1967-10-11

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

Mr. Coales: Is it the intention of the Solicitor General to have an investigation carried out into the substantial delays associated with the construction of the young offenders penal institution at Springhill, Nova Scotia and, if so, what type of investigation will be carried out and will the report be made available to the public?


Hon. L. T. Pennell (Solicitor General):: No.
A good deal of the delay was caused by extra rock excavation that could not reasonably have been anticipated and in any event the delay in completion of the contract did not prejudice the planned development of penitentiary operations in the Atlantic provinces.


FEDERAL PAYMENTS TO QUEBEC
Mr. Allard: 1.	How much money did the federal government pay to the province of Quebec during the fiscal year 1966-67 (approximately) under (a) unconditional grants (b) conditional grants (c) payments to individuals (i) unemployment insurance benefits (ii) family allowances (hi) old age security (iv) other?
2.	What is the total amount of all these payments for the said fiscal year?
3.	What is the amount per capita paid under each of these headings and how does this amount compare with the per capita amount paid in each of the other nine provinces?


Hon. Mitchell Sharp (Minister of Finance):: 1.	(a)
(Millions of
Unconditional grants	dollars)
Statutory subsidies	4.0
Equalization	150.4
Share of federal estate	
tax(l)	11.5
Transfer of share of income	
tax paid by certain	
utility corporations	.6
Total(2)	166.5
(b)	
	(Millions of
Conditional grants (3)	dollars)
i Health	185.3*
ii Welfare	84.3*
iii Technical and vocational	
training	82.6*
iv Agriculture	1.3
v Emergency measures	
organization	1.6
vi ARDA	4.3
vii Municipal winter works	19.6
viii Forestry	1.9
ix Highways	44.4
x Centennial grants	2.9
xi Fishery	.3
Total	428.5
(c)	
i Unemployment insurance	
benefits	96.2
ii Family allowances	165.2
iii Old age security	238.4
iv Others	
War veterans pensions	22.7
War veterans allowances	12.6
Total 535.1
2.	Total amount for Canada as a whole	3939.7*
2972
Questions

October 11, 1967
Payments to provincial governments, municipalities and institutions
(Dollars)
	Uncon- ditional	Conditional
	grants	grants
	per<2>
per
	capita(j)	capita(3)
Newfoundland	... 96.6	81.9Prince Edward Island	... 103.6	60.3Nova Scotia	... 70.0	79.8New Brunswick	... 75.3	66.3Quebec	... 26.8	74.1* * *Ontario	... .8	55.7Manitoba	... 31.0	57.3Saskatchewan	... 36.8	59.9Alberta	... 4.0	68.5British Columbia	... 1.0	58.4
Payments to individuals in the provinces
(Dollars)
Unemploy- ment insurance benefit per capita	Family allowances per capita	Old age security per capita	Veterans' pension and allowances per capita36.3	34.5	41.2	10.727.5	29.4	76.1	30.322.3	28.4	63.5	25.926.4	30.5	57.0	21.116.6	28.6	41.2	6.112.8	26.6	56.7	15.611.1	26.6	65.0	18.89.0	28.2	66.4	12.98.1	29.1	49.1	13.819.5	25.9	69.2	25.7
O) The provinces receive 75 per cent of estate tax. However in respect of Quebec and Ontario and British Columbia 50 per cent is in the form of an abatement and therefore is not included in the $11.5 million.
(b Total unconditional grants do not include the value of general federal tax abatement.
(s) Payments under the programs covered by contracting out arrangements have been adjusted to indicate the federal contribution, i.e. tax abatement, equalization and operating cost adjustment. An asterisk marks those programs where contracting out has occurred either in whole or in part.
(*) j?or purposes of comparability, this column excludes the shares of federal estate tax and includes the Atlantic provinces adjustment grants and the Newfoundland additional grant.


PRESENCE OF R.C.M.P. OFFICER ON ROAD NEAR SMITHERS, B.C.
Mr. Howard: 1.	Between the hours of 1.00 o'clock a.m. and 3.00 o'clock a.m. of June 30, 1967, was an officer or staff member of the Royal Canadian Mounted Police in the vicinity of an area locally referred to as the Glacier Gulch road which is about 3 or 4 miles from the community of Smithers, B.C., and, if so, what is the name of and rank held by the particular officer or the staff member referred to?
2.	Did the said member of the Royal Canadian Mounted Police remove his revolver from his holster and, if so, for what purpose?
3.	Did the said member of the Royal Canadian Mounted Police fire his revolver and, if so, at approximately what time and for what purpose?
4.	Did the said member of the Royal Canadian Mounted Police chase any person while his revolver was openly displayed in his hand and, if so, for what purpose?
5.	Was there a group of people in attendance at the said Glacier Gulch road area at the time referred to in part 1, and, if so, who were these people and for what purpose were they in the area?
6.	Did the said Royal Canadian Mounted Police member have the opinion that the group was there for any criminal purpose and, if so, what was that purpose?


Lawrence T. Pennell: 1,
2, 3, 4 and 5. Between the hours of 1 and 3 o'clock a.m. on June 30, 1967, Constable Gary Bertwin Schuett of the R.C.M. Police, acting as a provincial peace officer under the contract between the governments of Canada and British Columbia, was investigating suspected contraventions of the provincial liquor laws in the area known as Glacier Gulch road near Smithers, B.C. When members of the group of young people from the Smithers area whom he was investigating began to flee, Constable Schuett drew his service revolver, fired a shot into the air and ordered the suspects to halt. He then gave chase, returning his revolver to its holster as he did so. He had to abandon the chase and return to Smithers for medical attention due to an injury he received in the course of the investigation.


PROTESTS AT POSTAL RATE INCREASES
Mr. Dinsdale: 1.	Has the Post Office Department announced that effective October 1, 1967, the library book postage rate will be increased by 70 per cent?
October 11, 1967

2.	Has the Postmaster General received any protests from libraries affected by this increase?
3. If so (a) what is the nature of the protests (b) what action has the government taken to deal with the matter?


Hon. Jean-Pierre Cote (Postmaster General):: 1. Yes.
2.	Yes.
3.	(a) that the increase in postage rates would hinder the development of the interlibrary loan program, (b) the question of adjustment of rates on library books has been deferred pending a detailed study of representations received from the Canadian Library Association.


FOOD AND DRUG DIRECTORATE
Mr. Isabelle: 1.	How many inspectors were employed by the food and drug directorate in 1S63, 1964, 1965 and 1966?
2.	How many specialists were there to inspect drugs obtainable only on prescription?
3.	How many of the 485 manufacturers and distributors of pharmaceutical products were inspected by the food and drug directorate in 1963, 1964, 1965 and 1966?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: 1. 1962-63, 93; 1963-64, 120; 1964-65, 148; 1965-66, 170; 1966-67, 178.
2.	Not available. Drug programs are not directed specifically to the inspection of drugs obtainable only on prescription.
3.	The number of manufacturers and distributors of pharmaceutical products change on a day to day basis. Inspections completed in the years 1963 to 1966 were as follows: 1963, 242; 1964, 258; 1965, 409; 1966, 551.


NATIONAL CAPITAL COMMISSION PRIORITIES
Mr. Isabelle: 1.	Has any committee or individual been named to decide on the priority of projects to be carried out in the development of parks and parkways within the master plan of the National Capital Commission and, if so (a) who are the members of the committee or what person has been named (b) what project has immediate precedence?
2.	What will be the architectural style of the new station at Hull, and when will the work commence?
Questions


Hon. G. J. Mcllrailh (Minister of Public Works):: 1. The National Capital Commission has followed the practices laid down by the Treasury Board in the preparation of its program review and estimates in arriving at the priorities for the development of parks and parkways within the national capital area. In substance, the recommendations of the staff of the commission are reviewed by the commission and then submitted through the minister to the Treasury Board or governor in council as the case may require for consideration and appropriate action.
2. The architectural style of the new station in Hull will be contemporary. Tenders will be advertised immediately upon approval of the working drawings which were submitted to the Canadian Pacific Railway on August 30, 1967.


COMPANY OF YOUNG CANADIANS
Mr. Laprise: 1.	What has been the cost of the Company of Young Canadians each year since its inception?
2.	How many of the company's administrative employees are (a) French speaking (b) English speaking?
3.	How many of the company's volunteers are (a) French speaking (,b) English speaking?


Mr. John R. Malheson (Parliamentary Secretary to Prime Minister):: I am informed by the Company of Young Canadians as follows:
1.	1965-66, $45,043.00 (pilot project); 196667, $857,950.00.
2.	(a) 22; (b) 29.
3.	(a) 21 volunteers, eight trainees;, (b) 71 volunteers, 44 trainees.


ASSISTANCE UNDER TECHNICAL TRAINING ACT
Mr. Orlikow: Under the formula for the equitable distribution among the provinces of federal contributions under the Technical and Vocational Training Assistance Act for financial assistance to the capital cost of training facilities, how much has already been paid, or agreed to be paid, to each province, both in dollars and as a percentage of the total amount each province is entitled to receive under the formula, and how much remains to be paid, or agreed to be paid, to each province under the formula from March 31, 1964, to March 31, 1967?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: October IX, 1967
Questions
Total amounts claimable ($800 per capita	Federal	%of claimable amount	Balancepayments	paid to	availableProvince	formula)	Aug. 31/67	Aug. 31/67	for paymentNewfoundland	
Prince Edward Island..
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
Yukon	
North West Territories
$ 35,063,180	$ 21,400,377	61 %7,100,000	2,639,615	37 %51,391,180	11,014,069	21.4%42,811,180	7,299,898	17 %373,940,720	133,930,596	36 %349,506,360	280,866,907	80.3%56,646,360	11,940,594	21 %58,291,180	13,596,585	23.3%79,203,180	68,781,861	86.8%90,122,360	44,069,055	48.8%924,035	954,439	103.2%'1,359,180	70,444	5 %
*
13,662,803
4,460,385
40,377,111
35,511,282
240,010,124
68,639,453
44,705,766
44,694,595
10,421,319
46,053,305
Nil
1,288,736
Total
1,146,358,915
596,564,440
549,824,879
The $800. per capita limit did not apply to claims made prior to March 31, 1967.


FLOATING MINES OFF B.C. COAST
Mr. Cameron (Nanaimo-: Cowichan-The Islands):
1.	Have any reports been received from the R.C.A.F. or the R.C.M.P. of the presence of floating mines on the coast of British Columbia?
2.	If so, have any such reports contained information about the disposal of such mines?
3.	If such reports have been received, has the government been able to determine the origin of these mines and have protests been lodged with the government of the country of origin?


Hon. Leo Cadieux (Minister of National Defence):: 1. During 1967 neither the R.C.M.P. nor the Canadian forces have received reports of the presence of floating or submerged mines on the coast of British Columbia.
2 and 3. Not applicable.


IMMIGRATION OFFICES, SASKATCHEWAN
Mr. Souiham: 1.	How many regional immigration officers are presently stationed at various centres throughout the province of Saskatchewan?
2.	How many of these offices were closed in Saskatchewan in 1967?
3.	When was the immigration office in Estevan, Saskatchewan, closed and for what reason?


John Carr Munro: 1.	There are 12 officers of the Immigration Division stationed in the province of Saskatchewan which forms a part of the prairie region of the Canada immigration division.
2.	Estevan and North Battleford.
[Mr. Munro. 1
3. The immigration office in Estevan, Saskatchewan was closed on April 28, 1967. Its responsibilities were transferred to the Canada manpower office of this department in Estevan. This measure not only consolidated the operations of the two offices without any reduction in the services provided to the public, but also resulted in certain economies being realized by having one office where two formerly were required.


CANADIAN FORCES PROPERTY IN FRANCE
Mr. McQuaid: 1.	Has the study of Canada's Interest in property formerly used by the Canadian armed forces in France yet been completed?
2.	If so (a) what has been determined as the actual value of this property at the time the Canadian forces left France (b) what was the actual cost to the government of Canada of this property (e) has any arrangement been arrived at whereby the government of Canada will be compensated for the property left in France (d) what is the amount of this compensation?
Hon. Leo Cadieux (Minister of National
Defence): 1. No. The question of possible claims for compensation for the value of NATO commonly funded investment on French territory is currently under consideration by a working group of NATO nations. Until the results of this multi-lateral study are known, Canada is deferring action on any bilateral claims.
2. Not applicable.
October 11. 1967


PRINTING OF REVISED STATUTES
Mr. Bell (Carleton): 1.	What format will be used in printing the revised statutes of Canada, 1967?
2.	Will the edition be bilingual?
3.	What number of volumes is it expected will be required?
4.	What number of volumes were there in each of the English and French editions of the revised statutes of Canada 1952 and 1927?
5.	Has any consideration been given to the use of stock colloquially called Bible paper in order to reduce the number of volumes?
6.	If so, with what result?


Hon.   P.-E. Trudeau@Minister of Justice: 1. Subject to certain technical considerations relating to modern printing equipment, it is contemplated that the format of the revision will be as follows: A two column bilingual
Questions
make-up, each column being 16 picas in width on a page of which the outside dimensions would be 8i"xl0|", using a type size for the text of 10/11 point modern, varied for schedules to 8/9 point modern and 7 points for marginal notes. The spacing between columns would be 12 points.
2.	Yes.
3.	It is at present estimated that the revision may run to 7 or 8 volumes, on the basis of approximately 370 chapters and 16,000 pages of copy. This estimate allows for an increase in the number of chapters and an increase of 25% by reason of the two-column format. The estimate does not include subject matter indices, the size of which has not yet been estimated.
4.	The number of volumes and pages of the earlier revisions are as follows:
Revision of:	Volumes	Pages	Chapters1886	French: 2	2747	139English: 2	2657	Total 4	5404	1906	French: 4	3772	155English: 4	3637	Total 8	7409	1927	French: 5	5174	217English: 5	4913	Total 10	10087	1952	French: 6	7068	340English: 6	6690	Total 12	13758	5.	The paper stock colloquially called "Bible paper" is not considered suitable in point of opacity, acidity and weight.6.	See answer to question 5.


REDUCTION IN ARMED FORCES
Mr. Forreslall: 1.	From which branches of the Canadian forces will the proposed cutback of 6,000 men be made?
2.	What percentage, or total number, will be cut from the present complement of (a) maritime command (b) mobile command (c) air defence command (d) air transport command?
3.	Will natural attrition, such as normal retirement, be the only vehicle in attaining this reduction and, if not, what other methods will be used to service this end?


Léo Alphonse Joseph Cadieux: 1 and 2. As no final decision has been made on the total cutback to be made in the Canadian armed forces, the number or percentage in each branch and command is unknown.
3.	Yes.


MARITIME COMMAND AIRCRAFT
Mr. Forreslall: 1.	How many aircraft, by type, presently comprise the total complement of maritime command?
2.	What, in years, is the (a) full life (b) mid life, expectancy of each?
3.	Will these be replaced or will other types be introduced, as the present equipment becomes worn out?

October 11, 1367
Questions
4. Will the navy's "Tracker" be replaced and, if so, by what type and by what date?


Léo Alphonse Joseph Cadieux: 1.
Aircraft	Number
Argus	29
Sea King Helicopter	22
H04S3 Helicopter	5
Tracker	46
Neptune	20
Silver Star	9
2. (a) Life expectancy dates are under constant review and may vary from year to year	
dependent upon a number	of factors. Currently these dates are estimated for the above	
aircraft to be:	
Argus	1974
Sea King Helicopter	1980
H04S3 Helicopter	1970
Tracker	1975
Neptune	1974
Silver Star	1974
These dates do not necessarily indicate the period these aircraft will be maintained in service which will depend on other considerations in addition to life expectancy.
(b) The term "mid-life" is not generally applied to all aircraft up-dating programs. However, the Tracker aircraft which were introduced into service in 1956 are now undergoing a major equipment revision which has been termed "mid-life" modernization".
3 and 4. No decisions have been taken concerning replacement programs at the present time.


HARBOUR IMPROVEMENTS, SMELT BROOK, N.S.
Mr. Muir (Cape Breton: North and Victoria):
1.	What harbour improvements, in detail, have been carried out at Smelt Brook, Victoria county, Nova Scotia, since 1958?
2.	How much money has been expended to provide such improvements, in detail?
3.	What further improvements are planned for Smelt Brook and what will be the cost?
Hon. G. J. Mcllraith (Minister of Public
Works): 1. and 2.
Year	Project	Cost1958	Skidway construction	$2,150.1959	Repairs	1,000.1960	Skidway extension	1,270.1961	Clearing rocks and debris	75.1964	Repairs to haulout shed	361.1965	Repairs and painting haulout shed	500.1966	Install chain guard	45.1967	Repairs haulout engine	115.

3.	At the moment there are no plans for improvements in the immediate future.


QUALIFYING STATISTICS FOR MANPOWER CENTRES
Mr. Andras: Related to the criteria of the Department of Industry (ADA) designated area incentive program, what are the pertinent qualifying statistics for the manpower centre (a) in which North Bay and Timmins, Ontario, are located (b) in which Brandon and Minnedosa, Manitoba, are located (c) in which Midland, Ontario, is located, each of which has been designated, as compared to the statistics for the four manpower centres in Northwest Ontario, which have not been designated?


Hon. C. M. Drury (Minister of Industry):: (a) The Timmins and North Bay Canada manpower centres were recognized as components of an economic region consisting of the Canada manpower centres of Kirkland Lake, North Bay, New Liskeard and Timmins. The region registered a negative annual average change in employment of 2.0 per cent. Individually the corresponding percentage change in employment was, as follows: Kirkland Lake -9.1, North Bay -0.6, New Liskeard 2.8 and Timmins -2.8. Accordingly, the areas of Timmins and North Bay qualified for designation either when considered individually or as components of a region under the criterion pertaining to designation of such areas and regions in which for the most recent five years there has been a decline in the level of employment, (b) The Canada manpower centre area of Brandon with an average nonfarm family income of $4,189 qualified under the criterion providing for the designation of such areas in which the average non-farm family income is below $4,250.
The community of Minnedosa lies within Census Division 10 and within a portion that forms part of the Canada manpower centre area of Portage la Prairie. The latter as a Canada manpower centre area does not qualify for designation, however, census division 10 with an average non-farm family income of $3,900 and being contiguous to the designated Canada manpower centre area of Dauphin qualifies under the provision for designating census divisions in which the annual average non-farm family income is below $4,250 and providing they are contiguous to areas that are designated, (c) The Canada manpower centre area of Midland was recognized as a component of an economic region comprised of the areas of Parry Sound, Bracebridge, Midland, Collingwood and Owen
Ociober 11, 1967

Sound. This region had an average non-farm family income of $4,241. Accordingly, the area of Midland qualified for designation under the provision for the grouping of Canada manpower centre areas traditionally recognized as a distinct geographic and economic region and which, considered as a whole, met the criterion relating to the designation of such areas having an average non-farm family income below $4,250.
Comparable statistics for the four Canada manpower centres of Fort Frances, Fort William, Kenora and Port Arthur individually and grouped are as follows: Average annual percentage change in employment growth- Fort Frances 1.6, Fort William 2.5, Kenora 9.6, Port Arthur 1.2, and grouped as an economic region 2.9. Average non-farm family income-Fort Frances $5,114, Fort William $5,440, Kenora $4,966, Port Arthur $5,480, and grouped as an economic region $5,321.


TRAVELLING EXPENSES OF MINERS, ELLIOT LAKE, ONT.
Mr. Laprise: Has any amount of money been paid for the travelling expenses of the miners of the Elliot Lake area in Ontario, who have been discharged following the closing down of some mines in that area?


John Carr Munro: Yes. When the demand for uranium decreased and the mines in the Elliot Lake area were laying off miners, Elliot Lake was a designated area and miners were eligible to receive their travelling expenses, also the cost of moving their household eflects, to other areas where employment was available for them. Elliot Lake ceased to be a designated area in December 1965.


'LEAD YARDS IN DESTROYER ESCORT PROGRAM
Mr. McCleave: Which Canadian shipyard or yards has or have been selected as the lead yard(s) in the destroyer escort program?


Charles Mills (Bud) Drury: Mr. Speaker, the Davie Shipbuilding Limited of Lauzon, Quebec, and Marine Industries Limited, Sorel, Quebec, have been invited to bid as lead yards on the D.D.H. destroyer program.
Motions for Papers QUESTIONS PASSED AS ORDERS FOR RETURNS


NEWSPAPER ADVERTISING OF FEDERAL PROGRAMS
Mr. Jorgenson: 1.	How many federal government programs have been explained to the public by means of paid advertisements in daily, weekly and other publications since April, 1963?
2.	What are the programs that have been dealt with in this manner?
3.	What are the names of the newspapers or other publications that have carried such advertising?
4.	What has been the cost of advertising each of these programs in each of the newspapers or other publications?
Return tabled.


GOVERNMENT CONTROL OF FIREARMS
Mr. Valade: 1.	Has the government any way of controlling the purchase and sale of firearms for distribution?
2.	Are any firearms not under government control and, if so, which class?
3.	Does the government have statistics on the quantity and distribution of imported firearms sold in Canada and, if so, what are the importation and sales figures for each class of firearms for each of the last five years?
4.	Are imported firearms under government control and, if so, what are the regulations?
Return tabled.


WAGES AND EMPLOYEES OF CROWN CORPORATIONS
Mr. Caouefle: For each of the past five years and in respect of each of the crown corporations defined as proprietary corporations by the Financial Administration Act, what was (a) the total amount of salaries and wages paid to date (b) the total number of employees?
Return tabled.


MOTIONS FOR PAPERS
Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, notice of motion for production of papers No. 18 is acceptable to the government.
I ask, Mr. Speaker, that the other notices of motions be allowed to stand.

October 11, 1967
Inquiries of the Ministry


CORRESPONDENCE RESPECTING STATEMENT BY GENERAL DE GAULLE
[Stage Direction]
Motion No. 18-Mr. Gregoire:
That an order ol the house do issue for a copy of all correspondence, letters, messages, telegrams and other communications received by the office of the Prime Minister at the time of General de Gaulle's visit to Quebec relating to the statement of the president of the French republic "Vive le Quebec libre."
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: Mr. Speaker, I would like to direct a question to the Minister of Finance. Is the government planning the issue of economic guide lines to those whose activities have the greatest influence on the cost of living, as one means of trying to stem the rapid increase in the cost of living?


Mitchell William Sharp: As I said in the house the other day, the government is giving consideration to an organized campaign to mobilize public opinion in favour of greater stability in costs and prices, and I have invited all those concerned to be considering this question. I hope they are doing so and will be discussing with us and among themselves how best this might be carried out. Whether this would be called guide lines I am not certain, but when the government itself has taken the necessary fiscal action I would hope to have the cooperation of the public, organized management and labour in stabilizing more effectively than hitherto increases in prices and costs.


Mr. T. C. Douglas (Burnaby-Coquitlam):: In
view of the fact that the cost of living has risen more rapidly in Canada than in almost any other western country, according to an O.E.C.D. report, does the minister's program include the setting up of a prices review board to gather information as to the relationship between corporation profits, consumer prices and incomes in Canada?


Mitchell William Sharp: I would hesitate to forecast the exact nature of the machinery which would be brought into being, but certainly the government recognizes the intimate relationship between earnings and the program to stabilize costs.


Thomas Clement (Tommy) Douglas: May I ask the minister when he intends to reveal the nature of this program, or of these guide lines, which the government is preparing at the present time.


Mitchell William Sharp: As I said in my statement in the House of Commons the other day and as I have repeated elsewhere, I believe it is up to the government to show active leadership. Unless we do so I do not believe we shall get the necessary degree of co-operation. I am sure we shall give this leadership, and at that point the program will be announced.


Hon. Michael Siarr (Leader of ihe Opposition):: In order that this system of guide lines may have some result, is the minister contemplating calling a conference of management, labour and others who may be involved, seeking their advice and co-operation?


Mitchell William Sharp: I have already invited such advice and co-operation, and I would think a meeting with the principal parties concerned, including the trade unions, would be part of the program.


Mr. J. P. Nowlan (Digby-Annapolis-Kings):: A supplementary question for the Minister of Finance. In hoping for co-operation and advice from other interested parties, and in view of the failure of the President of the Treasury Board in his speech to list those obsolete expenditure programs postponed or eliminated-


Mr. Speaker:: Order. Is the hon. member making a speech or asking a question?


John Patrick (Pat) Nowlan: Would the minister announce now those obsolete expenditure programs which have been eliminated?


Mitchell William Sharp: I think my colleague the Minister of National Revenue did an admirable job yesterday in revealing the extent to which the government was pursuing prudent financial policies. In due course all these cuts will be announced.


Mr. Speaker:: Order. I wonder whether we should not go on to another subject. Hon. members know that in a few moments we shall be returning to the consideration of the budget.


Mr. Real Caouetfe (Villeneuve):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Finance. Will he invite the various consumer associations to
October 11, 1967

Inquiries of the Ministry
attend the discussions which will take place	POLLUTION
with regard to the cost of living and consum- communication from u.s. respecting
er services.	Niagara river


Mitchell William Sharp: Mr. Speaker, I am sure there is no one more interested than consumers in the successful outcome of the anti-inflationary policies, and certainly they will be welcomed.


PUBLIC SERVICE
[Stage Direction]
LEGISLATION to increase pensions of RETIRED CIVIL SERVANTS
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the Prime Minister. Why is it that the list of legislation which was placed on Hansard yesterday makes no mention of legislation to increase the pensions of retired civil servants?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, that matter is still under consideration.


Stanley Howard Knowles: I have a supplementary question, Mr. Speaker. Will a decision be taken in time for legislation to be introduced at this session?


Lester Bowles Pearson: I am not able to answer that question at this moment.


Stanley Howard Knowles: Then perhaps we should deal with it on the ten o'clock show.


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-sioke):: Mr. Speaker, my question is for the Secretary of State in her capacity as the minister reporting for the C.B.C., but possibly the parliamentary secretary could answer the question. Now that the University of Toronto has announced the line-up of visiting lecturers for its third annual teach-in commencing October 20, including such luminaries as Krishna Menon, can we expect again this year the usual saturation coverage at public expense by the C.B.C.?


Mr. Speaker:: Order. The question cannot be asked at this time.
On the orders of the day:


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Has the minister received a communication from Secretary Udall of the United States with reference to the pollution of the Niagara river and the role of the Internal Joint Commission?


Hon. Paul Martin (Secretary of State for External Affairs):: I have not seen such a request, but I will make inquiries to see whether one came in.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the fact that the prime minister of Poland and the prime minister of India are reportedly discussing some variety of peace initiatives in Viet Nam, and in view of the fact that Canada together with India and Poland constitute the membership of the International Control Commission in Viet Nam, can the minister tell us whether Canada is presently included in the discussions between India and Poland?


Paul Joseph James Martin: Mr. Speaker, it must be obvious that we are not included. This discussion is taking place in Warsaw. But if my hon. friend's question is directed to the invitation by the president of the federation of the United Nations associations to a meeting of the two co-chairman countries and the three commission powers, the answer is yes. The Prime Minister has received an invitation to attend a meeting with Great Britain, the Soviet union, Poland, India and Canada. We have indicated in principle our willingness to attend such a meeting. We have advised the other invitees of our response. We have not yet heard from them whether they would join in such a meeting, which might be a very useful exercise in the common desire to bring about peace talks in respect of the war in Viet Nam.


Wallace Bickford (Wally) Nesbitt: May I ask a supplementary question, Mr. Speaker. The question I asked

October 11, 1967
Inquiries of the Ministry was whether Canada was included in discussions between India and Poland which are now taking place in Warsaw. I asked the question because we do have an ambassador to Poland, and I thought perhaps he might have been asked.


Mr. Speaker:: Order, please. Is the hon. member asking a supplementary question?


Wallace Bickford (Wally) Nesbitt: I was about to ask the minister whether Canada is planning any further peace initiative of her own in this regard.


Paul Joseph James Martin: Mr. Speaker, the prime minister of India is making a visit to Poland and to a number of other countries. Our ambassador has reported on this visit. He has had an opportunity to see the prime minister of India at Warsaw. Canada is very interested in continuing discussions with India and Poland in respect of matters which for a long time now have engaged our common attention as members of the commission.


Mr.  R. Gordon L. Fairwealher@Royal: Mr. Speaker, is the minister satisfied that Canada is doing all it might to provide medical help and assistance by way of supplies and money for the care and rehabilitation of the citizens of Viet Nam?


Paul Joseph James Martin: Mr. Speaker, I am sure there is much more that all countries could do in Viet Nam and in other areas of the world where medical and other assistance is required. My hon. friend's question may have been prompted by the observations of Dr. Michael Hall. It is difficult on orders of the day to answer his indictment or even the implication in my hon. friend's question, but I may say that since we began Canadian aid to Viet Nam in 1953 we have allocated as much money to assistance in this area as any other country but two.


Mr. Fairwealher:: A further supplementary question, Mr. Speaker. Would the minister consider making a statement on motions so we can deal with this matter more adequately?


Mr.   Marlin@Essex Easl: I think the place to make a statement would be in the committee on external affairs. This I should be very happy to do.


Thomas Clement (Tommy) Douglas: further supplementary question, Mr. Speaker. Now that it is two years since Dr. Gingras first planned to take a team of medical personnel to Viet Nam-for various reasons this

plan has been delayed-could the minister tell us whether there is any prospect that Dr. Gingras and his staff will go to Viet Nam soon? If not, what is the reason for the delay?


Mr.   Marlin@Essex Easl: The recommendations of Dr. Gingras for a rehabilitation centre in Saigon were not accepted, not because of any action of the government of Canada but because of differences between the two governments on the use of a particular site. It now seems that it is more appropriate for such a centre to be built out of Saigon. As a matter of fact Major General A. E. Wrinch of the Canadian Red Cross Society and Dr. M. Dupuis, head of the rehabilitation service at Notre Dame hospital, are on their way to Viet Nam in connection with this matter.


Mr. David MacDonald (Prince):: The minister last night indicated that should there be a pause in the bombing, Hanoi might be willing to negotiate. Can the minister not tell us whether he or the members of his department have received information from the government at Hanoi to indicate that there is this possibility?


Mr.   Marlin@Essex Easl: My hon. friend has asked if we have received any recent information. The answer is no.



CANADIAN CONSTITUTION


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put to the right hon. Prime Minister a question of which I sent him notice.
In view of a recent statement in Quebec by the hon. Minister of Forestry and Rural Development, would the right hon. Prime Minister tell the house whether it is true that the constitutional conference in January will deal with any question a province would like to raise and that the agenda of the said conference could be changed entirely?


Lester Bowles Pearson: Mr. Speaker, we have put forward for discussion at this conference a very important constitutional question. We have indicated that if any province wishes to add to the agenda in any way by suggesting other constitutional matters for discussion, we should be glad to consider them.
Ociober 11, 1967


Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, I should like to put a question to the Prime Minister. Have the constitutional amendments suggested by the Quebec Liberal party come to his attention and will it be possible to discuss those suggestions at the conference on the Canadian constitution?


Mr. Speaker:: Order. I do not think this question is in order.


David Réal Caouette: Mr. Speaker, I have a supplementary question for the Prime Minister.
I understand that a federal-provincial conference will be held in January, but an interprovincial conference will take place in November.
Does the Prime Minister intend to delegate a federal minister as an observer to follow the discussions?


Mr. Speaker:: That question has already been put.


Hon. D. S. Harkness (Calgary North):: supplementary question, Mr. Speaker. I wonder whether the Prime Minister could tell us whether he has now received acceptances from all provinces to attend this conference.


Lester Bowles Pearson: Mr. Speaker, we have had acceptances from eight provinces. New Brunswick has not yet replied but I understand they will be in a position to do so shortly. We have had word from the government of Quebec explaining the delay in their reply as being due to the fact that the head of the government has been out of Quebec city. Their communication expressed the hope that a reply will be given in a day or two.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Michael Starr: My question is to the Prime Minister and is based on the fact that of the 25 pieces of legislation that the government wishes parliament to consider during the present session, eight items are now on the order paper. I would ask whether, to facilitate good programming, expedite the business of the house and organize its time to the best use the Prime Minister would see that the 17 pieces of legislation that are not on the order paper
Inquiries of the Ministry are placed on it as soon as possible, so we can work according to a schedule and expedite business.


Lester Bowles Pearson: Yes, Mr. Speaker. In the meanwhile I think it would be possible for the house leaders to examine the whole program with a view to allocating time and priorities to be sure that any particular piece of legislation that is to be discussed will be on the order paper in time to be considered. I will try to get them all on as soon as possible.


Mr. G. W. Baldwin (Peace River):: I have a supplementary question, Mr. Speaker. Is the right hon. gentleman able to assess the respective priorities in relation to this list of legislation? If not, would the printing of the bills enable him and his colleagues to evaluate the relevant priorities regarding this list which has been provided?


Lester Bowles Pearson: Mr. Speaker, I think when the discussions to which my hon. friend has just referred take place it will be possible for government spokesmen to bring forward a list which will indicate our feeling about priorities. This list can then be discussed by representatives of other parties.


Mr. J. M. Forrestall (Halifax):: I have a further supplementary question. Perhaps I could ask the Prime Minister whether the absence from that list of any reference to abortions indicates that this subject has been dropped by the government from the list of priorities.


Lester Bowles Pearson: Mr. Speaker, I would gather there has been some misunderstanding of our position as a result of interpretations given to the statement made by the Minister of National Health and Welfare. What the minister had in mind was that this particular question regarding abortions as such would not be mentioned in our list because it is now before a parliamentary committee. When that committee makes its recommendations, and I hope it will do so before long, we will be in a position to draft a measure to deal with this matter, after having studied the committee's recommendation. In that way it can be included in the omnibus criminal legislation to be introduced this November.


Mr. Raymond Langlois (Meganlic):: May I
ask a supplementary question of the Prime Minister concerning the house leaders' meeting where representatives of the various parties agree on future legislation.

October 11, 1967
Inquiries of the Ministry Would it be possible to ask the government house leader to summon the other house leaders before announcing that such a decision can be taken. First of all we must be called together.



WHEAT-DISCUSSIONS RESPECTING SALES TO JAPAN

[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I should like to ask the right hon. Prime Minister a question. I understand the Minister of Trade and Commerce is in Tokyo discussing certain trade matters with officials of the Japanese government. Is one of the matters to be discussed the loss of our grain markets, and has the Prime Minister anything helpful to suggest at this stage in reference to those discussions?


Lester Bowles Pearson: Mr. Speaker, I prefer to answer the question in this way. The minister is discussing with the Japanese government ways and means of increasing even further our large shipments of wheat to Japan and other countries in that area.



REQUEST FOR PROHIBITION OF L.S.D. AND OTHER HALLUCINOGENS

[Stage Direction]
On the orders of the day:
Mr. P. B. Rynard (Simcoe East):: Mr. Speaker, I should like to address my question to the right hon. Prime Minister. In view of the recent findings relating to malformations and other secondary effects of L.S.D., will the government take steps to place this drug as well as other similar hallucinogens on the list of prohibited drugs?


Lester Bowles Pearson: Mr. Speaker, I will discuss this matter with the Minister of National Health and Welfare when he returns later this afternoon.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, I should like to direct a question to the Minister of Justice of which I gave him notice. It refers to the suspension of the licence of the publication Georgia Straight by the Vancouver city council. Has the minister taken note of the implications of press censorship involved in this action, and has he [Mr. Langlois (Megantic) .1
received representations from the publishers or other interested groups concerning this matter? If so, from whom has he received such representations?


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



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Douglas Scott Harkness: Mr. Speaker, I should like to direct my question to the Minister of National Defence. As this is my first opportunity to do so I should like to congratulate him on assuming this very important portfolio. Can the minister inform the house of the conclusions reached by the nuclear planning group of NATO at the meeting in Turkey from which he has just recently returned?


Léo Alphonse Joseph Cadieux: Mr. Speaker, the general conclusion was to the effect that the ministers should issue further guidance for the continuation of the studies started after the April meeting in Washington. I do not know whether the hon. member refers to a.d.m.'s, a.b.m.'s or tactical nuclear weapons. I am not sure what he has in mind.


Douglas Scott Harkness: A supplementary question, Mr. Speaker. What I had in mind was this. Did this meeting in Ankara come to any definite conclusions in regard to the employment of nuclear weapons?


Léo Alphonse Joseph Cadieux: No, Mr. Speaker. It is a continuation of studies started in April of last year in Washington. The purpose of the studies is to ascertain whether in some particular circumstances the whole comprehensive defence system of the western alliance should include a.d.m.'s, nuclear tactical weapons, conventional weapons or even strategic weapons. These are simply studies that are continuing. The advice given by the ministers was that the studies be continued.


Douglas Scott Harkness: A further supplementary question, Mr. Speaker. Can the minister give us any information as to when it is expected that these studies will be concluded and thus conclusions arrived at?


Léo Alphonse Joseph Cadieux: As the hon. member knows, Mr. Speaker, the group is
October 11, 1967

supposed to report to a parent body, the nuclear defence affairs committee, which in turn refers the whole matter to the north Atlantic defence council. I expect the conclusions might be submitted to the north Atlantic defence council in December of this year.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskaioon):: Mr. Speaker, several days ago in response to a question of mine regarding the construction of a C.B.C. television station in Saskatoon the Prime Minister stated he would be making a statement in a few days. I wonder whether he is now prepared to make such a statement.


Lester Bowles Pearson: I hope to be able to make a statement in even fewer days now, Mr. Speaker; I hope later this week.


Lewis Mackenzie Brand: A supplementary question, Mr. Speaker. I wonder if the Prime Minister could at least state whether the Saskatoon television station could become a casualty of the government's attempts at fiscal economy.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. William Dean Howe (Hamilton South):: Mr. Speaker, in the absence of the Minister of National Health and Welfare I should like to ask the Prime Minister a question. In view of recent deaths that have occurred because of the ingestion of hazardous products, can the Prime Minister advise the house what will be done to protect the public from hazardous products that are not so labelled?


Mr. Speaker:: Order, please. The hon. member is asking a very general question of the type that could only be answered by a statement on motions. I do not think it can be asked at this time.



CANADIAN CONSTITUTION


[Stage Direction]
On the orders of the day:
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I wish to put a question to the
Inquiries of the Ministry Prime Minister. In view of the fact that the Minister of Forestry and Rural Development (Mr. Sauve) has announced that he will launch a campaign to have English-speaking Canadians accept a nine-point plan on constitutional problems, I should like to know whether this plan has been previously agreed to by the cabinet?



REPRESENTATION OF PRODUCERS ON TRANSPORTATION SUBCOMMITTEE

[Stage Direction]
On the orders of the day:
Mr. Reg Cantelon (Kindersley):: Mr. Speaker, I have a question for the Minister of Transport of which I sent him notice. Recently a special subcommittee of a grain transportation committee was appointed to investigate all phases of grain handling in the transportation field. Could the minister tell me who represents the grain producer or farmer on this committee?


Hon. Paul Hellyer (Minister of Transport):: Mr. Speaker, as this is a very complicated question and I received the hon. member's notice just at 2.30, perhaps he would allow me to take notice of the question and give a reply tomorrow or the next day.



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, my question is directed to the Minister of Transport. Is the minister planning to accept the initiative of the premier of Manitoba, conveyed to him last Thursday, for a meeting between his department and officials of the Manitoba government on the future of the Air Canada overhaul base in Winnipeg.


Paul Theodore Hellyer: Mr. Speaker, this question might have been better directed to the Prime Minister. However, I understand that the Prime Minister yesterday exchanged wires with the premier and suggested that he might meet with myself and one or two other ministers this afternoon. As far as I am aware, no reply has yet been received.

October 11, 1967
Inquiries of the Ministry NORTHERN AFFAIRS



ARCTIC EXPLORATION FOR OIL BY CROWN CORPORATION

[Stage Direction]
On the orders of the day:
Mr, Erik Nielsen (Yukon):: Mr. Speaker, in the absence of the Minister of Indian Aifairs and Northern Development I should like to direct my question to the acting minister. Is it the intention of the government to create a separate crown corporation for the purpose of exploring for oil in the Arctic?


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



SHIPBUILDING


[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, I have a question for the Minister of Transport. This matter is of great importance to shipyards all over Canada. Could the minister advise us whether the standard arbitration clause has been removed from the current tenders for ships being called by his department; and if so, why?


Paul Theodore Hellyer: I should like to take notice of this question, Mr. Speaker, because it will require some investigation.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. R. D. McLelland (Rosetown-Biggar):: Mr. Speaker, I have a question for the right hon. Prime Minister. In view of the many representations received by the Prime Minister, is the government considering reversing its announced policy and allowing the shack tents and portable cabins to remain at Was-kesiu in the Prince Albert national park?


Lester Bowles Pearson: Mr. Speaker, perhaps the hon. member would wait until the minister comes back.


Mr. Speaker:: I think this question should be placed on the order paper.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Martial Asselin: Mr. Speaker, may I put a question to the Secretary of State for External Aifairs.
Canada has recently announced a contribution of some ten million dollars to the United Nations program of assistance to underdeveloped countries. Is the minister in a position to indicate to the house what is the purpose of this contribution and to what use it is to be put, as other countries specify when they make such contributions?


Mr. Speaker:: It seems that this question is too general in nature to be put at this time.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Gordon Harvey Aiken: Mr. Speaker, I had a question for the Registrar General, who seems to have stepped out of the chamber for a moment. Perhaps I might ask it of the Minister of Finance, who is also concerned with this question. In view of the forecast made in a speech yesterday that food prices in Canadian supermarkets will soon rise by a substantial amount, is the government taking any specific action to prevent the need for such price increases?


Mitchell William Sharp: Mr. Speaker, the last information I had was that the price of food had gone down in the cost of living index. I really do not indulge in forecasts.


Eldon Mattison Woolliams: In what supermarket do you do your shopping?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of Finance. In view of the present inflationary pressures
October 11. 1967

on the economy, what is the government's position in regard to wage parity with the United States?


Mr. Speaker:: Order, please. This is not the type of question that can be put at this time.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration regarding one Bertram Peterson, a coloured South African newspaperman who has been asked to leave Canada by the 16th of this month. In view of the widespread concern in Canada about sending any person, especially a coloured person, back to South Africa to live under apartheid, is the minister planning to use his discretionary powers to permit this gentleman to remain in Canada?


Hon. Jean Marchand (Minister of Manpower and Immigration):: Mr. Speaker, one of the first cases with which I dealt under the new regulations concerned a man who came from South Africa. That is why I am ready to take a second look at this case to see whether something can be done.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. G. L. Chatterton (Esquimait-Saanich):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs. In view of the fact that amendments to the Pension Act were not included in the list of legislative items to be dealt with in the balance of this session, is it the intention of the minister to provide for changes in pension rates in supplementary estimates?


Hon. Roger Teillet (Minister of Veterans Affairs):: Mr. Speaker, the only answer I can give to that question is that it is possible to do it in that way, and for this reason it need not be in the list.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, October 10, consideration of the motion of Hon.
The Budget-Mr. Hees
Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
e (3:10 p.m.)
George Harris Hees: Mr. Speaker, today this country faces a very serious economic situation from three points of view. The first is the rapid deterioration of the purchasing power of our dollar, which has reached such a point that next January 1, $1.05 will be required to buy the same amount of goods and services which $1 could buy last January 1. This is hard on all citizens of this country, but particularly so on those who live on fixed incomes, such as pensioners, because they have no way of increasing their income to meet this rise in the cost of living by new wage contracts or by increasing the price of their goods to other Canadians.
Second, we have a critical housing shortage. This year the housing production will fall short by more than 50,000 units of the minimum of 190,000 housing units which the Economic Council of Canada has advised us is the absolute minimum we must produce in a year to provide adequately for the housing needs of our citizens.
Third, a rapidly deereasing industrial productivity is facing us as we prepare to enter the most serious economic competition we have ever faced, which will be presented to us starting on January 1 when the Kennedy round tariff reductions come into effect. All Canadian producers will face much stiffer competition as a result of the fact that foreign goods will enter our markets more cheaply. Although tariffs against Canadian goods in the export markets will be reduced, those tariffs will also be reduced against the products of our competitors, and the home producers will not sit back and simply allow us to take over, any more than Canadian producers will allow foreign producers to take over this market. Therefore, at a time when we are facing the most serious competition we have ever faced, we are in a very weak position.
Not only must we correct these three situations that I have mentioned, but we must make sure that they do not recur in the future. To do so we must first of all find out why these situations have occurred, and take steps to make sure the same does not happen in the future.
The first cause of this trouble was the lack of skilled workers, which became apparent in

October 11, 1967
The Budget-Mr. Hees
the latter part of 1964. In 1961 the Conservative government introduced a policy of building training schools across this country. During the next two years, we built no less than 224 new schools, and enlarged 130 existing schools. This gave the country an added capacity for turning out trained skilled workers to the extent of 140,000 trained people a year. We had planned a systematic increase in this building program, year by year, to look after the growing demand for skilled workers in the future. However, when the Liberal government came to office in 1963, they were not aware of the growing importance of providing greater numbers of skilled workers for our factories and our farms, and they did not continue this expansion program at the rate we had planned. The result was that in the latter half of 1964, it became obvious that a very real shortage of skilled workers was developing in this country. As I have said, the government did nothing to increase the rate of expansion which we had planned when we were in office, nor did it increase immigration to bring in the additional skilled workers whom our industry required to fill the gap between the numbers we were turning out from our training schools, and the number we needed in this country. As a result of this shortage of skilled workers, our factories and farms were unable to produce goods in quantities necessary to meet the demands of the affluent society here in Canada and in countries abroad. Prices started to rise, and inflation set in.
We know that inflation is caused when too much money is chasing too few goods. There are two ways to correct the situation. The first is to increase the volume of goods available for sale. The second is to decrease the amount of money available to buy the goods. As you would expect, this government chose the latter course, namely the negative course, and applied a tight money policy with regard to our country's economy, as a result of which interest rates began to rise.
Because of the government's tight money policy, our producers were unable to carry out the expansion of plants and equipment to handle the need for increased production. In addition, the shortage of skilled workers continued. Goods remained in short supply. As a result of these two situations, prices continued to rise, and have continued to do so ever since, until today we have the highest cost of living in our history.
Because of this government's tight money policy, mortgage money has become very scarce since the fall of 1965. As a result, in

1966 the number of housing starts in this country fell 20 per cent lower than in the previous year. This year, because of the same conditions as experienced in 1966, the number of housing starts will remain the same as last year, and we will be more than 50,000 houses short of the minimum of 190,000 starts which the Economic Council of Canada tells us is the absolute minimum we must produce in this country each year to look after our country's minimum housing needs.
As a result of the shortage of capital, of the shortage of skilled workers in this country to meet the demand for products, and of the high interest rates which have impeded the ability of producers to modernize their plants and equipment and introduce new systems into their production, our productivity has fallen very seriously at a time when we face the most serious competition we have ever faced, brought about, as I have said, by the Kennedy round tariff reductions which will come into effect next January.
So we are faced with a very serious situation indeed, and it is the responsibility of members of this parliament to advise the government as to what we believe should be done to overcome and improve this situation, because it is obvious from the government's lack of action, and lack of policy in this regard, that they are unable to meet this very serious situation.
[DOT] (3:20 p.m.)
Over the past 25 years, Mr. Speaker, we in this parliament have devoted the major portion of our thought and energy to developing a social security system; one which today gives reasonable coverage to those who cannot provide for themselves. In the future these measures will certainly be expanded and improved as we are able to pay for such expansion out of our national income. But in the meantime I believe we should devote our major thought and energy to developing an economic climate in this country in which industry and agriculture can expand according to their ability to sell their products at prices which people, both in Canada and in the export markets are willing to pay. It is only in this way that we can make available the jobs which our people need to keep them employed; and that we can pay for the social security that we have given ourselves; and provide the best form of social security of all, namely, good jobs for all of our people, with an expanding future.
Such an economic climate must include five things: first, a greatly increased productivity;
October 11. 1967

second, a continuous flow of credit and mortgage money at reasonable rates of interest; third, a stable and, if possible, declining tax rate; fourth, an adequate supply of skilled workers so that our factories and our farms may produce up to the demand of consumers for their products; and fifth, a far greater research effort to develop new and better products at lower costs.
How are we going to produce such a climate, Mr. Speaker? I believe the first step is to discard the present lack of economic planning indulged in by this government, which causes it to move from crisis to crisis, and to substitute for that lack of economic planning the direction and planning that is needed to guide our economy along the most productive lines.
This can be brought about by replacing the unco-ordinated effort of the six departments of government which have the greatest effect on our economy, namely the Department of Finance, the Department of Trade and Commerce, the Department of Industry, the Department of Agriculture, the Department of Transport and the Department of Manpower and Immigration, with a co-ordinated planning effort.
The instrument for carrying out this future planning would be a permanent committee of the cabinet, to be known as the economic planning committee, under the chairmanship of the Minister of Finance, and composed, along with the minister, of the ministers of the other five departments to which I have referred. This committee would work closely with the Canadian Economic Council, and would rely heavily on its economic studies in preparing the recommendations which it would put forward to the cabinet and the Prime Minister in relation to the future economic growth of this country.
These plans; the results to be expected from them; and their cost, will give the government vitally needed information on which to base the decisions that they will have to make in the future regarding spending priorities when the annual budget is prepared each year and whenever any other important economic consultations take place.
One of the first tasks with which this committee would have to busy itself would be the development of increased productivity in manufacturing, which is a major employer. Measured in terms of output per person employed in manufacturing, our performance over the 20 years between 1946 and 1966 inclusive showed an average yearly increase
The Budget-Mr. Hees
of 3.4 per cent. This year the preliminary figures available to the Dominion Bureau of Statistics clearly indicate that the rate of increase in the work force has exceeded the rate of increase in manufacturing production, and that our present productivity is considerably below that of last year.
In 1961 the Conservative government established the productivity council, which was made up of representatives of industry and labour. All those representatives were extremely able men chosen for their ability in their particular field; and I might add that one of the distinguished members of this council was the present Minister of Manpower and Immigration (Mr. Marchand), who did very able work for the council. The job of the council was to recommend steps which they considered would most likely increase productivity.
During the next two years, this Productivity Council made excellent progress, but unfortunately in 1963, when the Liberal party took over the government, the Productivity Council was disbanded, and the Department of Industry was created to take the place of the industrial section of the Department of Trade and Commerce, and the Department of Defence Production.
This new department took over responsibility for increasing productivity from the Department of Trade and Commerce, and I think it would be interesting, Mr. Speaker, for us now to examine the results this new department has been able to produce since it took over this very important responsibility from the productivity council, operating under the aegis of the Department of Trade and Commerce.
These results, Mr. Speaker, are as follows. Productivity increased in 1964 over 1963 by 4.3 per cent. It increased in the following year, 1965, over 1964 by 4 per cent. It increased last year, 1966, over 1965 by only 2 per cent, while productivity in the United States increased over the year before by 3.6 per cent. And as I said earlier, Mr. Speaker, the preliminary figures available to the Dominion Bureau of Statistics indicate very clearly that productivity this year is falling very considerably below that of a year ago.
So, Mr. Speaker, we see that the performance of the department which took responsibility for increasing productivity away from the Department of Trade and Commerce, and the productivity council, has been to reduce the rate of productivity growth in four years from 4.3 per cent a year

the moving from crisis to crisis which we have experienced lately.
I have tried to outline to the house in the brief time allotted to me why we have arrived at the position we occupy today. We have runaway inflation, a housing crisis and a shocking drop in productivity. That is not good enough for a country with Canada's potential. There is an additional reason for our troubles, and I sympathize with the Minister of Finance sincerely in this regard. The minister is not given a proper opportunity to do the job that I think he would like to do. It became obvious, to anyone who did not know it before and who listened to the President of the Privy Council (Mr. Gordon) speaking in the house the other night, that we have not one minister of finance in this government, but two. We have the minister of finance for Eglinton and the minister of finance for Davenport. It was obvious, as the minister of finance for Davenport spoke the other night, that he completely disagreed with the minister of finance for Eglinton. That kind of approach to this country's problems is not good enough. The trouble is that the two ministers cannot get their points of view across to the Prime Minister (Mr. Pearson). Thank heaven the President of the Privy Council is not minister of finance; obviously he is trying to be and this, I believe, is causing a great deal of confusion in this government.
I urge the Minister of Finance to take a strong stand and to outline to the house before this debate ends what he intends to do, regardless of what the President of the Privy Council has to say. He should tell us whether he intends to make available to industry in this country a taxation incentive to enable it to buy new labour saving machinery and labour saving systems which are needed to bring costs down. Such machinery and systems are needed if productivity in this country is not to drop, as it has been doing, day by day.
[DOT] (3:40 p.m.)
I urge him to take a strong stand with other members of the cabinet to do the things I believe he would like to do. If this government does not intend to take action it will become ever more clear that the country cannot afford to put up with an administration which is overtaken by events day by day; we need a government which shapes events. The only cheering factor in this whole dim picture today is that, fortunately, time will make it possible for this country in the relatively
The Budget-Mr. Otto
near future to have such a government to carry on its affairs.


Mr. Steven Otto (York East):: This discussion prompts me to debate a few points with the minister. It is sometimes presumed that I take issue with ministers and criticize them. Of course, this is not the case. In this instance I do not intend to criticize the minister because I sympathize with his point of view.
If I may introduce a personal note, I was much impressed by the manner in which the hon. gentleman introduced his subject; he reminded me very much of his father-in-law who was my high school teacher in St. James, Manitoba. I may say the minister made a presentation which would do his father-inlaw great credit. Rather than take issue with the hon. gentleman I will comment on some of the points he made. I think he is on the right track if he is a reform minister-and this is a reform party and a reform government. The first requisite is to understand our assumptions correctly; we all base our ideas on certain assumptions. The minister made a meaningful statement when he said it was surprising to find at a time of easy money like the present that high interest rates were prevalent, because the book says that in times of easy money we should have low interest rates.
It is very important to understand that something has happened to an assumption, because we are then free to base our actions on that new understanding. Today we have high interest rates even in a time of easy money, and I dare say that even if interest rates on mortgages were raised the desired result would not be produced. The minister told us, more or less, that inflation or expected inflation causes investors to become concerned about the real values of long term bonds and leads them to demand higher yields as compensation. This is of course true. But I doubt whether high yields would solve the problem. My hon. friend also pointed out that the result is a desire for liquidity. That also is true; people do not want to invest their money for 25 years if they are convinced in their own minds that the inflationary process will offset their returns. I was greatly surprised when in accordance with this concept the N.H.A. mortgage interest rate was raised to 8-J per cent in an attempt to outguess investors who do not wish to put money into long term investments.
I intend to mention a few more assumptions and I should like the minister to examine them with me. It has now been proved

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The Budget-Mr. Otto
wrong to assume that easy money is accompanied by low interest rates. This leads me to wonder how many other assumptions may prove equally misleading. The minister's answer is as follows: If, collectively and individually, labour and management do not exercise restraint in connection with wage and price increases, there will be no escape from a cooling off period. There is a presumption here that if we do not exercise restraint higher taxes will be imposed in order to resolve the problem of inflation.
This is based on the assumption that higher taxes would mean lower take-home pay and less desire to spend money, because there would be less money to spend. But I would ask the minister this: Does the working man take account of his total annual income, or does he simply look at his take-home pay? I suggest he is not really concerned what his income is, or what his wage is; he does not really care how much is taken away in taxation. What he wants is a take-home pay sufficient to buy the goods for which he and others like him have created a demand.


Mitchell William Sharp: Could I ask the hon. gentleman a question? Is he saying he agrees with me, that voluntary co-operation in restraining price and wage increases is preferable?


Steven Otto: I shall deal later with the question of the voluntary exercise of restraint. I say that take-home pay is the real issue, not the total hourly or weekly wage. If the workingman does not get enough to spend, he will ask for more.
This leads to another question. Will he get more? Normally, at the time the books were written, demand and desire were two different things. A man might desire a new television set or a new car but if he did not have the money to pay for it he could not buy it. Demand was governed completely and directly by purchasing power. I do not think the minister will deny that today desire and demand have come very close together, because the producers of goods have so merged the two that desire for an object creates a demand for it. That is the whole purpose of promotional advertising. If the demand is strong enough, other methods are used in order to get the purchasing power. This of course is where we run into trouble.
The minister has just asked whether voluntary restriction is something we can anticipate. I shall be a little more pragmatic. Organized labour-and we are talking mainly about organized labour-is not dealing on the basis of long term considerations. It does not

have the same vested interest in a particular industry, or a particular plant, as it once did. There is greater movement.
[DOT] (3:50 p.m.)
I will give an example. Some five or six years ago Mr. Reuther of the automotive workers union pondered the problem of leisure time. He decided to adopt a policy of cultural education, cultural improvement for his union members, anticipating the time when they would have more leisure. It was quite a program. There were television commentaries about it and it was written up in the press. He was going to spend $20 million of the union money to build cultural centres where members could improve their minds and be ready for the anticipated greater leisure time.
However, this was a very short dream. It was shot down very quickly, and Mr. Reuther has not mentioned the subject since, simply because labour is interested in short term gains. Union members want more money; they want more purchasing power. If one examines labour negotiations over the past three or four years he finds that the emphasis has shifted back to money. Labour says, "We don't care about the side benefits, we want more money."
The minister's plea to organized labour for restraint and for adoption of the long term point of view will receive a doubtful reception, to say the least. But this does not exonerate management. Management classes of all types are looking more and more to the side benefits. They are not concerned about salary. They are concerned about memberships in social clubs, golf clubs, diners clubs, travel, entertainment and such things as that. Salary is not the great issue.
Another assumption upon which we base our thinking is that there is compulsion on all sides to settle work stoppages. Work stoppages have a great deal to do with production, something the hon. gentleman from Northumberland (Mr. Hees) has been talking about. We presume that when there is a work stoppage both sides want to settle it. We presume unions do not like giving out strike pay and that companies desire to start making money again. But this is only a presumption. We know today that unions have adjusted very nicely to such a situation, and one thinks immediately of the current example of the Ford work stoppage.
Workers at Ford are on strike and the automotive workers union is willing to pay $20 million to support the strike. Today if a
October 11, 1967

firm is struck, and this happened recently during the iron workers strike in Toronto, the workers can go and work elsewhere, be it in a union shop or not. They get a certificate enabling them to do this, but in order to get that certificate they have to pay back to their union 50 cents for each hour they work. Thus there is no longer the same compulsion on a union to settle a strike.
Let us consider management in such a situation. Recently the Registrar General (Mr. Turner) wrote an article pointing out that the shareholding structure of large corporations is very fluid. Within a period of six months those with shares will often sell them. Shares are used as a means of speculation. We have developed a new managerial class which is not too greatly concerned with the profit position.
Recently I spoke to a group of managers, one of whom argued that a work stoppage now is really a game of inventory. Management tries to produce enough inventory to make a strike ineffective, and of course the union tries to do the opposite. On top of this the same gentleman said, "It really does not matter much, because if we did produce 12 months of the year we would have to get a new sales manager since the present one cannot sell 12 months production. It is simpler for him to have only nine or ten months production."
Indirectly management is not that keen about increasing production because this increases its distribution problem. What we have is an assumption that is wrong. Our assumption is that management tries to produce and negotiate a settlement immediately. We also assume that labour tries to negotiate a settlement immediately. This has proven not to be so. Directly or indirectly this situation has developed and we must examine what we can do to overcome it.
There is what I would term the psychology of business and finance with respect to a shortage of money. The Minister of Finance (Mr. Sharp) has quite rightly said that business and finance must consider which choice to adopt. I would go further and ask the minister to delve deeper into the matter and see whether a certain psychology established by industry or by finance cannot be overcome by government departmental activity.
If I as an investor believe inflation is going to increase by 5 per cent per year, naturally I want to invest my money over a short period. If I invest it for 25 years I will want 75 per cent interest to cover the rise in inflation. To combat this the government at present will
The Budget-Mr. Otto
try to get me to loosen my money and allow me to charge a higher interest rate. But here I will run into competition with the government. It is like a Dutch auction.
I suggest that, where business is confident, it will expand its activity even if it has to borrow money at 20 per cent. The minister and his department may try to cool this trend; but which is going to be stronger, government or business? This is something worth investigating.
National guide lines have been talked about for business, industry and labour. Guide lines are all very well, but I have always been impressed by a quotation which says that only the earned profits are credited-the unearned profits have gone down to defeat.
The government may tell an industry to behave properly. But if the people running it do behave properly and in the interests of Canada, then I suggest that is not the business in which they should be, because essentially all business is out to make money. Capital today is an international thing. It flows quickly from border to border, from nation to nation. If the climate is not suitable in one place it will move to another place. It will try to do as good a job as possible in the country where it is invested, but its primary concern is to make profits. There is always a certain friction. The choice is; Shall we be good citizens of Canada, or shall we put our money into Tanganyika or some other place where we can make more profit?
Another assumption to which the minister and the hon. member for Northumberland have often referred is that savings are the key to industrial and commercial expansion. I put it to the minister, whether people really use savings, in the term that we know, to invest in equity stock, or whether they use their savings to buy insurance, bonds and real estate mortgages. I would ask him to investigate whether it is not really dividends, profits, that go back into industrial expansion. If this be the case then it does not matter that Canada is short of savings so long as we can somehow recapture dividends that might leave the country and have them reinvested in Canada. I believe it is dividends which are more likely than savings to be reinvested in capital expansion.
[DOT] (4:00 p.m.)
I should like to make a number of suggestions to the minister. I make them not only to the Minister of Finance, but of course to every minister of this government, because these things are very interrelated. The first in

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order of priority is that we must recognize that we cannot increase wages or social benefits, or any such things, more than the increase in the gross national product. If we increase our gross national product by 10 per cent, then we can spend only 10 per cent, whether it is in increased wages, whether it is in welfare payments or in some other form. If we spend more than the increase in the gross national product, then the government goes broke whether it happens immediately or later.
A nation cannot spend more than it earns. If our production increases 10 per cent we can only consume 10 per cent more goods. The government therefore must devise immediately a way to settle wage disputes and management-labour contracts without work stoppages. This is not so new. We have had the same type of wage dispute settlement procedures for 100 years.
Surely we can induce management to settle a strike, even if it means going to management and saying that for so long as the strike continues every dollar the company makes will be attached, so that at least the company does not lose anything and does not make anything, but production continues and the government is the beneficiary. We may have to go to labour and say to them that so long as a strike lasts their union dues will go to the government. Surely we have reached a time when we can solve this problem by introducing a procedure for negotiation of labour disputes, without the necessity of a work stoppage, because it is the production stoppage which causes the trouble. It really does not matter if our new technology enables us to increase our production by 10 per cent, if we lose 10 per cent as a result of the work stoppage. One nullifies the other. There are many ways this can be handled, but surely some way must be found.
Then there is the matter of consumer credit. This somehow or other must be brought under control. The minister might say that we will cut down wages by taxation, so that automatically people will not be able to buy the goods they wish to buy. But we have a fantastically large industry which actually is in the business of usury. This is very old. They will say, "Oh, no; buy now, pay later". They will say that they will anticipate the earning capacity. So it really does not matter what the minister or the government says, so long as the consumer credit industry has faith in the economy or has faith in collecting a certain amount of money. Since they charge 18 per cent they have a leeway there for bad
[Mr. Ottc.l
debts. They will make the purchasing power available. Somehow this other source of banking must be brought under the same control the banks are under at the present time, whether it is under the Bank of Canada or under some other department of government. Any industry or agency which creates or plays with money must be brought under government control, if the government is to exercise control over the economy.
As to the matter of taxation, I may say that I have studied the Carter report, and I think the minister will come to the conclusion that most of the recommendations of the Carter commission will have to be adopted. I hate to say this, because it is contrary to my thinking about the establishment, but Mr. Carter could be described as the top member of the establishment. I sometimes think it is a shame that only the top member of the reactionary establishment should be the one to introduce a scheme which is necessary and radical. I think that, with the introduction of the Carter report, we could look forward to increased production and buoyancy of financial institutions. I think we would have taxation powers which would enable us to shift emphasis from industry to industry in accordance with government policy. We must make new arrangements in respect of exports and imports. I have introduced a bill on that subject which would enable us to balance exports and imports by production hours rather than by money.
Another idea which at least should be investigated is the matter of escalation of bonds, and possibly the escalation of mortgages. So long as investors are not willing to invest money for a long term period because they are afraid of inflation, then of course indirectly they want to introduce inflation to justify their own ideas. We might say to the Canadian investor that if today he invests in a government bond in the amount of $100, in ten years time we will pay him the $100 plus the cost of living index. At least this would give the government some measure of control over the desirability of taking in or putting out money. At the moment, however, so long as the investor, whether small or large, thinks we are on the road to inflation he will not invest and will not put up long term securities.
This is not new. An eastern company now is working with a United States company in the institution of an idea of insurance policies which will escalate. We have yet to see what the reaction will be, but I imagine it will be very successful. There is no reason why the
October 11, 1967

government could not take a lead in investigating what would be the result of such a policy.
There should be a reorganization of our whole government structure in respect of insurance and welfare. Is our unemployment insurance really an insurance policy, or is it a welfare policy; is it payable merely to those who lose their jobs or is it payable because of certain other circumstances? Is it under the influence of politics? Of course it is. Do people look on unemployment insurance as savings? In other words, when they have had the good fortune never to have been laid off and are now ready to retire, do they say to themselves, "That is my money, I want it" So long as they do that we do not have an insurance policy; we have a welfare policy.
Many other items of government could be reorganized and placed in their proper brackets. We should know what is insurance and what is welfare, so that we know where we stand. Insurance should stand on its own feet, whether it is national housing insurance, unemployment insurance or hospital insurance, including the old age pension. It should stand on its own feet, so that we know what amount we can afford to give to other welfare measures.
There is also the matter of the Canada Development Corporation, but I believe I have dealt with the necessity for this. I have also introduced a measure in this regard. Of course all of this is as easy or as difficult as the minister or we as a government have the guts to make it. I was looking at a book written back in the early fifteenth century by a gentleman named Machiavelli, who was much maligned in past centuries. He was giving instructions to Lorenzo the Magnificent in respect of how to run his policies. I was interested to find that at that time, when instructing Lorenzo the Magnificent about the difficulty of introducing new ideas, he said:
And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.
Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.
[DOT] (4:10 p.m.)
The same principle applies to those measures introduced to the house by way of reforms in the rules and procedures of this

The Budget-Mr. Gregoire place. Let me remind the minister that in order to introduce reform you must introduce new ideas. This will be difficult, in that the department will oppose because it is so sure of the value of old methods. This is particularly so when you can find in any book on economics the statement in black and white that when you have a lot of money you will have low interest rates.
The hon. gentleman representing Northumberland quoted from the same book and said that when you have too much money chasing too few goods you have inflation. Let me suggest to that hon. gentleman that if he looks back over the past seven years he will find that we had inflation during times of tight money and during times of loose money, yet at all times we had lots of goods.
In order to introduce a new idea you must look back to find out why it is necessary. I put it to the minister that he should look at all the assumptions upon which his department's policies are based. If he finds that those assumptions can remain unchanged, that is good; but if he finds that the assumptions are wrong by today's standards, then he requires new ideas and new rules, not those in the book.


Gilles Grégoire: Mr. Speaker, I should like to make a few remarks today concerning some statements that have been made, some events that have taken place and the atmosphere that exists at this time in Quebec.
First, I would like to comment on a sentence spoken yesterday by the hon. member for Villeneuve (Mr. Caouette). As recorded in Hansard in the right-hand column of page 2,967 he said:
I do know one think. Our confederation was founded in 1867. Since that time I am convinced that Canadians of all extractions recognize the right of bilingualism in our country, namely the French and English languages. That is the wish of the people.
Now, Mr. Speaker, the hon. member for Villeneuve admits that the people want bilingualism and recognize the rights of bilingualism. But what surprises me is that the member for Villeneuve adds that since confederation, Canadians of all origins recognize the right of bilingualism in our country.
Now, what are the facts? Exactly what has happened? Confederation was voted in 1867. Barely four years later, as early as in 1871, in New Brunswick, an act abolishes Catholic schools and banishes French as an official language in New Brunswick.
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Six years later, in 1877, an act in Prince Edward Island forbids the use of French in the schools throughout the province. A fine start for the first hundred years of confederation; barely ten years later, in 1877, the use of French in the schools is forbidden by a provincial law.
Thirteen years later, in 1890, in spite of section 23 of the Manitoba Act, out west, that province abolishes separate schools and the official use of the French language. A further interdiction in another province, Manitoba, in 1890.
In 1905, Laurier sacrifices the rights of French minorities in Saskatchewan and Alberta, under section 17 of the Saskatchewan Act and under section 17 of the Alberta Act (1905). Everything was going well for the rights of the French language within confederation.
In 1912, confessional schools are abolished in Keewatin and French is forbidden. Bilingualism was in a fine shape during the first century of confederation.
In 1912 also, under regulation 17, Ontario goes to war against the French language. As things were, there was some talk of a war against the French language in Ontario.
In 1916, Manitoba abolishes French in all primary schools. Things were going well, a hundred years of confederation. That is why we are probably right in referring to a hundred years of injustice.
In 1930, Anderson, the Saskatchewan premier, banishes French from his province.
So there, all the provinces have done it. French was prohibited by legislation, French was banned, it was prohibited in primary schools in the western provinces, in Ontario and in the maritimes.
The hon. member for Villeneuve said yesterday: it is not because of confederation, it is not Ottawa's fault. Well, Mr. Speaker, there is in the British North America Act, in the Canadian constitution, legislation giving Ottawa the authority which has always been granted to the federal government, to intervene in the cases I have mentioned, when the use of French is banned from a province. Section 93, subsection 3 of the British North America Act which laid down the Canadian confederation, the famous confederation, states:
Where in any Province a System of Separate or Dissentient Schools exists by Law at the Union or is thereafter established by the Legislature of the


Province, an Appeal shall lie to the Governor General in Council from any Act or Decision of any Provincial Authority affecting any Right or Privilege of the Protestant or Roman Catholic Minority of the Queen's Subjects in relation to Education:
It was very simple. And subsection 4 of same section 93 states:
In case any such Provincial Law as from Time to Time seems to the Governor General in Council requisite for the due Execution of the Provisions of this Section is not made, or in case any Decision of the Governor General in Council on any Appeal under this Section is not duly executed by the proper Provincial Authority in that Behalf, then and in every such Case, and as far only as the Circumstances of each Case require, the Parliament of Canada may make remedial Laws for the due Execution of the Provisions of this Section and of any Decision of the Governor General in Council under this Section.
[DOT] (4:20 p.m.)
Mr. Speaker, legislation to ban and prohibit the use of French was passed by all provinces and never, never has the Ottawa government invoked the provisions of subsections 3 or 4 of section 93 to adopt remedial measures towards the oppressed minorities in western Canada, in Ontario and in the maritimes. Nor has the federal government felt it proper even to attempt to repair the wrongs to the French minorities in other provinces although it was fully empowered to do so under subsections 3 or 4 of the British North America Act.
Well, is it not the fault of confederation, of the federal government at Ottawa if our minorities have been persecuted as they have been in other provinces? I say yes, Mr. Speaker. I say it is the fault of Ottawa, of the federal government which failed to adopt the remedial measures indicated in section 93.


Maurice Allard: Mr. Speaker, would the hon. member allow me a question?


Gilles Grégoire: Certainly.


Maurice Allard: About section 93 of the constitution of 1867 and about the remedial acts that the federal government can pass to rectify those injustices, I would like to point out to the hon. member that, on the constitutional level, section 93 deals only with religion, not language. Therefore, does he not feel that in many amendments to the Canadian constitution section 93 should also be extended to linguistic matters?


Gilles Grégoire: Mr. Speaker, at first sight, that may seem to apply to religion rather than to language, but judging from the indirect methods used to prohibit and suppress
October 11, 1967

the use of the French language, it was done under cover of religion and the result is exactly the same. In fact, the provinces that wanted to prohibit the French language in the west succeeded exactly as if the act had mentioned it. They acted indirectly but they achieved exactly the same purpose.
Furthermore, subsection 3 deals with separate or dissident schools. It is not necessarily a matter of religion; it a matter of language as well as religion. Indeed, the following expression is used:
-a system of separate or dissident schools.
What have been the results, Mr. Speaker, of all these discriminatory measures passed in all the provinces, except Quebec, where no such legislation was passed and whose minorities were respected? What have been the consequences? Well, Mr. Speaker, between 1900 and 1961, date of the last census in Canada, 514,312 Canadians of French origin gave up speaking French. That has been a true racial and linguistic genocide.
Those French-speaking Canadians have adopted English as their mother language and 34 per cent of the French Canadians from the other provinces have become Englishspeaking citizens and have forsaken their own language due, precisely, to these discriminatory laws which were passed in the nine other provinces of Canada but not in the province of Quebec.
Let us take Newfoundland, for instance, where in 1961 there were only 3,150 citizens whose mother tongue was French; on the other hand, 14,021 citizens whose mother tongue was French have stopped speaking their own language and have adopted English as their mother tongue; this means, in Newfoundland, a loss of 81.65 per cent.
In British Columbia, 26,179 have declared French as their mother language and 40,791 have given up French in order to adopt English as their mother tongue which means a 60.9 per cent loss.
In Nova Scotia, 48,315 citizens have given up the French language, opting for English as their mother tongue, a loss of 54.9 per cent.
In Prince Edward Island, 9,460 have chosen English rather than French as their mother tongue, so there are only 7,958 people left in Prince Edward Island whose mother tongue is French.
In Alberta, the loss is 41,043 persons, in Saskatchewan, 23,661. In Ontario, 222,639 French-speaking Canadians have abandoned their mother tongue and speak only English,
The Budget-Mr. Gregoire and this just because these laws have been passed. In Manitoba, 23,037 have relinquished their mother tongue, and in New Brunswick, 21,597.
This has been the inevitable result of the various laws I mentioned earlier, which have been passed since confederation against the use of the French language and for its prohibition in other provinces.
For this reason, I think the hon. member for Villeneuve should re-examine the facts before stating, as he did, that:
Since that time, I am convinced that Canadians of all extractions recognize the right of bilingualism in our country, namely the French and English
languages.
This was accepted only in one place, the province of Quebec, and refused by the other nine provinces through laws and discriminatory legislation which led to an actual linguistic and racial genocide.
Mr. Speaker, I reread today the speech made by the hon. member for Villeneuve, and I think his argument contained two specific points. First, he did not think that the present situation in Quebec or in Canada was the fault of confederation or Ottawa.
In my opinion, Ottawa is certainly to blame for the language situation, because it did not take the remedial and other measures necessary.
Even today, Mr. Speaker, in 1967, the Minister of Transport, here in Ottawa, tells us that nothing will be done to facilitate winter navigation on the St. Lawrence, because Halifax might be harmed. Even yesterday, in Toronto, the mayor of that city declared that he did not want Expo to become permanent in Montreal because it would be detrimental to Toronto. This or that action is always being forbidden in Quebec as it might be prejudicial to Halifax, or Toronto, or some other city. Why can the Quebeckers not be allowed to develop on their own, when they have the natural resources, the possibilities to do so?
The St. Lawrence is in Quebec; yet the Quebeckers cannot have winter navigation lest it harm Halifax.
Expo 67 was planned, built and is now a living fact, in Montreal. And all this should be pulled down so that it will not interfere with Toronto.
Is this that national unity you are talking about? To destroy and demolish and prevent Quebec from developing so that other sections of the country may not be harmed. Well, I say that when such things happen in
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The Budget-Mr. Gregoire Quebec, it is Ottawa's fault, and the blame should also be put on confederation; they prefer to please Toronto and Halifax rather than to allow Quebec to develop.
This situation has been prevailing in Canada for the past hundred years and that is why I say that we are quite justified in Quebec, in view of laws and facts I have just mentioned to cry out: a hundred years of injustice!
[DOT] (4:30 p.m.)
Mr. Speaker, another matter raised now by the hon. member for Villeneuve and raised by him in Quebec over the weekend-and I think he is right and I agree with him-is that there is no political freedom without economic freedom. But he should finish his sentence by adding that there is no economic freedom without political freedom, and if Quebec wants economic freedom, it shall need its political freedom also, just as it will have to work towards economic freedom to attain political freedom.
Mr. Speaker, I have here a few figures. We hear sometimes of the hopes of the people of Quebec, and of their desire to develop in some spheres. Well, I have here some statistics which show that confederation as a whole has not always served the aspirations, desires or wishes of Quebec, far from it.
Take, for instance, Canada's national debt, which I divide into four separate stages. I shall mention them first, then give an explanation of each afterwards.
First, in 1840, at the time of the Union Act; second, the British war in South Africa; third, the First World War; and fourth, the Second World War.
Our national debt arose out of those four stages, but there was also the Korean war.
The year 1840 saw the passage of the Union Act, under which Upper Canada and Lower Canada were united, although the latter, now Quebec, had about 40 per cent more population than the former, now Ontario. Ottawa decided then to take over the debts of both provinces, of both groups. The debt was about twelve times higher in Ontario with a sparser population than in Quebec, but everything was put in the same package and they said: The others got into debt-you, to a lesser degree-but you will pay part of Ontario's debts in agreeing to the Union Act.
When confederation became effective, the debts of Ontario, New Brunswick and Nova Scotia were all lumped together, and Quebec was forced to assume part of it; thus Ottawa started in 1867 with a $93,046,502 debt, and


Quebec was forced to assume its share, even though this came from the other three provinces. Then the debt remained at a rather steady level until 1913, that is for a period of 46 years. In 1913, it rose from $93 million to $483 million. In 1914, war was declared and when it was over in 1920, the debt had increased eightfold and stood at $3,041 million. Then for 19 years the debt remained stable, barely increasing; it went up from $3,041 to $3,710 million. And yet Canada was going through a period of economic crisis, of unemployment, of dole, of misery. In spite of all that, the debt did not go up. It increased eightfold in six years during the first world war but during the 19 years between the two wars, including seven years of depression, it stayed practically the same.
But from 1939 to 1945, another war was fought and the debt increased again considerably; it increased sixfold, from $3,700 to $18,959 million in wartime. Out of this amount, several billions of dollars were given, not loaned, to England. I have often heard the hon. member for Villeneuve say that $7 billion were given to England during the war. And thus our debt went up from $3,710 to $18,959 million.
Since the war, there has been another period of peace, 20 or 22 years have gone by and this debt has remained practically stable, for it has increased from $18,959,000,000-as shown in the Statistical Yearbook for 1948-49-to $19,940,000,000, which is an increase of less than one billion in 22 years. The figure $19,940,000,000 is taken from the latest speech of the Minister of Finance (Mr. Sharp) and may be found on page 195 of the official report for June 1, 1967.
Our debt, Mr. Speaker, was first made up of the debts of the other provinces which we assumed at the time of confederation in 1867, to which were simply added the expenses of the last four wars-the war waged by the British in South Africa, the 1914-18 war, the 1939-45 war, and the Korean war.
Therefore, Mr. Speaker, our debt stands at $19,940 million and this year, we shall have to pay $1,274 million in interest only. The people of Quebec are paying 30 per cent of that amount. In 1942, at the time of the famous referendum on conscription, Quebec voted against it in a proportion of 90 per cent. And when Camilien Houde, then mayor of Montreal, objected, he was thrown in prison, without any trial or investigation. In the event of another war, the people of Quebec will have to accept it, whether they like it or not.
October 11, 1967	COMMONS
Even if the hon. member for Villeneuve is returned to the house and holds the balance of power with 50 members from Quebec, if we are led into the Viet Nam war, his power will be useless, since the 190 members from the other provinces will again side with England and the United States, which will add to our debt, even against the wishes and the aspirations of Quebec.
And if the member for Villeneuve raises strong protests, then he will have the same fate as Camilien Houde, he will be prosecuted and imprisoned. The balance of power will completely disappear before the majority of 190 members from the nine other provinces.
And on our present debt which we never wanted to incur, we are paying 30 per cent of the interests which amounted this year to $1,274 million, according to the figures quoted in the budget this year. A sum of $1,274 million and 30 per cent of that amount is paid each year by Quebeckers on a debt which they did not want to incur and which has never been of any use to them.
Now, what do the Quebeckers expect from the arms race or defence? We are a peace-loving people who would solve the world problems not with bombs and cannons but by feeding the hungry. That is the way we hope to co-operate in international operations.
But because we are a minority, every year the colossal national defence budget is imposed upon us and we have nothing to say about it: defence production, $38 million; national defence department, $1,688 million, a total of $1,726 million.
Just this year, we will be buying $26 million worth of bombs. What will Canada be doing with those bombs? On whose heads are those $26 million worth of bombs going to be thrown?
Yet, because we are a minority, because the taxes of the provinces are in the majority, we are forced to contribute through our taxes to such astronomical expenditures in the field of defence. If the two amounts for national defence and interest on the debt are added, we get the figure of three billion and some odd hundred thousand dollars a year. Therefore, our 30 per cent share, as we pay 30 per cent of the taxes levied by Ottawa, amounts to $900 million a year. That is what Quebec pays: $900 million a year. An independent Quebec would no longer have to face such extravagant expenditures, which we do not approve. We Quebeckers would then save a choice been made as to their destination? $900
DEBATES	2997
The Budget-Mr. Gregoire million a year. Yes, mind you, $900 million a year.
Mr. Daniel Johnson, the premier of Quebec, tells us: Quebec has to borrow over $450 million each year. As the Quebec minister of industry says that investments in Quebec, in a given year, reach some $550 million, this means that Quebec gets 1 billion dollars, that is $450 million in foreign loans and $550 million in foreign investments.
If we could just save the fabulous sums of money being spent for defence and the interest on our debt, that would be equivalent, for Quebec only, to the share we are paying for that. Out of a total of $3 billion, our share amounts to $900 million. This would almost be sufficient, without changing anything else to enable us to become really independent from the economic point of view; that is if we, from Quebec, were politically independent and if we could decide once and for all, to stop giving away the money from our taxes to pay the astronomical amounts required by defence and by the interest on the national debt. Thus, there would be a saving of $900 million.
[DOT] (4:40 p.m.)
The other night, I heard the hon. member for Villeneuve say on TV: I am not independent if I am compelled to borrow money from the United States, I am dependent! That is a fact. We are compelled to borrow money from the United States, precisely because we have to pay the interest on the national debt, we have to buy bombs, submarines, munitions, we have to pay in connection with national defence the cost of armaments that will never be used. This is why we are economically dependent on a foreign power, and if we have an independent Quebec, we will put an end to such useless expenditures and, thus, win our economic independence.
No political independence without economic independence, that is true, but I also say: No economic independence without political independence. As long as Quebeckers are not free and are not able to decide on the purpose of their expenditures and their taxes, Ottawa will keep on spending as it does today, disregarding our views, and we shall remain economically dependent.
That is why I say that it is Ottawa's fault, as a result of its national budget, if today we are economically dependent, and if we get rid of that control by Ottawa, we shall become independent not only in the political sense but also economically.

October 11, 1967
The Budget-Mr. Coates
I admit that Quebeckers are not longing for constitutional changes, that they want to settle their economic problems; that is true. But we shall not be able to settle them as long as Ottawa controls the main decisions to be taken in the economic field and as long as it uses that control to impose upon us the kind of expenditures which we do not want.
Well, Mr. Speaker, that is why I say that the fault lies with Ottawa that we are at present in a constant state of dependence economically.
Confederation has been in existence for one hundred years. It is one hundred years since we are working, developing a little our natural resources, building industries, trying to train qualified people in Quebec; nevertheless, after one hundred years we are being told that Quebeckers need foreign investments since they have no savings, they have no means to develop their resources. The reason why we have nothing, why we have no savings is that they have been channelled to Ottawa and Ottawa has used them not to develop our own economy but for purposes such as I specifically mentioned a while ago and which are of no interest to us, are not at all in the interest of the population, and are even against its interests.
For some time, many proposals have been brought forward-


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


Mr. Robert C. Coates (Cumberland):: Mr. Speaker, in entering this debate I feel certain there are many valid criticisms to be made about the economic policies of the present administration. However none is more devastating than the criticism of the lack of economic policy in so far as the Atlantic provinces are concerned. By the time I have finished putting on the record some pertinent statistics relating to the economy of the Atlantic provinces there will be no member in this chamber who could disagree with me.
I also feel certain there are many hon. members who have come to the conclusion that members from the Atlantic provinces are almost chronic complainers; but I submit, Mr. Speaker, that the statistics put out by the Atlantic provinces economic council-and I may mention that this is a non-partisan council which has no association with any political party-will verify beyond shadow of a doubt that the economy of the Atlantic provinces

has not received the kind of attention from this government that one would expect, if that region is to remain a strong and healthy part of this Canada of ours.
In this connection I refer to the July 1967 Atlantic report. Let me draw the attention of hon. members to some of the basic factors that one must consider when making a determination of the strength of the economy of a given area of this nation. First of all I should like to refer to personal incomes for the year 1966. In that year the people in the Atlantic provinces as a group had a personal income that was only 69.4 per cent of the national average-not a very flattering figure. What is even more alarming is that in 1961 the figure for the Atlantic provinces was 69 per cent of the national average; in other words, in five years personal incomes increased by only .4 per cent.
The picture is even worse, Mr. Speaker, when we look at the figures relating to Ontario, where we discover that the difference in per capita income between that province and the Atlantic provinces is 44.5 per cent. Surely it is next to impossible to expect the Atlantic provinces to survive as a basic part of this nation unless some sort of over-all policy is introduced to upgrade the income average of this particular area.
This is only one of many alarming statistics relating to the Atlantic provinces. For example, Mr. Speaker, may I point out at the same time that while the over-all per capita income of the people in the Atlantic provinces in 1966 was 69.4 per cent of the national average, in Newfoundland it was only 61.7 per cent and in Prince Edward Island it was only 64.8 per cent, which is below the average for the Atlantic provinces.
We are also facing a growing problem that should be of the utmost concern to this government but which seems to be of no concern to them, certainly if policy is any indication of concern. I refer to the exodus of people from our area. For many years we in the Atlantic provinces considered the present President of the Privy Council (Mr. Gordon) the real bogeyman as far as the Liberal government was concerned. We called him oneway Gordon because he was the man to provide one-way tickets out of the region. He has been replaced by the whole Pearson administration and they are moving our people out as fast as they can, in the hope that they can eliminate our population. That is the policy of the present administration, and is the sole policy offered to cure our economic ills.
October 11, 1967

[DOT] (4:50 p.m.)
Let us look at statistics. The views I present are not my own but are those of the Atlantic provinces economic council. That body reports that between 1961 and 1966 more than 100,000 people, roughly 20,000 per year, migrated from the Atlantic provinces. This is the highest level of out migration that has ever been recorded for any five year period in the Atlantic provinces. Clearly, out migration from the region has reached alarming proportions. If that trend continues the Atlantic provinces will have lost 200,000 people by 1971, or 10 per cent of the 1961 population. Moreover, limited studies of this area show that the younger and more dynamic element, those who are best fitted to make a positive contribution to the region, are leaving in search of better opportunities elsewhere. I can think of nothing that ought to concern the government more than a statement to that effect by a non-political, nonpartisan economic body.
What is the result? Recently this government permitted the implementation of a new transport rate that is bound to cripple Atlantic provinces industries. This is the yardstick of the government's concern for our people. The people of the Atlantic provinces are concerned about a government that seems to go from crisis to crisis and seems to think that a crisis is commonplace. The Minister of Finance (Mr. Sharp) tells us that unless business and labour show restraint, the government's policy will be one of creating unemployment in Canada. His words, as reported on page 2809 of Hansard, are as follows:
I feel that we must-and we will-find some way to bring this inflationary movement under control even, if necessary, by letting the economy develop a little more slack for a year or two while price and cost increases taper off.
I ask the Minister of Finance, how much slack does he want in the Atlantic provinces? How hot is the economy of the Atlantic provinces, that it needs to be cooled off. The report of the Atlantic provinces economic council says this on the first page:
With the absence of any degree of growth in the total labour force the unemployment rate rose slightly from 9.3 per cent last year to 9.6 this year (double the national rates of 4.4 and 4.9 per cent respectively).
How much more unemployment must we take because of the fumbling and bumbling of this government? I am sure the people of the Atlantic provinces wish to know that.
The report shows that at 12 per cent Newfoundland's rate of unemployment was
The Budget-Mr. Coates the highest in the region. How much more slack do we need in Newfoundland? That province was followed by New Brunswick with 10.3 per cent, Prince Edward Island with 8.8 per cent and Nova Scotia with 7.8 per cent. Surely no government with any humanity would deliberately espouse policies that will create greater hardship for the Atlantic provinces than the figures I have quoted show must already exist. Nevertheless the Minister of Finance has said that his policy will be one of unemployment for the people of Canada, unless they show restraint. What example of that restraint did he show? In times of boom-and certainly the Atlantic provinces show no signs of boom-he says we are to have a deficit of $750 million.


Mitchell William Sharp: May I ask the hon. gentleman a question? Is he quoting from something that I said or is he making up something of his own. I have not said anything about a boom.


Robert Carman Coates: The minister talked about cooling off the country.


Mitchell William Sharp: The hon. member has misquoted me.


Robert Carman Coates: The minister may say that I am misquoting him.


Mitchell William Sharp: I did say that.


Robert Carman Coates: When the minister talked about slackening the economy he talked about a hot economy.


Mitchell William Sharp: I did not say that.


Robert Carman Coates: The minister says that he did not say that.


Mitchell William Sharp: If the hon. member will read my words he will see that they speak for themselves.


Robert Carman Coates: I wish to tell the minister this: I will make my own speech and I shall put my own interpretation on his words.


Mitchell William Sharp: Fine, so long as the interpretation is the hon. member's.


Robert Carman Coates: That is how it will be.


Mitchell William Sharp: I hope it is understood that the interpretation is the hon. member's.


Robert Carman Coates: Well-


Mr. Bell (Carlelon):: October 11. 1967
The Budget-Mr. Coates


Robert Carman Coates: It is wonderful to see the minister showing a little concern about what is being said.


Mr. Monteith:: The subject must have
touched him.


Robert Carman Coates: It must have touched him close to his heart. We know how close to his heart are those he throws out of work. If he implements a policy of unemployment the subject will not be as close to his heart as it will be to the hearts of the people of Canada. They will throw him out, with his government, and they will do that today or at any time in the future.


Mr. Deputy Speaker:: May I interrupt the hon. member. It being five o'clock the house will proceed to consideration of private members' business.


Jay Waldo Monteith: Mr. Speaker, I had been given to understand that there was an agreement to continue the debate until six o'clock.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Does the house agree to suspend private members hour?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: The hon. member for Cumberland.


Robert Carman Coates: In the interim, I found these remarks of the minister as reported on page 2807 of Hansard. In case he has forgotten, he said this:
We have had now a continuing upward trend in the economy over more than six years and there is no suggestion whatever of any downward turn in the future.
If that is not an indication by the minister that we are close to a boom, then I do not know what interpretation to place on those words.


Mitchell William Sharp: No, it is not a boom.


Robert Carman Coates: The minister says that it is not a boom. I say to him, go to the Atlantic provinces and, sure as the devil, he will find that it is not a boom. The conditions down there do not even come close to being a boom. We have not been helped by this government's policies. It is about time we had action from the government.


Mitchell William Sharp: There has been an enormous improvement in the last few years.

[DOT] (5:00 p.m.)


Robert Carman Coates: The minister also talks about restraint. He came in the other day and told us a wonderful fairytale about the way in which he had slashed the estimates of the various departments. For this year?-not on your life. He had butchered the estimates for next year. Has anyone in this chamber seen those estimates? No, Mr. Speaker. This is just something he has done in his office, or in treasury board. I like Mr. John Meyer's account of the Minister of Finance slashing away at these estimates, as we read it in the October 6 edition of the Chronicle-Herald. Mr. Meyer says this:
The Treasury Board has trimmed $650 million from the requests for funds in the next fiscal year by departments and agencies. Mr. Sharp won't say where these reductions are being made. He does say there will be more of them.
It's encouraging to be told the government recognizes the need for restraint. Still, one is left with the same sense of unreality that must possess the husband whose wife tells him she has saved $100 by not buying a new dress-and asks for the money instead.
This is a good description of the way in which $650 million has disappeared from estimates we have never seen. The yardstick by which to gauge the degree of restraint exercised by this government should surely be a comparison between the spending this year and the next year's estimates. If the government intends to show restraint it ought to bring in estimates indicating a degree of selfdiscipline which has not been forthcoming any time from this administration so far, although hon. gentlemen opposite were well aware of the difficulties facing the country in a monetary sense.
I should like now to return to the subject of the Atlantic provinces. We were hopeful that a comprehensible policy would be forthcoming to give us grounds for optimism in the future. But there has been nothing to encourage such hopefulness. I should therefore like to make a suggestion to the government, one which, though containing some drawbacks from my own point of view, seems to represent the only kind of positive approach which can be expected at this time if we are to find lasting solutions which will be of over-all benefit to the region.
At one time I had hoped that the Atlantic Development Board would produce a comprehensive program for the Atlantic provinces, and that it would inject into the region the kind of capital needed to provide Canadians who live there with the same opportunities as are available to Canadians living in other
October 11, 19S7	COMMONS
parts of the country. However, this government relegated the Atlantic Development Board to the role of gap filler, and while the board has been effective within its limited scope it can no longer be regarded as a body capable of doing the job I had envisaged for it when it was established.
In these circumstances I should now like to see a special committee of the Senate set up to make a comprehensive study of the Atlantic region-a study similar to that carried out by the other house in connection with land use and aging. It is true that specific studies have been made in relation to coal and transportation, but I believe the time has come for an examination which would include all aspects of the economic life of the region. Coal and steel certainly form an integral part of the economic environment of the area, but these industries must be considered in conjunction, for example, with transportation, including port activities, vis-a-vis icebreaking on the St. Lawrence.
The agriculture industry in the Atlantic provinces is anything but prosperous. In the tourist industry, in fishing, in lumbering, the picture is the same. I believe the hon. Senators in the other place can carry out the kind of function I have suggested, and that a committee of the Senate would have an appreciation of the historical background of the Atlantic provinces as well as an understanding of what we should be trying to achieve. Such a committee would be much better than a royal commission. In my opinion we do not take sufficient advantage of what can be done by the other place. There are some tremendously capable and able men sitting in that chamber-men who have given us the basis for the kind of legislation which has been passed here in recent years in connection with land use and in connection with aging. I think they could do the job which is required of them. We should not waste even a day in having the committee set up, getting this work started and marshalling statistics such as those I have put on record in Hansard this afternoon.
I say this because no Canadian, no matter how prosperous he may be today, can feel happy or contented when he realizes the amount of hardship and suffering which exists in the Atlantic provinces. And no Canadian can feel that a government is fulfilling its obligations when it allows conditions such as these to persist. Let us start as quickly as we can and finish a job which has been with us for a hundred years.
DEBATES	3001
The Budget-Mr. Saltsman
[DOT] (5:10 p.m.)
Now, dealing with another subject, one which I have read about in the newspapers, I wish to say that as a Canadian nothing makes me angrier than to read of people who have stood in line for hours and hours, in the rain and cold, waiting admission to one of the Expo exhibits, only to have some V.I.P. force them to stay in line even longer. So far as I am concerned there is no justifiable reason for this. I do not think for one minute that this necessarily occurs at the request of a V.I.P. All too often it is due to some overzealous administrator.
Since the taxpayers of Canada have been responsible for achieving this wonderful thing called Expo, I believe that when they visit it they should not be held up by anybody. If administrators wish to cater to a V.I.P. then let them select an hour when the V.I.P.'s visit is not going to disturb people who have been standing in line for hours and hours. I do not like this, and I am sure most Canadians do not like it. I am sorry that during the last big week end of Expo administrators did not find another way of handling the problem.
I do not anticipate that there will be many more visits by V.I.P's to Expo, but that does not mean we should let the matter go and say nothing about it. I hope there will be no recurrence of this, and that when people go to Expo they will gain entry to the exhibits as quickly as possible, having waited in line to do so, without being upset by some V.I.P.


Mr. Max Saltsman (Waterloo South):: Mr. Speaker, I regret that the Minister of Finance (Mr. Sharp) is not in the chamber. I had hoped he would be present to listen to some of my remarks about this budget, but no doubt he will read in Hansard what I have to say.
I should like to start by paying the minister the compliment of at least being clear. His is not the kind of clarity that says anything, but it certainly is a clarity that demonstrates, perhaps inadvertently, the reason for the government's failure to solve the country's problems. Some people may still believe we have a government. They come into the House of Commons and see government benches occupied, and so are under the impression that the country is being governed. But when they read the statement on the budget made by the Minister of Finance their disillusionment should be complete. The government has abdicated its responsibilities, and throughout
October 11, 1967

The Budget-Mr. Saltsman the minister's speech defeatism rings out loudly and clearly.
I wish to refer back to some of the words used by the minister in his speech, as recorded in Hansard of October 2, at page 2730:
A country like Canada, with the most rapidly growing labour force in the world, is bound to have a housing problem.
I would suggest that a country like Canada, that wishes to manage its economy, is not bound to have a housing problem; is not bound to have anything it does not wish to have. If it has a government that is willing to take an interest, that is willing in a positive way to enter into the economic activity of the country, then it is not bound to have a housing problem. But as long as the government abdicates its responsibility the country will experience a continuing shortage of houses for people who require them.
In his speech the minister made another assumption when he said:
The first problem we have to deal with, if we are going to face up to the housing problem adequately and not in a partisan fashion, looking at the realities of the situation, is the shortage of capital or I might say, if you want to put it another way, the shortage of savings.
This is what the minister said, in spite of the fact that Canada has the highest rate of savings of any modern country, certainly of any country in the western world. The minister talked about a shortage of savings when he should have been talking about a misdirection, a misallocation of savings, and a wrong priority by the government as to how the savings of the Canadian people should be used. I think the minister will go down in history as the master of unfounded hypotheses, especially if his speeches as recorded in Hansard are examined.
When the minister stands up with that great assurance and aplomb that he commands in the house, he makes his words sound almost credible. But we have to read them in print, without his personality surrounding them, in order to get the complete and true significance of what he is saying. What emerges then is nonsense. What emerges is an indication of his refusal to use the instrument of government, as his government was elected to do on behalf of the people.
The minister has thrown up his hands in failure. He has been beaten by the marketplace. When the marketplace makes a decision the minister, with all the great resources at his command, finds he cannot go against the marketplace. If that is the case I do not


know why we need this government, at all. We might as well turn everything back to the marketplace, if that is going to be the attitude, and at least save ourselves some money. I assume the Canadian people elected a government to manage their affairs, but this does not seem to have met with the approval of the Minister of Finance.
Obviously there are things in the economy that we cannot always influence. I do not think we can blame the minister if the weather goes bad and we have a crop failure, or if international conditions beyond our control influence our economy. But having said that, let me emphasize that the vast majority of economic decisions that have to be made come under the influence of the Minister of Finance.
It is time that we in this country realized there is only one sovereignty, the sovereignty of the people as expressed through their parliament. It is not the market place that is sovereign, it is parliament acting on behalf of the people of Canada.
The question of sovereignty is of the greatest importance in this debate, because the minister apparently believes it is the market place that is sovereign and not the government of Canada. It is important in a number of ways, and although I am not prone to quote the Minister of Trade and Commerce (Mr. Winters) on my behalf, I would like to quote one statement of his which has a great deal of merit and expresses fairly clearly the idea of sovereignty.
Dealing with the question of foreign ownership, in the Financial Post of July 15, 1967, the Minister of Trade and Commerce was reported as saying:
Whether or not it is used wisely in the economic program of the nation depends upon the extent to which the government defines the rules of the game.
In the final analysis it does not matter who owns the capital. It is the use to which it is put that counts, and this is a field in which the government can be the determining influence.
However, we have the President of the Privy Council (Mr. Gordon) who disagrees with the Minister of Trade and Commerce-and I think for very good reasons. While it is true that the economic sovereignty rests with the government, the President of the Privy Council knows that his party will not exercise that sovereignty and therefore seeks to change the direction of ownership in this country as an indirect way of attempting some control over our destiny. He hopes that Canadian owners will be more concerned
Oclober 11, 1967	COMMONS
about the future of the country than will foreign owners. I do not think there is any evidence to support him on that, but he at least must be given credit for attempting it. The misguidedness of his attempt stems from the lack of faith in his own party.
[DOT] (5:20 p.m.)
In this latter half of the twentieth century the fact of political sovereignty is becoming more and more apparent. There really is no more economic power. Now that we have a democratic system which has provided political parties through which the people can express their points of view, and which give them reasonable alternatives, it is quite possible for the government they elect to determine their economic destiny. Their destiny need not be left to the marketplace. There is no such thing as business, either domestic or foreign, saying to the Canadian government which represents the Canadian people that business will not act in the national interest. It is completely within the power of the government to ensure that it does.
I should like to make one thing clear. The marketplace and the free enterprise system can be very useful instruments for determining efficiency; they can be very helpful in respect of many of the every-day decisions which must be made. I do not look forward to such a massive intervention in our economy that we would find government in every phase of our activity. This is not necessary. What is necessary, however, is that in those areas where the free enterprise system does provide useful opportunities in this country there is a responsibility upon the government to see that it works properly. I would suggest to the government that, despite its so-called adherence to the free enterprise system, the market is not working to the benefit of the Canadian people. It could be working a great deal better.
There is one aspect of our lives which cannot be left to the marketplace, and that is the determination of values and priorities in our society. Whatever the value of the marketplace may be, it certainly cannot be the ultimate arbiter of what is important or valuable to our civilization. This must be the role of political sovereignty. I should like to quote another Liberal-and I am sorry the Minister of Finance (Mr. Sharp) does not pay a little more attention to some of the more progressive elements in the Liberal party. I quote from the Montreal Star of June 10, 1967, where Mr. Kierans is reported as saying this:
Canada should assert the supremacy of politics over property as Aristotle defined the over-riding
DEBATES	3003
The Budget-Mr. Saltsman
interest of the "public". For the past 200 years, Canada was "traumatized" by the outmoded thesis of Adam Smith and Karl Marx that property was supreme.
We had two choices, he said: First to estimate our productivity and then define our social aims; or second, to define our social aims, such as medicare, and "then fight like hell to establish the productivity."
I hope that this message will not be lost on the minister when the question of implementation of medicare arises. Mr. Kierans clearly indicates that he prefers the second method, and goes on to say:
Once we establish by public policy that the public interest is supreme money becomes something to control like anything else.
There is a real dilemma facing the minister. He says we have no money for housing and yet, as has been indicated by the Economic Council, we have the highest level of savings. I would suggest that it is not a matter of the lack of money or the absence of savings, but rather the absence of priorities in respect of how that money should be used. It is time that this government established some priority for the savings of Canadians. In Canada we have the highest capital investment per worker, and yet our productivity is 25 per cent to 30 per cent lower than that of other countries with less capital investment.
This is not a new problem although the Economic Council stressed it very strongly. It is one of the central points the council made. This has been said for years. We could go back to 1957 when this was stated by the Royal commission on Canada's economic prospects. It was stated that the problem of productivity in the Canadian economy was bad, and needed correction. It was also pointed out that we were suffering from badly organized and poorly specialized industries which could not compete in the way they should. In this ten year period nothing has been done to increase productivity.
I might qualify that. I see a few heads are raised, including that of the Minister of Industry (Mr. Drury). One thing was done: We had the Canada-United States auto agreement. It was absolutely wrong to enter into this agreement. Again, it was an evasion of responsibility. It has worked in a fashion; I will not argue about this because the facts are available. What should not have been done in order to find a solution was to integrate our economy with that of the United States and reduce for all time the possibility of our taking independent action regarding one sector of our industry.
October 11, 1967

The Budget-Mr. Saltsman
Perhaps the Minister of Industry had no alternative in respect of that particular industry, but I would deplore seeing many more of our industries integrated in that particular fashion. There are alternatives, but those alternatives require positive and strong action on the part of our government. We have inflation with unemployment. The Minister of Finance feels that he may have to increase unemployment in order to cure inflation. Surely he can come up with a better answer than that. Surely this is not the only way to take care of the problem of inflation.


Mitchell William Sharp: May I ask the hon. gentleman a question. I take it he admits that the socialistic policies of the British government have failed, and yet he seems to be advocating them for Canada.


Max Saltsman: I was not aware that there is a socialist government in Great Britain.


Mr. Roxburgh:: Oh, come now.


Mitchell William Sharp: It is not Conservative at any rate.


Max Saltsman: I do not wish to take up the time of the house in an argument as to what kind of government Great Britain has. However, the minister well knows that the problems of Great Britain are completely different from the problems of Canada. If he felt that he should inject a note of humour, that is fine; but surely he certainly is not serious in trying to suggest there is any analogy between the economy of this country and the economy of Great Britain.


Mitchell William Sharp: But I thought my hon. friend was a follower of the philosophy being practised in Great Britain?


Max Saltsman: We have in this country, as everyone agrees, the highest growth potential of any country in the world. We have raw materials beyond anyone's expectation; we have wealth beyond calculation. There is no country in the world which has the wealth in agriculture, minerals and human resources that we have in this country. There is no other country in the world that is as self-reliant as Canada could be, or as independent of the whims and changes in the international markets. If we are dependent to some extent today, it is because this government has burdened us with this dependency. There is some conventional wisdom which must be examined. It is the assumption that we must export, export, and then export again.
[Mr. Saltsman.!
[DOT] (5:30 p.m.)
Let me suggest to the minister and the Minister of Industry-and I am glad to see him in the house today-that the effect of exporting raw materials from this country has resulted in a lack of secondary manufacturing industries we might have developed ourselves. This has turned us into a nation of exporters of raw materials at relatively low profit rather than a great nation of secondary manufacturers. This error on the part of the government has done a disservice to Canadians. This is the kind of conventional wisdom that should be examined.
Many of our exports consist of raw materials, and in many cases tremendous advantage is gained through exportation. The exportation of wheat has been a great boon to this country, as has the export of lumber. These are renewable resources. However, when we export resources such as nickel, only to find that the costs of exploration are increasing, this is not in the best interest of the country. Canada is known throughout the world for its production of nickel, yet Canadian manufacturers cannot get enough nickel to fulfil their own requirements. Let me read from an article which appeared in the Globe and Mail on March 3, 1967.
Because of government encouragement to seek export orders, Zenith has spent considerable money developing new products for U.S. sales.
This was a quotation from Mr. Laws, president of Zenith. The article then continues the quotation as follows:
Mr. Laws said he is faced with a shortage of nickel. "I don't think we should be on a quota at all."
Mr. Laws said the national economy would be better served by the export of finished products, rather than shipping out large quantities of raw nickel.
I believe he is right. Certainly there is no excuse for not satisfying the domestic market before exporting raw materials. This is not the first time this has occurred. It has occurred on other occasions which resulted in the shortage of copper and other minerals. We have been terribly concerned about satisfying export markets and not concerned enough with building up secondary industry.
It was interesting to read the minister's remarks of October 4 as recorded at page 2808 of Hansard, when he said:
We have never encountered anything like this before, nor has any other country. We are moving out now on to unexplored territory.
I am surprised the minister has such a short memory. It is my understanding that he
October 11, 1967	COMMONS
was an outstanding civil servant during that difficult wartime period which posed infinitely greater stress upon this nation than the present situation.


Mitchell William Sharp: We are not at war.


Max Saltsman: We are at war, and you should real se that fact. We have a war that must be fought against poverty. Many people need houses. Many young couples are being thrown out of apartment buildings because they have two or more children and landlords do not like to have children around. This may not appear to be a war to the minister, but it certainly is a war so far as those people who are struggling to maintain some sort of decent standard of living are concerned. I suggest that the minister take a very serious look at their plight instead of just saying that this is not a time of war. If we can muster our intelligence, resources and courage in order to devastate things, surely we can find some ingenuity to fight these problems of poverty.
The minister has said that solutions to our problems would not be easy to find. We must move away from reliance on past economic policies. We cannot continue to believe that if we wait things will adjust themselves. We have passed that point. Once we have committed ourselves to a full employment policy-and I do not see how any government could fail to follow such a policy-we must then go on further. We cannot turn the clock back to times of unemployment. We must talk about how to maintain prosperity and how to prevent inflation with full employment. In order to do this the government must bring in some measure of control over the economy.
There is no invisible hand to guide the destiny of the people. There are hands but they are not invisible-they are the hands of everyone looking toward his own interests. This may not be in the best interests of the people of this country, but it is the situation. There is no longer a question as to whether we are going to plan or not plan. The question now is, who is going to do the planning for us, the large corporations or the government. Are these large corporations to determine our economic future? I do not ask that question with any malevolence, but I feel that our economic future should be determined by the sovereign government elected by the people of this country. Does this government intend to sit here and suggest that it cannot interfere in these delicate matters, and
DEBATES	3005
The Budget-Mr. F. E. Leblanc that the invisible hands will straighten things out?
In closing let me suggest that we cannot continue in the manner we have followed up to this time. We cannot rely on automatic forces to take care of things. The government is going to have to offer some direction and plan in order to maintain full employment in this country and the standard of living that is necessary. I suggest that we will need a prices review board, selected price controls, restructuring of our industry and a changing emphasis from primary to secondary manufacturing. The government must maintain more control on our economy and import replacement. There must be a lessening of our dependence on United States markets in order that we may determine our own values with less inhibition. In this way the Prime Minister (Mr. Pearson) will not have to say we can do nothing about foreign policy because 60 per cent of our exports go to the United States. That is not the way to determine foreign policy, and certainly not the right way to run a country.
We must implement the Carter Commission recommendations as soon as possible in order to have a better allocation of resources, instead of backtracking at the first sign of pressure. We must make available to all our manufacturers those raw materials which are indigenous to this country. Their needs must be satisfied first. Above all, we need an investment policy because the market can no longer determine the allocation of investment. It is this government, or any other government that wishes to accept responsibility, which must determine the social priorities and investment priorities of this nation. Above all, there must be a clear expression on the part of this government, elected by the people, that it will use the authority of government on behalf of those who sent them here and entrusted them with the direction of this country's future.
[DOT] (5:40 p.m.)


Mr.   Fernand-E. Leblanc@Laurier: Mr. Speaker, on reverting to the budget debate, the Minister of Finance (Mr. Sharp) launched a distress call, an SOS to the provincial and municipal governments, to industry, to labour unions, to all and sundry asking for a priority effort to stop the spiral of inflation.
More and more, our country is menaced by this danger and the fight started almost a year ago by our government, must now be
October 11, 1967

The Budget-Mr. F. E. Leblanc intensified. It is impossible for a central government to regulate prices, costs and salaries without the co-operation of every level of government, of the whole community, of every citizen.
Everyone must realize that this fight is urgent and must take care that the government is not compelled to take drastic steps in order to check the purchasing power and to decrease production and profits. This could be brought about by means of a special and temporary tax which would have the result of warding off a disastrous situation for the entire country.
Mr. Speaker, in answer to the request of the Minister of Finance, intermediate bodies have started to submit their views on the report of the Carter royal commission.
The Carter royal commission is probably the most important commission called upon to report since confederation, that is, in a hundred years, in order to determine the existing or desirable standard of living in Canada. I have the greatest respect and admiration for the competence and the merits of its members.
Even though the commission did a good job, a tremendous job, the government must consider carefully all its recommendations before accepting or rejecting them.
However, I regret that the commission submitted its report in such a dictatorial way, warning that it must be accepted in toto or rejected in toto. That report has been and will again be very controversial throughout Canada, and I do not think it is democratic to force the parties concerned to accept or reject in bulk without further ado.
Economists, accountants, lawyers and all the others concerned with this problem do not seem to agree on the doctrinal and very theorical arguments set forth in the report, which advocates extreme changes, a complete fiscal revolution and an entirely new philosophy.
The assessment of the proposals about the national economy is so speculative and so unreliable that it seems improper and unthinkable that the government should accept that report in toto. According to that report, our present fiscal system as a whole is basically unsound judging from the sweeping structural changes it recommends.
Its criticism is very harsh, but I am not fully convinced that our present system is absolutely and entirely bad and that it must be scrapped.
[Mr. Leblanc (Laurier).J

Mr. Carter and his colleagues attempted to reject the past, that is to say all that is found now in the taxation field. They studied the problem as if it were necessary to start from scratch and, in my opinion, that underlines both the wisdom and the weakness of some recommendations.
Of course, our system is not perfect. It has often been patched up rather than revised according to an over-all plan. Needless to say, I am in favour, as all the members are, of lower taxes for the small wage-earner so that he might meet his basic requirements.
At the present time, those who earn less than $5,000 pay too much tax, compared to the other taxpayers, and the Minister of Finance should make the required adjustment.
Still, the whole burden should not be placed on the shoulders of those citizens who earn from $5,000 to $10,000, thereby creating another injustice while wanting to remedy the first error. In this regard, I have no concrete solution to offer, because the members unfortunately do not have at their disposal a staff of experts and researchers.
However, I am pleased to propose that the small wage-earner should have some relief and I urge the Minister of Finance to study the possibility of spreading out his taxes amongst other taxpayers whose income might justify higher taxes.
Mr. Speaker, I must speak up against one of the recommendations of the Carter commission. I have already done so in the house, on April 21, 1966, at which time I spoke on the same recommendation as made by the Belanger commission on the fiscal system in Quebec that the government should tax capital gains.
At the present time, in Canada and in Quebec, the citizen who has invested his savings in personal property or real estate the value of which increases over a certain period of time, pays no tax on this capital gain when he sells them.
If the recommendation of the commission were accepted by the government, that tax would be imposed on this appraisal of capital. Under the present system, a gain realized on assets which are considered as an investment is regarded as capital and is therefore not taxable. But if a gain realized on assets comes from some business activity, it is regarded as income and is therefore taxable.
One of the disastrous effects of taxation on capital gain would occur at the time of death when the increase in value of the assets of the deceased, compared with its original cost,
October 11, 1967

would be subject to an additional estates tax. That is, in my opinion, a sure way, sooner or later, to liquidate our family businesses, thereby promoting the control of foreign capital over the business of our country.
It seems inconsistent to suggest such a tax, since Canada is not ready to pass that kind of legislation. It would be contrary to common sense to tax directly the people who are prepared to risk some capital in Canadian business while our country is still in the first stages of its economic development. I fail to see how we can attract capital by imposing a tax on capital gain.
I do not agree with the commission, which believes this tax to be equitable and necessary. In a democracy, all citizens are equal in the eyes of the law, and all have an equal chance to develop their talents. This does not mean that all are equally gifted, that knowledge and experience are not worth more than ignorance and lack of experience, nor that the judgement of any one person is better than that of the rest, or that all opinions are equally good. The possession of material wealth is like the possession of talent. It varies from one individual to the next, and in my opinion it would be unfair to penalize the richer man. Instead, we should try to redistribute wealth in the best interests of the whole population.
[DOT] (5:50 p.m.)
An almost wild territory could not ensure the development of its natural resources without large investments involving of course great risks. In this connection, I refer the house to the statistics which show that there are more business failures per capita in Canada than elsewhere.
It should not be overlooked that Canada must gather investment capital, especially in this century, and that such legislation could scare away the capital needed to develop our resources. It is beyond understanding that a country as greatly and urgently in need of capital as ours would accept a capital gains tax.
If we wish to stop the influx of Canadian or foreign capital, and to discontinue and suspend the fantastic development of our economy, we have only to levy a capital gains tax.
Canada is not ready yet to assume such a tax burden, as it still needs the massive influx of foreign capital to insure its development and to create new employment opportunities, of which Canadians are in urgent need.
The Budget-Mr. F. E. Leblanc
There is no doubt that the effect of a capital gains tax would be to restrict the free flow of capital and, especially, to reduce the amounts available to initiate or expand high risk developments. It would also discourage sound savings, keep away investments of capital so important for our development and prompt our own investors to transfer their assets to more friendly lands especially at a time where we are unfortunately experiencing a serious brain drain for the benefit of more attractive economic climates.
In other countries where the economy is sufficiently mature and productive to support that burden, such tax is in force and can be levied. The principles brought forward by the Carter commission might apply later on when the country has an adequate population and has reached adulthood with a parallel economic development.
It is true that the United States and Great Britain levy such a tax. In this connection, however, I should like to quote Mr. Henry C. Wallick, professor of economics at Yale University and former assistant to the American secretary to the treasury, who speaks about the harmful eflect of that tax as follows:

A capital gains tax affects the supply of saving much more severely than would a true income tax of identical yield...A capital gains tax not being a tax upon what can properly be considered income, is paid very largely out of savings, or out of capital which amounts to the same thing... the principal adverse effect... is that on saving. The tax absorbs a not insignificant part of the annual supply of saving. For an economy trying to maximize its rate of growth, almost any other method of raising revenue would have less counterproductive effects-

Do not forget that if we tax capital gains, capital losses will obviously have to be allowed as a deduction. What would be the net revenue from this tax, and is it really worthwhile? If the results of inflation are taken into account when assessing capital gains, I doubt that the actual capital gains would be as high as the Carter commission hopes. And how can we justly impose a tax on inflated values?
Let us not forget that the possibility of deducting a capital loss from other revenues is not as strong an incentive as the possibility of retaining an increase which all Canadians seek.
The government must not tax the favourable outcome of risk but, on the contrary, encourage risk investments and broaden the
3008	COMMONS
The Budget-Mr. F. E. Leblanc income tax legislation in that respect. There should be incentives for capital gains and not penalties. If we want to increase the Canadian capital, let us not tax it.
Mr. Speaker, among the incentives which are necessary to attract capital in risk companies, I suggest that the government should raise the exemption of 20 per cent on dividends paid by Canadian companies to 50 per cent; increase the tax exemptions for research expenses; increase tax deductions for companies engaged in developing natural resources, especially Canadian companies; allow companies to deduct from taxable income twice the expenses incurred by them for the training of their employees, at work or unemployed; allow the family head to deduct from his income the money devoted to his children's education; see to it that the Department of National Revenue withdraws completely from the field of estate taxes and on gift taxes; broaden the criteria to allow the creation of a greater number of designated areas; increase from $100 to $200, the statuto-
DEBATES	October 11. 1967
ry exemption for charitable donations and medical expenses, a suggestion I made as far back as 1964 in a notice of motion that was not discussed during that session; increase the corporations exemption from $35,000 to $60,000 before they are taxed at 50 per cent; decrease the corporations taxes according to the ratio between their exports and their volume of business, and I could suggest many other ways of stimulating Canadian industries and taxpayers. I will, of course, leave the choice of those incentives to the Minister of Finance who, with the help of technicians and experts, will no doubt study closely the suggestions made and find the most appropriate solution to serve the economy of the whole country.


Mr. Deputy Speaker:: It being six o'clock this house stands adjourned until two thirty o'clock tomorrow afternoon.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, October 12, 19G7