1967-11-20

Mr. Speaker:: I have the honour to inform the house that the Clerk of the House has received from the chief electoral officer a certificate of the election and return of Hon. Charles Ronald McKay Granger for the electoral district of Bonavista-Twillingate.



NEW MEMBER INTRODUCED

[Stage Direction]
Hon. Charles Ronald McKay Granger, member for the electoral district of Bonavista-Twillingate, introduced by Right Hon. L. B. Pearson and Hon. Allan J. MacEachen.


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, as members of the house will be aware the chancellor of the exchequer announced on November 18 the decision of the British government to change the exchange value of sterling from $2.80 (U.S.) to $2.40 (U.S.), a decision which resulted from special circumstances affecting that currency. In accordance with accepted procedures this change in the exchange value of sterling was made with the knowledge and concurrence of the International Monetary Fund. It was accompanied by the announcement of a number of internal measures designed to make ample resources available for improving the balance of payments and ensuring improvement in the competitive position of Britain.
Given the present day pattern of Canadian international trade and payments, this British action will not have a substantial effect on Canada's international financial position. I stated publicly following the British announcement, and would re-emphasize here, that the government of Canada regards the present exchange parity of the Canadian dollar in terms of the United States dollar, that is, $1 Canadian equals 92J cents (U.S.), as appropriate and it intends to maintain this rate.
The Canadian government expects to participate in any support provided through the International Monetary Fund, and the Bank of Canada is taking part in important arrangements being made in co-operation with the central banks of other countries. The total of central bank credit arrangements and the support requested of the International Monetary Fund is massive, and I am confident of its adequacy to ensure the position of sterling at its present rate.
[DOT] (2:40 p.m.)
Hon. Robert L. Stanfield (Leader of the
Opposition): Mr. Speaker, it is reassuring to have the statement of the Minister of Finance that the devaluation of the pound will not have any financial consequences of great significance for Canada. I am sure all those in the official opposition approve of the support the government of Canada is extending to the pound in these circumstances and to the government of Cape Breton-of Great Britain; Mr. Speaker, I confused two great nations there for a moment.
Devaluation, of course, is the result of a long and difficult period in Britain. I am sure it was not undertaken lightly. I do not propose to make any extensive comments on this occasion, of course the minister must be aware that he has left unanswered a good many questions relating to the increase in competition that this will mean for many of our Canadian industries, both primary and secondary. There will be questions about the effect of this on our prospects for sales of wheat, and whether this will have any effect on our prospects for a world wheat agreement.
Obviously this increases competition generally for our manufacturers, and increases the already urgent need for greater efforts in the area of productivity and an increased effort on our part to cope with inflation. Also there may be some questions as to why the bank rate in Canada was increased 1 percentage point as against half of one percentage point in the United States.
As I say, Mr. Speaker, there are questions on which we and the Canadian people will be seeking information, but as I have said it is reassuring to have the statement of the Minister of Finance that devaluation of the
November 20, 1967
4438	COMMONS
Statement on Exchange Value of Sterling pound in these circumstances poses no immediate financial dangers for our country.


Some hon. Members:: Hear, hear.


Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I had intended to address a question to the Minister of Finance but in view of his statement I can deal better with the matter now. I must say at the outset, sir, that many in different parts of the country with whom I have been in telephone communication this morning do not share the confidence of the minister that the devaluation of the pound will have minimum effects on the Canadian economy.
It may be that these misgivings are shared by the chartered banks, or it may be that the chartered banks are engaged in a bit of a racket, because information came to me this morning that at least one of our chartered banks has issued instructions to its branches to make charges, in the exchange of Canadian for United States funds, in excess of the allowable 1 per cent over the pegged rate. This morning that particular bank charged 91 per cent, and since then an officer of that bank has informed me that they have received instructions from their main office to increase the charge to 10 per cent.
The question I intended to ask was, what is the implication of this action on the part of the banks. Does it mean that the Canadian dollar is becoming unpegged almost inadvertently, or does it mean that the banks are taking advantage of the uncertainty created by the devaluation of the pound, an uncertainty that is understandable in the sterling area but not understandable in the relationship between the Canadian and the United States dollars? Does it mean that they are merely taking advantage of this to make unjustified charges to their customers, and is the minister going to do something about it; because it is bound to have a profound effect on our financial arrangements.


Mitchell William Sharp: On a question of privilege, Mr. Speaker, this is not the proper time to ask questions, and I only urge the hon. member who has asked this question to ask it again a little later, because otherwise he might cause needless concern in financial markets.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, one can agree with the statement by the Minister of Finance regarding the action taken by Great Britain in devaluing her pound in so far as it relates to alleviating the financial crisis that Great Britain is in at the present time. I think most Canadians will accept this policy on this basis. However, the
IMr. Stanfield.]

reassurance expressed by the minister with respect to the relationship of the Canadian dollar with the United States dollar, and that this step taken by Great Britain will not affect the Canadian economy in any great measure, is something that can well be questioned. It seems to me it is a reminder of what happened in 1963, with the financial crisis we faced just after the election in that year and the assurance that all was well when our own dollar was devalued in relationship to the United States dollar.
I would hope, Mr. Speaker, that as we go into the supply debate and as we look forward to his bringing down the mini-budget, the Minister of Finance will go to much greater length to support his statement in so far as giving reassurance to the Canadian economy and the Canadian dollar that all is well, because we trust that this is not the beginning of another crisis for us in Canada.



DOMINION-PROVINCIAL CONFERENCE REPORT ON MEETINGS WITH PROVINCIAL FINANCE MINISTERS

Mitchell William Sharp: Mr. Speaker, in response to questions on Friday last the Prime Minister indicated that I would present to the house today a report concerning the meetings we had last Thursday and Friday with the provincial ministers of finance and treasurers. The president of the Treasury Board, the Minister without Portfolio and myself represented the federal government.
The main purpose of these meetings, as was indicated in my letter of October 24 to the provincial ministers, copies of which were tabled in the house on November 1, was to examine the economic and financial situation and to consider its bearing on the financial policies of the federal and provincial governments. It was not our objective to seek agreement on a specific program of action. Given the responsibility of each minister to his cabinet colleagues and to his legislature or parliament, it would have been inappropriate for any of us to have presented or to have committed himself to financial policies which had not first been presented to his legislature or to parliament.
Our intention in calling this meeting was to enable ministers who have a responsibility for economic and budgetary matters in Canada to examine and exchange views upon the economic and financial situation in the country, and to consider together the direction of fiscal policy which seemed to be called for. I hoped that each minister would feel able to
November 20, 19G7	COMMONS
comment upon the economic and budgetary position of his province, and that all of us would feel free to comment upon any problem which had a particular bearing upon the situation. These expectations were realized in what I believe was an entirely satisfactory meeting.
With the permission of the house, Mr. Speaker, I should like to table a copy of the agenda which was agreed to and certain tables of financial information provided to the provincial ministers.


Mr. Speaker:: Is it agreed that the minister be granted leave to table the documents referred to?


Mr. Bell (Carleton):: Are they to be printed as an appendix to Hansard?


Mitchell William Sharp: The agenda is very brief; it could be tabled. The figures I presented to the provincial ministers are well known to members of this house.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to make some comments on the statement of the minister and the conference that was held between the minister and members of the government and the ministers of finance of the provinces last week. As I understood the minister's previous statement, part of the emphasis was to be on encouraging restraint and reducing the demands on the capital market. Of course it would be pretty difficult for this to have much effect, in any event, on the premiers of the provinces for the balance of this fiscal year because they would already have made their commitments. In any event I see nothing in the budget speech of the minister of last spring which indicates any particular recognition of the need for restraint. Indeed, he indicated at that time that the economy was in a state of rather delicate balance and that because of this the government was taking off some of the restraints on its own public works programs.
The provinces, of course, have great financial responsibilities in meeting problems in respect of education and so on. While they are struggling with these problems the minister has invited them to meet with him, and I presume he exhorted restraint and moderation while at the same time he knows that the government of Canada, his government, is inviting them actually to expand their expenditures. At the moment I do not intend to make any comment on the merits of the government's program on medicare, but it is
DEBATES	4439
Dominion-Provincial Finance Meetings clear that on the one hand the government is urging the provinces, for the good of the country, to exercise restraint and reduce their demands on the capital market, while on the other hand the same government is inviting them to increase their expenditures by some $1 billion if they all join in, according to the estimates of the minister.
[DOT] (2:50 p.m.)
If the government is convinced that the program should go ahead-and this seems to be on the books and not questioned-this makes a farce of consultation. That is the only point I wish to make. The government should not pretend that this is all a matter of consultation, because a great majority of the provinces representing a great majority of the Canadian people have long expressed their views with regard to priorities. Surely there should be genuine consultation between the government of Canada and the governments of the provinces. We must work -struggle if you like-toward the achievement of an agreement on priorities. We must make sure that the financial resources of the country are placed where they are most urgently needed, and we must rapidly improve the process of consultation. This is dictated not only by the recommendations of the Economic Council of Canada but by common sense.
I suggest in all seriousness that this procedure of inviting the provinces to be restrained and cut back on the one hand while at the same time expanding their expenditures obviously may have the effect of greatly increasing spending. This all relates to the believability of the government, and indicates that the government is presenting two faces to the public. Even more serious, this is detrimental to the maintenance and improvement of federal-provincial relations, and will ultimately be destructive of the credibility of the government's intentions and views in respect of the difficulties that have been created in the country with regard to inflation.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, the Minister of Finance has not given out very much information as to what proposals he put before the ministers of finance of the provinces. We are not yet aware of what areas of restraint the federal government intends to follow or what areas of curtailment of current or capital expenditures he is asking the provincial governments to enact. I hope the minister will take an early opportunity, either when he brings down his supplementary budget or on the supply
November 20, 1967
4440	COMMONS
Dominion-Provincial Finance Meetings motion, to indicate to the house exactly what the federal government has in mind when it talks about restraints in both current and capital expenditure. I hope he will indicate the order of priorities the government has in mind for itself, and the order of priorities it is seeking to persuade the provinces to accept.
One thing that did come out of the federal-provincial conference of last week with startling clarity was the fact that the Minister of Finance has used that conference to frighten the provincial representatives and the people of Canada out of proceeding with medicare on July 1, 1968. By producing what seems to me to be a highly suspect estimate of the cost he has endeavoured to prevent the provinces from proceeding with the plan to which this government is committed and which this parliament has endorsed.
It is my hope that there will be an early opportunity for us to discuss more fully not only the advisability of proceeding with medicare but the basis of the very dubious estimate which the Minister of Finance has produced regarding its cost to the Canadian people.


Mr. Raymond Langlois (Meganiic):: Mr. Speaker, having read over the minister's statement I must agree with previous spokesmen that it does not contain much information. Apparently everything has gone according to schedule, but we do not know what the schedule was, what was contained on the agenda or what were the federal government's plans or intentions. We do not know what the government has in mind in respect of restrictions, or where they should be applied. We do not know what recommendations were made to the provinces as to where they should apply restrictions.
However, I would ask the minister to keep in mind the statements made by some of the provincial representatives after the federal-provincial conference. I refer particularly to the statements by the representative of British Columbia and Mr. Robichaud, premier of New Brunswick. They seemed quite upset in some respects about what the minister had in mind or had proposed at the conference.
We cannot comment much further on the subject because we do not know what transpired at the conference or what was proposed. I hope that some day soon we will find out what happened, and that the minister will take the earliest possible opportunity to inform the house of the proposals made at the conference so we may comment or criticize the minister's actions in this regard.


Mr.  A. B. Pallerson@Fraser Valley: Mr. Speaker, I find myself in about the same position as other speakers who have taken part in this brief discussion, in view of the fact that the minister has failed to give us any information whatsoever regarding the discussions at the conference. In addition to that, we were given a copy of the minister's statement just after he had begun speaking, so we did not have too much time to give it any consideration following its distribution. We notice that the minister has tabled the agenda of the conference of last week. For some two weeks hon. members of this house have been trying to obtain the details of the agenda so we would at least know what was going to be discussed. However, we were not told, and the agenda has been tabled just today.
We have not been given any information whatsoever on the discussions held or the conclusions arrived at. We have not been told whether there was any agreement between the federal government and the various provincial representatives. Therefore, as far as the whole situation is concerned we are entirely in the dark. Reference has been made today to the statement by the Minister of Finance, his efforts to curtail expenditures, to ease the pressure on the capital market and so on, but it seems to me that very often this government preaches one thing and practises another. We often find that the practice is in opposition to the pronouncements made. It will be interesting to know to what extent the government is prepared to follow the guide lines that have been set out, so the provinces will have at least an appreciation that the federal government intends to do something about this situation.


Richard Albert Bell: Mr. Speaker, on a point of order, might we settle one way or another whether the agenda and the associated documents which the minister laid on the table are to be printed as an appendix to Hansard"! I have had the opportunity of seeing them and think they ought to be printed so a judgment could be arrived at on the adequacy or otherwise of the documents which were laid before the conference.


Mr. Speaker:: Is it the pleasure of the house that the documents referred to be appended to Hansard?


Some hon. Members:: Agreed.
[Editor's note: For text of documents referred to above see appendix.]
November 20, 1967



QUESTIONS

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

Mr. Caouette: 1.	Have orders in council or regulations been passed concerning the creation and investment of reserves by the agencies and proprietary crown corporations within the meaning of the Financial Administration Act?
2.	If so. what are the terms of such regulations or orders?
3.	If no such steps were taken, does the government intend to take action under section 84 of the Financial Administration Act or any other act?


Hon. Judy V. LaMarsh (Secretary of Stale):: I am informed by several departments as follows: 1. No.
2.	Not applicable.
3.	It is not intended to take action under section 84 at this time.


DESTRUCTION OF HISTORIC CANADIAN FILM
Mr. Crouse: 1.	What is the estimated value of the million feet of historic Canadian film destroyed when the Canadian Film Institute archives collection burned at Beaconsfield, Quebec, in July 1967?
2.	During the past three years, was any request made to the government to transfer the films from the dangerous cellulose nitrate base to safety film and, if so, for what reason was no action taken?
3.	What steps are being taken to co-ordinate the preservation of other historic films in Canada?


Julia Verlyn (Judy) LaMarsh: I am informed by the National Film Board as follows: 1. It is difficult to estimate the monetary value of the loss of this historical footage, the full extent of which is not yet known since copies of the destroyed films may be held in other collections. Due to its nitrate base, the film was stored by the National Film Board under a special arrangement with the Canadian Film Institute.
Questions
2.	The arrangement provided that the board would only make copies on acetate base on the request of the institute which would bear the cost of the processing. During the past three years, some processing was completed. Also, during this period, the Secretary of State received a brief from the Canadian Film Institute outlining an extensive plan for the establishment of a national film archives under the auspices of the institute. Included in this plan was provision for the transfer to acetate film of the C.F.I.'s nitrate film holdings. The C.F.I. proposal, along with a similar proposal received from La Cinematheque canadienne, is under consideration.
3.	The film board, the Canadian Film Institute, the Cinematheque canadienne and other film organizations are known to be collecting and preserving historical films but no steps are being taken at the present time toward the co-ordination of these agencies.


HOUSING FOR INDIANS IN YUKON
Mr. Nielsen: 1.	What was the total amount expended by the federal government for the construction of housing within the Yukon for Indian people for each of the years 1957 to 1967 inclusive?
2.	For each of these years, what was the number of new houses constructed and where were they located?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: 1. The total amount spent on housing for the Indian people within the Yukon Territory for the fiscal years shown is as follows: 1957-58,	$25,500;
1958-59,	$8,300;	1959-60,	$49,000;	1960-61,$44,000;	1961-62,	$33,400;	1962-63,	$24,600;1963-64,	$10,700;	1964-65,	$31,000;	1965-66,
$68,400; 1966-67, $135,000.
2.	The number of houses constructed and their locations during the same period are shown on Appendix "A".
Location	1957-58	1958-59	1959-60	1960-61	1961-62	1962-63	1963-64	1964-65	1965-66	1966-67Dawson	5	_	2	5	_	_Mayo	. 5	-	5	3	1	-	-	-	1	lCarmacks...	. 5	-	5	-	3	1	1	1	1	-Whitehorse..	. 2	-	3	6	1	1	1	6	2	6Haines	Junction...	. 2	-	5	2	3	-	-	-	-	4Bur wash	-	-	-	-	-	1	-	-	-	7Teslin	-	2	1	-	-	1	-	-	4	2Ross River..	. 	-	-	-	7	-	4	-	-	6Carcross	-	-	-	-	1	-	-	-	-	-Liard	. 6	-	3	-	5	-	2	5	10	11Old Crow	-	-	-	-	-	-	-	2	-	1Pelly	-	-	4	-	-	1	-	4	3
November 20, 1967
Questions


HIGHWAY AND BRIDGE CONSTRUCTION IN YUKON
Mr, Nielsen: 1.	What was the total amount expended by the federal government for new (a) road construction (b) bridge construction, within the Yukon for each of the years 1957 to 1967 inclusive?
2.	For each of these years how many miles of new road were constructed?


Julia Verlyn (Judy) LaMarsh: In so far as the Department of Indian Affairs and Northern Development is concerned: 1 and 2.
Year	New Miles	roads Cost	New bridges1956-57	-	-	$ 477,7441957-58	-	$ 27,620	369,4221958-59	12	636,300	937,7671959-60	30	2,242,237	1,497,1071960-61	60	1,718,653	567,2521961-62	121J1	3,177,5611	1,154,6791962-63	88 1	2,634,4241	522,1621963-64	55	1,246,100	11,1781964-65	55	1,107,997	15,7221965-66	58J2	2,266,458z	16,7771966-67	40i	1,917,900	226,0251967-68 (Estimated)	84	4,900,000	224,000Totals	604J	$21,875,250	$6,019,8351	Includes grant re Canada Tungsten road-35 miles-$667,000.2	Includes grant re Clinton Creek road-26 miles-$633,190.
In so far as the Department of Public Works is concerned: 1. (a) No expenditures for new road construction were made between 1957 and 1967 inclusive, (b) From 1957 to 1966 there were no expenditures for new bridge construction within the Yukon. Four contracts of a total value of $945,000 have been awarded in 1967.
2.	Nil.


STATUES OF FORMER PRIME MINISTERS
Mr. Bell (Carleion): 1.	Since the answer to question No. 2,613 on May 8, 1967, Hansard p. 15498, what action has been taken in respect of the design of monuments of Arthur Meighen and R. B. Bennett and with what result in each case?
2.	Are any of the monuments of former prime ministers mentioned in question No. 2,613 yet ready?
[Mr. Laing.l
3.	If so (a) which ones (b) when is it anticipated the others will be ready?
4.	Have sites been chosen for any of these monuments?
5.	If so (a) which ones (b) what is such site?
6.	If not, when is it expected such sites will be chosen?
7.	Have any plans yet been concluded for (a) the erection on site (b) the unveiling, of such monuments?
8.	If so, what is the approximate date for each such (a) erection on site (b) unveiling?
9.	Will consideration be given to the commissioning of a statue of Sir Charles Tupper, the only father of confederation other than Sir John A. Macdonald to become prime minister of Canada?


Julia Verlyn (Judy) LaMarsh: 1. Following the rejection of the earlier maquettes, two other Canadian sculptors were invited to prepare submissions. Certain revisions to these new maquettes
November 20, 1967

were recommended by an expert panel which will inspect the revised designs shortly.
2.	No, one sculpture is in the casting stage, one in the final design stage, and two are in the maquette stage.
3.	(a) See answer to 2. (b) In approximately ten months.
4.	With the help of a consultant, a number of sites suitable for public monuments have been chosen. Only when the sculptures are ready for final approval, can the precise location of each be determined.
5 (a) and (b). See answer to 4.
6. See answer to 4.
7 (a) and (b). Not as yet.
8.	See answer to 7.
9.	The commissioning of other statues is not under consideration at the present time.


ARDA PROJECTS, CARLETON AND GRENVILLE-DUNDAS
Mr. Bell (Carleion): 1.	What projects under ARDA affecting the electoral districts of (a) Carleton (b) Grenville-Dundas, are in progress now?
2.	What is (a) the nature (b) the objective (c) the cost, of each project?
3.	Are any further projects affecting these electoral districts now under consideration?
4.	If so (a) what are they (b) what is the objective of each (c) what is the estimated cost of each?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: 1.	(a) Drainage
assistance eastern Ontario, 11 counties. Expansion of Carleton county forest, (b) Engineering,-South Nation watershed stage II. Drainage assistance eastern Ontario, 11 counties. In addition to the above, other projects in Ontario which may affect (a) Carleton (b) Grenville-Dundas are: Farm pond assistance; private land forestry assistance, agricultural drainage assistance in Ontario, farm enlargement and consolidation; field enlargement by removal of fences; small reservoir program for rural water supply; ARDA capital grants fo farm development.
2. Drainage assistance in eastern Ontario, 11 Counties, (a) Drainage; (b) drainage of 966,000 acres in the 11 eastern counties of Ontario, (c) Total, $1,500,000. Federal commitment, $500,000.
Expansion of Carleton county forest, (a) Enlargement of county forest, (b) Acquiring 136,300 acres of submarginal agricultural land for forestry purposes and the benefits
Questions
accruing therefrom, (c) Total; $30,000. Federal commitment, $11,250.
Engineering-South nation watershed- stage II. (a) Rural water supply and flood control, (b) Construction of two dams and reservoirs and two channel improvements, (c) Total, $109,200. Federal commitment, $54,600.
Farm pond assistance.
(a) Supplement farm water supply, (b) Under the Ontario farm pond policy, a 50 per cent grant to farmers up to $500 for one pond per 100 acres or fraction thereof, for the construction of an approved farm pond, (c) Total, $1,550,000. Federal commitment, $387,500.
Private land forestry assistance, (a) Forestry. (b) Assistance in planting, development and management of woodlots on private land, (c) Total, $1,671,040. Federal commitment, $835,520.
Agricultural drainage assistance in Ontario, (a) Drainage, (b) Drainage assistance restricted to lands of high agricultural capability, (c) Total, $6,660,000. Federal commitment, $2,200,000.
Farm enlargement and consolidation, (a) Land consolidation, (b) Acquire uneconomic farm units to be consolidated with marginal farm units. A farm operator would lease such land with a purchase option at a future date, (c) Total, $7,200,000. Federal commitment, $3,600,000.
Field enlargement by removal of fences, (a) Land improvement, (b) Removal of fence rows on farms having a satisfactory economic potential, up to a maximum grant of $500 per farm, (c) Total, $400,000. Federal commitment, $80,000.
Small reservoir program for rural water supply, (a) Rural water supply, (b) To assist conservation authorities and rural municipalities to improve water supply through construction of some 69 reservoirs, (c) Total, $20,000,000. Federal commitment, $7,500,000.
ARDA capital grants for farm development. (a) Farm water supply and land improvement. (b) Recently approved, this project supersedes farm pond assistance and field enlargement by removal of fences with an additional sum to be used for these purposes. (c) Total, $4,500,000. Federal commitment, $1,125,000.
3.	No.
4.	See 3.

November 20, 1967
Questions


TAXES ON IMPORTS OF KAYAKS AND CANOES
Mr. Forresiall: What has been the total amount of duty and sales tax, separately, derived by the government of Canada from the importation into Canada for home consumption of sporting kayaks and canoes by fiscal year since 1960?


Julia Verlyn (Judy) LaMarsh: I am informed by the Department of Trade and Commerce as follows: Imports of sporting kayaks and canoes are included in import commodity class 591-69-"pleasure and sporting craft n.e.s." and the external trade division of the Dominion Bureau of Statistics has no separate statistics available on imports, amount of duty collected, or sales tax derived by the government of Canada.


CLOTHING ALLOWANCE TO INDIAN SCHOOL CHILDREN
Mr. MacRae: 1.	Has the clothing allowance which was normally paid to Indian children in school been discontinued?
2.	If so, as of what date?
3.	Why was it not considered possible to continue this allowance?


Arthur Laing: It is understood that this question applies only to Indian children in New Brunswick in general and to those in the Saint John river agency in particular: 1. There has been a change in the procedure for providing suitable clothing to Indian school children in New Brunswick.
2.	A change was made as of June 1, 1967.
3.	The change was made to conform with provincial practice. For years the Indian affairs branch followed the policy of providing clothing for Indian students in need. On June 1, 1967, the Indian affairs branch adopted the new provincial welfare regulations of New Brunswick as the regulations which should also apply to Indian people of that province. Under these regulations the provision of clothing is available to families who qualify for social assistance.


RECOGNITION OF PARTICIPANTS IN ARMED FORCES TATTOO
Mr. Sherman: Does the government have any plans for conferring the centennial medal or some other form of recognition on all service personnel who participated in the presentation and staging of the Canadian forces centennial tattoo?


Hon. Leo Cadieux (Minister of National Defence):: It is the intention to present a certificate of recognition to those members of the forces who made a special contribution to our centennial activities but were not awarded a centennial medal.


PURCHASE OF BRUCELLOSIS HIP TAGS
Mr. Hales: 1.	On what date did the Department of Defence Production last call for tenders for brucellosis hip tags for the health of animals branch of the Department of Agriculture?
2.	What were the names and addresses of the companies who tendered?
3.	What was the price quoted by each?
4.	Was the contract given to the lowest bidder?
5.	Will these tags be made in Canada or in the United States?
6.	Will they carry the mark "Printed in U.S.A." or "Printed in Canada"?
7.	Did the Department of Defence Production check if the successful tenderer's price constituted dumping into Canada at prices below the fair market value?
8.	What is the department's policy regarding purchasing from foreign countries?


Hon. C. M. Drury (Minister of Industry):: 1.	19 September, 1967.
2.	(a) Ketchum Manufacturing Sales Ltd., 396 Berkley Ave., Ottawa 3, Ont. (b) Kimball Systems Ltd., 85 Advance Road, Toronto 18, Ont.
3.	(a) $9,598.80. (b) $12,372,80.
4.	Yes.
5.	In Canada.
6.	Neither.
7.	Not applicable.
8.	The department purchases from foreign countries when adequate sources are not available in Canada to provide reasonable competition.


DISPOSITION OF OLD POST OFFICE BUILDING, EDMONTON
Mr. Lambert: 1.	Has the old post office building and site in Edmonton been declared surplus and been transferred to Crown Assets Disposal Corporation for disposal?
2.	If so, on what date and what steps have been taken to dispose of the said property?
3.	What offers to purchase have been received, from what persons, corporations or government bodies and in what amounts?
November 20, 1967

4.	Has a decision been reached to accept any such offer to purchase and, if so, when is it expected that the deal will be completed and ownership transferred?


Charles Mills (Bud) Drury: In so far as Crown Assets Disposal Corporation is concerned, the answers are as follows:
1.	Yes.
2.	May 5, 1967. Negotiations entered into with the city of Edmonton, recognized as a priority holder.
3.	Offer of $630,000 by the city of Edmonton.
4.	Approval given under P.C. 1967-1890 dated October 5, 1967. Executed agreement authorizing the city of Edmonton to take possession mailed on October 19, 1967.


PLANS FOR DEVELOPMENT OF BORDEN, P.E.I.
Mr. Macquarrie: 1.	What departments of the government have been involved in planning for the economic development of the town of Borden during and after the construction of the Northumberland strait crossing?
2.	Have discussions on these matters been held with officials of the government of Prince Edward Island or the town of Borden?
3.	What sums have been earmarked for such program?
4.	Has any interdepartmental or intergovernmental body been established to deal with economic, industrial and employment planning for the town of Borden and, if so, what is the composition of such body or bodies?
5.	What representations have been received from the government of Prince Edward Island in reference to this matter?


Hon. Allan J. MacEachen (Minister of National Health and Welfare):: The Atlantic Development Board and the Central Mortgage and Housing Corporation are involved in financially assisting the province of Prince Edward Island in a study being conducted on the effects of the Northumberland strait causeway, both during its construction phase and the post construction period, upon the Borden-Carleton area of the province.
2.	Yes, initially when the study was proposed and periodically during the progress of the work.
3.	A total of $65,000 with the Atlantic Development Board contributing $50,000 and the remaining $15,000 being issued by Central Mortgage and Housing Corporation and the province on a 75-25 basis.
4.	Yes, an advisory committee has been established to give overall direction to the
Questions
study. It is composed of representatives from the Atlantic Development Board, Central Mortgage and Housing Corporation, Department of Public Works and the province of Prince Edward Island.
5.	Representation was received from the government of Prince Edward Island at the time the study was proposed and has continuing representation on the advisory committee.


TROIS-RIVIERES BRIDGE CORPORATION CHARTER
Mr. Mongrain: 1.	Was the charter governing the Trois-Rivi&res bridge corporation a federal charter?
2.	If so, was this charter revoked?
3.	Who requested that it be revoked?


Hon. John N. Turner (Registrar General):: 1. La Corporation du Pont de Trois-Rivieres was created by a special act of the legislature of the province of Quebec, assented to 2nd day of February, 1956.
Whereas an act of the parliament of Canada authorizing the construction and maintenance of the said bridge and approving the site thereof was necessary, an act of parliament was enacted, being 4-5 Elizabeth II, Chapter 71, assented to 7 June, 1956.
2.	The incorporating act being provincial, the revocation power does not fall within the ambit of the authority of the federal government.
3.	Not applicable.


CANADA MANPOWER CENTRES, BURNABY, B.C.
Mr. Prittie: 1.	Has the Department of Manpower and Immigration decided to open a Canada manpower centre at 4950 Kingsway in South Burnaby, B.C.?
2.	Has the department any plans to establish a similar centre to serve the residents of North Burnaby?


Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: 1. Yes. The centre will open on 1 December, 1967.
2. The subject is under study at the present time and, if found to be warranted, a Canada manpower centre will be opened in North Burnaby to serve the residents there.

November 20, 1967
Orders for Returns


POPULATION OF GATINEAU, PONTIAC, HULL, LABELLE COUNTIES
Mr. Isabelle: What is the present rural and urban population of the counties of Gatineau, Pontiac, Hull and Labelle?


Mr. Jean-Charles Canlin (Parliamentary Secretary to Minister of Trade and Commerce):: The 1966 census of Canada shows the rural and urban population of the counties of Gatineau, Pontiac, Hull and Labelle, as follows:
County	Total	Urban	RuralGatineau	50,979	26,791	24,188Pontiac	20,113	4,582	15,531Hull	95,415	92,223	3,192Labelle	30,167	11,431	18,736



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Bell (Carleton): 1.	What are the methods or techniques adopted by the public service commission and/or by a responsible staffing officer to assess or establish the merit of candidates in the public service "through an appraisal process", pursuant to paragraph 7(c) of the public service employment regulations?
2.	Wherein do such methods or techniques differ (a) from the conventional methods of examination and appointment (b) from the long accepted application of the merit system?
3.	Pursuant to what authority is this appraisal process established?
4.	In the period prior to the enactment of the Public Service Employment Act, did the former civil service commission or any member or official thereof make any statement or declaration in respect of (a) an intention to designate certain persons as responsible staffing officer (b) an intention to import into the system of recruitment and/or promotion of a new system to be styled an appraisal process?
5.	If so, what was the nature of such statement or declaration and where and when was it made?
6.	If not, for what reason was such statement or declaration not made?
Return tabled.


GRANTS BY ATLANTIC PROVINCES DEVELOPMENT BOARD
Mr. Coates: 1.	What is the present total of grants made by the Atlantic development board to the governments of the four Atlantic provinces?
2.	What is the breakdown of grants to each of the four Atlantic provinces?

3.	What is the total amount by provinces expended by the Atlantic development board to date?
4.	How many applications for grants are at present before the Atlantic development board and what is the approximate value of the grants requested?
Return tabled.
[DOT] (3:00 p.m.)



CANADIAN BROADCASTING CORPORATION


Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, the Quebec premier, Mr. Daniel Johnson, made a major statement over the week-end and I should like, under standing order No. 26 to move, seconded by Mr. Caron from Hull, the adjournment of the house to discuss a definite matter of urgent importance, namely the claim of the Quebec premier who indicated that his government intends to control French language broadcasting and television in Canada.


Mr. Speaker:: I doubt very much that the motion of the hon. member is in order; but I believe it would be in order for the house to authorize him to make a few brief comments on the urgency of the debate.


Auguste Choquette: Mr. Speaker, I can easily see the Speaker's ruling will not be favourable, but nevertheless, briefly and objectively, I will point out the reasons why I think a special and urgent debate should be allowed.
In the whole history of broadcasting in Canada, it is the first time, in my opinion, that the leader of a government makes such a far reaching statement; moreover, there is urgency of debate because it would enable us to look thoroughly into the matter of whether the French language can be better safeguarded by the federal government than by the Quebec government.
An urgent debate could also enable us to consider this afternoon the possibility of the C.B.C. taking action more rapidly as far as the development of French-speaking television in our country is concerned.
It is clear that the problem of Canadian unity is due to the fact that in some areas of our country the French fact is a foreign phenomenon.
November 20, 1967

The urgency of debate arises also from the fact that we could discuss at length the following matter: if the Quebec government exercises its control over the C.B.C., it is possible that the French fact will be limited to Quebec and will not go beyond the borders of Quebec.
And since you will bring up the following argument, namely that the bill is referred to the committee, I will conclude by saying that Bill No. C-163 which is under consideration by the committee on broadcasting, films and assistance to the arts, deals with the administrative structure of the C.B.C. and not with the French fact, which is urgent, and which the federal government must promote without delay.


Mr. Speaker:: I have not the least intention of setting forth the argument the hon. member has just mentioned. However, I will remind him that under citation 100 of Beau-chesne (3)
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate" when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough-
I remind the hon. member that the house has a supply motion on the agenda today and tomorrow and, in the circumstances, it is not possible to grant his request.



WHEAT-EFFECT ON PROSPECTIVE SALES OF DEVALUATION OF POUND

[Stage Direction]
On the orders of the day:
Robert Lorne Stanfield: Mr. Speaker, I had hoped to be able to address a question to the Minister of Trade and Commerce. Perhaps it could be brought to his attention. I should like to ask the minister whether he would report to the house at an early date on the effect of the devaluation of the pound on prospective sales of wheat, and on prospects of achieving a world wheat agreement.


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, as it happens the minister is on a trade mission at the moment during which, among other things, he is promoting the sale of Canadian wheat. I am sure he will be in a better position to report on the important question raised by my hon. friend in the light of the information he will gather and other efforts that will be made. So if my hon. friend would wait for a few days until the
Inquiries of the Ministry minister returns, he will be able to report to the house; or if he is unduly delayed the acting minister might make the report.


Robert Lorne Stanfield: Would the Prime Minister indicate when the minister might return to the house?


Lester Bowles Pearson: I think his trip should last about a week.


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Mr. Speaker, may I complement the Prime Minister's answer by saying there should be no change in demand from the United Kingdom for such a basic commodity as wheat, and also that no wheat exporting country has devalued its currency. Accordingly the current competitive position of Canada will not be affected.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. May I ask the acting minister whether he can give the house any information about the possible effects of the devaluation of the pound on other agricultural products.


Jean-Luc Pepin: Mr. Speaker, I had better take notice of this enlarged question.



FINANCE


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I have a question for the Minister of Finance regarding his announcement that the medicare program would cost the taxpayers of Canada $1 billion. I should like to ask the minister whether the officials of his department made this estimate and, if not, from what source did it emanate?


Mitchell William Sharp: The figure I gave was in reply to a question which was addressed to me at the conclusion of the federal-provincial conference of financial ministers, which was: what was the total cost of a medicare program likely to be? I said that in the first full year of operation, which of course could not be earlier than 1969-70, the best estimate that had been made for me by my officials was that the total cost to the provinces and the federal government would be approximately $1 billion. Since under the legislation we are authorized and required to pay 50 per cent of the cost, the cost to the federal treasury would be approximately $500 million.

November 20, 1967
Inquiries of the Ministry


Lester Bowles Pearson: tion, Mr. Speaker. I should like to ask either the Minister of Finance or the Minister of National Health and Welfare whether this estimate is confirmed by the studies that are being carried on by the officials in the Department of National Health and Welfare who have been looking into the whole question of medicare.


Allan Joseph MacEachen: Mr. Speaker, I have had an opportunity today to examine the estimates that have been made. The estimated cost of a medicare program depends upon a variety of assumptions which may or may not prove to be realities. For example, total participation by all the people in every province produces one set of estimates in comparison with a 90 per cent starting target. It is also related to possible changes in fee schedules and the percentage of tariffs that would be followed by provinces in the administration of any program. So the validity of any estimate depends upon the nature of the assumptions.


Thomas Clement (Tommy) Douglas: I have a supplementary question, Mr. Speaker. May I ask the Minister of National Health and Welfare whether these studies give him any reason to change the estimates he gave the house last year regarding the full cost of medicare, assuming that all the provinces came in?


Mr. Speaker:: I wonder whether the hon. member would not agree that we are getting into a debate at this point. Perhaps I would allow the minister to answer that difficult question, but I suggest to hon. members that this is not the type of debate we should be having at this time.


Richard Albert Bell: May I ask a
very simple supplementary question. May I ask the Minister of National Health and Welfare which assumption the Minister of Finance made?


Mr. Speaker:: Order.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a supplementary question on medicare to the Prime Minister. In view of the fact that the announcement of the government's intention to delay medicare from 1967 to 1968 was made when the Prime Minister was out of the country, is the same thing going to happen this week when the Prime Minister is away?


Lester Bowles Pearson: Mr. Speaker, the decision in 1967 was made while I was in the country-


Mr. Speaker:: Order, please. We are getting into a debate.


Lester Bowles Pearson: I rise on a question of privilege, Mr. Speaker. I think when questions are asked which leave a wrong impression, even if they are grotesquely out of order, there should be an opportunity to put the questioner right.


Mr. Speaker:: Order, please. I have suggested to the hon. member for Winnipeg North Centre that the question asked is not in order. Does he have another question?


Stanley Howard Knowles: Arising out of the question of privilege, Mr. Speaker; if the Prime Minister objects to the first part of the question can he not answer the last part? Will there be an announcement when he is out of the country?


Mr. Speaker:: Order, please. I should like to state that from a procedural point of view both parts of the question are out of order.


Stanley Howard Knowles: Mr. Speaker, this is a question of privilege. Earlier this afternoon the Prime Minister made the statement that a statement I had made was incorrect. I believe I have the right on a question of privilege to make the matter clear. My question related to my assertion that a certain announcement had been made when the Prime Minister was out of the country. He replied that my statement was incorrect, that the decision had been taken while he was in the country. I recognize that, but I press my point that the announcement was made while he was out of the country.


Lester Bowles Pearson: Mr. Speaker, I did not say the statement was incorrect. I said it was out of order because the hon. member prefaced his question with a statement which was meant to imply that a very important decision of the government was made in the absence of the Prime Minister and presumably without his knowledge.


Stanley Howard Knowles: Mr. Speaker, the Prime Minister has no right, even though he is the Prime Minister, to put words in my mouth. My question related to an announcement that
November 20, 1967

was made while he was out of the country. I think my point of privilege is well taken.


Mr. Speaker:: I am sure the matter has now been clarified to the satisfaction of all hon.
members.


Lester Bowles Pearson: Perhaps I can reassure the hon. gentleman, however suspicious he may have been the last time, that there will be no decision of this kind made in my absence, even with my knowledge.


Stanley Howard Knowles: But will there be an
announcement while the Prime Minister is absent?



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Raymond Langlois: I have a question for the Prime Minister which arises out of a press communique he issued this morning. It concerns the award of $5,000 which was given to Mr. Robert Bryce, the deputy minister of finance, for service to the country as an outstanding civil servant in 1967. I should like to ask the Prime Minister if the award was based on this gentleman's contribution to the current economic situation in which we have inflation, high cost of living, high interest rates and excessive taxes.


Lester Bowles Pearson: Perhaps my hon. friend will let me say that this award was made to an outstanding public servant of Canada, who has certainly made an outstanding contribution to governments under both parties. It was given to him for that kind of service for many years, and I would hate to have any member of this parliament cast a slur on that award.


Raymond Langlois: I rise on a question of privilege, Mr. Speaker, because I did not intend to cast a slur on Mr. Robert Bryce as deputy minister. However, I certainly will not accept the suggestion that his conduct of the economic affairs of the country shows an understanding of the situation.


Mr. Speaker:: Order. That is not a question of privilege.
Inquiries of the Ministry CANADIAN BROADCASTING CORPORATION



REQUEST FROM QUEBEC FOR ADMINISTRATION OF FRENCH NETWORK BY INDEPENDENT BODY

[Stage Direction]
On the orders of the day:
Mr.  A. B. Paiierson@Fraser Valley: should like to direct my question to the Prime Minister. Has the government received any formal request from the premier of Quebec that the French network of the Canadian Broadcasting Corporation be administered by an independent body which would have representation from the province of Quebec and other provinces with a French speaking population?


Lester Bowles Pearson: No, Mr. Speaker. The only information I have about this matter is what I have read in the newspapers. It seems surprising indeed, Mr. Speaker, that there should be any objection from anybody that the declared pursuit of national unity is the primary duty and objective of all Canadians and all Canadian agencies, including the Canadian Broadcasting Corporation.


Hon. Theogene Ricard (Saini-Hyacinihe-Bagot):: Mr. Speaker, may I ask a supplementary question?
Does the right hon. Prime Minister intend to agree to the suggestion of the premier of the province of Quebec and allow the government of that province to propose names of people to be appointed to the board of the Canadian Broadcasting Corporation to represent French Canadians?


Lester Bowles Pearson: Mr. Speaker, I would be glad indeed to get any suggestions the prime minister of Quebec may have as to appointments to the C.B.C.


Mr. Marcel Prud'homme (Saint-Denis):: May I put a question to the hon. Secretary of State? Has the premier of the province of Quebec informed her of his intention to establish, and I quote,
A French-speaking communication media in Ottawa, by its new legislation on broadcasting, does not ensure equal representation for French Canada in the administration of the Canadian Broadcasting Corporation?

November 20, 1967
Inquiries of the Ministry


Mr. Speaker:: It seems to me that the hon. member is repeating the question which has just been asked by the hon. member for Fraser Valley (Mr. Patterson).


Auguste Choquette: Mr. Speaker, I have a supplementary question. I should like to ask the chairman of the committee on broadcasting, films and assistance to the arts whether he intends to call as witness the premier of Quebec for the next sitting?


Mr. Speaker:: The question is out of order. [Later:]


Auguste Choquette: Mr. Speaker, my question is urgent due to a statement by the Quebec premier.
In view of the fact that it would cost less than the amounts given the Laurendeau-Dunton commission to extend the French language throughout Canada through repeater stations of the C.B.C. French network, could the Secretary of State say whether the C.B.C. is considering early implementation of such a project?
At ten o'clock, Mr. Speaker.


Mr. Speaker:: I do not believe this question is urgent.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: My question is to the Minister of Finance. Would the minister outline to the house the reasons the bank rate was raised yesterday one full percentile to 6 per cent, while in the United States the raise was but one half per cent to 4J per cent, bearing in mind that a few weeks ago Canada had made an unaccompanied increase of one half per cent? Why is there the present spread of 1J per cent?


Mr. Speaker:: Order. The hon. member is asking a question which in my view should be answered by way of a statement on motions. Certainly the question as asked is not in order at this time. Perhaps the question might be asked in some other way.


Marcel Joseph Aimé Lambert: Mr. Speaker, one is put in a difficult position, as I think you will realize. I fully appreciate the difficulty of the Chair with regard to statements on motions, but
[Mr. Prud'homme.l
this is the only time members in the house can raise questions as to why the change was made. This is my question; why was the change made?


Mr. Speaker:: The question as asked now is more nearly in order, and I would certainly allow the minister to answer that question.


Mitchell William Sharp: Mr. Speaker, the change of 1 per cent in the bank rate was made by the Bank of Canada after consultation with me. It is related, of course, to the action of the Bank of England in raising their rate from 6J per cent to 8 per cent. At the same time the rediscount rate of federal reserve banks in the United States was increased one half of 1 per cent. As the house may or may not know, there is a difference between the operations of the rediscount rate in the United States and the bank rate in Canada. For example, recently the rate on treasury bills in the United States has been well above the rediscount rate in the United States because of the way their facilities are operated.
Here in Canada such a situation is impossible because under those circumstances a bank could go to the Bank of Canada, borrow money to buy treasury bills and make a profit out of it. Our bank rate has to be more related to the market. In fact the change in the market rate since this announcement was made has been about the same in both countries.


Hon. E. D. Fulton (Kamloops):: Was there consultation between the two governments, the governments of Canada and the United States, with respect to the amount by which the bank rate would be raised in each country, in accordance with arrangements previously announced that the two rates would be kept closely related?


Mitchell William Sharp: My understanding is that we were not informed of the actions of the Bank of England in raising the rate to 8 per cent, but we were informed in advance of the intention of the United States to raise their rate by one half of 1 per cent.


Hon. D. S. Harkness (Calgary North):: Can
the minister inform the house how much effect this increase of 1 per cent in the bank lending rate will have on general interest rates in Canada?


Mitchell William Sharp: Mr. Speaker, I do not think the change in rates in Canada is consequential upon changes in the bank rate. There would
November 20, 1967	COMMONS
have been changes in the rales in Canada consequential upon the international moves. What we did was to take the action we thought was appropriate to the situation.


Douglas Scott Harkness: Do I understand, then, from the minister's reply that he expects interest rates in Canada on bank loans and so on will rise by approximately 1 per cent?


Mitchell William Sharp: No and they have not done so.


Douglas Scott Harkness: May I ask the minister what is the relationship to which he referred when he said the bank rate was raised 1 per cent in anticipation of what the increase would otherwise be?


Mitchell William Sharp: I did not say that, Mr. Speaker. Perhaps the loudspeaker system is not working very well. Perhaps I could explain the situation in this way, and I shall be brief. Before this action took place on the part of the Bank fo England, treasury bill rates were close to the 5 per cent bank rate. They were trading at about 4.97 per cent. It was felt desirable by the bank and I concurred, since we knew that the action of the Bank of England and of the federal reserve system in the United States would put upward pressure on our rates, that the increase should be appropriate to our situation to enable the Bank of Canada to carry on its operations as intended by the act.


Edmund Davie Fulton: Mr. Speaker, may I ask the Minister of Finance a question relating to earlier questions about the existing differential between Canadian and United States bank rates. In view of the differential of one and a half points, by which the Canadian rate exceeds the United States rate, does the minister anticipate that difficulties will be created with respect to what the governor of the Bank of Canada terms as the possibility of an excessive capital inflow?


Mitchell William Sharp: No, Mr. Speaker. Of course I discussed this very question with the governor of the bank during our consultations about what would be an appropriate rate. He assured me that this was not his opinion and, in fact, this has not been happening. Exchange markets are very orderly and there is no particular movement of funds in either direction. This is what we expected. May I add that in the two countries, as I said earlier, short term rates of interest rose by approximately the same amount and in the United States today treasury bill rates are 27053-281
DEBATES	4451
Inquiries of the Ministry above the rediscount rate in the United States, which illustrates the difference between the rediscount rate in the United States and our bank rate here.


Mr. H. A. Olson (Medicine Hat):: Can the
minister say whether there has been any significant or unusual increase in the movement of funds from Canada to the United Kingdom today as a result of devaluation?


Mitchell William Sharp: None has been brought to my attention, but I will make inquiries.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. J. N. Ormiston (Melville):: Mr. Speaker, my question is for the right hon. Prime Minister. In view of the report prepared by the Economic Council of Canada recommending a curtailment of P.F.R.A. and ARDA programs, can the Prime Minister indicate whether the government is contemplating any policy change in the administration of these two basic agricultural acts?


Lester Bowles Pearson: Mr. Speaker, we hope these acts will both operate, as they have in the past, at full capacity.


Mr. H. W. Danforih (Kent (Onl.)):: A supplementary question to the Minister of Forestry and Rural Development, Mr. Speaker. In view of the importance of the P.F.R.A. and ARDA programs and the recent report of the economic council, will the minister use his good offices to see that the entire matter is referred to the standing committee on agriculture, forestry and rural development for detailed consideration.


Maurice Sauvé: Mr. Speaker, I should like to say that in general the conclusions arrived at by the two experts whose services had been retained by the Economic Council of Canada are substantially the same as those of the federal section of ARDA. I am glad to get such an open support of the new policy which we have initiated and which we intend to develop further in the future.


Mr. David MacDonald (Prince):: Mr. Speaker, may I direct a question to the

November 20, 1967
Inquiries of the Ministry chairman of the agriculture committee. I see he must have stepped out of the house for a moment so may I give him notice of this question. In the light of earlier statements from the economic council on the ARDA and P.F.R.A. programs, will he be convening the standing committee on agriculture at an early date?



PROTECTION OF CHEESE EXPORTERS FOLLOWING EUROPEAN CURRENCY DEVALUATION

[Stage Direction]
On the orders of the day:
Mr. R. R. Souiham (Moose Mountain):: Mr. Speaker, I had a question for the Minister of Agriculture but in his absence I would like to direct it to the Prime Minister. Since nine countries, including Denmark, are following the lead of the United Kingdom by devaluing their currencies, what steps if any does the government intend to take to protect Canadian cheese exporters who according to current reports stand to lose heavily in competition with Danish exporters?


Lester Bowles Pearson: Mr. Speaker, I will be glad to discuss this matter with the minister who is returning from the food and agriculture conference tomorrow, I think.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of National Revenue. This question is of great regional importance and of national significance. My question is based on the fact that the people of the Kootenays generally and those interested in sports are concerned about the reduction of hours of operation of the United States custom offices at Nelway and Northport. Is it possible for the minister to use his influence with the United States authorities with a view to establishing a more satisfactory service at these United States ports of entry?


Mr. Speaker:: Order, please. The question may have national significance, but I remind the hon. member that many such questions are considered at the time of adjournment.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I would like to direct a question to the Prime Minister. Could he tell the house whether the government intends to finance a publicity campaign from the proceeds of liquor taxes to inform the public of the dangers of alcoholism?


Mr. Speaker:: I think the question is much too general to be asked at this time.


Gérard Laprise: At ten o'clock, Mr. Speaker.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. As a sequel to meetings he has had with representatives of the Saskatchewan government is it planned to hold conferences within one month on the question of administrative responsibility with respect to Indian problems?


Arthur Laing: Mr
Speaker, we were visited by representatives not only of Saskatchewan but of Alberta and Manitoba as well. They wanted to discuss with us all Indian affairs and the responsibilities of the provincial governments in respect of child welfare. They will forward us a letter giving an outline of the kind of discussion they want, and we are now awaiting that letter.



SANDY BAY, SASK.-REPORTED FOOD SHORTAGE

[Stage Direction]
On the orders of the day:
Stanley James Korchinski: Mr. Speaker, I have another question for the Minister of Indian Affairs and Northern Development. Has he any reports that the Indian community of Sandy Bay in northern Saskatchewan is experiencing a food shortage with planes unable to land because of thin ice, and will consideration be given to using helicopters to bring supplies to the community?
November 20, 1967


Mr. Speaker:: This is a matter of great urgency. The hon. member has made representations to the minister which I am sure will be considered immediately.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Just what arrangements have been made to protect the embassies and consulates of other nations in Canada from mob violence? I ask this question, Mr. Speaker, because of the assurances given to the house in this regard by the minister last Friday when replying to a question of the hon. member for Royal. Only a few hours after the minister's assurance the United States consulate in Montreal was attacked by a mob of hoodlums and fanatics and no protective arrangements were in evidence.


Mr. Speaker:: Order, please.


Some hon. Members:: Answer.


Mr. Health Macquarrie (Queens):: Mr. Speaker, I wish to address a question to the Secretary of State for External Affairs. With reference to the damage done to the United States consulate in Montreal on Friday night, can the minister advise us whether the United States government has been given any indication of the Canadian government's regret for this incident, and is tangible evidence of such regret being considered?


Hon. Paul  Marlin@Secretary of State for External Affairs: Yes, we have, Mr. Speaker, and this matter is now being examined.


Wallace Bickford (Wally) Nesbitt: A supplementary to the question I asked a few moments ago inquiring what arrangements had been made and to which the minister was unable to reply. Can the hon. gentleman not recall, from Friday to today, what arrangements were made for the protection of consulates?


Mr. Speaker:: Order. The hon. member is now arguing a point, not asking a question.


FINANCE
[Stage Direction]
On the orders of the day:
Colin Cameron: Mr. Speaker, as the Minister of 27053-2811
Inquiries of the Ministry Finance requested I shall be glad to repeat a question that I asked before. Can he explain the action of the chartered banks in making charges in excess of the allowable 1 per cent over the pegged rate? Is he to take some action with regard to this conduct on the part of the banks, which is bound to give rise to the speculation that he quite understandably fears at the present time? The matter cannot be cleared up merely by the minister making the sort of statement he made in the house earlier today.


Mitchell William Sharp: Mr. Speaker, one of my officials in the gallery listened to the hon. member asking his question and made some inquiries. The official found no evidence to support the hon. member's statement.


Colin Cameron: I bought some American funds myself today.


Mitchell William Sharp: If the hon. member did he made a bad bargain. He ought to have obtained the funds at a cheaper rate elsewhere.


Colin Cameron: 
Mr. Speaker:: Order, please.


Colin Cameron: I do not care what the minister's officials say. Somebody ought to take this question into account and check the matter.


Mitchell William Sharp: Mr. Speaker, I checked on the rates that are available. My hon. friend can get, as can anyone else, a rate of one Canadian dollar for 93%2 cents in United States currency. If operations such as described by the hon. member are going on-I shall check into the matter, and I take the hon. member's word for it-they have been carried on in contravention of the agreement reached with the International Monetary Fund. If any quotations such as those mentioned by the hon. member were operating in the market it would be the duty of the exchange fund to intervene to keep the rates within 1 per cent on either side of the pegged rate. So my only suggestion to the hon. member is that he should change his bank.

November 20, 1967
Inquiries of the Ministry


Colin Cameron: Mr. Speaker, may I ask another supplementary question. I still resent that frivolous attitude on the minister's part.


Mr. Speaker:: Order, please.


Colin Cameron: I have evidence that this is going on.


Mr. Speaker:: Order, please.


Colin Cameron: This is bloody irresponsible.


Some hon. Members:: Oh, oh.


INDUSTRY
[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Industry related to a question I asked two weeks ago, at which time he informed the house that United States and Canadian officials were making arrangements to review the United States-Canada car pact. Previously the minister said that the officials would sit down and review the pact. Is it a fact that the United States officials are stalling since the pact calls for decisions by the end of next month?


Mr. Speaker:: Order, please. The hon. member is not asking a question; he is presenting an argument. He should ask his question directly.


Alfred Dryden Hales: May I ask the Minister of Industry whether the United States officials are stalling so they will not have to meet with the Canadian officials for this review?


Charles Mills (Bud) Drury: Mr. Speaker, I think the term "stalling" would, in this sense, be unparliamentary.


Some hon. Members:: Oh, oh.


Charles Mills (Bud) Drury: It is a fact that United States officials have not yet accepted our invitation to start.


An hon. Member:: Isn't that stalling?


Alfred Dryden Hales: A supplementary question, Mr. Speaker. In view of the efforts which have been made and the pressures which have

been generated by protectionists in the United States congress, does the minister intend to press for an increase in production of cars and parts by United States owned companies operating in Canada?


Charles Mills (Bud) Drury: Mr. Speaker, we have not yet started the review. Until such time as there is agreement on what the pact has so far achieved, it would be unwise to start making claims for the future.


CONSUMER AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question I wish to ask the Registrar General in connection with his new interest in consumer affairs, but in his absence possibly someone else might take it as notice. Having in mind a private member's notice of motion introduced today calling for an inquiry at the federal level into the car insurance industry, would the minister undertake to give this matter careful consideration?


Mr. Speaker:: I am not sure whether the question is in order. I gather that the hon. member is asking a question about his own notice of motion.


An hon. Member:: It is a commercial.


Barry Mather: Ten o'clock, Mr. Speaker.


COMPANY OF YOUNG CANADIANS
[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-stoke):: Mr. Speaker, I have a question for the Prime Minister arising out of a story which appears in the December issue of Macleans magazine. Is it the intention of the Prime Minister to investigate the constitutional complexities of subsidizing an unusual private school in Vancouver, British Columbia, with federal funds obtained through the Company of Young Canadians?


Mr. Speaker:: Order. I suggest that the hon. member's question should be placed on the order paper.
November 20, 1967


FINANCE
[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, I have a question for the Minister of Finance. Does the announcement over the week end that there is to be a further conference between the minister and representatives of the provinces with regard to the Carter report on taxation indicate that there is likely to be a postponement of the publication of the government's white paper?


Mitchell William Sharp: Not necessarily, Mr. Speaker.


Marcel Joseph Aimé Lambert: But does this not give the government a further opportunity to consider the appointment of a special joint committee to examine the Carter report before the presentation of a white paper?


Mitchell William Sharp: I am still not convinced, Mr. Speaker.


Thomas Clement (Tommy) Douglas: Can the minister give us some idea when the white paper will be brought down?


Mitchell William Sharp: I have not found any reason as yet to alter my timetable: as close to the beginning of the year as possible.


Stanley Howard Knowles: Which year?


INQUIRY AS TO RESULTS OF RECENT BOND ISSUE
[Stage Direction]
On the orders of the day:
Douglas Scott Harkness: Mr. Speaker, my question is directed to the Minister of Finance. In connection with the minister's press release of last week stating that the latest government bond issue has been taken up only in the amount of $225 million rather than in the amount of $250 million, the target figure, can the hon. gentleman inform the house whether this $225 million is all new money and, if not, what proportion of it was taken up by the Bank of Canada?


Mitchell William Sharp: I will take that question as notice, Mr. Speaker.


TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, I have a question to address to
Inquiries of the Ministry the Minister of Transport. Is the hon. gentleman now ready to make the long awaited announcement in connection with the Digby-Saint John ferry?


Hon. Paul Hellyer (Minister of Transport):: Mr. Speaker, I do not have all the details ironed out yet but I am still working on this. If health and weather allow, and I get down to visit the hon. member over the week end, I may elaborate a little in this regard.


John Patrick (Pat) Nowlan: Perhaps this was covered in the last part of the minister's answer, but is the hon. gentleman prepared to make a detailed statement in Nova Scotia, when he does go down there, on the Digby-Saint John ferry?


Paul Theodore Hellyer: I doubt that it will be as detailed as the hon. member would like, but it will be a positive statement indicating my optimism about reaching a solution among the three or four parties directly involved to provide the kind of service between the two provinces which the hon. member would like to see maintained.


Mr. Fairwealher:: Has the minister permission to travel to Nova Scotia this week end?


Paul Theodore Hellyer: I have applied for my passport, Mr. Speaker.


Some hon. Members:: Oh, oh.


UNITED NATIONS
[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Canada's ambassador to the United Nations is said to have told the security council that it has a clear duty to take effective action to eliminate the threat of mercenary incursions into the Congo from Portuguese territory in Angola. I should like to ask the minister what effective action Canada has proposed so that the United Nations condemnation of Portugal will not be just an empty gesture.


Hon. Paul Martin (Secreiary of State for External Affairs):: Mr. Speaker, I will be glad to deal with that tomorrow.


David Samuel Horne MacDonald: I have a supplementary question for the Prime Minister. On Thursday of last week, following a

November 20, 1967
Inquiries of the Ministry vote of censure against Portugal at the United Nations, I asked the Prime Minister whether Canada had conveyed to Portugal her displeasure over these incidents and the right hon. gentleman suggested he would make an inquiry into this matter. I wonder whether he has something to report to the house today.


Lester Bowles Pearson: Yes, I think the Secretary of State for External Affairs might be able to deal with this now.


Paul Joseph James Martin: The hon. member directed this question to the Prime Minister a few days ago. The situation is that on November 15 the security council condemned the failure of Portugal to prevent mercenaries from using the Portuguese administered territory of Angola as a base of operations for armed attacks against the Congo. We recalled in the security council Canada's past and present support for measures to ensure the territorial integrity and stability of the Congo. We criticized the mercenary attack on the Congo and the failure of the Portuguese authorities to abide by previous security council resolutions which requested states not to provide facilities for mercenaries. Our position was made clear in the security council itself.


David Samuel Horne MacDonald: Can the minister inform the house whether or not Canada will be taking action to impose a form of embargo, economic or otherwise, on Portugal in view of the situation in Angola and other colonies at the present time?


Mr.   Marlin@Essex East: Canada will comply with her obligations under the charter.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: Mr. Speaker, may I address a question to the Minister of Justice. In view of the action unanimously taken by the Yukon legislative council last week in calling for the transference of jurisdiction from the Department of Justice to the government of the Yukon, is it the intention of the government to effect such a transfer of Jurisdiction by an appropriate amendment to the Yukon Act?


Hon.   P.-E. Trudeau@Minister of Justice: Mr. Speaker, I cannot reply in the affirmative to this question, but I should say that the situation of the Minister of Justice and his jurisdiction on the Yukon and Northwest Territories are questions in which I am greatly interested and to which I am giving considerable attention.



NATIONAL DEFENCE


[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 Minister of National Defence. In view of the public announcement by the Secretary of State for External Affairs that the government has decided to remain in NATO under a new agreement, will the minister now have this matter referred to the defence committee for information and consideration?


Léo Alphonse Joseph Cadieux: Mr. Speaker, we had an invitation to have a joint meeting of the external affairs and defence committees, and I think that the Secretary of State for External Affairs agrees with this suggestion. We have now to work out the arrangements.


Harold Edward Winch: As a supplementary question, will this meeting be held soon?


Léo Alphonse Joseph Cadieux: Yes, Mr. Speaker, soon.



COUNTER MEASURES TO POSSIBLE USE OF SEA MINES

[Stage Direction]
On the orders of the day:
James Norris Ormiston: Mr. Speaker, I too have a question for the Minister of National Defence, and I apologize for not giving him notice of it. In view of the fact that many countries are now stockpiling different types of sea mines, what action is being taken to reactivate Canada's mine countermeasure force?


Mr. Speaker:: Order. I am not convinced that this is a question which should be asked at this time.


James Norris Ormiston: Mr. Speaker, may I rephrase my question to the Minister of National Defence and ask him what action is
November 20, 1967

being taken to reactivate Canada's mine counter-measure force?


Léo Alphonse Joseph Cadieux: This force does not have to be reactivated, Mr. Speaker, because it is always active.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I would like to redirect to the Minister of Finance a question which in his absence on Friday I asked the Prime Minister. Despite the efforts of the Prime Minister to be helpful I am still mystified. Is the federal government pressing the governments of British Columbia and Ontario to cut production to help ease the economic crisis, as the attorney general of British Columbia is reported as having said in Vancouver?


Mr. Speaker:: Order-


Mitchell William Sharp: No, Mr. Speaker.


Mr. Speaker:: I was wondering whether this question was in order. I was going to suggest to the hon. member that he should not repeat a question which has already been asked, but I gather that the minister has now replied.


Thomas Speakman Barnett: Mr. Speaker, I really feel that the Prime Minister misunderstood the purport of my question on Friday and I thought it was one for the Minister of Finance to deal with.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Has he agreed to meet the four Atlantic premiers with reference to transportation matters and, if so, when?


Paul Theodore Hellyer: I would be pleased to do so, Mr. Speaker, at their convenience to discuss the problem of transportation in its wider aspect for the maritime provinces.
Inquiries of the Ministry


Thomas Miller Bell: Would the minister be prepared at such a meeting to discuss the various promises made by his predecessor before he was called back to the public service-


Mr. Speaker:: Order, please. This is
argumentative. I wonder whether hon. members would want me to call orders of the day now.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Richard Albert Bell: Mr. Speaker, may I ask the Prime Minister if he can indicate what progress is being made by the government in its consideration of the unanimous report of the joint special committee on the public service, presented on May 8, 1967, in relation to pensions for retired civil servants?
Righf Hon. L. B. Pearson (Prime Minister):
The matter is still under consideration, Mr. Speaker.



FISHERIES


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: Mr. Speaker, may I direct a question to the Minister of Fisheries. In view of the continued depressed lobster fishing conditions in district 8 in the Northumberland strait, is the minister giving consideration to stepping up research into the expansion of the lobster fishery in that area?


Hon.   H.-J. Robichaud@Minister of Fisheries: Mr. Speaker, I thought the hon. member was well aware that during last summer we conducted a research program on lobster fishing not only for the district referred to, but for the whole east coast, and it is our intention to activate this research further.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Prime Minister. In view of the statement over the week end in Sydney, Nova Scotia, by the Minister of National Health and Welfare to the effect that the government is

November 20, 1967
Inquiries of the Ministry doing everything possible to find ways and means by which the steel plant can be kept operating in that city, has the government conveyed to the government of Nova Scotia any definite commitment as to the financial responsibility which it is prepared to assume in order to keep the steel plant in operation?


Lester Bowles Pearson: No, Mr. Speaker, because the government of Nova Scotia is still discussing with the corporation the possibility of keeping the plant open, the cost of keeping it open and the ultimate viability of the industry, and until these matters are considered by the corporation with the province-and I may say we are keeping in touch with the province with respect to these discussions-it would be impossible for us to make a decision and an announcement of what we might be able to do. But I have been in personal touch with the premier of Nova Scotia over the week end and I have assured him of our desire to be helpful.


Thomas Clement (Tommy) Douglas: Does that assurance of the Prime Minister go beyond April, 1968?


Mr. Speaker:: Order. This is debate. [Translation]



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
J.-H.-Théogène Ricard: Mr. Speaker, I should like to put a question to the Minister of National Health and Welfare.
Since several provincial premiers have acknowledged their inability to accept or join the medicare insurance plan under its present form, does the minister not feel that its gradual implementation, in order to meet urgent needs, would be in the best interest of the majority of Canadians?


Mr. Speaker:: The hon. member is asking the minister to express an opinion. Put in those terms, the question is out of order.


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board) moved: that the house go into committee of supply.
[Mr. Douglas.)



ALLEGED ECONOMIC MISMANAGEMENT BY GOVERNMENT

[Stage Direction]
Hon. Robert L. Stanfield (Leader of the
Opposition): Mr. Speaker, I think I should begin by saying that while I shall have some critical things to say about the government in the course of my remarks this afternoon, I understand that the Prime Minister (Mr. Pearson) is travelling across the ocean later today on official business and I should like to say at the outset we wish him bon voyage and a safe trip; of course, I also add that we cannot give him any guarantee at this time that his government will be here on his return.
Some hon. Members:: Hear, hear.
[DOT] (3:50 p.m.)


Lester Bowles Pearson: Perhaps I might thank my hon. friend for his good wishes and tell him it might be better if I remained here until tomorrow night at eight o'clock so that I could disprove his dire prediction.


Robert Lorne Stanfield: I simply wish to make it clear that we are not issuing any guarantee concerning the continued existence of the government or in respect of what his colleagues might do in his absence.
To be a little more serious, Mr. Speaker- although of course I was quite serious in my good wishes to my right hon. friend-this is the first opportunity I have had to make a speech on a government measure as the Leader of the Opposition. I believe the house is entitled to hear from me as one of its officers concerning the attitude and approach of my colleagues and myself to parliament today and to parliamentary business. This I intend to do now very briefly but nevertheless also clearly, I hope, with the indulgence of the house.
I come here with a respect and affection for legislatures, parliaments and parliamentary institutions. I had the good fortune to serve for 18 years in another legislature, first as leader of the opposition and then as leader of the government. I should like to say that I take and took the one responsibility as seriously as the other. A familiarity with legislative and parliamentary traditions and practices bred in me a healthy respect for the potential of parliamentary institutions and for their relevance to modern conditions even after 700 years and as well, sir, a realistic attitude toward the limitations of parliament.
Like most Canadians I have followed the affairs of this house with a great deal of
November 20. 1967

interest but from some distance. So my perspective of parliament has been similar to that of most Canadians. I understand their concern about parliament and I might as well make it clear from the beginning that I share that concern. It is one thing for the people to lose confidence in the government as it is manifest they now have, although happily there is a remedy open to the people and their representatives in that regard; but it is quite another thing when people begin to lose confidence in parliament or in the capacity of parliament to give leadership to the country in dealing with the country's outstanding problems. Such an erosion of confidence would engender frustration, bitterness and in the end despair. Once the people were to lose confidence in parliament they would begin to lose confidence in their country and in themselves. If this were to happen in this most fortunate of countries in the year 1967 it would be one of the scandals of history.
Outside the house I have already said that we intend to be a strong opposition because there is much to oppose in the conduct of this government. There are questions to be asked and explanations to be given which have not been forthcoming, at least in the manner expected by or to the satisfaction of the people of this country. Not only do I say that we wish to be a strong opposition; I say that the present circumstances of this country require an unusually strong opposition, because the weaker the government the greater the need for a strong and informed opposition. But to be strong is not to be obstructive. As I said before, we are in politics to help get things started, not to get them stopped.
If I may speak from a partisan point of view for a moment-I have been speaking generally from the point of view of the public at large-I should like to say that I have no fear of allowing the government to proceed with its legislation. I say to the government through you, sir, let them bring in their program to deal with the present and future requirements of Canada. We will examine that program fully, vote on it in due course and then the people will judge it. I have no political fear of their program because I say to them in as kindly a manner as possible that we have a pretty realistic opinion of their capacity in this regard. Sooner or later they will have to go to the country to defend what they have and have not done. I suppose they will have recourse to that most hackneyed of government election strategies, that
4459
Suggested Economic Mismanagement is, to blame the official opposition for their failures.
We intend to see that the government is judged on its record, on whatever capacity it has demonstrated to deal with the problems of the country and of course, on the other hand, on the strength of the other alternative that is available. This is a comparison and contrast which we on this side of the house look forward to. In the meantime, however, we want parliament to work. I hasten to assure you, Mr. Speaker, that I do not set myself up as an expert on parliamentary procedure, but we want parliament to work as effectively as it can, realizing of course that it will barely work at all unless good leadership is given to the house by the government.
I should like to make two points in this regard. First, I am not convinced that the most appropriate way for parliament to work is to burden this place with dozens of new rules to cover every possible eventuality. It seems to me there is a real danger that a parliament which is subject to excessive or detailed regulations will lose the flexibility and freedom that may be needed to deal with important issues and with the unfortunate crises which do arise from time to time. Therefore I much prefer that we expedite the business of the house by a consensus of the parties rather than by excessive regulation.
Second, I should like to emphasize that any reform of parliament must be such that it will make government more responsible and more responsive to the house, not less, and will make this responsibility more meaningful. Some of the procedures here may be irrelevant. If that is so, let us discard them. But parliament itself is certainly not irrelevant. We should not water down the basic rights of parliament simply because of their antiquity. In looking at the problems which government and parliament must deal with today, I am convinced that some of these old principles, particularly those relating to the accountability and responsibility of government to parliament, are even more necessary under today's conditions than they have been perhaps at any time during the 700 year history of parliament.
The work before us surely is to find procedures that will make these principles more meaningful and will improve their application to modern problems. I am in favour of confining debate on legislation to that which is necessary in respect of the principle and for scrutiny c 1 the details of bills, but believe
November 20, 1967

Suggested Economic Mismanagement that this must be done through agreement among the parties. I believe we might also consider whether it would be advisable to dust off the rules of relevance and repetition which have been enforced more strictly in the British house than in ours. In saying this, sir, I am not implying any criticism of yourself. I also like the hobby-horse of my colleague, the hon. member for Queens (Mr. Macquarrie), which I believe the Prime Minister has been on for some time. We should like to see some more efficient way than we have at present to conduct votes in this house.
[DOT] (4:00 p.m.)
Those are examples of what might be desirable with agreement of the parties. The objective, as I say, must be to emphasize the accountability and responsibility of government to parliament and through parliament to the people. Despite the advances and improvements in communications I think the average citizen feels more remote from institutions such as this and from the people who represent him here than formerly, and I sense there is a growing uneasiness in this house on both sides about the difficulty of obtaining a consensus from the public about the great issues of the day.
There are vehicles in parliament for crystallizing issues and for bringing to a head questions of confidence that are in the minds of the people of the country, and ways of making decisions on these in parliament. I think we should use these vehicles, one of which is the supply motion that has now been moved. Surely to debate supply and to demand redress before voting supply is one of the most ancient and basic prerogatives of parliament. I think also it is one of the most relevant to modern conditions, and I intend later on to move an amendment to the supply motion.
There is a definite question of confidence in the government and the conduct of the government which has led us into present difficulties, and a question of confidence in the capacity of this government to resolve them. This question of confidence has been expressed more and more insistently in the press of this country and by the growing uneasiness of investors. It has been expressed by the growing concern and worry of ordinary Canadians going about the daily business of trying to make a living, to provide for their families and to meet rising costs out of their income. There is most certainly a question of confidence, and nothing could be

more clear than the duty of the opposition to raise this and raise it now. Nothing could be more important than that parliament should examine the conduct of this government in the economic field and bring to light the failure of the government and government policies to foster prospects for suitable growth and prosperity equitably shared among Canadians. If parliament cannot discharge this duty and discharge it in a responsible and reasonable way, then surely we are wasting our time here with no sense of a scheme of public priorities and priority problems that Canadians expect us to handle.
It is true that in the course of time we will have a mini-budgetary statement by the minister and at some time a possibility of debating it. If the time comes to vote on that budget we will, of course, vote on the adequacy of the government's budgetary measures. But parliament is also entitled, I suggest, and, indeed, in present circumstances obliged, to examine the government and decide whether on its record it can be entrusted to develop and present measures to deal with economic problems, whether it should be allowed to bring in such a budget and whether the country can stand this government any longer. We must decide in any case, whatever exhortations, forecasts or policies are spelled out by the government, whether the government can any longer be taken seriously. I will return to this matter a little later.
Clearly in this country there is a question of confidence in the government and whether this government, which is in large part responsible for our present economic problems, can be entrusted to solve them. I suggest it is the duty of members of parliament to try to decide this great question of confidence. The indications are surely very strong and clear that the people have substantially less than full confidence in this government, but what must be decided now is whether parliament has confidence.
I want to make it clear immediately that we have great confidence in our society and in the basic strength and future of the Canadian economy. We in Canada have an excellent potential and a strategic position, and there clearly should be no cause for concern about the fundamental capacity of our economy. Having said that I want also to make it clear that I do not minimize the difficulties which confront the government of Canada when dealing with economic matters. I certainly do not minimize those difficulties. But the normal, and I emphasize the word
November 20, 1967

"normal", problems of the Canadian economy as a whole are neither drastic nor disruptive.
From time to time, of course, as we all know, there are local and regional disruptions which are very important and sometimes disastrous to the regions affected. It is unusual, however, for the whole economy of Canada to be subject to sudden heaves and shifts. The normal problems of the Canadian economy, at least in the world context, I suggest are more moderate than severe. They are more or less predictable, or at least the Economic Council of Canada considers them to be so. It has made some predictions and recommendations.
It is my belief that ordinarily the economy will respond to the steadying influence of consistent government policy and reasonable planning, if these are brought to bear at the right time. So that in terms of our natural capacity to grow and sustain our growth, surely we are one of the most fortunate nations of the world. Good fortune, of course, requires good management, and government policies can improve the performance of an economy and they can impede that performance.
We have no desire at all to contribute to the decline in confidence that seems to be growing in Canada or, to put it more accurately, the decline in confidence that seems to be growing among the Canadian people. We want to try to arrest the decline in public confidence, and the most effective and direct way in which that goal can be accomplished, so far as we know, is to try to remove this government.
What is the outlook for the economy? The government has frequently been warned about the prospect of a levelling off or softening of the economy. Indeed, I think the Minister of Finance (Mr. Sharp) referred to this possibility in the course of making his budgetary speech last spring. That prospect has now become more threatening because of continuing inflation and the growing lack of confidence in this government. We have inflation but we have idle resources in the form of increasing unemployment.
There is no need for me this afternoon to try to place on the record all the indicators as to where our economy is going. I do not think anybody, including the minister, would dispute that the elements are there and that there is already a perceptible slowing down in the economy. The minister might possibly be a little more selective in his statistics so I shall just make one or two references to underline my point.

Suggested Economic Mismanagement
The Economic Council of Canada asserted that a 5 per cent growth rate in Canada for the period 1965-1970 was not only reasonable but would be necessary if we were to develop the employment opportunities required in view of the rapid growth of our work force. Our growth rate in real terms since the spring of 1966, according to the governor of the Bank of Canada, has been hovering between 2 per cent and 2J per cent. This is roughly half the rate of growth that the Economic Council of Canada has said we require.
[DOT] (4:10 p.m.)
Let me hasten to say that a levelling off of the economy is not a serious thing if it is temporary. I do not expect the government of the day to be able to maintain everything on a precisely even keel with a growth of precisely 5 per cent per year. But it is not just this flattening out that has to be considered. This slowing down in the growth rate has been going on apparently since the spring of 1966.
Unemployment is now growing. The reasonable target set by the Economic Council of Canada for unemployment is a figure of about 3 per cent. The economic council recommended that it should not be allowed to go above 3 per cent, if possible. By the end of October the rate of unemployment in Canada, seasonally adjusted, was 4.7 per cent. There were 254,000 Canadians unemployed. This represented an increase of about 35,000 unemployed over September and an increase of about 59,000 over the figure for the month of October, 1966. The rate of unemployment is high in British Columbia, the province of Quebec and the Atlantic provinces.
I do not think other indicators offer very much more comfort. One respected financial commentator has reported that there appears to be a 14 per cent decline in the investment intentions in Canada by Canadian subsidiaries of American corporations, and the indications are that private investment intentions generally are also in decline.
So here we have the general story of the economy, a story of inflation accompanied by a slowing down in the growth of our economy. Ordinarily, in conditions of slack the government of Canada should be in a position to consider measures to stimulate the economy, but this government has by its conduct cut itself off these priorities, these options. Increasing unemployment would ordinarily suggest the need to encourage the economy through some such device as a tax
4462	COMMONS
Suggested Economic Mismanagement cut or something else in order to increase the rate of growth and the amount of employment and to cut down the amount of unemployment. Unfortunately, the financial requirements of this government and the inflation toward which the government has contributed so much not only preclude fiscal measures to increase employment but apparently have induced the government to forecast tax increases, which may result in further unemployment.
I do not want anybody to think I am unfair, Mr. Speaker, in attributing a good deal of the blame to the government. Just in case the members of the government did not notice it themselves, I saw a scholarly reference to this subject made by the premier of Saskatchewan in the paper this morning.


Some hon. Members:: Oh, oh.


Robert Lorne Stanfield: He said that Canada is threatened by continuing and increasing inflation as well as a soaring cost of living. Then he was quoted as saying:
Our own party-
Which I do not think is the Conservative party.
-as the government, must accept responsibility for the primary blame.
Then he said that the federal government must present policies which will restore responsible fiscal leadership. And so on. I do not just take it upon myself to assess the blame. 1 have been very much influenced by expressions of opinion of that sort.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: In any case, Mr. Speaker, the government is certainly caught in a box of its own making. Unfortunately, the people of Canada are also caught, against their will and despite the warnings. Perhaps I might quote the following from the Montreal Star of November 17:
We are in for a new and unpleasant experience- inflation, high interest rates and growing unemployment. Until very recently, it was thought impossible to combine these three elements in a single situation.
This government has managed to do it. So we have both inflation and unemployment, and the government seems unable now to work on one problem without making the other worse. But the most tragic fact is that the heaviest burden of all this government's mismanagement falls on those Canadians who can the least afford to bear it. Canadians on low and fixed incomes are usually the first

DEBATES	November 20, 1967
to feel the burden of unemployment and to be the victims of unemployment. They are usually the worst victims of inflation. This burden, as well as being unnecessary, is also profoundly unjust because of all the groups in this wealthy land the ones who most require the assistance of organized society are those who are either very near or even below the minimum margins that are acceptable to a decent and a civilized people. In place of help they are suffering the heavy penalty of disorganized and undisciplined government. I do not need to dwell on this matter, Mr. Speaker. The effects of inflation are well known in this house and to the Canadian people.
In the short term inflation, of course, strains the economy by increasing the gap between what people are accustomed to and what they are able to buy under these circumstances. That is serious enough, but I do not propose to dwell this afternoon on the effects of our high cost of living because I believe this subject has been debated previously during this session.
I want to emphasize particularly, important as these other effects may be, the effect of these conditions on our economy, our outlook and our future. In the longer term inflation could strangle the Canadian economy because as prices rise, as production recedes, our capacity to compete in world markets and to sell our goods declines also. Certainly the degree of inflation which has taken place in this country in recent years has seriously undermined our ability to compete and our ability to move ahead at a satisfactory rate.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: The rate at which prices have been rising in Canada, particularly in the last two or three years, far exceeds the rate in our great neighbour the United States. Not only is it much greater than in the United States but it is more than double the rate of the rise in the price level which the Economic Council of Canada has said is tolerable for this country.
Let me just mention some figures to remind the house. The Economic Council of Canada stated that Canada's economy could perhaps sustain an average annual price rise of something ranging between 1.4 per cent and 2 per cent. In 1963 the rise was within that span; it was 1.8 per cent. In 1964 it was 2.5 per cent. In 1965 it was 2.9 per cent. In 1966 it was 4.6 per cent, and I understand that this year so far it has been 3.6 per cent. These figures are to be compared with what
November 20, 1967	COMMONS
the economic council suggested was tolerable. When you compare them with the comparable figures for the United States you see just what damage has been done to our ability to compete.
[DOT] (4:20 p.m.)
In 1964, for example, the price increase in the United States was 1.6 per cent as against 2.5 per cent in Canada. In 1966 the increase in the United States was 3 per cent as against 4.6 per cent in Canada. It must be emphasized that the United States has been able to do a more effective job than Canada has done in restraining the rate of price increases despite the fact that it has been involved in the war in Viet Nam, virtually a major war. An examination of the differences in the rate of price increases between our country and the United States indicates that we have lost a great part of the competitive advantage which we derived from the devaluation of the Canadian dollar in 1962. This again is not just my opinion. I might remind the house of an analysis appearing in the London Economist of September 30 which reads as follows:
For the past two years, Canada has failed to match that cost and price performance of the United States. The economy has been overloaded, the limits of capacity too closely approached and a wave of cost and price increases generated which continues to sweep through the economic system after the boom has topped out.
This represents an indictment of this government's fiscal policies which certainly cannot be ignored. The same article refers to the minister's policies in these terms:
Mr. Sharp, alas, cannot avoid the responsibility for inadequate fiscal action, the need for which he now seems belatedly to realize.
I think this may be a little unfair to the Minister of Finance, and I am not sure that this has been the real problem in the government. Certainly I do not wish the Minister of Finance to think I am picking on him. My criticism is directed against the government as a whole.


Mitchell William Sharp: I am not sensitive.


Robert Lorne Stanfield: Besides the need for sensible and systematic budgeting policies, the economic council, and others of course, have recommended other important policies in the fight against inflation. The importance of increasing productivity in Canada has been emphasized as a means of fighting inflation.
I think we all recognize the importance of this and we are all concerned about the apparently dismal performance of Canada
DEBATES	4463
Suggested Economic Mismanagement with reference to productivity. I do not think I need document this. I think it is unquestionably so. Indeed, I understand that Canada has ranked fourteenth among the 14 industrial nations of the western world over a period of time, and I think this is something about which we should all be concerned.
Many factors are involved in this but surely the most important factor associated with the question of productivity is the matter of the technical and vocational skills of our people and the rate at which these are being increased. This of course involves general education, which is a provincial responsibility; it involves vocational and technical training and, speaking generally, it involves an upgrading of skills. The Economic Council of Canada pointed to Canada's rather disappointing performance in this regard over the years and urged us to continue making a greater effort. Until last spring this was a shared responsibility in the field of trades and technical training, with the provinces and the federal government sharing the cost. About a year ago the federal government decided to split rather than share the financial responsibility and it announced that as of April, 1967, it would no longer share in the cost of operating vocational training programs associated with the provincial public school systems. On the other hand, it announced it would assume full responsibility for the vocational training of adults. At the same time the government announced new arrangements with regard to postsecondary education, but I am not concerned with that today.
The provinces were to be consulted before these new arrangements for vocational training were announced. Actually, federal officials made tentative arrangements to visit the provinces for the purpose of consultation but these tentative arrangements never materialized. I do not attribute this to any lack of good intention on the part of those involved. Apparently the problem was that this government could not make up its mind and could not decide what it wanted to do. Consequently, the federal officials could get no instructions as to what were the matters on which they were to consult the provinces. As a result the provinces went to that federal-provincial conference in the fall of 1966 not to discuss what should be done and not to discuss what arrangements should be made in this important field of training but to hear what the federal government had
November 20, 1967

Suggested Economic Mismanagement decided to do, apparently just a few hours before the delegates arrived for the meeting. There was no genuine consultation about the main features of the federal decision although there was and has been consultation on matters of definition and detail.
As a result of all this there has been widespread confusion in the field of vocational training during the past year. I might even suggest it has been chaotic. I want to say that officials and ministers, both provincial and federal, have been doing their best to straighten things out and make these arrangements workable. I can only assume that these new arrangements regarding vocational education were devised by people who apparently meant well but had no knowledge of the practical realities, and that these new arrangements were adopted by the government hurriedly at the last moment just prior to the federal-provincial conference. I mention this simply as an illustration of the unfortunate tendency of the government to improvise policies without sufficient consideration and consultation.
I do not wish to weary the house with details more proper to a discussion of departmental estimates, and I hope I will have an opportunity before long to discuss these matters in some detail and some depth. Today I simply wish to draw attention to the confusion created and the consequent detrimental effects on vocational training. I should point out, however, beyond emphasizing the confusion, that this government has substantially reduced and cut back programs for training on the job. The government may claim, of course, and it does claim, that it is spending more money on vocational training than it did a year ago, but it cannot claim that it launched its new initiative after consultation or after careful planning, and certainly it cannot claim that it is providing training for adults, either on the job or in schools, to the full extent that circumstances in our country require. All this is obviously relevant to the problem we are discussing and about which we are worried, namely, the problem of increasing productivity, and consequently it is relevant to our costs of production and therefore to our war on inflation, not to mention unemployment.
However, it is the government's financial policy that I wish to speak about. It has been uncertain, changeable and inconsistent. Again I should like to refer to the Economist where the following statement appeared:
There have been few examples of such a violent swing of the levers of economic control.


[DOT] (4:30 p.m.)
After rereading the minister's budget speeches in the last couple of years, in the spring of 1966 and in December, 1966, as well as in the spring of this year, I have to say that the government has been far too complacent about the dangers of inflation. The government has known for some time that an inflationary situation was developing. In fact, the minister himself referred as long ago as the spring of 1966 to the need for restraints. The government has known how much faster prices were rising in our country than in the United States. Surely the government realized the serious effect this must have on our competitive position. Despite the indications, despite the opportunities, the government really did not do anything effective about inflation or do anything to ensure that it would be able to respond to the needs of the economy as those needs might develop. This is the situation in which the government finds itself today.
Earlier this year the minister discussed the possibility of establishing some form of guide lines in connection with this problem in Canada. He dismissed them apparently because of his view that there was not sufficient consensus in the country among governments, business and labour to make them work. However, I suggest that this government and the minister have a rather peculiar attitude toward consensus. The government seems to think that consensus is something to wait for, at least in this regard, but in our view consensus is something the government has a responsibility to try to create.
Surely the important fact in the economy today is not so much that concensus is lacking but rather that more consensus is required. I am sure the minister would agree with that. I do not believe there is any quarrel as to what our goal is. I think, at any rate, our agreed goals are to achieve an adequate rate of economic growth, reasonably full employment and reasonable stability of prices. Clearly, appropriate monetary and budgetary policies are necessary to achieve these aims. These are necessary, but are they enough? Are they enough even if we reinforce them with those recommendations made by the Economic Council of Canada relating to the better planning of the demands of the construction industry, better integration of provincial and federal governmental considerations relating to expenditures and this sort of thing, particularly productivity? These are certainly important suggestions, but I am not convinced that all
November 20, 1967

these recommendations taken together and applied conscientiously and intelligently would result in a satisfactory degree of price stability, give conditions of reasonably full employment and sustain a satisfactory rate of growth. Certainly they would result in a far better performance than we have had in the last two or three years under this government.
I am not convinced, and I say this frankly, that they would necessarily in themselves yield satisfactory results, because under conditions of sustained economic growth and reasonably full employment there seem to be upward pressures on costs and prices induced by that very human desire we nearly all have to improve our own lot. But are we doomed because of this to suffer so much unemployment or so much price instability? I refuse to accept that, presumably as the Minister of Finance does, although I do not know whether he does. I refuse to believe we cannot find a more civilized way to control inflation and achieve reasonable stability of prices than by bringing about periodically an excessive level of unemployment. I suggest there must be a more civilized way of achieving stability than by producing unemployment.
I appreciate the difficulties in connection with guide lines, but there is general recognition throughout the country that we must work out some practical methods of achieving restraints, not just urging restraint and encouraging it but I think by developing agreement about our goals and support of policies. I think there is some reason to have confidence in the ability of a national government to establish a process of continuing consultation, involving responsible representatives of business, labour and other governments.
The results of this will not be perfect, but I suggest we must try. I suggest we should have been trying long since. Of course, we must proceed in such a way as not to tie the economy in knots or introduce new rigidities. As a beginning I suggest that the federal government must show leadership in terms of both adequately meeting its own responsibilities and encouraging co-operation within the economy. I suggest there does not appear to be any prospect of either of these developing under this government. The government does not appear to be in a position to ask itself what measures would be appropriate to the economic situation today, with increasing unemployment.

Suggested Economic Mismanagement
The question ministers must ask themselves in the present predicament is, how can we get the government out of the jam it is in? The economy suffers both in the short term and in its long term aspects. The government, in its complacency, has allowed inflation to erode the prospect for long term growth. In addition, it has shut off those options which might allow policies resulting in expansion to take place now. The government has, therefore, boxed itself in so that neither the minister nor the country seems to have room to manoeuvre.
I think perhaps the situation of the government today is a classic example of the situation the economic council warned against in its most recent report, page 256. I shall read from it briefly:
If monetary and fiscal policies are aimed primarily at moderating shorter term fluctuations in the Canadian economy rather than, as we have suggested, at sustaining stable longer term growth of final demand, there is a serious danger that policy adjustments may overdo the needed corrections or have highly uneven, belated and untimely impacts. In other words, policies designed largely by way of reaction to emerging short term instabilities may well contribute to an unfortunate "stop-go" pattern of development, and may even accentuate the instabilities.
"Policies of reaction". There is no better phrase to describe the present economic policies of this government. They have lost the initiative as a result of their own failure of discipline and are left now with no policy but reaction to the problems that confront them. Their problems grow worse. On October 4, speaking in this house, the Minister of Finance proposed, if necessary, to control inflation by allowing the economy to develop a little more slack for a year or two while price and cost increases tapered off. I suggest again, Mr. Speaker, surely there is some more civilized way of achieving price stability than by slowing down the economy and deliberately increasing unemployment. This is a proposal to bail out the government at the expense of those citizens and those regions that can least afford it. It is as self-defeating as it is unfair, because any conscious policy to retard a sector of the economy or a section of the country is bound to depress the general growth of the whole economy.
I do not want to take a lot of the time of the house to emphasize the attention that the Economic Council of Canada has devoted to those areas of Canada where economic growth has been relatively slow. The economic council has emphasized the importance of increasing expenditures in those areas in
4466	COMMONS
Suggested Economic Mismanagement such basic fields as education and transportation. This is something that I ask the minister and the government to keep in mind when they consider their future budgetary planning. Whatever possibilities there may be with regard to regional monetary policies in this country, there can be no question that there is a need for as well as a possibility of flexible fiscal policies as they relate to regions.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: It might well be disastrous to create a deliberate slowdown, through fiscal policies, in areas of slow growth. The affected areas, where such a policy applied, might take years to recover and get going again. I caution the government, even in its present difficulties, to make certain that it does not destroy the efforts which have been made in these areas which are scattered throughout Canada and to make certain that they keep moving ahead at a satisfactory rate. It would be nothing short of tragic if the forward impetus-developed, as I frankly admit, with the help of the policies of this and other governments-which had been generated within the less developed areas should be stopped by federal policies at this time, policies which were born in reaction to immediate situations, to immediate problems, that the government ought to have been able to foresee and to avoid.
[DOT] (4:40 p.m.)
On November 10 the Minister of Finance resorted to what apparently is the extraordinary practice of announcing tax increases on motions in the house. Of course, a tax increase is never welcome but it is especially unwelcome now as rising costs and prices already have eroded the budgets of private citizens. We shall judge the minister's financial proposals and deal with them when we hear them, but it is timely to remind the government, Mr. Speaker, that the private budgets and private plans of countless Canadian individuals, families and undertakings are at least as important to this country collectively as the budget and the notions of this government.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: Already inflation and unemployment have restricted the ability of private citizens to meet the commitments they have entered into and the government should be careful indeed about generating more restrictions of that kind.

DEBATES	November 20, 1967
In framing policies to deal with all these problems, in stating economic and social goals and in deciding how we are to try to achieve them, it is essential for the government to have the understanding, co-operation and support of the people generally. It is essential for it to have the co-operation, understanding and support of the organizations and mechanisms through which groups of people protect their own interests, attempt to influence the economy and obtain their own fair share, as they see it, from its progress.
I am not suggesting for a moment that the government must always have a consensus on details or even on major parts of some of the policies which it believes to be required by the economy. Certainly, sometimes governments must do unpalatable and unpopular things, unpalatable and unpopular in the short rim at least, so that the long term welfare of our people may be advanced and assured. I do not suggest that we must always have a consensus before the government is entitled to act. But as to the general objectives of government policy and as to the general objectives of social policy there must be co-operation and support and, most of all, these objectives and the means of obtaining them must be understood clearly and fully throughout the country by other governments, by labour and industry and by investors and consumers.
It is obvious that in a democracy this support and co-operation may be attained not by coercion but only by persuasion and by the persuasive force of example, leadership and consultation by the government of Canada.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: It follows, and I think this is most important, that in a democracy, in a free economy, government and government policy must be believable. This is the basis of confidence and the basis of ability to lead. The regrettable fact in Canada today is that this government is not believed.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: The Minister of Finance has talked about restraint for 18 months at least; now he talks about cut-backs. But government expenditures continue to expand and there is no noticeable effort to establish priorities among existing or projected programs. The minister knows that this is so. Not only does he know as well as I do, he knows it better than I do. The pages of our newspapers are full of quotations, one after the
November 20, 1967

other, of the minister's words which testify to the extent to which the spending proclivities of his colleagues rather than the requirements of the economy are the final determinants of fiscal policy for this government. The fiscal policies of this national government have not been decided according to the actual needs of the economy.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: They have been determined by way of a series of subsidiary and unrelated decisions on spending programs. There has been no coherent policy governing these programs. The only test at any given time has been whether the government can raise revenues by taxation to get its policies under way. Of course, the government has paid insufficient attention to the extent to which it has been building automatically escalating expenditures into the programs it has already adopted.
I wish to make one thing very clear. I am not one of those who regard government expenditure as an evil in itself-far from it. I believe that the services that government can render to modern society are increasing each year in importance and I believe they are increasingly important to the welfare of our people. It is necessary for the government to play an active role in the development of our economy in all its regions.
I think that all I have said is obvious to any person who knows my background. I accept and endorse everything that the economic council has said about the importance of increasing expenditures in the slow growth areas of this country on basic government services, if adequate rates of growth are to be achieved. It is in the interest of those regions and in the interest of the nation that expenditures on such basic services be rapidly increased, as they have been. I hope those expenditures can be increased until the services in these regions approach national standards.
In a country like Canada-in any country, in fact-at any given time there are many desirable services and projects that the government might adopt. In a healthy economy, nevertheless, expenditures must be related to economic circumstances. It is essential to the future expansion of government services that we maintain a healthy and growing economy. If one looks at the matter only from the point of view of what government services can be provided, it follows obviously that the stronger the economy, the more services will the government find it possible to implement.
Suggested Economic Mismanagement
The point to be made and the problem that parliament must face now and during the vote tomorrow night is that Canadians do not take the government seriously and do not accept as serious the declared intentions of the government to deal with the economic problems that we face. I think that this is perhaps something new in Canada. The morning after the minister made his statement earlier this month, government bond prices actually increased and interest rates actually rose somewhat. Why? Because people did not believe that the awareness indicated by the minister would be reflected in the decisions taken by his colleagues.
[DOT] (4:50 p.m.)


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I say to the house with all sincerity that if this government had the confidence of the country there would be no need to give consideration to any tax increases at this time. It should not be necessary to interject here that I cast no doubt-I think I have made this obvious-on the integrity of the minister or of anyone else. The fact is that government policy and government conduct have been so contradictory and inconsistent that nobody knows whom or what to believe any more. In these circumstances it is difficult, of course, to enlist the co-operation of labour, of industry, of investors, or of consumers or other governments in any policy of restraint or in any other policy, for that matter.
The absurdity of the government's position was demonstrated again this afternoon in the statement made by the Minister of Finance reporting on the federal-provincial conference. What could be more absurd than the government of Canada inviting the provinces to participate in bringing about a substantial increase in their expenditures while sending the Minister of Finance to tell them to be good boys and reduce their expenditures? How can the people of Canada take this sort of thing seriously? I doubt that there has been such a situation in the governmental history of our country.
This is a problem which parliament must face and a problem which must be voted on tomorrow night. The question is one of the credibility of this government. It is a matter of deciding whether the country and the country's members of parliament have confidence in the capacity of the government to provide the leadership required in these circumstances and to develop the policies necessary for sustained growth and expansion.
November 20, 1967

Suggested Economic Mismanagement
I will move an amendment because it is important that we decide this question now before we go any further. I suggest it is in the best tradition of parliament and in the best interests of this country that hon. members should, on this question of confidence, record their confidence or otherwise in the government's ability to foster economic growth and progress.
I call upon hon. members to support the amendment which I now move, seconded by the hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard):
That all the words after "that" be struck out and the following substituted therefor:
"This house regrets that the mismanagement of this government has endangered the rate of economic growth, the prospects of satisfactory levels of employment, and the ability of individual Canadians to meet their own commitments."


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: May I add that I was sorely tempted to substitute two words-"rotten management" for the word "mismanagement".


Some hon. Members:: Oh, oh.


Robert Lorne Stanfield: But I could not do that. I, for one, took to heart the urgings of the Minister of Finance to be restrained.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like first of all to join with the Leader of the Opposition (Mr. Stanfield) in expressing to the Prime Minister (Mr. Pearson) our good wishes as he departs for overseas and to say we all hope he will enjoy his stay there and that he will return in his usual good health and good humour.


Lester Bowles Pearson: May I thank the hon. gentleman, Mr. Speaker, and apologize to him for leaving to begin my voyage, consequently missing what I am sure will be a most stimulating speech.


Thomas Clement (Tommy) Douglas: While I am on this subject, Mr. Speaker, I should like to say that I think this country owes a great debt of gratitude to the Prime Minister who in the course of this centennial year has, I believe, welcomed more than 60 heads of state and has carried a burden which would be almost insupportable for most human beings. While we disagree in many instances with the Prime Minister on matters of policy I think he should go from this house knowing that he has always had and continues to have the respect and affection of members of this Chamber.


Some hon. Members:: Hear, hear.


Thomas Clement (Tommy) Douglas: I should also like to congratulate the Leader of the Opposition on the first major speech he has made since entering the House of Commons. He has set forth very clearly the state of the Canadian economy and I think no one can disprove the major thesis which arises from his analysis. At the present time the Canadian economy is experiencing a decline in its growth rate to the point where it will be something less than 3 per cent this year in terms of constant dollars. We are witnessing rising unemployment, the highest interest rates in our history and an accelerating increase in the cost of living, all of which have brought the Canadian economy into a most critical situation.
However, as I listened to the Leader of the Opposition I found myself much more impressed with his analysis than I was with his prescription for curing the ills which beset our economy. I was hoping he would set forth some of the detailed proposals which the official opposition might have for coping with the appalling conditions he described. There can be no doubt, as he said, that there must be a more civilized way of controlling inflation than by creating unemployment. What we need to know is: What is the more civilized way of controlling inflation? It is perfectly true that we need to set for ourselves clearcut objectives and that we need a government capable of providing leadership. What we want to know is, what are those objectives and how is it proposed that they shall be attained?
[DOT] (5:00 p.m.)
The members of the New Democratic party have been saying in this house for a considerable period of time that in our opinion our economy is badly mismanaged because the government has been following a blind faith in the market, that they have refused to give direction, control and efficient management to the economy, that much of the economic dislocation which faces Canada at the present time is due in the main, first, to a maldistribution of income over a long period of time and, second, to a misallocation of our resources, human, financial and material. From time to time we have set forth several proposals which I want to reiterate briefly before going on to the main subject with which I want to deal.
We have suggested first of all the creation of a Canadian investment board to set priorities for both public and private investment so that scarce capital can be allocated where it is most needed for the benefit of all Canadians.
November 20. 1967	COMMONS DEBATES
We believe low cost housing must be a major priority of Canadian investment policy until the shelter crisis is ended. We contend that if capital is in short supply then this country must make a deliberate choice not only with respect to the capital expenditures of governments at all levels but also with respect to capital investments in the private sector.
We must decide whether it is more important to build skyscraper office buildings, supermarkets, hotels and motels than it is to build schools, hospitals more housing and provide more municipal services. We have to decide, if capital is scarce, what items can be postponed without incurring great human suffering and what items must be proceeded with if Canadians in all parts of Canada are to enjoy a good life.
The second thing we have suggested is that Canada should return to a floating exchange rate and a control of capital movements across borders as realistic steps to meet our balance of payments difficulties and to gain control of our own economy. The other day on a television program one of the ministers said he had strong objections to control over any movement either of capital or goods across borders. Yet I notice that in Saturday's press Alexander Trowbridge, secretary of commerce in the United States government, has issued a guide line asking American companies to reduce by one fifth their foreign investments, not only from outgoing capital but from retained earnings of their foreign affiliates. This is certainly a move to control the flow of capital, and if a great, wealthy country like the United States has to direct its capital flow, then certainly the Canadian government should be giving consideration to the matter.
The third thing we have suggested is that Canada should set up a prices review board in order to carry out a frontal attack on the rising cost of living so that government action may be effective in holding the line on the price of basic commodities. Much has been said about inflation, but economists are now telling us we are experiencing cost-pull inflation rather than demand-push inflation, that a good deal of the rise in the cost of living over the past three, four or five years has been due primarily to rising prices and increasing corporation profits, and that the rising cost of living and rising profits were the stimulus that led to the increased demand for higher wages. Certainly the only way we are going to find out whether or not this is true is by setting up a prices review board.
Suggested Economic Mismanagement
In our opinion the rising cost of living has been largely due to the fact that in a very considerable area of our economy we have administered prices, prices that are set by a comparatively small number of corporations in a given industry which are able to manipulate supply and demand, set prices and in many cases to set prices that are not realistically related to the costs involved. We believe the Canadian people would support the idea of a prices review board and that the provincial governments would be prepared to support the federal government if it later found it necessary to ask for concurrent legislation to deal with exorbitant profiteering and unjustified price increases.
The fourth thing we have suggested is the immediate implementation of those recommendations of the Carter commission which call for the taxation of resources-based industries, insurance and other financial institutions, and speculative capital gains, all of which escape their fair share of our common tax burden. We believe that by this means the government can solve some of its financial problems without an across the board tax increase which in our opinion would be disastrous and could tip the scales into an economic recession.
The fifth thing we believe is that the government must set for itself, and seek to persuade the provincial governments and the private sector of the economy to adopt a scale of priorities with respect to current expenditures and capital expenditures.
The Leader of the Opposition spoke, as many Conservative speakers in other debates have spoken, of the need for restraint. I always wait to hear these speakers tell us what things they want to restrain, what expenditures they want to curtail. It is not enough to tell the government, "We think you are spending money like a drunken sailor," to say to the government, "You must restrain your proclivities for spending the taxpayers' money," unless we are prepared to say what things should be reduced and what things should have top priority. I hope that in the course of this debate both the official opposition and the government will give us some idea as to what things they think have sufficient priority that they ought not to be curtailed and what things are of insufficient priority that we could afford to reduce expenditures on them either permanently or temporarily.
4470	COMMONS
Suggested Economic Mismanagement
I would be interested in knowing what the position of the official opposition and the government is with respect to proceeding with medicare. Is it to have top priority?
So far as our party is concerned I can state very briefly our ideas with respect to priorities. We think the top priority for both public and private expenditures ought to be anything that will increase productivity. There can be no better cure for inflation than increasing productivity, and a country whose economic growth rate has dropped to less than 3 per cent per annum is a country that is in economic difficulties. That means directing private and public capital into the development of new industries, into the expansion of existing industries, into geological surveys, into technological research, into anything that will help to increase Canada's production of wealth and increase the number of jobs that are available to Canadians.
[DOT] (5:10 p.m.)
If productivity should be our number one priority, then of course education, particularly technical education and vocational training, must have top priority. Housing must also have top priority. We can never get productivity from workers unless they have decent homes in which to live. I maintain that health services and medicare are also part of the requirements for productivity. Unless people have good health the man-days lost because of sickness can be a very serious economic drain on our economy. Therefore, Mr. Speaker, in this party we would place medicare on the list of things which ought not to be curtailed. As a matter of fact we consider medicare to be one of the items which should and must be proceeded with.
I should like to take some time to deal with the statement made by the Minister of Finance (Mr. Sharp) over the week end in which he told the provincial governments and the people of Canada that medicare would cost them $1 billion. I do not know where the Minister of Finance got this figure.
I strongly suspect he was using it as a Hal-low-e'en mask to frighten the people of Canada as though they were little children saying "trick or treat". Believe me, they have had more tricks than treats from this government. Let us look at this figure of $1 billion as the estimated cost of medicare. That works out roughly to $50 per capita. I ask hon. members to look at this in an effort to see how unrealistic it is.
Let me first of all take the example of the only province in Canada where medicare has

DEBATES	November 20, 1967
been in operation since July 1, 1962. In the province of Saskatchewan, where they have been operating a plan now for over five years, the last annual report of the Saskatchewan Medical Care Insurance Commission gives the per capita cost as $25.22. That figure is up 4.5 per cent from the year before. To be perfectly fair I should point out that this does not include the care and treatment of persons suffering from cancer, because when medicare was introduced in Saskatchewan the government was already providing cancer services and felt that it would be unfair to charge this to those insured and would rather pay it out of general revenue. So to this sum must be added the cost of cancer services which is roughly $2 per capita per year. Therefore if we add that $2 the per capita cost of medicare in Saskatchewan for the year 1966 would be $27.22. That figure of $27.22, Mr. Speaker, is a long way from $50 per capita. The increase from the year before was 4.5 per cent. That was the highest increase. Prior to that the increase was only 2.4 per cent per year. If we add a 4.5 per cent increase or even allow for a 10 per cent increase in the cost, by 1969 it will still be around $30 per capita.
Therefore I ask, what grounds has the Minister of Finance for assuming that a service which can be provided in Saskatchewan for less than $30 per capita will cost $50 per capita across Canada? I should like to point out first that the latest available figures show that the income per doctor in Saskatchewan is more than $3,000 a year higher than the Canadian average, that they are the highest paid doctors in Canada per capita and that the ratio of doctors to population is above the national average. Therefore, what ground is there for assuming that the cost across Canada will be substantially higher than the cost in the province of Saskatchewan? Even if it should be somewhat higher, $32, $34, or $35 per capita, it would still be a long way from the $50 which the Minister of Finance has been talking about.
Let us for a moment look at the estimates of cost which were given to the house by the Minister of National Health and Welfare (Mr. MacEachen) in 1966 as reported on pages 7548 and 7549 of Hansard. At that time the minister said:
If such a program were to be provided in all provinces next year, it is estimated that the cost to the federal treasury for a full year would be
$340 million.
November 20, 1967	COMMONS
The total cost for all of Canada would be $680 million. He went on to say:
Thus, by redistributing the estimated $600 million and adding another $80 million, all residents of all provinces of Canada will have physicians' services available to them.
The Minister of National Health and Welfare when speaking in the house at that time told us that in the year 1967 the Canadian people would be spending $600 million for medical services. He added another $80 million for the medicare plan to cover those who are not being covered at the present time. So his estimate was $680 million. If we assume that the cost of medicare will go up at the same rate it has in Saskatchewan which is 4.5 per cent or, for the sake of round figures,
5 per cent, then even by 1969 the cost will be considerably less than $800 million. If we double the rate of increase and assume that it will go up by 10 per cent per year and assume the figure is $680 million in 1967, in
1968 the figure will be $748 million and in
1969 it will be $822 million. This is a very long way from $1 billion.
The statement made by the Minister of Finance to the provincial finance ministers was, it seems to me, a deliberate-I almost said dishonest-attempt to convince them and the country that medicare would be inflationary. It is rather significant that the minister who made this statement, according to the press, did not know what the federal government is spending now on medical services and what the people of Canada are paying for medical services. Here is what the Globe and Mail of last Saturday had to say:
When newsmen questioned him about the figure, he said he did not know how much the federal government would save by substituting medicare for medical services it already pays for. Nor did he know what Canadians now pay for health services under private and provincial plans.


Mr. Churchill:: Which minister was so ignorant?
[DOT] (5:20 p.m.)


Thomas Clement (Tommy) Douglas: According to the press report it was the Minister of Finance. The Minister of Finance ought to be aware of the fact that to describe medicare as being inflationary is fallacious and inaccurate. The Minister of National Health and Welfare, from whose statement I just quoted, told the house that the Canadian people in 1967 would spend $600 million for physicians' services, that medicare would cost $680 million and that only $80 million of that would be new money. In other words, out of the $680 million, which is the estimate given to us by the
DEBATES	4471
Suggested Economic Mismanagement Minister of National Health and Welfare, $600 million represents a transfer of payments from the private sector to the public sector. This means that the $600 million which would be paid out of federal and provincial treasuries is now being paid by the people of Canada, by those who are sick or by the families of those who are sick. That $600 million is not a new expenditure. It is not inflationary. It is a transfer from the people who are unfortunate enough to be ill to a tax payment levied upon all the people of Canada on the basis of ability to pay.
Therefore, for the Minister of Finance or anyone else to give the impression that medicare is a great, inflationary bogeyman and must be postponed is misleading and dangerous. I suggest it is an attempt to frighten the Canadian people into accepting an imminent announcement by the government that they are going to postpone medicare for another year. I take note of the fact that the provincial treasurer of Ontario, Mr. MacNaughton, said they would like to have medicare postponed forever, and there is a very serious danger that if the government postpones it now it will be postponed indefinitely.
The Minister of Finance has a responsibility to tell the Canadian people in the course of this debate in what regard the economy and the financial situation of this country has changed in the past 12 months so as to make it necessary to postpone medicare on July 1, 1968 when only a year ago he was assuring us there would be no difficulty at all about proceeding with the program. Let me refer the Minister of Finance to what he said as recorded on pages 10608 and 10609 in Hansard for December 1, 1966. This is what he said at that time:
The hon. member for Ontario asked me to explain how we could fix the date of July 1, 1968 when we could not fix the date of July 1, 1967. The answer is that now we have firmly determined that on July 1, 1968 we will proceed with medicare, and we have accommodated all our other decisions to that point.
The hon. member for Ontario then said:
Even though the situation might be exactly the same in 1968 as it is now?
The minister then replied:
No. Now we will accommodate our other programs, if necessary, to the introduction of medicare. Now this has first priority.
The Minister of Finance made it even more clear, according to a Toronto Star report on
November 20, 1967

Suggested Economic Mismanagement the Liberal conference held a year ago, when he said:
-I would hope that the conference would take note of the government's determination to meet our medicare commitment by July 1, 1968. On this there can be no compromise.
That is pretty specific, and there ought to be no compromise. There are no grounds whatsoever for the fallacious argument of inflationary pressures as a reason for postponing medicare. On the basis of priority surely the health of the Canadian people ought to have a top claim upon government programs and expenditure.
Let me say that in the opinion of members of this party Canada can afford medicare and can afford to start it on July 1, 1968. I do not intend first to tell the government to tighten its belt and stop spending money without indicating where expenditures could be cut. I suggest there are expenditures which the government could curtail and which would pay all the federal government's share of the medicare program without imposing new taxes.


An hon. Member:: Let us have a list.


Thomas Clement (Tommy) Douglas: First of all, we keep a brigade and air force squadrons in Europe today which may have had a military role to play 20 years ago but are being kept there today largely for political purposes. Some 20 years ago there was a danger of military aggression by the Soviet union and Germany was prostrate and militarily weak. Those conditions no longer obtain. The Canadian government could withdraw these military forces from Europe. It could also discontinue some of the contributions we are making to NORAD which are no longer relevant in light of the technological changes that have taken place in recent years. On those two programs alone the government could save $300 million. It could postpone the refitting of the Bonaventure at a saving of $11,800,000. It could postpone the construction of two support ships which are to cost $49,100,000. It could drop the purchase of 115 CF-5 aircraft, which many consider to be obsolete, at a saving of $215 million. I have already suggested greater savings than it would cost the federal government to carry out medicare in the coming year.
Let me also suggest to the government that it could find tax revenues which it has not even begun to tap at present. We in this party are opposed to an across the board tax increase, first of all because it would impose a burden upon millions of Canadians in the


middle and lower income groups whose standard of living in many cases has already been reduced because of rising costs of living and, second, because this could be the final tipping of the scale which might precipitate an economic recession in this country. If the government requires more revenue it could implement some of the recommendations of the Carter commission report. That commission pointed out very clearly that the middle and lower income groups in Canada have for decades been carrying an unduly heavy share of the tax burden. It also pointed out that for decades in Canada we have had freeloaders who have been getting a free ride and who have by special legislation and special concession, including depletion allowances and depreciation allowances, and because of the absence of a capital gains tax, not been contributing their fair share toward paying for the services rendered by the government of Canada. It has also pointed out that on the basis of 1964 tax returns insurance companies should have paid another $75 million had they been on the same tax base as other corporations. It points out that the extraction industries, the mining and petroleum industries, managed to avoid payment of $152 million that would have been paid by manufacturing companies or other business enterprises.
[DOT] (5:30 p.m.)
It points out that by restructuring the Canadian tax system persons with incomes of $5,000 a year or less could have a reduction of 10 per cent in their income tax payments, and those earning between $5,000 and $10,000 a year could have a reduction of 7 per cent. It points out that corporations would be required to pay an additional $532 million, $271 million of which would come from foreign investments.
If the government is going to tell us that it needs more money, and the Minister of Finance told us on motions the other day that it is his intention to raise taxes, I say that before any thought is given to an across the board increase in personal income tax the minister ought to look at some of the freeloaders who have not been paying their share, according to the Carter commission report, and who should now be called upon to carry their fair share of the tax burden of the Canadian people.


Some hon. Members:: Hear, hear.
November 20, 1967


Thomas Clement (Tommy) Douglas: Therefore, Mr. Speaker, there can be no possible excuse for this government postponing the implementation of medicare on July 1, 1968. I have pointed out, first, that the cost, on the very best estimate of the Department of National Health and Welfare, is 20 per cent below what the Minister of Finance is talking about. I have pointed out that the implementation of medicare is not inflationary except for a very small part, some 10 per cent, of the total cost. I have pointed out that the government can afford medicare either by making curtailments in other expenditures or by placing some tax burden on those who up to now have been getting a free ride in the Canadian economy.
In my opinion the statements made by the Minister of Finance to the federal-provincial conference last week and his statements to the public constitute a blatant attempt to get out of implementing medicare, largely by the people who never wanted medicare in the first place. Some of the provincial governments have never wanted medicare. Some of my hon. friends in the official opposition were so lukewarm to medicare that one often suspected they did not want it, and certainly many members on the government side have been mildly hostile to medicare.


Stanley Howard Knowles: They have been for it ever since 1919.


Thomas Clement (Tommy) Douglas: Yes, since 1919 they have been for medicare, but we did not get it. When at last the pressure of public opinion compelled them to put it on the statute books they said they would implement it, and they are now trying to bring up the bogeyman of inflation in order to frighten the Canadian people into accepting a further postponement of medicare which could be an indefinite one.


Gordon Minto Churchill: And blame the provinces.


Thomas Clement (Tommy) Douglas: And, of course, blame the provinces or blame inflation, which is even more nebulous. It is an interesting thing that when the economy is booming the government says: This is not the time to put in medicare; it is inflationary. When the business cycle turns and we move into a period of retrenchment they say: We cannot afford medicare. I assume that somewhere between the boom and the bust there must be a 30-seoond period when it is right to institute medicare.


Some hon. Members:: Oh, oh.


Thomas Clement (Tommy) Douglas: But nobody has ever been able to find out just when this 30-second
Suggested Economic Mismanagement period is. Therefore, Mr. Speaker, I wish to move an amendment to the amendment moved by the Leader of the Opposition, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), as follows:
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words:
"and this house urges the government to take effective steps to meet this situation by the creation of a Canada investment board to set priorities for both public and private investment, by a return to a floating exchange rate and the control of capital movements across our borders, by the immediate implementation of those recommendations of the Carter commission which call for taxing gains now escaping taxation, and by making it crystal clear that medicare will commence on July 1, 1968."


Mr. Macdonald (Rosedale):: Mr. Speaker, before the hon. member resumes his seat I wonder whether I could ask him a question. I had the good fortune of hearing him last night on an open-line program and I was envious of his careful footwork. There was one thing that puzzled me then, and I was puzzled by his speech today. Could he tell us what sanctions he would propose for the Canada investment board in respect of any decision it made on priorities? How would the hon. member enforce that decision in respect of provincial governments, private individuals or corporations?


Thomas Clement (Tommy) Douglas: Mr. Speaker, I think the hon. member must know that if you set up a Canadian investment board, to which application would be made when large sums of money were required from the capital market, the board would have certain priorities. If it had to decide upon the floating of a $25 million loan for the building of another supermarket in a community where there were already four supermarkets or applying the $25 million for a housing project or a sewer and water system in a suburban community, the board would have to make this decision in the light of which projects could be postponed. I would think that if it were properly directed by the government it would decide that the sewer and water system or the housing program would have top priority over something which, while very desirable, was postponable. I would think this principle ought to apply to provincial governments, municipalities and the federal government itself.


Donald Stovel Macdonald: How would you enforce that decision? By what sanctions?
November 20, 1967

Suggested Economic Mismanagement


Thomas Clement (Tommy) Douglas: By giving to the Canadian investment board the right of determining what access there would be both to Canadian capital markets and to overseas capital markets.


Mitchell William Sharp: Are you going to control the provinces?


Mr. Malheson:: He is not answering. He does not want to answer.


Paul Theodore Hellyer: They have that system in some other countries.


Thomas Clement (Tommy) Douglas: The minister of defence-I mean the Minister of Transport; I had forgotten about his demotion-said that they have this system in some other countries, and they have.


Paul Theodore Hellyer: Behind the iron curtain.


Thomas Clement (Tommy) Douglas: If my hon. friend will take the trouble to study the Swedish economy, where they have a very great degree of stability, he will find that they control not only access to the capital markets but a very direct control of the percentage of retained corporate earnings which can be reinvested by a company.


Paul Theodore Hellyer: They do it that way behind the iron curtain.
[DOT] (5:40 p.m.)


Mr. Deputy Speaker:: Perhaps the house will allow the Chair a few moments to examine carefully the amendment to the amendment moved by the hon. member for Burnaby-Coquitlam.


Howard Earl Johnston: Mr. Speaker, I listened to this afternoon's debate, and particularly to the address of the Leader of the Opposition (Mr. Stanfield), with some nostalgia. My memory went back to the time when I was in London in the spring of 1962, having spent a year studying there with the intention of spending another year away from home. I had left in a bank in Canada the funds to pay for the second year of travel, intending, when the end of the study year came, to withdraw these funds and to change them into British pounds and American dollars to pay for the trip the rest of the way around the world. One morning I opened a newspaper to discover that the Canadian dollar had been devalued in order to cope with the financial crisis that had come about through what I had assumed then, and about which I have

not had reason to change my mind, was the mismanagement of the then Conservative administration in Canada. So it is not surprising that on a day when we are all contemplating the significance of another devaluation, this time of the British pound, even the new Leader of the Opposition should be impatient to get another chance at the control of the Canadian dollar.


Mitchell William Sharp: I hope we can disappoint them again.


Howard Earl Johnston: I made it home just six days before the election in 1963. One might, I suppose, call my presence here a sequel to the story that I told.
However, I became more optimistic when the Leader of the Opposition spent some time discussing the rules of parliament and expressed a hope that we would see an end to repetitious debate. It struck me that these words might have better been said in caucus than on the floor of the house, and I regretted that he should have rushed into a motion of want of confidence because if his hopes are borne out tomorrow night we will no longer have the opportunity of seeing what he can do about repetition in debate. If in the next six months or so he were able to end that unhappy feature of this institution, I am sure we would have much greater confidence in his ability to solve the financial, economic and other problems of our nation.
My purpose this afternoon is not in any way to bail out the government from the crisis they have brought upon themselves. We in the Social Credit party have been saying for a long time that all is not well with the present monetary system used in this country and around the world. Every time we raise our voices to question the system, we are told that we are the ones who are foolish and who have strange ideas about money, and that all we have to do is sit back and let the system work and everything will be fine. Yet we continue to go from one financial crisis to another no matter how our knowledge of technology and science advances. As a result we feel that we have not been so far wrong through these years.
We have criticized the government for a long time for failing to make available to the public service capital at low rates of interest through the Bank of Canada. Had some of the measures advocated years ago by Social Credit been put into effect, we would not be in such a desperate need for schools, hospitals, sewers and pollution control on which
November 20, 1967	COMMONS
all levels of the government are now compelled to spend enormous sums of money.
Because the effort was not made earlier and because financing was not directed in the proper places at that time, we are faced now with having to tackle the same problems which we cannot escape in the midst of a financial crisis. We have been concerned through the years about the failure of all administrations at the federal level to tackle the problems of reducing the national debt in order that debt financing should not continue to use up such an enormous portion of the tax revenue that is available to the government each year. While the government does use the Bank of Canada to help to reduce annually service charges on the national debt, in time of prosperity it has not taken the measures that would have used that prosperity to cut back on that drag on federal budgets.
We have said over and over again that taxation has been placed on the wrong areas entirely. Here I feel compelled to speak of the 11 per cent sales tax on construction materials which was ostensibly imposed to raise revenue and, I suppose, to slow down construction, although why one would want to slow down construction at any time in recent years in Canada I do not know. Certainly the housing industry is and has been convinced from the time the tax was imposed that it was a mistake. The constriction of the means of production for the sale of Canadian products abroad was another fact proving that the 11 per cent sales tax on construction materials was a mistake.
There are some things that can be done to restore the confidence of Canadians in the fiscal and monetary policies of the government. Certainly we need urgently a clear statement of the intention of the government with regard to the Carter report, and I do not think the statement we need is quite the one suggested by the leader of the New Democratic party in his sub-amendment, although he may find cause in it to hope for the taxation of corporations and the taxation of some whom he calls freeloaders. Nevertheless, the effect of this report has been to shake the confidence of the Canadian public in the government and in the financial and fiscal institutions of that government.
[DOT] (5:50 p.m.)
Corporations can hire economists who can prepare briefs to send to the Minister of Finance (Mr. Sharp) in which they express concern about the recommendations in the Carter report. As hon. members know, these
DEBATES	4475
Suggested Economic Mismanagement have rained down on our desks over the past few months in an ever increasing flood. However, the individual can only read the newspapers. He can only obtain from the report the suggestion that the individual no longer mattered to the authors of the report. They wrote the report in strange language that refers to a tax unit with one child or a tax unit with two children. There is certainly little in the report to inspire the confidence of the general public when they learn that the commissioners believe that the giving of a gift is an exercise in economic power. We are moving again into the Christmas season when gift giving is habitual which perhaps, as the commissioners would put it, is an exercise in economic power. I am sure most of the people giving gifts feel they do so for other reasons. So we need a statement of intention from the government, not just to calm the fears of the corporations, the mining industry or the oil exploration industry but also to calm the fears of the average Canadian who finds himself written up in that report as some sort of cog in the machinery that must always remain equal to every other cog in the great fiscal machine.
I was disappointed in the address of the Leader of the Opposition because he did not look beyond the borders of Canada for factors involving the crisis in confidence in the government and its financial policies. He did not look to external affairs where we know that the government has lent its good name to policies which are adventures that would tax the resources of this country and, in fact, of all the United Nations. The government has failed to point up the folly of the move to take over southwest Africa, for example, on a date that coincides pretty closely with the introduction of medicare. Anyone who knows the activities of this government with regard to the trade sanctions against Rhodesia must question their wisdom in embarking on or assisting in policies that are contributing nothing at all to stability in today's troubled world.
When we come to medicare we do come to another field. We have heard a great deal about that this afternoon. Again the leader of the New Democratic party assures us that this money is being spent now and that it is not going to come as an extra payment from anybody because it is already being spent each year. I assure him there is a powerful psychological difference between money that is spent by individuals and that which is discovered to be an increase in one's taxes. We all live in the confidence of continued
4476	COMMONS
Suggested Economic Mismanagement good health, and although this is not always borne out it is still the way people carry on from day to day, looking optimistically to the future. When the bill for medicare is spelled out in the form of taxation, then it is truly significant to the taxpayers of the country.
We know from the experience of other countries that this is not a static bill. These costs rise in surprising ways beyond the intention of those who originally implement the measures. This brings us back to the example of Britain and the crisis in confidence in their economy and in the wisdom of their government that the people are facing now. We might ask, what is it that has brought that great country to this point? We know that one of the causes is the fact that the bill for the welfare state has come in. They felt they had the resources to embark on this adventure and are finding now that, along with other factors, this bill has brought them to the point they find themselves today.


Stanley Howard Knowles: Six o'clock.


Mitchell William Sharp: Is it six o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Is it the wish of the house to call it six o'clock at this time?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be raised at the time of adjournment tonight are as follows: the hon. member for Winnipeg North Centre (Mr. Knowles), Public Works -Ottawa-height of proposed national defence headquarters building; the hon. member for York-Humber (Mr. Cowan), Health and Welfare-Quebec-application of federal funds for hospital purposes; the hon. member for Halifax (Mr. McCleave), Drugs -complaints respecting vitamin contents of certain preparations.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
[Mr. Johnston.)
DEBATES	November 20, 1967
[Stage Direction]
The house resumed consideration of the motion of Mr. Benson for committee of supply, and the amendment thereto of Mr. Stanfield, and the amendment to the amendment of Mr. Douglas.
Mr. Deputy Speaker:: Order, please. If hon.
members have no comment about the subamendment moved by the hon. member for Burnaby-Coquitlam (Mr. Douglas) the Chair is prepared to rule on the validity of that subamendment. Shall I proceed?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, how may we have an indication of whether it is necessary to argue?


J.-H.-Théogène Ricard: Wait a minute, and you will find out.


Stanley Howard Knowles: That might be too late, but if anyone had raised a point of order about the subamendment, we could deal with it. In this instance, Mr. Speaker, in case there is any doubt about it, perhaps I could call your attention to citations 201 and 202 of Beau-chesne's Fourth Edition, citation 201 of which reads in part:
The object of an amendment may be to effect such an alteration in a question as will obtain the support of those who, without such alteration, must either vote against it or abstain from voting thereon, or to present to the house an alternative proposition either wholly or partially opposed to the original question.
We do not regard the latter part of that sentence as having any bearing on the matter, but I suggest that the first part of the sentence does have a bearing, namely that the amendment proposed by my leader seeks to alter the original amendment in such a way as to make it more acceptable to us.
Particularly relevant is subparagraph 3 of citation 202 which says in part:
Since the purpose of a subamendment is to alter the amendment, it should not enlarge upon the scope of the amendment but it should deal with matters that are not covered by the amendment; ...
I contend that the subamendment is directly relevant to the amendment and does what the citation says it ought to do. It deals with matters that are not covered in the amendment itself. The amendment proposed by the
November 20, 19S7	COMMONS
Leader of the Opposition (Mr. Stanfield) reads as follows:
This house regrets that the mismanagement of this government has endangered the rate of economic growth, the prospects of satisfactory levels of employment, and the ability of individual Canadians to meet their own commitments.
Our contention is that the amendment is all right, as far as it goes, but it ends up in the air. It says what is wrong, but it does not say what is to be done about the unfortunate situation. We propose to complete the thought, as it were, by adding to that sentence our suggestion of what should be done to meet the unfortunate state of affairs described by the Leader of the Opposition. Our subamendment is to the following effect:
-and this house urges the government to take effective steps to meet this situation by the creation of a Canada Investment Board to set priorities for both public and private investment, by a return to a floating exchange rate and the control of capital movements across our borders, by the immediate implementation of those recommendations of the Carter Commission which call for taxing gains now escaping taxation, and by making it crystal clear that medicare will commence on July 1, 1968.
We contend that the first two or three of those suggestions are answers to the endangered rate of economic growth and the prospects of satisfactory levels of employment. We contend that the last suggestions, "making it crystal clear that medicare will commence on July 1, 1968," is at least one answer to the difficulty that individual Canadians are having in meeting their commitments. It is our belief therefore that the subamendment completes the very good sentence that the Leader of the Opposition presented in his amendment. It was fine as far as it went, but it ended up in the air. We have brought it down to earth with precise suggestions about what should be done about the unfortunate state of affairs described in the amendment.


Robert Lorne Stanfield: That is gilding the lily.


Mr. Deputy Speaker:: Order, please. I ought to point out to the house that the Chair is intervening in this regard because of the provisions of standing order 50 which reads in part:
Whenever Mr. Speaker is of the opinion that a motion offered to the house Is contrary to the rules and privileges of parliament, he shall apprise the house thereof Immediately.
In this instance the Chair is not saying that the subamendment is out of order. The
DEBATES	4477
Suggested Economic Mismanagement Chair, however, wishes to take the opportunity of saying that there is doubt about whether this type of subamendment ought to be accepted.
When the subamendment was moved by the hon. member for Burnaby-Coquitlam, there was concern about whether it was in the proper form of a subamendment, and whether it could be moved at that time. There has been an opportunity during the dinner hour to discuss this form of amendment. May I be bold enough to suggest to hon. members that perhaps subamendments ought to be moved in more clearcut form than the one in which this subamendment is offered. The question is this: Is this a real subamendment? The Chair is doubtful, and for that reason there was delay, or caution, in ruling whether the subamendment was acceptable.
The Chair is of the opinion that not only must there be relevancy in content, but also in form. Certainly there was doubt in my mind whether the subamendment moved by the hon. member for Burnaby-Coquitlam was relevant, in form, to the form of the amendment moved by the Leader of the Opposition. Again, looking over the subamendment as presented to the house, the Chair is of the opinion that the subamendment consists of four substantive motions. Whether this type of amendment, consisting of substantive motions, can be considered a subamendment is a matter of opinion.
[DOT] (8:10 p.m.)
The Chair has some doubt about it, and this doubt exists, but bearing in mind that similar subamendments have been accepted by the Chair on previous occasions, I intend to allow the subamendment. However, the Chair would point out that there is need for some caution when considering whether or not such subamendments should be proposed, or accepted.


Paul Joseph James Martin: May I ask Your Honour whether in the consideration which I know you have given to this matter it has been fully appreciated not only that the subamendment introduces a proposal which is not fully consistent with the form of the amendment, but that likewise-


Mr. Deputy Speaker:: Order, please. The Chair has made a ruling in this regard, as I think the minister will recognize. It has been made carefully after due consideration and I hope the house will accept it.
November 20, 1967

Suggested Economic Mismanagement


Mitchell William Sharp: Mr. Speaker, I consider it a singular privilege to be replying to the maiden speech of the Leader of the Opposition (Mr. Stanfield) and I should like to add my congratulations to those of my leader, and others who have spoken, on his election to the leadership of his party and on his election to this house. We have all been waiting anxiously for the hon. gentleman and we are very happy to see him here, now.
As I said, this was the hon. gentleman's maiden speech in this house and I thought, as I listened to it, that it was a singularly timid maiden. I though it was curious that he should be so timid. After all, he has had some experience in another chamber. However, this is an occasion, after all, and I should like to congratulate the hon. gentleman on his maiden speech. We have already heard the contributions of two former provincial premiers to this debate-the former premier of Nova Scotia and the former premier of Saskatchewan. We listened carefully to both of them today and I say to the Leader of the Opposition that I hope he has just as long an experience as the leader of a party in opposition as the hon. gentleman who spoke after him.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: I do not intend to say very much about the speech made by the leader of the New Democratic party (Mr. Douglas) because essentially it was the same speech as I have listened to on many other occasions. I gained very little that was fresh by the way of ideas.


Mr. Mackasey:: He first gave that one in 1934.


Mitchell William Sharp: I was about to say that perhaps he did, in his speech and in the doubtful subamendment he made at the end, indicate somewhat more clearly than he ever did before how truly socialist the N.D.P. remains.
I know the party is making valiant efforts to move toward the Liberal position in the centre of the road, but sometimes they turn back; they have their little moments when they remember their original faith, and there must be some members of the party who feel it would be nice to be pure again, and these must have felt great satisfaction when they saw included in this amendment a proposal for the creation of a Canada investment board which would tell the provinces how much they could spend, how much they could borrow-because that is much the
[Mr. Deputy Speaker.)
same thing-tell private industry it could only raise money for certain purposes, and so on.
I sometimes wonder, when I listen to such talk about having control over the private sector as well as the public sector, whether it does not really mean that the hon. gentleman's party would like to limit competition -to ensure that one of their friends would have an opportunity of building a shop somewhere and that competition in that area would be limited.


Some hon. Members:: Oh, oh.


Mitchell William Sharp: These are possible interpretations, and they indicate where this party which pretends to occupy the centre of the road is really leading; it is a party which is really interested in complete control on the socialist model, no matter what its pretensions may be.
I turn now to the speech made by the Leader of the Opposition. I was listening to the hon. gentleman speaking today as he was talking about the unemployment which unfortunately still exists in the province of which he was premier. I thought back to the years between 1957 and 1963 when he was still the premier of that province, and I wondered whether he was making the same protests then-whether he was standing up and criticizing the then prime minister of Canada for permitting what was then the highest rate of unemployment ever seen in that part of the world.
I imagine that today he might have pointed to the contrast-there is, unfortunately, higher employment in the maritimes than any of us would like to see-but that a tremendous improvement had taken place, because of his own administration, if you like; with the combination of a good Liberal administration in Ottawa and the administration in Nova Scotia a great change had come about in that province. When a government of his own persuasion was sitting on this side of the house, there was not the same degree of co-operation.
The hon. gentleman made a serious motion of want of confidence in the government by amending the supply motion. This, as he said, is the traditional way in which the opposition expresses grievances and asks for redress. As I was listening to him, I thought back to the statement which the Leader of the Opposition made just before he came into this house, when he said something to the effect that it was the patriotic duty of Canadians to
November 20, 1967

topple this government. As I listened to the speech of the Leader of the Opposition it occurred to me he would have to make a far more cogent and far more stirring appeal before he could hope to topple this government and replace it by himself and his assorted followers.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: As far as I could judge, listening to the speech, it was a stirring call for caution. I suggest the Canadian people will take a great deal more convincing before they are ready to heed his advice. I am sure that all of us, both in this house and in the country, will be waiting to see what is going to happen-waiting for a clear indication of the kind of government which the hon. gentleman would provide if he were given the opportunity to do so. Until he gives such an indication I suggest he make no more stirring calls to the patriotic duty of the Canadian people.
[DOT] (8:20 p.m.)
The speech that the Leader of the Opposition delivered was a very well thought out speech, if I had any criticism of it, it was that it inclined to vagueness. It did not have very many specifics in it, and I suggest that the country is not going to place its confidence in his party until it shows that it has more by way of policy to offer this country. At the present time it seems to be barren of policies but full of good intentions.
I would suggest to you, Mr. Speaker, that the policies of this government, which have been criticized so strongly in the amendment, are policies that have in fact brought Canada to the highest level of its prosperity in the whole history of this country, a country that has, and I hope will continue to have, an enviable reputation among the countries of the world. Let me cite as evidence of this, not any member on this side of the house but someone that the Leader of the Opposition has quoted and who has been quoted by many hon. members opposite, the governor of the Bank of Canada. Let me read from the speech, often quoted in this house, that he made in Winnipeg on November 1 to the Canadian Club. Let me read just what the governor said. It may be recalled that the governor, in the course of that speech, had some advice to give the government, which we have adopted; but let me read what he said about Canada:
Our real output has increased by over 40 per cent and we have greatly strengthened the economic foundations of the country. We have added

Suggested Economic Mismanagement greatly to our manufacturing capacity and demonstrated our ability to sell more manufactured goods in world markets. We have produced some large grain crops and have had, until recently, unusually favourable markets in which to sell them. We have continued to seek out and develop a wide variety of forest and mineral and power resources. We have added significantly to our infrastructure in the form of roads and other means of transportation. We have provided greatly increased facilities for general and technical education. And at the same time as we have done all these things we have raised our standard of living rapidly:	personal consumption per head
has risen by nearly a quarter since the beginning of this decade.
-Our basic problem is how to cope with prosperity and add to high levels of output already attained: our present difficulties do not arise out of any basic economic weakness or shortage of resources.
This is the view of a man who has been quoted on all sides of the house for the things he has said in advice to this government, and to this parliament and to the country. This is the view of the governor about the tremendous accomplishments of this country during the period that we have been in office, and for a little bit when the previous government was in office. But when the Leader of the Opposition says, "This house regrets that the mismanagement of this government has endangered the rate of economic growth," what he is talking about is a rate of economic growth that has never been surpassed in our history, and seldom been surpassed anywhere else.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: Now, Mr. Speaker, we have a problem and it is a very serious problem, and I have been the one in this country who has recognized this problem more quickly than the Leader of the Opposition, and more quickly than anybody else in this house. It is my responsibility to do so. But let me say, Mr. Speaker, on this point, because this is a question that has been raised and I am sure will be raised many times about my budget in the spring, when it has been suggested that somehow or other I miscalculated or that I brought down a budget that was inappropriate to the circumstances of the time. I would like to cite as an authority one that will appeal to my hon. friend, the Leader of the Opposition, and that will certainly appeal to many of his supporters. It is one that is often cited, namely the government of Ontario.
4480	COMMONS
Suggested Economic Mismanagement
Let me read from this year's budget speech given by the provincial treasurer of Ontario. This is what he said:
The expenditure programs in the budget this year have been designed to meet many of these requirements and at the same time to provide an expansionary stimulus to the over-all level of economic activity. In addition, to the extent that our provincial budget will, through borrowing, return a larger flow of funds to the economy than is withdrawn, we shall add a positive thrust to the prolongation of the economic boom which has prevailed since early in 1961. These provincial actions, by themselves, cannot ensure that our full potential is reached. We believe that the federal government should also design its fiscal and monetary policies with a view to stimulating economic expansion.
In other words, Mr. MacNaughton in that speech, and in fact in many of the speeches he made at that time, recommended that we should run a budgetary deficit this year, one that was designed to stimulate the economy, just as the province of Ontario itself ran a substantial deficit this year. Mr. Speaker, I believed this was the kind of budget that was appropr.ate to the circumstances; and I still believe that, and so does the provincial treasurer of Ontario whom I met and talked with the other day.
Our present problem is very different and I hope my hon. friend, as he learns more about the finances of Canada, since I know he mastered so well the finances of Nova Scotia, will begin to understand the nature of the inflationary problem we face. It is not the tradit onal kind of inflationary problem, as I think he understands to some extent because, as I will say subsequently, I agree with many of the things he said in his speech. I would like to make it clear that the kind of inflationary problem we are dealing with is a completely unprecedented one. It is one that is universal, that is international. It exists in other parts of the world as well as here, and it arises out of what I have called, and many people are now calling, an inflationary psychology. It is one of those peculiar situations we have never seen before, when rising interest rates are an accompaniment of easy money policies, and when prices and wages have continued to rise even after some slack developed in the economy. That is our problem. It is to be found in an exaggerated form, of course, in the United Kingdom, and I hope the kind of measures we are taking here will prevent the kind of problems that have arisen there, and have swept the finances of the world.
I say to my hon. friends in the N.D.P. that the kind of policies they are now advocating
[Mr. Sharp.1
DEBATES	November 20, 1967
is exactly the kind of policies that have helped to bring the United Kingdom to its present state. But even in a less exaggerated form we find these problems in the United States. We find there the same sort of problems that we have in Canada, and from whose effects we cannot escape. I have said it before and I repeat: A few weeks ago I had the privilege of being in Rio de Janiero and meeting with the ministers of finance of the whole world. We spent many hours discussing just the problems that we are discussing here. They are to be found throughout the world, and no one knows exactly how to deal with them because we have never had an experience like this before. But we are beginning to learn something about it. I say to the hon. Leader of the Opposition, and to this house, that the kind of policies we are advocating has a greater chance of success than any alternative has.
When I made my statement to this house a week ago Friday I was astonished at the reaction of the party that is led by my hon. friend. I made a statement that had the effect of steadying financial markets, but when I made that statement it was met on his side of the house by charges that somehow I was producing chaos in financial markets. The hon. member for Kamloops (Mr. Fulton) got up and made a most outrageous speech, asking questions of a kind that surprised me, knowing how responsible he usually is. The right hon. member for Prince Albert (Mr. Diefenbaker) got up in his first utterance in this house since reverting to the position of a private member. He thought he had found a great issue on which to attack the government. I was very much struck, when I was looking at Mr. Arthur Blakely's column in the Gazette on November 15, to read the following:
[DOT] (8:30 p.m.)
Even Mr. Stanfield found the temptation almost Irresistible.
The last thing he wanted to do, he said, was to cause any uneasiness. All the same, "people must be wondering how serious things really are," he
said.
Some opposition criticisms were aimed exclusively at Mr. Sharp and the government, which is par for the course. Others, however, were likely to raise doubts about the Canadian economy at least as alarming as any they created about Mr. Sharp.
What about the "serious national crisis" which, according to the opposition, had caused Mr. Sharp to opt for a tax increase? If in fact it really exists, no one has yet succeeded in finding it, measuring it, or defining its outer limits.
November 20, 1967

What about that "chaos" in the stock and bond market which the opposition Cassandras were sure would result from the announcement having been made when the market was open?
Here, fortunately, some evidence is available for scrutiny.
The stock and bond markets, on Friday at least, seemed to take Mr. Sharp's announcement in stride.
The bond market even improved slightly, though there could be no assurance that the improvement was more than temporary.
But of panic, chaos and confusion there was not a trace to be found.
Perhaps I may say to the Leader of the Opposition that when I watched the hon. member for Prince Albert rise in his place I wondered whether he was still the spiritual leader of the party.


Alfred Dryden Hales: You once had one who looked into a crystal ball.


Mitchell William Sharp: The hon. leader went on to say some very interesting and constructive things in his speech. I cannot quote him exactly because I do not have the transcript of his speech, but I listened as carefully as I could and I believe he said something to the effect that there should be a more civilized way to deal with these problems of inflation. He then quoted me, and since I felt he must have misquoted me I went back and had a look at Hansard. I refer to page 2809 of Hansard for October 4. The Leader of the Opposition suggested I had said I was determined to produce some slack in the economy. This was not what I said. I should like to take this opportunity to deny it, because I believe the same thing has been said elsewhere. At page 2809 this is what I said:
It has been a really quite successful transition except for one thing, Mr. Speaker, and that is that the rate of increase in costs and prices is still much too high. I feel that we must-and we will- find some way to bring this inflationary movement under control even, if necessary, by letting the economy develop a little more slack for a year or two while price and cost increases taper off.


Some hon. Members:: Oh, oh.


Mitchell William Sharp: Let me go on:
We would certainly prefer to avoid the sacrifices of production and income which this would, of course, involve, but if we cannot collectively and individually exercise the restraint that is called for in wage and price increases in the present situation, then there would appear to be no escape from an essential cooling off period.


Robert Lorne Stanfield: Is my hon. friend suggesting that I misquoted him?
Suggested Economic Mismanagement


Mitchell William Sharp: No, I am just saying he said there should be a more civilized way of dealing with this, and I suggest I am on his side. I suggest also that he may have misunderstood what I said because he said I was in favour of creating some slack.


Robert Lorne Stanfield: I understood my hon. friend to say that I misquoted him.


Mitchell William Sharp: 
Robert Lorne Stanfield: Mr. Speaker, would my hon. friend permit a question? Is he suggesting that the increase in Nova Scotia was inappropriate in the circumstances there?


Mitchell William Sharp: No, I did not. I ask the same question my hon. friend asked; that is, whether the policies we are pursuing are
4482	COMMONS
Suggested Economic Mismanagement inappropriate for Canada. The hon. gentleman went on and made a statement, which I did not quite catch, about the need for more revenues. I do not wish to misquote him, but I believe he said something to the effect that he doubted whether increased revenues were needed under these circumstances. If he did not say that, then I have misunderstood something he said-although one or two of my officials confirmed my understanding.
I should like to refer to the article in the Economist to which he referred, in which he picked out some sections which I also read. I should like to draw his attention to what the article said about the kind of policies we should be following. I will just give one sentence, which is sufficient:
There is in fact no recourse but fiscal restraint for Canada in the country's present circumstances.
This is the policy we have been advocating and for which I must say we have had precious little support from the opposition. If I may, I should like here to consider the question of what are appropriate policies. This is not a simple question as I believe my hon. friend understands although I think he oversimplified the problem in his presentation. As he knows, the United States has been having great difficulty in getting their tax increases through. They have been advocating 10 per cent increases in personal and corporate income taxes for many months which the president so far has been unable to get congress to approve.
The other day Bruce Macdonald, writing from Washington, made a very interesting comment on the differing approaches of the Canadian and United States governments to this problem. Let me read the final paragraph of that article as reported in the Globe and Mail of November 18:
In the view of some informed sources here, the very failure of the boom to materialize is likely to cause the administration to shift its ground once again. Instead of arguing that a tax increase is necessary to avert another inflationary rise, it is expected to revert to the position adopted in Canada, namely that a tax increase is necessary to halt rising costs and prices caused by last year's economic strains and to take some of the present extreme pressure off the financial market.
[DOT] (8:40 p.m.)
That is the policy I have been advocating throughout the period since we began to experience difficulties in the financial market. My hon. friend said he does not understand government policy. I will be charitable and say that this is because he has not been here

DEBATES	November 20, 1967
very long and has not absorbed the atmosphere. I believe that when he is around a little bit longer and reads the statements made from time to time by the Minister of Finance and other ministers he will see we have taken a consistent line suitable to the circumstances.
The Leader of the Opposition in the course of his remarks also criticized the flexibility of our policy. He called attention to the changes that had been made. I make no apology, and none whatever is needed, for the flexible fiscal policy we have adopted under these circumstances. Indeed we would be open to charges of Neanderthal thinking about economic affairs if, simply for the purpose of appearing to be consistent, we had stuck to any particular line laid down for any particular period of time. There is no apology needed. Circumstances have changed and this government has had the intelligence to change its policies. Perhaps I should say that when I was talking with my provincial colleagues they endorsed this statement. They were very happy that the federal government had been prepared to shift its policy a number of times during the last two years in response to the changes in circumstances.
The Leader of the Opposition said that we must work out practical proposals for restraints. I am sure that is what he believes and certainly that is what I believe. He says he is looking for a more civilized way of controlling inflation; so am I, and so is the government. To apply at this time to present circumstances the kind of policies that have been applied in the past to different circumstances would be the height of folly.
I do not believe it is in Canada's interest to produce unnecessary unemployment; and why would I? That would be an invitation to disaster, and the Leader of the Opposition knows it. We are seeking by a combination of policies, that is, expenditure policies, taxation policies and voluntary restraints to attain our objectives with a minimum of waste and unemployment. Surely this is an objective that we all share.
I submit that the Leader of the Opposition has said nothing in his speech to convince either this house or the people of Canada that the government should change its course. Certainly he brought forward no alternative ideas whatever for consideration. As I listened to him today he agreed that essentially the present situation should be met as I have advocated. He agreed with the
November 20, 1967

government's assessment of the present situation, and he agreed that there is a possible conflict of goals. He is seeking for means of attaining stable prices and high employment. That is exctly what this government is trying to do. He suggested that the way out of this painful dilemma is through following a policy of developing restraints. I do not think I am misquoting what he said, and if I am, perhaps he might clarify it now or at any time he wishes. I think those are the words he used. He suggested we should develop a process of continuous consultation. That is the prescription I place before this house, as I have done on a number of occasions. Certainly it is the prescription I offered this house on October 4.
Such a policy of restraints, as the Leader of the Opposition knows, requires leadership on our part. I refer particularly to the government, but I also include this house of parliament. We must have leadership to restrain our own expenditures and to exercise a modest fiscal restraint by tax measures to keep our budget deficits and cash requirements within reasonable limits. Each of these actions will require hard decisions on the part of the government and on the part of this house.
I have appealed before, and I now appeal to the new Leader of the Opposition to support these hard decisions, rather than criticize them for temporary political gain. He has addressed this house on a very high level today. He has appealed to us to co-operate in giving better government to the country. I welcome this co-operation and I hope this will be demonstrated in the attitudes and actions that he takes in future.
We are prepared to take these hard decisions, as I indicated in my statement a week ago Friday. However, the Leader of the Opposition seems unwilling to do so, although this is the logic to which his own position leads. I am sure the hon. member, as premier of Nova Scotia for 11 years, must have been faced with circumstances under which he had to take tough and hard decisions. I doubt whether he would have survived as long as he did, had he not been able to do so.


Robert Lorne Stanfield: Even in respect of tremendous Liberal problems.


Mitchell William Sharp: I am sure the hon. gentleman even had to face the presence in Ottawa of a Conservative administration. But he overcame that among these things and survived for 11 years. He survived even hardships of a kind 1 could hardly imagine, because I was 27053-283

Suggested Economic Mismanagement not in parliament during those years of bad administration.
It is my hope, as I am sure it is the hope of most Canadians, that the Leader of the Opposition will provide that kind of leadership to his party which will allow him to make these hard decisions, even in support of hard decisions on the part of the government. His followers may say that he must not do so and must take advantage of the government's embarrassment. I am sure the hon. gentleman, with the lofty ideals he holds in respect of Canadian politics, and in view of the way he was introduced here politically, will find himself able to resist those blandishments on the part of the estimable people around him.
A policy of developing restraints which he has advocated and I have advocated, is the civilized way out. He seeks that way, as I do. We need a consensus in this house and in the country. I hope we may look to the Leader of the Opposition as a man who is willing to make these tough decisions. If he proves to be such a man he will help to give leadership to the country, even though he may appear to be giving support to the government. I suggest, in conclusion, that the hon. gentleman has still to demonstrate that leadership.


Marcel Joseph Aimé Lambert: Mr. Speaker, I have noted the use of a curious word throughout the minister's speech, and that was the word "leadership". I am wondering whether the minister was preaching for a call. Since he admitted knowing so much about the relationship between the government of Nova Scotia and its premier, now the Leader of the Opposition, and the administration under the distinguished leadership of the hon. member for Prince Albert (Mr. Diefenbaker), I am wondering whether the minister relied for his information on that dubious source, the "Martin bureau of statistics". It was all part and parcel of the same record.
[DOT] (8:50 p.m.)
The minister has been saying that one of the difficulties today is a sort of inflation psychology. He quoted selected passages of the introductory remarks of a speech made by the governor of the Bank of Canada. I would have liked the minister to quote from some of the later passages of that speech, because he would have seen that not only did the governor of the Bank of Canada wave an admonitory finger at the Minister of Finance, but he shook a big stick at him.
November 20, 1967

Suggested Economic Mismanagement
The minister has talked about the inflation psychology. He is a man who has been aware of this inflation psychology and has approved of it, because he has said repeatedly in this house that he approves of an inflationary movement of perhaps up to 2 per cent per annum. Yet, Mr. Speaker, this is what the governor of the Bank of Canada said in Winnipeg. This passage will be found at page 16 of the text of the governor's speech:
It is curious that one should feel obliged to argue the case against inflation, but the view is seriously put forward by some that a certain degree of continuous price rise is not inherently undesirable and is perhaps a necessary "trade-oil" for keeping the economy operating at all times at levels of unemployment which do not exceed an acceptable figure.
I trust the minister will listen to these words.
I completely disagree with this view and I believe that harm has been done by the respectability it has been given in Canada and elsewhere.
By whom? By the Minister of Finance and by the administration of which he is a member.


Donald Stovel Macdonald: Did the governor of the Bank of Canada say that?


Marcel Joseph Aimé Lambert: The governor of the Bank of Canada said this.


Donald Stovel Macdonald: Did he attribute that view to the minister?


Marcel Joseph Aimé Lambert: If the hon. member had been listening he would know that I said this view was supported by the minister and by the administration.


Donald Stovel Macdonald: Not in the
speech you just read.


Marcel Joseph Aimé Lambert: The hon. member is trying to cavil too much. I have said that in the past the minister has said this. If the hon. member had been here, instead of trying to work out some other statistics, he would have known this.
Let me continue to read from the speech of the governor of the Bank of Canada:
Continuous cost and price rises are not only undesirable in themselves, but they can undermine our ability to keep the economy operating reasonably close to its potential in terms of real output. The most obvious danger is that if we fail to keep our costs under control we will price ourselves out of export markets and lose out to import competition at home, so that the growth of the economy will be seriously impaired. Inflation has other grave disadvantages as well. One cannot but be impressed by the futility of a system in which everyone must try to protect himself against

rising prices, and by the inequity involved in the severe penalties inflicted on those who are unable to do so because they have little or no bargaining power. It is not the strong but the weak who suffer from inflation.
I am sure none of us disagrees with those remarks of the governor. I hope the minister and his advisers have listened to the remarks of the governor of the Bank of Canada with respect to his refusal to accept the validity of creeping inflation. The Minister of Finance talks about inflation.
Here is another quotation:
The price inflation and the cost inflation are harming Canadians in several ways. Their effects are inequitable-


Mitchell William Sharp: That is a great authority.


Marcel Joseph Aimé Lambert: Yes, I think so. I continue to quote:
-giving gains to the economically strong and injuring the economically weak. They are eroding the competitive position of Canadian industry in competition with producers and traders in the United States and elsewhere. They are producing feedback effects through their influence on the demands which labour is making for wage settlements substantially larger than the increases in productivity that are going on. And finally, they had led to a belief on the part of investors that prices will continue to rise and that the purchase of long term bonds and mortgages exposes one to a risk of continued erosion of the real value of his investment which must be offset by current rates of interest far higher than what we had known before.
Who is the author of those remarks? It is the Minister of Finance, in a recent speech in New York-on November 14, as a matter of fact. But what I find curious about this is that he seems to have been converted to these views, or at least converted to saying them publicly, in the last several months and not before. But he was saying other things left, right and centre last year and we had many debates, including motions, with regard to inflation. Row upon row of docile government supports voted and said "This is all right," after the minister and his associates had said there was no such inflation and everything was under control. As a matter of fact, we had some rather stimulating budgets because it was felt that the pressure had been taken off the economy.
In regard to the replies the minister gave to members of the New Democratic party, and the replies that were given by the Minister of National Health and Welfare (Mr. Mac-Eachen), I am wondering whether there was not some equivocation in the replies we got today.
November 20, 1967	COMMONS
There is no doubt in my mind that the Minister of Finance is advocating a postponement of medicare. We have heard around this building today that there is a serious division in the cabinet with regard to medicare; and well there might be between the program advocated by the minister, on the one hand, and others of his colleagues who seem to have adopted the philosophy of "We will try to find the money somewhere, somehow." I am just wondering about that rather nonsensical answer the Minister of National .Health and Welfare gave us as to what he deemed to be the cost of medicare. It was quite a performance. We know there is division between the two ministers as to whether the program shall begin on July 1, 1968, or whether perhaps-and this may be the suggestion of the Minister of Finance-a limited medicare program shall come into effect. In any event, Mr. Speaker, that goes to the question of the degree of restraint.
I want to talk about some other things before I come back to this idea of restraints and what I think should be done at this time to encourage Canadians to assume their responsibilities in order to get ourselves off of, frankly, a rather sticky wicket. We went through a rather sticky six or seven months in 1962. Referring to the same speech of the minister in New York, I must say I am glad to see that he feels the efforts undertaken at that time were rather successful. I do not know whether he has ever told his colleagues this because the Secretary of State for External Affairs (Mr. Martin) and some of his other colleagues thought that we had sold Canada to the devil, and there was some panic with regard to that.
[DOT] (9:00 p.m.)


Mr. Cote (Longueuil):: We did not have the same Speaker in the house at that time.


Marcel Joseph Aimé Lambert: This is the statement that the minister made:
We weathered quite successfully a short but very sharp exchange crisis in 1962 that was the culmination of a readjustment-a necessary readjustment-in the valuation of our currency relative to others.


Mitchell William Sharp: It was an unnecessary crisis.


Marcel Joseph Aimé Lambert: Suggested Economic Mismanagement
What is the infernal hurry in implementing the recommendations of the Carter commission? I suggest it would be the height of fiscal folly for the federal government to start off on its own orbit on the basis of the Carter report with the provinces of Ontario and Quebec basing their taxing and fiscal policies on their own respective commission reports. If we want to have some cohesion and some degree of co-operation between the federal and provincial governments, then their respective taxing policies must be dovetailed. This can only be done through a study of the three reports and any other information that is available. I believe there are anterior reports made by some of the other provinces, but basically the Parent and Smith reports set the pace for the provinces. Why should these reports not be considered together? Let us get started off on the right foot. There are enough strains in intergovernmental relationships without imposing a brand new set of them, because each level of government decides to go off into its own orbit with regard to taxation.
The Prime Minister indicated to me that the participants in last week's conference spent a good deal of the time studying priorities. It seems to me that, notwithstanding the representations that my colleagues and I have made for at least two and a half years with regard to priorities, the government is finally admitting that it is at least considering them.
I draw the attention of the house to a short article which appeared in the Canadian Tax Journal of this year written by R. M. Burns, director of the Institute of Intergovernmental Relations at Queen's University. The article is entitled "Government and Society: The Question of Public Expenditure". I will not quote from this article at length. Frankly it is a plea that we should consider not only the raising of revenues but the manner in which we handle our expenditures. In other words, it is a question of determining the priorities of our expenses. I wish I had time to read it in extenso but I will limit myself to putting one paragraph on the record. It reads as follows:
-there has been a much greater involvement in activities of a continuing and growing nature, often connected with some form of redistribution of the nation's income and thus effectively altering the form and character of our society.
If the programs and policies which make up this new involvement are part of a deliberate plan, then we can judge the situation for what it is and accept it or reject it accordingly. But a very


good case can be made for the view that they are not, and never have been, a matter of deliberate policy in the aggregate but rather the end result of a number of often isolated situations which have been considered only in themselves and not in relation to any developed objectives.
[DOT] (9:10 p.m.)
Further along, I read:
No longer, as in the present manner of individual conduct, is it going to be enough always to attempt to increase our income rather than regulate our outgo. Mr. Micawber may have a message for us all.
Now, Mr. Burns, and I share his views, here regrets that the Carter commission as well as the Smith commission in their consideration of the tax structure failed to look at the question of expenditures. All they considered really was the matter of raising revenues. This has a diminishing marginal utility. In Canada, Mr. Speaker, there has been evidence of a financial malaise for some time. We have only to look at our bond prices, to look at the decline in the forecast of capital expenditures for the forthcoming year and the sort of hedging against the uncertainty of the future, to realize the situation. I make no apology for my own reaction or that of my colleagues with regard to the minister's announcement last Friday. It was couched in the vaguest possible terms and was made at a time when the market was open.
Now, regardless of what the minister says, it was the wrong time for such an announcement. It would have been very simple for the minister to have said, "I propose to present a supplementary budget on the night of November 27" or November 29, whatever the date may be, and let it go at that. He would have obtained far greater marks. May I suggest to him that he has not got off scot free as a result of his announcement of last Friday morning. A newspaper which is known for its support of the Liberals, and which is headed by Bruce Hutchison-I am referring to the Vancouver Sun-headed up its editorial of Monday, November 13 with this, "The Valley of Humiliation". It reads:
Finance Minister Sharp's week end announcement of new taxation to stem the inflationary tide means the government has at long last screwed up its courage to face the dangerous economic and financial crisis facing the nation.
That a ministry already deep in political troubles is willing to do so is proof enough to a concerned public that the crisis is indeed extreme. For once the savage invective of John Diefenbaker is fully justified.
The people have a right to know... just what is behind this abrupt decision.
November 20, 1967

This editorial goes on to refer to a previous editorial written on August 15 in which it was stated this government is spending far beyond its means, and there is no assurance that it intends to stop doing so. I should like to quote one more paragraph from this editorial:
The public remembers Mr. Sharp saying not long ago that we had all better hold down our expenses and our desires for more or we'd all lose our jobs. He had better himself remember that the same goes for him and for the government he represents.
For without a real demonstration of sacrifice on the government's part it is doubtful the House of Commons will accept a tax increase. Nor should it.
Without it, parliament will be justified in throwing the government out of office.


Mitchell William Sharp: I am waiting to hear the opposition	recommend real	reductions	in
expenditures.


Marcel Joseph Aimé Lambert: I suggest that is negative thinking. The reduction of expenditures is a slow means of curbing this situation. I should like to see the government take some positive action	toward increasing	the rate	of
productivity.


John Ross Matheson: How?


Marcel Joseph Aimé Lambert: Oh, I see the hon. member for Leeds (Mr. Matheson) has come to life.


John Ross Matheson: By spending more money?


Marcel Joseph Aimé Lambert: You do not increase productivity by encouraging people to spend more money. I suggest to you that there is open to the government a course of action that would result in restoring some of the activity that was going on at the time this administration came into office in 1963. In their haste to dismantle anything that was worth while, they did away with the National Productivity Council. At that time, the National Productivity Council was concentrating on getting labour, management and government together to see how productivity could be increased.
Perhaps the minister has heard tonight the reaction in the House of Commons in Britain in regard to prices there. The general secretary of one of the powerful trade unions of Britain has said that, in so far as Britain is concerned, it has 18 months for management and labour to get together to cure this problem of productivity. Now, the Minister of National Revenue (Mr. Benson) might pooh-pooh the idea-


Edgar John Benson: What about the economic council?
Suggested Economic Mismanagement


Marcel Joseph Aimé Lambert: The economic council is fine as an advisory body, but it is in an ivory tower.


Edgar John Benson: What about the productivity council?


Marcel Joseph Aimé Lambert: The productivity council
had its proper sphere in which the economic council is not acting at this time.


Edgar John Benson: It is the same.


Marcel Joseph Aimé Lambert: All right; the Minister of National Revenue can pooh-pooh this all he wants. I know from people who had to deal with the National Productivity Council that this was being developed, and the proof of that is in the words uttered by the opposition in the latter days of 1962.


Edgar John Benson: I wonder if the hon. member would permit a question?


Marcel Joseph Aimé Lambert: I have the floor, and I intend to keep it.


Mr. Speaker:: Order. The hon. member for Edmonton West has the floor.


Marcel Joseph Aimé Lambert: I suggest one of the things the government could do would be to organize additional activities for the economic council. Perhaps the structure of it may have to be changed somewhat in order that this could be done, but the economic council could undertake active discussions between governments, management and labour in order to ascertain if something could be done about productivity. The Minister of National Revenue knows full well that manufacturing productivity has been on the decline in Canada for the last three or four years, and in relation to the United States is still about 30 per cent below that country. As long as we have that disparity in manufacturing productivity, then talk about parity of wages, talk about active competition with the United States, is utter nonsense.
We are facing direct economic aggression from countries abroad. They, too, have to survive as a result of the Kennedy round. The governor of the Bank of Canada and the minister himself have been talking about the excessively high wage increases that have been negotiated in 1966, and are still coming about, without any compensating increase in productivity, c (9:20 p.m.)
This is where one of Canada's greatest ills lie. They lie in the declining productivity of
November 20, 1967

Suggested Economic Mismanagement our industry, which do not match government expenditures. Lord only knows, there are expenditures at every level of government and not just at the federal level. One only has to study the report of the Tax Foundation to see readily that the provinces and municipalities incur their own expenditures in this regard. It might be interesting to look at what Mr. Burns has to say, to illustrate what I have just said. I will use the table of figures that he has included in his article. They are for 1966-7 and 1965-6, in any event, let us look at them. He says:
In 1950, which is a reasonable year for measuring immediate post-war "normalcy", federal nondefence expenditures on goods and services were equal to 2.7% of the gross national product. In the same year, provincial expenditures were 3.0% and municipal 4.6%. But in the current increase in governmental activity it has been the provinces and the municipalities that have exercised their claims. Between 1950 and 1965, the federal share of non-defence expenditure on goods and services rose to 3.3% of the gross national product or by 22%. The provincial percentage rose to 4.3% or by 43% while that of the municipalities went to 7.9% or up by 71%.
If we look at total government expenditure (exclusive of intergovernmental transfers) which rose from 22.1% of the gross national product in 1950 to 31% in 1965, we find that the share of the government of Canada rose from 11.5% to 13.4% or by about 17%. The share of provincial governments went up by 59% from 5.6% to 8.9%. The municipal share increased from 5.0% to 8.7% or about 74%.
The figures in themselves are not important. They are but a reflection of our changing demands-
I terminate my remarks by making a plea to the minister and the administration. First, do something constructive to enable management, labour and government to solve problems of productivity and to bring about greater co-operation between the three levels of society to deal with problems of policy. Such action ought to deal with the problem of parity of wages across the country as well as with all sorts of other things. It would be a step in the right direction in dealing with problems of productivity. Lack of productivity is one of the root causes of inflation.
Second, the government must, of course, show an example by restraining its expenditures. It should not try to fool the country and this house with stories of great cut-backs on estimates which are really puffery. As I said in a speech last week in this house, the government can start with initial estimates of $15 billion and pare those to $11 billion and leave the impression that expenditures are to

be reduced by $4 billion. The government would still end up with $11 billion in expend-iures when, in the previous year, expenditures had run at about $10 billion. There would be no gain.
Last week's conference between the Minister of Finance and provincial representatives was a step in the right direction.


Horace Andrew (Bud) Olson: Hear, hear.


Marcel Joseph Aimé Lambert: It was the first time that such a conference had been held.


Horace Andrew (Bud) Olson: Hear, hear.


Marcel Joseph Aimé Lambert: I caution, hon. members and Mr. Speaker, that most decisions of government ought not to be taken at dominion-provincial conferences. That pattern ought not to be set at such conferences, since this house would become a mere rubber stamp. This is the dilemma we face. I agree with what the Leader of the Opposition said this afternoon. There must be consultation with the provinces.
I suggest, when we take steps to increase our productivity, that everyone in this country will benefit. We shall compete more effectively abroad than we now do. Incomes will increase and a whole panoply of benefits will accrue to Canada. Ultimately the government will benefit and it will be able to establish on an economically sound basis programs of social justice, which we all want to do our best to provide.
Look at Britain, Mr. Speaker. There is a classical example. For the last 20 years Britain has engaged in activities which have been way beyond her capabilities. One segment of the population believes in fiddling while London burns; another segment is so hidebound in doctrinaire restrictive practices that it cannot see that only if goods are produced will there be employment; they are more interested in tea breaks. Management over there refuses to innovate and refuses to take steps to really compete abroad. The net result has been the morass in which Britain now finds itself. I do not know, but it seems to me that Britain tried to move too fast in certain sectors and had not the economic structure on which to build many of the fancy programs it has. Our tendency, unfortunately, has been to follow Britain down that road. To that extent I feel that there has been mismanagement with regard to the financing of this country. The position we are in today is, certainly, not the result of good management.
November 20, 1967


John Ross Matheson: Mr. Speaker, in joining this debate I shall try to meet the challenges posed by the amendment of the Leader of the Opposition (Mr. Stanfield) and the subamendment of the hon. member for Burnaby-Coquitlam (Mr. Douglas). In brief, the Leader of the Opposition charges the government with economic mismanagement.


Mr. Monteith:: Hear, hear.


John Ross Matheson: During his speech he said, as I recall, that he hoped to speak later and in greater depth on the budget. I take it that we, on this side, may regard ourselves as quite safe until the mini-budget debate.
When the Leader of the Opposition attacks the government for mismanagement I say, at the outset, that he is attacking the most professionally competent Minister of Finance we have had in Canada's history.


An hon. Member:: Boo.


John Ross Matheson: Certainly, he has had the best education in economics.


Jay Waldo Monteith: How about your colleague, the hon. member for Davenport (Mr. Gordon).


An hon. Member:: And the ex minister of transport.


John Ross Matheson: He has held a high position in industry and is well aware of the responsibilities of public office. From searching through budget debates sedulously I am satisfied that never have the Canadian people had as lucid and as technical explanations of Canada's financial affairs as we have had since our present Minister of Finance (Mr. Sharp) assumed his office.
[DOT] (9:30 p.m.)
I will be very brief in my remarks with respect to the subamendment moved by the hon. member for Burnaby-Coquitlam (Mr. Douglas). In effect, he urges the government to set certain priorities for public and private investment, to implement the recommendations of the Carter commission immediately, apparently without even studying or assessing their contents, and to give this country a guarantee that medicare will commence on July 1, 1968. Then, consistent with the other socialist recommendations contained in his speech, the hon. member suggests we finance all these things simply by cutting costs; he moves immediately to his favourite theme,
Suggested Economic Mismanagement that we should cut our expenses in connection with NATO, NORAD, refitting naval vessels, the provision of military aircraft and so on. The leader of the New Democratic party, whom my friend from Vancouver-Quadra (Mr. Deachman) called "the last of the big spenders", is quick to call for defence cuts of all kinds, notwithstanding the fact that we have an extended defence policy, a smaller force and a budget which is the same as it has been for a number of years in terms of amount, though in terms of buying power it is worth a great deal less-defence has been hit far more by spiralling costs than have most other departments, yet the hon. member now urges us to pull out of our major responsibilities.
Speaking on my own behalf and not on behalf of the government, it is my opinion that having cut 20,000 men off the strength since 1963, and with still further cuts forecast, and with a defence expenditure amounting to 2.8 in terms of the gross national product, a whole percentage point lower than it was, we ought to be very cautious about making further cuts in this area. Our present spending puts us in the same category as Denmark and Luxembourg-at the bottom of the list of NATO nations.
While unification has enabled major economies to take place-it has certainly enabled us to reduce the number of people engaged in the administration without cutting too deeply into our operational forces-and while there are still some savings in store, the real economies already have been achieved; further reductions must be at the expense of bone and muscle. Personally, I hope that when this area of government expenditure is under review we can at least count on the support of the official opposition.


Robert Lorne Stanfield: You mean there is no support in the country?


John Ross Matheson: Perhaps it is worth while looking back on the economic events of the past few years. I like the assessment of David W. Slater in the Queen's Quarterly for spring, 1967. The author says that six features of Canadian economic performance during the last decade and a half can be counted as outstanding successes. First, except for a period of four or five years the country had quite an impressive attainment of full employment. The second outstanding success, he tells us, is the full-fledged
November 20, 1967

Suggested Economic Mismanagement Canadian participation in remarkable postwar growth in world trade and output, particularly among the highly developed countries. Third, Canada has been remarkably free from serious persistent deficits or surpluses in her over-all external balance of payments. Later, Dr. Slater writes:
A fourth success has heen Canada's comparatively favourable experience in adapting to a huge expansion of the urban-industrial-commercial-administrative activities of her people. The rates of urban growth in Canada have been extraordinarily high during the last two decades, compared with other industrial countries.
Any serious analysis of the way in which Canadians have been migrating to the larger residential centres would disclose the kind of economic pressures which have been imposed on all concerned, with resulting heavy burdens on both federal and provincial governments.
The fifth success, Dr. Slater says, has been achieved by improving educational activities in Canada, in further reducing inequalities of opportunity and in adapting the social welfare system to a modern industrial-urban society.
Finally-and this is of great importance in our centennial year when we think of our country as a unity-the author states:
The prairies, and now Quebec and perhaps the Atlantic provinces, seem to be full and hopeful participants in the modem economic growth processes. And Canada has worked up some fairly successful mixtures, uniquely adapted to her circumstances, in blending public and private power and public and private enterprise.
I think it is one of the characteristics of the party which I have the honour to support that we have not been doctrinaire. We have been most anxious to harness and stimulate private enterprise and to encourage economic freedom in every way, while at the same time carrying out a wise public policy. We see the government and industry as partners.
Dr. Slater looks at the failures of the past decade and a half, and here he says the greatest failure lies in our inability to reduce the relative shortfall in Canadian productivity, and in the persistence of levels of living below those which prevail in the United States.

The second notable failure, he says- and fortunately this situation now has been corrected-was the high level of unemployment between 1958 and 1962. We hope these conditions will never be repeated.
The Leader of the Opposition spoke about mismanagement, and my mind was immediately attracted to something which was said

by the hon. member for Okanagan-Revel-stoke (Mr. Johnston) who remarked of the hon. gentleman's speech: "He did not look beyond the frontiers of Canada for factors which influence the Canadian economy". I think it is characteristic of the Minister of Finance as well as of his colleague the Minister of Trade and Commerce (Mr. Winters) and as well, indeed, as of the ministry as a whole, that to a remarkable degree there has been attention paid to the the external forces. John Deutsch recently said:
As more trade barriers are dismantled (and this is the main objective of the Kennedy round), there will be still more chances for industries to specialize and gain the economies of scale.
I would so much like to have heard the Leader of the Opposition, who comes from the maritimes, dilate on this matter which is of such great importance to Canada and its future.
[DOT] (9:40 p.m.)
It is a fact that in many ways President Kennedy's hopes for an Atlantic free trade area have been disappointed. The exclusion of Britain from the common market began a period of increasing doubt and suspicion between the United States and Europe. This suspicion was reflected and aggravated by the tough bargaining attitudes which developed at Geneva. After four years of bargaining, the GATT negotiations and the Kennedy round finally came to a conclusion, which, on a simple arithmetical basis, I think means an average reduction of approximately one third in tariffs between industrial countries throughout the world, spread over the next five years. Despite this failure to reach the 50 per cent this does open up, I think, exciting new possibilities.
Since world war II Canada's greatest achievement economically-and this, is the reason for the comparative success of the last 15 odd years-has been our integration into the expanding world economy. This, has been very much the policy of this government. I hope it is a policy that will be supported in his "in-depth" speech on the mini-budget by the Leader of the Opposition.
Canada has already been an active participant in reconstructing a viable, rational, internationally oriented world economy. We made our contribution at Bretton Woods. We have been active in GATT; and although it has caused some suffering in sectors, Canada has been prepared to make sacrifices to see our economy shift to an international position. Canada has resisted the temptation to
November 20, 1967	COMMONS
retreat to a nationalistic autarchical system. I think there may be a danger that we lose confidence in the attractiveness of an aggressive, outward looking policy. Certainly Canada lost that confidence in the mid-1950's, and this has been commented upon by economists of several western powers.
Some people say that the dominant trend today is not toward a more liberal and expansive economic system, but toward fragmentation. They see a failure on the part of the United States and the United Kingdom to win acceptance of a reformed monetary system. This morning I was listening to a news report. Someone from the United Kingdom was commenting on Britain's huge disappointment with respect to recent attitudes of France in international affairs, in defence arrangements, and particularly in international monetary arrangements. France's failure to assist in an effective scheme for increasing international monetary reserves has placed certain countries of the world, now notably the United Kingdom, on the brink of international monetary collapse. I think that this is the real way, in the middle and long run, that Canada can make a positive contribution to productivity growth, and I think this is a view reflected by the ministry.
I notice that the Secretary of State for External Affairs (Mr. Martin) in Vancouver on January 18, 1967, said:
One of the most striking features of the past few decades has been the extent to which the interests of nations have become interdependent. We have always, of course, been affected by the actions of others. But now the earlier simple and limited relations between states have given way to a complex and pervasive system of interrelationships which any government ignores at its peril.
No one, I am sure has been more conscious of this than the Minister of Finance. No one has been more active in trying to develop for our country outward looking policies. The limitations to which this is possible depend on many factors outside our frontiers.
The Minister of Forestry (Mr. Sauve), speaking in Montreal on March 1, 1967, said:
We live in an interdependent world-and a world which through technology and communications is becoming more interdependent. We can only live independently, and successfully in that world, by learning to take advantage of the benefits which interdependence offers us.
The Minister of Forestry has his Ph.D. in economics. When we examine this government we can see no shortage of technically qualified economists. There are at least six
DEBATES	4491
Suggested Economic Mismanagement who have had considerable education in this field.
Now, sir, recently we have heard public utterances by Harry Johnson, who left the senior chair in economics at Chicago to assume the senior chair in economics at the London School of Economics. He has spoken of the trend toward regionalism of world trade which bears, as he sees it by definition, a threat to Canada's trading interests. He sees the great problem facing Canadian policy makers as being the problem of safeguarding as much of Canada's trading interests as can be preserved in a fragmenting international economy.
I heard and spoke briefly with Dr. Johnson at Queen's University on May 20, 1967. May I summarize what he said to that convocation gathering-and I believe his advice is something we should bear in mind as we look forward to this challenge of not only increasing productivity but strengthening Canada in the world society. Dr. Johnson said:
Three years ago, X took the position that the world economy stood at a crossroads, with respect to the three major components of international economic organization

the international monetary system, international trading arrangements, and the promotion of the economic growth of the less developed countries.
In the field of international monetary organization, it was clear that the advanced industrial nations of continental Europe were no longer happy to hold United States dollars as international reserves in place of gold, the supply of which commodity had for long failed to grow rapidly enough to satisfy the need for international reserves of a growing international economy.
I seem to remember that the Minister of Finance in one of his addresses to this house, spoke of a danger of growing international illiquidity. Dr. Johnson stated:
In the field of international trade, the formation of the European economic community-the common market-was threatening to divide the western world into regional trading blocs, discriminating against trade with each other and incidentally against the trade of the less developed countries.
Then finally Dr. Johnson concluded with reference to the underdeveloped countries, when he said:
-it was clear.. .that the amount of development aid the developed countries were likely to furnish to the less developed was likely to fall short of what would be required-
Kenneth Galbraith, who has given top level advice to successive American administrations, but who nevertheless remains a very enthusiastic Canadian, discussed in Weekend Magazine of March 25, 1967, the
November 20, 1967

Suggested Economic Mismanagement possibility of wider trading arrangements among our country, Britain and the United States, seeing this as a possible step towards the ideal of an Atlantic community, which through France's attitude is not now possible, but eventually I hope may be. He sees this not as something that will diminish Canada in its influence but as something that is within forseeable possibility, perhaps the policy most clearly designed to increase our gross national product in Canada and to increase the productivity of the individual worker. Weekend magazine carried a report of an interview with Dr. Galbraith, during which he was asked whether there was any real interest in Britain in such a proposal. He replied:
I think there is. There are a substantial number of people in Britain who fear the notion of a little Britain. They don't think it has a future as an "off-shore island"...
My impression is that Professor Franck, who has been in England in recent months, has found quite a few people who are rather anxious to talk about the idea of an Atlantic trading community.
I hope that the Leader of the Opposition, who comes from a part of Canada which I am sure could only benefit from such a development, will lend his full support to this general approach which is calculated to strengthen our economy and preserve our interests.
[DOT] (9:50 p.m.)
I see many reasons for encouragement in spite of these disappointments, to which I have referred. I am looking at the Fourth Annual Review of The Canadian Economy From The 1960's To The 1970's published by the Economic Council of Canada in September of this year. It shows the growth and volume of merchandise exports for the period 1950-60 standing at 4.6 per cent. In the period from 1961-63 it is 7.4 per cent. Now, in the period 1963-66 it is shown as 11.1 per cent. Not bad. What about merchandise imports? We see there an increase from the period 1950-60 of 5.2 per cent, dropping down between 1961 and 1963 to 3.3 per cent, but rising dramatically in the period between 1963 and 1966 to 13.8 per cent. Not too bad.
When we look at the employment by regions we find that in 1961 unemployment as a percentage of the labour force is 7.2 per cent. Yet, in 1966 we find it is down to a figure of 3.6 per cent which, some economists tell us, is tantamount to full employment.
The hon. member for Edmonton West (Mr. Lambert) spoke of the Productivity Council. I have searched carefully and I can find no
[Mr. Matheson.J
evidence on my own or from any person's comments that there have been any useful suggestions whatsoever from the deliberations of the Productivity Council. Again he spoke of the declining productivity and I think it is fair to say there has never been a decline in productivity. But there has been less improvement in productivity than increase in wages. Of course, that is a rather disturbing fact. The Economic Council of Canada, which was established in 1963, set up what I regard as manifestly wise objectives which, to a large measure, have already been achieved-full employment, a high rate of economic growth, reasonable stability of prices, a viable balance of payments and an equitable distribution of rising incomes. We need more of the same.
The fact is that by all standards we enjoy one of the highest standards in the world, and it improves dramatically year by year. I have attempted to find current figures for the year 1967, but have been unable to do so. Looking at the record of growth for the economy for the period from 1963-66, however, I find that wages, salaries and supplementary labour income percentages moved from 8.8 in 1963-64 to 11.1 in 1964-65 and to 12.9 in 1965-66. Not bad. I find that personal disposable income percentages increased from 5.7 for the period 1963-64 to 10.3 for the period 1964-65 and to 10 for the period 196566. Very good. When we look at the other side of production we find that profits before taxation for the same three year period are respectively 15.1 per cent, 7.9 per cent and 0.7 per cent.
This is the challenge which faces us. The hon. member for Edmonton West speaks of the financial malaise. I have been looking at the figures published by the Canadian Chamber of Commerce and I find that personal consumption expenditures have increased from $25,926 million in 1962 to $35,272 million in 1966, the last period available. The gross national product has increased from $40,575 million in 1962 to $57,740 million in 1966. Even if we take these figures and reduce them to the constant 1957 prices we discover that the increases in expenses of governments at all levels have increased less than the prices for the same period, although not by very much. Prices have increased by 125 per cent. Government expenditures have increased by 123 per cent. We know that the federal government, and I believe other governments as well, are now engaged in a most serious attempt to improve the situation by substantially cutting their own costs.
November 20, 1967

Mr. Speaker, I ask the following question which has been suggested by the motion of the hon. Leader of the Opposition and by the speaker who followed: Are we running out of prosperity? I say categorically that we are not. The employment performance in recent years has been excellent. From the early 1960's to the later 1960's there has been an expansion of one million jobs in Canada. Just how good this is is shown by the fact that this increase in a million jobs in under four years is more than the increase in the whole decade of the 1950's. It is also larger than the increase over the whole 17 years from 1929 to 1946. My authority for this statement is Canadian Business of January, 1967. This publication states:
The projected growth rate of employment is greater in Canada than in all other industrially advanced countries over the medium-term future. The favourable employment outlook also means a rise in real income per capita. This is so because the number of workers will rise in relation to both the younger and older people outside the labour force.
Average annual growth since 1963 has been more than 6% per year in volume of output. There has never been a more prosperous time in Canada. Result has been that this country has moved into the front ranks of economic expansion among industrially advanced nations since 1963.
Canadian exports have reached record levels since 1963. Volume of exports has grown about twice as fast as the volume of total output in this period.
In other words, as I say, we are moving competitively into the international society. There are these dangers about increasing prices and wages and declining profits. We must face this problem collectively, and if we do so wisely the future is very bright. There has been an upsurge in exports of wheat and happily an even more dramatic upsurge in exports of highly manufactured products. We are lucky that our farmers and the needs of the world have contrived to help Canada enormously in these past years.


Mr. Pugh:: What is the date of that
document?


John Ross Matheson: The report I have is from Canadian Business for January, 1967. This contains the latest statistics which are available.
Mr. Speaker, may I call it ten o'clock?


[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
27053-284}
Proceedings on Adjournment Motion
The Aciing Speaker (Mr. Tardif): At 6 p.m. three questions were announced for the business at the time of adjournment. It is now the understanding of the Chair that the government has requested that the question listed for tonight in the name of the hon. member for Winnipeg North Centre (Mr. Knowles) be deferred until another sitting. Is there agreement of the house that this question be deferred?
Some hon. Members:: Agreed.


Mr. Ralph Cowan (York-Humber):: Mr. Speaker, on November 3 I asked a question of the Minister of National Health and Welfare (Mr. MacEachen). Following his reply that he would like to discuss the matter with the Minister of Finance (Mr. Sharp) and make a reply later, I stated I would like to discuss the matter at ten o'clock.
[DOT] (10:00 p.m.)
The point to which I directed my question on November 3 was one which I raised in this house in the month of October of this year having to do with the application of federal funds for hospital operating purposes in the province of Quebec. You may remember that in October I asked a question regarding four hospitals in the province of Quebec about which the affairs of the board of governors had come to my attention during a visit to Montreal. I outlined to the house how these hospitals were months behind in receiving their remittances from the Quebec hospital insurance commission, and that the boards of governors were in desperate straits in trying to meet the financial commitments of the hospitals.
Since I made those comments regarding the four hospitals in Quebec, of which 1 have personal knowledge, I have received the annual report of the Montreal Children's Hospital for the 12 months ending December 31, 1966. Being a member of the Canadian House of Commons I can only ask how our federal funds are being handled, once they are transmitted to the minister of health for Quebec. I assume I am not allowed to ask how the province of Quebec handles the money it presumably directs toward the hospitals in that province, that being a provincial matter.
November 20, 1967

Proceedings on Adjournment Motion
However, upon reading the report of the Montreal Children's Hospital, and stating quite flatfootedly that I know a little bit about hospital financial operations from personal contact over 18 years, I can come to but one conclusion, namely that the province of Quebec is bankrupt. There is no other possible way to explain the actions of that province in refusing to meet the needs of the hospitals of Quebec as outlined by individual hospitals to the Quebec hospital insurance commission once a year in their annual proposed budgets.
To bear out my statement that the hospitals of Montreal and throughout Quebec are being deliberately starved by the province of Quebec hospital insurance commission I would like to read from page 24 of the annual report of Mr. Eliot S. Frosst, the president. He is writing about the year ending December 31, 1966 and states:
The year just past has been one of the most trying and difficult years in the history of the hospital. Lack of space-badly congested areas, combined with what has been a constant struggle to meet our financial commitments have produced these conditions. Neither of these conditions is new-but last year at this time we had hoped that before another year had elapsed we would be able to report that ... a better understanding of our financial needs had been reached with the province. Unfortunately we are no further ahead than we were a year ago.
Although our treasurer, Mr. Lennox, will report on our financial position, I think that after six years of operation under the Quebec Hospital Insurance Service a few words on my part seem necessary. We are not unmindful of the problems confronting the governement in the operation and financing of the Quebec hospital insurance plan. However, our statements show that the hospital does not have the necessary working capital to finance the annual shortfall between our operating expenses and the budget approved by Q.H.I.S. For the years 1961-64, Q.H.I.S. has paid the hospital, based on final audits, our actual shareable costs, less only about 3.5 per cent. The hospital can finance this reduction from donations it receives from a generous public. The hospital is, however, in no position to finance the shortfall for approximately two years until the audit is completed. The budgets for the last two years have been cut by approximately 25 per cent. It is our duty to practice economies wherever possible and a determined effort is being made towards this end.
However, the hospital cannot possibly cut its expenses by 25 per cent and still maintain the standard of patient care that has made it one of the leading pediatric teaching hospitals on the North American continent.
It is the general practice throughout the ten provinces which are participating in this hospital scheme, in which the federal government participates, that toward the end of
IMr. Cowan.]
each fiscal year they submit a budget for the coming year. These budgets are approved and accepted in four to six weeks by the provincial commission. During the year for which the budget has been submitted checks are sent out semi-monthly to cover expenses that have already been approved. I know of no province in the Dominion of Canada, except the province of Quebec, where hospitals are complaining about a delay in receiving moneys from the department of health. This involves money received from the federal department of health, representing our shared costs of provincial health schemes.
The language used by Douglas Lennox, chartered accountant and honorary treasurer of the hospital, in the same report, bears out Mr. Frosst.
In my report last year-
That was for 1965.
-I outlined the difficulties involved in financing the operations of the hospital during 1965. The report of the president this year has informed you that these difficulties have not only continued during 1966, but have increased to such an extent that the financial position of the hospital is now extremely grave-
In 1966 our operating expenditures exceeded revenue by $2,521,905. Of this amount we consider that $2,075,391 should be reimbursed by Quebec hospital insurance service and a claim has therefore been lodged for this amount. Together with the balance of similar claims relating to prior years, the total amount which we believe should be reimbursed by the service amounted at the end of the 1966 fiscal year to $3,066,411. The corresponding amount at the end of 1965 was $2,416,731.
He goes on to state as follows:
Lacking other resources we have been forced to delay payments to suppliers, with the result that accounts payable at the end of 1966 amounted in total to $1,523,282 as compared with $637,803 at the end of 1965. This means, for the bulk of our suppliers, that we are now ten months behind in paying for goods and services without which the hospital cannot continue to operate. I cannot emphasize too strongly our gratitude to our creditors-
Mr. Speaker, when a province has to withhold moneys from the sick and the dying for some reason not made clear to the hospitals, and certainly not made clear to the taxpayers of Canada who are contributing moneys to the hospital scheme for the province of Quebec, there is something drastically wrong with the financial administration of the province concerned. I have already said that the province of Quebec is bankrupt because-


The Acting Speaker (Mr. Tardif):: Order. I regret to interrupt the hon. gentleman but the time allotted to him has expired.
November 20. 1967


Mrs. Margarel Rideout (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the system between ourselves and the Quebec government in respect of hospital insurance is as follows. Early in the year the province sends us an estimate of their approved costs for the year. This estimate is reviewed by us and may be amended if we consider it unreasonable. We calculate the normal hospital insurance contribution to Quebec based on the amended estimate. This estimate is sent to the Department of Finance, with a copy to the Quebec hospital insurance authorities. On receipt of our estimates, the Department of Finance estimates the value of 14 points of personal income tax to Quebec, deducts this estimate from our total estimated contribution to Quebec under hospital insurance and makes monthly payments for the balance over the fiscal year.
If during the fiscal year the estimate of the hospital insurance contribution is changed, or the estimate of the value of the 14 income tax points, the new amount owing to Quebec is calculated and the payments are spread evenly over the balance of the fiscal year. After the close of the fiscal year the final contribution for the year under hospital insurance is determined in the usual way by the Department of National Health and Welfare, and the final value of 14 income tax points is determined by the Department of Finance. The final amount payable to Quebec for the year is then calculated by the Department of Finance and the current payments are adjusted upward or downward to compensate for this final adjustment.
We have been assured by some Quebec hospitals and by the Quebec hospital insurance service that regular semi-monthly payment cheques, based on one twentyfourth of the approved budgets, are being sent out to the hospitals on a regular basis. We receive monthly reports from Quebec on their payments to hospitals, and a review of these reports for 1967 indicates that the actual payments being made to the hospitals are almost identical with the estimates on which the federal contribution was calculated.
[DOT] (10:10 p.m.)
We wish to confirm that we have had verbal assurance from the Quebec provincial authorities that bi-monthly payments representing one twentyfourth of the original approved budget are made regularly to the Montreal Children's Hospital. We also have
Proceedings on Adjournment Motion verbal assurance from the authorities of the Montreal Children's Hospital that such payments are received regularly. The monthly reports received from Quebec on their payments to hospitals are global reports not showing payments made to individual hospitals.
It would appear that the root of the problem is in two areas: first, the actual hospital costs are running in excess of the approved budgets, and second, final settlements for previous years between the Quebec hospital insurance service and each individual hospital are subject to long delays because of the difficulties encountered in verifying the actual hospital costs and assessing the reasonableness of over-expenditures in excess of approved budgets.


Mr. Robert McCleave (Halifax):: Mr. Speaker, on May 23 of this year the food and drug directorate of the Department of National Health and Welfare issued proposed changes which cover the addition of vitamin and mineral nutrients to drugs. In other words, these changes deal with vitamin supplements, treating them as drugs and not as food supplements. Yet, as Mr. S. A. Smith, the president of the Canadian Health Food Dealers Association has stated in a round robin letter:
Vitamins and minerals, with a couple of exceptions, are harmless, nontoxic food nutrients and should be freely available to the public without being told to consult a physician before using. Those with toxic effects should be regulated.
It is a truism that what is one man's meat can well be another man's poison, but those who take vitamin supplements usually find the level which best suits them and, just as those who eat bread, do not gorge incessantly or indiscriminately.
The minister himself, in a round robin letter of September 27, which begins "Dear Sir or Madam"-I wish he would make up his mind-dealt with the avalanche of protests which have come to his office in connection with these regulations. He said in part:
It is true that the amounts of vitamins presently used in vitamin preparations have not been shown to be toxic.
Toxics are being sold, but without anywhere near the precautions surrounding the sale of vitamins. I refer of course to cigarettes. It would make more sense to me if the
November 20, 1967

Proceedings on Adjournment Motion Department of National Health and Welfare had taken some steps to prevent me from the folly of smoking cigarettes rather than putting certain conditions on the use of vitamin supplements, if I should ever take them up.
Since I have a number of questions, it would be unfair to expect the parliamentary secretary to answer all or many of them, and I think that this matter could be considered by the committee on health and welfare. They are as follows: first, what evil or what problem was being overcome by this decision of the food and drug directorate? Second, what scientific studies were made to justify bringing in these regulations? Third, who was consulted? Fourth, were requests made for such action and, if so, who made them? Fifth, will the effect not be to increase costs for those who take the higher doses of vitamin supplements, especially the older and poorer people?
I hold no brief in this matter. As I said, I do not take vitamin supplements myself, although inadvertently some of them might be slipped into some of the things I do take. I have always admired the work of the food and drug directorate, but has it gone too far, as is suggested by some of the criticisms that have come into the minister's department? I am puzzled, sir, and so are thousands of other Canadians. I hope that the minister, the parliamentary secretary, or the department will provide answers, if not now then before the committee on health and welfare.


Margaret Isabel Rideout: Mr. Speaker, I rise to answer the hon. member's questions, but first I must admit that perhaps my answer is longer than it should be. I ask the indulgence of Mr. Speaker and his permission to conclude my remarks because if they are taken in part they might be misinterpreted. I do agree with the hon. member for Halifax (Mr. McCleave), and perhaps he does need some vitamins, but he is not aware of it. If I may be permitted to ask your indulgence, Mr. Speaker, I should like some extra time, if I need it, in order to conclude my remarks.
As part of its continuing program to protect Canadian consumers against health hazard and fraud in the advertising and sale of drugs, the food and drug directorate of my department recently proposed certain amendments in the regulations pertaining to vitamins and minerals in drugs. These proposals
[Mr. McCleave.1
were circulated to drug manufacturers as trade information letter No. 284, dated May 23, 1967. These manufacturers were requested to submit comments not later than October 1, 1967. Numerous constructive suggestions on these proposals have been received. I understand that the Canadian Health Food Dealers Association has played a major role in eliciting comments from individual consumers, many of which have been received by members of this house and by officials of my department as signed form letters. Since there appears to have been considerable misunderstanding by some consumers in regard both to the intent and effect of the proposed regulations, I should like to make a statement on this matter.
Available evidence indicates that most Canadians are well fed, and will not benefit from use of dietary supplements containing vitamins and minerals. Nutrition authorities agree that the best way to assure nutritional health is to eat well balanced meals. I certainly have, sir. However, since some individuals feel that they benefit from dietary supplements, provision is made for their sale in the food and drug regulations.
The present regulations, enacted a number of years ago, set minimum and maximum limits on the amount of vitamins in preparations which can be advertised to the general public. They were enacted under authority of section 9(1) of the Food and Drugs Act to prevent the consumer being misled as to the value, merit and safety of products containing either insignificant or excessive amounts of nutrients. Preparations which contain vitamins at levels above the specified amounts cannot be advertised to the general public and must, at the present time, carry on both the inner and outer labels the statement, "Note: for therapeutic use only". This cautionary statement is intended to inform consumers that high potency vitamin products should not be used to supplement the ordinary diet but are intended for treatment of vitamins deficiency states. Because of their nature, such conditions should be treated under the direction of a qualified physician.
It has become evident that the levels of vitamins and minerals presently permitted in products which can be advertised to the general public provide considerably more than the daily intakes required. Amounts of these nutrients in excess of those actually required are of no value to consumers. The advertising to the general public of products containing excessive amounts is considered likely to
November 20, 1967	COMMONS
create an erroneous impression of their value. Furthermore, it is well established that ingestion of excessive amounts-


The Acting Speaker (Mr. Tardif):: Order.


Margaret Isabel Rideout: May I finish, please?
DEBATES	4497
Proceedings on Adjournment Motion The Acting Speaker (Mr. Tardif): I am
sorry to interrupt the hon. member. The rules are not made by the Speaker; they are just upheld by the Speaker.
Motion agreed to and the house adjourned at 10.20 p.m.

November 20, 1967



APPENDIX


[Stage Direction]
MEETING OF MINISTERS OF FINANCE November 16-17, 1967 Ottawa Agenda
1.	Economic and financial situation and outlook:
(a)	current situation
(b)	outlook
2.	Objectives for fiscal policy:
(a)	general
(b)	special aspects and problems
3.	Fourth Annual Review of the Economic Council of Canada
4.	Consultations on reforms of the tax system
5.	Other matters

[Stage Direction]
Summaby op Fiscal Situation, 1967-681 and Fiscal Limits fob 1968-692
	1967-68	1968-69		
Est.	Limit	Change	Item	($ million)	($ million)	($ million)	(%)Budgetary Revenue	
9,100	Budgetary Expenditure	
9,850	10,300	4.5Budgetary Deficit	
750	O.A.S. Revenue	
1,485	O.A.S. Expenditure	
1,370	O.A.S. Surplus	
115	Loans, Investments and Advances	
955	Total Cash Requirements	
1,590	750	1	In his statement to the House of Commons on Oct. 4, 1967, the Minister of Finance stated that budgetary revenues and expenditures would be approximately 1.5% higher than the original estimates contained in his Budget of June 1,1967. He also stated on Oct. 4 that the total cash requirements were estimated not to exceed $1,590 million.2	In his statement to the House of Commons on Nov. 10, 1967, the Minister of Finance stated that budgetary expenditures in 1968-69 (apart from Medicare and the writing off of Expo deficits) would be held to $10,300 million and that local cash requirements (apart from unforeseen changes in foreign exchange reserves) would be held to $750 million.
November 20, 1967

[Stage Direction]
Summary op Budgetary and Old Age Security Expenditure 1967-68
Type of Expenditure
($ million) ($ million) (% of total)
Non-Defence Expenditure
1. Major Statutory or Contractual Obligations
(a) Transfer Payments to Provincial or Municipal Governments
Revenue Equalization Payments	 555
Share of Federal Estate Tax	 48
Share of Income Tax on Power Utilities	 7
Statutory Grants	   32
Established Programmes Act	 85
Canada Assistance Plan (and Categorial Grants)	 198
Hospital Insurance Plan	 424
National Health Grants	 32
Hospital Construction Grants	 20
Health Resources Fund	 31
Trans-Canada Highway	 60
Post-Secondary Education	 108
Vocational Training Capital Grants	 120
Vocational Training Assistance Act	 50
Municipal Grants-in-Lieu of Taxes	 42
Forgiveness of Municipal Development Loans	 19
Urban Renewal Grants	 13
Sub-total	
(6) Transfer Payments to Persons
Old Age Security Payments	 1,370
Family Allowances and Assistance Payments	 565
Youth Allowances	 49
Occupational Training or Mobility Grants	 59
Sub-total	
(c) Other Contractual Obligations Public Debt Charges	
1,844	19.8
2,043	22.0
1,271	13.7
2. Other Selected Expenditures Under Statute or Agreement-
Price Supports for Farm Products	 109
Feed Grains Freight Assistance	 22
Subsidies for Storage of Wheat	 33
Provincial Crop Insurance Programmes	 5
National Transportation Act Freight Rate Subsidies	 110
Maritime Freight Rates Subsidy	 15
Atlantic Provinces Ferry Deficit	 21
St. Lawrence Seaway Authority Canal Deficits	 12
Dominion Coal Board and Other Coal Subventions	 26
ARDA Shared-Cost Programmes	 18
Emergency Gold Mining Assistance Payments	 15
Misc. Fed.-Prov. Resource Development Agreements	 17
Contribution to Unemployment Insurance Fund	 74
Designated Area Incentive Payments	 29
Sub-total
5.5
[Stage Direction]
November 20, 1967
GOVERNMENT OF CANADA Summary or Budgetary and Old Age Security Expenditure 1967-68
Type of Expenditure
($ million) ($ million) (% of total)
3. Other Expenditure by Department (Other than items listed above)
Agriculture	 136
Atomic Energy	 69
C.B.C	 144
Energy, Mines and Resources	 91
External Affairs and External Aid	 216
Finance	 55
Fisheries	 51
Forestry and Rural Development	 42
Indian Affairs and Northern Development:
Indian and Eskimo Education	 68
Other	   164
Industry	  131
Manpower and Immigration:
Purchase of Training Services	 31
Other	  83
National Health and Welfare	 75
National Research Council	      122
National Revenue	     118
Post Office	  304
Public Works	  219
Solicitor General	  155
Trade and Commerce	 31
Transport	 428
Treasury Board	 184
Veterans Affairs:
Allowances and Pensions	     315
Other	 92
Other Agencies	 241
Sub-total	
Total Non-Defence Expenditure
3,615	39.0
9,279	100.0
Defence Expenditure
Defence Production	 44
National Defence	 1,688
Total Defence Expenditure	 1,732
Increases in statutory expenditure over original forecast and allowance
for supplementary estimates less estimated lapses	 204
Total Budgetary and Old Age Security Expenditure	 11,215﻿4501
[Stage Direction]
Tuesday, November 21, 1967