1968-03-08

CRIMINAL CODE


Mr. M. L. Klein (Cartier) moved: for leave to introduce Bill No. C-205, to amend the Criminal Code (right to inspect).


Some hon. Members:: Explain.


Milton L. Klein: Mr. Speaker, the object of this bill is twofold; first, that all the facts and evidence of a criminal investigation of an accused prior and subsequent to his arrest be made available to him before trial and that such investigation be carried out for the crown and for the defence; second, that any crown attorney or any officer of the crown be deemed guilty of a criminal offence who knowingly withholds evidence which could contribute to the proof of innocence of an accused.
Motion agreed to and bill read the first time.



AMENDMENT TO ELIMINATE ATTEMPTED SUICIDE AS OFFENCE

Milton L. Klein: for leave to introduce Bill No. C-206, to amend the Criminal Code (attempted suicide).


Some hon. Members:: Explain.


Milton L. Klein: Mr. Speaker, the object of this bill is to eliminate a criminal offence the commission of which can only be committed by a sick person. The purpose of this bill is to eliminate the prosecution of a person who attempts suicide.
Motion agreed to and bill read the first time.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Finance. In
view of the statement of the Prime Minister in the house yesterday that the government had not yet decided whether legislation would be required to establish the review board the government has in mind in relation to restraining inflation, can the Minister of Finance tell the house when we might expect to learn the decision of the government in this regard, and when we might expect to receive fuller information about the manner in which the proposed board will function and its precise terms of reference?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, perhaps I ought to answer that question because I will be making a statement on Monday about the proposed board, its nature and how it is to be set up. It is not yet possible to say whether legislation will be required, but the information I have received up to the present indicates that it could be done without legislation. However, I will be making a full statement on Monday.


Mr. G. L. Chatierion (Esquimalt-Saanich):: have a supplementary question for the Prime Minister. Will his statement be made on television or in the house?


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. In view of the statement by the Minister of Finance last night emphasizing what many of us have believed for a long time, that the present international monetary disturbances are due mainly to the war in Viet Nam, what new initiative is the government planning to take or to promote in order that this disastrous war may be brought to an end?


Lester Bowles Pearson: Mr. Speaker, I do not think any government, apart from those directly concerned with this war, has taken more initiatives and attempted to do more to bring this tragic war to an end than the Canadian government. We will continue to do what we can.

March 8, 1968
Inquiries of the Ministry


David Lewis: I have a supplementary question. In view of the fact that the offers of Hanoi have been refused by Washington, and in view of the fact that the chances of ending the bombing of North Viet Nam appear to be smaller than ever, does the government not consider it necessary now to take some initiative at the Security Council to ensure that the first step is taken?


Lester Bowles Pearson: The hon. gentleman speaks about the offers of Hanoi being refused. Perhaps it would be fair to add that the offers to Hanoi to negotiate this matter have been refused more often than the offers from them.


Some hon. Members:: Hear, hear.


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I have a question arising out of the reply given by the Prime Minister a few moments ago-with which, I may say, I am in agreement-as to Hanoi's rejection of the United States initiatives which would have led to the negotiation table. Would the Prime Minister consider, as the Canadian government has taken its stand in favour of the cessation of bombing by the United States, introducing a resolution in this house supporting the government's stand so it would be crystal clear, so far as Canada is concerned, that Canadians as a whole believe with U Thant that a cessation of bombing would lead to the negotiation table and bring about an end to the tragic danger of a third world war?


Lester Bowles Pearson: Mr. Speaker, of course I would be very glad to consider the suggestion of the right hon. gentleman. I would only point out, as my first reaction, that any resolution of that kind to be effective and fair might have to deal with more matters than the actual cessation of bombing. But I would be glad to consider the matter.


John George Diefenbaker: If the Prime Minister would draft such a resolution-and it should be a joint resolution of the kind he suggests -I think the house generally would give support to it, and would thereby strengthen the position in this regard of the Canadian government.


[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I believe this question should be directed to the Solicitor General. I should like

to ask whether his department has had an opportunity to investigate the allegations that pamphlets advocating the fire bombing of United States draft offices, as well as other acts of violence, originated in Canada and were postmarked Toronto.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, a copy of this pamphlet has been forwarded to the Department of Justice for a legal opinion. In the meantime the investigation is continuing.


Hon. E. D. Fulton (Kamloops):: I have a supplementary question, Mr. Speaker. Some time ago I asked the Solicitor General whether an investigation was under way to establish whether persons in Canada were advocating the breaking of either Canadian or United States laws in connection with advice to draft dodgers. Is the minister in a position now to say whether that investigation is complete and whether any evidence of urging the breaking of Canadian or United States laws has been established?


Lawrence T. Pennell: A summary examination of the material referred to by the hon. member did not disclose commission of a criminal offence. However, officials of the Department of Justice are studying it further for a more considered opinion.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: should like to address my question to the President of the Treasury Board. It arises out of an answer given yesterday when I inquired about the book of estimates. The minister said the printing of new estimates would cost $50,000, whereas the existing estimates might be simply revised. I am wondering if this amount was correct, or whether there was an error.


Hon. E. J. Benson (President of the Treasury Board):: I thank the hon. member for asking this question. As I informed him yesterday right after the question period, the correct amount should be $15,000 rather than $50,000. I apologize to the house for giving the wrong figure.


Alfred Dryden Hales: May I ask a supplementary question. May I ask the minister now when he proposes to table the revised estimates, and will there be a completely new book or will it simply be a revision?
March 8, 1968


Edgar John Benson: We have not decided as yet whether there will be a completely new book or simply adjustments to the estimate figures. As to tabling, I would say it will take several weeks for a reprinting of any kind.



POSSIBLE CONDITIONS ATTACHED TO ADDITIONAL CREDITS

[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: My
question is for the Minister of Finance. Yesterday in making his announcement with regard to the extension of additional dollar credits by Italy, Germany and the Bank of International Settlements, the minister did not indicate whether there were any conditions attached to this particular facility being extended to Canada as there were conditions attached to the assistance from the United States. Were there any particular conditions with regard to this extension of credits yesterday?


Hon. Mitchell Sharp (Minister of Finance):: No, Mr. Speaker. There were two kinds of stand-by credits made available, those between the central banks of the European countries, the Bank of International Settlements and the Bank of Canada, and no conditions were attached. The loan which is being negotiated with the Export-Import Bank of the United States of course has the ordinary conditions that attach to any loan from that institution, but no conditions requiring any change in Canadian policy.



REFUSAL BY BANKS TO MAKE FARM IMPROVEMENT LOANS

[Stage Direction]
On the orders of the day:
Mr. Reynold Rapp (Humboldl-Melfort-Tisdale):: My question is directed to the Minister of Agriculture. Some chartered banks have now changed their lending policy to farmers and are not prepared to grant farm improvement loans, giving as a reason that the interest rate is too low. Has the minister any comment to make on this subject?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, the farm improvement loan program is under review with a view to making more money available to farmers because of the present difficulties as a result of the 5 per cent interest rate under the farm improvement loan program. As soon as any changes that we deem appropriate are conceived, they will be presented to the house or otherwise in the normal and proper manner.
Inquiries of the Ministry


Mr. Graffiey:: Set up a task force. Call in the experts.


Mr. E. Nasserden (Rosthern):: A supplementary question to the Minister of Finance. Is it the intention of the government to subsidize any increase in interest rates on farm improvement loans that may be provided under government legislation?


Mitchell William Sharp: No, Mr. Speaker, there is no such intention.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. In view of the promulgation of the armed forces unification act and the coming into effect on February 1 of this year of the Q.R.O. changes, as well as certain orders in council, will the minister bring to a halt suggested policies to establish new armed forces organizations, French speaking only, and the establishment of a mess and guest house in Ottawa available only to those of the rank of brigadier and higher?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, I think it is unfair to say we ever had any plan to establish units that were exclusively French speaking. We never had that in mind. So far as the senior officers' mess is concerned-


Harold Edward Winch: And guest house.


Léo Alphonse Joseph Cadieux: I don't know what the hon. member is talking about when he refers to a guest house. There is a mess for which senior officers pay the expenses.



INQUIRY AS TO FINAL PAYMENTS FOR 1966-67 CROPS

[Stage Direction]
On the orders of the day:
['Mr. Speaker, advice on grants to the associations in Canada comes from the national advisory council on fitness and amateur sport. The council has been meeting this week in Ottawa and has undoubtedly considered this particular point, and will be expressing its views. In the meantime I think the situation has to some extent been assisted by the decision of the I.O.C. to reconsider the matter.\n[Mr. Winters.)']
Edward Nasserden: My question is directed to the Minister of Trade and Commerce. I wonder if the minister will consider making the announcement of the final payments for wheat, oats and barley soon?


Hon. Robert Winters (Minister of Trade and Commerce):: I will endeavour to do that early next week.

March 8, 1968
Inquiries of the Ministry



[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, in view of the question I put to the Prime Minister yesterday concerning Rhodesia and the reply I received, I was wondering if the Prime Minister is now in a position to give us a little more information on the nature of the discussions with the British government.


Lester Bowles Pearson: No, Mr. Speaker. Those discussions are continuing, and I cannot report on them at the moment. However, I will do so as soon as possible.


[Stage Direction]
On the orders of the day:
William Heward Grafftey: Mr. Speaker, although the Minister of National Health and Welfare alluded to this subject a few days ago, for sake of clarity I should like to ask him whether the government's policy of assistance to those organizations sponsoring our athletes at the summer games in Mexico has been affected by South Africa's apartheid policy.


Hon. Allan J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, policy in connection with international competitions is determined basically by the sports associations in Canada. The Department of National Health and Welfare has not taken the attitude that we ought to direct the policy of sporting organizations and associations in Canada.


William Heward Grafftey: A supplementary question, Mr. Speaker. Can I assume then that the usual government assistance to our athletes will be given this year.


Allan Joseph MacEachen: Mr. Speaker, advice on grants to the associations in Canada comes from the national advisory council on fitness and amateur sport. The council has been meeting this week in Ottawa and has undoubtedly considered this particular point, and will be expressing its views. In the meantime I think the situation has to some extent been assisted by the decision of the I.O.C. to reconsider the matter.
[Mr. Winters.)



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I should like to ask a question of the Prime Minister. In view of the statement of the Minister of Finance in connection with the United States guide lines and their effect on Canada, and in view of the importance of the productivity in this country to stabilize the economy, was the Minister of Justice speaking for the government when he said that he believed the special income tax concessions to the petroleum and mining industries should be abolished?


Lester Bowles Pearson: Mr. Speaker, I have no knowledge that the Minister of Justice made any such statement. I do not think he has, either.


Eldon Mattison Woolliams: Mr. Speaker, may I put a supplementary question to the Minister of Justice. Was that statement made by him, and is that his position in this regard?


Mr. Speaker:: Order, please.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. M. W. Martin (Timmins):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Has the gold portion of Canada's reserves been made subject to the new agreement with the United States, in that they will be transferred to non-negotiable United States securities?


Mitchell William Sharp: No, Mr. Speaker.



STEEL-STATEMENT RESPECTING APPLICATION OF DUMPING DUTY

[Stage Direction]
On the orders of the day:
Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I have a question for the Minister of National Revenue. In view of the fact that the minister's department is conducting investigations into dumping in Canada by foreign steel producers, what has been the result of such investigations?
March 8. 1968


Hon. Jean Chretien (Minister of National Revenue):: Mr. Speaker, after investigation, some cases of dumping have been brought to light. In such cases we have taken anti-dumping measures and collected the charges provided for in the act and, as a result, prices have gone up for those people who were trying to dump steel in Canada.



SUGGESTED ESTABLISHMENT BY CHINA OF CANADIAN OFFICE

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Ou'Appelle):: Mr. Speaker, my question is to the Minister of Trade and Commerce. In view of recent indications by the government of an awareness of China, has a decision been reached to allow China to set up a trade office in Canada?
Hon. Robert Winters (Minister of Trade
and Commerce): Mr. Speaker, that matter has not arisen recently.



EXPO '67 REQUEST FOR STATEMENT OF REVENUES AND DEFICIT

[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. In view of the announcement that Expo contributed some $450 million to Canada's balance of payments, when will the minister be in a position to give parliament a complete financial report on the revenues accruing from Expo as well as the cost, including the final deficit?


Robert Henry Winters: Mr. Speaker, the hon. member has a question on the order paper at the moment regarding this matter. An answer is in course of preparation. It has been circulated to other departments concerned. I hope to be able to table the answer next week.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I wanted to put a question, but before, I should like to call your attention to the fact that the hon. member for Lac-Saint-Jean has
Inquiries of the Ministry been trying to be recognized since the beginning of the question period, but has been unable to catch your eye.


Mr. Speaker:: Order. The hon. member for Lac-Saint-Jean.


Mr. Alcide Simard (Lac-Saini-Jean):: Mr. Speaker, I gave notice of the question I want to put to the hon. Minister of Transport.
Since there seems to be a conflict of jurisdictions over water security with regard to Lake St. John in the province of Quebec, can the hon. minister tell us which of the federal or provincial governments is responsible for water security on that inland sea?


Mr. Speaker:: I believe that question is out of order because it entails interpreting the rules.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, may I put a supplementary question?
Can the hon. minister look into the matter with the view to establishing who is responsible for security on Lake St. John and then report to the house?



PUBLIC ACCOUNTS


[Stage Direction]
On the orders of the day:
Gérard Laprise: Mr. Speaker, on February 29 I directed a question to the Acting Prime Minister, in order to know whether measures would be taken so as to authorize the Auditor General of Canada himself to hire the personnel he needs for the auditing of government accounts.
Would the right hon. Prime Minister be prepared to give an answer today, and could he also tell us to what extent the measures announced by the Minister of Finance will affect that request of the Auditor General of Canada?


Lester Bowles Pearson: I am afraid I am not able to answer that question today, Mr. Speaker. I shall do my best to get an answer for Monday.



ATLANTIC DEVELOPMENT BOARD


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, my question is directed to the minister who reports to the house

March 8. 1968
Inquiries of the Ministry for the Atlantic Development Board. Will the minister advise when he will be in a position to approve the recommendation of the Atlantic Development Board for the spending of some $20 million in the Atlantic provinces for highway construction, which matter has been awaiting signature for quite a period of time?


Allan Joseph MacEachen: No, Mr. Speaker; no submissions are awaiting my signature in connection with this matter.


Robert Muir: May I ask the minister if his signature is being withheld as a result of the dispute between Premier Robichaud of New Brunswick and himself?


Mr. Speaker:: Order, please.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Halifax):: My question is addressed to the President of the Treasury Board, Mr. Speaker. Can he now answer the question I put to him twice previously about nurses' salaries in the public service?


Edgar John Benson: Mr. Speaker, the Treasury Board at its meeting yesterday approved an increase in nurses' salaries in the Public Service of Canada.


J. Michael Forrestall: A supplementary question, Mr. Speaker. Can the President of the Treasury Board indicate whether this salary raise for our nurses in the public service will mean that they are no longer the lowest paid nurses in Canada?


Mr. Speaker:: Order, please.


Mr. Robert Simpson (Churchill):: A supplementary question, Mr. Speaker. Can the minister say whether nurses in the northern health services are to be included in the salary increase?


Edgar John Benson: Yes, they will, Mr. Speaker. The raise is for nurses employed in the public service all across Canada. I dispute their having been the lowest paid nurses in Canada. The increase is of the order of $500 per annum.


Mr. Robert McCleave (Halifax):: I have a supplementary question to direct to the President of the Treasury Board. Are the increases awarded to nurses straight across the board increases, or do they also take into account the complaints of nurses in the Halifax area with regard to differentials?


Edgar John Benson: All matters which were
brought to our attention were taken into consideration. The announcement involves a long schedule of classifications. I would not like to have given the impression earlier that everybody got a $500 increase. It varies according to classification.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. R. D. McLelland (Roselown-Biggar):: wish to direct my question to the Minister of Agriculture, Mr. Speaker. Can the minister inform the house whether his department is planning to keep on staff engineers who have been working on P.F.R.A. projects throughout western Canada, or are these engineers to be phased out in the way the government is phasing out P.F.R.A. projects?


Mr. Speaker:: Order. That question should be placed on the order paper.



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. Howard  Johnslon@Okanagan-Revel-sfoke: I wish to direct a question to the Minister of Transport, or really I wish to rephrase the question I asked yesterday. Having read front page reports in Vancouver newspapers I am convinced that the question is urgent. Can the minister assure the house that his department and the government of British Columbia are not on a collision course over the construction of the super port at Roberts Bank?


Mr. Speaker:: Order. The matter may be urgent, but the question as asked is not in order.


Mr. R. W. Prillie (Burnaby-Richmond):: Mr. Speaker, I should like to direct a question to the Minister of Transport, and I would like to
March 8. 1968

make it clear that I am not asking for a legal opinion. Has he sought or received an opinion from the legal officers of the crown as to the competence of the government of British Columbia in establishing a harbours board for Roberts Bank?


Hon. Paul Hellyer (Minister of Transport):: Mr. Speaker, the National Harbours Board has received legal opinions in respect to the various factors involved in the construction and operation of this proposed port.


Harold Edward Winch: As
a supplementary question may I ask the minister whether he has had the opportunity to study the opinion of Premier Bennett on this development and, if so, is he prepared to proceed with full construction under federal control?


Paul Theodore Hellyer: Mr. Speaker, we are determined that working out the details with the province will not delay this project. This is a project of significance not only to British Columbia but to the whole western part of Canada. It is a great national work. It is the orientation toward the Pacific, which is one of the great development areas for the future, and we have a responsibility to see that the construction of the port is not delayed.
We still hope to have the full co-operation of the premier and his government as we proceed, and once our study of the ownership and management of ports is completed we will be glad to discuss this too with them, but in the meantime we do not want to hold up construction; we want to get on with the job.


Mr.  T. S. Barnell@Comox-Alberni: Mr. Speaker, as a supplementary question I would like to ask whether an application has been filed under the provisions of the Navigable Waters Protection Act by the government of British Columbia for the approval of plans for the construction of a harbour in the area under discussion.


Paul Theodore Hellyer: Mr. Speaker, there is a question in respect to the Navigable Waters Protection Act related to certain works proposed, particularly the proposed hydro conduit across the harbour to Victoria Island-


Mr. Barnett:: To Vancouver Island.


Paul Theodore Hellyer: It is going to be Victoria Island in the years ahead-but I hope none of these small difficulties will hinder the installation of essential services.
Inquiries of the Ministry


Mr. Johnston:: Mr. Speaker, when the minister refers to working out the details, will these be worked out in conjunction with the newly constituted provincial harbour board of British Columbia?


Paul Theodore Hellyer: Mr. Speaker, we are in touch with the province in respect to the details, and these can be handled by the regular departments of the province or through their board or in whatever other way the province wishes to have them dealt with.


Thomas Speakman Barnett: Mr. Speaker, I wish to ask a supplementary question, and it arises out of the fact that maybe the minister did not understand my original question. I did not ask about the approval of hydro plans. I asked whether the government of British Columbia had filed plans for approval under the Navigable Waters Protection Act for the construction of a harbour in this area. Before I sit down may I just say to the minister-


Mr. Speaker:: Order, please.



INQUIRY AS TO SIGNING OF INTERNATIONAL GRAINS AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. W. H. Jorgenson (Provencher):: My
question is for the Minister of Trade and Commerce, and I ask it because of a question which the hon. member for Moose Mountain (Mr. Southam) asked on March 1. Can the minister tell the house how many nations have already signed the two conventions making up the international grains arrangement that embodies the Kennedy round cereals agreements which were open for signature between October 15 and November 30 last year? Has Canada actually signed these instruments?


Robert Henry Winters: Yes, Canada has actually signed. As to the precise number of the other countries, I should like to refresh my memory and reply early next week.


Warner Herbert Jorgenson: Does Canada intend to deposit the signed instruments by the agreed deadline next summer and, if so, how many other nations are expected to follow suit?


Robert Henry Winters: Canada does. I should like to reply to the other part of the question in the same way as I did a moment ago.

March 8, 1968
Inquiries of the Ministry
EXTERNAL AFFAIRS	INQUIRIES OF THE MINISTRY



SUGGESTED RECONSIDERATION OF STATEMENT RESPECTING FRANCE

[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Prime Minister. Considering the announcement made yesterday to the committee on finance, trade and economic affairs of the House of Commons that the finance committee of the French National Assembly has asked to meet with our committee on March 25, does not the Prime Minister think his rather stark support of the truculent statement of the Minister of Justice with regard to our relations with France should be reconsidered for fear of breaking off what may be a very useful conversation with the French assembly?


Mr. Speaker:: Order. I suggest to the hon. member that the question as asked is argumentative.



NIGERIA-CANADIAN EFFORTS TO END CIVIL WAR

[Stage Direction]
On the orders of the day:
Mr. Heaih Macquarrie (Queens):: My question is directed to the Prime Minister and has to do with the so-called forgotten war, the bloody and continuing conflict between Nigeria and Biafra. Can the Prime Minister indicate what steps Canada is taking toward initiating a united Commonwealth effort to bring this terrible conflict to an end and make it possible for negotiations to begin?


Lester Bowles Pearson: We have been keeping in close touch with the Secretary General of the Commonwealth organization. As the hon. gentleman knows, he has been in Nigeria to see what he might do to bring this civil conflict to an end. There have been no requests made of the Canadian government at this time.


Howard Earl Johnston: The Prime Minister says he has been keeping in touch. Does this include consultation with the Biafran representatives who are now in Canada?


Lester Bowles Pearson: In these matters we have naturally to deal officially with the government of the country concerned, and in this case it is the government at Lagos.
[Mr. Winters.!
On the orders of the day:


Mr. Jack Roxburgh (Norfolk):: I should like to address a question to the Prime Minister. In view of what appeared in Mr. Bain's column in the Globe and Mail this morning I sincerely hope my right hon. friend will see to it that Mr. Bain receives a centennial medal without delay.


Mr. Speaker:: Order.


Mr. Mac T. McCutcheon (Lambton-Keni):: Mr. Speaker, I want to direct a question to the President of the Treasury Board. It is relative and supplemental to questions that were asked earlier today. Is it government policy to instal wall to wall carpeting in all deserted R.C.M.P. houses across Canada, as is now being done on Walpole Island?


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. As an aid to curtailing unnecessary spending and saving the Canadian taxpayers millions of dollars, will the government consider withdrawing Canada's participation in NORAD?


Mr. Speaker:: Order.



RURAL DEVELOPMENT


[Stage Direction]
On the orders of the day:
Mr. Eric Stefanson (Selkirk):: I have a question for the Minister of Forestry and Rural Development. Is the minister in a position to reply to the question I asked him on Friday, February 15 relating to vocational training school program agreements covered by the ARDA-FRED arrangements?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: Yes, Mr. Speaker, arrangements are now being made between the department of manpower, the department of forestry and the Manitoba government so that the planned program may be carried out as of this year and in subsequent years.
March 8, 1968



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. R. R. Soulham (Moose Mountain):: have a question I should like to direct to the Minister of Agriculture. It follows the question I directed to him on Monday last as reported at page 7233 of Hansard, which refers to the possible collapse of the new and expanding P.M.U. estrogen drug industry in western Canada because of the terms of Bill C-190. The hon. gentleman undertook to consult his colleague the Minister of Consumer and Corporate Affairs-


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


Richard Russell Southam: I am referring to it in order to refresh the minister's memory. He said he would consult with the Minister of Consumer and Corporate Affairs on this matter. Has he done this, and, if so, what was the result?


Hon. John N. Turner (Minister of Consumer and Corporate Affairs):: Perhaps I can answer on behalf of the Minister of Agriculture. We did have a consultation, and I have received representations from farm producers of P.M.U. in western Canada directed to me apparently on the basis of statements by representatives of the company concerned that they fear the company's P.M.U. processing operations in the west will be closed down as a result of import competition if Bill C-190 is enacted. The company has not made any such representations to me.
We accordingly communicated with the head office of the company in Montreal. I am informed that the company has no present plans to curtail its P.M.U. processing operations in western Canada in view of Bill C-190, and that no authority was given by the company's head office to its western representatives to inform the farm producers concerned that the plant would close as a result of Bill C-190. The company has informed us that it has long term contracts with producers of P.M.U., and it is the intention to honour these contracts.


Mr. Speaker:: Order, please.
Inquiries of the Ministry FINANCE



EXEMPTION OF CANADA FROM U.S. BALANCE OF PAYMENTS MEASURES

[Stage Direction]
On the orders of the day:
Murdo William Martin: I have a question for the Minister of Finance arising out of a report in the Globe and Mail this morning to the effect that the minister has received a letter from Mr. Fowler freeing Canada from all restrictions-


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


Murdo William Martin: My question is based on this report. Can the minister inform the house whether this freedom from restriction includes the 18J per cent tax on the purchase of Canadian securities?


Mitchell William Sharp: I made a statement yesterday in general terms. I tabled the exchange of letters between Mr. Fowler and myself, and at that time I set out precisely the nature of the exemption. I dealt with the interest equalization tax at the same time. Perhaps the best way of handling the matter would be for the hon. member to direct his question to me when we are in committee of supply.



NATIONAL CAPITAL


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: My
question is directed to the Minister of Public Works. Bearing in mind current issues concerning construction regulations and standards in the national capital, can the minister indicate when we may expect the establishment of the parliamentary committee on the national capital?


Hon. G. J. Mcllrailh (Minister of Public Works):: It is my understanding from comments made by the house leaders-and I refer particularly to the house leader for the official opposition-that if such a motion were brought forward there would be no debate. On that understanding I would hope we could bring it forward today. In any event, we are ready to bring it forward immediately.

March 8, 1968
Inquiries of the Ministry AGRICULTURE



REQUEST FOR INCREASE IN SUPPORT PRICES

[Stage Direction]
On the orders of the day:
Edward Nasserden: I have a question for the Minister of Agriculture. Having regard to the increasing costs of production, including rising interest rates, in the agriculture industry, is the government planning to provide a proportionate increase in support prices for commodities under the Agricultural Stabilization Act?


Mr. Speaker:: Order. This is a question of Tar too wide a scope to be asked and answered at this time. The hon. member is .asking for information of a type which should be given on motions.


Edward Nasserden: Would the minister or the Prime Minister be willing to refer the operations of the stabilization act to the agriculture committee?


John James Greene: T believe the committee is master of its own procedure and the subject matters which it studies.


Some hon. Members:: No.


John James Greene: Certainly I would have no objection to a study of the workings of the stabilization act if the committee felt this to be in the interest of its work.



POTATOES-REQUEST FOR STUDY BY TASK FORCE

[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: This question is addressed to the Minister of Agriculture and has to do with the serious conditions which exist at the present time within the potato industry in both eastern and western Canada. Recognizing the usefulness of the federal task force on agriculture, I wonder whether the minister has instructed the task force to undertake a special research project involving the whole potato industry in this country.


John James Greene: I do not instruct the task force as to the ambit of its studies but I feel certain, in view of the difficulties which exist in this industry-eastern Canada does not want value for duty placed on potatoes this year while western Canada does-that the task force will give serious consideration to making a special .study of the potato industry in this country.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, I wish to direct a question to the Minister of Transport.
It seems that the C.N.R. is implementing in the province of Quebec a program to eliminate several platforms and to reduce the number of people responsible for checking the tracks.
Could the minister tell us if safety measures will be taken to ensure, in spite of the implementation of that program, continuous inspection of the tracks when turbotrains are put in operation?


Paul Theodore Hellyer: Mr. Speaker, I will be glad to refer this question to the railway and then reply to my hon. friend.



EXPO '67 REPORTED SALES OF ASSETS WITHOUT TENDERS

[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I wish to address a question to the Minister of Trade and Commerce. Inasmuch as the Montreal city council executive committee has signed a draft agreement to buy certain Expo assets for a dollar, I wish to ask if this was done by open tender, as the Canadian National Exhibition wished to tender on certain of those assets.


Robert Henry Winters: Mr. Speaker, certain of the assets remain to be disposed of, notably the Expo Express, and tenders have been called for that. Most of the other assets were disposed of to the three parties to the agreement, the city of Montreal, the province of Quebec and the federal government by mutual agreement.


Ralph Bronson Cowan: As a supplementary question, these were not sold by open tender then?


Mr. Speaker:: Order, please.


Robert Carman Coates: As a
supplementary question, earlier this morning the Minister of Trade and Commerce indicated that he is preparing an answer to question No. 930 on the order paper. I am wondering just how much detail we are going to be able
March 8, 1968

to secure on the over-all basis of Expo in regard to-


Mr. Speaker:: Order, please. I suggest to the hon. member that he should wait until he obtains an answer to the question on the order paper before asking a supplementary question.


Robert Carman Coates: As a supplementary question, Mr. Speaker, the Auditor General's report for 1967 estimated the deficit as of June 1, 1967, at $200 million. This is information available to the-


Mr. Speaker:: Order, please. This is argument. The hon. member is not asking for information now.



IMMIGRATION


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: Mr. Speaker, on Wednesday the hon. member for Bur-naby-Coquitlam asked the Minister of Manpower and Immigration whether a special team was being sent to Nairobi and whether special regulations were being drawn up to assist people in view of the unusual circumstances in Kenya. Can the minister make a report to the house on this matter now?


Hon. Jean Marchand (Minister of Manpower and Immigration):: Mr. Speaker, a special immigration officer will be on the spot in Nairobi early next week, and within two or three weeks a mobile team will also be in Nairobi to take care of applications for immigration to Canada.


David Samuel Horne MacDonald: As a supplementary question, can the minister indicate at the present time how many applications have been received from Kenya for immigration to Canada?


Mr. Speaker:: Order, please. The hon. member is asking for detailed information which cannot be given at this time.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I would have directed this question to the
Inquiries of the Ministry Minister of Transport but he is obviously more concerned with harbour development in the Vancouver area than he is with the area from which I come. So I would like to direct my question to the Minister of Energy, Mines and Resources, and ask him if the government is able to provide the house with any information as to the extent to which it may be assisting in promoting the development of the Alberta tar sands and the subsequent pipe line transmission-


Mr. Speaker:: Order, please. This question is of a very general nature. The hon. member is asking for information which ought to be given to the house by way of a statement on motions.


Frank Howard: Then may I ask, will the minister make a statement on motions on Monday about this matter?


Hon. Jean-Luc Pepin (Minister of Energy. Mines and Resources):: I will consider that, Mr. Speaker.



NATIONAL CAPITAL


George James McIlraith: That a joint committee of both houses of parliament be appointed to examine the progress and programs of the National Capital Commission in the development, conservation and improvement of the national capital region:
That twelve members to act on behalf of the House of Commons as members of the said committee be designated at a later date;
That the said committee have power to call for persons, papers and records, to sit while the house is sitting, and to report from time to time;
That the said committee have power to print such papers and evidence from day to day as may be ordered by the committee and that standing order 66 be suspended in relation thereto;
And that a message be sent to the Senate requesting that house to unite with this house for the above purpose and to select, if the Senate deems advisable, some of its members to act on the proposed joint committee.


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


Frank Howard: Mr. Speaker, just before the question is put I wish to say I have no great disposition to argue about the passing of the motion, but it seems rather ludicrous to me that we are going to give birth to a committee that is going to die immediately. It is indicative of the attitude

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Income Tax Act
of the government to matters of this nature and-


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


Frank Howard: On division.
Motion agreed to on division.
[DOT] (11:50 a.m.)



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.

[Stage Direction]
That it is expedient to introduce a measure to amend the Income Tax Act to provide among other things:
1.	That for the 1968 and subsequent taxation years the amount deductible by a taxpayer in respect of gifts made to a province shall not be subject to the limitation imposed by paragraph (a) of subsection (1) of section 27, and the amount deductible in a year by a taxpayer in respect of gifts made either to a province or to Canada shall include an amount in respect of such gifts made by him in the preceding year to the extent that such amount was not deductible in computing his taxable income for the preceding year.
2.	That with respect to taxable income earned in 1968 and 1969, in addition to the income tax otherwise payable by a corporation under the Income Tax Act, a surtax be payable equal to 3% of the amount of tax as determined under section 39 or 69 of that act, as the case may be.
3.	That for the 1968 and 1969 taxation years, in addition to the income tax otherwise payable by an individual under the Income Tax Act, a surtax be payable equal to 3% of the amount of the basic tax as determined under section 33 of that Act in excess of $200.
4.	That for the taxation years commencing after November 1968 a corporation shall during the 12 months period ending 2 months after the close of each taxation year, pay to the Receiver General of Canada
(a)	on or before the last day of each of the 12 months in that period, an amount equal to one-twelfth of the tax as estimated by it at the rate for the taxation year
(i)	on its estimated taxable income for the year, or
(ii)	on its taxable income for the immediately preceding year,
(b)	on or before the last day of the month ending 3 months after the close of each taxation year the remainder of the tax payable on its taxable income for the year at the rate for the year
and that for the taxation year commencing in the period after November 1967 and before December 1968 a corporation shall during the 10 months period ending 2 months after the close of its taxation year pay to the Receiver General of Canada
(c)	on or before the last day of
(i)	the 2nd month,
(ii)	the 4th month,
(iii)	the 6th month,

(iv)	the 8th month and
(v)	the 10th month
in that period an amount equal to one-fifth of the tax as estimated by it at the rate for the taxation year
(vi)	on its estimated taxable income for the year, or
(vii)	on its taxable income for the immediately preceding year,
(d)	on or before the last day of the month ending 3 months after the close of its taxation year the remainder of the tax payable for the year at the rate for the year.
Mr. Gauthier:: Mr. Chairman, in order to continue the remarks which I was not able to finish last night, I wish to call the special attention of the house to the four items of the measure which is placed before us. A study of those items reveals that two of them, Nos. 1 and 4, deal mainly with the people who have money while the other two deal with those who precisely need money.
The first item reads as follows:
That for the 1968 and subsequent taxation years the amount deductible by a taxpayer in respect of gifts made to a province shall not be subject to the limitation imposed by paragraph (a) of subsection (1) of section 27, and the amount deductible in a year by a taxpayer in respect of gifts made either to a province or to Canada shall include an amount in respect of such gifts made by him in the preceding year to the extent that such amount was not deductible in computing his taxable income for the preceding year.
Mr. Chairman, in the light of that item, I feel that we are in the process of instituting a Saint-Vincent-de-Paul society at the federal level. In fact, it seems we want to transpose at the federal level the procedure used by Saint-Vincent-de-Paul societies working in our municipalities, and I can see in this a danger with regard to the gifts made, for instance, to a museum or other provincial or federal agencies.
For instance, if someone omits to declare to the taxation department, sums of money or museum pieces worth $50,000, $60,000, or $100,000 with a little politics, it will only be necessary to say that such value represents a gift to some museum, a province or to the federal government. He will get some benefit out of the deal and it will thus be protected under the aegis of a Saint-Vincent-de-Paul society. I think that it was a well conceived item, not by the Minister of Finance (Mr. Sharp) but by his experts. It is a sort of subtle way of telling us that there are probably big amounts and large collections to be protected.
March 8, 1968

I now quote item No. 4:
That for the taxation years commencing after November 1968 a corporation shall during the 12 month period ending 2 months after the close of each taxation year, pay to the Receiver General of Canada.
In short, it is a matter of accelerating the remittance of payments by the companies. We know what the government is going to collect momentarily and we know that the funds will come in faster, but it will not affect in any way large pulp and paper companies or others, because they are not subject to any new tax.
We are in favour of that method of collecting the money more quickly but the people should not be led to believe that a tax has been levied against the big corporations because they are simply asked to file their returns two months earlier than in previous years. That provision is set forth in paragraph 1, which I quoted, and in paragraph 2 which reads as follows:
. That with respect to taxable income earned in 1968 and 1969, in addition to the income tax otherwise payable by a corporation under the Income Tax Act, a surtax be payable equal to 3 per cent of the amount of tax as determined under section 39 or 69 of that act, as the case may be.
A 3 per cent tax is levied on the income of corporations and small private companies. The New Democratic party must be very happy about that small tax because it has such a grudge against private enterprise.
In my opinion, this will inevitably fall on the shoulders of workers, family heads, because companies will certainly include the tax in their expenses and in the price of their goods. Finally, this will be another tax laid on the shoulders of the small wage-earner.
Paragraph 3 reads as follows:
That for the 1968 and 1969 taxation years, in addition to the income tax otherwise payable by an individual under the Income Tax Act, a surtax be payable equal to 3 per cent of the amount of the basic tax as determined under section 33 of that act in excess of $200.
Mr. Chairman, it is exactly the same baby as in the bill rejected on February 19, but instead of one dress it now has two.
I warned the minister last night that the purpose of this bill, just like that of February 19, is to burden the small taxpayer with another tax. We told him over and over again that we would not support a measure intended to raise the taxes paid by workers and diminish their pay cheques.
Income Tax Act
The worker's cheque is already reduced by 30 to 33 per cent, and we are asked today to support legislation intended to cut the cheque down still further. I am convinced that, at this rate, in four or five years at the latest, 50 per cent of the employee's pay will be deducted for taxes. In view of this escalation of taxes, which must absolutely be stopped, we say to the government: That is enough. Money can be raised in other ways. Let the government avail itself of these other ways of raising money and try to ease a little the burden of those who need their weekly pay to support their families.
Not only does the government attack the surplus revenue of the individual, but he also attacks the vital minimum. We do not have the right to levy taxes on what is essential to life, the vital minimum, and that is actually what this law will do.
In short, up to a point, that will be the influence of this measure on the corporations. This bill does not seem to be as severe as that of February 19, but it is nothing other than a compromise. In fact, the Journal de Montreal of March 7 outlined very ably the effects of this law on the worker, and I quote:
The compromise will change very little for people in the middle income or higher income brackets, but will strike more severely those who earn more than $25,000 a year. In fact, the new measure has no ceiling, whereas in the bill that was defeated in February, the ceiling was $600. The basic exemption which was $100 in the defeated bill is now increased to $200. In other words, a single person earning less than $2,743 a year will not have to pay the surtax nor will a married man earning less than $3,743 a year.
[DOT] (12 noon)
Mr. Speaker everybody knows that nowadays for a man with a family, living on $3,743 is tantamount to living on social assistance. And if social benefits recipients had to pay taxes, that would be most ridiculous. Therefore, I say that a man with a family cannot live on less than $5,000 or $6,000 a year. That is also why I said earlier that we have come to the point of taxing the necessities of a family.
I understand, Mr. Chairman, that the hon. minister needs money to cover his deficits. But first and foremost, he should consider practising economy. He said he could save $75 million. I think that through a revision of the estimates of some departments, such as the Department of National Defence and others, he could trim down his estimates by as much as $400 million or even half a billion. This

March 8, 1968
Income Tax Act
would only bring a little relief to the Canadian economy and it would be more logical for the Canadian people.
If we must live within our means, we should start to do so at the level of the federal budget. Can you imagine a country, with a population of 20 million, having a federal budget of $11,500 million, not to mention provincial budgets? It is simply ridiculous. There is surely some leakage somewhere; it is essential that the minister become aware of the situation and refrain from allowing too much latitude to all those experts, all those bureaucrats, who are constantly increasing the budgets.
The budget for the current year has increased by almost $3 billion. I find this astonishing, and I say again to the minister what we already told him at the time of the February 19 vote: This measure still affects the family budget and we shall not allow the government to take away more purchasing power from our families, which are extremely hard up at present. The minister should at all costs bear that in mind and put it in his bureaucrats' minds, if he still has some influence over them, but I doubt it.
Mr. Chairman, I would have like to dissuade the minister from introducing a bill which is still taxing, as I indicated earlier, the small and average wage-earner.
It is obvious that the citizen who lives on $3,500 annual income should not be taxed, not any more than the one who draws social security. The minister still has to collect a few dollars from the worker and that is where he goes to find. If that had still been possible, I would have liked to show him that this is not conformable to the will of the people.
We have a democratic government, we have been elected to act according to the will of the people of Canada; however, what we are doing now is not the will of the people of Canada. As far as I am concerned-and most certainly the same can be said of all other members here-I have pledged myself to serve my constituents. It is not in order to support trusts and other interests that we are here, Mr. Chairman. My only concern in this house is the well-being of my constituents, and I am sure the primary concern of all the other members is the well-being of their own constituents.
I would not want to lay all the blame on the hon. minister, as he is not the only one responsible for the present situation; in fact, he is not even the one who is really to blame.

Above governments, there is a nameless organization whose members are very influential. It is this organization I want to denounce today to the people of Canada, because it uses both parties, Tories and Grits, to its own ends, pulling the strings as if they were puppets and putting the burden of taxation on the people of Canada so as to protect its own money. That is the problem which exists in parliament today, Mr. Chairman. It is obvious here that everything changes, except the senior officials.
I submit that the government, whether it is a Liberal or Conservative government, follows the same basic principles and is the tool of those experts whom I call senior officials and who are there to carry out the wishes of the great financiers. It is precisely against that state of affairs, against those masters, against the powerful, the mighty financiers in Canada who use the government, whether it is Liberal or Conservative, that we want to fight. We have just gone through a political crisis and if the Conservatives had been in office, the same thing would have happened, because they follow the same basic principles.
We do not have any set principles because when we go to the people we do not refer to them. But we discuss them because we have a doctrine: We say that we believe in Social Credit.
The members of the New Democratic party are socialists; they can explain something different, a different doctrine. But the Conservatives and the Liberals always have the same doctrine; their economic principles, their masters are the same.
We do not endorse all the principles of socialists, just as they do not endorse all of ours. But, nevertheless, our principles are different from those of the two old parties, and it is at that level that I say that changes are absolutely necessary.
When we consider the record of the two old parties since confederation, and especially over the last fifty years, we can only conclude that we have had a chameleon government which takes the colour of the political season. That is all we have. The actors come and go, but it is always the same tragedy: the bondage of the people and the triumph of the great financiers, the masters of our country. That is our parliamentary system today, Mr. Chairman. Now, this is what we want to expose. How do they get control of the country? Through taxes and surtaxes and by subjecting the people to slavery. That is how.
March 8. 1968

We have tremendous resources; we boast of being the second richest country in the world. And what have we got? Debts, debts to no end. What does the government do about it? It borrows, like just recently, and borrows again later, putting us deeper and deeper into debt.
But, Mr. Chairman, where does all that lead us? There is an absolute need for a more reasonable government assuming its responsibilities and getting money where money is. That money is in the hands of those who are exploiting our country and that is the only place to get it.
In the last vote, we indicated how this could be done. Through a free vote.
[DOT] (12:10 p.m.)
Mr. Chairman, if there were a free and non-partisan vote, we would have a truly democratic government, a popular government which would be working for the good of the people instead of protecting trusts which control our country. That is what we want.
When we get this free vote, the members will be free to work for their ridings. The government will be free; it will have a free hand, and the whole of the Canadian people will benefit from the democratic freedom to which we all aspire.
Mr. Chairman, that day is certainly not here yet. The financiers have too much influence over this government. I hope the people will awaken one day, before there is a revolution. I hope this with all my heart, but I fear that the financiers, who are heartless men, will prefer to see blood flow rather than give up a little of what they have.
We are still living in a democracy and I hope that the people will wake up as soon as possible and ask their true representatives, those who will work for them, to occupy the seats bought up by high finance.
I hope that this day is not too far away) Mr. Chairman, because I think that, at the present time, we are about to undergo a change which must be made at any cost. If that change does not occur in the country-I do not want to be pessimistic-I am terribly worried about Canada.
We are precisely here to protect Canadian interests and this is why we are asking today the minister to be more reasonable, more human, to understand the true problem and cope with it. We ask him to refrain from burdening the taxpayer and constantly taxing him. This is not what we could call a good administration.
Income Tax Act
I know that the minister is intelligent enough to know what to administer means I do not need to explain to him the economic process, he knows it very well, better than I do, but even though it is through no fault of his own, he is not free

that is why he was elected-the financiers have put a rope around his neck. He must often go and seek advice in Washington or Toronto. That is about all he can do. He makes statements, like the one he has just delivered to us, in order to tax a little more those who already are unable to pay their present taxes, and to protect a little more those who are in the process of taking hold of all Canada, 80 per cent of which they control already. It is true that we still barely manage to live on those 20 per cent, but to-morrow they will get us, and then we shall really see the advent of financial dictatorship which, believe me, Mr. Chairman, nobody wishes to see.


Alexander Bell Patterson: Mr. Chairman, when the minister presented his statement on Wednesday he concluded with these words:
...the present international circumstances make it urgent, and I cannot emphasize this too much, that we deal as promptly as possible with the. measures that are now necessary.
In opening my remarks this afternoon I should like to say that we in this group are of the opinion that on the presentation of this resolution and the consideration of the estimates of the Minister of Finance we should have ample opportunity to set forth clearly our views in regard to the various matters under discussion. But we also feel that it would be desirable that as soon as reasonably possible a decision be arrived at by the members of this house.
I suggest that the plea to parliament for understanding and co-operation in meeting the serious financial situation indicated a radical change in the attitude of the Minister of Finance. Until now the minister has brusquely waved aside any suggestion that the financial policies of the government have undesirable effects upon the national economy. It seems to me that his scorn of any advice, particularly from the Social Credit corner of the house, has been all too obvious on many occasions.
In speaking on the estimates the other day my colleague, the hon. member for Red Deer, dwelt at some length on many of the unhealthy aspects of our economy. It is not my intention today to go into any detail with respect to the conditions to which

March 8. 1968
Income Tax Act
he has alluded. However, I might say that members of the Social Credit party have consistently opposed the deficit financing policies not only of this government but of successive federal governments and have predicted that a day of reckoning would surely come. Nations cannot borrow themselves into prosperity, and for governments to burden future *generations with perpetual debts in order to meet current expenses is not only poor business but is, I maintain, morally wrong.
* (12:20 p.m.)
The Minister of Finance, I believe, must accept the responsibility for having during his term of office one of the largest deficits, if not the largest, in either the peacetime or wartime history of the country. As we consider the statements that have been presented to us we note that it will require over $1,400 million of the people's tax money just to pay the interest on the national debt in the 196869 fiscal year. Unless this trend is reversed the national debt is bound to continue to rise in the years ahead. However, our warnings in this regard have received very little attention.
On many occasions we have also expressed our concern about the fantastic growth of the public service and have called upon the government to exercise restraint. But each year we have seen a continuation of policies that put more and more Canadians on the government payroll without any compensating or commensurate services to the general public. The imposition, by the government of costly programs and projects requiring exorbitant outlays of public money has been challenged on many occasions. Again, I must say this challenge has had little effect on the thinking of the government. The result has been that millions of dollars have been unnecessarily added to an already bloated budget.
Royal commissions that serve no real useful purpose have been set up and have cost the taxpayers millions of dollars. In other cases, work that has been or is being done by royal commissions could readily have been done by Senate committees or other existing agencies, but because of the policy of the government in turning these matters over to royal commissions yet another strain has been added to an already overtaxed public.
These and other factors have in the last few years pushed the spending estimates of the federal government, as was mentioned in the house the other day, from approximately $7 billion to over $10 billion at the present time. With exorbitant interest rates, increasingly higher taxes, the spiralling cost of
[Mr. Patterson.1
living and the consequent reduction in the purchasing power of the Canadian people, we have been brought apparently to the brink of financial chaos. According to the Minister of Finance, it seems as though the day of reckoning has finally come.
In order to assist in trying to undo the damage or at least minimize the adverse effects of inadequate and undesirable policies, the government is now asking us to co-operate because the nation is in financial difficulty and the stability of the Canadian dollar is threatened. What we have before us in the minister's statement and resolution is the sequel to the events of February 19 when the government was caught off guard and its bill to increase the tax on personal incomes went down to defeat by the vote of the united opposition. We all know, I think, even though there has been some attempt to reject this position, that traditionally this has meant the defeat of the government. The Prime Minister, in an attempt to salvage the situation, moved a confidence motion that was carried. Following the set-back the Minister of Finance has been searching feverishly for some way to meet the situation in which the government finds itself and has come up now with a resolution providing for an additional tax.
We in this group have already made the position we are taking public. Our decision to accept in principle these proposals, while maintaining our right to consider possible amendments, was based on a number of basic considerations. One was that the proposals now before us are in some measure less objectionable than those contained in Bill No. C-193. I believe that the defeat of that measure jolted the government into a reappraisal of its policies. While the end result has not been all that we had hoped, there have been some changes in the proposals that have been brought before us.
One of these involves the broadening of the tax base. Instead of the surtax being applied only to individuals it now includes corporations. It is our feeling and our belief that this is a desirable change, in spite of the objections that have been raised to the contrary. The suggestion was made this morning that this fact should be of some comfort to our friends in the New Democratic party because of their insistence through the years that corporations have not been paying their fair share of taxes. I do not believe that position has been borne out by the statements that
March 8, 1968

have been made in the house by spokesmen for the New Democratic party in the course of this debate. We have felt that the whole burden should not be placed upon the individual taxpayer. A suggestion has been made that the burden will eventually be borne by individual taxpayers in the form of higher costs. However, perhaps the Department of Consumer and Corporate Affairs, assisted possibly by the board that is to be set up, could keep a watchful eye on any developments in that regard to ensure that the individual taxpayer does not bear the full burden of the increased taxes the government claims it requires to meet its commitments.
Another factor is that the higher exemption is a recognized improvement in the new measure. Instead of the tax being applied on the amount of tax above $100, it now applies to the amount of tax above $200. I am not just sure what the net effect will be of the increase from $100 to $200 in the exemption, but the minister stated yesterday that 2,400,000 taxpayers will not be paying any surtax, or 36 per cent of those who are expected to fall within the income tax bracket this year. I believe, therefore, that this is another consideration.
[DOT] (12:30 p.m.)
But one of the major reasons for taking the position we have taken is that the government has indicated some intention of endeavouring to attack the problem on various fronts. For instance, there is to be a further cut in expenditures amounting to $75 million. I believe a far more drastic saving could be effected without adversely affecting the nation as a whole. If the government had used a fine-tooth comb in going through its estimates and its spending program I am confident it could have come up with far greater cuts without, as I say, adversely affecting the country at this time. Nevertheless, in addition to the cuts the government had already indicated it would make it is now stating that it intends to reduce expenditure by a further $75 million.
The minister also indicated that there will be a freeze on the strength of the civil service. I referred to this in my opening remarks. During the years we have indicated that the personnel of the civil service has been unnecessarily increased. If we had received additional services commensurate with the increase the situation would not have been so bad, but we are convinced that we have not been getting our money's worth
Income Tax Act
from the increase in the number of civil servants.
It seems, that the main recommendation in these proposals is for increased revenue. Under the present traditional system the government has but two sources of income, first, taxation and, second, borrowing. We recognize that the federal government has certain constitutional responsibilities. We are also aware that in order to discharge those constitutional responsibilities the government requires additional revenue.
I believe that one reason for the need for increased revenue on the part of the federal government is that it has insisted on moving into fields of provincial jurisdiction. The result has been that the federal government must now take an increasing share of the tax dollar to meet its commitments in these fields in order to make it appear to the provinces that it is giving the provinces something when all the time it is just returning to the provinces tax revenue that should be theirs, was theirs in the first place and should never have been taken from them.
As I say, under our traditional financing system the federal government has just two sources of income, taxation and borrowing. We are opposed to borrowing because of its ultimate effect upon the national debt. The interest charge on our national debt, as I have indicated, will amount to $1,400 million this year.
The electors of this country have not seen fit to consider alternatives to our traditional financing system. Hence we are faced today with a government in office that is committed to the old outmoded system in many respects. The hands of the government are tied. It is now struggling to meet the situation through policies that have never proven very effective in the past but are the only ones available to the government under the present system. This is one of the factors we have had to take into consideration in reaching our decision.
We believe that the principle of a balanced budget is a good one. I commend the Minister of Trade and Commerce-I believe he is still Minister of Trade and Commerce-for affirming, when he announced he was going to take his departure from public office, his adherence to the principle of a balanced budget and indicating that had he been minister of finance this would have been the effect of his policies. We in this group have always insisted that the principle of a balanced budget is a sound one.

March 8, 1968
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I referred to the fact that the Minister of Finance must take the responsibility for having last year the largest deficit, I believe in Canadian history. I have made reference to our national debt and the interest charges thereon. In making the announcement that the government plans to balance its budget the minister is pursuing the right objective even though some of the means used are open to serious question.
To sum up our position, it is based on the following considerations. First of all, although the unhappy situation in which the nation and the government find themselves is largely of the government's own making, we cannot turn back the clock so we must do what we can to assist in minimizing the effect of the past mistakes of the government.
Second, as I have stated, we have always favoured the principle of balanced budgets. We therefore welcome the government's move to achieve that end by further cuts in government expenditure and by holding the line on increasing the number in the public service. As a result we are prepared to accept the principle of the more widely based surtax as a temporary measure, and we are glad that the government has place in the legislation the limitation that the surtax will apply for not more than a two-year period. Under the other proposal the situation was wide open; the government could have forgotten about the tax and it would have become a permanent feature. There is at least an indication now that at some time we can debate this matter again and that the surtax could not become permanent without the approval of parliament.
Third, Mr. Chairman, a critical situation faces the country, and inasmuch as our monetary system depends to a considerable extent on public confidence we do not want to take any position that would have the effect of further weakening that confidence.


Mr. Alkenbrack:: There is no public confidence in this government.


Alexander Bell Patterson: I hear the suggestion that there is no financial crisis or serious financial situation. I think that is open to question. We find indications of it in the responses of important personalities across the country to this proposal. Some people say this is all we can do, some say there is still a lot more to be done, and some are betwixt and between and do not know just what the ultimate effect of the application of these policies is going to

be on the national economy. Honestly speaking and facing the issue, I do not think there are too many who know exactly what will be the ultimate effect of these policies.
Our fourth consideration is the fact that we cannot afford a repetition of the debacle of several days ago. Therefore the decision on this matter has to be forthright and clear, and I believe the time has come when every major issue in this house should be approached with the same attitude.
We were quite prepared to oppose Bill No. C-193 and also to oppose the subsequent confidence motion introduced by the Prime Minister. But we do not believe that a perpetuation of a climate of uncertainty and political chaos would be in the interest of the country. Therefore, for these reasons, although the proposed measures are not the most desirable nor would they have been necessary had proper policies been pursued in the past, it is not our intention to oppose the implementation of what, to us, are temporary palliatives.
[DOT] (12:40 p.m.)


Mr. Nugent:: Mr. Chairman, the subject matter of the resolution we are now considering looks strangely familiar. I thought we had disposed of this government's way of handling the country's finances by the vote on Bill No. C-193. As usual, the government is acting in a strange manner. Talking of strange ways of doing things, may I say that never before in my parliamentary career have I seen parliament treated in the way the Minister of Finance treated it the other day. He introduced his budget resolutions to the television audience of this country with the idea, no doubt, that members of parliament could learn about them from the press if they had not been watching television or listening to radio at the appropriate time. Certainly most members of the house have felt that as members of parliament they are entitled to hear before anybody else does what the government proposes to do. Never before in history has there been an example of such a flagrant denial of responsibility by a government.
This matter concerns every member of parliament since it touches on the rights, duties and privileges of every member. It also touches on the way this institution works. After all, this house is the bastion of our democracy. Our responsibility is to maintain responsible government. Regardless of our party affiliation 1 believe it is the duty of
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every one of us to preserve this institution, and its rights, duties and privileges, unimpaired for future generations. It is doubly important for a minister of the crown to maintain this institution unimpaired. I can only say that when a minister of finance ignores the elected representatives of the people of this country and does not reveal to them first those matters he ought to reveal to them, he and his government are acting most irresponsibly. I hope government supporters will be the first to tell him that is so.
I am taking part in this debate because the question of what is responsible government has now become crystallized as it never has been in any previous debate. Never before has the question of responsible government been so prominent in our minds. I touched on this matter on Monday, February 26. That was after the Prime Minister had made his suggestion. After that the Minister of Justice spoke. That speech, coupled with the actions of the Minister of Finance, shows that the Liberal party and this government deny the concept of responsible government.
The entire question began to be raised in the Prime Minister's statement. In so many words he said that the question of confidence with regard to a major government tax measure only arose because the government was defeated. He denied that inherent in any major tax proposal by the government is a question of confidence, asserting, instead that the defeat had raised that question of confidence. I submit that no government has the right to make that assertion since it negates the principle of responsible government we espouse and which we hope will continue to exist for a long time.
After the Prime Minister's statement I expanded on his ideas and took them to their logical and ridiculous extreme. I said that if the Prime Minister's assertion was correct he had found a method to perpetuate his party in office because it could never be voted out. Even as I was advancing my argument it sounded ridiculous to me; yet it was taken up by the Minister of Justice. Answering a question of mine he said that the government has the right to say whether a question of confidence exists and it has the right to say that before or after a vote is taken. Is there any truth in this assertion? No one will deny that on some minor matter which the government considers important it may say there is a question of confidence; in other words, if the proposal does not carry the government will consider itself defeated.
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It must be remembered that the Prime Minister is the adviser to His Excellency the Governor General. The Prime Minister has the right to call an election when he wishes to. He need not be defeated before calling an election because he has the power to do so. On defeat on a minor matter which the government deems to be a question of confidence, naturally it would go to the country.
The foregoing argument does not mean that the government has the right to say that on major questions which have always been matters of confidence. The government cannot do that. A recognition of what constitutes a matter of confidence is the cornerstone of the effective working of responsible government under the British parliamentary system. These remarks apply to Great Britain, Australia, New Zealand, Canada and others. Inherent in the workings of the British parliamentary system is the acknowledgment that any major money bill involves a question of confidence. Notwithstanding that, the Liberal government attempts to say that major money bills are not questions of confidence and that a question of confidence shall arise only when it says it shall, either before or after a vote. We deny that any government has the right to say that a question of confidence is not inherent in any major measure. We deny that this government has the right to say that it can decide if a matter involves confidence after a vote defeating that measure has been taken.


Some hon. Members:: Hear, hear.


Terence James (Terry) Nugent: Not only does this party deny that the Liberal party and the government have the right to say that but we reject it as a policy of this party. It is the policy of this party that a government must accept the responsibility of the inherent question of confidence that exists in every major item of legislation which will have a substantial effect on the country. This is not a case of opting out but of accepting responsibility. The Liberal party is trying to say: We have the right to deny our responsibilities in order to ensure that we stay here forever to enjoy power.


Some hon. Members:: Hear, hear.


Terence James (Terry) Nugent: Now the Minister of Finance says that the present resolution involves a question of confidence. As my leader said the other day, what is the difference between the government's current proposals and those that were defeated? If there is any difference
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between them it can only be that this measure is less important than the previous measure since it involves less money.
[DOT] (12:50 p.m.)
I do not see how the government can tell us now, and be consistent, that this resolution involves a question of confidence. Such a statement denies the Prime Minister's honesty when he suggested to the house that a question of confidence arises only when the government has been defeated. That is what he told us. He said that the question of confidence even with regard to money matters arose only after the defeat of the government. Now we find the Minister of Finance saying, in connection with a far less important measure, that a question of confidence is involved. This is, of course, consistent with the ridiculous theory put forward by the Minister of Justice to the effect that the government can say either before or after a vote whether or not confidence is involved. I wonder whether, if this motion is defeated, we shall find the government consistent in this position. Not only could they say before or after a vote whether confidence was involved but they would also be able to reverse their opinion after the event. They could say before a vote that confidence was involved and then, if defeated, they could announce that it was not. I believe this question ought to be thoroughly aired because the New Democratic party seems confused about it.
On Monday I pointed out that the resignation of a government defeated on an important measure was a bastion not only of responsible government but of the party system in this country. I made it clear that to deny this concept would be to destroy our party system. But spokesmen for the N.D.P. have taken the position that merely by making a speech they can avoid this difficulty; they have only to make it clear that they are voting against a particular measure rather than voting non-confidence in the government. This, I say, amounts to a denial that the question of confidence is inherent in major tax measures and important pieces of legislation. In taking such an attitude I maintain they are destroying the basis of our system of responsible government and of the party system in Canada.
We are all familiar with the somersaults of the Ralliement de Creditistes in this regard. Plaintively they raise their voices against certain aspects of legislation but at the same 
time they are fearful of precipitating an election which could wipe them out. They say: We voted against one measure only and we did not vote non-confidence in the government. We have heard something similar from the Social Credit party. A wonderful system has been developed among these parties, the N.D.P., the Ralliement des Creditistes and the Social Credit group, all of whom are anxious to have members in this house but who are fleeing their responsibility on questions of fundamental importance to the country.


Some hon. Members:: Hear, hear.


Terence James (Terry) Nugent: It is my contention, and I speak for our party, that the question of confidence is inherent in every major piece of government legislation, certainly in money bills. There can be no question of defeat on a major piece of legislation without the government being obliged to resign because parliament has voted non-confidence. The situation before us today is simply this: All the other parties in this house have denied that responsible government needs to exist. They have denied their duty as members to uphold a responsible system of government.
I do not believe I am called upon to trace the logical extension and show what this policy means to parliament and to Canada. But perhaps for the sake of some government supporters who are looking a little dismayed or disapproving I should point out that we have enjoyed responsible government for a long time because the government is bound to act in such a way as to please parliament or else parliament can throw it out. This is the essence of responsible government.
It is true a government cannot last longer than five years, but we do not have fixed elections in Canada as they do in the United States where it is not possible to throw out an administration between terms. The essence of our responsible democratic system is that unless a government enjoys the confidence of parliament it can at any time be kicked out of office. This is the control which parliament exercises. The government is now telling us: We deny that principle and we intend to stay in office. The only circumstances in which the Prime Minister would be obliged to advise the Governor General he had lost the confidence of parliament would be after the government had been defeated in parliament on a vote of confidence. There might not necessarily be a vote of confidence after a government has been defeated. There is a choice. The government would always have the best
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of both worlds. It could go on for five years but it could also decide, if it felt the climate of opinion was right, to go to the country and call an election whenever it wished to do so. This is not democratic. This is not responsible government.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
[ Translation']
Charles-Arthur Gauthier: Mr. Chairman, I rise on a question of privilege.
My question of privilege concerns the integrity of members of parliament and derives from a statement I just heard on television. It is a piece of news to the effect that the Rallie-ment Creditiste will support the government.
Mr. Chairman, I believe I was sufficiently clear in my remarks last night and today, when I stated the hon. minister can be sure that we shall fight with all our might against this measure.
Since our coming to this house, we always stood against tax increases, as we are convinced that taxation is not going to solve our problems.
I am told this piece of news was issued by the Canadian Press. I wish to call the attention of the house to this matter, Mr. Chairman, because it is in the interest of all members that the Canadian Press should not change or interpret their statements.
We said we would vote against the measure, because we have always been against income taxes as far as individuals and private companies are concerned and that is why I mentioned that the N.D.P. was happy to see all the private companies being taxed-


@Deputy Chair(man)? of Committees of the Whole: This is not a question of privilege but rather a difference of opinion.


Terence James (Terry) Nugent: Mr. Chairman, just before lunch I had outlined the position of the government with respect to the matter now before the committee and the fact that their present situation is that they can perpetuate themselves in office as long as they like. I believe that inherent in the resolution before us is a question of confidence, just as there was in the bill that we defeated. However, playing by their rules the Minister of Finance 27053-468J
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has now said that there is a question of confidence. I think it is incumbent upon hon. members to make sure they understand what they are voting for, that they are voting confidence in the government when they support this resolution. No matter what party one belongs to, in voting confidence in this government one is voting in favour of the theory that there is no such thing as responsible government.
The Prime Minister and the Minister of Justice have told us the official stand of the Liberal party, that it is up to the government to say when something is a vote of confidence and it can do so either before or after the vote. Therefore there is no way in which they can be defeated in this house against their will. They have made a point of saying this proposal is a confidence matter. I submit that having explained that position to the country they are being as fair and as honest as they know how in making sure that members understand that in voting confidence now they are voting for that kind of democracy which the Liberal party is asking the country to swallow whereby we are going to wipe out the age-old traditions of responsible government and start a new deal under which there will no longer be such a thing as responsible? government as we have always known and understood it.
The Liberals tell us in effect that this is a motion of confidence in a party that says it can never be made responsible to the house unless its members so choose and that if they elect to call a matter a vote of confidence they can do so after they are sure they have won the vote. That is the official position of the Liberal party on responsible government. My party rejects it. My party insists that a question of confidence is inherent in every major issue and every major piece of business brought before this house. I suggest that what is involved is not just a case of members of the Liberal party supporting their party. When they vote on this resolution they will be telling the country that they no longer believe in responsible government, that their party comes first before our concept of responsible government, that their party comes before their duty to support the concept of responsible government.
I would not want this opportunity to pass without putting that plainly on the record and making sure it is understood, because I am sure that the Liberal opponent who ran against me in the last election is gong to deny vehemently that his party stands for any such

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thing. I am not quoting the suggestions of other people with respect to what the government stands for. I am quoting its official spokesmen. I am quoting the Prime Minister who said the only way confidence arose at all was because of a defeat. I am quoting the Minister of Justice, one of the front-runners in the Liberal leadership race, who says it is entirely up to the government to determine what is a matter of confidence and that they have the right to make the choice after a vote. I am quoting the Minister of Finance who in this case says, "We will make it a vote of confidence," but in this case the resolution does not involve as much money as the last measure which we defeated. In effect he too is saying it is the government's choice which dictates and not the importance of the item under consideration.
I am sure that the Liberal opponents who ran against me, and the ones who will be running against me again if they can find one to run under these circumstances, will be screaming that this is not Liberal party policy and that the Liberals believe in responsible government. How could anyone say that? Not one member from the government benches has risen to deny the position they have taken.
In the face of the official stand taken by the Liberal party on the question of responsibility, I ask anyone to tell me how a future government that does not want to be forced out can be forced out by a vote of parliament if the government has the right to say whenever it likes that a vote is not a vote of confidence or to call it a vote of confidence only after it has won the vote in the house? If this house cannot exercise control in that regard, where do we have responsible government? If we in this chamber surrender the power to get rid of a government that is bad, as our duty demands, then how or where do we have responsible government? I know that the Governor General can act only on the advice of the Prime Minister. Through those very customs and traditions which his party is now trying to tear down the Prime Minister gained the right to be the only adviser to the Governor General, and that on the basis that he has the confidence of parliament. But now the government tells us that parliament can never test that right unless they, the members of the government, feel like it.
I ask hon. members opposite supporting the government to search their consciences and ask themselves if that is how little responsibility they have for democracy, because

democracy cannot survive without responsible government. If this house cannot control the government, who will? The answer is no one. What action can we take if we cannot vote them out of office? Hon. members opposite who support the government on this resolution when it comes to a vote will be attesting to their faith in their party, in their need, desire and determination to hold on to power. All of that means ten times as much to them as responsible government, the cornerstone of democracy.
When I suggest that this is the height of irresponsibility I think I am putting the case very mildly. I can remember how responsible they were in opposition when they said they had only one duty, to get the government out of office no matter what. That was at a time when I thought we had a pretty good government. As a matter of fact, when I study the present government and compare it with the one they were voting against then I know we had a wonderful government. But their only consideration was to get into power. Certainly people today could be excused for taking the attitude that no matter what we do in this country we must get rid of this government first. But I point out that first we must protect our institutions. The steps we try to take to get rid of this government must not harm our institutions. I believe that the first duty of most Canadians today would be to instruct their members of parliament to get rid of this government.
[DOT] (2:40 p.m.)
We have financial problems in the country today. One might say we are facing a financial crisis. Some suggest that to hold an election at this time is irresponsible and that we should keep the government in office. In view of the way the government has mishandled the financial problems of the country, coupled with its record of fumbling incompetence and stumbling from one error to another, surely one cannot say as a responsible member of parliament that we should leave this government in power. We have had a series of crises in the house, most of them brought on by the inept handling of normal problems by this government. Whenever the government has tried to do something it has done it wrong.
I should like to know what there is about hon. members opposite which weds them to the idea that the Liberal party has the divine right to rule. Why is it so important that this government should be maintained in office when it will not accept responsibility and is willing to sacrifice the bulwark of democracy
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in this country for the right to remain in power?
It is my intention to ask every supporter of the Liberal party how he can belong to a party which supports this measure. I intend to ask every supporter of the Liberal party how he can believe that his party is an effective instrument to perform those things that need to be done in the best interests of the country. Every Liberal in this country is going to have to ask himself whether he wants to belong to a party which obviously intends to destroy the responsibility of government. Liberal members must ask themselves whether they want to continue to belong to a party which does not believe in democracy but believes only in retaining power. There are some who believe that benevolent despotism is the finest thing for the country. It has not been good for this country. I have never heard any Liberal who espouses the policy of the present government say anything up to this time that would convince me that the government has acted in the interests of this country. It is very nice to have power, but a party should not adopt the position that it will do anything to retain power at the expense of the country. One must support his own party on the basis that it will serve the best interests of the country and will put that purpose before power.


Mr. Brewin:: Mr. Chairman, I wish to deal with a special aspect of the financial problems facing Canada and to put before this committee and the government an alternative to the tax proposals we are discussing, to which the members of this party are opposed for the reasons put forward by the hon. member for Nanaimo-Cowichan-The Islands.
The purpose of the government's financial plans, as I understand them, is to bring its revenues into line with its expenditures and to prevent the inflationary effects of government deficits. This purpose can obviously be achieved by increasing revenues or reducing expenditures. The trouble with increasing revenues, at least in the form that has been put before this committee, is that it will create unemployment and may well stimulate the pressure toward higher prices. The effect of a reduction of government expenditures, if applied indiscriminately, could also create hardships and would decrease productivity if applied to those government services which create conditions leading to increased productivity.
There is a field of conspicuously wasteful expenditure to which I should like to direct
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the attention of the minister and, so far as I am able, to the attention of the people of Canada. It is a field long regarded as sacrosanct but one which any government must examine seriously if it is to deal effectively with inflationary pressures. I refer to the immense and wasteful expenditure on obsolete defence systems. We are and have been spending a total on defence of $1,600 million per year, and the estimated expenditure for 1967-68 is over $1,700 million.
Let me point out to the committee and the government that included in that $1,700 million are expenditures on defence systems which are completely useless, meet no real threat, and should be discontinued. It is part of the conventional wisdom shared by many members of this house-perhaps we should call it conventional folly-to strain at the gnat of government spending on health services for Eskimos in the far north, for example, and to swallow the camel of immense outlays on defence of dubious utility against remote or even non-existent threats. Indeed, I think we must get away fom the fascination with defence systems which add nothing to our security and yet burden us so that we divert resources from those things urgently needed for economic growth.
Let me illustrate this. Since 1958 Canada has been spending in the neighbourhood of $130 million per year through NORAD on a system of active defence against the supposed manned bomber threat from the U.S.S.R. Total Canadian expenditures to date on NORAD have been, I have no doubt, in excess of $1 billion. The government proposes to continue with this expenditure even though it is clearly and obviously obsolete. When I expressed this view at the committee on external affairs and defence the Minister of National Defence said this was my own personal view. It is indeed my own personal view, but it is also the view held by military and defence experts.
In 1966 Mr. McNamara, the former secretary of defence of the United States, said this, and I commend it to the attention of the government, whose members may not choose to listen at the moment but perhaps will give some attention in the future:
Our present system for defence against manned bomber attack was designed a decade ago when it was estimated that the Soviets would build a force capable of attacking the United States with many hundreds of long range aircraft. This threat did not develop as estimated.

believe that if we are to take our independence seriously it is necessary for us to scrutinize carefully any particular joint defence system and to decide for ourselves whether Canada can or should afford to contribute to it. To what new system are we going to be committed? Mr. McNamara's recent statement to the Senate armed services committee outlined the proposed new schemes for North American defence. One part consists of what is called a thin A.B.M. system, in the jargon that they use. This will cost our American friends $5 billion. It is said to be China-oriented. In other words, it is absolutely no defence against U.S.S.R. I.C.B.M.'s. If it were to be expanded into a full A.B.M. system it would cost upwards of $40 billion and it could be quickly offset by an improvement in the offensive capability of the U.S.S.R. In other words, the same degree of insecurity would be purchased at a fantastic cost.
I say, Mr. Chairman, that Canada should not spend a nickel on such a system and I am glad that the government has indicated that for the present, at any rate, it does not intend to take part in this A.B.M. system. I hope no Canadian government will.
Indeed, the very idea of a Chinese-oriented system is a good example of a vastly expensive system into which billions of dollars are poured to meet a military threat that is not real. This is, again, an example of pandering to misguided public opinion created by propaganda from the so-called industrial-military complex.
What is the rest of the new proposal to which we may be asked to commit ourselves, if not under NORAD at least in accordance with NORAD? We are going to be asked to share in the new defence arrangements proposed by Mr. McNamara, the installation of a new airborne warning control system supported by a new group of F-106 interceptors, at an anticipated cost to the United States of $12.30 billion. This new system is an airborne system which can track aircraft at low altitudes great distances from the United States. It has low vulnerability.
[DOT] (3:00 p.m.)
I suggest that whatever Canada's decision may be about this type of detection and protection we should not be drawn into outlays for new interceptors. I remind the committee again of the words of Mr. McNamara in discussing this matter:
No air defence system can provide significant damage-limiting capability against the U.S.S.R. unless accompanied by strong effective A.B.M., a capability which is at present unattainable.
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I ask the committee to note the words that no air defence system can provide significant damage-limiting capability unless it is accompanied by a system which is not attainable at the present time. I suggest that expenditures which cannot contribute significantly to Canadian or Unites States security, except on conditions which do not exist, cannot and ought not to be afforded. They are useless waste of money, men and resources. Precisely the same thing could be said about some of our present contributions to NATO. However, I have no time to go into that today.
We are committed for years to come to a tactical nuclear role. Our contribution is not needed in Europe and it has no military significance. The money we are spending on our present role in NATO is a substantial contribution to inflationary pressures. It does not contribute to the security of Canada or anyone else.
I believe no one in this house denies the necessity of spending money to buy security. In the sort of world in which we live a contribution to security and defence is essential. I am not urging that Canada opt out of its contribution to security and defence. A mobile force capable of backing international order can make a decisive and valuable contribution to world stability, and I suspect the need for this will grow rather than diminish. In such a case, defence expenditures are a real insurance premium against real risks. But I do protest against the tragic waste of scarce resources on illusory defences against illusory threats.
It is all very well to say, as some people do, "let us be good fellows. Let us go along with every system propounded by our neighbour to the south. In this way we will buy their good will." I say that the time has come for us to take a long, hard look for ourselves and firmly but politely decline to become partners in expensive and useless proposals. Partnership, yes, but partnership involves independence of judgment and the sharing of agreed and not unreal risks.
It may be argued that the subject I have discussed has little to do with our financial problems. May I remind the house that last night the Minister of Finance himself said that the war in Viet Nam has produced the present world financial crisis. The war in Viet Nam is a product of over-reliance on military solutions. The very same thing applies to the way we use our resources in this country, and in relation to the management of our resources we should eliminate expenditures

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which do not make any particular sense. My colleague, the hon. member for New Westminster, has reminded me that the average cost of defence to every Canadian family of four is $360 a year. I suggest this is no trifle.
I urge that the government scrutinize our defence commitments and expenditures with the same rigour it would apply to any other expenditure. I urge the government not to allow our fiscal system and the direction of our resources to be distorted as they have been in the past by defence expenditures which make no sense. If they do not believe they make no sense, I invite them to look at the matter seriously, consult the people who know what they are talking about, and even to read what Mr. McNamara, who has until recently presided over these systems as secretary of defence in the United States, has said. If they look into the facts they will find that, under the conventional myth which we seem to adopt that defence is sacrosanct, we are wasting our resources in this field when they are urgently needed for economic growth. I do not believe we will put our financial affairs into reasonable shape in this country or, indeed, in the world until we stop devoting resources to building up military hardware under conditions where it is never likely to be used, a direction of resources which gives us only insecurity instead of the security we are aiming for.


Mr. Langlois (Meganlic):: Mr. Chairman, I do not intend to take too much of the time of the house on this matter. However, I do want to register my opinions concerning the new tax measures which the minister has brought before the house and the opportunity which they afford the government to recover some of its financial losses and to bring in any future measures they may contemplate.
There is one aspect of this whole matter which I should like to make clear, namely, that the Canadian people are wondering what is going on and what it is all about. They are more and more perplexed as the days go by and less and less enlightened about the situation as we try to struggle out of this financial strait-jacket. However, there is one thing of which the people are sure, that they have been following the guide lines set down by successive Canadian governments according to which they should invest in their own country and work as honest, submissive and good-natured citizens. This they have done.
We have stressed upon them the importance of economizing, of constructing homes and of contributing to the building of a great

nation. They have done so on the say-so of the Liberal administration and the preceding Conservative one. However, they woke up to the fact that they have been following the guide lines to the letter and that any mistakes that have been made have originated from this place and not from themselves. A great majority of them have been living on credit and those who have not found themselves without a cent to spare and with very small salaries on which to live. They have no means of counteracting the financial difficulties which beset them and cause them anxiety and insecurity. Yet they also know that they have followed to the letter the guide lines set down by the successive Canadian governments. They know that no one else can be blamed for the mess in which the country finds itself today but those who have their hands in the cookie jar.
What will the government tell the people who are the victims of its financial policies? Canadians are no farther advanced today than they were 30 years ago. In fact they have suffered a set-back. Well, you can fool some of the people all of the time and you can fool all of the people some of the time but you cannot fool all of the people all of the time. I believe this is what we are trying to do. The minister says the government is going to impose a 3 per cent surcharge on income tax for two years. I do not believe it will be for two years any more than I believe there will be a reimbursement of the corporation tax in two years. The government will say the people are used to it and while they will not put on another tax they will leave this surtax as it is. I feel certain that is exactly what is going to happen.
[DOT] (3:10 p.m.)
We seem to blame the municipalities, the provincial governments and everyone else for contributing to the high cost of living in this country. However, we forget to look in our own backyard. The minister knows quite well that the 3 per cent surcharge on corporations will affect consumer prices within one or two months after it is imposed. The cost of producing an article is reflected in the selling price of that same article. This is a vicious circle because what you collect on the one hand you have to give on the other in order to try to maintain stability. The surcharge on personal income will have the same effect. The only difference is that salaries go up by the stairway and the cost of living goes up by the escalator. There seems to be an imbalance here.
March 8, 1968

The Conservatives have criticized these measures but have not given any indication of how they would solve the problem. I just have to look back to 1957 and 1958 and the great visions of that time to realize how, since 1962, they have become the nightmares of the past. In 1959, when the right hon. member for Prince Albert was leading the Conservatives, he used to say that the country had a stable economy. I believe that is the situation today. I believe the financial problems can be blamed on the fact that certain financiers have been itching to speculate. I say that you are to blame for not putting them in their place. We are going to have to face up to this problem.
Last night on a television program a member of the government, a member of the official opposition and I were discussing the new proposals introduced by the Minister of Finance. I was asked exactly where the government could have picked up the revenue lost as a result of the defeat of Bill No. C-193. You do not have to be a wizard to do that. If the public accounts committee had met more often we would have been able to examine expenditures more carefully. I am not criticizing the fact that $400 million in waste or extravagance was found by the Auditor General. This amounts to about 5 per cent of the total expenditures on administration. I believe that every company finds that about 5 per cent or 10 per cent of its budget is being wasted. If we do not check this now, it will not be $400 million next year but $800 million. While we may not be able to regain the money lost we could at least reduce expenditures for the next year.
The Glassco commission did great work and its report cost a lot of money. The report has collected quite a lot of dust up to now. I am convinced if we search through that report we will find many recommendations that have not been implemented. I told one member yesterday that one statement in the Glassco report was that the federal government could save some money on the quality of paper used. The saving could amount to $1.5 million per year. I am quite certain that since the report was tabled there has not been a change in one sheet of paper used by the government. The hon. member for Lapointe and the hon. member for York-Humber during the question period this morning indicated their dissatisfaction with the disposal of certain assets from Expo. The hon. member for Lapointe stated that a loan had been made to Great Britain in 1946 carrying an
Income Tax Act
interest rate of 2.5 per cent. The deferred interest alone on that loan amounts to $85 million. The minister should see if he can collect some of that money instead of choking the Canadian taxpayer.
There is another $100 million in guaranteed reserves in the chartered banks of Canada, which is interest free. The government could collect another $5 million there which would be a help. The federal government is also aware of the hidden reserves in the chartered banks. If they are hidden reserves they are hidden profits, but the minister does not tax them. Can the minister indicate to me any other Canadian corporation that could legally have hidden reserves or profits and not pay income tax on them? Why have sour milk for one and sweetened milk for the other? If we are going to make people contribute to the expense of running the country we should not make one group contribute and allow others to go free. I would not think that the minister has very many alternatives, but if the Auditor General were given additional staff to make investigations perhaps he could find that more than $400 million had been wasted. I ask the minister to tighten things up a little bit and try to stop these leaks.
When the Bank Act was passed last spring the chartered banks were permitted to raise their interest rates on loans from 6 per cent to 7J per cent. This affected the cost of living. The argument at that time was that the finance companies were lending more than the chartered banks. I do not believe there has been much change in that respect. I have not seen any finance companies in any great difficulty since then. The only direct result one has been able to ascertain has been that the cost of living has gone up. When someone says that the way to solve the problem of inflation is to have more unemployment in Canada, then I say that is stupid. You will not solve the problem of inflation by having a higher rate of unemployment. The problem will only be solved by having more respect for the Canadian people and the Canadian economy.
[DOT] (3:20 D.m.)
We contribute greatly to external aid. This is good if we can afford it. But before we become involved with NATO, NORAD and such organizations or worry about the Chinese in China or Africans in Africa the minister should concern himself with the welfare of Canadians in Canada. He will have his hands full finding solutions to our own problems. This might hurt his campaign a little,

March 8. 1968
Income Tax Act
but I think he has a responsibility to the Canadian people. The function of the Canadian government is to take care of the business of Canadians and to solve the problems confronting the country in accordance with the needs and desires of the people. When that is done we can worry about a little external aid. In my opinion we should cut some of our present external aid. The minister should not use the excuse of a critical financial situation to squeeze the taxpayers a little more. The taxpayers are not in a position to be squeezed any more. They are going to start kicking, and I do not blame them.
Some radio commentators have been saying that perhaps le Ralliement is going to support the government on this measure, but as far as I am concerned they had better check their notes again. We have stated very clearly that we are against this tax, as we are against any other form of taxation. In my opinion the vote taken the other day had nothing to do with the tax itself, but so far as members of this party are concerned we are going to oppose this measure brought in by the Minister of Finance and we will continue to oppose such measures. I suggest that these commentators should get their facts correct because they can count on opposition from the members of this group on this vote.
I am trying to indicate to the government that although the minister tells the people to tighten their belts because we have to control inflation, measures such as this, as he knows very well contribute directly to rising costs and to inflation itself. As long as he maintains this attitude inflation will get worse.
The methods we have been using are those of the nineteenth century. They are methods that have led from one disaster to another. Therefore I suggest we should think about changing these methods to see whether or not there are other ways to meet the problems that face us. It seems that the government is reluctant to accept any simple solution, and the reason for this is that the situation today is complicated by their own manoeuvring.
This government reminds me of the scientists of the nineteenth century, which was about the poorest century in the matter of scientific development in the history of the world. For example, if your ideas did not accord with the members of L'Academie des Sciences you could be burnt at the stake. You just had to conform. The same thing applies to this government. They have developed their own spider's web. If somebody offers a simple solution that deals basically with the problem

the government will not accept it. They claim that the economists will not approve.
I have my own reservations about economists, Mr. Chairman. There are economists both in the eastern bloc and in the western bloc, but each group of economists has different ideas and solutions for tackling the same problem. In this house there are perhaps half a dozen economists and they do not agree about the same problems. They talk about hypotheses, and I have my own hypothesis in this regard. In the field of medicine doctors, whether they be in the U.S.S.R. or in the United States, tell us that the heart is on the left side of the body. That is a proven fact. But economic theories are as different from each other as black from white. That is why I doubt those theories. We should adopt an orthodox approach to our economic problems. We should just use common sense.
At the present time we are just the tail end of the United States economy as a result of the Viet Nam war. We know that when the President of the United States barks, we wag. Some day we must be independent. We must be able to stand on our own feet, depend on our own people and our own natural resources, and solve our own problems. Instead of being a tail light on an automobile we must be a headlight and see where we are going. When that day comes the Canadian people will have more confidence in the institution of parliament and their elected representatives. But it will not come until we change our methods and cease applying pressure to the Canadian people that they as well as us do not like. On behalf of the people we are going to oppose such pressures.
[DOT] (3:30 p.m.)


Winona Grace MacInnis: Mr. Chairman, I have sympathy for everyone here who has to stay and listen to this debate. I do not feel guilty in rising to speak since I have taken little time of the house since Christmas. The people of my riding sent me here to represent them and to talk on important measures. I believe this is one of those measures they want me to speak on and I intend to do so, no matter how inconvenient that may be for some hon. members.
A couple of mornings ago I heard a newscaster say that the Minister of Finance believed that parliament, after the recent defeat, understood it must act in a responsible manner. As I listened I said to myself, "Responsible to whom? To whom must we be responsible?" By his behaviour in the house
March 8, 1968

the Minister of Finance has consistently shown that he aspires to act in a manner that is responsible to the financial community of Canada. In other words, his actions and policies have been designed to win the confidence of Canada's financial community, and that is where we in this party part company with the minister and the government in which he is such a shining light.
Those of us who have been sent here have no particular mandate to represent the interests of this country's financial community, nor do we particularly want to win their confidence. We have come here because the people who elected us said, "Canada is rich with resources, technical know-how and men and women of varying ability. Through our government we must plan for these resources and make use of technical and scientific knowledge and skills in such a way that the needs of our people from coast to coast are met."
Surely that sentiment does not represent a pipe-dream? Surely it is not beyond the powers of a government in this country to achieve that dream. If the realization of this dream is proving difficult the reason for the difficulty is fairly plain to see. The financial community, in whose service the Minister of Finance is engaged, has never wanted the government to intervene in private business. Putting it more bluntly and coldly, this country's financial community has never wanted the government to interfere in any sphere where a profit was to be made. The financial community with its ally, the industrial hierarchy, felt it had a mandate to make any profits that were to be made in this country. It felt it had the right even to potential profits, and it felt that it had the right to keep some matters at a standstill until a profit could be made.
From the beginning the financial and industrial communities fought hard and intelligently against any so-called intrusion by government into the private affairs of private citizens. They fought against social security measures and they fought every inch of the way. I know what I am talking about. I was around when the original battle for old age pensions was fought in this chamber. The financial and economic hierarchies of this country have always felt that from their point of view social security legislation is undesirable, and here I am speaking of measures ranging from old age pensions to medicare, family allowances and the like.
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While delivering what I hope is the last body blow against medicare, that faithful servant of our financial community, the Minister of Finance, tried to frighten the daylights out of the ordinary taxpayer and the wits out of provincial governments by saying that huge amounts of new money would be needed to finance medicare. Because of such an attitude we have seen conflict arising in this house.
The financial and industrial elite have sedulously resisted every attempt by the government to provide goods and services to the public through public agencies. It has been claimed that private enterprise can provide those services. We claim that only those who can pay for exorbitant profits and prices very much beyond what ordinary people can pay can obtain many of such goods and services. To give modern examples of my meaning let me cite housing and drugs. If the government really wanted to bring competition to the drug industry and drive prices down so that ordinary people could afford prescription drugs, why could it not set up a public corporation to manufacture and distribute drugs? The competition from such a public body would soon drive down the price of prescription drugs. For years Connaught Laboratories have been supplying insulin at cost to those suffering from diabetes and this has been a great boon to those people.
The things I have suggested are not being done because, as the Bible says, you cannot serve two masters at once. This government, ably led by the Minister of Finance, has chosen to serve the masters of the financial and economic communities instead of common people. There is no mystery about the matter. When our economy gets into difficulties our financial and industrial hierarchies say that the people who can least afford to in this country ought to tighten their belts and bear the burden. We talk of the assault on the Canadian dollar. That assault is as nothing compared with the assault the Minister of Finance has made on the health needs of the Canadian people, tie was almost successful in having medicare ditched earlier this year.
We were not surprised by the introduction of Bill C-193. It imposed a 5 per cent surtax on income tax across the board and those who were mainly affected were those least able to bear the burden. Many of our people find it impossible to live under decent, modern conditions. A ceiling of $600 on the extra tax was imposed because the minister did not want the people in the higher income brackets

March 8. 1968
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to be hurt. The surtax bore heavily and relentlessly on the wage earners and low income people of this country. We in this party fought that proposal through every stage. We fought it until the measure was defeated not long ago. Now, in addition to asking us to accept other financial measures, the government asks us to accept a cut-back in industrial work.
[DOT] (3:40 p.m.)
When members from the west coast went home at Christmas they saw figures showing that the unemployment rate in British Columbia is almost twice the average unemploy-emnt rate for the rest of Canada. We were told at Christmas that in the various construction establishments on the west coast between 10 per cent and 25 per cent of the workers were unemployed, that in the manufacturing trades a similar percentage was out of work and that in the shipyards between 10 and 50 per cent were unemployed. This is not to be ascribed to seasonal unemployment. It is the direct result of cut-backs in the destroyer conversion program and related work which had been given to the west coast shipyards, or of the withdrawal of large public works in other fields.
Hon. members may have heard the latest example of this cut-back technique which is producing the very ailments that the government is so vocal about trying to cure. They may have heard that at Eskimo Point, a village with a population of roughly 400, the great killer among children, is meningitis, and that last year in a single 12-month period so many children died of this disease that had there been a comparable epidemic in Winnipeg 8,000 children would have died. Yet only a few days ago the government ordered cut-backs in the estimates of the Department of National Health and Welfare directly affecting the Eskimo population and, in consequence, the children of Eskimo Point.
I do not understand why we should suddenly listen when the minister tells us the financial people are concerned about the Canadian dollar and he has to merit their confidence by doing something to save it. Save the Canadian dollar for what? Save the Canadian economy for whom? This is what we want to know. Nobody would be more anxious than we would be to take conservation measures, fiscal and financial, if we could be sure the funds would be used so as to help those among the Canadian people who really need help. The hard fact is that despite all the government has been doing for the last

two years, unemployment has increased sharply. It is impossible to visit the ridings of members on the coast without meeting ordinary folk who tell us that their young people fresh out of training or out of school cannot get jobs.
The cost of living continues to increase. True, it went up by only a tenth of a point last month but it has been rising steadily until in January of this year it was 4J per cent higher than a year ago. The minister referred to housing. He said some improvement was evident. Last year there were 167,000 starts, 22 per cent above the 1966 figure. The hon. gentleman tells us that the minister in charge of housing says there will be 175,- 000 starts this year. He did not remind us of the figure which the economic council says we must reach if we are to keep ahead, namely, 190,000 housing starts this year. The position is that we are 15,000 starts behind, even accepting the minister's optimistic estimate. So the housing situation does not look very bright either.
Still looking at the housing picture, I point out that the minister said the increase in rents was undoubtedly due in part to higher property taxes, the higher cost of land and increased interest rates. He also said, and I quote his words: "but perhaps it is also because in many places landlords are in a strong bargaining position." Why does the government not do something about ordinary people who find themselves in the hands of landlords who are in a strong position?


An hon. Member:: That is a provincial field.


Winona Grace MacInnis: What is the use of a government which knows there is a shortage of housing, which admits that rents have increased to some extent because landlords are in a strong bargaining position, but whose members sit comfortably in their padded seats doing nothing to protect people from gouging landlords?
Electors in my riding are much impressed with what they see on television, the prestidigitation of the Minister of Finance-now you see it, now you don't-and the high-sounding language. But when it is all over they want to know when the government intends to do something about the cost of living, when it intends to do something about rents, and when it intends to take action to make decent housing available. They want to know these things. They want to know when the government will make up its mind whether or not to introduce medicare on July 1.
March 8. 1968

Scarcely a day goes by but I receive in my office letters from people in my riding who suffer from a common ailment. Their income is just not enough to go round, not enough to allow them a modern standard of living. These are people who live on old age pensions. Far from helping them out, the supplementary payment has placed them in a position where they are receiving less than the difference between what their old pension was worth and the rising cost of living. They would much have preferred $100 a month clear by a straight increase in the pension rather than a ceiling of $105 with a means test attached to it. There are veterans in our ridings whose pensions are just enough get them by. Their pensions are adequate to the point of sheer existence, but no more. When their wives, for example, want to go out and work for a few hours as waitresses or in some other occupation, the income allowed them under this new system is cut. The slight improvement in living standards for which they are hoping is denied them at every turn.
This government, and I say it seriously and advisedly, has mastered the art of reducing the living standards of the common people to an extent no previous government has been able to accomplish. Let that epitaph be recorded, because something tells me it will not be long before this government is buried underground and I hope this time it will be in that position for a long, long time.
What are we offered today? The Minister of Finance must have burned a good deal of midnight oil before he brought down this measure. I am under the impression that he, some of his officials and perhaps some of his cabinet colleagues sat down to try to figure out what could be done to draft a measure as close as possible to the bill which was defeated without actually getting ruled out of order or howled down, or both. The question which arose was: How can we draw up a measure which will offer a sop to all the opposition parties so they will vote in its favour and at the same time raise the revenue we need?
[DOT] (3:50 p.m.)
One does not have to seek for in this proposal to find the sop intended for the official opposition. The government decided they would offer a freeze on the number presently in the civil service. I do not know if they reckoned with the hon. member for Carleton or not, but probably there are one or two others in the Conservative party who feel a little uneasy about accepting a sop of that kind.
Income Tax Act
With respect to the N.D.P. they said, "We will offer two sops. We will cut down the amount of tax on individuals and introduce a corporation surtax of 3 per cent. We will give them the prices review board they are asking for. We will give it to them by name but not by actual board, and they will be just dumb enough to take it and think they have got the board they have been seeking." I say to the Minister of Finance that we are not falling for that sort of thing. We like the 3 per cent surtax on ordinary income a little better than the 5 per cent surtax originally proposed, but putting a little equity on top of a great inequitable tax structure is not going to buy us off. It is like putting a clean collar on top of a dirty shirt and hoping your coat will hide the shirt.
Over and over again we have said to the government that if it wants revenues it has been shown how to get them, and not just by us. It paid a great deal of money to get advice from the Carter commission on taxation, which has shown the government where it may collect money from wealthy corporations in the oil, gas and other fields. It has also shown the government how to build a much fairer tax base, taxing according to ability to pay. But the government does not want to get its taxes this way. Until we get the Carter report implemented, until we get equity, we are not going to fall for this kind of thing.
Nor are we going to fall for this review board sop. There are already signs that the minister wishes to bury mention of a prices review board. There is a tremendous reluctance on the part of the government to give us details as to this board. It will be a toothless wonder, just like the Department of Consumer and Corporate Affairs which gives protection only in small things. It gives no protection against rises in the cost of living.
This proposed review board apparently is to be a voluntary body, with representatives from labour and management. It will have no power to deal with the rising cost of living. It is the same as offering a bun to a burglar and hoping he will go away. Of course it is not going to work. The thing which makes it so hard to swallow is that on Wednesday the Minister of Finance said, as reported at page 7336 of Hansard:
It seems quite evident to me that our first priority in economic policy now must be to achieve greater stability in prices and costs.
If the government's first priority is to achieve greater stability in prices and costs,

March 8, 1968'
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then I feel sorry for its other priorities. Surely no stability can be achieved by means of a voluntary body which will periodically give advice on prices and wages, and I am certain it will be concerned more with wages than prices.
Surely it is time the minister began to think of acting in a responsible manner to the Canadian community as a whole from coast to coast. We need action on taxation, on the cost of living and on housing. I am pleased to see that the province of Quebec has become fed up waiting for a lead from Ottawa and has passed a rental control measure through its provincial legislature. I hope the other provinces will follow suit.
I hope too that the government will pay attention to the findings of the prairie commission on retailing, which urged a federal investigation. The facts and figures are not wanting. We brought them out in the prices committee. The government knows that excessive profits are being made. It knows that advertising is being used in many ways in which it should not be used.
Why does the government not take action? It knows there is need for action on unemployment. It is no use for members of the government to sit back and say: Let private business take up the slack. In 1932, when we had a really bad depression situation throughout the whole of this continent, members of the Canadian government sat back in padded chairs and hoped that providence or sun spots would do something about it. It took President Roosevelt to go out, get men and materials together and get employment going again. The banks were so grateful that for a little while they kept their mouths shut until he got employment going.
These are the things we need done. Our party is going to oppose this measure not only because it is inequitable but because without action on these other things it is perpetrating a fraud on the Canadian people. We want to see an over-all policy to build prosperity in Canada and we are not going to settle for anything less.


Mitchell William Sharp: Mr. Chairman, I do not intend to speak at any length. I would like to thank hon. members who have participated in the debate for their comments, and there are one or two points by way of clarification that I would like to make.
The first and most important point that I ought to answer immediately is to be found at page 7401 of Hansard for March 7, in the

speech of the hon. member for Nanaimo-Cowichan-The Islands when, dealing with the relationships between Canada and the United States, he said:
In addition to that we are going to help the United States in another curious way. We are going' to invest our entire holding ol United States dollars, apart from the necessary working balances, in United States government securities which do not constitute a liquid claim on the United States. What does this mean? It means that we are going to help the Americans with their balance of payment program by funnelling back to the United States American dollars which we earn either through exports or through various operations, and placing them in United States government securities which do not constitute a liquid claim on the United States, which will be neutralized, and which will be non-negotiable securities for an undisclosed fixed term.
In return for that, the United States, plus the central banks of Germany and Italy, will provide us with $900 million United States as a stand-by credit. Presumably when our transfer of funds to government securities in the United States reaches a sufficiently high level, we shall draw on this $900 million, and the process will continue indefinitely because this government will not take the fiscal steps that could be taken to get us out of this tangle.
I would like to say to the committee and to the hon. member that there is no connection whatever between the action that the United States took in exempting Canada from the balance of payment restrictions and the credits we arranged with the Export-Import Bank and the other banks in Europe. I would not want to leave on the record the inference that there was, because it might cause some misunderstanding in financial markets. While I know that the financial world reads my speeches, because its members must, I am sure they also pay attention to the speeches of the hon. member for Nanaimo-Cowichan-The Islands, who has some reputation as a financial critic of the government for his party. That was the main point I wanted to make, Mr. Chairman.
[DOT] (4:00 p.m.)
I should like to comment on the speech of the Leader of the Opposition who repeated a statement made in this house earlier by the New Democratic party about refundable corporation taxes. Let me repeat what I said were the reasons for refunding that tax now. As recorded at page 4908 of Hansard for that date I said:
Under the law, the payments must be refunded with interest not later than 36 months after they were due, or after they were received if they were late. They could be repaid as much as 18 months earlier if the government so decided. Consequently the amount collected-some $230 million
March 8, 1968

in all-must be repaid some time between today and June, 1970. Clearly it would be difficult to make repayment in the next few months, but I believe we should not put off the repayment entirely until the last possible date for that would add seriously to the burdens to be faced during the 1969-70 fiscal year. I believe the measure I have proposed in regard to corporation taxes will provide us with enough cash receipts to permit us to repay a substantial amount of the refundable tax during 1968-69.
I was referring of course to bringing forward by two months the payment of corporate taxes and I might add that my hon. friend supported this. The reason we put the other taxes on for two years is that the problems we face are not only problems of this and next year, they are problems of the year following. I have no hesitation in saying that I have not changed my mind about the time of the refunding or repayment of that refundable tax, because I do not want to be building up for 1969-70 the kind of problems that would result. I believe if the Leader of the Opposition would reflect on this he might come to the same conclusion.


Robert Lorne Stanfield: Without taking up too much time I just want to say to the minister that I have reflected on this and have not changed my mind, either.


Mitchell William Sharp: I thank the Leader of the Opposition for the fact that he has reflected on this. I am sorry he did not come to the same conclusion. Perhaps if he sat where I am and thought in terms of problems in 1969-70 he would have the same view.
I should also like to comment on the point made by the Leader of the Opposition about the so-called board of review. I listened with great interest to the speech made by that hon. gentleman and found myself going through the same sort of arguments he expressed when he was speaking. When he was talking about taxes he made two statements. First of all he said they were inflationary, because they would lead to higher costs or to higher wage demands. On the other hand he said they were deflationary because they would decrease the demand. This is a problem which faces all ministers of finance when they have to decide how to raise revenues. If you look at the present problem, as I am sure the Leader of the Opposition has, you have to see it all in one piece. The Leader of the Opposition suggested that we should only raise the taxes from corporations by speeding up their payments by two months. It seems to me that he thereby placed a great burden upon the review board which he believed
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might help restrain prices, wages and costs. I suggest to him that if we are going to have successful anti-inflationary policies we must have adequate fiscal and monetary policies to encourage restraint. It seems to me the hon. gentleman places far too great a burden upon the board in encouraging voluntary restraint and thereby endangers its success.


Frank Howard: Mr. Chairman, I think we have never had an opportunity to make a presentation to cabinet. Perhaps we should take this opportunity to say one word about a vitally important question which has been presented to this Minister of Finance and all his predecessors for the last 12 or 15 years. On each occasion with each cabinet minister there has been a successive intensity of deafness on their part of these problems. The hon. member for Comox-Alberni and the hon. member for Timiskaming are interested in this matter and have referred to it before.
I notice the intense look on the face of the Minister of Finance. I am not directing my remarks to him because he has ignored this matter before. I hope his colleagues in the cabinet will understand this problem and will bring some understanding to the government. The Minister of Finance may not be in his position much longer, for one reason or another.
Let me refer briefly to the necessity of providing some tax relief measures for industrial workers who must buy their own special clothing and equipment, and must maintain two homes in order to earn a living. Without repeating again who these people may be, let me say they are many in number and include loggers on the west coast who face considerable expense in respect of special clothing and must maintain two homes, one at the camp and one where they normally live. This is also true of many construction workers. If there is a persistence on the part of the government to ignore this legitimate plea for equity on the part of these workers, this simply underlines the fact that the government is not interested in providing the equity for these workers.


The Chairman:: The question is on the motion by the Minister of Finance. All those in favour of the resolution will please rise. All those against the resolution will please rise.
Resolution (Mr. Sharp) agreed to: Yes, 124; Nays, 101.
[DOT] {4:10 p.m.)


Herman Maxwell Batten: Order. I declare the resolution carried. Shall I report the resolution?

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An hon. Member:: How about another vote?


Lawrence T. Pennell: Mr. Chairman, I was paired. Had I voted I would have voted for the resolution.


Mr. Deputy Speaker:: Order. Mr. Tardif of the committee of ways and means reports a certain resolution and requests that they be granted leave to sit again at the next sitting of the house. When shall the report be received? Now?


Some hon. Members:: Now.


Mr. Deputy Speaker:: Mr. Sharp, seconded by Mr. Benson, moves that the said resolution be now concurred in. Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: On division.


Mr. Deputy Speaker:: Adopted, on division. When shall the committee have leave to sit again? Next sitting of the house? Agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Mr. Sharp, seconded by Mr. Benson, moves for leave to present a bill based on the said resolution, namely Bill No. C-207, to amend the Income Tax Act. Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: On division.


Mr. Deputy Speaker:: Adopted, on division. Mr. Sharp, seconded by Mr. Benson, moves that the said bill be now read a first time. Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: On division.


Mr. Deputy Speaker:: Adopted, on division.
Motion agreed to and bill read the first time.


Mr. Deputy Speaker:: When shall the said bill be read a second time? Next sitting of the house?


Mr. Starr:: Never.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Agreed.


Allan Joseph MacEachen: Mr. Speaker, I should like to call item 64, resuming consideration of the motion for the second reading of an act to amend the National Housing Act.
[The Chairman.]


Michael Starr: Mr. Speaker, we welcome this order of business. Our party would like to expedite this matter today in all its stages, and I hope that the private members hour will be waived in order that we may complete this bill today.


Some hon. Members:: Hear, hear.


Robert Jardine McCleave: Tell that to Benson, too, so that he understands.


Raymond Langlois: Mr. Speaker, I agree with this procedure as long as it is specified that if we waive private members hour it will be in order to go through with this legislation and no other, unless specified at the present time.


Michael Starr: Agreed.


NATIONAL HOUSING ACT
[Stage Direction]
The house resumed from Monday, February 19, consideration of the motion of Mr. Benson for the second reading of Bill No. C-202, to amend the National Housing Act, 1954.
Mr. Deputy Speaker:: The President of the Treasury Board.


Michael Starr: I hope the minister does not take too much time.


Edgar John Benson: Mr. Speaker, this is really a very simple bill. I realize that hon. members opposite wish to say some words about housing. They have indicated that they would like to proceed with this bill through all its stages before six o'clock, so I will simply explain that the bill allows for a reduction of the down payment on homes by increasing the 95 per cent limit upon which C.M.H.C. may make loans or guarantee loans from $13,000 to $18,000. Under the maximum loan provision the down payment will be reduced from $2,150 to $900.
The only question that may arise in the minds of some hon. members is why in part (ii) of each of the three subsections we include 70 per cent of the amount by which the lending value exceeds $18,000. The maximum amount to which C.M.H.C. may go is set by order in council. The inclusion of part (ii) in each of the subsections is simply in order that the governor in council may, after consultation with C.M.H.C., decide to increase
March 8, 1968



the total mortgage which is available under C.M.H.C. Central Mortgage can then do so, and lend or guarantee a loan to the extent of 70 per cent beyond the $18,000 to a new level which could be established in the future.
I hope that members on all sides of the house will support this bill in order that we may at least take this step toward helping to provide more homes for Canadians.


George Louis Chatterton: Mr. Speaker, we are naturally very pleased that the government has finally acceded to our request to bring this matter before the house. Yesterday I had telephone calls from contractors in various parts of the country asking why the opposition was holding up this bill. I would point out that the Prime Minister (Mr. Pearson) announced at the federal-provincial conference on December 10 or 11, I believe, that this was a proposal of the government, yet it was not until February 14 that the resolution appeared on the order paper. I therefore want to say categorically that not only do we not accept any blame for the delay, but we have urged the government to bring this matter forward; and as our house leader has said, we intend to co-operate by putting the bill through all its stages this day.
Although this is a relatively uncomplicated amendment it does give us an opportunity to deal with a question with regard to which we feel the government is very vulnerable. The minister responsible for housing is not here at the moment, but I hope he will take sufficient interest later to read what we have to say about this matter. Clearly, even on the admission of some hon. members on the other side of the house, the housing policy of this government is in a mess. I quote from the Montreal Gazette of February 17. This article bears the headline, "Hellyer Lashes Housing Policy As 'All Wrong' ", and is as follows:
[DOT] (4:20 p.m.)
When it comes to housing, the federal government is doing "all the wrong things," transport minister Paul Hellyer said yesterday.


Paul Theodore Hellyer: Mr. Speaker, may I rise on a question of privilege to say that this quotation was slightly out of context. What I said was that governments do all the wrong things and that there was room for improvement in the co-operation between government and industry at all levels. The federal government was not singled out in any way, and I am sure my hon. friend would want to make that correction.
National Housing Act


George Louis Chatterton: I am sure that if the minister were honest with himself, he would admit he would have liked to say what the newspaper quoted him as saying. I believe the Secretary of State for External Affairs admitted as much when he made a speech in London a few weeks ago.
As I said, I think the government is vulnerable with respect to its housing policy, but in view of our anxiety to co-operate and to put this legislation through in a hurry, I will reserve the comments I intended to make until the supplementary estimates come before the house.
The one point I want to make is that the resources of this government are so bankrupt that the only thing they can do to improve the housing situation is to reduce down payments. We are completely in favour of this proposal, but I should like to point out that it does not help those Canadians who really need help. I have worked out figures which show that for a person to obtain a loan of $18,000, which is about what is required today to build a house and to pay for the land, he would have to earn at least $8,000 a year.
The fact of the matter is that the provisions of the National Housing Act today are of no value to two thirds of the Canadian wage earners. They are excluded because of the high cost of financing, which is largely a result of the policies of this government. Just to reinforce my argument, may I point out that in 1965, of all N.H.A. loans that were made, only 9 per cent were made to people who earned less than $5,000. In 1966, of all N.H.A. loans made, only 4.8 per cent were made to those with a family income of less than $5,000. Last year, in 1967, only 1.4 per cent of all N.H.A. loans were made to people with a family income of less than $5,000.
Truly, there is a great gap today in the legislation in Canada to provide housing for the average Canadian of average income. I admit that legislation dealing with low rental housing is reasonably good. However, improvements can be made to it, and the time will come when we will improve it.
I think the main fault here lies with the provinces and municipalities. In this respect I give credit to the province of Ontario which has done more than any other province in Canada. But it is the people between that group and those earning more than $8,000 who today cannot be helped by the national housing legislation. I submit this is a problem

March 8. 1968
National Housing Act
to which the government of Canada will have to put its mind. We cannot go on indefinitely providing houses only for those earning an income above $8,000. The time is not far distant when that particular housing market will become saturated. Yet, those people earning less than $8,000 a year cannot qualify for N.H.A. loans simply because under the N.H.A. regulations the gross debt and service charges shall not exceed 7 per cent of their gross income. For a man earning $20,000, the 27 per cent of his income is not too much for housing, but for a man earning $4,000 or $5,000 that 27 per cent of his income is too much for housing.
I should like to quote from the publication called "Municipal Affairs" of February, 1968, published by the Canadian Federation of Mayors and Municipalities, where the following is said:
The government recently announced a substantial Increase in the amount of government funds to be allocated in 1968 to public housing. The public was advised that this larger subsidized rental housing program was being achieved through a reduction in the amount to be available for direct lending to the speculative builder market.
What becomes very apparent as a consequence of these two recent government moves, is that subsidized rental housing or substandard housing will now be the only housing alternatives for many thousands of low and middle-income Canadian families. There can be no doubt about this, for how can a family with an annual income of less than $8,000 hope to finance a twenty-five year mortgage at eight and five eighths per cent, taking into account the current costs of home construction, the cost of land, and the effect of the 11 per cent federal sales tax plus the appropriate provincial sales tax rate on building materials.
On two counts, these alternatives are unsatisfactory. Firstly, the number of public housing units currently available or shortly to become available falls far, far short of even current needs for low-income families, let alone middle-income families. Secondly, the rental rates that apply in public housing schemes are geared to income, and current income/rent schedules disqualify middle-income families from this kind of housing. Simply put, this means that the only solution to the housing problem of many Canadian famiiles is an inordinate level of personal debt.
That comes from a publication of one of the most responsible and well informed organizations in Canada.
As I said before, I will reserve for a later date some of the remarks that I intended to make. I will conclude by saying that we support this measure, and I submit to the fiovern-ment that the time has come when the maximum amount of loan should also be increased. The recommendation of the Canadian Home Builders Association is that it be increased to $24,000, and it can be done by order in

council. I would urge on the minister that he give serious consideration to this.
Although it will not help the group of people whom I have described, earning less than $8,000, it will help a great number of other people. We also have to keep in mind of course that all this money comes from the private sector and none of it comes from the government, therefore I do not think there should be any objection to increasing the amount.
[DOT] (4:30 p.m.)


Mr. John Gilbert (Broadview):: Mr. Speaker, the members of the New Democratic party give a reluctant support to Bill No. C-202, which merely increases the ratio of loans from $13,000 to $18,000. It is striking example of Mohammed going to the mountain and bringing forth a mouse. The government's assistance is merely a band-aid assistance and does nothing to solve the vital and most critical social problem which we are facing in Canada today. It does nothing to solve the problem of the high cost of housing, the high interest rates and the critical shortage of homes. These are matters which should have first attention from the governments.
We have realized for a long time now that there was a need for a new minister of housing. Since I have been here, the standing committee on housing and urban development has not met once. In view of the serious shortage in housing, one would have thought that this standing committee would have met and come to grips with the problem, and would have invited representatives of the housing industry to express their views with regard to this problem. The former minister in charge of housing travelled across the country on a housing symposium, getting ideas from the housing industry, but he failed to table any of the facts he found or to refer them to the housing committee.
Then we had a federal-provincial conference in December at which little or nothing was accomplished as a result of bringing forth representation from the provinces and the federal government. Housing starts in 1965 numbered 165,000; in 1966, the figure was 134,000 and it appears that in 1967 we will be back to about 160,000. In the light of that record, the government has changed ministers. We in this party were looking forward to some great steps being taken by the new minister because we appreciated his accounting background. We thought he could solve some of the financial problems that are
March 8. 1968

attendant upon housing. In addition, we thought he had a concern for people.
What has been the record of the new minister thus far? Well, first he introduced this minor change which is contained in Bill No. C-202 to increase the loan ratios on government insured loans. Second, he has given an indication that he will remove the interest ceiling on N.H.A. loans which now stands at 81 per cent. This is his second approach to the problem. Certainly he must appreciate that, at the moment, conventional loans are 1 per cent above N.H.A. rates. What he is really doing by removing the ceiling is adding to housing costs.
Third, he made a change in the regulations with regard to the locked in provision of mortgages to developers of rental projects in connection with the prepayment of mortgages for as long as 25 years. He also expressed the intention of the government to participate chiefly in public housing, thereby leaving other fields of mortgage financing to conventional lenders. His last endeavour thus far has been a target of 175,000 homes, when in fact the Economic Council of Canada calls for a minimum of 200,000 homes made up of 190,000 new homes and 10,000 to replace older homes.
This is what he has done thus far. None of these measures strikes at the heart of the housing crisis in Canada. These moves indicate a lack of leadership in working with the provinces to assess housing needs and in giving financial assistance to fulfil those needs. There is an indication the government is abandoning the idea to set up an advisory committee on housing and urban development composed of representatives of federal and provincial governments. This idea was not well acccepted by the federal-provincial conference. The premiers of the different provinces, however, indicated the necessity for the heads of housing authorities to meet on a regular basis with the minister responsible for housing.
These measures indicate the government's dependence on institutional lenders to finance home building in Canada, in spite of their performance in the last four years. Incidentally these lenders, after having restricted their investments in housing, after having directed their moneys into shopping centres, luxury hotels and apartments, and in some cases after having transferred some of their moneys to the United States to be invested in United States equities, have now succeeded in telling the government this: If you give us a
National Housing Act
higher interest rate and restrict yourself to public housing we will invest the savings of the Canadian people in housing. This is the price we have to pay. This is the accepted approach by the government to solve the problems of housing.
I should like now to direct my attention to the changes brought about by the legislation proposed by the government. What does this legislation do? It will probably benefit the would-be home owner in the small urban centre where the cost of a new house would likely be between $13,000 and $19,000. The change in the loan ratio would make a difference I suggest of $1,500 in the value of the loan. This is just like giving a peanut to a starving elephant.
These are the only people the proposed changes will help. However, these people need help and the government has placed us in the position of having to approve this legislation. Second, the government has given a clear indication of its approach to housing. It has said it will participate only in public housing and will leave to the lending institutions the problem of financing housing in Canada. These are the only two things this legislation accomplishes.
What it does not do, Mr. Speaker, is that it does not help the people who live in the large urban centres where values sometimes range over $25,000. At this price, the gap between the mortgage loan of $18,000 and $25,000 or more is too great. The buyer with a small down payment is forced into secondary financing at interest rates of 12 per cent or 15 per cent. For example, Mr. Speaker, the average price of a single dwelling house in metro Toronto as of January 31, 1968, was $34,869. This represents an increase of $5,200 in one year. Three years ago, the average price was $21,914. We are faced with inflation in astronomical proportions. Any decision to lower the ratios here does not help the buyer in large urban centres.
Second, this legislation does not help to reduce land costs. In Toronto a 50 foot lot costs at least $10,000. Land costs there are the highest in North America and have increased by 500 per cent in the last ten years. I might say, Mr. Speaker, that this condition prevails right across Canada. The Ontario government collected land for Bramalea at a cost of $6,800 per lot and then marked those lots to $9,000 plus. This indicates that even the Ontario government is taking little or no action to limit increases in the cost of land.

March 8, 1968
National Housing Act
This legislation does nothing to increase the supply of houses. In 1965 we had 165,000 starts; in 1966, the figure was 134,000; in 1967 it was 160,000 and in 1968 the projected figure is 175,000. As I pointed out, the Economic Council of Canada states that 200,000 homes should be the minimum target for housing,
190.000	new homes and 10,000 for the replacement of older homes. If we accept the target of the new minister, we will still fall far short of the requirement for new houses in Canada. When you think of the shortage created by the difference between 134,000 and
190.000	in 1961 and a shortage of 30,000 in 1967, you realize that we would have to build between 250,000 and 300,000 homes to begin to catch up with the housing shortage in Canada.
This legislation does nothing to bring down the high interest rates under the National Housing Act, rates that have ranged in the last ten years from 5J per cent to 8f per cent. The rates on conventional mortgages have ranged from 6 per cent to 9.5 per cent. As was pointed out by the previous speaker, to qualify for the maximum loan of $18,000 an applicant must have an income of at least $8,400 per year. On other occasions I have pointed out that $18,000 at 8| per cent will give a total of $45,000 before the mortgage is paid up. Is it any wonder, Mr. Speaker, that the average family writes off the possibility of owning a home under these circumstances? [DOT] (4:40 p.m.)
This legislation does nothing to bring down the cost of a home. No mention is made by the minister of any steps that he might take to do away with the federal sales tax of 11 per cent. The minister probably attended the federal-provincial conference and heard the recommendations of the different provinces to the effect that elimination of the 11 per cent federal sales tax would probably be followed by the elimination of the 5 per cent provincial sales tax. The money saved thereby could go toward the down payment on a home. However, the minister has done nothing to bring this about.
The legislation does nothing to assist persons to build homes under a co-operative scheme. The maritimes and Newfoundland delegates to the federal-provincial conference were practically scoffed at when they suggested that people should be helped to build homes under a co-operative scheme. This appears to be the approach of people in the maritimes and in Newfoundland to solving

the critical housing problem in that area of Canada and they should be assisted by their government.
The legislation also does nothing to assist the construction of shell housing, another recommendation made by provincial representatives at the conference. Many people would like assistance to enable them to build the foundations and walls of a shell home by means of a government mortgage, using their own savings to complete the home. But nothing has been said by the minister about shell housing, which would also help solve the critical housing shortage.
The legislation does nothing to assist people who have to pay high rentals and are given no protection. This is why we in the New Democratic party are bitterly disappointed at the approach of the new minister of housing to the serious housing problem today. We give only reluctant support to this small measure that has been brought forward.
The minister might well say that the New Democratic party should put forward some corrective measures. We would do so, Mr. Speaker. The first thing we would do would be to make available at least $1.5 billion to finance new housing in Canada. When one realizes that we have spent $2 billion-which is $2,000 million-on defence and it looks as though this year the amount for housing will be considerably below that spent last year, one is bitterly disappointed at the approach of the minister toward this problem.
Second, Mr. Speaker, we would limit N.H.A. interest rates to 5 per cent. We would subsidize the difference between this and the current chargeable rate on homes up to at least $25,000 in value. This is an approach which would cut the cost of the home. The cost to the government would be minimal and the savings to the average home owner would be of great help.
Third, Mr. Speaker, we would enact a tenants bill of rights which would give them some protection against the treatment now being accorded them by landlords in large centres. The minister might argue that this is a matter for the provinces. If he does I think he should be reminded that he should work with the provinces to develop this code, and that he should accept the advice given at the federal-provincial conference constantly to work together with representatives of the housing authorities to bring this about.
Fourth, we would set a minimum target of at least 200,000 homes a year. This would be
March 8, 1968

an attempt to solve the critical housing crisis we are facing today. We would also encourage limited dividend housing for senior citizens by increasing the mortgage available to 95 per cent of the value of the home. This area has been neglected during the past few years and it is about time that the government took some initiative to encourage this sort of housing.


Mr. Schreyer:: And not only in Montreal and Toronto.


John Gilbert: My colleague reminds me that this type of housing should be available not only in big cities such as Montreal and Toronto, but also in small towns and villages.
We think the government should participate more fully in public housing by increasing the mortgage ratio from the present 75-25 per cent ratio to a 90-10 per cent ratio. This recommendation was made by representatives at the federal-provincial conference. It is about time that the minister took immediate action to solve the problem of public housing. One cannot expect a municipality to participate on the basis of a ratio of 75-25 per cent. Not only is the ratio too high but they have other requirements, such as building schools and recreational and other facilities. We also feel that the public housing subsidy should be tied to income rather than to the present formula of 50-50.
The present 75-25 per cent ratio to a 90-10 per cent ratio.
We would also encourage, Mr. Speaker, massive purchases of land. This was a recommendation made by the Prime Minister (Mr. Pearson) in his statement to the federal-provincial conference. This action must be taken by federal and provincial governments in order to bring down the high cost of land.
Finally, Mr. Speaker, we would also increase home improvement loans. The record of home improvement loans in the last few years indicates that these loans have been declining. The reason has been that people have not felt inclined to borrow money from the banks under the Home Improvement Loans Act. It may be that some arrangement could be made with the municipalities whereby home owners borrow money for improvement purposes and add the repayments to their tax payments each year. It is fairly obvious that under the present home improvement scheme, with the banks administering and financing the land, things have not worked. I suggest the minister give close study to some arrangement between the
National Housing Act
municipalities and the government under which money made available to the municipalities could be lent to home owners to improve their homes, the repayments being added to their tax.
These are some of the corrective measures that we would take, Mr. Speaker. We hope the "band-aid approach" of the new minister will be altered and that he will apply his mind and his energy to solving the critical housing shortage in Canada. If he does, he will probably make a name for himself in the cabinet and across the country. If he does not, then the minister will fall into the political wastebasket that so many other cabinet ministers have fallen into when it comes to solving the housing crisis in Canada.


Gérard Laprise: Mr. Speaker, I would like also to say a few words about that bill which I support with some reluctance, without however being against an increase in the loans made or guaranteed by Central Mortgage and Housing Corporation. I feel that this increase to $18,000 was needed, because houses costs more and more to build and rents keep going up.
In my opinion, it is mostly for that reason that the minister agreed to introduce that amendment to the National Housing Act, but at the same time that justifies the criticism directed at the present government in the last few years by the Canadian public, the contractors and the eventual homeowners.
We notice a steady increase in the cost of houses, building materials and, consequently, rents. Housing is the main factor responsible for the increase in the price index, in the cost of living index. We have just completed a debate on that subject, and the rise in the cost of living has forced the government to take a position which, in my opinion, will not solve the problem. The Minister of Finance (Mr. Sharp) saw no other solution to fight inflation, and the increase in the cost of construction comes precisely into that price index which compels the government to take action and stabilize prices.
Therefore, Mr. Speaker, I should like to analyse briefly the causes that contributed to rent increases.
One of the most important is precisely that 11 per cent tax on building materials which seems even more significant than it appears. When an individual has a house built or purchases materials to improve the one he

March 8. 1968
National Housing Act
already owns, in most cases, he has to get a mortgage from an approved lender of the Central Mortage and Housing Corporation. He must also borrow the 11 per cent tax on building materials for his house. Now, the interest on that loan has reached 8J per cent. This also means that the individual who decides to make repairs to his house will have to pay during 25 or 30 years an interest of 81 per cent on the 11 per cent levied on building materials.
[DOT] (4:50 p.m.)
There is also another important fact and those who live in Quebec are aware of it. We also have in the province of Quebec an 8 per cent sales tax which is added to the federal tax, because it is computed when the amount of the federal tax of 11 per cent has been established. This means a 20 or 21 per cent tax on building materials on which an individual will have to pay 8| per cent interest. Therefore, this is a scandalous item which increases considerably the cost of housing. I contend that, by removing that tax as was done a few years ago, we would considerably reduce the cost of housing and the minister would not have to put before us this amendment to-day.
In housing, the increase of municipal taxes, and mainly school taxes, must also be taken into consideration. As far as the province of Quebec is concerned-I do not know exactly what happens in the other provinces-school taxes increase at a rapid pace and there is no way of stopping it, at least at the present time. Taxes increase the cost of housing and prevent the average wage-earners from becoming homeowners. Some have made great sacrifices to make the down payment on the purchase of a house; they have paid their monthly instalments during a few years and if they are out of work for the shortest period on account of sickness, accident or other circumstances, they find themselves in an unbearable situation, and they are often forced to give back the house for which they have remitted $8,000, $15,000 or $20,000, because they cannot meet their payments.
Mr. Speaker, as I see it, we have the right to expect from the government a better housing policy, because it is becoming increasingly difficult for those in the middle income bracket to purchase a home. That is why many people are undecided when the time comes to decide whether they should purchase a home or resign themselves to living in accommodation that belongs to others. One

wonders if they are not right in deciding to continue renting, because homeowners, in addition to what I mentioned a while ago, must take fire coverage and pay premiums which keep growing from year to year, and also attend to the maintenance of the house, to keep it in good condition.
And so, one realizes that today it is almost as costly to own a home as to rent one.
I think that the minister and the government should consider ordering as soon as possible a complete revision of the National Housing Act, for the benefit of both owners and tenants.
This amendment to the present act will certainly help some potential owners by allowing them to borrow more money, since the price of houses is going up. But even this will not solve their problems, far from it. It is perhaps a temporary solution but, sooner or later, these people will encounter even greater difficulties.
I admit frankly, Mr. Speaker, that I will vote in favour of the amendment proposed in the present bill.
I would have much preferred the minister responsible for Central Mortgage and Housing Corporation to suggest another way to make things easier for those who want to own their home.


Mr. Speaker:: Order, please. Is it the wish of the house to proceed with private members hour at this time?


Edgar John Benson: I believe there was general agreement that we should continue with the legislation, get it through, and then perhaps revert to private members business.


Mr. Peters:: If we continue with this business and then call it six o'clock, that will be all right; but not the other way around.


Edgar John Benson: Could we complete this business and then call it six o'clock?


Mr. Speaker:: Is it so ordered and agreed?


Michael Starr: Agreed.


LABOUR RELATIONS
Hon. J. R. Nicholson (Minister of Labour):: In rising at this time before other business is called I beg the indulgence of the house to ask
March 8, 1968

for unanimous consent to revert to motions so that I may table the final report of the board of maritime trustees. I thought hon. members of the house would like to have it with them over the week end. I have arranged for distribution of the report. Technically, it should be tabled in the house before being distributed.


Michael Starr: Mr. Speaker, could we not leave the matter until Monday, on motions?
[DOT] (5:00 p.m.)


John Robert (Jack) Nicholson: I am suggesting it because there is nothing further to be said on the subject and I should like to distribute it over the week end when it might be put in the mail boxes.


Michael Starr: Very well.


Mr. Speaker:: Is it agreed that we revert to motions to allow the minister to table the document to which he referred?


David Lewis: Without a word.


Some hon. Members:: Agreed.


Mr. Speaker:: Does the minister have leave to table the document?


Some hon. Members:: Agreed.



BUSINESS OF THE HOUSE

Mr. Knowles:: Could the leader of the house take advantage of this moment of interruption to tell us what the business will be for next week?


Allan Joseph MacEachen: On Monday we shall take the second reading of the tax bill, and the committee stage. We would then continue with supplementary estimates and interim supply.


Stanley Howard Knowles: What about third reading? Monday night?


Some hon. Members:: Oh, oh.



NATIONAL HOUSING ACT


[Stage Direction]
The house resumed consideration of the motion of Mr. Benson for the second reading of Bill No. C-202, to amend the National Housing Act, 1954.
Mr. Bert Leboe (Cariboo):: I shall detain the house for only a few moments because I do not consider that this simple amendment is a
National Housing Act
suitable occasion for a long speech on housing. We agree with the proposal which stipulates an increase in the amount available for mortgages and we shall support the move in this direction. I should like to leave one or two thoughts with the minister. I think it is time we all came to the conclusion, as we in the Social Credit party did many years ago, that financing in connection with housing should not be in competition with financing for industry. Industry can pass on its finance charges to the consumer, and this being the case it is in a much better position to bargain for finance than are people building houses. The purchaser of a home is simply buying a bill of expenses from the time he does so until he disposes of it. The home owner is therefore at a distinct disadvantage.
Surely we should reach the conclusion very quickly that funds for housing ought to be quite separate from any funds available to industry. In recognition of the special position of home owners and the value of home ownership, British Columbia many years ago instituted a home owners grant. It started out as a very small sum, $25 I believe for each home owner. Today it is $120-$130, my hon. friend tells me. The first $130 of an individual home owners taxes are paid by the provincial government.
It would be wise, in my view, to take the position adopted by the Social Credit party before the committee on banking and finance back in 1954, and set up a proper revolving fund to handle the needs of the housing industry. I think this would go a long way toward solving our housing problems. The money should be made available to home owners at the cost of operating the account and there should be no relation whatever between the interest rate charged and the rate charged for commercial loans. We believe the account could be handled with a rate in the neighbourhood of 2| per cent. Not only would we have a fund operating at a low interest rate, but we would be in the happy position of administering a fund which remained at a constant figure.
We have seen interest rates rise to astronomical heights-and not one more house has been built as a result. May I urge the government and the minister to take a good look at the possibility of setting up a revolving fund which would not be in competition with industry and which would be operated at the cost of handling the account quite distinct from prevailing commercial interest rates.

March 8. 1968
National Housing Act


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Batten in the chair.
On clause 1-
George Louis Chatterton: Could the minister explain to the committee at what point after royal assent this new low down payment will apply in the processing of applications?


Edgar John Benson: We shall apply it as soon as we possibly can after royal assent. There always is difficulty in sorting out applications as to which are in time, and which are not. Now that the bill has passed second reading, and we hope it will shortly pass through parliament, we shall try to set a date as soon as possible after the legislation becomes effective.


George Louis Chatterton: That is not quite the point I was trying to make. The applicable date will of course be immediately after royal assent. The contractors are anxious to know at what stage in the processing of applications the low down payment will apply. If the minister is not able to give us this information now, perhaps he will issue a statement as soon as possible after royal assent.


Edgar John Benson: I have discussed this matter with the officials of the Central Mortgage and Housing Corporation and they have it under consideration. There always is a difficulty in connection with the exact time, when something is done in stages, but I will undertake to issue a statement in this connection at the earliest opportunity.


George Louis Chatterton: I know that a change of this type always creates difficulties. May I suggest that when a decision has been made as to the point at which the decision will apply, the hon. gentleman leave room for an appeal to the minister. I have found there are always special cases in which special consideration is required.


Edgar John Benson: I should like to assure the hon. member that as long as I am minister anyone may appeal to me at any time when it appears he is being unfairly treated under legislation for which I am responsible.
[DOT] (5:10 p.m.)


Mr. Enns:: That gives rise to another question. The minister says this will be so, as long as he is minister. There may be an imminent change in government, and without reflecting on the abilities of the minister may I ask
[Mr. Leboe.l
whether this will be written into the regulations?


Edgar John Benson: Mr. Chairman, I will bring these representations to the attention of the officials of C.M.H.C., who want to administer this fairly, and I will make sure regulations are drawn up so that we will know the exact time of the cut-off. I will even show my hon. friend a copy of them before we publish them.


John Gilbert: Would the minister give us some details with regard to the differences in loan ratios? I understand the difference at best is only $1,500. I would like the minister to give us a few examples of how these changes would affect a mortgage loan.


Edgar John Benson: Mr. Chairman, I do not think I can be expected to make calculations in committee, but this means that on mortgages up to $18,000 we will be able to lend 95 per cent of the mortgage value. The previous level was $13,000, so the great benefit is in the area between $13,000 and $18,000.


Almonte Douglas Alkenbrack: May I ask the minister if this applies to new housing only?


Edgar John Benson: Yes, Mr. Chairman, this is for new housing.


John Gilbert: Can the minister give us some details of the anticipated amount of money the government will be spending on housing this year as compared with last year?


Edgar John Benson: I do not have those figures in front of me. My hon. friend knows that we are concentrating on certain areas such as public housing, urban renewal, sewage, student residences, homes for the aged and limited dividend housing. I should point out to my hon. friend that we have had a great many applications for limited dividend housing projects, probably more than we will be able to facilitate this year.
We are looking into these applications and we will make sure that the projects are spread across the country. They will not all go to Toronto and Montreal, as someone suggested earlier. The total amount of money that we are making available in these areas is in the neighbourhood of $650 million. Present indications are that housing starts this year will reach the 175,000 level, that is, basic residences, rental residences and dwellings. On top of this we anticipate that there will be another 10,000 or 12,000 units covering university residences for married couples and single persons, and hostel accommodation for
March 8, 1968



elderly people. From this point of view and at this time, this year looks as though it will be pretty good for housing. But that does not solve all the problems.
If we were going into a lengthy debate I would like to deal with some of the ideas that my hon. friend has raised. I am also informed that we will be able to reach the economic council's objective of 585,000 homes to be built over the next three years. I think we can do this, but as I said earlier, this would not solve all the housing problem. It would not solve the main problem, the one I am particularly concerned with, and that is how we provide a house for the fellow earning between $5,000 and $7,000 a year. I have given my ideas on this subject when speaking outside the house, and I look forward to mentioning them in the house on a future occasion.


George Louis Chatterton: Can the minister assure us that the $75 million reduction to which the Minister of Finance has referred will not come from money that is to be spent on public housing?


Edgar John Benson: None of this will come out of public housing.


Mr. Germa:: Mr. Chairman, I was interested in the minister's statement that there had been an increase in applications for limited dividend housing. Are these applications coming from the private sector or from non-profit organizations?


Edgar John Benson: These are mainly coming from the private side. A limited dividend corporation is a separate corporation created to build housing units for rental purposes, on which the returns to the owners of the corporation are limited to 5 per cent. There are certain tax advantages in them, and they are mainly built by people who are in the contracting business or housing rental business.
There is no limit on the funds we have available for organizations that want to build low rental homes for the elderly. We anticipate we will have all the necessary funds available for this kind of housing this year, and we also think that in the public housing field our funds will be quite adequate.


George Louis Chatterton: Will this apply to student housing also? There will be enough money to cover any applications that come in?


Edgar John Benson: I think there will be no problem. I base my estimates on the forecasts given me by the officials of C.M.H.C., and they foresee no difficulty.
National Housing Act


John Gilbert: Would the minister tell us if the government has abandoned the idea of setting up a federal-provincial council on housing and urban development?


Edgar John Benson: Mr. Chairman, I would like to indicate that this idea has not been abandoned; but I have not been the minister responsible for housing for too long a period of time. This is one of the things I have been considering with the officials of C.M.H.C. and with my advisers.


Siegfried John Enns: Mr. Chairman, the minister spoke about not wanting to make detailed calculations on how this legislation would apply to specific cases, and we can appreciate this. However, I think it should be pointed out that although additional moneys will help substantially to improve the housing situation, the average citizen will still encounter difficulty in view of current high interest rates.
Payment of interest and principal on a $14,000 loan over a 25 year period at 6 per cent would be $89.85 monthly, which is a reasonable payment for accommodation. At 7 per cent this rises to $98.06. At 8 per cent it rises to $106.85, and at 9 per cent, which is the rate at which we are selling money at present, it rises to $115.92, which in many cases is more than 25 per cent of a person's income.


Melville Carlyle Germa: I wish to ask another question concerning limited dividend housing. I think it is pretty well known that limited dividend housing fell on its head because of certain indiscreet acts by the private sector a few years ago, whereby these projects were abandoned because private individuals tried to maximize their profits through various nefarious means. Has the minister anything to offer which will guarantee that the same situation will not happen again?


Edgar John Benson: Mr. Chairman, we are looking very carefully at the applicants for limited divided housing construction. We are trying to assure in every way that the C.M.H.C. can be certain there will be none of this business of building a limited dividend project, getting your profit out, and leaving it. We will do our utmost to avoid this, and my officials assure me that they believe they can avoid it under present circumstances.
e (5:20 p.m.)


John Gilbert: In view of the intended amendment in respect of the change to the

March 8, 1968
National Housing Act
loan ratio of mortgages, does the minister intend changing the ratio from that under the N.H.A.?


Edgar John Benson: That is not proposed in this particular piece of legislation. I should like to assure my hon. friend that this is under consideration at the present time, and that when I bring in some more comprehensive changes to the National Housing Act, I hope during the next session of parliament, consideration will be given to this matter.


[Stage Direction]
Clause agreed to.
Title agreed to.
Herman Maxwell Batten: Shall I report the bill.


Some hon. Members:: On division.
Bill reported and read the third time and passed.


Mr. Deputy Speaker:: Do I understand there was some prior agreement to adjourn when this particular item was completed?


Stanley Howard Knowles: Vous avez raison.


Edgar John Benson: I believe it was agreed that when we finished this piece of legislation we would call it six o'clock.
It being twenty five minutes after five o'clock, by unanimous consent Mr. Speaker adjourned the house, without question put.

Monday, March 11, 1968