1967-09-29

FOOD AND DRUGS ACT


Mr. Barry Mather (New Westminster) moved: for leave to introduce Bill No. C-154, to amend the Food and Drugs Act.


Some hon. Members:: Explain.


Barry Mather: Mr. Speaker, the purpose of this bill is to extend the Food and Drugs Act provisions which protect the consumer in the fields of food, drugs and cosmetic products against misleading advertising, so that in future the consumers of tobacco products will also have that protection.
Motion agreed to and bill read the first time.
[DOT] (11:10 a.m.)



PRIVILEGE


Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I rise on a question of privilege today to say to the house that I hope in my ten and a half years as a member I may have made some responsible contribution to the annals of this historic parliamentary institution. I should like to thank every member in every part of the house for their co-operation and for the friendly associations I have had during this time.
I wish also, Mr. Speaker, to express my gratitude for the co-operation of departmental officials and of every staff member of the House of Commons, as well as recognizing the co-operation of members of the press gallery. Last but not least, Mr. Speaker, I wish to thank you for the tolerance and patience as well as the courtesies you have extended to me.
May I hope for future blessings on this great country and on all those who work with pride and dedication for its future. And now, Mr. Speaker, I bid you all au revoir.


Some hon. Members:: Hear, hear.


Hon. Paul Marlin (Secretary of Stale for External Affairs):: Mr. Speaker, I should like to say to the hon. gentleman that I do not rise to wish him well in the reasons that cause him to leave this house, but I do wish to say to him that we have appreciated the way in which he has conducted himself as an individual in this house. We wish him good health and prosperity in all those things dear to him except his treasured ambitions in political life.


Eric Alfred Winkler: Mr. Speaker, I have just one friendly world in reply. The good services of my future office will be available to the minister as well as to everyone else.


Some hon. Members:: Hear, hear.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question which I should like to direct to the Secretary of State for External Affairs. Perhaps the minister has noted the question I put to the right hon. Prime Minister yesterday. At that time the Prime Minister said the Secretary of State for External Affairs would reply this morning, and I am wondering whether the minister would care to do so now.


Paul Joseph James Martin: Mr. Speaker, I have not seen the question, because I returned very late. Would my hon. friend repeat it?


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, if I may I should now like to put the question to the minister. In the speech the Secretary of State for External Affairs delivered at the United Nations last Wednesday he urged a cessation in the bombing of North Viet Nam and declared that "there is no hope for progress toward a peaceful settlement in appeals or proposals which place the total burden on one side only."
I should like to ask the Secretary of State for External Affairs whether the government is planning to follow up this statement with
2646	COMMONS
Inquiries of the Ministry negotiations or discussions with the other parties involved, which negotiations or discussions are designed to bring about an improvement in this most dangerous situation. In particular I should like to know whether any new overtures are being planned to the authorities at Hanoi or their allies to end the flow of troops and war materials from North Viet Nam to South Viet Nam should the bombing cease.


Paul Joseph James Martin: Mr. Speaker, the Canadian government urged that there be a stop in the bombing because at the present time it is of the view that this is the only way to test the willingness of North Viet Nam to enter into negotiations and consultations with other countries in an effort to bring about an accommodation. This was the policy that was pursued before we publicly asked for a stop in the bombing, and this will continue to be the government's policy.
I should add that, as the house already has been informed, the Prime Minister responded positively to an invitation put forward by the president of the world federation of the United Nations associations for a meeting at Geneva of the two co-chairman countries, Britain and the Soviet union, together with the commission powers, Canada, Poland and India. We have passed on to the other invitees the reaction of the Canadian government to this invitation.


Wallace Bickford (Wally) Nesbitt: I have a supplementary question. In view of the fact that some hon. members, myself included, still find the minister's answer a little equivocal and bearing in mind that the minister said that appeals to one side alone are not sufficient, is the minister suggesting that he is appealing to the United States to stop the bombing of North Viet Nam without any concession by the other side, in other words without any halt to the flow of troops and war materials from North Viet Nam to South Viet Nam?


Paul Joseph James Martin: The answer to that is yes, and there was nothing equivocal in the first response.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I should like to congratulate the Secretary of State for External Affairs for his adoption of a policy this party has put forward before. Is he now able to tell us whether, on the basis of our contacts with the regime in Hanoi, there is any reason to believe that a cessation of the bombing might in fact lead to negotiations?

DEBATES	September 29, 1967


Paul Joseph James Martin: In the declaration I made at the United Nations I was not enunciating new Canadian policy, but, for what I believe to be sound reasons this was the first time that policy had been stated in that particular way in public. Having regard to the immediate question, we consider that an end to the bombing must be regarded in the present circumstances as the key to the solution, or a starting point in the process of solving this regrettable situation in Viet Nam. Hanoi has said that only after the bombing has been stopped would it be in a position to indicate what would follow. It seems to us that the only way to test North Vietnamese willingness to enter into negotiations is to stop the bombing.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, in view of the minister's reply to the hon. member for Greenwood, can the minister indicate how long he thinks we should have to wait for a reply from Hanoi should the bombing stop?


Paul Joseph James Martin: I am sure my friend recognizes the limitations of that question.


Hon. Marcel Lambert (Edmonton West):: have a supplementary question. A report has been made that the minister had a discussion with Secretary of State Rusk prior to his speech at the United Nations, in which he may have informed him of the general tenor of his remarks. Is the minister in a position to confirm this, and can he assist the house by indicating what may have been the reaction of Dean Rusk?


Paul Joseph James Martin: On September 7 I met with Mr. Rusk in Washington and once again stated the position of the Canadian government on this question, particularly with regard to the question of bombing. On the same day in New York I also discussed the matter with his ambassador, Mr. Goldberg. I did not on that occasion indicate the position we would take in the United Nations, but both the Secretary of State Rusk and Mr. Goldberg were advised before I spoke of the course the Canadian government proposed to take.
I have no indication as to what the official reaction is, but there have been wide indications from all over that this seems to have been the correct step and perhaps well timed at this particular period.


Mr. David Lewis (York South):: Mr. Speaker, I have a supplementary question arising out of a question addressed yesterday
September 29, 1967

to the Prime Minister. The Secretary of State for External Affairs may not have had an opportunity to read yesterday's Hansard. My question relates to the visit of three North Vietnamese students to Canada. The right hon. Prime Minister said yesterday that subject to further examination he thought the government did receive a query about this visit from the United States.
In view of the fact that reports today indicate that the United States authorities deny having made any such inquiry, could the Secretary of State for External Affairs clarify the situation, since these United States authorities claim that the Canadian government took the initiative of informing them about the visit rather than the other way around?


Paul Joseph James Martin: Mr. Speaker, it is true that the Canadian government took the initiative. We informed the government of the United States of the decision.


David Lewis: A supplementary question, Mr. Speaker. May I respectfully ask the minister why it was necessary for a sovereign country like Canada to inform United States authorities of the fact that we were admitting in the normal way, on normal visas and passports, three visitors from a country with which we have that kind of exchange? Was there any reason for the United States authorities being informed and for this explanation being given?


Paul Joseph James Martin: Mr. Speaker, I think the circumstances involved in this matter, which include the deep involvement in Viet Nam of the United States, a close friend of Canada, warrant the view that one conducts a successful foreign policy by observing the courtesies that one would expect from a friend.


Some hon. Members:: Hear, hear.


Mr. Real Caouelie (Villeneuve):: Mr. Speaker, I wish to put a supplementary question to the Secretary of State for External Affairs.
The minister pleased many Canadians, I would even say the majority of Canadians, when he made his statement to the United Nations that bombings should cease first. Did he have any reactions from the American authorities in the attitude taken by the minister on behalf of the Canadian government, on behalf of all Canada? If he has had some reactions, what were they?
Inquiries of the Ministry


Mr. Marlin (Essex Easl):: Mr. Speaker, I wonder if I understood correctly the hon. member's question. Did he ask me whether I had reactions from Canadians or from other countries?


David Réal Caouette: From the American government.


Murdo William Martin: Mr. Speaker, we have not yet had any official reaction from the government of the United States, but at the United Nations, I had reactions from other members of the organization. And as I just told the hon. member for Edmonton West (Mr. Lambert), I have given notice through our ambassador in New York of our intention to ask that bombings should cease.


[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-sloke):: Mr. Speaker, I am sure that by now the Secretary of State for External Affairs appreciates that he has been welcomed back to the house after his absence. My question also is for him. Will the Canadian position on Rhodesian sanctions be reviewed in the light of the call from three African states to end United Kingdom curbs against Rhodesian trade?


Paul Joseph James Martin: Mr. Speaker, I said in my statement on Wednesday at the United Nations that Canada had fully complied with the security council directives with regard to sanctions against Rhodesia, that we were awaiting the report of the secretary general as to the effectiveness of these sanctions, and that if they were not satisfactory we would be among those who would urge further sanctions to bring an end to the regime in Rhodesia.


Mr.   Johnslon@: A supplementary question, Mr. Speaker. In relation to the commonwealth meeting rather than to the United Nations, what new measures will Canada suggest to the seven nation committee, which includes Canada, already set up to consider new measures against Rhodesia?


Murdo William Martin: Mr. Speaker, this matter was discussed the other day in the sanctions committee in London. I would prefer to wait until we have the report before giving an indication of what further sanctions might be employed.
September 29, 1967

Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Francis Andrew Brewin: Mr. Speaker, my question is for the Secretary of State for External Affairs. I regret that I have not given him notice of it and if he prefers to take it as notice I will be quite happy.
The question is as follows. Will the Canadian government join the Council of Europe and certain European NATO countries, among which I believe are Denmark and Norway, in making a protest to the government of Greece against certain breaches of human rights and the suppression of political freedoms in that country?


Paul Joseph James Martin: Mr. Speaker, the Canadian government has had the opportunity on a number of occasions to discuss this matter with representatives of the government of Greece. We share the view that the restoration of parliamentary freedom in that or in any other country is a desirable objective which has received and will continue to receive Canadian support.



FINANCE


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, my question is addressed to the Secretary of States for External Affairs, since he is leading the government today. I will put to him this question. Would the government give earnest consideration to the referral of the Carter commission report on taxation to a joint committee of the Senate and the House of Commons prior to the formulation and publication of the white paper? This is in accordance with the decision by the Minister of Finance to defer the submission of briefs.
I make an urgent plea to the minister to take this under consideration, and perhaps when the Minister of Finance comes back next week they will be in a position to answer that point.


Paul Joseph James Martin: Mr. Speaker, I should like to take this question as notice.
[Mr. Martin (Essex East) .1



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: should like to put a question to the Minister of Justice. In view of the fact that there are a number of judicial vacancies in the Alberta courts, will appointments be made in the very near future?


Hon.   P.-E. Trudeau@Minister of Justice: Mr. Speaker, the vacancies exist in the sense that the Alberta legislature created them, but as the hon. member knows I am not in a position to recommend that they be filled until this house adopts amendments to the Judges Act. I hope this will be done as soon as possible, in this session if we can find time.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: have a question for the minister of forestry. In answer to a question of mine the other day, as shown on page 2550 of Hansard, the Prime Minister promised to discuss with the minister the desirability of extending the feed grain freight assistance program to the southwestern Ontario feed grain producers, particularly the corn producers, to assist them during the present depressed conditions of the grain corn market. I should like to ask the minister whether this discussion has taken place, and can the corn growers look forward to some measure of assistance through the good offices of the Canadian livestock feed grain board?


Hon. Maurice Sauve (Minisfer of Forestry and Rural Development):: Mr. Speaker, some weeks ago this problem was raised with the Canadian Livestock Feed Board administration and I understand that yesterday they had a meeting with Mr. Standing, the secretary of the Ontario winter wheat marketing board. As soon as any decisions are taken I will inform the hon. member through the normal channels.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Warren Allmand (Nofre-Dame-de-Grace):: Mr. Speaker, I have a question for
September 29, 1967	COMMONS
the Prime Minister of which I gave him notice, but since he is not here I will put it to the Acting Prime Minister.
I should like to ask the Acting Prime Minister whether Mr. David DePoe was carrying out his functions for the Company of Young Canadians this week in Montreal when he criticized the administration of McGill University?


Mr. Speaker:: Orders of the day.



EMERGENCY GOLD MINING ASSISTANCE ACT


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Emergency Gold Mining Assistance Act to extend its application to the years 1968, 1969 and 1970.
Motion agreed to and the house went into committee, Mr. Batten in the chair.
[DOT] (11:30 a.m.)


Howard Earl Johnston: I rise on a point of order, Mr. Chairman. The committee is being asked to consider a resolution that extends the application of gold mining legislation for the next three years into the future without the presence in the committee of the Minister of Finance, who has been attending a most important conference in which the whole subject of the world gold market arose. Just this morning there was the headline-


The Chairman:: Order. I suggest to the hon. member that if he wishes to proceed he should state his point of order now.


Howard Earl Johnston: My point of order is that this resolution should be delayed until such time as the Minister of Finance returns to the house to give a statement.


Herman Maxwell Batten: The hon. member has no point of order.


Jean-Luc Pepin: Mr. Chairman, since 1948 the federal government has been giving assistance to the operators of gold mines considered uneconomical under the Emergency Gold Mining Assistance Act.
The legislation, passed in 1948, has been renewed several times since, in 1951, 1952, 1953, 1955, 1956, 1958, 1960, the last amendment dates back to 1963 when the act was
DEBATES	2649
Emergency Gold Mining Assistance Act extended for a period of four years, that is until December 31, 1967. Therefore, it is urgent to introduce today a new amendment.
Last year, during the winter, and quite recently, the government undertook to review the situation in order to know whether the legislation which we are dealing with today was still necessary, in what terms, at what price and at what level of subsidy.
The representations made by the gold producers, by mining associations and delegations from the mining municipalities concerned, in Quebec and Ontario in particular, have been of great assistance to us in carrying out that review, and we wish to thank the groups that came forward.

Excitement and romanticism have been associated with the early development in Canada of the gold mining industry. In the last century placer gold was found in the Cariboo district of British Columbia and in the Klondike in the Yukon. I was in the Yukon recently to visit the latest mining development and spent some time in and around Dawson City, where my grandfather lived at the time of the rush and where he died some 20 years after. It is unbelievable that gold should still be extracted from these same sands.
In the early part of this century, Mr. Chairman, lode gold-that is gold found in hard rock-was discovered and developed at Kirkland Lake, Timmins, Val d'Or, Malartic, Red Lake, Yellowknife and other places. The gold mining industry was a pioneer in the development of much of Canada's north. It became a major element in our mining industry, and gold had the greatest value of any metal mined in Canada for three decades following 1920. The year 1941 was the year of greatest production. In that year the industry produced about 5.3 million ounces, worth about $206 million. At that time the total value of mineral production in Canada was about $560 million; so $206 million for gold alone out of just over half a billion, gives a good indication of the importance of gold mining in those years.
Following world war II, however, the rate of expansion of the whole mineral industry in Canada increased, slowly at first but then more and more rapidly. By 1966 the mineral industry had become a giant in this country, with a total production of slightly over $4 billion. Unfortunately gold mining did not participate in the post-war expansion to the
September 29, 1967
2650	COMMONS
Emergency Gold Mining Assistance Act same degree as did other parts of the industry. The main reason for this is the simple fact that cost of labour and supplies increased while the selling price of gold remained fixed.
I understand that my hon. friend the hon. member for Villeneuve will probably have something to say about the "stability" of the price of gold.
Furthermore, Mr. Chairman, few new discoveries were made, and gold mines were forced to rely mainly on known ore zones and their possible extension for their production.
It should be added here that the industry undertook to increase its efficiency by the use of improved mining equipment and methods. The effort achieved a marked degree of success. For a few years total output of gold in Canada increased. It reached a post-war high in 1960 when a total of about 4.6 million ounces was produced having a value of about $157 million. However, the improvement in efficiency has not prevented many gold mines from closing in the last few years due to depletion of ore reserves through exhaustion, and again due to increasing costs.
I have in my hand, Mr. Chairman, a table which illustrates the decline which has taken place recently in the gold mining industry. The statistics I have refer to lode gold mines only. As an aside I might say that lode gold mines bring out the gold found in hard rock. A small quantity of gold is still recovered in Canada from placer deposits in the beds of streams and rivers, a type of operation almost entirely confined to British Columbia and the Yukon. As a third source gold is also produced as a byproduct from some base metal mines. The subsidy is not paid in that case.
With the permission of the committee I will table this chart which indicates the situation as it exists now, and I will comment on it in a moment.


Herman Maxwell Batten: I should point out to the
minister that it is impossible for him to table a document in committee; he will have to read it into his statement.


Jean-Luc Pepin: I am sorry, Mr. Chairman; I wish it simply to be printed in Hansard.


Herman Maxwell Batten: The minister will be able to do this later on in the day when the house is in regular session.


Mr. Monteith:: I think he may have permission to include it in Hansard, Mr. Chairman.


Herman Maxwell Batten: I am sorry, I misunderstood. The minister is not permitted to table documents in committee, but may have documents included in his remarks in Hansard.


Mr. Aiken:: Mr. Chairman, May I ask the minister the source of the document?


Jean-Luc Pepin: They are the usual good statistics of my department.


Mr. Nielsen:: I wonder whether the minister back to back with the lode mining statistics would also request permission to print the placer mining statistics.


Jean-Luc Pepin: I will have those in due course in this debate.


Herman Maxwell Batten: Is it agreed that these statistics be included in Hansard?


Some hon. Members:: Agreed.
[Editor's note: The table referred to above is as follows;]



LODE GOLD MINES

[Stage Direction]
Number of Mines in	Number of Men	Ounces	Number of Ounces Produced fromOperation Employed	Produced	All Sources1948	87	22,566	3,081,113	3,529,6081950	83	22,491	3,764,757	4,441,2271955	61	18,032	3,866,124	4,541,9621960	55	16,542	3,930,366	4,628,9111965	55	12,520 (est.) 2,958,874	3,606,0311967	40	10,500 (est.) -	-
Jean-Luc Pepin: Mr. Chairman, the figures which appear in Hansard give on the left side the number of lode gold mines we have in Canada. For example, in 1948 we had 87. This number dropped to 83 in 1950, to 61 in 1955, to 55 in 1960, stayed there in 1965, and to 40 in 1967. The number of men employed in 1948-this is a very important statistic-was 22,566. In 1950 the number was 22,400; in 1955, 18,000; in 1960, 16,500; in 1965, 12,500, and the figure estimated for 1967 is 10,500. Hon. members will thus realize that the number of mines is diminishing, and consequently so is the number of men employed in the mines, the number now being half what it was in 1948.
[DOT] (11:40 a.m.)
The number of ounces produced has not been declining as fast, indicating greater efficiency in the industry. The figures are as follows: in 1947, about 3 million ounces; in 1950, 3.7 million; in 1955, 3.8 million; in 1960, 3.9 million; in 1965, 2.9 million. I also have figures showing the number of ounces produced from all sources including placer mines and gold found in base metals.


Murdo William Martin: Would the minister permit a question? Did he say that in 1942 there were 87 gold mines?
September 29, 1967	COMMONS


Jean-Luc Pepin: In 1948.


Murdo William Martin: The report of the administration of the Emergency Gold Mine Assistance Act for the fiscal year ending March 31, 1966 says on page 11 in table 1 that in 1948 there were 117 gold mines receiving assistance under the act. I am of the opinion that the minister was referring to lode mines rather than to the total of lode and placer mines.


Jean-Luc Pepin: I thought I had made it clear that I was talking only about lode gold mines. If one includes the placer mines and the base metal mines the figure of 117 is accurate.

At this stage, Mr. Chairman, I may add right away that gold production remains an important element of our mining industry. It has had its set-backs, it now has problems, but it is not moribund. In 1966, about 3.3 million ounces of gold were produced in Canada, that is a value of $125 million. Gold ranks fifth for value in the list of metals produced in Canada in 1966.
Outside of the U.S.S.R., whose production is not known, Canada ranks second amongst gold producers in the world, immediately after the Union of South Africa-although a good deal behind-since it produces some 30 million ounces.

I should like to say a few words now about gold mining communities. There is an old saying that "gold is where you find it." It was found in many out of the way places in Canada-at least they were remote at the time of the discovery and development of the gold mines. The pioneering role of the mining prospectors and operators was shared by those who came to work in the mines and to provide the services needed in any community. Schools, churches and hospitals were built, as well as homes and business premises; water and power systems were installed, and streets and roads constructed.
There are 20 communities in Canada whose economic support is derived almost entirely from the operation of gold mines. We have estimated that in 1966 the population of these communities exceeded 80,000. This social factor represents, of course, the major cause for the present legislation, as it did for the legislation introduced a few months ago in connection with the Cape Breton coal mines. Improvements in methods and systems of transportation have linked the mining communities with major centres by rail, road and 27053-1681
DEBATES	2651
Emergency Gold Mining Assistance Act air. But though they may now be more easily accessible, they remain detached from the heavily populated areas of Canada and are still dependent on the resources of their immediate areas.
The discovery and development in recent years of deposits of base metals and industrial minerals has added some economic support to the mining communities of Timmins, Kirkland Lake, Val d'Or and Malartic. Everyone here has heard about the Texas Gulf Sulphur zinc-copper mine at Timmins, the Jones and Laughlin iron ore mine at Kirkland Lake and the pulp mill of Domtar Limited situated about 100 miles north of Val d'Or. The gold mining communities have made efforts to attract other industries. The federal Department of Industry has provided financial incentives to new manufacturing and processing industries in designated areas under its area development program. Some success has been achieved through these efforts.
Notwithstanding some diversification of the base, the gold mining communities continue to be dependent mainly on the economic support provided by the operating gold mines. As the gold mines have reduced the scale of their operations or have ceased production, former employees have faced the problem of finding new jobs. The federal Department of Manpower and Immigration has assisted in placing workers in suitable jobs through the Canada manpower centres. Workers are retrained where necessary. They are also given assistance to move to other areas under the manpower mobility program.
Everybody understands that moving is a difficult operation in the case of people who have grown up in certain areas and who are very much sentimentally attached to those areas, and sympathizes with those who have do do so. Governments try to cushion the shock.
Perhaps I should say something now about the role of the Emergency Gold Mining Assistance Act. The act was passed in 1948, at which time a large number of gold mines were faced with operating losses because of increasing costs of production. The operators were, of course, unable to increase the selling price of their product.
Without assistance the mines would have been forced to close. Extensive economic and social dislocations would have followed the abrupt closure of so many mines. The purpose of the legislation was to extend the life of the gold mines and thereby allow their dependent communities to adjust gradually to
September 29, 1967
2652	COMMONS
Emergency Gold Mining Assistance Act diminishing economic support. May I emphasize that the purpose of the legislation is not to increase the number of gold mines in Canada, but to permit a slow decline with a view to protecting the communities rather than the operators of these mines.
It is well known that the price paid for gold by the Royal Canadian Mint is governed by the price paid by the United States treasury and the exchange rate between the Canadian and United States dollars. The price paid by the United States treasury has been fixed since 1934 at $35 per fine ounce. I should point out that even in the representations which were made to us by the gold mining operators it was not denied that there was no great chance that this price could be increased in the near future. I look across to the hon. member for Villeneuve because I want him to get the point well. Even the people who made representations to us agree that there is no justified hope of this price changing. The hon. member for Villeneuve, who has grandiose ideas about the use of money, may well tell us we should raise the price to $100 or even to $150.


David Réal Caouette: Mr. Chairman, would the minister allow a question at this time?
I understand that the price of gold has been set at $35. Is the minister aware that in the United States, subsidies of about $44 per ounce are being paid to gold mines, which represents a total of $79 even though the price is set at $35? Now, what prevents us here in Canada to follow the example of the United States and pay subsidies to gold mines?


Jean-Luc Pepin: There are no doubt several reasons for that. The United States production being probably much lower than the Canadian production, the Americans may be interested in increasing their gold production so as to avoid being entirely dependent on foreign countries in their monetary manipulations if that term is not deemed disparaging.
[DOT] (11:50 a.m.)

Since May of 1962 the value of the Canadian dollar has been set at $0,925 United States funds. At parity the Mint buying price for gold is $37.84 per ounce in Canadian funds. As the market value of the Canadian dollar may be permitted to fluctuate by 1 per cent on either side of parity, the mint buying price in Canadian funds may vary between $37.46 and $38.22 per ounce.


Again, Mr. Chairman, the purpose of the legislation was to extend the life of many of the gold mines and thereby allow their dependent communities to adjust gradually to diminishing economic support. I am going to repeat this on a number of occasions in my speech and throughout the debate, because I do not want anybody to believe that we are looking for an increase in gold production.
The assistance given under the act has successfully retarded the rate of decline of the industry. In this way unemployment and consequent social dislocations in the gold mining communities have been minimized, and so the purpose of the legislation has been achieved to a good extent. As I said a moment ago the number of employees has declined from some 22,000 in 1948 to about 10,000 in 1967, and this has been a progressive, or better, a regulated, rate of decline. Of course it was not accomplished without difficulties and hardship, but in my view the federal government has done its share to prevent greater hardships.


Erik Nielsen: Will the minister inform us whether he and the government have made any representations to the International Monetary Fund, or to the United States, for a revision in the price of gold to $70 or $100?


Jean-Luc Pepin: The hon. member for Yukon is probably better aware than I am that there is a big international debate presently taking place on this subject. He is also aware that the Minister of Finance is in Rio at the moment, and this matter is possibly on the agenda of the conference he is attending. My only contention in this debate is that we cannot count on a rise in the price of gold. The legislation is based on the situation as it exists now, and which is recognized by the gold mining producers themselves as the situation which will probably continue for a good many years to come. Of course if major changes should occur in this field at the international level, there is no doubt that in consequence the government would adjust this legislation.


Erik Nielsen: Can the minister state what his government's position is going to be? Is it going to be for a raising of the price of gold?


Jean-Luc Pepin: I am not the Minister of Finance, and I know I could not be that minister as I am not qualified. I am only dealing with mining legislation and, as I shall say in a moment, social legislation. I am not dealing in monetary policies, and I am quite sure the committee would agree I should not do so.
September 29, 1967
COMMONS DEBATES	2653


Howard Earl Johnston: It seems to me that the question just asked adds some validity to the point of order I raised earlier. I wonder if the minister is aware of the threat on the part of South Africa, announced this morning, that if the price of gold is not raised it will reduce the supply of gold to the western world?


Jean-Luc Pepin: That is a policy for the Union of South Africa to devise. I simply repeat, and I beg the comprehension and sympathy of my hon. friends, that this is a mining policy and is not monetary policy. This is a mining bill, not a monetary bill. If my hon. friends disagree with the position taken by the government in monetary matters I ask them to please raise that matter at the earliest occasion, but not today.


David Réal Caouette: Mr. Chairman, the minister does not think that we should discuss that question. It would have been better to wait for the Minister of Finance and Receiver General (Mr. Sharp) to be here, since we are discussing the matter of gold, and consequently the monetary question.
I understand the idea of the minister to the effect that this is only an extension, or an amendment to the existing act, and that it has nothing to do with the monetary question. However, the minister for half an hour has been mixing together the monetary question and the matter of gold. Now, it seems that we should have waited for the Minister of Finance and Receiver General to be here, and he would have joined the Minister of Energy, Mines and Resources in discussing the renewal of this act which is very important for Canadians as a whole.


Jean-Luc Pepin: Mr. Chairman, this debate on monetary liquidity in the world has been going on for several years. The experts I consulted think that it will go on for some time yet. The legislation under consideration today expires on December 31, 1967 and to protect the communities and the municipalities which are in danger, it will be necessary to intervene immediately and not wait for the results of the international transactions.
I think the hon. member for Villeneuve (Mr. Caouette) would not want to prejudice his electors on that score. And I think that he will co-operate with the minister to ensure the passing of this legislation as quickly as possible so that on December 23, 1967 we will not find ourselves without a legislation.
Emergency Gold Mining Assistance Act [English]


Mr. Kindt:: To clarify and settle the point may I ask the minister if the resolution has any objective other than what is stated, namely to extend the application of the Emergency Gold Mining Assistance Act? Has the minister anything else in mind to slip in as an addition to this amendment? From the way he is talking I would say there is something else.


Jean-Luc Pepin: I was going to say in conclusion that the only purpose of today's debate is to justify the extension of the legislation.


Lawrence Elliott Kindt: To extend it?


Jean-Luc Pepin: For another three years. That is the only purpose of the resolution. I am trying to demonstrate why we have decided to do that, and to show why we decided not to do more, as requested in various representations that we received.


Herman Maxwell Batten: Order. I must interrupt the minister to advise him that the time allotted to him has expired.


Some hon. Members:: Carry on.


Herman Maxwell Batten: Does the committee give unanimous consent for the minister to continue?


Some hon. Members:: Agreed.


Mr. Dinsdale:: It is like a question and answer period.


Jean-Luc Pepin: We may get that over now and not have to do it later.
The cost of maintaining assistance under the act has been appreciable. A total of $231 million has been paid to gold mine operators from 1948 to March 31, 1967. The following table, which I hope to receive permission to have printed in Hansard, taken from the annual report on the administration of the act to March 31, 1967, shows the amounts paid by calendar years, and my hon. friends will realize that this also deals with the question of the number of mines, something which was raised by the hon. member for Timmins.
The number of mines declined from 117 in 1948 to 66 in 1965. This includes all types of mines except, of course, metal base, and the table shows that the assistance paid per year has not varied very substantially. This assistance totalled some $12 million in 1948, $10 million in 1951, $16 million in 1954, $11 million in 1958 and $14 million in 1965. The
September 29, 1967
2654	COMMONS
Emergency Gold Mining Assistance Act number of ounces produced, as has been stated, has been going down.


Murdo William Martin: If I heard the minister correctly he has referred to a table. I do not know where his table comes from, but the details according to the bluebook show the number of mines receiving assistance in 1965 to be 41 whereas the minister has mentioned 65 or 66. Why is there this difference in those figures?
[DOT] (12 noon)


Jean-Luc Pepin: I am sorry; we will try to rectify that. The figure, as I said, is in respect of the number of mines being assisted in 196566. The number of ounces was 3.6 million in

1949, 2.6 million in 1964 and 2.4 million in 1965. Of course, the assistance paid per ounce produced has increased quite substantially. I might mention a few figures: In 1949 it was $13.48, in 1965, $6.11, and in 1966 the estimate is $6.63. So the subsidy per ounce has been going up quite seriously. May I have permission of the house to have the next table printed in Hansard?


The Assistant Deputy Chairman:: Is it
agreed that the minister may have permission to have the table printed in Hansard?


Some hon. Members:: Agreed.
[Editor's note: The table referred to above is as follows:]
Assistance Paid	Ounces Produced	AssistanceDesignated	Number	to the end of	Eligible for	Paid per OunceYear	of Mines	March 1967	Assistance	Produced1948	117	$10,546,315.84	3,164,388.425	$3.331949	122	12,571,546.90	3,613,713.253	3.481950	106	8,993,490.51	3,521.860.254	2.551951	97	10,728,503.71	3,255,244.876	3.301952	86	10,845,978.62	2,889,937.597	3.751953	96	14,680,110.42	3,177,383.745	4.621954	86	16,259,179.23	3,793,783.453	4.291955	72	8,885,478.73	2,992,472.336	2.971956	68	8,667,235.38	2,505,696.226	3.461957	62	9,679,753.32	2,730,271.350	3.551958	67	11,420,463.70	2,660,690.496	4.291959	68	12,001,753.43	2,442,642.876	4.911960	70	12,362,517.59	2,461,386.530	5.021961	68	12,666,658.77	2,389,757.710	5.301962	67	14,355,013.49	2,330,440.182	6.161963	72	14,319,757.65	2,599,266.464	5.511964	69	15,436,154.88	2,647,819.881	5.831965	66	14,826,633.78	2,427,034.066	6.111966*	38	11,777,816.65	1,776,265.143	6.63**
'Represents assistance paid to mines whose 1968 applications were processed prior to March 31, 1967.


Gordon Harvey Aiken: May I ask whether this table is a supplement to the 1966 regular annual report in respect of emergency gold mining assistance? Is it a similar table to that which we find in the 1965 report?


Jean-Luc Pepin: I think so. So the amount of assistance payable for the year 1967 is now estimated at $15 million. What about the future? Should parliament authorize the proposed amendment to the act, it is anticipated that the total assistance paid will decline moderately in future years. To be more specific, during the period 1967 to 1970 it is estimated that six mines with an annual production of about 400,000 ounces of gold will become eligible for assistance whereas 14 mines with an annual production of about one million ounces will close. I might add

that most of the gold produced in 1970 probably will be eligible for assistance. I am giving hon. members all I know about this subject so that I will not be accused of painting too rosy a picture. This is the picture of a declining industry. It is unfortunate, but we must face it.
Increasing costs of production will prevent assistance from declining in direct proportion to the reduction in output of gold caused by the closure of some mines.
I think I will skip the basis on which assistance is given. It is a rather complicated formula. I am quite sure that those who will speak on this subject are aware of it and do not need to have it repeated to them. I might say that when the cost of production is higher than $26.50 there is assistance but when the
September 29, 1967

cost is higher than $45 there is no compensation. This indicates that between a production cost of $26.50 and $45 an increasing subsidy is paid.
What was in the briefs which we have received from the Mining Association of Canada, the communities affected and a few other associations? First of all, these companies have stressed the need for continuation of assistance to gold mines. Second, most, if not all the groups, have requested a change in the formula for determining the assistance payable which would have the effect of increasing the assistance by 50 per cent. I will not go into this in detail because it is a bit complicated.
Third, a term of four years or more for the extension of the act was considered desirable. Fourth, the brief from the gold mining communities requested the addition of a section to the act to provide for assistance for mining exploration within a 60-mile radius of designated mining towns. They would like to have a subvention for exploration in an area 60 miles around the gold mining communities.
In reply to these requests I should like to say first of all that, in respect of the desirability for continuation of this legislation, we obviously agree because this is what we are doing this morning. Withdrawal of assistance at this time would cause 28 of the 37 lode gold mines receiving assistance in 1967 to cease operations within a short time.
Of course, a substantial increase in the price of gold or a decrease in the cost of production could terminate the need for assistance to the gold mining industry, but neither condition appears likely to materialize in the near future.


Lawrence Elliott Kindt: Are you sure of that, Mr. Minister?


Jean-Luc Pepin: I am as sure as one can be in these matters.


Lawrence Elliott Kindt: Can the people of Canada be assured that there will be no tampering with the price of gold which will disturb the value of all other commodities?


Jean-Luc Pepin: I have no vision from heaven on this subject, but this is the position accepted by the economists and officials in my department as well as in other departments and fairly well throughout the scientific and business communities in this country.


Lawrence Elliott Kindt: I was hoping that the minister's statement, while off the cuff, was from heaven and could be taken as such.
DEBATES	2655
Emergency Gold Mining Assistance Act


Jean-Luc Pepin: Thank you. On the question of the period of extension, as I said a term of four years was recommended by the gold mining communities and producers. While rapidly changing circumstances might make it desirable to review the position of the gold mining communities within a three year period, we believe that a three year period will be adequate. We believe a term of three years gives recognition to the problem of gold mine operators in the orderly planning of mining programs and to the need of dependent communities for a further period of adjustment.
The Minister of Finance and myself had already indicated our intentions to extend the duration of the act when we received these representations. There really has been no protest on this three year period.
The recommendation to include a mineral exploration program restricted to the immediate area of the gold mining towns as part of the assistance provided under the act has not been adopted. First, it is really impossible to give any assurance that mineral deposits of any kind will be found in the prescribed areas, no matter how intensive an exploration program might be undertaken. A mine near Kirkland Lake might be discovered five or ten years from now, but it is so uncertain that one cannot base a policy on that.


An hon. Member:: All exploration is uncertain.


Jean-Luc Pepin: I assume that these areas have been thoroughly explored in recent years. I presume also that if I had $5 million for exploration, I would tend to go to areas of Canada which are less known and where the geological survey of Canada had indicated that possibilities existed.
My main point, however, is that exploration is not the purpose of the act. The purpose of the act is not the creation of new mines, neither is it the expansion of existing communities nor the creation of new ones. This is not the purpose of the act. As a matter of fact, in 1963 the act was amended to make it obligatory for a company to recruit more than half of its personnel in the gold mining community in order to be entitled to the subsidies. There clearly is an indication that the legislation is not for exploration or for the development of gold or other mines in Canada.
September 29, 1967

Emergency Gold Mining Assistance Act


Gordon Harvey Aiken: Mr. Chairman, would the minister permit a question at this point? The minister has said that exploration is not the purpose of the act. Is it not, however, a purpose of the act to keep these communities alive? If exploration should turn up additional mines which would help support these communities, would that not be a good objective?


Jean-Luc Pepin: The whole debate is based on the "if" used by the hon. member for Parry Sound-Muskoka. If there were any assurance that gold or any other mineral would be found I presume we would be more receptive to the argument, but the "if" is so colossal that it cannot be legislated upon.


Erik Nielsen: Mr. Chairman, would the minister permit one further question? Surely he is not suggesting that the cost of exploration carried on by operating companies is not calculated in the cost per ounce and therefore is not one of the factors upon which the subsidy is paid.
[DOT] (12:10 p.m.)


Jean-Luc Pepin: I understand that the cost of exploration in the area of existing mines is deductible and can be included in the determination of the cost of production for subsidy purposes. What we are talking about now is exploration within a 60-mile radius of a mine. My hon. friend, with such great mining experience, knows the difficulty involved in deciding when a mine is one mine or two mines. In this case the representations we have received would relate to something outside of the existing mine. He is quite right when he assumes that the cost of exploration at the site of an existing mine can be included in the cost of production.
I should like to add that in Canada, exploration is generally left to the initiative of private enterprise and is not usually paid for by the federal government. When there are encouragements to be given in respect of exploration, these are usually given by the provinces and not by the federal government. I see an intrigued look on the face of one of my hon. friends. The federal government does this indeed in the northern territories where the federal government behaves like a provincial authority.


Mr, Nielsen:: Too bad.


Jean-Luc Pepin: That is another debate. To complete this subject I might say that the Department of Energy, Mines and Resources, and I am always keen to give it publicity,

provides general assistance to mineral exploration in all parts of Canada by the preparation and distribution of geological and geophysical maps of all kinds. This is a federal contribution. If subsidies are needed for exploration, this would normally come under provincial authority.
The main question still remains, why not raise the subsidy, as both briefs suggested, in view of rising costs? A change in the level of assistance which would have any significant effect at this time, any change which would really reverse the present trend in this industry, would be very costly indeed. The government is now assisting the miners in gold mining communities by payments under the act to the gold miners amounting to approximately $1,500 per year for each man employed. This is not a reproach I am making to the miners themselves; it is only a fact that I feel I should mention. We are already providing $1,500 per year per miner in these communities. If we double the cost of the program by raising it to $30 million or $50 million, we are going to create a situation which will in time become the equivalent of the Cape Breton coal mining situation. In a few years the federal minister of the Department of Energy, Mines and Resources would have to bring in another bill in an attempt to do in the gold mining industry what he is trying to do now in the coal mining industry of Cape Breton, and I do not think that is desirable.


Some hon. Members:: Hear, hear.


Jean-Luc Pepin: I think there are other ways to help. My N.D.P. colleagues protest. If we continued this practice of paying subsidies to industry throughout the country I think we would end up with subsidies upon subsidies and I am sure this is not what Canada needs.
There is also in the existing law a provision in respect of increased costs of production. As I mentioned before, with increasing costs there is an increased subsidy anticipated.
More important still, as I just mentioned a high measure of subsidy would perpetuate the problem and create a situation similar to the one we have in Cape Breton.
The mining industry has never been more active or, generally speaking, more prosperous than it is at this time. However, one of the major problems facing it is the shortage of manpower. It would be irrational, in my view, to pay higher subsidies which would tend to discourage the natural and desirable movement of people from the gold mining sector to other sectors of the mining industry
September 29, 1967	COMMONS
where labour is needed and is better paid than in the gold mining industry. By pouring in more subsides we would damage the situation to a greater degree than is the case now.
The policies of governments, the federal government in particular, have been and are to facilitate and encourage the movement of people when that is inevitable and to bring in industry where it is possible, and all the legislation of the Departments of Manpower and of Industry is to that effect. The hon. member knows that workers or miners moving from one community to another can receive up to $1,000 for transportation purposes. If a man is forced to sell his house and wants to buy another he still receives $500. If he needs retraining he will receive a retraining allowance, and so on. This is a progressive way of dealing with these problems.


Walter Gilbert Dinsdale: 
Jean-Luc Pepin: It is a straight 500 bucks.
The bill is to be a very simple one. It will replace the year 1967 by the year 1970 in subsections 1 and 2 of section 4A of the act. The period of its application is extended by three years to December 31, 1970. No other change is made in the act. The method of computing the amount of assistance payable to an operator remains unchanged.

Mr. Chairman, I am quite ready to admit with the hon. member for Villeneuve and others, that a social problem is involved here and that notwithstanding the renewal of the legislation, and despite the fact that we will again spend $15 million a year for three years in the gold mines of northern Quebec, northern Ontario and the other provinces, the social problem will remain.
I admit that the possibility for alternative employment in the area for the miners involved is slight. The Minister of Manpower and Immigration, as I said a while ago is ready to help these miners through his mobility and retraining programs, as is the minister of commerce and industry by promoting the establishment of new industries in those areas.
As the member for Villeneuve knows, I have often called upon the provinces, upon the provincial labour ministers and particularly upon the Quebec minister to lay down an overall strategy to remedy these situations.
DEBATES	2657
Emergency Gold Mining Assistance Act
I am justified in saying that I have not received very brilliant or practical suggestions on the subject particularly from the Quebec provincial government, whatever its political hue.
The provinces, particularly Quebec, claim that this question involves the price of gold, the monetary policy, so that it is a federal government responsibility. I do not share that view. I think-and I hope the hon. member for Villeneuve will not cause me any prejudice in claiming the contrary-that a mining problem is involved and a social problem which the federal government cannot solve alone. The provinces, particularly Quebec, even claim exclusive responsibility in the field of mining and, occasionally, in the social field.
It is well known that I am not a believer in water-tight division of jurisdictions between the federal and the provincial governments. In the present case, as in most others, a mixed jurisdiction is involved; I think that the central government and the provincial governments should work together to solve the social problems in northern Quebec and northern Ontario. But, as I often say, it takes two to tango and, in this case, I have not been invited by the provincial governments, even though I suggested it.
So, I earnestly hope that the central government and the provincial government will agree to work together to solve the social and mining problem brought about by the waning gold mines.
* (12:20 p.ra.)


Gordon Harvey Aiken: Mr. Chairman, permit me first to make some comments on the speech made by the minister. I should tell him first that he did not have to convince anybody on this side of the house that the act should be extended for a period of time. I believe we in this house agree that this is an absolute necessity; in fact, it is a minimum requirement. However, I believe the minister fell down in his remarks in trying to justify the fact that the government is not doing anything but extending the application of the act.
I felt, as I am sure did many other hon. members, a real sense of dismay with regard to this part of the minister's speech. I felt that the minister had forecast a very dismal prospect for the mining communities which are affected by the act. The minister said the government would permit a slow decline in these communities; he mentioned a progressive state of decline. Several times during his
2658	COMMONS
Emergency Gold Mining Assistance Act speech he intimated it was the view of the government that the gold mining communities would slowly disappear.
I am positive that these communities are not going to die. They have resisted so far the very great problems that have faced them. They have tried to diversify the industry and have been only partly successful. But they have certainly tried and they will continue to try. I am quite sure the minister's forecast that within a few years we will see the end of this problem is wrong. In the meantime why should we not provide at least a minimum standard of living for these communities? Why should we not provide the workers with a minimum wage so they may live reasonably during the years until something else turns up?
The whole tenor of the minister's speech and the reasons he gave for not extending the application of the act into any other area were certainly most discouraging. The minister's attitude seems to be: We have given up in respect of this industry; we will carry it on for a few years and hope something else will turn up. I believe the minister should do much more than hope something else will turn up because nothing has turned up in the last 20 years. I think the minister should look forward to a continuation of the need for these grants. I am sure the gold mining communities will not disappear and that the need for gold will not decline. The minister gave us a very intensive background paper on the problem but I am sorry he did not give us more detail on the reason that nothing is proposed beyond the application of the act for another three years.
The mining communities asked for four substantial things which the minister mentioned. The first was an extension of the life of the act. This has of course been granted and we agree with it. I cannot understand why the minister has limited the extension to three years. Originally this was emergency legislation and it was extended year by year. Then someone had the idea that it was more than an emergency act and renewal was extended to two years. It was later renewed for three years until 1963 and in 1963 it was renewed for four years.
I do not think this is a numbers game. Why did the minister decide that a three year extension was sufficient? Does he believe that in the future something will change the situation? If the minister had given us any indication along this line I would have been satisfied. The minister may hope that within

DEBATES	September 29, 1967
three years something will happen to change the situation, but he did not say this, on the contrary, he said he really did not know what would happen except that there would be a slow decline in the gold mining communities. I cannot understand why the minister did not extend the application of the act for four years. If he was not going to renew it for four years he should have given us a better reason for not doing so. No sufficient reason has been given.
The mining communities also asked for an increase in the grant. Here again the minister did not give us any real reason for leaving the grant structure as it is. He merely said that adjustments could be made to the grant and that possibly the mining communities or the mines could obtain an increased grant by applying the formula.
The fact is that in 1958, after the act had been in effect for ten years, the government of the day found it necessary to adjust the grant structure and it was adjusted upward by 25 per cent. If it was necessary after ten years of a fairly slow increase in the cost of living and labour costs to increase the amount of the grant by 25 per cent in order that it would be realistic, then surely in view of the tremendous increases in the cost of living in the last three years these grants should be increased if they are to be effective. It is no use saying that the industry is a declining one and therefore we will only go part way in assisting it. The government must recognize the fact that grants will be needed for some years, and they will have to make them realistic because costs in every other facet of the Canadian economy are increasing.
There is no doubt that in the gold mining industry wages are deplorable. Evidence presented to us m the committee on immigration and other house committees has shown that miners just will not go to the gold mines and stay there. The mining communities have a great deal of trouble keeping people in the mines. When one knows the wage level of the industry one can understand why this is so. Wages in the gold mining industry are not comparable with those paid in other mining industries or other industries generally, and living conditions in some gold mining communities are at a much lower level than in other communities.
For these reasons I believe there should have been an increase in the grants. I have read the brief presented by the mining communities. One such brief dealing with this problem came to hand just this morning. In
September 29, 1967	COMMONS
this brief and others which I have read I have not discovered any great division between the mining communities, the labour unions, the miners themselves and the companies. Four years ago we heard a great deal of talk to the effect that the mining companies were getting these grants and should be able to raise the wages of their workers. In these briefs I have not read any serious suggestion that the mines are gobbling up these grants and are not using them at least in part for the benefit of the communities and the miners. I believe that if the grants were adjusted, the lifetime of these communities would increase, as would the wages of the miners. Also, the economy generally of northern Ontario, northern Quebec and other gold mining areas would improve.
[DOT] (12:30 p.m.)
So I do not think that the minister really gave us much of an answer. Perhaps he will explain why the three year term was adopted. As I said, I do not know of any reason why it should have been done and he did not explain it, but certainly the problem is not going to disappear in three years.
Now I should like to deal with the minister's reason for not extending the act to include exploration within 60 miles of existing communities. He simply brushed this off. He said that nothing is likely to be discovered anyway so we will not try. He also said that exploration is not the purpose of this act. Surely we cannot consider one piece of legislation in isolation from anything else that goes on in the community and in the country. Let me put the following question to him: Suppose gold was not found but some other metal, would that be so terrible? I say no. Although the other metal might not come within the ambit of the narrow provisions of the Emergency Gold Mining Assistance Act, it would still be of benefit to the community.
I do not see how the minister can be serious in saying that gold will not be found so it does not come within the act. I say that the purpose of the act is to maintain the communities until something else can be substituted, and if nothing else is substituted then the purpose of the act is to maintain the communities as long as there is sufficient product to justify the continued grants.


Jean-Luc Pepin: I am sorry to interrupt the hon. member. I am quite sure he is aware of the fact that the mining industry in this country benefits from all kinds of incentives, ones that the Carter report even said were excessive. I am sure he is aware of the fact that 27053-1691
DEBATES	2659
Emergency Gold Mining Assistance Act the mining industry treasures these incentives and recognizes how much they have contributed to the development of the industry. What the hon. member is asking for is the addition of still greater incentives over those that already exist. We are not speaking here about creating something. There is already a substratum of incentives in existence which the mining industry regards with great satisfaction. The opposite impression should be left in the mind of the public.


Gordon Harvey Aiken: It is certainly true that the tax incentives are well appreciated. I merely said, and I repeat, that perhaps within the ambit of this act the additional 60 mile rule might not result in the finding of gold but surely it would give an incentive to go out and do some exploration and perhaps achieve what has so far been lacking, the provision of further development within these areas. After all, as the minister said there were 80,000 people in these communities in 1966. These people have set up their homes and want to stay there. Believe me, if they did not want to stay there they would not have remained, because so many do leave and those who are there want to stay.
I see no reason why the provisions of the act should not be extended so that further exploration can be carried out. I would also ask the minister the following question: If, as the minister said, there is absolutely no possibility of this happening or if it is very unlikely that anything would result from it, why did the gold mining communities feel that there was some possibility? Surely the people living in the area, and there may be others who have greater knowledge in this regard, must have some idea of what can be found there, and even if they have not they must have learned the lesson that you never find anything without looking for it.
The mineral developments that have been carried out in this country have been made possible because of people who went out to explore. Often they did not find what they were looking for but they found something else.
So I see no reason why such an extension of the act could not at least have been given more serious consideration. I admit the minister did consider it, but not deeply enough. In fact I felt that he brushed off the whole problem too lightly and gave us the impression that we were merely going to maintain these communities a while longer before dropping them. We hope that something will perhaps evolve from the I.M.F. discussions, or
September 29, 1967
2660	COMMONS
Emergency Gold Mining Assistance Act perhaps the price of gold will go up. Let us say the price of gold does go up. All that will happen then is that the subsidies will go down. In some cases they may not be required but I am sure that in other cases they will be unless the price of gold were increased drastically, which is certainly not very likely.
I should like to go now to another subject, the prospects of improvement in the situation from any other direction. I think the most likely one to which people were looking was the recommendations of the Carter royal commission on taxation. I am quite sure that people were told from time to time that this would be one of the serious problems that the Carter commission would consider, and I know that even before the Carter commission report came out the mining industry and the mining communities made their position on taxation very clear.
In spite of the fact that the Emergency Gold Mining Assistance Act has provided some additional support, mining generally has had incentives in taxation for some years and these have been used to encourage the development of the country. People have been encouraged to go out and take a chance, thereby reaping greater benefits. This has been so with regard to the miner and prospector as well as the person who dabbles in the stock market. The only incentive that the Canadian people have had in the use of many of these private pools of money that are available has been the fact that if you buy a mining stock there is some hope you may make some money which will be tax free. Otherwise people would put their money in nice safe mortgages at 8.25 per cent. I do not think anybody can do very much better than that even on the stock market these days.
Then, of course, there is the prospector, and I do not mean the fellow who goes out with a pick and shovel but the companies which are doing very technical research and surveying to indicate the presence of ores. They were hoping that at least the Carter commission would recommend the continuation of these incentives. I should like to read for the record a very short extract from a publication called "Today In Mining" issued by the Mining Association of Canada in March of 1967. The interesting feature of this extract is that it was taken from a speech made before the Carter report recommendations came out. The speech was made by W.
[Mr. Aiken.1

S. Kirkpatrick, the retiring president of the Mining Association of Canada.
[DOT] (12:40 p.m.)
Any significant change in the favourable nature of tax provisions for the mining industry would "create uncertainty and a lack of confidence which would severely curtail the growth of the industry, with consequences harmful to the whole economy."
Mr. Kirkpatrick also stated that tax provisions now applicable have been a major factor in stimulating past growth of mining in Canada. He concluded by saying:
Any recommendations for radical changes in our federal tax structure, as they affect mining, must be assessed in the light of these facts.
Two weeks after this caveat was entered the Carter report was published. At first, of course, it seemed to create a great deal of confusion, but I think I can fairly say that while all the implications of this gigantic work are not yet clear there is one area in which the proposals are not acceptable in their present form. I refer to their effect on the mining industry. I have not heard anybody say that these recommendations are valid from a national viewpoint or from the strictly narrow viewpoint of the mining industry. From the national point of view they would be disastrous if they had the effect as everyone thinks they will, of cutting back exploration for and the development of new mines and resources and cutting back the communities that rely upon these mines.
In the first place these recommendations, if applied, would reduce developments in Canada. Second, from the very narrow viewpoint they would seriously affect those mining communities now in existence.


Maurice Rinfret: Order. I regret to interrupt the hon. member but the time allotted for his speech has expired.


Mr. Starr:: Mr. Chairman, in view of the fact that the hon. member for Parry Sound-Muskoka is the chief spokesman on this issue for our party, I wonder whether the committee would agree that he should complete his remarks?


Maurice Rinfret: Is there unanimous consent for the hon. member to continue his speech?


Some hon. Members:: Agreed.


Gordon Harvey Aiken: I thank the committee, Mr. Chairman, and I will be but a few minutes.
It has been fairly generally accepted that the recommendations of the Carter report
September 29, 1967	COMMONS
will not only be unhelpful to the industry but damaging. I should also like to refer to the September 25, 1967 issue of the Northern Miner which carried a report of a discussion by a panel of mining experts in Toronto. The moderator of the panel was Mr. Wansbrough, vice president of the Mining Association of Canada. According to the report the consensus of the panel was:
Withdrawal of tax concessions to the mining industry as recommended by Carter will cripple Canada's greatest industry.
The last quotation I should like to put on record is from a document which came into my hands only this morning. It relates to a very substantial submission by the Mining Association of Canada which was prepared in August and has just been circulated today. This submission does not deal with the gold mining industry specifically as a separate item but in the summary, which was dated for release September 12, the following appears:
Implementation of the Carter commission recommendations concerning the mining industry would have "disastrous" consequences for the Canadian economy.
The conclusion of the association is:
If the commission's proposals were to be adopted, the present, powerful incentive to exploration for minerals would be eliminated; the level of exploration for new mineral deposits would decline drastically, and property examination work would drop sharply. Existing mines would continue in production until reserves were exhausted; but present reserves would shrink, as those marginal now would not warrant development. Instead of the healthy growth that can be expected if the existing tax treatment is continued, the prospect would be for an accelerating decline in mineral production in Canada as existing reserves are exhausted and not replaced.
I think that sums up fairly well the view of the industry with regard to the general proposals of the Carter commission. I am not going to beat the minister over the head with this because no one is yet responsible for implementing the recommendations, no position having been taken up to now. However,
I think in any case it should be very clear that on this point we would feel that these recommendations in the form they have been presented are not acceptable. In fact, I cannot think of any form of recommendation that would reduce the present tax incentives which would be of any assistance. In general the whole way in which mining exploration and development have been treated is not acceptable, and I hope that the government will state its position clearly very soon so
DEBATES	2661
Emergency Gold Mining Assistance Act there will not be a falling back in the production, exploration and development of Canadian resources.
In view of the fact that there does not seem to be anything emanating from the Carter report on taxation which is going to be helpful to the industry and very little seems to be coming from other sources, we have no objection to the continuation of this act. I think it should be mentioned that a meeting of the International Monetary Fund, which the Minister of Finance is attending, is now being held in Rio de Janeiro. I would assume in light of what we have read in the newspapers that none of us here is competent to judge the effect of the conclusions arrived at at this conference. Nevertheless, it is quite evident that the I.M.F. considers world gold resources to be inadequate and that they are going to create a new kind of money which would be governed by the ability of countries to draw on a fund backed only by the countries contributing to the fund.
There is the feeling that something interesting might come out of this proposal, but it is quite obvious that if that is the case, it will be superimposed upon the present use of gold, and will be devoted almost entirely to international monetary fund transactions. So quite frankly, Mr. Chairman, although this may be used as a bit of an excuse or as a hope that something may eventuate which will relieve the situation, I do not know how it can. There has been no indication that the United States is going to increase the price of gold, and I think the reasons for this are well known. We are therefore caught in this paradoxical situation of a world shortage of gold, of gold being in the ground ready to be mined, but we cannot get a price for the gold which would be an incentive to produce it in sufficient quantity.
It seems to me that since this is a matter of international finance and necessity it is a proper case for the government to act as they have and extend this legislation. I do not see any relief of the situation in sight. I would seriously ask the government to give very real consideration, even before the expiration of the three year period, to enlarging the provisions of the act and to do something more than just extend it from year to year as a temporary measure. I think this problem is a more serious and long-term one than the minister has indicated.
[DOT] (12:50 p.m.)


Lawrence Elliott Kindt: May I ask the minister a short question? Does he have in mind abandoning
2662	COMMONS
Emergency Gold Mining Assistance Act gold as a measure of value? I gathered from his remarks that this is what he has in mind.


Jean-Luc Pepin: I thought the speech we have just heard was rather good on that subject.


Lawrence Elliott Kindt: Would the minister enlighten me on whether he believes the use of gold as a measure of the value of other commodities is likely to continue? Until he has clarified that point it will be hard to resolve the issue. He seemed to indicate in his speech that it had been almost abandoned in the international field.


Jean-Luc Pepin: The hon. member's colleague has just indicated that the best we can hope for is that gold will remain as a basis upon which other form of convertibility will be added. I am not particularly encouraged by that assessment of the future of the gold industry made as I have mentioned, by the hon. member's colleague.
Incidentally I was surprised that after telling us there does not appear to be much future for the gold industry the hon. member for Parry Sound-Muskoka should be willing to subsidize it at a still higher level. I am surprised by the lack of logic in linking his assessment of the situation with the conclusion he reached. I do not wish to be unfair, however, because I admit that other considerations, such as the welfare of the communities themselves, were in his mind. Nevertheless, I have read recent articles by the hon. member to the effect that the time has come for us in this country to return to the logic of Conservative economics and I admit I was somewhat astonished to hear him say the time had come to raise subsidies, just as though he had suddenly become an adherent of the New Democratic party.


Murdo William Martin: In view of the lateness of the hour I wonder if we could now call it one o'clock?


Some hon. Members:: Agreed.


Maurice Rinfret: It being one o'clock I do now leave the chair.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Murdo William Martin: Mr. Chairman, we have before us legislation to extend the provisions of the Emergency Gold Mining Assistance Act for another three years. The 
DEBATES	September 29, 1967
minister has made it very clear that there are to be no other alterations in this legislation involving this field. This morning he used a word, possibly inadvertently, that could well apply to this legislation when he stated that its purpose was to retard the closing of the mines, or something to that effect. I think the word "retardation" is very appropriate to this legislation which has been on the statute books for some 19 years. It is retarding legislation, and according to the minister its purpose is to retard the inevitable.
[DOT] (2:40 p.m.)
I believe the original purpose and intent of the act with which we are dealing today was to foster and maintain the gold mining communities. As we look over the record of what has transpired in the 19 years since this legislation was first enacted we can see what a complete and shoddy failure the act has been in light of the purposes for which it was originally intended. This morning the minister gave a very good outline of the history of the gold mining industry since the act first came into being. It is a history of bankruptcy of ideas and the failure of the policies of the governments of this country over the past 19 years with regard to the gold mining industry. This is what it has been and this is all that it has been-a history of bankruptcy and failure.
The act has not done the job it was originally intended to do. It has been extended from year to year. The very name of the bill should make us realize what a complete failure it has been. Twenty years later it is still called the Emergency Gold Mining Assistance Act. How long does an emergency exist and when do we stop trying to fool ourselves?
The minister mentioned some of the statistics contained in the report of the administration of the Emergency Gold Mining Assistance Act for the fiscal year ended March 31, 1966. We see, for example, that in the first year subsidies were paid, 1948, there were some 117 mines which received assistance from the federal government and in the next year, 1949, there were 122. In 1949, when the highest number of mines was being assisted by the federal government, they received some $12,571,456.90 in assistance from the Canadian taxpayers. By 1965 this number had dropped to 41 but they still received approximately the same amount, $12,053,385. What this really means is that while the contribution by the Canadian taxpayers to this industry has remained practically constant throughout these 19 years, the number
September 29, 1967	COMMONS
of mines participating in the plan has dropped from 122 to 41, which leads us to wonder what assistance this has been to the gold mining communities since this has been the purpose of the act since it was passed in 1948.
I should like to be even more specific by illustrating a situation with which I am very familiar. The Hollinger mine in Timmins has been the biggest gold producer in the Timmins area and in fact has been the second largest gold producer in the world over the past quarter of a century at least. Since 1948 the Hollinger mine has received in subsidies from the Canadian taxpayers some $19,771,145.93, according to the information in the blue book we have here. This includes their three properties, the Hollinger mine at Timmins, the Ross mine at Holtyre and the Young-Davis mine at Matachewan which has been closed down for some years.
We have been notified that within the next year or possibly 18 months the Hollinger mine will be closed down. Therefore we have a situation about which I am well aware. Miners who have worked in the Hollinger mine, some of them for 40 or 45 years, are being thrown out without a pension of any kind. They are being tossed out like an old pair of shoes that one tosses in the garbage can, in spite of the fact that the Canadian taxpayer over the past 18 years has paid $19,771,145.93 to this one company.
How effective has this act been? What have we accomplished? I wonder just how much thought parliament, this government, the government which preceded it and the previous Liberal government have given to the administration of the act, because some very strange things come to the surface if one studies it at all. For example, most of us are quite aware that in 1953 there was a great strike in the gold mines. All the mines in the Timmins area were out of operation for periods varying between five months and seven months. I do not remember the exact date but I believe the Hollinger mine was out of operation for about six months that year.
If we look at this book, keeping in mind that the report is really for the previous year's operations we And that the year before this strike and the year after it the taxpayers of Canada paid a subsidy to this company of $665,908.59 just in respect of the Timmins operation alone but that for the year 1953 when the mine was closed down for six months, when the miners did not draw wages and the community did not receive the benefit of their wages for six months, the
DEBATES	2663
Emergency Gold Mining Assistance Act taxpayers paid the Hollinger mine $1,012,139.49. Without making a deep study one has to assume that it was a very profitable venture for the Hollinger mine to allow those men to be out on strike for six months because its subsidy from the Canadian taxpayers doubled for that year.
This is just an illustration of why I am trying to make the point that the Emergency Gold Mining Assistance Act has never been a solution to the problems of the gold mining industry. Apparently it never was intended to be that but rather a gesture to try to fool the public. By dipping into the taxpayers' pockets for the last 20 years governments have been able to maintain this gesture which has solved nothing. The minister said today, supported by the hon. member for Parry Sound-Muskoka, that there is no future for the gold mining industry. The legislation is just a palliative so that the old pensioner who we know will die within a few years will have a little pittance to make things easier for him until he gasps his last breath.
The legislation the minister is presenting today is for the purpose of extending the act for three years. He gives no particular reason for setting that period. If we look at the history we find that over the past 18 years the mines have closed at the rate of five a year. All he had to do to look after the situation was to extend the act for 18 years, because there will be no communities left if we continue the same policy that has been followed in the past. The minister and the hon. member for Parry Sound-Muskoka have both subscribed today to the idea, which unfortunately has been promoted and sponsored by the Minister of Finance, that gold is of no more good to the world and that we should get rid of it as quickly, decently and quietly as we can. I do not agree with that theory, Mr. Chairman.
[DOT] (2:50 p.m.)


Gordon Harvey Aiken: Mr. Chairman, I rise at this moment to make a clarification. I am sure if the hon. member had listened carefully to my speech he would not have made that assumption.


Murdo William Martin: Mr. Chairman, perhaps I made the wrong assumption but I followed the hon. member's speech very carefully because I wanted to find out what the Conservative party policy was as expounded by their leading spokesmen in this field. Perhaps I was confused, but Hansard will speak for itself and we will have a look at it
2664	COMMONS
Emergency Gold Mining Assistance Act tomorrow to find out, if indeed we can, just what their policy is.
I know that the Minister of Finance, apparently with the support of the Minister of Energy, Mines and Resources, believes that the sooner we get rid of gold as the means of international exchange the better off we will be. I understand that the Minister of Finance at the present time is attending a meeting of the International Monetary Fund, and if we can believe the newspaper reports the major objective of that meeting is to find some substitute for gold to be used as the medium of international exchange.
Let me remind the minister that if we make a study of history we will find that for 5,000 years people have been looking for a substitute for gold but for 5,000 years have been unsuccessful in finding one with any lasting value. I predict without one shred of hesitation that their efforts will be as unsuccessful this time as they have been for the past 5,000 years.
Gold is something we have in Canada which very few countries in the world have today and it is something that is sought for by every country in the world. It is something that is always going to have a sales value because it is one commodity that over the centuries has been accorded the complete trust and confidence of nations all over the world. By pursuing such a policy as the government are pursuing at the present time they are, in my opinion, following a course which is complete idiocy.
The minister pointed out in his speech that there have been no new discoveries of gold. This is not really true. There are new discoveries, some of which I know of myself. There have been new discoveries of gold but they will not be promoted or exploited at this time as long as we have a fixed price that bears no sensible relationship to the value of money today. They will not be exploited or developed as long as the government continues the policy announced by the Minister of Finance of attempting to replace gold with some kind of funny money.
We have noticed over the past 20 years that the number of gold mines in this country has decreased from some 250 to about 30. As I mentioned earlier, at the rate they are being operated they may last for another five to ten years and that will be the end of gold mining until such time as world events catch up to us. But then, after great stress and strain and possibly another depression like we had in the 1930's, gold will come back into

DEBATES	September 29, 1967
its own and we will start over again. Apparently it is impossible for this government to learn from history and the mistakes of the past.
There are a great many things I should like to say about gold, but the minister indicated very clearly that he is not interested in gold. The debate today is confined to a three year extension of a policy that certainly everyone must recognize is nothing but a dismal and utter failure. I think any remarks I might have to make about gold, its price and place in the world markets would be better reserved until the Minister of Finance returns from the I.M.F. meeting. At that time we can perhaps return to this problem with a minister who will accept some responsibility in this field.


David Réal Caouette: Mr. Chairman, this morning I listened very carefully to the Minister of Energy, Mines and Resources, as he was explaining the urgency for parliament to approve resolution 34 which reads as follows:
That it is expedient to introduce a measure to amend the Emergency Gold Mining Assistance Act to extend its application to the years 1968, 1969 and 1970.
The purpose of this resolution is to enable the government to assist gold mines for the next three years, or from December 1967 to December 1970.
Mr. Chairman, the hon. minister has stressed the importance, for the government, of providing assistance to northwestern Quebec and northeastern Ontario with respect to gold mining. It is common knowledge that these Canadian areas had gold mining developments which, unfortunately, had to be closed down. Recently, I read in the August 1967 issue of a Montreal periodical, La Prosperity, vol. V, no. 1, a greatly significant article.
The mining industry has been for the last 30 years the backbone of the economy in this area. Apart from the Mattagami and Chibougamau developments, located 185 and 330 miles respectively from Rouyn, there is a drastic curtailing of mining production,
[DOT] (3:00 p.m.)
The figures mentioned and quoted by the minister in his explanations prove undoubtedly that there is a substantial drop in the mining production in that area.
Thus, in the area of Val d'Or, several gold mines, namely East Sullivan and Sullivan Consolidated, have almost ceased all production. The Malartic mines have slowed down production.
September 29, 1967
There also mines have been closed.
In Rouyn-Noranda, the problem is just as acute. Over the years, Noranda has become the reduction centre of copper concentrates of northwestern Quebec and northern Ontario. Now, among the twenty copper producers sending their copper concentrates to Noranda to be reduced, several will stop their shipments shortly, including the Beau-chemin family mines. In a couple of years, if new ore deposits are not found, the Quemont Mining employing more than 500 persons will have to close.
It is obvious that Quemont will close its doors; it has already said so to its employees.
Normetal Mining-*
-north of La Sarre-
-and Lake Dufault Mines are experiencing serious difficulties. At Noranda Mines, which has 1,700 employees, the ore reserves are diminishing rapidly from year to year. Some fear that this company will have to lay off a lot of men in the next five years or so. The prospects are therefore far from bright.
Besides the minister admitted it this morning. The prospects are not bright as far as the prosperity and labour market are concerned in that region because with the exception of the mines, there is no secondary industry there. A few years ago we should have had, for instance, the zinc refinery which was set up in the Valley field area instead to process the ores coming from Noranda or northwestern Quebec.
This zinc refinery employing possibly more than a thousand men should have been established in the northwest-this industry belongs to our area-but no government, federal or provincial, has intervened nor asked the Noranda Mines Co. to set up this secondary industry in the area where the ore is mined. No! The plant was allowed to go to Valleyfield, where there is neither copper nor zinc.
There is neither zinc nor copper in Montreal and the suburbs, on St. Catherine Street, but that is the spot decided upon to set up a secondary industry.
Thus, the prospects are not very gay and, within five years, we will have large scale lay-offs at the Noranda Mines whose resources are not eternal.
Mr. Chairman, I say we must support this resolution with all our might to maintain the assistance to the gold mines and I say that, in the circumstances, we should improve such assistance in view of the fact that there are no other industries in our area to give work to our manpower which is being displaced or laid off every day.
Emergency Gold Mining Assistance Act
We have tremendous potential. For instance, it is well known that between La Sarre, Rouyn-Noranda, Amos or Val d'Or, towards James Bay, there are untold riches, invaluable wealth, but no one in the past 15 or 20 years has thought of a way to ensure their development.
We have heard about an engineer called Mr. Kierans from Sudbury who, after having studied the situation, brought forward a program to develop the wealth of James bay, by using, for instance, the Harricana, the Rupert and another river-three rivers in any case -to divert the waters of James bay to the south as far as the great lakes. This Kierans project was found somewhat unrealistic when it was brought forward.
Today, we have people, mostly from the provincial government, exploring the James bay area. Last year, businessmen, the boards of trade, people from every social level, in the area of La Sarre, Amos, Val d'Or, Rouyn-Noranda and Malartic got together to develop a road from La Sarre to James bay. Last winter, I believe, they built a stretch of road of about 40 to 50 miles. Those people performed that work without the help of any government, either provincial or federal, and today, it is finally being realized that it might be important to extend explorations a little further in that northern region.
Mr. Chairman, this is only one field. That part of the country is exceedingly rich in forest resources. Water resources are almost fantastic, if only we tried to develop them to compensate for the gradual disappearance of mines in that area. That is no doubt what prompted the editor of La Prosperity to write in the August 1967 issue, and I quote:
Prospects are therefore far from heartening as far as the prosperity in that area and the labour market are concerned. More than 3,000 jobs are involved. It is time to plan, consider and prepare projects-
I think that the studies have been lenghty enough and that it is time for action, for positive measures, for realizations. The article reads further:
-even to consider vocational training classes-
They are already somewhat in progress, but they are just starting.
-for those displaced miners.
In a few years, it would be too late to consider the solutions to implement. While there is still time, let us see big and realistically.
Mr. Chairman, I said earlier that we have considerable forest resources.

September 29, 1967
2666	COMMONS
Emergency Gold Mining Assistance Act
The minister complained, this morning about the fact that the federal government has to pay $15 million a year to keep the men at work in the gold mines. Moreover, the minister even maintained that the federal government, through its subsidies, contributed approximately $1,500 for each miner working in the subsidized gold mines.
I do not doubt the figures quoted by the minister. It might be true that the subsidies amount to a contribution of $1,500 per gold miner, but subsidies have already been extended to other segments of the Canadian economy. We grant subsidies to the western wheat producers in order to increase the farmers' income. This is not surprising for the minister.
[DOT] (3:10 p.m.)
The fact that we export wheat to Russia, China and various other communist countries can give the government a reason for granting huge wheat subsidies, because wheat can be exported.
Mr. Chairman, the minister knows full well that all the gold produced in Canada is easily exported. The United States would buy all the gold we produce. If we doubled our production within a year, the United States would buy it all. The minister knows that.
This morning, the minister made a comparison with the coal mines in the maritimes.
I could not help arriving at the conclusion that the comparison does not apply. Coal has a monetary value as such, while gold is accepted as the basis for international exchange. Coal is not and never will be. There is a difference. Therefore, a parallel between the two, between the coal mines to which we grant subsidies in the maritimes or in Alberta, it matters little, and the gold mines in northwestern Quebec or anywhere in Canada, is simply not logical to my mind. We are sure that we can export the gold we produce.
Now, the minister tells us: well, in 1934 or 1935, the price was set at $35 per ounce. That is not enough. It is obvious that it is not enough. Indeed, we know it is not. In 1958 I believe-if I remember well-the United States themselves decided to allow a subsidy of $44 per ounce in addition to the price of $35 set by agreement. The total price for one ounce of gold, as produced in the United States, is thus $79.


Jean-Luc Pepin: Mr. Chairman, I would like to ask the hon. member for Villeneuve (Mr. Caouette) where he gets those statistics; I have just been talking to Washington and I


am told that there are no subsidies whatsoever for gold-production in the United States and that the $44 or $45 subsidy mentioned by the hon. member is just the amount as claimed by gold producers, but it never became part of the American policy.


David Réal Caouette: Then, somebody is lying, Mr. Chairman, and I do not think that it is I. I have in my hands a Toronto newspaper dated July 23, 1966 which says:
Marked rise of gold mine securities following Washington's decision to increase its subsidies to gold producers. Gold mines reached a new peak-
-that is on the stock exchange-
-while the banks fell off yesterday on the Toronto stock exchange at closing time.
Earlier, I advised the minister to call the
Toronto stock exchange so as to be sure not to miss the mark.
The rise of the gold mines stocks is the result of the approval by the internal committee of the United States house of representatives of a bill providing an increase in subsidies to gold mines. The bill, passed yesterday, states that the mines in operation will receive subsidies equal to six per cent of the value of the gold produced during the years elapsed since 1939. The operators of inactive mines will receive subsidies equal to $44 per ounce, above the fixed price of $35 per ounce fixed in 1939.
This was in 1935.
Among the banks, the Bank of Nova Scotia, the Toronto-Dominion Bank and the Royal Bank lost 1 point respectivelyas a result of the decision taken by the United States house of representatives to approve that legislation to grant an increase in subsidies to gold mines.


Jean-Luc Pepin: Mr. Chairman, I wish to point out that, according to the article, it is a bill of the house of representatives. It is quite possible that it has never come in to force. This is what I am told in Washington.


David Réal Caouette: Mr. Chairman, is it the American congress which informed the minister this morning or at noon about subsidies. Are subsidies paid to gold mines in the United States? How are they called? Does the minister know?


Jean-Luc Pepin: I have been assured that no subsidy is paid to gold mining in the United States.


David Réal Caouette: Is the minister aware of the fact that gold mines could not operate at $35 per ounce in the United States, just like in Canada?
September 29, 1967	COMMONS DEBATES	2667
Emergency Gold Mining Assistance Act
Now, how can the mines maintain their their part, accept gold as a means of exoperations when the wages paid there are change, in return for commodities which we twice as much as the wages paid to our gold need and to balance our commercial deficits miners in Canada?	with them or with other nations.


Jean-Luc Pepin: I think it is possible that the ore is richer in the United States than in Canada, or that the operations are more efficient down there.


David Réal Caouette: At any rate, Mr. Chairman, one thing is sure. Gold mining operations are more profitable to American than to Canadian companies. The minister, as well as ourselves, received last November the brief of the Regional Economic Council for Northwestern Quebec, the brief of the cities of Val d'Or-Bourlamaque-Sullivan and Malartic, mentioning that even the operators of inactive mines will be paid subsidies of $44 per ounce over the fixed price of $35, but the Regional Economic Council calls the government's attention to this fact:
However, we deem advisable to emphasize certain aspects which have been developed more particularly in various areas of northwestern Quebec, but which will also effect more or less seriously all the areas concerned in both Quebec and Ontario, according to the situation prevailing in the various communities:
1. A general closing down of gold mines could create disastrous social and economic problems leading to the complete bankruptcy of certain centres and their population.
The minister took that into consideration. He stated, this morning, that it was especially because of the social and economic problems that the government is willing to go on subsidizing the gold mines.
The minister also told us that this does not mean that he wants the gold mines to continue their operations, but merely that they are to be allowed to die out gradually. We continue to subsidize them so as not to upset too much the sociological conditions in those areas and to enable the mines to close down gradually.
[DOT] (3:20 p.m.)
However, Mr. Chairman, I maintain that even if we had other types of secondary industries, the government would not like to see all the gold mines in our region close down. It is one of the most important gold producing regions in Canada.
If all those mines were to cease production tomorrow, if no gold were mined in Canada at all, the minister would perhaps be among the first to complain because we use this gold to negotiate with many countries in the world through the United States which, for
However, we know that there are other solutions to the problem. We know that these gold mines eventually-


Herman Maxwell Batten: Order. I must advise the hon. member that the time allotted to him has expired. Does the hon. member wish to continue? Does the committee give unanimous consent for the hon. member to continue?


Some hon. Members:: Agreed.


David Réal Caouette: I thank the committee, Mr. Chairman, for giving me, for another few minutes, the opportunity to continue my remarks about this very important resolution, a resolution, moreover, which especially concerns the area I represent here. Since we, in northwestern Quebec happen to be right in the heart of the problem, I should like to go on quoting the brief which the Regional Economic Council of Northwestern Quebec submitted last November-that is about a year ago-to the hon. minister, to the right hon. Prime Minister (Mr. Pearson) and to the hon. Minister of Finance (Mr. Sharp). Here is what the Council said, with the support of the cities or the municipalities concerned:
The need for the workers in the gold mining industry to receive salaries on a par with those paid workers employed in the extraction of base metals.
The hon. minister is certainly aware that in the Val d'Or and Malartic areas, the difference in salaries is intolerable.
As a matter of fact, a worker in a certain mine will perhaps earn as much as $1 an hour less than a miner employed at the No-randa mine or in one of the mines of northeastern Ontario. Yet, living conditions are the same, the cost of living is exactly the same at Val d'Or and Malartic as in Rouyn, and if the miner who has a family to support earns $1 an hour less than the one who works at the Noranda Mine, or at the Quemont mine or at the Lac Dufault mine, at that time, Mr. Chairman, there is an unaccountable gap, because mines cannot pay more, since they do not have the means to do it. That is why towns like Bourlamaque, Val d'Or, Malartic, Rouyn-Noranda, as well as the municipal councils and the Regional Economic Council
2668	COMMONS
Emergency Gold Mining Assistance Act are asking the federal government and the minister involved to increase the aid to the industry, not to allow the companies to make more profits, but to enable them to pay better wages to their employees so that they may reach at least, the average salary level paid in the area.
The Regional Economic Council is perfectly right in that respect when it says, and I quote:
The desirability of amending the exploration program in northern Canada, in order to enable the companies operating in the municipalities concerned with the gold mining problem to find alternative solutions for those that will have to close down eventually.
But one way to stop the closing down of those mines is to increase financial assistance; another way is to promote exploration and discovery of new mineral deposits. There is a tremendous potential for discovery of hundreds of new mines in the area extending north to James bay. What potential indeed! Another alternative:	the local use and
processing of our forest products. If the government is reluctant to pay $15 million in subsidies to our gold mines, that $15 million should be spent to establish secondary industries in our area and the government should insure that our displaced or laid off gold miners find new jobs in new plywood factories, for instance.
We have a group of businessmen who are now trying to start production of plywood in the Val d'Or area. It is very difficult to catch the ear of the Industrial Development Bank; it takes six months to get an answer to an application. It takes sometimes a year and a half to two years before getting results, when it is not a flat "No" and we are then told: Try to arrange your balance sheet otherwise; however, it would be a viable industry, an important secondary industry which would transform on the spot the product of our forests.
Mr. Chairman, if this subsidy of $15 million paid to gold mines were increased to help the establishment or the creation of secondary industries in our own country, it seems to me that the operation would be much easier and a great deal less painful than it is now. In fact, the minister knows very well that even with his new legislation to extend the payment of subsidies for a period of three years, he still will not be able to solve the problem. Within three years, the way things are going, most mines in Malartic-Val d'Or will be closed.

DEBATES	September 29, 1967

Our workers, our miners who have been living in the area for 25, 30 years will have to leave and go either to northern Manitoba, or to other sections of the country and everything will be lost in the cities where a great deal of money has been spent by the people, the leaders of our region, because of lack of planning.
I warn the minister about that situation, but he is well aware of it. When he says that the federal government is not the only one to blame, I agree with him. The Quebec government should also do something in that field. If the Quebec government insists on taking charge of everything in the province, it should start by assuming its responsibility with regard to the miners who are being displaced or are losing their jobs because the gold mines are closing their doors.
It is clear that our region which has been dependent on those mines for some thirty years cannot expect to continue to live off those mines to the end of time.
Now, Mr. Chairman, I wish to point out to the minister that even if it is true that Quebec must take its responsibility, even if it is true that Quebec does not co-operate with Ottawa and turns a deaf ear, whatever political party is in power as the minister said, he should just the same take the lead in suggesting, a more adequate remedial measure than subsidies, because it is the federal government that pays the subsidies.
The people of our area would be grateful and would understand the importance of establishing secondary industries as an alternative to mines which are closed or gold mines with low grade ores which are not profitable.
Then, the Minister of Energy, Mines and Resources will have recognized that there is in north western Quebec, an enormous quantity of potential energy ready to develop, and that with good will and financial assistance, of course, it will be easy to correct the alarming situation which is now prevailing in our area.


Mr. Leboe:: Mr. Chairman, I shall be only a few minutes because I am one of those who believe that the renewing of the assistance program is very essential to the gold mining industry, and we in this group give our support to this resolution. However, there are some points I should like to cover in regard to the matter which have to do mostly with
September 29, 1967

the cold, hard facts put before us by the minister in connection with the phasing out of the gold industry in Canada, particularly those mines that do not have the type of ore to work which will make their operations profitable under today's standards.
The amount of money being spent in this regard can, I think, be considered to be negligible in light of the sum of money spent, for instance, on national defence. We consider that national defence is required and that we need to spend money on the armed forces. However, I think it is equally true that it is important that we assist the gold mining industry.
As most hon. members know, the Cariboo is synonymous with the gold mining industry. For many years a gold mine was in operation at Wells. It is one of the gold mines to which the minister referred when he said that certain mines had gone out of business. It is heartening to note that the mining operation at Wingdam, a very short distance from Wells, is now being revived, and it seems that we are going to see considerable activity in placer mining in this area.
Another matter that the minister stressed was that the people now employed in these various communities will readily be taken care of by the department of manpower. I should like to draw to the attention of the minister, who can perhaps draw it to the attention of his colleague, that other people in these areas are affected by shutdowns in addition to those who are on the payroll of the operation in question. I refer to those who supply services that are required, such as operators of grocery stores, meat shops, garages and so forth.
When the minister of manpower makes provision to assist individuals in the exodus which occurs when a plant is shut down, I would point out to the minister that people in small businesses who over the years have just been making a bare living servicing these communities are left high and dry. No provision is made to give them assistance to ease the plight in which they find themselves. It is heartening to note that when this occurred in the town of Wells the people there were determined to find ways and means of retaining their community life, and I think this is typical of other communities. They have a love for their own community. They have helped to build it and they do not want to pick up and leave. I do not know what can be done to assist people who find themselves left high and dry. All their customers pretty well
DEBATES	2669
Emergency Gold Mining Assistance Act disappear when the plant closes down and the workers are cut from the payroll and leave. There are no customers at all to buy from their stores and the situation becomes very serious for the owners.
It is not only a question of the participation of the federal government in this regard but also one of very close co-operation between the federal government and the provincial government concerned. Provincial governments certainly have a very large responsibility in these matters in addition to the federal government, perhaps much more so than the federal government when the chips are really down. It seems to me there is room here for very close liaison and for a cooperative effort between the provincial and federal authorities so as to make certain that all of the people affected, not just those on the payroll, receive some consideration, and that the means is provided to re-establish themselves in one way or another.
o (3:30 p.m.)
That is all I want to say today. I could go into great length about the history of the Cariboo country but I will merely suggest to hon. members that if they wish to find some really interesting reading they should go to the library and take out some well written books on the subject of gold mining in the Cariboo. They will not be disappointed.


Herman Maxwell Batten: The hon. member for Yukon.


Mr. Choquelie:: Is he still a member?


Erik Nielsen: Mr. Chairman, I will be grateful if you will tell the hon. member for Lotbiniere to shut up and stop his "ki-yi-ing". He seldom adds a useful word to the discussions in the house.


Auguste Choquette: The hon. member has been away for one year and it is a shame to see him back.


Erik Nielsen: The hon. member for Lotbiniere may be interested to learn that my riding, unlike his, contains 207,000 square miles and it takes me five weeks to get around to each community once.


Auguste Choquette: The population is so concentrated that there is no need for you to stay away for one year.


Erik Nielsen: I wish the hon. member for Lotbiniere would concentrate on removing himself behind the curtain for a few minutes.
2670	COMMONS
Emergency Gold Mining Assistance Act


Auguste Choquette: No, I shall listen to you. I am watching you.


Herman Maxwell Batten: Order. This might be an appropriate time to allow the hon. member for Yukon to carry on with his remarks on this resolution.


Erik Nielsen: Mr. Chairman, I rose to direct my remarks to the resolution before us but I am sure you would not expect me to permit the inane remarks of the hon. member for Lotbiniere to pass without challenge. They are typical of the tactics of hon. members opposite.


Eldon Mattison Woolliams: Constituency of Windsor Castle.


Erik Nielsen: The gold mining industry of Canada finds itself in a paradoxical position. On the one hand the world is short of gold and on the other the gold which lies in our mines in Canada is going to waste while the government in Ottawa does not appear to be doing much about it.
I was astonished by the minister's complete lack of interest in the whole subject. He rose in his place and mechanically presented a proposition to extend the provisions of the act for another three years. He stumbled over a few statistics and then gave the industry the kiss of death by saying that the only reason for the extension of the legislation was to allow gold mining to die gracefully.
I come from a riding which has 90 per cent of the placer gold producers in Canada. The placer gold production of Canada may be relatively small. During his statement the minister repeatedly made the point that the cost of the administration of this act was $231 million. I would point out that production in the Yukon in the first few years at the turn of the century more than equalled the cost of the administration of the act since its inception. The minister has kindly sent me the statistics for which I asked in respect of placer mining. In 1948, of 30 such mines 20 were in the Yukon; in 1950, of the 24 that were operating in Canada 19 were in the Yukon; in 1955, of the 22 operating mines 17 were in the Yukon; in 1960, of the total of 26, 20 were in the Yukon. The total the minister has supplied for 1965 is 22 with no figure given for the number of operators in the Yukon, but I dare say it remains at 19 or 20.
If he looks at the annual report for the year ended March 31, 1966 the minister will find that, throughout all those years, of the total applications for assistance under the act

DEBATES	September 29, 1967
about one third in number came from people who conduct placer mining operations in the Yukon. Indeed, the largest placer mining operation which existed in Canada until 1966 was that of the Yukon Consolidated Gold Corporation.
This brings me to a point which the minister made. He made special reference to manpower and the high cost of labour. This is indeed a problem not only in the gold mining industry but throughout the mining industry generally. Rather than offer the incentives which are offered with regard to manpower mobility the minister might be well advised to try to convince his colleagues that there is a desparate need for the training of miners in this country. United Keno Hill Mines Limited in the Yukon has drastically curtailed its operation, not because the company was running out of good ground but because it could not meet the labour requirements of the operation, partly on account of the high cost and partly-and this is the point I am now making-because of the unavailability of skilled miners. This is a problem which confronts the whole of the industry.
The solution proposed by the minister is to close down the mines, extend the period of assistance for another three years and perhaps for a further three years, and then let the industry die a graceful death. He seemed to be entirely disinterested in the fiscal ramifications involved. I tried to get the minister to say whether or not he was in favour of increasing the price of gold. He ducked that question. In fact, he went on record as saying, not once but twice, that the gold mining operators who had made representations to the government agreed with him that there was no hope for an increase in the price of gold.
This left me with the impression that no representations for an increase in the price of gold had been made to him. However, in the brief submitted by the gold mining communities comprising some 35 communities in Canada, supported by the regional economic council of northwest Quebec, supported by the association of mining municipalities of northern Ontario and by the northwestern Ontario development council and co-ordinated by the department of industry for the town of Timmins, recommendations in this regard come through loud and clear. They have said on page 4 of their submission, and I think it is worthwhile to put it on the record, that they want a revaluation of the world's currencies in terms of gold under the
September 29, 1967	COMMONS
terms of the I.M.F. agreement. They want a gold price of $70 to $100 per ounce, and say this would provide a valuable interim measure and long-term support to world currency reform.
[DOT] (3:40 p.m.)


Jean-Luc Pepin: If the hon. member would not mind a brief interruption I wish to say I do not disagree with that. That was in the representations we received. What I said this morning was simply that it would not be practical at this stage to take into account a rise in the price of gold in determining the policy that we are considering here. That is all I said, and if I may be allowed to quote from the memorandum from the gold mining industry I would point out that it also says:
The fixed price of gold, as determined by the United States government and supported by the International Monetary Fund, of which Canada is a member, is a world wide problem which continues to occupy the attention of economists.
In spite of the arguments which can be adduced for expanding the role of gold for international monetary purposes by a revaluation of all currencies in terms of gold, it appears to us that such a development cannot be counted on for any aid to the industry in the immediate future.


Erik Nielsen: I was coming to that if the minister had been patient. I want to be fair to him. I think it is very relevant to the resolution under discussion and to our determination of whether we are going to continue to extend what has been described by my hon. friend from Timmins as emergency legislation since 1948. I believe that the minister as the minister representing the mining industry, and the gold mining industry in particular, should be able to say whether he is in favour of a rise in the price of gold. He should be able to tell hon. members whether the Minister of Finance has gone down to Rio with a view to trying to convince those with whom he will be holding discussions that there should be an increase in the price of gold. Yet the minister has been unable to do this. It struck me that he showed a remarkable lack of interest in the whole matter of the fiscal ramifications.
The minister said that exploration is not the purpose of the act. While he is quite correct in saying that exploration costs, as we all know, have no direct connection with the mining operations, they are calculated among other factors in determining the assistance that is rendered to applicants under the act. In actual fact the minister is out in left field when he says exploration is not the purpose of the act or that the act does not take into
DEBATES	2671
Emergency Gold Mining Assistance Act account exploration beyond the operations of any particular producer. I would like to draw to his attention that during the many years that Yukon Consolidated Gold Corporation was drawing assistance under the act it was operating in an area which we locally call the Loop, 80 miles of creek, and it was constantly exploring up the creeks and down the creeks for new gold bearing gravels and earths. If this assistance had not been available to the corporation for this purpose it likely would have packed up operations a good many years before it did.
That brings me to the next point, the matter of keeping gold mining communities viable. The minister said that his forebears went to the Yukon in the early days and settled in the Dawson City area. He himself recently visited Dawson City. It must have struck him, as it does thousands who come from the outside, that there once stood the fourth largest municipality in Canada, now virtually a lost community because of the gradual decline of the mineral industry in the area. Recently there have been some signs of encouragement with the finding of asbestos 40 miles away, but that is quite a distance from the municipality. While we can mobilize relocation of manpower in areas like Cape Breton when an economic problem occurs that requires the closing of a coal mine, it is pretty difficult to mobilize the relocation of a whole municipality. This is what the government is confronted with in connection with places like Dawson City. When gold mining does move out of that area, although certainly it has by no means left yet because we still have a number of small placer operations supporting this and other communities in the Yukon, then the situation will reach the stage where other devices will have to be found to maintain the municipality.
Unlike the previous government, certain of whose tourist investments in that area were scoffed at and scorned by hon. members opposite when they sat on this side of the chamber, this government is displaying remarkably little interest in that kind of direction to the type of community that suffers as the result of the falling off of the mineral industry, in this case the gold mining industry. The minister's colleague, the hon. member for the Northwest Territories, will tell him that the whole northern area of Canada is a mecca for tourists from all over North America. Therein lies a treasure house for the federal government in tourist dollars if it would but realize it.
September 29, 1967
2672	COMMONS
Emergency Gold Mining Assistance Act
With respect to exploration I would also point out there is seldom a prospector who does not go out into the bush with a gold pan in his pack. Surely it cannot be against the interests of this country to find more gold mines. If that be the case then I must be more lacking than I thought I was in my appreciation of the value of gold and of the economic need of this country to have it. To be confronted on top of all these problems facing the gold mining industry with recommendations that have the possibility of acceptance, such as those contained in the Carter report is just about putting the last nail in the lid of the coffin of the mining industry as a whole and particularly the gold mining industry.
The minister made certain remarks about a lack of new discoveries. The hon. member for Timmins brought him up short on that and, incidentally, also criticized the hon. member for Parry Sound-Muskoka for not offering policies although he himself did not make one single constructive suggestion to meet the problems. Discovery Mines in the Yukon is one such new find which produced gold for a few months and then had to close down because of problems of high cost.
The whole mining industry in the Yukon, let alone the gold mining industry, operates in a very high cost area. The same situation prevails in the Northwest Territories. There the mining industry also has its problems. Not only mines but individuals are met with almost prohibitive costs in almost every sector of consumer demand and the consumer dollar.
The other day we had a debate on housing. Every house built in the Yukon for miners costs 30 per cent to 40 per cent more than a similar house in Calgary, Edmonton, Ottawa or Toronto. This is the kind of factor that should be taken into consideration when applying legislation of this nature to areas of this kind.
I say to the minister that he should take an adamant stand with his cabinet colleages and insist that the Carter report recommendation that the three year tax exemption period on new mines be abolished be flatly rejected. If he does so he will find 100 per cent support from the mining industry as a whole. I also suggest to him that he should impress upon his colleagues the need for flatly rejecting the Carter report recommendation with respect to depreciation and capital cost allowances. He will also receive 100 per cent support for that stand from the mining industry.


[DOT] (3:50 p.m.)
This industry, I am sure has made representations to the minister. I do not think the minister can gainsay me when I say there is not one single responsible organization connected with the mining industry which has not condemned those two recommendations of the Carter report. I believe I am perhaps in a little more unique position in this debate than any other member even the hon. member for the Northwest Territories who has similar problems in his riding. As the minister has said, there are certain responsibilities the provinces have, but he went on to say that the federal government behaves like a provincial authority in the Yukon Territory and the Northwest Territories.


Jean-Luc Pepin: I did not say "behaves", I said had the same powers.


Erik Nielsen: I believe the word the minister used was "behave". Perhaps he did not, but that is my recollection. However, that is how they behave; let us call a spade a spade. Not only in respect of this kind of legislation but in respect of any other prerogatives of the federal government, it is my suggestion that they should desist, finish and conclude their habit of behaving like a provincial authority. The sooner the federal government transmits responsibility to the responsible people who live in these areas, the more co-operation and efficiency it will receive in respect of the development of these areas.
The minister also, I am sure, has received many representations from labour. I touched on housing a moment ago. He must remember the briefs which have been submitted to our government by the International Union of Mine, Mill and Smelter Workers, now merged with the steel workers. He must have received their representations in connection with this, as well as the mining industry generally.
The Emergency Gold Mining Assistance Act cannot be considered in a vacuum. There are various reasons for the assistance becoming necessary and for the industry becoming sick in the north. The high cost of labour is perhaps the single most important factor affecting costs. If the minister accepts the proposition that one cannot consider the economic aspect in a vacuum, then he must look into other areas such as housing, unemployment insurance, and all the other related labour problems that have the result of increasing the cost of these operations, particularly in the north.
September 29, 1967	COMMONS DEBATES


Maurice Rinfret: Order, please. I regret to interrupt the hon. gentleman, but the time allotted to him has now terminated.


Some hon. Members:: Continue.


Maurice Rinfret: Does the hon. member have unanimous consent of the house to continue?


Some hon. Members:: Agreed.


Erik Nielsen: I thank members of the committee for their indulgence. Until the minister convinces his colleagues, the Minister of Indian Affairs and Northern Development, the Minister of Public Works, and all the other federal authorities of whom there are legions, who are poking their noses into the various aspects of the economic fibre of the north, that measures must be taken to reduce the cost of transportation, housing, communication, and all the other myriads of areas where the federal government insists upon jurisdiction, he will have to be continually involved with legislation of this kind. If he expects the mining industry to be a viable self-supporting industry then, in my humble opinion, there must be a reduction of the costs which make this kind of legislation necessary and an endorsement of the kind of recommendation the gold mining communities presented to him in 1966 with regard to the price of gold. Therein, it seems to me, lies the first step in the proper direction toward curing the high cost of living, the high taxes, and the high cost of production in the gold mines generally.
It is only by taking this kind of position, I suggest, that the minister can come anywhere close to solving the problem. It is not one of allowing the industry to die. That is the impression we all received from the minister's remarks. The industry, far from being supported and far from being looked at as an industry which must be arrested in its downward trend, should be looked at as an industry which should attract attention with the ultimate objective of making it a viable, healthy, self-supporting industry. This cannot be done by the sort of negative approach the minister seems to be taking.


Mr. Orange:: Mr. Chairman, earlier today the Minister of Energy, Mines and Resources made official his announcement that there would be a three year extension of the Emergency Gold Mining Assistance Act which, in effect, will permit the gold mining companies and communities to exist for another three years. As we heard earlier, in the past
Emergency Gold Mining Assistance Act year we have had representations from the gold mining communities, The Mining Association of Canada, the unions and others, asking the minister to make a statement which would set at ease those who are involved in the program in these various areas.
I expect that today's announcement, which has been public knowledge for a few days, will have removed some anxiety from the minds of the people in the groups concerned. It is a long awaited statement and one which possibly treats the top of the problem but not necessarily the root of it. We have heard the various members who have spoken here today mention the problems facing the gold mining industry in Canada. We have heard that it is the only commodity in this country in respect of which prices have been fixed since 1935. It would be redundant for me to talk about the problem producing a product on which the price is fixed and the costs are moving up all the time.
I should like to think for a moment that possibly part of the history of our Canada, our west and our north is based on gold. We heard the hon. member for the Cariboo talk about the exciting days when gold was discovered in the Cariboo. We have heard the hon. member for the Yukon talk about the Klondike. When I was a youngster acting as a caddy carrying golf clubs around a gold golf course, I recall carrying the golf bag of a famous Klondiker, Mike Mahoney, the man whom they say carried a piano over the Chilkoot Pass.
[DOT] (4:00 p.m.)
Mike was a fantastic person. He started mining with real interest in the Klondike. I think it is an historical fact, as pointed out by the hon. member for the Yukon, that he made a contribution to the growth and development of Canada to the extent of hundreds of millions of dollars.
At this stage we are confronted with a problem which has social and economic implications. We can go back for a considerable period of time to ascertain the effects of the closing of mines in western Quebec, northern Ontario, in the Yukon and in the Northwest Territories. We know there are plans on the part of governments, past and present, to step in at an appropriate time and provide some form of assistance if and when these communities are closed. I wonder if this is really good enough in light of present circumstances.
2674	COMMONS
Emergency Gold Mining Assistance Act
I have listened to various views expressed here today to the effect that we are not getting to the real root of the problem of gold mining in Canada. We have talked about the problems of manpower in terms of keeping the industry going. In my constituency, our two major mines are operating at 60 per cent capacity because of the lack of miners. It is not difficult to find men to work on the surface or in other capacities in the mill, but it is virtually impossible to find men who will go underground and mine in the true sense of the word.
Perhaps one reason for this difficulty relates to the development of our affluent society in which it is easier to make $600 or $700 per month working in some other line than it is to make $1,100 or $1,200 per month underground. At the same time, I am wondering whether we are missing an opportunity to employ our indigenous people to a greater extent in the production of gold. This suggestion is not really related to the question of increasing the assistance to gold mines, but it does seem to offer some solution to our problem.
I am thinking particularly of the nickel mine at Rankin Inlet in the Northwest Territories where approximately 125 trained miners were released when the mine ran out of economic ore. We have not taken the opportunity to transfer these miners to other communities. This is true to a lesser degree of the Eskimo people working in northern Manitoba. At one time there were between 25 and 30 employed in Yellowknife. Unfortunately, it was difficult to arrange for these people to participate in community life and own their own homes rather than renting houses which were substandard. It was difficult for their wives to become accepted in the community and learn to help in a modem metropolis. This is only part of the problem.
The only way we, as a nation, can determine whether we want this industry to continue is by examining the total effect of gold mining on our national economy. Such a study has not been made. It would include gathering information as to the total amount of bullion produced annually over the last 50 years, the effect of wages paid from the mining operation, the number of service industries and other individuals who depend upon gold mines for their livelihood. We should also consider the taxes paid by mining operations, as well as the personal income taxes paid by the miners and those in associated and related industries. We must also take into account the sales tax paid by the miners and

DEBATES	September 29, 1967
service industries such as aircraft companies, supply organizations and drilling companies.
Such a study should also cover the foreign exchange picture and the importance of gold to the national economy as well as the effect the profits of gold mining operations have upon further mineral development. I have in mind particularly the COMINCO operation which has spent a great deal of money in the Northwest Territories as a result of their mining operations in Yellowknife. That company has spent a great deal of money on exploration.
It is my feeling that we should also take a look at practices in other countries such as the United States, not only in terms of monetary and fiscal policy, but also to determine what practices are followed by that particular government.


Erik Nielsen: May I ask the hon. member a question at this point? Will he state for the record whether he is in favour of keeping the price of gold at $35 per ounce or increasing it?


Robert John (Bud) Orange: I can answer this question in two ways, and if you will bear with me for a few moments my feeling will become obvious to you. Perhaps, you have already made an assumption.
I should like to place on record a portion of an article which appeared in the September 18, 1967 edition of Newsweek. This article reflects to a certain extent the United States viewpoint. The article is entitled "Golden Harvest", and that does not refer to grain from the prairies. It states:
The government's search for new gold resources is beginning to pay off.
Recent underwater finds off the coast of Alaska have been described by Department of Interior officials as "better than we dared hope for".
New sampling techniques, they say, "are hitting the target every time".
Land-based efforts in Nevada have produced new ways to extract gold from low-grade ores. Mines not used because of the high cost of conventional methods may start producing again.
The final paragraph covers a subject about which I intend to find out more. It states:
Note: The government will soon announce a program to bankroll seekers of gold and other scarce minerals. It will boost its share of their costs from the present 50 per cent to a ratio of 75-25.
My point is that we should attempt to get the minister to undertake a study of the effect of this industry on the national economy. We have done this before in this country
September 29, 1967

in respect of other industries. We have heard figures that there are approximately 12,000 people employed in the industry, and I think such a study would be worthwhile. If you refer to information provided by the department, you find there are approximately 130,000 Canadians directly dependent on gold mining.
[DOT] (4:10 p.m.)
I realize there must be some reluctance on the part of many people to extend this program. I recognize that the program is not intended to assist gold mines in areas which are outside the range of existing gold mining communities. I have no argument on this point. However, I do have an argument in this respect. In gold producing areas it is obvious to many people that there is the potential for further mineral development.
It has often been said that if the price of gold were increased to what it should be according to 1935 standards, perhaps up to $100 an ounce, within 15 to 25 miles of Yellowknife there would be five more producing mines. I am not suggesting that all these mines would become economic ventures under present circumstances, but I cannot help wondering whether the limitations of the act are not restricting the development in this area and lessening the wealth of Canada.
Like others who have spoken today, I could not represent an area which is dependent to a great extent on the mineral industry without referring to the Carter commission. We all know that the Carter commission was brought into being by the previous government in 1962. This government has received the report of that commission. I believe all of us in the house, particularly members of the former administration as well as the present administration, now have an opportunity to look at the report from a somewhat dispassionate point of view. I fully support the urging of the hon. member for Yukon with regard to the three year tax depletion period. If companies involved in exploration and development did not have the opportunity to recover their capital costs, the mineral industry of Canada would largely disappear.
It is a fact that for every claim staked, for every man who goes into the bush to prospect for the first time, for every exploration and development program, only one in 25 is ever successful. I ask you, Mr. Chairman, how can this country afford to carry on real and viable exploration programs that will ultimately bring to this country the resources
DEBATES	2675
Emergency Gold Mining Assistance Act upon which we depend if we involve ourselves in some kind of tax program which will destroy the initiative of the little fellow, the juniors, as they call them, to go out and discover our resources?
Once a mine comes into production there is the question of the tax free period for exploration and pre-production expenses. If this program is not retained, the mineral industry in Canada will face serious consequences. Depletion and capital cost allowances are also affected. I shall say very little on this subject because much has already been said and said well. However, I wish to associate myself with the remarks made because I believe that if we wish to develop the primary industries of Canada, particularly the non-renewable resources of oil, gas and minerals, and want these resources to play an important part in developing our economy, we must be extremely careful how we handle the problem.
Reference has been made today to what happens when a community "folds" as a result either of the depletion of ore bodies or the impossibility of equating marketing with production costs. It has been suggested that some of the federal government programs, Canada manpower and others, might assist miners in moving from their present communities to others. Everybody knows that we could place the entire population of any particular mining community in northern Canada at any time.
However, where gold mining communities exist and are viable, and where they will continue for a considerable number of years, I believe that the federal government must consider ways of making these communities more interesting and better places in which to live. I should like to think that the Canadian Broadcasting Corporation's television package for the north will result in people in the industry being more content to live in isolated or remote areas. However, I am not sure that this is the only answer to the problem. I think in terms of the development of adequate housing. In the past, many companies have been somewhat reluctant to invest money in this area. One of the major mines in Yellowknife will next year build 25 homes exclusively for the use of miners. This is just one example. I am sure the company asked itself why they had not done this 20 years ago when they first went into production.
In conclusion, Mr. Chairman, I say to the minister that the extension which he announced today is a good move, but it is only
September 29, 1987
2676	COMMONS DEBATES
Emergency Gold Mining Assistance Act part of the answer. The whole answer is far more complex. It is fraught with social and economic problems. I hope that the Minister of Energy, Mines and Resources in consultation, particularly as far as the north is concerned, with his colleague the Minister of Indian Affairs and Northern Development, will consider these problems and endeavour to solve them. Then we can hope that the industry will have a future which will be an important part of our Canadian way of life.


Auguste Choquette: Mr. Chairman, I should like to ask the hon. member a question dealing with gold. Is he aware of the fact that the hon. member for Yukon, who has been absent from this house for a full year, has lost a golden opportunity to be a good member of parliament. The hon. member for Yukon has been absent for one year and has been making excuses to the house for his absence.


Mr. Pelers:: 
Murdo William Martin: Free enterprise for the poor and socialism for the rich.


William Arnold Peters: 
Maurice Rinfret: The hon. member for Brandon-Souris.


Auguste Choquette: The next premier of
Manitoba.


Walter Gilbert Dinsdale: We hear many speeches on many subjects in this chamber and as I rise to take part in this particular discussion I hear a prophecy from the lips of the hon. member for Lotbiniere. I make no comment at all in that regard because after many years experience in this house I have concluded that to indulge in prophecy in matters political is not a very worthwhile pursuit.
However, just before I turn to the subject of the resolution, perhaps I should add another word in reference to comments which have been made by the hon. member for Lotbiniere here this afternoon. I must say he is showing a considerably broader outlook on national affairs as illustrated by the comments he made this afternoon than I have noted hitherto. Until recent times, the hon. member has adopted a narrow focus on national issues which has tended to be divisive rather than expansive. This afternoon, however, he returned to the Yukon and the Northwest Territories, and now his vision has even crossed the formidable barrier of the Canadian Shield and he has fixed his attention on that wonderful and productive province, the province of Manitoba.


Auguste Choquette: You will be the next premier, I know that. But you had better be in the house, not absent, like the hon. member for Yukon.


Erik Nielsen: If the hon. member for Lotbiniere promises to stay away for a year I will go back home.


Maurice Rinfret: These arrangements will have to be made outside the house.


Walter Gilbert Dinsdale: Having begun my comments on that happy note, I should like to refer to
September 29, 1967
2680	COMMONS
Emergency Gold Mining Assistance Act the attitude the minister has taken in connection with this resolution. He introduced the resolution as a routine matter dealing with a routine problem. I must confess I was disappointed in the low key, gloomy, almost pessimistic approach the minister took in placing the subject matter before the house, particularly since he is the man responsible to the government of Canada for the promotion and development of one of our most important industries.
If I were asked to summarize and paraphrase his remarks I might do so in the following words: He felt that the gold mining industry was in the grip of outrageous fortune and there was nothing which the government of Canada could do about it. Therefore, to continue to paraphrase, he had decided to maintain the status quo. And you know what the old southern preacher replied when asked to say what "status quo" meant. He answered: "It is the mess we are in."
The minister's approach reminded me of the attitude which seemed to prevail in the house in connection with resource development programs prior to 1957 when it was felt that policies and programs which had been going on for years should remain undisturbed regardless of the consequences. I am disappointed in this attitude taken by the minister because the hon. gentleman is regarded as one of the dynamic personalities in the cabinet. His own personal background should, I think, put him on the side of the creators and the positive school of thought in relation to resource matters. I was interested to hear him say that in his family tree, way back to his grandfather, there is a record of contact with those stirring frontier days during the time of the trail of '98.


Erik Nielsen: The real Klondike.


Walter Gilbert Dinsdale: Yes. I do not think the hon. gentleman's grandfather would be very happy with his grandson's attitude toward these matters as expressed in his opening remarks during this debate. They reflected what one might call the typical Liberal and negative attitude which is evident across the whole spectrum of resource development.
This is even more surprising when we recall that the minister has just reurned from a visit north of latitude 60. I can say that nobody who crosses this important frontier in terms of latitude comes back without a new vision-or, at least, he should return with a new vision and a new vigour with regard to Canada's resource potential. Indeed, I suggest that my hon. friend from the Northwest


Territories should invite the hon. member for Lotbiniere to go north of latitude 60 himself, now that he is showing this wider perspective on national affairs, because I think he would catch the fever as well.


Erik Nielsen: 
Walter Gilbert Dinsdale: Apparently the inoculation did not take with the minister because, although in statements outside the chamber he has referred to the successful developments taking place in the Yukon and Northwest Territories, and to the new mines in particular, such as Pine Point, New Imperial, Granville, Cassiar Asbestos up at Clinton Creek, and so forth, this vision does not carry over into the field of the gold mining industry.
I think I should remind the minister that if the previous administration had assumed this pessimistic attitude toward resource potential we would not now be having these significant new mining developments coming into production. You cannot live on the development of the past. Each succeeding government has to initiate plans and programs of its own. It is fine to boast about the things we did when we were in office, but the succeeding government must pick up the torch and initiate new development itself.


Jean-Luc Pepin: There was no major initiative in that field during the past ten years. That was not due to a lack of ingenuity on the part of ministers. It was caused by the force of circumstances, the facts of life in the gold mining industry.


Walter Gilbert Dinsdale: I do not accept this pessimistic attitude. As I said, it is reminiscent of the attitude that prevailed before 1957 in these matters of development.


Jean-Luc Pepin: What did you do in 1958 except increase the subsidy by 25 per cent, which did not prevent the decline we are experiencing now? I am not blaming you.


Walter Gilbert Dinsdale: I am not going to debate-


Some hon. Members:: Oh, oh.


Walter Gilbert Dinsdale: Just one moment until I finish my statement. I am not going to debate, and in fact there is not time to debate the details of the problems that are all too prevalent in the gold mining industry. What I am criticizing is the attitude of the minister. Besides mentioning the problems of the gold
September 29, 1967	COMMONS DEBATES	2681
mining industry, the minister could have given a word of encouragement to it, and to mining as a whole.
At this very moment discussions are taking place in Rio de Janeiro which could change the whole prospects of the gold mining industry. I am no expert on international monetary policy, but at least I am this much in touch with the situation. I know that the decisions made back in 1944 at Bretton Woods with respect to the gold standard are about to be changed. We shall hear more about this when the Minister of Finance returns. We are now going to enter into a period during which we will gradually remove international monetary procedures from the gold standard and follow the policy enunciated by Lord Keynes in 1944.


Jean-Luc Pepin: One of your own colleagues spoke rather differently just a few hours ago.


Walter Gilbert Dinsdale: This is why I am not going to get into a detailed discussion on these points. Let me repeat that what I am decrying in my brief remarks is the total pessimism of the minister with regard to these matters.


Robert John (Bud) Orange: Would the hon. member say whether or not he is in favour of an increase in the price of gold?


Walter Gilbert Dinsdale: The hon. member for the Northwest Territories is entering an area which I said I was not going to discuss this afternoon. I referred briefly to the deliberations which are taking place in Rio de Janeiro.
It is not only in this are that the government assumes a pessimistic attitude. It assumes that attitude in other basic economic areas, such as housing, the problems in the wheat economy and so forth. It is almost as if we were in the hands of a mechanized economy and human ingenuity cannot do much about it.
When listening to the minister I hoped he would introduce some ray of hope, some gleam of light into the picture of doom and gloom that he so eloquently painted. This atmosphere of gloom hangs over the whole mining industry, and I am sure the minister is aware of it. My office has received a flood of briefs dealing with the recommendations by the Carter royal commission with respect to the mining industry.


Jean-Luc Pepin: Mr. Chairman, I think I am entitled to protest a little bit. I am not responsible for the conclusion of the Carter
Emergency Gold Mining Assistance Act commission. I did not call the Carter commission into being. Somebody else in the government of that time did. I think my hon. friend is unfair in not allowing us the right of receiving representations and objectively analysing the Carter report recommendations. The insinuation seems to be all along that we have accepted the Carter report recommendations.


Walter Gilbert Dinsdale: I think the minister is indulging in debate instead of asking a question. Perhaps he will wish to make up for the omission before the discussion ends this afternoon. What the mining industry is saying in its briefs is that the same conditions will prevail in other areas of mining unless the government makes some positive statement now on its attitude to the Carter royal commission recommendations. The government must provide leadership in these matters.
I do not have much time to deal with the point raised by the hon. member for Timis-kaming with regard to the problems of mining in the current economic situation. However, I do say the problems of the mining industry, although it is more sophisticated than it was in the days when the minister's grandfather crossed the Chilkoot Pass, are much the same today in terms of personal and physical hardship. I disagree quite forcefully with the statements made by the hon. member for Timiskaming during his attack on the big corporations and their role in the business of Canadian resource development. I have in my hands here an excellent brief from the British Columbia and Yukon Chamber of Mines which statistically gives the lie to the statements made about the role of the corporations.
It is still the individual prospector who is responsible for 99 per cent of the discoveries in the resource area.


William Arnold Peters: Would the hon. member permit a question? I have particular knowledge of only one mine in his area. Does he know the name of the prospector who made the discovery of the Thompson development that INCO undertook?


Walter Gilbert Dinsdale: I do not happen to have personal acquaintanceship with the particular prospector who discovered the Thompson mine, but I do know from my experience in the Yukon and the Northwest Territories that it is the individual grubstaking prospector who still does the basic groundwork in bringing in mining discoveries.
September 29. 1967

Emergency Gold Mining Assistance Act [DOT] (5:00 p.m.)
As I say, I am depending on the statistical and factual information provided by the British Columbia and Yukon Territory chamber of mines which I believe is just as knowledgeable in this field as is the hon. member for Timiskaming. The preamble of their brief states that the brief is supported by no fewer than 1,400 individual members. But, we are not here to debate this problem this afternoon.
Let me bring my remarks to a conclusion by saying that the minister should have seized the opportunity to speak on behalf not only of the gold mining industry but also the mining industry generally here this afternoon. He even went so far as to indulge in the old log rolling technique and buck passing technique which bogged down Canadian development in the early 1950's when it was said that these matters belonged to the provinces. As Harry Truman once said, I think we have concluded long ago that the buck has to stop somewhere and in this instance the buck has to stop with the Minister of Energy Mines and Resources for the government of Canada. The federal government, and its minister who is responsible for this area, must provide leadership.
The minister has the example of the resource minister's council which was designed to deal with this jurisdictional problem in the area of renewable resources. I know from personal contact with this area that the same process should apply in the field of nonrenewable resources. Unhappily, no initiative has been taken in this regard. I trust, before we conclude this discussion of what the minister has described as a routine matter dealing with a routine problem, that he will change his viewpoint and seize the opportunity to make a positive statement on behalf of the mining industry.


Mr. Blouin:: Mr. Chairman, as representative of the largest mining county in Canada, I deem it my duty to make a few observations on the bill under consideration.
A moment ago I was listening to the exchange between the fiery member for Lotbiniere (Mr. Choquette) and the equally hotheaded member for Yukon (Mr. Nielsen). The latter stated that his constituency was tremendously large, covering some 222 square miles, I think.

About 220,000 square miles.
[Mr. Dinsdale.l


Erik Nielsen: Two hundred and seven thousand square miles.


Gustave Blouin: Well, I do not want to roll you
over, but I have a constituency that has 375,000 square miles.


Walter Gilbert Dinsdale: How many square miles are there in Lotbiniere?


Gustave Blouin: That is something for the hon. member for Lotbiniere to answer. I have a population of about 128,000 people and 58,289 voters.


Erik Nielsen: The member's ancestors were also Yukoners.


Auguste Choquette: The hon. member for the Yukon has been absent for one year while the hon. member for Saguenay has been assiduous and has a greater population to represent. Shame on you.


Gustave Blouin: I think we are off the subject I was about to discuss.

Mr. Chairman, I wish to tell you that I have listened with a great deal of interest and sympathy to the previous speakers in whose constituencies the gold mining industry operates.
I come myself from a mining county and I know that each closing down of a mine is a catastrophe for some mining communities, which become ghost towns.
I would like to point out-much has been said about gold mining-that in my own county the situation is somewhat reversed: gold mines are not granted subventions -though I support the idea-it is the iron ore mining companies in my county which represent an important asset for the country as a whole.
Recently I read in a report from the Gulf of St. Lawrence Ore Producers Association that the iron ore operators were paying an average of $25 million per year to the federal treasury.
[DOT] (5:10 p.m.)
In my opinion, that is a considerable contribution and I should like to tell the minister, in return, that we have isolated and far off communities working in those mines, and that I do not see what the federal government can do to alleviate their necessarily lonely existence.
September 29, 1967
COMMONS DEBATES	2683
Not too long ago, I asked the Minister of Energy, Mines and Resources (Mr. Pepin) whether federal-provincial agreements to help develop that part of my riding by building access roads to natural resources were to be renewed. I asked him the following question:
Has the Minister of Energy, Mines and Resources renewed an agreement with the Quebec government for 1967-68 with respect to the construction of access roads to natural resources? In the affirmative, what is the share of the federal government under this agreement?
Of course, the answer I received was a categorical "No".
I know that not long ago, there was a meeting of the provincial ministers of mines and, if I am not mistaken, the renewal of this agreement was requested. Consequently, I would ask the minister to take note of this request, because the 50,000 citizens in my riding who are now working in the mining industry have no means of transportation, except by air. There is also the railway but, as everyone knows, that is for the mining operations.
Therefore, I ask the minister to take note of those remarks and to see to it that this agreement is renewed so that it will be possible to build access roads and get those people out of their isolation, a situation which, in my opinion, should not exist in 1967.
Mr. Chairman, I could keep on for quite a while because in our area, mining has a long history. We have rather large gold deposits which are untapped; we also have lead, zinc, copper as well as great asbestos deposits.
In fact, the Asbestos Corporation announced last year developments totalling $72 million to the Deception Bay mine. I am told, however, that those developments have been delayed as a result of the recommendations of the Carter report. The minister said a while ago that the Carter report merely contained recommendations. I hope that these are only recommendations which will not necessarily be accepted, because if the mining industry is not given some incentives, well, we, from mining constituencies, which I repeat, represent a considerable contribution to our national income, will suffer.
I heard a while ago some members talking about northwestern Quebec where my constituency is located. I also heard about subsidies, grants being asked for the coal mines and western wheat.
Today, I am not asking for mining subsidies but merely for an awareness of the tremendous wealth of northeastern Quebec. To
Emergency Gold Mining Assistance Act my mind, greater care should be taken of that pioneer population which works without cease to the development of our natural resources.
As I mentioned a while ago, the federal government derives a considerable income from those mining operations and, in return, we only ask that federal-provincial agreements should be signed to assist them.
Prospectors were also mentioned. I believe-since I am from a mining constituency-that all mines are discovered by prospectors. In my opinion, they should get much more encouragement than they actually do. There are rumours that they wander about the country, not even knowing what they are looking for. I happened to know several of them and I can tell you I am in a position to say that they are the ones who have discovered the mineral wealth of the constituency I represent, they are the ones who have paved the way for all those industries. I maintain that if the prospectors were given more encouragement, they could best tell us where there are ore fields in this country.
Mr. Chairman, I would not want to delay the approval of this legislation which I fully endorse. The idea is to extend this financial assistance for the next three years. I hope it will be granted, that gold mines throughout the country will survive, and that ghost towns will not rise where gold mines used to be.
I hope that gold production will continue and that ways to increase it will be found, but that other mining developments in Canada will not be neglected.


Howard Earl Johnston: Mr. Chairman, I do not intend to take up too much time this afternoon. I wish I could agree with the minister that this was just a mining bill which occupies exactly the same position as any other bill regarding coal, potash, tungsten or tin. However, we know that in today's economic world this simply is not the case. Administratively, from the point of view of the minister's department, perhaps we should all be prepared to look at the bill in that way. Nevertheless, to assume that attitude is to be unrealistic, and it is unrealistic on the part of the minister because he is part of the government which is responsible for monetary policy. This is a world wide responsibility because Canada is one of the big ten nations in the international monetary fund. One thing leads to another, and to pretend this afternoon that gold on today's world markets is no
September 29, 1967
2684	COMMONS
Emergency Gold Mining Assistance Act different than tungsten or tin is to be unrealistic. It is just as unrealistic as our foreign policy under which we are joining a committee designed to tighten up sanctions against Rhodesia. We can be unrealistic in a variety of ways.
This lack of realism is indicated very clearly by two headlines which appear on the same page of today's Globe and Mail. The first headline is "South Africa threatens to reduce gold supply". I am sure anyone who has gold mining stock in Canada was brightened this morning on reading that headline. I am sure there will be a flurry of activity to find out just what this may mean. This is not something that will be considered in isolation from the gold mining picture in Canada.
On the same page appears a headline which would indicate that the predicted gross national product of the United States is $835 billion. The reference is to just one nation, not the common market, not Europe, not Japan nor parts of South America, it is just one of the world's nations. When we read of a gross national product in those terms, we realize how little connection there is between gold and production in today's world. We know that new gold no longer goes to provide backing for money but into private hands throughout the world. There is still great hope in many parts of the world that the price of gold will be raised, and raised sharply.
[DOT] (5:20 p.m.)
Although we had the assurance from the minister that should this happen there will be a very rapid adjustment in the gold mining subsidies, I think there would be certain administrative problems in making that adjustment quite as rapidly as he predicts. I am not at all recommending a policy of raising the price of gold but there are many in today's economic world who feel it is inevitable and could well come considerably sooner than the minister has today predicted.


Jean-Luc Pepin: Mr. Chairman, could I ask the hon. member whether he thinks Canada is in a position to influence decisively the decision in these matters? Could I ask whether the hon. member believes that I could have based the bill we are presenting today on either the pro or the con of that debate?


Howard Earl Johnston: That is really not the question, Mr. Chairman. We like to think we can be quite influential, and pride ourselves that Canada has spoken out as a member of the


big ten. We know that our Minister of Finance is returning or has returned from Rio and has spent the last few months attending a series of very important conferences, where I am sure the voice of Canada has been heard.
Just the other day the Minister of Finance made a speech which was widely reported in Canadian newspapers. I am sure that any of his colleagues in the cabinet would be among the first to say that this speech had weight. I do not have to defend that position, and far be it from me to lessen the importance of Canada's voice, as the colleague of the Minister of Finance may be trying to do this afternoon.


Jean-Luc Pepin: Mr. Chairman, I am just pointing out that Canada is not the only country deciding what the policy should be when it comes to international matters.


Mr.   Johnsion@: I would not pretend for a moment that she was. All I am saying is that the Canadian public should have a better picture of what is involved, not only in gold mining but in the whole spectrum of our economy. The most ironical thing is that at the present time the economy of the free world is hazardously dependent upon gold from the Soviet union. What an ironical thing that is, when one realizes that their gold sales are one of the main ways in which gold enters the western economic system at the present time. Also, our economy is terribly dependent upon the supply of gold from the Union of South Africa, and no one would doubt the amount of gold that comes from that country.
Considering all the aspects of South Africa's world position, what a hazardous thing it is that the economy of the free world, and in effect the entire world, is dependent on these two sources of gold production. While newly produced gold may not enter into the backing of money, it does seem to provide a sort of mystic reassurance that people still need.
The headline today regarding the conference in Rio is, "New World Money Approved." We know that nothing of the kind has happened as yet and that it will be a long, long time before any such thing does happen. The August 25 issue of Life magazine contains an important article on gold written by John K. Jessup. He predicts that it will be 100 years before we reach the point where anything like a new creation of money that is not attached to gold will come into existence.
September 29, 1967

Post Office Act
We may well ask the question that other people have asked, namely, why this should be such a short term bill. Important questions arise out of what has been happening in the world monetary picture. These questions have a tremendous influence on this bill. While no one will vote against the bill-I am sure it will be passed by the house-it should not be passed under the guise of being like a bill to help the coal industry, or like a bill to open up a tungsten mine somewhere in Canada. The base upon which we operate is quite different.
I suspect that if the minister attempted tomorrow to shut down all the gold mines in this country because they are not economical, tremendously heavy pressure would be put upon this country by the nations of the big ten, the United States and a great many other sources to prevent that happening. We do not have any choice but to pass the Emergency Gold Mining Assistance Act; but we should clearly understand what the situation is and what we are doing when we extend this emergency measure.
Resolution reported and concurred in.
Mr. Pepin thereupon moved for leave to introduce Bill No. C-155, to amend the Emergency Gold Mining Assistance Act.
Motion agreed to and bill read the first time.


Mr. Cote (Longueuil):: Mr. Speaker, I think there is an understanding in the house that we suspend private members' hour and go ahead with the resolution standing in my name.


Mr. Deputy Speaker:: Is it agreed that the private members' hour for this sitting be suspended?


Some hon. Members:: Agreed.



POST OFFICE ACT


Joseph Julien Jean-Pierre Côté: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Post Office Act to increase by one cent the postage rates for letters posted in Canada for delivery in Canada; to provide an amended rate structure for newspapers and periodicals; and to provide further for certain changes in connection with the administration of the act, more especially in relation to tenders and contracts.
Motion agreed to and the house went into committee, Mr. Batten in the chair.


Joseph Julien Jean-Pierre Côté: Mr. Chairman, since I took over my responsibilities as Postmaster General, 21 months ago, the admiration I have for the department has tremendously increased. The system of communications thus made available to the country is a sort of cement which keeps together the bricks of the business world and the individuals.
The Post Office Department, as a government concern, has never been intended to be a profit-making concern-and my own research on the subject supports this. But the Canadian post office has never been intended either to operate at a loss. In other words, the ideal situation would be for the post office to maintain from one year to the other a fair balance between revenues and expenditures.
That ideal situation has been achieved nearly all the time. But, that rule of balance must not overshadow the obligation of the Post Office Department to contribute to the progress of Canada, to the daily life of its people and to the prestige of our country in the world.
That obligation, has also been assumed by the post office. The various branches of the department reach the most remote areas of the country. The speed with which mail is carried within Canada is an example to other postal administrations of the world, and the flow of printed matter which is carried by the post office is a credit to Canada, v/ithin its boundaries as well as abroad.
[DOT] (5:30 p.m.)

The resolution which has been placed before the house is designed to do four things. I know that some of them will not be popular but I assure the house that the legislation is responsible legislation.
First and most important are the sections of the legislation which govern the conditions and the rates for newspapers and periodicals. In the revision of the act, the statutory rate for the mailing of newspapers and periodicals is restricted to newspapers and periodicals which meet the new definition of a Canadian newspaper and of a Canadian periodical. The position of the rural newspapers is more clearly defined and the support through postal rates to these little publications is continued. Leaflets, organization publications, house organs and other such material will no longer be classed as second class mail but will be handled at the printed matter or third

September 29, 1967
Post Office Act
class rate. Publications which do not qualify as Canadian will come out of the second class statutory rates category.
With the passing of these sections the revenues from second class mail will be increased but, what is more important, the legislation governing this class of mail will be improved so that the administration of this part of the act will be more defensible and handling costs can be more readily apportioned to the various categories of publications for the purpose of determining postage rates.
The second major item is the increase in postage for first class mail or, as it is more commonly known, letter mail. The new rate on a letter for delivery within the postal area in which it is posted will be five cents for the first ounce or fraction of an ounce and three cents for each additional ounce or fraction of an ounce. The rate on a letter posted within one postal area for delivery in another postal area will be six cents for the first ounce or fraction of an ounce and four cents for each additional ounce or fraction of an ounce.
Concurrently with this rate change it is intended, in accordance with the authority granted under Section 6 of the Post Office Act, to abolish the domestic air mail letter rate and to provide air transmission for all domestic mail prepaid at the first class rate of postage, regardless of weight, providing delivery will be expedited.
Since 1954, only first class mail weighing up to eight ounces has received the all-up service which, by the way, is a postal service Canada pioneered. Now with this change, all first class mail in Canada will receive the all-up service. To business houses across the nation this will be welcome news because the ambiguity which existed between first class all-up and first class air mail will be eliminated. All first class mail in Canada will receive air transport at the one rate.
The change will also raise additional revenues to meet the increased costs and to help reduce the overall post office deficit, which is a factor in current operations.
The third change governs mail transportation arrangements. It reflects a modern day appreciation of the need for flexibility in making contractual arrangements and more equitable adjustments in payments to contractors.
The fourth revision deals with the general administration of the postal operation whereby it is necessary to give authorization to employees to administer oaths and receive affidavits, and where a more lucid statement

of authority is required for the Postmaster General to maintain a continuing group of post office investigators.
I will not elaborate further on the bill because it is very urgent that the bill be presented to the house. I want to assure the committee that when we study the bill, either on second reading or in the clause by clause stage, I will be able to provide the necessary information and answer all the questions asked. However, I think it is very urgent that this bill be presented as soon as possible and made public so as to allay the grave doubts which may be in the minds of the printers of newspapers and periodicals. As soon as the bill is presented, I will be able to provide to the house more information than I can now at the resolution stage.


Mr. Churchill:: The minister should have given us more information with regard to revenues and expenditures.


Mr. Cole (Longueuil):: I will be able to give the house more specific information with regard to revenues and deficits. As everyone knows, deficits on second class mail have increased substantially in the last two years while first class mail has always shown a profit. However, as hon. members will observe in the next estimates of my department, first class mail is starting to show a deficit. If the rate is increased on first class mail, it will not only cover the deficit in the first class mail and increase first class service but also cover some of the deficit in other classes of mail. Some people might say that those who will be most affected by the increase in the rate on first class mail will be the average citizen writing a few letters a month, but I should like to point out, and this may come as a surprise to many hon. members, that 75 per cent of all first class mail comes from business companies.
I think it will be much easier for hon. members and for the public in general to understand all the details of this bill when it is presented because the regulations and all they entail are very complicated. They are difficult even for post office employees to understand. I think hon. members will find there will be some substantial changes in second class mail.


Gordon Harvey Aiken: I should like to ask the minister a question for clarification. At the beginning of his statement he mentioned there were four main changes in the proposal. The first change involved newspapers and periodicals, the second one referred to an increase in first
September 29, 1967

class mail and the third one was with regard to mail transportation arrangements. I cannot recall what the fourth change was.


Joseph Julien Jean-Pierre Côté: The fourth change deals with the general administration of the postal operation which would allow postal employees to administer oaths and receive affidavits and permit the maintenance of a continuing group of post office investigators.


Mr. McCutcheon:: Mr. Chairman, I should like to thank the minister for his words of explanation, particularly in connection with first section to which he referred, although perhaps he was not as explicit as I should have liked him to be at this time. However, as he suggested, we will look at this matter very closely when we proceed to the second reading of the bill.
[DOT] (5:40 p.ra.)
I must say at the outset that this is a most shocking resolution to put before this committee, particularly this week since it comes on the heels of recent announcements that point up the woeful mismanagement of affairs in this country. I refer to the admission by the government that the wheat agreement was allowed to lapse and the poor taxpayer will now be called upon to subsidize western wheat, an unnecessary circumstance in the first place. Following on the heels of this avoidable misfortune, the government then suggested that per cent mortgage money was the only way to finance the building of houses.
Three times and out is a familiar cliche, Mr. Chairman, and we have now been presented with the third time. The poor defenceless public now has to face a 20 to 25 per cent hike in postal rates. And for what, Mr. Chairman? I submit it is for curtailed service in many instances and chiefly because of government mismanagement.
Let me say immediately that the poor Postmaster General alone is not responsible for this, because he does try to do his best. But just to prove how things have deteriorated in this country in the past three months, Mr. Chairman, let me refer to an extract from Hansard. As reported at page 1098 for June 2, 1967 the Postmaster General said:
I can tell hon. members that at the five-cent rate for letters we still make money. At four cents we still make some money, although we are on the verge of losing.
Three months later, Mr. Chairman, the minister is saying, in effect, that we are losing money on first class mail, which indicates a pretty rapid deterioration.
Post Office Act
I suggest, Mr. Chairman, that much of this resolution is couched in the vaguest of generalities. Nevertheless, the general public is going to be gouged again. The citizens of this country are being called upon, in effect, to subsidize the second class mail operations of the post office. How much more of this inflated cost of doing business, this inflated cost of living, can the Canadian public accept and still survive? We are being forced time and time again to dig deeper and deeper into our pockets, and I suggest that the people of Canada cannot take many more weeks like the past one.
As reported on the same page of Hansard, the minister went on to say in reference to second and third class mail charges:
At the second and third class rates we are losing about $30 million a year.
I suggest there should be more specific reference in this resolution to how the really serious difficulties of financing and operating the post office are going to be resolved. At this juncture we have no idea whether the rates to be attached to the losing part of the operation, that is second and third class mail, are being increased at all. Are they going to be increased proportionately more than the increases applied to that segment of the operation that is self-supporting? According to the statement of the Postmaster General last June, certain elements of his department's operations are profitable. Are rates for second class mail to be reduced?
I do not wish to sound facetious, Mr. Chairman, and I do not intend to be facetious, but my point is this. The resolution refers to increasing by one cent the postage rates for letters posted in Canada for delivery in Canada, and to providing an amended rate structure for newspapers and periodicals. What does "an amended rate structure" mean? Is the rate structure to be amended upwards or downwards? The minister has not spelt that out in the house. The only information we have about post office affairs is in some press releases; but, all we have to go on in this house is the resolution.
Now, Mr. Chairman, if I were a suspicious person, which I assure you I am not, I might assume the word "amended" meant to make a minor change in second class rates, and an attempt to shore up the balance sheet by overcharging the unorganized general public. By "unorganized" I refer to those not represented by strong association lobbies, unlike the publishers. I refer to a body akin, say, to the Manufacturers' Association, which speaks

September 29, 1967
Post Office Act
for its members; and I am assuming, Mr. Chairman, that there must be a newspaper and magazine publishers association.
Incidentally, Mr. Chairman, there is no reference in the resolution to third class mail. I would compliment the post office for the nice way they have of describing the junk that you and I as householders receive in our mailbox almost daily. I refer to advertisements for everything from magazine subscriptions to soap and detergents. Yes, periodically we even receive material from political parties. But there is not a word in the resolution about this segment of the mail.


Joseph Julien Jean-Pierre Côté: The hon. member realizes that Christmas cards come under third class mail?


Malcolm Wallace McCutcheon: Yes, but we do not know how large of a deficit is accumulated as a result of this particular segment of the operation of his department.
Another point that causes me concern is this. The resolution commences:
That it is expedient to introduce a measure to amend the Post Office Act to increase by one cent the postage rates for letters posted in Canada for delivery in Canada;-
That means there must be an international agreement or something on postal rates to which Canada must adhere, and therefore we are powerless to change the rate until another postal convention agreement is signed. I have no idea when such a convention will be convened, and from what the minister said this spring I believe the present agreement has some considerable time to run. This further points up how rapidly our internal conditions have deteriorated.
May I just refer to the United States postal rates for first class mail. Although as of this morning there had been no change, there has been some suggestion that their five cent letter rate will be changed in the not too distant future. But the charge made for third class mail is almost the same as for first class mail. Obviously, the United States authorities have concluded that if advertisers find it profitable to do so, they will continue to use this service. The United States post office is not asking the general public to subsidize that service, and this is as it should be.
I should just like to refer to the London Free Press, an issue of recent date. The article states that the post office committee in the United States has brought in a new bill which provides for a 21 per cent rate boost for second class mail.

[DOT] (5:50 p.m.)
This would take effect gradually over a period of three years. Current United States rates on second class mail, including newspapers and magazines, are 4 cents for the first two ounces and 1 cent for each additional ounce. This is the point I was making. The only people who face increases spelled out exactly for them in this country are the little people, the ordinary citizens who do not have huge lobbies working for them.
The rest of the resolution calls for changes in the administration of the act, more especially in relation to tenders and contracts. We have suggested that certain procedures should be changed in this area over the years and we shall look with interest to find out whether some of these suggestions have been included. But I think it is now time that we came to grips with the ever increasing problem of the cost of living. Here is another classic example of the inability of the government to deal satisfactorily with the financial affairs of this country.
It may be said that one cent is a small amount, and I admit that it is. But the principle here is wrong, the principle that the little people of the country should have their burdens spelled out in unmistakable terms while we are not nearly so emphatic where strong organizations are concerned.
I commend the United States post office committee which has looked at this problem from all angles. Traditionally their second class rates have been higher than ours, but they have spelled out what their increase will be. I notice the minister shaking his head. I hope he is shaking it in agreement.
May I conclude by recalling what the minister said on July 2, 1967. At that time he said because our rates are a little lower than rates in the United States and because we have a better service, many magazines printed in the United States are brought into Canada by truck for mailing here. If United States rates go up proportionately more than our own, I submit we shall have quite a line-up of trucks at the border and I wonder how much we shall lose on this operation.
I should like to make the strongest plea at my command to the government that before the second reading of this bill the whole matter be referred to a committee of the house for the closest scrutiny. I suggest that in this way, with a new, non-partisan, constructive approach to our problems, we could help the government arrange a much more satisfactory solution.
September 29, 1967


Barry Mather: I do not rise with the intention of making a speech but to ask a question. Our attitude toward this proposal to increase the rate on first class mail will obviously be influenced by the proposals which the minister has in mind with regard to second class mail. Why can the minister not give this information to the committee so that we may be in a better position to judge the virtues of the other proposal. He has spelled out the increase in the first class rate. Why not for the second class rate.


Joseph Julien Jean-Pierre Côté: The question of increases in rates for second class mail is more complicated than an increase in the cost of first class mail. Obviously we cannot increase rates by less than one cent, because we cannot begin issuing stamps of, say, half a cent denomination. Thus the increase in the cost of first class mail has to be one cent.
As far as second class mail is concerned there are many other factors that can be considered, various directions in which increases can be made, some paying a little more and others, possibly, a little less. As far as daily newspapers are concerned, they are now paying two and a half cents a pound for news and four cents a pound for advertising. The increase on the advertising portion will be bigger.
Some of the magazines or newspapers now enjoying second class statutory rates will cease to have the benefit of these rates because we are working out a new definition of a Canadian newspaper or a Canadian periodical. The result will be, in effect, an increase of more than the one cent. Under the new definition of a weekly newspaper, a weekly newspaper will be a rural paper with a publication figure of less than 10,000. Newspapers with circulation of more than 10,000 will come into another category; there are free zones for the weeklies, and all sorts of arrangements, but I can tell you that there will be increases in second class mail rates.
We are starting right now to have a deficit on first class mail. Our estimates forecast, with regard to the first class, indicates a deficit of over $5 million right now. I can tell hon. members that next year the deficit will be up to $7.7 million, and costs are continuing to rise. In these circumstances, do hon. members opposite not feel it is time to raise the rates?
Whenever we come to increase the salaries of our personnel we are told the amount offered is not enough. We need revenues.
Post Office Act
Transportation costs have risen. There has been no increase in second class rates since 1951, I believe, and no increase in first class rates since 1954.
The hon. member who had just made his speech suggested that the ordinary citizen would have to pay the bulk of the revenue to be provided by this increase. Let me tell him that the average citizen spends on first class mail service of the post office $1.82 a year; the increase will bring this up to $2.19, so the ordinary citizen will be paying 37 cents a year more. But consider the position of the Bell Telephone Company, for example, which has telephones in every home and sends a bill to every house once a month. What about companies and corporations of this kind? It is they who will really be carrying the burden.
I shall have many explanations to give, Mr. Chairman, when the bill is before us and I think it is important that we should come to that stage as soon as possible.


Barry Mather: If the minister cannot give us details of the increases in the second class rates, can he not indicate the amount which the new rates will provide? I understand that the deficit on second class mail is about $28 million. Does the minister plan to increase revenues by that amount?


Joseph Julien Jean-Pierre Côté: September 29, 1967
Business of the House BUSINESS OF THE HOUSE Mr. Churchill: Mr. Speaker, I wonder if anybody from the disorganized cabinet on the treasury benches knows specifically what is the business of the house for next week?


Joseph Julien Jean-Pierre Côté: I understand that on Monday we will go into a supply motion and, if it lasts for two days, the next three days will be spent on the budget debate.
At 6.03 p.m. the house adjourned, without question put, pursuant to standing order.

Monday, October 2, 1967