1968-11-05

PRIVILEGE


Mr. Speaker:: Last Thursday, the hon. member for Abitibi (Mr. Laprise) on a question of privilege protested against the lack of personnel and facilities in committees of the house. The hon. member complained more particularly about the lack of interpreters available to those committees. Since then, in co-operation with the officials of the house, I have studied seriously the problem mentioned by the hon. member.
I wish to say that, in general, the hon. member is fully justified. All hon. members will recognize, I am sure, that the committees should sit only when the interpretation services requested by hon. members, whether they are French or English-speaking, are available for the proceedings of the committees.
During the last few days, several committees have been sitting at the same time, thus putting to a hard test the services the house can provide. Special arrangements will have to be made to prevent a recurrence of the situation about which the hon. member complained. Steps will soon be taken with a view to improving both the interpretation and the translation of the proceedings of the committees of the house. Still, I doubt that we would contribute to solving the problem by suspending the work of all the committees as was suggested rather radically by the hon. member for Abitibi in this motion.
The fact remains that the member did his colleagues a good turn by calling the attention of the house to this problem.



COMMITTEES OF THE HOUSE

[Stage Direction]
First report of standing committee on national resources and public works-Mr. Hopkins.
Second report of standing committee on broadcasting, films and assistance to the arts-Mr. Reid.
[Note: For text of above reports, see today's Votes and Proceedings.]
[DOT] (2:40 p.m.)

Mr. Ovide Laflamme (Montmorency) moved: that the first report of the standing committee on privileges and elections, presented to the house on Thursday, October 31, 1968, be concurred in.


[Stage Direction]
Motion agreed to.

Mr. Gaston Isabelle (Hull) moved: that the first report of the standing committee on health, welfare and social affairs, presented to the house on Thursday, October 31, 1968, be concurred in.


[Stage Direction]
Motion agreed to.

Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I should like to inform the house that by order in council No. P.C. 19682075 of today's date, writs will be issued for a by-election to be held to fill the vacancy in the federal constituency of Nanaimo-Cowi-chan-The Islands on Monday, February 10, 1969.



TRANSPORT


Mr. Jack Marshall (Humber-St. George's-St. Barbe) moved: for leave to introduce Bill No. C-125, to establish a Newfoundland tunnel authority.


Some hon. Members:: Explain.


Jack Marshall: Mr. Speaker, it is the intention of this bill to establish a Newfoundland tunnel authority with a view to promoting a
November 5, 1968

Inquiries of the Ministry multipurpose connection between the mainland portions of the province of Newfoundland and Labrador. The objects of the authority would be to undertake all preparatory steps necessary with a view to the ultimate construction of a tunnel for the purpose of transporting goods and persons between Newfoundland and Labrador and, to the best of its endeavours, to ensure the necessary supporting facilities such as highways, connecting roads, rail lines, power lines, waterfront installations and other similar developments as ancillary works. In some respects our province has been an overlooked part of this land-


Mr. Speaker:: Order, please.
Motion agreed to and bill read the first time.



DOMINION-PROVINCIAL RELATIONS PROSPECTIVE FEDERAL WITHDRAWAL FROM JOINT SOCIAL PROGRAMS

[Stage Direction]
On the orders of the day:
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister.
In view of the fact that he indicated yesterday that the federal government would, within the next few years, withdraw from shared-cost programs and that medicare would be handed over to the provinces, I should like to know whether he intends to adopt the same attitude with regard to the whole field of social security? Does the present government intend to hand back to the provinces their jurisdiction in this field?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, the government's position in this regard was announced two years ago. It is a policy that is continuing. In most of the fields concerning social security governed by cost-sharing programs, we have already allowed the province of Quebec to take a fiscal equivalent, and we have suggested to the other provinces to follow the same policy, in order that the province that levies taxes shall be also called upon to use and administer the amounts collected.
Once again I say that this is part of the government policy and that this has been the subject of proposals not only in 1966 but also during the federal-provincial conference of finance ministers that is now taking place.


Martial Asselin: I would like to ask a supplementary question, Mr. Speaker.

Would the right hon. Prime Minister tell the house at what time his government will completely hand over the field of social welfare to all the provinces? Will it be on the occasion of the federal-provincial conference to be held here next December? Have there already been consultations with the provincial delegates to pursue the line of action of the government?


Mr. Trudeau:: Mr. Speaker, while not
repeating my previous answer, I could perhaps refer to the word "completely" used by the hon. member.
In our opinion, social security falls completely under provincial jurisdiction, but we should be able give a definition of what is meant by "social security". We have never thought, for example, that the federal government does not have complete jurisdiction with regard to family allowances. I therefore do not understand what the hon. member means by the word "completely". As for our general policy, I outlined it earlier.


Mr. Real Caouetie (Temiscamingue):: Mr. Speaker, I should like to ask a complementary question.
Does the right hon. Prime Minister not agree that his statements on social security are slightly contradictory?
On the one hand, the right hon. Prime Minister says that the federal government will eventually give back to the provinces their rights in the field of social legislation. On the other hand, he says that the new 2 per cent tax is a social development tax intended to help social legislation in Canada, and he takes the attitude of not paying to the provinces the amounts of money-


Mr. Speaker:: Order.


David Réal Caouette: -they are requesting.
Does the right hon. Prime Minister not see a contradiction in this attitude?


Pierre Elliott Trudeau: Mr. Speaker, there is no contradiction, because in all these fields-as I would remind the hon. member-we have not passed any legislation. We have not tried to say how, for example, the joint programs should be administered by the provinces; we have been satisfied with imposing taxes and transferring the proceeds to them. That is exactly what we are doing with the 2 per cent tax. We just tell the provinces that this way of administering is not consistent with our long term policy and that, in the long run, we want, as much as possible, to request all the
November 5, 1968

other provinces to follow more or less the example of the province of Quebec, that is, collect their own taxes and administer their own programs.
It is clear that the federal government will need tax sources from other areas which come under its jurisdiction. It is for this reason, of course, that we levy taxes.


Mr. David Lewis (York South):: I have both a supplementary and a related question. First, would the right hon. gentleman inform the house whether, in view of the difficulties which seem to have emerged during the conferences now in progress, the government is giving consideration to setting up permanent machinery to enable continual consultation between the federal and provincial governments in the fields of fiscal matters, social welfare and old age security?


Pierre Elliott Trudeau: Such machinery presently exists in the form of a tax structure committee. I believe more could be done. We stated to the federal-provincial conference in February that we were prepared to examine such questions, but this will be a matter to be debated at the federal-provincial conference. For the time being the tax structure committee exists, as it has existed for several years.


David Lewis: In view of the Prime Minister's statements yesterday and earlier today that the federal government intends to vacate all the shared program fields, may I ask whether he has an alternative plan to ensure equal and national standards for Canadians in every region in these fields of social services and social security?


Pierre Elliott Trudeau: Yes. This plan was stated by the then minister of finance in 1966 at a meeting of ministers of finance of the federal government and the provinces. I repeat, it is an indication that we are prepared to withdraw in a general way from the kind of programs followed now, which is a joint program consisting largely of the federal government transferring some of the revenues of its taxation to the provinces. This is the general approach, and it was explained quite thoroughly in 1966. It is still our approach today.
I do not say quite as blandly as did the hon. member that we shall vacate every area of social security. As I told the other hon. member a few moments ago, it depends on what you mean by social security, but in general our approach to joint programs is that the taxation for and administration of
Inquiries of the Ministry them should be in the hands of the provincial governments.


David Lewis: Before asking a supplementary question, Mr. Speaker, I wish to say I was not bland about it. I hadn't the right under the rules as presently constituted to express my indignation-


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


David Lewis: May I ask the right hon. gentleman to explain to the house how vacating certain tax points, 17 or whatever it may be, can be of help to poorer provinces who do not have the base to raise revenues?


Mr. Speaker:: Order, please. I would think this supplementary is clearly argumentative.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my supplementary to the Prime Minister is, does this include programs devised and proposed by the federal government and imposed upon the provinces without prior consultation?


Pierre Elliott Trudeau: This question, Mr. Speaker, is surely argumentative-


Some hon. Members:: Oh, oh.


Marcel Joseph Aimé Lambert: What about your answer?


Mr. Speaker:: In view of the Prime Minister's ruling I shall recognize the hon. member for Brandon-Souris.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister. In view of the comments made by provincial finance ministers, would the Prime Minister not agree it is highly desirable to improve immediately the consultative machinery which presently exists between the federal government and the provincial governments?


Pierre Elliott Trudeau: Yes, Mr. Speaker, we are always prepared to improve the machinery. As the hon. member knows there is a great deal, in fact a tremendous amount, of federal-provincial consultation going on at all levels. There are literally hundreds of meetings every year between federal and provincial officials on all aspects of law which involve both levels of government. There are dozens of meetings at the ministerial level, and

November 5, 1968
Inquiries of the Ministry prime ministerial meetings occur fairly frequently. This is all part of the machinery. There is also the tax structure committee, which is composed of federal and provincial officials, and the question of a secretariat, asked about a few minutes ago, which is a subject that has been discussed at federal-provincial conferences for many years.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a supplementary question to the Prime Minister. When the Prime Minister refers to the transferring of shared cost programs to the provinces is it clear that he is talking only about shared cost programs; that is, that there is no intention to transfer such programs as old age security and family allowances?


Pierre Elliott Trudeau: That is right, Mr. Speaker. That is what I indicated in answer to one of the earlier questions. I was not talking about all areas of social security. Indeed, I would not say that I was talking about all shared cost programs. There may be some I do not have in mind, but I do include those which were the subject of suggestions or propositions of the then minister of finance in 1966, and the suggestions made today and yesterday by the present Minister of Finance. They concern certain shared cost programs and not all areas of social security.


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. In the light of the exchange we had yesterday concerning medicare, and in view of the fact the Prime Minister was not able to be here for the late show last night, may I ask him whether he has had an opportunity to review the Medical Care Act, and would he not now agree that that act provides for a review at the end of the five years, not for an automatic change?


Pierre Elliott Trudeau: Yes, I did review the act, Mr. Speaker. I reviewed also the statements and the context in which the statements were made. It is still my reading of the act that after five years there is a presumed intention of the government that there will be in respect of medicare what is intended in respect of the other joint schemes which were discussed earlier today, a transfer to the provinces of the fiscal resources to permit them to carry on with this form of social assistance, as it is the intention to have them do in other areas where there will be a transfer of resources.


Stanley Howard Knowles: have a supplementary question. Was it not clear that this was to be made in the form of proposals and not a fait accompli?


Pierre Elliott Trudeau: Yes, Mr. Speaker, it is. The act says, I believe, as it was quoted by the hon. member, that after five years there will be a review and that proposals of a specific nature will be made, the specific nature being that to which I referred, the transfer of tax room or other means. It seems to be quite clear that this act states the intention of the government as I have stated it.


Gerald William Baldwin: I have a supplementary question.


Mr. Speaker:: Order. I have to remind hon. members that it is somewhat irregular to be debating the interpretation of a statute at this time. I know a number of questions have been asked and because of the importance of the subject I allowed the questions to be answered. Perhaps we should not pursue the debate much further.


Gerald William Baldwin: I am not going to ask for an interpretation. I should like to ask the Prime Minister whether it is the intention of the government to ensure, no matter what scheme is followed, that the provinces will be provided with the equivalent of 50 per cent of the cost of this program, pursuant to the statute?


Pierre Elliott Trudeau: It is the general approach which was presented in 1966, Mr. Speaker, that the federal government would withdraw and provide tax room and supplementary benefits of an equalization nature which would be the equivalent of the federal government's participation before withdrawal.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister. Would the Prime Minister advise the house whether the Secretary of State was announcing government policy in stating his support for the view that privileges enjoyed by what he called British immigrants should be withdrawn? In particular would the Prime Minister say whether these privileges are to be withdrawn from
November 5, 1968

immigrants to Canada from all Commonwealth countries who presently enjoy them?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I would have to look at what the Secretary of State said. I am not aware of the statement. I do not know exactly what he said. I would be prepared to look at it and decide whether it is government policy or not.


Walter Gilbert Dinsdale: As a supplementary question, inasmuch as some of these privileges are reciprocal and are offered by other Commonwealth countries, would the Prime Minister, in the course of his examination of this matter, consider the advisability of placing it on the agenda of the next Commonwealth conference with a view to abolishing these reciprocal arrangements?


Pierre Elliott Trudeau: Mr. Speaker, the agenda of the next Commonwealth conference, to take place in London in January, has already been set after a great deal of consultation with all the attending members. It probably would be too late at this date to add another item. However, I could only answer this question after having seen what the Secretary of State really said, and even then it would perhaps not give rise to putting it on the agenda in some future year. I do not really know.


Martial Asselin: Mr. Speaker, I would like to ask a supplementary question. Could the right hon. Prime Minister assure the house that if privileges are-


Mr. Speaker:: Order. The member for Trois-Rivieres is rising on a question of privilege.


Mr.   J.-A. Mongrain@Trois-Rivieres: On a
question of privilege, Mr. Speaker, may I ask the hon. member for Brandon-Souris to tell the house when and where the Secretary of State mentioned what he was just talking about?


Mr. Speaker:: Order, please. I doubt if that is a question of privilege. It is a very simple question, but the hon. member cannot ask it at this time.


Gerald William Baldwin: The hon. member for
Brandon-Souris isn't on the roster today, so he cannot answer questions.


Martial Asselin: Mr. Speaker, I should like to put a supplementary question to the right hon. Prime Minister.
Inquiries of the Ministry
Can he assure us that he will ask the Secretary of State to grant immigrants of French origin the same privileges enjoyed by immigrants from the British Commonwealth?


Pierre Elliott Trudeau: In my opinion, Mr. Speaker, the hon. member is going in a direction quite contrary to that of one of his party colleagues. The question is not to take away privileges from the British or to give some to the French but rather to put all Canadians on an equal footing.
Therefore, I think that it is to that end that we should work rather than trying to extend privileges to a few preferred groups; whether they are of British or French origin, we should put all Canadians on an equal footing.
As the hon. member knows, there are still a few discriminations. The government of which I am honored to be a member abolished last year a large number of discriminations against those who have acquired Canadian citizenship, but some voting privileges still exist in the case of British subjects.


Mr. Robert Muir (Cape Breion-The Sydneys):: With regard to the same question and with reference to the remarks allegedly made, may I ask the right hon. gentleman whether all ministers of the crown are free to express personal opinions on matters of government policy, or whether this privilege is reserved only for the Prime Minister's cronies.


Mr. Speaker:: Order, please.


Walter Gilbert Dinsdale: Mr. Speaker, this question is supplementary to the question asked by the hon. member for Charlevoix. Inasmuch as the Prime Minister's additional statement on this matter indicates that the government is advanced in its thinking and policy making, could the Prime Minister give the house some indication of when the white paper on citizenship will be presented to the house so we can all share in these matters?


Pierre Elliott Trudeau: I believe the question might be asked of the Secretary of State. I am not aware of the timing on this.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, my question is directed to the Prime Minister. In view of the announcement by the Minister of National Health and Welfare that
2426	COMMONS
Inquiries of the Ministry the government intends to turn the Indian health services over to the provinces, as reported in today's Globe and Mail, will the Prime Minister say whether his colleagues who have responsibility for Indian affairs have consulted with the Indian people on this matter?


Right Hon.   P.-E. Trudeau@Prime Minister: Here again I am not quite sure of the particular reference that is made to the Minister of National Health and Welfare. I am not aware of his exact declaration in this regard.


Robert Simpson: I have a supplementary
question.


Mr. Speaker:: Order. The hon. member must remember that he can ask questions relating to statements made outside the house only by asking the Prime Minister whether such statements represent the policy of the government. I am not sure whether the statement to which the hon. member refers was made outside the house, in the house or in committee. If it was made in committee I do not think the question can be asked.


Robert Simpson: Mr. Speaker, might I rephrase the question. Was the Minister of National Health and Welfare stating government policy when, as recorded in the Toronto Globe and Mail, he announced to the provincial finance ministers that the government intends to turn over the Indian health services to the provinces.


Pierre Elliott Trudeau: Mr. Speaker, once again I would have to see exactly what he said. There is a long term intention on the part of the government-and this is to be debated, I suppose, as part of our Indian policy-to arrive eventually at a situation where Indians will be treated like other Canadian citizens of the particular province in which they happen to be. It may have been something along this line to which the minister was referring.


Walter Gilbert Dinsdale: Mr. Speaker, this question is a supplementary and is directed to the Prime Minister or to the Minister of Indian Affairs and Northern Development as the case may be. Is it the intention of the federal government to provide the necessary funds for the medical care of Indians?


Pierre Elliott Trudeau: Mr. Speaker, when we do embark upon this kind of transfer of responsibility we generally accompany it by an equivalent transfer of funds, either by way of

DEBATES	November 5. 1968
fiscal points or by way of other grants. When we do it by way of fiscal points it is generally supplemented by supplementary payments which have an equalization effect.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I should like to ask the Prime Minister whether the Indian people have been consulted in respect of this announced intention of the government to transfer responsibility for their care to the provincial governments.


Pierre Elliott Trudeau: Mr. Speaker, I am just stating the general orientation of the present government. We talked about this a great deal during the election. It is not the object of any precise policy as yet. As I stated earlier, the policy regarding Indians will be presented by the minister at a later date and will be subject to debate. I am sure before the minister does so he will continue the very intense consultations that he and the Minister without Portfolio have been conducting.


Robert Simpson: Mr. Speaker, I should like to direct a further supplementary question to the Minister of Indian Affairs and Northern Development. Can he say whether the Indian people have been consulted on this matter?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, as the Prime Minister said, we consult with the Indians on all policies which concern them. At the present time, we are holding consultations with all the provinces, and this is the first time that the Canadian government has ever undertaken such consultations. The Indians will be consulted on each one of the policies which may affect them. However, as the Prime Minister said, what we want-and the Indians are in agreement- is that they should become equal citizens in Canada.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Prime Minister. About two weeks ago I had a question on the order paper with regard to turning Indian health services over to the provinces, and at that time the health minister stated that if they were turned over to the provinces the provinces would be responsible for paying the costs. Today the Prime Minister stated that the provinces would be compensated. I am wondering who is stating the policy of the government.
November 5, 1968



BRITISH COLUMBIA-PUBLICATION OF NAMES OF WELFARE RECIPIENTS

[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the minister of Indian affairs. Did the Indian affairs branch in British Columbia recently publish and distribute the names of Indian recipients of welfare in that province?


Joseph Jacques Jean Chrétien: Mr. Speaker, I know nothing about this problem; I shall look into it and report to the house tomorrow.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (Surrey):: Mr. Speaker, I should like to bring a question to the attention of the parliamentary secretary to the Minister of National Health and Welfare in view of a statement issued today by the department to the effect that the lung cancer epidemic is worsening in Canada. The statement also suggested that most lung cancer deaths are attributable to cigarette smoking. Could this whole matter of cigarette advertising be referred to the standing committee on health and welfare?
[Translation\


Mr. Rosaire Gendron (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I shall take this question as notice and advise the minister accordingly.



SPRINGHILL, N.S.-POLLUTION FROM FIRE IN MINE DUMP

[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland-Col-chester North):: Mr. Speaker, I have a question which should be directed to the Minister of Energy, Mines and Resources. In view of the fact that he is out of the country I will direct it to the Prime Minister. What action does the government intend to take to either eliminate or curtail a fire raging in a mine dump in the town of Springfield which now covers over 50 acres and is estimated to be 40 feet in depth? This is polluting the whole town and is a very serious matter for the 8,000 people who live there.
29180-154}
Inquiries of the Ministry


Right Hon.   P.-E. Trudeau@Prime Minister: As the hon. member has stated, Mr. Speaker, the minister is on a mission to South America. Perhaps the question can be answered on a day which is one assigned to departmental affairs of the Department of Energy, Mines and Resources.


Mr. Thomas M. Bell (Saint John-Lancaster):: Mr. Speaker, in connection with this roster business does the Prime Minister know that four ministers who should be here today are absent? I refer to the Secretary of State for External Affairs, the President of the Treasury Board, the minister for Indian affairs has just arrived; the Minister of National Health and Welfare and the Minister of Veterans Affairs. Will the Prime Minister explain how his system is working to the great advantage he suggests when ministers are not even here when they should be?


Pierre Elliott Trudeau: Mr. Speaker, I will explain again that the system does not require the physical presence of the ministers.
Mr. Fair weather:	Does the government
require their physical presence?


Pierre Elliott Trudeau: No, the government does not require their physical presence either.


An hon. Member:: Then get rid of them.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: Here we go again, Mr. Speaker. On certain days certain departmental areas will be answered by the minister or by the acting minister. In looking at the names mentioned by the hon. member in his question, I should state that the President of the Treasury Board is at the federal-provincial conference now taking place.


An hon. Member:: Who is the acting
minister?


Pierre Elliott Trudeau: His acting minister is the Postmaster General, who will be delighted to answer any questions that come within his concern. The Minister of National Health and Welfare is also attending a federal-provincial conference, and his parliamentary secretary has just indicated that he is answering for him. The Minister of Veterans Affairs is unfortunately ill. I see that quite a few members of the opposition are apparently ill as well.


Some hon. Members:: Oh, oh.
2428	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. I wonder
whether the hon. member feels that this matter should be pursued further?


Thomas Miller Bell: Mr. Speaker, I thank the Prime Minister for answering my question. I should like to ask him whether we should conclude from his answer that this indicates a situation with a one man government, or that the ministers are afraid to stand up in this house and answer in respect of their responsibilities.


Mr. Speaker:: Order, please. I take it the right hon. Prime Minister would like to reply.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. I understand the hon. member for Burnaby-Seymour would like to ask a supplementary question.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. I suggest that we might easily go on to another subject.


Mr. Ray Perrauli (Burnaby-Seymour):: Mr. Speaker, I should like to ask the President of the Privy Council, in view of the fact that the Leader of the Opposition and the right hon. member for Prince Albert are not in the house today, whether the minister can advise if to his knowledge a duty day roster has now been established by the official opposition.


Mr. Speaker:: Order, please.


Robert Muir: Mr. Speaker, my question is supplementary to the question posed by the hon. member for Cumberland-Colchester North, and I should like to direct it to the right hon. gentleman across the way. In view of the fact that the question deals with air pollution and noxious gases which are spread through the air, sometimes causing death by asphyxiation, would the Prime Minister not say whether an investigation could be carried out through the Department of Energy, Mines and Resources?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I will raise the matter with the departmental officials.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I should like to take the Prime Minister off the hook. He seems to be getting tired. We are getting a little tired as well. Is the Minister of Fisheries prepared to respond

DEBATES	November 5, 1968
to the question which was taken as notice yesterday by his parliamentary secretary, as to whether the purchase of five million pounds of fish from the Atlantic region will result in an increased price to Atlantic fishermen?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, the federal government has taken and is now taking out of the hands of these fishermen about 20 per cent of one year's production. That is a sizeable quantity of fish. Current purchases are at market prices. I do not know what will happen to the market price in the immediate future, but I hope the government's action will have the effect of firming up the price generally and on a world wide basis.


John Howard Lundrigan: Mr. Speaker, is this fish being purchased by the Canadian government for transport to Biafra, or by the Atlantic trade?


John (Jack) Davis: The fish is being purchased by the Canadian government through various agencies in Newfoundland; for instance, the Newfoundland Associated Fish Exporters Limited, the Canadian Atlantic Salt Fish Exporters Association, and numerous other groups and individual firms in the trade.



DOMINION-PROVINCIAL RELATIONS ASSISTANCE TO PROVINCES FOR POSTSECONDARY EDUCATION

[Stage Direction]
On the orders of the day:
David Lewis: Mr. Speaker, I have another question arising out of federal-provincial relations. Would the right hon. Prime Minister inform the house whether it is the government's intention to cease or change the method of providing assistance to the provinces in relation to post-secondary educational institutions such as universities?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, this is the subject of an agreement between the federal and provincial governments. It is something that was embarked upon in previous years, and it is continuing at the present.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, in the absence of the Minister of Finance I would like to direct
November 5, 1968

a question to the Postmaster General as Acting President of the Treasury Board. How much did it cost the government to borrow $100 million for 11 days?


Mr. Speaker:: Order, please. I think the hon. member is asking for statistical information, and I would think this type of information cannot be requested at this time.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the parliamentary secretary to the Secretary of State. In view of the important event in the United States today, can he advise whether the Canadian Radio-Television Commission has received complaints about the Sunday night program, "The Way It Is", dividing Americans into three classes, rioters, policemen tackling rioters, and flower children running around without petals on them?


Some hon. Members:: Oh, oh.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. J. Edward Broadbent (Oshawa-Whii-by):: Mr. Speaker, I have a question for the Prime Minister. According to a recent newspaper report the Prime Minister's office is busy recruiting regional officers for the mari-times, Quebec, Ontario and western Canada. Would the Prime Minister please inform the house as to the general nature of the responsibilities of these officers?


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


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, my question to the Prime Minister is a follow-up of the question dealing with the return flights of the Hercules planes from Biafra. I raised this question last week. Has the Prime Minister received any representations from private agencies or the Canadian public with regard to the adoption of Biafran war orphans by Canadians?
Inquiries of the Ministry


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I know of only one letter-there perhaps have been more-from one person telling me that he was interested in such adoption. I indicated that he should have referred the matter either to his local church or charity organization. When we discussed this question in the house, I indicated this would be a proper avenue for solving this problem.


Mark Willson Rose: A supplementary question, Mr. Speaker. Since the Prime Minister has invited private agencies such as churches to deal with matters of adoption, medical supplies and personnel, does the Prime Minister not think that government leadership might be provided in this area?


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



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. F. J. Bigg (Pembina):: Mr. Speaker, I have a question for the Prime Minister. Has the government renounced its avowed intention of bringing in legislation to remove criminal records, as announced in the house by the Solicitor General on March 26 last?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I am told that the Solicitor General did not make such an announcement.


Frederick Johnstone (Jack) Bigg: A supplementary question, Mr. Speaker. I refer to Hansard of March 26. It is in the record.


Pierre Elliott Trudeau: Mr. Speaker, if this statement was made on March 26 it obviously was not made by the present Solicitor General. I will have to look up the record.


Erik Nielsen: A supplementary question, Mr. Speaker, directed to the Solicitor General. Is it government policy to renounce the previously announced policy of abolishing criminal records?


Mr. Speaker:: Order, please. The hon. member is asking for a statement of government policy and I would think the question as asked is not in order.


Erik Nielsen: Surely, Mr. Speaker, the
minister is responsible for answering to the house on questions concerning government policy. This is all I am asking.
2430	COMMONS
Inquiries of the Ministry Mr. Speaker: It is possible to answer questions which are accepted by the Chair as being in order. The hon. member's question is not in order.


Some hon. Members:: Hear, hear.


Mr. Donald Maclnnis (Cape Brelon-Easi Richmond):: Mr. Speaker, following up the question asked by my seatmate, I ask the Solicitor General whether in committee he made a statement supporting the statement made by the former solicitor general with respect to vacating criminal records, and whether this is not now government policy?


Hon. G. J. Mcllraiih (Solicitor General):: Mr. Speaker, I am glad of the opportunity to clear up this matter. In the committee dealing with the estimates of the department a question was asked about a private member's bill entitled "The expunging of criminal records", and I said that I did not think legislation in that form would be brought forward; I was not prepared to bring it forward in that form. But I went on to say that there were other methods of dealing with this subject, and I referred to the question of general pardons and the incidental striking off or limiting of the use of criminal records in connection therewith and said that I would bring before the committee at a later hearing full information as to the government's position on the matter. Regrettably, in the meantime hon. members, without having before them the committee evidence which is not yet available, have jumped to conclusions and misinterpreted what has been said. When the statement is made I would be very glad to have it widely distributed.


Donald MacInnis: A supplementary question, Mr. Speaker. I ask the minister whether he supports the contention outlined in a memorandum to the previous cabinet, of which he was a member, in which the then solicitor general referred to the matter in this way:
-yesterday I affixed my signature to a memorandum to my cabinet colleagues-
That was a memorandum in connection with vacating criminal records. The then solicitor general went on to say that he hoped to introduce a government bill-


Mr. Speaker:: Order, please. I would think the hon. member and the minister are getting into a debate and I suggest that the matter cannot be continued much further.


Donald MacInnis: A supplementary question to the Prime Minister, Mr. Speaker. I would ask 
DEBATES	November 5, 1968
the Prime Minister, are we still dealing with the idiots of the past?


Pierre Elliott Trudeau: Yes, we are.


An hon. Member:: How do you know where they are?


Donald MacInnis: We know where they are.


Mr. John Gilberi (Broadview):: Mr. Speaker, on a question of privilege, I was the member who asked the Solicitor General a question in the standing committee on justice and legal affairs with regard to the expunging of criminal records. Although I did refer to the bill sponsored by a member of the government, the then hon. member for Welland, I more particularly referred to the memorandum of the then solicitor general who said he had presented a memorandum to the cabinet for consideration and action.


George James McIlraith: Mr. Speaker, I do not know what question is involved in that statement, but as I indicated a few moments-


Mr. Speaker:: Order, please.



DOMINION-PROVINCIAL RELATIONS FEDERAL GRANTS TO PROVINCES WITH PATIENT PARTICIPATION IN WELFARE PROGRAMS

[Stage Direction]
On the orders of the day:
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my question is to the Prime Minister. Does the government intend to remove the discrimination in the matter of federal grants to those provinces which have patient participation in various social welfare programs?


Right Hon.   P.-E. Trudeau@Prime Minister: I am sorry, Mr. Speaker; I was talking to the Solicitor General and did not get the question.


William Gordon Ritchie: Does the government intend to remove the discrimination in the matter of federal grants to those provinces which have patient participation in various social welfare programs?


Pierre Elliott Trudeau: I am not aware of the discrimination that the hon. member is talking about, Mr. Speaker.



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. Steven E. Paproski (Edmonton Centre):: In the absence of the Minister of Transport,
November 5, 1968

Mr. Speaker, I should like to direct this question to one of the other ministers who may take it as notice. Will the minister take up with the officials of Air Canada the very serious problem being caused in Edmonton by the revised Air Canada winter schedule, which has the effect of reducing that important metropolis to a state of semi-isolation?



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, October 31, consideration of the motion (page 1677) of Hon. E. J. Benson (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Lambert (Edmonton West) (page 2262), and the amendment to the amendment of Mr! Saltsman (page 2276).
Mr. Henri Latulippe (Compion):: Mr. Speaker, when the budget debate was adjourned last Thursday, I was saying that the Bank of Canada puts up about $3 billion in money and bank notes as the basis of a money supply that can be handled and seen in part.
As far as financial credit is concerned, it is made up by the figures entered in bank accounts and really made up by the bankers for a loan or a bond issue for trade, industry and public institutions. Those amounts of bank credit-financial credit, banking entries -add up now to $24 billion, in addition to the $3 billion in bank notes of the Bank of Canada, and that means eight times more bank credit than visible credit.
Visible credit, Mr. Speaker, is made up of the $3 billion in capital really created by the Bank of Canada and put in circulation through the chartered banks.
When the amendments to the Bank Act were considered by the committee on finance, trade and economic affairs, the then minister of finance of Canada (Mr. Sharp) did say that the chartered banks issued credit money in that way in considerable amounts to meet the economic needs of the country.
When I asked him if the Bank of Canada or the government could issue that credit money totalling $24 billion as well as the first $3 billion in bank notes that can be seen and handled, he answered in the affirmative but added that the present method was deemed more satisfactory, namely letting the chartered banks issue that additional credit money
The Budget-Mr. Latulippe according to the procedures legalized by the government of 264 members elected by the people of Canada.
That very exchange between the former minister of finance and myself can be read on page 1732 of the proceedings of that committee.
When one is aware, Mr. Speaker, of the importance of currency, money, credit and capital in the administration and control of the economic life in Canada, when one is aware of the fact that the same chartered banks can issue eight times more money credit than the Bank of Canada, that is about $24 billion against $3 billion, it is easy to understand why in the current business life, the 300 chairmen and directors of the eight chartered banks in Canada are also directors of the 800 largest companies, corporations and millionaire institutions in Canada, o (3:30 p.m.)
Mr. Speaker, in view of those facts and evidences, there are only two things we can do with the present system: either borrow from a bank and get into debt in the process, or impede progress by restricting economic activity. These are the only solutions for the government as well as for individuals.
This is why, Mr. Speaker, municipalities, school boards, federal and provincial governments are always short of money or get heavily into debt with exorbitant interest rates.
I have on hand a few examples of exorbitant interest rates requested from cities, municipalities, school boards, provincial and federal governments. Indeed, I read this in the newspaper La Presse of October 30, 1968.
town of Saint-Jean sold a bond issue worth $480,000 at 71 per cent for ten years to an investment company. However, the town only receives 96 per cent of the amount on which it pays interest, or about $460,000. The actual interest rate on this loan therefore amounts to about 8.4 per cent. In ten years, the town pays $360,000 in interest, or 75 per cent of the full amount of the $480,000 loan.
Capital $480,000 Amount received (96%): $460,000 Interest $360,000
Total $840,000 paid back in capital plus interest.
That, Mr. Speaker, is ridiculous. That is why we have no choice in Canada but to go into debt and to pass on the burden to the school boards, municipalities, provinces and even to the federal government. It will never change, because we accept these exorbitant interest rates and because we allow municipalities, school boards and provinces to be exploited in that way. That is one of the
2432	COMMONS
The Budget-Mr. Gillespie reasons why provincial representatives are now meeting in Ottawa.
Incidentally, when provincial representatives meet here in Ottawa, it is not to discuss social, humanitarian or language problems, but to talk exclusively about money. In my opinion, the federal government should assume its responsibilities in order to be able to give the provinces the money they need for their own administration at a social and reasonable interest rate and not at the usurious rate of 8J per cent which the authorities of the town of Saint-Jean have just paid on $480,000 loan.
That is an abominable absurdity which is respected and accepted even by our administrators. The government cannot raise taxes any more, Mr. Speaker, because people do not have enough money to ensure a decent standard of living for their families. Houses, land and properties are sold to pay taxes. Agricultural products are difficult to sell or cannot be sold at all, just like manufacturers' products, not because they are not good, but because those who would need them have no money to buy them. They have no money to buy them because there are too many taxes, too many duties, in short, because the prices and the cost of living are too high.


Mr. Speaker:: Order. I must interrupt the hon. member to tell him that the time allotted to him has unfortunately expired.
The hon. member might obtain the consent of the house to continue his remarks for a brief time. Is it agreed?


Some hon. Members:: No.


Mr. Speaker:: Unfortunately, there is no unanimity.


Mr. Alastair Gillespie (Etobicoke):: Mr. Speaker, in this my first speech to the house I should like to draw your attention to the fact that Etobicoke is a new riding. It forms a large part of the old riding of York West which was represented with such distinction in this house by Mr. Robert Winters.
The lands, rivers and people of this area played an important role in the early development of our nation. Over three centuries ago it was the place for commerce, exploration and discovery. Its people looked to the future rather than to the past. They looked for and sought a future better than they had. They sought the good life for themselves and for others.

DEBATES	November 5, 1968
And so it is today, Mr. Speaker. Our concern for the future must be based on the same principles; and it is in this context that I should like to talk about some of the conditions that we have to create in Canada for our future development. In particular I want to refer to creating conditions for investment, for fostering a strong Canadian point of view, and for sustaining confidence in our institutions, starting with the need to reform this house and its procedures.
The case against inflation has been made so many times and so cogently, Mr. Speaker, that I do not propose to repeat the arguments here except to draw your attention to the problems of government financing and oi financing our future economic growth in the private sector.
There are some who say that full employment and inflation go hand in hand, that one cannot enjoy the benefits of the one without paying the price of the other. They would promote the idea that a little inflation is a good thing, that it is good for business, that it promotes prosperity and keeps things going. In my view, Mr. Speaker, nothing could be more dangerous. This is the most corrupting philosophy of them all-short term euphoria, like the pathetic rationalization of the addict in the early period of his addiction protesting the wisdom of his own foolishness. Over a period of 15 years a 1 per cent deterioration per year in the value of our money amounts to a discount of 15 per cent. What man is going to lend $100 now, Mr. Speaker, if he can expect in return only $85?
The funds that are used to finance government deficits and extra budgetary needs, to purchase government bonds, federal, provincial or municipal, are mostly the collective savings of millions of Canadians. They are the premiums that are paid on life insurance policies and the deductions made from the weekly pay cheque for future pension benefits. Yet there has been a tendency in many quarters to identify those who purchase bonds with the "haves", as if the beneficiaries of the borrowings were the "have nots". Surely it is time to recognize that they are one and the same person.
The point to be made is this. Federal government extra budgetary needs plus provincial and municipal government spending are going to require enormous sums each and every year. Little of this development can take place unless we show the lenders that we can control inflation. And for the same reasons, Mr. Speaker, corporate expansion
November 5, 1968

will be curtailed unless we prove to those who would finance corporate borrowings that we are serious about controlling inflation. Obviously the uninterrupted series of budgetary deficits over the past ten years does not build confidence. That is why the minister's program for a budgetary balance by the end of the next fiscal year is so important.
Federal government policy must be designed to bring about and preserve an orderly capital market. This requires not only the management of its own debt and its own budgetary requirements; it requires on the part of the federal government a full appreciation of the capital needs of the provinces and municipalities and also the needs of the private sector. Just as in the tax fields arrangements must be worked out with the provinces so, too, is it important that there be collaboration on capital needs. There is, after all, a limited supply of money.
Nor can Canada rely solely on domestic sources of capital. Indeed, in recent years Canadian borrowings abroad have averaged close to $1 billion a year. Our ability to go to the United States market or to European markets will depend on the confidence we earn abroad, on confidence in our competitive position which must not be eroded by inflation at home, on their confidence that the risks of devaluation are negligible and that we are not always just about to change the rules.
Canada cannot insulate itself from world economic conditions and there is no use pretending that we can. This is all the more reason, therefore, to examine our vulnerability in areas which we ourselves do not control.
[DOT] (3:40 p.m.)
Within the last year there were three major international developments which seriously damaged confidence in the world's monetary system and in the Canadian dollar. I refer to the devaluation of sterling, to the United States guide lines and to French efforts to force devaluation of the United States dollar in terms of gold. Fortunately, after a rather uncertain period the value of the Canadian dollar has strengthened. This is not a time for complacency. There are many uncertainties facing the world monetary system today. Let us not forget that Canada is more vulnerable than most countries because of the large part, the enormous part, proportionately four times that of the United States, that foreign trade plays in our gross national product. Let us recognize that we rely at the present time on foreign capital flows to finance our balance of

The Budget-Mr. Gillespie payments. For these reasons we are vulnerable. For these reasons, too, I hope it will be possible to negotiate with United States authorities the removal of the upper limit of $2.6 billion on our foreign exchange reserves. We need this flexibility.
These truths, the need to establish confidence in our capital markets, the need to recognize the dangers of inflation, are central to the whole question of the future development of Canada. Yet in this area the two main opposition parties seem to me to be peculiarly inconsistent, though consistently ambiguous. They appear to have turned their backs on both monetary and fiscal measures. They seem to have discarded completely the idea that interest rates are an effective tool of monetary policy. Equally, they appear to ignore fiscal measures. They have been curiously silent on the desirability of a balanced budget. They deplore the effects of inflation but deplore even more doing anything about it. They profess, but they do not inform. Is this Progressive Conservatism at its modern best?
The N.D.P., on the other hand, seem to regard deficit spending as a way of life. They remind me of a man who would write a cheque for his favourite charity on a bank account that did not exist. Yet they talk of the eroding effects of inflation like the convivial roustabout who, anticipating his own overindulgence, lectures others on the predictable after-effects. When, for instance, has a spokesman for the New Democratic party publicly taken a position against wage increases which exceed productivity increases? When has a spokesman of the New Democratic party stated publicly that wage increases which exceed productivity increases are inflationary and therefore have to be paid for by every other wage earner in Canada- indeed by all Canadians? The N.D.P. behave as if cost-push inflation never existed.
I should like, Mr. Speaker, to turn now to the question of entrepreneurial spirit, initiative and enterprise from the Canadian point of view. As Canadians we need to concentrate on doing what we are best equipped to do. We can stimulate entrepreneurship through leadership by government, by insisting on a more efficient use of our research and development efforts and by insisting on a more selective effort. We have too often tried to cover too broad a spectrum and we have not concentrated on certain unique opportunities. Somehow or other we seem to have got caught up in a share the wealth approach to
November 5, 1968

The Budget-Mr. Gillespie investment in research, a something for everyone philosophy. I think the time has come to apply a very much more selective approach to research expenditures, and I think this approach should be tied directly to the idea of originality, to sponsoring Canadian originality.
We need to give our investment a Canadian slant. The character of a nation, the distinguishing quality of its people, is to be found in how it comes to terms with its environment, how it responds to the land, to the weather, to climate, to nature, to its natural resources, what it builds its houses out of, what it eats, how it works to sustain life above the subsistence level, how it plays, what it writes, sings and paints-in a word, in its capacity for originality.
We should realize that our originality has been subverted by our ability to obtain the benefits of foreign innovation. The Watkins report focuses on one aspect of this, the prevalence of the manufacturing licence, of the royalty agreement and of the engineering agreement. In return for a royalty on sales and, usually, an undertaking not to export, a Canadian company obtains the benefits of foreign research and development for its exclusive use in the Canadian market. This is the easy way; it takes the risk out of research because it requires none. In my view this particular device for obtaining foreign knowhow has had a more serious effect on Canadian entrepreneurial attitudes than any other single factor. The effect has been far greater, for example, than that of foreign ownership.
At the same time we must continue to concern ourselves with the development of our resources with Canadian ownership. That is not to say that we will be able to do the job alone. We must provide an hospitable climate for foreign investors, but we must also insist that future Canadian resource development will be undertaken in partnership with Canadians.
In this connection I think it most significant that the recent study completed by York University for the Toronto Stock Exchange indicated that there would be a serious lack of Canadian equities within five years. More particularly, the demand on the part of Canadians for equities will outrun supply in a ratio of approximately two to one. This has serious and far reaching economic implications in terms of foreign ownership and balance of payments difficulties.
One does not have to argue the case for efficiency in industry, nor does one have to
IMr. Gillespie.]
argue the case for efficiency with the Canadian public. How curious, Mr. Speaker, that one should have to argue the case for efficiency in this house with hon. members opposite.
At a time when man can contemplate the surface of the moon from a transmitter he has planted there, when he can watch in the comfort of his livingroom the carnage of war as it happens on the other side of the earth, when jumbo jets and supersonics will shortly revolutionize his mobility in the air and shatter his tranquility on the ground-


Mr. Winch:: But you cannot even balance the budget.


Alastair William Gillespie: -when man can destroy himself with the bomb and depopulate with the pill, when the sexual revolution can rock the very foundations of great religions, when the gap between the rich nations and the poor nations grows wider and when, against this background, even the most tentative steps in the direction of parliamentary reform are resisted in the name of freedom, is it any wonder that people ask how contemporary is the parliament of Canada today and, worse still, how relevant?
This sovereign body, it has been emphasized, protects our freedoms and the personal liberty of all Canadians as no other agency or institution does. Its ritual, its procedure, its symbols all emphasize that it won its freedom from executive power. Yes, Mr. Speaker, but the pace of events has quickened. What is needed now is a realization that the freedom to change is the most important freedom of all. What is needed now is the power to engineer change. I say to the opposition, do you not recognize change when you see it?
We operate as if television had never been invented, with no apparent awareness that a two-minute interview on the national network is more effective than an hour's debate. Let us recognize the importance of the electronic media. And let us be thankful that it can inform the people in a way that we cannot.
[DOT] (3:50 p.m.)
There is an enormous credibility gap in connection with the question of government efficiency, and it will remain a yawning chasm until such time as we place first priority on the efficiency of our own operations in this house. How can we criticize waste and poor productivity in the government service if we do not first of all raise the level of our own productivity? If we fail to convert this house into an effective instrument of change we shall have failed ourselves, we shall have
November 5, 1968	COMMONS
failed to understand democracy, we shall have failed to understand the mood of our country, we shall have failed the people of Canada.

We must, Mr. Speaker, make the most of the opportunity to build a stronger country with a greater culture by having a truly bilingual government. Both here and abroad, Canada will be recognized as a country in the lead.

Let us, as Canadians, welcome change for the opportunities it provides. Let us build our country with a distinctively Canadian entrepreneurial spirit.


Some hon. Members:: Hear, hear.


Hon. Hugh John Flemming (Carleton-Char-loite):: Mr. Speaker, before proceeding to make any remarks in connection with the budget I should like to congratulate the hon. gentleman who has just delivered his maiden speech in this chamber. I agreed so much with such a great deal of what he had to say that I thought he was perhaps sitting on the wrong side of the house.
I shall discuss the budget this afternoon under three general headings: the plight of the Canadian taxpayer, the plight of the Canadian government, and the plight of the provinces, with special emphasis on the Atlantic provinces and special attention to my own province of New Brunswick. At the outset I wish to make some comments on the minister's own speech and on the budget he presented, a budget which has been aptly referred to by my hon. friend from Edmonton West as a "chickens coming home to roost" budget. The minister mentioned in the course of his speech that economic conditions in Canada began to improve in 1961. In other words, he acknowledged that the previous government, the government led by the hon. member for Prince Albert (Mr. Diefenbaker), had brought the country out of the mess in which they found it in 1957. Here are the minister's words as reported on page 1678 of Hansard:
The Canadian economy continues the expansion which began in 1961, which ran to excess in 1965 and 1966, which slowed down in adjusting for these excesses in 1967, and which has accelerated moderately again this year.
The minister did not elaborate on his reference to excesses in 1965 or 1966, nor mention that he was a member of the government of Canada in those two years. Neither did he
DEBATES	2435
The Budget-Mr. Flemming mention the fact that the government apparently made no attempt to set its financial house in order during those two years so as to prevent those runaway excesses. He did not tell us about the sixty days of decision subsequent to the 1963 election which turned out to be sixty days of blundering. And now, after more than five years of blundering, the minister reported to this house in his speech on October 22, under the heading "Resisting Inflation":
It makes people, and the institutions through which they invest their money, increasingly reluctant to lend money except at high interest rates and in decreasing amounts.
In other words, you cannot have as much and you have to pay more. This is the result of the excesses. This is chickens coming home to roost with a vengeance, and without mercy. The people concerned are the ordinary people who buy the necessities of life. There is no other classification for it than to call it financial stupidity.
I acknowledge I may properly be asked this question at this moment: What should the government have done? During the years 1965 and 1966 when the economists reported extraordinary economic activity, government spending should have been reduced, by elimination in some instances, by postponement in others, by phasing out in others, so as to keep the economic temperature at the right level instead of contributing to heating it up to such a level that prices skyrocketed and the cost of living soared to an unparalleled degree. That is what happened under a government of which the present Minister of Finance (Mr. Benson) was a member, a government of which the Prime Minister (Mr. Trudeau) was a member. Instead of acting as I have suggested they went on a spending spree. They competed with private business for management, for labour, for materials growing ever scarcer, for money in the financial markets.
Now, according to the Minister of Finance, the spree is over. But the after-effects are still with us. The hangover is with us and the headaches are being suffered by all the people of Canada. As I say, the Minister of Finance did not mention the cause of the present situation. For the appropriate adjective I quote the Winnipeg Free Press, which called it a dismal mess. Before leaving the subject of inflation-and nothing could be more important, since it accelerates and pyramids the cost of living of everyone in this country-I want the house to realize that the end is not yet. In support of this statement I
November 5, 1968

The Budget-Mr. Flemming quote the words of the governor of the Bank of Canada as found on page 5 of his speech delivered in Victoria on October 17:
Taking the whole period since, say, 1960, our record with regard to costs and prices looked relatively good by comparison with other countries, but in 1966 and 1967 costs had been rising more rapidly than those of most of our major trading partners, including the United States. Indeed, by the autumn of last year we seemed to have developed an inflation psychology in this country. I tried to draw attention to this problem in a speech in Winnipeg last November. At that time I expressed the view that it was essential to break inflationary expectations by making it clear beyond doubt that inflation would not be accepted as a way of life in Canada and that this was the most urgent task of public policy. I am still strongly of this view, and my conviction is not lessened by the fact that Canada has been fortunate enough in recent months to have experienced a very strong international demand for many of its principal exports, or by the evidence that the deterioration in our cost and price structure has not gone so far as to undermine our international competitive position.
[DOT] (4:00 p.m.)
I draw your attention, Mr. Speaker, to the words of the governor when he said he tried to draw attention to this problem in a speech at Winnipeg last November. Surely the government must have been aware of it. I think it is natural and proper to assume that the government is very conscious of the views of the governor of the Bank of Canada.
We in Canada are fortunate in having the monetary system and its guiding principles in such good hands. However, I think that money supply is an important feature of monetary policy, and in this connection it cannot be other than alarming to have the figures concerning it brought to the attention of the house. From 1958 to 1962 there was a 5.6 per cent increase in the money supply. From 1963 to 1967 there was a 9.5 per cent increase. In 1967-68 there was a 14 per cent increase, and in June, July and August, 1968, an increase of 21 per cent.
It is obvious that the rate by which the increase in money supply exceeds the increase in productivity on a properly comparable basis qualifies under the old definition of too many dollars chasing too few goods. Since increased production is one way of dealing with the problem I quote again from governor Rasminsky's speech in Victoria on October 17, because there are two ways of dealing with the problem, stop the spending or increase production. Personally I favour increasing production if this can be done. I am a positive rather than a negative person. I know it is not always possible to increase

production, but here is what the governor of the Bank of Canada said in this regard:
Now that the problems connected with maintaining a sound external financial position have eased it is possible to concentrate once again on our other economic problems. I am afraid that none of them has gone away. Prices and costs are still rising too rapidly despite the emergence of considerable unemployment and unused capacity. The growth of the economy has been well within our potential for more than two years but so long as the strong upward trend in prices and costs continues, there are real risks in taking steps to accelerate the expansion of total spending in the economy. Our recent trade performance has demonstrated that Canada is still competitive internationally but it is also true that our recent exchange problems have shown how important it is to avoid any undermining of confidence by a further extended period of poor cost and price performance.
In other words, poor productivity.
It is plain that in addition to following sound fiscal and monetary policies we need to do everything we can to increase the efficiency of the economy and to bring about more realistic attitudes toward the size of the increase in the incomes, all forms of income, which we can really afford to pay ourselves. There has been a good deal of discussion in recent times about guide lines for increases in incomes and other aspects of incomes policy and I have made it clear that I favour action in this area. I am not going into that matter further today except to say that the basic limit, for the non-inflationary increase in incomes in any economy is not set by the authorities. It is set by our actual performance. The basic limit is the increase in real output per person employed. If we ignore that limit and settle for larger increases in money incomes-
Money supply, in other words.
-all we are doing is guaranteeing that prices will rise.
I come now to my topic which I announced at the beginning of these remarks, the plight of the taxpayer. In this connection I refer to the tables inserted in Hansard by the minister in the course of his budget speech, and particularly his statement relative to the 2 per cent social development tax. I immediately wish to challenge the label "social development." Since when has an additional tax become social development? Moreover, since' when has it become possible to differentiate in the taxing of a country as to where the money is going to be spent? Where will it go? It simply goes into the consolidated revenue-fund and then goes out to pay the bills. That is what happens to it.
The minister metaphorically puts his hands into the pockets of the people of Canada. He extracts $55 million between now and the end of next March and then he takes out another $440 million before March 31, 1970. Then he soothes the poor taxpayer by saying, "This:
November 5, 1968	COMMONS
may hurt some. You may be obliged to go without things you and your family need. You may be obliged to borrow money from the finance companies but in the long run it will do you good because of the label on the bottle"-the label being social development. Did anyone ever hear anything more ridiculous? We have other soothing syrup labels also. We have the "just society" and we have "equal opportunity," all intended as tranquilizers.
In connection with the 2 per cent tax let us examine the table found on page 1692 of Hansard. A married man with two dependants, earning $100 per week and now paying roughly $7.50 per week in taxes, will have his taxes increased by $46 a year, which is roughly $1 per week or approximately 12 per cent. Let us compare this with the tax to be paid by the taxpayer with a salary of $25,000 a year, or $500 per week. His tax is increased by $120. His total tax was a little less than $8,000 and so the tax increase is roughly 1J per cent for him. The fellow with $25,000 a year pays an increase of 1J per cent but the fellow with $5,000 a year pays an increase of 12 per cent. That is the just society.
This, I remind the house, is in addition to the 3 per cent surtax announced by the previous minister of finance on November 30, 1967. It was supposed to be temporary. That was the adjective applied to it, Mr. Speaker, but it is still with us. I have encountered much opposition to this 2 per cent tax increase and I am sure all hon. members have. I challenge the right of the minister to label it a social development tax unless the funds are kept in a separate account and earmarked for social development purposes only.
I now wish to comment on the taxpayer's interest in the tax on life insurance companies. When we decide to impose a tax on life insurance companies, a tax that has not existed previously, does anyone within sound of my voice think for one moment that this tax will not increase the cost of doing business for the insurance companies? Does not everyone know that it is going to mean larger premiums for insurance protection that people need, particularly when their families are small and before their education has been completed? There is no question about that.
I also view with some alarm the fact that the dividend payments on an insurance policy are going to be taxed. This is really a tax on thrift. Individuals as a rule buy so-called participating life insurance policies as a means of sharing in the earnings of an insurance company by having small amounts credited to their policies. Generally speaking these have
DEBATES	2437
The Budget-Mr. Flemming not been taxed in the past but they are going to be taxed in the future and this, I repeat, is really a tax on thrift. Some people blame this on computers but I blame the government. Computers are not making policy. They are merely mechanisms by which tax is collected.
The same principle is going to be followed in the case of interest payments by banks on savings. The banks now will be obliged to report any interest payment over $10. I believe that previously the amount was $100. Again we have a tax on thrift, and again the poor taxpayer gets it in the neck.
Insurance as a protection is a must in our society. It contributes to the improvement and strengthening of the morale of people. Encouragement to people to make provision for their own future and to provide individual protection for wife and family should be given by governments at all levels.
The minister further announced a reduction in permitted reserves of banks and trust companies, which he estimates will provide additional revenue of $45 million in 1969-70. This may properly be described as scraping the bottom of the barrel for revenue. For a long time we have bragged about our banking system. We have announced with pride that we went through the worst crisis in the world's history in the early 1930's with no bank failures. Now, in the affluent society period, we say to the banks: You do not need such large reserves any more; we are going to tax them away from you, and if you run into hard times again you may go broke. What kind of policy is this?
[DOT] (4:10 p.m.)
Before I leave the subject of the taxpayer I wish to mention an announcement by the minister that funds for the 1969-70 fiscal period will be secured by moving ahead the dates of payment of corporate income tax. This sounds great. The minister tries to convey the impression that every corporation is like International Nickel, a huge corporation with millions of dollars lying around, and that all the government has to do is move the money to the credit of the Bank of Canada. I say there are many small corporations carried on by people as family businesses. They incorporate these businesses because they want to have them continued after the death of the founder, probably by his son or sons. This happens in every part of our country. Everybody knows it. So I say that the stepping up of the payment of the corporation tax by two or three months, when in many instances the taxpayer has made no credit arrangements,
November 5, 1968

The Budget-Mr. Flemming will impose a real hardship on corporations which are really family businesses. I fail to see how the minister can derive much satisfaction from stepping up the payment of this tax.
All these points add up to one fact only, that this government is making it more and more difficult for the businesses of this country to be carried on. People are becoming more and more discouraged. They may be driven out of business. They are the revenue producers for the government. In many instances 50 cents on every dollar they produce goes toward the grinding away of this great big machine here in the city of Ottawa. Yet it appears that the government is gradually killing the goose that lays the golden egg when by ordinary business foresight it could keep it alive in a healthy condition to continue contributing to the general activity of the country.
Speaking once more on behalf of the taxpayer I refer the house to the forecast of the former minister of finance on November 30, 1967, when he introduced a 3 per cent income tax surcharge, raised alcohol and tobacco taxes, speeded up corporation tax payments and forecast an $80 million deficit for the fiscal year April 1, 1968 to March 31, 1969. Less than a year later his successor rose from his seat on the front benches and made an announcement. He said that the deficit which was estimated to be $80 million will be $730 million. He plastered on a 2 per cent tax for the last three months of the fiscal year for a net deficit of $675 million. This adds up to a difference in the figures in less than a year of approximately $650 million. I submit that this suggests incompetence. It suggests an incompetent, incapable and even inept government. That is what we have.
The question might be asked: have they learned their lesson; are they going to do better? The answer appears to be no. The finance minister says that spending will be restrained, but almost in the same breath he announces that in the next year they will spend an additional $890 million. I do not propose to examine the reasons for this extra expenditure. That will come up later. But I do wish to bring to the attention of the house the fact that the general financial situation in this country is still represented as being particularly good. The present government campaigned for election last June on the basis of saying: "We have it good; just give us a majority and we will show what we can do." So they got the majority. They have shown what they can do within six months by


acknowledgeing that they made an error in forecasting of more than $600 million. That is the number one accomplishment so far. Then they say that they anticipate increased expenditures next year of nearly another billion dollars. They also gave a guarantee to the investment people in New York that expenditures would not exceed $10,300 million, but if you examine the minister's figures you will see that the figure is shown as $10,780 million. This is a difference of $480 million.
I wonder what the Canadian taxpayer thinks of this. I think I know. He thinks the government is incapable of handling the business of the country. I agree with him. On the basis of performance the government should be condemned by this house. That is what the amendment and subamendment do. I suggest to the government that there is no easy or painless solution to the financial problem facing this nation. I note that a conference will be held with the provinces in December and that the finance ministers of Canada are meeting at this moment. If you read the newspapers you know what happened at the conference yesterday and what is happening today. Everybody wants the 2 per cent tax. Everybody wants the $440 million. They all want it. There is one thing I hope they will discuss at this conference, the question of the duplication of administrative agencies as between the provincial governments and the federal government, including crown corporations and the general proliferation of bureaucracy. What this country needs is less government in business and more business in government. That is what is needed. Unless this principle is established and carried out, I fear for the future of our country. The will of the people to be self-reliant is in jeopardy. The desire of our people to produce is meeting with discouragement.
At this point I think we should examine the minister's speech in the light of, to use the phrase of the Winnipeg Free Press, the grievous financial miscalculation and to see whether we can have any confidence in the projected figures. I ask, Mr. Speaker, that the speech of the governor of the Bank of Canada delivered at Victoria on October 17 be reexamined, because at the bottom of page 3 we find this sentence: "The exchange problem of last winter was above all a crisis in confidence". I ask this question which I bring to the attention of the house: If a lack of confidence can result in a run on the Canadian dollar, though it proved and demonstrated the strength of the dollar, then what might happen if a similar lack of confidence should
November 5, 1968	COMMONS
develop based on the government's record of fiscal mismanagement and miscalculation? It seems to me that a lack of confidence by the United States market or, for that matter, by any market, could have very serious effects on our whole economy.
The financial plight of the government, therefore, is a serious one. It will take courage and determination to put into effect the measures necessary to cope with it in a proper way. But an ancillary financial problem of the government of Canada is the budgetary position of the provinces. The tax structure committee, composed of the finance ministers of all the provinces and the federal minister of finance, met two years ago and concluded that the financial problems of the provinces over the next five years would be substantially greater than those of the federal government. It was considered that the federal government would be in a surplus position and the provinces would be in a deficit position. Now it seems to me that the difficulties are greatly increased when both levels are in a position of deficit. In this connection we need only read the morning paper and the report of the provincial finance ministers meeting to which I referred a moment ago.
In concluding the portion of my remarks relative to the financial plight of the government, let me take a look at what is said by experts and by papers which certainly do not favour the Conservative party and certainly are not enemies of the Liberal party. The Winnipeg Free Press calls the budget of the Minister of Finance dismal. The Financial Times of October 28, which is not unfriendly to the present administration, says that whether or not one feels the optimism about the next few years that came through in the forecast of Mr. Arthur Smith of the Economic Council, one must also agree with Professor E. P. Neufeld of the University of Toronto that the federal government's accounts are basically out of control.
[DOT] (4:20 p.m.)
Professor Neufeld claims that the trade-off point between inflation and unemployment in Canada is much higher than in the United States. He said it would take a 7 per cent unemployment rate to bring the rate of inflation down by 1 per cent. He said that because our governments are in such a tight financial box there is no way they can now cope with the problem. Any assessment of the outlook from now on should be made with this fact in mind.
DEBATES	2439
The Budget-Mr. Flemming
Professor Neufeld also had some realistic things to say about Canada's external standing. He noted that our rate of increase in prices and wages has been very much faster than that in the United States ever since 1958. Although he does not expect a balance of payments problem next year he said:
I would think that policy-making officials would ask themselves whether Canada can digest another period when its cost and price increases exceed those of the United States.
He then said: "Obviously Canada cannot".
The Financial Times of October 28 had this to say on the editorial page:
Last week's budget displayed the Trudeau government in the guise of a bewildered little man, up to his neck in debts, who devotes all his ingenuity to juggling the due dates of payment. The diagnosis of Canada's financial problem was incoherent and sometimes self-contradictory. The prognosis was so partial and incomplete as to be incredible.
This is a pretty serious editorial from a journal friendly to the administration. It then states:
The loss of credibility is a very serious matter, because credibility is inseparable from confidence. Without confidence, Mr. Benson can kiss goodbye to all his broad fronts and high priorities. And confidence in the government of Canada is weaker than it was a week ago.
Now, Mr. Speaker let me say a few words about regional disparity. The Atlantic provinces naturally are the area closest to my heart so far as this matter is concerned. It was my responsibility and great privilege to deal with and endeavour to improve during the years 1952 to 1960 the affairs of the province of New Brunswick. We struggled during the first portion of those years and gradually improved our position. During that time we made frequent trips to Ottawa in an attempt to bring our special situation to the attention of the then federal government. We pointed out our difficulties and our disabilities. We asked for special consideration in view of commitments dating back to confederation. We were always told that there must be uniformity of action and each province must be treated on the same basis. We were unable to accomplish anything of a special nature until after June 10, 1957 when a new federal government assumed office, and then what was impossible for the old became possible for the new. From then on it was different.


The Acting Speaker (Mr. Bechard):: Order, please. I hesitate to interrupt the hon. member but according to the rules his time has expired.


Some hon. Members:: Carry on.
2440	COMMONS
The Budget-Mr. Flemming


The Acting Speaker (Mr. Bechard):: Does the house give unanimous consent?


Some hon. Members:: Agreed.


Hugh John Flemming: Thank you, Mr. Speaker, and hon. members. I assure you I will only be a few minutes.
I said we could not accomplish anything with the old government and did not accomplish anything until we got a new government on June 10, 1957. From then on things were different. The government sponsored a bill to assist in obtaining cheaper power for our industries. On the financial side the Atlantic provinces adjustment grants came into existence.
At this point I wish to pay tribute to the prime minister of those days who was the best friend of the Atlantic provinces ever to occupy that position. I refer to the right hon. member for Prince Albert (Mr. Diefenbaker). He initiated the Atlantic provinces special adjustment grants which added $25 million per year to the revenue side of the four provincial budgets for the period 1958-62, a total of $100 million over four years. Then provision was made for an annual increase of $10 million and for $35 million annually for the next five years. A total of $175 million was approved. The division among the Atlantic provinces was on a 3-3-3-1 basis.
The second period was 1962-67. Then came the Atlantic Development Board, the legislation being finalized late in January, 1963. I do not know whether hon. members realize what special adjustment grants meant to the budgets of these small provinces, but I speak with great knowledge when I say that it was a tremendous shot in the arm.
The concept of the Atlantic Development Board was to assist in examination and research of hitherto undeveloped resources in the Atlantic provinces. No special amount of money was voted. The Liberal opposition of that day made a lot of fuss about that, but the reason was that the total resources of the country were to be available for development of any duly qualified underdeveloped resources. Subsequent to research and examination, and if approved by the board, application would be made to the government of Canada for assistance in developing the same. It is under this heading that the development of the tidal power of the Fundy tides should come.
Last evening a resolution was presented by my friend, the hon. member for Cumberland-Colchester North (Mr. Coates), asking for
[The Acting Speaker (Mr. Bechard).]
DEBATES	November 5, 1968
government consideration of this tremendous project under which it is proposed to harness the Fundy tides, the greatest in the world, which ebb and flow twice every 24 hours and have a great potential through the use of reversible turbines. This is the type of thing the Atlantic Development Board was to investigate.
We also have low grade manganese in my area around Woodstock. We also have the tin of Charlotte county, the only known deposit of tin in Canada, but apparently not rich enough to justify development without some help. That is what the Atlantic Development Board was in my opinion set up to do.
In the initial stages both these developments might need government assistance. That type of thing was the concept of the Atlantic Development Board. It was likewise the concept that the board would operate in conjunction with provincial governments and private industry. This is the type of cooperative action which has brought about the establishment of the largest food processing plant in Canada, McCain Foods, located at Florenceville in the county of Carleton. We all take pride in their accomplishments and activities which are now world wide. This has taken place although it was not supposed to take place on account of its location. This is the result of the principals being private industry which could see a vision for the future.
We have heard a report that the board may be advisory only in the future. I hope this is inaccurate, but should it be deemed to be advisable by the government I for one would be glad and prepared to co-operate with the minister of regional development in whatever he may consider to be necessary to stimulate the economy of the Atlantic region or any other region, for that matter. I have read the minister's speech delivered to the Atlantic Provinces Economic Council at Halifax on November 29. It is my suggestion that he did not emphasize private industry enough in that speech. The Atlantic Provinces Economic Council never had any public funds to any extent. This is a private industry or enterprise instrument which could be used to ensure good value for every dollar. The foundation for development is in the hands of private business and all they need is encouragement from the government.
At this point I want to express my appreciation to the Minister of Forestry and Rural Development (Mr. Marchand). I am sure the Minister of Fisheries (Mr. Davis) will
November 5, 1968
keep this same matter in mind. I refer to saving the forests of New Brunswick by participating in a spraying program next year. I should like to thank that minister in advance for his utmost consideration because this means a lot to New Brunswick and a great deal to the revenues of the federal government.
Perhaps I may take two or three minutes more. On May 18, 1967, I spoke during the debate on the throne speech. My remarks are recorded at pages 351 to 356 of Hansard. I especially drew the attention of the house and the then minister of energy, mines and resources and the then secretary of state for external affairs to the serious question of pollution in the upper St. John river and its tributaries which rise in the state of Maine. I urged these ministers to obtain information relative to the matter and to take action with provincial authorities and the governments of Maine and the United States.
A very serious situation developed this summer on a tributary of the St. John river, the Big Presque Isle river which rises in the state of Maine, flows through the communities of Easton, Mars Hill, and Bridgewater in Maine, then through the village of Centre-yille, New Brunswick, and Anally empties into the St. John river below Florenceville. There is a starch factory located at Easton, Maine, which dumps its waste into this river. This summer, with low water, the pollution became so bad that fish could not live in it and the river became filled with dead fish to such an extent that people living along the river could not stand the offensive odour and were obliged to close their windows. The citizens of the village of Centreville could only live inside their houses with every door and window closed.
[DOT] (4:30 p.m.)
A committee was formed to deal, on behalf of the community, with all levels of government in an attempt to have the situation corrected, but they received so little satisfaction that they decided to dam the river at the state of Maine boundary and let the water back up across the boundary into the state of Maine. This action had a very quick and beneficial effect. Very soon they received notice that the industry causing the pollution was taking care of it in some way, and within a few days they voluntarily removed the dam they had built. My point is that law-abiding citizens should not be obliged to take the law
The Budget-Mr. R. N. Thompson into their own hands, as the citizens of this area were obliged to do.
I ask the ministers within sound of my voice this afternoon to give this message to the appropriate ministers so that this matter will be investigated and something done to correct it. I will not elaborate on the situation. We know that the problem concerns the state of Maine. The Saint John river is an international river and there are small rivers flowing into it. I realize that all these things are difficult, but I know the Minister of Fisheries will undertake to carry the message to his colleagues and I hope that remedial measures will be put into effect.
In concluding these remarks I wish to say that productivity is becoming more and more difficult. I have some experience in this regard. In the speech of the Minister of Finance and in any discussions I have heard on this budget, I have never heard the fact referred to that literally thousands of Canadians are making no contribution to the productivity of this country. Why are they not making any contribution? In many cases it is because the Canadian government, and often provincial governments, are making social assistance possible to such an extent that even third and fourth generations are now being affected. The result is a deterioration of productivity and a lessening of the ability of people to produce.
I say to the Prime Minister, the Minister of Finance and every member of the government who is new to his office that the people who elected them expect them to deal with this depressing and potentially disruptive situation. I think the Canadian people expect this government to replace handouts with productive jobs and to put back into Canadian life pride, independence and a desire to work and accomplish what their forefathers did, who had these qualities and worked together to make this country great.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, in rising to speak in the budget debate I do so with a great deal of regret and a certain degree of despair because of the lack of appropriate action based on the statements made by the former minister of finance and the present Minister of Finance (Mr. Benson) prior to the election campaign, during the debate on the original budget and the mini-budget last year and during the election campaign itself. We constantly heard remarks then that led us to think this government really intended to return the country to a policy of fiscal responsibility.

2442	COMMONS
The Budget-Mr. R. N. Thompson
Unfortunately the budget introduced in this house on October 22 is stark evidence that Liberal governments since 1963 have insisted and continue to insist on adopting fiscal policies that can only be described as irresponsible. The credibility gap in government fiscal programming is very wide indeed and continues to widen. These are not idle words, they are not at variance with the facts, nor do they differ from comments I have made in this house in regard to the policies of Liberal governments since 1963.
The tragedy of it all is that the government does not learn from its errors. In fact, it seems determined to perpetuate them even in defiance of what its own members must know is a wrong financial policy. It is little wonder that Hon. Robert Winters, former minister of trade and commerce, said last January when announcing his candidature for the Liberal leadership that the Liberal party, the Liberal government, must return to fiscal responsibility.


Some hon. Members:: Hear, hear.


Robert Norman Thompson: I would have thought the present Minister of Finance might have learned from the errors of his predecessors and from the advice of such men as the hon. Robert Winters, but apparently he has not. Government expenditure has increased to $10,780 million, bringing with it a deficit of $675 million. On December 7 last the Minister of Finance said, as recorded on page 5180 of Hansard, that government expenditures would be held to $10.3 billion. He said the same thing the next day. On February 13 this year the Minister of Finance said, as found on page 6663 of Hansard:
Mr. Speaker, I should like to guarantee to the house that after the supplementary estimates are introduced during the year. . . we will hit our $10.3 billion ceiling and will balance the budget this year.
He was speaking then as minister of national revenue. What has happened in the intervening months? Is it any wonder that the Canadian people see the credibility gap growing wider and wider? Is it any wonder that financial and economic authorities in this country almost unanimously say that this budget is a tragedy for the nation?
The Secretary of State for External Affairs (Mr. Sharp), who used to be minister of finance, said the same thing. In fact, I believe the Minister of Finance was merely repeating statements that the then minister of finance had made. The then minister of finance said

DEBATES	November 5, 1968
on November 10 last year, as recorded on page 4124 of Hansard, that budgetary expenditures in 1968-69 would be held to $10.3 billion. He said the same thing later that month on November 30, as found on page 4900 of Hansard. He also said the same thing on a number of other occasions. It is little wonder that a well known journalist, Peter Newman, who is usually rather lenient in his criticism of the government, said on budget night that not since world war II have the national accounts been in such a mess. I say to hon. members opposite and to the new members of parliament, because I am sure they share this concern, that this is just not idle talk from the opposition; these are facts.
Where do we go so far as the finances of our country are concerned? Let us look at what has happened during the last year. The deficit is now estimated at $675 million, but the government informed us last February that it had cut back the planned expenditures for the current year by $800 million. In addition, new taxes imposed in this budget are going to raise the tax load on the taxpayers of this country by $440 million. Then, the increase in postal charges will cost the Canadian people another $100 million. We must consider this because it is really a new levy as well. When these figures are added together we find that there has been an increase in expenditures of more than $2 billion. To be exact, it is $2,015 million. This is the increase in government expenditures since 1966-67. The situation can only be described as fantastic, sheer fiscal irresponsibility.
[DOT] (4:40 p.m.)
The present Minister of Finance has said that he will balance the budget next year. I cannot believe it, and I do not think anybody else can believe it. Where has the credibility of this government gone? It has been said that a good economy, in one respect, resembles a sponge. A sponge can soak up a lot of mess but when the sponge becomes saturated then the sponge itself becomes a mess. This is exactly the point this government has reached. This is why I am concerned. I am concerned about the well-being of our country. If the sponge is going to become useful again, I believe the only way will be for the mess the sponge has taken unto itself to be wrung out, and the government is unable to do this.
One of the unexpected increases in government expenditures, we were told by the Minister of Finance, was the increase in the
November 5, 1968	COMMONS
cost of servicing the national debt. This has gone up some $67 million more than had been expected. Why? Obviously it results from the previous government's policy of insisting on lifting the ceiling on interest rates. I can recall listening to the former minister of finance in the committee on finance and economic affairs when he said that lifting the ceiling on interest rates would not substantially increase the cost of money but would instead make more money available. Not only has the cost of servicing the national debt increased by $67 million more than had been expected, but the total cost of servicing the national debt has risen to $1.47 billion.
By the way, it is interesting to note that the national debt itself has reached the astronomical figure of $32,926,300,000. Now, the cost of servicing that debt this year, being $1.47 billion, represents an increase in interest this year of $370 million. How much farther can this kind of policy go without bankrupting the nation? In fact, the interest cost on the national debt takes 14 cents out of every tax dollar we pay. This is one-seventh of the entire 1968 budget. Is this good housekeeping? Is this responsible fiscal policy? How long can it continue?
So, Mr. Speaker, I can only say that I am concerned about where the government's financial policy is taking us. I am also concerned about the smugness and arrogance which the government shows to the public with regard to these policies. I can only go back again to what the Minister of Finance said a short time ago when he boasted that the government had cut expenditures by some $800 million. In fact, it was the present Minister of Finance who said on December 7, as reported in Hansard, page 5180:
-that the estimates which were brought in amounted to $11.5 billion and we are going to keep them to $10.3 billion.
Is it any wonder that the credibility of the Minister of Finance is being questioned? During his budget speech the minister said that this was a budget to ensure a sound economic and financial base from which to move forward through a new period of balanced expansion and social progress. Can we accept such a statement in view of his record? We cannot, and so the credibility of these statements is in question. In addition, the reliability and capability of the government to supply a sound financial administration are also in question. The ultimate result of all this is a crippling tax burden which becomes more than the taxpayer can bear.
DEBATES	2443
The Budget-Mr. R. N. Thompson
We are the most overgoverned people in the world. When the cost of municipal government, provincial government and federal government is added up the astounding total is that nearly 47 cents out of every dollar Canadians earn, regardless of how they earn it, is being taken back by government to meet the cost of government. Historically and economically we know we are fast reaching the breaking point. We placate our consciences by comparing our federal budget with the tax load imposed by countries such as Sweden and Great Britain, but we fail to mention the fact that we have three levels of government whereas they have two. We do not add up the total tax load as it must be added, because in the end there is only one taxpayer. It is the taxpayer who gets the rap in this budget.
My honourable colleague who spoke just before me mentioned the social development tax of 2 per cent. This is one of the most vicious taxes that has ever been imposed on the Canadian taxpayer because it hits the small wage earner who cannot afford it and, as the Prime Minister (Mr. Trudeau) has said, it relieves the tax load on the rich. Not having been in that fortunate or unfortunate position, perhaps I do not understand. Perhaps the Prime Minister does. It is not only the members of the opposition who are protesting. I was most interested the other day to pick up a comment by the treasurer of Saskatchewan, Mr. Stewart, who happens to belong to the same party as the Minister of Finance. According to this article he said:
[DOT]-the 2 per cent social development tax in the budget could bring about a totally different relationship between federal and provincial governments and "could work a real hardship on the provinces."
He said the tax will not be shared with the provinces and will merely aggravate a growing inequity between the provinces' constitutional responsibilities and their revenue resources.
"The federal tax structure committee two years ago pointed out this condition to Ottawa," Mr. Stewart said. "Had the federal government shown more fiscal responsibility then, and resisted the temptation to introduce new programs, funds would have been available to alleviate this imbalance."
I wonder what the same Mr. Stewart is saying today in the conference of finance ministers about some of the other policies of the government such as the opting out of shared programs as announced by the Prime Minister only yesterday? I am sure that his feeling on the matter is shared by every other provincial treasurer, just as it is by every thoughtful member of this house if he considers the tax loan imposed in this country.
2444	COMMONS
The Budget-Mr. R. N. Thompson
There is another interesting fact which relates to the government bonds being offered at the present time. The government has boasted a great deal about the current issue of government bonds. We hear advertising on the news media and read advertisements in the newspapers every day about what a profitable investment these government bonds are. They yield an average interest of 6| per cent for a period of 14 years. It is staggering if you understand just what this means. It means that those who buy this new series of Canada savings bonds will receive two and a half times their original investment in 14 years. The government's goal is $1 billion for the sale of these savings bonds. The advertisements point out they are a good investment. I am concerned about the taxpayer who is the one who is going to have to pay the interest on these bonds. A $1,000 bond will bring an investor $2,500 in 14 years. The federal government never pays its debts. What it does is to borrow more money to pay off existing debts, thus incurring new debts at higher rates of interest.
[DOT] (4:50 p.m.)
The reason the government is selling $1 billion worth of Canada savings bonds at this time is simply that it must pay off previous issues which are now falling due. In 14 years' time the investor who has turned his $1,000 investment into $2,500 will cost the taxpayers of this country $1,500. If he reinvests that money, do you know what will happen to our young people who are just starting to work today? In 28 years they will have to pay $6,250 for the original $1,000 investment. That is the tragedy of this kind of financial policy. How long can it continue? We do not know, but we are concerned about it, and this is why it is necessary to speak in this vein.
We are all very much aware that in Ottawa today a conference is being held of federal-provincial finance ministers. I have stated that the impact of this budget on the individual taxpayer will be very serious indeed. However, what I am even more fearful about is the relationship between the federal and provincial governments. I believe that this budget will bring about open warfare between the provincial governments and the federal government. This can lead us nowhere except into a tax jungle from which it will be very difficult to find our way out. Not only is this going to happen but the whole process of confederation will be weakened as a result of the bitterness that will be
[Mr. Thompson (Red Deer).!
DEBATES	November 5, 1968
generated between these two levels of government in this country.
Yesterday the federal government blandly announced that it will get out of shared cost programs five years from now. But it is the federal government that fashioned these programs. Take, for example, medicare. Not only did the federal government design the medicare program, which today is being held out by the federal government on a take it or leave it basis, but it did so in the face of opposition from practically every provincial government except Saskatchewan, and it is quite understandable why the province of Saskatchewan was in no position to oppose it.
Most of the shared cost programs have been the product of federal government policy. Most of them have been forced upon the provinces in the same way that medicare is being forced on the provinces today. The province of Alberta has a reasonably satisfactory health program and so has the province of Ontario. They are not perfect but they are improving each year as the provinces gain experience with their plans. These programs are aimed at helping those who are unable to help themselves. Both programs have as their objective helping those who need help, which after all is the responsibility of government. But this objective should not be carried to the extent that programs and policies are imposed upon people who are not in need of them and who in most cases do not want them. Provincial governments which have not yet participated in medicare are being forced, politics being what they are, to participate. The federal government now states that it is going to opt out of these programs in five years. Not only is the medicare program involved but other shared cost programs as well.
What disturbs me about the whole federal-provincial relationship, this so-called co-operative federalism that we have heard so much about during the last five years, is that the federal government, behind closed doors, works out a policy about which it does not even inform its own backbenchers. That policy is proposed to successive provincial conferences, again behind closed doors, and then the federal government, because of the very nature and method of its approach, forces the provincial governments to go along with that policy, in many cases even before the representatives of the provincial governments can return home and consult their own legislative assemblies. Now this founder of the "just society" has stated the government will opt out of such programs in five years.
November 5, 1968	COMMONS
Yesterday the Prime Minister (Mr. Trudeau) said that his announcement was but a clear statement of what was previous government policy in 1966. It might have been previous stated policy in 1966, but the provinces did not agree with that policy. The provinces expressed very strong objection to the policies that the federal government was enacting. Their concern about the situation is simply this: Where are they going to get the required money?
According to the budget the medicare program is estimated to cost in the coming year $335 million. What consideration has been given to the provinces which are supposed to collect a like amount of $335 million? And medicare costs are just beginning. It seems to me that here again is sheer irresponsibility in the matter of federal policy. This kind of policy will make it increasingly difficult for provincial governments to carry out their legitimate responsibilities-after all, there is only one taxpayer-and besides it will weaken the whole process of federalism in this country.
And so, Mr. Speaker, I am concerned, as I think we all are. If many of the backbenchers across the way were able to express their opinions I think they would say so too. This budget strikes at something that is of great importance to the whole process of government, to our whole taxation structure, in fact, to the whole financial situation facing the country.
We realize that government must increase in size because governments have increasing responsibility in the affairs of our nation and our people. But we cannot allow government to increase to the extent that it destroys individual rights. We cannot allow it to increase so that it destroys the whole base of taxation and financial policy as it relates to the provinces. We cannot let it increase in size to the extent that the tax load becomes too heavy for the taxpayer to bear. We must hold back government spending. We must call a halt to present inflationary policies-and I mean call a halt, Mr. Speaker, not just talk about it and then turn round and do the opposite-in order to allow the economy to grow so that it will be able to bear the increased load that is being placed upon it.
At the same time that we call a halt to present policies we must be searching for new policies which will permit of fiscal results different from the present ones. Today we are actually taking away the very incentive that is required in our business community,
DEBATES	2445
The Budget-Mr. R. N. Thompson in the private sector of the economy. We need to give greater encouragement to individual Canadians engaged in business and in industry in order to help them establish and grow, to help them provide employment and increase productivity, instead of penalizing them for doing this. This is the only way we will have a healthy, Canadian-owned business economy.
Unfortunately, Mr. Speaker, we do not encourage individual enterprise, we penalize it. Not only do we do this but we destroy the confidence of our own people to invest their savings in the economy. The savings of the Canadian people during the past year have been estimated to amount to approximately $1,300 million. In fact, the amount of savings in the chartered banks and in the savings banks in Canada is over $10 billion. However, from this amount of $1,300 million $600 million will be transferred abroad for the purchase of securities on the U.S. market, mainly on the New York and Chicago stock exchanges. All too often these investments are in questionable stocks. Do Canadians realize this, Mr. Speaker? I do not think they do.
[DOT] (5:00 p.m.)
We desperately need capital so that our economy can grow. For five years we have talked about setting up a Canadian development corporation; yet we continue to ship out increasingly large amounts of Canadian savings. If such large amounts are available to be exported from this country why have the Laura Secord candy company, MacIntyre mines, various petroleum companies and the potash industry of Saskatchewan been taken over by United States capital during the last year or two? For about $400 million Canadians sold $15 billion worth of potash reserves because it was said we did not have capital. Yet we ship out of the country far more capital than would be necessary to hold these companies under Canadian ownership.
Someone has suggested that our tax dollars should be used to subsidize new development in industries which are usually foreign owned. I doubt that this is a sound policy. Certainly the government ought to do everything it can to restore the confidence of Canadians in their own economy so that they may invest their own savings in Canadian resources development and industry.
It has been said that there is not enough Canadian money to finance Canadian development. That is not true. Canadians are conservative investors; we are a nation of bond buyers and insurance investors. Yet Canadians do not put their money where I submit they
November 5, 1968

The Budget-Mr. R. N. Thompson ought to put it. I am convinced that the reason is that Canadian investors who put out their life savings have insufficient confidence that they are making a sound and reasonable investment. As a result they invest across the border to the south.
Repeatedly it is said that our industries are being taken over by United States capital, while at the same time our savings go to the United States. Let us be frank and recognize that the United States has done something that we ourselves refuse to do. Let us understand too that we cannot criticize others unless we put our own house in order. Until then we ought to go easy about condemning the other fellow.
Let me illustrate my point. The other day I talked with a senior executive of a major company. He needed the services of a middle class executive but could not find anyone in Canada experienced for the particular job. An application came in from the United States from a man who earned $30,000. He was qualified for the job and wanted to come here. He did not ask for an increase in salary; he merely wanted in his new job the same amount of take-home pay he had before. The executive told me that in order to give the man from the United States the take-home pay he had enjoyed it would be necessary to pay him $57,000 a year here.
It is said by some across the way that our taxing policies are reasonable and responsible. I fail to understand that assertion. We are suffering from a credibility gap. The present Minister of Finance and the former minister have both told us that by using our available computer systems and our technical knowledge it is possible to project the growth needs of our economy as well as the tax patterns of this country for five years ahead, to 1971 or 1972. Well, Mr. Speaker, something went wrong with the computer system because the Minister of Finance has been grossly inconsistent.
I suggest that this country needs a new breed of pioneer entrepreneurs, new managerial developers, who will create confidence and provide the know-how to develop our industries through Canadian investment. We lack vision. We are certainly in a grave financial crisis and I am deeply concerned about it. There seems to be no alternative to our presently developing financial pattern.


Mr. Depuiy Speaker:: Order, please. I am sorry to interrupt the hon. member but his time has expired.


Some hon. Members:: Continue.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Marcel Roy (Laval):: Mr. Speaker, I wonder whether the popularity of the Rallie-ment Creditiste and its financial theory are not on the wane, for I notice that none of the colleagues of the member are now in the house.


Robert Norman Thompson: May I inform the new member of the house who has just spoken that if he were to go to Hansard for the last six years and read the speeches I have made during budget debates he would find that what I said previously is absolutely consistent with everything I have said today.
I have just realized that I did not hear the first part of the hon. member's remarks and thus did not understand his intent. I apologize to the hon. member.
May I say before I sit down that in the last few days I have realized that one group in our population will suffer extreme hardship as the result of the government's taxing policies. If the government's taxing policies had been directed to relieving areas of genuine need in the economy I think we might have had a different budget. I am now speaking of those who are more than 70 years old. Over one million Canadians are in this age group. About 400,000 of these people do not pay any taxes. In other words their income is so low that they depend on the old age pension and the supplementary allowance. About 600,000 of this age group earn between $2,500 and $3,000 a year. If the government were to adjust its tax exemptions to enable these citizens to earn $3,000 a year without tax the cost would be very little. In this way the living standards of senior citizens who can no longer do productive work would be raised- and a genuine need would be met. The 2 per cent tax will hit these 600,000 people and take away some of the little they already have.
[DOT] (5:10 p.m.)
Time does not permit me to go on and give other illustrations. Not only do we need policies which will encourage incentive, the use of our own dollars and the development of our own resources along the broadest lines, not only do we need financial policies which will hold the expenditures of government steady until our productivity increases to the
November 5, 1968

extent necessary to carry the extra load, but we must also devise ways by which to ease the increasing pressures of government so far as the tax resource dollar is concerned. We cannot afford to aggravate further the situation which is developing between the federal government and the provincial governments. The outcome of the tax conference now being held, the outcome of the policies announced in the budget and since, will simply be that contention and dissatisfaction between the two major levels of government will increase, and this at a time when we have probably made some gains in the direction of greater understanding of the need for constitutional reform.
We must also adjust the tax load so as to relieve some of the pressure points which exist for certain segments of our people such as the senior age groups. Again, the credibility gap grows. Present financial policies are inadequate. The responsible policies which we expect are not there. The picture is not hopeful and I can only trust the government will wake up before it is too late.
tTranslation]


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, too often we are inclined to forget that in spite of everything, the Canadian economy is one of the most dynamic in the world. Our living standard is quite high compared to what other people enjoy throughout the world. We owe this standard of living, on the one hand, to the initiative and work of the Canadian people and, on the other hand, to the management of the federal government and to the economic measures it has taken in the last six years or so.
I believe that even now we have all the elements necessary to continued vigorous and sound economic progress. Following the financial statement of the hon. Minister of Finance (Mr. Benson), we see that the new Liberal government is taking the means, at times with the required firmness, to promote actively the stability and growth of our economy, by planning the overall and full development, for the short and the long term, of our natural and industrial resources, and especially our human resources.
Economic, financial and fiscal problems are becoming more and more complex; now, no one would dream that so complex an economy could progress and improve without encountering difficult problems. There is no easy solution to complex problems. Faithful to its program, faithful also to the principles
The Budget-Mr. Guy LeBlanc stated in the speech from the throne at the beginning of this session, the present government wishes sincerely and strongly to study and solve those problems and to use its authority, its power and the knowledge of its members so that our fellow-citizens can enjoy true and increased freedom which will enable them to demonstrate efficiently their initiative while trying to achieve sound economic objectives.


Some hon. Members:: Hear, hear.


Louis Guy LeBlanc: Yes, Mr. Speaker, the Canadian society is dynamic and prosperous.
However, social disparities do exist but through the Minister of Forestry and Rural Development (Mr. Marchand) who will soon become, if I am not mistaken, the Minister of Regional Development, the government has taken serious steps, in co-operation with the provinces, to eliminate such disparities. Within five years or less, we will certainly be in a position to note the results of certain programs, for example the five-year plan which was the object of the co-operative agreement to carry out the development program in the lower St. Lawrence area, the Gaspe peninsula and the lies-de-la-Madeleine signed in Rimouski on May 26, 1968 by the Minister of Forestry and Rural Development at that time (Mr. Sauve) and Quebec Premier (Mr. Johnson).
By the way, allow me to point out that we hope that the officials of the various federal departments will get used to that program or will continue getting acquainted with it, in order to facilitate the interdepartmental cooperation one one hand and, on the other, the federal-provincial co-operation in the best interests of our fellow-citizens living in that pilot area.
The Canadian society is concerned about the fate of the underprivileged, the oppressed, the sick, the disabled and the poor all over the world. All honourable members, to whatever political party they belong, are deeply concerned about the welfare of the Canadian people and our brothers in the world.
I have in mind now legislation such as the Canada pension plan, the Canada assistance plan, the supplement to the old age security pension, the youth allowances, the loans to students of which, unfortunately, the Quebec students could not take advantage.
[DOT] (5:20 p.m.)
I am also thinking of the increasingly substantial assistance given to universities,
2448	COMMONS
The Budget-Mr. Guy LeBlanc regional development-to which I referred a few moments ago-manpower mobility and retraining, incentives to industry and, in spite of the criticisms of the member who just spoke before me, I shall mention medical care, as well as numerous beneficial legislation we have adopted here.
Let us not forget either, since they are evidence and symbols of the progressive development of our country, legislation which has given us our national flag, the commemoration of the centennial of confederation, Montreal Expo and the acknowledgment of the rights and privileges of the groups which have built Canada and are still living together on Canadian soil.
All the achievements of the past years have been carried out by a Liberal government headed by a prime minister who is no longer in this house, by a prime minister who was our pride both outside and inside the country.


Some hon. Members:: Hear, hear.


Louis Guy LeBlanc: Mr. Speaker, we now extend our confidence to our new Prime Minister (Mr. Trudeau) who has shown to date, whatever some may say, great mastery, a brilliant intelligence and a remarkable efficiency.
With respect to budget stability, I believe he is adhering to the program that had been brought before the people of Canada.
We were told hardly a few months ago that Canada apparently was in the midst of an economic upsurge and that therefore the government was considering a balanced budget by cutting down somewhat public expenditures.
As we can see in the budget speech, the present economic situation, the intermediate and short term outlook, the present financial situation, the taxation outlook for 1969-70, the control of public expenses, discussions with the provinces-as are taking place at present-the pattern of political economy, the battle against inflation, the present taxation policy, taxation recommendations, estate tax and gift tax, the case of life insurance companies, financial institution reserves and all other measures are facets of our financial problem which were faced squarely, with full knowledge of the facts and, in the light of the contemplated goal, financial and budgetary stability in this country.
We think it is a responsible and honest financial statement, outlining all the aspects of the problem.
[Mr. LeBlanc (Rimouski) .1
DEBATES	November 5, 1968
In the present state of our financial obligations and in view of the financial and economic development not only in Canada, but as we see it, throughout the world, an honest, just and sincere Minister of Finance must show great courage. Such courage is shown I think at present by the Minister of Finance (Mr. Benson). In order to prevent any further inflation, the minister had to plan a very substantial increase in revenue for the next fiscal year.
However, the first elements of a fiscal reform are given in that statement. In spite of it all, it does seem that the taxation system is more equitable. The reforms will affect mainly the corporate tax, the income tax and their allotment between the federal and provincial governments.
A stable budget should enable us to strengthen and develop our economy. However, under the item: expenditures, it should not be forgotten that the federal government is not solely responsible; if we want Canada to progress toward an ever more vigorous economy, the provincial and municipal governments must also assume their share of responsibilities. Together, we must strive to decrease the tax rates and expand the tax basis, that is the wealth of Canada.
We are told that the time has come to be frank. There is no magic formula to guarantee our evolution, to achieve our ideal of justice in Canada; we cannot expect the path to be strewn with flowers. We must choose the way of realistic, functional and efficient solutions and so, that way will surely lead us to a well-organized environment for the greater good of those of our citizens who will inhabit it.


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, for me this is a frightening budget. It is frightening because the people who prepared it seem to have lost their ability to see reality. From this budget it appears as though they see only a part of the Canadian people, the affluent part, the part that is best able to struggle for itself. It appears that they have closed their eyes, minds and hearts to the existence of the others.
Fortunately, while a Liberal government might have wanted to do such a thing during the last few years it was impossible for it to do so because it had a very narrow majority. Now members of the government do not have to care. They have a big majority, and this budget shows that so far as the masses of the
November 5, 1968

ordinary people of this country are concerned they just do not care.
References have been made to the modern technology with which we live. I have a feeling that we are up in a great DC-9 or DC-8 airplane and that somehow the pilot's instruments are not working and he has lost contact with the ground. We are headed for no place in particular except in the general direction of the great peaks of the Rocky mountains, and this in rough weather. The pilot is nonchalantly saying to us that our destiny is the just society, but all of us have the very uncomfortable feeling that we are heading for the big peaks and that it is only a short ride to Kingdom Come.
This may be unduly pessimistic. In spite of the way the government has constructed this budget I would hope there are members in all sections of this house who have the right feeling for the large masses, the large majority of the Canadian people who are out there and who are waiting. They are still hoping for something from this government, but for the large majority of the Canadian people in the lower income groups there is nothing in this budget.
I feel sure that there are members in the government ranks who know history, who know that you just cannot get away with legislating for only a section of the people. Daily I pass the west door in the central arch of the parliament buildings and see the words carved in stone, "Where there is no vision the people perish." I believe this to be profoundly true. And I believe this is a budget without vision, that does not look into the future.
Failure to reckon with the well-being of all the Canadian people is simply going to bring trouble for this country before very long. In my opinion the blindness in this budget, the lack of vision, is compounded by the announcements we have heard during the last couple of days. People in this country who have watched the long, slow struggle to try to get Canadian standards of well-being for the whole population from coast to coast must feel pretty disturbed and disconsolate at what they have heard. It has taken us 50 years to get into medicare. Now we hear that within the next five years the whole federal structure of medicare will be broken. It has taken many, many years to bring the tissue of social security legislation to the point where we have it now, a point that is still not too favourable compared with some enlightened countries, in particular some of the European countries. Now we are told that this government intends to get out of a number of these
The Budget-Mrs. Grace Maclnnis shared programs. The only analogy I can think of is the very pious handwashing of Pontius Pilate on the occasion when he indicated he was having no more to do with a certain matter, that it was not his business anyway and that other people should carry on and do as they saw fit.
[DOT] (5:30 p.m.)
In my view it is a very strange thing to see this Prime Minister doing what he is doing at the present time. I believe he has been doing an excellent thing in trying to get linguistic and cultural equality for Canadians of the two large language groups in this country. I gave him full credit for this when I spoke in the house not long ago. I believe very profoundly that no matter what may be best for the people of Canada in the various parts of this country the Prime Minister is on the right track when he is working toward equality of opportunity and a feeling of being comfortable in one's language and one's culture in any part of the country.
But I must say that I find it very strange to see him then strike out blindly at those pieces of legislation which have gone some way toward giving Canadians equality in respect of their well-being regardless of which part of the country they live in. This is what he is destroying bit by bit. Even if the provinces were evenly matched in their ability to provide standards of social security for their people, there would not be that over-all Canada-wide standard which should enable our people, with the mobility we have, to move about with a feeling of being at home in a social security way in every part of the country. But our provinces are not equal. What this government is doing is saying to them that they must get out and sink or swim with their own taxes. It is saying that they will be given some handouts, of course, but the bulk of their taxes that are necessary for their social security programs they must raise themselves. I suggest that this is not the mark of a statesman. I regret to see one who stands first in one field so lacking in another.


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, would the hon. member permit me a question?


Winona Grace MacInnis: need all the time I am allowed, I think, Mr. Speaker, but when I have finished, I shall be happy to answer the hon. member's question.
November 5, 1968

The Budget-Mrs. Grace Maclnnis [English]
The people put this government in power because they were in trouble and needed desperately to believe in Santa Claus. This is a streamlined version in modern dress of Santa Claus with Superman under the hood. The problems which exist for the people across this country, problems of unemployment, training, rising prices, housing, social security and so on, all boil down to one burning problem: how to get enough income to live on in the world of 1968. Please do not think that the majority of the Canadian people are waiting for government handouts to achieve the desired end. One speaker said exactly what I believe. I believe the majority of the Canadian people want productive work. They do not want handouts. A great many of the people who are receiving handouts now would never have been put in that position if governments in the past had been able to provide them with productive work. These people should be taken off handouts at the earliest possible moment and given productive work.
I am not talking about the few extremely poor people who are located in unfortunate pockets of poverty across Canada. No; I am talking in the language of the Economic Council of Canada which, in its review of September, 1968, said:
The statement that at least one Canadian in every five suffers from poverty does not appear to be a wild exaggeration. It is almost certainly close enough to the truth to be taken as one of the most serious challenges facing economic and social policy over the next few years.
Four million people, Mr. Speaker, is a lot of Canadians-four million people suffering from poverty. These are not just those whom we consider as the destitute and no-good. This budget, in my opinion, is a continuation of the policy which this government began from its inception. It is the same policy that cancelled the winter works program; there is a production stoppage right there. It is the policy by which we will not have any increase in family allowances, the policy that there will be no increase in the basic old age security pension, the policy that there will be no legislation this year to increase the allowances of veterans and their dependants, the policy that keeps the poor hardpressed superannuates of the public service hanging on desperately in the hope that those of them who built up their pensions in the years when a dollar was worth a dollar will now be able to get enough to live on in these days of inflation. It is the same policy all along the line.
[Mrs. Maclnnis (Vancouver-Kingsway) .1
It is true that there is a segment of the Canadian people living in affluence. These people might like the budget but their satisfaction will be very restricted because their time for enjoyment cannot be long with this sort of thing. I believe it was Abraham Lincoln who said that a nation cannot long survive if half its people are slaves and half are free. Neither can a nation live long if half its people live in affluence and half in poverty.
I feel that this budget fails the majority of Canadians on two counts. First, it places the new tax burdens unfairly on the shoulders of moderate and low income citizens and allows the wealthy to get away with a relatively much lighter load. I need not go into the ways in which this has been done. We have heard these outlined since this debate began. Second, it outlines no new policies for stepping up production and the jobs and wages that go with production nor does it propose any way of providing more income for pensioners and others who have no means of earning for themselves.
What do I think should have been in the budget? I think one is bound to give one's own ideas if one is to criticize this budget. In the time that one has one can give only a very brief outline and cannot make an indepth study. First, I believe there should have been definite plans for economic growth and development. It is all very well, as some members have done this afternoon, to get up and talk about how marvelous Canada's productive capacity is and how great our attainments in production and so on are. I would go back to the figures quoted by my colleague from Waterloo the other day when he pointed out that of the 14 western nations in O.E.C.D., Canada's production output per man is the lowest of all. I do not think that is a record of which we should be proud. Furthermore, it frightens me, because if we cannot get better production than this we will not be able to keep these social security programs whether they are under federal, provincial or any other auspices.
I am not one of those people who think that all the social welfare schemes are satisfactory. But I believe that at the present time the taxpayers are squeezed dry because there are not enough taxpayers with enough income to pay properly and the little fellows are being squeezed out of proportion to those on higher incomes. I believe what we need badly are productive jobs.
You may ask, how are we going to do this? My memory goes back to world war II. I
November 5, 1968

have heard many objections to war, but never have I heard it said that one should not be engaged in war because it is too expensive. When world war II came the decision was made in this country that the war had to be won. The government of the day-it was a Liberal government at that time too-took the decision that we must win the war and that we must have the necessary massive production to make total war. That government realized private business would never be able to do the job alone. Private business has never been able to produce enough to go around in this country. The government then took a hand and set up crown corporations and enterprises under public direction and got the war effort going. That was necessary in order to do our full part during world was II.
[DOT] (5:40 p.m.)
Let me suggest that if this government is serious about winning the war on poverty at the present time and equally serious about helping those people who are trying to win their particular wars against insecurity, the government should give them the jobs and incomes necessary to succeed. I hope the government will make that kind of decision. I know this is amusing to the cabinet ministers over there. Perhaps I should put that in the singular as they are not in the plural, at the moment. Perhaps it is singularly amusing to him that I should suggest a war effort now. But we need a war effort in peacetime if we are going to obtain the kind of production we must have to support a proper tax base and those services required by the people of this country.
No one suggests that we should get rid of so-called free enterprise. It is not free and it is not enterprising enough. Free enterprise alone cannot provide plenty. So far it has been only able to produce scarcity. The government should adopt programs to extend production.
Second, the income tax exemption should have been increased by this budget so as to give the low income groups an opportunity to pay their own way and avoid falling into the pit of poverty. It has been suggested by this party before that the income tax exemption should be raised to $2,000 for single people and $4,000 for a married couple, with an appropriate allowance for each child.
Third there should have been something in this budget about pensions and allowances such as family allowances, old age security pensions, veterans allowances and pensions to
The Budget-Mrs. Grace Maclnnis retired public servants. These should be brought into line with two things, today's cost of living and today's standard of living. Pensions in this country have never been set in accordance with what it costs to live on anybody's standard of living. They have been set in accordance with political pressures. Governments of the day have always figured that they should set pensions as low as they could possibly get away with and still remain on the government benches.
For the first time in history we should examine and overhaul these pensions and allowances. We should determine how much it costs people to live at a reasonable and modest standard of living and set these pensions on that basis. The economic council has pointed out that poverty is relative. Poverty of a century ago is not poverty today. People today might have something which could have been considered affluence a century ago but today they are on a different level because they observe other people who enjoy modern affluence. The standards of pensions and allowances today must be related to what it costs to live moderately or even modestly.
Let me refer for a moment to the so-called social development tax. Do you know why the government calls it a social development tax? I can only find one reason. It is called a social development tax in order to keep this money out of the hands of the provinces. If the government had really meant this to be a social development tax the budget would have contained some indication of social development programs. There is not one single snip of a program for social development in this budget.
There was an indication yesterday and today of what I might term social going-backwardness. This is taking place in a big way and is in prospect for the next few years. I am not at all sure that if this government were not protected by immunities of various kinds-a big majority and perhaps a parliamentary immunity-it could not be sued for fraud for calling this a social development tax. It is no such thing. It is a tax with a fence around it to keep it out of the hands of the provinces. By the looks of things we will not get any social development as a result of this tax.
My next point is, I think, point number four. I do not like to criticize the government without some suggestion as to what should be done alternatively. Let me make another suggestion now. I am sure this will cause great amusement. It always has caused
November 5# 1968

The Budget-Mrs. Grace Maclnnis amusement in the past. If we are going to protect the homes in this country, until such time as we have decent allowances for families, we should make available to mothers who make a full time career of raising their children a decent allowance to enable them to do so. France has been able to do this.


Some hon. Members:: Hear, hear.


Winona Grace MacInnis: I am
glad there are one or two people who applaud. France has found this to be one way of protecting homes there. We badly need protection for our Canadian homes. If a woman could go out and earn another pay cheque to enable the family to live with a moderate standard of living but deliberately stays at home and puts her effort and energy into raising fine citizens from the standpoint of physical, mental and moral development, then in my opinion she deserves a salary as much as the woman who goes out and sells soap and shoes and sealing wax at some store or other establishment. I think the time is ripe for this.
My next point is number five. It is my last point, my royal george. This is a long range plan. While we are overhauling these pensions and giving these allowances we should realize that all these things are like a crazy patchwork quilt which should be placed in the museums with the lanterns, side boots, ox carts and those other things that belong to the 19th century. We do not need these things now.
If I had a little more faith in the Prime Minister than I have I might hope that he had one more card up his sleeve. I might hope he would clear the ground by stating that the government is getting out of medicare and other cost sharing programs in order that it can adopt a real program whereby the federal government could control the finances and know whether it was building up deficits. I would hope the Prime Minister could say that he is clearing away this patchwork quilt legislation in order that we here in Ottawa can build a good guaranteed annual income program for Canadians.
Perhaps I am doing the Prime Minister an injustice by thinking that he does not have this in mind. I hope he will come here tomorrow afternoon and tell us this is what he had in mind all the time. Since the election last June it has become fashionable to declare that such a thing as a guaranteed annual income is impossible. I have heard estimates of between $2 billion and $3 billion as the cost. It has been said that it would bankrupt the country and is quite impossible. But it
[Mrs. Maclnnis (Vancouver-Kingsway) .1
was only a few months before the election last summer that several hon. gentlemen who are now occupying the government benches were pushing for a guaranteed annual income. I should like to read from the Globe and Mail of August 13, 1966. It indicates that western Liberals meeting in Saskatoon called for full government study of a guaranteed annual income program. The article then states:
The resolution said a guaranteed annual income program would be a substitute for Canada's current maze of welfare and assistance programs. Liberal M.P. Ronald Basford (Vancouver-Burrard), a member of the British Columbia delegation, urged adoption of the resolution, saying the concept is new but promising.
"We want to see if this will be a way to break the cycle of dependency which nowadays often keeps people on welfare all their lives."
[DOT] (5:50 p.m.)
I agree. I think that is good sense. I hope he will echo those sentiments now. I daresay I shall find out in a little while whether he will. He was not the only one to push for this. The then minister of national health and welfare, the minister of agriculture, the minister of justice, the leader of the opposition and quite a few others were pushing for a guaranteed annual income. I think the arguments for it are every bit as good now as they ever were.
If and when we get a guaranteed annual income, I ask hon. members to remember that tremendous savings will be made in other social security programs. These savings can be made whether at the federal or provincial level. Please do not forget that it is the same John and Mary Doe who put up the dough when it comes to taxation, no matter which government does the collecting. A guaranteed annual income is not all financial loss. The economic council at page 105 of its annual review says:
It has been estimated In the United States that one poor man can cost the public purse as much as $140,000 between the ages of 17 and 57.
I would add that he never does get out of his poverty. So we are putting out thousands of dollars of the taxpayers' money recklessly to try to rehabilitate people who have fallen into the trap of poverty; and no matter how much we rehabilitate them they will never be in as good a situation as they would have been had we kept them out of the mess in the first place. The things I have proposed should be done now through wisdom about the future of our country and care for the people of our country. If we do not do
November 5, 1968
them now for these motives, we will do them later for other motives.
I attended the national conference on housing last week in Toronto. At that conference an American house builder who has been involved in housing programs said something like this: I hope you Canadians will be wise enough to tackle the housing problem on a broad enough scale now, while there is yet time. We delayed too long in the United States; we waited until the ghettoes rose higher and higher, grew thicker and thicker, and the antagonisms mounted more and more. Today we are doing through fear what we should have done through justice and common sense years ago. I hope we shall have the wisdom to do these things now, Mr. Speaker.
I know my time is almost up and I wish to cite only one more illustration. Other hon. members had a little more time allowed them, except for one hon. member across the way. What kind of people and what kind of country do we want? I hope we will not everlastingly be grubbing along in this country satisfied with people just getting enough to eat, wear and provide a roof over their heads and a car in which to go places. That is not enough. We should be looking forward to making conditions such that people can have what used to be called the finer things of life, such as music, books, travel and a chance to meet and talk with people and do interesting things. We in this house can all do that but large sections of the Canadian public cannot.
Last fall the Canadian magazine gave the example of three citizens of Canada, one with a wife and four children and an income of $8,000 a year, another with a wife and three children earning $16,000 a year, and the third with a wife and grown son earning over $50,000 a year. I could point out that the smaller the income the larger the number of children, but I will leave that side of it alone. But this is what I want to emphasize. The man with the income of $8,000 a year can afford only 1.2 per cent of his income for books, entertainment, special hobbies, club memberships and vacations. The man who earns $16,000 a year can afford 7.84 per cent of his income for these extra things, and the man earning over $50,000 a year can afford 36.8 per cent of his income for what we call the finer things of life, above and beyond the creature needs of human beings.
I wish this budget had contained one little hint that we are aiming for this kind of society, because that is the just society. I say to
The Budget-Mrs. Grace Maclnnis the government: You have raised people's expectations in the country. You have lit the fire under people's hopes and aspirations and that fire, in spite of this damp squib of a budget, will not go out.


Mr. Mongrain:: Mr. Speaker, I have a question for the hon. lady and I apologize again for interrupting her. Of all the interesting comments she made this afternoon there was one that struck me as being somewhat inconsistent. I would therefore appreciate being told how the hon. lady links her present attitude of blaming the Prime Minister (Mr. Trudeau) for promising the provinces that in the next five years they will have their autonomy and administer social services such as medicare, with the expressed concern of her party for the policies of my province which they themselves call "le statut particulier".


Winona Grace MacInnis: Mr. Speaker, I would have no objection to the provinces having a great deal of leeway to carry out their own programs. As a matter of fact, I want that; but I want it along with a framework of national planning so that Canadians may move from the hon. member's province to mine and feel quite at home. It is for that reason that I deplore very much the destruction of a national framework of social security, including medicare.


Mr. Deputy Speaker:: The hon. member for Brant.


Mr. Brown:: Mr. Speaker, could I call it six o'clock?
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
James Elisha Brown: I should like to take part in this debate, Mr. Speaker, in order to deal with several important matters, one or two affecting my constituency and the others being of urgent national consequence. I will divide my remarks into two parts. The first part deals with the dangers to individual Canadians from the growing bureaucracy of government agencies, particularly as they relate to the position of individual members of parliament who represent the population of Canada in this house.
I could commence with a matter involving the Department of Labour, and which is

2454	COMMONS
The Budget-Mr. Brown related to the effort of this department to effect a savings in its estimates. The department closed the unemployment insurance offices in various parts of the country. In spite of my strong opposition, Mr. Speaker, taken with the predecessor to the present Minister of Labour (Mr. Mackasey), who did not or would not listen to me but listened instead to his over-zealous officials, all of whom may have been more interested in preserving salary increases to themselves instead of being interested in the people of the country, the unemployment insurance office at Brantford, Ontario was closed, and was removed to Hamilton, Ontario. I need not remind members of the house that Brantford is a community of some 60,000 individuals, hard working, serious minded people who have lost the services of an office of the government of Canada which was vital to each of them. At the moment there is no office in Brantford to deal with unemployment insurance problems. The hard working people of Brantford have to go to Hamilton to discuss with officials there the individual problems they have. These problems pile up, particularly when the department rules against the claims made, and this is not infrequent. I can assure you that the claimants necessarily appeal and have to provide evidence. They write letters to Hamilton which go unanswered. Then they go over to Hamilton at considerable expense.
In the alternative, they make telephone calls to Hamilton, thereby running up considerable expense in telephone bills. Some people have reported to me at my house in Brantford that their telephone bills are running very high right now because of calls to Hamilton. First of all, they have to try to find the proper official who can deal with them, and then when they do find him they have to discuss their problem. By providing no service at all to the working people of Brantford in connection with unemployment insurance the government, inadvertently of course, is raising their taxes considerably.
The unemployment insurance authorities will not even send an official to Brantford for a minimum of two or three days a week to interview people and hear their complaints. As a matter of fact, the Unemployment Insurance Commission will not even instal a telephone service for Brantford residents so that a person would only have to dial the word "Zenith" to call the officials in Hamilton.
The result of this is that these people communicate with their member of parliament. I

DEBATES	November 5, 1968
am therefore spending a large portion of my time, week in and week out during the sessions of parliament, answering people and promising to take up their complaints with these officials. I am becoming, as it were, a many-armed ombudsman for the people of the county of Brant. I do not mind giving this service. After all, it is my duty to assist them and I am ready to devote a large portion of each week to the performance of this duty when I should in fact be sitting in my seat listening to the debates, studying government estimates and generally acting as the true representative of the people of the county of Brant in the House of Commons. Let me warn the Minister of Labour (Mr. Mackasey), that kind and understanding gentleman who happens to be a dear friend of mine-
[DOT] (8:10 p.m.)


Erik Nielsen: You won't get any office that way.


James Elisha Brown: I know, but I want to tell him that because I believe it-that he can expect to hear a good deal more from me in the next few weeks and months on the matter I have raised.
I should also like to say one or two words about hospital employees, Mr. Speaker. There are some 255,000 permanent and about 36,000 part time hospital employees in this country. You may not know, Mr. Speaker, that these people cannot qualify for unemployment insurance, but that is the case. They can qualify only if the hospital board that employs them permits them to apply as a group. Unfortunately, hospital boards are very often composed of active businessmen who, perhaps, suffer from a lack of social understanding. As a result they are frequently lax in seeing to it that their hospital employees are allowed to register for unemployment insurance. Under the law at present, unless the hospital board sanctions it, hospital employees cannot qualify for unemployment insurance.
It seems rather shocking to me, Mr. Speaker, that the Unemployment Insurance Act fails to provide for these people, and I fail to see the reason for their exemption from the provisions of the act. I suggest that an amendment to the act to correct this situation would mean a great deal to this large cross section of workers. After all, Mr. Speaker, what group does more in life than that which helps their fellowmen in hospital?
I should like to spend just a moment or two discussing the Canada assistance plan and how it operates in this day of top heavy bureaucracy. This plan is administered by the
November 5, 1968

provincial authorities, and I want to give the house one or two examples of how it operates. I should like to refer to two cases that recently came to my attention, each involving a man who had been disabled.
When the plan was put through the house, Mr. Speaker, I understood that a new day was dawning in Canada for those suffering from various degrees of disability. The era of old fashioned welfare programs was said to be gone forever; a new approach was going to be made to ensure that nobody would be left destitute as a result of physical disability which prevented him or her from working. I understood that was the clear intention of the plan when it passed through parliament.
One man in my constituency, Mr. Speaker-and a finer person you could never meet-had to undergo brain surgery. Since undergoing the operation he has been unable to return to his former employment. However, he is not totally disabled. I had understood that the day when you had to be totally and permanently disabled before you could apply for a disability pension had gone forever; but no, Mr. Speaker, that is not the case: Far from it. At my suggestion this gentleman applied for a disability pension.
[DOT] (8:20 p.m.)
What happened? Local officials employed by provincial authorities called on him and said, "We have discovered that your wife has been working, and unfortunately you are unable to draw the disability pension because too much money is coming into your house." I thought that means tests in matters involving subjects like this had been done away with, but that is not so. The officials called and said, "Your wife is working and you cannot qualify." But she is not in good health and really cannot work. Nevertheless she goes out to work. Why? The answer is that she does not want to apply on behalf of her husband and herself to the local relief office of the municipality of Brantford, Ontario. That is why; and because she earned money that claim was rejected by the officials.
I know another case concerning a man who is a year or two over 60 and who suffered two strokes. It was clear to me that he positively cannot work. This man came to see me during the last general election and I told him to come back after the election and I would speak to him. He did that, and I advised him to apply for a disability pension because I felt he was entitled to it. What happened? Some officials went to his house; they were very
The Budget-Mr. Brown sympathetic and courteous but they said to him, "Why, we have discovered your wife has been working. Too much money is coming into your house and you are not entitled to a disability pension." That man's wife is beyond the age when she should be working hard; yet she is working hard and earning a mere pittance. She must do so, in order to sustain their home and to avoid, if at all possible, having to apply for relief to the local municipal relief authorities. I can tell you, Mr. Speaker, that at Brantford, Ontario, as elsewhere, people dread having to apply for relief, because such an application humiliates one.
In both cases the couples were told, "You are not entitled to a pension, as too much money is coming into the house." In the latter case, on top of all the troubles that couple had, in the midst of their sorrow they were informed by local officials that the husband was not eligible for a pension because his wife had dared to work, the implication being that they had discovered something terrible. Here was a woman going out and earning a little money. I think she should be honoured for so doing, but that disqualified them from receiving a disability pension. Surely, this sort of thing is far from what hon. members of this house expected when fairly recently the Canada assistance plan passed through this house.
Now I wish to say a word about student loans. I thought a new day had dawned when legislation permitting student loans was passed by this house. But, again, for various reasons the administration of these loans was left to provincial authorities. What has happened? A student is interviewed at his university or other place of learning by officials, and is asked, "What do you want?". The student answers, "Well, I want a student loan." The official asks, "Yes, but how much do you want?". The student answers, "Well, give me $1,000". The student figures that $1,000 together with the money he has earned during the summer months will see him through the year. The official answers, "You want $1,000, do you? Well, you will be given half, and the rest you must get wherever you can". This is going on, and I have had many complaints. People call me up night and day, and I sincerely try to do the best job I can as a member of parliament for my constituency.
What kind of operation is this, Mr. Speaker. When this legislation was passed I do not think it was the intention of the house that students applying for loans should receive only a fraction of the amount they applied
2456	COMMONS
The Budget-Mr. Brown for. When a student applies for a loan in good faith I think he is entitled to receive his full loan from the department administrating this legislation. So, Mr. Speaker, bureaucracy grinds out its work in contemptuous disregard of parliament and the members thereof.


Some hon. Members:: Hear, hear.


Gerald William Baldwin: Tell us more.


James Elisha Brown: I really dislike raising grievances like these on behalf of my constituents, but I must do so if I am to continue sitting in this house and representing them.


Some hon. Members:: Hear, hear.


James Elisha Brown: And now, hon. members, and particularly hon. members of the government,
I want to talk about a matter that affects our whole population. I refer to the subject of rents of real estate and the tremendous increases in rent which landlords have been imposing on their tenants right across the country. Mr. Speaker, the persistent upward spiral in rents will have to be curbed. Rents will have to be brought into line almost immediately. In other words a system of rent controls should be introduced. A bill providing for these controls, together with a request to the provinces to pass enabling legislation to deal with this matter, which is admittedly of national urgency, should be brought in. Coupled with this, or perhaps in place of it, I should like also to see a capital gains tax instituted to deal only with sales of real estate other then private, owner occupied residences.


Mr. Brewin:: What party are you in?


James Elisha Brown: I feel that this matter ought to receive the early attention of the government. This might of course cause certain economic difficulties, but such a tax and such rent controls constitute a moral necessity at this time. The taxing of profits on real estate transactions will, in itself, help to curb the activities of many unscrupulous persons. Rent controls ought to curb the activities of landlords who do not consider for a moment the position, economic and otherwise, of their tenants. I raise these last matters in the face of what appears to me to be truly a national emergency.
[DOT] (8:30 p.m.)


Some hon. Members:: Hear, hear.


James Elisha Brown: This emergency is of great importance in its ramifications in that it is

DEBATES	November 5, 1968
shaking the stability and peace of the country. Its challenge constitutes a danger to our entire economy and it threatens the very existence of our democratic process as evidenced by this house and the Senate.


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


James Elisha Brown: I will deal with it when I have finished; I am almost through.
I appeal to the government to do something in this field of rent control, perhaps by imposing a sharp capital gains tax on real estate profits only. I think the people of Canada are looking to us to protect them. I believe that a fundamental right of every Canadian is to shelter, particularly in a climate like ours, and unless this is obtainable by our people we shall be unable to work toward that just society which is so much spoken of by our highly revered Prime Minister (Mr. Trudeau), and which is sought not only by him but, I know, by every hon. member of this house and of the Senate.

Mr. Speaker, before resuming my seat, I would like to say a few words in French, our second official language.
I would like to explain to hon. members that in the riding of Brant, which I have the honour to represent in this house, the great majority of the people speak English. Nevertheless, since I was a child, I have always been fully conscious of the important contribution made by our French-speaking compatriots to the development of our country.
If I remember correctly, fifteen years ago already I made in this house a speech in which I said to hon. members that a new trend was emerging in Brantford. Among other things I told them that several distinguished women in Brantford, particularly the members of the University Women's Club were beginning to take French courses and were holding some of their meetings in French.


The Acting Speaker (Mr. Bechard):: Order. I am sorry to interrupt the hon. member in his very worthy efforts in our second tongue, but his time has expired.


Some hon. Members:: Continue.


The Acting Speaker (Mr. Bechard):: Does the member have the consent of the house-


Some hon. Members:: Agreed.
November 5, 1968


James Elisha Brown: Mr. Speaker, I should like to thank my colleagues for allowing me to say a few more words.
The trend about which I spoke continued to grow through the years. Today, we often hear French spoken on the street. Indeed, the French language has become so popular that during the last election campaign, my Conservative opponent used the argument that he was bilingual, or at least, that is what he said. Later on, I myself made a speech in French over the radio. I felt that if a Conservative gave a speech in French, it was high time for me to do better.
Mr. Speaker, we are all working toward building a new Canada, a bilingual Canada, a more prestigious Canada, a Canada whose people can use two beautiful languages recognized as such by the nations of the world under the able guidance of our bilingual Prime Minister.


Some hon. Members:: Hear, hear.


Erik Nielsen: The complaints of the hon. gentleman who has just resumed his seat are legitimate but the allegations as to paternity are not. There are literally dozens of members of this house who have the same complaint concerning the removal of unemployment insurance offices across the country, but it should be remembered that it was the hon. gentleman who is now the Lieutenant-Governor of British Columbia who was the creator of that policy, as a member of the government which the hon. member for Brant (Mr. Brown) now supports. In view of the remarks the hon. member has made, it will be interesting to see how he votes when the motion of non-confidence is dealt with this evening.
We are approaching the anniversary of another 60 days, 60 days which some might compare with those famous but ill-conceived 60 days of a previous administration after it had been given the somewhat marginal confidence of the Canadian electorate in 1963. It is a vastly different 60 days, though, 60 days which seem to be titillating the timid, terrifying the bold and dazzling the daring with their footwork.
[DOT] (8:40 p.m.)
We have had a budget that has been produced by a Minister of Finance who makes his predecessor look like an expert. To contemplate the spectacle of the government's financial manipulations is to contemplate
The Budget-Mr. Nielsen chaos in command. They have now revealed their financial incompetence, their intellectual bankruptcy, and we have had the Prime Minister's proposal yesterday to cast the provinces aside in what will amount to a sea of debt.
For five years under successive Liberal administrations we have had plan after plan, program after program; wars on poverty which have been discontinued without a shot being fired. We have had the Canada Assistance Plan, the Canada Pension Plan, task force No. 1, task force Nos. 2 and 3, literally dozens of task forces travelling across the country to the extent, as I said before, we should be introducing a bill to unify all these task forces running around the country. Nothing has been achieved, except higher and higher costs, and higher and higher taxes, costs and taxes imposed by the government on the provinces because of the actions of the government.


Mr. Groos:: And smaller oppositions.


Erik Nielsen: But that situation won't prevail very long I can assure the hon. member. The people of this country can be fooled some of the time by some of the people, but not all of the time by people across the way.


Some hon. Members:: Hear, hear.


David Walter Groos: Author?


Erik Nielsen: Well, it certainly wasn't the hon. gentleman. Medicare was a tragic example of social justice being sacrificed to political expediency. It was a field that was already occupied by the provinces. Ontario had a plan. Several provinces had signified their intention of setting up medicare. Saskatchewan was already in business, and Ottawa decided to break into the field, not for reasons of social equity, not for the general good of the greatest number of people in this country but for reasons of headline hunting political expediency, and there lies the truth of the medicare mess that the government finds itself in now.
That this was so, and is so, is shown by the formulation of the criteria which the provinces cannot meet and have made clear now they cannot meet, to say nothing of the two northern territories. I know there is not too much concern displayed on the opposite side of the house for the two northern territories because of lack of knowledge in connection with them. But here we have the Prime Minister (Mr. Trudeau) saying that in five
November 5, 1968

The Budget-Mr. Nielsen years the federal government is going to get out of this plan. We in the north will then still be trying to get into it. I can see it now.
This gave to Ottawa pre-emption of the medicare field while at the same time making it difficult for the provinces to get into the field at all. It had the effect of putting off medicare for millions of Canadians.


An hon. Member:: They will all need it after this speech.


Erik Nielsen: I am sure the hon. member will have his opportunity later and I hope he will rise and enter the debate. Let him tell us when his province will be getting into the plan under the present formula of the government.
Having secured the credit for medicare in two elections the government has now squeezed out all the political mileage it can from medicare and is opting out. It is not surprising that the so-called opting out proposal from the Liberal government to the provinces is now being taken over at the federal level. We have had an example of the federal government inaugurating programs it could not pay for, knowing it could not pay for them, and now leaving the provinces to hold the baby.


Mr. Woolliams:: What a baby!


Erik Nielsen: And what a baby it is! Faced with a situation of financial chaos the federal government is in effect declaring bankruptcy and leaving the provinces to face the creditors. There has seldom been an instance of federal government irresponsibility to parallel this one. However the Prime Minister will find that the government is bound by the undertakings of its predecessors.
Medicare was brought in in its present form by his government. They took the Saskatchewan scheme, which Saskatchewan is now trying to modify because it is in deep trouble with it, and forced it down the throats or tried to force it down the throats of all provinces. The former minister of finance saw where they were going and he said it would cost $500 million annually. He was not very wrong. That was for the federal end of it. He said that in 1969 that would be the bill, presuming all the provinces were in the scheme. Although the former finance minister warned them, they persisted. All the time they had in mind to leave the provinces to pay the bill. There has seldom been such an example of conscienceless manipulation of the people. The big Liberal party is over and we are now being handed the bill.

Canadians, Mr. Speaker, are not any longer going to put up with this kind of fast and loose juggling of fiscal accounts that we have had from the government. We were given a set of estimates in March, and they were revised in October with an additional $400 million added to the account. The fact is that the government has completely lost control. National accounts are out of control. The Prime Minister knows this, and so does the Minister of Finance. The 2 per cent surcharge on income tax, up to a ceiling of $120, has got to be viewed as a desperate last ditch grab by the government for revenues. In order to get those revenues they are putting their hands in the pockets of the provinces, and that is what the complaint was the day before yesterday at the finance ministers meeting.
I will have something to say about the poor people, and about rule by the rich over there in a moment, but that is what the complaint was yesterday and today at the meetings of the finance ministers. In ordinary circles that kind of action is known as robbery, or at the very least larceny. Having over five years amassed a huge bill for uncontrolled extravagance and unworkable but very costly schemes, the government got together and said, "What are we going to do"? The answer was the easiest way out-send the bill to the provinces.
Ontario's provincial treasurer said yesterday they were embarking on a policy of fiscal balkanization. The simple fact of the matter is that the government's finances are in a state of chaos. I am making every allowance I can for the situation in which they find themselves but I cannot come to any other conclusion. I am sure hon. members in the rump to my right and across the way feel the same way.


Some hon. Members:: Hear, hear.


Erik Nielsen: They are agreeing. Let us examine the course of events. It is an almost incredible story of patching and papering, a story of borrowing from Peter to pay Paul, or perhaps it is borrowing from Mitch to pay Edgar. It is a story of blundering compounded, of half-hearted measures where bold and imaginative decisions were required. It is a story of a light that failed, of a ship that foundered, of a crew that has been overcome by its own incompetence. I am sure the rump can see that as well. These are the people across the way who railed and ranted and complained.
November 5, 1968	COMMONS DEBATES	2459
[DOT] (8:50 p.m.)


Marcel-Claude Roy: Mr. Speaker, may 1 ask my-
The Acling Speaker (Mr. Bechard): Is the
hon. member for Laval rising on a point of order?


Marcel-Claude Roy: Yes, Mr. Speaker. As a member of the rump, as this corner of the house is called, could I ask my hon. colleague, if he has read the statement of the president of the Chamber of Commerce of Canada, Mr. Lynch, about the budget?


Erik Nielsen: Well, I cannot blame my hon. friend, because his confusion and his lack of knowledge is just about the size of that which exists in the minister and government that presented this budget. Here we have these people who not too many years ago thought the nation was on the edge of fiscal disaster, on the edge of a great precipice.


Marcel-Claude Roy: The Diefenbaker years.


Erik Nielsen: Quite right. Every one of those people criticized those years and the deficit financing. This year we are going into the hole deeper and deeper. What do we have now?-the greatest deficit in the nation's history. They are making records. They are making records every day now. They now have established the record for running up a deficit of $790 million. This is far greater than the Diefenbaker years ever accounted for. At the same time we have the highest cost of living and the highest taxes in the country's history. Real good times! They should be in the Olympics because they would get a gold medal for this kind of thing. And the deficit of $790 million does not include the Expo's deficit, or the medicare deficit which has now been swept under the rug.
In the coming year we are budgeting for another deficit which will run up to $600 million or $700 million by the time all the figures are in, because again they have not taken into account the full cost of medicare or the full Expo deficit. We have seen and are seeing every day weird and wonderful procedures of a kind that would bring about the disbarment of professional accountants, as the government frantically uses every device to cover up the real story of its fiscal malaccounting,
29180-156*
The Budget-Mr. Nielsen the real size of the largest deficit in the history of this nation, and its misleading quotations in the estimates which have been the subject of national condemnation in the press.
In the meantime the government, with its cap in hand, ran to the market every other day for cash loans through short term treasury bills, forcing interest rates to unprecedented and dangerous levels.


Marcel-Claude Roy: That is ridiculous.


Erik Nielsen: Ridiculous?


An hon. Member:: The Viet Nam war.


Erik Nielsen: There is an example of the fiscal knowledge of our friends in the rump over there.


Mr. Hees:: He is going to be Benson's executive assistant.


Erik Nielsen: The hon. gentleman should be immediately promoted because he would probably be an improvement over the existing minister.
They kept the iniquitous tax on homes, locking out young couples from that privilege which is rightfully theirs, the privilege of every young Canadian couple of having a home of their own. We have the sales tax on building materials, and in addition to having the highest cost of living I forgot to add that we have the highest interest rates. Another gold medal. What has happened is that this government, because of the rug that has been pulled from under the housing industry in this country-and the hon. gentlemen should crawl under that rug because that is where they belong-has forced young Canadian couples in this country to take up housekeeping in the back seats of automobiles. And the way the cost of automobiles is going up, as a result of the new automobile pact, even they are going to find themselves cramped for space. It would be humorous if it were not so serious and such a tragedy. That is the tragedy of their policies.
I heard my hon. friend who just sat down a moment ago talk about rent controls. We in the north would like to have something to control. These tragedies do not take into account the rights of young Canadians, and particularly those younger people who have a right to look forward to owning their own homes. I think this is the most serious tragedy of all as a result of this government's policies.
And we all expected so much. My friend who just sat down a few moments ago spoke
2460	COMMONS
The Budget-Mr. Nielsen of the octopus-he did not use that term but I do-of the bureaucracy encroaching hon. members' rights. Yet he supports a government that directs our young people into some king of bureaucratic outlet. I will say a thing or two in a moment about the C.Y.C., because the young people of this nation are the most serious tragedy of all. The young people look to the government for guidance, and get none at all. This government will go down in history as the government that refused to recognize the problems of the youth, or failed to do anything about these problems if they did recognize them.


An hon. Member:: Local papers-


Erik Nielsen: Who worries about local papers, when I rise in this house to speak? In my riding we have one weekly newspaper and it has to travel 207 square miles to get around, so by the time my remarks get around by newspaper they are pretty old.
We have had an offer by the Secretary of State (Mr. Pelletier) to draft youth into the public administration. That does not meet the problem. No plan, no policy, no programs, no goals, no targets, no objectives for our young people. And this is a government that was elected on the youth swing. They set up the Company of Young Canadians and then they proceeded to find something for it to do. I think it would have been a great deal more beneficial and constructive had they determined the needs, set out the policies and objectives, and then set up the organization to pursue those objectives. Where is the great society; where are the plans, policies and programs that the people of this country expected from the government when they elected it?
Never has there been an order paper so bare, if I may use the term, or so bereft of inspiration as the present government's order paper.


Marcel-Claude Roy: I thought you were reading that in.


Erik Nielsen: It makes Mother Hubbard's cupboard look like a well stocked patchwork. Let us have a look at these fresh new policies and find out what has been going on for almost 60 days. We have a bill here that is to concern itself with the status of official languages in Canada, a bill which I fear will be setting up bilingual ghettos in this country. Perhaps this is better than unilingual ghettos. We have a bill to amend the Farm Machinery Syndicates Credit Act.

DEBATES	November 5, 1968


Marcel-Claude Roy: What do you say about it; were you here when the vote was taken?


Erik Nielsen: The hon. member asked me what I have to say about this bill. Because of the government's attitude toward agriculture in the Yukon and in the north generally, we do not have to worry about agricultural matters there because we are not going to get anything from this government.
[DOT] (9:00 p.m.)
We have a bill to amend the Fisheries Improvement Loans Act; we have a bill to amend the Veterans Land Act, with the specific purpose of raising the interest rates on V.L.A. loans; we have a measure to amend the Patent Act, the Trade Marks Act and the Food and Drugs Act; we have a measure to amend the Historic Sites and Monuments Act to provide for membership on the board of an officer of the national museums of Canada; we have an act or a resolution to introduce a measure to prevent the introduction or spreading of pests.


Some hon. Members:: Oh, oh.


Erik Nielsen: That is what I am going to be here to vote on. That measure refers to pests that are injurious to plants. We have a measure to provide compensation to farmers whose agricultural products are contaminated by pesticide residues; we have another measure to amend the Animal Contagious Diseases Act. This is to remove from the act the amounts of compensation specifically laid down for horses and cattle.


An hon. Member:: For horses, what?


Erik Nielsen: This is in respect of horses and cattle.
And so it goes. There is nothing on the order paper of consequence. Where is the imagination of this new era that is to come about as the result of the election of this fresh, new, vibrant, exciting government? Where is it?


Gerald William Baldwin: It is still off to the rump.


Erik Nielsen: Perhaps we might find it in the freshwater fish marketing board. The last government ran out of ideas after five years and this government is intellectually bankrupt from the start. They let the Company of Young Canadians flounder in danger of drowning. There is nothing for youth.


Raymond J. Perrault: You are not an optimist.
November 5, 1968


Erik Nielsen: Can the hon. member blame me for not being an optimist? I am an incurable cynic now, having looked across the way since 1963.
What about all this vibrant legislation? What has the government been doing? They have been pushing up the interest rates for farmers, for fishermen and for veterans. They have locked out the young people from their right to suitable homes. The minister, by his fiscal policies, aided and abetted by millionaires row over there-and those who are not in that class hope to join those ranks- and by his confiscatory taxes and his refusal to deal with the housing problem has acted as some kind of an anti-cupid, making it difficult if not impossible for the young people in this country to get married. Does the Minister of Finance or his counterpart in Transport deny that one of the requirements for a happy marriage is a home; a place wherein to lav one's head?


Some hon. Members:: Oh, oh.


Erik Nielsen: This government has callously denied this right to young Canadians by the iniquitous 12 per cent tax on homes, which is a tax on the happiness of the young people of this country.


Some hon. Members:: Shame.


Erik Nielsen: This is a tax which has over and over again been piously defended in this house by the Pharisaical pronouncements of both the present and the former ministers of finance, and which is embedded as a policy of a callous and heartless government.
I say to the minister, who unfortunately I do not see in the house-perhaps he is not on the roster-and the Prime Minister. Let these young people have homes. Take off the tax on happiness and give the young people a break. Come down off your high horse and out of your ivory tower and remove the iniquitous tax on building materials. I implore you people over there and in the rump to do these things.
I suppose we may as well try to get blood out of a stone as sympathy out of this government. The government's next move, having authorized a $50 million arts centre of which 99.9 per cent of Canadians will never see the inside-


Eldon Mattison Woolliams: That is George's house.


Erik Nielsen: -and having spent $50 million on a hydrofoil of which nothing has been
The Budget-Mr. Nielsen heard for three years-it may be in orbit- and having squandered money on task forces and wars on this and that all over the country, is to cut back on Indian health payments and services. This is perhaps the most iniquitous move in a sordid series of incompetent blunders by this government. Imagine having squandered money for five years-not like drunken sailors because no drunken sailor ever had that much-and having them now come along and say, that, apart from the average poor people, the Indians must pay! Who could be more poor in this country than that group of citizens?
The Indian has been getting too much, they say. We cannot afford to have these Indians getting sick and asking for medicines. We made them wards of the state. We took away their independence and we placed them under the almighty department of Indian affairs. We have made them bureaucratic pawns but we refuse to allow them to get ill, hungry or jobless because we will no longer pay. This is the all-seeing wisdom of the most heartless government in our history; and they talk about compassion. What a hollow ring that word has coming from this government. We are now going to soak the Indians.
Of course, we are already soaking the poor with the $120 cutoff, which must not be allowed to inconvenience the rich. We had the 5 per cent surcharge last session which was rejected by parliament. Then we had the 3 per cent surcharge, and now we have a 2 per cent surcharge. We had a budget in the spring and one in the fall. Then we had no budget for 14 months. Now we have another budget in the fall, which means we will have another budget in the spring. In spite of this the government attempt to pass themselves off as fiscal experts. Let me say this government is fiscally unfit.


An hon. Member:: How do you spell that?


Erik Nielsen: I do not know how to spell it, but I know what I would give to cure it.
We have rural poverty with new frontiers of science in the space age. We should be opening up the north and we should have a clear cut and intelligent defence policy. We should have a policy stimulating national development. These are matters the government has failed to recognize. It has written off the needs of our major cities and! industries.
This government has sent the Minister of Transport (Mr. Hellyer) on a junketing charade from coast to coast. He is now in the

November 5, 1968
The Budget-Mr. Blair Yukon. This is taking place when he has not been busy at home watching himself on his home video set.


The Acting Speaker (Mr. Bechard):: Order, please. I have to advise the hon. member that his time has expired.


Some hon. Members:: Carry on.


The Acting Speaker (Mr. Bechard):: Does the house give its unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Bechard):: Does the hon. member have the consent of the house?


Some hon. Members:: No.


Some hon. Members:: Carry on.


Erik Nielsen: I promise that I will not be long, and I thank the house for its tolerance.
I promise to be amusing, but if hon. gentlemen will read what I have had to say they will find it is very serious indeed.
When the Minister of Transport was not at home watching his home video set, they sent Captain Video around the country. Some people saw him: Now you see him; now you don't. That was their answer to housing: Canadians asked for housing and the government gave them Hellyer.
[DOT] (9:10 p.m.)


Some hon. Members:: Oh, oh.


Erik Nielsen: The housing situation was a mess created by the government's policies. They added 25 per cent to the price of a house, with a 12 per cent tax on every item of construction. They raised the interest rate. They priced homes out of the reach of any Canadian in the under $15,000 income bracket. Then, to make sure those people had nothing left, they brought in the 3 per cent surtax, followed by the 2 per cent surtax with the cut-off at $120. It is this government which has placed housing out of reach by unrealistic, destructive and heartless interference all along the line.
Mr. Speaker, I thank hon. members for permitting me to finish my speech.


Mr. D. Gordon Blair (Grenville-Carleion):: Mr. Speaker, in rising to make my first address to this chamber I had intended to make a few remarks about my constituency, particularly as they relate to the budget proposals which are before us. Until I heard

my friend the hon. member for Yukon (Mr. Nielsen) I thought perhaps I might be called to order because of straying from the point.


Some hon. Members:: Oh, oh.


Duncan Gordon Blair: Let me immediately assure all hon. members that I do not intend to re-read the order paper to them.


Erik Nielsen: You don't dare.


Eldon Mattison Woolliams: There is nothing to read.


Duncan Gordon Blair: My constituency, like many
others, was newly created by the recent redistribution. It embraces the western suburbs of Ottawa and extends south to the St. Lawrence river. It includes all of Grenville county, a large part of Carleton county and half of Dundas county. The prevailing political tone in these three historic counties has been rather blue in almost all the years since confederation.


Stanley Howard Knowles: More than ever now.


Duncan Gordon Blair: While the voters in this election chose a livelier colour and a new party, I have found they are accustomed to excellent representation in this house by both of my distinguished predecessors, Mrs. Jean Wadds and Hon. Dick Bell. As I embark upon my first term in this house I am conscious that I have a high standard of representation to maintain.
The budget we are discussing is one which in my opinion the Canadian people expected. With far greater insight than many optimistic political leaders, the people generally realized that the rapid expansion of government spending and the continual accumulation of deficits at all levels of government could not continue indefinitely. In the recent election the people resisted the blandishments of those who promised new and costly programs of expenditure. They responded to the appeal of this party, which was for a proper national stocktaking, the stabilization of government spending and was in no sense at all based on the promise that somehow governments could increase their expenditures and good works without cost to the taxpayers.
All of us who were elected to this parliament must have known that it did not face an easy task. Apart from the major decisions it will have to make toward the reshaping of this country for the future, one of its major concerns will be always the stabilization of the nation's finances. Although increased
November 5, 1968

taxes will never be greeted with enthusiasm, it is my belief that this budget will be accepted by the Canadian people as an obvious and essential first step in our country's march forward in the next four years. It is but the first step.
The restoring of financial stability and balance is necessary to lay the basis for necessary and important tax reforms based on the recommendations of the Carter royal commission, which the government intends to place before the house early in the new year. In a new context of stabilized government finance, which I suggest will have to be parallelled by similar action by provincial governments, who with the municipalities now account for the far greater proportion of total government expenditure in Canada, the nation and this parliament can address itself to the important question of tax reform. The aim of this reform must be, as stated by the Carter report, to achieve greater equity in Canada's taxation system.
In a much broader sense this budget will provide the stable base required to ensure the expansion and continued growth of the Canadian economy. It is only through the growth of our capacity to produce goods that we can enjoy a greater prosperity. Through this growth the present level of government expenditures in all jurisdictions can be more easily absorbed, and as our economy expands new and necessary programs can be undertaken. This budget, therefore, provides the essential foundation for the nation's expansion during the life of this parliament.
It is about the immediate future of this nation that I wish to speak. My constituency is in many respects like a miniature Canada. It presents the challenges and the problems which are faced by many areas across this country. It includes the rapidly expanding suburbs of Ottawa, industrial towns on the St. Lawrence such as Prescott, Maitland, Iroquois and Cardinal, and the farming areas in between. But tonight I can speak of only a few of the concerns of my constituency as they relate to the major problems faced by this nation and this parliament.
A recent special report in an Ottawa paper indicated that the Ottawa area was the most rapidly expanding urban area in Canada. It is expected that its population will exceed one million people by 1985. A very large part of this expansion will occur in Nepean township, which forms part of my riding. Urban expansion in any part of Canada presents a major
The Budget-Mr. Blair problem, but in this region it presents particular problems which must be the special concern of this parliament.
The federal government is the largest landowner and by far the largest employer in the metropolitan Ottawa area. It must be involved in the proper development of the area. Hon. members will be aware of the controversy which is now taking place about the planning of the development of downtown Ottawa concerning restrictions on building heights. What this controversy and problem clearly indicate is that there is an over-all defect in the planning and governmental structure in the capital area.
The emergence of a new regional government in this area on January 1, 1969, is a forward step; but it is not enough. The premier of Ontario, speaking recently in Ottawa, pointed out that the structure of the new regional government permitted participation by the federal government in the planning and development of the Ottawa region. Officials of the three governments of Canada, Ontario and Quebec, are now studying in detail the co-operative action which must be taken by them to govern and develop this capital area in the future. A proposal made in the last parliament for the creation of a special joint parliamentary committee to study the operations of the National Capital Commission is also an important step. I hope that this committee will be appointed and commence its work at an early date.
[DOT] (9:20 p.m.)
The final result of all of these deliberations, in my judgment, should be the creation of an effective but not domineering federal presence in the governmental structure of the Ottawa area. This will enable the federal government to play a positive and definitive role in the planning and development of this area. This role should not be limited, as it has been in the past, mainly to the creation of great national assets, such as buildings, parks and driveways, but it should be positively directed toward the improvement of the quality of life for all residents.
The task should not be undertaken to create a national capital as a great national monument, but rather as a metropolitan area which will stand forth as an example to all of Canada and will enhance the pleasure of living here for the people for whom the federal government should have a special concern, namely its own employees. In my opinion, we have in this parliament a magnificent opportunity to develop in this capital area all that

November 5, 1968
The Budget-Mr. Blair is best in the new concepts of urban living, including the creation of satellite towns and the reassessment of the concept of the green-belt for the use and benefit of all people in the region.
A most essential part of the planning and development in which the federal government must become involved is that of urban transportation. The lack of a fully integrated urban transportation system in the suburbs which I represent is not only a great inconvenience to the people living there but a positive hindrance to their life and livelihood. Recently, a lady living in one of the suburban developments in my constituency was disqualified by the local office of the Unemployment Insurance Commission because her area of work was said to be restricted through lack of proper transportation to the area where there were reasonable opportunities for her to obtain employment. This is a condition which should not and must not prevail.
The solution to the urban and suburban transportation problem in the metropolitan Ottawa area is one which is beyond the present capacity of local municipalities. It can only be undertaken with strong leadership and financial support by senior governments. All of us here recognize that a solution to the problems of urban transportation provides one of the greatest challenges of our time. This government has committed itself to make a positive contribution to this solution, including among other things the institution of pilot projects. There is no place where this solution can be attempted to greater effect, and no place which would benefit more from such a pilot project than the metropolitan Ottawa area, which is within constant view of the federal government.
On other occasions, I intend to speak about the concerns of people living in my constituency, and particularly the public servants who constitute a large part of the population of suburban Ottawa. By the nature of their employment they are denied the same voice in public affairs which is the privilege of other citizens. This is the more so in relation to the activities and decisions of the federal government, which is their employer. The position of the public servant is one of great importance to all of us, and we who are members in this house bear a special responsibility, if not a trust, to protect the special interests of the public service.
In my view, the position of one important group requires special comment tonight and early attention by this parliament. I speak of the retired public servants.


Stanley Howard Knowles: Hear, hear.


Duncan Gordon Blair: As a result of inflation, many retired civil servants have been deprived of dignity and security in old age, which they believed would be theirs during all their years of service to the public. In terms of simple justice and equity, the case of retired public servants cries out for relief, and that relief in my judgment should come immediately. Most hon. members will know that the joint committee of the Senate and House of Commons studying the public service of Canada made the following recommendation in its final report on May 8, 1967:
The government should do what It reasonably can to protect and preserve, or failing that, to restore in some measure the original purchasing power of the contributory pensions which, under the Public Service Superannuation Act, and similar enactments, it has provided for its retired employees.
The conditions, the house will realize, which existed when this report was made almost a year and a half ago have worsened from the standpoint of retired civil servants. Although I appreciate all the claims and stringencies which press on the government at this time, I believe that the highest priority should be given to the implementation of this recommendation of the joint committee, and that consideration of the relief of public servants should be undertaken with the least possible delay.
[DOT] (9:30 p.m.)
In my opinion, the future of this country and of my constituency cannot be adequately realized without greater effort in thinking and planning than we have seen heretofore. The industrial towns along the St. Lawrence have not experienced growth and development comparable to that which has occurred in the greater metropolitan centres of this province. Their development has been retarded, notwithstanding the fact that they are located along the St. Lawrence seaway and connected by rail and highway with all the main centres of this province of Ontario. They are progressive communities, well developed and able to absorb new industrial activity and larger populations. While not experiencing the great boom and prosperity of other centres, they are by no means depressed; and it is my view that communities such as these-and they are found in every part of this country-should become a special concern of this parliament.
November 5, 1968	COMMONS
All of us have to recognize that there are at present two major trends in national development and planning. On the one hand, there is an obvious rush by industry and commerce to the larger centres, creating major problems of urban living. If this trend continues some experts estimate that at the end of this century the great bulk of Canada's population will be concentrated in a few large urban complexes. On the other hand, areas which have not been fortunate enough to develop economically, or which have become depressed because of industrial movements and changes, have become the special concern of all governments, and major efforts are being made with the support of all of us to restore hope, vitality and life in these communities.
There is a great gap in public thinking and in public policy regarding the future of this country. We appear to stand aside almost mesmerized as great urban complexes grow larger and larger. We do what we can to alleviate obvious cases of area distress, but until now we must recognize that governments, whether provincial or federal, have not established solid goals for future planning, and certainly have in no way developed effective techniques to divert and direct the development of industry to many pleasant and admirably situated smaller places and towns in Canada.
The failure to properly address ourselves now to this problem will have the gravest possible consequences for our future. No one can view with complacency the rush of population and industry to great centres. All of us must be alarmed by the relative depopulation of smaller places which has occurred and will continue unless positive steps are taken to counteract it. All of us must be concerned about the effect on the quality of life and living in Canada if smaller centres, such as the towns along the St. Lawrence, are not encouraged to grow and to develop.
I began, Mr. Speaker, by describing this budget as part of a great national stocktaking, leading to the provision of a sound basis for future growth and expansion. Those of us who have the privilege of being here must be concerned not only with growth and expansion for its own sake, but for the better welfare of all Canadians. To accomplish this there must be much more thought given to what this country will be like 25 or 50 years from now. There must be greater co-operation and co-ordination of effort between all levels of government, to ensure that this
DEBATES	2465
The Budget-Mr. Baldwin nation not only continues to prosper, but will do so in an environment which will be pleasant and agreeable for all its citizen. I believe the adoption of this budget is a positive step towards building a better Canada.


Gerald William Baldwin: Mr. Speaker, I see that there has been given to me the somewhat doubtful honour of talking out the budget. If I had time I should have liked to dwell on some of the iniquities of the government in regard to the fiscal irresponsibility they have shown in connection with the financial mismanagement of the affairs of this country. While the government was steadily pushing the economy up the inflationary spiral, at the same time it was making soft noises telling the people of Canada that things were well and that it would balance the budget.
Finance minister Gordon on June 13, 1963, as reported at page 999 of Hansard, in his budget speech said this:
It is important that we begin to put our national house in order: that we begin to move toward balancing our federal budget under conditions of high employment. We must take the first step in this direction now.
On April 26, 1965 finance minister Gordon, again during the course of his budget speech, had this to say, as reported at page 433 of Hansard:
In practical terms it seems fair to say that after a long period of troublesome deficits the nation's finances are now under firm control.
Then finance minister Sharp in the course of his budget speech on March 29, 1966, as reported at page 3380 of Hansard, said:
To all intents and purposes therefore the budget was in balance this year.
Again finance minister Sharp in his budget speech on December 19, 1966, as reported at page 11331 of Hansard, said:
I want to repeat what I said in this house on September 8 and on other occasions, that we must moderate the rate of increase in new public expenditures. Neither the capacity nor the willingness of Canadians to pay higher taxes should be taken for granted.
And so it goes, Mr. Speaker. My hon. friends on this side of the house have pointed to what was said by the Minister of Finance (Mr. Benson), then president of Treasury Board, and by the Secretary of State for External Affairs (Mr. Sharp) last fall and this spring. In the face of those statements we find that since the government first took office there has been an aggregate of accumulated deficits totalling approximately $1,800 million. This does not
November 5. 1968

The Budget-Mr. Baldwin take into account some $3 billion of loans and investments, so-called, which are in reality disguised expenditures of the crown, and which are not taken into calculation in working out what is the financial position of the government.
During the last few weeks, Mr. Speaker, a rash of books have been published. People have been coming out from underneath rocks and from behind fences to write books about the political situation and the political affairs of this country. I suggest that the title of a good book at the present time might well be "The Great Swindle, or How to Wreck the Economy in Five Easy Budgets".
In the short time that is left to me I want to concentrate on the very iniquitous situation which has been brought about by this government in its relations with the provincial administrations. The Liberal party took upon itself the role of the guardian of the principles enunciated in the Rowell-Sirois report. They have constantly taken the position that a duty is cast upon them to strengthen and to centralize the financial position of the federal government and to redistribute the tax wealth of the country by providing provincial governments with fiscal equivalents and other funds in order to carry out certain joint shared programs. Time will not permit me to quote the statements of the ministers of this government to indicate that this is so.
[DOT] (9:40 p.m.)
When we refer to medicare, the hospital plan, the old age security plan, the pension plan, the Canada Assistance Plan and so on, we are not discussing here the merits of these plans. They are the law of the country, as we have been reminded by the government time and again. Considering that the federal government pushed the provinces into these various schemes it is late in the day for it to say, "We are going to withdraw."
I have no doubt about what happened, Mr. Speaker, The Minister of Finance and officials of the federal department took a look at a five year projection of the costs of these plans and they drew certain conclusions. It is obvious that they said to themselves, "We have started this; we think the provinces will be hooked in the habit. Now we will back out and leave them to it." There is no doubt, on my reading of section 8 of the Medical Care Act, that the federal government made an unequivocal commitment, or guarantee in one


form or another, to pay 50 per cent of the cost of this particular program.
Replying to the hon. member for Winnipeg North Centre (Mr. Knowles) yesterday, the Prime Minister made this unconditional statement, which is found on page 2362 of Hansard in the left hand column:
The hon. member should realize that the law says in five years we will get out of it.
That is an unequivocal, categorical statement. There is no indication that the fiscal points which will be passed to the provinces will in fact cover this 50 per cent. I think this is most unconscionable and inequitable treatment by a government which insisted that the provinces enter into these schemes. Indeed, it made it difficult or almost impossible for the provinces to exercise the financial self determination which provinces ought to exercise. Now the federal government proposes to withdraw from the schemes. If I had no other reason, that reason alone would prompt me to vote for the amendment and the subamendment before this house. I fail to see how any intelligent and reasonable member in the house who has the interest of his country at heart can fail to do anything other than vote against the budget which this government has brought down.


Mr. Speaker:: Order, please. The time being 9:45 o'clock p.m. it is my duty pursuant to section 4 of standing order 58 to interrupt these proceedings and forthwith put the question on the amendment to the amendment.
The house divided on the amendment to the amendment (Mr. Saltsman), which was negatived on the following division.
[DOT] (9:50 p.m.)
++YEAS
Messrs:
Alexander	Fortin
Asselin	Gilbert
Baldwin	Godin
Beaudoin	Gundlock
Bell	Hales
Bigg	Harkness
Brewin	Hees
Broadbent	Howard (Skeena)
Burton	Howe
Caouette	Knowles (Norfolk-
Carter	Haldimand)
Coates	Knowles (Winnipeg
Code	North Centre)
Comeau	Lambert (Edmonton
Crouse	West)
Dinsdale	Laprise
Downey	La Salle
Dumont	Latulippe
Fairweather	Lewis
Flemming	Lundrigan
November 5/ 1968	COMMONS	DEBATES	2467
		Division


[Stage Direction]
MacEwan	Ny strom	Hogarth	OttoMaclnnis	Orlikow	Honey	OuelletMaclnnis (Mrs.)	Paproski	Hopkins	PennerMacLean	Peddle	Howard (Okanagan	PerraultMacRae	Peters	Boundary)	PilonMcCleave	Ricard	Hymmen	PortelanceMcCutcheon	Ritchie	Isabelle	PringleMcGrath	Rodrigue	Jamieson	ReidMcIntosh	Rondeau	Jerome	RichardMcQuaid	Rose	Lachance	RichardsonMarshall	Saltsman	Laflamme	RobertsMather	Schreyer	Lang (Saskatoon-	RobinsonMatte	Simpson	Humboldt)	RochonMazankowski	Skoreyko	Langlois	Roy (Timmins)Monteith	Southam	Laniel	Roy (Laval)Moore	Stanfield	Leblanc (Laurier)	SerreMoores	Tetrault	LeBlanc (Rimouski)	SmerchanskiMuir (Cape Breton-	Thomas (Moncton)	Lefebvre	Smith (Northumberland-The Sydneys)	Thompson (Red Deer)	Legault	Miramichi)Muir (Lisgar)	Valade	Lessard (LaSalle)	Smith (Saint-Jean)Nesbitt	Winch	Lessard (Lac-Saint-Jean) Stafford	Nielsen	Woolliams	Lind	StanburyNoble	Yewchuk-83.	Loiselle	Stewart (Okanagan-Nowlan	Macdonald (Rosedale)	Kootenay)NAYS	MacEachen	St-PierreMacGuigan	SulatyckyMessrs:	Mackasey	SullivanAllmand Anderson Andras Barrett Basford Bechard Beer Benson Blair Blouin Borrie Boulanger Breau Brown	Crossman Cullen Cyr Davis Deachman Deakon Douglas Drury Duquet Durante Emard Ethier Forest Forget	McBride Mcllraith McNulty Mahoney Major Manceau Marchand (Langelier)	Thomas (Maisonneuve) Tolmie Trudeau Trudel Turner (London East) Turner (Ottawa-Carleton)Marchand (Kamloops-Cariboo) Mongrain Morison Murphy O'Connell Olson	Wahn Watson Weatherhead Whelan Whicher Whiting Yanakis-127.Buchanan Caccia	Foster Gendron	Mr. Speaker: I declare the amendment to	Cadieux (Labelle)	Gillespie	the amendment lost.	Cafik Cantin Chretien	Givens Goode Gray	Pursuant to standing orders this house stands adjourned until 2.30 tomorrow after-	Clermont	Groos	noon.	Cobbe Comtois Corbin	Guay (St. Boniface) Guay (Levis) Guilbault	It being ten minutes after ten o'clock the house adjourned, without question put, pur-	Cote (Richelieu)	Haidasz	suant to standing order.	
Wednesday, November 6, 1968