1967-02-13

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

Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I would like to table an exchange of letters between the Prime Minister of Quebec and the Prime Minister of Canada on federal provincial discussions on the working of our financial institutions and on securities legislation.


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


Some hon. Members:: Agreed.


TABLING OF REPORT OF COLUMBIA RIVER ENGINEERING BOARD
Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Mr. Speaker, I would like to table the annual report of the Columbia river treaty permanent engineering board.


Mr. Speaker:: Has the minister leave to table this document?


Some hon. Members:: Agreed.


JUDGES ACT
Hon. L. T. Pennell (for the Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to amend the proposed measure to amend the Judges Act, Bill C-267, now before the House by substituting the words "eighteen judges and junior judges of the county courts" for the words "seventeen judges and junior judges of the county courts" in lines seven and eight of page 5 of the said bill, under the heading "British Columbia".


[Stage Direction]
Motion agreed to.

Mr. Langlois (Meganiic): 1.	What was the total Canadian contribution to the external aid program for the year 1965?
2.	Under the external aid program (a) how many foreign students were studying in Canadian schools for the year 1965 and from what countries were they (b) in what different branches of study were these students registered and how many in each branch (c) what is the maximum amount allotted by the Canadian government for a student on a normal four year university course?
3.	How many foreign students graduated from Canadian universities under the external aid program since it has been in application, and (a) how many have remained in Canada (b) how many have definitely returned (c) how many have made application to stay or return to Canada under Canadian citizenship?
4.	How many foreign students are at present registered for university courses in Canada under the external aid program?
5.	Since this program has been in application, what is the average cost per student to the Canadian government?


Hon. Paul  Marlin@Secretary of Stale for External Affairs: 1. During the calendar year 1965, the Canadian Government made available:
Bilateral Grants Bilateral Loans Multilateral Grants and subscriptions Export Credits

2.	(a) In 1965, 931 students studied in Canada under the External Aid program, from the following countries. Africa: Cameroun, Central African Republic, Chad, Congo (Brazzaville), Congo (Leopoldville), Dahomey, Gambia, Ghana, Kenya, Lesotho, Malagasy, Malawi, Mali, Mauritius, Morocco, Nigeria, Rhodesia, Sierra Leone, Tanzania, Togo, Uganda. Caribbean: Barbados, British Honduras, Guyana, Jamaica, Leeward Islands, Trinidad, Windward Islands. Asia: Afghanistan, Brunei, Burma, Cambodia, Ceylon, Hong

February 13, 1967
Questions
Kong, India, Indonesia, Korea, Laos, Malaysia (Malaya, Sabah, and Sarawak), Nepal, Pakistan, Philippines, Singapore, Thailand, Viet Nam.
2.	(b) Students were in the following branches of study: Humanities, 43; Education, 107; Fine Arts, 18; Law, 2; Social Sciences, 63; Economics and related subjects, 49; Natural Sciences, 170; Engineering, 245; Medical Sciences, 143; Agriculture, 89; Other, 2.
2.	(c) There is no maximum amount allotted by the Canadian Government for a student on a four-year university course. The Government pays tuition fees and grants a living allowance to the students, a clothing allowance and a book and equipment allowance, all in accordance with rules laid down in the Technical and Educational Assistance Regulations.
3.	Since the External Aid program has been in operation, 515 foreign students have graduated from Canadian universities, (a) nine have remained in Canada; (b) 504 have returned to their homes; two have gone to the United States; (c) information not available except in respect of those mentioned in (a) above; under the Canadian Citizenship Act and Regulations, to be eligible to apply for Canadian citizenship, students have to become landed immigrants (as distinct from students) and then reside in Canada for five years.
4.	There are presently 1,475 foreign students registered for university courses in Canada under the External Aid program.
5.	The average cost to the Canadian Government for students brought to Canada since the inception of the program is $5,467.29 per annum.


KINGSTON PENITENTIARY-RECEPTION OF FRENCH BROADCASTS
Mr. Lachance: 1.	Is it true that the inmates in the Kingston penitentiary, of whom 30 per cent are French speaking, are not given the right, or the privilege, of listening to a French speaking channel over their radio system, in their cells?
2.	If so, does the government intend to correct this situation?
3.	Does the same situation exist in the other penitentiary institutions in Canada?


Lawrence T. Pennell: 1.	No. The Kingston penitentiary cellular radio system relays broadcasts on two nets with a two net receiver located in each cell. One of these nets relays French broadcasts

on the basis of two hours per day. The other net is used almost entirely for sports programming.
The radio system programming is governed by the wishes of the inmate population and reflects such wishes on a proportionate basis.
It should be noted that French radio broadcasting is not available in Kingston city, nor in the immediate geographical area. The reception of such broadcasting presents technical difficulties, since it originates from Cornwall, Hull or Montreal, and the quality of sound reception varies from time to time.
2.	Yes. Equipment and material have been requisitioned to provide a third net with a view to providing more extensive French radio reception.
3.	Yes. A similar situation exists at Dorchester penitentiary where French programs are broadcast on the basis of one hour per day, in accordance with the wishes of the inmate population, as expressed by the institutional inmates' recreation committee which includes French representation.


EXPO '67 PRIZE WINNING SONG
Mr. Coates: 1.	In what way does Expo '67 plan to promote the use of the prize-winning song for which $6,000 in prizes was awarded and why has this song not received the same degree of exposure as has been evidenced by the song produced by Bobby Gimby for the centennial commission?
2.	Was any consideration given to commissioning Bobby Gimby to produce a song for Expo '67 rather than promoting a contest with prize money available?


Mr. Jean-Charles Cantin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. The $6,000 in prize money was provided by the Sun Life Assurance Company of Canada and La Fondation des Amis de l'Art.
Under the contract entered into by the Le Festival du Disque Inc., the Sun Life Company of Canada and Expo '67, Le Festival du Disque Inc. agreed to promote the publication, reproduction and performance of the winning song in Canada and throughout the world so as to obtain the maximum practical distribution. This is being done through a direct mailing campaign to the U.S. and Canada song publishers and radio stations throughout the world.
In addition, the Expo song will be played by the Expo band and Sun Life carillon for
February 13, 1967

Questions
the duration of the exhibition. Recordings made by the Expo band will be distributed by Expo's p.r. department. Sheet music is being sent to all amateur choirs, throughout Canada, to be included in their repertoires.
In addition, the youth pavilion plans to promote the Expo song.
2.	No.


ADVERTISING COST IN &quot;HOLIDAY&quot; MAGAZINE
Mr. Coates: 1.	How much has been paid by either the centennial commission or Expo '67 or both, to Holiday magazine for the full-page ads which have appeared in that magazine promoting Canada's centennial and Expo '67 to date?
2.	Is any additional advertising anticipated in this magazine and, if so (a) how much (b) what is the estimated cost?


Jean-Charles Cantin: 1. Advertising on Expo appeared in Holiday magazine, starting in 1966 in the following issues: April, May, August and November which cost the Canadian Corporation for the 1967 World Exhibition $40,035.
Advertising placed by the Canadian government travel bureau in support of the centennial commission during 1966 cost $13,115.75.
2.	(a) Yes, advertising on Expo will be made in three more issues in 1967; March, April and May. (b) $44,100.
(a) Advertising will be placed by the Canadian government travel bureau in support of the centennial commission in the March issue in 1967. (b) $11,405.



YELLOWKNIFE, N.W.T.-COST OF SUPPLYING TELEVISION

['Mr. Speaker, the answer to the first question is yes. The answer to the first part of the second question is: To recover a plaque when Abbey House is demolished and relocate it in either Macdonald House or Canada House. For structural reasons it is impossible to remove the\nplaque until the supporting wall is being demolished. The answer to the second part of the second question is: Because original demolition plans have been postponed by some 18 months, the London office of the Canadian government is maintaining a watching brief.']
Hon. Judy V. LaMarsh (Secretary of Stale):: I am informed by the C.B.C. that the cost of the technical installation at Yellowknife and the recording facilities at Edmonton to supply the required program package is estimated at approximately $84,000. The estimated annual operating cost of the proposed station at Yellowknife is approximately $22,000 a year, based on an initial and experimental four-hour daily schedule.



Mr. Orlikow: 1.	Who is the chief of the secretariat of the administration directorate of the Department of Indian Affairs and Northern Development?
2.	How long has he held the position?
3.	What are his academic qualifications?
4.	What is his previous experience in working with Indians either in the department or elsewhere?
5.	What are his duties and responsibilities and to whom does he report?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: 1. Mr. Harold Grenville Sprott is the acting-chief of the secretariat. 2. Since June 27, 1966.
3.	Academic qualifications: (a) Queen's University, B. Comm.
4.	Since joining the branch, ten years ago, Mr. Sprott has held responsible positions in both headquarters and in the field. During that period his duties have required him to work closely with individual Indians and with band councils.
5.	His duties and responsibilities are:
"Under the director of administration to be
responsible for securing information and preparing replies to parliamentary questions, correspondence from members of parliament and others and inquiries of a general nature pertaining to the functions of more than one division; for discharging the branch responsibilities relating to the liquor provisions of the Indian Act, band council elections, band bylaws, and regulations pertaining to community order; to prepare instructions, reports and correspondence required on matters concerning band council procedure, law enforcement on reserves; Indian status and legal rights and other matters of a quasi-legal nature".
Mr. Sprott reports to the director of administration.


BROADCAST EXPENSES, QUEBEC PROVINCIAL ELECTION
Mr. Gregoire: What were the total expenses incurred by each political party during the Quebec election campaign of June 5, 1966, in connection with political broadcasts over private radio and T.V. stations, as reported to the Board of Broadcast Governors?


Julia Verlyn (Judy) LaMarsh: I am Informed by the Board of Broadcast

February 13, 1967
Questions
Governors as follows: Each political party is not required to inform the Board of Broadcast Governors about the amount of money they spent during the electoral campaign proceeding the Quebec provincial election of June 5, 1966, in connection with political broadcasts over private radio and T.V. stations.


RESIGNATIONS BY NATIONAL DEFENCE HEADQUARTERS OFFICERS
Mr. Forresiall: How many resignations have been submitted by serving officers of the Canadian forces while on duty at national defence headquarters, Ottawa, since January 1, 1965?


Hon. Paul Hellyer (Minister of National Defence):: There were 1,987 officers serving at national defence headquarters on 1 January, 1965. The number had decreased to 1,649 by 1 January, 1967. During the intervening period there was the normal posting of officers to and from NDHQ and it is estimated that approximately 3,000 officers served in NDHQ during the two years. During this same period, 264 officers at NDHQ submitted their resignations. Of these, 56 had a minimum of 25 years service and were eligible for voluntary retirement pension or annuity benefits. Most of the remaining 208 were in their last three years of service, a period where many officers negotiate for, and accept, civilian employment.


ADMINISTRATION DIRECTORATE CHIEF, INDIAN AFFAIRS
Mr. Orlikow: 1.	Who is the director of the administration directorate of the Department of Indian Affairs and Northern Development?
2.	How long has he held the position?
3.	What are his academic qualifications?
4.	What is his previous experience in working with Indians either in the department or elsewhere?
5.	What are his duties and responsibilities and to whom does he report?


Arthur Laing: 1. Mr. Jules D'Astous.
2.	Since June 9, 1964.
3.	Academic qualifications: (a) B.S.A.
4.	Mr. D'Astous held the position of regional supervisor of Indian agencies from 1951 to 1954; during that period his duties called for frequent contacts and meetings with individual Indians and band councils in the provinces of Quebec and New Brunswick.
While occupying the position of the chief of agencies division and of the chief of the

economic development division at headquarters between 1954 and 1964, Mr. D'Astous' duties involved meetings, discussions and field trips to Indian reserves and agencies.
5.	His duties and responsibilities are: "To have over-all responsibility and authority for providing a branch secretariat and information service; for the formulation of policy, related planning and the administration of Indian lands and band funds in accordance with the provisions of the Indian Act; for the compilation and maintenance of records and legal surveys with respect to Indian lands; settlement of estates; keeping of band membership lists; for carrying out transactions relating to the crown's obligations under treaties and maintaining a record with respect thereto; for the provision of office services, supplies and equipment and for paper work management, systems and forms control; for the editing and issue of all general instructions".
Mr. D'Astous reports to director of Indian affairs branch.


POLICY DIRECTORATE CHIEF, INDIAN AFFAIRS
Mr. Orlikow: 1.	Who is the director of the policy and planning directorate of the Department of Indian Affairs and Northern Development?
2.	How long has he held the position?
3.	What are his academic qualifications?
4.	What is his previous experience in working with Indians either in the department or elsewhere?
5.	What are his duties and responsibilities and to whom does he report?


Arthur Laing: 1. Mr. Cyril Irvin Fairholm is the acting director.
2.	Since June 27, 1966.
3.	Academic qualifications: (a) Queen's University, B.A., (b) Alberta Normal School, Edmonton, teacher's certificate.
4.	Since joining the branch, 17 years ago, Mr. Fairholm was in continuous touch with Indians in their homes on the reserves, attended meetings with individual Indians, chiefs, councillors and various representatives of the Indian people throughout Canada.
5.	His duties and responsibilities are: "Under the branch director, to have authority and responsibility for the formulation of broad policy and the related planning; to collaborate with the directors of development, education and administration in the establishment of long term goals and to co-ordinate the formulation of policies and the planning leading thereto; to supervise and direct research specialists in the task of gathering, coordinating and interpreting new or existing
February 13, 1967

Questions
data, including statistics, as a basis for recommending new activities and evaluating ones now in progress and recommending changes in emphasis or direction of programs; to review Indian legislation, recommending amendments required by policy changes and provide liaison with drafting officers".
Mr. Fairholm reports to the director of Indian affairs branch.


ARMED FORCES PERSONNEL
Mr. Harkness: 1.	How many persons were recruited for the Navy, Army and Air Force in each of the months of 1966?
2.	How many persons were released from the services in each of the months of 1966?
3.	What was the strength of the Armed Forces, by service, on December 31, 1966?
4.	How many persons were in the process of being released at that time, including those on terminal leave?
Hon.	Paul Hellyer	(Minister of	National
Defence)			
1.	Navy	Army	Air ForceJan.	162	225	230Feb.	215	526	261March	171	497	259Apr.	147	328	199May	143	127	226Jun.	143	318	163Jul.	145	392	159Aug.	170	164	295Sep.	199	432	498Oct. ) Nov.(	713	1626	1013Dec.	155	235	2862.	Navy	Army	Air ForceJan.	361	628	440Feb.	309	536	473Mar.	319	611	394Apr.	211	498	308May	247	343	325Jun.	232	483	400Jul.	313	785	428Aug.	270	407	512Sep.	288	603	519Oct. 1 Nov.(	491	1048	927Dec.	157	530	3963.	R.C.N.	18,055	C.A.(R.)	42,766	R.C.A.F.	44,136	Total	104,957	
4.
R.C.N.	504
C.A.(R.)	633
R.C.A.F.	596
Total	1733


INSTRUCTIONS TO ARMED FORCES RECRUITS
Mr. Harkness: Are recruits applying for admission to the armed services now told that they must join the armed forces, rather than the navy, army or air force?


Hon. Leo Cadieux (Associate Minister of National Defence):: No. In the initial application a potential recruit must designate the service of his choice. There is no method in effect whereby a recruit applying for admission to the Canadian armed forces can be enrolled in other than one of the three existing services.


PENSIONS OF RETIRED ARMED FORCES PERSONNEL
Mr. Irvine: 1.	How many former members of the Canadian permanent armed forces who have retired previous to 1950 are receiving retirement pensions?
2.	How many of the above mentioned who retired prior to 1940 are receiving retirement pensions?
3.	How many of the above mentioned who retired prior to 1930 are receiving retirement pensions?
4.	During this time, have their pensions been reassessed and increased and, if so (a) how many times (b) when (c) to what extent?
5.	When reviewing pensions for retired civil servants, is it the intention that a review of pensions for former members of the Canadian permanent armed forces might be considered?


Léo Alphonse Joseph Cadieux: 1. 1,708.
2.	204.
3.	48.
4.	(a) For those who were eligible, once, (b) on July 1, 1958, (PC 1958-1366 dated 2 October 1958). (c) The extent varied from 1 to 32 per cent for those pensioners whose pensions did not exceed $3,000 in the case of a former member, or $1,500 in the case of a widow of a former member.
5.	Yes.


LEASES FOR BUILDING ON CHAREST BOULEVARD, QUEBEC CITY
Mr. Ricard: 1.	Has the federal government signed any leases with the owner of the building located at 750

February 13, 1967
Questions
Charest blvd. east, in Quebec city and, if so, who is the owner of the building?
2.	If the answer to part 1 is yes, what buildings or parts thereof have been rented and what is the size of the premises in each case?
3.	What rents are paid?
4.	Did such leases follow a call for tenders?
5.	If so, what are the names of all tenderers and the amounts of the rents asked for?
6.	Since what dates have such leases been in force?
7.	When shall such leases expire?
8.	Is it the intention of the government to renew such leases?
9.	If so, will the government call for tenders?


Hon. G. J. Mcllraiih (Minisier of Public Works):: 1. Yes-Maurice Pollack Realty Company Limited.
2.	Whole of the fifth and part of the fourth floor of a five-storey building-comprising 38,658 net square feet of office space-located at 750 Charest Blvd., East, Quebec City.
3.	$90,000. per annum payable monthly.
4.	No.
5.	Not applicable.
6.	The present lease has been in force since February 1, 1964.
7.	January 31, 1969.
8.	No.
9.	Not applicable.


PAY RATES, ARMED FORCES MEDICAL AND DENTAL OFFICERS
Mr. Lamberi: 1.	With the introduction of the revised armed service pay scale effective October 1, 1966, what is (a) the basic (b) the total rate of pay and allowances of a dental officer during each of the first five years of service?
2.	What are the comparable rates of pay and allowances for a medical officer?
3.	What are the reasons for the differences, if any, taking into account the cost and extent of training and of respective responsibilities in the course of duty?
4.	Have protests been received or representations been made within the services with regard to any differences in the pay scale and, if so (a) what consideration has been given to such representations (b) with what result?


Léo Alphonse Joseph Cadieux: 1. The revised Canadian forces pay, effective 1 October 1966, for dental and medical officers is at consolidated rates. Dental officers allowances and medical

officer allowances were abolished on 1 October 1966. The rates for dental officers in the rank of captain during each of the first five years are: 1st year, $10,572; 2nd year, $10,980; 3rd year, $11,388; 4th year, $11,844; 5th year, $12,300.
2.	The comparable rates for medical officers in the rank of captain during each of the first five years are: 1st year, $8,328; 2nd year, $8,736; 3rd year, $9,144; 4th year, $12,504; 5th year, $13,080.
(Note: The majority of medical officers who stay in the Canadian forces are promoted to major after four years and receive an annual rate of $14,160).
3.	The salary scales for dental and medical officers in the civil service were taken into consideration when the above rates for dental officers and medical officers in the Canadian forces were established.
4.	Protests have been received from junior medical officers concerning rates of pay for the first three years of service. Consideration is presently being given to revising the rates paid during the first three years of service for medical officers.


SALES TAX ON JEWELLERY
Mr. MacRae: Is the government giving any consideration to abolishing the sales tax on jewellery?


Hon. Mitchell Sharp (Minister of Finance):: This question concerns budget policy. If the government proposes any change in the Excise Tax Act affecting jewellery, it will be announced at the appropriate time.


COMPANY OF YOUNG CANADIANS-ACTIVITIES IN ATLANTIC PROVINCES
Mr. Muir (Cape Breton: North and Victoria):
1.	In what areas and locations are members of the Company of Young Canadians engaged (a) in Nova Scotia (b) in New Brunswick (c) in Prince Edward Island (d) in Newfoundland?
2.	On what date, in each case, did they commence their work and to what specific projects have they been assigned in each area?
3.	What are the names, ages, addresses and qualifications of each of the members of the Company of Young Canadians chosen for assignments in the aforementioned provinces?


Lester Bowles Pearson: I am informed by the Company of Young Canadians as follows:
February 13. 1967	COMMONS	DEBATES Orders	12941 for Returns
1. and 2.			
Province	Project	Location	Start of project(a) Nova Scotia	Eskasoni Indian reserve	Eskasoni	June, 1966Three-Mile Five-Mile Plains	Windsor	August, 1966Nova Scotia project	Halifax	August, 1966Glace Bay project	Glace Bay	August, 1966Halifax Welfare council	Halifax	August, 1966(b) New Brunswick	Urban renewal	St. John	August, 1966(c) Prince Edward	Killarney road No active projects	Fredericton	October, 1966Island	(d) Newfoundland	Northern Peninsula	Brig Bay	August, 1966
Co-op development
3. The names of volunteers working on projects in the Atlantic area are Mr. Bill Poole, Miss Barbara Hall, Mrs. Joan Jones, Miss Carol Oliver, Mr. and Mrs. K. Pattison, Miss Susan McLean, Miss Patricia Ross, Mr. Darby Eddy, Mr. and Mrs. G. Fatels, Miss Sue McAd-am, Miss Sara Williamson, Mrs. K. Embleton and Mr. Ron McKay.
Specific information on individual volunteers is confidential, but their ages range from 18 to 30, the average age being 22. Nine have completed post secondary school education, three of these have graduated from university, one is a registered nurse, and one a trained teacher. The balance have completed at least junior matriculation.


* HISTORIC SITES-PRESERVATION OF PLAQUE FROM ABBEY HOUSE, LONDON
Mr. McNulty: 1.	Has the government any plan to preserve or re-locate the tablet commemorating the drawing-up of the terms of the British North America Act now situated in a conference room in Abbey House, London, England, which building is soon to be demolished?
2.	If so (a) what is the nature of the plan (b) what steps, if any, have been taken in this regard?


Arthur Laing: Mr. Speaker, the answer to the first question is yes. The answer to the first part of the second question is: To recover a plaque when Abbey House is demolished and relocate it in either Macdonald House or Canada House. For structural reasons it is impossible to remove the
plaque until the supporting wall is being demolished. The answer to the second part of the second question is: Because original demolition plans have been postponed by some 18 months, the London office of the Canadian government is maintaining a watching brief.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Racine: 1.	In the past six months has the Department of Defence Production called for tenders for the sale of jeeps in Quebec city and Sorel?
2.	If so (a) how many tenders were submitted (b) what was the amount of each tender (c) who was awarded the contract?
Return tabled.
OWNERSHIP OF ISLANDS, HALIFAX HARBOUR Question No. 2,418


Mr. Forresiall:: 1.	Who owns McNab Island, located at the entrance to Halifax Harbour?
2.	Who owns Lawlor Island, located adjacent to McNab Island?
3.	If not under total federal control and/or ownership, what individuals, firms or other interests have any control or ownership of the land on the two islands?
4.	If under any federal jurisdiction, which department or departments are concerned?
5.	To what present use are the two islands being put?
6.	What are the future plans for the two islands?
7.	When will such plans be put into motion?
Return tabled.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, before orders
February 13, 1967

Inquiries of the Ministry of the day are called I rise on a question of privilege. It is becoming more and more difficult all the time to obtain answers from the C.B.C. I cannot understand this. Parliament is entitled to have these questions answered. I very seldom place questions on the order paper, but I do want this information. Starred question No. 2,509 has been on the order paper now for 20 days. The question is:
1.	What are the names and addresses of the chosen officials and/or employees of the C.B.C. who are to be the recipients of and have free use of the coloured T.V. sets recently purchased by the C.B.C.?
2.	From what companies and/or individuals were such coloured T.V. sets purchased?
3.	Was such purchase preceded by a resolution passed by the C.B.C. and, if so, on what date was such resolution passed?
Questions that are starred are supposed to be answered. In the British parliament they are answered within three days. This is a flagrant disregard of questions by the C.B.C. Unless the answer is immediately forthcoming I will have more to say on this.



FINANCE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a number of questions to the Minister of Finance in connection with an order of the federal reserve board of the United States which permits United States government inspection of banks controlled by United States banks outside that country. In view of this, is it the intention of the government to reexamine the sale of shares of Canadian banks to United States banks? Has any reply been received to the protest, if any, Which has been made to the United States in respect of an order which extends the authority of the United States government beyond its territorial boundaries? I should also like to ask the minister whether he will table the terms of the Canadian objection and the United States reply so that Canadians may know, not second hand but directly, what is the attitude of the government of Canada in this connection.


Mitchell William Sharp: Mr. Speaker, may I reply to the first of these questions and then ask my colleague the Secretary of State for External Affairs to reply to the remainder.

It is not the intention of the government to ask for any further revisions to the Bank Act as a result of the regulation of the federal reserve board of the United States. I believe the proposals the government has put before parliament by way of amendments to the Bank Act are sufficient to ensure that no bank controlled in the United States can expand in Canada. That is the purpose of our law and I hope it will be confirmed by this parliament.


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, to supplement the reply by the Minister of Finance I should like to say that we have made representations to United States authorities concerning what we believe to be the extraterritorial implications of the proposed revision of the regulations-


John George Diefenbaker: On what date?


Mr. Martin (Essex East):: As of Friday, soon after they were brought to our attention. These representations were made in respect of the proposed revision of the regulations of the United States federal reserve board governing the foreign operations of United States controlled banks. Our ambassader was instructed to express the well known Canadian government view on the unacceptability of the principle that laws and regulations of one country should have extraterritorial effect in another.
It will be remembered that in March of last year this was the position taken by Canadian ministers at the United States-Canada ministerial meeting. This was the position I took in Washington in July in regard to other measures we felt had an extraterritorial effect. It is and has been the policy of the government of Canada to state that it cannot accept from the United States or any other country any regulation or law which has an extraterritorial effect in this country.


John George Diefenbaker: Mr. Speaker, I am glad that what was described as the heresy of the government I had the honour to head and which was condemned at the time, has become the cornerstone of this government's policy. Is it the intention of the government of Canada to make a declaration to those firms operating in Canada-I was going to say a unilateral declaration of independence-that they shall not follow guide lines except those issuing from the government or parliament of Canada?


Paul Joseph James Martin: Mr. Speaker, after the discussions that were held in March and
February 13, 1967

the position we took regarding the guide line policy of the United States, I should be surprised if the representations made by Canada on Friday do not receive equal consideration; namely, that the United States government will recognize that U.S. corporate enterprises in this country must conform to the laws of Canada and are not subject to the laws of the United States.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, I have a supplementary question for the Minister of Finance. In view of the fact that the new United States federal reserve board regulations come into effect today I should like to ask the minister two questions. First, does this mean that the Mercantile Bank will now be required to report directly to the U.S. federal reserve board, which fulfils much the same function as the central bank in Canada? Second, is it the intention of the Minister of Finance to allow the Mercantile Bank to report directly to the United States federal agency, thus violating Canadian sovereignty?


Mitchell William Sharp: There is really nothing I need add to what my colleague the Secretary of State for External Affairs has said, Mr. Speaker, namely that we will not permit the laws of the United States to apply in Canada because we would consider this a violation of our national sovereignty.


Thomas Clement (Tommy) Douglas: Do I take it from the minister's reply that he will make it clear to the Mercantile Bank that it must not report to the United States federal agency, and that any action of that kind would result in disciplinary action by the government of Canada?


Mitchell William Sharp: Mr. Speaker, I think we should go further and insist that the United States government does not require the Mercantile Bank or any other Canadian bank to report to the United States.
T Translation]


Mr. Real Caoueiie (Villeneuve):: Mr. Speaker, I should like to put a supplementary question to the hon. Minister of Finance and Receiver General. In view of this very logical Canadian policy aimed at having the Americans obey our Canadian legislation, have the United States authorities threatened the Minister of Finance or the government with restrictions on operations of Canadian banks in the United States?


Mitchell William Sharp: No, Mr. Speaker.

Inquiries of the Ministry EXTERNAL AFFAIRS



CONVERSATIONS BETWEEN PRIME MINISTER OF U.K. AND PREMIER OF RUSSIA

[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is to the right hon. Prime Minister. In view of the fact that the week long talks between the Prime Minister of Great Britain and Premier Kosygin of Russia ended last night, and reports that telephone conversations were also held with the President of the United States in the late hours of last night, I wonder whether the Prime Minister can tell us whether he had any communication today or yesterday from Prime Minister Wilson with regard to those talks.


Lester Bowles Pearson: Yes, Mr. Speaker, we have been in touch with the British government in regard to the very important conversations which my hon. friend has mentioned. We hope very shortly to get a fuller report on those conversations.



INDUSTRY


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker,
I wish to address a question to the Minister of Industry. Since he has acknowledged a letter from the city of Oshawa dated January 30 last, when does the minister expect to reply to their request, which was as follows:
We urge you and your government to consider immediately a study, either by a joint committee of the House of Commons and Senate or by a standing committee, of the implications of the auto pact agreement leading to a complete reconsideration of this pact.


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I hope to be able to furnish a reply to the city of Ottawa very shortly indeed.


Michael Starr: You had better address it to Oshawa.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Hon. J. W. Monteith (Perth):: Mr. Speaker, I would like to ask a question of the Minister of Finance. Is the centennial issue of $1 bills which bear no serial number but simply "1867-1967" in the spot on the bill where the
February 13, 1987

Inquiries of the Ministry serial number normally appears, in contra-	HEALTH AND WELFARE
vention of any international or national law Saskatchewan-request for increased concerning the issuance of paper currency?	assistance for hospital construction


Mr. Speaker:: Order, please. I would not think that question should be asked at the present time.


Jay Waldo Monteith: Mr. Speaker, the reason I asked my question in that form was that there are rumours that these bills will be produced only in a certain quantity, and there are also rumours that they will not be good as currency following 1967.


Mr. Speaker:: Order, please. I would rather allow the minister to answer the question.


Mitchell William Sharp: Mr. Speaker, I can assure the hon. gentleman that any bills issued by the Bank of Canada will always be legal tender.


Mr. Raymond Langlois (Megantic):: Mr. Speaker, a supplementary question. Not too long ago I put a question to the hon. Minister of Finance. Since he did not answer at the time, I shall repeat my question today.
Have the necessary measures been taken in order to keep a close watch on the printing of $1 bills bearing no serial number, in order to prevent any counterfeiting of these bills? Is there any control at the present time?


Mitchell William Sharp: Yes, Mr. Speaker.


David Réal Caouette: Mr. Speaker, the Minister of Finance has just stated that all bills and coins issued by the Bank of Canada will be legal tender.
Can the minister tell the house whether the figures created by the Bank of Canada are also legal figures?


Mr. Speaker:: Order, please.


Jay Waldo Monteith: I have a further supplementary question for the Minister of Finance related to the subject we were discussing earlier. Since these $1 centennial bills are reported to be selling at a premium as high as 100 per cent in certain quarters, could the minister assure the house and the people of Canada that there will be a sufficient supply to satisfy the demand?


Mitchell William Sharp: Mr. Speaker, I shall make inquiries from the Bank of Canada and answer later.
On the orders of the day:


Mr. E. Nasserden (Rosthern):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Has the government received representations from the government of the province of Saskatchewan regarding the need for increased assistance for hospital construction?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, I have received representations from almost all provincial governments, if not all, on the question of increased assistance for hospital construction.


Edward Nasserden: I have a supplementary question, Mr. Speaker. Can the minister tell us whether he has decided to provide an increase for hospital construction?


Allan Joseph MacEachen: Yes, Mr. Speaker, a decision was announced last year that the aid would continue for an additional two or three years.


Edward Nasserden: Mr. Speaker, that was not the question I put to the minister. I asked him whether any additional increase in assistance for hospital construction was contemplated by the government at this time.


Allan Joseph MacEachen: No, Mr. Speaker, it is not proposed either to increase or to extend, this particular program.


Edward Nasserden: I should like to direct a question to the Minister of National Health and Welfare. Is the minister aware of the fact that 3,000 people are awaiting admission to hospital in the city of Saskatoon?


Allan Joseph MacEachen: I thank my hon. friend for giving me this information.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I also have a question for the Minister of National Health and Welfare. I wish to thank him for the booklet and the application form for the guaranteed income

February 13, 1967

supplement to the old age security pension. Although I am not yet old enough to complete this form I would like the minister to tell the house for the guidance of our old age pensioners whether it will be necessary for pensioners to complete a form similar to this one each and every year, in view of the fact that the form I have before me only asks for a statement of income for the year 1966?


Allan Joseph MacEachen: Yes, Mr. Speaker, it will be necessary to do so.



TELEVISION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I have not given notice of this question to the Solicitor General, so he may not be able to give me an answer at this time. My question has to do with a program on C.T.V. called "W5" which had to do with marijuana and LSD and could not but have the effect of encouraging experimentation by young men and women across Canada. Has this program been brought to the attention of the law enforcement officers of the crown, and what action will be taken to prevent the flagrant exploitation and encouragement of crime in this manner?


Lawrence T. Pennell: Mr. Speaker, I have no personal knowledge of the program referred to by the right hon. gentleman, but I will discuss it with the officials of my department.



COLUMBIA RIVER-REPORT OF ENGINEERING BOARD

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address two questions to the Minister of Energy, Mines and Resources. First of all I wish to thank him for answering my out of order question last week by tabling the report about which I was inquiring, at that time.
My questions are as follows: Will members of the house receive copies of this engineering report on the Columbia river, and will this report be sent to the appropriate committee of the house for its study?
Inquiries of the Ministry
Hon. Jean-Luc Pepin (Minister of Energy,
Mines and Resources): Mr. Speaker, may I say with respect to the first question that tabling the report is one way of making it available to members of the house. If some hon. members would like a copy I will do my very best to provide them with one for their own personal use.
With respect to the second question, I think this matter should be brought to the attention of the chairman of that particular committee.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. In view of the fact that an application to appeal has been approved by the Supreme Court of Canada on a further conviction of a treaty Indian hunting migratory birds out of season in Canada, can the Prime Minister say whether the government is in a position as yet to do something about the conflict which exists between the Migratory Birds Convention Act and the treaties which the federal government has signed with the Indians of Canada?


Lester Bowles Pearson: Mr. Speaker, I believe when this question was answered the last time it was stated that we were considering the desirability or otherwise of taking up the matter of a revision of the treaty with the United States government. That consideration has not yet been completed, but as soon as it is I will be glad to announce it to the house.


Robert Simpson: Does the Prime Minister not consider that this centennial year is the appropriate and right time to get this matter straightened out once and for all?


Mr. Speaker:: Order, please.


HALIFAX-REQUEST FOR ASSISTANCE FOR SUMMER GAMES
[Stage Direction]
On the orders of the day:
J. Michael Forrestall: My question is for the Minister of National Health and Welfare. However, before putting it I should like to extend my congratulations both to him and to the Prime Minister for their presence in Quebec the other day when the temperature was 30 degrees below zero. They did
February 13, 1967

Inquiries of the Ministry very well. I should like to ask the Minister of National Health and Welfare whether he is in a position at present to shed light on the summer games for Halifax?


Mr. Speaker:: Order.


J. Michael Forrestall: The question is not asked in any sense of jest at all, Mr. Speaker. Time is running out on some of the preliminary work and more delays have been indicated. I wonder if the minister could reply.


Mr. Speaker:: I wonder if the hon. member would put a starred question on the order paper.


FRUIT-REQUEST FOR TARIFF ON IMPORTS FROM U.S.
[Stage Direction]
On the orders of the day:
Michael Starr: I wish to address a question to the Prime Minister. It is related to my question of January 30 having to do with the fruit growers of Ontario and the adverse effect upon them of large scale imports of processed fruit from the United States. Is the government considering the imposition of a tariff on fruit imported from the United States? I have not yet received an answer to this question.


Lester Bowles Pearson: The Minister of Finance is in a position to answer that question now.


Mitchell William Sharp: I should like to apologize to the hon. member for Ontario. I have had this answer with me on a number of occasions, but I thought perhaps he had lost interest in the matter. Personally I have not received representations of this kind, but I understand that my colleagues the Minister of Trade and Commerce and the Prime Minister have both received representations. Matters of this kind are considered during preparation of the budget, and these representations will receive very careful consideration.


Michael Starr: May I ask a supplementary question, then. Would the Minister of Finance consider it his duty to put into effect the promise of the Prime Minister made in this respect in Hamilton last fall?


Mr. Speaker:: Order, please. The question is argumentative.
[Mr. Forrestall.)


AIR CANADA
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Transport. In view of reports that the Air Canada base at Dorval is not now adequate for its maintenance and overhaul work and that its facilities will have to be expanded, could the minister remind Air Canada of the fact that its base at Winnipeg could handle both the Viscounts and the DC-9 aircraft?


Hon. J. W. Pickersgill (Minister of Transport):: I have no doubt Air Canada will take note of the hon. gentleman's representations.


VETERANS AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, the Minister of Finance said a moment ago that he thought perhaps the hon. member for Ontario had lost interest in a question. May I direct my question to the Minister of Veterans Affairs. Has he lost interest in the question I asked him the other day with regard to awards, and the trip to Vimy?


Hon. Roger Teillei (Minister of Veterans Affairs):: With regard to the first part of the question, it is true of course that the Victoria Cross and the D.S.O. have always been presented by the monarch. In the case of other awards this has not always been the practice. The conclusion has been arrived at that it would be impractical to attempt to do this during Her Majesty's visit this year.
With regard to the second part of the question concerning the trip to Vimy, the hon. member will recall that in 1936 a ship was engaged to carry some 8,000 veterans overseas. This boat was paid for by the veterans themselves and their dependants. This time there has been no attempt to do this, and I suspect it is because of the difficulty in making arrangements. The pilgrimage will be arranged in the traditional manner, with the Canadian government supplying an official delegation.
Perhaps, Mr. Speaker, you will permit me to use this occasion to invite every member of parliament who was present at Vimy and every member of the other place who was
February 13, 1967

present at Vimy to be part of the official delegation. If any member of this house or the other place was at Vimy I would be pleased if I could be advised.


John (Jack) McIntosh: The minister has asked if I remember what happened back in 1936, but I can assure him I was not interested in military affairs in 1936, 30 years ago. The number of survivors of Vimy who would wish to visit that place has been substantially reduced since then. I suggest that as a centennial project the government could do nothing better than offer these veterans a free trip to Vimy.


Mr. R. A. Webb (Haslings-Fronlenac):: have a supplementary question, Mr. Speaker. If the federal government will not assume this responsibility, I wonder if the minister would ask each provincial government to be responsible for sending its Dieppe veterans to the Vimy celebrations, just as the government of Newfoundland did for its celebrations last year.


Roger-Joseph Teillet: I am sure, Mr. Speaker, the provincial authorities will have noted the hon. gentleman's representations.


NATIONAL DEFENCE
[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: should like to direct a question to the Minister of Industry, Mr. Speaker. In view of the reported imminent sale to private developers of Vancouver north shore property presently owned but not now required by the Department of National Defence, will the minister give consideration to recommending that this and similar properties be first offered for sale to the municipality or the provincial government for public use?


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


CO-OPERATIVES INQUIRY AS TO POSSIBLE CHANGE IN TAX LAWS
[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: I have a question for the Prime Minister, Mr. Speaker. In view of a recent editorial in the Winnipeg Free Press, a newspaper known for its support of government views, and the kite flying speech delivered by the hon. member for
Inquiries of the Ministry Kootenay East, is the government contemplating any change in the tax laws applicable to co-operatives in Canada?


Lester Bowles Pearson: No, Mr. Speaker.


GOLD MINING ASSISTANCE
[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I have a question for the hon. Minister of Energy, Mines and Resources.
Did the minister recently enter into negotiations with the Quebec provincial authorities with regard to the assistance the various governments can give the development of gold mines in northwestern Quebec?


Mr. Speaker:: I wonder if that question, as put by the hon. member, is in order under the present circumstances. To my mind, it bears on a matter of general nature and I would suggest that the member put it on the order paper.


CANADA LABOUR CODE
[Stage Direction]
On the orders of the day:
Michael Starr: In the absence of the Minister of Labour I wish to address this question to his parliamentary secretary, who I know is at least one person in that government who has the interests of labour at heart. I should like to ask him if any decision has been made on applications for exclusion from the provisions of the labour code pertaining to hours of work.


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: I was rather suspicious of this backhanded compliment, so I did not quite grasp the question. However, the minister will be back tomorrow and I would prefer to have the minister answer the question.


Mr. David Orlikow (Winnipeg South):: supplementary question, Mr. Speaker. I wonder if the parliamentary secretary would ask the Minister of Labour to tell the house at a very early date when he intends to finalize his decisions in connection with the requests
February 13, 1967

Inquiries of the Ministry for deferments which have been made with respect to the hours provision in the Canada labour code. Until the minister does so the 18-month deferment which can be granted stands in abeyance, and this may go on for years.


Bryce Stuart Mackasey: Mr. Speaker, tremendous progress has been made in this particular field, contrary to any opposite impression the previous speaker may have given in his speech. I can assure him that the matter is under constant review and that the department is well aware of the necessity for bringing this particular legislation to a logical conclusion.


Mr. Donald Maclnnis (Cape Breton South):: A supplementary question, Mr. Speaker. I would ask the parliamentary secretary whether he is aware of the fact that applications for deferment have been made, that opposition to those applications has been presented, and that the department has not taken any action on the matter for months.


David Orlikow: should like to direct this question to the parliamentary secretary to the Minister of Labour. When the Minister of Labour replies to the question already asked about the implementation of the Canada Labour (Standards) Code would he also tell the house whether there are still outstanding applications for deferment from Canadian railway companies and, if so, how many workers are still not covered by the provisions of the act?


POST OFFICE DEPARTMENT
[Stage Direction]
On the orders of the day:
Mr. W. C. Scott (Victoria (OnD):: Mr. Speaker, my question is for the Postmaster General. In 1970 the Association of Kinsmen Clubs marks its golden anniversary, and I should like to ask the Postmaster General whether he would consider issuing a special postage stamp to mark this memorable occasion.


Mr. Speaker:: Order, please. I would think this question could easily be put on the order paper.


UNITED NATIONS
[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I should like to ask the minister of external affairs if he will support me in my submission to the Minister of National Defence that we provide for our peace keeping activities under the United Nations by the creation of a special force quite separate and apart from the armed fighting services of Canada, that we may thus retain the identity and the role of the navy, army and air force and at the same time assist the United Nations.


Paul Joseph James Martin: Mr. Speaker, I welcome the indication that my hon. friend has now become a convert to the concept of United Nations peace keeping. I have examined what the Minister of National Defence has said, and it seems to me that the policies he has devised are consistent with the excellent record that Canada has of perhaps greater efficiency in responding to United Nations peace keeping efforts than any other country.


Gordon Minto Churchill: Mr. Speaker, a supplementary question. I wonder whether I could convert the minister to giving a direct answer to a question. May I ask him, has he examined the proposition that I put forward with regard to this matter?


Paul Joseph James Martin: I will make a deal with my hon. friend. If he could be induced to put a direct question he would receive a direct reply. But I would say to him this-


Mr. Speaker:: Order, please.


Paul Joseph James Martin: -that the-


Some hon. Members:: Oh, oh.


Jay Waldo Monteith: You are not in opposition now.


Paul Joseph James Martin: Mr. Speaker, on a point of privilege-


Mr. Speaker:: Order. The minister is rising on a question of personal privilege.


Paul Joseph James Martin: Mr. Speaker, my personal privilege is this, and I am sure it is good advice for my hon. friend. When a question is asked for the purpose of embarrassing, one should never jump to one's own bait.
February 13. 1957	COMMONS


CANADA COUNCIL
[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: Mr. Speaker, my question is for the Secretary of State, but inasmuch as the hon. lady is not here this afternoon I wonder whether her parliamentary secretary would take it as notice. Would she inform the house whether the Canada Council supplied a grant for the recent psychedelic week end at the University of Toronto?


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


FINANCE
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would ask the Minister of Finance whether there have been any discussions with the Republic of France in connection with the Rueff plan for doubling the price of gold. Has this question been discussed and has consideration been given to an increase in the price, without which, according to Maurice Schumann of the foreign affairs committee of the French national assembly, the European market application of Britain would not be accepted?


Mitchell William Sharp: Mr. Speaker, I have not had any discussions with the French government about this particular plan. When Mr. Debre was here in Canada some weeks ago we talked about this, as well as a number of other matters, because of his great interest in the subject.


John George Diefenbaker: Is consideration being given by Canada to the acceptance of any plan that would increase the price of gold in order to meet the subject of the discussions between the minister and the representative of France?


Mitchell William Sharp: No, Mr. Speaker.


GOLD MINING ASSISTANCE
[Stage Direction]
On the orders of the day:
Mr. Speaker:: On reflection I have reached the conclusion that the question asked a moment ago by the hon. member for Villeneuve
Inquiries of the Ministry is of the same nature as the one asked by the Leader of the Opposition, and if he still wants to ask his question I will certainly allow him to do so now.


David Réal Caouette: Thank you, Mr. Speaker.
I am pleased to put my question again to the Minister of Energy, Mines and Resources. Did he have any discussions recently with Quebec provincial authorities with a view to increasing the subsidies to gold mines so as to promote the gold mining industry in northwestern Quebec? Did the minister get in touch with provincial authorities in that connection?


Jean-Luc Pepin: Mr. Speaker, the decision to increase or merely to maintain the gold mining subsidies concerns solely the federal government.
Now this problem involves a social factor of interest to the province of Quebec and several times I have reminded the provincial authorities of the role they could play in the retraining of the miners presently employed in the production of gold.
In somewhat similar circumstances involving the textile industry, the Quebec Minister of Labour suggested to the hon. member for Drummond that he should write his federal member of parliament. May I now suggest to the hon. member for Villeneuve that he should write his member of the provincial legislature?


David Réal Caouette: Mr. Speaker, I wish to direct a question to the Minister of Finance and Receiver General.
A little earlier, in reply to a question from the Leader of the Opposition, he said that there is no question of increasing the price of gold. I think the minister will agree with me that increasing the price of gold would stimulate the mining industry throughout Canada.


Mr. Speaker:: Would the hon. member ask his question?


David Réal Caouette: Yes, Mr. Speaker, with pleasure. Does the minister feel that increasing gold production in Canada would help us to improve our present balance of payments with the United States?
129S0
February 13, 1967
Inquiries of the Ministry


Mr. Speaker:: Order. The hon. member asking for ithe minister's opinion and such question is out of order.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, my question is for the Minister of Industry. May I ask him if he or his colleague the Minister of National Health and Welfare has received a communication from the city of Sydney steel committee to the effect that another 100 workers have been laid off by DOSCO at the steel plant, and that now some 30 per cent of the employees have been adversely affected? Has the minister any program to deal with this situation, or has he been able to give any reply to this committee regarding this very unfortunate situation?


Charles Mills (Bud) Drury: do not know about my colleague the Minister of National Health and Welfare, but I have no knowledge at the moment of any such communication. I will be glad to have a search made.


Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, my question is directed to the Minister of Industry. In view of the fact that the minister has been informed by the hon. member for Burnaby-Coquitlam that an additional 100 people at the Sydney steel plant have been laid off, may I ask the minister what steps he or the government plans to take to alleviate this very serious situation, which now brings the total number who have been laid off to around 1,100?


Charles Mills (Bud) Drury: Mr. Speaker, I think the hon. gentleman will recognize that the government is concerned about this problem of continuing job opportunities in the Cape Breton area. He will recall the recent announcement of the intention of the government to establish through legislation a corporation, the specific task of which would be to endeavour to find new job opportunities in Cape Breton to replace those that seem to be in the course of disappearing.


Robert Muir: A supplementary question, Mr. Speaker. May I ask the hon. gentleman how soon this legislation will be brought before the house?
[Mr. Caouette.l


Charles Mills (Bud) Drury: Mr. Speaker, we are working intensively to try to get the corporation organized and set up as quickly as possible. I am glad to see that, as the recent announcement by the British American Oil Company shows, work in the right direction is continuing in spite of the absence of a corporation.


Malcolm MacInnis: Mr. Speaker, I have a supplementary question for the Prime Minister. In view of the answer just given by the Minister of Industry with respect to the crown company's intention to take care of the lay-offs at the Sydney steel plant, will the ministers get together with the Prime Minister so as to ascertain just what is the intention of this crown company, since the other day the Prime Minister denied that there would be any take-overs of the steel plant but that the intention of the crown company was to deal with the closing of the mines.


Lester Bowles Pearson: The corporation was not set up for the purpose of taking over the steel aspect of the industry. We intend to do everything we can through the corporation and in other ways, as my hon. friend has just said, to improve job opportunities; and I am sure the hon. member shares the satisfaction of the government with the steps already taken at Port Hawkesbury by private initiative, assisted by the two governments, to improve job opportunities at once in that area.


Thomas Clement (Tommy) Douglas: In view of the fact that the legislation has not yet been introduced and the crown corporation has not yet been established, would the government give consideration to including the steel industry, in view of the fact that the steel industry appears to be next on the list for a phasing out program? Would it not be better to anticipate events rather than deal with the steel situation a year or two from now?


Lester Bowles Pearson: Without accepting all the statements made by the hon. gentleman, may I say this. He will realize the implications of the government taking over, through a crown corporation, all those industries in this country which appear to him, or to the government, or to parliament, to be in the process of disappearance.


Michael Starr: We do not want another box factory in Saskatchewan.

is a
February 13, 196'.


Thomas Clement (Tommy) Douglas: It is not a matter which concerns a number of industries. DOSCO operates both a coal and a steel industry. Instead of taking over part of the DOSCO operation would the government not consider taking over the entire operation, which would include both coal and steel?


Lester Bowles Pearson: In this particular plan we are
taking over only the Dominion Coal Company of the DOSCO operation.


Malcolm MacInnis: The
Prime Minister has put his finger on the difference between the statement he has made and the statement the Minister of Industry made a moment ago. When and how will members opposite make up their minds with regard to their intentions for this industry? Is assistance to be directed toward solving the coal problem only, or will both steel and coal be covered?


Mr. Speaker:: Order. I have to rule that the question asked by the hon. member is argumentative. He asks when and how the Prime Minister and members of the government would get together on something or other. The hon. member knows that the purpose of questions at this time is to extract information.


Malcolm MacInnis: I have another question. It is a supplementary question and is similar to a question asked by an hon. member on the back benches last week and allowed by Your Honour. He asked for clarification of a statement. I would ask the Prime Minister to clarify his statement as to the aims of this crown company. Is it intended to alleviate the position of the coal miners or will it improve the prospects in both coal and steel, as implied by the Minister of Industry?


Mr. Speaker:: It seems to me that this very question was answered by the Prime Minister some moments ago.


Malcolm MacInnis: I have a question for the Prime Minister arising out of a recent remark he made. What federal assistance was given to B.A. for the establishment of a refinery at Port Hawkesbury?


Lester Bowles Pearson: A great deal of assistance. It would take too long to go into all the details now, but I would be glad to send them to the hon. member.


Malcolm MacInnis: This year?
Inquiries of the Ministry BANKRUPTCY


WINNIPEG-FAILURE OF LIVESTOCK COMMISSION HOUSE
[Stage Direction]
On the orders of the day:
Mr. Ed. Schreyer (Springfield):: Since the Minister of Agriculture has just left his place I would ask his parliamentary secretary to take this question as notice. What course of action is the department taking with regard to the bankruptcy about a year ago of a federally licensed livestock commission house in the Winnipeg-St. Boniface stockyards involving allegations of default on the part of the bonding company and allegations of interdepartmental dispute between the Department of Agriculture and the Department of Justice?


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


REPRESENTATION ON UN COMMISSION-PERSONNEL OF CANADIAN ROYAL COMMISSION
[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: My question is directed to the Prime Minister. Is the Canadian government officially represented at the 20th session of the United Nations commission on the status of women which opened in New York today?


Lester Bowles Pearson: Yes, the government is officially represented.


Winona Grace MacInnis: May
we know who are the representatives?


Lester Bowles Pearson: Miss MacPherson, a member of the Department of External Affairs.


John George Diefenbaker: May I ask whether Donald
Gordon, Jr., if I may use that expression, has been appointed as one member of the royal commission on the status of women?


Lester Bowles Pearson: I indicated at the end of last week that I hoped to be in a position to announce the appointments to that commission today. I am sorry I am not able to do that because there has been a delay in releasing one or two members of the commission from their present activities. I hope to be able to make the announcement tomorrow or the next day. Any speculation before the announcement has been made here would be entirely speculative.
February 13, 1967

Inquiries of the Ministry


John George Diefenbaker: I do not want anything speculative, but I am wondering whether Mr. Gordon has been released by the C.B.C. so that we will get more objective reporting.


VETERANS AFFAIRS
[Stage Direction]
On the orders of the day:
Roderick Arthur Ennis Webb: have a question for the Minister of Veterans Affairs. Inasmuch as today we received a copy of the application form for a guaranteed income supplement to the old age pension, and inasmuch as insurance benefits or moneys received from the sale of possessions or investments are excluded from the financial statement which is requested, will the minister bring these qualifications to the attention of his department when pensions are being awarded?


Roger-Joseph Teillet: The only answer I can give the hon. member at this moment is that the department keeps closely in touch with developments in this area, and our veterans are being informed accordingly.


OLD AGE SECURITY
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, my question relates to two departments. May I therefore direct it to the Prime Minister. In view of the statement made by the Minister of National Health and Welfare, now confirmed by the explanatory booklet on the old age pension supplement which is out today, to the effect that receipt of war veterans allowance does not stand in the way of the supplementary pension benefit, and in view of the fact that a letter from the war veterans allowance board tells war veterans who receive allowances that they cannot receive both these payments, will some action be taken to clarify this situation, particularly for recipients of war veterans allowances?


Lester Bowles Pearson: Yes, I will discuss it with the two ministers concerned.




[Stage Direction]
On the orders of the day:
Robert Norman Thompson: I have a question for the Prime Minister. Has the right hon. gentleman any announcement to make with regard to the bombing of the Yugoslav diplomatic and consular offices? If not, when does he expect to be in a position to make such an announcement?


Lester Bowles Pearson: made some inquiries about this the other day. The investigations are not completed. They are being pressed. I hope that before long there will be a report, but the inquiries are international in their scope and require consultation with other governments and with the international police bureau, and I am informed it will take a little time before they are complete.


Thomas Clement (Tommy) Douglas: Has the Prime Minister had an opportunity to look into the question I asked him in this connection, whether the federal government has any responsibility for damage done to property adjacent to the embassies and consulates in question, and whether any compensation will be paid?


Lester Bowles Pearson: Mr. Speaker, I am advised by the legal officers, to whom this matter was referred and who studied it, that the position of the persons involved is similar to that of any private person who suffers loss or injury as the result of criminal acts by others known or unknown, and in general the law makes no provision for compensation in circumstances such as these. There can be little doubt that many persons have suffered loss in criminal actions for which no compensation has been paid or is payable. Therefore, Mr. Speaker, I am informed the government has no legal obligation in this matter.


Edward Richard Schreyer: A supplementary question, Mr. Speaker. Is the government giving consideration to the desirability of making ex gratia payments to these people?


Lester Bowles Pearson: This matter is still under consideration, Mr. Speaker.
February 13, 1967	COMMONS


CANADIAN CENTENNIAL. REQUEST FOR REPEAT TOUR OF CONFEDERATION TRAIN
[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I should like to address a question to the Secretary of State. In view of the tremendous public interest in the confederation train and the fact that many persons will not have the opportunity to visit this super excellent centennial project, has consideration been given to a repeat tour by this train next year?


Mr. Speaker:: Order, please.


HISTORIC SITES AND MONUMENTS
[Stage Direction]
On the orders of the day:
Winona Grace MacInnis: Mr. Speaker, I wish to direct a question to the Minister of Indian Affairs and Northern Development. On January 27, as recorded at page 12331 of Hansard, the hon. member for Cape Breton North and Victoria asked a question based on charges that one Jeremy Akerman was discharged from a senior position at the fortress of Louisbourg restoration project as a result of political activity on behalf of the New Democratic Party. The hon. member asked if the minister would institute an investigation into this very serious charge and make a report to the house. The minister was not present that day, and the Minister of National Revenue and President of the Treasury Board replied that he would like to take the question as notice on behalf of the minister, adding that he was sure the minister would look into the matter. I would now like to ask the minister whether he has made an investigation and, if so, what are his findings?


Arthur Laing: Mr. Speaker, I anticipate giving an answer in the house on this particular case within the next two or three days.


THE BUDGET
[Stage Direction]
The house resumed, from Friday, February 10, consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
The Budget-Mr. J. H. Horner
Mr. J. H. Horner (Acadia):: Mr. Speaker, I would like to participate in this debate which centres around a budget which many hon. members have said had no real purposes and was really unnecessary because the money to be raised by the $300 million tax increase imposed upon the citizens of Canada purportedly to pay the increase in pensions to senior citizens, establishing what has become known as the basic wage for senior citizens, was already available in the old age security fund and will still be in that fund when the pension increase takes effect on March 1. It was really shameful for the Minister of Finance (Mr. Sharp) to make the senior citizens of Canada the goat for this tax increase. It is something which was resented and will be resented in the years ahead by our senior citizens.
The financial year 1966-67 will go down in history as a very interesting one. Canadians will remember two things in particular about it. It will long be remembered as a year in which the country had a great deal of labour difficulty and a great many strikes. It will also long be remembered as a year in which Canadians saw their country suffer many financial difficulties. These two major difficulties, labour strife and financial strife, are the direct responsibility of the government because of the actions it took.
We are debating a budget which increases taxes and the cost of living and is a backward attempt to put the brakes on inflation. Some of the most interesting comments on the budget were made in a C.B.C. "Viewpoint" telecast by a Montreal Star newspaper reporter. He said that as a result of the budget 2,300,000 Canadians will pay higher income taxes. He added:
A married couple just getting going on less than $100 a week will pay more on income.
A man struggling to keep a wife and four children on $120 will pay more on his income.
And every Canadian will pay more in sales taxes. Nobody escapes.
He wound up by saying:
If this is a mini-budget, heaven deliver us from a maxi-budget.
In essence the budget was too severe. It was unnecessary and it was shameful of the minister to blame our senior citizens for the tax increase. To analyse the budget fully one must go back to 1963 when the government took office. Even though the Liberal party was a minority in the house it formed the government and its immediate aim was to call another election and get a majority. How was
12954	COMMONS
The Budget-Mr. J. H. Horner this to be accomplished. Members of the government had to create the impression of a boom in Canada. Most economists agree that our economy started to boom back in 1961. However, the boom was not increasing fast enough for members of the government and so they decided to create an excessive boom.
The government immediately set to work to double the money supply. The total money supply in Canada today has increased very nearly 50 per cent over what it was in 1963. In fact I have a letter from a minister in which he states quite frankly that the government made a deliberate decision to increase the money supply. Such an increase in the money supply could only result in inflation, and there is no need for me to repeat the story of that inflation. Citizen's groups all across Canada have been writing to members of parliament complaining about inflation and 1966 will long be remembered for the tremendous increase. In actual fact the inflation was ignited by the too rapid increase in money supply as a result of the deliberate decision of the government, and it has been perpetuated by the government's action in granting huge wage increases to a number of labour unions without any regard for the effects these wage increases would have on the unions themselves and on all citizens. One might wonder how they could do so many things and not really affect the economy of the country.
[DOT] (3:40 p.m.)
I think this is one reason we became involved in a great many financial difficulties in 1966. One financial house closed down and others barely stayed alive as the result of huge loans by the government. One need only take a look at the Central Mortgage and Housing Corporation report for 1965 in which the following statement appears:
Under section 11 of the National Housing Act, holders of N.H.A. mortgages may be provided with a source of short-term credit if required. Ten loans were made under this provision of the act in 1965, representing the first activity under this particular section of the housing legislation.
In other words, this is the first time the government has lent money to financial houses. They did so because they feared the collapse of a whole series of financial houses after the failure of Atlantic Acceptance Corporation. They bailed out some of these companies by making loans available. The report states further:
The loans were approved late in the year as a result of the difficult conditions in the mortgage market which prevailed at the time. The loans amounted to $29.9 million on which the balance owing at year-end was $24.4 million.

DEBATES	February 13, 1967
It became very difficult to ascertain the names of the ten companies. The government was very sensitive about this point. One can hardly blame them, because if the information became public knowledge perhaps more finance companies would be in difficulty since no doubt money would be withdrawn and they surely would collapse.
Why did the finance companies find themselves in danger? Because of the oversupply of money which caused inflation. Then there was a severe clamping down on the money circulating throughout the economy resulting in a tight-money situation. To a large extent this is what caused the financial houses to be in difficulty. In some cases, mind you, there were other things which had a greater effect, but this is the reason ten houses in particular were in difficulty. First of all, there was the government's announcement that the bank interest rate would be increased. Perhaps they thought this would be a curb on inflation. In these days when there is so much money being borrowed by everyone action of this type tends to create more inflation because the people who borrow money continue to borrow even at the higher rates and the result is that the goods produced cost more.
We find Canada getting into a great deal of difficulty in respect of banking. We saw the Mercantile Bank get into difficulty because all of a sudden the government decided it must place restrictions on a foreign-owned bank. Many people forget the fact that the Mercantile Bank was completely foreign-owned when First National City Bank of New York bought it. It was owned by Dutch interests. When the Dutch concern applied for a charter in 1949 we had a Liberal government. The government did not tell them that if they did receive a charter they must allow Canadians to participate in their company. Rather than say that the government simply hoped that this bank would remain small and not become too much of an influence.
I would be the first to say that we should have absolute control over our banking system. The error was made in 1949 when the Mercantile Bank was first given its charter. It never said it was going to become Canadian. It asked for and was granted a Canadian charter. When the original owners of the Mercantile Bank decided to pull out the government should have said "All right, set your price and we will buy you out; we will put the bank in trust and sell it to Canadians". After all, this is the party which has been advocating the setting up of the Canada
February 13, 19G7	COMMONS
Development Corporation. How better could a development corporation start than by having a bank charter? This is one of the positive steps the government could have taken which would have bailed it out of a lot of trouble. But no. After a series of manipulations and meetings at which notes were made on pieces of paper by individuals the government said, "We hope you will not buy". They should have been firm at that time. If the hon. member for Davenport (Mr. Gordon), the minister of finance at that time, really thought that Canadian banks should belong to Canadians he should have said to the owners of Mercantile, "If you do sell we want the privilege of meeting the price and buying the bank". This is what should have been done. It was not done.
Finally, after the bank is sold to the First National City Bank retroactive legislation is brought in to curb it. In other words, as soon as the bank, which was in Dutch hands, is sold to a United States concern the government steps in and limits the expansion of the bank in Canada. Retroactive discrimination is the only term which can be applied to this legislation. The government is not yet out of the mess.
Last week there was some concern over the newly granted charter of the Bank of Western Canada. Mr. Coyne came marching down to Ottawa to tell the finance committee and the house what the trouble was all about. It was all nonsense. When Mr. Coyne brought the matter before the committee on finance, trade and economic affairs he knew the facts and he knew exactly what would happen. But for some reason or other Mr. Coyne believed that Mr. Stevens wanted to get rid of him and he said, "No, you are not firing me, or if you do I will cause you trouble". Apparently Mr. Coyne is good at causing trouble when someone wants to fire him.
I think the interesting thing to note is that the government knew Mr. Stevens' finance companies were in difficulty at the time they granted the charter to the Bank of Western Canada. The government knew this. I defy the Minister of Finance to stand up in the house and say that none of the companies owned by Mr. Stevens' syndicate is among the ten companies mentioned in the Central Mortgage and Housing Corporation report that the government bailed out. Some of them definitely are. I think I can safely say two were or perhaps five. The government knew. That is the point which is most interesting.
The Budget-Mr. J. H. Horner The government knew that some of the companies in the B.I.F. group were in financial difficulty. Yet they granted the charter. It was logical to expect that the charter would bail out those few companies. It is interesting to note this article concerning Mr. Coyne in the Winnipeg Tribune of Thursday, April 28, 1966. The article is headed "Coyne Gets Keel-hauled" and reads in part as follows:
James E. Coyne, former governor of the Bank of Canada, encountered some sharp criticism of his investing judgment on Wednesday.
That has to do with one of the questions which was involved when the charter of the Bank of Western Canada was being obtained. The article continues:
Mr. Coyne confirmed that $1.5 million of N.H.A. mortgages had been purchased from Fort Garry Trust and $1 million from York Trust and Savings Corp. of Toronto. He said that it had been hoped that C.F.I. would be able to sell these notes on the general market but this proved impossible and C.F.I. was bearing a carrying loss on them.
[DOT] (3:50 p.m.)
I do not want to bore the house by reading all of this rather lengthy article, but toward the end the following is stated under the heading "They're Demand Notes":
He was asked if the N.H.A. mortgages were in the form of demand notes. Yes, they were. And if they were demanded "we may sustain a loss", Mr. Coyne said.
Mr. Coyne said: "I don't think there will be any trouble getting the money" if the Bank of Western Canada suddenly received its charter. "We have the ability to raise the funds when the time comes."
That is what Mr. Coyne had to say about the difficulty of raising money in relation to these financial houses owned or controlled by himself or Mr. Stevens. This is absolutely contrary to the pledge made to the governement that money would not be borrowed from the Bank of Western Canada. The government knew of this intention, and that is as obvious now as it was during meetings of the committee. This group should never have been granted a charter.
This group was associated with about 14 eastern investment houses, most of which were then experiencing difficulty. The group wanted a charter and applied for one because with a charter it is relatively easy for these people to increase their funds by 20 times. Mr. Coyne and Mr. Stevens both admitted that to the committee as did the Inspector General of Banks. That is why Mr. Coyne said there would be no difficulty in handling C.M.H.C. loans as far as the Bank of Western Canada was concerned. He said they had the ability to raise the funds when the time came.
February 13, 1967

The Budget-Mr. J. H. Horner The government knew exactly what it was doing when it granted this charter. It is no wonder the government has found itself in difficulty in handling banking affairs, having regard to the Mercantile Bank and the Bank of Western Canada. One might well ask why I as a westerner should oppose this.


Mitchell William Sharp: Would the hon. member permit a question? Let me point out that the Bank of Western Canada was granted a charter by parliament, not by the government.


John (Jack) Henry Horner: Never before have I seen such an obvious attempt by a minister of finance to evade or weasel out of a responsibility that was his all along. No wonder we fought the passage of the transportation bill two weeks ago because it included a study of the Crowsnest Pass rates. We did not want the Minister of Transport (Mr. Pickersgill) to be in a position to stand up in the house and evade his responsibility by saying that parliament had passed that measure. The Minister of Finance knows very well that he and he alone must accept responsibility for granting that charter, even though in the narrow sense parliament approved it. The Minister of Transport knew exactly what he was doing at that time.


Mitchell William Sharp: May I ask the hon. gentleman a question?


John (Jack) Henry Horner: I have the floor, Mr. Speaker.


Mitchell William Sharp: Mr. Speaker, the government did not sponsor that bill; it was sponsored by a private member.


John (Jack) Henry Horner: I have the floor. The minister can make a detailed explanation in respect of his action regarding that charter when I am finished.
We in this house all know how these charters come about and how private members' bills are sponsored in the house. The minister can sit there and say that the government had nothing to do with it, but we all know what the situation was. One can look up the facts and find that on July 4 of last year the charter was granted to the Bank of Western Canada. During the last month when the bill was being debated the government moved it to the top of the order paper day after day. The minister may well say he knows nothing about that, but that was done time after time with the consent of the government because it wanted to see this group given a charter. I can only guess why, but it certainly was not


intended to improve the position of western Canada.
During the committee meetings I asked Mr. Coyne why he wanted a charter for the Bank of Western Canada and he pointed out that he wanted to help that area. I asked him what particular industries he was interested in helping in a financial way and he said he had not studied the matter to that extent.
At the same time I asked Mr. Coyne if that area of Canada could be considered a surplus depository area and he answered in the affirmative. I found it difficult to believe that until he presented the facts. I then asked the Inspector General of Banks whether or not he would agree that western Canada was an area one could call a surplus depository area, and he said yes.
Under these circumstances what do we end up with in western Canada? I suggest we have a new bank operating in a surplus depository area in order to assist some 14 financial investment houses operating in Ontatio, with 53 per cent of the shares held by three men living in Toronto. Most of these financial houses were in difficulty at that time, and the minister, whether he likes to or not, must accept full responsibility for granting this charter. He can sit there and say that parliament granted the charter but he knew then as he does now the ten companies associated with the B. I. F. group.
Mr. Coyne was completely aware of the situation as indicated by the article which appeared in the Winnipeg Tribune on April 28. There is no doubt in my mind that the government also knew of the situation and, having known, it should have stepped in to prevent this group from getting a charter. The government should have refused to issue the charter even after parliament passed the private member's bill. Perhaps the government felt it owed Mr. Coyne a special favour. I can only surmise what the factors were, which is a dangerous thing to do without knowing the facts. One must do the best one can without the facts. I tried to find out the names of the ten companies involved in the B. I. F. group but I could only find out two.
It is my felling that the trouble in which Canada now finds itself in respect of financing has resulted from poor management on the part of the Liberal government. This government has handled the financial affairs of the country very badly. We all realize that our money supply must be increased, but the government increased the supply too rapidly and then followed that rapid increase with a too severe and lengthy tight-money period.
February 13, 1967	COMMONS
The government must accept responsibility for the difficult financial circumstances which now exist because of its attitude toward labour problems. It has set a precedent by allowing a 33 per cent wage increase to certain workers, as a result of which other labour unions are attempting to obtain similar increases. It is all well and good for the government to suggest that Canadians should invest more in Canada, but how can they expect Canadians to invest more when their confidence has been so badly shaken in the past year? One would have to use a pretty big stick to make Canadians invest in Canadian investment companies because of the government's mishandling of our financial difficulties. The government must bear the burden of its mismanagement in this our centennial year. For the sake of Canada and Canadians I hope the government will do a better job of dealing with labour problems, inflation and financial institutions in 1967, than it did in 1966.
[DOT] (4:00 p.m.)


David Réal Caouette: Mr. Speaker, I would not want to miss this opportunity to say a few words about the minibudget brought down in the house by the Minister of Finance and Receiver General (Mr. Sharp). It is probably the first one in our history to impose new taxes on the people to get money for the old age security fund.
Before examining closely all the statements made by the Minister of Finance and Receiver General, I would like first to set out clearly the four basic principles which guide us, the Creditistes of Canada. I see that the minister is in his seat. He is an intelligent man, since he presides over Canada's financial future and I feel that he will easily understand the four basic principles which guide us, the Creditistes in our country, Canada.
Here are those four principles. First:

Social Credit firmly believes that the individual is the most important factor in organized society. Because he is a divinely created being with spiritual, mental and physical needs and potentialities, he has inalienable rights which must be respected and preserved. Because of this belief Social Credit is inalterably opposed to communism, fascism and all forms of totalitarian government which make the individual citizen subservient to the state. It stands opposed to political organization whose aims are the furtherance of the sectional interests of organized labour, business, or finance.
The Budget-Mr. Caouette [Translation]
The following is the second basic principle which guides us in our work:

Government must serve the individual. The major function of democratic government in organized society is to secure for the people the results they want from the management of their public affairs, as far as such results are physically possible and morally right.

I think the hon. Minister of Finance will agree with us that the essential task of a democratic government in an organized society is to serve the people and to try to obtain the results which the people expect of the government, in so far as these results are physically possible.
The third basic principle of the Creditistes is this:

The individual must be free and have economic security. The individual can only attain his full stature in a society where his ability to make moral choices is restricted as little as possible. Economic security is a necessary means for attaining this freedom not as an end to be attained by restricting it.

This is the fourth basic principle:

The physically possible must be regarded as the financially possible. Whatever is physically possible, desirable, and morally right, can and should be made financially possible.

Those, Mr. Speaker, are the four basic principles of the Creditistes. The hon. Minister of Finance often tells us, as he did a while ago, that a bank charter, for instance, is granted by parliament and not by the government. He said a few minutes ago, speaking of the Western Bank of Canada, that parliament granted the charter and that the government had nothing to do with it.
Mr. Speaker, I maintain that though the Canadian people are told that parliament decides, we know, here in the house, that the government decides, because the party line must be followed. It is understood that the Liberals on the government side will vote for the government when the time comes to grant a bank charter. As the government has the majority in the house, government decides and not parliament.
Parliament should decide, parliament should be free to decide important issues such as granting bank charters in Canada,
February 13, 1967

The Budget-Mr. Caouette but that is not the case. The government has always decided, whether it was the present, the former or any of the successive governments, ever since confederation. In fact, we have had instances where the members of the government rose to speak in favour of increased old age pensions, but who voted against the amendment to increase them proposed by the opposition. Why? Because party discipline required that they vote against their convictions, because the matter became a political game.
Mr. Speaker, the hon. Minister of Finance takes pleasure in often repeating: We, of the federal government, have only two ways of finding money: loans and taxes. As I see it, there could be a third way: inflation. Those are the answers of the hon. Minister of Finance. Third way: inflation. But the only two ways the government can find money are through loans and taxes.
I say there are other ways of finding money and credit. The minister of Finance and Receiver General knows quite well that money and credit do not grow on spruce or on fir trees, whether in Lotbiniere or Vil-leneuve ridings. That is not where they grow.
Money and credit originate somewhere. But where? This the Minister of Finance and Receiver General never explains. He never mentions the creators of credit and money, never. He always answers: there are only two means at our disposal: borrowing and levying taxes. But before borrowing and taxing, the money had to originate somewhere. Where? The provinces do not create money and credit, they do and say what the federal government does and says, we borrow and we levy taxes. The municipal authorities and school boards say: we borrow and we levy taxes.
And the federal government, the central government, the supreme government gives us the same answer: we borrow and we levy taxes. These are our only ways of creating money and credit.
While the house is in session I sometimes attend sittings of the committee on finance, trade and economic affairs where we are given the opportunity to question presidents of various banks, the governor of the Bank of Canada and others. These people admit that $8 enables them to create $100 worth of credit, that they are authorized to give as much expansion to the Canadian credit as they wish, but we must pay interest on this credit.

I believe it was to a Bank of Nova Scotia economist that I once said this: When the federal government issues or buys $1 million worth of bonds, the Canadian chartered banks are immediately authorized by law and by charter to grant loans totalling $12.5 million.
Mr. Speaker, where does that credit come from? From the pen and the ink stand. Twelve million and a half. Would it not be as easy for the government to use the Bank of Canada and to tell it to create those twelve and a half million for the benefit of the Canadian people, instead of giving that power to a few individuals who control the economic lifeblood of the nation and who crush, as they see fit, industry, private enterprise and even the government because, in many cases, the latter is obliged to kowtow to those controllers who dispense credit as they please, with the blessing of the federal government.
We are not the only ones to ask for the use of the means available to us to appreciate the assets of our country, to make the development of our natural resources possible, to avoid the chaos which results from inflation and deflation. The means are available to us, and parliament has the power to decide and to legislate.
We do not use the powers available to us. We prefer to grant special licenses to individuals so as to let them exploit all the people.
The Minister of Finance and Receiver General knows fully well that parliament has the right to give orders to the Bank of Canada under section 91 of the B.N.A. Act. It is the prerogative, the right of the federal parliament to legislate in money matters. The provinces do not have that right. Then, why does not the federal government allow the provinces, the school boards, the municipalities, to cope-not with the possibilities of physical expansion-but with the financial possibilities to do so. Ask the provinces, the municipalities, the school boards what is their problem?
At the present time, in the province of Quebec, thousands of teachers are at loggerheads with school boards and the provincial government. Why those recriminations, those discussions and such an alarming situation in the province of Quebec? The question of finance. The school boards do not have enough funds to meet their obligations under their budget at present. Increased expenses are required, which they cannot meet.
[DOT] (4:10 p.m.)
On the other hand, the teachers are entitled to better treatment, they have a right to
February 13, 1967	COMMONS
recognition. But if we look at the situation at present in Quebec, I say this is complete anarchy, because they do not put the Anger on the cause of the evil, because they are afraid to touch the system which has placed the school boards in the position where they are at present, which has placed the government in its present dilemma, which has put municipalities in their present state of stagnation. Why? Because we have been using for one hundred years a debt-money system.
The cost of building a school is doubled, because of the interest required. The cost of building a road is doubled, because of the interest to be paid. The cost of building a city hall is doubled when the interest to be paid is included.
But the value of a city hall is never doubled; on the contrary, every year the building depreciates in value. A road has never been worth twice the amount it cost. Now, to double the cost of such public services is to resort to inAation 100 per cent, because over a period of 20 years you have to pay back double the amount of the capital borrowed originally.
This system may still not worry some of the people, but I can assure you that it is coming to an end. When school children are throwing tomatoes and rotten eggs at their teachers, when teachers are up in arms against school trustees, when school trustees are up in arms against the government, in short, when one sees what is going on in some places across the country, I think it is high time for a responsible government to set the Anancial system in order.
Otherwise our children will pay the piper and will never forgive us for not having taken proper steps at the proper time.
I am not the only one requesting that the Anancial system be set in order, I know that among Liberals-I see my hon. friend from Matapedia-Matane (Mr. Tremblay) who is an expert in this Aeld and knows that the Anancial system is faulty, that it needs to be improved and amended. He knows that the Bank of Canada should be used, instead of encouraging and granting to a few individuals the right to exercise Anancial control right across Canada. He knows that.
Some members of the Conservative and N.D.P. parties know it too. The parliamentary secretary to the Minister of Finance knows that the Bank of Canada could be used, if a decision was taken to that effect. Such a decision could be taken under our constitution.
The Budget-Mr. Caouette
We are not facing up to our responsibilities, and when we know-I will quote again today-


Some hon. Members:: He is going to repeat himself.


David Réal Caouette: I am. To bring some people to reason sometimes one has to repeat oneself over and over again, continuously.
Now, I want to quote three presidents of the United States who were up against the problem we are facing today. Here is what Thomas Jefferson said, and I quote:

I believe the banking institutions are more dangerous to our liberties than standing armies.

Mr. Speaker, Thomas Jefferson was not a stupid man nor a moron. He knew what he was talking about.

Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.

That is what a former president of the United States had to say, and to reach that station in life, or to become president of the United States, it seems to me, Mr. Speaker, that one has to use one's head, at least a little.
In 1829-not in 1967-John Adams made some remarks that, in my opinion, could very well be applied to the situation that exists in Canada in 1967. I quote:

Ail the perplexities, confusion and distress in America arise, not from defects in their constitution or confederation; not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.

Mr. Speaker, when one considers those who object to confederation or the constitution, in short, the citizens of the east who attack westerners, French Canadians who blame Englishmen and Englishmen who blame French Canadians, one may wonder what will be the effect of such an attitude on our Anan-cial system.
The constitution is not faulty. When we examine sections 91, 92, 93 and 94a of the constitution, we become aware of the fact that each province enjoys exactly the same privileges and rights. But we do not know
February 13, 1967

The Budget-Mr. Caouette them and we are fighting within confederation against confederation. We accuse others and blame them for what we have not had the courage to do ourselves; we attack everybody, except those who are really responsible, because we are not yet convinced in 1967 of our-
[DOT] (4:20 p.m.)

-downright ignorance of the nature of coin, credit and circulation.

There lies the essence of the problem. As soon as we decide to set things right we will see that no one is afraid of confederation; neither I nor the hon. member for Lotbiniere (Mr. Choquette) will lie awake at the propsect of a visit to Canada by Her Majesty the Queen, that is for sure; she can come if she wants to. We will show her respect; to us she will represent those who at least permitted us to become what we are today. She will be that much to us, and we will discover the cause of the present faults in our responsible financial system.
As for the financiers, their great motto is simple: Divide and rule. It does not matter whether we have separatists, co-separatists, separatists to a greater degree, to lesser degree, fanatics in other areas, Anglo-Saxon fanatics, or what have you. As long as we remain divided one against the other, with as many groups as possible, right and left, finance will remain master.
It is not the Queen of England who rules in Canada, it is the financial system.
We may say Her Majesty the Queen, yes, but "the power behind the throne" is stronger than that, Mr. Speaker. There you have the all powerful master.
When Abraham Lincoln, another one-time president of the United States said:

I have two great enemies-the southern army in front of me, and the financial institutions in the rear.

He said: The financial institutions behind and the southern army ahead. The army, he could see. Those behind, he could not see, he could feel them.

Of the two, the one behind is my greatest foe.


Lincoln said: Of those two enemies I have, the most dangerous, the one which is the most troublesome, is the group of financiers who are behind me. As a matter of fact, to win the war, he had at one time to issue what were called greenbacks, and that enabled him to pay his soldiers without having to call on the financial institutions. But they caught up with him later on, because he did not have the support of the American Congress, because he did not have the support of the government. But if the government had the support of a parliament like ours, to get high finance to toe the line, it would be as easy as passing the act to increase old age pensions in this country.
And Lincoln said:

The government should create, issue and circulate all the currency required to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, it is the government's greatest creative opportunity.

That was Lincoln speaking.

The people can and will be furnished with a currency as safe as their own country. Money will cease to be master and become the servant of the people. Democracy will rise superior to the money power.

That is precisely what the Creditistes are asking for. Not an unlimited financial credit or monetary creation. Not flood the country with greenbacks, as we say, or paper money, but create credit up to the exact amount of the existing resources in Canada. That is all we are asking for. Put things in order, set a balance between the purchasing power and the goods and services produced by the Canadian people.
Is there a sensible economist who can pass by this logical and plausible solution? [English]
Money will cease to be master and become the servant of the people. Democracy will rise superior to the money power.

That is what the members of the Creditistes request, Mr. Speaker.
February 13, 1967

And at this point, we might quote other bankers who, tor their part, defy governments:

The chairman of the United States Federal Reserve Board, Marriner J. Eccles, said:
The banks can create and destroy money; bank credit is money. It is money we do most of our business with, not with that currency which we usually think of as money.

It is so true that 95 per cent of the business in Canada, at the present time, is transacted by transfers of figures from one bank account to another. Figures only, for which there is not a nickel in circulation. Five per cent only of Canadian business is transacted with paper money or with hard cash, money in the pocket as we say in good French, while 95 per cent is done by transfers of figures from one account to another. And where are those figures created? In the government? No, the figures are created by the Canadian chartered banks. That is where.
The value of a bond can be created, as I said earlier. The government issues its bond series for one million, the Bank of Canada buys it for one million. But as soon as the Bank of Canada has bought it for a million, immediately, the reserve of the chartered banks increases and, that way they can multiply by 12 and a half times the initial amount of one million, which clearly allows a credit production of $12.5 million which are going to be loaned later on to the government at a rate of 4J, 4J, 5, 5| per cent. But the government will quench its thirst, will feed itself out of the hands of those people to whom we gave the right in Canada to create millions and billions practically without restriction. Mr. Eccles said:

It is money we do most of our business with, not with that currency which we usually think of as money.
[DOT] (4:30 p.m.)

Another banker, Mr. Mayer-Anselme Rothschild, said:

Let me issue the money of a nation and I care not who makes its laws.

It is exactly that. When the Minister of Finance and Receiver General tells us: "We have only two ways at our disposal to find
23033-820J
The Budget-Mr. Caouette money: loans and taxes", it means that he has to admit what Mr. Rothschild said once:

Let me issue the money of the nation and I care not who makes its laws.

Those people are above the law, and we realize this in the committee on finance, trade and economic affairs, the meetings of which we attend. We ask questions but receive replies that are not too precise. We ask them whether they create credit and they answer as follows: No, we do not create credit, we only "expand" credit.

It is a credit expansion, it is not the creation of money. It is just the expansion of credit.

What is the difference between expansion and creation, in the circumstances? Mr. Graham Towers, former governor of the Bank of Canada said the following and he is an expert in banking affairs:

That is the banking business (creating money), just the same way that a steel plant makes steel. Now, if parliament wants to change the form of operating the banking system, then certainly that is within the power of parliament.

That is precisely what I was saying a while ago, that parliament has the right to change this banking system, to amend it, to improve it. This does not mean cancelling all bank accounts and eliminating chartered banks in Canada. No. Let us keep the chartered banks, in order to finance the private sector of our economy. It is all very well, Mr. Speaker, for a businessman, a manufacturer to get credit from chartered banks, but when it comes to public capital, our municipalities, our school boards, our provincial government-
The Acting Speaker Mr. Rinfret): I regret to interrupt the hon. member, but his time has expired.


David Réal Caouette: Only two more minutes and I will be through, Mr. Speaker.


The Acting Speaker (Mr. Rinfret):: Does the house agree to the member for Villeneuve continuing his speech? Agreed?


Some hon. Members:: Agreed.
12962	COMMONS
The Budget-Hon. P. Martin


David Réal Caouette: Thank you, Mr. Speaker. I will not take advantage of my colleagues' generosity. I shall be brief.
To conclude, I want to say this: We believe that the government should use the Bank of Canada to finance the public sector of our economy. Our provinces, our municipalities, our school boards should have the right to borrow from the Bank of Canada, in a branch of the Bank of Canada, in any province, without interest, because they are public, nonprofitable organizations. We have no objection to those public organizations being able to finance themselves from the source of credit of the Bank of Canada, without interest, and to the private sector continuing to use the money which chartered banks are in a position to provide, for the smooth running of their business.
We do not want to nationalize anyone, but we believe that it is time for the government and parliament to use the Bank of Canada not only as a mainspring to give more power to the chartered banks but also to use it as a national institution which will help the economic development of our country and enable us to develop confederation in unity of all who inhabit Canada, including the French Canadians in Quebec as well as the Ukrainians in Manitoba and the Englishmen in Toronto or Vancouver.
Mr. Speaker, that is where the trouble lies. That is where we should bring a solution to help us make Canada the greatest country in the world, where life is good, the best country where there is agreement, where people do not tear each other apart but co-operate in its expansion.


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, I am sure that the hon. member who has just sat down will understand that if I do not try to reply directly to his remarks, it is because, on this occasion, I must deal with a completely different matter. He will doubtless understand that I have obligations in this field. I have listened with considerable interest even though I have not accepted the seriousness of his arguments.

I have outlined our policy on Viet Nam in this house during 1966 on two occasions, Mr. Speaker. In extended remarks I discussed Canadian policy on January 25 and July 8, 1966, as well as on five different occasions before the external affairs committee.
[The Acting Speaker (Mr. Rinfret).]
DEBATES	February 13, 1967
I believe that this house must reorganize its work. I believe that by accepting principles for the allocation of time we could more efficiently cover our agenda; and this we are not doing at the present time. In this way too we could have more discussion on the vital problems which affect international stability.


Mr. Winkler:: May I ask the hon. gentleman a question?


Mr.   Marlin@Essex Easl: I would prefer-[DOT]


Eric Alfred Winkler: Does he not think that this has been a very productive session?


Paul Joseph James Martin: I quite agree that this has been a productive session, Mr. Speaker, but I am trying to make our sessions more productive. Unless we have some acceptance of this principle we are not going to be able to meet the heavy obligations that face the government with regard to its legislation and which deny us, I think regrettably, the opportunity for fuller discussion on matters of serious concern to Canada in its relations with other countries, and particularly on some of the major problems that concern all nations in the world at this time.
As a result, Mr. Speaker, there are people who say that they are not aware of what Canadian policy is on Viet Nam. I certainly believe that we should encourage the right of discussion, and equally the right of dissent. What those who say that they do not understand Canadian policy really mean, of course, is that they do not agree with this policy. Canadian policy on Viet Nam involves efforts by this country and certain other countries to help bring the war in Viet Nam to an end.
Now, Mr. Speaker, obviously there is room for disagreement about what our policy is. I do not ask everyone to accept that policy, but I do ask the house and the country to understand the circumstances in which foreign policy here or elsewhere must be conducted, particularly when vital issues are involved, issues that affect the peace of the world.
I believe that much of the criticism of the Canadian government's policy in this area is based on the unrealistic view that Canada is in a position to compel acceptance of its analysis of the Viet Nam situation. We are not a combatant power. We are a member of an international supervisory and control organization that has been in existence for 12 years. Yet much of the criticism levelled against us, and not only against us but against Poland, India and certain other countries, almost seems to presuppose that these
February 13, 1967

countries have some direct responsibility for this regrettable conflict.
As I say, Mr. Speaker, I welcome discussion. I am not concerned about the criticism. I am concerned, as I said to the students of McGill University on Friday last, that there be understanding of the role that Canada is seeking to play in this very difficult and important question.
I ask, Mr. Speaker, what is it open to Canada to do in this conflict? What has Canada in fact been trying to do? First of all, we have tried to form the best possible judgment of the position of the parties to the conflict. We are in a good position to do this because of the close relationship we have, first of all, with our neighbour the United States, and also because of the access which we, among very few countries, have to Hanoi as a result of our membership on the International Control Commission. This gives us the opportunity not only to make reasonably informed judgments but to keep abreast of the evolution of the positions of both sides.
Second, Mr. Speaker, we can try to devise formulas which stand some chance of bridging the gap which still separates the positions of the two sides. This we have been doing, and so have other countries. It is not always possible, because of the very nature of the situation, to disclose all that we are doing, and particularly if we wish to enjoy the confidence of those who are prepared to use our good offices. The real problem is not the dearth of such formulas but the complexity of the problem to which they must be addressed. What is at issue here is not Canadian influence or initiative but the urgent need to find a way out of the present impasse which both sides can accept as not being incompatible with their real interests.
[DOT] (4:40 p.ra.)
Third, we can try in common with our other partners on the International Control Commission, as we are doing and as we have been doing for 11 months, to make the instrumentality of the commission available to the parties when the circumstances are right. We believe that the circumstances may now be ripening. I would like to think that our two colleague states will come to agree with that judgment in the light of events during the past few days. But the commission is powerless to compel the parties to do what they are not prepared to do on their own account. All that the commission can do is provide an umbrella which, when the time comes, may enable them to take certain steps
The Budget-Hon. P. Martin and allow certain steps to be taken which in any other context they might find it difficult to contemplate.
I may be asked: what are those steps? But if I say that I cannot indicate what those steps are I shall perhaps be accused of evasion. I do not mind the accusation, but I can only say that if I do not state them it is because we have made commitments-I hope no one will say commitments to the United States only-to the parties involved in this matter which, if violated, would in my opinion mean that our future efforts would not be respected or trusted.
I believe there is a valid distinction to be drawn between the role of the individual in this kind of situation and the role of a government. The possibilities open to an individual for constructive political action are different from those open to a government. Individuals do not have the responsibility of discharging foreign policy and cannot, naturally, be made fully aware of all the facts. In a democracy there must never be a denial of discussion of commitments the government makes in its relations with other states. Before policy is finally decided, parliament and the public certainly have a right to know. But in matters of negotiation, particularly when questions of war and peace are involved, it cannot be expected that a government should on every occasion make disclosures which are not in the best interests of achieving the objectives we all have in mind.
In the final analysis it must be the foreign minister who makes the decision with the support of his colleagues. I am prepared to make it. I will not change in any way the course I have pursued in this matter because my primary aim, and that of the government, has been to enable Canada along with other countries to try to bring an end to the war in Viet Nam.


Some hon. Members:: Hear, hear.


Paul Joseph James Martin: It will not be brought to an end by engaging in wild denunciation. The house must not expect me to take such a course and then to enjoy the confidence of both sides. Lose that confidence, and anything we might do or attempt to do would be destroyed.
There are those who urge us to speak out against this or that aspect of the war. The Leader of the Opposition (Mr. Diefenbaker) asked me the other day whether I would agree that this house should pass a resolution condemning the bombing in the north or that
February 13, 1967

The Budget-Hon. P. Martin we should pass a resolution urging that the bombing in the north be brought to an end. I ask the house to reflect. If I had given an immediate, positive response, what would have been the consequence? What would have been the consequence for whatever service this country might perform in an intermediary capacity, either alone or collectively with other nations? I do not question for a moment the sincerity or the sense of urgency Which lies behind these demands, and I take no exception to whatever hon. members of this house may urge me to do today. But I would ask the advocates of political activism to pause for a moment and reflect on the practical consequences of their proposal. Do they believe that if a government-and I mean the Canadian government-made a series of strong public declarations the basis of its Viet Nam policy, the tangled and dangerous problem in that country would begin to unravel itself?
To be more specific, let us look at the question of the bombing of North Viet Nam. I have said already that this may be the key to the whole problem. I am confident that if it is not the key element in the present military-diplomatic puzzle it is certainly a most important factor. There are other factors. Even though I hope the bombing does stop, there are other actions and responsibilities which must also be fitted into the total pattern of steps toward a peaceful settlement. Until at least some faint outline of a pattern can be established through what has been called quiet diplomacy, it seems unlikely that the bombing would stop for a long period simply in response to a Canadian government demand or appeal, regardless of what individual Canadians or members of the government personally might feel about this aspect of the policy of the United States.
I suggest it would be self-defeating if our public statements, no matter how widely acclaimed they might be in this house and this country, were to have the effect of slamming doors instead of opening them, or closing off potentially useful dialogues instead of stimulating and nurturing the confidential exchange of view points. I ask members of this house, who can influence these matters by their pronouncements and by their deliberations, to appreciate the significance of what I am saying. What government in the free world has taken any other course? Under what foreign minister, in Britain, for example, under a Labour government, or in any country except France, has there been a lack of restraint in

criticism against the policy of a particular country?
In one of his despatches from Hanoi Mr. Harrison Salisbury of the New York Times formulated the following prescription on the basis of his conversations there. He said:
What is needed are not headlines, publicized missions, pressures or formulas but the quiet and painstaking uses of the old-fashioned confidential techniques of the pre-electronic era.
9 (4:50 p.m.)
I subscribe to that view. As long as I hold this particular portfolio that will be the course I will pursue. I am convinced it is the right one.
Canada does occupy a special position in Viet Nam because for 12 years, along with India and Poland, it has shared in the frustrating experiences of service on the international commission. It enjoys, as no other institution does, contact with both sides and reflects by its composition a wide variety of international opinion. The efforts of the commission in the war situation have had minimal results but that is not because we have not tried. The commission cannot impose its will on the United States, on North Viet Nam, on South Viet Nam, on China or on the Soviet Union. It may not be the instrument that will be finally used to promote agreement but it is our duty, as Canada sees it, to be ready for the slightest opportunity to achieve that end and, who knows, that opportunity may not necessarily be far away. I cannot say so positively, but I feel there are elements in the present situation that might cause India, Poland and Canada to recognize that there may be a special role for them in the Viet Nam situation as it is now unfolding.
I took the view last March that, if we could not get an understanding with Poland and India as to the time when the commission should be used according to our proposals- and these were discussed privately and confidentially in Warsaw and in Delhi-then we should try ourselves. It was with that objective that on two occasions Mr. Chester Ron-ning, as a representative of the government of Canada, was sent to Hanoi to carry on certain conversations with the government of North Viet Nam.
I can say this, and I can confirm it as of recent days, that the channel which was thus established is still open. Perhaps it was this channel, amongst others, that Mr. Rusk had in mind in his press conference last Thursday. I am not saying this is the only channel, but it remains open. For that reason I resented the publicity given to a groundless report that
February 13, 1967

Mr. Chester Ronning's services would no longer be used by the government because he had exercised the right to express private opinions, no longer being a permanent member of the Department of External Affairs. There was no foundation for that story. We can use that channel or the mechanism of the commission, depending on the circumstances.
I am often asked in the house, what did Mr. Ronning say in Hanoi, what went on there? I am often asked what was said in the discussions which took place a few weeks ago when Mr. Victor Moore went there, indeed, what took place last fall when Mr. Victor Moore was in Hanoi, and because I do not give a forthcoming reply I am charged with evasion. I do not mind the charge, but I am asking for an understanding by this house and by the country as to why I cannot say more at the present time.
Mr. Ronning, in anything he has said publicly, has not disclosed the detail of his conversations in Hanoi. Naturally we want to enjoy the confidence of all sides and to do that we must respect commitments which we have made to all sides. Other countries have tried their best, sometimes with one side. We have tried our best with both sides and we will continue to do so.
I believe that it would be helpful if the Canadian position on a settlement of the Viet Nam conflict were restated so that those most directly concerned, particularly in Asia, would know precisely where Canada stands.
First, we believe that a military solution alone is neither practicable nor desirable. We have always made it clear the we look to negotiation to settle this conflict. We have said this because we think that the Viet Nam situation cannot be isolated from the security and stability of southeast Asia as a whole. We have not been alone in saying this. If there is to be a settlement which will hold out a reasonable prospect of long-term stability in that area of southeast Asia it will have to be based upon an accommodation of the interests of those primarily concerned. I do not believe this will happen as the result of military action alone.
Second, peace discussions should take place on the basis of the Geneva agreement. We believe that, without any prejudice whatsoever to the ultimate solutions, the first stage of any settlement will have to envisage a return to the status quo ante. By that we mean the conditions which were envisaged as ensuing from the Geneva ceasefire agreement of 1954. According to my understanding the government of North Viet Nam does not take issue
The Budget-Hon. P. Martin with that position. In practice this involves a continuing of the de facto division into two Viet Nams, if only to allow time for the scars which have been opened by the conflicts of the past quarter century to heal and for new dispositions to be agreed upon for the eventual reunification of the country.
Third, we recognize the unity of the people of Viet Nam. We have no wish to inhibit the reunification of Viet Nam. We are bound to recognize, however, that the temporary division of that country reflects the political realities of the situation and cannot be abrogated by force. It is for the people in the two parts of Viet Nam to decide how soon and under what conditions preparations for reunification can be set in train. This is not something which can be imposed upon the people of Viet Nam from the outside or in disregard of the principle which they must enjoy, like anyone else, of self-determination.
Fourth, we believe that any Viet Nam settlement will have to involve an international presence. We believe it is generally agreed that as soon as conditions permit there must be a withdrawal of all outside forces from both parts of Viet Nam. This would be consistent with the terms of the Geneva agreement. The same applies to military bases maintained in Viet Nam.
We believe that it is likely to be necessary, for some period at any rate, to have international supervision of any settlement agreed to by the parties. The purpose of such supervision would be to give each side adequate guarantees that the terms of such a settlement were being fairly carried out. We have no firm views as to what form that international supervision might take.
If it were decided that the three powers represented on the present international commission should assume a new mandate in an expanded form, I can assure the house that Canada would be prepared to co-operate fully in the constitution of a new supervisory force. In that event we shall have to consider, in the light of our experience, what powers and what resources should be given to such a force if it is to carry out its mandate effectively and with the best interests of the parties in mind, c (5:00 p.m.)
Fifth, we believe that it is for the Vietnamese people themselves to determine their own political future and the shape of the institutions under which they wish to live. We welcome the progress which has been made in South Viet Nam to bring about the conditions
February 13, 1967

The Budget-Hon. P. Martin in which a constitutional government, responsive to the interests of the people of the south, can be elected. We understand that this process will be completed within the current year. We would hope, when the hostilities have ceased and a settlement of the current conflict has been reached, that all segments of the people of South Viet Nam will be afforded an opportunity to participate on a fair, constitutional and peaceful basis in the political life of South Viet Nam, but so far as the representation of the Viet Cong at a conference is concerned, in the words of Mr. Goldberg's recent statement, this did not seem to present an insurmountable problem.
Sixth, we can see merit in proposals which have been made for the neutralization not only of Viet Nam but of a wider area in southeast Asia.
Seventh, we believe that in southeast Asia, as in other parts of the developing world, there is a close link between the requirements of stability and the requirements of economic development.
I would hope, Mr. Speaker, that the governments of North and South Viet Nam would take note of this statement of our view concerning the nature of a possible peace settlement. I would hope they would regard it as an earnest of our desire to help bring about an end to the war in Viet Nam.
There are many things with which I should like to have dealt on this very subject, but there will be an opportunity when the external affairs committee meets.
One question is addressed to me from many quarters: How can you say that you are pursuing the objective of peace when instruments of destruction manufactured in this country find their way into Viet Nam? The Prime Minister dealt with this question on January 18. I should like to supplement what he said by pointing out that we have a defence production sharing agreement with our great and friendly neighbour. This agreement was formulated in 1959. At that time it was warmly approved by every section of the house and was endorsed by the people of Canada.
The fact is that although there may be illogicalities, the government of Canada does not itself authorize the shipment of arms made in this country direct to any theatre of war. I know the answer that will be given to what I am saying now. In general it will be said that we must know that military equipment sold by Canada to the United States may find its way to Viet Nam. I will not try to
IMr. Martin (Essex East).]
dodge what is obvious, but I do ask those who make this argument to do it in fairness and with a sense of the circumstances in which this situation has developed.
I could say something now about what other countries on the other side are doing. I could say something right now about what some countries who do not support our point of view and who give strong support to Hanoi are doing by way of direct assistance. I could do that and I could enumerate the items. But if I were to do that, then I would have to ask myself how that would help with those with whom we are engaged at the present time in trying to bring about a basis for preliminary talks.
Mr. Speaker, I have restated some of Canada's positions with regard to the war in Viet Nam and outlined the principles which we believe should apply if and when peace is achieved in that regrettably divided country. I say to members of the house, not because I want sympathy but because I want to assure them that the government is not in any way relenting in its efforts, that there is no problem before the department over which I preside which during the past year has engaged more of our attention, more of the energies of our personnel, and which has brought us into contact more closely with Poland and India as well as with the governments of the south and the north and the government of the United States, than has this question.
When the time comes to give to this house and to this country the record of what we have been trying to do I will be content to let the record speak for itself. I have been in politics a long time. I know as well as any man in this house the art of debate. I know what people can do by way of rhetorical questioning, and I received a lot of this the other day at McGill University.


Eric Alfred Winkler: And answers.


Paul Joseph James Martin: Did my hon. friend say I cannot answer?


Eric Alfred Winkler: I said "And answers".


Paul Joseph James Martin: My hon. friend is not satisfied with my replies. Some of my replies are purposely indirect, because sometimes if I were to answer some of the questions asked I would certainly not be pursuing the course of peace which we all have in mind. I find it difficult to accept that there could be any disbelief anywhere concerning the specific intentions of the government of Canada. I would regard it as an inconsistency
February 13, 1967

with my own profession, my own conduct in public life, and my own training in public life.
I can only assure this house, on behalf of the government, that we will do our utmost to help bring to an end a conflict which we have not started and in which we are not engaged but the solution to which we regard as indispensable for building a more orderly world. I believe we are in the throes of great achievement in the international community. I look forward shortly to signing for Canada a nonproliferation agreement in respect of nuclear weapons, an agreement which I hope will take into account the position of those countries whose nuclear capacity is dedicated to peaceful purposes and who must receive some guarantees and some assurances if they too are not to join the nuclear club.
We have just signed the agreement to outlaw nuclear weapons in outer space. These things are all part of a tremendous achievement which demonstrates the easing of international tension that is taking place between east and west in spite of the fact that the uncertain state of things in China must cause us all concern. The visit of Mr. Kosygin to Britain the other day, his being received by the Queen and speaking to the British parliament, are indications of what is happening. I ask this house to believe that with the influence at our disposal we are doing all we can to bring peace to the people of Viet Nam.
[DOT] (5:10 p.m.)


Mr. Nesbitt:: Mr. Speaker, I should like to ask the minister whether he will permit a question. During his remarks, as I recall, he pointed out a number of principles that Canada would like to see implemented in the ultimate peace settlement for Viet Nam. The fourth or fifth point was that he hoped all foreign troops on both sides would be withdrawn from North and South Viet Nam. Did the minister imply that the supply of arms to both sides should also be stopped?


Paul Joseph James Martin: My parliamentary secretary indicates to me that he believes I said "outside", and that certainly is what I intended to say. I was looking at a very important note just handed me and I may have missed part of the hon. gentleman's question.


Wallace Bickford (Wally) Nesbitt: I wanted the minister to indicate whether when he referred to the withdrawal of outside troops from both sides he was also suggesting that the supply of arms to both sides be also stopped.
The Budget-Hon. P. Martin


Mr.   Marlin@Essex East: I would think that any form of assistance that would be inconsistent with the withdrawal of troops or with the terms of a cease fire or armistice must be excluded.
I regret to tell the house that I have just been advised that combat operations against military targets in Viet Nam have now been resumed. The suspension of these operations initiated at the beginning of Tet, the lunar new year, was continued beyond the end of Tet for an additional time in order to avoid any possibility that an early resumption would be misconstrued in relation to Mr. Kosygin's visit to London. May I just say by way of parenthesis that the position of the United States is that it is prepared to stop the bombing if there is given to them, privately or otherwise, some indication of even the most minimal reaction or reciprocal act. I can only say that in spite of this news, which I had hoped might be otherwise, we must renew our determination to contribute in some way to bringing about a cease fire.


Thomas Clement (Tommy) Douglas: May I ask the minister a question? I did not want to interrupt him while he was speaking. He spoke of the Canada-U.S. defence sharing agreement. I should like to ask him whether it is true that the Canadian government appealed to the United States not to send any armaments sold to them by Canada to the Viet Nam theatre of war and, if so, was this request refused?


Paul Joseph James Martin: Mr. Speaker, I hope my hesitation will not indicate that I do not want to answer that question. I would not have any hesitation in telling my hon. friend privately what the situation is. I hope no one will take exception to that offer. We have an agreement with the United States which is a solid commitment and one that is very important to the economy of this country. I hope no one will say that because I make that remark our economy in my judgment is more important than bringing about peace in Viet Nam, because that is not the situation. Will any hon. member of this house advocate that we should abrogate this defence production sharing agreement? We have had consultations with the United States in respect of this matter, and these consultations have not failed to achieve in a particular instance what was the basis of the negotiations. I cannot go beyond that.


David Orlikow: Mr. Speaker, it had not been my intention to speak on Viet Nam, during this debate. I am
12968	COMMONS
The Budget-Mr. Orlikow certain that had we known the Secretary of State for External Affairs (Mr. Martin) would be speaking on this subject the leader of our party would have made arrangements to express our views in detail, but the speech of the minister is so important I feel it incumbent on me to say something in reply. As I listened to the minister I could not help thinking about a book recently written and published by Professor Eayrs in which he recounts in detail the dreary record of the Canadian government during pre-world war II years and the record of the former prime minister, Mr. Mackenzie King, a record full of platitudes, inaction and refusal to play any part in a real system of collective bargaining.
The Secretary of State for External Affairs has said that Canada does not believe that the war in Viet Nam can be solved by military means alone. Yet he has refused today, as he has in the past, to join with people such as the Secretary General of the United Nations, Mr. U Thant, Pope Paul and important political figures such as Senator Fulbright and Senator Morse in saying to the United States very clearly that in the opinion of the people of this country there can be no real negotiations for the settlement of the war in Viet Nam until the United States stops bombing North Viet Nam. That is a very simple proposal and I think we ought to make it not just privately, as I am sure the minister has done, but publicly because world opinion demands that Canada express its views.


Mr.   Marlin@Essex East: Would my hon. friend permit a question? He has suggested that I should make this appeal and he states he has knowledge of the fact I have done so privately. Will he explain to me why the foreign ministers of Britain and of every other country in the NATO alliance but one have felt that the course to pursue in a matter of this sort is the course that we are pursuing in this country, which I believe to be the correct one?


David Orlikow: Let me point out to the Secretary of State for External Affairs that the Prime Minister of India has made this kind of a statement. I am not here to defend the government of any other country; I am here to discuss what I think this government and this country should do.
The Secretary of State for External Affairs has suggested that because of our position on the International Joint Commission we must not do anything to jeopardize our impartiality. I cannot think of anything we could do to jeopardize that so-called impartial position

DEBATES	February 13, 1967
which would be more damaging than what we are doing, namely, selling war material to one of the combatants in this war.
The Secretary of State for External Affairs asked whether any member would suggest that we should unilaterally abrogate that agreement with the United States. I suggest that we abrogate it, and if the minister does not want to listen to members of this party I suggest he read the reports of the statement made by the president of the University Liberal Federation at their meeting yesterday and the resolution introduced by the son of Mr. Carl Goldenberg, one of the most respected citizens in Canada. That represents the position we think the government of Canada ought to adopt.


Paul Joseph James Martin: Perhaps my hon. friend would allow me to state that I have just received an urgent message and must leave the chamber. I regret to leave while he is speaking but I am sure he will understand.
[DOT] (5:20 p.m.)


David Orlikow: I am sure that if the Secretary of State for External Affairs leaves he will do so because he must. In any case it was not my intention to spend much time on this subject. I am simply saying it seems to me that, as has happened in the past in this country, this government says all the right things in theory but when it comes to the implementation of the very things about which the Secretary of State for External Affairs talks, when it comes to what Canada can do to end the war in Viet Nam, the action the government is prepared to take publicly is virtually nil. I want to deal in the few minutes available to me today-


Mr. Greene:: Mr. Speaker, would the hon. member permit a question? Could the hon. member tell the house whether he speaks for his party when he advocates the unilateral abrogation of the joint defence sharing and spending agreement with the United States of America?


David Orlikow: To the extent that I refer to the sale of war materiel to the United States at a time when the United States is involved in an unofficial war in Viet Nam, I think I speak for my party.


Some hon. Members:: Hear, hear.


David Orlikow: Mr. Speaker, I have a limited amount of time in which to speak. It was not my intention to speak on the subject of Viet Nam. We had no notice that the Secretary of
February 13, 1987	COMMONS
State for External Affairs was going to make a statement. I say very clearly that we did not have time before he spoke, while he was speaking or since to adopt what might be called an official position on behalf of our party, but I think the things I have said represent our views. While I do not ordinarily mind questions, I would like in the time I have left to deal with the subject which I intended to discuss. Therefore I would appreciate not being asked any more questions on the subject of Viet Nam.
The mini-budget which the Minister of Finance (Mr. Sharp) presented to the house some weeks ago, like the budget he presented early in 1966, seems to me to have one main purpose, namely, to slow down those programs outlined by the government itself in earlier years and during election campaigns. We have had a postponement of the date for implementing medicare. We have had a disastrous slowdown in housing starts which has led to increasing hardship for people both in the low and medium income groups in regard to finding adequate housing. This hardship has been described in detail by a newspaper as close to the government as the Toronto Star as a "major disaster".
We have had the complete ignoring of the solemn pledge made by the government during several election campaigns that the Liberal party, if returned to office, would implement a program of 10,000 university scholarships. That program has gone with the wind and I suppose it will not reappear until 1968 or 1969 when an election is forthcoming, or perhaps not even until some time in the 1970's if the Liberal party thinks this kind of proposal will get it votes at that time.
It is my intention today to speak about the kind of programs which are being ignored by the Minister of Finance and are of basic importance to this country. I refer to programs for the fostering of education and scientific research, without which this country cannot meet the needs of the 1970's. The Economic Council of Canada dealt with this important question in their second annual review issued in December, 1965, when they said:
To advance educational levels through the formal education system, attention currently needs to be focused on five particular areas.
I refer to the fourth point which they make:
The more rapid development of facilities for a sharply accelerating flow of professional and other highly skilled manpower at the postgraduate university level-the level at which we have made least progress to date in the Canadian educational system.
The Budget-Mr. Orlikow
In the same report they give some very interesting statistics in comparing Canada with the United States. If hon. members will look at page 84 of the report they will see that in terms of the percentage of the male labour force, only 4.2 per cent of Canadians in the year 1960 had a university degree compared with 7.2 per cent of the male labour force of the United States. That kind of thing is a disaster for this country. What it has meant is that we have had and continue to have a very serious exodus of the most highly trained, most highly skilled people from Canada to the United States.
In the year 1965, according to figures supplied in answer to a question which I put on the order paper, 242 scientists, 863 engineers, 133 professors and instructors, and 380 physicians and surgeons left this country for the United States. It has been claimed by some that this is not very serious, that what we lose to the United States we make up by people coming to Canada from Europe. One of the organizations best able to judge this question, the Organization for Economic Cooperation and Development, issued in 1966 a special report on the subject of the loss of scientists and engineers to the United States. I wish to quote from a summary of that report which appeared in the Toronto Globe and Mail of April 13, 1966. The article reads:
The O.E.C.D. Observer, In a special issue on science, calculated that the average annual loss of scientists and engineers to the United States was G62 for Britain, 425 for West Germany, 136 for the Netherlands, and 82 for France. The Canadian annual loss was 1,239-almost equal to the combined total of 1,305 for the four major countries of western Europe.
They go into the reasons for this and say:
In relation to output, U.S. spending on research and development was equal to 3.1 per cent of gross national product in 1962. The figure was 2.2 per cent for Britain, 1.8 per cent for the Netherlands, 1.5 per cent for France, 1.3 per cent for Germany, and 1 per cent for Belgium.
The O.E.C.D. did not calculate a figure for Canada, but Ottawa authorities have estimated that research and development spending in 1963 was running at about 1 per cent of gross national product.
Is it any wonder that Canadian scientists, professors, doctors and engineers leave this country for the United States? The Dominion Bureau of Statistics, in a publication it issues annually entitled "Federal Government Expenditures On Scientific Activities" reports that for the year 1965-66 Canadian government expenditures for scientific research totalled $396 million. I want to compare this figure with that for the United States. To do
February 13, 1967

The Budget-Mr. Orlikow so I quote in part a report which appeared in the very authoritative magazine "Science" published in the United States. I refer to the issue of January 27, 1967.
[DOT] (5:30 p.m.)
In gross amounts, according to the administration, annual federal expenditures for R & D will rise from $16.5 billion to a trifle over $17 billion.
Of this sum $1.7 billion will be spent for academic research and development. It continues:
Congress has held the National Science Foundation budget to a trifle under $480 million... In fiscal 1966, for example, NSF awarded 3647 research grants; in the current fiscal year the number was 3600: next year, if NSF gets the money, it is seeking, it plans to award 3870 . .. These figures do not include the now separately budgeted National Institute of Mental Health, for which expenditures are budgeted to rise from the current nearly $200 million to $257 million.
One of the reasons, according to some people, why we have not been able to do the job in the field of research is that the constitution of Canada leaves education to the provinces.
Professor J. A. Corry, principal of Queen's University, in a speech which he made some time ago and which was printed in the December, 1966 issue of University Affairs, dealt with this matter quite effectively, I think, when he said:
But, It will be asked, does not section 93 of the British North America Act give exclusive power over education to the provinces? This is correct, subject to a limitation that is likely to become more portentous as time goes on. Literally, the words of section 93 are "In and for each province, the legislature may exclusively make laws in relation to education". If there are national needs and objectives that require concerted educational policy in two, several, or all provinces, no provincial legislature is by itself competent in the matter, and judicial interpretation oh other comparable aspects of the distribution of powers under the British North America Act makes it clear that parliament is competent, under "the peace order and good government" clause.
That the provinces would agree to an increased expenditure on the part of the federal government in the field of scientific research is made obvious in the recent report according to which the province of Quebec is proposing to build a $28 million research centre in the field of electrical problems and in the fact that Mr. Johnson, the premier of Quebec, has expressed the hope that the federal government will participate in the financing of that research project. If the province of Quebec is ready to agree to the participation of the federal government I am certain that no other province would object. It seems to

me that this government should have faced up to the problem by now.
Two or three years ago we set up with a good deal of fanfare the scientific secretariat headed by Dr. Forward. If I am critical it is certainly not of the scientific secretariat because I am sure that the staff of that secretariat is very competent. This year the announcement was made, with still more publicity and fanfare, of the establishment of a science council the membership of which is made up of some of the ablest and most respected scientists in this country. However, what can the scientific secretariat and the science council do if the government of Canada is not prepared, and it has not been prepared to this day, to do more than go through the gesture of increasing support for scientific research?
I referred earlier to the fact that the amount of the gross national product which this country is devoting to scientific research is less than a third of the amount which the United States is devoting for the same purpose, The situation is even worse than those figures would indicate because while they refer to what the governments are doing the fact is that Canadian industry spends on research only a fraction of what United States industry does. In a report on the establishment of the science council which appeared in Science magazine.-and I believe it is a very fair report of what is happening in Canada- this very subject is dealt with, namely, the fact that Canadian industry does not spend the money and does not have the kind of research programs which United States industry has. I wish to read a paragraph dealing with this subject which appeared in Science magazine dated September 2, 1966:
Much of the explanation for industry's inferior position vis-a-vis the government in matters of research lies in the peculiar nature of the Canadian economy. For a variety of reasons Canadian industry has been slow to undertake ambitious R & D programs on its own initiative, although this is no longer as true as it once was. Firms oriented to Canada's small, protected, internal market often have had neither the resources nor the incentive to do research. The branch plants and subsidiaries of American and other foreign companies, which dominate some major industries, frequently have looked to their parent companies for R & D work.
It is true that in the last couple of years we have improved our position somewhat through tax incentives and direct grants, but in relation to the problem as a whole and to the tremendous role which scientific research should be playing in this country what we have done is virtually nothing. I want to
February 13, 1967

document the charge I have made by referring to a report submitted to the Bladen commission dealing with research by the committee on research of McGill University. I want to read a few paragraphs from this very excellent report. Here is what it says about the biological sciences:
While comparatively well-supported, these sciences are in fact not given the support they should have, and their strength is comparative only. Canada is not putting enough money and effort into research and therefore all the areas of endeavour are under-supplied. In the case of the biological sciences, the main concern at present is the loss of American funds due to the change of policy whereby research funds are to be spent within the United States rather than outside it.
I want to remind hon. members and bring it to the attention of the public that Canada is spending for medical research not one-tenth of what the United States spends, which we should do since our population is one-tenth that of the United States, but only one-hundredth of what that country spends. Therefore it is not surprising that every year, for the last ten years 100 or more of our best doctors and best medical researchers have left Canada to go to the United States. It is surprising not that they go but that more have not gone.
In the same report the McGill committee writes about the physical sciences and says:
[DOT] (5:40 p.m.)
The physical sciences are in a worse plight, both comparatively and absolutely. The cost of sophisticated equipment is now becoming such that a scientist being invited to join a university staff will often detail his equipment and funding needs as a condition of his acceptance. The shortage of staff in the physical science departments, due in part to the opening of new universities, the drain to the States, and the continual movement into industry, put the chairmen of these departments into a most unenviable position.
In the few minutes I have left, Mr. Speaker, I want to deal with the problem of medical research, a problem which has been dealt with by a number of other speakers in this debate. It is a problem about which I and other members have spoken on a number of occasions, a problem which the government seems determined to ignore and one which has led within the last year to four of the 12 medical colleges in this country being threatened with loss of their accreditation. The names of the schools involved have not been made public. Steps were taken to assure that they would not lose their accreditation. Some money was made available. In fact, however, the position of these medical colleges is now precarious.
The Budget-Mr. Orlikow
A report was presented to the government more than a year ago, which was prepared by Mr. Gundy of Wood, Gundy and Company. I understand the firm is really associated with the firm Woods, Gordon, a name which has some status in this house.


Mr. Macdonald (Rosedale):: No, that is not right; it is not even spelled the same.


David Orlikow: The parliamentary secretary says I am wrong but the letterhead seems to indicate this. In any case the report signed by Mr. Gundy was prepared after consultation with, and the assistance of, competent and experienced medical researchers in this country. It is a report which ought to make every member of this house hang his head in shame. Yet, Mr. Speaker, so far as I can find out it is a report which has been virtually ignored by the Minister of Finance (Mr. Sharp), the Minister of Industry (Mr. Drury) and the Prime Minister (Mr. Pearson).
I should like to summarize, in the few minutes I have left, some of the comments made in this report:
We wish to emphasize that a substantial increase in support for medical research is needed at once. There is an alternative view, that time is required to bring about an expansion of physical facilties, and in well-qualified staff and research of merit. While this view has substance, it overlooks the major injury which would be caused to medical research in Canada unless an immediate indication is given of a greatly improved level of support.
This report was made 15 month ago, but there has been no indication from the government of the support requested. I continue quoting:
Unless a more favourable environment for medical research is provided as a matter of urgency, the skilled manpower on which all else depends will be inadequate both in quantity and in quality to bring about the longer-term expansion needed.
The report has some very interesting tables. For the year 1965-66, the funds available for medical research from various sources totalled $21.5 million, of which $1.5 million came from the United States. This was $7.5 million less than the amount requested by the people involved in medical research. I want to emphasize that medical researchers, having had lots of experience in dealing with this government, had already pared their requests to the bone.


The Acting Speaker (Mr. Rinfret):: Order. I regret to interrupt the hon. member but the time allotted for his speech has expired.


David Orlikow: I wonder if I could have just
one minute?
February 13, 1967

The Budget-Mr. Skoreyko


The Acting Speaker (Mr. Rinfret):: Is there agreement for the hon. member to continue his speech?


Some hon. Members:: Agreed.


David Orlikow: This is the last day of the debate and I know there are many other members who want to speak. I do not want to interfere with the right of any other member.
I hope I have made my case in a factual way. What I have said with regard to scientific research is not the view of this party alone. What I have said, I am convinced, represents the views and desires of people who are involved in scientific research, who realize the tremendous importance to Canada of expanding what we have done, who realize that unless we do these things now Canada will rapidly become a second class country. I can only say in conclusion that I join with others in urging the Minister of Finance, when he introduces his next budget, to give serious consideration to this problem so that we do not have more patchwork, another few million dollars, but that we have, if not an immediate solution to the problem, at least a first step to a solution to the problem of financing scientific research which will be arrived at in the next three or four years.


Mr. William Skoreyko (Edmonton East):: The Budget-Mr. Skoreyko parties than Mr. Laurendeau? Why the difference?
As you know, Mr. Speaker, I was not very happy about the commission when it was first appointed because I felt that one third of the people who make up this nation were being ignored. As I said in my remarks on this subject two years ago, no nation can be a great nation if it tries to cater to one group of its citizens in preference to another. Surely the policy of treating everybody on an equal basis is what will make Canada great. I notice the hon. member for Montreal, or wherever it is-


Bryce Stuart Mackasey: The riding of Verdun.


William Skoreyko: -snickering at my remarks.


Bryce Stuart Mackasey: On a point of order, I was not snickering. I was thinking how pathetic it was that anyone would stand in the House of Commons and make such bigoted, biased remarks. It was not snickering; it was a reference-


Mr. Speaker:: Order. That is not a point of order.


William Skoreyko: I can well forgive the hon. member's narrow view. I have listened to him in the committee and I know what little contribution he has made. He understands the problem about which I am talking as thoroughly as a grade 1 student would.
I should like to deal now with another matter which in my view has been neglected. I refer to the question of unemployment. I was a backbench member of the party in office during the years 1962-63 and I well remember how that paragon of virtue now Secretary of State for External Affairs (Mr. Martin) used to pop up almost daily and ask my hon. friend who was minister of labour at that time what he planned to do about the serious unemployment situation-well over 400,000 men were unemployed, he said. This happened day in and day out until the hon. gentleman had "sold" to the Canadian people the idea that the employment situation was really drastic.
I have before me the bulletin issued by the Dominion Bureau of Statistics on February 9. I commend this to the hon. member who does not agree with my opinions with regard to immigration. There are more than 521,000 people unemployed in Canada today, representing more than 5.2 per cent of the labour force. No government can be proud of such a record. I believe the Liberal government is

misleading Canadians in its definition of unemployment and employment and that, equally, it is misrepresenting the employment figures derived from the Dominion Bureau of Statistics in a way which I can only describe as politically calculated reporting and analysing.
I want to substantiate my argument by placing on record part of an article which appeared in the Toronto Telegram recently under the name of Peter C. Whitehouse, a very competent newspaperman. The heading is "Unemployment: An Economic Blight". He writes:
Canada's misleading definition of employment and the equally misleading employment figures derived from it obscure an unconscionable economic blight -the underemployment and unemployment of huge numbers of men over the age of 45.
Those are not my words. They were written by a competent newspaperman, broadcaster and writer whose specialties include science, politics and economics. He goes on to say:
Some of the 450,000 to 500,000 men 45-64 out of work due to age are included in the 140,000 men of 45-64 the government officially classes as "not in the labour force." Some are in the 61,000 classed as unemployed, and some in various groups such as the 15,000 men classed as not working for "miscellaneous reasons."
But it seems definite that the majority are hidden away in the hundreds of thousands of men who work only a few hours or days a week, and yet are falsely classed as "employed."
Mr. Whitehouse deals with the "safe age". He says:
The problem of over-age unemployment isn't one that starts at 45, and that until that age a man is "safe." Age begins to be an obstacle long before 45. Government figures show that 43.6 per cent of all jobs are closed to men of 35, and a study of the newspapers will reveal that many employers set 27 or 28 as their maximum age for hiring.
Forty-five, however, is the watershed, the age at which, if a man leaves his job (or as is so often the case today, his job leaves him) he has virtually no chance of ever working again.
[DOT] (6:10 p.m.)
We stress retraining, and we litter executives' desks with propaganda saying that existing staff and older people should be retrained. We also stress that new immigrants coming into the country must be skilled people trained for specific jobs. Is it not our responsibility first to create a situation where we can provide 50,000 or 500,000 new jobs and then lay emphasis on retraining and on admission to Canada by reason solely of skills? This is one of the reasons why I feel that government policy today in this area is totally inadequate.
February 13, 19S7

When one reads present unemployment statistics one must agree that the Minister of Industry (Mr. Drury) cannot be held blameless. For instance, it was not too long ago that General Motors laid off a number of men for a given period of time. Only last month, January, Chrysler in Windsor laid off some 5,000 workers which resulted in a production decrease of 2,900 cars. Something other than the infamous Canada-U.S. automotive agreement has to be brought to the fore before we can adequately look after the unemployed who are walking the streets of our cities.
Although I am sure the Minister of Finance has read it, I wish to quote an article from the Toronto Telegram, reprinted in the Edmonton Journal of February 8, on a speech delivered by Mr. J. A. Coates, a Toronto lawyer who was a member of the Carter royal commission on taxation. These are some of the suggestions he made, and I commend them to the minister:
A consideration that could give our ailing home building industry a shot in the arm is the deductibility of interest expense on mortgage loans. "It's generally agreed that interest makes up about half the amount of most mortgage payments."
He also suggests:
Exemption of tax on state and municipal bonds. Thus an interest rate of, say, 3 per cent, is equivalent to a 6 per cent coupon for persons in the 50 per cent tax bracket. "This is a real concession to municipalities," he added, "as it cuts borrowing costs quite drastically."
Mr. Coates also dealt with income tax returns in the United States and mentioned that the cost of care of children while the wife works is deductible to varying degrees-the lower the family income the greater the deduction allowable.
Although Mr. Coates did not say that certain recommendations are going to be made in the Carter commission report he did state that the absence of a capital gains tax in Canada is one of the reasons for the absence of risk capital in this country. That portion of the article reads as follows:
"The U.S. principle maintains that there is no capital and no income .. . there is only loss and gain," he explained.
"This brings up the question of which rate will you apply to certain gains, and what deductions will you allow for certain losses."
It is this recognition of possible loss that tends to make the U.S. citizen more venturesome. If he loses money on a venture, he may recoup some of it through tax deductions.
I suggest that part of the money which the Minister of Finance is seeking in order
The Budget-Mr. Robichaud
to buy back Canadian industry could come from the less venturesome Canadians if they were allowed to write off some of their investments in the event of loss.
In conclusion, Mr. Speaker, may I say that this has been one of the longest sessions I have attended since I became a member of parliament in 1958. I am pleased to have had the opportunity to give the government some of my views on problems that need attention, and when another opportunity presents itself I hope to deal with these matters further.


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Speaker:: Before I recognize the Minister of Fisheries (Mr. Robichaud) I would like to bring to the attention of hon. members the business for the adjournment debate this evening; the hon. member for Winnipeg North Centre (Mr. Knowles), Unemployment Insurance-possible increases in ceiling and benefit rates;

the hon. member for Lac-Saint-Jean (Mr. Simard), acceleration of construction of Saguenay-Lake St. John area;

the hon. member for Springfield (Mr. Schreyer), Department of Agriculture-bankruptcy of a livestock commission merchant at the St. Boniface stockyards.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Hon. H. J. Robichaud (Minister of Fisheries):: Mr. Speaker, it was not my intention to participate in this debate until the hon. member for Kings (Mr. McQuaid) invited me last Thursday to explain certain matters which he raised during the course of his remarks and expressed his disappointment that I was not in the house at the time. He referred to a press release which I issued on January 31 dealing with trap limits and licence control in a portion of lobster fishing
February 13, 1967

The Budget-Mr. Robichaud district 7B in Prince Edward Island. The hon. member said he was all in favour of the lobster trap limit and added that he was rather disappointed that the department had not gone all the way, meaning that the trap limit should have been applied to the whole of district 7B instead of being limited to a certain area of Prince Edward Island.
Last year a lobster trap limit was imposed in district 8 for the 1966 fall season, which opened on August 10 and closed on October 10. The district where the trap limit was imposed comprised part of Northumberland Strait, including Kent and Westmorland counties in New Brunswick, part of Cumberland county in Nova Scotia, as well as the county of Prince in Prince Edward Island. We are now assessing the results of this trap limit after a full season's operation. I am sorry the hon. member does not happen to be in his seat at the moment because I am sure he would have liked to listen to my remarks which I hope will clarify what he said on Thursday last.
On January 25 I had a meeting in my office with representations of the P.E.I. Fisheries Federation, including representatives of the fishermen, of the industry and of the co-operative groups. It was at the request of these gentlemen that I agreed to amend the regulations imposing for this year's spring season, a trap limit and some licence control in part of district 7B, in that portion which comprises the area from North Point to East Point, including all of the northeast coast of P.E.I. The gentlemen at that meeting told me this was a good area to make a dividing line. It was agreed that in that particular area the problem was most urgent and required immediate action, if possible.
[DOT] (6:20 p.m.)
I have stated already outside the house that it is our intention to carry out a survey of all lobster fishing areas during the next few months with the intention of introducing some controls and further trap limitations in other areas as soon as feasible. If in my announcement of January 31 I had included, as suggested by the hon. member for Kings, the whole of district 7B, this would have included also the southern part of Queens county and the southeastern part of Kings county in Prince Edward Island as well as part of Cumberland and all of Colchester, Pictou, Antigonish and Inverness counties in Nova Scotia.

I wish to warn the fishermen of all the maritime areas at this time that they can prepare now for further controlling action in respect of lobster fishing in 1968. I have stated before outside the house that we are not ready to impose trap limitations in all districts of the maritime provinces this year but that we wish to review fully the results of the application of the new regulation in district No. 8 last fall.
The present fishing activities are beyond what this resource can stand. The natural reproduction cannot support the accelerated and active fishing which now is taking place. If this most important natural resource is to be saved for future generations of fishermen, we will require the full co-operation of all fishermen presently engaged in the lobster fishing operation.
The hon. member also raised another question which concerns the Department of Fisheries. In 1964, in order to assist the inshore fishermen of the Atlantic provinces, I initiated a policy of federal subsidies for fishing boats from 35 feet to 45 feet in length. At that time I made clear that the purpose of this change was to obtain better boats for inshore fishermen and to help them diversify their operations. I also made it very clear that the purpose of this subsidy was not to increase the number of boats engaging in lobster fishing because this resource was already too extensively fished.
It would not be logical for the Department of Fisheries to approve the trap limitation, curtail licences, and then assist the lobster fishermen by means of subsidies to build additional boats. At the time of the announcement when we defined the purpose of the subsidy we made very clear that it was not the intention that this should apply to boats engaged exclusively in lobster fishing. In April of 1964, before making this announcement, I had a long discussion with representatives of the provincial governments of the Atlantic provinces. I also had a meeting in Charlottetown which was attended by the Minister of Fisheries for Prince Edward Island and his officials. So I do not think it would be fair for the hon. member for Kings to say, as he did, that these fishermen were not told that there would be strings attached to what they had to do to qualify for the subsidy in respect of the construction of boats in the 35 to 45 foot class.
The government of the province of Prince Edward Island and the Fishermen's Loan Board of that province were made well aware
February 13, 1967	COMMONS
of our intention. In fact, in July of 1964, following the meeting which took place at Charlottetown which was followed by a meeting between federal and provincial officials, I issued a press release which read in part as follows:
During the first few years of operations under the new regulations assistance to vessels under 45 feet in length will be limited to approved experimental designs. The Fishermen's Loan Boards in the provinces of New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland, and the Minister of Industry and Commerce in the province of Quebec, will continue the direct administration of the new regulations. Close control over the design and specifications of craft eligible for assistance will be maintained by federal-provincial co-operation. This will include consideration of the numbers to be built each year, and their location, and the co-ordination of their construction with training projects designed to provide skilled manpower for a modern Atlantic fleet.
The hon. member also stated in his remarks that there were no prior consultations with the province of Prince Edward Island in so far as specifications were concerned. I wish to state that there was full consultation with officials of the Prince Edward Island government. In November of 1964 a special meeting took place in Charlottetown between officials of the federal Department of Fisheries and representatives of the Prince Edward Island government, including officials of the Fishermen's Loan Board, to discuss the subsidy program. Further meetings took place, and on July 12, 1965 an agreement was signed with the Fishermen's Loan Board of Prince Edward Island. The agreement was further amended in September of that year. I repeat that this agreement was signed after full discussion with the representatives of the province.
It is true that six applications which were presented by the Fishermen's Loan Board of Prince Edward Island were accepted as submitted because these met the requirements regarding construction standards as specified in the agreement. However, some time later, in the latter part of 1965, a total of 96 applications were received from the Fishermen's Loan Board of Prince Edward Island. It was found that these applications had not been screened according to the agreement with the Fishermen's Loan Board of that province. In December, 1965, just a month or two later, my deputy minister requested an immediate meeting with the deputy minister of fisheries for Prince Edward Island to discuss the problems relating to the subsidies. For reasons unknown to me, the then minister of fisheries for Prince Edward Island refused to agree to
The Budget-Mr. Robichaud such a meeting. It became evident to us that a full inspection of all boats for which applications had been received was necessary if public funds were to be protected. It was then that we made arrangements to have all boats inspected. This applied to all the Atlantic provinces, not only to Prince Edward Island. Immediately, between January and February of 1966, arrangements were made to proceed with this inspection.
After the inspection of these boats was completed, each individual case was discussed and reviewed with representatives of the fisheries department of Prince Edward Island at a meeting which took place in July of last year. It was agreed by officials of the federal Department of Fisheries and representatives of the Prince Edward Island government that a limited number of applications only was acceptable under the established criteria and that a certain number of boats needed some improvement before qualifying for the subsidy. It was also agreed that a larger number did not meet the requirements either of the Prince Edward Island Fishermen's Loan Board or of the federal government. Furthermore, we made clear to the representatives of that province that we were willing to pay the subsidy on the additional cost of the improvements which were required on 15 or more boats for which applications had been received provided the improvements were carried out as required by our agreement with the Fishermen's Loan Board of Prince Edward Island.
The inspection of the boats was made on the basis of the following specific policy and regulation:
-vessel to be of approved experimental design reflecting improvement over conventional types for the size class; vessel to meet provincial construction standards and Department of Transport regulations in so far as the latter apply; vessel to be registered with the Department of Transport; vessel to be adequately outfitted and equipped to show sufficient evidence of diversification capability over and above lobster fishing.
[DOT] (6:30 p.m.)
Therefore I want to make it very clear that the decision not to accept a number of applications was made only after full consultation with the government of the province of Prince Edward Island. We felt it was our responsibility and duty to protect the spending of public funds. Subsidies had to be paid according to established criteria and regulations.
Before I resume my seat I should like to take a minute or two to put on record certain
12978	COMMONS
The Budget-Mr. Robichaud facts relating to a matter which has been of great concern to me in recent years, and which has created quite a bit of interest in Canada and abroad. I refer to the sealing operation in the Gulf of St. Lawrence and on the front.
On December 9 in reply to a question addressed to me by the hon. member for Okana-gan-Revelstoke (Mr. Johnston) I stated in part that-
-we now have evidence that the film taken in 1964 was taken three days before the opening of the season. We have signed declarations by the participants that they were paid to perform certain operations not in accordance with regular practices in sealing.
I was not in a position to go into more details at that time. May I say that I have seen certain programs which were carried on television questioning that statement. Let me make it very clear that the film produced in 1964 by Artek Films Limited of Montreal for the C.B.C. French television network was partly staged. The cameramen participating in that filming admitted that it was filmed three days before the opening of the sealing season. The script was written by one Serge Deyglun who also voiced the script for the film. The same man was the one shown in the film shooting and wounding adult seals.
When I visited lies de la Madeleine last year I took this film along and it was shown at Cap aux Meules, lies de la Madeleine on Monday, March 7. The two cameramen who participated in the original filming were present and they admitted participation. They also admitted having shot a part of the film before the season opened. One of them admitted that he was the individual attempting to cut open a baby seal while it was still wriggling. He admitted that he was so disgusted he could not finish the job and had to ask a local fisherman, who was hired to participate in this operation, to finish the job for him.
Furthermore, a second film which was made in 1965 by Fleury Productions, which was shown on C.B.C television, and a portion of which was shown abroad, was composed of cuttings from the original film made in 1964, and part of an older film made by a former director of the Arctic biological station.
Following the showing of that film at lies de la Madeleine we obtained a sworn declaration from one of the fishermen who was engaged in the operation. I wish to put this declaration on the record, Mr. Speaker. I have it in translated form, and it states this:
I, the undersigned, Gustave A. Poirier, of Le Pre, lies de la Madeleine, declare having been engaged
[Mr. Robichaud.l
DEBATES	February 13, 1967
by a group of photographers, one of whom had a beard, and this was on or about March 3, 1964, to skin an adult seal for a film that they were taking at the time. I also solemnly declare before witnesses that I was asked to tease the said seal and not to use a club but only my knife for this operation. It is well known that in normal practice during a seal operation we use a club or a gaff to kill the seals before we skin them.
Gustave A. Poirier
Witnesses: P. A. Beauchesne Albert Delaney
Taken at Havre-aux-Maisons, March 12, 1966.
This is the type of film or extracts of film shown in Canada and abroad which have been so damaging to the image of this country. I am the first one to admit there have been abuses in seal hunting, but I think it fair to say that since 1964 we have taken a special interest in amending existing regulations in order to enforce methods of killing which are as humane as humanly possible. The new sealing regulations which will be in force this year will go a long way in this regard. I hope that during the next season, which opens on March 7 in the Gulf of St. Lawrence-


Edward Nasserden: Will the minister permit a question? Can he tell us whether action is contemplated against the companies which produced these films?


Hédard-J. Robichaud: Unfortunately, because of the difficulty experienced in obtaining this information, two years passed before we were in a position to prove who the persons involved, were, and because of the regulations and existing laws no action could be taken against those who participated. We are amending these regulations in order to change the situation in respect of further actions of this kind.
Following this year's amendments sealing will be defined and will include all phases of the operation, from hunting to the transportation of pelts. Fisheries officers will be present aboard every sealer operation in the gulf and an officer will be present at every landing point of aircraft and helicopter. These points will be specified in advance, and in this way we will be able to control the quotas which we have imposed. Every hunter will be required to carry a special licence and wear an identification which will be issued with the licence.
Today I sent a circular to the owners of all large vessels operating in the gulf reminding them of their responsibilities and our intention to apply the regulations to the letter of the law. I hope the result will be the prevention of inhumane methods of killing seals.
February 13, 1967	COMMONS
Last year all the S.P.C.A. officials and veterinarians who attended the operations agreed that the most efficient and humane method of killing the seals was with a hardwood club. Some of them brought their own types of weapons, but in the final analysis they agreed that the hardwood club was the best weapon.
This year we have specified that every hunter will have to carry a hardwood club not less than 24 inches nor more than 30 inches in length, and not less than two inches in diameter. This year we have chartered four helicopters to carry the extra fisheries officers to the various ice flows in an attempt to control this operation and enforce the regulations. Many people are inclined to believe that this operation takes place on many fronts. That is not so. It takes place normally on a limited front, because the herds are together drifting with the ice.
During a survey last year 1,250,000 adult seals were spotted on the ice. In designing our regulations we must consider the fact that during periods before and after breeding or whelping these adult seals in the Gulf of St. Lawrence consume 15 pounds of fish each per day. When we are reminded of the quantity of fish that over a million seals would consume in one day, we also have to take into consideration the human aspect of this operation; we have to consider the fishermen from Newfoundland, Magdalen Islands, Prince Edward Island and the north shore of the St. Lawrence who are engaged in this operation. We also have to consider the some 40,000 fishermen from the Atlantic provinces who derive their livelihood from the fishery resources of the Gulf of St. Lawrence.
[DOT] (6:40 p.m.)


Robert Muir: On that point, Mr. Speaker, I wonder whether the minister would accept a question.


Hédard-J. Robichaud: Certainly.


Robert Muir: I understand that there has been some kind of controversy about the value of the sealing industry. Could the minister place on the record any information with regard to that matter? It has been said that the value of this industry is so insignificant that we should completely eliminate the killing of seals.


Hédard-J. Robichaud: I was just coming to that very point, Mr. Speaker. I am glad the hon. member has reminded me of it, but I was just coming to it. This kind of statement has been
The Budget-Mr. Robichaud made by people who have been accepted in this house as being responsible. The statement has been made in connection with the sealing operation, particularly by those who have been insisting upon its complete abolition, that the total value of seals to the sealers and landsmen is in the vicinity of $180,000 a year, and sometimes it has been said it is $300,000 a year.
I have the most recent figures. Last year the total landed value of seals during the seven weeks season was $1,889,121. This was during a period when there was no other type of revenue for the fishermen; they could not engage in fishing operations because of drifting ice. It is a period in which they are given the opportunity to earn a few dollars, perhaps enough to buy fishing gear and equipment for the fishing season which opens a month or two later. With regard to those who have been reported as earning $200 or $300 during the season, I would point out that those engaged in the large sealers as crew members earned from $1,100 to $1,300 during the sealing season last year. This information comes to me from two of the operators. I felt, Mr. Speaker, that these statements should be placed on the record. I want to clearly express my concern for this operation. It is my intention to impose regulations that will prevent any inhumane methods of killing in the operation, but I believe it is my responsibility to allow the sealing operation to continue.
We have also been criticized for not doing anything in the area called the "front" in which foreign sealers operate. We have succeeded in having the Norwegians agree not to fish in the Gulf of St. Lawrence and to allow us to enforce in full the existing regulations. We have also succeeded in having the sealing operation brought under the protocol of the International Convention of the North Atlantic Fisheries. This was achieved at a meeting which took place in Madrid in June of last year. It was agreed that the sealing operation would be accepted under the protocol of ICNAF. This again was followed by a meeting in Copenhagen, I believe, around the middle of October at which further steps were taken in this regard. Agreement was reached on an abstention of hunting during the breeding and whelping season and limited hunting seasons were accepted. This is a step forward. We hope at the next meeting, which will take place in Boston this year, we will be able to get these countries to accept further regulations so we can fully control this operation.
February 13, 1967

The Budget-Mr. Rohichaud


Robert Muir: Mr. Speaker, I wonder whether the minister would accept a question. Before posing my question I wish to commend him on his statement that the regulations will be amended. It is most regrettable that charges could not be laid against those mentally deranged people who carried out the filming and actual killing of seals before the season opened. Because it is only a few hours away from St. Valentine's Day I do not wish to get into either a controversy or a lovefeast between the hon. member for Kings (Mr. MaeQuaid) and the minister. I regret, also, that I was not in the chamber for the whole of the minister's remarks, during which he may have referred to this matter. Has any consideration been given, similar to the program carried out last year, to paying supplementary insurance benefits or supplementary assistance to inshore fishermen who have had misfortune and catch failures?


Hédard-J. Robichaud: No, Mr. Speaker. I think I made a public statement to that effect around January 15 or 17 last. I think the hon. member will agree with me that last year the catch failure was almost general, it was not limited to small isolated communities, and we were able to apply a program of catch failure assistance on a national level; it was applicable all over Canada. This year I have received very few requests from individual fishermen. I admit that there are a few isolated communities in which there has been a catch failure, but this failure has not been comparable with that of last year.
I also reminded some of the individuals who wrote to me, who in some instances had good cases, that this year most of them were able to qualify for assistance under the Canada Assistance Plan, which was not in operation last year. I may add that we are trying to find a solution to this problem. We are trying to come up with a type of legislation that will provide catch failure assistance to fishermen on a national level. We have not arrived at a final conclusion, but we are making progress in this regard.


Robert Muir: Mr. Speaker, has the minister no idea at this point whether something can be done on a regional basis? I pose the question because I have received a number of letters on this subject from men who have suffered bad failures in fishing.


Hédard-J. Robichaud: In reply to the hon. member, Mr. Speaker, I think he will find that

most of the applications are from fishermen whose activities are limited to a fishing period of a few weeks-six, seven or eight weeks. This is the type of application I have received this year. I believe we should give further consideration to this matter, because I do not think you can qualify as a bona fide fisherman a man who expects to make a living in a six weeks operation.


Mr. Speaker:: Order, please. The time allotted to the Minister of Fisheries has expired. I gather that the hon. member for Prince Ed-ward-Lennox has been waiting patiently to participate in the debate.


Mr. A. D. Alkenbrack (Prince Edward-Lennox):: Mr. Speaker, it is my duty to join in the budget debate at this time because there are a number of topics that I wish to discuss. I bring most of them to the attention of the house because of the attitudes of this government, because of the lack of action of the government in some cases, and in other instances because of certain decisions they have made which are adverse to the welfare of the citizens concerned. Last Thursday evening in the division vote taken as a result of the amendment put forward by the official opposition, the government was sustained by only 12 votes. I was pleased to see all the opposition, and some independents, signifying their disapproval of the government's actions and policies.
[DOT] (6:50 p.m.)
The budget, since it represents the policy exemplified by the chief function of government, that of levying taxes, reflects not only the political but the administrative image of those to whom the people have given power. As reflected in the division last Thursday evening, to which I have referred, 60 per cent of the Canadian people do not approve of this government's policies and actions. I wish to commend the hon. member for York East (Mr. Otto) for the speech he made last Wednesday in which he severely criticized the administration for what amounts to its ineptitude, and its paralysis in the face of certain serious national situations. It is obvious that in order not to be too critical of his own party he dubbed it "a government of innocents", "a naive government that fails to face the realities of life".
Mr. Speaker, I submit that there is no room in Canada, big as it is, and even in its centennial year, for a government of this kind. The hon. member for York East is quite correct
February 13, 1967	COMMONS
when he warns his own party and its shaky administration in the following words:
It might be said that with our good intentions we may even be paving the road to oblivion.
I am not using his words to embarrass the hon. member for York East. On the contrary,
I think he is a man who stands on his own feet in this house and who voices strong, well founded and firm opinions.
I know that the people of this country at this time deplore the many failures which have taken place in several of our finance and insurance companies. Many arguments have been advanced here on this topic. I have received letters from people who have recently lost their investments. One of the powers given to the federal government by the British North America Act is the control of banking. That control should extend to all financial institutions. This government has recently taken umbrage as a result of criticism levelled at it in this regard, and when criticized they have iced the puck into the provincial end of the rink. I submit that federal authority over all finance is a prime necessity in this country, and the government should be the first and most important overseer, ensuring the rectitude of all finance across this land.
I have here a letter that I was most shocked to receive in December from lifelong friends, in which they tell me about having lost their entire savings of over $11,000 in the Prudential Finance Corporation fiasco.
I wish to state that in my opinion the federal government is as much responsible as the provincial governments, if not more so, for allowing this financial crime to occur. There is evidence that even as far back as 1956 suspicion as to the soundness of this company had been voiced. The reason that I place blame on the federal government is that they have not had the courage to place the securities exchange rules under federal jurisdiction. The past loose arrangement was probably satisfactory 100 years ago or even 50 years ago, when the stock market did not play such a vital role in our economic life. Since the government is trying to entice Canadians to invest in equity shares it is its prime duty to take over jurisdiction of all stock market operations and investments, similar to the ill-fated one made by my unfortunate friends, and to place them securely under strict regulations, despite the protests
The Budget-Mr. Alkenbrack of any other level of government. In my opinion a government that has not had the courage to do this must accept full blame for consequences, such as the Prudential Finance Corporation disaster and other recent instances.
We have heard some talk of suggested forms of remuneration to these unfortunate investors, but I think that as usual the government has no policy regarding this embarrassing question. It is both ominous and ironic that Canada, with all her apparent prosperity, is experiencing so many bankruptcies and instances of financial irresponsibility and lawlessness. Of course the government has brought a lot of its troubles upon itself because of its reckless method of vote getting in the last couple of elections. If the government, through its policies, will prostitute and weaken federal authority by toadying to the clamour of one province or any group of provinces, it must then seem to be patronizing in part the petulance of all of them.
Since this Liberal government came to power there has been a marked and ominous eroding of federal power at an alarming rate unknown in former years. Part of the reason for this is that the present administration has not earned the confidence of the people. Canadian people as a whole are indifferent to this administration because it has not been either responsive or responsible to their needs. The Liberal party has masqueraded too long as a pretended agent of all things to all people.
We know in ordinary life that we cannot assume such a role successfully. Let us take for example the government's attitude with regard to their own self-espoused policies on bilingualism and biculturalism. I warned the people of Quebec last year in a speech here dealing with the policies of the Prime Minister in this regard. I told them to put no trust in liberalism, and that they would regret the day that they did. You have noticed, Mr. Speaker, that only one month ago the majority of the Liberal convention in Quebec voted to support bilingualism and biculturalism in the rest of Canada, but endorsed unilingual-ism and monoculturalism only and exclusively in Quebec. Is this the way to unite our nation? Mr. Speaker, I suggest that you agree with me when I say no, this is not the way to unite Canada, even in its gala centennial year.
February 13, 1967

The Budget-Mr. Alkenbrack Mr. Speaker: Order, please. Pursuant to a special order of the house this sitting is suspended until eight o'clock.



SITTING SUSPENDED


[Stage Direction]
The house resumed at 8 p.m.
Almonte Douglas Alkenbrack: Mr. Speaker, at the time the house rose for dinner I was about to bring up a matter pertaining to the employment of firefighters in the armed services in my constituency and the unfair manner in which this government advertises for and hires firefighters and other personnel for Department of National Defence installations in Prince Edward county, namely the Mountain View airport and Camp Picton. The competition for the most recent openings for firefighters at Mountain View air station was first opened to Prince Edward county residents only. Later this was changed, and the competition was opened to residents of Trenton, Belleville and other points on the mainland.
The final results of the competition were that none of the applicants from Prince Edward county was considered or hired. The Civil Service Commission sets itself up as being an objective, non-political organization to serve all the people of Canada. However, they too are obviously tainted with Liberalism and, in this case, with the desire of the Minister of National Defence (Mr. Hellyer) to placate some of his disgruntled servicemen at Trenton. Two of the successful applicants for these jobs are air force personnel due for retirement within two or three years.
I have here, Mr. Speaker, two brief letters from two of the unsuccessful applicants, both residents of Prince Edward county, both qualified, and who have been discriminated against by the government and this supine, co-operative Civil Service Commission. The first letter I wish to put on the record reads as follows:
In October 1966 a notice of a position as firefighter, Department of National Defence, for Mountain View, Ontario, was posted. The position was open to Trenton, Belleville and Prince Edward residents. Then in November another notice appeared in the post office for the same position but stated Prince Edward residents only. Then, in December another notice was posted. It was then open to the residents of Prince Edward county, Ontario, Mountain View, Ontario and Trenton, Ontario and locations.
I myself applied on all three notices and qualified. Then on January 9, 1967 a competition was held at 6 RD Trenton. The board consisted of three air

force officers and the civilian C.P.O. As to date I have not received any notice of my standing on competition, but four men have been notified by phone they have the positions.
This is a photostat copy, and it is a little dim in places.
Not one of these men are residents of Prince Edward county. Two are from the town of Trenton and two are air force personnel. These men are up for retirement within two and a half to three years. They applied for release from the service where they are employed as firefighters with the understanding that if they did not get the job at Mountain View they could stay in the service and finish out their service time. One of the servicemen that has been rewarded the position will receive a pension in the neighbourhood of $300 a month, and to add more, these servicemen start at top rate where other men start at the same job at the bottom and take three years to get top rate.
I, myself, am a veteran.
He gives his service number here, but I shall not reveal it.
I joined the army in 1952 and was honourably released in 1955. During my three years I served with Canadian army in Korea for 13 months. My personal feeling is that while Prince Edward has not too much industry, surely when there is an opening of any job class, a man from the county should be given first choice for work to be performed in the county.
Now, the other letter reads as follows:
Air force personnel with two or more years to go on retirement will receive jobs at Mountain View. Two other civilians living north of Trenton will be coming to work at Mountain View. They are volunteer firefighters in their own area. One service person retiring on pension with considerable time on enlistment is to receive one of the jobs. The other service person, not a resident of the county, also has enlisted time remaining but is retiring on full pension to take a job as a firefighter at Mountain View. The civilian personnel receiving jobs as firefighters at Mountain View are not residents in the county but are living at considerable distance from Mountain View and holding jobs in their respective areas. There are a number of applicants from the county who I feel have the adequate education, age and health standards to fill these vacancies.
[DOT] (8:10 p.m.)
These letters are from two of the applicants who felt so hurt by this treatment that they took the trouble to write to me. There are many more applicants from Prince Edward county who feel likewise but have not written. Some of them have phoned me regarding this injustice.
Now the harm has been done. These rejected applicants ask nothing more from this government. They do not expect to be hired for the job, because by this time the government's pets in Trenton have received the nod from officialdom. The government is desperate in its efforts to try to retain electoral
February 13, 1967

support in the town of Trenton and at the Trenton air station. This has been dwindling away and Liberalism is finished at Trenton. A drowning man will grasp at a straw, Mr. Speaker.
In closing this incident 1 would ask the government please to be good enough to show enough manners to write the unsuccessful applicants for this position, who live in Prince Edward county, to thank them for taking the trouble to apply, and give them a reasonable explanation, if possible as to why they were unsuccessful.
Next, Mr. Speaker, I wish to make reference to the dairy industry, which is so important to our part of the country. As a result of representations from the official opposition, and other members in this house, certain legislation was brought about last autumn that implemented a justifiable and deserved improvement in the price of milk paid to the farmers of Canada. I told the house at the time that even that increase, with all its merit, was too little and too late.
The rapid escalation of all farm overhead and of the price of all the things that the farmer and milk producer has to buy has wiped out the economic benefits of the last increase in the federal subsidy. The Minister of Agriculture (Mr. Greene) has said that milk producers must look elsewhere than to government for any further benefits, or for any further economic stabilization of their industry. I am sure you will agree with me, Mr. Speaker, that such a statement is far too final and inadequate. It is a statement that ill becomes a minister in whose authority rests the economic and physical welfare of such a great industry as the milk producing industry.
What the minister has said in effect reveals his thinking concerning this problem. It is this: "Don't bother me any more. I gave you $4 and some odd cents per hundred for milk. You should now be satisfied. I am not a farmer, but as an Ottawa Valley lawyer I should know what is sufficient and good for you."
I am still quoting the obvious thoughts of the minister, Mr. Speaker. He must be saying to himself: "Now look somewhere else. Look to the markets for any further benefits that might save you from bankruptcy."
It is now common knowledge, Mr. Speaker, that every year, right across this country farmers are turning away from the production of milk at an alarming rate. Some 2,000 sold out their herds and quit last year in the province of Ontario alone. If this trend and

The Budget-Mr. Alkenbrack the lack of interest now shown by the Minister of Agriculture continues, one of these mornings he, and all the milk consumers for that matter, will open the front door and there will be no bottle of milk there. Then there will be hell to pay. The government will unjustly blame the farmers for all our troubles.
We read of the great days of the past, the 1880's, the 1890's, of the days when that giant cheese was produced at Perth and shipped to London for a famous world's fair of the past. The milk and cheese production figures of those days were many times what they are now. Moreover the powdered milk industry did not exist at that time. Much of the world population today is starving and we could be feeding them. But no, we sit here in our imagined affluence and opulence and ask a little group of islands, a few dots on the map in the south Pacific ocean, to supply us with butter. How ridiculous can the situation get, Mr. Speaker?
Yes, Mr. Speaker, it is true that in all phases of farm production except in the production of wheat and western grains we have seen better and more productive days. Canada as a nation today in her industrial choice is personified in the hymn:	"Lead Kindly
Light", where the pilgrim says:
I loved the garish day in spite of tears;
Pride ruled my will,
Remembering not past years.
Yes, the gaudy and showy United States standard of living, and its standard of commerce have lured the Canadian people to its luminescence. It has lured us away from our primary industries, one of which is dairy production, and placed us to a large part in the uncertain economy of secondary industries and manufacturing, much of which cannot compete successfully with countries like the United States, Japan and countries in central Europe.
I ask the house this question, Mr. Speaker: Are we too proud to continue to conduct an honourable primary industry when, with more assistance from the very people who must have dairy products, the dairy industry, both the production and the processing parts thereof could flourish and compete with the whole world, as they should, with the production potential that is latent here in Canada?
To go further, Mr. Speaker, I am sorry to state that hand in hand with the lack of interest shown by this government in the dairy industry we have another department, the Department of National Health and
February 13, 1967

The Budget-Mr. Alkenbrack Welfare which, through the Food and Drugs Act is also putting some farmers out of business. As I come to this point, Mr. Speaker, I wish to state-and I am sure that this opinion is shared by every member in the house-that there must be certain standards of purity and cleanliness in all our food products, including milk. And if the bacteria count or the sediment sample of a farmer's milk production exceeds a certain minimum, the milk should be refused access to the market and should not be processed for human consumption.
In this regard I wish to protest strongly against the methods used by the Belleville office of the food and drug division of the Department of National Health and Welfare. They are far too high-handed and autocratic.
I have received many complaints from milk producers in Prince Edward county whom these officials have hailed into court and prosecuted.
[DOT] (8:20 p.m.)
These government inspectors, it seems, do not come into the farm premises, but work a cloak-and-dagger game, a gestapo game along the road. The department allows its inspectors to take samples of milk somewhere along the road or at the factory after the milk leaves the farm. I am told by reliable sources that they do not have the fortitude to go into the farm and present their credentials and take a sample of the milk from the milk can at the farm, as they ought to, but instead have developed a habit of lying in wait along the road somewhere between the farm and the factory. They stop the milk truck and take the samples at a time and place unknown to the producers of the milk. This is nothing but a sneaky, despicable, bureaucratic practice. Although the cans are numbered there is a high chance of error in determining what sample came from what can; I would remind hon. members that the interior of a completely enclosed milk-hauling truck is dark, which does not make identification easy. I strongly recommend to the Minister of National Health and Welfare (Mr. MacEachen) that the present practices of his inspectors in connection with milk sampling and the high-handed manner in which they are treating the farmers of Prince Edward county be stopped.
I wish to point out, Mr. Speaker, that in every case I mention when milk has been condemned by the food and drug office it has subsequently been processed for human consumption. Nevertheless several Prince Edward farmers have been fined $100 each, plus costs, for producing this same low quality


milk, and yet this milk was processed along with the approved milk.
Apparently the samples are sent to Toronto. Bacteria counts show a rapid increase on the way. Are the results obtained in government inspection laboratories always reliable and truthful? I strongly doubt it, under certain circumstances I have mentioned. Samples should be taken at the farm and analysed locally.
One farmer was hauled into court last week at Picton. He obeyed his summons, appeared, and pleaded not guilty. The government then refused to go ahead with the case and had it remanded for a week on the ground that the evidence was not quite in shape. Do these officials think farmers have nothing to do but appear in court periodically for one and the same alleged offence? I would think that whatever evidence the government had would have been ready for presentation, since the Crown had had this evidence since last September 14, the date of the farmer's alleged offence against the act.
I am not saying there is no need for inspection. Certainly, we must have milk inspection, but not by the methods which are now being used. Then again, Mr. Speaker, I submit that a fine of $100 for the production of allegedly inferior milk which the government permits to be processed, and which is used and consumed by the people of Canada-yes, and exported abroad-is too severe a penalty. The money might better be used for the installation of more sanitary conveniences in the milk-producing industry-I refer to bulk tanks, milk transfers and improved stabling conditions. The department should be making grants of up to 40 per cent of the cost of such improvement to farmers who are willing to enter and stay in the milk production industry. In order to build this industry, to guard against its imminent extinction and to assure the attainment of the national stature which it deserves, the government should be giving it the assistance which I have outlined, instead of adding to its local problems.


Mr. Jean-Eudes Dube (Resligouche-Madawaska):: During the debate last Friday, Mr. Speaker, the hon. member for Queens (Mr. Macquarrie) deplored the fact that, unfortunately, there were not as many opportunities to deal with external affairs problems in this house as there should be.
While I do not necessarily agree with his other views, I must also admit that these opportunities are very few indeed and time
February 13, 1987

February 13, 1967
The Budget-Mr. Duh6 and not with the North Atlantic council composed of national representatives who should be seeking an agreement to adopt a common position on a request or a study prepared by the assembly.
Mr. Speaker, our Canadian statesmen never hesitated to show their faith in the Atlantic alliance. I think this is a splendid opportunity to prove that we wish to strengthen the political ties uniting the Atlantic community. If NATO is to survive, it must adapt itself realistically to the present situation and become much more than a defensive military alliance. It must broaden its base and become an economic and political alliance.
I think that all right-thinking people today, all those who truly want peace in the world, are glad to see the gradual lessening of tension between East and West. Without weakening our defensive structure, we should, I think, explore every possibility of improving the political climate between the NATO countries and those of the Warsaw Pact.
Under the circumstances, the conference held last November recommended that the North Atlantic Council take definite steps toward establishing good relations with Eastern Europe on the economic, political and cultural level.
The NATO Assembly is aware that the main task of the Organization is always to ensure that security and integrity are maintained in the free countries of the West. However, it asks that a serious study be made of the advisability of organizing unofficial meetings with the representatives of the assemblies of the Eastern European countries.
In my capacity as Chairman of the Assembly, I intend to communicate to this effect with the competent authorities of the 15 countries of NATO and the eight countries of the Warsaw Pact in order to sound out their reactions.
I hope that parliament and the government of Canada will heartily support such an initiative that can only contribute to easing the international situation and to the peace of the world.
During this conference, several delegates from other countries belonging to the Alliance came to see the Canadian parliamentarians and told us they would be happy to hold the next conference in Canada. Besides, upon his return to Canada, the hon. member for Red Deer (Mr. Thompson) asked, On November 24, a question to that effect of

the Prime Minister (Mr. Pearson). There are many factors in favour of such a proposal.
First, it will be the first time the conference will sit under the name of the North Atlantic Assembly. Considering the fact that Canadian statesmen have greatly contributed to the birth of the NATO concept and the first president of the conference was a Canadian, people naturally look to Canada.
Speaking of the first president, I must avail myself of this opportunity to pay tribute to Senator Wishart Robertson, of Nova Scotia, who has now retired. This gentleman has acquired abroad a very enviable reputation which will outlive him.
The centennial celebrations, especially Expo in Montreal represent a great attraction for the parliamentarians of the other 14 countries of the alliance. It is in 1967 that people from abroad will see us in our most favourable light, and in our finest array. Moreover, Canada has yet to host the conference.
I feel our prestige abroad could only be enhanced by the presence of so distinguished a group during our centennial. Unfortunately, it seems that due to the extra activities in Canada this year, this is practically impossible. Another argument deserves consideration. Holding the first meeting of the assembly in the very headquarters of NATO at Porte Dauphine in Paris will prove the interdependence between the NATO assembly and council.
Let us only hope that the headquarters at Porte Dauphine will still be accessible for the last meeting before the move to Belgium.
I also hope that Canada may be in a position to invite the assembly to sit in Ottawa in the near future.
Our delegates to the conference noticed the excellent reputation our country enjoys abroad. Of course, ours is not the prestige of a great power. It is rather a matter of friendship and respect our allies feel toward a young industrial nation which does not aspire to domination but wishes to contribute toward the development of sound and constructive international relations.
Mr. Speaker, we must continue to make the best of that favourable situation to help others while helping ourselves.
External aid is one of the most powerful instruments of our international policy. I feel that the great majority of Canadians agree that external aid is amply justified from a humanitarian point of view since it answers
February 13, 1967

the basic principle of charity. There is no doubt, either, that external aid is fully justified from an economic point of view since it creates employment at home and paves the way for future markets.
[DOT] (8:40 p.m.)

In his recent book titled "A Samaritan State", Keith Spicer had this to conclude about Canadian external aid:
A meaningful global judgment on the numerous activities of Canada's aid program seems objectively impossible. It is easy enough to assess each kind of aid separately on its own merits. But there exists no universally accepted standard for evaluating a total program; criteria purporting to serve this function are invariably tainted with the narrow prejudices of single disciplines: economics, politics or sociology.
Until adequate methods of measurement are found, general judgment cannot really reach beyond the subjective and impressionistic. Has Canadian aid been "successful" or "effective"? The question is no more manageable than one asking whether a person "likes" a certain country. One can scarcely do more, in a few words, than reply vaguely that Canada's aid, compared with that of other large donors, appears to have been consistently high in quality, and free of spectacular waste or scandal; its administration has grown from makeshift to mediocre, then, since about 1960, to a steady competence tarnished only by a cramping weakness in the field and by understaffing at home. Finally, its operations have enabled Canada to forge with several developing countries relations of intimacy, trust and fairly stable understanding. Any more precise opinions must be sought in detailed criticism of each type of aid taken by itself.
Mr. Spicer has many interesting proposals under the heading "Machinery of Policy Review", one of which I should like to draw to the attention of the government. I quote from page 248:
The crucial arena of policy co-ordination is, of course, the cabinet. A cabinet committee reflecting the whole range of foreign policy instruments would have to include the Prime Minister as chairman, the Secretary of State for External Affairs, the ministers of National Defence, Manpower, Trade and Commerce, Finance and (for cultural diplomacy) the Secretary of State. Attached to this group of ministers would be a permanent interdepartmental committee of high civil servants, sometimes including, for the Secretary of State, representatives of the C.B.C., the National Film Board and the Canada Council. Both these committees would operate in the customary fashion, civil servants advising, ministers deciding.

Mr. Speaker, I have thus made some remarks as regards our foreign policy and external aid.
In closing, I feel duty bound to state that my remarks and suggestions set out to be constructive. I have never had to be ashamed
The Budget-Mr. Douglas of our international role. I simply want this role to keep growing at the same pace as our national development and destiny.


Thomas Clement (Tommy) Douglas: Mr. Speaker, my sole reason for taking part in this debate is to make a few comments regarding the speech made this afternoon by the Secretary of State for External Affairs (Mr. Martin) in connection with the unhappy state of affairs in Viet Nam. I must say that in some ways it was a pathetic speech, because it was so apparent that the minister's heart was not in it. I have had the privilege of knowing the minister for a long time. He and I entered parliament in the same election. I have a very high personal regard for him. I believe him to be a man of peace and deep sensitivity. I am sure there were many things he would have liked to say this afternoon which he did not say.
At least the speech made by the minister was an improvement over some other speeches he has made in connection with Viet Nam, because in the past he has mainly spent his time defending the United States policies in Viet Nam. Today he delivered an apologia for Canada doing nothing. We witnessed today the Secretary of State for External Affairs, like Pontius Pilate of old, publicly washing his hands of all responsibility. The minister today contented himself with avowing the government's good intentions and disavowing any actions which might give effect to those intentions.
The minister told us that Canada could not do very much in this unfortunate situation because we are a member of the International Control Commission, we are a neutral, we are a non-combatant, and the best thing for Canada and for him to do is just not rock the boat. I should like to point out, Mr. Speaker, that in the first place Canada's neutrality has not in the past prevented the minister from defending United States policies in Viet Nam. I can recall when the people who were protesting against the war in Viet Nam were parading in front of the parliament buildings the minister and his aide were handing out mimeographed copies of a brief which was a rehash of the United States white paper. I can remember also some of the speeches the minister made in this house in which he defended the domino theory with as much enthusiasm and eloquence as John Foster Dulles ever managed to muster.
I should like to refer the house to Hansard of April 2, 1965 at page 13108 where the
February 13, 1987

The Budget-Mr. Douglas Secretary of State for External Affairs said this:
Mr. Chairman, Viet Nam is a test case; I suggest that if the North Vietnamese aggression with Chinese connivance succeeds, it will only be a matter of time before the next victim is selected. The issue then concerns the security, integrity and independence of small nations, not only in Asia but all over the world. If the United States were to leave Viet Nam at the present time, what would happen to that country? What would happen to Burma? What would happen to India, a Commonwealth country? What would happen to Malaysia, a Commonwealth country? What would happen to the Philippines, and what would happen to those island countries of Australia and New Zealand? What would be the position of Japan? These are considerations that must be borne in mind by anyone who simplifies the problem in the way that my friend, the hon. member for Kootenay West, has sought to simplify this complicated problem.
Well, Mr. Speaker, that does not sound very neutral. That sounds to me like a very spirited defence of United States intervention in Viet Nam. Nor has our membership in the International Control Commission prevented Canada selling some $300 million worth of war materials a year to the United States, with no assurance whatsoever that it is not being used in an undeclared war upon a small country in southeast Asia.


Mr.   Marlin@Essex East: Would my hon. friend permit me to ask whether he said we were selling $300 million worth of equipment to Viet Nam?


Thomas Clement (Tommy) Douglas: No. I said we are selling to the United States some $300 million worth of war materials, and we have no guarantee at all that none of that material is going to the war in Viet Nam. If the minister could give us the assurance that it is not going there I would be one of the happiest persons in this house. I am sure the minister cannot give that assurance, and I shall be dealing with that matter later, because I think the Canadian government has tried to get that assurance but has been refused.
[DOT] (8:50 p.m.)
Canada is not in a peculiar position in that it is a neutral, a non-combatant or a member of the International Control Commission. Other countries which are neutral have spoken out. The government of France has expressed its opinion on what is happening in Viet Nam. India, which is also a member of the International Control Commission and much more dependant on United States' good will than is Canada, has spoken out. The Prime Minister of India, Indira Gandhi, within the last ten days has made a personal
[Mr. Douglas.!

appeal to President Johnson of the United States to cease the bombing of North Viet Nam. Sweden, which has always prided itself as a neutral, has not only spoken out against the bombing of North Viet Nam, but has halted the shipment of any war materials to the United States until such time as the war in Viet Nam is brought to an end.
Therefore the fact that we are a neutral and a member of the International Control Commission, it seems to me, does not justify for one moment the minister's contention that Canada must be silent, that Canada must be inactive and that Canada instead of speaking out should take refuge in what he calls quiet diplomacy. We are not talking about some dispute over a boundary. When we are discussing the Viet Nam issue we are discussing the greatest moral issue of our time. As I have said before, in the opinion of the members of this party the bombing of North Viet Nam is legally indefensible and morally inexcusable. What is happening in Viet Nam is shocking the conscience of the world more than anything that has happened since Hitler tried to exterminate the Jews in Europe. The bombing not only of military targets but civilians, now proven beyond any shadow of a doubt, has caused millions of people in the world to question this disastrous military conflict. The use of anti-personnel bombs and the use of napalm has made the war in Viet Nam a bloody and barbaric incident that has no equal in our time.
This is why his Holiness Pope Paul VI has spoken out in protest and has pleaded for the cessation of the bombing; this is why the World Council of Churches has pleaded for the cessation of bombing and for negotiations, and this is why the Secretary General of the United Nations, the world's foremost civil servant, has called for a halt to the bombing and the beginning of negotiations. Scientists, university faculties and university students all around the world have pleaded with the government of the United States to stop the bombing in the hope that this will be the first step toward finding a solution to the trouble in Viet Nam.
In today's Globe and Mail there appeared an article entitled "End Ties with NORAD, Student Liberals Urge", which states in part:
A ban on sales of Canadian weapons to the United States for the duration of the Viet Nam war and withdrawal next year from the U.S.-Canada North American Air Defence Command were called for Saturday by the Canadian University Liberal Federation.
February 13, 1967	COMMONS DEBATES
It then states:
The original resolution called for a halt to bombing of North Viet Nam, recognition of the National Liberation Front as a legitimate political group in the south and de-escalation of military operations and gradual withdrawal of U.S. forces.
That is the attitude of university students in Canada who belong to the Liberal party. After reading that report this morning I am not surprised that the minister felt it was incumbent upon him to make a statement this afternoon regarding government policy in respect of Viet Nam. The minister must be aware that Canadians, like people the world over, are aroused by what is happening in this barbaric war, the effect it is having on the people who live there, the consequence that may follow in escalating into a major war, and the long term effect it will have in building up barriers between the oriental people and the people of the western world. People are aroused; Canadians are aroused and I want to tell the minister that it will take more than verbal soporifics and platitudinous declarations to quiet their fears and their concerns.
It is recognized by almost everyone that the first essential step in finding a solution to the Viet Nam situation is to bring about a halt in the bombing of North Viet Nam. This is one obstacle which must be resolved before any progress can be made. This was apparent when the representative of the North Vietnamese government located in Paris made a statement a short time ago which was reported in the Globe and Mail on January 6. The report is from Paris, by Richard E. Mooney, who says:
North Viet Nam's chief diplomatic representative in western Europe said yesterday that if the United States "definitively and unconditionally" stopped bombing his country, the Hanoi Government would "examine and study" U.S. proposals for negotiations.
This is one thing that must be done. Newspaper reports have indicated that as a result of the Warsaw discussions the United States and North Viet Nam came close to agreeing on negotiations. The Globe and Mail of February 2 carries a dispatch from the United Nations which states:
Diplomatic sources said yesterday that the United States and North Viet Nam agreed in early December to hold preliminary peace talks in Warsaw but U.S. bombings near Hanoi broke up the agreement.
The article also states:
They explained that that was because the United States has agreed to talk about some things North Viet Nam was especially interested in-such as the neutralization of South Viet Nam.
The Budget-Mr. Douglas
The discussions on a date first were discouraged, the sources said, when the U.S. bombs hit a Polish-built school for Vietnamese children in the Hanoi area Dec. 2. Still, they proceeded until the December 13-14 raids.
After that the discussions broke off. It is only human nature that it is difficult to get people together around a negotiation table when their homes are being destroyed and their wives and children are being killed by anti-personnel bombs.
The United States government had a similar experience when Mr. Goldberg went to the United Nations, and, with great fanfare, said that President Johnson was prepared to give the Secretary General U Thant, complete carte blanche and an unconditional free hand to work out any kind of agreement he could for negotiations. What happened when U Thant came back with a three-tiered proposal, first that the bombing of North Viet Nam come to a stop, second, that the National Liberation Front be allowed to sit at the bargaining table, and third, that eventually all foreign troops should be withdrawn and the principles of the Geneva accord put into effect? The United States government, which had said that U Thant had a free hand to work out any terms he wanted, gave a firm, negative response to the very first proposal, namely a halt to the bombing of North Viet Nam.
[DOT] (9:00 p.m.)
During the past few days, in the city of London, Premier Kosygin and Prime Minister Wilson have been holding discussions. I am one of those who has been critical of these two countries, Great Britain and the Soviet union, who are joint chairmen of the International Control Commission, for their inactivity. I have expressed this criticism to Mr. Wilson. When our parliamentary delegation was in Moscow in the fall of 1965, I expressed the same view to Mr. Mikoyan, who was then president of the U.S.S.R. I think they could have done more than they have done. But at least in the past few days the representatives of these two great powers have been examining this problem and exploring some means by which negotiations could be commenced.
While these negotiations are still going on, the government of the United States has resumed the bombings that had been temporarily suspended during the lunar new year. If ever there was a piece of bad timing, surely this was it. I can well understand the sadness in the voice of the Secretary of State for External Affairs when he had to tell the
February 13, 19S7

The Budget-Mr. Douglas house this afternoon that the bombing had been resumed. I would imagine that if the discussions of Premier Kosygin and Prime Minister Wilson come to naught, the resumption of the bombings will certainly be a major factor in that result. The minister said this afternoon, in announcing that the bombings had been resumed, that the United States of course is only waiting for some minimal response in order to cease the bombings. I would like to know what kind of minimal response is required to persuade someone to stop doing something they have no right to do. What is the minimal response required? No one has spelled this out.
Some United States spokesmen, such as Dean Rusk, have said, stop the infiltration of men and supplies from the north to the south; but Secretary of Defence McNamara told the defence committee of the United States Congress within the last 10 days that there has been only a trickle of men and supplies since last June going from North to South Viet Nam. The fact is, as Walter Lippmann the dean of American commentators has pointed out, that the United States has never faced up to the major points which Secretary General U Thant placed before it:	first,
whether or not they are prepared to treat with the National Liberation Front, recognizing that they have a right to speak for some of the people of South Viet Nam and, second, whether or not they are prepared to grant the right of self-determination to the people of Viet Nam. Every time the President or one of his spokesmen talks about returning to the principles of the Geneva accord, they say at the same time that South Viet Nam must remain as a sovereign power-which of course is completely contrary to the principles of the Geneva accord, which says that the people of Viet Nam have the right to decide whether South Viet Nam will remain a sovereign power or whether it will be merged with North Viet Nam into one nation.
Walter Lippmann put it well in an article which appeared in the Montreal Gazette of January 12 last, when he said:
The real obstacle to a negotiated peace is a very substantial one. It is whether or not, on any terms that are practicable in the actual world, the United States would evacuate its military positions on the mainland of Southeast Asia.
That puts it in a nutshell. Does the United States eventually intend to withdraw from Southeast Asia, or does it intend to retain a military foothold, not only in Viet Nam where it has spent billions of dollars in military installations, but now in Thailand where it is

building up tremendous military forces? Negotiations will come to naught unless the United States is prepared, in all sincerity, to say that it will abide by the principle of the right of self-determination and allow the Vietnamese people to decide for themselves what government they want and whether they want the North and the South to coalesce and, if the people decide that, have the United States and all other foreign troops withdraw.
I was glad to hear the Secretary of State for External Affairs this afternoon say that the Canadian government is in favour of a return to the principles of the Geneva accord. Yet I would remind the minister that it is not too long ago, about a year and three quarters, that he told us in the external affairs committee that the government of South Viet Nam, because it had not signed the Geneva accord, was not bound by it.


Paul Joseph James Martin: Not legally bound.


Thomas Clement (Tommy) Douglas: Not legally bound. I think this is a preposterous interpretation, since the Republic of France signed, and France was the governing power at that time. But this is exactly the kind of political and legal legerdemain which is making it very difficult to get any negotiations under way.
I want to say that in the opinion of the members of the New Democratic Party the time for quiet diplomacy is over and the time for speaking out is here.


Paul Joseph James Martin: Mr. Speaker,
could I ask my hon. friend a question?


Thomas Clement (Tommy) Douglas: Certainly.


Paul Joseph James Martin: Does this mean that my hon. friend is advocating that Canada should disclose publicly at this time the nature of the conversations that Mr. Ronning had in Hanoi, and the nature of the conversations that the Canadian commissioners had recently in Hanoi?


Thomas Clement (Tommy) Douglas: Mr. Speaker, when the minister spoke I agreed to leave my questions until the minister had finished. I wish he would do the same, because the question he has asked now has no relevance. I am not suggesting to the minister that confidential discussions between diplomatic couriers ought to be made public. What I am saying is, and if the minister had curbed his impatience I would have told him what I mean, that the time has come for the Canadian government to make a clear-cut declaration, as other governments
February 13, 19S7

have done. The minister tells us that the intentions of the Canadian government are pacific. I have no doubt about that. I have no doubt about the minister's own intentions, because he is a man of peace. What I am questioning is their lack of courage in giving voice to their convictions. I am questioning the veil of silence which they have assumed at a time when, on a great moral issue, this government should be speaking out for the people of Canada.
[DOT] (9:10 p.m.)
The minister said this afternoon that if we make any declaration that might be construed as being critical of those taking part in this unhappy war, this would close up channels and would prevent our being effective as a peacemaker. I suggest that we have had quiet diplomacy; it has gone on for several years, and nothing has come of it. Now we have reached the place where the world leaders are speaking out because they recognize that the time has come for action.
This afternoon the minister ridiculed the idea of having a resolution passed by parliament calling for the cessation of the bombing. Why should parliament not pass a resolution, as was suggested by the right hon. Leader of the Opposition. The minister said this would close doors. But it also might open eyes and open ears; it might strengthen the hand of those in the United States and in the United States government who are trying to persuade the United States government to change its policy. It might help those who are endeavouring to have a moderating influence on the hawks in the American administration and I think it would have an effect on the American public.
The American people know that we are a friendly people, that we like the Americans, that we visit back and forth, that we trade with them, and that in our culture, our language and our habits we are probably more like them than any other nation in the world. I think it would give them reason to pause and think, if they found that their friendly neighbour to the north had come to the place where they could no longer remain silent and that we are calling upon them, in the name of justice and humanity, to stop this barbarous bombing of a small undefended people in an undeclared war.
After all it is a rather new theory of liberalism that on moral issues one should not rock the boat. The great star of liberalism was William Ewart Gladstone. When he was

The Budget-Mr. Douglas an old man he came back from retirement to rouse the British people in moral protest against the atrocities of the Turks, and he did rouse them. I see no reason why on a moral issue that is much greater, that affects many more people and is a greater threat to the peace of the world, this government and this parliament should not speak out.
I think that Canada should have the courage at this time to say that we will not sell any armaments to the United States unless we have the assurance that those armaments will not be sent to Viet Nam. My information is that the Canadian government has already appealed to the United States government and asked for assurance that none of the $300 million worth of armaments we sell them each year will go to Viet Nam. My information is that that plea has been rejected, and certainly nothing that the minister said in answer to my question this afternoon-
The Aciing Speaker (Mr. Rinfret): I regret to interrupt the hon. member but the time allotted to his speech has expired.


Thomas Clement (Tommy) Douglas: I wonder if I could have the consent of the house to finish the point I am making.


The Acting Speaker (Mr. Rinfret):: Is there agreement that the hon. member for Burna-by-Coquitlam continue his speech.


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: As I was saying, Mr. Speaker, the answer that the minister gave this afternoon certainly does not convince me that my information is wrong. I think the United States government has refused to assure us that any of the arms we are selling them are not going to Viet Nam. We have been very strict in saying to the French that any uranium we sell to them must not go for military purposes, and I support the government in that. Why do we not do the same with reference to the sale of arms? The minister said that we signed a defence sharing agreement. Mr. Speaker, this is not defence. These are weapons for aggression, and we have a perfect right to say that if weapons which we are selling to the United States for purposes of defence are going to be used in a war of aggression, then we will not sell those weapons to them.
The minister said this afternoon that we received $300 million a year for these arms and that this is a very important item in our
February 13, I9S7

The Budget-Mr. Douglas trade. The Minister of Agriculture emerged from his cave of silence to ask my colleague, the hon. member for Winnipeg North (Mr. Orlikow) if he was suggesting that we abrogate the Canada-United States defence sharing agreement, and if that was the policy of this party.
I will tell the minister the policy of this party. Our policy is that if the United States will not give us a firm commitment that none of these armaments which we are selling to them are going to the war in Viet Nam, then we should be prepared to abrogate that agreement. Because while a loss of $300 million in our trading position would be serious I am not prepared to get $300 million of trade, if it is at the price of the tears of mothers who have lost their children, and if it is to be at the cost of seeing villages annihilated and defenceless people killed.
I will close by saying that I cannot accept the minister's thesis that there is a difference between an individual's convictions and a government's declaration. The minister's thesis this afternoon was that, irrespective of what one may think personally, if one is a member of the government he must not express his opinions publicly. Mr. Speaker, most of the war and bloodshed that we have seen in our lifetime has come because of the cowardly silence of governments in days gone by. I was a member of this house when the Liberal government withdrew Dr. Riddell from the League of Nations because he dared to suggest oil sanctions against Mussolini-he was rocking the boat.
I stood in my place in this house and protested against the sale of copper, scrap iron and nickel to Japan when Japan invaded Manchuria. We were told we must not rock the boat, and this silence, this apathy and inaction has brought us again and again into the maelstrom of war.
1 say that the time has come when a government in a democracy must speak for the people of Canada, and I believe the majority of the people of Canada would want this government to speak out on their behalf, to speak out against what is happening in Viet Nam, to call upon this government to express on behalf of all Canadians our desire that the bombing of North Viet Nam cease, that negotiations begin on the basis of the Geneva agreement, and if we cannot get that assurance that the Canadian government will not sell armaments if they are destined for use in Viet Nam.

Mr. Speaker, every man and woman must live with his or her own conscience, and in this hour of crisis in the world this parliament has to speak out. Someone has said that the modern world is treading a tightrope between Utopia and cremation. Surely we can do our part to see that the world comes down on the side of Utopia and of human survival.


Lloyd Roseville Crouse: 
Thomas Clement (Tommy) Douglas: I think that the United States has done many fine things in giving leadership in the free world. I think of the Marshall plan. I think of the assistance which they gave militarily in Europe when the free world was threatened by Soviet aggression, and when they helped preserve the peace of the world. However, the leadership of the United States in the forties and fifties took place in a world in which we had a great communist, monolithic structure that was in danger of spreading across the world.
What has happened is that the world situation has changed, but United States foreign policy has not changed with it. This communist monolithic structure is fragmented today; the Soviet union and China are sparring with each other; the satellites of the Soviet union are demanding more and more independence; and with the detente in Europe, the danger of military aggression by the eastern powers has greatly receded.
Men like Senator Fulbright and George Kennon, men like the former United States ambassador to Japan, have all been appearing before the foreign relations committee of the United States, pointing out to them that we are facing a new situation. The situation we face today is, how can we mobilize all the nations of the world who want to preserve freedom and to work together for freedom. Taking the position the United States is taking, that of forcing a country to accept a military dictatorship because it may be anticommunist, is only going to incur their antipathy rather than win their friendship.


Bryce Stuart Mackasey: Mr. Speaker, it was my intention to take advantage of this budget debate to speak about the auto pact and some of the problems that have arisen from that auto pact, such as the dislocation of labour. However, having listened to
February 13, 1967

the leader of the New Democratic Party for 35 or 40 minutes, I thought perhaps I would take advantage of the fact that I am the next speaker to express a few comments of my own, not only about the war in Viet Nam but more essentially and more basically on the observations of the leader of one of the more respectable parties of the House of Commons. I suppose I should not have been upset in any way, shape or form by these remarks, because I have been in the house since 1962, nearly five years and six months, and I have yet to hear from the leader of the New Democratic Party at any time, on any subject, any expression of opinion that could be considered in the slightest degree-pro United States. In fact there are times when I think the only thing he believes is good about the United States is the financial contribution that comes from some of the international union headquarters through their Canadian subsidiaries to the N.D.P.
Surely, the hon. member should not be suggesting there is anybody in the House of Commons, regardless of what political philosophy he endorses, whether he be Liberal, Conservative or a member of the New Democratic Party, who in any way endorses or approves of the war in Viet Nam. I believe it was very unfair of the leader of that particular party to cast aspersions on what I thought was an objective, fair and restrained speech by the Secretary of State for External Affairs (Mr. Martin) to a responsible audience in the galleries this afternoon. Perhaps the hon. gentleman, in his anxiety to be the leader of the government some day, believes that this anti-Americanism is a short-cut into the intellectual field, into the university group. I can assure him this is a short range policy. What could be more dangerous to the harmonious relationships that have existed for so long between the United States and Canada than the efforts of the hon. member tonight, which were nothing more than plain demagoguery?


Mr. Prittie:: Will the hon. member permit a question?


Bryce Stuart Mackasey: I would have been glad to answer questions, but the leader of the New Democratic Party expressed the opinion that questions should be left to the end, and I am only following the advice of this very experienced debator.


Robert William Prittie: Anti-American, like Fulbright and Morris.
23033-822J
The Budget-Mr. Mackasey


Bryce Stuart Mackasey: I know the members of that party have nothing to sell but a negative attitude. There is definitely an anti-American bias within certain groups in this country, and the New Democratic Party has based its whole philosophy on an attempt to get all these dissident groups in Canada together in the faint hope that they would all add up to a majority.
I am just as appalled by this war as any member of the New Democratic Party. However, 1 respect the opinion, judgment and experience of men like the present Secretary of State for External Affairs, who has been in this House of Commons for 25 years, and who has a great moral responsibility, since we are one of the few places left in the world today that can speak with equal validity to the two warring factions, North and South Viet Nam. If we were to do what the leader of the New Democratic Party suggested tonight, we would close that door and make peace virtually impossible between North and South Viet Nam.


Mr. McCleave:: The Taiwan trip is already spoken for.


Bryce Stuart Mackasey: There may be fellows like the young, misguided socialist over there who would not-


An hon. Member:: He was a Tory.


Bryce Stuart Mackasey: -but let me say I respect the opinion of the editorial writer of the New York Times on the role of the present Secretary of State for External Affairs, over and above any two or three hour speech by a representative of the New Democratic Party-that is, whenever the members of that party have time to make these speeches, when they are not running out in front of the United States embassy along with a lot of other misguided people.
There are times when I listen to the members of the New Democratic Party that I wonder who our neighbours are. I had a chance to visit Poland this summer and I have seen the difference in attitude in a country located geographically next door to Russia and our own country which is next door to the United States. I am appalled by the fact that not once in five years has any member of that party ever praised the United States in this House of Commons. The only kind word the member said about the United States tonight was in answer to a logical, objective question from a member of the Conservative party.
The leader of the New Democratic Party asked why the Secretary of State for External
February 13, 1957

The Budget-Mr. Mackasey Affairs apologized this afternoon for doing nothing. He did not apologize for doing nothing. Would you say that the efforts of Chester Ronning were nothing? Would you suggest that the visits of the Secretary of State for External Affairs to Poland and Russia were nothing? Is there anybody in this house who doubts for a minute why the minister made these trips, if it were not to find some solution to the war? When the hon. member for Burnaby-Coquitlam outlined so eloquently tonight the damage done by the bombs dropping on the villages of North Viet Nam, we all felt the same degree of horror. However, not once in his hour speech did he show the slightest degree of sympathy for the bombs that were dropping on South Viet Nam, or the infiltration that is taking place, the assassinations and bombings that have been going on in South Viet Nam by the Viet Cong. Are these civilians not entitled to a little bit of sympathy as well?
[DOT] (9:30 p.m.)
The hon. member who has just finished speaking is one of the senior members of the House of Commons. He is one of the most respected voices in Canada in the field of politics. One would have expected him to take advantage of the 40 minutes at his disposal to find some solution to the problem. However, if members look in Hansard tomorrow, they will not find a single objective suggestion by the hon. member for Burnaby-Coquitlam as to how he would handle the situation if he were Secretary of State for External Affairs. He knows of course that the Canadian people will see to it that he is never in that position. Nevertheless, Mr. Speaker, one would have hoped that instead of attacking the minister of external affairs, who is highly respected around the world, he would have tried to offer some concrete solution which would assist the minister and those who, earlier this afternoon and this evening, were sitting in the diplomatic gallery.
I made some reference earlier, Mr. Speaker, to the New York Times. I may respect the opinions of the leader of the New Democratic Party on the virtues of socialism, more than I do the views of the New York Times, but after listening to him this evening I must say I prefer their editorial a little more than his opinions. According to the New York Times for Sunday, February 5-
-Foreign Secretary Paul Martin of Canada has made plain the eagerness of his country to help end the Viet Nam conflict, both through its own mediatory efforts and through its membership in the International Control Commission.
IMr. Mackasey.]
Let me repeat the last part of that sentence -"through its membership in the International Control Commission".


David Orlikow: Where did you get that clipping? You just happened to have it, eh?


Bryce Stuart Mackasey: Mr. Speaker, the idiot fringe has spoken again. I have learned that anything that comes from that part of the house should be ignored. I am not too sure whether it is the influence of their leader that has penetrated to their back benches, or whether the flow has been the other way; but there was a time when the leader of the New Democratic Party would stand up in the House of Commons and speak on external affairs and we would take him seriously. But not tonight.
Canada's role in the Viet Nam affair differs from the role of Sweden and from the role of France. It differs because we are members of the control commission. As such, along with Poland and India we have a responsibility, a moral responsibility, to restrain our statements. After all, if it were only a matter of adopting a resolution in the House of Commons to the effect that bombing in North Viet Nam must cease, and if we thought even for two minutes that passage of such a resolution would stop the bombing, we would sit overtime this evening to pass it.


Robert William Prittie: Then come on, let us try it.


Bryce Stuart Mackasey: The hon. member says: Let us try it. That shows the type of responsibility taken by hon. members in that party. The minister of external affairs spent half an hour this afternoon explaining why we could not do this. As long as we are a member of that particular commission we have to be as neutral as possible. As the New York Times points out, we are one of the few voices still respected by North and South Viet Nam.
The members of the New Democratic Party, in their dislike for the United States, would close one of the few remaining channels of mediation in the world. Do they really think we would be so stupid as to take this course, simply because the leader of the New Democratic Party vents his wrath on the Secretary of State for External Affairs, and once more shows a degree of anti-Americanism? If he had offered one objective suggestion we would have been able to discuss it. The minister would be discussing it with his officials. Who knows where any suggestion coming from the leader of the socialist party may end. But once again, Mr. February 13, 19G7

Speaker, not a single, solitary suggestion was offered.


Mr. Richard:: He has not got any.


Bryce Stuart Mackasey: We all know that. But the members of that party get up and try to pretend that they have the solution to all the problems in Canada. They tell the senior citizens of Canada: We are your saviours. They tell the C.L.C.: We are the voice of labour. They go to the university students and tell them: We are for peace. What are they against, Mr. Speaker? And what are they for? They hope to turn any little area of dessen-sion existing in the country into a parcel of votes.


Some hon. Members:: Oh, oh.


Bryce Stuart Mackasey: Now they are talking among themselves, Mr. Speaker. When they get a little handed back to them they do not like it, and they panic. They get all excited. They have not got their advisers around them from the universities, or their beatniks walking up and down-as they are busy walking up and down in front of the United States embassy tonight.
Why do not some of these hon. members suggest to the North Vietnamese that they co-operate a little more? This afternoon the minister of external affairs pointed out to the House of Commons that there is no doubt that President Johnson of the United States is in a mess. We all agree that this war should never have occurred. They would like to end the war. To the best of my knowledge the Americans are not warmongers by nature, and never have been. If they had we would not be here.
The important thing to remember is that all they have asked of the Viet Cong and the North Vietnamese is for some conciliation, for some indication that they are sincere in their desire to de-escalate the war. There has been a fair period of truce when no bombing in North Viet Nam has taken place. I share the same view as everyone else in this house, including the minister of external affairs, that we wish this pause would continue. But we must remember that American boys are dying, not Canadian, and they have to make the decision. We are trying to be a mediator.
This is a particularly difficult role that Canada has, along with Poland. It is a role that Sweden does not have and that France does not have. President de Gaulle can say what he likes about the United States: He
The Budget-Mr. Mackasey does not have the same responsibility that our Department of External Affairs has.
If we were to follow the suggestion made by the leader of the New Democratic Party tonight, we would pass a resolution which condemns the United States for bombing North Viet Nam. Then the following week the minister would be criticized for not using his good offices to prevent a war and would be wondering why he is no longer welcome among old friends, who could perhaps at the snap of their fingers end the war, at least in so far as the participation of North Viet Nam is concerned.


David Orlikow: Are you looking for some more notes?


Bryce Stuart Mackasey: I have notes, yes, but I do not need any notes to tell the N.D.P. how outdated and outmoded is their philosophy. The Canadian people have told them that since time immemorial, and will continue to tell them. I have notes but I will put them away.
It is about time somebody stood up and let the Canadian people know what the happy little gang in the corner represents-not what they think they represent, but what they do represent. They represent socialism in its worst form. They represent anti-Americanism in its worst form. They had an opportunity to help the farmers of this country, and they helped them until it became an embarrassment, not to the farmers but to that party. So they then threw the farmers out and said they would support labour. Now the marriage to labour is getting a little embarrassing, especially to the New Democratic Party.
In this day and age of modem communication the members of the N.D.P. cannot walk into Quebec and say one thing to rival trade unions, and then go into Ontario and tell another group something else.


Michael Starr: Like the Liberals do.


Bryce Stuart Mackasey: When they start telling the present minister of external affairs what he should be doing in Viet Nam they should at least come up with one constructive suggestion, which would be one more than the leader of the New Democratic Party did this evening in the course of a half hour speech.


An hon. Member:: How about Saskatchewan?
[DOT] (9:40 p.m.)


Bryce Stuart Mackasey: What about Saskatchewan? When the leader of the New Democratic Party
12998	COMMONS
The Budget-Mr. Mackasey ran in Saskatchewan he could not even get elected from that province as a representative to the federal House of Commons. This reflects nothing against the integrity of the hon. gentleman, who is one of the more respected of the senior politicians of this country. It is what he represented-an outmoded way of life which held the province of Saskatchewan back for 20 years.
One has only to check the growth of population in Saskatchewan during the 16 years of socialist rule, and compare it with the growth of population in Manitoba, British Columbia and Alberta. This was not France or England. There were no border points to prevent people going from one province to another. Canadians from the other western provinces could have flowed into Saskatchewan during those 16 Utopian years. Instead, as statistics reveal, the flow was the other way. They could not get out of there fast enough.
When we were talking the other day about potash, and all the benefits that now may come to the province as a result, someone in that party had the audacity to say: We were about to develop potash when we were thrown out of office; we finally got our hands on the money. Which money? I have been doing some research and I find that the money to develop this potash was coming from the United States.
During the recent pipe line debate we heard nothing but anti-American statements from them. We have heard nothing but antiAmerican statements in connection with the Viet Nam crisis. But the fact is that in Saskatchewan people had 16 years of socialism and chucked them out. It is not only the experience in countries like Sweden, with its strong central government, that we must consider in evaluating the socialists. Now they stand in this house and tell the minister of external affairs how he should handle foreign policy.
That is the right of every member of the House of Commons, and no one can take it away from the hon. member for Burnaby-Coquitlam (Mr. Douglas). But one would expect a man of his integrity, a man of his reputation and a man with his years of experience in the political arena to have made a positive, concrete speech offering suggestions to the minister, one which would have been sympathetic to his delicate role, and worthy of the leader of a party in the House of Commons. He did just the opposite.


Mr. Speaker:: It being 9.45 p.m. it is my duty according to section 6 of standing order

DEBATES	February 13, 1967
46 to interrupt these proceedings and forthwith put the question on the main motion.
Is it the pleasure of the house to adopt the motion?


Michael Starr: On division.
Motion (Mr. Sharp) agreed to.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.

[Stage Direction]
Resolved that it is expedient to amend the Old Age Security Act to provide that for the 1967 and subsequent taxation years the maximum old age security tax payable on the taxable income of an individual be increased from one hundred and twenty dollars to two hundred and forty dollars.
Stanley Howard Knowles: May I ask the minister one or two questions about this resolution? Am I correct in recalling his statement that the amount of revenue to be raised as a result of this proposed change would be $135 million a year? I believe that is the figure he gave us on December 19. He indicated that this was a way of raising part of the money necessary to pay the guaranteed income supplement which, in the first year, would cost about $280 million. May I ask the minister this question? Is the $135 million being raised by raising the ceiling on the old age security tax the only part of this new revenue that is going into the old age security fund?


Mitchell William Sharp: Yes, Mr. Chairman, that is right.


Stanley Howard Knowles: Is this not a bit strange? The minister gave us an excuse for this budget the fact that it would be necessary to match the expenditure required to meet the cost of supplementary payments to old age pensioners, but although that expenditure amounts to $280 million he is raising, by way of new taxes which would go into the old age security fund, only $135 million. It seems to me that the minister has not been completely fair to the country and certainly not completely fair to the old age pensioners. He has created the impression that all of the taxes now being raised are made necessary because of the increase in the old age pensions. But he now admits that only $135 million, the return from only one of these taxes, is being used for this purpose. In other words, when we get to the sales tax it will be admitted by the minister that the receipts from that tax are going into general revenue.
February 13, 1967

This is all part of the reason for our complaint about the government's approach to this subject. We recognize that money which is held in an account such as the old age security fund is only figures on the books, but the fact remains that the funds being collected as old age security taxes are in excess of what is being spent for old age pension purposes. We object strongly to this attempt to create the impression that these taxes have to be raised because we are doing something more for our old age pensioners. The minister admits by what he has said just now that he is asking this house to approve of two tax changes, but that in only one case is the money being raised for pension purposes. We think this is quite unfair and quite unnecessary, and certainly when we come to the other resolution, the increase in the sales tax, we shall register our opposition to it.
[DOT] (9:50 p.m.)


Jay Waldo Monteith: Mr. Chairman, I agree completely with what has been said by the hon. member for Winnipeg North Centre. We feel that the public has been completely misled, misled. A section of the press has given the Minister of Finance credit for saying he was going to increase taxes to meet increased payments for old age pensioners. I would like to reiterate what I said during the budget debate, to the effect that the increase in taxes is unnecessary.
There is a surplus in the old age security fund, and expenditure on the old age assistance supplement will not be due for some time yet. As a matter of fact, only today did we receive a sample of the application form which the Minister of National Health and Welfare is sending out to old age pensioners, and earlier that minister admitted payments could not be made until March, or possibly April, because the forms have not all gone out to old age pensioners.
I shall also have something more to say when we come to the second part of the resolution dealing with the Excise Tax Act. We do not think this tax is necessary at this time.


Eric Alfred Winkler: Mr. Chairman, I wish to go back to some of the arguments that were put forward when we were discussing the possibility of increasing old age security payments, and the methods of doing so. I can only say that the funds which are presently available to the government for social security purposes are sufficient without imposing any additional tax on taxpayers. Time and again we told the
Ways and Means
government that the money in the old age security fund could be used to pay the old age pension supplement, which would have obviated all this confusion and the signing of forms by old age pensioners.
Even though the minister did not think it good to increase old age pensions on a flat rate basis, he will find out that the Canadian taxpayers are very much opposed to the terms of the resolution before us. As other speakers have said, we shall also oppose the second part of the resolution.
I also believe that the government is creating a further area of inefficiency. As I mentioned at one stage of the debate, the government now has three agencies for the collecting and distribution of benefits of Canadians. If the government examined these areas of inefficiency I am sure it could effect some savings for a change, instead of placing a further burden on the taxpayers. It is high time the government thought of the taxpayers.


Mitchell William Sharp: Mr. Chairman, may I just comment briefly on one or two things that have been said. Mainly I wish to answer the charge made by the hon. member for Winnipeg North Centre in which he suggested I had misled the house and the public in some way. Perhaps I might be permitted to refer to the speech I made when proposing these measures, as recorded at page 11332 of Hansard for December 19, 1966. On that occasion I said:
Consequently. I am not proposing tonight any general changes in taxation for the purpose either of stimulating or of applying further restraints to the economy. The measures proposed are intended only to counterbalance, financially and economically, the expenditures on the guaranteed income supplement with a small margin to allow for the fact that the payments we make to the old age pensioners are sure to be spent while some of the revenues we get will come out of savings.
Then later on, when I was talking about the old age security tax, as recorded at page 11334 I said:
I am proposing therefore that we act to meet our immediate cash requirements and also to provide properly in our accounts for the burdens which parliament has imposed and is now imposing on the old age security fund during the next four years while the age reduction program is coming fully into effect.
Further, as recorded at page 11336 I said:
The second tax change I am recommending is intended to add to our general revenues to provide the remaining cash required to pay the guaranteed income supplement.

February 13, 1967
Business of the House
The general purpose of these measures was made very plain, Mr. Chairman. I think they are justified, and certainly the present Minister of Finance did not mislead either the house or the country.


Stanley Howard Knowles: Mr. Chairman, I suggest that the Minister of Finance convicts himself by quoting his own words. At each of the places from which he has quoted he has made it clear that he was giving the country the impression that the taxes being collected by the proposed measures were to counterbalance the amounts going out. He told us that the amount going out would be about $280 million and that the amount being collected in new taxes would be about $200 million.
I suggest that from the way the minister put it, and even from the quotations that he has given us tonight, the impression given to the country was that the amounts from these two taxes, $135 million by raising the ceiling on the old age security tax and $155 million from the sales tax, were for old age pension purposes. Now we are told that only $135 million is going into the old age security fund, and the $155 million from the sales tax is going into general funds. In other words, the payments for the $280 million that will be required in the first year for the guaranteed income supplement, will come out of the old age security fund into which only an additional $135 million is being put. The rest of the money is going into general revenue, and I submit that is quite contrary to the impression that the minister has given the country.


Mitchell William Sharp: I cannot accept this, Mr. Chairman, and I think this is an important point. The hon. gentleman has overlooked the fact that we were requiring capital of the order of $280 million in order to meet these expenditures, and that is what we are raising. The question of what goes into the fund and into general revenues is not relevant to the question of how much cash is needed.


The Chairman:: Shall the resolution carry?


Some hon. Members:: Ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, tomorrow the house will be asked to consider item 121 on the order paper, house in committee of the whole on Bill C-261, an act to establish the Canada Deposit Insurance Corporation. Then

we return to the budget resolutions and the legislation consequent upon them. Then we proceed to item 116, house in committee of the whole on the resolution to amend the Small Businesses Loans Act, and then item 129, second reading of the income tax agreements bill.


Michael Starr: I wonder if the house leader could give us an assurance that this will be the order in which we will take these matters up that he has enumerated, and that there will be no change in respect to the sequence.
[DOT] (10:00 p.m.)


George James McIlraith: Does the hon. member mean during the day tomorrow? Yes, Mr. Speaker; this is our intention.


Michael Starr: Is it the intention of the government to announce tomorrow night a different sequence of business for Wednesday and Thursday?


George James McIlraith: That may be the case, depending on what happens in the meantime. I do not foresee any change. We intend to finish the Canada Deposit Insurance Corporation bill and the budget resolutions and legislation consequent thereon. I had added two other bills standing in the name of the Minister of Finance (Mr. Sharp).


Michael Starr: Is that the order which will carry over into Wednesday?


George James McIlraith: I hope that will carry over.


Michael Starr: I hope so too.


George James McIlraith: After that we propose to go to the legislation standing in the name of the President of the Treasury Board having to do with collective bargaining in the civil service, and other related bills.



NATIONAL ANTHEM


Mr. Bernard Pilon (Chambly-Rouville) moved:: That the following members be appointed to represent the house on the special joint committee on the question raised by the resolution concerning the national anthem and the royal anthem, namely: Messrs. Brand, Cantelon, Gauthier, Hymmen, Johnston, Mandziuk, Martin (Timmins), McWilliam, Orange, Prud'homme, Ryan and Tremblay; and
That a message be sent to the Senate to acquaint Their Honours thereof.


[Stage Direction]
Motion agreed to.
February 13, 1967	COMMONS
[English1

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

Stanley Howard Knowles: Mr. Speaker, on Wednesday, February 8, as recorded at page 12797 of Hansard,
I put this question to the Minister of Labour (Mr. Nicholson):
In view of his statement this morning to the Canadian Labour Congress, that he shares the view that the ceiling and the benefit rates under the Unemployment Insurance Act should he raised, can he say whether or not this will be done this year?
The minister's reply was as follows:
Mr. Speaker, as I have already advised the house, this depends on the recommendations that might come from the Unemployment Insurance Commission, to which parliament has delegated certain responsibilities in this field. I can assure the hon. member that so far as the Minister of Labour is concerned, he meant sincerely what he said this morning and my views are well known. I hope we will receive those recommendations shortly.
Mr. Speaker, in a moment I wish to refer to the supplementary question I asked and the answer given to it. First may I say, however-and I say it with some fear and trepidation in view of the fact that the parliamentary secretary who probably will be answering me is in full flight tonight and there is no telling what he will do to me-that I have very seldom heard such a lame excuse for failing to act as the excuse that the Minister of Labour gave me last Wednesday. He said in effect that the government has to wait until it has a recommendation from the Unemployment Insurance Commission before it can raise the ceiling on the benefit rates set out in the Unemployment Insurance Act.
May I point out that these figures, both the ceiling and the benefit rates, are in the statute passed by parliament. Changes have been made from time to time over the years since 1940, but they have always been made by government bills amending the statute. I know of no case when this was done on any other initiative than that of the government itself. It is a lame excuse for the government now to say it cannot act on these matters until it gets a recommendation from a commission which, though provided for by parliament, has been appointed by the government.
Proceedings on Adjournment Motion
The fact of the matter is that it is a period of eight years since the present benefit rates were fixed. They were fixed in 1959 at $27 per week maximum for a single person and $36 per week maximum for an unemployed person with dependants. During that period the Gill committee sat. It made a recommendation about five years ago that these figures should be raised respectively to $36 and $48. If the government wants a recommendation, it has received one from the Gill committee, although even those figures are now out of date.
If the parliamentary secretary will look up the act he will find there is a section in it which gives the governor in council the authority to ask the Unemployment Insurance Commission to ask the advisory committee to state its opinion on various matters including the ceiling and the benefit rates. That does not say that the government cannot bring the matter before parliament, even if the commission or the advisory committee has not made such a recommendation. As I suggest, in my experience in respect of this legislation decisions have been taken by the government and brought before parliament on the government's own responsibility.
I said a moment ago that I should like also to refer to the supplementary question I put to the minister last Wednesday, and his reply. My supplementary question was:
In view of the fact that the act permits the government to ask the commission for recommendations, has the government asked for such recommendation?
The minister's reply was:
Mr. Speaker, I have asked the chief commissioner to let me have his views and those of his fellow commissioners.
Please note that I asked the minister a question based on my reading of the act; had the government asked the commission, or had the governor in council passed an order in council requesting the commission to give its opinion. The minister's reply was that he personally had asked the chief commissioner personally to give him his views and the views of his fellow commissioners. Surely that is not carrying out the intent of the act, namely that there can be an official reference from the governor in council to the Unemployment Insurance Commission. This is based on a chat over a cup of coffee, if you please, which I suggest is quite out of keeping with the terms of the act.
13000	COMMONS DEBATES	February 13. 1967
Proceedings on Adjournment Motion
This is the second time in the last two or three weeks I have raised this question during a late show. I hope I have made my point with the parliamentary secretary, whether I have made one or not with the minister, the department or the government.
This is a matter of government responsibility, and it is a lame excuse indeed to say the government has not had a recommendation from the Unemployment Insurance Commission because there has apparently not been a formal request by order in council. It is eight years since the present maximum rates were set. It is time to increase these rates, and certainly the increases must go even higher than those proposed by the Gill committee. I call upon the government not to use any more excuses but to act on this matter without further delay.
[DOT] (10:10 p.m.)


Bryce Stuart Mackasey: Mr. Speaker, even though I may be in full flight, as the hon. member said, I have been around long enough to know that there is no member in the house that I would turn to with greater rapidity than the present member for Winnipeg North Centre (Mr. Knowles) if I wanted advice on unemployment insurance matters in particular, or labour matters in general. I agree with his interpretation. The government does have the responsibility, and does have the means at its disposal to ask in a formal way the Unemployment Insurance Commission for its recommendations, and indeed has the right to ignore those recommendations and act on its own.
I do not want to express an opinion as to whether the minister's answers were a little abbreviated, but I have taken into consideration the fact that Your Honour, in running this house with great dignity, emphasizes the necessity for all questions being answered in rather concise form. Perhaps the hon. member should have posed his question in such a manner that the minister could have answered in more detail. This points up the wisdom of the observations of Your Honour made many times during the question period.
But again, knowing the source of the question and the tenacity of the questioner, the hon. member can rest assured that not later than first thing in the morning I will try to find out what the government has done, if anything, in a formal capacity. If nothing has been done I will certainly point to the
IMr. Knowles.]
authority of the remarks of the hon. gentleman and see that something is done. I agree with the hon. member, as one who has studied the Gill committee report in some detail as a member of our committee, that many of the recommendations of the Gill committee are long overdue.



HOUSING-ACCELERATION OF CONSTRUCTION IN SAGUENAY-LAKE ST. JOHN AREA

Mr. Alcide Simard (Lac-Sainf-Jean):: Mr. Speaker, as reported on page 12826 of Hansard for February 9, I asked the following question of the Minister of Labour (Mr. Nicholson):
Mr. Speaker, I wish to put a question to the Minister of Labour in connection with his statement to the house last January 30.
Can the minister tell the house whether he will recommend to the Central Mortgage and Housing Corporation any increase in residential housing in Saguenay-Lake St. John?
Mr. Speaker, it is undeniable that there is throughout Canada a very acute housing shortage.
The authorities, federal and provincial, are asked to do something about the problem which comes under their jurisdiction. It seems that the complaints directed at them will get the representatives of the federal and provincial governments, the mayors and other city officials concerned moving.
It is unanimously agreed that adequate housing must be provided for each Canadian family but what has been done to prevent increases in the price of new houses, higher interest rates, higher prices for building materials and tools, higher salaries and higher taxes of all kinds? It is surely the responsibility of the governments and municipalities to cut their expenditures and taxes to bring down prices and interest rates because the higher interest rate on mortgages granted under the National Housing Act can only stimulate a certain kind of construction but not that of low rental housing.
In the realm of the Saguenay-Lake St. John, the crisis is especially due to the absence of salubrious, low-rent housing accommodation. Most industrialized towns in that area are facing the inhuman problem of slums where large families whose head is a small wage-earner are crowded. These families have a right to hope for better housing which would favour their self-achievement. In Chicoutimi, queen of the Saguenay, there is practically
February 13, 1967	COMMONS
no suitable houses at a cost in keeping with the budget of small wage-earners. There would be room for large apartment buildings in that municipality.
In Port Alfred, there is a trend to convert basements into apartments renting from $60 to $90 a month. I wonder whether they meet all the standards of hygiene and safety to which the public is entitled.
In the town of Jonquiere, a survey carried out in September 1966 shows that certain parts of the city are faced with the crucial problem of slums. It reveals that out of 967 houses, 403 are in a state of major disrepair and 123 others are absolutely untenantable.
Mr. Paul Tremblay, town clerk of Alma, county seat of the constitutency I represent here, comments that a housing crisis would surely develop in that community if the 25 units considered unsanitary and housing poor people were condemned.
I ask the minister to tell us what action he intends to take to remedy this serious problem affecting our area.


Bryce Stuart Mackasey: Mr. Speaker, I would like to congratulate the hon. member for Lac Saint-Jean for his concern about housing in his particular area of the province, and I would like to tell him also that, as I am sure he knows, this is essentially a provincial matter. I would like to tell him that last Monday or Tuesday I had the privilege of meeting the minister of municipal affairs for the province of Quebec, Hon. Paul Dozois, who indicated that one of the first pieces of legislation which the Quebec legislature intends to adopt in the very near future is the establishment of a Quebec housing corporation. As the hon. member no doubt is aware, most provinces across Canada have similar corporations dedicated to the eradication of slums, to urban renewal developments and to public housing in general.
I would suggest to the hon. member that the best way of proceeding to obtain what he wants, that is better housing for his district, is first to create a demand on the civic level from the various towns and municipalities which need this help, and second to send a formal indication adopted by the council to the minister of municipal affairs or to the Quebec housing corporation when it is established.
Proceedings on Adjournment Motion
They in turn will assess the necessity of housing in that particular area, and should they feel that it is a logical project the province will then approach Central Mortgage and Housing Corporation here in Ottawa for financial assistance, co-operation, and I hope to seek the benefit of the experience that central mortgage can place at the disposal of the province of Quebec.
I agree with the conclusion of the hon. member that this is indeed one of the main problems facing Canada. I must point out to him, as one Quebecker to another, that this problem is provincial in jurisdiction; but this should be no impediment, particularly in view of the very cordial relations that exist between Quebec and Ottawa.



BANKRUPTCY-WINNIPEG-FAILURE OF LIVESTOCK COMMISSION HOUSE

Edward Richard Schreyer: Mr. Speaker, before the orders of the day I asked the parliamentary secretary to the Minister of Agriculture whether he would look into the matter of the bankruptcy involving a livestock commission merchant in the Winnipeg-St. Boniface stockyard establishment, and find out why it is that for almost a whole year now it has not been possible to make arrangements so that the farmers who delivered their cattle there would be reimbursed for their deliveries. It is my understanding of the matter that the bankruptcy of the livestock commission merchant is further complicated by what seems to be an apparent default on the part of the bonding company, and by allegations that there is some disagreement between the federal departments of agriculture and justice as to what the proper course of action should be.
[DOT] (10:20 p.m.)
In any case, Mr. Speaker, I should like the parliamentary secretary to indicate whether the department is fully apprised of this situation. I should like to know whether any special course of action is to be undertaken. It certainly seems that a special set of circumstances prevail because, as I said, this matter has been in this state for almost 12 months now. I hope there is some specific answer available.


Mr. Bruce S. Beer (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I wish to thank the hon. member for
13002	COMMONS
Proceedings on Adjournment Motion bringing this important matter to the attention of the house. I have had an opportunity, since the question was asked, of checking into it. I am authorized to say on behalf of the Minister of Agriculture that this matter is currently under active consideration or pur-
DEBATES	February 13, 1967
suit by the Canadian Department of Agriculture and the Department of Justice, in close co-operation. We do hope to have a report in the very near future.
Motion agreed to and the house adjourned at 10.25 p.m.

Tuesday, February 14, 1967