1968-02-19

Mr. Speaker:: It is my duty to inform the house that consequent upon the notification of a vacancy in the representation given in this house on Friday, February 16, 1968, by the hon. member for Gaspe, and pursuant to section 10 of the House of Commons Act, I have addressed my warrant to the Chief Electoral Officer for the issue of a new writ for the election of a member for the electoral district of Matapedia-Matane.



FINANCE


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I should like permission of the house to table two copies in English and French of the report of the Auditor General to the House of Commons for the fiscal year ended March 31, 1967. As the house is aware, the Financial Administration Act requires that the report of the Auditor General be laid before the house on or before December 31 or, if parliament is then not in session, within 15 days after the commencement of the next ensuing session.
The Auditor General has asked me to express his apologies to members of the house for the delay which resulted from circumstances over which he had no control.


Mr. Speaker:: Has the minister leave to table the report?


Some hon. Members:: Agreed.



PUBLIC ACCOUNTS


[Stage Direction]
On the order: Government notices of motions :
February 16-The Minister of National Health and Welfare:
That the Public Accounts Volumes I, II and III for the fiscal year ended March 31, 1967, laid before the House on January 22, 1968, be referred to the Standing Committee on Public Accounts.
Mr. Speaker:: Pursuant to section 2 of standing order 21, this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



QUESTIONS

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

Mr. Reid: 1.	How much did the R.C.M.P. pay for their recently purchased horse farm?
2.	Did the R.C.M.P. contact the N.C.C. about the possibilities of using greenbelt farm property for this purpose, and (a) if so, what answers did they receive (b) if not, for what reasons?


Hon. L. T. Pennell (Solicitor General):: 1.	$30,000.
2.	Yes. N.C.C. offered to seek authority to lease acreage in the western green belt to the R.C.M.P. However, it was decided that from a standpoint of long range cost to the R.C.M.P., it would be advantageous to purchase rather than lease the required acreage.


REMARRIAGE OF WIDOWS RECEIVING ANNUITIES
Mr. Bell (Carlelon): 1.	During each of the last three fiscal years, how many widows of public servants or of retired public servants have forfeited entitlement to annuity under the Public Service Superannuation Act by reason of subsequent remarriage?
2.	In each such year (a) what was the total annual dollar value of all annuities so forfeited by such widows (b) were any calculations made of the actuarial benefit to the Fund by reason of such forfeitures due to remarriage of the annuitant (c) if so, what did such calculations reveal?
3.	In the calculation of the actuarial basis of the Public Service Superannuation Fund, was any consideration given to the presumed rate of remarriage of widowed annuitants?
4.	If so, upon what precise basis was this calculated?
5.	What would have been (a) the actual loss during the last three fiscal years (b) the actuarially calculated loss, to the Fund, if the pension annuity to a widow of a public servant or of a retired public servant were to be vested in her without penalty or loss resulting from her subsequent matrimonial activities?

February 19, 1968
Questions
6.	(a) Would this require any Increase In contributions to the Fund by public servants (b) if so, by how much?


Mitchell William Sharp: 1. The number of widows who have forfeited entitlement to annuity under the Public Service Superannuation Act by reason of their remarriage is:
	Number of Widows who
Fiscal Year	Remarried in Each Year
1964-65	73
1965-66	75
1966-67	104
2. (a) The	total annual dollar value of the
annuities forfeited by the widows referred to in 1 above are:
Fiscal Year	Total Dollar Value
1964-	65
1965-	66
1966-	67

(b) Yes. (c) See answer to question 5.
3.	Yes, the actuarial basis of the Public Service Superannuation Act includes provision for the remarriage of widowed annuitants.
4.	The rates of remarriage, varying by age and duration from widowhood, adopted for purposes of the last two actuarial valuations were developed from the experience during the period from January 1, 1940, to December 31, 1957, of widows awarded pensions from August 4, 1914, to December 31, 1957, under the Pension Act and previous government administrative orders.
5.	If widows' allowances were payable after remarriage the loss to the account in respect of the three fiscal years ending March 31, 1967 would have been: (a) Approximately $1.5 million on a cash basis in respect of all widows' allowances not paid because of remarriage, (b) Approximately $2,600,000, expressed in terms of actuarial value in respect of widows who remarried during this period.
6.	(a) Yes. (b) The required increase in contributions and government credits combined is estimated at approximately 0.1 per cent of salaries.


STAFF HOUSING ACCOMMODATION, SPRINGHILL, N.S.
Mr. Coates: 1.	Has any action been taken to develop new housing in the Springhill area to provide accommodation for employees of the Canadian Penitentiary Service who are locating at Springhill, N.S., with the staffing of the Young Offender's Penal Institution?
2.	Has C.M.H.C. initiated any special action that would be of assistance in providing the required housing for the new personnel that will be associated with the Penal Institution in Springhill?


Hon. Judy V. LaMarsh (Secretary of State):: I am informed by the Department of the Solicitor General and Central Mortgage and Housing Corporation as follows: 1. No.
2.	Central Mortgage and Housing Corporation have assured officials of the town of Springhill that the full provisions of the National Housing Act are available to meet the needs of the community. In December 1966 approval was given of a federal contribution of $10,500 for an urban renewal study in Springhill. On November 2, 1967, approval was given of a federal loan of $262,292 to the Nova Scotia Housing Commission for the construction of a 20-unit public housing project in Springhill.


IRON ORE PRODUCTION
Mr. Tucker: What was the total production of iron ore, in dollar value and in tons, in each province of Canada, from January 1 to December 31 in each year, from 1960 to 1967 inclusive?


Mr. Jean-Charles Caniin (Parliamentary Secretary to Minister of Trade and Commerce):: 


PRODUCERS' SHIPMENTS OF IRON ORE, BY PROVINCES
[Stage Direction]
Newfoundland	Quebec	Ontario	British Columbia	CanadaYear	Tons	$	Tons	$	Tons	$	Tons	$	Tons	$1960	
7,611,365	54,673,717	7,457,971	61,752,485	5,325,197	48,399,442	1,156,297	10,256,879	21,550,830	175,082,5231961	
7,611,340	59,889,125	5,639,931	53,627,608	5,772,664	62,350,773	1,335,068	12,082,541	20,359,003	187,950,0471992	
7,986,910	67,753,153	11,163,982	112,444,643	6,414,936	64,479,510	1,793,848	18,326,911	27,359,676	263,004,2171963	
9,683,004	99,601,987	11,650,787	122,800,862	6,749,617	70,033,690	2,060,241	20,746,424	30,143,649	313,182,9631964	
12,763,575	137,038,680	15,512,916	161,880,175	8,046,769	85,613,354	2,002,562	20,419.487	38,325,822	404,951,6961999	
14,500,495	156,888,970	14,817,820	140,469,624	8,475,218	94,209,236	2,165,403	21,497,031	39,958,936	413,064,8611"6	
16,546.189	188,603,259	13,848,441	130,348,844	8,144,289	91,700,740	2,151,804	21,006,240	40,690,723	431,659,0831967 (Est.)....	16,270,000	203,874,800	14,518,000	135,474,839	8,401,244	95,188,494	2,114,177	20,704,809	41,303,421	455,242,942
(Est.)-Estimate.
Beginning with 1961, by-produets iron sinter or calcined pyrite, used as a raw material in iron or steel plants, have been included.
February 19, 1968	COMMONS DEBATES
Questions
[Stage Direction]
February 19, 1968
Questions

['Mr. Speaker, while an answer is being prepared, as a supplementary question may I ask whether the Canadian government has ascertained through its various channels whether there has been any firm commitment by the government of North Viet Nam to the effect that it is prepared to begin negotiations and consideration of de-escalation of military activities once the bombing of North Viet Nam has ceased?']
Mr. J. C. Munro (Parliamentary Secretary to Minister of Manpower and Immigration):: The answer to this question is as follows:
1.	(a) Calendar backs were imported from the U.S.A. for 4,606 of the 5,606 calendars in question, at a cost to the Canadian company of $350.75. (b) 1,000 calendars were completely made in Canada at a cost of $404.25. For the balance of the calendars (4,606) all embossing, die cutting, finishing, printing date pads and envelopes were supplied from Canadian manufacture at a cost of $1,403.01.
2.	The initial order involved 1,000 calendars at a total cost of $404.25. The second order was for 4,606 calendars at a total cost of $1,753.76. Price quotations appeared reasonable for these purchases and therefore formal tenders were not invited.
3.	The calendars were purchased as a convenient reminder to employers about the services of Canada manpower centres.



Mr. Skoreyko: 1.	Who is in charge of housing facilities for the Canadian Armed Forces personnel in Soest, Germany?
2.	What procedures are followed to insure adequate housing facilities for Service personnel and their families, what are the rents paid, and are the rents checked to see that they are fair?
3.	What medical services, doctors, hospitals, etc., are provided for Service personnel and their families, by whom and at what cost to the family unit?
4.	What facilities are provided to the Canadian personnel overseas by Maple Leaf Services, and does Maple Leaf Services operate at a profit or a loss?


Hon. Leo Cadieux (Minister of National Defence):: 1 and 2. The commander, Canadian Forces Base, Soest, Germany, who administers a housing office to assist Canadian servicemen to obtain accommodation of a suitable standard. A high percentage of the off-base economy housing occupied by Canadian families is retained within the Canadian inventory
and passed on to incoming families. However, the housing staff are continually seeking suitable accommodation on behalf of the servicemen. When a new acquisition is available for rental the housing supervisor assesses the rental value and negotiates a fair rental price with the landlord. This has served to control rental prices and prevent servicemen from bidding against one another for accommodation. Off-site accommodation is classified as follows: Class A-Good accommodation, well furnished, all normal facilities. Maximum rent $27-$30 per room. Class B-Average accommodation, suitably furnished, normal facilities. Maximum rent $24-$27 per room. Class C-Poor accommodation, adequately furnished, basic facilities. Maximum rent $18-$24 per room.
3.	Service personnel are provided medical care by their unit medical officers. When necessary, x-ray, laboratory investigations or minor hospital care can be provided within the garrison area by the medical reception station. Definitive hospital care, including major surgery, is carried out at the British military hospital, Iserlohm, where approximately half the professional and nursing staff is provided by the Canadian Forces medical services. In so far as dependants are concerned, medical care is provided at the Soest dependants' clinic which is staffed by Canadian Forces medical service personnel and civilian registered nurses employed by the Department of National Defence. In addition a duty medical officer is on call at all times for emergencies, and a 24-hour ambulance service is available. Complete general hospital inpatient facilities are provided at the British medical hospital, Iserlohm. However, dependants have a choice of accepting the care provided by the department or seeking medical care from civilian German doctors and undergoing hospitalization in German hospitals. There is no charge for care received by a Canadian serviceman from the Department of National Defence medical facilities. Charges for dependants are levied in accordance with a scale provided by the group surgical medical insurance plan. A married serviceman without children pays $1.36 monthly for the GSMIP and $3.25 for the outside Canada coverage plan. A married serviceman with a family pays $2.04 monthly, plus $5.20. A serviceman with this coverage is normally left with only a small portion of the hospital charges, if any, for the hospitalization of a dependant.

February 19, 1968

4.	Maple Leaf Services operate the following facilities: 10 junior clubs (corporals and below); One mobile canteen; Two town clubs; Three Groceterias (patterned after supermarket style found in Canada); One milk delivery service (to married quarter areas); Three family shops (general range of family clothing); One laundromat; One holiday shop (general range of sports equipment, etc.); One gift shop; One dependants' restaurant.
Maple Leaf Services is a corporate body incorporated under part II of the Companies Act and as such is managed in accordance with sound business practices and does not operate at a loss. Funds are generated to the degree required to meet overhead expenses, development and improvement of required services, and to provide funds to assist in the development and provision of recreational facilities in the interests of the well-being of servicemen and their dependants.


SUGAR IMPORTS FROM CUBA
Mr. Hales: 1.	Is Canada importing sugar from Cuba and, if so, how much was imported in each of the years 1963, 1964, 1965, 1966 and 1967?
2.	What percentage is this of our total import of sugar?


Jean-Charles Cantin: 1 and 2. Canadian imports of raw sugar from Cuba and the percentage they represent of total Canadian imports of raw sugar for 1963, 1964, 1965, 1966 and January to November 1967 (the latest import statistics available) are as follows:
Year
1964
1966
1967	(Jan.-:
Quantity
cwt.
1,483,143 5,600 1,445,737 1,441,167 .)	1,541,806
% of
Total Imports of Raw Sugar 9.0 0.04 7.9
8.5
8.5


SLIPWAY RECONSTRUCTION, HIBBS COVE, NFLD.
Mr. Tucker: Has the government any plans to reconstruct the slipway at Hibbs Cove, Conception Bay, Newfoundland, this year?


Hon. G. J. Mcllraiih (Minister of Public Works):: Yes.
Questions


REPORT OF PRINTING BUREAU
Mr. McCleave: 1.	Is the Canadian Government Printing Bureau required to table an annual report?
2.	If so, what was (a) the year under review (b) the date of tabling, of the most recently issued annual report?
3.	If not, why did the annual report for 1964 of the Department of Defence Production state on Page 11, "The General Manager of the Printing Bureau reports to the Minister of Defence Production and the Bureau issue its own annual report"?
4.	When may the House expect to receive annual reports for the years since the twelve months last reported?
5.	Can these reports be printed commercially if the Bureau is experiencing serious delays in production?


Hon. C. M. Drury (Minister of Industry):: In so far as the Department of Defence Production is concerned: 1. Section 36 of the Public Printing and Stationery Act, Chapter 226, R.S. 1952, requires that an account be laid before parliament each year by the Department of Public Printing and Stationery.
Order in Council P.C. 1963-1254, dated August 21, 1963 provided for the separation of the publishing and printing sectors of public printing and stationery. Since that time the Queen's Printer has filed an annual report in parliament and, in addition, the Canadian Government Printing Bureau has filed an annual review of its operations.
2.	(a) The year under review was the calendar year 1966. (b) Tabled on February 16, 1968.
3.	See answers to 1 and 2 above.
4.	The annual report of the Canadian Government Printing Bureau for the calendar year 1967 will be available by April 15, 1968.
5.	Yes.


DISTRIBUTION IN ONTARIO OF LEATHER DESK CALENDARS
Mrs. Wadds: For what reasons was the Province of Ontario singled out as the only region to receive, for distribution to industries and businesses in that Province, leather desk calendars supplied by the Department of Manpower and Immigration?


John Carr Munro: Regional directors have the authority to take such action within limited budgets approved for promoting employers' knowledge of the department's services.

February 19, 1968
Inquiries of the Ministry THE BUDGET


INQUIRY AS TO PROBABLE DATE OF PRESENTATION
[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: I should like to direct a question to the Minister of Finance, who has already indicated to the house that he does not intend to present the budget before April 1. Can the hon. gentleman inform the house when we may expect the presentation of the budget?


Mitchell William Sharp: No, Mr. Speaker. I expect this is a decision which will have to be made by the new prime minister.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: May I direct a question to the Acting Prime Minister in the absence of the Secretary of State for External Affairs. Having regard to the films which were shown on C.B.C. television last night depicting ill treatment of prisoners and the suffering which has been occasioned to non-combatants in Viet Nam, I wish to ask the government whether it will consider making representations to all the participants in this barbarous war, particularly to those who, like Canada, are signatories to the international convention regarding the treatment of prisoners and non-combatants, in the hope that these atrocities may be prevented.


Hon. Robert Winters (Minister of Trade and Commerce):: I think in the circumstances all I can do is take the question as notice.


Thomas Clement (Tommy) Douglas: Mr. Speaker, while an answer is being prepared, as a supplementary question may I ask whether the Canadian government has ascertained through its various channels whether there has been any firm commitment by the government of North Viet Nam to the effect that it is prepared to begin negotiations and consideration of de-escalation of military activities once the bombing of North Viet Nam has ceased?



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I would like to direct a question to
[Mr. Munro.l
the Minister of National Defence. In view of reports that two Soviet spy ships have been operating off Canada's east coast, could the minister advise the house whether these vessels were operating in Canadian or international waters?


Léo Alphonse Joseph Cadieux: They were operating in what we consider international waters, Mr. Speaker.


Alexander Bell Patterson: As a supplementary question, in view of the statement by a United States representative that information on this subject had been transmitted by General Allard, and the fact that General Allard has denied the allegation, is the minister instituting an inquiry to ascertain where the information originated?


Léo Alphonse Joseph Cadieux: Mr. Speaker, I had a talk this morning with General Allard, and he told me he had never mentioned that the ships were actually approached by Canadian ships, or taken over. That was the implication. A story had been going around, and actually it was accurate, that an Argus aircraft had taken pictures of the ships while they were being refueled by a supply vessel. General Allard has denied that he ever said this, as correctly stated by the hon. member.



INTERCEPTION AND IDENTIFICATION OF RUSSIAN BOMBERS

[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Calgary North):: Mr. Speaker, this question is for the Minister of National Defence. Has the minister now determined whether the Russian planes which flew off the coast of Newfoundland flew through commercial air lanes?


Léo Alphonse Joseph Cadieux: I have not, Mr. Speaker, but I know they were 60 nautical miles off Newfoundland. That is as far as I can go.


Douglas Scott Harkness: In view of the fact that the commercial air lanes extend from Newfoundland to the United Kingdom surely the minister would be in a position to know whether the Russian planes were in these air lanes, thus endangering commercial air traffic.


Mr. Speaker:: The hon. member for
Cumberland.


Douglas Scott Harkness: Mr. Speaker, I have a further supplementary question for the Minister of Transport. Has the minister looked into
February 19, 1968



this matter to see what infraction of international air agreements, if any, took place as a result of the flight of these Russian planes?


Hon. Paul Hellyer (Minister of Transport):: No, I have not, Mr. Speaker, but in co-operation with the Minister of National Defence I would be pleased to do so. I would be very surprised if they were flying in one of the commercial air lanes. To the extent that information is available, we will check.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. George  I-Iees@Northumberland: Mr. Speaker, may I direct a question to the Acting Prime Minister. In view of the statement by the President of the Privy Council in the house on Friday that he expects that in the very near future the government will be presenting new policies based on the findings of the Watkins report, does the government intend issuing a white paper before these new policies are presented to the house?


Robert Henry Winters: I think that is a matter that remains to be determined, Mr. Speaker. This was simply a report submitted to the government. It does not necessarily set forth the government's views, and won't necessarily be acted upon in this form. It will be a matter for study by the government and a determination after that study has been completed, I would think, as to whether or not there should be a white paper.


Mr. Hees:: As a supplementary question, was the President of the Privy Council expressing the view of the government when he said he expected the new policies, based on the findings in this report, would be presented in the very near future?


Robert Henry Winters: I think that would require a determination of what the very near future is.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I wish to direct a question to
Inquiries of the Ministry the Minister of Fisheries. In view of the statement made last evening by the premier of Newfoundland on a C.B.C. television program, that in his opinion the Russian planes intercepted last week were surveying Atlantic coast waters for possible contamination; and in view of the possibility of such contamination of these waters as a result of the loss of nuclear bombs near Thule, would the minister indicate what steps his department or the government are taking to clarify the matter, particularly because of the tremendous impact that such statements could have on fish consumption and on the entire fishing industry in the Atlantic provinces.


Hon.   K.-J. Robichaud@Minister of Fisheries: Mr. Speaker, I listened last night to the statement by the premier of Newfoundland. He was expressing a personal opinion. So far as the federal Department of Fisheries is concerned, I gave our position on Wednesday, February 7, when I answered a similar question asked by the hon. member for Burnaby-Coquitlam. The situation is the same today as it was when I replied to that hon. member.


Lloyd Roseville Crouse: As a supplementary question, in view of the large research base we have at Halifax I would like to ask the minister has any action been taken to determine whether there is any contamination as a result of this incident?


Mr. Robichaud:: Mr. Speaker, I gave the assurance on Wednesday, February 7, that there was no radioactive contamination and that according to a report from the head oceanographer of the Fisheries Research Board, who had discussed this matter with members of the Atomic Energy Control Board, we had the assurance that there was no radioactivity.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask either the Minister of Fisheries or the Minister of Industry whether a team of experts from Atomic Energy of Canada has been sent to Thule to find out on a first hand basis whether there is any danger of contamination of the adjacent waters which might have an adverse effect on Canadian fisheries, particularly at the Grand banks.


Hédard-J. Robichaud: I am not in a position to answer this question, Mr. Speaker.

February 19, 1968
Inquiries of the Ministry
INDUSTRY	AIRPORTS



REVIEW OF DESIGNATED AREA POLICY RESPECTING ATLANTIC PROVINCES

[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: Mr. Speaker, my question is directed to the Minister of Industry. Is it the intention of the government to review the designated area policy of the Department of Industry in so far as the Atlantic provinces are concerned?


Charles Mills (Bud) Drury: Mr. Speaker, I think the hon. gentleman will recognize that a periodic review is made in respect of all the designated areas as well as the non-designated areas.


Robert Carman Coates: Could the minister be more specific so far as Halifax, Dartmouth, Saint John and Fredericton are concerned? Is any consideration being given to including them?


Charles Mills (Bud) Drury: Mr. Speaker, a review of these particular areas was made as recently as last November.


Robert Carman Coates: Mr. Speaker, may I direct a
supplementary question to the Minister of Finance. Would the minister indicate whether the change of attitude regarding a review of this policy so far as the Atlantic provinces are concerned is in effect only until April 6?



SKIING-FEDERAL REPRESENTATION AT CHAMPIONSHIP MEET IN B.C.

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I have much pleasure in addressing a question to the Minister of National Health and Welfare. In view of the fact that for the first time in Canadian history the top skiers of the world will compete in the du Maurier international world cup championship in Rossland, B.C., the home of Nancy Greene, from March 25 to March 31 inclusive, and in view of the minister's particular interest in physical fitness and amateur sports and the wishes of the people in the district, would the minister consider representing the federal government on this very historic occasion?


Hon. Allan J. MacEachen (Minister of National Health and Welfare):: I would be delighted, Mr. Speaker.



VANCOUVER-CHARGING OF TOLLS ON NEW ACCESS BRIDGE

[Stage Direction]
On the orders of the day:
Hon. E. D. Fulton (Kamloops):: Mr. Speaker, I should like to ask a question of the Minister of Transport. In connection with the new access route which is proposed for the air terminal building at Vancouver international airport-now under construction-is the federal government contemplating the charging of tolls on the new Fraser river bridge that will be involved?


Paul Theodore Hellyer: If you are referring to the Middle Arm bridge from Lulu island to Sea island, it is proposed that this will be part of the over-all toll structure for access to the airport, but this matter is still under negotiation with the provincial government. It could be that they would have a new proposal which, because of their contributing in some way, would make it unnecessary for us to charge tolls on that particular bridge.


Edmund Davie Fulton: In my question I was referring to the new bridge which is to be constructed, and asked whether there will be charges. Is that the bridge to which the minister referred?


Paul Theodore Hellyer: Yes, Mr. Speaker.


Edmund Davie Fulton: I should like to ask the minister whether he will immediately reconsider the government's position in order that the Vancouver international airport may not become the only one in Canada which is subject to tolls in respect of access routes.


Paul Theodore Hellyer: Mr. Speaker, I think it is about the only place in Canada where the provincial and municipal governments are unwilling to carry out the responsibilities which would normally fall within their jurisdictions. The only solution I know of is the one proposed by the government of Canada under my predecessor, namely providing an access road to recover on behalf of the Canadian taxpayers the expenditures involved.


Edmund Davie Fulton: Is the government proposing the acquisition from the province of its interest in one of the existing access approaches in order that tolls may be imposed in respect of that structure as well?


Paul Theodore Hellyer: There is only one access at the moment, and this is the subject of the negotiations currently under way with provincial authorities.
February 19, 1968

Inquiries of the Ministry
EXPROPRIATION ACT	Mr. Speaker: Order, please.



DISCUSSIONS WITH FEDERATION OF AGRICULTURE RESPECTING AMENDMENT

[Stage Direction]
On the orders of the day:
Mr. Jack Roxburgh (Norfolk):: Mr. Speaker, I have a question for the Minister of Justice of which I have given notice. He is not here at the moment, so I will address it to the Acting Minister of Justice. Is the minister giving serious consideration to meeting with the Canadian Federation of Agriculture to discuss ways and means of improving the present Expropriation Act, and has he reached any decision as to how soon this meeting will take place?


Lawrence T. Pennell: have taken notice of the question, Mr. Speaker.



INQUIRY AS TO INCREASED DELIVERY QUOTAS

[Stage Direction]
On the orders of the day:
Mr. E. Nasserden (Rosihern):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. When he met recently with officials of the Canadian Wheat Board did the matter of extremely low delivery quotas in western Canada receive consideration, and can the minister tell us when it is expected that this situation will improve?


Robert Henry Winters: Mr. Speaker, I have no specific information in respect of this question.


Mr. R. R. Souiham (Moose Mountain):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. It is related to the one regarding low quotas put a few moments ago by the hon. member for Rosthern. Did the minister in his discussions with the wheat board receive information with regard to future wheat sales which may result in higher quotas for Canada?


Robert Henry Winters: Mr. Speaker, I could say the report I received is realistic. I told the house before that prospects for the sale of wheat this year are not as good as they were last year. It is a difficult selling market, but in the face of these difficulties the wheat board is making progress.


Richard Russell Southam: I have a supplementary
question, Mr. Speaker. Can the minister indicate what countries may be interested in the sales and what are the possibilities? We have heard the same answer for some time.


Thomas Clement (Tommy) Douglas: have a supplementary question for the Minister of Trade and Commerce. Could the minister inform us whether the wheat board has arrived at an estimate of the total wheat sales in this crop year?


Robert Henry Winters: I said a few days ago at a hearing before a committee of the other place that I expect the total wheat sales this year to be between 350 million and 400 million bushels, but that it will take hard selling and some favourable circumstances to reach the higher figure for which we are striving.


Edward Nasserden: I have a supplementary question for the Minister of Trade and Commerce. In view of the pessimistic report he has given us, does he think he could speed up the final payments on wheat, oats and barley to the producers to enable them to take care of their seeding operations?


Robert Henry Winters: Mr. Speaker, I answered that question last week, but we will expedite the payments as much as we can.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to ask the Postmaster General whether it is the intention of his department to discontinue the Saturday delivery of mail?


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, I think I answered that question some time ago.

On that same occasion, I said that the abolition of mail delivery on Saturday had been recommended by Judge Montpetit and that the department was still studying that recommendation.



REQUEST FOR REPORT ON MEETING RESPECTING ONTARIO REFINERY

[Stage Direction]
On the orders of the day:
Mr. H. W. Danforth (Kent (Ont.)):: Mr. Speaker, in the absence of the Minister of

February 19, 1968
Inquiries of the Ministry Agriculture perhaps I could direct my question to his parliamentary secretary. Would that hon. member indicate whether any progress was made at the joint meeting on Thursday regarding the Ontario sugar refinery problem, and whether a solution is expected in time to permit 1968 contracting?


Mr. Bruce S. Beer (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, it is my information that there will be a meeting of all interested parties tomorrow to pursue this matter further.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I intended to direct a question to the Minister of Finance, who appears at the moment to have vanished into the woodwork. Perhaps his parliamentary secretary will take the question as notice and pass it on. This question arises from a dispatch from Washington which appeared in the local press this week end. It was headed "United States steps up drive to attract investment capital from abroad". The article outlines efforts being made by United States authorities to attract capital from abroad to the United States to safeguard its gold reserves. Has the government taken cognizance of this program on the part of United States authorities and its possible stimulating effect on the outflow of scarce Canadian capital? Does the government propose to do anything about this?


Hon. E. J. Benson (President of the Treasury Board):: The Minister of Finance will be making a statement later on this afternoon, Mr. Speaker. I am not sure whether this particular matter will be referred to. If it is not I will take the question as notice on his behalf so he may answer tomorrow.



MANPOWER


[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: Mr. Speaker, my question is for the Minister of Manpower and Immigration, but in his absence perhaps the Acting Prime Minister will take

it as notice. Has he received the report to the Canadian people on manpower development by the Canadian Association for Adult Education? In light of this report will the government give serious consideration to amendments to the present manpower program?


Robert Henry Winters: I will be glad to take the
question as notice.



DOMINION-PROVINCIAL RELATIONS REPORTED STATEMENT BY FINANCE MINISTER RESPECTING AID TO ATLANTIC PROVINCES

[Stage Direction]
On the orders of the day:
George Harris Hees: I
should like to direct a question to the Acting Prime Minister. Was the Minister of Finance expressing the views of the government when he said in Moncton on Saturday that government plans for assistance to the Atlantic provinces are too independent of each other? If so, why has this lack of co-ordination been allowed to persist, and does the government have any plans for correcting it?


Robert Henry Winters: Mr. Speaker, the hon. member is reporting on something I am not aware of. I have not seen the report. I would have to discuss this matter with the Minister of Finance.


George Harris Hees: A supplementary question, Mr. Speaker. Would the minister give an answer tomorrow?


Robert Henry Winters: Either I or somebody else, presumably, will.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of National Defence. Are claims for damages caused to buildings by sonic booms from military aircraft referred to the Department of National Defence for compensation or, if not, to which department of government are they referred?


Léo Alphonse Joseph Cadieux: To the Department of National Defence, Mr. Speaker.
February 19, 1968



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-stoke):: Mr. Speaker, my question is for the Minister of Agriculture. In his absence the minister's parliamentary secretary might have an answer. Will the minister inquire into the recurrent delays in processing milk subsidy payments to dairy farmers, delays which cause acute difficulties to those farmers who have payments of their own to meet?


Bruce Silas Beer: Mr. Speaker, in the absence of the Minister of Agriculture I will be happy to bring this matter to the attention of the department and provide an answer for the hon. member.



EXPO '67 REQUEST FOR STATEMENT ON FEDERAL INVOLVEMENT

[Stage Direction]
On the orders of the day:
Robert Carman Coates: Mr. Speaker, my question is for the Minister of Trade and Commerce. Last week the minister indicated to me that he would shortly be making a statement on the financial affairs in so far as Expo '67 is concerned. I wonder when we might expect this statement.


Robert Henry Winters: Mr. Speaker, I have been discussing this matter with the officials of Expo '67. I hope shortly to be able to make a statement. It will be in an unaudited form, but I presume that will be acceptable to the hon. member.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. A. D. Alkenbrack (Prince Edward-Len-nox):: Mr. Speaker, my question is for the Solicitor General. Early in the month of January Detective C. R. Jeary was murdered, while on duty, by bank robbers who were thwarted by him in their plan to rob a bank in Greenfield Park, province of Quebec. Can the Solicitor General tell the house whether these murderers have been apprehended?


Mr. Speaker:: Order, please. The question should be placed on the order paper.
Inquiries of the Ministry HEALTH AND WELFARE



PAYMENT OF COMPENSATION TO PARENTS OF THALIDOMIDE CHILDREN

[Stage Direction]
On the orders of the day:
['Mr. Speaker, I shall take this question as notice and I will refer it to the minister.']
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. In view of the fact that the manufacturer of thalidomide in Great Britain has announced that it will pay compensation to the families of children born deformed as a result of the use of that drug, will the minister take up with the Canadian manufacturer the possibility of its paying compensation in a similar way to Canadian families?


Mr. Speaker:: Order, please. Perhaps the hon. member would also want to put that question on the order paper.



[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs, but in the minister's absence I direct it to his parliamentary secretary. In view of the very heavy civilian casualties in Viet Nam and the need for massive and immediate hospital facilities and medical supplies, will the government take emergency action to help the sick and wounded in this disaster area?


Mr. Gerard Pelletier (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I shall take this question as notice and I will refer it to the minister.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: Mr. Speaker, my question is to the Minister of National Defence. Could the minister tell the house whether he received this morning telegrams from the premier of Prince Edward Island and the mayor of the town of Summerside requesting an urgent meeting with himself and other cabinet ministers later this week?
6868	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest to the hon. member that it is not good form to simply ask whether a telegram has been received.


David Samuel Horne MacDonald: Perhaps I could rephrase my question, Mr. Speaker, and ask the Minister of National Defence if he has informed the premier and the mayor of Sum-merside whether they could have such a meeting this week, at which they might consider the future of the Canadian forces base at Summerside.


Léo Alphonse Joseph Cadieux: I have not so informed them, Mr. Speaker, because I have not yet received such a request.


David Samuel Horne MacDonald: Mr. Speaker, a few moments ago the Minister of National Defence indicated that communication perhaps was not functioning too well between himself and the premier of Prince Edward Island. I wonder whether he could assure the house that no steps have yet been taken which would permanently affect the future of the Canadian forces base in Summerside.


Léo Alphonse Joseph Cadieux: No steps have been taken yet.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. P. V. Noble (Grey North):: Mr. Speaker, I should like to direct this question to the Minister of Finance. Will the minister indicate to the house when he might consider amending the interest rate on loans pertaining to small businesses, so that applications for loans by these people might be given favourable consideration?


Mr. Speaker:: Order, please. It seems to me this is a repetition of a question asked last week.



MANPOWER


[Stage Direction]
On the orders of the day:
Mr. Arnold Pelers (Timiskaming):: Mr. Speaker, my question is directed to the parliamentary secretary to the Minister of Manpower and Immigration. Has a decision been reached as to the supervisory jurisdiction for

DEBATES	February 19, 1968
the tri-town and Sturgeon Falls manpower centres?


Mr. Speaker:: Order, please. I suggest to the hon. member that this question should be placed on the order paper.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Mr. Bud Germa (Sudbury):: Mr. Speaker, I should like to direct a question to the Minister of Finance. It arises out of certain disturbances over the week end at gasoline retail outlets in the city of Sudbury and is related to a question put to the minister earlier regarding an increase in gasoline prices. At that time the minister said his department was investigating the matter. Is the minister now in a position to make a report to the house regarding the increase in gasoline and fuel oil prices?


Mitchell William Sharp: Mr. Speaker, I have been following the situation with some care. I am not really in a position yet to report to the house. The inquiries are still continuing; it is a very complicated situation.



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, my question is to the Minister of Transport. In view of the great anxiety in Manitoba and the many transfers still taking place from the Air Canada base there, can the minister tell the house what he meant by his recent reference to "alternatives" for the Winnipeg overhaul base?


Mr. Speaker:: Order, please. I suggest to the hon. member that the question as put is not in order.


Louis Ralph (Bud) Sherman: I will rephrase my question, Mr. Speaker. I ask the Minister of Transport whether his department has in its possession new information regarding Air Canada's future plans or possible alternatives for the Winnipeg base.


Paul Theodore Hellyer: Mr. Speaker, we have up to date information at all times. I did not think it would really be
February 19, 1968

helpful for me to comment further, beyond what I said last week. As a matter of fact even what I said then caused some misunderstanding in the area. I can only reassure my hon. friend that we are making every possible effort to see that the commitment that was made is honoured.


Louis Ralph (Bud) Sherman: A supplementary question, Mr. Speaker. I ask the minister whether he will consider convening at the earliest possible date a meeting of the joint federal-provincial committee that is riding herd on this problem.


Paul Theodore Hellyer: I think there will be a meeting in the not too distant future.


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, in view of the statement of the Minister of Transport that he has up to date information on the problems at the international airport at Winnipeg, would he answer before the end of the month the two questions I have on the order paper, because the problems set out there have been before him now for several months? I know he is diverted by other activities these days.


Paul Theodore Hellyer: It certainly sounds like a reasonable request, Mr. Speaker.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development. Would the minister bring in for first reading a bill setting out the government's proposals for amendments to the Indian Act at this session, so the Indian people might have the opportunity of studying the government's proposals between now and the time of proceeding further with the bill at the next session?


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: That
would be quite impossible, Mr. Speaker, because the fundamental basis of the changes is being discussed with the Indian people over a period of two and one half months beginning about March 1, before the bill is printed. I hope then to have the bill printed and presented to parliament, and it will then have to be again discussed with the Indians after printing.
Inquiries of the Ministry


Mr. Frank Howard (Skeena):: Mr. Speaker, I have a supplementary question for the Minister of Indian Affairs and Northern Development. Would the minister be prepared to make available a schedule of the times and places of these meetings to which he referred, and those who will be participating in this examination prior to the introduction of the bill?


Arthur Laing: I think that would be fair enough, Mr. Speaker.


Mr. Erik Nielsen (Yukon):: A further supplementary question, Mr. Speaker. Would the minister also, following the precedent set by himself and his colleague the Solicitor General, distribute to members of parliament the discussion draft which will be distributed to the Indian people and will form the basis of these discussions?


Arthur Laing: This would also appear to be reasonable, Mr. Speaker.



FINANCE


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, I should like to direct a question to the Minister of Finance. Could the minister advise the house whether the increase in the bank rates from 6 per cent to 7 per cent has attracted any appreciable flow of funds into Canada?


Mr. Speaker:: Order, please. I think this question is much too wide in scope to be asked at this time. The hon. member is asking for information which in my view should be given by the minister by way of a statement on motions.



INDUSTRY


[Stage Direction]
On the orders of the day:
Frank Howard: I should like to direct a question to the Minister of Industry and ask him whether any steps are being taken to alter the rules under the designated area program of his department in order to take into account the factor of seasonableness of industry in one-industry areas.


Charles Mills (Bud) Drury: Mr. Speaker, at the outset of the program unemployment was related to seasonality.

February 19, 1968
Inquiries of the Ministry However, in view of the many representations which were received on the inadvisability and unfairness of this approach, we switched to an over-all annual look, and this has been the policy of the department since.


Thomas Speakman Barnett: Mr. Speaker, I have a supplementary question for the Minister of Industry. I should like to ask him whether a review has been made of the criteria for designation in the Kelowna-Pen-ticton area in British Columbia.


Mr. Speaker:: Order, please.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Minister of National Revenue. In view of the statements made some time ago by the Minister of National Health and Welfare, I should like to ask the minister how he can justify the inclusion for income tax purposes of gratuities paid to retired miners.


Hon. Jean Chretien (Minister of National Revenue):: Mr. Speaker, I should like to take that question as notice and I will answer the hon. member tomorrow.


Malcolm MacInnis: Mr. Speaker, I rise on a question of privilege. My translating equipment is not working, so would the minister mind repeating his answer?


Mr. Speaker:: Order, please. I might tell the hon. member that the minister indicated he will take the question as notice.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Jean-Eudes Dube (Resiigouche-Mada-waska):: Mr. Speaker, I wish to direct a question to the Minister of Transport. As the air transport board meets tomorrow to license an air carrier to serve the north shore of New Brunswick, will the minister make sure that modern, daily passenger service is made available from the already established Charlo

airport at Dalhousie and other airports in the area?


Mr. Speaker:: Order. The hon. member is making a representation.



INCOME TAX ACT

[Stage Direction]
The house resumed, from Thursday, February 15, consideration in committee of Bill No. C-193, to amend the Income Tax Act-Mr. Sharp-Mr. Batten in the chair.
The Chairman:: Order. When the committee rose on Thursday, clause 5 was under consideration.
On clause 5-Temporary surtax.


Thomas Speakman Barnett: Mr. Chairman, I realize there has been considerable discussion on clause 5 of the bill, and many of the things I might say about it have already been said, so I do not intend to repeat them at this time. However, I have been looking at the clause rather carefully and it appears to me there is an obvious inconsistency in its drafting. Of course I do not know just where this oversight has taken place, but perhaps the minister may be able to explain it.
I should point out that clause 5 contains part IA, and that immediately below the heading there appear the words "Temporary Surtax". A good deal of publicity has been given to the idea of a temporary surtax, but I find on reading the clause that it appears to have a misleading title because subclause 2 at the bottom of page 4 makes it clear that this is by no means a temporary surtax. The subclause reads:
(2) This section is applicable to the 1968 and subsequent taxation years.
In my view this clause provides for a permanent tax which can only be changed by a further amendment of the act by parliament.
I am drawing this to the attention of the committee and the minister because I believe that somewhere along the line an error must have been made in the drafting of the bill, particularly in view of the emphasis the minister has placed from time to time on this being a temporary surtax. Yet the subclause as drafted makes it quite clear that this is a permanent tax subject only to some future amendment of the legislation by parliament.
I need hardly remind the committee that in the original income tax act this was called a temporary tax for wartime purposes during world war I. Yet all the events that have taken place since then have made it clear that
February 19, 1968

it is not regarded as a temporary tax. Obviously a mistake must have been made in the drafting of the legislation, and I believe it should be corrected by the committee.
In view of this I move:
That clause 5 be amended by deleting from subclause 2 thereof the words "and subsequent taxation years" and substituting therefor the word "year".
This would bring the clause in line with the subheading "temporary surtax".
[DOT] (3:20 p.m.)


Mitchell William Sharp: Mr. Chairman, first of all I should like to question whether this amendment is in order under the rules of the house. It does not affect the level of tax for the year 1968, of course, but it does seem to me to affect the balance of ways and means for any period after December 1, 1968. Therefore it would be beyond the rules as I understand them.


Mr. Knowles:: Mr. Chairman, in the light of what the minister has just said on the point of order he has raised, it would appear that he regards this new clause as one that is going to impose this taxation for all time. It seems to me that the point raised by my hon. friend from Comox-Alberni is well taken, namely, that the legislation we are passing should be consistent. It should hold together and not just make nonsense.
Here we have a new section entitled "temporary surtax". The minister says we cannot change that part of it that makes it permanent because that would upset the balance of ways and means in 1969, 1970, 1971 and so on. It seems to me that at some point in this discussion we have to get it clear-and we have to say so-whether this taxation is temporary or permanent. In effect the minister has said that he does not want to accept the amendment because he wants the tax to be permanent.


Mitchell William Sharp: Mr. Chairman, I have no hesitation in arguing the main point that has been made in this amendment, but I do not think I should do so until you have made a ruling whether the amendment that has been moved is within the rules of the house.


Herman Maxwell Batten: Order. I should like to point out to the committee that the amendment as moved by the hon. member for Comox-Alberni appears to the Chair to reverse a decision already taken by the committee. On November 30 the resolution was introduced and first reading was given to the bill on
Income Tax Act
December 18. The first paragraph of the resolution commences with the words:
That for the 1968 and subsequent taxation years-
Paragraph 2 begins with these words:
That for the taxation years commencing after November 1968-*
The amendment moved by the hon. member for Comox-Alberni would appear to be contradictory to the resolution already passed. Therefore I would have to rule it out of order.


Thomas Speakman Barnett: I am not going to question your ruling, Mr. Chairman, though since you have drawn attention to the terms of the resolution I suggest that had the minister been prepared at this stage to make his bill consistent and to adopt and move the amendment I have just proposed it might well have been in order. However, the minister appears to indicate no interest at all in removing the inconsistency in the bill in this regard, and by making the statement he did on the point of order he has in effect confirmed his intention to make this tax permanent.
I should like to remove this inconsistency in another way so as to bring the provision more in line with the resolution passed earlier by the house. May I again refer to the heading to the amending part of clause 5 where following the words "Part 1A" the words "temporary surtax" appear. If it were the intention of the minister to impose a temporary tax and to bring in a bill to do so, then we could have argued that point on its merits. On the other hand, the bill as drafted and, indeed, Mr. Chairman, as you have pointed out, the resolution itself indicates that the proposal is that there be a permanent tax. Obviously the sequence of events makes the phrase "temporary surtax" redundant.
Certainly it would be within the minister's rights to stand up and state that it is his intention as Minister of Finance, if he remains in that position, at some later time to introduce a further amendment to the bill. But I would suggest that would be merely a statement of personal intent on his part or on the part of the government and at most could not be regarded as anything more than temporary.
Quite wide publicity has been given to the idea that this tax is temporary. Indeed, I heard it referred to in those words only yesterday or the day before on a C.B.C. national newscast. It appears that this is nothing more nor less than a piece of window dressing on the part of the Minister of Finance. He is

February 19, 1968
Income Tax Act
quite at liberty either in the house or anywhere across the country to peddle the propaganda of the Liberal party. After all, we are all politicians and consider ourselves free to espouse any particular cause we wish or to indicate our intentions in this manner. However, I suggest it is quite another thing to introduce the propaganda of a political party into a piece of legislation to be enacted by the house. As the phrase stands in the legislation, and the minister has just confirmed this, it is a piece of misleading propaganda and I think it should be removed forthwith. Therefore, Mr. Chairman, I move:
That clause 5 be amended by deleting where it appears immediately following words "Part IA" the word "temporary".
[DOT] (3:30 p.m.)


Mitchell William Sharp: Mr. Chairman, I assure members of the committee that it is the intention of the government that this surtax be temporary. If the opposition wants to make it permanent it will help to do that by taking the word "temporary" out of this wording.


Some hon. Members:: Oh, oh.


Mitchell William Sharp: I have no particular objection to the removal of the word, though perhaps I should explain the sense in which this surtax is temporary. The surtax was designed not to affect the revenue of the provinces and to give us, the federal authority, the full benefit. I fully expect, however, that we shall have to discuss with the provinces taxation reform and the incorporation of all our taxes, whether federal or provincial, in a new tax structure. We shall be bringing down our views on this matter this coming spring, I hope.
As I said previously, this surtax is not intended to be a permanent feature of our taxation system. I am not suggesting by that statement that we will not need revenue which is the equivalent of this revenue; I am only suggesting that this surtax is intended to be temporary. It may become incorporated in a new tax structure in which there will probably not be a surtax at all.


Thomas Speakman Barnett: Mr. Chairman, the minister has been contradicting himself on the one hand and confirming my remarks on the other hand. I have no objection to his announcing, as Minister of Finance, his objective but I point out it is a matter of public knowledge that the present government, in the technical sense, will be far more temporary than this piece of legislation. It is all very well for the Minister of Finance to state his present intentions, but they fool no one.

We all know he will not be Minister of Finance for long or, in any event, that he hopes not to be. In the technical sense, if he continues to be responsible for finance it will be in a different manner. His statement of intent is all very well and good but in my view it does not alter my argument. I submit that a misleading phrase ought not to be included in the legislation.
The minister spoke about the tax being made permanent. In this connection I might point out it is a matter of record that I first sought to rectify what I considered to be his error of judgment. I said that until parliament takes a different course from that being taken at the present moment I would oppose putting into law a measure such as this.


Mitchell William Sharp: I do not think that the committee intends, by an amendment of this kind, to make the surtax permanent. Yet it seems that by removing the adjective "temporary" members of the hon. member's party and of other opposition parties want to make this surtax permanent. I do not. I think it should be temporary and it will be replaced in due course. Whatever the hon. member's intention may have been, I suggest that the proposed amendment can only backfire on those who have made the proposal.


Stanley Howard Knowles: The minister cannot get away with that statement. He said he does not want this surtax to be permanent. If that is so he could have worded the legislation so that it would not be permanent.


Some hon. Members:: Hear, hear.


Mitchell William Sharp: Mr. Chairman, I think it is in accordance with good practice to have taxes of this kind remain in effect until they are withdrawn or amended. If the hon. gentleman will examine the matter he will see that the tax could not be put on just for the taxation year 1968 because if we were in the middle of our tax reform proposals at the end of 1968 we should face a most difficult situation. We looked at this question carefully and it seemed to us that we should enact this tax in such a way that it would remain in effect until amended. There is no other satisfactory way of bringing this tax forward, except to say that it is for two years. But that does not make it any better or more acceptable. It seems better from the administrative point of view to have the tax in its present form. I see no satisfactory alternative. Certainly the first alternative suggestion that was made, that the tax should be for the taxation year 1968,
February 19, 1968

would have introduced into taxation administration most difficult problems, and that is why we did not employ that method. We finally concluded that it would be best to enact it for an indefinite duration and to indicate by the heading and otherwise that it is intended to be temporary.


Alexander Bell Patterson: We have heard the minister say it would be difficult from the administrative viewpoint to make this tax applicable for one year. Nevertheless I suggest that in applying this tax the government will inconvenience many who will find it difficult to meet the increased tax. Had the first amendment which the hon. member for Comox-Alberni moved been accepted we would have supported it. We recognized from the reference in the legislation to "subsequent years" that the tax could be imposed in perpetuity. I agree with the hon. member for Comox-Alberni that it is contradictory for the government to enact a tax which will apply to 1968 and subsequent years and then claim it is only temporary.
We shall not fall into the trap set by this amendment. We do not want to help the government to sell this tax to the public. To prevent people saying that the opposition insisted on deleting the word "temporary" and therefore making the tax permanent we prefer to have the word "temporary" left in the legislation. We therefore oppose the amendment of the hon. member for Comox-Alberni.
[DOT] (3:40 p.m.)


Frank Howard: Mr. Chairman, there are a variety of offices in the cabinet in which the word "general" is used-Attorney General, Solicitor General, Receiver General and the like. After reading the bill and after listening to the Minister of Finance, and comparing his words with what the hon. gentleman has said on other occasions it seems to me we should change the name of his office to deceiver general. I say this because he has set out precisely to deceive the Canadian public.
It seems to me fairly obvious that the minister is acting in a deceptive way in trying to explain the intentions of the government with respect to this tax and that he is also showing clearly that he is disposed to treat his Bay street and corporate friends in a different manner from the way he intends to treat the general public. A couple of years ago he and the government introduced a special levy on corporations called a special refundable tax. The refunds carried interest and presumably
Income Tax Act
the tax was levied for a purpose similar to that of the surtax with which we are now dealing, namely, to help control inflation.
I point out that in the special tax proposal affecting corporations it was spelled out, because corporations are so friendly to the minister and undoubtedly he will be looking to them in the next week or two, if he has not done so already, to see whether he can find some sustenance to maintain an effective campaign, that the special tax was to apply only for a certain specified period and that it would be paid back with interest. The paying back with interest was another aspect of that tax. The first was that the period in which the special corporation tax was to be levied was spelled out precisely in the act; no subsequent taxation was involved. The minister guaranteed that his buddies in the corporate world would not be liable to pay the tax on an open-end basis. However, when it comes to dealing with the wage earners, the farmers and the ordinary citizens of this country the minister comes up with the concept that this special tax is to be imposed on a permanent basis.
The other aspect, as has been pointed out by my hon. friend from York South and my national leader, the hon. member for Burna-by-Coquitlam, was that the special tax applicable to corporations was to be repaid after the government had kept the money for a certain period of time. But when it comes to the special tax levied on the people of this nation the minister has no intention of giving it back either with or without interest; it is to be made permanent.
It is noteworthy that the hon. member for Fraser Valley at least told the committee he would have supported the original amendment moved by my hon. friend from Comox-Alberni, which would have made the tax applicable only to this current year. That is what the minister said would happen when he made a public announcement about this matter. I should also like to point out that when the hon. member for Comox-Alberni moved that amendment he indicated clearly what his intention was, and his subsequent amendment was put forward with the idea of finding out from the minister precisely what intention the government has in mind. However, if there is any doubt in anyone's mind about the attitude taken toward the whole tax structure as reflected in this clause he should pay attention when the vote is taken and see who votes for or against this taxing provision in its entirety. I would be

February 19, 1968
Income Tax Act
interested to see where the hon. member for Fraser Valley stands on that issue. I do not think the hon. member for Fraser Valley has any question of privilege to raise or anything else to talk about. If he has a question of privilege he should raise it at the appropriate time. He may not be as impatient as I am but then, of course, I am not as consistently friendly to the government as he is.


Alexander Bell Patterson: The record will show.


Frank Howard: If the hon. member wants to talk about the record I shall be tempted to deviate from the purpose of my remarks. As for my intentions, I have stated them on many occasions, but knowing he is a Social Crediter I realize that no matter how many times I explain them to him he will probably still distort them to suit his own convenience. In any event I do not wish to be diverted from the item now before us. The Minister of Finance has clearly proven that he has a large element of deception in his make-up and he exhibited it when drafting the legislation now before us.


Mr.   Paflerson@: Mr. Chairman, it is not my intention to stoop to the level of debate exemplified by the hon. member for Skeena. I simply want to state that I was not suggesting that the hon. member for Comox-Alberni had deliberately set a trap. I believe it was done inadvertently. I pointed out that if we moved in the direction he proposed the government would be able to use the amendment as an argument for imposing this tax on a permanent basis. It could be said that the committee had insisted on this being done. That is all I was implying in my statement. Regardless of the position the hon. member for Skeena wishes to take, this is a statement of fact. I do not believe I have given him too many occasions on which to question my honesty or my veracity.


Thomas Speakman Barnett: I rise on a question of privilege, Mr. Chairman. I wish to assure the hon. member for Fraser Valley that it was not by inadvertence that I set a trap, and I think the Minister of Finance has fallen into it very nicely.


Mitchell William Sharp: First of all I should like to say that I do not feel myself particularly entrapped. The undertakings I have given to the house I have carried out exactly as I said I would, and I have never misrepresented or deceived the house as the hon. member for Skeena suggests. I hope the hon. member, when he looks at Hansard, will have second

thoughts about accusing the Minister of Finance of deliberate deception. I do not take objection, however, on parliamentary grounds. I do not consider the matter serious enough for that, though I do think the language is most unfortunate.
May I first of all set the record straight so that the committee may at least be aware that I have never at any time attempted to deceive it or to deceive hon. members. When I made my statement on November 30 I said:
My first proposal relates to the personal Income tax. I am asking the house to approve a special surtax of 5 per cent of the amount of the basic tax assessed on an individual in excess of $100. This surtax will take effect January 1 and would remain I expect until we have completed the transition to a slower rate of growth of expenditures or until economic and financial conditions call for a change in our fiscal policy.
That was the statement I made. I indicated the temporary nature of the tax then. I think there is nothing misleading either in the way the bill has been drafted or in the heading over the clause. I did not say it would be for only one year, as has been alleged, nor did I say it would be permanent. I think the way in which the clause is drafted, setting out that the surtax relates to 1968 and subsequent years, carries out the effect of what the government proposes.
[DOT] (3:50 p.m.)
May I go on to speak about two or three other things said by the hon. member for Skeena. He referred to the fact that there had been a special refundable tax on corporations, and he seemed to feel that somehow we were discriminating in favour of corporations and against individuals in this particular case. I would point out to him two things that have been pointed out on a number of occasions. The first is that the rates of corporation tax in this country, including provincial and federal, are amongst the highest in the world. There are very few countries in the world, indeed I cannot think of any, where the corporate rate of tax is higher than it is in Canada. Moreover, in this bill which we are now approving the government requires corporations to pay another $290 million during the 1968-69 fiscal year and a further $50 million the following year, or the equivalent of a special levy of $340 million which they can never recover. This is an additional levy that a corporation can never get back as long as it remains in business. This bill is adding $340 million to the taxes paid by corporations, which is a very substantial amount of money.
February 19, 1968

I am not suggesting that this is not appropriate. Otherwise 1 would not have proposed it. But the burden of the measures proposed in this bill is heavier on corporations than it is on individuals.


Mr. Lewis:: May I ask the minister a question? I just do not understand what he is saying. He must be referring to the fact that he is now requiring corporations to pay their taxes two months earlier.


Mitchell William Sharp: That is right.


David Lewis: Surely they are going to pay the same taxes which are due in a year except that they start paying them earlier.


Mitchell William Sharp: Perhaps the hon. gentleman, who has been in legal practice, has not acted on behalf of corporations on many occasions.


David Lewis: I have not at any time.


Mitchell William Sharp: If he had he would realize that the amount of levy we are placing on corporations by advancing the date of payment amounts to a permanent addition to the amount of taxes they pay for a year. They can never get it back because their payment dates are always advanced permanently. If we advanced the date another month they would have to pay another month's tax. In the bookkeeping of the companies there would not be any difference. They would show the same tax liability, but they have to put up $340 million as a result of the advance of two months in the date of payment, which they can never recover and which is additional to the amount of taxes they have to pay as long as they remain in business.


David Lewis: I am sure the minister is trying to enlighten everybody since he asserted with great conviction that he was not trying to deceive anybody. Will the total tax that a corporation pays for a tax year, let us say over the next five years, be higher than it would have paid if it did not start paying it two months earlier?


Mitchell William Sharp: Yes. In that five year period, if there is no further advancement of the date, all of the corporations will pay $340 million more in taxes. This is a fact. I would not bring this forward if it were not so.
What has surprised me very much during discussions on the budget and on these bills has been the position taken by the New Democratic party about the Carter commission report. With the exception of the hon.
Income Tax Act
member for Skeena, who made the most devastating attack on that report ever made in this house, other members of that party have suggested that they accept the Carter commission report without qualification. However, one of the main effects of that report's recommendations, if we were to accept them, would be to reduce very substantially the total tax paid on corporation profits because they propose that the ceiling rate on corporate tax paid to federal and provincial governments should be a little lower than it is in some provinces today. They also recommend that the tax paid by corporations should be regarded as a tax paid on behalf of the individual shareholders when they pay their individual income taxes. Moreover, if the hon. member for Skeena suggests that the tax upon rich individuals would be raised I point out that this is not so. What Mr. Carter and his commission have proposed is that the marginal rate of tax should not be higher than 50 per cent. On the other hand, what he does propose is a tax on capital gains.
In the case of corporation taxes the effect of the Carter commission report is to reduce the burden of taxes resulting from our present system of taxation. The commission suggests that this be done by reducing the overall rate of corporation tax and giving as a credit to the individual taxpayer the tax paid by a corporation. In making the arguments they have made, members of the N.D.P., are really contradicting the position they have taken in unqualifiedly supporting the report of the Carter commission.
I have no objection if the committee wants to take the word temporary out of the heading to the clause. However, I would not be in favour of it because I do not think it would then give an accurate presentation of the purpose of this surtax, which I say with great confidence is a temporary surtax. If the committee were to agree to delete the word temporary there would in fact be the suggestion that it is a permanent surtax.


Thomas Clement (Tommy) Douglas: Mr. Chairman, the minister keeps saying that this is a temporary surtax merely because he states that it is his intention to terminate it at some time or other. We are not dealing with the minister's intentions. We are dealing with legislation. The minister can state his intentions, and he may be perfectly sincere in his wish to carry them out. But the minister of finance can change. The government can change. And the government

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can do in the future as it has done in the past; it can change its mind. All we can deal with is the legislation actually before us.
We would like to see this surtax temporary. As a matter of fact we would like to see it not imposed at all, but the only way the minister can make the surtax temporary in legal terms is to place a termination date in the legislation. That is what he did in respect of the refundable tax which applied to corporations. The minister should know approximately how long temporary is. He should know whether he needs this temporary surtax for one year, two years or three years. If he finds that the length of time he has estimated is too short then he, or whatever minister of finance is in office at the time, can bring in an amendment to change the date.
So far as this committee is concerned we are dealing with a piece of legislation and the legislation imposes this surtax for 1968 and subsequent taxation years. It does not say how many. Therefore, under the clause which is now before the committee, legally this is a permanent surtax. It is for 1968 and subsequent taxation years, and putting the word "temporary" in the heading has no legal significance at all. The only thing that is binding upon the treasury is the clause which says that this surtax is applicable to 1968 and subsequent taxation years.
[DOT] (4:00 p.m.)
If the minister really wants to convince this committee and the country that this is a temporary surtax I submit to you, Mr. Chairman, that the only thing for him to do now is to have an amendment moved to the clause setting a specific termination date for the surtax. If he does that, then of course we can withdraw our amendment because the surtax would then actually be temporary. But if he will not insert a termination date and the words remain as they are, namely, that this surtax is applicable to 1968 and subsequent taxation years, then of course the tax is permanent until such time as parliament changes it as it might do in respect of any other tax. Therefore the word "temporary" which the minister wishes to have left in the bill is meaningless and misleading.


Mr. Leboe:: Mr. Chairman, I should like to direct two questions to the minister. First, how did he arrive at the calculation of the extra taxation he spoke of a moment ago that corporations would pay? Would he also tell us whether there is anything which defines the word "temporary" because it seems to me the

word "temporary" is entirely relative. It could be one's life or the years of the universe. I should like the minister to give us some idea whether there is anything which defines the word "temporary" so that it may be brought into some context.


Mitchell William Sharp: Mr. Chairman, in respect of the first question asked by the hon. member I might say that the calculation of the additional revenue from the bringing forward of the payment of corporation tax was based on two months' revenue as we have calculated it in the Department of National Revenue. The effect of bringing forward the payments two months is to add $290 million or $145 million for each month we bring the revenue forward. It also has the effect of adding another $50 million for the subsequent fiscal year so that altogether we would get $340 million extra revenue out of bringing forward the payments by two months. This was based upon our collection experience with the corporations.


Bert Raymond Leboe: Will it have anything to do with the interest calculations on the amount of money that is paid to the government?


Mitchell William Sharp: No.


Bert Raymond Leboe: In the final analysis it seems to me it is difficult to understand how it can be said, just because the money is received that much sooner, that it costs that much more. It must have some connection with the interest on the amount of money that will have to be borrowed because it is being paid to the government.


Mitchell William Sharp: At the present time corporations are permitted to pay their taxes in instalments. They can now pay them over a period of five months after the end of the fiscal year. We are now bringing that forward so that they must complete their payments within three months of the end of the fiscal year.


Thomas Clement (Tommy) Douglas: How does that compare with the personal income tax?


Mitchell William Sharp: Perhaps I might first be permitted to complete the explanation of how it brings extra revenue to the government which we never lose again. At present corporations pay tax by monthly instalments but the payments for a taxation year do not begin until the fifth month in that taxation year. For example, under the present law a company with a fiscal year that coincides with the
February 19, 1968

calendar year would begin to pay its tax for
1968	in May, 1968 and complete its payments in April, 1969. As a result of the proposed change such a company will pay its 1968 tax in the ten-month period from May, 1968 to February, 1969. Any further amount necessary to bring instalments based on estimates of tax into line with actual tax liability will be due in March, 1969. For 1969 and subsequent years the payment period for such a company will run from March to the following February with any adjustment based on actual tax liability being due in March. If I may describe the change in general terms, for
1969	and subsequent years the payment period will run from the third month of a corporation's fiscal year to the second month of the following fiscal year with any adjustment based on actual tax liability being due in the third month.
There seems to be some scepticism about the bringing forward of payments. I might remind hon. members that when individuals were put on a pay as you go basis some time in 1942 the process was completed by forgiving individuals a part of their tax liability so that they did not have to pay the extra amount of money. We are not forgiving the corporations; we are requiring them to catch up and bring their payments up to a more current basis. In the process we receive an extra $340 million which we never lose because the corporations will continue to be on the new basis and in the next year will pay as much in the form of taxes as in the past. The only way in which a corporation may avoid that extra liability is by going out of business. This is a permanent addition of $340 million to our revenue. To be fair to the house, because it is never my intention to mislead it I should say that this is not a continuing permanent $340 million a year. It is a once for all additional payment of $340 million and it is never recoverable by the corporations.


William Arnold Peters: If they were brought up to date would the amount increase by two and a half times?


Mitchell William Sharp: Yes. This would bring the corporations on to the same basis as individuals. It is something in the order of $150 million a month for each month we bring it forward. We decided that the effect upon the liquidity of the corporations should not be too great considering the need to promote business expansion and otherwise encourage business
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corporations to make investments for the purpose of creating new employment. So we decided on a two month advance for this year, which involves a substantial amount for the corporations to raise in addition to the regular amount of their taxes.


Bert Raymond Leboe: I still think, Mr. Chairman, that this is just like daylight saving time. I should like the minister to go back to the second question I asked. How is the word "temporary" defined. It seems to me that "temporary" is an elusive word and that all legislation is temporary. There is no permanent legislation. I should like the minister to explain what is meant by the word "temporary" and how it is defined in the bill.


Mitchell William Sharp: Mr. Chairman, It is very difficult to define the word "temporary". Perhaps I should say that my aim is to be a temporary minister of finance at the present time. It is very difficult to say whether or not I will attain this aim. Temporarily this is my aim. I understand to some extent the difficulty the committee is having in respect of this section. We did not feel that we could impose a terminal date without creating other difficulties. We did wish to indicate by the heading, however, that the government does not look upon this as a permanent part of our taxation structure. Therefore we use the heading "Temporary Surtax". With that heading I believe there is a clear indication to the public and to parliament that this tax is not intended to be a permanent part of our taxation structure.


Mr. Schreyer:: Is it the minister's intention that the tax would last no longer than his position in the Department of Finance?
[DOT] (4:10 p.m.)


Frank Howard: Mr. Chairman, I wish to congratulate the minister on his ability to channel the debate in the direction he desired rather than dealing with the substance of the matters raised. The minister objected to some comments I made earlier. I did not say, however, what the minister claims. Obviously he misunderstood me or has deliberately misrepresented my remarks. I suggested that he did something deliberately. I gladly withdraw that remark as I would not want to be misunderstood as suggesting that the minister or this government ever did anything deliberately. Most things they do they do by accident or because of circumstances.
Having listened to what the minister said, particularly in respect of what I am supposed

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to have said, I am more confused than I was at the beginning when I suggested there was some element of suspicion attached to the action of the government. The minister suggested that I made the most devastating comments about the Carter commission report ever made in this house. Let me state categorically in the most generous way I can that the minister is mistaken. If he persists in his feeling about what I said I suggest he should check the record. Perhaps that is what he is doing now. I am sure he will find that I did not attack that report in that way.
When I referred to the course of action taken by the government being different in respect of corporations from that taken in respect of individuals I was referring to the special refundable 5 per cent tax imposed on corporations in 1966-67. The minister deliberately ignored that reference and referred instead to some obscure amount like $140 million which will be paid back, or will be like daylight saving, as the hon. member for Cariboo said.
The minister is deceiving the house when he tries to suggest that he will receive extra tax income from corporations. Let me place again on record what I pointed out to the minister when I made the comparison between corporate taxes and taxes on individuals. I understand that the refundable tax was imposed for the same reason as the so-called temporary surtax. The minister said that the refundable tax would be imposed for the period from May 1, 1966 to October 31, 1967. The legislation provided that every corporation should pay additional tax in an amount equal to 5 per cent for each taxation year. However, the minister was able to provide that that tax would only be applicable for the period from May 1, 1966, to October 31, 1967, and also that it would be paid back with interest after a certain period of time.
The difficulty is that this surtax on individuals will be paid by people who cannot avoid paying their full amount of taxes because they are salaried and their employers deduct the tax at the source. These people will pay the full 5 per cent surtax. The minister says he cannot set out a definite period of time over which the surtax will be payable because it is administratively difficult to do so. I suggest that the minister is unable to define "temporary" in respect of this tax and that in effect the 5 per cent surtax will go on forever. That is precisely what the legislation suggests.
{Mr. Howard.]
I do not intend to ask the minister to comment on what I have said, but if he feels he should make some answer I hope he will stick to the facts and not adopt a course of action which suits his position but one which will be more acceptable to members of the house.


Bert Raymond Leboe: Have fiscal arrangements been made with the provinces in respect of this surtax and how much of it, if any, will revert to them?


Mitchell William Sharp: The surtax will not be shared with the provinces. This is one thing the provincial authorities will want to discuss with us in due course. This surtax was established in such a way that all the revenues will come to the federal government. If it had been imposed as an ordinary increase in income tax it would have been shared with the provinces.


@Deputy Chair(man)? of Committees of the Whole: Is the
committee ready for the question?


Some hon. Members:: Question.


@Deputy Chair(man)? of Committees of the Whole: The question is on the amendment moved by the hon. member for Comox-Alberni.
Amendment (Mr. Barnett) negatived: Yeas, 15; nays, 99.


@Deputy Chair(man)? of Committees of the Whole: I declare the amendment lost.


David Orlikow: Mr. Chairman, I should like to say a few words on this clause because I am opposed to the 5 per cent surtax whether it be of a permanent or temporary nature. I am glad the Minister of Manpower and Immigration is in his seat because I should like to draw his attention to certain comments by an organization which he headed for a long time. They are contained in a memorandum submitted to the government by the Confederation of National Trade Unions. This is what they think about the 5 per cent surtax. This organization suggested, as we have, that this surtax is damaging to the welfare of people in the lower income brackets. Let me refer the minister to this sentence which appears on page 11 of their submission:
The measure providing that the 5 per cent surtax would not go beyond the sum of $600 clearly protects those with large personal incomes.
[DOT] (4:20 p.m.)
That is the complaint we have been making about this proposal since the minister put it forward. The C.N.T.U. and the Canadian Labour Congress have been differing very
February 19, 1968

sharply with regard to Bill C-186, but on the question of the policies adopted by the government through the Minister of Finance they are in complete agreement. I should like to quote one or two sentences from the Canadian Labour Congress brief presented to the government and dated February 13:
We question seriously the economic wisdom of imposing a deflationary tax increase, as the Minister of Finance did in his November 30th budget, at a time when the economy's forward momentum is obviously faltering. Furthermore, there is every likelihood that the recent tax increases will serve to aggravate, rather than to ameliorate, the already unsettling cost and price pressures on the economy.
There is no quesion that this is precisely what the minister's tax proposals have done. I do not know whether the minister set out deliberately to create a larger pool of unemployment when he proposed this tax increase in November, but that is exactly what has happened. The C.N.T.U. in its brief makes it very clear that since the minister introduced the tax increases there has been a very marked increase in the number of unemployed. Between November and December the number of unemployed in Canada increased by 64,000, or 22.1 per cent. This increase was 60 per cent higher than the average increase in the number of unemployed between November and December in the past five years. The result of this measure, together with the cut-backs in government programs, is that the total number of unemployed in Canada in December was equal to 4.6 per cent of the labour force. This is the highest figure for many years and compares with 3.6 per cent in December of 1966 and 3.5 per cent in December of 1965.
The increase in unemployment has been particularly marked in Quebec and the maritime provinces. While, as I mentioned, the number of unemployed jumped to 4.6 per cent of the labour force of Canada as a whole, it jumped to 5.9 per cent in Quebec. Quebec now has almost twice as many unemployed, percentagewise, as the province of Ontario. This is the effect of the tax increases proposed by the Minister of Finance. Who is asked to pay these tax increases? The wage earner and the salaried person. Together with the restrictive economic policies of the government, the cut-backs in programs and the increase in the cost of living, these increases have accentuated the difficult situation of people in the lower and middle income brackets.
As I say, Mr. Chairman, I am opposed to this surtax which the minister introduced last
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November. It is interesting that in his discussion of "temporary" versus "permanent" the minister said in effect that it was impossible to specify the date to which this surtax would continue. The minister had no difficulty in setting out the date to which the refundable 5 per cent tax on corporations would continue. As a matter of fact, the corporations are already beginning to get their money back.
The minister put forward a very specious argument when he said that bringing forward by two months the date on which corporations pay their taxes meant a permanent increase in taxes. He did not say that our tax policy treats corporations in an entirely different way than it treats the individual taxpayer. Ordinary citizens working for wages or salaries are required to pay their income tax immediately. They pay income tax at each pay period. We in this country, as the Carter commission said so ably, have traditionally favoured the corporations and the wealthy people. We have permitted corporations to pay their taxes late. We have permitted them to keep for some months money they owe the government of Canada, during which time, of course, they have the use of that money. During that time they do not pay any interest to the government of Canada.
When the minister, because of temporary difficulties, advances the date for payment of taxes by corporations by two months he tries to tell the people of Canada that he is increasing the taxes imposed upon corporations. I do not often agree with the hon. member for Cariboo, who said this was like daylight saving, but I agree with him in this instance because if there was ever a phony, specious argument it was that argument advanced by the minister.
I am not prepared to vote for a surtax on income tax that hits the ordinary taxpayer and has a ceiling of $600. I believe this is completely unfair. I think it shatters the whole idea of progressive taxation. The minister has denied again and again that he has rejected the recommendations of the Carter commission. The minister has again tried to suggest that some members of our group who have urged the implementation of the recommendations of the Carter commission are in fact recommending increases in taxes for the ordinary citizen.
The minister was the first to reject the suggestion of Mr. Carter that his proposals should be implemented in a package. The minister did so when he told the mining and

February 13, 1968
Income Tax Act
oil companies that the recommendations of the Carter commission to correct the completely unfair way in which they are treated would not be implemented for four, five or more years at the earliest. The minister rejected the whole package approach of the Carter commission when he did this.
The minister again today tried to suggest that those of us who are urging the implementation of the bulk of the recommendations of the Carter commission are in effect urging increased taxation on the ordinary taxpayer. The minister said that our suggestion would have this effect. I do not know how the minister can say this with any degree of honesty when the whole point of the Carter commission recommendations is that up till now people in the low and middle income brackets have been paying more than their fair share of taxes and the people in the upper income bracket have been paying less than their fair share. The whole problem the Carter commission attempted to meet was the unfair approach to taxes in this country which it said should be reversed so that people in the upper income bracket would pay their fair share of taxes.
[DOT] (4:30 p.m.)
Surely the fact that both the C.N.T.U. and the Canadian Labour Congress urged in their submissions to the government this month that the government implement the recommendations of the Carter commission is proof enough that they recognize, as we have, that the implementation of the Carter commission recommendations would benefit the people in the lower and middle income brackets. Both these organizations called for that. Let me bring to the attention of the minister, although I think he was present when these submissions were made, what the C.N.T.U. said. He can find it on page 11 of their submission. They said:
The C.N.T.U. supports the objectives of the integrated tax plan proposed by the Carter commission. According to this plan, the maximum rate of taxation on personal income would be reduced to 50 per cent and the present tax credit of 20 per cent on dividends would be abolished.
As the commission pointed out, taxation of all revenue at the same rates would end certain procedures employed because they reduce taxes and not because they increase the total revenue of the enterprise.
If the minister were to look at just this recommendation of the Carter commission, he would be right in saying that it reduces taxes. However, the minister conveniently forgot to refer to the other recommendations of the

Carter commission such as the one that a tax on capital gains should be imposed. I think the minister knows better than most members of parliament and better than the ordinary citizens of Canada just what the failure of past Canadian governments and of this government to implement a capital gains tax has meant. It has meant that the mining and oil companies and all the resource industries have been able to save tens of millions of dollars a year in taxes.
The Carter commission said that mining and oil companies should have their depletion allowances removed because 85 per cent of the benefits of such allowances go to eight mining companies, most of which do not need this incentive. The removal of these exemptions would provide a minimum of $150 million a year to the treasury. If the Minister of Finance is worried about meeting some of the bills of the federal government I suggest that instead of putting a 5 per cent surtax on income tax he should go after the people who have the money, namely, the mining and oil companies. Some members of parliament will say that if this is done the rate of growth of these companies will be slowed down. I notice the hon. member for Yukon is nodding his head in agreement.


Mitchell William Sharp: May I ask the hon. gentleman if he is referring to the hon. member for Skeena in these remarks?


David Orlikow: I do not have to refer to the hon. member for Skeena. He has been here long enough to establish a reputation of being able to look after himself. He does not need protection by the member for Winnipeg North. If the Minister of Finance has an argument with the hon. member for Skeena they should debate in their own time what the hon. member for Skeena is purported to have said and what he did not say. I will let the hon. member for Skeena look after himself.


Mitchell William Sharp: The hon. member should argue with him, not with me.


David Orlikow: I do not think so. I want to say this with reference to the mining companies. Almost unlimited amounts of potash have been discovered in Saskatchewan and the potash industry is growing very quickly. I suggest to the Minister of Finance that what we have done by our wayward treatment of the mining companies is to encourage them to develop at a much faster rate than this country needs. The result has been that the price at which the companies can sell potash has
February 19, 1968

dropped from $30 a ton to $18 a ton. Consequently the royalties paid to the government of Saskatchewan, to that great, free enterprise government headed by a Liberal very much like the Liberals on the other side of the house, have dropped very substantially.
I suggest that if we had not given this kind of preferential treatment to the mining companies the potash industry in Saskatchewan would have developed at a somewhat slower rate and could have sold the new production it brought in from year to year. This applies also to the uranium industry. On an investment of a quarter of a billion dollars it made a profit of over $250 million or 100 per cent on its investment up to 1964 but only paid $30 million in taxes. Members of parliament know what happened when the bottom dropped out of the uranium market and who was left footing the bill in Elliot Lake. It certainly was not the uranium companies.
Similarly, the Carter commission pointed out that we have let the insurance companies of Canada get away with murder. They have paid much greater taxes on the small percentage of their business that they do in foreign countries than what they have paid in taxes on their business Canada. So we find a situation where the insurance companies are free-loading on the Canadian taxpayer. In 1964 the insurance companies had assets of $12 billion. They collected $1.3 billion in premiums. They earned $600 million net in investment income but they paid out just $800 million in dividends or benefits and just $2 million in corporation taxes. If they had been taxed in 1964 at the same rate as other corporations were they would have paid taxes of $77 million instead of just $2 million. This is the kind of situation which the government permits to continue.
It is true the minister said that he hopes, not this year but probably next year, to digest the recommendations of the Carter commission and to discuss them with all the interested parties. We know what those favoured few corporations in the mining and oil fields and in the insurance business will recommend to the minister. I have not much faith that the minister will implement the basic recommendations of the Carter commission.
I want to say in closing that I have no intention of voting for this proposal to implement a 5 per cent surtax on income taxes until the government brings some equity into its tax policy and until it starts to collect from those who can afford to pay a fair share
Income Tax Act
of the tax burden. If the government does that and it still needs money and proposes an increase in income tax or a surtax on income tax, I might look with a good deal more favour then on that kind of proposal than I am prepared to do now when the government has done nothing, despite all the protestations of the minister, to implement some of the basic and what I consider to be simple changes in the tax structure which the Carter commission recommended and which the minister does not have to study in great detail or depth before implementing.


Robert Henry Winters: Mr. Chairman, I would like to say a word. I am not seeking to make an issue out of anything the hon. member said but having been associated so intimately with the uranium business I cannot sit here and say nothing. The hon. member asserts that the uranium companies got off scotfree when the slackening in the demand required them to take drastic action which bore quite heavily on them as well as on their employees. Under arrangements made at the time, which can be looked into by the hon. member, he will find that the uranium companies accepted a great measure of responsibility for housing in the area and paid continuity bonuses to the employees. They assumed heavy expenses in closing down the uranium mines so as to rationalize the industry. All in all I think they showed a very large measure of responsibility in very difficult circumstances.
[DOT] (4:40 p.m.)


William Arnold Peters: Mr. Chairman, I did not intend to enter the debate until I heard the Minister of Trade and Commerce. I have been very interested in the role of the Carter commission which considered many of the matters we have discussed in the last few weeks, particularly the matter we are now discussing. I thought the hon. member for Nickel Belt gave a very good answer to the minister the other day when he suggested we implement the recommendations in the Carter commission report. He said he would be in favour of that and certainly our party would.
Over the years municipalities have discussed changing assessments on property in order to bring them up to the proper level. Whenever this is suggested someone always says that if housing assessments are changed it will affect business, which is undesirable. Apartment building owners also object and instead of adjusting assessments uniformly across the board a lot of exceptions have been made.

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The Minister of Trade and Commerce has just been speaking about the uranium industry. I come from a mining area. I worked underground for many years and am familiar with some of the mining operations that are carried on. I think it can safely be said that never has so much money been given to so few corporations as is the case in the uranium industry. The people of this nation never intended that the three-year tax free exemption for companies developing oil and mineral resources should be permitted in the case of operations such as those in Elliot Lake in the uranium field. These companies extracted all the minerals from the area. For example, if Rio Tinto had operated the Hollinger mine I doubt that it would have lasted three weeks whereas in fact it has been in existence for 40 years. Certainly it would not have lasted more than a year.
I completely agree with granting a tax concession to a small company which probably will not make much money anyway. Such companies do not cost the Minister of Finance one red cent because he never has to meet his part of the bargain when he offers such inducement. However, in the case of Inco, Falconbridge and some of the other mining companies this concession is gilt-edged. Obviously they are not going to go into production unless they can reap the full benefit. They teeter and totter and do not open the mine until the most advantageous period, and then they give it hell for three years. At the end of that period they close it down, the Canadian taxpayers having provided them with their profit from the operation.
The Minister of Finance is doing the same sort of thing in other taxation fields. This surtax seems to me to be hitting those who are unable to fight back. Very often the only people who protest increased assessments are the corporate entities. They are sometimes joined by smaller businesses in the community but seldom by more than five or six. However, the small people of the nation are not equipped to make any kind of fuss. The big corporations do not need a spokesman here, though they have many. They are quite capable of making their own representations. When some of the major companies in my area disagree with me they come to Ottawa and make representations in person and do so very effectively and efficiently. They try to educate me to their point of view.
So I do not think this kind of concession should be granted the corporations of the nation. Their only objective is to make as

much money as possible, which probably is the way it should be. However, the small taxpayers should get more representation. It has been said that those in the low income groups are least likely to object to increased taxation, and certainly they receive very little consideration from the Minister of Finance. During the ten years I have been here I have requested ministers of finance to raise the basic exemption of $1,000, but this suggestion has received no consideration.
When a miner buys a pair of mining boots he cannot offset the cost against his income tax. The cost of these boots is out of all proportion to the cost of boots used in other industries. The same may be said of other equipment miners have to buy. However, businessmen are permitted to wine and dine their customers at expensive restaurants and charge the cost of the meals as a deductible item. Not very long ago I visited a restaurant in Ottawa and the prices on the menu shocked me. I noticed one man who I knew was in charge of a department in a large store. He told me he was there because a buyer at the store was wining and dining a whole group of people as a business expense. I am sure the bill came to $400 or $500. People at other tables were all on expense accounts and their meals were in effect free. If they were not, then in view of the cost of the meals no one in their right mind would have eaten there.
Although we have been prepared to make all kinds of concessions to these people and allow all kinds of exemptions for their benefit, how many have we allowed the small taxpayers in the last five years? These are the people who will be faced with this temporary tax for many years to come. The tax will remain in effect for longer than the minister seems to anticipate. Most of us will pay the extra tax. The maximum additional amount of tax will be $600 and those in the top brackets will get off almost scotfree.
[DOT] (4:50 p.m.)
We have reached the stage in this country where many employees, instead of seeking higher wages in terms of money, would like to have free meals provided under expense accounts. Many would like their firms to provide them with a new car instead of the money for that car. They want to get in on the big-time kick the minister is giving his friends.
This surcharge will not do for the government what the minister thinks it will. In any event, it will not be temporary. I do not
February 19, 1968

expect any government to remove it during the next ten years. It anything, the tax will be increased. I remember the many times the government has promised us that automobiles would be cheaper. Yet every time I go to my automobile dealer he want $200 more for a car. Similarly, this tax will increase slowly year by year. As the tax increases, so will the difficulties that our people face.
I heard the minister's explanation regarding the $340 million which is to be raised from corporations and this brings to mind another question. Why should the government not give some advantage to those who pay their taxes early? If I pay my taxes at the beginning of the year instead of at the end, should not the government compensate me? After all, the government gets its money early and is able to use it. Should there not be some sort of rebate to those who pay their taxes say at the end of six months instead of at the end of the fiscal year?
The minister has not shown how this temporary tax is to be replaced by other taxes. I suspect any taxation reform will be on a piecemeal basis. Certainly the minister has not clearly said whether he endorses the Carter report. A number of my colleagues have asked him about his stand with regard to mining concessions and about his intentions with regard to oil concessions and so on. These matters are brought up in the Carter report and I have not heard the minister say whether he adopts the recommendations made in that report. Would this not be a good time for the minister to say what his intentions are with regard to the Carter report, whether he intends to accept or reject, say in five years, the proposals contained in the Carter report?


Mitchell William Sharp: Mr. Chairman, I will not prolong the debate but I wish to put on record a statement made by the hon. member for Skeena on May 9. I do not wish to misrepresent his words. As recorded on page 15 of Hansard for May 9 he said:
-I should like to direct my question to the Minister of Finance. In view of the disastrous effects of the Carter commission report on the mining industry, particularly in British Columbia, will the minister be making an announcement soon regarding the government's intentions in respect of that aspect to the commission report relating to taxation of mining companies?


Frank Howard: Mr. Chairman, I was hoping that the minister would have read those remarks at the beginning when he made his
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untruthful accusation that those words represent a devastating attack on the Carter commission report. As the minister knows, it is not. This is another example of his distortion of a factual picture. He attempts to paint an incorrect picture.
The minister read correctly what I said. One reason the Carter commission report had a disastrous effect on the mining industry of British Columbia was that after it had been made the minister sat like a dumb bunny on his fanny and did not say "boo". He did not say what he was going to do. The result was that huge mining corporations in this nation, Noranda being one, used the Carter report as an excuse to pull out of potential development. They said, "Oh, we can't go in there because the Carter commission report has recommended that we lose our tax free period of three years."
The minister gave in to the pressures by subsequently making the announcement that the implementation of that section of the Carter report would not have any effect-I stand to be corrected on the year-until 1974. The question I directed to the minister arose from that situation. Noranda in particular used the Carter report as an excuse to pull out of potential development in a particular area. The real reason they pulled out was that they did not find a sufficient ore body to make development worth while. But they had sucked in the people of the area and in the Carter report they found a convenient way of getting out of the difficult prospect of putting more money into a particular development. It seems sad that a high and mighty Minister of Finance who seeks to be prime minister of this nation has got to degrade himself to the extent of so distorting something that is factual.


Some hon. Members:: Question.


Frank Howard: As on other occasions when I and other members of this group have been speaking, the minister is reading newspapers and magazine articles. He was doing that while I was making my representations about this matter. I remember some comments I made apropos of something the hon. member for Timiskaming had said about tax allowances for loggers, for instance, who have to buy logging boots, logging clothing and tools for their trade. But the minister paid no attention. If the minister will not pay attention I wonder whether it is worth while putting my remarks on the record. Ah, I see the
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minister looks at me. I see he is going to pay attention to this aspect of my remarks. That surprises me. He should have paid attention before.
One of the minister's friends in the Liberal party, Hon. Walter Harris, said when he was minister of finance in 1956, as recorded in Hansard-he was replying to a question asked by the hon. member for Comox-Alber-ni-that there was a discriminatory aspect in the Income Tax Act with regard to working men not being able to deduct for taxation purposes expenses they had to incur in buying special clothing, equipment, tools and the like that they needed for their occupations. Ever since then the hon. member for Comox-Alberni and I have continued our compaign with a persistent barrage of letters, briefs, speeches in the house, introduction of bills and so on. I merely want to say that the issue is not dead but is very much alive. The only thing that is perhaps dead is the sympathy of the Minister of Finance.


@Deputy Chair(man)? of Committees of the Whole: Shall
clause 5 carry?


Thomas Speakman Barnett: Mr. Chairman, I wish to put on the record that what the hon. member for Skeena has just said with regard to proposed changes in income tax legislation is completely endorsed in the Carter report from my reading of it. It endorses the hon. member's view of the current discrimination in clause 5 of the bill.


@Deputy Chair(man)? of Committees of the Whole: Shall
clause 5 carry?


Mr. Starr:: No, Mr. Chairman. Please call a vote.


Mitchell William Sharp: Mr. Chairman-


@Deputy Chair(man)? of Committees of the Whole: Order.


Mitchell William Sharp: Before you call a vote-


An hon. Member:: Stalling.


Mitchell William Sharp: I wish to say to the hon. member for Skeena that I did not attempt or intend in any way to misrepresent his remarks. When he directed the original question to me the word that attracted my attention more than any other was "disastrous". I took his meaning to be that he viewed the recommendations of the Carter commission as disastrous in so far as they affected the mining industry.
[DOT] (5:00 p.m.)


Michael Starr: Call a vote.


Frank Howard: Before the vote is called I have one or two further observations to make. The minister took my words "disastrous effects" and deliberately read into them something which had not been intended in order to make a political point. Instead of playing about with what words mean and what they do not mean, I wonder whether the minister would mind addressing himself to the substance of the question which has been raised. I think it is clear. I have indicated my position with respect to it. If the minister wishes to continue suggesting that I mean something else, that is his privilege and I do not wish to press the matter.
The argument has been presented by my hon. friend from Timiskaming in a most forceful way. Miners have to wear protective clothing, including hard-toed boots. Similarly, loggers are required to wear special clothing. I mention these two occupations because one of them has been referred to directly and because I myself worked in the logging industry and am familiar with the requirements. These examples are not exclusive. Workers in other industries require of necessity, and in many cases by provincial laws in order to comply with compensation regulations, special clothing, some of it for reasons of safety.
Can the minister not indicate the prospects of making some provision of the kind now asked for in order that working people may have an opportunity to deduct necessary expenses from their incomes before they pay tax? I am talking now of those engaged in heavy industry, those who cannot in any way avoid taxes because before they even get their cheques the bookkeepers or accountants have docked the tax and sent it to the treasury. Are they to have no hope of concessions such as are granted to the mining corporations or to the insurance companies and others paying special refundable taxes? Can the minister give us no hope that the wage earners and salaried people who have no opportunity to make any adjustments affecting their taxes are to receive any of this favoured treatment?


Mitchell William Sharp: As the hon. member for Skeena says, the Carter commission does recognize the principle that people ought to be able to deduct from their income the expenses necessarily incurred in earning it and there is special reference in the report to the kind of expenses incurred by miners and others employed in industry. We have been studying this aspect along with other recommendations
February 19, 1968

made by the Carter commission. The problem, as the hon. member concedes, is a difficult one because everyone who works must incur some sort of expenses in earning his income. Even a bookkeeper probably wears out his clothes in a rather special way because of his occupation. It is a question of degree.
The other problem which arises in connection with this proposal is that to the extent expenses of this kind are accepted the general rate structure has to be adjusted to make up for the loss of revenue. If this is generalized too far, what we are really doing is something along the lines of the practice presently followed when we allow an extra hundred dollars as a deduction for charitable and medical expenditures, and it is possible to move in this direction very quickly if the precise expenses allowable are not defined very carefully. Having gone through such a process, the result is simply a change in the basis of the exemptions, and the decrease in revenue has to be offset by a corresponding increase in taxes.
For these reasons we have yet to reach a conclusion on the recommendations of the Carter Commission, not only in this particular respect but with regard to a number of other subjects dealt with in the report. Taxation is an integrated whole and any change in one direction makes changes in another necessary unless the general level of revenue is to be affected.
The hon. member again talks about a difference in treatment as between corporations and individuals. This is a question we had to examine carefully when we were determining the changes to be made in order to bring the budget closer into balance next year. The choice we made, as will be seen from the bill, was to impose a group of increases which would cause, we hoped, the minimum undesirable effect on the economy, that is, the minimum effect upon the spending power of the public or of business. We selected these revenue measures so as to distribute them in such a way that the effect on levels of employment would be minimal. To this end we put on excise taxes, a small surtax on individual incomes, eliminating it at the bottom of the scale and tempering it at the top, and then a very large cash drain upon the corporations.
We concluded we could do this without disturbing business investment too greatly, and we wanted to keep business investment at a 27053-4341
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maximum because it is not rising very quickly now in this country and it is very desirable in the interest of employment that it should. We had to raise revenues in some way in order to reduce our demand on the capital market, which is the central problem facing the government in the coming year, and we decided that the mixture to which I have referred would produce the maximum amount of revenue while causing the minimum undesirable effect upon the economy.
This is all a matter of judgment. I do not think it is ever possible to satisfy all the criteria. We have been going through a most interesting and unprecedented series of incidents related not so much to domestic affairs as to world conditions. We have been living in the most troubled period internationally that the world has seen, I think, since the twenties, and the problem in these circumstances is to take measures which do the least damage to the Canadian economy while producing the maximum benefit.
There is no ideal way of doing this. Members of the New Democratic party seem to suggest that we can meet present circumstances by continuing the kind of policies which were followed for a number of years when we were living in a relatively stable international environment, when interest rates were low and when it was easy to obtain foreign capital. These are no longer the circumstances. We are today living in a world where capital is short, and as long as the war in Viet Nam continues this will probably continue to be the situation. We have to choose our policies accordingly. I do not say we have found the ideal combination, but the opposition should recognize the nature of the problems which face us and not base their arguments upon a world which does not exist. I suggest, therefore, that the proposals made in this bill are appropriate, however undesirable they may be from the point of view of the taxpayer and of each of us as members of parliament.
[DOT] (5:10 p.m.)


Colin Cameron: Mr. Chairman, I had not intended to embark on another speech but when I heard the nonsense uttered by the Minister of Finance I felt something had to be said. I notice he did his usual trick in dealing with a very serious and substantive problem to many workers in this country. My colleagues, the hon. member for Skeena and the hon. member for Timiskaming, both mentioned the

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heavy expenses incurred by many workers, but the Minister of Finance decided, as he always does, to reduce the matter to the level of buffoonery by drawing an analogy to a bookkeeper who wears out the arms of his jacket.
While there may be some substance in the minister's argument that it is difficult to draw a line, I would ask him to look at another place in the economy where relief is given. For the last few years I have been struck by the fact that I never stay at a good hotel any place in Canada but a desk clerk says to me, "You will want a receipt for this." I never buy a meal in a good restaurant but I am offered a receipt for my meal. It is taken for granted that anybody who eats at such places and stays at such hotels is living on an expense account, but this minister never does a damn thing about it.
People are allowed to put in their expense accounts all manner of items that should be considered as part of their personal expenses. I notice that the other day one gentleman, I suppose encouraged by the minister's generosity, tried to get $241 for his wife's expenses in going to Saskatchewan. I was very glad to see that the Tax Appeal Board turned him down and said that obviously the lady was there largely in his service and not in the service of the corporation which employs him.
I suggest to the minister that before he plays his usual split, cracked record of how very difficult the times are in which we are living and how much this is part of a tremendous international dislocation, he should pay some serious attention, as I asked him to do the other day, to the views of competent economists in this country who are appalled and mystified by the idiotic policies he is pursuing, which can only be designed to tighten up the Canadian economy, to cause hardship to the Canadian people and rob them and the government of any opportunity of expanding the economy.
Despite the fact that we have the largest per capita store of natural wealth in the world and despite the fact that we have rising levels of unemployment, the minister has deliberately tied his hands so that he can take no action at all. Why he has done this, God only knows. I cannot find an economist in this country who has a reasonable explanation for his idiotic policies. I do not want the minister to tell us again that we are living in such vastly complicated world circumstances, never seen before. What utter nonsense. I

suggest that he read the history of previous economic crises in the world if he wants to say that there is a dangerous, complicated international situation in the economic area. As I said, Mr. Chairman, I had not intended to speak in this debate again, but once more I have to express my dismay at the fact that this country has been saddled with probably the most incompetent Minister of Finance in the whole history of Canada.


William Arnold Peters: Mr. Chairman, as one of those who raised the matter of other expenses I point out that in his offhand way the minister said that if a bookkeeper wore out the sleeves of his jacket possibly we should allow him an expense deduction for a new jacket or for patches on his old one. I would be very happy if the minister brought in such a measure. If this is necessary for him in his job we should be happy to pay for leather patches on his jacket.
The hon. member for Nanaimo-Cowichan-The Islands said that he never stayed at a good hotel without being offered a receipt, and I noticed one of the ministers shaking his head when the hon. member said this. It may be that I look like the travelling salesman type but this almost always happens to me. Inevitably I am asked if I would like a receipt. Some people even go farther and ask me, "What name do you want it in?" Maybe there is a market in such receipts.
I really believe the minister does not see the difference between a bookkeeper with a worn-out sleeve and a mine worker or pulp cutter. The pulp cutter must own a chain saw which costs him $200 to $300. Such a man may be out of a job. When he finds one he must have a chain saw. That saw, as I say, will cost $200 to $300. He has to make an outlay to get the job. If he borrows the money to buy a chain saw and pays it back while working on the job his outlay of $200 to $300 is not deductible. But such an outlay by anybody else is deductible. The fisherman who has to go fishing obviously has to have a boat. To farm the farmer must have a farm. We allow these people to deduct certain capital costs, but we make no such allowance for the poor worker who works by the hour. He is the forgotten man in the income tax structure.
This is a problem which has been considered by the minister for a long time. It was considered by the minister before him and by the minister before that again, but I suggest it was not really the ministers who considered
February 19, 1968

it. It was their officials who looked into it and they looked at it in the same light as wanting a deduction for themselves every time they go somewhere. They always want a deduction for their cars or for something else. It is very easy for them to understand that employees of big corporations must operate on expense accounts. We allow this type of deduction in the civil service but we do not allow it to the many workers who have to make a capital outlay in order to obtain a job. This outlay is not put in the same category as the $100 deduction for medical and charitable expenses. Most hon. members have made representations about this matter during the ten years I have been a member of the house. However, nobody has listened to the representations that have been made.


Joseph Jacques Jean Chrétien: Mr. Chairman, I wish to make a few comments, because I was somewhat irritated by the intervention of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron). Usually he is rather composed. I have never seen him so nervous than this afternoon when he attacked the tax policy of the government. It is probably due to the nervousness now existing in his party and because the New Democratic party has some embarrassing cousins in the province of Quebec who apparently are separatists. Therefore, I understand why the members of this party are all at sea.
However, the public is not entirely stupid and if there is a party in the house asking for expenditures, it is the New Democratic party. Its members are always ready to ask for an increase of all the services but when it is time to pay for them, they are the first to complain.
Economics have no mystery. Every time the government spends money, it takes it out of the taxpayers' pockets. It is easy to say that this legislation is aimed only at individuals. It is true that there is an increase of 5 per cent on income tax but the President of the United States at the present time is trying to get a 10 per cent tax increase. The British labour party which shares the same ideology as the members of the Canadian New Democratic party was forced to impose economic measures even more drastic than those we experience in Canada. We must take comfort in the fact that this government was the first, among the governments of the western hemisphere, to tackle the problem of inflation in an attempt to find reasonable solutions.
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It is true that this is not easy and that the taxpayers must participate. However, it must still be recognized-and I hope that my hon. friends will admit it-that we are going through the seventh consecutive year of expansion in Canada. Our country has never experienced an expansion period of that duration. But when we experience an expansion period such as ours, it is normal that, at a certain time, necessary means have to be taken in order to maintain the progress which ensures that expansion, and the action taken by the hon. Minister of Finance (Mr. Sharp) is that of a responsible man. We are not here to make presents to anyone; we are here to manage the taxpayers' money and it is imperative, in order to balance our budget, to call on the taxpayers.
My honourable friends said that we had left the corporations alone but the $240 million which will be levied this year, that is for the fiscal year 1968-69, on the corporations come from taxes which they would not have had to pay if we had not moved forward by two months the tax payment period. It is true that, in doing so, we are perhaps correcting an existing deficiency. However, in past years, we have regularly shortened the period of tax payment for the corporations and I hope that, in the near future, we shall continue to follow that course of action.
I would have hoped that our hon. friends, instead of blaming us for taking such a concrete step, would at least have appreciated the fact that we took a step in the right direction.
Naturally, I am sorry that the taxpayers have to pay 5 per cent more in taxes. However, I think that the Canadian taxpayers are happy and appreciate the fact that the situation in Canada is better than in the United States, and still better than that of the taxpayers in England who are led by a socialist party.
In my opinion, Mr. Chairman, we must keep a certain perspective and, if we are responsible, we should be able to explain to the Canadian taxpayers that they must bear their part of the burden and that they should be happy to do so, because we have never known such a long period of prosperity in our country and it seems to me that the government must take the necessary steps to preserve that prosperity.
This bill is in line with this fiscal responsibility. We have been and we still are in an adjustment period; But instead of acting irresponsibly, we must face the difficult facts and

February 19, 1968
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situations. We experienced a difficult situation in 1959, 1960 and 1961, and we do not want that to occur again. That is why we want the present Minister of Finance to act responsibly.
That is why I say that we are happy to support him in the circumstances and that we do not fear to assume our responsibilities.
[DOT] (5:20 p.m.)


Winona Grace MacInnis: Mr. Chairman, I should like to say a few words on this subject. It was not my intention to speak until I heard the remarks of the Minister of Finance. There are certain things which arouse the members of this party. When I hear the minister give a long dissertation about how at this time it is impossible to draw a line in respect of the subject of income tax deductions it seems to me it is time that a few of us pointed out some things. I know that in this country there are wealthy people and members of corporations who are permitted to make deductions from their income taxes for a great many things far beyond the bread and butter necessities of many other people.
I do not intend to be diverted from this situation by the minister's learned discourse about the difficult economic circumstances or by the remarks of the Minister of National Revenue about countries which are in an inferior position to Canada at this time. There are people in this country who are now permitted to deduct many items from their income tax. Ever since I have been a member of the house I have been trying in vain to point out that there are other people to whom no consideration is given who are in a much less favourable position. The other day I pointed out that there are a great many parents who live without a partner and are the sole support of their families. These people are obliged to go out to work in order to earn a living to provide for their families. The minister does not give them the opportunity to deduct from their income tax the wages they must pay to a housekeeper or a babysitter. This situation exists in spite of the fact that other people are allowed to deduct entertainment and actual living expenses from their income tax. No one can tell me that it is difficult to draw lines in a matter of this nature.
We have heard about the workers who are not permitted to deduct the cost of necessary

equipment such as boots, tools and safety helmets. Seventy per cent of the married women who are gainfully employed have preschool children at home. It is necessary for these women to secure employment outside the home because in many cases they are married to men earning less than $3,000 a year. If we had a government which was genuinely concerned about seeing that all the people paid their fair share of income tax, we would not have a situation in which the lower income group do not have the income tax exemptions they should have while the rich and powerful groups have permanent income tax deductions. This is discrimination. It is discrimination against those people who are endeavouring to take care of themselves.
I should like to remind the Minister of Finance that the Minister of National Revenue suggested that the Canadian people are not imbeciles. They certainly are not. A great many people are realizing that the present income tax is inequitable and unfair. The members of this party do not intend to vote for a 5 per cent surcharge which will fall most heavily on those people who are least able to pay it.


David Orlikow: Mr. Chairman, the Minister of National Revenue came to this house with a label which suggested that he is a liberal with a small "1". It is obvious there is truth in the rumour that he is a supporter of the present Minister of Finance in his bid for the leadership of the Liberal party. I have never seen a minister react so sensitively to what I believe were pretty reasonable suggestions on our part. No one in this group suggested that the situation is not serious. No one suggested that the government does not need money. We have merely suggested that the government should apply some principles of equity.
The members of this group have mentioned the fact that miners and construction workers are not permitted to deduct as an expense for income tax purposes the legitimate expenses they must incur in the purchase of hard hats and other equipment of that type. The hon. member for Vancouver-Kingsway referred to married women who must have help at home in looking after their children and the fact that they are not permitted to deduct the money expended in this matter from their income tax. There are construction workers in my constituency who must drive 30 miles each way every day in order to get to and from their employment. They cannot deduct the cost of this transportation but a lawyer or a businessman may automatically deduct 50 per cent of the cost of operating his car even
February 19, 1968	COMMONS
if he drives his car only a mile or two from his home to his employment. This is the type of situation that is being allowed to continue by the Minister of National Revenue who was a liberal before he became a minister accustomed to the nice things one has when in power. This is the type of situation we have been trying to get the government to change.
We are always told that further study is required. Of course this is a complicated situation, but why does the minister not take a look at the recommendation of the Carter commission? The commission recommended that there be an automatic ceiling-I admit that the recommendation may be a little too tight-in respect of a businessman who travels to another district and has hotel and meal expenses. It is not essential that every businessman patronize the most expensive restaurants every day in the city he happens to be visiting. This, however, is the kind of system we have and the kind of system which the Minister of National Revenue defended when he spoke. He shakes his head, but I suggest we are entitled to assume this is the position he takes until he does something about the inequitable situation as between those who can afford to pay but get away with murder and those who cannot afford to pay but are forced to do so. The members of this group do not intend to vote for this measure which the government wishes to impose, nor will they listen without reply to the type of lecture we have just had from the Minister of National Revenue.


Joseph Jacques Jean Chrétien: Mr. Chairman, I should like to direct a question to the hon. member for Winnipeg North (Mr. Orlikow).
How can he explain to us that less than 48 hours after the presentation of the Carter report, his party was ready to have it passed by the House of Commons while a few days after, several members of his party, including an hon. member for British Columbia, who is seated behind his leader, I have forgotten the name of his constituency-


An hon. Member:: Skeena.


Joseph Jacques Jean Chrétien: The hon. member for Skeena (Mr. Howard) and other members of his party asked that certain recommendations of the Carter report be not applied as regards the mining industry and the development of natural resources. Could the hon. member for Winnipeg North explain that to me, since he seems such an expert as far as the explanation of the Carter report is concerned?
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[DOT] (5:30 p.m.)


David Orlikow: At this time I do not intend to go into details as to why we support the basic principles of the Carter commission report. I suggest to the Minister of National Revenue that he take home a copy of that report, in English or in French, and study it tonight. He should also take a copy of the submission to the government by the Confederation of National Trade Unions from which I quoted earlier. That organization supports and endorses the principles of the Carter report and explains how the ordinary citizens of this country would benefit by the adoption of certain recommendations. It is apparent the minister wishes to defend big business. I suggest that he read their submission and the report in order that members of this party will not have to lecture him at length in this chamber.


Joseph Jacques Jean Chrétien: Mr. Chairman, with regard to the Carter report, I should like to make a correction.
The hon. member for Winnipeg North would have us believe that we oppose its recommendations. Generally speaking, we do not oppose the recommendations of the Carter report. Only, we know something about it, having studied it for months, because we took the time to analyse it, whereas the leader of the New Democratic party (Mr. Douglas) already had general views about it and accepted them all less than 24 hours after the voluminous report was brought in.
Only, we have spent a few months studying it and we were about to present the white paper on fiscal reforms some time during the winter. Unfortunately, certain incidents forced us to postpone it for a few months, because the right hon. Prime Minister (Mr. Pearson) saw fit to retire. We have been working on the Carter report for almost seven months. We are in the process of formulating fiscal reforms for Canada which will surprise my hon. friends of the New Democratic party; they will lose nothing by waiting a few weeks more to know the views of a progressive party, that is, the party that sits on this side of the house.


Melville Carlyle Germa: Mr. Chairman, the Minister of National Revenue was misrepresenting the facts when he said that members of the N.D.P. were always in favour of spending

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money and opposed to taxation. That is not our position, but we question the equity of present taxation. We recognize the fact that taxation is a great equalizer of revenue.
The minister suggests that we in this country are very lucky because President Johnson is proposing a 10 per cent increase in taxes. If this government is attempting to mimic the United States I suggest it is making a mistake. We should not match our financial position with that of the United States. I suggest that the financial position there is worse than that of any government in the history of the world. The minister should not try to lead us down the garden path by making comparisons with United States financial measures.
The minister also made reference to economic measures being taken by Great Britain. Obviously such measures are necessary to correct the 400 years of poor administration by governments in that country. The Minister of Trade and Commerce referred to the plight of the mining companies at Elliot Lake. How many millions of dollars did Rio Tinto and Rio Algom take out of Elliot Lake mines? Who has been left to pay the bills? Who has been heating the 400 houses in Elliot Lake since the mining companies left? Hon. members know as well as I that the bills are being paid by the Ontario Housing Corporation. Who is supporting the hospital there built to serve a population of more than 30,000 but now amounting to about 8,000? We all know that these costs are being paid by the taxpayers and have been paid by them since the uranium mining companies moved out.
The average citizen of this country is not enjoying a higher standard of living because of higher wages. Every time there is an increase in his wages there is an increase in taxes. I hope hon. members are aware of the fact that mining companies enjoy special privileges at the federal and provincial levels. It is a mystery to me how these companies have seduced various governments. They are in effect perpetrating a rape of provincial and municipal governments. There is only one industry in the province of Ontario which does not have to pay municipal taxes and that is the mining industry.
We must have remedies for all these situations before we increase the tax burden on individuals in this country. We in this party cannot support this measure to increase the tax burden in order to bail this government out of the financial mess in which it finds itself. I suggest that the government should

seriously consider adopting certain recommendations of the Carter commission.
Let me remind the minister of his statement of November 30 in which he suggested that the Carter commission recommendations could not be applied to the financial situation in 1969. We all agree that financial positions change, but basic principles do not. We in this party believe there must be a change in our tax structure but the change must be based on equity. Until an equitable tax policy is adopted we in this party will not support measures of the type now under consideration.


Mr. Gregoire:: Mr. Chairman, I should like to say a few words on this question of the tax increase, because I was surprised a while ago to hear the hon. Minister of National Revenue (Mr. Chretien). It is the first time I hear such a statement from a minister: The people of Quebec, the taxpayers will be happy about the increases. That is precisely what I heard. The minister said it at least three times and the hon. member for Bonaventure (Mr. Bechard) can testify to that because he was next to me when we listened to him. He said that the taxpayers would be happy about that increase. I have never heard anything like that.
[DOT] (5:40 p.m.)
If an increase of 5 per cent makes the people happy, let us make them really happy by increasing the income tax by 15 to 20 per cent. I have never known anyone to say that he was happy about a tax increase, in spite of what the Minister of National Revenue said earlier. I would like to see him tell the people: Be happy, we are increasing taxes. When have the taxpayers been happy because the government was increasing the income tax? The minister could at least have used another word. Increases in income tax do not make a man happy. If I am mistaken, taxpayers can be made happier by increasing their taxes by 10 or 15 per cent. I, for one, find that diametrically opposed to public opinion.
I heard the minister say that for the seventh consecutive year we are experiencing an expansion. An expansion of what? One thing has been progressing for the last three of four months: unemployment. In fact, that is what is progressing the most in the province of Quebec, in the province of the Minister of National Revenue, where the unemployment average has reached 7.5 per cent of the labour force. That means that 7.5 per cent of Quebec
February 19, 1968

citizens suitable for work are unemployed, and the Minister of National Revenue says that we are in a period of expansion. Is that what the minister means by expansion? Expansion of taxes, that is true; expansion of taxes of all kinds, nothing else.
The Minister of Finance (Mr. Sharp) has been in office for at least three years, and taxes have increased. That is an expansion which has not decreased. Expansion of unemployment and decrease in construction, those are the facts.
The minister seems to say that we are in the midst of a period of prosperity and expansion. If we are, why is unemployment increasing at that rate? It seems to me that the Minister of Finance and the Minister of National Revenue should realize that the period of expansion has come to an end, and it is now time to take steps so as to give new impetus to our economy, instead of hindering it by further tax increases.
When I look at the government's estimates for the next fiscal year and I realize that the interest on the public debt has increased by $130 million, I conclude that taxes are raised simply in order for the government to be able to face the increase in the interest charges on the public debt.
The other day, on the orders of the day, I asked the Minister of Finance and Receiver General whether that increase was due to an increase in the rate of interest or an increase in the debt itself. The Minister of Finance refused to answer. I should like to have an answer.
If taxes are raised, it is because expenses are increasing and the item that shows the largest increase is that relating to the interest on the national debt. Is that due to an increase in the debt or in the interest rate? This question should be answered. I, for one, am convinced that it is due to an increase in the interest rate. In that case, the thing to do is not to raise income tax but rather to see to it that the interest rate paid by the government on its debt is lowered. All our difficulties arise from the fact that two years ago, the Minister of Finance raised the ceiling on the interest rate charged by the chartered banks. This has resulted in a considerable increase in the interest rate.
In the construction field, the rate of interest is now 8J per cent. This is the highest interest rate the construction industry has ever experienced since confederation. We had to commemorate the hundredth anniversary of Canada to see the interest rate soar to
Income Tax Act
8f per cent. Never before had we seen such a thing in Canada. People who want to build a house must pay an interest of 8f per cent. Furthermore, the government is also a victim of this interest rate increase since this year the estimates show an additional $130 million, due to the fact that the government will have to pay a higher interest rate on the public debt.
If tax increases are only meant to pay big financiers a higher interest rate on the public debt-previously it was somewhere between 5 and 5| per cent, which is high enough-if this is the only reason for increasing the income tax this year, I say that the Minister of National Revenue should refrain from telling us that the Canadian people are happy. It is known that those increases will only serve one purpose finally. According to the 1968-69 main estimates submitted to us, we find that next year, we shall simply be paying a higher interest rate to some big financiers and capitalists.
The minister also added at one point that not only the people but Liberal members too will be happy. Well, I would like to hear Liberal members from Quebec tell their constituents: We are happy about the taxes because you are happy about those increases. Once again, it is realized that they will only serve to pay a higher interest rate on the public debt. There is nothing to be happy in that but, on the contrary, much to be sad about and even very sad. I find this deplorable and I am convinced that the Canadian people will agree with me and that they will get rid of the present Liberal administration very soon.
I wish to join those who spoke before me in protesting. Above all, let no one tell us that we are going through a period of expansion at a time when the only expansion is in the field of unemployment. The government should take steps to help the people and to give an impetus to the economy, instead of the measures it is taking now which harm the people and create poverty and unemployment.
1English]


Some hon. Members:: Question.


Herman Maxwell Batten: Is the committee ready for the question?


Some hon. Members:: Question.


Herman Maxwell Batten: The question is on clause 5. Shall clause 5 carry?


Some hon. Members:: Carried.

February 19, 1968
Income Tax Act


Some hon. Members:: No.


Herman Maxwell Batten: Those in favour of clause 5 will please stand.
During the taking of the vote:


Malcolm MacInnis: You
can't vote; you just slipped in.
After the taking of the vote:
Clause agreed to: Yeas, 65; nays, 62.


Herman Maxwell Batten: I declare clause 5 carried.


[Stage Direction]
Clause agreed to.
« (5:50 p.m.)
Herman Maxwell Batten: Shall clause 6 carry?


Malcolm MacInnis: Mr. Chairman, I rise on a point of order. It is generally accepted that once the Chair calls a vote no member is allowed to enter the chamber from behind the curtains. This happened on the other side. The Minister of National Health and Welfare came in after the vote was called and so did another hon. member in the back row.


Some hon. Members:: Oh, oh.


Gilles Grégoire: Mr. Chairman, on the same point of order-
{English]


Herman Maxwell Batten: Order, please.


Gilles Grégoire: Mr. Chairman, on the same point of order.
The hon. member for Mercier (Mr. Boulanger) remained standing while his colleagues in the same row had sat down, in order to be counted with those in the fourth row.
Mr. Chairman, I submit that the hon. member for Mercier remained standing to be counted twice.


Herman Maxwell Batten: Will the hon. gentleman please be seated.


Some hon. Members:: Recount.


Mr. Boulanger:: Mr. Chairman, I rise on a question of privilege.
On some occasions, I thought that the hon. member for Lapointe (Mr. Gregoire) had dignity, was a serious man and had some respect for his colleagues, but his accusation against me is unworthy, vile and false.
[The Chairman.]


Herman Maxwell Batten: Order, please. Shall clause 6 carry?


Malcolm MacInnis: Mr. Chairman, a point of order was raised and two members of the house have drawn your attention to the fact that members entered the chamber after the vote was called. I specifically named the Minister of National Health and Welfare as one of those members. The hon. member for Lapointe identified others. This is not supposed to take place.


Mr. Orange:: On a point of order, Mr. Chairman, I wonder about the eyesight of the hon. member for Cape Breton South because the Minister of National Health and Welfare has been sitting beside me for the last ten minutes trying to convince me about something that is outside the purview of the house.


An hon. Member:: I wonder what.


Malcolm MacInnis: On a
question of privilege, Mr. Chairman, an hon. member has just drawn to your attention the fact that there may be something wrong with my eyesight. May I draw your attention to the fact that there is nothing wrong with the hearing of the Minister of National Health and Welfare who is capable, I think, of speaking for himself. If he was here when the vote was called he would have been the first to rise in his own defence. The minister found it necessary to leave his seat and he probably got caught on the way.


Herman Maxwell Batten: Order, please.


Allan Joseph MacEachen: Mr. Chairman, I should like to support the hon. member for Northwest Territories. I want to assure the committee and the Chair that I was sitting in that part of the house for a considerable length of time and when the vote was finished I came over to congratulate the whip, not only for winning the vote but for his unerring accuracy in counting it.


Herman Maxwell Batten: Order, please. Perhaps I should read to the committee standing order 12 (2) which applies in this case. It reads as follows:
When Mr. Speaker Is putting a question, no member shall enter, walk out of or across the house, or make any noise or disturbance.
This is the applicable standing order, and I would hope that hon. members would be governed by it.		 i
February 19, 1968


Mr. Maclnnis (Cape Brelon South):: Mr. Chairman, further on the point of privilege, I should like to refer you to a precedent in the house when the Speaker referred to the bringing up of a question of privilege.
The hon. member for Lapointe was involved at that time. The Speaker said the question of privilege should be brought up immediately and he reminded him that he had not done so. I would also draw your attention to the fact that when I first brought up the subject the Minister of National Health and Welfare had the opportunity to defend himself. He passed it up, and when he finally got to his feet he did not state that he was in his place or in the house when the vote was called. All he said was that he left the seat he had been occupying to come over to congratulate the whip on winning the vote. He did not say he was here when the vote was called.


Mr. Tucker:: Mr. Chairman, had I voted I would have voted for the bill.


Herman Maxwell Batten: Shall clause 6 carry?
On clause 6-Refund of tax.


Colin Cameron: Mr. Chairman, I have two minutes left in which to speak. When this measure was brought in it was brought in as part of a method of controlling the economy and, in particular, controlling inflation. At that time I objected to the way in which the minister had bound his hands with regard to the refunding of the refundable tax because, as will be recalled, the money was to be held for 18 months and could be repaid at the end of 18 or not more than 36 months. Now it is proposed that the 18 months provision be taken out and that the money be repaid not more than 36 months after the payment of the tax. It seems to me, if this sort of tax is to be of any value, that some discretion must be left to the government with regard to the time when they can re-inject the tax money into the economy.
At the time the tax was introduced I suggested that the minister had read rather carelessly reports of the measures that were taken in Sweden along similar lines. Had he read them more carefully he would have realized that in Sweden it is left entirely to the government of the day to decide in its discretion when such funds shall be re-inserted into the economy. May I call it six o'clock?
Income Tax Act



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to standing order 39A, to inform the house that the questions to be raised at ten o'clock this day are as follows: The hon. member for Vancouver-Kingsway (Mrs. Maclnnis), The Canadian Economy-steps to meet increase in cost of living; the hon. member for Winnipeg North (Mr. Orlikow), Criminal Code-suggested amendments respecting representation by counsel; the hon. member for Skeena (Mr. Howard), Industry-possible change in criteria respecting designated areas.
It being six o'clock I do now leave the chair.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
[Stage Direction]
The house resumed consideration in committee on Bill No. C-193, to amend the Income Tax Act-Mr. Sharp-Mr. Tardif in the chair.
@Deputy Chair(man)? of Committees of the Whole: Order. When the committee rose at six o'clock it was considering clause 6 of Bill No. C-193.
On clause 6-Refund of tax.


Colin Cameron: Mr. Chairman, when the committee rose for dinner I was suggesting that the effectiveness of this particular piece of legislation as contained in the bill-that is to say, section 105J of the Income Tax Act-was rendered largely ineffective by the limitations that were placed upon the discretion of the minister with regard to refunding the amounts paid by those who qualified under the refundable tax scheme. It seemed to me that if this measure was to be of any use it would have to be left to the discretion of the minister when to return those funds to the economy. We were told that in large measure this was part of the government's policy in relation to the control of inflation. Presumably it was an economic weapon to control the economy.

February 19, 1968
Income Tax Act
Consequently, Mr. Chairman, I should like to move the following amendment:
That clause 6 be amended by deleting all the words after "prescribe" in the ninth line.
In that way, Mr. Chairman, the minister will be able to judge when the economy will benefit by having the funds that have accumulated under this tax returned to the economy.
I might also point out that the minister has been repeatedly telling us that the government finds it necessary to go to the market for funds. It may be useful in the near future for the government to be able to retain the funds they have on hand on which they are committed to pay 5 per cent, considerably less perhaps than the amount they have to pay if they go into the market. Therefore, for that reason I move this amendment, which I think will make this tax, ineffective though it was to start with, slightly more effective than it would have been in this measure.


Mitchell William Sharp: 
Colin Cameron: Mr. Chairman, unlike most of the minister's arguments I find this one quite persuasive and with the permission of the committee I will withdraw my amendment.


@Deputy Chair(man)? of Committees of the Whole: Does the committee give the hon. member the right to
withdraw the amendment?


Some hon. Members:: Agreed.
Amendment withdrawn.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read a third time? By leave, now?


Some hon. Members:: By leave, now.


Some hon. Members:: Next sitting.


Mr. Deputy Speaker:: Mr. Sharp, seconded by Mr. Benson, moves that Bill No. C-193, an act to amend the Income Tax Act, be now read a third time and do pass.
February 19, 1968

[DOT] (8:10 p.m.)


Michael Starr: Call the yeas and nays, Mr. Speaker.


Mitchell William Sharp: I think the hon. member misunderstood-


Michael Starr: Order, please. Mr. Speaker, please call the yeas and nays.


Mr. Deputy Speaker:: Is the hon. member
addressing his remarks to the Chair?


Michael Starr: Your Honour called third reading and we should like you now to call the yeas and nays. I wish the Clerk would sit down.


Mr. Deputy Speaker:: Shall I put the
motion, as moved by the Minister of Finance?


Michael Starr: That is right, yes.


Hédard-J. Robichaud: Mr. Speaker-


Michael Starr: On a point of order, Mr. Speaker. Your Honour called third reading and we have asked for the yeas and nays to be called. Let us proceed now, and not retract.


Mr. Deputy Speaker:: Order, please. I have put the motion for third reading as moved by the Minister of Finance.


An hon. Member:: But it was not seconded.


Some hon. Members:: Oh, oh.


Allan Joseph MacEachen: I rise on a point of order, Mr. Speaker. The Minister of Finance has not moved the third reading of the bill, and the motion has not been seconded.


An hon. Member:: Oh, yes, it has.


Allan Joseph MacEachen: With respect, it has not
been.


Michael Starr: What is the minister trying to do?


Mitchell William Sharp: Nothing.


Mr. Deputy Speaker:: Order, please. Do I understand that the Minister of Finance does not want the bill to be read a third time now?


An hon. Member:: At the next sitting of the house.


Mitchell William Sharp: No, no.


Some hon. Members:: Shame.


Gordon Minto Churchill: On a point of order, Mr. Speaker. You asked the house, "Shall the
Income Tax Act
bill be read now a third time," and the answer of the house was, yes. That put the matter in the category of where Your Honour must put the motion, and you were proceeding to put the motion. It automatically follows that the Minister of Finance, who is the mover of the bill, has called for or is moving for third reading, and I do not see how any retraction can occur at this time.
The house was specifically asked by Your Honour whether the bill should be read a third time, and the answer of the house was, yes. Your Honour should proceed with the instructions of the house. The Speaker carries out the instructions of the house always; that is what the Speaker does. Your Honour knows what the house has instructed you to do and we should proceed to third reading.


Hédard-J. Robichaud: Mr. Speaker, I was sitting next to the Minister of Finance-


Some hon. Members:: Oh, oh.


Hédard-J. Robichaud: -and when you stated that the Minister of Finance moves the third reading of the bill, the Minister of Finance, from his seat, said "No".


Michael Starr: The minister is mistaken, surely, because it did not happen that way.


Mitchell William Sharp: Mr. Speaker, I have no objection to third reading. I did not move the motion, and I am sorry if Your Honour misunderstood. I was trying to catch your eye. If it is the wish of the house, I am perfectly happy to have third reading.


Michael Starr: Then why is the minister trying to hold up parliament?


Mr. Deputy Speaker:: Perhaps the house would allow me a moment to clear up the difficulty. When I asked whether there should be third reading I understood that there was no objection.


Michael Starr: That is right.


Mr. Deputy Speaker:: I then proceeded to put the regular motion. In the meantime, I understand that there was some objection to third reading. If there was, I apologize, because I did not hear the objection.


Michael Starr: Would Your Honour call the yeas and nays.


Mr. Deputy Speaker:: Does the house wish to proceed with the motion for third reading?


Michael Starr: Yes.

February 19, 1968
Division


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the said motion?


An hon. Member:: On division.


Michael Starr: No, no, Mr. Speaker. Please call the yeas and nays.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Speaker:: I declare the motion lost.


Some hon. Members:: Resign, resign.	
And the order	having been read: Government order No. 1	, house again in committee
of supply:


Some hon. Members:: Ten o'clock.	

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

February 19, 1968


Herman Maxwell Batten: Supplementary estimates tor 1967-1968, the Department of Finance.


[Stage Direction]
4c. Administration-Grant to the endowment fund of the Vanier Institute of the Family-L'lnstitut Vanier de la famine, $236,869.
Edmund Davie Fulton: In the circumstances I would move that the committee rise and report progress, and Mr. Speaker resume the chair, in order to enable the government house leader to move the adjournment, which is, I think the appropriate course in the circumstances.


Allan Joseph MacEachen: We have called the business for the rest of the day, supply, Department of Finance, and there is no motion.


Edmund Davie Fulton: Then I move that the committee do rise and report progress.


Mr. Diefenbaker:: Do you remember February 5, 1963? It was a long road.
Motion (Mr. Fulton) agreed to: Yeas, 79; nays, 78.


Herman Maxwell Batten: I declare the motion carried.


Some hon. Members:: Hear, hear.
Progress reported.


Allan Joseph MacEachen: Mr. Speaker, I should like to call item No. 64 on the order paper.


Michael Starr: I rise on a point of order. I think that in view of what has transpired this evening there should be no more motions put before this house. The house should adjourn at this time.


Some hon. Members:: Hear, hear.


Mr. Speaker:: The hon. member will realize that it is not the responsibility of the Chair to adjourn the house at this time. It is the responsibility of the government to propose the business even at this late hour. It is always possible for the opposition to propose a motion for adjournment.
[DOT] (9:50 p.m.)


John George Diefenbaker: Mr. Speaker, on a question of privilege-


Some hon. Members:: Hear, hear.


John George Diefenbaker: There are always reasons to break rules and on this occasion I rise for the purpose of placing before you, Mr. Speaker, the position of affairs in which this house
Supply-Finance
now finds itself. It is a long road that has no ash cans.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I remember so well February 5, 1963, when the decision was made that the government was out. These were the people opposite who said that. Now let them live by their own words.


Some hon. Members:: Hear, hear.


Some hon. Members:: Resign.


Allan Joseph MacEachen: Mr. Speaker, I am delighted that the Conservative party has finally got a leader.


Lloyd Roseville Crouse: Don't you wish you had one?


Some hon. Members:: Hear, hear.


Some hon. Members:: Oh, oh.


Allan Joseph MacEachen: Mr. Speaker-


Some hon. Members:: Resign.


Mr. Speaker:: Order, please. I am sure hon. members will agree that there should be some measure of order in the house for the next few minutes. I still believe that my point was well taken when I suggested to hon. members that the procedure was clear, that if hon. members want to adjourn before the ten o'clock hour a motion can always be made for adjournment of the house. This I still suggest to hon. members is the correct procedure.
Order, please. The leader of the government has the floor.


Allan Joseph MacEachen: Mr. Speaker, we have called item No. 64 on the order paper, the second reading of Bill C-202, and the minister is prepared to make a statement.


Mr. Speaker:: Order, please. Perhaps I should be allowed to put the motion first and then we can proceed and it will bring us a little closer to ten o'clock.



NATIONAL HOUSING ACT


Mr. Speaker:: Mr. Benson, seconded by Mr. Sharp, moves that Bill No. C-202, an act to amend the National Housing Act, 1954, be now read a second time.


Gordon Minto Churchill: On a point of order.


Mr. Speaker:: Order. The hon. member for Winnipeg South Centre on a point of order.

February 19, 1968
National Housing Act


Gordon Minto Churchill: On a point of order, Mr. Speaker, I think under the circumstances, the government having been defeated and obviously quite leaderless, with a lame duck Prime Minister (Mr. Pearson) who is holidaying in Jamaica, it seems to me the only course open to the government is to adjourn the house now and have whoever is the leader take the appropriate action tomorrow. But there is another point I want to make, sir, and that is that when the house has reached a situation such as this it is within the competence of the Speaker himself to adjourn the house. It is obvious, sir, that no useful business can be carried on tonight and I suggest you exercise your authority.


Mr. Speaker:: The hon. member is suggesting that I take the powers vested in me to adjourn the house when there is disorder in the house. I suggest to hon. members that I should not be placed in this position.


Edmund Davie Fulton: Mr. Speaker, I raise a similar point of order to that raised by the hon. member for Winnipeg South Centre (Mr. Churchill). These occasions arise, whether happily or unhappily who knows, but there are precedents for them, and the most recent was in February, 1963. I put it to hon. gentlemen opposite that on that occasion when a defeat was suffered in the house the government accepted its responsibility to parliament and the country and immediately moved the adjournment of the house, so that it might consult with itself and find out what the appropriate thing was to do. We now have three minutes left tonight. My point of order to you and to the government is that the appropriate thing for the government is to move the adjournment of the house so as to not make it impossible to carry on in an orderly fashion the business of the country, because I say if the government insists on proceeding there will be disorder. The situation is clear. I suggest the government move the adjournment of the house.


Mr. Speaker:: Order, please. Is the President of the Treasury Board rising on a point of order?


Edgar John Benson: No, Mr. Speaker. I wish to proceed with the order of business which is before the house.


Some hon. Members:: No.


Michael Starr: You have not got the authority.


Edgar John Benson: We have a bill before the house-


Erik Nielsen: On a point of order-


Edgar John Benson: -to reduce the payments for people-


Some hon. Members:: Sit down.


Mr. Speaker:: Order. Is the hon. member for Yukon rising on a point of order?


Erik Nielsen: I am rising on a point of order, Mr. Speaker. I have not checked the precedents in a case of this nature but I well remember, as will hon. members in the house who were here at the time, the circumstances that occurred in February 1963, and surely it is a hollow mockery of the democratic form of government, after a government has been defeated, that it should have the arrogance to insist on placing business before the house which it has no hope-


Some hon. Members:: Hear, hear.


Erik Nielsen: Surely, sir, these people across the way do not rule by divine right.


Some hon. Members:: Hear, hear.


Erik Nielsen: They should resign.


Mr. Speaker:: Order, please. The hon. member is raising a point of order which was made previously.


Mr. Monteith:: It has to be driven home.


Edgar John Benson: Mr. Speaker, I can honestly say, if I can just continue for a few words-


Some hon. Members:: Order.


Edgar John Benson: -that hon. members opposite do not want-


Some hon. Members:: Order.


Edgar John Benson: -to make it easier to own homes in this country and-


Some hon. Members:: Order.


Edgar John Benson: -I would be quite pleased-
February 19. 1968


Mr. Speaker:: Order, please. May I suggest to hon. members that it is ten o'clock.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. May I take it that it is not the desire of the house to proceed with the adjournment business?
National Housing Act


Some hon. Members:: Agreed.


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


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, February 20, 1968