1968-12-03

[Stage Direction]
Second report of standing committee on transport and communications-Mr. Blouin.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.]

[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 Prime Minister with regard to his statement yesterday on the important subject of offshore mineral rights, and ask him whether the position of the government of Canada as outlined by the right hon. gentleman yesterday was put forward as a tentative position, a basis for discussion with the provinces, or whether on the other hand it represents a definitive position open to further negotiation in one respect only, that is in relation to the division of that portion of future revenues to be assigned to the provinces.


Righi Hon.   P.-E. Trudeau@Prime Minister: I wrote to the premiers of the provinces on Friday indicating that this was the best solution we had been able to devise, taking into account both the interests of all Canadians and the interests of the provinces. Even as to the part which the Leader of the Opposition suggests might be open to negotiation, the percentage of the division with the provinces, we do not think there is much room for negotiation there. We are suggesting a 50-50 deal. We would prefer it to be 60-40, 60 for the federal government and 40 for the provinces, but we doubt whether the provinces would think this was much of a negotiating point.
The negotiation, as we see it, would be mainly among the provinces so they could
come up with some agreement among themselves as to how this 50 per cent would be divided among them.
As to the mineral resource administration lines, they are not final and forever, in the sense that if the provinces were to produce a very good argument for drawing a geodetic line in a slightly different position we would certainly listen to it. However, as I said yesterday we attempted to draw these lines well within territory which we believe to be under federal jurisdiction, so we do not think there will be legal grounds, at any rate, for the provinces wanting, let us say, to draw lines further out to sea. We doubt whether they would want to do that, anyway. Maybe they would want us to draw the lines nearer to the shore. This could always be negotiated.
Apart from that, as to the general scheme I do not say it is not negotiable, in the sense that if the provinces had some much better solution we should not look at it, but the position we have taken was one we reached after very lengthy and mature deliberation. We thought the federal government had to make some offer. This is our offer, and we feel it is a good one.


Robert Lorne Stanfield: I gather the answer to my question is that this is a definitive statement of the federal position, subject to certain minor possibilities. I would therefore ask the Prime Minister to explain why the government of Canada has decided to abandon the commitment made by the former prime minister and renewed by himself to negotiate the question of offshore mineral rights.


Mr. Trudeau:: Well, Mr. Speaker, I do not know if the Leader of the Opposition was quoting me correctly or Mr. Pearson correctly. I think the words used were to the effect that we would offer some equitable arrangement to the provinces, and we feel this is an equitable arrangement.


Hon. George Hees (Prince Edward-Hasi-ings):: Mr. Speaker, I wish to ask a supplementary question. In his answer a moment ago the Prime Minister said that if the provinces should come up with a much better proposition the government would consider negotiating it or discussing it. Who is to
3412	COMMONS
Inquiries o{ the Ministry decide whether the proposition is a much better proposition? The provinces might consider that it is. Is it the federal government's decision?


Mr. Speaker:: I wonder whether the supplementary is not argumentative, but the Prime Minister may wish to reply.


Pierre Elliott Trudeau: Well, Mr. Speaker, reasonable men looking at this will have to take a position. I would very much welcome reasonable men on the opposition side coming forward with constructive alternatives. Do they think we should give more to the provinces, or less? I would certainly be influenced by any reasonable argument put forth by the hon. member opposite and by any of the provincial representatives. As I say, there is no magic in this formula. We thought it was the most equitable one we could find, 50-50 sharing, but if someone else has a better proposition we would certainly look at it.


Some hon. Members:: Hear, hear.


George Harris Hees: As a further supplementary question, is it the intention of the government to bring this matter forward for debate in the house soon, so the opposition can put up propositions they might think would be an advance?


Pierre Elliott Trudeau: Mr. Speaker, certainly on supply we would be very anxious to have ideas put forth from the opposition that can improve on this idea. They are generally not hesitant to give interviews on television and to the press. We read the results, and any good ideas would be welcomed by us.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Does the hon. member for York South wish to ask a supplementary?


Mr. David Lewis (York South):: Yes, Mr. Speaker. In view of the fact that the Supreme Court of Canada decision with respect to the case which was referred to it was based on certain historical facts and the legal interpretation of those facts, does the Prime Minister know whether other provinces are prepared to accept the conclusion that those rights belong to the federal authority? If not, is the government considering some way of resolving that problem?


Pierre Elliott Trudeau: Mr. Speaker, of course we do not know whether all provinces would consider themselves bound by this Supreme Court opinion. We have heard that some provinces

DEBATES	December 3, 1968
do not consider themselves bound by it. It is because of this that the government has been faced with the situation, of which all of us are aware, that there could be endless litigation.


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: The reference in the British Columbia case could begin again with every province, and indeed I suppose there would be nothing to prevent endless litigation by private companies that would try to get permits from one province or another. It is to avoid all this litigation that we have racked our brains to come up with some kind of equitable arrangement, and we think a 50-50 sharing is a pretty good place to start.


David Lewis: I am not suggesting that the arrangement proposed by the government is inequitable, but I would like to ask the Prime Minister this question. In view of the fact that it is certain that not all provinces accept the Supreme Court of Canada opinion, would it not have been wiser to place the government's proposition before a federal-provincial conference, such as the one that is convening in a couple of weeks? Would not the Prime Minister consider doing that even now, so that instead of the provinces being faced with a decision of the federal government there would be some consultation between the two levels of government, which is surely the best way to run a federal situation?


Pierre Elliott Trudeau: I have no objection to that at all if the provinces decided that is the place they want to debate it. I would just suggest that this would mean one more federal-provincial conference, because the agenda for the December one is already very full. Of course if the provinces want to set aside the agenda that has been suggested and deal with this first we certainly will not be stubborn about it. But one way or the other I felt it was important that the federal government state the proposition, or state the terms of a settlement out of court. This is all we did. If the provinces do not wish to accept that, there can be all kinds of arrangements; there can be federal-provincial conferences, references to courts and all kinds of conceivable arrangements. Once again the essence of the problem was time and to avoid endless litigation.


David Lewis: Mr. Speaker, the right hon. Prime Minister stated earlier that he wanted to avoid litigation. I hope he is not suggesting references to the court as a livable alternative. I would ask him whether the federal
December 3, 1968

government should not take the initiative in suggesting to all the provinces that a conference might be held to discuss this particular matter. A delay of another month will not matter very much in respect of this particular issue.


Pierre Elliott Trudeau: Well, Mr. Speaker, for years now the opposition and the hon. member in particular have been telling us we were not doing enough about the constitution. We are planning to do something about the constitution in December, and now they suggest we should set this agenda aside and deal with the matter of off-shore mineral rights.


David Lewis: I rise on a point of privilege, Mr. Speaker.


Mr. Speaker:: The hon. member for York South on a question of privilege.


David Lewis: I respectfully suggest to you, Mr. Speaker, that the Prime Minister has no right to distort words spoken by another member. I did not suggest that this conference be set aside; in fact I said that a delay of another month or so on this issue would not matter. I am sure the right hon. gentleman understood me to mean that this would not interfere with the conference this month but that another conference should be held at a later date. I resent this political play.


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: Mr. Speaker, I apologize to the hon. member. I honestly thought he was suggesting that the subject be dealt with in December. If he means at some later conference, I can only answer that last Friday I wrote to the provinces asking them for their views on the whole subject. If they are of the opinion that a federal-provincial conference should be held, then I am certainly willing to have one.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I would like to ask a supplementary question about that same matter.
Since the Supreme Court rendered its decision, has the Prime Minister heard from some provinces protesting that decision or have some provinces said they intended to contest it or asked the central government to organize a meeting to discuss that decision?


Pierre Elliott Trudeau: Mr. Speaker, I do not think definite representations were made to that effect. I read in the newspapers, as the hon. member undoubtedly did, statements by some
Inquiries of the Ministry provincial premiers who disagreed with the ruling but, to my knowledge, all the provinces were waiting to see what we meant, first by Mr. Pearson, and then by myself, when we stated that we would propose an equitable basis for a solution. And now that we have put it to them, we are awaiting their reply.


Robert Lorne Stanfield: Mr. Speaker, I wish to ask one more question relating only to the point of whether the Prime Minister is now honouring the obligation stated by his predecessor. I should like to quote from the statement the Prime Minister made yesterday and ask him whether this is an accurate account of what he said in the house yesterday, as reported at page 3342 of Hansard:
My predecessor, Mr. Pearson, indicated at the federal-provincial conference of July 1965, and I repeated in the house on September 19, that we intend to proceed now by negotiation.
I should like to ask the Prime Minister whether in fact that is what he is doing.


Pierre Elliott Trudeau: Yes, Mr. Speaker. We put forward a proposition. I repeat that if some better propositions are available we will certainly want to discuss them, but we have to start with something. We feel this is a good starting point.


Robert Lorne Stanfield: So it is a starting point.


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a further supplementary question for the Prime Minister. I ask the Prime Minister whether he would consider legislation passed in this house to be reasonable; and would he say whether it would be fair for the law officers of the crown to retain the interpretation they adopted at the time that legislation was passed?


Pierre Elliott Trudeau: Mr. Speaker, I do not think I should be asked to make a blanket statement that all decisions made in this house are reasonable.


Mr. Speaker:: Order, please. I think we should move on to another subject. As hon. members know, supplementary questions are allowed at the discretion of the Chair, and there must be a point at which we should go on to another subject. If it seems we run out of questions or new subjects at a later time perhaps we can return to this one.


Donald MacInnis: mond): On a further supplementary question, Mr. Speaker-
3414	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. If I should
allow further supplementary questions now, it seems there are two or three other members who wish to pose them. Later on I shall return to the hon. members for Cape Breton-East Richmond and Charlevoix.


Donald MacInnis: I have a further supplementary
question.


Mr. Speaker:: Order, please. I wonder
whether the hon. member will accept my suggestion that we go on to another subject, and perhaps return to this matter later in the afternoon.


Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister.
In view of the fact that decisions rendered by the Supreme Court with regard to constitutional matters-like the one concerning the off-shore mineral rights which was referred to lately-have not always been accepted by all the provinces, will the right hon. Prime Minister, or the government, decide some day, in order to settle constitutional conflicts between the provinces and the federal government, to set up a constitutional court on which representatives of the provinces and the federal government would sit, so that the decisions rendered by the said court would bind all those concerned?


Pierre Elliott Trudeau: Mr. Speaker, at the constitutional conference in December we intend to make certain proposals concerning the Supreme Court and we hope that, as a result of that conference, the Supreme Court will not come under federal jurisdiction but under the constitution itself, in a way which will be considered satisfactory by the provinces.


Martial Asselin: Mr. Speaker, I should like to ask a supplementary question.
Does the Prime Minister mean that the federal government will suggest to the provinces that a constitutional court be established to deal with the jurisdiction conflicts existing between the federal government and the provinces?


Pierre Elliott Trudeau: Mr. Speaker, I would not wish the hon. member to press me for a definite statement on the position of the government. I spoke of the matter in a general way, but I am following the rules of the game accepted by federal and provincial officials

DEBATES	December 3, 1968
according to which these discussions are to remain confidential until very shortly before the conference itself.
[English}


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like now to pursue the question which I originally intended to ask the right hon. Prime Minister with regard to offshore mineral rights. Did the Prime Minister write to the landlocked provinces, such as Alberta and Saskatchewan, with regard to the decision of the federal government? If so, is this an admission on his part that these provinces are also entitled to a share of the wealth?


Mr. Speaker:: Order, please. Perhaps only the first part of the question is in order.


Pierre Elliott Trudeau: If this is an answer to the hon. member's question, I would say that I wrote to the premiers of all provinces.


Stanley James Korchinski: Then as a supplememtary question, Mr. Speaker, may I ask the Prime Minister whether the provinces are entitled to make submissions to the federal government, or must they consult with the other provinces if they feel they should get a portion of the wealth?


Pierre Elliott Trudeau: Well, Mr. Speaker, we hope this is the type of question that the provinces would be able to settle amongst themselves. Of course if they cannot, and if they want to come to the federal government for guidance, we will gladly give it to them.


Mr. Baldwin:: God help them.



NATIONAL CAPITAL


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister.
Has the right hon. Prime Minister, or the government, entered into negotiations with the authorities of the city of Ottawa-the national capital-with a view to its becoming a bilingual city as soon as possible, notably with regard to road signs?


Mr. Speaker:: Order. I wonder if that question is not too general in nature to be put at this time. In any event, I shall allow the
December 3, 1968

hon. member to put it and the right hon. Prime Minister to answer.


Righi Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I agree with you. The question is too general in nature but it may be that the hon. Minister of Forestry and Rural Development can answer it, if the hon. member directs it to him on another day.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I should like to ask the Secretary of State or his parliamentary secretary whether they will give an assurance that the CATV application by the city of Edmonton will be processed by the Canadian RadioTelevision Commission, reversing the brusque rejection of the application by a civil servant, namely the secretary of the commission.


Mr. Speaker:: I have some doubts whether the question as asked is in order.


Steve Eugene Paproski: Mr. Speaker, in view of the fact that the city of Edmonton owns its own telephone system, and CATV is merely a relay system operating on telephone cables, will the minister inquire by what right, or in virtue of what statute, the city's application was summarily rejected without even being given a hearing by the commission; and will he ensure that such a hearing is accorded in the interests of justice?


Mr. Speaker:: This is a good question and an even better argument.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Barry Mather (Surrey):: Mr. Speaker, I wish to address a question to the Prime Minister. It is a constitutional question of a type different to those asked earlier. My question refers to the "Private property" type of sign posted at Government House gate by the new Lieutenant Governor of British Columbia, and the removal of that sign by provincial authorities. Is the government aware of this situation, or will it look into it?


Mr. Speaker:: Order, please. I suggest to the hon. member that the question should be placed on the order paper.
Inquiries of the Ministry CANADIAN BROADCASTING CORPORATION



PROTEST AGAINST PROGRAM RESPECTING ALGONQUIN PARK

[Stage Direction]
On the orders of the day:
Mr. Leonard Hopkins (Renfrew North):: Mr. Speaker, I have a question for the Secretary of State but in his absence I direct it to the Prime Minister. Because of the completely biased portion of the C.B.C. program "The Way It Is" regarding the lumbering and tourist industry in Algonquin park, which appeared on the C.B.C. Sunday night, would the minister request the C.B.C. not to use public funds to promote a one sided view of the Algonquin park issue which would result in the loss of employment for thousands of people in the upper Ottawa valley region of eastern Ontario?


Mr. Speaker:: Order, please. This also is an argument and not a question.


Leonard Donald Hopkins: Ten o'clock, Mr. Speaker.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Speaker:: The hon. member for North Shore.


Some hon. Members:: Oh, oh.


Mr. Speaker:: The hon. member for South Shore.


Mr. Lloyd R. Crouse (South Shore):: You
have your compass points a little mixed up, Mr. Speaker. I wish to direct a question to the Minister of Fisheries. An interim report on the joint government-industry marketing survey now under way has been distributed to participating governments by the management consulting firm which is conducting the study. In view of the serious marketing problems presently facing the fishing industry, has the minister any announcement to make with regard to this report or its recommendations for expanding fisheries markets?


Hon. Jack Davis (Minister of Fisheries):: Not immediately, Mr. Speaker; but these reports and others like them are receiving very serious consideration. I hope to be able to make a statement to the industry within the next few weeks.
34 i 6
December 3, 1968

Inquiries of the Ministry HEALTH AND WELFARE



STEPS TO OVERCOME SHORTAGE OF MEDICAL PERSONNEL

[Stage Direction]
On the orders of the day:
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I would like to address a question to the Minister of National Health and Welfare. In view of the alarming statement by a select committee of top medical doctors in Canada to the Medical Research Council of this country that the federal freeze on health resource grants might destroy all possibility of admitting more medical students, so urgently needed with medicare being pushed across Canada by the federal government, would the minister consider this problem when the federal and provincial ministers meet in December?
Hen. John C. Munro (Minister of National Health and Welfare): Mr. Speaker, the problem of adequate facilities for the training of health personnel is always an important matter, and undoubtedly we will be discussing this question with our provincial counterparts.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Andre Fortin (Lcibiniere):: Mr. Speaker, I have a question for the Minister of Transport but, in his absence, I will direct it to his parliamentary secretary.
Air Canada has ordered 10 L-1011 jets from the Lockheed Company which, it seems, would agree to certain parts being made in Canada. Could the parliamentary secretary confirm at this time that agreements are now being negotiated between Canada and the company so that parts used for building these jets may be made in Canada and Canadian manpower may be used?


Mr. Speaker:: I think the question could be put on the order paper. If it is urgent the hon. member could discuss it at the time of adjournment.



PROCEDURE IN CONSIDERING RECOMMENDATIONS OF COMMITTEES

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Prime Minister. Is the government going to amend the rules of


procedure so that decisions taken by standing and special committees of this house can be rescinded should such decisions prove unwelcome to the government, as is presently being attempted in the standing committee on transport?


Mr. Speaker:: Order, please. The question is argumentative and I do not think it is acceptable in that form.



RURAL DEVELOPMENT


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Minister of Indian Affairs and Northern Development. In order that we may have full and informed public discussion, will the minister table the ARDA report on Indian poverty areas, excerpts from which have been published in the press?

Hon. Jean Chretien (Minister of Indian
Affairs and Northern Development):	Mr. Speaker, unfortunately, I am unable to table this report immediately. However, I hope to be able to do it at the beginning of next month. According to the rules, we are waiting for the French translation before tabling this report.


Robert Simpson: Mr. Speaker, I wonder
whether I could have the permission of the house to table the report myself.


Some hon. Members:: Agreed.


Donald MacInnis: Mr. Speaker, on a question of privilege-


Some hon. Members:: Oh, oh.


Donald MacInnis: -in that the hon. member for Churchill has referred to a document which he indicated his willingness to table, I think it would be within the rules if the hon. member now tabled that document.


Pierre Elliott Trudeau: In both languages?


Mr. Chretien:: Mr. Speaker, I rise on a question of privilege.
I was listening to the simultaneous translation and I did not understand very well. I
December 3, 1968

thought that reference was made to the Hawthorn report, but I realize now that it was the ARDA report. Now, as the ARDA report does not come under my department I do not have authority to answer in that connection and I apologize to the hon. member. I had understood that it was the Hawthorn report, the second volume of which will be tabled next month.

Mr. Maclnn's (Cape Breton-East Richmond}:
I rise on a further question of privilege, Mr. Speaker. It is a struggle for opposition members to make the government realize what they should and must do. It takes a request such as this to make the ministers of this government realize what they are responsible for.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In connection with the reassessment of Canada's defence and foreign policy, will the minister tell us whether a position is being formulated for the government of Canada with regard to any restructuring of the United Nations?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, it had not
been our intention, in the review of our foreign policy, to deal specifically with that question. It seems to me this is a question relating to the United Nations itself. We have, of course, views, as I am sure the hon. gentleman has, about the structure of the United Nations. I do not think that would form part of our foreign policy review.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Dartmouih-Halifax East):: Mr. Speaker, my question is for the Minister of Defence Production. He looks neglected today. I wonder whether he is now in a position, inasmuch as some time has gone by, to bring the house up to date on the results of 29180-217J
Inquiries of the Ministry negotiations that took place some time ago between himself and union officials of Fairey Aviation.


Hon. Donald C. Jamieson (Minister of Defence Production):: Not in a short answer, Mr. Speaker, but if the hon. gentleman-


J. Michael Forrestall: Then in a long one.


Donald Campbell Jamieson: If the hon. gentleman would care to check with me later I will give him the latest report. I believe there is one in the mail to him right now.


J. Michael Forrestall: A supplementary question, Mr. Speaker. Could the minister say whether it is a favourable one?


Donald Campbell Jamieson: The hon. member can decide that when he gets the answer.



COMMUNICATIONS


[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the laconic Postmaster General. Will he advise when he plans to table the report of Mr. McIntosh in reference to the financial and administrative structure of the proposed communications satellite corporation?


Hon. Eric W. Kierans (Postmaster General):: Mr. Speaker, we have not yet considered the tabling of this report, but I will raise the matter with my colleagues.


Heath Nelson Macquarrie: A supplementary question, Mr. Speaker, I ask the minister whether the report has been received, and if so, is it now being studied?


Eric William Kierans: It has been received, Mr. Speaker, and is being studied. But there are many other issues involved before we can decide if it is suitable to table the report.



HOCKEY-ASSISTANCE TO CANADIAN NATIONAL TEAM

[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Has Canada's national hockey team received substantial assistance from the government, and if so, in what amount?

December 3, 1968
Customs Tariff


Mr. Speaker:: Order, please. Unless hon. members think the information should be given, I suggest this question should be placed on the order paper. But if there is unanimous agreement on the part of hon. members-


Some hon. Members:: No.


Mr. Speaker:: There is no agreement. I would think this type of question should be placed on the order paper.


Walter Gilbert Dinsdale: With deference, Mr. Speaker, in view of the fact that the current hockey season is well under way and Canada's national team is engaged in important international competition, could the minister indicate whether assistance has been forthcoming from the government this year, and in what amount?


Mr. Speaker:: Order, please. The hon. member is asking whether assistance has been given. If he thinks there is urgency in a question asked in this form, the matter could be discussed at the time of adjournment.
[DOT] (3:10 p.m.)



CUSTOMS TARIFF

Hon. C. M. Drury (for the Minister of Finance) moved: the second reading of Bill No. C-131, to amend the Customs Tariff.


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


Hon. Marcel Lambert (Edmonton West):: No, Mr. Speaker.


Mr. Speaker:: Order, please. Since no one rose I took it there would be no debate, but I am quite prepared to recognize the hon. member for Edmonton West.


Marcel Joseph Aimé Lambert: Mr. Speaker, there is a wall of noise between Your Honour and this part of the house, and notwithstanding your most valiant efforts even the microphone is of no assistance in carrying your voice this far. I thought there would be a statement from the government at this stage. In view of the fact that the Minister of Finance (Mr. Benson) is not present this afternoon, his parliamentary secretary is going to carry on in his stead. But since there is to be no such statement I propose to make a few remarks at this stage of the bill, not having had an opportunity, because of demands on my time in another place, to do so at the resolution stage. Some of my colleagues may also wish to address a few remarks at this stage.

This bill in fact brings before the house the proposals that were contained in the budget of November, 1967, which formed part of the Kennedy round of negotiations that Canada entered into. The committee on finance, trade and economic affairs considered the bulk of these resolutions from January to March, 1968. So in view of all this we must realize that we are being asked to discuss very old matters. I must say that I think this rather awkward performance, and something else which I will raise before Your Honour in a moment, represent part of the price that had to be paid because the Prime Minister decided to call an election for purely personal and electoral benefits. This may be all right. I see the Minister of Defence Production nods his head in satisfaction, or perhaps in self-satisfaction because he benefited from the move. In so far as Canada is concerned, however, we find ourselves in a difficult position internationally as a result of this action, and so does the house. This bill could have been brought forward much earlier if the government had seen fit to do so. As a matter of the fact, the house, in relation to this bill as well as the anti-dumping convention, is the victim of this lack of planning.
Many plaintive assertions have been made from the government side about the difficulty of putting the legislation through. I say to them that they are falling into the same pattern of scheduling legislation in the same disarrayed fashion as happened in 1963 and 1964. In such cases the opposition is often blamed and a great case is made before the press and other communications media which, like so many innocent lambs, swallow this propaganda. The records indicate otherwise. The house knows that this legislation has been produced following long negotiations. We went through all of this in committee. It seems to me it would have been quite simple to have it brought forward as one of the first items on the order paper so that his house could discharge its commitments honourably and without pressure.
Having said this, I want to come to the other point. I know that the government engaged in the very dubious procedure of resorting to the Financial Administration Act for authority to pass an order in council last spring giving some patina of legitimacy to these proposals, not only the Kennedy round proposals but the budgetary proposals in which the present Secretary of State for External Affairs proposed to increase certain duties on liquor and tobacco. I protest with all the power I have against this procedure of
December 3, 1968

using an order in council to validate or attempt to validate the collection of taxes. In the terms of the order in council-and the hon. member for Winnipeg North Centre (Mr. Knowles) has put them on the record-it is stated that these taxes shall be deemed to be valid as though the legislation had been passed.
We know in what contempt this administration holds the house. We know their impatience with democracy. We know what they are going to propose with regard to the rules of this house whereby only one group of 25 to 29 men will count. The order in council was not a proposal made by the house but by the government. Hon. members on the other side who are not members of the treasury must keep in mind that they are not part of the government; they are only part of a government majority and members of the House of Commons no more and no less than hon. members opposite. Hon. members who sit in the rump and are the clamorous section of this house must also realize they are not members of the government. In spite of this we have this particular attempt of last April. I want to warn the house of this and draw it to the attention of those people who are supposed to comment about irregularities in the procedures of the house and in government. They should pay attention to matters of this kind rather than to some of the trivia reported about this administration such as the description of the Prime Minister (Mr. Trudeau) swinging on a pole in Yorkville. They should report what was done here last April when this order in council was passed. This is a precedent which might be resorted to again. Unsatisfactory or unacceptable tax proposals might be brought forward in this way by the back door.
[DOT] (3:20 p.m.)
Even if parliament had been dissolved, Mr. Speaker, the same action could have been taken in regard to that infamous occasion following the income tax bill. An order in council could have been passed under the authority of the Financial Administration Act, which I suggest is a highly questionable procedure. The tax proposal of last spring which was defeated in this house could actually have been implemented under the guise and authority of an order in council validating the collection of taxes thereunder as though the legislation itself had been passed. But even if the house had been dissolved, no doubt another tame majority would have come along and swept the matter under the rug.
Customs Tariff
This is the way this administration is trying to trample on the rights of the members of this house.
A great deal is made, Mr. Speaker, of responsible government. I suggest to you that the word "responsible" is being given the wrong meaning. It is a question of acting responsibly, in other words, that the government is credible. In addition, and principally, the treasury benches must be responsible; in other words, they must account to this house for their actions. Yet here, there and at every turn the government is striving to remove accountability and responsibility. The government is becoming responsible to its own dignity, to the dictates of the one man who leads it; I will have more to say about this later during the session.
In our system of government in the western democracies, Mr. Speaker, there is not one man as powerful as the Prime Minister of Canada. In Britain the Prime Minister is even more powerful, in a political science sense, than is the President of the United States. The President of the United States is surrounded by checks and counterbalances; in Canada there are none of these. In Britain the House of Lords acted as a check on the government but now its powers are being restricted. That is again evidence of the same pattern. One must weep at what the administration has done to the democratic, responsible system of government which once existed at Westminster. That parliament has now become the tool of the administration.
My point is, Mr. Speaker, that this legislation was validated last April by order in council, and it is relevant to show how this government has acted in the context of discussing the change of duty on tequilla that is provided for in this bill. Since the excise tax bill is raising the duty on beer and spirits generally, I do not think I need say more at this time because the excise bill itself has been accepted. As a result there are consequential amendments to the Customs Tariff Act.
With regard to the Kennedy round, Mr. Speaker, I think members in all corners of the house welcome the end result, or what is anticipated to be the end result, of the negotiations. We hope that the same spirit continues, notwithstanding some very disquieting reactions in certain countries. We have heard from the common market countries, as a result of the exigencies of international financial crises, talk of border taxes, further countervailing duties on imports, and that

December 3, 1368
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sort of thing. This evidences the fact that there is already, shall we say, some rocking of the international trading boats.
With regard to the justification of these Kennedy round changes, Mr. Speaker, hon. members may have some particular comments to make about how the British preferential tariff and the most favoured nation tariff are going to affect industries in one part or another of the country. In some areas hon. members may wonder why there has been a greater front-end loading of the changes than in other sectors. Seme members may wonder why certain commodities were or were not included in the changes.
However, Mr. Speaker, it was represented to us by Canada's negotiators that these changes have been made after very difficult negotiations that took place over a span of years on a commodity for commodity basis. Canada could not accept the proposal of the United States for an across the board reduction because Canada and the United States have different industrial and primary resource patterns. I think our negotiators were correct in approaching the negotiations in this way. We must develop our secondary industries. However, some of our primary industries are very important and it may be that in the result there will have to be some very agonizing adjustments made. I hope that these will be less agonizing than is feared and that adjustment loans and other assistance will be made, I do not like to use the word liberally-


Donald Campbell Jamieson: It has good uses sometimes.


Marcel Joseph Aimé Lambert: I would use it with a very small "1"-so that the maximum benefit is extended to Canadian industry as a result of government action. I would hate to think that the measures which are to compensate for these changes are going to be administered, shall I say, in the most difficult, mortgage company sort of way, if I may use that term-and I apologize to the mortgage companies for using it. What I mean is that I hope things will not become extremely difficult and legalistic methods used to deny individuals assistance. It is in the interests of the Canadian government to assist these industries as much as possible rather than assisting them only after the government has presented them with a list of qualifications ten pages long. This approach, to me, Mr. Speaker, is wrong.
[DOT] (3:30 p.m.)
A spokesman for the government has said: "Yes, we made these concessions; but our

trading partners made companion concessions, and these will give Canadian industry a much greater chance to expand its trade". Well, Mr. Speaker, there I pause because I think a reliance on what is expected to be a natural consequence would be dangerously naive. Why do I say that? I say it simply because so many of our trading partners use non-tariff barriers which were not part of the negotiations under the Kennedy round. Let us all admit that. My goodness, if we consider some of the trading practices of some of our trading partners we may wonder why we call them partners. I will not quote a list of countries that impose quotas or border taxes, that have special financial requirements or that, like our friends to the south, introduce special building codes under their federal housing administration or ask their people to buy American under their "buy American" legislation. In Britain, too, they have restrictions. The central electricity authority can only buy from the provisioners in England and cannot give others specifications. The Japanese have their restrictions; incidentally, we also have quantitative restrictions on trade because the trading practices of some of our trading partners have had a deleterious effect on our production. It is for these reasons that I say that too great a reliance on increasing our proportion of exports as a result of the Kennedy round negotiations is naive.
Our exporters will have to sharpen their pencils and become more aggressive. Our government will have to assist them to become more aggressive, not necessarily by grants, in which I do not believe, but by providing services through our trade commissioners. Yet I say this: I do not care how much you assist production or how much you increase production; unless you sell the goods you produce at a profit the exercise has been completely and utterly useless. As a matter of fact, it will have been a disservice to the nation.
I will not discuss any matters in detail at this time since I prefer to discuss them clause by clause. There is one exception to this. Yesterday afternoon I asked the Minister of Industry, Trade and Commerce, who is the minister responsible, a question about the machinery advisory board since the importation into Canada of machinery at a reduced or entirely waived rate of duty has been transferred to his jurisdiction. If hon. members will consult the transcript of evidence taken at the committee hearing they will see that I questioned this transfer of jurisdiction. This is a question of duty, Mr. Speaker, and
December 3, 1968

as such, in my thinking should have remained with the Department of National Revenue. It is not a question of building another empire under the Department of Industry.
I do not want to dwell at great length on the vicissitudes of the Department of Industry or on the great pains that some took to justify its separate existence and extension. Despite the unanimous view on the part of the opposition that it should never have had a separate existence and should have come under the Department of Trade and Commerce, with a changed name perhaps, we And after four years and an expenditure of $4 million that we now have a Department of Industry, Trade and Commerce.

Mr. Speaker, the more things change, the more they are the same. Do you not agree?
[English}
It is my view, therefore, that we would have been better advised to maintain the machinery advisory board under the Department of National Revenue. We need not call it a board. I also think that section 15 of the Department of Industry Act never contemplated the setting up of this type of thing. The house was never really advised what would be the case, and what happened happened in general terms. I therefore feel that that operation would have been better carried out under the Department of National Revenue.
I have stated my reasons and reservations with regard to the ultimate considerations that may move the cabinet and the minister to pass orders in council remitting duty. I think that here there may be a subject of, shall we say, equivocal decision. In this area equivocal decisions may be made by the governor in council under legislation. It is all set out in the minutes I referred to and I will not repeat it. I merely invite hon. members to see what was said at that time. From the way the officials that were concerned answered certain questions I thought they were at some pains to justify the procedure that had been outlined.
Since there are other members who wish to make statements at this time I will conclude my remarks until we come to the individual items.


Mr. John Burton (Regina East):: Mr. Speaker, having regard to the subject matter of the bill before the house it is only natural, I think, that we should consider the philosophy
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of free trade. Perhaps most hon. members pay tribute to this philosophy; certainly this party is committed to a policy that favours the freeing of international trade, not only with regard to this country but with regard to the entire world. We feel that free trade would contribute to international economic development, to the economic development of Canada and would materially contribute to the eazing of world tensions. Nevertheless, when we consider all these problems we And that talking about them is much easier than solving them. Factors beyond Canada's control militate against our pursuing the objective of free trade in world markets. Since other countries follow policies which tend to restrict world trade, those policies are some of the factors that are beyond our control.
This afternoon I wish to refer brieffy to a number of matters which are within our jurisdiction and competence and the factors we must consider when discussing the implementation of this bill. When the Kennedy round negotiations were begun there was great hope throughout Canada and many parts of the world that trade might be liberalized. Unfortunately, what we have achieved is something less than what we hoped for.
It is important for us to recognize the limitations of the gains which have been made as a result of the Kennedy round negotiations. Although we approve of the gains that have been made we must recognize that we have not achieved all our original objectives. We must also recognize that those gains will not all produce fundamental changes which are desirable. At the same time there is a need for constant vigilance with respect to world trade and trading patterns. We need to measure the impact of the changes being made in the Customs Tariff and take action to deal with effects which may hurt or hinder sections of the Canadian economy. I have in mind, particularly, certain problems which may be faced by the agricultural industry. I have already referred to some of them during the resolution stage of the bill, and the parliamentary secretary has also made some comments in this connection. I have no wish to labour the point at this stage, but I repeat my recommendation that the government keep in constant touch with the effects of these changes on various sectors of the Canadian economy.
[DOT] (3:40 p.m.)
The whole subject matter of this bill and related measures is, of course, an integral part of Canadian history. There is no need to

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repeat the story involved in the debate which has traditionally taken place in Canada between advocates of free trade and advocates of protection. New approaches are needed today and new approaches are on the way. We are long since past the stage of the infant industries we once knew in this country. Indeed, Canadian industry has now reached a point at which we should be considering the problems raised by maturity and the steps which should be taken in the light of the maturity in our industry and in our economy.
One important step which I feel could contribute materially to the further development of our industry is, of course, the establishment of a Canada development corporation. I do not, of course, intend to discuss this subject now; we have been told that a measure to this effect will be brought before the house during the present session. I, for one, will welcome it, and I hope that when it is introduced the bill will be a much more effective measure than has been indicated so far.
This afternoon I should like to discuss some of the policy considerations arising out of the changes we are considering in the Customs Tariff. The first concerns the necessity for redirecting some of our trading operations. I raised this matter on the resolution stage and I should like to refer to it again briefly. It is well known that some 60 per cent of our trade is carried on at present with the United States; it is only natural that a great deal of it should go in this direction. It has been suggested on many occasions that some redirection of our trading pattern is desirable. The Kennedy round concessions are such as to affect to a great extent our trade with the United States. Indeed, it has been noted by the government itself as well as by publications dealing with this subject that a great many of the concessions which involve Canada affect our trade with the United States. This situation, it seems to me, will result in problems still greater than those we have been facing over the past number of years.
I have already suggested that in order to achieve some measure of redirection of our trading pattern we might consider the whole area of light consumer goods in which we presently trade. Many of these goods now come from the United States. If these articles were bought from other countries with which we would like to increase our trade, I think it would result in a better balance of trade in the long run both with the United States and with other countries of the world.
Reference has been made to the question of foreign ownership. I think this is closely

related to our trading pattern. It comes up again when we consider such matters as the rationalization of industry and the restriction one now finds on the further development of secondary industry in Canada when it comes to making greater and better use of raw materials produced in this country. This subject is referred to in the Watkins report, which is familiar to most hon. members. The Watkins report made a number of recommendations for dealing with these problems. For example, it referred to the possibility of setting up a state trading agency which could deal with United States subsidiaries which face the restrictions involved in the trading with the enemy act across the border.
We must also recognize, I think, that the corporate decisions of multi-national corporations are often not related to the national interest of Canada. It seems to me the government is responsible for taking action to ensure that Canada's national interest is protected. It could also be said, I believe, that in many instances these companies, multinational corporations among others, would play the game if the government were to set out the rules under which they had to carry on their operations and make their contribution to the Canadian economy.
There is one other area which, in my view, is related to our considerations today. It has to do with the rationalization of industry. This, it appears to me, is a necessary complement to the liberalization of trade. The process of rationalization has in many cases been hampered by past policies and by the pattern of ownership of Canadian industry. It should be borne in mind, too, that the achievement of free trade does not necessarily bring with it the economic benefits we would all like to see. Hon. members have already referred to the difficulties arising in connection with farm machinery. Even though provision has been made for the free movement of farm machinery across the border with the United States, this has not in fact produced all the benefits we would like to see.
Mention should also be made of monetary policy and its relation to the subject now under consideration. Canadian freedom with respect to monetary policy has, of course, been restricted in recent years. I feel we ought to revise our monetary policy. We have heard references to the desirability of a floating exchange rate, an idea which even some members of the government have recommended from time to time. It is, of course,
December 3, 1968

necessary to follow a policy of full employment if we are to take advantage of some of the opportunities which may be opened up by wider trading opportunities.
In summary, it is important that we do not overestimate the gains and concessions which have been achieved through the Kennedy round. Although we have approved them, it would be a mistake to suggest that in themselves they provide any fundamental solution to the difficulties facing the Canadian economy. Furthermore, we are bound to give consideration to the policy implications of this measure, namely, the redirection of our trade, foreign ownership of our industry, the necessity for the rationalization of industry and the necessity for the revision of our monetary policy.


Mr. H. W. Danforih (Kenl-Essex):: Mr. Speaker, I think that in the past four years no measure passed by this house has so profoundly affected the livelihood of Canadians as will this bill which has been proffered by the government for our approval at the present time. I do not think any piece of legislation has received more publicity over the months than this bill, nor has any standing committee of the house been engaged more earnestly in the consideration of representations. This emphasizes the genuine importance of the legislation.
[DOT] (3:50 p.m.)
I must pay special tribute to the negotiators on the Canadian team at Geneva who worked tirelessly for many years, but I think they will be the first to admit that in many ways this legislation may be obsolete even before it is implemented. I say this because of the fact that the trading patterns of the world are constantly changing, perhaps faster in the present day and age than ever before in the histories of the nations involved in the Kennedy round negotiations. I think this must be taken into consideration by Canada, as I am certain it is by other nations, in looking at the terms and provisions of the bill before us.
For many of our Canadian industries and for agriculture in particular, any talk or discussion about changing tariffs is a matter of very real concern. Many of our industries are directly dependent on protection for survival because of the manner in which government has run the affairs of the nation over the years. Many industries have expanded under
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the climate provided for them. Now they suddenly find that the very government regulations permitting their existence may be changed by the stroke of a pen.
Last spring, Mr. Speaker, there was merely an intimation by a cabinet minister that certain provisions could be changed and the normal pattern of an agricultural industry disrupted. I am speaking of the Canadian greenhouse industry. That was enough to change the credit rating of particular companies with certain banks, and in the end some found it impossible to survive and went into bankruptcy and others were very hard pressed. Over the past few months we have seen the government act by the implementation of additional duties and the application of nontariff barriers to prevent the inflow of free trade in certain commodities into Canada in an attempt to stave off bankruptcy for some industries.
There is no doubt that the aim and object of those negotiating at Geneva, to encourage freer trade among nations, were advanced with a definite goal and idea in mind, but we here in Canada must take a hard look at the facts as we see them. Will Canada and its industries in their present form survive under a change in the tariff items, which are to be progressively lowered over the next five years? Or will there be a drastic upheaval in Canada? We are told, and perhaps rightly so, that by the genuine desire of all nations to lower tariffs and permit a free exchange of goods Canada will directly profit. A classic example is the fact that this will open up the large market to the south of us for an expansion in our exports.
A previous speaker has pointed out the fact, and quite rightly so, that although there is no tariff on farm machinery so far as Canada is concerned this has not expanded the Canadian industry. As a matter of fact, it appears to me that whenever an action like this is taken we see a very rapid expansion in the use of our Canadian market by the country to the south of us and a consequent deterioration of secondary and primary production here in Canada.
I give another illustration. There is no duty on the importation of soybeans into this country, with the direct result that our market depends entirely on prices established in another country. If those prices were not pegged at a minimum level by government action in the other country, prices here could drop to a point where it would be absolutely

December 3, 1968
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impossible to have economic production of soybeans in this country.
No one from the government side, in the house or in committee, has shown how we shall recover economically the moneys lost by the reduction of tariffs between countries. The classic example generally put before us is the automobile trade pact between the United States and Canada. I think that this is a far greater industry managed market than any of us imagine, which brings up another point.
It occurs to me that when there was tremendous pressure brought to bear at the Geneva conference on nations belonging to the GATT organization to lower tariffs, perhaps the primary reason behind it could have been more of a selfish than an idealistic or philosophic one. It seems to me that when we have a reduction in tariffs straight across the board, as was requested by the United States but a negotiated one so far as the Canadian negotiators were concerned, it lends itself ideally to the changing trade patterns of which I spoke under which we now have the formation of international corporations. No longer are we faced just with the importation into a market in Canada of produce in short supply or produce to supply a market that has been cultivated by local producers. No longer is it just a matter of certain importers, wise in the ways of business, taking advantage of short supply. It seems to me that the customs tariff reductions we are faced with today provide the very climate necessary for international corporations to purchase wherever and whenever they choose on the markets of the world goods in surplus supply at fire sale prices and then use their large international distribution systems to take advantage of short supply in other sections of the globe to the detriment of the local producers or manufacturers. I think this is what is in the minds of many small businessmen, small producers and many secondary industries when they view the ramifications of the piece of legislation which is before us.
[DOT] (4:00 p.m.)
One outstanding example I might note at this time of the fear expressed in many segments of the economy is the tremendous interest shown in the companion bill that will be brought forward, the anti-dumping legislation. It seems that the one somewhat contradicts the other. If the purpose of liberalization of the tariff is to make free trade the optimum and the absolute for world nations, why then is it so necessary to place such

emphasis on the companion anti-dumping bill? Why is there such interest shown among many successful trading nations that its application be not just nor swift? It seems to me they well know already that if our present machinery for protecting our markets is modified in any way they will suffer direct capital consequences. I am of the considered opinion that the lowering of tariffs by this particular piece of legislation will be more than offset by the anti-dumping provisions as has been exhibited in the debate this afternoon.
We find here in Canada, especially in agriculture, that when we attempt to take advantage of foreign markets in many instances, because by reason of very favourable weather conditions, a very favourable production quota or the efficiency of our farmers or producers we have been able to produce a surplus of a top quality product, it is the non-tariff barriers erected in other countries that make it impossible for us to take advantage of what normally would be a profitable maket. It seems to me that if the countries involved were as sincere in making their markets available to Canada as this government seems to be in making Canada's markets available to them we would not have the actions we see to the south of our border where from time to time and even now additional and unexpected tariffs are imposed against our commodities. Additional unexpected and overnight qualifications concerning inspection methods are applied to our commodities. If the United States were as sincere about dropping its tariff barriers as this government is, I do not think this situation would exist at the present time. If we find such action taking place in the days and months ahead I can assure you, Mr. Speaker, on behalf of the major exporters of our manufactured products and produce of our soil, that any ratification we may give today to the bill before us will be paid for in the economic climate in which Canadian citizens will be forced to work.
I am very unhappy about the ramifications of this bill. It represents a downward trend in the protection we have enjoyed to date and which in many instances we have considered not enough. However, in its wisdom the government has already agreed in general to the terms they are putting before us. In the eyes of the organization at Geneva it is a fait accompli. We are asked to ratify terms which already are in effect. Although I have the greatest admiration for the patience of those
December 3, 1368



who negotiated for us, I feel that in the climate in which they were forced to work and with the pressures that were brought to bear on them they had little opportunity to do for the citizens of Canada the work they would have wanted to do in order to provide the necessary climate, as I said before, for an expansion of our various industries. We shall wait, as we must, to see what will happen. However, when this matter was first brought before the house the minister assured us there would be extreme hardship in some instances and that measures might have to be taken by the government to offset the economic hardship in the extreme cases. In the light of that statement we do not have the right to be confident, and with companies going into bankruptcy just because of an intimation of what may happen I think all Canadians have every right to feel uneasy about the legislation before us.


Mr. A. D. Hales (Wellington):: Mr. Speaker, before we leave the second reading stage I should like to make one or two brief comments on the bill before us to amend the Customs Tariff Act, with particular reference to the heavy electrical industry. We can alter the Customs Tariff Act by amendments all we like, but it will not mean one iota unless we do something about these non-tariff barriers which have such a great effect on our country's exports. I shall confine my remarks to the heavy electrical and switch gear industry because in my riding there are at least 1,000 people employed in this industry. Prior to 1960 this was a very profitable business, but in the last seven years it has done nothing but go downhill to the point where some of the companies engaged in the industry have gone out of business. I think of one company in particular, the Westinghouse Company, which has ceased to make heavy water-wheel generating equipment because it just cannot obtain export orders on account of the nontariff barriers with which it is confronted.
These companies have prepared detailed studies on this problem. They have pooled their information. They have found that there is a dual pricing system and also a dual costing system in several exporting countries, chiefly the United Kingdom. The normal value for duty purposes thus presents a very serious and difficult situation because it is difficult to establish the right cost or price. In the United Kingdom the Central Electrical Generating Contract Board is the principal purchaser of all heavy electrical equipment in the United Kingdom. With the two-price system, one for domestic and one for export, the
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export price is allowed to absorb a lesser amount of overhead and the extra amount is charged to the domestic price. They have a two-price system, one for export and one for domestic, with the result that the Canadian companies are unable to compete with these prices and thereby are losing a great amount of export business.
Just recently the General Electric Company placed a quotation with the Canadian government to supply heavy transformers for the Canadian Nelson River project. United Kingdom Electric also quoted on this tender, as did a company in Switzerland and also another Canadian company. There were four quotations. I understand the General Electric quotation was the second lowest, the lowest being that of United Kingdom Electric. The Canadian government saw fit to award the contract to the United Kingdom Electric Company, knowing that the United Kingdom will not allow Canadian Companies to tender in the United Kingdom. This contract was an initial contract for about $8 million. The result was that the Canadian company lost out. This meant that employment for 700 people for a year was lost to the Canadian market. This hardly seems fair.
We must look into these non-tariff items so that we can play on the same ball diamond with the same set of rules. If we can, there is no doubt that Canadian manufacturers could obtain considerable export business and at the same time supply our own local requirements. Let us correct these non-tariff barriers and keep Canadians employed. If we operate under the same set of rules there is no doubt that Canadian manufacturers can get the business. However, if they have to play under a different set of rules they cannot compete and they will lose the business.
[DOT] (4:10 p.m.)
This is a very serious matter. In my constituency the company to which I referred intends to lay off 130 people this month because of the loss of export business. If something is not done for the heavy electrical industry in Canada it will disappear. The situation is as plain as that. Even with the anti-dumping legislation to come into effect on January 1, 1969, we will lose these industries. This legislation will be of no avail unless something is done about these nontariff barriers. I sincerely hope the officials of the department will take every step to make it possible for Canadian suppliers to operate and compete on an equal basis.

December 3, 19S3
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Mr. R. E. McKinley (Huron):: Mr. Speaker, I have a few things to say about this legislation and all this talk about free trade. It very often frightens me because many countries have been built on other than a free trade basis. Not long ago the majority of trade could be termed closed trade. Let me give an example of what I have in mind. The salt industry is of great importance to the welfare of the people in the area I represent. Before the Kennedy round of negotiations bulk salt, which accounts for most imports and exports of salt, came into Canada at a tariff rate of 3 cents per hundredweight. Canadian salt exported to the United States carried a tariff rate of 1.5 cents per hundredweight. I understand that in 1970 United States salt will come into Canada free but the United States will still charge .8 cents per hundredweight.
I am sure everyone in the area I represent is aware of the existence of salt deposits on the west side of Lake Huron. The difference in production costs is made up by the increased cost of transportation. I referred to this matter during the committee hearings and received sympathetic consideration by departmental officials. I also received the assurance of the then minister of finance that this situation would be the subject of renegotiation if the Canadian salt industry was being jeopardized. In any event we will have to wait until 1970 to ascertain whether the Kennedy round negotiations will have an adverse effect on the salt industry in Ontario. Should this prove to be the case I trust the government will honour its commitment and renegotiate these tariff rates.
At this time I should also like to refer to the Canadian glove industry. Glove producing companies are almost going out of business, thereby jeopardizing the employment of many people, because of the tremendous importation into Canada from other countries. I shall not mention them all but I should like to put on record the figures in relation to gloves imported from several countries. Canada imported gloves of several varieties, including knitted, woven and of synthetic fibers, from Communist China to the extent of 369,000 dozen; from Hong Kong, 165,000 dozen; from Japan, 426,000 dozen; from Taiwan, 170,000 dozen, and 114,000 dozen from the United States. This situation has made it almost impossible for this Canadian industry to remain active. Many of these glove companies are located in small towns and are no longer in a position to employ the same number of people. As a result these small towns

become smaller because the people are moving to the cities. This in certainly not good for the economy of these areas. 1 hope the minister and his parliamentary secretary will take this matter under consideration to see whether something can be done.
Let me refer to another situation in my constituency. At one time we had a sporting goods industry which shipped ammunition all over Canada. Because of the high cost of transportation this business has been almost completely closed down. In order to overcome difficulties the owner began to reload shells. He found it necessary to import a certain constituent from the United States at a tariff rate of 7| per cent. The government increased that rate to 22 per cent, which represents a 300 per cent increase. Most people expect some increases, particularly in respect of small volume items, but this seems to be outrageous. I should like to ask the government to take this situation into account to see whether something can be done as quickly as possible in order that this firm in my constituency can stay in business.
[DOT] (4:20 p.m.)


David Réal Caouette: Mr. Speaker, I would like to say a few words about Bill No. C-131 to amend the Customs Tariff.
Everyone agrees that the Customs Tariff is an extremely important matter, especially with regard to the encouragement the Canadian parliament must give to the production of Canadian goods and, consequently, with regard to the encouragement we must give our agricultural and industrial workers, as well as producers of all kinds in Canada, and that includes of course all classes of our society.
Mr. Speaker, hon. members as well as the people as a whole are struck quite often by the considerable difference between the price of the products made in Canada and that of the products imported from various other countries in the world.
For instance, our textile industry faces a very threatening competition. Textile products from Japan and other Asian or European countries compete unduly with the Canadian industry. In fact, in the eastern townships, in the areas of Sherbrooke and Drummondville, plants are facing an unfortunate, and even hostile competition.
Certain companies have threatened to close down and others have to cope with strikes
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which are difficult to settle because employers refuse salary increases to their employees, precisely because of the excessive cost of production, or the lower production cost of goods coming from other countries, including Japan.
The same problem prevails in the field of rubber, Mr. Speaker. We can buy boots made in Japan for about half the price we pay for boots made in Canada, and our industry suffers by comparison.
The situation is just about the same in all sectors, including the automobile industry. Small European cars, for example, are stiff competition for our Canadian industry. In the final analysis, it is the Canadian people who pay for the price increases at home which are due to higher salaries, production costs and profits. All these factors make up the cost price of goods.
Obviously, Mr. Speaker, with a population of 20 million people, Canada cannot produce goods as cheaply as countries whose population is 80, 90 or even 200 million people, such as the United States, for example. Our cost of production is higher.
We cannot produce more and, therefore, the government must protect Canadian industry first of all. In doing so, I think-I do not only think, I am sure-we protect Canadian workers and the Canadian people. In fact, in many areas of our production, we must, when we want to export on the world market, agree to considerable reductions in prices and even sell at a loss. It is not very profitable for Canada but we must, in any event, dispose of that surplus of goods.
But here again, Mr. Speaker, there is a point to which I would like to draw the attention of the house: the best outlet for the Canadian goods we must export, or we must sell at any cost, is still the Canadian market, the market made up of the consumers in Canada. And it is incumbent on us, parliamentarians, to meet the needs of those Canadian consumers. That is a steady market, a market which is always within reach, and we neglect it to turn to world markets. We must, of course, think about imports, exports, and at least balance our trade with other countries.
We must import from other countries what we do not produce in Canada; just as we must export goods that other countries which may not have as plentifully as we do. That applies, for instance, to lumber, Ungava iron ore, oil, these resources we have here and we must export. But we must, first of all, meet
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the demand on our domestic market, the Canadian market.
Mr. Speaker, with regard to the Act to amend the Customs Tariffs, on reading the table, I feel that experts were needed to figure out the Customs Tariff, because there are over 120 or 125 pages of amendments of all kinds. Most of the time we see references to the British preferential tariffs of 10 per cent, or 15 per cent; to the most favoured nation tariff of between 15 and 20 per cent; and to the general tariff which applies to the other countries, which do not benefit by the most favoured nation tariff or the British preferential tariff, of 20, 25 30 and 35 per cent. Those who compiled those figures really got their brains working to give Canada a chance to make some profits through the application of the Customs Tariffs but that does not solve the problem of our market, our Canadian production, and above all that of the distribution of our goods.
Even though we do have to export some goods and import others, one fact remains, as I said a while ago: we definitely cannot compete with countries that have a population of 90 or 200 million people. For example, when we compare the United States and Canada, we realize that a worker over there produces five times as much as a Canadian worker. Why? Because they have almost unlimited means of production. Here, in Canada, we only have a population of 20 million people, and even if we wanted to pretend that it is 50 million, it is not true. Nor will it be tomorrow either. It could be true 25 or 50 years from now, but it cannot be at the present time.
Therefore, I believe the government should introduce not only Bill No. C-131 but another one, making it possible for us to satisfy consumer needs, domestic market needs, to prevent-I shall not say dishonest competition- but rather unpleasant competition against our Canadian producers and industries. It is unreasonable to deprive our workers of work in this country, just because we find it cheaper to buy from Japan.
We all know from experience that the United States have established industries in Japan. The Westinghouse company, for instance, and other industries established over there are owned by Americans. Industries were established in Japan because production is cheaper over there than in the United States. The transportation of those products from Japan to the United States even costs less than producing them directly in the United States. So, production

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is cheaper in Japan, transportation costs included, than in the United States. Why? Because people are paid less in Japan than in the United States.
[DOT] (4:30 p.m.)
Here, in Canada, labour unions are demanding wage parity with workers in the United States. They are asking tor the same conditions as those which exist in a country with a population of 200 million. Labour leaders who talk about wage parity with workers in the United States have their head in the clouds; they are not being realistic.
If we could produce like the United States, as much and as quickly as they do, the problem would be solved, but that is a physical impossibility. We must therefore face the facts and learn to be ourselves. Our population is 20 million, not 200 million people. The union leaders should understand that once and for all.
We must realize that we are not the United States. Let us organize ourselves according to our own possibilities, in order to meet the needs of our own trade and our domestic market. Let us face the fact that we will probably have to sell our surplus production below cost, as I said earlier.
However, we will then perhaps be able to help the underdeveloped and poor countries of the world, since two-thirds of the people in the world are in need. We would then be able to give free assistance to these people. I do not object to our giving free aid, once the principle of "Charity begins at home" is applied in Canada by the Canadian government.
Let us begin by meeting the needs of our own people. There is much poverty in Canada. The government is introducing programs to fight poverty as effectively as possible. The best way to fight poverty is to give something to eat to those who are hungry, something to drink to those who are thirsty, to give housing to those who need it and clothes to those who have none. It is as simple as that and we have all these things in Canada. Therefore, there is no need to go to Japan or to the United States.
However, that does not prevent us, once again, from doing business with others. But let us do so while remembering that our first duty is to work towards an economic system which will guarantee without superhuman efforts the just society which we have heard about for the last couple of years, and which will fight efficiently, not the poor but poverty,

to get the poor out of the hole in which they are at the present time. And if they are now in a poor situation, they are not responsible for it but we are as members of parliament. Therefore, it is up to us to pass legislation which will guarantee respect for the human person everywhere in Canada and to see to it that we transact our business under the best possible terms with the other countries so that Canada may continue to expand and become an example for all the countries of the world.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Bechard in the chair.
The Chairman:: Order, please. House in committee of the whole on Bill C-131, to amend the Customs Tariff.
On clause 1-


Mr. Gray:: Mr. Chairman, perhaps I could start by saying a few words about the structure of the bill we are now studying and conclude by dealing with some of the points raised by hon. members during the second reading. I will also attempt to answer the questions that I reserved for this stage during the debate on the resolution. I should explain that each clause of this bill flows directly from the corresponding paragraphs of the budget resolution relating to the Customs Tariff. You will recall that this resolution was examined in some detail and passed by the committee of ways and means after debate on November 14 and 19. There is no change whatsoever in the substance of the provisions which appeared in some detail in the resolution in question. However, the order in which they appear has been rearranged so that in the bill the various clauses and schedules are in the same order as the related provisions of the Customs Tariff Act which they amend.
The Customs Tariff Act, which the bill we are considering amends, commences with an interpretation section. It continues with sections imposing rates of duties set out in schedule A thereto and empowering the governor in council to make regulations. Next come the three schedules. The first of these is schedule A enumerating goods subject to duty and free goods. If you look at the original Customs Tariff Act you will see it is very long. It is followed by two shorter schedules, schedule B providing for certain drawbacks of duty and schedule C containing a list of goods prohibited from importation. Therefore
December 3, 1SS8

the clauses and schedules in Bill C-131 are arranged in the same order as in the Customs Tariff Act. Bill C-131 commences with a proposal to insert a new definition with respect to wire in the interpretation section of the Customs Tariff and ends with an amendment to schedule C of the act. However, the most important provisions of the bill are those in between which provide for the reductions in the rates of duties set out in schedule A that are required to implement Canada's obligations under the Kennedy-round trade agreement which was signed in Geneva on June 30, 1967, and generally which have been in effect on a provisional basis since January 1 of this year.
When the committee of ways and means was concluding its examination of the tariff resolution on November 19 I said I would attempt to supply later on in the debate some information in reply to some of the questions that were asked. First let me attempt to deal with some of the questions raised by the hon. member for Swift Current-Maple Creek, and I want to thank him for his most interesting presentation. He has certainly done a lot of work in looking into this question. As I recall his remarks, he argued that the proposed tariff amendments now before parliament would have the effect of imposing a duty on some farm equipment which is now duty free. I have gone into this with officials of the Department of Finance and I am glad to be able to assure my hon. friend that this is not considered to be the case. It should be noted that the proposed amendment to the heading for items 42761-1 and 42762-1 is merely consequential to the proposed amendment to item 40938-1 dealing with tractors. The coverage of the two items I have just mentioned will remain the same. They do not cover machines and tools for use on tractors which are used on the farm for farm purposes only. These are provided for and will remain in duty free tariff item 40924-1. This item was formerly numbered 409(f). I might add that the numbering was changed not as a result of the provision we are considering now but was changed several years ago to aid the Dominion Bureau of Statistics in collecting information on the products in question. As I was saying, the status of item 409(f), which has been renumbered 40924-1, is that it is the main item providing for free entry from all countries of farm implements and farm machinery. Again I should like to assure the hon. member that the item is not affected by the bill before us and it does not appear
Customs Tariff
anywhere in it. Farm tractors also remain free of duty as before.
I should like to tell the hon. member that his suggestion that item 409(f), which is now item 40924-1, be amended has been noted for future consideration. I am not in a position to make any commitment about it and, as I have said, the item does not appear in these resolutions. However, I would be very pleased to arrange to have the hon. member meet with the director of the tariff section of the Department of Finance so that he could pursue this question further.
The hon. member for Saskatoon-Biggar also asked several questions. First of all I believe he asked about Japanese tariff reductions as they affect soybeans and rapeseed. I am informed that the Canadian negotiators in the Kennedy round attached a high priority to the reduction of the Japanese tariff on rape-seed because of the importance of the Japanese market to Canadian producers. However, Japan did not grant a tariff concession on this product, and it is a matter of concern that this reduction was not made since the Japanese government did make a 50 per cent cut in its tariff on soybeans which will carry the rate on that product in stages from its pre-Kennedy round level of 13 per cent to 6.5 per cent by 1972. In his question the hon. member referred to a reduction in the tariff on the importation of soybeans into Japan from the United States. I am informed, however, the reduction is one of general application and is not limited to imports from the United States. I would also point out that Canadian sales of rapeseed to Japan have doubled in the last few years, from $12.9 million worth in 1965 to over $25 million worth in 1967. Canadian exports in the first nine months of 1988 totalled $18.1 million. I can assure the hon. member that the government is continuing its efforts to improve access for this particular product to the Japanese market.
e (4:40 p.m.)
The hon. member also asked about access to the European common market for wheat and feed grains. The only improvement in this respect is that which has resulted from the new cereals arrangement. It was the objective of Canada and, indeed, of other wheat exporters in bringing the negotiations on cereals within the ambit of the over-all Kennedy round of trade negotiations, to seek a comprehensive arrangement with provisions going beyond those of earlier international wheat agreements. Therefore the negotiations covered feed grains as well as wheat, and dealt not only with international prices but

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also with domestic policies, access to import markets and food aid. However, it was only possible to reach agreement with respect to wheat prices and food aid. I am sure all hon. members share the disappointment of the hon. member for Saskatoon-Biggar that the Kennedy round has not yet resulted in Canada achieving improved tariff access for our grains in western Europe. However, during the Kennedy round trading nations for the first time did try to grapple with the problem of domestic supports and internal subsidies.
The Leader of the Opposition asked for a breakdown by major countries of the over-all figures which I gave related to the increase in Canadian exports in the first nine months of 1968. I now have comparative data, Mr. Chairman, for exports to each of our major markets in the first nine months of 1967 and 1968, and the figures are as follows. I can read the figures into the record at this time, though the committee may prefer to have them printed as a table in Hansard. Might I ask at this time, Mr. Chairman, whether I have the consent of the committee to have this done?


The Deputy Chairman:: Is that agreed?


Some hon. Members:: Agreed.
[Editor's note: The table referred to above is as follows:]
1967	1968
(millions of dollars)
All countries	8,344	9,881United Kingdom	868	925United States	5,275	6,625Belgium	74	91France	58	61Germany	(Federal Republic)	120	165Italy	106	95Netherlands	125	124Norway	65	76U.S.S.R.	109	82India	121	91China (Communist)	89	128Japan	429	453Australia	115	145


Herbert Eser (Herb) Gray: May I now deal, Mr. Chairman, with some of the other points made in the debate on second reading. The hon. member for Edmonton West went into some detail on the importance of the negotiations and the resulting legislation that is now before us. I think it is useful to remember that the standing committee on finance, trade and economic affairs held some 22 meetings for the purpose of studying the resolutions which are now reflected before us in Bill No. C-131. The committee heard many briefs from groups and members of the general public as well as 
evidence from government officials and ministers. I think we should keep in mind the detailed study that was given to the resolutions at that time and perhaps agree that this committee of the whole house may not feel it necessary to carry out the work that would have had to be done had the standing committee not been given the opportunity of making a detailed study of these proposals.
The hon. member for Edmonton West referred to the manner in which certain tax changes were continued in effect when the house was dissolved for an election. It is my understanding that no tax increases were kept in effect by order in council. On the contrary, Mr. Chairman, the order in council in question was put into effect for the purpose of continuing reductions in duties.
In this regard I might draw the attention of the committee to a statement made by the Minister of Finance on April 26, 1968, a statement which was issued in the form of a press release. In it the minister said that all of the proposed reductions in duties were being continued in effect by means of an order in council, under the authority of section 22 of the Financial Administration Act.
The minister did note at the time, that the budgets of June 1 and November 30, 1967 and the resolution introduced on November 6, 1967, resulted in higher customs duties on some imported products, and in line with the traditional and long-established practice followed by various governments of various political persuasions these increases had been collected on a provisional basis, pending parliamentary passage of legislation to implement them. However, he concluded his statement by saying that since the twenty seventh parliament had been dissolved before passage of the legislation in question, the Department of National Revenue was suspending the collection of the increase in customs duties effective April 24, 1968, pending action by the next parliament, and that the government would collect duties on the imports involved at the former rates.
The minister also went on to say that it was the government's intention to ask the next parliament to pass legislation implementing both the reductions and the increase, effective from the dates originally proposed in the tariff resolution submitted to the last session of parliament. This, in part, is the work that we are attempting to carry out at the present time.
I can assure this committee that the government is well aware that there may be
December 3, 19S8

problems of adjustment for certain segments of Canadian industry, and this is why it has set up the general adjustment assistance program. It should be a matter of some satisfaction that to date, out of the hundreds of general inquiries received by the board, there have only been 11 formal submissions for assistance under the program, only one of which, if I am not mistaken, was based on an allegation of injury as a result of the various changes rather than a request for assistance to enable the firm in question to take advantage of additional opportunities created by the Kennedy round tariff negotiations.
The hon. member for Edmonton West and also the hon. member for Wellington drew the attention of the committee to the importance of dealing with non-tariff barriers. I can assure the committee that the government is certainly aware of the need for further action to eliminate non-tariff barriers. When I spoke on the resolution stage I believe I mentioned a special working party, of which Canada is a member, set up under GATT to develop programs for this very purpose. The GATT countries' working party is now examining how best to deal with the non-tariff barriers that are identified by member countries and, as I have said, we are taking a very active part in these discussions.
The hon. member for Moose Jaw repeated his suggestion about keeping in constant touch with the effects of the Kennedy round changes upon the agricultural industry. I can assure the hon. member that this is a practice that is now being observed. The hon. member also made some remarks about multi-national corporations. I think this committee should be aware that the Minister of Finance, when he spoke in New York on November 18, made it clear that the government is fully aware of the problems that can be created by multinational corporations for international trade. Certainly it is giving attention to the study of measures that might be put into effect to deal with these problems.
If I may deal briefly with one or two other points, Mr. Chairman, the hon. member for Huron wanted to know what effect the tariff changes would have on the salt industry. I can assure him that this situation is being kept under review. Present indications seem to be reasonably optimistic. I am informed that there are at least two new developments being introduced in the method of production. I understand that an announcement was made recently of a new salt manufacturing plant in Saskatchewan. Also may I reassure him that gloves have not been affected by the Kennedy
Customs Tariff
round changes that are reflected in this bill. The tariff remains unchanged at 20 per cent British preferential, 25 per cent most favoured nation. He also made some reference to a higher duty on loading tools for shells, I believe. I am informed that changes in this matter will come about as a result of a ruling of the Tariff board rather than through any changes we are considering at this time. We are keeping this matter under review as well.
[DOT] (4:50 p.m.)
In conclusion, Mr. Chairman, may I say that various hon. members have made references to the possible effects of the tariff changes in question. I should therefore like to repeat again what I said when I concluded the debate on the resolution stage. Most of the changes we are considering now in the form of Bill C-131 have been in effect provisionally for almost one year, and therefore we are able to see actual results and definite trends with respect to our international trade. I think most observers will agree that the results so far are very encouraging.
I put some figures on the record when I spoke on November 19, pointing out that the Minister of Industry, Trade and Commerce, in a speech to the Canadian Export Association a few weeks ago, stated that in the first nine months of 1968 our merchandise exports reached $9.9 billion, up 1.6 billion or 18.4 per cent from the same period last year. I said:
Meanwhile our imports have risen at a slower rate, by $811 million or about 10 per cent. In consequence I think we should be pleased to note that Canada is well on its way to achieving a $1 billion merchandise trade surplus this year... this will be the largest favourable trade balance recorded in the post-war period.
All this has happened since the Kennedy round changes went into effect almost one year ago. So, although one can understand the concern and apprehension which have been expressed, I think the actual facts shown by the figures should provide not only reassurance but also encouragement as to the positive effect over all for Canada, Canadian industry and Canadian workers of the results of the tariff negotiations reflected in this bill. Therefore I would certainly urge the committee to give this bill favourable consideration.


Mr. Mclnlosh:: Mr. Chairman, I wish to direct some remarks to the parliamentary secretary following my remarks of November 14. I still wish to hear a definition of the term "internal combustion tractor". That definition ought to be included somewhere in this bill. Although the parliamentary secretary said

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that the present wording of the resolution would have no adverse effect on farm tractors I can only say that I have dealt with the Department of National Revenue for 11 years as a farmer and I doubt that the officials of that department will take the opinion of the parliamentary secretary when it comes to defining farm tractors. I suggest that the matter should be clarified in the bill. As I said the other day, it is the duty of the Department of Finance officials to insert certain tariff items but it is the duty of Department of National Revenue officials to interpret them. Opinions on the correctness of interpretations vary. On several occasions I have had to deal with Department of National Revenue officials on a matter of interpreting terms inserted in resolutions by Department of Finance officials. I have had some experience in this field.
Frankly, I do not see how we can define an internal combustion tractor as anything but a tractor. You would have great difficulty in convincing Department of National Revenue officials that a farm tractor is not an internal combustion tractor. It is, in fact, an internal combustion machine, tractor or piece of equipment. Yet I doubt whether I could convince officials of the Department of National Revenue of the correctness of my remarks. Item 42711-1 lists:
Machines and tools, including blades, loaders, rippers, rakes and related operating and controlling gear; all the foregoing for use on internal combustion tractors-
Under item 40924-1 I am entitled to bring most of these things into the country; yet unless I show the officials of the department a copy of Hansard in five years time and allow them to read the remarks of the parliamentary secretary, there would be no way for them to know what parliament intended with regard to the definition of tractors.
A little while ago the hon. member for Kent-Essex said there is no tariff on farm machinery that is brought into this country. I know that other hon. members have made a similar statement in the past. It has been made over the years, and I can only say that it is erroneous. Everyone in Canada believes that that is the principle under which we operate; yet we do not work that way. Many farmers who have tried to bring in pieces of equipment that are covered by item 40924-1 have had a rude shock.
I received a letter from the Department of National Revenue recently. No matter whether an item says that a piece of equipment is to

be used for farm purposes only, or whether it says that the implements listed must be agricultural tools not otherwise provided for, the department makes a certain kind of finding. The minister sent me this letter which says in part:
It is the position of the department that in order to qualify as an agricultural machine an article must contain mechanical features and be recognizably "agricultural".
You will notice, Mr. Chairman, the two qualifications, "mechanical features" and "recognizably agricultural". I continue:
The Tariff Board set forth this principle in Appeal No. 237 and it has been followed by the Board on other occasions.
In other words, it must be determined at time of importation whether or not an article is an "agricultural machine". The fact that one particular unit may be for use on a farm does not in itself qualify the product as an agricultural machine.
In other words, there must be a user's certificate that the implement is to be for farm use. I continue:
Similarly, an agricultural machine may, on occasion, be for other than farm use.
I said the other night that almost any piece of agricultural machinery may have another use than a farm use. Any piece of farm machinery may be used for a purpose other than that which it was originally intended for, and we do not deny that. We think, however, that the intent of parliament is not being carried out by applying narrow definitions rigidly, since it was the intention to allow farm equipment and machinery into Canada duty free. That is not the case so far as officials of the Department of National Revenue are concerned. My letter goes on to say:
Some of the articles classified as agricultural machines are feed mixing machines, post drivers, stone pickers and transplanters. These articles are considered to be entitled to duty free entry under tariff item 40924-1 irrespective of whether they are for use by farmers or by others.
Certainly post drivers are not mechanical instruments. Other implements covered under item 40924-1 are not mechanical; yet they are allowed in duty free to be used on farms.
I wish to make a few suggestions to the parliamentary secretary who is piloting the bill through the house. He said on the 14th of November that he was in no position to accept proposals. I wonder whether he would not prefer accepting proposals to voting on amendments, since if we introduce amendments much time would be consumed.
December 3, 1968

[DOT] (5:00 p.m.)
My main interest in this bill relates to item 40924-1. When I was speaking the other night I believe I referred to equipment that is included under item 42711-1. I say there is a relation between the two. I am interested only in the clarification or interpretation of the articles listed in this entry relating to agriculture. It is my only concern with this whole bill. The difficulty has arisen because of the way in which this item was worded. It fails to portray the true intent of parliament to those who are responsible for its interpretation. This has cost the farmers of Canada many thousands of dollars in the payment of duty which parliament never intended them to pay. This affects any individual farmer who tries to bring equipment or machinery into Canada.
The suggestion has been made by officials of the Department of National Revenue that if farmers are not satisfied with the decisions reached as to duty they should appeal to the Customs Tariff Appeal Board. The last item to which I referred involved $300. If a farmer were to come to Ottawa and hire a lawyer it would certainly cost him much more than $300. This is why farmers prefer to pay than to fight these decisions. I maintain that hundreds of farmers have been obliged to pay this duty. Officials of the department, because of the power they have, can force farmers to do so even though they should not really have to meet these charges.
I can imagine what the parliamentary secretary will say after I have sat down. He will tell us he is in no position to change this item because it is related to the Kennedy round agreement. I want to tell him, as I said the other night, that this issue has been fought here for seven years to my knowledge. Former ministers have made promises similar to the one he has made-undertakings that it would be considered by various officials and taken care of. Well, the item with which I have been concerned, and in connection with which I have fought for seven years, has still not been fixed up despite promises by various ministers. This is why I intend, if possible, to propose amendments to this bill. I can tell the parliamentary secretary that what I intend to propose would not result in any change in the revenues of the department. I intend to suggest certain changes in item 40924-1.
I say that the sequence in which the items are listed is confusing to the public and confusing to the officials of the Department of National Revenue. There are 35 articles
Customs Tariff
listed under the entry, all relating, presumably, to agriculture. The 23rd states: "All the foregoing for use on the farm for farm purposes only." I have a question to ask. Why does this particular item appear only two-thirds of the way down the list? Why is it in the 23rd position? Why does it not relate to the ten items which follow it? Is there a presumption that items 1 to 22 could be used for some other purpose but that when used for farm purposes they are allowed entry duty free? What differentiates articles 1 to 22 from articles 24 to 34? I suggest that in reality there is no difference at all.
Any piece of equipment, apparatus or machinery used on a farm today can conceivably be used for some other purpose. It could, for example, be used by industry. This is no argument for the department to put up when we know what the intent of parliament is, namely, that farm machinery shall be allowed entry duty free. The department will not accept an end-user's certificate. What will it accept? Practically nothing. It is concerned only with forcing an individual farmer to pay a duty from which the law is supposed to exempt him.
There is a possibility that item 23 could have been inserted in the wrong place in the list. It could be a printer's mistake. There is also a possibility that at one time the original list only contained 23 items and that item 23 was then the last on the list. This is probably what has happened. Items 24 to 34 may have been additions consequent upon amendments to the original list. If items 24 to 34 were to be treated in the same way as all the others on the list they should have been inserted above the present item 23. There is no reason for treating them differently from the preceding items.
It seems to me that as members of this house we would be abdicating our responsibility if we did not attempt to clarify this entry. Several of us have made representations to the government time and time again, to administrations representing both parties, but no change has taken place. I have stated on many occasions that the entry as it now stands is most confusing to those responsible for its interpretation. How could it be otherwise when one department is responsible for making these lists and another is supposed to interpret what they mean? Proof of what I say can be obtained by reading various decisions of tlie Tariff Board, and letters in the possession of departmental officials.

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There are several ways in which clarification could be achieved. One would be to accept the proposal I made on November 14, 1968 to change the wording of item No. 34 from "All other agricultural implements or agricultural machinery N.O.P" to "All equipment, apparatus, machines and implements N.O.P. for agricultural use." I think this is what the members of the Tariff Board want. Then again, the position of article 23, which reads "All the foregoing for use on the farm for farm purpose only" could be changed, making it the last article in the list of items.
The third proposal I wish to make is that parliament should update the terminology of some of these items. For instance, there is a reference here to wagon boxes, which are no longer used on farms. If this were changed to "truck boxes" a useful purpose would be served. I would refer also to the use of the term "sprinkler irrigation systems". This may have been the original designation, but since that time we have become familiar with such descriptions as "flood irrigation", "ditch irrigation", and so on. If a farmer tries to bring in a motor which could be used on a sprinkler system and lets out, by inadvertence, that it is for use in connection with a flood irrigation system, the department says at once: it is taxable. This shows just how narrow these decisions can get.
I believe such changes as these would bring the entry into conformity with the intention of parliament, help keep the cost of farm produce down to a minimum, and carry out in practice a principle which has been recognized by the farmers of Canada for many years, namely, that farm machinery and equipment should enter this country free of customs duty. At any rate, this is the principle which is presumably recognized. When farmers try to take advantage of it, they find it is not.
I may have some other remarks to make later if I move amendments. However, I should like to give the parliamentary secretary an opportunity to say, if he can do so, that he will have item 23 moved so as to be the last item on the list. This will not change the revenue picture one bit but will make relations with the department more definite. This would clarify it so far as I am concerned. It will give us another opportunity to go after the Department of National Revenue officials about their interpretation. They are very cautious about this. They are very contradictory at times, depending on the article you want to bring in. At one time they will

say, "If the item is of an active nature we will allow it in." At another time they will say, "If it is of a passive nature we will allow it in." They use both arguments against you when you try to get these items in. This is something the parliamentary secretary could do without too much disturbance to the bill or to Schedule A. So far as I am concerned it certainly would not change the revenue that the federal treasury gets.
[DOT] (5:10 p.m.)


Herbert Eser (Herb) Gray: Mr. Chairman, I would like to thank the hon. member for Swift Current-Maple Creek for his further remarks. Again he has shown how seriously he considers the matter and the problems that he feels are created by certain interpretations that are given. I think he is quite right in suggesting that the explanations I gave at the opening of the committee of the whole stage are in Hansard, and Hansard is a permanent record and he can take it with him to show the officials. In fact, if he thinks it would help I will go along with him.


John (Jack) McIntosh: I am thinking of the poor member seven years from now who will not know this is in Hansard.


Herbert Eser (Herb) Gray: I think these matters are recorded permanently in Hansard which is stored in various places. If necessary we could take the reference from Hansard, put it in a time capsule and leave clues as to where it could be found. The proposals made by the hon. member for specific changes in the tariff relate to item 40924-1 and, as we both agreed, this was formerly 409(f). Frankly I think the difficulty facing all of us, no matter what our intentions may be, is that 40924-1 does not appear in any way in this Bill C-131 which this committee of the whole is now studying. The hon. member is suggesting that we make some amendment to 40924-1 but, as I have said before and unless I am seriously mistaken, that item is not before us in any way whatever. However, I should like to reassure him-


John (Jack) McIntosh: Mr. Chairman, the parliamentary secretary has said that the item is not before the committee in any way whatever. Does he not admit that item 42711-1, which refers to machines and tools, is the same item as appears in 40924-1?


Herbert Eser (Herb) Gray: No, I cannot agree with my hon. friend on that point. It is quite a different matter.
December 3, 1968


John (Jack) McIntosh: The wording is the same with the exception of "internal combustion tractors," and I am asking the parliamentary secretary to give a definition of what is meant by internal combustion tractors.


Herbert Eser (Herb) Gray: Mr. Chairman, I wish I were in the position to give a definition in such a firm and final way as the hon. member asks. It might satisfy the hon. member, but perhaps it might not. If I attempted a definition I do not think it would have the conclusive form that he would wish to have it in his discussions with the officials of the Department of National Revenue.
Unless I am sadly mistaken about the purpose of item 42711-1, first of all, it is not in the way of a renumbering or a re-expressing of what is covered by 40924-1. It deals with a rather different matter. It is part of an attempt that the house is being asked to make to correct a ruling of the Tariff Board which deemed front-end loaders were to be covered under the same tariff item as tractors, and therefore let in duty free. This led to many representations, including some from the opposite side of the house, that this was detrimental to Canadian industry. For example, I think there was a plant in London, Ontario, which was making this equipment. The proposed item 40938-1 is designed to clarify this matter. Item 42711-1 is to make clear that if the tools in question are for the purpose of attachment to the type of tractors in question, but are not for farm purposes, then they are covered by the duty in question.
It is my understanding of the will of parliament, expressed in Schedule A of the Customs Tariff Act, that implements and machinery for farm purposes come in duty free, but that farm equipment is not included in this duty free provision under 40924-1 in quite the way the hon. member would like it to be. This may be something that requires further study and possibly further change, but I conclude by repeating that 40924-1 is not to be found in the bill that is before the committee of the whole in any way whatever.


Mr. Gilbert:: Mr. Chairman, the position of the New Democratic party has been stated on the resolution stage and also on the second reading stage by the hon. member for Regina-Lake Centre. Therefore my remarks will be very brief but pointed.
The first matter I would like to draw to the attention of the parliamentary secretary is that there were three points set forth in the
Customs Tariff
statement by the Consumers' Association of Canada when they presented their brief before the standing committee on finance, trade and economic affairs.
The first point refers to the desirability of stronger direct representation of consumers in future Canadian trade negotiations. I would assume that the reason for that was the shabby treatment that the different organizations and groups within Canada received prior to the entry by officials of the Department of Trade and Commerce into the Kennedy round negotiations. I think I should put on record that the trade unions were not contacted in any way whatever with regard to their position on the Kennedy round and, to say the least, the representation of the farmers was very slight. I understand they were contacted prior to the negotiations but certainly never during the negotiations. When one thinks of the great changes that took place concerning agricultural produce one hopes that in the future officials of the department will contact these different groups to get their views on these important matters.
The association's second point concerned the regional impact in Canada of relaxation of Canadian trade restrictions, and the third point concerned the importance of continuing efforts to reduce those impediments to international trade which will still remain after the Kennedy round tariff cuts are completed. I would hope the officials would take these points into greater consideration the next time they commence to negotiate with regard to tariff changes.
It would be fair to say that the role of Canada is to develop the principle of free trade and that the GATT agreement was one of the necessary steps to achieve this goal. Tariff protection has been a valuable instrument of nation building, and economic nationalism was necessary to political independence and the creation of a national economy. Now differences arise only with respect to the rate and the manner in which tariff changes should be established, whether they should be unilateral, bilateral or multilateral, or selectively by sector. As a result of the negotiations it appears that Canada, as with other countries, set the pace toward multilateral free trade; yet it has experimented in selective arrangements such as the automotive pact.
[DOT] (5:20 p.m.)
There has been a transfer from the dominance of tariff protection to an awareness of

December 3, 1S63
Customs Tariff
the penetration of foreign ownership in Canada. It may be argued that tariff protection created Canadian industries but not Canadian firms, when one appreciates the expansive drive of United States corporations in the late nineteenth century and early twentieth century in developing Canadian industries but not Canadian firms. Instead of creating Canadian entrepreneurship capable of leading Canadian economic growth, the tariff approach has created a branch plant economy. The growth of foreign ownership in Canada has been phenomenal. When one realizes, according to the Watkins report, that in 1964 we had foreign ownership to the value of $27 billion in Canada and that now it probably has soared to around $35 billion, one can appreciate the immensity of the problem. When one appreciates the United States penetration of the Canadian economy and understands that 80 per cent of foreign ownership has been on the part of United States companies, one realizes this is a very important matter. When one appreciates that in the auto industry they have almost 100 per cent control, in the chemical industry 78 per cent control and in the rubber industry 77 per cent control, this underlines the importance of the problem at this time.
When I read the statement of the Prime Minister over the week end and his assessment of the just society to date as well as his almost total acknowledgement of treating our economy as an integrated economy with the United States I was very disappointed. When I hear the statements of cabinet ministers with regard to their continentalist views it makes me realize they have become aposto-lates of Canadian nationalism instead of apostles of Canadian nationalism. They have denounced and set aside Canada's number one nationalist, Walter Gordon. They have paid no attention to date to the Watkins report. They have failed to heed the serious warnings of the Toronto Star. I might say that the Toronto Star has taken a very active part in pointing out to Canadians the serious problem we have with regard to foreign ownership. In fact they have prepared a pamphlet which all Canadians should have setting forth the danger of the penetration that has been made in the economic sector of our economy. One fears that once they have controlled the economic sector the time is short with regard to any political independence.
It is very difficult to find at the present time one cabinet minister who is a Canadian nationalist. I have only found two Liberal

members, the hon. member for Scarborough and the hon. member for York North, who have definitely stated they are Canadian nationalists. I notice that the Minister of Defence Production has made an attempt to participate in this debate and therefore he may get up to say that he is a Canadian nationalist. However, I have not found one cabinet minister who has definitely stated he is a nationalist with regard to our economy. Having had no success with the cabinet ministers, I shall ask the parliamentary secretary just what his position is with regard to this very important problem. There are quite a few parliamentary secretaries. I notice two more in the house at the moment. Perhaps they could set forth their position with regard to Canadian economic nationalism because of the seriousness of the problem. I shall also ask the parliamentary secretary to speak a little more fully with regard to that multinational corporation, the auto industry. I fully appreciate that he comes from a riding that has within it automotive businesses. He appreciates the penetration of United States companies in this field.
Last night I mentioned that it seems to me to be a very sad and sorry situation that in Canada, which is in the position of developing from having a population of 20 million people to having a population of probably 35 million people at the end of the century, we must, as the Prime Minister said in his statement last night, let the automotive business go to our friends in the United States. When I think of countries like Sweden, which has a population of between 7 million and 8 million people, having a very thriving auto business it makes me rather sick to think that we have defaulted in this particular area and have undertaken no research and development to establish a separate automotive industry which could provide Canadians with a car that would suit Canadian conditions and climate and also build up our export trade. This is a very important factor. I am happy to see the Minister of Defence Production agrees with me. He probably will persuade his cabinet colleagues that this is an area in which we should become very active. When we consider that we will double our population by the year 2000 it would seem that this is a field in which we should start working right away.
I might mention the experience some of us had in respect of the committee on finance, trade and economic affairs with regard to the Kennedy round and the chemical industry.
December 3, 1968

Representatives of that industry appeared before the committee and the problems that are being experienced by it were set forth. I might tell my colleagues in the house just what the problem in the chemical industry is. The chemical industry has developed to such a state that it has gone beyond the status of being nationalist. When an order is received for a chemical they now use a computer. Information is fed into the computer concerning the material, labour and transportation costs, and taxes. Out of the computer comes the answer concerning where the order should be placed. It indicates that in an economy like ours where there is a domination of foreign ownership in the chemical field no concern is given to the need for Canadian industry to put a drive on in the export market in the chemical field. This applies in many fields. This situation is causing many of us concern.
When we consider the immense corporations in the United States and the research and development programs they have, we realize that this leaves the branch plant economy of Canada in a very awkward and weak position with regard to a drive on exports. This is the situation in respect of developing our Canadian economy. The key to economic growth is the export market. When we have to depend on United States firms to do the research and development and when these United States firms are creating branch plants as branches which will serve the domestic market and not the export market, this is an indication of the weakened position we in Canada are in.
I might also relate to the parliamentary secretary an experience I had on a plane while coming to Ottawa. I met a man who is involved in the advertising business. He went to his bank to borrow money for expansion purposes. He said the amount required was modest. The bank refused him the money to expand his plant. Later he had a call from the bank manager. I notice that the parliamentary whip is very attentive because at one time he was a bank manager. What really happened was that the bank manager invited him back at a later date and asked him whether he would be interested in selling his plant to a group of Americans. The bank manager said that they were prepared to finance the group of Americans who were prepared to pay in the neighbourhood of $2 million for this Canadian company.
Here we have a case of a Canadian entrepreneur wishing to borrow a meagre amount
Customs Tariff
of money for plant expansion in his particular business who is refused by the bank and then later invited back by the bank manager who attempts to persuade him that he should sell his Canadian business to a United States group in which case the savings of the Canadian people would be used by the Canadian bank to finance the purchase.
[DOT] (5:30 p.m.)
This mood and attitude have pervaded the minds not only of those who occupy the government benches but the minds of other people in Canada. We must do something about this now. It is all very well to talk about trade problems, but we must appreciate some of the practical problems which face Canadian businessmen today. These people need to be encouraged by the government to develop a Canadian economy controlled by Canadians. We need a research and development program supported and assisted by the government in order to increase Canadian exports to the point that we are not dependent on these branch plant operations of United States companies.
The statements by the parliamentary secretary and other hon. members in respect of non-tariff barriers are absolutely accurate. There are problems in respect of quotas and border taxes. The hon. member for Wellington outlined the problems caused by a two-price system in some countries. I was a little surprised that he drew attention to the central electrical authority in England which, according to officials of Canadian General Electric, refused a bid by Canadian General Electric in respect of heavy electrical equipment for use in England.
We hear representations and allegations during the committee stage of the Kennedy Round negotiations against Sweden. It was rather striking that during one meeting the vice president of Canadian General Electric cried about barriers established by England and Sweden, because in an address by the president of Canadian General Electric, which was included in a pamphlet distributed to members of the committee, he asked for special treatment by the Ontario hydro commission in respect of equipment they provided. That company was asking for the very thing it was complaining about other companies doing. This is a part of the problem we are experiencing. Canadian General Electric should put its own house in order not only in this field but in the field of pricing. We are aware of the difficulties this company has

December 3, 1968
Customs Tariff
encountered in respect of the fixing of prices in other countries.
We also have special treatment for Canadian manufacturers, and I am not talking about defence contracts or decrying them. All I am saying is that we do have these problems in our own jurisdiction and that they should be studied in depth by the standing committee on finance, trade and economic affairs in order that we can be sure that trade officials when they bargain with these people are well informed about the feelings and views of government members. I ask the parliamentary secretary, who is a very able gentleman, to make known his personal views in respect of these very important problems.


Mr. Otto:: Mr. Chairman, I intended to make a few remarks at the resolution stage. However, being a co-operative fellow and having been asked by the parliamentary secretary to wait until today, I have done so. I should also like to direct attention to the fact that at the resolution stage comments were made by members of the opposition to the effect that the minister was not here. In view of the manner in which the parliamentary secretary has handled this whole shebang, and in view of the fact he seems to have knowledge of this department at his fingertips, I have the feeling that, much to the chagrin of the minister, the minister has not been missed. Let me compliment the parliamentary secretary for a wonderful job.


John (Jack) McIntosh: You are not bucking for a call, are you?


Steven Otto: My comments will be restricted to those remarks about the Kennedy round negotiations which seem to indicate they are the cause of all our customs tariff problems. The parliamentary secretary mentioned that the advantage we obtained last year in our export position was due to the Kennedy round negotiations. I take some issue with that statement. They had a lot to do with it but, as he admitted, the automotive pact had a tremendous effect.
No Canadian wants to be a hewer of wood and drawer of water. We all want to see Canadian industry manufacture goods and export them. We want other nations to accept our manufactured goods tariff free or at low tariffs. The purpose of tariffs is to protect jobs. Customs tariffs account for about 15 per cent or 16 per cent of our national revenue, and I sometimes wonder whether we are still interested in the original idea of protecting

jobs or in gaining revenue. There is always a danger of such a shift in purpose.
This bill is partly the result of the Kennedy round negotiations. We have heard members on both sides of the house refer to problems in respect of the glove, shoe and salt industries. These people are constantly at the heels of officials who attempt to negotiate tariffs on a national basis. This is political activity. It seems to me that the Kennedy round negotiations were intended to ensure that eventually every country would produce those articles it could produce most efficiently. There will always be barriers because of physical situations. Exports and imports are restricted not only because of a desire to protect certain industries but to attain a financial balance. This plays a great part in the over-all picture.
The European economic market has been in existence for some time, and it was hoped that trade problems in that area would by this time have been solved. We all know they still have problems in France. Potato growers there do not agree with the negotiations carried out by their administrators. Other industries in the European common market find themselves in positions far short of their expectations so far as trade patterns are concerned. The original concept was that countries which could most efficiently produce certain products would produce those products. This has not been accomplished.
In long term trading plans we cannot rely to a great extent on the Kennedy round negotiations. We are not all angels and we have certain established interests. When we consider the automotive pact we must realize that it is a plan to create a balance of trade in this industry between Canada and the United States. It does not take into account the dollar balance. What we are saying is that we will accept automotive parts from the United States tariff free as long as the United States will accept an equivalent amount of trade. This is what I have been advocating for the last ten years. We must gear our export-import plans to a volume balance rather than a dollar balance.
[DOT] (5:40 p.m.)
Let me give an example. We export each year $28 million or $30 million in reserve gas. This means we have sold to the United States or others a reserve of billions of cubic feet of gas. It also means that we have imported $28 million or $30 million of manufactured goods, radios, and so on. As long as we have the
December 3, 1968

natural resources, electrical energy, aluminum, gas and oil, we can maintain our balance of trade and still be largely unemployed. So that is not the secret. The secret is a balance of trade in man-hours. In other words, we should say to the world: We will allow imports tariff free of so many manhours as long as we can export the equivalent amount.
That is what the automotive pact is. The strange thing is that although the automotive pact, as the parliamentary secretary said himself, has meant an increase since 1963 from $300 million to $4 billion, we seem hesitant to expand this policy. I wonder whether the parliamentary secretary or one of the ministers can say why we cannot include in the automotive agreement tractors, outboard motors and motorcycles. All these items take about the same amount of skill to manufacture and the industries pay about the same wages. Why cannot we expand the automotive pact still further to other industries?
Two years ago the minister of forestry cried out for another type of pact for the forest industry. Surely by expanding the automotive pact, initially engulfing those industries which are closely allied and then by arrangement allowing other industries to come under the same type of agreement, we would find ourselves on the road to a possible solution of this problem. We will not always enjoy a balance of trade. We will not always be able to export to other countries and solve our financial problems in this way.
GATT was mentioned, the general agreement on tariffs and trade. It is not commonly known that the members of this agreement spend a great deal of time trying to find loopholes in it. I wonder about the value of this agreement, when one considers that we have fantastic transportation problems from coast to coast. In Germany, for instance, what might be called a quasi-subsidization of the transportation business allows the barge system on the canals to be used so that industry anywhere in Germany is, for all practical purposes, right on the seacoast. There is practically no transportation cost involved. These are the things the members of this agreement worry about. The agreement is not working out as well as we thought it would.
In conclusion, Mr. Chairman, I should like to emphasize this point to the parliamentary secretary. He has already pointed out that we have an idea of what constitutes a very good agreement, namely, the automotive pact. Can we not expand this policy and use the same idea with other industries or relate other 29180-218
Customs Tariff
industries to the concept of export versus import in man-hours and not dollar volume?


[Stage Direction]
Clause agreed to.
Clauses 2 to 15 inclusive agreed to.
James Hugh Faulkner: Shall schedule A carry?
On schedule A-


John (Jack) McIntosh: Mr. Chairman, just before the bill is carried I wonder whether the parliamentary secretary would let me know when I may have a meeting with his officials.


Herbert Eser (Herb) Gray: Mr. Chairman, I would be very happy to arrange a meeting at the earliest possible time. I suppose we are not really able to recognize the fact that at this stage we have assistants on the floor before us, but perhaps I might have a short consultation with them right now as to when the hon. member will have a further chance to pursue his proposals in a meaningful way.


James Hugh Faulkner: Shall schedule A carry?


[Stage Direction]
Schedule agreed to.
Schedules B to H inclusive agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Marcel Joseph Aimé Lambert: Mr. Speaker, I know it was agreed that we would take item No. 25 next, but since the parliamentary secretary will be making a statement on this matter, perhaps it would be agreeable to the house that we move to the next item, which would be private members' business, and start with item No. 25 at eight o'clock.


Mr. Macdonald (Rosedale):: That is a very helpful suggestion, Mr. Speaker. Perhaps we could agree to regard it as six o'clock and proceed with private members' business.


Mr. Howard (Skeena):: Mr. Speaker, I wonder whether I could make a suggestion with respect to the rights of individuals. We want to make sure that the member concerned with the bill is present and knows of this situation. If he is here and ready to proceed, this is fine.


Donald Stovel Macdonald: Mr. Speaker, I understand that my colleague the hon. member for Gaspe (Mr. Cyr) will be dealing with the next bill, and he has about him all the appearance of readiness.


Donald Campbell Jamieson: He is warming up in the bullpen.
3440	COMMONS
Bonaventure and Gaspe Telephone Co.


Mr. Deputy Speaker:: Is it agreed that we proceed to private members' hour and adjourn at ten minutes to seven o'clock?


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: No, at
seven o'clock.


Mr. Deputy Speaker:: Order. It being six o'clock the house will now proceed to the consideration of private members' business as listed on today's order paper, namely private bills, public bills.



PRIVATE BILLS

[Stage Direction]
BONAVENTURE AND GASPi TELEPHONE COMPANY, LIMITED
Mr. Alexandre Cyr (for Mr. LeBlanc,
Rimouski) moved the second reading of Bill No. S-12, respecting the Bonaventure and Gaspe Telephone Company, Limited.
He said:
[Stage Direction]
Mr. Speaker, this bill is not new. Indeed, the same bill under the No. S-33 was passed at the other place during the last session, after having been studied by the standing committee on transport and communications. After first reading in this house, as indicated in Votes and Proceedings for February 28 1968, it was placed on the order paper for second reading on February 28, 1968. However, that debate was not held because the houses were dissolved on April 23 last.
At this point, I should like to quote the explanatory note, of this bill:
The purpose of this hill is to resolve doubts as to whether the company may dispose of its undertaking to a company incorporated under or subject to the laws of any province of Canada.
The company was incorporated on April 12 1907. Under section 11 of chapter 64 of the statutes for 1906-07, that company was forbidden to merge. Under section 5 of the act respecting The Bonaventure and Gaspe Telephone Company, Limited, namely chapter 86 of the statutes for 1955, the constitution of that company was amended. Indeed, under that act, disposal of the undertaking is allowed subject to the approval of the shareholders and that of the Canadian Transport Commission.
We feel that the act passed in 1955 does not clearly grant the company the power to sell or dispose of its assets to a company which does not fall within the jurisdiction of the Canadian parliament. The company to which

DEBATES	December 3, 1968
The Bonaventure and Gaspe Telephone Company, Limited wishes to sell its assets is the Quebec Telephone Company which was incorporated under a Quebec charter.
Mr. Speaker, doubts concerning the power to sell or dispose of its assets to a company which does not fall within the jurisdiction of the Canadian parliament would be resolved if the following sentence were added to section 11 of the constitution:
Such sale or disposal, whether of the whole or any part of the said undertaking, rights and properties, may be so made by the company to any company or person, whether within the legislative authority of the parliament of Canada or not, authorized to carry on a business included within the objects or powers of the company.
That alteration is very simple since its sole purpose is to grant in fact to the company the power to dispose of its assets in favour of the Quebec Telephone Company which holds a provincial charter.
For your information, Mr. Speaker, it is important to point out that since 1953 that company has been under the full control of the Quebec Telephone Company, since the latter holds approximately 99.9 per cent of the shares. The areas served by the latter company are all located in Quebec or close to it, and the managements of the two companies merged in 1952. Actually, the staff of the Quebec Telephone Company looks after the operations of the said company. In fact, there is some overlapping and needless expenditures.
It is very important, therefore, to recall that Quebec Telephone is acquiring the assets of the said company in order to avoid needless expenditures resulting from the partial overlapping of the services of the two companies.
We therefore ask hon. members to consider that bill kindly and to agree to its being considered in committee before third reading.
[DOT] (5:50 p.m.)
Mr. Peters:: Mr. Speaker, before the hon. member sits down may I ask him what there is in this bill that is different from the bill amending the 1907 act which was passed in 1955? As I understand it, at the time the company was almost totally owned by Quebec Telephone. That was in 1953. Then an amendment was made for the purpose of the sales agreement, with certain conditions in it. What has changed since 1953 or 1955 that would make this amendment more acceptable than the 1955 amendment?
December 3, 1968	COMMONS


Mr. Cyr:: Mr. Speaker, according to the 1955 amendment, this does not seem enough, since the company could not sell its network. In tact, in section 11 of the 1907 statutes, we can read the following:
Except as provided by section 13 of this act, the company, or any company whose line of telephone or telegraph is leased by the company or under its control, shall not at any time be amalgamated with any company possessing powers similar to those of the company; and any such amalgamation and any arrangement for making a common fund or pooling the earnings or receipts of the company, or of any company whose line of telephone or telegraph is leased by the company or under its control, with any company possessing powers similar to those of the company, shall be absolutely void.
The purpose of this bill, therefore, is to allow the Bonaventure and Gaspe Telephone Company Limited to dispose of all its assets and to amalgamate with the Quebec Telephone Company. I should like to draw to the attention of this house the fact that I am a subscriber of the Bonaventure and Gaspe Telephone Company Limited in Chandler. Since 1953, all business has been done with the Quebec Telephone Company. Only the name still remains, since the Quebec Telephone Company holds 99.9 per cent of the shares. Therefore, this is merely to simplify book-keeping and the reports which this company has to make to the federal and provincial governments. It is simply intended to simplify operations.


William Arnold Peters: May I ask a second question, Mr. Speaker? Is it not true that the Bonaventure and Gaspe Company is now wholly owned by Quebec Telephone, that Quebec Telephone really does not exist either as it is a subsidiary of Anglo-Canadian, that Anglo-Canadian does not exist in the telephone field but is totally owned by General Telephone of the United States, and that the purpose of this bill really is to give General Telephone a Canadian charter in the telecommunications field?


Alexandre Cyr: Mr. Speaker, I think the purpose of referring this bill to a committee of the house is to allow us to examine the operations of the Quebec Telephone Company, and I think the hon. member would then be able to obtain all the information he wants.


Frank Howard: Mr. Speaker,
I listened with interest to the hon. member 29180-218*
DEBATES	3441
Bonaventure and Gaspe Telephone Co. for Gaspe explaining the purpose of the bill. This was rather repetitious because, as the hon. member himself said, the same statements have been made on other occasions and in other places because the bill has been before parliament before but for one reason or another has not been proceeded with.
I took the liberty of reviewing the statements which were made in the Senate on February 1, 1988, by Hon. Leopold Langlois who sponsored the bill there, and there are two or three interesting quotations with respect to the bill which I should like to read because of the connection they have with the amendment made in 1955. Senator Langlois, as reported at page 813 of the Senate committee debates, in introducing the bill had this to say:
[DOT] (6:00 p.m.)
It is a matter of establishing clearly the power of The Bonaventure and Gaspe Telephone Company Limited, incorporated by a special act of the Parliament of Canada, to sell its telephone network to Quebec Telephone, a company incorporated in accordance with and subject to the laws of the province of Quebec.
There are other similar references in his remarks to the Senate transport and communications committee which examined the bill, Mr. Speaker.
One gleans from these general references that this is a small, locally owned telephone company. In view of the question asked by the hon. member for Timiskaming (Mr. Peters) a moment ago about the ownership of the company, I am convinced that some misleading took place when the bill was explained on other occasions. Senator Langlois, who pointed out that "it is a matter of establishing" a relationship between the Bonaventure and Gaspe Telephone Company and the Quebec Telephone Company, should clearly have set out and established the intricate ownership structure that exists involving this company, two or three other larger companies and a massive United States corporation operating in the telephone field and in a variety of other fields. I expect this matter will be explored in greater detail by one of my colleagues.
It may be, Mr. Speaker, that the sponsors of the bill both in this session and last have felt it not germane to the subject to relate the fact that this company is owned by a U.S. corporation, but in view of the concern that has been expressed on many occasions by members of the government as to foreign
December 3, 1988

Bonaventure and Gaspe Telephone Co. ownership and control of the Canadian economy, I think the point is relevant and should have been put forward for our consideration. That is so unless there was, of course, a desire on the part of the government itself, which may become more evident as we proceed, to abandon its position on Canadian ownership and in effect proceed to sell out Canadian interests in favour of an expansion of foreign ownership and control of our economy. I can see no other reason for the omission of this fact from the explanation given of this bill in the first place.
If I may proceed further with my references to Senator Langlois' comments, he went on to say:
The special 1907 act which set up The Bonaventure and Gaspe Telephone Company Limited-and I would refer honourable senators to chapter 64 of the 1906-1907 statutes-
These next words are very important.
-was amended by chapter 86 of the 1955 statutes In order, among other things, to empower the company to sell its business under the following conditions: first, the sale has to be approved by a meeting of shareholders called together for this purpose, at which meeting two-thirds of the shares issued must be represented by shareholders present in person or by proxy; second, the sale cannot take effect unless first approved by the Board of Transport Commissioners which, as the honourable senators know, has since become the Canadian Transport Commission.
This, Mr. Speaker, by Senator Langlois' declaration, was the purpose of the 1955 amendment, namely, to provide an arrangement whereby the company could sell its business under certain stated conditions that the senator enumerated.
I have obtained the House of Commons debates for 1955, Mr. Speaker, wherein this 1955 amendment was previously dealt with. Mr. Bona Arsenault, the then member for Bonaventure, sponsored the bill on that occasion. In his introductory remarks on second reading of the bill nowhere did he make a single reference to the conditions that Senator Langlois related and which appeared in Senate Hansard on February 1 of this year. Whether Mr. Arsenault just did not realize what was actually involved in the bill, felt that it was not an important matter, or wanted deliberately not to mention it, I do not know. However, it does seem to me passing strange that last February an hon. senator told the Senate that the main purpose of the amendment in 1955 was to permit the company to sell its assets under certain conditions, yet when we see what the sponsor of the bill had to say in 1955 there is no mention of
IMr. Howard (Skeena).]
these conditions. It seems the tune has changed over the years.
As reported at page 1952 of Hansard for March 11, 1955, Mr. Arsenault said:
For this reason it is felt desirable to have the name in French as well as in English, as is provided in the bill.
According to Mr. Arsenault, that was one of the purposes of the 1955 amendment. Another purpose was this:
The company also requests authority to increase its capital stock from $100,000, divided into shares of $100 each, to $2 million, divided into shares of a par value of $25 each.
A little farther on he said:
By virtue of this bill, which will increase to $2 million the capital stock of the Bonaventure and Gaspe Telephone Company, that company will be able to carry out a program of development and modernization-
And so on. Then Mr. Arsenault says that he is pleased to introduce the bill, which provides for an increase in the share capital of the company so that it can go ahead with some development programs. Mr. Arsenault's earlier remarks were actually in French and I have been reading the translation. He then went on to reiterate what he had said in English. He said that the bill had to do with the Bonaventure and Gaspe Telephone Company which was doing business in Quebec. The purpose of the bill was to seek an increase in its capital stock in order to increase certain facilities, and so on. But, as I say, Mr. Speaker, there is not a single word about the company selling its assets, which Senator Langlois told the Senate committee last session was the main purpose of the 1955 amendment. In fact, even if the amendment of 1955 had provided for the company to sell its assets and so on, according to Senator Langlois the business had already been sold in 1953. So this sale was two years old before the company even came to parliament asking for permission to sell.
[DOT] (6:10 p.m.)
Senator Langlois says that in 1953 the fixed assets of the company were worth so much and in 1966 they were worth so much more. Their value had increased. According to Senator Langlois the Quebec Telephone Company bought the stock of Bonaventure and Gaspe Telephone Company, Limited. Then we are told by the same senator that in 1955 a bill was brought to the house in order to authorize the company to sell its assets to somebody else when, in fact, it had already sold them two years earlier. Probably the
December 3, 1968	COMMONS
company wanted to validate what had been done. But why go through the process of misleading the Senate and the house about the situation? Why be secretive about ownership? These are valid questions to ask.
I know that the hon. member for Gaspe does not have the answers to these questions. He cannot read the mind of Senator Langlois and learn why he did not tell the Senate the full facts. He cannot search the mind of the former member for Bonaventure and determine why certain things were done that ended in the way Senator Langlois described.
The hon. member says we should refer this bill to a committee and try to obtain all relevant information there. I tried to find the relevant information for the year 1955. I tried to find a transcript of the committee proceedings in connection with this matter when it came before the house committee in 1955. I learned something very interesting. Not one word of the proceedings of the Senate or House of Commons committees with regard to this matter was transcribed. Undoubtedly the committees met in 1955 since they reported the bill back to the house with amendments, I believe. Undoubtedly witnesses were heard. Yet no transcript was produced to enlighten us. As I say, there is not a shred of evidence, not one iota of evidence as to what happened in either committee in 1955. If there had been a Senate committee transcript or a House of Commons committee transcript perhaps we might be in a better position to determine the full ramifications of this bill, and to know its antecedents when it goes to the appropriate committee of this house.
So far I have not mentioned anything about our attitude toward foreign ownership of our industries. It is clear that the company in question is foreign owned. Facts about the company must be dug up by individual members. I am not complaining about that because that is part of the function of members of parliament. We must inquire into the wherefores and whys of any bill that is before us and we must not take as the gospel truth any declarations or statements made about it. A tremendous amount of information may be unravelled in this way about the ownership of this company. All this will have to be explored in greater detail later.
As I said, this company is foreign owned and controlled. In the last few years, particularly when Mr. Pearson was prime minister, we saw a tremendous increase in the degree of foreign ownership of Canadian industry. Some say that 75 per cent of our economy is
DEBATES	3443
Bonaventure and Gaspe Telephone Co. in foreign hands and being controlled by people who do not live in this country, are not citizens of the country and have no allegiance to Canada. As a result their decisions are not always based on what is good for Canada, and in many instances they are removed from any effectual control by the government of Canada. This is a disgraceful state of affairs.
At one time I thought this country was moving in the direction of greater Canadian ownership of our assets and industries. I thought our government would make us feel proud of Canada and would assist us in developing a high degree of pride in the economic and social life of Canada. Now that is to be changed. There is a good prospect that our present Prime Minister and his cabinet have either sold us out completely or intend to sell out Canada's interests so far as control of our own economy is concerned.
Although this is a private bill this company's business will touch many Canadians. Although many in this country feel that we should own our own industries and our own economy, the government seems to be moving in the opposite direction. I should not be surprised to hear the Prime Minister and his government bring in a bill which would permit the insurance companies and various financial institutions of this nation to do as they darn well please without first coming to parliament to have their actions ratified. It seems to me that the direction in which the government is heading will lead to foreign control of our Canadian economy. This is nothing more than a sell-out of our economic life and it is disgraceful.
May I point out, Mr. Speaker, that the Bonaventure and Gaspe Telephone Company, Limited is not just a little, local rural company in Quebec.


Mr. Speaker:: Order, please. I must interrupt the hon. member to inform him that his time has expired, unless he has unanimous consent to continue beyond his allotted time.


John Gilbert: Mr. Speaker, one of the most important questions facing Canada today is the question of foreign ownership of our resources. If I had any theological training I would cite in full the story of Jacob and Esau to illustrate my point. It will be remembered, Mr. Speaker, that Esau sold his heritage for a mess of pottage. If ever any people in the world are selling their heritage of ownership for a mess of pottage, they are the people of Canada. I might even say that in Saskatchewan Mr. Thatcher is selling our
3444	COMMONS
Bonaventure and Gaspe Telephone Co. heritage for a mess of potash, but I am not too interested at the moment in Saskatchewan.


Donald Campbell Jamieson: Whose boss was Jacob?


John Gilbert: I note that the Minister of Defence Production is here. If I were to use a Newfoundland term I would say we are in a fine kettle of fish. I am sure that after I sit down he will relate his experiences with regard to foreign ownership as it has penetrated the province of Newfoundland and will certainly support the stand taken on this side of the house with regard to this very important bill.
[DOT] (6:20 p.m.)
You will notice, Mr. Speaker, that Bill S-12 is an act respecting the Bonaventure and Gaspe Telephone Company, Limited. The hon. member for Rimouski (Mr. LeBlanc) has set forth the purpose of the measure in the explanatory note. It is, he says, to resolve doubts as to whether the company may dispose of its undertaking to a company incorporated under or subject to the laws of any province of Canada. The explanation is a simplistic one.
As I studied the affairs of this company together with the hon. member for Skeena (Mr. Howard) and the hon. member for Timiskaming (Mr. Peters) we came across a revelation which was dramatic, to say the least. We found that this company formed part of a chain of ownership which extended to the Quebec Telephone Company, the Anglo-Canadian Telephone Company and across the international border to the General Telephone and Electronics Corporation in the United States. As the hon. member for Skeena said, it may be our duty to trace ownership. But one can appreciate the difficulties in this connection especially when one is examining the structure of a company such as this. We had to go to the Financial Post survey of industries, 1967. Then we had to turn to the section dealing with public utilities. To ascertain final ownership we had recourse to Moody's Public Utility Manual. The relevant entry extends from page 1151 to page 1160, nine pages setting forth the ownership of General Telephone and Electronics Corporation.
To get back to the Bonaventure and Gaspe Telephone Company, may I first of all refer to the question of ownership. The first link is the Quebec Telephone Company. In the Financial Post survey it is stated that the head office of Quebec Telephone is situated on Rue
[Mr. Gilbert.)
DEBATES	December 3. 1968
St. Jean, Rimouski. The company was incorporated in 1927 and the board of directors is constituted as follows: Hon. J. A. Brillant, chairman, Rimouski, Quebec; Jacques Brillant, president, Montreal; Norman Gendreau, executive vice president and treasurer; B. A. Beneteau, executive vice president; J. R. Bernier, vice president and comptroller; Maurice Martin, vice president, public relations, Rimouski, Quebec; Claude Pratte, Quebec City; H. A. Sewell, St. Catharines, Ontario; J. J. Clerkin, Jr. Darien, Connecticut; J. J. Douglas, Scarsdale, New York, vice-president, general counsel and secretary; Yvon Cote, Julien Thuot.
You will notice, Mr. Speaker, that among these ten or so directors there are eight Canadians and two Americans. There is no objection to that; it shows there is a Canadian majority on the board.
The report tells us that a subsidiary of Quebec Telephone is the Bonaventure and Gaspe Telephone Company, which is wholly owned and serves the south shore of the Gaspe Peninsula, Quebec. So this is the first link in the chain of ownership. We then set about further investigation and found that Quebec Telephone is itself a subsidiary of the Anglo-Canadian Telephone Company whose head office is situated at 715 Victoria Square, Montreal. This is a holding company whose subsidiaries own telephone systems in British Columbia, Quebec and the Dominican Republic, and supervise publication of telephone directories and installation of services for telephone companies in Canada. The company is itself a subsidiary of General Telephone and Electronics Corporation which acquired all of its class A shares in 1965 through an exchange offer of two and a half General Telephone shares for each class A share of Anglo-Canadian. The class A shares have since been redesignated as common shares. This is what we read in a lengthy paragraph setting forth the situation with regard to ownership. Then we find a list of the directors of Anglo-Canadian Telephone Company as follows: J. J. Douglas, president; D. C. Power, L. H. Warner, J. J. Clerkin, Jr., New York; T. A. Boyd, Bronxville, N. Y.; Aristide Cousi-neau, O. B. Thornton, A. S. Torrey, Montreal; C. H. McLean, Vancouver; Jacques Brillant, Rimouski, Que.; vice president, T. S. Gary; vice president, secretary and treasurer, Cameron Hough.
Again, we notice a mixture of United States and Canadian directors. I think it is clear as I complete the chain of ownership
December 3, 1968
that ownership eventually falls into United States hands. We found in the first instance a large representation of Canadian directors and a small representation of United States directors. In the second link we find a 50-50 split with regard to directors. My hon. friend from Timiskaming has suggested that some directors may be dummy directors. I can only say we shall have to investigate this when the bill is referred to the standing committee on finance, trade and economic affairs. Experience has shown that many companies do make use of dummy directors. For practical purposes, these people are men of straw. I am sure that the hon. member for Rimouski, who is a man of great integrity, will make the position clear when he addresses the standing committee.
When we get to the third chain of title, Mr. Speaker, we cross the Canadian border into the United States, the country to the south of us which has tremendous holdings in the Canadian economy. I spoke briefly on this subject earlier today to apprise hon. members of the tremendous penetration which has been made into the Canadian economy. If we keep repeating this it will make members on the government side appreciate the immensity of the problem, and help get them away from this continentalist "kick"-this tendency to integration with the United States economy. If ever there was a time to speak about Canadian nationalism, it is now. We should not be sold down the river by the smooth and sleek methods used by United States corporations in penetrating the Canadian economy.
e (6:30 p.m.)
As we cross the border and get into the state of New York we have the General Telephone and Electronics Corporation. They are what I would describe as the first owners of this little company situated in Gaspe. When you look at this publication, Moody's Public Utility Manual, you discover it takes ten pages to give the financial structure and operations of this American corporation, and then you appreciate, Mr. Speaker, that this company is one that really needs a great deal of investigation because it has developed not only vertically, and taken in other utilities throughout the United States and Canada, but it has developed horizontally and is acquiring interests in various types of manufacturing.
When you have vertical and horizontal integration it becomes like the tentacles of an octopus, and we are in a very serious plight in Canada with regard to this type of operation.
Bonaventure and Gaspe Telephone Co.
This type of development has been of recent date in the United States. At the turn of the century man looked upon himself as a great enterpriser. He went out and conquered a particular area of business. He staked it out for himself. He worked hard and managed to get other workers to work with him. It was a form of partnership in the development of a particular industry. One rather admired the courage and initiative that man had in the early part of the twentieth century.
But having developed that, he became sophisticated in his type of ownership. There is a certain greed that penetrates the heart and mind of man. Once he has tasted success there are no limitations. He has to go on and on, like the man with the barns, who just kept on growing larger and larger crops, and who, when he asked, what he should do, received the answer, "Build bigger barns." Corporations are like this. They have become bigger and bigger. Not content to stay in their own backyard in their own country, they have invaded other countries.
If you are going to be a successful entrepreneur these days you have to have it both ways. You have to have the input and the output, as we say. You have to have the natural resource flowing from one country. You have to have the manufacturing process, and then you have to acquire the markets to market the goods. This has been the history of these entrepreneurs of today. This is why we call these companies multinational corporations. They not only want to control the product, but also its input and output.
This is what the General Telephone and Electronics Corporation is doing in the United States. It has now moved across the border into Canada and is acquiring ownership of Canadian companies. If I were to read into the record the financial structure and physical structure of this company it would take me a couple of hours, and I am sure members would not want me to do that. They would prefer that I summarize it. The corporation is a holding company. On December 31, 1967, it controlled more than 30 subsidiary domestic operating telephone companies, serving 7,728,992 telephones through 2,562 exchanges in 34 states, and also controls various manufacturing companies. That just indicates the magnitude of the company.
In one of the paragraphs it says:
Company together with a controlled subsidiary (Anglo-Canadian Telephone Co....) controls 50.24 per cent of British Columbia Telephone Co., and 53.07 per cent of Quebec-Telephone with 855,657

3446	COMMONS
Bonaventure and Gaspe Telephone Co. and 126,424 telephones as at December 31, 1967, respectively. Anglo-Canadian also controls telephone company in Dominican Republic.
I had not mentioned that, Mr. Speaker. Not only has it invaded Canada but it has gone south of the border, right down into the Dominican Republic. I hope when the ministers went on their safari to South America they appreciated that they were going into countries this particular company had invaded. When I use the word invaded I use it in a financial sense.


Mr. Whelan:: Not like the Russians.


John Gilbert: I don't use it in the Russian sense, as the hon. member for Essex (Mr. Whelan) says. I should say that the hon. member is well aware of this problem because he comes from a very humble background, like myself-


Donald Campbell Jamieson: He can't afford a phone.


John Gilbert: -and his success has been dependant upon his own initiative. I rather admire him because he is a chip off the old block, so to speak. I feel the same, having come from very humble surroundings, and having attained the high position we have today I think he and I should have a certain justification of pride. So, I rather enjoy the interruption of the hon. member, because I think he deserves credit for the position he has attained. The unfortunate part, Mr. Speaker, is that the government has directed him into a portfolio which has little or no relationship to the background the parliamentary secretary possesses. He comes from an automotive area, and the government has him in the fisheries department. One wonders why it would make such a serious mistake.
If I had time I would set forth the list of the directors and a list of the property which this company owns, but I notice my time is running out. In conclusion I should say that it could be fairly said that this company is American owned and dominated, and I think hon. members should be made aware of this when considering Bill S-12 respecting The Bonaventure and Gaspe Telephone Company, Limited.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I have listened with great interest to this debate, and as a new member of parliament I am fascinated by the revelations that have been made. I guess I am a bit naive, but

DEBATES	December 3, 1968
I took at face value the explanatory note printed with this bill, which says:
The purpose of this bill is to resolve doubts as to whether the company may dispose of its undertaking to a company incorporated under or subject to the laws of any province of Canada.
This bill has bearing on a very important Canadian industry. As hon. members, know, Canadians are among the most avid telephone users in the world, so anything affecting an industry of such great importance to Canadians should be of great interest to members of this house. It was interesting for me to note during the debate that what we are discussing virtually amounts to a monopoly situation.
e (6:40 p.m.)
This is a monopoly industry in almost every area of the country with which I am familiar, and possibly throughout the world. We have seen cases of many small telephone companies having been gradually absorbed by larger, perhaps more aggressive or more efficient telephone companies to the ultimate benefit of the companies and also perhaps the public, but not necessarily so. We have seen phone rates increase year after year. Services in some instances have improved, and in others they have not. British Columbia, the province from which I come, as you know has had similar experiences in respect of a monopoly telephone situation. Although it is called, and is incorporated as the B.C. Telephone Company, it is owned and directed by persons and companies that were not resident in our province. One of its leading managing directors, Mr. Cyrus McLean of Vancouver, has been most active in its management. Since the hon. member for Broadview (Mr. Gilbert) mentioned General Telephone's ownership in the Dominican Republic system it might be interesting to note that when the marines landed in the Dominican Republic to remove Juan Bosch and his group from there some years ago, one of our greatest fears was in respect of one of our Canadians who was down there doing business at that time, none other than Cyrus J. McLean of the B.C. Telephone Company.
The hon. member for Gaspe (Mr. Cyr) suggested that possibly the reason this bill should have our support is the fact that it is already 99.4 per cent owned by the Quebec Telephone Company, and that in any event the passage of this bill might avoid some serious overlapping. He did not go into any detail concerning what would be involved in this overlapping, or how it would be occasioned. If my arithmetic is correct only a
December 3, 1968

small part of it, .6 per cent, seems to be owned by the original company. It would seem to me that if there is only a .6 per cent overlap, this is not really very serious. I believe that in many of our other industries, notably the insurance industry, the overlapping would be perhaps in excess of this by a much larger amount.
What I was concerned about, as this discussion unrolled, was the secretiveness with which the various tiers of the hierarchy of ownership have been kept from us. I know that some members, especially in this party, have been diligent in searching this out, but I humbly suggest that when a bill such as the present one comes before the house, which has intense international ramifications, the members of this house should be acquainted with the background, and given much more information than has been provided to date.
I do not believe nearly enough information has been passed on to me in order that I might make a reasonable response in respect of this bill.
There is information about the various levels of ownership; additionally, I believe, there should be a little more background information made available to members who wish to discuss this matter intelligently. One question which might be asked is, will this legislation ultimately be in the interests of the residents of Gaspe? If I were assured that this is so, I am very certain I could support this bill with a great deal of pleasure. I am told that two thirds of the share membership, or their proxies must be present at a meeting in order for its sale to go forward. We have no figures concerning how many shares are held by one person. It would appear to me that this is the type of information we should have here, so that there would be a complete revelation of the facts behind this whole thing.
Another matter which disturbs me greatly is that it appears from the information revealed in this debate that parliament is being asked to suffer the indignity of facilitating a sale that has already been effected. If this is the case, then it seems to me that perhaps all the revelations necessary for a sensible discussion are irrelevant, and that all parliament is being asked to do is spend its time in rubber stamping something already accomplished some years ago.
Many companies disguise their ownership. They do this to keep from public scrutiny their various plans and their various directors. Directorships, as revealed by John Porter, 29180-219
DEBATES	3447
Bonaventure and Gaspe Telephone Co. tend to be overlapping in Canada with the same people pulling the strings in respect to the major corporations all across our land. The Canadian public is becoming increasingly critical of a trend that has been going on for some years, which was referred to by the previous speaker. The Watkins report, tabled a year ago, was a shocking document. It certainly alarmed a great many Canadians because of its reference to the growing extent of economic control by foreign owned companies in Canada. The fact that economic control has taken place is one thing; but what in my view concerns the Canadian public is the kind of political control that will ultimately follow this economic control.
We spend a great deal of money on various communications media in this country. We spend millions of dollars on the C.B.C. We will be spending millions more on the satellites. We spend it on the National Film Board. It is the public's money we are spending on these things. Simply stated, we subsidize communications. Perhaps at some time it might be wise to consider that perhaps the telephone industry is a very important communications medium also, and that it is not in Canada's best interests to have this remain in private hands, especially if the reins of control are held by those outside the country.
The telephone industry in North America is a giant octopus. I think we should be looking in the direction of buying up and buying into this very important communications link, for the benefit of all Canadians, instead of sitting here debating a bill that involves the selling of more of it to companies which in my view already have too much. Thank you.


Mr. Deputy Speaker:: Order. The hour for the consideration of private members business has expired.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to provisional standing order 39A to inform the house that the questions to be raised at the time of adjournment tonight are as follows: The hon. member for Winnipeg North (Mr. Orlikow)-Immigration-distribution of pamphlet as to availability of housing; the hon. member for Abitibi (Mr. Laprise)- Housing-Quebec-additional loans to counter

December 3, 1968
Finance
unemployment; the hon. member for Hillsborough (Mr. Macquarrie)-tabling of the Macintosh report by the Postmaster General.
I do now leave the chair, pursuant to special order of the house today. The house will resume at 8 p.m.
At seven o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


Hon. G. J. Mcllraiih (for the Minister of Finance) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Bretton Woods Agreements Act and the Currency, Mint and Exchange Fund Act so as to enable Canada to participate in a new arrangement in the International Monetary Fund to create new reserve assets that would supplement gold and reserve currencies in the participating countries foreign exchange reserves and would effect certain administrative and operational exchanges in the existing structure of the fund: and to permit the exchange fund account to receive, hold and sell the new reserve assets.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Bechard in the chair.
Herbert Eser (Herb) Gray: Mr. Chairman, the bill which will be based on this resolution will represent a major step forward in the evolution of the international monetary system. With the establishment of the scheme to create special drawing rights in the International Monetary Fund, for the first time nations will be able to create international monetary reserves, to meet the requirements of the whole system, by deliberate and joint action. The main objective of the bill will be to provide for Canada's participation in this exciting development.
The bill will set out a number of amendments to the articles of agreement of the
I.M.F. to provide for the operation of the scheme to create special drawing rights. It also will set out certain amendments modifying the rules and practices of the existing operations of the fund to reflect the experience of almost a quarter of a century.
The government hopes that this legislation will have the wholehearted support of this house and that its passage will not be

delayed. This should not, of course, exclude a thorough consideration of its various aspects in committee. The last time this house had an opportunity to consider these matters at some length was in March 1966 when a bill to increase Canada's quotas in the International Monetary Fund and the I.B.R.D. was before the house. At that time the late Colin Cameron and other members called for the creation of the equivalent in the international field of the managed currency which all modem countries use in their domestic economies. A good deal of interest was shown in the broader issues at that time, and the matter was discussed in the committee on finance, trade and economic affairs, of which I was then the chairman.
As members who participated in that discussion well know, the resolution before us represents the culmination of more than four years of intensive study and negotiation by ministers and senior officials in the group of ten and by the executive directors of the
I.M.F. The essential soundness of the proposed scheme is a tribute to their efforts. The fact that such complex discussions were begun in time and successfully concluded is a reflection of the international co-operation in economic and financial affairs which we have come to expect in the post world war II period, but which had failed to develop significantly up to that time.
At the centre of this co-operation has been the I.M.F. The fund was conceived, along with the International Bank for Reconstruction and Development, during and came into being immediately following the second world war. The results of narrowly nationalistic policies were evident everywhere and the memories of the disastrous consequences of the self-defeating economic policies of the 1930s were still fresh in people's minds. The fund's founding fathers therefore set out to create an international authority to establish and maintain a high standard of conduct in international monetary and economic affairs and which would be endowed with the facilities and the financial resources to help countries to live up to this standard. The significant success achieved by the I.M.F. since 1946 has contributed to the growth of world trade and payments and consequently to the prosperity which Canadians now enjoy. Canada is heavily dependant on international trade and the availability of capital for its prosperity. We have therefore a very large stake in the success of the I.M.F.
Consequently Canada made a noteworthy contribution to the negotiations at Bretton
December 3, 1968

December 3, 1968
Finance
competent and experienced forum. Membership in the scheme will be open to all members of the fund. SDR's will be traded among monetary authorities for convertible currencies. They will not be usable for direct intervention in the foreign exchange markets or for other private transactions. SDR's will be assets owned by a participating country and recorded on the books of the special drawing account in the International Monetary Fund. They will be freely and unconditionally available with two exceptions:
(i)	They will only be usable for balance of payments needs, not solely to change the composition of a country's reserves;
(ii)	A country making an average net use over five years of more than 70 per cent of its net cumulative allocation of SDR's will incur a reconstitution, in other words a repurchase, obligation. These rules are to help ensure that the new asset will not be abused in its use and will be held by all the participating countries.
The new asset is a fiduciary asset, that is, its value is based on the willingness of countries to accept it in exchange for convertible currencies. It is not backed by any particular asset and in that respect is like the domestic currencies of most countries. Decisions to create SDR's will be taken by the board of governors of the International Monetary Fund on the basis of a proposal by the managing director which has been concurred in by the executive directors. A majority of 85 per cent of the voting power of the participants will be required.
SDR's will be created to meet the long run growth in global demand for reserves-not to meet the balance of payments needs of individual countries. Consequently the decision to create them will be taken every five years and the amount decided will be distributed in equal proportions annually. Of course, if circumstances alter considerably during the five year period it will be possible to make appropriate adjustments in the annual distributions.
SDR's will be used to obtain convertible currencies from other participants either directly or through the special drawing account acting as intermediary. Normally currencies will be acquired from participants with a strong balance of payments and reserve position. A participant's obligation to accept SDR's ceases when its holdings are three times the net cumulative amount of SDR's allocated to it. They will be gold value

guaranteed, that is, their value will be protected against changes in the value of national currencies, and they will earn a moderate rate of interest-1J per cent-the cost of which will be assessed against members in proportion to the net cumulative allocation of SDR's to them.
Newly created SDR's will be distributed to participants in the same proportion as their quotas in the International Monetary Fund. Consequently, if it were decided to create $1 billion of the new asset, Canada would receive $35 million of SDR's. No offsetting liability will back this new creation other than the obligation to accept, in certain circumstances, the asset from others for convertible currencies.
A number of other amendments to the articles of agreement of the International Monetary Fund will be proposed in the bill to modify the rules and practices of the existing machinery of the Fund. Most of these proposals are rather technical and represent no more than a clarification or codification of practices developed over the years and followed currently by the Fund. Others take into account the existence in reserves of SDR's and the operation of the special drawing account. I shall mention here only the most important of the proposed amendments.
Henceforth a general increase in quotas in the International Monetary Fund will require an 85 per cent majority vote of the governors instead of 80 per cent. This will bring the practice in the fund in line with that proposed for SDR's. Requests for purchases of a country's gold tranche, which corresponds to the 25 per cent of its subscription paid in gold or U.S. dollars, are now created automatically on a de facto basis. One of the amendments will make the use of the Fund's resources in the gold tranche legally automatic. Another amendment will remove the present limitation on making gold tranche purchases for meeting capital transfers. A member will be able to make gold tranche purchases even though they are to meet what might be regarded as a large or sustained outflow of capital.
A transaction charge of one half of 1 per cent is currently levied on gold tranche drawings, and this will be removed. Henceforth remuneration at the rate of 1J per cent per annum will be payable on creditor positions in the fund. In most years since 1963 Canada has been in a substantial creditor position. There are other amendments which are less important and I will be happy to
December 3, 1968

discuss any or all of them at later stages of debate if it is the wish of the house.
Finally, Mr. Chairman, the bill will propose a change in the Currency, Mint and Exchange Fund Act which will permit special drawing rights to be held in and counted as part of Canada's exchange fund. In this way we will have authority to fulfil the undertaking in the new scheme to accept and hold the new special drawing rights. The government hopes that it shall, in the near future, be able to notify the managing director of the Fund that the Canadian parliament has passed the necessary measures to enable Canada to participate in this historic step forward.
e (8:20 p.m.)


Marcel Joseph Aimé Lambert: Mr. Chairman, the rather hurried and capsuled description of the proposed legislation-and I do not wish to criticize the parliamentary secretary when I say this-is something which, in my view, confirms the requirement that, following the passage of this legislation and the printing of the bill, the government should immediately place a resolution on the order paper-and I am quite prepared on behalf of the opposition to accept a motion from the appropriate minister without further notice- that the bill shall be referred to the committee on finance, trade and economic affairs for examination and, if necessary, for the purpose of hearing certain representations. I think that, while some people may perhaps criticize the desire to examine this legislation in greater detail and to hear representations in connection with it, as being an unnecessary step, what we have experienced in the last 18 months is a clear indication that the methods used by the countries to exchange their currencies and to maintain the stability of their currencies, and in fact all the operations of the I.M.F., have come under the most extreme strain.
There have been crises with respect to the two reserve currencies, twice with regard to the pound, the last being in November of 1967, and a massive assault on the dollar in February and March of this year. The last one was a few weeks ago with regard to the franc. The unfortunate part is that the rhythm of this cycle of financial crises is accelerating. It is almost as though we were watching a boat starting to rock while at the same time we possessed a greater force which accentuated that rocking. Soon the rhythm will accelerate and the effects on the boat will become more pronounced. It will be that
Finance
when we go over the brink it will be too late,
and therefore I think it is of the greatest importance that we as Canadians contribute to the desirable stability in international monetary relationships.
All types of governments participate in these relationships, and I do not think there is any country, whether it be socialistic or capitalistic, that has a monopoly in or an exclusive recipe for the maintenance of prosperous conditions in that country. Why must there be additional international credits? Simply because the U.S. dollar and the pound sterling which have been used by the International Monetary Fund as reserve monetary units have come under increasing internal strains, and this has been the weakness of the International Monetary Fund in recent years. The U.S. dollar is affected of course in its value by actions on the domestic scene, and all too often those efforts which are made domestically in the United States in connection with problems of inflation or of stimulation of the economy have opposite or complicated effects when it comes to the international market.
We have seen that the strain on the U.S. dollar came about this last spring as a result of the continuing pattern of deficiency on the balance of payments accounts while the United States was active in its trade pattern, its foreign aid, the war in Viet Nam and in a number of other fields. The net result was that known holdings of U.S. dollars by Foreign interests last March exceeded by about $4,000 million the U.S. gold holdings. The reason why the pound sterling has been under severe attack is similar. That currency too has become a unit of international holdings, particularly by countries, banks and individuals in the Middle and the Far East. It is a currency of international commerce. The Lord only knows, the British have been having problems at home, many of them of their own making, and yet the pound, which is suffering such vicissitudes on the domestic scene, is supposed to be the unit of stability on the international scene. We have seen now that this cannot continue.
So far as Canada is concerned, those of us who were here last February and March were well aware of how close we came to the point of having to devalue our currency. The then minister of national revenue was indiscreet in indicating a figure on television, when in actual fact the correct figure was somewhat lower. The then minister of finance had to rebuke his colleague for being indiscreet on

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television, but for the administration of the day it was par for the course. To me it was just a measure of irresponsibility.
As a matter of fact, just what was the pressure on the currencies? As we know, there was a flight from the franc to the German mark, and there was a tremendous amount of speculation with regard to the mark because it was anticipated there would be a revaluation upward. There are movements of floating capital, which is known as hot money, which are undertaken to improve the value of the capital as a result of fractional changes in valuation.
[DOT] (8:30 p.m.)
When it was decided by the French government that the franc would not be devalued, and that the Germans were not going to revalue the mark upwards, about which the Germans were not too enthusiastic, in one day there was an immediate flight of $300 million from the German mark to United States dollars. So you observe, Mr. Chairman, this movement back and forth.
If the United States dollar is affected by this crisis, then so is the Canadian dollar. Although we might be standing by relatively innocently on the side, as a very interested bystander in a currency crisis for one of our trading partners in western Europe, we are caught up by the splash. Therefore, Mr. Chairman, we in Canada have a special interest in the liquidity of the international reserve units, particularly unit that is being set up under these proposals for special drawing rights which are available in times of crisis.
I indicated, Mr. Chairman, that we are going to get caught up by the splash. May I point out that since 1963 Canada has become even more involved. I wish that Canada were not so involved with the U.S. dollar, that there were more options open to Canada in dealing with domestic situations and also with our own position in the international market. We have what the Minister of Finance, I think for reasons of semantics, wishes to call a target; but what I call a ceiling, call it what you will, Mr. Chairman, Canada may hold between $2.55 billion and $2.6 billion worth of United States obligations.
What has happened since this crisis last March, Mr. Chairman? First of all, we are down to holdings of $2.55 billion. Of that sum, $500 million consists of non-negotiable United States securities which Canada retained as a result of realizing some of its

convertible United States obligations. This Canada had to do as the price of relief from the mandatory guide lines that were set last January, and the manner in which we were involved during the currency crisis last spring. This situation is severely limiting Canada's options for dealing with its financial problems at home and on the international market.
I was glad to hear from the Minister of Finance, Mr. Chairman, that talks are now going on with the United States treasury officials on this particular subject. Less than one year ago, Mr. Chairman, I was told there was no problem with the ceiling. I do not take credit for my remarks, but pressures here and there, have had some effect on finance department officials. I am not alone in my views. Nevertheless it is conceivable that some of the remarks made by Canadian delegates-chiefly myself-during the Canadian-United States interparliamentary union meeting in March may be bearing fruit. I believe that this so-called ceiling, if we must have one, and I say we should not, should be raised; it should be increased by at least $1 billion.
I suggest, Mr. Chairman, that this ceiling is having a deleterious effect on our domestic financial operations in that, our trading pattern having been what it has during the last 18 months, the Bank of Canada has found itself under obligation to enter the exchange market to pick up U.S. dollars. To do so it has put into circulation millions of Canadian dollars. In other words, it has had to skim off the market of U.S. dollars within Canada to keep us under the ceiling.
We know that last week, Mr. Chairman, the Minister of Finance engaged in some refinancing operations and was able to prepay some obligations falling due in 1969. At the present time he has been able to pick up a little spare cash. As a matter of fact, he indicated that he would not have to go to the capital market again shortly.
That may be his plan, Mr. Chairman, but frankly I can see a danger arising which may make the minister go to the market. The minister will need cash to go to the exchange market to buy up U.S. dollars, because we are pushing through the ceiling that has been imposed upon us. If our holdings go up, or threaten to go up, to $2.7 billion, $2.75 billion or $2.8 billion, the minister has to skim off the extra up to $200 in United States funds, and for this he will have to go to the market.
December 3, 19G8

What will be the result then, Mr. Chairman? There will be an upward pressure on our domestic interest rates. This will bring in U.S. money for investment purposes, and away we go again as the wheel turns. The system is self-perpetuating and certainly of no assistance to the government in maintaining an even hand on the tiller, so far as our financial situation is concerned. It is for that reason among others that the sooner we get out of this strait-jacket the better.
At the present time, Mr. Chairman, the Canadian government's credit position is lamentable. The bond market is in disarray. If hon. members want to read something that is truthful, that has no political bias or partisan approach-something which some might try to ascribe to my remarks-then let them read the remarks of the president of the Bank of Montreal yesterday. They are a clear indication of what is thought of the bond market. Let hon. gentlemen opposite consult with their financier friends-and the Liberal party does have friends in Toronto around Bay street, or do they now?-and get a frank answer from those who are in the bond business or the banking field about the position of Canadian bonds.
We know how the level of interest rates has had a general effect on housing, Mr. Chairman. To assist in the correction of this problem the government must start at square one. We must first attack this artificial ceiling that we have on U.S. exchange holdings. Then we shall see that we can have greater freedom to act on behalf of Canadians.
[DOT] (8:40 p.m.)
The parliamentary secretary gave us a brief outline in capsule form of many of the main features of the bill-the special drawing rights, that these were new and were not replacing other reserve units, and so on and so forth. I do not think I need to comment on all those things. I can only say that we will appreciate being able to get hold of the bill. I trust this resolution will pass this evening. Finally I should like to know from the parliamentary secretary whether there is an undertaking from the government that the bill will be referred to the finance committee for study in the new year.


John Stratford Burton: Mr. Chairman, I note with pleasure that the parliamentary secretary to the Minister of Finance recognized the abilities and knowledge of the late Colin Cameron in the field of financial and monetary affairs. I hope that recognition will produce a further
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study of his ideas which he so often presented to parliament; I also hope that that study will result in the adoption of some of the ideas he advocated so eloquently.


Some hon. Members:: Hear, hear.


John Stratford Burton: Although I do not wish to detract from the parliamentary secretary's sense of history in bringing forward this proposal, I think it is necessary to express a note of caution, so that we may deal with this proposal in as realistic a fashion as possible.
The proposal before us was developed after a great deal of work and negotiation, yet it is but one step on the difficult road we must thread in finding a monetary system that will work satisfactorily. In this respect it is worth noting that the special drawing rights referred to by the parliamentary secretary, which will be dealt with in the bill, do not help with respect to the current problem that has been facing monetary authorities the world over in recent weeks. The Financial Post of November 23 has this to say on the matter:
Contrary to some views, the present money crisis is not the type of problem the proposed Special Drawing Rights (SDRs)-or international reserve currency to supplement gold, US$ and sterling- was designed to correct. "SDRs are designed to improve world-wide liquidity, not to stabilize an imbalance between one country and another," a senior Ottawa official said. "It would be wrong to use SDRs-if they were in operation-in a situation like the present French-German problem," he said.
The parliamentary secretary also noted that in the proposal before us, which is to establish special drawing rights, there is no provision to replace gold or other reserves. That, itself, indicates the role this measure will have in dealing with our monetary problems.
I submit that we can consider this resolution in a realistic way only if we consider recent developments in world monetary affairs. No doubt hon. members are aware of the events of the past few weeks. These were summed up neatly in the Globe and Mail of November 21, in an article reprinted from the New York Times and the Associated Press:
The latest international money crisis-the third in 12 months-has exposed once again what many regard as the Achilles heel of the otherwise successful international monetary system that was agreed upon by the leading nations almost 25 years ago.
But while the vulnerability of the system to crisis is now widely recognized, there is only the barest

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beginning of official exploration of the most plausible remedy. The remedy is already seen to present numerous problems.
The Achilles heel is that the monetary system provides for fixed, steady exchange rates among currencies for trade and other international transactions, without any parallel binding obligation for nations to pursue policies that keep their international payments in balance at the exchange rate they have chosen.
Thus, in the view of thoughtful critics, the system makes it almost inevitable that from time to time one or another leading country "gets out of whack" with the others-yesterday Britain, today France and Germany, tomorrow, perhaps, the United States. For one reason or another, a nation's balance of payments drifts into chronic deficit or chronic surplus.
The article then points out the reasons for the difficulties that are encountered in the present system. I continue quoting:
The system provides a way out-devaluation of the exchange rate for a country in deficit, or revaluation for a country in surplus. But this is invariably a painful move for domestic political reasons. In the case of devaluation, for example, consumers pay more for imported goods and vacations abroad cost more. In the case of revaluation the profits of the important export industries are reduced and the farm sector may be badly hit.
The inadequacy of our present monetary system has been illustrated in the past few weeks by the panics that have developed when problems have arisen. There are special meetings of finance ministers and top monetary authorities of the countries involved. They patch up the difficulty that has been presented, and we go to another crisis a few months later.
Basically we lack enough liquidity money to cope with the amount of world trade as it has been expanding over the past decade. Canada, I think, is in a most vulnerable position, a position set out in the Financial Post of November 23, where the following words appear:
The stability of the C$, and that of many other currencies, could be upset if Europe's money troubles are not solved soon. But for the moment, France's problem is localized and Canadian observers are hopeful a solution can be found before trouble spreads.
It will take more than mere hope, Mr. Chairman, to solve our present problems. I ask, what action has Canada taken? Certainly, we have participated in some international negotiations. All the same, has there been any real Canadian initiative to deal with the problems at present facing us?
I wish to remind the committee of something the hon. member for York South, my parliamentary leader, said a week ago when

the Minister of Finance made a statement to the house about the recent situation I have just discussed. The hon. member for York South deplored the state of affairs that permits our monetary affairs to be so profoundly influenced by speculators, and people manipulating our international financial affairs. In this connection I was interested to read an article in the Ottawa Citizen of November 16 about these gnomes. The heading is, "Who and where are the gnomes?", and the article says this:
International currency crises are commonly blamed on the manipulations of the money market speculators, the gnomes of Zurich, or Wall Street, or even Bay street.
But it is not generally known just who these men are and how they practise their financial wizardry.
Money market experts paint this composite picture of the average gnome:
He is either the treasurer of a big corporation, or its adviser. His job is to advise his company, among other things, on the prospects for fluctuations in the value of the major currencies.
On his advice, his company will flit from currency to currency, trading the weak for the strong. In the process, it can both make money and guarantee protection for its assets.
[DOT] (8:50 p.m.)
Later the article goes on to discuss the influence which these speculators and "gnomes" have on the international monetary situation. The writer states:
Opinions on currency speculators vary. Government officials cite dangers in putting the interests of the company before country.
They point out speculation is self-generating. When dollars are sold in large volume, the exchange rate goes down triggering more sales. A heavy flight of dollars from the economy drains foreign exchange reserves which have to be shored up by the central bank.
Later the article says:
The decisions are not always easy. Sometimes a warning flashed by a currency adviser can have drastic implications for an economy.
Some observers have suggested that changes ought to be made in the present international monetary system. This question was discussed in the Globe and Mail of November 29:
The frequent recurrences of these monetary pressures raises a question as to whether the rigidities of the present fixed-exchange rates should be scrapped in favour of a more flexible system that permits a currency to fluctuate more than the present 1 per cent above or below its declared value.
There is an even broader framework to be considered, and it includes the proposal for the demonetization of gold entirely. This is dealt with in some detail by Mr. Harry
December 3, 1968

Johnson of the London School of Economics in an article which appeared in the Globe and Mail shortly after the gold crisis of last March. Mr. Johnson states:
Painful as the process may be, the attempt to preserve a special monetary role for gold may quickly end in the realization that the effort itself automatically demonetizes gold and converts the world monetary system into one based purely on bookkeeping transactions.
The hope must be that the world's monetary authorities can meanwhile keep their nerve. If they weaken, progress toward a rational international system will be put back a generation. The gold crisis which erupted again two weeks ago, forcing the emergency meeting in Washington, has long been anticipated by international monetary experts.
The only question has been when, and that question has now been answered. At the root of the crisis is the inherent logic of the gold exchange standard itself-the system under which the major countries maintain fixed exchange rates between their currencies by pegging them to convertibility into gold at a fixed price. As a means of providing an international monetary framework, however, this system is inherently illogical. For there is nothing in the laws of nature to guarantee that additional supplies of monetary gold will be forthcoming at precisely the rate required to provide for the world's growing needs for international money.
Instead, the world's supply of new monetary gold is dependant on the vagaries of:
-New discoveries and changing technologies of gold extraction;
-The demand of hoarders and commercial users;
-In the past 10 years, communist sales of gold from stockpiles or new production.
The article goes on to state:
It is true, theoretically, at least, that the gold standard has a self-stabilizing tendency. This is what Jacques Rueff, a leading French economist, is fond of arguing. If prices rise, gold production becomes less profitable, exerting a deflationary influence on the supply of monetary gold and hence on money. Conversely, falling prices stimulate new growth production, exerting an inflammatory influence on the supply of money and prices.
But these influences are slow and uncertain and are swamped by the forces of change in gold technology on the one hand and financial innovation on the other. In addition, government policy makers are not now prepared to abide the slow-grinding discipline of the gold standard.
Throughout the twentieth century the long-run inclination has been for new monetary gold supplies to increase less rapidly than the demand for international reserves. This tendency has been reinforced by government policies that have produced a secular inflation of prices. The result has been a growing scarcity of gold, which has been avertable in the short run by the substitution of national securities convertible into gold for gold itself, at the long-run cost, though, of rendering its system increasingly vulnerable to crises of confidence.
The article goes on to state:
Since the second world war the dollar has come to play the role previously played by sterling and
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the system has arrived at precisely the same sort of crisis of confidence. Under the system a crisis of confidence is ultimately inevitable. But when and where it strikes depends on the appropriateness of the fixed exchange rates between the various national currencies mediated by the use of gold as an international monetary base.
Mr. Johnson concludes his study by stating:
A coldly rational view of the present international monetary situation would be (1) that gold is a very poor and unrealiable base for an international monetary system and (2) that as soon as possible it should be dispensed with. This implies (3) that gold held as a monetary reserve should be sold as rapidly as possible to anyone who has a non-monetary-and especially a misinformed-speculative use for it and (4) that international reserve money should instead be provided by an international credit operation.
This is, in fact, the way in which world central bank opinion has been moving. In particular, the plan for special drawing rights approved by the International Monetary Fund in Rio de Janiero last September implied the eventual replacement of gold by as pure a pure credit money as could be devised.
Some of these proposals have been dealt with by other observers who share the concern felt for the stability of the present monetary system. Mr. Alan Day of the London Observer service recently stated in an article which appeared in the Globe and Mail of November 26:
Last week's financial crisis was a direct consequence of the unnecessary rigidity of the international monetary system. So long as each country regards any significant change in its exchange rate-either upward or downward-as a national defeat in the last ditch, the international system will continue to operate under quite unnecessary strain.
Later, Mr. Day writes:
Such is the rigidity of the international monetary system that the necessary adjustments can take place only after attempts to shore up a crumbling structure of exchange rates have been accompanied by speculation and rumours which put a heavy strain on currencies such as sterling and the dollar, whose true role in the situation is neutral.
The article goes on to suggest:
One approach which deserves the careful consideration of governments and bankers is the so-called "crawling peg". Each government would agree not to alter its exchange rate more than, say, 4 per cent in any one year. This would allow quite big adjustments to be made within fairly short periods of time, and, if used sensibly, could prevent the development of major imbalances. At the same time it would mean much smaller opportunities for speculators than the present adjustable peg system and would not create major uncertainties for businessmen who could, in any case, cover on the forward market.
The most important thing, however, is for governments and central banks to accept that the present system is too rigid with the consequence that when adjustments become unavoidable the strains are unnecessarily large.

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It should be recognized that any change from a fixed exchange rate to a floating exchange rate does involve other considerations; there will be occasions when unusual strain is placed on the monetary system at which time complementary steps would be required such as selective exchange controls. A further question to be considered is the concentration of a large degree of economic and financial power in the hands of corporations whose head offices are in the United States. This is a consequence of the branch plant economy with which we have to contend to such a large extent today. The fact is that corporate decisions which bear no relation to the national interest could in many cases help produce a crisis situation. The step before us at this time is but one small step upon a long and difficult road. What is required from the Canadian government is more leadership and better leadership in finding a long term solution to monetary difficulties.
[DOT] (9:00 p.m.)


David Réal Caouette: Mr. Chairman, the resolution now before the house reminds me singularly of the attitude of the Social Crediters who sat in this house some 22, 23 or 24 years ago, at the time of the first Bretton Woods agreements. At that time, the member for Lethbridge, Mr. Blackmore, warned the Canadian parliament of the consequences of the Bretton Woods agreements; today, we have come to exactly those consequences and results which were forecast 24 years ago by the Social Crediters who sat in roughly the same corner of the house.
At that time, Mr. Chairman, the Prime Minister, the Right Hon. Mackenzie King and the members of the cabinet found the remarks of the Social Crediters slightly crazy, slightly stupid; but let us look at the present world monetary crisis. Do not all the countries look like a group of stupid people trapped in a system of figures with which they cannot agree, which they cannot assimilate or accept, according to the physical possibilities they have to develop or make exchanges between each other?
We are now at grips with the same system; yet, 24 years ago the Social Crediters forecast the consequences of the situation in which we now find ourselves. At that time, the Social Crediters were laughed at, where they spoke of the fiasco that was awaiting the nations of the world that signed the Bretton Woods agreements.

Four days ago, one could read the following in Le Soleil of November 27, and I quote:
The future of money remains troubled.
Message from the French, from General de Gaulle, to the effect that the financial system is faulty. Will we need an international monetary reform? The heart is lacking to effect a national monetary reform; yet, the point has been reached where the necessity for international monetary reform is recognized.
Mr. Chairman, thanks to the opportunity afforded me by the study of the resolution introduced by the honourable Minister of Finance (Mr. Benson), I am pleased, on behalf of Ralliement Creditiste, to let the house know what we think of this new arrangement within the International Monetary Fund.
With a view to creating new reserve assets to supplement gold-24 years ago it was gold, nothing other than gold which was to serve as the basis for international finance or the International Monetary Fund. On a national level, we have already known the famous gold standard as a guarantee for Canadian bank bills-whether it be bills issued by chartered banks, at that time; or since, by the Bank of Canada-and we thought gold was absolutely needed to give value to our Canadian dollar.
On May 1, 1940, to pay for our war effort, to equip our young Canadians and send them to the international slaughter, the Canadian dollar was taken off the gold standard, it was no longer backed by gold. There was not enough gold for the credit we needed to increase our participation in the world war. The gold reserve backing the Canadian dollar was abolished.
Mr. Chairman, new reserve assets are now being asked for the International Monetary Fund to supplement the gold reserve because there is no longer enough gold available. Some countries have no gold, others are supposed to have too much and others still have enough.
Let us take the example of France which objects to gold no longer being used to back money because it is said France has huge quantities of gold. Last year, less than twelve months ago, when the pound sterling was devaluated, when the British government was forced to impose tremendous restrictions on its people, our international and national financiers were praising France by saying that it had a sound monetary system; that it could no longer be crushed, and that the
December 3, 1968

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French franc had a value which could not be affected.
Now France is facing the same problems as England less than a year ago, and they are now talking about reserve assets that would supplement gold in the international field. In fact, the resolution says:
-reserve assets that would supplement gold and reserve currencies in the participating countries foreign exchange reserves and would effect certain administrative and operational changes in the existing structure of the fund; and to permit the Exchange Fund Account to receive, hold and sell the new reserve assets.
As was said earlier by the hon. member who spoke before me, in order to supplement gold, we are now going to accept figures, credit, simple figures-scrip money as we call it-and we shall accept it as reserve currency in the I.M.F.
Twenty-five years ago, the Social Creditors were lunatics; today, there are other kinds of lunatics who are more dangerous than the Creditistes, because we advocate only one solution while the present system offers none.
They try this and that, but let us look at the editorials in the newspapers, one after the other. Nobody, not even the economists, are able to find a solution to the present international financial problem. They still poke fun at Social Credit which wants to use figures- according to the physical capabilities of a country to develop itself or to develop the whole world-which are equivalent to the work accomplished by peoples or by the Canadian people as far as Canada is concerned. Of course, these solutions are considered oversimple, they cannot be understood. I should say rather that they are understood but that one is paid not to understand them.


Some hon. Members:: Hear, hear.


David Réal Caouette: First, Mr. Chairman, I want to point out that this resolution results from decisions made during the annual meeting of the International Monetary Fund held in Rio de Janeiro, in September 1967, in which participated the former minister of finance (Mr. Sharp).
On that occasion, Mr. Pierre-Paul Schweitzer, director of the International Monetary Fund stated that the arrangements considered at the meeting with regard to international liquid assets were the most imporant development since the Bretton Woods agreements in the field of international financial cooperation.
Since we are dealing with the Bretton Woods agreements and with a subsequent development, the special drawing rights, I want to recall the approach of the Ralliement Creditiste on this subject.
In 1945, during the discussion on the Bretton Woods agreements, as I said earlier, the Social Credit member for Lethbridge, who was an expert on financial matters, was considered tiresome because he spoke about money and monetary reform. He challenged parliament to prove him wrong but no member on the government side of the house took up the challenge.
The Social Credit proposals of the hon. member for Lethbridge were thought very tiresome. Nevertheless, he had cast a doubt on the ability of the International Monetary Fund and other instruments created by the Bretton Woods agreements to allow the debtor nations to pay their debts, since nothing compelled the creditor countries to accept the exports of the debtor countries.
Events in the world during the past 20 years have shown that the Bretton Woods agreements have not stopped practically all the member countries from devaluating their currency, as Canada did in 1963, when the Conservative government fell. Everybody remembers that. As we know, that devaluation came after a too marked imbalance in our commercial trade with the United States. At that time, Canada had to impose restrictions on the Canadian people in order to check the purchase of United States products.
[DOT] (9:10 p.m.)
That measure simply confirmed what the hon. member for Acadia, Mr. Quelch, predicted, as is recorded on page 3134 of Hansard for December 6, 1945, and I quote:
That is to say-
He was talking about the proposals regarding the International Monetary Fund-
-if the United States consistently refuses to accept imports in exchange for its exports, thereby depriving other nations of dollars to pay for imports, then the fund can borrow or buy with gold, dollars from the United States to enable the debtor nations to balance their payments. But, mark you, it would be done by going into debt instead of by balancing trade and having an exchange of goods.
As the Bretton Woods agreements did not yet exist, money was borrowed from the United States. To-day, we can get into debt

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by borrowing from the International Monetary Fund, by using special drawing rights, as we did during the 1963 monetary crisis.
Thus we can say that the Bretton Woods agreements did not prevent Canada from devaluating its money and getting into debt by borrowing from international organizations. So much so that we never slowed down this trend and to-day, our national debt amounts to $26 billion against the $18 or $19 billion at that time.
Mr. Chairman, those agreements did not solve the basic problems of Canada. The international control of money, as provided for in the Bretton Woods Agreements Act and the bill now under consideration, does not help Canada to distribute to its people our available products and services. It would be wiser to settle our own affairs and seek a solution to the problems of Canada.
On the contrary, the philosophy of the Bretton Woods agreements and any measure deriving therefrom, such as the bill now under consideration, prevent us from making possible all that would be humanly possible and advisable in our country, because we are entrusting the control of our credit and our money to other countries and foreign authorities, instead of keeping it here in parliament. The Bretton Woods agreements have been in force for 20 years, Mr. Chairman, and nothing has changed. The economic situation has worsened in Canada as elsewhere.
I get letters from Montreal where there are now 80,000 unemployed. What can the Bretton Woods agreements do to settle that problem? But they are given so much importance. It was nice-in fact, it was a magnificent spectacle-to see the other day in Paris or in Bonn, Germany, the representatives of the ten richest countries in the world decide whether or not France should devalue the franc. They were going to settle the future course of the monetary situation in France, and everyone expected a devaluation of the franc. The speculators were dealing on the stock exchange to make a profit and when General de Gaulle announced that the franc would not be devalued, some people pulled a long face.
Mr. Chairman, the French people have not been saved for all that. General de Gaulle declares that he will not devalue the franc, but he imposes tremendous restrictions on the French people, so that it is tantamount to a devaluation of the franc for the French consumer or purchaser.

Mr. Chairman, the same thing happened in Canada as well as in England. And today, they believe that with new agreements, or by supplementing the gold reserve deposited with the International Bank or the International Monetary Fund, they will improve the situation. The Bretton Woods agreements have done nothing for the last 24 years.
Mr. Chairman, nothing has changed. Let us listen to what the Minister of Finance said at the conference held in Rio de Janeiro on September 27, 1967-less than a year ago-and I quote:
The total volume of reserve assets held by monetary authorities in different countries depends at the present time essentially upon the gold production-
That is the Minister of Finance talking.
-to be used to improve the reserve position and the balance of payments of some of the principal countries as well as to serve their reserve policy. We are becoming increasingly aware of the inadequacy of that system.
These past few years, we have resorted to various devices which have allowed the system of sudden crises to continue.
What is the new solution proposed? The creation of special drawing rights, which are actually credits created out of nothing, which will only plunge us into debt, which we will have to reimburse and on which we will have to pay interest.
If a resolution can be introduced in parliament to allow us to have special drawing rights on the International Monetary Fund, how is it that the Canadian parliament, the parliament that is answerable to the people of Canada, cannot pass similar laws to enable the Canadian government to have special drawing rights on the Bank of Canada, in order to get the Canadian economy going?
Mr. Chairman, special drawing rights are needed in the case of the International Monetary Fund; but it seems impossible to create the same drawing rights on our own financial monetary institution, the Bank of Canada. The Liberals find that logical. Not one of them will speak against the Bretton Woods agreements. On the contrary, its benefit will be praised. And that is what is being presented to us as a new solution: the creation of special drawing rights which, in fact, are credits created out of nothing, out of paper gold, as General de Gaulle put it.
December 3, 1968

Here is what the French Minister of Finance, Mr. Michel Debre, had to say at the conference in Rio de Janeiro, and I quote:
[DOT] (9:20 p.m.)
It is often said that both problems would be solved by creating ex nihilo new monetary liquidities and by bringing those liquidities to the level of a new currency independent from gold and replacing gold. Is it really serious? It is impossible to create a currency out of nothing just as it is impossible to create political institutions out of nothing.
Mr. Chairman, in our opinion, money is created according to the real wealth which exists in a country like ours.
At the present time, as I said earlier, gold is no longer used as the standard for money in Canada. It is still used in the field of international relations because some countries still believe in gold, but it is a myth. Gold is used and people believe that the precious metal is the real basis for wealth, whereas in itself it constitutes only short lived wealth. If we wished to use gold, Mr. Chairman, to provide our families with food, lodging and clothing, that would be quite peculiar. We do not need gold, but clothing and food. We realize that more and more when we lay aside the question of gold to deal with that of credit based on the actual resources of a country. That is what the Ralliement Creditiste has been asserting for a long time.
Mr. Chairman, in the issue of Le Soleil which I quoted earlier, we can read the following:
The future of money remains gloomy. Even if the special drawing rights are freely accepted by all countries as part of their international monetary reserves-and nothing is so far from being sure-these rights would only enable nations to postpone a little consideration of problems which cause inflation.
That means that nothing is solved yet.
And I continue the quotation:
The newspaper adds this: "The recent experience has once again demonstrated that an attitude of levity towards currency is not even a good policy in the end-When this lesson has been learned, perhaps a monetary conference will serve some purpose. For instance, can the nations who want a certain amount of freedom towards world monetary discipline find a respectable way of ensuring it; they can be a little more flexible in their exchange rates".
The paper concludes: "Rigid exchange rates and rigid inflationary financing demonstrated that this is a fine recipe to produce chaos".
And there are bumps to go with that.
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In La Presse of November 20, this is what Cyrille Felteau had to say. I quote:
Lessons from a monetary crisis.
In the eye of the layman and the experts, the new and serious difficulties the franc is going through prove beyond all doubts that the international monetary system is sick. In any event, that is what General de Gaulle and Mr. Couve de Murville have been saying for quite some time. In his televised speech to the nation, the French premier did not fail to emphasize this important point.
Those who participate in the system will have to take stock of themselves, if they want to prevent other jolts of this kind, which could degenerate into an economic depression on an international scale.


Albert Béchard: Order. I regret to interrupt the hon. member but the time allotted to him has expired. Does the committee agree to let the hon. member to continue his remarks?


Some hon. Members:: Agreed.


David Réal Caouette: Thank you, Mr. Chairman.
I also thank my colleagues for allowing me to continue my remarks. However, I shall not take unfair advantage of the opportunity given to me. This shows the advantages of the democratic system which allows one to express one's views even if they are different from those of others.
Mr. Chairman, I continue to quote from Mr. Felteau's article:
The participants in the system will have to take hold of themselves if they want to avoid other crises of this sort which can lead to an international economic depression.
I should be noted that the present crisis opposing the franc to the German mark is the third crisis to shake the world monetary system in twelve months.
There have been three international monetary crises in. the space of twelve months.
In November 1967, the pound sterling fell. In March 1968, there was a rush on gold-
There was a general rush on gold.
-followed, in the spring, by a running away from the franc and the pound sterling.
In 1968, nobody wanted francs or pounds sterling.
Many Canadians will also remember that in January of that year, the Canadian dollar was saved in extremis.
It was almost a case of administering the last rites.
All this shows that most currencies, with the exception of the American dollar, are more or less vulnerable.

December 3, 1968
Finance
And even the American dollar gave rise to speculations last spring.
In spite of several important differences, the present situation in France is similar to that which has existed in Great Britain for years.
As I was saying earlier Mr. Chairman, was France, a year ago, not considered as the country with the strongest monetary system in the world? And one year later, France is driven into a corner, as England was two or three years ago. Today, Germany is considered as the country with the strongest currency in the world; a year ago, there was no talk of Germany or of her Herculean strength from the monetary point of view. Today, everybody says that Germany has the strongest monetary system because her people are hard-working and productive. As if France and England had stopped producing, and French and English workers did not want to work!
The international finance is thus putting out feelers in the world. Those wretched financiers, Mr. Chairman, are responsible for destitution throughout the world. They create destitution in all the countries of the world and not only in France or Great Britain, but even in Canada. When we have reached the point where a responsible government as the Canadian government, finds neither the courage nor the strength to act and to make a thorough reform of the Canadian monetary system, what can that government expect to do and what influence could it have at the international level?
In his article of November 20, 1968, Mr. Felteau stated:
In spite of a few considerable differences, the present situation of France is similar to that which prevails in Great Britain and which started there many years ago. This has been pointed out, for example, in the Wall Street Journal who without mincing words feels that "if Great Britain and France want to become financially respectable they will have to become financially responsible-[DOT]"
[DOT] (9:30 p.m.)
Those are potent words: "To become financially respectable, they have to become financially responsible". Governments must become financially responsible. If the government worked toward a monetary system adapted to our physical possibilities, to the work performed by the whole nation, it could then be called financially responsible and financially respectable.
At the present time, France, Britain, Germany, the United States and Canada are not 
financially respectable but financially irresponsible, because they will not face facts. Mr. Felteau concludes by saying:
A kind of "red light" which could not by itself stabilize currencies. For this purpose nothing replaces policies of austerity.
Mr. Felteau concludes by saying that austerity must prevail, that we must tighten our belt, while production is lost or deteriorates on store shelves, and some people understand that.
I have here in my hand the letter which came with the La Presse clipping and which says:
Dear Mr. Caouette,
I hope that you will take a few seconds to talk about that on your T.V. program.
I will talk about it on television eventually, but tonight I bring the matter up in the House of Commons.
Would the Grand Charles be a Creditiste?
Because of his financial difficulties? I hope so. If we have to face financial difficulties to open our eyes, let us consider the stupidity, the nonsense of a monetary system like the one which is imposed upon the nations of the world.
What gives value to the Canadian dollar? The French people from France? The British from England? The Chinese from China? The Russians from Russia? No. Those who give value to the Canadian dollar are the Canadian people who develop their country, and no one else. Our Canadian dollars do not circulate in the United States nor in Russia.
When I went to Russia, four or five years ago, the Russian people looked at the Canadian dollar and found it funny; they did not even recognize the picture of the Queen of England. In their country, the monetary unit is the rouble. I noted, as did those who were with me, that a rouble was the equivalent of an American dollar and, as soon as we left Russia, we went to Zurich in Switzerland- I was with the hon. Minister of Agriculture (Mr. Olson) who, at the time, was a good Social Crediter-to exchange our roubles for dollars. Then, we found that, on the international market, we needed four roubles to get one American dollar, while in Russia one rouble was equivalent to one Amercan dollar. The value of the rouble, therefore, depreciates at the international level, but does that prevent the Russians from developing at home? Some say that they will reach the moon before the Americans, and I hope so. Let them go on the moon and stay there. However, the fact remains that inside their
December 3, 1968

Finance
country, they could not care less about American dollars, Canadian dollars or French francs and they succeed in developing their country, perhaps through painstaking efforts because they do not have our production capacity. Their production system is completely disorganized, but they keep on going anyway according to their capacity.
Why, in a country such as Canada, could we not do the same thing? What prevents us from developing our riches if not a lack of money?
In the whole world, people wish to participate in the International Monetary Fund, to allow underprivileged countries to avail themselves of special drawing rights.
In my opinion, this is just running round in circles, and in twenty years from now, if we are still alive, we shall be asked to reconsider the Bretton Woods agreements, as amended according to this resolution; we shall still be contending with monetary problems that the present system cannot solve.
So, instead of contemplating a reform of the international system, let us begin with the reform of our own domestic system, let us create Canadian dollars according to the opportunities we have to develop our natural resources. At present the government wavers; claiming that we are short of money, it blocks highway construction and enlargement of hospitals, while patients are waiting for admittance.
Mr. Chairman, we will go and borrow from the International Monetary Fund to enlarge our hospitals in Canada, in the province of Quebec or Ontario; we will go and make use of special drawings rights in the International Monetary Fund to find oil wells in northern Alberta, in Saskatchewan, to enable our farmers to produce wheat and to sell it to foreign countries, or to grant them loans.
Mr. Chairman, I say we live in a financial system that defies imagination, a topsy-turvy world of fools and that we are led by the most notorious amongst them. I say and I shall never repeat enough: that is where the problem lies, and it is the duty of the right hon. Prime Minister (Mr. Trudeau), the ministers, the members of government, everyone of them, to study the problem as it is, instead of indulging in vain imaginings or spinning tall tales; in short, no dreaming in colour, as the honourable member for Trois-Rivieres (Mr. Mongrain) said the other day. He is one of those who dream in colour and has been for a long time. Indeed, he has no
solution to bring before the house; all he ever does is to mouth stupidities.


Mr. Mongrain:: Mr. Chairman, I rise on a question of privilege.
I would never permit the hon. member for Temiscamingue (Mr. Caouette) to throw a stone in my backyard; he says I dream in colour, but his own colours are mortuary and funereal-


David Réal Caouette: Mr. Chairman, the hon.
member for Trois-Rivieres has just shown how he has reached some degree of intelligence. Between his ears, there is a total vacuum. He talks of funereal colours; what does his system propose except things mortuary throughout the whole country?


Joseph-Alfred Mongrain: Mr. Chairman, I rise on a question of privilege.


Albert Béchard: Order. The hon. member for Trois-Rivieres, on another question of privilege.


Joseph-Alfred Mongrain: Mr. Chairman, the hon. member for Temiscamingue says that I have nothing between my ears. I am ready to concede he is a genius, but I must remind him that when I was a student, I learned that genious was the nearest thing to insanity.


Albert Béchard: Order.


David Réal Caouette: It is undoubtedly for that reason, Mr. Chairman, that the hon. member for Trois-Rivieres did not continue his studies. In any event, I am planning something for him that he will get, not tonight but on another occasion.
Recently he told the house I was dreaming in colour. Let him tell us who is dreaming in colour, with monkey plans like that, in the whole world, if he has a head upon his shoulders that can be of some use to him and not just to wear a hat. At present, he is giving proof that it is a hat stand instead of something to reason with.
[DOT] (9:40 p.m.)
Mr. Chairman, as far as the Bretton Woods agreements are concerned, the hon. member for Trois-Rivieres and most of the Liberal members never heard about them throughout their whole life, while I was in this house when the subject was under discussion and the agreements were entered into. In fact it is at that time we warned the government of the Right Hon. Mackenzie King of what is happening today.

December 3, 1968
Finance
National currencies of all countries are unstable; they are losing a part of their value and devaluations follow one another. Pov-verty is settling down permanently in all countries. What is being proposed against that? Absolutely nothing. Yet one allows himself to rise in this house to talk seriously before his electors in the constituency of Trois-Rivieres. The hon. member can well be looked upon as a monkey in his own constituency.


Joseph-Alfred Mongrain: Mr. Chairman, the hon. member for Temiscamingue thinks he is smarter than anybody else, but he has not even succeeded in convincing his own supporters.


Albert Béchard: Order, please. I think the hon. members for Temiscamingue and Trois-Rivieres should limit themselves to the resolution under consideration.


David Réal Caouette: It is easier to get along at Bretton Woods than with the hon. member for Trois-Rivieres, Mr. Chairman.
In any case, I shall close my remarks-


Joseph-Alfred Mongrain: Mr. Chairman, on a question of privilege. He is provoking me and I am asking the Chair to protect me.


David Réal Caouette: Mr. Chairman, I am closing my remarks, but I do not want to resume my seat without sounding once again a note of caution to the government against what may happen within a few years. France had its turn recently; soon, it may be ours. Bretton Woods agreements will never solve the economic problems of Canada, nor will they ever solve-the way they are conceived-the international monetary issue.
It is through the exchange of goods that countries will come to an agreement. But as long as we do not take productivity into account and think only in terms of dollars and gold, the countries of the world will suffer while, as usual, the financiers will get great benefits, because they are the ones who set the exchange rates and make profits.
Pius XI said in 1931: Those who control money and credit are the masters of our lives and without their permission nobody has even the right to breathe. Pope Pius XI set forth the objectives of a sound economic structure in these terms: For then only will economy be soundly established and attain truly its end when it secures for all and each, part of those goods which nature and technical achievement can give, and that share, he said, should be sufficient to supply for all and each an honest livelihood.


Albert Béchard: Order. I regret to interrupt the hon. member, but his second speaking period has expired.

Shall the resolution carry?


John Gilbert: Mr. Chairman, I rise to make a few comments on this resolution. I would like the members of the committee to note that the parliamentary secretary introduced the resolution. Prior to this he introduced the resolution on the Kennedy round. I am wondering whether there is a crack in the Liberal cabinet, because the parliamentary secretary appears to be making such progress with regard to these financial matters. When, one remembers the poor budget brought down by the Minister of Finance, he appreciates why the parliamentary secretary is getting the headlines these days.
The leader of the Ralliement Creditiste should not be too disappointed with the Liberal party, because in 1962 when the Liberals were so anxious to displace the Conservative government they supported the free money theories of Social Credit.


Some hon. Members:: Hear, hear.


John Gilbert: The new members of the Liberal party should remember that fact. When the leader of the Creditiste party says that there should be special drawing rights on the Bank of Canada, I certainly agree with him because if you read this morning's paper you would realize the special drawing rights which the banks have on Canadian citizens. The profits that were made by chartered banks in the last year should be revealed to this house. They range from 48.3 per cent of an increase by the Royal Bank over their profits of last year, down to a low of 21.2 per cent, with an average of about 37 per cent. This indicates that the banks have special drawing rights on Canadian citizens.
The substance of this bill is to set up special drawing rights within the Bretton Woods Agreement. This was agreed upon some time ago, and we are now facing its implementation. We in the New Democratic party have said that there should be an immediate conference of the members of the International Monetary Fund so that they can re-evaluate their position and bring forth some new ideas. In his introductory remarks the parliamentary secretary said this was a major step forward. If this is the only major step forward after almost 25 years, all I can say is that it is a very disappointing one. I believe we have
December 3, 1968

had many major steps backwards, and that is why we in the New Democratic party have felt that there should be a new conference of the members of the Bretton Woods Agreement to study some of the monetary problems.
When one considers the serious economic crises that have taken place in the last year and a half, such as the two onslaughts on the English pound, the pressure on the Canadian dollar followed by the crisis with regard to the French franc, he realizes that there must be some new way out of this economic chaos. It is obvious that international speculators are playing more than their full share in creating these crises, and our parliamentary leader underlined this in his statement a few days ago. He said we should do something more than what is proposed in the special drawing rights legislation. This is why we in the New Democratic party have said that serious consideration should be given to a floating exchange rate. One of the most serious problems consists in the fixing of an exchange rate to our dollar, to the pound and to the franc in the international monetary system.
So we would welcome the reference of the bill to the standing committee on finance, trade and economic affairs so that it can be closely examined in regard to the floating exchange problem. I hope that the parliamentary secretary will invite the Postmaster General to state his views on the subject of the floating exchange rate. He is the only member in the cabinet to support it, and thus he also supports the position taken by the New Democratic party.
When the parliamentary secretary said that the approval of a substantial majority of the member nations is required, that is three-fifths of the nations having four-fifths of the total voting power, he indicated how intricate this matter is. I hope the parliamentary secretary will tell us which countries have so far given their approval to this serious matter. I suppose the over-all problem is not only to find a solution to the economic chaos which the members of the International Monetary Fund have experienced, but to examine closely the problems of underdeveloped countries, because without a great increase in trading and without the co-operation of the members of the International Monetary Fund in solving the problems of the underdeveloped nations we are found to face another serious economic crisis. Therefore I plead with the parliamentary secretary to urge the cabinet and the present Minister of Finance to press for a
Fisheries
new meeting of the signatories of the Bretton Woods Agreement, so they could study some of the problems which go far beyond the special drawing rights.
Resolution reported and concurred in.
Mr. Macdonald (Rosedale, for Mr. Benson),
thereupon moved for leave to introduce Bill No. C-138, to amend the Bretton Woods Agreements Act and the Currency, Mint and Exchange Fund Act.
Motion agreed to and bill read the first time.



FISHERIES


Donald Stovel Macdonald: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to regulate interprovincial and export trade in freshwater fish and to establish the Freshwater Fish Marketing Corporation; to provide that the corporation shall conduct its operations on a selfsustaining financial basis without appropriations therefor by parliament; to provide that the governor in council may authorize the Minister of Finance, under certain terms and conditions, to guarantee repayment of loans by banks to the corporation and to make loans to the corporation, the aggregate outstanding of amounts borrowed or loaned not to exceed five million dollars; to provide also for grants to the corporation, out of the Consolidated Revenue Fund, not exceeding in the aggregate of one hundred thousand dollars to enable the corporation to meet initial operating and establishment expenses; and to provide further for other related and incidental matters.
Motion agreed to and the house went into committee Mr. Bechard in the chair.


Albert Béchard: Order, please.
House in committee of the whole on the proposed resolution. Shall the resolution carry?


Mr. Lang (Saskaloon-Humboldi):: The resolution before the committee will allow us to introduce a bill to establish the Freshwater Fish Marketing Corporation. The establishment of this corporation has been under discussion by the provincial governments concerned and the federal government for some time. The Minister of Industry, Trade and Commerce has had many meetings recently with the officials and ministers concerned with a view to moving forward in this important venture. The bill will enable board marketing of freshwater fish produced in the prairie provinces, the Northwest Territories

December 3, 1968
Fisheries
and northwestern Ontario to be established. It is proposed that this marketing board take the form of a crown corporation which would buy the catch directly from the fishermen, and sell the resulting fish and fish products for export and to domestic processors and distributors. This corporation would be given powers and responsibilities in interprovincial and export trade, and by agreement with the provinces it would receive under provincial legislation parallel powers and responsibilities in trade within the participating provinces. Similar arrangements would be made in the case of the Northwest Territories.
[DOT] (9:50 p.m.)
It is intended that the corporation will conduct its operations on a self-sustaining financial basis. It will be financed by bank loans with government guarantee of repayment or by direct loans to the corporation. It will receive a grant for initial operating and establishment expenses.
The objectives of this legislation will be a more orderly marketing for the benefit of the whole fishery, and by this means the achievement of higher and more stable prices for the catch; to provide the fishermen with a better share of the market value of their fish; and to expand total sales and over-all production in the fishery.
The legislation, as I have indicated, was brought forward by the government in response to requests by the provinces concerned for assistance in dealing with the industry and its chronic problems. There were various attempts made previously to solve the problems of the industry, but they were not as successful as had been hoped. It is the conviction of the groups concerned that research activity that is designed to improve conditions in the industry will not be of full benefit unless the central problem of more orderly marketing is solved.
I might remind hon. members, Mr. Chairman, that in 1984 a federal-provincial conference established a committee to study this whole question. After this study was made, in 1985 the Mclvor commission was appointed to look into the question. The commission agreed largely with the findings of the province of Manitoba, which had also studied the matter and in which province approximately 40 per cent of the production originates.
These findings, Mr. Chairman, were that the industry is characterized by outmoded business practices and extremely heavy indebtedness on the part of the fishermen;

that low and uncertain incomes of the fishermen make it difficult for them to improve their equipment; that much of their equipment is owned by fish companies, and heavy indebtedness on the part of the fishermen to the companies gives them no choice but to sell their fish to the companies which finance them; and that for their part the companies find the provision of credit expensive and awkward. Indeed, often the companies lack the financial strength to hold their inventories until the best price can be obtained.
In its report, Mr. Chairman, the commission recommended the establishment of an export monopoly, but strongly emphasized the need for fish to be bought directly from the fishermen and for direct transfer to the fishermen of any increased export earnings. The report stressed the importance of orderly marketing, particularly in regard to exports. It recommended some concentration of processing and some streamlining of operation with regard to the flow of products to market. It urged attention be given to improving the quality of the product of the fishery in order to increase its value and reducing the risk of loss, as well as gaining wider consumer acceptance.
The Canadian inland fishery, in total, extends over an area which contains some 20 per cent or more of the world's fresh water. In this extraordinary resource, the harvesting of fish could be more immediately susceptible to scientific management than in the ocean fisheries.
In this sector, Mr. Chairman, the annual average of landings for the six year period 1960-1966 was 74.1 million pounds with a value to the fishermen of $8.5 million. Some 95 per cent of the total landings consists of white fish, lake trout, pickerel, pike and sauger. There are few alternative sources of these species in Canada or in other parts of the world, and none in equivalent volumes.
The fish referred to in this six year period produced exports valued at $13 million. These species of fish do not compete directly with markets enjoyed by ocean fish but tend to supply a specialized demand, particularly in the United States.
Some 6,000 to 7,000 fishermen obtain employment in this fishery, many of them living at near subsistence levels. A large portion of these are Indians and Metis. Under present conditions there appears to be little or no inducement for increased productivity or for men to continue in the fishery where there is other remunerative employment
December 3, 1968

available. In contrast to this there is substantial evidence that the resource possibilities of these freshwater lake areas, on a sustained yield basis, are far greater than are being exploited.
The underlying objective of the proposed legislation is to create for the fishery a totally new environment which will be attractive to capital investment and which will enable the raising of income levels of fishermen to the point where they become independently creditworthy. To achieve these objectives, Mr. Chairman, will take time and will require the support of related provincial and federal programs in the fields of education, manpower training, research, re-equipment and financing.
Following the Mclvor report, federal-provincial studies of the problems of the industry pointed to the need for collaboration between the provinces and for the use of federal powers, particularly in the regulation of interprovincial and export trade. Necessary provisions to meet these needs are made in the bill. The agency it is proposed to establish is designed in the form of a corporate organization which will receive the necessary federal powers under this legislation, and by agreement may undertake functions and responsibilities on behalf of interested provinces under related provincial legislation.
Responsibility for the administration of fisheries in these provinces is delegated under the Fisheries Act to provincial ministers. This includes matters such as licensing of fishermen. The recommendation of the provinces is that there be enforced regulations for the fishing season.
For these reasons, Mr. Chairman, and because of their general economic interest in the fisheries, provincial governments have agreed to participate in the direction of the agency and, at the same time, to co-ordinate their activities in the regulation of their fisheries for their mutual benefit.
The corporation would not be intended to duplicate existing facilities of the industry. It should seek to reduce unnecessary duplication of facilities and improve efficiency by streamlining the flow of products to market. It would need to smooth over periods of peak production in order to avoid pressure on prices. Orderly marketing would be planned in consultation with the trade acting as the agents of the corporation. In planning new investment in processing, refrigerated storage, packaging and transportation fields,
Business of the House the industry would be assisted by the corporation. There are possibilities to be explored by expanding markets overseas as well as in the United States, and of increasing consumption in Canada. Greater stability could be sought in part through greater diversification of products and of markets, and through wider use of available species of fish.
As proposed by the Mclvor commission, it is intended to establish initial prices for each species, by grade, at the opening of each season, to make payment for the catch on the basis of these initial prices through the season, and at the conclusion of each season to distribute to fishermen in a final payment any additional earnings obtained through marketing of the catch. The corporation should also be empowered to extend short term credit to fishermen to finance the purchase of food and fishing supplies, following established practice in the existing industry.


Albert Béchard: Order. It being ten o'clock it is my duty to rise, report progress, and request leave to sit again at the next sitting of the house.
Progress reported.
[DOT] (10:00 p.m.)



BUSINESS OF THE HOUSE

Mr. Bell:: Mr. Speaker, has the government house leader any information about any fresh house business? It is so nice to see him moving around so quickly after those tiring sittings of the procedural committee.


Donald Stovel Macdonald: Mr. Speaker, I am very pleased by the concern of the hon. member from my father's birthplace. Discussions have been going on up until the last few seconds about the business for tomorrow. We propose to go into committee of supply; I shall be talking to hon. gentlemen opposite and arranging for a continuation of the discussion at some later stage. We may be calling further estimates this week.


Wallace Bickford (Wally) Nesbitt: On a point of order, Mr. Speaker. Does the government intend to move concurrence in the first report of the standing committee on transport and communications which was tabled this afternoon? If so, when?


Donald Stovel Macdonald: That is one of the subjects under discussion with opposition house leaders. The number of days provided by the standing order for the consideration of estimates will soon expire. There has been some suggestion that we might use for estimates days that are otherwise available for
December 3, 1968
3466	COMMONS
Proceedings on Adjournment Motion supply motions. I gather there will be discussions, and perhaps something along that line might be arranged for Friday.


Mr. Knowles (Winnipeg North Centre):: Is it
understood or will it be confirmed that on Thursday we shall be dealing with the estimates of the Department of Agriculture?


Donald Stovel Macdonald: That depends on the lapse of time provided for by the order of September 20. I understand that if the supply motion provided for in that order is converted into estimates days there will be a general concurrence to deal with agricultural estimates on Thursday.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.

Mr. David Orlikcw (Winnipeg North):: Mr. Speaker, on November 7 last I directed a question to the Minister of Manpower and Immigration which arose out of a pamphlet entitled, "Canadian Opportunities-Housing", and prepared by the Canadian government's immigration division in 1968. I asked the question because in my opinion the information in that pamphlet is, in important respects incorrect and will tend to create a completely false impression in the minds of prospective immigrants. In my opinion the pamphlet ought to be withdrawn and not used again until it is drastically revised.
Since the end of world war II more than 2 million immigrants have come to Canada. Our immigration policy has received the virtually unanimous support of all sections of the Canadian people. Business, industry, labour, have all supported this large-scale immigration. Immigrants have come to this country not only from Britain, Germany, Holland and the Scandinavian countries from which we have traditionally received them, but also in recent years from Italy, Portugal, Spain and Yugoslavia, to mention just a few. Unlike the immigrants who came here before the second world war, the vast majority of these new arrivals have gone to the cities, mainly to Toronto, Hamilton and Vancouver. They came here because it is a country in which there have been, and are, jobs, and wages which are high enough to enable them to


make the kind of living they were not able to earn in the countries from which they came. This is good, and I hope this situation will continue.
But I submit it is completely improper for the government or any other agency to misrepresent conditions in Canada. Immigrants have been told by private employers in many cases that wages are substantially higher than they really are. Within the last year, a mining company in Thompson told workers in Germany that the wages were five dollars an hour. This, of course, is not true. We do not tell immigrants about some of the difficulties they may encounter in Canada. We have not been telling them that up to this year they would not receive the benefit of the kinds of medical insurance plans which had been set up in their countries of origin, or that there is no pension plan such as exists, for instance, in Sweden.
I want to quote a couple of sections from this pamphlet. On page 14 there is one paragraph which I think is a classic of misrepresentation. It says:
In 1967, the average cost of a new house was in the neighbourhood of $19,000. The average down payment required to purchase this house was about $4,300. The average cost of an older house was approximately $12,000, perhaps a little higher in the larger cities. The average down payment for an older house was some $2,000.
It should be remembered that the majority of immigrants who come to Canada go to Toronto, Hamilton or Vancouver. I submit that there is virtually no truth in the suggestion that an immigrant or anyone else can buy a new house in those cities for $19,000, or an old house for $12,000. No government should be telling prospective immigrants that this is the situation. I suggest to the minister that this kind of thing ought to be taken out of the pamphlet immediately.
Similarly, on page 16, we find a paragraph which says:
While there has been some shortage of accommodation in Canada in the past year or so, particularly low-cost housing in the larger cities, there is at the present time an upsurge in construction which should improve conditions, particularly in the field of rentals.
Of course, the situation is not improving. It is getting worse. If this were not the case the Minister of Transport (Mr. Hellyer) who is in charge of housing would not be travelling across the country with the so-called task force looking for solutions. I could go on quoting from this pamphlet but I think I have demonstrated conclusively that some of the
December 3, I9S8

statements in it are, to say the least, exaggerated. The minister ought to take steps to withdraw this pamphlet and to stop its distribution among prospective immigrants until it can be corrected.
[DOT] (10:10 p.m.)


Mr. Gerard Loiselle (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, I thank the hon. member for Winnipeg North (Mr. Orlikow) for his question, but I have to argue that what he has just said is only an expression of opinion. I do not have the same opinion as he, especially in connection with his reference to page 14 of the pamphlet where it says that the average cost of a new house in 1967 was in the neighbourhood of $19,000. The hon. member said that in the regions of Toronto, Vancouver and other places in Canada he could not buy a house for that amount of money. I am from Montreal and I can certify to the hon. member that in the suburbs of Montreal he could buy a house for less than that, some $17,000 or $18,000.


David Orlikow: Try Ottawa.


Gérard Loiselle: I agree that the pamphlet is wrong in one respect. It states that the down payment required is about $4,300. In the Montreal region one could buy a house with a much less down payment than that.
I have received a copy of this brochure from the department. I think it is a nice publication, which reports correctly what the Department of Manpower and Immigration can do for immigrants. For instance at page 17, referring to the information that our officials outside Canada give to prospective immigrants, it says:
When you visit a Canadian immigration office, an experienced officer will advise you not only on housing but also on employment opportunities, the professions, education, and an almost endless list of topics about Canada.
At your port of entry in Canada, you will be interviewed by a Canadian immigration officer who will look after your immediate needs. If necessary, he will refer you to the Canada manpower centre in the city or town where you will be living.
The hon. member for Winnipeg North may not agree with everything that is printed in this pamphlet, but I should like each member of the house to take a good look at this pamphlet, which is distributed by every Canadian immigration office throughout the world. It tells immigrants of everything they can expect in any field when they reach Canada. Our immigration officers also advise intending
Proceedings on Adjournment Motion immigrants to obtain copies of Canadian newspapers and read them before coming here.



HOUSING-QUEBEC-REQUEST FOR ADDITIONAL LOANS TO COMBAT UNEMPLOYMENT

Mr. Gerard Laprise (Abitibi):: Mr. Speaker, my remarks will be brief tonight since I have partly attained the objective I had in mind when I asked the question being discussed tonight. I wish to congratulate and thank the officials of the Central Mortgage and Housing Corporation for answering my request so quickly.
The fact is, Mr. Speaker, that a construction firm in Amos-a city located in my riding-would have been forced to lay off several construction workers during the winter if new contracts had not been forthcoming in addition to those it had yet to complete. After calling the officials of the Central Mortgage and Housing Corporation, some cases were found where loans had not been accepted and were still pending, which made it possible to award to that company in Amos two housing projects. Consequently, that company will be able to keep its workers on the payroll during the winter, which will ease the unemployment situation in that region.
Indeed, as reported on page 3070 of Hansard, I asked the Minister of Transport (Mr. Hellyer) the following question:
Since the winter works program has been discontinued, would the hon. minister, in order to fight unemployment, allow additional loans above the 6,000 already granted to contractors for the building of houses next winter?
As will be recalled, the Minister of Transport had previously announced that loans would be available to contractors in the fall or winter, for the building of 6,000 housing units.
Once completed the houses could be put up for sale. I believe this is an excellent measure, since it meets two needs: first, in Canada, there is a strong demand for additional housing units, and I am told that not as many people as was expected or desired requested loans guaranteed or granted directly by the Central Housing and Mortgage Corporation; hence the offer to finance the construction of 6,000 housing units by contractors. In the second place, this measure enables contractors taking advantage thereof to keep most of their qualified personnel during the winter season and thus fight unemployment.
December 3, 1968
3468	COMMONS
Proceedings on Adjournment Motion
In that context, Mr. Speaker, I think that other loans should be added to the 6,000 already announced to meet the needs of future owners and persons who otherwise would be seasonally unemployed, at times during an extended period, but who could consequently find a satisfactory position right this winter.


Mr. Yves Forest (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, I am pleased to note that the question of the hon. member turned into congratulations to the government.
We are therefore pleased to hear that he obtained a satisfactory answer to his request, that the problems of his constituency have been solved and that the workers can con-tine to work.
As concerns housing, Mr. Speaker, hon. members will recall that forecasts were for 175,000 housing starts during 1968. This number was subsequently raised to about 180,000. Now that the current year is about to end, it appears that this figure of 180,000 will even be surpassed, which will be an all-time record for Canada.
Housing starts during the last part of the year remained at a very high level. For instance, on October 31 of this year, 120,000 houses were being built. This figure exceeds by about 15,000 that for the same period last year. Thus, it seems obvious that we start the winter with a large number of buildings under way, and as housing starts have remained at a very satisfactory level, we can be assured that this very high level of construction will continue well into next year.



COMMUNICATIONS-REQUEST FOR STATEMENT ON PROPOSED CORPORATION STRUCTURE

Heath Nelson Macquarrie: Mr. Speaker, the question of communications satellites is one of tremendous importance. I gather this from the minister's speeches, from Maclean's magazine, from the task forces, from the white papers, and even from a brand new ministry, the department of communications. Yet, there is a dearth of information. The minister designate seems to be somewhat less than communicative when dealing with matters relating to his own department, although he is not so reticent when discussing NATO, NORAD or matters of that kind. Some of us have sought a statement on this in the house. My question of October 18 which appears on the order paper is very simple, but it has not yet been answered.


This is a major subject. The government has declared itself to be, or to have been, seized of the question as a matter of urgency for a long time. On July 14, 1967 the then prime minister indicated that for the past year the government had been examining the Canadian space program in particular detail. Several studies on various aspects of satellite communications have been conducted under the auspices of the Department of Transport. The Chapman report was published in March under the auspices of the science secretariat. Then came the white paper a year later. There have been other announcements and indications in between. The Southam press of April 2, 1968 revealed the following:
Industry minister Drury said Monday he hoped a corporation to operate a Canadian owned domestic satellite communications system will be created by autumn.
Autumn has come and gone. The snows of winter are upon us.
Dr. Macintosh was appointed in April 1968. We have had studies, reports, rumours, magazine articles and speeches by the minister, but little in the house. We ask, why. Of course it is an important question. It is one that transcends politics; but the public should know by now the general trend and tenor of the government's policy, and the program to which the government is committing the people of this country. It is a serious question. This involves international and intra-dominion relations, and we wonder how much consultation with provinces is going to be pursued in this very important field of educational television. In the last few weeks I have noticed comments by the premier of the province of Quebec about this costly and crucial matter. These comments are very significant and very important. He has suggested that no opportunity should be missed to maximize Canadian effort in this regard.
* (10:20 p.m.)
Let us look at this, and let the people's representatives know and have a chance to discuss this vital area, which could so fundamentally affect the quality of life of the people of Canada. Have there been discussions with the provinces? Have there been discussions, with those who lead in this field, about the effect of satellites and their capacity for improvement of mankind?
Quebec is not the only province interested in educational television, but it has made moves which its leaders have publicized and which the federal government must be aware
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of. How does this awareness reveal itself in federal government planning? I should like to ask the minister, who is not always lacking in communication to drop and cast aside this cloak of secrecy and concealment, and let the upcoming department of communications communicate with the people of Canada through the people's tribunes, their representatives here in the House of Commons. Let us know what Dr. Macintosh thinks. I have never met him because I do not move in these exalted financial circles, as the minister does. I understand the minister graduated from McGill and that he and Dr. Macintosh are on the same basis regarding their respect for that institution. Let us know what this distinguished businessman thinks of this whole project. Let us also know if what Maclean's magazine projects in this regard is close to the truth. Tell us what the score is and what the government is recommending.
All Canadian people are involved in this costly and important matter. What could Dr. Macintosh recommend that should be concealed? I cannot envisage any way in which the Canadian satellite program could be bootlegged into an international program. What are our rights and what are our recommendations, and do these allow enough space for people to co-operate? Let us know about this very important and vital situation.
I do not know whether the minister is interested in power, but I am sure he will find that in this house of parliament knowledge is power. Surely he is aware as the minister designate of communications that he should communicate.


Eric William Kierans: Mr. Speaker, the hon. member has made a very eloquent plea. I have the very highest regard for Dr. Macintosh. He and I were student graduates from McGill and we have
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Proceedings on Adjournment Motion been long-time friends. He was appointed before I became a member of the federal government. Dr. Macintosh was asked to draft a model and organizational structure of a financial and corporate satellite. As everyone in this house realizes, we have asked for a report from two companies, Northern Electric and R.C.A., as to their views regarding an appropriate kind of satellite, economically speaking, and educationally speaking, which we could send aloft. We have just received these reports. They contain many hundreds of pages of highly technical material. We must digest these reports. I would suggest to the hon. member that Dr. Macintosh's report will become relevant when the government itself has decided, in light of other technical reports, what technical progress will meet the needs of the people across this land.
This decision will have a great unifying effect in Canadian history. When Canadian needs are determined and the required facilities are evaluated we will know whether we must spend $60 million or $160 million, or something in between. This will obviously have an effect on the kind of financial structure which will evolve, and therefore will have an effect on whether we can accept Dr. Macintosh's report in its entirety.
This could be modified; but at the present time, until we have studied our needs, the facilities, the capability that is available in Canada, until we have decided on the kind of satellite that we want to send up, whether it be a Volkswagen or Cadillac type, I can make no useful recommendation to my colleagues in the cabinet. Therefore I doubt that it would be useful to table the report until I can make relevant comments on it.
Motion agreed to and the house adjourned at 10.28 p.m.

Wednesday, December 4, 1968



TRANSPORT AND COMMUNICATIONS

[Stage Direction]
Second report of standing committee on transport and communications-Mr. Blouin.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.]