1967-12-11

[Stage Direction]
First, second and third reports of special committee on procedure-Mr. MacEachen.
[Note: For text of above reports see today's Votes and Proceedings.]
[DOT] (2:40 p.m.)

Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, I have just returned from western Europe where I attended ministerial meetings of the General Agreement on Tariffs and Trade in Geneva and the Organization for Economic Co-operation and Development in Paris. In addition I had talks with British ministers in London and visited Brussels, the seat of the European Economic Community, and the capitals of the four Scandinavian countries, Sweden, Norway, Denmark and Finland.
I beg leave, Mr. Speaker, to table the communique of the GATT meeting in Geneva held November 22 to November 24.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Robert Henry Winters: Mr. Speaker, Canada was among the leaders at this meeting in calling for a continued and sustained effort by all countries participating in the GATT toward further reduction and removal of barriers to trade. The conference reaffirmed the primary GATT objective of trade liberalization. In the light of the recent successful conclusion of the Kennedy round it was recognized that no new major and comprehensive trade negotiation could be expected in the near future. It was agreed, however, to proceed to prepare for further advance and a full work program for this purpose has been established.
Canada advocated trade liberalization covering both tariff and non-tariff barriers, including negotiations for freer trade in a number of important industrial sectors. On behalf of the government I urged duty free
treatment for primary industrial commodities and the elimination of nuisance duties. While noting the special factors affecting production and trade in agricultural products, I indicated this sector too should be the object of further trade liberalization. I called for a comprehensive program to improve the trading opportunities of the developing countries. Canada also suggested a new look at the possibilities for improved arrangements for east-west trade on a case by case basis.
Although the communique is in the general language characteristic of international meetings with representation from a large number of countries, I can assure hon. members that all of Canada's recommendations are reflected in it. Accordingly it constitutes a substantial step forward.
I also wish to table, Mr. Speaker, the text of the press communique agreed at the conclusion of the meeting of ministers of the Organization for Economic Co-operation and Development held in Paris November 30 to December 1.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Robert Henry Winters: At this meeting the delegation had the benefit of the able assistance of the hon. member for Rosedale, the parliamentary secretary to the Secretary of State for External Affairs (Mr. Macdonald).
The main issue was how to assist the developing countries to increase both their present and potential trade. The O.E.C.D. endorsed at the meeting a certain number of considerations relating to a possible generalized system of temporary trade preferences for the developing countries. These considerations will be presented in February in New Delhi at the second meeting of the United Nations conference for trade and development and will form the basis of a common approach by the developed countries at that meeting.
The details of any preferential arrangement remain to be worked out. I indicated the kinds of conditions and reservations which in our view would need to be observed in developing any such arrangement. I said that Canada's final position with respect to the suggested preferential system would
5246	COMMONS
Report on Trade by Minister depend on the actual arrangements to be developed at the UNCTAD and later negotiating meetings.
The four Scandinavian countries represent an important and active group of markets for Canadian exports. It will be recalled that they negotiated collectively in the Kennedy round and participated together in one pavilion at Expo '67. I am convinced that there are important trading and investment opportunities open to Canadian exporters who are prepared to show initiative and energy in developing sales to these affluent and highly competitive markets. Similarly, these countries are looking for a continuation of their growing exports to Canada.
I am instructing the Department of Trade and Commerce to place increased emphasis on the development of the great potential which I am sure exists for Canadian exports to Scandinavia. Relations between Canada and each of these four countries are warm and friendly. Many factors give us a great community of interest and a healthy flow of valued immigrants to our country. These ties are worth the efforts we expend toward their maintenance and strengthening.
The meetings of the GATT and O.E.C.D. in many ways complemented each other. Taken together they constituted major progress in reaching a consensus among member countries about what the next steps should be in trade policy generally, and more particularly the application to the advancement of the developing countries, for whom it was unanimously agreed much more will have to be done.


Hon. George Hees (Northumberland):: Mr. Speaker, on behalf of the official opposition may I welcome the minister back from his extended trip during which he attended important conferences on behalf of the government. We are glad to hear that once again he has urged that serious consideration be given to developing free trade in primary industrial products and that everything possible be done in world trade to eliminate nuisance duties. We are also interested to hear of his new initiatives in attempting to develop additional trade with the Scandinavian countries. The minister has had an excellent opportunity to sell more Canadian products abroad.
I hope that some time soon the minister will divulge to the house any successes he has had, or any efforts he has made, with regard to obtaining additional markets for Canadian wheat. Our wheat sales have fallen

DEBATES	December II, 1967
off seriously this year, and we realize how important it is to maintain the sales of this important commodity.


Mr. David Lewis (York South):: Mr. Speaker, may I join in welcoming the return of the Minister of Trade and Commerce from his extended trip. In his statement the minister spoke of the general language in which the communique was framed and said such language was characteristic of such communiques. I hope the minister will not mind my saying this, but the same remark could be made about the statement he made. It is in very general language indeed, and does not indicate to us any precise conclusions which may have been arrived at or any precise considerations and problems that were raised.
Naturally everyone in this house is happy to hear that further steps will be taken to liberalize trade, and everyone is happy to hear that the minister is making efforts to increase our trade with the Scandinavian countries and the countries of eastern Europe. Nevertheless I hoped particularly that the minister might say something more concrete with regard to trade with developing countries. As the minister knows, 66 delegations from developing countries met some months ago in Algiers and adopted what is known as the Algiers manifesto. In that manifesto the problems of the developing countries and their needs are carefully and strongly stated.
It is impossible, from what the minister has told us, to comment about conclusions that were reached. I merely emphasize that increasing trade with the developing countries is one of the major needs of our world today. I hope that the developed countries at UNCTAD, in New Delhi next February, will adopt a common position, as the minister's statement says will be the case, and that in their common position the developed countries will determine to be of real assistance to developing countries, instead of being too narrow.


Mr. Real Caouette (Villeneuve):: Mr. Speaker, I do not think the minister's statement surprises anyone, because it is the continuation of economic procedures followed in the past both by the Conservative government and by the present administration.
It is understood that Canada must increase its exports, but it must be kept in mind, as
December 11, 1867	COMMONS
the minister mentioned in his statement, that the representatives of the countries he met seek to promote their export trade to our country. It is obvious that in trying to increase their exports, Canada and those other countries aim to strike a favourable trade balance.
Accompanied by a delegation, the hon. minister visited countries which might possibly buy our excess production. It would have been far easier for him, had he wanted to give himself the trouble, to start with visiting the underdeveloped areas of Canada where he would have found elements capable of absorbing part of our production. Indeed, the domestic market is a neglected market.
Just when the minister goes to Europe to broaden the scope of our exports, and even our imports, restrictions are being imposed on the Canadian people. This is absolutely contrary to common sense. Just when unemployment is increasing in Canada, and in the province of Quebec in particular-55 per cent of the unemployed are found in the city of Montreal-the minister is trying to dispose of our Canadian production. Those are the areas which should benefit from the efficient assistance of the hon. member for Rosedale (Mr. Macdonald), who knows such districts, for there are some in Toronto itself.
So, I do not object to the fact that Canada increases its exports abroad, but the minister should first find a way to distribute our Canadian production on our domestic markets to meet the needs of the Canadian people, then he could consider exporting goods to help the underdeveloped countries throughout the world.
[DOT] (2:50 p.m.)


Mr. Howard  Johnsion@Okanagan-Revel-stoke: We welcome the minister back and congratulate him on his efforts abroad to bolster the results of the Kennedy round, results which I believe will generally be favourable to Canada.
Moving on to the next stage in the very general statement we have been given this afternoon, one finds cause for concern. For example, we are told that means will be found to assist the developing countries to increase their trade and that this is to be done through a system of temporary trade preferences. The minister mentioned the importance of these arrangements being worked out on a mutually acceptable basis among the developing countries. I would point out that our experience in connection
DEBATES	5247
Report on Trade by Minister with the wheat agreement, when we saw what one developed country can do to another in this regard, has made us all the more concerned that future agreements among the developed countries should be on a mutual basis.
We trust that methods of increasing trade with the developing countries, which depend largely upon primary production, should not be paid for at the expense of any single segment of the Canadian economy. The minister and the government must be fully aware of the mood which prevails within Canadian agriculture today, and though I am sure we would all agree on the importance of doing our utmost to increase trade with the developing countries, the cost of such an increase must be borne by every section of the economy, not by one particular group of people in this country.



FOOD AND DRUGS ACT


Hon. Allan J. MacEachen (Minister of National Health and Welfare) moved: the first reading of Bill No. S-21 (from the Senate), to amend the Food and Drugs Act.
Motion agreed to and bill read the first time.



FINANCE


Hon. Mitchell Sharp (Minister of Finance) moved: the first reading of Bill No. S-23 (from the Senate), to amend the Currency, Mint and Exchange Fund Act and the Criminal Code.
Motion agreed to and bill read the first time.



CANADA DEPOSIT INSURANCE CORPORATION ACT


Mitchell William Sharp: the first reading of Bill No. S-24 (from the Senate), to amend the Canada Deposit Insurance Corporation Act.
Motion agreed to and bill read the first time.

December 11, 1967
Questions



NORTHERN ONTARIO PIPE LINE CROWN CORPORATION


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources) moved: the first reading of Bill No. S-29 (from the Senate), to provide for the dissolution of Northern Ontario Pipe Line Crown Corporation.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. Choquelte: 1.	Have any distribution criteria, by province, been set up following the creation of a $300,000,000 fund to ensure rural development within the country?
2.	Will the federal government take into account, in the operation of the rural economic development fund, that a special development fund for the Atlantic provinces has been set up and that the prairie provinces have benefited from a great number of special agricultural measures, and wiU it ensure that the province of Quebec receives a large part of said fund?
3.	Have the SIDBEC authorities asked for assistance from the rural economic development fund in order to build a steel-producing plant at Becancour?
4.	Does the federal government intend making its own feasibility study regarding a steel-producing plant which might be built at Becancour?
5.	Has the federal government held talks with the government of the province of Quebec with a view to setting up an agreement designating the Becancour area as a special development area?
6.	Is the thermo-nuclear plant under construction at Becancour, and which is financed by the federal government, linked in some way to the project of having a steel-producing plant built in the same area?
7.	To date, what are the obligations undertaken by the federal government under the Agricultural Rehabilitation and Development Act fund, and what areas will benefit from this?
8.	How many requests for aid from the Agricultural Rehabilitation and Development Act fund were made to the federal government, how many were rejected, and how many were taken into consideration?


Hon. Judy V. LaMarsh (Secretary of State):: I am informed by the Departments of Forestry and Rural Development, Energy, Mines and Resources and Industry as follows: 1. No.

2.	The fund for rural economic development does not take the place of the federal departments resources and activities. In the formulation of any plan under the Fund for Rural Economic Development Act, the already existing federal programs are taken into account and the resources of the fund are used in providing a complement when required, to the normal activities of the federal departments and agencies, some of which are already active in the western provinces and the maritime provinces. The discussions in progress with the government of Quebec should soon allow the signing of an agreement with regard to the lower St. Lawrence, Gaspe and Magdalen islands area.
3.	No.
4.	No.
5.	No.
6.	No.
7.	Three federal-provincial agreements on rural development have been signed under the Fund for Rural Economic Development Act. They concern the areas of northeast New Brunswick, Mactaquac (New Brunswick) and Interlake (Manitoba). The commitments of the fund for these three areas are as follows: Northeast New Brunswick: $31,461,000; Interlake (Manitoba): $27,606,000; Mactaquac (New Brunswick): $9,433,000.
8.	Studies and discussions are in progress concerning Prince Edward Island and some areas of Quebec, Nova Scotia and Newfoundland. No request has been rejected up to now.



INCREASE IN MONEY SUPPLY

['1. $70,000.\n2.\tNil; First statement expected by mid December.\n3.\tThe proposed study is designed to assist the department in defining a government wide consumer affairs program and in formulating its own programs, organization and planning, budgeting and information systems within that framework.\n4.\tOperations Research Incorporated were retained as consultants.\n5.\tNo.\n(Mr. Cadieux (Terrebonne).]\n6.\tN/A\n7.\tNo.\n8.\tN/A\n9.\tJuly 15, 1968.\n10.\tThe information of a consumer affairs branch was not anticipated when main estimates for the department were prepared in 1966; therefore funds were not provided in the main estimates for any organization or work connected with the formation of the consumer affairs branch.']
Mitchell William Sharp: There is no single definition of "the money supply". It can be defined and calculated in a number of different ways depending on the purpose for which the statistics are required.
Canadian dollar deposits at chartered banks make up an important part of any money supply series but there are various categories of such deposits which have different characteristics. There are demand deposits on which no interest is paid, chequable and non-chequ-able personal savings deposits, notice and term
December 11, 1967



deposits held by corporations and others which have varying maturities and carry substantial interest rates and finally at the end of this spectrum, open market paper issued by the banks which is payable to bearer. These different types of claims on banks are held by various classes of holders to meet different kinds of needs. Because of this fact, different classes of deposits are relevant to the consideration of different aspects of economic and financial developments.
The trends of the various types of chartered banks' deposit liabilities are also affected by changes in the conditions and degree of competition for funds between banks and other financial institutions. Variation due to changes of this nature would be removed in money supply series defined to include not only claims on banks but also liquid claims on financial institutions such as trust and loan companies or Caisses Populaires and credit unions.
Apart from deposits and other very liquid claims denominated in Canadian dollars, Canadians also hold a considerable volume of liquid assets payable in foreign cur-
Questions
rency which from some points of view are part of money supply. The most important of these are the chartered banks' "swapped" deposits denominated in a foreign currency for which the payment at maturity in Canadian dollars is covered by a forward exchange contract and which are therefore closely equivalent to the banks' term deposits in Canadian dollars.
The following money supply measures can be calculated from data which become available on an up-to-date basis and include those measures most commonly used at the present time.
A.	Coin and Bank of Canada notes in the hands of the public plus Canadian dollar demand deposits at the chartered banks.
B.	As in A above, plus all other Canadian dollar deposits at the chartered banks.
C.	As in B above, but excluding deposits of the government of Canada.
D.	As in C above, plus "swapped" foreign currency deposits at the chartered banks.
The figures requested are given below on each of these definitions.
(Monthly averages of Wednesday figures)
		$ millions				Per cent		
	A	B	C	D	A	B	C	D
Change from:								
Dec. 1962 to Dec. 1963..	219	1,380	959	1,018	3.6	8.9	6.4	6.6Dec. 1963 to Dec. 1964..	398	978	1,116	1,428	6.3	5.8	7.3	8.7Dec. 1964 to Dec. 1965..	436	2,129	2,042	1,850	6.5	11.9	12.0	10.4Dec. 1965 to Dec. 1966..	559	1,328	1,235	1,489	7.8	6.6	6.5	7.6Dec. 1966 to Oct. 1967..	543	2,608	3,433	3,316	7.1	12.2	16.9	15.7
8 millions
	A	B	C	D
Absolute level in:				
Dec. 1963					16,340
Oct. 1967					
				

December 11, 1967
Questions



Mr. Gregoire: 1.	What are the names of all parties who submitted tenders for the cleaning services for the new air terminal at Bagotville?
2.	What amount did each one submit?
3.	Who was awarded the contract?


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: 1 and 2. While the majority of airport terminal buildings throughout Canada are operated by the Department of Transport, the air terminal building at Bagotville is operated by Air Canada and it is not the practice of that company to disclose the names of firms or persons submitting tenders, or information concerning
proposals received. Seven firms submitted bids.
3.	Peintures Saguenay of Chicoutimi.


OTTAWA-GREEN BELT PROPERTIES NOT ACQUIRED
Mr. Bell (Carleton): 1.	Are there now any properties within the greenbelt In the national capital region which have not been acquired by the National Capital Commission by purchase or expropriation with compensation paid?
2.	If so, where are these properties located and who is the owner in each case?
3.	In each case, what is delaying final settlement?


Hon. G. J. Mcllraiih (Minister of Public Works):: 1. There are 34 properties to be settled in the green belt.
2.	and 3. 2(1) Each of the following properties has been expropriated and the negotiation has been referred to the Department of Justice for the filing of an information in the Exchequer Court.
Former owner	Location
Griffin, John M.
Est. of Dr. Herbert B. Moffatt (Silver Spring's Farm)
Sheahan, Clarence M.
Marcus, Benjamin (In trust)
Pyrofax Gas Ltd.
H. J. McFarland Construction Co. Ltd. Independent Coal & Lumber Co. Ltd.
Levine, Isaac
Central Salvage Co. Ltd.
Cyrville Sand Co.
Macartney, H. Allen
Heafey, Leonard
Heron, William A.
Colegate, Robert G.
Dowler, Bert H.
Andrews, Mrs. Rosa
Boyd, J. B.
Lefebvre, Anna
Lefebvre, Guay
Lot 35 & pt. of Lot 36, Township of Nepean. Pts. of Lots 14 & 15, Con. 2, O.F.,
Township of Nepean.
Pt. Lot 34, Con. 3, R.F., Township of Nepean. Pt. Lot 35, Con. 5, R.F., Township of Nepean.
Pt. Lot 35, Con. 5, R.F., Township of Nepean. Pt. Lot 34, Con. 6, R.F., Township of Nepean. Pt. Lot 12, Con. 1, O.F.,
Township of Gloucester.
Pt. Lot 17, Con. 3, O.F.,
Township of Gloucester.
Pt. Lot 17, Con. 3, O.F.,
Township of Gloucester.
Pt. Lot 19, Con. 3, O.F.,
Township of Gloucester.
Pts. Lot 16, Con. 5, O.F.,
Township of Gloucester.
Pts. Lot 20, Con. 5, O.F.,
Township of Gloucester.
Pt. Lot 6, Con. 3, R.F.,
Township of Gloucester.
Pts. of Lts. 7 & 8, Con. 3, R.F.,
Township of Gloucester.
Pt. of Lots 7 & 8, Con. 3, R.F.,
Township of Gloucester.
Pt. Lot 7, Con. 4, R.F.,
Township of Gloucester.
Pt. Lot 9, Con. 4, R.F.,
Township of Gloucester.
Pts. of Lot 12, Con. 4, R.F.,
Township of Gloucester.
Pt. of Ni Lot 12, Con. 4, R.F.,
Township of Gloucester.

December 11, 1967

Former owner
Read, John Dillon, Thomas F.
Sherman, William Chenery, Albert
2(2) The following properties have been final settlement.
Former owner Bruce, R. A. S.
O'Connor, Walter
Munro, Garnet
Bergin, William J.
Goodfellow, Norman E. Jr.
John J. Florence Realty
Cloutier, Aristide and Lorenzo
Questions
Location
Pt. Lot 2, Con. 6, R.F.,
Township of Gloucester.
Lots 1, 2, 4 to 7 incl. 10 to 21 inch, 23 to 49 incl. & 51 to 56 incl., Block A, Pt. Block "B" & Block "C", Reg. Plan 711, R.F., Township of Gloucester.
Lot 8, Reg. Plan 711, R.F.,
Township of Gloucester.
Lot 50, Reg. Plan 711, R.F.,
Township of Gloucester.
expropriated and are under negotiation for Location
Pt. SJ Lot 34, Con. 3, R.F.,
Township of Nepean.
Pts. of Lot 9, Con. 1, O.F.,
Township of Gloucester.
Pt. of Lot 19, Con. 2, & Pt. of Lot 19, Con. 3,
O.F., Township of Gloucester.
Pt. Lot 23, Con. A., R.F.,
Township of Nepean.
Pt. Lot 30, Con. 3, R.F.,
Township of Nepean.
Pt. of Lots 32 & 33, Con. 5, R.F.,
Township of Nepean.
Pt. Lot 13, Con. 3, O.F.,
Township of Gloucester.
2(3) The following properties have been expropriated, but final settlement is delayed because the former owner or heirs have not been located.
Former owner	Location
Kustaski, Mona	Pt. Lot 27, Con. 5, R.F.,
Township of Nepean.
Wadsworth, John	Pt. Lot 13, Con. 3, O.F.,
Township of Gloucester.
2(4) The following property has been expropriated, but final settlement has been delayed pending a court decision as to the amount of compensation.
Former owner	Location
Munro, Harold	Pt. Lot 20, Con. 3, O.F.,
Township of Gloucester.
2(5) The following property has been expropriated, but final settlement has been delayed pending settlement of an Assignment of Bankruptcy.
Former owner	Location
Koffman Truck Rentals	Pt. Lot 19, Con. A., R.F.,
Township of Nepean.
2(6) In addition, there are schools, churches, and federal installations within the green belt. Some of the schools and churches were not expropriated and are acquired only as they are offered for sale by the authorities involved.

December 11, 1967
Questions


PUBLIC WORKS EXPENDITURES IN CERTAIN QUEBEC COUNTIES
Mr. Isabelle: 1.	How much money did the Department of Public Works spend in each of the counties of Gatineau, Pontiac, Hull and Labelle for various works during the last five years, and what works were involved?
2.	How many tourist wharves and launching ramps were built during the last five years in each of the above counties?


George James McIlraith: 1. County of Gatineau: Total expenditure, $179,603.00. Projects: Aylmer East -Addition to Post Office, repairs and maintenance. Bouchette-Construction of new Post Office, repairs and maintenance. Gracefield- Repairs and maintenance of Post Office building. Grand Remous-Construction of new Post Office and minor works. Harrington Lake- Construction of two wharves. Lac des Isles- Construction of new Post Office and minor works. Lac Ste-Marie-Construction of new Post Office and minor works. Low-Construction of new Post Office. Maniwaki-Repairs and maintenance of Post Office building. Messines-Construction of new Post Office, repairs and maintenance. Montcerf-Construction of new Post Office, repairs and maintenance. Notre-Dame du Laus-Construction of new Post Office. Notre-Dame de Pont-main-Wharf reconstruction. Val des Bois- Construction of new Post Office.
County of Pontiac:	Total expenditure,
$130,779.00. Projects:	Campbell's Bay-Repairs and maintenance of Post Office building. Chapeau-Construction of new Post Office. Des Joachims-Construction of wharf and launching ramp. Fort Coulonge-Repairs and maintenance of Post Office building. Reconstruction of Ferry wharf. Fort William- Construction of launching ramp. Guigues- Construction of new Post Office and minor works. Lac Coulonge-Wharf reconstruction. Lorrainville-Repairs and maintenance of Post Office building. Notre-Dame du Nord- Construction of new Federal building, repairs and maintenance. Otter Lake-Construction of wharf and launching ramp. Quyon-Repairs and maintenance of Post Office building. Construction of wharf and launching ramp. Shawville-Repairs and maintenance of Post Office building. Temis-kaming-Repairs and maintenance of Post Office building. Ville-Marie-Repairs and maintenance of Post Office building.
County of Hull: Total expenditure, $3,086,769.00. Projects: Anger-Construction of new

Post Office and minor works. Buckingham- Alterations to Post Office building, painting, repairs and maintenance. Gatineau-Painting of Post Office building, repairs and maintenance. Hull-Animal Diseases Research Institute, alterations to incinerator and treatment tank. Canadian Government Printing Bureau, alterations for Department of National Defence Quality Assurance Branch, new Data Processing Centre. Masson- Painting of Post Office building, stone work, and minor works. Pointe-Gatineau-Construction of new Post Office building and minor works.
County of Labelle: Total expenditure, $279,746.00. Projects:	Chute St-Philippe-Construction of wharf and launching ramp. Ferme-Neuve-Painting of Post Office building and maintenance. Lac Caribou-Construction of launching ramp. Lac Chaud- Construction of launching ramp. Lac Nomi-ningue-Construction of launching ramp. Lac Ste-Marie-Construction of launching ramp. Lac Simon-Reconstruction of wharf and launching ramp. Lac St-Paul-Construction of launching ramp. Montebello-Repairs and maintenance of Post Office building. Mont-Laurier-Conversion of heating plant, painting, repairs and maintenance of Federal building. Notre-Dame de la Paix-Construction of new Post Office building and minor works. Papineauville-Construction of new Post Office building, repairs and maintenance. Plaisance-Construction of new Post Office building and minor works. Ripon-Construction of new Post Office building and minor works. St-Andre Avellin-Construction of new Post Office building and minor works. Ste-Anne du Lac-Construction of new Post Office building, repairs and maintenance. Reconstruction of wharf. Thurso- Repairs and maintenance of Post Office building.
2.	The number of tourist wharves and launching ramps constructed in the last five years by the Department of Public Works in the following constituencies:	Gatineau, 3;
Pontiac, 6; Hull, Nil; Labelle, 7.


PENSIONS OF RETIRED CIVIL SERVANTS
Mr. Knowles: 1.	How many retired federal civil servants are receiving pensions of amounts within each of the following brackets:	(a) less than $20 per month
(b)	$20 to $29.99 per month (c) $30 to $39.99 per month (d) $40 to $49.99 per month (e) $50 to $59.99 per month (f) $60 to $69.99 per month (g) $70 to $79.99 per month (h) $80 to $89.99 per month (i) $90 to $99.99 per month (j) $100 to $149.99 per
December 11, 1967

month (k) $150 to $199.99 per month (1) $200 to $249.99 per month (m) $250 to $299.99 per month (n) $300 per month and over?
2.	How many widows of civil servants or of retired civil servants are receiving pensions of amounts within each of the brackets indicated in the above question?
3.	What is the number of retired civil servants and also the number of widows of civil servants or of retired civil servants presently residing in each province?
(a)	Less than	$ 20.00	per month	(b)	$ 20.00	to	$ 29.99	tt	ft(c)	$ 30.00	to	$ 39.99	ft	ft(d)	$ 40.00	to	$ 49.99	ft	ft(e)	$ 50.00	to	$ 59.99	ft	ft(f)	$ 60.00	to	$ 69.99	ft	ft(g>	$ 70.00	to	$ 79.99	ft	*(h)	$ 80.00	to	$ 89.99	ft	ft(i)	$ 90.00	to	$ 99.99	ft	ft(j)	$100.00	to	$149.99	ft	ft(k)	$150.00	to	$199.99	ft	ft(1)	$200.00	to	$249.99	ft	ft(m) $250.00	to	$299.99	ft	ft(n)	$300.00	and over	ft	tt3.	Number of retired civil servants and widows residing in each province:Retired civil servants	WidowsNewfoundland	360	133Prince Edward Island	189	94Nova Scotia	1512	792New Brunswick	911	502Quebec	5674	2851Ontario	14009	7067Manitoba	1497	658Saskatchewan	999	429Alberta	1742	807British Columbia	4790	2245Territories	51	11Outside Canada	565	366Total	32299	159554. Number of	orphans of federal civil	
servants and average amount per annum: 67, $187.
Questions
4.	In respect of how many orphans of federal civil servants are pensions being paid and what is the average amount thereof?


Mitchell William Sharp: 1 and 2. Number of retired civil servants and widows receiving superannuation allowances of amounts within each of the following brackets:
Retired	
civil servants	Widows
462	1725
1194	1994
1899	1922
1898	1671
1908	1507
1873	1365
1735	1251
1596	879
1503	717
6251	2067
4284	545
3070	162
1934	81
2692	69
Total 32299	15955
	
PENSIONS OF RETIRED	MOUNTED POLICE


Mr. Knowles: 1.	How many retired Royal Canadian Mounted
Police personnel are receiving pensions of amounts within each of the following brackets:	(a) less
than $20 per month (b) $20 to $29.99 per month
(c)	$30 to $39.99 per month (d) $40 to $49.99 per month (e) $50 to $59.99 per month (f) $60 to $69 99 per month (g) $70 to $79.99 per month (h) $80 to $89.99 per month (i) $90 to $99.99 per month (j) $100 to $149.99 per month (k) $150 to $199.90 per month (1) $200 to $249.99 per month (m) $250 to $299.99 per month (n) $300 per month and over?
2.	How many widows of R.C.M.P. personnel or of retired R.C.M.P. personnel are receiving pensions of amounts within each of the brackets indicated in the above question?
3.	What is the number of retired R.C.M.P. personnel and also the number of widows of R.C M P personnel or of retired R.C.M.P. personnel presently residing in each province?
4.	In respect of how many orphans of R.C.M.P. personnel are pensions being paid and what is the average amount thereof?


Hon. L. T. Pennell (Solicitor General):: 1.
(a), Nil; (b), 2; (c), 5; (d), 9; (e), 21; (f), 41; (g), 54; (h), 45; (i), 58; (j), 405; (k), 400; (1), 335; (m), 267; (n), 522.

December 11, 1967
Questions
2. (a), 16; (b), 11; (c), 10; (d), 19; (e), 17; (f), 27; (g), 9; (h), 8; (i), 12; (j), 51; (k), 27; (1), 10; (m), 5; (n), 3.
3. Province	Retired Personnel	WidowsNewfoundland	28	2Prince Edward Island	16	NilNova Scotia	183	9New Brunswick	77	7Quebec	169	9Ontario	473	58Manitoba	114	9Saskatchewan	133	7Alberta	303	29British Columbia	570	85Northwest Territories	13	NilOutside Canada	85	104. ioo-Average $24.48 per month.


R.C.M.P. SUPERANNUATION ACCOUNT
Mr. Knowles: 1.	What was the total amount of money in the
Royal	Canadian	Mounted	Police	Superannuation
Account as at (a) March 31, 1964 (b) March 31, 1965 (c) March 31, 1966 (d) March 31, 1967?
2.	What rate of interest does the government pay for the use of this money?
3.	What amount of interest was credited to the
Royal	Canadian	Mounted	Police	SuperannuationAccount during the fiscal years ending (a) March 31, 1964	(b) March	31,	1965	(c)	March	31,	1966(d)	March 31, 1967?4.	What was the total amount paid out of theRoyal	Canadian	Mounted	Police	SuperannuationAccount during the fiscal years ending (a) March 31, 1964	(b) March	31,	1965	(c)	March	31,	1966
(d) March 31, 1967?


Lawrence T. Pennell: 1.
(a) March 31st, 1964, $45,986,906.99;	(b)
March 31st, 1965, $57,706,948.59; (c) March 31st,	1966, $65,411,253.45; (d)	March 31st,
1967, $85,081,315.27.
2.	Interest is credited to the superannuation account on the last day of each quarter in each fiscal year, namely, on the 30th day of June, on the 30th day of September, on the 31st day of December and on the 31st day of March, respectively, calculated at the rate of one per cent of the balance to the credit of the account on the last day of the preceding quarter.
3.	(a) March 31st, 1964, $1,576,978.32; (b) March 31st, 1965, $1,929,488.33; (c) March 31st, 1966, $2,420,759.75; (d) March 31st, 1967, $2,841,067.52.

4.	(a) March 31st, 1964, $573,195.38; (b) March 31st, 1965, $666,752.98; (c) March 31st, 1966,	$848,113.32;	(d) March 31st,	1967,


$972,646.84. ICEBREAKING IN ST. LAWRENCE RIVER
Mr. Crouse: 1.	What are the regulations covering icebreaking in the St. Lawrence river and the gulf of St. Lawrence area?
2.	Are they the same as last year?
3.	How many icebreakers will be detailed this winter for service in this area?
4.	What are the names of these ships?
5.	How many men are employed on these ships?
6.	What is the estimated cost of providing this service?


James Allen (Jim) Byrne: 1 and 2. As in previous years the main fleet of icebreakers will operate in the gulf of St. Lawrence for the support of commercial shipping. A smaller number of icebreakers will operate in the river above Quebec to keep open the channel in view of the importance of flood control. A notice to mariners is being issued to notify shipmasters of the special conditions that exist in the river above Quebec and the way in which the icebreakers operate and to caution them against actions that may complicate or hamper flood control operations.
3.	Twelve icebreakers and icebreaking lights and buoy tenders.
4.	"John A. Macdonald", "d'Iberville", "Labrador", "Sir Humphrey Gilbert", "Sir William Alexander", "Tupper", "J. E. Bernier", "Simon Fraser", "Wolfe", "Montcalm", "N. B. McLean" and "Ernest Lapointe".
5.	610.
6.	$2,176,416.


POSTAL STRIKE IN NIAGARA DISTRICT
Mr. Irvine: With reference to the recent strike action of postal employees in the Niagara Peninsula area (a) was disciplinary action instituted against the letter carriers who took part in the strike (b) if so, what and on what grounds (c) if no disciplinary action was taken, was any threatened?


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, the answer to question No. 703 is as follows; (a) No decision has yet been taken; (b) Not applicable; (c) No.
December 11, 1967


ASSISTANCE FOR AIR CREW TRAINING
Mr. Dinsdale: 1.	Is air crew training for pilots, radio operators and navigators assisted under the vocational and technical training program?
2.	Are student loans available for air crew training?
3.	What other programs are available or contemplated to meet the chronic shortage of air crew personnel?


Julia Verlyn (Judy) LaMarsh: I am informed by the Departments of Manpower and Immigration, Finance and Transport as follows:
1.	Under the occupational training for adults program required educational upgrading and related skill courses may be purchased. Flying time in aircraft has not been purchased.
2.	No.
3.	Assistance is now provided in the form of a grant of two hundred dollars equally divided between the school and the pilot for private pilot training. The Department of Transport is presently studying possible methods of financial aid to assist commercial pilots improve their flying qualifications. The studies in this regard have not yet been completed.


AIRPORT CAPITAL ASSISTANCE, ONTARIO
Mr. Smith: 1.	Since March 25, 1965, under the airport capital assistance policy, how many capital assistance grants have been approved for airports in Ontario, and in what amount, and for which municipalities have these grants been approved?
2.	How much has been paid on the grants?


James Allen (Jim) Byrne: 1. Since March 25, 1965, there have been seven capital assistance grants aproved for airport improvements in Ontario. The following list indicates the municipalities for which the assistance grants have been aproved and the amount of the grant. Elliot Lake, $230,000.00; Midland, $38,070,00; Niagara district (passenger-operations bldg.), $41,985.00; Peterborough, $596,000.00; Sarnia (passenger-operations bldg.), $30,562.50; South Porcupine (seaplane base), $26,920.00; Waterloo-Welhngton, $374,000.00.
2.	The following amounts have been paid on the grants. Elliot Lake, $779.52; Niagara district, $22,610.76; Peterborough, $149,276.27; South Porcupine, $26,920.00; Waterloo-Wel-lington, $369,709.52.
Questions


ADJUSTMENT ASSISTANCE BOARD, INDUSTRY DEPARTMENT
Mr. Hales: 1.	What are the names of the members of the adjustment assistance board of the Department of Industry?
2.	Who is chairman of the board?
3.	Who is secretary of the board?
4.	How many meetings have they held since its inception?
5.	Are minutes kept of these meetings and, if so, are they available to members of parliament?
6.	How many people are employed by the board and how many are there in each salary category?
7.	How many loans have they approved in each of the following categories (a) $10,000-$25,000 (b) $25,000-?50,000 (c) $50,000-$75,000 (d) $75,000-$100,000
(e)	$100,000 and over?
8.	What is the rate of interest charged for these loans and what is the duration of the loans?
9.	Are any loans in default?


Hon. C. M. Drury (Minister of Industry):: 1.	Professor V. W. Bladen, University of Toronto. Mr. R. B. Bryce, Deputy Minister, Department of Finance. Mr. G. V. Haythorne, Deputy Minister, Department of Labour. Mr. R. C. Labarge, Deputy Minister, Customs & Excise Division, Department of National Revenue. Mr. S. S. Reisman, Deputy Minister, Department of Industry. Mr. J. H. Warren, Deputy Minister, Department of Trade & Commerce.
2.	Professor V. W. Bladen.
3.	Mr. C. D. Arthur.
4.	Thirty.
5.	Yes, minutes are kept, however, it is not in the public interest to release any of these minutes since activities of the adjustment assistance board with respect to its borrowers are of a confidential nature and the terms and conditions of loans are considered to be "commercial confidential".
6.	None. Support for the board's activities is provided by staff of the Department of Industry.
Loan categories		Number
		approved
(a)	$ 10,000-$ 25,000	1(b)	25,000- 50,000	2(c)	50,000- 75,000	5(d)	75,000- 100,000	2(e)	100,000 and over	31Total	41
8. A rate of interest of 6 per cent per annum was charged on loans made by the board between August 11, 1965 and October 18, 1967. Since October 19, 1967 an interest rate


UNCOLLECTABLE STUDENT LOANS
Mr. Hales: 1.	How many student loans have been returned to the federal government from chartered banks as uncollectable?
2.	For what amounts are these loans?
3.	What amount In student loans has the government written off?


Mitchell William Sharp: 1 and 2. As of October 31, 1967, 226 loss claims for a total of $125,403 have been paid. As of the same date an additional 155 claims for $94,657 had been received but were still being discussed with the banks. This latter group of claims includes loans which can be brought back into good standing and on which no claim payment will be required.
3.	None.


COMPENSATION TO OWNERS OF COIN OPERATED MACHINES
Mr. Southam: In view of the federal government's program of conversion from silver coinage to nickel coinage, what plans, if any, has the government made to compensate owners of some 450,000 coin-operated machines across Canada who will be faced with a heavy economic burden in the change over to nickel coinage operated equipment?


Hon. Jean Chreiien (Member of the Administration):: The government at present is investigating the possible costs of the changeover to the vending machine industry and has not yet made a decision on the industry's request for compensation.


QUEBEC BRANCH, MANPOWER DEPARTMENT
Mr. Godin: 1.	What cities and parishes are served by the Quebec Branch of the federal Department of Manpower and Immigration?
2.	(a) Who is the head of this Branch (b) how many unemployed persons are registered at this Branch (c) how many of these unemployed persons have undertaken studies and are receiving grants from the federal government?

Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigra-

fion): 1. Charlesbourg, Loretteville, Ste-Foy, Beauport, Courville, Lac Delage, Montmorency, Orsainville, Ville-Vanier, Notre Dame de Lorette, L'Ancienne-Lorette, St-Felix du Cap Rouge, Tewkesbury, Charlesbourg-Est, Lac St. Charles, St-Gabriel de Valcartier, St-Mi-chel-Archange, Beaulieu, Beaupre, Lac St-Joseph, Chateau-Richer, Ste-Brigitte de Laval, Ste-Famille, St-Francois, St-Pierre, Lac Sergent, Deschambault, Fossambault Sur Le Lac, St-Basile-Sud, St-Casimir-Est, St-Marc des Carriers, Notre Dame de Portneuf, St-Augustin de Desmaures, Ste-Catherine, St-Gilbert, St-Joseph de Deschambault, Ste-Jeanne de Pont Rouge, Shannon, Giffard, Quebec, Sillery, Belair, Duberger, Les Saules, Notre Dame des Laurentides, Val St-Michel, Villeneuve, St-Emile, St. Dunstan du Lac Beauport, Stoneham, St-Fereol, Charlesbourg-Ouest, St-Gabriel Ouest, St-Joachim, Ste-Therese de Lisieux, Neufchatel, Ste-Anne de Beaupre, St-Jean de Boischatel, L'Ange-Gar-dien, St-Tite des Caps, St-Jean, St-Laurent, Donnoconna, Portneuf, Pont-Rouge, St-Alban, St-Casimir, St-Charles des Girondines, St-Ubald, Pointe-aux-Trembles, St-Basile, Ste-Christine, St-Thurbide, Cap Sante, St-Leonard de Portneuf.
2. (a) The Manager of the Canada Manpower Centre in Quebec City is Stanislas Picard. (b) Total number of people registered for new employment, as of 31 October, 1967, was 13,343. This figure includes those having full-time, part-time and casual employment as well as those who are unemployed, (c) Of a total of 655 persons in full-time training under the Occupational Training for Adults scheme, 580 were receiving allowances as of 30 November, 1967.


ROAD TO PUBLIC WHARF, BIG BRAS D'OR, N.S.
Mr. Muir (Cape Breion: North and Victoria):
1.	Did officials of the Department of Public Works discuss improvements to the road to the public wharf at Big Bras d'Or, Nova Scotia, with officials of the Department of Highways for the province of Nova Scotia and, if so, on what date?
2.	Did the provincial Department of Highways indicate they would be willing to take over ownership of this road and future maintenance if the Department of Public Works carried out certain immediate improvements?
3.	Did the Department of Public Works carry out the certain improvements requested and, if not, for what reason?
December 11, 1967

4.	Was a property survey completed of the area in question and, if so, on what date was such a survey completed?
5.	Have negotiations with the Department of Highways for the province of Nova Scotia been started to work out an agreement for the takeover of this road?
6.	When is it anticipated that the agreement will be made?


George James McIlraith: 1. Yes, on January 27, 1965, by letter.
2.	Yes.
3.	The improvements entail the widening of the road, but so far it has not been possible to complete the acquisition of the additional land.
4.	The survey documents have not been received from the provincial land surveyor.
5.	Yes.
6.	When the property acquisition and the road improvements have been completed.


ISSUE OF COIN SETS, 1967
Mr. McCleave: 1.	Did the Royal Canadian Mint issue a coin set costing approximately $40 for 1967?
2.	Were sales of such discontinued on September 30 and, if so, for what reason?
3.	How many sets were sold?


Mitchell William Sharp: 1.	Yes. The Royal Canadian Mint issued a centennial gold presentation set consisting of a $20 gold coin and one each of all the subsidiary coins from one cent to one dollar. These seven coins were enclosed in a genuine black morocco leather case and sold for $40.
2.	The mint commenced accepting orders for this set in early May, 1966. It discontinued the acceptance of orders on 30 September, 1967. Orders were accepted for a period of 17 months. Both the opening and closing dates were well publicized in all numismatic newspapers and by the press across Canada.
The sale was discontinued to afford the mint a three month period in which to manufacture and process all orders received and also to tool up and prepare for 1968 coinage. It was also necessary to give the box manufacturer an opportunity to make deliveries before the end of the calendar year, if at all possible.
3.	Approximately 300,000 sets were sold.
Questions


AGE LIMITS FOR OVERSEAS TEACHERS, DEFENCE DEPARTMENT
Mr. Bell (Carleion): 1.	In engaging teaching staff for schools operated overseas by the Department of National Defence, is it the policy of the department to accept applications from male teachers up to the age of sixty, but to place an age limit of forty on female applicants?
2.	If so, what is the reason for this differentiation?
3.	Have any complaints been received from teachers or other organizations in respect of the differentiation?
4.	If so, what action has been taken by the department in respect of such complaints?
5.	Does a similar differentiation exist in respect of schools operated within Canada by the Department of National Defence?


Hon. Leo Cadieux (Minisier of National Defence):: 1. Yes.
2.	The age differential was established after D-N.D. dependants' schools overseas were in operation for several years and the limitations were imposed after a period of practical experience in the overseas environment.
3.	Yes.
4.	Although consideration has been given to eliminating the age differential between male and female applicants it is not intended to change the existing age limits at this time.
5.	No.


TRANSFERS FROM DEFENCE DEPARTMENT TO TRANSPORT DEPARTMENT
Mr. Orlikow: 1.	As of September 19, 1967, how many persons in the Department of National Defence moved to the Department of Transport?
2.	Of these, how many were employed in the information and/or public relations services of the Department of National Defence?
3.	Of these, how many were military personnel?
4.	Of those who moved, how many years of service with the Department of National Defence did each have?


Léo Alphonse Joseph Cadieux: 1. As of September 19, 1967, six persons in the Department of National Defence moved to the Department of Transport.
2.	None.
3.	None.
4.	Mr. W. M. Lee, 24 years two months; Miss M. M. M. Bulger, four years, five months; Mr. R. G. Edwards, two years, eleven months; Mr. R. G. Gairnes, one year, one half month; Mr. R. J. McDowall, two months; Mr. R. P. Stone, one month.

December 11, 1967
Orders for Returns


DUTIES OF LLOYD FRANCIS AT UN
Mr. Faulkner: 1.	What were the duties of Lloyd Francis at the 22nd general assembly at the UN?
2.	How much time did he spend in connection with these duties?
3.	How much was he paid for his services?


Hon. Paul  Marlin@Secrelary of Slale for External Affairs: 1. He is serving as the Canadian representative on the fifth (administrative and budgetary) committee.
2.	His duties have engaged his full time attention since the commencement of the current session on September 19, 1967, and will continue to do so until the end of the session, on or about December 19, 1967.
3.	He receives no salary for service as a member of the Canadian delegation to the general assembly, but is reimbursed for actual expenses.


CONSULTANTS' STUDY, CONSUMER AFFAIRS
Mr. Bell (Carlelon): 1.	What was the amount allotted from Treasury Board Vote 5 for contingencies on or about October 26, 1967, for the expenses of consultant's study on objectives of the federal government in the area of consumer affairs?
2.	What amount has been actually expended?
3.	What, in detail, was the purpose of the study?
4.	What persons, firms or corporations were retained as consultants to undertake the study?
5.	Did such consultants retain other agencies, persons, firms or corporations to assist in the study?
6.	If so, what are their names?
7.	Has the study been completed?
8.	If so, when will it be laid on the Table of the House?
9.	If not, when is it expected to be completed?
10.	Why was it considered necessary that these expenses be paid from Treasury Board Vote 5 for contingencies?


Hon. John N. Turner (Registrar General):: 1. $70,000.
2.	Nil; First statement expected by mid December.
3.	The proposed study is designed to assist the department in defining a government wide consumer affairs program and in formulating its own programs, organization and planning, budgeting and information systems within that framework.
4.	Operations Research Incorporated were retained as consultants.
5.	No.
(Mr. Cadieux (Terrebonne).]
6.	N/A
7.	No.
8.	N/A
9.	July 15, 1968.
10.	The information of a consumer affairs branch was not anticipated when main estimates for the department were prepared in 1966; therefore funds were not provided in the main estimates for any organization or work connected with the formation of the consumer affairs branch.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Mather: 1.	What, in dollars, was the amount of federal advertising placed through advertising agencies in Canada in 1966?
2.	What, in dollars, was the commission paid to the advertising agencies?
3.	Who were the advertising agencies?
Return tabled.


CONSIDERATION OF REPORT ON POST OFFICE DEPARTMENT
Mr. Bell (Carleton): 1.	Since the return was tabled to question no. 2,323 of the last session of Parliament on February 15, 1967, regarding implementation of the list of recommendations appearing from pages 325 to 355 of the report of the Hon. Mr. Justice Andrd Montpetit on working conditions in the Post Office Department, how many of such recommendations have since been (a) implemented (b) partially implemented (c) rejected, in each case specifying which ones?
2.	What recommendations are still under consideration and in respect of these, when is it anticipated that a decision may be reached?
Return tabled.


PENITENTIARY STAFF
Mr. Orlikow: 1.	What was the total number of inmates in federal penitentiaries as of the last date for which the annual report was prepared?
2.	What was the total staff employed in these penitentiaries and, of these, how many are guards, teachers, psychologists, psychiatrists, etc.?
3.	What qualifications are required for the professional staff?
4.	What are the minimum qualifications for guards employed in penitentiaries?
5.	Is there a compulsory training course for people hired as guards and, if so, what type of course, and how long does it take to complete this course?
Return tabled.
December 11, 1967



INDUSTRY


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, I would like to address a question to the right hon. Prime Minister. In view of the fact that productivity in Canada has remained stationary during the past 12 months, a situation similar to that which brought about the present economic crisis in Great Britain, does the government intend to introduce any measures to induce industry to correct this situation before we recess for the Christmas holiday, in view of the fact that we will not be returning until the latter part of January ?


Right Hon. L. B. Pearson (Prime Minister):: Well, Mr. Speaker, once again I am afraid I am not able to accept completely the premise on which the question was based, but if there are any additional measures to those being taken in this field they will be announced as soon as possible. I am not sure where my hon. friend got the information that we are not coming back until the third week in January.


George Harris Hees: As a supplementary question, would the Prime Minister do me the honour of getting in touch with the Dominion Bureau of Statistics, and he will receive exactly the information I received, which will tell him my statement is correct.


Mr. Deputy Speaker:: Order, please. The hon. member should put his question.


George Harris Hees: Then, Mr. Speaker, may I continue with my question. Would the Prime Minister not agree that whatever the government has been doing during the past 12 months it has been singularly unsuccessful in improving productivity, and would the government not now take action to correct this situation?


Mr. Deputy Speaker:: Order. The hon.
member for York South.


Mr. E. Nasserden (Rosthern):: Mr. Speaker,
I have a supplementary question for the Prime Minister in respect of an earlier question regarding the economic crisis. Has the economic crisis in Canada become so much more severe over the week end that members of the cabinet have decided to camouflage their identity?

Inquiries of the Ministry Mr. Pearson: Mr. Speaker, there is no economic crisis.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
David Lewis: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister and ask if he can inform the house whether Canada has participated in any discussions at the United Nations or elsewhere concerning the suggestion that the problems in respect of the war in Viet Nam be brought before the security council. If so, what has been Canada's position on this subject?


Lester Bowles Pearson: I think, Mr. Speaker, there have been some informal discussions among members of the security council on this matter. I believe also some consideration has been given by the Secretary General to the possibility of representatives of North Viet Nam appearing. I shall be glad to take my hon. friend's question as notice and perhaps be able to give a more specific reply tomorrow.



APPLICATION TO STAFF OF BILINGUAL BONUS On the orders of the day:


David Réal Caouette: Mr. Speaker, I have a question for the Minister of National Revenue in his capacity of President of the Treasury Board.
Did the minister receive a request signed by hon. members from all parties in the house, as well as by parliament employees, asking that the 7 per cent bonus be granted to bilingual employees? In the affirmative, is it the intention of the minister to comply with that request?


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: To my knowledge I have not
received such a petition. I should point out once again that the matter is one for Mr. Speaker, and not for me.
5260	COMMONS
Inquiries of the Ministry EXTERNAL AFFAIRS



NIGERIA-POSSIBLE MEDIATION BY CANADA IN CIVIL DISPUTE

[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-sioke):: Mr. Speaker, I should like to direct this question to the right hon. Prime Minister; it follows on one I asked last week. In the absence of any official communique or news report could the Prime Minister inform the house whether his talks with the foreign minister of Nigeria touched on the civil war in that country and the possibility of Canadian mediation in that dispute?


Lester Bowles Pearson: Yes, that matter came up. The foreign minister expressed the hope that the civil conflict would end very shortly and that Nigerian unity would be restored and peace with it.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker, my question is directed to the Secretary of State. I should like to ask her whether she or the government have given orders to the staff of the ethnic press division in her department that they should seek other employment because of the disbanding of that section.


Julia Verlyn (Judy) LaMarsh: No, Mr. Speaker, I know nothing at all about that.


Michael Starr: Is there any intention on the part of the government to disband that section in the Department of the Secretary of State?


Julia Verlyn (Judy) LaMarsh: None whatsoever.



REQUESTS FOR DISTRIBUTION OF STUDY PAPERS ON HOUSE LEADERS

[Stage Direction]
On the orders of the day:
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Prime Minister. The right hon. gentleman will understand why I was unable to give him notice of it. In view of the fact that the statement hereinafter referred to is already in the hands of the press, would the Prime

DEBATES	December 11, 1967
Minister be willing to provide for the benefit of members the alleged study paper dealing with the Leader of the Opposition? In addition, would a copy be sent to the Leader of the Opposition for his guidance in the hope that this may lead to some understanding of the extraordinary political acrobatics of this government?


Lester Bowles Pearson: I would be very glad indeed to do that, Mr. Speaker. It is a very interesting academic exercise.


Mr. D. V. Pugh (Okanagan Boundary):: Mr. Speaker, I have a supplementary question for the Prime Minister on the matter of the study or position papers. Would the Prime Minister also let the house have a position paper on the various Liberal hopefuls?


Lester Bowles Pearson: Yes, Mr. Speaker. And I wonder whether my hon. friends on the other side would send me a copy of the analyses I am sure they have made over the years of my character and achievements.



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the right hon. Prime Minister. In view of the fact that the centennial flame has caught the imagination of a great many people in Canada, has the Prime Minister received representations from people and organizations requesting that the centennial flame be maintained in perpetuity?


Lester Bowles Pearson: Yes, Mr. Speaker; I have received representations, including representations from many members of the house on this side and others. I agree that the flame should become the symbol of our first centennial year and should not be extinguished. Perhaps it would be desirable to re-light it as we enter our second centennial year.


David Réal Caouette: Mr. Speaker, I should like to put a supplementary question to the Prime Minister.
When we look at that flame, we see a blue part. Would it be possible to put out only that part and maintain the other?
December 11, 1967



WHEAT-INQUIRY AS TO PROMOTION OF FURTHER SALES

[Stage Direction]
On the orders of the day:
Mr. Reynold Rapp (Humboldi-Melfort-
Tisdale):	Mr. Speaker, I should like to
direct my question to the Minister of Trade and Commerce. The report he gave us is very encouraging, but what the farmers really want to know is whether they can eventually get any of their grain to the markets of the world.
Robert Henry Winters: Mr. Speaker, that is relatively easy to answer, because eventually they will. I imagine they are a little more concerned than that. What they would like is to have their wheat moved to the markets of the world as quickly as possible. While I was in Europe I did take the opportunity to speak to all the wheat purchasing agencies concerned and was glad to have confirmed that Canadian wheat is held in high regard for blending purposes by all these countries. I think hon. members can assume that these countries will continue to take our wheat at the normal levels.


Mr. J. E. Pascoe (Moose Jaw-Lake Centre):: Mr. Speaker, I have a supplementary question. Will the recent sale of wheat by France to mainland China have the effect of reducing the sale of Canadian wheat to that country?


Robert Henry Winters: I would not think so, Mr. Speaker.


George Harris Hees: I
should like to direct a question to the Minister of Trade and Commerce. Can he now follow the suggestion I made earlier in the day, that he outline to the house whether he was able to develop any new markets for Canadian wheat or extend any existing markets?


Robert Henry Winters: Mr. Speaker, negotiations of this kind take some time, but I think it is fair to say that as a result of the visit I made Canadian wheat will be sold in some of the countries I visited.


George Harris Hees: I take it the minister really has no concrete idea as to whether we will be able to make any important move to build up
Inquiries of the Ministry our wheat sales in order to correct the situation that has developed this year as a result of the serious decline in wheat sales?


Robert Henry Winters: That is not correct, Mr. Speaker. I have some concrete ideas, and in due course I hope to be able to inform the house about some of them.



PROPOSED PREFERENTIAL POLICY FOR DEVELOPING NATIONS

[Stage Direction]
On the orders of the day:
Mr. J. R. Keays (Gaspe):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. Earlier today he referred to temporary trade preferences for the developing nations. Would the minister say whether Canada intends to adopt or propose a policy at the UNCTAD meeting in February promoting preferential buying from the developing nations, as was recommended at the NATO conference?


Robert Henry Winters: Mr. Speaker, we will not be proposing such a program. We will be supporting a program along the lines I advocated in the remarks I made at GATT; that is, a preferential program on a temporary and non-discriminatory basis so the weight will be borne by all developed countries. I made one or two other reservations. We will approach it in a spirit of harmony, and if preferences are the wish of all or the majority of the participating countries, Canada will go along.



SUGGESTED ESTABLISHMENT BY CHINA OF CANADIAN OFFICE

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilion (Qu'Appelle):: Mr. Speaker, my question is on a related matter and is directed to the Minister of Trade and Commerce. It is based on a very interesting section of the minister's speech to the GATT conference in which he said:
There are opportunities to make further progress on a pragmatic basis with individual countries.
Does this mean that the government now intends to make an offer or invitation to the republic of China on the mainland for the setting up of a trading office to facilitate the sale of goods to this country?


Robert Henry Winters: Mainland China is a very valued trading partner. Members of the wheat
5262	COMMONS
Inquiries of the Ministry board are currently in Canton endeavouring to negotiate an extension of the wheat purchase arrangements under the over-all contract. I am hopeful that in due course a successful result will ensue.
As part of our trading arrangements we do exchange trade in other goods, and we should like that flow to increase. The specific means to achieve that will have to be worked out having regard to the political circumstances between the two countries.


Francis Alvin George Hamilton: To be very specific, I think some 22 nations have granted China the right to set up trade offices in their countries. On several occasions in the past I have asked about the policy of the government in this regard but I have never been able to get a precise answer. In view of the very promising statement made by the minister in Geneva on November 22, will he not make an effort now to invite the Chinese to set up a trade office here so Canadian businessmen can meet with officials of that country in this country instead of travelling all the way to China?


Robert Henry Winters: That is a matter to which we will have to give consideration, Mr. Speaker.


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a supplementary question to those directed to the Minister of Trade and Commerce, which I should like to pose to the Prime Minister. In view of the minister's replies does the Prime Minister think now might be an appropriate time to commence negotiations for an exchange of diplomatic relations with Peking China?


Lester Bowles Pearson: I do not think this would be the most appropriate moment, Mr. Speaker.



CRIMINAL CODE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question I wished to address to the Minister of Justice. Perhaps in his absence somebody else might take it as notice. Having in mind the minister's earlier statement in respect of amendments to the Criminal Code to provide for a mandatory test for drinking drivers, can it be indicated when it is hoped to introduce legislation on that point, particularly having in mind the fact that similar action in Great Britain recently has reduced the death rate on the roads by 40 per cent?

DEBATES	December 11, 1967



WHEAT-INQUIRY AS TO CLOSING OF POOL ACCOUNTS

[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Trade and Commerce, and I welcome him back to this low quota, low delivery and low income area. I should like to know when we may expect the 1966-67 wheat pool accounts to be closed off, and whether an attempt will be made to close them off as early as or earlier than last year.


Robert Henry Winters: Mr. Speaker, the observation about low income is relative. I have been in some countries recently where they would enjoy the standard of living we have in Canada. As to the matter of the date of the closing off of wheat pool accounts, I will take the question as notice and answer it in due course.



FINANCE


[Stage Direction]
On the orders of the day:
Mitchell William Sharp: I wish to direct a question to the Minister of Finance. Since the government discontinued minting of 1967 50-cent pieces in July, and $1 pieces in September, and Canadians are forced now to pay as high as $3 for a 1967 Canadian 50-cent piece, will the minister reconsider this decision and again mint these Canadian coins so Canadians will not have to pay this exorbitant price?


Mitchell William Sharp: I will take note of the hon. member's suggestion, Mr. Speaker.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I should like to direct my question to the Prime Minister. In view of the repeated indications by the Yukon legislative council that they desire to institute formal discussions with the federal government relating to increasing the fiscal powers of the council, will the Prime Minister indicate to the house whether the government is prepared to cooperate by participating in such talks with
December 11, 1967	COMMONS DEBATES	5263
Inquiries of the Ministry
the objective of increasing those powers, and Hon. Allan J. MacEachen (Minister of introducing appropriate amendments to the National Health and Welfare): None at the Yukon Act?	moment, Mr. Speaker.


Lester Bowles Pearson: Mr. Speaker, I will be glad to discuss this matter with the minister, who in due course will make a statement in this regard.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Melvin McQuaid (Kings):: Mr. Speaker, in view of the announcement this morning that the premier of Prince Edward Island will be meeting with the Prime Minister tomorrow to discuss the slowdown in the construction of the Prince Edward Island causeway, will the Prime Minister consider inviting members of parliament representing Prince Edward Island to that meeting in view of their interest in this question?


Lester Bowles Pearson: Mr. Speaker, I will be glad to convey the results of that discussion to my hon. friends from Prince Edward Island.


Mr. Heath Macquarrie (Queens):: Mr. Speaker, I have a question for the Minister of Public Works. Can he advise whether Colonel Edward Churchill is now studying the feasibility of placing hovercraft on the Borden-Tormentine run, and whether these are being considered as replacements for existing ferries or as a substitute for the still non-existent causeway?


George James McIlraith: Mr. Speaker, Colonel Churchill is directing the consultant firm examining all possible ways of establishing a crossing from Prince Edward Island to the mainland.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Is the government contemplating the placing of either severe restrictions or an outright ban on cigarette advertising on radio and television?



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to ask the Minister of National Revenue whether he can answer today the question I asked on Friday in respect of the charge of the professional institute that the decision of the government not to pay the promised increase to our scientific staff will mean large scale resignations.


Edgar John Benson: Mr. Speaker, I have just received a rather lengthy report in this regard, and I should like to condense it and perhaps answer my hon. friend's question tomorrow.



POLLUTION


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: I have a question for the Minister of Energy, Mines and Resources. Will he tell the house whether the $50 million assault on water pollution which was to have accompanied the passage of a proposed new water act has been scrapped as part of government spending cuts?

Hon. Jean-Luc Pepin (Minister of Energy,
Mines and Resources): Mr. Speaker, personally I was hearing for the first time about a specific amount of $50 million to be affected to the fight against water pollution. We would have liked to dispose of such a fund, of course, but it is not essential.
However, this is a good opportunity to say that next year my department will earmark $48 million for its water resources branch, and out of that amount $21 million will be for oceanography and $9 million to pollution in particular. Other departments contribute also to that undertaking. I feel that this newspaper report should not be given the dramatic importance it seems to have at first sight.
December 11, 1967

Inquiries of the Ministry



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a question for the right hon. Prime Minister. In view of the dreadful suffering of the people of Viet Nam will the government of Canada reconsider its policy of selling arms to the United States, some of which are used in that country?


Lester Bowles Pearson: We do not intend to abrogate our defence sharing agreement with the United States.


URANIUM
[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to direct my question to the Minister of Trade and Commerce. During his recent extensive trade tour did he have an opportunity to discuss the sale of uranium to France?


Robert Henry Winters: No, Mr. Speaker, I had no direct opportunity to talk with the French government during this visit. My purpose in being in Paris was to attend the O.E.C.D. meeting, which of course was attended by some of the ministers of France. I did on one occasion at lunch have an opportunity to discuss uranium in a general way, but there are no changes in the circumstances.


Alfred Dryden Hales: Were those discussions along any other lines than the use of uranium for peaceful purposes?


Robert Henry Winters: No, Mr. Speaker; those are still the rules of the game.


OLD AGE SECURITY
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. Has the minister yet found a way to make provision for old age pensioners who are receiving the guaranteed income supplement, when their income drops during

the calendar year, to receive an immediate adjustment to restore their income to the minimum provided by the law as it now stands?


Allan Joseph MacEachen: No, Mr. Speaker.


Stanley Howard Knowles: I have a supplementary question, Mr. Speaker. In view of the fact that this question has been asked two or three times, may I ask the minister whether he is working on this matter?


Allan Joseph MacEachen: Yes, Mr. Speaker, but I do not think it will be possible to make any legislative changes in the law in the present session of parliament. We do have under consideration certain changes which may be necessary as a result of our experience in administering this large program, but we do not think we will have the opportunity to take the necessary steps in this session.


INDIAN AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Minister of Indian Affairs and Northern Development and ask him whether the draft of the revised Indian Act has yet been prepared and sent to the various band councils across the nation.


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: Mr. Speaker, it is our intention to present it first in the house and then take it to the Indian bands. The draft is just about completed, and I hope that early in the new year we might distribute it first here and then to the bands and other interested parties in Canada.


Frank Howard: I have a supplementary question, Mr. Speaker. Is there any intention to delay the second reading of the bill for a reasonably long period of time until the various band councils and other interested people have an opportunity to express their views on the proposals?


Arthur Laing: I am somewhat fearful that the distribution of the act among the Indian bands and their consultation might take more than a reasonable amount of time.
December 11, 1967


INQUIRY AS TO HOUSING PROGRAM ON RESERVATIONS
[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I have a related question for the Minister of Indian Affairs and Northern Development. In view of the reported change from a five year to a seven year housing program, can the minister say whether it is planned to have these houses serviced with water and sewerage at the conclusion of the seven years?
Kon. Arthur Laing (Minister of Indian Affairs and Northern Development): No, Mr. Speaker, I do not think we could give such an assurance, because certain areas simply do not lend themselves to the introduction of these services.
I might say, with reference to the original five year plan, that we have not quite been keeping pace with the plan, and its extension to seven years is not as serious as it seems. I think we are doing a reasonably good job in housing on the Indian reservations, but I cannot give the hon. member the assurance he requests with respect to the provision of sewerage and water facilities.


Robert Simpson: I have a supplementary
question, Mr. Speaker. In view of the statement made by the deputy minister in Tuk-toyaktuk a year ago, that all the Eskimo and Indian houses would be provided with sewers and water within five years, has there been a change in the program since then?


Arthur Laing: I am quite certain that if the deputy minister made that statement, and I cannot recall whether or not he made it, he was not referring to the Indian residents in the provincial areas of Canada.


Stanley James Korchinski: Can the
minister inform us whether the areas in which the house construction program has been slowed down have already been designated, or is this matter to be negotiated?


Arthur Laing: Mr. Speaker, I should like to explain to the house that the co-operation of Indian bands is required in all these instances, and those which have been most energetic have received consideration before the others. I think this is also to be expected in the future.


BUDGETARY PROPOSALS
[Stage Direction]
The house resumed, from Friday, December 8, consideration of the motion of Hon.
27053-332^
The Budget-Mr. Grafftey Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Monteith (page 5118).
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, Canadians today learned that the high command of the present government, having satisfied itself that the nation's business was in order, has issued a position paper on the Leader of the Opposition-a most interesting exercise. Evidently a bankrupt government prefers to substitute political ploys for public policy. One adjective used to describe the hon. gentleman was "reluctant". In truth, that word is not only a description of the present government but is its very definition. I ask every member in every comer of the house: What are the people of Canada saying today with reference to the word "reluctant"? What other government in the history of this country has been more reluctant to defend, lead and define the federal cause, and more reluctant to act in the face of rampant inflation and the nation's most serious housing crisis?


Joseph Jacques Jean Chrétien: Oh, oh.


William Heward Grafftey: The minister says "oh, oh". Will he deny that the part of the country he represents is deeply affected by this crisis?


Joseph Jacques Jean Chrétien: These matters will be dealt with at the federal-provincial conference.


William Heward Grafftey: That is the trouble; instead of acting the government is calling conferences.


Joseph Jacques Jean Chrétien: I rise on a question of privilege, Mr. Speaker. The hon. member for Brome-Missisquoi is the last member to criticize me for referring to the federal-provincial conference, because he proposes a secretariat to organize more of these meetings.


Mr. Muir (Cape Breton North and Victoria):: Mr. Speaker, this is not a question of privilege.


The Deputy Speaker:: The minister must state his question of privilege.


William Heward Grafftey: One of the reasons that this government is losing the confidence of the people is that they feel that conferences, symposiums, meetings and committee hearings replace action. What we really want is action, and if the minister thinks that what we are getting in the west block is action he
December 11, 1367

The Budget-Mr. Grafftey has a lot to learn about government inaction. The government has called the Leader of the Opposition "reluctant". It is noteworthy that they have the time to spend on political ploys of this sort. What government has been more reluctant to act in the face of rampant inflation?


James Allen (Jim) Byrne: The hon. member has said that already. When will he turn the page?


William Heward Grafftey: I will say it again and again. The hon. member who is supposed to be a parliamentary secretary sits here day in and day out and heckles.


Robert Muir: He sits on his brain.


William Heward Grafftey: Some of the problems facing the government are rampant inflation, a most serious housing crisis, air, water and soil pollution, urban blight, development and redevelopment, rising interest rates, and rising unemployment. If the present Liberal government would spend less time analysing the new Progressive Conservative leader and more time dealing with the problems of the country, Canadians would not be losing confidence in the government as fast as they are. The government has forgotten one simple fact relating to progressive leadership.


Robert Muir: Only one?


William Heward Grafftey: Leadership by exhortation and speech making is useless unless it is coupled with leadership by example. The supporters of the government seem to be very irritable today. They are yelling. Perhaps they are worried. Perhaps during the week end they went back to their ridings where some of their constituents have spoken to them.


Robert Muir: Did the hon. member say "yelling" or
"yellow"?


William Heward Grafftey: Leadership by speech making and exhortation never takes the place of leadership by example. What have been the effects of the government's policies in general and this so-called budget in particular? It can be admitted that productivity cannot withstand a large corporation tax hike. I will concede that, in view of the fact that the government's policies have already seriously handicapped Canada's competitive position and national productivity.


One of the measures taken by the government in the latest budget was to raise the income tax. Who will get it in the neck again? I wish the Minister of Finance would listen. Who will get it in the neck again?


Mitchell William Sharp: The Minister of Finance.


William Heward Grafftey: 
James Allen (Jim) Byrne: You are talking about six or
seven years ago.


William Heward Grafftey: Does the hon. member get an extra salary for heckling? I know he is not what one would term the most distinguished member.


James Allen (Jim) Byrne: I am just stating facts.


William Heward Grafftey: The hon. member has the reputation of being about the poorest speech interrupter. Has he ever read Hansard and noted his interruptions? If the hon. member does not mind my saying so, he has not too high an I.Q.


James Allen (Jim) Byrne: I rise on a point of order, Mr. Speaker.


William Heward Grafftey: If I could have the assistance of the Chair I should like to continue this speech.


The Acting Speaker (Mr. Rinfret):: The
hon. member for Kootenay East on a point of order.


James Allen (Jim) Byrne: Mr. Speaker, at least when I make a speech I do not read it word for
December 11, 1967

word as the hon. member appears to be doing.


The Acting Speaker (Mr. Rinfret):: Order. The hon. member for Brome-Missisquoi.


William Heward Grafftey: What does the quality of Canadian life, or democracy mean to our 500,000 rural families who live on an annual income of less than $2,000? Does this budget or what the Minister of Finance (Mr. Sharp) is doing help those people? What about the quality of Canadian life when the Treasury Board cuts a billion dollars off the estimates? We are going to examine the question of whether or not they have really done so. We already have a shortage of doctors and we are going to have a greater shortage as the years go by. In spite of this, one of first cut-backs made was the proposed expansion of medical schools. What about the quality of Canadian life when we cut back on research, one thing a viable nation needs to spend more and more upon? What a way to run a country.
I ask every member in this house, is not one of the main functions of government to help and encourage the dispossessed? In a democracy, is not one of the main functions of government to promote equality of opportunity? I ask again, what are the effects of the government's policies on those already up against it? Need I say more?
When a government, as a result of mis-judgment and miscalculation, is obliged to cut $1 billion from the estimates, even though it is mostly a public relations gimmick, it does not create stability either at the local or national levels. The effect on those who had made plans for the future based on legitimate expectations is incalculable. In an area where stability is required the government has unwittingly encouraged havoc and chaos.
I wish to touch upon two points which in my view are guide lines to help avoid a similar mess in the future. They are, first, the establishment of priorities in the social and economic fields and, second, constitutional revision and modernization. What about the establishment of priorities? I admit that a lot of loose talk has surrounded this subject. Invoking the principle often sounds like the old, I am for motherhood speech. Surely, however, the time has come to be specific. This government has consistently refused to plan its own priorities on the one hand and priorities with the provinces on the other hand. Coupled with this, sir, it is attempting
The Budget-Mr. Grafftey to be all things to all men and do everything at once, but now the chickens have come home to roost.
As I have already said, this government has systematically destroyed its options for manoeuvre. What greater indictment could be made of a government? After all, we realize that since government is getting bigger and bigger a lot of decision-making power is left to our very excellent bureaucracy. However, decision-making power at the top level is what a government must have and should exercise. What greater indictment can we make of the government, in the face of the chaotic economic situation this nation faces, than the fact it has systematically destrojmd its options for manoeuvre? Rather than tying down inflation the government has tied its own hands behind its back. Rather than build viable economic policies the government has built itself into a box. If the federal authority would only exercise the leadership expected of it and co-operate with the provinces in establishing priorities, it is my belief that many would be pleasantly surprised by the degree of agreement we would find.
Canadians recognize that while governments cannot be run completely like businesses some sound business principles must be brought into governmental affairs. The short and long term planning of priorities, agreeing on what must be done first, is one of those principles, a principle forgotten by this administration. The alternative is doing what this government has done, doing everything badly all at once while the nation goes broke.
Mi-. Chretien: May I ask a question?


William Heward Grafftey: I ask the Minister without Portfolio (Mr. Chretien), is the nation not almost broke?


Joseph Jacques Jean Chrétien: Mr. Speaker, would the hon. member for Brome-Missisquoi (Mr. Grafftey) allow me a question?


William Heward Grafftey: I will answer questions at the end of my speech. I wish to turn now to constitutional revision. The present Minister of Finance, by calling for the redistribution of taxing powers and general tax reforms before we have a basic constitutional revision and allocation of modern powers and problems to the appropriate level of government, is putting the cart before the horse. This government has consistently refused, as I
5268	COMMONS
The Budget-Mr. Grafftey have already said, to defend and lead the federal cause. Before we have constitutional modernization we must have a dialogue at the national level here in Ottawa in order to deal with national unity and national problems. When will this government act? When are they going to act? We have had the B and B commission, we have had the Quebec legislative committee, we have had the provinces calling a confederation for tomorrow conference, we have had conferences all over the country dealing with something with which the federal authority should deal, national unity and national problems. Why is there this mandarin suspicion of politicians on the part of the present government? Whether you like it or not, whether you believe you know what is best for the people, constitutions and political documents.
You are going to have to have the co-operation of every member of this house in a dialogue in which every member of the house can take part, rather than present us with a fait accompli. I suggest this is one of the things upon which this government is going to have to act. Canadians all over the country are sick and tired of the buck passing between Ottawa and the provinces and the fact that no level of government is dealing effectively with many of the modern problems facing our young nation. I repeat those problems. There is inflation. Ten years ago there was no doubt in the world it was the federal authority that had jurisdiction over inflation and the cost of living. But now, the minister passes the buck and Canadians watch a government that refuses to take the first step to modernize the constitution pass the buck back to the provinces. No level of government seems to be tackling these problems.
There is housing. Hon. members opposite will tell me there is a meeting going on down the hall with the premiers of the provinces.


Joseph Jacques Jean Chrétien: Are you against that?
[DOT] (3:40 p.m.)


William Heward Grafftey: Holding meetings does not take the place of action. The government is only now meeting with the provinces and it should have taken action one or two years ago. No government is dealing effectively with air, water and soil pollution, with urban blight, development and redevelopment, with highway deaths and injuries, with metro problems and traffic communication. Which level of government is dealing with these modern problems effectively, Mr. Speaker,
[Mr. Grafftey.!
DEBATES	December 11, 1967
while hon. members opposite sit on their partisan hands and do not let a national political dialogue take place? French and English speaking Caandians alike do not care as long as some level of government gets on with the job.
As we modernize our constitution we shall obviously find many questions old and new that require joint action, which in turn will require the improvement of consultative machinery between Ottawa and the provinces. ARDA and the resources experience in my view set good precedents in this regard.
Many government supporters point to all of the federal-provincial conferences that have been held. But, Mr. Speaker, these conferences are often held far too late when the damage has been done, as is the case with the one now being held in a crisis atmosphere. The conference the government is holding now should have been held one or two years ago. The government is like a rudderless ship going from crisis to crisis as the people lose confidence in it. If the government does not start establishing priorities, modernizing the constitution and improving consultative machinery with the provinces, then if I may paraphrase the remarks of my leader, Canadians will continue to feel that keeping this government in office is far too high a price to expect the people to pay.


Joseph Jacques Jean Chrétien: Would the hon. member for Brome-Missisquoi allow me just one question? How can he say that the government is holding too many federal-provincial conferences and by the same token suggest that the federal government should discuss priorities and Canadian unity with provincial governments? Does he ignore completely the federal-provincial conference which will be taking place in January with regard to the Bill of Rights?


William Heward Grafftey: Unfortunately, the minister has once again misinterpreted my speech. I suggested nothing of the sort. At last, problems will be discussed with the provinces. But what I said, and I repeat it, is that a national dialogue must be initiated here in Ottawa with all political parties.
That is not what I said and the hon. member misinterpreted my speech.
Mr. J. R. Comlois (Joliefte-L'Assompiion-
Monlcalm): Mr. Speaker, I sincerely wonder if the hon. members opposite are serious when they move a non-confidence motion
December 11, 1967

against the government in the following words:
This house regrets that the government by its vacillation and its failure to manage the economic and financial affairs of the country in a responsible manner has created a situation of instability and uncertainty, and has now proposed an increase in taxes to meet governmental extravagance, thus contributing to the inflationary pressures of the economy.
The government is charged with vacillation and failure to manage the economic and financial affairs of the country.
Let us look back together on the actions of this government. Since its accession to power, the government has tried as had promised to apply the main reforms required to develop a system of social security in Canada. On our recommendation, parliament has also authorized an appreciable increase of contributions to what is now top priority in Canada, higher education. That was done through expenditures and a special tax transfer to the provinces. We have deliberately transferred additional resources to the provincial governments so as to enable them and their municipalities to meet the constantly increasing services required of them. We have put forward measures designed to promote scientific research, industrial development and the recovery of certain areas handicapped by a slower growth and fewer revenues than others.
We have never hidden the fact that all those reforms would require huge increases in government expenditures.
During the last fiscal year, total federal expenditures have reached $9,846 million, or 16.8 per cent of the gross national product. Five years earlier, that is in 1961-62, total expenditures represented 19.2 per cent of the gross national product and five years previously, they reached $5,126 million, or 16.4 per cent of the gross national product. Therefore, even though our expenditures have increased by 92 per cent during the last decade, they represented approximately the same percentage of the gross national product as ten years ago.
Furthermore, during that period, we have decreased our taxation rates in favour of the provinces. Besides, during the same period, parliament passed the Canada pension plan, which is not taken into consideration in those statistics. It is a separate, autonomous plan, fully financed by contributions and where, at this initial stage, contributions greatly exceed payments and make up a great investment
The Budget-Mr. Comtois fund which is available to the provinces in order to help them meet their capital requirements.
In its assessment of the situation, this year, bearing in mind its various commitments, namely medicare, the government decided that much more severe restraints than in the past several years, would have to be imposed upon the increase in expenditures. Those restraints are necessary if we want to curb inflationary pressures within the economy, reduce our demands on the money market and keep tax increases to a minimum. Therefore, we have chosen to maintain the increase in our budget expenditures with two exceptions-medicare and the amortization of the Expo deficit-at about 4J per cent, a much lower rate of increase than during the three previous years. When these objectives are reached and when medicare becomes operative, then, I think, we will be able to maintain the future increases of our public expenditures at a level which increasing income from an expanding economy can meet without inflationary effects.
The federal government will have to implement a number of important programs, particularly in the fields of manpower training, research and economic development, but these will not require such a rapid and deeply-felt increase in expenditures as in the case of health and social security programs over the last ten years.
To ensure this transition, we shall have to cut back in the coming year on our programs of expenditures, always excepting medicare, to contain the rapid rate of increase that occurred lately and set a more supportable one, just as we have been trying for 18 months to adjust our rate of economic expansion.
This means, in fact, that restrictions must be imposed in several areas of government activity.

Here is a partial list, Mr. Speaker, of the programs and projects that will be affected. These were outlined in the speech of the Minister of National Revenue (Mr. Benson).
The special planning secretariat within the Privy Council office will be disbanded. Financial provision for the Company of Young Canadians will be reduced by 20 per cent. Funds provided in a number of departmental and agency budgets for emergency measures planning and organization will be scaled
5270	COMMONS
The Budget-Mr. Comtois down substantially below the current year's levels. The operating budget for the C.B.C. in 1968-69 will be set at a level $11 million less than requested. The capital budget of the C.B.C. will be cut back from $57 million requested for 1968-1969 to $20 million or $5 million below the level for the current year. Further expansion of colour television facilities of the C.B.C. will be deferred.
[DOT] (3:50 p.m.)
The size of the Canadian Armed Forces will be reduced from the level of 107,000 reached earlier this year to an average level of 100,000 man-years in 1968-69. The growth rate in the Public Service generally through 1968-69 will be limited to approximately 2 per cent, or 5,000 additional positions.
The government has decided to defer the placing of any further new contracts for the Northumberland causeway pending a thorough review of the situation by Colonel Edward Churchill whose services have been retained as a co-ordinator of the project. The Department of Energy, Mines and Resources is being asked to defer starts on a number of projects originally scheduled for 1968-69.
There will be a slowdown in plans for the headquarters buildings of three departments in Ottawa, namely, external affairs, transport and national defence. The National Capital Commission will be asked to defer its plans for further driveway construction in the national capital area during 1968-69. The Department of Public Works has already been asked to defer its plans for the construction of a parking garage under parliament hill.
The Department of Agriculture has agreed to postpone the intended start of construction on a new headquarters building for the Board of Grain Commissioners in Winnipeg. Plans of the air services branch of the Department of Transport for commencing work in the construction of a third runway at the Montreal international airport will be deferred.
As you can see, Mr. Speaker, all departments are affected by this program, which is vital for the preservation of a sound economy. But what are the suggestions of hon. members of the opposition, who criticize our actions in restricting our spending program and bringing about a small increase in taxes? From reading Hansard of September 27 it will be seen that the hon. member for London (Mr. Irvine) wished the government to reduce the tax on production machinery. On

DEBATES	December 11, 1967
October 10 the hon. member for Saint John-Albert (Mr. Bell) wanted the tolls on the Saint John harbour bridge removed. On September 25, according to Hansard, the hon. member for Kootenay West (Mr. Herridge) wanted veterans pensions and disability allowances to be increased. Again on September 25, the hon. member for Carleton (Mr. Bell) wanted the pensions of retired civil servants increased. On that date also the hon. member for Saskatoon (Mr. Brand) wanted a C.B.C. station to be built in Saskatoon. Also, the hon. member for Churchill (Mr. Simpson) wanted the roads to resources program to be resumed.
On September 26 the hon. member for Chapleau (Mr. Laprise) asked for increased funds to be made available for house construction. On September 27 the hon. member for Northumberland (Mr. Hees) asked for assistance to be given to those sectors of industry and agriculture that would be affected by the Kennedy round. Also on September 27, the hon. member for Brome-Missisquoi (Mr. Grafftey) wanted the government to reverse its decision to withdraw from the HARP program. On October 3 the hon. member for Yukon (Mr. Nielsen) asked for access roads to be constructed through to the Alaska panhandle.
I could go on and on repeating such suggestions, Mr. Speaker. The ones I have enumerated have been made since September 25. One can realize, therefore, that the opposition lacks seriousness when making its charges. It is totally unable to suggest anything constructive.

Now, Mr. Speaker, let us go back to the serious aspect of this problem.
During this fiscal year, the federal treasury is lending a net amount of $608 million to Central Mortgage and Housing Corporation for housing and other related purposes, after taking into account the reimbursements which we receive. We are also lending a net amount of $167 million to the Farm Credit Corporation. We are advancing $60 million to the War Veterans Loan Board for housing and farm credit purposes. The scope of those lending programs will have to be reduced. I am sure that we can do it without any serious results for our economy.
On the other hand, two of our large-scale lending programs will terminate in 1968, Expo, and the Municipal Development and Loan Board. So, in the future, we can expect
December 11, 1967	COMMONS
to recover a part of the monies loaned under these two programs.
To summarize, Mr. Speaker, the government is severely restricting its expenditures and its loans as part of a program to control the inflation of prices and costs and to reduce the excessive pressure being felt on our capital markets.
The tax squeeze necessary at this time may somewhat slow down the growth of our national production next year but this is better than a serious recession later on.
If we cannot, as individuals and organizations, exert the necessary restrictions on price, cost and wage increase, the only other solution will be a collective tax squeeze exerted by parliament. An ounce of prevention is better than a pound of cure. When the government and parliament have taken the necessary steps to brake our expenses and to cover them through tax revenues, those steps must then be accompanied by a serious campaign to obtain, through volontary co-operation, a major decrease in the excessive growth rate of prices and costs, including salary increases.
The present cycle of inflationary increases in prices and costs must be brought to an end, and a way must be found towards conditions enabling all Canadians to work, to purchase, to sell and to invest, confident that with the years their money will keep its full value. To the extent where we can mobilize efficiently public opinion to fight for those objectives, and thwart the initiatives of those who clearly take advantage of their strong position in the market to obtain inflationary increases, we will achieve a higher level of employment, production and income, as well as price stability.
In conclusion, Mr. Speaker, I must say this government shows that it is realistic and strong when it proposes concrete measures to maintain the continued progress of our economy.
Far from creating an unhealthy climate, as the opposition would lead us to believe, those measures tend to reassure the people of our country and to maintain their confidence in our present economic stability.
Canada's future is bright and promising. We should all be proud to be Canadians and to work untiringly for the welfare of all our fellow citizens.
DEBATES	5271
The Budget-Mr. Danforth
[DOT] (4:00 p.m.)


Mr. H. W. Danforth (Kent (Oni.)):: Mr. Speaker, as a result of the introduction of this so-called mini-budget and its effect on our agricultural industry I have felt obliged as never before to stand up in this house and try to put on record for the consideration of all hon. members the plight of the agricultural industry in Canada today.
We have asked the government questions from day to day in an attempt to reflect the feelings of the farmers of Canada and it has become clear that government spokesmen have two answers to these questions and submissions. They say, first of all, that the farmers of this country never had it so good. Two examples are given in support of this contention. It is stated that the gross national agricultural product for 1966 was the largest ever achieved by this country. That is true. It is also stated that measures introduced by this government when the dairy industry was in trouble have led to a reduction in the dairy surplus, that the average return to producers of milk for manufacture has increased from $2.65 to about $4.35 per hundred. This also is true.
Spokesmen on behalf of the government have also pointed out that measures taken on behalf of the farmers have led to the provision of increased credit through increases in the funds available to the Farm Credit Corporation, and that more money is also available for farm improvement loans and farm syndicate loans. This is true. The government also claims to have carried out in a varying measure the program of subsidization of agriculture at a cost last year, I believe, of some $158 million if my memory serves me correctly. This is true.
We, the members of the Conservative party in this house, know that despite these claims agriculture in Canada is today facing what is probably its greatest financial crisis in the history of this country. In these circumstances we have, personally and as a party, refrained as much as we could from trying to take partisan advantage of the situation. We have sought to offer constructive suggestions in our speeches and in our questions we have attempted to ascertain the policy of the government in this field. In addition we have tried to take an active part in the work of the standing committee on agriculture.
In connection with the standing committee on agriculture I should like to point out that
December 11, 1967

The Budget-Mr. Danforth invitations to attend its sittings were extended to all farm groups across the country as well as to members of other interested organizations. These invitations were eagerly accepted, presentations were made, and members of the committee asked searching questions. My only disappointment was that I felt the proceedings were terminated just as the committee was beginning to understand the difficulties of the dairy industry, just as it was beginning to understand the problems facing the sugar beet industry, just as members were beginning to form an idea as to the government's long term policy in connection with agricultural matters.
If conditions in the industry are so good and if the government contends that farmers have never had it so good, then why has there been such a rising tide of protest within the industry of late? What led thousands of farmers to march on this capital city? What is the reason for all these emergency meetings of farmers across this country? Why has there been so much talk in the news media about the threat of strikes and sympathy for strikes among the farm population? Why have provincial meetings been held with the encouragement of provincial ministers of agriculture in an attempt to see whether some of the problems facing the industry can be solved?
Having worked and lived among farmers all my life, and as a man who is proud to be one of them, I say that these extreme measures are taken by farmers only when the economic burden is greater than they can support. Farmers are not prone to draw publicity to their plight. They are men who would prefer to run their own affairs on businesslike lines and take their fair responsibility for the operations they carry on. This being so, protest marches and threats of strikes indicate beyond a doubt to anyone who cares to look that agriculture is indeed in a precarious position. In the few minutes allotted to me I should like to present a picture of the state of agriculture across this country, starting with the west.
Everyone thought that our extensive sales of grain and our long term contracts with countries abroad would place us in a position to export all the grain we could grow for years to come without any problems whatever, and that these tremendous sales of grain would provide a substantial economic cushion to the advantage of the government. But one has only to travel in the west today and witness the gloomy picture there to think


otherwise. The discouragement felt by these farmers, whose granaries are bulging with first class produce, is evidence that something is drastically wrong in the prairie provinces. One has only to visit the machine dealers, the grocers, or those who make their living selling farm supplies, fertilizers and services, for confirmation of this impression. One has only to look at the files of accounts receivable to find out that all is not going well for grain farmers in the west today. In spite of snide remarks about southern vacations and Cadillacs, there are thousands of grain farmers who are worrying about how they will provide groceries for their families in the next few months. Farmers are more worried about meeting their commitments for fertilizer or financing next year's crop than they are about vacations, investments or anything else.
This is indeed a sad state of affairs considering that the farmers have in their granaries and on their farms the very equity which should provide the finances for their necessary operations. I say to this government: When you see farmers writhing under economic pressure, when you hear of emergency farm meetings and threats of strikes, the time to take action is immediately. I maintain that an entirely new approach should be taken in the west so as to advance the credit which these farmers need. I suggest that the present limits be examined carefully with a view to determining whether they cannot be extended. Cash advances to western farmers have never been a financial liability so far as I am aware. It is my experience that when these men have received money in advance they have been the first to meet their obligations as they came due.
[DOT] (4:10 p.m.)
The time has come to look again at the financial picture in the west. There are two things these farmers need. The first is immediate financing to tide them over and the second is increased sales so that they can finance their own business through movement of the wheat and other grain they have on their farms.
Moving a little farther east, let us look at the dairy picture. It is indeed true that the price of manufactured milk has increased. It is indeed true that this part of the dairy industry is better off than it was a year or two years ago. But, Mr. Speaker, this is far from utopia. There is something drastically wrong when we see so many cream depots
December 11, 1967

being shut down. There is something drastically wrong when we see so many cheese factories being shut down. There is something drastically wrong when local dairies are vanishing and are being replaced by amalgamated dairies. There is something dreadfully wrong when we see dairy herds being dispersed literally by the thousands.
The government can rightly say that dairy production is as high or higher now than it has ever been, but this is thanks to the farmers, not thanks to the government, because the farmers have increased their own efficiency, upgraded their cattle and used new techniques so that more milk can be produced with fewer cattle. However, this can only go so far. Efficiency of this kind can only block economic reverses to a degree. We will soon find ourselves in the position of a country that is no longer the producer of a vast surplus of dairy products but one which is hard-pressed to produce all its needs itself, if in fact we have not reached that stage already and are importing some of our dairy produce requirements.
What about the tobacco crop? This is of great importance to my province of Ontario and to a lesser degree to the province of Quebec. It brings in millions and millions of dollars of revenue each and every year. But what is the present position in the tobacco industry? Looking at the records we find that tobacco acreage has dropped steadily over the last ten years, both for burley and flue-cured tobacco. However, 1967 will show an increase in the number of acres planted, but anyone in the industry knows that this is due to the fact that Rhodesia, one of the main suppliers of tobacco to European markets, is no longer able to look after those markets as it normally would because of the trade sanctions in force against Rhodesia. Some of our tobacco crop is filling the gap, but we never know from day to day when trade in Rhodesian tobacco will open up once more and we may not be able to hold our present European markets. Those in the tobacco industry are not looking to the actions of this government with any keenness or enthusiasm.
What about cattle, hogs and sheep? In the cuts in expenditure which the government has announced for next year it is removing the subsidy on hogs and sheep. This subsidy is designed to encourage quality production and assists in increasing productivity. How in the world can we increase productivity when this subsidy is being removed, not at a time when the price of hogs is at the top but at a
27053-333}
The Budget-Mr. Danforth time when it is the lowest it has been for a number of years? If the government contemplated saving money through the removal of this subsidy it should have taken this step when prices were high and not at a time when the producers are encountering difficulty. This step, as a matter of fact, may deal the death blow to the sheep industry, much to the dismay of the manufacturers of Canadian wool and woollen products.
What about the fruit and vegetable industry? This industry is looking at the GATT treaty with a great deal of suspicion. It is suspicious when the government talks about freer trade among nations. Fruit and vegetable growers know that if the present small tariff protection in force against imports from other countries, chiefly our neighbour to the south, were to disappear much of the valuable Canadian fruit and vegetable industry would also disappear. We cannot compete in fruit and vegetables because of our geographical location and because of the fact that our crops come on the market at a time when overflows from the United States come in and take the major part of our own domestic market. Growers of spring lettuce, cantaloups, cauliflower, celery, greenhouse tomatoes and cucumbers are in a dire predicament today, and if the tariff protection disappears they also will disappear from the scene.
What about corn and soybeans? The price of corn is down drastically compared with what it was one year ago, and the same applies to soybeans. As a matter of fact the soybean association is pressing for a subsidized floor price for soybeans. This is the first time in years that the price of soybeans has dropped so much.
What about canning crops? They are in as dire straits as they have ever been. One may ask why. It is hard to say whether it is due to lack of policy on the part of the government or due to the policy of the government, but the fact remains that talk about a reduction in the tariffs on imports of canned fruits and vegetables and the rising costs of production in Canada have encouraged large Canadian companies to erect factories in other parts of the world where they can take advantage of lower labour costs, lower produce costs and lower production costs and then ship their goods back to Canada in a semi-manufactured or wholly manufactured state, much to the detriment of our own industries.
5274	COMMONS
The Budget-Mr. Danforth
The government has to decide whether these industries should be retained in Canada and what methods it can use toward that end, whether it be by subsidy, tariff measures, quotas, or something else. A policy has to be determined. The agricultural industry cannot make long-range plans based on the policy announcements of this government. Farmers are not coming to the government seeking handouts. All they are asking is a political climate that will enable them to make a fair and equitable living on their own.
Farmers see announcements by labour unions involving wages of $2.50, $3, $3.50 or $4 per hour. They read announcements about parity with United States labour rates and as a result they wonder what is going to happen to themselves and to Canada. Will we become classed among the poor and the needy? Where is the farmers' status in the Canadian scheme of things?
Farming in Canada is undergoing tremendous changes. At present over 40 per cent of our farmers are part-time farmers. In order to educate and feed their families they must engage in other labour because they can no longer make enough money off the land. We must realize this fact and take steps to make it possible for them to take advantage of farm improvement loans in order to increase their own efficiency. Changes in legislation may be necessary to make it possible for farmers to get such loans even though a large part of their income at present may not be derived from agriculture.
[DOT] (4:20 p.m.)
The government has patted the farmers on the back for achieving increased efficiency and productivity, but each year farmers are getting farther and farther behind economically. There is no question that greater efficiency and increased production are being achieved. Production this year is up 9 per cent over last year. When one takes into account the reduction in the number of farms over the last 20 years one finds that during the last ten years the efficiency of the Canadian farmer has increased by 122 per cent. During that time the number of farms fell from 732,000 in 1941 to slightly more than 430,000 today. When we talk about the increased efficiency and increased production, let it be noted that in Ontario in the last ten years there was a 37 per cent increase in output with a 32 per cent decrease in farm workers on 5 per cent less land. I believe this is an efficiency of which the farmers can well
(Mr. Danforth.]
DEBATES	December 11. 1967
be proud. There was a loss of over 100,000 farm labourers in the farm industry. The farm labour population in the last ten years has dropped from 13 per cent of the labour force to 7 per cent of the labour force.
What about the cash return to farmers? I found out that in 1964 total cash receipts for the farms of this nation were in the order of $3,500 million. In 1965 this figure had increased to $3,775 million, an increase of 8.2 per cent which was then a record high. But when we look into the situation we find that farmers last year borrowed $201 million in farm credit compared with $13 million ten years earlier. In farm improvement loans they borrowed $202 million. So in order to farm today they have extended their borrowings by $400 million.
When I speak of the total gross cash receipts of farmers today I should like to point out that I looked into something else. I asked the question, how was this achieved, and I found that in the period 1954 to 1958 the average investment of farmers in farm capital was approximately $10,679 million. I do not very often indulge in quoting statistics in my speeches, Mr. Speaker, but at this time I should like to give a little of the economic picture to show what is going on. By 1966 this investment had increased to $17,282 million or an increase, if my figures are correct, of approximately $6.5 billion. This was the increased investment of farmers in their holdings. How did their returns vary? In the period 1954 to 1958 the average net income per farm-and this is worthy of note-was $1,145 and in 1966 the average net income return per farm was $1,995, an increase of $850 in the net return per farm with an increased capital investment of $7 billion. If the average return per farm today is only $1,995, just think how poor a living farmers in the maritimes and the rural areas of Ontario and Quebec are making.
Canadian farmers talk about the cost-price squeeze. This is what they are fighting. This is what gets them up in arms. The cost-price squeeze means that their returns for what they sell are becoming less and less while their expenses become more and more. I looked into this problem. The figures to which I should like to refer appear on page 37 of a Department of Agriculture publication entitled Canadian Farm Economics. These facts and figures are interesting indeed. I should like to refer to the indices by which the increase or decrease in the economic returns today are measured
December 11, 1967

because they show why the farmers are in trouble today.
First of all I should like to refer to the index of prices received by farmers, using the two years 1947 and 1967 and based on a 1935-39 index figure of 100. The 1947 index figure for prices received by farmers was 215.8. This is the value of the prices received. In 1967 it had increased to 286.6, or an increase of 61 points. Therefore the prices index figure for farm goods increased by 61 points.
Now let us look at the other side of the ledger. What about the increase in the prices of what the farmer buys? Let us take farm machinery. Using the two basic years we find that in 1947 the index for farm machinery was 126.3 but that in 1967 it was 302.8, an increase of 176.5. What about taxes and interest rates? From a low of 125 in 1947, by 1967, 20 years later, the index figure had gone up to 147. Here is the factor which really gets the farmers into trouble. Using the 1947 index for farm labour of 341 we find that in April, 1967 the index stood at 873.3, an increase of over 500 points. This gives an indication of what is troubling the farmers today. It is just a simple matter of less returns on more money invested with a definite downturn in the economic return.
The farmers are looking for guidance, not handouts from the government. They want to know what the government intends to do to cope with the situation which has developed across Canada today. In 1963 this government promised the people of Canada a definite sugar policy. It was to be one of the first actions of the government in regard to agriculture. How prophetic they have been. If in the near future they do announce a sugar policy for Canada, it will indeed be the first government action on behalf of the farmers of this country. Not only have they not announced a sugar policy as promised but they had the temerity in 1965 to tell the farmers they already had one and did not know it.
Why do we have this lack of stability in respect of the farm picture today? I think it is because the farmers across this nation feel that the government does not take a practical approach to their problems and that everything is calculated strictly on the political approach of how many votes will it get. If it does not add up on the right side of the ledger, then there is no help.
It would appear that the government does not have enough basic facts to enable it to
The Budget-Mr. Danforth make firm decisions. I might point out a concrete example of this. Let us take the dairy industry and ask ourselves how the farmers can have a long-range policy when the government in three years has had three national dairy policies. How can they formulate a long-range policy when faced with something like that? When this government makes an error like this it draws within its shell and there is no further action for months and months.
If there is anything we can criticize the government for it is its procrastination. After five years in office the government has made no attempt to solve the basic problems which face the agricultural community. This is indeed unfortunate because the government is backed up by perhaps one of the finest agricultural bureaux in the world today but one which is hamstrung through lack of direction. There are 11,000 employees in the Department of Agriculture and it costs the taxpayers of this country $72 million per year to pay the wages of these specialists. The taxpayers, particularly the farmers, are beginning to ask what they are receiving for this money.
[DOT] (4:30 p.m.)


The Acting Speaker (Mr. Hinfret):: Order, please. I regret to interrupt the hon. member but his allotted time has now expired.


Harold Warren Danforth: Mr. Speaker, I ask for the
indulgence of hon. members. I believe I can conclude in two minutes.


The Acting Speaker (Mr. Rinfret):: Does the hon. member have the unanimous consent of the house to continue his speech?


Some hon. Members:: Agreed.


Harold Warren Danforth: Thank you, Mr. Speaker, and I wish to thank hon. members for their indulgence.
In conclusion I say that the farmers of this country are worried today because the government does not appear to have the answers to these problems. In fact, there seems to be ample proof that the government does not even know what the problems are. The government has established a national dairy commission to find out what is wrong in the dairy industry. It has established a national feed grain commission to find out what is wrong in this area. The government has appointed a task force in respect of agriculture to decide what the long-range policy should be. It has also set up a commission on

December 11, 1967
The Budget-Mr. Olson farm machinery prices to study increased prices for farm machinery. The farmers want action. As the hon. member who preceded me said, we have all these commissions and studies but we have no action.
One of the basic mistakes the government made was to split the Department of Agriculture under so many heads including the eastern agricultural administration, the Minister of Forestry and Rural Development (Mr. Sauve), the Minister of Trade and Commerce (Mr. Winters), and the Minister of Transport (Mr. Hellyer), who is concerned with the transportation of grain. We are now going to have a new minister of consumer affairs who will be dealing with prices. The department has been split up to such a degree that the farmers are becoming sick and tired. The Minister of Agriculture (Mr. Greene) has been reduced to nothing but a purveyor of Liberal propaganda instead of the minister responsible for deciding government policy in respect of agriculture.
In view of all these circumstances, Mr. Speaker, the farmers of Canada have no alternative but to request us to do everything we can to remove this government from office.


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to take the opportunity the budget debate provides to make a few comments about the proposed tax structure amendments we hope will be coming before the house within the next few weeks. The reason I should like to comment on this matter at this time is that in my opinion some damage has been done to the economic plans for development in certain parts of the country as a result of the misconception, if that is the word, which surrounded the royal commission on taxation shortly after its recommendations were made public.
Its recommendations suggested a number of profound changes in our tax structure. Indeed, I think it would be fair to say that the acceptance of its recommendations would involve a completely new tax structure compared with the one in existence today. This proposal caused some uncertainty in the minds of those who plan for industrial and commercial development because it wrongly presumes, in my view, that the recommendations of the Carter commission should be the nucleus around which the new tax structure should be built.
I am grateful to the Minister of Finance (Mr. Sharp) for inviting comments from interested groups all over Canada on the

Carter recommendations? We are also grateful that he made it clear in his speech to the house several weeks ago that the government intends to produce a white paper outlining government policy and that the report of the royal commission would be a useful document but not necessarily the basis upon which government policy would be built.
Having said that, let me hasten to add that there are many good and perhaps ingenious suggestions in the Carter commission report. It is not, however, the beginning and the end of all the amendments required in our tax structure. Whether or not one agrees or disagrees with what the royal commission recommended, there are some areas where insufficient study has been made or at least insufficient attention has been paid to recommendations in respect of equalization of the tax base or contributions. There are suggestions in other areas which are so far reaching it is difficult, indeed impossible, to anticipate the results of their application to tax law. As the Minister of Finance said several days ago in the house, it is unwise for any government to attempt to apply laws when it is impossible to anticipate the results with some accuracy. This is particularly true of tax law because it is so vital to the growth of industry and commerce and to the welfare of Canadians generally.
In looking at the whole matter in what I hope is an objective way I suggest that members of parliament should be concerned about drawing the attention of the minister to inequities, loopholes and injustices of all kinds which exist in our present tax structure. Perhaps they should also make suggestions as to ways and means of correcting these inequities and injustices. It is not my belief that we can suddenly reach a point at which we can set aside everything we have followed over the years and introduce a completely new concept. We must move gradually in this field.
Those of us who have taken some time to study the Carter commission report will recognize that the original suggestion was that this new concept must be accepted in total or rejected in total. I suggest that view is unacceptable. There are some recommendations which ought to be accepted but certainly we should not accept the whole package. I am pleased to note that there has been some retraction of the assertion that we must accept the whole package or leave it alone.
December 11, 1967

[DOT] (4:40 p.m.)
One of the reasons which make the Carter concept objectionable concerns the complexity which would be involved in the keeping of the necessary accounts in order to report to the Department of National Revenue. I should like to quote from the Montreal Gazette of Tuesday, November 21, which contains a report of a meeting of the Canadian Institute of Chartered Accountants held in Montreal. The report is entitled "Carter Too Complex". Here is what was said with reference to the Carter report:
We foresee great difficulties in the administration of a system which depends for its success on the willingness of all citizens to maintain full records of their financial transactions.
I should like to say that one of the greatest objections that farmers raised when I met them recently concerns the accounting they must do not only for income tax purposes but for the Canada Pension Plan, the Unemployment Insurance Commission, and all the other agencies which demand statistics and figures with regard to the operation of individual farms and ranches. If accounting on an accrual basis rather than on a cash basis were introduced, as suggested in the Carter report, the complexity of accounts which farmers must keep would be increased. I suggest that regardless of whether or not the amount of taxation would be greater there would be a great deal of resentment simply because of the increased complexity in reporting income.
I suggest also that we consider some other suggestions of the Carter commission. I believe that farmers would also resent the recommendation of the commission with regard to capital gains. For example, if there were to be only a once in a lifetime allowance of $25,000 on capital gains which could be transferred from father to son or to some other member of the family, it would be the end of many farms. Let us say an arbitrary figure would be set as to the value of the farm and all the assets attached to it based on market conditions or the market for land in the immediate area. The result would be that the farmer and his family, with the exception of the $25,000 exemption, would be forced to raise the income tax in cash based on the regular income tax rates. Farmers would have to sell a large portion of their land to meet the cash requirements of such a tax.
Another recommendation made by the Carter commission concerns the integration of family income, which might be a little
The Budget-Mr. Olson easier to apply to farmers than to others. But even this would be extremely difficult and I suggest that on these grounds alone this recommendation would be rejected by the farming community.
I should now like to say a word concerning the ro3'al commission's recommendations with respect to resource development industries. One thing we must realize is that a great deal of the important resource development in Canada is undertaken by companies which are active on an international scale. In other words, the creation of a large measure of employment for Canadians is based on capital which could just as easily be spent in some other part of the world where the competition or the risk factors involved might be smaller. This is particularly true of the petroleum industry, but I suggest it is also true of many other resource development industries.
As is suggested by the royal commission on taxation, it is not a question of whether certain capital is invested in petroleum, copper mining or iron mining but whether it will remain in Canada and be invested in risk development or whether it will be used for essentially the same kind of development in other parts of the world. In other words, it is not a question of whether $100 million, for instance, is invested in the petroleum industry or in some other industry in Canada but whether or not the money remains in Canada, because unfavourable taxation structures in Canada might induce a particular company to use its $100 million for risk exploration and development in the same industry in some other part of the world. Throughout the years Canada has been known as an attractive place for petroleum investment and exploration, not because there is a lower risk factor involved here or a lower cost of development but because there has been a better political climate in Canada than elsewhere. So the safety of the investment, if it proves profitable, has been considered far higher in Canada than in most other parts of the world.
I suggest we should consider our taxation law and structure with regard to resource development and we must also consider the relationship between our laws and, for example, those of the United States. There is concern in Canada today about the equity of Canadian ownership in Canadian industry. I suggest that if our laws with regard to resource development companies differ from


The Acting Speaker (Mr. Tardif):: Order. I regret to interrupt the hon. gentleman but the time allotted to him has now expired.


Erik Nielsen: This government, Mr. Speaker, is dishonest.


Robert Henry Winters: Oh, oh.


Erik Nielsen: I am not alone in believing that this government is dishonest. No less an authority than the chairman of the board of the Canadian Imperial Bank of Commerce used a like term when he referred to the economic condition that confronts the country as a result of the government's mismanagement as a massive swindle. The minister
December 11, 1967

The Budget-Mr. Nielsen has tried to hoodwink the Canadian people into believing that the government was confronted with a unique, new and therefore urgent situation which had to be met by the measures which he has included in his budget.


Mitchell William Sharp: There is the same general economic condition around the world.


Erik Nielsen: The minister says there is the same general economic condition around the world. The minister remembers as well as I do that he saw it coming and made statements to this effect, as did the Prime Minister (Mr. Pearson), over the last two years. But when he tries to have us believe both here and across the land that this is a new situation, at this point I say he is endeavouring to hoodwink the Canadian people.


Mitchell William Sharp: Oh well, perhaps that is your opinion.


Erik Nielsen: He thinks they are gullible enough to swallow this. The government goes further, cuts estimates one year ahead, and then asks the public to believe that this is going to result in substantial savings and will somehow solve the economic problems that confront the people.
I am going to refer to one or two things that the Minister of Finance (Mr. Sharp) has said in the past. He asks us to believe that this is a new situation, that an increase in personal income taxes is now necessary because the country is faced with an economic situation that could not be foreseen. The Prime Minister said at Orillia as long ago as October 13, 1965, as reported in the Ottawa Journal for the next day:
*-economic problems such as inflation would require firm action by a strong central government.
This was said, of course, during an election campaign.
Every time there is a major expansion in the economy the threat of severe inflation is inevitable. Steps must be taken, boldly and decisively, to guard against inflation, otherwise it could destroy the benefits of the boom.
When the Prime Minister was addressing a Liberal party campaign luncheon in Ottawa on September 21, 1965 he had this to say:
New programs are being prepared to assure not only that growth will continue but that its benefits will be spread among all Canadians and that the dangers of inflationary pressures and rising costs that are a part of any great expansion are contained...
Our objective is to have full medicare in operation on Canada's 100th birthday, July 1, 1967.

So much for the campaign, Mr. Speaker. As we all know, medicare became law. The legislation was passed by parliament and the target date was July 1, 1967. This date would have been met had it not been for increased inflationary pressures which caused the government to postpone it. The government's stand today is that there will be no further delay. The President of the Privy Council (Mr. Gordon) put it this way in a recent speech in Toronto:
We are going to have medicare by July 1, 1968, no ifs, ands or buts.
Here we are, Mr. Speaker, faced with the absolutely adamant stand now being taken by the government. Knowing full well the extent of the serious financial situation which they have created they are trying to shift the blame for their own irresponsible behaviour to the provinces. This, sir, is a government that has been in the hole more often than a grave digger. They have that rare gift for instant decision which is heading the country into bankruptcy. They knew as long ago as 1965 that financial problems were on the way.
How did they meet these problems, Mr. Speaker? Where was their planning? Where was the system of spending priorities that should have been established? What evidence exists as to plans to meet the critical housing situation that is now upon us and which was forecast by the economic council? If we are to take any hope from the background papers that were made available to members today at the outset of the conference now under way between the government and the provinces, there is not much expectation of any solution from these discussions.
What about the meteoric rise in the cost of living, Mr. Speaker? Remember the government's 1965 campaign advertising? The propaganda then was that the Liberals had all the answers. Where are those answers? Indeed, sir, I believe that this government has a difficulty for every solution. As I have said before and say again, whenever a problem arises they say that a study will be made, that a paper is being prepared on the matter, that it will be considered in due course-they are a "due course" government-or that a task force will deal with the matter. What their image-makers are endeavouring to accomplish is to create the picture in the public's mind that all of these enemies of the people-inflation, high living costs, lack of housing and high taxes-are rearing their ugly heads without their knowledge, of course,
December 11, 1967	COMMONS
and that the government, like a knight of old in shining armour, will ride them down and slay them with the aid of their task forces. The truth of the matter is that this Liberal government, because of its lack of discipline, its lack of organizational ability and its penchant for mismanagement, is an absolute failure. In fact, it even gives failure a bad name. Members of this government never make the same mistake twice; I will say that for them. Every day, it seems to me, they find fresh mistakes to make.
[DOT] (5:10 p.m.)
The policy of the Liberal government has been to introduce ad hoc measures. It meets situations as they arise. It panics, and it chops and changes. Invariably, instead of following a consistent and carefully planned program designed to pace Canada at an even rate of economic expansion, the government reacts by bringing in measures of short term expediency. What is the result? Everyone in this country faces higher costs, increased taxes, higher prices, increased interest rates, inflation, a critical housing situation and general uneasiness, all problems which have arisen because of the policies or lack of policies of this government.
One would think that the Minister of Finance would make an attempt to level with us, especially since his government finds itself in its present mess. But does he do that? He does not. He tries to have the people believe that the country faces a unique situation. He is astounded because we have tight money and inflation at the same time. I think that the Minister of Finance is perhaps too busy trying to maintain his personal position as one of the front-runners in the Liberal leadership contest, which the Prime Minister tells us every day is not about to be waged. The Minister of Finance is supposed to control the purse strings of the federal treasury. Because of the way he manages money, sir, confidentially, it shrinks. Our money is worth less today; it will buy less than ever before in our history.
The most astounding part of this whole, sorry mess is that the Prime Minister, the Minister of Finance and the government had ample warning. They were all aware of what was happening from the beginning. I cannot refrain from interpolating at this point that I have discovered the real reason for the quarrel between the Minister of Indian Affairs and Northern Development (Mr. Laing) and the Secretary of State (Miss LaMarsh). It hinged on the promise of $3.5 million to be
DEBATES	5281
The Budget-Mr. Nielsen made available to the constituency of Niagara Falls.
One expects leadership from the Prime Minister but obviously he is not giving it. Indeed, it is my observation that the Prime Minister is about as necessary to this government as a fence around a cemetery. The Minister of Finance deluded himself, which seems to be easy for him, with false hopes that all would be well. But he was in the position that he could not impress on the cabinet the need for action and therefore he could not impose the required measures. Under the circumstances he has persistently shut his eyes to the fact that inflation is* getting worse and worse, that high prices are undermining economic growth and that the expenditures of the government are adding fuel to the fire.
The government has been and is now all sail and no anchor. On June 1 of this year the Minister of Finance, as recorded on page 860 of Hansard, said:
By December the economic situation had improved, the rate of expansion in demand had clearly moderated and it did not appear necessary to introduce further measures of fiscal restraint.
Those words were spoken less than six months ago. Now, almost six months later, the country is faced with acute inflationary tendencies. Inflation is still sweeping the country. The Minister of Finance has been forced to impose a third tax increase in three years in order to pay for the government's immoderate expenditures. The government has been warned by those in the money markets that it can no longer borrow with ease and that anxiety and uncertainty are rampant in the country. What plans has the government, apart from hitting the taxpayer again and again, for dealing with the mess it has created? So far as constructive ideas and planning are concerned the members of the Liberal government grope like blind men. This Liberal government, which in 1965 had all the answers, is as broke as a pickpocket in a nudist colony. The only time members of the government know where they are going is after they have taken castor oil. Their conduct is such that they no longer have the confidence of the majority of Canadians.


Arthur Laing: You are embarrassing the members on your own side with that kind of language.


Erik Nielsen: The minister says that I am embarrassing the members on my side of the house.
December 11, 1967

The Budget-Mr. Nielsen


Arthur Laing: Yes. That is awful.


Mr. Matheson:: Everybody in parliament is embarrassed.


Erik Nielsen: If the minister would try to exercise some responsibility in his own portfolio he would not embarrass himself and his government, as he is now doing in the whole of northern Canada.


Arthur Laing: Will the hon. member tell us what is going on in the Yukon today?


Erik Nielsen: I can tell the minister what is going on. The Minister of Transport went up there to address a public meeting and ten people turned up to meet him. When the name of the Minister of Indian Affairs and Northern Development was mentioned those at the meeting booed. That is the regard in which the policies of this government are held in the north.


Arthur Laing: We shall see about that.


Erik Nielsen: We shall see about that. I am sure that the Minister of Transport must have told the Minister of Indian Affairs and Northern Development about the regard in which the government is held by those in the north. If he is honest with himself he will know that I wish to help him.


Arthur Laing: Well now, this is different.


Erik Nielsen: I want to see the minister back on the rails and I want to see him adopt the policies which were initially developed to help the people of the north.


Arthur Laing: I have had the hon. member's help in the past.


Erik Nielsen: When election time comes I shall not help the minister. Between elections my job here is to assist in bringing about creative policies for the north.


Some hon. Members:: Oh, oh.


Erik Nielsen: I will tell the minister one thing. I have never spoken at a public meeting in the Yukon and been booed.


An hon. Member:: Oh, oh.


Erik Nielsen: The government is giving the country vague and evasive answers and those who sit on this side of the house are forced to the conclusion that the government is deliberately avoiding answers to questions. One thing is certain. Whether or not my words embarrass members on this side, no one can call the Liberals cheap politicians.

Look at what they are costing the taxpayers. I believe that the people of Canada are beginning to recognize this government for what it is and perhaps for what it is not.
On November 1 the governor of the Bank of Canada said in Winnipeg that the central and supreme fact of economic life in this country is inflation. He also said that this government has contributed to that inflation by its extraordinary and premeditated demands on the money market in its haste to be all things to all people. Yet last June the Minister of Finance said that in the present economic circumstances-he was speaking of the circumstances as they then existed-he no longer wished to restrain capital expenditures. That statement was made last June, six months ago. It was made in the course of a budget debate, and because it was made on that occasion it was the policy of the government not to restrain capital expenditures. I mention this because the minister's halo of martyrdom is wearing a little thin.
[DOT] (5:20 p.m.)
Speaking in the supply debate on November 20 the minister stated, with that great humility of which he is so capable:
I have been the one in this country who has recognized this problem more quickly than the Leader of the Opposition and more quickly than anybody else in this house.
Well, if he did recognize it in 1965, as I am sure he did, why did he and his colleagues not do something about it?


Some hon. Members:: Hear, hear.


Erik Nielsen: It is precisely this holier than thou attitude which makes the minister's position so indefensible. He may have recognized the situation more quickly than anybody else, but last June he was saying that further measures of restraint were not necessary and that the government no longer wished to restrain capital expenditures. Those were his words and he cannot get away from them. They were made in the course of a budget speech and they therefore represent government policy, just as it is the deliberate policy of the government to let Canadians pay through unemployment and high taxes for its own fiscal immoderation. I will refer to this in detail.
This is a stereophonic government, Mr. Speaker, talking out of both sides of its mouth at the same time. Here is something else which may embarrass hon. members opposite: I believe this government has just
December 11, 1967	COMMONS
about as much conscience as a fox in a chicken farm.
The Minister of Finance (Mr. Sharp) took exception to what the Leader of the Opposition said in a debate on October 4 last in connection with the necessity of allowing slack to develop in the economy as a deliberate part of government policy. When the Minister of Finance referred to "slack" in his speech he meant unemployment. The minister tried to backpedal when he recognized the disastrous implications of his statement but he was unable to do so. This is what he said as reported on page 2809 of Hansard:
It has been a really quite successful transition except for one thing, Mr. Speaker, and that is that the rate of increase in costs and prices is still much too high. I feel that we must-and we will-find some way to bring this inflationary movement under control even, if necessary, by letting the economy develop a little more slack for a year or two while price and cost increases taper off. We would certainly prefer to avoid the sacrifices of production and income which this would, of course, involve, but if we cannot collectively and individually exercise the restraint that is called for in wage and price increases in the present situation, then there would appear to be no escape from an essential cooling off period.
The only possible interpretation here is that as a matter of deliberate government policy there is to be a slackening in economic growth and an increase in unemployment. Indeed, the increase is upon us since approximately 5 per cent of the labour force is at present unemployed. Yet these are the same hon. gentlemen who, when in opposition, wrung their hands and cried havoc for two years while the former Conservative government was wrestling with the unemployment created by its Liberal predecessor.
Talk about hypocrisy. This sort of attitude is as hypocrytical as a funeral director trying to look sad at a $10,000 funeral. The fact is that we overcame the unemployment left by the Liberals. Now hon. members opposite are deliberately creating it again. I repeat what the Leader of the Opposition said on the occasion of his participation in the debate to which I have already referred: We will not accept that kind of policy. My hon. friend went on to say:
-surely there Is some more civilized way of achieving price stability than by slowing down the economy and deliberately increasing unemployment.
Certainly there are more civilized policies which could be followed. The economic council has put forward certain recommendations, Here again the minister and his colleagues, who were so harshly critical of the
DEBATES	5283
The Budget-Hon. J. P. Cote former Conservative government for not following advice, take a most peculiar attitude toward the recommendations of the council. Remember, this is a body which the government itself set up; it was a brainchild of the Prime Minister. The Minister of Finance now tells us he cannot see his way clear to accepting its advice. He found that the views, of the council were pessimistic. As a matter of fact, the views of the council were, if anything, optimistic. The council wanted the minister to fly by instruments; instead he is flying by the seat of his pants. These are the harsh, simple realities. Painful though it may be to advert to them, it must be done.
Unemployment is running at 5 per cent of the labour force in spite of a drop in the labour force. Lay-offs are taking place all across the country. Where does this lead the man we so often hear described by the hon. member for Verdun (Mr. Mackasey) as "the guy with the lunch bucket"? The Prime Minister and the Minister of Finance tell us everything is fine. The Minister of Finance is an incurable optimist. If he fell from a skyscraper he would say, passing the 30th floor: So far, so good.
In the meantime the cost of living continues to increase. Taxes go up and will go up again next year. Every time we look the other way another department is added to an already bloated administrative machine and another minister to the cabinet payroll. There are 28 of them now, I believe. The number of persons employed in the civil service increases at the rate of 1,000 a month. The Minister of National Revenue (Mr. Benson) optimistically says he hopes to limit the additions to 5,000, with 2,000 going immediately to the post office. What a hope!
As has been said so many times during this debate, the government has indeed lost the confidence of the people of this country. It has certainly lost the confidence of members on this side of the house, and if members on the other side did not allow their partisanship to blind them they would support the amendment which is to be voted on this evening.


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I did not choose this place in the order of speakers which allows me to take part in the debate right after the hon. member for Yukon (Mr. Nielsen) and, moreover, I have no intention of answering him, because it is not my practice to make partisan speeches.
5284	COMMONS
The Budget-Hon. J. P. Cote
I will not begin my speech by accusing the opposition with being dishonest, because I do not think it is, no more than the hon. member for Yukon believes that the government is dishonest. I am convinced that it is possible in this house to have discussion without accusing one another of dishonesty, and to raise the level of speeches.


Some hon. Members:: Hear, hear.
[DOT] (5:30 p.m.)


Joseph Julien Jean-Pierre Côté: I must take this occasion, Mr. Speaker, to refer to the post office resolution which was defeated during this session. From my association with the members of all parties in the house I feel certain that its rejection was not a personal attack on me or on my administration of the Canadian post office. Hon. members have received much evidence over the last few years to demonstrate that nothing I would do in regard to the Canadian post office, nothing I would do in regard to this chamber, and nothing I would do in regard to our country itself would ever be undertaken in a frivolous manner. Anything I have proposed, said or backed I have believed in sincerely, Mr. Speaker. I believed in the postal resolution which was defeated, and because I believe and because I recognize my responsibilities I want to inform hon. members that, like MacArthur at Bataan, I will be back.

Mr. Speaker, before this resolution is presented again, I would like to deal with several points which would have been considered if that important legislation had survived.
The Glassco commission recommended an improved accounting system for the Post Office Department. It was meant to include in the budget of the Post Office Department-


Mr. Lambert:: Mr. Speaker, the hon. member is out of order because the fate of that resolution has already been settled.


Joseph Julien Jean-Pierre Côté: I know, Mr. Speaker, that the house has reached a decision regarding that resolution, but I can still talk about the Post Office Department in this house.
I was saying that this new accounting system was designed to include in the budget of the Post Office Department all expenditures incurred by other departments and government agencies. It has been adopted and has dispelled forever the illusion that our budget was always well balanced.

DEBATES	December	11. 1967
A recommendation of the Glassco commission was immediately replaced by another. After setting down the operating costs, a new system was established to breakdown these costs into the various classes of mail. The system was established through the most modern techniques of statistical sampling, added to all possible variations affecting the handling of the various classes of mail.
The results achieved met exactly the wishes of the Glassco commission. In the Post Office Department, we now know the cost of handling each class of mail. We also know how the rates should be changed so that each class of mail may cover its own costs.
As I said, Mr. Speaker, the implementation of these two Glassco commission recommendations did away with this dream of a balanced budget with ten-year-old rates.
First class mail rates were increased in 1954. Thirteen long years later, we are considering a new increase. Even without a thorough knowledge of the most modern administrative technique, anyone of us can conclude that rates established in 1954 are obsolete in 1967, unless everything has remained at the same point, such as the mail volume, the number of employees required, the salary levels and the requirements of the service.
For the last part of the fiscal year 1967-68, the handling cost of first class mail will exceed anticipated revenues for that class of mail.


Marcel Joseph Aimé Lambert: On a point of order, Mr. Speaker. I deeply regret to interrupt the hon. minister, but he is apparently bringing forward the arguments which he should have raised the other evening and which are directly related to the resolution which he introduced. If he wants to deal with the general administration of his department, we are willing to let him do so, but frankly, Mr. Speaker, I feel that the hon. minister is now out of order.


Joseph Julien Jean-Pierre Côté: Mr. Speaker, on the point of order, I am now discussing the general administration of the department and as administration is based on revenues and expenditures, I suggest that this is essential, since the department has the most substantial revenues within the government and if the Post Office Department is to be dealt with, it is necessary to refer to its revenues.


Marcel Joseph Aimé Lambert: But, Mr. Speaker, the minister should not be allowed to use the back door if he has been forbidden to enter through the front door.
December 11, 1967


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I am not submitting a resolution to the house at this time. I am not trying to do by the back door what I could not do by the front door. This is only a speech on the budget and I think this occasion is very important, Mr. Speaker, because we can discuss the revenues and the expenses of the government.


Edward Nasserden: On the point of order, Mr. Speaker, I believe that the Postmaster General at the beginning of his remarks was actually reflecting on a decision already taken by the house.


James Allen (Jim) Byrne: You did not raise the point of order then.


Edward Nasserden: It is still a point of order. What he has been saying since is substantiating the accusation he made at that time and so is part of the original reflection on a decision already taken by the house.


Mr. Cole (Longueuil):: Mr. Speaker, I never accused anyone. I simply took my responsibilities, and if the resolution was not passed, as I said at the outset of my remarks, that did not reflect on anyone. I never accused the opposition of anything, and I can take my own responsibilities.


Mr. Depuly Speaker:: Order. When the
Postmaster General was making his remarks earlier I did not interpret them as being a reflection on a vote of the house and I am sure he did not intend them to be so. However, I should say to him that we are engaged in the budget debate and I am sure he will confine his remarks to the financial matters that are before the house.


Joseph Julien Jean-Pierre Côté: That is exactly what I am trying to do, Mr. Speaker.

For the last part of the 1967-68 fiscal year handling costs will exceed anticipated revenues for first-class mail. Our figures-I mean our forecast for first-class mail, in 1968-69, except for international airmail-show a $17 million deficit. Those figures apply to the cost of handling letters and indicate that cost will exceed anticipated revenues at the present rates. The total deficit foreseen for 196869, on the basis of the present rates, is $96 million and we want to reduce it to $55 million.
The Budget-Hon. J. P. Cote
So, Mr. Speaker, I submit that it was with a full knowledge of the facts, that that resolution was worked out and introduced in the house. I knew, at the time, that it would not be a popular move, but I also knew where my duty and my responsibilities lay-


Mr. Churchill:: Mr. Speaker, I rise on a point of order. Twice your attention has been called to this minister using the device of the budget debate to make excuses for the failure of his presentation of a resolution which the house defeated some time ago. I think this is quite contrary to the rules. He is now debating a matter which was debated and settled by the house. A decision was reached with regard to it and he should not be raising it again now.
[DOT] (5:40 p.m.)


Joseph Julien Jean-Pierre Côté: Mr. Speaker, every time the Postmaster General brings his estimates or any proposal before the house, he is always asked for additional information.
Members want to know why the Post Office Department had 41,000 employees in 1962-63 and has 48,000 in 1967-68. They also want to know why it was possible to balance the budget in 1962-63, whereas a $96 million deficit is anticipated in 1968-69.
Mr. Speaker, in my opinion, it is very important for all members, on either side of the house, to obtain as much information as possible.
I said at the outset that I only had myself to blame if the resolution was rejected by the house.


Marcel Joseph Aimé Lambert: Do not talk about that resolution.


John Cole: You are the one who
is talking about it, not me.


Marcel Joseph Aimé Lambert: No, it is the minister who is referring to it, Mr. Speaker.


Gordon Minto Churchill: The government house leader should have helped you out but he was asleep too.


Joseph Julien Jean-Pierre Côté: No, Mr. Speaker; I take the responsibility for that.

I must first answer for my duties and my responsibilities.
5286	COMMONS
The Budget-Hon. J. P. Cote
Therefore, as I said at the outset, the resolution which I submitted was quite justified, and I think it will be submitted again at the very beginning of the next session, so that we can meet the required time limit of rate increases and justify the operating cost of the department, while taking into account the quality of the service which the Canadian people already receive and is entitled to receive.
People ask this question: But what is going on in the Post Office Department? I answered part of this question. Now, let me go on, so that I may give you more explanations.
First and second class rates may not be changed without the approval of the house. All the other rates may be changed on the authority of the Postmaster General. If we study the changes made under his authority between 1961 and 1968, we note that all mail categories, other than the first and second class, produced additional revenue totalling $180 million. In other words, Mr. Speaker, all mail rates which do not fall within the jurisdiction of parliament were increased and brought in additional revenue of $180 million. Those new rates, and the resulting income, are based on the principle that each mail category must pay for itself. If the resolution had been examined and had become law, we would have been in a position to increase third class rates, known also as advertising mail.
Hon. members will recall that I announced earlier this year an increase in the rate of the second weight unit for third class parcels. I specified at the time that this was a temporary increase. It was, in fact, temporary, since third class rates with regard to mail handling, cannot be the same as those applying to local mail. Consequently, third class rates cannot be changed without changing those applying to local mail. My intention was to announce an increase in third class rates effective July 1, 1968. It is still my intention to do it, because I am convinced that the hon. members will give me the support I need at the proper time.
Mr. Speaker, I have other statistics to impart to the house; at this time, however, I should like to mention two other points which were embodied in the resolution which I should have liked parliament to pass. One of these has to do with the duration of contracts-


Stanley Howard Knowles: Mr. Speaker, I raise the same point of order that has been raised

DEBATES	December 11, 1967
before. I have no objection, and I am sure members of the house have no objection, to the minister reporting to us in a general way on the work of his department and particularly with respect to the financial implications of aspects of its work, but it does seem to me that he is violating the rule when he repeatedly returns to the resolution. I believe that he could make his speech more cleverly-and I say this in a kindly way-if he would avoid any reference to the resolution. He keeps returning to the resolution. He says it was responsible and he suggests that it is one which members will support the next time. He is making a speech in support of a distinct proposition which the house has rejected so far as this session is concerned. I do not suggest that the minister should be prevented from speaking about the affairs of his department but I ask, Mr. Speaker, that you apply the rule which states that there shall be no further references to a resolution on which the house has taken a decision.


Mr. Deputy Speaker:: Order. At this time I think I should point out to the minister that he is quite in order in discussing the financial affairs of his department or the operations of his department. However, a reference to the resolution which the house debated some time ago may be in contravention of some of the citations. I should like to refer the minister to citation 148 of Beauchesne s fourth edition:
(X) It is a wholesome restraint upon members that they cannot revive a debate already concluded; and it would be little use in preventing the same question from being offered twice in the same session if, without being offered, its merits might be discussed again and again.
Again, I refer the house to citation 149(a):
Besides the prohibitions contained in standing order 35, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not:	(a) refer to any debate of
the same session on any question not then under discussion: nor-
Further along citation 149(k) reads as follows:
-reflect upon the past acts and proceedings of the House;
I suggest that perhaps the debate would be more in order if speeches were confined to topics more in keeping with a budget debate.


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I could probably talk about the increase in the volume of mail, for instance. I might say that mail volume has increased by 20 per cent
December II, 1967	COMMONS
since 1962-63. I might add that 5,123 million items are now distributed per year, compared to 4,254 million items in 1962-63. Furthermore, the establishment has grown from 41,500 to 48,000 employees since 1963, an increase of 17.6 per cent.
[DOT] (5:50 p.m.)
I can say that this personnel was required to meet a 24 per cent increase in the volume of mail and, to be more accurate the 2,896 new mail carriers needed to serve our expanding localities represent 40 per cent of the staff increase.
That is a service that cannot be limited. Besides, as far as the Post Office Department as a whole is concerned, there is not a single service that can be limited. Each new baby, each new immigrant increases the load of the Canadian postal service.
The mail carriers now deliver mail to 3,840,000 homes and businesses, an increase of 27 per cent since 1962-63.
As all businessmen in this house know, in any industry, salaries or, if you prefer, the cost of labour, constitute the lion's share. That is a fact in the Post Office Department, where labour plays a leading part. In fact, salaries represent 67 per cent of the total operating costs. From 1962-63 to 1967-68, the cost of salaries increased by $113 million, divided equally between an increase in the establishment and a rise in the salaries.
The cost of transportation and that of salaries, established at 67 per cent, represent 88 cents of every dollar paid for operations. To complete this picture, I point out that 8 per cent of the estimates are for premises and 4 per cent cover all other items of administration.
Mr. Speaker, I apologize for having taken so much time but these facts had to be made known to the public. Businessmen and the general public have a right to know what the Postmaster General intends to do.
Mr. Speaker, the Post Office Department presents a unique challenge. This most imposing of all government departments, this service which concerns all Canadians, is a real industry. Following the recommendations of the Glassco commission, this department can now give a precise report of its profits and losses.
However, unlike a Canadian industry in the private sector, the Post Office Department cannot decide the wages it will pay its employees; Treasury Board has control over salaries. The Post Office Department cannot recruit personnel and promote its employees;
DEBATES	5287
The Budget-Hon. J. P. Cote that right belongs to the Public Service Commission. The Post Office Department cannot say how much it will charge for those two main services, because it is parliament, and parliament alone, which can set the rates for first and second classes. And, to crown it all, it is the Department of Public Works which is responsible for the construction and maintenance of buildings.
It is not surprising, Mr. Speaker, that some unrest exists among postal employees. When they discuss with the management, they realize that they are trying to find solutions to problems over which the management has no control. All these facts make me feel very responsible. I must assume my responsibilities toward postal employees and I must take a stand on all postal matters, including the introduction of bills in the house.
There was some question, Mr. Speaker, of changing the Post Office Department into a crown corporation. It may be that this should be done, since it involves a profitable undertaking. In this way, this important government undertaking could be operated freely as a private enterprise, without all these outside controls of government. I am very close to what is happening in this field in the United States and I am particularly interested in what is happening in Great Britain, where consideration is now being given to a bill that would change the Post Office Department into a crown corporation. The responsibilities of my office lead me to pursue consideration of such a project.
As I said at the beginning, Mr. Speaker, I feel deeply committed to the house, to the Post Office Department and to all the Canadian people. I feel I must do everything possible so that the services rendered by the Canadian Post Office will remain the best in the world. This is the position I must take, even if an unpopular measure has to be introduced and reintroduced. That is why, Mr. Speaker, I wish to remind all the members that I shall return.


Edward Nasserden: Mr. Speaker, would the minister permit a question? Did I understand him to say that $180 million in new revenue was collected as a result of an increase imposed by ministerial decision without reference to parliament?


John Cole: If the house will permit me to answer the question, what I said was that rates can be established by the Postmaster General by regulation. First and
5288	COMMONS
The Budget-Mr. Gilbert second class rates are statutory and it is about them that hon. members have voiced some objection. In any event, since 1961 the department has, under the regulations, increased rates for all non-statutory classes. As a result of these increases the post office has collected $180 million more since 1961. That is why I suggest the other rates should also be increased.


Mr. Deputy Speaker:: Is the house ready for the question?


Mr. Rapp:: Let us call it six o'clock.


Mr. Deputy Speaker:: Do hon. members wish to call it six o'clock now?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: It being six o'clock I do now leave the chair.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Mr. John Gilbert (Broadview):: Mr. Speaker, for some unknown reason it was predicted in press and radio reports over the week end that we in the New Democratic party would vote against the non-confidence motion which is to come to a vote tonight. This is quite incorrect, and no spokesman of this party gave any such indication. We do not agree with everything the Conservative party members have said in support of their amendment, but basically it is a motion of non-confidence in the government because of the imposition of unnecessary taxes on the people least able to pay them. When we proposed our subamendment last week we sought to make this point in even stronger terms, but there has never been any question as to how we will vote tonight. We shall vote for the non-confidence amendment and against the government.
For most Canadians, the mini-budget presented by the Minister of Finance (Mr. Sharp) represents mini-thinking and miniconcern by the government. In their speeches, my colleagues have stated that at this time the budget is unnecessary, contradictory and inequitable. It is unnecessary because the additional revenues to be gained for the current fiscal year are minimal and therefore the mini-budget could have been delayed until the spring. The government did

DEBATES	December 11, 1967
an effective job of scaring the Canadian people by telling them that taxes were necessary to fight inflation and that personal income tax would probably be increased by about 10 per cent. Apparently the plan was that the Minister of Finance would then increase the personal income tax by about 5 per cent and tell the people that in the circumstances they are very fortunate. I suspect that the minister will add the other 5 per cent in his spring budget, on the basis that it is necessary to cover the expenses of medicare.
This was the minister's approach when he introduced the $30 supplement to old age pensions. He told the Canadian people: "If you want social security measures, you will have to pay for them", and he then increased the ceiling on the old age security tax from $120 to $240. This is the "teacher with the cane" attitude adopted by the minister. He does not search for ways of increasing productivity or cutting down on government expenditures, such as defence spending, to cover the expense of social benefit measures. He prefers to ignore this approach and to make Canadians pay for these measures out of their own pockets.
We in the New Democratic party have stated that the budget is contradictory in that the measures contained in it will sharply reduce demand and will probably increase unemployment from the 4.7 per cent at which it stands now to a much higher percentage. The spring of next year will be the testing time for the minister's measures.
The minister ignores that the alleged inflation is not the traditional supply-demand inflation but rather a cost-plus inflation which requires a different approach than he has taken. The problem does not stem from too much demand, but rather from the fact that prices and profits are out of control. This does not of course apply to housing. That is why we in the New Democratic party have urged the establishment of a prices review board to settle this problem by persuasion and, if necessary, by legislative action. However, the Minister of Finance prefers to develop a surplus of labour on the market in an attempt to solve the problem.
We have also said that the burden of taxation is inequitably distributed in that the weight of tax increases falls on the working people of the country. It is obvious whom the government represents. It does not represent the average Canadian but rather the upper income Canadian, and it is prepared to protect this small group of people at the expense
December 11, 1967	COMMONS
of the rest of the population. We suggested that, in accordance with the recommendation of the Carter commission, the minister should obtain the required money from large corporations, mining companies, and oil and insurance companies. But he chose to ignore these recommendations. His approach is that these large corporations support him at election time and therefore they must be protected in between elections.
The hon. member for Verdun (Mr. Mac-kasey) criticized the New Democratic party for supporting certain parts of the Carter report, but ignoring the basic principle that the report should be accepted as a package. Of course the government rejects the report completely, but that does not bother the hon. member for Verdun. He then asked us why we did not support certain recommendations in the report affecting trade unions, co-operatives, and social security benefits for workers. Of course the hon. member did not mention that the sweeping reforms in the personal income tax rates recommended by the Carter commission would offset the changes affecting these groups of people. The result would be a reduction of 10 per cent for persons in the lower income bracket of $5,000 or less and 7 per cent for those whose incomes are between $5,000 and $10,000. This would cover most Canadians, but the government has tended to ignore them and is fully protecting those in the upper income group.
[DOT] (8:10 p.m.)
Probably the most disturbing part of the budget was the part in which the minister made his remarks about reducing government programs. He stated, as recorded on page 4904 of Hansard for November 30:
Our problem in regard to the demands we make on the capital market arises, as I have indicated, not only from our spending programs but also to a large extent from our lending programs. In the current fiscal year for example we are lending from the treasury to the Central Mortgage and Housing Corporation for housing and related purposes a net amount of $608 million, after taking into account repayments we receive.
We are lending to the Farm Credit Corporation for farm mortgages a net amount of $167 million. We are advancing to the Veterans Loan Board for housing and farm credit purposes $60 million. The size of these lending programs will have to be restricted. I am confident we can do this without serious economic effects, when account is taken of the better flow of mortgage funds we can now expect the capital market to provide.
The same approach was taken, Mr. Speaker, by the Prime Minister (Mr. Pearson) this morning at the federal-provincial conference
DEBATES	5289
The Budget-Mr. Gilbert on housing and urban affairs. He again reported that there would be a restriction on government financing. It is all very nice to have the Prime Minister state this morning that by the year 1980 two thirds of all Canadians will be living in 29 urban centres and that this year we will have 160,000 housing starts. He stated that we must co-operate; that annual volume is of prime importance with regard to housing. According to the mayors and reeves association the initiative lies with the federal government, and more private moneys are needed to meet the housing crisis. However, in summarizing all this, the Prime Minister said that the government would not lend any further financial assistance; no cash, just plenty of advice. This was the approach of the Prime Minister this morning.
Another answer the Prime Minister made to the housing problem was to suggest the establishment of a council on housing and urban development, possibly with a full time secretariat and a research division. I ask you, Mr. Speaker, how necessary is this? Last spring the minister in charge of housing went across the country conducting a housing symposium in all the major centres, collecting the required data on how to meet the crisis.
The Economic Council of Canada has made a study in depth of this problem and come up with plans for meeting the crisis. However, this approach the Prime Minister takes to the housing crisis, that we need a council on housing and urban development, is interesting. It is of interest to note that he outlined four particular changes in federal housing policy which he is prepared to implement. He uses the phrase, so far as the federal government is concerned, "as and when our resources permit". This indicates the attitude of the government with regard to meeting the housing crisis. The Prime Minister said there were four things we should do, and they were: federal financial participation in comprehensive planning of our urban regions and in the advance acquisition of land for transportation corridors and open spaces for recreation and similar community purposes; second, federal financial support for land assembly for new suburban communities; third, housing subsidy programs to serve as an integral part of anti-poverty programs in special areas characterized by general poverty, lack of employment opportunities and slow economic growth and, fourth, a more vigorous housing policy to provide housing for people on modest incomes.
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The Budget-Mr. Gilbert
Now, Mr. Speaker, he underlines that program again by saying, "when our resources permit". We in the New Democratic party take a different approach. We say that the housing problem can be solved in two words: more houses. We need more houses and we must turn our attention and energy to solving this problem. We say there are four basic rules with regard to housing which we should follow. First, housing is a basic human right of all Canadians. It is a necessity of life. We have no choice in respect of this need, nor can we postpone it. Second, housing must be designed for different stages of life, for families, for retired couples and single people. There are those who seek different styles of housing. Third, housing is only part of the total urban milieu embracing transportation, recreation, work and services. Fourth, the home and community around it determine the quality of our lives. It cannot be considered apart from questions of beauty, design and space.
What must we do to implement these proposals, and what must we do to solve the housing crisis? The first thing that we in the New Democratic party would do would be to establish a federal authority on housing and urban development, with the C.M.H.C. being directly responsible to the new minister and having the responsibility of suggesting an over-all policy for Canada, based on a survey of housing needs, in co-operation with municipal and provincial authorities. One of the things that will probably come out of this conference will be the federal government urging the provinces to establish provincial authorities. We cannot expect the provinces to set up provincial housing authorities without similar action being taken by the federal government. This would be a recognition that the initiative lies with the federal government. The Minister of Labour (Mr. Nicholson), who is in charge of housing, is too busy with labour matters. His attitude toward the housing crisis is that of a part time minister. I should say also that his sincerity is not matched by his performance which, if it were in the field of private industry, would not be acceptable.
What we do not need at this time is a council on housing and urban development. Five years from now we would have a committee to study the work of this council. What we need is a department of housing and urban affairs, with a separate minister who will take the initiative in tackling the housing crisis. Second, we in the New Democratic

DEBATES	December 11, 1967
party feel there should be a massive injection of government money into all types of housing, including low rental co-operatives and housing for senior citizens. We feel that the minimum target for the next three years should be 200,000 homes, and of those 200,000, there should be 25,000 earmarked for low income groups.
Now, one of the striking things that the Prime Minister said at the conference this morning was that the annual volume of housing is of prime importance. He is probably aware that in 1965 there were 166,000 housing starts, that in 1966 there were 134,000, and this year we are hoping for 160,000. This is in place of the statement of the economic council, that the required number is 170,000, which indicates how far short we have fallen. The council not only stated that 170,000 starts were required for this year, but this number is also required for the remaining years up to 1970. They then said that 190,000 new starts would be required, and another 10,000 to replace older homes.
o (8:20 p.m.)
When one looks at future needs for houses in Canada, Mr. Speaker, he has in mind the fact that we are told that by the turn of the century there will be 35 million people in the country. According to the experts, beginning 1970 and continuing to the year 2000 Canada needs an average of 350,000 homes a year. This indicates why it is necessary to set up a separate department of housing and urban development headed by a minister who is made responsible for reaching this target. We feel it is unfair to bring 225,000 immigrants into Canada this year when we have no housing program to take care of them, of new family formations and the resulting increase in our own population. The prime minister of Ontario said this morning that Ontario alone would need 90,000 homes for the next three years, and beyond that would need 100,000. This indicates the magnitude of the problem and the necessity for making a federal minister responsible for housing and urban development.
The third step we would take, Mr. Speaker, would be to cut the mortgage interest rate. An immediate cut in the mortgage interest rate to 6 per cent under the National Housing Act and 7 per cent on conventional loans is required. This morning the Prime Minister said that there has been a virtual freeing of the rates as a result of the new formula imposed by the government. We all know that the new formula has now resulted
December 11, 1S67	COMMONS
in an N.H.A. rate of 8| per cent and a conventional rate of from 8 to 9 per cent. The increase in mortgage interest rates will not necessarily increase the number of housing starts. But what it does do, as we have seen, is to add to the cost of a house. With the maximum mortgage of $18,000 bearing an interest rate of 3j- per cent, by the date of maturity of the mortgage the mortgagor has paid $42,000. If the mortgage is a conventional one at 81 to 9 per cent, the range of payment is between $45,000 and $50,000.
The government is depending heavily on private lenders to take care of the mortgage crisis. We can say unequivocally, Mr. Speaker, that in no small part the mortgage crisis has been caused by the private lending institutions, who have ignored their social responsibility in meeting the housing problem. They have stepped into the markets that give a more attractive return. They have lent their funds for the construction of large hotels, motels, and luxury apartment buildings and have ignored N.H.A. lending.
More especially, Central Mortgage and Housing Corporation has failed to fulfil the original purpose for which it was set up. At the moment, Mr. Speaker, in order to qualify for an N.H.A. mortgage the borrower must have an income of $8,000. This means that about two thirds of the population are out of the picture so far as N.H.A. financing is concerned. More than that, people with low incomes of $5,000 or less are cut off completely. This is one of the reasons we have a major crisis in housing today.
I suggest that after the government has set forth its program as to the number of housing starts required for the year, it should consult the lenders. It should get definite commitments, so as to ensure an annual volume of housing starts and then adjust its lending program accordingly. If it does not get agreement from the private lending institutions, it should take legislative action to direct into housing a percentage of the investment portfolio of these companies. After all, Mr. Speaker, the savings accumulated by banks, insurance companies and trust companies are the savings of the Canadian people, and the Canadian people should have some right to direct where these moneys should be invested.
There is no necessity for any differential with regard to capital that comes into Canada. The amount of mortgage money invested in Canada from the United States is very insignificant, and this has been underlined by one of our leading life insurance executives.
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The Budget-Mr. Gilbert
Fourth, Mr. Speaker, we should move into the field of land assembly and development. Unfortunately there has been little use made of section 35 of the National Housing Act which enables the three levels of government to acquire land on a shared cost basis, to develop it and to prepare it for use. The federal and provincial governments must help finance large land assembly projects and give encouragement and assistance to the municipalities in servicing lots, helping to build schools, roads, sewers, recreational and other facilities. They must be the wholesalers of land.
The highest increase in housing costs has been in the cost of land for which land speculators are to blame. We in the New Democratic party would make full use of the 50 per cent capital gains tax that was recommended by the Carter commission, so as to deter land speculation.
Fifth, Mr. Speaker, we would create a publicly owned building organization which would tender competitively on major public housing projects, thus providing a yardstick for building costs and serving as a leader in the advancement of building technology. The building industry is characterized by construction of small units, antiquated methods and inefficiency. We would also make use of the new branch known as BEAM, set up by the Department of Industry, for the purpose of increasing productivity and efficiency in the manufacture and use of building equipment, accessories and materials.
Sixth, Mr. Speaker, the government should make more use of the limited dividend provisions of the N.H.A. for public housing, low rental housing, housing geared to income, and for senior citizens housing. The present limitation of 5 per cent is not sufficient. We would recommend that the dividend return should be between 8 and 9 per cent. The reason we make this suggestion, Mr. Speaker, is that at the moment the expertise in the housing industry is in the hands of the private builders, they have the land assembly projects and the skilled tradesmen. We think they should be encouraged to use the provisions of this act. At least 25 per cent of all new housing constructed by these builders should be made available at reduced rents. It is also necessary to spread public housing throughout the community, and families of all incomes should be encouraged to settle in such dwellings. Otherwise there is the danger of creating second class citizens.
December 11, 1967

The Budget-Mr. Andras
At the moment there appears to be a breakthrough in the matter on condominium housing and the provinces, with the assistance of the federal government, should give it every encouragement. There are many retired couples living in large homes today who do not want to lose their security of ownership. If condominium housing was available, these people would retain their security of ownership, at the same time freeing their present homes for larger families.
Seventh, Mr. Speaker, we would remove the sales tax on residential homes costing up to $25,000. This would be done in the form of an abatement. We would not remove the sales tax for the more expensive homes or other buildings.
[DOT] (8:30 p.m.)
Eighth, the mortgage limit with respect to older homes should be increased from $10,000 to $15,000, to make the provisions of the act work and to revive competition between private lenders.
Ninth, we should encourage home improvements loans in every possible way. The big dip has occured with regard to housing improvement loans.
The members of the New Democratic party feel, Mr. Speaker, that the measures I have outlined will help to ease the housing crisis and will go a long way to guarantee to the average Canadian the fulfilment of a basic right, that of decent housing.


Mr. R. K. Andras (Pori Arthur):: Mr. Speaker, neither of the important measures that the government has announced, the raising of taxes and the cut-back in expenditures, can be described, by any stretch of the imagination, as politically popular measures. I think hon. members must agree that in taking such action the government displayed a great deal of political courage. That the measures were proposed and adopted shows a deep sense of responsibility on the part of the members of the government.
By introducing such measures, the government provided an opening for the opposition parties to criticize the government. The opposition parties have seized on this opening and through their criticisms have indulged in political opportunism. It might be said that the government is always fair game for the opposition, and that the duty of the opposition is to oppose and to criticize. The opposition also has a responsibility to say, in specific terms, what programs should be substituted for those that are undertaken by the government.
[Mr. Gilbert.!

Most remarks that I have heard opposition members make have consisted of generalizations. Anyone reading Hansard for the last few days will have difficulty in pinning down to concrete terms the criticisms of the opposition. In fact, in its remarks it has shown a considerable inconsistency. On the one hand it has piously decried what it terms as profligate government spending and, on the other hand, with respect of certain programs it has recommended and demanded more government spending.
This afternoon, the hon. member for Joliette-L'Assomption-Montcalm, (Mr. Com-tois) spoke of members of the opposition who had asked the government to increase expenditures on certain programs. I wish to add to what he said. The examples I shall cite are culled from Hansard over the last three and a half to four months.
On September 25, the hon. member for Esquimalt-Saanich (Mr. Chatterton) moved to adjourn the house under standing order 26. At that time he suggested that the government increase expenditures on housing and remove the 11 per cent sales tax. Also on September 25, as reported on page 2430 of Hansard, the hon. member for Carleton (Mr. Bell) recommended that the government pay increased pensions to retired civil servants.
On September 26 the hon. member for Fraser Valley (Mr. Patterson) asked for increased loans to be granted for agricultural fairs. Also in September many members of the opposition-the hon. member for Kent (Ont.) (Mr. Danforth), the hon. member for Middlesex West (Mr. Thomas) and the hon. member for Lambton-Kent (Mr. McCutch-eon)-requested extended feed grain freight subsidies to Ontario producers.
On October 3 the hon. member for Queens-Lunenburg (Mr. Crouse) asked for a second ferry service between Nova Scotia and New England. On October 5 the hon. member for Skeena (Mr. Howard) asked for assistance to be given to the herring fishery. On October 13 the hon. member for Queens (Mr. Mac-quarrie) recommended, that the government invest in a second national park on Prince Edward Island. On October 19 the hon. member for Prince (Mr. MacDonald) opposed the closing of the air base at Summerside, Prince Edward Island.
On October 23 the hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard) requested that financial assistance be given by the federal government to the city of Montreal for metro extension construction. May I also cite the
December 11, 1967

debate on Dosco. Hon. members of the opposition advocated that the government take over Dosco. I also cite the debate on the estimates of the Department of Manpower and Immigration. In October the Leader of the Opposition (Mr. Stanfield) suggested that the government drop the three year provision in order that drop-outs might receive allowances during training.
I suggest to hon. members that all the projects I have cited are worthy projects and perhaps at some stage, they should all be undertaken. We must recognize nevertheless that they carry a considerable price tag. On that ground, if on none other, I claim that the opposition has shown inconsistency by, on the one hand, demanding government expenditures and, on the other hand, criticizing the government for its so-called profligate spending.


Mitchell William Sharp: Hear, hear.


Robert Knight Andras: The opposition's inconsistency is epitomized by the two positions that the Leader of the Opposition has adopted. On one occasion he used words to this effect. "Mr. Speaker, I think anybody who suggests that you can cut down on government spending or offer a substantial reduction in taxes is not being very realistic; but any government can control the rate in the increase in expenditures." That seems to have been a realistic assessment, and it is all the more surprising that, having expressed this common sense attitude, the Leader of the Opposition should depart from that position a few days later.
I ask this question of the opposition: What further cuts in government spending does it recommend? Let us not have generalities; let us have specific proposals. What programs that have been approved by this parliament-and many of them have been approved by the majority of members of the house-would the opposition eliminate, reduce or postpone?
The government has listed the programs that are to be eliminated, reduced or postponed, and every member of this house or every member of the public can readily learn what those programs are. If the opposition wishes to act responsibly, let its members have the courage to set forth, in clear and precise terms, what programs ought to be eliminated, in addition to those which the government has eliminated, reduced or postponed. I suggest that during this debate all
The Budget-Mr. Andras hon. members had the opportunity to consider what they wanted to say. Let the opposition say in clear terms, what are the alternatives that it boasts about. Let the criticisms not be vague and general, but let them be specific and detailed.
It seems to me that with the spate of words which flow from this place-words which are often biased and inaccurate, with inaccuracies often being compounded by superficial and biased reporting-we are building a mountain of misunderstanding in the minds of the Canadian public. Believe me, Mr. Speaker, this could start a disastrous landslide some day, and that could destroy this country.


An hon. Member:: We are well on the way.


Robert Knight Andras: I sometimes wonder about our technique of debate in this house. We espouse what is known as the adversary system of debate. Essentially the theory is that merely because the other fellow, in another party, sits on the opposite side of the house, he is all wrong. From then on the debate deteriorates into a shouting match. Skill in debate, nice turns of speech and the manoeuvring for press publicity outweigh such considerations as the truth of facts and the need for objective, responsible and balanced thinking.
[DOT] (8:40 p.m.)
May I now refer specifically to taxes. Tax increases at any time are unpopular. Let me quote from the introduction by Mr. C. E. Forget to a study he was called upon to make for the royal commission on taxation. He says:
The paying of taxes has never been considered a pleasure. Most taxpayers in most countries feel most of the time that they are worse off than their equals were and are elsewhere. They are inclined to strengthen their belief with odd bits of information from abroad, gathered at random.
There are many taxpayers in this country who feel they are bearing a heavy burden in comparison with that borne by taxpayers in other nations. This is not correct, it would appear from an examination of the figures; and I believe that as parliamentarians we should, regardless of party, try to get the facts across to the people. In the course of this study the author stresses the difficulty of making accurate comparisons between taxation levels because of differences between taxation systems in various parts of the world.
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The Budget-Mr. Andras
I believe it is agreed among professional opinions that comparisons are best made by relating taxation to gross national product. This approach has two major advantages. It produces comparison results related to the size of the economy concerned, rather than directly on a currency basis and, second, it avoids the problem which would be presented by exchange rates operating when currencies are fixed at different values.
A comparison between taxation in Canada and in other countries on this basis is somewhat reassuring. I have a table here taken from the United Nations year book of national accounts (statistics), 1965. The figures given here take into account taxes at all levels of government, municipal, provincial, and federal, as applicable; they include real estate taxes, income taxes, sales taxes, excise duties, customs duties and so on. This table shows that on a basis of the gross national product the country with the highest taxation in the world is Sweden, where the percentage is 38.4. In France, it is 36.9 per cent and in the United Kingdom, 27.3 per cent. Canada enjoys a privileged position, standing twelfth on this list of 17 highly industrialized countries. In Canada, tax revenue from all sources represents 26.5 per cent of the gross national product. Only in Belgium, the United States, Australia, Ireland and Japan is the percentage lower. Thus, anyone who says that we in this country are overburdened by taxation comparatively should look outward to other countries, study the situation there and also reflect on the benefits we are getting from the taxes we pay.
A further comparison can be made on the basis of real income after tax. In other words, how much purchasing power have we left after taxes have been deducted. Again, I have a table here which indicates that while the consumer price index rose between 1957 and 1966 from 121.9 to 143.9 in terms of 1949 equalling 100, an increase of 18 per cent, per capita personal income rose from 148.5 to 228.1, an increase of 53.6 per cent, and per capita disposable income, after taxes at all levels, rose from 145.4 to 218.2, an increase of 50 per cent. I do not think this represents an extraordinary burden on the taxpayers of this country when we consider taxes in relation to the increase in real income.
Another interesting set of figures shows the effects of changes in taxation on the income of a married taxpayer, with two dependent children eligible for family allowance, earning $7,500 a year.

DEBATES	December 11, 1987
In 1950, this taxpayer paid $964 a year in federal taxes alone. In 1966-and this includes federal and provincial taxes in all provinces except Manitoba, Saskatchewan and Quebec-he paid $863. As a result of the tax changes now proposed he will be paying $958 a year. So there really has not been much change, though I suggest there has been a great increase in the services which the government has provided during the period between the years I have mentioned.
We have heard it said, particularly by members of the New Democratic party, that the tax increase now proposed is beamed entirely toward the individual and that corporations have not been called upon to take the burden. I have been doing a little research work on this subject and I have taken the trouble to find out what the position is in this country with regard to the distribution of federal taxation between the individual taxpayer and the corporations. I make no defence of corporations, except to say we are bound to recognize, whether we like it or not, that business and industry constitute one of the major segments of our society, investing money, taking risks, producing goods and providing incomes which individual citizens enjoy. All this is responsible for the standard of living we have reached. We cannot afford to kill the goose which lays the golden egg.
Here are figures taken from the Canadian Tax Journal. In the United States in 1963,
22.1	per cent of direct tax revenues came from corporations and 77.9 per cent came from individuals. In Sweden, 9.1 per cent of direct taxes was imposed on corporations and 90.9 on individuals. In the United Kingdom,
18.2	per cent came from corporations and 81.8 per cent from individuals, and in France 11 per cent came from corporations and 89 per cent from individuals. In Canada, Mr. Speaker, 35.4 per cent of direct taxes came from corporations and 64.6 per cent from individuals.
Thus, though it is easy to say that the corporations should be soaked, we must be awfully careful lest we kill the goose which lays the golden eggs.


Mr. Schreyer:: Would the hon. member permit a question for the purpose of clarification? Would he give the source of the most recent statistics he has quoted?


Robert Knight Andras: Yes, I would be glad to do so. These figures are from the Canadian Tax Journal issue of January-February, 1966 and
December 11, 1967

they are contained in an article by Marion H. Bryden.


Edward Nasserden: Very misleading.


Robert Knight Andras: During the last few years, however, the government has introduced major measures of social reform, such as the Canada assistance plan, the income supplement for the aged, medicare and so on. I personally am proud we have done these things. I think they were long past due. They were badly needed, and there are further measures in this general area of social progress which we should consider in due course.
[DOT] (8:50 p.m.)
At the same time, going back to the opinion expressed a few moments ago, there is an economic base from which all these blessings flow, and we have to protect that base. The time has now come for us to stop and temporarily digest the social reform measures we have passed, so as not to overload the economy. It is time now to turn to the theme and to the priority, and for a short period at least as a government to concentrate our investments into economic development, and let the gross national product grow so that the tax base is increased. Then we can afford to move ahead on other needed measures of -ocial reform.
One of these procedures in investment in economic growth, that of regional economic development, has to take place in a much more comprehensive form than exists presently. One can look at the growth of certain sections of the country and see how quickly they are expanding and then turn to other sections and see how slowly their rate of growth is proceeding. Something should be done in such a situation. The urban centres such as Toronto and Montreal-and we could name others-are pyramiding development in their own areas, while other sections of the country are lagging behind.
In particular the province of Ontario requires close examination in terms of subprovincial regional economic development. Ontario is recognized as a "have" province. The statistics of economic performance in Ontario are standouts, so fas as the country as a whole is concerned. But Ontario is a vast province. It contains many different kinds of regions, and there are many different economic regional activity levels in it. There is a wide disparity between the growth rate in the northern part of the province and the tremendous development taking place in Toronto and the golden horseshoe, extending 27053-334
The Budget-Mr. Andras
down to Niagara, Windsor and back to Toronto.
The situation in that southern area of Ontario-and I say this without any attempt to be facetious or critical-is creating so many problems and demanding so much of the attention of the Ontario government that it simply cannot afford to devote sufficient energy, time, effort and money to many of the other sections of the province in order to plan the kind of development that we want to see take place in those sections. In my opinion many other provinces, classified as "have not" provinces, have co-operated a great deal more than Ontario with the federal governmment, particularly through ARDA programs, in seeking stimulation for the economies of their various areas. In this respect I am thinking of provinces like Newfoundland, Prince Edward Island, Quebec, New Brunswick, Nova Scotia and Manitoba! I speak with particular concern about this matter because of the situation in my constituency and in my area of northwestern Ontario. We would be incorrect if we were to describe this as a disaster area. Up to the present time we have continued to enjoy reasonable levels of employment, but it is a slow growth area.
With this thought in mind, some 18 months ago I made a number of specific recommendations for the framework of an economic development plan for the area. I negotiated these recommendations with the federal government. The response was encouraging, and I got written approval form the minister of forestry (Mr. Sauve) that ARDA, under the federal administration, would assist in financing the kind of research that had to go into it. Simultaneously with these negotiations with the federal government, I spoke with many people at Queen's Park and in the Ontario government. While the approval came from the federal government many months ago, apparently I have not been a good enough spokesman to move the Ontario government to any action whatever. I say this in a non-partisan way because in the province of Manitoba, which enjoys a Conservative government, as does Ontario, the exact opposite has been the case.


Mr. Reid:: May I ask the hon. gentleman from Port Arthur a question. Does he know of any other plan which the Ontario government has undertaken, under ARDA or any other program assisted with federal money, that would be comparable to what he has proposed?
December 11, 1967

The Budget-Mr. Andras Mr. Andras: The answer to that question is very easy. There has been no similar activity by the Ontario government under ARDA, as compared with the provinces of Nova Scotia and Manitoba in which it has co-operated with the federal government in such programs.
This is the sort of thing that has led some of us to think some rather radical thoughts about our political set-up. Several months ago I wrote what I considered a rather whimsical article suggesting that we should consider a separate province for northwestern Ontario and northern Ontario. I know that my hon. friend from Kenora-Rainy River (Mr. Reid) made a similar suggestion in the house the other night. I am not sure that this is a wild idea. I think that for some long time to come the Ontario provincial government is going to be preoccupied with the demands and the problems of southern Ontario, so that it will not be able to turn much attention to the areas of northern Ontario which demand planning and development.
Some of us, members of different parties in this house, have recently talked to Mr. Kier-ans of Sudbury. I had a most interesting discussion with him a few days ago regarding his proposal for the establishment of an institute for northern development. I told him that I would prefer that it be called an institute for regional development. I do not think that stress on the word north is what we need now. I believe we need a real study into the formation of a national program for regional economic development, whether that development be in the north, south, west or east. This again brings up juridictional problems, the kind of problems I have faced in my negotiations with the Ontario government, which is responsible for regional subprovincial economic development. It seems to me that basically such development is the responsibility of the provincial government and that the federal government can assist only if it is invited to participate. Most certainly this is the view that Queen s Park is taking. Something has to happen to get these areas going which do not enjoy the same rate of growth as the six or seven very affluent areas of the country. I believe that during the discussions next month in the federal-provincial conference, which basically will discuss federal-provincial relations, this matter of regional economic development should 

be placed on the agenda and thoroughly discussed in order that jealousies and jurisdictional problems and other impediments can be removed.
I appreciate the opportunity, Mr. Speaker, to set these views before hon. members of the house, and I hope particularly that my argument about the need for a regional economic development program on a national scale will receive full consideration.
[DOT] (9:00 p.m.)


Hon. E. D. Fulton (Kamloops):: Mr. Speaker, this house will be called upon very shortly to vote on the amendment, the motion of non-confidence moved by my colleague, the hon. member for Perth (Mr. Monteith), as our response to the budget message delivered by the Minister of Finance (Mr. Sharp). My purpose in participating in the debate at this stage is to review the situation of the country in the context of that amendment and to endeavour to show that every branch of the amendment is justified, and that it should command the support of the house as a serious condemnation of the government, and I say a serious condemnation of the government in the full realization of the implication of those words if the amendment should carry. I hope the amendment will carry because in my view it is in the interest of the country that it should carry and that the government should be forced to resign.
In the amendment now before the house there will be recognized to be three phases. The first is the accusation that the government has created the situation, the mess, to which this budget and the resolutions dependent upon it are supposed to be the response; that is, that the government is responsible for the situation which has brought about this budget. The second phase of the amendment is that the answer of the government is completely inadequate. Their answer is to impose taxes-to increase taxes-which is a completely inadequate response and in no way at all meets the situation which they in fact have created. The third accusation in the amendment is that the taxes-the very measure now proposed by the government-are not only unnecessarily burdensome but may themselves actually aggravate the inflationary condition to which they are supposed to be the answer.
Those are the three branches of the amendment. I should like to develop each one in detail in order to show that they are justified and should indeed command the
December 11, 1967

support of every responsible member in this house.
I shall deal first with the accusation of mismanagement and vacillation. Well, sir, it seems to me that it should not be necessary to advance too much detail in this regard. The fact is that in this year we have had two diametrically opposed budgets. Nothing can more clearly prove the charge of mismanagement and vacillation. There has been a complete change in the government's position between the budget brought down in June and the budget presented to the house within the last two weeks.
I know that the Minister of Finance (Mr. Sharp) says the reason he brought down a second budget is because the circumstances have changed. I say to him that his statement is completely inaccurate and amounts to a gross misrepresentation. The reason he brought down the second budget was not because the circumstances have changed but because the government has grossly overspent and therefore has to impose tax burdens upon the country in order to meet its bills. By its overspending it has dried up the capital markets. The Minister of Finance realizes they are no lower available to him. Therefore, he had to introduce a budget to raise more revenues to pay his bills.
This is not a change in circumstances, because that overspending was the deliberate result of the minister's first budget. In his first budget and in the estimates for 1967-68 which he presented in this house he deliberately forecast expenditures in the sum of $9.5 billion to $10 billion in this fiscal year. That was not an accident. Except in so far as the minister was unable to restrain his colleagues, that was his deliberate purpose. He budgeted indeed at that time for a deficit in the order of $750 million, three quarters of a billion. He had to introduce his second budget, the one we are dealing with, because he found he could not get the money to meet the level of expenditures he himself had imposed upon the country. There is no change of circumstances. This is a budget, a measure of taxation increases, made necessary by the minister's fiscal mismanagement.
There is in addition this feature about his budget: The minister has presented it as an anti-inflationary budget, as an instrument which he tries to pretend is good fiscal management in responding to changed circumstances. Sir, this is not an anti-inflationary budget: It is a revenue raising budget pure and simple. It is a budget to raise the revenues the government now finds it needs in

The Budget-Mr. Fulton order to meet its own grossly inflated spending programs. It is not a management budget. This collection of individuals opposite making up the cabinet has never had the ability to manage. But, sir, even if they ever had it, they have now lost that ability; they have piddled it away. Even if these individuals have now lost it by their own mismanagement.
Second, I should like to demonstrate conclusively that it is in fact the over-expenditure by this government which has created the situation with which we are now faced. Let us look at a few of the figures which are relevant in this connection. Since the 1963-64 fiscal year when this government assumed responsibility-I will not say power, because they have never been able to exercise power since they assumed responsibility-the levels of federal government spending have increased by some 65 per cent. In this period of just over four years the level of civil service employment has increased at a record pace.
I realize that it is not a valid criticism just to talk about the increase in the number of civil servants or the increase in the amount of their salaries; one must ask: What value is the country receiving for these increases? I defy any member of this house to tell me that the 65 per cent increase in federal spending and the record increase in federal payrolls has been matched by a corresponding increase in service to the country.
All that has been happening is gross overinflation in civil service payrolls and in government spending authorizations.
In support of that statement I should like to cite a Canadian Press dispatch which appeared in the Vancouver Sun-which is not a paper favourable to the party to which I have the honour to belong-of October 19, 1967. In examining the figures the Vancouver Sun reports as follows:
Civil service employment has been creeping up steadily from its wartime peak of 116,000 in 1945.
But it didn't really start to surge until the start of 1965. Since then it has increased by an astonishing 9 per cent.
Then a little later on the report continues:
The budget estimate for civil service payrolls in the current fiscal year is $1.3 billion, an increase of 44 per cent in three years.
It will take the combined personal income tax revenues from Toronto, Montreal, Vancouver, Winnipeg and Hamilton to cover the bill.
Most of the staff increases can be traced to an unprecedented upsurge in the creation of new departments, agencies and programs.
December 11, 19S7

The Budget-Mr. Fulton That is a statement of the facts-an unprecedented upsurge in the creation of. new departments, agencies and programs unmatched by any increase in real services or real production for the people of Canada.
But when faced with this criticism-these facts-unfortunately the minister, on behalf of the government, instead of recognizing that the government is at least partly to blame for the inflationary pressures, indulges in a form of political finger pointing, as thought he were a small boy saying, "Yah, you too."
If we could see on the part of this government any readiness to recognize its responsibility for creating, or contributing to, the situation or to respond by mending their ways, then one might have to be more temperate or more moderate, if you like, in the criticism we make; but unfortunately one sees the reaction only of small politicians, because when faced with this statement of fact by the Leader of the Opposition the other day, what was the response of the Minister of Finance? His reply was typical of a government which is more obsessed with political justifications than with the responsibilities to the job it has to do.
[DOT] (9:10 p.m.)
So the Minister of Finance contented himself by saying that the record of the present Leader of the Opposition, as premier of Nova Scotia, had been even worse than the record of the present government. His only answer was to point to the situation in Nova Scotia, Let me read from page 5215 of Hansard for December 8, where the minister is reported as having said:
Between the years 1956 and 1966, a period when my hon. friend occupied the position oi premier of that province, the public service of Nova Scotia, those in government employment, rose from approximately 10,300 to 14,419. This is an increase of just under 40 per cent. In the same period the number of civil servants in Canada rose from 336,000 to 361,000 approximately. This is an increase of 311st about 7 per cent. These are comparisons that I think should be brought to the attention of the house.
Well, Mr. Speaker, may I ask what kind of a minister is this and what kind of an inept answer is that? If it were an answer at all, it is still a completely political answer. Even if the comparison were apt or fair, to say to somebody else that your record is bad, therefore mine is good, is not an answer. This does not justify to the slightest degree the lack of responsibility and fiscal restraint on the part of this government.


And of course, the situations are not comparable, so the minister's reply is not even apt in that respect. One must look at the question in the light of the starting points. It was recognized by our party and by the government which we formed in the years between 1957 and 1963 that there was a disparity between the levels of the economy and of government services as between the maritime areas and the rest of Canada. We as a responsible federal government deliberately encouraged and made it possible for the government of Nova Socia, as well as other maritime governments, to increase the level of their government services.
As a measure of federal government assistance we introduced the Atlantic Development Grants Act, and it was in response to that act that the government of Nova Socia and the governments of other Atlantic areas were encouraged to increase the numbers of their federal civil servants and the number of government services they could render to their people. That increase in Nova Scotia civil service was the deliberate result of a deliberate federal policy, and all that the Minister of Finance has said provides a record of the beneficial results of the deliberate, responsible, intelligent and effective federal government policy of those days.
Again in respect of this matter of mismanagement and vacillation, it becomes quite apparent that in spite of what the government has been saying, it realizes that it is overspending and that this overspending is one of the major contributory factors to the inflationary trend from which the country suffers today. Let me now prove this point.
The government deliberately estimated for a budgetary deficit of $750 million this fiscal year. That estimate has now risen, as a result of the supplementary estimates, to over $800 million. The sorry fact is that the government really does nothing about this present situation. It has done nothing about one of the root causes of the inflationary trend, that is, its own gross overspending. It has done nothing about its overspending for this year.
But in answer to the criticism-which he recognizes in his heart is valid-the minister makes the pretence of doing something by discussing next year's projected expenditures. So, we have an exercise by the President of the Treasury Board (Mr. Benson) a couple of nights ago when he listed a long and exhaustive mass of detail about possible reductions in next year's spending programs. Of course
December 11, 1S67

this was nothing more than an exercise in a shallow pretence. No single phrase of that minister's speech can demonstrate this shallow pretence more clearly than one to be found at page 13 of the advance text of his speech which was distributed to us. He said:
We are now approaching the final stages of the 1968-69 estimates exercise.
That is all this great build-up, fanfare and publicity about the huge saving the government is going to make next year amounts to-nothing more than an exercise. It is just that-an annual exercise in the process of the review by the Treasury Board in its regular course of paring the departments' official submissions down to that which comes out in the blue book of official estimates.
A true measure of the folly and the fantasy to which we were subjected last week is shown by some of the so-called savings that are to be made. There was a list of some four or five pages presented. Let me give you some choice examples of these great savings to be made on behalf of the taxpayers of Canada. At page 17 of the advance text we are told:
The special planning secretariat within the Privy Council office will be disbanded: henceforth its essential functions in the field of co-ordination of social development programs will be carried as part of the normal operations of the cabinet secretariat.
We are then left with this disturbing question: If this is part of the normal operations of the cabinet secretariat, why on earth was this put elsewhere in the first place? How in heaven's name does this return to normal lead to a real saving?
Another example is this:
Financial provision for the Company of Young Canadians will be reduced by 20 per cent from the $2.4 million budgeted for the current year.
I am sure the people of Canada will welcome that huge saving of 20 per cent of $2.4 million budgeted for the Company of Young Canadians. I go no further, but the implication is obvious.
The next example appears on page 19 of this advanced text. It states:
Provision for staff travel throughout the public service is being cut by a full 10 per cent from departmental requirements as submitted in estimates for the year 1968-69.
Bully for you boys. But how much was submitted for last year? Departmental travel possibilities for next year is being cut by 10 per cent. I am sure the Canadian people can

The Budget-Mr. Fulton be expected to cheer about this real saving which will represent such hypothetical hardship to the government. Surely this is a nonsensical statement.
This is the vein in which these examples can be repeated. For instance, we are told the external affairs department planned to open two new diplomatic missions abroad in 196869, and trade and commerce planned to open three new posts. These plans are to be deferred as a reuult of the hard and ruthless decision of this government.
Again, according to the speech of the Minister of National Revenue and President of the Treasury Board there will be a slowdown in the plans for headquarters buildings for three departments in Ottawa, namely external affairs, transport and national defence. These are not projects already in existence, they represent deferments and great savings in respect of things that might never have happened anyway. Is it not amazing that the three departmental headquarters to be deferred do not include the department headquarters of the minister? It is well known that these plans included the construction of an elaborate and expensive new headquarters building for the Department of National Revenue. One might have thought that when the minister was asking for these great sacrifices on the part of his colleagues he would have been willing to set a practical example by cutting out his own departmental headquarters. But no, the measure of the government's seriousness in this program is contained in the words of the minister to his colleagues when he said "you must defer your plans, but mine of course are essential". So the Canadian people are going to pay for a new national revenue headquarters building but are invited to rejoice in the amount of these other so-called savings.
[DOT] (9:20 p.m.)
I could go on, but perhaps this is the peach of them all. I refer to item No. 38 on page 25 of the advance text of the statement of the Minister of National Revenue, which reads as follows:
The Transport Department has also been asked to defer all reconstruction and improvement work on the Rideau and Trent canal systems other than that which is absolutely necessary to maintain the systems in proper operating condition.
What else could the expenditures properly have been expected to cover other than to
December 11, 1967

The Budget-Mr. Fulton maintain the canal system in proper operating condition? But that is the nature of the whole fantastic operation, namely raising to the level of a virtue the cutting out of frills and reducing expenditures to what is necessary to maintain the government service in proper operating condition. I do not think I need say more to demonstrate the fantasy and futility of the operation to which this parliament and the country has been subjected by the government.
But what about priorities? What has been done while this exercise in futility has been going on? What has been done to produce a proper program of priorities? Nothing.
The Minister of Finance told us earlier in the session that the true measure of priorities is not what you keep at the top but what you cut off at the bottom. Let us look at this bottom-lopping exercise. What has the government kept at the top and cut off at the bottom? At the top they have kept medicare, and the Minister of Finance refuses to exercise his proper responsibility, and indulges in disgraceful political jockeying with the provincial finance ministers on whom he tries to fob off the responsibility for the program regardless of whether it should go through or not. He has stated officially that medicare remains the top priority program of the present government. But what does he cut off at the bottom? He cuts off at the bottom increases for superannuated federal civil servants who are in need of assistance who need help both from parliament and from the country. This is the measure of the minister's seriousness when he speaks about priorities and about lopping off expenditures at the bottom.


Mitchell William Sharp: Would the hon. gentleman permit a question?


Edmund Davie Fulton: No, Mr. Speaker, I have only a few minutes left in which to complete my expose. The minister has made two speeches already. Perhaps he will make a third one and really answer the serious criticism with which he is faced. He will not do so by asking questions. All he will do is to ask: "What is your stand on medicare?" Our stand on medicare is on the record. We moved a series of amendments when the bill was being debated in the house in which we clearly indicated the kind of medicare program that should be established, and we would accept our responsibility in that regard.


Next, Mr. Speaker, when it becomes apparent that the government is merely indulging in an exercise of futility with respect to this so-called paring of next years projected expenditures, and when they are asked what they intend to do about their current overexpenditures which are contributing so greatly to inflation, they say: "We cannot reduce current expenditures", and they distort the words of the Leader of the Opposition in support of their own futile arguments. We have heard the Minister of Finance and the President of the Treasury Board attempt to distort what the Leader of the Opposition had said. They say: "No government can reduce current expenditure programs".
Of course they cannot do so when they are so pusillanimous about it. But if they were really determined to meet their responsibility and to get the country out of the mess into which their programs and their lack of management have landed it, they could and they would reduce the current expenditure programs. Let me give the minister an example of when it was done and when the federal government accepted its responsibility, grappled with the situation, and in fact reduced the current spending programs in the midst of the fiscal year.
It was not pleasant. All my colleagues here who were in the cabinet and those who were our supporters in the party will recall how unpleasant and how difficult it was. But we did it in 1962.


Mitchell William Sharp: You were forced to do it.


Edmund Davie Fulton: The Minister of Finance says, we were forced to do it. Yes, we were forced to it because we accepted our responsibility to restore the fiscal balance of the country. But the difference between then and now is that this minister and his government do not accept that responsibility.


Mr. Macdonald (Rosedale):: You accepted it by resigning.


Mr. Regimbal:: Get back in your seat.


Mr. Monleith:: Don't interrupt.


The Acting Speaker (Mr. Tardif):: Order,
please. When the Chair calls for order, it applies to both sides of the house.


Edmund Davie Fulton: I am always glad to resume my seat, Mr. Speaker, when I see that Your Honour is on his feet. I know my hon. friends opposite do not like this. We did not like it either, but we did it-
December 11, 1967


Donald Stovel Macdonald: And then you quit.


Edmund Davie Fulton: -because the welfare of the country demanded it.


Mitchell William Sharp: You had no alternative.


Edmund Davie Fulton: I know what my hon. friends opposite will say all across the country when they attempt to answer the argument. They will say this was a special situation. We were faced with an unpleasant situation, but I say to you, sir, that as a result of the action we took in which we cut spending by a total of $250 million in the midst of a fiscal year, we laid a further basis for the program which we started in 1961, which culminated in the devaluation of the dollar in 1962, and the final stage of which was the cutting of spending programs in the middle of the fiscal year. These actions were the basis for the greatest continuing expansion of the Canadian economy that has ever been known.


Donald Stovel Macdonald: Oh, oh.


Edmund Davie Fulton: The hon. members who shout from behind the curtain do not have the courage to say it in the house. I trust, Mr. Speaker, I will be allowed an extension of time to compensate for the interruptions of the loud voiced members opposite.


Mr. Deputy Speaker:: Perhaps the house would be willing to give me an opportunity to hear what the hon. member is saying.


Edmund Davie Fulton: The fact is that these responsible actions, so different from the actions of the present government, laid the basis for the longest and most uninterrupted economic expansion in the history of the country. I do not only rely on my own words. Let me quote the words of the governor of the Bank of Canada who in his recent speech in Winnipeg verified what I have been saying. I quote the following from page 1 of the text of his speech:
To provide some perspective for my later remarks, I would like to take a brief backward glance at the great economic gains this country has achieved in recent years. We are now well into our seventh year of virtually uninterrupted economic expansion.
If we take away seven from 1967 it will take us back to 1960 or 1961 when the virtually uninterrupted economic expansion began.
Further, the Minister of Finance himself, in moments of frankness, gave credit to the
The Budget-Mr. Fulton same policies for having started the trend. At page seven of the "Economic Review for 1966" which he presented in his white paper on June 1, 1967, he stated:
The generally well balanced nature of Canada's economic progress during the years 1961 to 1965 was a notable feature of that period.
Then, in the "Economic Review for 1965", he said:
[DOT] (9:30 p.m.)
The 1965 advance in output was a continuation of the expansion which began in early 1961 and which has become the longest in Canadian history.
So, there are the facts. When a government accepts its responsibility to manage the economy, when it has the room and gumption left to exercise some management, then it can and does take measures which will put the economy back on an even keel which will once again permit advance and progress. But when a government fails, as this government has failed, to accept this responsibility, when it tries to pretend to the Canadian people that the responsibility belongs to the opposition because the opposition does not give the government a blueprint as to precisely what it should do, we see the measure of the situation with which we are confronted. We have a government here which has created a mess, and to which it now asks this parliament and the country to respond by enacting measures which are inappropriate, by enacting measures which will lay the greatest burden on those least able to bear it, the average taxpayer. This is what the minister's tax proposals will do.
This government has introduced budget proposals which, far from alleviating the inflationary pressures to which it is supposed to respond, will in fact be most likely to fan the fires of those inflationary pressure. There can be no doubt that a 5 per cent average surtax on income tax across the board will bear most heavily on those least able to bear it. There can be no doubt a 5 per cent surcharge on income tax across the board will be followed by further demands for increased wages, and rightly so. I am not condemning those who will make these demands. They will be faced with increases in costs, of course, and they will make demands. What could be more natural or more proper?


Stanley Howard Knowles: I am sorry, but I think the hon. gentleman did not hear my interjection. It is not really across the board, because it stops at $600.
December 11, 1967

The Budget-Mr. Latulippe


Mr. Deputy Speaker:: Order, please.


Edmund Davie Fulton: May I conclude with just a sentence or two. Faced with this situation tor which the government is itself is largely responsible, which has brought about the necessity tor these budgetary proposals, but with the clear evidence that the budgetary measures the government proposes will not solve but will rather aggravate the situation which they have created, I appeal to responsible members on all sides of this house to accept their responsibility and face facts. The fact is, and their responsibility is, that we will not get this country back on an even keel until we face the first necessity for accomplishing that, namely removing this government from office.


Mr. Henri Laiulippe (Compion-Frontenac):: Mr. Speaker, I am pleased to have this opportunity of saying a few words about our present economic situation, which is not only quite complex, but also seriously affected and not at all flourishing.
When we came to this house, in 1962, the Liberals, who were in the opposition at the time, were voicing the same demands and acting the same way as the Tories today.
At the time, the government was blamed for all sorts of things. It was accused of failing to take its responsibilities, of accumulating deficit after deficit, of being unable to balance the budget. It was held responsible for the inflation and general imbalance that were rampant across the country. Yet Liberals were sitting where the Conservatives now sit.
In 1967, the Conservatives sit in the opposition and blame the Liberals, but none of them suggests a real solution to the problem. None of them speaks in terms of truth, in concrete terms; none of them places himself at the level of concrete truths, of Canadian physical realities.
That political situation exists since confederation. Governments have changed from Liberal to Conservative and from Conservative to Liberal, but the situation has always been the same: always the same recommendations and the same protests. In fact, nothing has changed; the two old political parties have never changed anything in the economy. The financial economy of the nation, old as the world, has never been reformed. It has always led to the same results, either under the Liberals or under the Conservatives.

The fight is still going on; non-confidence motions are moved against the government. The Conservatives would like the present government to resign in order to replace it, but they do not have a better solution to offer.
As far as the New Democratic party is concerned, it advocates planning as the panacea for all the ills of the world but, Mr. Speaker, the parliamentary library is overflowing with treatises on planning and not one tenth of those plans have ever been successfully implemented because there was not enough money to finance them. Plans are plentiful but not money to implement them. As long as we lag behind the realities, as long as we fail to deal with the economic situation while taking them into account, we will get the same results.
[DOT] (9:40 p.m.)
Mr. Speaker, it is much easier to make Canadians accept the deficit and the tax increases by dividing the budget into three parts, because it seems that half-measures or quarter-measures are easier to accept. When the Conservative party was in power, the budget was divided into two. Now, it is being divided into three; a third part has been added to it, but that does not help the situation.
The present tax increases will hit Canadians harder than before and I would even say that these measures are robbing Canadians of their purchasing power, which is already limited. These measures are a way of controlling people. They restrict credit and make prices go up. Therefore, this will be worse than the 1929 depression, when there was a restriction of credit accompanied by a slump in prices. These tax increases by the gover-ment mean that the people are being robbed always more, increasingly controlled by the civil authorities and subjected to a greater surveillance. It means that families and individuals will be poorer. It means a form of Slavery imposed by the state. Whether the country is administered by the Grits or the Tories, it is always slavery.
We have never enjoyed a system bringing stability in Canada. We had crises, depressions, tax increases, reductions of the purchasing power, the burden being put on the shoulders of the taxpayers who cannot even provide for themselves, inflation and deflation, but stability, never.
Progress has to be paid by those who have realized it, by favouring those who produce
December 11, 1967

money. Financial exchange is accepted blindly. There are people occupying responsible positions who will never admit being a little irresponsible. Yet, on many occasions, their reasoning and conclusions have no factual basis. In other words, they are in complete contradiction with the facts before their eyes, especially with respect to economic policies. That kind of irresponsibility seems to develop among progressive countries as the population imagine that they are becoming more civilized and boast that their standard of living is improving. They lose the sense of reality which is only regained when circumstances drive them away from civilization or when they are the victims of major disasters.
Mr. Speaker, in the midst of our present civilization which is offering us an abundance of all kinds, we note that in our country and in our cities where stores are full of products, our fellow-citizens and the hon. Minister of Finance are thinking and acting solely in terms of money. If however, money is scarce, they are condemned to die in the presence of abundance which is in fact quite visible.
And so, Canada, a country which is developing magnificently, with a wealth in production and a great potential, subjects the pace of its production, as well as the standard of living of its citizens, to the fluctuations of the financial credit it may be granted or refused, that may be rationed or lavished, not by its producers, but according to the whims of the men or institutions which have taken control.
If the country were drawn into a war which would force it to devote a good part of its productive capacity to supplying machines of destruction or the flower of its manhood to kill or be killed, the present government would immediately cease to impose credit restrictions and would refuse to stop for lack of money. It would then think in terms of realities, of arms and materials. It would no longer want to be hampered by financial nonsense.
After the end of the war-


Mr. Depuiy Speaker:: Order. I apologize for interrupting the hon. member for Compton-Frontenac (Mr. Latulippe), but it being 9.45 o'clock p.m. it is my duty, pursuant to section 5 of standing order 58, to interrupt these proceedings and forthwith put the question on any amendment now before the house.
Division


Mr. Deputy Speaker:: I declare the amendment lost.


Mr. Harkness:: Mr. Speaker, I was paired with the Minister of National Defence (Mr. Cadieux). Had I voted I would have voted for the amendment.


Mr. Robichaud:: Mr. Speaker, I was paired. Had I voted I would have voted against the amendment.


Mr. Irvine:: Mr. Speaker, 1 was paired. Had I voted I would have voted in favour of the amendment.


Herbert Wilfred Herridge: Mr. Speaker, I was paired with the President of the Privy Council (Mr. Gordon) who, I am sure everybody will be glad to hear, left hospital today after a serious operation.


Mr. Salisman:: Mr. Speaker, I was paired with the hon. member for St. John's West (Mr. Cashin). Had I voted I would have voted for the amendment.


Mr. Tucker:: Mr. Speaker, I was paired. Had I voted I would have voted against the amendment.


Mr. Deputy Speaker:: Order. It being after ten o'clock, this house stands adjourned until two thirty o'clock tomorrow afternoon.


[Stage Direction]
It being fifteen minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, December 12, 1967