1967-10-10

[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: Mr. Speaker, I wish to address a question to the Prime Minister. Can the Prime Minister advise the house of the government's intentions regarding Mayor Drapeau's recently announced plan for making Expo a permanent exhibition in Canada?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, so far as I know no decision has been reached in regard to the continuation of Expo or any of its facilities by the city of Montreal. We are carrying on discussions with the city and provincial authorities in regard to these matters because, of course, the federal government is obligated both under international agreement and under legislation passed by this house to wind up the exhibition corporation and Expo on, I think, October 29. That is our obligation, and we intend to fulfil that obligation.


Mr. G. H. Aiken (Parry Sound-Muskoka):: A supplementary question, Mr. Speaker. Has the government reached a decision on the request of the directors of the Canadian National Exhibition in Toronto for the expansion of their exhibition grounds? This matter was presented to the government last year.


Lester Bowles Pearson: I think, Mr. Speaker, the request was made last year that the federal government should concern itself with the study that was being made by the Canadian National Exhibition authorities as to the future development of the Canadian National Exhibition. That matter is still under consideration.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquillam):: Mr. Speaker, I wish to direct a question to the President of the Privy Council. When
does the minister expect to receive a report from the task force which was set up to look into the extent of ownership and control by United States investors in Canada? Has he received the report? If not, how soon does he expect it; also, will it be made available to members of parliament?


Hon. Walter L. Gordon (President of the Privy Council):: Mr. Speaker, the task force is completing its work; I hope it will be finished by the end of this month or early in November. After that the cabinet will study the matter. I hope the cabinet will then approve a white paper on the study. The report of the task force itself is an internal matter, and I should not think it would be appropriate to make it public.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. May I ask the President of the Privy Council if he anticipates that after receipt of the report from the task force he will have legislation ready for the House of Commons during the present session.


Walter Lockhart Gordon: I would not think so, Mr. Speaker.



PURCHASE BY U.S. FIRM OF LAURA SECORD CANDY COMPANY

[Stage Direction]
On the orders of the day:
Hon. Michael Siarr (Leader of the Opposition):: A supplementary question, Mr. Speaker. While we are on this matter I wish to ask the President of the Privy Council whether the government anticipates intervening in any way in the proposed sale of a Canadian institution, Laura Secord candies, to a United States concern, the Fanny Farmer candy company.


Mr. Speaker:: Order, please. I doubt whether that is a supplementary question. Even if it were, I suggest that the hon. member might place it on the order paper.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO CONFERENCE ON MONETARY POLICY

[Stage Direction]
On the orders of the day:
['The Canadian government is, of course, active as a member of the 18-power committee which is discussing disarmament in Geneva and, more particularly at this time, the proposed nonproliferation treaty. The Canadian government believes that disarmament is desirable and urgent, but it also believes that this should be undertaken in a way which involves both sides.\nOctober 10, 1967\tCOMMONS DEBATES']
Mr. Real Caouelte (Villeneuve):: Mr. Speaker, I should like to put a question to the Minister of Finance.
October 10, 1967

Inquiries of the Ministry
As we have had several federal-provincial conferences on taxation in Canada, is it the intention of the minister to convene a federal-provincial conference on Canada's monetary policy.


Hon. Mitchell Sharp (Minister of Finance):: I meet with the ministers of finance toward the end of the year. I am hoping to meet with them earlier this year than last. The question of monetary policy is always discussed though it is not a specific item on the agenda.



[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: My
question is addressed to the Prime Minister. Following the discussions which were held the other day with the deputy prime minister of nationalist China, is it the intention of the government to appoint an ambassador to Taiwan?


Lester Bowles Pearson: No, Mr. Speaker. Our policy in this matter and our relations with Taiwan and continental China have not changed.


Mr. David MacDonald (Prince):: Could the Prime Minister tell us whether there was any expression of view by the Canadian government in favour of self determination for Formosa?


Lester Bowles Pearson: I do not think the subject came up in those terms. We did discuss with our guest from Taiwan, the vice premier, the whole situation with respect to China and to our policy with regard to China at the United Nations. We also heard from the vice premier a most interesting account of economic developments on the island of Taiwan.


David Samuel Horne MacDonald: Could the Prime Minister tell us whether an intimation was given that the Canadian government intended in the near future to recognize the government of mainland China by establishing diplomatic relationships with the mainland?


Lester Bowles Pearson: We discussed that question in a general way along lines which will be familiar to the hon. gentleman.
[Mr. Caouette.l


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: I have a question for the Secretary of State for External Affairs. In view of large increases announced in expenditures on arms by the Soviet government and the statement that a large proportion of this increase is intended for the supply of arms to the Arab nations, can the minister tell us whether any discussions are going on with the Soviet government in an attempt to discourage the U.S.S.R. from creating an arms race in the Middle East?


Hon. Paul Martin (Secretary of State for External Affairs):: The Canadian government has made known its support for a halt in the supply of arms to the countries in the Middle East. We have made that position known to the Soviet union as well as to some other countries. We ourselves are not shipping any arms to the Middle East.


Wallace Bickford (Wally) Nesbitt: I am very glad to hear that Canada is making representations along the lines of my question. However, I was asking the hon. gentleman this. Are any discussions going on at this moment between Canada or any other friendly government and the Soviet government in an attempt to discourage the arms race in the Middle East?


Paul Joseph James Martin: I do not know that I can give the hon. member any further information. He uses the phrase "at this very moment". We are not engaged in discussions with the Soviet union on this matter at this very moment but, as I say, the Soviet government knows our views in this regard.


David Samuel Horne MacDonald: In view of the increases in expenditure on arms recently announced by both the U.S.S.R. and the United States, will the government be taking new initiatives in discussions which are presently going on in Geneva.


Paul Joseph James Martin: The Canadian government is, of course, active as a member of the 18-power committee which is discussing disarmament in Geneva and, more particularly at this time, the proposed nonproliferation treaty. The Canadian government believes that disarmament is desirable and urgent, but it also believes that this should be undertaken in a way which involves both sides.
October 10, 1967	COMMONS DEBATES



HIGHWAY SAFETY


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, may I direct a question either to the Minister of Justice or the Minister of Transport under whose departments I believe this problem comes. In view of the highway traffic death of 78 Canadians over the past week end, and of injuries to 700 more, may I ask whether either department is expediting action in line with the report of the justice and legal affairs committee, which action may save a few lives?


Hon. Paul Hellyer (Minisler of Transpori):: Mr. Speaker, as I indicated to the house the other day I expect an announcement will be made shortly. I expect either the Prime Minister or myself will be able to make a statement later this week.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, may I direct a question to the Minister of Fisheries. How many countries have been invited to attend an emergency meeting to discuss the crisis affecting the marketing of seal skins and its impact on the sealing industry, and where will this meeting be held?


Hon.   H.-J. Robichaud@Minisler of Fisheries: Mr. Speaker, the meeting is taking place in Hamburg this week, attended by different member countries of ICNAF. During the meeting special discussions will take place on the seal situation, including the measures to be introduced for conservation of seals as well as the economic aspects of the industry. The countries taking part are Canada, Norway and Denmark.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. W. Danforlh (Kent (Onl.)):: Mr. Speaker, may I direct a question to the Minister of Forestry and Rural Development. Can the minister indicate when he will be prepared to inform the house of the terms of the freight subsidy on eastern feed grains?
Inquiries of the Ministry


Hon. Maurice Sauve (Minisler of Forestry and Rural Development):: Mr. Speaker, last week I announced that a decision was to be taken by the board. That decision will be made public some time this week.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I would like to direct a question to the Prime Minister. Can he inform the house whether consideration has been given, or a decision reached, with respect to a Vancouver city council resolution passed on October 3 and conveyed to him on October 6, asking that the government of Canada introduce an arrangement similar in effect to the former winter construction bonus to offset the increased cost of home purchase loans.


Lester Bowles Pearson: Mr. Speaker, I wonder if my hon. friend would let me take this question as notice. I shall try to reply tomorrow.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. G. L. Chatterton (Esquimalt-Saanich):: Mr. Speaker, may I direct a question to the Prime Minister. Is he now in a position to answer my question with regard to a federal-provincial conference on medicare?


Lester Bowles Pearson: Yes, Mr. Speaker. I received a communication last August, which I should have remembered when my hon. friend asked me this question last week, from the premier of New Brunswick, writing as chairman of the conference of provincial premiers which met in Fredericton. That letter brought to my attention the view of the conference that a conference with the federal government should be held on the subject of the implementation of medicare. I acknowledged that letter four days after I received it, saying the matter was under consideration by the government and when I had something definite to report I would write him again. The matter is still under consideration, and I hope to be in a position before long to reply to Mr. Robichaud.
2922	COMMONS
Inquiries of the Ministry


George Louis Chatterton: Do I take it the government has been considering whether it would accede to the request for a federal-provincial conference, but no decision has been made?


Lester Bowles Pearson: No decision has been made on the matter. We are conscious of the fact that there have been several conferences between federal and provincial authorities on this matter. We are now considering whether a request for an additional, a special conference should be considered, or whether this would be undesirable in present circumstances.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I wish to direct a question to the Prime Minister. Has he yet had an opportunity to prepare a list of the proposed legislation that the government wants the House of Commons to discuss during this session? If he has this list I think it would be advisable to have it printed in Hansard.


Lester Bowles Pearson: Mr. Speaker, my hon. friend has been very patient on this matter. The house leader has the list and he could read it out or, with the consent of the house, it could appear as an appendix to today's Hansard.


Michael Starr: I suggest that he table it and that it be printed in Hansard.


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, I will table the list later today with the understanding that it will be printed in Hansard.


Mr. Speaker:: Is this agreed?


Michael Starr: Mr. Speaker, I suggest it be printed in Hansard as though an oral answer had been given, and that if possible the legislation be given in the order in which the government wishes it discussed.


Mr. Speaker:: Is it the wish of the house that the minister's answer be taken as read?


Some hon. Members:: Agreed.
[Editor's Note: Text of the document referred to above is as follows] :
The following are legislative items which the government will ask parliament to consider during the remainder of the second session of the 27th parliament.
A bill to amend the Criminal Code (capital punishment).
[Mr. Pearson.)
DEBATES	October 10, 1S67
A bill to implement a broadcasting policy for Canada, to amend the Radio Act in consequence thereof and to enact other consequential and related provisions.
Bills consequent upon the budget resolutions.
A bill to amend the customs tariffs consequent upon the Kennedy round.
A bill to establish a department of corporate and consumer affairs.
A bill to establish the Canadian educational broadcasting agency.
A bill to amend the Patent Act and the Trade Marks Act (drugs).
A bill to amend the Canada Deposit Insurance Corporation Act.
A bill to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of January, 1967, to the 30th day of June, 1968, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
A bill to amend the Emergency Gold Mining Assistance Act.
A bill to amend the Currency, Mint and Exchange Fund Act and the Criminal Code.
A bill to amend the Post Office Act.
A	bill	to	establish a	Canada manpower and
immigration council.
A bill to amend the Industrial Relations and Disputes Investigation Act.
A bill dealing with divorce legislation.
A bill to amend the Judges Act.
A	bill	to	provide for	the establishment of a
Canada development corporation.
A bill to amend the Excise Act.
A	bill	to	amend the	Industrial Development
Bank Act.
A bill to amend the Publication of Statutes Act. A bill to amend the Unemployment Insurance Act.
A bill to amend the Food and Drugs Act.
A	criminal law bill	(Criminal Code amendments, Parole Act amendments. Prisons and Reformatories Act amendments, Penitentiaries Act amendments).
A bill to amend the Criminal Code (hate propaganda) .
A bill to prohibit the sale and advertising of hazardous substances, to amend the Food and Drugs Act and the Narcotic Control Act and to make a consequential amendment to the Criminal Code.
In addition to the foregoing items, if time permits the government would also wish to have the following items of legislation considered by parliament during the same period.
A bill to amend the Government Employees Compensation Act.
A bill to amend the Historic Sites and Monuments Act.
A bill respecting the boundary between the province of British Columbia, and the Yukon and Northwest Territories.
A bill to amend the Canada Corporations Act.
A bill to establish a corporation for the administration of the national museums of Canada.
October 10, 1967	COMMONS
A bill respecting the armed forces of countries visiting Canada.
A bill respecting interprovincial and international teleferries.
A bill to provide for the dissolution of Northern Ontario Pipe Line Crown Corporation.
A bill to amend the Canada Evidence Act.
A bill with regard to investment companies.



PUBLIC SERVICE

[Stage Direction]
REQUEST FOR REPORT ON BILINGUAL POLICY On the orders of the day:
Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, I should like to put to the right hon. Prime Minister a question of which I have given him notice.
In 1966, the Prime Minister announced a new policy concerning bilingualism within the public service. Will the house soon receive a report on the implementation of this policy, and may we expect changes?


Lester Bowles Pearson: Yes, Mr. Speaker; I would be very happy to make a report at the very earliest opportunity, perhaps on estimates. Such an appraisal would be too long to give at this time.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, I have a question for the Minister of Finance. Are negotiations under way with the province of New Brunswick with regard to the removal of tolls on the Saint John harbour bridge? If so, when will a decision be reached?


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


Thomas Miller Bell: May I rephrase the question, Mr. Speaker. Will the minister confirm the statement by the premier of New Brunswick that negotiations are now taking place with regard to this toll matter?


Mr. Speaker:: Order. I do not think the supplementary question is acceptable.
DEBATES	2923
Inquiries of the Ministry AIR CANADA



WINNIPEG-REPORTED INTENTION TO PHASE OUT OVERHAUL BASE

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North
Centre): Mr. Speaker, may I direct a question to the Minister of Transport. On Friday last in reply to questions the minister indicated that the government was giving consideration to the situation created by Air Canada's announcement that it intends to phase out the maintenance base at Winnipeg in 1969 or 1970. Is the minister yet in a position to give any indication concerning the results of that consideration?
Paul Theodore Hellyer: Not in a definitive way, Mr. Speaker, but I can assure my hon. friend that like him I have spent most of the week end thinking about it. I hope we will be able to come up with some satisfactory solution in the not too distant future.


Mr. Knowles:: Would the minister be able to come up with something at ten o'clock in a night or two?



WHEAT-DISCUSSIONS RESPECTING SALES TO RUSSIA OR CHINA

[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, my question is for the Minister of Trade and Commerce but in his absence I should like to direct it to the minister acting for him at the present time. The question arises out of a report in the Financial Times of October 9. In view of the fact that Canada has an anticipated wheat crop of close to 600 million bushels, contrary to July forecasts of 400 million bushels, and in view of the unsettled world price for wheat, can the minister say whether any discussions are under way with either the Soviet union or China with regard to next year's sales?
I should like to ask another question in this regard. Are the reports true that no shipments of wheat have been made to China within the last six weeks?


Lester Bowles Pearson: Mr. Speaker, I shall be glad to take the question as notice. The Minister of Trade and Commerce at the moment is in Tokyo in connection with wheat shipments for Japan.
October 10. 1967

Inquiries of the Ministry NATIONAL DEFENCE



NORAD-DISCUSSIONS WITH U.S. RESPECTING RENEWAL OF AGREEMENT

[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Has the government begun preliminary discussions with the government of the United States regarding the renewal of the NORAD agreement?


Paul Joseph James Martin: Discussions with the United States on this matter have begun.


George Harris Hees: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the fact that discussions have commenced regarding the renewal of the NORAD agreement, when does the minister expect he will be in a position to report to the house on the progress being made and the conditions agreed upon during the discussions?


Paul Joseph James Martin: Mr. Speaker, discussions on this matter have commenced, and at the appropriate moment the government will advise the house on the course it will follow in order that the house may approve or disapprove of the course to be followed.


George Harris Hees: Naturally that is apparent, but has the minister any idea when that might be?


Mr.   Marlin@Essex Easl: No, I have not.


Thomas Clement (Tommy) Douglas: have a supplementary question. Would the minister consider submitting the provisions of the renewed agreement to the parliamentary committee on external affairs in order that members of that committee may hear witnesses and obtain complete information regarding the terms of the agreement, assuming the government is going to renew it?


Mr.   Marlin@Essex Easl: Mr. Speaker, I would welcome an opportunity to have the government's policy on this or any other question reviewed by the committee on external affairs. It is the responsibility of the government, of course, to take a position with regard to foreign policy and then to ask the house for approval of that policy. That course will be followed and, as I said, we welcome the opportunity of discussing the government's policy in the external affairs committee.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Am I to assume from the minister's answer that it is the government's intention to renew the NORAD agreement in so far as Canada is concerned?


Mr.   Marlin@Essex Easl: No, Mr. Speaker. What I have said is that discussions on this matter have begun.



COMBINES


[Stage Direction]
On the orders of the day:
Mr. R. W. Prillie (Burnaby-Richmond):: Mr. Speaker, my question is for the Registrar General as the minister responsible for the Combines Investigation Act. Can the minister say whether the government has legislation ready now based upon the recommendation that tied sales, the practice of oil companies requiring service station dealers to buy from designated suppliers, should be outlawed?


Hon. John N. Turner (Registrar General):: Mr. Speaker, when I met with the representatives of the service stations about a month or so ago I told them that the T.B.A. situation was referred to the Economic Council of Canada last year at the same time as a general reference on combines, and that there was nothing the government could do at the moment.


Robert William Prittie: Has the minister any idea when the Economic Council will make its report to him?


John Napier Turner: Before Dr. Deutsch left his position he told me the report, which is likely to be very complete and thorough, would not be brought down to the government before the fall of 1968.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, may I put a question to the Minister of Justice and Attorney General.
Has the minister been invited to the convention of the Quebec Liberal Federation which will be held next week end?


Mr. Speaker:: Order.


David Réal Caouette: In any case, has he been invited?


Mr. Speaker:: Order. In any case, that matter does not come under the administrative jurisdiction of the government.
October 10, 1967



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Minister of National Health and Welfare in relation to his representations to Prime Minister Wilson of the United Kingdom regarding railway abandonment on roads in Scotland. Will the minister make similar representations to our own Prime Minister in respect of the abandonment of the Cumberland railway in the minister's own constituency and the wharf and fishing harbour of-


Mr. Speaker:: Order, please.


Malcolm MacInnis: I
should like to ask a supplementary question. Does the Prime Minister not consider that this representation made by one of his own ministers is an interference in the internal-


Mr. Speaker:: Order, please.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should not like to ignore the Minister of National Defence on his repatriation to his home land, and I welcome him back. I should like to ask whether it is his intention to honour the commitment of the previous minister of national defence to call a meeting of the defence committee to review the orders in council required by the unification of the armed forces legislation and the renewal or otherwise of the NATO and NORAD agreements. If that is his intention, will the minister inform the house when he anticipates calling that committee together?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, I assure the hon. gentleman that I will give very serious consideration to this question.



LOSS OF PILOTS AND AIRCRAFT IN OVERSEAS SQUADRONS

[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, may I ask a further important question of the Minister of National Defence. I should like to ask the minister whether, in
Inquiries of the Ministry view of the heavy losses of a particular aircraft, the CF-104, and personnel in Canada's overseas squadrons, these aircraft will be grounded until the equipment control problems have been corrected. If not, what steps are being taken to protect the lives of our pilots engaged in a peace keeping mission in a peace keeping force?


Léo Alphonse Joseph Cadieux: First of all, Mr. Speaker, I do not think I would agree with the premise contained in the first part of the question of the hon. member. It is of course to be deplored whenever an accident occurs, but I think the statistics would reveal that our accident rate is lower than most of the other users of this particular aircraft. However, we continue to try to improve the safety features of the aircraft, and in particular we are also trying to improve the training program in respect of this aircraft.


Harold Edward Winch: A supplementary question, Mr. Speaker, in view of the remarks of the minister, does the minister not consider that the loss of 17 aircraft and 14 pilots is pretty serious?


Mr. Speaker:: Order, please. The supplementary question is argumentative.



ATLANTIC DEVELOPMENT BOARD


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: Mr. Speaker, my question is for the Minister of National Health and Welfare in his capacity as reporting to the house for the Atlantic Development Board. When may we expect completion of the very important work being done on a comprehensive plan for the Atlantic region.


Allan Joseph MacEachen: Mr. Speaker, I hope to be speaking with the executive director of the board very shortly, at which time I will ask for up to date information on this point and relay it to my hon. friend.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskatoon):: Mr. Speaker, I should like to ask the Minister of National

October 10, 1967

The Budget-Mr. Choquette Health and Welfare whether he is now aware of the number of provinces which have signified their intention of entering into a medicare agreement by July 1, 1968.


Allan Joseph MacEachen: Mr. Speaker, I am not sure I heard the first words of the question, but I understood the hon. member to be asking about the number of provinces which have signified their intention of being ready for medicare on July 1, 1968. There is no provision under the legislation by which provinees may make a formal declaration of intention for this purpose. When the plans are submitted by the provinces they will be considered by the government of Canada.


Lewis Mackenzie Brand: Then may I ask the minister how many provinces have submitted their applications to the government?


Allan Joseph MacEachen: Mr. Speaker, there have been no formal plans submitted by any provinces at this point.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Thomas Miller Bell: Mr. Speaker, I have a question for the Minister of Transport. I ask whether any progress has been made with respect to the l.c.l. rates in the maritimes, about which there was considerable discussion and questioning last week.


Paul Theodore Hellyer: Mr. Speaker, I have undertaken some inquiries into this very complicated problem.


Thomas Miller Bell: A supplementary question, Mr. Speaker. Can the minister say whether he has arranged a meeting of the interested parties, in the hope that there will be a stay in this new rate structure that is so disastrous to maritime shippers?


Paul Theodore Hellyer: My initial discussions are with the railways and the Canadian Transport Commission. Following those discussions I will consider what other action might be appropriate.



THE BUDGET


[Stage Direction]
The house resumed, from Friday, October 6, consideration of the motion of Hon.

Mitchell Sharp (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Monteith (p. 1197).
Mr. Speaker:: The hon. member for Lot-biniere.


Auguste Choquette: Mr. Speaker, to conclude the few remarks I made last Friday when I was given the opportunity to speak on the problem of Canadian unity, I should like to suggest that it might be advisable, in spite of the polls conducted among others, by the members for Trois-Rivieres and Brome-Missisquoi (Messrs. Mongrain and Grafftey) to question the sociological value of those surveys, and to refrain from concluding categorically that separatism is not a threat in the province of Quebec for the simple reason that, in fact, it is not dangerous. There is nevertheless a separatist possibility which should be of concern and which might be combatted by a vigorous policy to consolidate Canadian unity.
May I, Mr. Speaker, suggest the following recommendations: first, I believe the government should take the initiative through the Canada Council or a department of cultural affairs, if there was one, of sending across the country the greatest names of the French-Canadian artistic community. They would certainly play a more important and a more effective role in promoting national unity than any election or political speech. I am sure for instance that Monique Leyrac would create a much deeper impression than any member giving out a patriotic speech. There should be an offensive whereby our artists would travel throughout the country to bring home the French fact within the framework of greater Canadian solidarity.
Secondly, I would suggest more frequent exchanges between all members from the province of Quebec sitting in this house. I know it has been tried before, particularly at the time of the Gordon affair, but election strategy is always taken into account. I should certainly favour having all members from the province of Quebec, notwithstanding their political affiliation-it is not quite what could be called a common front-holding more frequent exchanges to defend common interests.
Thirdly-this would bring a smile to the Minister of Justice and Attorney General (Mr. Trudeau) if he were here-I would support, Mr. Speaker, the initiative of the government or a subsidized organization calling not the
October 10, 19S7

Estates General of French Canada, but the Estates General of Canadian unity, that is to say, I am sure the Estates General of French Canada will have an important role to play and will produce interesting results. But I believe that, after this initiative with interesting results, it might be appropriate to call right across Canada, if I may use an expression of the hon. member for Villeneuve (Mr. Caouette), some kind of get-together of everyone concerned in consolidating Canadian unity, people picked all over, among social clubs, various bodies and various associations, somewhat along the lines of the Estates General of French Canada.
Finally, Mr. Speaker, there is talk of a conference on language rights. This is also a most interesting initiative but, in my opinion, to say that French-speaking communities have the right to have a French school if they want one is no solution to the problem, which goes deeper. The real problem is that in a great part of Canada the French culture is as foreign as the Chinese or the Arab culture. The best solution is not to force a language or a culture on anyone, but to render French culture attractive to the majority of Canadians.


Mr. Speaker:: Order.


Auguste Choquette: If the house will allow me to finish, I only need two minutes more.


Mr. Speaker:: Order. The time allotted to
the hon. member has now expired. Does the hon. member have unanimous consent to continue for two minutes?


Auguste Choquette: Only two minutes.


Some hon. Members:: No.


Mr. Speaker:: There is some objection. [English]


Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, my remarks on the budget will be in an effort to try to put forward, as I have in the last two years, some ideas on the theory of budgeting which I think might be helpful to a minister of finance in trying to solve the problem of the high costs that assail our economy at the present time.
[DOT] (3:10 p.m.)
I am going to suggest at the outset that the time has come in Canada, and I suggest also in the United States, to do some serious thinking in connection with the basic doctrines that guide ministers of finance in budgeting. Since the late thirties the United States and

The Budget-Mr. Hamilton Canada have accepted the principle enunciated by Lord Keynes. In essence this is the principle that by the actions of governments the ups and downs of the economic cycle could be reduced. The efforts of governments in the western democracies to employ the teachings of Lord Keynes have been remarkably successful, but I submit that at this stage of our economic history the application of Lord Keynes' doctrine of either putting tremendous expansionist forces to work in times of recession or of putting deflationary forces to work in times of inflation ought to be reconsidered.
I put forward that suggestion not with any thought of posing as an expert in these matters but rather as a person who is trying to see his way through the dilemma facing a minister of finance who is attempting to run the government of Canada along what appears to him to be a highway. When the minister finds he is running downhill too fast he tries to put on the brakes; when he slows down going up the next hill he tries to speed up a little.
If we use the doctrines of Lord Keynes they are, in the first instance, not applicable to Canada in their complete form, and second I submit they are the wrong approach to take. First of all let me examine the major premises of Lord Keynes. He argued that by the use of taxation power and monetary practices the state could slow down the rising tide of inflation. And he was right. However, the thing to remember, Mr. Speaker, is that he designed his theory for the United Kingdom. His theory was designed to meet the needs of a country that is completely homogeneous, a country which is very sophisticated in its industry, a country which is an importer of raw materials, a country which is an exporter of finished goods, a country which over most of its economic history has had a surplus in external account and, as a result, is thereby able to export capital.
Let us contrast the country for which Lord Keynes developed his theory, Mr. Speaker, with Canada. We find that obviously Canada is not an homogeneous country. Canada is a country of at least 12 if not 15 districts each with an economy different from that of any other section of the country. Second, Canada is not completely sophisticated in its industrial activities. We have a range from the very beginning of an industry up to industries which have been established for a long time and are able to compete world wide. In other words we have a great range of sophistication in our industry. Third, Mr. Speaker,
2928	-	COMMONS
The Budget-Mr. Hamilton Canada is not an importer of raw materials; it is an exporter of raw materials. Fourth, Canada is an importer of finished goods. And finally we usually have a negative balance in external account, which means that we have to import capital to keep our expansion moving. This is quite proper.
I contend that on the strength of these five distinct differences alone there is reason to re-examine the application of the Keynesian doctrine to Canadian economics.
I intimated in my first sentence or so, Mr. Speaker, that I thought the same situation should prevail in the case of the United States, and I now come back to deal with that suggestion. There has been a great deal of thought about, and writing devoted to, this particular subject. One of the first moves made in Canada in this regard was the setting up of the Porter royal commission, which reported in 1964. A reading of chapter 20 of that report makes it very clear that the commissioners recognized that the application of monetary policy in Canada, separated as it was from fiscal policy, was ruinous to governments that have held office in this country. It ruined the St. Laurent government economically; it certainly ruined us, and I suspect that at times it has come close to ruining the present minister, as indicated last September when he came in with his baby budget.
Therefore, Mr. Speaker, it is apparent that those in Canada who have devoted their attention to this question have come up with the concept that something is wrong with the application of the doctrine of Lord Keynes. Since the Porter commission reported I think it is fair to say that our monetary policy and our fiscal policy have been co-ordinated in a much better way. As a matter of fact, with the change of the governor in 1961 there began to be a better synchronization of monetary and fiscal policy, and I cite that as one piece of evidence in support of my contention. The subject I am talking about now is not new to me or in any way original.
The second matter I should like to recall to the memory of the house is the second annual review of the Economic Council of Canada for December, 1965. This review was directed toward achieving a sustained and balanced economic growth. The whole volume deals with the suggestions of the Economic Council of Canada on how to face the fact that Canada is a country of regions; that within those regions there is great disparity of income, great disparity of education, and tremendous disparity of opportunity.

DEBATES	October 10, 1967
The council suggested, as well as it could make suggestions in such a general type of volume, that government policy together with monetary and fiscal policy should be directed toward this regional character of Canada. At the end of the volume the council made certain recommendations, but I have seen evidence of only one of those suggestions in the budget that we have before us.
More fascinating still, Mr. Speaker, is the book which was published last December written by Walter Heller, the gentleman who served under President Kennedy and President Johnson as head of the council of economic advisers to the president. This book is called "New Dimensions of Political Economy" and it reached Canadian book stores last December. In this volume Walter Heller discusses the question of timing; of how governments are failing to apply the principles of Lord Keynes by not being able to move fast enough for various reasons.
I am not going to go into the detail of the various reasons governments are slow to move. In some states, because of the slowness of getting legislation through congress it is a very difficult task to give the executive power to move. We in Canada have a better system, Mr. Speaker. If the Minister of Finance asked us to give him certain powers to move either backward or forward, or sideways for that matter, then he would be given the power to move to the extent that statistics indicated that the country's policies should change direction.
I am aware that the minister is fully knowledgeable of this, and I congratulate him for showing an awareness that there is a weakness in the type of budgeting that governments in Canada adopt. However, in his budget speech last June he suggested that he was not yet ready to ask parliament to grant him this type of power. I suggest, Mr. Speaker, that the time has now come, and that in the next budget the house should be asked by the Minister of Finance-if he is a responsible minister-to give him the power to move, with timing suited to the need, so as to check the economy by, if necessary, slowing it down in any particular sector.
This brings me, Mr. Speaker, to my main point. So far I have suggested that the timing in the application of the techniques of controlling the economy has to be improved in Canada. Therefore I suggest that the timing of government action should not be made retroactive; that in future power be given the minister in our budget legislation to make moves either backward or forward in the
October 10, 1967	COMMONS
same fiscal year; and further, that if parliament is equally responsible it should grant the minister those powers.
In other words, Mr. Speaker, I am suggesting that we know enough now about controlling the economy through the actions of government that we can trust to the ability of those who are guiding the minister to use the appropriate measures quickly and effectively-if they can be stopped and started -particularly if industry knows in advance what the measures might be. This is why they have to be listed in budget legislation.
[DOT] (3:20 p.m.)
From close study of this question it is apparent that timing alone is not enough. Last year in my budget speech I suggested that we had to add a second principle to the doctrine of Lord Keynes. It is not a contradiction of Lord Keynes but a refinement of his doctrine, and is designed to meet the problems of regional development in Canada as well as the varying range of our industries in their sophistication and maturity. In my budget debate speech of April 29, 1965, I warned the minister of inflationary pressures, listing some of them, and I suggested some short and long term proposals. Nevertheless the budget of April, 1965, was an inflationary budget when the signs of inflation were there for all to see. That was a clear example of how the minister, instead of checking inflation after it had begun, fed gasoline to the flames.
That was in 1965. By February and March, 1966, it was clear that the economy was overheating. The overheating of 1965 and 1966 reached its peak in February and March of 1966, and almost all indicators showed that a decline was setting in. Yet two months later the minister brought in a budget that put on the brakes.
Here one sees that the economy was accelerating toward inflation and the minister added fuel to the flames; when the inflation had built up and turned down, he put on the brakes. The timing was out by almost 12 months. By the minister having made these mistakes in timing an argument could be made out to show that the government has failed to heed the warnings of a collection of statistics which show instantly what every indicator is doing. The public ought to know of these indicators, because were they heeded, before it became too late, we ought to be able to tell instantly when the economy begins to falter. There are 15 or 16 indicators.
DEBATES	2929
The Budget-Mr. Hamilton
Let me continue the unhappy story. In June of 1967 the minister brought in a program of heavy government spending. That was definitely an inflationary budget. This June, after the indicators had pointed steadily downward since March of 1966, he concluded that there was need for an inflationary budget and brought in an inflationary budget, just as the indicator had moved up again. Once again he was one year out of date. We are now told that the government is heavily pruning expenditures.
It is easy for those on this side of the house to condemn the minister for being one year too late. Really he suffers from not having a definite philosophy; he is not sure of the type of budget to bring down with the tools he has at hand. The emphasis now surely is on the need for better statistical information. The emphasis surely ought to be on giving the Minister of Finance a long range growth target. The evidence is surely clear that the means through which the minister may take instant action must be at his fingertips at all times.
I am suggesting, therefore, as my first major point that the timing procedure with respect to these matters must be improved in Canada. The way to do that is to give the minister certain powers. Many suggestions have been put forward. Certain powers could be given to him annually, for one year at a time, and they could be renewed as the house saw fit.
My second proposal, as I said earlier, has to do with selectivity. To project a picture that one may visualize, I suggest the Minister of Finance sitting behind the wheel of a car. This is what he does, too. As he is going downhill he sees a few icy patches ahead so he applies the brakes gently; but then he sees a hill and accelerates, and it is that vision he has in his mind when he thinks of a budget.
I suggest that because of the unusual nature of our country he should visualize himself as walking a tightrope. This tightrope is fixed; it undulates to a certain extent, yes, but the danger is that if he falls off to one side or the other he will fall into deflation or inflation. I suggest that is because Canada is a broken type of country, made up of regions. One region may have tremendous inflationary pressures such as we have seen these last two or three years in Toronto, Vancouver and Montreal; and if one were to think that all Canada is affected as these cities are the minister would be tempted to put on the brakes, clamp on the controls and slow down spending.
2930	COMMONS
The Budget-Mr. Hamilton
As he does that, though, there are dozens of other districts throughout the country-rural British Columbia, Abitibi in Quebec, Lac St. Jean in Quebec, Gaspe, the whole of the maritimes and the greater part of northern Ontario-which suffer from a surplus of manpower, a surplus of productive capacity. Are the brakes to be put on for those areas, too?
I described the last budget speech as a castor oil treatment. Three people out of 15 are sick, yet each of the 15 has to take castor oil. The minister must realize that fundamentally Canada is made up of a number of different regions, and where there is a need to put the brakes on for one area to hold down its costs, there is a need to add coal to another to enable it to gain speed. In the long run the cure for inflation is to cure its basic cause, which is lack of productivity. Increasing productivity, making sure that human and material resources are being fully utilized, in the long run is the best guarantee against inflation.


Mr. Wahn:: May I ask the hon. member a question? In the opinion of the hon. member has inflation pretty well run its course? Ought we to be preparing deflationary policies?


Francis Alvin George Hamilton: In answering that question let me say that I am trying to outline for the hon. member the weakness of acting after the horse has left the barn. I am suggesting that at this stage the Minister of Finance is too late; the fuel has been poured on the fire. Nevertheless he should be doing several different things. If inflationary pressures affect two or three areas, that is no reason this coming spring to clamp a tight money policy on us all and slow down the entire country. I shall come to that in a minute.


Mitchell William Sharp: May I ask the hon. member a
question? I find his speech most interesting. I wish to know what his indicators, that he has access to, now indicate for the future.


Francis Alvin George Hamilton: The Department of Trade and Commerce, which the minister once headed, publishes reports every month giving the various indicators. If one looks at the indicators for 1966 one will see that 15 or 16 are listed. These indicators show that the economy started turning down in February or March. I did not bring the data with me; I am trying to make a general speech on principle.
Returning to the question of selectivity, I suggest that it must apply to the monetary

DEBATES	October 10, 1967
and fiscal sides simultaneously. The question to be asked here and now is, how can this be done? That is what I shall wind up with. I have said clearly and I hope emphatically that timing alone is not enough. There must be selectivity by regions and by industries. By regions, I think it has been indicated, one can clearly define an economic area.
I have seen tangible evidence within these last three or four years of what I talk about. Within a few miles of Montreal one finds an almost complete recession; if one goes through the towns of northern Ontario at this very moment one will see, when we are suffering from inflation in some cities, that there is unused manpower and unused capacity. It appears to me, therefore, beyond question that there is merit in trying to visualize monetary policy as applied to regions.
[DOT] (3:30 p.m.)
Let me turn now to a consideration of the effects of monetary and fiscal policy applied to industry. It is evident there are certain industries in Canada which have demonstrated year by year since 1961 that they possess competitive advantages over industries in other parts of the world, for example, in the United States. I gave one example the other day when I referred to the steel industry which was being hard pressed to meet the demands placed on it. This situation has since been corrected and steel has moved into a surplus position. I maintain that when we enjoy an advantage of this kind we in Canada should do everything possible to build up certain industries, not by imposing artificial restrictions at the border but by positive techniques using the laws of economics. The way to hurt such industries is to impose monetary restrictions making it difficult for them to gather the capital they need in order to expand.
It would seem wise, therefore, to select certain industries which are in the position of enjoying a comparative advantage and make sure we apply our fiscal and monetary policy on a selective basis so as to enable them to get still farther ahead. How could this be done? Well, we have the machinery at hand; it has been available to us all along. As a clue I intend to read a dispatch from Washington which appeared in the Globe and Mail of April 6, 1966. The headline reads: "Make Loans Selective, Fowler Tells Banks".
Treasury Secretary Fowler yesterday urged banks to turn down or scale back the less deserving loan applications to help prevent an inflationary boom.
October 10, 1967

It's important, he said, that the turn to moderation in the growth of bank credit be accomplished without skyrocketing of interest rates.
How far seeing he was.
Raising the price of money, he asserted, "should not

and need not-be the only means of determining which applicants get the loans."
I could read further to illustrate the way in which Mr. Fowler is suggesting to the United States banks-and there are hundreds of thousands of them-that they should take on the job of being selective in the credit they allow.
What about Canada? We do not have thousands of banks; in fact, we have fewer than ten. The banks have always professed a desire to participate in carrying out monetary policy. We well remember the clashes which have taken place between the banks and the Bank of Canada over the years. If the banks want a chance to help carry out fiscal policy there is an obvious way in which they can do so. Suppose, for example, there were heavy inflationary pressures in the big cities of Montreal, Toronto and Vancouver and it was thought wise to impose a curb. It would be of very little use to cut down the total number of loans made across Canada by, say, 10 per cent because 90 per cent of the loans made would still go to the big cities, leaving even less in all probability for the marginal areas. If there really were a desire to restrict the amount of credit from the big cities this could be brought about by making a serious reduction in the amounts of money placed at the disposal of those cities. Such a step might in turn encourage the banks to make more money available in the marginal areas.
AH I know is that nothing of this kind is being done at the present time and there is no harm in trying. It could be done by zones. The machinery is there. Canada at this moment is not in any danger economically, I would suggest. The danger arises from our lack of ability to guide the system.


Mr. Speaker:: Order. The hon. member's time has expired. Has he the consent of the house to continue beyond his alloted time?


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Speaker:: There is a dissenting voice. Perhaps it could be made clear for the benefit of the Chair whether there is agreement. Is there unanimous agreement?


Some hon. Members:: No.
The Budget-Mr. Benson


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: Mr. Speaker, in this our centennial year all of us are proud to be Canadians. We have, I believe, wrought a miracle out of a "few acres of snow", as Voltaire once described Canadian colonies.
In the space of a short 100 years, hardly a moment in the history of America and a mere speck of time in the larger history of humankind, we have wrought a nation that stands second on this earth in the only important task, that of providing a better life for all its people. This is the only criterion by which we may ultimately judge a political entity, as illustrated in Rousseau's famous utterance that "all the world is people and what is not people is not worth the counting".
More remarkable stiH is the fact that in doing this we have won the respect of all the people on the earth. We have played a role in the councils of the world which has been far beyond our numbers and political power. In both war and peace we have discharged our international obligations with the same amazing capacity that we have applied to our domestic ones.
Of all this we may and should be justly proud, and in our centennial year we Canadians have had the opportunity to pause and examine these wonders so that we could truly realize our national potential in the light of our proud beginnings. Our future greatness will come from nowhere but from within ourselves.
On this hundredth anniversary of our confederation I am also proud to be a Liberal and a member of this government. Our leader has been largely responsible for the respect we enjoy in the world community. After five years under this government the economy is strong and employment is at its highest level in the history of our country. Unemployment is low-this may be attested by the premier of Ontario who goes about the province boasting about how low it is-largely as a result of the federal government's efforts. The problems we face today are generally problems of affluence, not of depression. The problems we face are those of maintaining prosperity while preventing the overheating of our economy resulting in high prices and high wages.
The government and the country are in a strong financial position and we intend to keep it that way. There will be no repetition of the 1962 crisis which occurred under the
2932	COMMONS
The Budget-Mr. Benson last Tory government. The Minister of Finance (Mr. Sharp) set out as our aim in 1968-69 a balanced budget on a national accounts basis and the government intends to achieve this.


Mr. Ricard:: When?


Edgar John Benson: The federal government of Canada is the biggest business in our country and it needs to be run as such. Government expenditures are always a source of worry, and so they should be in many areas. The Economic Council of Canada in its fourth annual review urged the need to develop procedures for controlling the size and structure of federal government expenditures. I do not for a moment deprecate the competence and wisdom of the members of the Economic Council but I wish to take this occasion to point out to the house that in the past four years the government has taken very positive steps in the direction indicated by the council. Indeed, at the present time the government of Canada in many ways leads other governments throughout the world in the development of sophisticated new methods to ensure that every cent of the taxpayers' dollar yields optimum advantages to this country.
[DOT] (3:40 p.m.)
A few days ago my colleague, the Minister of Finance, pointed out the dangers of inflation, that the government's objective for the next fiscal year is to reduce the budget deficit substantially below the level of the current fiscal year, and what strong and positive steps had already been taken to reduce federal expenditures. I join with my colleague in his concern but I also wish to bring to the attention of hon. members in the course of this speech that these reductions will be made on a consistent basis. Reductions in every major department of government have taken place under our budget exercise for 1968-69.


Mr. Monieiih:: May I ask a question?


Edgar John Benson: The opposition can criticize plans but this is no reason for us to give them our ideas for future programs which we have postponed. We know how sterile they are with respect to ideas and there is no reason why we should give them our ideas of future government expenditures which may occur when we can afford to undertake them.


Mr. Nowlan:: May I ask the minister a question?

DEBATES	October 10, 1967


Edgar John Benson: Mr. Speaker, my speech will be rather long. If I have time at the end I would be most glad to answer questions.


Mr. Bell (Carleton):: This is the third minister of finance speaking.


Edgar John Benson: Mr. Speaker, some programs which the government has undertaken cannot be measured in pure financial terms. These include programs such as family allowances, supplementary old age pensions, the Canada Assistance Plan, health insurance, and medicare which is to be introduced in 1968, all programs of Liberal governments. These are programs for people and they must be continued by this government. After all, we are a Liberal government and our first priority is to look after the ordinary people of this country.


Some hon. Members:: Hear, hear.


Edgar John Benson: Mr. Speaker, there are other programs which cannot be curtailed, programs that are essential in dealing with the particular problems of regional growth. These are programs such as manpower retraining, ARDA, the Atlantic Development Board, and the area development program. These must be proceeded with no matter what else the government may have to do.
The house should recall that out of the current budget of $9j billion almost 50 per cent of the total budget falls into a category of expenditures which are required by statute or which represent long-term commitments to international organizations of which Canada is a member. Of this percentage over two thirds represents public debt charges, direct payments to other levels of government, hospital insurance and family and youth allowances. As an example I might state that because of population growth the increase in hospitalization costs in the past five years has been in excess of $150 million, and the increase in family allowances because of the growth in our population over the same period has amounted to almost $90 million. Employment stimulation and price support for agricultural products represent another significant percentage.
There remains, then, some $4 billion over which the government can exercise more direct control. This afternoon I would like to report to the house on what the Treasury Board has done and is planning to do in this area, but first I think it appropriate to place these very important matters in their historical perspective.
October 10, 1967

It will be recalled that when the Glassco commission recognized the need to strengthen government control over expenditures the prime organizational recommendation was the separation of the Treasury Board from the Department of Finance, including the creation of a new portfolio, the President of the Treasury Board.
On January 20, 1964, the Prime Minister (Mr. Pearson) announced that the government had approved these proposals and intended to proceed with appropriate legislation. On February 3, 1964, the present Minister of Public Works (Mr. Mcllraith) was appointed President of the Privy Council and vice chairman of the Treasury Board so that he could begin implementation of this phase of the Glassco commission recommendations. In May of the same year, Dr. George Davidson, who had been a senior deputy minister for more than 15 years and more recently director of the bureau of government organization, was appointed secretary of the Treasury Board. On December 18, 1965, the Prime Minister appointed me to succeed the Minister of Public Works as vice chairman of the Treasury Board, and on October 3, 1966, when parliament approved the Government Organization Act I had the honour of being appointed the first President of the Treasury Board. With these changes we were in a position to begin the development of the role of the Treasury Board as manager of the public service and to upgrade federal government management firmly along the lines recommended by the Glassco commission.
In 1962 the Glassco commission in its report on financial management made an extensive set of recommendations designed to provide more effective departmental control of existing operations, improved governmental assessment and control of both new and existing programs, and more complete and meaningful information on public expenditures to parliament.
In the summer of 1963, as a result of Treasury Board urging, four departments hired consultants to test the efficacy of the Glassco proposals aimed at improved departmental control of operations. The consultants were also instructed to recommend a detailed plan of implementation. Following a favourable report from these consultants the Treasury Board authorized the four departments, Transport, Agriculture, Northern Affairs and National Resources, and Veterans Affairs to implement the consultants' recommendations. Later, as a result of further
The Budget-Mr. Benson Treasury Board urging, additional departments began the introduction of these modern financial management techniques.
As a means of assisting departments in this work the Treasury Board in 1964 authorized the comptroller of the treasury to create a consulting group known as "Accounting Advisory Services," and in 1965 we were in a position to authorize to certain key departments the issue of a preliminary version of a guide on financial management. In 1966 we approved the issue of all departments and agencies of the government of Canada of a final version of this comprehensive guide. We are proud to have been associated with this guide which has received international acclaim.
The new emphasis that we in the Treasury Board have placed on improved control by departments over operations has led to the appointment of a number of senior comptrollers from prviate industry to positions of chief finance officer in departments, and has resulted in an extensive training program in financial management in the government service carried out in co-operation with the professional accounting societies.
I think that all members of this house should be aware that as a result of the financial management improvement program which is now in its fourth year a majority of the departments and agencies are concentrating on a drive toward improving the management control of existing operations, and that the Treasury Board is gaining access to more meaningful data to exercise its central managerial role.
I might add that the Treasury Board is giving active consideration to proposing to parliament further amendments to the Financial Administration Act. These amendments would, in a phased and orderly fashion, shift certain responsibilities for pre-audit and commitment control of government expenditures from the comptroller of the treasury to the various departments of government. Should these amendments be approved by parliament it will mean that the government has implemented all the important recommendations made by the Glassco commission in its report on financial management. In this regard I would invite hon. members opposite and the public accounts committee to inquire concerning progress on specific recommendations made by the Glassco commission, and I repeat that we will have implemented all the major recommendations of that commission.
2934	COMMONS
The Budget-Mr. Benson
We in the Treasury Board appreciate that while financial management has promoted and will promote more effective control over operations in the departments, it will not in itself solve the basic problem of how to make the best use of scarce and costly resources. With this in mind we began at an early date to take a positive interest in what is known as program budgeting and how this important new concept could be applied to the circumstances of the Canadian government.
Program budgeting is concerned with the presentation of expenditure proposals in a way that will enable effective decisions to be made on the allocation of necessarily scarce resources. This approach concentrates on objectives and benefits rather than solely on conventional elements such as cost. Furthermore, it emphasizes longer term dollar requirements rather than just those of the next year, and requires that consideration be given to indirect and associated costs as well as those directly related to a given proposal. Program budgeting is, therefore, a device to bring together related proposals from different departments so that a more complete picture can be presented. Furthermore, using this approach in every appropriate instance, proposals would be subjected to systematic analysis both as to objectives and as to alternative ways to achieve these objectives.
[DOT] (3:50 p.m.)
The United States government had pioneered in the development of these techniques and therefore this government sent a group of senior officials to Washington for discussions with the United States bureau of the budget. At that time it was found that program budgeting was being applied only in the United States department of defence. However, the Treasury Board decided to introduce program budgeting concurrently in both the civil and defence departments of the government of Canada.
We have already progressed far toward this goal. A new form of the estimates, which was recommended by consultants hired for this purpose, has been drafted and was approved by the Treasury Board in early 1966. It will provide parliament with a far more meaningful picture of departmental spending estimates in that it describes activities in which departments are engaged and the program objectives which these activities are meant to serve. In other words, it is designed to measure the advisability of expenditures from a benefit point of view as well as their legality.

DEBATES	October 10, 1967
Unfortunately, in spite of repeated attempts it has not yet been possible to lay this new form of the estimates before the public accounts committee of the house for its consideration. For this reason, all estimates will be formally presented to parliament this year in the traditional blue book and according to the traditional form so long as parliament desires. However, the Treasury Board is continuing its new line of development and a separate printing of the estimates in the new form, as separate booklets, will be prepared for 26 departments. These booklets will be laid before the parliamentary committees concerned with these departments at the time when the departments' estimates come under committee review.
The house will appreciate that these new concepts of financial management and program budgeting require a much improved system for the planning and recording of expenditures. Such a system has now been created. It provides for the coding of expenditures according to programs and activities and an internal departmental responsibility structure. We are confident that this new uniform system will also better serve the needs of economic analysis. We look forward to an early opportunity to explain this coding system and the new form of the estimates to the public accounts committee.
Forecasting is an essential feature of effective program budgeting. All members know that many proposed expenditures affect not only the current year but in some cases many years to come. In 1962 departments were required to present, in conjunction with their estimates for the fiscal year 1963-64, a multiyear forecast on a vote basis. In 1964, as a result of the urging of the then minister of finance, the hon. member for Davenport (Mr. Gordon)-and I might add for the first time in the history of the government of Canada-departmental expenditure targets were set by the Treasury Board against which each department could carry out its estimates' preparation.
One of the consultants had recommended the separation of the consideration of the multi-year forecast from that of the new year forecast. This made sense, and in 1965 the submission and consideration of the multiyear forecast was moved to the spring so that targets to be set could be derived from these forecasts after due consideration by the Treasury Board and cabinet. This represented the first major step toward a fullfledged program review. In 1966 seven departments cooperated in presenting their estimates in the
October 10, 19S7

new form whereby operations were shown in large segments called "programs", made up in turn of smaller related segments called "activities". In 1967 about 20 additional departments presented their program proposals in this new form. Review of these and the conventional forecasts of the remaining departments led to a recommendation to cabinet and the recent setting of targets by cabinet for the year 1968-69. I might add that this greatly facilitated the recent cuts in expenditures for 1968-69.
From what I have said so far hon. members will recognize that the Treasury Board and cabinet have so far concentrated on the forthcoming fiscal year. The program review documents included projections of expenditure levels for the next five years, and the departments not yet following the new form were required to present similar projections. I intend, however, that following the consideration of detailed estimates this fall the staff of the Treasury Board will examine the revised expenditure proposals and forecasts that the departments have submitted for the next four years. Taking into account the projections from the Department of Finance as to what funds are likely to be available, the staff of the Treasury Board will recommend the constraints within which each department should be instructed to formally plan for subsequent years. This will result in a further improvement in departmental plans since they will be, in effect, forced to establish priorities and to make recommendations as to what are the more essential needs.
The Treasury Board recognized that improved planning by departments would result in an increased necessity for choice at the governmental level even though departmental proposals would have been subjected to much deeper analysis, and further noted that expenditure proposals would continue to exceed the capacity of the economy to provide the necessarily scarce resources. However, the board also recognized that in the making of choices at the cabinet level a whole new range of techniques and technology was available which could be brought to bear in assisting in analysing such choices.
Accordingly, in March of 1966 we authorized the creation of a new division within the management improvement branch of the Treasury Board staff to be known as SIM-PAC, for "System of Integrated Management Planning and Control". These acronyms are very handy verbal shorthand but I must say I find them puzzling until they are explained
The Budget-Mr. Benson and then I am annoyed with myself for not having got the message immediately.
The SIMP AC division has been staffed with highly trained specialists in such management disciplines as computer technology, operations research, economics, accounting, and program budgeting. The division was instructed to design a fundamentally new system of planning and control of the kind referred to recently by the Economic Council of Canada.
As a result of co-operative efforts between the SIMPAC division and the divisions of the program branch of the Treasury Board, some of the general outlines of a modern system are beginning to emerge. I have already referred briefly to one of these. This is the necessity to forecast expenditures two, three, or four years in advance. As hon. members are aware, the government apparatus includes a large number of departments and agencies, many of whose responsibilities are interrelated. This means that future plans must be considered in terms of broad government objectives or functions rather than according to the narrow and perhaps parochial interests of individual departments or agencies. With this in mind the SIMPAC division has developed a functional classification of expenditures. One effect of this classification will be to draw together, from whatever department they are located in, the expenditures proposed for all related activities. The house will appreciate that this new classification will serve, far better than its predecessors, the analysis of alternative future patterns of expenditures.
Following this general theme it is proposed to develop in the Treasury Board secretariat a competence in what is known as "cost-benefit analysis". This will serve a variety of important purposes. In the first place, a searching review of departmental expenditure proposals on the part of the Treasury Board secretariat will stimulate improved analysis by departmental stags. Second, the central position of the Treasury Board will provide a better point of vantage for laying before ministers the full government-wide implications of departmental proposals. Third, by bringing analysis to bear on current and long-existing government activities, it will be possible to determine whether their continuation should be questioned by the government.
The Treasury Board stag is at present preparing a manual on program budgeting. This manual will emphasize the kind of analysis the departments will be expected to provide in support of their expenditure proposals.
October 10, 1967

The Budget-Mr. Benson The Treasury Board has also jointed with the department of manpower to make a full-scale analysis of a major activity in government. The findings of this analysis are expected not only to provide the department and the Treasury Board staff with first hand experience with these analytical techniques but also to provide illustrative material of the concepts the new manual will promote.
[DOT] (4:00 p.m.)
Program budgeting will rely for much of its success on the expansion of the sources of data on which planning will be based. As a result ministers will have much more data to consider in arriving at decisions. The most significant data contained in departmental program proposals is, therefore, being converted to a form suitable for processing by computers to permit presentation to ministers of the more relevant data in summarized and analysed form. This kind of data available for processing in this way will increase as it becomes available and as a better appreciation of computers for this purpose is gained. Advances in computer technology give promise of the very definite possibility within a very few years to respond more quickly to ministers' requests for analysis of a quite complex kind needed in arriving at decisions, and this government has every intention of taking full advantage of this new technology.
I might indicate that in the budget year 1969-70 those planning the budget will be able, I hope, to sit in a room and ask questions regarding what will be the effect of altering a particular program. We will be able to feed this information into a computer immediately and the data will be returned to indicate how many people will be affected, where they are located, what their income is and other relevant facts. Governments in the future will be in a much better position immediately to plan changes in programs and consider their effects based on an over-all view of government expenditures rather than the expenditures of a particular department or agency.
I mentioned earlier that the new draft form of the estimates will reflect a program activity structure rather than the traditional objects of expenditures. Parliament and cabinet will therefore tend to look upon the activities of departments as areas for review and the activity structure of programs is therefore of cardinal importance. It is the responsibility of the Treasury Board to approve the activity structure of each department on the basis that each activity is the appropriate aggregate for departmental planning and analysis

and the appropriate aggregate for ministerial and parliamentary review.
If I had had the time this afternoon I intended to say a few words about the staff of the civil service, since this question has been raised several times by hon. members opposite. Due to time consideration I shall choose a later opportunity to explain in detail the changes in the staff of the civil service. One thing I think all of us should bear in mind is that much of the staff of the civil service of Canada is service staff. For example, in looking at the 1968-69 plans for expansion of personnel the largest single expansion by far will be in the Post Office Department. The Post Office Department is a service department expected to provide service to the people of Canada. Our economy is becoming more and more an urban economy. Therefore we require more and more people to deliver mail to people in the urban communities. We also have the Montpetit report which suggests we should get rid of many casual personnel in the Post Office Department and replace them by permanent personnel. This is being done.
Another step that is being taken relates to the fact that in some large urban areas the Post Office Department is finding it more economical to take over its own transportation of mail rather than letting it out on contract. In doing this on a pilot project it has been proven that a great deal of money can be saved, but it requires more personnel in the Post Office Department. The mere fact there are more people working in the Post Office Department does not mean in this particular case that it costs the people of Canada more money. I will give detailed explanations of changes in personnel in the civil service at some subsequent opportunity.
At this point, however, I should like to point out that I do not personally believe in the freezing of civil service personnel. We must establish objectives and we must be willing to shift personnel from one program to another. The mere freezing of personnel, as was experienced under the previous government, is not the way to control growth of the civil service. We must look at the establishment to make sure that every individual within that establishment of the civil service is required in order to carry out the business to be done for the benefit of the Canadian people.
As my time is running out, I submit in conclusion that the Treasury Board has not been unaware of nor, indeed, unresponsive to the problems and responsibilities with which
October 10, 1967	COMMONS
it has been confronted. Much has been accomplished in the past four years and with this firm foundation now in place even more will be accomplished by this government in the years to come.


Jay Waldo Monteith: Will the hon. member permit a question? He referred to reductions in the 1968-69 estimates, and the Minister of Finance used the round figure of $650 million. Can the minister indicate where that reduction has been applied and the figure to which the estimates have been reduced?


Edgar John Benson: Mr. Speaker, if I gave that information I would be giving my friend information which is not usually given until the estimates are placed before the house. I should like to repeat that every major department of government has cut its expenditure estimates for 1968-69. The total expenditure cut based on the forecast for next year is of the order of $650 million at this time, and the estimates will be cut even more before they are tabled in the house.


Jay Waldo Monteith: Mr. Speaker, I would simply point out that the minister is withholding information from the house which it should have.


Edgar John Benson: Mr. Speaker, the house will have the information to which the hon. member has referred in the usual form and in the usual course through the presentation to the house of the blue book of estimates. At that time he will be at perfect liberty to judge it in any way he wishes.


John Patrick (Pat) Nowlan: Mr. Speaker, I should like to ask a question which is perhaps supplementary to the last question. Let me refer to the interesting report on accounting practices and procedures on which the future of government expenditures on the basis of computers will be founded. On Wednesday last, as recorded at page 2810, the Minister of Finance had this to say:
We are determined in our present review to screen out obsolete expenditure programs that cannot be justified in present circumstances. My colleague, the President of the Treasury Board, later in this debate will be talking about the efforts which have been made and the successes which have been achieved.
He then referred to wielding the knife. Rather than referring to the estimates for 1968-69 I should like to ask about the estimates for this year. What programs, projects or items have been eliminated in this screening out process to which the Minister of Finance referred on Wednesday?
DEBATES	2937
The Budget-Mr. Benson


Edgar John Benson: Mr. Speaker, the Minister of Finance pointed out in that speech that the budget introduced for 1967-68 is a budget we still think has proven to be appropriate under the particular circumstances of this year. We will live within that budget this year, and we believe it to be in tune with the economic conditions of the present year. We believe that next year, based on the economic forecast available to us, we should not tend to stimulate the economy but rather we should present a budget roughly in balance on a national accounts basis, and this is our intention. To this end these cuts are taking place. As I explained earlier, it is not up to us to tell you our ideas or how we will spend money in future. You are quite able to think up methods of spending money on your own.


John Patrick (Pat) Nowlan: May I take it from the minister's answer that not one penny has been cut in respect of any program for the fiscal year
1967-	68.


Edgar John Benson: That is a pretty broad question. I would guess that in any budget presented to parliament in any year since confederation in 1867 certain expenditures have been reduced and certain other expenditures have been increased. I think the question is impossible to answer.
[DOT] (4:10 p.m.)


John Patrick (Pat) Nowlan: Mr. Speaker, I am sorry to ask a further supplementary question but I asked the first question in view of the fantastic data that have been made available to the minister and his official and the words of the Minister of Finance on Wednesday last that the present review was to screen out obsolete expenditures and programs. In regard to the present review, which is fairly recent according to the words of the Minister of Finance last Wednesday-I am sure this is the one to which the Minister of National Revenue was referring-I would ask whether any item has been reduced or eliminated.


Edgar John Benson: Mr. Speaker, this government, for the first time in 1963, gave to departments targets within which they must keep their expenditures. So perhaps for the first time in the history of the country this government is in a position at this point in the year to be considering the expenditures for the following fiscal year. This is where we are doing our paring. As I said before, our budget is quite appropriate for the present fiscal year, and we will live within our budget.
We are now in a position to forecast for
1968-	69 what expenditures will be, cut out
2938	COMMONS
The Budget-Mr. Macquarrie programs that are no longer appropriate and abandon other programs we might have liked to introduce. Believe me, with the new facilities we will have available to us, or any government will have available to it, nobody in future governments will be looking forward at this time only to next year. They will be looking forward to the next four or five years so they can plan government expenditures and revenues over a period of years into the future to the benefit and betterment of all Canadians.


Mr, Heath Macquarrie (Queens):: Mr. Speaker, I must begin by saying that I was impressed by the speech of the Minister of National Revenue (Mr. Benson). I cannot, however, like King Agrippa, say that I was almost persuaded, because I was not.


Edgar John Benson: You were convinced?


Mr. Macquarrie:: I suppose I was not "almost persuaded" because I made the mistake of reading such documents as the report of the Economic Council of Canada, the Auditor General's report, statistics derived from the Dominion Bureau of Statistics, the opinions of great, leading economists and the experiences of prominent businessmen. I was also able to hear the cries of the homeless of this country and to note some of the anxiety of those who are sensitized to present economic conditions. Apart from that, the minister's speech was an interesting effort, but although he pointed out what the government would be doing, all his grandiloquent phrases do not put these things into effect.
I like these general debates on the budget and the Speech from the Throne. There are some superficial observers of our parliamentary institution who think that unless we are dealing with legislation we are wasting time. It seems to me that they overlook the essence of the parliamentary system. They forget that we in an elected house are more than a mere legislative mill. Indeed, I think that a great deal of the trouble we have been getting into in recent years comes from the mass of massive legislation we have been trying to grind out. This, of course, stems from the proliferation of elections, which always produce a proliferation of promises. Many of these promises are in areas of provincial jurisdiction and that compounds the difficulty when we seek to deal with them in this house.
I am not a violent partisan. It is not that I have terrible difficulty in deciding how to vote on election day, but I do not derive any emotional satisfaction from criticizing those who belong to other parties.

DEBATES	October 10, 1967


Mr. Stewart:: We are going to get it now.


Heath Nelson Macquarrie: Perhaps, however, this is a handicap, because in the last four years the government has given a multitude of opportunities for criticism even to such a gentle, dove-like person as myself.


Mitchell William Sharp: Oh, let yourself go.


Heath Nelson Macquarrie: It is depressing that in a country so richly endowed as ours, that in a period which has so many of the ingredients of prosperity and progress, we should be faced in this budget debate and at this time in our history with problems of grave and serious proportions in our economic sector. We seem destined to close our centennial celebration not with a great whoop of joy but with feelings of anxiety and uncertainty in the economic field and, let us face it, in other fields as well. For some of these difficulties, of course, we cannot hold the government responsible. Some factors are beyond its control or are perhaps even beyond the country's control. We recognize this, but as many of my colleagues have pointed out, a very serious indictment can be laid against this government.
We cannot say that this situation exists because of factors over which we have no control. The economists in my university days used to use the old expression that when the United States sneezes the whole world gets a cold. But today, as we look at comparative statistics, we seem to be shivering in many areas in which the United States is showing all the signs of health.
If there is one comment-and despite the invitation of the Minister of Finance (Mr. Sharp), I am not going to be critical-which might be made about the present government, it would be that I have observed over the last four years its inability ever to anticipate anything. So many times the government seems to be overwhelmed and terribly surprised at the results of its own actions or inactions. As the hon. member for Kamloops (Mr. Fulton) said the other night, its leadership is shown by the frequency with which it tends to back into situations.
Many specifics have been charged against the government. Many interesting comments have been made on specific economic programs. I was going to talk about some of the recommendations of the Auditor General's report in reference to the Glassco commission. I noted what the minister said about the major recommendations. I cannot find in the
October 10, 1967	COMMONS
Auditor General's report a distinction between major and minor recommendations, and some time later in the session, perhaps through the order paper, I may elicit from the minister exactly how many of the 15 recommendations not disposed of according to the Auditor General's last report have in fact been implemented in this effort toward greater efficiency.
The matters with which the Auditor General dealt are important. We live in an era of big government. We know that. But surely we can ask that government departments set an example in efficiency. Time and money should be utilized in the best manner possible. In passing, Mr. Speaker, I must return to one of my frequent comments about the efficiency of our own chamber. For a number of years I have been appalled at the endless hours we in this house consume in waiting for votes to be taken and then for the calling and recording of those votes. A few days ago we had a scheduled evening sitting of two hours' length. Of those two hours we spent an hour and four minutes waiting for votes or having them recorded. Surely in the electronic age we can do a little better job on our one hundredth birthday in streamlining that time-consuming procedure.


Some hon. Members:: Hear, hear.


Heath Nelson Macquarrie: An electronic voting machine would compute the vote in seconds, and it should not be beyond the wisdom of the authorities to abandon that tedious, long process of waiting for votes.


Stanley Howard Knowles: Would an electronic system get the members here?


Heath Nelson Macquarrie: I should think that on all votes except those which determine the fate of a government, and they should only be scheduled votes, the vote should be taken on the spot, because the other votes in essence deal with the procedure of the house. I have seen no system anywhere that is so archaic as ours. Having said this for the fifteenth time since I came here, I will now pass on to something else.
In this country, we are facing major economic problems on our one hundredth birthday. The Minister of Finance has been hearing about them. But I think we also have other, fundamental questions as we begin our second century. Our political life has taken on new dimensions and political questions carry with them a new degree of seriousness. It is not enough any more to ask which party 27053-1861
DEBATES	2939
The Budget-Mr. Macquarrie will be the better or the best or what policies they will put into effect. In 1967 we must look not at policies or at personnel alone but, indeed, at the very type and structure of the country which any party or government must try to govern. Perhaps far reaching constitutional changes are necessary as we begin our second century. Possibly alterations less drastic and dramatic may be found preferable. But we must re-examine the basic constitutional structure and review longstanding practices and procedures in light of 1967 and post-1967 conditions.
[DOT] (4:20 p.m.)
Interestingly enough, Mr. Speaker, I believe the same opportunity, indeed the same compulsion, exists beyond the domestic field. I believe that for many reasons which lie beyond our own control we should reappraise our international role and position in the world. I believe we have passed the period of easy acceptance of traditional responsibilities and functions in the international scene. Some of the established organizations on which we have founded so much of our foreign policy are themselves in phases of transition or at least of reappraisal.
The United Nations has greatly changed since its establishment in 1945. Thoughtful people are concerned about its efficiency. They wonder about the peace keeping techniques, whether the peace restoring mechanisms are working well, or if in fact they are working at all. To cite one example, how long can we go on maintaining an uneasy peace in Cyprus if no ground has been made at all in the matter of conciliation?
We are also troubled about the financing of the United Nations. Article 109 of the charter speaks of revision; yet the world body has never been able to move in the direction of meaningful revision of its own structure. I believe that Canada as a charter member of the UN, and as a good member of the UN in contrast with our membership in the League of Nations, should, indeed must, seek to find whether there is an initiative it can take toward improving the structure of that world body.
NATO, another of our fundamental cornerstones, has changed greatly since 1947. Revision here may be necessary. Can it ever be the same after what has happened in the case of France? Are we attuned to the vast and bewildering changes in military science and strategy? Should the alliance extend and intensify its co-operation in the non-military field and diminish it in the military area?
October 10, 1967

The Budget-Mr. Macquarrie Perhaps changes should be minimal, perhaps they should be fundamental; but let us look at the matter with high seriousness, and indeed with high priority.
Secretary of State for External Affairs (Mr. Martin) was asked a question today about NORAD. I am not a military expert, Mr. Speaker, far from it, and perhaps this should be my invitation to discuss the subject. For I am genuinely disquieted when reading about and hearing those who are experts deal with this question. Some of these experts suggest that the NORAD agreement has outlived its usefulness. Surely this is a fundamental question in the defence of our country. Should Canada opt out of this system? Should we accept the argument that because our contribution must necessarily be so small relative to that of the United States we should therefore totally disengage and follow other pursuits by directing our energies elsewhere?
There are those who argue that no matter what the state of technological advance, no matter what the preponderance of power on the side of our major ally, no self-respecting country like Canada can leave its defence totally to the people of another country. They argue that this country must offer more than geography to the defence of this continent, of which we occupy a large and somewhat vulnerable area. So here is another question, Mr. Speaker, which requires our earnest consideration, and I think requires it now.
I think the commonwealth is often regarded now as one of the minor cornerstones of our foreign policy. Some people think that the commonwealth is now little more than something we make gestures toward in afterdinner speeches. But are we satisfied with merely cherishing our membership in this body which we did so much to found, in which we did so much to adjust and develop toward changing conditions? I am wondering whether we can find a unique and more worth-while role within the commonwealth.
The question of external aid is an important one. With many people this is a popular field of endeavour. But are we at our most effective here? Can we improve our contribution toward a peaceful and better world? Should we specialize in aid, which perforce cannot be unlimited? Should we establish priorities and, if so, what are they to be? Should we assist the commonwealth, Latin America, the Caribbean or French speaking Africa? Should we emphasize bilateral aid or


channel all our aid through multilateral, universal programs? I have heard all these suggestions made, as I am sure have other hon. members.
Should we not also look, Mr. Speaker, at our own diplomatic arm? Should we not ask ourselves whether we are satisfied with our foreign service? There are many areas in the globe where Canada has no representation. We talk about a two-China policy; yet we do not have ambassadors in either China. There are many parts of Asia in which we have no diplomatic representation. Asia is a continent where millions and millions of people live and on the future of which depends so much the fate of all mankind. Asia is the most expanding and expansive part of the world.
These questions cannot be simply answered, Mr. Speaker; they can merely be raised, as I do raise them, considering that these aspects are extremely important to the economic facts of our domestic life.
When I last spoke on this subject I urged the Secretary of State for External Affairs to be more forthcoming in his discussions of this important realm. I was not suggesting that he come into the house and tell us, for instance, what the ambassador from Indonesia had told him. This, of course, was not what was in my mind. But I do believe that foreign policy, which as the hon. member for Brome-Missisquoi (Mr. Grafftey) discovered in his poll is of absorbing interest to our people, should command more attention in this house.
I hope that the standing committee on external affairs will continue the program it began earlier in the session whereby for the first time the committee looked at areas of interest and studied in depth some of our problems, bringing before it experts other than those in the department. I think this is extremely valuable and important.
It is so easy in this day of the mass media to grasp at seemingly simple solutions. In our yearning for peace there is the danger of being satisfied with those courses of action that are suggested by some of the more vocal but not necessarily the more thoughtful elements of the public. For instance, to call upon the United States unilaterally to stop bombing North Viet Nam seems a proper course. It seems to put us on the side of the angels which is where we all want to be. But to offer advice to the United States might not be so effective as may appear, or as we wish it to appear. Of course we want the bombing stopped. Of course any thoughtful Canadian is filled with anxiety and worse at the increasing engagement in this conflict of United
October 10, 1987

States personnel. Should a thoughtful person not seek evidence that any such cessation now would be more efficacious than the several which have already taken place? Is that not the thoughtful course of action?
For a long time many proclaimed that recognition of Peking and the admission of that regime to the UN was the greatest step to world peace. This recipe has been less frequently advanced in recent months. Not long ago the call was to have South Africa kicked out of the Commonwealth and all would be well. Something like that did happen, but nothing happened to the victims of the repressive racist government of that country.
[DOT] (4:30 p.m.)
I suggest that we ought to devote more time to this subject, that we should seek to reappraise, to bring a greater depth to our discussion. Foreign policy is no longer an esoteric field, the preserve of a few specialists. We who represent the people who will suffer the results of the failure of world diplomacy dare not miss opportunities to enlighten ourselves and the people we represent in foreign affairs. If we fail, that which we plan domestically through budgets, legislation or other parliamentary means will be of no avail.
If there is one hopeful aspect in the less than glorious performance of the present government it is that through its weakness and indecision as an executive it has enhanced the scope and stature of the legislative branch. Perhaps in the revival of committees and the establishment of new areas of activity for them we shall produce a much healthier political society in this country and bring about a more valuable parliamentary institution. For that we should be indeed grateful. I suggest that one area where such a revitalized branch of our system would be of tremendous importance is the terribly difficult field of foreign policy.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I presume it is proper for me to say that this is my thanksgiving budget speech. Regardless of the government in power or our social and economic problems, I think we should all be thankful to live in Canada and for the opportunities that we have at this time to enjoy life in this country. Before proceeding farther I must say to the minister that I offer him my sympathy, my sarcasm and my suggestions in a spirit of good will.


Mitchell William Sharp: I am grateful.
The Budget-Mr. Herridge


Herbert Wilfred Herridge: Our over-all problems which have been recognized by members of this house and the Canadian people in general have been stated before. They are the preservation of world peace and the maintenance of national unity. I might say in that respect that I have no hesitation in saying that any party or member of this house approaching the question of national unity with a view to party advantage is doing this country a great disfavour.


Some hon. Members:: Hear, hear.


Herbert Wilfred Herridge: While we may have different points of view we must present them properly and must approach this problem in the spirit that it is a national emergency.
We all recognize that inflation and its effect on the cost of living and the cost of housing is a serious problem at this time. I am not one, Mr. Speaker, who rises in a glib way to say that I have answers to all our problems at this time, but I shall have a few suggestions to make later.
In my opinion this debate has been worth while. The minister has had the opportunity to hear the opinions of the Canadian people expressed by members of the opposition parties and in some instances by members on the government side of the house. I am sure that we have listened with interest to the minister's statements which, in the language of the Financial Times, were a mixture of sermonizing and action. I have enjoyed both aspects. I am sure we all agree with the minister that there is a need for fiscal and monetary stability. Anyone with a sense of responsibility accepts that. There is a need for priorities in programs and expenditures. That is easy to suggest but no doubt in some instances those priorities must be arrived at as a result of consultation with the provinces and agreements on that basis.
There is an urgent need to provide capital for housing, particularly for those who are unable to obtain their own housing or pay the costs involved at the present time. There is a great need for serviced land in the larger centres. Without doubt there is a need for planned urban development.
I must say, Mr. Speaker, that I do not like the general attitude that we should accept as inevitable the continued drift to the metropolitan areas and cities. I have lived in a different atmosphere. I read Ruskin, Morris, and others like them representative of the later Victorian period. I did not look forward

October 10, 1967
The Budget-Mr. Herridge to a society composed of centralized populations. I did not have any politics in my youth. Later I was a Liberal, but I think I have advanced a bit since those days.


Some hon. Members:: Oh, oh.


Herbert Wilfred Herridge: I looked forward to a society where man would enjoy greater happiness through the decentralization of populations to towns, small communities and rural centres, and the decentralization of industry. I know that people move to where the jobs are, but I think we must give some thought to the decentralization of population and industry in this country.
I was interested in the minister's proposal to ease the tax burden on low income groups that require housing. We all look forward to a further explanation of that proposal. If the government continues to insist on maintaining the 11 per cent sales tax on building materials I trust that some method will be devised to assist the low income group. We all agree with the necessity for restraint in government expenditures and with respect to prices and costs. That will be a matter for considerable discussion in the near future. Though we agree with restraint and though I trust we shall seek to economize where possible, we must not overlook the needs of the veterans and their dependents with respect to increases in disability pensions and war veterans allowances in the near future. These are the men who defended our country, who upheld our freedom in at least two world wars.
I have received letters from my constituents complaining of two things in particular. The first is the 11 per cent sales tax on building materials. I have a letter from a gentleman who is an official of the Consolidated Mining and Smelting Company of Canada. It is a thoughtful letter and deals with the question seriously on the basis of his observations of the effect of this tax on house building as it comes within his knowledge. He suggests that the government would be wise to remove the 11 per cent sales tax on building materials.
The other criticism I have had is largely from corporate organizations-municipalities and similar bodies-with respect to the increase in the interest rate on housing mortgages. I wish to read a letter from the deputy city clerk of the corporation of the city of Trail.
[DOT] (4:40 p.m.)
Dear Sir:
The council of the city of Trail are greatly concerned over the recently announced increase in

the interest rate of 8\ per cent for Central Mortgage and Housing Corporation financing of housing loans.
The council would like to see a reconsideration of this increase as they feel some measure has to be taken to stimulate housing construction in areas such as our Glenmerry subdivision.
Thank you for your kind attention to this matter.
Yours very truly,



A. R. MITCHELL DEPUTY CITY CLERK

[Stage Direction]
I read this one letter from the numerous letters I have received to the same effect from municipalities and organizations because I believe there is a great deal of validity in the objection made. Earlier speakers from this group have dealt in detail and at great length with this subject. They have expressed both general and local criticism of the budget's shortcomings and of our monetary and fiscal policies. I shall not repeat what they have said in their contributions to this debate.
I was particularly interested in the speech made by the parliamentary secretary to the Minister of Energy, Mines and Resources. It contained numerous suggestions as to ways in which the government could reduce its expenditures. I followed carefully the speech made by the hon. member for Kamloops (Mr. Fulton) with its caustic criticism of unnecessary government spending and I listened with interest a few minutes ago to what I thought was a very constructive speech by the hon. member for Queens (Mr. Macquarrie). I also listened with particular attention to the speech of the President of the Privy Council (Mr. Gordon), and I quote from Hansard of October 5, page 2865, to emphasize briefly what he had to say and to make certain that many people Who will read the speech of the hon. member for Kootenay West and who may not read the speech made by the President of the Privy Council will know what views he expressed. Referring to something which had been said earlier by the Secretary of State for External Affairs (Mr. Martin), the hon. member for Davenport (Mr. Gordon) commented:
On that occasion I think he said the things that are in the hearts and minds of all of us. We all know that no defence is really effective any more in this world except peace. If we kid ourselves that anything else will be effective, we are very foolish indeed.
We have a second problem that is perhaps closer to us here and we are very much aware of it. That is the question of the continuation of confederation and the unity of our country.
I turn now to page 2866. The President of the Privy Council was interrupted by someone. It would not have been by me; some
October 10, 1967	COMMONS
Conservative must have interjected. He went on to say:
Let us not be silly.
Not only have we the problem of obtaining peace in the world in which we live, not only have we the problem of achieving unity within our country, but we also have the problem, living next door to the greatest nation in the world, of maintaining our own independence. Most of us in one way or another are searching for the solution to that problem. I hope that before very many months have passed, the government will be able to table a white paper which will at least provide a focus for debate about what should be done in this respect.
I heartily sympathize with the concern shown by the President of the Privy Council in regard to the search for peace, Canadian unity and Canadian economic independence and I am one of those who look forward to reading the white paper on economic independence when it is issued.
In this connection and before proceeding further I should like to put on record the contents of a note compiled as a result of research done by a friend of mine and having to do with Canadian economic independence. My sentiments on this subject are entirely in accord with those of the President of the Privy Council. Anyway, these are my friend's findings. Based on information culled from Dominion Bureau of Statistics publications he has found it possible to make a good estimate of the extent of post-war United States direct investment in Canada. The figures show that over the 1946-1964 period a total figure of $10.6 billion was made up of $5.2 billion of undistributed profits held in Canada and various accounting adjustments and revaluations. From a sample of eight out of the 19 years, however, it appears that dividends remitted from the United States controlled corporations in Canada must have totalled about $5.4 billion.
Auguste Choquette: The name of your friend, please.


Herbert Wilfred Herridge: I will supply that later.
So more than the equivalent of what gets into the statistics as net capital inflow was covered by dividends going out of Canada to the United States owners. In other words, more than the total increase in United States direct investment in Canada since the war was covered by profits made in Canada. I think he makes a very good point. The gentleman in question is-as a matter of fact, I do not have his name on the document and I have forgotten it at the moment but I will see that the hon. gentleman gets it later.
DEBATES	2943
The Budget-Mr. Herridge
Now I wish to make a few other suggestions. Suggestions have already been made concerning means by which the expenditures of the various departments might be reduced, how we could lessen our budget deficit and so on. I again urge the government to use the Bank of Canada to provide the social capital required by provincial and municipal governments for investment in housing, hospitals, schools, highways and other public projects. Last night I read in the Ottawa Citizen a story headlined: "City Finds U.S. Loan Is Cheaper". It began:
City hall will try to counter the soaring Canadian interest rate by borrowing $16,183,000 in the United States.
Financial authorities have assured the city funds will be available in the U.S. at an effective interest rate of 6.47 per cent.
I simply cannot understand why the city of Ottawa should have to go to the United States to borrow money with a consequent outflow of interest on this loan and many others like it. From the statistics I have been able to gather in the last few weeks, we have borrowed in the neighbourhood of $1 billion from the United States already this year. I cannot understand why the Bank of Canada cannot provide loans to cover expenditures of this sort at a rate of interest which would meet administrative and other costs without any loss to the government of Canada. When the minister replies later I wish he would inform me why this cannot be done. I understand it is done now to some extent in certain circumstances. I would like the minister to tell us why it cannot be done on all such occasions. There seems to be some hidden reason for not doing so. I have been told there are psychological reasons for not going further in this direction.
We in our party have urged this method of financing for many years. Only a few months ago my leader, in a letter on this subject, endorsed the idea wholeheartedly, so I have no hesitation in bringing up the matter at this time. I might add that we could continue to use the Industrial Development Bank to meet the needs of small and medium-sized industries and leave the rest of the banking business to the private banking concerns under present circumstances when a new competitive spirit seems to be rising.
I wish to deal now with another matter. We have learned how we can save a few thousand dollars here and a few million there. Again I wish to tell the house that we could save a great deal more money if we were to withdraw from NATO. If we are to
2944	COMMONS
The Budget-Mr. Herridge meet our responsibilities to the underdeveloped nations as well as our own responsibilities here in Canada, we simply cannot continue to carry on our present expenditures in the military field. We have to make a choice. In that connection I wish to quote a statement made by our leader, as reported in the Globe and Mail of Sept. 14, 1967. The report is headed, "Pull Canada Out of NATO, Douglas Says." It reads:
[DOT] (4:50 p.m.)
Canada should withdraw its military support of the North Atlantic Treaty Organization and press for a complete overhaul of the defence pact, says T. C. Douglas, national leader of the New Democratic Party.
Mr. Douglas told 300 Simon Fraser University students that perpetuation of NATO is another example of Canada's slavishly following an obsolete U.S. foreign policy.
"I believe as far as Canada is concerned, we're wasting our money in NATO," he said. ''The world has changed, but U.S. and Canadian foreign policy has not changed with world conditions."
Mr. Douglas said NATO should be used to negotiate peace, not war. He said the organization is based on policies that assume the Soviet Union is a monolith dedicated to subverting the entire world.
"We cannot resolve the problems of a revolutionary age by winning military victories," the N.D.P. leader said. "We are not going to stop change with arms. If Canada is going to contribute to the peace ol the world, we must lay down a policy not overshadowed by the United States or any other country."
I think our leader is on very sound grounds on this question.
At the present time we are spending $1,688 million on national defence, which according to my calculations is between 20 per cent and 25 per cent of our national budget. To illustrate this, Canada's contribution to the infrastructure of the NATO program was $152,-
300,000	at March 31, 1966. The estimated cost of the aircraft supplied to NATO to April 30, 1966, amounts to $211,600,000. The capital cost of fixed facilities at the base is estimated to be $14,700,000. The total estimated annual cost of maintaining No. 1 air division in NATO is $85,300,000. The estimated annual cost of maintaining our brigade group in NATO is $64,500,000. The estimated annual cost of transporting defence forces and their dependents is $7,500,000, making a total cost of $535,900,000. Again I say I do not see how we can continue these expenditures and meet our responsibilities at home and abroad.
I turn now to NORAD, and in that connection I wish to quote from an interesting article by John Gellner which appeared in the

DEBATES	October 10, 1967
Globe and Mail on October 9, 1967. Its heading is, "A Price Canada Will Have To Pay To Stay in NORAD," and I quote two paragraphs:
With the YF-12, or whatever it will ultimately be called (Y denotes an experimental type), will go an improved air-to-air missile, AIM-47, and a new airborne warning and control system. The latter, carried in huge jet transports or converted bombers, will apparently replace all that NORAD has in the way of electronic ground environment, although the DEW line might retain some limited uses.
One can only speculate what such rearmament might cost Canada. An educated guess based on the assumption that Canada's present three CF-101 and two Bomarc squadrons would be replaced by two squadrons of YF-12's-say 30 aircraft, with the essential spares and handling equipment-should cost something like $500 million. Adding the price of installations and training, and of Canada's participation, with aircraft and equipment, the total bill would probably not be much less than $1 billion.
Mr. Gellner is a writer on military subjects and apparently has made a close study of this matter. I hope that these costs to the Canadian people will be considered when the government deals with the negotiations in connection with the NORAD agreement.
Again I want to say that for years it has been our policy to oppose nuclear weapons on Canadian soil and in the hands of Canadian troops anywhere. Last year the then minister of national defence informed the house that, "The R.C.A.F. now has available to it in Europe an explosive power comparable to several thousand times that used at Hiroshima." What a reversal of the minister's stand when he was in opposition. Then he was firmly opposed to nuclear weapons, and I well remember sitting in the house and listening to the speech he made on that occasion. I hope the government will reverse this policy and use the money which we are spending on defence for other purposes.
As a matter of fact, two or three years ago the German ambassador, in a speech at Winnipeg, said something to the effect that while Canada's contribution to NATO is not of great military effect its position in NATO has a certain morale building value. Surely we can use this money to better advantage for ourselves and in assisting the underdeveloped nations.
While I know we have the support of the President of the Privy Council on this issue, I wish to quote two paragraphs from the speech made by the Prime Minister (Mr. Pearson) in his Nobel peace prize lecture delivered at Oslo, Norway, on December 11, 1957, titled "The Four Faces Of Peace":
Today, less than ever, can we defend ourselves by force for there is no effective defence against
October 10, 1967

the all-destroying effect of nuclear missile weapons. Indeed their very power has made their use Intolerable, even unthinkable, because of the anni-hilative retaliation in kind that such use would invoke. So peace remains, as the phrase goes, balanced uneasily on terror and the use of maximum force is frustrated by the certainty that it will be used in reply with a totally devastating effect. Peace, however, must surely be more than this trembling rejection of universal suicide.
The stark and inescapable fact is that today we cannot defend our society by war since total war is total destruction, and if war is used as an instrument of policy, eventually we will have total war. Therefore, the best defence of peace is not power, but the removal of the causes of war, and international agreements which will put peace on a stronger foundation than the terror of destruction.
I must say we can all agree with those words, and I quote the Prime Minister to show we have got him on our side so far as principle and spirit are concerned.
While we all realize we must solve our immediate problems with respect to fiscal and monetary stability and the need for priorities, we must also relate these matters to the need for a resources development and investment program in co-operation with the provinces. Unless we can conserve and develop our natural resources on sound principles we will not be able to maintain or improve our standard of living in the future.
In my opinion, if we are going to meet our obligations to the underdeveloped nations food is the first essential. If we have food we can afford to say "man shall not live by bread alone," but if we do not have food there is nothing to say. So accustomed are we in Canada to the well stocked larder and the overladen plate that it is almost impossible for some of us to imagine what life is like for those hanging over the brink of starvation in other countries.
The first requirements of human beings in the underdeveloped countries are food, clothing and shelter, and assistance in building their economies so that they can produce more of their own requirements as the years go by. We have the resources to accept our moral responsibility if we are willing to prime our expenditures on defence accordingly. In my opinion we cannot afford to go on spending these large amounts on defence and at the same time try to meet our responsibilities to our people at home and to people abroad.
[DOT] (5:00 p.m.)
Our natural resources are, first, water, land, forests and minerals, and very briefly I wish to indicate how improvident we have been in dealing with Canadian water supplies 27053-187
The Budget-Mr. Herridge to date. Later I shall deal with this matter at great length. I should like to quote briefly from an article in the September issue of Electric Light and Power, a magazine published in Boston, in which they begin to let the cat out of the bag about the Columbia River treaty. As you know the power production there has been increased to 9.2 million kilowatts although we only get paid for 1.2 million in the treaty. The article reads as follows:
Favourable Payout.
The third power plant project will have a remarkable payout. Annual equivalent investment and operating costs will total $14,702,000. Average annual benefits have been computed as follows: $43,838,000 for power, $1,470,000 for flood control and $389,000 for recreation. Thus, according to the Dept, of Interior, the total average annual benefits of $45,697,000 would exceed annual costs by $31,000,000 for a benefit-to-cost ratio of 3.1:1. No benefits have been assigned to fish and wildlife, although some improvement in the Columbia River fishery below Grand Coulee is expected.
In addition the article states:
Nearly 500,000 acres, approximately half of the ultimate 1,029,000 acres to be developed on the Columbia Basin project, now have irrigation service available. The annual gross value of crops produced on the project's irrigated lands now exceeds $71 million.
We are shipping our water across to the United States and they are using it to irrigate
500,000	acres at the present time. They intend to irrigate over one million acres and are sending their products back into Canada where they compete very easily with the products of Canadian producers because of the circumstances under which they produce at the present time.
I am having some tables worked out in this regard by a very competent engineer and I will deal with this matter more fully later. I should like to suggest, however, that the Minister of Energy, Mines and Resources (Mr. Pepin) and his officials should take the first opportunity to read this article which indicates what is happening in the United States at the present time with regard to the further development of the Columbia River.


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


Herbert Wilfred Herridge: Is that final, Mr. Speaker?


An hon. Member:: Go ahead.


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


Some hon. Members:: Agreed.
2946	COMMONS
The Budget-Mr. Mackasey


Herbert Wilfred Herridge: I appreciate the kindness of the house in this regard. I will finish as quickly as I can. I also suggest that members of the house should read the Family Herald of October 12, 1967 in which there is an excellent article under the heading "The Hidden Hazards Of Sending Water South". It is a very informative article and one which hon. members would find worth while reading if they wish to be informed on this question of continental use of our water.
In conclusion I should like to say I was very pleased to note that the Registrar General (Mr. Turner), when he was parliamentary secretary to the Minister of Energy, Mines and Resources, laid down in very definite terms some principles for Canada's emerging water policy. This was the first time I heard the principles laid down in definite terms, and I congratulate him. I also congratulate him for undertaking to introduce the new legislation concerning consumer and corporate affairs. I might say that the Registrar General was brought up in Rossland in my constituency. If he carries on as he has in the past and if he does the work as efficiently as he has in the past, we can look forward to his administration of the consumer and corporate affairs legislation in a manner which will be to the advantage of the Canadian people.


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: The Budget-Mr. Mackasey faced with the need for more participation by real French speaking Canadians at the top level in our large corporations. We will still need a capital that is more representative of the two founding races and a capital district which will make sure that Hull will finally reap some of the economic benefits of a capital district. We will still be faced with the problem of providing Quebec with all the assistance needed to facilitate communication with other countries which share its language. These are but some of the problems which must be resolved whether or not during the week end in Quebec it is decided that it is economically or uneconomically sound to separate.
I agree with the determination of the Minister of Finance to reduce spending next year and cut back on expenditures wherever possible in order to fight inflation, but I must also point out that the real danger from separatism in the future in Quebec lies not in the arguments of the academics or intellectuals but in the poverty of too many people in too many areas of Quebec. Too many people in Quebec, in spite of the fact we are experiencing the biggest and longest boom in our history, still live in squalor. Too many people have been bypassed for geographical reasons in this affluent society. Too many people live on incomes well under the $4,000 per annum mark. These people could very well be the separatists of the future, and when the separatist movement spreads to these areas, when the false doctrine of separatism finally catches on in these regions, then the possibility of the end of this country will be more real than it is today.
Perhaps there are some of you who think I am exaggerating, but I can look back at speeches I made in this house five years ago at which time I made the same predictions and the same analysis when Social Credit spread across the province of Quebec. What I said then was certainly not intended to hurt the feelings of my friends in the Ralliement des Creditistes, who by their prodding have done much to improve the working conditions in this house for those of the French language. The people endorsed the Social Credit movement then because they felt they had nothing to lose. They endorsed it in a spirit of despair and defeatism.
[DOT] (5:20 p.m.)
The best weapon we have against separatism is the elimination of poverty in those regions which for too long have been limited to a mere subsistence level, with the people


forced to till uneconomic farms, forced to accept welfare payments for survival. Poverty that strips the father of a family of his dignity breeds resentment, discontent, unrest and will eventually, I am sorry to predict, breed separatism. Our friends in the R.I.N. know this. Our separatist friend in the far corner of the house knows this. It is in that area of the province that the R.I.N. will devote its time in the future. Ironically, if we were to canvass that area today we would probably find greater support for federalism than anywhere else. Why? It is because, having so little, they fear any movement that might take that little away from them, even temporarily. But there does come a time in the history of all nations and of all peoples when they say, "Well, if I am going to starve I might as well starve under a new system." They could very easily say, "If I am going to starve it might as well be in the new country of Quebec as in the present country of Canada."
Historians in the house know better than I that this is true. The Irish rebellion, and particularly the unrest before it, caused economic hardships in that wonderful country from which they have still not recovered. But you and I know that if we discuss that rebellion with the people of Ireland today, despite their economic problems they will tell us it was worth while.
The other evening a very close friend of mine who has been kind to me since I entered politics suggested that perhaps the English speaking minority in Quebec ranks with the most unpopular of minorities anywhere in the world today. At first I was upset at the thought but upon reflection I had to agree that perhaps there is much truth in this suggestion, and I wondered precisely why. I came to the conclusion that it is perhaps because of the absence of a dialogue, the type of dialogue to which Claude Ryan refers, between the English speaking and the French speaking people of Quebec. In too many instances that lack of dialogue has left French speaking Canadians with a stereotyped concept of what an English speaking Quebecker has been responsible for in the past in that province. We must remember that while the non-French population of Quebec numbers
1,200,000	people, more people, for instance, than make up the population of Saskatchewan, most of that population is situated in the greater Montreal area, so that one out of every three can be classified as non-French speaking. Therefore, contrary to public opinion, in many parts of Quebec there is little or
October 10, 1967

no contact culturally between English speaking Canadians and French speaking Canadians, and direct confrontation or communication therefore is limited all too frequently to business hours.
To the people particularly who have little or no contact with the English speaking minority, we represent in Quebec the absentee owner who for years exploited the labour class by denying them the right to join a union and paid them low salaries and wages under the pretence that this had to be done in order to compete with other provinces or other areas of greater productivity. We represent to many in the remote regions the large, foreign-owned corporations that ravaged our forests or shipped tons and tons of primary ores from Quebec to be returned later in the form of finished products. We represent the almost non-existent but still very legendary figure residing in Westmount, manipulating the strings that activate St. James Street.
Nobody bothers to point out that these things happened in a day long past and that the city of Westmount is today composed almost equally of French speaking and English speaking Canadians. Nobody from French Canada takes the trouble to point out that the ravaging of our forests and the excessive control over Quebec's primary products was possible only with the full co-operation of French speaking politicians, Liberal and otherwise, who were returned in election after election by the French speaking majority of Quebec.
The dialogue which is so necessary in the opinion of Claude Ryan, and I share that opinion, would be much easier if French speaking Canada were to recognize that the English speaking minority that lives in my city of Verdun, for instance, is much more representative of English Quebec not only today but in reality for some considerable time. When I discuss, as I often do, in mixed company the complaints that French speaking Canadians have about confederation, the English speaking Quebeckers of Verdun quite often ask, "What am I guilty of" or, "How did I contribute to the present tension in this province, in this city or in this country?" They point out that their only contact with French speaking Canadians comes at work with the Northern Electric Company, Bell Telephone, Canadair or the railways. They say, "We have the same rate of pay. We do the same job. We reap the same benefits and suffer the same hardships as the worker from French Canada." They are puzzled, to a certain degree with justification.
The Budget-Mr. Mackasey
Others say, "I married a French speaking girl. I get along wonderfully well with her relatives and she with mine," etc. Others say, "Our children play on the same hockey team. What am I guilty of? What is the English, speaking minority of a working class district-such as mine really guilty of other than not communicating enough?" But that is the fault of all Quebeckers, French speaking and' English speaking; we all share the blame for this.
Much of the friction in that province could be eliminated if in French speaking Canada the people would understand that those who admittedly kept Quebec poor when they could have contributed more positively to its growth are not representative of the minority in the province, and that those who exploited Quebec in the past could do so only with the co-operation of French speaking leaders both in and out of politics. Our dialogue would also be more fruitful if perhaps some of the misconceptions about French Canada and French speaking Quebeckers were erased. Expo and the student exchange program this year have done a great deal to portray my province more accurately. Not all French speaking Canadians are called Jean-Baptiste. Not every family contains a priest, a nun or a brother amongst its children. Not all university graduates are lawyers or notaries. While the English speaking universities-I am sure the hon. member for Queens (Mr. Macquar-rie) is more familiar with this subject than I-in this country are rediscovering the humanities, the French institutions of learning are turning out engineers, scientists, physicists and graduates from the new faculties of commerce. They are entering and competing successfully in those fields of finance dominated previously by English speaking Canadians.
Today more graduates of French universities are joining the ranks of the federal civil service than ever before. At least, this has been the situation in the last three or four years for which I have looked up the statistics. Today more than ever before representatives of French speaking Canada are working quietly and effectively side by side with their English speaking friends preparing for the future of this country.
[DOT] (5:30 p.m.)
I hope that the economic realities of the day, the cut-backs contemplated by the Minister of Finance, in no way restrict the economic growth of Quebec or in any way affect the development of those regions

October 10, 1967
The Budget-Mr. Pascoe which, as 1 stated earlier, are the potential source of separatism in the future. Quebec cannot stand any further increase in the rate of unemployment.
Quebec needs more secondary industry than ever before in its history. The labour strife that has marred the Quebec scene lately must be viewed in its total perspective. We must realize that for every strike there are hundreds of wage agreements reached and concluded with a minimum of fanfare in the province. Quebec has an ever-increasing source of skilled labour. The average worker in my province is conscientious and, given the proper opportunity, he will prove to be as productive as the worker in any other province.
Businessmen anxious to protect their present investments, Canadians anxious for this country to reach its potential, people everywhere anxious to remain united, should realize that this is not the time to find consolation in economic arguments against the validity or feasibility of separatism. This is not the time for blackmail or threats; it is not the time to take fixed positions. It is the time for dialogue, for communication, for sacrifice, for understanding.
I am more than ever convinced that in the proper relationship between the two founding races of this country lies our best defence against assimilation by the United States of America. I am convinced that it is under the form of federalism that the best safeguards exist for the continuation of the French language and French culture. These solutions should prove to be little problem, Mr. Speaker, now that sane voices are finally speaking out. As Claude Ryan so aptly put it recently in a thought-provoking editorial, federalism over the last 100 years has made possible in this country freedom of opinion, freedom of religion, freedom of speech, freedom of assembly. What other system, Mr. Speaker, could have done as much?


Mr. J. E. Pascoe (Moose Jaw-Lake Centre):: Mr. Speaker, as the budget debate goes into its fourth day it should be made clear that we are following established procedure. Under the rules of parliament six days are allocated to the budget debate. As is the practice in everv parliament in Canada, the opposition voices strong criticism of government policies and moves amendments which, of course, the government regards as votes of non-confidence
From headlines such as those in the Ottawa Journal for Friday, October 6, which stated

"Grits Survive Another Non-confidence Vote", the public might receive the impression that we are taking up time in unnecessary talk. I just want to make it clear that this is a six-day debate according to the rules of parliament.
In this same vein of informing the public about what we in parliament are doing I should like to press my arguments a little further. Shortly before the resumption of parliament the Prime Minister (Mr. Pearson) outlined a list of 25 important pieces of legislation and 15 other items which he requested parliament to pass before the Christmas recess. I believe that press gallery writers and commentators worked this out to mean that 40 pieces of legislation had to be considered and approved in 45 actual sitting days. The Liberal press as usual has followed the government line. Articles have been written and comments made about the duty of opposition members to oblige the government by passing legislation, as if through the means of some sort of mass production mechanism. According to these Liberal propagandists we must curtail our criticism, limit our debate and give our blessing to all government programs.
Our system of parliamentary democracy does not work in this way, Mr. Speaker. Those who are attempting to pressure the opposition into passing so much legislation in so few days are conveniently trying to forget opposition attitudes from 1955 to 1963. In those days many of those who now sit on the government side sat in opposition, and it is a matter of record how they criticized and delayed measures.
If I may, Mr. Speaker, I should like to draw the attention of the house to two or three opinions expressed by opposition members of the day who now sit on the government side. The Secretary of State (Miss LaMarsh), who in 1962 sat on this side of the house, was very vocal in her criticism. As reported on page 227 of Hansard for October 4, 1962, she said:
All members of the opposition were elected for one purpose, and that was in opposition to the government.
As reported on page 398 of Hansard for October 11 of the same year, the hon. member for Parkdale (Mr. Haidasz) said:
Since it is the duty of members of the loyal opposition to oppose, I cannot see how one can bn'-? effective opposition without constructive criticism.
October 10, 1967

Lastly, Mr. Speaker, the Prime Minister, speaking in the house on February 4, 1963, said as reported on page 3409 of Hansard:
So, Mr. Speaker, surely it is the duty of all members of the opposition in this house to give the people a chance to return what they would consider to be a better government. We can only do that by getting rid of this one, and that can only be done by taking a united stand.
I have quoted those extracts, Mr. Speaker, to show the change in attitude on the government side today. These quotations represented the v.ews of some hon. gentlemen opposite when they were sitting on the opposition side, and they certainly lived up to those views at that time. They now want to limit criticism by hon. members of the opposition by introducing new rules, some of which I favour, though not to the extent of limiting debate.
The debate so far has been very interesting and I congratulate those who have spoken. The arguments have been very direct and opposition members have emphasized a genuine concern about the present economic situation in Canada. The Minister of Finance (Mr. Sharp) very casually described the situation as a heated economy. We agree that there is a heated economy in Canada, and we are trying to put heat on the government to take effective action to combat inflation and control prices of consumer goods and services. In regard to the heated economy perhaps I may be allowed to paraphrase a historical quotation and say that this government fiddles while the heated economy burns.
The Minister of Finance said, as reported on page 2808 of Hansard for October 4:
The undesirable rate of increases in prices and costs to which I referred on June 1 has continued.
Then, as reported at page 2809 he admitted that:
*-the rate of increase in costs and prices is still much too high.
We in the opposition certainly agree with that, Mr. Speaker.
In the Canadian Statistical Review issued in September by the Dominion Bureau of Statistics there are charts which definitely show the steady rise in consumer prices and the steady rise in the cost of food. I commend these charts to the Minister of Finance.
[DOT] (5:40 p.m.)
In this regard I have also received a copy of a letter from the president of an association called "Women Against Soaring Prices," the original of which was sent to the Prime Minister. The writer talks of a petition and asks for an appointment at early convenience
The Budget-Mr. Pascoe to discuss "with you what can be done to combat soaring prices on essential foods and skyrocketing rentals."
I also received a letter from a constituent who of necessity must buy drugs. She sent me bills for drugs which she had purchased on April 6, 1967 and April 25, 1967. The serial number of the prescription is given. On April 6 the drug cost $1.70; on April 25 the same drug with the same serial number cost $2.90, an increase of $1.20, as noted on the second bill. The April 25 bill has this notation also: "N.B. There has been a price increase on this prescription in compliance with the new pricing schedule. Thank you."
May I draw the attention of the Minister of Finance to the report of the thirtieth annual meeting of the Canadian Federation of Mayors and Municipalities. Glancing through this publication I find this statement:
More than half of the 35 resolutions adopted sought increased federal financial assistance, directly or indirectly, for municipalities.
The list of these resolutions has been published. I quoted that paragraph to show the need for the government to take definite action with respect to our present economic situation. As I have said, other members of the opposition have dealt fully with housing costs, high interest rates and the ever-increasing costs of consumer goods and services. Those hon. members offered the Minister of Finance excellent advice.
I now wish to speak about another problem that ought to worry the government but does not seem to. I have a suggestion to make which could help our economy and bring in extra revenue for the government. The Minister of Finance, as well as the Minister of National Revenue, will be pleased that my suggestion will not entail a drain on the federal treasury. It would, in fact, add to the government's cash intake. All that is required is more direct action. Actually, greater sales effort is required.
I refer to the recent drop in wheat prices and the export sales of wheat. Some on the other side of the house may say that this is purely a western problem, but this would be a narrow attitude to take. Wheat prices and sales are of vital concern to the whole Canadian economy. This is acknowledged. For the sceptics on the government side may I refer to the 1963 report of the Bank of Canada and to a statement on wheat by its governor, Mr. Louis Rasminsky. In his report Mr. Rasminsky revealed that export wheat sales saved Canada from a foreign exchange

October 10, 1967
The Budget-Mr. Pascoe crisis. He said that a threatened run on the Canadian dollar was prevented by large sales of Canadian wheat and flour. Incidentally, these large wheat sales were to the Soviet union under contracts made possible by the initiative of the Diefenbaker government. Mr. Rasminsky reviewed the situation and the value of Canadian wheat exports and said that these exceptionally large export sales dispelled immediate concern about the possibility of renewed foreign exchange difficulties.
The wheat problem can best be summarized by reading briefly from a brief article published in the Monetary Times for October, 1967, captioned "Saskatchewan Wheat Pool." It is headed "A Serious Situation" and reads in part as follows:
The 1967 crop is almost all In the bin but the prospects are bleak for its sale at a reasonable price.
The Saskatchewan Wheat Pool is very concerned about this situation and is working hard to try to remedy it.
This article was written before the wheat had been completely harvested. It is all in bins now. It continues:
Chas. W. Gibbings, Pool president, has said that Canadian wheat producers are facing the most critical marketing situation that has existed for more than 20 years. The price of Canadian wheat (at September 8) -
We have seen recent developments. This refers to September 8.
-has fallen by 22 cents a bushel. The price has been forced down to meet the competition presented by policies of other exporters.
The international wheat agreement lapsed on July 31 and a new one negotiated under GATT at Geneva cannot become effective until next July 1.
I now wish to refer to the "Wheat Review". Before doing so, may I say that I have talked to leaders of farm organizations who are concerned with this matter. The Dominion Bureau of Statistics publication dramatically illustrates the drop in wheat exports.


Herbert Wilfred Herridge: Will the hon. member permit a question?


James Ernest Pascoe: Ociober 10, 1967
The Budget-Mr. Cowan official opposition's amendment which reads as follows:
This government has failed miserably to set an example of responsibility by its refusal to reduce taxation, by its reckless increase in governmental expenditures, thus contributing to the steadily rising cost of production to the great detriment of the Canadian economy and to the sharp increase in the cost of living, already overburdensome to the Canadian people.
I shall be most happy to support this amendment tonight, Mr. Speaker.


The Acting Speaker (Mr. Tardif):: Order. It being six o'clock the sitting stands suspended until eight o'clock this day.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Mr. Ralph Cov/an (York-Humber):	Mr. Speaker, before making some direct comments on the budget and estimates for 19671968, I want to take advantage of the traditional leeway that is always extended during the budget debate to refer to some remarks I made in the house last Monday evening regarding payments to hospitals in Quebec. This also, of course, is covered by our own federal estimates under the Hospital Services and Diagnostic Treatment Act.
Some hon. members, particularly those of you from the province of Quebec, may have noted the tremendous furore on the radio and television, and in newspapers in Quebec, with regard to my statement that the hospitals in Quebec were six months behind in the receipt of moneys from the provincial department of health in Quebec. I have no reason whatever to change one iota, one syllable or one word of what I said a week ago last night in this house. I would simply like to add a few remarks to those I made then.
A very highly placed official in the Quebec government called me long distance from Quebec city on Tuesday. He wished to discuss my remarks with me, and I was glad to talk with him. He emphasized, without any heat, that twice a month the Quebec department of health sends cheques to the hospitals in Quebec, on the 10th and 25th of the month. I said to him, "I have never denied you send cheques to the hospitals on the 10th and 25th of each month, if these are your remittance dates, but what I would like to point out to you is that the cheques you sent out in September covered expenses incurred by the

hospitals as far back as February and March, which simply means that the hospitals in Quebec, or the boards of trustees, have themselves had to raise the money for the intervening six months to pay their staffs."
Since then, I have had several hospitals in Quebec telephone me. One hospital in particular wished to know if it was included in the four to which I made indirect reference, and I replied no, that I had not been speaking to any official of that hospital. The spokesman then said, "Count us in, that will make five."
This hospital, I believe the largest in the province of Quebec, to my surprise pointed out to me that when the individual hospitals submit their annual budgets to the Quebec department of health at the end of a calendar year, forecasting their expenditures for the coming 12 months, they do not hear from the Quebec government until possibly July or August. These hospitals have gone along in January, February, March, April, May, or what have you, spending according to the regular details of their submitted budgets. Then, in the summer, they may get word from the Quebec department saying, "We are cutting you back 20 per cent." In effect, the department does not approve a budget submitted at least seven months previously until the government's own good time.
I exceedingly regret the situation in the province of Quebec in this regard. I do believe that the federal government should have the right to demand an accounting of the expenditure of the funds it sends to the province of Quebec to be spent on hospital care under the Hospital Services and Diagnostic Treatment Act. True enough, this money comes under the Interim Financial Arrangements Act.
Last Tuesday, when I pointed out to the very highly placed official in Quebec that although the hospitals there are getting their cheques on the 10th and 25th of the month, but in September they were getting paid for March expenses, he completely changed the subject and said to me, "We in Quebec city have never received a cheque from the federal government for 13 months for hospital services."
You know, Mr. Speaker, the statement the gentleman made was correct. They have not received a cheque from the federal government for 13 months for hospital purposes because under the agreement between the province of Quebec and the federal government the money reaches Quebec under the
October 10, 1967
[Stage Direction]
Interim Financial Arrangements Act, and of course the cheques do not have on them, "For hospital purposes." But the federal government is sitting here passing this legislation, passing these accounts in order that this money may be available for hospital purposes.
I immediately re-checked with the Minister of Finance (Mr. Sharp), with the President of the Treasury Board (Mr. Benson) and with the Minister of National Health and Welfare (Mr. MacEachen) because on Monday morning, a week ago, they had assured me everything that was due to Quebec was up to date. They reassured me on Tuesday afternoon, although they did not need to because I have every confidence that anything paid through the federal government to Quebec under the Interim Financial Arrangements Act is up to date. I just make these comments in passing because I regret the situation, and I wish it could be cleared up to the satisfaction of the hospitals and of their boards of trustees in the province of Quebec.
I am now anxious to make a few comments with regard to a budgetary item in the blue book-
Mr. Beaulieu:: On a point of order, Mr. Speaker, I am very sorry to hear what I have heard, that the government of Quebec does not meet its obligations. I think the hon. member is very sincere when he speaks as he does-


Mr. Speaker:: Order. Would the hon. member kindly state his point of order?


Jean-Paul Beaulieu: The point of order is that the hon. member complains that the province of Quebec has not issued the cheques covering money that it got from Ottawa. I want to say that no hospital has made a complaint so far, and the province of Quebec-


Mr. Speaker:: Order, please. This has nothing to do with a point of order. The hon. member should know that fact.
[DOT] (8:10 p.m.)


Mr. Cowan:: I wish to refer to the budgetary item under the Treasury Board to be found at page 560 of the blue book-Contingencies, subject to the approval of the Treasury Board, $45 million. This is the contingency item of the Treasury Board about which there was considerable discussion and debate in November of last year. I spoke in November of last year and stated at that time that I regretted exceedingly the action of this
The Budget-Mr. Cowan administration in having paid the civil service in mid-November in the manner in which they did. I said it was a denial of democracy. I repeat tonight that the method of paying the civil service in mid-November last year was a denial of democracy and that a subterfuge was used in order to get around an interim supply vote. As a Liberal, born and bred, I regret exceedingly that the party to which I belong should indulge in such practices. I regret that this is the first opportunity I have had to speak on the matter in any detail, but I am taking the first opportunity to do so.
I should like to state that I consider the present actions of the cabinet a mockery of democracy and I am heartsick over the matter. This of course brings up the question, who is or what is the government at the present time? You will find in the parliamentary library a fine book by R. MacGregor Dawson who wrote a biography of Mackenzie King with which most of us are familiar. In 1949 he issued a book entitled "Democratic Government in Canada". On page 1 of this book we read this:
The first and most important characteristic of Canadian government is that it is a democracy, a government which is controlled by the greater part of the people. It rests on the will of the people and is at all times responsive to their opinions.
Then on page 5 we find the following:
Representative government (means) "Representatives" are elected to speak and act for groups of voters in association with representatives who have been similarly chosen by voters in other areas in the nation. The Canadian House of Commons (is) composed of such representatives elected by the people to act in their name and on their behalf.
It is true enough that we have representatives elected to the Canadian House of Commons ostensibly to act on our behalf, but I say to you that the representatives here are never consulted by the administration. We are members of parliament representing in some cases as many as 350,000 people. The first we ever see of a cabinet bill is when it is laid on our desks and we are not supposed to vote against it because this would make us rebels or heretics. I have no idea what the cabinet's estimation is of the intelligence of a private member when they expect to be able to place a bill before a private member which he has never seen and expect him not to question the contents of it simply because it has passed the tremendous brain power we find in the 26, or now 25, members of the cabinet.

October 10, 1967
The Budget-Mr. Cowan
I do not for one moment say that the cabinet is the government. In my opinion the government is the party to the right of the Speaker or, where there is a minority situation as in this case, the government is the majority of the House of Commons necessary to pass legislation.
I have in my hand a transcript of a talk by the Prime Minister (Mr. Pearson) given on the C.B.C. television network at 10 p.m. on October 5, 1965, before the last election. In this talk the following statement was made:
The main reason for this election is that today there are major issues and problems facing Canada, and that in dealing with them the federal government-
Notice the reference to the federal government.
-can do the best possible job only if it has the support of a parliamentary majority-
What is the idea in separating the federal government and a parliamentary majority? Are they two separate and distinct things? In the 1965 election we went to the people looking for a parliamentary majority, but here the Prime Minister says that in dealing with the major issues and problems the federal government can do the best possible job only if it has the support of a parliamentary majority. Quite definitely, here we have the federal government being separated from parliament itself.
Then, speaking in Halifax on October 22, 1965 the Prime Minister stated:
Now, what we want to do in government is to have a government with a majority in the House of Commons-
If the cabinet is the government, then they cannot always have a majority in the House of Commons because there are only 25 or 26 of them and we know that is not a majority in a house of 265 members. Yet, we have the Prime Minister stating that what we want to do in government is to have a government with a majority in the House of Commons.
I agree with him that a government is a majority in the House of Commons, but I cannot agree with the practice which persists in referring to the cabinet as the government and which endeavours to make individual members simply ciphers of the will of the cabinet in the House of Commons. I apologize to the house as a whole, but interestingly I have in my hand a statement sent to me by the hon. Minister of Labour (Mr. Nicholson) having to do with the 1965 election. There is a very wholesome speech here by someone

brought in to speak at his nomination meeting. While there is a statement that it is a speech on behalf of the Minister of Labour, nowhere is the name of the speaker mentioned. I trust, therefore you will not ask me to identify who it was that spoke at the nomination meeting for the Minister of Labour in 1965; you would have to ask the Minister of Labour. In this speech the speaker said that the necessity for a strong central majority government is vital to Canada. There again, you have a man referring to the necessity for a strong central majority government.
The cabinet can never be a majority government. Therefore, what does it mean when we have what I call a cabinet and have a man going to Vancouver and asking for a majority government. An interesting comment in this regard is this. When the Minister of National Health and Welfare (Mr. Mac-Eachen) spoke on December 7, 1966 on the C.B.C. he started his address in this way:
Beginning next year, if parliament approves-
It is very, very seldom that I ever hear the members of the cabinet make any such remark, "if parliament approves". We hear in advance through the newspapers and radio from the cabinet exactly what parliament will approve, because if it does not approve the members who do not agree are rebels or heretics.


Mr. Byrne:: Or unemployed.


Ralph Bronson Cowan: I would not say that. Most of us had jobs. Only a few ran for parliament in order to secure employment. I do not wish to name them.
Mr. MacEachen's speech continues:
This is the main feature of legislation presented to parliament this week by the government of Canada.
Why does he separate parliament and the government. Private members do not have to be consulted if the government of Canada is composed of those who are endeavouring to run things without reference to private members. Only last week I received a circular from the British Columbia Liberal party. It is headed Suite 20, 640 Burrard Street, Vancouver. It suggests that a minority government cannot serve the country as well as a majority government. When one refers to a majority government he must be referring to a majority in the House of Commons. The statement that a minority government cannot
Oclober 10, 1967

serve the country as well as a majority government sounds pretty far fetched, because a minority government still must be assured of a majority in the House of Commons. As long as we have a majority in the house to pass legislation we have government. When it is suggested that a minority is not as good as a majority it must mean that the cabinet is not the government, because the cabinet made up of 26 people is not a majority.
[DOT] (8:20 p.m.)
I stated that I wanted to refer to an item on page 560 of the blue book, amounting to $45 million in contingency estimates. When the Liberal party was sitting in the opposition on December 19, 1962 I held a seat somewhere close to that occupied by the hon. member for Athabasca (Mr. Bigg). At that time the leader of the Liberal opposition made this statement, as recorded at page 2834 of Hansard:
It is a traditional and fundamental right of parliament to vote taxes before they are collected and to approve expenditures before they are made.
I have never heard a statement by a leader of an opposition party with which I agree more. I believe that is the right of any democratic parliament in any country in the world where such a system is followed. However, let me refer again to these contingency estimates in the blue book amounting to $45 million. I must recall the episode last November when a subterfuge was used whereby the cabinet took an amount of money passed for supplementary estimates and used it to pay civil servants salaries in order to dodge a non-confidence vote in this house. In order to indicate who runs the House of Commons let me remind you that I drove on November 10, 1966 from Toronto to Ottawa on the word of the government whip that my presence was necessary to carry a vote in order to get interim supply.
I sat here and listened to the Prime Minister outline what was to be done. As he did so, I became a little more burned up, particularly when I recalled his words that it was traditional and a fundamental right of parliament to vote taxes before they were collected and to approve expenditures before they were made. Surely, that is a fine mouthful of words when you are on the opposition side.
After it was announced in this house that the civil servants would be paid with interim supply money voted for other purposes I passed through the curtains to the members' lobby and grabbed a member of the cabinet, a lawyer. I said to him, What is the legal authority for this underhanded action on the
The Budget-Mr. Cowan part of the cabinet? This member said to me, "Ralph, I haven't the slightest idea; I was never consulted on the matter." I then grabbed another member of the cabinet who was passing by and asked him under what authority the civil service was being paid as a result of what had taken place in the House of Commons. He replied, I was never asked about the matter at all. About four days later, I spoke to another member of the cabinet who had not been present in this house on November 10, and said to him that it was too bad private members did not take their responsibility as easily or as lightly as members of the cabinet. I reminded him that he was not even in the house on November 10 when a vote was expected. This member of the cabinet replied to me, "R.B. I asked what they intended to do about paying the civil service and they told me what they intended to do, so I flew home"
Following that exchange I asked this member whom he meant by "they", and he just smiled. Let me suggest to you that "they" certainly are not a majority of this House of Commons. This is a certain group of people who decided to circumvent that vote in parliament by using interim supply funds voted for other purposes.
I am concerned about this $45 million contingency estimate in the blue book. It is still a fundamental right of parliament, as the hon. member for Algoma East (Mr. Pearson) said a long time ago, in 1962, to vote taxes before they are collected and approve expenditures before they are made. The public accounts committee of this house met last November and discussed this matter in detail. I have a copy of the report of that committee for Wednesday, March 1 covering its considerations of November 22 and 23. It is based pretty much on a statement prepared by the Auditor General of Canada, Mr. Henderson, in whom we all have utmost confidence. That committee discussed this matter in detail, following which it brought in its thirteenth report. Among the recommendations of that report following the evidence of Mr. Henderson the committee stated:
The committee discussed this statement on that date and questioned the Secretary of the Treasury Board who provided the members with additional helpful information on the subject. This discussion brought out clearly both the significance and importance of parliament's control of public funds and the need for continued vigilance on the part of all members of the house to ensure that the control is effectively and properly exercised.
The committee is of the opinion that there is a weakening of parliamentary control when parliament is unable to take the time to examine in detail the amounts being requested as interim

October 10, 1967
The Budget-Mr. Cowan
supply particularly when these exceed the normal 1/12 for each month for which interim supply is requested. It considers it unfortunate that the parliamentary rules do not provide for immediate consideration of the estimates after they are presented to the house so that the proposed spending can be approved and interim supply would not be required so extensively. It feels that the rules could and should be changed in this regard in order not only to strengthen parliamentary control of public funds but to give the executive the clear mandate it deserves in the discharge of its heavy responsibilities.
The committee submits the following recommendations designed to strengthen parliamentary control of public expenditures in the future:
1.	(a) that the business of the house be so arranged that consideration of the annual main estimates by the various committees of the house and by the house itself be completed within three months of the tabling of these estimates;-
This is October and we are discussing estimates which were submitted last spring.
The recommendations then continue as follows:
2.	that there be no change in the treasury board's procedure whereby it is the agency which determines the government's overall cash requirements in stated areas, e.g., salary increases. However, once this determination is completed and the individual departmental needs established the committee believes that the additional amount required by each department should be made the subject of a supplementary estimate prepared by the department concerned for submission to parliament for its consideration and appropriation in the usual manner.
That public accounts committee report was tabled in this house on March 1. It has never been brought to a vote, even though the chairman of the public accounts committee wanted to move concurrence in order that there might be a vote on the floor of this house.


An hon. Member:: Would the hon. member permit a question?


Ralph Bronson Cowan: I have only six minutes left at my disposal. This government has included a contingency item in the amount of $45 million, in spite of the fact that this committee recommended that supplementary estimates of various departments be made the subject of supplementary votes by the departments concerned.
In the last paragraph of Mr. Henderson's recommendations and conclusions he stated:
This approach may make for smoother administration overall but runs counter to the very proposals of decentralized authority which the Glassco commission preached and which treasury board now proposes to adopt. I think in circumstances such as these it would be more meaningful and certainly more helpful to the house in its control of the money supply were the amount of the individual departmental requirements for the
[Mr. Cowan.)
additional salary money to be the subject of supplementary estimates put in by each of the departments concerned-in fact, it seems to me that this is precisely what the supplementary estimates procedure is for, namely to bring to the attention of the house unforeseen expenses encountered by a department, e.g., retroactive salary revisions. If a change like this were to be made, then the finance contingencies vote could be returned to its original concept, namely that of a small fund to be retained for unexpected and unforeseen items.
I believe we are experiencing a mockery of democracy as long as we withhold from the parliament of Canada the opportunity of passing on these estimates for interim supply, if it is necessary to have interim supply, because we are being asked to vote in this case $45 million, and were asked to vote not long ago $110 million to the contingency fund. That, to me, does not show able management of the nation's finances when you have $110 million in a contingency fund.
[DOT] (8:30 p.m.)
I should like to draw the attention of the house to this fact. Get your blue book, look at page 560 and you will find we are asked to pass a $45 million contingency vote under the 1967-68 estimates. Then, it says that for
1966-	67 the figure was $29,651,300. Turn to the front of the book and you will find these words on page 4, across the top:
General Summary. Estimated expenditure for the fiscal year ending March 31, 1968,-
This is the first column of the table shown on page 560.
-compared with the aggregate of the main estimates, supplementary estimates (A), supplementary estimates (B), supplementary estimates (C), supplementary estimates (D), supplementary estimates (E) and anticipated further and final supplementary estimates for the fiscal year ending March 31, 1967.
The figure given on page 560 for 1966-67 is $29,651,300; yet on page 4 you are told that
1967-	68 is compared with the aggregate of the main estimates and supplementaries for 1966-67. I tell you that the main estimates plus the supplemental totalled $110 million for 1966-67. Why do they take the total estimates of 1966-67 of $110 million under that heading and refer to them as being $29,651,300? What happened to the remaining $81 million in there, because in the vote it says that this money can be re-used if repaid into the contingency fund?
The Auditor General has advised against adopting this practice. The public accounts committee has recommended that this practice be not used. The Prime Minister himself, speaking in the house on December 19, 1962, said that it is traditional that parliament
October 10, 1967	COMMONS
approve expenditures before they are made. But we have it in the blue book that the government is asking for $45 million for a contingency fund. I have looked up the contingency votes from 1954 to date. I have spent a great deal of time on the matter. I looked at the figures from 1954 to 1957 because a Liberal government was in office at that time. The contingency fund was then only $1 million or $1J million except for the last year, 1957-that is the last year of the St. Laurent government-when there was a contingency fund of $30 million. Under the Diefenbaker government the contingency fund was down to its normal figure of $1J million to $2 million.


Some hon. Members:: Hear, hear.


Ralph Bronson Cowan: But once we get into 1963-1964 you get the figures going sky high through the roof because of the way in which the contingency fund is being administered. The Auditor General refers to this in his report given to the public accounts committee of the House of Commons. He shows in that report how this fund has been going up to $46 million, $71 million, $60 million, $60 million, and one year $110 million. There has been ample time to prepare the votes in this blue book for possible salary increases throughout the various departments for the year ending March 31, 1968, without the cabinet coming back here and laughing in the face of the public accounts committee or without laughing in the face of parliament and putting in an estimate for $45 million for contingencies.
I regret that Right Hon. C. D. Howe, whom I consider to be one of the greatest Liberals of all time, made the remark, "What's a million?" That remark was made in the heat of debate during the war. I can forgive him for asking, "What's a million?" But discussing the figure of $45 million in a contingency fund estimate with a cabinet minister-


Mr. Speaker:: Order please.


Some hon. Members:: Carry on.


Mr. Speaker:: I have to interrupt the hon. member as his time has expired, unless he has the unanimous consent of the house.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: I hear at least one "No."


David Réal Caouette: Who said "No"?


Harold Warren Danforth: The Liberals shut him off.
DEBATES	2959
The Budget-Mr. Dinsdale


Mr. Bigg:: On a point of order, Mr. Speaker, would it be in order to endorse in toto the last speech?


Some hon. Members:: Oh, oh.


Mr. Speaker:: It might be in order, but it would not be a point of order.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, during the course of the budget debate today several hon. members indicated at the outset of their remarks that they would keep them on a high, non-partisan level. Having just listened to the hon. member for York-Humber (Mr. Cowan), I think we can classify him in the group of non-partisan speakers this evening.


Some hon. Members:: Hear, hear.


Walter Gilbert Dinsdale: The hon. member for
York-Humber is speaking from the government side of the house. I noticed that the back benchers on the government side, as well as those on the treasury benches, were listening with a great deal of attention and care to what the hon. member was saying. I am sorry that the President of Treasury Board (Mr. Benson) was not in the house to hear the speech, because the hon. member for York-Humber took a somewhat different tack from that taken by the minister this afternoon. The minister suggested that so far as our economic and fiscal affairs are concerned, all is for the best, in the best of possible worlds.
Having said that I wish to take a non-partisan approach this evening, I can agree with other speakers who have indicated that, while we might have difficulties in Canada, if we look at the total prospect and if we look at the situation in a non-biased manner, we have much to be thankful for in this country. I believe this has been the keynote of our centennial celebrations. I feel that the centennial celebrations have done more to create a spirit of unity and national purpose than anything that has taken place during our discussions in this house.
This provides me, Mr. Speaker, with an opportunity to pass along a word of commendation to one who has had a major responsibility for creating, in the first instance, and then carrying out many of the ideas which have since been implemented as centennial projects. I refer, of course, to Mr. John Fisher who just the other day-


Some hon. Members:: Hear, hear.
October 10, 1967

The Budget*-Mr. Dinsdale


Walter Gilbert Dinsdale: -indicated that he was leaving his post as Canada's Centennial Commissioner and moving back into the publishing field. Those who had the opportunity of working with Mr. Fisher when plans for the centennial were first under discussion have to admit, even though politicians take a great deal of credit for what has been accomplished during the past year, that the really successful ideas, such as the centennial train, the centennial flame, and the many manifestations of Canadian culture that have taken place daily here on the hill-came from the fertile mind of Mr. John Fisher.


Some hon. Members:: .Hear, hear.


Walter Gilbert Dinsdale: We wish him well as he moves into further fields of service to Canada. I think we would all hope that those fields might have closer identification with the affairs that take place here on parliament hill. However, it would appear that this is not to be so, judging from the announcement of Mr. Fisher himself, that he has already made his decision. One never knows, however, just how public events will eventually take shape in Canada. It could be that, in the not too far distant future, Mr. Fisher will be called upon to play a very important role in the affairs of the nation in this, the highest court of public opinion.
[DOT] (8:40 p.m.)
While I am saying, Mr. Speaker, that we in Canada have much to be grateful for, it is obvious that we are facing critical financial and economic problems. Ever since we resumed our session two weeks ago the major burden of the debate has rotated around such subjects as the housing crisis and inflation. The Minister of Finance (Mr. Sharp) now adds another interesting, ambiguous phrase by referring to "the necessity for managing prosperity".
I am not going to deal, Mr. Speaker, with these all too obvious difficulties that have been referred to by many members in the course of the budget debate. However, I am going to suggest that one of the main reasons the government finds itself in a difficult and complex financial situation at the present time is its tendency to take as gospel truth its own propaganda. It has begun to believe in its own inspired publicity releases, and over the past few years that the Liberal party has been in power this tendency has created a psychological atmosphere which is becoming increasingly difficult to control.


It was interesting to listen to the impassioned plea of the Minister of Finance as he attempted to dampen down the fires of inflation that have been kindled by this psychological propaganda campaign. Obviously the President of the Treasury Board and Minister of National Revenue (Mr. Benson) does not accept the advice of the Minister of Finance, because this afternoon he made a speech which indicated he was still of the opinion that there is nothing critically wrong with the state of the economy in Canada.
It is also of interest, Mr. Speaker, that the President of the Privy Council (Mr. Gordon), the former minister of finance, was the first to reject publicly the appeal of the present Minister of Finance for voluntary restraint. He has been the perennial optimist of the Liberal government and Liberal cabinet, and in his speech the other evening he saw nothing about which to be unduly worried. He said everything would straighten itself out in due course if we would all refrain from rocking the boat.
This is an indication, Mr. Speaker, of the difficulties the Minister of Finance is experiencing in controlling the spending habits of his own colleagues in the cabinet, and it accounts for the runaway inflation from which Canada has been suffering during the past two or three years.
In his comments this afternoon the Minister of National Revenue sought to compare the wonderful state of the economy with the rather unhappy state of affairs that existed, say, six, seven or eight years ago when another party was in power. This is the basis for the propaganda which has led the present government into the slough of despond in which it finds itself at the moment.
I should like to take the opportunity, once and for all, to give the lie to this persistent propaganda that at the beginning of the sixties things were going to the dogs in fiscal and monetary terms but that now we are headed into the promised land of prosperity; that, to use the phrase of the Minister of Finance once again, all we have to do is to manage our continuing Liberal prosperity.
I like to read the speeches of ministers from time to time, Mr. Speaker, especially those that are delivered beyond the shores of Canada, because sometimes a non-partisan and objective viewpoint is expressed of the sort that is not often heard when a minister speaks in this country. In a speech before the Chambre de Commerce Franco-Canada in Paris on February 10, 1966, the Minister of
October 10, 1967

Facing that economic situation, Mr. Speaker, the government came into office in 1963 having been confused by its own propaganda, which had been declaring that the Canadian economy was in a depressed condition.
[DOT] (8:50 p.m.)
The government said that it must get the economy moving once again and that finance was hopelessly confused. It proceeded to operate on the basis of its own delusions, the result being that we are faced with inflation to the extent that the Minister of Finance has to plead with his colleagues for restraint, and to plead with the public. Goodness knows, though, the public, with the increasing taxation and all other fiscal ills that have beset it, has been exercising admirable restraint. The

The Budget-Mr. Dinsdale President of the Privy Council and the Minister of National Revenue during this debate have turned aside from the appeal of the Minister of Finance for restraint within the government.
There is a tendency, too, to blame the provinces. I want to deal with this aspect of the government's interpretation of the current economic crisis for a few moments. When the government resumed office in 1963, part of its propaganda barrage was that the spirit of co-operative federalism would reign supreme in the administration of Canadian affairs at all levels. This was wise, because with our divided jurisdictions and our political and economic structure we can deal with national economic and fiscal policies successfully only by the closest possible inter governmental co-operation. It is distressing to see the current trend; now that the government is in trouble it tries to tie the can to the tail of the provincial cat.
I shall deal with one instance to show what the government currently is doing. In the manpower area, for example, we have recently seen a thoroughgoing revision of the functions of the unemployment insurance commission and national employment service; the name of the organization has been changed to the department of manpower. Ottawa has moved wholesale into this area on the strength of the constitutional amendment which was necessary to set up the unemployment insurance commission. All these revisions entail, it seems to me, a propaganda approach. The term "manpower" in this area of economic activity is popular among social scientists today and the government has applied it to its revamped national employment service. I will not say whether that is wise or unwise, but I do say that in moving wholesale into this area the effect on the government's retraining program has been disturbing. Some aspect of this has already been discussed and there will be more discussion along these lines as the current year takes shape.
In the medicare field, several speakers have referred to the urgent necessity for further conferences and consultations between Ottawa and the provincial governments. Medicare is an important new development in the social welfare and health field. This brings us to something that has been referred to several times in the debate, the necessity of emphasing priorities of expenditure. The Minister of Finance and the President of the Privy Council, through their responses to
2962	COMMONS
The Budget-Mr. Dinsdale suggestions from opposition spokesmen, seem to think that we are against medicare. That is a propaganda line and is patently false. One could call it plain, cheap politics with respect to this important health measure. We are asking for further consultation because the provinces are unhappy with the fiscal demands that will be placed on them by this arbitrarily imposed federal initiative. They object not only to the fiscal demands but also to the inadequacy of the federal government's proposed program. This leads one to comment on the whole approach of the Liberal government to the social welfare and health field.
There has been complete lack of planning and rationalization of our health and welfare programs to meet the demands of these important areas of human activity. The government's emphasis is on what one might call the welfare state, a concept that is rapidly becoming outmoded in the light of experience of countries which have gone holus-bolus for the welfare state, such as the United Kingdom and, to a lesser extent, Sweden, with its great social democratic experiment.
The provinces are not demanding cradle to the grave welfare, which takes care of one whether one needs it or not. The provinces are providing realistic leadership here. They are asking for priorities. The implication of priorities is that we shall develop a social program that will provide assistance where it is needed and help Canadians everywhere to deal with handicaps, whether they are educational, fiscal or physical, that they may fulfil themselves to their maximum advantage within a free society. Before we become embroiled in a medicare scheme which does not come to grips with the fundamental and broader needs of health care in today's Canadian society, the federal government would be well advised to call together the provinces and to listen carefully to what they are saying on these matters.
The Prime Minister has entered this debate. Defending the charge that the federal government has been unwisely lavish in its expenditure of public funds, he said that the provinces are in precisely the same position and are just as guilty as Ottawa in making unnecessary expenditures.
I shall not defend the provinces; I am not familiar with what has happened in every province, but I can speak for my own province, Manitoba, which had a change of government in 1958. The government of that year replaced one which had been continuously in office since 1922. The proud boast of the old government had been that it had the

DEBATES	October 10, 1967
lowest tax rate of any provincial government in Canada.
[DOT] (9:00 p.m.)
The obvious answer is that the level of services provided was also the lowest. It happened to be a Liberal provincial regime, and if recent provincial expenditures in that province have increased at substantial rates in the past it is because of the need to remedy the long years of neglect particularly in the area of education. Manitoba has made education its number one priority, a position taken by a number of other provinces which realise that in order to make it possible for human resources to be used with maximum effect people must be provided with the schooling that is necessary.
Over the weekend we were given an example of what is happening in Manitoba and in other provinces in Canada which have had to take a lead in meeting the rapidly growing need for higher education. Over the weekend Brandon College formally assumed university status. Among the special events which took place was the conferring upon the hon. member for Winnipeg North Centre (Mr. Knowles) of an honorary doctorate. So, from this point onward the hon. member for Winnipeg North Centre can be addressed as "Doctor".
As to this tendency to criticize provincial authorities, I wish to refer to another matter in which I have taken a close interest during the past several years, the whole subject of recreational park development. It was hoped in 1962 that the government would meet the rapidly increasing demand for recreational services for our urbanized society. It was hoped that Ottawa would seize the initiative in promoting an effective recreational parks development program. Each year since then discussions have been held on the subject, promises have been made and we have been told that some scheme or another was just around the corner. Nothing materialized and the provinces have at last got tired of waiting for federal initiative, with the result that right across the country they are moving into this area of park development, something which involves the expenditure of considerable sums of money. I think this is an area which accounts in a substantial measure for at least some of the expenditures by provincial government to which the Prime Minister referred.
The same applies to the roads to resources program, another co-operative federal scheme which has been discontinued by the present government. Roads are basic to development
October 10, 1967	COMMONS
and it has become necessary tor provinces to assume complete responsibility tor this aspect of their progress.
To sum up these observations about the tendency of the federal government to shift responsibility on to the provinces, I shall make a passing reference to the constitutional debate or to the so-called confederation crisis. I agree with all those who have said we must take particular care to be non-partisan when dealing with this subject. Here is an area where continuous dialogue is necessary if we are to reach any common basis of understanding and obtain the unity which can possibly be obtained out of the diversity of the Canadian body politic. Here again the provinces have been obliged to take the initiative. The Confederation of Tomorrow Conference which should have been initiated by the federal government has, instead, been initiated by the government of Ontario. This is one of the most severe criticisms which could be directed-


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


Some hon. Members:: Carry on.


The Acting Speaker (Mr. Rinfret):: Is there unanimous consent for the hon. member to
continue?


Some hon. Members:: No.


David Réal Caouette: Mr. Speaker, I thank my excellent friend from Lotbini-ere (Mr. Choquette) for having recognized that I am still the head of the movement which I have been representing in this house for more than six years already.
Mr. Speaker, we have before us an amendment moved by the Conservative party and providing that:
This government has failed miserably to set an example of responsibility by its refusal to reduce taxation, by its reckless increase in governmental expenditures, thus contributing to the steadily rising cost of production to the great detriment of the Canadian economy and to the sharp increase in the cost of living, already over-burdensome to the Canadian people.
This is a series of words which do not mean much, because absolutely no solution is given to that knotty problem now existing in this country.
It is all very well for the Conservatives to say that the government has refused to lower taxes. But when they were sitting on the government front benches, did they lower
DEBATES	2963
The Budget-Mr. Caouette taxes? In what way and at what time have they lowered taxes? Did they curb government expenditures?
Following the Liberals in 1956-57, just like today, following the Conservatives, we note that unconcern toward government expenditures. The word "unconcern" is perhaps a little strong, because all of us, Conservatives, Liberals, Creditistes, are always asking more for the Canadian people.
In the field of agriculture, for instance, we pestered the government, and quite rightly, so that it might give the farmers $5 per hundredweight of manufacturing milk. We asked the government to increase pensions and to spend more in one specific field. For six years now I have been asking that the radio and television services of the French network of the C.B.C. be extended to French-speaking populations in British Columbia.


An hon. Member:: That will start on November 1.


David Réal Caouette: Wait. I understand it is supposed to start on November 1, but I am still not too sure about that.


Some hon. Members:: Oh, oh.


David Réal Caouette: In any event, I put the question to the hon. Secretary of State (Miss LaMarsh) ten days ago. The hon. minister did not know and a civil servant who was seated up in the gallery sent her the note I have here, in which he said bluntly:

Minister: Re Caouette question on C.B.C. French services to B.C., the situation is:
Radio-an application for establishment of a French language F. M. station in Vancouver has been approved and the station is expected to be on air November 1.
[DOT] (9:10 p.m.)


Some hon. Members:: Hear, hear.


Harold Edward Winch: Why?


David Réal Caouette: My hon. friend from Vancouver East asks me why. I say to help him to understand French in Vancouver when he is there.


Harold Edward Winch: I spend a lot of time in Ottawa.


David Réal Caouette: Maybe you would prefer to be in China. You have only to go if you want. Nobody stops you from going. The note continues:
T.V.-in long-range plans but nothing definite at this stage.
2S64	COMMONS DEBATES	October 10, 1967
The Budget-Mr. Caouette
I see my hon. friend from York-Humber applauding because apparently it will take another decade, or two decades, before they get t.v. in French in Vancouver.


Ralph Bronson Cowan: Why in French, man?


David Réal Caouette: Why an English T.V. station in my own district? Tell me why?


Some hon. Members:: Hear, hear.


David Réal Caouette: Mr. Speaker, it is beyond my understanding when I see narrow-minded people cause prejudice to unity and understanding among Canadians. As for me, I was happy to learn the English language when nothing whatsoever compelled me to do so.


Some hon. Members:: Hear, hear.


David Réal Caouette: Indeed, I learned that language.
We are glad we have English radio and television stations in the cities of Quebec and Trois-Rivieres, because we are aware that the English-speaking Canadians of Quebec enjoy, in our province, the same rights as we do.


Some hon. Members:: Hear, hear.


David Réal Caouette: I declare, Mr. Speaker, that I should enjoy the same rights in British Columbia, in Saskatchewan, in Alberta, in Manitoba-


Some hon. Members:: Hear, hear.


Harold Edward Winch: But the English are paying for French T.V.


David Réal Caouette: And the French are paying part of your salary here in Ottawa.


Some hon. Members:: Hear, hear.


David Réal Caouette: Listen to that, Mr. Speaker. I have just been told that Vancouver taxpayers will be paying for that.
Mr. Speaker, over the weekend, we had our convention of the Ralliement Creditiste in Quebec. Today, I read an article in La Presse written by a newspaperman who attended the convention. Just to show you to what extent a newspaper man can be-possibly not dishonest-but lost in the clouds, like certain leaders we have in province of Quebec, I shall read what he wrote:
Mr. Caouette's concept on the constitution is well known. Canada should continue to exist as is. There is only one country and two cultures that should be officially recognized.
[Mr. Caouette.}
That is not at all what I said. So, I should like to repeat here in the house what I said at the convention, so that it will be recorded in Hansard and my friends for York-Humber and Vancouver (Messrs. Cowan and Winch) will know exactly what my personal convictions are and know also the convictions of the group I represent in the house and those of all our partisans in the province.
Mr. Speaker, there are not ten Canadas, according to the whims of wishes of the provinces. There are not five Canadas. There is but one country, called Canada, from Newfoundland to Vancouver. I hope my friend, over here, has understood me.


Harold Edward Winch: One Canada?


David Réal Caouette: One Canada. Now that my hon. friend agrees with me, he will be willing to pay taxes for a French T.V. station in Vancouver.


Harold Edward Winch: No "two nations."


David Réal Caouette: No two nations, no special
privileges.


Harold Edward Winch: One Canada.


David Réal Caouette: Yes, and respect between all the others existing in Canada. Now, let me finish my statement.

One Canada, with the various cultures it is made of. Not two cultures, but several cultures! And I know what I am talking about!
At home, in Rouyn-Noranda, we have Ukrainians, Poles, Italians, Russians, Finns, Yugoslavs, Tchecoslovakians. We have about every culture, and mind you, they each have their own association. Each group has its association in our area. Every year these various groups have their celebrations, and we are glad and happy to see, for instance, the Ukrainians celebrate their feast. We attend their folk dances and their sing-songs. We see the Poles and the Germans performing theirs. And two years ago, during a trip to Winnipeg, I noted the same thing in that area. These Ukrainian, Polish, Italian and German people are neither French Canadians nor English Canadians, but they are still Canadians, and I am convinced of their cultural contribution to Canada.
I would like to continue my speech. Canada is one country. We should not be afraid to
Ociober 10, 1967

say it. The proponents of the two-nation concept, three nations, one and one fourth nation, who do not know the meaning of the word "nation", have said: We are in favour of two nations. What does this mean? This means "two founding people". This is not what "nation" implies. A nation, to my mind, is all the citizens of a same country. Here, in Canada, we have citizens of various origins, living in a country called Canada.
Mr. Speaker, several cultures, two official languages. Two official languages-
[DOT] (9:20 p.m.)


Ralph Bronson Cowan: There is only one official language.


David Réal Caouette: Two official languages. [English]


Ralph Bronson Cowan: The other is permissive.


David Réal Caouette: Your English in my province is permissive and this is because we want to respect you. We are giving you permission to speak your language in our province.


Auguste Choquette: One official language- French.

Mr. Speaker, the hon. member for Yorlt-Humber (Mr. Cowan) is more of a separatist than the hon. member for Lapointe (Mr. Gregoire), in that case.


Some hon. Members:: Hear, hear.


David Réal Caouette: Two official languages-


Ralph Bronson Cowan: One.


David Réal Caouette: -because our country was in fact built by two different ethnic groups, two different cultures. The Ukrainians, the Poles, the Italians, the Germans, the Russians and the Slavs who come to Canada do not refuse to learn English or French, nor to accept these two as the official languages of the whole country, not only of Quebec. No, they are official in the whole of Canada.


Some hon. Members:: Hear, hear.


David Réal Caouette: When our forbears discovered Canada, they did not discover Toronto, Montreal or Quebec city only, they discovered the whole of Canada, and some of our people live in western Canada, just as there are Anglo-Saxons in Quebec. It is strange that, in the
The Budget-Mr. Caouette province of Quebec, we do not hear Anglo-Saxons complain about the way they are treated.
I will now complete my remarks, I will explain my position. National unity, according to the member for York-Humber, would consist in speaking only one language in Canada. In my opinion, national unity is something else. When the member for York-Humber treats French-speaking Canadians in Ontario and elsewhere in Canada as we treat the English-speaking minority in Quebec, then we will have national unity.


Some hon. Members:: Hear, hear.


David Réal Caouette: That does not mean that the hon. member must learn French, no. There are in Quebec English-speaking people who have always refused to learn French; that is their business. However, is not my very good friend, who is in favour of the monarchy, a little ashamed when he hears Her Majesty the Queen of England speak French practically as well as we do?


Some hon. Members:: Hear, hear.


David Réal Caouette: There is not a single Prime Minister of Great Britain who does not speak French. The hon. member for York-Humber is still one of those Orangemen from Toronto who have always refused to learn anything but English.


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


David Réal Caouette: Yes.


Joseph-Alfred Mongrain: Does the hon. member know that the grandfather of the hon. member for York-Humber who is buried in a Trois-Rivieres cemetery spoke French?


An hon. Member:: His children turned out scamps.


David Réal Caouette: Mr. Speaker, I thank the member for Trois-Rivieres (Mr. Mongrain) for letting me know. It is unfortunate that the grandson did not follow in his grandfather's footsteps.


Some hon. Members:: Oh, oh.


David Réal Caouette: Mr. Speaker, once more in a serious vein, I feel that when Canadians, from coast to coast, understand not only the necessity but the urgency of recognizing the two official languages right across Canada, we
2966	COMMONS
The Budget-Mr. Caouette will then help all our fellow-citizens, regardless of their origin; we will then respect the very basis of confederation, the very basis of the agreement between French-speaking and English-speaking citizens.
Then, Mr. Speaker, a lot of things will be settled, many problems solved. But as long as there are narrow-minded people on both sides-and there are some also among French Canadians, namely Pierre Bourgault of the R.I.N.-it will be more difficult. I watched Pierre Bourgault on television last night. As of yesterday, he is against terrorism; the day before, he was ready to sink ships going through the St. Lawrence seaway. One day, he is a terrorist, the day after, he is not.
This is to show you, Mr. Speaker, that this matter is very important. But it will be settled much more easily after the economic problem is geared to present needs and solved so as to meet the requirements of all Canadians.
And here is a clipping from La Presse where the former minister of justice of Quebec, Mr. Claude Wagner says:
Convinced that, on the whole, the population of Quebec does not care a hoot about the constitutional crisis and that the citizens of Quebec, according to him, mostly want "bread, butter, security, order and justice", Mr. Wagner stated that the Quebec political elite should come to its senses and deal with the problems facing Quebec.
And not only Quebec, but all over. Further on, he speaks of the famous war on poverty that seems to be forgotten everywhere.
Mr. Speaker, it is a fact that we have been hearing about war on poverty in parliament for some time. Themes have been brought forward, yes, but no solution. As the Minister of Finance (Mr. Sharp) said on October 2, as reported on page 2730 of Hansard:
But I decided it really was not necessary because I remember with what wholehearted enthusiasm the members of the official opposition urged us to spend hundreds of millions of dollars in excess of what we have.
When I hear the Minister of Finance or his assistant talk to us about "spending money in excess of what we have" I wonder what are our means? The means given to us by Washington? The financial or physical means at our disposal for the development of our country? Do we have the physical means necessary for development in the field of housing construction, food prices, the increase of agricultural production and the establishment of secondary industries in Canada, or

DEBATES	October 10, 1967
are we only to take into account our financial resources? I understand that the minister, or the government, has to ask New York for the financial permission to develop anything in Canada.
Mr. Speaker, all this is very annoying. So far as financial means are concerned, it is more than a simple question of "means", for we are asked for interest which we pay without paying off the capital. We, members of the Ralliement Creditiste, still maintain that whatever may be accomplished physically in Canada could and should be financed through the Bank of Canada. I see that my hon. friend from Saint-Maurice-Lafleche (Mr. Chretien) finds that funny. In fact, he was telling me a while ago that we agree as to the constitutional problem right up to the point concerning the Bank of Canada.
[DOT] (9:30 p.m.)
Now, merely to include the Bank of Canada in the constitutional debate would allow the bank to finance our economy and to wage war efficiently against poverty. Then, other constitutional problems would be easily solved, since no one is more interested than our people in seeing an improvement in the economic climate.
And when we hear-


Joseph-Alfred Mongrain: It would be a good thing to abolish election funds.


David Réal Caouette: This would be a step in the right direction, to abolish election funds, so as to save more money to fight poverty. However, Mr. Speaker, complaints are being heard today from certain people, especially from Quebec, who decry Ottawa: Ottawa steps on the provinces' toes; if things go wrong, it is Ottawa's fault; if things are going wrong in Quebec, it is because of Ottawa.
I have here a table showing the various taxes levied in the ten Canadian provinces. This chart was prepared by Mr. Henri Bel-lehumeur of Rouyn, after he had inquired from every province about sales taxes, taxes on meals, hotel rooms, soft drinks, hard liquor, telecommunications, tobacco, cigarettes, and gasoline.
In Quebec, it is 8 per cent across the board. Nobody can say it was Ottawa who imposed the 8 per cent tax; or the 48-cent tax on cartons of cigarettes; or the 16-cent tax on gasoline. If we compare this situation with that prevailing in Alberta who has only 2 million inhabitants, we find that there are no such taxes except for a 12-cent tax on gasoline. In fact, meals, hotel rooms, soft drinks, drinks in
October 10, 19G7

general, beer, telecommunications, tobacco and cigarette cartons are not taxed at all.
Mr. Speaker, Alberta is also part of our country of Canada, and so is British Columbia. In Ontario, they also have a 5 per cent sales tax, but no tax on hotel rooms, and only 20 cents tax on a carton of cigarettes. Those are provinces of Canada. Those taxes were not imposed by Ottawa^ the decision was entirely theirs, and in Quebec on top of all that we have a provincial income tax.
I understand that equalization payments are made by Ottawa to offset the tax levied by Quebec; I agree. But the Canadian citizen, Mr. Speaker is paying double tax, and this is not Ottawa's fault. Ottawa should not always be blamed. Everyone should start by taking his responsibilities in his own province.
I feel that if Quebec is now the most heavily taxed province, confederation is not to blame but the governments we elected. That is where the responsibility lies.
There is no doubt that Ottawa is not blame-meless and must be brought back to reason but the provinces must assume their responsibilities. That is where we stand. When the provinces get together with Ottawa, instead of talking only about the right to relieve the people of their money, about taxation, as we say, to use words that everyone does not understand all the time, they should discuss monetary reforms, basic reforms and say, like the famous general who one day came to Canada or the province of Quebec: Let us go to the heart of things. Let us do it and we will see that the heart of the matter is money.
The Minister of Manpower and Immigration (Mr. Marchand), who is in his seat, would be happy if he did not have any monetary problem in his department. But he forgets about the monetary problem; he looks only at the fiscal problem, as is done in all departments, especially in the Department of Finance, that is the right to levy taxes.
If the provinces do not like it, all they have to do is increase taxes. It is true that they have the right to do it. But if Ottawa does not reduce taxes in proportion to the increases levied in the provinces, the Canadian people, the worker, the farmer, the white-collar worker will be unable to pay more. Let us go at the bottom of things, but let us do it. It is not only a matter of speaking French or English, it is a matter of living in one's country and everybody knows that Canada is one of the richest countries in the world. Now, it is unthinkable to see poverty in the midst of
The Budget-Mr. Olson plenty. Let us open or break down the doors of poverty to enable abundance to meet the needs of every Canadian citizen and we will then attain national unity.


Harold Edward Winch: Mr. Speaker, the question I should like to ask is, irrespective of the treaty with Paris of 1763; irrespective of the ethnic, cultural and language groups that make up Canada, would the hon. member following his statement stand up and say that he agrees with the unity of Canada, that he is a Canadian and proud of it?


David Réal Caouette: Mr. Speaker, probably I should not bother to answer such a silly question. However, I should like to say that I am not living in 1763 and I am not considering what happened prior to that date. I do know one thing. Our confederation was founded in 1867. Since that time I am convinced that Canadians of all extractions recognize the right of bilingualism in our country, namely the French and English languages. That is the wish of the people.


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, in the very few minutes we have left before the vote is called tonight I should like to deal briefly with two subjects, the wheat and flour markets and the difficulty in respect of the administration of transportation policy in Canada. Before doing so, let me say that having listened to the hon. member for Villeneuve (Mr. Caouette), and I happen to be a member from an area some distance from here in western Canada, I find myself in a very large measure of agreement in respect of many of the things he has advanced which would contribute to the national unity of Canada today.
We are concerned about what seems to be some uncertainty in the international wheat and flour markets today. The Canadian wheat board ought to be granted additional authority to meet the competition that exists in these international markets. We can look back and find case after case where the selling agencies for wheat and flour in the United States have undertaken massive campaigns, particularly in the Orient, to teach and convince the bakers in that part of the world the value of using different blends of flour containing higher percentages of United States winter wheat.
This kind of competition is very difficult to meet and I believe that if the Canadian wheat board is to be confined only to meeting

October 10, 1967
The Budget-Mr. Olson competition so tar as price is concerned this policy will prove even more expensive than some of those undertakings required to meet other kinds of salesmanship in this area. I have before me a Searle grain company report of about two years ago which suggests that a concerted effort was made by wheat selling agencies in the United States to hold what would amount to almost seminars or training programs in Japan in order to demonstrate that flour milled from about 50 per cent United States hard wheat and 50 per cent spring wheat could result in products equal to or superior to those using 100 per cent spring wheat. That refers, of course, to Canadian wheat.
I am aware of the fact that the Minister of Trade and Commerce (Mr. Winters) is now in Japan attempting to restore and expand some of the markets we have held over the years. I believe we must go a little further than that to meet this other kind of competition by sending representatives from our industry to make sure that the Japanese bakers are cognizant of the value of a very high level of Canadian wheat in their flour.
The other point I want to make is that we should not separate the wheat and flour markets because they are one and the same thing as far as the Canadian producer of wheat is concerned. Any time we sell flour from Canada it is a foregone conclusion that it is made completely from Canadian wheat. During the years from 1957 to 1962 there was a steady decline in the export of flour from Canada to the Orient. In 1956 we exported to that part of the world something over 4 million hundredweight of flour. By 1962 this amount had dropped to slightly over 2 million hundredweight. This diminishing market for flour in the Orient is damaging what used to be one of the largest industries in Canada, namely the production of high grade flour from Canadian wheat.
[DOT] (9:40 p.m.)
I hope that the minister's efforts in the Orient will be successful and will be followed up by experts who will enlarge this training program, if you want to call it that, of using high levels of Canadian wheat and flour in the bread-making industries of these countries.
There appear to be only four or five minutes left to me, Mr. Speaker. I now wish to turn the attention of the house to a matter that is of extreme importance to us in Canada. I refer to the question of transportation. We know that at the present time a

government agency, in other words the Canadian Transportation Commission, is in the process of taking over from the Board of Transport Commissioners. I suppose it is too early to be critical of what the transportation commission is doing in applying the provisions laid down by parliament this year in the new transportation bill. However, there are a great many difficulties developing in the railway industry in the transition period.
My purpose tonight is to urge the new transportation commission to get under way and set up as quickly as possible all the facilities they need so that the provisions of those sections that were put into the transportation act will be available to the shippers. It is extremely important that the costing department of the transportation commission be set up and made functional at once, because the provisions of section 336, for example, and section 16 of that act, wherein a shipper has recourse to the transportation commission, cannot be applied until we have accurate and acceptable costing methods, techniques, formulae, and so on. This has not been done to this time.
It may be rather early to be critical of the new commission, but I know that a large number of shippers in western Canada today are suffering because they have no recourse in respect of the rate adjustments which the railways are making. It will be a very formidable task for whoever first appears before the new transportation commission to plead his case against discrimination and unjust rates. Therefore, we need these facilities to be made available to shippers at the earliest possible moment.
I hope, in closing, Mr. Speaker, that the transportation commission will have all these facilities operative in the very near future so that what the house intended to be available to the shippers of Canada will in fact be available without any great time loss.


Mr. Speaker:: Order. It being 9:45 o'clock p.m., it is my duty, pursuant to section 5 of standing order 58, to interrupt the proceedings and forthwith put the question on any amendment now before the house.
The question is as follows. Mr. Sharp, seconded by Mr. Gordon, moved:
That Mr. Speaker do now leave the chair lor the house to go into committee ol ways and means.
Mr. Monteith, seconded by Mr. Ricard, moved in amendment thereto.
That all the words after "that" be struck out and the following substituted therefor:
October 10, 1967

This government has failed miserably to set an example of responsibility by its refusal to reduce taxation, by its reckless increase in governmental expenditures, thus contributing to the steadily rising cost of production to the great detriment of the Canadian economy and to the sharp increase in the cost of living, already over-burdensome to the Canadian people.
All those in favour of the amendment will
please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed will please
say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than jive members having risen:


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the amendment lost.


Mr. MacRae:: Mr. Speaker, I was paired with the Minister of Public Works (Mr. Mcllraith). Had I voted, I would have voted for the amendment.

October 10, 1967
Division


Mr. Haidasz:: Mr. Speaker, I was paired with the hon. member for Middlesex West (Mr. Thomas). Had I voted, I would have voted against the amendment.


Mr. Fairweather:: Mr. Speaker, I was
paired with the hon. member for Charlotte (Mr. McLean). Had I voted, I would have voted in support of the amendment.


Mr. More:: Mr. Speaker, I was paired. Had I voted, I would have voted for the amendment.


Mr. Groos:: Mr. Speaker, I was paired with the hon. member for Edmonton East (Mr. Skoreyko). Had I not been, I would have voted against the amendment.


Mr. Addison:: Mr. Speaker, I was paired with the hon. member for Wellington South (Mr. Hales). Had I voted, I would have voted against the amendment.


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


[Stage Direction]
It being fourteen minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, October 11, 1967