal government has been damaging to the progress we are enjoying in the Atlantic provinces. Time and again we have heard leading spokesmen from the Atlantic provinces tell the government that, no matter what the situation may be in the rest of the country, so far as the Atlantic provinces are concerned tight money is a bad thing. This has been said in reports prepared by men hired by the government itself. Yet the government continues to ignore these constructive criticisms and carries on with the application of a blanket tight money policy that does irrevocable damage to our advancement.


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


Robert Carman Coates: I will permit one question.


John B. Stewart: Would the hon. gentleman tell the house what Mr. Rasminsky said about the feasibility of applying a variegated money policy throughout the country?


Robert Carman Coates: February 6, 1967
The Budget-Mr. Coates view before we can secure the plant, the employment and the goods and services which are associated with it. This is what happens time and time again. Rather than doing something about this problem the government ignores it and goes on its merry way continuing to apply its tight-money program. Certainly there is an indication that there is a let-up and I hope this be helpful to our area of Canada in the near future.
I have learned through talking to businessmen that inventories are growing, the number of projects being undertaken has lessened materially, the number of firms looking for the orders has increased greatly and competition is very keen to get what available business there is. As a result lay-offs are occurring in plants which have not had to lay off anyone for a period of five to ten years. If something is not done in the very near future we will be in a lot of trouble and most of it will be related to the tight money policy imposed by the government.
In this regard I should like to say something about housing, because even in a small town like the one in which I live, which has a population of only 11,000 or 12,000 people, there is a very great need for housing. With the amount of interest which has to be paid on the loans necessary in order to build houses today, houses are so far out of the reach of the ordinary person who needs a home that it is impossible for him to assume the obligation that the government today requires.
In addition, the tight money policy of the government always strikes the construction industry and housing first, and the first victim generally speaking is the Canadian who is in the $5,000 to $6,000 income bracket or below. These are the people who really need housing more than anyone else. Yet they are the people who are struck first by the tight money policy. They are the people who find that their hope of owning a home of their own goes out the window completely. I believe that housing in particular should be divorced from the construction industry in so far as government policy is concerned and certainly in so far as its tight-money policy is concerned. But that has not been the case in respect of this government. This is indicated quite significantly by the number of housing starts in recent months. The government has tried to take some meek steps to correct the situation. I like the analogy that was drawn by the leader of the New Democratic Party when he said it was like throwing a peanut to an elephant.

I believe that the government must wake up to this fact. It must come forward with far more constructive housing policies than has been the case to date. Unless this is done, the government will be doing a great disservice to many hard working Canadians who have a right to expect to be able to look forward to owning their own homes but who today do not have a chance in the world of accomplishing this aim.
I should like also to say something about the amendment moved by the hon. member for Perth (Mr. Monteith) in so far as old age security is concerned. Certainly, as was stated by the previous speaker, the funds are available today in the old age security fund. They were there when the increase was approved. They could have been used. Had they been used it would not have been necessary to increase the income tax, but instead the government went forward and in effect gave the taxpayers a spanking for thinking that a $30 increase could be provided even to the needy without someone paying the bill. They said that everybody is going to pay the bill and that this will prove to everybody that they cannot come and ask for money unless they are willing to shell out money.
The funds in the old age security fund were put there by the taxpayers of this nation and they should not be expected to have to pay additional income tax while their own money is sitting in the fund and it is available for the payment of the additional $30 a month to those who can qualify for it. I also think that if the government wishes to talk about a guaranteed annual income and suggest to the Canadian people that the minimum amount which should be available to anyone in this nation is $1,260 per year, then the least it can do is increase the income tax exemption to that amount. In my opinion it is rather ridiculous for the federal government to say we should provide the Canadian people with a guaranteed annual income of $1,260 and then ask these same people to pay income tax on $260 because there is an exemption of only $1,000. Surely to goodness the government cannot talk out of both sides of its mouth at the same time. We should have one thing or the other. We should have a guaranteed annual income, if this is what the government wants, of $1,000 a year-I do not think that would be at all adequate; indeed, I do not think $1,260 is adequate today-or the exemption should be raised so that those people receiving the guaranteed annual income would not have to turn around and give back
February 6, 1967	COMMONS
to the government a portion of the $1,260, the minimum amount on which the government feels they can maintain themselves.
[DOT] (4:40 p.m.)
If we in the Atlantic provinces are to go forward I believe more programs will have to be put forward by the government to allow us to advance at a faster rate than is required in the rest of the nation. This is necessary because we have a great deal of ground to make up. I believe that a great many logical arguments have been put before the Minister of Finance and the Minister of Industry (Mr. Drury) in so far as the designated area program is concerned and in particular as it applies to the Atlantic provinces. During the last election campaign it was a plank in our platform that the whole Atlantic area should be designated. I still contend that this is the logical step. We in that part of Canada have to develop the growth areas that are situated there.
But this government by its program is forcing industries to locate in other areas. This would not be too bad if those other areas were within the Atlantic provinces, but unfortunately in many instances industries that may be thinking about locating in Halifax, Dartmouth, Saint John or Fredericton will locate in a similar area in some other part of the nation if they are prevented from securing the incentives available under this program. We therefore lose out completely. It is my hope that even now it is not too late for the government to reconsider its policy in so far as designated areas are concerned, single out these four growth centres in Nova Scotia and New Brunswick and allow them the benefits available under the program. If the government does this it will materially assist our part of Canada to move forward.


John B. Stewart: Mr. Speaker, before the hon. gentleman resumes his seat will he allow me to ask him another question?


Robert Carman Coates: Yes, Mr. Speaker, with the leave of the house.


John B. Stewart: I assume that the hon. gentleman has time remaining. I should like him to comment on the report from the committee on finance, trade and economic affairs where Mr. Rasminsky said on November 1, 1966, that if in an area there were lower interest rates it would not help that area, but rather would have the effect of expelling money from the area to other parts of the country where the
The Budget-Mr. Lambert interest rates were higher. Would the hon. gentleman comment on that statement?


Robert Carman Coates: Mr. Speaker, the governor of the Bank of Canada might put forward all kinds of theories but I do not think I can expound on them in the house at this time in answer to a question.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I was rather surprised at the turn of the debate this afternoon, having anticipated that in the first round we would hear representations from the minor parties in the house. It is because of an obvious miscalculation in schedules that involved Your Honour as well as other hon. members of the house that possibly there has been a slight shuffling around. It may be that the attitude of the minor parties is a reflection of how important they consider this mini-budget. Frankly, I share their implied attitude.
With the greatest respect to the minister, I think he found himself facing the necessity of bringing in a budget, which he postponed and postponed and finally could not postpone any longer than December 19 if the house was to adjourn on December 21. Therefore there was a fulfilment of the undertaking given by the Minister of Finance (Mr. Sharp) and I think by the Prime Minister (Mr. Pearson) on a number of occasions in the late summer and early fall, that because of pressing problems concerned with rapidly increasing inflation there would be a budget by Christmas. As a matter of fact, the indication was that there would be a budget well before December 1, as though the presentation of a budget in this house would be a cure-all for any and every economic ill that beset the nation.
I remember that in 1962 there was a great cry by editorial writers and other people who were not favourable to the government, that all that was required in the fall of that year following upon the convertibility crisis of May, 1962, was a budget. Our late colleague, the former hon. member for Digby-Annapolis-Kings, then minister of finance, repeatedly had the taunt thrown at him by government members, then in the official opposition, and other opposition members that never in his career had he presented a budget. When we came back into office after the election in 1962, the election having followed a full budget presention by the then minister of finance, Hon. Donald Fleming, the whole budget was there for everyone to examine. The proposals of the government were before the house and the country.
February 6, 1967

The Budget-Mr. Lambert
It is true that that budget was not debated in the house. But if we understand the nature of a budget debate we know that the proposals of the government are in the main ignored and hon. members discuss subjects which they were not able to discuss during the debate on the speech from the throne. The budget debate settles nothing. It provides a forum for ideas and proposals. That is what this house does. But somehow or other the idea is abroad in the minds of far too many people that the mere fact of presenting a budget, whether it tinkers up or tinkers down, will have salutary effects. In many instances, as is the case with this budget, it matters not a tinker's damn. That is the effect of this budget.
[DOT] (4:50 p.m.)
Frankly speaking, this budget did nothing and it was uncalled for in the light of the circumstances. It was only mooted last summer as a sort of ultimate escape hatch for the government when it failed to deal effectively with certain problems of inflation. The dilemma which faced the Minister of Finance in December was whether or not he should tax, whether or not he should apply a damper or whether he should leave the situation pretty well as it is. The dilemma he faced was one which was perplexing economic experts not only in Canada but in the United States. This is an indication of the close affiliation between the two economies, the United States economy being the dominant one and ours not being an exact mirror of theirs but following its movements in so far as United States interest rates are concerned.
We have heard cries about tight money as though this was only a Canadian phenomenon. However, the truth of the matter is that restrictions on credit appeared in the United States before they did here. The United States has experienced additional pressure on credit facilities primarily because of the demands of the war effort in connection with the conflict in Viet Nam and also the demands of the space program. We in Canada have not had such pressures to the same extent. There was inflation in the United States similar to that in Canada. There have been price hikes in basic commodities in the United States, such as we have had, and they have been controlled in some cases by executive action in that country. We in Canada saw the same sort of action taken with regard to a certain increase in the cost of steel which was announced by a number of companies in the late summer.


Mr. Macdonald (Rosedale):: What has this got to do with the welfare state?


Marcel Joseph Aimé Lambert: It is tied in with the welfare state in that there is this preoccupation, this hangover or depression complex, that people must not only be given a boost in the event of need but also that everyone shall be compulsorily provided with a cushion of sorts whether he wants it or not.


Mitchell William Sharp: I thought that was the Conservative party's platform on old age pensions.


Marcel Joseph Aimé Lambert: When you have embarked upon a government created program of assistance which results in gaps in the program for individuals, then of course there is entitlement to equality in this regard. But we are getting to the point of asking, how is the Canadian economy to provide funds for its own development? Before you can guarantee 23033-803
The Budget-Mr. Lambert a welfare program you must make sure you have got the income and the economy to support it. This is something we have not got and which we are rapidly destroying. The government is becoming very much aware of the fact that the Canadian people themselves are not providing the necessary investment funds for the development of our industry and the control of our industry.
Why is this so? It is because they do not have the money left to invest. More and more funds are being channelled into the public sector, not for the development or control of industry and our resources but for public expenditures such as transfer payments. We must come to a decision as to what we are going to do. Are we going to take away the funds that could be in large measure devoted to the purchase of equities for the development and production of Canadian resources which in the end would guarantee the basic economic strength necessary for Canadians to look after themselves?
In my view there must come a point where the individual still has the responsibility, still has the right to make up his mind, but this is being denied to him. Every program that comes along is compulsory and is framed in the so-called language of universality. If the individual is to make up his mind as to how he will provide for his old age, by investment in this or that pension plan, surely this process will provide funds for investment in the private sector. We know that this year $600 million was taken out of the economy compulsorily for the Canada Pension Plan. I am not saying all that would have been destined for investment in the private sector but certainly a great proportion of it would have been. However, it has been withdrawn and turned over to the provincial governments who in turn may hand some of it over to the municipalities for spending on various undertakings, many of which would require a second look as to timing. When it comes to having money available for investment, say in the tar sands, and one requires $250 million one finds that the private sector of the Canadian economy does not have that kind of money.
There are many other areas in which I feel the Canadian public should be encouraged to invest in the Canadian economy. There was a certain approach when the hon. member for Davenport (Mr. Gordon) was minister of finance, and there are still regrettable vestiges of this policy prevalent in government
12696	COMMONS
The Budget-Mr. Lambert thinking, to the effect that you can guarantee a proportion of Canadian ownership and control by negative policies, by using a big stick.
I feel there is a great deal more merit in encouraging Canadians to invest rather than in discouraging foreigners from investing in Canada. I feel that a positive program of incentives is not going to cost that much money and in the end there will be an increase in the economic development of Canada by Canadians.
In the over-all picture of government budgeting it matters not whether certain moneys have to be spent in a certain way or whether less money comes in by another means. The result, from a budgeting or balancing point of view, is the same. We have heard that we are going to have presented to us this session that oft-postponed project known as the Canada Development Corporation. This piece of legislation has been delayed and delayed so long that one had hopes it had become stillborn. However, the other day, in outlining the business of the house before the end of this session, the Prime Minister (Mr. Pearson) indicated that the Canada Development Corporation bill would be brought before us for consideration. If March 10 is the date that the government has in mind for the prorogation of the house, I fear that with the many other things before the house there just cannot be any meaningful discussion at this session in any event of the Canada Development Corporation unless, of course, one subscribes to the idea prevalent in government ranks and among certain newspaper editors that anything the government proposes must ipso facto be accepted by the house in which event we would make a cursory speech or two and then wrap it up. This is "acting responsibly" according to a number of people.
[DOT] (5:10 p.m.)
The parliamentary secretary to the Minister of Finance (Mr. Chretien) may be silently applauding such a philosophy but-


Mitchell William Sharp: He likes your speeches.


Marcel Joseph Aimé Lambert: -I would point out to him that he has not had any experience on this side of the house, and neither has the Minister of Finance. However, I seem to recall the attitudes of certain of their colleagues when they were on this side of the house, and I would suggest to the hon. member for St. Maurice-Lafleche that he should consult with the hon. member for Bonavista-Twillingate (Mr. Pickersgill) or the hon. member for

DEBATES	February 6, 1967
Essex East (Mr. Martin) as to the way one views government projects from one side of the house compared with the other. One could go into a great deal of the philosophy behind the cabinet putting forward measures which frustrate their backbenchers. They do not know what measures the government is putting forward but are asked to support them even though they had nothing to do with the preparation thereof. However, we will come to that when we reach the discussion on the rules.
The last point I should like to make, Mr. Speaker, concerns the question of the 12 per cent sales tax. This has become an extraordinarily large bite; it is one eighth added on at a certain price level. In some instances it is applied at the retail level which is in effect the contact between the producer and the public. In other instances it is applied at the manufacturers' level, many times removed from the actual consumer. The net result, of course, for the consumer is about the same because every intermediary between the manufacturer and the consumer adds on his percentage across the board. Therefore we get a profit margin on the tax, then another margin on the tax plus the profit margin, etc. etc., and the snowballing effect is considerable.
I will be very interested to see what the Carter commission on taxation has to say about the sales tax now that it has reached the level of 11 or 12 per cent. Whether it is 11 per cent or 12 per cent, I think it is equally onerous. The big difficulty comes when you are comparing-


Mr. Chretien:: It is not so bad as it was.


Marcel Joseph Aimé Lambert: Eleven or 12 per cent? I did not think it was necessary. I am talking about the general philosophy of sales tax.


Joseph Jacques Jean Chrétien: Do you have any other fields to suggest to us?


Marcel Joseph Aimé Lambert: I think there is one field into which the government has moved-and if it was really honest it would admit it is going into that field-and that is the imposition of a service tax. I will admit that if the government is asked to spend money, it is not going to manufacture-


The Acting Speaker (Mr. Rinfrel):: Order.


Marcel Joseph Aimé Lambert: I am just finishing, Mr. Speaker. The government must raise the
February 6, 1967	COMMONS
money it is required to spend; this I will admit right from the start. But the government moved into the field of a service tax when it imposed a tax on retreaded tires, for instance. This was an innovation in 1963 that I objected to. It was accepted, but I think on a false premise based on other cases.
Be that as it may, Mr. Speaker, I support the amendment because I think this budget was not necessary. The 1 per cent increase in sales tax was levied for the purpose only of justifying the budget. The money required for the old age security payments between the date of the budget and the end of March is certainly now in the fund. As I say, I support the amendment.


Robert Norman Thompson: Mr. Speaker, I find it very interesting to note that less than three hours ago we were involved in a debate on the setting aside of the normal business of the house in order to debate the urgent problem that had arisen in regard to the Bank of Western Canada and the resignation of the president of that bank from several financial corporations in Toronto with which he had previously been connected. At that time, Mr. Speaker, your advice in disallowing the plea for urgency was that the matter could be raised in the budget debate which was to follow. We are now embarked upon that debate and have been so engaged for several hours. The afternoon is well advanced but we have yet to hear any mention of the subject which would have set aside the normal business of the house.
It is not my intention, Mr. Speaker, to dwell on that matter at any length now, though this does not detract from the importance and urgency of dealing with it. I found some of the remarks the Minister of Finance (Mr. Sharp) made in regard to the matter most interesting, particularly the reference to his telephone conversation with Mr. Stevens. As the hon. gentleman will be before the committee tonight I am sure we will hear further remarks from him at that time. I trust that both Mr. Stevens and Mr. Coyne will be brought before the committee on finance and economic affairs at the very earliest opportunity so that we can hear directly from those two gentlemen.
Certainly if the Bank of Western Canada is to be a bank the operations of which are particularly aimed at serving the interests and needs of western Canadians, then the stand that Mr. Coyne is taking is a most 23033-803i
The Budget-Mr. Thompson commendable one. Whether the bank is controlled from Bay street or whether it is controlled from Wall street, what is most important is that the banking services of this country meet the needs of the country in all their aspects. Therefore it is imperative that this matter be discussed before the committee and that the minister very clearly outline government policy.
In this regard I refer briefly to the proposed banking legislation. I find it very difficult to understand how the government can justify a policy which actually discriminates against the Mercantile Bank, albeit it is United States owned at this time, when what was involved was merely the passing from one foreign ownership to another. It seems to me that rather than coming in the back door, harming our own reputation in international financial circles and impeaching the record of a parliament that has always been known for justice, we would have been far better served had we simply relied on that portion of section 53 which requires that the foreign ownership of shares in the Mercantile Bank or in any bank, including the Bank of Western Canada, be limited to 25 per cent. If such action could yet be taken it would be quite straightforward.
[DOT] (5:20 p.m.)
It is the responsibility of the government to draft banking legislation for each period of 10 years. It seems to me that the objective of making sure that the Mercantile Bank is serving the interests of the nation could have been reached by making the degree of foreign ownership very specific. Any discriminatory clauses in the bill should have been deleted, and I cannot see any excuse for them except to achieve the objective of Canadian ownership. However, this matter must be debated in greater detail following the committee hearings when the banking bill comes before the house. My remarks do not detract from the importance and urgency of dealing effectively with the problem that has arisen in connection with the Bank of Western Canada. Government policy must be adhered to; banking operations and institutions in Canada must serve first of all the interests of the Canadian people and their economy.
I now come to the mini-budget. I do not see why it should have been brought in. I know the minister said, either last fall or earlier in the summer, that a mini-budget would be needed because of dangerous inflationary elements developing in the economy. Between
126S8
February 6, 1967

The Budget-Mr. Thompson the time of that announcement and the minibudget conditions had changed greatly. The dangers of which he had forewarned us had begun to decline more rapidly than anticipated. He found it advisable to cancel action he had earlier intended taking.
The mini-budget concerns itself, therefore, with raising the money necessary to implement the guaranteed income provision for our senior citizens for the last three months of the fiscal year. The minister, it seems to me could have forgotten the mini-budget. He could have made a statement saying that the inflationary dangers in the economy had abuted to the point where it was not necessary to take special measures. He could have left the implementation of the extra tax for the next budget, which cannot now be far distant. The surplus in the old age security fund was more than enough to takecare of any expenditure necessary for the implementation of the guaranteed annual income for the first three months. In any event, payments to our senior citizens under the guaranteed income plan will not be made until March although they will be retroactive until January 1. It seems to me that this debate is redundant.
The minister decided to increase the income tax and the sales tax. As I said before, I commend the minister for making clear to the Canadian people that there is no secret source of government funds, that the only way money will be obtained, unless it is desired to increase deficit borrowing, is from the taxpayer's pocket. Because the increase in income tax does not really affect those in the low income brackets, that increase was the most logical way to collect the extra money.
I cannot agree with the decision to increase the sales tax by 1 per cent. Already our cost of living has risen so much, and is continuing to rise, that any increase in the cost of the things necessary for every-day living should be avoided. The minister argued that the 1 per cent increase in sales tax on certain items is not much and that the extra tax was a simple method to raise the additional income. The increase in sales tax from 11 per cent to 12 per cent does not mean an increased cost of just 1 per cent with respect to those items on which it is charged. The escalation of cost is more than that.
Before the house reassembled in the new year I took it on myself to investigate what the effect of the 1 per cent increase in sales tax would be in the wholesale grocery business with regard to those things normally sold in food stores. I came away with a sheaf


of letters. I will not burden the house by going over them in detail but will mention a few.
I found that the increase in the cost of powdered milk was exactly 5 per cent. Wholesale companies after January 1 were charging 5 per cent more for powdered milk than they had charged before that time. The price increase for condensed milk ranged from 5 per cent to 9 per cent. Certain other standard brand products increased in price at the wholesale level by 8 per cent or more. Cooking oil, for example, rose by a fantastic 35 per cent. To be specific, a case of 12 cans of vegetable oil which sold before January 1 at $5.61 increased to $7.60. This increase cannot be attributed wholly to the 1 per cent sales tax increase; nevertheless the excuse for raising the price was the sales tax increase, and part of the increased price was owing to the sales tax increase. I found that for many items sold in food stores-I will not enumerate them all-the price increases varied almost without exception from 5 to 8 per cent, the excuse for raising prices being the 1 per cent increase in sales tax.
This was at the wholesale level. The retail level had not entered the picture and neither in many instances had the jobber. The effect of the increased taxation has been to increase costs, to escalate costs at the various levels. The greatest single problem facing us now is the escalation in the cost of living.
In 1966 we had more strikes in more vital areas than ever before. Never before had labour demanded the large increases it demanded in 1966. With the cost of living going up, if workers are to maintain the standard of living they had previously had they will have to have more money to spend. So the struggle for increased wages goes on.
Recently I talked to an employer who has probably not more than a dozen employees. He had spoken to his employees during 1966 and told them over and over again that to demand more wages would further spiral the cost of living ever higher. He tried to show them that by demanding more wages they would defeat their own purpose and not until costs could be kept down could they expect to control the cost of living. He said to me, "I cannot again face my employees with that story again; in 1967 their standard of living will be lower than in 1966 unless their earning power is increased."
That is the situation. The problem is so acute that we in the Social Credit party contend it cannot continue. Unless something is
February 6, 1967

The Budget-Mr. Thompson
This is the danger I see in our present policy. Somehow or other we have managed to slow down our productivity while at the same time insisting on developing government budgets to the extent that half of what Canadians now earn is used merely to pay for the cost of government. That is a precarious situation in which to place ourselves.
It is said we have inflation in Canada. There is no inflation of money. We are short of money. In fact, one of the problems today on the whole international scene is that the world is short of money. Yet money is something which man makes and which man has the ability to control. Its purpose, basically, is to enable the distribution of goods and services, though it must also supply a standard of measurement and a means of storing wealth. One of the greatest needs facing this country today, in fact the greatest need which faces the whole free world today, is the introduction of a new system of monetary units which will reaffirm the fundamental purpose for which money was intended in the first place, that is, distribution. It is wrong to say there is inflation of money in Canada. There is not.
A previous speaker talked about the failure of Canadians to invest their savings in the development of Canada. That is true. The total amount held in savings accounts in Canada today is something in excess of $10 billion. If half of that sum were used for the development of our resources, for the expansion of our industry, we would not need the foreign capital we need today. For some reason Canadian people lack the confidence to invest their savings in the development of the resources of their country. Consequently it is necessary to depend on capital from the hands of foreigners who apparently have more confidence in Canada than we do ourselves as Canadians.
[DOT] (5:40 p.m.)
But the responsibility there, Mr. Speaker, falls back on government because unless government can set a climate, unless government can provide the incentive, unless our productivity does increase faster than the cost of government, then we shall continue to find ourselves in the position in which we are now. It is called inflation. It is not an inflation of money. It is an inflation of prices. It is an inflation of government expenditures. It is an inflation of the cost of everything we buy to the extent that Canadians, after paying taxes, do not have enough left to spend on those

things which are produced for their own needs. This is the real problem with which we are faced. Unless the Minister of Finance and his financial policies can move toward correcting this thing in some way which we are failing to do at the present time, the economy of Canada is in for trouble.
The Minister of Finance must be concerned about the problem of adjusting taxes, and there are several areas he must consider in this respect. Perhaps a little timely advice, whether he gives heed to it or not, is in order. In my opinion it is time we called a halt to the increase of government expenditures and a corresponding halt to tax increases. If we do not call a halt to the present trend of things, if the federal government does not set the pattern for provincial and municipal governments in this regard, then government expenditure is going to spiral faster than the increase in income and the increase of productivity in this country and the inflationary problem, which is one of prices, is going to get worse rather than better.
It seems to me that one of the first steps which must be taken is to call a halt to the increase in government expenditure. We have watched and listened with interest to the proceedings of the special committee on consumer prices. There is no doubt this committee is doing good work. But as I have observed and read some of the presentations made before that committee it seemed to me that the real cause of the increase in the cost of living was being neglected.
I think the number one cause of the increase in the cost of living is the tremendous increase in taxes because taxation compounds itself at its various levels, as we have seen with the 1 per cent sales tax increase. Tax increases are the first villain in the cost of living spiral. The second cause is the tremendous cost of usury and interest. We are living today in a debt economy, on a time payment, pay tomorrow, consumer purchasing basis, and unless we can do something to reduce the cost of usury we are not going to correct the problem. It is not a question of packaging or of somebody making too much profit or too high wages. The first cause is the increase in the cost of government and the second is the run away cost of usury and interest.
The government must give a lead in this matter. I simply cannot understand the government's policy with respect to the proposed banking legislation, which would free the rate of interest. It seems to me that what is required is a ceiling on the cost of interest.
February 6, 1967

particularly as it relates to consumer credit buying. We should lower the cost of interest from the top instead of taking the ceiling off and letting it rise from the bottom. By taking the ceiling off we are not going to reduce the cost of interest so far as the consumers of Canada are concerned.
Second, Mr. Speaker, I think it is imperative that in laying out his plans for his next budget the Minister of Finance should firmly establish priorities in the area of welfare. At the present time on the federal level approximately 35 per cent of everything we pay in taxes to the federal government is spent in the area of welfare. Out of 12 million Canadians who are 20 years of age or more, 5.5 million are actually receiving direct payments from government at this time. This is a situation which is extremely difficult to manage so far as federal budgets are concerned, but unless we are able to establish the priorities we are going to be in trouble, if we are not already in serious trouble.
There is no doubt in my mind that the first priority in the field of welfare is education. Unless we can provide educational facilities that will train the young people of today for the environment in which they will be making a living, and unless we can finance the retraining of older people who are no longer working in the professions or jobs in which they were originally trained, then we shall be failing them in their efforts to earn their own living. Today when the emphasis is on health and welfare it seems to me that we have our priorities reversed.
I realize that my time is just about finished, Mr. Speaker, but I have one or two other points I would like to make if I have permission to do so.


Mr. Speaker:: Order. Has the hon. member the consent of the house to continue beyond his time?


Some hon. Members:: Agreed.


Robert Norman Thompson: Thank you very much, Mr. Speaker. I think it is the responsibility of the Minister of Finance, as the member of the government responsible for financial and tax policies, to take a careful look at our present taxation structure in order to eliminate any inequitable taxes which are restricting the growth of the economy. The province of Alberta has taken a lead in this regard by eliminating an inequitable tax, succession duties. This principle applies to the gift tax as well. Here again the federal government
The Budget-Mr. Thompson should take a lead in eliminating this type of tax in consultation with the provinces, because certainly it is doing nothing but discouraging the investment of Canadian savings in Canada.
I do not have sufficient time to talk about many other areas where taxes are restrictive instead of expansionist, but as my closing point may I say it is also necessary and imperative that the national income be equalized with the total market values of consumer goods and services. This is a subject with which I will deal on another occasion, but for the moment suffice it to say I have statistics which show the pattern for the last 50 years. It is one in which the amount of income that the Canadian people earn in all of their different activities and have in their own pockets to buy consumer goods is not equal to the market value of that which is produced in consumer goods and services. Until the national income is equalized with the total market value of consumer goods and services we shall continue to have the debtor economy we have now. There is no alternative for it, and here again I think it is the responsibility of the Minister of Finance to do something in this regard in connection with banking legislation and monetary policies for which he is responsible. The debt building policies of government and consumers are not only wrong but they are leading us to national and personal bankruptcy. This has already been evident in 1966.
I would close by saying that tight money and higher taxes are not the answer to our present situation. Until we have fiscal and economic policies that will encourage the development of our national resources by Canadians, so that the productivity of our economy will exceed the actual increase in the growth rate of government expenditures, we shall continue to find ourselves as we are this year, unable to meet the logical needs of the Canadian people. There is no clearer example of this problem than our failure this year to have sufficient money in circulation to permit the construction industry of the country to build the homes that Canadians need. So, Mr. Speaker, I hope that the minister in finalizing his plans for his coming budget will give heed to some of these things, which are not my ideas but are the very facts of the economy, in order to bring about a policy to deal more effectively with these problems.

February 6, 1967
The Budget-Mr. Aiken
[DOT] (5:50 p.m.)


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Speaker:: It is my duty, pursuant to provisional 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 Kootenay West (Mr. Herridge), External Affairs-North Viet Nam-use of funds given for aid; the hon. member for Northwest Territories (Mr. Orange), Northern Affairs-assistance to Fort Smith following naming of Yellowknife as capital; the hon. member for Lapointe (Mr. Gregoire), Education-Manitoba-exclusion	of separate
schools from school budget.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Monteith.
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, in rising to speak on the supplementary budget a couple of months before the annual budget is due, I ask why this budget to announce these two tax increases was brought in when it was. I think that the impact of the old age security supplement would not already be felt before another budget could be brought in. Someone has said that the minister brought in a tax increase contemporaneously with the old age pension supplement to teach us a lesson that welfare costs money. This is indeed a lofty approach and flatters the minister unduly.
I do not generally quote newspapers and will not do so now. I will say, however, that the Vancouver Province in an editorial dated December 21 last year, set forth the proposal that this was the reason the minister brought in his budget when he did. Others said that it was not so much to teach us a lesson but rather that the minister had to face the economic fact that an increase in spending must be met by an immediate increase in taxation. This is a view held by the Toronto Telegram. Another newspaper expressed the opinion that the increase in the sales tax actually will help recover part of the pension increase

from the very people who will receive it, that is, from the pensioners as well as everyone else. This is only partly true and is not completely fair to the minister. Undoubtedly, however, that will be part of the effect. None of these approaches is entirely true. I am sure that neither the country, nor the members in the house, nor the minister's colleagues would benefit from or appreciate or require to be taught a lesson about economics in this manner.
The minister's political experience has been sufficient for him to know that the imposition of taxes just for the purpose of teaching people a lesson is not singularly appreciated. So far as facing economic facts is concerned, if we were to have a supplementary budget every time the government increased its spending we would have a continuous budget debate and hardly any legislation. Did we have a supplementary budget when the actual cost of Expo, for example, went up? Did we have a supplementary budget when the Canada Pension Plan bill came in last year which resulted in substantial additional spending?


Mitchell William Sharp: The money was provided in the bill itself.


Gordon Harvey Aiken: Did we have a supplementary budget to meet the extra costs as a result of the skyrocketing inflation and the increase in government spending? Perhaps the minister would answer that. I think not. But herein lies the answer. We all know the story of the straw that broke the camel's back. We know that the cost of government has grown and grown until the limit has been reached.
Just as the government was about to add the last straw the Minister of Finance snatched it away triumphantly protesting that we could not let our elderly break the camel's back and that we should ourselves carry the load of this extra straw. The minister knew that the Canadian people would gladly carry this little extra load on behalf of our senior citizens and that at the same time the camel would not break down. So our economy goes on carrying the load of the government's spending until the next straw comes by. I wonder whether the minister will find such a good excuse under similar circumstances the next time to pick off that next straw? I suppose we shall see what happens by the time the budget rolls around in a couple of months, but regardless of the reason let us not be led to think that the old age supplements were the whole cause of these two tax increases.
February 6, 1967

With otherwise healthy government, financing these tax increases could have been absorbed in other ways and without an additional budget. I think this is the fundamental matter which we must examine. If government spending had not accumulated to the point that it has, this additional load could have easily been carried. I think it is unfair that we should place on the old age pension supplement the sole cause for the tax increases that we are now considering.
This leads to another matter. Why do we find increasingly anxious attention being paid to our financial institutions at the present time? Canada's long-term financial prospects are excellent. The country at the present time could be described as being nervous. There is a lack of confidence because no firm businesslike action or legislation has been forthcoming from the government to meet the current problems. The cost of living continues to increase rapidly. While there are some increases in long-term credit, shortterm credit is in very short supply. This is what we need for our day by day operations.
How many royal commissions, parliamentary committees and other boards of inquiry will the government continue to set up to look into questions on which it should make a decision itself? Just recently I have had cause to raise some question concerning the number of committees which are sitting to look into an immense number of problems, many of which could be placed directly before the government and action taken. While these committees are valuable in a great many cases, I think they are abused in many other cases when they are used to help the government put off making a definite decision in respect of some of these important problems.
I see it is six o'clock, Mr. Speaker. I believe something further is to be announced.


Mr. Speaker:: Is it agreed that the house recess until eight o'clock?


Some hon. Members:: Agreed.



SITTING SUSPENDED


Gordon Harvey Aiken: Mr. Speaker, at the adjournment I was discussing the situation of the financial institutions of this country. I believe we recognize that the government will either
The Budget-Mr. Aiken have to cut tax expenditures or increase taxes in order to restore confidence in the economy. The last controversy over the Bank of Western Canada, following other difficulties with regard to financial institutions in Canada, will merely add fuel to the fire. Regardless of the reasons for the dispute, it has come at a particularly unfortunate time. The fact that the issue has been raised by Mr. James Coyne, who seems to have a penchant for public controversy, will certainly cause many hon. members some scepticism. However, his allegations should be fully investigated to ensure that the objects of this banking institution are properly carried out.
To come back for a moment to the budget debate, I would say we have been puzzled by the apparent reluctance of government members up to this time to take part in the debate. Here is the opportunity for many of the members of the Liberal party to discuss the important matters of the economy of this country. We read in the press from time to time about the lack of opportunity for private members on the government side of the house to speak out. Having been a member on the government side for some years, I recognize the lack of opportunity in many cases when they have so many experts sitting in front of them to discuss almost all fields. But here is the opportunity, during the budget debate, for some of these monumental expositions to be made.
However, Mr. Speaker, we have had four consecutive opposition members speaking on this budget debate without any government members seeming to clamour for the opportunity to speak great words in favour of the budget. I understand that there are one or two government members now ready, willing and anxious to present their views; but it has been a matter of some bewilderment to us that they have not sought to speak before. Perhaps they are too embarrassed by this unnecessary budget to take part in the debate, and merely want to get it over with and hope the government may come up with something more vital, something more meaningful for them to discuss. Perhaps it is difficult for the government members to explain a general tax increase at a time when the economy needs some encouragement, rather than discouragement.
I shall not reiterate what I said before the dinner hour, but it seems that this budget was an unnecessary exposition so close to the time for a regular budget, when a general tax increase could have been applied. I think it

February 6, 1967
The Budget-Mr. Aiken was something the minister felt he had to do for the expedience of the moment, and now wishes he had left undone until a later date. However, I do not want to delay the budget debate for that reason. I believe it was unnecessary; it was ill-timed and left a cloud on the older people of this country; it left the general impression with the public that it was only to provide the old age security supplement that additional taxes had to be raised. As I indicated previously, this was not the sole reason, and if there had been a properly managed economy it could have absorbed this latest burden on the taxpayers of the country.
[DOT] (8:10 p.m.)
The budget debate is normally a time to air complaints. While this is a fairly narrow budget, I have one complaint that I want to raise at this time in connection with budget matters. Being a member from a rural riding it bothers me considerably. It relates to the administration of unemployment insurance in rural areas. One of the things that a person living in a rural area is required to do when he applies for unemployment insurance is to prove that he is willing and able to accept employment, and that he is available for work. The Unemployment Insurance Commission has taken this to mean that a person who wishes to draw unemployment insurance must not limit the place of employment, the wages, or the type of job that he is prepared to accept. Time after time people in rural areas receive notices of disqualification because they have said that they find it difficult to work outside the community in which they reside. However, if they do state in their applications that they wish to work only within the immediate area of residence, they are disqualified by their own words.
To make it worse, they are often encouraged by the Unemployment Insurance Commission to state exactly where and when they will accept a job. If they say that they will not accept a job at a certain place 15 miles away, they may be disqualified on the ground that they have refused a job which, really, was never offered to them. This is most difficult for those people who have been raised, have worked and lived in a rural or an isolated community. The Unemployment Insurance Commission says: "You may have lived and worked there but we cannot get you a job there, so you had better go somewhere else." There may be reasons for it under some circumstances, but it is difficult in many cases for men to travel 30, 40 or 50 miles when they

do not have transportation, when they are out of a job and when they cannot afford to maintain two homes.
If it is difficult for men, it is all the more difficult for women who either work part time to supplement the family income, or even support a family because of the inability of the husband to do so or because of his absence. And yet such a woman living in a rural area is told that she has to leave the community and go somewhere else to find employment.
Of course this is absolutely impossible. I run across this time after time and I take this opportunity to raise the issue and to ask that the unemployment insurance regulations be applied somewhat more reasonably to people in rural areas. It might be that we have a particularly difficult office in our area but I have heard the same complaint from other hon. members. I hope the government will give some thought to a more reasonable application of the Unemployment Insurance Act.
Mr. Speaker, my time has just about expired. I hope that before the budget debate is concluded we will hear some hon. members on the government side explain how they can justify the imposition of the tax in question at a time when perhaps it could have been avoided. I hope they will explain why the apparent burden of the increase in taxes was cast upon the older people of this country. We know very well that while the granting of benefits to the older people was a factor in the increase in taxation, it was not the only factor. If the economy of the country had been in proper shape, if we had not been spending money recklessly and going into debt, we would have been able to absorb this increase instead of raising the tax at the time when we decided to give the old people a supplement. In this way we have burdened them with this increase.
I am sure the minister knew that the people of Canada would accept an additional tax, but I do not think we should be under the illusion that a supplement to the older people was the whole reason for a tax increase at this time. We have burdened ourselves to the point where a tax increase would have been necessary anyway. We may have to have another increase in the regular budget. It seems to me that the minister is approaching this matter in a piecemeal way and is trying to cast the burden of his difficulty on as broad a spectrum of the population as possible.
February 6, 1967


James Allen (Jim) Byrne: Mr. Speaker, as the hon. member for Parry Sound-Muskoka (Mr. Aiken) has pointed out, this is the opportunity for private members to express their opinions on financial matters, and on other matters generally that are of concern to them. I am seeking to use this opportunity for that purpose and I am speaking as a private member representing Kootenay East. I think it is true that despite the fulminations of the members of the opposition, the budget speech as outlined by the minister has met with general approval. It is true that no one relishes a tax increase, but on the other hand those who are benefiting-and some of them have been mentioned by the hon. member for Parry Sound-Muskoka-certainly smile with approbation when it means an increase in grants.
I think the hollowness of the invective of the opposition can best be disclosed by turning back a few pages of Hansard to the debate on the act which provided for a supplement to old age security. Of course at that time it was a call for higher grants, while today it is a call for a reduction in taxes. This reminds me of the sage advice that was given to me when I was a rookie member of parliament-admittedly quite a number of years ago-that a successful politician never votes for a tax bill or against a grant.
Generally speaking I think that governments must face up to the horrible facts of life and be ever mindful of the Scottish politician's advice which is as follows:
They'll dom soon forget what you've already gie 'em, but they'll remember for a long time what you ain't gie 'em yet.
While it is not my purpose to criticize the imposition of higher income taxes on certain groups of taxpayers and an increase in the sales tax, I do offer a suggestion which I believe to be fair and reasonable. To some members of the house it will be very unpopular, but I know that others will recognize that deep down in their hearts they find it acceptable, although they might not be prepared to admit it. I know also that it will be unpopular with a large and what I believe to be a preferred section of our population. It will indeed constitute a severe criticism of the economic philosophy of my friends, but I hope they will take it in the best sense, namely that it is a question of principle and that I believe it to be in the best interest of all Canadians.
23033-804i
The Budget-Mr. Byrne
I am referring to the removal of the special tax privilege enjoyed by co-operative enterprises and credit unions. Had this special tax incentive, based as it is on no sound economic or fiscal theory, been removed decades ago when co-operatives first emerged from the local self-help status on which they were founded, no new taxes would have been necessary at this time.
[DOT] (8:20 p.m.)
The co-operative movement, as it chooses to be called, is nothing more nor less than corporate enterprise enjoying the benefits of $3 billion worth of business each year in Canada. Co-operatives have become a corporate colossus in competitive enterprise, but with a difference. Co-operative profits are almost completely exempt from income tax. Their competitive advantage at the expense of the corporate and personal taxpayer may be simply stated. A corporate enterprise, in order to undertake a $1 million expansion program must have first earned $2 million in excess of a reasonable return on invested capital. One half of the corporate profit, or 52 per cent, must first be handed over to government, its sleeping but avaricious partner in business. The co-operative, on the other hand, need earn only $1 million, declare the full amount in patronage dividends and retain all or nearly all as capital for reinvestment purposes. The co-operative has no sleeping partner who demands 52 per cent of the corporate earnings.
Since the beginning of the industrial revolution, the eggheads have tended to look upon a corporate enterprise as a menace to society. Anyone who dares to defend corporate enterprise is one virtually living in sin. I believe, and sincerely believe, it is the benefits of corporate enterprise, operating under a democratic free enterprise system, that has provided for us on the North American continent the highest standard of living in the world, and in Canada the most comprehensive social welfare program in the world. Certainly, nothing I saw during my recent visit to the Union of Soviet Socialist Republics altered, even in the minutest detail, this long held conviction.


Mr. Maclnnis (Cape Breton South):: Will the hon. member permit a question?


James Allen (Jim) Byrne: I will permit a question when my speech has been completed. I know hon. members-

February 6, 1967
The Budget-Mr. Byrne


Mr, Maclnnis (Cape Breton South):: Mr. Speaker, I rise on a point of order. Surely, the hon. member can indicate to us what he believes-


James Allen (Jim) Byrne: I know the hon. members for York South (Mr. Lewis) and Bumaby-Coquitlam (Mr. Douglas) -


Mr. Deputy Speaker:: The hon. member for Cape Breton South on a point of order.


Donald MacInnis: The
hon. member is reading his speech, and he continues to read every word he has spoken in the house. This is not in accordance with the rules.


James Allen (Jim) Byrne: I submit to this hon. member who has taken exception to what is being done that I do not intervene very often in debate. I have what may be considered to be copious notes because I am dealing with a very serious matter. If the hon. member would be as serious as I am in this house on occasion, he would show up much better.
I know that the socialist group in the house will not agree-*


Donald MacInnis: I rise on a point of order.


Mr. Deputy Speaker:: Order. The hon. member for Cape Breton South on a point of order.


Donald MacInnis: Mr. Speaker, I am waiting for a ruling from the Chair. Is it or is it not against the rules to read word for word from a prepared text?


Mr. Deputy Speaker:: I am sure the hon. member will recall the explanation given by the hon. member for Kootenay East. He has explained to the house that he has copious notes, but I hope that he will not follow them too closely.


Mr. Nasserden:: It appears that the notes are not only copious but difficult to read.


An hon. Member:: The fellow who wrote them should read them.


James Allen (Jim) Byrne: I have sat here for many years watching hon. members read their speeches word for word.


Mr. Nugent:: Would the hon. member tell us why he could not find a better example than that to follow?


James Allen (Jim) Byrne: The socialists have a reactionary outlook which I believe is 25 years behind even contemporary communism. Even communist Russia today struggles with the problem of reviving an enterprise or profit system,
(Mr. Byrne.]
while trying to retain its special form of government.
Lest I be misunderstood, and whether or not I am misunderstood I know that I will be misinterpreted, I harbour absolutely no ill will toward co-operatives as such. Co-operatives have indeed a place in our society. They are, or at least should be, just another enterprise operating in a free enterprise environment, assisting in but sustaining a government or governments which are required to pour out billions of tax dollars in welfare and other services. Their special status need come only from the desire of a special group of like minds to provide self-help and co-operation. Co-operatives do, however, enjoy a special competitive position which threatens the very existence of corporate enterprise. It is against this discrimination I appeal to government and members of the house at this time.


Edward Nasserden: Will the hon. member
permit a question?


James Allen (Jim) Byrne: Let us, for example, assess the relative position of two competitors bidding for a going concern in which one bidder is a co-operative and the other a corporate enterprise. Let us assume that the firm on the block enjoys net earnings after taxes of $1 million annually, and that the capitalized value of those earnings on the stock market is $10 million. Let us assume the going rate of earnings for that kind of investment is 10 per cent. Let us assume also that before payment of the corporation's income tax, its earnings were $2 million.
If the co-operative regards a 10 per cent return as satisfactory, it can afford to pay as much as $2 million for the firm. It can receive tax free the full $2 million of annual earnings. The other, ordinary, corporation seeking to buy this firm could wisely pay no more than the after tax capitalization value of $10 million. It will be argued I know that patronage refunds do not fall in the category of dividends; that co-operative earnings are not in any way connected with profit. Surely any economist worthy of the name would not say that excess earnings over disbursements are not profit.
From what I have said, it will be obvious to members of the house that while tax exempt co-operatives are not bearing their fair share of the Canadian tax burden, an even more serious result of this practice is the advantage they hold over corporate competitors. This policy, in an age when corporate profits are
February 6, 1967

taxed at an exceedingly high rate, cannot help but mitigate against corporate expansion and conversely encourage unprecedented and overwhelming expansion of co-operative enterprise.
It is time, in my opinion, that co-operatives, having attained the multi-billion dollar business status, should divest themselves from the sort of semi-religious garb under which they have been clothed these many years. In all their literature and protestations designed to seek patronage of the individual and to retain the sympathies of legislators, there rings a semi-religious strain. It follows of course that any criticism in this area of special privilege is looked upon as sacrilegious utterance against the deity.
Let us take a look for a moment at the annual report of the Federated Co-operative Limited and subsidiary companies for the year ended October 31, 1964. I know that I would have the co-operation of the house if I were to table two pages from that report.


Donald MacInnis: You had
better read it.


Mr. Deputy Speaker:: Does the house give unanimous consent to having this material printed in Hansard?


Terence James (Terry) Nugent: I rise on a point of order. Considering the manner in which the hon. member has been proceeding, I would think it only fair to the house he should tell us the name of the author of this speech, so he would not have to bear the blame alone. On that condition, we will allow the material to be read into the record.


James Allen (Jim) Byrne: Mr. Speaker, I have been in this house since 1949. Any utterances I have made have been of my own origin, and I am sure the same cannot be said for the hon. member for Edmonton-Strathcona (Mr. Nugent).
[DOT] (8:30 p.m.)


Donald MacInnis: A point of order, Mr. Speaker.


James Allen (Jim) Byrne: The annual report-


Donald MacInnis: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: Order. The hon. member for Cape Breton South on a point of order.


Donald MacInnis: My
point of order is that there is no reason why
The Budget-Mr. Byrne the hon. member for Kootenay East should reply to a question from this side of the house in the way he did. His reply was inaccurate in any sense of the word.


Mr. Deputy Speaker:: Order. May I ask the
house whether it gives unanimous consent to the parliamentary secretary to have this table to which he has referred recorded in Hansard?


Edward Nasserden: Mr. Speaker, in view of the unwarranted attack which is being made on co-operatives by the hon. gentleman, we cannot give him that consent.


James Allen (Jim) Byrne: Mr. Speaker, in this table-


Mr. Habel:: Mr. Speaker, I rise on a point of order.


James Allen (Jim) Byrne: -if hon. members will permit me-[DOT]


Mr. Deputy Speaker:: Order. The hon. member for Cochrane on a point of order.


Joseph-Alphonse-Anaclet Habel: Mr. Speaker, I cannot say otherwise than that it is amazing to see members on the opposition side doing what they are doing now, when only a few moments ago one of their members was blaming the Liberals for not speaking in this house.


Terence James (Terry) Nugent: We are objecting to his reading from notes.


James Allen (Jim) Byrne: In this statement, Mr. Speaker, we find net sales of $110,988,000, and other income of $182,000, for a total of $111 million odd. Expenditures are $92 million, estimated income tax $207,000, for a net savings available for distribution to members of $5,063,000.
I wonder whether anyone can find in this statement anything that faintly resembles a disbursement to a charitable institution unless, of course, 50 per cent of the western farmers on the western prairies are in need of welfare. Incidentally, none of these dividends have apparently been distributed to the western prairie farmers and others.
You will note from the statement, Mr. Speaker, that in any portion of the operations in which a deficit is incurred, the shortfall is described in such bourgeois terms as a loss. Where there is an excess-


Thomas Clement (Tommy) Douglas: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: Order. The hon. member for Burnaby-Coquitlam on a point of order.

February 6< 1967
The Budget-Mr. Byrne


Thomas Clement (Tommy) Douglas: Mr. Speaker, I do not want to interrupt the hon. gentleman-


Some hon. Members:: Oh, oh.


Thomas Clement (Tommy) Douglas: -in this savage attack he is making on the co-operatives-


Mr. Nesbili:: And credit unions.


Thomas Clement (Tommy) Douglas: Yes, and credit unions-but he should not be allowed to malign the cooperatives and misrepresent the situation. He just made a statement which certainly impugns the integrity of Federated Co-operatives. The hon. member said they distributed nothing to the farmers. He should know that Federated Co-operatives is owned by the individual co-operative associations, not by individual farmers.


Donald Stovel Macdonald: That is not a point of order. Sit down.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I do not need any orders from any pipsqueak over on that side of the house.


Donald Stovel Macdonald: Make your own speech; don't interrupt others.


Thomas Clement (Tommy) Douglas: I rose, Mr. Speaker,-


Albert Béchard: Obey the rules.


Thomas Clement (Tommy) Douglas: I rose, Mr. Speaker, in protest against this attempt-


Mr. Deputy Speaker:: Order. It is a little difficult for the Chair to decide whether or not the hon. gentleman has a point of order until it has been heard. I would ask hon. members to give me the opportunity of hearing the hon. member's point of order. The hon. member for Burnaby-Coquitlam.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I was merely endeavouring to point out, before I was interrupted, that if the hon. member wants to discuss the co-operative movement he should discuss the situation with accuracy, instead of maligning the co-operatives and leaving the impression that they are not distributing dividends to farmers. He knows the farmers are not members; it is the co-operative associations which are the members.


James Allen (Jim) Byrne: Mr. Speaker-


Thomas Clement (Tommy) Douglas: The hon. member is leaving a totally erroneous impression, which no one can correct until he has finished his remarks, and by that time this false impression will have gone across the country.


Mr. Deputy Speaker:: Order, please. I think that the point of order which was raised by the hon. member for Burnaby-Coquitlam is an attempt to refute what is being said. The Chair is not the judge of the accuracy of the statements being made by the hon. member for Kootenay East, but if the argument he is now presenting can be refuted I am sure there will be an opportunity for the hon. member to do so.


James Allen (Jim) Byrne: Mr. Speaker, I would prefer to let the co-operative movement speak for itself, if hon. members would allow me to table these figures.


Mr. Deputy Speaker:: Order, please.


Edward Nasserden: Mr. Speaker, on the point of order raised by the hon. member for Burnaby-Coquitlam I also want to record my regret that the hon. member has


Mr. Deputy Speaker:: Order, please. The Chair's responsibility in this matter is to decide on the point of order. If the hon. member wishes, as I have said, to refute the argument being made, he will have an opportunity to do so.


James Allen (Jim) Byrne: Mr. Speaker, as I said earlier I would be quite pleased to let the Federated Co-operatives speak for themselves, if hon. members opposite would allow me to table these two pages of their report dated October 31, 1964. Since that has been denied me they will have to accept my statement.


Terence James (Terry) Nugent: Mr. Speaker-


James Allen (Jim) Byrne: Where there is an excess of revenue over expenditure-


Terence James (Terry) Nugent: Mr. Speaker, I rise on a point of order. I think that to suggest the house has denied the hon. member from doing a certain thing might leave the impression that the house has therefore acceded to an argument of his in which he made a very misleading statement, which I am sure he would not except the house to abide by. Our argument against his putting the statement on the record is based simply on the fact that we-at least as far as I am concerned-want to know the author of his speech. Since we contend that we should not accept the statement that he wishes to proffer because it does not support his argument, our refusal is not an admission of anything, except that we are not buying anything that he is selling in this matter.
February 6, 1967


James Allen (Jim) Byrne: Mr. Speaker, it seems to me that the dinner hour must have been a little too long and that purchases have been made during that period. This, if I may say so, is not, as a corporate enterprise would term it, a profit and loss sheet; it merely becomes a pusillanimous recording of undistributed savings.
In this context, Mr. Speaker, what is the real meaning of the word "savings"? Is it intended to show how much the patron saved through dealing with the co-operative, rather than an avaricious corporate enterprise or a corner grocer or a hardware merchant? If so, such an assumption is a subtle distortion of the fact. The saving is in reality the amount by which the federal and provincial treasuries have been deprived. Had the co-operative not been in a position to expand with the assistance of free capital, and had current profits been subject to the 52 per cent corporate income tax, the picture would indeed have been vastly different.
You will note also-and this is significant -that the net savings-not profits, of course -in 1964 amount to $5,063,000, upon which the estimated income tax is $207,000.


Edward Nasserden: Mr. Speaker, on a question of privilege, the hon. member who now has the floor has said that the savings that are made by co-operatives have been robbing the federal treasury. That is an insinuation that is unworthy of any member of the House of Commons.


James Allen (Jim) Byrne: Mr. Speaker, I expect the hon. member will be making his speech. He usually favours the house on these matters. A corporate enterprise with like earnings-


Donald MacInnis: You
have said that already.


James Allen (Jim) Byrne: -profits or savings, would have paid the federal and provincial treasuries $2,633,360. The co-operative would have paid about 4 per cent, for a total of $207,000.
I would like hon. members to please note that this is no charitable distribution. If we refer again to page 21 of the report, we see under "Members Equity" the sum of $5,080,000 of undistributed savings. This money will be used, of course, either for capital expansion or direct purchase of going concerns.
[DOT] (8:40 p.m.)
The assumption that co-operatives hold down prices, too, is a completely erroneous one. Consumer co-operatives simply do not undercut prices, but offer their patrons a
The Budget-Mr. Byrne nebulous patronage refund which is paid in cash only if the co-operative does not entertain expansionist ambitions. Producer cooperatives such as Western Co-operative Fertilizers Limited, after they got into production, instructed their retail outlets to meet the going price and to promise a patronage refund. Such refund, made possible by the avoidance of income tax and current taxes, is a legacy of the co-operative privileges. I shall be referring to this matter a little later on.
But what has been the experience in other countries in the matter of the price stabilizing effect of the co-operative movement? In Sweden, where consumer co-operatives have been an important factor in the nation's economy for over a hundred years, they account for almost 20 per cent of the total retail business. Yet an article in the Ottawa Citizen of Thursday, January 12, at page 17, had this to say:
Swedes staggering under the world's highest cost of living, were faced today with higher taxes and prices in the toughest budget for at least nineteen years. Observers saw the budget as a determined government effort to correct a faltering economy.
But where will it all end here in Canada? Mr. Fowler, President of Interprovincial Cooperatives, 1962, is reported as saying:
Co-operatives hope to acquire 25 to 35 per cent of the total business of providing goods used by humans.
Mr. Speaker, if this special tax privilege continues, and I feel sure Mr. Fowler's expectations were that it will, his prognostications, in my opinion, were uncharacteristically pessimistic.
Speaking before the standing committee on transportation and communications on October 8, 1966, on behalf of the Canadian Co-operative Wheat Producers, Mr. Gibbins had this to say:
We have been In the international grain business for more than forty years and our experience is widespread. Taken together we own and operate for our member farmers more than forty per cent of the licensed country elevator space in western Canada and about forty per cent of the terminal elevator space and handle about half of the total grains marketed in the three prairie provinces. Our farmer membership accounts for about eighty per cent of all prairie farmers. In addition either separately or together we operate livestock marketing facilities and a packing plant, flour mill, process vegetable oils, publish farm newspapers, manufacture and distribute fertilizers and other farm supplies, and maintain an insurance company.
This is indeed quite a diversified philanthropic organization. If this phenomenal expansion continues and the special tax privilege is left unrepealed, who, in the name of

February 6, 1967
The Budget-Mr. Byrne heaven, but the personal income taxpayer will be left to shoulder the tax burdens being imposed by modern government.
Corporate enterprise in Canada last year paid almost $1.5 billion in income tax. Eighty two per cent of this tax was required for welfare payments. It would be well for members of parliament to consider the tax burden that will fall upon the shoulders of the personal income taxpayer in our country if this special privilege continues to give rise to such monumental vertical integration of co-operative enterprises.
A confirmed anti-socialist, I personally believe such a development to be even more insidious than state ownership and control of our means of production and distribution. Surely, if by some miracle, the state enterprise would show a profit, such profits would at least be calculated for use by the state to the benefit of all the people.
Now, Mr. Speaker, at this stage of my contribution members will begin to wonder just why I have become suddenly involved in a study of this serious matter. I, too, perhaps, would have remained blissfully unaware of this situation had the results not begun to endanger the very jobs and economic wellbeing of my own constituency. Legislators both provincial and federal have been inclined to ignore the problem.
Indeed, Mr. George Davidovic, research director of the Co-operative Union of Canada, commenting in Antigonish, Nova Scotia, recently, on the subject of Income Tax on Cooperatives is reported to have made this contemptible remark:
Furthermore they-
Meaning politicians:
-realize the co-operatives are made up of people, very large numbers of people, and after all it is people who make votes!
Obviously, spokesmen for big time co-operatives look upon modern day politicians as fair game for blackmail. Let me remind Mr. Davidovic that corporate employees are voters too, but I do not wish to debase my argument to that level. My concern is for the economy of Canada generally and the welfare of a large number of my constituents in particular. I hold the integrity of members of parliament in higher regard than does Mr. Davidovic.
On the avenue of fertilizer production involving Cominco and Western Co-operative Fertilizers Ltd. there appears to me to be a

head-on encounter. For a moment let us review the history and development of production and use of fertilizer in western Canada. It began with Cominco, then Consolidated Mining and Smelting Company, which was the only producer until 1954, when Northwest Nitro built its plant at Medicine Hat.
Throughout those early years the major marketing task was to demonstrate to the Canadian farmers the economic benefits which could be achieved in improved yields, earlier maturity and better quality of crops by use of fertilizer.
The progress was slow and tedious. Consumption rose in the three prairie provinces from nil in 1930 to 25,000 tons in 1940, thence to 100,000 tons in 1950 and 170,000 tons in 1960. Since that time growth has been accelerated rapidly and in 1966 consumption was about 700,000 tons.
The rapid acceleration of consumer demand that may be seen is directly attributable to the promotional activities conducted by Cominco over the past 36 years. Their marketing policy has been and continues to be strongly based on technology. Their people are not merely salesmen but are university trained agronomists who have been trained to know soils, crop fertilizer requirements and the proper method of application, thus ensuring the most efficient use of fertilizer by the plant. Cominco has conducted a great deal of fundamental research on prairie soils and soil fertility, and has sponsored research at the three western prairie universities.


Thomas Clement (Tommy) Douglas: Has it also written members' speeches, may I ask?


James Allen (Jim) Byrne: All these efforts have been designed to increase crop productivity. They have placed hundreds and sometimes thousands of demonstration plots.
The first year Western Fertilizer came into production they took over 25 per cent of Cominco's market on the prairies. The sales pitch was to instruct their co-operative controlled retail outlets to quote the going price but offer a patronage refund at the end of the fiscal year.
However, it is natural, and indeed to be expected, that other producers would be attracted to the Canadian prairies. Over the past 12 years competition has grown and at the end of 1966 four additional companies were producing, with a total capacity of 900,000 tons. Cominco's total capacity in Trail, Kimberley, Calgary and Regina was a million tons.
February 6, 1967



These plants supplied the Canadian prairie market with some 700,000 tons in 1966 and exported 1,200 million tons. In addition, J. R. Simplot is currently putting on stream a fertilizer plant of 350,000 tons annual capacity and Imperial Oil has announced their intention of producing 500,000 tons annually commencing in mid 1969. By this time it is estimated the total prairie consumption of fertilizer may be 950,000 tons. It appears from this forecast that the western Canadian market will face a virtual glut of fertilizer over the next five to ten years.
[DOT] (8:50 p.m.)
Mr. C. W. Gibbins, president of the Saskatchewan wheat pool, is reported to have stated that the aim of the co-operative plant in Calgary is to save the western farmers as much as 35 per cent on fertilizer charges. While Cominco can probably maintain a fair share of the western Canadian fertilizer market under all competitive conditions, it is extremely doubtful and, in fact, improbable that it could do so if its main competitor is a co-operative enjoying a special tax privilege. Western Co-operative Fertilizers have already announced a plant expansion ranging up to one million tons.
Fertilizer production is one of the basic elements in the economy of East and West Kootenay. Long and costly freight charges over mountainous territory both to the prairies and the seaboard for the finished product and the high cost of mining and delivery of phosphate rock to the Kimberley and Trail plants constitute a severe disadvantage.
Nevertheless, throughout the years Cominco in response to the demands of a strong and militant industrial union, led the field in wages and working conditions and other social benefits to its employees. Throughout most of those years, Cominco has paid to the federal and provincial treasuries 50 per cent, representing hundreds of millions of dollars income tax on all profits. Yet a glance at the D.B.S. price index listing commodity services and equipment used by farmers and based on 1935-39 prices will reveal that in terms of constant dollars the cost of fertilizer has decreased over the period.


Mr. Deputy Speaker:: Order. I have made allowance for the interruptions which the hon. member encountered during his speech but I must now advise him that the time allotted to him has expired.


Donald MacInnis: Would the hon. member permit a question before he continues?
The Budget-Mr. Byrne


Mr. Deputy Speaker:: The hon. member's time has expired. The hon. member for Halifax.


Mr. McCleave:: We are prepared to give the hon. member more time in which to complete his address. I believe everyone on this side is agreeable to that being done.


Herbert Wilfred Herridge: It is a most interesting speech.


Mr. Deputy Speaker:: Does the hon. member for Kootenay East (Mr. Byrne) wish me to ask for unanimous consent?
Does the house give unanimous consent for the hon. gentleman to continue?


Some hon. Members:: Agreed.


Donald MacInnis: Did I
hear an interjection "no" from the Liberal side?


James Allen (Jim) Byrne: Thank you, Mr. Speaker. The price index reveals that the cost of fertilizer has decreased over the period mentioned. The 1965 index shows farm machinery at 284, a rise of 184 points; building material 405, a rise of 305 points; feed 230, a rise of 130 points; seed 212, a rise of 112 points, and fertilizer 180 for a rise of only 80 points. In the light of these figures, was there real justification for co-operatives, short of a genuine profit motive, entering into the fertilizer production field?
On a relatively small scale tailored to growing western demand, Cominco has developed the first iron and steel production industry in western Canada, but it was, and still remains, a by-product of fertilizer processing. The expansion of this embryonic industry, therefore, is contingent upon continuing fertilizer production and expansion at the Kimberley plant. Here iron tailings, of which there are many million tons in storage and other thousands produced daily, are roasted to produce sulphuric acid and iron calcine. But it is a costly process consuming vast quantities of electrical energy. Sulphuric acid is the main re-agent in all phosphate fertilizer manufacture.
While the production of fertilizer by this process may stand alone under normal competitive conditions, production of iron and steel could not. In other words, it appears to me that the continuation and expansion of the steel industry in the Kootenays is directly related to the production and marketability of fertilizer. Fertilizer production at this time is an extremely marginal operation and cost of money is a major determining factor.
February 6, 1967

The Budget-Mr. McCleave
Any suggestion of a substantial reduction in price, even far less than the 35 per cent proposed by Mr. Gibbins, and made possible only through tax privileges tantamount to a direct subsidy, would simply eliminate corporate enterprise from the market. Such a prospect seriously jeopardizes the economy of the Kootenays and the welfare of hundreds of my constituents.
I ask hon. members, therefore to consider seriously everything I have said. Would it not be appropriate, in this centennial year, to change our tax laws to make them equally applicable to all-to share the tax burden without special privilege to any group?


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


Mr. Deputy Speaker:: The hon. member's time has expired.


Stanley Ronald Basford: May I have the unanimous consent of the house to ask a question?


Some hon. Members:: No.


Robert Jardine McCleave: If I had a
question to ask, I would ask the stout defender of private enterprise production of fertilizer whether he is really standing up for the bulls of Bay street.


James Allen (Jim) Byrne: Make up your own mind.


Robert Jardine McCleave: It it always difficult to follow the hon. member for Kootenay East (Mr. Byrne). The target is so wide and inviting that one is apt to become completely diverted by it and fail to get on with the business at hand.
What we have just heard represents one of the most singular attacks upon co-operatives and credit unions in Canada that I have been privileged to hear in the House of Commons. It was not only outspoken; it was atrocious. Surely the spirit of co-operatives and of credit unions is the banding together of people with limited means in order to achieve a strength which they would not otherwise possess. On this side of the house we are inclined to suspect that the speech so diligently read by the hon. member for Kootenay East, with all its copious notes-we all know that the parts he read sounded much better than the parts he "ad libbed"-was put into his hands by somebody. Obviously he was flying a kite-


James Allen (Jim) Byrne: On a point of order, Mr. Speaker. The hon. member has no right to

imply that I was making a speech prepared elsewhere. I have sat on this side of the house for many years and have often heard what appeared to me to be speeches prepared in the back room of the Leader of the Opposition, but I have never suggested they were not speeches made by hon. member who was delivering them. I prepared this speech myself and delivered it with copious notes.


Robert Jardine McCleave: I would not wish to send anybody else on a suicidal mission by saying they had written the speech. I will acknowledge to the hon. member that he himself did write the speech. I am glad to hear him confess that he wrote it.
The arithmetic of the hon. member may also be open to question. He said he has sat here since 1949, but I cannot recall his presence between 1958 and 1962. I understand that the hon. member for the distinguished riding of Kootenay East at that time was a Mr. Murray McFarlane.
There are obviously other hon. members who wish to come to grips with the hon. member for Kootenay East on the subject of taxation, or non-taxation, of co-operative unions and credit unions. I do not intend to deal with the subject further, except to point out that if the hon. member would lean across and speak to the parliamentary secretary to the Minister of Public Works (Mr. Stewart) he will find, perhaps, that the parliamentary secretary would like to excise some of the paragraphs from the speech which has just been read to us.
[DOT] (9:00 p.m.)
My own thoughts are more in agreement with the speech delivered earlier today by the hon. member for Edmonton West (Mr. Lambert). He said this was an unnecessary budget, and I suppose he was dealing with it from that point of view because of its sins of commission, the imposition of taxes to raise moneys for old age security supplements which could be raised in other ways. With that aspect of his argument I do agree. Later on, however, I would like to attack the minibudget for its sins of omission, that is, the things it could have done but the Minister of Finance did not deign to do.
Before I do so I do not think it is out of place in a budget debate to mention, as a native of New Brunswick, a significant event which took place in that province tonight, the victory of a former member of parliament, who has gained a seat in the provincial legislature. I understand that Mr. Charles Van
February 6, 1967	COMMONS
Horne is going to gain that seat by a margin of about 2,500 votes.


Mr. Keays:: On a point of order, Mr. Speaker, before announcing the wonderful victory in the province of New Brunswick, I think the hon. member for Halifax (Mr. McCleave) should first of all clear up the question of the fertilizers mentioned by the hon. member for Kootenay East (Mr. Byrne). Could he tell us, are these fertilizers extracted from the surface or how far down must we go to get them?


Robert Jardine McCleave: The only source of this substance that I know of was in the speech of the hon. member for Kootenay East (Mr. Byrne). But returning to the event that happened in New Brunswick this evening, I think it must give the Minister of Finance some pause for reflection, because one of the points that was eloquently pressed over and over again-


Joseph Jacques Jean Chrétien: The former hon. member was wise enough to resign from your party.


Robert Jardine McCleave: I am sorry; did somebody have a question?


Joseph Jacques Jean Chrétien: He resigned in 1961 from your party.


Robert Jardine McCleave: Mr. Van Horne is Conservative party leader in the province of New Brunswick, and perhaps his election victory is more significant, since the matter has been raised from the other side, in that his quarrel was not with a gentleman named Mr. Savoie but a gentleman named Louis J. Robichaud, who happens to be the premier of New Brunswick. And I suggest that before the end of the year the happy event of this evening will be translated into an even happier event, namely the replacement of the present government of New Brunswick with one more attuned to the needs of the people.
As I was saying, some of the issues raised in that by-election are very pertinent to this debate. The government's tight money policy lies particularly hard upon Atlantic Canada, and questions have been raised by the return to the federal government of the hon. member for Davenport (Mr. Gordon). This afternoon in this house I saw that hon. member, now Minister without Portfolio, communing with the Minister of Finance. Both have since gone forth and not returned, and now the Minister of Trade and Commerce (Mr. Winters) is here to take their place.
The Budget-Mr. McCleave
I suppose that under the policies of the government those with one point of view hold the fort for a particular time, and those with another point of view hold it at another time, thus trying to beguile the voters. But the return of the hon. member for Davenport to the cabinet was aptly pronounced upon in a recent editorial in the Montreal Gazette, from which I quote in part that it-
-recalls what old Dr. Samuel Johnson said about a man who had married for the second time. "It was," said Dr. Johnson, "the triumph of hope over experience."


James Allen (Jim) Byrne: That's an old one.


Robert Jardine McCleave: Old, but none the less true. Why did the hon. member return to the cabinet? We know that in mid November a number of reverse going away, farewell dinners were held for him saying, "After all, don't go, Walter." Then came the announcement by the Prime Minister (Mr. Pearson) that the lost sheep had returned to the fold.
We recall when he left on November 10, 1965, after an electoral event which could only be counted a disaster by his own party. When he met with his fellow colleagues in the cabinet two days after that event and said, "I am going to resign because I gave you bad advice," to his dismay they accepted his offer, right on the spot.
My own inference from what happened recently-I was not there and nobody has blabbed yet-is simply that the Prime Minister decided it would be unprofitable and unwise to open up the Davenport seat for a by-election. Therefore he was faced with two alternatives, neither one very palatable. One was to let the hon. member resign from the house and have a by-election; the other one was to have him back in the cabinet. There was no middle ground, and he chose what was best in the interests of the Liberal party for the time being, whether it was best for the country or not.
Again I quote from the Montreal Gazette editorial:
In view of the record, there can be little enthusiasm for Mr. Pearson's decision to place Mr. Gordon at the head of a committee to study the implications of foreign ownership and control of Canadian industry. This happens to be the field in which Mr. Gordon, when last holding office, held the most extreme opinions and was well on the way of doing the most damage.
Such policies as he supported brought protests from the Canadian Chamber of Commerce, the Canadian Manufacturers' Association, the Canadian Institute of Chartered Accountants, and from many other sources concerned with practical business.
February 6, 1967

The Budget-Mr. McCleave
To that distinguished list we could add the former president of BRINCO and Rio Tinto, the Minister of Trade and Commerce, (Mr. Winters) who has no aptitude for swallowing the Gordonian philosophy.
What has the Prime Minister done with the shadow minister of finance? I suggest he has done this: He has appointed him in charge of a very important study, a gentleman who has his verdict ready now and is simply going to go around and scout up such facts, and the blessings of such colleagues as he can muster to the cause to support him in that verdict.
It may be said of the Minister of Trade and Commerce that he at least has sense enough to stay away from such a dubious undertaking. It also allows him to go forth with a straight face and let it appear that nothing really has happened by the return of the hon. member for Davenport to the cabinet, clutching his carpetbag of strange and narrow, isolationist, fiscal policies.
I now wish to deal with the budget, Mr. Speaker, and concentrate on its sins of omission. There is one that really stands out. Surely when we study the problems that today baffle Canadians, the most serious problem we have is the failure to come to grips with soaring prices. From the Third Annual Review of the Economic Council of Canada, 1966, quoting from page 191, I point to the paragraph where recommendations included:
[DOT] (9:10 p.m.)
To achieve a more satisfactory reconciliation of economic goals, the main policy "levers" must be complemented by policies whose primary focus is the supply rather than the demand side of the economy. Among these are effective manpower and other policies to encourage the flow of available resources into their highest and most remunerative uses, and to help relieve the economic pressure points which are in part responsible for the appearance of excessive price and cost increases before the economy has reached its potential path.
Later on in the recommendations point 9 might be drawn to the attention of the minister. It reads in part as follows:
It is more than ever important that effective measures be taken to increase productivity at all stages of food production and distribution.
This is all good fodder for the Minister of Finance; and all of this, by the way, was available to that minister some weeks before the budget was presented. The following is a quotation from page 199:
Among the required measures are an important range of supply-oriented policies, including those designed to improve productivity, to strengthen competition, to facilitate adjustments to technological and other change, and to increase manpower training and mobility.

Giving him a few marks and some Christian generosity for some of those points, I still say that the minister has failed absolutely to come to grips with the most important suggestions made by the Economic Council of Canada in that particular report. Instead, some of the excursions and forays of the government into this field smack more of a public relations technique than one of honest and sound administration.
At page 181 of this Third Annual Review a press release of the President of the Privy Council is quoted fairly extensively. This press release dealt with the fact that the Economic Council had been asked to carry on a major investigation in the general area of reasonable price stability. The point I make is that the Economic Council of Canada did not find very much about the terms of reference from the order in council that was passed, but found them from a press release issued by a member of the cabinet. This is one of the most extraordinary things, I think, which one could see in government, even government by press release such as we have now.
Well, sir, I will very quickly conclude. I would have preferred that the budget had dealt not only with the particular point of price stability, something which is bedevilling Canadians, but also the matter of a higher exemption in the income tax. If we agree with the Senate committee on aging, that $1,260 should be a minimum for our old people, we would probably also say that $1,260 should be a minimum for our younger people and that therefore $1,260 should be the exemption for any one person in Canada. I think to that some people would be inclined to reply Q.E.D.-quod erat demonstrandum.
This is another thing which should have been included in the budget in order to help the young married people of this nation who must go out and make capital expenditures for furniture and accommodation in order to get their marriages and eventually their families under way. I think the budget has fallen down sadly in that regard. For these reasons, and because the Minister of Finance (Mr. Sharp) has proposed to impose taxes at this particular time when taxes do not appear to be necessary, I support the amendment and will reject this budget.


Mr. Warren Allmand (Nolre-Dame-de-Grace):: Mr. Speaker, I should like to intervene in this budget debate to discuss a few matters which I consider most important and which I would hope the government would
February 6, 1967

adopt as policy in this centennial year. Last September the Minister of Finance moved that certain matters with regard to the cost of living be referred to the joint committee of the Senate and House of Commons on consumer credit. The committee was asked to look into the causes of the rapid rise in the cost of living with regard to consumer items and report and make recommendations. After many sittings during the months of September, October, November and December the committee issued an interim report in the middle of December in which it made very significant recommendations.
At this time I feel obliged to take strong exception to some of the remarks made by my colleague the hon. member for Kootenay East (Mr. Byrne), because I feel that his opinions do not, according to my understanding, reflect the thinking on this side of the house with regard to credit unions and co-operatives. It always has been my humble feeling that co-operatives were a means whereby small businessmen-the farmer, the fisherman and the consumer-got together, through a co-operative exercise, to make it possible for a man to be the master of his own destiny, to use the words of Dr. M. M. Cody, the great pioneer of co-operatives in Nova Scotia for whom I have always had the greatest respect.


Mr. Winkler:: But you have not got the message.


William Warren Allmand: I think I have. I have been a member of a co-operative for several years.


Donald MacInnis: That is not the message we are talking about.


William Warren Allmand: Mr. Speaker, during the hearings of the committee on consumer credit several witnesses appeared who recommended, not that the role of the co-operatives be restricted, but that it be increased. Several witnesses who appeared before the committee suggested there should be a federal act to govern co-operatives. This is something which we do not have at present. This would help the co-operatives help people through cooperative action, on a broader scale than they can now. At present they are restricted to the provincial co-operative acts. The co-operative federation for many years has been recommending that there be a federal co-operatives act. It may be, after we have studied this matter more in the committee, that we may recommend to the government that such a bill be introduced.
The Budget-Mr. Allmand
It is significant that the Stewart Royal Commission in 1959 recommended that there be a federal co-operatives act, but so far that recommendation has not been accepted either by the previous government or by this government. I think it was in 1906 or 1908 that a Liberal government introduced into this house a bill to establish a federal co-operatives act, but the bill was defeated in the Senate after it had been passed by the House of Commons.
There were other important recommendations in the interim report of the committee on consumer credit (prices). One of the most important recommendations was that we establish a department of consumer affairs. Many members have asked why it is necessary that we have a department of consumer affairs. They say it is important that the consumer be protected but they ask why is it necessary that we have a department and a minister to do it. Of course it is important that the public's interest be protected, and I think it also is important that we have a department and a minister whose sole responsibility is to be concerned with consumer problems and to initiate legislation to protect the consumer and help him with regard to the problems of the rising cost of living, inflation and so on.
Right now there are several statutes which are designed to protect the consumer, but these statutes presently are administered under five separate departments. They are under the Department of National Health and Welfare, the Department of Fisheries, the Department of Agriculture, the Department of the Registrar General and the Department of Finance. Although the statutes are fairly well administered under these departments, I think if we are to have co-ordination with regard to consumer affairs and the administration of these statutes they should be brought together under one ministry.
[DOT] (9:20 p.m.)
Another point is that most of these departments are concerned more with production, and the producer end of farming and fishing, than with the consumer who eventually buys the products of these industries. I hope that when the government introduces the speech from the throne in this centennial year a department of consumer affairs will be one of the items included in that speech.
There were other recommendations in the interim report on consumer affairs which are also very important. These were recommendations to help and protect consumers. One
February 6, 1967

The Budget-Mr. Allmand recommendation was that there should be more and better grading processes of the different products sold on the Canadian market. There was also a recommendation that there should be labelling and packaging of products which would provide more information for consumers as to the contents.
It was found by the committee on consumer prices that one of the groups hardest hit by the inflation which took place between the middle of 1965 and the middle of 1966 were those persons on fixed incomes, and especially the pensioners. That is why we were so ready to welcome around Christmas the legislation of the Minister of National Health and Welfare (Mr. MacEachen) increasing the old age pension by $30 a month and introducing the new concept of a guaranteed minimum income. I hope this guaranteed minimum income will be increased in the future, because although it is a worth while measure at the present time I think that as a guaranteed minimum income it is too low. But I appreciate the fact, and congratulate the Minister of Finance (Mr. Sharp) for this, that when we adopted this measure of social welfare he let it be known that we do not spend large sums of money on measures such as this without paying for them.
I accept what the minister said in this respect, namely that at this particular time the tax measures necessary to provide for the guaranteed minimum income were about as high as we could go, but I hope this income can be raised in the future. I also hope that this is only the beginning, and sooner or later this policy will be applied to other welfare measures such as family allowances, unemployment insurance and similar programs. I think we should maintain a guaranteed minimum income across the board for people who are unemployed, families, and so on, in addition to providing it to our old age pensioners.
The hon. member for Halifax (Mr. Mc-Cleave) mentioned the tax exemption. I support the suggestion that the exemption for people on pension be at least raised to $1,260, because at the present time the extra $500 exemption, as all hon. members know, applies only to those over 70 years of age. Under the new legislation there will be pensioners receiving $1,260 per year through the guaranteed minimum income program, and they will have to pay tax on $160. I do not think this is fair. I hope that in the budget to be presented later this year the minister will take steps to correct this situation.


There are two other matters I should like to raise very briefly at this time. As one hon. member said this evening, a budget debate is the time when backbenchers can raise grievances. One grievance that I should like to raise as a member from Montreal concerns the question of winter navigation on the St. Lawrence river. I believe that in this centennial year the government should undertake an intensive study to see whether a policy of full winter navigation on the St. Lawrence would be economically feasible. Then I hope they would take steps to put that policy into effect. I congratulate the Department of Transport for-


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


William Warren Allmand: Yes.


Donald MacInnis: Whether or not winter navigation on the St. Lawrence is economically feasible, does the hon. member realize it would be morally wrong?


Some hon. Members:: Oh, oh.


William Warren Allmand: I would think that if it was economically feasible, this would not mean it would be morally wrong and necessarily uneconomical for other parts of Canada. I intended dealing with that matter shortly, Mr. Speaker. Perhaps the hon. member for Cape Breton South (Mr. Maclnnis) will disagree with me and if so I hope he will speak on this matter in the house, because I believe it is one that should be debated. In any event, as a member from Montreal I should like to give my opinions on this subject.
I believe that in this age of advancing technology and science, to deny the implementation of this technology and science merely to satisfy one part of the country or another is just another form of featherbedding, and I do not think that in the long run featherbedding benefits society as a whole, in this case Canada. I hope that if such a report does recommend winter navigation on the St. Lawrence as economically feasible, this policy will be carried out. I do not think it would hurt the ports of Halifax and Saint John because I would hope the government would also assist those ports to become as efficient as possible. I doubt whether those ports will ever become sidetracked by the shippers of today's world because I think there is a continuing-and it will become greater-demand for good port facilities. Halifax and Saint John do have good port facilities, and I would
February 6, 1967

certainly support all reasonable measures to help these maritime ports become more efficient and competitive.
The final matter I wish to raise this evening in the budget debate is that of air pollution. I raise this question also as a Montrealer because we had recently in that city a very difficult problem with air pollution. Again I know the government has taken certain initiatives in this respect, but because of the very great danger to Canadians I think the initiatives must be increased. I have here a quotation of Senator Robert F. Kennedy of New York. Senator Kennedy said that:
-air pollution in New York city is so acute that every year "old and young, rich and poor, athlete or infirm recluse ... breathes in 750 pounds of his own wastes".
I have another quotation of the words of Vice President Hubert Humphrey of the United States, who said:
More people are dying from emphysemawhich is a throat disease aggravated by air pollution-

than on the field of battle in Viet Nam-
I think that many of us, because we can go outside and breathe do not recognize the seriousness of this problem right now and believe we can put it off until some time in the future. But I think that if we do not do something now, in 1967, on a very large scale to combat air pollution, in a very few years we will be in very serious trouble, and then it may be too late to do very much about it.
[DOT] (9:30 p.m.)
So I would like to recommend strongly to the government that during Canada's centennial year it adopt what I think are three worth-while programs: first, that it take a serious look at the recommendations contained in the interim report of the committee on consumer prices; second, that it undertake a large scale and effective program on air pollution; and third, that it adopt a serious and positive policy with respect to winter navigation on the St. Lawrence.


Mr. Max Salisman (Waierloo South):: Mr. Speaker, I believe that the budget which we are considering tonight is a good indication and reflection of the government's attitudes. I certainly hope that the hon. member for Kootenay East (Mr. Byrne) who loosed a diatribe against co-operatives such as has seldom been heard in the house, was not reflecting the government's views. The entire
The Budget-Mr. Saltsman budget suffers from defects which we exemplified in the speech made by the hon. member for Kootenay East. It showed a complete lack of concern for what is going on in the country and for the needs of the people of this country, and an excessive concern for maintaining the corporate power, which is already far too great. When we see a co-operative movement in existence, people banding together to try to find an alternative to this power structure, to try to reduce prices, and to insist on competition, it is disconcerting to find this kind of attitude in response. This is regrettable, especially as it comes from one so close to the government as is the parliamentary secretary.
In introducing his budget the Minister of Finance (Mr. Sharp) referred to it as a neutral budget. I think that the word "neutral" is too kind. Perhaps it should be called a "paralysed" budget, because this is what it reflects. It reflects a paralysis on the part of the government in dealing with the great and pressing problems of this country.
We have the problem of Canadian identity and nationalism, and what is the government doing about it? After having permitted this problem to develop throughout the years, all of a sudden it shows a sort of enthusiasm toward solving it. We see people running around in circles, establishing task forces and looking for answers. Royal commissions on this subject have been set up, many books have been written and I do not know how many investigations have taken place and opinions have been offered. However, now that we are faced with a crisis, a task force is being set up. I do not know what solutions this task force will bring, but I have very little hope that it will find solutions to our problems. If these solutions will consist in putting some kind of curb on United States ownership without examining the deep-rooted problems in the economic structure of Canada, then that task force will have been a complete failure and will have misled the Canadian people. I hope sincerely that it does come up with some answers although, judging from its actions and from its personnel, I do not have the kind of confidence which I wish I could have in this particular case.
The Minister of Manpower and Immigration (Mr. Marchand) has been working very hard and, generally speaking, has been applauded for his efforts in the field of manpower. He has introduced a mobility program which, as we pointed out from the start, was
February 6. 1967

The Budget-Mr. Saltsman inadequate because it only touched the surface of the problem, because it was too restrictive in outlook, and because it depended on an entirely new set of ancillary conditions in order to prove its effectiveness. These ancillary conditions are not even being recognized by the Minister of Finance. The result is that the mobility program is a complete failure. The figures on this subject given to us by the Minister of Manpower and Immigration indicate this. One of the reasons for its failure is that we have not provided for the kind of housing that will be needed in those areas into which we attempt to move people. People cannot be moved into non-existing houses. They cannot be expected to move from one area of the country into another area in which housing is not available to them.
An effective immigration program cannot be established when the minister warns immigrants not to go to certain centres in Canada which are perhaps the centres which need them most. On the one hand an agency says to them: Come on over, we need you, we would like to have you, and on the other hand they are told to stay away because no houses are available for them. There is complete confusion and paralysis in terms of defining objectives and trying to achieve them.
An inflationary situation has developed in this country. We have seen the cost of living go up higher and faster than it has for a long time, and the first thing that happens under those circumstances is that the government suddenly forgets the grand words which it used in the Speech from the Throne when it said: "There will be a war on poverty. There will be an end to poverty in Canada. The dispossessed will be considered." We do not hear this any more because we have failed to control the inflationary process in this country and because of a lack of imagination in dealing with this problem. The grand design for our society has gone down the drain, and this budget reflects it. There is hardly a word in the budget about the kind of obligation which the government should have toward those who need the assistance of the government.
The government Is to blame to a large extent for allowing the interest rates to rise. The Minister of Finance even acknowledged some of his responsibility in this matter. We have started to put on the brakes elsewhere. The minute brakes are applied to the general economy it is the large regions in the country

where no brakes are required that suffer most, even in the most overheated circumstances. The disparity in income between prosperous regions in Canada and those who are trying to achieve that prosperity is still great. Where in this budget can the answer be found? Where is there even a recognition that such a problem exists in this country, recognition of the fact that an attitude which is appropriate to an economically viable section of Canada is certainly not appropriate to those areas which need development urgently and which could be developing at this time without adding anything to the problems of inflation or to the difficulties in controlling the cost of living? There is nothing dealing with this in the budget, not even an apparent awareness.


Joseph Jacques Jean Chrétien: Will the hon. member permit a question?


Max Saltsman: Not from that seat.


Donald MacInnis: Mr. Speaker, may I call your attention to the fact that this has happened for the second time this evening, and unless there is a change in the seating and the hon. member has been made minister of the government, he is out of order.
[DOT] (9:40 p.m.)


Max Saltsman: I am sure the parliamentary secretary will understand that I should like to conclude my remarks, but I will try to leave some time available for questions.


Donald Stovel Macdonald: Why don't you accord the same courtesy to us?


Max Saltsman: We have seen medicare sacrificed on the flimsiest of excuses. This was not done in this budget, but it was done in the previous budget and the minister could have corrected that in this budget. Medicare was thrown to the dogs, and why was it thrown to the dogs? There is not an economist in this country who will defend the minister when he says that medicare was inflationary, that medicare was really a serious problem with which he had to cope. The impression remains, and it is an impression I do not like to consider, but it is unavoidable, that the minister took this action to satisfy those companies which were so ably defended tonight by the hon. member for Kootenay East (Mr. Byrne). Perhaps his actions were a sop to these corporate giants who felt that the postponement of medicare was the kind of restraint this country needed.
February 6, 1967

This budget will go down as one of the most insensitive documents ever presented to this house. It is almost without justification in what has been done to convey the chastising image of the government. I believe we are rather fortunate in Canada in that scorpions and whips are rather rare, or perhaps the minister might have used them as the medium to impress upon the Canadian people the fact they have to pay for welfare services, that money does not grow on trees. This is a spurious argument. It has been repeatedly shown that these taxation measures were not necessary to pay for this kind of program.
I should like to read an editorial from the Toronto Star which I think puts the situation rather well. It carried the heading "The Budget: Moralism Through a Fog" and states:
Canada has found Its stern public moralist, its Cromwell of the treasury, in Finance Minister Mitchell Sharp.
If there was any real purpose behind last night's mini-budget except to point the moral lesson that new social security benefits must be paid for immediately. it was not evident in the facts and figures which Mr. Sharp himself gave ...
It is good of Mr. Sharp to care about our moral redemption. But it's an odd system of priorities for a minister of finance. We must hope the economy and the ill-housed can bear so much virtue, such Cromwellian zeal.
The minister and the government which I presume he represented in the presentation of his budget, had an opportunity to bring in social justice as something which should be brought in with pride and satisfaction, a sense of achievement, instead of representing it as a burden. I was interested in a speech the minister made on October 13 to the National Industrial Conference Board in which he gave his views on welfare services:
I am one of those who believe that these vital responsibilities are a proper burden to place equitably upon all of us in dividing the fruits of our increasing productivity which arises in a very large measure from joint efforts made by many.
This is the view of the minister and presumably the view of the government. Our sick are a burden; it is too bad they will not go away. Our elderly are a burden; it is too bad they grew old and have to be cared for. The fact that they worked all their lives to build this nation should not mean they are now a burden. The weak are a burden. The just society that we all seek has become a burden. What sort of philosophy is this for the government to have? What sort of budget is this that reflects this kind of attitude toward the whole problem of social justice in Canada? This budget is regressive, and it is
The Budget-Mr. Saltsman being called regressive by many. Except for a
small bow the minister made to progressiveness in raising the ceiling on the old age pension tax, the minister did not make any other obeisance.
I should like to quote from a column in the Toronto Star which gives the opinion of F. Gerald Townsend, a tax specialist and partner in the chartered accountancy firm of Thorne, Gunn, Helliwell and Christanson. Mr. Townsend said:
The increase in the maximum old age pension tax payment from $120 to $240 per year would mean an increase of 2 per cent to a person with a taxable income of $6,000 per year. However, to a person with a taxable income of $30,000, the increase would be only one half of one per cent.
In a similar way the increase in the federal sales tax from 11 to 12 per cent would bear more heavily by proportion on those with smaller incomes. This was direct violation of the principle of payment according to ability to pay.
If we were going to be chastised, then should not everyone be chastised equally or are some to be chastised more than others, especially those with lower incomes? Perhaps these people have been chastised more because they have lower incomes and deserve to be chastised more. Perhaps this is the attitude of the government. I should like to hear the minister defend his position before the Canadian people instead of adopting this surreptitious way of bringing in this philosophy through the back door. I feel he will find the Canadian people have ways of examining these proposals and evaluating them.
In the speech to which I referred the minister was talking about what a lucky country Canada is. I should like to quote his statement-
When before have men ever been able to look forward with confidence to such cumulative improvements? Where in the world, outside of a few lucky countries like our own, can one hope for so much?
It is true that we are a lucky country, and we have every right to hope for a great deal; but that hope does not appear likely to come to fruition as a result of the actions of this government. I should like to quote from the Second Annual Review of the Economic Council of Canada. They give some of the reasons this country has a right to expect something more than has been presented to us in this particular budget. I quote from page 61 of the report:
It is widely recognized that Canada has important natural resources in the form of minerals, petroleum, forests, fresh water and agricultural land. Historically, natural resources and their development and export have played an important 'role in
February 6, 1967

The Budget-Mr. Saltsman the development of particular regions of Canada and the timing and industrial composition of growth in the country as a whole.
The above considerations indicate that both the extent of capital facilities and the use of land and natural resources per person tend to operate in the direction of a higher level of productivity in Canada than in the United States. In combination with other factors, a large volume in capital, land and other natural resources may be very important elements in high levels of productivity, but they are not sufficient in themselves to assure the attainment of high productivity and high standards of living. Thus, the main explanation for the lower levels of Canadian incomes per employed person must lie in the differences in the quality of Canada's productive resources, and in the efficiency with which these productive resources are combined in the production process-that is, the scales of output, degrees of specialization, the attitudes and effectiveness of management and labour, and so forth.
Instead of "so forth" we could have said, "because of government policies." In Canada, we have the greatest opportunity to be the most affluent nation in the world. Instead of that, Mr. Speaker, with all these advantages and opportunities, our level is about 25 per cent lower than that of the United States.
[DOT] (9:50 p.m.)
It is not that our people do not work as hard. I think we see instances where they work just as hard as it is possible for any group of people to work. But without proper policies and the proper involvement of the government in the affairs of the nation in order to get the maximum use of our resources, our capital and our labour, we cannot achieve these levels that we are entitled to expect.
The most indefensible attitude of this government is when it talks about productivity, congratulates itself on its level of productivity and what it has done to achieve it. As we look at the budget, Mr. Speaker, where do we see a single measure which indicates we are going to do something to improve productivity? There is only a negative measure. Perhaps the inference is that if we do not have a universal old age pension in Canada we will have productivity, which is a fallacy.
On the question of sales tax, Mr. Speaker, is there any indication that the sales tax can be used in a selective manner to ensure productivity? We see that not at all. The very items which are needed to assist productivity are those which the minister is insisting upon taxing.
As to investment policy, Mr. Speaker, is there any direction or guidance given to the country in this budget? Is there any indication Of the role which is played by social


capital in improving productivity? Are there any measures in relation to the research programs which are so badly needed in this country to improve our productivity? Where are the measures to rationalize Canadian industry, which almost every expert now agrees is one of the central problems facing this nation? There is none of these measures, Mr. Speaker. But there is moralizing.
In conclusion, Mr. Speaker, I should like to say that what this country needs is a little less moralizing from the minister and his government and a few more ideas about how to run the nation. This budget is a document of omissions of those things which should have been done. It says nothing to the Canadian people. It offers no hope to those looking for a government to provide a sense of direction to the nation. It offers no challenge to the people of Canada to rally around ideas being developed by the government, so as to create the great society we all seek. It does none of these things, and for that reason has to be condemned.
The minister would have been far better off never to have introduced such a budget. He has displayed the nakedness and poverty of the government's program. It is almost an insult to bring in a budget of this type. The prideful minister said he was going to bring in a budget and he brought one in, even though the reasons for a budget no longer existed. The minister should have maintained his pride by bringing in a budget of a positive nature, one which would have encouraged the economy and spurred the nation on to those goals that it seeks.
In view of the lateness of the hour, Mr. Speaker, I would be very pleased to accept the question the parliamentary secretary seemed so keen on putting. I see he has had his question answered during the course of my speech, and I am very pleased that I have been able to anticipate the problem that was in his mind. I hope he has listened carefully to what has been said and will be able to convey these thoughts to the minister when he sees him.


Joseph Jacques Jean Chrétien: Mr. Speaker, I did just want to make one comment. The hon. member said that in the budget-


Mr. Speaker:: Order, please. The hon. member cannot make a comment. He can ask a question if the hon. member who has the floor allows him to do so.


Joseph Jacques Jean Chrétien: Is the hon. member aware that in the budget last March which dealt
February 6, 1967	COMMONS DEBATES	12721
Proceedings on Adjournment Motion
with the general economy for this year the as part of Canada, you have to say that what-government made the provision that a lot of ever may have been the government meas-the additional measures introduced at that ures or the government's intentions in these time would not be applicable to the designat- particular matters, they are far from being a ed areas? Probably the hon. member is not howling success.
aware of that.	May I call it ten o'clock, Mr. Speaker?


Max Saltsman: Mr. Speaker, I am very well aware of that item to which the hon. gentleman refers; but if the government considers that that particular item will do anything more than put a false hope into the hearts of people in the designated areas it will have to examine that idea again. Because that is all that measure will do.
May I call it ten o'clock?


Mr. Speaker:: I am informed that the hon. member has three minutes to go before his time expires. Is it the wish of the house that the hon. member be allowed to terminate his oration?


John B. Stewart: May I help the hon. member out by asking him a question?


Max Saltsman: I thank hon. members for permitting me to conclude.


John B. Stewart: May I ask the hon. member a question to spin out his speech? Would he tell the house whether in fact he is opposed to the designated area program, not in its details, but as a general program? I would not want him to leave any misunderstanding on that score.


Max Saltsman: I am not opposed to the concept of designated areas, Mr. Speaker, but certainly I do not think that the proposals the government has introduced can be considered the least bit satisfactory in meeting the needs of the people in the designated areas. If I recall the occasion on which I spoke on this subject, I called the program a cruel hoax. I said it was a program that looked as if it offered hope and encouragement, but that it would fail miserably and would not develop the kind of opportunities that were needed in those parts of Canada.


John B. Stewart: Would the hon. member admit that these are pretty vague words he is now tossing around?


Max Saltsman: All I know is that the way to judge a program is by its effectiveness. If you look around this country and note the depressed areas which have not achieved the level of prosperity to which they are entitled
[DOT] (10:00 p.m.)


Mr. Speaker:: I gather the hon. member's time has about expired.


Donald Stovel Macdonald: So has the hon.
member.


Mr. Speaker:: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION

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

['Mr. Speaker, first of all I should like to commend\n\nDEBATES\tFebruary 6, 1967\nthe hon. member for the Northwest Territories (Mr. Orange) for his energy and ingenuity in looking after the people in his area. I presume that is his responsibility and I believe he is doing it most admirably. In addition to that he has arranged to have the mayor and councillors of Fort Smith come to Ottawa next Monday. We will discuss matters with them. I should like to commend the mayor and his council for having contracted with an engineering firm in Edmonton to make further suggestions concerning what the city might do in the interim.\nFirst of all, I should like to say to the hon. member-and I know he agrees with me- that none of us are very surprised about any particular area in the Northwest Territories at the present time. The hon. member is more aware than I of the abundant resources-the metals and now gas and oil-which are indicating themselves in so many places. We have a gas field in the Northwest Territories which is only about five weeks old. It has prompted a pipe line company already to announce its intention to build a 20-inch pipe line into the area. The resources of metals, principally gold, copper, lead, zinc, and asbestos are well known and are beginning to show up everywhere.\nThe main thing that we could do for Fort Smith at the present time would be to come to some agreement with the government of the province of Alberta in respect of diminishing the size of Wood Buffalo Park, which covers an area of 17,000 square miles. There is a herd of buffalo there and we intend to keep them, but they do not need 17,000 square miles. I have spoken to the responsible minister of the province of Alberta and to Premier Manning of Alberta. I told them we would be very happy to negotiate for part of that park to be developed, if we could get compensating land in southern Alberta. I would hope we could carry those negotiations further. There is there an enormous quantity of very high-grade spruce, and the construction of a saw mill, lumber mill and planing mill in Fort Smith is realistic if we could use that timber. This was indicated by my friend the hon. member for Northwest Territories (Mr. Orange).\n[DOT] (10:20 p.m.)\nWe are doing other things. The acting commissioner of the territories has been in Fort Smith for three or four days. We have indicated that we intend to move in there a number of institutions that would otherwise\nFebruary S, 1967\tCOMMONS\nbe in other parts of the territories. We are thinking in terms of a hospital at Fort Smith, possibly with a residential nursing facility, because many of the native women make very, very excellent nurses indeed. We have in contemplation a great variety of\nProceedings on Adjournment Motion things. I will be glad to see the mayor when he comes here, and I think when he goes away he will feel a little happier than he does at the present time.\nMotion agreed to and the house adjourned at 10.23 p.m.', 'Tuesday, February 7, 1967']
Herbert Wilfred Herridge: Mr. Speaker, I am glad to have the opportunity to speak for a few minutes about a question which is important to all members of the house who have any feelings for their fellow-men. On January 26 I asked the following question of the right hon. Prime Minister, to be found at page 12260 of Hansard:
My question is based on a statement contained in a question asked of the Prime Minister by the hon. member for Bow River on January 24 in which he said, as recorded at page 12159 of Hansard:
"To review my question, it referred to $50,000 of aid to Viet Nam of which ninety per cent was going to North Viet Nam, to the Viet Cong, for purposes other than to assist civilian victims."
Has the Prime Minister received a letter from Dr. A. M. Inglis, chairman of the committee on Canadian aid for Viet Nam civilians, which committee, I might mention, is sponsored by a number of Canadians including the leader of our party and the hon. member for Kootenay West, which outlines the facts with respect to the distribution of this aid-
There was more questioning and the hon. member for Bow River (Mr. Woolliams) asked supplementary questions. I say that the lusty member for Bow River had been misinformed. I expect the parliamentary secretary this evening will be better informed than the hon. member was when he asked the question.
I have in my hand a letter written by Major General A. E. Wrinch, C.B.E., C.D.,
12722	COMMONS DEBATES	February 6, 1967
Proceedings on Adjournment Motion National Commissioner of the Canadian Red Cross Society, addressed to A. M. Inglis, Esq.,
M.	D., F.R.C.S. (C), Canadian Aid for Viet Nam Civilians, P.O.B. 2543, Vancouver 3, B.C. I wish to quote a couple of paragraphs from the letter:
During my recent visit to Geneva on League of Red Cross Societies business, I took the opportunity of discussing this subject with Mr. Roger Gallopin, Executive Director of the I.C.R.C. Mr. Gallopin stated that the needs among Viet Nam civilians everywhere are great but are almost certainly greatest in N.L.F. territory and next in North Viet Nam. Medical and first aid supplies are the priority item and the I.C.R.C. has been shipping these to Hanoi for care of wounded and sick civilians in both North Viet Nam and N.L.F.-controlled territory-those for North Viet Nam being consigned to the Red Cross Society of that country, those for
N.	L.F. territory to an N.L.F. representative in Hanoi whose address was provided-
And again, later:
"The I.C.R.C. urgently needs more money for purchase of supplies as funds donated by the Red Cross Societies of various countries have been largely disbursed. Although permission has not yet been granted for an I.C.R.C. delegate to function in North Viet Nam and N.L.F.-controlled territory, the I.C.R.C. seeks our support of their program in these areas. Acknowledgment of previous shipments to North Viet Nam has been received and Mr. Gallopin has no reason to suspect that the goods have not been properly used. He urges us to participate."
As you will realize, the above represents a change of attitude on our part which resulted from the very useful conversations that I had with Mr. Gallopin of the international committee of the Red Cross in Geneva.
This letter is signed by Major-General A. E. Wrinch, National Commissioner of the Canadian Red Cross Society.
Now I should like to quote from a letter I received from Dr. Inglis dated January 9, in which he says:
The needs of all parts of Viet Nam are recognized by the Canadian Red Cross which has sent assistance to all areas.
The concluding paragraph is as follows:
Meantime, your readers can assist all civilians in Viet Nam by sending donations to this committee at P.O. Box 2543, Vancouver 3, B.C. We have already received more than $20,000 and have set an objective of $50,000 for 1967 because of the escalation of the war. These funds are distributed in the approximate proportions of population and need; 45 per cent to the north, 45 per cent to the National Liberation Front areas, and 10 per cent through the international committee of the Red Cross to civilians in strategic hamlets in Saigon-controlled areas.
That letter is signed by Dr. A. M. Inglis, Chairman of Canadian aid for Viet Nam Civilians, Vancouver.

I am sure the hon. member for Bow River (Mr. Woolliams) would not have asked the question he did had he been fully aware of the facts. This miniscule aid which we Canadians are sending to the people in North Viet Nam and South Viet Nam is a drop in the bucket compared with the millions being spent daily there now, but they serve to indicate to those people that we have a heart for suffering people everywhere. I look forward to hearing the parliamentary secretary's reply.


Donald Stovel Macdonald: I
appreciate this opportunity to put on record again the response which was given by the Prime Minister several days ago to the hon. member for Bow River in connection with the question he raised.
As the hon. member for Kootenay West (Mr. Herridge) has said, some question was raised at that time as to the validity of transfers of funds for medical assistance in North Viet Nam and as to the use to which such funds were being put. I would draw attention to the response given by the Prime Minister on January 26 last as recorded at page 12260 of Hansard in which the right hon. gentleman said:
Our information is that the supplies that may be going to Viet Nam are medical supplies, and there is no authorization required under our law to send medical supplies to any part of the world.
The Prime Minister as well made it clear that there is in no sense a violation of Canadian law in this particular program of sending medical supplies to North Viet Nam.
With respect to the questions and answers on January 24, the hon. member for Kootenay West (Mr. Herridge) suggested I might be able to clarify the matter further. However, modesty compels me to admit that the answer given by the right hon. gentleman on January 24 as reported at page 12159 cannot be improved upon. After pointing out that there was no objection to transferring funds, or nothing in the law to prevent the transfer of funds, the Prime Minister went on to say:
As to the second aspect of the question, concerning the use made of supplies or funds sent to North Viet Nam once they have reached their destination, we have no knowledge in that regard and I doubt whether the government of North Viet Nam would regard it as within the responsibilities of our representative on the international commission to seek such information.
February 6, 1967	COMMONS
[DOT] (10:10 p.m.)
I understand that the international committee of the Red Cross has endeavoured to obtain this kind of information with respect to its own consignments to North Viet Nam but without avail. However, I also understand that a representative of the Canadian friends committee was in Hanoi recently and did have an opportunity to talk with representatives of the North Viet Nam Red Cross.
The hon. member has put on record this evening a statement by the international representative of the Red Cross stating that they have no reason to be apprehensive about the misappropriation of funds made available to the North Viet Nam Red Cross. As the Prime Minister has pointed out, there is no effective way the Canadian government could scrutinize how Canadian funds were being used in this regard. The hon. member has also referred to the statement in the letter of Dr. Inglis that no government funds have been made available to North Viet Nam. As was pointed out earlier today by the Secretary of State for External Affairs (Mr. Martin), in fact there has been no request for assistance from North Viet Nam.



Mr. R. J. Orange (Norihwest Territories):: Mr. Speaker, at the outset I would like to thank the Minister of Indian Affairs and Northern Development (Mr. Laing) for being in the chamber tonight. He is well aware of the subject matter which I wish to raise and his presence shows his concern about it. I am sure that will be appreciated in the community of Fort Smith for which I am now speaking.
I would also like to express my appreciation for the dispatch with which the minister acted in regard to implementing some of the recommendations of the Carrothers commission with respect to the granting of self-government to the Northwest Territories.
Last Monday I asked the minister when he would be able to announce the level and type of assistance from the federal government to be made to the town of Fort Smith, to ensure that no disastrous economic effects could be felt by the Fort Smith community as a result of the movement of many families from Fort Smith to Yellowknife, which has now been declared the capital of the Northwest Territories.
Proceedings on Adjournment Motion
The minister replied to the effect that there was a certain amount of thinking going on in terms of institutional buildings for Fort Smith. I then asked if the minister would consult with his colleague, the Minister of Industry (Mr. Drury), to see if the provisions of the Area Development Incentives Act could be applied to the community and you, Mr. Speaker, suggested that my question was not proper at that time.
Tonight I hope to impress upon the minister that he and his department have responsibility to this town not only in terms of his being the minister responsible for northern development, but in terms of a particular and peculiar responsibility in this special instance. The problem of the community of Fort Smith arose as the result of a decision of the federal government to locate the capital of the Northwest Territories in Yellowknife, as recommended by the Carrothers commission and the Council of the Northwest Territories.
Prior to this decision Fort Smith was considered the administrative centre of the Northwest Territories, and for that matter had been recommended as the capital in 1962 by a previous council, with the result that private industries were counting heavily on the growth of the town in the event that the community was declared the capital. Because the federal government was charged with making the final decision I maintain, as do the residents of Fort Smith, that the federal government has a direct responsibility not only to assist the community but to initiate measures which will ensure stable growth and remove the threat of disaster which now hangs over it like Damocles' sword.
It may be argued that the initiative is up to the territorial government and the townspeople themselves, but I come back to the premise I established a moment ago, that a federal government decision has caused the present chaotic situation, and therefore the federal government, through the minister and his department, has a direct responsibility to bring hope and aid to the town.
There is a precedent for this, Mr. Speaker, in terms of the decision made approximately 12 years ago to abandon the town of Aklavik and create the new town of Inuvik. At that time the federal government subsidized all the business townspeople who wished to move from one town to the other, and I suggest that this might be taken into consideration in the present case.
12724	COMMONS
Proceedings on Adjournment Motion
What is the future of Fort Smith? I am not worried about its future, nor are the townspeople, provided we have the encouragement and incentive of the federal government behind us. We must have now, however, some indication from the federal government about the type and level of assistance which will be available to the town. The town is not standing waiting for the federal government to take the initiative. The mayor of Fort Smith, Mr. Paul Kaiser, will be in Ottawa next Monday, together with the representatives from the town to give the minister his views and ideas concerning how the town can grow and develop. In the meantime there are other ideas. Last week I spent a very delightful two and a half hours with 450 people who are residents of the town. Naturally there was some concern. There was some hostility. However, there was no fright; I think this is extremely important.
It was suggested that this great roads program which has been brought in by the government might be re-evaluated in order that the road development could commence in the area of Fort Smith, rather than at the east arm of Great Slave lake. The Department of Agriculture undertook to do a land survey. I should like to know what the results are.
In the time which remains to me I should like to suggest to the minister that there are two important factors which he must consider. The first concerns the establishment of some type of a prefab housing factory in an area where there is lumber-and that is the Fort Smith area. There is a proposal to build approximately 100 homes in Yellowknife this year. I believe the Department of Indian Affairs and Northern Development, in consultation with the territorial government and the Department of Industry could bring into effect some form of incentive so that a factory could be established in this particular area to provide the basic prefab facilities for this great growth in Yellowknife itself.
Finally, Mr. Speaker, I should like to impress upon the minister the urgent necessity to establish a university of the north which would include in its curriculum at least the first two years toward a Bachelor of Arts degree. Hopefully the minister will be able to bring together all the interested parties, including members of the territorial government and the federal government, to discuss the matter fully and completely.


Arthur Laing: Mr. Speaker, first of all I should like to commend

DEBATES	February 6, 1967
the hon. member for the Northwest Territories (Mr. Orange) for his energy and ingenuity in looking after the people in his area. I presume that is his responsibility and I believe he is doing it most admirably. In addition to that he has arranged to have the mayor and councillors of Fort Smith come to Ottawa next Monday. We will discuss matters with them. I should like to commend the mayor and his council for having contracted with an engineering firm in Edmonton to make further suggestions concerning what the city might do in the interim.
First of all, I should like to say to the hon. member-and I know he agrees with me- that none of us are very surprised about any particular area in the Northwest Territories at the present time. The hon. member is more aware than I of the abundant resources-the metals and now gas and oil-which are indicating themselves in so many places. We have a gas field in the Northwest Territories which is only about five weeks old. It has prompted a pipe line company already to announce its intention to build a 20-inch pipe line into the area. The resources of metals, principally gold, copper, lead, zinc, and asbestos are well known and are beginning to show up everywhere.
The main thing that we could do for Fort Smith at the present time would be to come to some agreement with the government of the province of Alberta in respect of diminishing the size of Wood Buffalo Park, which covers an area of 17,000 square miles. There is a herd of buffalo there and we intend to keep them, but they do not need 17,000 square miles. I have spoken to the responsible minister of the province of Alberta and to Premier Manning of Alberta. I told them we would be very happy to negotiate for part of that park to be developed, if we could get compensating land in southern Alberta. I would hope we could carry those negotiations further. There is there an enormous quantity of very high-grade spruce, and the construction of a saw mill, lumber mill and planing mill in Fort Smith is realistic if we could use that timber. This was indicated by my friend the hon. member for Northwest Territories (Mr. Orange).
[DOT] (10:20 p.m.)
We are doing other things. The acting commissioner of the territories has been in Fort Smith for three or four days. We have indicated that we intend to move in there a number of institutions that would otherwise
February S, 1967	COMMONS
be in other parts of the territories. We are thinking in terms of a hospital at Fort Smith, possibly with a residential nursing facility, because many of the native women make very, very excellent nurses indeed. We have in contemplation a great variety of
Proceedings on Adjournment Motion things. I will be glad to see the mayor when he comes here, and I think when he goes away he will feel a little happier than he does at the present time.
Motion agreed to and the house adjourned at 10.23 p.m.

Tuesday, February 7, 1967