1968-11-29

[Stage Direction]
Third report of standing committee on labour, manpower and immigration-Mr. Caccia.
[Note: For text of above report, see today's Votes and Proceedings.]

Mr. D. Gordon Blair (Grenville-Carlelon):: Mr. Speaker, I beg leave to present the second report of the special committee on procedure of the house, and later this day will ask leave to move concurrence.


Mr. Speaker:: The hon. member for Gren-ville-Carleton (Mr. Blair), seconded by the hon. member for Vancouver Quadra (Mr. Deachman), moves for leave to present the second report of the special committee on procedure of the house.


Some hon. Members:: Agreed.


Duncan Gordon Blair: Mr. Speaker, I move:
That the second report of the special committee on procedure of the house presented earlier this day be now concurred in.


Mr. Frank Howard (Skeena):: Mr. Speaker, because of the nature of this report-


Mr. Speaker:: Order, please. I should first put the motion.


Frank Howard: I intend to deal with that, Mr. Speaker, because I do not think you should put the motion in view of the lack of unanimous consent, the nature of the report, and the fact that it may require some discussion to determine whether we should give this committee an extension of time or just let it flounder.


Mr. Speaker:: Order, please. I must bring to the attention of the hon. member that leave was obtained earlier when the hon. member sought leave to introduce the motion. The only thing the Chair can do now is put the motion. Then it will become debatable and
hon. members can express their views at that point.
Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: On division.
Motion agreed to on division.



THE MINISTRY


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, the ministerial mission to Latin America returned to Ottawa on Wednesday of this week. I wish today to make a brief statement about the mission and its work, a mission which I am convinced marks a turning point in our relations with Latin America.
The house will recall that shortly before the mission left Canada the Prime Minister stated that its purpose was to assist the government in its review of policy toward Latin America, a part of the world with which we believe Canada should develop closer relations. The mission's main tasks were as follows: to explore the common benefits that might result from closer relations with Latin America; to explore all important aspects of Canada's relations with Latin America, political, economic and cultural; to demonstrate our desire to draw closer to Latin American countries on a bilateral basis and the importance we attach to our relations with the hemisphere as a whole; to enable ministers to have direct consultations with important Latin American leaders and to observe at first hand developments in some of the important Latin American countries; to review not only relations with Latin American countries but also world issues in which we and they have a common interest, and, to make Canada better known in Latin America, and to establish a basis for better understanding of Latin. America on the part of Canadians.
[DOT] (11:10 a.m.)
The government felt that to accomplish these objectives it was necessary to send ministers who could speak with authority on matters of foreign policy, trade and economic questions and cultural affairs, supported by a
3294	COMMONS
Report on Mission to Latin America strong team of officials drawn from the departments and agencies of government principally concerned with our relations with Latin America. To gain a broad perspective on our relations with Latin America, the mission visited as many countries of that area as possible.
At one time or another five ministers took part in the mission. They were the Minister of Industry, Trade and Commerce (Mr. Pepin); the Minister of Energy, Mines and Resources (Mr. Greene); the Secretary of State (Mr. Pelletier), the Minister without Portfolio from Saskatchewan (Mr. Lang) with responsibilities in the field of industry, trade and commerce, and myself. My parliamentary secretary (Mr. Goyer) also took part. We so arranged our time that at least three of us were present in each country. In this way our three main areas of interest, political, economic and cultural, were always well covered.
Ministers were supported by senior officials of the Department of External Affairs, the Department of Industry, Trade and Commerce and the Department of the Secretary of State, as well as of the Canadian International Development Agency, the Export Credits Insurance Corporation, the Canada Council, the National Gallery, the National Film Board and the Canadian Broadcasting Corporation. Most of these officials were with the mission throughout the tour.
The mission visited nine countries; six in South America-Argentina, Brazil, Chile, Colombia, Peru and Venezuela; one in North America-Mexico-and two in Central America-Costa Rica and Guatemala. The tour lasted approximately one month. In each country ministers were received by the president and had a series of meetings with ministers of the host government. In most countries we talked with leading members of the legislative bodies and with some representatives of regional and international organizations. Certain officials had individual meetings or made brief side visits, sometimes to neighbouring countries not covered by the official itinerary. In all these meetings a very wide range of subjects was discussed in considerable depth.
In the political field we discussed hemispheric questions and current international issues. In the trade and economic field we discussed trade in the multilateral context, bilateral trade, financing and investment. Everywhere we went we found that development is a main preoccupation of government.

DEBATES	November 29, 1968
In the cultural sphere, to which the Latin Americans also attach great importance, we explored a wide spectrum of activities ranging from scientific research to film production. I would like to emphasize that our discussions related to concrete possibilities as much as to general policies and procedures.
While we worked mainly with governments we paid special attention to private institutions which, both in Latin America and in Canada, have an important role to play in developing our relations. We had meetings, for example, with chambers of commerce, with university rectors, with museum directors and leading experts in the arts. We met with Canadian businessmen and with Canadian missionaries, religious and lay, and with other volunteer workers. In all these meetings we were greatly impressed by the importance of the part which private individuals and groups can play in the pursuit of goals shared by the peoples of Canada and Latin America.
In every country we visited we were offered a warm and most hospitable reception. The atmosphere in our talks was at all times cordial, frank and, as a rule, quite informal. The scope and frequently the depth of our exchanges were striking; we entered into a dialogue which we intend to continue.
Our mission was widely publicized in all the countries visited. Good coverage was afforded by the press as well as by radio and television stations. I can assure the house that the presence of the mission was felt in Latin America.
There is one feature of the mission which I would like to mention. The mission was an excellent projection abroad of the Canada of today. Almost every member of the mission was bilingual in French and English. In addition many could speak Spanish or Portuguese.
The mission has amassed a great deal of valuable information and has formed impressions and tentative opinions which will clearly be of great assistance to the government when completing its review of relations with Latin America. The substantial preparations for the mission and the work of the mission itself constituted the first phase of that review, and much has been accomplished in this first phase. Some projects which can be advanced under present policies and procedures have been identified; a few of these have been carried to completion and the others will be followed up without delay.
One example is the establishment of a joint Mexico-Canada committee for the consideration of matters of common interest to the two
November 29, 1968	COMMONS
countries in the political, economic and commercial fields. The committee may also consider other matters such as, for example, cultural relations. With the leave of the house, I wish now to table, in English and in French, the note on this subject which I signed and handed to the foreign minister of Mexico when the ministerial mission was in that country. This note and the note which the foreign minister signed and handed to me in reply constitute an agreement establishing the committee.


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


Some hon. Members:: Agreed.


Mitchell William Sharp: 1 am glad to be able to report that the mission accomplished the objectives set by the Prime Minister before its departure. It is the desire of the government to determine, in the shortest possible time, how present possibilities may be translated into action within the framework of our broader foreign policy review. The members of the ministerial mission will now reflect on what they have found and seen and heard and will shortly make a report to the government.
I would like to make clear that it is the intention of the government, before completing its review of policy toward Latin America, to consult individuals and groups within the Canadian community which have an interest in Latin America and, in parliament, to submit the review to critical examination in committee. In this process the government will welcome presentations and representations from all sides. I would add that the ministerial mission itself has given a new impetus to the development of Canadian relations with the countries of Latin America.
I am sure I speak on behalf of all members of this house when I once again express to the governments and peoples of the countries we visited our sincere thanks and deep appreciation for the reception they accorded to the ministerial mission. To the governments and peoples of the countries of Latin America which the mission was not able to visit I would like to say that in undertaking our voyage in Latin America, we were extending the hand of friendship to them also.
I would like to take this opportunity to express my warm appreciation, and that of all members of the mission, for the excellent arrangements made for us by our own embassies in the capitals we visited. Their
DEBATES	3295
Report on Mission to Latin America care and diligence on our behalf was indeed praiseworthy.
I now ask leave to table a set of papers which contains information about the composition of the mission, its itinerary and the main outlines of the program in each of the countries visited. There is also included a specimen of the statements made at the opening of the press conferences held by ministers.


Mr. Speaker:: Has the minister leave to table those documents?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed.


Mitchell William Sharp: In conclusion, Mr. Speaker, I wish to say that a preliminary report on the work of the mission is being prepared, and I will table it also as soon as it is available.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, we all welcome the Secretary of State for External Affairs, the various ministers who accompanied him and their officials back to Canada from what was obviously a most arduous trip. I hope the ministers had a chance to look behind the glamour and glitter of some of the countries they visited and see some of the serious problems resulting from the population explosion and severe poverty. We shall be interested in studying the implications of the visit in the fields of expanded trade and commerce, energy, cultural exchanges, external affairs, and so on. We also hope the details of the real effects of the mission will soon be made public in an ongoing policy review.
We should be interested to know whether increases in trade can be expected, what problems would accompany or impede such increase, and whether Canada ought to set up permanent structures in those countries in Latin America to facilitate trade. We share the government's views about the usefulness of an expansion of cultural relations, and here again we must wait and see what are the implications of this exchange.
In the fields of external relations and aid to South America the questions that come to mind are these. What role can our country best play; what role will we play vis-a-vis the United States in South America; and has Canada selected certain South American
3296	COMMONS
Report on Mission to Latin America countries upon which to concentrate aid? Another question is, how is aid to South America to be integrated with Canada's overall aid policy? We were interested to hear that following a proposal of the government led by my right hon. friend from Prince Albert an agreement has been signed between Canada and Mexico. We shall be interested in the membership of this new committee.
[DOT] (11:20 a.m.)
The minister did not specifically mention the Organization of American States, but obviously during any visit by Canadians to South America this must have been very much in mind. Here may I enter a caveat. I hope the Canadian government will continue to be sceptical about accepting the full implications of membership in this organization. As I see them these implications are in the category of defence, and they have political overtones as well. If we join the O.A.S. we shall become part of a hemispheric defence system with all this would involve for Canada. We should therefore need to know, as the review progresses, of the political conditions Canada would accept for membership in the organization. Would we be prepared, as Mexico has been on certain occasions, to pursue a course independent of the O.A.S. and suffer the economic consequences of such independence?
I hope there will be wide public discussion of these issues; that platitudes about dialogue, studies in depth and so on will be ended, and that the people will be told exactly what are the implications of any move to join what now appears to some of us to be a rather reactionary organization.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, like the hon. member for Fundy-Royal I think there is much more that the Secretary of State for External Affairs could have told us. But I suppose we shall have to settle for two promises; one, that there will be a further report on this mission; and two, that at some point the whole subject of our relations with Latin America will be referred to parliament or to a committee of this house.
Frankly, what we have been given this morning, while very interesting, was little more than a travelogue. This certainly applies to the statement the minister made while he was on his feet. As for the document he asked leave to table, copies of which have been made available to some of us, I find it includes a long list of all the lunches and

DEBATES	November 29, 1968
receptions which the ministers attended, and really it contains no more than the minister told us.
However, there has been a promise of a further report. I hope there will be more substance in it, and I hope, too, that this question of our relations with the countries of the western hemisphere will be referred to parliament, referred to a committee, and adequately discussed before any final decisions are taken. I need not take the time of the house to suggest what the solutions to these problems are; because, as the hon. member for Fundy-Royal has been saying, the whole question of our trading relationship with the countries of the western hemisphere is highly important to us and we feel that in the world today with its problems of over-population, its economic problems, its socio-economic problems, not forgetting the need for aid all over the world, there is a special role which Canada can play by way of aid to certain sections of the western hemisphere.
I think this should be brought out of the sphere of things that are awfully vague. It should be pinned down. We should know what we are doing.
I also want to say we are aware of the fact that lurking behind all this talk, all this travelogue, is the question of the Organization of American States to which the Secretary of State for External Affairs made no reference whatever. There is no reference in the formal statement, or that I can find in the multi-page document that has been tabled. This too is something we feel parliament should have an opportunity to discuss before we have been taken down the path to a situation that might involve us in defence, monetary and trading relations that would make us more a satellite than we are now of the main power in the Organization of American States.
As I say, Mr. Speaker, the minister has taken time on motions to give us an interesting travelogue. We have enjoyed it, but the fact is that there are matters of substance to which this parliament must give its attention.


Mr. Gerard Laprise (Abilibi):: Mr. Speaker, the Secretary of State for External Affairs (Mr. Sharp) gave us this morning a most interesting report on what seems to have been a wonderful jaunt to Latin America for him and his colleagues, and very little to show for it.
November 29, 1968

The newspapers tell us that the Minister of Industry, Trade and Commerce (Mr. Pepin), who also made the trip to Latin America, allegedly stated that it was an "exploratory trip" and it was not undertaken in order to sign trade agreements, or even cultural agreements.
Listening to the Secretary of State for External Affairs a while ago, I noted that the ministerial mission had taken a great interest in the development of the film industry and related activities in Latin America. I do not know if the film industry is as well organized in Latin America as in Hollywood, for instance, but in any case, it seems to me that a month of talks, visits, cocktails and banquets should allow us to hope that Canada, through the agreements that will be reached as a result, will try to meet the repeated requests made by representatives of Latin America to some countries other than the United States, because a study of history shows that instead of encouraging the development of Latin America, the United States has enslaved those countries.
Appeals were made at the 56th conference of the Interparliamentary Union held in Lima and recently at a symposium held at Laval University in Quebec, where President Luis Alberto Sanchez stated that integration must be the aim of Latin America. He recalled that, for years, countries had sought the disunion of Latin American states and having defeated them, not only from the outside but from the inside, they managed to enslave and exploit them. In one of his speeches, President Sanchez stated:
Because of the poverty, aggravated by a lack of a proportionate quantity of consumer goods, by their high cost in relation with the low salaries, by the excessive growth of the population-
Which is said to be 3 per cent in Latin America.
-the excessive concentration of capital in the hands of a few people and in capitalistic areas, the pressure exerted by the exasperated and the desperate increases, and they fall prey easily to national and foreign propaganda in favour of communism and fascism, both of which are international anti-American doctrines.
Mr. Speaker, in the light of a statement like that one from a representative of one of the Latin American states, I feel that the trade relations which Canada wishes or intends to establish with those Latin American countries should encourage their development.
We are giving considerable help to the underdeveloped countries and Latin America
Criticism of Television Interview is an underdeveloped continent. I feel that our help should not be restricted merely to technical help, but that it should encourage and facilitate commercial exchanges in the hope of fostering the industrial development of those countries and improving the lot of their labouring classes.
Mr. Speaker, I feel that the one month trip of our ministers and their associates will prove to be more than an exploratory trip, and that it will give satisfactory results for the countries visited as well as for Canada itself.
[DOT] (11:30 a.m.)



PRIVILEGE


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I rise on a question of privilege which relates to a question I asked the Prime Minister on Wednesday, the last sitting day, in connection with a television appearance of the Postmaster General, in respect of which the Postmaster General intervened to impute the accuracy of the comments I made, and my subsequent examination yesterday of the transcript of the television interview in question.
Chronologically, the situation is as follows. On Tuesday I asked the Prime Minister a question about government policy with regard to the authorization of ministers of the crown to express their personal opinions concerning policies being formulated. The right hon. gentleman said in part in his answer, which appears at page 3188 of Hansard, that a minister in answering must make sure he does not place himself in an irrevocable position which might be contrary to that which the government might eventually take.
That night I had the pleasure of observing the Postmaster General on a national television interview. I took note of what he said. On the last sitting day, Wednesday, I then asked the Prime Minister the following question which appears at page 3275 of Hansard:
Would the right hon. gentleman say whether the statements made by the Postmaster General on national television last night, that Canada should get out of NATO as well as NORAD since we have no contribution to make in that field, meets with the earlier guide line the Prime Minister laid down-
The Postmaster General, to whom I gave notice that I intended to rise on this question
November 29, 1988

Criticism of Television Interview of privilege, as quoted at pages 3275 and 3276 of Hansard, said:
On a question of privilege, Mr. Speaker, I did not say that.
The fact is, as confirmed by what is purported to be an official transcript of the proceedings, that the Postmaster General in this interview was asked the following questions and made the following replies:
Pape: You made statements in the past that you felt that we should get out of NORAD as well as NATO and I'd like to ask you about that.
Kierans: This hasn't come up in cabinet, thank the Lord ... (laughs)-
Pape: Well, let me ask you about it. Do you still feel that way?
Kierans: I still feel the same way. I don't think that we have any contribution to make in this field.
Now, Mr. Speaker, I felt compelled in my position to rise on this issue today because this has been an unfortunate practice. Not only on this issue but all too often we have seen the practice of statements having been made outside the house and then what appear to be equivocation and contradiction in the house. The members of this government from the Prime Minister down seem to have set out deliberately to do this, and the ultimate and inevitable result is and must be to debase the currency and deteriorate the quality of this house until its survival as a useful arm of democracy is seriously threatened.
Naturally, if the Postmaster General says he did not say what the transcript says he did say I will accept that and only add that this is simply another sorry chapter in the chronicle of confusion which surrounds the question of NATO and NORAD and our position in collective security.


Hon. Eric W. Kierans (Posimasier General):: Mr. Speaker, if I may speak to the question of privilege, I should like to refer to other parts of the interview. You might wish also that I table the entire proceedings, and if so requested I should be glad to do so. Mr. Pape asked me an earlier question:
Let me switch you to another area. You've been gaining a lot of publicity in the past couple of days with your comments on NATO and defence spending and ail the rest of it. Just how deeply are you committed to these views? Are you in effect kite-flying?
My answer was:
No. You have my book here; you have all kinds of things I said in the leadership speech and so on and you know what my personal beliefs are. Well, when you enter a cabinet you set those aside, because you accept as your own cabinet policy, which I do. So let me say, to go to the conclusion of this, if X months from now, in

April or May, cabinet should decide that our present policy is the best alternative; in other words, you don't veer either to the left or to the right of that policy, I'm not going to resign.
I know this disappoints the opposition.


Some hon. Members:: Oh, oh.


Eric William Kierans: May I continue. I listened to the hon. gentleman who raised the question of privilege.
I mean there are lots of things I can do working for the government of Canada. But that isn't the point. The point at the present moment is that the Prime Minister has said we are considering changes. Well who's going to consider the changes? Only the 26 or 29 cabinet ministers?


An hon. Member:: Hear, hear.


Some hon. Members:: Oh, oh.


Mr. Bell:: The hon. member from Hamilton.


Eric William Kierans: -
Or should other people, you know, make suggestions? Or should we get the pulse of the people of Canada? And how can you get the pulse of the people of Canada?


Mr. Speaker:: Order, please.


Eric William Kierans: How can you get the pulse of the opposition as well?


Mr. Speaker:: I trust the minister does not propose to read the whole interview. This is the impression I have gained. Perhaps he should limit his intervention to the point raised by the hon. member.


Eric William Kierans: May I continue with another statement from this; it is not a long one:
I said when you want to change defence policy or when you forecast a review of a defence policy, what are some of the alternatives? You know, making NATO stronger is one alternative. Staying right where we are is an alternative, making it a bit shinier, increasing defence expenditures; on the other hand reducing expenditures, defence expenditures-[DOT]
-is another alternative. This was the whole nature of the discussion. Later on Mr. Pape returned to the subject and said he was not quite satisfied with all this, and I said "I still feel the same way." I have my own personal beliefs. I may have certain views about the infallibility of the Pope, but I will not confine myself to entering a cabinet of those who only believe in the infallibility of the Pope.


An hon. Member:: Don't disgrace the Pope, whatever you do.


Eric William Kierans: I feel-
November 29, 1968


Mr. Speaker:: Order, please. I must ask the minister for his co-operation in coming to the point.


Eric William Kierans: All I wish to say is I should like to see a debate arise in cabinet. I should like some day even to know the views of the opposition on these questions, and it is a problem to find them-I meant "of the country". If a debate does not rise on this in the country then I suppose we turn to something else.


Mr. Speaker:: Order, please. Fortunately, in view of the fact that no motion was made following the hon. member's question of privilege, I do not have to rule on the situation. I think I will have to let the matter rest where it rests at the moment.
[DOT] (11:40 a.m.)



LIBRARY OF PARLIAMENT


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, perhaps in a less contentious vein I should like to move:
That the report of the joint commitee on the library of parliament presented to the house on Monday, November 25, be now concurred in.


[Stage Direction]
Motion agreed to.


Mr. David Anderson (Esquimalt-Saanich) moved: for leave to introduce Bill No. C-135, to amend the Criminal Code (pollution).


Some hon. Members:: Explain.


David Anderson: Mr. Speaker, in spite of the great amount of legislation on our statute books there is very little concerning pollution. It is for this reason I am introducing this bill which would make it an offence to pollute interprovincial streams or the seas surrounding Canada. For this reason I hope this bill will receive assent.
Motion agreed to and bill read the first time.



PUBLIC PRINTING AND STATIONERY ACT


[Stage Direction]
Mr. Gerald Laniel (Beauharnois) moves for leave to introduce Bill No. C-136 entitled "An
Proposed Legislation
act to amend the Public Printing and Stationery Act".
Some hon. Members:: Explain.


Mr. Laniel:: Mr. Speaker, the purpose of this bill is simply to substitute the title of "national printer of Canada" to that of "Queen's printer", a designation which, in my opinion, is archaic and out-of-date.
I make this proposal without any secret motive and with due respect for Her Majesty and what she means to our Canadian political system. This change would not be so necessary if the Queen's printer were limited to publishing official proclamations and documents for the government, the House of Commons and the Senate, but when we consider the wide range of publications printed and distributed by the Queen's printer, it is time, in my opinion, to make this change.
Motion agreed to and bill read the first time.



BROADCASTING ACT


Mr. Antonio Yanakis (Berthier) moved: for leave to introduce Bill No. C-137, to amend the Broadcasting Act (Prohibition of cigarette advertising).


Some hon. Members:: Explain.


Antonio Yanakis: Mr. Speaker, lung cancer is now epidemic in Canada. It is killing more men daily than street accidents or any other disease. Therefore we should take a firm and courageous stand and ban all cigarette commercials from television and radio entirely, the same as in Britain, in order to protect public health.
Motion agreed to and bill read the first time.



PROVISION OF DRYING FACILITIES ON FARMS

[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Industry, Trade and Commerce, but first I should like to say how pleased I am to see him in apparent good health. My question arises from a series of questions asked on Wednesday which were not answered. Will the minister advise the house what efforts are being made
November 29, 1968

Inquiries of the Ministry by the Canadian Wheat Board, the government or any government department to ensure that there are adequate facilities on farms to handle the more than 200 million bushels of tough and damp grain that cannot be conditioned at the terminal facilities?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I wonder whether the condition of my health is so good, but I will try to answer just the same. The situation which now exists is one which nas been described as very serious. There has been damp wheat in the past. In 1927 we had 180 million bushels of damp grain and in 1951 we had 200 million bushels. This year we have 350 million bushels. When this situation was realized, the proper authorities, the grain transportation commission, held a meeting in Winnipeg on the 26th. I have read, as I am sure everyone has, the press release issued at that time. The situation was fully described then by Mr. MacNamara, the chief commissioner of the wheat board because he and the transportation committee thought the farmers were not using all available facilities to dry their own grain; in other words they were relying too much-as is quite natural and nobody blames them for it-on the facilities that existed, and they issued a warning.


Mr. Woolliams:: Answer the question.


Jean-Luc Pepin: The question is a specific one. Yesterday for my own part I had the situation investigated with respect to tariffs on grain dryers. I found that any grain dryer for use on the farms may be imported free under tariff order 40924-1, regardless of ownership.
I found also that grain dryers of a stationary type used adjacent to storage sites off the farm are generally classified for tariff purposes as machines under the machinery program, tariff item 42700-1, which permits remission of the 15 per cent duty on the recommendation of the Minister of Industry, Trade and Commerce when he considers them not available from domestic production. So if these dryers are not available from domestic production, I hereby announce to the house that I will remit the tariff on such items.
The Minister of Finance has been questioned on this matter too, and this morning I have received telegrams, some of them asking for accelerated depreciation on dryer equipment. I understand the Minister of Finance is looking into this, and I also understand that he has already intimated to the house that he


would give accelerated depreciation on such items.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the minister whether he is conducting surveys to determine the adequacy of the existing equipment and the location of existing farm dryers to ascertain whether those facilities are in a position to be of maximum use in grain drying. Second, has the government or the wheat board given any consideration to determining, as a result of such surveys, whether the tariff items referred to should be removed?


Jean-Luc Pepin: The very able Minister without Portfolio assigned to matters having to do with industry, trade and commerce will give an answer to the question.


Hon. Otto E. Lang (Minister without Portfolio):: Mr. Speaker, the provincial ministers of agriculture have been assessing the situation with regard to farm drying equipment, and the Minister of Agriculture has been in constant contact with them. He had a meeting with them within the last week and expects to have further meetings with people in the prairie provinces as soon as he returns from Paris to further pursue these matters so that, in co-operation with the provincial ministers, the maximum amount of information will be obtained and maximum use will be made of the equipment on farms.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask either minister whether there is any prospect of the terminals operating their facilities around the clock, 24 hours a day and seven days a week.


Jean-Luc Pepin: I have a very long report on that but I will not read it because I am sure you would cut me off, Mr. Speaker.


Mr. Speaker:: Order, please. The house may want to give leave to the minister to read the report.


Some hon. Members:: Agreed.


Jean-Luc Pepin: I will read the conclusion of this report. It states that terminal drying can only start once damp grain starts arriving in volume. I have in hand a week by week analysis on such arrivals. It reads further that, as the statistics which I have not given show, it has only been in the last two or three weeks that damp grain has been delivered in volume to country elevators. It is then a matter of two or three weeks from the time grain
November 29, 19S8

is delivered to country elevators until it gets to terminal position. Therefore it has been in the last two or three days only that terminals have had, unloaded and in their bins, sufficient quantities of damp grain to keep dryers going on a 24-hour day basis.
At the meeting of the grain transportation committee held in Winnipeg the owners of terminal facilities assured those present that the terminal drying facilities in some cases were already being utilized to full capacity-


Mr. Korchinski:: But not at the lakehead.


Jean-Luc Pepin: -and in cases where they were not, would be during the course of the next few days as stocks of damp grain accumulate at the terminal positions. Labour union leaders attending the meeting at Winnipeg gave an assurance of their fullest co-operation in meeting this emergency.


Stanley Howard Knowles: I have a supplementary question, Mr. Speaker, which relates to this damp grain situation, but I would like to direct it to the government house leader. In view of the seriousness of the situation will the government house leader, before he decides on next week's business, discuss with his opposite numbers the possibility of bringing back the estimates of the Department of Agriculture or some other reasonable vehicle to allow us to have a day's discussion on this whole problem on Monday or at least early next week?


Donald Stovel Macdonald: Of course we would be glad to bring the estimates back to the house, notwithstanding the previous request by opposition members. I do not know if it might be appropriate at this point to make my weekly announcement with respect to the business of the house, and perhaps we might then have further discussions among the house leaders as to the appropriate occasion for discussion of this matter.


Stanley Howard Knowles: Before the minister does that, I wonder if I may ask him a supplementary question. Is it not a fact that some of the estimates of the Department of Agriculture have been passed so that at least the first one could be brought back for the purposes of this discussion if, as I am sure is the case, there is general agreement that we should have such a day without delay?


Donald Stovel Macdonald: In any event if there were a disposition on the part of the
Inquiries of the Ministry opposition to have those estimates brought back in the house, I would be glad to make a motion to bring them back. I suggest this might be a fruitful subject for discussion among the house leaders.


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Industry, Trade and Commerce and ask him what emergency action the government has in mind to meet the situation; for at the present rate it will take 20 months to dry all the damp wheat and by that time much of it will be decayed. What emergency action has the government in mind to meet the situation, and has any consideration been given to providing acreage payments for the farmers on the prairies who find themselves in a serious financial situation?


Jean-Luc Pepin: Mr. Speaker, most of us do not have the capacity to anticipate events which the right hon. member has.


John George Diefenbaker: I am just referring to the rate.


Jean-Luc Pepin: Consequently we cope with problems as they emerge. A few weeks ago the problem appeared to be the need to provide payment for grain still on the land. Now the situation is quite different. Farmers have decided to harvest the grain even though it is damp, so that now we have to cope with the situation of harvested damp grain. I have indicated what we are doing at the present time-exemption of tariff and accelerated depreciation. I have said I am willing to remit the tariffs on imports if Canadian drying facilities are not available. The wheat board is looking into the possibility of using grain drying facilities in the United States. We are doing everything that I think can be done at the moment to cope with this very difficult problem, but we can only cope with problems as they arise because we do not have the right hon. member's ability to predict history.


John George Diefenbaker: I have a further supplementary question. I wish to ask the minister, in view of the very small amount of damp wheat that has arrived at the head of the lakes and which according to his statement has only been arriving in the last two weeks, whether one of the reasons is the shortage of freight cars. If that is so-as it apparently is because farmers cannot market their wheat- what consideration is being given to bringing back Canadian box cars from the United
3302	COMMONS
Inquiries of the Ministry States? I asked that question the other day but the Minister without Portfolio did not have any information on the matter.


Mr. Horner:: And did not understand the problem.


Jean-Luc Pepin: Notwithstanding the respect I have for the right hon. member, I must say that that information is absolutely wrong. The chief commissioner of the wheat board said in his press conference "box car supply is not a limiting factor".


John George Diefenbaker: What is? Why cannot farmers move their wheat?


Jean-Luc Pepin: Perhaps the right hon. member knows more about these things than the chief commissioner of the Canadian Wheat Board.


John (Jack) Henry Horner: A lot more than you do.


Jean-Luc Pepin: The problem is that the movement of damp grain to the terminals must be geared to the optimum capacity of the drying facilities. The railways have been asked to regulate the flow of box cars to conform to the drying ability of the terminals. Every effort is being made now to avoid an oversupply of loaded cars of high moisture grain to the terminals since such grain would freeze. This is something to be taken into consideration, is it not?


John (Jack) Henry Horner: At Vancouver it is going to freeze?


Jean-Luc Pepin: My hon. friend should at least give me credit for knowing the distinction between the weather at Vancouver and at the lakehead. As I said, since such grain would freeze it would make unloading at the lake-head difficult, whereas the box cars could be heated at the west coast. This is what the transportation committee are trying to do; they are trying to regulate the use of box cars. The opinion expressed by the hon. member is consequently wrong. There is no problem connected with the availability of box cars in the opinion of people who should know. If they do not know, that is not my fault.


Stanley James Korchinski: Mr. Speaker-


Mr. Speaker:: Order, please. Will the hon. member resume his seat? I want to bring to the attention of hon. members the fact that there are quite a few members who want to

DEBATES	November 29, 1963
ask questions on this important matter. Perhaps we should try to give an opportunity to as many members as possible to question the minister.


John George Diefenbaker: To hear the government's alibis for inaction.


Stanley James Korchinski: Mr. Speaker, I have a supplementary question for the Minister of Industry, Trade and Commerce. Is it not a fact that the terminal elevators at the lakehead are still not drying on a 24-hour, seven day a week basis, and that the situation is the same at Vancouver? Second, could he indicate whether consideration has been given to using commercial dryers at the country elevators where the annexes are empty but the elevators themselves are filled? In this way, grain could be dried and put in the annexes in order to relieve some of the congestion.


Jean-Luc Pepin: I think anyone who reads Hansard will realize I have already answered those two questions. With regard to the use of commercial drying facilities, I have said we would make it possible for grain companies to purchase this equipment without tariff, if that could be done, and would grant accelerated depreciation. There will then be an incentive for them to buy such equipment. I .know though that drying equipment would be used only once every 20 years or so, so one can understand the reluctance of a company to purchase this equipment which would likely be allowed to rust more often than be used to dry. We are trying to make it attractive to groups of people to buy this equipment and use it on a commercial basis.


Stanley James Korchinski: Would the department or the wheat board consent to having commercial dryers come to the elevators and, without the companies purchasing them, dry the grain that has been already purchased? Then this grain could be transferred from the elevators to the annexes where it could be stored in a dry condition. Would this be permitted?


Jean-Luc Pepin: If the wheat board, as is the case, is willing to consider drying in the United States, I think they would be willing to consider drying under those conditions. I will make sure of that.


Eldon Mattison Woolliams: have a supplementary question, Mr. Speaker.
November 29, 19S8	COMMONS
On Wednesday I gave the Minister of Transport notice that I would ask this question:
Would the minister please take the house into his confidence and tell us what has been the result of those discussions with the Canadian railways?
The reference was to the shortage of box cars. The minister replied that he would do so at an early date. He assured me that he would make a report on the box car situation. What have the railways told the minister and would he inform the house in this regard?


Hon. Paul Hellyer (Minister of Transport):: Exactly the same as has been reported by my colleague, the Minister of Industry, Trade and Commerce, Mr. Speaker, that the shortage of box cars is not the limiting factor. The limiting factor is the ability to dry grain. The board has given the railways a schedule that it would like in respect of deliveries and the railways have advised it will be possible for them to meet this schedule. To the best of my knowledge, this is generally true, but if my hon. friend has any specific example to the contrary I would be pleased to hear it. However, I have been given the assurance that my colleague just gave to the house, namely, that transportation facilities are available to meet the demand and the limiting factor now is the ability to dry wheat.


Eldon Mattison Woolliams: A supplementary question.
I wonder whether the minister has checked on this situation, because he can get information from points all across the land that this is the problem. Will he discuss it with the president of the wheat pool and the president of the line elevator companies in order to determine whether those companies which handle the farmers' grain are getting the necessary box cars? Will he go that far? I think the minister wants to answer, Mr. Speaker.


Paul Theodore Hellyer: I believe our negotiations have to be with the wheat board, Mr. Speaker, which really has the over-all responsibility in respect of this matter. If there is any means that comes to their attention through which we can be of greater assistance, we would be more than happy to help.


Mr. Les Benjamin (Regina-Lake Centre):: On October 20, Mr. Speaker, I asked the Minister of Agriculture to ask the Minister of Industry, Trade and Commerce to make a full statement to the house on this whole matter of box cars. May I ask this question of the Minister of Industry, Trade and Commerce.
DEBATES	3303
Inquiries of the Ministry Is there any department or agency of government which has the sole responsibility for negotiating with the railways every year the allocation of available box cars to the various distributing points and branch lines?


Jean-Luc Pepin: My understanding is that this is done at the level of the transportation committee. This committee, as the hon. member knows, includes members of the grain commission, members of the wheat board, representatives of the railways and the grain companies. So far as I know, on previous occasions recommendations made by this committee have been implemented by the railways.


Leslie Gordon Benjamin: In spite of this, Mr. Speaker, the fact is that some shipping points have had more than their fair share of cars while other shipping points have had no cars for three or four weeks. Would the minister give consideration to appointing a transport controller with complete authority to require the railways to allocate box cars according to the needs of each individual shipping point?


Jean-Luc Pepin: This has been done in the past. I remember one case in particular where it was done, and I will look into it to see if it is needed in the present circumstances.


John (Jack) Henry Horner: Mr. Speaker, I should like to direct a supplementary question to the Minister of Industry, Trade and Commerce. Is he or his department considering the placing of grain drying equipment at the inland terminals, which would greatly facilitate the drying of grain this year?


Jean-Luc Pepin: That would mean added facilities because there are some facilities there now.


John (Jack) Henry Horner: Yes, adding to the facilities of inland terminals for drying grain. These facilities are not being used to the full extent, and in this way they could be.


Jean-Luc Pepin: As I said before, we are now doing everything we can, but I will certainly take this idea into consideration.


John (Jack) Henry Horner: Take another look at the problem.


Mr. R. R. Souiham (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have a supplementary question for the minister dealing with two aspects of this situation which I do not believe have been considered. The first point concerns the availability of drying equipment from the United States; it is not available at
3304	COMMONS
Inquiries of the Ministry all in Canada. Since the farmers have no money with which to buy these pieces of equipment which run as high as $10,000 or $12,000 for equipment with a 2,000 bushel per day capacity, would the government consider doing something about that?


Jean-Luc Pepin: I could not speak about the availability of the equipment. I am aware, however, that these are expensive gadgets and that is why we are trying to make the purchase of them more attractive by eliminating the tariff of 15 per cent and by giving accelerated depreciation.


Richard Russell Southam: A further supplementary question, Mr. Speaker. The volume of damp grain amounts to about 300 million bushels and it will rot in the bins unless it can be saved. We must take action to produce this equipment in Canada because it is not available anywhere else. This is the emergency.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I should like to ask the Minister of Finance whether he would explore all possible avenues from the financial point of view so that these dryers may be put in the hands of users? Accelerated depreciation and tariff removal are not enough.


Mr. Speaker:: Does the hon. member for Compton wish to ask a supplementary question?


Mr. Henri Laiulippe (Compton):: No, Mr. Speaker.


Mr. A. P. Gleave (Saskaioon-Biggar):: Mr. Speaker, I will direct my question to the Minister without Portfolio from Saskatoon-Humboldt, since he stated that certain plans are under way in the matter of co-ordination. In view of the fact that the Minister of Agriculture is out of the country at the moment, would the government bend all its efforts toward co-ordinating over-all policy to deal with the present crisis?


Otto Emil Lang: Mr. Speaker, this is exactly what the government is intending to do. Previous consultations with the provincial ministers of agriculture have revealed the extent of the farm drying equipment that is available on farms. In fact, as Mr. MacNamara said in Winnipeg on Tuesday, if this equipment is used to the full it might go a long way toward handling the situation. Obviously one problem is seeing that this equipment is fully available and is
[Mr. Southam.l
DEBATES	November 29, 1968
in the right place at the right time during the course of the winter. Certainly we will be interested in seeing that this is done.


Alfred Pullen Gleave: A supplementary question. What concrete action has the government taken up to now to achieve the objective of seeing that it is in the right place at the right time?


Otto Emil Lang: Mr. Speaker, we have considered it important to gather together the information first before taking specific action to deal with the problem, because we must know what the problem is.


Mr. Cliff Downey (Battle River):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. The minister has indicated that he will encourage the purchase of farm dryers through the elimination of tariffs. In view of the fact that the cheapest and smallest continuous flow dryer, which really is the only practical type, costs $8,000 or more, and in view of the fact that a farmer who farms 1,000 acres can expect to sell only about 6,000 bushels of wheat a year-and I might add that damp, tough wheat sells for-


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


Cliff Downey: How does the minister expect a farmer to purchase such a dryer? Is the government considering making acreage payments to farmers at this time?


Jean-Luc Pepin: Mr. Speaker, I have dealt at least in part with this question.


Mr. Speaker:: Order, please. As far as the second part of the question is concerned, it has already been asked.


John George Diefenbaker: But not answered.


Mr. Speaker:: I understand the hon. member for Selkirk wishes to ask a supplementary question.


Mr. Ed Schreyer (Selkirk):: Mr. Speaker, I should like to direct my question to the Minister of Industry, Trade and Commerce. Because of the extreme difficulty of securing grain drying equipment, has the government in mind a policy whereby it will assist the grain industry to secure supplies of grain drying equipment?


Jean-Luc Pepin: Mr. Speaker, if it is found that our present best is not good enough, then we will certainly consider this.
November 29, 1968



INQUIRIES OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Stan Schumacher (Palliser):: Mr. Speaker, my question is for the Minister of National Health and Welfare but in his absence and in view of the emergency perhaps his parliamentary secretary will take notice of the question. Will the department use its good offices and facilities with respect to the urgent health problem facing the Calgary Stampe-ders football team?


Mr. Roland Godin (Porlneuf):: Mr. Speaker, I should like to put it to the Secretary of State, but in his absence I will direct it to his parliamentary secretary.
Since the C.B.C. recently contributed to make us meet some nice boys who are waiting for the advantages of the omnibus bill, is the crown corporation considering the possibility of presenting other such programs in order to give an opportunity to the unemployed heads of families to state their views on their financial problems?



TELEVISION


[Stage Direction]
On the orders of the day:
Henry P. Latulippe: Mr. Speaker, I should like to put a question to the right hon. Prime Minister.
Could he tell the house whether the government intends to amend the constitution so as to allow the provinces to operate their own television network for educational broadcasting during the next federal-provincial conference?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, the division of powers, including those concerning broadcasting, is on the agenda of the next federal-provincial conference. We will then see what the provinces have to say on the subject.



HARBOURS


[Stage Direction]
On the orders of the day:
Thomas Miller Bell: Mr. Speaker, I have a question for the Minister of Transport. Is the minister now in a position to advise the house of the outcome

Inquiries of the Ministry of the study concerning port administration which has occupied his time for the past two week ends?


Paul Theodore Hellyer: Mr. Speaker, I think that this would be a good subject for study by the committee; it might divert their attention from some other matters. However, my difficulty so far as the order of precedence is concerned is whether or not the committee should visit the Atlantic provinces before commencing its study of this report or whether the report should be considered first. Any advice that my hon. friend wishes to give me in this regard will be most welcome.


Thomas Miller Bell: A supplementary question, Mr. Speaker. May I ask the minister point blank whether he has finished reading the report and what he thinks of it? He made a big play of the fact that this study had been brought back early and I think we are entitled to know.


Mr. Speaker:: Order, please.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I almost hesitate to rise in view of the significance of the questions asked up to now in regard to a matter affecting many members of the house. I should like to direct my question to the government house leader. In view of the fact that the homes and constituencies of some members are over 3,000 miles away and in view of the fact that there will be transportation problems over the holiday season, could the minister give us an indication when it is contemplated that the house will rise for the Christmas recess and reassemble in January? This information, sir, will be of great assistance to many hon. members.


Donald Stovel Macdonald: Mr. Speaker, I do appreciate the problem here. The hope would be that if the items of business which remain to be dealt with in this part of the session can be disposed of by December 20, then we might rise at the end of that day. This will depend, of course, on the progress made in the house and perhaps the hon. member can have some influence in that matter.


Harold Edward Winch: And reconvening when?
November 29, 1968

Inquiries of the Ministry


Donald Stovel Macdonald: Mr. Speaker, I shall have to make a further announcement about that.


Harold Edward Winch: Mr. Speaker, may I pose a supplementary question, because I think this matter is important. Did I understand the answer to be that if satisfactory progress, in the opinion of the government, is made the house will adjourn on the 20th but if not we will be sitting here on the Monday and Tuesday before Christmas day, which is Wednesday?



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Prime Minister. Would the Prime Minister consult his colleague the Minister of National Health and Welfare with a view to having old age security cheques for the month of December sent out before Christmas rather than after? Otherwise a great many old people will be having a pretty bleak Christmas. Mr. Speaker, I believe the Prime Minister was intending to reply to my question.


Right Hon.   P.-E. Trudeau@Prime Minister: I was not really intending to reply, Mr. Speaker. The minister himself will be here on Monday, Tuesday and Wednesday, so perhaps the hon. member would ask his question on one of those days.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Fundy-Roy-al: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Will Canada join other commonwealth countries which have urged Nigeria to accept a referendum supervised by the United Nations or the Organization of African Unity to decide the future status of former eastern Nigeria?


Mitchell William Sharp: Mr. Speaker, I am unaware of this appeal of the commonwealth countries.
I doubt that it is shared by many.
[Mr. Winch.l



COMMUNICATIONS


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce supplementary to the question I asked the Postmaster General on Wednesday last. Did any official of the Department of Industry or the Department of Trade and Commerce give permission to the R.C.A. Victor Company or the Northern Electric Company to make a report, following the surveys they made, on Canada's satellite?


Jean-Luc Pepin: Mr. Speaker, the government was approached with a proposal by Northern Electric to make a number of press releases. This was fully discussed by responsible officials in the Department of Industry and by the task force which reports to the Postmaster General. Both firms, however, were given instructions to follow regarding price, details of specifications, etc. I have not had time to go into the matter in the last few days but as far as I have been able to check both companies have respected the government's instruction regarding the release of confidential information. It does not appear that there has been any breach of confidence. I should also add that these reports were in the hands of the government before the press conference was held, though it might have been wiser-


Mr. Fairweather:: Oh, oh.


Jean-Luc Pepin: -to keep in mind that ministers are not always available at a second's notice. It might have been wiser and gentler for the companies to allow a bit of time between the sending of the report to the government and the minister, and the press conference.


Alfred Dryden Hales: I rise on a question of privilege. It is that the Postmaster General did not give this house the proper information on Wednesday last. He misled the house in an answer he gave me on Wednesday, November 27, when he said in answering a question similar to the one that has now been asked:
No member of the office of the Minister of Industry, Trade and Commerce or in the office of the President of the Treasury Board or in the office of the Postmaster General gave any such authority.
November 29, 19G8


Eric William Kierans: On the question of privilege, Mr. Speaker, I drew the distinction on Wednesday that no member in the office of my colleague, the Minister of Industry, Trade and Commerce, gave such authority. The hon. member referred to a government official. No member of the minister's office or of my personal office was aware of this.


Jean-Luc Pepin: It had been received by officials in our department but I do not think the Postmaster General or I were aware of it-I for obvious reasons because I was absent from Ottawa-or had seen these documents.


Alfred Dryden Hales: Mr. Speaker, further to the point of privilege, it appears that a very thin line is being drawn between the words "in the minister's office" and "any officer or official". I accept the explanation on that basis.


Eric William Kierans: On the question of privilege, Mr. Speaker, I wish to say to the hon. member that my answer to him was also:
No, they may have been In contact with some officials; that is the distinction I am making.


Mr. Robert Simpson (Churchill):: A supplementary question to the Postmaster General, Mr. Speaker. In view of reports that the rocket launching site at Churchill, Manitoba, is capable of launching a communications satellite, will the minister assure the house that every consideration will be given to launching Canada's first communication satellite from our native launching pad?


Mr. Speaker:: Order, please. The hon. member is making a representation. If he is seeking information I think the question, although it is important, is not so urgent that it cannot be placed on the order paper.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. J. Edward Broadbent (Oshawa-Whii-by):: My question is for the Minister of Transport, Mr. Speaker. In view of the serious housing crisis in Canada, and in view of the recent announcement by the Department of National Defence that some 275 acres of land will be available early in the spring in the Oshawa area, is the minister giving consideration to making this land available for housing?


Mr. Speaker:: I think that question ought to be placed on the order paper.

Inquiries of the Ministry


John Edward Broadbent: A supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please.



TORONTO-REQUEST FOR REPORT ON MALVERN PROJECT

[Stage Direction]
On the orders of the day:
Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the Minister of Transport who is in charge of housing. What progress, if any, has been made with regard to building homes at the Malvern project in order to ease the housing crisis in Toronto?


Mr. Speaker:: I suggest that question might also be placed on the order paper or, if the hon. member wishes, it might be discussed at the time of adjournment.


John Gilbert: A supplementary question, Mr. Speaker. Will the minister consider appointing the former mayor of Toronto, now the hon. member for York West (Mr. Givens), to be in charge of this project? Otherwise the housing policy may well be a charade.



BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
Gerald William Baldwin: Mr. Speaker, I wonder whether the President of the Privy Council could indicate our business for next week.


Donald Stovel Macdonald: Yes, Mr. Speaker. As a result of yesterday's consultations and without taking into account the questions this morning it has been proposed that we should go into committee of supply on Monday to take the estimates of the Department of Industry. That is the last of the departments that hon. members opposite have requested to be dealt with in the house. On Tuesday we propose to call second reading of the Customs Tariff bill, No. C-131, item No. 35 on the order paper, with the hope that we can make good progress so that on Wednesday we may call third reading of the bill and then deal with estimates. On Thursday we propose to deal with estimates again. On Friday, depending on the availability of the report of the committee, we hope to open debate on the report of the standing committee on procedure.
With regard to the question of estimates, I should be pleased to discuss with hon. gentlemen opposite the estimates to be dealt with. I understand that the standing committee on agriculture chose to retain the first item
COMMONS DEBATES	November 29, 1968
Inquiries of the Ministry under the agriculture estimate yesterday; it is still seized of that matter. I hesitate to withdraw that from the committee unless there is general consent. Subject to that, I should be glad to talk about the scheduling of estimates for the coming week.


Mr. Waller C. Carter (SI. John's West):: wonder whether the minister could make arrangements to bring the appropriate part of the estimates of the Department of Transport back to the committee of supply so the house may debate the recommendation of the committee respecting the decision by the C.N.R. to abandon certain rail passenger services, and pass on that recommendation to Canadian National Railways?


Donald Stovel Macdonald: I point out to the hon. member that the estimates of the Department of Transport have never been out of the committee of supply. At the choice of the opposition they were left in the house.


Gerald William Baldwin: What was the committee dealing with, then, when it passed that resolution?



AIR CANADA


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, my question is for the Minister of Labour. I realize he is not here, but if we had met yesterday he would have been here, and he will be here on Monday. If the answer is not available at once perhaps the question might be taken as notice. Has the government received the report of the conciliation board dealing with the disagreement between Air Canada and the air line employees association? Also may I ask if the board has resolved the differences between the parties?


Donald Stovel Macdonald: Mr. Speaker, I note that the minister will be here on Monday. Perhaps he could deal with this then.



VOCATIONAL AND TECHNICAL TRAINING


[Stage Direction]
On the orders of the day:
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wanted to direct my question to
[Mr. Macdonald (Rosedale) .1
the hon. Minister of Manpower and Immigration but, since he is absent, his parliamentary secretary might give us an answer.
Is the number of persons entitled to take advantage of retraining courses limited in any way to a certain number in a given region, or must all those qualified be accepted?


Mr. Speaker:: The question could easily be put on the order paper.


Joseph Adrien Henri Lambert: Mr. Speaker, a supplementary question.


Mr. Speaker:: The supplementary question should also be put on the order paper.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
John (Jack) Henry Horner: Mr. Speaker, my question is for the Postmaster General. In view of the recent pay increases for postmasters and their assistants, some raises being retroactive to October 1, 1966, will he make sure that the increases are available to the people concerned before the end of the year so that they will not be subject to the social development tax coming into force next year?


Eric William Kierans: To answer that question very quickly, Mr. Speaker, there are a number of employees, included among whom, for example, are rural contractors, whose cheques are still outstanding. We hope to have all this cleared up by December 15.



CANADA YEAR BOOK


[Stage Direction]
On the orders of the day:
Thomas Miller Bell: Mr. Speaker, only a few moments ago I directed a question to the Minister of Industry, Trade and Commerce and I regret troubling him again so soon. But since he will not be here again until next Wednesday may I ask him whether he is aware that during his absence the section in the Canada Year Book on the dissolution of parliament was changed and, if so, why?


Jean-Luc Pepin: I try to check everything, Mr. Speaker, but that one escaped me.
November 29, 1968


Thomas Miller Bell: May I ask the Prime Minister whether he or the staff of his office were aware of this change?


Mr. Speaker:: Order. In view of the fact that the change referred to has already been made, perhaps the question should be placed on the order paper.


Thomas Miller Bell: It is very serious.



MESSAGE FROM THE SENATE

Mr. Speaker:: I have the honour to inform the house that a message has been received from the Senate informing this house that the Senate has passed the following bills:
Bill C-124, an act to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of January, 1968, to the 30th day of June, 1969, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and by Air Canada, without any amendment.
Bill C-103, an act respecting Atlantic Peat Moss Co. Ltd.-Mousse de Tourbe Atlantic Cie Ltee- without any amendment.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Ottawa, November 29, 1968
Sir:
I have the honour to inform you that the Right Honourable J. R. Cartwright, P.C., M.C., Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate Chamber today, the 29th November, at 12.45 p m. for the purpose of giving royal assent to certain bills.
I have the honour to be, Sir,
Your obedient servant, Louis-Fremont Trudeau Brigadier General
Assistant Secretary to the Governor General.

The house in committee of supply, Mr. Bechard in the chair.



DEPARTMENT OF FINANCE

[Stage Direction]
1. Departmental administration including administration of the guaranteed loans acts, the Inspector General of Banks office, and payments to provinces as detailed in the estimates, $3,970,500.
The Deputy Chairman:: Vote No. 1 will be found on page 138 of the blue book. Details thereof are listed on page 142. Shall the item carry?
Supply-Finance


Robert Lorne Stanfield: Mr. Chairman, there are so many aspects of the work of the minister and his department upon which I should like to comment that I will have to exercise a great deal of restraint in the choice of topics. It is not my wish to trespass for too long on the time of the committee but there are certain particular questions concerning the attitudes and the judgment of the minister which I feel it is necessary to raise. I hope the minister will excuse my being very blunt in some of my remarks, as I view with a good deal of concern some of the tendencies which are all too apparent.
I have already found occasion to comment as frankly as I can upon the credibility gap arising from the discrepancy in the assurance which the minister, in another capacity, gave this house and the country in connection with the expenditures of the current year. I have expressed my condemnation of the assurance given to bondholders through the securities and exchange commission of the United States. I described this behaviour as inexcusable and condemned it in the strongest possible terms on one occasion when the minister was not in the house-and he seemed to think I had taken advantage of his absence in doing so. I repeated this charge in the minister's presence. As far as I know he has never felt it necessary to give any explanation to the house or to a committee of the house as to the reasons for his behaviour or in justification of what transpired.
I say again that the minister and others responsible in the government misled the house. Maybe they feel that because they have a majority here they are not bound to give an answer, that there is no need for them to account to the house or to the Canadian people. I am not one who uses words like "arrogance" readily, but I think the minister owes this committee some explanation of the failure of the government to live up to its assurances, or of its action in misleading the House of Commons and the Canadian public, for it can only be described as that. The Canadian people did not give this government a majority in parliament in order to permit it to ignore charges or fail to account to the people for its behaviour. This is not good enough.
I want to talk for a while today about the budget resolutions but not for the purpose of discussing the merits of the resolutions as such. We shall have a further opportunity, I realize, to discuss the iniquitous 2 per cent social development tax together with the other measures which the government has put

November 29, 1968
Supply-Finance
forward. Today I wish to comment on one group of the budget measures. Again, we shall have an opportunity later to discuss these on their merits. I wish to comment on a particular problem which the Minister of Finance has placed before the Canadian people by the manner in which he is proceeding. I believe this is another indication of something approaching callousness and indifference or, indeed, injustice on the part of the minister and the government. I am referring to the changes which were proposed in connection with inheritance and gift taxes.
Inheritance taxes were formerly of concern mainly to a relatively small group of the well-to-do. Now, with the proposed reductions in the exemptions, they will be of real concern to hundreds of thousands of Canadians, a substantial proportion of the people of this country. This situation arises not only because of the lowering of the exemptions but also because of the continuing inflation which exists. The minister said he wanted to help transfers to be made between husbands and wives by exempting them from transfer tax, gift tax or inheritance tax. In the process of doing so he has proposed to make it infinitely more difficult for a son or a daughter to help a parent or for a family to maintain a family farm or a family business. There can be no doubt about this.
[DOT] (12:40 p.m.)
The new rates will make it virtually impossible for a family to maintain control of a substantial family business, a large family business. This, of course, is bound to lead to more U.S. takeovers and this sort of thing, but we will have an opportunity to speak about this when the measure is specifically before us. But there are thousands and thousands of thrifty Canadians who, through the course of their lives, have built up farms. In the past they have been able to arrange the transfer of their farms over a period of time through a farmer-son partnership or something of that sort, and now the Minister of Finance proposes to make that pretty well impossible in the future, or at least to create much difficulty.
There is a lot of talk about maintaining the family farm. There is also a lot of emphasis on the need for maintaining the efficiency of family farms for them to be competitive. Yet obviously the minister is making it much more difficult for a family farm to maintain its capital position and remain in a viable state. Certainly this measure strikes a heavy blow at the concept of the family farm, and a

heavy blow at the efforts of anybody who has built up a small business to keep it in his family in any satisfactory condition.
I only mention these details today for the purpose of emphasizing the importance of the subject that I now propose to develop. I have done this to emphasize that what I am talking about concerns not only a few wealthy people in Canada but indeed hundreds of thousands of Canadians. We will have plenty of time to discuss the details of the legislation, but my point today is that legislation which the minister announced, I think it was on October 12, the date of his budget speech-I do not want to be wrong about this date but I think it was approximately October 12-has not yet been introduced and there is no sign of it. As far as we know it will not be made public until some time in the new year. My point, and I want to make it as emphatically as I can, is that this legislation which is to take effect as of October 12 will not have been seen by anybody in October, November or December, and I do not know about January of next year.
Here is legislation that affects the plans, the wills and the intentions of hundreds of thousands of Canadians, and yet the Minister of Finance for some reason apparently thought it was perfectly all right for him to announce on October 12 that these changes are going to be made and leave hundreds of thousands of Canadians hanging in limbo for months and months and months.


Some hon. Members:: Shame.


Robert Lorne Stanfield: The minister says he is anxious to try to help transfers between husbands and wives. I cannot help but notice the comments that experts have been making on the budget resolution, its lack of clarity in a number of respects, the confusion it has created, and the fact that nobody will know where they really are until the legislation is introduced, in fact, until it becomes law.
In the meantime everybody is hanging in limbo. I do not know what is going to happen, what the position is of people who have had the misfortune to die or will die between the time the minister made his announcement and the time the law becomes effective. I do not know what anybody can do in the meantime to try to protect himself with regard to this measure. Lawyers and others are making it very clear that they are finding it exceedingly difficult to give anybody any advice. The one thing they are saying is that a very substantial percentage of Canadians will have to
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change their wills or be penalized. Surely, Mr. Chairman, this is not good enough.
Certainly we do not know what the new law will be in any detail. The minister announced it would be retroactive to October 12. There are many doubts about the detailed meaning of the resolution. Incidentally, it is said by some that it will be years before litigation in the courts really clarifies some aspects of what the minister has in mind, but there are many doubts now which the legislation will probably clarify when it is introduced and passed, although I may be optimistic in this regard.
As I say, there is no sign of the legislation, no sign of it being introduced before the new year. Yet it will have a profound effect upon hundreds of thousands of Canadians. There appears to be at least four months of unnecessary-


Albert Béchard: Order. It is my duty to rise, report progress, and request leave to sit again later this day.
Progress reported.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, it is the desire of the Right Honourable the Deputy of His Excellency the Governor General that this honourable house attend him immediately in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
[DOT] (12:50 p.m.)
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give in Her Majesty's name, the royal assent to the following bills:
An act to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways System for the period from the 1st day of January, 1968, to the 30th day of June, 1969, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and by Air Canada.
An act respecting Atlantic Peat Moss Co. Ltd.- Mousse de Tourbe Atlantic Cie Ltee.
[Stage Direction]
The house in committee of supply, Mr. Bechard in the chair.
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Albert Béchard: Order. House again in committee of supply. It being one o'clock I do now leave the chair.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Robert Lorne Stanfield: Mr. Chairman, before lunch I was explaining to the committee the confusion and injustice created by the Minister of Finance as a result of the imprecise manner in which he proceeded to announce the changes in gift and estate taxes. I should like to continue on this quiet Friday afternoon to give the Minister of Finance the benefit of another view in respect of one or two other aspects. I mentioned this morning that the budget speech was delivered on October 12. I believe it was delivered on October 22 and I should like to be as accurate as possible.
There appears to be an indication that for three or four months we will be uncertain about these taxes because of the content of the legislation concerned. In respect of anything that is far reaching we may experience several years of uncertainty so far as judicial interpretation is concerned. I do not intend to complain about the judicial doubts at the moment but rather about the procedure the minister has followed which in turn has created serious confusion in the minds of not just thousands but hundreds of thousands of Canadians. This is inexcusable.
It is my hope that the minister will not attempt to justify the creation of this confusion by saying how difficult it is to get measures before the house. I do not think there is any question of emergency in this regard. The minister has said that as far as revenue and expenditures are concerned things will pretty well balance out, at least so far as this aspect of his budget speech is concerned. I refer, of course, to the changes in estate and inheritance taxes.
The minister obviously chose his own time to announce these changes in the law. They should not be judged in terms of revenue but rather in terms of their effect on the Canadian people. Perhaps the minister introduced these changes at this time to distract attention from the size of the budget deficit and the general increase in taxation. Certainly he has created not only additional but enormous confusion.

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I am wondering how estates of individuals who have died since the minister's budget speech are being administered. What effect is this uncertainty having in respect of insurance policies payable to widows and children? I am sure the situation cannot be exactly felicitous at the moment. Having announced these changes, the minister ought to have proceeded immediately to bring them into effect, thereby eliminating this confusion and bringing assistance to these widows as quickly as possible. If the minister intended to wait several months, why did he include the element of retroactivity?
The size of gifts that could be made free of taxation under the law as it existed prior to October 22 was not substantial. No great harm could befall if citizens were able to operate under the old laws so far as exemptions were concerned. Those Canadians who might have chosen to make large gifts in order to benefit from the old rates could possibly do so during this interval. This situation could have been covered by making the new rates retroactive so far as gift taxes were concerned.
As I pointed out this morning, I do not think the minister or the government fully realized the effect these proposals would have on institutions such as the family farm. Quite apart from these effects, I do not think there is any real justification for this retroactive feature regarding testamentary provisions. Certainly, even under this government, nobody is going to be in a hurry to die just to get the benefits of certain tax rates which will prevail for a limited period of time.
[DOT] (2:40 p.m.)
I suggest that the proper procedure to follow with regard to a measure designed to reform taxation-and the minister put this forward as an interim measure of reform- would be to introduce a draft bill for study and clarification because when we are considering measures which have to be fitted into the total tax structure in order to see how they work out there are all sorts of complexities that even the minister and his staff are not likely to see at first glance. So I suggest that the proper course would be to have some procedure whereby people could express their views and which would elicit comments from others outside the government service who have to work and live with these laws from day to day.
I suggest this is an improvised reform. We had improvised estimates last winter that

proved to be very wide of the mark despite the most firm assurances concerning their validity. Now we have an improvised reform introduced in such a way that there will be the most severe confusion for months at least and maybe irremediable hardship for some people who get caught in the meantime.
The minister has put this measure forward as one which will be of assistance to wives. It may in the end assist wives after the confusion has passed but it will certainly assist one group of people, namely lawyers, because it will result in wills being drafted and perhaps redrafted by the thousands if not by the hundreds of thousands.
The minister has taken this course and has created confusion. I say to him that the best thing he can do now to minimize the difficulties that exist and help the Canadian people get out of the mess he has created is to immediately produce the draft bills-because more than one is required-and to place before the house and the people of the country the detailed legislation. I hope the minister does have the legislation ready. I think he should no later than Monday place before members of the house and the country draft legislation so that at least some of the confusion resulting from the bare bones of the budget resolutions will be removed and the process of consideration and analysis of the legislation can be started.
The week end is approaching so I will be content to wait until the first day of the week when I would most earnestly call upon the minister to circulate among the members of the house draft legislation relating to these proposals. The legislation must be ready inasmuch as a month ago, on October 22, the minister announced his changes. Let us have it in draft form so that we can at least start to remove the confusion which exists.
I should now like to turn briefly to two other areas. I wish to express my concern, regarding the attitude which the Minister of Finance has adopted toward the country and the provinces with regard to financial questions in general. I will not go over the ground which I covered in the budget debate but I again call the minister's attention to the effect his stand will have upon the pending priorities in the country, the effect it will have on increasing the disparity in services in various parts of the country, and the unfortunate effect his attitude will have on federal-provincial relations. I am referring to the minister's imposition of restraints and at the same time his tendency to push the provinces into new programs. Generally speaking, I do not
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want to exaggerate, but I think there is a very real danger that in a short period of time this government, through the medium of the Minister of Finance as well as the Prime Minister, will cause a serious deterioration in federal-provincial relations and will very rapidly lead the country close to disaster in this area.
I urge the minister to change his approach in another area which I will mention briefly. I refer to his attitude toward the problems of international currency. Judging from the minister's public pronouncement I think he is unbelievably complacent with regard to these problems because he has given the Canadian people the impression that last week's problem was largely one of European concern. His statement may have been intended to give reassurance about the strength of the Canadian dollar but the fact is we in Canada are immediately affected by the restrictions which Great Britain has imposed upon trade as a result of the currency difficulties. Surely we must all be very concerned about the way that various countries are reacting to these currency difficulties by adopting policies of restriction which cannot help but have a dampening effect upon international trade and which, if they spread, could lead to a very serious increase in the difficulties in international commerce.
I think the minister should be taking initiatives to try to bring about measures to strengthen the international currency system, and he should be doing this not only through his officials. I think there is no country in the world that has a greater interest in this or has more to fear from the existing situation than has Canada, despite the assurances of the minister. I say this because it must be very clear to every Canadian that, for example, every time the United States feels it necessary to take some particular measure to project their currency position, that measure is likely to have an effect on Canada because of the extent of our trade with the United States. When the United States imposes particular measures of a restrictive nature to preserve its cash position, what usually happens is that the Minister of Finance has to beetle off down to Washington to get an exemption from that restriction and thus yields a further measure of Canadian independence.
It is pretty well accepted that as a result of efforts we made in 1963 and again last winter to get an exemption from the United States
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we really do not have any independent monetary policy left in Canada. I am not exaggerating. The minister can make a face about it, but the fact is that as a result of the extent to which we are tied in by the arrangements we have with the United States in this respect, our effective autonomy in the area of an independent monetary policy is very limited. It seems to me that every time there is a monetary crisis which affects the United States or ourselves there is a very real chance it will result in a further diminution of our independence as a country.
In addition, there is our general interest in doing everything we can in Canada through our international associates to try to achieve happier methods than we have today of providing for an orderly adjustment of currencies as required, and not just have countries resorting to the kind of restrictive practices to which they are resorting today which, as I said, when they involve the United States and ourselves usually result in some reduction of our independent position. I say to the minister, therefore, there is no country that has more reason than Canada to be concerned about this subject. When he gives the Canadian people the impression that the existing difficulty is not of much concern to us but is primarily a European concern, I suggest to him he is doing no service to Canada in taking this line.
[DOT] (2:50 p.m.)
I do not wish to take any more time of the committee this afternoon because these are subjects to which we will be returning from time to time as they are brought forward. I deplore the almost unbelievable complacency of the minister with regard to our international monetary problems. I deplore his almost unbelievable arrogance-and I use that word advisedly-in giving no explanation to the house for misleading the house with regard to the estimates. I deplore the attitude adopted toward the provinces, not so much for the provinces as for the effect it will have on the people in various parts of Canada and on the governmental services available to them, and the effect it will have in different parts of Canada on the growth rate and on the growth rate of our country as a whole. I deplore the effect this arbitrary attitude will have on the distortion of expenditures and the effect it will have on the lives of individual Canadians.
As I have indicated today, sir, I also deplore the views the minister has expressed with regard to his tax measures and the effect

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of those measures on not a few hundred or a few thousand but many thousands of Canadians in a quite unnecessary way. We have had a few months only of a majority government in this country. I think the minister has become high-handed in his attitude toward these problems. I am not talking about his morality. When I was speaking in the budget debate I said the government was like a bunch of western badmen, shooting hell west and crooked. This came out in Hansard as, "a bunch of western badmen and just as crooked".


Stanley Howard Knowles: Hansard is always right.


Robert Lorne Stanfield: I was not presuming to pass judgment on the morality of the minister. However, I am saying that the people of Canada did not give this government a majority to act in such a way as not to be responsible to the house, to act in a highhanded way toward the people of the country, to be careless of the problems it is creating for the people of the country. If I may presume to give the minister a bit of advice, Mr. Chairman, I think he must learn very quickly to distinguish between firmness, which is obviously very necessary in a minister of finance, and arbitrary action and complacency which are very unfortunate in a minister of finance.


Mr. Saltsman:: Mr. Chairman, on other occasions in this house we have pointed out how unfair the budget was in its impact on the little men of this country, the ordinary taxpayers, in view of the fact that the 2 per cent social development tax stops at a certain level and leaves those with higher incomes relatively free while those in the lower and middle income brackets have to bear the full brunt of the minister's austerity program. This afternoon I should like to discuss something that goes beyond equity and perhaps deals with whether this country is going to survive at all in view of some of the statements that have been made by the Prime Minister and some of the past attitudes of the government. I hope the minister will lift himself out of the boredom into which he has now sunk. There is not much time left, only another two hours. He sits there and reflects on how little he thinks of this debate. His head is sunk in his hands; he scratches his head and yawns.


Mr. Benson:: Mr. Chairman, I rise on a question of privilege. I have been sitting here listening very attentively to everything that

has been said by the Leader of the Opposition and I am now listening attentively to my hon. friend. I certainly have the right to make notes and to read those notes.


Max Saltsman: I accept the minister's statement about his attentiveness and can only say that I marvel at his great dexterity which makes him so capable of performing all these functions simultaneously.
The other day, Mr. Chairman, the Globe and Mail contained a report of an interview or discussion between Jay Walz, correspondent of the New York Times, Seymour Topping, foreign news editor of the New York Times, and the Prime Minister of this country. The Prime Minister was asked the following question:
Are you worried by the influx of U.S. capital investment, in the sense that this investment might result in an American economic domination of this country?
In reply the Prime Minister stated:
I think the problem of economic domination is somewhat inevitable-not only of the United States over Canada but perhaps over countries of Europe as well.
We have long suspected that the Liberal party had committed itself to continental integration, that the Liberal party has no concern about the future of Canadian nationalism, and this statement of the Prime Minister confirms our worst fears. I am not standing here today with the objective of haranguing the Minister of Finance. I said what I did to gain the minister's attention. I wanted his attention because I want to ask him some questions rather than to stand here and say I have all the answers, that I can tell him how to run the country. I should like to pose some questions to the Minister of Finance and to the members on that side of the house.
Perhaps the minister has some answers to these questions. After all, there are some members who recall some of the statements made by the present Minister of Finance when he was on the opposition benches. At that time we had reason to hope that things would be different if he became minister of finance. After all, he was the white hope of Walter Gordon; this was the man the former minister of finance felt had a genuine interest in the future survival of this country. This is the man who, from the opposition benches, denounced those forces that were working against Canadian nationalism. Today he is a powerful figure; he is the Minister of Finance. He sits in that exalted place and he has enormous influence in terms of the policies this
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country will be following, the kind of objectives that will be sought through the use of budgetary policies.
I ask the minister if he agrees with that statement by the Prime Minister, whether he believes that Canada is doomed to extinction, that it is inevitable our economy will be dominated by the United States? Does he believe that if it is dominated by the United States there can be such a thing as Canadian independence, that we can pursue social policies different from those directed by the United States?
[DOT] (3:00 p.m.)
I am not going to take a definitive stand on the question of foreign ownership. I am not at all convinced that what stands in the way of Canada developing her own policies or maintaining her independence is foreign ownership. I think that excuse is too glib and too simple and I do not buy it at all. I think that what is standing in the way is the refusal of the government to stand up to corporate power, whether it be Canadian, American, British or any other corporate power, and to say that the government of Canada as elected by the people of this country should decide the nature and scope of our society, that our lives are not going to be ruled by the makers of toothpaste and underarm deodorant.
Policies should be formulated by this parliament rather than in the board rooms of corporations. Our policies must be debated by this parliament rather than foisted upon us by faceless corporations. We must declare that taxation will originate in this parliament instead of our being subjected to the kind of taxation that is imposed upon us by corporate power. Let us make no mistake about that, Mr. Chairman. Our corporations tax Canadians just as effectively as does the government, perhaps more effectively because Canadians do not always see such taxation whereas they do see taxation by government. The corporations, aided and abetted by our tax system, decide on the kind of expenditures they are going to make and the kind of policies they will pursue. As a result of our tax system all of us pay for this, whether we buy the specific products of the corporations or not.
I am prepared to sit down at this moment, Mr. Chairman, if the minister would tell me whether he believes that this country is inevitably doomed to economic domination by the United States. Does the minister wish to answer at this time?
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Edgar John Benson: The simple answer is, no.


Max Saltsman: Well, Mr. Chairman, it is just not good enough to say "No". The minister is contradicting the Prime Minister who has said that he believes this to be the case. It is all right for the rest of the cabinet to fly kites, but surely the Prime Minister is not flying kites. I think that more than a casual "No" thrown across the aisle is required.
What we want to know, Mr. Chairman, is what sort of policies the government is going to bring in to ensure that this is not allowed to happen. We want to know what sort of commitment the government is going to make to the Canadian people that this will not happen.
We live in great fear of retaliation. Liberal after Liberal has risen in this house and across the country, including no less a Liberal than the former prime minister, Mr. Pearson, and spoken of this fear. Mr. Pearson made a speech in the west in which he intimated that in this country we really cannot have an independent policy because 60 per cent of our exports go to the United States. He asked how we can maintain our independence when we have so many eggs in the one basket.
We seem to have this great fear that the United States will do dreadful things to us if we try to assert ourselves, if we try to develop a policy in regard to NATO that is suitable to Canada, or a policy in regard to NORAD, or if we make a move to recognize China before the United States is ready to grant us permission. There is a fear that we cannot do any of these things, and this despite the rather enlightened statements made by those who ran in the last election. Now that these same gentlemen are in office their statements seem to be forgotten; certainly they are not reflected in government policy.
What are we afraid of? It seems to me that the United States needs Canada infinitely more than Canada needs the United States. This talk of retaliation is really just a bit of nonsense. I have gone over this in my own mind and have tried to visualize in what way the United States could retaliate in any real fashion that would be of long run significance to us, and I have failed to find such ways. It seems to me that the great power of the United States rests in the chicken heart of the government and is not based on sound economic grounds. If the United States chose to invade Canada, of course, or to send a military force across the border, I do not think there is much question in my mind or anybody else's mind that that would be the end

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of the ball game. But I doubt that we need worry about that sort of thing because I do hot think the United States is really interested in retaliation of that kind. What we are discussing here is economic retaliation.
In this regard, Mr. Chairman, what can the United States really do to us? Would they stop buying our iron ore? They need it. Not only that, but in some ways they have given us a hostage to fortune in the sense that so much of our raw material resources are owned by the United States. They would hurt themselves in two ways. Not only would they not get the supply of ore they need to keep the mills of Pittsburgh operating but they would also hurt the interests of their own investors. I suggest that those who are afraid that the United States would stop buying from Canada are really scaring us with an empty threat. The Paley report of some years ago pointed out that the United States would become increasingly dependent on raw materials from abroad, particularly from Canada. Therefore, I think we can assert our independence and can take a stand without any great fear of retaliation.
Sometimes, Mr. Chairman, ministers of finance have a phobia about capital flows, about our money supply from the United States being cut off. Actually, all of the evidence seems to indicate that we are almost completely self-sufficient in this country in the matter of capital formation. If we are not completely so at the present time we could make ourselves self-sufficient if we taxed foreign corporations as adequately as the Carter commission suggested they should be taxed. Much of the potential taxation that is not collected in this country is money that is of benefit to foreign corporations.
As the result of this fear about the inflow of United States capital being cut off, Canada has made all sorts of suicidal arrangements that restrict our ability to influence monetary policy in this country. We probably agreed to a fixed exchange rate in return for access to the United States capital market. The Liberal party prides itself on being businesslike. It likes to talk of the close relationship that exists between it and the chamber of commerce. The chamber of commerce is enthralled with it. But it strikes me that the Liberals are poor businessmen and have made bad deals for the nation.
The other day during the debate on defence production I was pleased to be told that we do not have to worry about the end of the war in Viet Nam. If that war comes to an end

and some of the defence production sharing agreements we now have with the United States are not renewed, the factories of Canada can switch over to other kinds of production. I was pleased to get that information because I think we should be getting out of shared cost defence agreements with the United States. I think the government should stop scaring the working people of this country into believing that we have to stay with these agreements because there is $300 million worth of work involved, as though no other work were available. It is as though these people are to be committed to making bombs and bullets used to kill people in a war we do not approve of, in a war in which our government has remained neutral.
[DOT] (3:10 p.m.)
Is it right for the government to slant its words in this direction? Is it right for the government to say to the Canadian people, when some of us ask for military production to be stopped because we do not wish to participate, even by the making of armaments, in a war we do not approve of: Oh, but we are preserving your jobs; that is why armaments must be made; your jobs must be preserved. I think it is quite dreadful for the government to take this stand and I hope the minister will take the opportunity to comment on this situation.
It seems to me that nature was very good to Canada. It gave us enormous wealth and great opportunity. I think Canada was very fortunate in its early leaders, who knew that to create a nation with a different sense of values they would need to be imaginative, bold and strong. Our early Canadian leaders overcome the obstacles of distance and geography and welded our nation on the northern part of this continent. They could easily have said: The economic lines on this continent flow north and south, and abdicated their responsibilities. But they did not. They made enormous sacrifices to create a special kind of country and they were successful. Distances were overcome, the nation survived, and it has prospered. But just at a time when the prophecy of another statesman who said that the 20th century will belong to Canada may come true, we find that the Prime Minister and the government do not believe the prophesy; they do not believe it will come true and do not believe it needs to come true.
This house is entitled to answers from the government. We want to know what sort of fiscal and financial policies generally the government will bring in to make sure we are
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masters of our own house and that the people of this country have a future. I do not think we need to pay, as some on the government side have suggested, a large price for our independence. If anything, our independence ought to make us more prosperous than we now are. Although this debate cannot continue for much longer I look forward to hearing the minister say something on this subject that will assure our people we have not been sold out completely, as the words of the Prime Minister would indicate.


Henry P. Latulippe: Mr. Chairman, at the very beginning of my remarks, I would like to say that economic balance is impossible in the present context without financial reform.
Recently, I attended the meetings of the United Nations, which must face up to the communist expansion in the world. In order to do that, we have no solution other than to arm ourselves to the teeth and ask every member country for a bigger contribution.
On the other hand, at the meeting of the economic committee, of which I was a member, I said that in order to fight communism, we should not resort to weapons or force, because I think we shall not defeat communism by using force against force.
In fact, communism is an idea and an idea must be fought with another idea, stronger, deeper, more logical, easier to understand and better suited to the economic objectives and realities of each country.
The outcome of all that is that more money is asked to revive the arms race, to buy more arms and stockpile more war material, to face the communist threat throughout the world.
There again it has been found that everything is simply an economic and financial matter, each country knuckles under again and wonders how to finance its contribution and discharge its commitments. Everything depends on each country's finances.
So, I simply said to my colleagues: If you want to finance your military organizations, if you want all countries to contribute adequately and according to their responsibilities, you must set up a financial organization which will enable every country to contribute its share, if there are no other means, without depriving the people of the necessities.
Here in Canada, we have a huge debt which cripples all our initiatives, all our economic activities. We pay too much interest on money. Federal and provincial debts are
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immeasurable, as well as municipal, school
and individual debts.
We are now at a stage where we can no longer pay the interest on our debts; however, we must find billions of dollars to cope with communism, to organize ourselves and meet our commitments.
If we cannot meet our obligations reasonably well under the present system, let us try to improve it, let us try to find a few practical solutions to balance our economy again. If building destructive machinery is physically possible, it should also be financially possible. Something that is physically possible, should logically be possible, financially and economically. This is the point I want to make.
I should like to go over what has been done since June 25, since the present government has come to power. The claim is that great things have been done. But I say, that the people are being more and more dispossessed, and that they have new economic and financial problems. That is what the present administration has brought.
How is it that thinkers, free men like the members of the government should suddenly become the slaves of the old routines, customs and disciplines of the Liberal party? This was supposed to have been something new. They were supposed to have found a new organization to balance the economy without increasing taxes. They were supposed to find financial ways and all. Nothing at all that has been done.
A series of reforms were made in the departments, and in the office staff of the right hon. Prime Minister (Mr. Trudeau). That is not at all where reforms should be made. The people are not lacking anything there. But they do in private homes, residences and slums.
Since the present government has come to power, interest rates have been increased. Those who used to receive from 2.75 per cent to 5 per cent will get 6 per cent, 7 per cent and even more in the future, from $15 to $30 more per $1,000, from $15,000 to $30,000 per million. The poverty of the millionnaires, or lesser capitalists, does not need to be abolished. There is something more pressing than that, like increasing family allowances from $6 or $8 a month to a reasonable level, commensurate with the increase in the national production and the increase in the cost of living.
Up to $60 per month and sometimes $120 per month is distributed to foster homes and

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orphanages for children of the same age. Can an unmarried person understand that?
The government does not lack money, but residences and private homes do. However, public administration goes on as before, increasing the expenses of departments and distributing increasingly considerable sums to political parties, while the individuals lack money.
The government members are constantly increasing the income of citizens who already have one thanks to their employment or their capital, but they fail to increase the income of citizens who do not have any because they are unemployed or do not have any capital. However, those individuals who are unemployed and have no capital need some income to obtain the necessities of life for their subsistence.
[DOT] (3:20 p.m.)
Let the government change this old-fashioned way of administering the country and the Canadian people. Let them think of groups of citizens without money and without income before raising the profits and the reserves of institutions, companies, banks and rich people, all of whom are already flourishing economically.
Mr. Chairman the government is still spending its time in promoting productivity, the profits, chances of success, interests and capital surplus of the rich and powerful in Canada, either themselves or their companies. The gap is widening between the rich whose income is increasing and the poor who pay more and more taxes in order to pay for rising interests on public debts. Small wonder that this national imbalance is becoming worse and worse. This must be changed if we want to establish a just society and if we want to have a united Canada.
Have the members of the present government forgotten or, indeed, ever known that companies and individuals can capitalize $28 billion on a production of $68 billion, in 1968, after having lived well and paid their taxes? Have they forgotten or even realized that, at the same time, the government has an administrative deficit every year, and that many citizens and families live from day to day, lacking the necessities of life and cursing the government, progress and society? The government has not thought or ever known what could so easily be done.
Have they ever realized that it would be easy to make a few changes, not within institutions, organizations, banks, companies,
IMr. Latulippe.]
structures and systems, but merely in the basic philosophy of the right hon. Prime Minister, the 29 ministers and the 264 members of the government, so that every citizen who is not working and has no income may be given a share of the revenue of this production of $68 billion in 1968, or out of the capitalization of $28 billion, which is really becoming too ambitious and even harmful and dangerous for the economy.
All you have to do is think about it. The present government can easily set the situation to rights and re-establish economic stability on a nation wide scale.
However, this national economic stability will not come about by itself. It will only be brought about by change; it must be given new directions and steps must be taken to readjust it once more to the actual situation in the country.
Before going any further, I should like to show the graph line of the Liberal budget. The October 24, 1968 edition of La Presse says, and I quote:
Of the eight budgets brought down by the Liberals since they came back into power five years ago, four raised the personal income tax, one reduced it and three left it unchanged.
Since 1963, federal budgets are divided as follows:
June 13, 1963: Mr. Walter Gordon and his "realistic budget" are soon in hot water, and the budget has to be appreciably modified; however, the minister persists in his determination to bring no change in the personal income tax.
April 26, 1965: anticipating a $300 million deficit, Mr. Gordon reduces by 10 per cent the personal income tax. In one year, the government loses $265 million A married man with two children earning $5,000 a year was to benefit from a $30 reduction which brought down to $208 the amount for that fiscal year.
March 29, 1966: Mr. Mitchell Sharp invites the Canadian people to "spread out prosperity". He restores for the most part the reduction granted by Mr. Gordon. The low wage-earners still benefit from a 10 per cent reduction, but on the whole, the government takes back $210 million out of the $265 million lost the previous year. The tax reduction for the taxpayer earning $5,000, now amounts to only $20.
December 19,	1966:	Mr. Sharp's mini-budget
changes the 4 per cent tax on taxable income distinct from the basic tax, tax which pays most of the cost of the old age pension. Increasing from $120 to $240 the maximum amount a taxpayer can pay in that regard, Mr. Sharp increases to $135,000,000 per year the fund which makes it possible to assure an income to pensioners. As a result needy pensioners can get a $30 supplement to their pension which amounted to $75 a month that year.
June 1, 1967: Hoping for a new deficit to fight the recession, Mr. Sharp does not tamper with the income tax rate.
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November 3, 1967: Mr. Sharp wants to levy a 5 per cent surtax on basic tax over $100, limiting the increase to $600 for each taxpayer. That bill is defeated in the Commons, and Mr. Sharp proposes a surtax of 3 per cent, illimited, which is finally approved in March of this year.
Effective for 1968 and 1969 only, the surtax will yield $105 million in 12 months. The family-head with a yearly income of $5,000 will have a tax increase of $3.
October 22, 1968: Mr. Benson levies a "social development" tax of 2 per cent which will be effective on January 1, 1989, and which applies to the taxable income, as the old age security tax. Contrary to Mr. Sharp's surtax, this tax does not apply to the basic tax only and, therefore, the yield should be higher. Mr. Benson thinks that this tax of $46 for the taxpayer with an income of $5,000 will yield $440 millions to the government in one year.
That is, Mr. Chairman, the administration, the logic of the present government. The present government is doing eaxctly what its predecessors have done. You do not have to be a genius to understand the situation. Things have not changed an iota in the last five years, the last ten years or even since Confederation. This financial nonsense, Mr. Chairman, adopted in wartime is accepted in peacetime. With the help of borrowed money at exorbitant rates, we are trying to progress in peacetime. In order to pay our wartime debts, we are increasing the value of bonds issued to finance the wars to 2, 3, 4, 6, 7 and even 8 percent. Such are the ways of the present administration.
[DOT] (3:30 p.m.)
They imagine themselves able to set things straight, while the economy is tumbling down. There seems to be no ways to find a balance. I think the hon. Minister of Finance is beginning to have headaches. If he would think it over and listen to those who might have some solutions, the situation might improve. I believe it would be easy to decrease the taxes and I believe also that it is easy to have everybody pay taxes on an equal basis rather than having an income tax form for the small taxpayers and one for the others. Under the present system, everything is taken from the poor and given to the rich. If means cannot be found to balance our economy, well, let us take a look at the income tax rates and let justice be done. The most outrageous injustice ever done in any country is found in our income tax rates. It has created widespread dissatisfaction. It is what is bringing on the revolution in Canada and it will lead us to war and disaster. Injustice reigns in the field of taxation.
The Carter report, up to now, has offered logical solutions; however, they have not yet
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been followed; they were not even looked into. Like all the other reports, the Carter report will probably remain on the shelf and no attention will be given to it, although it cost $3i millions.
Mr. Chairman, the Berlin or Moscow dictators, as well as the modern banker, grab the people's money and, being dictators, use it either to make guns, or to get people into debt; both types despise mankind, both want to dominate the world. The cult of the race, the cult of the pocket-book, a terrified world, cowering under a deadly weaponry or crushed by ruinous debts which it cannot repay: bend or die, pay or croak, such is the situation and everyone knows it.
Prosperity is not dependent upon a perpetually favourable balance of payments, Mr. Chairman. A monetary instrument does not need gold to play its role. It is unused money that causes unemployment of men, and an injection of new money would revive the general activity. With a currency regulated according to the needs of a country, it would be possible to keep that country out of economic depressions. If the volume of money regulated by the state removes stagnation, money in the hands of the state would guide the various activities and constitute a real dictatorship by the government over the economic life of the country. It would replace bank dictatorship by political dictatorship.
If, on the contrary, Mr. Chairman, by deduction, money originally placed in the hands of the consumer were to guide the economic life, according to the wishes of the consumer, that would generate social and economic democracy where freedom could develop against all forms of planning or dictatorship as imposed upon us today.
As far as workers' salaries and interests paid to investors are concerned, planning will never succeed in solving this problem, since progress is reducing the number of people earning a salary. It is because we cling to that policy of salaries and interests that millions of people earn a bare living and curse progress instead of blessing it. This is why Social Credit is asking to distribute dividends to everybody, so that everybody may share in progress.
I say: "share in progress". Progress is the result of science which, together with the personal work of inventors and investors, who are rewarded in the usual way, which is their justification. But accumulated science, which is common capital, plays an important role in invention and progress. After the capitalist and the inventor, as well as the

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workers, have been rewarded, that share remains of accumulated science which belongs to everyone.
That is why all the good things which remain unsold, all the good things that the salaries and interests do not buy, belong to everyone. Everyone is entitled to his small share, instead of letting it go to waste and stopping progress. And who is to see that everyone shares in the progress? The present government, seeing it represents everyone and is responsible for the well-being of all.
There are several ways of allowing men to purchase their share of progress. First of all, by lowering the price of goods so that more can be bought per dollar; secondly, by increasing the number of dollars in everyone's hands; thirdly, by lowering the absurdly high rate of interest we are subjected to and tolerate today.
Progress in the volume of production requires progress in the volume of money. As enormous as it is in the first case, it should become enormous in the field of distribution. Those who stick to the old methods of financial distribution, as we do today, are the enemies of progress and distribution; they paralyse the growth of progress in production and prepare the progress of revolution. As progress distinguishes man from the beast, Social Credit distinguishes the intelligent from the imbecile.
The government of a country certainly has the right to administer, legislate, implement for the common good, for the common prosperity of all. The government has that right or, if you would rather, that legal power. It also have the physical power, the executive capacity, it can find the men, the equipment and the things needed to serve the community. But it happens that the government does not acknowledge it has financial power; it always stumbles across restrictions in the field of finance.
This means that in spite of its unquestioned legal power and unlimited physical power, the government stands still for lack of financial power. Even in the case of centralized and planned government, as a result of the bill on economic planning proposed by several honourable members, who are economists too, the same remarks hold true. Legal and physical powers are not enough without financial power.
The honourable minister takes good care to stay away from the financial power. That is why, while proclaiming the rights of each individual, while asking for as much legal

powers as possible for the lower organizations, we maintain that unless a financial power is also given to individuals, corporations and governments, the economy will remain paralysed, plans will stay on the drawing board, certain reports will gather dust, for lack of readers-the minister is aware of that-the citizens will remain poor and unemployment will rise, as is the case today.
At the present time, the number of the unemployed in Canada increases tremendously and within two months, we shall see what happens, as far as unemployment is concerned, in our beautiful Canada.
We do not object to the increase in the price of butter, to a gainful return for the farmers, for their products, but the reasons given by professors of economics are but a recognition of the figures. It is always necessary to adjust man, to adjust the consumer, to adjust the demand to the supply. We always do it the opposite way, and man is the victim.
When will they see the light and adjust the purchasing power? When will the Prime Minister, and the Minister of Finance bring the purchasing power into line with existing facts and situations? When will we see the great economists, highly paid and highly compensated by the system, ask for reforms in that direction?


The Acting Chairman (Mr. Richard):: regret to interrupt the hon. member, but his time is up.


Henry P. Latulippe: Would you allow me, Mr. Chairman, to ask the minister to open his eyes and his ears and to reflect on everything that may happen in the next few days.


Jean-Thomas Richard: Order, please.
[DOT] (3:40 p.m.)


Edgar John Benson: Mr. Chairman, I should like to make a brief statement with regard to the management of the public debt for the information of the committee and the public in connection with the announcement I am making in the normal way concerning the refunding of forthcoming maturities.
On November 21 I was able to announce the results of the highly successful Canada savings bonds campaign this year, and the plans to refund, through a new issue of $75 million of special 364 day treasury bills, a
November 29, 1968

part of the $125 million of special treasury bills maturing today. These bills were sold at auction yesterday. I am announcing this afternoon plans to refund the $100 million issue of bonds maturing on December 15 and at the same time to refund in advance $100 million of the $400 million of bonds maturing on July 1, 1969. Such advance refunding will be of assistance to us in our debt management operations in the next fiscal year. In addition I have thought it prudent to raise an additional $50 million in cash through this issue to cover a portion of the recent increase in our exchange reserves, which will be announced in accordance with the usual timetable on Tuesday morning next.
I think it may be helpful to review the present prospect for further public debt operations during the remainder of the current fiscal year. In doing so I must stress the tentative nature of our projections by reason of unforeseeable changes in our foreign exchange reserves and also in the pace of the normal seasonal redemptions of outstanding Canada savings bonds.
Over the remaining four months of the present fiscal year I may wish to make some modest increase in the volume of treasury bills outstanding. Such an increase would take the form of small additions from time to time in the regular weekly issue of 91 day and 182 day bills. Combined with the bond financing announced today a modest increase in the bill issue, on present expectations, would leave the government with adequate working balances at the end of the fiscal year. In mid March plans will be announced for the refunding of $410 million of marketable bonds maturing on April 1. It is quite possible that this financing will be designed to raise some new money to meet the seasonal decline in cash balances in April. As in the issue announced today, the possibility of advance refunding will be considered in connection with each new issue to facilitate the orderly phasing of our debt management program.
If unforeseen requirements for the purchase of foreign exchange or the redemptions of savings bonds result in a significant reduction in the expected level of cash balances at the end of March consideration will be given to some new financing dated in February, but on the basis of the present prospects I do not believe that such an issue will be necessary.
I hope that this statement will be of assistance to the bond market and to those planning issues during the winter season.

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Mr. Chairman, while I am on my feet I should like to comment very briefly on a few matters which were raised by hon. members opposite. First of all, I wish to return to the question of the recent developments in the international monetary system, which has been raised by the hon. Leader of the Opposition. The recent crisis which affected the Deutsche mark, the French franc, and indirectly other currencies as well, was a source of deep concern. We can therefore all be reassured by the development in the exchange market during the past week. The measures announced by Germany, France and the United Kingdom, and the evidence of their vigorous implementation, appear to have restored the stability to the foreign exchange situation. A good start has been made.
It is understandable, however, that a disturbance on the scale of the past fortnight has given rise to some questions about the monetary system itself. On November 25, members of this house suggested that the system should be re-examined once again by an international conference. Similar suggestions have been heard from a number of other quarters and, in particular, the suggestion has been made that there should be a greater degree of flexibility in exchange rates.
I believe it would be appropriate for me to stress that the attitude of the government of Canada toward the international monetary system has been far from rigid. Members are familiar with the many discussions which have taken place in a variety of international meetings in recent years. During the last five years in particular, those concerned with international monetary question have met regularly within the framework of such organizations as the I.M.F., the Group of Ten and O.E.C.D. Canada has participated actively from the outset in all of these discussions, seeking to find ways of improving the system and consistently supporting the great number of improvements which have resulted.
The most notable of these has been the scheme for special drawing rights. It is hoped that the enlargement of the powers of the International Monetary Fund to allocate special drawing rights, which will add to international liquidity in a manner subject to rational, international control, will soon be an accomplished fact. In this context members might wish to note the significance of the forthcoming amendments to the Bretton Woods agreement legislation, which will enable Canada to help achieve this goal at an

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early date. Improvements have also been made in the arrangements regarding gold. Less spectacular, perhaps, but at least as important, have been the continuing efforts to improve the balance of payments policies of countries, and the operation of the adjustment process. Canada will continue to participate in his process of evolution and will examine with interest every proposal for further improvement of the system. The advantages and disadvantages of such particular proposals as that to enlarge the permitted degree of exchange rate flexibility are debatable. Nor is it clear whether they can command the necessary degree of international support, since the events of the past fortnight gave added evidence of the strong desire of countries to maintain their currencies at existing levels.
[DOT] (3:50 p.m.)
I feel some concern that the recent monetary difficulties may cause our attention to be diverted from the progress which has been achieved in international trade and payments in recent decades. During the postwar period world trade has grown rapidly and has been liberalized to a very marked degree. This has been of great benefit to Canada as a major trading nation whose prosperity depends on world trade to a degree equalled by few, if any other countries. It also was achieved, despite the fact that international liquidity grew at a much less rapid rate, particularly so in recent years.
Imbalances have emerged and have occasionally given rise to crises. These difficulties, however, have been contained by the adoption of appropriate economic and financial policies by industrial countries and, in the short run, by international support operations, all of which evolved within the framework of international consultations. I might refer in this context to the substantial improvement in the balance of payments of the United States which recent statistics have indicated. The first order of business therefore is to press on with these tasks and implement the plans which have been made to ensure future growth of international reserves.
The Leader of the Opposition raised a few other matters which I think are worthy of comment. First of all he referred to the estate and income tax resolutions. When I introduced the estate tax and income tax resolutions in the house they, of course, included changes in taxation of insurance companies in Canada. These are very complex changes and

I indicated at the time that there would be discussion and reviews made after hearing from people in respect of these particular measures. I indicated also that I would not press these changes, with the result that we might have bad taxation law, because I personally do not want bad taxation law in Canada.
Having regard to the estate tax changes, they were made on October 22, budget night, because it was necessary to make such changes effective at that time, at least I believed it was. I still believe so, because of the many things that can be done during any intervening period of time. This is not retroactive legislation. Tax changes are almost always effective as of budget night, as my hon. friend will recall from past experiences. Perhaps I should say to my hon. friend that we have really had very few inquiries in respect of estate tax changes. We will be happy to consult with people, and with the professions, if they wish to come to us at any time. People will be available to talk to them because we want to end up with good law which will be effective.
There may be some period of uncertainty, as there always is when substantial changes in tax legislation are made. I hope this period will not be unduly long. I would have dealt with these changes now if we had the necessary time, and I am not trying to use this as an excuse because we are moving forward at this time. We hope to pass these measures in January, and if one checks back on former legislative changes in the tax field he will find that this will be one of the fastest changes to estate tax laws that has taken place in this house. Perhaps there will be a longer period of uncertainty than there should be. However, if it is passed within two, two and a half or three months it will still be one of the fastest changes.
There are a few other questions raised by hon. members.


Stanley Howard Knowles: Would the hon. member permit a question? Am I correct in assuming from what he has said that he does plan some changes in the estate and income tax legislation?


Edgar John Benson: No, I am not contemplating changes at this time, but there are some things which were left open. If the hon. member read my budget speech carefully he will know that in respect of the determination of investment income by insurance companies to
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be taxed, there are some matters for consideration. We felt in this regard that consultation would be useful. I have no intention at the present time to change the resolutions, to answer the hon. member's question. The Leader of the Opposition also raised a number of other questions, and deplored this and that. I came to the conclusion that the real reason for his deploring this and that lies in the fact that the Canadian public did not elect him as Prime Minister on June 25.


Some hon. Members:: Oh, oh.


Edgar John Benson: I have heard that hon. gentleman deplore so many things on so many occasions-


An hon. Member:: You have no cause to say that.


Edgar John Benson: The hon. member has received answers from the President of the Treasury Board, yet he said he has not received explanations regarding particular questions. In any event let me move on to the questions raised by the hon. member for Waterloo. He criticized me for not paying attention. I note that he is not even in the house to hear my reply-


John Gilbert: Mr. Chairman, I rise on a question of privilege. The hon. member for Waterloo is now attending a radio broadcast and he is unable to be here. I think it is unfair for the minister to make such a statement at this time.


Edgar John Benson: I am sure the hon. member is out of the house on very important business. I shall take the first opportunity when he is back in the house to answer the questions he raised.


Mr. Lambert (Edmonton West):: Mr. Speaker, I find it rather touching on the part of the Minister of Finance when he claims that the Leader of the Opposition has made speeches in which he has deplored this and that thing. Of course the whole country deplores some of the things the Minister of Finance has said, as well as many things he has not said which we expected during the budget speech. The minister has still not explained the credibility gap referred to by the Leader of the Opposition. I refer, of course, to what actually has happened and what was suggested by the minister's colleague, the President of the Treasury Board. In any event, the government's record is there to be seen. There is a credibility gap. There is no question about that. It still remains unexplained.
[Mr. Lambert (Edmonton West) .1 29180-2101
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The Leader of the Opposition has complained about the minister making statements outside this house in explanation of those things which should be explained here. Many members have complained about the minister making statements on television and radio, where he is not faced with a critical audience. I think government ministers should learn that this should not be done. These explanations should be given in the house. It is all very well for them to go out and speak before the television cameras, but these important statements must be made in this house where questions can be asked and answers provided. Ministers should not go before the television cameras to rationalize the positions they take, where they are not faced by those who will demand justification for their words, and where they cannot be brought up short and kept honest.
It was my intention to make certain comments this afternoon. I was interested to find that the minister touched upon some of the subjects I had in mind. He indicated that a week ago he found himself in the position to point out the successful campaign in respect of Canada savings bonds. He indicated that as a result he was going to be able to make some refunds. In other words, he has found himself with a limited amount of cash. What is going to happen 14 years from now when the government has to repay for these bonds at the promised rate of interest? Does the government intend at that time to entice or induce the bondholders to exchange these bonds for new bonds at a greater rate of interest? Quite frankly, I believe the government misrepresented the facts in respect of this latest bond issue. The advertisement suggested a basic interest rate of 6f per cent, increasing to 7 per cent. The advertisement stated that if investors did not cash their coupons they would receive a 150 per cent increase at the end of the 14 year period. But they did not tell the investing public that if those bonds were held for that time the value of $150 on a $100 bond would be taxable as income at the marginal rate.
[DOT] (4:00 p.m.)


Edgar John Benson: I am sure my hon. friend knows that there is an alternative and that you can report interest each year and pay the tax as you go along.


Marcel Joseph Aimé Lambert: I grant you that, but you do not report it unless you have cashed the coupons.


Edgar John Benson: No, that is not so.

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Marcel Joseph Aimé Lambert: There are very few people who are aware of this and they will simply ignore the bond interest up to the limit which need not be reported. There is more danger in what is not said than in what is said, and I can assure the minister that for the average investor it will be a case of paying income tax on the whole $150 at the marginal rate. So in effect this is a tax on capital. I agree that if a taxpayer wishes to report his income and pay tax on it, and if he then were to reinvest at the current rates each year, then there would not be a tax on capital. If the interest is left merely at compounding rates and unreported, the tax becomes a tax on capital because the whole of $150 would be taxed at the marginal rates as income.
In his statement this afternoon the minister was very careful not to indicate at what price the treasury bills were sold, what was the effect, and what were the rates on the bonds on which he is refunding in December and on which there is to be a pre-refund. I have the information here, so it is quite all right, but I would have liked to see the minister announce it because in actual fact I would suggest to the house the following-and here I will go into the precise details. For instance, the December 15, 1968 issue at the November 6 interest rate would be 6.15. The rate was not shown for the week of November 27, but if we look at the July 1, 1969, issue on which there is to be a $100 million pre-refund, we find that as of November 6 the rate was 6.27 and on November 27 it was 6.13. What will be the rate on the treasury bills? We know that the average rate on the 364 day special issue on this week's sales of treasury bills was 5.90, and a year ago a similar $125 million issue had an average yield of 5.65 per cent. In other words there was a full one quarter of 1 per cent increase in the interest on this type of investment in the spread of one year. Accepted bids reported by the Bank of Canada on this rate ranged from a high of 94.501 for a yield of 5.83 per cent to a low of 94.408 for a yield of 5.94 per cent. In other words, the minister is engaged in some refinancing here on very small fractions of 1 per cent.
During the sale this week the average yield for government of Canada treasury bills rose slightly from 5.65 per cent of last week to 5.66 per cent. Accepted bids on the $135 million ranged from a high of 98.613 for a yield of 5.64 per cent to a low of 98.605 for 5.57 per cent. The average bid was 98.603. I am putting this rather detailed information on the record because I think it is very relevant.

On the $35 million of six month bills, accepted bids ranged from a high of 97.223 for a yield of 5.73 per cent to a low of 97.215 for 5.75 per cent. We are told that similar amounts of both types of maturities, that is the three month bills and the six month bills, are to be offered this coming week.
It is strange that the Bank of Canada bought $36 million worth of treasury bills in the last week to support the sagging bill market. The minister indicated as well that the Bank of Canada is going to take a substantial portion of the forthcoming sales. This is a deliberate central bank action to support the bond market. In other words, the bank is actively participating in maintaining a lower interest rate than a true market rate if the forces of demand and supply were given a free operation and if the bank were not in there to support the rate. I suggest that this is why the minister is able to make refunds at a rate slightly below the existing market rate on refundable maturities.
We are told that there are to be further public debt operations during the remainder of the current year so that the government can engage in what they call a better debt management. I have a very uneasy feeling with regard to some of the operations of the government in the bond market. The classic example was the last Canada savings bonds operations. As I indicated, I wonder how high the government can go or what kind of carrot it will have to fashion in order to entice or induce the bondholders to exchange bonds either ahead of time, or again to postpone maturity date.
In other words we see the government building up a snowball when we look at the figures of the total government indebtedness, how much it has changed over the past few years, what the government has done and what are its prospects in the forthcoming years. In any event we have seen a natural build-up which I would say is conscious, and in many instances equivocal in the actions taken by the government to induce bond-holders to exchange their present holdings for bonds of longer maturity at higher rates. But there is always a day of reckoning. On the night of the budget we were talking about chickens coming home to roost. These chickens are going to come home to roost. I think the minister may be able to find some solace in the hope that he will not be the minister of finance when these things will have to be faced by whoever is occupying the office at that time. I am not talking about a sudden
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political reversal or anything like that, or the sudden demise of the minister. These happenings are being pushed off many years into the future.
e (4:10 p.m.)
Let us look at the interest rate as it stood during this week. On the day to day loans the average closing rate as of November 27 was 5.20 per cent. About a fortnight ago the rate was 4.75 per cent. In other words, day money has almost gone up by one half of 1 per cent. Surely the Bank of Canada return does not mislead. I am reading from it, and I think I can interpret the return quite as well as the minister. This is what it says. If the minister does not believe me, he must control his facial expression because there was a sort of grimace of disbelief on his face when I read out these figures.
Then, we go to the long term average, which is 6.95 per cent, and that is very close to the 83's at 7.12 per cent. This is a clear indication, Mr. Chairman, that the investing public still has a great fear of the bogey of inflation. As we go through the maturity dates of the major government issues in progression further and further away in their date of maturity, the interest rate rises. In other words, the investing public has less and less confidence that the government will be able to contain inflation, in view of its present performance. These investors therefore are hedging against inflation.
We could go through the whole of the statistical summary of the Bank of Canada and go through the bond issues to see where they stand and what they have done. Let us look, for instance, at the 83's. In May of 1966, they stood at 92%e. We should remember these are 4.5 per cent bonds maturing on September 1, 1983. The average rate at that time was 5.14 per cent. Any person who two years ago bought these bonds maturing in 1983 at 92 today would be $16 per hundred poorer because the market valuation of the same $100 bond would be $76.50 or an average rate of 7.07 per cent.
Let us look at the shorter term maturities, say the 7 per cent maturing April 1, 1973. Here we find a clear indication of a reversal. The present valuation of that bond is $101 for an average rate of 6.63 per cent. This is a clear indication of where the market has stood, somewhere between 6.75 per cent and 7 per cent. The 72's, which in 1965 were $95.50, on November 2 were down to $92. It is rather pathetic to receive letters from pensioners-
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Robert Lorne Stanfield: Where are the perpetuals?
_	.7


Marcel Joseph Aimé Lambert: They have
disappeared from sight. In any event, as I say, it is pathetic to receive letters, such as I did the other day, from a man who is 83 years old, who, a few years ago, invested his remaining free capital in some 83's. Now, he, is faced with his own illness as well as illness in his family, and must dispose of these bonds. He bought them at close to $100 and he was -quoted, on the market, about $74. He writes to me and says, in what can I believe if these bonds of the government of Canada for which I paid almost $100 per bond will now only bring me between $74 and $76? This is the type of hardship that is being imposed on the investing public.
Let us not forget that the great proportion of Dominion of Canada obligations are held by the public, not the insurance companies. I know it is true that many government funds, such as unemployment insurance and the superannuation fund, have moneys invested in government securities. Let us look back and see the amount that is in the hands of non-residents. Of a total of $22,634 million of government of Canada obligations of all kinds, in May of this year residents of Canada held about $6 billion. In other words, they held roughly 25 per cent of the obligations. These are rough figures, and I am sorry that, as I stand here, the calculations cannot be more accurate. If a trust fund, shall we say, a union pension fund or a firm pension fund, it does not matter, had invested in Dominion of Canada bonds such as the 1983's, the trustees would be faced with losses on the face value of these bonds because of this rise in interest rates. The rise in interest rates is attributable, in part, to the actions of the government or the inaction of the government. Although the government may not be entirely responsible for the rise in interest rates, they are responsible in good measure for the rise in interest rates. This results in one of the hardships imposed upon the general public.
The other subject I want to speak about, Mr. Chairman, in the few minutes that remain comes within the estimates of the minister and relates to the Auditor General. We could go to the blue book and read from pages 138 to 155 all of the estimates for which the Minister of Finance is responsible. I should like to refer, however, directly and primarily to those of the Auditor General. The pertinent legislation provides that the Auditor General is responsible to parliament, not to the government. Yet we have seen how

November 29, 1968
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governments have placed the Auditor General within certain restrictions, and continue to keep him there. He is not unfettered. He cannot report independently to parliament. How is this? For one thing, we have received representations from time to time from the Auditor General with regard to the size of the staff he requires to enable him to report meaningfully to parliament.
[DOT] (4:20 p.m.)
The Auditor General has not been allowed to increase his staff, Mr. Chairman. Why? Because his administration budget is subject to Treasury Board direction. Who sits in control of the Treasury Board? The Minister of Finance and the President of the Treasury Board. This is the limitation that is imposed directly on the Auditor General, I think it is scandalous and should be brought to an end as quickly as possible. The government must free the Auditor General. The Auditor General's office is not the servant of government, it is the servant of parliament. Yet the present situation is quite in keeping with the philosophy expressed by the government through the words of the Prime Minister, who has said: "We are the masters of parliament; we are the masters of this house". To that extent, Mr. Chairman, I suggest the government is being dishonest with this house by maintaining its control of the office of the Auditor General through control of its estimates.
We have seen a very modest reply to his repeated demands to be able to hire staff so as to enable him to do an adequate job on behalf of parliament. We know the Auditor General and his reputation for being honest and fearless. It must be because he is honest and fearless that these restrictions are maintained. This has been the practice over the years, I am not denying that it has not existed before. But I think the practice is wrong and that the government must immediately remove this injustice so far as parliament is concerned. Therefore, Mr. Chairman, I am looking forward to the announcement to be made in due course by the minister that the Auditor General will be given a freer hand and will be given that responsibility which the legislation passed by this house intended him to have.
The last point that I should like to raise is this, Mr. Chairman. Within the next fortnight another dominion-provincial conference will be convened. We know that after the last one the provinces went away-to say disappointed is the understatement of the year. To say that relations between the federal government and
the provincial governments are on a good basis is also a major understatement. I suggest that this next conference is going to be the last chance for this administration to repair the harm that has been done to relations between the federal government and the provinces.
Yesterday we had the words of Premier Robarts of Ontario in which he gave fair warning to the federal government in terms that I think are even blunter than those which any premier of the province of Quebec may have used, or have been alleged to use. Naturally, Mr. Chairman, not as much ink will run because the remarks do not seem to have been motivated by the same circumstances. They have a political connotation. It is not racial, it is not religious, it is not linguistic, but political.
Perhaps the premier of Ontario has overstated his case, Mr. Chairman, but surely to goodness even we in this house must recognize the justice of his cause. We have heard the treasurer of the province of Ontario indicate the parlous state into which the province will be thrown in regard to taxation in order to meet legitimate programs. They are not embarking upon a new spending orgy. I will admit that the provinces could curb some of their programs, but many of them are joint programs initiated by the federal government.
On the one hand, Mr. Chairman, the federal government misses out on its estimates by some $700 million this past year. This it blames on joint programs with the provinces in limited sectors, and says the provinces should watch them more carefully. But who in the first place drove the provinces into that expense, and who now intends to drive them into medicare?
The province of Alberta I think has enjoyed, among all provinces in Canada, perhaps the greatest prosperity at the government level, not entirely due to ability but as a result of the good fortune of resources- though there has been some wise administration as well. I should just like to read the headline of the Edmonton Journal for Tuesday, November 26, which says: "Alberta's 6-month deficit hits record $132,290,000". And this, Mr. Chairman, for a population of 1.5 million people. This figure is $29,500,000 more than the six-month deficit for 1967-68, and we know that in 1976-68 that deficit was $99 million. In 1966-67 the deficit was $1 million.
When was the great change made in regard to post-secondary education, Mr. Chairman? It was in 1966-67. We know that the province
November 29, 19G8

of Ontario accuses the federal government of underestimating by far the cost of the postsecondary education program imposed by the federal government on the provinces. I warrant now, Mr. Chairman, if the deficit in the province of Alberta was $99 million for 196768, that the deficit for this year will be in excess of that sum. Yet Alberta is supposed to be one of the wealthier provinces of this country.
Premier Robichaud of New Brunswick has indicated that the budgetary deficit of his administration will be $42 million. The population and resources of New Brunswick are not comparable to those of the province of Alberta. As I said the province of Ontario is facing real problems. They have not yet indicated the size of its budgetary deficit but no doubt we will know the figure in a couple of months. And what about la province de Quebec?
All along the line, Mr. Chairman, there is an indication that the provinces will have to pull in their horns. I am not going to hesitate to tell this committee what the provincial auditor of Alberta, the provincial equivalent of the Auditor General of Canada, had to say in his report. He said that the only remedy is a complete re-examination of all expenditure programs of the province to decide which have become obsolete and which are not doing what they were designed to do. Mr. Huckvale said that he had been trying to preach restraint. We have also heard that said here by the Auditor General.
Time and time again, Mr. Chairman, we have had exhortations to the government to decide with the provinces on priorities so that they can live within their incomes. But now everybody must go and wear sackcloth and ashes. We must live in short commons. There are restrictions on this and that. There has been fiscal mismanagement by this administration over the years, and we are now having to pay for it. I do not for one moment believe the budgetary estimates for 1969-70 any more than I believe those we have had for 1968-69.
I see you are getting impatient, Mr. Chairman, and that my time is up. All I can say is that the sorry record speaks for itself.


John Gilbert: Mr. Chairman, every time I look over to the Minister of Finance and he expresses worldly wisdom on his face, with his big smile and his silence on so many issues, I think of Buddha. Perhaps he should be called "Buddha Benson". This is the impression that some of us get with regard to
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his attitude to some of the problems that directly affect Canadians.
I should like to deal very briefly with some of the matters that have been brought to my attention by constituents. The first is a letter from the president of the superannuated women teachers of Ontario. It is dated November 21 and says:
[DOT] (4:30 p.m.)
May I draw to your attention, a petition which was forwarded to the Prime Minister this summer by the Ontario Association of Superannuated Women Teachers. It had been previously accepted by (1) The Provincial Council of Women, (2) The National Council of Women, and (3) The Canadian Teachers Federation, at their annual meetings. We now have the support of approximately 1,003,000 women.
In view of the obvious merit of this petition, may we hope for your whole-hearted support when the opportunity arises?
The resolution that the president, Mrs. Harriet C. Miles, refers to was passed in Toronto on January 25, 1968, at the conference of superannuated teachers. It reads:
Whereas the spiralling cost of living during the past ten years has caused much distress to many of the older group of citizens of Canada, and
Whereas the tax burden is falling heavily on those no longer able to earn, and
Whereas their already slashed incomes are being still further eroded by constantly increasing taxation,
Be it resolved that for all citizens of 70 years and over the income tax exemption shall be increased from $1500 to $2500 beginning January 1st, 1968.
I should like to hear the minister's reaction to this resolution which was passed by the Association of Superannuated Women Teachers. One million and three thousand persons support the association in Canada, and I think the minister ought to know that. He ought to make some statement other than that he is studying the matter and it will probably be brought forward in the spring's tax proposals.
Second, I wish to say a word about our foreign exchange rate. The minister came back last week from the monetary conference and made a pontifical statement in the house assuring us that we could have confidence in the dollar and that everything was all right. We, in the N.D.P., for a long time have been advocating a floating exchange rate. The minister has remained silent on this proposition. In fact, when the hon. member for

November 29, 1968
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Waterloo raised it the Prime Minister's response to a floating exchange rate was, "Heavens, no!" Yet the Postmaster General, a colleague of the Minister of Finance, has spoken out loudly and clearly on the question of Canada's having a floating exchange rate policy.
Last week I quoted part of something he had written for a book called, "The Nation Keepers". On page 214 of the book he sets out the argument for a floating exchange rate. I should like to hear what the minister has to say about the floating exchange rate, especially since this idea is becoming popular in financial circles. For some time now the president of the Royal Bank has advocated a floating exchange rate. What does the minister say to that?
It has been suggested that a "crawling peg" rate would solve monetary exchange problems. Writing to the London Times, Douglas Jay, a cabinet minister of Great Britain, had this to say about our recent currency crisis and the crawling peg rate:
This could be done, for instance, by a system on the lines of the so-called "crawling peg". The exchange rate on any given day would not be able to move by more than, say, 1 per cent on either side of the peg. But the peg itself would be based on the average market rate over the previous, say, 12 months. The peg would thus "crawl" up or down automatically, without political decision or political crisis. The weak currency could slide down, and the strong up, by as much as 2 per cent a year. This should enable the longterm adjustments to be made without provoking uncontrollable speculation.
What does the Minister of Finance say to the idea of a crawling peg rate, which, as Mr. Jay says, might prevent speculative crises such as we have had recently.
Third, I wish to direct the attention of the Minister of Finance to an unsigned letter that came to me through the mail. I do not know who sent it but the heading is, "Tax Evasion Cuts Revenue". The letter reads:
Canadian corporations have been deferring income tax to future years since 1958.
Federal and provincial revenues, depleted by billions of dollars over ten years, have burdened municipalities and school boards with heavy debts, involving interest at high rates and forcing ruinous taxation on small property owners throughout Canada.
Below the letter there is a fist of 40 corporations with amounts of money opposite the name of each corporation. For example, the companies are shown as follows: "Bell of Canada, $79,916,000; Dominion Foundries, $101,617,000; Aluminum of Canada, $139,405,472; Imperial Oil, $87,645,000;." I have taken
these companies at random from the list. I shall send the minister a copy of the letter and ask him to explain its meaning. Does it mean that Canadians are being bilked out of approximately $1.75 billion every year? If the minister could recover the amount that is owed to him in this manner he would have no problem in raising money to meet next year's expenditures.
I now wish to direct the minister's attention to the Carter report. It will be recalled that the right hon. member for Prince Albert appointed Kenneth Carter in 1962 to investigate Canada's tax structure. The report was submitted to parliament in February, 1967 and showed the tax inequities burdening low and middle income groups in Canada, and the unjustified benefits enjoyed by oil companies, mines and insurance companies by way of depletion allowances, tax holidays, etc. When the report was tabled in the house the present Minister of Finance attempted to play it down. He belittled it by saying it applied only to 1964 and, more especially, that it would have an adverse effect on the potential economic growth in Canada. I understand that the minister of finance of that time directed six special, independent studies on this matter to be undertaken in his department. He wanted to know what effect Carter's recommendations would have on the potential economic growth of Canada. All those studies indicate that if the recommendations were implemented they would have no adverse effect on our economic growth.
The high priced officials who assist the minister are in the gallery, and I am sure the Minister of Finance would be happy to table those independent reports that some of his officials may have prepared on the effect of implementing Carter's recommendations on the economic growth in Canada. In any event, perhaps the minister can be persuaded to show those reports prepared by members of his department to hon. members of the house.
It will be remembered that the minister of finance of that time invited different corporations to present briefs, setting September 30 as the deadline. Amazingly, 100 briefs came from industry alone. I have it on good authority that International Nickel spent $250,000 preparing their brief to fight the Carter report. When a hundred corporations attempt to justify their positions, one cannot but become suspicious. As my hon. friend says it is a clear attempt to preserve socialism for the rich.
November 29, 1988

[DOT] (4:40 p.m.)
In October, 1967, the minister promised a white paper containing tax proposals as close to the end of the year as possible-he did not indicate which year. This white paper has still to be produced. Some time in 1968 it was decided to drop this idea of a white paper. Now, the present Minister of Finance tells us we may see these long-awaited tax proposals in the early part of 1969, and that some of them may be implemented by the end of 1969. From the time this report was tabled by the government, back in February, 1967, some 20 months have now passed. One might ask: how much has this cost Canadians? One economist has calculated that this failure on the part of the government to act promptly on the proposals has cost Canadians a thousand dollars a minute, or roughly half a billion dollars a year. If this is so, there is certainly a strong case for deciding not to implement this proposed 2 per cent social improvement tax which the minister so proudly announced on budget night. If Canadians are losing all this money through failure to implement the Carter recommendations, it is high time he took some action to do so.
As you know, Mr. Chairman, Mr. Carter made particular studies of certain areas of taxation. On the question of oil companies he told us they got one third of their profits tax-free on the ground that their assets, their underground assets, were being depleted. Profits from new mines are tax-free for the first three years-most oil well and gas costs are tax deductible. Mr. Carter said this cost the treasury $150 million a year in lost revenues. Some of the potash companies in the west have attempted to take advantage of this tax holiday. I am told they work for a while on exploration or development, and when the end of the three-year period is approaching they form new companies and attempt to get another three-year tax holiday. I should like to hear a statement from the minister with regard to the actions of some of these companies, most of which are attempting, not to evade the law but to avoid it.
In the year 1964, Mr. Carter said, eight big companies three of which were oil companies, accounted for 85 per cent of all depletion allowances in Canada. Because of heavy foreign ownership of our resources, United States residents received 80 per cent of the oil and mining benefits. Mr. Carter also told us that small businessmen have an easy time with the tax man because they pay only 21 per cent on the first $35,000 of their profits.
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On the face of it, the government is soaking the big-income boys because the tax rate on incomes above $400,000 is 80 per cent. But, as the Carter report makes clear, tax rates as high as this are in practice only on the statute books; they are readily avoided by most of the few people who receive incomes of this size. You will recall, Mr. Chairman, the tearful plea made by the Prime Minister for those who are paying 80 per cent. He told us down in Halifax that he would have to take care of these people because otherwise we might see a flight of these talented men to other countries. He was not so much worried about the difficulties the little people might find in paying this 2 per cent social welfare tax, but he was concerned about these 80 per cent boys. I think we ought to draw Mr. Carter's words, that such a rate exists "only on the statute books", not only to the Minister of Finance but also to the Prime Minister.
Present practice under taxation law is to place the emphasis on the word "avoidance" rather than on the word "evasion". If ever avoidance is being exercised by corporations, it is within our Canadian tax structure. I happen to be a lawyer, and I might add that lawyers seem to do quite well in persuading big corporations to take advantage of this angle of avoidance.
Talking about people with incomes of $400,000 and more a year, this is one of the sleek methods they use to avoid taxation. They acquire farms and attempt to say they are in the farming business. Then they apply all the expenses of the farm operation-which in many cases runs at a loss-against income. After a few years have gone by, they have acquired a large tract of land, and taking advantage of urban expansion are able to dispose of it for a large capital gain. The minister in charge of housing is here, and he knows that this is the case. They have it both going and coming, as my hon. friend says.
I should like to spend a few minutes, now, considering the question of a capital gains tax. Yesterday I noticed that according to the Daily Star the premier of Ontario is studying the idea of a land profit tax. The article in the Star reads as follows:
The Ontario government is considering a capital gains tax on land speculation, Premier John Robarts told the legislature yesterday.
The tax would bolster revenue in the face of a government austerity program and help ease the high cost of housing in Ontario cities.
Robarts said the treasury board is currently examining all areas of taxation "and this is one of them."

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If this is one of the areas which the government of Ontario is studying, it is high time not only the Minister of Finance but the minister in charge of housing paid attention. If we permit the provincial governments to step in with regard to a capital gains tax the hon. gentleman will have a difficult time with his task force on housing, should it bring forward reasonable recommendations to solve the housing problem. It is one of the real shortcomings of Canadian tax history that we should have no capital gains tax. Such a tax exists in the United States and in Britain, yet in Canada we do nothing about those who speculate in land or who devote themselves to the stock market and make huge profits with which they escape tax free.
[DOT] (4:50 p.m.)
When I heard the speech of the hon. member for Scarborough East who, by the way, is an economist and was one of the whiz kids who advised former minister of finance Walter Gordon when he introduced that great budget of his a few years ago, I thought our present Minister of Finance would pay some attention to him. In the budget debate the hon. member strongly urged that we have a capital gains tax. I suggest that the minister read his speech and learn from it. These are some of the aspects upon which I would like the minister to comment. He has about seven minutes before this debate adjourns, and I have raised seven matters with him. I am sure he can touch on at least some of them.


Robert Lorne Stanfield: Mr. Chairman, I would like to ask the minister when we are going to get a draft bill?


Edgar John Benson: Mr. Chairman, I shall take that under advisement. I cannot make a promise without first talking to my officials.


Robert Lorne Stanfield: I just want to emphasize again that I do not see any real excuse for the state of uncertainty in which people are being left.


Albert Béchard: Shall vote 1 carry?


Some hon. Members:: No.


Mr. Harding:: Mr. Chairman, I was hoping that the minister would answer some of the questions put to him by the previous speakers. We have only a few minutes left before the hour is up. Sometimes these questions drag on and we do not get the estimates back again for several more days. In that way it is a little awkward to keep track of them.

Would the minister care to answer the questions that hon. members put to him?


Edgar John Benson: Mr. Chairman, perhaps the hon. member was not here put I answered the questions put forward by many speakers this afternoon. I believe the last speaker is the only one whose questions I have not answered, and they were of such a general nature that they are difficult to answer. First of all he asked if I am in favour of a floating exchange rate. My answer is no. To me it is rather unusual to see this new alliance between the N.D.P. and the president of the Royal Bank.
The other questions raised were very general ones about what we are going to do in connection with the Carter report and other submissions that the government has had on taxation. Of course I am not going to indicate what we intend to do until I produce the draft bill which will be studied by all members of the house.


Randolph Harding: Well, Mr. Chairman, I do not think we should let this item pass at this time. I wish to raise one or two things before the hour of five o'clock. In the last few days I have been going over some of the old Hansards. We learn a lot from history, but it is said that quite frequently those of us who live at the present time do not take too much cognizance of what has gone before.
I went back to 1962 and read some of the statements made by the Minister of Finance during the budget debate of that year when another party was in power.
I must tell him I thoroughly enjoyed reading the words of wisdom which he addressed to the House of Commons on a number of occasions, and the thought occurred to me that surely all the good ideas he had in those days cannot have gone by the board since he assumed the august position of finance minister in the federal government.
I am going to relate his old ideas to just one phase of one operation in my home province of British Columbia, and I am going to refer to the big coal operation around Vernon, the Kaiser coal operation. The minister is well aware of what has happened. The former company, Crowsnest Industries, has sold out to Kaiser Steel which has bought a large area of coal from that company. Kaiser have moved in and they are going to set up a strip mining operation. As I recall the minister's remarks he was not too happy about big, foreign owned companies moving into areas such as this in the field of natural resources
November 29, 1968

and getting special tax concessions-for example, a three year exemption period on mining.
I ask the minister, is your department going to allow the Kaiser corporation a three year tax exemption period in this particular operation? Here is a loophole that could and should be plugged by the federal government. All over this country of ours we have big corporations that get these tax concessions. I can give several good examples. They get an initial tax concession. Then they set up a new company, move over a short distance and get another tax concession for another three year period. They are robbing the public of Canada of hundreds of millions of dollars that rightfully should be going into the tax coffers of the federal government.
This was the line which the minister took several years ago in connection with oil and gas reserves in the Dominion of Canada. He pointed out that we were forced to import 50 per cent or more of our oil requirements, and emphasized what a drain this was on the financial resources of the country. Through you, Mr. Chairman, I ask him what are you going to do about it now? You are sitting in the seat where you can do a job. What recommendations are you going to make to the cabinet and to the House of Commons? Are you, Mr. Minister of Finance, going to suggest that we alter this approach? If so, it is up to you to lay before the house within the next two or three months some changes which will bring your old ideas to fruition.


Albert Béchard: Order.


Thomas Miller Bell: Mr. Chairman, we would be glad to pass this first item and move along. So far as we are concerned we have had a good afternoon. The minister has given us some satisfactory answers.


Albert Béchard: Is the committee agreeable?


Some hon. Members:: No.


Albert Béchard: It being five o'clock it is my duty to rise, report progress, and request leave to sit again at the next sitting of the house.
Progress reported.



HEALTH AND WELFARE


Donald Stovel Macdonald: Mr. Speaker, I wonder if I
Health and Welfare
might have unanimous consent, as leader of the house, to revert to motions, to put some items concerning the tobacco business into the committee on health, welfare and social affairs?


The Acting Speaker (Mr. Bechard):: Does the house agree?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, there have been discussions in the four corners of the house on the question of the potential injury to health arising from the use of tobacco; and I believe there is general consent, and more particularly consent on the part of hon. members who have bills standing on the order paper with respect to tobacco, that these bills should not be proceeded with, but that the subject matter of them should be referred to the standing committee on health, welfare and social affairs.
[DOT] (5:00 p.m.)
I should like to move, therefore, seconded by Mr. Pepin-
That the order for second reading of bills C-39, C-45, C-53, C-134 and C-137 be discharged and that the subject matter of the said bills be referred to the standing committee on health, welfare and social affairs.


Stanley Howard Knowles: Mr. Speaker, speaking for the bills which emanate from this part of the house we welcome this move and hope that this will facilitate discussion of this problem.


The Acting Speaker (Mr. Bechard):: Is it the
pleasure of the house to adopt said motion?


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Bechard):: It being five o'clock the house will now proceed to the consideration of private members business as listed on today's order paper, namely public bills and private bills.



RAINMAKING EQUIPMENT


Mr. Arnold Peters (Timiskaming) moved: the second reading of Bill No. C-ll, to govern, licence and regulate the operation of rainmaking equipment in Canada.
He said: Mr. Speaker, had I known the date when this bill would be called we probably could have tied it in with the Grey Cup game and the rain situation in Toronto. Probably a number of people would have been

November 29, 1968
Rainmaking Equipment very interested in supporting this bill. That of course is no joke, because on a number of occasions the company operating out of Montreal has been asked to project the weather on a longer term basis to decide whether there would be snow, rain, or what the weather would be, when Grey Cup game time came around, especially a crucial game.
I, and I am sure other members, have been interested in two or three things connected with a bill of this nature. One is the attitude of people to a bill called a bill to regulate rainmaking. I am sure many people still think of the Indian dances that are being performed in Arizona and sold to tourists as representing the former method of rainmaking.


An hon. Member:: And in the west.


William Arnold Peters: Yes. They may have one in the west. It might be interesting for the hon. member, who comes from Saskatchewan, to know that his friends, the farmers in Alberta, over a period have voted, in a number of districts, that a certain amount of money be paid, through taxes to rainmakers to make rain in that area, and more important to end hail in that area. While this also may be considered to have dubious value, those farmers have renewed this proposition for many years now in the province of Alberta and are very close to having the provincial government make a decision in respect of everybody paying taxes so that hail does not occur in that area.
The whole matter of rainmaking involves a very large problem of weather modification and what the international and national relationship to this should be. It is quite clear, in a broad sense, that in the foreseeable future we will be able not only to plot weather fronts of various kinds throughout the world by satellite control but that we will also be able, through several methods that are being developed, to prevent what would be the disadvantages of those storm fronts developing. This will happen where expenditures are made to control hurricanes, fog, hail, and I suggest probably to control or modify the normal rainfall in a given area. All these things are being undertaken. If we in Canada think this is a joke, then we should look at the situation in the United States. In the year 1967 in the United States $7 million was spent on this type of weather control. It is expected by 1970 the expenditure will be $150 million. That is equivalent to the total amount spent by the Canadian government a few years ago

on its total works on behalf of all the people in Canada.
I suggest it is necessary that we pay some attention to the matter of weather control. Frankly I am interested in a very small sphere of weather control; that is, the ability of people by certain processes to make rain fall in a given area in greater amounts than would normally be the case if the weather were uncontrolled. I suggest that in Ontario we have engaged in this for some time. We have seen the Ontario department of agriculture contribute a quarter of a million dollars to make rain in the Renfrew area, when that area experienced a severe drought. You will also be aware, Mr. Speaker, that in the same area money was spent by the Ontario Department of Agriculture to compensate the people for an over-abundance of rain in that fall period. You may also believe that there is something to rainmaking by noise, because you will remember a few years ago while the noise was being made in parliament it started to rain in the Renfrew area. That foreshadowed the end of that drought and preceded the bringing in of generators by about three days.
There may be many methods by which this can be done. I am not particular how we do it. However, I believe it would be a shame if members of parliament do not take some action in this matter, because it would seem to me that we must be able to protect the people who now are the victims of modification of weather, and really have no control over it. If someone decided to dust the apple trees in his yard with a heavy spray, and this covered the yard next door, then the person next door is protected because there is legislation which provides that something can be done about this. He may have his grass replaced or his flowers replaced because of the over-kill by the spraying of the person two lots down the street. So long as the Canadian parliament takes the attitude that this is a big joke nothing will happen.
For a change the Minister of Transport (Mr. Hellyer) is here. We are glad to see him in the house. This does concern the Minister of Transport because I believe it will have to be his responsibility. An agency is hired by his department to assist in long range weather forecasting. His department has a responsibility for this forecasting. It is my opinion that his department will also have to be involved in the matter of weather modification.
November 29, 1968

I do not suggest that the department of lands and forests in northern Ontario should not be able to hire silver oxide machines to bring about water precipitation in a given area. What I do suggest, however, is that if this affects some people living in that area they should have recourse through law for the recovery of damages suffered by them in that regard.
[DOT] (5:10 p.m.)


Mr. Francis:: Mr. Speaker, would the hon. member permit a question?


William Arnold Peters: Certainly.


Cyril Lloyd Francis: I have listened to the hon. member's contention about the rights of people to recourse as a result of the adverse effects of provincial activity in rainmaking. How can this be done under the type of provisions he is putting before the house? Is there not a grave constitutional problem involved here? Does his own legislation not exempt provincial activity.


William Arnold Peters: Yes, there is a major problem here. In the United States they have done some work in this regard and have come across similar problems. They have listed a number of basic questions regarding control in this respect. Some of them are:
How should the regulatory function be performed? Can an agency with mission interests in weather modification serve also as a national licensing and regulatory authority? Is a new agency necessary for this purpose? Can the co-ordinating function and the regulatory function be combined in a single agency? Is it premature to undertake federal licensing and regulation?
The United States has passed a number of laws in respect of weather modification as a result of their investigations in this matter. I understand the Minister of Transport (Mr. Hellyer) has also done some research in this regard. Weather control really involves weather projections. Weather conditions are projected not only in respect of Newfoundland but in respect of British Columbia, and these projections are made simultaneously. These are made without any provincial control or provincial information. They are also based on international information.
I am sure everyone is impressed when watching television to see that satellites thousands of miles above the earth project back pictures of weather formation. We no longer see lines drawn to indicate weather fronts; we now see the actual fronts. This is done not only on a national basis, but on an international basis; so one should not worry too
Rainmaking Equipment much about the provincial implications. Weather modification is not confined to provincial jurisdictions. Anything that crosses provincial boundaries becomes national in nature. Therefore I believe we should not hesitate to make laws in this field simply because provinces have a role to play.
A number of laws have already been passed in the United States in this regard, but one problem they have experienced relates to the fact that the laws in one state often conflict with those in another. In any event, they have been able to establish a number of facts, one of which is that rainmaking must naturally come under governmental regulations. This authority goes on to state that weather is national in scope rather than a state proposition. In this regard a number of cases have been heard in both district or state and federal courts. This is an extensive field, and I believe our federal government must have some control.
The hon. member's question has more relationship to the making of rain than to the powers or authorities I recommend. I refer only to control and regulation by licence. There are only seven or eight companies of this kind operating in this field. Surely we could regulate them as to the weather modifications they may carry out. In this way we could require these companies to keep a record of the results of their attempts.
The main example we have in this country is in respect of the firm Weather Engineering which is operated by Paul Denison and Bernard Power of Montreal. They have had great success with the silver iodide generators. These are small coke operated ovens in which you place crystals of silver iodide. The temperature is brought up to about 1,200 or 1,400 degrees. The iodide cystals are evaporated and go up into the clouds by convection. When the clouds are supercooled, usually about 10 degrees fahrenheit, the iodide crystals create a molecular bond which attracts the moisture in the air. This produces precipitation in the form of rain or snow. If this is in a cold area snow will fall, which eventually can turn to rain. Whether or not these efforts have been successful can be judged by what has happened.
Let me refer to what happened in 1956. There was some talk about using this system to control forest fires in northern Ontario. The article to which I refer states:
In Quebec the clouds held more moisture. In mid-July, for example, a forest fire out of control along a ten mile front in the wild North Shore

November 29, 1968
Rainmaking Equipment Paper Co. bushland, southwest of Seven Islands, was rapidly sweeping toward the little St. Lawrence settlement of Shelter Bay.
Denison and Power flew in 23 of their silver iodide generators. On the morning of July 22 a few weak storm clouds drifted over the blaze but produced no rainfall. At noon Denison ordered his fireboxes lit. By five o'clock 1.3 inches of rain had fallen on the blazing timber-enough to dampen down the smoke and enable forest rangers to close in on the flames. The showers quenched the fire just in time to save Shelter Bay. The community was already partly evacuated and flames had reached some of its outlying buildings. Said H. A. Sewell, Quebec North Shore's general manager of woodlands, "We have seen enough of the work of Power and Denison to know that we want more."
On October 7, 12,000 crackling dry square miles of Abitibi Power and Paper Co. forest from Lake Abitibi west to Kapuskasing, Ont., were drenched with 2.8 inches of rain a few hours after Denison's generators went into action. Some small fires fizzled out and, for the first time in months, rivers rose to normal levels, hydro plants began operating at full capacity and reservoirs started to fill up, giving hope of adequate water storage before freeze-up.
Denison called George Arnold, chief chemist of Spruce Falls Power and Paper Co., at Kapuskasing one Sunday in September, advising him to alert company forest rangers operating Weather Engineering silver iodide furnaces. Rain-heavy clouds were passing over Spruce Falls forests the next morning.
We must remember that he was in Montreal, a thousand miles away from Kapuskasing, yet he said:
"Light your generators at seven o'clock and keep them burning until eleven," he instructed. It started to rain on Monday morning at a quarter to eight. The shower stopped abruptly at half past eleven. Bushlands surrounding the Spruce Falls property didn't get the downpour. The government weather office had forecast no rain for the region until Wednesday.
I am convinced that you can make rain. We have had some very bad seasons in northern Ontario when we had no forest fires at all, yet the department of lands and forests were operating these machines.
[DOT] (5:20 p.m.)
The same was true when Ontario Hydro decided to fill their reservoirs. It may be that we want to make a rainshed out of the whole of northern Ontario, but if we do, those people who are already there in the field of tourism and agriculture, and in fact those people who live there, should be able to have a say in the matter and to start litigation in the courts if they consider the effects to be detrimental to them.
I suggest that this is a responsibility of the federal government which it should exercise.

If the members of this house wish to pursue this matter, they could vote to have the bill referred to a committee. I suggest it should be studied by officials of the Department of Transport, which has a very large meteorological service, of which we should be proud. This weather institute, which operates in Montreal, has a direct teletype communication with the Department of Transport. It plots the weather in its Montreal offices and then sells the weather forecasts back to agencies, such as Air Canada and others, in a completely different form. The two specialists at the institute have been trained by the Canadian government and are familiar with its methods. They are able to forecast from maps well ahead of time the type of storm fronts that are likely to develop under given circumstances and from given areas.
For instance, if you, Mr. Speaker, wanted to select a nice day for your daughter's wedding because you wanted to hold it in the garden, you could consult these experts who would be able to provide you with the information, so that you could select a day of sunshine and suitable temperature for the event. For businessmen these experts can provide a correct forecast with reasonable certainty. They are able to say whether or not the use of dry ice or silver iodide which is being discharged by artillery will be successful in producing rain.
We in this house will be failing in our duty toward people who live in areas where rain can be produced, or toward government agencies which need to control weather, if we do not soon take a look at the whole matter of weather modification, and provide regulations and licences necessary for these people to operate in this field.
My purpose in producing this bill is to ensure that such agencies as the Department of Agriculture, Ontario and Quebec hydro, private pulp and paper mills and other agencies interested in this field do not abuse a new technology which, as is not realized by most people, is involved in the modification of weather, an undertaking in which all civilized countries are now engaged, in one way or another.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I wish to take the floor on the bill now under consideration. We had planned to introduce such a bill but I think the hon. member for Timiskaming (Mr. Peters) read
November 29, 1968

our minds, and I congratulate him for having introduced that bill.
It will first of all have the advantage of finally convincing everyone that artificial rain exists. In fact, many people still do not believe it, but I can say that our regions had a taste of it, so to speak, because we had to put up with uncontrolled artificial rain during three summers and that is why I support that bill.
It is not that I am against artificial rain, Mr. Speaker; not at all. But I am in favour of artificial rain controlled by legislation, so that the government will know to whom permits are delivered, but most of all the permits will state exactly the regions where artificial rain can be made, as well as when it can be made, to prevent what happened in our regions.
Rain is being made throughout the summer without regard to planting or harvesting. That is the reason why our areas have been flooded during three consecutive summers by this artificial rain.
I remember five or six years ago when we raised this question of rainmaking in the house, we had started a roar of laughter in the house. Now I understand why hon. members felt that was rather funny. In fact, the government was aware of rainmaking experiments, but they considered them a military secret. I do not think that they should be so considered, because if rainmaking is interesting to big companies-as it has been for some years-it is even more interesting to farmers.
The matter also concerns the population for reasons of public health. Excesses should not occur again as in the past years, when Operation Umbrella was launched in the Saguenay-Lake St. John area. Everybody was crying for help, and I think it influenced very much the reports of doctors who appeared as witnesses and stated that this could affect the health of the population.
Legislation should be passed to grant permits to a company, but that company should not be solely in the service of large corporations. In my opinion, the legislation should provide that the companies would come under the government control, because if we let them act as they please, the abuses will continue.
On the one hand, we hear the opinion of the farmers or of the people. The population of a given region knows and realizes that the
Rainmaking Equipment government may at certain times allow companies to make artificial rain in order to raise the water level of hydraulic reservoirs, but that it will see to it, at the same time, that this rain does not drown the crops planted by the farmers or spoil the grain or the hay harvest.
Mr. Speaker, I wish with all my hearts that this legislation may be refered to a committee for consideration, so that the government might, if necessary, introduce legislation to that effect for the situation is urgent. I have proof of that here, for I have a whole file on this question of artificial rain. It would take me nearly a week to read all the evidence in favour of or against artificial rain, and all of it proves to the Canadian people and to all the hon. members that artificial rain has been in existence for many years.
At first, ground rainmaking machines were used. Today, however, planes are used to seed clouds. In our areas, ground machines are hardly used any more, because it is much easier to use airplanes. That is why the matter today concerns the federal government far more than provincial governments, because it is a question of air pollution. When ground rain-making machines were used, the matter concerned the provincial governments. I always wondered why the government has been hiding that fact from the people for the past ten years. Why can the government not reveal when companies will be allowed to make rain? If one region is not suited for such a program the people will be in a position to advise the government as to its ill effects.
Mr. Speaker, I was anxious to have this bill discussed in order to bring in the final proof. This latest testimony we received from the C.F.U. on August 30, 1968; as you see, it is recent enough. I will not have the time to read this letter entirely as I would not want to have this bill killed today so that it may be referred to a committee. I will read a few excerpts.
Dear Sir, as a result of the decisions taken during our annual convention concerning the effects of bad weather upon our members, as well as upon the whole population of the Saguenay-Lac St-Jean district, and considering the possibility that artificial rainmaking may be the cause, the Federation de I'UCC du Saguenay is requesting your assistance to set matters straight in the minds of our population and to find out whether artificial rainmaking is being practised at the present time. If it were practised, please help us to get rid, once and for all, of this disastrous system which caused us untold hardships some years ago.

November 29, 1968
Rainmaking Equipment
[DOT] (5:30 p.m.)
I feel that the C.F.U. might have laid it a bit thick, as such an organization cannot really be 100 percent against all experiments in cloud seeding. It probably hopes for restrictions in a particular region at a given time, as I said previously.
Our farmers and our population as a whole could not endure the consequences of artificial rainmaking; more over, uncertainty about this condition is unbearable.
In the past, ground rainmaking machines have been used in our province and in our region.
A great number of those machines were used in the northern part of the province of Quebec. There were some in our region, in St-Felix d'Otis, Shipshaw, Falardeau, Chfite-aux-Galets, etc.
All the places where ground rainmaking machines were used are listed. I happen to have a map indicating the site of all those machines.
The services were engaged by the Association Protectrice des Forets Laurentiennes Ltee, as well as by hydro-electric companies, including Hydro-Quebec after the nationalisation of power production.
The Department of Land and Forests of the province also contributed financially to that operation, through the Association Protectrice des Forets Laurentiennes.
Following pressures by the UCC, the news media and Operation Umbrella, the provincial government assured the UCC, through the Minister of Natural Resources, that Hydro Quebec would stop using the services of the Weather Engineering Limited (Meteorological Engineering) and it asked the Gatineau Power as well as the Association de protection des Forets laurentiennes, the other two sponsors at that time, not to resume cloud seeding operations. Moreover, the minister undertook to supply the C.F.U. with the list of the places where the seeding machines were located to afford better supervision.
And it is on that occasion that we secured a map showing the exact location of the machines.
Since then, the C.F.U has kept in touch with the senior officials of the Department of Natural Resources in order to maintain pressure to prevent cloud seeding. In addition, each time serious information was received, it sent its technicians to check if there was anything to it.
However, it is impossible for a union group to survey the Quebec territory to find rainmaking equipment, when one knows that this equipment is very small and can easily be disguised.
With new developments, the federal government got involved.
Now, especially during the last five or six years, rainmaking is carried out by airplanes and this is precisely what C.F.U. is referring to.
On July 28, 1967, the federal government, through the Air Transport Board, granted Royalair Ltd. an air survey licence (rainmaking).

Nobody dared to say that that was a rainmaking licence; they said it was for air survey, but it was, in fact for rainmaking.
In its argument to the board, Royalair Ltd. said that it wanted to operate in conjunction with Weather Engineering. We also had confirmation, during the public hearing of the Air Transport Board that Ontario Hydro, Abitibi Corporation and Spruce Falls Paper Company resorted to artificial seeding of clouds in order to increase rainfall. We also had confirmation, on that occasion, that Newfoundland was also a victim of that cloud seeding by the Newfoundland Air Transport Limited Company.
Therefore, to that method of cloud seeding from the ground, is added that of seeding by aircraft.
Faced with this reality, the annual convention of the Saguenay C.F.U., which was held on August 31,	1967, officially and publicly reaffirmed its
position as follows:
(1)	That the provincial and federal governments, within their respective jurisdiction, should make the necessary arrangements so as to maintain the ban on all the methods which might increase natural rainfall in our area and that the state should exercise a strict control in that respect.
(2)	That the state should undertake a serious and complete study of the influence on our climate of the numerous and large underground streams artificially created by hydroelectric dams and the consequences these may have on farming, so as to take them into account in the planning of our agriculture.
The position of the C.F.U. Federation is just as unequivocal. In fact, the resolution passed at the last general convention of the C.F.U. held in Quebec City in October 1967, read as follows:
The general convention of the C.F.U. recommends to the federal and provincial governments to revoke immediately all licences issued for cloud seeding.
I think the C.F.U. is suggesting that we should ask some questions so as to get further information on orders of the day. That is what I did. I am waiting for answers to my questions. All this should bring the government to pass legislation. We must have some legislation and we can no longer leave this matter up to some companies. Mr. Speaker, it is regrettable to say this, but during the past years, I even read articles written by the authorities of certain companies defending these seedings. They stated that the interests of companies and industries should come before the interest of the population.
For my part, I say that this is absolutely false. We are here in the first place to work for the population without neglecting the industrial interests and especially research, but it is possible I think to associate both, to protect the population and carry on such research, because as the hon. member for
November 29, 1968

Timiskaming stated earlier, this is scientific progress which could be quite valuable in case of a disaster and could even improve the production of our industries. We should not stop everything by saying: We do not want any more seeding. No. Once again I insist that we merely want that seeding to be governed by a specific act which will take into account all the interested parties. We plead the case of the people, but company officials, just like farmers, also have the right to plead their own case.
This bill is a start and if perchance it is not referred to a committee this evening, I would urge the government to introduce similar legislation right after the Christmas recess. Mr. Speaker, the house may rest assured that we will support it, thereby expressing the will of all those who, in the past, have suffered from those artificial rains because they were not controlled. Cloud seeding without control is like anything else which may be good in itself but becomes evil when there is any excess.
I therefore hope, Mr. Speaker, in order not to prolong the debate any more-I would not want to be accused of having killed the bill- that the bill will be referred to a committee for study and that legislation will be introduced for the control of cloud seeding as soon as possible.
[DOT] (5:40 p.m.)


Stanley Stanford Schumacher: Mr. Speaker, my hon. friend from Timiskaming (Mr. Peters) says he believes there are effective rainmaking machines and the bill appears to be based upon that premise. This is a subject that has long vexed the south-central area of Alberta, that I have the honour to represent. I noticed the hon. member for Ottawa West (Mr. Francis) intervened in the debate, I suppose because of his connection with the same area. Everyone in that area is extremely interested in this question of weather modification. Despite long studies and a great deal of money that is being spent in a study of the subject by individuals, private groups, municipalities, provincial governments and federal government agencies, it has certainly not become clear to the population of Alberta or to the government of that province that there are such things as effective rainmaking machines. In fact, the large groups of population in that area are divided into those who belong to the converted and those who belong to the unconverted in regard to weather modification.
Rainmaking Equipment
Every year,	Mr. Speaker, we find
municipalities subjected to plebiscites to determine whether or not they should pass a bylaw to enable them to employ the services of a weather modification company. I might say that the most prominent company in this regard is the Irving P. Creek Company based in California, who have operated their fans in Alberta.
Some people have adopted weather modification almost as a religion. Others are equally as well convinced that the theory of it is inaccurate and that it is ineffective. As I was saying, Mr. Speaker, there is an annual plebiscite conducted at great expense in the municipalities involved. The subject creates bad feeling between neighbours, and we cannot seem to come to any final conclusion as to whether or not the provincial government, at least, should recognize the procedure as an effective one.
It is my feeling that instead of passing a bill such as this, which does not seem to promote the kind of inquiry required into this general field-as I have said, the situation is not fully clarified as yet-the government should be devoting its activities to promoting more research in this area. In this respect I feel that the bill is premature.
I know my hon. friends who sit in the same part of the house as the sponsor of the bill are very prone to controlling things; it seems that that is their expertise. But in this case they will not even allow the goose to be born, before wanting to control what might be the goose that lays the golden egg.
If there is indeed some method by which rain can be increased in the prairie provinces, then the output of the area could be doubled or tripled. Large areas of eastern Alberta, and I suppose western Saskatchewan, are not producing the crops they could produce if they received more rain.
The explanatory note to the bill says the purpose of the bill is to provide for compensation where damage is deemed to result from the use of rainmaking machines. I have looked through the bill but I cannot see this provision. I find no clause in it which lays responsibility for damage caused. It does not say that the government or that the user of the machine will be responsible for such damage.


William Arnold Peters: The bill does provide for licensing.


Stanley Stanford Schumacher: I do not find that provision. Perhaps my copy of the bill does not

November 29, 1988
Rainmaking Equipment contain that clause. As far as I can see the bill provides for the licensing of the owners of equipment; but it does not say how the owners of the equipment should use the equipment. In any event, I would suggest that this provision does not have to be in the bill, because if a person does cause damage through the use of some piece of equipment that he owns, and causes injury to a person, the ordinary law of negligence would apply and the responsibility would be upon the person at fault.
In my view, Mr. Speaker, as I say, the bill is premature. There is room for research in this field. The Alberta hail study group, which I believe is associated with the Alberta research council, and to which the dominion government contributes funds, has not made the statement that there is such a thing as an effctive rain increasing procedure. Until such a thing happens we are dealing with something, really, that is not here. I suggest we have no effective machines and we cannot control them. I think the government would be better advised to undertake research into this subject.
[DOT] (5:50 p.m.)
If we could produce such machines the agricultural output of this nation would be greatly increased. Frankly, everyone in my area would be happy to settle this question, since feuds are developing over it.
I do not think the bill should be referred to committee; I think it is premature, and this is the wrong way to attack the problem. That there is a problem I agree, but the answer to it lies in research, and not in some sort of legislation which seeks to control machines which have not proven effective.


Mr. Ralph Stewart (Cochrane):: Mr. Speaker, this is one of those rare occasions when I find myself agreeing with the hon. member for Timiskaming (Mr. Peters). I told him today I wanted to speak on the subject because I think there ought to be some kind of control over rainmaking equipment. A few years ago I would have put rainmaking machines into the category occupied by voodoo and witch doctors. After spending the last summer in northern Ontario I have changed my mind, because we were rained out in northern Ontario.
I understand that the entire subject is of large scope and has been studied by the meteorological branch. I know that complicated policy implications are involved, and that rainmaking machines are still experimental.

Frankly, I cannot understand all the fuss about constitutional problems that was raised by the hon. member for Ottawa West (Mr. Francis). These machines came into use without anyone raising constitutional problems. It seems, though, that when it is a question of buckets of water falling on the heads of my people in northern Ontario we have to be involved in constitutional matters to stop it.
The Northeastern Ontario Municipal Association met at the end of the summer and sent me a letter, which I assume other hon. members received also. The association wants the senior or federal government to pass legislation controlling weather modification apparatus. The association represents 17 municipalities in northeastern Ontario and says this in its letter:
As you are aware, the heavy rainfall which occurred in this area, leaves a lot to be desired, and has caused damages to our tourist and wood industries, and farmers.
The attached figures compare rainfalls for the summer months of 1967 and 1968. In June, 1967, there were 3.37 inches of rainfall, for this year, 1968, the rainfall was almost double, at 6.09 inches. In July 1967, average rainfall was 2.8 inches and in July of this year it was 8.97 inches. I think this indicates conclusively that rainmaking machines are effective.
The explanatory note of the bill has this to say, in part:
It appears that control licensing and regulations must be adapted to protect the public and make possible the payment of compensation where damage is deemed to result from such use.
I do not think you could apply such legislation, since rainmaking equipment is not like a switch. It will not rain when you press the switch, and stop raining when you take your finger off the switch. Therefore it will not be possible to make compensation. One would have to go to court and prove that the damage caused resulted directly from rain brought on by rainmaking machines, and I do not see how that would be possible.
I should prefer to see a bill that seeks only to control these machines, so that not just any company, or any Tom, Dick or Harry could try to make rain. What would happen, for example, if one of these machines went out of control? Supposing someone seeded clouds and it began to rain uncontrollably? What if our weather were affected over a long term? All that ought to be considered. I think that studies ought to be undertaken in this field.
November 29, 19S8
However, I hope those studies are not undertaken in northern Ontario. We hear about damp wheat and grain, but no one worries about damp wood in northern Ontario. We have been hearing about problems with grain on the prairies for years, but no one says anything about the wood industry in northern Ontario, which is the largest industry in Canada. Perhaps the members from northern Ontario should start screaming; perhaps then the old adage that the squeaking
Rainmaking Equipment wheel gets the grease would hold true in our case. I hope any tests are conducted in arid parts of the country.


The Acting Speaker (Mr. Bechard):: Order, please. The hour for the consideration of private members business has now expired. The time being six o'clock the house stands adjourned until 2.30 p.m. Monday next.


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


Monday, December 2,1968

[Stage Direction]
Third report of standing committee on labour, manpower and immigration-Mr. Caccia.
[Note: For text of above report, see today's Votes and Proceedings.]