1967-06-14

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

Mr. Aiken: 1.	Have the maintenance and operating expenses of the Welland ship canal, per vessel transit, increased or decreased since 1959 and, if so, by how much?
2.	What is the reason for such increase or decrease?


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: The St. Lawrence seaway authority advises as follows: 1. Yes, from $339 in 1960 to $1,082 in 1966.
2. The reasons for the increase are: (a) Increases in payrolls and employee benefits arising from collective agreements negotiated in 1959, 1961, 1964 and 1966. (b) Increases in miscellaneous costs reflecting generally increasing prices, including grants in lieu of municipal taxes at prevailing rates, (c) Following a long period during which maintenance had been kept to a minimum, the need to relieve increasing congestion and to keep traffic moving, which dictated a major improvement program, involving both capital and non-capital expenditures, (d) Increasing traffic, characterized by substantially larger cargoes per transit. This dictated a traffic survey by expert consultants to identify critical areas requiring improvements. This survey, which had been substantially completed by the end of 1966, together with the improvement program in (b) above, produced a 35 per cent increase in canal capacity.


CONSTRUCTION OF BRIDGE, P.E.I. NATIONAL PARK
[Stage Direction]
Question No. 107
Mr. Macquarrie:: 1.	Dees the government intend to construct a bridge across Rustico harbour as a part of the gulf shore highway of the P.E.I. national park?
2.	If so, when is construction scheduled to begin?
3.	What reason or reasons prompted the delay in the construction of this portion of the gulf shore highway?
Hon. Arthur Laing (Minister of Indian Affairs and Northern Development!: 1. No
decision has been reached at this time on a bridge across Rustico harbour pending the results of current engineering investigations being carried out to determine if a bridge is technically sound and advisable. Also, an analysis will be necessary to decide if the benefits derived from such a bridge will equal the cost involved and any effect it may have on the natural and recreational features of the area.
2.	Not applicable.
3.	See part 1.


NAVIGATIONAL AIDS ON &quot;CAPE BONNIE&quot;
Mr. McCleave: On the morning that the Cape Bonnie ran aground, were all of the following navigational aids in complete operation at all relevant times (a) lights on Sambro Island, Chebucto Head, Devils Island and Maugher beach (b) fog signal on Sambro Island (c) fog signal at Chebucto Head and on Maugher beach (d) radio beacon on Sambro Island t e) radio marker beacon on Hartlen Point (f) Loran navigation system (g) Decca navigation system?


James Allen (Jim) Byrne: (a), (b), (c), (d), (e), (f), and (g), yes.
Note: With respect to (g), while the Decca navigation system was reported as unreliable between 1.25 and 1.45 a.m. on the morning of February 21, a navigation warning was broadcast at 2.08 indicating that unreliability had occurred during that period; moreover, the system became fully operational again well before the presumed time of the accident and it is not considered that the short period of unreliability could have had any bearing on the accident.


UNDERWATER RIGHTS, ST. PIERRE AND MIQUELON
Mr. Godin: 1.	Is Canada now involved in negotiations with France concerning underwater rights in St. Pierre and Miquelon and, if so, what precisely are the claims made by (a) France (b) Canada?
2.	How large is the area under dispute?


Hon. Paul Martin (Secretary of Stale for External Affairs):: 1. Canada has been engaged

June 14, 1967
Questions
in discussions with France for approximately one year with respect to the areas of Canadian and French jurisdiction over the continental shelf south of Newfoundland and more particularly in the vicinity of the St. Pierre and Miquelon islands. The positions of both countries are based on different interpretations of the applicable principles of international law. As negotiations have not yet been brought to a conclusion, it would be contrary to practice to divulge, at this time, the details of the respective claims of Canada and France with regard to this matter.
2. See answer 1 above.


AGRICULTURAL AND NON-AGRICULTURAL LABOUR FORCES
Mr. Bell (Carleton): 1.	Has there been a decline in the agricultural labour force during each of the years 1963 to 1966 inclusive and, if so, what has been that decline in numbers?
2.	During each of these years, what has been the increase in the non-agricuitural labour force?
2. Non-agricultural labour force, annual averages 1963-1966 Canada:
	Total
1963	6,086,000
1964	6,292,000
1965	6,540,000
1966	6,869,000
Increase from previous year
206,000
248.000
329.000


HYDROGRAPHIC SURVEY OF LAKE WINNIPEG
Mr. Stefanson: Has the survey on lake Winnipeg being undertaken by the Canadian Hydrographic Service been re-established as of this year and, if so (a) how large a crew will be working (b) what is the estimated cost (c) how long will it take to complete?


Mr. Jack Davis (Parliamentary Secretary to Minister of Energy, Mines and Resources):: The hydrographic survey of lake Winnipeg has not been re-established this year and therefore (a), (b) and (c) are not applicable. However, it should be noted that a reconnaissance survey of the Red river from Winnipeg to lake Winnipeg will be carried out by a small sub-party during this summer to enable a new small craft chart to be prepared.


Mr. Jean-Charles Cantin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. Agricultural labour force, annual averages 1963-1966, Canada:
	Total	Decrease from previous year
1963	663,000	
1964	641,000	22,0001965	602,000	39,0001966	551,000	51,000


FARM MACHINERY SYNDICATES
Mr. Dinsdale: 1.	How many farm machinery syndicates have been established in (a) each province (b) for each year since the legislation was passed?
2.	How many of these farm machinery syndicate groups are still operating in each province?


Hon. J. J. Greene (Minister of Agriculture):: The Farm Credit Corporation advises as follows:
Farm machinery syndicates (a) and (b).
1. Province	Jan. 1/65 to Mar. 31/65	1965-66	1966-67	April 1/67 to June 1/67	Total	2. Still operatingB.C.	1	3	3	1	8	8Alta.	10	42	29	10	91	90Sask.	7	17	8	-	32	30Man.	1	12	11	-	24	24Ont.	2	11	21	4	38	38Que.	1	12	23	7	43	43N.B.	-	-	1	-	1	1N.S.	-	-	1	-	1	1P.E.I.	-	1	-	-	1	1Nfld.	-	-	-	-	-	-TOTAL	22	98	97	22	239	236*
*Three syndicates have repaid their loans, but it is not known if they are continuing their syndicate arrangements.

June 14, 1967


C.J.L. FOUNDATION, REXDALE, ONT.
Mr. Schreyer: 1.	Is the C.J.L. Foundation, Box 151, Rexdale, Ontario, registered with the Department of National Revenue as a charitable institution or organization?
2.	Are all contributions made to the above noted organization regarded as deductible for income tax purposes?


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: 1. The C.J.L. Foundation, Box 151, Rexdale, Ontario, is not registered with the Department of National Revenue as a charitable institution or organization.
2.	Contributions made to the above noted organization are not regarded as deductible for income tax purposes.


MANPOWER CENTRES VACANCIES AND PLACEMENTS
Mr. Fawcett: 1.	What was the total number of vacancies listed by employers with the Canada manpower centres of the Department of Manpower and Immigration during the period from January 1, 1967, to May 31, 1967?
2.	What was the total number of workers placed in employment by the Canada manpower centres of the Department of Manpower and Immigration during the period from January 1, 1967, to May 31, 1967?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: 1.
The total number of vacancies listed by employers with the Canada manpower centres of the Department of Manpower and Immigration is not yet available for the month of May, 1967. Data for the period January 1, 1967 to April 30, 1967 is available; the total number of vacancies listed during this period was 385,313.
2. The total number of workers placed in employment by the Canada manpower centres during May 1967 is also not available at the present time. The total number of workers placed for the period January 1, 1967 to April 30, 1967 was 271,946.


EMPLOYMENT SERVICE VACANCIES AND PLACEMENTS
Mr. Fawcett: 1. What was the total number of vacancies listed by employers with officers of the national employment service during the period from January 1, 1965, to May 31, 1965?
Questions
2. What was the total number of workers placed in employment by officers of the national employment service during the period from January I, 1965, to May 31, 1965?


John Carr Munro: 1. The total number of vacancies listed by employers with the local offices of the National Employment Service during the period January 1, 1965 to May 31, 1965 was 600,694. The total of vacancies to April 30, 1965 was 450,225.
2. The total number of workers placed in employment by the local offices of the National Employment Service during the period January 1, 1965 to May 31, 1965 was 448,152. The total of placements to April 30, 1965 was 334,291.


C.M.H.C. GRANTS FOR POSTGRADUATE STUDIES
Mr. Allard: Are scholarships and grants distributed by Central Mortgage and Housing Corporation to promote postgraduate studies and research in the field of housing, town planning and related subjects in Canadian universities and, if so (a) for the years 1966 and 1967, how many scholarships were granted in each province and what is the total value of these scholarships (b) in the province of Quebec, what universities registered the recipients of such awards and in what proportion?


Hon. J. R. Nicholson (Minister of Labour):: (a)	1966	1967
Alberta Number of awards		3
Total value	-	$ 9,000British Columbia Number of awards	12	9Total value	$35,850	$29,650Manitoba Number of awards	5	5Total value	$13,650	$14,650New Brunswick Number of awards	Total value	-	-Newfoundland Number of awards	Total value	-	-Nova Scotia Number of awards	1	1Total value	$ 650	$ 650Ontario Number of awards	21	24Total value	$69,650	$92,650
June 14, 1967
Questions
(a)	1966
Prince Edward Island Number of awards	-
Total value	-
Quebec
Number of awards	20
Total value	$53,850
Saskatchewan
Number of awards	-
Total value	-
(b)	1966
University of Montreal Number of awards	16
Total value	$45,550
Laval University
Number of awards	1
Total value	$	650
McGill University Number of awards	3
Total value	$ 7,650
University of Sherbrooke Number of awards Total value
14

$	650


$11,650 $ 3,000 GREEK VIOLATION OF EUROPEAN HUMAN RIGHTS COMMISSION
Mr. Ormision: Was the government requested by the international commission of jurists in Geneva on May 13, 1967, to investigate the alleged violation by Greece of the European human rights commission.


Paul Joseph James Martin: Mr. Speaker, the answer to this question is no. It is my understanding that a letter dated May 13, 1967 was addressed by the secretary general of the international commission of jurists to the European governments which are high contracting parties to the European convention for the protection of human rights and fundamental freedoms and to members of the council of Europe. As Canada is not a member of either of these bodies, it was not included among the addressees.


SEASONAL FARM LABOUR
Mr. Danforth: 1.	From what countries were seasonal farm labourers brought into Canada under mutual agreement in 1966 and 1967?
2.	What were the total number of seasonal workers brought into Canada in 1966 and 1967?
3.	With what countries has the Canadian Department of Manpower and Immigration held direct or indirect negotiations regarding availability of seasonal farm help for Canada?
4.	If Bermuda and the Bahamas have not been included, what are the reasons for their exclusion?


John Carr Munro: 1. In 1966 seasonal farm labourers were brought to Canada from U.S.A. and Jamaica. In 1967 it is expected workers will be coming from U.S.A., Jamaica, Trinidad and Tobago and Barbados.
2.	The total number of seasonal workers brought into Canada in 1966 was 2,808, with 2,544 from U.S.A. and 264 from Jamaica. The total number of seasonal workers brought into Canada in 1967 so far is 148.
3.	The Canadian Department of Manpower and Immigration has held negotiations with U.S.A., Jamaica, Trinidad and Tobago and Barbados regarding availability of seasonal farm help for Canada.
4.	The 1966 movement of workers from Jamaica was an experiment. It was decided this year to broaden the experiment to the two next largest source countries in the Caribbean. A wider extension would have imposed excessive problems of administration. But it has been made clear that, apart from the movement organized by governments, the department will co-operate with employers who, through their own arrangements, hire individual seasonal workers in other commonwealth or French Caribbean territories provided they meet the same terms as those stipulated for the organized movement. If the 1967 movement is successful, and such seasonal labour continues to be required in considerable numbers in 1968, a further extension of the source countries for the organized movement will be considered.


UNEMPLOYMENT INSURANCE FUND
Mr. Crossman: What was the amount to the credit of the unemployment insurance fund on March 31 of each year from 1957 to 1967 inclusive?


John Robert (Jack) Nicholson: Year	Balance in fund
1957	$874,574,651.66
1958	744,200,124.87
1959	499,811,157.51
1960	365,892,232.95
1961	184,684,852.66
1962	66,598,051.79
1963	9,692,828.35
1964	874,880.11
1965	40,496,762.98
1966	141,483,169.21
1967	253,912,564.00	(interim)
June 14, 1967	COMMONS



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Orange: In the estimates ol the Department of Indian Affairs and Northern Development, vote 25 under "Administration-Construction or acquisition of buildings, works, lands and equipment", what is the breakdown of construction projects proposed in 1067-68 for this item, indicating (a) where they are to be located (b) when they will start (c) the completion date for each project?
Return tabled.


INDIAN AFFAIRS CONSTRUCTION PROJECTS
Mr. Orange: In the estimates of the Department of Indian Affairs and Northern Development, vote 25 under "Regional development

construction or acquisition of buildings, works, land and equipment", what is the breakdown of construction projects proposed in 1967-68 for this item, indicating (a) where they are to be located (b) when they will start (c) the completion date for each project?
Return tabled.


INDIAN AFFAIRS EDUCATIONAL CONSTRUCTION PROJECTS
Mr. Orange: In the estimates of the Department of Indian Affairs and Northern Development, vote 25 under "Education-construction or acquisition of buildings, works, land and equipment", what is the breakdown of construction projects proposed in 1967-68 for this item, indicating (a) where they are to be located (b) when they will start (c) the completion date for each project?
Return tabled.



MOTIONS FOR PAPERS

Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, notice of motion for production of papers No. 14 is acceptable to the government.
I ask, sir, that the remaining notices of motions be allowed to stand.



TRANSFER OF INDIAN AFFAIRS OFFICE, AMOS, QUE.

[Stage Direction]
Motion No. 14-Mr. Laprise:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house copies of all papers or correspondence between the Department of Indian Affairs and Northern Development and all municipal corporations, public agencies, Indian bands and private individuals, concerning the transfer from Amos to Val d'Or of the district office of the Indian affairs general branch.
Motion agreed to.
DEBATES	1511
Inquiries of the Ministry UNITED NATIONS

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, would the Prime Minister bring the house up to date with regard to the discussions at the United Nations? In particular would he say what significance there is in the fact that France is apparently supporting the U.S.S.R. in the current resolution before the security council; and would the Prime Minister say whether consideration is now being given to the creation of an armed force to maintain the equilibrium in those areas in the Middle East that were recently at war?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, as my right hon. friend knows the security council was meeting this morning to discuss the resolution of the U.S.S.R. which would have provided for condemnation of Israel and the withdrawal of her forces behind the armistice lines in force before the conflict began a week ago. I am informed that this resolution did not carry. I think it was voted on just before we came into the house, at about 2.20 or 2.25, but it did not carry. I am not sure of the position taken by France on that resolution. There is no information I have which would indicate that France supported the U.S.S.R., but I will know that in a few minutes.
There has been no discussion yet at the security council about the establishment of a United Nations presence, though there has been a good deal of discussion behind the scenes among the members of the council about the desirability of establishing such a presence in the area at this time. I am not sure what the security council will do this afternoon. There are two other resolutions before the council, one by the United States calling for discussions among the parties concerned looking toward the conclusion of arrangements for the withdrawal of the armed forces and the establishment of peace in the Middle East, and the Canadian resolution, which has been before the council for some days, requesting the president of the council and the secretary general to take the necessary measures to bring about effective compliance with the cease fire.
June 14, 1967

Inquiries of the Ministry
I believe, Mr. Speaker, subject to confirmation-because I do not know what the security council will decide

the council will probably be discussing the United States resolution this afternoon. Whether it would be desirable to bring forward the Canadian resolution for discussion and decision will depend, of course, on developments. It is our view that only after the security council has exhausted its consideration of all these resolutions and any other action it might take would it be appropriate to have a meeting of the general assembly on the subject, as already proposed by the Soviet delegation.


John George Diefenbaker: Would the Prime Minister say whether in the speech delivered by the Secretary of State for External Affairs at the NATO meeting, including the page that flew out the window, the guarantee that Canada asks that Israel will not again be subjected to unilateral intimidation included as well the provision that the gulf of Aqaba shall not again be closed? Is that part of the proposition that Canada has in mind, as envisaged by the Secretary of State for External Affairs?


Lester Bowles Pearson: Mr. Speaker, I have seen the speech of the Secretary of State for External Affairs.


Mr. Knowles:: All of it?


Lester Bowles Pearson: All of it, including the page that fell out the window. It just so happens that sometimes a page that falls out the window gets more publicity than other more important pages in a speech.


John George Diefenbaker: Great was the fall thereof.


Lester Bowles Pearson: The Secretary of State for External Affairs put forward ideas which have already been put forward in the house, and I am sure he would be very glad indeed to have this statement tabled. Perhaps that could be done tomorrow morning.
I think it is a little premature at this stage, while discussions are going on, to indicate the exact measures, the international guarantees, which Israel has the right to require for her own security and for the security of the waters leading to the gulf of Aqaba. These two principles which I am sure all members of the house have felt to be very important indeed and should be subject to international arrangements, if possible with international commitments, if we are to ask Israel not to rely on her own strength for her own security.
[Mr. Pearson.1


Mr. T. C. Douglas (Burnaby-Coquitlam):: May I ask the right hon. Prime Minister two supplementary questions. The first is, how did the Canadian representative at the UN security council vote on the resolution which was considered this morning? My second question is with respect to the speech at the NATO conference by the Secretary of State for External Affairs, who made references to guarantees that should be given by the permanent members of the security council. May I ask the Prime Minister whether he would not agree that any guarantees which are given ought to have the support and the prestige of the entire security council rather than the support merely of the big four, if those guarantees are to carry some weight in the years ahead.


Lester Bowles Pearson: Mr. Speaker, so far as the guarantees of the four permanent members of the security council are concerned, I think it is essential, if there is to be any international guarantee, that it should include these four, of course. As my hon. friend knows, it was in 1950 I think when there was a tripartite guarantee of the territorial integrity of Israel. That was agreed on outside the United Nations and did not prove very effective in the circumstances.
While I feel, as I am sure my hon. friend feels, it is of vital importance that these four countries should participate in any guarantee, it would be even better if they participated as four members of the security council and of the United Nations. I hope it can be done in that way.
So far as the Canadian vote that took place at 2.25 today is concerned, I can only say this; that they did not vote for the Soviet resolution.


Mr. Churchill:: Did they abstain?


Thomas Clement (Tommy) Douglas: A further supplementary
question, Mr. Speaker. Am I to understand from the Prime Minister's answer that the Canadian delegate abstained? If so, why?


Lester Bowles Pearson: I cannot answer that question, but I do know that in discussions yesterday certain members were opposed to this resolution in most of its parts but felt there were some parts that should not be opposed. They decided that in the circumstances they would abstain on the resolution. Whether that was the decision taken this morning I do not know. I apologize for not being up to date on my information, but the voting only took place at 2.25.
June 14, 19S7	COMMONS


Thomas Clement (Tommy) Douglas: A further supplementary
question, Mr. Speaker. May I ask the Prime Minister whether the Canadian representative is not acting on instructions from the government of Canada? What instructions were given to the Canadian delegate?


Lester Bowles Pearson: Yes, Mr. Speaker, he is acting on instructions from the government of Canada. But as I am sure my hon. friend will appreciate, in present circumstances the Canadian representative, subject to decisions in principle that have been taken, must be given a certain leeway in carrying them out.


Some hon. Members:: Hear, hear.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister and ask if any discussions so far have been held regarding the early reopening of the Suez canal; or must this await a settlement of the other issues that are involved?


Lester Bowles Pearson: I do not know, Mr. Speaker, whether there have been any discussions among the governments most concerned about the reopening of the Suez canal which has been blocked, as my hon. friend knows, by ships which have been sunk in the canal. I am sure those countries that are most concerned, which would be the countries that used the canal most, will be holding discussions. I cannot at the moment say whether these discussions have begun. I do not know of any discussions which have taken place within the UN on this subject.


John George Diefenbaker: A supplementary question. Yesterday I asked the Prime Minister a question regarding certain ships and he said he would endeavour to ascertain the position. Has he been able to do so?


Lester Bowles Pearson: We have asked our representative in the United Arab Republic to get us all the information he can about those ships. We know, of course, where they are, but we are trying to get information about the condition of the men on the ships. We have not got that information yet.


Mr. W. B. Nesbitt (Oxford):: A related question to the Prime Minister. Would the right hon. gentleman give consideration to suggesting to the government of Israel that in view of the present Israeli military position,
DEBATES	1513
Inquiries of the Ministry that country might make a magnanimous gesture by offering to help train the large group of Arab refugees to assist in their resettlement? And will Canada suggest to the other countries with which we are associated that we might help to finance such an operation should it be approved?


Lester Bowles Pearson: We have already begun, together with other countries in the United Nations, to consider this aspect of the problem, one which was brought up yesterday in this house. I cannot say much more than I said yesterday, except that if any arrangement of this kind is made we shall certainly have to participate not only in terms of money but in terms of accepting some of these refugees.


Lester Bowles Pearson: Mr. Speaker, may I add supplementary information to the answer given to the question asked about the voting which took place a few moments ago in New York on the resolution in question, the Soviet resolution. On the paragraph dealing with condemnation of Israel there were four members of the council in favour of that paragraph, the Soviet union, Bulgaria, Mali and India. All the other members of the council abstained. On the paragraph dealing with withdrawal by Israel there were six members in favour, the four I have mentioned plus Nigeria and one other, and the remaining nine members of the council abstained.



APPLICATION TO STAFF OF BILINGUAL BONUS

[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister concerning the 7 per cent bonus for bilingual personnel.
Would the right hon. Prime Minister tell the house what is happening with regard to implementation and when the officers and secretaries of the House of Commons will receive this bonus?


Mr. Speaker:: The first question should be placed on the order paper and the second should be put to the Chair in the usual manner.
June 14, 1967

Inquiries of the Ministry



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: I wish to address a question to the Minister of Labour. In view of the opinion expressed by Professor Vincent Bladen, whose studies and recommendations provided the foundation for the Canada-United States auto trade pact, that more generous unemployment insurance benefits should be substituted for the special assistance known as TAB, now available to those who lose their jobs as a result of this pact, would the minister say whether he is prepared to give this suggestion favourable consideration?


John Robert (Jack) Nicholson: may say, Mr. Speaker, that I read with great interest a newspaper report of Professor Bladen's views. When a man with his background makes a suggestion of this kind I can assure the hon. member it will receive serious and prompt consideration.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
John Robert (Jack) Nicholson: May I take this opportunity to deal with a question raised yesterday by the Leader of the Opposition with reference to a telegram that he stated had been sent to me by Mr. Leonard McLaughlin of the S.I.U. threatening a strike. The right hon. gentleman asked what action, if any, the government was taking to prevent a possible work stoppage.
I can advise the house that while I was on my way back from the I.L.O. conference in Geneva earlier in the week a telegram from Mr, McLaughlin was received in my office alleging that Canada Steamship Lines, with whom his organization was engaged in a contractual dispute, had unilaterally attempted to change working conditions. In my absence the officials of the department intervened at once, and a meeting was arranged between the representatives of the shipping company and the union. The discussion took place this morning I believe and the matter has been satisfactorily settled.


Some hon. Members:: Hear, hear.



HATE LITERATURE


[Stage Direction]
On the orders of the day:
Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, on June 1 the hon. member for Saint-Denis (Mr. Prud'homme) put a question to the Solicitor General of Canada (Mr. Pennell) on hate propaganda against the Jews being distributed through the Canadian mails by a Montreal association.
In reply to this question, Mr. Speaker, I may say that my department has concluded its investigation on the purported use of the mails by L'Alerte de l'Occident, P.O. Box 185, Postal Station "R", Montreal, to distribute hate literature. Our counsellors feel that these writings are obscene and scurrilous and thus come under the prohibition provided for by section 153 of the Criminal Code prohibiting the use of the mails for the purpose of transmitting obscene and scurrilous material.
On June 9, 1967, I therefore signed an interim prohibition order stopping the delivery of any material mailed by or to the aforesaid organization.



DOMINION DAY


[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskatoon):: Mr. Speaker, I would like to ask a question of the Prime Minister. I refer to the statement he made on June 9 when he announced July 3 as a public holiday to celebrate confederation. There appears to be considerable confusion as to whether July 1 is still a statutory holiday in addition to July 3 as proclaimed by the Prime Minister. Would he clarify this, because questions are being asked all across the country about the matter?


Lester Bowles Pearson: Mr. Speaker, July 1 is still the statutory holiday, Dominion day-


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: -known legally and constitutionally as Dominion day, but perhaps in view of the fact that this is the one hundredth Dominion day we might be permitted for one year to call it Confederation day.


John George Diefenbaker: That is an afterthought.
June 14, 1967


Lester Bowles Pearson: July 3 was proclaimed as a public holiday by the federal government so there would be a long week end on this the one hundredth anniversary of our confederation. That was considered to be appropriate. That only has legal effect so far as federal public servants and banks are concerned, but, as an indication, there has been a proclamation of a public holiday, though provincial governments will do as they see fit. I believe some are already taking action in this respect.



REQUEST FOR STATEMENT ON TELECASTING OF HOUSE PROCEEDINGS

[Stage Direction]
On the orders of the day:
Mr. R. W. Priltie (Burnaby-Richmond):: Mr. Speaker, I wish to ask the house leader if he could inform us as to the state of the discussions concerning televising the proceedings of the house.


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, I am indebted to my hon. friend for this question because it will give me an opportunity to clear up some of the inaccuracies that have surrounded this matter in the last few days.
As I understand it, prior to my becoming government house leader there had been some discussions with respect to filming procedure on a part.cular bill in the house as part of the centennial effort by the C.B.C. Apparently, although I cannot confirm this from my personal knowledge, there had been agreement among house leaders about the matter.
At any rate, shortly after I became house leader I was approached by the public affairs department of the C.B.C. and asked about the possibility of filming the progress of a bill through all its stages, or at least parts of those stages during this month. There had been only one bill eligible for this treatment in all its stages, namely the Cape Breton development corporation bill, and I assure members of the house it was not selected because of any local interest on my part.


Mr. Maclnnis (Cape Breton South):: You
can say that again.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Confession is good for the soul.


Allan Joseph MacEachen: I felt, Mr. Speaker, that my local interest was sufficiently well known without having it televised.


Some hon. Members:: Hear, hear.

Inquiries of the Ministry


Allan Joseph MacEachen: At any rate, I did discuss this possibility with two of the house leaders. To my recollection at no time d d matters reach the point that it was necessary to consult the house leaders of the remaining parties in the house. At the end of last week from my point of view I had concluded, in consultation with others, that it would not be appropriate at this time to undertake this particular filming, and I communicated to the producer of the public affairs program on Friday last that there had been difficulties in the way of undertaking the filming of this particular bill.
Now, Mr. Speaker, I should like to add that personally I am in favour in principle with doing th s kind of thing, although I did register objection at that time in respect of this particular bill. The matter of the installation of cameras and the removal of cameras is a matter which is outside my jurisdiction as house leader. May I say, in direct reply to the question, that at a meeting of house leaders this morning I believe we concluded that the filming of the proceedings in respect of this bill by the C.B.C. is now rather a dead issue, although the bill itself will make a magnificent contribution to the economy of Cape Breton.


Stanley Howard Knowles: May I ask a supplementary quest'on, Mr. Speaker. In view of the fact that the C.B.C. has made plans in this regard, would it not now be possible to have this agreed to by unanimous consent?


Some hon. Members:: No.


Mr. Thomas M. Bell (Saint John-Alberi):: have a supplementary question, Mr. Speaker. Is there any truth to the rumour that the reason for the minister's decision is that the hon. member for Cape Breton South and the hon. member for Cape Breton North and Victoria are better looking than the minister?


John George Diefenbaker: Mr. Speaker, in respect of th's matter it is so very important that the people of Canada, and particularly the school children, have some idea concerning the operation of parliament. Therefore I should like to direct a question to the Prime Minister. Under all the circumstances would he not give his support to something being done along this l'ne early next week? If it is not to be in respect of this particular legislation, then perhaps it could be done in respect of some other legislation. The C.B.C. made its plans on the basis of an apparent agreement
June 14, 1S67

Inquiries of the Ministry arrived at among the house leaders before the Minister of National Health and Welfare occupied that position. I think there is a general desire on the part of all Canadians that this be done so the people as a whole and particularly the school children may be given a new idea of the operation of parliament.


Lester Bowles Pearson: Mr. Speaker, I agree, particularly as a centennial project, that it might be desirable to have the C.B.C. film the progress of a bill through its various stages. It is unfortunate that the C.B.C. did not await a decision on this matter so it could have been planned and carried through in the right way. I hope this can be done during our centennial year. I think the house leaders and others might get together in an effort to see how it can be best planned and done.
This is apart from the general question of television coverage of our debates. I do not know whether other members will agree with me, but I have felt that while this is desirable and inevitable, perhaps the best way to begin would be by filming the proceedings of some of our committees. I hope if that is done the committees will not find themselves unable to meet because they do not have a quorum when the cameras are there.


John George Diefenbaker: Mr. Speaker, I suggested a long time ago that we start with the committees. That, however, is not the question with which we are faced now. The C.B.C. has planned a program, part of which would be the operation of parliament. Having gone so far as he has now will the Prime Minister, along with the other leaders in the house, do his part so the broadcast can take place here before July 1 in order that the C.B.C. may be enabled to carry out its program, and also so the demands of the Canadian people will be met.


Lester Bowles Pearson: I should like to suggest that the house leaders have a meeting immediately, perhaps tomorrow morning, to see whether it is feasible to do this at this time. If it is not feasible to do it at this time, it certainly should be feasible to do it at the time of the introduction of the first appropriate piece of legislation.


Mr. D. V. Pugh (Okanagan Boundary):: have a supplementary question, Mr. Speaker. At the same time this is being planned, would the Prime Minister arrange for the substitution of perhaps Quentin Durgens for the Minister of National Health and Welfare?



STEPS TO GIVE CONSUMER BENEFIT OF TAX REDUCTION

[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Minister of National Health and Welfare which is a follow-up to a question I asked the Minister of Finance last week concerning the increase in drug prices by manufacturers. My question arises as the result of a resolution passed yesterday by the Ontario Pharmacists Association in which these drug increases were confirmed. Is the government taking any action now to see that the tax benefit will be passed on to the consumers?


Allan Joseph MacEachen: Mr. Speaker, I thank my hon. friend for sending me notice of this question. I note that a resolution was passed at the meeting which proposed a six months voluntary restraint on prices by manufacturers and distributors, which in the circumstances would be quite desirable. However, I shall be happy to draw this question to the attention of the Minister of Finance and undoubtedly he will wish to reply at an early date.


Gordon Harvey Aiken: As a supplementary question,
Mr. Speaker, may I ask the minister whether he is aware that this resolution which was passed by the retailers really was directed to another body, the manufacturers, and therefore is only a moral restraint and of no legal effect.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. P. B. Rynard (Simcoe East):: Mr. Speaker, I should like to address a question to the Minister of National Health and Welfare. Did the minister in addressing the Canadian Medical Association in Quebec city, as reported, state that it may be necessary for doctors to see their patients on the basis of priority of illness when the medicare program comes into effect?


Mr. Speaker:: Order. The question is not in order. The hon. member may not ask about the accuracy of reported statements.


Philip Bernard Rynard: Did the minister say this?


Mr. Speaker:: This is a question which should not be asked.
June 14, 1967	COMMONS


Philip Bernard Rynard: I have a supplementary question, Mr. Speaker. I said it has been reported that the minister said this. I am asking him as to the accuracy of the statement.


Mr. Speaker:: I would think neither question is acceptable or in order. In respect of statements made outside the house by a minister, the only question which can be asked is whether the reported statement represents government policy, and this question must be directed to the Prime Minister.


Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In his discussions with the Canadian Medical Association in Quebec was it brought to the attention of the minister by the members of that association that Canada is facing a serious shortage of medical manpower? If this is so, could the minister inform the house what position he took in this regard?


Mr. Speaker:: Order, please. I doubt whether this question is in order.



FURNITURE-POSSIBLE EFFECTS OF GENEVA TARIFF NEGOTIATIONS

[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. Would the minister allay the fears of the furniture manufacturers of Canada by assuring us and the house that this is not one of the industries which will be opened up following the tariff negotiations under the Kennedy round.


Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, I think the furniture industry, along with other industries, will have to wait until the results of the negotiations are known. I do not think, however, this industry need have any more fears than other industries. The government has taken note of all these contingencies.



REPORTED LACK OF DEPARTMENT PERSONNEL SPEAKING JAPANESE

[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revelstoke):: Mr. Speaker, my question is for the Minister of Trade and Commerce. In view of the rather startling disclosure yesterday that this department has no personnel who are fluent in the Japanese language, has the
DEBATES	1517
Inquiries of the Ministry minister any announcement to make regarding a crash program of language training or a recruiting drive to fill this serious gap?


Mr. Speaker:: Order. I believe the question
is one which should be placed on the order paper.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. S. J. Enns (Porlage-Neepawa):: Mr. Speaker, I should like to direct a question to the Secretary of State. Has the minister received a submission from the Canadian political council on youth asking for support in promoting a national conference on political education? I might say this idea is receiving a wide measure of support, and the program is one which is highly desirable. Has the minister replied to this request and, if so, is the reply favourable?


Hon. Judy V. LaMarsh (Secreiary of Stale):: Mr. Speaker, a certain proposal did come in and was referred to the ad hoc committee, which rejected it and any support for it through public funds. The centennial commission, however, as part of the youth travel program has approved a grant if this program goes ahead. I have had the situation looked at by the citizenship branch to see whether they are prepared to make a grant in this regard. When further information is available I shall be glad to advise the house.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr.   Fernand-E. Leblanc@Laurier: Mr. Speaker, I should like to put a question to the Minister of Indian Affairs and Northern Development.
Does the department intend to carry on the intensive development program at Frobisher Bay by building this year some houses for Eskimos and government personnel?
There is some urgency, Mr. Speaker, on account of the short navigation period in those northern areas.


Mr. Speaker:: I think just the same that this question should be put on the order paper, but if the hon. member feels that there is a real urgency, he could have it considered at the time of adjournment.
June 14, 1967
1518	COMMONS
Supply-Energy, Mines and Resources [English]



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the right hon. Prime Minister about a question I put to him on Monday as to whether he had received a telegram from the marine workers' and boilermakers' industrial union, local No. 1, Vancouver, in which it was claimed that the Burrard Dry Dock Company Limited was in the process of laying off some 350 of its 800 employees. Has the Prime Minister been able to activate any department of government to take some action in respect of this very serious situation?
Righl Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, I think I received a note about this yesterday, but I do not seem to have it today. Perhaps my hon. friend will permit me to answer this question tomorrow.

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



DEPARTMENT OF ENERGY, MINES AND RESOURCES

[Stage Direction]
1. Departmental administration including the administration of the Explosives Act, and Canada's fee for membership in the Pan-American Institute of Geography and History, $4,315,000.
The Chairman:: Hon. members can find vote No. 1 on page 78 of the blue book and the details at page 82.


Hon. Jean-Luc Pepin (Minister of Energy. Mines and Resources):: Mr. Chairman, the Department of Energy, Mines and Resources, conceived on December 17, 1965, when the Prime Minister announced an important redistribution of responsibilities among the departments, was born normally nine months later, on October 1, 1966, date of the proclamation of the Government Organization Act.
The estimates which I introduce today, and which relate to the needs of the department as far as staff, buildings, equipment, operating costs, etc. are concerned, therefore reflect the enthusiasm and the vitality, as well as the evolutive character, the future prospects, a philosopher would say, of a body less than one year old.
Mr. Chairman, I do not need to show the importance of the new department. When the


reorganization took place, the most enlightened commentators did that. It is trite to say that scientific research, the optimum use of natural resources, particularly the power sources, are of fundamental importance to the economic development of Canada.
This young department counting, it is true, on the experience of one of its components, the former Department of Mines and Technical Surveys, has begun already to influence the economic policy of the Canadian government and to translate into administrative facts, programs and deeds, the aspirations and good intentions which brought about its creation.

Mr. Chairman, many debates and questions in this house have given me the impression that hon. members are not as much disposed to question the needs of my department's activities as they are to asking whether we are moving as quickly as possible in these vital fields of national concern. So I shall do my best today to demonstrate that this is so and to answer any other questions which hon. members might wish to raise.
At this point I should like to say a few words about each of the main sectors of my department, namely mines and geosciences, mineral development, water and energy. First of all, in respect of mines and geosciences, the principle objective of this sector is to keep up a high level of survey and research in mineral and geosciences so we can learn better the nation's potential mineral resources, provide industry with the data required for discovery, exploration and utilization of the nation's mineral deposits, assist in the planning and development of these resources and contribute to man's knowledge of the sciences of the earth and its contained minerals.
In developing resources the first requirement is good maps, and to this end we expect that the four mile mapping will be completed in this centennial year; that is four miles to the inch, as hon. members certainly know. We will then be able to devote all our attention to the spec'alized maps required to develop resources in various parts of the country. The reconnaissance geological study of Canada is progressing very well, and we expect that the initial mapping will be completed in about five years.
In astronomy, the new Queen Elizabeth II telescope and associated instruments on Mount Kobau are n^w in the advanced stage of planning, as is the associated institute of astronomy on the campus of the University of
June 14, 19S7	COMMONS
British Columbia. I may give that in passing as an example of the co-operation that exists between the department and the universities of Canada.
Studies of gravity effects have always been important in geological studies, but it is now known that they have extreme importance for satellite investigations, and this particular aspect of the department's activity is being stepped up.
The department carries basic studies on metals, mineral processing and mineral extraction. Let me give you some illustrations of that work. The department is carrying out studies on the bacterial leaching of uranium ore, a method which has considerable promise for treating lower grade deposits in Canada and elsewhere.
Another example is the fundamental studies of the characteristics of rocks and how they break-matters of great importance to the mineral industry-that have recently been undertaken on a large scale at the research centre established at Ell ot Lake. Studies have also been undertaken on the addition of small amounts of uranium and gold to allovs in an attempt to improve the characteristics of these alloys, by reducing corrosion, for example. The mines branch also operates a laboratory studying the effects of atmosphere on explosives. These are examples of the practical work which is being done in this sector of the department.
Special investigation of various instruments, their development and their improvement, is a continuing study in the department, including such things as tellurometers which have greatly speeded up our topographic mapp ng by providing a fast and precise way of measuring distances. For the benefit of those of you who winder what a tellurometer is, it is a scientific device for measuring distances with great accuracy by using waves.
[DOT] (3:20 p.m.)
Remote sensing devices in the geophysical field have also greatly speeded up and improved the utility of aircraft for locating areas favourable for the occurrence of ore deposits. I might add as an aside that the department supplies research grants to universities, and these are designed to stimulate research and training in fields of concern to the department. The total amount for the department this year is in the order of $350,000 for research in mining, geological sciences, geophysics, astronomy, geography and surveys and mapping.
DEBATES	1519
Supply-Energy, Mines and Resources
The mineral development sector has administrative and economic research responsibilities. For example, that sector issues exploration permits in respect of all minerals in offshore areas south of the sixtieth parallel and in Hudson bay and Hudson strait, as well as in respect of certain minerals in federal lands in the provinces.
Offshore exploration for petroleum continued to be active during 1966, both on the Atlantic and the Pacific coasts, with the various permit holders carrying out seismic and core-drilling surveys. Needless to say the acreage of offshore exploration permits is considerably greater than the petroleum exploration areas in the western provinces and has tremendous economic importance for the future.
As is well' known, federal jurisdiction over offshore mineral resources has been contested by the provinces, and the adjudication of this question, at least with respect to the western coast, is now pending before the Supreme Court of Canada.
Along with these new tasks this sector, that is, the mineral development sector, is continuing and expanding studies in the fields of mineral economics, mineral commodities, energy resources, resource management, and mine assistance.
The same group also serves as the repository of mineral industry statistics and information. Its functions include acquiring first hand knowledge of mineral industry activity throughout Canada by on-site investigations, from exploration to marketing, and the publication of reports in this connection.
Activities of the group cover regional studies of the Atlantic provinces' mineral economy, including the Cape Breton coal situation; preparation of a digest of the mining laws of Canada; assessment of several mineral projects throughout Canada for which federal support has been requested; and finally participation in international minerals work through such agencies as the United Nations lead-zinc study group, the organization for economic co-operation and development, and the general agreement on tariffs and trade.
I might mention with regard to this last named institution that the department has taken part in the Kennedy round of negotiations which concluded on May 15, 1967. The results of these negotiations indicate that trade and competition in a wide range of products will be freer than ever before thus providing a country like Canada with larger markets and offering our economy broader
June 14, 1967
1520	COMMONS
Supply-Energy, Mines and Resources opportunities for expansion, not only in the field of raw materials but also for industrial products. All this does not necessarily mean that a fabulous bonanza is to be envisaged for all Canadian mineral producers, but the lowering or elimination of several tariffs can be viewed as a healthy development with long-range benefits for our country.
The mineral development group has also the task of co-ordinating, for the external aid office, education and training programs for mineral scientists, technologists and economists brought to Canada under the various aid programs, and of advising on mineral projects undertaken by Canada as an aid to developing countries. Other responsibilities of the group include the administration of the Emergency Gold Mining Assistance Act, the administration of the roads to resources program, and advice on legislation and tax matters concerning the mineral industry.


Mr. Barneit:: Mr. Chairman, before the minister starts on the next section of his report, could he tell us whether he has any information when the supreme court decision with respect to offshore mineral resources is likely to be handed down?


Jean-Luc Pepin: I cannot give an answer offhand but I expect to receive a note from my advisers in the next few minutes.

Mr. Chairman, the third sector is that of hydrology.
I need not, I am sure, insist on the importance of water for the economic life and even cultural life of our country. Everyone is aware of the many domestic and industrial uses of water.
Canada has been bountifully provided with water-Providence must be thanked for that -but that does not mean that we have no problems. Indeed, we have several of them: floods, droughts, pollution, conflicts between users, utilization of tidal waters, etc.
My department has been entrusted the task of developing, of defining a national water policy, the task of co-ordinating the federal responsibilities in this field, of improving through research our understanding of hydrological problems, and that of co-operating with the provinces in this field of research as well as in the implementation of programs of general interest.
Federal-provincial co-operation is essential, Mr. Chairman. Assuredly, the main jurisdiction in hydrology is provincial; still, the


federal government, because of its responsibilities in other spheres, namely fisheries transport, trade, defence, public works of interest to more than one province; in those of international relations, agriculture and what not, has obvious responsibilities in this field.
When dealing with water, we are therefore touching upon a field where federal and provincial jurisdictions are shared, where they inevitably overlap. Consequently, federal-provincial co-operation is indispensable.
If the water level of the great lakes drops or if their waters become more polluted, Ontario is not the only province to suffer; Quebec is also affected, for the St. Lawrence is, in a way, its main street.
Therefore, a good Canadian water policy necessarily requires the co-ordination of federal and provincial policies in this field, and even concerted action in many cases.
With the enthusiastic support of my officials, Mr. Chairman, I have tried, since coming to office, to improve the co-operation between the central government and the provinces in this field. For example, our participation in the International Water for Peace Conference held in Washington, with regard to both personnel and the exhibition which took place within the scope of the conference, was really a joint federal and provincial contribution. The future will show the progress that was made.
Mr. Chairman, in my opinion a department or branch of a department, to be successful, must have good personnel, a good administrative structure, good legislation, a good research division and good relations with the outside, with the other departments, other levels of government, industry and the public. That is what we have tried to accomplish with regard to hydrology. We have tried to equip ourselves in each of those fields.
A few words, for example, concerning administration. The department had inherited the water resources branch from the department of northern affairs and national resources. It had also inherited the hydraulic research branch and the marine sciences branch from the department of mines and technical surveys. These three elements have been grouped and reinforced and have become the hydrology services, which will now comprise three branches.
First, the inland water branch, second, the marine science branch and, third, the policy and planning branch.
June 14, 19S7	COMMONS
We have hired and continue to hire staff as quickly as the financial resources of the government and of the department will allow us, as well as the human resources of the country. Today's estimates will help us meet our requirements.
In the legislative field, we hope to introduce this fall, the Canadian waters act, whose main purposes would be to promote co-ordination between federal departments as well as a concerted action with the provinces. In this connection, we have consulted with the provinces, and we shall continue to do so, in order to introduce to the house a piece of legislation that will be acceptable by the greatest possible number of people.
[DOT] (3:30 p.m.)

A basic requirement to national water policies and programs, Mr. Chairman, to the establishment of guides and priorities for action and to the development of specific programs, is a Canadian water inventory of supply and demand of water. There have been people asking me or asking the department, will we or will we not export water to the United States, should we provide for the diversion of rivers from area to area? My answer is always the same. I do not know what we are going to do on the subject of export of water to the U.S., but one thing is absolutely certain. Our present responsibility is to find out as precisely as possible how much water we have and as precisely as possible also how much water we are going to need. I feel this is the main responsibility of the water sector at this time, and that responsibility we are going to fulfil as well as we can.
On the supply side of the inventory, we are rapidly expanding our network of stations to obtain data on water quantities, water levels and water quality. Most stream flow gauging stations are operated in co-operation with the provinces, with the provinces paying 50 per cent of the construction costs and a portion of the operating costs. There are now 2,285 of these operating in Canada, that is, gauging stations. There are now also 124 tide gauging stations, 168 water quality stations and a network of ground water and sediment stations. The estimates provide for a considerable expansion of all this network. So you see, Mr. Chairman, by getting this program working we should, within a minimum of time, obtain a good assessment of water supply and water quality.
In so far as water demand is concerned, this is the other side of the picture. Our
DEBATES	1521
Supply-Energy, Mines and Resources information on existing demand and potential demand for water in various basins and regions is inadequate for sound policy formation and planning. With the formation of the policy and planning branch in the water sector, studies are planned in co-operation with the provinces to develop and carry out this part of the inventory. Work will be under way soon.
In addition to good personnel, a good administrative structure, good legislation and a good inventory, Mr. Chairman, we also need good research on water in order to provide scientific and technical insights on which to carry out programs. This is particularly true, in my opinion, when we are dealing with the great lakes. The International Joint Commission has fairly recently given us an interim report on the deplorable situation of pollution in lakes Ontario and Erie. In order to cope with the situation, therefore, we are coming up with a major new interdisciplinary water research centre which is going to be called the Canada Centre for Inland Waters at Burlington on lake Ontario, near Hamilton. This centre will provide answers to some of the management problems of the great lakes, and at the same time will provide technical support to water pollution abatement programs throughout Canada. In due course, the research station at Burlington will be useful to both federal and provincial institutions. The estimates provide for a start on building this vital research centre.
The fact that we are busy setting up conditions for action does not mean we are not doing anything. Walking is still the best way to learn how to walk. Although involved in these preparations, the department has been very active and has been doing things. I should like to give some examples of the things we have been doing. We are continuing joint programs in Ontario and British Columbia under the Canada Water Conservation Assistance Act. We now have under way new joint studies and working arrangements in both provinces.
In addition, we are undertaking with Ontario a study of northern Ontario waters. We are completing the Winnipeg floodway program and we are negotiating with British Columbia a joint program for flood abatement in the lower Fraser Valley. We hope shortly to join with the three prairie provinces in a major water supply study in the Saskatche-wan-Nelson system. We will be stepping up our federal-provincial programs as fast as the required legislation, institutional arrangements and staff can be supplied. We are thus
June 14, 1967
1522	COMMONS
Supply-Energy, Mines and Resources moving on a number of fronts to meet our new responsibilities to evolve a sound national water program. I used the word "evolve" but I do not like it much. I think we have a national water policy. It may not be as good as every one of us would like it to be, but we have one and we should improve it to make it as comprehensive as possible.
I should like now to say a word about oceanography. Members know that the continental shelf and surrounding oceans have great importance to Canada. It is estimated that about one quarter of Canada's land area lies beneath the ocean. We are developing a strong competence to study and know the continental shelf and oceans surrounding our shores. Recently I visited the Bedford Institute and was very much impressed with the work done there. This knowledge is being employed and will be increasingly employed in support of exploration and development which will have an important impact on the economy of our maritime regions as well as the entire country.
I come now to the fourth sector of the department, the energy sector. The organization of this particular group is not as advanced as the water sector group. Like everyone else, we had to establish priorities. The Public Service Commission has been searching for some time for a possible person to appoint to the position of assistant deputy minister of energy. I hope the appointment will not be delayed too long.
The energy sector is to be responsible for the development of energy policies at the national level. Organizational planning has been based on full recognition of the continuing important contribution to be made in this field by the several crown companies and agencies concerned which are accountable to the house through the Minister of Energy, Mines and Resources. This sector of the new department will assist in the co-ordination of policy advice which is prepared for me in these several agencies. I might mention, however, that there have already been some considerable accomplishments in this field during the brief lifetime of the new department.
Hon. members have been informed of the creation of the Bajr of Fundy tidal power programming board, with the initiative of this department. This is a joint venture of the New Brunswick, Nova Scotia and Canadian governments to try to find a feasible, economic and engineering basis for the development of the tremendous resources of tidal power which are matched nowhere else in the world.
fMr. Pepin 1

My department has also picked up the question of a trans-Canada grid for electrical transmission. A federal-provincial committee has met on several occasions and obtained reports from private consultants. I am hoping that the several interested governments will receive a report from this committee in the not too distant future.
e (3:40 p.m.)
Hon. members have been informed on successive occasions of plans for the development on a large scale of the hydroelectrical potential of the Nelson River in northern Manitoba. I expect to make an announcement in the very near future respecting the conclusion of an agreement with the province of Manitoba to this end.
I have tried, Mr. Chairman, to indicate throughout my speech the responsibilities, the realizations and the potentialities of the new Department of Energy, Mines and Resources. However, I should like to point out again that the nucleus of this young department is the former department of mines and technical surveys, with its long experience in research and development as applied to the mineral resources of Canada. This technical skill will remain as the central core of the new department, and we are building around it the special skills we require for developing national policies related to our natural resources. The great advantage we now have is the technical and scientific skilled personnel who are working hand in hand with the specialists who are developing ideas and plans for the national programs. Quite often they are the same people.
Government expenditure on research is growing, and growing rapidly, as it should. The research arm of this department is carrying out investigations directly related to the economic development of the country, and over the years their pay-off has already been substantial. May I indicate two examples. The old maps of the geological survey of the area at Elliot Lake were the basis for development of the whole Elliot Lake uranium project. The processes for extracting the metals from the ores were developed at the mines branch. As another example, our geographers provided the basic information for ARDA and are providing specialized information for E.M.O. Our topographers have made available maps and air photographs required for the assessment and study of our resources.
In general, Mr. Chairman, I think it is right to say that mines and technical surveys, the old department, had been mostly concerned
June 14, 1967	COMMONS
with providing the basic data for industry, for other branches of government, for other levels of government, in order to bring about the maximum resource development in the country. The new Department of Energy, Mines and Resources will, of course, go on doing that but it will do still more. It will be more involved in the development of basic governmental policies and the development of programs in order to bring about maximum use of these resources, and over a much wider area than that covered by the previous department. I hope that these policies will meet with the approval of members of this house.


Mr. Hamilton:: Mr. Chairman, I think the report of the minister is a tribute to his department. Personally I had hoped that we would hear something of the minister's own views on this very important department over which he presides. In my judgment there is no department of the government that is more important to the present and future development of Canada than the Department of Energy, Mines and Resources. It can be described as a Cinderella department, and any ambitious young politician who wants to do great things for this country could ask for no higher task than to have in his possession the portfolio that the minister holds.
Just about a year ago, Mr. Chairman, when the bill to reorganize the various departments of government came up for discussion, it was a Conservative proposal that gave the minister the powers he needed to move forward and to take initiative on his own. The minister is quite correct when he says that the old department of mines and technical surveys fulfilled the function of supplying information to all departments of government, and over the years it has done a wonderful job. I have said this before and I repeat it. The men who manned this department were scientific personnel, the type of personnel who are the eyes and ears of the future of Canada.
Today we waited for the views of the minister. One year ago when the reorganization bill was before us, with the co-operation of the opposition the bill was put through in the minister's absence. I asked the minister presiding over the bill certain questions. Because they covered matters which are so important I am going to repeat them today. The minister has apparently not had his attention directed to the suggestions that were made, even though we had a firm commitment from the Minister of National Revenue that they would be.
DEBATES	1523
Supply-Energy, Mines and Resources I should like to quote from page 5784 of Hansard for May 31, 1966, where I am reported as follows:
We should like to know what is the minister's policy in relation to the national oil policy on such questions as (a) setting annual targets to industry. We have not had a statement from the minister on this subject for two years now. Then, (b), what is the attitude of the minister toward building a refinery at Quebec, which negates the background of the whole national oil policy? (c) What is his policy on the second oil pipe line to Montreal? (d) What is his attitude toward oil and gas regulations in the north? (e) What are his attitudes with regard to the oil and gas regulations on the continental shelf which are now in existence? These are matters, Mr. Chairman, vital to the whole future of Canada, and we must have a clearcut statement from the minister so that we know where we are going.
The second major question which I want to put before the commitee for the minister to discuss when he makes his statement deals wth the national energy policy. We should like from the minister some statement (a) as to the relations he foresees between the Federal Power Commission of the United States and the National Energy Board of Canada. There is obviously trouble brewing on this front unless there is a clearcut policy to avoid the difficulties ahead. Then, (b) we also want from the new minister a statement on the national transmission grid, which is vital to the whole concept of sovereignty and using our energy as a basic part of strengthening our bargaining power in the field of resource use on the continent, (c) We shcu'd like a statement from the minister with regard to the relationship between atomic power and hydro reserves in Canada, (d) We should like projections on what the minister foresees is the energy demand for new industrial complexes in Canada during the next 20 to 30 years.
The third subject, Mr. Chairman, deals with water policy, (a) We desperately need something which has been recommended since 1962, and that is a study on the suply of water in Canada.
The minister mentioned something about this and I will come back to it.
I can go into detail on this, but that is sufficient to indicate the subject, (b) Even more importantly, we need a study of the demand.
The minister also mentioned this today and I will come back to it too.
If we have to use United States figures and translate them into figures showing Canadian use, this is a little embarrassing when we are trying to estimate our demand for water. Before we can discuss water intelligently we have to know the supply and demand picture. Then, (c), we should like from the minister officially in his new capacity a statement on the NAWPA plan which the United States has proposed and has been pushing on the legislators of this country in private sessions. And, (d), we should like a statement from the minister on the Kiernan plan proposed by a Canadian engineer. We should like the direction of the minister on these subjects.
There, Mr. Chairman, is a list of about 12 subjects, on two of which we got partial answers today. You can understand the deep
June 14, 1967

Supply-Energy, Mines and Resources distress of those of us who had something to do with first giving Canada an awareness that our future depends upon the development of the resources of this country in a rational and logical manner.
9 (3:50 p.m.)
The Conservative party formed the government in June, 1957. I became a minister on August 22, 1957. On February 12, 1958 the government announced a development policy for Canada. It took us about eight months to prepare what this government has been unable to prepare in four years. This is a matter most vital to the whole future of this country. It is the basis for the future jobs of unborn generations. We have had a report about what a fine job the department is doing. I accept that and I praise it wholeheartedly. But where does the minister stand? I remind the minister that when the bill was passed it was the Conservatives on this side of the house who proposed the amendment to the bill which gave him some power. These are the terms of the amendment which was introduced on behalf of the government by the Minister of National Revenue:
8Bfl) In carrying out his responsibilities under Section 8A, the minister may formulate plans for the conservation, development and use of the resources specified in that section and for research with respect thereto, and with authority of the governor in council and in co-operation with other departments, branches and agencies of the government of Canada, provide for carrying out such plans.
We wanted to hear about such plans, but what have we heard? Continuing:
(2)	The minister may co-operate with the provinces and with municipalities in formulating and carrying out any plans under subsection (1).
Today we heard a little about this in regard to the Saskatchewan-Nelson system and one or two others. We started these projects but they are still in the planning stage. It continues:
(3)	In carrying out his duties and functions under this section, the minister may consult with and inaugurate conferences of representatives of producers, industry, the universities, labour and provincial and municipal authorities.
These amendments were accepted by the government. Their purpose was to give the minister some power or to create some means by which the minister could use the initiative of the federal government to build this nation. One and a half years later what do we hear about these plans? Very little. There have been studies about this and about that.
I remind the committee about some things that are well known but about which we have to remind ourselves on every occasion. We live on this continent with the great United States of America. They also conduct studies. I hold in my hand the five volumes of the Paley report of 1952 which warned the president of the United States of that day that the United States was running short of strategic items to maintain its industrial complex. Every one of the shortages that the report warned would exist between 1952 and 1980 represented an opportunity for Canada. Because of this report the Conservative government in 1957-58 was able to come up, at short notice, with a national development plan to take advantage of the opportunities for Canadians. Since then a more sophisticated report in the United States has been made, known as "Resources in America's Future". The subheading is: "Patterns of Requirements and Availabilities." The authors are Hans Landsberg and others. The report deals with projected needs from 1960 to the year 2000. The projections, which are maximum, minimum and average, show all the possibilities that may happen to forestry, water resources, minerals, and what have you. The United States knows what it is short of and what it must do to meet its needs.
On the other side of the ledger, what has been done in Canada? The only substantial action we have taken was to hold a conference in Montreal in 1961, known as the Resources for Tomorrow conference. I hold in my hand the first of the four volumes of the report which points the way that the government must follow. There is no lack of suggestions in these four volumes about what we must do to preserve and better utilize our renewable resources. The conference was very general in its outlook but it did point out objectives.
In sheer desperation the people in the private sector tried to bring about some sort of analysis of Canada's resources. I hold in my hand a book entitled: "Canada: An Appraisal Of its Needs And Resources". It is written by Canadians, by George W. Wilson, Gordon and Judek. These professors, helped by grants, put out a tim'd, gentle little appraisal which went up to the year 1975, eight years from now. These men performed a task that should have been performed long ago in Canada. Their timid, gentle approach to our needs only points out the urgency of doing something to carry out the suggestions made by the Resources for Tomorrow conference.

June 14, 1967

I intend to propose two ways in which we can act, and I put forward my propositions in the way I do for the simple reason that I have grave doubts that the government intends to act.
Private enterprise has ample reason to wish to know what the future is for its products. Private enterprise in the United States uses the Landsberg volume to guide it in its projections, as do one or two companies in Canada also. This is my proposal. In the amendments that were included in the bill of last year the minister was given certain powers. Why do we not ask private enterprise, which makes money out of our resources, to conduct research in this field? Perhaps a group of companies could to it. The Conservative government amended the Income Tax Act to allow any group of companies or an individual a 150 per cent exemption on income tax for resea "ch-not a 100 per cent exemption for the expenses for this type of research work but 150 per cent. Second, we amended the Combines Investigation Act to allow companies to combine legally if they did so for research purposes. With the amendments to the Combines Investigation Act there is no reason for the minister, in using his responsibilities as a minister of the crown acting on behalf of the people of Canada, not to call groups of our private companies or enterprises together to ask them to do this research work which is so financially advantageous to them.
The private sector need not deal with the water segment of research; it need only take the commodity segment. It could take the Gordon commission report of 1957 as a starting point. It is true that that report is seven or eight years out of date, but it is a starting point. It could be used in conjunction with the Wilson-Gordon book which gives projections up to the year 1975 A.D. Even if the studies are considerably in error, even if they are followed by more sophist'cated studies later, if they could include optimum projections varying from the most pessimistic to the most optimistic, they would be of great help.
In saying these words I have in mind an example about which I have spoken in this house before. In 1958 when I was the minister responsible for resources I realized that within seven or eight years, if we did not develop more zinc and lead production in western Canada, we would be forced to import lead and zinc into western Canada. Here we were, a nation with bountiful lead and zinc resources, and private enterprise was not meeting its responsibilities. Apparently our boards
DEBATES	1525
Supply-Energy, Mines and Resources of directors could look ahead only for a couple of years. If some of them look ahead for five years they think they are being bold and imaginative.
The government did not fail in its responsibilities. We were the ones who put up the guarantee for Canadian National Railways to build a railway to Great Slave Lake. Today there is a mining operation there, which means we need no longer import lead and zinc into western Canada. Not only are we earning exchange dollars for our country but we have added tremendously to the wealth of this nation. The C.N.R. will get all its money back and receive a profit on the money it borrowed. The company which developed the mine will be paying taxes to the federal treasury next year at the rate, I would expect, of between $12 million and $15 million a year. When you show initiative, when you show you know what you are talking about, when you can push private enterprise into making money and when the treasury will get $15 million a year without spending a nickel, that is good, dynamic government. The word "dynamic" does not describe the present government. If private enterprise will not give us the required commodity output even though it is in its own interest to do so, then the government will have to induce or push them into action.
[DOT] (4:00 p.m.)
It is not just an inventory of our resources which is needed. We need a projection of the demand and a projection of the supply in relation to every commodity. Canada undoubtedly is a resource nation and will continue to be one for many years to come. But though we have been a resource nation from the very beginning, there has never been developed in this country a resource philosophy which dominates the thinking of ministers of finance, which dominates the thinking of governments. If our future depends on the use made of these resources, then the whole organization of tax laws should be orientated to this end. Agriculture is one of our great resources. But there has never been a clearcut understanding in Canada by ministers or by governments of the fact that agriculture is not just an orphan to whom a few crumbs are thrown every so often but an important source of wealth which should be so planned and used as to bring the maximum return to our people and serve the world as a result of the ability of our land to produce.
The same is true of our mining industry. We look on it as a means of raising taxes, providing a certain amount of employment
June 14, 1967
1526	COMMONS
Supply-Energy, Mines and Resources and bringing in a certain number of dollars in foreign exchange. We do not look on it as a vital part of the whole economic structure of our country. Our economists use the great ideas of Lord Keynes. Lord Keynes developed a system of economics designed to suit a homogenous, integrated country such as the United Kingdom, a country which was an exporter of manufactured goods and an importer of raw materials. He developed this economic system as a means of avoiding the ups and downs of the economic cycle. We in Canada have transferred this doctrine to our own country without taking account of the fact that Canada is not a homogenous or even an integrated country. We are a country of regions. We are not a sophisticated, mature industrialized country yet. Nevertherless our policies at the national level assume we are all in the same boat. We are not. So if we find two provinces threatened with inflation and eight provinces stagnating, we seek to cure the inflation in two provinces by imposing the same restrictions on the whole country, Whether all parts need it or not.
The whole concept of fiscal, monetary and trade policies fails because governments have failed to accept our need for a resource philosophy. What percentage of our resources should we sell abroad in our best interest? What percentage should we process in Canada in our best interest? Certainly we cannot process them all. This is what I mean by a resource philosophy. It must be apparent from the actions of every minister that he understands it. That is the test. Having sat in this house for four years waiting for some sort of leadership, I confess I am at a loss to find evidence of any. The 60 days of decision petered out into stagnation. Then we saw the reorganization of the government. I can honestly say of the present government that they are great at setting up structures. We have heard more structures described to us today than I have heard in this house in ten years. They are great at setting up structures but are wholly lacking when it comes to action. They fail to realize that when a structure is set up there has to be a brain, there has to be a will at the head of that structure, someone who can think and act. This is what is lacking. The government sets up beautiful structures and mans them with the most competent people they can find. But they lack the brain; they lack the will at the top. They are like a leaderless group. All I can say is: dear Lord, how long must we endure?
fMr. Hamilton.]

I am glad the minister has accepted the fact that we need to study the extent of our water resources. I suppose the best figures we have are those produced by the Resources for Tomorrow conference in 1961. When I hear the minister talking about the need for water it occurs to me that it is important to know not only the extent of the supply but the extent of the demand both now and in the future. I often wonder whether he has referred to the article by Mr. D. Cass-Beggs in volume 1 of the conference background papers. On page 184 appears an estimate of annual water consumption in the principal regions of Canada. The author notes that in 1956 consumption of water in Canada amounted to 10 million acre feet in round figures. He predicts that by 1990 it will have risen to 56 million acre feet.
Why talk in generalities when here is a person who has done the projection? I admit the author had to make his projection by interpolating United States figures. But it appears we have a projection for an increase in water consumption from 10 million acre feet in 1956 to 56 million acre feet in 1990. Whether these figures are entirely accurate or not is beside the point. They are something we can talk about. With all this talk about water, I wish the minister would be a little more definite. Otherwise he may frighten the Canadian people half to death. How much water have we got to meet the expected demand?
The water resources branch of the government has tabulated our river flows and arrived at a total of 2.5 million feet per second based on minimum flows. This works out to 1,620 billion United States gallons of water a day. Translate this into acre feet and we have an indication of our capacity. As a rough yardstick of comparison let us compare our situation with that in the United States. If we have 1,620 billion gallons a day, they have about 650 billion gallons. I should make it clear that the estimate of 650 billion gallons is based on flows of realizable water from surface waters in the United States. Let us take our figure of 1,620 billion gallons a day and reduce it by half. Then consider that today in Canada we are using 10 billion or 12 billion gallons of water a day. We have 800 billion gallons a day to meet that demand. So there is no need for the Canadian people to be terrified for a few years yet.
June 14, 1967	COMMONS
[DOT] (4:10 p.m.)
Naturally we are not likely to give this water away. What attitude was taken by ministers of the crown while Canadians were being assaulted during the last two years by requests from the United States for water. Incidentally, I am glad to hear that these have now been abandoned. Where were the ministers of the crown to defend the Canadian interest by telling the Canadian people and the American people what the United States authorities were asking? They were asking for 120 million acre feet a year under the NAWPA plan. What is the value of an acre foot of water? To my knowledge only one quantitive study has been made. It appears in the Landsberg report at page 385, and is dated 1963. It is estimated with regard to New Mexico, a completely water deficient area:
-an acre-foot of water used for municipal and industrial purposes engendered over $3,000 of total economic product (a combination of primary value-added and value-added by purchases).
If you want to put this into a simple phrase, the value of an acre foot of water for municipal and industrial purposes is $3,000 a year, The report continued:
For recreation the range was from $200 to $300 and for agriculture the range was from $40 to $50.
Thus, an acre foot of water is worth over $3,000 a year in industrial production. Yet the Americans had the colossal gall to come to us and ask for 120 million acre feet a year. Let us forget about the recreational and agricultural values for a moment. One hundred and twenty million times $3,000 is $360 billion a year. This is what the Americans were asking. This shows how generous some people can be with other people's wealth. I never heard a minister of the crown give these figures to a Canadian audience or to an American audience. It is the duty of a minister to defend, and to point out the facts so that the Canadian people will not be robbed of their heritage.
There are many questions I would like to ask and the 12 points I listed a year ago still remain unanswered. I have read the reports of the standing committee which met last year when the new department was being formed, and I have many questions to ask on energy and all these other matters but time does not allow. I would think this committee might be well advised, in view of the importance of the department with which we are dealing, to ask all the questions that should be asked, and to do this we need a longer day than a Wednesday. We in the opposition are
DEBATES	1527
Supply-Energy, Mines and Resources allowed an hour and a half to make a few comments and ask questions about this department upon which so much depends. I hope the sense of responsibility of the minister will be such that he will go to his house leader and ask that the committee get another chance to deal with the estimates of his department.


Jean-Luc Pepin: Mr. Chairman, I am told that the committee might resume tomorrow. I agree with the hon. member that I did not answer all h.s questions but my introductory remarks were related to the estimates of the department. I will deal with some of his questions when we reach the National Energy Board estimates.


Mr. Martin (Timmins):: Mr. Chairman, first of all I would like to pay a very hearty compliment to the hon. member for Qu'Ap-pelle on the excellent speech he has just made. I might take advantage of an inadvertent slip of the tongue on his part when he mentioned a leadership mob to say that his speech should give him a good start.
As was mentioned by the hon. member we should have much more time to deal with this most important department of government. But since we do not I will confine my remarks to one particular policy of the minister and the government.
I wish to protest against a government policy which has brought a certain situation in Canada to a crisis stage. This policy might best be described as fawning, craven subservience and, at the worst, possibly a clandestine conspiracy. Of course, Mr. Chairman, I am speaking about the government's policy or lack of policy with regard to a vital resource and industrial lifeline of Canada, natural gas and gas pipe lines and the vacillating of the government in that regard.
I do not want to go into the pros and cons of the north line versus the south line. This question has been debated at great length in the house without much change in opinions or positions on either side, but I think it would be worth while to review briefly just what has caused the present situation. To do this I have to go back ten years when a policy was being determined in this field by the House of Commons, at that time we had a very strong policy. Whatever else may be said about the late C. D. Howe and his cohorts, nobody at that time denied the strength of their policies when they decided on them. Indeed, many people who were familiar with the situation in those days must now wonder that we can look back on that Liberal government and
June 14, 1967
1528	COMMONS
Supply-Energy, Mines and Resources realize it was much better than the one we have at present.
That government laid down a policy that natural gas must be transported over a Canadian route, that it must supply Canadian needs and, above all, that it would remain in the control of the Canadian government and the Canadian people. At that time the government of Ontario also played an active part by insisting, at least to the extent of its ability, that the pipe line should go through Canada and, second, that it should go through northern Canada in order to develop northern Ontario.


Jean-Luc Pepin: Would the hon. member kindly indicate to me where the government of Ontario insisted on the line being in Canada, and where in Canada?


Murdo William Martin: I have documents that stack about a foot high which I can let the minister see, but from memory I recall that the government of Ontario of that day came out publicly and strongly indicating its desire and insistence that this was what should be done.


Jean-Luc Pepin: Oh, the hon. member was not referring to the present situation?


Murdo William Martin: No, I am referring to the situation ten years ago.


Jean-Luc Pepin: I apologize.


Murdo William Martin: It was the government of Hon. Leslie Frost at that time. What did we see happen after a few years went by? First of all we had the National Energy Board meekly and mildly warning about the developing shortage of natural gas in eastern markets. Unfortunately that is about the only role the National Energy Board is empowered to play, to warn meekly and mildly, and to issue licences when people make applications.
For reasons which became only too apparent later, Trans-Canada Pipe Lines deliberately ignored the growing shortage in eastern markets. There was an ignoring or unawareness on the part of the present government of the situation that was developing. I do not care which it was. Both are a condemnation of a government that is supposed to have the interests of the country at heart.
Finally we had the blackmail attempt by Trans-Canada to rush everything through at a moment's notice in order to enable them to have their cake and eat it too. Then we saw the first reaction of the government, the only good reaction I can recall it having in the past


four years, but unfortunately the reaction lasted for only five weeks. The government was unable to resist the pressures brought to bear on it and did an about-face. But it lapsed once more into its familiar role of vacillation, the role of the innocent and helpless bystander, the role of a meek observer of vital decisions having far reaching effects on the country it was elected to protect.
[DOT] (4:20 p.m.)
The government said, "Let Trans-Canada decide, let the federal power commission decide, let anybody decide so long as we do not have to make a decision as to what we should do." Unfortunately the minister was the epitome of this tragedy of government on the unhappy day when, in reply to a question as to when we might expect a decision, he rose, shrugged his shoulders and said, "I wish we knew". In fairness to the Ontario government I should say that they had a death-bed repentance. Finally, after bitter debates arose in this house and across northern Ontario and Queens Park, they stirred themselves to raise their voice along with others and decided to make an intervention with regard to this problem.
I say we have had enough delay in respect of this matter. If we look at the Globe and Mail of May 25 last we will see the following in a big write-up about this situation:
Testifying before the commission last month, N. John McNeill, Trans-Canada vice-president, indicated that the company would require a decision on its application for certification of the Great Lakes project by the end of May.
In the event no decision was forthcoming by that time, or the ruling was unfavourable, Trans-Canada would have no alternative but to proceed with its plan to loop sections of its existing line east of Winnipeg to assure the supply of additional gas for Ontario and Quebec next winter.
Panhandle's application for renewed hearings of the Great Lakes scheme may well be rejected by the commission but such a ruling by the F.P.C. would almost certainly be cited by the company as one of its grounds for challenging the legality of any F.P.C. decision in favour of Great Lakes if Panhandle resolves to take it to the courts.
This situation certainly should be clear to anyone who is interested in this matter and who has followed it through the newspapers over the past year. Everyone should have been able to realize that no decision could be made by the end of May. We see now that no decision was made by the end of May. Today, in the middle of June, still no decision has been made. The crisis is growing. The markets are getting shorter and shorter.
In yesterday's Globe and Mail we find further comment on this same subject. From an
June 14, 1967

article by Bruce Macdonald I read the following:
The decision by the Federal Power Commission on Trans-Canada Pipe Line Ltd's proposal for a new natural gas line to eastern Canada via the United States-expected this week-may confront the troubled company with yet another dilemma.
There appears to be a reasonable possibility that the application on behalf of Great Lakes Transmission Co. may be approved with an important condition attached deleting all the current provisions for net export in the United States, which in turn would raise important questions about the economic feasibility of the entire project.
The final paragraph reads as follows:
Given these circumstances, Trans-Canada might find itself iorced either to scale down the 34-inch line it had originally planned to build through the United States or to abandon the southern link altogether in favour of looping the existing Canadian line east of Winnipeg.
This points out in an all too startling and clear manner just what a tremendous hoax has been played on this government over the past year and a half. They reversed a decision on the basis of a comparison that was made at that time and now, a year and a half later, we find that the facts and circumstances given at that time had no relation to the actual situation. It was all part and parcel, as I said, of a blackmail attempt to stampede this government into making an agreement which would benefit one particular company and neglect the interests of the Canadian people almost from coast to coast.
I do not know whether it is necessary to repeat the reasons for the necessity for action to be taken immediately with regard to this burning problem. Certainly, however, this has been pointed out to us almost daily in our newspapers. The government and the country are being reminded of the desperate and growing need for gas in eastern Canada so that the industries we have already built up will continue to operate. Unless immediate action is taken there will be a curtailment of work and production because we have vacillated, waited, played silly games and have dene everything except what we should be doing.
There is no need to repeat again that a building boom would generate all along the course of the twin pipe line. I do not care particularly whether Trans-Canada follows the present line, which probably would be the quickest and least expensive way to get gas to the east, or whether it follows the other proposed line roughly along the route of highway 17. I believe that the build ng of that line would be in the best interests of Canada as a whole because it would open up another vast
Supply-Energy, Mines and Resources region of what is potentially the richest part of Canada.
I might remind the government again of the industrial potential that the line would bring to the affected areas. The government pays lip service to looking after the north and is prepared to put people on welfare and declare designated areas and regions. But when there is something which would build up the country they vacillate for four years when they should have been doing something. Most important of all, if we proceed and proceed now to keep this vital resource carrier in this country, we will at least maintain the ability to make Canadian policy in Canada rather than place ourselves at the whims of a foreign body in a foreign country. Surely the lessons of the past year should have been sufficient to prevent us placing ourselves in this very vulnerable position.
So, Mr. Chairman, I say we have had enough procrastination; we have played enough games. The government should instruct the National Energy Board not later than next Monday to grant this licence and get on with this job which we have delayed far too long.


Mr. Laiulippe:: 
kinds of fields, undertake all kinds of research. That is our opinion, and that of the provinces, I think. All the provinces do not have the capital needed to do that, to support the federal government in those developments.
We know how much the Canadian citizens are paying in taxes at the present time to develop something and to support that economic plan. We cannot pay more taxes and deficits follow: at the federal, provincial and municipal levels, in school boards, private industry, everywhere. We have touched bottom everywhere.
Although that does not come under the minister's jurisdiction, he should study the financial situation a little. I think that all hon. members in general should try to find a way to finance those developments. If that is physically possible why should it not be financially possible?
Our country is rich with engineers, technicians, scientists and they are all able to make further developments, to undertake great developments, to set up large businesses in Canada, but we do not have the financial means to do so. Therefore, I think that it is our duty to try and find those finances to do it.
If interest rates are too high, let us bring them down. Sacrifices do not have to be made always by the same people. It is not always the turn of the people, the little people, to pay taxes, interests, to reimburse war debts, debts for this or for that.
Now, I say that if this is physically possible, let it be made financially possible. It is easier to make all this financially possible than to render the developments possible.
Developments are possible as long as we have scientists, experts, and the required technology. If we have all that, if we have the required men and if those men are able to undertake something else, well, let the financial field be organized accordingly. We can accomplish what the people of Canada are looking for and give the country what it is entitled to have. Further, we owe it to ourselves to give assistance to other countries.
We have all the natural resources to do so. We have all sorts of unexploited natural resources which could be developed, but we cannot develop them because we do not have the necessary capital.
Well, all hon. members should, once for all, get it into their heads that it is easy to finance any project, as long as we have the necessary men and materials. It is easy to undertake
June 14, 1967

any technical, psychological and ideological development in the country, as long as we have the necessary men and materials. Why not? Why should finance not be the reality of good things, of wonderful developments to be brought about in a country? We could give the whole world the finest example ever seen because we have the necessary resources, in short everything necessary to develop all sorts of resources, all kinds of things, and we could assist other countries in an admirable and exemplary fashion.
I shall conclude my observations by saying that we must assume our responsibilities. The minister is not the only one who must assume his responsibilities; each one of us must assume his own responsibilities and, if to do this, we will be able to make the required developments, we will be able to do what has to be done in order to have good drinking water. We will also be able to do what has to be done in order to develop the required ore, in brief, everything underground, all that nature made available to us for our own needs and those of others.
[English!


Mr. Olson:: Mr. Chairman, there are three matters I should like to discuss briefly with the Minister of Energy, Mines and Resources. First I should like to commend the minister for his attitude and in many cases his realistic approach to some of the problems facing him in the mineral and energy development fields as well as those fields relating to water conservation and utilization. I think the minister has performed a good service for Canada in attempting to deal with these matters realistically and progressively.
[DOT] (4:40 p.m.)
The three matters that I want to discuss are, first, oil markets, second, the extension and addition of pipe lines to deliver natural gas to eastern Canada and to the eastern or central United States and, third, coal exports from the Crowsnest pass area in Alberta and British Columbia to the west coast.
I will deal first with oil markets. We are apprehensive and deeply concerned about what is being done to expand the markets for Canadian oil, particularly oil from Alberta. I am sure the minister is aware of the fact that Alberta's petroleum production has dropped to slightly over 30 per cent of its total capacity, even with the application of good conservation practices, and this of course does not include a significant amount from the tar sands. We do not believe this to be a fair or
DEBATES	1531
Supply-Energy, Mines and Resources realistic level of marketing, at least until we have reached the stage where the production of petroleum in Canada is equal to its consumption in this country. We believe a balanced level will be achieved when the total production of petroleum in all of Canada equals the total consumption of oil. This is not the case at present. We know that the market area extending eastward from Montreal is still being supplied by offshore oil. We think that Canadian producers have a right either to supply this market or an equivalent market some place within continental North America. There are a number of reasons for this. One of them is that petroleum should and could be a great asset in earning foreign exchange, and at the present time I understand that Canada is in a deficit position in balancing its exports and imports.
We would like to hear from the minister what he has been doing to expand the availability of markets for Canadian oil, particularly in what is referred to as the Chicago loop. A few days ago the minister was in Washington. When he came back he told the house that he had had some discussions with secretary Udall, but that is all he said. He did not say whether there was a favourable response to his suggestions, whether the United States government was going to encourage this sort of arrangement, or what further action the Canadian government intends to take. All we heard was that the minister was interested-and we are pleased to hear it-and that he had conversations. He did not say anything about the subject matter of the discussions and the response he received. We think it is important for the province of Alberta and for the national economy that some action be taken. We have heard many words, plans, discussions and utterances of good intentions, but we have had no action yet and we think the time has come for the minister to give us at least his impressions of what he expects will happen on the basis of his discussions with the United States officials.
With regard to gas delivery from western to eastern Canada, it is becoming increasingly urgent that some decision be taken to provide additional capacity to deliver gas to eastern Canada. We hear conflicting arguments regarding the deficit which may occur during the winter of 1967-68. Some knowledgeable people have suggested that it may be as much as 33 million cubic feet. Others challenge that figure. I do not know what it will be but I am sure the minister and his advisers have a keen interest in this matter and perhaps an opinion as to how large the deficit will be.
June 14, 1967

Supply-Energy, Mines and Resources They should also have an opinion as to how much tme will elapse before the date on which construction must start so that deliveries can be made this coming winter. I am not sure whether that date has already gone by. I hope not, but perhaps we can hear from the minister on this matter.
Some complaints have been made about the government's unfortunate decision some months ago to reject the National Energy Board's decision regarding the Great Lakes development, following which some time was lost. I am not too critical of the government in this respect because it saw the light and changed the cabinet order. However, the major problem here is loss of time. Some hon. members have complained previously, and have done so again this afternoon, that the government should never have considered the Great Lakes project to supply additional gas to eastern Canada. However, I appreciate the min ster's position and I realize that he is looking at the whole problem of the shortage of gas, the markets both in eastern Canada and in central and eastern United States, and the cost of transporting the gas to the consumers in eastern Canada. All these considerations have to be taken into account.
What has been overlooked by those people who favour the Great Lakes route as opposed to the looping of the present line of the construction of another one a little farther south is that that line would not supply any gas to add.tional customers in the eastern United States. There is a market there for Canadian gas which would benefit not only the Canadian economy but also that of the province of Alberta. So we believe that the government should do what it can to encourage an early decision by the federal power commission. It should do everything to expedite a decision in th s matter so that this line can be built and the looping of the additional pipe line installations in northern Ontario can be proceeded with.
I wish to turn now to my last point, the matter of coal. I am very critical of the manner in which the Canadian government has handled the transport of coal from southwestern Alberta and southeastern British Columbia. However, my criticism does not extend to the minister because I do not think anyone would be justified in criticizing him for carrying out his responsibilities through the national coal board by setting up and providing facilities for the expansion of coal mining in the Crowsnest Pass. I do not believe that this action should be criticized. However, it seems to me that the Canadian

Pacific Railway is being unreasonable and unjust and that the government has been unable to take a positive stand with regard to the railway company's demands for higher rates to transport this coal.
According to the Minister of Transport, both the Minister of Energy, Mines and Resources and the Minister of Finance have a direct responsibility to ensure that if there is even the slightest possibility of a subsidy being given to the transport companies, the variable costs of that transportation plus the mark-up are not unreasonable. A cost study has been made on behalf of the coal operators in the Crowsnest pass by a very competent firm of cost analysts. They came up with a figure of $2.86 for the variable costs. So far as we know, and I should like the minister to explain this to us, the Canadian Pacific Railway, which has a complete monopoly on railway transport in the area, has never offered to haul the coal for less than $5.28 a ton until the volume is well over a million tons. They adamantly refuse to enter into any kind of deal for less than that. I do not believe that is being reasonable. I do not believe it is a justifiable charge on the Canadian treasury to be paying a subsidy which in effect means an 84 per cent mark-up of variable costs. This statement is based on the figures we have that the rate would be $5.28.
[DOT] (4:50 p.m.)
It may be difficult for the minister and his department to establish these costs. However, I believe we have a responsibility to get on with the job of establishing, first of all, the methods and techniques that are used in establishing the variable costs. Then we can apply these methods and techniques to the problem of transporting coal from Coleman, Blairmore, Michel and Natal to the Pacific coast. This has not been done yet. We, as members of parliament, and the Canadian taxpayers are going to be faced with paying a subsidy.
In my estimation one cannot criticize the intent in entering into this kind of deal in order to get inning operations going I think there is a very bright future for coal mining operations in the Crowsnest area in view of the market in Japan and other offshore markets if we can arrive at transport arrangements to the west coast at a reasonable rate. The minister has partly met this problem, but I believe we also have a responsibility to make sure the raTway companies do not gouge the taxpayers in their demands for
June 14, 1967	COMMONS
rates. Therefore I want to make it clear to the minister that we appreciate the co-operation he has given to the coal board in making these arrangements with the Coleman collieries. I believe there are others pending.
I also think that if the industry is going to have a long term future on a sound basis the coal must be moved on the basis of a well established variable cost plus a reasonable mark-up. Then the railway will not need a subsidy at all. It is the belief of more knowledgeable people who have studied this situation that the Canadian Pacific Railway can transport this coal at a reasonable rate and still make a profit. We know that the Great Northern offered to haul it for $4 per ton and, according to some of these people, even at $4 per ton there was a profit. This rate is supposed to be the average for hauling coal in the United States.
Under the arrangement that has been made the Canadian Pacific, even after the total volume reaches a million tons from Coleman or two million tons from the area, is demanding $4.60 per ton. Then, of course, there will be no subsidy paid. This figure, as far as we can tell from the studies that have been made, is still too high and represents an unreasonable mark-up in variable costs.
I plead with the minister to have a conference with the Minister of Transport and the Minister of Finance so that they can go ahead and do what the Minister of Transport promised to do, have a public hearing to establish the methods and techniques used in connection with setting variable costs. A hearing of the interested parties could then be held to determine what the variable costs are after the methods have been determined. This has not been done, and it needs to be done. In every case in the past where the railways have been challenged by competent people, these so-called variable costs have been analysed and a great service has been done for the people of Canada. The time is past due when this needs to be done in so far as variable costs for moving freight are concerned, particularly on heavy commodities.
In closing my remarks I want to say again that we appreciate the attitude shown by the minister in approaching this problem. We wish him well. I hope he will give us additional explanations with regard to the three matters I have raised.


Mr. Faulkner:: Mr. Chairman, the estimates of this department cover a wide range of 27053-98
DEBATES	1533
Supply-Energy, Mines and Resources activities. I want to deal with only one or two points. May I preface my remarks by expressing my pleasure and appreciation at the developments within the area of water policy. In his opening statement the minister stressed the emphasis that is now being placed upon co-ordinating water pollution measures as between the federal and provincial levels of government. He emphasized research as a pre-condition to any intelligent action in this field, and that statement is welcomed.
The minister has, in the past, stressed the importance of the inland waters. I have often wondered whether the department felt that the inland waters were the great lakes and forgot that the Kawartha lakes existed and that there are serious problems of algae there which are of concern to the people. In passing, I may point out that the new university in Peterborough, Trent University, has set up a marine biology department and is doing important research work in this field. I hope that in the future there may be some way in which the Department of Energy Mines and Resources can co-operate with ventures of this character.
The main point I want to raise with the minister relates to the Nelson river project. As an introduction to my remarks, I should like to make a few general statements about the role of the government of Canada as a major contractor in the resource field. I do not need to remind the minister or the house that the federal government is working with public funds. I believe it is very important that the government be particularly sensitive to the effects and ramifications of this work. The effects may be felt well beyond a particular contract and make a lasting contribution to such important fields as Canadian technology, Canadian employment, export sales, to mention but a few areas.
I believe it is in the these three areas particularly that the Nelson river project is of tremendous importance to this country. It may be that in terms of awarding a contract there is a difference between the public sector and the private sector. The private sector, in selecting a tender, concerns itself almost exclusively with cost. This cannot be so in the public sector.


Herman Maxwell Batten: Order. I must interrupt the hon. gentleman since it is five o'clock and the house must proceed to the consideration of private members' business.

June 14, 1967
Income Tax Act
[DOT] (5:00 p.ra.)



INCOME TAX ACT


Mr. Roland Godin (Porlneuf) moved:: That, in the opinion of this House, the government should give consideration to the advisability of amending the Income Tax Act to provide for private owners to deduct from their taxable income all the amounts paid as real estate, municipal and school taxes and the interest on the mortgage of their dwellings.
He said: Mr. Speaker, the purpose of this motion is to enable private owners to derive a minimum income from or obtain a certain guarantee on their dwellings.
Every human being is anxious to own a home. Who would venture to suggest it is unreasonable for anyone to wish some day to own a home for his family?
In this country, private property is closely connected with the family. Private ownership is an undeniable natural right that all members of this house, I am sure, or at least, I hope, have their heart set on protecting.
On the other hand, that same private property is a heavy financial burden for the Canadian labourer, for the Canadian worker and, more generally, for the Canadian citizen.
Owning a home is no problem for a family head who earns $8,000 or more a year. But we know that salaried Canadians earn, on the average, less than $4,000 a year, without hope of any increase, either because the industry for which they work cannot develop or because the worker who grew up during the depression does not have many diplomas.
In any event, despite professional training obtained after 15, 20 and 25 years of experience in a given field, very often employees are limited by salary ceilings. This situation is often found among labourers and also among white collar workers in industry and trade, and even civil servants. Those workers who once felt they possessed a certain security when they acquired their homes are now in serious difficulty because in addition to the income tax they have to pay many other real and hidden taxes, new or higher taxes, excise tax, federal and provincial sales tax.
All these taxes imposed by higher levels of government were the main reason for the higher cost of living. That rise in the cost of living created real problems for our municipal and school officials, because all the services rendered by those intermediate bodies
[The Chairman.]
are more and more costly. Indeed, home owners who once could pay up their school and municipal dues with as little as $150 a year, are now faced with the obligation of expending between $450 and $500 a year for the same services. That unforeseen rise in the essential services is reflected in the fact that a great many nice private properties are put up for sale.
Mr. Speaker, in its war against poverty, the Canadian government recently decided to spend an additional amount of money in order to lower as much as possible the cost of rents in the poorer quarters of Montreal, and I take this opportunity to commend the government for that humanitarian action.
It is proven that it is very well to throw a rope to a drowning man but, to my mind, it would be better to build a guardrail at the right spot at the right time to prevent drowning.
True, without government help, many Canadians would be deprived of everything, but it should be recalled that many Canadian families deprive themselves, for in the case of the head of a family, the expenses are a lot heavier when he has a wife and children.
If we look at the income of an unmarried person earning $4,200 per year, we see how the income tax exemptions for married persons are far from balancing the family budget.
For instance, the unmarried person who earns a salary of $4,200 pays an income tax of approximately $475, after a deduction on $1,000, which leaves a net income of $3,725.
The head of the family earning $4,200 pays $128 in taxes each year after benefiting from a deduction of $2,000 for himself and for his spouse, and a deduction of $1,150 for the three children, if we suppose that he has one aged 19 who is a student, one of 14 and one of 8.
The 14-year-old child receives an allowance of $8 a month, or $96 a year. The 8-year-old child has an allowance of $6 a month, or $72 a year. That adds $168 to the income, which then amounts to a total of $4,368 a year-$4,368 less $128 tax, which brings it to $4,240.
The net income of a father of three children of 19, 14 and 8 years old is $4,240 after payment of $128 income tax. The single person having the same salary of $4,200 has a net income of $3,725, after payment of $475 income tax.
June 14, 1967


Mr. J. G. Lind (Middlesex East):: Mr. Speaker, the hon. member for Portneuf (Mr. Godin) has presented an interesting notice of motion that the government should give consideration to the advisability of amending the Income Tax Act to provide for private home owners to be able to deduct from their taxable incomes all amounts paid as real estate, municipal and school taxes and the interest on the mortgages on their dwellings. This suggestion, as well as the argument of the hon. member, has great merit.
Today, with the rapid increases in municipal taxes and the increases in mortgage lending rates the home owner suffers from severe hardship by his real estate having to bear all the costs of municipal government, added to which are the high costs of education. I have always had a great deal of concern for the person who earns less than $5,000 per year. He should have the right to own his own home. Yet many municipalities, by restricted area bylaws or by restrictions in the agreements between developers and municipalities, prevent such a person from building a home of 600 square feet. A person earning less than $5,000 per year cannot afford to purchase a
1,000	square foot home. As the result of bylaws and restrictions in the deeds on land, the low income earner is prevented from building a 600 square foot house on the majority of parcels of land, and when I speak of the majority I mean 99 per cent. There are hundreds of thousands of people across Canada who would take pride in ownership of a small home if they were permitted to by their local municipality. The government should do something to aid the small wage earner who wishes to buy his own home.

June 14, 1967
Income Tax Act
One of the main reasons for the increased cost of homes has been the rapid increase in serviced lots. Mr. Jack Key, the president of the Toronto real estate board, has said:
Lot prices have gone up by $3,000 because of the high cost of municipal services and in delays in processing subdivision plans by various public authorities.
The Toronto real estate board says that land accounts for about one third of the cost of a home. Here is an area where costs could be substantially reduced by municipal and government co-operation. This would reduce home costs a great deal more. The saving would be greater than any reduction of taxable income and it would apply equally to all home owners.
While speaking in the house on the question proposed by the hon. member for Parkdale (Mr. Haidasz), which would have given home owners the right to deduct real property taxes and mortgage interest for income tax purposes the Minister of Finance (Mr. Sharp) said:
On the question of whether there should be a deduction on home owners' taxable income, we have looked at the matter from time to time and found that it has one obvious fault, namely that it is a suggestion which favours one particular kind of resident, that is one who happens to own his home and not to rent it. Of course, this is not fair particularly to those who live in apartment buildings. So I felt that as Minister of Finance I could not recommend to the government the proposals put before me by the mayor of Toronto, which have been mentioned by the hon. member for Parkdale.
The royal commission on taxation, when dealing with this subject in volume 3 of its report, came to this conclusion, as found on page 206:
.. .we do not believe that mortgage interest and property taxes should be deductible, because the allowance of these items discriminates against the individual who rents his living accommodation.
This substantiates my former argument that to allow the deduction of municipal taxes from taxable income discriminates against the low wage earner. He would receive much less benefit from this deduction than those living in more expensive homes. What we need is a home ownership plan or rental plan that will provide satisfactory living accommodation for the home owner whose income is less than $5,000 a year and for his family.
It is my understanding that income tax deductions for real property taxes and for mortgage interest in regard to owner occupied dwellings would also confer a greater benefit on individuals with higher incomes. Individuals with higher incomes tend to have more expensive homes which attract heavier municipal taxes. Although we are concerned

about the high costs to people in every bracket of income, one of this government's main concerns is with those in the low income brackets. This government has always been the friend of the man who carries the lunch pail. This government is determined to do something for him to enable him to enjoy the comfort and security of home ownership.
[DOT] (5:20 p.m.)
This is why our government has always supported the program of the Central Mortgage and Housing Corporation, a corporation which has been, and is, instrumental in providing financing at a cheaper rate than conventional mortgages because the plan favours those in the lower income brackets. For instance, the interest rate on C.M.H.C. mortgages is usually 1J per cent lower than the rate charged on conventional mortgages by the money lending institutions. It is also interesting to note that on January 11, 1966 the C.M.H.C. interest rate was raised from 6J per cent to 6| per cent while conventional mortgage rates were in the neighbourhood of 8J per cent or 8| per cent. Therefore I maintain that C.M.H.C. favours the low wage earner by providing cheaper rates for him if he can qualify.
It is also interesting to note that when this government took office the C.M.H.C. interest rate was reduced from 6J per cent to 6j per cent. I should like to point out to the hon. member for Portneuf that the Liberal government has always been concerned about providing for the people of Canada quality housing at reasonable rates so that all Canadians may be able to own their own homes or rent suitable accommodation.
I might state that housing starts by the end of May have reached a figure which will ensure that 170,000 units or more will be built in Canada in 1967. This is a good centennial project for C.M.H.C. which can now say that the Canadian construction industry in cooperation with our lending institutions will provide more than 170,000 home units in 1967.
This government has tackled the housing problem and is regarding it not merely from an economic point of view but from a human and social point of view. As a matter of fact, the government has accomplished these things through a minister who has two portfolios under his jurisdiction.
I would urge the government to investigate the situation in rural centres whose population is less than 5,000. It has always been my contention that C.M.H.C. should do something for Canadians in rural areas who wish to own their own homes. I should like to quote from
June 14, 1967

an article in the Globe and Mail of February 3, 1967. Mr. Sol Burke of the Canadian Housing Manufacturers Association had this to say:
Even during periods when mortgage money is readily available, funds for new houses In rural areas are difficult to obtain.
Conventional lenders are not interested in scattered lot investments and C.M.H.C. aid for rural housing is virtually ruled out through the application of restrictive regulations.
Mr. Burke went on to say that the population limit of 5,000 imposed by C.M.H.C. prevented many scattered communities in rural areas from obtaining mortgage assistance. I personally carried out an investigation in my own constituency and found that the corporation had processed only 11 loans over a three-year period in an area which has a population of more than 20,000 people. Mr. Burke went on to say, according to this report, that rural housing in Canada has been neglected and that it should qualify for the same C.M.H.C. assistance as is given to urban areas.
In this connection, Mr. Speaker, I urge the government, through C.M.H.C., to provide all communities in Canada with equal opportunity to enjoy the preferred financing rate offered by the corporation. It is estimated that the revenue loss to the government of Canada as a result of income tax exemptions for real property taxes would be high, and that mortgage interest would be high. Two yekrs ago it was estimated that the granting of/ income tax exemptions in respect of real property taxes alone would mean a loss of revenue amounting to $150 million. The figure today would be closer to $200 million. Loss of revenue on such a scale would only aggravate our present budget deficit. Contrary to the assertions of many hon. members I maintain that the government has provided and will continue to provide reasonable cost housing for our people and that our present housing policy will be extended to include more and more Canadians seeking homes.
I should like to quote C.M.H.C. statistics to show the extent to which the cost of houses has risen during the past year. The over-all cost has increased from an index figure of 148.9 to 151.6, while the cost of wages in construction has risen from 235.5 to 254.2. The contractors and the people engaged in construction have introduced economies which have held down the over-all cost of housing.
One of the principal cost factors is the development of serviced land, which now represents about one third of the total cost of a home. I am sure the government is searching out ways and means of reducing the price
Income Tax Act
of homes so that all Canadians throughout our great nation may enjoy the benefit of owning their own homes or of renting suitable accommodation at a price they can afford.


Siegfried John Enns: Mr. Speaker, I shall be very brief in my intervention. I merely wish to say that I find no difficulty in supporting the intention behind the motion moved by the hon. member for Portneuf (Mr. Godin). With all respect to the hon. member for Middlesex East (Mr. Lind) I was disappointed not to hear him say he has no quarrel with the motion, because I feel it is high time that Canadians generally, and home owners especially, should be given some relief from the burden of taxation they are now required to pay to help raise the ever-increasing sums needed for education and other community services.
[DOT] (5:30 p.m.)
The intent of the notice of motion proposed by the hon. member for Portneuf is good in that it would provide an incentive to home owners and increase our home owning society. To that extent I support it, but perhaps the aspect relating to school taxes might conflict with the school tax rebate which is in effect in some provinces. Nevertheless, any incentive to home ownership is desirable.
The hon. member for Middlesex East pointed out that this would mean a substantial loss of revenue to the federal and provincial governments. To that I simply reply it is high time that restraint was placed on government spending, particularly when one reads of the tremendous increase in expenditure by some branches of the government service, notably the recent example of pentitentiary construction in the maritimes. Some five years ago a contract was awarded for $2.5 million but the cost has since risen to $11 million. Something has gone wrong when expenditures can soar that high after a contract has been let. I say that the government has a responsibility to make a closer check on its expenditures in all phases of activity. Loss of revenue might be recovered by watching expenditures more closely. If they were watched more closely we would not have the prophesied deficit that the hon. member for Middlesex East warned us about.
I do not share the view of the Minister of Finance (Mr. Sharp), in his reply to a motion presented some time ago by the hon. member for Parkdale (Mr. Haidasz), that acknowledgement of home owners lay some special tax concession would be unfair to non-home owners. This is like saying that because we are not all farmers legislation which is benefi-

June 14, 1967
Income Tax Act
cial to farmers is inequitable, and because we are not all industrialists legislating anything that will give incentive to industry is inequitable. That is no excuse for the government not acting to give a benefit to home owners.
The housing area is one which is badly neglected by the government. Certainly this is true with respect to rural housing and it applies even more to urban housing. I can support in principle any measure that will increase home ownership on the part of Canadians.


Mrs. Grace MacXnnis (Vancouver-Kings-way):: Mr. Speaker, this notice of motion is proof of the fact that the government's housing policies are quite inadequate to cater for the people of Canada. Although the notice of motion springs from the best possible motives, in my opinion its adoption would not do the job that the sponsor has in mind. If implemented it would be exceedingly inequitable. It calls for deduction from income tax of real estate, municipal and school taxes. It does nothing to limit taxes according to people's income whereby little people could make large deductions and big people small deductions. The notice of motion would discriminate against the small property owner and favour the large property owner. It would discriminate against people who rent their homes and favour people who own their homes.
Hon. members who sat on the consumer prices committee know that the proportion of people who rent homes is increasing and the proportion who own homes is declining. Recently the minister in charge of C.M.H.C. stated that the percentage of people in the larger centres who can hope to own their own homes will decline because of the costs of building fully modern homes. According to the last figure I saw, no one in the city of Toronto can hope to own a modern home unless he has an income of about $8,200 a year. Only 12 per cent of the Canadian people have an income of $8,200 or more.
We will have to deal with the housing crisis and the income crisis in ways much more far reaching than proposed by this notice of motion. On a number of occasions we in the New Democratic party have made proposals which would provide housing to people at prices they can afford. We have made proposals to keep mortgage rates lower and to provide different types of housing for lower income people. We have also made proposals for increasing the income of people in various ways. This resolution would do none of these things. It is also impractical because it would
[Mr. Enns.l
intrude on the municipal and provincial fields instead of dealing strictly with the federal tax field.
For these reasons we in this group feel this notice of motion is not calculated to help the people who need help the most.


Alexander Bell Patterson: Mr. Speaker, I listened with a great deal of interest to the hon. member for Middlesex East (Mr. Lind) as he gave his definition of the policies of the government. He said that the Liberal government has always been the friend of the man who carries a lunch pail and is concerned about people who desire to own and occupy their own homes. I do not think the hon. member will be really surprised if he finds that his views are not enthusiastically shared by all members of the house. The fact that this notice of motion is before us and the fact that this matter has been drawn to the attention of the government on many occasions are indicative of the dissatisfaction that is to be found with respect to government policies.
[DOT] (5:40 p.m.)
I believe we can support the objective that the hon. member for Portneuf (Mr. Godin) has in mind in introducing this notice of motion, the purpose of which I understand is to assist persons who desire to do so to own their own homes. It has been the stated policy of this group for a considerable length of time that we should do everything we possibly can to encourage home ownership because of the sense of security it gives to those who occupy their own homes. This is something which makes a substantial contribution to the development of true family life and has so many beneficial effects for society as a whole. Therefore I believe that anything which would assist in the realization of this objective should receive the very careful consideration of the government.
On many occasions it has been pointed out that home ownership is being pushed farther and farther beyond the capabilities of the ordinary citizens of Canada. One of the contributing factors, of course, is the high cost of capital. We have found that as the population has continued to increase and as the money supply has become more and more restricted, those in the lower or middle income groups have been entirely unable to obtain the necessary finances in order to proceed with their building plans.
Another factor which has entered into the cost of home ownership and which points out the neglect of the government in this field is
June 14, 1967

the conflict in their policies. We remember the time when they introduced a measure to give a $500 winter bonus to those who built homes in the winter, but then they turned around and withdrew the tax exemption on building materials which more than offset the beneficial effect of the other program they had instituted.
In this regard at least-and I could cite many more examples-I suggest that the government's policies have been conflicting and, of course, in conflict with the stated purpose of the government. Therefore I believe that anything which will contribute to home ownership and the feeling of security which results therefrom should be encouraged. I am not sure just what the over-all effect would be of the suggestion which has been put forward by the hon. member for Portneuf. It may be that there are other ways in which the problem can be resolved more easily. I do say, however, that these are matters which should be given very careful consideration.
There is another matter which we have raised and which I believe should also be considered. I refer to the allowance of depreciation on private homes. I cannot see any reason that this should not be possible. I do not see any reason that it should not be desirable. It would be of tremendous assistance to those who are seeking to own their own homes.
We all know that the government has been constantly reminded of the housing needs of Canadians. Various members have brought this to the attention of the government. The minister who is in charge of this area of concern has rather played down the fact that there is a national crisis. The minister states everything possible is being done and that they are making progress. He suggests that the situation is not nearly as bad as it has been portrayed by various hon. members. It may be that there is an increase in housing starts. It may be that some developments are taking place. I suggest, however, that they are far too inadequate to meet the needs and satisfy the demands of those who wish to acquire better housing or satisfy the needs of the new family units which are being organized constantly in our country.
This notice of motion calls for amendment of the Income Tax Act. The act is a real hunting ground for those interested in finding matters which should be taken into account because I cannot think of any other field of government activity in which there are more inequities and inadequacies than there are in the income tax legislation. Therefore we could spend a long time analysing the act and
Income Tax Act
making recommendations in connection therewith.
I believe the idea behind this whole exercise is to ensure that the people of Canada have sufficient income to meet their basic needs. When the basic deduction for income tax purposes was established it was considered that $1,000 was about the lowest amount that people could get by on. That was many years ago. The cost of living has spiralled but the basic deduction of $1,000 still remains. I say that it is a completely inadequate figure. 1 cannot understand any government taking the position that that level should be retained. We have beaten the Liberal government over the head and we used to beat the Conservative government over the head, but neither party has been willing to make the necessary amendments. I feel, therefore, that it should be one of our objectives to try to leave in the hands of the Canadian people sufficient of their income to meet their requirements and enable them to provide for themselves.
I submit that it should not be necessary for the government to enter into so many other fields of activity in order to let on that they are giving something to the Canadian taxpayers when, after all, they are just returning a little of what they have taken from them. Because of the government's unwillingness to meet this problem in any substantial degree, I believe that any of these adjustments which are suggested should be considered. I suggest that some of them are highly desirable even though they are palliatives rather than a cure for the problem of a shortage of purchasing power in the hands of the people.
e (5:50 p.m.)


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I am pleased to have the opportunity to voice my personal views on the motion brought forward by the hon. member for Portneuf (Mr. Godin).
As a rule, it is obvious that we cannot but approve the basic and humanitarian reasons put forward by the hon. member for Portneuf. He advocates the protection of private property, small owners, families, workers, and small wage-earners. He suggests that the government should take the necessary steps to render a real service to the small owner by reducing his burden and helping him to make ends meet.
This question had been raised in the house on June 12 by the hon. member for Parkdale (Mr. Haidasz) who also suggested that the owners of houses should be in a position to

June 14, 1967
Business of the House
deduct from their taxable income real estate taxes and interests on mortgages.
To this, the hon. Minister of Finance (Mr. Sharp), when we were discussing the estimates of his department and he was answering some questions raised by the hon. members, answered, and I quote from page 1433 of the June 12 Hansard:
On the question of whether there should be a deduction on home owners' taxable income, we have looked at the matter from time to time and found that it has one obvious fault, namely that it is a suggestion which favours one particular kind of resident, that is one who happens to own his home and not rent it. Of course this is not fair, particularly to those who live in apartment buildings. So I felt that as Minister of Finance I could not recommend to the government the proposals put before me by the mayor of Toronto, which have been mentioned by the hon. member for Parkdale.
Further, if we refer to volume III of the report of the royal commission on taxation, which deals mainly with the taxation of individuals and families, we find on page 49 a paragraph dealing precisely with the question raised by the hon. member for Portneuf: And I quote:
The foregoing argument has implications for the question of whether municipal taxes should be deductible by home owners. It is often urged that property taxes should be deductible from income on the grounds that this would stimulate home ownership, increase home construction, and make it possible for municipalities to raise more revenue. To the extent that municipal taxes cannot be regarded as a charge for specific municipal services which benefit the property, municipal property taxes are regressive. It can be argued that some relief for such taxes should be granted against income taxes as a deduction or a credit, in order to bring the burden of taxation more closely in line with ability to pay. However, home owners already have an advantage in regard to income tax through the fact that imputed income is not taxed.
And the imputed income, as I understand it, is the difference that may exist between the owner of a house living in it, who has no rent to pay, who does not deduct a rent from his taxable income and, on the other hand, the owner who rents his house and receives a rent from his tenant, the amount he receives being taxable.
I shall continue my quotation:
-is not taxed. It may well be desirable to work out techniques that will give municipalities more revenues without raising property taxes, but this objective can be accomplished in other ways that are not so inequitable between taxpayers.
This report of the royal commission on taxation will be discussed shortly. It is also expected that some recommendations will be disproved and rejected by the experts, but it
is most probable also that several of those recommendations will result in pieces of legislation designed to help among others, small wage-earners and to improve the Canadian economy.
It is suggested that such an aim could be achieved by other means which would not result in unfairness for taxpayers. Unfairness among taxpayers should always be avoided.
The royal commission expresses similar views with regard to the deduction of mortgage interests paid by home owners. Also, as one of my colleagues said earlier, there are other ways to protect the small owner or wage-earner.
Who would benefit most from this proposition? As stated a moment ago, it is the one with the large income. It is not the one with the small income, and we are always trying to protect the small wage-earners.
In closing, as an example and according to my information, in the case of a home owner whose property taxes would be approximately $1,000 and whose income is considerable, the tax he would have to pay on the last slice of his income, let us say it is approximately 50 per cent, the deduction of the property tax would save him something, approximately $500.
If, for instance, you take the case of a wage-earner whose salary is small and whose property tax amounts to $500 yearly and whose last slice of income would come under an income tax rate of 25 per cent, this deduction would save only $125 for this wage-earner, while the one with the larger income would benefit more from this measure.


Mr. Deputy Speaker:: Order, please. The hour appointed for the consideration of private members' business has now expired.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: Mr. Speaker, may we have an announcement regarding the business for tomorrow and Friday?


John Robert (Jack) Nicholson: Mr. Speaker, it is my understanding that there has been no change in the announced business. Tomorrow we will proceed with consideration of the resolution covering the legislation regarding the Cape Breton Development Corporation.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, June 15, 1967