1967-06-29

Mr. Speaker:: I have the honour to inform hon. members that messages have been received from a number of commonwealth parliaments extending congratulations and good wishes to the House of Commons and to Canada on the occasion of our centennial.
These messages have been addressed to the house by the New Zealand House of Representatives, the Senate and House of Representatives of the Australian parliament, the House of Representatives of Trinidad and Tobago, the National Assembly of Basutoland, the House of Representatives of Ceylon and the National Assembly of Kenya.
I know hon. members will want me to reply expressing our thanks to our colleagues in the commonwealth legislatures for their generous communications.


Some hon. Members:: Hear, hear.



PRESENCE IN GALLERY OF MRS. ARTHUR MEIGHEN

Mr. Speaker:: May I be permitted to bring to the attention of hon. members the presence in the Speaker's gallery of the wife of the late distinguished prime minister of Canada, Mrs. Arthur Meighen.


Some hon. Members:: Hear, hear.



PRIVILEGE


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I rise on a question of privilege with regard to the accuracy of the Votes and Proceedings of this house, and I do so both in my interest and in the interest of all members of this house.
Yesterday, Mr. Speaker, a motion for the presentation of an Address to Her Most Excellent Majesty Elizabeth II was agreed to. That motion was passed by the House of Commons, but only on division, as I shall indicate in a few minutes. The fact that the motion was passed on division is not mentioned at all in the Votes and Proceedings of the Canadian House of Commons for its sitting of Wednesday, June 28, 1967, that is yesterday. And that is the correction I want to be made in the Votes and Proceedings.
[DOT] (2:40 p.m.)
Yesterday, Mr. Speaker, at the end of my remarks on this motion, as indicated in the last paragraph, I said:
But as far as this motion is concerned, Mr. Speaker, if it is carried, I ask that it be on division.
Further on, the following words appear:


[Stage Direction]
Motion agreed to.
Gilles Grégoire: On division.
Therefore, it is clear, and clearly stated in Hansard, Mr. Speaker.
Further, in the same text I had indicated a couple of times my objection to the motion. For instance, I said, as reported on page 2061 of Hansard, and I quote.
If it is agreed to, I would like the words "on division" mentioned-
Further on I again stated:
However, when the motion is presented and the words "on division" are mentioned, I beg Her Majesty the Queen of England to believe that I have nothing against her personally; on the contrary. I wish her a pleasant stay in Canada.
Now, Mr. Speaker, there is a quantity of precedents showing that when a motion is passed on division it must be mentioned in the Votes and Proceedings. I have some examples here taken during this second session of the 27th parliament.
On page 71 of the Votes and Proceedings of May 25, 1967, we can read the following:
On motion of Mr. Pennell, seconded by Mr. Trudeau, it was ordered, on division-that-
The words "on division" are mentioned. Why? Because we see on page 551 of Hansard of this year, and I quote:


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Mr. Herridge:: No.

June 29, 1967
Privilege
Therefore, the hon. member for Kootenay West (Mr. Herridge) was the only one on that occasion to say "no" and the words "on division" were mentioned in the Votes and Proceedings. That is a precedent.
Therefore, knowing the hon. member for Kootenay West as I do and since his dissenting voice was registered in the Votes and Proceedings, when he was the only one to oppose the passing of a motion, I am sure that he will support my request to the effect that my opinion or my point of view should also be mentioned in yesterday's Votes and Proceedings.
I could also refer to the Votes and Proceedings of the sittting on Wednesday, June 7, and I quote:
After debate, the said report was concurred in, on divisionbecause an hon. member had mentioned "on division", as indicated in Hansard.
Another precedent can also be found in the Votes and Proceedings of Thursday, June 8, 1967, as well as in those of Friday, June 16, where the words "agreed to on division" or "passed on division" are again mentioned.
During the sitting of June 20 last, the hon. member for Winnipeg South Centre (Mr. Churchill) was the only member to oppose a motion moved by the hon. member for Riviere-du-Loup-Temiscouata (Mr. Gendron), as reported on page 1711 of Hansard, and I quote:


Mr. Speaker:: Is it the pleasure of the house to adopt the said motion?


Mr. Churchill:: On division.
Now, the Votes and Proceedings for the same day indicated that the motion was carried on division.
Mr. Speaker, since the hon. members for Winnipeg South Centre and Kootenay West had the benefit of having their dissent recorded in the Votes and Proceedings, I should like to ask for the same privilege, the same right, with regard to the dissent I recorded yesterday to the motion, namely that a correction be made to yesterday's Votes and Proceedings, so as to show that the said motion was passed on division.
There are also other precedents, Mr. Speaker. If we refer to the standing orders of the house, we find that there is no specific section in the standing orders of the House of Commons of Canada, and reference must be made to the standing orders of the house of commons in London. Now, Mr. Speaker, it can be seen that in the British parliament, the mother of parliaments, where first appeared
[Mr. Grfegoire.l
parliamentary life as we know it today, there are currently independent members from Scotland and Wales, and their rights and privileges are respected in fact, everyone makes it a point to respect them.
Well, that is a precedent that must be of considerable import for all those who, like me, have faith and believe in British parliamentary institutions.
Now, in closing, I should like to say that it was the opinion of all to vote an address yesterday. That is stated in the Votes and Proceedings, it is the opinion of all. But my own opinion, to the effect that it was passed on division has not been mentioned. To my mind, this must be corrected. Therefore, I ask you to see to it that this correction is made. The Speaker of the House of Commons, whether here or in London, is first and foremost the protector of the rights of the members and particularly of the minorities.
If there is a weak minority, a small minority in this house, Mr. Speaker, it is surely the member for Lapointe, because I am the only one who thinks in this way, and proof of this is that I was the only one to call "on division". In the circumstances, being the weakest of all minorities in this house, I ask you, Mr. Speaker, to perform your duty towards me, to protect my rights and privileges, and to insert in the Address and in the Votes and Proceedings that this motion was passed on division. If you want my name to be recorded, Mr. Speaker, I have no objection.


Mr, Speaker:: The hon. member raises an interesting point of procedure and I can assure him that I will not fail to consider it. I have taken due note of his suggestions. He suggests that this dissent, the fact that he objected yesterday to the motion introduced must be recorded in the Votes and Proceedings. He is requesting that this be done also with regard to the Address. In my opinion, there is no question of recording as an appendix to a resolution passed by this house the dissent or the refusal of an hon. member, even of a minority group of hon. members. The hon. member might have a point which deserves to be considered as far as the Votes and Proceedings of the House of Commons are concerned, and again I assure him that I will be pleased to study the suggestion he has just made.


Gilles Grégoire: May I take it, Mr. Speaker, that this will be reported in today's Votes and Proceedings?
June 29, 1967


Mr. Speaker:: The hon. member can only conclude that his representations will be considered.



JUSTICE AND LEGAL AFFAIRS

[Stage Direction]
Second report of standing committee on justice and legal affairs-Mr. Cameron (High Park).


Mr. MacEachen:: Mr. Speaker, I would like to advise the house of a rearrangement in the business for the next two days in an endeavour to meet the convenience of a number of hon. members.
We shall begin today with the estimates of the Department of National Revenue, as was previously indicated. If these are completed we will then take the estimates of the Department of Public Works, except in the eventuality that the estimates of the Department of National Revenue are completed early in the afternoon, in which case we will take the estimates of the Department of National Defence until the end of the afternoon sitting and then go on with the estimates of the Department of Public Works.
Tomorrow, Mr. Speaker, we will begin with the estimates of the Department of Trade and Commerce, a course which I think will meet with the agreement of hon. members in view of the statement that will be made tonight by the Minister of Trade and Commerce. On Tuesday we will continue with the estimates of the Department of Public Works.



FINANCE


Mr. Steven Otto (York East) moved: for leave to introduce Bill No. C-144, respecting customs tariffs.


Some hon. Members:: Explain.


Steven Otto: Mr. Speaker, I am always apprehensive about introducing a bill which contains a very radical idea. I have learned that reform should be undertaken by very gentle measures. However, this bill introduces a new concept of export-import parity in place of the old idea of tariff control. In my usual style it would repeal all the old act and replace it with a brand new measure.
Inquiries of the Ministry
The purpose of the bill is to do away with tariffs as a punitive measure to restrain the importation of goods into Canada. Instead the bill introduces a system by which the amounts formerly paid to the government by importers by way of penalty will be directed to Canadian exporters as an incentive.
In dealing with Canada's balance of trade with other nations this bill discards the old assumptions that the sale of natural resources could validly be considered as part of a favourable balance of trade on the part of Canada, and adopts a new proposition that if Canada is to maintain a trade balance with other nations it must be done on the basis of equating dollar labour contents of goods imported with the dollar labour content of goods exported.
Motion agreed to and bill read first time.



BUSINESS OF THE HOUSE

[Stage Direction]
SUSPENSION OF SITTING TO ENABLE MEMBERS TO GREET HER MAJESTY

On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister, and I do not think there will be any division in this regard even on behalf of petty puppets who try to use parliament for their own purposes.


Some hon. Members:: Hear, hear.


John George Diefenbaker: Would the Prime Minister agree that the opportunity should be given members of this House of Commons to be present this afternoon at the arrival of Her Majesty the Queen and Prince Philip? I think this would be a very proper step to take, and one which should receive general support.


Some hon. Members:: Hear, hear.


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I appreciate the suggestion, made by my right hon. friend, which also was made yesterday by my hon. friend from Red Deer.
I looked into the matter this morning, and I find that an invitation to be present at the arrival of Her Majesty the Queen was sent to hon. members. They were asked to reply stating whether they would be able to do so and, in the event that they were, they would be sent tickets and accommodation would be reserved for them at the airport.

June 29, 1967
Inquiries of the Ministry
The replies indicated, Mr. Speaker, that there would be a great many members left to carry on the business of the house. I shall be glad, however, to see whether we can give some further consideration within the next few minutes to the suggestion made by the right hon. gentleman. I know it is important also that we get on with the business of the house, but it might be possible to combine the suspension of our sittings on this occasion with the addition of an hour or so later on so we would not lose any time.


Hon. Michael Slarr (Ontario):: Mr. Speaker, I wish to address a question to the government house leader. I refer to the announcement he made earlier that after the orders of the day we will proceed with the estimates of the Department of National Revenue, followed by those of the Department of National Defence. Some hon. members who are interested in participating in the discussion of the estimates of the Department of National Defence have planned to go to the airport to meet Her Majesty the Queen and the Duke of Edinburgh. I am sure even the Minister of National Defence plans to do likewise. In order that hon. members who wish to speak on this topic will not be deprived of the opportunity to do so, would the house leader consider calling the estimates of another department?


Allan Joseph MacEachen: Mr. Speaker, I appreciate the point made by the hon. gentleman and will be glad, if the estimates of the Department of National Revenue are passed, to call the estimates of another department after I have had a word with the other house leaders.


Michael Starr: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister. I wonder whether the Prime Minister would consider, instead of going on with the estimates of another department, adjourning the house so that everyone will be given an opportunity to meet Her Majesty the Queen on her arrival at the airport.


Lester Bowles Pearson: Mr. Speaker, I should like to suggest that we take some time off tomorrow. My hon. friend the government house leader will discuss this matter with the house leaders of the other parties. Then hon. members will be able to take part in the ceremonies in front of the parliament buildings. They would be finished around four o'clock, I think, and

we could then start again and perhaps continue for an extra hour.
I feel it would perhaps be desirable to recess this afternoon, say at 4.30, so those hon. members who wish to go out to the airport may do so, on condition that we work later tonight on our return to the house. But in the rearrangement of our work we should not forgo private members' hour. Four thirty might be a little too late; we had better make it four o'clock.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: We could adjourn from four o'clock to seven o'clock.


Some hon. Members:: Agreed.


Mr. Speaker:: Order. The suggestion made is that the house suspend its sitting from four o'clock until seven o'clock and resume at seven o'clock. Is it understood that from seven o'clock to eight o'clock tonight will be private members' hour?


Some hon. Members:: Agreed.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I have a supplementary question for the Prime Minister. Would the Prime Minister not consider giving up private members' hour tonight and holding it over until later? I expect little will be accomplished in that hour this evening anyway?


Lester Bowles Pearson: I think we ought to keep private members' hour today. There is a bill we would like to have looked at during that hour. If we could dispose of that bill in say half an hour we could then go on with public business.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, the other question I have for the Prime Minister has to do with the suggestion made a couple of days ago that there might be the possibility of a discussion between King Hussein and the Prime Minister particularly with reference to the position of the Arab refugees. Is it possible that such a meeting might take place? If
June 29, 1967

not, would the Prime Minister give more particulars than the generalities we have had to date concerning the extent to which Canada is prepared to accept refugees?
Second, because King Hussein is king of that portion of Jerusalem which has now been taken over by Israel administratively and municipally, will the Prime Minister say whether Canada supports the stand taken by Israel that the entire city of Jerusalem should fall under the jurisdiction of Israel, a claim which I think is reasonable under all the circumstances.


Lester Bowles Pearson: I think there are three questions with which I have been asked to deal. The first concerns a possible discussion with King Hussein, who is in the United States at the present time, and who I understand is leaving for his homeland tomorrow evening. It has been impossible to arrange a meeting between King Hussein, myself and the Secretary of State for External Affairs, who are in Ottawa. However, our ambassador to the United Nations has seen the ambassador from Jordan in New York and will be seeing King Hussein himself tomorrow in New York to talk with him, on behalf on the government, before he returns to Jordan.
So far as the question of refugees is concerned, I can only reiterate what I have already indicated; that is, Canada is willing to play her full part in any international effort to liquidate this problem, which consists of more than one aspect. I cannot be definite with regard to the number of people we would be willing to accept into Canada as part of a United Nations scheme until discussions have proceeded much farther than they have at the present time.
So far as the situation in respect of Jerusalem is concerned, this is a matter which also, as I have said, is under consideration. Our view has been made quite clear that there should be some international control and supervision of the holy places in Jerusalem. We would certainly regret any unilateral action taken by Israel or anyone else which would make this difficult, let alone impossible.


Mr. T. C. Douglas (Burnaby-Coquiflam):: have a supplementary question, Mr. Speaker. In view of the fact that the assistance being given to refugees by UNRWA is temporary and cannot do more than keep them alive, which is what has been done during the last 19 years, is any initiative being taken by Canada at the United Nations to see whether it is possible for that body to undertake a
Inquiries of the Ministry program for placing these refugees? This would involve not only Israel and Arab countries accepting a proportion of them, but also the United Nations contributing a substantial capital sum to compensate these countries for accepting these refugees.


Lester Bowles Pearson: Mr. Speaker, this is exactly the matter which is being discussed and which indeed has often been discussed in the last ten or 15 years. The hon. member's remarks underline that the problem is threefold, the solution to which Israel, the Arab states and the outside world will have to contribute. It is on that basis that we have approached the matter in New York with other nations.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. I should like to ask whether any approach has been made to the Canadian government by the government of the United States, or whether there has been any consultation in recent months between these two governments, regarding the reconstruction and completion of the Alaska highway. I ask this question now because of a bill which was introduced yesterday in the United States Senate which would authorize the United States government to pay half the cost of paving and rebuilding that part of the highway not yet completed.


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, I did not receive notice of this question so I can only speak from memory. I do not believe there have been any recent consultations or initiatives taken as far as we are concerned, but I will be glad to look into this matter.


Mr.   Marlin@Essex East: Mr. Speaker, may I say by way of supplementary answer to the question asked by the hon. member for Red Deer that at the recent meeting between Canadian and United States ministers the question of the Alaska highway was discussed. I have not had a chance as yet to examine the record in this regard, so I was not aware of this, but my colleague the Minister of Finance has just informed me of this fact.

June 29, 1967
Inquiries of the Ministry TELEVISION



TORONTO, ONT.-REPORTED APPROVAL OF ADDITIONAL OUTLET

[Stage Direction]
On the orders of the day:
['The government of the United States, of course, has nothing to do with this particular problem. The doctor in question will be seeing our representatives in Saigon. He will make whatever representations are needed.']
Michael Starr: Mr. Speaker,
I wish to address a question to the right hon. Prime Minister. A few moments ago it was brought to my attention that the B.B.G. has given approval to the moving of the Barrie television station to metropolitan Toronto. I should like to ask the right hon. gentleman, would the government or the cabinet not just rubberstamp this approval but consider all the aspects and implications of this move to residents of metropolitan Toronto.


Lester Bowles Pearson: Mr. Speaker, my hon. friend knows of course that the Board of Broadcast Governors is the agency which makes decisions in respect of these matters according to the law, and it would be a very serious matter for the government to interfere with a decision of that board.


John George Diefenbaker: Mr. Speaker, I should like to ask the Prime Minister why it was that the cabinet did interfere on a previous occasion. Was it because the proper people were not receiving the licence?


Mr. Speaker:: Order, please.


Lester Bowles Pearson: I am reminded that this fact merely underlines what I have said.


Mr. Speaker:: Order, please.


John George Diefenbaker: That was the only time it was ever done. You did it, and it was not proper then.


Mr. Speaker:: Order, please.



[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs, regarding the attempt of Dr. Gingras to establish a children's rehabilitation centre in South Viet Nam. In view of the fact that the Canadian government has offered to provide facilities to the government of South Viet Nam, and that so far this offer has not been accepted, is the government of South Viet
[Mr. Martin (Essex East) .1
Nam now offering to provide these facilities and, if not, has any reason been given?


Hon. Paul Martin (Secretary of Stale for External Affairs):: I had a talk with Dr. Gingras about a month ago regarding the question of the proposed rehabilitation centre for South Viet Nam. We have also had discussions with the Red Cross with respect to Canadian assistance in this area. This body has not yet found it possible to take final decisions.
We have accepted a proposal of Dr. Gingras that a doctor named by him should proceed to South Viet Nam to examine the matter further. Our own doctor, Dr. Vennema, has proposed consideration of a children's rehabilitation centre outside Saigon. It may be possible to do this, but we are waiting for a report.


Thomas Clement (Tommy) Douglas: A supplementary question^ Mr. Speaker. Is the apparent reluctance on the part of the government of South Viet Nam due to the fact, as the minister's parliamentary secretary suggested some time ago, that the government of South Viet Nam is insisting that this be a military hospital rather than a rehabilitation centre for disabled children?


Paul Joseph James Martin: Mr. Speaker, I have not seen what the parliamentary secretary said in that regard. I hope my hon. friend is not seeking to get me to say something that would appear to be contradicting what the parliamentary secretary said. I would prefer simply to say that I believe the proposal recently made by Dr. Gingras for an examination of this question further by a doctor to be named by him is perhaps the most practical way of trying to resolve the problem.


Mr. W. B. Nesbiii (Oxford):: Mr. Speaker, I have a supplementary question for the minister. Has the government given consideration to using a specially outfitted hospital ship for this purpose, which could get there in a hurry and move from place to place?


Paul Joseph James Martin: Yes, Mr. Speaker, the government has given consideration to that and has concluded it would not be a practical way of meeting the problem.


Mr. David MacDonald (Prince):: Mr. Speaker, can the Secretary of State for External Affairs tell us if this doctor representing Dr. Gingras, and presumably the Canadian government, will himself be making representations to the government of South
June 29, 1967

Viet Nam, or has the government of Canada made representations to the government of South Viet Nam through the government of the United States?


Paul Joseph James Martin: The government of the United States, of course, has nothing to do with this particular problem. The doctor in question will be seeing our representatives in Saigon. He will make whatever representations are needed.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, in view of the reference to this matter by the Minister of Energy, Mines and Resources during our discussion of recent legislation I wish to direct this question to the Minister of Forestry and Rural Development. Has the government yet completed its study of the report of the task force on the nine northern counties of Nova Scotia and, if so, when does the minister or the government expect to take some action in this regard?


Hon. Maurice Sauve (Minisier of Forestry and Rural Developmeni):: Mr. Speaker, the report of this task force has been ready for a couple of months. It has been studied by the government of Nova Scotia and we are to have a meeting later in July to discuss the implementation of the task force report.



MR. JUSTICE LANDREVILLE INQUIRY AS TO RECEIPT OF PENSION UNDER JUDGES ACT

[Stage Direction]
On the orders of the day:
Mr. Sianley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the
Minister of Justice. The purpose of the question is to seek clarification of statements made yesterday during an exchange between the minister and the hon. member for Bow River. Is Mr. Leo Landreville now in receipt of a pension under the Judges Act?


Hon.   P.-E. Trudeau@Minister of Justice: Mr. Speaker, the answer to that question is no.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. J. E. Pascoe (Moose Jaw-Lake Centre):: Mr. Speaker, perhaps this question should be
Inquiries of the Ministry addressed to the Minister of Transport, but in his absence may I address it to the Minister of Finance who reports to the house for the Canadian Wheat Board. I have a telegram from an elevator agent who reports that his elevator at Nokomis, Saskatchewan, is filled with wheat and there are no box cars available for shipments to make room for grain still on farms. Will the minister make inquiries into the complaint that there is a great shortage of grain cars on C.N.R. lines?


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I should just like to point out to the hon. member that the wheat board is now in the capable hands of the Minister of Trade and Commerce.
Hon. Robert Winters (Minister of Trade and
Commerce): Mr. Speaker, I do not accept the question on that basis, but I will take it as notice.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development. Has the minister any further word for the house on when we may expect the long promised Indian claims commission to be set up?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I had hoped to have some information from British Columbia. They asked us to postpone the introduction of this measure until such time as they had had a discussion on the land question in British Columbia. I have received no information yet. But I think we shall have to make up our minds very quickly whether we are going to wait much longer before giving some indication of introducing the Indian claims commission legislation.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, the hon. member for Beauharnois-Salaberry (Mr. Laniel) asked yesterday what measures the centennial commission intended to take so that all Quebec school children would receive the centennial medallion by July 1.

June 29, 1967
Inquiries of the Ministry
I am advised by the centennial commission that the province of Quebec had asked and received medallions in sufficient quantities for distribution to all schools. The centennial service of the province of Quebec, according to the instructions of the department of education has sent a letter to all the regional and local school boards and independent schools, with an application form.
Out of the 2,049 institutions contacted, 1,524 had answered by June 19, by filling out the form, and the centennial service had shipped 1,467,410 medals. The centennial service is prepared to satisfy all new requests from school boards and independent schools which have not yet made their intention known. If the stock of medallions on hand in the Quebec centennial service is insufficient, the commission has undertaken to make up the difference.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: Mr. Speaker, my question is for the Secretary of State for External Affairs. In view of the almost imminent agreement between the United States and the Soviet union on the proposals to be laid before the 18-member nuclear disarmament conference, is the government of Canada now giving consideration to advocating the inclusion of mainland China in further discussions on this very important matter?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, it has always been the view of the government that mainland China should participate in international disarmament discussions. When it was proposed a year and a half ago that there should be a world disarmament conference, Canada repeatedly suggested that mainland China should be invited.


David Samuel Horne MacDonald: I have a supplementary question, Mr. Speaker, I should like the minister to say whether or not the government is giving consideration now to advocating the inclusion of China in the present discussions taking place at Geneva.


Paul Joseph James Martin: As we and other governments have made known, notably the governments of Britain and the United States, we would hope that not only the countries

participating in the 18-power meeting but also all countries including China and other countries having a nuclear capacity would join in adhering to the non-proliferation agreement which we hope will be agreed to at the 18-power meeting.



INDUSTRY


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the acting minister of industry, and I have just discovered who he is.


Stanley Howard Knowles: The minister himself is here.


Herbert Wilfred Herridge: I did not notice the minister coming in. I ask this question at the request of a number of chambers of commerce and other persons interested in the development of industry in the interior of British Columbia. While I fully appreciate the personal efforts of the Minister of Industry to inform people of the role of his department, would he take advantage of the first opportunity to advise the house of his policy with respect to officials of his department informing chambers of commerce and other groups of the role of his department and particularly of the operation of the Area Development Incentives Act?


Mr. Speaker:: The hon. member is suggesting that the minister make a statement, but this can only be done on motions.


Herbert Wilfred Herridge: Mr. Speaker, with all respect, if the minister does not wish to make a statement now could he revert to motions later and do so at that time?



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question for the Minister of Fisheries. Can he give the house any information on the reported intrusion into the waters of Teakerne Arm on the west coast of 19 barrels of an arsenic compound and indicate what results this has had on the salmon and shellfish operations in that area?


Mr. Speaker:: Order. I doubt that this is the type of question that can be asked at the moment. I feel that this also is information which could be given by the minister on motions.
June 29, 1967	COMMONS



FINANCE


[Stage Direction]
On the orders of the day:
Mitchell William Sharp: Mr. Speaker, during my absence in Montreal last week the hon. member for Okanagan Boundary asked about the distribution of centennial coins in western Canada. Coinage demands are made on the Royal Canadian Mint through the Bank of Canada by the various chartered banks across the nation. These demands normally are based on the commercial coinage requirements in the various areas. I am advised that during the first five months of this year, issues of 1967 centennial coinage by the mint were 42 per cent larger than in the corresponding period of last year. Shipments of the new coinage to western Canada also show a substantial increase which is not far short of the national average.


Mr. D. V. Pugh (Okanagan Boundary):: have a supplementary question for the Minister of Finance. Was his reference to shipments from the mint only in respect of actual demands from Canadian banks or are collectors' demands here and in the United States also included?


Mitchell William Sharp: Mr. Speaker, the short answer is that these shipments are for commercial coinage purposes.


David Vaughan Pugh: Mr. Speaker, I should like to put a further question to the Minister of Finance with regard to the use of centennial coinage in Canada. The minister gave me an answer with regard to regular commercial deliveries from the mint. 1 should like to draw his attention to the fact that this is new coinage as against old coinage. I wonder whether he has figures which would indicate not the newly minted coinage but the new centennial coinage as against coinage issued in other years?


Mr. Speaker:: Order, please. I think we have gone as far as possible with this type of question. The hon. member has asked two supplementary questions and it seems to me the type of information for which he is asking in his second or third supplementary is perhaps a little too statistical in nature.


David Vaughan Pugh: Mr. Speaker, may I say with deference that it has been pointed out over the last number of weeks that the issuing of new coinage as a centennial project is not being fulfilled. It is all very well to say that
DEBATES	2107
Supply-National Revenue just as much as possible is being shipped to the west but the fact remains there is no centennial issue coinage in the west, and July 1 is imminent. This is why there is some urgency in my question.


Mr. Speaker:: Order. The hon. member is making a representation. This is no longer a question.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. J. E. Madill (Dufferin-Simcoe):: Mr. Speaker, my question is for the Minister of Agriculture but in his absence I will address it to the Minister of Forestry and Rural Development. Owing to the excessive rainfall during the past month resulting in severe crop damage and in some cases total loss, is the government considering a survey and assistance program for the farmers and also for the market gardeners in the Holland marsh area in Ontario?


Maurice Sauvé: Mr. Speaker, I should like to take this question as notice.

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


The Chairman:: Order. House again in committee of supply, estimates of the Department of National Revenue for the fiscal year ending March 31, 1968, Vote No. 1. Vote No. 1 will be found on page 370 of the blue book and the details are listed on page 371.



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
1. General administration, operation and maintenance including authority, notwithstanding the Financial Administration Act, to spend revenue received during the year from firms and individuals requiring special services, $59,720,000.
Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: Mr. Speaker, these estimates have been considered in some detail in committee at which time I made a lengthy statement with regard to both the customs and excise and taxation divisions of my department. I do not wish to repeat in committee of supply the statement I made at that time but simply to point out two important changes which have taken place in the department in the last year. First of all, to provide better service to the public we will be setting up six
June 23, 138?

Supply-National Revenue regional offices of the customs and excise division over a period of two years. I believe the last one will be set up in late 1968. This will be done in order that rulings with regard to customs and excise may be more readily available to the importer and taxpayer.
One of the important changes which has taken place in the taxation division of the department in the past year is the reorganization of the head office. Formerly there was a deputy minister and only one assistant deputy minister. After consultation with the methods officials of the Public Service Commission it was decided the establishment would be changed to one deputy minister and three assistant deputy ministers. This change has been progressing and the department is now in the process of completing the reorganization. When this is done the taxation division will then contemplate some reorganization at the district taxation office level.
[DOT] (3:20 p.m.)
I should also mention, since the income tax appeal board item appears under my estimates, that the work load of the tax appeal board has been growing over the years, not because more people percentagewise are objecting to their tax assessments but because the number of taxpayers is growing. It is anticipated that the board will be asking for an increase in its membership some time later this year.
I should like to congratulate all of the officers in my department for the fine work they have done. I should point out that on the taxation side the cost of collecting $100 has consistently diminished over the years, from a high of $2.06 per $100 collected in 1950 down to the present day when it costs 85 cents for all administrative and other expenses to collect $100.
I would be most pleased to answer any questions that members may have on the various items in my estimates.


Mr. Lambert:: Mr. Chairman, as the minister indicated, these estimates have been before the finance, trade and economic affairs committee where a number of questions were asked. It is unfortunate that we do not have the transcripts of the proceedings available to hon. members as this may bring forth some superfluous questions which have already been asked and answered in the standing committee.
I think that this could be an object lesson for the house leader in so far as his plan to rush through the estimates is concerned. If

the idea is that estimates shall continue to be sent to the committees for examination, then they must not be brought back before the house until the administrative processes have had an opportunity to put into the hands of all hon. members the transcripts of the proceedings before those committees. Otherwise we are faced here with an exercise in frustration. Even those of us who are members of the committee cannot attend all sessions which are held, and we cannot be expected to remember all of the questions asked and the answers given. So the proceedings here are either a sort of gentle waltz or the other kind of waltz, in which case we will have a repetition of what has happened today.
I trust that the Minister of National Revenue will emphasize to his colleague the Minister of National Health and Welfare, who at the moment is otherwise occupied with other matters, that this is a fundamental point. Unless the transcripts of proceedings before committees which have examined estimates are put into the hands of members-I appreciate there is an obvious time lag because of administrative requirements-it is complete nonsense to call the estimates of a department for consideration by the committee of supply. We just waste our time.
Having said that, Mr. Chairman, and without emphasizing it further, there are some questions I should like to ask the minister with regard to customs and excise and the proposed reorganization of the department in terms of decentralization. The minister indicated that there are to be six regions, 22 customs districts and 35 excise tax districts. First of all, I would appreciate knowing what these regions are and where the regional headquarters will be situated. If I hear the rumour rightly, Regina is being considered for western Canada. Without downgrading the city represented by my colleague from Regina City, I feel that administratively for customs and sales tax purposes Regina is one of our smaller centres and that in actual fact we could deal with Ottawa just as quickly as we could with Regina. As a matter of fact, I think Ottawa can be reached by mail just as quickly as Regina. Therefore I am wondering whether this move really makes sense. As I say, I do not want to downgrade Regina, but from the point of view of volume of business Regina is not one of our leading centres compared with Winnipeg, Calgary or Edmonton.
In the matter of customs districts, there again I should like to know where the headquarters of these customs districts will be located. Rumour has it that Calgary may be
June 29, 1967	COMMONS
chosen over Edmonton for the province of Alberta. I believe the figures will show that the volume of business in Edmonton vis-a-vis customs and sales tax is greater than in Calgary. So why choose a city of lesser population and business volume as the district headquarters? There is very definitely a much greater population in the north central part of the province than in the south central portion. So why has Calgary been picked over Edmonton? Perhaps this is a local consideration, but I am sure that the same situation will be found elsewhere. Since these changes are being made I think the minister should tell us what is proposed to be done and the reason it is being done.
That is all I should like to say about customs and excise at this time. The questions I have asked have been answered to my satisfaction, but I am sure there are a number of my colleagues who want to question the minister about customs and excise matters. For reasons of continuity I will leave my remarks on the taxation division until we reach that point in the estimates.


Edgar John Benson: Mr. Chairman, I would be pleased to deal with the questions raised by my hon. friend. First of all, with respect to the customs and excise regional offices that are being established, the first one was established in London, Ontario. They are being established in certain locations not because of the volume of business in a particular area but rather because the place in question is a central point where contact with the rest of the area can best be made. There will be another one established in Vancouver, one for the prairie region in Regina, one in Toronto, one in Montreal with a sub-office in Quebec city, and one in Halifax for the maritimes.
With regard to the 22 district offices, I can give my friend the names if he wishes in a moment or two. Again these are locations which are close to a fairly large number of ports-importation points-and have not been chosen because of the volume of business in the particular area. The anticipated system of operation is that the ports will be in touch with the district office, and the district office with the regional office. This is why they are located in specific areas.
The officials in my department carefully studied the western provinces, about which my hon. friend was most concerned, before coming to the conclusion that the regional office should be established in Regina. I point out that this does not take anything away from any other port. We are really trying to 27053-135
DEBATES	2109
Supply-National Revenue establish these offices as sub-offices of the main Ottawa office so that information is closer at hand to those in a particular area. That is the sole purpose of these offices. It does not mean that we shall take people from Edmonton, for example, because we are establishing an office in Regina. The people in the Regina regional office will be head officer personnel, capable of giving information on the spot to those involved with them.
[DOT] (3:30 p.m.)
We entered into this operation after a test run of about one year's duration at London, Ontario. We found that the test worked successfully. We are pleased, and I believe the people in that part of Ontario are pleased, with the improved service that has come about because the regional office was established.


Marcel Joseph Aimé Lambert: May I ask a supplementary question? I do not know what the attraction is in London, Ontario-perhaps it is the United States border-but can the principle that applies to the London office be applied to offices in western Canada? The whole of the northwest operates out of and through Edmonton, Alberta. I am wondering whether there is to be a difference in opportunity for contact. That was the point I was concerned about. What about the northern points? Must they report to Calgary? While the principle may have applied to London, Ontario, I feel that it need not necessarily apply elsewhere. This is not like saying that what is good for General Motors is good for the United States and what is good for London, Ontario, is good for western Canada. That is not the point when it comes to communications. With regard to Edmonton and Calgary, it is just as easy to reach either centre by flying from Winnipeg or taking a train from Winnipeg or driving. The distances from Winnipeg are practically the same. I am wondering what principle should apply with regard to the district offices. If there is any downgrading, is it not true that a senior collector, say, from Edmonton will be transferred to Vancouver and that a junior collector from a lower level will be brought to Edmonton?


Edgar John Benson: Mr. Chairman, the criteria used by my department and its officials in choosing locations of offices were, first, that offices should be geographically central for a particular area. The Regina office, for example will also cover the whole of the prairie provinces. Second, communications were considered and the fact that a centre containing
2110	COMMONS
Supply-National Revenue an office might be a provincial capital, because there is communication between provincial governments and my officials fairly consistently. Another criterion was the availability of accommodation. I think that people sometimes overemphasize the importance of a city having a regional office. The number of employees will not be great.
My hon. friend also mentioned the matter of travelling from northern Canada to the regional office in Regina. The idea is not to make taxpayers travel to Regina to be in touch with the regional office; rather, what needs to be done will be done through the local port which will then refer to the district office.


Marcel Joseph Aimé Lambert: My question really was with respect to the district offices.


Edgar John Benson: The district offices will be in touch with the regional office. Our people from the regional office will, when necessary, travel to the district offices.


Marcel Joseph Aimé Lambert: Can the minister say where these district offices are to be?


Edgar John Benson: I can indicate the present intention. We have not established those offices but I can tell the hon. member where it is intended to establish them. As I say, they have not been established yet except in Ontario. In that province they operate at Fort Erie, Hamilton, London, Niagara Falls, Sarnia and Windsor. The proposal for British Columbia is that they be established at Pacific Highway, Vancouver and Victoria. To cover north central Ontario, coming under the Toronto office, they would be at Ottawa, Sault Ste. Marie and, of course, Toronto.
Under the Halifax regional office present thinking is that district offices will be at Halifax, Saint John and St. John's. In Quebec, under the Montreal office, will be Lacolle, Montreal, Quebec, and Sherbrooke. In the prairie provinces, under the Regina regional office, would be Calgary, Regina and Winnipeg. These are the present plans for the establishment of district offices. A final determination has not been made and I shall be pleased to hear representations from my hon. friend or anyone else until the final decision is made. Suggestions for the locations of district offices have come from officials in the department and are based on their studies of the clustering of ports and how those ports can be best serviced through a district office.


Mr. Winch:: Mr. Chairman, with the indulgence of the committee may I ask the minister to give a detailed explantion about the

DEBATES	June 29. 1967
principle of the matter I am about to raise. For a long time it has seemed to me that different departments of government have differed in interpreting various statutes with regard to whether a man is married or single. That may sound a strange statement but I submit it is true. While some departments of government maintain that a man is married, under certain circumstances the Department of National Revenue, even though a man has a wife and dependants, says that for income tax purposes he is single. How does this differentiation come about? Income tax is the heaviest burden a man must bear. Why should the income tax authorities say that a married man who has a wife and children to support is under some circumstances single?
May I give an example to illustrate my meaning. Let us take the instance of a man born in Canada who marries a girl from the United States who is a divorcee with two children from her previous marriage. She comes to Canada with the two children and lives with her husband in Vancouver. From that marriage is born a third child. The family now consists of the natural born Canadian husband, his wife, and three children. For various psychological and other reasons the home breaks up and the wife with her three children goes back to her home in the United States. Her Canadian born husband supports her and the children by sending $200 a month. He has complete records from the bank of the money he sends her. He loses his job, goes to the Unemployment Insurance Commission, maintains that he is married, and the commission says to him: "Of course you are married; you have a wife and three dependant children. You are unemployed and therefore you will receive the married rate." The income tax authorities, on the other hand, say: "Oh, no, you may have a wife and three children but for income tax purposes you are single." How in the name of heaven a man with a wife and three children can be single is beyond me.
[DOT] (3:40 p.m.)
I went into this matter and found that according to income tax law deduction of his payments would be allowed provided a certificate were forthcoming from a family court. But in the case I have in mind officials of the family court tell me that no such certificate can be given because the wife and the three children are in the United States. In the absence of a court order, however, the Department of National Revenue rules that a Canadian with a wife and three children, to
June 29, 1967

whom he is paying a regular amount each month, is not married despite the fact that there is ample proof of his married status. According to the unemployment insurance regulations he is married, but the income tax department says he is not.
Try to imagine what it means to a man in this position when he is treated by the revenue department as a single man. Did you ever see such a stupid position taken? Yet this is precisely the attitude taken in a case with which I am very familiar. Why do I know it so well? I have referred to the case of my eldest son. He is considered by the income tax authorities not to be married. But let no one try to tell me that my son is not married and does not have a wife and three dependants in the United States.


Edgar John Benson: The answer is that the Income Tax Act does not determine whether a person is married or not; it indicates the circumstances in which a person is entitled to an exemption of $2,000 as having married status. That is what the act says.
If one is considering the position of a separated person, the act says that alimony or payments made in support of a family may be deducted when paid pursuant to a court order or a written separation agreement. This is the law as passed by parliament. It is the duty of my department not to make the law but to administer the law as this parliament in its wisdom has determined it should be.
Anyone who thinks that my department is not interpreting the law correctly has a right to appeal to the Tax Appeal Board, an independent body which sits all over the country. The appellant does not need to be represented by counsel. He can appear personally if he wishes and explain his case, and if the board decides that the department is acting improperly we are bound by its decision.


Harold Edward Winch: How can a person who is married and who has dependants be considered as not being married? How is it that under the unemployment insurance regulations he is considered to be married, while under income tax law he is not?


Edgar John Benson: I would refer the hon. member to section 26(l)(a) of the Income Tax Act which sets out very clearly the circumstances in which a person is entitled to the $2,000 exemption in respect of married status. Incidentally, most of the information contained in that section is also given on the income tax form.
Supply-National Revenue


Mr. Hales:: I have one or two brief observations to make concerning the estimates under discussion. The minister gave us some figures this afternoon in connection with the cost of collecting $100 of tax money and he told us that through the efforts of his department it had dropped from $2.06 to 85 cents. I give the hon. gentleman full credit for an efficiently run department. I have always felt that the Department of National Revenue was very efficiently rim. But I think he was misleading the committee when he put forward those figures because a reduction in the cost of collection is brought about automatically as a result of the increased amounts of money we are collecting. In other words, instead of ten men collecting $1,000 the same ten men are collecting $2,000. The cost of collection is bound to go down. I did not want the minister to mislead the committee on that score, though I still give him full credit for running an efficient department.
Turning to another subject, I draw attention to the fact that the hon. gentleman's department is responsible for collecting Canada Pension Plan money. This brings me to the point I wish to make. As Minister of National Revenue he should collect all moneys which go to the federal government. He should be collecting unemployment insurance money, he should be collecting the Canada Pension Plan money, as he is now doing, he should be collecting any other moneys which are raised on behalf of the federal government. If this were the case, all the money would be going to one central place from which disbursements could then be made as necessary to the other departments. The result, I submit, would be greatly increased efficiency.
As things are now, businessmen find they must deal with various officials from different departments all of whom ask for the production of records and cause considerable duplication of effort. He must deal with inspectors interested in unemployment insurance payments, inspectors auditing his books in connection with Canada Pension Plan payments, inspectors who wish to examine payrolls and other records in connection with income tax. Why not get all these people together and make these audits in one operation?


Edgar John Benson: I should like to make a slight correction. The Canada Pension Plan audit is done by officials in my department. They do the income tax audit as well.
2112	COMMONS
Supply-National Revenue


Alfred Dryden Hales: I hope that is the case, but there is still the unemployment insurance question to deal with. Let us have one audit carried out at one time and get down to a businesslike operation, which I am sure is what the minister wants.
I turn now to the money which is deducted in connection with the Canada Pension Plan. As hon. members know, overpayment of contributions by employees is taken into account and refunds are made. Employers, however, are not given any refund of overpayments they may have contributed. Many people find themselves in this category, for example, those who sit on county councils and are paid on a per diem basis. They are probably in business too, so they pay twice. I think also of people elected to city councils, of presidents of companies, and even of members of parliament who must often pay twice, here and at their place of business. Yet at the end of the year no refunds are made to employers although employees are given refunds when applicable.
The minister tells us from time to time that he and his officials have failed to devise a system whereby overpayments can be returned to employers. He says no refunds are made in the United States. But we are as smart as the people of the United States, if not smarter, and I see no reason for not coming up with a plan ahead of the United States. I refuse to accept that we are not smart enough to devise a scheme under which an employer would be credited with any overpayments made under the plan.
I feel keenly about this matter. It affects people in the construction business, in the restaurant business and particularly all those engaged in seasonal work. The fund has by now built up a balance of some $10 million or $12 million in overpayments, which is far from peanuts. It is up to the government to find a system whereby overpayments can be paid back to employers to whom they rightly belong.


[Stage Direction]
Item agreed to.
[DOT] (3:50 p.m.)
Taxation-
5. General administration and district offices including recoverable expenditures on behalf of the Canada Pension Plan, $57,833,900.
Marcel Joseph Aimé Lambert: Mr. Chairman, I wish to make certain observations in connection with the Canada Pension Plan. While the estimates rightly set out those portions of the costs attributable to the Canada Pension Plan which are recovered by the Department of

DEBATES	June 29. 1967
National Revenue, and so form an offset to the expenses of the department, we still have to consider the total cost of the Canada Pension Plan. The distributive costs are given in the estimates of the Department of National Health and Welfare. It would be helpful if full information were given in the estimates of either department by way of a summary of the total costs of the Canada Pension Plan. The minister has indicated that he is in agreement with this suggestion and I think it is important that it be done.
In the days when I was connected with this department the minister under whom I served had a tidy shop and the officials were very efficient administrators. At times difficulties were encountered with respect to sales tax or income tax in the interpretation or the issuing of regulations and bulletins to business. This has occurred and I believe it could have been avoided by more consultation with business. Last year instructions to business had to be withdrawn because they were not clear. More consultation would prevent such a situation occurring.
I am going to make one last plea to the minister that he should try to convince his colleague, the Minister of Finance, of the difficulties associated with terms payments for estate tax. This is a plea I have made year after year. My colleague from Wellington South has placed motions on the order paper dealing with this subject. As I say, it is an old problem and it is becoming more and more important that it be solved.
Possibly the provinces of British Columbia and Saskatchewan may follow Alberta's example in remitting 75 per cent of the estate tax paid. But where this is not done in other jurisdictions something should be introduced to alleviate the hardship. It is all right to fix the estate tax assessment within the six-month period and have the return filed, but it should not be necessary to make full payment of the tax within that six months.
The people with whom the minister is dealing are honest. They are not trying to escape payment. I have never been able to see the rationality of insisting on full payment of estate tax within the six-month period. A move should be made to do away with that limited method.


Robert Norman Thompson: Mr. Chairman, since it is just a couple of minutes before four o'clock and as there are several matters I wish to draw to the minister's attention, may I call it four o'clock?
June 29. 1967

Private Bills SITTING RESUMED


Herman Maxwell Batten: Does "the committee wish to rise now?


Some hon. Members:: Agreed.
Progress reported.



BAIL REFORM


Mr. Jim McNulty (Lincoln):: Mr. Speaker, may I have the unanimous consent of the house to revert to motions? It is for the purpose of sending a bill to the justice and legal affairs committee.


Mr. Deputy Speaker:: Does the house give unanimous consent to revert to motions?


Some hon. Members:: Agreed.


James Carroll Patrick McNulty: By leave of the house, and with the consent of the hon. members for New Westminster (Mr. Mather) and Winnipeg North Centre (Mr. Knowles) I move, seconded by the hon. member for Hamilton East (Mr. Munro):
That the order for resuming debate on the motion for second reading of Bill C-4, "an act concerning reform of the bail system," and on the motion proposed in amendment thereto, being order 121 under the heading "Public Bills" on today's order paper be discharged and that the subject matter of the said bill be referred to the standing committee on justice and legal affairs.


[Stage Direction]
Motion agreed to.


Mr. Deputy Speaker:: Order. It is my duty, pursuant to provisional standing order 3 9A, to inform the house that the questions to be raised at the time of adjournment tonight are as follows: The hon. member for Co-mox-Alberni (Mr. Barnett), Fisheries-Ocean Traveller-chartering of vessel by research board; the hon. member for Prince (Mr. MacDonald), Transport-increase in ferry rates, New Brunswick-Prince Edward Island; the hon. member for Okanagan-Revelstoke (Mr. Johnston), External Affairs-reported invitation to visit South-West Africa.
Pursuant to an order of the house made this day this sitting stands suspended until seven o'clock.
The house resumed at 7 p.m.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. C-105, to incorporate Rainbow Pipe Line Corporation-Mr. Orange-Mr. Batten in the chair.
On clause 1-Incorporation.
® (7:10 p.m.)
William Arnold Peters: Mr. Chairman, this is a very interesting bill, as we said when it first came before us for consideration a year ago. Since the committee heard the evidence in respect of this measure we are doubly sure that we were right. We do not suggest there should not be a pipe line from the Rainbow Lake area to the refinery. All we are suggesting is that such a pipe line to carry these commodities should not be owned by three or four private oil companies.
This bill was referred to the transportation committee and, although I did not have the opportunity of attending its meetings, I have read the evidence which was made available only today. I am not even sure it was made available in the French language. Obviously there were questions in the minds of the members of that committee regarding the ownership of this pipe fine. I should like to refer to some of these questions to indicate the general feeling of at least some hon. members. It is interesting that the chairman of that committee decided that this bill was of great interest, because when the hon. member for Acadia asked a number of questions, pointed out that the major companies holding interests in this proposed pipe line were United States owned, and said that Ac-quitaine was French owned, the chairman said:
Let us not get into that, Mr. Horner. Order, please. This is a private member's bill, Mr. Horner, as you know. Mr. Horner, you are getting out of line now. You are free to vote against it.
The hon. member for Acadia then said that he just might do that, to which the chairman replied that this was his prerogative. At that time the question was put to a vote, and to indicate how impartial the chairman was, let me tell hon. members of the committee that the hon. member for Acadia asked whether the chairman had voted and the chairman



SITTING SUSPENDED

[Stage Direction]
June 29, 1967
Private Bills
indicated that he was just casting the deciding ballot. Before this company receives federal authority to enter into the pipe line transmission field it will have to answer satisfactorily some of the questions in the minds of hon. members.
At another point in this report there is an indication that the hon. member for Victoria (B.C.) asked a number of questions pertinent to this application and I think he stated the crux of the problem we have in mind. That hon. member asked whether this company was being established as a common carrier for the transmission of oil from the Rainbow field. He also asked the officials of the company to explain, if that was not the case, the purpose of setting up this company. Any hon. member who reads this committee report will find some very interesting information.
It appears from the evidence that three companies got together to develop this company. Someone also pointed out that there already is another provincially chartered company of the same name. The three companies involved are Imperial Oil which owns 331 per cent, Mobil Oil which owns 331 per cent, and Acquitaine which owns 30 per cent. The report then indicates that Banff Oil owns 3J per cent. It was then asked whether Acquitaine had a controlling interest in Banff Oil and Mr. Barroll replied:
My knowledge, sir, of the stock ownership of Banff Oil is such that I could not answer authoritatively.
This would indicate to me that probably only the three companies, rather than four, have the controlling interest in this proposed company. Surely the Minister of Finance should be interested in this fact and the statement made by the officials that the company is not primarily concerned with the transmission of oil but in the writing off of development costs against income tax. As stated by Mr. Barroll, the company is more interested in the possibility of expanding its revenue by increasing the volume of production than in increasing the price in the market place.
If one refers to page 6 of the committee report one will see that Mr. Bredin indicated that one of the reasons for the establishment of this company is so it can write off the costs of drilling and development against income with the ultimate objective of reducing the profits of the company and thereby reducing the tariffs. Mr. Bredin then said:
We propose to operate this with a minimum of profit, and should there be some small profit it can be written off by doing drilling or exploration work and thus there will be no tax payable. That

being so, you can ultimately lower your tariffs and the benefit of this will accrue to the producer. If you use your money to pay income tax you cannot lower your tariffs to the same extent as you can otherwise.
The hon. member for Edmonton West has been here for some time and he has been interested in the activities of the public accounts committee. I have read some of his remarks as reported in this committee report which would indicate that he was surprised about the statement that if the company operated at a minimum of profit it could use the profits for drilling and exploration work and if it did not have to pay income tax it could reduce the costs to the producer. The hon. member for Edmonton West then said:
[DOT] (7:20 p.m.)
I was interested in the logic that Mr. Bredin was using because frankly I find it the reverse of mine. If there are profits in a pipe line company against which it can charge development and exploration expenses it is to the benefit of the producer to be able to charge off those profits. Those profits of the pipe line are, of course, derived from carrying the producer's own crude as well as that of those on the market who come in under the common carrier. Therefore the profits are provided by your producing competitors as well as by yourself.
Therefore, to say that you are going to have as low a rate as possible for your common carrier business for your competitors in the producing field is not quite in accord with the facts.
It is not only not in accordance with the facts but it certainly is not the free enterprise system. I would say that the officials of these two companies must be very poor businessmen to allow a third company to obtain an advantage. It is not too difficult to see which company will have the advantage. I think I am safe in saying it will be Imperial Oil. I assume that Imperial Oil owns Mobil Oil, which may or may not be the case. I have had some experience with the manipulations and machinations of Interprovincial Pipe Line Company, which was considered by parliament some time ago. This company is under the control of Imperial Oil in various ways, although not in respect of stock control. I found they were not in a position to lower the price of transportation of their oil product through the pipe line because, if they did, not only would Imperial Oil gain an advantage but so would their competition. Therefore they decided it was much better to adhere to the price allowed by the National Energy Board and at the same time make profits out of their holdings in the pipe line.
I agree entirely-and it is very seldom that we do-with the hon. member for Edmonton
June 29, 1967
[Stage Direction]
West that the statements made by the representatives of this company were not only not correct but were probably dishonest, unless you allow for inability or incompetence on the part of the representatives of the company. Nor can I see in the other evidence presented by the representatives of the company any information that would lead anyone to reach the conclusion that because they had a method of writing off drilling expenses against income tax they would be able to pay more money to the producers if the company was acting as a common carrier in addition to carrying its own oil.
This is a very important pipe line. In this area Canada has made several very bad mistakes. At one time we had a pipe line from Norman Wells through the Quesnel area to the coast. It was installed during the war and was a very small line, it is true. It was sold for probably less than the scrap price of the pipe. Therefore it will be seen that over the years there has been some manipulation in this area. I think it is also safe to say that in this area there has been a great deal of exploration and development of the potential.
Hon. members from Alberta seem to think that oil is a commodity that we should dispose of on the international market as quickly as possible. I was very surprised to learn that the reserves, according to the official of this company, are sufficient for only 33 years at the current rate of production. We talk about conservation in other fields but the people reaping the benefits of the development that takes place in this area are acting in a very uncontrolled manner. Our children will find that their parents have wasted a great deal of money in respect of the natural resources in the area.
For this reason I urge the sponsor of this bill and those interested in the development of the area to make sure that the granting of this licence is not in effect a licence that will allow a monopoly to operate. I think everyone will agree that to put in two or three competitive pipe lines for long distance transmission is probably not in the interest of the oil companies nor the producers and neither is it in the national interest. There must be some other interest behind the seeking of a monopoly situation. Before we grant a licence to operate this kind of monopoly I believe we should see that this common carrier does the job it should do for the many oil producers in the area.
The committee dealt with many aspects of the bill. Most of the clauses are concerned
Private Bills
with whether stocks should be split or transferred, whether the common stock should be changed to preferred stock, whether the preferred stock should be changed to common stock, and so on. We all know that a great many things can be done with stock. This raises an old problem with which we have dealt on many occasions. The question we should ask ourselves is, what does the company really want to do in this regard? They ask for the power to do a great many things. In the bill the company asks for the right to "purchase, lease or otherwise acquire and hold, develop, operate, maintain, control, lease, mortgage hypothecate create liens or other security upon, sell, convey or otherwise dispose of and turn to account any and all interprovincial, extra-provincial and/or international pipe lines and all appurtenances relative thereto for the gathering, processing, refining treating, transmitting, transporting, storing and delivering of any substances capable of being transmitted or transported by pipe line including, without limiting the generality of the foregoing," and so on. I do not understand how in thunder the company's powers can be limited if this bill is passed. The company seems to have covered about everything. Clause 6 also provides as follows:
[DOT]-transporting, storing and delivering of any substances capable of being transmitted or transported by pipe line including, without limiting the generality of the foregoing, any natural and artificial gas and oil and hydrocarbons and related substances or any of them and any products or by-products thereof and all works relative thereto for use in connection with the said pipe lines; and buy or otherwise acquire, process, refine, treat, transmit, transport and sell or otherwise dispose of-
What the company will be able to do goes on ad nauseam. They can buy houses, sell property, go into the field of housing development, make loans, and so on. This company is almost in the category of a financial institution. Very little is said about what the pipe line itself will do. I know that the financial aspects of the company are very important, but it seems to me the geographical aspects are also very important. I would have thought more questions would have been asked about the geographical aspects of the company. It seems to me that before the bill is passed we have to decide what we shall allow the company to do. The committee appears to have given more consideration to what they thought the company would do than to what is was really going to do and how it would operate in this area.
Private Bills
[Stage Direction]
June 29, 1967
[DOT] (7:30 p.m.)
The Income Tax Act amendments that were made by the house in 1962 were originally intended to provide a better opportunity for oil exploration. The parliamentary agent goes on to say:
Prior to 1962, companies which were in the business of exploring for oil could deduct a certain amount of their exploration expenses from their revenues for the purpose of computing income tax. Some time before 1962 all these sections were amended to provide that mining companies, for example, could go into oil exploration, and vice versa. The whole scheme of the act was to provide more money for this kind of exploration.
This has been true for a long time not only with regard to the actual operation of companies but in the financial arrangements which the companies concerned made.
Herman Maxwell Batten: Order. I must advise the hon. member that the time allotted to him has expired.


Marcel Joseph Aimé Lambert: Mr. Chairman, I attended the meeting of the transport committee when it was considering this bill. Although I am not a member of that committee, I felt there were certain aspects of the incorporation of this company which had to be drawn to the attention of the members of the committee. Personally I feel it is quite right to allow development and exploration companies to avail themselves of the opportunities offered them under the law and I am quite sure that everyone will agree that the 1962 amendment was put forward as an incentive for oil exploration and development. After all, not only the question of finding the oil is involved but also the matter of transporting it to the market. In many instances there were opportunities for the gathering lines to act as common carriers under the control of the oil and gas conservation board of the province of Alberta and under similar bodies in the provinces of Saskatchewan and British Columbia. I think it is only fair that a producing company should have the right to amortize some of the expenses of its exploration and development programs over its whole operation. This is provided for under the act, but it has to be clear that the exploration and development have been done.
However, there is one advantage gained by a pipe line company which is also in the business of development and production in that by being able to charge its expenses for exploration and development against its profits it has an advantage over its non-owner competitors in the production field. I have no

objection to that and all I wish to point out is that this fact does exist.
I listened with interest to what the hon. member for Timiskaming had to say with regard to pipe lines and their development. However, I must say I cannot agree with everything he said because I think some of his statements are incorrect. Rainbow Pipe Line Limited operates entirely within the province of Alberta. It is being incorporated federally in the event that the group of companies, that is, Mobil Oil of Canada, Imperial Oil Limited and Banff-Acquitaine, continue their operations farther north across the Northwest Territories boundary. In view of fact that the Zama lake area is not very far from that boundary, it is possible to foresee that within a year or 18 months this company, along with others which hold leases granted to them by the government of Canada, may undertake some development work and actually bring in some producing wells.
There is no sense in the production of oil if there is no opportunity to market it, and in the Northwest Territories there are no alternative means beyond a pipe line. There are no roads or railroads, so tanker trucks cannot be used, and therefore gathering lines must be used ultimately leading to a central pipe line. This is what has happened in northwestern Alberta.
The Rainbow pipe line is presently under construction from Zama lake to Rainbow lake and, although I stand to be corrected on this, I believe it goes down to the Mitsue lakes field north and east respectively of Lesser Slave lake. Farther to the south of this area there is the Peace River pipe line which heads west. There is at present before the other place an application for another very short pipe line which will be entirely domestically owned. I believe it is to be only about 15 miles long, which makes it much more economical, and the only sensible thing to do is to build this short length of pipe line across the British Columbia boundary to join the gathering system of northeastern British Columbia and ultimately feed out through Westcoast Transmission to the Pacific coast.


William Arnold Peters: Would the hon. member permit a question? I have listened with interest to his description of the area. Could he tell me whether the Rainbow oil field is situated outside the Northwest Territories?


Marcel Joseph Aimé Lambert: The Rainbow oil field is situated entirely within the province of Alberta. It is in what is known as the north
June 29, 1967

Peace River country. It is not in the Northwest Territories but along the eastern slope of the Rockies. The whole oil development starts in southern Alberta near Pincher creek. It changes from gas to oil and vice versa and the indications are that this will continue all the way to the Arctic coast as exploration locates the oil pools. The companies in the consortium intend to bring the oil, if they should find it, from north of the Northwest Territories' boundary on leases which it now holds.
I have no criticism of the plans for development. However, there are two questions which I do raise. First of all, it is a 20-inch pipe line in the Zama lake-Rainbow lake area. It is a major oil pipe line and because of the rather restricted operations in the future it seems to me there is a danger it may become a monopoly pipe line. No one else can say: We may find an oil pool in some area close by and then we will build a major pipe line all the way down to the refining area near Edmonton. Therefore for economic reasons this pipe line may become the sole pipe line. I do not quarrel with that. However, my view is that the ownership of such pipe lines should be in Canadian hands. I believe that a lesson could have been learned at the time of the construction of Interprovincial Pipe Line when ordinary Canadians did not have the chance to buy shares in it. There were large blocks of financing available to that company and they took up the major holdings.
[DOT] (7:40 p.m.)
As a result of the lesson of Interprovincial Pipe Line, there was then the experiment of the Alberta Gas Trunk Line and the formula which developed therefrom. It was not entirely perfect but I think it was a major step forward. The crown caused the Alberta Gas Trunk Pipeline to be incorporated. There were some nominal directors. The shares were placed on the public market with a maximum allocation, I think, of 25 per person. The shares were first limited to residents of the province of Alberta, and if they took their full quota, fine. Any unused portion of the quota was to be sold on the open market, but I believe the issue was oversubscribed.
In other words, Mr. Chairman, the ordinary citizen, be he railroad car man, truck driver, or what have you, was able to buy shares. As a matter of fact, the initial issue of the Alberta Gas Trunk Line was 25 shares per person at $5 a share, representing a maximum investment of $125. But within two weeks or a little more people were able to sell them for 27053-135
Private Bills
$10 or so per share. However, the small investor was able to buy, and he had the opportunity to hang on to them for further profit. Many of them did.
This is what I should like to see take place with some of our solids and other pipe lines. I should also like to see the same happen with a line such as Rainbow from one end to the other. I am sure that the companies concerned would like to get their capital out of that pipe line because they can certainly put it to better use in other ways than by investing it in a pipe line for a long time.
The operations of the line within the province of Alberta are entirely under the control of the oil and gas conservation board. The common carrier rates are fixed by the board. The production from the wells is controlled by the board upon monthly nominations by the refineries and allocations by the board.
What the prospects are for the Northwest Territories I do not know, except that the National Energy Board, to whom application must be made for the establishment of a pipe line in the Northwest Territories to connect with any pipe line in Alberta or British Columbia, will determine the method of construction, rates and so forth of any such pipe line.
If the department of northern affairs and the Department of Energy, Mines and Resources have any conception of proper conservation, then I suggest they will likely follow the Alberta plan. After all, the chairman of the National Energy Board was the chairman of the oil and gas conservation board in the province of Alberta. It is in the mutual interest both of that province and the federal government to see that there is the maximum development of oil resources and reserves. Naturally these resources have to be marketed in order to make any development program economically feasible.
According to the evidence given before the transport committee the other day, our oil reserves today will last 33 years. I do not know whether the figures took into account the tar sands resources in northeastern Alberta where the first refinery is due to go on stream some time later this autumn at a cost of something like $250 million, with a 50,000 barrels a day capacity.
These reserves are far greater than those in the conventional oil field areas of Alberta and the Northwest Territories. At the present time the Alberta oil wells are producing at about 50 to 55 per cent capacity. Many of the older wells with lighter production which have been in operation for 20 years are almost at

June 29, 1967
Private Bills
the point of shutdown because they are uneconomic under the present marketing system.
Briefly, Mr. Chairman, I would like to say I have no objection to the incorporation of this company to build a pipe line. There will have to be an application made to the National Energy Board and the board can hold public hearings. It is not as if we were giving this company the right to establish a pipe line wherever it wanted, and that by the passage of this bill we were giving the company the right to build the pipe line. Not at all. There are still several steps that have to be taken both before the oil and gas conservation board of the province of Alberta and the National Energy Board of the Government of Canada.
However, Mr. Chairman, with regard to the bill itself I referred the other day to clause 6 (c) as an open hunting licence and I do not withdraw that phrase today. As I said, I feel it would be far better if this company were open to public investment. By the term "public" I mean in the same way as the Alberta Gas Trunk Pipeline, or under some similar formula where by residents of the province of Alberta and people in other parts of Canada would have the opportunity to buy shares instead of these companies being controlled by three corporations, two of whom are United States corporations, the other one being French with a tie-up with the French government.
Notwithstanding the fact that this consortium has done a good deal of development work and has a good record, it seems to me that where you have a pipe line which I think, economically speaking, will be the only major pipe line working toward the north for many years to come, Canadian citizens as such should be entitled to acquisition of the equity holdings in that line.
I hold no brief for nationalization or public ownership by a crown agency or otherwise. I think that would be the last thing we would want in the oil and gas business. But I do feel that widespread ownership by the Canadian public is highly desirable. This is the sort of move that would detract from the alleged necessity of a Canada Development Corporation. I think that ultimately a much greater number of proposals of the sort I suggest will have to come before parliament. There should surely be much greater participation from the onset in such development by Canadian investors. I can assure you, Mr. Chairman, that there are any number of people in all

parts of the country who would be quite happy to invest $200, $300 or $500 in a type of operation like this or in a solids pipe line or in other types of transport utilities.
As I said before, Mr. Chairman, I do not for one moment hold any brief for public ownership by the crown. On the other hand, I believe that Canadians as such should have the right to invest in the equities of their resource development industries, and this would be one way of doing so.
[DOT] (7:50 p.m.)


Thomas Speakman Barnett: Mr. Chairman, I see that the Minister of Transport is in his place and I would hope he would comment on something which involves such an important aspect of our transportation system. I felt that he might give us the benefit of his views on the bill that is before us but, apparently he has no intention of doing so at the present time. May I point out that if this company is incorporated it may one day, under the terms of the bill, wish to build a pipe line to Bonavista, and the Minister of Transport might show a more active interest in it then.
I was interested in some of the remarks of the hon. member for Edmonton West who gave the committee the benefit of his knowledge which arises partly from the very fact that he represents an Edmonton constituency. He has had more opportunity than most of us to become familiar with the operations of the oil industry and he has taken considerable interest in some of the financial legislation, income tax and otherwise, that has come before the house from time to time.
The proceedings of the standing committee on transport and communications on Tuesday, June 20, came into our hands today and we have not had much chance to look at the evidence in detail. I have tried to follow some of the information which was given and after I have made one or two references to the evidence perhaps I might be permitted to ask the hon. member for Edmonton West whether I correctly interpret the situation to which he referred at the outset of his remarks.
I found myself somewhat puzzled by some statements made by those presenting the case for the applicants before the committee. If I understand correctly, it is the intention of this company provided the charter is granted to be in a position to operate as a common carrier with a published rate of tariffs. That being so, it will carry the oil produced by it and as well as will be required to carry the oil produced by any other oil producers in the area that wish to use this pipe line. In that
June 29. 1967

case, the reference to the question of income tax write-offs for exploration expenses becomes of considerable interest as it relates to the position of a common carrier carrying the products of the principal shareholder as well as of other companies.
On page 6 of the committee report Mr. Bredin is reported to have said:
It is not the intention to operate this pipe line as a going concern in the sense of making a profit in itself. It is to provide a vehicle to get the oil out of this area at a low cost to the producers.
That may be a laudable objective but it seems at variance with the accepted objectives of a common carrier. So far as I know our railways, privately owned and publicly owned, have never suggested that they were in the business of moving goods for the love of it. Their intention is to make a reasonable profit from their transport operations.
After an intervention by the hon. member for Victoria (B.C.) Mr. Bredin said:
We propose to operate this-
I assume he is referring to the pipe line.
-with a minimum of profit, and should there be some small profit it can be written off by doing drilling or exploration work and thus there will be no tax payable. That being so, you can ultimately lower your tariffs and the benefit of this will accrue to the producer. If you use your money to pay income tax you cannot lower your tariffs to the same extent as you can otherwise.
The hon. member for Victoria (B.C.) then said:
I would like to see how that reads in the transcript. It does not seem to add up.
Having read this part of the evidence two or three times I must agree with the hon. member for Victoria (B.C.). It still does not add up. It seems strange that you can spend money on exploration and thereby lower your tariffs as an operating pipe line company to the point where you make no profit, or to that point where your profit is so reduced that you are not liable for tax, but if tax is to be paid higher tariffs must be charged. This question, incidentally, throws into relief some of the strange provisions of corporation income tax legislation in regard to tax write-offs for exploration. Perhaps in drawing this question to the attention of the house the company in question has performed a commendable service.
If one considers a pipe line operation in the sense that the hon. member for Edmonton West considers it, as an operation which is brought into being because of the economics of the situation which enable it to operate as
Geneva Agreements
a monopoly carrier, it seems strange that the oil producing company which will control the pipe line company can manipulate the profit position of the pipe line company and expend money in exploration in such a way as to avoid paying income tax.
9 (8:00 p.m.)


Herman Maxwell Batten: Order. The hour appointed for the consideration of private members business has expired.
Progress reported.


Mr. Speaker:: The hour appointed for the consideration of private members business having expired, the house will revert to the consideration of the business which was interrupted at seven o'clock.


Mr. Winters:: May I ask the leave of the house to revert to motions?


Some hon. Members:: Agreed.



STATEMENT FOLLOWING GENEVA AGREEMENTS

Robert Henry Winters: I should like to thank hon. members for their kind consideration.
The final act of the Kennedy round is to be signed tomorrow morning in Geneva, thus bringing these negotiations to a formal conclusion. The resulting agreements, including the schedules of tariff concessions granted by all participating countries, can now be made public. I should make clear that these tariff cuts will not come into effect until January 1, 1968, and in many instances they will be staged over the next four years.
At the conclusion of my remarks I will ask leave to table, on behalf of the Minister of Finance (Mr. Sharp) and myself, detailed information on the tariff and trade agreements of interest to GATT concluded during the Kennedy round. Everything possible is being done to ensure that the Canadian business community is made aware of these results without delay. The Minister of Finance and I will now issue a joint press announcement containing details of the agreements.
Copies of this announcement, as well as of a special issue of the department's publication "Foreign Trade" are being sent to the major trade and business associations in sufficient quantities for distribution to their member firms across the country. I am writing to the ministers of trade and industry of all provincial governments inviting their co-operation

June 29. 1967
Geneva Agreements
in joining with us in organizing seminars with business groups in their regions. I am also writing to the many individual firms which have expressed interest in particular export products in these negotiations.
Mr. Speaker, as has been indicated on numerous occasions, the Kennedy round constitutes by far the most important trade pact in history, the most comprehensive in coverage and the most significant in the extent and depth of tariff reductions. Some 50 countries, representing well over 80 per cent of world trade, participated in these negotiations.
Over $45 billion of goods and hundreds of thousands of tariff items are affected by the concessions exchanged; all aspects of world trade including tariffs and certain non-tariff barriers, and agricultural as well as industrial goods were within the ambit of the negotiations. Never before have trade negotiations of this scope, magnitude and far reaching impact taken place.
It is fitting on this final day, to pay tribute once again to the statesmanship and farsightedness of the late President Kennedy.


Some hon. Members:: Hear, hear.


Robert Henry Winters: To his initiative were due in large part the ambitious objectives which these negotiations set themselves and which have to such a high degree been attained.
It was to be expected that the Kennedy round would be exceedingly complex and difficult, involving a great deal of intensive bargaining; indeed there were occasions through the nearly four years of negotiations when the obstacles appeared to some too great to be overcome. However, despite crises and delays, and due to the perseverance and basic good will of all the countries concerned, the issues blocking agreement were resolved.
As one who attended these negotiations in Geneva on behalf of the Canadian government at various critical junctures, may I say how much is owed to the leadership and skill of the director general of the GATT, Eric Wyndham-White, in contributing to the success of the negotiations, and to our own negotiating team under the leadership of Ambassador Sidney Pierce. The Kennedy round now stands not only as a symbol of the most sweeping advance yet made in the liberalization of world trade, but also as a model and example of constructive, forwardlooking and meaningful co-operation among the countries of the world.
For Canada, the success of the Kennedy round has wide-ranging implications, opening

new broad perspectives of expanded trade and benefiting all sectors and regions of the economy. Indeed, a dramatic and sustained increase in Canadian export trade is essential if we are to deal effectively with the common issues confronting us as regards standards of living, balance of payments, jobs and the like. The concessions granted in our own tariffs to gain greater access to other markets must be regarded in the light of the very great benefits which can accrue to Canada from expanded exporting opportunities.
Many sectors of industry where Canadian tariffs are being reduced are also the sectors which stand to benefit most from export gains. In many instances, the cuts in Canadian tariffs are in areas which will help reduce the costs of production for Canadian processors and manufacturers, as well as for consumers. That, Mr. Speaker, is important.
The export benefits obtained by Canada from its agreements with major trading partners cover, including wheat, over $3 billion of our current export trade. In the United States and the E.E.C. most industrial tariffs will be reduced to levels of 10 per cent or less. As a result of the across-the-board tariff cuts made by our major trading partners, trade opportunities will become available for the first time to a very wide range of manufactured goods-many of which will be Canada's exports of tomorrow. For Canada therefore the Kennedy round could contribute to the solution of many of our basic economic problems and set in motion the process of adaptation and restructuring which could, in time, reshape the character of the economy. There are many areas where we need more values added, more up-grading of our raw materials, and this should help.
It may well be that the Kennedy round will be regarded in the future as a crucial turning point in the transformation of Canada from a resource-based economy to one of the most advanced industrial nations of the world.
I have commented on previous occasions in some detail on the significance of the new cereals agreement for Canada's wheat trade, for the western prairie provinces, and for the economy and balance of payments as a whole. The International Wheat Council is convening a special negotiating session in Rome on July 12, with a view to revising the international wheat agreement so as to incorporate the cereals commitments agreed to in the Kennedy round.
Canada welcomes the participation of all countries with a significant interest in wheat
June 29, 19S7

trade in these negotiations, and would like to see the new agreement completed and put into operation as soon as possible.
I would like to take this opportunity to express again the government's appreciation to the members of the wheat advisory committee, representing major western producer organizations, who served as advisors to the Canadian delegation throughout the cereals negotiations in Geneva. Their counsel and guidance were invaluable.
Now that the Kennedy round is concluded, it is vitally important that every sector of the Canadian economy should exploit the new export opportunities before us. The main initiative must rest with private enterprise itself. The department is being geared to provide maximum assistance to the Canadian business community in their export efforts. There will of course be areas and sectors which may feel a sense of greater exposure to competition because of tariff reductions made to gain access on a wider basis to the markets of the world for a very broad range of Canadian products. There are bound to be some local, negative reactions. But in the overall, this is a great, positive step, and it can mean a very large net gain for the Canadian economy. I am sure our dynamic Canadian enterprise will ensure that result.
[DOT] (8:10 p.m.)
I have asked the house leader to bring before the house tomorrow, if it is agreeable to hon. members, the estimates of the Department of Trade and Commerce so that this important development may be gone into more fully, to the extent that hon. members might wish. I understand from the Minister of Finance (Mr. Sharp) that he too will be here tomorrow.
Now, Mr. Speaker, with the permission of hon. members I would like to table in English and French the following material:
1.	A copy of the special issue of the Department of Trade and Commerce publication "Foreign Trade," dated July 1, which is devoted to this issue and shows the major tariff cuts gained, together with concessions granted by Canada, and some editorial comment on them.
2.	A descriptive analysis of the concessions received in our major export markets by broad commodity sectors.
3.	A descriptive analysis of the concessions extended by Canada.
4.	A detailed list of items of interest to Canada on which concessions have been
Geneva Agreements
secured from the United States, the E.E.C., Denmark, Norway, Sweden, Finland, Switzerland, Spain, Japan, Korea, Brazil, Yugoslavia and Israel. This list shows the present and new rates of duty as well as the most recent trade figures. This represents all the major trading items but it is not a complete list of all concessions obtained. Information on items not listed will be available from the Department of Trade and Commerce.
5.	The complete schedule of Canadian tariff concessions showing a description of the items and the rates of duty. Under the term of GATT these tariff concessions are extended to all members of GATT, and also to all other countries with whom we have most-favourednation agreements.
6.	A detailed analysis of the new world cereal agreement as well as the text of the agreement.
7.	A descriptive analysis of the new international code on anti-dumping policies as well as the text of the code.


Mr. Speaker:: Has the minister leave to table the documents to which he has just referred?


Some hon. Members:: Agreed.


Mr. Jorgenson:: May I ask if the minister would agree to have these documents printed as an appendix to Hansard.'!


Mr. Speaker:: If the hon. member will look at the volume of the documents now on the table he will see that would be a physical impossibility. I understand that the documents in question will be distributed in the lobbies to hon. members.


Robert Henry Winters: Yes, Mr. Speaker, copies are available in both lobbies. They are also available in the distribution office, and there is a supply available in my own office.


Mr. Jack A. Irvine (London):: Mr. Speaker,
I think I am making the understatement of the year when I say through you to the minister that it would have been rather helpful had we had some of this material in advance.
I realize, however, the difficulty involved.
I was pleased to hear the minister make some kind and well deserved remarks about the late President Kennedy. I think that was only proper. Certainly all hon. members would agree with the sentiments he expressed.
I believe most hon. members will agree that the minister's speech was a great deal of

minister. Let us hope that this is a step forward, and that it does not contain a retrograde aspect.


Stanley Howard Knowles: Mr. Speaker, we in this party join with the Minister of Trade and Commerce (Mr. Winters) in the tribute he paid this evening to the late President Kennedy in connection with the announcement he made tonight, and the agreement which is being signed tomorrow. I think it is fair to say, if the results of the Kennedy round measure up to the predictions made by the Minister of Trade and Commerce, that the late President will have no greater memorial than the attachment of his name to these agreements.
We thank the government for making the arrangements for the statement to be made tonight and for the material to be distributed to members. We also thank the government for making the consequential arrangement for the estimates of the Department of Trade and Commerce to be discussed tomorrow. In other words, we can postpone any further comments in respect of these agreements until we reach that stage in our proceedings.
There are just one or two comments I should like to make at this time. The minister referred, and I believe quite properly, to the advantages which can flow to a country like Canada from increased trade, from greater opportunities to get into export markets, and from the possibility that our economic base may be shifted from one which relies largely on resources to a mixed base of resources and broad industrialization. We trust that the result will be an increase in the total wealth that accrues to Canada. We wish to make the point, however, that this is useless unless it is matched by domestic policies designed to make sure that the greater wealth which accrues to this country will be shared by all of our people; jn other words, improved trade policies must be matched by improvements in legislation in the field of social security, housing, and in all the other fields which get the wealth which we produce through to the people. It is not good enough simply to have expanding sets of figures in the Department of Trade and Commerce. We must see to it that the result is the highest possible standard of living, education, health and security for all our people. These things must be the ultimate goals of the Kennedy round.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, like the hon. members who spoke
Geneva Agreements
before me, I too wish to congratulate the hon. Minister of Trade and Commerce (Mr. Winters) and the hon. Minister of Finance (Mr. Sharp) for having given us, this evening, a general idea of the agreements concluded during the Kennedy round.
But first, I must congratulate the minister for having chosen that name or, so to speak, for having christened the Kennedy round as a memorial to the greatest president, to my mind, who ever ruled over the destiny of the United States in the social field, a president who, in his work, gave the human being precedence over the financial system.
I believe, Mr. Speaker, that those agreements will enable Canada, whose population is very small but whose wealth is tremendous in natural resources of all kinds, even in the field of agriculture, to have easier access to export markets.
I deeply regret that those documents did not come to us earlier-we have just received them-which would have enabled us to analyse them and to make more specific comments on these agreements. When I look at the negotiations, I wonder what that will mean for farm, fish, forest and processed wood and paper products, more particularly in my region, which is recognized as a large paper-producing area. I believe those agreements will be welcomed throughout the province of Quebec, as well as Canada, and we will be happy tomorrow to issue some more specific opinions on these agreements.


Robert Norman Thompson: Mr. Speaker, at this point, without having the details before us, it is not really possible to comment in any specific way or to make any sweeping statement in respect of the details of the arrangements which have been worked out in the Kennedy round and about which the minister has informed us in general terms. There are, however, one or two points which I might mention. The minister spoke about the expanding export opportunities. I believe this is one of the great challenges before Canada as we move into our second century, because not only have we tremendous natural resources but we also are rapidly becoming the great manufacturing country which our position in the world gives us the opportunity to be at this time.
There are several points about which I am concerned. These relate to the remarks the minister has made. The first refers to our tremendous imbalance of trade with the

June 29. 1967
Geneva Agreements
United States. I would hope that in some way the new tariff arrangements might help meet this problem, a little more effectively than it has been met in the last several years. Likewise I would trust that the benefits from these tariff reductions might be directly related to the consumers and to the costs of those things which the consumers must buy.
I think one of the great criticisms in respect of the automotive arrangement is the simple fact that the benefits, at least in the early years of this arrangement, were not passed on directly to the consumers. These reductions in tariffs will really lose their point unless this takes place. So I would hope that these arrangements will relate to some of the problems we face.
I should like to remind the minister and the government as a whole that one of the great problems we face in respect of trade today is far beyond that of the lowering of tariffs. I refer to the problem of international settlements and international liquidity.
[DOT] (8:30 p.m.)
Unless a new arrangement can be worked out as far as credits are concerned in this whole area of trade, then all of the tariff reductions that may be worked out will really not help to solve the problem we face. I believe it has become urgently apparent to some, if not to all countries which are major traders in the world, that unless there is a new basis of international exchange, a new opportunity in the area of international settlement, and a greater financial liquidity can be provided for the nations of the world as they develop in their respective and different areas with the increase of greater trade patterns, we are going to continue to be in trouble.
Speaking on behalf of this party, I welcome the trend that is evidenced in the tariff reductions as a result of the Kennedy round. I believe that it is not only important to our position as a trading nation, it is important to the world. We talk about peace and we think of keeping the peace in terms of military force and might. One of the greatest opportunities we have in working toward peaceful opportunities and for the development of our resources in the world, both human and material, can be gained from more free trade patterns and, ultimately, unrestricted trade for the world. In this regard we welcome this major step in that direction.


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


The Assistant Deputy Chairman:: Order, please. The house again in committee of supply, the estimates of the Department of National Revenue, Vote No. 5.
5. General administration and district offices including recoverable expenditures on behalf of the Canada Pension Plan, $57,833,900.


Robert Norman Thompson: Mr. Chairman, when we adjourned the debate at four o'clock I had several points in mind I wished to bring to the attention of the Minister of National Revenue. I realize that his position is not an easy one. Certainly the public tax collector is not a position one would normally consider with much relish. However, this is an extremely important responsibility because governments have no sources of revenue other than from the taxpayers' pockets, and someone must be responsible for collecting the taxes which the government imposes.
The second phase of the responsibility of the Minister of National Revenue which is not particularly enviable is that phase relating to the collecting of taxes the minister had little to do with in design. I am disturbed about some aspects which have developed in regard to tax collecting which result in infringements upon the rights and freedoms of citizens. I am thinking particularly of small businesses in respect of which the owner and his employees must collect and keep record of the tax. I have received many complaints in this regard, and have a great deal of correspondence, which I believe is very little different from that received by other members of parliament.
It seems to me that this type of businessman is being asked more and more to devote a great deal of his working time to the services the government requires of him. This is true not only of tax collecting but in the interpretation and enforcement of taxing regulations, as well as filling out innumerable tax forms which are constantly before him. The small businessman must comply with these demands on behalf of the government, and at its request.
The Department of National Revenue must constantly keep in mind that much of this work which is being done by the small businessman is really being done as a courtesy to the Department of National Revenue. It must be understood that this very often costs the small businessman a good deal, and
June 29, 1967	COMMONS
causes him a great deal of concern. It is with this fact in mind that I introduced a bill in this house, C-130, which relates to the establishment of the position of ombudsman for administration. I suggest in this bill that this appointee could very well be the Auditor General, and in this way avoid the appointment of another official, or members of another staff. I made this suggestion because someone must better look after the interests of the small businessman and other taxpayers, as well, other than just members of parliament.
To be more specific let me refer to some of the problems which have come to my attention in recent days. First of all I refer to the exemption of the tax on drugs, to become effective on September 1 of this year. I am concerned because no provision is being made to protect the druggists of this country regarding their investment in the stock which now sits on their shelves. I have received correspondence from a number of druggists and have become aware of the fact that there are many corner drug stores, as they may be described, the owners of which will be out of pocket anywhere from $3,000 to $8,000 because no provision has been made to refund the tax they have already paid on these inventory drugs, prior to the implementation of this tax removal.
I have in mind particularly a druggist in my own town. He tells me that this revision in respect of the tax exemption on drugs is likely to cost him $6,000. He operates an average size drug store, but he expects he will lose that amount of money because no provision has been made to refund the tax he has already paid on the drugs now on his shelves. The minister has already said that no one will require these druggists to make an immediate reduction in their prices, as soon as the removal of this tax comes into effect. It is very nice to talk as the minister does, but who would sensibly suggest that such a man would be able to charge the price charged before the removal of the tax, after the tax removal goes into effect? That is not possible. Certainly the minister and his officials know that the public will expect that after September 1, 1967 the cost of drugs will come down by an amount equivalent to the tax which has been removed.
I urge the department to take some action in this regard in order to protect the small businessman who is going to pay money out of his own pocket because of this tax reduction. Surely this is not fair. It seems there ought to be some consideration given by the department for these people who do so much
DEBATES	2125
Supply-National Revenue for the government in collecting taxes and keeping records. Their plight should be considered when the tax exemption takes effect. I would urge that the department take a second look at this problem and do something about relieving the very heavy burden which will face most people in the business of selling drugs when the tax exemption comes into effect.
[DOT] (8:40 p.m.)
I should like to mention another matter in respect of the collection of sales tax from small businesses which may be classified in part, as far as their activities are concerned, as manufacturers manufacturing items totalling more than the minimum exemption per year, which I believe is $3,000. Here again a difficulty is being worked on a number of small businesses. It is really so heavy on some that it means the difference between being able to stay in business and not being able to do so. Let me be specific and quote one example. In any city or town in this country you may find a welding shop. This welding shop is not really in the business of manufacturing, but in the course of its business clients bring to it the type of work that can be classed as manufacturing. If this type of business totals through the year more than the minimum exemption, it is necessary for the owner of the shop to collect the sales tax from those with whom he does this business. This is the regulation. If the welding shops in every community across Canada were classified and inspected by the tax department no hardship would be imposed on some that did not apply to the others. The simple fact is that because the taxation offices do not have sufficient staff to go out and check on every type of business that might come under this classification or category, some are registered and are required to pay tax and others are not.
What disturbed me about the attitude of the department is this, and I hope the minister takes note of this problem. The tax department says, when you bring this matter to their attention: We do the best we can about bringing every business in this category under the inspection of the department, but we cannot be sure that we get them all. Will you please ask those shops that are complaining about having to pay the tax to tell us the names of those who are not paying it. Ask them to give us a list of those shops that are not paying the tax.
They even ask us as members of parliament to make a list of the shops that are not paying the tax. How foolish can the tax department be
June 29, 1967

Supply-National Revenue in this regard? Does this mean that a member of parliament should become a policeman for the tax department? Does it mean that a man has to make a report to the department about those with whom he competes? Certainly the clientele of these shops will not accept this. It is not the responsibility of the businessman or the member of parliament to check into these matters for the tax department. If the department does not have sufficient staff, or is otherwise unable to make the proper inspection to make sure whether firms in this minor category-I think this is how it might be described-are paying the right tax, it is up to the department to check into the matter.
It seems to me it would be only fair not to collect tax from one firm if the department is not able to ascertain all other firms which fall within this category. This problem applies to many communities across Canada. I am not putting forward a theoretical proposition; I am talking about a situation that exists. In many small cities and towns two, three, four or five people are engaged in the same line of business; one or two of them are paying tax and fall under the inspection of the department, and others are not paying tax and are not required to meet the regulation. Surely this is not fair.
This is a real problem that is presented to a number of small businessmen in this country. The situation is not satisfactory and something should be done to resolve it. Again I say that I believe it is the responsibility of the tax department to ascertain who should pay this tax. The department must look into the problem and not just condemn these people as complaining for the sake of complaining or trying to get out of paying tax. I do not believe that very many people in Canada try to get out of paying taxes that are required according to the law of the land. In fact, Mr. Chairman, I have found that the great majority of businessmen want to do what is right, but because of the complexity of the tax regulations and the unfairness of the application of some of these regulations they find themselves in a very difficult position. Also they find themselves in a position of tension because they are continually concerned as to whether they are properly carrying on the type of work that requires them to pay tax. They fear they may be in error and will be brought before the department for having made a mistake or for not having paid tax which they did not believe was their responsibility. I should like the minister to


give me an answer to this question before these estimates are passed, and I would urge the department to take a very careful look at the problem.
Another point is that under tax regulations certain types of equipment are classified as farm equipment. An increasing number of new machines used on farms legitimately come under the classification of farming equipment. This equipment has not necessarily been used in the past and the farmers are not being properly classified in respect of the equipment as far as tax exemption for agricultural machinery is concerned.
One such problem that has been brought to my attention, of which I have informed the minister-and I believe the department is aware of it-concerns a type of farm trailer that can be used behind small trucks or tractors. This equipment is used both commercially and agriculturally. Some farmers are required to pay the normal tax and others are exempt from it. In my opinion it is the responsibility of the tax department to make sure that the application of its regulations is equitable and fair to everybody, which definitely is not so in this case.
There is still another problem with regard to which I have not been able to obtain a satisfactory answer from the department. It concerns an item that is not yet manufactured in Canada and must be imported from the United States. This matter has been mentioned a number of times in debate. I refer to the motor vehicle that is used as a funeral coach, a hearse, or as a combination coach and ambulance. As these vehicles are manufactured only in the United States they come under a regulation that is specific in so far as tax exemption is concerned. The department has recently attempted to classify a similar unit made in St. Catharines as an ambulance and funeral coach. In the opinion of the department funeral coach and ambulance types imported from the United States would now come under the tax regulations that otherwise would not be applicable. Here again it seems to me the department should be more concerned about looking at the problem as it relates to the businessman involved or the user of the particular piece of equipment, rather than applying the regulation in all its apparent legality. In the case I have in mind a combination ambulance-funeral coach has been manufactured in the United States and brought into Canada as a vehicle to be used by a voluntary organization in the city of Jasper. It is required that a duty be paid on
June 29, 19S7

this vehicle both because of anti-dumping regulations, as well as the normal customs and excise tax.
[DOT] (8:50 p.ra.)
On top of that it is subject to other taxes, which I do not believe should apply to this type of vehicle, on the pretext that a minibus or a truck type of stationwagon can be modified by raising the roof to make it into this type of vehicle. Perhaps ambulances may be made by modifying other vehicles to meet the requirements of public health and safety, but the fact remains it is not really this type of vehicle. Again it seems to me that the decision of the department in the interpretation of regulations should be in favour of the user of this equipment and of the businessman who is responsible for importing this type of vehicle into the country.
I have one more point which I should like to bring before the minister tonight. It applies to the registration of charitable organizations to which gifts would be exempted under the income tax regulations. I think there has been a great deal of trouble with regard to this matter. I do not think anyone can be blamed for this because the legislation was only passed shortly before Christmas and the announcement that it would be implemented as of January 1 came much too soon for the necessary preparations to have been made in order to process the thousands of organizations in the country which come under the legitimate classification of charitable organizations.
I wish to commend the minister for having speeded up the processing of the larger organizations that I have brought to his attention. I believe that most of the larger organizations in the country have already been registered. However, we are six months along in the new year, and there are still hundreds of organizations, many of which have applied as early as in January, which have not yet been registered and have not had a number assigned to them which they must indicate on receipts given to those who make donations to these organizations. It seems to me that here again undue hardship was worked on the person who is not trying to evade taxes but is trying to follow the regulations and obey the tax laws of the country. It would have been far better if the implementation of this tax could have waited until the department was

Supply-National Revenue ready to process the thousands of applications which it knew would inevitably come before it. I would only hope that at this late date the department will make every effort to deal with these applications so that the receipts that are being held up for lack of a registration number will be soon available to the organizations which are legitimately classified as tax exempt charitable organizations.
There are other points that I could bring to the attention of the minister. However, the four or five points which I mentioned represent urgent problems to many Canadians. I trust the minister will give an answer to as many of them as he can while we are discussing the estimates tonight and that action will be taken to clarify them as quickly as possible.


Edgar John Benson: First of all I should like to congratulate the hon. member for Red Deer on the interesting points he raised with respect to the administration of the Income Tax Act. I should like to say to him that in the determination of tax policy there is very close co-operation between the Department of National Revenue and the Department of Finance. I would not say the Department of National Revenue ever administers a policy which it has not had the opportunity of considering previously.
The hon. member mentioned the cost of collection by small businessmen. The idea that small businessmen having to collect taxes for the government of Canada-a very interesting proposition-should receive some recompense for doing so. This matter had been considered by this and previous governments but the conclusion has been reached that to recompense the small businessman would entail an increase in taxes in order to raise the funds to pay them.


Robert Norman Thompson: Mr. Chairman, may I clarify a point? I did not suggest the government should recompense these businessmen. The point I was trying to make is that the government should facilitate the work they are doing. I understand that paying them for doing this work is out of the question. I would only ask that consideration be given to assisting them in facing the problems which they have as a result of having to do this work.


Edgar John Benson: I should like to say that the officials of the taxation division of my department try to co-operate with small businessmen as much as possible in order to simplify their task, which is a difficult one. The hon. member for Wellington South put forward an
June 29, 1967

Supply-National Revenue idea this afternoon which has been in my mind for a long time, namely that the collection of all the revenues of the federal government should be handled by one department. However there are some very difficult questions involved with regard, for example, to unemployment insurance which is handled by a separate commission. I would simply like to assure hon. members that this matter has been receiving constant consideration by the government and although legislative steps are involved we will continue to consider the matter of facilitating the work of the small businessmen on behalf of the government.
The hon. member for Red Deer mentioned the matter of the ombudsman. It is my opinion that so far as taxation in Canada is concerned we have in effect a group of ombudsmen in the income tax appeal board, a body of men quite separate from the Department of National Revenue, which travels about the country hearing taxpayers' complaints with regard to individual taxation matters. They have been most successful in their work, and I think all of us should congratulate them on the manner in which they have carried out this task over the years. This board does the job of dealing with the taxpayers very satisfactorily. As I mentioned this afternoon, I hope that in order to clear up the backlog of their work we might expand their number so that taxpayers may be given a better chance to appeal to these quasi ombudsmen.
The hon. member for Red Deer also mentioned the matter of drugs and the problem of some people who will be left as of August 31 of this year with the sales tax on drugs which are on their shelves. Basically this is a matter for the Department of Finance. It is the job of my department to administer the law as approved by parliament, and not to make the law. However, a good deal of consideration has been given to this matter, and I believe the Minister of Finance would support me on this. One of the reasons for which the tax was not reduced immediately but was delayed for several months was to give people an opportunity to review their inventory and protect themselves as much as possible. Of course it is not possible to protect oneself completely, but the other alternative would have been to reduce the tax immediately and this would have raised a far greater problem than the one raised by my hon. friend. As things stand at present pharmacists have an opportunity to adjust their inventories in order to minimize their losses.


Robert Norman Thompson: May I ask the minister a question? He said the only other alternative

would have been to impose the tax immediately. Why not trust the druggists of this country to submit reports which would give them an exemption on the inventory of drugs on their shelves as of August 31 in order that they may relieve themselves of this very serious problem? Does the minister mean they would have to sell everything they had on their shelves, and then through some miracle replenish their shelves again on September 1? There is no logic in his argument.
[DOT] (9:00 p.m.)


Edgar John Benson: When a federal sales tax is charged, a federal law is passed and the tax becomes effective on the same day. The reason generally that this is done is that efforts are often made to minimize the effect of sales tax. The reason that the Minister of Finance -I am not trying to justify his policies; he is quite capable of doing this himself-decided upon the four month period was in order to remove any problem for the people involved.
The hon. member for Red Deer also mentioned people who pay sales tax on their production while others are exempted from that sales tax because their production amounts to less than $3,000 a year. This has been a constant problem to the customs and excise side of my department, whose estimates we passed earlier. Indeed, we have tried to seek ways of easing the problem involved.
However, arguments are made on both sides. It is argued on the one side that the $3,000 exemption is insufficient, that people should be allowed to produce goods worth $4,000 or $5,000; on the other side it is argued: "I have just exceeded $4,000 production and have to pay 12 per cent sales tax, whereas a fellow I know down the street who is moonlighting and producing just $3,000 worth of goods a year does not pay the sales tax".
Probably the simple solution, Mr. Chairman, would be to impose sales tax on all production regardless of value. The reason this is not done and that there is this exemption is an administrative one; we would have to try to deal with everyone working in production part time and who might be subject to the imposition of sales tax.
My hon. friend also raised a question about farm equipment. I think some of the problems he raised will be eased as a result of the decision of the Minister of Finance and the government to remove the sales tax on production machinery. One of the big problems that we encountered when sales tax was imposed on production machinery was due to
June 29, 1967

this. In the past people in the farming industry had considered purchasing certain production machinery, which was sales tax free. Then all of a sudden sales tax on this machinery was imposed and these people wanted this machinery moved from the category of production machinery into the category of farm machinery. I think this particular problem will be eased a little by the decision of the Minister of Finance and the government to remove sales tax on production machinery as such.
The hon. member also mentioned sales tax on funeral coaches. One of the difficulties in this regard is that not only is there a sales tax and customs duty on used cars imported into Canada, but except in special cases the importation of used cars into Canada is prohibited. Over the years I think this prohibition has been justified. In view of the vast United States market and the differential in car prices in Canada and the United States, succeeding governments have decided to protect Canadians against a flood of used cars from the United States.
I should like to inform the hon. member that some of the few exceptions which have been made to this rule against importing automobiles from the United States-and these exceptions are made pursuant to section 22 of the Financial Administration Act-were in respect of funeral coaches. The government has always taken the position that this prohibition of importation was for a specific reason, and that before allowing any less restricted importation of used funeral coaches from the United States the government must canvass the industry in Canada to see whether there was any objection.
This canvass was made, and some of the few cases where we did ease up on the importation of second-hand vehicles into Canada related to funeral coaches which were bought by people with relatively small means in this business, who imported these vehicles from the United States because they could not afford to buy new vehicles. Generally, Mr. Chairman, we have looked reasonably sympathetically toward these people in this regard.
The other point raised by the hon. member for Red Deer concerned registration of charitable organizations. I think that the staff of my department is to be congratulated on the tremendous progress that has been made-I am speaking here of my officials-in the registration of charitable organizations in Canada. When the legislation was passed last fall-legislation which I think was good, and necessary-my department was faced with
Supply-National Revenue registering some 40,000 charitable organizations in Canada. We had to decide how to handle these organizations, whether we would hire new staff to handle them, or have close consultation with the charitable organizations themselves and try to move them through in as orderly a manner as possible.
We decided to adopt the latter course, and I think this has generally worked out very well. My hon. friend indicates that there are still hundreds not registered, but in cases where non-registration of a charitable organization is causing difficulty, if the organization will get in touch with my department they will be given special treatment. However, we followed the general policy of determining in connection with these charitable organizations when they collected most of their funds. We dealt first with those who collected their funds in the early part of the year and sent their registrations out to them, and we will deal with the others when we have more time.
In cases where changes have been made and funds were collected at a different time, or where special problems were involved, when hon. members such as the hon. member for Red Deer got in touch with my department I think they would have to agree that they received reasonable and fair treatment from the department in dealing with these problems.
In conclusion I would say that I think the people in the taxation division of the Department of National Revenue who have dealt with this matter have done a tremendous job to date, and I think they are to be congratulated.


Robert Norman Thompson: Mr. Chairman, might I make one or two comments; I think there has been a misunderstanding on one or two points I made. I was not criticizing the department in the latter instance at all. In fact, I said I found them very co-operative whenever I brought to their attention the problem of an organization which had not had its registration approved. What I was pointing out was that we are now in the sixth month of the year and that there are not only hundreds but several thousands of organizations which have not yet been dealt with. I was drawing to the attention of the minister that many of these organizations are presented with a real problem and perhaps were not aware that they could ask for special consideration. I put forward only the cases of those that I felt really deserved special consideration in view
June 23, 1967

Supply-National Revenue of the volume of receipts that they issued. While the department may well be deserving of commendation, we have now reached the point where the situation must be cleared up very quickly.
With regard to funeral coaches, I was not talking of used coaches at all but of new coaches and some of the problems which are arising over the calculation of duty and tax. According to the regulations-I am not disputing this-if these vehicles are made in Canada-at least, vehicles of similar type, the imported vehicles would be subject to certain regulations which would not be the case if they were not made in Canada. The point is that when we do require equipment that is not manufactured in Canada, then I think every consideration should be given to the users of and dealers in such equipment, for proper tax exemption.
[DOT] (9:10 p.m.)
It is understandable that the volume of demand for funeral coaches, and particularly for proper funeral coach and ambulance combinations, is such in Canada that it will be a long time before we can manufacture them here. There is not sufficient demand to warrant the setting up of factories for their manufacture. That is why I brought this matter to the minister's attention.
Perhaps I did not make myself clear when I was speaking about sales tax. I was not particularly concerned about the small manufacturer, who is probably $100 over the minimum or $100 under it. I was referring to the apparent inability of the department-and this is probably owing to a lack of staff which makes impossible adequate supervision-to bring under inspection every business that is eligible to pay this tax. Many smaller manufacturers which are paying taxes are doing so in conscience or because they know of the tax regulations, whereas others which are not paying the tax may be deliberately avoiding its payment, or are not aware of the regulations. I draw this matter to the minister's attention because unless the matter of tax collection is properly administered the tax works a hardship on some but not on others.
This may be an administrative problem. If you talk to the tax officials in the hinterland, where the taxes are collected, they will be the first to admit and to understand this problem, and to express regret that such a situation exists.
I brought these matters to the attention of the minister because more attention ought to

be paid to them, in order to alleviate the problem which affects this area.


Edgar John Benson: If I might be allowed to say a word in reply to the hon. member for Red Deer, I wish to assure him that the problem of charitable deductions and registration is being cleared up as fast as it is physically possible to do so. The second matter he raised, with regard to new funeral coaches, I shall look into carefully with officials of my department and with officials of the customs and excise branch.
The third problem the hon. member brought up, with regard to the registration of firms for sales tax purposes, I can answer in this way. Due to our program of regionalization this year, it is estimated that during the year 1,000 new manufacturers will be admitted to the register-if that is considered an honour-under the sales tax legislation. I think, generally, that our administration will be improved.


William Arnold Peters: Mr. Chairman, I wish to raise, in short order, three problems that are important. The first has to do with deductions in personal income tax. The situation in Ontario has become chaotic. Some, who receive insufficient income in one year to pay income tax, under certain circumstances receive enough revenue to pay income tax the following year, and a confused situation has arisen. The provincial department dealing with social welfare has not been able to cope with the problem that has arisen.
Another matter I wish to raise is that of simplifying the means test as it relates to the income tax form. Not all married couples live together. A man of 70 or 75 may be separated from his wife, and similarly a woman of 70 or 75 may be separated from her husband. They may have been separated for a long time. How is a spouse to know how much the other earned in any year, if that spouse cannot find the other? The department wishes to know what the combined income of the couple was. Of course, there is a form that may be filled out to show that a couple is separated and that one spouse has not supported the other; but getting involved with such a form is a complicated business and I think a simpler way of providing the required information should be found.
Perhaps on the application form a section for separated persons should be included. A number of people have asked me to get in touch with a husband or a wife, so that one could find out how much the other earned.
June 29, 1967	COMMONS
Often the information has not been forthcoming. Remedying this situation would be useful.
Consideration should be given to exempting non-profit organizations from the building tax. Specifically, I am thinking of a legion which decided to build family unit homes for some senior citizens. They had to pay the building tax. Surprisingly enough, the tax made a difference of $7 or $8 in rent. I should not think that there are too many non-profit organizations that would be affected by the removal of the tax; and I do not think tax collections would go down appreciably.
Every member of parliament, I believe, wishes for a simple income tax application form. The simpler the forms, it seems, the less even the Philadelphia lawyers can figure them out. It seems that the man in charge of the computer expects only those in the $30,000 and $40,000 bracket to be able to answer the form. Personally, I have advised people who have got in touch with me and who make that kind of money to fill out the form as best they can, send it to the department, and let the department figure out if there is anything wrong. There must be a better way of compiling tax forms and schedules.
Frankly I do not know how they calculate some taxes. I studied trigonometry, algebra and geometry, but I do not know the mathematics involved. It seems that the simpler the form is said to be, the more complicated in fact it is. The minister said that this year we should have the simplest form we have ever had. Well, even the accountants are not sure of what should be done. I should like to see the minister putting two or three of his best men to work on this problem, so that when we get our income tax forms next spring we will find forms that are simpler for us to fill out, rather than simpler from the point of view of the department.


Edgar John Benson: Mr. Chairman, answering the hon. member for Timiskaming, I wish to say that several of the matters he raised are policy matters that come under taxing statutes, rather than under the administration of my department.
So far as welfare applications are concerned, and the matter of taxable income as well as the matter of simplication of the test with respect to the supplementary old age pension, that must be determined by the Department of National Health and Welfare.
As for the tax on non-profit organizations, that matter is to be determined by the government and this parliament before my department can consider it.
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Supply-National Revenue
With respect to the matter of simplying income tax forms, I think the tax return form this year was simpler than ever before.
The reduction in error, other than with respect to the Canada Pension Plan entry which was included as a new calculation and caused trouble, was of the order of 60 per cent this year as compared with last year. Though the return may be complicated, most people had little trouble in filling it out. I wish to say that in Canada, I believe, we have the simplest tax return of any country in the western world.


Mr.   Barnell@: How simple?


Edgar John Benson: The only way to make it simpler is to have simpler tax laws. In the long run I do not think that is possible, and I do not think that the forms will become simpler because the taxation system is becoming more involved. Believe me, if one were to heed some of the suggestions that have come to my attention, the tax returns would become very involved.
[DOT] (9:20 p.m.)
I should like to assure the hon. member that there are officials in my department who spend a great deal of time trying to find out where people have problems in connection with tax returns and trying to make the forms simpler for them to follow. But this is never a completely simple matter and all I can say is that we shall keep trying.


Mr. Webb:: I know the minister is sympathetic in his attitude toward small businessmen-and here I do not have in mind the department's definition. I am not speaking of businesses handling $500,000 a year; I am speaking of small businesses handling $50,000 a year.
Could not something be done to change the heartbreaking and discriminatory legislation which at present does not allow a storekeeper, for example, to deduct wages paid to his wife when computing tax liability? I would say that more than half of our small businesses operate under this disability. I have in mind small town grocery stores which would be forced to go out of business were it not for the fact that the wives help the husbands to carry on.
The minister told us himself a few minutes ago about the ever increasing demands made by the governement in the taxation field. Someone has to do this work. If a clerk were hired to do it, his wages would be deductible. Could the minister not give this question
June 29. 1967

Supply-National Revenue serious consideration? Throughout the country, especially in the rural areas, this is one cause of great dissatisfaction to a large number of people. I plead with the minister to give it his attention.


Edgar John Benson: As hon. members will understand, this involves a matter of tax policy which has nothing to do with administrative decisions made by my department. I have a great deal of sympathy with the plea made by the hon. member. The situation he describes does not involve liability for income tax alone; it also concerns unemployment insurance. A small businessman may not deduct the expenses of a wife, though he may deduct salaries paid to his children. And he may not insure members of his family for purposes of unemployment insurance. If his business were incorporated, he could do this, and one solution might be to file a joint return. The ideas suggested in the Carter report, on which the government has made no decision, would probably clear up this kind of problem, though they might create many others.


Herbert Wilfred Herridge: First, I should like to thank the minister for the personal attention he has given to any matter I have brought to his notice. This is good public relations. A number of people have written to me saying how much they appreciated having the questions they brought to my attention answered in detail by the minister or by some of his senior officials. One lady told me that she had never met anyone who could pick Canadian pockets so congenially and with such a winning smile.
I appreciate the co-operation I have had from members of the staff of the department and also from members of the staff of the district office with whom I have discussed questions in respect of my own constituency-transportation, the best way to go here and there, and so on.
I was interested in the remarks of the hon. member for Red Deer with respect to charitable organizations. I have brought this matter before the house on a number of occasions throughout the years, because I have never been satisfied that all the organizations which are registered as charitable organizations really are charitable organizations. Could the minister tell us briefly the result of the study which was made of this situation? Would it be possible for hon. members to be given the names of the organizations which are now registered as charitable organizations, together with an indication of the formula used by the department to determine their eligibility under the terms of the act?


The other thing I wanted to say was this. Although greatly increased amounts are collected in taxation every year, the efficiency of the department is increasing as a result of the introduction of various types of unusual machines. I have very little knowlege of how they work, but I have been through the building, have seen these machines in operation, and have seen the results.
It is fair to say that persons who work in a department such as the Department of National Revenue are doing something which has no drama attached to it-their work is related to figures and facts and to the interpretation of an exact law. I think the officials and the staff who work in the department are deserving of a great deal more credit than the people of Canada give them at the present time. It would make for good public relations if the Department of National Revenue would put out some booklet or pamphlet which could be sent to taxpayers when they receive their tax forms or correspondence from the department, a booklet which would indicate the vast increase which has taken place in the work done over the years and the efficiency of the staff in general in dealing with it. Some of the problems related to the administration of the department could also be drawn to the attention of the public in this way.
I offer this as a suggestion. Two or three people have spoken to me along these lines, feeling that such a move would assist the operations of the department, improve public relations and bring the administration closer to people who are more inclined to be irritated by its activities than pleased by its efficient operation of the law.


Edgar John Benson: I have no doubt we shall be able to supply any hon. members who are interested with the names of the charitable organizations which have been registered up to the present time, within a reasonable period. We must bear in mind that the officials in this particular section of the department are working very hard to get the matter cleared up.
As to relations between our personnel and the public, we have been trying to do something about this over the last two or three years, at least since I have been minister, by means of an advertising campaign which has sought to make people understand that the officials in the taxation division are there to perform a necessary task. Basically, they are there to help the public meet its obligations as laid down by this parliament with regard to taxation. I think we have met with some
June 29. 1967	COMMONS DEBATES	2133
success in this regard and we shall continue to move along these lines.
I should like to thank the hon. member for his compliments with respect to myself and my department. The only way in which he could help me more would be by allowing the committee to pass these estimates.
[DOT] (9:30 p.m.)


Stanley Howard Knowles: Mr. Chairman, it is difficult for me to look at the minister and not realize that he is also President of the Treasury Board. I realize, however, that on these estimates I cannot discuss a burning issue until he dons his other hat. For this reason I shall raise just one matter that comes under his responsibility as Minister of National Revenue. It is a matter we have raised before. 1 still hope it will be sorted out in a way that will cause less hurt to the people affected.
I am referring to the fact that quite a number of older people who have adjusted to a pattern of income tax payments discover that the addition of the old age security pension, or of some other pension payment, puts them into a category in which, if their tax is not paid quarterly, interest is added to it at the end of the year. The cases that have been drawn to my attention, and they have been many, all involve small amounts of money, $4, $5, $6, $7, or $8 as interest. I do not need to tell the minister how plaintive some of these letters are because I am sure he gets even more of them than I do.
I realize that the minister and the department argue that it is a kindness to people to urge them to pay their income tax quarterly rather than annually, and also that since most people have to make tax payments monthly, or even more often, through deductions at source, fairness demands that all people be treated the same way. But in actual fact what happens is that some of these people go along for two or three years without being required to do this. They make their income tax payments at the end of the year and are notified that the payments are satisfactory. Then all of a sudden comes a year when they get a bill for $4, $5, $6, $7, or $8 interest.
I am not trying to lay down the law to the minister. All I am suggesting is that the problem be looked at with sympathy for the position of these people. One suggestion I do make is that at least people be warned that this can happen. I hope the minister will not tell me that this is a matter of income tax policy. But even if it is, he could discuss it with the Minister of Finance.
Supply-National Revenue
I realize that old age security is taxable. At the moment I am not arguing about that. But this is the element which requires many older people to pay income tax quarterly, or to pay interest after believing they have computed the right amount of tax that they owe. As a matter of fact in all the cases that have been drawn to my attention, with the exception of the interest the taxpayers had computed their tax payments accurately. Older people have many other things to cope with, such as the rising cost of living, and it is a cruel blow when they have to pay this amount in interest. Maybe older people who are already in a different category because of the $500 extra exemption they receive over age 70, might be given a different status with respect to this matter.


Edgar John Benson: Mr. Chairman, I would simply like to say that this problem was a very difficult one when I first became Minister of National Revenue, but it has become somewhat of a lesser problem because of some steps we have taken. One of the things we have done is that when people are sent their first old age security cheques they are also forwarded a notice telling them to look to see whether they now become subject to payment of income tax in instalments.
As my hon. friend indicated, this often is the case because these people have small incomes. They get $900 a year extra and so become taxable and subject to quarterly instalments. I am not speaking on behalf of the government on this point because I am not authorized to do so, but I would be very pleased personally if this parliament said that the Minister of National Revenue was not responsible for collecting instalment interest under $5 in amount that may be due by any individual taxpayer. This would clear up a lot of these problems, and the amount of revenue involved would not be great. However I should indicate to my hon. friend that under the existing law it is the duty of the minister and of the officials in his department to apply the law as it exists, so that if somebody owes $1.50 we have to send him a bill for it. I think it is possible to do something in this regard. Indeed we have already done something, through co-operation with the Department of National Health and Welfare, by sending out these notices with the first old age security cheques.


Stanley Howard Knowles: I thank the minister for the suggestion that he has made. What pleases me is that the Minister of Finance is sitting pretty close to him and seems to have listened

June 29, 1967
Supply-Public Works intently to the suggestion. There is already provision whereby if a person computes his tax to within $1 up or down from what it should be, no payment is required or no refund is made. Surely a way could be found to do away with interest payments of less than $5.


Mitchell William Sharp: The Minister of National
Revenue is afraid of the Auditor General.


Stanley Howard Knowles: I do not think it is the Auditor General he is afraid of at all. I think it is the Minister of Finance he finds hard of heart, but perhaps this kind of public appeal from one minister to another right on the floor of this chamber may bear fruit.


[Stage Direction]
Item agreed to.
Tax appeal board-
10. Administration expenses, $193,400.
Item agreed to.
Maurice Rinfret: This concludes the estimates of the Department of National Revenue.


Edgar John Benson: I would like to thank hon. members for their co-operation in assisting me in the consideration of these estimates by the committee and for the constructive comments they have made in regard to them.


Stanley Howard Knowles: It won't be so easy when you come down as President of the Treasury Board.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
1. General administration, including grants as detailed in the estimates, $19,734,600.
Maurice Rinfret: Vote No. 1 will be found at page 420 of the blue book. The details thereof are listed at page 432. Shall vote No. 1 carry?


Hon. G. J. Mcllrailh (Minister of Public Works):: Mr. Chairman, as hon. members know, the estimates of the department have been reviewed by the standing committee on housing, urban development and public works. This is the first time the estimates of the Department of Public Works were placed before an estimates committee, and I believe from my own observation that it was a useful procedure for all who participated. I also believe it will be a useful technique in the years ahead, in providing some of the detail that is desirable and necessary in order to have a critical examination of the estimates.

In addition to the opportunity to discuss the estimates in the standing committee an undertaking was given by me that when additional information becomes available later in the year on one of the main items an opportunity would be provided for the committee to get that information and deal with it, either by referring the annual report to the committee, or some other procedure of that nature. That is also a new departure and will provide an opportunity for dealing with a subject when the information is not available on the first occasion.
[DOT] (9:40 p.m.)
The details of the estimates were prepared almost a year ago and since that time we have implemented a major reorganization of the department. The functional branches as described in the blue book, therefore, no longer exist. They have been replaced by an organization based upon the sequence of operations which applies to each project and upon a decentralization of authority to six regional offices. The sequence of operations is reflected in the headquarters directorates which are program planning, design and operations. When these three necessary functions have been completed for each project, the regional offices then assume the responsibility for constructing the work and for its subsequent operation and maintenance. A fourth new branch in headquarters is program evaluation which is important in view of the substantially increased delegation of responsibility and authority to the decentralized unit.
As I have mentioned, the duties of the administration in the blue book do not correspond with the new organization, and therefore the allocation of personnel as shown in the blue book does not correspond with the new organization. In taking together all the votes for which personnel establishments are required, we anticipate that we will be able to implement the new organization with no increase in the number of positions beyond what these positions were prior to the reorganization. In future years, our personnel establishment will, of course, have to be regulated by the work load; however, we expect to be able to handle greater work loads under the new organization without an increase in personnel.
The total increase in the estimates over last year is $15.7 million. Most of this increase is attributable to the cost of providing accommodation for other government departments. With reference to accommodation for the departments, we are working within a long
June 29, 1967

term plan which will enable us to meet the requirements of the departments by constructing new buildings and at the same time maintaining a reasonable balance with accommodation leased from private owners. There is a backlog in this activity, and the increase in our building construction appropriation reflects our efforts to catch up.
The expenditure on harbour and river engineering services in the present fiscal year will be about the same as in previous years. There are several large harbour projects under this heading such as those at Long Harbour, Newfoundland; Belledune Point, New Brunswick; and Gros Cacouna and Matane, Quebec, which are of great importance in connection with local industrial development and consequent transportation requirements. We will also, of course, be constructing a large number of small projects which are not listed individually in the details of the estimates since the requirement is that only items in an amount of over $50,000 are listed.
I could extend my remarks, but I think it probably is the wish of members of the committee that I do not do so at this stage. I shall be pleased to give all the information I can in answer to the questions which are asked. I shall be very glad to hear the views of hon. members on this subject.


Mr. Keays:: June 29, 1967
Supply-Public Works
time the officials said there were approximately 90 employed. With the new procedure and responsibility given to the Department of Public Works I am sure there will be an elimination of the duplication or multiplication of the work of architects, draftsmen, engineers, either mechanical or electrical, researchers, specification writers and the staff of the procurement branches of different departments.
As a result of the adoption of this policy there will be created certain agencies specialized in certain fields of activity. Surely this can only lead to savings, better administration and solutions to the problems which face so many Canadians, and I refer to the taxpayers. When the government tends to economize and continuously searches for ways and means to save the taxpayers money on behalf of the Canadian people, it is doing a good job.
How many branches of departments of government have their own architects, engineers and draftsmen? The duplication of service in this regard could be eliminated if these efforts were centralized in the Department of Public Works. There are very many services which are of a specialized nature. I am thinking particularly of services performed for the Department of National Defence. If centralization could be brought about, all the departments of government would require only a small staff with a very few consultants who could keep in touch with the officers of the Department of Public Works, who would advise them as to their requirements in respect of buildings and other things. I am sure these officers of the Department of Public Works could do this job as efficiently, with a greater savings of the taxpayers' money.
Some of the recommendations of the Glassco commission in respect of the Department of Public Works were very interesting. The first I should like to mention related to the processing and control of mail. The report suggested that statistics now reveal that the cost of processing mail is $79 for 1,000 pieces in the Department of Veterans Affairs, and $472 for 1,000 pieces of mail in the Department of Public Works. The statistics also revealed that the cost of processing outgoing mail in the Department of Agriculture and the Department of Citizenship and Immigration was approximately $2.40 and $1.70 for 1,000 pieces respectively. The statistics showed that this cost in respect of the Department of Public Works was $16.50. This amount is the result of some expensive practices. I am sure this information has been considered, but we would be

very interested to find out just how the situation has been improved.
In respect of the Department of Public Works acting as a purchasing agent for all departments of government, I believe it could specialize in the fields of construction and maintenance. In my opinion it is sensible that the purchasing for all government buildings, owned, leased or operated by the government, could be done by the same department. In looking at the same report I note there is an expression regarding the Canadian Broadcasting Corporation. In the view of the commissioners the scope of the corporation's engineering activities should be limited to technical areas directly related to broadcasting.
I believe these recommendations reinforce the argument that I have been trying to advance, that one department should have the technical and professional men needed to carry out these requirements for all departments, including those associated with the acquisition of land for all departments. I am sure if the Department of Public Works had the authority and responsibility of acquiring land it could specialize in this field and act in such a way as to protect the public from unnecessary expenditures. The question of rentals and other facilities is again a specialist field. I am sure that if the department took on the responsibility for all leasing we would receive much better service.
e (10:00 p.m.)
One very interesting recommendation of the Glassco commission concerns the elimination of Crown Assets Disposal Corporation. If a department such as public works is in charge of the procurement and purchase of all material needed in structures occupied by the government, it is logical that the department should also be in a position to dispose of any surplus equipment owned by the government of Canada. We could save the Canadian taxpayer many thousands of dollars by eliminating Crown Assets Disposal Corporation.
The final recommendation of the Glassco royal commission was that the Department of Public Works be made responsible for the planning and supervision of all construction required by civil departments and agencies and the employment of all professional, technical and supporting staffs needed for such purposes; that it be responsible for the planning and supervision of construction for the Department of National Defence of all classes of property other than those at present provided for through the planning and construction staffs of the armed forces. We are very
June 29, 1967

anxious to go back into committee at a later date in order to inquire of the minister and his officers exactly how many of these recommendations have been implemented and how many are in the process of being implemented.
In the committee I gave notice that I was interested in hearing from the minister the policy the government has adopted concerning the construction of marinas, or the subsidies and grants that would be made available across this country to those interested in constructing marinas. As everyone knows, more and more people now have extra time on their hands. These people are interested in boating and they are travelling quite a long way in pleasure craft. They need protection as they travel along our coastlines and our larger lakes.
Not very many months ago the minister wrote me a letter stating in general the policy of the department in so far as help in the construction of marinas was concerned. At that time my immediate reaction was that there was a lack of regional approach to such a policy. Any policy concerning marinas applies right across the country. I am sure, Mr. Chairman, you will agree with me that if all policies of the government were applied across the country, without any regional consideration, we would not be rendering a service to the Canadian people.
In certain large metropolitan areas near the water marinas are built and operated at the expense of the boat owners. However, in other regions inhabited by people of limited means who work only 40 or 45 hours a week recreation is necessary, and if these people decide to go boating they need protection and the necessary structures to do so. Therefore I hope the letter which the minister wrote to me reflects a flexible policy which will not deprive many of our Canadians of the right to enjoy marina construction and marina privileges in their areas.
Another policy on which I should like the minister to comment concerns protective walls. This is a policy which no doubt has caused many headaches to the department, but at the same time it has caused large losses to many of our people who own land along the navigable waters. Ten or 15 years ago the government built protective walls in many of these areas, but since those days they have not been repaired or reconditioned. The result has been that the land owned by some of these people is being gradually eroded, and although the department may consider that a protective wall should only be built
Business of the House in an area where the cost would be justified in comparison with the value of the land to be protected, it seems to me we are forgetting that many of these people may not have the necessary income or the possibility of being able to move elsewhere.


Mr, Knowles:: Ten o'clock.


Maurice Rinfret: It being ten o'clock, shall I rise, report progress and ask leave to sit again at the next sitting of the house?


Some hon. Members:: Agreed.
Resolutions considered in committee of supply this day reported and concurred in.
[DOT] (10:10 p.m.)



BUSINESS OF THE HOUSE

Mr. Pickersgill:: Mr. Speaker, with the consent of the house may I say I understand that my hon. friend the house leader, who had to leave us a few minutes ago, has had some discussions with hon. gentlemen opposite and there is a general feeling that it would be desirable tomorrow to sit from eleven o'clock till 2.30, to recess until four o'clock and to sit from four o'clock till six o'clock. If that is the general wish of the house I wonder whether it could be so ordered. I do wish to put it in the form of a motion which I now hand to Your Honour.


Mr. Deputy Speaker:: 
Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: It is so ordered.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Thomas Speakman Barnett: Mr. Speaker, on June 19 I asked a question of the
June 29, 1967
2138	COMMONS
Proceedings on Adjournment Motion Minister of Fisheries that Your Honour suggested was not acceptable in the period before the orders of the day, and pointed out that if I considered it to be a matter of urgency I might give notice to raise it at this particular time in the day's sitting. June 19 is ten days ago now, and my question involved the chartering of a boat by the Fisheries Research Board.
I based my question on a communication that I received from the Vancouver island organizer of the United Fishermen and Allied Workers Union in which he intimated that he understood that the motor vessel Ocean Traveller was to leave Victoria on June 19, the day I raised the question, under charter to the Fisheries Research Board. The communication stated that this vessel had been strikebound since March 17, and, so that I could advise the union, I asked whether it was government policy to charter strikebound vessels.
I noted after I asked my question that I was some way down the list, and I thought that the Ocean Traveller might be half way to Japan by the time I had the chance to raise the question, if, in fact, the charter had been made by that body. So my question was, in part, to confirm or otherwise whether or not the Department of Fisheries, through the Fisheries Research Board, was responsible for this charter.
Therefore I asked the minister whether the Fisheries Research Board has under charter a motor vessel called Ocean Traveller and, if so, whether it has put to sea despite the fact that according to the United Fishermen and Allied Workers Union it has been strikebound since March 17.
If the charter was arranged as alleged, I should like to point out, Mr. Speaker, that I have been given to understand that it and a number of other vessels were involved in a dispute in which the United Fishermen and Allied Workers Union was concerned in the Victoria area. According to the information that was given to me, the owners of some 29 vessels had signed an agreement and made an arrangement with the union in respect of their employees since the dispute was commenced, which I assume to have been March 17; that the vessel, with the blessing of the union, had gone to sea, but that this particular vessel was not among those which were involved in any settlement with the union. The question therefore arises whether the government has been involved in the chartering of a strikebound vessel.


I have listened to many discussions in the house in which spokesmen of Liberal administrations indicated that it was their government's desire to maintain a position of meticulous neutrality in various kinds of disputes. I also wish to draw to the attention of the house that relationships in the fishing industry between employers and fishermen, and various companies and business interests, have been in a sorry state for some time and that little has been done to resolve the matter except for the perennial amending legislation to the Combines Investigation Act which provides a sort of umbrella under which investigations can be conducted.
I remind the house that under the publication date of November, 1964, we made available to the house, with some fanfare at the time, a small review of information relating to the problems of wage and price disputes in the British Columbia fishing industry. The publication was prepared by a federal-provincial committee on wage and price disputes in the British Columbia fishing industry.
Some of us assumed at that time that this publication heralded some positive formulation of policy which we hoped would bring order to the matters that were involved in the negotiations between the employing and working interests of the fishing industry of British Columbia. So far as I know, since the publication of this report no positive steps have been taken by the federal or provincial governments. That being so, I suggest that the federal government, considering the lack of action which has been taken to clarify the jurisdictional and other matters involved-


Mr. Deputy Speaker:: Order, please. I must inform the hon. member that the time allotted to him has expired.


John Whitney Pickersgill: Mr. Speaker, in the absence of the Minister of Fisheries it falls upon me to reply to the hon. gentleman, in my exalted capacity as acting minister. I am afraid I cannot go into any of the larger questions the hon. gentleman appended to his original question, because I am not sufficiently well informed to do so.
I am informed by the Department of Fisheries that the Ocean Traveller is under charter to the Fisheries Research Board. It is to do research on shrimp. This operation is in no way connected with the issues of the present strike. Tenders were called before the
June 29, 1967	COMMONS
vessel was strikebound and the Ocean Traveller submitted the lowest bid and was accepted. There is no question of catching or selling fish; it is purely a research operation.



TRANSPORT-INCREASE IN FERRY RATES, NEW BRUNSWICK-PRINCE EDWARD ISLAND

['The answer to the question, Mr. Speaker, is that the Canadian ambassador in South Africa did receive such an invitation from the South African government on March 1, but no formal reply has as yet been given to it.\nMotion agreed to and the house adjourned at 10.35 p.m.\n[The following items were passed In Committee of Supply this day:]']
David Samuel Horne MacDonald: Mr. Speaker, I see that the Minister of Transport is playing a double header tonight. Though he said he had been raised to the exalted position of acting Minister of Fisheries, in the answer he gave just now, I hope that he will listen to me in his capacity as Minister of Transport, because it is in that capacity that I wish to direct to him a question, the answer to which I have been attempting to obtain on every day of this week, beginning with Monday.
[DOT] (10:20 p.m.)
The headline on the editorial page of the Charlottetown Patriot last Saturday read: "Pickersgill Pickles Probe and Raises Ferry Fares." It is not hard to understand why the Minister of Transport should have issued his press release at a time when there was little opportunity to comment. I am not sure precisely when this press release was issued, but it seems it went out surreptitiously on Friday afternoon. In the course of this release he announced that a proposal which has been under consideration for some time will be followed through, and that there would be a substantial increase in ferry rates.
The minister himself did not think it was substantial. In answer to a question of mine yesterday he referred to it as being a very modest increase. Surely an increase of 33J per cent, from $3 to $4 for a visitor and auto, is not an inconsequential one to those who from time to time use this ferry system as the only means by which they can transport themselves and their vehicles between Prince Edward Island and the mainland.
The minister has on more than one occasion referred to this contemplated increase as a modest one. He is right, in one sense, because if we compare the amount which will be gained from this increase in revenue with the amount of the subsidy which is paid annually to provide the service I doubt whether in the coming year it will amount to as much as 2 per cent.
It is difficult to understand why the minister has taken this action, particularly when it follows only a few days after another action involving a further delay in the construction of the Northumberland strait crossing. If the
DEBATES	2139
Proceedings on Adjournment Motion people of Prince Edward Island ever felt that a government in Ottawa fails to consider their needs and the many problems which face them, particularly with regard to transportation, surely in the past few weeks they have been strengthened in reaching such a conclusion. I think there is a question in the minds of many as to whether, when the government commits itself to one method of acting, it will follow through with its undertakings.
From time to time during the past year we have heard affirmations from the minister that a commission headed by Mr. Henry J. Darling would meet with all those affected by any possible increase in ferry rates. In May of last year, in answer to the junior member for Queens (Mr. Macquarrie), he told us there would be a meeting of the commission to hear protests of this kind. Even as recently as April of this year, asked whether it was the intention of the government that hearings be held by the Canadian Maritime Commission into the rates charged on the ferry service, the answer was, yes.
In the light of these affirmative answers it is difficult to understand why the government would unilaterally, apparently without even notifying the provincial government, adopt a stance which at the very least shows a degree of insensitivity to the difficulties faced by Prince Edward Island in keeping a continuous link with the mainland.
Last year in the house I said there might be some sensible way in which a change could be made. The minister has provided, in this contemplated revision, that books of ten tickets would be made available to those using them within a two month period. It is true this would lower the cost to active shippers. But I am just as much concerned about those who travel less often, perhaps to visit family and friends in the same way as many of us drive from town to country and from country to town. If these books of ten tickets were valid for one year, the arrangement might have been agreeable and acceptable to those concerned.
Another possibility which might bring in just as much revenue as that which is now contemplated is an increase in fares on a temporary basis covering the active tourist season. When tourists have occasion to use the ferry only once or twice during the course of the year they probably would not mind paying an additional dollar or so, but to Prince Edward Islanders and maritimers generally this increased burden of 33J per
June 29, 1967
2140	COMMONS
Proceedings on Adjournment Motion cent, without any opportunity for a close examination of it by those critically affected, seems to be most unwarranted and most unfair.


John Whitney Pickersgill: Mr. Speaker, the hon. gentleman made two points. One was that it had been the intention at one time to have an inquiry before any change was made. Two circumstances altered the view of the government, and my view as minister, about that. No representations were ever made to the government in any earlier period about there being any hardship through increasing the rates on ordinary motorcars for casual and occasional crossings. Considering the price of everything these days I do not think that a nine mile trip on a boat at $2 is very excessive. In fact I do not think the Prince Edward Islanders would like it to be represented that even they could not afford that for casual and occasional trips.
What we were concerned about, and properly concerned about, was the question of people who used these ferries commercially. We came to the conclusion that we had found a method that ought to be tried out before there would be much sense in having an inquiry into it, and that method, of course, involves no increase for anyone who makes ten trips in a two month period.
I also indicated in my statement the other day, and I do not think it is necessary to repeat it at this time and put it on the record again, that if there were cases of hardship, for instance of farmers delivering their own products where they would not be covered by this ten ticket arrangement, we would take a very sympathetic look at them; and we intend to do that. So far as the increase on casual, occasional crossings of an extra $1 on the round trip is concerned, I think it is still the cheapest trip on a boat anywhere in the world today, certainly anywhere in the western world.
A week has gone by and the hon. gentleman, as a good and assiduous representative of his riding, has done his best to keep this question alive. But the fact is that up to the last time I checked I had not received one word of protest from anyone in Prince Edward Island to suggest that my assessment of the situation, which is naturally the assessment of the government also, is far out. I think the hon. gentleman should be given full marks for trying.
Perhaps the hon. gentleman should devote himself to larger questions, and I would remind him that in the supplementary estimates


brought down yesterday there is another $21 million to be used to build all-weather roads in Prince Edward Island. I think that any little inconvenience from this ferry rate increase will be far more than offset by that good news of yesterday, added to the additional service that is to be provided for the summer months of this year.



Mr. Howard Johnston (Okanagan-Revel-stoke):: Mr. Speaker, my question arises out of an article in the January-February-March Report on World Affairs, issued under the authority of the general council of the Commonwealth Parliamentary Association. In that report I came on the following paragraph, referring to South-West Africa and South Africa:
Another move in the diplomatic offensive by South Africa to project a favourable picture of South-West Africa to the world was the invitation extended by the foreign minister, Dr. H. Muller, to ambassadors of all countries represented in South Africa to visit the booming territory and "see for themselves". Dr. Muller said that the government's attitude was that there was no aspect of South Africa's policy, either in the republic or in South-West Africa, that it need hide.
There was another paragraph which read:
Meanwhile in February the South African government had invited the diplomatic missions in Pretoria to visit South-West Africa to see for themselves what was being done for the indigenous inhabitants. By the end of March none of the diplomats had accepted the invitation, largely because they feared that such a visit might be construed as recognition of South Africa's right of jurisdiction over the territory.
[DOT] (10:30 p.m.)
It might be suggested that the only possible visit to that area should be under the auspices of the United Nations. This, however, is not likely to happen because a mission from the United Nations went to South-West Africa in 1962. On invitation of the South African government the chairman and vice chairman of the special committee for South-West Africa, Mr. Victoria Carpio and Dr. Martinez de Alva, went to South-West Africa and, after a ten day visit issued a joint communique with the South African government in May 1962. This communique stated that they had found neither evidence of genocide in South-West Africa nor of militarization of the territory in violation of the terms of the mandate, and that there was no threat to international peace and security arising from South Africa's administration of the territory.
June 29, 1967	COMMONS
This report was immediately objected to by the United Nations and the two delegates were repudiated by that organization and by their own countries. So the United Nations carried on with the program, with which they seemed determined to proceed. The Canadian government in the most recent votes, admittedly, has abstained. They have not, however, opposed a policy which is totally unrealistic and one which involves a danger to world peace and security. South-West Africa has therefore been turned over to the mercies of the United Nations. Recent events have shown us the inadequacy of the United Nations to even maintain a peace keeping force in a troubled area. Where it will obtain the strength and power to undertake the task it is setting for itself is something I do not know.
I believe the Canadian government and the Department of External Affairs should be seriously concerned about the policy that is being set by the United Nations. The only question was whether the invitation had been received and, if so, whether it had been de-
DEBATES	2141
Proceedings on Adjournment Motion dined, because it would seem to me that a visit by the Canadian representative would serve several useful purposes. It would either corroborate or deny the earlier report of the United Nations representatives who went to South-West Africa. It would also provide the Canadian government with a better source of information for any future action at the United Nations.


Mr. Gerard Pelletier (Parliamentary Secretary to Secretary of State for External Affairs):: The answer to the question, Mr. Speaker, is that the Canadian ambassador in South Africa did receive such an invitation from the South African government on March 1, but no formal reply has as yet been given to it.
Motion agreed to and the house adjourned at 10.35 p.m.
[The following items were passed In Committee of Supply this day:]


[Stage Direction]
Friday, June 30, 1967