1968-10-16

THE BUDGET


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I wish to table copies in English and in French of the usual budgetary papers. I would ask the consent of the house to have the papers printed as an appendix to today's Hansard.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's Note: For text of papers referred to, see appendix A.]



QUESTIONS

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

Mr. Caouette: Is the government taking any measures to provide an official French version of the British North America Act and, if so, when will such version be available?


Hon. John N. Turner (Minister of Justice):: While there is in use in Canada a generally recognized and accepted official translation of the British North America Act passed by the Parliament of the United Kingdom in 1867, an official French version of the original Act of 1867 could, under the present constitution of Canada, only be provided by formal legislative action on the part of the Parliament of the United Kingdom. This would apply equally to the various amendments to the Act from 1867 to the present, except, of course, those amendments that by virtue of head 1 of section 91 or head 1 of section 92 may be enacted by the Parliament of Canada or by the legislatures of the provinces without recourse to the United Kingdom Parliament.
29180-'76$
Thus the amendment to the British North America Act that was enacted by the Parliament of Canada in 1965 relating to the retirement age of senators was enacted in both official language versions, English and French.
More recently, where an agreement requiring legislative implementation has been entered into between the Government of Canada on the one hand and the Government of the United Kingdom on the other hand, the agreement has been executed in both languages, both texts being stated to be equally authentic, and has been sanctioned accordingly in that form not only by our own Parliament but also by the Parliament of the United Kingdom. See for example the Canada-United Kingdom Income Tax Agreement approved by chapter 14 of the Statutes of 1966-67. The intention of the Government of Canada is to continue this practice, and to seek to extend it to whatever future legislation the Parliament of the United Kingdom may be requested to enact relating to Canada and its constitution.


CHANGES IN STAMP DESIGN
Mr. Harkness: 1.	How many changes In the design of the five-cent Canadian postal stamp have been made during the past year?
2.	What is the average cost for designing, printing, etc., when making a change in the stamp?
3.	What is the estimated extra return to the Post Office, if any, as the result of making a stamp change?


Hon. Eric Kierans (Postmaster General):: 1.
Ten, including the current 5 cents definitive stamp and the 5 cents Christmas stamp.
2.	The current 5 cents definitive stamp was designed in conjunction with the 1 cent, 2 cents, 3 cents, and the 4 cents series at a total cost of $3,400. The cost of printing the 5 cents definitive stamp will depend on the duration of the period during which it will be in use. The 5 cents Christmas stamp was

October 16. 1968
Questions
designed in conjunction with the 3 cents Christmas stamp. The cost for the two designs was $1,100. The 5 cents Christmas stamp had an extended period of sale during which it replaced the regular 5 cents stamp. Approximately one hundred million Christmas stamps were required, the printing cost of which was $26,813. The average cost of manufacturing the required quantity of the stamps of each commemorative issue is $16,000. The average cost of designing the 5 cents commemorative stamps is $700.
3.	The extra return to the post office as a result of introducing the current design of 5 cents definitive stamp and the 5 cents (1967) Christmas stamp will not be known until the philatelic sales of each will have been discontinued. The extra return to the post office as a result of issuing the 5 cents commemorative stamps is estimated at $39,500 for each commemorative issue.


RECIPIENTS OF TECHNICAL TRAINING
Mr. Diefenbaker: How many persons by provinces have received technical training under the Technical and Vocational Training Assistance Act, year by year, since 1st January, 1963?


Mr. Gerard Loiselle (Parliamentary Secretary to Minister of Manpower and Immigration):: Under the Technical and Vocational Training Assistance Act the following number of persons received training since 1962. The was repealed in 1967.
Province	1962-63
Nfld.	1,012
P.E.I.	196
N.S.	2,153
N.B.	5,417
Que.	18,963
Ont.	27,643
Man.	3,745
Sask.	2,667
Alta.	8,740
B.C.	5,422
Y.T.	-
N.W.T.	59
Canada	76,017
Fiscal Year
1963-64	1964-65
2,957	5,213
431	728
3,037	3,789
5,552	4,479
41,562	43,645
37,077	46,764
5,337	8,654
4,859	6,682
13,104	14,324
10,226	14,590
159	350
129	195
124,430	149,413
1965-66	1966-67
5,821	8,856
862	1,133
5,168	11,134
4,728	8,256
50,419	80,976
72,037	117,568
10,488	14,771
8,551	12,382
16,980	22,631
16,281	20,563
258	276
497	164
192,090	298,710
The training of the above persons was subsidized by the federal government on a cost shared basis, the federal contribution ranging from 50 per cent to 90 per cent of the total cost. In addition, the federal government contributed toward vocational high school programs at a fixed maximum yearly rate of $3 million.
The data refer to persons attending classes during a particular fiscal year. As the course of study of many of these persons fell into two or even three fiscal years, accumulation of the annual data would result in double counting.


RELIEF SUPPLIES FOR NIGERIA
Mr. Brewin: 1.	What proportion of the allocation of $500,000 announced by the Prime Minister on July 31, 1963 for the provision of emergency supplies from
[Mr. Kierans.l
Canada for relief of the area of Nigeria affected by hostilities has been expended?
2.	What supplies have in fact been sent to Nigeria?
3 What portion of such supplies has been actually used in the area affected by the hostilities for the relief of the victims?
4.	Is it contemplated that further allocations will be made?
5.	What steps have been taken by the Canadian Government to remove obstacles to adequate distribution of Canadian and other supplies to the victims of the Nigerian hostilities?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: 1. Approximately $50,000 has been disbursed. (See also answer to question 4 below regarding expenditure commitments.)
2.	Drugs, vaccines, antibiotics and dried salted codfish have been sent.
3.	All the supplies have been used.
October 16. 1968

4.	An additional allocation of $500,000 was announced by the Prime Minister on September 17. $875,000 has been committed to orders for additional shipments of fish and $75,000 for freight and wharfage charges.
5.	The Canadian government has supported the efforts of the international committee of the Red Cross to arrange for delivery corridors into the areas of greatest need from outside distribution points. This support has included diplomatic interventions with the federal Nigerian government and public appeals to the Biafran authorities, with whom Canada has no official relations.


MANPOWER PLACEMENT SERVICES
Mr. McCleave: 1.	What were the total placements by the National Employment Service and its successor, the Department of Manpower and Immigration in 1965, 1966 and 1967?
2.	How many vacancies were notified to such offices by employers in each of those years?
3.	How many persons were employed on the staff of such offices in each of those years?


Gérard Loiselle: 1. Recorded placements were: 1,257,700 for 1965; 1,166,300 for 1966; 1,071,700 for 1967.
2.	Registered vacancies were: 1,634,700 for 1965; 1,544,200 for 1966; 1,435,800 for 1967.
3.	Staff: 4,904 as of April 1, 1965; 5,089 as of April 1, 1966; 5,288 as of April 30, 1967.
The data on staff for all three years include employees of regional and Ottawa headquarters as, for the years 1965 and 1966, it was not possible to segregate the field staff from the total staff of the organization which existed then. Moreover, it is important to note that these data are not comparable in meaning over the period as the manpower services being provided changed considerably. Emphasis shifted from the operation of a simple placement service to the provision of a range of manpower services which include referral to training courses (these totalled 294,000 in the fiscal year 1967-68), manpower mobility grants (these totalled 28,547 in 196768), more extensive labour market and job vacancy information, and fuller employment counselling.


BELL ISLAND HOUSING AND MANPOWER PROGRAMS
Mr. McGrath: 1.	What is the total expenditure to date by the Atlantic Development Board under the Bell Island Special Housing Assistance Program?
Questions
2.	What is the total expenditure to date and how many persons have been moved from Bell Island under the Manpower Mobility Program for Bell Island?


Hon. Donald S. Macdonald (President of the Privy Council):: I am informed by the Departments of Forestry and Rural Development and Manpower and Immigration as follows: 1. $284,625.
2.	From the inception of the program on December 28, 1965, to September 23, 1968, this department authorized a total of $431,549 for the purpose of moving workers from Bell Island. This expenditure relates to 440 workers with 1,314 dependents.


WINTER WORKS EXPENDITURES LOTBINIERE CONSTITUENCY
Mr. Fortin: 1. In the years 1962-63-64-65-66-67-68, how much did the government spend on the Winter Works Program in the federal constituency of Lotbiniere?
2. How much was spent in each parish?	
[Translation]	
Mr. Gerard Loiselle	(Parliamentary Secretary to the Minister	1 of Manpower and
Immigration): 1.	
Program Year	Claims Paid $ 179,473.23
1961-62	
1962-63	198,168.88
1963-64	173,114.09
1964-65	168,287.74
1965-66	223,627.32
1966-67	115,084.57
1967-68 to Sept. 20,	1968 29,142.70
(a substantial number of	
claims are still outstanding)	
Municipality	Claims Paid from 1961-62 to September 20, 1968 $ 46,291.55
Arthabaska	
Daveluyville	9,817.36
Deschaillons	13,906.34
Fortierville	4,474.92
Laurier Station	4,295.67
Lemieux	20,912.42
Les Becquets	3,878.53
Maddington	10,174.03
Manseau	3,914.04
Norbertville	993.37

Oclober 16, 1968
2.
Questions
Claims Paid from 1961-62 to
Municipality	September 20,1968

Notre Dame du Sacre Coeur
D'lssoudun	28,788.13
Princeville	33,186.21
Val Alain	24,606.75
Victoriaville	227,209.41
Villeroy	34,088.29
Warwick (town)	3,319.27
Warwick (township)	1,736.14
Ste Anne du Sault	23,572.25
St Antoine de	Tilly	28,044.88Ste Cecile de	Levrard	5,596.34St Christophe D'Arthabaska 2,894.19 Ste Croix (parish)	36,918.67Ste Croix (village)	26,447.60St Edouard de Lotbiniere	21,901.74Ste Elizabeth de Warwick	160.12Ste Emmelie	22,203.25Ste Eulalie	8,301.71St Flavien (parish)	29,262.35St Flavien (village)	7,615.76Ste Frangoise	49,136,20St Jacques de	Horton	1,196.42St Jacques de	Parisville	22,081.96St Janvier	de	Joly	29,556.15St Joseph	de	Blandford	25,175.84St Louis de Blandford	16,284.57St Louis de Lotbiniere	23,950.62Ste Marie	de	Blandford	12,812.02St Octave	de	Dosquet	55,204.92Ste Philomene de Fortierville	44,305.70St Pierre les Becquets	12,430.66St Rosaire	25,963.58St Samuel	16,475.40Ste Sophie de Levrard	25,763.40St Sylvere (parish)	23,304.76St Valfere	18,745.04


HIGHWAYS INTO INDIAN RESERVES
Mr. McCleave: 1.	Does the federal government take responsibility for the building and maintenance of highways into Indian reserves and, if so, on what arrangements, if any, with other levels of government?
2.	If the federal government has such a policy, are there plans to widen and/or pave the road into the Shubenacadie Indian Reserve?
for the building and maintenance of highways into Indian reserves, however in certain cases, the department may negotiate for construction and maintenance of access roads to Indian reserves with the provincial or municipal authorities. The negotiations are based on the extent to which the reserve is expected to use the road in proportion to the use to be made of the road by residents off the reserve.
2.	A portion of the road continuing through the Shubenacadie Indian reserve was widened and built up in 1967, for a distance of 3.5 miles. The department plans to apply and compact a layer of fine gravel on the road during the current construction season, and next year it is planned to seal coat the road. The department of highways, province of Nova Scotia, are responsible for and have paved the road into the reserve up to the reserve boundary line.


ADMINISTRATION OF INDIANS AND ESKIMOS, QUEBEC
Mr. Laprise: 1.	Is the transfer of the federal administration of New Quebec to the Government of the Province of Quebec still continuing?
2.	Have the Indians and Eskimos of that region been consulted and, if so (a) in what manner (b) what was the reply?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: 1. There has been no transfer of powers with respect to Indians and Eskimos from the federal government to any provincial government.
2.	The policy of the federal government is to try to make it possible for Indians and Eskimos to receive services provided by departments and agencies of the provincial government to all other residents in the province. In pursuit of this policy, consultation with the Indian and Eskimo people affected is an essential and basic element. In Quebec the province has begun to extend services in recent years to the more remote and northern areas where previously only federal services have been available. As these provincial services become established there are opportunities for Indians and Eskimos, both as individuals and as entire communities, to


Joseph Jacques Jean Chrétien: 1. The long as there is a demand and a need for federal government does not take responsibity them by the Indian and Eskimo people.

October 16. 1968


MONEY IN CIRCULATION
Mr. Latulippe: What was the amount of money in circulation (a) in coins (b) in bank bills (c) total money
Questions
supply in Canada, on October 31, 1934, 1944, 1954, 1964, 1967, and on July 31, 19687


Edgar John Benson: (a), (b) and (c):
Total Canadian Dollar
	Currency Outside Banks		Deposits at Chartered Banks
(Millions of Dollars)	Coin	Notes	plus Currency Outside BanksAt Oct. 31, 1934	27	161	2,140
1944	58	914	5,690" " " 1954	96	1,360	10,374
1964	222	1,988	17,494" " " 1967	326	2,392	24,182" July 31, 1968	359	2,535	26,330COST OF BOND ISSUE	CANADIAN DELEGATION TO UNITED NATIONS


Mr. Latulippe: What was the cost of the issue of Government Bonds in the amount of $500,000,000 as advertised in newspapers of September 15, 1968, for delivery on October 1, 1968, and bearing interest of 6%, 61% and 6J% (a) for brokers' fees (b) for newspaper advertising (c) for lawyers' fees (d) for other expenses (e) for printing of the Bonds?


Edgar John Benson: The
amount of the government of Canada loan dated October 1, 1968 was set by the Minister of Finance at $535,000,000. The costs incurred under each of the specified categories are as follows: (a) $1,454,082.00; (b) $20,018.80; (c) nil; (d) $19,931.17; (e) $37,622.50.


SPECIAL CLAIMS, NORTHERN ONTARIO PIPE LINE
Mr. Schreyer: 1.	What	was	the cost	to	the	Government of
Canada for the maintenance of the Canadian Delegation at the 22nd Session of the United Nations General Assembly?
2.	What was the size of the Canadian Delegation?
3.	How	many	persons	on	this	Delegation wererecruited	from outside	of	the	Canadian Civil
Service and the Parliament of Canada?
4.	What	was	the cost	to	the	Government of
Canada (showing both emolument and expense allowance) of maintaining each of them in New York during the 22nd Session of the U.N. General Assembly?
5.	What is the budgetary allowance for 1968 to cover the cost of maintaining the Canadian Delegation at the 23rd Session of the United Nations General Assembly and, specifically, what is budgeted to cover the cost of maintaining those members of the Canadian Delegation who are not members of the Canadian Civil Service?

Question No. 205-Mr. Schreyer:
1.	Subsequent to the construction of the Northern Ontario Natural Gas Pipeline, were any special claims submitted to the government of Canada by contractors involved in the construction thereof?
2.	If so (a) were any of these claims accepted as valid and consequently paid (b) what were the amounts of special payment in each of these cases (c) was Treasury Board approval obtained in each case?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: 1. Yes.
2.	(a) Yes. (b)	$6,681.68;	$17,956.40;
$420,222.38; $65,243.00; $692,496.01; $112,950.00. (c) Yes.
Note: While the government of Canada initially paid these claims, all these payments were recognized costs of the pipeline and reimbursement therefor was made to the government of Canada by Trans-Canada Pipe Lines Limited.


Mitchell William Sharp: 1. $158,090.
2.	The official delegation, approved by cabinet, comprised a chairman, a vice-chairman, three representatives, and five alternates. The delegation was assisted by advisers from the Departments of External Affairs and Finance and administrative support staff. Also attending for periods of approximately two weeks each were twenty eight parliamentary observers.
3.	Two.
4.	No emoluments were paid. Travel expenses for a period of 90 days, including accommodation and meals, were $4,971.33 and $4,813.62, respectively.
5.	$175,000. It has been estimated that $22,000 will be required out of the 1968 budgetary allowance for five members of the delegation who are not members of the Canadian public service.

October 18, 1988
Questions


BEEF, PORK AND EGG IMPORTS
Mr. Gauthier: 1. Did Canada import beef during the years 1965, 1966 and 1967 and, if so (a) from what countries (b) how many pounds in each case?
2. Did Canada import pork during the years 1965, 1966 and 1967 and, if so (a) from what countries (b) how many pounds in each case?
3.	What quantity of eggs was imported in Canada from the United States during the years 1965, 1966 and 1967?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: The Dominion Bureau of Statistics reports that: 1. Yes. Imports of beef into Canada were as follows: 1965, 27,081,928 pounds; 1966, 33,315,196 pounds; 1967, 50,571,949 pounds, (a) and (b) Detailed import statistics by country and dollar value for each of the countries for beef are recorded in the following import commodity classifications, which may be found in the December issues of the Dominion Bureau of Statistics publication "Imports by Commodity", (catalogue #65-007), which is available in any public library or the Library of Parliament: 1965-classes 11-09, beef and veal, fresh or frozen; 13-09, beef, cured (including salted); 17-03, corned beef, canned; 17-09, beef and veal, canned n.e.s.; 1966 and 1967-classes 11-04, beef, fresh or frozen, boneless; 11-05, beef, fresh or frozen, n.e.s.; 11-08, veal, fresh or frozen; 13-09, beef, cured (including salted); 17-03, corned beef, canned; 17-09, beef and veal, canned, n.e.s.
Class

eggs in the shell (dozens)
53-59-eggs, whole, yolk or albumen, dried (pounds)
53-69-eggs, whole, yolk or albumen, frozen or otherwise prepared n.e.s. (pounds)
2. Yes. Imports of pork into Canada were as follows: 1965, 36,605,800 pounds; 1966, 36,493,000 pounds; 1967, 27,839,800 pounds.
(a) and (b) Detailed import statistics by country and dollar value for each of the countries for pork are recorded in the following import commodity classifications, which may be found in the December issues of the Dominion Bureau of Statistics publication "Imports by Commodity", (catalogue #65-007), which is available in any public library or the Library of Parliament: 1965-classes-11-29, pork, fresh or frozen; 13-29, pork, cured (including salted); 1966-classes-11-22, pork bellies, fresh or frozen; 11-24, hams, not cured or cooked; 11-26, pork shoulders, picnics and butts, fresh or frozen; 11-28, pork spare ribs, fresh or frozen; 11-29, pork, fresh or frozen n.e.s.; 13-20, pork backs, cured; 13-21, bacon, cured; 13-26, pork shoulders, picnics and butts, cured; 13-29, pork, cured, n.e.s.; 1967- classes-11-22, pork bellies, fresh or frozen; 11-24, hams, not cured or cooked; 11-25, pork shoulders, picnics and butts, fresh or frozen; 11-28, pork spare ribs, fresh or frozen; 11-29, pork, fresh or frozen n.e.s.; 13-20, pork backs, cured; 13-21, bacon, cured; 13-25, pork shoulders, picnics and butts, cured; 13-29, pork, cured, n.e.s.
3.	The quantity of eggs imported into Canada from the United States during the years 1965, 1966 and 1967 is as follows:
1965	1966	19673,898,778	9,567,647	11,922,638334,783	238,480	268,514105,325	2,424,380	1,863,560


FEDERAL CONTRIBUTIONS TO WINTER WORKS, 2. ROBERVAL CONSTITUENCY
Mr. Gauthier: 1.	How much has the federal government contributed toward winter works in the constituency of Roberval?
2.	What sums were received by each municipality in this constituency?


Gérard Loiselle: 1. $7,901,074.16 to September 25, 1968 (some claims are still outstanding).
Municipality
Albanel
Albanel village
Chambord
Dolbeau
Girardville
Lac Bouchette
Mistassini
Normandin
(Mr. Sharp.]
Claims Paid to Sept. 25, 1968 (some still outstanding)
266.858.54 24,194.85
207,916.15
779.993.55 154,704.92 135,794.24 833,828.17 314,878.43
October 16, 1968

Municipality	Claims Paid to Sept. 25, 1968 (some still outstanding)
Normandin village	215,538.73
Notre Dame de la Dore	138,036.05
Notre Dame de Lorette	89,056.44
Roberval parish	197,456.00
Roberval city	974,488.09
St. Andre parish	56,738.49
St. Andre village	105,271.77
St. Edmond	155,030.43
St. Eugene	287,548.74
St. Felicien parish	168,852.88
St. Felicien town	668,266.79
St. Frangois-de-Sales	264,849.22
St. Hedwidge	163,524.89
St. Louis-de-Chambord	268,343.20
St. Methode	192,995.19
St. Michel-de-Mistassini	314,764.51
St. Prime	333,884.33
St. Prime village	47,090.66
St. Stanislas	269,696.71
St. Thomas-d'Aquin	106,890.88
St. Thomas-Didyme	164,581.31


REVENUE FROM ALCOHOL-EXPENDITURES TO COMBAT ALCOHOLISM
[Stage Direction]
Questions
Donald Stovel Macdonald: I am informed by the Departments of National Revenue and National Health and Welfare as follows:
1.	$461,266,414.93.
2.	During the fiscal year 1967-68 the Department of National Health and Welfare expended $200,389 on a program aimed at the reduction of cigarette smoking and smoking related diseases among Canadians.
Note: Revenue from federal sales tax is not segregated by commodities and is not included in the above total. Revenue figures are for the fiscal year ending March 31, 1968.


FISHERIES ASSISTANCE, PRAIRIE REGION
Mr. Schreyer: What financial assistance, if any, has been extended under the terms of the Fisheries Development Act for the purpose of construction and equipping, repair or alteration of storage facilities and of fishing vessels used in the inland freshwater fishing industry of the prairie region?


Mr. E. J. Whelan (Parliamentary Secretary to Minister of Fisheries):: One application for cold storage facilities approved but not yet paid; the estimated subsidy is $41,666.


Mr. Mather: 1.	What was the tax revenue, in dollars, received by the federal government in 1967 as a result of the sale of alcoholic beverages?
2.	What was the amount, in dollars, expended by the federal government in combating alcoholism in Canada?


Donald Stovel Macdonald: I am informed by the Departments of National Revenue and National Health and Welfare as follows: 1. $296,574,613.16.
2. A grant of $15,000 is made annually to the Canadian Foundation on Alcoholism.
Note: Revenue from Federal sales tax is not segregated by commodities and is not included in the above total. Revenue figures are for the fiscal year ending March 31, 1968.


TOBACCO REVENUES-EXPENDITURES ON HEALTH EDUCATION
Mr. Mather: 1.	What was the tax revenue, in dollars, received by the federal government in 1967 as a result of the sale of tobacco products?
2.	What was the amount, in dollars, expended by the federal government on combating cigarette-induced disease and/or on smoking and health education?


CORPS OF COMMISSIONAIRES, CALGARY AIRPORT
Mr. Woolliams: 1.	In reference to the Calgary International Airport, are the Commissionaires paid their salary by the Government of Canada?
2.	Does the federal government make a contribution to the Corps of Commissionaires in Calgary in respect of salaries paid to Commissionaires and, if so, how much?
3.	How much does the Corps of Commissionaires in Calgary receive in respect of the cost of administration purposes, and how much is retained in reference to the hourly wage?
4.	Are there any regulations governing the wages paid to Commissionaires at the said Calgary Airport and, if so, what are they?


Hon. Paul Hellyer (Minister of Transport):: 1. The commissionaires' salaries are paid by the government of Canada.
2.	The federal government makes contributions to the corps of commissionaires by way of a basic hourly rate of pay for commissionaires which is $1.60 at Calgary.
3.	In addition to the basic hourly rate of $1.60, a further $0.17 per hour is paid in respect of the cost of administration.

Oclober 16, 1968
Questions
4.	Regulations governing the wages paid to all commissionaires, including those at Calgary, are set down in T.B. 649495 of December 30, 1965.


HOUSING TASK FORCE MEETINGS, WESTERN QUEBEC
Mr. Clermont: Has the federal government task force on housing and rural development scheduled public meetings in the region of Western Quebec?


Paul Theodore Hellyer: The federal government task force on housing and urban development plans to hold public hearings in Hull, Quebec some time in late November, the exact time and place yet to be determined.


CONSTRUCTION OF C.B.C. MONTREAL BUILDING
Mr. Dinsdale: 1.	What was the date for the closing of tenders for Place Radio in Montreal announced by the Secretary of State?
2.	Has there been a delay in opening these tenders and, if so (a) what is the new deadline, and (b) what is the reason for this delay?
3.	When will construction get underway on this project, and (a) what is the target date for completion (b) what is the estimated total cost of the project?


Hon. Gerard Pelletier (Secretary of State):: I am informed by the C.B.C. as follows: 1. The date for closing of tenders, as originally established by the corporation, was August 30, 1968.
2.	Yes. The closing date of August 30 was changed to October 1 at the request of the contractors who explained that additional time was required to complete their bids because of the complexity of the project.
3.	It is expected that construction will begin this December, subject to order in council approval. The target date for completion and occupancy remains unchanged, i.e., 1972. Estimated total cost of the project is $66,200,000.


LANDING STRIPS, ABITIBI CONSTITUENCY
Mr. Laprise: 1.	How many landing strips are In use in the constituency of Abitlbl and where are they located?
2.	How many landing strips are under construction and at what locations?


Paul Theodore Hellyer: 1. There are 10 landing strips available for use in the constituency of Abitibi. Their locations are, Amos (private); Asbestos Hill; Cape Jones; Deception Bay; Esker; Fort George; Inoucdjouac; La Sarre; Poste-De-La-Baleine; Povungnituk.
2. Three landing strips are known to be under construction at Amos (municipal), Nitchequon and Raglan.


PAYMENTS TO PROVINCES UNDER MEDICARE
Mr. Harding: 1.	What is the estimated total cost to the federal government of payments to the provinces under the federal Medicare Plan for the present fiscal year?
2.	What provinces, to date, have come under the federal Medicare Plan, and what is the estimated payment to each for the present fiscal year?


Hon. John C. Munro (Minister of National Health and Welfare):: 1. The revised estimated payments by the federal government to the provinces under the federal Medical Care Act in the fiscal year 1968-69 will be $32,966,100. This figure will be further adjusted at the close of the present fiscal year.
2. The provinces of Saskatchewan and British Columbia have participated in the medical care program since July 1, 1968. The estimated payments to these two provinces in the present fiscal year are: Saskatchewan, $11,296,800; British Columbia, $21,669,300.


GRINDING OF OBSERVATORY MIRROR BLANK
Mr. Anderson: 1.	Has the government abandoned its plan to sell the 158 inch mirror blank originally purchased for the Queen Elizabeth II Observatory?
2.	What steps have been taken to find alternate employment within the Department of Energy, Mines and Resources or at a Canadian University for the highly skilled team of opticians assembled to grind and polish the Queen Elizabeth II Observatory mirror blank?
3.	Are these men still employed by the Department of Energy, Mines and Resources?
4.	On what date will their employment terminate?


John James Greene: 1. The eventual use of the 157 inch mirror blank is still under consideration.
2.	None.
3.	Yes.
4.	There has been no decision taken to release the optical employees referred to above.
October 16, 1968


TENDERS FOR REPLACEMENT FOR C.C.G.S. &quot;ESTEVAN&quot;
Mr. Anderson: 1.	Does the government intend to proceed with the plans announced on June 19, 1968 by the Minister of Transport to replace the CCGS Estevan?
2.	If so, when will invitations to submit bids on this ship be issued?
3.	Will bidding be restricted to west coast shipyards as the Minister of Transport announced on June 19?


Paul Theodore Hellyer: 1,	2 and 3. Decision to restrict tenders for any replacement of C.C.G.S. Estevan to west coast shipyards, as previously announced, has not been changed. However, budgetary considerations required a review during the summer of coast guard shipbuilding program priorities. Also, the results of an operations research study on coast guard vessel use, initiated earlier, became available and suggested that the marine work of the coast guard on the west coast could be handled to the same standard of service through the use of new techniques and programming of ships and other vehicles without the present replacement of the Estevan. Therefore, for the present, this project has been set aside.


CHARTER OF STEAMSHIP &quot;CABATEAL&quot;
Mr. Dumont: Did any government agency charter the ship Cabateal, registered in the Bahamas whose crew is Spanish and agent is "Transworld Shipping" to transport cargo to the Canadian East Arctic? '


Paul Theodore Hellyer: As a result of a tender call, a contract was awarded to a Canadian company, Transworld Shipping for employment of the vessel Cabateal in connection with Arctic supply work this summer. No suitable Canadian vessel was offered as the Federal Pioneer (Canadian) the only other 10,000 ton ship offered was chartered for the Dew line. The Cabateal is a vessel of Bahamian registry. The Department of Transport does not have detailed knowledge of the composition of the crew, but it is understood that the captain is of Canadian nationality and the chief engineer is of British nationality.


EMPLOYMENT OF FORMER HUDSON BAY COMPANY PERSONNEL
Mr. Dumoni: How many persons, formerly employed by the Hudson Bay Company, were hired by the Department of Indian Affairs and Northern Development in 1965-66-67-68?
Questions


Joseph Jacques Jean Chrétien: 1965-66, 11; 1966-67, 15; 1967-68, 19.


SALE TO CUBA OF TUNA FISHING SHIPS
Mr. Crouse: 1.	Are negotiations under way for export credit financing from a Canadian tuna company in connection with the possible sale of five modern Canadian tuna fishing vessels to Cuba?
2.	If so, what are the details of this proposal?


Jean-Luc Pepin: The Export Credits Insurance Corporation reports that: 1. It has not been approached by a Canadian tuna company in that connection.
2.	N/A.


CONSTRUCTION OF ASTROPHYSICAL LABORATORY IN SAUDI ARABIA
Mr. Anderson: 1.	Has the Department of Trade and Commerce received inquiries from Saudi Arabia concerning the construction of an astrophysical observatory in that country by a Canadian firm or firms?
2.	If so, is it still the intention of the Department of Trade and Commerce to continue with these negotiations?


Jean-Luc Pepin: 1. No. However, knowledge of this telescope project was obtained by a Canadian firm working in Saudi Arabia. This firm, along with others, received official confirmation and information on the status of the project from the Saudi Arabian authorities through our Beirut office.
2. While we have not entered into any negotiations, the department stands ready to assist these Canadian firms.


CONTROL OF BUD WORM INFESTATION, NEW BRUNSWICK
Mr. Flemming: 1.	Has the Government of Canada received representations from the Government of New Brunswick and/or the forest products industry of that Province relative to the serious condition of the forests of New Brunswick which many knowledgeable people consider is caused by a recurrence of budworm infestation?
2.	If so, is it the intention of the Government of Canada to co-operate with the Province and private industry in their campaign to maintain the condition of this most vital natural resource?


Eugene Whelan: No.
2. Not applicable.

October 16, 1968
Questions


ACCESS ROAD TO FORT RODD PARK
Mr. Anderson: 1.	What was the total cost of the new access road from the Island Highway near Colwood, B.C. to Fort Rodd National Historic Park?
2.	Who were the contractors engaged to build the road and what was each contractor paid?


Joseph Jacques Jean Chrétien: 1. The
contract for the new access road was included with the construction of a parking lot for visitors to Fort Rodd Hill national historic park.
2. Wakeman and Trimble Contractors Ltd. Payment certificates totalling $152,587.98 are presently being processed.


INFORMATION SERVICES DIRECTOR, FORESTRY DEPARTMENT
Mr. McCleave: 1.	Who is the Director of Information Services for the Department of Forestry and Rural Development?
2.	What are his qualifications and what is his salary?
3.	Was he appointed as the result of a Public Service Commission competition and if not (a) for what reasons (b) in what manner?
4.	Does he hold shares in any public relations or advertising companies?
5.	How many employees does he supervise?


Mr. Russell C. Honey (Parliamentary Secretary to Minister of Forestry and Rural Development):: 1. Pierre A. Forget.
2.	Mr. Forget has had 19 years' experience in the information field, including 15 years with the Bell Telephone Company of Canada, and was director of information services division of the Canadian Corporation for the 1967 World Exhibition. His present salary is $17,236.
3.	Yes. P.S.C. Competition 67-310.
4.	No.
5.	28.


PILOTAGE COMMISSION LEGAL ASSISTANCE
Mr. McCleave: 1.	What legal fees have been paid by the Royal Commission on Pilotage to its counsel since November 1, 1962?
2.	What individuals outside government employ were retained as counsel and what were their fees and expenses?
3.	Has the counsel work been completed?


Mr. J. E. Walker (Parliamentary Secretary to Prime Minister):: I am informed by the 
royal commission on pilotage as follows: 1. The legal fees paid by the royal commission on pilotage to its counsel for the period November 1, 1962 to August 31, 1968 total $72,250.
2.	Mr. Maurice Jacques of Quebec city was the only person outside government employ whose services were retained as counsel for the commission. The total fees paid to him were as stated in 1 above, while the travelling expenses paid to him during the same period total $16,006.08, approximately half of which is for transportation.
3.	Subject to occasional verification of draft texts for the final report of the commission, counsel work may be considered completed.


STUDY OF HEARING AIDS
Mrs. Maclnnis (Vancouver-Kingsway): 1.	Is the government now conducting a study concerning hearing aids?
2.	If so (a) when will it be made available (b) when will the report be made available to the public?
3.	If not, will the Minister of Consumer and Corporate Affairs initiate such a study this Session?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: 1. Yes. The Department of Consumer and Corporate Affairs decided last year to proceed with a research inquiry into hearing aids.
2.	(a) Early in 1969. (b) Under section 6(2) of the Department of Consumer and Corporate Affairs Act the minister may undertake research into matters to which the powers, duties and functions of the minister extend and publish so much of the results of any such research as he deems appropriate and in the public interest. It is not the intention to make public the internal report but consideration will be given to publishing the recommendations.
3.	Not applicable.


REVIVAL OF QUEEN ELIZABETH OBSERVATORY PROJECT
Mr. Anderson: Has the government entered Into negotiations with a number of Western Canadian university scientists on the possibility of reviving the Queen Elizabeth II Observatory project?


John James Greene: No.
October 16. 1968


RIVERS, MAN.-DELEGATION RESPECTING ARMED FORCES BASE
Mr. Stewart (Marquette): t- tlid the Minister of National Defence meet with a delegation of concerned citizens from Manitoba on August 27, 1968, with respect to the future role ^ of the Canadian Forces Base at Rivers, Manitoba and if so, did the Minister inform the delegation that the Defence Committee had recommended the closing of the Rivers Base?
2. Was any other Minister present during the meeting?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, the answer to part 1 is yes. I met with a delegation from Manitoba on Tuesday, August 27, 1968. I did not tell the delegation that the defence committee had recommended the closing of the Rivers base. I did say that the whole question of base consolidation was under study and that this subject would be discussed at defence council at some future date.
The answer to part 2 is no.


NEGOTIATIONS WITH ONTARIO FOR NATIONAL PARK
Mr. Dinsdale: 1.	Is the government negotiating with the Province of Ontario with a view to establishing a National Park in that Province and, if so, what area is under consideration?
2.	When is it expected that an agreement will be reached?


Joseph Jacques Jean Chrétien: 1. The
studies are continuing between officials of the department and provincial officials with a view to establishing a national park in the area of the Canadian shield.
2. The province is studying the matter and we are awaiting their decision.


POST OFFICE IMPROVEMENTS, CHRISTMAS ISLAND, N.S.
Mr. Muir (Cape Breion-: The Sydneys):
1.	On what date were the plans and specifications prepared to improve the disposal field and Improve the surface draining system at the Christmas Island Post Office?
2.	Have tenders been called for the performance of such improvements to the said Post Office and when are such improvements expected to be completed?


Hon. Arthur Laing (Minister of Public Works):: 1. June 10, 1968.
2. Yes. A contract was awarded on July 17, 1968, and will be completed momentarily.
Questions


THREE POINT SEAT BELTS
Mr. Mather: Have representations been received from car importers protesting the lack of a federal safety standard respecting 3-point seat belts?


Paul Theodore Hellyer: No. There is already available a standard for seat belt assemblies, No. 97-GP-209: Seat belt assemblies-passenger cars, multipurpose passenger vehicles, trucks and buses, issued by the Canadian government specifications board. The board has also issued three supplementary standards: 97-GP-208: Anchorages of seats, passenger cars; 97-GP-208: Seat belt installations, passenger cars; 97-GP-210: Seat belt assembly anchorages, passenger cars.


SAFETY STANDARDS OF IMPORTED AUTOMOBILES
Mr. Mather: Are automobiles imported into Canada, for sale in Canada, required to conform to federal safety standards?


Paul Theodore Hellyer: No. Vehicles purchased by the federal government for use by its departments and agencies are however required to conform to the motor vehicles safety standards issued by the Canadian government specifications board. Vehicles made in, and imported from the United States, conform to all these standards because the technical requirements in the United States, where compliance is mandatory, and in Canada are identical.


PARLIAMENTARY COMMITTEE ON HIGHWAY SAFETY
Mr. Maiher: Will consideration be given at this Session to establishing a Parliamentary Committee to concern itself with the subject of the human and economic toll taken by automobile accidents and the need to develop protective procedures and devices to reduce this attrition of our resources?


Paul Theodore Hellyer: Full attention will be given to the suggestion put forward by the hon. member and the government's decision will be made known in due course; in any case, as indicated by earlier statements and answers to other questions raised by the hon. member, this general area is receiving active consideration by the government.

October 16, 1968
Questions


SALE OF PLUTONIUM TO FRANCE
Mr. Harkness: 1.	Was the sale of plutonium to France made at a very substantial reduction from the going price?
2.	At what price was the plutonium sold?


John James Greene: 1. No.
2. $22.00 per gram.


IMPROVEMENT OF POST OFFICE FACILITIES, ST. JOHN'S WEST, NFLD.
Mr. Carter: Does the government intend to provide improved post office facilities in St. John's West, Newfoundland and, if so, when will construction commence?


Arthur Laing: Yes, improvements are planned, but it has not yet been decided how these will be provided.


WORK ON DUNVILLE-ARGENTIA ROAD, NEWFOUNDLAND
Mr. Carter: 1.	Will the proposed paving of that section of the Argentia Access Road from Dunville to Argen-tia be completed this year?
2.	Does the government intend to upgrade the remaining section from Dunville to the Trans-Canada Highway this fall to permit its use by people travelling to and from Newfoundland on the Argentia-North Sydney Ferry?


Arthur Laing: 1. Weather conditions make it unlikely that the proposed paving between Dunville and Argentia will be completed this year.
2. Yes.


CAPITAL PROJECTS, HUMBER-ST. GEORGES-ST. BARBE DISTRICT, NFLD.
Mr. Marshall: What capital projects will be carried out by the Department of Public Works in the year 1968-69 in the Humber-St. Georges-St. Barbe district, Newfoundland?


Arthur Laing: Planning is underway for harbour improvements at Corner Brook.


COLLECTIVE AGREEMENTS UNDER DEVCO
Mr. Skoberg: 1. Has the right to bargain collectively been taken away from the employees of the former Cumberland Railway Company, now known as the Cape

Breton Development Corporation (Coal Division) Railroad, by the establishment of the Cape Breton Development Corporation?
2.	Are the Collective Agreements between the employees and the former owners to be honoured by Devco, until such time as they are specifically changed or renewed?
3.	Will the representatives of all unions involved be consulted before any material changes are instituted in their working agreements or conditions, including a retirement plan?


Russell Clayton Honey: 1. No.
2.	Yes, with effect from March 31, 1968, the date of the takeover.
3.	Yes.


PORTRAYAL OF INDIANS IN SCHOOL TEXT BOOKS
Mr. Dinsdale: What steps have been taken by the Department of Indian Affairs and Northern Development to ensure that a more adequate presentation of the role of Indians in Canadian society is available in our school text books?


Joseph Jacques Jean Chrétien: In 1968 all teachers in federal schools were invited to comment on the material dealing with the history of the Indian people in school textbooks in current use. The comments received were gathered together in a report which was circulated to the supervisory staff. The ministers of education were informed of the content of the report and were asked to pass this information to officials concerned with curriculum building in each province. Replies received so far indicate a willingness to remedy deficiencies in information on the Indian people. Departmental officials have held consultations with university personnel to promote research and to engage the universities in Indian studies. Several universities are now actively involved in intercultural courses for teachers. The department has prepared a new library catalogue for federal schools in which many books on Indian lore and legend are listed.


ENTRANCES TO NORTH SIDE OF CENTRE BLOCK
Mr. Nowlan: 1. What is the cost to date and what is the total estimated cost of the new pedestrian entrance to the north side of the Centre Block of the Parliament Buildings?
October 16, 1968

2.	What was the reason for this new entrance?
3.	With the completion of this entrance, how many doors for freight and people are there in the Centre Block of the Parliament Buildings and are any others contemplated?


Mr. Paul Langlois (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, the answer to this question is as follows: 1. Cost to date, $13,500. Estimated cost, $16,910.
2.	To provide access for members of parliament who park in the areas north of the centre block.
3.	One freight entrance and nine pedestrian entrances. No others are contemplated.


BUILDING PROGRAM, FROBISHER BAY
Mr. Dinsdale: 1.	Have tenders been called for a major building program at Frobisher Bay and, if so (a) what companies submitted tenders (b) who was the successful tenderer and at what price?
2.	Does the Department of Indian Affairs and Northern Development operate the building taken over from S.A.C. and, if so (a) what accommodation is available in this building (b) is it fully utilized?
3.	What supplementary facilities will be made available under the new building program?


Joseph Jacques Jean Chrétien: 1. (a)
Tenders were submitted by the following: Ron Engineering and Construction Ltd., Ottawa; Solar Construction, Lockerbie & Hole & Batoni-Humford, Edmonton; Janin-Tower Co., (joint venture) Montreal 16; A. H. MacLeod & Son (Contractors) Ltd., North Vancouver, B.C.; Tankoos Yarman Ltd., Pitts Quebec Ltd., Fruchter & Kagan Real Estate Ltd., and W. Sefton & Associates Ltd. (b) The tenders are still under assessment.
2.	(a) The S.A.C. building has been taken over by the Department of Indian Affairs and Northern Development and operated as a federal building. It is providing accommodation for 144 single personnel, office space, stores, sub-division of the R.C.M.P.; Department of Transport airport services, and vehicle storage and maintenance of vehicles for the Department of Transport and the Department of Indian Affairs and Northern Development, (b) The building is fully utilized.
3.	The Department of Indian Affairs and Northern Development is planning a vocational school and hostel at Frobisher Bay and it is the intention to convert the existing federal building into a hostel. This made it necessary to provide an apartment building,
Questions
office and housing called for in the tender referred to in part 1. In addition, the tenderers have submitted proposals for supplementary facilities such as a hotel, shopping centre, recreational facilities and additional housing.


* SECOND NATIONAL PARK, SASKATCHEWAN
Mr. Souiham: Has the government's statement on April 22, 1965, that a second National Park would be established in Saskatchewan at an early date, been implemented and, if not, when does the government intend to commence this development?


Joseph Jacques Jean Chrétien: No. The
government would be prepared to commence development of a second National Park following agreement being reached with the province of Saskatchewan as to the site and the necessary lands being made available by the province.


SECURITIES COMMISSION
Mr. Fortin: 1.	What is the present status of the plans for the establishment of a Canadian Securities Commission?
2.	Will the government lay before the House the report of studies prepared in this respect?
3.	Will legislation concerning securities be presented at this session?


Stanley Ronald Basford: 1. These plans are to be discussed at a meeting of the federal-provincial committee of officials on financial institutions and securities regulation on October 25.
2.	No. These studies are confidential reports prepared for the minister, of the kind that are normally regarded as privileged.
3.	Yes.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Skoberg: 1. What was the total amount of benefits received by each municipality lying within the boundaries of the federal constituency of Moose Jaw through

Oclober 16, 1968
Motions for Papers
participation in special projects under the Municipal Winter Works Incentive Program since its inception in the winter of 1958-59?
2. What was the total amount of benefits received by each municipality lying within the boundaries of the federal constituency of Swift Current-Maple Creek, through participation in special projects under the Municipal Winter Works Incentive Program since its inception in the winter of 1958-59?
Return tabled.


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise to direct the attention of the government to question 275, which reads:
In the report of the Company of Young Canadians for 1967-68 there is an item that $489,019 was expended for consulting and professional fees during the year.
From the time the report was made requests have been made of the Company of Young Canadians for information as to how this amount was made up, and the answer given is that no one will be furnished with the information unless parliament requests it. This question has now been on the order paper for three weeks. Having regard to the flagrant expenditure made by this group which has been unaccounted for I should like to ask the government to assure that an answer will be given at once.


Gérard Pelletier: Mr. Speaker, the question was passed on to the Company of Young Canadians as soon as it was asked. The Company of Young Canadians told us that they would need at least three weeks to prepare a statement of these figures from their accounts. We should now receive this statement quite soon.


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wonder whether I might be permitted to ask the minister of regional development when I can expect an answer to question 82 on the order paper. This matter is very vital to my constituency.


Righi Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, while the minister of regional development is looking up question 82 I should like to bring to the attention of the house that the record discloses we have so far answered 48.2 per cent of all questions on the order paper, which we think is pretty good.


Mr. Woolliams:: That was a failure when I went to school.
[Mr. Skoberg.l


MOTIONS FOR PAPERS
Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, motions for papers Nos. 20 and 25 are acceptable to the government, subject to the usual reservations concerning privileged papers and authorization of the governmental authorities concerned.
Mr. Speaker, I ask that the remaining motions be allowed to stand.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, on a point of order, I understand there are a number of documents of a confidential nature; but it seems to me, and I hope I am not being excessively technical, when such a request is made in respect of the production of certain documents, an explanation in some detail should be given so the house will be aware of the situation, rather than a blanket permission being extended to the government to withhold documents. I make that suggestion at this time, and I hope the parliamentary secretary will bear that in mind.


DIRECTIVES RESPECTING NORTHERN HEALTH SERVICES
[Stage Direction]
Motion No. 20-Mr. Dinsdale:
That an Order of the House do issue for a copy of the directives issued by the Department of National Health and Welfare last February and March indicating that health services to Eskimos and Indians were to be cut back in the interest of economy and the further directive issued in April rescinding the original order and restoring traditional health services and finally the further directive issued on July 15 restoring the earlier cut backs.
Motion agreed to.

[Stage Direction]
Motion No. 25-Mr. Howard (Skeena):
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of all telegrams, correspondence and other documents exchanged between the government or any agency or department thereof and any other person, company organization or group relative to the sale of buildings and equipment comprising the former Department of Public Works property known as Camp Muskwa at Mile 295 on the Alaska Highway.
Motion agreed to.
October 16, 1968	COMMONS

[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the fact that the contents of the report of the royal commission on security are already public knowledge, could the Prime Minister inform the house whether he has received a copy of the report and when it will be tabled in the house?


Righi Hon.   P.-E. Trudeau@Prime Minister: No, Mr. Speaker, I have not yet received a copy of the report, nor do I admit the truth of the premise that it is of public knowledge.


Eldon Mattison Woolliams: Mr. Speaker, I have a supplementary question for the Prime Minister. Could the Prime Minister inform the house how it is that the London Times, a foreign newspaper, carried some facts about the report and passed some reflection on the R.C.M.P.?


Mr. Trudeau:: Mr. Speaker, I am not qualified to speak for the London Times, but I will ask the minister to check whether there is any truth in these allegations.


Eldon Mattison Woolliams: A further supplementary question, Mr. Speaker. I wonder if the Prime Minister is qualified to tell us whether any member of his government or the head of the commission gave this information to the press.


Pierre Elliott Trudeau: Mr. Speaker, we have the utmost confidence in the members of this commission.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the importance which the right hon. gentleman has attached to the proposed reorganization of some departments, and since this reorganization affects pressing matters such as regional disparity and poverty, would the Prime Minister inform the house how soon he intends to bring the legislation governing departmental or government reorganization before the house?
DEBATES	1209
Inquiries of the Ministry


Righi Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, as I have said before in the house, many of these matters have already been attended to, in the sense that many of them could be dealt with by order in council or by transfers between departments, and so do not require legislation. I understand that the legislation itself will come in early in the new year.


David Lewis: A supplementary question, Mr. Speaker. In view of the Prime Minister's answer I direct my supplementary question to the Minister of Forestry and Rural Development. On the assumption that some of the duties respecting regional development have already been placed in his hands, would the minister consider making an early statement to parliament on the establishment he has set up and the programs he is developing to deal with the problem of regional disparity?


Hon. Jean Marchand (Minister of Forestry and Rural Development):: Mr. Speaker, in a few weeks 1 should be in a position to introduce in the house the bill to create the department and at that time I can give the requested details.


David Lewis: A further supplementary question, Mr. Speaker. The "projet de loi" of which the minister speaks will be the bill dealing with government reorganization. The Prime Minister has already informed us that duties have been assigned to various ministers, and I am sure I make the correct assumption when I assume that the duties assigned to this minister are very important. I ask whether he will make a statement about those duties before the bill is introduced.


Jean Marchand: Mr. Speaker, the powers vested in me already existed in statutes and in various programs divided between departments. No other power was granted to me.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Real Caoueiie (Temiscamingue):: Mr. Speaker, this question is directed to the hon. Secretary of State.
Yesterday afternoon, I asked the right hon. Prime Minister if the government or the
1210	COMMONS
Inquiries of the Ministry department intended to order an investigation to determine why the Canadian Broadcasting Corporation gives twice as much broadcasting time to those who want to destroy Canada than to those who want to build and unite it?
Since the hon. Secretary of State is here today, could he tell us whether he intends to order an investigation and to make recommendations to the Canadian Broadcasting Corporation to discharge its responsibilities in a more appropriate manner.


Gérard Pelletier: Mr. Speaker, I do not know the basis of the allegations used to introduce that question, but the hon. member may rest assured that the C.B.C. reminds itself every day of its own responsibilities in the field of information.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Postmaster General. Will the minister advise if as a result of representations from the committee of 35, or other more broadly based bodies, he has decided not to pursue the obviously unpopular measure of Saturday closing of the post offices of this country?


Eric William Kierans: May I beg the indulgence of the house, Mr. Speaker, and ask the hon. member to repeat his question? I am sorry to have to do this.


Heath Nelson Macquarrie: With pleasure, Mr. Speaker. Will the minister advise if, as a result of representations from the committee of 35, or other more broadly based bodies he has decided not to pursue the obviously unpopular measure of the Saturday closing of the post offices of this country.


Eric William Kierans: Mr. Speaker, all efforts to reduce costs or improve efficiency will undoubtedly be received unfavourably by the people who are affected. So far as having come to any conclusion is concerned, I may say I am meeting continuously with all sorts of bodies but have not as yet received any formal invitation or representations from the members of the opposition. But I expect, when we begin second reading of this bill, to be in a position to make a declaration.

DEBATES	October 16, 1968


Heath Nelson Macquarrie: I have a supplementary question, Mr. Speaker. Since all other avenues toward participatory democracy seem to be blocked, will the minister lend his good offices to members of this party in setting up a meeting which will not be held behind closed doors and before which interested members of the public may make representations on this vital matter?


Eric William Kierans: I expect that all such discussions will take place on second reading and in the clause by clause analysis of the bill. I assume also that all the direct mail associations, newspaper publishers and so on who are making representations to me daily are making the same representations to hon. members opposite.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a supplementary question to the Postmaster General. In view of the fact that there is no reference in Bill No. C-116 to the stopping of mail delivery on Saturdays, can the Postmaster General say by what authority he has made this decision?


Eric William Kierans: Under the authority of the powers vested in the Postmaster General. Under the authority parliament has given to him, including the setting of rates on third and fourth class mail without reference to parliament, he can deal with a number of items. He is not doing this on his own authority; these are the regulations of the house.


Mr. Speaker:: Order, please. I am sure the hon. member for Winnipeg North Centre will admit there is some doubt as to the legality of the question he has asked. The hon. member cannot ask questions about the legal interpretation of the powers of the ministers.


Stanley Howard Knowles: May
I then put the following supplementary question to the Postmaster General. In view of the considerable protest there is against elimination of the Saturday mail service, does the Postmaster General not feel that this matter should be submitted for a decision by parliament?


Eric William Kierans: I think after I make the declaration hon. members will undoubtedly explore-

the justification for this decision on second reading.
October 16, 1968


Robert Norman Thompson: Mr. Speaker, my supplementary question is not directly related to the topic of the previous questions, but due to the urgency of the matter I believe it is in order. I wonder if the Postmaster General is aware of the pornographic literature which is being circulated through the mails, and whether any action is being taken about it.


Eric William Kierans: Mr. Speaker, the department has been aware of this since last Thursday. I may say that the material is certainly pornographic; it is obscene and disgusting. The department is taking the following steps: Any person who fills in and returns the card in an attempt to purchase from Evicco Film Company of Copenhagen, Denmark, this kind of film will find he is wasting his time and postage. The various main post offices across the country have been alerted. We are also going to take special steps to prevent the transmission of any such mail to Denmark through the international airports at Montreal and Toronto.
Second, Mr. Speaker, though this material is being distributed in plain envelopes with first class postage affixed and no identification, we are making every attempt to find its source. Of course we would pursue the persons concerned under the appropriate section of the Post Office Act.
Third, and I think I may express a personal opinion, I am so overwhelmed with the nastiness of the material that I certainly would ask the Department of Justice to give serious thought to taking criminal proceedings against the people if we find those responsible.


Mr. R. E. McKinley (Huron):: May I ask a
supplementary question. I realize there have been meetings going on with regard to Saturday delivery, and I wonder if at the commencement of the second reading stage of the post office bill we could be given an indication by the minister that he will be able to announce some measure that will make rural mail subscribers happy. This question can be answered by yes or no.


Eric William Kierans: I will make a declaration at that time, Mr. Speaker.


Hon. J. W. Monteith (Perth):: Mr. Speaker, I should like to ask a question of, I assume it would be, the Secretary of State for External
Inquiries of the Ministry Affairs in respect of this pornographic literature that was referred to earlier in a question put to the Postmaster General. Has the Danish government been informed that the return address of this material is in Denmark?


Mitchell William Sharp: Mr. Speaker, I have not so informed our ambassador in Denmark, but I will investigate and see whether this would be a useful thing to do.


Mr. Roch La Salle (Joliette):: Mr. Speaker, I have a question for the hon. Postmaster General.
As Saturday seems to be the least appropriate day to close post offices, has the minister thought about a different day to apply this new policy?



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Annapolis Valley):: My
question is directed to the Minister of Transport, and I welcome him back in the house. Pursuant to the undertaking given to the house yesterday by the Prime Minister in answer to a question from the Leader of the Opposition, is the minister today in a position to make a statement regarding the Roberts Bank development, and specifically where the federal government exercises jurisdiction and where the provincial government exercises jurisdiction?


Paul Theodore Hellyer: Mr. Speaker, I am very happy to be back in the house, and to see my hon. friend in his place.


An hon. Member:: He has been in the house all the time.


Paul Theodore Hellyer: In reply to the question I may say that some time ago I advised the house we in the department have undertaken studies in conjunction with the Canadian Transport Commission to determine what changes, if any, there should be with regard to port administration and control in so far as the future is concerned. At the present time there are different systems in operation in different

October 16, 1968
Inquiries of the Ministry parts of the country. Each has its advantages and each has its disadvantages. It is considered desirable to look at all these various alternatives in deciding whether a new system should be made applicable to ports such as the one under development at Roberts Bank in British Columbia, and perhaps other ports such as Montreal as well.
I expect this report will be ready for consideration by the end of November. I will take under advisement the possibility of having the report studied by the House of Commons committee on transport and letting them decide, on the basis of evidence that can be brought before them, what action should be taken in respect of it. Subsequent to that I would hope to undertake joint meetings with British Columbia to decide who should administer the various aspects of the port and its development, and perhaps not just that port but all the various ports of the lower mainland.


John Patrick (Pat) Nowlan: May I ask a supplementary question, though I hesitate to do so if it has to cover the whole answer given by the minister. Are we to understand from this answer the present situation is that there is no federal jurisdiction or control over the access that links the port development with the other federal railways, and that there is no undertaking between the provincial government and the federal government respecting that access? Do we have to wait a month or so until this report is received?


Mr. Speaker:: Order. In my view the supplementary question is argumentative.


John Patrick (Pat) Nowlan: May I put the question in another way. I was trying to simplify it.


Mr. Speaker:: Order, please. I will allow the hon. member to ask the supplementary question, but I remind him that we have only 30 minutes today and there are many other members who are seeking to ask questions.


John Patrick (Pat) Nowlan: I appreciate that, Mr. Speaker, but this is of particular concern to the people on the west coast. I should like to ask the minister specifically whether the federal government has agreed to allow provincial jurisdiction over the access between the port facilities and the federal railways. Has there been a firm agreement that the provincial government will control this access?


Paul Theodore Hellyer: Mr. Speaker, I am not sure that I completely understood the purport of

my hon. friend's question. If he is asking whether there will be equal access to the port by all Canadian railways without discrimination, protecting the shippers in ah parts of Canada, the answer is yes.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I have a supplementary question that I have no hesitation in asking. On Friday of last week I asked the Prime Minister about this matter and he suggested I ask the minister when he was back. Therefore I ask him whether as a result of his investigations the questions of financing and jurisdiction are going to be settled.


Paul Theodore Hellyer: I hope so, Mr. Speaker. That is the purpose of the inquiry.



AGRICULTURE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, yesterday I asked a question regarding the very serious economic condition of farmers in western Canada. The question was directed to the Minister of Agriculture and also to the Minister of Trade and Commerce. I would ask either of these ministers now, who according to the revised roster should be in the house, whether they can answer my question.


Pierre Elliott Trudeau: Mr. Speaker, both these ministers are attending the national grains council in Winnipeg, but there are in the house ministers who will either answer the question or take it as notice.


John George Diefenbaker: Mr. Speaker, it is difficult to know to whom to direct a question. These ministers, according to the roster, are supposed to be here.


John James Greene: Mr. Speaker, as Acting Minister of Agriculture I would deem it a great privilege to answer that question.


John George Diefenbaker: Now we have it shuffled out, Mr. Speaker; the roster has been rerevised. I know the minister's interest in the west and in agriculture in general, and I should like to ask him what has been done regarding an assessment of the situation in western Canada at the present time by way of preparation for action to be taken to meet this very serious problem.
October 16. 1968


John James Greene: Mr. Speaker, as the Prime Minister has indicated there is an initial meeting being held of the national grains council, or at least of the co-ordinating committee prior to the formation of the council in the west, and certainly the very grave problem that affects our western farmers at this time, I can assure the right hon. gentleman, is under very active consideration by the Minister of .Agriculture and his entire department.


John George Diefenbaker: Mr. Speaker, could the minister let the house know what action in particular is being taken? As far as the grains council is concerned, this council will not meet the problem faced by the farmers in western Canada today.


John James Greene: Mr. Speaker, with regard to any specific action requiring legislative authority, or any specific action that the house should be informed of to meet the very serious situation that exists in the west, if special action is necessary, I am sure the Minister of Agriculture would make an announcement in this house in due course. It may well be that with P.F.A.A. and other emergency measures that are currently available under federal legislation the problem can be met under existing agencies.


Mr. J. H. Horner (Crowfoot):: A supplementary question, Mr. Speaker, which I should like to direct to the Prime Minister or the Acting Minister of Agriculture. Will either of these gentlemen confirm the rumour that Canada's best wheat salesman will be appointed to head the grains council, namely Hon. Alvin Hamilton?


John James Greene: You would not like me to answer that idle rumour.


Mr. Les Benjamin (Regina-Lake Cenire):: have a supplementary question, Mr. Speaker, for the acting minister. Have any plans been made for the delivery of out of condition tough and damp grain and, if so, are they ready for implementation? In addition, has a special allocation of railway stock been made for the movement of that grain to the terminals for drying?


John James Greene: Mr. Speaker, I believe arrangements have been made with the railways. Also I understand arrangements have been made to use the interior elevators in order to help ease the difficult situation that currently exists.
Inquiries of the Ministry


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a supplementary question for the Prime Minister. May I ask the right hon. gentleman why it was that in the absence of the other two ministers, he could not indicate who was the acting minister?



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Mr. Jerry Pringle (Fraser Valley East):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Since a situation of extreme urgency is arising from water developments now taking place in British Columbia, as evidenced by urgent requests from civic bodies in British Columbia, can the minister assure the house that the Canada water act will be introduced in the near future?


John James Greene: Mr. Speaker, this matter is of urgent concern not only to my hon. friend but also to my department and to the government. I wish to assure the hon. member that it is the intention of the government to seek an early opportunity, consonant with the demands on the time of the house, to bring such a water act before this house.


M. Ervin Pringle: A supplementary question, Mr. Speaker. Will the minister refer the subject matter of water use to the standing committee on natural resources and public works?


John James Greene: Mr. Speaker, we will consider appropriate action as to the direction of the bill to a committee when the bill comes before the house.
Mr. Speaker, while I am on my feet, last week the hon. member for Fraser Valley West asked whether progress has been made in the setting of Canadian standards on water pollution to include biological, chemical and physical aspects of the question. As the house knows, the federal government has offered to establish a national advisory committee on water pollution to study and recommend national water quality objectives. I wish to inform him that discussions on this matter have been held with the provinces, and that these discussions are continuing.


Gerald William Baldwin: A supplementary question, Mr. Speaker. Would the minister also refer to this committee the very alarming situation that has developed as a

October 16, 1968
Inquiries of the Ministry result of the extremely low level of the Peace river which has been caused by the improvident arrangement this government-


Mr. Speaker:: Order.


Gerald William Baldwin: -made with the province of British Columbia when the federal government failed to make that government pass the necessary legislation?


Mr. Speaker:: Order, please.



AIR CANADA


[Stage Direction]
On the orders of the day:
Hon. George Hees (Prince Edward-Hasf-ings):: Mr. Speaker, I have a question for the Minister of Transport. Since item No. 24 on today's order paper gives Air Canada the right to enter the capital market and sell its own securities, and since this underlines the need for having as president of that air line a man of great ability in air transport matters, is the minister now in a position to advise the house when we may expect the announcement of the appointment of such a man?


Paul Theodore Hellyer: Mr. Speaker, I will be glad to draw the hon. member's question to the attention of the board.



CONSUMER AFFAIRS


[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. In view of the report of the director of investigation and research made pursuant to the Combines Investigation Act that the Batten report contains no convincing evidence of excessive grocery prices on the prairies and that consequently no prosecution is warranted, and in view of the director's further finding that a few of the largest grocery chains have a degree of economic power-


Mr. Speaker:: Order. Will the hon. member kindly put her question.


Winona Grace MacInnis: Mr. Speaker, I am putting it as shortly as I can, but there is no use putting a question unless you know what it is about so I will go straight on-in some regions, which calls for vigilance by the public authorities, what measures is

the branch or department taking to deal with this situation?


Mr. Speaker:: I suggest to the hon. member that the question is very wide in scope and might be placed on the order paper. Alternatively, it might be discussed at the time of adjournment.



YUKON QUARTZ MINING ACT


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: Mr. Speaker, may I direct a question to the Minister of Indian Affairs and Northern Development. Three weeks ago today I asked whether he would be placing on the order paper a bill to amend the Yukon Quartz Mining Act, since some hon. members might wish to study this complex legislation. The minister said that would be done. Could he indicate to the house when it will be done, since on that previous occasion he said it would be done in two or three weeks.


Joseph Jacques Jean Chrétien: Mr. Speaker, I hope that I shall be able to do so within the next few weeks, but I am unable to specify the date to the hon. member.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Is the minister prepared to table the agreement between A.E.C.L. and the French C.E.A. on the exchange of nuclear power information? If not, what portions of the agreement are considered secret?


John James Greene: Mr. Speaker, the government is not prepared to table the agreement, which is looked upon as a matter of internal management of A.E.C.L. with respect to the upholding of its competitive position in world markets. It is deemed that in order to maintain the efficiency and competitive position of A.E.C.L., it is in the best interest of that body to keep this agreement and similar
October 16, 1968

agreements within the ambit of the internal management of that corporation.


Gordon Harvey Aiken: A supplementary question, Mr. Speaker. Since the financial terms of the agreement with Britain are known and have been published, has a money figure been agreed on and can it be announced?


John James Greene: Mr. Speaker, the financial arrangements under the agreement, the dollar terms, cannot be announced. It is deemed by the corporation that the financial considerations are such as to be really part of the business agreement between the two atomic energy agencies. Therefore it would not be in the interest of the competitive position of A.E.C.L. to disclose financial arrangements.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breion-The Sydneys):: Mr. Speaker, may I direct a question to the Minister of Transport. Proposed further cut-backs in employment at North Sydney by the Canadian National will affect freight and express operations. May I ask the minister if he will make representations to the railway and urge that they reconsider their action and not add to the loss of several hundred jobs that has been brought about by the actions of this government and the Canadian National?


Mr. Speaker:: Order, please. The hon. member has made a representation. I do not think he has asked a question.


Robert Muir: Mr. Speaker, this is a most important matter. Far be it for me to question your wise counsel, sir, but this question has to do with the livelihood of many people. May I submit with the greatest deference that it has been the practice in this house over the years, when there are questions regarding curtailment of C.N.R. operations, the closing of branch lines and stations and the disruptions that have resulted therefrom, to direct those questions to the Minister of Transport. With respect, I am asking a straightforward question and I am not making a representation. I am asking the minister if he will make representations to the Canadian National to see whether the situation I have spoken of can be averted.


Mr. Speaker:: The hon. member has made his representation twice. I can only hope it has been noted that many times.
Inquiries of the Ministry RESEARCH



REQUEST FOR REPORT ON PROPOSED QUEEN ELIZABETH OBSERVATORY

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, may I direct a question to the Acting Minister of Agriculture but in his capacity as Minister of Energy, Mines and Resources. Some time ago I asked the minister if he would be prepared to table the report of the scientists relative to the Mount Kobau Queen Elizabeth observatory. The minister said he would take the matter under consideration. I have not had an opportunity to determine what decision the minister has arrived at. Will he make the report public?


John James Greene: Mr. Speaker, the
suggestion of the hon. member is still under consideration and is being discussed with all parties we feel ought to have a voice in the ultimate decision as to whether this report should be tabled. No decision has yet been arrived at as to whether it would be in the public interest to table this report.


Frank Howard: A supplementary question, Mr. Speaker. Can the minister indicate how long it might take before a conclusion will be reached?


John James Greene: Mr. Speaker, in parliamentary terms it will be in the not too distant future.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I wish to direct my question to the Minister of Indian Affairs and Northern Development. On September 13 last I asked the minister if the government would consider paying the cost of legal counsel of the Indian people's choice with respect to the consultations going on having to do with amendments to the Indian Act. The minister said he would consider that request. Could he say what decision has been arrived at?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have considered that possibility but, at the present time, we do not think that it would be appropriate to do so. If, later on, during the second round of negotiations there is a change in the situation, we might reconsider our decision.

October 16, 1968
Ruling by Mr. Speaker



FISHERIES


[Stage Direction]
On the orders of the day:
Mr, Frank D. Moores (Bonavisla-Triniiy-Conception):: Mr. Speaker, may I direct a question to the Minister of Fisheries. Is it the intention of the government to renew the deficiency payment to the east coast frozen fish industry when this program expires in the near future?
Hon, Jack Davis (Minister of Fisheries):
Mr. Speaker, we shall have to develop another program to take its place. The current program will terminate at the end of this month.



REQUEST FOR RESTORATION OF SALT SUBSIDY

[Stage Direction]
On the orders of the day:
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, considering the serious economic situation facing Newfoundland fishermen, is the government considering reinstating the salt rebate that was granted to our east coast fishermen?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, the answer is no.


Mr. Speaker:: Order, please. I ought to inform hon. members that we have already gone beyond the time allotted to the question period, by a few minutes. I felt that hon. members who did not sit in the front benches and who had not had an opportunity to ask questions ought to have the opportunity to do so. That is why today we went beyond the time allotted to the question period, by a few minutes.



PRIVILEGE


Mr. Speaker:: If hon. members will allow me perhap I might be permitted to unburden myself of a weighty opinion relating to a point raised yesterday in the house on a question of privilege.
At the opening of the sitting yesterday the hon. member for Cape Breton-East Richmond (Mr. Maclnnis), rising on a question of privilege concerning the attendance in the house of ministers during the question period, proposed to move:
That the matter of scheduling of ministers in the house and the general conditions affecting the daily question period he referred to the special committee on procedure.

In the course of his argument the hon. member raised two distinct questions. On the one hand the hon. member referred to rulings of the Chair dealing with questions directed to ministers "in capacities other than of departments they represent". He has raised as a second point the question of the scheduling of attendance of ministers in the house.
In considering the first point I have read carefully the reference at page 3756 of Hansard for June 1, 1966, the page to which the hon. member alluded. On that occasion a notice of question had been filed seeking information from the Minister of National Health and Welfare, presumably in his capacity as minister for Nova Scotia. A ruling was then made to the effect that a question must be addressed to a minister in relation to his administrative responsibilities.
It seems to the Chair that there is nothing inconsistent between the ruling made on that occasion and any decision or ruling of the Chair in relation to the recent procedure in asking questions of acting ministers.
The very limited ambit of the previous ruling was to the effect that a minister may be asked questions relating to a department for which he has ministerial responsibility or acting ministerial responsibility, but a minister cannot be asked nor can he answer questions in another capacity, such as being responsible for a province, or part of a province or, again, as spokesman for a racial or religious group.
As I stated when this very point was raised by the hon. member on Friday last as a point of order, it has been a common occurrence for many years to have ministers reply to questions dealing with departments for which they have an acting responsibility.
With reference to the second argument advanced by the hon. member, I expressed my concern yesterday about two aspects of the proposed question of privilege and the motion based thereon. In the first instance I referred to citation 104(3) of Beauchesne's fourth edition wherein it is stated in part:
[DOT] (3:20 p.m.)
A matter of privilege which claims precedence over other public business should be a subject which has recently arisen and which calls for the immediate interposition of the house.
The Chair might again refer to and read part of citation 104(5) of the same authority, as follows:
As a motion taken at the time for matters of privilege is thereby given precedence over the
October 16. 1963

pre-arranged program of public business, the Speaker requires to be satisfied, both that there is a prime facie case that a breach of privilege has been committed, and also that the matter is being raised at the earliest opportunity.
The attendance system to which objection is taken was proposed to the house approximately two weeks ago. Since then the proposal has been referred to daily by a number of hon. members. Questions have been asked about it, and it has been the subject of a number of points of order. It was also considered at length in connection with the estimates of the President of the Privy Council. However, it has not been advanced until now as a question of privilege. I find it rather difficult to disregard the many precedents to the effect that a question of privilege must be raised at the first opportunity.
The hon. member for Winnipeg North Centre (Mr. Knowles) in the course of his argument reminded the Chair that there is no specific provision in the rules for the attendance of ministers on specific days. Provisional standing order 39(5), as well as long established practice, provide for the right of hon. members to ask oral questions, over and above written questions consigned to the order paper, in urgent circumstances. At the same time the citations and precedents are clear on the point that while a member has a right to ask a question he cannot insist on an answer. On this point I refer hon. members to Beauchesne's fourth edition, citation 181(3), which states "A refusal to answer cannot be raised as a question of privilege nor is it regular to comment on such refusal."
The third point I would like to make has reference to the motion itself which would be put to the house for debate and determination if the procedural requirements were satisfied. As hon. members know, a motion of this nature forms part and parcel of the suggested question of privilege. The redress sought by the motion has to be considered in determining whether the question can be accepted as a valid prima facie question of privilege and if the motion is to be put to the house for debate.
The specific motion proposed by the hon. member for Cape Breton-East Richmond is in my view more in the nature of a substantive motion. What is being proposed is not so much that an alleged breach of hon. members' privileges be considered, possibly by the committee on privileges and elections, but that the proposed system of ministerial
Judges Act
attendance during the question period be considered, along with other procedural changes, by the special committee on procedure.
With respect, I submit that this type of motion is essentially a substantive motion and one which therefore cannot be moved without notice as provided by standing order 41.
For these reasons-and I can assure hon. members after giving the matter much serious thought-I do not find it possible to put the hon. member's motion to the house.



JUDGES ACT


John Napier Turner: the second reading of Bill No. C-114, to amend the Judges Act.
He said: Mr. Speaker, at the conclusion of the resolution stage of this bill I undertook to make a short statement at the second reading stage and, as best I could, to answer the questions that were put to me while we were in committee. I think, sir, that hon. members are well aware that the British North America Act provides that the provinces have responsibility for the "administration of justice in the province, including the constitution, maintenance and organization of provincial courts, both of civil and of criminal jurisdiction ..." The salaries, allowances and pensions of superior and county court judges, pursuant to the British North America Act, are to be fixed and provided by the parliament of Canada. Those two provisions are found in articles 92(14) and 100 of the British North America Act.
The legislature of Ontario earlier this year mnended The County Judges Act of the province of Ontario to provide three additional judicial positions for the counties of Lincoln, Middlesex and Essex. The amendment received royal assent in Ontario on March 28 of this year. I am informed by the department of the provincial attorney general that these three additional positions are required largely because of the increasing work load carried by the county courts, in large part due to the recent introduction of the Ontario legal aid plan.

As to the amendments to the Courts of Justice Act of the province of Quebec, a similar situation arose because of the new jurisdiction of the Superior Court in divorce matters which has increased a work load which was already extremely heavy.

October 16, 1968
Judges Act
The Quebec legislature provided tor 11 new judgeships for the Superior Court of Quebec, namely three for the judicial appeal district in Quebec and eight for the judicial appeal district in Montreal.
As far as the judicial appeal district in Quebec is concerned, I understand that one of the three judges will be assigned to the new jurisdiction assumed by the province in divorce matters. And in the judicial appeal district of Montreal, I am advised that five of the eight judges will be assigned to that new jurisdiction.
The other appointments result from the increased work load of the courts. The Quebec law authorizing the appointment of eleven new judges was given royal assent on July 5, 1968 and the section dealing with the increase in the number of Superior Court judges is to become effective on the day of proclamation which, I am told, will be within a few days.
Hon. members are aware, Mr. Speaker, that such amendments to the Judges Act are part of the ordinary business of a session, since the work of the courts reflects to a large extent the population increase as well as other factors affecting the life of a community.
In the two cases in question, the provinces have asked us to proceed with the necessary appointments to fill the new posts within a short period.
The proposed legislation will authorize the payment of the prescribed salaries and will thus make it possible to proceed with the appointments.

I might say that the associate chief justice of the Superior Court of the province of Quebec advised me that he estimates that the number of divorce petitions that will be presented in the province of Quebec, in the first year of the assumption of jurisdiction by that province, will be 3,000 to 4,000, and that 80 per cent of these petitions, roughly 2,500, will probably be presented in the judicial appeal district in Montreal.
I should now like to deal briefly with some of the points that were raised by hon. members at the resolution stage. The hon. member for Calgary North (Mr. Woolliams) said he had some concern about the habit of some judges reserving decisions for an inordinate length of time. I think every practising lawyer has undergone the burden of having the decisions in cases he has pleaded before the

courts reserved for a year, two years, and sometimes longer.
[DOT] (3:30 p.m.)
I am sure the hon. member knows that the immediate responsibility in the administration of justice would lie with the attorney general of the province concerned and, of course, in so far as the administration of a particular court is concerned, with the chief justice. I can assure him that if I were to receive any complaints about the time elapsing between the hearing of a case and the rendering of a judgment I would of course refer this matter to the attorney general of the province and the chief justice concerned, in so far as my jurisdiction allows, and ask for a report. There is a good deal of substance in what the hon. member says.
I am afraid at this stage I cannot make any comment upon what he said at the resolution stage about the amendment to the Supreme Court Act which is now before the other place. He referred to some remarks made by Senator Roebuck. There will be an opportunity in the proper forum for me to address myself to that subject. I am sure he understands that the privileges of the other house need to be respected. In this case the legislation is currently before the other place.
The hon. member referred to the confusion which seems to have arisen in Ontario between two conflicting judgments at first instance on the matter of divorce. I understand the judgments have now been referred to the court of appeal for Ontario. They relate to the rules of procedure of the Supreme Court of Ontario involving substituted service in the case of a desertion. As I have said, if the Divorce Act itself turns out to have gaps and ineffective provisions in it, then, of course, I would consider it my duty to introduce amendments to the act after a sufficient period had elapsed to give the act a fair trial. I also suggest it is my view that there might be latitude within the present rules of procedure of the Supreme Court of Ontario to remedy any defect in the rules as they affect the administration of the Divorce Act.
I wish to take issue with the hon. member for Calgary North in respect of one aspect of his speech. This has to do with his remarks concerning the Exchequer Court of Canada. When he said that the judgments of the exchequer court tend to lean toward the crown I am sure he did not mean any reflection upon the independence or impartiality of those judges. I am sure also that when he
October 16. 1968

described this court as a costly one he probably was referring to the taxation process before the court which perhaps does not accord to counsel the same costs that would be accorded to them before a court of provincial jurisdiction. He might like to make that clear when he replies on second reading. I want to stress in the strongest terms my confidence in the Exchequer Court of Canada. I must rebut him with all the vigour I can summon.
With the greatest respect I must say that I think the accusation that the procedure of the exchequer court is cumbersome and costly should be rebutted also. It is my view, particularly in view of the recent revision of the rules undertaken by the president of the court, that it is probably the easiest court in the country, from a procedural point of view, for a private practitioner to practice before. Certainly in practice it was my experience that the proceedings moved faster and that the issues in a trial were reached quicker than in comparable courts of concurrent jurisdiction.


Eldon Mattison Woolliams: Mr. Speaker, I wonder whether the minister would permit a question. I can understand why he is now, as the Minister of Justice, making a defence of the court, but would he not admit that in cases of expropriation where land is taken by the crown from citizens of the country it is most costly to get experts to valuate the land and come into court to give evidence? Would he not also agree that there is a great deal of expense involved because of the necessity of making chambers applications in Ottawa from as far away as Vancouver and Calgary?


John Napier Turner: I should like to take issue with the first example given by the hon. member. Surely any professional expenses incurred in an expropriation case relating to the fees of an assessor or the fees of a professional witness would be incurred by any litigant who would appear before any court. This does not relate to the procedure of the exchequer court but rather to the fact that professional witnesses are called by one or more of the litigants. On the question of counsel having to come to Ottawa, I may say that there is something to be said for decentralization of the administration of the court-


Eldon Mattison Woolliams: And the cost.


John Napier Turner: -and I am
looking into that. It has been my experience that it is easier for counsel and the parties to arrive at the real substance of the matter in
Judges Act
this court which is free from procedural wrangles and technical difficulties than it is before any other court of first instance.
As a matter of fact, I think it is worth considering the use of the exchequer court as a tribunal with general jurisdiction in appeal from administrative tribunals in this country. At the moment an appeal from the Canadian Transport Commission or from the tariff board can be made on a question of law or on a question of mixed fact and law only by way of a petition for leave to appeal to the Supreme Court of Canada. I think a good deal could be said for widening the jurisdiction of the exchequer court to give it a trial division and an appeal division. It seems to me that the right of appeal from fact-finding bodies is inadequate under our present law. I believe that if the exchequer court were broadened to include an appeal division this would fill that gap and also take some of the onus off the Supreme Court of Canada.
The hon. member for Fundy Royal (Mr. Fairweather) asked me how many county court judges in Ontario now occupy dual positions. He was speaking of judges who might assume temporary positions on boards and so on. I am afraid I cannot answer that question directly because no recent inventory along the line suggested by the the hon. member has been taken. So far as I know, however, we are not aware of any abuses and have had no complaints. I think the hon. member will recall that when the Judges Act was last amended it defined the position of judges fairly clearly. There is now a general provision in section 39 of the Judges Act which precludes a judge from receiving any additional salary or remuneration for performing any duty or service, whether judicial or executive, on behalf of the government of Canada or the government of a province, although of course he is entitled to reasonable travelling and other expenses while he is away from his ordinary place of residence.
The hon. member for Fundy Royal asked me what I thought of the ethics of retired judges returning to practice law before the courts. I should say that the practice has caused a good deal of controversy. I have found myself before the courts in an embarrassing situation against lawyers who have recently sat as judges on the bench of a court and are now practising again before that court. A good many barristers and judges feel that retired judges ought not to practice before the courts again and certainly not

October 16, 1968
Judges Act
before courts of which they were once a member. There is no departmental policy in this regard. Naturally this is a matter for the courts themselves and for the provincial attorneys general in respect of the administration of justice within their province. I think any judge who reassumes practice, if that is his intent, would have to rely on his own tact and propriety with regard to which court he decides to practice before.
The hon. member for Fundy Royal also asked me about reserved judgments. I hope I have dealt with this question fairly in my answer to the hon. member for Calgary North.
[DOT] (3:40 p.m.)
Finally, the hon. member for Broadview (Mr. Gilbert) asked me what my general criteria were in the selection of judges.


An hon. Member:: That is a good question.


John Napier Turner: I am not
going to duck this question, but I did hear a friendly snicker from the other side. I think members will agree that one of the most delicate of the functions of the Minister of Justice is the recommendation to the governor in council of the appointment of judges.
I have adopted a consultative process with members of the bar and in certain cases with members of the bench who have had an opportunity to observe the lawyers practising before them. I have consulted leading citizens everywhere and a special committee of the Canadian Bar Association. Before I submit names to my colleagues in the government I am satisfied that on the basis of professional qualifications the men, and I hope some day the women, I am prepared to nominate have received the professional approval not only of that committee of the Canadian Bar Association but of the committees of the provincial associations and in many cases leading lawyers who have-


Mr. MacEwan:: Mr. Speaker, I should like to ask the minister whether this procedure was followed in respect of the recent appointments to the bench in Nova Scotia?


John Napier Turner: Indeed it was, Mr. Speaker, and I think for obvious reasons the hon. member ought to be delighted with the appointment of a judge to the court of appeal, the retired president of the Canadian Bar Association. I am prepared to say that was a good appointment.


An hon. Member:: Take it easy, John.


Howard Russell MacEwan: You cannot say that about one of the other two. I just wanted to know whether the minister had consultations in respect of all three appointments.


John Napier Turner: I had consultations in' respect of all four appointments. There was a promotion from the trial division to the court of appeal. I consulted about all four and they are all first rate lawyers. My hon. friend may not agree with this estimation of all of them but I can assure him as a lawyer that I was satisfied.


Howard Russell MacEwan: Two of them were my classmates, so they are not bad.


John Napier Turner: What they have not got in the way of public prominence they now have in the way of security.
Let me say with all sincerity that as far as I am concerned the chief criterion is competence. So long as I am able to hold this portfolio, no one who is not competent will receive an appointment to a court in this country, and I give that undertaking to members of this house.
The hon. member asked me what I looked for. I ask hon. members what they would look for if they were trying to nominate somebody from their communities to an appointment to a superior court bench. I think we would all want to see integrity and honesty. We would all look for moral courage, because some of the decisions that face our judges are difficult. I am sure we would all want decisiveness and legal ability. I look particularly for men with experience before the courts. I think that is a condition precedent that we all agree on. If a man is going to preside over a tribunal he should have practiced in as many different jursdictions as possible. A judge must have patience, and good health is a requisite. Certainly he must have consideration for others. These qualities commend themselves to me in great measure.
I should like to say also that as far as I am concerned the following characteristics are less relevant. They include past political activity, high earnings in the practice of law, civic activity and activity in professional associations. I expect to be judged in turn by the members of this house on the appointments that this government makes. Judges should be selected on merit and competence. I think they should be independent and not
October 16, 1968

appointed on the basis of reward or favour. As Thomas Jefferson said:
Judges should always be men of learning ... they should not be dependent upon any man or body of men.
Since the quality of our justice will be measured by the quality of our judges, there will be no other aspect of the responsibility of this department which will involve more of my time and my conscience than this.
Let me draw to the attention of hon. members the fact that the English high courts of justice have for centuries been the centre of English justice. Those of us who are dedicated to the law cherish the invaluable traditions and enlightened jurisprudence that it has spawned. I see on the other side a number of learned counsel, some of whom I have pleaded against.


Erik Nielsen: And with.


John Napier Turner: Yes, and with. In 1882 the home of the law courts was moved to its new building. At the end of the dedicatory ceremony Queen Victoria concluded her address with these words. I do not know who wrote them; it might have been the Lord Chancellor. She said:
The independence and learning of the fudges supported by the integrity and ability of the other members of the profession of law are the chief security for the rights of the crown and the liberties of the people.


Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I listened attentively to the comments of the Minister of Justice (Mr. Turner), of course, as he was giving us the reasons for his introducing an act to appoint eleven additional judges of the Superior Court of Quebec and three additional judges for county and district courts of Ontario.
The reasons given by the minister are based mostly on the fact that since the provinces have assumed the responsibility of divorce courts, a number of additional judges must be appointed. Some of the actual judges could help those who go before those courts. In my opinion, there are reasons other than the ones given by the minister, namely to follow the recommendations of the provinces which have requested the appointment of additional judges, because as far as the province of Quebec is concerned, more judges have been needed for a long time.
Let us consider the situation prevailing in the districts where we practise our law. I might talk about the district of Saguenay
Judges Act
where I practise law more actively. Cases have been entered on the docket of the Superior Court which have been in abeyance for four or five years. Similar representations have already been made to the government in this house. I did so myself last year when we considered legislation aimed at increasing the judges' salaries.
It is obvious that if the provinces are entrusted with the administration of divorce courts, the result will be for some time an added work load for our Superior Court judges. The minister will admit however that the cases now before divorce courts are latent cases which have been there for a long time, and since the reasons for divorce have been extended, people with problems have naturally decided suddenly and immediately to bring them before the courts. I do not agree with the minister when he says that, according to his information, there would be approximately 3,000 to 4,000 cases on the docket for the first year-
[DOT] (3:50 p.m.)


John Napier Turner: There are not that many until now, but it is expected that 3,000 cases will be put on the docket during the first year.


Martial Asselin: Is the minister talking only about the district of Montreal, the district of Quebec or the whole province?
It is obvious, as I said earlier, that the fact that the provinces have been entrusted with the administration of the divorce courts will give more work to the Superior Court judges. But those courts must try to decide quickly the cases which are submitted to them.
I think also that corrective measures can be taken. The minister is responsible for the appointment of the Superior Court judges in the provinces, but the provinces administer justice under the constitution.
The minister, the federal government are often consulted on the appointment of judges of the Superior Court to federal or provincial royal commissions. We have had examples of that in the past, when judges of the Superior Court presided over royal commissions, federal or provincial, and were absent from the bench for three or four years. In fact, this happened in the case of the inquiry instituted on pilotage. That commission was instituted by us, and we saw a judge devote three or four years to the study of the matter, the hearing of witnesses and the submission of his report to the government.

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I thin It that the federal Minister of Justice should, during meetings of the attorneys general of the provinces, bring the provinces to understand that Superior Court judges should not accept functions other than those to which they have been appointed by the governor in council or by the minister himself. Indeed, when one, two or three district judges are assigned to pseudo-judicial matters, the whole organization, the operation of justice of the province changes immediately in the areas to which those judges were formerly assigned. The backlog of cases to be heard can be blamed on the fact that, often, with the agreement of the Minister of Justice-not the one we now have but some of the former ministers-judges of the Suprior Court were loaned to the provinces for an indefinite length of time to study matters which do not fall within the jurisdiction of the courts or justice, but which are really pseudo-judical.
The Minister of Justice must, when he meets the provincial attorneys general, tell them very clearly that in the future, when the provinces or even the federal government, need someone to preside over an inquiry, they must appoint an expert in the field concerned, swear him in for the duration of the inquiry and give him the powers enabling him to have the same prestige and the same authority as Superior Court judges. To my mind, this would not affect the administration or organization of our courts of justice.
I insist on repeating what I have already said a few times in the house: it is imperative for the minister, our Minister of Justice, to impress upon the provincial attorneys general and the ministers of justice, that this practice must come to an end. Each time we want to establish a commission of inquiry in a province, a judge of the Superior Court has to be loaned for a period of three to four years.
Of course, Mr. Speaker, we are not opposed to the appointment of judges, as provided in Bill No. C-114. The hon. minister has just said that he had set criteria for choosing judges who would be appointed following his recommendation to the governor in council.
It is obvious that the first criterion which must guide the minister, when he chooses a judge of the Superior Court, is the latter's good knowledge of the law. At this stage, I would like to point out that even if, in the past-it may also happen in the future-the minister has appointed a judge who was once a politician, that was not a reason to come to the conclusion that he did not know the law.
[Mr. Asselin.l
On the contrary, very often he shows himself more human because of that.
I do not mean to say that the minister should eliminate a candidate who was involved in politics and who possesses the qualifications described by the minister a few moments ago. A competent man, an honest man, one who knows the law, has a good reputation as barrister and is capable of dispensing justice in a humanitarian way should be considered as a good candidate.
Before continuing my remarks, I should like to ask the minister a question. In his opinion, is the fact that a lawyer was once actively engaged in politics an obstacle to his appointment as judge? As was said earlier, perhaps that depends on the political affiliation.


John Napier Turner: Mr. Speaker, a job in the public service is naturally not an obstacle.


Martial Asselin: That is the answer I wanted to hear from the minister. The fact that a man served his country or his province, or that he was a civil servant, is not an obstacle if he possesses as well the basic qualities mentioned by the minister earlier.
One of my colleagues tells me that it depends on the political affiliation. I hope that when the minister makes his recommendations to the cabinet, he will be able to think of candidates other than those who have served in his party. There are people who have left parliament, who were members of political parties other than the Liberal party, and who are competent lawyers; it would be a gracious gesture on the part of the minister if we could see a few of those names on the list of judges that he will appoint under the legislation he has introduced.
There is also another problem, Mr. Speaker. It is very difficult in several cases, for the minister, to convince a judge who is ill to hand in his resignation, because he is unable to render the services expected of him. I am not talking about the judges on the bench at the present time, but in the past we all know that in order to remove from office a judge who did not want to resign, a petition of both houses was required, and it was a rather complicated procedure. Often the Minister of Justice is placed in a rather difficult position. I think that the minister should also consult the provincial attorneys general to devise a formula or to introduce new legislation so that three or four judges of the Appeal Court be empowered or have the necessary prestige to say to a judge: Your health makes it
October 16, 1968

impossible for you, on the basis of the reports we have received, to carry out your duties on the bench and you have to resign. I do not know how we could introduce such legislation, but I think that we will have to consider, some day, bringing about a change in the way the judges can be removed from office, so that the purposes of justice may be attained.
At the present time, judges can be retired at 75 when companies put their officers or their employees on retirement at 65. I do not suggest that somebody who is 65 years old and over is not clear-headed, is unable to judge and occupy a judge's position but I say that we should consider retiring our judges at 70.
I think that the Minister of Justice should also consider appointing younger people as judges. In the past, we appointed judges when they reached the age of 50, 55 and over, but today the minister should feel free to appoint people in their forties who have all their ability and their health to render the services they will be called upon to perform.
Of course, we agree to the passing of this legislation but, at the same time, we should like the minister to take into consideration the representations which we made concerning the appointment of judges, the administration of the tribunals jointly with the provinces. When federal-provincial conferences are called, he might discuss these matters with the attorneys general because I think that the minister, like everyone else in this house, wants justice to be dispensed in the interest of the ordinary people so as to better serve our society.


Frank Howard: Mr. Speaker, it is with some reluctance that one enters a debate filled with speeches by gentlemen who have the classification "learned" attached to them. I hope I may be able, in ordinary layman's language, to express some views which are understood. Whenever I see a bill of this nature involving justice and appointments by the crown-by the minister or by the Prime Minister (Mr. Trudeau)-I cannot help but be reminded of the campaign slogan of the Prime Minister: "Come, work with me".
[DOT] (4:00 p.m.)
We want to tell the government and the minister that, regardless of all that we know, the Canadian people love Pierre, they trust him and they know he is going to do the right thing in terms of such appointments. We
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know about the just society, about the desire for the new look and about the new politics of the Prime Minister and the Minister of Justice. The era is fast approaching when adherence to a political faith will not be the criterion for appointments to boards and commissions, to the bench, to the Senate and to all of the other places which by tradition have been a haven for those who have been faithful to the party in office. We know this is not going to exist any more.
In that regard I was very pleased to hear the Minister of Justice say that the prime consideration in the appointment of members to the bench will be their competence and abilities. Of course, other ministers before him have said the same thing. Saying it does not mean it is going to be true, but we trust that Pierre and his cohorts will do the right thing and will bring about the new politics.
We hope that the practice of past governments of appointing to boards and commissions only people of their own political stripe will come to an end. We believe, like the government does, in the new era of politics. But we know that there are some Liberals who do not believe in it and do not want to put it into practice. One of them, for instance, is John Matheson who was parliamentary secretary to the Prime Minister. He does not believe in the just society. He believes that there should be political appointments, and that is why he accepted one not too long ago as a county court judge. However, Mr. Matheson is a rare individual.
Paul Tardif is another rare individual in the Liberal party. I gather that Paul Tardif did not run again as a candidate in the area now represented by the Minister of Justice and that he is one of those rare individuals who believe in political appointments. That is why he accepted an appointment as a judge of the citizenship court. This is not a political appointment but one based purely on competence. Of course, with all respect to Paul Tardif, during the time he was here he did not prove his competence to any marked degree.
There is also James Byrne, the former member for Kootenay East, who did not run again. He does not believe in the just society but he does believe in political appointments. He does not believe in the new politics because he accepted a $19,000 a year membership on the immigration appeal board. I know the minister does not like to hear this but I could go down the list and recite the names of many others like Roger Teillet, Jacques

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Tremblay, Lloyd Axworthy, Paul Martin, and Mr. Robichaud. The list is interminable.


Stanley Howard Knowles: Do
not forget Jack Pickersgill.


Frank Howard: Yes, but at least Mr. Pickersgill had the honesty to come to parliament and say, "I want to set up a commission so I can be appointed as its head".


An hon. Member:: Does the hon. member know of a better man for the job?


Frank Howard: We say, go ahead Jack, that is the way to do it.


An hon. Member:: Is he incompetent?


Frank Howard: Quite frankly, I wish that every member of this government had the competence of Mr. Pickersgill. We would be a lot better off in this nation because I have great admiration for Mr. Pickersgill's ability. It is too bad he is gone and there is no substitute for him in the present government.
We know the Prime Minister does not want to follow the old practice. However, more is required than just saying that political adherence is a less valuable asset than some of the other assets considered in appointments. Action of the proper kind is required not only in regard to the appointment of 14 additional judges now but with respect to future appointments not only to the bench but to boards and commissions. We hope this will take place. We hope the Prime Minister will resist the opportunity of appointing his friends to boards and commissions, which of course he has not resisted with too much vigour up to now. But we live in hope and we trust Pierre. We believe that the words of the Prime Minister, "come, work with me", will not only apply to his political friends but will also apply to other people, and we will wait to see whether or not this will be so.
One important point with respect to the bill concerns the matter of justice before the courts. I spoke to a couple of my colleagues in the New Democratic party who are lawyers and they told me that, generally speaking, they try to refrain from using the word "justice" in regard to appearances before the courts because in fact it does not always prevail. There is a legal saw to the effect that for justice to prevail it should not be delayed. In other words, there should be ready access to the courts, whatever the point of litigation or case may be. There should be no impediment in the way of an individual or individuals [Mr. Howard (Skeena) .1
coming to court and receiving a speedy hearing and a speedy decision, regardless of what it may be.
Although I have no personal experience in this matter I have spoken with lawyers who have told me-perhaps the Minister of Justice has also had this experience, as well as the hon. member for Calgary North (Mr. Wool-liams) who spoke at the resolution stage and the hon. member for Charlevoix (Mr. Asselin) who is a lawyer-that it is not difficult to find cases being delayed for months before they receive a hearing before the courts. In many cases people who are charged with a criminal offence linger in jail waiting for their case to come to trial. In the case of people involved in civil cases there is often an interminably long delay in having their cases brought before the courts, partly because of the calendar of the court, partly because of the fact that judges are overworked and overloaded with cases and also partly because of requests for delays on the part of counsel for either of the parties.
The last factor is one with which I do not think we can deal here because a lawyer has to operate in the best interests of his client and if it is necessary to ask for a postponement he should be able to do so within certain limits. We know there are abuses in this area also and that lawyers with what they consider to be poor cases will ask for remands, delays or postponements hoping that someone will get weary, that they will be able to make an out of court settlement, or will amass some new information to strengthen their case. This is not something with which we can concern ourselves except perhaps in an academic way. We can concern ourselves with court calendars, the work load of judges and so on which result in people being unable to get a proper or speedy hearing of their cases. How this can be done the Minister of Justice will be better able to decide than I because of his familiarity with the structure of the courts and his position now as Minister of Justice. It may require some consultation with the provinces because the administration of justice is in their hands. It may require some amendments to federal statutes or some action on the part of the minister under the authority he has now. I put this forward only as a general proposition about which some action should be taken.
[DOT] (4:10 p.m.)
It seems to me too that the proposition should be self-evident that in order for a
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person to be a good judge he should have been an active participant in cases before the courts. This would give him some understanding of how the court system works, how the judges operate and so on. This should be a requirement before a person is appointed a judge.
Perhaps it might be helpful in this regard to have a system of apprentice judges. These persons would not be appointed as full judges who would immediately start to make decisions on cases but would spend their time as assistants to full-fledged judges. They would spend their time in research and study of the various types of jurisprudence with which a particular court is involved. In addition to adversary training in court such persons would also get some training in the theoretical approach by studying case histories, the way courts operate, the way judges operate and this sort of thing. In this way such a person would work his way into the court system and would then be more competent and a better judge than might otherwise be the case.
I should like to mention a point which is perhaps a bit afield from the bill before us. It concerns a part of our judicial system and I think it could perhaps be dealt with at this time. I shall be brief so I hope Your Honour will not stop me. The provinces of British Columbia and Ontario, and I do not know how many others, have a legal aid system in effect. The system provides legal aid to people who cannot afford to employ a lawyer.
Some time ago the hon. member for Calgary North made quite a telling statement on this subject, the validity of which I accept because of his experience in the field of law. He referred to the fact there are two types of justice meted out in our courts, namely, that which is received by the rich and something else which is received by the poor. I gather that if you are involved in a court case and have lots of money you have the ability to hire top-flight lawyers and expert witnesses who may be required. Ultimately, I understand, you get fair consideration for the money you pay. However, if you are some poor slob who does not have any dough and you have to appear before the courts, the chances are you will not have the financial ability to employ the necessary legal talent to ensure that your case is properly presented to the court. As a consequence the legal aid system came into being under which an individual can obtain the benefit of a lawyer. I gather there is a roster or a rotating process. I hope 29180-78
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it works differently from the roster the Prime Minister announced for the attendance of ministers during the question period. Incidentally, I want to say jokingly that the attendance system instituted by the Prime Minister is not too bad because it allows some incompetent ministers to be out of the house some of the time, so they do not embarrass the government. I do not include the Minister of Justice in that category.


Stanley Howard Knowles: The
three who are here now are not bad.


Frank Howard: In any event, the legal aid system means that a person charged with an offence-I assume this is just in criminal cases and I do not suppose it applies in civil actions-even though he cannot afford a lawyer, is provided with a lawyer. This lawyer receives from some source certain fees. Perhaps I am wrong there, but I have been given to understand that certain fees are paid. I do not know the source of this money. It may come from the provincial government or partly from the bar society. I believe that if money is available from the provincial government for this legal aid system and from the bar association, the federal government, having concern for the quality of justice, should be able to participate with the provinces in financing the legal aid system. Perhaps the system could be expanded into areas where it does not now operate. I do not know whether it is now in effect in all the provinces and the Northwest Territories. I believe the federal government certainly has a moral obligation in this field, particularly because we enact the criminal law. We say what will be a criminal offence. We set up the system for the appointment of judges.
The federal government should be concerned also about ready access to the courts, and particularly that an individual may have qualified legal advice available to him when he appears in a court. I believe the federal government could help this system and expand it by putting up a little bit of the money and working out some co-operative venture with the provinces. I believe this is the sum and substance of what we wish to say. I cannot wind up my speech with a quotation from Mr. Jefferson, as did the Minister of Justice. I can only wind up by hoping that what the minister says he is going to do he will, in fact, do.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, our contribution to the study of Bill No. C-114 perhaps will not be negative since this

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bill, which makes provision for the appointment of eleven new judges of the Superior Court, is insufficient in our view. We are certainly in favour of the bill, but we say to the minister that eleven new judges will not be enough to settle the cases pending in the various courts.
Today, the image of justice unfortunately leaves much to be desired, because of the slow administrative procedure, at least so far as the judicial districts of Montreal, Bedford, Sherbrooke and even Quebec-which I know-are concerned. The delays of the legal process gives the people a distorted image of justice. As a matter of fact, the addition of eleven new judges will not be sufficient to help speed up the hearing of cases.
Having consulted with many lawyers in various Quebec judicial districts, because those are the districts I know best, I reached the conclusion that we do not need eleven new judges to solve Quebec's problems, but rather one hundred. So that the Minister of Justice (Mr. Turner) does not feel this figure to be unduly high, I advise him to look at the docket of cases which have been pending not for six months, but for two, three or four years, which are ready to be heard and in respect of which hearing procedures have been completed. However, there is a shortage of judges and, for that reason, the administration of justice drags on and on, and both defendants and claimants are deprived of the justice they ask for. From a legal standpoint, this has become a scandalous situation.
Some friends of mine who are lawyers have had for years some of their cases pending before the Montreal courts where, in the meantime, solvent defendants have become insolvent before their cases could be heard by the Superior Court. The same situation prevails in almost all the tribunals of the province of Quebec judicial districts. From time to time, it is said that this is due to a space shortage and that there are not enough court facilities. However, some judicial districts have developed a good system whereby, in some places municipal halls have been rented in order to help the judges solve the space problems. This is the case in the judicial district of Bedford, where one or two judges of the Superior Court hold sittings two or three times a week in the Granby city hall, in order to render judgments and to expedite cases on the docket. This method should be adopted in several other judicial districts.
When I hear about the shortage of space and court buildings, it strikes me that after 1

p.m. most courts are deserted. Court sittings begin at 10.30 a.m. and adjourn at 1 p.m. I admit that after hearings judges must refer to the statutes, review their notes, write their decisions and that it is impossible for them to sit during the afternoons. I can understand this situation, but it seeems to me that the Minister of Justice and Attorney General should make representations to the provincial ministers of justice in order to have justice administered in a more expeditious manner. It should be suggested to the latter, if possible, that a number of judges sit in the afternoon and prepare their decision in the evening. Also, other judges could sit during the evening and make out their decision the next day. This method would permit the hearing of three times as many cases in the same amount of time. Yet they would have time to prepare their judgments, to refer to case law and to deliver a just sentence to both the defendant and the plaintiff in a given case. Countless witnesses, subpoenaed for 10.30 a.m. on a Monday or a Tuesday, have to return home without having been called upon because of the slow progress of justice. They have to be called again; a much greater number could be brought in during night sittings.
[DOT] (4:20 p.m.)
I know many lawyers who would not mind acting as counsels during evening sittings under such arrangements. Hearings would therefore take place in the evening as lawyers have office work to do during the day. They would appear in court in the evening, and their cases would be heard much faster instead of having them on the cause-list for three or four years running. Often their cases which were good at the beginning became less so or poor because of the slowness of justice.
The hon. Frederic Dorion, chief justice of the Quebec Superior Court has been complaining about that situation for years. His assistant judge Challies has also been complaining for several years about the shortage of judges for our courts. I am convinced that it is not by appointing only eleven judges today, and especially after giving them another duty to perform, namely divorce cases that they will have to hear in the future, that we will solve the problem of our courts.
For a government which is proud to claim as its motto "a just society", I say that the first duty of a just society is to see to it that justice works more quickly. If our judicial procedures are so complex and lingering that
October 16, 1968

plaintiffs cannot see the day when a judge can here their case, then justice deservedly projects the poor image to which Canadians are unfortunately accustomed.
I think of the numerous cases of car accidents where insurance companies take advantage of the snail's pace of our justice to drag on cases in the courts. The plaintiff who had an accident faces problems; he must pay hospital bills, doctor's bills, the cost of automobile repairs, dentist bills, and though he is often unable to work as a result of an accident; he must go on. But if his case is in the hands of the insurance company with which he is insured and drags on before the court, he can face extreme financial hardships.
This snail's pace allows Insurance companies to drag on and on, and to drive the plaintiff to a position where, before the hearing of his case, and owing to the troubles caused by his accident-and this is but one example-he will have to reduce the amount of his claim, maybe from $25,000 to $5,000. I have seen it happen. This enables the insurance companies to settle for a mere song. And in those cases, plaintiffs are deprived of their right to justice because their patience is exhausted, because they are beset by financial problems, and because they could not come before the court. They have a legitimate claim, but they give it away for a song. Besides, when insurance companies make dilatory pleas to delay the hearing of a case for two or three years, they save interest. Indeed, when a case is settled out of court with the plaintiff, those companies save huge amounts of interest money. As attorneys in this house know, interest applies when a judgment is passed. But when there is no decision, and the case is settled out of court, in most cases insurance companies save interest. Those companies which loaned the money they would be called to pay some day, loaned their money with interest.
Now, Mr. Speaker, here is my argument. When the course of justice is delayed far too long, as is the case at present, that becomes an injustice; only by appointing eleven new judges can we manage to settle thousands of cases pending before the Superior Court in the Montreal area, for instance, and the hundreds of others which lawyers are ready to plead but cannot for lack of judges to hear the cases.


Eldon Mattison Woolliams: Mr. Speaker, I shall only take a few moments
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this afternoon because I think we have already had quite a lot of discussion on this measure.
First of all, I should like to deal briefly with a report that appeared in the Canadian Press stating that in some previous remarks of mine I had criticized the Supreme Court of Canada. I did not raise this matter as a question of privilege but I should like at this stage to refer to what I said, as reported at page 879 of Hansard:
In defence of the Supreme Court of Canada may I say that I think its judges are overworked. The judges of that court do not receive the assistance given to judges of the supreme court of the United States, who have many lawyers behind them to help them in research. In this country our judges have no such facilities and that is why they are overworked, no doubt.
[DOT] (4:30 p.m.)
I went on to say that instead of cutting down the number of cases coming before that court we ought to increase the number of judges.
There was another mistake in the article. It reported that I had referred to the question of jurisdiction as being based on a minimum of $2,000. Actually I think I said that the old minimum was $2,000 and that one could appeal on a question of law or of fact and law. In the new act this will be narrowed down to a question of law. When I read the article it seemed to me that the wrong impression was left on the question of jurisdiction.
As I understand the new legislation which is before the other place and which Senator Roebuck has discussed, it seeks to limit the jurisdiction of the Supreme Court of Canada to cases involving a minimum of $10,000. The jurisdiction of that court is also narrowed considerably to questions of law only. The whole point of my previous speech was, as Senator Roebuck said, that by setting that amount with respect to the jurisdiction of the Supreme Court of Canada, the ordinary people of Canada are debarred from obtaining justice. In other words, jurisdiction is being set on a materialistic basis. Anyone wishing to appeal an action for $10,000 where questions of fact and law are mixed would not be able to appeal to the Supreme Court of Canada.
I now want to reply to some of the remarks the Minister of Justice made about the exchequer court. We expect the Minister of Justice to defend the exchequer court, just as we expect him to defend the R.C.M.P. when

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that body is attacked. Without doubt, someone in the minister's department looked into the matter I am about to raise. Let it be understood that in talking of the exchequer court I am not trying to slight the personnel of that court.


An hon. Member:: Never.


Eldon Mattison Woolliams: I hear some hon. member muttering. If he has something to say, let him stand up and say it.


Some hon. Members:: Hear, hear.


Eldon Mattison Woolliams: Too many people speak from the bottoms of their pants rather than from the tops of their heads.


Frank Howard: What's the difference?


Eldon Mattison Woolliams: If the exchequer court is so full of equity let the Minister of Justice say why the claim of the Indians on the Blackfoot reservation, a claim respecting oil rights, has been before that court for a number of years.
I will tell the minister the reason. The Indians cannot obtain money from the Department of Indian Affairs to pay the costs of a very expensive lawsuit. They cannot obtain justice. Let the minister answer that.
Many lawyers would not raise the points I am raising; they are frightened. No doubt I shall appear before that court again and someone will refer to what I have been saying. I am not afraid. I am not one of those who will stand up and say that everything is fine. I do not believe that all institutions are sacred cows. Sometimes some matters have to be spoken of frankly. That is what democracy is about. If we are to have a just society we must have reforms. We must not allow the status quo to continue if it does not suit our purposes, and here I differ with our conservative Minister of Justice.
The minister cannot in all honesty say that the average citizen of this country is able to litigate in the exchequer court. It is not so difficult for those living in central Canada but for those living in Vancouver, Alberta or even Saskatchewan-


An hon. Member:: Or Newfoundland.


Eldon Mattison Woolliams: Yes, or in Newfoundland- it is extremely difficult to fight expropriation proceedings. Our citizens must come here and fight the Department of Justice itself.
I remember one instance where officers of the department refused to answer certain
IMr. Woolliams.]
questions on examination for discovery. I do not know how many questions one officer objected to answering. Finally we had to obtain a judge's order forcing the department's officers to answer our questions. That was expensive.
Who pays for a lawyer to fly the 2,600-odd miles from Calgary to Ottawa? Who else but the poor old client. The point is that if jurisdiction in these matters were given to the trial divisions of the superior or supreme courts of the province, the average citizen could afford to litigate. At present he cannot afford to.
Our conservative Minister of Justice may not have been the kind of lawyer who represents the average man. He may have dealt with corporations, and corporations can afford the luxury of litigation. The average man cannot. We need reforms in this area if our society is to become a just society.


John Napier Turner: Go on.


George Harris Hees: That is quite true.


John Napier Turner: Go on.


Eldon Mattison Woolliams: That is not all. Everyone knows that the lawyers assigned to defend poor people under legal aid are not of the same calibre as those who are retained by corporations.


George Harris Hees: Hear, hear.


Eldon Mattison Woolliams: We must have reforms in our exchequer court. I could easily say that it is the greatest court in the world and, when I appeared before that court, expect someone to say, "Good old Eldon, isn't he wonderful?" We must have reforms if we are to arrive at a just society and if we are not to have one law for the rich and another for the poor.
Frankly, I am shocked by the rules governing the court and I say to the Minister of Justice that those rules are identical with rules governing certain British courts. Similar rules governing the trial divisions of certain provincial courts were rescinded several years ago. The rules set out how one must come before the court and what steps one must take to do so. Those rules ought to be rescinded and jurisdiction in exchequer court matters given to our supreme and superior courts. The exchequer court, in a manner of speaking, was set up for the benefit of the crown and as such, as many lawyers will tell you, it is pro-crown. If litigants had cases tried in provincial courts they would have a better day in court at less expense.
Ociober 16, 1968

In case the Minister of Justice says: We are not holding anyone up; anyone who wishes may litigate before this court, I ask this question. How many cases having to do with the Green Belt have come before the exchequer court recently? How many people have had to litigate in that court to recover money they were entitled to as compensation for land taken?
[DOT] (4:40 p.m.)
The Minister of Justice talks about justice, but let me tell you, Mr. Speaker, how they took land for the national parks. They filed an order in council with a map in the land titles offices in the prairie provinces. They never notified the owners. The owners only got to know about it when they searched the titles.
I know of one lawyer-I shall not mention any names-who for four or five months asked a simple question with respect to an opinion from the legal officers of the Department of Justice. He never received an answer. Prying out information in order to get into the Exchequer Court is pretty difficult. I have had that experience, and I speak with some experience.
When I say that that court is pro-crown naturally I am not passing a slight on the judges of the court, but I do say that court is set up more to serve the crown than to serve Canadian citizens. I do not think people have really thought about these rules and about how much it costs the average citizen to litigate in that court. The routine is that one draws pleadings as in any court and then one has to make an appearance to find out what the issues are. Then the court makes an order. Some of the judges in that court will assist counsel by travelling to various areas throughout Canada. In that regard they have been most gracious, but the procedure is still costly.
Why do the judges of the trial divisions of the supreme and county courts not have the jurisdiction? Why is this jurisdiction lodged in a special court called the Exchequer Court? I would like the Minister of Justice to say why it must have the jurisdiction. What would be wrong with the trial divisions of the Queen's Bench in the various provinces having that jurisdiction? What is the crown afraid of? What are the great governments that have the staff, the power and the money afraid of when they are litigating? If the minister can answer that question then I will listen to him on reform because I believe in legal reform.
Judges Act
Before he became Minister of Justice the minister made a great speech-I read it in the newspapers-on the subject of legal care. This is something that will come; the minister says it has to come. I point out that this country is having trouble finding enough money for medicare, but we might cut down on legal care costs if we provided less costly litigation procedures whereby the average man could arrive at the door of justice. That is what I am talking about.
When I made one point of criticism of the Supreme Court of Canada I was not criticizing the court itself. I was speaking about a decision in reference to the interpretation of a contract. Lawyers have been criticizing the decisions in cases for years but that does not mean they are criticizing the court. I have said that the court is overworked, that it needs more judges and that in my opinion it has done a great job. I am very thankful for the fact that that court was established in Canada. It was a Liberal government that established it, and it is now the final court of Canada. We no longer need to go to the judicial committee of the privy council in England. That was an important legal reform.
I believe, Mr. Speaker, there is one other hon. member who wants to say something on this bill. We would like to see it receive second reading and, if the other parties agree, there is no reason why we cannot give third reading to it today and pass it.


Some hon. Members:: Hear, hear.


Mr. Andre Fortin (Lolbiniere):: Mr. Speaker, I will make a few brief comments. First of all, I would like to tell the Minister of Justice (Mr. Turner) that the viewpoints expressed by the member for Shefford (Mr. Rondeau) are, of course, shared by all the members of the Ralliement Creditiste.
As was also mentioned by the hon. member for Shefford, I would like to remind the hon. minister about the problem of the administrative tribunals. I am deeply interested in this subject on which I have tabled a motion that will be discussed at some future date. I would like at this time to discuss this matter and, briefly, the administration of justice generally.
Mr. Speaker, justice has now become a political question. This is a regrettable situation in our organized society where everybody has now in mind the "just society" motto. Mr. Speaker, justice must be free of politics in order to ensure its efficiency and its

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survival. I was quite interested a few minutes ago, to hear a comment voiced by a member of the New Democratic party who said that justice should be accessible to all whatever their social rank, their economic status and especially to those less fortunate economically. I agree with this concept. Justice must be available to all.
Nowadays, the administration of justice is directly proportional to the money involved and the property at stake. This is inconceivable and I would like the minister to consider this problem. It is often said that justice should at no time be related to a person's economic standing.
The Minister of Justice has already made several speeches proposing a judicial reform which would include the provision of legal aid to the needy. I should like to tell the minister that we support him completely in this and that we insist that he take steps quickly to carry this suggestion into effect.
Mr. Speaker, the Glassco commission suggested that the government give careful and thorough consideration to the matter and introduce clearly defined legislation on administrative tribunals. This legislation, which I am asking the minister to table as soon as possible, would aim at giving effect to the recommendations of the Glassco commission concerning administrative tribunals, for the government is not discharging its responsibilities at the present time. Therefore it is the responsibility of the members of the opposition to study this subject, so that the rights of the individuals may be respected.
Mr. Speaker, I said that this motion implements the recommendations of the Glassco commission and I want to quote a few for the benefit of the honourable members of this house because I think that it is worth-while:
The administrative tribunals of the federal government have never, to the knowledge of your Commissioners, been the subject of systematic study. Nor does there exist a definition of what bodies should be considered under this heading . . . There are widespread differences in the procedures followed by the tribunals, either as a result of differing statutory requirements or because of decisions taken by the boards themselves. No uniformity or consistency of principle was observed among them in respect of such matters as the obtaining of evidence and its disclosure to interested parties, the examination of petitioners and witnesses, the publicity to hearings and other proceedings, and the form and publications of decisions, rulings or reports.
And that is serious, Mr. Speaker.
I continue:
Generally, your commissioners-

The commissioners of the Glassco Commission
-have been struck by the lack of uniformity that is characteristic of the legal status, the composition and the procedures of such courts. They have noticed that these questions have been very much discussed for 30 years or so, that they were the subject of inquiries in the United Kingdom as well as in the United States, and that the legislator has tried to give uniformity to the principles on which the commissions are based as well as their constitution and their procedures. Nothing similar has been done in Canada and, after some observations by the commissioners in this important field, a comprehensive inquiry would be necessary.
I have been quoting from pages 72 to 75, volume 5, of the 24th report of the Royal Commission on Government Organization.
Mr. Speaker, that recommendation was made in 1963 and since then absolutely nothing has been done in that regard. In view of the inertia of the government when it comes to defending the rights of the citizens, we have to take the initiative.
I would like to point out, Mr. Speaker, that other countries have acted long ago in that field. France, for instance, has a highly developed system of administrative courts. In England, the British government set up a royal commission which reported in 1932 and its report is known as the Report of the Lord Chancellor's Committee on Minister's Powers. The Frank committee, set up in 1955, submitted its report in 1957. It is known as the Report of the Committee on Administrative Tribunals and Inquiries. It resulted in the creation in 1958 of a permanent body to supervise administrative tribunals which is called the Council on Tribunals.
I will not bore the house by reading the whole document, but one could go on and on giving further examples of what is being done in other countries as far as this important problem is concerned. I think that the implementation of a clear and specific legislation concerning administrative courts could easily and happily come within the judicial reform contemplated by the minister. We have a great deal to do in that field and it is time we assumed our responsibilities.
Mr. Speaker, I would like to say something else. In a way, justice must have all the time needed to make sure that its decision is valid. However, because of the dilatoriness of our institutions, the settlement of a case should not be delayed, since that is inevitably prejudicial to both parties. Justice must be cautious and efficient at the same time, and in that connection, I support the hon. member for
October 16, 1968

Shefford (Mr. Rondeau) who urges the minister to appoint a greater number of judges to speed up justice and increase its efficiency.
In concluding my remarks, I should like to congratulate the minister for introducing bill C-114, and I hope he will introduce other bills of this kind, so that justice will be a reality, especially in the case of underprivileged people.
[DOT] (4:50 p.m.)


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I shall forgo the speech I had planned to make because I think we can pass this measure before five o'clock. I wish to ask the Minister of Justice a question but first of all I should like to preface it in this manner. The remarks of the hon. and learned member for Calgary North (Mr. Woolliams), about the Exchequer Court of Canada were quite impressive. I believe it is important that justice not be remote from the people and that the courts be as close to the people as they can possibly be. This is a point we made without success during the consideration of the divorce bill. We attempted to have a provision included that would automatically give county court judges jurisdiction in divorce matters.
I should like to ask the minister whether these 11 new judges of the Superior Court of Quebec will all be charged with jurisdiction in divorce cases. If he nods his head "yes" I will have completed my speech. He does not nod his head and therefore I shall ask him during the committee stage to give an explanation.


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


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Faulkner in the chair.
On clause 1.
Robert Jardine McCleave: Mr. Chairman, is the Minister of Justice prepared to answer my question at this point?


John Napier Turner: During the second reading stage the hon. member asked me whether the 11 new judges would all be employed in the divorce division. As I understand it, one out of the three judges in the Quebec appeal district is being appointed because of the increased jurisdiction relating to divorce, and five out of the eight judges in the Montreal appeal district. They will not be
Judges Act
divorce judges. As judges of the superior court they will be assigned on a rotating basis to various divisions of the court as is the case now in respect of the bankruptcy division and so on.


Robert Jardine McCleave: I compliment the minister on that answer. The fact is that none of them is a divorce judge per se. They will simply be assigned to that duty. The minister nods his head indicating he is content with what I have said and therefore I also am content.


Frank Howard: Has the minister or the government looked at the possibility of participating with the provinces in helping to finance the legal aid program and extend it if necessary?


John Napier Turner: We are
reviewing the legal aid programs in the provinces at the moment to see what distinctions there are in the various systems. I shall not be in a position to answer this question until we have the factual background.


Martial Asselin: Mr. Chairman, since the administration of justice comes under provincial jurisdiction, I should like the minister to tell me whether the provincial ministers of justice or attorneys general make recommendations to him, as regards the appointment of judges.


John Napier Turner: Mr. Chairman, I wonder if I have understood the question correctly. Does the hon. member want to know whether the provincial attorneys general recommend certain appointments?


Martial Asselin: Yes, Mr. Chairman.


John Napier Turner: Mr. Chairman, it does not happen too often.


Martial Asselin: Mr. Chairman, I should like to know if the provinces decided to make such recommendations, whether the hon. minister would consider them.


John Napier Turner: Mr. Chairman, I receive suggestions from everywhere.


Martial Asselin: Mr. Chairman, I should also like to say that I come from a rural area, and it can be said that good lawyers of rural law associations have not always been treated fairly with regard to the appointment of judges to the Superior Court as made by the Department of Justice. In view of the fact

October 16, 1968
Judges Act
that eight judges will be appointed in the Montreal area, I should like the minister to tell us whether he also intends to accept the recommendations coming from rural areas in the vicinity of Montreal?


John Napier Turner: Mr. Chairman, it is wise to continue to appoint members from rural law associations, because I feel that they are entitled to a certain percentage of the appointments in the two districts.


Martial Asselin: Mr. Chairman, I should also like to know whether the minister intends to bring up at the next conference of provincial attorneys general the matter I mentioned on second reading of the bill, namely the problem of judges who are appointed to judicial and not pseudo-judicial posts?


John Napier Turner: Mr. Chairman, I have already mentally accepted the good suggestion of the hon. member.


Leslie Gordon Benjamin: For my edification, if for no one else's, could the minister say what the difference is between judges and junior judges? My understanding is that both receive the same remuneration.


John Napier Turner: They both receive the same remuneration but when there are two or more judges in a judicial district it is customary that one be perhaps the chief judge of a district and the others junior judges.


Leslie Gordon Benjamin: Is there any difference in the work they handle?


John Napier Turner: The chief judge has the additional duty of administering the court and assigning roles to the various junior judges.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


An hon. Member:: By leave, now.


Some hon. Members:: Agreed.


John Napier Turner: the third reading of the bill.
Motion agreed to and bill read the third time and passed.

[DOT] (5:00 p.m.)


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



EXPROPRIATION ACT


Mr. Hyliard Chappell (Peel South) moved:: That, in the opinion of this house, the government should consider the advisability of giving immediate consideration to amending the Expropriation Act so that an owner whose property is expropriated will be dealt with in a more businesslike and just manner, and more particularly so as to provide for a notice before the expropriation takes place, for a substantial advance of money at the time of taking property, for the spelling out of measures of compensation, for the change of interest rate to the bank rate of interest, and, finally, to provide that if property is affected or invaded in part by an act on the part of expropriating authorities, the owner may call upon authorities to take all his land or property.
He said: Mr. Speaker, my motion relates to the need to change our attitude in matters of expropriation. On September 19 I spoke of the shortcomings and the antiquity of the federal Expropriation Act, born in the agrarian atmosphere of the last century and static ever since. While we all agree that law should be stable, it is wrong for it to stand still. A law that is out of date does not warrant respect, and if any one of our laws is in this disrespect a shadow of disrepute falls over the whole process of government. I then asked that the principles upon which governments act in taking land be reviewed and made compatible with concepts of today so that all Canadians who may be affected by federal expropriations will be confident that they will be dealt with in a more reasonable, prompt and just manner. The motion before this house is to further that aim.
In this century, as the need for public projects increased, expropriation of property by all levels of government accelerated and multiplied. Apparently, Hon. J. C. McRuer, formerly chief justice of the high court of Ontario, points out in his 1968 report to the Ontario government that under Ontario laws, lands may be expropriated under 36 acts, by 8,017 separate authorities. In Quebec they have done even better-308 acts give the power to expropriate to innumerable authorities. Today no citizen can expect immunity for his lands and home. This enormous power, often in the hands of delegated authority,
October 16, 1968

can be exercised without warning and led one irate citizen to say, "It is as though every public servant carries the Great Seal".
While all recognize the necessity to expropriate for public good, this is a trust for the public benefit and public benefit cannot be served unless the public is convinced that individuals' rights are respected. There must be a rational relationship between the individual and his government. With the informed public of today, anxious to participate in political issues and increasingly sensitive to its legal rights, nothing less will do.
For a comparison with our laws on the forcible taking of land, I shall refer to the recognition of basic principles in other jurisdictions. In France, no one can be compelled to give up his property except for public utility and in consideration of a just indemnity previously paid. In the United States, Denmark, Australia and India there are constitutional guarantees of just compensation.
Our federal statute, on the other hand, allows expropriation by the simple registration of a plan in the land registry office without notice and without payment. The Bill of Rights as interpreted by our courts is not applicable to prevent it. This gap in the law, this breach in what we all regard as our inviolable right, led the Hon. J. C. McRuer to restate a criticism made by the Hon. Joseph Thorson while president of the Exchequer Court in 1955:
I have frequently called attention to these provisions of the law and stated that Canada has the most arbitrary system of expropriation of land in the whole of the civilized world. I am not aware of any other country in the civilized world that exercises its rights of eminent domain in the arbitrary manner that Canada does. And unfortunately, the example set by Canada has infected several of the Canadian provinces in which a similar system of expropriation has been adopted.
In default of leadership by parliament, the provinces allowed their expropriation laws to remain basically unchanged and out of date until about 1960. Since then, British Columbia, Alberta, Saskatchewan, Manitoba Ontario and Quebec have been studying the deficiencies of their laws and have taken steps to bring them up to date, having been influenced no doubt by the revisions in England, Australia, New Zealand and some parts of the United States.
It is urgent that we take a fresh look and restate the principles of expropriation in light of today's needs and in line with contemporary methods of business, as foreign jurisdictions have done. Surely we can be confident that if we express accurately and soundly a 29180-79
Expropriation Act
concept that is fair to the individual and fair to government, and so take a giant step forward, the provinces will follow our example. This could lead to uniform expropriation codes in Canada.
It is inherent in modern thinking that each person is entitled to freedom of speech, freedom of religion and quiet enjoyment of his property. It is therefore incomprehensible that governments should have the power to deprive a man of his home or livelihood without notice and with nothing more than the filing of a document. It is not surprising that when it occurs the owner regards this appropriation with fear and resents the indignity of such abrupt intrusion into his private rights. With such feelings of injury and thought of unfair advantage he instinctively hates and fights the government.
What can we do about this? The taking of private property against the will of the owner is so serious an infringement of his rights there should be, except in cases of emergency, notice of a pre-expropriation hearing which, along with his right to fair compensation, should be assured by constitutional authority.
The right to be heard before one's land is taken is fundamental justice and is supported by common sense. The facts disclosed at a preliminary hearing would produce decisions reflecting more consideration for the rights of individuals without sacrificing the public interest. It is fallacious to think that this would cause governments any disadvantage. At worst, officials might be embarrassed for having failed to consider a more suitable alternative.
In one case an expropriation authority took a very valuable experimental orchard in order to build a garbage incinerator. Protests from the owner went unheard. However, after a united outcry from the press, another incinerator site was found at much less cost. A hearing would have avoided this.
We have all told the Canadian people repeatedly that we wish to involve them in politics. What is more natural than a preexpropriation hearing so that those affected may be heard and submit alternatives, or point out errors in choice of selection and, failing these, adjust the planning of their affairs or businesses. This has been the rule in England for years.
It is gratifying that the Minister of Transport (Mr. Hellyer), who recently announced plans relating to the possible enlargement of the Toronto international airport at Malton,

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Expropriation Act
held a pre-expropriation hearing with representatives of the municipalities concerned and has agreed to hold further meetings with those more directly affected. This recognizes a basic principle, and I hope establishes a precedent, to be incorporated in the new act.
[DOT] (5:10 p.m.)
What should the second step be? After such a hearing, if the minister decides to proceed, prompt notice should be given. It should indicate to the owner that he is entitled to and should obtain the services of an appraiser and a solicitor, and that reasonable costs will be borne by the authority. It should also state that the authority's appraisal is complete and available to the owner, in order that his advisers may consider it and meet with the authority's experts as soon as they have completed their own appraisals so that settlement may be discussed. There is no room in an expropriation case, where an owner has been deprived of his property and drawn into this contest through no fault of his own, for any sporting theory of justice where each side holds back his information. There should be full disclosure, and it should start with the authority.
In one case an authority offered $900 for land taken and later increased the offer to $5,000, which was accepted. This created distrust. In another case where several blocks of houses were taken for a redevelopment scheme, the authority had each house appraised by the same appraiser for a small fixed fee per home, which resulted in a low, uniform valuation for all. When an offer based upon this appraisal was refused by one owner of several homes, the authority undertook considerable further expense in an attempt to support this cursory valuation and involved the owner in costly and burdensome litigation. In that case the tribunal awarded twice the amount offered. Those who could not afford the legal struggle and accepted the offer, which was 50 per cent of the court's value, were rightly resentful. It should not be a matter of how cheaply the authority can acquire land, but rather of finding a figure that is fair and just and one which would allow the owner to re-establish himself promptly without months or years of disruption and fear.
What about possession? The authority should, at the time notice of expropriation is given, state the date at which possession will be required, so that the owner may adjust his

affairs accordingly. It might be said that this approach would create too big a work load for the department. But is it reasonable for them to have taken the land in the first place, unless they knew the cost, and are they just in making an offer that is not, to the best of their ability, honest and fair?
The term "businesslike" is made up of these attributes: efficiency, reliability, integrity, and a sense of values. Why should not governmental authority set the example?
As our act stands today, the federal authority is not required to pay any amount at the time of expropriating the land or when possession is taken. Even if the authority volunteers to pay part of the amount it says the property is worth, that advance, of course, must be applied against the mortgage, and the owner is without funds to re-establish himself. If the authority is required to pay the full amount of its evaluation at the time of expropriation, as is recommended by the McRuer report in Ontario and the provincial committee report in Quebec, the owner could re-establish himself immediately. This is especially important when the cost of relocation has increased by as much as 26 per cent in 18 months in some areas.
What should be the measure of compensation? The present law says an owner is entitled to "value to him", which is usually expressed as "value to the owner". This was developed as a test over 100 years ago to prevent an owner from claiming the amount his land was worth to the expropriating authority, which could be away out of line if it was the last parcel in an assemblage of land. This test is long out of date. Other countries provide that the owner is entitled to market value, plus extra items to compensate him for the disturbance, business loss, moving expenses, etc. With such guide lines appraisals would be more businesslike and predictable, and would thus lend to early settlement.
There is one type of case that requires special mention. Suppose the owner of a small house, who has lost it because of a redevelopment scheme, is offered $8,000. In one sense that is all the house may be worth, but each such scheme substantially diminishes the supply of houses in that price range, and the price immediately goes up; or, if he cannot find a house of the same age, he may have to pay two or three times as much for a new home which is no larger. It should be spelled out that account must be taken of the cost to reinstate in similar shelter; otherwise he will
October 16, 1968

be displaced and without a home, through no fault of his own.
The new act must include safeguards so that rumours or threats of expropriation or zoning for a less valuable use cannot be used to depreciate the value of the property to the benefit of the expropriating authority. Just recently I received a letter from a solicitor telling me what was happening in one of our largest cities. An authority has written owners advising that their lands will be required in 1975. As this information becomes public it means that the owners cannot sell to anyone but the authority and, of course, at its price. If the owners refuse to accept the authority's offer, their property will be evaluated as of the date of the taking in 1975. By then the value will have decreased because of the deterioration in individual houses and the area, caused by the notice of intention to expropriate.
Further, we need to make it plain that if the expropriation of rights over an owner's land, or land use zoning for a particular government purpose, has made it impossible to sell the property at what would have been a fair price in the absence of encroachments, the owner may call on the government to buy the whole parcel. My notice of motion says, "is affected or invaded in part", but obviously that should be, "is affected or invaded to any substantial degree." I think that is a reasonable interpretation. In one case in my riding the owner's land was invaded nine times in this manner by the federal government and he was helpless to prevent it. The laws of the United Kingdom protect the individual in both such cases.
The converse should be equally true; that is, if only part of the owner's land is required for the plan that is to be carried out, the expropriating authority should not take more than it needs, unless the owner consents. This is in accordance with the principle that a person's rights should not be taken from him, except as may be specifically required for the public work. If the authority should take more than it needs, the owner should be able to claim the return of the balance.
In the event that the parties are unable to come to a settlement, by whom should the compensation be determined? It is an important element of justice that claims should be heard with an absolute minimum of delay. At the moment federal expropriation cases are heard in the Exchequer Court, where the owner is disadvantaged by expense and delay. In other nations, to overcome delays 29180-791
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special tribunals hear such claims, and this is a recommendation in the McRuer report and the special committee in Quebec. I propose that the new act provide that the owner should have the option of proceeding in the Exchequer Court or any lands tribunal court which may be set up in the province in question. Land tribunals should be encouraged, so that all expropriation cases come before the same tribunal. In this way compensation would not vary from case to case.
Interest rates paid on money owing to the former owner are equally out of date. The act was amended in 1900 to reduce interest to 5 per cent from the date the owner is forced to give up possession to the date he obtains judgment from the courts, and after that date to 4 per cent. This cheap rate of interest leads to this paradox: it may very well be advantageous to the authority to appeal the judgment in order to extend the period of borrowing from the owner at 4 per cent, while the owner is left to forage for other funds at interest rates at least twice as high. It seems only reasonable that the interest should be at the discretion of the tribunal or at the prevailing bank interest rate.
With regard to costs, I have always felt it to be iniquitous that the person expropriated is not given his full legal costs and all reasonable disbursements for expert witnesses when he has succeeded in establishing that he is entitled to more compensation than was offered. His legitimate expenses in establishing that fundamental right should not be borne in any part by himself. If the expropriating authority offered $20,000 and the individual established a true value, after a five day hearing, of $25,000 but receives only part of his costs, he could easily end up with no more than he was originally offered, although the property is worth $5,000 more. The present legislation, provincial and federal, puts the individual in an inferior position from the beginning, and the inclination is to accept the low figure rather than to spend all the energy, money and time in securing a proper figure which in the end nets him no more than he was originally offered.
[DOT] (5:20 p.m.)
In conclusion may I just say that if we can say that the prime task of expropriation law is to see that after notice the best site is selected with prompt payment of compensation which is just, not only to the owner but also to the acquiring authority, and with as little disruption as possible to the owner, then

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we must concede that our present law falls far short of achieving this result.


Robert Norman Thompson: Mr. Speaker, it is a pleasure to support the resolution of the hon. member for Peel South (Mr. Chappell). The hon. member and myself have shared in the frustrating experience of being unable to bring about justice in the case of a professional educational institution in Toronto which had its property expropriated and had no recourse except to go before the courts of the land in a costly and prolonged procedure that not only disrupted that institution for some six years but in the end failed to bring about justice and fair remuneration. For five consecutive years I have had a similar motion on the order paper, and again this year I have a similar resolution, No. 23, on the order paper. Therefore I share the concern of the hon. member for Peel South. I would only hope that the Minister of Justice will take very careful note of what is being said. I would also hope that he will permit this motion to go to the appropriate committee where it can be discussed.
I realize that the minister has expressed his intention of revising the expropriation laws, but I have heard this for seven years from successive ministers of justice. In fact, it has been expressed by his predecessors back to at least 1959, always with the one intent, that the expropriation laws should be revised but seemingly never able to come to the necessary conclusion to bring those revisions before the house.
The history of parliament is a record of the resistance of representatives of the people to the usurpation of the powers of the crown or of its agencies. I believe it would be foolish indeed to think that because we have a constitutional parliamentary government in Canada we as the representatives of the people are not faced with the duty and responsibility of keeping the powers of the crown under control. It might be reasonable that in times of war or imminent danger to our country the federal government should have such powers, but today such powers belong in the War Measures Act and not in any peacetime legislation. We already have far too many punitive federal laws on our statute books. I am thinking in particular of some of the provisions of the Income Tax Act and of the Excise Act which are an open threat to the liberty and the property of the citizen.
I say to the house that the laws of this land as they concern the expropriation of private property were designed for a time of emergency and certainly not for a time of peace such as we are living in now. As I interpret the Expropriation Act, parliament has given to officers of the civil service down to a very junior level the right to deprive a citizen of the land he owns merely by filing a plan in the registry office and leave the citizen with nothing but the right to go to court to receive just payment for his property. Again I say that powers like those contained in the act relating to the expropriation of the land belong only in the War Measures Act, certainly not in civil legislation. There is no requirement to follow the usual practice that is followed in most provinces, although not all of them, as the McRuer report brought out very clearly a few months ago. Where there is a transfer of title there is need for a public hearing to ascertain whether or not any particular parcel of land is needed for public purposes.
Here in Ottawa over the last number of years many a home owner has awakened to read in the newspaper that his home has been included in the expropriation plans of the day or the week before. This should not be so. I have in my files a number of letters concerning cases which bear evidence to the fact that here in the capital city of Ottawa, under the authority of the National Capital Commission using the expropriation laws of Canada, property owners have been deprived of their property without due recourse to the law or to ordinary procedures that are required of private institutions or citizens in purchasing land. Many of the citizens of this city feel that the power of expropriation is a flagrant abuse of governmental power. I say further that the time has come when the expropriation laws which concern the right of the government to take a man's property should be altered so that property cannot be taken away from him without due notice being given.
It also seems to me it should be required that a plan or a description of the property be filed before the crown becomes owner of the land. The rightful owner must not be denied his rights. An owner whose property has been expropriated by the crown all too often is left waiting for years before he actually receives the money due him. If time would permit I could give the house illustrations of such occurrences which have taken place right here in Ottawa.

October 16, 1968

If a customer buys a pound of sugar off the shelf in a store he has to pay cash before being allowed to carry it home. Therefore, why should the crown be considered any different, particularly if we value the rights of property ownership which to me are one of the prerequisites of a strong democracy?
In a nation which has placed the legislative field of property and civil rights within the jurisdiction of provincial legislatures, the powers granted by this act seem to border on the unconstitutional, and on this point alone the government has a responsibility to see that the expropriation laws are revised. Unfortunately the expropriation of land by the government is often a necessity. In the planned development of our cities and towns this becomes all the more necessary. But the rules which govern expropriation should require that the needs of the property owner be weighed against the needs of the state. Not only must there be an assurance of fair compensation and an adequate forewarning to property owners that their land is to be expropriated, but public hearings must also be held before a judge to determine whether the action is necessary and is in the public interest. Beyond this it is imperative that every citizen be guaranteed the right to his own day in court. Justice demands that no citizen be deprived of his property without such hearings. Expropriation powers which permit the filing of a plan to take away the ownership of a man's land when his certificate of title tells him he is still the owner certainly do not reflect justice.
[DOT] (5:30 p.m.)
I believe it would be very easy and proper to provide a better law so that before any land is taken for a public purpose by expropriation a public hearing should be held before a judge. In this way, everyone could be satisfied it was in the public interest that the land be taken. It is not good enough that we go on and on saying the law is not right and that we must revise it, but never do so. We simply have not enacted legislation to amend the expropriation law of Canada to make it as just as it should be and as just as every citizen in our country expects our laws to be.
I believe also that an exact method of expropriation should be spelled out by law, such as a certain number of days' notice and disclosure of the intent of the authority. In addition, a safeguard should be provided so
Expropriation Act
that no land would be expropriated unnecessarily or by mistake. I can cite a number of cases of expropriation in the capital here where land was expropriated and then it was discovered later this land was not required. However, the land has never been returned to the rightful owners.


Eldon Mattison Woolliams: Like the parks.


Robert Norman Thompson: I suggest also that a clause be inserted elsewhere in the statutes of Canada guaranteeing Canadian citizens the right to own property, and that this clause should be specifically in the Expropriation Act. If we did this we would be protecting the rights of Canadian citizens as they deserve to be protected. I am sure all of us who have read the McRuer report as it relates to the expropriation laws of Ontario would agree with the remarks of that distinguish justice. He expressed in no uncertain terms his belief that the expropriation laws of Ontario should be revised.
I would say, Mr. Speaker, that the words of Abraham Lincoln as they relate to property ownership could well be heeded. I pass them on the the Minister of Justice. It was Abraham Lincoln who said that when individual rights and property rights are in question, the right of the individual must be given first place. This is what makes a democracy a democracy. I am convinced that the expropriation laws of this land must be revised. I sincerely hope our present Minister of Justice, who has made a public commitment to this end, will see that this revision is made during this session. Certainly, this law has been on the statute books far too long and does not reflect the true nature of what is expected from us as legislators.
I should like to close my remarks, Mr. Speaker, by quoting these words of the former President of the Exchequer Court, Mr. Justice Thorson. He had heard a case between Ethel Grayson and the Queen concerning the expropriation of property belonging to that lady, and he had this to day:
I have frequently called attention to these provisions of the law and stated that Canada has the most arbitrary system of expropriation of land in the whole of the civilized world. I am not aware of any other country in the civilized world that exercises its right of eminent domain in the arbitrary manner that Canada does. And unfortunately, the example set by Canada has infected several of the Canadian provinces in which a similar system of expropriation has been adopted.
So, Mr. Speaker, I again urge the minister to take heed of the words that have been

October 16, 1968
Expropriation Act
spoken by the hon. member for Peel South, which I believe represent a consensus of all members in this house. I urge that he take the action we expect him to take now.


John Napier Turner: Mr. Speaker, first of all I think all members of the house would want to congratulate the hon. member for Peel South (Mr. Chappell) on introducing this resolution.


Stanley Howard Knowles: Why not compliment him by letting the resolution pass?


John Napier Turner: If the hon. member for Winnipeg North Centre will hear me out he may be more satisfied with this speech than he imagines at the moment.
I congratulate also the hon. member for Red Deer (Mr. Thompson). I want to congratulate both hon. members on the amount of research, thought and industry that went into their two speeches on this important subject. I am sure that if former President Thor-son were able to hear himself quoted with approval from both sides of the house, and if he had seen the hon. member for Calgary North (Mr. Woolliams) nod in approval, the former president of the exchequer court would have been mightily pleased indeed.
I want to say that we have been giving a good deal of thought to the Expropriation Act. It has been substantially in its present form since 1886 in the Revised Statutes of Canada. In fact, it was not even new in 1886 because it was adopted from some of the earlier statutes in force since confederation and in the union government before that. My own view is that the present act is confusing. I can understand the dissatisfaction of property owners in the country whose land has been expropriated under its provisions. I believe a general revision of the statute is required to provide a clear and consistent legislative scheme.
I would hope that I would be able to present in this house for first reading within the next six weeks or before Christmas a new, completely revised Expropriation Act. We hope to be able to ameliorate the arbitrariness inherent in the present statute, which was so well illustrated by the hon. member for Red Deer and the hon. member for Peel South. I have read a good deal of the criticism of the present statute contained in decisions from the bench, as expressed by members of the bar and the bar committee of the

Canadian Bar Association of which the hon. member for Peel South has been a member and chairman, as well as by interested members of the public generally. As the hon. member for Red Deer has said, this measure has been before the house several times.
In my opinion the present act is insufficient in that a government department can arbitrarily take a parcel of land and the owner has no right to be heard. A person's land can be expropriated without any prior notice. A person whose land has been expropriated can be required to give up possession immediately, prior to the payment of any compensation. No definite negotiation procedure is prescribed. It is either court or nothing or a type of informal negotiation that does not really have any arm's length or fair dealing about it.
Finally, there are no rules prescribed under the present statute for the determination of the amount of compensation payable. Criteria for determining the amount are found in the judgments of the courts, and sometimes these are hard to correlate and difficult to reconcile. I believe that any statute which would remedy these difficulties would have to contain a number of provisions, and I should like to deal with them in general terms. The bill will have to await first reading in the house, but here are some of the ideas I feel should be incorporated in any bill to revise the present Expropriation Act.
I feel there would have to be notice given prior to expropriation. I believe the minister would have to give notice in writing of his intention to expropriate a particular interest in land and state the public purpose for which the expropriation is required. I feel that any person objecting to the proposed expropriation should have a period of time from the giving of the notice to file an objection in writing, stating his name, address and the nature and grounds of his objection, as well as the particular interest he has in the land to which the notice of expropriation relates. Then there should be a public hearing. The minister will be able to state his case and those who object will be able to make their case. The hearing officer should then present a report.
[DOT] (5:40 p.m.)
After the expiry of the period of time during which objections could be received, or after the hearing had been concluded, the minister, after receiving and considering the report of the hearing officer, could proceed
Oclober 1$, 1968

with the expropriation of the land in question. In that event, Mr. Speaker, if the expropriation were proceeded with the relevant date for the determination of the amount of compensation payable should be the date on which the notice of intention to expropriate was given.
The minister might decide to abandon the property expropriated, or if he did not proceed with the expropriation after a certain time had elapsed from the date of the notice of intention to expropriate he would be deemed to have abandoned. In that event I believe the owner of the land in question who had had the land isolated and neutralized by notice of expropriation should be entitled to compensation.
I believe that the implementation of this type of proposal should go a long way toward assuring owners of land and the people of Canada that their lands are not to be expropriated except for good reason. Moreover, this will enable the minister-indeed, it would compel the minister concerned-to be satisfied that he is aware of all of the relevant facts before deciding whether to expropriate a given property.
There are other matters mentioned in the resolution moved by the hon. member for Peel South. I have talked about the question of notice. The hon. member also calls for a substantial advance of money at the time of the taking of the property. I believe that compensation should be paid at the time the property is expropriated and be based on the estimate by the minister of the value of that property, subject to review by the negotiating board or by the courts. But surely, Mr. Speaker, the minister's estimate of the value of the property ought to be paid over at the time of expropriation.
Now, Mr. Speaker, when could the crown take possession? I believe that in any statute a certain period of notice prior to the taking of possession should be provided-shorter notice in special circumstances allowed by regulation is something we would have to contemplate-and at the time the property was expropriated the minister's estimate of the compensation should be paid. If the property was required on shorter notice, then further compensation should be paid for the additional inconvenience occasioned to the owner. That is also something we might well contemplate and goes even beyond the optimistic view expressed by the hon. member for Peel South. He asked for the spelling
Expropriation Act
out of measures regarding compensation. I agree that the rules for compensation ought to be spelled out in the statute.
The hon. member also calls in his resolution for the change of interest rate to the bank rate of interest. Having heard the debate on some of the agricultural measures recently before the house I can only say at this stage that there will have to be some formula worked out for payment of interest; and so I cannot be any more precise with regard to that part of the hon. member's resolution.
The hon. member's final suggestion is that the statute should provide that if property is affected or invaded in part by an act on the part of expropriation authorities, then the owner may call upon the authorities to take all of his land or property. The hon. member has since amended that part of his resolution. In his speech today he said that that is only reasonable if a substantial part of the property is expropriated, in which case the owner should be free to call upon the crown to expropriate it all.
I do not want to use a pun here, Mr. Speaker, but I cannot buy all of that. We would have to watch such a situation. For example, we could have the ridiculous situation where the crown merely wanted to expropriate an easement or a servitude. Surely the owner of the property should not be able to force the crown to expropriate all of his property under such circumstances. However, this matter might well go to compensation, the owner being rewarded for expropriation of a lesser interest in his property. Perhaps the hon. member's point could be satisfied in terms of compensation rather than in terms of compelling the crown to expropriate the entire interest in his property.
I did mention in passing that the statute should provide for some type of negotiating procedure between the crown and the person whose land is expropriated. If the negotiating procedure did not succeed in adducing agreement, then freedom to litigate in the ordinary manner would be preserved.
The matters to be considered in arriving at the compensation payable will, of course, appear in the statute. I think there is a good argument to be made for saying that the current rules of the court should be broadened to provide fair treatment for persons whose land has been expropriated. It might be suggested, for instance, that allowance be made for legal

October 16, 1968
Expropriation Act
and appraisal lees, and this is something I should like to consider. I do not want this just to be an increment to the legal profession, but it may be that fees incurred by an owner of land in trying to negotiate or in resisting expropriation should in certain circumstances be allowable.
Those, Mr. Speaker, are some of the comments that I should like to make at this stage. However, I do want to refer again to the last proposal in the hon. member's resolution, where he talks about the owner calling on the authorities to take all his land or property. The department has also read former chief justice McRuer's report. I cannot presume what the thoughts of the former chief justice might be if he were listening to this debate, but a good many of his recommendations are reflected in the remarks that I have just made and which I hope the statute will introduce. The last recommendation made in the hon. member's resolution was not made either by the Clyne or the McRuer commissions. The most that Chief Justice McRuer said is to be found at page 1078 of the report and is as follows:
-we recommend that expropriating authorities should not be empowered to expropriate more land than is necessary for the proposed work, except where this can be shown to be in the interests of the owner of the unnecessary land.
In the circumstances, Mr. Speaker, since I have given an undertaking to the house to introduce a new revised Expropriation Act envisaging the principles that I have outlined in a general way, which I hope would be available for first reading around the end of the year, perhaps sooner, perhaps later, I must say to the hon. member that we could not accept his resolution exactly in the form proposed.
The standing committee, would have the more precise task of considering the terms of any new statute. I would also hope that an opportunity would be given to the members of the house on second reading and in committee to review the ideas that I have set forth, as they would appear in statutory form, in some further detail. In general the principles that are outlined in the resolution and supported by the hon. member for Red Deer meet with my agreement, and I should like to congratulate these members of the house who have taken the time to research and to present this matter to the members of the House of Commons.


Stanley Howard Knowles: Mr. Speaker, before the Minister of Justice sits
[Mr. Turner (Ottawa-Carleton) J
down I wonder whether he would permit a question. In view of his statement, which seemed to suggest that the government is prepared to do what the hon. member for Peel South requests, namely, to consider the advisability of amending the Expropriation Act, may we assume that the government is willing to let this resolution pass? Would he also be willing to allow a private member, the hon. member for Peel South, to have the prestige of having a resolution like this supported by the house?
[DOT] (5:50 p.m.)


John Napier Turner: I think the hon. member for Peel South already enjoys a good deal of prestige in his profession and will obtain credit for introducing a measure which, I can assure him, meets with the general approval of the government. He will have that prestige in full measure. However, since there are certain elements with which, as I have said, we are not in accord and since a more fruitful use might be made of the time of the house and of the committee than trying to put the present motion in precise form, I suggest that the better alternative is to await first reading of the bill which, I assure the hon. member, will not be long delayed.


Stanley Howard Knowles: Is
the minister not aware that passing this resolution does not effect legislation? It is merely an expression of opinion.


John Napier Turner: But it
commits the house in certain areas to certain words, and I am not prepared to be committed to all the words.


Robert Norman Thompson: Since the minister is not willing to lend the government's prestige to the hon. member for Peel South-


John Napier Turner: He does not need any.


Robert Norman Thompson: -and since I am not in his position of not needing prestige, perhaps the minister would be willing to lend the government's prestige to private members' notice of motion No. 23 which stands in my name. The contentious wording the minister referred to in the present motion does not appear in my motion. Could the minister therefore do as I ask?


John Napier Turner: Since the hon. member for Red Deer had prestige
October 16, 1968

enough to allow him to move from one political persuasion to another without trouble, because the people of his area so respected him, I do not think anything I say here today will add one whit to his prestige.


Eldon Mattison Woolliams: Mr. Speaker, may I congratulate the hon. member for Peel South (Mr. Chappell), the hon. member for Red Deer (Mr. Thompson) and the Minister of Justice (Mr. Turner) for what they have said. When the new legislation is considered I hope that the question of jurisdiction will be looked at so that the average man can afford to litigate in his own province. That is my first point. I realize that this afternoon my hon. friend seemed to be in love with the exchequer court. I hope his love extends to the ordinary, average people of Canada who cannot now afford to litigate in the exchequer court.
In the few moments remaining may I raise the matter of appeal. One case I was involved in was to go to appeal. The action was to be appealed from the exchequer court to the Supreme Court of Canada and the evidence would have cost around $16,000. These people had been litigating for ten years and could not afford that outlay. Some way must be found to cheapen appeals and to bring them within the reach of anyone. To show what can happen may I refer to the case of Fraser and the Queen, reported in 1963 Canada Supreme Court Reports, page 463. Cameron J. of the exchequer court made an assessment of $40,640 with respect to certain lands. The matter went to the Supreme Court of Canada. The exchequer court refused to consider the principle of future potential-


John Napier Turner: The hon. member was not working for peanuts in that case.


Eldon Mattison Woolliams: I did not get peanuts, not even salt for the peanuts. The point is that the appeal was allowed and the crown's crossappeal was dismissed with costs. The last paragraph of the judgment says in part:
In the result, I would allow this appeal, dismiss the main cross-appeal, and vary the judgment of the learned trial judge by fixing the amount to which the appellant is entitled for the expropriation of his property and for all damages resulting therefrom at the sum of $360,640 together with interest at the rate of 5 per cent per annum-
There is quite a difference between $360,640 and $40,640. I hope the point is clear. I hope the question of jurisdiction is examined so
Expropriation Act
that people may litigate at the place of taking, no matter whether it is in Alberta, Ontario, Quebec or elsewhere in Canada.
At present our appeal procedure is such that the average man cannot afford to appeal. If he is not satisfied with the exchequer court's decision he cannot afford to go to the Supreme Court of Canada. Since the state is all-powerful and since it has most of the brains because it can afford to pay the money, I ask that it make available for examination for discovery the reports of its appraisers and pay for independent appraisals to be carried out. Also, the state ought to make certain that litigants are properly represented by counsel. When that happens I shall be satisfied with the new law.


Russell Clayton Honey: Mr. Speaker, in the remaining few minutes I want-


Stanley Howard Knowles: To
congratulate the hon. member and talk the resolution out.


Russell Clayton Honey: -to congratulate the hon. member for Peel South (Mr. Chappell) who, I know, has spent much time on this matter. He is a learned member of the bar of Ontario and was chairman of the appropriate committee of the Canadian Bar Association that looked into this matter. He has worked closely with those of us who, in common with the Minister of Justice (Mr. Turner), the hon. member for Red Deer (Mr. Thompson), the hon. member for Calgary North (Mr. Woolliams and others in this house, are anxious to see the introduction of new legislation dealing with expropriation. We are heartened by the minister's remarks and hopeful that the legislation may be introduced before the end of the year. We also hope that the new legislation will filter down to provincial jurisdictions and that across Canada in our respective federal and provincial jurisdictions we shall see an enlightened approach to expropriation.


Robert Norman Thompson: Question.


Russell Clayton Honey: I echo the sentiment of the hon. member for Red Deer, who is anxious for the question to be put. I think we must recognize the undertaking of the minister that a statute in precise form following the general principles of this resolution will be introduced within the new few weeks. The inference I drew from the minister's remarks was that the bill
October 16, 1968
1242	COMMONS
Refer Estimates to Standing Committees would be referred to the standing committee on justice and legal affairs. When that happens we shall be able to sit down and discuss the question of jurisdiction at some length. There is no partisanship in this matter. We are all concerned about improvements in the expropriation law and the procedure to be followed.


Mr. Deputy Speaker:: Order, please. I must advise the hon. member that the hour for the consideration of private members' business has expired.



ESTIMATES


Donald Stovel Macdonald: Mr. Speaker, I wonder
whether I might have the consent of the house to revert to motions so that I could refer estimates to the standing committees.


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, the estimates relating to the Privy Council, Governor General and the Lieutenant Governors have already been dealt with by the committee of supply. It has already been agreed by hon. gentlemen opposite that the other estimates to be reserved for the committee of supply are those relating to the Auditor General, finance, industry, justice, labour, legislation, the National Capital Commission, national health and welfare, public works, supply and service, transport, and the Treasury Board. Those departments, as I say, were reserved for committee of supply. My motion, therefore, refers all the other estimates to designated standing committees, but would reserve the powers of the committee of supply. Accordingly I move:
That, saving always the powers of the committee of supply in relation to the voting of public moneys, the items listed in the revised main estimates for 1968-69, relating to the enumerated departments be withdrawn from the committee of supply and referred to the standing committes of this house as follows.
An enumeration follows. I think there is general consent to dealing with this matter in this way.


Stanley Howard Knowles: There is general consent on the understanding that the contents of the long list the minister is holding in his hand will appear in Hansard.


Donald Stovel Macdonald: I certainly hope
that it will.


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The list above referred to is as follows:]
Agriculture
Atomic Energy Control Board Atomic Energy of Canada Limited Canada Council Canadian Arsenals Limited Canadian Broadcasting Corporation Canadian Commercial Corporation Canadian Dairy Commission Canadian Film Development Corporation Canadian Livestock Feed Board
Canadian Overseas Telecommunication Corporation Canadian Radio-Television Commission Canadian Transport Commission Cape Breton Development Corporation Centennial Commission
Central Mortgage and Housing Corporation
Chief Electoral Officer
Communications
Company of Young Canadians
Consumer and Corporate Affairs
Correctional Services
Customs and Excise
Defence Construction (1951) Limited
Dominion Bureau of Statistics
Dominion Coal Board
Economic Council of Canada
Energy, Mines and Resources
External Affairs
External Aid Office
Farm Credit Corporation
Fisheries and Forestry
Immigration Appeal Board
Indian Affairs and Northern Development
Insurance
International Joint Commission
Manpower and Immigration
Medical Research Council
National Arts Centre Corporation
National Defence
National Energy Board
National Film Board
National Harbours Board
National Library
National Museums of Canada
National Research Council
Northern Canada Power Commission
Northern Transportation Company Limited
Post Office
Public Archives
Public Service Commission
Public Service Staff Relations Board
Regional Development
Representation Commissioner
Royal Canadian Mounted Police
St. Lawrence Seaway Authority
Secretary of State
Solicitor General
Tax Appeal Board
Taxation
Trade and Commerce Unemployment Insurance Commission Veterans Affairs
October 16, 1968
Agriculture, the Standing Committee on culture
Atomic Energy Control Board, the Standing Committee on National Resources and Public Works Atomic Energy of Canada Limited, the Standing Committee on National Resources and Public Works
Canada Council, the Standing Committee on Broadcasting, Films, and Assistance to the Arts Canadian Arsenals Limited, the Standing Com-mitte on Finance, Trade and Economic Affairs Canadian Broadcasting Corporation, the Standing Committee on Broadcasting, Films, and Assistance to the Arts
Canadian Commercial Corporation, the Standing Committee on Finance, Trade and Economic Affairs
Canadian Dairy Commission, the Standing Committee on Agriculture
Canadian Film Development Corporation, the Standing Committee on Broadcasting, Films, and Assistance to the Arts
Canadian Livestock Feed Board, the Standing Committee on Agriculture Canadian Overseas Telecommunication Corporation, the Standing Committee on Broadcasting, Films, and Assistance to the Arts Canadian Radio-Television Commission, the Standing Committee on Broadcasting, Films, and Assistance to the Arts
Canadian Transport Commission, the Standing Committee on Transport and Communications Cape Breton Development Corporation, the Standing Committee on Regional Development Centennial Commission, the Standing Committee on Broadcasting, Films, and Assistance to the Arts Central Mortgage and Housing Corporation, the Standing Committee on Health, Welfare and Social Affairs
Chief Electoral Officer, the Standing Committee on Privileges and Elections
Communications, the Standing Committee on Transport and Communications Company of Young Canadians, the Standing Committee on Miscellaneous Estimates Consumer and Corporate Affairs, the Standing Committee on Health, Welfare and Social Affairs Correctional Services, the Standing Committee on Justice and Legal Affairs
Customs and Excise, the Standing Committee on Finance, Trade, and Economic Affairs Defence Construction (1951) Limited, the Standing Committee on Finance, Trade, and Economic Affairs
Dominion Bureau of Statistics, the Standing Committee on Finance, Trade, and Economic Affairs Dominion Coal Board, the Standing Committee on National Resources and Public Works Economic Council of Canada, the Standing Committee on Finance, Trade, and Economic Affairs Energy, Mines and Resources, the Standing Committee on National Resources and Public Works External Affairs, the Standing Committee on External Affairs and National Defence External Aid Office, the Standing Committee on External Affairs and National Defence Farm Credit Corporation, the Standing Committee on Agriculture
Fisheries and Forestry, the Standing Committee on Fisheries and Forestry Immigration Appeal Board, the Standing Committee on Labour, Manpower and Immigration
Refer Estimates to Standing Committees Indian Affairs and Northern Development, the Standing Committee on Indian Affairs and Northern Development
Insurance, the Standing Committee on Finance, Trade, and Economic Affairs International Joint Commission, the Standing Committee on National Resources and Public Works Manpower and Immigration, the Standing Committee on Labour, Manpower and Immigration Medical Research Council, the Standing Committee on Health, Welfare, and Social Affairs National Arts Centre Corporation, the Standing Committee on Broadcasting, Films, and Assistance to the Arts
National Defence, the Standing Committee on External Affairs and National Defence National Energy Board, the Standing Committee on National Resources and Public Works National Film Board, the Standing Committee on Broadcasting, Films, and Assistance to the Arts National Harbours Board, the Standing Committee on Transport and Communications National Library, the Standing Committee on Broadcasting, Films, and Assistance to the Arts National Museums of Canada, the Standing Committee on Broadcasting, Films, and Assistance to the Arts
National Research Council, the Standing Committee on National Resources and Public Works Northern Canada Power Commission, the Standing Committee on Indian Affairs and Northern Development
Northern Transportation Company Limited, the Standing Committee on Indian Affairs and Northern Development
Post Office, the Standing Committee on Transport and Communications
Public Archives, the Standing Committee on Broadcasting, Films, and Assistance to the Arts Public Service Commission, the Standing Committee on Miscellaneous Estimates Public Service Staff Relations Board, the Standing Committee on Miscellaneous Estimates Regional Development, the Standing Committee on Regional Development
Representation Commissioner, the Standing Committee on Privileges and Elections Royal Canadian Mounted Police, the Standing Committee on Justice and Legal Affairs St. Lawrence Seaway Authority, the Standing Committee on Transport and Communications Secretary of State, the Standing Committee on Broadcasting, Films, and Assistance to the Arts Solicitor General, the Standing Committee on Justice and Legal Affairs Tax Appeal Board, the Standing Committee on Finance, Trade, and Economic Affairs Taxation, the Standing Committee on Finance Trade, and Economic Affairs Trade and Commerce, the Standing Committee on Finance, Trade, and Economic Affairs Unemployment Insurance Commission, the Standing Committee on Labour, Manpower and Im-migation
Veterans Affairs, the Standing Committee on


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


[Stage Direction]
Motion agreed to.
[Stage Direction]
Agri-
[Stage Direction]
October 16, 1968
Business of the House BUSINESS OF THE HOUSE
Gordon Harvey Aiken: Mr. Speaker, I wonder whether we could have an indication of tomorrow's business.


Donald Stovel Macdonald: The business for tomorrow will be as indicated last Thursday, the resolution preceding the bill to enact the official languages act. If by close of business tomorrow the resolution stage has
been dealt with, we shall proceed to the drug bill which was called as the second item for today's business. On Friday we would return to committee of supply, and the estimates to be considered in committee of supply will be those of the Department of National Health and Welfare.


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

[Stage Direction]
presented by
the Honourable Edgar J. Benson, M.P., Minister of Finance for the information of Parliament in connection with the Budget of 1968-1969
October 16, 1968

[Stage Direction]
The purpose of these Papers is twofold:
1.	to present a general economic review of 1967 and the first half of 1968, bringing together in one place and in convenient form some of the more comprehensive indicators of economic conditions prepared by the Dominion Bureau of Statistics, the Bank of Canada and other government agencies, together with some comments;
2.	to present a preliminary review of the Government Accounts for the fiscal year ending March 31, 1968.
Ociober 16, 1968
[Stage Direction]


Economic White Paper for 1968
Page
The Canadian Economy: Review and Outlook	 1251
Review of 1967 and 1968	 1251
Outlook in 1968	 1255
The World Environment	 1257
The International Economy	 1257
Problems of the International Financial System	 1260
Readjustment, 1967 and 1968	 1263
Income Developments	 1263
Expenditure Trends	 1265
The Labour Force	 1276
Employment	 1278
Regional Employment Trends	 1278
Output, Productivity, Costs and Prices	 1281
The Government Sector	 1288
Current Developments	 1290
The Federal Government	 1290
Provincial and Municipal Governments	 1292
Financial Transactions of Governments	 1293
Source and Disposition of Saving	 1295
Financial Developments	 1297
Introduction	 1297
The Effect of Financial Developments Abroad	 1299
Bond Market Financing	 1302
Mortgage Market Financing	 1303
Consumer Finance	 1305
Business Finance	 1305
Federal Government Debt Operations	 1307
Capital Account of the Balance of Payments	 1311
Index to Reference Tables	 1317
The tables and charts in this Budget Paper are based upon data provided
by the Dominion Bureau of Statistics, the Bank of Canada and other government
agencies. A few of the figures appear for the first time; others have been published elsewhere. All 1968 figures are preliminary and subject to revision.
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Table
Number	Title	Page1	Labour Income and Profits, 1965 to 1968	
12652	Capital Expenditure	
12683	Composition of Total Capital Expenditure	
12684	Growth of Consumer Income and Expenditure, 1962 to	1968. .	12705	Expenditure on Goods and Services by level of government...	12716	Changes in Current Account Balances, 1967 over 1966. 12737	Changes in Income and Expenditure with other Countries. ...	12748	Changes in the Labour Force, 1963 to 1968	
12769	Changes in Employment, 1963 to 1968	
127810	Changes in Real Domestic Product, 1966 to 1968	
128211	Changes in	Employment by Industry, 1966 to 1968	
128412	Changes in	Output per Employee,	1966 to 1968	
128513	Changes in	Earnings and Output,	1966 to 1968	
128714	Source and	Disposition of Saving,	1965 to 1968	
129515	Structural Changes in Saving	
129616	Government of Canada Cash Requirements and Sources ofFinancing	
130917	Long-Term Capital Flows, 1965 to 1968	
1313

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Chart	Page
1	Selected International Indicators, 1963-1967	
12582	Selected Components of Income, 1965-1968	
12643	Gross National Expenditure and Selected Components, 1956-1968	
12664	Business Gross Fixed Capital Formation, 1956-1968	
12675	Private and Public Capital Expenditures, 1956-1968	
12696	Balance of Payments-Current Account, 1965-1968	
12727	Changes in Labour Force and Employment, Canada, 1961-1968 12778	Labour Force and Employment by Region, 1963-1968	
12799	Unemployment Rates, Canada and by Region, 1963-1968.... 128010	Real Domestic Product, 1963-1968	
128311	Wage Costs per Unit of Output, 1963-1967	
128612	Labour Costs and Productivity in Manufacturing, 1963-1968. 128713	Consumer Price Index, 1965-1968	
128914	Government Revenues and	Expenditures,	1955-1967	
129115	Government Revenues and	Expenditures,	1966-1968	
129316	Selected Interest Rates, Canada, 1966-1968	
129717	International Interest Rate	Comparisons,	1966-1968	
130118	Canadian Dollar in United	States Funds,	1963-1968	
130219	Housing Starts, 1955-1968	
1304
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Part I
ECONOMIC WHITE PAPER FOR 1968 THE CANADIAN ECONOMY: REVIEW AND OUTLOOK
In the course of the past two years, Canada has passed through a period of economic adjustment while still in the midst of the longest and strongest expansion in its history. During 1967 many of the adjustments taking place resembled that of a mild cyclical recession, but other expansionary forces more than offset these movements, and production, income and employment continued to rise. Some serious industrial disputes have occurred in 1968, but despite these it seems clear that a moderate acceleration of growth was established in the early months of this year.
Cyclical Developments
Business profits reached a peak early in 1966 and declined to a trough in the first quarter of 1967, recovering thereafter. Excess capacity emerged in some manufacturing industries. Strains developed in the markets for capital, beginning in 1966 and persisting, in varying degree, throughout 1967 and early 1968. In response to these developments, business expenditures on plant and equipment first levelled off and then turned down; the trough was reached in late 1967 and an improved first-quarter 1968 level appeared. This renewed expansion was maintained in the second quarter. The business inventory pattern has also followed a characteristic cyclical form. Accumulation rose to peak rates in mid-1966, after which it fell back. In early 1967 only nominal accumulation occurred, but a third-quarter pickup was followed by a very substantial swing to actual decline in the fourth. Inventories may now have completed their cyclical correction, and seem likely to resume a normal growth pattern in coming months.
In the personal sector, 1967 was a year of continued increase in both hourly earnings and the unemployment rate. This pattern has persisted in the first half of 1968. During 1967, wage settlements under collective bargaining produced a quarterly record of increases which, on the whole, exceeded gains made in the corresponding quarters of 1966. However, some signs of moderation appeared towards year-end and have persisted in the first and second quarters of 1968, although current gains are still excessive in relation to productivity. Throughout this period, consumers have continued to increase their spending at rates little changed from those of 1966. Price increases, however, particularly in consumer services, accelerated in 1967, except in the case of food prices. Some easing in the rate of advance took place in 1968, but it is not sufficiently strong to suggest that recent pressures have been completely checked.
Expansionary Forces
The mild recessionary pattern of 1967 described above was almost totally obscured by the continuation of a number of strong expansionary forces, including the special events of Centennial year, particularly Expo. These special events contributed substantially to the maintenance of relatively high levels of employment and output, mainly in the service industries, during the second and
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third quarters. Tourist expenditures in Canada by non-residents, included in the statistics relating to exports of services, expanded very sharply during the Expo period, while tourist expenditures by Canadians in Canada were also above normal levels.
Other sources of strength in 1967 which overshadowed the cyclical weaknesses were a strong merchandise export performance, the continued very large increases in expenditures by governments, and the recovery of residential construction from its 1966 levels. These demand factors were accompanied by further increases in employment, which arose partly from uninterrupted advances in the number of women at work, and partly from higher immigration. The growth in the labour force slowed significantly after mid-1967, reflecting the reduced rate of growth in non-farm employment which began to show at the end of the first quarter.
Developments in the first two quarters of 1968 have been dominated by the continued strength of these factors. Consumer expenditures and labour income both recorded substantial gains in this period, while exports of goods and services advanced at an exceptional rate. Government sector expenditures have continued to increase. In conjunction with the mild cyclical changes discussed above, these factors have thus led to fairly strong quarterly increases in the various national accounts income and expenditure totals. However, the employment increases accompanying this growth in output have fallen short of the rapid growth in the labour force. Accordingly, the seasonally-adjusted unemployment rate has risen, and in mid-1968 it was running at about five per cent of the labour force.
The Canadian economy at the present time therefore has the physical capability of continuing on a sustained period of growth. Having regard to the continued large increases in money incomes still occurring, current cost and price developments are of crucial importance. The price pressures generated by the 1965-66 boom, although lessening somewhat, have persisted throughout the period of adjustment. Accordingly, the extent to which sustained growth may occur must be viewed against the problem of price and cost stability.
Income and Expenditure
Gross national product rose by 6.8 per cent during 1967 to an annual level of $62.1 billion, and, with prices increasing by 3.9 per cent, real GNP rose by
2.8	per cent. In the first half of 1968, the value of GNP rose by 6.8 per cent compared to the same period a year earlier; price advances of 3.3 per cent reduced the gain in real terms to 3.5 per cent.
The income side of the 1967 accounts reflected a large fall in the accrued net income of farm operators from the record 1966 level, which made a difference of approximately one per cent on the overall GNP gain. The statistical assumption of return to a normal crop in 1968 was responsible for a sharp rise in farm income between the fourth and first quarters. The final effect of weather on the 1968 prairie grain crop is not yet reflected in the national accounts. The more moderate pace of advance in the non-farm economy in 1967 compared to 1966 was accompanied by a smaller increase in aggregate labour income, although the advance was still large, while corporation profits in 1967 fell fractionally after a virtually flat year in 1966. (Details on income developments are shown in reference tables 2 to 5, beginning on page 76).
On the expenditure side, personal expenditure on goods and services by Canadians (excluding expenditures in Canada by foreign visitors) advanced by over eight per cent in 1967. (Expenditure details are summarized in reference
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tables 6 to 15). though fractionally less than that of 1966, this advance provided steady support for the economy through the year. (Statistical adjustments made to separate expenditures made by foreign visitors from those made by Canadians may have led to some understatement of consumer outlays on services in the second and third quarters, and hence to an overstatement of the advance in the fourth quarter). Total outlays, however, made stronger gains in these quarters than in either the first or fourth. First half 1968 gains in current dollar personal outlays were strong.
Government expenditures have continued to rise. However, the 1967 advance for all governments combined, at just under ten per cent, was much more moderate than the 17 per cent rise of 1966. The slowing down was greater at the federal level than at the provincial-municipal. In the first half of 1968, a further rise of 7.9 per cent occurred, compared to the same period a year earlier.
Exports were a major source of strength in 1967 as a whole. Tourist expenditures are included with exports of services, and made a very notable contribution to the general level of economic activity during the summer months. Exports of goods were higher in the year by over one billion dollars, or around ten per cent; about three-quarters of the increase reflected higher shipments of automotive products, largely balanced by imports of such products. Further strong gains in exports have occurred during the first eight months of 1968.
Business expenditure on plant and equipment declined by three per cent in 1967. lhis development, after three successive years in which unusually large annual increases of 20, 20 and 21 per cent respectively occurred, acted significantly to moderate the excessive pressures in some areas, notably construction, which had built up since mid-1965. At the same time, a very marked drop occurred in accumulation of non-farm business inventories; the final quarter of 1?6J saw a remarkable swing of nearly one billion dollars, from accumulation of $684 million to an inventory rundown of $312 million, expressed at annual rates. Changes in the business sector in the first half of 1968 include a 10.5 per cent gam, at annual rates, in expenditure on plant and equipment over the second halt 1967 level, substantially reversing the decline which had taken place in 1967. Non-farm business inventories were virtually unchanged in the half year.
Output, Employment and Productivity
The gain in real domestic product1 excluding agriculture in 1967 amounted to 3.6 per cent. Because of the sharp drop in the prairie wheat crop, which returned to more normal levels after the record crop of 1966, total real product rose by only 2.7 per cent. The number of persons at work in the non-agricultural economy rose by 3.2 per cent in the year, and for the first time since 1954 there was an increase in farm employment. The labour force as a whole, employed and unemployed, rose by 3.7 per cent, all of this increase representing jobs in the total service sector. Because employment increased less rapidly than the labour force, the unemployment rate for the year rose.
Changes m employment in the different sectors, in conjunction with changes in output, provide the indications of changes in output per man (productivity) shown m reference tables 25 and 26. In the year as a whole, and in the private non-farm economy as a whole, productivity rose by 1.3 per cent from the preceding year.
domestic product measures the volume of output of goods and services produced in Canada. Apart from small differences m statistical measurement, it differs from GNP in constant dollars in that it excludes interest and dividend receipts from abroad, includes interest and dividend payments to nonresidents and excludes indirect taxes less subsidies.	J
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This figure, which is below the long-term trend, partly reflected a shift in the pattern of output, of which a larger share was contributed by the service industries where the level of productivity per person employed is low, or for which the conventional statistical measurements are inadequate. On the other hand, there was a rise in productivity in manufacturing during the course of the year as employers reduced their labour force while output was rising.
The combination of income and production figures provides an indication of cost changes. Wage costs per unit of output continued to increase in 1967, both for manufacturing and for the entire economy. Profits per unit of output continued to decline in 1967, although less sharply than in 1966. This trend persisted in spite of the widespread price advance of 1967.
In the first two quarters of 1968, despite strikes in the automotive and other industries, real domestic product rose at an annual rate of 3.9 per cent from the last half of 1967. Productivity across the total commercial non-agricultural economy was unchanged in the first quarter, but improved in manufacturing and construction. The pattern in the second quarter was much the same.
Wage settlements under collective bargaining continue to record very large increases in base rates and other benefits. Increases in average hourly earnings for the country as a whole have been somewhat smaller but are affected by these settlements.
Prices
Prices continued to advance at unacceptable rates in 1967 and the first half of 1968. The average of the Consumer Price Index in 1967 rose by 3.5 per cent over the average 1966 level, which compares with the 3.7 per cent rise the year before. However, in 1967 the food component changed little, while advances were widespread and strong in other non-durable and durable goods, and, particularly, in consumer services. It may also be noted that changes in sales taxes and property taxes contiibuted an estimated 0.8 per cent to the overall 1967 rise-nearly one-quarter of the total increase in consumer prices, the GNE deflator, which represents price changes in the economy as a whole, rose by 3.9 per cent over 1966 (4.5 per cent the previous year).
In the course of first eight months of 1968 the consumer price index has continued to moderate its rate of advance compared to each month a year earlier. Whereas in January the increase over a year earlier was 4.5 per cent, in August the increase was 3.4 per cent. As the months have passed the changing pattern of gains among components shows that housing costs have become the leading contributor. Shelter costs account for about 18 per cent of the consumer budget that is measured by the C.P.I. Consumer services excluding shelter, which showed the largest advance in the previous twelve months, are now advancing somewhat less rapidly. Food prices in August were 1.6 per cent higher than a year earlier.
Review of 1967 Expectations
The government in early 1967 anticipated some slowdown in the rate of growth for the year, which led it to relax some of the restraints which had earlier been imposed, particularly those affecting investment expenditures by the business sector, and to introduce measures to encourage residential construction. These adjustments appear in retrospect to have been appropriate. The continued
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increase in government expenditures, and the continuation of unduly high price and wage increases, led to proposals in the Budget of November 30, 1967, for certain tax increases to take effect late in 1967 and early in 1968.
With regard to the balance of payments, 1967 exports of goods and services to the United States were higher than had been foreseen. As expected, imports rose considerably less than in the preceding year.
As a result of these developments, the current external deficit (on a national accounts basis) registered a sharp decline to some $670 million from the 1966 total of $1,230 million.
The combined expenditures of all governments on goods and services rose rather more than had been expected, partly owing to continued strong pay and price advances in this sector. Residential starts, earlier foreseen as being in the region of 160,000 for the year, actually amounted to 164,000. About 63,000 of these were financed by NHA mortgages, 65,000 by conventional mortgages, and the balance by other means, such as "non-institutional" and personal lending. Outlays on business plant and equipment, according to the early-1967 outlook, would decline by "under one per cent", but in fact a decline of just over three per cent occurred. This decline in value resulted partly from the accelerated removal of federal sales tax on production machinery and equipment, which caused an actual price decline in the middle two quarters, and from the continued moderation in the rate of increase of non-residential building prices. As expected, the mild cyclical pause did not on this occasion cause further downward revisions in business investment intentions at the time of the midyear review; moreover, the rather unexpected degree of credit stringency which developed during the year also failed to bring about any significant reduction of the 1967 programme. As it turned out, early 1967 expectations that total private and public capital expenditures would level off in the year were borne out by events.
The increase in labour income was about as expected, although costs and prices rose slightly more, and non-farm employment rose slightly less, than expected.
It was observed that corporation profits are related to trends in costs, prices and productivity, and for the year of adjustment in 1967, corporation profits declined slightly. However, for some quarters now profits have been increasing.
Outlook from mid-1968 to mid-1969
A rapid increase in GNP in the first two quarters of 1968 is expected to give way to more moderate rates of increase in the third and fourth quarters of the current year. While it is too early as yet to forecast the full year 1969, there are indications that moderate rates of growth will persist in the first half of 1969.
Canada's economic growth over the next twelve months will depend in part on economic conditions in the United States and certain overseas countries. The U.S. economy passed through a period of very rapid expansion in the first half of 1968 and is now expected to experience less expansion in the second half of the current year and in the first half of 1969. This expectation is based in part on the effects of the tax increases in June of this year which, together with federal government expenditure cutbacks, will combine to exert a considerable degree of restraint in coming months. In the light of these changes, unofficial projections show forthcoming rates of increase in total real output at about two per cent per annum in the United States in the year ending mid-1969.
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In other industrial countries also, a slower rate of growth is expected for late 1968 and early 1969. In the United Kingdom, continued efforts to check domestic demand and imports, and to curb continued price and wage increases, are expected to be accompanied by a modest increase in real output. Japan is expected to slow down from the very high rates of growth of over ten per cent per annum in real output that have been achieved in the recent past. France is confronted with large wage and price pressures as a result of events in May; there exists some margin of unused resources in that country, but potential price and cost problems make it difficult to judge the extent of increases in real output. Recent favourable output and export trends in Germany are expected to continue in the coming year but at slightly reduced rates.
For the combined economies of all countries belonging to the Organisation for Economic Co-operation and Development (OECD), which includes Canada and the U.S.A. as well as European countries and Japan, an expansion of only three per cent in real output is expected in the second half of 1968, compared with over five per cent in the first half. This reduced rate of growth is common to nearlv all member countries of OECD, and is expected to continue in the first half of 1969.
There are a number of important differences between the Canadian and U.S. situations which combine to suggest that the expected slowdown in expansion will be less marked in Canada than in the United States. One significant difference between the two countries is that price and cost pressures have already begun to ease in Canada, whereas they have been accelerating in the United States. Another difference is that Canadian inventory accumulation has been negligible or negative for some time past, while there has been a large accumulation in the United States. A moderate degree of inventory accumulation should now contribute to overall demand strength in Canada. Further, the mid-year investment intentions survey in Canada indicates a small improvement over earlier surveys. In contrast to declines in business investment in 1967, small increases in value are now beginning to take place. Business investment is expected to be up about three per cent in the current year, and the total of public and private investment is expected to increase six per cent. Unlike the situation in the United States, where official surveys indicate a deceleration of business investment during 1968, the Canadian investment outlook appears to be one of continued if modest improvement. Offsetting to some extent these favourable developments, Canada's exports to the United States cannot be expected to maintain the rapid rate of increase attained in the first eight months of the current year.
The housing outlook is also favourable, with the high level of housing outlays in 1968 likely to be exceeded in the coming year. The tension in the capital market has eased somewhat in recent months, and since business investment requirements are only moderate, there should exist both the physical and financial capacity to create more new housing accommodation in the coming year. Outlays on goods and services by governments at all levels, although moderating in the past year, are again expected to increase faster than total output of the economy.
The largest expenditure category, accounting for well over half of GNP, is that of personal expenditure on goods and services. These outlays have been sustained by the continued rapid increases in personal disposable income referred to earlier. Although consumer price increases until comparatively recently were in excess of four per cent per annum, the latest figures on the Consumer Price Index have indicated some easing in the rate of advance. Thus, the substantial
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increases in real disposable income and in the real volume of consumption of recent years are expected to continue in the coming year and to constitute a sustaining force in total effective demand.
On the supply side, the labour force has been augmented recently by a very large number of young people leaving school and by continued increase in the proportion of women working. As noted, rapid increases in both labour force and total employment took place in the summer of 1968, but unemployment also grew, mainly as a result of the very large influx of students seeking jobs during the summer months. Some of these students returned to school in September, while others have found jobs and will remain in the labour force. The enlarged technical and vocational training facilities for these students, as well as re-training and mobility programmes for older workers, will contribute to the efficiency of the labour force growth in the coming year. The period of most rapid acceleration in labour force growth may have been reached in 1967, but Canada in 1969 will still have one of the highest labour force growth rates among the industrial countries of the world.
Another factor of importance relating to Canada's supply capability is the physical stock of plant and equipment. While the available measures of plant and equipment capacity are inadequate, there are at least some indications that capacity utilization rates are now not far below normal for the economy as a whole. The reduced rate of investment expenditure in 1967 and 1968, while modest increases in output were continuing, suggests that excess capacity is not extensive. The recent increase in investment intentions, as reported in the midyear survey, tends to confirm this view. It may be concluded that future increases in real demand and output will increasingly call forth new additions to capacity in the form of investments in plant and equipment. Since the long-term relationship between the stock of physical capital and real output has not changed significantly, it can be expected that increases in real output will require approximately similar rates of increase in the stock of capital; this situation is approximated when new investment and output advance at similar rates. Recent small improvements in corporation profits, which tend as a statistical series to lead that of new expenditures on plant and equipment, are consistent with the view that a moderate expansion of new investment, in line with sales and output, might be expected in the coming year.
The overall demand and supply picture suggests a rate of increase in GNP over the next nine to twelve months not much different from that of 1968 as a whole, compared to that of 1967. However, more of the increase should be in quantity, and less in prices, than in 1967 and 1968. The significant easing of interest rates apparent since the exchange crisis of last spring, which is described in detail later in this paper, should assist in this advance.
THE WORLD ENVIRONMENT The International Economy
Economic developments in Canada are profoundly affected by the world environment. Because exports represent a very substantial part of total demand in Canada, events in other countries can quickly affect employment, incomes and economic activity in Canada. This country, too, is particularly sensitive to strains and tensions in the international financial system; capital flows in or out
29180-so
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1963=100

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112

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1963=100
116
112
108
104
100
112
108
104
100
OFFICIAL GOLD, FOREIGN EXCHANGE AND RESERVE POSITION IN I.M.F. 1963 = 100
110
80

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160
140
120
100
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of Canada, whether of domestic or foreign origin, can be of such magnitude relative to Canada's economy as to pose difficult problems of economic management.
The economy of the western world in 1967 recorded a definite slow-down in growth as compared with 1966.
In the North American hemisphere this weakening occurred in the course of the longest period of expansion since the war. Signs of strain had been in evidence since the second half of 1965 and were aggravated by expansion of inventories in 1966. Mounting pressures on prices and costs then began to erode profits, resulting in some decline in the volume of private investment from the beginning of the fourth quarter of 1966.
The U.S. economy in 1967 went through two clearly defined phases. In the first half of the year there were two dominant factors: a temporary check to growth and growing concern about inflation. The inflationary and financial pressures had as their basis the unusually high budgetary deficit, the slow-down in tax revenue receipts, and the resultant heavy government borrowings in the capital market. In the second half of 1967, continued increases in military expenditures and the failure of Congress to act upon the President's proposal for tax increases aggravated the inflationary atmosphere. From July onwards renewed expansion of the economy was clearly evident as a result of the renewed accumulation of inventories; furthermore, consumer demand was firm, especially for durable goods, and housing construction moved up sharply.
Quarterly movements in the U.S. gross national product reflected these trends. In the first three months of 1967 GNP advanced only slightly; in the second quarter of the year the progress was somewhat more marked, but beginning in the third quarter GNP resumed relatively rapid growth, accelerating again in the first two quarters of 1968. The fiscal restraints upon income which came into force from July 1968 are expected to slow down economic activity in the two last quarters of 1968, contributing both to the stabilization of costs and prices and to better external balance.
The balance of payments, despite a certain improvement in capital flows from the U.S. point of view, remains in deficit because of the deterioration in the merchandise trade balance. Exports appear to be rising rather more rapidly in 1968 than in 1967, but merchandise imports are expected to grow even more rapidly.
In the United Kingdom, 1967 was a year of growing crisis. The war in the Middle East, the world-wide rise in interest rates, and the dockers' strike all reinforced the country's economic difficulties, while the need to restore stability in the payments position became increasingly more pressing. The November 1967 devaluation of the pound and the strengthening of the measures of reform were intended both to bring about a better balance in the British economy and to restore the balance of payments.
The course of economic events in the United Kingdom in 1967 had made such steps unavoidable. The growth rate of gross domestic product for the year as a whole was only a little over one per cent, while the overall production index had remained almost stationary since 1966. Unemployment had risen from a level of one per cent of the labour force in the second quarter of 1966 to reach 2.4 per cent in the third quarter of 1067. Moreover, in 1967 exports declined while imports increased.
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Developments in the U.K. economy resulting from the combination of devaluation and anti-inflationary measures were expected to lead to a rapid improvement in the balance of payments and to increase Britain's share of international trade. An increase of 4.5 per cent in industrial production was forecast for 1968, with total economic growth expected to be about three per cent. Observers expect that the increase in activity will be in non-consumption sectors.
In the European Economic Community, the levelling-off in economic growth which began in mid-1966 continued throughout the first six months of 1967. Despite signs of recovery in the majority of member countries from the beginning of the third quarter, the growth figure of about 2.5 per cent for 1967 is still the lowest since 1958. A sustained growth in the Italian and Dutch economies was not sufficient to make up for the recession in Germany.
The easing in the EEC countries brought some easing in the European labour market and on the whole a slackening in the escalation of costs and prices. Since mid-1967, the cyclical trough, signs of a recovery have been increasingly in evidence, especially in the economy of the Federal German Republic. This acceleration of economic activity, through its effect on trade within the community, will be a dynamic element in the growth of other member countries. In France, judgments about the extent of price, cost and output changes this year have been obscured by the events of the spring.
Having regard to all these circumstances, it is generally accepted that the level of economic activity in the Community as a whole will be higher in 1968 than in 1967.
In Japan, the economic growth rate over the past ten years has averaged ten per cent. In 1967 it was more than 13 per cent. The rapid growth of 1967 had the effect of increasing demand for imported products, and added to existing pressure on the capital markets. In order to moderate this steep rate of growth and improve the balance of payments, the Bank of Japan increased the Bank rate in 1967 and again in 1968 and has limited loans by the chief banks. In addition, the government found itself obliged to postpone a great many public investment projects. In 1968 the growth of the economy is therefore expected to be much reduced from the 1967 rate.
The year 1967 thus saw financial constraints affecting economic activity in many countries. Indeed, there was persistent and prolonged pressure on international capital markets. Within countries there was a bidding-up of the price of money between the public and private sectors on the one hand, and between individual borrowers on the other. The resulting increase in interest rates became world-wide through international transactions. Due to inflationary expectations this condition persisted in spite of slack in most countries. Cyclical credit contraction is customarily short and sharp, and is followed by a decline in interest rates, but the adjustment, due to the intense competition for funds and problems of confidence, was slow to develop in 1968. However, some easing of interest rates has occurred in recent months.
Problems of the International Financial System
The international monetary arrangements developed since the second world war have, on the whole, worked well, making it possible for world trade to grow at an unprecedented rate. It has been apparent for some time, however, that fundamental changes in the existing arrangements would be necessary during the
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foreseeable future if world trade was to continue to expand rapidly. The knowledge of the imminent need for such a change and the uncertainty as to the form that it might take have therefore had an unsettling effect on the international financial community during recent years.
The essence of the problem concerns the future growth of international reserves with which to finance a growing volume of world trade. During the post-war period these reserves, i.e. the total of countries' holdings of gold, foreign exchange, and certain types of claims on the International Monetary Fund, grew much less rapidly than the volume of world trade which they helped to finance. This was made possible by the increased efficiency of the system due to improved co-operation between monetary authorities, and by the redistribution of reserve assets from the United States to other countries, particularly in Europe.
The dominant element in the growth of international reserves during the period has been the accumulation of reserve currencies, particularly U.S. dollars, by the monetary authorities of other countries. Claims on the International Monetary Fund, though growing more rapidly in relative terms, were much less significant in absolute terms because of their narrow base. Finally, although gold has continued to be by far the largest component of total reserves, yearly additions to official reserves from newly mined production were increasingly less significant in the overall picture and in the past couple of years gold has actually flowed out of official reserves into private hands.
The accumulation of U.S. dollars by other countries had been a welcome development during most of the fifties, when foreign monetary authorities were still intent on restoring their depleted foreign exchange reserves. As this process neared completion, however, the continuation by the United States on a substantial scale of a deficit on international transactions became a cause for concern, heightened by the already existing chronic balance of payments problems of the United Kingdom, the other major reserve currency country.
Thus it became essential to confidence in the international monetary system for the United States and Britain to bring their payments into balance. But success would have meant that the reserve currencies would thereby cease to be a significant source of liquidity growth, and it was most improbable that this would be completely offset by further increases in gold holdings and claims on the IMF. Consequently, to help ensure a healthy continued growth of world trade, a major international effort was begun to develop a plan for the creation of a new reserve asset that would be subject to rational control in an established international forum. Studies and negotiations directed towards this end were carried out during the four years preceding 1967. During this period recurrent disturbances occurred which underlined the seriousness of the situation and the need to develop a contingency plan.
The growing unwillingness of some countries to increase further their holdings of reserve currencies meant that financial flows, the counterpart of real economic activities such as international trade and investment in productive plant and equipment, became the target of selective restrictive measures by both surplus and deficit countries. While these measures have included statutory or "guideline" directives aimed at specific activities, they also have taken the form of the traditional means of affecting the volume and direction of capital flows, that is, changes in interest rates and in the availability of capital funds for use in international financial transactions. Competitive reliance on the interest rate as a means of controlling international capital flows, and the entry
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of speculators into the picture at times of particular stress, thus became increasingly a feature of the international economy during the middle sixties. Speculation contributed heavily to world currency pressures in both 1967 and 1968.
During the spring and summer of 1967 the British pound remained under intermittent pressure which became persistent after the Middle East crisis. Despite major support operations mounted by the IMF, the Bank for International Settlements and individual central banks, pressure on the pound became overwhelming during November, and a 14.3 per cent devaluation took place on November 18. At the same time the Bank of England Bank Rate was increased from &]/2 to 8 per cent and the government announced a series of deflationary measures. It is a credit to international co-operation that no major trading nation followed the British devaluation and its unsettling effect was thus minimized.
The devaluation of the pound deflected bearish sentiments against the U.S. dollar and a run into gold began which was to cost the United States $2.4 billion of gold in the five months beginning in November 1967 and ending in March 1968. Pressure on the capital markets in the United States during most of 1967 remained intense and towards the end of the year long term rates reached their highest level in over 40 years. A worsening U.S. balance of payments deficit, the failure of Congress to act on the Administration's proposal for temporary tax surcharges on personal and corporate incomes, and the devaluation of the pound with its consequences for the U.S. dollar all tended to worsen the U.S. financial markets. Consequently, long-term rates reached still higher levels in March 1968 and short-term rates continued their steep climb which had begun in mid-1967.
These interest rate developments, with increases in one country feeding on increases in another, had certain economic repercussions in Canada in 1967 and 1968. While domestic factors affecting the cost and availability of capital to some Canadian borrowers were of primary importance, the international situation exacerbated the problem.
At the annual meeting of the IMF which took place at Rio de Janie.ro in September 1967, the Governors gave their approval to the outline of a proposal to establish a new facility in the IMF for the creation of a new reserve asset. The new asset, referred to as Special Drawing Rights (SDR), will supplement, rather than replace, existing reserve assets and will be used in transactions between monetary authorities alone and in conjunction with "traditional" reserve assets. This facility will permit the orderly expansion of monetary reserves, and machinery has been set in motion in many member countries to secure the necessary legislative authority for participation in the new arrangements.
These long-term developments, however, had little immediate impact on world financial difficulties in late 1967, and the new pressures building up against the U.S. dollar following the devaluation of sterling led the President, on January 1, 1968, to introduce a stringent new balance of payments program intended to bring about a major improvement in the U.S. balance of payments. Its main provisions were directed at reducing direct investment outflows, increasing the repatriation of funds by U.S. subsidiaries abroad and discouraging U.S. tourists from travelling outside the western hemisphere.
October 1G, 19G8
[Stage Direction]
In the absence of any headway in Congress on the President's long-delayed tax proposal to reduce the budgetary deficit, the President's announcement failed to have any lasting effect towards restoring confidence in the U.S. dollar and hence in the system as a whole. Instead, speculation again developed shortly after the New Year, directed against the Canadian dollar and certain other currencies and a little later spilling over into a renewal of massive speculative and hedging activities in the gold market. Gold losses from international reserves became so large by March 17, 1968, exceeding 83 billion since the devaluation of sterling in November, that the Gold Pool ceased to support the private gold market and established a "two-tier" price system. Under this arrangement the former Gold Pool members agreed that henceforth officially-held gold should be used only to effect transfers among monetary authorities, and therefore they decided no longer to supply gold to the London gold market or any other gold market. Moreover, since the existing stock of monetary gold was sufficient in view of the prospective establishment of the IMF Special Drawing Rights facility, they no longer felt it necessary to buy gold from the market. Finally, they agreed that henceforth they would not sell gold to monetary authorities to replace gold sold in private markets. The subsequent settling of the "free" gold price at only a moderate premium over the official price was instrumental in reducing speculative activity very markedly.
At the end of March the remaining aspects of the SDR proposal still outstanding were settled at a meeting in Stockholm of Ministers of Finance and Central Bank Governors of the Group of Ten. Whereas the establishment of the two-tier gold system had been intended to solve an immediate problem, the Stockholm meeting had a reassuring effect by illustrating the progress being made towards a long-term solution to the problem of ensuring the adequacy of international liquidity.
The progress thus made on both of these fronts substantially reduced the earlier crisis atmosphere in the international monetary system. Further progress in this direction was made in June 1968 with the long awaited passage of the U.S. tax bill. Passage of the tax surcharge legislation was taken by foreign observers as a real indication of the U.S. determination to restore confidence in the U.S. dollar, and as such was influential in further restoring order in the system.
The response of the Canadian financial system to these events is discussed in detail in a later section. The process of the 1967 readjustment and continued growth of the economy which took place within this framework of events is now reviewed, in some detail, in the following pages.
READJUSTMENT 1967 and 1968 Income Developments
In 1967 as a whole the growth in aggregate wages, salaries and supplementary labour income moderated from the exceptionally rapid rate of 1966, and in the first half of 1968 the more moderate trend continued. (Statistical details are set out in reference tables 2 and 3). This slower rate of growth principally reflected a less rapid increase in employment, as average earnings of employed workers have continued to advance sharply. Average weekly hours worked in many industries were marginally less throughout 1967 than in 1966, and have shown no widespread tendency to increase in 1968.
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October 16, 1968
The levelling-off in construction activity, after the sharp increases of 1965 and 1966, brought about a decline in employment and a much smaller advance in average income per employee in this sector (see reference table 4). In manufacturing, employment was virtually unchanged while average incomes slightly accelerated their advance. Among the service industries trends were mixed. On the whole, the increase in average earnings in 1967 exceeded that of the previous year mainly by reason of the substantial advances agreed upon in new labour contracts, which have had a growing impact upon employee remuneration across entire industrial sectors, although the greater degree of slack in the labour market, reviewed below, slowed the advances in certain service industries.

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(Seasonally Adjusted at Annual Rates)
Corporation profits before taxes, which declined fractionally in 1966, recorded a further decline in 1967. A substantial recovery occurred during the first half of 1968. although labour contract disputes in some industries make it
October 16, 1968	COMMONS DEBATES	1265
difficult to assess the actual underlying strength of the profit position. In manufacturing, the profit pattern overall was one of slow improvement from the low point reached in the first quarter of 1967, with declines in some industries being offset by advances in others (see reference table 5). The mining group recorded good gains in almost all quarters, but trends were mixed in the service, trade and other non-manufacturing groups. Over the year, and continuing into 1968, the transportation, storage and communication group showed persistent hesitancy; but wholesale and retail trade together, after a slower year in 1967, recorded stronger profits during the early part of the present year.

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LABOUR INCOME AND PROFITS 1965 to 1968
(Seasonally adjusted at annual rates)
				1967	1968	
1965	1966	1967	4Q	IQ	2Q(Millions of dollars)	Wages, salaries and supplementary	26,179	29,661	32,389	33,132	33,776	34,740Corporation profits before taxes and be-	fore dividends paid to non-residents.	5,199	5,145	5,020	5,236	5,232	5,596(Per cent change from previous period)	Wages, salaries and supplementary	11.7	13.3	9.2	1.1<*	1.90)	2.90)Corporation profits before taxes and be-	fore dividends paid to non-residents.	7.9	-1.0	-2.4	1.7<>)	-0.10)	7.00)
(1)Quarterly change.
Source: DBS The National Accounts.
Corporate profits before taxes in the first half of 1968 represented 11.1 per cent of net national income. In 1967 as a whole they amounted to 10.8 per cent; in recent years, the share of corporate profits in the total reached a peak of 13.6 per cent in 1964, and since then it has been declining.
Net income of non-farm unincorporated business, after advancing slightly in 1966, picked up strength as 1967 wore on and achieved a year-over-year gain of over eight per cent. This group, which includes a large number of small enterprises engaged in construction activity, again showed growing strength towards the mid-year mark in 1968. Interest, dividends and other property income has advanced rapidly in 1967 and 1968, partly due to the relatively high interest rates and rising rentals prevalent during this period.
Expenditure Trends
On the expenditure side, as on the income side, some components have revealed cyclical characteristics over the past eighteen months. Similarly, however, this mild recessionary pattern has been almost totally obscured 'by the continuation of strong expansionary trends in other forces of demand, and by the impact of the special events of Centennial year. In the aggregate, therefore, expenditures have grown at rates which, while more moderate than those of 1966, have remained strong. Quarterly expenditure developments are set out in detail in reference tables 6 and 7, and depicted graphically in Chart 3.
1266
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October 16# 1968

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(Seasonally Adjusted at Annual Rates) By Quarters Billions of Dollars
10
7
20
10
7

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October 16, 1968
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Among the expenditures revealing mild cyclical features, business fixed capital outlays including housing have been the most important. On a national accounts basis, a decline of about one per cent in value and four per cent in volume occurred in this sector in 1967 as a whole; the quarterly pattern for total investment expenditure showed small but almost uninterrupted declines from mid-1966 to end-1967; strengthening in this sector now is apparent although some of this represents higher costs. (These developments are shown in Chart 4). The movement of business expenditure on plant and equipment reveals even more sharply a cyclical-type pattern. This component reached a peak in the fourth quarter of 1966, and fell to its trough in the fourth quarter of 1967, since when it has again moved up. It may be observed that as the actual decline in this component was of such modest proportions the recovery would not have to be very sharp to resume an appropriate long-term trend.
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October 16, 1968
Housing expenditures, too, showed a cyclical pattern. Conditions in the financial markets brought about a very marked decrease in the funds available for mortgage investment in 1966, and residential construction outlays fell through that year from a first-quarter peak. This trend was sharply reversed in 1967, and quarterly gains were substantial until some hesitation again became apparent in late 1967 and early 1968. Growth in this expenditure component has been re-established following a high level of new starts early in the present year. The recent pattern of housing starts is shown in Chart 19, on page 60.

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1957	1961	1965	1966	1967	1968®Total capital expenditure^5	8,717	8,172	12,865	15,090	15,174	16,038Total capital expenditure-per	cent in-	-1.1	17.6	17.3	0.6	crease over preceding year.	8.5	5.7Total capital expenditure in	constant	120.9	136.0	133.1	dollars, index 1957 = 100....	100.0	90.0	Total capital expenditure as a of GNP	per cent	27.3	21.8	24.6	26.0	24.4	24.0®
<*>Includes housing, business and social capital.
Intentions.
WEstimate by Department of Finance.
Source: Private and Public Investment in Canada, Outlook, annual, and mid-year review 1968.
Another indication of the cyclical nature of recent capital expenditure may be found in the changing composition of the programme. Thus, at a peak period of business expansion the contribution of business capital expenditure to the total rises to a maximum. The share of governments and housing becomes more significant at times of slower growth. Recent trends are set forth in table 3 and depicted graphically in Chart 5.

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1957	1961	1965	1966	1967	1968®
		(Per cent of total capital expenditures)				
Business capital expenditure	64.9	58.3	61.7	64.0	61.5	59.1Social capital expenditure	18.7	23.7	21.7	21.5	23.0	24.3Housing expenditure	16.4	18.0	16.6	14.5	15.5	16.6Total Capital Expenditure	100.0	100.0	100.0	100.0	100.0	100.0
M Intentions.
Soobce: DBS and Department of Trade and Commerce: Private and Public Investment, Outlook, annual and mid-year review, 1968.
October 16, 1968
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The full nature of this readjustment in capital expenditures may be brought out by placing the changes which have occurred into a longer-term context, and by consideration both of the capital stock position and the impact of financial strains upon the liquidity of Canadian corporations. The timing of some investment activity, too, was governed by non-economic factors.
The slight decline of business capital expenditures in 1967 and the modest reversal in 1968 has represented a relatively smooth adjustment following several years of extremely rapid growth up to 1966. Indeed, the rate of growth of capital expenditures from 1961 to 1966 was about 40 per cent greater than that of GNP. This high rate of growth was not sustainable in the long run; by the end of 1966, the capital stock of the economy was adequate for current levels of output and, in general, there was no excess capacity.

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PRIVATE AND PUBLIC CAPITAL EXPENDITURES*
1956 - 1968
Billions of Dollars
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October 16. 1968
From this viewpoint, the recent slower pace of business investment, which has been in fact nothing more severe than a levelling-off, sharply contrasts with the situation following the 1955-57 investment boom. On that occasion the boom had continued over-long, excess capacity had been built up, and total capital expenditures fell sharply and remained at low levels relative to GNP for many years thereafter, as indicated in table 2 and reference table 12.
The impact of financial constraints on business capital expenditures has taken the form of hesitation in making new plans rather than in failure to complete projects begun earlier. Some major developments in which large-scale financing plays a part have been stretched out, including some major hydroelectric projects. These financial developments have also been reflected in the postponement of some institutional construction. Finally, it should be borne in mind that 1966 saw the virtual completion of a number of major projects whose timing had reflected particular circumstances; among these were some large paper mills in British Columbia.
Among the other components of expenditure, non-farm business inventories also have displayed cyclical characteristics. Accumulation rose to peak rates in mid-1966, after which quarterly gains were more moderate. However, inventory levels remained high throughout most of 1967 until an actual decline occurred in the final quarter. In the first half of 1968 there has been virtually no accumulation of inventories.
Among the expenditure components showing continued expansion, consumer outlays have been an important sustaining force. The growth has been rapid during the last four years, with an annual growth rate averaging somewhat more than eight per cent; this rate was maintained during the first half of 1968. However, as the annual increase in consumer prices advanced from 1.6 per cent in 1964 to more than three per cent in 1967, the growth in real terms has declined from a very high rate of 6.3 per cent in 1964 (when economic slack was being taken up) to an annual rate of 4.8 per cent in 1967. This latter rate was approximately maintained in the first quarter of 1968, although a rather lower rate developed in the second.

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GROWTH OF CONSUMER INCOME AND EXPENDITURE 1963 to 1968
-	1963	1964	1965	1966	1967	19680)
		(Per cent change from previous year)				
6.3	5.7	10.8	9.8	8.1	6.7Consumer expenditure:	6.0	7.9	8.1	8.7	8.2	8.51.4	1.6	2.0	3.4	3.3	4.2Total real consumer expenditure....	4.5	6.3	6.0	5.1	4.8	4.2
W First half year over first half 1967. Source: DBS The National Accounts
DBS Canadian Statistical Review.
Consumer expenditure on durable goods increased by nearly five per cent in 1967. A price increase of over 2$ per cent reduced the real growth to two per cent. The 2} per cent price increase was in contrast to virtually unchanged
October 16, 1968
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prices for consumer durables over the previous several years. The quarterly pattern of these expenditures has been erratic, as is typical of this volatile element of personal spending, and has continued to be irregular in 1968.
In real terms, 1967 personal expenditure on non-durable goods increased by over seven per cent while the volume of expenditures on services grew at less than three per cent. Part of this sharp divergence in real growth rates was related to the statistical treatment of very large 1967 expenditures by foreign tourists, to which reference has already been made. This adjustment, which was large in Centennial year, is conventionally attributed to personal expenditure on services, when in fact some of the expenditures were for purchases of nondurable goods.
Expenditures on goods and services by governments have also been a major element within the total demand pattern. The federal, provincial and municipal governments together increased their outlays by just under ten per cent in 1967 from the 1966 level. While this advance represented a sharply reduced rate of growth from the gains of the two previous years (in 1966 the advance was around 17| per cent), the share of the government sector in gross national expenditure has continued to increase. Thus, in 1967 and the first half of 1968 government purchases of goods and services represented some 20 per cent of total national expenditures; the ratios were 19.4 and 18.4 per cent in 1966 and 1965 respectively.
Purchases of goods and services by provincial and municipal governments form about two-thirds of all government expenditure on goods and services. These rose by 10.2 per cent in 1967. During the first half of 1968 they reached an annual rate of $8,740 million, some 9.5 per cent above the corresponding period in 1967. Federal outlays on non-defence goods and services rose 11.0 per cent in 1967 and 7.6 per cent in the first half of 1968. A smaller rise in defence outlays reduced the growth in total federal purchases to 8.6 per cent in 1967 and 4.9 per cent in the first half of 1968. These developments are summarized in table 5.

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-	1963	1964	1965	1966	1967	19680)
			(Millions of dollars)			
Federal: defence	1,572	1,584	1,559	1,709	1,805	1,762non-defence	1,362	1,462	1,734	2,211	2,454	2,734Percentage of GNE	6.7	6.4	6.3	6.7	6.9	7.1Provincial	1,725	1,929	2,188	2,663	3,015	3.240WPercentage of GNE	4-0	4-1	4.3	4-6	4-9	5.1Municipal	3,416	3,679	4,133	4,703	5,103	5,500(«Percentage of GNE	7.9	7.8	7.9	8.1	8.9	8.7T otal	8,075	8,654	9,614	11,286	12,377	13,236Percentage of GNE	18.6	18. S	18.4	19.4	19.9	80.8
<l>First half year, seasonally adjusted at annual rates.
Department of Finance estimates.
Source: DBS The National Accounts.
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October 16, 1968

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(Billions of Dollars)
(Ratio Scale)
October 16, 1968
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The expansion of demand for the type of services provided by government is of course related to the rapid growth in the economy and the increasing complexity caused by urbanization, rising demand for technological skills and continuing rapid gains in population and labour force. These changes also have had an impact on government capital investment, which similarly has increased rapidly as outlays on such things as transportation facilities and schools have become greater. In 1965 and 1966, fixed capital formation by all governments increased by close to 20 per cent annually; in 1967 and during the first half of 1968 this receded to an increase of around eight per cent, but this still represents a growth rate of almost twice the average recorded prior to 1965.
Foreign Trade and the Current Account of the Balance of Payments
On a national accounts basis, exports of goods and services, which comprise more than one-fifth of GNP, provided a considerable stimulus to the rapid economic expansion of the 1960s. With the exception of 1962 and 1965, they have increased more rapidly than GNP. This remained true in 1967, even though their growth in that year, at 12.3 per cent, was less than the 16.5 per cent gain of the preceding year. Strong quarter-to-quarter gains of 10.0 per cent and 3.7 per cent respectively were recorded in the first two quarters of 1968. In 1967 there was a 17 per cent increase in service receipts and a smaller growth of about 10 per cent in goods exports. The large increase in 1967 service receipts reflected greatly increased tourist receipts related to Expo '67 and Centennial year activities.
It is generally true that the current account deficit in the Canadian balance of payments tends to increase during an expansionary period, and to decline with a moderation in domestic demand. There are, however, sufficient noncyclical factors present at all times either to obscure this relationship (as between 1962 and 1964) or to exaggerate the effect, as during the period of adjustment which was experienced in 1967.

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CHANGES IN CURRENT ACCOUNT BALANCES<'><*>
1967 over 1966
IQ	2Q	3Q	4Q	YearMerchandise balance	+ 88 - 10 -	25 -	35	(Mil + 55 +172 -127 + 45	lions of do: -137	lars) -f 251	Non-merchandise balances: Travel	Other	+ 16 +306	Total non-merchandise	+ 46	
Total current account balance		+ 53	+100	+169	+287	+619
					
(1) Change over the corresponding quarter of the previous year. Balance of payments basis.
Note: +=increase in surplus, reduction of deficit, or swing into surplus. - =increase in deficit, reduction of surplus, or swing into deficit.
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October 16, 1968
On a balance of payments basis, the reduction in the current account to $543 million in 1967 owed over three-quarters to a swing in the travel account, but the contribution of merchandise transactions to the improvement was also substantial. As table 7 shows, Canadian expenditure on foreign goods and services in 1967 rose at less than half the rate of the previous year, in accordance with domestic economic conditions, and the more moderate growth in current payments was reflected in every account except inheritances and emigrants funds.

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Merchandise trade	
(excluding wheat and flour)	
Gold production available for export
Travel	
Interest and dividends	
Freight and shipping	
Inheritances and migrants' funds-
Official contributions	
Other services	
Total services	
(excluding travel)	
Total income or expenditures	
Income from		Payments to	
other countries		other countries	
1966	1967	1966	1967
(Per cent change from previous year)			
18.1	10.3	17.1	7.9(17.1)	(15.3)	(17.1)	(7.9)- 8.0	-11.8	-	-12.4	55.2	13.1	- 2.6- 1.2	- 7.5	5.0	4.413.5	11.5	8.1	7.424.1	25.7	- 6.2	7.6-	78.5	9.017.7	6.2	18.5	12.012.2	20.5	11.8	6.0(12.1)	(7.4)	(U.5)	(8.1)16.7	12.6	15.4	7.3
Exports of merchandise, which rose more rapidly than imports of merchandise, led to an improvement in the merchandise balance. The smaller rate of increase in 1967 than in 1966 was a reflection of the generally less buoyant market conditions abroad in 1967. Towards the end of the year, however, there was a marked acceleration in economic activity in the United States and Europe, which had a very beneficial effect on the Canadian trade balance, as it coincided with a period of progressive deceleration in Canadian imports. The recovery in exports in the fourth quarter was linked with a number of special factors in the United States, which led to the first quarterly merchandise trade surplus with that country since 1951.

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-	1967
IQ	2Q	3Q	4Q Year
(Per cent change from same period a year ago)
Exports (adjusted)	
17.4	16.0	0.3	8.9	10.3Imports (adjusted)	
13.5	13.6	5.9	7.9
It is of interest to trace the substantial changes in exports throughout 1967 and 1968. A rapid growth in exports had begun in the fourth quarter of 1965 and continued into the first half of 1967. Wheat exports, despite large aid shipments to India in the second quarter, were barely above the level of a year earlier, but
October 16, 1968
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exports of automobiles and products were still running at twice the 1966 level and helped to maintain the momentum of the export expansion. Canadian shipments of goods other than wheat and automobiles were by mid-year still rising at the same rate as a year earlier, although the trend throughout the first half of the year had been clearly moderating. A slight deceleration in exports to the United States in the second quarter was largely offset by a recovery in shipments to the U.K., the European Economic Community, and elsewhere. Of particular strength throughout the first half of 1967 were exports to Japan and Australia.
The break in the trend occurred in the third quarter. With the close of the 1966-67 wheat season (and purchase agreements thereunder) at the end of July, wheat exports fell to less than 40 per cent of the 1966 level. Motor vehicle shipments continued to rise at a rapid rate in July and August, but from September onwards were affected by a strike in the United States which caused a shortage of parts in Canadian plants. Export of goods other than wheat and automobiles fell below the level of a year earlier in August and September, as exports to Europe and South Africa and Japan declined. Shipments to Japan, which until the end of July had maintained a level some 60 per cent higher than in the previous year, showed only eight per cent increases in August and September. Similarly, there was a sharp deceleration in exports to the United States which was only partly accounted for by the strike. Indeed, the third quarter levelling was remarkable for its pervasiveness. Isolated elements of strength were exports to Australia and the higher demand for Canadian petroleum arising out of the Middle East Crisis.
The recovery in exports in the fourth quarter was extraordinary in the sense that it occurred in the face of continued low levels of wheat exports and strike-affected export levels of automotive products. Other exports, however, rose about 13 per cent in the quarter. In part, this development was associated with a general strengthening of foreign demand, as the U.S. and European economies began to take on more buoyant characteristics; but the most dynamic elements of the fourth quarter export performance were copper and iron and steel. The former was affected by the prolonged copper strike in the United States, and the latter by hedging operations on the part of U.S. companies against a possible steel strike in the summer of 1968.
The deceleration in imports in the second half of the year was very pronounced. Imports of machinery, iron and steel and non-ferrous metals were all below the level of the previous year. Imports of motor vehicles and parts rose less rapidly than before, particularly in the fourth quarter. Imports of foodstuffs and consumer durables rose twice as rapidly as in 1966, and imports of aircraft and parts, and of petroleum from Venezuela, also increased.
In general, there was a progressive moderation in import demand for producer durables and certain raw materials, reflecting the adjustment to a lower rate of economic growth during 1967. The trade deficit for motor vehicles and parts declined by about $150 million, but this was more than offset by the $350 million shortfall in wheat and flour exports. The increase in the overall trade surplus was, therefore, due entirely to the turnabout in the balance on goods other than wheat and automobiles, from a deficit of over $300 million in 1966 to a substantial surplus in 1967. On a geographical basis, the major changes were an improvement in the bilateral trade balance with the United States, which was considerably larger than the reduction in the deficit on motor vehicles and parts alone, and a decline of about the same magnitude in the trade balance with the state-trading countries, which accounted for nearly the entire shortfall in wheat sales. There
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October 16, 1968
was a further improvement in the terms of trade, though not as pronounced as in 1966, which added approximately $155 million to the overall trade surplus in 1967.
In the first half of 1968, there was a further substantial improvement in the current account as a result of the large increase in the merchandise trade surplus. The deficit on non-merchandise transactions rose moderately in the first quarter due largely to higher payments of interest and dividends, and more rapidly in the second quarter as a result of the adjustment to more normal levels of tourist receipts from the corresponding quarter of last year. Canadian merchandise trade expanded rapidly during the first half of the year; exports of goods rose by 16| per cent, while the increase in imports was about 8 per cent. Many of the same factors which helped to bring about the recovery of exports in the fourth quarter were still operative in the first part of the current year. However, following the fiscal changes passed by the U.S. Congress in June, and with the settlement of labour problems in the U.S. steel and copper industries, it can be expected that U.S. purchases will be scaled down substantially in the second half of the year.
Exports to Italy and Japan have been declining, and the rate of shipments to the U.K., a feature of the recovery of exports in the fourth quarter, has also slackened. As a result, the accelerated export expansion during the first half of the current year has polarized increasingly on shipments to the United States.
Imports resumed their advance in the new year. The strong demand for consumer goods continued and imports of motor vehicles and parts bounded upward as the backlog of orders began to be filled, but imports of iron and steel and of machinery continued to decline. Despite this rise in imports, the merchandise trade surplus has increased to an annual rate of over one billion dollars, which is similar to the fourth quarter performance, but represents twice the level of the first six months of 1967. The deficit for motor vehicles and parts was about the same for both periods, while shipments of wheat were still nearly 30 per cent lower than in the first half of last year. The trade balance for other commodities, however, showed a surplus of nearly $400 million, compared to a deficit of over $60 million in 1967.
The Labour Force
The Canadian labour force in 1967 again grew at an exceptionally rapid rate compared to that of other industrialized countries of the free world. However, the actual increase of 3.7 per cent was slightly less than that of 1966, and the changes which occurred among the component groups were indicative of the adjustments taking place across the entire economy. These changes continued in the first half of 1968.

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CHANGES IN THE LABOUR FORCE 1963 to 1968
1963	1964	1965	1966	1967	1968®Total labour force	
Agriculture	
N on-agriculture	
Men	
Women	
Ages 14-19	2.0 -1.9 2.5 1.2 4.1 3.7	(Per cei 2.7 -3.2 3.4 1.7 5.5 4.2	it change f 3.0 -6.1 3.9 2.1 5.3 5.4	[DOT]om previo 3.9 -8.5 5.0 2.5 7.3 5.4	us year) 3.7 2.7 3.8 2.6 6.2 4.9	2.5 -1.4 2.8 2.0 4.0 2.6
O)First eight months, compared to the same period in 1967.
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One of the clearest indicators of the slackened labour market pressure in 1967 was the turnaround in the movement of workers off the farms. The movement out of agriculture, which has been a feature of the entire postwar period, has characteristically accelerated during periods of rapid growth in the non-farm economy, and has been less marked during recession or periods of less rapid economic growth. The last occasion upon which an actual increase in the agricultural labour force occurred was during the brief but sharp recession of 1954; at that time, however, the labour force itself was growing at less than half its 1967 rate. The decline in the agricultural labour force resumed during the first half of 1968.
As table 8 indicates, the growth of the female labour force also experienced a change of pace in 1967, after a particularly sharp advance in 1966, and this
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October 16, 1968
slower pace has been accentuated in 1968. The actual 1967 increase, however, was still very substantial, as Expo and other Centennial activities created employment opportunities in a wide range of occupations of interest to women. Young people also, as their numbers continued to expand, were attracted into the labour market by the widespread demand for relatively unskilled and inexperienced workers.
The 1967 labour force growth reflected higher immigration than in 1966, although the inflow slowed during the later months of the year. The first half of 1968 also showed a reduced movement of newcomers into Canada compared to the first two quarters of 1967. Recent labour force trends are set out in detail in reference table 19, and the changes of recent years are shown in Chart 7.
Employment
Employment rose by 3.2 per cent in 1967 and advanced by a further 1.6 per cent in the first eight months of 1968. The rate of increase in employment thus has declined quite sharply from the 4.2 per cent peak of 1966, and has fallen short of the increase in the labour force in both 1967 and 1968.

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CHANGES IN EMPLOYMENT 1963 to 1968
-	1963	1964	1965	1966	1967	1968<«
		(Per cent change from previous year)				
Total employment	2.4	3.7	3.8	4.2	3.2	1.6Agriculture	-1.7	-2.9	-5.7	-8.4	2.8	-1.3N on-agriculture	2.9	4.4	4.8	5.4	3.2	1.81.8	2.9	3.1	2.9	2.0	0.8Women	4.1	5.7	5.7	7.4	5.9	3.4Ages 14-19	4.0	5.4	7.2	6.1	3.6	0.5
<l>First eight months, compared to the same period in 1967.
In terms of numbers, employment rose by 227,000 in 1967 and a further 117,000 in the first eight months of 1968, or by 344,000 altogether in the twenty months. During this period, the total labour force increased by 468,000. The unemployment rate rose from an average of 3.6 per cent in 1966 to 4.1 per cent in 1967, and to 4.8 per cent in the first half of 1968. The unemployment rate for teenagers rose from 8.3 per cent in 1966 to 13.2 per cent in 1967, as the increase in teenage employment, although large, was not sufficient to absorb the extremely sharp increase in the teenage labour force.
Regional Employment Trends
By regions, the growth of labour force and employment continued the same broad pattern in 1967 and 1968 as occurred in 1966, although the cyclical changes and the impact of Expo influenced this pattern to some extent in 1967 (Chart 8). British Columbia has again shown the most rapid growth in labour force and employment. The year 1967 saw an exceptionally large movement of labour into the region, and employment also rose unusually rapidly. However, in common with other regions, British Columbia recorded a rise in the unemployment rate in 1967, and this has continued to rise in 1968 as employment gains have slowed down (see reference table 20 and Chart 9).
October 16, 1968
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1280
[Stage Direction]
October 16, 1968

[Stage Direction]
Semi-Annually - Per Cent CANADA
[Stage Direction]
 - REGION

[Stage Direction]
1963	1964	1965 1966	1967 1968


[Stage Direction]
1963	1964	1965 1966	1967 1968
8
4
0
8
4
0
8
4
0
October 16, 1968
[Stage Direction]
The Prairie region in 1967 experienced slower growth of both labour force and employment, possibly reflecting movement of workers to British Columbia. During the first half of 1968 signs of change became apparent, as the Prairie labour force (and particularly the non-farm labour force) climbed relatively sharply. Partially reflecting this, the Prairie region unemployment rate rose from the 1967 rate of 2.4 per cent to 3.4 per cent in 1968. At the same time, the flow of workers off the farms into the non-agricultural labour force, which had been temporarily arrested in 1967, resumed in 1968, as non-farm employment in this region returned to a more rapid rate of growth.
In Ontario, the total labour force reached a peak rate of expansion in 1967, with a gain of 4.2 per cent over 1966. The non-agricultural labour force slowed its rate of growth from the peak of the previous year, as the outflow of workers from agriculture slowed down here also. In 1968, as the economy has been readjusting from the activities of Centennial year, all the labour force components have shown smaller advances. Non-farm employment, which rose by 4.7 per cent in 1966 and 3.5 per cent in 1967, rose by 2.6 per cent in the first half of 1968 (compared to a year earlier). Labour force growth has fallen to 3.1 per cent. As a result, the unemployment rate, which had remained at 2.5 per cent in 1965 and 1966, rose to 3.1 per cent in 1967 and 3.6 per cent in the first half of 1968.
Developments in Quebec have been affected both by the impact of Expo in 1967 and by the readjustments which have followed. As in all other regions except British Columbia, the peak rate of growth in employment occurred in 1966, but the advance in 1967 was still very substantial, at 3.2 per cent. Partly as a reaction to this, Quebec recorded a small decline in employment in the first half of 1968 compared to a year earlier, and the growth in the labour force was only slight. The unemployment rate, despite the employment created by Expo and related activities, rose to 5.3 per cent in 1967, second only to the Atlantic region, and rose again to 6.4 per cent in the first half of 1968.
The Atlantic region has continued to record slower growth in employment than other regions except Quebec, and the regional participation rates also remain lower than elsewhere in Canada. In addition, although the Atlantic region currently is experiencing higher unemployment rates than was the case in 1967 it is noteworthy that the spread between the Atlantic rate and those in other regions has narrowed since 1965. Thus, although the readjustments now taking place in the economy are resulting in higher unemployment in all regions, the Atlantic provinces are not experiencing the relative worsening of their position that has been apparent in similar circumstances in the past.
Output, Productivity, Costs and Prices
The year 1967 was a period in which real output increased less rapidly, as capital investment outlays levelled off and the private non-farm sector completed some major expansion programmes. With continued rapid labour force growth and the emergence of a margin of reserve capacity, the pressures on resources which had become marked in 1966 began to recede. However, the sustained demand for labour associated with Centennial year activities, and the continued (if more moderate) growth in total expenditures, maintained conditions in which costs continued to rise. The general level of prices (GNE deflator) rose by 3.9 per cent in 1967, after a rise of 4.5 per cent in 1966; the rise in the first half of 1968 over the first half of 1967 was about 3.3 per cent.
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October 16, 1968
Production of Goods and Services
The rise in real domestic product in 1967, excluding agriculture, was 3.6 per cent, and in the first half of 1968 it continued to rise at about the same rate. With the exception of the second quarter of the year quarterly gains in 1967 and into early 1968 were moderate, but there was evidence of greater strength in the second quarter of 1968, as shown in Chart 10.

[Stage Direction]
CHANGES IN REAL DOMESTIC PRODUCT (by quarters)
1966	1967	1968	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QReal domestic product less agriculture	0.3	(P 1.3	er cent cl 0.6	iange fro 1.7	m previo 0.6	us quart 0.6	er) 0.6	1.5Mining	-3.5	4.9	1.4	2.6	0.8	3.2	-0.3	2.4Manufacturing	0.3	0.7	-1.1	0.5	0.4	1.1	-0.3	3.2Non-durables	-0.5	1.0	-0.2	1.0	-0.1	1.1	2.2	1.3Durables	1.0	0.4	-2.0	-0.1	1.0	1.0	-2.7	5.2Construction	-4.2	-0.8	1.0	3.1	2.0	-3.1	1.5	6.1Transportation, storage and communication 	-	2.5	2.3	1.1	0.6	0.8	2.1	-1.5Trade	2.8	1.7	-0.7	4.0	-0.5	1.0	-0.7	0.6Finance, insurance and real estate..	1.1	0.7	1.2	1.5	1.2	0.9	0.7	1.2Services	0.9	1.3	1.3	1.6	0.9	0.3	0.6	0.6Commercial industries less agriculture 	0.1	1.3	0.5	1.6	0.5	0.6	0.5	1.7
Source: DBS Indexes of Real Domestic Product by Industry (1961 Base). DBS Index of Industrial Production (1961 = 100)
The manufacturing sector revealed some weakness through the first nine months of 1967, but picked up strength in the fourth quarter. This new trend was temporarily halted in early 1968, as industrial disputes restricted the growth in output in some industries, but was resumed in the second quarter.
The construction industry, which had reached a peak in output in early 1966, operated at a lower rate during the second half of that year, but picked up again in 1967. In part this reflected the pattern of residential construction, as housing starts declined throughout 1966 until the final months of the year before turning up, but it also reflected the timing of a wide range of projects, both public and private, associated with preparations for Expo and other Centennial activities. Strong gains occurred in the first half of 1968. The service industries taken together experienced higher levels of activity in late 1966
October 16, 1968
[Stage Direction]
and the first half of 1967, but have advanced more slowly since then. The slower pace has persisted in the first half of 1968.
In total, the commercial sector excluding agriculture showed relatively modest quarterly gains from mid-1966 (except during the Expo-stimulated second quarter of 1967) until early 1968, but developments during the second quarter of the present year brought about a sharper advance in this measure of total economic activity.
Employment gains in the total non-agricultural commercial sector reflected this overall trend in 1966 and 1967, showing a generally slower rate of advance during this period than in the preceding quarters of continued rapid growth.

[Stage Direction]
(Quarterly Data Seasonally Adjusted)
1 Q. 1963 = 100
1963	1964	1965	1966	1967	1968
[Stage Direction]
October 16, 1968

[Stage Direction]
CHANGES IN EMPLOYMENT BY INDUSTRY (by quarters)
1966	1967	1968	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QrMines	-3.2	(P 2.8	gr cent cl 0.9	iange fro -0.8	m previo 1.1	us quart 0.8	3r) 1.3	-0.8Manufacturing	0.3	0.9	0.1	-1.0	-0.1	-0.4	-0.8	1.3Non-durables	0.2	0.7	0.1	-0.4	-0.6	-	0.5	1.6Durables	0.6	1.1	-0.1	-1.8	0.6	-0.8	-2.2	0.9Construction	-1.9	1.1	0.3	-5.0	-0.6	0.1	0.3	2.1Transportation, storage and communication 	0.8	1.0	1.7	0.1	-0.9	0.1	0.8	-1.6Trade	0.3	1.1	0.5	0.5	0.5	0.9	1.1	2.0Finance, insurance and real estate..	0.8	0.7	2.2	2.5	1.5	1.0	1.1	3.1Services	1.9	1.5	1.6	2.7	2.4	1.1	1.4	2.3Commercial industries less agriculture	0.1	1.2	0.8	-0.4	-0.2	0.4	0.5	1.4
*=preliminary
Source: DBS Estimates of Employees by Province and Industry (Seasonally adjusted by the Department of Finance).
However, some variations are apparent; thus, the increase in service employment in the second quarter of 1967 was insufficient to offset the decline in construction and manufacturing, and the sharp increase in total output in the second quarter of 1967 was not matched by a similar advance in total commercial non-agricultural employment, as the output gains were largely achieved through improved productivity. Within the sectors, the postwar pattern of continued growth of service employment and relative stability or decline in manufacturing employment continued in evidence, with the readjustment process in the economy bringing about some streamlining in manufacturing employment during 1967 and early 1968. The construction industry and mining recorded fluctuations which reflected, to some extent, the specific trends in activity in these industries.
Changes in productivity, or output per worker, calculated from the changes in output and employment reviewed above, continued to be slow through 1967 and early 1968.1
«>Changes in productivity calculated by use of these two series are affected to the extent that real output includes the product of the self-emploved and of those who work less than one full day during the week, whereas the employment data refer only to paid workers who work at least one day per week. A more precise representation of productivity change, on an annual basis, is published in DBS Aggregate Productivity Trends, 1946-1966, Annual, Cat. 14-201, and DBS Daily Bulletin, June 17, 1968.
October 16, 1968

[Stage Direction]
CHANGES IN OUTPUT PER EMPLOYEE (by quarters)
1966	1967	1968	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QP(Per cent change from previous quarter)	Mines	-0.3	2.0	0.5	3.4	-0.3	2.4	-1.6	3.2Manufacturing	-	-0.2	-1.2	1.5	0.5	1.5	0.5	1.9Non-durables	-0.7	0.3	-0.3	1.4	0.5	1.1	1.7	-0.3Durables	0.4	-0.7	-1.9	1.7	0.4	1.8	-0.5	4.3Construction	-2.3	-1.9	0.7	8.5	2.6	-3.2	1.2	3.9Transportation, storage and com-	munication	-0.8	1.5	0.6	1.0	1.5	0.7	1.3	0.1Trade	2.5	0.6	-1.2	3.5	-1.0	0.1	-1.8	-1.4Finance, insurance and real estate..	0.3	-	-1.0	-1.0	-0.3	-0.1	-0.4	-1.8Services	-1.0	-0.2	-0.3	-1.1	-1.5	-0.8	-0.8	-1.7Commercial industries less agri-	culture	0.1	-0.3	2.0	0.7	0.2	-	0.3
* = preliminary Source: tables 10 and 11.
With respect to some of the productivity changes shown for some of the service industries, it should be pointed out that there are both statistical and conceptual problems which make interpretation of trends difficult. Fluctuations m productivity in construction were large, as this industry readjusted from its earlier high levels of activity. The mining sector generally showed significant gains in productivity.
The readjustment process was, however, reflected more consistently in the manufacturing sector, as the labour force was progressively streamlined and redeployed following the overheated situation of 1965 and early 1966. In the non-durables industries, productivity gains were sizable in most quarters after a slow start in early 1967. Gains in the durables industries were affected in early 1968 by labour disputes in some areas, but otherwise also showed a general advance. Second-quarter gains in this sector were substantial. As a result of these mixed trends, the total non-agricultural commercial sector recorded relatively poor productivity gains from mid-1966 to early 1968, except during the unusual second quarter of 1967.
A comparison of income and production data (table 13) provides an indication of changes in wage costs and profits per unit of output. This table shows a continued rise in total unit labour costs. Trends are depicted graphically in Chart 11. For the first half of 1968, the increase over the first half of 1967 was 2.5 per cent. This compared with an increase of 5.6 per cent in 1967, over 1966.
[Stage Direction]
October 16, 1968

[Stage Direction]
BY MAJOR INDUSTRIAL GROUPINGS (1963 = 100)
(Ratio Scale)
130
110
90
130
110
90
Oclober 16, 1968

[Stage Direction]
CHANGES IN EARNINGS AND OUTPUT (by quarters)
1966	1967	1968	3Q	1 4Q	IQ	2Q	3Q	4Q	IQ	2Q*Wages and salaries per worker	(Per cent change from previous quarter)	Non-farm	1.6 2.2	1.7 1.0	1.5 0.6	1.7	1.3 2.3	0.7 0.7	1.6 1.5	1.5Manufacturing	1.6Output per worker	Non-farm	-0.3	0.1 -0.2	-0.4 -1.2	0.2	0.1 0.5	0.1Manufacturing	0.5	1.9Wages and salaries per unit of output	Non-farm	1.9 2.2	1.6 1 2	1.9 1.8	1.3 1.8	0.5 -0.8	1.4Manufacturing	1.5 1.0	-0.3Corporate profits per unit of output	Non-farm	-8.2 -9.1	5.2 3.2	-7.2 -5.6	4.6 4.7	1.0 5.4	-0.6 0.6	5.3Manufacturing	I	6.4
*=preliminary
Source: DBS Estimates of Labour Income.
DBS menTof%mancTe)PlOVeeS ^ Province and Industry (Seasonally adjusted by the Depart-
DBS Indexes of Real Domestic Product by Industry (1961 Base).
DBS Index of Industrial Production (1961=100).
DBS Corporation Profits.
			CHART 12				
	LABOUR COSTS AND PRODUCTIVITY						
		IN MANUFACTURING					
			1963 -	1968			
		TO 1963		= 100			
			(Ratio Scale)				
OUTPUT, WAGES AND SALARIES	LABOUR	COST PER UNIT OF OUTPUT	140	140	-	CANADA, U.S.A. -	130	- WAGES AND SALARIES	✓	130	PER MAN-HOUR ** ✓	115	-	115*	120	- /	. 	120	✓	110	/V -	110110	-	_	110	CANADA /	OUTPUT PER MAN-HOUR	/ /	/ /	100	105	/ ~	105/ /	120	120	/ / U.S.A.	WAGES AND SALARIES	100	/ /	
110	__ PER UNIT OF OUTPUT S*		110				
				95			95
90	i * * l
11 * * i
i * i i i
	90	90			
	1963 1964 1965 1966 1967	1968			1963 1964 1965 1966 1967 1968		
[Stage Direction]
October 16, 1968
The continued strong advance in overall unit labour costs reflects both the modest gains in total productivity and the sustained rapidity of the rise in wage rates discussed on earlier pages. Quarterly changes in the manufacturing sector have shown greater tendency to variability than the overall total. Both series, however, have recorded generally more moderate quarteily advances than were observed during the period of peak pressures around mid-1966.
Corporation profits per unit of output in the non-farm economy as a whole have varied sharply since late 1965. Since mid-1966, however, when there was a sharp fall in unit profits, there has been some increase. In the manufacturing sector since early 1967, in association with productivity improvements, unit profits have advanced. Industrial conflict in the first quarter of 1968 slowed this move towards higher unit profits.
Price Developments
The forces principally bearing upon price changes in 1967 were a continued but much more moderate upward movement of food prices, a rise in the pi ice of services as higher wage and other costs worked through the service sectors, a rapidly-developing shortage of serviced land and of housing, and higher indirect taxes at both the federal and the provincial levels. As a result of these various developments the overall measure of price change, as recorded in the national accounts, rose by 3.9 per cent in 196/. flhis represented a decline fiom the 4.5 per cent gain of the previous year, and was followed by a further moderation in the first half of this year, when the GNE price deflator averaged about 3.3 per cent higher than the first half of the preceding year.
After the extremely strong advances in food prices in 1966, there was a levelling-off in this component during the first half of 1967. A sharp third-quarter rise was followed by a further period of relatively little change, apart from normal seasonal patterns. In the early part of 1968 changes in taxes at all levels of government caused a sharp rise in the prices of non-durables othei than food, and services.
During the past two years, increases in indirect taxes, including retail sales taxes levied at the provincial level, accounted for about one-fifth of the increase in the prices of goods and services as measured in the Consumer Price Index.
Consumer service prices recorded their largest gain of recent years in the second quarter of 1967, although further gains occurred in subsequent quarters to bring about a very rapid advance in this component over the period under review. (Annual changes in consumer prices are summarized in reference table 31 and Chart 13).
Residential construction costs, which showed some large gains in the course of 1966 and 1967, continued to rise, although more moderately, m early 1968; the rise in the non-residential sector, although generally less sharp, has followed a similar path. Machinery prices fell in 1967, reflecting the final removal of federal sales tax from these items. Export prices strengthened at year-end and have risen again in 1968, as did import prices.

[Stage Direction]
Revenues of the total government sector on a national accounts basis, inclusive of the Canada and Quebec pension plans, have increased rapidly m recent years as a result of both economic growth and tax changes. Government expenditures also have rtsen rapidly in this period although recently this trend
October 16. 1968
[Stage Direction]
	1965 1964
	
i	1966 1965
	
m-.	1967 1966
	
	AUG. '68

[Stage Direction]
FOOD	HOUSING

[Stage Direction]
NON-DURABLES	NON-DURABLES EXCLUDING FOOD	SERVICES
1290
[Stage Direction]
October 16, 1968
has moderated with the attempt by governments to curtail the growth of their outlays. These developments are illustrated on Chart 14. The government sector as a whole has had moderate although decreasing surpluses since 1965. In 1965 and 1966 the overall surpluses were $325 million and $348 million respectively. During 1967 the size of the surplus dropped to about one-half of that of the previous year; some increase occurred in the first half of 1968, as shown on Chart 15. It should be noted that these figures do not include large amounts of loans, provided by governments for various construction programmes, financed from accumulating government pension funds (which are taken as revenue for national accounts purposes), as well as by borrowing.
Exclusive of the transactions of the Canada and Quebec pension plans, the deficit on a national accounts basis of all three levels of government combined was $729 million in 1967, almost double that of the previous year. There was little change in this rate in the first half of 1968. From 1966 to 1967, the mam underlying factor in the change in the government position, exclusive of the Canada and Quebec pension plans, was the swing in the federal government sector from a surplus of $164 million in 1966 to a deficit of $256 million in 1967, while the provincial-municipal change was a small reduction in the deficit.
Current Developments
The past three years' overall surpluses on a national accounts basis, however, mask changes which have occurred in the composition of the public sector. The most significant of these changes were the transfer of savings from the private to the public sector with the inception of the Canada and Quebec pension plans in 1966, the erosion of the federal and provincial surplus positions with the expansion of expenditures, and increases in both federal tax abatements and transfer payments to the provinces and provincial transfers to the municipal governments.
The reduction in the surplus of all governments combined, in spite of rising revenues, emphasizes the sharply increased rate of expenditures which developed in early 1966; these have continued to grow although rather less rapidly. From 1965 to 1966, total government expenditure excluding intergovernmental transfers rose by 15.8 per cent, as compared with 11.6 per cent in 1965 In 1967, the rate of growth of government outlays was 11.4 per cent, and in the first half of 1968 it again receded to 9.6 per cent. The detail underlying the transactions of the government sector on a national accounts basis is presented in reference table 33.
The Federal Government
The surplus in the federal government sector declined in 1965, and by 1967 the federal government was in deficit. Quarterly changes in the federal position during 1966, 1967 and the first half of 1968 have been quite marked as a result of the introduction of several new programmes, the termination or consolidation of existing programmes, and administrative changes in the processing of personal income tax refunds.
Because of the expectation of a more balanced economic environment, there were few tax changes in the June 1967 budget. At that time a deficit of $300 million on a national accounts basis was forecast for the fiscal year 1967 08. Preliminary data indicate that the actual federal government deficit in fiscal year 1967-68 amounted to $423 million.1
<')The reconciliation of budgetary and national accounts revenue and expenditure is presented in reference table 35.
October 16, 1968

[Stage Direction]
* Excluding Intergovernment Transfers ** Including Canada and Quebec Pension Plans
10000
8000
6000
4000
2000 + 1000 0
29180-821
[Stage Direction]
October 16. 1968
On a calendar year basis, federal revenues rose by 8.4 per cent in 1967, and by about as much in the first half of 1968. Approximately three-quarters of the revenue increase in these years was accounted for by gains in personal direct taxes. In 1967, these reflected the full year effect of the June 1966 substantial restoration of the 1965 tax reduction and, in 1968, the surtax on personal income imposed as of January 1, 1968. The increase is net of an additional 8150 million in personal income tax abatements in favour of the provinces in 1967. Indirect taxes, investment income and employer and employee contributions to social insurance and government pension funds contributed $250 million to the gain in 1967 and at a more moderate rate in the first half of 1968. Corporate tax liabilities declined slightly in 1967, reflecting both the slow growth of corporate profits and the additional one per cent transfer of corporate taxes to provinces other than Quebec. A three per cent surtax imposed from January 1 1968, and the resumed growth in corporate profits, accounts for a gain of
11.8	per cent in corporate tax liabilities in the first half of 1968 over the corresponding period in 1967.
Total federal expenditures rose by 12.9 per cent in 1967 and 10.6 per cent in the first half of 1968, thus maintaining a moderating trend from the 14.4 per cent gain of 1966. Transfer payments to persons contributed a substantial proportion of the total over the last eighteen months, reflecting the reduction in the minimum age limit for old age security payments, the introduction of the guaranteed income supplement in 1967, additional transfers for adult education, and increased coverage by the unemployment insurance fund. Purchases of goods and services increased by 8.6 per cent in 1967 as compared with a gam of 19.0 per cent in 1966. Most of this increase was for operating costs not for capital formation. Additional wage increases in the first quarter of 1968 partially accounted for the continuation in the growth of expenditures on goods and services. Transfers to provincial and municipal governments reached an annual rate of more than $2,400 million in the first half of 1968, largely on account of higher payments to provinces for equalization and the expansion ol federal giants 101 adult training and shared-cost programmes.
Provincial and Municipal Governments
The deficit position of the provincial and municipal governments in 1967 remained relatively unchanged. A slight increase in the deficit of provincial governments was offset by a reduction in the deficit of municipal governments. Provincial-municipal revenues, exclusive of inter-governmental transfers, increased at a rate fractionally higher than in 1966 and amounted to $11,801 million Expenditures of provinces and municipalities together rose by 14.4 per cent in 1967 to a level of $12,274 million, rising less rapidly than in 1966. More buoyant revenue in the first half of 1968, partly arising from tax increases, brought about a further improvement in the provincial-municipal net position during that period.
Provincial government revenues increased very rapidly during 1967, especially in the first and second quarters. Partly because of increased personal income taxes abated to the provinces, and also on account of the growth in personal income, revenues from direct taxes on persons increased by 26.3 per cent in 1967. Indirect taxes, the main source of provincial revenues, also rose substantially. This reflected in part increases in the retail sales tax rates of Quebec, Newfoundland and New Brunswick and the introduction of a retail sales tax in Manitoba. Corporate income taxes abated to the provinces were extended to ten per cent in all provinces in 1967 and this contributed to a revenue gain from corporate
October 16, 1968

[Stage Direction]
Seasonally Adjusted at Annual Rates - By Quarters
tax liabilities, despite a levelling-off in corporate profits. Transfers from the federal government, which account for more than 20 per cent of total provincial revenues, increased by $330 million to reach a level close to $2 billion.
Expenditures of provincial governments continued to increase in 1967 at a rapid rate, as they have since 1964. In 1967, total provincial outlays amounted to $8,785 million, more than 21 per cent above their 1966 level. Purchases of goods and services, however, were up by only 13 per cent, compared to an abnormally large increase of 21.7 per cent in 1966, although there was a very rapid growth in wages, salaries and supplementary labour income. These increased by 18 per cent in 1967 as compared to increases of 13.6 and 12.1 per cent in 1966 and 1965 respectively. Transfers to persons rose by 29 per cent from 1966 to 1967, reflecting again a substantial increase in grants to non-commercial institutions such as hospitals, universities and schools, which are included in this category. In the first half of this year, the deficit position of provincial governments has shown some reduction, largely as a result of increased taxes.
Revenues of municipalities increased by 14.9 per cent in 1967 and by about 11 per cent in the first half of 1968. This has largely reflected the continuing rapid increase in transfers from provincial governments; these now provide over 40 per cent of all municipal revenues. Municipal expenditures increased at a slightly less rapid rate than in previous years, largely on account of a reduced rate of capital formation.
Financial Transactions of Governments
At the present time, the existing national accounts framework covers only income and expenditure transactions, and the important economic impact
[Stage Direction]
October 16, 1968
of government borrowing and lending cannot be analysed within this framework. To fill this gap it is necessary to examine the public accounts of the various governments, wherever feasible, and to supplement this by reference to other data such as new loan issues. Some analysis follows.
Generally speaking, the public accounts records are oriented to the administrative and legislative needs of the different units of government. This results in a variety of presentations and often of accounting techniques, with the result that the combined figures, including government agencies, are difficult to interpret. In addition, at the municipal level, the size and number of local units of governments give rise to problems in obtaining up-to-date information. In these circumstances, it is not yet possible to obtain a consolidated figure of financial requirements of all levels of government, although it is possible to make some general observations.
In the case of the federal government it had become evident by early 1967 that there was some relaxation in the pressure of demand in the economy, and relatively small cuts in tax revenues were provided for in the federal budget in June, 1967. A budgetary deficit of $740 million plus a net non-budgetary cash requirement of about $850 million for loans and advances to certain crown corporations was forecast for the then current fiscal year, excluding any forecast of Exchange Fund transactions. By late fall, however, it was felt desirable to bring down a second budget, and tax increases were introduced to restrain demand in order to moderate the increases in costs and prices that were taking place and to provide some relief from severe strains by then evident in the capital markets. Revenue measures proposed in the fall budget included increased taxes on liquor and tobacco, a surcharge of five per cent on personal income tax and the acceleration of corporate income tax payments. The bill containing the last two measures was defeated in the House of Commons, and in March 1968 the government introduced another income tax bill to replace the bulk of the revenues that would have been provided by the measures earlier proposed. The new bill, which was passed, provided for a three per cent temporary surcharge on personal and corporate income taxes as well as an acceleration of corporate tax payments.
The federal government's actual financial requirement for 1967-68 amounted to $587 million, taking into account non-budgetary outlays and cash realized from foreign exchange transactions. This was considerably lower than the forecast, which had explicitly excluded these exchange transactions, but was about ten per cent higher than that reported for 1966-67. The difference between the budget forecast on June 1, 1967, and the realized result was largely accounted for by the Canadian dollar proceeds resulting from the decline in foreign exchange reserves in the first calendar quarter of 1968. Details of the financing of these cash requirements are set out in the pages on federal government debt management.
Cash requirements of the provincial governments based on public accounts and other sources are estimated to have risen from a little under $900 million in 1966-67 to over $1,250 million in fiscal 1967-68. The increase between the two fiscal years was accounted for almost equally by increases in provincial budgetary deficits and increased loans and advances to their agencies and enterprises. Almost all of the increases shown in both of these categories were accounted for by Ontario.
A major portion of the financing needed to meet the increased requirements for 1967-68 came from increases in the direct funded debt of the provinces, a larger volume of funds from the Canada and Quebec pension plans and the running down of bank balances. There was a sharp drop in provincial Treasury bill issues in 1967-68.
October 16, 1968
[Stage Direction]
Only scattered information is available at the municipal level. Municipal deficits on a national accounts basis increased by 13 per cent between 1965 and 1966, to a level of $602 million, but dropped sharply to $349 million in 1967. Net new issues of municipal direct and guaranteed bonds rose from $263 million in 1965 to $506 million in 1966 and to $603 million in 1967.

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Total domestic investment in 1967, including that in inventories (on a national accounts basis), was $12,526 million, $667 million below the level recorded in the previous year. This change was mainly due to a substantial decline in the addition to inventories. On the side of the saving required to finance this investment, most of the decline took place in net borrowing from abroad; there was also a decline in the government sector surplus. Business gross saving rose fractionally, as a decline in corporate undistributed profits was slightly more than offset by a rise in capital consumption allowances and small valuation adjustments.
This levelling-off in gross business saving (shown in table 14) after a period of year-to-year growth reflected the reduction of profits before taxes and before dividends, which had occurred as a result of the 1967 slowdown, and the continued rise in costs. Developments in the first half of 1968 reflect some increase in business gross saving, little change in the government sector surplus (including the Canada and Quebec pension plans), and a further fall in the use of foreign saving as measured by the current account deficit; however, these changes virtually cancel out, and total saving shows little movement from 1967 levels.

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SOURCE AND DISPOSITION OF SAVING 1965 to 1968
-	1965	1966	1967	1968 «)
		(Millions of dollars)		
Source:				
Personal net saving	3,088	3,731	3,995	3,876Business gross saving, total	7,504	7,987	8,051	8,362Undistributed corporation profits	1,354	1,149	1,073	1,172Capital consumption allowances and miscellaneous	valuation adjustment	6,110	6,623	7,000	7,354Adjustment on grain transactions	-44	156	-87	-222Capital assistance from governments	84	59	65	58Inventory valuation adjustment	-325	-321	-291	-254Government sector suplus(+) or deficit(-)	325	348	157	208Federal	625	164	-256	-522Provincial and Municipal	-300	-535	-473	-260Canada and Quebec Pension Plans	-	719	886	990Deficit on current account with non-residents	1,135	1,207	549	38Residual error	-64	241	65	184Total	11,663	13,193	12,526	12,414Disposition:	Business gross fixed capital formation	10,651	12,493	12,365	12,514Value of physical change in inventories	948	940	225	80Residual error	64	-240	-64	-180Total	11,663	13,193	12,526	12,414
WFirst half year, seasonally adjusted at annual rates. Source: DBS The National Accounts.
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October 16, 1968

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1965	1966	1967	1967(1>	i968«>	IQ	2Q	3Q	4Q	IQ	2QPer cent of total saving supplied by: Business saving	64.3	60.5	64.3	60.6	64.9	63.2	69.1	67.2	67.6Foreign saving(2)	9.7	9.2	4.4	4.7	5.4	5.8	1.3	2.5	-1.9Government saving!3)...	2.8	2.6	1.3	6.3	-4.6	3.6	-0.5	5.9	-2.5All other saving^4*	23.2	27.7	30.0	28.4	34.3	27.4	30.1	24.4	36.8Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
^Quarterly figures are seasonally adjusted at annual rates.
<2>Deficit on the current account of the balance of payments (minus indicates surplus). <3>Minus indicates deficit.
(''Includes personal saving and miscellaneous items.
Source: DBS The National Accounts, 1967 and second quarter 1968.
Personal saving, which includes household saving, the saving of unincorporated business and saving in the agricultural sector, did not increase as rapidly in 1967 as they had in 1966, and fell slightly in the first half of 1968. The main reasons for this change are that because of a substantial increase in total disposable income, households have been increasing purchases of durable goods, particularly cars, and, in addition, they have maintained normal growth in real expenditures on non-durable goods and services at a time when prices have been increasing rapidly. While the income of unincorporated business enterprises has continued to rise, this has been more than offset by the decline in accrued farm income, the latter resulting from a return to an average harvest in 1967 after the record of 1966.
The disposition of saving in 1967 showed declines in both gross fixed capital formation and additions to inventories. It may be noted from table 15 that the decline in the use of foreign saving is in keeping with the experience of recent years, whereby a greater proportion of investment has been met, on a net basis, from Canadian saving. It should be noted that these tables portray the net position only, and do not record the gross international flows of capital funds, which are substantial, nor do these tables portray the flows of funds as between the domestic sectors of the economy.
With these qualifications in mind, the tables illustrate that over the past two years most of the saving generated by Canadians has arisen from the personal and business sectors. The transactions of all governments, including the Canada and Quebec pension plans, have, in total, shown a modest surplus. This modest government surplus does not take into account the substantial investments made by government business enterprises, so that governments have made extensive use of capital markets, as discussed on a later page. Business, also, has contined to make extensive use of the financial markets.
Table 15 shows the proportions of total saving supplied by the business sector, other Canadian sources, and from abroad. Gross saving by business enterprises in 1967 accounted for 64.3 per cent of their capital spending. Given the quicker pace of economic activity this year, the saving of business corporations is now showing a definite increase which will facilitate the financing of their planned investments.
October 16, 1968

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The sharp rise in interest rates in Canada last winter, with some subsequent moderating tendencies, occurred in an environment in which international financial tensions have been an important element. Canadian economic growth in 1967, as these pages have shown, was marked by a transition from the very fast pace of 1965-66 and resulting price and cost pressures, to a slower and more sustainable rate of growth. However, during much of 1967, while inflationary forces were still strong, and investors were taking a view that the adjustment in North America would not be protracted, interest rates began to rise noticeably from the spring of 1967. Strength in Canadian reserves of gold and foreign exchange during mid-1967 permitted the narrowing of the Canada-U.S. interest rate differential during the summer, and this reduced the upward pressure on the external value of the dollar and Canadian reserves.
Concern about inflationary trends on the part of investors intensified as 1967 progressed, and was reflected in a preference for liquid short-term assets such as bank term deposits, in contrast to such longer-term instruments as bonds, and also in a preference for equity investments in real estate and in Canadian and U.S. corporations. This investors' search for liquidity was aided by the more aggressive competition for deposits among chartered banks, trust and mortgage loan companies and other deposit institutions following the coming into effect of the new Bank Act in May, 1967.
In an environment of tightening U.S. credit conditions and general inflationary expectations, the Canadian bank rate was raised by one half per cent to five per cent in early fall 1967, and Canadian banks started to experience difficulty in meeting the credit demands of their customers without running down their liquidity. About this time, Canadian long-term bond yields moved decisively above previous peaks.

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1966 - 1968 By Months
Per Cent

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Per Cent
9
6
10
5

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Per Cent	Per Cent
1966
1968
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October 16, 1968
Following the Middle East crisis in June 1967, the intermittent pressures on the pound sterling became more persistent and, despite international support operations, eventually became overwhelming. The 14.3 per cent devaluation of the pound sterling on November 18 was accompanied by bank rate increases in many countries, including a further one per cent increase to six per cent in Canada. By the end of the year Canada-U.S. yield spreads were widening significantly.
Early in 1968 a combination of factors, including concern about the international monetary system, some pessimism about Canada's competitive position in international markets and the effects of new U.S. restrictions on business investment abroad gave rise to a severe speculative run on the Canadian dollar. In defence, the Bank rate was raised to seven per cent in January and an extensive network of international standby credits and support was arranged. In addition, the liquidity of Canadian chartered banks was further reduced, and they co-operated successfully to aid the short-term flows position in the balance of payments capital account. In March, in return for complete exemption from U.S. balance of payments programmes affecting capital flows into Canada, the Government of Canada undertook to take any steps necessary to ensure that the exemption from the U.S. programme w'ould not result in Canada's being used as a "pass-through" by which the purpose of the U.S. balance of payments programme would be frustrated. The Canadian government has since introduced guidelines for this purpose for banks, other Canadian financial institutions, and non-financial corporations. Fiscal measures of restraint secured passage through Parliament in mid-March. During the unstable period immediately prior to the establishment on March 17 of the new two-price system for gold, both the U.S. and Canadian monetary authorities raised central bank rates by a further one-half per cent. In the exchange market the tide turned in mid-March, and the task of rebuilding Canada's foreign exchange reserves began. This included borrowing by the Government of Canada in Europe.
By late May the renewed strength of the Canadian dollar was evident. The Government of Canada long-term bond yield average has since fallen from a historic peak of seven per cent and other rates have also fallen. The Bank rate has been cut three times, and is now six per cent.
Instrumental in the easing in the crisis atmosphere have been the signs of improved international co-operation, including agreement on the new supplemental reserve asset in the International Monetary Fund to be known as Special Drawing Rights. The enactment of the U.S. tax increase and expenditure cuts in late June, and the commencement of talks on peace in Vietnam, also contributed substantially to removing the sense of crisis in financial markets.
In Canada, borrowing demands by governments, business and consumers, though still high, no longer exerted the strong upward pressure on yields that they had. The amount of funds raised in financial markets by borrowers in 1967 regained nearly all of the more than 20 per cent decline in 1966. Despite the international financial crisis last winter and associated tight monetary policy there was some further advance in total funds raised in the twelve-month period ended mid-1968 compared to the twelve months preceding. (See reference table 36). Mortgage approvals, the trend in bank loans and the new climate of cautious convalescence in bond markets indicate that through 1968 the rate of total loanable funds disbursed is being maintained at a high level.
Within these overall changes, funds raised by net new market issues and Canada Savings Bonds were 28 per cent lower in the year ended mid-1968 than
October 16, 1968	COMMONS DEBATES	1
in the preceding twelve months. On the other hand, bank loan growth accelerated from seven per cent in 1966 to over 14 per cent in 1967 and early 1968 before flattening out more recently. Private sector institutional mortgage loan disbursements, which dropped drastically in 1966, advanced in momentum after mid-1967 and have continued to increase.
The Effect of Financial Developments Abroad
During most of 1967 the main effect in Canada of international developments was on interest rates, which moved up quite sharply as part of a general, almost worldwide, trend. The Canadian dollar tended to be strong, generally fluctuating m a range above its U.S. $.925 parity value. During the period of upheaval following the sterling devaluation in November, some of this strength was eroded and the dollar moved closer to its parity value, where it stabilized until year end.
The January 1, 1968 announcement of the new U.S. balance of payments programme gave rise to widespread concern about its possible impact on the Canadian economy. The resultant pressure on the Canadian dollar caused a rapid drop in the^ exchange value to the bottom of the one per cent range on either side of parity value which is consequent upon Canada's membership in the International Monetary Fund (Chart 18). This was accompanied by unusually heavy losses of foreign exchange by the Exchange Fund Account as it purchased Canadian dollars in the market. These pressures continued with vaiying intensity throughout most of the first quarter and were particularly strong and persistent from the middle of February onward.
As a result of a number of developments discussed below, a turnaround occurred in late March; the situation then reversed itself so completely that the Canadian dollar rose quickly to a value well above parity, and the Exchange Fund Account has recouped its earlier exchange losses. The following table shows the effect on the overall exchange reserve position.
December	March	June	September1967	1968	1968	1968(Millions of U.S. dollars at month end)	Official holdings of gold and	U.S. dollars	
IMF creditor (-f) or	2,244.0	2,574.0	2,534.1debtor (-) position	
Federal Reserve swaps	.... 248.4	-185.0	-64.0	0.9outstanding	-250.0	-125.0	-Net Total	... 2,516.2	1,809.0	2,385.0	2,535.0
Fleavy exchange losses occurred towards the middle of January, causing a number of defensive measures to be taken to restore confidence. On January 21, the U.S. Secretary of the Treasury issued a statement that the new U.S. balance of payments programme had not been intended to cause abnormal transfers of funds from Canada to the United States, and that it did in fact provide scope for continued large flows of capital from the United States to Canada. Almost simultaneously the Bank of Canada raised the bank rate from six to seven per cent, and announced that the chartered banks had agreed to discourage the use of bank credit by Canadian subsidiaries for the purpose of facilitating abnormal transfers of funds abroad or meeting financing requirements which in the past had normally been met by the parent companies. Although these measures
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October 16, 1968
reduced the speculation against the dollar the loss of reserves continued, and during January the loss amounted to U.S. $348 million. This loss was largely offset by a U.S. $250 million drawing by the Bank of Canada on the Federal Reserve System under a reciprocal currency facility.
Towards the middle of February heavy speculative pressures were renewed, and at month end a U.S. $426 million drawing by Canada on the IMF was announced. This drawing consisted of U.S. $241 million representing Canada's creditor position in the IMF and of a U.S. $185 million gold tranche drawing. It was made to illustrate the extent of the additional resources, over and above the foreign exchange reserves, available to maintain the existing parity value of the Canadian dollar, and to reconstitute the liquidity of the Exchange Fund. Month end reserve figures showed an increase in official holdings of gold and U.S. dollars of $315 million, after giving effect to the IMF transaction, thus indicating a loss of reserves during the month of $111 million.
Uneasiness continued to prevail in the market. On March 4 the Governor of the Bank of Canada requested banks and other financial intermediaries for the time being not to facilitate swapped deposit transactions, and the Minister of Finance issued a similar request to Canadian investors not to initiate such transactions. Swapped deposits come about when a Canadian investor deposits Canadian funds with a financial intermediary to be converted into a foreign currencv and placed on deposit in that currency, with the intermediary undertaking through a forward contract to convert the foreign currency proceeds back into Canadian dollars at maturity. The Canadian investor then receives the interest earned on the foreign currency deposit plus the amount of the discount on the forward Canadian dollar or less the amount of the premium as the case may be.
Between mid-1967 and the end of February 1968 the total of swapped deposits outstanding had almost doubled, to a level of approximately $900 million, thus giving rise to a large capital outflow from Canada. Under the circumstances prevailing in early March, it was considered desirable to ensure that fuither outflows of this nature should not take place, and to attempt to repatriate some of the funds already outstanding. The March 4 requests concerning swapped deposits were withdrawn on June 12, by which time the total of swapped deposits outstanding had fallen steadily to about $350 million.
On March 7 an exchange of letters was published between the U.S. Secretary of the Treasury and the Minister of Finance, stating that Canada would be exempt from the balance of payments programmes affecting capital flows administered by the U.S. Department of Commerce and the Federal Reserve System. This move made clear that Canada's position would not be weakened by the features of the January 1 programme which had contributed to the concern about its effect on the Canadian economy. In return, the Canadian government undertook to invest a major portion of its U.S. dollar assets in U.S. Government securities which would not constitute a liquid claim on the United States, and further undertook to take any steps necessary to ensure that Canada would not be used as a pass-through to circumvent the U.S. balance of payments programme. To carry out this second undertaking, the Government has since introduced guidelines for banks, non-bank financial institutions and nonfinancial corporations.
Also on March 7, the Minister of Finance announced that arrangements had been made for $900 million of stand-by credits to support the Canadian dollar. These consisted of certain central bank arrangements and a $500 million line of credit with the U.S. Export-Import Bank, which were never used.
October 16, 1968
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During the first two weeks of March, general concern about the stability of the international monetary system reached crisis levels and was reflected in a renewed flight from currencies into gold. The massive proportions of this flight led to the termination of the Gold Pool arrangements on March 17. In the wake of the Gold Pool announcement the Bank of Canada raised its Bank rate by one-half of one per cent to 7| per cent, at the same time that the U.S. authorities increased the Federal Reserve discount rate to 5 per cent. The Bank of Canada also announced an increase in its reciprocal currency facility with the Federal Reserve System by $250 million to $1 billion.

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1966 - 1968 By Months
Per Cent Per Cent	Per Cent
The crisis conditions of early March in the international financial system were such that the measures announced in Ottawa on March 7 were insufficient by themselves to restore confidence in the Canadian dollar. Following the midmonth developments, however, and the passage by Parliament of new tax legislation, relative calm returned to the Canadian exchange market. A moderate build-up of reserves commenced during the second half of March, although this was not immediately sufficient to offset earlier losses, as indicated by the fact that the overall March decline in official holdings of gold and U.S. dollars amounted to $246 million.
Since March, confidence in the international system has been restored to a marked degree. The general atmosphere in the system improved partly as a result of the Stockholm agreement late in March on the final details of the Special Drawing Rights proposals. It also benefitted from the evidence, as the
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October 16, 1968
two-tier gold market became operational, that gold in the free market would demand only a limited premium over the official $35 price. In this new climate of confidence, Canada's exemption from the January 1 U.S. balance of payments programme has had its intended effect. The improvement in Canada's position has been given further impetus by the normal seasonal improvement in the balance of international payments and by a strong export performance.

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CANADIAN DOLLAR IN UNITED STATES FUNDS*
1963 - 1968

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'Inverse of quotations for U.S. dollars in Canada.
As a result, all the credit facilities mobilized during this period have been cancelled or allowed to lapse and the short-term loans have been repaid. The Bank rate has been reduced from its crisis level and the requests to the chartered banks made in January and March have been withdrawn.
Bond Market Financing
In the twelve-month period ending July 1968, net new issues of bonds by all Canadian debtors in domestic and foreign markets, at $2.7 billion, were running about $1 billion or 28 per cent below the very heavy issue rate of $3.8 billion in the preceding twelve months. Heavy capital market borrowing, especially by governments, from late 1966 through 1967 was a major source of upward pressure on interest rates, reinforcing the rise due to inflationary expectations and international tensions. Details of changes in market bonds outstanding over the years 1963 to 1968 are shown in reference table 37.
The flow of fund changes in the bond market during last fall and winter were substantial. In the year ending mid-1968, the $675 million increase in non-bank resident holdings of market bonds and Canada Savings Bonds con-
October 16, 1968
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trasts with the SI,500-1,900 million increases observed throughout earlier years of the decade. Half of this change was attributable to non-bank resident holders of marketable bonds, and the other half to the $500 million turnaround in CSB flows from the $200-500 million increases of earlier years to the $169 million decrease in the twelve months ended mid-1968. The net increase in the Canadian banking system's holdings, at $574 million for the whole period, was about midway in the prior years' range from net reductions in some years to increases of over $1,200 million in years such as 1967. Partially offsetting these factors was the fact that Canadian placements abroad-in the United States, and for the first time in decades on a significant scale in Europe-were about double the $600-800 million range of earlier years in this decade.
The 1967 shifts in financial investment patterns on a calendar year basis were thus severe in comparison with average flows earlier in the decade; however, a comparison of the twelve-month period ending July 1968 shows an even more pronounced shift. In the latter period, investment shifts by three key investor groups lay behind the $1 billion reduction in the net flow of funds into bonds. The increase in Canadian banking system bond holdings of $574 million was about $500 million less than its $1,124 million increase in the previous twelve-month period ended July 1967. Similarly, the decreases in growth in non-bank resident holdings of marketable bonds and Canada Savings Bonds amounted to $1,250 million. Partially offsetting these slower flows was an increase in the annual flow of funds into Canadian foreign-pay bond issues of over $700 million. The net effect of the changes in holdings of these three investor groups was a slowdown of more than $1 billion in the flows of funds into Canadian governments and business issues. By contrast, the supply of credit for consumer purchases and mortgages has been well maintained although the cost of such credit has risen markedly.
The return to slower growth in the flow of funds into Canadian bonds occurred during the international crisis in financial confidence last winter and the associated tightening in monetary policy in the United States, Canada and elsewhere. The speculative run on the Canadian dollar which developed in the foreign exchange market in the first quarter of 1968 made it necessary to give top priority to checking the speculative outflow of capital and, once the tide had turned in mid-March, to rebuilding Canada's foreign exchange reserves. Achievement of these objectives involved a widening of the spread of Canadian interest rates over U.S. rates which themselves were rising sharply.
In recent months access to bond markets has improved, interest rates have eased somewhat, and market bond holdings by the banking system and other residents have increased, while foreign holdings of Canadian bonds have risen further. Canada Savings Bond holders since mid-1968 have continued to switch into bank and non-bank term instruments, corporate and other bonds, and equities. However, the monthly rate of net decline in CSBs outstanding has fallen from the June peak of $159 million to a rate well below the $89 million average monthly decline experienced in the first seven months of calendar 1968.
Mortgage Market Financing
One of the economic highlights in the past eighteen months has been the recovery in house building activity, shown in Chart 19. Loan approvals by institutional lenders, which lead actual loan disbursements by several months, had declined from a $3 billion rate in 1965 to little over $2 billion in 1966, but in 1967 they rose by 30 per cent to reach $2.8 billion. Total public and private mortgage loan approvals in the twelve months ended June 1968 were running
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October 16. 1968
slightly below the $2.8 billion level, reflecting some downturn in approvals since the turn of this year (see reference table 39). There are three fundamental reasons for this overall improvement. Firstly, business investment has not been claiming as big a share of gross national expenditure since 1966. Secondly, the Government of Canada has by changing the interest rate formula in respect of NHA mortgages provided for a wider spread for mortgage yields over competing instruments. Thirdly, the flow of private sector funds into mortgages has been very significantly augmented by the re-entry of the banks into mortgage lending following the Bank Act changes in 1967.
Total private conventional and NHA loan approvals rose about $600 million in the twelve-month period ended June 1968. This increase was shared equally between banks and non-bank financial institutions. Direct loan commitments by Central Mortgage and Housing Corporation fell $464 million, from $910 million to $446 million, in the year ended June 1968, with a decline in the flow of public funds into private housing being partly offset by increased CMHC outlays for public and low-income housing.
In the past year or so there has also been a significant increase in new residential construction financed by means other than institutional mortgages or public financing. These other means include mortgage loans from Caisses Populaires, credit unions and private individuals, as well as construction undertaken without recourse to mortgage loans. There seems to have been an increase in funds channelled into the mortgage market from sources other than trust, life and mortgage loan companies and banks.

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(Thousands of Units)
200
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1955	1956	1957	1958	1959	1960	1961	1962	1963	1964	1965	1966	1967	1968
125
75
25
October 16, 1968
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The general improvement in the flow of funds into mortgages has occurred in circumstances of severe tightness of credit conditions generally during much of the period under review. In the past the bank interest ceiling and other restrictions faced by financial institutions in attracting funds, by limiting their ability to raise deposit and lending rates fully in line with other market interest rates, had contributed to the sharp curtailment of the availability of mortgage loans. In the past year and a half there has been increased reliance on interest rates in the determination of mortgage investment, and less reliance than formerly on various rationing devices employed by the private sector. Mortgage interest rates have increased sharply. Average rates on prime residential conventional mortgage loans rose from about eight per cent at the beginning of 1967 to over nine per cent by the spring of 1968. Actual NHA interest rates, as distinct from the maximum or ceiling rate, similarly increased from 71 per cent to a peak of nearly 9 per cent. Like rates on other instruments, mortgage interest rates have come down somewhat in recent months.
To encourage a larger and relatively more stable flow of private funds into the mortgage market, the maximum interest rate on NHA insured mortgage loans was fixed at 7\ per cent in November 1966, with the provision that beginning in 1967 this rate was to be adjusted automatically at the end of each calendar quarter to a level of 1| per cent above the average yield on long-term Government of Canada bonds. This move to a flexible NHA rate related to market conditions had significant effects on the flow of institutional funds into NHA mortgages in early 1967 but provided little stimulus to investment in NHA mortgages in the second and third calendar quarters of that year. In view of the large financial resources already committed by the Government of Canada for housing and other areas, and a need to conserve government funds to a greater extent for low-income housing, the government took further action in September to stimulate the flow of private mortgage money. The quarterly adjustment formula was altered to establish the maximum NHA rate at a level of 21 per cent above the long-term Government of Canada bond average, the widest spread permitted by the National Housing Act, with the intention of allowing the actual rate to be set by market forces within this limit. Following this action the spread not only between NHA mortgages and competing bonds, but also for conventional mortgages, widened, and this has provided a stimulus to mortgage investment by lending institutions. In 1967, the setting of the rate of interest on home improvement loans which are made by the banks and guaranteed by the government, was brought under the same formula.
I he National Housing Act was amended in March 1968 to increase the ratio for home-ownership loans on new housing from 95 per cent of the first $13,000 of lending value and 70 per cent of the balance, to 95 per cent of the first $18,000 and 70 per cent of the balance, thereby reducing the down payment required. No changes were made in the $18,000 per unit maximum. In February, the NHA loan regulations had been amended to raise the maximum loan for apartment units from $12,000 to $18,000. The regulations were also changed to permit the lender, where a rental loan is made to a corporate borrower, to increase the period of the lock-in from the previous maximum of ten years to a new, higher lock-in that may extend to within ten years of the term of the loan.
Consumer Finance
The rate of growth of consumer credit balances outstanding quickened in the past eighteen months, although it did not reach the pace of earlier years of the decade. The annual increase, which had been 8.3 per cent in 1966, was
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10.9	per cent in 1967 and 11.9 per cent in the twelve months ended May 1968. From 1962 to 1965 the annual growth rates in consumer credit had been 12.5 per cent to 16.4 per cent. The increased tempo in the past year was associated primarily with increasing expenditure on consumer durables, generally bought "on time".
As indicated in reference table 40, the banks and consumer loan companies experienced faster-than-average growth in consumer loans in the period from May, 1967 to May, 1968. Policy loans of life insurance companies continued to expand rapidly.
During 1967 federal and provincial legislation came into effect requiring disclosure on a consistent basis of the overall costs of credit extended to personal borrowers. The parallel provisions of the Bank Act, which came into effect in October, 1967, cover all personal loans to $25,000.
Business Finance
Investment in physical plant and equipment by the corporate sector reached a peak in 1966 and, as noted earlier, declined moderately during 1967; it has begun to recover in 1968. Corporations used both their own accumulated liquid resources and the bond markets to finance the 1963-1966 expansion, with the customary use of short-term sources to facilitate inventory accumulation and the orderly financing of investment programmes. Budgetary measures affecting the liquidity of corporations in the spring of 1966, the development of credit stringency throughout North America in the latter part of that year, and conditions in the bond market led to greatly increased reliance on shorter-term financing, while internal liquidity declined. (These trends are summarized in reference table 41). By the end of 1966 the ruling uncertainties in the financial markets had brought about a mood of caution in the corporate sector, and financial planning was concerned with the need to rebuild corporate liquidity as rapidly as conditions would permit.
Internal sources of funds since early 1967 have displayed an overall flat trend. Retained profits, after taxes and dividends, fell in 1966, but a lack of growth in dividend payments since that time permitted much of the lost ground to be made up during 1967 and 1968. Meanwhile, as a reflection of the substantial additions to physical capital of recent years, reserves for depreciation have been advancing steadily. The net effect of these developments has been, as noted, modest change in the level of internally-generated funds over the past eighteen months.
As investment outlays fell off, the need for external financing to make up the shortfall between internal funds and capital expenditures became less pressing. However, the external financing carried out between early 1967 and early 1968 remained much higher, both absolutely and relative to earlier financing, than that prevailing throughout the period subsequent to the resources boom of the mid-fifties. This partly reflected the fact that the post-boom decline in actual expenditures in 1967 was marginal, whereas after 1958 it was substantial and prolonged. However, it also reflected concern over the need to rebuild liquidity with all reasonable speed.
Accordingly, corporate sector financing remained active in 1967 and 1968, although the volume fell for a while and the structure of the new liabilities issued was dictated to some extent by market conditions. Thus, long-term
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business borrowing through net new bond and stock issues was 24 per cent below 1966 levels last year, but in the twelve month period ended mid-1968 it was four per cent above the comparable preceding period.
Bank loans and certain other short-term business borrowings, which fell markedly in 1966, have since recovered somewhat the distance lost, despite the slower pace of inventory accumulation, which is financed by short-term debt. The pickup in short-term business debt reflected postponement of bond issues in the past year in expectation of eventually lower interest rates. Short-term borrowings also helped to finance businesses' increased preference for rebuilding liquid asset portfolios. Conditions may also have faced businesses with receivables which were not declining as fast as payables, and, therefore, with further increases in net receivables to be financed.
Federal Government Debt Operations
The general environment and special circumstances which affected federal government debt management policies and operations during fiscal year 1967-68 and the early months of the current fiscal year have been described earlier. At the time of the budget in June 1967, cash requirements of the federal government in the fiscal year 1967-68 were estimated at $1.6 billion compared with actual requirements of $530 million in the previous fiscal year. In the first nine months of the 1967-68 fiscal year, the federal government raised over $650 million in new cash through the issue of marketable securities in the Canadian capital market, while refunding maturing issues which totalled $1.5 billion. During the same period net sales of CSBs totalled $283 million. These relatively heavy demands were made on the capital markets during a period of generally rising interest rates and when demands on the capital markets by other governments and industry were also very large. The government's concern about the disturbing strains on the capital markets and the measures proposed to alleviate the situation were outlined in the budget speech of November 30, 1967. In presenting the tax and fiscal measures the Minister of Finance repeated that the government would hold its overall net cash requirements and its consequent demands on the capital market to less than $750 million in the next fiscal year, apart from unforeseen changes in exchange reserves.
The speculative pressure on the Canadian dollar during the last quarter of the 1967-68 fiscal year, with the accompanying heavy losses of foreign exchange provided substantial cash receipts, amounting to $770 million in the three month period. This special development made it possible for the government to finance its requirements during the remainder of the fiscal year with little additional borrowing from the capital market during this very unsettled period. During the fiscal year as a vrhole, net borrowing in Canada by the federal government through marketable securities amounted to $725 million, and net sales of Canada Savings Bonds amounted to $80 million. Government net cash requirements totalled only $485 million, and cash balances at the end of the fiscal year were at the relatively high level of $997 million.
In the early months of the current fiscal year two factors had considerable influence on government cash requirements and debt operations. In the first place, the rebuilding of the foreign exchange position, as confidence in the Canadian dollar was restored, involved large cash outlays of Canadian dollars. Secondly, the sharp rise which had occurred in interest rates and their subsequent maintenance at relatively high levels to facilitate the reconstitution of foreign exchange reserves presented holders of Canada Savings Bonds with investment alternatives at significantly higher interest yields. The abnormally high redemp-
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October 16, 1968
tion of savings bonds which took place in these circumstances was financed from government cash resources. These special factors, in addition to the normal requirements of government, produced heavy cash requirements in the early months of the current fiscal year. Notwithstanding the relatively high level of cash balances at the beginning of the year, it was therefore necessary to resume borrowings in the capital market. In the first four months, up to the end of July, net new issues of marketable securities in Canada totalled $349 million, during which period the level of outstanding CSBs declined by $408 million. The financing of exchange transactions during the four-month period totalled $551 million, including foreign borrowing. These developments are summarized in table 16.
The federal government in the conduct of its debt operations was faced with generally rising interest rates for most of the period under review. During the second quarter of 1968 some Canadian interest rates reached their highest levels in a century. Government bonds, like other fixed income securities, were generally more difficult to sell during the period under review, in spite of more attractive terms and conditions. As illustrated in the schedule of details of debt operations (reference table 42), both coupons and prices on new bonds were made progressively more attractive to buyers while the terms to maturity were shortened. The following paragraphs trace the main features of the Government's debt management program through 1967 and up to the beginning of August, 1968.
As the first quarter of 1967 began it appeared that interest rates had peaked in late 1966 and that the economies of both the United States and Canada were experiencing moderating demand pressures. Long and short term rates fell dramatically and the Bank rate was reduced in two stages from 5f per cent to 4J per cent by April 7. The Bank of Canada, to avoid an excessive tightening of credit conditions for both domestic and external reasons, had since mid-1966 permitted a rapid expansion of the money supply which was reflected in a sharp increase in the liquidity of the chartered banks in the first part of 1967. During this time the government placed three issues with the market, raising $217 million in new cash, and refunded out of cash balances CNR bonds totalling $122 million. On February 1, 1967 there was a special issue of 303-day Treasury bills for $100 million. By April, however, the bond market had become less optimistic and the government was faced with high and rising interest rates over most of the remaining period.
In view of the heavy cash requirements and the relatively few opportunities available to raise new money as a result of the large refundings due during 1967, the government placed a $175 million cash issue on August 1. In the face of a much deteriorated market the offering was restricted to the short and medium terms, with the mid-term bond priced to yield over six per cent. By October yields had risen further, and dealer expectations in both Canada and the United States were for continued upward pressure on interest rates. The October 1 issue refunded the large amount maturing on that date and, once again, the terms to maturity of the three-tranche issue were shortened. By year-end most interest rates had passed the peaks reached in 1966 and the Bank rate had been raised, in two stages, to six per cent. In view of the large amount of bonds taken up by the banking system in 1967, the December 1 refunding was designed in particular to attract other investors, by the issue of only a 6-year 6* per cent bond. With this issue the government raised net proceeds of $120 million. Also on December 1 there was a 364-day Treasury bill issue of $125 million to refund the special February issue and raise $25 million new cash.
October 16, 1968

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GOVERNMENT OF CANADA CASH REQUIREMENTS AND SOURCES OF FINANCING (by fiscal years)
1966-67	1967-68	1968-69First 9 Months	Last 3 Months	Total	First 5 Months(Millions of dollars)	Cash Requirements	Budgetary	422	114	679	792	-17Non-budgetary excluding all foreign exchange	341	1 048	442	607	
Sub-Total		763	1,162	237	1,399	523
Foreign exchange transactions cash require-					
ments (+) or receipts (-)	-232	-42	-770	-812	608Overall cash requirements	531	1,120	-533	587	1,131Sources of Finance	Market bonds*1'	Gross New Issues	1,500	1,785	450	2,235	1,529Retirements	-1,231	-1,485	-400	-1,885	-780Net	269	300	50	350	749(of which foreign pay(*>)	(-6)	(-205)	(-)	(-205)	(254)Treasury bills	160	145	25	170	330Canada Savings Bonds	283	283	-203	80	-477Non-marketable and other<3>	-1	244	-56	188	-84Total	711	972	-184	788	518Changes in Receiver General bank balances	180	-148	349	201	-613
(1,CNR included under non-budgetary.
*J'Represents mainly in 1967-68 the cancellation of outstanding US-pay Government of Canada bonds repurchased from U.S. residents; and in 1968-69 the issue of foreign-pay bonds in Germany, Italy and the United States.
(''Includes UIC and CPP bonds. Securities Investment Account and securities held for retirement of unmatured debt.
In view of the attractive alternatives available to the individual investor in the fall of 1967, the Canada Savings Bond campaign was designed to stem the rate of outstanding CSB redemptions and also to provide new cash. The "double-your-money" feature on Canada Savings Bonds which originated with the Centennial Series was continued in 1967. The 1967-68 series offered the same interest yield to maturity as the 1966 Series, but, to make it more attractive relative to comparable investments, the initial coupon was raised from 5 to 5j per cent. Corporations and other businesses, churches, charities and other associations were made eligible to purchase CSBs for the first time and the maximum amount permitted for each purchaser was increased to $50,000.
In the first part of 1968, as in 1967, the Canadian financial markets were heavily influenced by international factors. In addition, as a result of continuing rising costs and prices in Canada and the United States, there remained a strong desire for liquidity on the part of private and corporate investors. In the United States, and to a lesser degree in Canada, credit conditions were tightening
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October 16, 1968
significantly. There was a brief recovery in the bond market in the first two weeks of 1968, but this proved to be only temporary and most interest rates in Canada resumed their climb to unprecedented highs.
At the time of the large January 15 refunding the raising of net new cash was limited to $50 million, in view of market conditions. Short and long term rates rose to new peaks during this period as a result of the monetary stance taken to stem the speculative run on the Canadian dollar. The Bank rate was raised to 7 per cent and then to 7i per cent by mid-March. The April 1 refunding carried the first 7 per cent coupon on a Government bond since Confederation and, with a five-year term, was priced to yield 7.30 per cent. Even with this high yield, institutional investors were not attracted to the issue, and the tone of the market outlook continued pessimistic.
To reconstitute reserves and broaden the external market for government securities, the federal government in May floated two loans in Europe. This followed the ending of the exchange crisis described earlier. A loan in Italian lire equivalent to Canadian $108 million was placed directly with the Italian Exchange Office and a loan, payable in German marks, equivalent to Canadian $68 million, was sold in the Eurobond market. Finally, a loan for U.S. $100 million, subject to delayed delivery contracts, was issued in the United States in June.
A substantial rally in the Canadian bond market occurred in April as world events appeared to take a more favourable turn. However, this did not last. Higher gold prices, the unfavourable response to the Administration's fiscal bill by U.S. legislators and rising pessimism regarding Vietnam peace talks caused bond prices once again to turn downward. The June 15 refunding was a three-tranche issue, two of which carried 7 per cent coupons. To replenish dwindling government cash balances, this issue raised $105 million in new cash.
In May 1968 the government, in the interest of orderly debt management, offered a Special Replacement Series of Canada Savings Bonds to refund in advance the large outstanding 1959 series of Canada Savings Bonds which were due to mature in November 1968. On January 1, 1968 there were $722 million of these bonds outstanding. Effective March 28, Special Replacement Bonds were offered only to holders of the 1959 series in exchange for their 1959 bonds. Subsequently, beginning May 15, the bonds were also offered to the general public for cash for a short period. The offer was withdrawn on May 23, 1968. The new bonds carried an annual average yield of 6.88 per cent, the most attractive ever offered on a Canada Savings Bond. Like the previous two issues of Canada Savings Bonds, the new bonds also offered compound interest so that the investor could double his money in 10 years and 5 months. The issue was very successful, with sales totalling $850 million, of which $538 million was exchanged; this helped to alleviate somewhat the concern the CSB redemptions were causing the financial markets.
By summer the Canadian bond market had improved considerably in both price and tone and the government was able to replenish declining cash balances. The improvement reflected a similar development in the United States following the passage of the Administration's tax bill. On June 28 the government sold at tender a special 364-day Treasury bill issue which provided $150 million in new money. The August 1 loan stimulated considerable activity in the market. Receipts from the cash offer amounted to $400 million, of which $100 million represented bonds exchanged directly with the Bank of Canada.
October 16, 1968
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The August 1 issue repeated a feature used several times during 1968. The government, by exchanging new bonds directly with the Bank of Canada for bonds in its portfolio maturing later in the year, was able, in effect, to prerefund these issues. On April 1 $100 million and on June 15 $75 million of bonds maturing in 1968 were cancelled. On the last occasion, August 1, $100 million of bonds maturing in 1968 were not immediately cancelled but were held in the Secui'ities Investment Account. They have since been cancelled.
The Capital Account of the Balance of Payments
Capital flows between Canada and the rest of the world during the past year and a half have been profoundly affected by the significant developments that occurred in the international monetary and exchange-rate field, as well as by the influence of cyclical economic factors upon credit conditions and by the pressure which developed in a number of the world's capital markets as they attempted to reconcile the liquidity requirements of the public and private sectors.
The net saving made available to Canada in 1967 by the rest of the world through the deficit on Canada's current account transactions was, at $543 million, among the lowest in the fifteen consecutive years for which deficits have now been recorded. It also represented a particularly sharp swing from the $1,162 million of the previous year. (A summary and details of capital movements m the balance of international payments are shown in reference tables 43 and 44). The net inflow into Canada resulting from all long-term capital transactions in 1967 was $1,339 million, the second highest level recorded since the second world war.
Over the year as a whole, the net outflow of short-term funds, $778 million, was nearly as large as the surplus of $796 million on current and long-term capital accounts, and only the difference of $18 million accrued to Canada's total of international reserve assets. Less than half ($286 million) of this very large net outflow of short-term funds reflected the switching of bank balances and like interest-arbitrage transactions. Roughly half a billion dollars, in other words, was accounted for by miscellaneous and to some extent unidentified short-term transactions, in which the termination and in some cases reversal of normal inter-corporate financing flows must have played a significant role.
. A particularly interesting aspect of this outflow of "short-term" funds is that a majority of it (over $300 million) appears to have occurred in the first quarter of 1967, a, period in which interest rates abroad tended to fall faster and further than in Canada, and the movements in bank balances and other interest-sensitive funds were strongly inwards into Canada. Apart from the international de-escalation of interest rates which was in progress, this was a period of comparative calm; neither the U.S. nor the U.K. payments position was giving cause for particular concern, nor was likely to occasion exceptional repatriation of corporate funds at that time. The Canadian dollar was particularly strong in the exchange markets during January 1967 although it weakened moderately thereafter.
The explanation of this substantial movement of non-banking funds therefore seems to be the divergence that was then already developing between the trends in corporate physical investment in Canada and the United States. While the cyclical trend in investment in Canada, as in most components of national expenditure, has normally tended to be quite closely parallel to that in the United States and slightly advanced in timing, 1967 saw an exceptionally
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October 16, 1968
pronounced and prolonged parting of the ways of the two economies. Shifts of working capital from Canadian subsidiaries to U.S. parent corporations would be a very likely consequence of such a development; normally, such capital is in many cases provided continuously by the parent to the subsidiary through the rolling-over of short-term advances.
The effect of this divergence in investment trends is also to be seen, though it is less marked, in the long-term capital account. Net direct investment in Canada by non-residents, though at the historically high level of $620 million, was nevertheless $90 million lower than in 1966. Borrowing through sales abroad of new issues of Canadian securities was also some $165 million lower, though again high in absolute terms ($1,300 million). The fact that the total net inflow of long-term capital was so high, and so much higher than in 1966, was due principally to factors unconnected with either private or public fixed investment during 1967 itself, namely: a much smaller schedule of retirements of earlier borrowings abroad, smaller outflows on portfolio transactions involving the repurchase of Canadian securities and large repayments to Canada of export credits extended in earlier years, particularly on wheat sales to communist countries.
Although net government borrowing abroad rose to an all-time peak in 1967, owing to a record volume of net provincial issues, the increase was offset entirely by a decline in net issues of corporate bonds. (Details of net new issues of bonds and debentures to non-residents are shown in reference table 45). There was also a small decline in net proceeds from stock issues which, together with the reduction in the inflow for direct investment, contributed to a marked contraction in financing by the business sector from abroad. In aggregate, proceeds from new issues placed abroad declined for the first time since 1960, but because there was also a smaller volume of retirements by the federal government (including special repurchases in connection with management of international reserves), net receipts remained virtually unchanged. However, the record volume of offerings in the United States raised the balance remaining for later delivery at the end of the year by some $248 million. Although long-term interest rates in Canada were rising substantially, the differential between Canadian provincial and U.S. long-term corporate rates did not change appreciably. The greater recourse to the U.S. capital market by governments was due as much to the problem of availability of funds in the domestic market, which worsened towards the end of the year, as to the lower cost of borrowing in the United States.
The lower level of net repurchases of outstanding Canadian securities contributed some $200 million to the rise in the total long-term capital inflow. Repurchases of Canadian stocks from non-residents were at the lowest level since 1960, and after the second quarter were exceeded by sales, leading to an inflow of capital in the second half of the year and also, for the first time since 1961, for the year as a whole. Net sales to U.S. residents at $83 million represented a swing of $178 million from the previous year. In total, the reversal from net repurchases to net sales of Canadian stocks was of the order of $148 million, to which was added $48 million as a result of smaller net repurchases of outstanding Canadian bonds, particularly those of the federal government.
The large increase in the inflow resulting from residual long-term capital transactions was largely associated with the sharp decline in wheat exports in 1967. Advances of export credits for wheat fell by $100 million, while repayments rose $66 million. Repayments of credits exceeded advances in every quarter of
October 16. 1968

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LONG-TERM CAPITAL FLOWS 1965 to 1968
1965 1966	1967	Change 66 to 67	Jan-June 1968Net(1>
foreign financing by governments: Government of Canada	
Provincial governments	
Municipal governments	
Total	-57 +266 +31	(Mil -171 +383 +81	lions of do! -75 +699 +110	lars) +96 +316 +29	+219 +381 +52+240 +593 +17	+293 +620 +53	+734 +183 +45	+441 -437 -8	+662 +203 +19Net(1>
foreign financing of Canadian enterprises: Net issue of bonds	
Net issue of stocks	
Total securities	
Net direct investment in Canada	
Total	+610 +535	+673 +710	+228 +620	-445 -90	+222 +195+1,145	+1,383	+848	-535	+417Sub-Total: Public and private financing from abroad Net direct investment abroad	
Canadian outstanding securities	
Foreign securities	
Loans and capital subscriptions	
Columbia River Treaty, net	
Export credits, net	
Long-term capital, n.i.e	
Sub-Total of above	
Total Long-Term Capital	+1,385 -125 -219 -85 -4 +32 -187 +67	+1,676 -5 -240 -401 -11 +32 -47 +57	+1,582 -90 -44 -418 -4 +44 +108 +161	-94 -85 +196 -17 +7 +12 +155 +104	+1,069 -70 -15 -188 -14 +39 -29-521	-615	-243	+372	-277+864	+1,061	+1,339	+278	+792
llJ New issues, less retirements, of securities, plus direct investments.
the year, and the total of net repayments amounted to $128 million. Export credit transactions for other commodities produced a slightly larger capital outflow. Other transactions yielded a capital inflow of $161 million, $104 million higher than in the previous year.
. The long-term capital account showed one very clear effect of the pressure against the Canadian dollar and other currencies in the first quarter of 1968: net direct investment in Canada by non-residents fell away to a bare $5 million,' and this was wholly accounted for by overseas interests, since there was net disinvestment on the part of U.S. residents. The first quarter is not a seasonally weak period for inward direct investment, which has never been much less than $80 million in that quarter of the last fifteen years, and had averaged about $130 million in 1965, 1966 and 1967. However, in the second quarter of the year the net direct investment flow into Canada amounted to $190 million.
Direct investment abroad by Canadians, on the other hand, was at the record level of $85 million in the first quarter of 1968, and this was not the result of one or a few outstandingly large individual transactions. Clearly, inward flows were delayed or cut as a result of the crisis, and outward flows accelerated or stepped-up. Other elements of the long-term capital account were less disrupted in the early months of 1968: new issues and retirements of Canadian securities both continued at about the (relatively high) levels of the
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October 16, 1968
fourth quarter of 1967; the net outflow resulting from trade in outstanding Canadian securities was again relatively small in the first quarter (by the standards of recent years) as a result of continuing net sales of common and preference stocks; the net outflow for the purchase of foreign securities was also, at 169 million, markedly lower than the $137 million average of the last two quarters of 1967, reflecting the liquidation of the federal government's holding of bonds of the International Bank for Reconstruction and Development. There were further net repayments to Canada of export credits in the first quarter, but a largely offsetting outflow in respect of other residual longer-term transactions.
The large unspecified element in short-term capital flows in 1967 has already been noted. Virtually the whole of the net identified outflow of about $300 million was accounted for by the foreign currency operations of the Canadian chartered banks, as net changes in foreigner holdings of Canadian dollars and short-term money market instruments were small over the year as a whole. There were net inflows in both of these sectors of the account, however, in the last quarter of the year, as in all recent years except 1965. A seasonal pattern in corporate financing now appears to exert greater influence on these items than interest arbitrage considerations.
Banking flows, on the other hand, responded decisively to the rapid rundown in Eurodollar interest rates in the earlier part of 1967. Foreign currency swapped deposits by Canadian residents, which had already fallen away heavily in the last quarter of 1966, continued to decline through May; and other foreign currency deposits at the chartered banks by Canadians, which had risen enough in the fourth quarter of 1966 to offset most of the decline in swapped deposits, were now also run down in the first and second quarters of the new year. I he banks, too, which had considerably increased their own net asset position abroad in the closing months of 1966, ran down this position in the first quarter, and increased it very little again over the second. The net result of these changes for the first half of 1967 was a $285 million decrease in foreign currency assets of Canadians and the net position of the banks, taken together (a net capital inflow into Canada of $376 million by the somewhat broader balance of payments definition). Partly offsetting this, however, was an outflow arising from a decrease of $92 million in the banks' foreign currency assets with Canadian residents.
By the end of the second quarter of 1967, the picture had changed drastically. Eurodollar rates had started to rise again early in May, and were soon followed in Canada by the rate on swapped deposits. At the same time, the money supply as conventionally defined had started a steep rise which was to continue for most of the rest of the year. In part this reflected structural changes resulting from the Bank Act, but in part also the efforts of the monetary authorities to temper the wind of international interest rate movements, as they had done during the rise of mid-1966 and the decline of early 1967. One virtually inevitable result, however, was a swing in banking flows across the exchanges which yielded net outflows of more than $300 million (balance of payments definitions) in both the third and fourth quarters. In the third quarter, swapped deposits were a relatively minor factor in the outflow abroad, which must rather have been fed by the proceeds of new issues of U.S.-pay securities. In the fourth quarter, however, swapped deposits rose by nearly a quarter of a billion dollars and accounted for the majority of the outflow'.
By the end of the year, the net foreign currency asset position of the chartered banks with non-residents was approaching $1.3 billion, and it rose by a further $200 million during the first two months of 1968. In early March as
October 16, 1968
[Stage Direction]
one of a number of measures to strengthen the Canadian dollar (as noted earlier) the banks were requested not to facilitate further swap deposit business, and a fairly rapid run-down of such deposits then began.
A noteworthy featuie of the Canadian exchange crisis, however, and of the whole of the first quarter of 1968 in which international monetary conditions were so unsettled, was the relatively slight effect it appears to have had on banking flows across the exchanges, and the modest part these flows played in the total outflow of funds from Canada. The only significant movement revealed by the quarterly figures, as shown in reference table 46, was a $200 million switch of foreign currency assets by the Canadian banks from U.S. to overseas (mainly U.K.) residents. Their net claims on all non-residents rose by only $49 million. Nor is it the case that the quarterly figures conceal particularly large ebbs and flows on a monthly basis. In terms of the balance of payments accounts "bank balances and other short-term funds abroad" showed an outflow of only $126 million, of which only a minor part is accounted for by the banking flows.
The total loss of $621 million in short-term funds during the first quarter (to which, in estimating the dollar effects of the exchange crisis, must be added at least $100 million of delayed inflows and accelerated outflows on long-term capital account) was in largest part accounted for by some $460 million of miscellaneous, and in many cases presumed, short-term transactions, including the balancing item.
Net short-term capital movements in the second quarter of 1968 were very small. Banking data for the period show a fairly substantial continued buildup of both assets and liabilities with non-residents, which involved little net change in the overall position over the period as a whole. During the quarter, however, there was a marked flow into and then again out of Canada as liabilities to Canadian residents in the form of swapped deposits were first run down sharply in accordance with the request made in March, and then up again by some quarter of a billion dollars in June, after the request was withdrawn.
October 16, 1968

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Reference
Table
Number	Title	Page
1	Main International Economic Indicators, annual, 1965 to
1967		 1319
2	National Income and Gross National Product, quarterly,
1966	to 1968	 1320
3	Changes in Selected Components of National Income,
quarterly, 1966 to 1968	 1321
4	Labour Income, Employment and Average Income, annual,
1966 and 1967	 1322
5	Corporation Profits Before Taxes, by Industry, quarterly,
1966	to 1968	 1323
6	Gross National Expenditure, quarterly, 1966 to 1968... 1324
7	Changes in Selected Components of Gross National Expenditure, quarterly, 1966 to 1968	 1325
8	Gross National Expenditure in Constant (1957) Dollars,
quarterly, 1966 to 1968	 1326
9	Changes in Selected Components of GNE in Constant
Dollars, quarterly, 1966 to 1968	 1327
10	Private and Public Capital Expenditure, annual, 1963 to
1968		 1328
11	Private and Public Capital Expenditure: Reconciliation
with National Accounts Investment, annual, 1963 to
1967		 1328
12	Investment as a Per Cent of GNE, annual, 1963 to 1967..	1328
13	Changes in Non-Farm Business Inventories, quarterly,
1966 to 1968	 1329
14	Changes in Manufacturers' Inventories, Shipments and
Orders, quarterly, 1966 to 1968	 1330
15	Changes in Personal Expenditure, quarterly, 1966 to 1968 1330
16	International Payments: Current Account, annual and
quarterly, 1963 to 1968	 1331
17	Balance on Travel Account, annual and quarterly, 1965 to
1968		 1332
18	Geographical Distribution of Merchandise and Non-
Merchandise Transactions, annual, 1966 and 1967	 1333
19	Labour Force, Employment and Unemployment, Canada,
annual, 1963 to 1968	 1334
20	Labour Force, Employment and Unemployment, by
Region, annual, 1965 to 1968	 1335
21	Annual Changes in Real Domestic Product, 1963 to 1967...	133622	Quarterly Changes in Real Domestic Product, 1965 to 1968	133723	Annual Changes in Employment by Industry, 1963 to 1967	133824	Quarterly Changes in Employment by Industry, 1965 to1968	
133925	Annual Changes in Output per Employee, 1963 to 1967___ 1340
October 16. 1968
Reference
Table
Number	Title	Page26	Quarterly Changes in Output per Employee, 1965 to 1968..	134127	Annual Changes in Earnings and Output, 1963 to 1967....	134228	Quarterly Changes in Earnings and Output, 1965 to 1968..	134329	Gross National Expenditure Price Indexes, quarterly, 1966to 1968	
134430	Consumer Price Index, annual, 1963 to 1968	
134531	Changes in the Consumer Price Index, annual, 1963 to 1968	134532	Contributions to Changes in the Consumer Price Index,annual, 1963 to 1968	
124633	Government Transactions on a National Accounts Basis,annual and quarterly, 1964 to 1968	
134734	Revenues, Expenditures and Fiscal Position, by Level ofGovernment, annual, selected years 1955 to 1967	
134935	Federal Government Revenues and Expenditures: PublicAccounts and National Accounts Reconciliation, quarterly, 1966 to 1968	
135036	Summary of Securities and Credit Market Borrowing,annual, 1965 to 1968	
135237	Changes in Market Bonds and Canada Savings BondsOutstanding, annual, 1963 to 1968	
135338	Official Holdings of Gold and United States Dollars, monthly,1966 to 1968	
135439	Mortgage Loan Approvals, annual and quarterly, 1962 to1968	
135540	Changes in Consumer Credit Outstanding, annual, 1962 to1968	
135641	Selected Sources of Financing by Non-Financial CorporateBusiness, annual, 1965 to 1968	
135742	Details of New Issues and Retirements of Government ofCanada Direct and Guaranteed Marketable Bonds, 1967 and 1968	
135843	Summary of Balance of Payments, annual and quarterly,1963 to 1968	
136144	International Payments: Capital Movements, annual andquarterly, 1963 to 1968	
136245	Net Proceeds From New Issues of Canadian Bonds and
Debentures to Non-Residents, annual and quarterly,
1965 to 1968	 1364
46	Canadian Chartered Banks' Head Offices and Branches in
Canada: Net Changes in Foreign Currency Position, annual and quarterly, 1965 to 1968	 1365
47	Financing of Canada's Bilateral Account with the United
States, annual and quarterly, 1965 to 1968	 1366
48	Canada's Reserve Position with the International Monetary
Fund, annual and quarterly, 1961 to 1968	 1367

[Stage Direction]
1965 to 1967
Real Gross National Product	Real Fixed Capital Formation	Exports	CO CD Imports 001965 | 1966 | 1967	1965 | 1966 | 1967	1965 | 1966 | 1967	1965 | 1966 | 1967(Per cent change from previous year)	Canada	6.9	6.5	2.8	12.1	12.9	-3.3	5.3	17.8	10.5	15.6	16.7	8.0United States	6.1	5.8	2.6	8.8	4.4	-1.0	3.5	10.7	4.2	14.4	19.2	5.4United Kingdom	2.5«>	1.5<'>	1.40)	3.5	1.1	5.0	7.3	6.9	-2.0	1.2	3.3	6.2France	4.2	4.9	4.4	-0.4	9.1	5.8	11.8	8.5	4.4	2.7	14.9	4.4Germany	5.0	2.8	-0.3	6.4	0.4	-7.7	10.4	12.5	8.0	19.6	3.2	-3.7Italy	3.5	5.5	5.9	-8.4	3.7	7.1	20.6	11.7	8.3	1.5	16.7	13.1Japan	3.7	10.7	13.1	19.8	9.3	11.0	26.6	15.7	-6.8	2.9	16.6	22.5-	Industrial Production	Employment	Average Hourly Earnings-Mfg.	Implicit Price Index	1965	1966	1967	1965	1966	1967	1965	1966	1967	1965	1966	1967(Per cent change from previous year)	Canada	8.3	7.9	2.7	3.8	4.2	3.2	4.8	5.5	7.0	3.0	4.5	4.0United States	8.5	8.9	1.1	2.6	2.5	2.0	2.9	4.7	3.6	2.0	2.7	2.9United Kingdom	3.0	1.1	-1.1	0.8<3>	0.5O)	-0.1O)	6.90)	6.20)	3.30)	3.70)	3.0*)	3.60)France	1.6	6.8	2.2	-0.4	-	-0.5	8.0	5.9	6.0	2.5	2.8	2.8Germany	5.6	1.5	-1.5	0.6O)	-0.3O)	-2.90)	9.4	7.3	3.9	3.7	3.7	0.7Italy	4.6	11.6	8.4	-2.40)	-1.90)	0.3O)	8.8	3.2	6.2	4.0	2.3	2.7Japan	3.9	13.1	19.2	3.10)	2.10)	3.0O)	8.70)	11.60)	13.60)	5.9	3.9	4.4
WGross domestic product and GDP implicit price index. (2)Average weekly earnings.
(^Employment in manufacturing only.
Source: OECD Economic Surveys, by country.
OECD Economic Outlook.
OECD Main Economic Indicators.
DBS The National Accounts, Income and Expenditure, Annual, Cat. 13-201. Japan Economic Statistics Monthly.
October 16, 1968	COMMONS DEBATES	1319

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NATIONAL INCOME AND GROSS NATIONAL PRODUCT 1966 to 1968
(Seasonally adjusted at annual rates)
Wages, salaries, and supplementary
labour income	
Military pay and allowances	
Corporation profits before taxes	
Deduct: Dividends paid to non-residents^	
Rent, interest, and miscellaneous investment income	
Accrued net income of farm operators
from farm production^	
Net income of non-farm unincorporated
business(3)	
Inventory valuation adjustment -
National Income.
Indirect taxes less subsidies....
Capital consumption allowances and miscellaneous valuation adjustments - Residual error of estimate	
Gross National Product at Market Prices	
(Gross national product at market prices excluding accrued net income of farm operators)	
1966	1967	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Millions of dollars)	29,661 621 5,145	32,389 704 5,020	28,548 684 5,380	29,308 568 5,236	29,964 588 4,824	30,824 644 5,140	31,512 740 4,796	32,140 680 4,900	32,772 692 5,148	33,132 704 5,236	33,776 700 5,232	34,740 648 5,596-797	-755	-728	-768	-776	-916	-640	-808	-852	-720	-808	-9603,844	4,339	3,708	3,844	3,832	3,992	4,012	4,360	4,444	4,540	4,572	4,6922,204	1,698	2,184	2,244	2,252	2,136	1,996	1,856	1,488	1,452	1,812	1,5482,949 -321	3,194 -291	2,936 -488	2,852 -232	3,000 -340	3,008 -224	2,948 -292	3,176 -268	3,336 -228	3,316 -376	3,272 -292	3,400 -21643,306	46,298	42,224	43,052	43,344	44,604	45,072	46,036	46,800	47,284	48,264	49,4487,950	8,705	7,860	7,912	8,180	7,848	8,792	8,688	8,624	8,716	9,240	9,2806,623 241	7,000 65	6,404 96	6,624 280	6,696 120	6,768 468	7,000 -28	7,176 172	6,980 -32	6,844 148	7,288 120	7,420 24858,120	62,068	56,584	57,868	58,340	59,688	60,836	62,072	62,372	62,992	64,912	66,396(55,916)	(00,370)	(54,400)	(55,624)	(56,088)	(57,552)	(58,840)	(60,216)	(60,884)	(61,540)	(63,100)	(64,848)
M Includes the withholding tax applicable to this item.
«>Includes an arbitrary smoothing of crop production and seasonal adjustments for withdrawals of grain from farm stocks and the change in livestock items. Because of the arbitrary elements, too precise an interpretation should not be given the seasonally adjusted figures of accrued net income of farm operatois.
(8)Includes net income of independent professional practitioners.
Source: DBS The National Accounts, Income and Expenditure, Quarterly, Cat. 13-001.
1320	COMMONS DEBATES	October 16, 1968

[Stage Direction]
1966 to 1968 (Seasonally adjusted)
-	1966	1967	1966	1967	1968 0	IQ 1 2Q | 3Q | 4Q	IQ 1 2Q | 3Q | 4Q	IQ 1 2Q 2	Labour income	
Total non-farm business income	
Corporation profits before taxes	
Net income of non-farm unincorporated business^ 	
Investment income	
Farm income	
National Income	13.3 0.2 -1.0 2.5 8.7 34.0 11.3	9.2 1.5 -2.4 8.3 12.9 -23.0 6.9	4.3 1.2 1.5 0.5 -1.2 25.5 4.5	(Pe 2.7 -2.7 -2.7 -2.9 3.7 2.7 2.0	cent ch 2.2 -3.3 -7.9 5.2 -0.3 0.4 0.7	ange fron 2.9 4.1 6.6 0.3 4.2 -5.2 2.9	a previou 2.2 -5.0 -6.7 -2.0 0.5 -6.6 1.0	s period; 2.0 4.3 2.2 7.7 8.7 -7.0 2.1	2.0 5.1 5.1 5.0 1.9 -19.8 1.7	1.1 0.8 1.7 -0.6 2.2 -2.4 1.0	1.9 -0.6 -0.1 -1.3 0.7 24.8 2.1	3 o 3 5.8	O 7.0 M U 3.9	>
H 9 K M 2.6 OT -14.6 2.5
0>lncludes the withholding tax applicable to this item. Source: DBS The National Accounts.
October 16, 1968	COMMONS DEBATES

[Stage Direction]
LABOUR INCOME^, EMPLOYMENT AND AVERAGE INCOME 1966 and 1967 Selected Industries
Labour Income	Employment	Average Income per Employee	1966	1967	1966	1967	1966	1967(Per cent change from previous year)	8.7	10.3	2.2	1.5	6.4	8.711.4	6.1	5.4	0.2	5.7	5.924.8	4.0	6.5	-4.2	17.2	8.68.2	12.6	3.1	2.7	4.9	9.611.1	9.7	5.4	2.6	5.4	6.98.5	8.5	3.8	6.4	4.5	2.013.9	13.0	8.4	7.9	5.1	4.712.3	8.9	5.7	2.7	6.2	6.0
d)Excludes supplementary labour income.
^Includes storage, electric power, gas and water utilities.
^Excludes agriculture, fishing and trapping, public administration and defence.
Source: DBS Estimates of Employees by Province and Industry, Monthly, Cat. 72-008. DBS Estimates of Labour Income, Monthly, Cat. 72-005.
COMMONS DEBATES	October 16. 1968
29180-84a

[Stage Direction]
CORPORATION PROFITS BEFORE TAXES, BY INDUSTRY 1966 to 1968
(Seasonally adjusted at annual rates)
Mines, quarries and oil wells	
Manufacturing industries:
Food and beverage industries	
Rubber industries	
Textile industries	
Wood industries	
Paper and allied industries	
Printing, publishing and allied industries....
Primary metal industries	
Metal fabricating industries	
Machinery industries	' ' ' * '
Transportation equipment industries	
Electrical products industries	''
Non-metallic mineral products industries___
Petroleum and coal products industries....
Chemical and chemical products industries. Other manufacturing industries(1)	
Total, manufacturing industries	
Transportation	
Storage	
Communication	
Electric power, gas and water utilities	!....
Wholesale trade	
Retail trade	
Finance, insurance and real estate	
Service industries	
Other non-manufacturing*2)	
Total, all industries.
1966	1967	1966	1967	1968	IQ	1 2Q	1 3Q	1 4Q	IQ	1 2Q	1 3Q	1 4Q	IQ	1 2Q(Millions	of dollars)	570	566	604	624	556	496	560	512	580	612	644	628366 34 65 128 188 95	370 42 59 117 147 117	396 36 96 156 172 88	360 32 56 140 220 84	360 36 60 104 164 100	348 32 48 112 196 108	304 32 48 124 172 116	348 36 52 124 156 112	420 36 60 108 136 120	408 64 76 112 124 120	448 44 68 176 172 120	424 28 100 184 188 124700	724	792	720	620	668	664	720	728	784	716	880117 89 164 231 125	81 53 173 206 125	120 92 148 260 116	128 88 180 232 116	92 104 156 232 120	128 72 172 200 148	40 64 172 212 136	44 48 164 216 116	104 56 172 188 116	136 44 184 208 132	96 68 152 208 132	76 104 164 248 1162,302	2,214	2,472	2,356	2,148	2,232	2,084	2,136	2,244	2,392	2,400	2,636553	437	508	560	476	668	444	460	412	432	348	42494 419 297 643 176 91	117 398 316 689 203 80	92 480 332 616 192 84	92 408 276 640 184 96	92 376 288 632 160 96	100 412 292 684 168 88	140 380 264 652 208 64	92 396 316 648 248 92	120 400 388 732 196 76	116 416 296 724 160 88	136 444 340 684 160 76	100 432 312 820 152 925,145	5,020	5,380	5,236	4,824	5,140	4,706	4,900	5,148	5,236	5,232	5,596
imoucuaucuus mauuiautun
(2)Includes agriculture, forestry, fishing and construction. Source: DBS Corporation Profits, Quarterly, Cat. 61-003.
co
to
[Stage Direction]
October 16, 1968	COMMONS DEBATES
Personal expenditure on consumer goods and services	
Government expenditure on goods and services	
Business gross fixed capital formation!'). New residential construction..- New non-residential construction. New machinery and equipment..
Value of physical change in inventories
total*21	[DOT]_	
Non-farm business inventories
[Stage Direction]
Farm inventories and grain in com mercial channels	
Exports of goods and services.. Imports of goods and services. Residual error of estimate	
REFERENCE TABLE 6 GROSS NATIONAL EXPENDITURE 1966 to 1968
(Seasonally adjusted at annual rates)
Gross National Expenditure at Market Prices	
1966	1967	1968	1966	1967	IQ 1	2Q 1	3Q 1	4Q	IQ 1	2Q 1	3Q |	4Q	IQ 1	2Q(Millions of dollars)	34,848	37,714	33,956	34,116	35,332	35,988	36,444	37,388	38,192	38,832	39,832	40,25211,286	12,377	10,656	10,964	11,632	11,892	11,860	12,672	12,288	12,688	13,092	13,38012,493 2,171 4,850 5,472	12,365 2,337 4,670 5,358	11,968 2,280 4,480 5,208	12,572 2,264 5,016 5,292	12,308 2,084 4,672 5,552	13,124 2,056 5,232 5,836	12,972 1,920 5,128 5,924	12,724 2,348 4,724 5,652	11,916 2,532 4,236 5,148	11,848 2,548 4,592 4,708	12,268 2,436 4,548 5,284	12,760 2,948 4,768 5,044940 777	225 189	988 792	1,668 1,392	588 564	516 360	152 176	148 208	680 684	-80 -312	148 -12	12 60163	36	196	276	24	156	-24	-60	-4	232	160	-4813,073	14,608	12,660	12,820	13,276	13,536	14,468	15,004	14,252	14,708	16,184	16,780-14,280	-15,157	-13,548	-13,996	-14,676	-14,900	-15,088	-15,692	-14,988	-14,860	-16,496	-16,544-240	-64	-96	-276	-120	-468	28	-172	32	-144	-116	-24458,120	62,068	56,584	57,868	58,340	59,688	60,836	62,072	62,372	62,993	64,912	66,396
s
s
o
a
in
d
w
[Stage Direction]
>
"Includes private businesses and institutions, and publicly	..phyaieal* change is then valued at average prices of the
*' *"**"' ""** -d *"[DOT] "100,1 v*'~ "M iho ,,™torj'
valuation adjustment.
Source: DBS The National Accounts.
[Stage Direction]
o
Mi

[Stage Direction]
1966 to 1968 (Seasonally adjusted)
1966	1967	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Per cent change from previous period)	Personal expenditure on consumer goods and services	8.7	8.2	2.0	0.5	3.6	1.9	1.3	2.6	2.2	1.7	2.6	1.1Government expenditure on consumer goods and	services	17.4	9.7	6.3	2.9	6.1	2.2	-0.3	6.8	-3.0	3.3	3.2	2.2Business gross fixed capital formation*1*	17.3	-1.0	3.3	5.0	-2.1	6.6	-1.2	-1.9	-6.4	-0.6	3 5	4 0New residential construction	2.2	7.6	5.4	-0.7	-8.0	-1.4	-6.6	22.3	7.8	0.6	-4.4	21.0New non-residential construction	20.5	-3.7	1.7	12.0	-6.9	12.0	-2.0	-7.9	-10.3	8.4	-1 0	4 8New machinery and equipment	21.5	-2.1	3.8	1.6	4.9	5.1	1.5	-4.6	-8.9	-8.5	12.2	-4.5Exports of goods and services	16.0	11.7	6.0	1.3	3.6	2.0	6.9	3.7	-5.0	3.2	10.0	3.7Imports of goods and services	15.2	6.1	2.2	3.3	4.9	1.5	1.3	4.0	-4.5	-0.9	11.0	0.3Gross National Expenditure	11.3	6.8	4.5	2.3	0.8	2.3	1.9	2.0	0.5	1.0	3.0	2.3
(1)See footnote (*) reference table 6. Source: DBS The National Accounts.
October IB, 1968	COMMONS DEBATES	1325

[Stage Direction]
1966 to 1968
(Seasonally adjusted at annual rates)
1966	1966	1967	1968	IQ	2Q	3Q 1	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Millions of dollars)	Personal expenditure on consumer goods	32,304and services	29,902	31,327	29,508	29,296	30,256	30,548	30,788	31,224	31,508	31,788	32,292	Government expenditure on goods and	8,720	8,980services	8,335	8,606	7,948	8,192	8,548	8,652	8,312	8,932	8,460	8,812	Business gross fixed capital formation*1*.	9,633	9,318	9,376	9,732	9,444	9,980	9,748	9,636	9,036	8,852	9,128	9,336New residential construction	1,585	1,591	1,704	1,672	1,508	1,456	1,348	1,008	1,720	1,688	1,596	1,896New non-residential construction. . .	3,656	3,350	3,452	3,804	3,500	3,868	3,732	3,400	3,024	3,244	3,184	3,280New machinery and equipment	4,392	4,377	4,220	4,256	4,436	4,656	4,668	4,628	4,292	3,920	4,348	4,160Value of physical change in inventories-	-76	188	64total*2*	891	174	1,000	1,568	532	464	116	100	556	726	162	784	1,284	500	336	160	180	572	-204	-4	76Farm inventories and grain in com-	-16	188	192	-12mercial channels	165	12	216	284	32	128	-44	-80	Exports of goods and services	11,345	12,467	11,152	11,212	11,380	11,636	12,396	12,796	12,148	12,528	13,624	14,112Imports of goods and services	-12,240	-12,834	-11,716	-12,044	-12,544	-12,656	-12,832	-13,296	-12,720	-12,488	-13,668	-13,660Residual error of estimate	-196	-51	-80	-228	-96	-380	24	-140	24	-112	-88	-188Gross National Expenditure in Con-	49,212	50,288	50,948stant (1957) Dollars	47,670	49,007	47,188	47,728	47,520	48,244	48,552	49,252	49,012	
Q>, (2>See footnotes (1) and W reference table 6. Source: DBS The National Accounts.
1326	COMMONS DEBATES	October 16, 1968

[Stage Direction]
1966 to 1968 (Seasonally adjusted)
1966	1967	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Per cent change from previous period)	Personal expenditure on consumer goods and services	5.1	4.8	0.8	-0.7	3.3	1.0	0.8	1.4	0.9	0.9	1.6	-Government expenditure on consumer goods and	services	10.8	3.3	3.6	3.1	4.3	1.2	-3.9	7.5	-5.3	3.1	1.1	1.9Business gross fixed capital formation^)	12.9	-3.3	2.0	3.8	-3.0	5.7	-2.3	-1.1	-6.2	-2.0	3.1	2.3New residential construction	-3.5	0.4	3.6	-1.9	-9.8	-3.4	-7.4	19.3	7.0	-1.9	-5.5	18.8New non-residential construction	14.4	-8.4	0.5	10.2	-8.0	10.5	-3.5	-8.9	-li.i	7.3	-1.9	3.0New machinery and equipment	19.0	-0.3	2.7	0.9	4.2	5.0	0.3	-0.9	-7.3	-8.7	10.9	-4.3Exports of goods and services	12.3	9.9	5.2	0.5	1.5	2.2	6.5	3.2	-5.1	3.1	8.7	3.6Imports of goods and services	12.9	4.9	1.9	2.8	4.2	0.9	1.4	3.6	-4.3	-1.8	9.4	-0.1Gross National Expenditure	6.5	2.8	3.0	1.1	-0.4	1.5	0.6	1.4	-0.5	0.4	2.2	1.3
<1>See footnote <*>
reference table 6. Source: DBS The National Accounts.
October 16, 1968	COMMONS DEBATES	1327
[Stage Direction]
October 16. 1968

[Stage Direction]
PRIVATE AND PUBLIC CAPITAL EXPENDITURE 1963 to 1968
-	1963	1964 [DOT]	1965	1966	1967	1968
		(Millions of dollars)				
Agriculture and fishing	762	836	926	1,043	1,073	1,042Forestry	60	88	96	92	89	92Mining, quarrying and oil wells	521	632	735	1,030	1,005	1,007Manufacturing	1,358	1,831	2,340	2,914	2,516	2,455Utilities and transportation	1,771	2,059	2,423	2,926	3,083	3,314Construction industry	135	197	263	249	253	252Trade, finance and commercial services	918	1,042	1,269	1,527	1,417	1,444Institutions	873	771	1,012	1,204	1,371	1,576Housing	1,713	2,028	2,133	2,181	2,352	2,661Government departments	1,282	1,460	1,668	1,924	2,015	2,195Total Capital Expenditure	9,393	10,944	12,865	15,090	15,174	16,038Total Capital Expenditure as a percentage of Gross	National Expenditure	21.6	23.1	24.6	26.0	24.4	24.0<>)
(^Estimated by Department of Finance.
Source: DBS and Department of Trade and Commerce Private and Public Investment in Canada, Outlook, Annual, and Mid-year Review 1968, Cat. 61-205.

[Stage Direction]
1963 to 1967
-	1963	1964	1965	1966	1967Private and public capital expenditure-	(Millions of dolla	rs)	15,174reference table 10	
Deduct:	9,393	10,944	12,865	15,090	New residential construction by governments New non-residential construction by govern-	6	7	9	10	15ments	
New machinery and equipment outlays by	1,609	1,618	1,958	2,252	2,464governments.	
Business gross fixed capital formation-	187	216	247	335	330National Accounts definition, reference table 6	7,591	9,103	10,651	12,493	12,365Source: DBS and Department of Trade and Commerce Private and Public Investment in DBS The National Accounts.	Canada.

[Stage Direction]
1963 to 1967
-	Total Private and Public Investment	Housing and Social Capital!1)	Business Investment Private and Public<*1963	21.6	9.1	12.61964	23.1	9.1	14.01965	24.6	9.4	15.21966	26.0	9.3	16.624.4	9.4	15.0Note: Figures may not cross-add due to rounding.	...	. .	,
01 Includes housing, outlays by government departments, institutions and municipal waterworks. <*)Includes government business enterprises.
Source: DBS and Department of Trade and Commerce Private and Public Investment in Canada, DBS The National Accounts.

[Stage Direction]
CHANGES IN NON-FARM BUSINESS INVENTORIES 1966 to 1968
(Seasonally adjusted at annual rates)
1966	1967	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	1 3Q	4Q	IQ	1 2Q(Millions of dollars)	Manufacturing	496	36	508	500	420	556	36	212	144	-248	- 132	- 244Durables	333	-50	468	348	200	316	44	72	-140	-176	- 120	-72Non-durables	163	86	40	152	220	240	-8	140	284	-72	-12	-272Wholesale trade	125	81	-68	416	76	76	132	56	96	40	24	-64Retail trade	153	33	284	412	76	-160	60	-188	260	-	284	324Other industries	3	39	68	64	-8	-112	-52	128	184	-104	-188	144Total	777	189	792	1,392	564	360	176	208	684	-312	-12	60
Source: DBS The National Accounts
October 16, 1968	COMMONS DEBATES

[Stage Direction]
1966 to 1968 (Seasonally adjusted)
1966	1967	1966	1967	1968	IQ	to «©	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Per cent change from previous period)	Inventories held:	Raw materials	9.6	3.2	2.6	1.6	2.6	1.3	-0.4	0.2	1.8	-0.3	-0.3	-1.3Goods in process	16.2	9.1	4.6	3.3	4.5	2.5	1.5	1.5	4.2	-2.8	-1.9	0.6Finished products	9.7	10.1	1.9	3.8	3.0	3.3	2.3	2.4	1.9	-0.6	-1.1	Inventories owned	11.7	6.0	3.1	2.7	3.1	2.2	0.3	1.2	2.1	-0.7	-it	-0.6Shipments	9.4	2.1	2.8	0.2	1.0	2.0	-2.0	0.9	2.5	0.2	-0.2	3.4Unfilled orders	18.1	6.4	4.0	4.7	3.3	2.6	2.2	-1.9	1.8	-0.2	-1.8	-1.3
Source: DBS Inventories, Shipments and Orders in Manufacturing Industries, Monthly, Cat. 31-001.

[Stage Direction]
CHANGES IN PERSONAL EXPENDITURE 1966 to 1968 (Seasonally adjusted)
Total consumer expenditure	
Durables	
Non-durables	
Services	
(Total non-durables and services)
Source: DBS The National Accounts,
1967
IQ | 2Q | 3Q | 4Q
[Stage Direction]
2Q
3Q
4Q
IQ | 2Q
(Per cent change from previous period)
8.7	8.2	2.0	0.5	3.6	1.9	1.3	2.6	2.2	1.7	2.6	1.14.2	4.7	2.2	-10.4	12.5	-0.9	-3.1	6.6	3.1	-3.8	5.5	0.39.7	9.2	1.5	2.5	2.3	2.3	1.4	3.5	2.5	0.6	2.3	0.88.9	8.1	2.5	1.5	2.6	2.1	2.4	0.4	1.5	4.8	2.1	1.6(9.3)	(8.7)	(2.0)	(2.0)	(2.4)	(2.2)	(1.9)	(2.1)	(2.0)	(2.4)	(2.2)	(1.1)COMMONS DEBATES	Oclober 16, 1968﻿29180-85i

[Stage Direction]
INTERNATIONAL PAYMENTS: CURRENT ACCOUNT
Current Receipts: Merchandise exports (adjusted)	
port	
Travel expenditures	
Interest and dividends..
Freight and shipping____
Inheritances and immigrant's funds	
Other current receipts..
Total Current Receipts
Current Payments: Merchandise imports
(adjusted)	
Travel expenditures.. Interest and dividends.. Freight and shipping... Inheritances and emigrant's funds	
Official contributions... Other current payments
1963 to 1968 (Seasonally adjusted at annual rates)								
1963	1964	1965	1966	1967	1966	1967	1968IQ 1 2Q | 3Q | 4Q	IQ 1 2Q | 3Q | 4Q	IQ | 2Q
Total Current Payments...
Balance on merchandise
trade	
Balance on other transactions	
Current Account Balance.
(Millions of dollars)
7,082	8,238	8,745	10,326	11,387	9,816	9,940	10,640	10,908	11,448	11,504	10,712	11,884	13,188	13,524154	145	138	127	112	132	120	128	128	124	116	104	104	124	120609	662	747	840	1,304	840	840	836	844	952	1,484	1,744	1,036	912	1,080230	332	322	318	294	320	356	280	316	320	236	312	308	308	352563	644	668	758	845	716	728	792	796	832	848	832	868	916	928151	169	216	268	337	232	260	284	296	320	348	352	328	304	368500	557	645	759	806	728	752	780	776	844	776	808	796	736	7769,289	10,747	11,481	13,396	15,085	12,784	12,996	13,740	14,064	14,840	15,312	14,864	15,324	16,488	17,1486,579	7,537	8,627	10,102	10,906	9,516	9,856	10,304	10,732	10,760	11,188	10,964	10,712	11,920	11,816585	712	796	900	877	876	892	944	888	936	848	820	904	940	904860	1,010	1,086	1,140	1,190	1,056	1,104	1,100	1,300	1,064	1,188	1,276	1,232	1,256	1,368648	679	761	823	884	800	816	836	840	888	888	868	892	952	936185	201	211	198	213	180	192	208	212	208	208	224	212	204	21265 888	69 963	93 1,037	166 1,229	181 1,377	} 1,276	1,276	1,528	1,500	1,520	1,736	1,452	1,524	1,428	1,5209,810	11,171	12,611	14,558	15,628	13,704	14,136	14,920	15,472	15,376	16,056	15,604	15,476	16,700	16,756+503	4-701	4-118	+224	+481	+300	+84	+336	+176	+688	+316	-252	+1,172	+1,268	+1,708-1,024	-1,125	-1,248	-1,386	-1,024	-1,220	-1,224	-1,516	-1,584	-1,224	-1,060	-488	-1,324	-1,480	-1,316-521	-424	-1,130	-1,162	-543	-920	-1,140	-1,180	-1,408	-536	-744	-740	-152	-212	+392
Source: DBS Quarterly Estimates of the Canadian Balance of International Payments, Quarterly, Cat. 67-001.
October 16, 1968	COMMONS DEBATES
[Stage Direction]


to
REFERENCE TABLE 17 BALANCE ON TRAVEL ACCOUNT 1965 to 1968
1966	1967	1968	IQ	2Q	3Q	IQ	2Q	3Q	4Q	IQ	2Q(Millions of dollars)	United States:	148	68	2056G0	730	1,158	64	155	403	108	71	302	637	Payments	548	628	609	141	172	212	103	153	166	184	106	157	173Balance	+112	+102	+549	-77	-17	+191	+5	-82	+136	+453	+42	-89	+32Rest of World:	71	20	11	30Receipts	87	110	146	10	28	52	20	11	44	Payments	248	272	268	50	67	103	52	56	64	94	54	52	70Balance	-161	-162	-122	-40	-39	-51	-32	-45	-20	-23	-34	-41	-40708	168	79	235747	840	1,304	74	183	455	128	82	346	Payments	796	900	877	191	239	315	155	209	230	278	160	209	243Balance	-49	-60	+427	-117	-56	+140	-27	-127	+116	+430	+8	-130	-8
Source: DBS Quarterly Estimates of the Canadian Balance of International Payments.
COMMONS DEBATES	October 16, 1968

[Stage Direction]
1966 and 1967
United States	United Kingdom	Other Countries	All Countries	1966 | 1967	1966 | 1967	1966 | 1967	1966 | 1967	Merchandise exports (adjusted)	
Merchandise imports (adjusted)	
Trade balance	
Non-merchandise receipts	
Non-merchandise payments	
Non-merchandise balance	
Total current receipts	
Total current payments	
Current account balance	6,249 7,242	7,325 7,980	1,133 664	(Millions 1,199 651	of dollars) 2,944 2,196	2,863 2,275	10,326 10,102	11,387 10,906-993 2,052 3,089	-655 2,501 3,225	+469 386 430	+548 395 459	+748 632 937	+588 802 1,038	+224 3,070 4,456	+481 3,698 4,722-1,037 8,301 10,331	-724 9,826 11,205	-44 1,519 1,094	-64 1,594 1,110	-305 3,576 3,133	-236 3,665 3,313	-1,386 13,396 14,558	-1,024 15,085 15,628-2,030	-1,379	+425	+484	+443	+352	-1,162	-543
Source: DBS Quarterly Estimates of the Canadian Balance of International Payments.
October 16, 1968	COMMONS DEBATES

[Stage Direction]
1963 to 1968
-	1963	1964	1965	1966	1967	1968«>	1963	1964	1965	1966	1967	1968<2>(Thousands	of persons)	(Per cent change from previous period)	Total labour force	6,748	6,933	7,141	7,420	7,694	7,868	2.0	2.7	3.0	3.9	3.7	2.5Agriculture	
N on-agriculture	662 6,086	641 6,292	602 6,540	551 6,869	566 7,129	555 7,313	-1.9 2.5	-3.2 3.4	-6.1 3.9	-8.5 5.0	2.7 3.8	-1.4 2.8Men	
Women	4,879	4,961	5,065	5,193	5,329	5,424	1.2	1.7	2.1	2.5	2.6	2.01,870	1,972	2,076	2,227	2,365	2,444	4.1	5.5	5.3	7.3	6.2	4.0Age 14-19	672	700	738	778	816	838	3.7	4.2	5.4	5.4	4.9	2.6Total employed	6,375	6,609	6,862	7,152	7,379	7,484	2.4	3.7	3.8	4.2	3.2	1.6Agriculture	
N on-agriculture	649 5,726	630 5,979	594 6,268	544 6,609	559 6,820	542 6,936	-1.7 2.9	-2.9 4.4	-5.7 4.8	-8.4 5.4	2.8 3.2	-1.3 1.8Men	4,567	4,698	4,842	4,983	5,083	5,123	1.8	2.9	3.1	2.9	2.0	0.8Women	1,808	1,911	2,020	2,169	2,296	2,359	4.1	5.7	5.7	7.4	5.9	3.4Age 14-19	596	628	673	714	740	745	4.0	5.4	7.2	6.1	3.6	0.5Total unemployed	374	324	280	267	315	384	-4.1	-13.4	-13.6	-4.6	18.0	25.1Unemployment rate	5.5	4.7	3.9	3.6	4.1	4.9	
<0 Average of the first eight months of 1968. Small differences in totals may arise due to the seasonal adjustment process. (2) Per cent change is based on the first eight months of 1968 compared to the first eight months of 19b7.
Source: DBS The Labour Force, Monthly, Cat. 71-001,
1334	COMMONS DEBATES	October 16, 1968
October 16, 1968

[Stage Direction]
1965 to 1968
-	1965	1966	1967	19680)	1966	1967	1968«)Atlantic Region	(T	bousands	of perso	as)	(Per c pre	ait chang dous per	e from od)Labour force:	Total	611	626	635	643	2.5	1.4	2.1Non-agricultural	577	593	605	-	2.8	2.0	Employed:	Total	566	586	593	595	3.5	1.2	1.2Non-agricultural	533	554	564	568	3.9	1.8	1.4Unemployed	45	40	42	48	-11.1	5.0	14.3Unemployment rate (per cent)	7.4	6.4	6.6	7.5	-	-	-Quebec Labour force:	Total	2,022	2,116	2,196	2,214	4.6	3.8	0.8Non-agricultural	1,903	2,007	2,080	-	5.5	3.6	Employed:	Total	1,912	2,016	2,080	2,071	5.4	3.2	-0.6Non-agricultural	1,796	1,910	1,966	1,952	6.3	2.9	-1.0Unemployed	110	100	116	143	-9.1	16.0	26.5Unemployment rate (per cent)	5.4	4.7	5.3	6.5	-	-	-Ontario: Labour force:	Total	2,614	2,719	2,834	2,909	4.0	4.2	2.9Non-agricultural	2,461	2,577	2,685	-	4.7	4.2	Employed:	Total	2,548	2,651	2,745	2,803	4.0	3.5	2.4Non-agricultural	2,397	2,510	2,598	2,664	4.7	3.5	2.7Unemployed	66	69	89	107	4.5	29.0	21.6Unemployment rate (per cent)	2.5	2.5	3.1	3.7	-	-	-Prairie Region: Labour force:	Total	1,228	1,248	1,268	1,311	1.6	1.6	3.3Non-agricultural	
Employed:	955	1,007	1,023	5.4	1.6	Total	1,196	1,222	1,238	1,269	2.2	1.3	2.3Non-agricultural	925	982	995	1,036	6.2	1.3	4.0Unemployed	32	26	30	41	-18.8	15.4	46.4Unemployment rate (per cent)	2.6	2.1	2.4	3.1	-	-	-British Columbia: Labour force:	Total	666	710	762	791	6.6	7.3	5.2Non-agricultural	644	684	736	6.2	7.6	Employed:	Total	639	678	723	742	6.1	6.6	3.9Non-agricultural	617	652	698	716	5.7	7.1	3.9Unemployed	27	32	39	48	18.5	21.9	26.3Unemployment rate (per cent)	4.1	4.5	5.1	6.1	-	-	-
(')Average of the first eight months of 1968. Small differences in totals may arise due to the seasonal adjustment process. *>Per cent change is based on the first eight months of 1968 compared to the first eight monthB of 1967.
Source: DBS The Labour Force.

[Stage Direction]
ANNUAL CHANGES IN REAL DOMESTIC PRODUCT 1963 to 1967
-	1963	1964	1965	1966	1967
	(Per cent change from previous year)				
5.1	6.4	6.9	6.0	2.712.0	-9.9	4.9	13.3	-14.2Real domestic product less agriculture	4.6	7.4	7.0	5.6	3.65.5	12.9	5.4	3.7	6.46.8	9.5	9.1	7.2	0.35.0	7.5	6.2	5.8	1.38.6	11.8	12.1	8.8	-0.71.2	10.9	13.9	6.0	0.5Transportation, storage and communication	6.7	8.2	5.8	7.2	5.83.8	5.8	7.2	4.4	4.2Finance, insurance and real estate	3.9	4.4	3.8	2.7	4.44.2	6.6	7.4	5.4	4.8Commercial industries less agriculture	5.2	7.9	7.3	6.0	3.1
Source: DBS Indexes of Real Domestic Product by Industry (1961 Base), Occasional, Cat. 61-506. DBS Index of Industrial Production (1961 - 100), Monthly, Cat. 61-005.
1336	COMMONS DEBATES	October 16, 1968

[Stage Direction]
QUARTERLY CHANGES IN REAL DOMESTIC PRODUCT 1965 to 1968 (Seasonally adjusted)
1965	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Per cent change from previous quarter)	Real domestic product less agricul-	ture	2.1	1.2	2.2	2.2	1.9	0.3	0.3	1.3	0.6	1.7	0.6	0.6	0.6	1.5Mines	3.9	-2.4	3.3	1.6	2.2	-0.1	-3.5	4.9	1.4	2.6	0.8	3.2	-0.3	2.4Manufacturing	2.6	1.8	3.0	3.0	2.3	0.4	0.3	0.7	-1.1	0.5	0.4	1.1	-0.3	3.2Non-durables	0.8	0.9	2.5	2.3	2.0	0.6	-0.5	1.0	-0.2	1.0	-0.1	1.1	2.2	1.3Durables	4.6	2.7	3.5	3.7	2.7	0.1	1.0	0.4	-2.0	-0.1	1.0	1.0	-2.7	5.2Construction	5.5	-1.4	3.3	2.6	6.5	-0.9	-4.2	-0.8	1.0	3.1	2.0	-3.1	1.5	6.1Transportation, storage and com-	munication	0.8	0.7	3.2	4.3	-0.2	2.3	-	2.5	2.3	1.1	0.6	0.8	2.1	-1.5Trade	2.3	3.3	1.2	1.8	2.3	-2.9	2.8	1.7	-0.7	4.0	-0.5	1.0	-0.7	0.6Finance, insurance and real estate.	1.1	1.1	0.7	0.5	0.6	0.6	1.1	0.7	1.2	1.5	1.2	0.9	0.7	1.2Services	1.8	2.0	1.6	1.3	1.2	1.4	0.9	1.3	1.3	1.6	0.9	0.3	0.6	0.6Commercial industries less agri-	culture	2.2	1.3	2.3	2.5	2.0	0.2	0.1	1.3	0.5	1.6	0.5	0.6	0.5	1.7
Sotjbce: DBS Indexes of Real Domestic Product by Industry (1961 Base). DBS Index of Industrial Production (1961 = 100).
October 16, 1968	COMMONS DEBATES	1337

[Stage Direction]
ANNUAL CHANGES IN EMPLOYMENT BY INDUSTRY 1963 to 1967
-	1963	1964	1965	1966	1967
	(Per cent change from previous year)				
-1.7	-2.9	-5.7	-8.4	2.8-1.7	1.2	6.3	2.2	1.52.9	4.9	4.9	5.4	0.21.4	3.6	2.6	4.0	0.34.8	6.4	7.5	6.9	0.10.3	5.6	10.4	6.5	-4.2Transportation, storage and communication	0.9	3.0	2.9	3.1	2.73.1	4.0	5.2	5.4	2.6Finance, insurance and real estate	5.3	5.2	3.7	3.8	6.45.9	6.8	7.5	8.4	7.9Commercial industries less agriculture	2.5	4.7	5.5	5.4	1.8
<*) Taken from DBS The Labour Force.
Source: DBS Estimates of Employees by Province and Industry.
1338	COMMONS DEBATES	October 16. 1968

[Stage Direction]
QUARTERLY CHANGES IN EMPLOYMENT BY INDUSTRY 1965 to 1968 (Seasonally adjusted)
1965	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	a a <M(Per cent change from previous quarter)	Mines	3.1	1.5	1.9	1.3	1.2	-0.4	-3.2	2.8	0.9	-0.8	1.1	0.8	1.3	-0.8Manufacturing	1.2	1.2	1.4	1.8	1.8	1.1	0.3	0.9	0.1	-1.0	-0.1	-0.4	-0.8	1.3Non-durables	-	0.6	1.7	1.0	1.5	0.7	0.2	0.7	0.1	-0.4	-0.6	-	0.5	1.6Durables	2.4	1.7	1.2	2.8	2.0	1.5	0.6	1.1	-0.1	-1.8	0.6	-0.8	-2.2	0.9Construction	3.2	1.1	3.4	4.4	2.6	-0.6	-1.9	1.1	0.3	-5.0	-0.6	0.1	0.3	2.1Transportation, storage and com-	munication	1.0	-0.1	0.6	0.9	0.8	0.9	0.8	1.0	1.7	0.1	-0.9	0.1	0.8	-1.6Trade	1.4	1.4	1.3	1.2	2.3	0.9	0.3	1.1	0.5	0.5	0.5	0.9	1.1	2.0Finance, insurance and real estate..	0.6	0.8	0.8	0.9	1.0	1.3	0.8	0.7	2.2	2.5	1.5	1.0	1.1	3.1Services	1.6	1.4	2.5	2.4	2.1	1.8	1.9	1.5	1.6	2.7	2.4	1.1	1.4	2.3Commercial industries less agri-	culture	1.5	1.1	1.6	1.8	1.8	1.1	0.1	1.2	0.8	-0.4	-0.2	0.4	0.5	1.4
*=preliminary
Source: DBS Estimates of Employees by Province and Industry (Seasonally adjusted by the Department of Finance).
October 16, 1968	COMMONS DEBATES	1339

[Stage Direction]
ANNUAL CHANGES IN OUTPUT PER EMPLOYEE 1963 to 1967
-	1963	1964	1965	1986	1967
	(Per cent change from previous year)				
13.9	-7.2	11.2	23.7	-16.57.3	11.6	-0.8	1.5	4.83.8	4.4	4.0	1.7	0.13.6	3.8	3.5	1.7	1.03.6	5.1	4.3	1.8	-0.80.9	5.0	3.2	-0.5	4.9Transportation, storage and communication	5.7	5.0	2.8	4.0	3.00.7	1.7	1.9	-0.9	1.6Finance, insurance and real estate	-1.3	-0.8	0.1	-l.i	-1.9-1.6	-0.2	-0.1	-2.8	-2.9Commercial industries less agriculture	2.6	3.1	1.7	0.6	1.3
Source: Reference tables 21 and 23.
1340	COMMONS DEBATES	Oclober 16, 1968

[Stage Direction]
QUARTERLY CHANGES IN OUTPUT PER EMPLOYEE 1965 to 1968 (Seasonally adjusted)
1965	1966	1967	1908	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q-(Per cent change from previous quarter)	Mines	0.8	-3.9	1.4	0.3	0.1	0.3	-0.3	2.0	0.5	3.4	-0.3	2.4	-1.6	3.2Manufacturing	1.4	0.6	1.6	1.2	0.5	-0.7	-0.2	-1.2	1.5	0.5	1.5	0.5	1.9Non-durables	0.8	0.3	0.8	1.3	0.5	-0.1	-0.7	0.3	-0.3	1.4	0.5	1.1	1.7	-0.3Durables	2.1	1.0	2.3	0.9	0.7	-1.4	0.4	-0.7	-1.9	1.7	0.4	1.8	-0.5	4.3Construction	2.2	-2.5	-0.1	-1.7	3.8	-0.3	-2.3	-1.9	0.7	8.5	2.6	-3.2	1.2	3.9Transportation, storage and com-	munication	-0.2	0.8	2.6	3.4	o t-1 1	1.4	-0.8	1.5	0.6	1.0	1.5	0.7	1.3	0.1Trade	0.9	1.9	-0.1	0.6	-	-3.8	2.5	0.6	-1.2	3.5	-1.0	0.1	-1.8	-1.4Finance, insurance and real estate..	0.5	0.3	-0.1	-0.4	-0.4	-0.7	0.3	-	-1.0	-1.0	-0.3	-0.1	-0.4	-1.8Services	0.2	0.6	0.9	-1.1	-0.9	-0.4	-1.0	-0.2	-0.3	-1.1	-1.5	-0.8	-0.8	-1.7Commercial industries less agri-	culture	0.7	0.2	0.7	0.7	0.2	-0.9	-	0.1	-0.3	2.0	0.7	0.2	-	0.3
*=preliminary
Source: Reference tables 22 and 24.
October 16, 1968	COMMONS DEBATES	1341

[Stage Direction]
ANNUAL CHANGES IN EARNINGS AND OUTPUT 1963 to 1967
Wages and salaries per worker
Non-farm	
Manufacturing	
Output per worker
Non-farm	
Manufacturing	
Wages and salaries per unit of output
Non-farm	
Manufacturing	
Corporate profits per unit of output
Non-farm	
Manufacturing	
1963	1964	1965	1966	1967
(Per cent change from previous year)				
3.7	3.4	5.7	6.3	6.23.1	3.8	5.1	5.7	5.91.7	2.0	1.5	0.63.8	4.4	4.0	1.7	0.12.0	1.4	4.1	6.3	5.6-0.7	-0.6	1.1	3.9	5.84.9	7.2	0.7	-6.3	-5.85.4	-0.7	-2.2	-9.4	-4.1
Source: DBS Estimates of Labour Income.
DBS Estimates of Employees by Province and Industry.
DBS Indexes of Real Domestic Product by Industry (1961 Base). DBS Index of Industrial Production {1961 = 100).
DBS Corporation Profits.
1342	COMMONS DEBATES	October 16, 1968

[Stage Direction]
QUARTERLY CHANGES IN EARNINGS AND OUTPUT 1965 to 1968
(Seasonally adjusted)
1965	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Qr(Per cent change from previous quarter)	Wages and salaries per worker Non-farm	2.2	1.4 1.2	1.4 0.9	1.6 2.4	2.0 1.3	1.0 0.6	1.6 2.2	1.5	1.7 2.3	1.3 2.3	0.7 0.7	1.6 1.5	Manufacturing	2.3	1.5 1.6
Output per worker Non-farm		0.7 1.4	0.1 0.6	0.6 1.6	0.5 1 9.	0.3 0.5	-1.0 -0.7	-0.3	0.1 -0.2		1.5 1.5		0.2 1.5	0.1 0.5	0.1 1.9
Manufacturing												0.5			
														
Wages and salaries per unit of out-														
Non-farm	1.5	1.3 0.6	0.8 -0.7	1.1 1.2	1.7 0.8	2.0 1.3	1.9	0.5 -0.8	1.5 1.0	1.4 -0.3Manufacturing	0.9	2.2	1.2	1.8	Corporate profits per unit of output Non-farm	-2.3	0.2 - 1 5	2.3 0.1	-3.0 -5.9	-0.2 2.7	-3.1 -5.1	-8.2 -9.1	5.2 3.2	-7.2	4.6 4.7	1.0 5.4	-0.6 0.6	5.3 6.4Manufacturing	9.4	2.0	
*=preliminary
Source: DBS Estimates of Labour Income.
DBS Estimates of Employees by Province and Industry (Seasonally adjusted by Department of Finance). DBS Indexes of Real Domestic Product by Industry (1961 Base).
DBS Index of Industrial Production (1961 = 100).
DBS Corporation Profits.
October 16, 1968	COMMONS DEBATES

[Stage Direction]
(Seasonally adjusted base weighted price indexes) 1966 to 1968
Personal expenditure	
Non-durable goods	
Durable goods	
Total goods	
Food	
Non-food	
Non-food non-durables	
Services, excluding net expenditures abroad	
Government expenditure0'	
Business gross fixed capital formation	
Residential construction	
Non-residential construction	
Machinery and equipment	
Exports	
Merchandise	
Imports0'	
Gross National Expenditure (excluding inventories)
G.N.E. (implicit price)	
("Quarter-to-quarter changes in this component are not Source: DBS The National Accounts.
1966	1967	1968	3Q |	4Q	IQ	2Q	3Q |	4Q	IQ	2Q(Per cent	change from previous	quarter)	0.6	0.9	0.4	1.3	1.3	0.7	1.2	1.00.5	0.5	-0.1	0.8	1.2	0.4	1.8	0.8-0.3	1.2	-0.2	1.4	1.0	1.1	-0.4	0.50.4	0.6	-	0.8	1.2	0.5	1.3	0.80.7	-0.2	-0.9	-0.6	2.0	0.8	1.4	-0.10.2	1.1	0.4	1.6	0.7	0.4	1.3	1.10.4	1.1	0.6	1.8	0.6	-	2.1	1.51.0	1.2	1.3	2.1	1.5	0.8	0.9	1.31.7	1.6	2.9	-0.2	1.8	0.6	0.3	1.21.2	1.0	1.2	-0.8	-0.2	1.0	1.1	1.02.1	2.2	0.9	2.1	1.0	2.5	1.3	1.81.4	1.3	1.5	1.2	0.7	1.1	0.9	1.70.8	0.2	1.0	-3.8	-1.6	0.1	1.2	-0.21.6	0.6	0.4	0.1	0.6	1.2	0.51.6	0.4	0.2	-0.4	-0.3	0.4	1.2	0.10.5	0.9	0.2	0.3	0.3	0.8	1.4	0.41.2	1.0	1.3	0.5	1.0	0.7	0.9	1.01.3	0.7	1.3	0.6	1.0	0.5	0.9	0.9
necessarily analytically significant owing to the incomplete price data.
COMMONS DEBATES	October 16. 1968
October 16, 1968
[Stage Direction]
REFERENCE TABLE 30 CONSUMER PRICE INDEX 1963 to 1968
(1949 = 100)
-	1963	1964	1965	1966	1967	August 1968All items	133.#	135.4	138.7	143.9	149.0	156.0Food	130.3	132.4	135.9	144.5	146.5	157.4Housing	136.2	138.4	140.9	144.7	151.0	158.4Clothing	116.3	119.2	121.4	126.0	132.3	135.7T ransportation	140.4	142.0	147.3	150.3	157.2	161.8Health and personal care	162.4	167.8	175.5	180.9	190.2	199.1Recreation and reading	149.3	151.8	154.3	158.7	166.8	175.2Tobacco and alcohol	118.1	120.2	122.3	125.1	128.3	141.1All commodities	123.1	124.7	126.7	131.5	134.9	140.2Durables	115.5	114.5	114.6	115.0	118.6	119.8Non-durables	124.6	126.7	129.2	134.9	138.3	144.3Non-durables excluding food	120.3	122.4	124.1	127.5	132.4	138.8Services	159.8	163.8	170.6	176.6	185.9	195.6
Source: DBS Prices and Price Indexes, Monthly, Cat. 62-002.

[Stage Direction]
1963 to 1968
-	1963	1964	1965	1966	1967	Aug. 1968
						Aug. 1967
		(Per cent change from previous year)				
All items	1.8	1.8	2.4	3.7	3.5	3.4Food	3.2	1.6	2.6	6.3	1.4	1.6Housing	1.0	1.6	1.8	2.7	4.4	4.1Clothing	2.5	2.5	1.8	3.8	5.0	2.6Transportation	-	1.1	3.7	2.0	4.6	2.4Health and personal care	2.6	3.3	4.6	3.1	5.1	3.8Recreation and reading	1.4	1.7	1.6	2.9	5.1	4.3Tobacco and alcohol	0.3	1.8	1.7	2.3	2.6	9.7All commodities	1.7	1.3	1.6	3.8	2.6	2.6Durables	0.2	-0.9	0.1	0.3	3.1	0.8Non-durables	2.0	1.7	2.0	4.4	2.5	2.8Non-durables excluding food	1.0	1.7	1.4	2.7	3.8	4.5Services	1.4	2.5	4.2	3.5	5.3	4.2
Source: DBS Prices and Price Indexes.
COMMONS DEBATES	October 16, 1968

[Stage Direction]
1963 to 1968
-	1963	1964	1965	1966	1967	1968<*
		(Percentage points)				
All items	1.8	1.8	2.4	3.7	3.5	3.4Food	0.9	0.4	0.7	1.6	0.4	0.4Housing	0.4	0.5	0.6	0.9	1.4	1.3Clothing	0.2	0.3	0.2	0.4	0.5	0.3Transportation	-	0.2	0.4	0.3	0.5	0.3Health and personal care	0.2	0.2	0.3	0.3	0.4	0.3Recreation and reading	0.1	0.1	0.1	0.1	0.2	0.2Tobacco and alcohol	-	0.1	0.1	0.1	0.1	0.6AU items	1.8	1.8	2.4	3.7	3.5	3.4All commodities	1.2	0.9	1.0	2.4	1.6	1.6Durables	-	-0.1	-	-	0.3	0.1Non-durables	1.2	1.0	1.0	2.4	1.3	1.5Non-durables excluding food..	0.3	0.5	0.4	0.8	1.0	1.2Services	0.3	0.7	1.1	1.0	1.4	1.2Portion of shelter excluded*1)	0.3	0.2	0.3	0.3	0.5	0.6
(i)Includes new houses, property taxes and mortgage interest.
(i)Per cent change is based on the first eight months of 1968 compared to the first eight months of 1967. Source: DBS Prices and Price Indexes.

[Stage Direction]
1964 to 1968
(Seasonally adjusted at annual rates)
-	1964	1965	1966	1967	1967	1908	IQ	1 2Q	1 3Q	1 4Q	IQ	1 2QGovernment Revenue:	(Millions of dollars)	Direct taxes-persons	3,428	3,913	4,484	5,493	5,532	4,980	5,540	5,920	6,456	6,044Federal	2,558	2,716	2,955	3,572	3,632	3,276	3,588	3,792	4,268	3,952Provincial and municipal	870	1,197	1,529	1,921	1,900	1,704	1,952	2,128	2,188	2i 092Direct taxes-corporations	2,053	2,225	2,252	2,208	2,120	2,228	2,224	2,260	2,352	2,492Federal	1,546	1,675	1,696	1,630	1,568	1,648	1,644	1,660	1,736	1,860Provincial	507	550	556	578	552	580	580	600	616	632Withholding taxes	Federal	140	168	203	218	192	240	220	220	240	216Indirect taxes	6,695	7,564	8,466	9,227	9,208	9,224	9,164	9,312	9,676	9,732Federal	2,847	3,252	3,575	3,707	3,820	3,712	3,644	3,652	3,700	3,588Provincial and municipal	3,848	4,312	4,891	5,520	5,388	5,512	5,520	5,660	5,976	6,144Investment income	1,526	1,671	1,813	2,149	1,856	2,144	2,268	2,328	2,168	2,280Federal	570	630	690	800	612	808	872	908	764	832Provincial and municipal	956	1,041	1,118	1,312	1,216	1,308	1,356	1,368	1,348	1,368Canada Pension Plan	-	-	5	37	28	28	40	52	56	80Employer and employee contributions to	social insurance and government	pension funds	912	1,027	1,843	2,031	1,972	2,028	2,132	1,992	2,124	2,196Federal	574	618	690	704	680	716	780	640	756	748Provincial and municipal	338	409	439	478	456	468	496	492	484	488Canada Pension Plan	-	-	531	624	620	620	628	628	644	672Quebec Pension Plan	-	-	183	225	216	224	228	232	240	288Transfers from federal government	Provincial and municipal	1,252	1,434	1,662	1,992	1,752	2,112	2,064	2,040	2,336	2,472Total Revenue	
Federal	
Provincial and municipal	
Canada Pension Plan	
Quebec Pension Plan	16,006	18,002	20,723	23,318	22,632	22,956	23,612	24,072	25,352	25,4328,235 7,771	9,059 8,943	9,809 10,195 536 183	10,631 11,801 661 225	10,504 11,264 648 216	10,400 11,684 648 224	10,748 11,968 608 228	10,872 12,288 680 232	11,464 12,948 700 240	11.196 13.196 752 288October 16, 1968	COMMONS DEBATES
REFERENCE TABLE 33 (Continued)

[Stage Direction]
1964 to 1968
(Seasonally adjusted at annual rates)
Government Expenditure:
Goods and services	
Federal-Total	
-(Defence)	
Provincial and municipal..
Transfer payments to persons.
Federal	
Provincial and municipal..
Canada Pension Plan....
Quebec Pension Plan....
Interest on the public debt....
Federal	
Provincial and municipal.
Subsidies	
Federal- Provincial.
Capital assistance Federal	
ments
Federal.
Total Expenditure.
Federal	
Provincial and municipal.
Canada Pension Plan	
Quebec Pension Plan	
Surplus (+) or deficit (-)..
Federal	
Provincial and municipal.
Canada Pension Plan....
Quebec Pension Plan....
1968
1964	1965	1966	1967	IQ 1	2Q 1	3Q |	4Q	IQ	2Q8,654	9,614	11,286	12,377	(Million 11,860	of dollars 12,672	12,288	12,688	13,092	13,3803,046	3,293	3,920	4,259	4,096	4,472	4,196	4,272	4,580	4,412(1,584)	(1,559)	(1,709)	(1,805)	(1,644)	(1,844)	(1,952)	(1,780)	(1,704)	(1,820)5,608	6,321	7,366	8,118	7,764	8,200	8,092	8,416	8,512	8,4,133	4,574	5,047	6,223	5,884	6,236	6,200	6,572	6,644	7,1682,239	2,312	2,478	2,936	2,772	3,032	2,972	2,968	3,080	3,3841,894	2,262	2,569	3,287	3,112	3,204	3,228	3,604	3,564	3,784-	-	-	-	-	-	-	-	-	--	-	-	-	-	-	-	-	-	-1,526	1,645	1,805	1,982	1,844	1,928	2,020	2,136	2,036	2,236995	1,052	1,151	1,245	1,140	1,208	1,280	1,352	1,256	1,424531	593	654	737	704	720	740	784	780	812323	326	516	522	416	536	540	596	436	452277	259	375	390	292	436	396	436	304	34046	67	141	132	124	100	144	160	132	11282	84	59	65	52	60	48	100	80	361,252	1,434	1,662	1,992	1,752	2,112	2,064	2,040	2,336	2,47215,97#	17,677	20,375	23,161	21,808	23,544	23,160	24,132	24,624	25,7447,891	8,434	9,645	10,887	10,104	11,320	10,956	11,168	11,636	12,0688,079	9,243	10,730	12,274	11,704	12,224	12,204	12,964	12,988	13,676-	-	-	-	-	-	-	-	-	--	-	-	-	-	-	-	-	-	-36	325	348	157	824	-588	452	-60	728	-312344	625	164	-256	400	-920	-208	-296	-172	-872-308	-300	-535	-473	-440	-540	-236	-676	-40	-480536	661	648	648	668	680	700	752-	183	225	216	224	228	232	240	288
Source: DBS The National Accounts.
1348	COMMONS DEBATES	October 16. 1968

[Stage Direction]
Selected years 1955 to 1967 (National accounts basis)
-	1955	1961	1964	1965	1966	1967
			(Millions of dollars)			
Federal-Revenue	4,937	6,668	8,235	9,059	9,809	10,631-Expenditure	4,761	7,129	7,891	8,434	9,645	10,887Surplus (+) or deficit (-)	+176	-461	+344	+625	+164	-256Provincial-Revenue	1,874	3,709	5,426	6,361	7,312	8,661-Expenditure	1,740	3,837	5,296	6,136	7,245	8,785Surplus (+) or deficit (-)	+134	-128	+130	+225	+67	-124M unieipal-Revenue	1,374	2,707	3,642	4,073	4,616	5,305-Expenditure	1,578	3,123	4,080	4,598	5,218	5,654Surplus (+) or deficit (-)	-204	-416	-438	-525	-002	-349Canada Pension Plan	-	-	-	-	536	661Quebec Pension Plan	-	-	-	-	183	225Totals-Revenue	7,386	11,099	14,754	16,568	19,061	21,326-Expenditure	7,280	12,104	14,718	16,243	18,713	21,169Surplus (+) or deficit (-)	+106	-1,005	+36	+325	+348	+157
0)Excluding inter-governmental transfers. Source: The National Accounts.
October 16, 1968	COMMONS DEBATES	1349

[Stage Direction]
1966 to 1968
(Not seasonally adjusted)
1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2Q(Millions of dollars)	Revenue:	Budgetary Revenue	1,972	1,992	1,976	2,166	2,224	2,173	2,104	2,340	2,425	2,136Deduct:	Budgetary return on investment	-145	-118	-88	-164	-148	-141	-90	-218	-163	-145Post Office revenue	-61	-56	-51	-81	-65	-59	-60	-85	-78	-63Other non-tax budgetary revenue	-56	-26	-35	-34	-52	-14	-28	-28	-61	-18Corporate income tax, excess of accruals (+)	(-262)	(-200)	(-174)	(-279)	(-265)	(-214)	(-178)	(-331)	(-302)	(-226)over collections (-)	-96	-17	+8	+61	-122	-82	-23	+34	-84	+55Add: Extra-budgetary funds revenue:	Old age security taxes	326	319	294	300	373	377	345	345	428	420Unemployment insurance fund-em-	ployer-employee contributions...	87	78	89	89	88	82	93	87	82	87Government pension fund-employer-	employee contributions	75	91	93	88	84	91	105	74	109	94Prairie Farm Assistance Act levies..	2	2	5	2	2	3	5	1	2	1(490)	(490)	(481)	(479)	(547)	(553)	(548)	(507)	(621)	(602)Government investment income: Interest on loans, advances and in-	vestments	49	69	63	90	67	81	80	106	80	60Interest receipts on social insurance	and government pension accounts	46	50	51	52	53	57	58	60	60	85Profits before taxes (net of losses) of	government business enterprises.	32	69	43	76	6	72	77	83	22	71(127)	(188)	(157)	(218)	(126)	(210)	(215)	(249)	(162)	(216)Miscellaneous®	-88	+73	+8	+39	-108	+93	-4	+35	-168	+149Total Revenue, National Accounts Basis..	2,143	2,526	2,456	2,684	2,402	2,733	2,662	2,834	2,654	2,932
(l)See footnote W page 1351.
1350	COMMONS DEBATES	October 16, 1968
spenditure:										
Budgetary Expenditure		2,543	1,671	2,081	2,271	2,756	2,018	2,320	2,392	3,104	2,108
Deduct:										
Budgetary transfers to funds and agen-										
cies®	-191	-90	-175	-133	-200	-159	-125	-153	-245	-88Post Office expenditure	-71	-53	-60	-71	-83	-61	-71	-78	-91	-67Deficits of government business enter-	prises	-55	-5	-7	-10	-46	-9	-13	-14	-49	- 11Reserves and write-offs	-53	-8	-10	-8	-151	-7	-8	-7	-9	8Purchase of existing capital assets	-2	-1	-1	-2	-1	-1	-1	- 1	-3	3Budgetary revenue items offset against	budgetary expenditure®	-32	-32	-32	-34	-32	-32	-32	-35	-33	-33Add:	(-404)	(-189)	(-285)	(-258)	(-513)	(-269)	(-250)	(-288)	(-430)	(-210)Extra budgetary funds expenditure	Old age security benefit payments	249	251	252	254	316	345	335	337	370	374Unemployment insurance benefits	126	82	38	49	138	102	51	62	174	126Government pensions	29	32	32	32	33	35	34	35	34	36Prairie farm emergency payments	5	1	-	1	1	i	8	Expenditure of government funds and	agencies(2)	
....	121	90	187	153	178	169	147	146	145	133Miscellaneous^	-317	401	101	46	-301	428	98	31	-399	441Total Expenditure, National Accounts	Basis	2,352	2,339	2,406	2,548	2,608	2,828	2,735	2,716	3,006	3,008Surplus(+) or deficit(-), National accounts	basis	-209	+187	+50	+136	-206	-95	-73	+118	-352	-76Surplus(+) or deficit(-), budgetary basis....	-571	+321	-105	-105	-532	+155	-217	-52	-679	+28Total, National Accounts basis	2,143	2,526	2,456	2,684	2,402	2,733	2,662	2,834	2,654	2,932
WThese miscellaneous adjustments largely represent revenues from miscellaneous direct and indirect taxes and adjustments for the supplementary period. In the National Accounts, revenues in the supplementary period are shifted into the following fiscal quarter.
<2>In the National Accounts, budgetary appropriations to various funds and agencies are replaced by the outlays actually made by these federal agencies.
(3)	The largest components of this item consists of revenue from sales of goods and services by the government. These sales appear as final expenditure of the private sector and are deducted to avoid double counting.
(4)	This item includes the supplementary period adjustment. In the National Accounts, expenditures on goods and services in the supplementary period are split evenly between adjacent fiscal quarters. Most other expenditure items are shifted entirely to the next fiscal quarter.
Source: DBS, and Department of Finance estimates.
October 16, 1968	COMMONS DEBATES	1351
[Stage Direction]
October 16, 1968

[Stage Direction]
1965 to 1968
	1965	1966	1967	12 months ending	
				June 1967 j	June 1968
		(Millions of dollars)			
Government of Canada:(1>

Market securities	-92	-84	703	860	776Canada Savings Bonds	253	223	230	346	-117Total	161	139	933	1,206	659Provinces (2>
and municipalities:	Securities	992	1,412	1,799	1,628	1,306Bank loans	198	137	80	127	233Total	1,190	1,549	1,879	1,755	1,539Corporations and other <!>	Bonds	1,031	877	716	762	728Stocks	336	535	356	325	407Loans, etc.<"	1,330	402	755	508	830Total	2,697	1,814	1,827	1,595	1,965Mortgages from private sector institutions <5>	1,659	1,134	1,100	776	1,387Bank loans to persons, farmers and institutions	685	295	649	442	608Total	6,392	4,931	6,388	5,774	6,158
0) Securities held outside Government of Canada accounts.
<*>
Excludes securities bought by the Canada Pension Plan and the Quebec Pension Plan.
("Consists of non-financial business and Canadian religious and other non-profit institutions.
("Includes bank loans in Canadian and foreign currencies, sales finance company loans, IDB and other term loans, commercial paper and bankers' acceptances. Excludes trade payables net of receivables and non-residential mortgages.
("Chartered banks, Quebec Savings Banks, Credit Unions and caisses populaires, trust and mortgage loan companies, sales finance and consumer loan companies, life and other insurance companies, trusteed pension plans, mutual and closed-end funds.
Source: Bank of Canada and Department of Finance.

[Stage Direction]
1963 to 1968
	1963	1964	1965	1966	1967	12 months ending	
						July 1967	July 1968
New Issues in Canada by:			(Millions of dollars)				
							
Government of Canada-market **>	350	-270	-87	79	749	905	535-Canada Savings Bonds	513	480	253	223	230	356	-169Total	863	210	166	302	979	1,261	366Provinces and municipalities!*)	1,011	928	724	987	999	lioio	539Corporations*3)	443	610	1,003	539	737	779	344Total	2,317	1,748	1,893	1,828	2,715	3,050	1,249Foreign-Pay Bond Issues:	Government of Canada	119	-7	-5	-163	-46	-45	241Provinces and municipalities	285	472	267	424	800	619	767Corporations*3)	286	205	335	438	104	140	445Total	690	670	597	699	858	714	1,453Total Bond Issues	3,007	2,418	2,490	2,527	3,573	3,764	2,702Taken up by:	Banking system*4)	737	-172	400	130	1,203	1,124	574Non-bank residents:	Market bonds	1,067	1,440	1,240	1,475	1,282	1,570	844Canada Savings Bonds	513	480	253	223	230	356	-169Holders of Canadian foreign-pay	690	670	597	699	858	714	1,453Total	3,007	2,418	2,490	2,527	3,573	3,764	2,702
(*'Includes Treasury bills and excludes Government of Canada accounts. <*>
Excludes securities bought by the Canada and Quebec Pension Plans. (''Financial and non-financial business corporations.
<4'Bank of Canada plus Chartered Banks.
Source: Bank of Canada and Department of Finance.
October 16. 1968	COMMONS DEBATES
COMMONS DEBATES	October 16, 1968

[Stage Direction]
Monthly 1966 to 1968
End of period	Gold	U.S. dollars	Total
	(Millions of U.S. dc		>llars)
1,112.8	1,449.6	2,562.4February	1,076.5	1,471.1	2,547.61,085.6	1,424.2	2,509.81,096.0	1,373.1	2,469.11,060.7	1,351.5	2,412.21,024.2	1,317.6	2,341.8986.2	1,329.2	2,315.4August	996.7	1,284.3	2,281.0September	1,008.7	1,235.6	2,242.3October	1,020.5	1,202.7	2,223.2November	1,033.7	1,208.4	2,242.11,045.6	1,190.3	2,235.91967-January	1,055.9	1,182.3	2,238.2February	1,069.6	1,124.6	2,194.21,083.5	1,119.9	2,203.41,042.3	1,145.9	2,188.21,052.9	1,141.7	2,194.61,066.3	1,102.4	2,168.71,073.5	1,109.1	2,182.61,085.7	1,112.1	2,197.8September	1,099.3	1,121.5	2,220.8October	1,103.8	1,199.6	2,303.4November	1,110.0	1,166.9	2,276.91,014.9	1,252.9	2,267.81968-January	1,024.8	1,150.5	2,175.3February	1,026.2	1,463.8	2,490.0976.1	1,268.3	2,244.4976.1	1,439.5	2,415.6926.3	1,768.7	2,695.0926.3	1,647.7	2,574.0July 	926.3	1,588.3	2,514.6August	926.3	1,663.2	2,589.5863.1	1,671.0	2,534.1
Source : Department of Finance.
REFERENCE TABLE 39 MORTGAGE LOAN APPROVALS'1) 1962 to 1968
	Private Lending Institutions									
Conventional Mortgages	Total Private Lending	of which	Total PrivateNon- Residential	Residential	NHA	CMHC«)	PublicExisting'2)	I New	Banks	Life Cos.	Trust Cos., etc.'3)	1962-1964 Average	397 581 382 369 80 107 93 89 98 74 352 354	476	383 320 191 356 187 32 46 90 188 205 278 529	(Millions of dollars)	1965	2,552 1,618 2,124 501	3	900	991	313	2,207 3,065 2,211 2,8611966	6	1,158	1,388	513	1967	-	804	814	593	1967 IQ	253	800	1,071	737	2Q	210 202 142 127 143 501 614	15	180	306	59	5603Q	598	58	221	319	405	1,003 7254Q	534 490 656 658 1,741 2,338	75	220	239	191	1968 IQ	105	178	207	81	5712Q	88	261	307	84	74012 months ending: June 1967	82	237	339	90	748June 1968	73	711	957	910	2,651 2,784350	896	1,092	446	
'"?a.te,are,0°a Br<fs basis' i'e" the^ do not necessarily take account of cancellations or alterations of loans after initial approval "'Includes data on farm property.
<3>Includes loan and trust companies, Quebec saving banks, fraternal and mutual benefit societies.
<4>Includes student bousing.
Source: Central Mortgage and Housing Corporation.
October 16, 1968	COMMONS DEBATES

[Stage Direction]
CHANGES IN CONSUMER CREDIT OUTSTANDING 1962 to 1968
						12 months ending	Amount
1962	1963	1964	1965	1966	1967	May 1967) May 1968	Outstanding May 31, 1968
(Millions of dollars)
153	249	361	448	217	519	307	546	3,20944	73	161	96	53	-47	25	-9	1,155120	96	94	139	120	153	104	163	1,3694	1	1	1	-	1	-	2	1814	13	13	13	39	29	40	45	50627	33	55	67	38	10	24	-	755362	465	685	764	467	665	500	747	7,012
<'>Includes department stores, furniture and appliance dealers and the instalment credit of motor vehicle dealers, Soukce: Bank of Canada, Department of Insurance, Department of Finance and DBS.
COMMONS DEBATES	October 16, 1968

[Stage Direction]
SELECTED SOURCES OF FINANCING BY NON-FINANCIAL CORPORATE BUSINESS 1965 to 1968
-	1965	1966	1967	12 months ended	
				June 1967	June 1968
Changes in: Chartered bank loans in Canadian dollars*1*		655 258 318 53	(Mil 396 98 -213 61	ions of do: 704 -95 64 44	lars) 449 -58 -49 57	759 -56 180 41
Chartered bank loans to residents in foreign currencies						
Sales finance co. loans						
Other term loans						
Sub-total						
	1,284 46 1,031 336	342 60 877 535	717 38 716 356	399 109 762 325	924 -94 728 407
Net new issues of: Commercial paper and bankers' acceptances*2>
Bonds						
Stocks						
Sub-total						
	1,413 2,697	1,472 1,814	1,110 1,827	1,196 1,595	1,041 1,965
Total						
					
<*>Change in total business loans excluding provincially-guaranteed bank loans to public utilities, transportation and communications corporations. (*>For the first half of 1967 and 1968, bankers* acceptances are January to July,
Source: Bank of Canada.
October 16. 1968	COMMONS DEBATES

[Stage Direction]
(Millions of dollars par value)
Date	Retirements	Amount	New Bonds	Amount Delivered	Net Change in Amount Outstanding	Term of New Bonds	Yield to Maturity
1967							
January 2	CNR 21% Jan. 2, 1967	50	-50	51% Oct. 1, 1975	70	8 yrs. 8 mos.	5.7051% Aug. 1, 1980	30	13 yrs. 6 mos.	5.7151% Sept. 1, 1992	SO	25 yrs. 7 mos.	5.69150	+150	4% Apr. 1, 1967	170	41% Apr. 1, 1968	175	1 yr.	4.6641% Apr. 1, 1967	155	5% Oct. 1, 1973	200	6 yrs. 6 mos.	5.2151% May 1, 1990	125	23 yrs. 1 mo.	5.48325	500	+175	April 1	CNR 4J% Apr. 1, 1967	72	-72	April 15	5% Oct. 15, 1987(I)	3	-3	41% June 1, 1967	325	41% June 15, 1968	160	1 yr. 1 mo.	4.605% July 1, 1970	100	3 yrs. 1 mo.	5.0951% Dec. 1, 1974	100	7 yrs. 6 mos.	5.67360	+35	5% Oct. 1, 1968	20	1 yr. 2 mos.	5.4451% Apr. 1, 1969	70	1 yr. 8 mos.	5.566% Dec. 15, 1971	85	4 yrs. 41 mos.	6.06175	+175	3f% Oct. 1, 1967	350	41% Dec. 15, 1968	125	1 yr. 21 mos.	5.6141% Oct. 1, 1967	175	51% Dec. 15, 1969	175	2 yrs. 21 mos.	5.866% Apr. 1, 1971(2)	225	3 yrs. 6 mos.	6.00525	525	-	1358	COMMONS DEBATES	October 16, 1968October 15	5% Oct.115, 1987<'>	3December 1	41% Jan. 15, 1968	7751% Jan. 15, 1968	28105December 1	21% Sept. 1, 19740)	1621% Sept. 15, 1975<«	115% Oct. 15, 19870)	173200December 29	CNR 51% Dec. 15,1971	3CNR 51% Jan. 1, 1985	1CNR 5% Oct. 1, 1987	26Total	(Calendar 1967)	1,6141968	January 15	41% Jan. 15, 1968	30351% Jan. 15, 1968	97400Total	(Fiscal 1967-68)	1,964April 1	41% Apr. 1, 1968	17521% June 15, 1968	2441% June 15, 1968	255% Oct. 1, 1968	2641% Dec. 15, 1968	25275April 3	51% Aug. 1, 19800)	9April 15	5% Oct. 15, 19870)	1
61% Dee. 1, 1973«>
6% Feb. 15, 1970 6% Dec. 15, 1971
51% Apr. 1, 1969 7% Apr. 1, 1973
225 225	-3 +120 -200 -6
1,935	+321
250	
200	
450	+50
2,235	+271
60	
215<*	
275	-
	-9
	-1
6 yrs.
2	yrs. 1 mo.
3	yrs. 11 mos.
1 yr. 5 yrs.
6.35
6.20
6.44
7.03
7.30
October 16, 1968	COMMONS DEBATES
REFERENCE TABLE 42 (Continued)

[Stage Direction]
(Millions of dollars par value)
Date
May 15.
May 24. June 1...
June 15.
August 1.
Retirements
CNR 5% May 15,1968
2i% June 15, 1968 ih% June 15, 1968 5% Oct. 1, 1968
Total (Fiscal year 1968-69 to August 1)________
Amount
285
75
836
New Bonds
51% May 15, 1970 51% May 15, 1971 6% May 15, 1972
6f% June 1, 1973
61% June 1, 1988
61% July 1, 1969 7% Oct. 1, 1970 7% June 15, 1974
61% Dec. 15, 1969 61% Oct. 1, 1970 7% Apr. 1, 1973
Amount Delivered	Net Change in Amount Outstanding	Term of New Bonds	Yield to Maturity35	-56	2 yrs.	5.7536	3 yrs.	5.8737	4 yrs.	6.00108<«	+108	68«	+68	5 yrs. 7 days	6.8778(10)	+78	20 yrs.	6.9075	1 yr. i mo.	7.00275	2 yrs. 3) mos.	7.11250dD	6 yrs.	7.26600	+105	35	1 yr. ii mos.	6.65105	2 yrs. 2 mos.	6.75260d*	4 yrs. 8 mos.	7.00400	+400	1,529	+693	
«>U.S.-pay issue subject to partial redemption at par for the sinking fund on each interest payment date, commencing April 15, 1965, in a principal amount
°f ^"^Exchangeable on or before April 1, 1970 into equal par value 6% bonds due October 1, 1993.
<'>
Exchangeable on or before December 1, 1972 into equal par value 61% bonds due December 1, 1994.
<5i$100 million 7% bonds exchanged directly with Bank of Canada for bonds maturing in 1968.
<7>U.s! pay issue subject to partial redemption for sinking fund on prorated basis following partial retirement of issue on December 1, 1967.
<8)Payable in Italian Lire and placed directly with Italian Exchange Office.
^Payable in German Marks and offered in Europe through Deutsche Bank.
(lO)U.S. pay issue in principal amount U.S. $100 million, subject to delayed delivery contracts.
(u>$75 million 7% due 1974 exchanged directly with Bank of Canada for bonds maturing in 1968.
(i®$100 million 7% due 1973 exchanged directly with Bank of Canada for bonds maturing in 1968 and since cancelled.
Source: Department of Finance.
1360	COMMONS DEBATES	October 16, 1968
REFERENCE TABLE 43 SUMMARY OF BALANCE OF PAYMENTS 1963 to 1968
(Not seasonally adjusted)
1963	1964	1965	1966	1967	1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QMerchandise trade balance	+503	+701	+118	+224	+481	+10	(Mil -49	lions of c +223	ollars) +40	+98	+6	+86	+291	+236	+362Deficit on non-merchan-	dise transactions^)	-1,178	-1,270	-1,386	-1,513	-1,136	-431	-360	-222	-500	-464	-314	+90	-448	-508	-388Current account balance	-675	-569	-1,268	-1,289	-655	-421	-409	+1	-460	-366	-308	+176	-157	-272	-26Gold production available	for export	+154	+145	+138	+127	+112	+34	+29	+32	+32	+32	+28	+26	+26	+33	+29Capital movements-inflows (+) outflows (-): Long-term forms	+637	+820	+864	+1,061	+1,339	+465	+214	+239	+143	+277	+256	+301	+505	+95	+697Short-term forms	+30	-33	+423	-258	-778	-216	+49	-357	+266	+44	-30	-447	-345	-621	-80+146	+363	+157	-359	+18	-138	-117	-85	-19	-13	-54	+56	+29	-765	+620Increase (+) or decrease (-) in official holdings of gold and foreign exchange 	+60	+86	-11	-462	+34	-166	-181	-105	-10	-35	-37	+55	+51	-23	+355Net International Mone-	tary Fund position	+86	+277	+168	+103	-16	+28	+64	+20	-9	+22	-17	+1	-22	-471	+130Reciprocal swap facility with Federal Reserve System	___	_	_	_	_	_	_	-271	+135+146	+363	+157	-359	+18	-138	-117	-85	-19	-13	-54	+56	+29	-765	+620
(^Excluding gold production available for export.
Source: DBS Quarterly Estimates of the Canadian Balance of International Payments.
October 16, 1968	COMMONS DEBATES	1361

[Stage Direction]
INTERNATIONAL PAYMENTS: CAPITAL MOVEMENTS 1963 to 1968
(Not seasonally adjusted)
1963	1964	1965	1966	1967	1966	1967	1968	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QDirect investment in Canada	+280	+270	+535	+710	+620	(Milli + 151	ons of do +222	liars) +138	+164	+143	+175	+5	+190Direct investment abroad	-135	-95	-125	-5	-90	+80	-34	-30	-7	-25	-28	-85	+15Canadian securities:- Trade in outstanding bonds and debentures	+39	+77	+55	-104	-56	-52	-15	-10	-22	-10	-14	-53	-11Trade in outstanding common and preference stocks	-170	-98	-274	-136	+12	-34	-44	-53	-17	+30	+52	+15	+34New issues	+984	+1,100	+1,240	+ 1,465	+1,300	+303	+228	+317	+291	+274	+418	+408	+711Retirements	-404	-382	-390	-499	-338	-87	-131	-58	-131	-48	-101	-126	-119Foreign securities (total)	+22	-52	-85	-401	-418	-103	-93	-74	-70	-142	-132	-69	-119Loans and capital subscriptions by Government of Canada: Advances, etc	-18	-10	-14	-35	-38	-9	-17	-3	-3	-9	-23	-10	-8Repayments to Canada	+25	+10	+10	+24	+34	+1	+19	+11	+2	+ 1	+20	+2	+2Columbia River Treaty, net	-	+54	+32	+32	+44	-	+32	-	-	-	+44	-	-Long-term capital transactions not included elsewhere	+14	-54	-120	+10	+269	-11	-24	+39	+49	+87	+94	+8	+2Change in certain Canadian assets of foreigners: Canadian dollar deposits	+43	+28	+31	+10	+24	+21	+12	+48	-59	+7	+28	+7	-2Government of Canada demand liabilities 	+1	_	+2	+5	-4	+5	+8	-6	-7	-2	+ 11	-4	-3Canadian Treasury bills	-27	-16	+12	-15	+4	+2	-9	+15	+8	-17	-2	+23	+1Canadian commercial paper	-23	-11	+10	-	+ 11	+12	+5	-6	+5	+1	+11	+7	-17Canadian finance paper	+93	+196	-162	-4	-54	-55	+29	+7	-24	-55	+18	-61	-38Canadian finance company obligations not included elsewhere	+35	+52	+209	+154	+34	+44	+87	-17	+11	-31	+71	-7	-6Bank balances and other short-term funds abroad	-258	-528	+138	-601	-286	-317	-97	+332	+44	-311	-351	-126	+491362	COMMONS DEBATES	October 16, 1968All other transactions	Net capital movements excluding monetary items shown below	
Official monetary movements in the form of: Change in official holdings of gold and
foreign exchange	
Change in net International Monetary
Fund position	
Other special international financial assistance	
+166	+246	+183	+193	-507+667	+787	+1,287	+863	+561+60	+86	-11	-462	+34+86	+277	+168	+103	-16-	-	-	-	-
Sooece: DBS Quarterly Estimates of the Canadian Balance of International Payments.
-69	+231	-329	-8	-39	-131	-460	-64-118	+409	+321	+226	-146	+160	-526	+617-105	-10	-35	-37	+55	+51	-23	+355+20	-9	+22	-17	+1	-22	-471	+130-	-	-	-	-	-	-271	+135October 16, 1968	COMMONS DEBATES	1363

[Stage Direction]
1965 to 1968
(Not seasonally adjusted)
1966	1967	1968	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ	2QNew Issues: Government of Canada (incl. guaranteed)	28	32	20	4	10	(Milli 12	ons of do 6	liars) 3	4	4	9	4	255Provincial government (incl. guaranteed)	297	448	760	126	168	95	59	217	242	118	183	240	180Municipal government	84	177	163	60	52	5	60	56	6	52	49	46	33Corporations (incl. railroads)	807	751	312	341	124	187	99	30	31	93	158	109	233Total	1,216	1,408	1,255	531	354	299	224	306	283	267	399	399	701Retirements: Government of Canada (incl. guaranteed) 	85	203	95	54	80	43	26	3	63	29	11	29Provincial government (incl. guar-	31	65	61	24	15	13	13	22	24	5	10	21	18Municipal government	53	96	53	13	16	11	56	11	12	8	22	16	11Corporations (incl. railroads)	214	131	129	24	53	18	36	22	32	35	40	78	61Total	383	495	338	115	164	85	131	58	131	48	101	126	119Total Net Proceeds: Government of Canada (incl. guaranteed)	-57	-171	-75	-50	-70	-31	-20	-59	4	-20	-7	226Provincial government (incl. guar-	266	383	699	102	153	82	46	195	218	113	173	219	162Municipal government	31	81	110	47	36	-6	4	45	-6	44	27	30	22Corporations (incl. railroads)	593	620	183	317	71	169	63	8	-1	58	118	31	172Total	833	913	917	416	190	214	93	248	152	219	298	273	582
Soubce: DBS Sales and Purchases of Securities between Canada and Other Countries, Monthly, Cat. 67-002.
1364	COMMONS DEBATES	October 16, 1968

[Stage Direction]
CANADIAN CHARTERED BANKS' HEAD OFFICES AND BRANCHES IN CANADA NET CHANGES IN FOREIGN CURRENCY POSITIONS 1965 to 1968
(Not seasonally adjusted)
With U.S. residents:
Assets	
Liabilities	
Net.
Other non-residents:
Assets	
Liabilities	
Net.
Total non-residents:
Assets	
Liabilities	
Net claims (c).
With Canadian residents:
Assets (b)	
Liabilities (a)1	
(of which Swapped deposits).
Net.
Changes in banks' own net position (a)2.
1965	1966	1967	1966	1967	1968«>	IQ	to	1 3Q	4Q	IQ	1 2Q	1 3Q	1 4Q	IQ	1 2Q(Millions of dollars)	-207	208	273	-183	-69	165	295	-366	116	254	269	-224	205-727	-309	76	-156	-71	-78	-4	12	7	-103	160	-98	38520	517	197	- 27	2	243	299	-378	109	357	109	-126	167-441	-2	375	-54	-42	-42	136	3	165	-104	311	223	26505	48	188	-205	-28	-70	351	-123	215	21	75	48	197-946	-50	187	151	- 14	28	-215	126	-50	-125	236	175	-171-648	206	648	-237	-111	123	431	-363	281	150	580	-1	231-222	-261	264	-361	-99	-148	347	-111	222	-82	235	-50	238-426	467	384	124	-12	271	84	-252	59	232	345	49	-5276	84	-102	66	5	-11	24	-19	-73	-1	-9	-29	-22-107	401	364	180	63	208	-50	-189	-31	146	438	35	-90(-170)	(187)	(165)	(187)	(31)	(136)	(-167)	(-145)	(-11)	(88)	(233)	(-164)	(-161)383	-317	-466	-114	-58	-219	74	170	-42	-147	-447	-64	68-43	150	-82	10	-70	52	158	-82	17	85	-102	-15	63
(^Adjusted for variations in exchange rates.
<*Takes no account of changes in gold held by chartered banks, formerly treated as a U.S. asset.
Balance of payments effects:
(a)	1 + (a)2 with sign reversed, is major component of D.17.1, "bank balances and other short-term funds abroad'1
-((a)1 + (a)2]:
D.17.1:
(b)	is divided between D.17.5 and D.13, respectively short and long-term residual capital items.
(c)	with sign reversed is net balance of payments effect of banks' foreign currency operations.
Source: Department of Finance.
as follows:
i js21	-551 1	-282 1	-190 1	7 1	-260 1	-108 1	271 1	14 1	-231 1	-344 1	-20 11 138 1	-601 |	-323 1	-171 |	-16 |	-317 |	-97 1	332 |	44 |	-311 1	-351 |	-126 1
49
October 16, 1968	COMMONS DEBATES

[Stage Direction]
1965 to 1968
(Not seasonally adjusted)
Transactions with U.S. (excluding international financial agencies):
Current account deficit (excl. gold)..
Capital inflow from U.S	
transactions.
Other transactions:
rest of world.
and foreign exchange	
Change in Canada's position with the International Monetary Fund(1)	
1967
serve System. Total financing..
1965	1966	1967	IQ	2Q	3Q	4Q	IQ	2Q	3Q	4Q	IQ 1	2Q
					(Millions of dollars)							
-2,075 +437	-2,157 +1,059	-1,491 +336	-624 +533	-634 +270	-223 +40	-676 +216	-614 +383	-548 +49	+27 -241	-356 + 145	-484 -370	-310 +205-1,638	-1,098	-1,155	-91	-364	-183	-160	-231	-499	-211	-211	-854	-105+807	+868	+836	+203	+225	+224	+216	+248	+240	+149	+199	+212	+284+850 +138	-256 +127	+225 +112	-284 +34	-7 +29	-158 +32	+193 +32	-62 +32	+177 +28	+95 +26	+15 +26	-156 +33	+412 +29+11	+462	-34	+166	+181	+105	+10	+35	+37	-55	-51	+23	-355-168	-103	+16	-28	-64	-20	+9	-22	+17	-1	+22	+471	-130-	-	-	-	-	-	-	-	-	-	+271	-135+1,638	+1,098	+1,155	+91	+364	+183	+160	+231	+499	+214	+211	+854	+105
("Improvement (-) in Canadian position represents net provision of resources by Canada to the IMF. Source: DBS Quarterly Estimates of the Canadian Balance of International Payments.
13$6	COMMONS DEBATES	October 16, 1968

[Stage Direction]
1961 to 1968
	1961	1962	1963	1964	1965	1966	1967	1968	
								IQ	2Q
Increase in gold subscription (+)	(Millio	ns of U.S.	lollars) 47.5	Drawings by Canada (-)	-	-300.0	-	-	-	-	-	-426.0<*	-Repurchases (repayments of drawings) by Canada (+)	-	-	79.7	166.0	-	-	-	-	-Net Fund sales (+) or repurchases (-) of Canadian dollars to or from third countries	84.6	-50.3	-	99.0	183.4	47.6	-15.1	-7.3	121.0Fund sales of gold for Canadian dollars (-)	-25.0	-	-	-9.0	-27.5	-	-	-	-Reserve position at end of periodw	212.1	-138.2	-58.5	197.5	353.4	448.5	433.4	0.1	121.1
Note: Fund borrowing under the Genera] Arrangements to Borrow (GAB) does not affect the reserve position. (1)A negative figure indicates the amount by which the credit tranche position falls short of the quota. (^Includes the Fund's repayment of its 1965 borrowing from Canada ($35 million).
Source: IMF International Financial Statistics, monthly.
October 16, 1968	COMMONS DEBATES	1367
[Stage Direction]
October 16/ 1968


[Stage Direction]
Table of Contents
Page
Introduction	 1369
Highlights of the government's financial operations during 1967-68. 1369
Budgetary accounts	 1373
Revenue	 1374
Expenditure	 1383
Assets and liabilities as	at March 31, 1968	 1417
Summary	 1418
Liability accounts	 1418
Asset accounts	 1429
Net debt	 I443
The cash position	 I443
The public debt	 1446
Supplementary detailed	tables	 1452
October 16, 1968


[Stage Direction]
This Part of the Budget Papers presents in summary form a review of the accounts of the Government of Canada for the fiscal year 1967-68. The fiscal year of the government ends on March 31 but the books must remain open for some time after that date to record various adjusting entries.

[Stage Direction]
This section outlines the financial operations of the government in 1967-68 giving a brief summary of the budgetary and non-budgetary transactions, the unmatured debt transactions and the changes in the cash position and the debt position during the fiscal year. More detailed explanations are given in subsequent sections of this review.
The following table summarizes the budgetary and non-budgetary transactions for 1967-68 with comparative figures for 1966-67 and indicates how these transactions affected the government's cash balances.
[Stage Direction]
October 16, 1968

[Stage Direction]
(in millions of dollars)
Fiscal year ended March 31
SUMMARY OF BUDGETARY AND NoN-BuDGETARY
Transactions and Changes in Cash Position
(preliminary)
[Stage Direction]


Budgetary transactions-
Revenue-
Tax	
Non-tax	
Expenditure-
Defence	
Non-defence	
Deficit (-)	
Non-budgetary transactions (excluding unmatured debt transactions) Receipts and credits-
Net annuity, insurance and pension accounts receipts	
Repayment of advances to exchange fund account	
Canada pension plan account	
Investments in United States dollar securities issued by other
than the Government of Canada	
Increase in non-interest-bearing notes payable on demand.
Repayment of loans, investments and advances	
Other	
Disbursements and charges-
Canada pension plan investment fund	
Loans, investments and advances	
Other	
Net amount available from or required for ( -) non-budgetary transactions	
8,017	7,440
1,060	918
9,077	8,358
1,813	1,696
8,056	7,084
9,869	8,780
-792	
465	931
322	341
672	592
57	7
450	111
	37
449	437
a,/,is	2,456
665	581
1,476	1,564
69	420
2,210	2,665
-422
Overall cash requirement to be financed by increase in unmatured
debt or decrease in cash balances	 -587
Net increase in unmatured debt outstanding in hands of the
public	 788
711
Net increase in Receiver General bank balances
180
Note: In 1967-68 a change in practice was introduced whereby revenues arising from Royal Canadian Mounted Police expenditures were credited thereto. For purposes of comparison the 1966-67 figures have been adjusted.
Budgetary transactions
The budgetary revenue, expenditure and deficit as forecast in the budget speech of June 1, 1967, the revised figures as forecast on November 30, 1967 and the actual figures are shown in the following table:

[Stage Direction]
(in millions of dollars)
Budgetary Transactions for Fiscal Year 1967-68	Budget forecast June 1, 1967	Revised forecast November 30, 1967	Actual (preliminary)	Increase or decrease (-) compared with November 30, 1967 forecast	
				Amount	Per cent
	8,960 9,700	9,115 9,900	9,077 9,869	-38 -31	0.42 0.31
					
Deficit						
	740	785	792	7	
October 16, 1968
[Stage Direction]
Revenue
Budgetary revenue of the government amounted to $9,077 million for 1967-68. This was $38 million or about half of one per cent less than the revised figure of $9,115 million forecast on November 30, 1967 and $719 million or 9 per cent more than the total collected in 1966-67.
Tax revenue accounted for $577 million of the increase and non-tax revenue accounted for $142 million of the increase over 1966-67 receipts.
The yield from the income taxes was $470 million higher and from sales tax $88 million higher than in 1966-67.
Expenditure
Budgetary expenditure amounted to $9,869 million, $31 million or approximately one third of one per cent less than the revised figure of $9,900 million forecast on November 30, 1967 and $1,089 million or 12 per cent higher than expenditure in 1966-67.
Defence expenditure of $1,813 million was 18 per cent of total budgetary expenditure compared with $1,696 million or 19 per cent in 1966-67 and was again the largest category.
Civil or non-defence expenditure was $8,056 million compared with $7,084 million in 1966-67, an increase of $972 million. The main changes were increases of $222 million in fiscal, subsidy and other payments to provinces, $110 million in public debt charges, $71 million in the government's contributions to the provinces under the Hospital Insurance and Diagnostic Services Act and $51 million in the net operating loss of the agricultural stabilization board. Payments to provinces under the Canada assistance plan increased by $215 million in 1967-68, offset by a decrease of $137 million in respect of unemployment assistance. In addition to the above increases, expenditures of $106 million were made in respect of the new adult occupational training program for which there was no comparable expenditure in the previous fiscal year.
Deficit
On the basis of these preliminary figures, expenditures of $9,869 million exceeded revenues of $9,077 million resulting in a deficit of $792 million compared with a deficit of $785 million as forecast on November 30, 1967 and a deficit of $422 million in 1966-67.
Non-budgetary transactions (excluding unmatured debt transactions)
Non-budgetary transactions are those which increase or decrease the government's asset and liability accounts and do not enter into the calculation of the annual budgetary surplus or deficit.
In 1967-68 net receipts and credits of $2,415 million exceeded net disbursements and charges of $2,210 million, resulting in a net receipt of $205 million. In 1966-67 net disbursements and charges totalled $2,565 million and net receipts and credits totalled $2,456 million, resulting in a net requirement of $109 million.
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October 16, 1968
Old age security fund
Receipts by the fund during 1967-68 of $1,495 million exceeded payments of $1,388 million by $107 million. In 1966-67 receipts were $1,285 million and payments were $1,073 million.
The transactions in the fund during 1967-68 compared with those for 1966-67 were as follows:
Fiscal year ended March 31 1968	iQfi7
(preliminary)
(in millions of dollars)
Balance in fund at April 1			 429	217
Receipts-		
Sales tax			559
Personal income tax	
800	577Corporation income tax	
150	1491,924	1,502Disbursements-	Pension payments	
-1,388	-1,073Balance in fund at March 31	
536	429
Canada -pension plan account
Receipts during 1967-68 were $685 million and disbursements were $13 million. In 1966-67 receipts were $600 million and disbursements were $8 million.
The transactions in the account during 1967-68 compared with those in 1966-67 were as follows:
Fiscal year ended March 31
,	,1968	,	1967
(preliminary)
(in millions of dollars)
681	89
685	600
-13	-8
Balance at March 31	 1,353	681
Balance at April 1
Receipts	
Disbursements...
At March 31, 1968 the balance in the account consisted of an operating balance of $72 million on deposit with the government and provincial securities, purchased on instructions from the provinces, in the amount of $1,275 million and Government of Canada securities in the amount of $6 million recorded in the Canada pension plan investment fund.
Unmatured debt transactions
Unmatured debt transactions in 1967-68 reflected an increase of $788 million in unmatured debt outstanding in the hands of the public compared with an increase of $711 million in 1966-67.
Change in cash position
Receiver General bank balances in current deposits were $201 million more at March 31, 1968 than at March 31, 1967. This is the amount by which the increase of $788 million in outstanding unmatured debt plus the net receipt of $205 million from non-budgetary transactions exceeded the budgetary deficit of $792 million.
October 16, 1968
[Stage Direction]
Change in debt position
As a result of budgetary and non-budgetary transactions the gross liabilities increased by $2,586 million to $32,926 million at March 31, 1968, net recorded assets increased by $1,794 million to $16,169 million and net debt increased by $792 million to $16,757 million.
	Fiscal year ended March 31		
	1968		Increase or
	(preliminary)		decrease (- ]
	(in millions of dollars)		
Gross liabilities	30,340	2,586Less net recorded assets	14,375	1,794Net debt	15,965	792

[Stage Direction]
Total budgetary revenue was $9,077 million in 1967-68, budgetary expenditure was $9,869 million and the budgetary deficit was $792 million.
In 1967-68 a change in practice was introduced whereby revenues arising from Royal Canadian Mounted Police expenditures were credited thereto. This revenue totalled $31 million in 1967-68.
The figures shown in the following table for prior years have not been changed to reflect the effect of this new practice.

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Fiscal Years Ended March 31
__	Billions of Dollars

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1964	1965	1966	1967	1968*
* Preliminary
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October 16, 1968

[Stage Direction]
Budgetary Revenue, Expenditure and Deficit
(in millions of dollars)
Fiscal year ended March 31	Budgetary revenue	Budgetary expenditure	Deficit4,754.7	5,364.0	-609.35,289.8	5,702.9	-413.15,617.7	5,958.1	-340.45,729.6	6,520.6	-791.05,878.7	6,570.3	-691.66,253.2	6,872.4	-619.27,180.3	7,218.3	-38.07,695.8	7,734.8	-39.08,376.2	8,797.7	-421.51968 (preliminary)	9,076.6	9,869.0	-792.4
Revenue
Budgetary revenue in 1967-68 was $9,077 million, $719 million or 9 per cent over the total of $8,358 million received in 1966-67. Tax revenue at $8,017 million accounted for 88 per cent of the total revenue for the fiscal year and non-tax revenue at $1,060 million accounted for 12 per cent.
The more important items were increases of $376 million in personal income tax collections, $88 million in sales tax receipts, $77 million in corporation income taxes and $93 million in return on investments.
BUDGETARY REVENUE	BUDGETARY EXPENDITURE
BY MAJOR SOURCE	BY MAJOR FUNCTION
For Fiscal Year Ended March 31, 1968 Preliminary
|. Dost nof include payments out of old ago security fund.
2. Dots not include those payments mode to provincial ond municipal governments
for specific purposes.
October 16, 1968

[Stage Direction]
Budgetary Revenue by Major Sources (in millions of dollars)
	Fiscal year ended March 31				Increase	
Source	1968 (preliminary)	1967	or decrease (-)	Amount	Per cent	Amount	Per cent	Amount	Per centTax revenue- Income tax- Personal h)	2,849.6	31.4	2,473.8	29.6	375.8	15.2Corporation <*>	1,670.6	18.4	1,593.2	19.1	77.4	4.9On dividends, interest, etc., going abroad	220.5	2.4	203.6	2.4	16.9	8.3Excise taxes- Sales (1><*>	1,601.1	17.7	1,513.6	18.1	87.5	5.8Other	337.0	3.7	315.6	3.8	21.4	6.8Customs import duties	746.4	8.2	777.6	9.3	-31.2	-4.0Excise duties	488.6	5.4	461.0	5.5	27.6	6.0Estate tax	102.2	1.1	101.1	1.2	1.1	1.1Other taxes	0.3 8,016.3	88.3	0.2 7,439.7	89.0	0.1 576.6	50.0 7.8Non-tax revenue- Return on investments	612.3	6.8	519.1	6.2	93.2	18.0Post office-net postal revenue	281.6	3.1	253.3	3.0	28.3	11.2Other non-tax revenue	166.4	1.8	146.1	1.8	20.3	13.91,060.3	11.7	918.5	11.0	141.8	15.4Total budgetary revenue <8>	9,076.6	100.0	8,358.2	100.0	718.4	8.61967-68	1966-67
'*'Excluding credits to:
The old age security fund-
Personal income tax			
Corporation income tax			
Sales tax			
		
	1,494.6	1,285.6
<!1Net after deduction of refunds and drawbacks.
Solicitor General vote 15, Appropriation Act No. 3, 1967 gave authority to credit thereto revenue arising from services provided thereunder. For purposes of comparison the 1966-67 total has been adjusted.
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October 16, 1968

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Fiscal Years Ended March 31 Billions of Dollars

[Stage Direction]
m

TOTAL REVENUE FROM TAXES 88 %-

[Stage Direction]
1964	1965
* Preliminary
1966	1967	1968*
1968*

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Federal-provincial fiscal arrangements
Under fiscal arrangements, that became operative in 1962, the federal government withdrew in part from the field of direct taxation and left the vacated area to the provinces. The federal government offered to collect the provincial income taxes without charge provided that provincial personal income tax was expressed as a percentage of federal personal income tax otherwise payable and provincial corporation income tax applied to taxable income calculated in the same way as for federal income tax purposes. To allow for the imposition of the provincial income taxes, the Income Tax Act was amended to abate the federal income tax otherwise payable by individuals in all provinces by 24 per cent in 1966 and 28 per cent in 1967 and 1968. For 1966 the abatements of federal income tax otherwise payable in the Province of Quebec was 47 per cent; for 1967 and 1968, the corresponding abatement was 50 per cent. These higher abatements for Quebec are in compensation of the fact that the payment of youth allowances and the full cost of certain programs which are supported jointly by federal and provincial governments in the other provinces have been assumed by that province. For the year 1966 the federal corporation income tax rates were abated by 9 percentage points for taxable income earned in a province other than Quebec and by 10 percentage points for taxable income earned in Quebec. For 1967 and 1968 the corresponding abatement was 10 per cent for all provinces. The federal government has entered into tax-collection agreements under which it collects the provincial personal income taxes of all provinces except Quebec and the provincial corporation income taxes of all provinces except Ontario and Quebec.
October 16, 1968
[Stage Direction]
Under these collection agreements, payments are made monthly to each province based on an estimate of that province's tax revenue. When the actual amounts of assessed returns are established, usually in the month of December following the end of the fiscal year, adjustments are made with the provinces.
Under the present fiscal arrangements, the federal government agreed to abate its estate tax by 50 per cent in the fiscal years 1962-63 and 1963-64, and by 75 per cent thereafter, in any province that imposed its own succession duties. To a province that did not wish to re-enter the succession duty field the federal government agreed to pay 50 per cent of the federal estate tax revenue in 1962-63 and 1963-64 and 75 per cent thereafter. During 1962-63, Quebec and Ontario collected their own succession duties while the other provinces received a payment in lieu of imposing duties. Starting in 1963-64 British Columbia joined Ontario and Quebec in imposing its own succession duties. When the estate tax abatement was raised to 75 per cent in 1964-65, British Columbia increased its succession duty rates accordingly but Quebec and Ontario preferred to take in lieu of the extra abatement a payment equivalent to 25 per cent of the federal estate tax in those provinces. This arrangement also carried into 1965-66, 1966-67 and 1967-68.
Tax on personal income
In 1967-68 personal income tax was again the largest source of government revenue. Its yield (excluding the old age security tax) was $2,850 million or 31 per cent of all budgetary revenue compared with $2,474 million or 30 per cent in 1966-67. The increase of $376 million was due mainly to a higher level of personal incomes in 1967-68 and partly due to a temporary surtax of 3 per cent on the basic tax in excess of $200. This temporary surtax applied in respect of tax imposed on 1968 and 1969 income.
In addition to the federal revenue, $961 million was allocated to the provincial tax collection agreements account under the terms of federal-provincial fiscal arrangements compared with $697 million in 1966-67.
The tax on personal incomes levied under the Old Age Security Act and credited to the old age security fund was $800 million compared with $576 million in 1966-67. This increase of $224 million was due in part to higher levels of personal income in 1967-68 and in part to the fact that the maximum amount payable on account of this levy was raised from $120 to $240 per year effective January 1, 1967.
Corporation income tax
Corporation income tax was the second largest source of government revenue. The yield (excluding the old age security tax) was $1,671 million or 18 per cent of total budgetary revenue compared with $1,593 million or 19 per cent in 1966-67. The increase of $78 million was due mainly to the termination of the accelerated depreciation programs at the end of 1966 and early in 1967 and to the three year curtailment of capital cost allowances for certain classes of assets purchased between March 30, 1966 and April 1, 1967.
In addition to the federal revenue, $167 million was allocated to the provincial tax collection agreements account under terms of federal-provincial fiscal arrangements compared with $132 million in 1966-67.
The tax on incomes of corporations levied under the Old Age Security Act and credited to the old age security fund was $150 million, the same amount as in 1966-67.
[Stage Direction]
October 16, 1968
Taxes on dividends, interest, etc., going abroad
Revenue in this category was derived from taxes withheld from payments of dividends, interest, rents, royalties, alimony and income from estates and trusts paid to non-residents. Collections for 1967-68 were $221 million, an increase of $17 million or 8 per cent over the 1966-67 total.

[Stage Direction]
Fiscal Years Ended March 31 Millions of Dollars

[Stage Direction]
1964	65	66	67	68
Excise taxes
From a revenue standpoint the general sales tax was the most important tax levied under the Excise Tax Act. Receipts (excluding the old age security tax) were $1,601 million, $88 million or 6 per cent higher than 1966-67 receipts of $1,514 million. The increase was due in large part to an increase from 11 per cent to 12 per cent effective January 1, 1967, in the rate of the tax. The increase did not apply to building materials. Partially offsetting the revenue gain from this rate change was the exemption for drugs effective September 1, 1967 and the reduction of the rate of tax on production machinery and equipment to 6 per cent on April 1, 1967 and its elimination on June 2, 1967.
The rates of sales tax referred to above include a 3 per cent tax on sales levied under the Old Age Security Act. Revenue from this tax was $545 million compared with $560 million in 1966-67. Most of the decrease resulted from the elimination of the tax on production machinery and on drugs.
The yield from other excise taxes levied under the Excise Tax Act was $337 million, $21 million more than in 1966-67. The increase was due mainly to increased rates in the excise taxes on wines and tobacco and tobacco products.
Customs import duties
Receipts from this source were $746 million compared with $777 million in 1966-67, a decrease of $31 million.
October 16, 1968
[Stage Direction]
Excise duties
Excise duties are levied on alcoholic beverages (other than wines) and tobacco products. (Additional taxes on tobacco products were levied under the Excise Tax Act.) Net receipts in 1967-68 were $489 million compared with $461 million in 1966-67. The increase of $28 million was due mainly to increased rates of duty effective December 1, 1967.
Gross receipts of $301 million from duties on alcoholic beverages consisted of $181 million in respect of spirits and $120 million in respect of beer and were $28 million higher than collections of $272 million in 1966-67 of which $158 million was in respect of spirits and $114 million in respect of beer.
Gross receipts of $195 million from duties on tobacco products were $1 million less than collections of $196 million in 1966-67.
Refunds and drawbacks of $7 million resulted in net excise duty collections of $489 million in 1967-68. In 1966-67 refunds and drawbacks were also $7 million and net receipts were $461 million.
Estate tax
Revenue in this category was derived under the Estate Tax Act. Net receipts of $102 million were $1 million more than in 1966-67.
Other taxes
Revenue under this heading during the fiscal year was $300 thousand compared with $200 thousand in 1966-67.

[Stage Direction]
Non-tax revenue totalled $1,060 million compared with $918 million in 1966-67. The increase of $142 million was due mainly to increases of $93 million in return on investments and $28 million in post office revenue.
It is noted that Solicitor General vote 15, Appropriation Act No. 3, 1967, which covered administration, operation and maintenance costs of the Royal Canadian Mounted Police, gave authority to credit thereto all revenue arising from services provided thereunder. Consequently such revenue, which consists mainly of services and service fees, proceeds from sales, and privileges, licences and permits, is not reflected in the accounts as revenue. For purposes of comparison the 1966-67 figures have been amended accordingly.

[Stage Direction]
(in millions of dollars)
Non-Tax Revenue	Fiscal year ended March 31	Increase or decrease (-)	1968 (preliminary)	1967	Amount	Per centReturn on investments	612.3	519.1	93.2	18.0Post office-net postal revenue	281.6	253.3	28.3	11.2Services and service fees	58.9	48.8	10.1	20.7Privileges, licences and permits	41.6	38.8	2.8	7.2Proceeds from sales	18.5	21.0	-2.5	-11.9Refunds of previous years' expenditure	21.7	17.2	4.5	26.2Bullion and coinage	10.7	5.4	5.3	98.1Premium, discount and exchange	0.2	0.2	-100.0Other	15.0	14.9	0.1	2.01,060.3	918.5	141.8	15.4
October 16, 1968
Return on investments
These receipts, in an amount of $612 million, consisted of income derived from loans and advances made by the government and from investments by the government in productive or earning assets. In 1966-67 receipts were $519 million.

[Stage Direction]
(in millions of dollars)
Return on Investments	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Loans to, and investments in, Crown corporations- Atomic Energy of Canada Limited	0.8	0.6	0.2Bank of Canada-profits	177.0	150.6	26.4Canada Deposit Insurance Corporation	0.2	0.2Canadian Broadcasting Corporation	3.8	2.2	1.6Canadian Corporation for the 1967 World Exhibition....	9.9	3.5	6.4Canadian Dairy Commission	0.9	0.9Canadian National Railways	22.5	16.4	6.1Canadian Overseas Telecommunication Corporation....	2.5	2.5	Central Mortgage and Housing Corporation Interest on debentures	156.7	124.1	32.6Net profit	6.6	5.6	1.016S.S	129.7	SS.6Crown Assets Disposal Corporation	1.0	-1.0Eldorado Mining and Refining Limited	(!)	1.0	-1.0Export Credits Insurance Corporation	9.5	7.8	1.7Farm Credit Corporation	31.6	29.1	5.5National Capital Commission	3.8	3.8	National Harbours Board	1.4	1.7	-0.3Northern Canada Power Commission	3.8	3.1	0.7Northern Ontario Pipe Line Crown Corporation	0.7	0.7Polymer Corporation Limited	2.6	4.5	-1.9The St. Lawrence Seaway Authority	10.8	13.8	-3.0448.1	871.S	76.8Other loans and investments- United Kingdom	21.2	21.6	-0.4Other national governments	3.9	4.1	-0.2Provincial governments	0.6	0.8	-0.2Exchange fund account	55.2	60.6	-5.4Interest-bearing deposits with chartered banks	23.4	24.2	-0.8Municipal Development and Loan Board	12.7	5.9	6.8Securities investment account	17.0	3.7	13.3Soldier and general land settlement loans and veterans land act advances	13.0	10.6	2.4Investments in United States dollar securities issued by other than the Government of Canada	6.6	7.9	-1.3Miscellaneous	10.6	8.4	2.216 .2	147.8	16.4612.3	519.1	93.2
(*Less than $50,000.
October 16, 1988
[Stage Direction]
Receipts from Crown corporations at $448 million were $77 million more than in the previous year. The main changes were increases of $34 million in payments by the Central Mortgage and Housing Corporation and $26 million in the Bank of Canada profits paid to the government.
The yield from other loans and investments at $164 million was $16 million more than the 1966-67 total. The main changes were increases of $13 million in earnings of the securities investment account and $7 million in interest on loans to the Municipal Development and Loan Board and a decrease of $5 million in profits from the exchange fund account.
Post office revenue
Gross receipts from post office operations were $327 million but authorized disbursements from revenue for salaries and rent allowances, other allowances and commissions at semi-staff and revenue offices, commissions at sub-offices, transit charges on Canadian mail forwarded through and delivered in foreign countries, etc. in the amount of $45 million brought net revenue to $282 million. In 1966-67 gross revenue was $295 million, authorized disbursements were $42 million and net revenue was $253 million.
Net costs of operating the Post Office Department during 1967-68 (excluding the $45 million charged to revenue) were $302 million. As net revenue was $282 million there was a net operating deficit of $20 million. In 1966-67 net revenue

[Stage Direction]
(in millions of dollars)
Post Office Revenue	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Postage-			
In Canada	307.1	277.0	30.1From foreign countries	6.4	5.2	1.2Commission on money orders	9.4	9.2	0.2Rental of post office boxes	2.5	2.4	0.11.7	1.6	0.1S27.1	295.1,	SI. 7Less-	Salaries and allowances-	Revenue post offices	-11.9	-11.8	-0.1Semi-staff post offices	-21.7	-19.4	-2.3Sub post offices	-5.9	-5.5	-0.4Transit charges to or through foreign countries	-4.3	-3.8	-0.5Other	-1.7	-1.6	-0.1-1,5.5	-VIA	-S.4281.6	253.3	28.3
October 16, 1968
was $253 million, net operating costs were $268 million and the net operating deficit was $15 million. The higher receipts in 1967-68 resulted from increased postal rates and the increase in costs was due mainly to higher salary rates and to normal staff growth.
However, it should be noted that the total shown for post office revenue does not reflect any payment for the franking privilege covering parliamentary and departmental mail or for certain miscellaneous services provided for other government departments and agencies, nor does the total shown for operating expenses reflect any charges for premises occupied by the Post Office Department or for accounting and miscellaneous services provided by other departments.
Services and service fees
Revenue from this source was $59 million compared with $49 million in 1966-67.
The Department of Transport received $27 million including aircraft landing fees of $15 million, marine steamers earnings of $5 million and harbour dues and wharfage of $2 million; the Department of Agriculture received $9 million of which $5 million was for services in connection with the inspection, weighing, storage and elevation of grain and $2 million for race track supervision; the Department of Finance received $7 million mainly from numismatic revenue; the Department of National Health and Welfare received $5 million including a $3 million reimbursement by the provinces for treatment of Indians in federal government hospitals and the Department of Trade and Commerce received $2 million, mainly from weights and measures and electricity and gas inspection fees.
Privileges, licences and permits
Revenue from this category totalled $42 million for 1967-68, $3 million more than in the previous fiscal year.
The Department of Transport received $19 million mainly from rentals, concessions and radio licence fees; the Department of Indian Affairs and Northern Development received $8 million of which $2 million was from fees, leases and royalties in respect of oil, gas and gold and $1 million from transient motor vehicle licences; the Department of Consumer and Corporate Affairs received $5 million from patents, trade marks, charters, etc. and the Department of Public Works received $4 million for rental of public buildings and sites.
Proceeds from sales
Receipts of $19 million were $3 million less than the total for 1966-67.
The Department of Defence Production received $4 million mainly from the sale of surplus Crown assets, Central Mortgage and Housing Corporation received $3 million from the sales of properties and the Department of Public Printing and Stationery received $3 million mainly from the sales of publications.
October 16, 1968
[Stage Direction]
Refunds of previous years' expenditure
Refunds in 1967-68 of expenditures made in prior years were $22 million, $5 million more than in 1966-67.
The Department of National Defence received $7 million of which $2 million was due to cost audits and $2 million was due to adjustments on contracts with the United States government and the Department of Veterans Affairs received $7 million in refunds of veterans' pensions, allowances and re-establishment credits.
Bullion and coinage
Revenue of $11 million derived from the operation of the Royal Canadian Mint consisted mainly of a net gain on coinage. Small amounts were also obtained from gold refining charges, handling charges and gain on gold refining. In 1966-67 revenue from the operation of the Mint totalled $5 million.
Premium, discount and exchange
Premium, discount and exchange resulted in a net expenditure of $615 thousand in 1967-68 compared with a net revenue of $242 thousand in 1966-67.
Other non-tax revenue
Other non-tax revenue of $15 million was approximately the same amount as in 1966-67.

[Stage Direction]
Budgetary expenditure amounted to $9,869 million for 1967-68, $1,089 million or 12 per cent higher than in 1966-67.

[Stage Direction]
Fiscal Years Ended March 31 Billions of Dollars
- 10


[Stage Direction]
1964	1965	1966	1967	1968 *	1968*
I. Does not include those payments made to provincial and municipal governments for specified purposes
[DOT]	[DOT]"	*[DOT] I-*	'«*<!*««iwd [DOT].		 ,h. „„ i„ *h,Ck ,h.y w„. p=iJ.


[Stage Direction]
October 16. 1968

[Stage Direction]
Statement of Budgetary Expenditure by' Departments
(in millions of dollars)
-	Fiscal year ended March 31				Increase or decrease (-)	
	1968 (preliminary)		1967			
Amount	Per cent	Amount	Per cent	Amount	Per centDefence expenditure- National Defence	
Defence Production!1)	
Industry*2).	1,753.5 26.0 33.5	17.8 0.3 0.3	1,640.4 24.9 30.6	18.7 0.3 0.3	113.1 1.1 2.9	6.9 4.4 9.5Non-defence expenditure- Agriculture	
Atomic Energy	_.	
Canadian Broadcasting Corporation.. Central Mortgage and Housing Corporation	
Dominion Bureau of Statistics	
Energy, Mines and Resources	
External Affairs	
Finance	
Fisheries	
Forestry and Rural Development... . Indian Affairs and Northern Development	
Industry	
Justice	
Labour..	
Legislation	[DOT].[DOT][DOT][DOT][DOT]:	
Manpower and Immigration	
National Health and Welfare	
National Research Council including the Medical Research Council	
National Revenue	
Post Office	
Public Works	
Secretary of State	
Solicitor General	
Trade and Commerce	
Transport	
Treasury Board	
Unemployment Insurance Commission Veterans Affairs	
All Other Departments	1,813.0	18.4	1,695.9	19.3	117.1	6.9277.1 69.3 143.3 23.1 22.5 136.5 215.7 2,148.1 51.7 81.1 231.4 84.7 15.4 10.9 18.3 421.6 1,488.3 121.7 115.1 301.8 308.6 189.9 153.5 81.4 606.9 158.6 107.1 400.8 71.6	2.8 0.7 1.4 0.2 0.2 1.4 2.2 21.8 0.5 0.8 2.3 0.9 0.2 0.1 0.2 4.3 15.1 1.2 1.2 3.1 3.1 1.9 1.6 0.8 6.1 1.6 1.1 4.1 0.7	230.7 60.2 115.2 20.1 26.6 130.2 230.5 1,836.0 41.5 66.5 197.4 47.9 12.2 24.9 17.8 320.4 1,315.9 94.7 105.9 268.5 294.4 133.8 144.3 73.5 568.2 153.4 106.1 390.8 56.2	2.6 0.7 1.3 0.2 0.3 1.5 2.6 20.9 0.5 0.8 2.3 0.5 0.1 0.3 0.2 3.7 15.0 1.1 1.2 3.1 3.4 1.5 1.6 0.8 6.5 1.7 1.2 4.5 0.6	46.4 9.1 28.1 3.0 -4.1 6.3 -14.8 312.1 10.2 14.6 34.0 36.8 3.2 -14.0 0.5 101.2 172.4 27.0 9.2 33.3 14.2 56.1 9.2 7.9 38.7 5.2 1.0 10.0 15.4	20.1 15.1 24.4 14.9 -15.4 4.8 -6.4 17.0 24.6 22.0 17.2 76.8 26.2 -56.2 2.8 31.6 13.1 28.5 8.7 12.4 4.8 41.9 6.4 10.7 6.8 3.4 0.9 2.6 27.4Total budgetary expenditure <3>.	8,056.0	81.6	7,083.8	80.7	972.2	13.79,869.0	100.0	8,779.7	100.0	1,089.3	12.4
("Does not include non-defence expenditure of $9.5 million which is included in "All Other Departmen lb .
<*>Does not include $84.7 million in non-defence expenditure.
<*)Solicitor General vote 15, Appropriation Act No. 3, 1967 gave authority to credit thereto revenue arising from services provided thereunder. For purposes of comparison 1966-67 figures have been adjusted.

[Stage Direction]
Expenditures of the Department of National Defence and defence expenditures of the Department of Defence Production and the Department of Industry are again the largest category of government expenditure. The total of $1,813 million for 1967-68 was 18 per cent of the aggregate budgetary expenditure of the government for the year and was $117 million more than the total for 1966-67 when it was 19 per cent of total expenditure.
October 16, 1968

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Fiscal Years Ended March 31
1964	65	66	67	68*	1964	65	66	67	68*
Preliminary
1.	The unshaded areas of the columns in the chart for health, welfare and social security represent pension payments out of old age security fund not charged to budgetary expenditure in the year in which they were paid.
2.	Does not include those payments made to provincial and municipal governments for specific purposes.
National Defence
Expenditures of the Department of National Defence were $1,754 million compared with $1,640 million for 1966-67, an increase of $113 million.
Expenditures of $1,528 million for defence services included $1,237 million for operation and maintenance, $278 million for construction or acquisition of buildings, works, land and major equipment and $13 million for development. In 1966-67 expenditures of $1,435 million for defence services included $1,183 million for operation and maintenance, $235 million for construction or acquisition and $17 million for development.
Expenditures for pensions and other benefits totalled $149 million and included $131 million in respect of the Canadian forces superannuation account, $8 million for the government's contribution as an employer to the Canada pension plan and the Quebec pension plan and $9 million in payments under Parts I-IV of the Defence Services Pension Continuation Act. In 1966-67 expenditures totalled $135 million of which $115 million was in respect of the superannuation account, $10 million for the government's contribution as an employer to the Canada pension plan and the Quebec pension plan and $9 million for payments under Parts I-IV of the Defence Services Pension Continuation Act.
The government's contribution to the Canadian forces superannuation account, of an amount equal to If times the contributions of the permanent services personnel, was $58 million compared with $43 million in 1966-67. An amount of $73 million, equal to one fifth of the actuarial deficiency arising out of pay increases was also charged to budgetary expenditure in 1967-68.
Defence research costs of $50 million reflected an increase of $6 million over the 1966-67 total.
1386

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(in millions of dollars)
October 16, 1968
Defence Expenditure
Department of National Defence-
Defence services-
Operation and maintenance	
Construction or acquisition of buildings, works, land
and major equipment	
Development	
Other	
Pensions and other benefits-
Canadian forces superannuation account-
Government's contribution	
Amortization of deferred charges....
plan.
Pension Continuation Act. Other	
Defence research	
Mutual aid to NATO countries inclu towards military costs of NATO. Defence Construction (1951) Limited. Administration and general	
Department of Defence Production111- _	_
Canada Emergency Measures Organization.
Canadian Commercial Corporation	
Canadian Arsenals Limited	
Administration and general	
Department of Industry <'>- Technological capability.
capacity and qualified sources.
Fiscal year ended March 31		Increase
1968 (preliminary)	1967	decrease (-)1,237.4	1,182.5	54.9277.5	235.1	42.413.0	17.5	-4.50.3	0.2	0.11,528.2	1,485.3	92.958.4	42.6	15.872.6	72.6	8.1	9.9	-1.89.3	9.1	0.20.3	0.3	U8.7	184.5	14-250.4	44.2	6.218.0	18.7	-0.72.2	2.2	6.0	5.5	0.51,753.5	1,640.4	113.18.0	9.2	-1.22.0	2.00.4	1.3	-0.915.6	14.4	1.226.0	24.9	1.122.9	22.6	0.310.6	8.0	2.6SS.5	SO.6	2.91,813.0	1,695.9	117.1<*>Does not include non-defence expenditure of $9.5 million which is included in "All Other Departments".	.	.	, ,	...
(* Does not include $84.7 million m non-defence expenditure.
Mutual aid to NATO countries including contributions towards military costs of NATO at $18 million were $1 million less than in 1966-67.
Defence Production
Defence expenditures of the Department of Defence Production including those for the Canada Emergency Measures Organization, the Canadian Commercial Corporation and the Canadian Arsenals Limited totalled $26 million compared with $25 million in 1966-67.	.	.
Payments to assist defence contractors with defence plant modernization and in connection with the establishment of production capacity and qualified
October 16, 1968
[Stage Direction]
sources for production of component parts and materials, which in previous years were included under expenditures of this department, are now included in defence expenditures of the Department of Industry. Previous year's figures have been adjusted for purposes of comparison.
Canada Emergency Measures Organization
Expenditures of the Canada Emergency Measures Organization at $8 million were $1 million less than in the previous fiscal year.
Canadian Commercial Corporation
Payments to the Department of Defence Production for administrative services in respect of this corporation totalled $2 million in 1967-68. There were no expenditures in the previous year.
Industry
Defence expenditures of the Department of Industry totalled $34 million in 1967-68, an increase of $3 million over the previous year's total.
Outlays of $23 million in connection with the government program instituted in 1959-60 of supporting selected defence development programs in order to sustain technological capability in Canadian industry were the same as the previous year s total and payments of $11 million to assist defence manufacturers \vi111 d('tence plant modernization and establishment of production capacity and qualified sources, which in previous years were included under defence expenditures of the Department of Defence Production, reflected an increase of $3 million during 1967-68. Previous year's figures have been amended for purposes of comparison.
Cash outlays for defence
In addition to these budgetary expenditures for defence, there are other cash outlays which must be considered in arriving at the cost of Canada's defence program.
Under authority of the Department of National Defence vote 48, Appropriation Act No. 2, 1966, as amended, an account which has been named "surplus Crown assets" is to be credited with: (a) all revenues received during the current and subsequent fiscal years from the sale of surplus materials, supplies and equipment; and (b) revenues received during the current and subsequent fiscal years from the sale during the current year of surplus buildings, works and land not exceeding an aggregate amount of $10 million. Expenditures are subject to the approval of Treasury Board for any purposes of the Department of National Defence. During 1967-68 proceeds from sales amounted to $9 million and expenditures were $2 million, resulting in a balance in the account of $31 million.
The Department of Defence Production also makes cash disbursements tor the procurement of materials for use in the manufacture of defence equipment which are not recorded as budgetary expenditures. For purposes of accounting and control, these amounts are charged to the defence production revolving fund and are treated as assets on the books of the government until they are charged to the Department of National Defence or sold to defence contractors for use in the manufacture of defence equipment. During 1967-68 purchases of $35 million exceeded proceeds from sales of $30 million resulting in a balance of $39 million as at March 31, 1968.
29180-88a
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October 16, 1988

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(in millions of dollars)
Cash Outlays for Defence	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Budgetary expenditures-	1,753.5 26.0 33.5 1,813.0 -6.8 5.0 -1.8	1,640.4 24.9 30.6 1,695.9 -15.2 11.4 -3.8	113.1 1.1 2.9 117.1 8.4 -6.4 2.0
			
			
Disbursements for-			
			
Net cash outlays for defence				
	1,811.2	1,692.1	119.1
0>Does not include $9.5 million in non-defence expenditure which is included in "All Other Departmeuia .
<2^Does not include $84.7 million in non-defence expenditure.

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Agriculture
Expenditures of the Department of Agriculture amounted to $277 million, an increase of $46 million over the total for 1966-67.
Outlays for production and marketing were $177 million compared with $139 million in 1966-67. The 1967-68 net operating loss of the agricultural stabilization board at $140 million was $51 million higher than the 1966-67 operating loss of $89 million, due mainly to payments for stabilization of prices in respect of milk and milk products; the 1967-68 net operating loss of the agricultural products board at $1 million was $4 million lower than the 1966-67 net operating loss of $5 million; and outlays of $8 million in respect of plant and plant products were $12 million lower than 1966-67 outlays of $20 million.

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(in millions of dollars)
Agriculture	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Production and marketing- Agricultural stabilization board-net operating loss	139.7 21.6	88.7 19.8	51.0 1.81.4	5.7	-4.38.5	20.3	-11.8Contributions to provinces under the Crop Insurance Act	2.6 3.2	1.4 2.9	1.2 0.3177.0 39.7	138.8 35.4	38.2 4.3Land rehabilitation, irrigation and water storage projects....	21.5 18.6	25.0 16.1	-3.5 2.59.7	7.8	1.93.8	2.6	1.20.3	0)	0.36.5	5.0	1.5
277.1	230.7	46.4
<D Less than $50,000
October 16, 1968
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Expenditures for research were $40 million compared with $35 million in 1966-67, for land rehabilitation, irrigation and water storage projects $22 million compared with $25 million, for health of animals $19 million compared with $16 million and for the Board of Grain Commissioners $10 million compared with $8 million.
Atomic Energy
Expenditures by the government in respect of Atomic Energy of Canada Limited and the Atomic Energy Control Board amounted to $69 million compared with $60 million in 1966-67.
Atomic Energy of Canada Limited received $66 million in respect of its research program, of which $57 million was for operation and maintenance and $9 million for construction or acquisition of buildings, works, land and equipment. In 1966-67 the company received $58 million of which $48 million was for operation and maintenance and $10 million for construction or acquisition.
The Atomic Energy Control Board received $3 million, approximately $1 million more than in the previous fiscal year, mainly for grants for researches and investigations.
In addition, loans in the amount of $33 million were made to Atomic Energy of Canada Limited.

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(in millions of dollars)
Atomic Energy	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Atomic Energy of Canada Limited- Research program- Current operation and maintenance	56.9	47.7	9.2Construction or acquisition of buildings, works, land and equipment	9.6	10.3	-0.7Atomic Energy Control Board-	66.5	58.0	8.5Grants for researches and investigations with respect to atomic energy	2.5	2.0	0 5Administration	0.3	0.2	0.12.8	S.g	0.669.3	60.2	9.1
Canadian Broadcasting Corporation
Payments of $143 million by the government to the Canadian Broadcasting Corporation and charged to budgetary expenditure were $28 million more than the total of $115 million in 1966-67 due in part to special Centennial and EXPO 67 activities which totalled $11 million in 1967-68 compared with $5 million in 1966-67.
Grants for net operating requirements in respect of the national broadcasting service were $140 million, $27 million more than in the previous fiscal year.
In addition, loans to the corporation for capital expenditure amounted to $21 million in 1967-68 and repayments of loans were $3 million.
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October 16, 1968

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(in millions of dollars)
Canadian Broadcasting Corporation	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Grants in respect of the national broadcasting service- Net operating requirements	139.5	112.4	27.1International broadcasting service	3.8	2.8	1.0143.3	115.2	28.1
Central Mortgage and Housing Corporation
Budgetary expenditure of the government in respect of the Central Mortgage and Housing Corporation at $23 million was $3 million more than in 1966-67.
Payments of $10 million to provinces or municipalities for urban renewal were $2 million more than in 1966-67.
Loans in the amount of $8 million, originally made to municipalities and municipal sewerage corporations, were forgiven by Central Mortgage and Housing Corporation pursuant to section 36G of the National Housing Act, the same amount as in 1966-67.
In addition, loans in the amount of $767 million were made to the corporation in 1967-68 and repayments by the corporation were $133 million.

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(in millions of dollars)
Central Mortgage and Housing Corporation	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)9.7	7.9	1.87.9	7.9	2.4	2.1	0.33.1	2.2	0.9
23.1	20.1	3.0
Dominion Bureau of Statistics
Expenditures of the Dominion Bureau of Statistics totalled $23 million in 1967-68 compared with $27 million in the previous fiscal year.
Administration and operation expenditures at $23 million were $5 million higher than in 1966-67 but this increase was more than offset by the fact that there were no expenditures in 1967-68 for the 1966 Quinquennial Census which were $9 million in 1966-67.
October 16, 1968
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TABLE 15 (in millions of dollars)
Dominion Bureau or Statistics	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Administration and operation	22.5	18.0	4.51966 Quinquennial Census of Canada	8.5	-8.51961 Decennial Census of Canada	0.1	-0.122.5	26.6	-4.1
Energy, Mines and Resources
Expenditures of the Department of Energy, Mines and Resources including the Dominion Coal Board and the National Energy Board were $137 million compared with $130 million in 1966-67.
The increase was due mainly to outlays of $20 million in respect of research and investigations on water resources compared with $15 million in 1966-67 and $20 million in respect of marine surveys and research compared with $16 million in the previous fiscal year.

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(in millions of dollars)
Energy, Mines and Resources	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Dominion coal board	33.6	38.0	-4.4Research and investigations on water resources	20.2	15.0	5.2Marine surveys and research	20.3	16.1	4.2Emergency gold mining assistance	15.2	15.0	0.2Field and air surveys, mapping and aeronautical charting...	10.1	8.7	1.4Geological research	9.4	9.8	-0.4Mining and metallurgical investigations and research	7.6	6.8	0.8Research in astronomy and geophysics	5.4	5.4	Contributions to provinces to assist in the development of	roads leading to resources	2.7	4.5	-1.8Subventions pursuant to the Atlantic Provinces Power	Development Act in respect of electric power generated	from eastern coal	2.4	2.8	-0.4Polar continental shelf	1.6	1.9	-0.3National energy board	1.6	1.1	0.5Geographical surveys and research	1.1	1.1	Administration and general	5.3	4.0	1.3136.5	130.2	6.31392	COMMONS DEBATES	October 16, 1968
External Affairs
Expenditures of the Department of External Affairs amounted to $216 million for 1967-68, $15 million less than the total for the previous fiscal year.
Expenditures of the external aid office were $135 million compared with $160 million in 1966-67. The decrease was due mainly to a decrease of $21 million in outlays under the international food aid program and to the fact that there was no expenditure in 1967-68 comparable to the $9 million in 1966-67 for forgiveness of the payment of principal re the purchase of wheat and flour by India.	_	_
Assessments for membership in international commissions and organizations were $13 million compared with $12 million in 1966-67, costs for construction, acquisition or improvement of buildings, works, land, equipment and furnishings were $6 million compared with $3 million and administration, operation, maintenance and general costs were $42 million compared with $36 million.

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(in millions of dollars)
External Affairs	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)External aid office- Economic, technical, educational and other assistance- International food aid program	76.3	97.0	-20.7International development assistance	50.0	48.5	1.5Contribution to the Indus Basin development fund..	5.0	3.0	2.0Other	0.7	0.1	0.6Forgiveness of payment of principal re purchase of wheat and flour by India	9.4	-9.4Administration	2.8	1.7	1.1lSJf.8	159.7	-24.9Contributions, grants and payments to international commissions and organizations- United nations and its agencies	15.3	14.0	1.3Miscellaneous grants and payments	3.7	5.3	-1.6Other international commissions and organizations	0.1	0.1	-0.1Commonwealth organizations	(i)	0.1	19.1	19.5	-0.4Assessments for membership in international commissions and organizations- United nations and its agencies	9.9	9.3	0.6Other international commissions and organizations	2.7	2.1	0.6Commonwealth organizations	0.3	0.3	1.212.9	11.7	Construction, acquisition or improvement of buildings, works, land, equipment and furnishings	6.5	3.1	3.4International joint commission	0.4	0.3	0.1Administration, operation, maintenance and general	42.0	36.2	5.8215.7	230.5	-14.8
(1>Less than $50,000.
Finance
Expenditures of the Department of Finance were $2,148 million, $312 million more than the previous year's total of $1,836 million, due mainly to increases of $110 million in public debt charges and $222 million in payments to provinces and a decrease of $25 million in forgiveness of indebtedness in respect of the municipal development and loan board.
Oclober 16. 1968

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(in millions of dollars)
Finance	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Public debt charges	1,300.8	1,190.5	110.3Fiscal, subsidy and other payments to provinces	737.5	515.5	222.0Grants to municipalities and provinces in lieu of taxes on federal property	41.5	37.6	3.9Office of the Comptroller of the Treasury	32.1	29.3	2.8Forgiveness of indebtedness-municipal development and loan board	16.7	41.6	-24.9Royal Canadian Mint	4.0	3.2	0.8Administration and general	15.5	18.3	-2.82,148.1	1,836.0	312.1
Public debt charges
Public debt charges are again the third largest item of budgetary expenditure, exceeded only by those for defence and those for health, welfare and social security.
Public debt charges consist of interest on the public debt, the annual amortization of bond discounts and commissions, the cost of issuing new loans and other costs incurred in servicing the public debt. These charges were $1,301 million for 1967-68 or 13 per cent of all budgetary expenditure compared with $1,191 million or 14 per cent for 1966-67.
Interest on public debt totalled $1,270 million of which $981 million was in respect of unmatured debt and $289 million in respect of other liabilities. In 1966-67 total interest was $1,156 million of which $902 million was for unmatured debt and $254 million for other liabilities.
The increase of $79 million in interest on unmatured debt reflected higher interest rates and an increase in unmatured debt. The increase in interest on other liabilities was due mainly to increases of $13 million in respect of the public service superannuation account and $13 million in respect of the Canadian forces superannuation account.
Other public debt charges at $31 million were $4 million less than in 1966-67.
When considering the magnitude of these public debt charges and the burden they place upon the public treasury, it must be borne in mind that a substantial portion of the debt is attributable to, or is invested in, productive or earning assets. Therefore, in calculating the net burden of the government's annual interest charges, the income derived from loans, investments and other productive assets must be taken into account. This income totalled $612 million for 1967-68 as shown in the non-tax revenue section under the heading "return on investments". This amount deducted from the gross total of $1,270 million for interest as shown in the table leaves a net amount of $658 million compared with a net of $637 million in 1966-67. Measured as a percentage of the net debt the burden of the net annual interest charges was 3.92 per cent in 1967-68 compared with 3.99 per cent in 1966-67.
1394
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October 16, 1968

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(in millions of dollars)
Interest and Other Public Debt Charges	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Interest on public debt- Unmatured debt including treasury bills- Payable in Canada	967.9	885.6	82.3Payable in New York	12.6	15.9	-3.3980.5	901.5	79.0Other liabilities-	246.4	27.4Annuity, insurance and pension accounts	273.8	Deposit and trust accounts	4.6	3.8	0.8Refundable portion of corporation income tax	11.1	4.4	6.7S89.5	254.6	S4-9Total interest on public debt	1,270.0	1,156.1	113.9Other public debt charges-	26.3	29.8	-3.5Annual amortization of bond discounts and commissions.	Cost of issuing new loans	2.9	2.6	0.3Servicing of public debt	1.6	2.0	-0.4SO. 8	84-4	-S.61,300.8	1,190.5	110.3

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(in millions of dollars)
Net Burden or Annual Interest Charges	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
	1,270.0 -612.3	1,156.1 -519.1	113.9 -93.2
			
			
	657.7	637.0	20.7
			
	3.92	3.99	
			
Fiscal, subsidy and other payments to provinces
Payments to provinces in the amount of $737 million were $222 million more than in 1966-67.
However, in addition to the above payments, $1,128 million in provincial income taxes collected by the federal government on behalf of the provinces has been allocated to the provincial tax collection agreements account under the terms of the Federal-Provincial Fiscal Arrangements Act. A more detailed explanation of these arrangements is given in the tax revenue section of this Part.
October 16, 1968

[Stage Direction]
(in millions of dollars)
Fiscal, Subsidy and Other Payments to Provinces	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Payments under the Federal-Provincial Fiscal Arrangements Act 	563.6	423.2	140.4Payments under the Established Programs (Interim Arrangements) Act<"	153.0	57.7	95.3Statutory subsidies	31.7	23.6	8.1Payments under the Federal-Provincial Tax-Sharing Arrangements Act	1.3	9.1	-7.8Transfer of certain public utility tax receipts	6.7	6.0	0.7Federal-Provincial Fiscal Revision Act (youth allowances) l"	18.8 Cr.	4.1 Cr.	-14.7737.5	515.5	222.0
(''Gross prior to recovery of an excess abatement under the Federal-Provincial Fiscal Revision Act (youth allowances) to the Province of Quebec.
(''Payments made to the Province of Quebec in respect of opting out agreements.
("Recovered from payments to the Province of Quebec under the Federal-Provincial Fiscal Arrangements Act.
A summary of payments, by provinces, during 1967-68 is given in the following table:
TABLE 22 (in millions of dollars)
Fiscal year ended March 31, 1968 (preliminary)
Fiscal, Subsidy and Other Payments to Provinces	Payments under fiscal arrange- ments	Payments under Interim Arrange- ments Act	Statutory subsidies	Payments under the Federal-Provincial Fiscal Revision Act (youth allowances)	Transfer of certain public utility tax receipts	Payments under Federal- Provincial Tax- Sharing Arrange- ments Act	TotalNewfoundland	66.1	9.7	0.4	0.1	76.3Nova Scotia	77.6	2.1	0.6	0.2	80.5Prince Edward Island...	13.8	0.7	0.1	0)	14.6New Brunswick	63.5	1.7	0)	0.2	65.4Quebec	("243.8	153.0	4.0	("18.8 Cr.	0.7	0.3	383.0Ontario	20.6	4.6	1.6	26.8Manitoba	44.9	2.1	0.3	0.2	47.5Saskatchewan	24.9	2.1	(D	0.3	27.3Alberta	8.4	3.0	2.9	14.3British Columbia	1.7	0.1	1.8563.6	153.0	31.7	18.8 Cr.	6.7	1.3	737.5
("Less than $50,000.
("Gross prior to recovery of the excess tax abatement of $18.8 million under the Federal-Provincial Fiscal Revision Act (youth allowances).
("Recovered from payments under the Federal-Provincial Fiscal Arrangements Act.
Grants to municipalities
Payments to municipalities and provinces in lieu of taxes on federal property amounted to $42 million compared with $38 million in 1966-67.
1396
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October 16, 1968
Forgiveness of indebtedness, the municipal development and loan board
Under the Municipal Development and Loan Act, advances are made to the municipal development and loan board to provide financial assistance byway of loans to municipalities to augment or accelerate capital works programs. The act also provides that the board shall, under certain conditions, forgive payment by the municipality of 25 per cent of the principal amount of the loan. During 1967-68 payments forgiven amounted to $17 million compared with $42 million in the previous year.
Fisheries
Expenditures of the Department of Fisheries totalled $52 million, an increase of $10 million over the 1966-67 total, due to increases of $7 million in respect of fisheries management and development and $3 million in respect of the fisheries research board.
TABLE 23 (in millions of dollars)
Fisheries	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Fisheries management and development- Conservation and protection services	9.4	9.0	0.4Grants, contributions and subsidies	8.5	3.7	4.8Resource development service	6.3	5.3	1.0Industrial development service	3.6	3.5	0.1Inspection service	3.1	2.7	0.4Canadian share of the expenses of international commissions 	1.3	1.2	0.1Other	2.8	2.7	0.1S5.0	28.1	6.9Fisheries Research Board of Canada	14.6	11.5	3.1Administration and general	2.1	1.9	0.251.7	41.5	10.2
Forestry and Rural Development
Expenditures of the Department of Forestry and Rural Development totalled $81 million compared with $67 million in the previous fiscal year.
The increase was due mainly to payments of $27 million to provinces in respect of projects and programs under the Agricultural and Rural Development Act which were $9 million more than comparable payments of $18 million in 1966-67 in respect of the Agricultural Rehabilitation and Development Act and $6 million in respect of progress payments for rural economic development for which there were no comparable expenditures in 1966-67.
Outlays for freight assistance and grain storage costs on western feed grains amounted to $21 million, the same as in the previous fiscal year.
October 16, 1968
[Stage Direction]
TABLE 24 (in millions of dollars)
Forestry and Rural Development	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Rural development- Payments in respect of projects and programs under the Agricultural and Rural Development Act	27.0	17.9	9.1Fund for rural economic development-project payments	6.1	6.1Agricultural Rehabilitation and Development Act and the Maritime Marshland Rehabilitation Act	3.6	2.1	1.5SB.7	20.0	16.7Forestry- Regional research and services	10.7	8.7	2.0Research institutes	7.3	4.7	2.6Contributions to the provinces	1.1	8.7	-7.6Administration	1.9	1.3	0.621.0	2S-4	-2.4Canadian livestock feed board- Freight assistance and grain storage costs on western feed grains	21.4	21.0	0.4Administration and operation	0.2	0.221.6	21.0	0.6Administration and general	1.8	2.1	-0.381.1	66.5	14.6
Indian Affairs and Northern Development
Expenditures of the Department of Indian Affairs and Northern Development amounted to $231 million compared with $197 million in 1966-67.
Outlays in respect of Indian affairs were $123 million compared with $103 million in 1966-67. There were increases of $11 million in outlays for development and maintenance of Indian communities and $7 million in education costs.
Outlays in respect of the northern program were $70 million compared with $57 million in 1966-67. There were increases of $4 million in outlays for regional development, $3 million in payments to governments of the Yukon Territory and the Northwest Territories and $3 million in respect of northern mineral assistance grants for which there was no comparative expenditure in 1966-67.
Conservation expenditures totalled $37 million compared with $36 million in 1966-67. Administration, operation and maintenance costs were $3 million compared with $2 million in 1966-67.
[Stage Direction]
October 16. 1968
TABLE 25 (in millions of dollars)
Indian Affairs and Northern Development
Indian affairs-
Education	
Development and maintenance of Indian communities... Administration and general	
Northern program-
Regional development	
Education	
Payments to the Governments of the Yukon Territory
and the Northwest Territories	
Northern mineral assistance grants	
Administration and general	
Conservation-	_ _
National parks and historic sites	
Canadian wildlife service	
Administration and general	
Administration and general	
Fiscal year ended March 31		Increase or decrease (-)
1968 (preliminary)	1967	
58.9	52.3	6.657.0	45.2	11.86.6	5.6	1.0m.s	10S.1	19.A25.8	22.2	3.612.3	11.5	0.89.4	6.3	3.12.8	2.819.3	16.8	2.569.6	66.8	IS.829.0	30.6	-1.63.8	2.9	0.93.9	2.1	1.886.7	85.6	1.12.6	1.9	0.7231.4	197.4	34.0
Industry
Non-defence expenditures of the Department of Industry were $85 million compared with $48 million in 1966-67.
The increase was due mainly to expenditures of $26 million to provide incentives for the development of industrial employment opportunities in designated areas in Canada compared with $1 million in 1966-67.

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(in millions of dollars)
Industry*')	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Capital subsidies for the construction of commercial and	39.3	35.8	3.5Incentives' for the development of industrial employment	26.4	1.2	25.2To advance the technological capability of Canadian manufacturing industry by supporting selected civil (non-	6.4	4.6	1.8General incentives to industry for the expansion of scientific	2.1	2.1Administration and general	10.5	6.3	4.284.7	47.9	36.8
<DAdditional expenditures of $33.5 million are included under "defence expenditure".
October IS, 1968
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Capital subsidies for the construction of commercial and fishing vessels, which in previous years were included in expenditures of the Canadian Maritime Commission under the Department of Transport, are now included under expenditures of the Department of Industry. Previous year's figures have been adjusted for purposes of comparison. Expenditures amounted to $39 million compared with $36 million in the previous fiscal year.
Justice
Expenditures of the Department of Justice were $15 million compared with $12 million in 1966-67.
Judges salaries, allowances and pensions totalled $12 million compared with $9 million in 1966-67 and administration and general costs were $4 million compared with $3 million.

[Stage Direction]
(in millions of dollars)
Justice	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Judges salaries, allowances and pensions	11.8	9.4	2.4Administration and general	3.6	2.8	0.815.4	12.2	3.2
Labour
Expenditures of the Department of Labour totalled $11 million, $14 million less than in the previous fiscal year. The decrease was due mainly to outlays in respect of the winter house building incentive program which amounted to $50 thousand compared with $15 million in 1966-67.

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(in millions of dollars)
Labour	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Labour standards and benefits	5.5	4.9	0.6Research and development	2.2	1.8	0.4Winter house building incentive program	0.1	15.3	-15.2Labour relations	1.3	1.1	0.2Administration and general	1.8	1.8	10.9	24.9	-14.0
Legislation
Costs of Legislation were $18 million in 1967-68, $1 million more than in 1966-67.
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October 16, 1968

[Stage Direction]
(in millions of dollars)
Legislation	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
14.3	13.9	0.43.4	3.3	0.10.6	0.6	
18.3	17.8	0.5
Manpower and Immigration
Expenditures of the Department of Manpower and Immigration were $422 million compared with $321 million in 1966-67.
Expenditures in respect of development and utilization of manpower totalled $389 million compared with $295 million in the previous fiscal year. These expenditures included payments of $86 million to provinces under the Technical and Vocational Training Assistance Act compared with $85 million in the previous fiscal year, payments of $119 million for capital assistance in the provision of training facilities and for assistance in manpower training research compared with $136 million, payments of $106 million to and in respect of persons who are being afforded occupational training under the adult occupational training program, for which there was no comparable expenditures in 1966-67, payments of $31 million to provinces and in respect of Indian bands under the municipal winter works incentive program, $8 million less than in 1966-67, and outlays of $32 million for employment services compared with $33 million in the previous fiscal year.
Outlays of $21 million in respect of immigration were $1 million more than in 1966-67 and outlays in respect of program development totalled $7 million compared with $1 million in the previous fiscal year.

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(in millions of dollars)
Manpower and Immigration	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Development and utilization of manpower- Capital assistance in the provision of training facilities	-16.9and for assistance in manpower training research	119.3	136.2	Adult occupational training program	106.2	106.2Payments to provinces under the Technical and Voca-	85.6	85.2	0.4tional Training Assistance Act	Municipal winter works incentive program	30.5	37.8	-7.3Employment services	32.3	32.8	-0.5Other	15.1	2.9	12.2S89.0	994.9	94.1Immigration	21.6	20.5	1.1Program development	6.6	1.4	5.2Immigration appeal board	0.3	3.6	0.3Administration and general	4.1	0.5421.6	320.4	101.2
October 16, 1968
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National Health and Welfare
Expenditures of the Department of National Health and Welfare at $1,488 million were $172 million more than the previous year's total of $1,316 million, due mainly to increases of $65 million for welfare services and $101 million in respect of health insurance and resources.
Outlays for welfare services amounted to $877 million compared with $812 million in 1966-67; outlays for health insurance and resources were $549 million compared with $447 million; and outlays for medical services were $43 million compared with $39 million in the previous fiscal year.

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(in millions of dollars)
National Health and Welfare	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Welfare services- Family allowances	558.8	555.8	3.0Canada assistance plan-payments to provinces	225.6	10.5	215.1Unemployment assistance	6.1	143.3	-137.2Youth allowances	49.4	47.4	2.0Disabled persons allowances	7.1	15.0	-7.9Old age assistance	8.9	19.7	-10.8Fitness and amateur sport	3.6	4.7	-1.1Family assistance	4.2	3.7	0.5Blind persons allowances	2.3	3.4	-1.1National welfare grants	1.9	1.3	0.6Other	8.6	7.0	1.6Health insurance and resources- Government's contributions under the Hospital Insurance and Diagnostic Services Act	876.5	811.8	64.7468.6	397.4	71.2Grants to provinces- General health	29.6	28.6	1.0Hospital construction	16.4	16.5	-0.1Health resources fund	32.7	4.7	28.0Other	1.3	0.2	i.iMedical services	548.6	447.4	101.242.5	38.5	4.0Health services	8.6	8.4	0.2Food and drug services	8.2	6.8	1.4Administration and general	3.9	3.0	0.91,488.3	1,315.9	172.4
Family allowances
Family allowances are payable in respect of all children under sixteen years of age, resident in Canada, with minor exceptions such as in the case of children of immigrants who must reside in Canada one year before an allowance is payable. The monthly allowance is $6 if the child is under 10 years of age and $8 in the age group 10 to 15. Children of immigrants receive family assistance at the same rates during their first year of residence in Canada.
In 1967-68 payments of $559 million accounted for 6 per cent of all budgetary expenditure compared with $556 million and 7 per cent in 1966-67.
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October 16, 1968
TABLE 32 (in millions of dollars)
Family Allowances Payments	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)17.0	17.0	21.4	21.5	-0.13.2	3.2	18.6	18.7	-0.1164.7	165.1	-0.4187.6	185.3	2.325.4	25.6	-0.226.7	26.9	-0.243.0	42.6	0.449.8	48.5	1.31.4	1.4	
558.8	555.8	3.0
Youth allowances
Under provision of the Youth Allowances Act allowances of $10 per month are payable in respect of persons resident in Canada who have attained the age of 16 years and have not attained the age of 18 years who are in full time attendance at a school or university or are by reason of mental or physical infirmity precluded from attending school or university. In 1967-68 payments totalled $49 million, $2 million more than in 1966-67.	_
No payments were made under this act in respect of persons resident in the Province of Quebec. However, under authority of the Federal-Provincial Fiscal Revision Act, 1964 abatements in federal income taxes otherwise payable by individuals resident in the Province of Quebec were allowed in compensation of the fact that the payment of youth allowances had been assumed by the province and to allow for the imposition of the required provincial income taxes.
TABLE 33 (in millions of dollars)
Youth Allowances Payments	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)1.7	1.7	2.7	2.7	0.4	0.4	2.3	2.3	23.8	22.4	1.43.3	3.3	3.5	3.4	0.15.1	4.9	0.26.5	6.1	0.40.1	0.2	-0.1
49.4	47.4	2.0
October 16, 1968
[Stage Direction]
Canada assistance plan
The Canada assistance plan was enacted in 1966 authorizing the making of contributions to provinces by Canada towards the cost of programs for the provision of assistance and welfare services to and in respect of persons in need.
The act authorizes the federal government to enter into agreements with the provinces for sharing the costs of assistance and welfare services provided by provinces, territories and municipalities to persons in need, including care of such persons in welfare institutions, health care services, care of children in foster homes and costs of extending and improving welfare services.
Payments to provinces under the Canada assistance plan amounted to $226 million compared with $11 million in the previous fiscal year. The substantial increase of $215 million was partially offset by decreases in payments in respect of unemployment assistance ($137 million), old age assistance ($11 million), disabled persons allowances ($8 million) and blind persons allowances ($1 million).

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(in millions of dollars)
Canada Assistance Plan	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Newfoundland	17.9	17.9Nova Scotia	10.3	0.5	9.8Prince Edward Island	1.7	1.7New Brunswick	7.2	7.2Ontario	100.3	6.9	93.4Manitoba	15.6	15.6Saskatchewan	13.4	3.1	10.3Alberta	26.5	26.5British Columbia	32.7	32.7225.6	10.5	215.1
Old age assistance, blind persons allowances, disabled persons allowances and unemployment assistance
Under the Old Age Assistance Act, the federal government reimburses the provinces by paying 50 per cent of the lesser of $75 monthly or the amount of assistance given by the provinces in the form of monthly pensions to eligible persons in need who have attained the age of 65 years. (Under the Old Age Security Act, as amended, all persons who satisfy the residence requirements of the act may receive a pension of $76.50 ($75 up to January 1, 1968) per month from the federal government out of the old age security fund provided that no pension is paid in any month before January 1966 in which the person had not attained 70 years of age, the age limit being reduced by one in each subsequent year until 1970. An amendment to the Old Age Security Act authorized, effective January 1, 1967, the payment of a monthly guaranteed income supplement to eligible pensioners. The amount of the supplement that may be paid to a pensioner for a month is (a) in the year 1967, $30, and (6) in any year after 1967, 40 per cent of the amount of the pension that may be paid to him for that month, dependent upon the amount of his income for the preceding year.)
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October 16, 1968
Similarly, the federal government reimburses the provinces under the Blind Persons Act for allowances of not more than $75 per month to blind persons in need 18 years of age or over by paying 75 per cent of the total payments, and under the Disabled Persons Act by paying 50 per cent of not more than $75 per month for allowances to disabled persons in need 18 years of age or over.
In 1967-68 payments for old age assistance amounted to $9 million, for disabled persons allowances $7 million and for blind persons allowances $2 million. In 1966-67 payments were $20 million for old age assistance, $15 million for disabled persons allowances and $3 million for blind persons allowances. The Province of Quebec has opted out of these programs under federal-provincial agreement.
Under the Unemployment Assistance Act, the Minister may, with the approval of the Governor in Council, enter into an agreement with any province for the payment by Canada to the province of contributions not exceeding 50 per cent of unemployment assistance costs in the province. Contributions in 1967-68 were $6 million compared with $143 million in 1966-67. Under federal-provincial agreement the Province of Quebec has opted out of a portion of this program.	.
The decreases noted above were due mainly to the fact that certain contributions to the provinces which in prior years were made under the Old Age Assistance Act, the Blind Persons Act, the Disabled Persons Act and the Unemployment Assistance Act are now being made under the Canada Assistance Plan. The decrease in old age assistance payments was also due to the lowering of the age limit for old age security benefits.
The following table presents a distribution of these payments to provinces for 1967-68:
TABLE 35 (in millions of dollars)
Federal Share of Old Age Assistance, Disabled Persons Allowances, Blind Persons Allowances and Unemployment Assistance	Fiscal year ended March 31, 1968 (preliminary)			
Old age assistance	Disabled persons allowances	Blind persons allowances	Unemploy- ment assistance1.0	0.5	0.3	1.1	1.6	0.4	(i)0.2	0.2	(1)	0.71.1	1.0	0.4	0.10.1 Cr.	0.3 Cr.1.4	1.1	0.3	1.71.0	0.7	0.2	0.30.3	0.1	0.1	1.3	0.8	0.3	1.61.5	1.1	0.3	1.80.1	(1)	(1)	0.2
8.9	7.1	2.3	6.1
O) Less than $50,000.
Government1 s contributions under the Hospital Insurance and Diagnostic Services Act
Contributions of $468 million to the provinces under the Hospital Insurance and Diagnostic Services Act were $71 million more than the 1966-67 total. Under federal-provincial agreement, the Province of Quebec has opted out of this program.
October 16, 1968

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(in millions of dollars)
Government's Contributions Under the Hospital Insurance and Diagnostic Services Act
Newfoundland	
Nova Scotia	
Prince Edward Island	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
Northwest and Yukon Territories
<l)Adjustment for 1964.
Fiscal year ended March 31		Increase or decrease (-)
1968 (preliminary)	1967	
15.5	13.1	2.424.0	20.5	3.53.4	2.7	0.719.5	16.7	2.8*>4.0	-4.0234.8	194.7	40.130.6	26.4	4.232.3	28.4	3.949.8	42.0	7.857.4	47.8	9.61.3	1.1	0.2468.6	397.4	71.2
General health grants and hospital construction grants to provinces
Grants to provinces for general health services totalled $30 million and for hospital construction $16 million compared with $29 million and $17 million respectively in 1966-67. Under federal-provincial agreement the Province of Quebec has opted out of a portion of this program.
TABLE 37 (in millions of dollars)
General Health Grants and Hospital Construction Grants
Newfoundland	
Nova Scotia	
Prince Edward Island	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
Northwest and Yukon Territories
Fiscal year ended March 31, 1968 (preliminary)
General	Hospital	
health	construction	Total
grants	grants	
i.i	0.5	1.61.6	0.7	2.30.4	(1)	0.41.3	0.3	1.61.5	2.4	3.912.9	6.9	19.82.3	0.7	3.01.9	1.0	2.92.7	1.5	4.23.7	2.4	6.10.2	(1)	0.229.6	16.4	46.0
WLess than $50,000.
Health resources fund
The Health Resources Fund Act provides for the establishment of a health resources fund to assist provinces in the acquisition, construction and renovation of health training facilities and research institutions.
Expenditures amounted to $33 million during 1967-68 compared with $5 million in the previous fiscal year.
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October 16, 1968
National Research Council, including the Medical Research Council
Expenditures of the National Research Council, including the Medical Research Council, were $122 million compared with $95 million in the previous
fiscal year.	....	,	....
Outlays for scholarships and grants in aid of research at $66 million were $20 million higher than in 1966-67 and costs of administration, operation and maintenance at $41 million were $4 million higher.

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(in millions of dollars)
National Research Council, Including The Medical Research Council	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Scholarships and grants in aid of research	66.0	46.5	19.5Construction or acquisition of buildings, works, land and	9.3	7.1	2.2Assistance towards research in industry	5.0	4.2	0.8Administration, operation and maintenance	41.4	36.9	4.5121.7	94.7	27.0
National Revenue
Expenditures of the Department of National Revenue totalled $115 million compared with $106 million in 1966-67.
Outlays of $57 million in respect of customs and excise were $3 million higher and included $35 million for the operation and maintenance of ports ($35 million in 1966-67), $13 million in connection with excise tax, excise duty, investigations and drawbacks ($11 million in the previous year) and $9 million for general administration ($8 million in 1966-67).
Outlays of $58 million in respect of taxation were $6 million higher than in 1966-67 due mainly to outlays for district offices which totalled $52 million compared with $46 million in 1966-67.

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(in millions of dollars)
National Revenue	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Customs and excise	56.7	53.8	2.958.1	51.8	6.3Income tax appeal board	0.3	0.3	115.1	105.9	9.2
October 16, 1968
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Post Office
Costs of the Post Office Department charged to budgetary expenditure at $302 million were $33 million more than in 1966-67 due mainly to normal staff growth and to salary increases.
Costs of operations at $206 million were $24 million more than in the previous fiscal year and costs of movement of mail at $87 million were $8 million more.
Remuneration of postmasters and staffs at revenue and semi-staff offices and certain other authorized disbursements are paid from revenue. These payments at $45 million ($3 million more than in 1966-67) brought gross post office expenditures to $347 million in 1967-68.

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(in millions of dollars)
Post Office	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Charged to budgetary expenditure- Operations-salaries and other expenses of staff post offices, district offices and railway mail services; and supplies and equipment and other items for revenue post offices	205.6 87.1 4.6 4.5 SO 1.8 45.5	181.8	Transportation-movement of mail by land, air and water	Financial services	4.1 3.7 268.5 42.1	Administration and general	Charged to revenue- Operations-salaries of postmasters and staffs at revenue and semi-staff offices, commissions paid at suboffices and other disbursements	SS.S 3.4
347.3	310.6	36.7
Public Works
Expenditures of the Department of Public Works totalled $309 million, $14 million more than in 1966-67.
Accommodation services
Expenditures for these services were $134 million. $25 million higher than the 1966-67 total.
Costs of maintenance and operation of public buildings and grounds were $85 million compared with $76 million in 1966-67, costs of construction or acquisition of buildings, etc. were $48 million compared with $32 million and costs of acquisition of equipment and furnishings other than office furnishings wore $1 million compared with $1 million in 1966-67.
Roads, bridges and other engineering services
Expenditures for these services totalled $84 million, $12 million less than in 1966-67. Contributions of $65 million to provinces in respect of the Trans-Canada highway were $16 million less than in 1966-67.
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October 16, 1968
Harbours and rivers engineering services
Expenditures for these services totalled $44 million, $6 million higher than in 1966-67 due mainly to an increase of $6 million in outlays for construction or acquisition, etc. of harbour and river works which amounted to $35 million in 1967-68.
National Capital Commission
Expenditures of the National Capital Commission were $23 million compared with $33 million in the previous fiscal year.
Payments into the national capital fund were $15 million, $10 million less than in 1966-67. Outlays for the operation and maintenance of parks, parkways, etc. at $5 million and interest charges of $3 million were slightly higher than in the previous year.

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(in millions of dollars)
Public Works
Accommodation services-
Maintenance and operation of public buildings and grounds-
National capital region	
Other than national capital region	
Office furniture and furnishings	
Acquisition of equipment and furnishings other
office furnishings	 [DOT]
Construction, acquisition, major repairs, etc. of ] buildings-
Ottawa	
Other than Ottawa	
than
Roads, bridges and other engineering services- Operation and maintenance-	
other engineering works. Trans-Canada highway-
Canada Highway Act	
Construction through national parks.
Harbours and rivers engineering services-
Operation and maintenance	
Construction or acquisition of equipment.
and river works. Dry dock subsidies.,
National Capital Commission-
Operation and maintenance	
Interest charges (net)	
Payment to the national capital fund.
Testing laboratories	
Administration and general.
Fiscal year ended March 31		Increase
1968 (preliminary)	1967	decrease (-)35.1	28.4	6.749.6	41.8	7.85.3	-5.31.4	0.8	0.624.8	13.8	11.022.9	18.4	4.51SS.8	108.5	25.36.7	6.0	0.710.4	8.0	2.464.7	81.0	-16.32.0	0.6	1.483.8	95.6	-11.87.6	7.5	0.10.9	1.0	-0.135.2	29.4	5.80.2	0.2	43.9	38.1	5.85.3	4.7	0.63.3	3.3	14.6	25.0	-10.423.2	33.0	-9.81.2	1.2	22.7	18.0	4.7308.6	294.4	14.2
October 16, 1968
[Stage Direction]
Secretary of State
Expenditures of the Department of the Secretary of State were $190 million compared with $134 million in 1966-67.
Payments to provinces for post-secondary education, pursuant to Part II of the Federal-Provincial Fiscal Arrangements Act, 1967, totalled $108 million. In prior years the government made comparable payments to the association of universities and colleges of Canada for the purpose of making grants to universities of higher learning. These payments amounted to $87 million in 1966-67.
Centennial Commission expenditures of $31 million were $1 million higher than in 1966-67 due mainly to an increase in outlays for programs and projects of national significance.
The Canada Council received a grant of $17 million in 1967-68 for the purposes of the arts, humanities and social sciences, for which there was no comparable expenditure in the previous year.
Expenditures of the National Arts Centre for construction or acquisition of buildings, works, land and equipment were $20 million, $13 million higher than in 1966-67.
Outlays of $4 million in respect of the translation bureau, $4 million in respect of the National Museum of Canada and $3 million in respect of citizenship were in each case $1 million more than in the previous fiscal year.

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(in millions of dollars)
Secretaby or State	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Post-secondary education payments- Payments to provinces pursuant to Part II of the Federal-	Provincial Fiscal Arrangements Act, 1967	108.0	108.0University grants	0.2	87.1	-86.9Centennial Commission-	Programs and projects of national significance	13.4	12.5	0.9Payment to the centennial of confederation fund	13.2	13.0	0 2General administration	4.6	4.7	-0.1SI. 2	SO. 2	1.0Grant to the Canada Council	
National Arts Centre-	16.9	16.9Construction or acquisition of buildings, works, land and	equipment	19.5	6.4	13.1Administration	0.2	-0.2Translation bureau	19.5 4.1	6.6 3 5	12.9 0National Museum of Canada	3.7	2 6	1 1Citizenship	3.3	2.6	0 7Payments to the National Arts Centre Corporation	1.0	(l)	1.0Office of the Representation Commissioner	0.1	0.2	0 1Administration and general	1.9	1.0	0.9189.9	133.8	56.1
CULess than $50,000.
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October 16. 1968
Solicitor General
Expenditures of the Department of the Solicitor General totalled $154 million, $9 million more than the previous year's total. The main changes were increases of $5 million in respect of correctional services and $4 million in respect of the Royal Canadian Mounted Police.

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(in millions of dollars)
Solicitor General	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Royal Canadian Mounted Police- . National police services, federal law enforcement duties and provincial and municipal policing under contract- < .	61.9	64.4	-2.5Construction or acquisition of buildings, works, land	10.0	6.0	4.0Pensions and other benefits-	5.4	4.9	0.5Royal Canadian Mounted Police superannuation account-	4.2	4.5	-0.35.3	3.3	2.00.9	1.0	-0.187.7	84.1	S.6Correctional services- ... . Administration of the Canadian penitentiary service....	1.0 39.1	1.0 37.1	2.01.6	1.3	0.3Construction or acquisition of buildings, works, land and	23.1	20.2	2.964.8	69.6	5.SOffice of the Solicitor General	1.0	0.6	0.4153.5	144.3	9.2
Royal Canadian Mounted Police
Net expenditures of the Royal Canadian Mounted Police were $88 million, $4 million more than in 1966-67.
However, in 1967-68 authority was granted by Vote 15, Appropriation Act No. 3, 1967, which covers expenditures for administration, operation and maintenance, to credit thereto revenue arising from expenditures under that vote. This revenue amounted to $31 million and included $30 million for policing certain provinces, territories and municipalities. In 1966-67 revenue amounted to $18 million of which $17 million was for policing services. The increase in revenue from policing services was due to an increase in the rates and in the number of employees required for these services and due to payments of $4 million collected in 1967-68 which were applicable to the previous year.
October 16, 1968
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Correctional services
Expenditures of $65 million in respect of correctional services were $5 million more than in 1966-67 and included outlays of $39 million for operation and maintenance of penitentiaries compared with $37 million in 1966-67 and outlays of $23 million for construction or acquisition of buildings, works, land and equipment compared with $20 million in the previous fiscal year.
Trade and Commerce
Expenditures of the Department of Trade and Commerce including the Canadian Wheat Board were $81 million compared with $73 million in 1966-67.
The main changes were increases of $4 million in outlays in respect of the Canadian Wheat Board and $2 million in administration and general costs.
TABLE 44 (in millions of dollars)
Trade and Commerce	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Canadian Wheat Board- Carrying costs of temporary wheat reserves	
Prairie Grain Advance Payments Act	31.4	29.8	1 60.7	0.6	0 1Payment to the board	2.7	2.7S4.8	so. 4	4-4Trade commissioner service	10.3	9.0	1.3Canadian government travel bureau	10.0	10.0	Canadian corporation for the 1967 world exhibition-Canadian government participation	7.0	8.4	-1 4Standards branch	4.2	3 9	0 3Canadian government exhibition commission	5.4	4.3	11Administration and general	9.7	7.5	2.281.4	73.5	7.9
Transport
Expenditures of the Department of Transport including the Atlantic Development Board, the Canadian Transport Commission and the National Harbours Board totalled $607 million compared with $568 million in 1966-67.
Expenditures in respect of the Air Transport Board, the Board of Transport Commissioners for Canada and the Canadian Maritime Commission were transferred to the control of the Canadian Transport Commission under this department and capital subsidies for the construction of commercial and fishing vessels, which were previously included under expenditures of the Canadian Maritime Commission, are now included under non-defence expenditure of the Department of Industry. Previous year's figures have been adjusted for purposes of comparison.
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October 16# 1968

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(in millions of dollars)
Transport	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Air services-	125.8	110.8	15.0Administration, operation and maintenance	Construction, acquisition of buildings, works, land and equipment	45.9	52.0	-6.1Grants, contributions, subsidies and other payments....	3.3	2.2	1.1175.0	165.0	10.0Canadian Transport Commission!')-	120.9	5.3Payments under the National Transportation Act	126.2	Contributions to the railway grade crossing fund	15.0	15.0	0.3Steamship subventions	11.1	10.8	Subsidies to air carriers	1.2	0.4	0.8Administration and general	3.4	3.0	0.4156.9	150.1	6.8Railways and steamships-	24.5	27.3	-2.8Construction or acquisition	Maritimes Freight Rates Act-Difference between tariffs and normal tolls	14.2	14.4	-0.2Railway to Great Slave Lake	4.4	1.3	3.1Victoria Bridge	0.9	0.8	0.1Deficits- Canadian National Railways	35.8	24.6	11.2Newfoundland ferry and terminals	16.5	13.0	3.5Prince Edward Island car ferry and terminals	4.8	4.6	0.2Yarmouth, N.S.-Bar Harbour, Maine, U.S.A. ferry service	0.4	(2)	0.4Railway employees provident fund	6.6	0.9	6.6Other	0.6	-0.3108.7	86.9	21.8Marine services-	50.7	4.4Administration, operation and maintenance	55.1	Construction or acquisition of buildings, works, land, vessels and equipment	46.3	49.3	-3.0101A	100.0	MAtlantic Development Board-	29.6	-11.0Payments to the Atlantic development fund	18.6	Federal share of the cost of a trunk highway program..	19.3	8.6	10.7Administration and general	4.5	1.8	2.74M	40.0	2.4Canals and works entrusted to The St. Lawrence Seaway Authority- Welland Canal deficit	8.2	10.1	-1.9Other operating deficits and capital requirements	2.4	2.8	-0.410.6	IS.9	-S.SNational Harbours Board	4.8	7.0	-2.2Administration and general	7.1	6.3	0.8606.9	568.2	38.7
(^Expenditures of the Air Transport Board, the Board of Transport Commissioners and the Canadian Maritime Commission are included under this heading.
<2>Less than $50,000.
Air services
Outlays of $175 million for air services were $10 million higher than in 1966-67. There was an increase of $15 million in respect of administration, operation and maintenance and a decrease of $6 million in respect of construction or acquisition of buildings, works, land and equipment.
October 16, 1968
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Canadian Transport Commission
Expenditures of $157 million in respect of the Canadian Transport Commission included $126 million for payments under the National Transportation Act, $15 million for contributions to the railway grade crossing fund, $11 million for steamship subventions, $1 million for subsidies to air carriers and $4 million for administration and general. In 1966-67 total expenditures were $150 million which included $116 million for payments to the railways for the maintenance of the rates of freight traffic, $15 million for contributions to the railway grade crossing fund, $11 million for steamship subventions, $5 million for maintenance of trackage, $3 million for administration and general and $355 thousand for subsidies to air carriers.
Railways and steamships
Expenditures for these services totalled $109 million compared with $87 million in the previous fiscal year.
Costs of construction or acquisition of buildings, works, land, dock and terminal facilities at $25 million were $3 million less than in 1966-67; payments under the Maritime Freight Rates Act at $14 million were the same as in 1966-67; and the subsidy of $5 million in respect of a railway to Great Slave Lake was $3 million higher than in the previous year.
The charge of $36 million to budgetary expenditure in 1967-68 to cover the 1967 operating deficit of the Canadian National Railways was $11 million more than the charge of $25 million in 1966-67 to cover the railway's 1966 operating deficit.
Marine services
Outlays of $101 million for marine services were $1 million more than in 1966-67. Included in these expenditures were $55 million for administration, operation and maintenance compared with $51 million in 1966-67 and $46 million for construction or acquisition of buildings, works, land, vessels and equipment compared with $49 million in the previous year.
Atlantic Development Board
Outlays of $42 million in respect of the Atlantic Development Board were $2 million higher than in 1966-67. Outlays for the federal share of the cost of a trunk highway program for the Atlantic provinces totalled $19 million compared with $9 million in 1966-67 and payments to the Atlantic Development Fund were $19 million compared with $30 million in 1966-67.
Canals and works entrusted to The St. Lawrence Seaway Authority
Expenditures of $11 million were $2 million less than in 1966-67. The 1967 operating deficit of the Welland Canal, in the amount of $8 million, charged to budgetary expenditure was $2 million less than the 1966 deficit of $10 million which was charged to 1966-67 expenditures.
National Harbours Board
Non-active advances to the board which were charged to budgetary expenditure totalled $5 million, $2 million less than in 1966-67. The net decrease reflects decreases in respect of reconstruction and capital expenditures of the Halifax harbour and $1 million in the operating deficit of the Jacques Cartier Bridge, Montreal, offset by an increase of $1 million in respect of reconstruction and capital expenditure of the Quebec harbour.
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October 16, 1968
Treasury Board
Expenditures of the Treasury Board amounted to $159 million, an increase of $5 million over the total for 1966-67.
Public service superannuation account
The government's contribution to the public service superannuation account, in an amount equal to the estimated current and prior service payments of individuals in 1966-67, was $60 million, the same as in 1966-67.
A further amount of $61 million, equal to one fifth of the actuarial deficiencies arising out of pay increases, was also charged to budgetary expenditure, compared with $56 million in 1966-67.
Canada's contributions as an employer
These contributions totalled $21 million compared with $20 million in 1966-67. The main item was $17 million to the Canada and Quebec pension plans compared with $17 million in 1966-67.

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(in millions of dollars)
Treasury Board	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Public service superannuation account-	59.6	59.3	0.360.6	56.3	4.3m.s	115.6	4-6Government's contributions as an employer-	17.3	16.8	0.51.4	1.2	0.21.7	1.4	0.3Pension plans for employees, engaged locally outside	0.2	0 1	0.10.3	0.2	0.1SO. 9	19.7	l.SGovernment's share of surgical-medical insurance premiums. Payments under Public Service Pension Adjustment Act	11.2 1.9 4.4	13.6 2.0 2.5	-2.4 -0.1 1.9
158.6	153.4	5.2
Unemployment Insurance Commission
Expenditures for the commission amounted to $107 million including the government's contribution of $70 million to the unemployment insurance fund. In 1966-67 expenditures were $106 million of which $69 million was the government's contribution to the fund.
Unemployment benefit payments are not charged to budgetary expenditure but are paid from the fund which is financed by equal contributions from employees and employers, by interest earned on investments and by the govern-
October 16, 1968
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merit's contribution of an amount equal to one fifth of the combined employee-employer contributions. Further information is given under the liability category "annuity, insurance and pension accounts".

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(in milliona of dollars)
Unemployment Insurance Commission	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Government's contribution to the unemployment insurance fund	69.5	68.8	0.7Administration of the Unemployment Insurance Act	37.6	37.3	0.3107.1	106.1	1.0
Veterans Affairs
Expenditures of the Department of Veterans Affairs totalled $401 million compared with $391 million in the previous fiscal year.
War veterans allowances and civilian allowances at $98 million were $5 million less than in 1966-67, pensions for disability and death at $206 million were $10 million higher and costs of $61 million for treatment services were $4 million higher than in the previous fiscal year.

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(in millions of dollars)
Veterans Affairs	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Pensions-			
Disability and death	205.6	195.9	9.7Administration and general	3.1	3.1	208.7	199.0	9.7Welfare services, allowances and other benefits-	War veterans allowances and civilian allowances	98.4	103.6	-5.2Assistance under provisions of the Assistance Fund (War	Veterans Allowances) Regulations	6.4	5.9	0.5Veterans welfare services	2.6	2.7	-0.1Administration and general	6.8	6.5	0.3tn.s	118.7	-4.6Treatment services	61.4	57.9	3.5Soldier settlement and veterans land act-	Provision for reserve for conditional benefits	4.0	3.5	0.5Administration and general	5.5	5.2	0.39.6	8.7	0.8Administration and general	7.0	6.5	0.5400.8	390.8	10.0
October 16, 1968
All Other Departments
Expenditures of the departments not dealt with individually amounted to $72 million, an increase of $15 million over the total for 1966-67.
Expenditures which in previous years were shown under the Department of the Registrar General are now under the new Department of Consumer and Corporate Affairs which was established by the Consumer and Corporate Affairs Act, as passed by the House of Commons on November 27, 1967.
The main changes were increases of $5 million for the Privy Council Office due mainly to increases of $2 million in outlays for state visits and $2 million in respect of the Company of Young Canadians, and $3 million for the Public Service Commission due mainly to increased expenditures in respect of the bilingual and bicultural development program.
TABLE 49 (in millions of dollars)
All Other Departments	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)2.3	2.1	0.21.0	0.6	0.40.7	0.9	-0.27.6	5.5	2.19.5	9.3	0.21.0	0.8	0.21.9	1.7	0.29.3	8.0	1.32.9	1.9	1.012.5	7.9	4.63.6	2.7	0.94.9	4.0	0.913.4	10.8	2.61.0	(2)	1.0
71.6	56.2	15.4
CD'See also under defence expenditure at the beginning of this section. <®Less than $50,000.	.
October 16, 1968

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The assets and liabilities of the Government of Canada as at March 31, 1968, the comparable balances at March 31, 1967 and the changes in each category during 1967-68 are shown in condensed form in the following table:
TABLE 50 (in millions of dollars)
	Balance at March 31		Increase
	1968 (preliminary)	1967	or decrease (-)
Liabilities			
Current and demand liabilities		2,310.6 474.7 9,053.0 93.1 235.3 26.0 149.9 3.8 20,579.9		
Deposit and trust accounts			372.2 7,915.9 76.6 196.2 20.0	UOO. 0
Annuity, insurance and pension accounts				1,137.1 16.5 39.1 6.0
Undisbursed balances of appropriations to special accounts.. Refundable corporation tax				
Provision for estimated premium on redemption of bonds Deferred credits				
Suspense accounts			4.1	
Unmatured debt				
			uoy. i
Total liabilities		32,926.3		
			
Assets			
Current assets		1,530.4 2.1 2.033.3 122.6 1,280.8 8.1 7.939.4 1,206.1 1,945.9 59.8 492.0 U)		
Cash in blocked currency			2.1 2.355.0 180.0 615.5 3.2 6.728.6 1.201.6 1.714.0	
Advances to the exchange fund account...			-321.7
In vestments in United States dollar securities issued by other than the Government of Canada				
Canada pension plan investment fund				
Investments held for the retirement of unmatured debt ^ Loans to, and investments in, Crown corporations.			4.9 1,210.8
Loans to national governments				
Other loans and investments				
Securities held in trust				. y
Deferred charges				
Capital assets			(1)	
Inactive loans and investments			94.8	94.8	
			
Total recorded assets		16,715.3 -546.4	14,921.5 -546.4	
Less reserve for losses on realization of assets				
			
Net recorded assets		16,168.9		
			
Net debt represented by excess of liabilities over net recorded assets		16,757.4	15,965.0	2>792.4
{1>Shown at nominal value of $1.
(2>
Reflecting the budgetary deficit of $792.4 million. 29180-90
14X8
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October 16. 1968
Summary
The gross liabilities of the government totalled $32,926 million at March 31, 1968 compared with $30,340 million at March 31, 1967. The main changes were increases of $1,137 million in annuity, insurance and pension accounts, $640 million in unmatured debt, $639 million in current and demand liabilities and $103 million in deposit and trust accounts.
Net recorded assets totalled $16,169 million at March 31, 1968 compared with $14,375 million at March 31, 1967. The main changes were increases of $1 211 million in loans to, and investments in, Crown corporations, $665 million in the Canada pension plan investment fund, $232 million in other loans and investments and $136 million in current assets, and decreases of $322 million in advances to the exchange fund account and $90 million in deferred charges.
The net debt of Canada, or the excess of liabilities over net recorded assets, was $16,757 million at March 31, 1968 compared with $15,965 million at March 31, 1967.

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Fiscal Years Ended March 31 Billions of Dollars
1967	1968*	1968*


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2% OTHER LIABILITIES
1% DEPOSIT AND TRUST ACCOUNTS
0 1964
Liability Accounts Current and demand liabilities
These liabilities, which consist of obligations of the government payable currently or on demand, in the amount of $2,311 million were $639 million more than the total at March 31, 1967.
October 16, 1968
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The main changes were increases of $450 million in non-interest-bearing notes, $66 million in accounts payable, $45 million in outstanding treasury cheques and $50 million in interest due and outstanding.
Non-interest-bearing notes represent those portions of Canada's equities in the capital of certain international agencies which are not covered by cash or gold. Notes in respect of the international monetary fund in the amount of $791 million were $452 million more than at March 31, 1967 and notes in respect of the international development association were $3 million less than at March 31, 1967.

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(in millions of dollars)
Current and Demand Liabilities	Balance at March 31		Increase or decrease (-)
	11)68 (preliminary)	1967	
Outstanding treasury cheques	427.4	382.6	44.8Accounts payable	520.2	454.5	65.7Non-interest-bearing notes payable to-	The international monetary fund	791.0	339.0	452.0The international development association	23.0	26.0	-3.0The Asian development bank	2.7	1.4	1.3816.7	S66.4	460. sMatured debt outstanding	26.0	30.7	-4.7Interest due and outstanding	161.6	111.3	50.3Interest accrued	315.3	286.2	29.1Post office outstanding money orders..	34.9	29.2	5.7Outstanding letter of credit cheques	6.1	7.5	-1.4* Other current liabilities	2.4	3.7	-1.32,310.6	1,672.1	638.5
Deposit and trust accounts
Sundry funds deposited with, or held in trust by, the Receiver General of Canada for various purposes are recorded in these accounts.
There was a net increase of $103 million during 1967-68 bringing the total to $475 million at March 31, 1968. There were increases of $25 million in the Canadian Dairy Commission account, $28 million in the provincial tax collection agreements account, $9 million in guarantee deposits and $38 million in a new account for the Canadian Commercial Corporation.
29180-90J
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TABLE 52 (in millions of dollars)
October 16, 1968
Deposit and Trust Accounts
Indian trust funds	
Guarantee deposits-
Energy, Mines and Resources	
Indian Affairs and Northern Development National Revenue	
Post office savings bank	*	
Crown corporations deposits-
Atomic Energy of Canada Limited	
Crown Assets Disposal Corporation	
Eldorado Mining and Refining Limited	
Export Credits Insurance Corporation	[DOT] [DOT] [DOT]
Northern Ontario Pipe Line Crown Corporation
Canadian Pension Commission-administration trust fund..
National Harbours Board-special accounts	
Instalment purchase of bonds, public service	
Contractors holdbacks	 [DOT]
Contractors securities-sundry departments
Bonds	
Cash	
Certified cheques	
Army benevolent fund	- [DOT] [DOT]	
Canadian Arsenals Limited pension fund	
Canadian Commercial Corporation-special deposit	
Canadian Dairy Commission	* * * [DOT]	
Capital cost allowances-commercial and fishing vessels...
Cape Breton Development Corporation	
Common school funds-Ontario and Quebec	
Emergency gold mining assistance-holdbacks	
Federal Republic of Germany	
Immigration guarantee fund...._	
National Research Council-special fund	
Northwest Territories revenue account	
Permanent services deferred pay	
Prairie farm emergency fund	
Provincial tax collection agreements account	
Replacement of materiel, sec. 11, National Defence Act....
Royal Canadian Mint-prepayments	
Surplus Crown assets	
United States of America	
Veterans care trust fund	
Veterans land act trust account-general	
Dther	
Balance at March 31		Increase or decrease (-)
1968 (preliminary)	1967	
34.0	33.7	0.315.2	9.9	5.328.5	25.3	3.25.0	5.4	0.249.3	40.6	8.718.6	20.8	-2.23.0	4.0	-1.00.7	0.7	6.0	10.0	-4.014.0	14.0	0.7	-0.723.7	29.4	-5.716.6	16.0	0.616.8	17.2	-0.416.2	16.3	-0.114.9	14.9	2.7	2.5	0.21.3	1.1	0.20.2	0.3	-0.1J>.2	S.9	0.3. 5.0	5.2	-0.21.0	-1.0. 38.2	38.2. 25.2	(1)	25.24.0	4.3	-0.3. 2.1	2.12.7	2.7	. 2.3	2.4	-0.10.5	-0.51.6	1.9	-0.3. 2.1	2.2	-0.11.4	-1.42.6	3.4	-0.813.0	10.8	2.2. 120.2	92.5	27.7. 0.6	0.6	4.5	4.0	0.5. 31.1	24.3	6.80.6	0.9	-0.34.2	3.4	0.88.9	7.5	1.4. 11.5	10.4	1.1474.7	372.2	102.5
h>Less than $50,000.
Annuity, insurance and pension accounts
This category records the government's liability in respect of various annuity, insurance and pension accounts.
October 16, 1968
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During 1967-68 a net increase of $1,137 million brought the total to $9,053 million. The main changes were increases of $672 million in the Canada pension plan account, $186 million in the public service superannuation account, $146 million in the Canadian forces superannuation account and $107 million in the old age security fund.
TABLE 53 (in millions of dollars)
	Balance at March 31		Increase
Annuity, Insurance and Pension Accounts	1968 (preliminary)	1967	or decrease (-)Unemployment insurance fund	320.3	280.4	39.9Less investment in bonds and accrued interest	-303.9	-266.6	-37.3Uninvested funds on deposit with the government	16.4	13.8	2.6Superannuation accounts-	Public service	2,875.8	2,689.5	186.3Canadian forces	2,723.3	2,577.0	146.3Royal Canadian Mounted Police	104.7	85.1	19.65,703.8	5,351.6	352.2Canada pension plan account	1,352.8	680.9	671.9Government annuities	1,326.1	1,324.5	1.6Old age security fund	536.1	429.6	106.5Other	117.8	115.5	2.39,053.0	7,915.9	1,137.1
Unemployment insurance fund
The balance in the fund at March 31, 1968 was $320 million (of which $18 million represented a liability for unredeemed warrants and deposits from employers) consisting of $304 million invested in special government bonds (including accrued interest) and $16 million on deposit with the Receiver General. The balance in the fund at March 31, 1967 was $280 million (of which $22 million represented a liability for unredeemed warrants and deposits from employers) consisting of $266 million invested in special government bonds (including accrued interest) and $14 million on deposit with the government.
Receipts of $433 million during the fiscal year included employee and employer contributions of $347 million, the government's contribution of $70 million and $16 million in interest from investments. As benefit payments totalled $389 million, receipts exceeded payments from the fund by $44 million during 1967-68. Receipts during 1966-67 totalled $424 million and included employee and employer contributions of $344 million, the government's contribution of $69 million and $11 million in income from investments. Benefit payments during 1966-67 totalled $307 million.
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October 16, 1968
TABLE 54 (in millions of dollars)
Fiscal year ended March 31
Unemployment Insuhance Fund	1964	1965	1966	1967	1968 (prelimi- nary)
Revenue- Contributions-					347.4
Employee and employer*11	296.6	310.8	328.3	343.8	Government*21	59.3	62.1	65.7	68.8	69.5Net income from investments	1.1	1.8	4.7	10.9	15.9Other income	0.1	0.1	0.1	0.2	0.2357.1	374.8	398.8	423.7	433.0Expenditure-	-388.6Benefit payments	
Interest on loan	-365.7 -0.2	-335.0 -0.2	-297.8	-307.0	Excess of revenue over expenditure or expenditure	44.4over revenue (-)	-8.8	39.6	101.0	116.7	Balance at credit of fund at fiscal year-end	0.9	40.5	141.5	258.2	302.7Unredeemed benefit warrants and deposits from	17.6employers	15.9	17.8	20.6	22.2	16.8	58.3	162.1	280.4	320.3Investment in bonds and accrued interest	-44.0	-148.6	-266.6	-303.9Balance on deposit with the government	16.8	14.3	13.5	13.8	16.4
(^Contributions by employees and employers are on an equal basis.
(^Government's contribution is equal to 20 per cent of the combined employee-employer contributions.
Public service superannuation account
The balance of $2,876 million in this account was $186 million higher than the balance at the end of the previous fiscal year.
Receipts of $270 million during the year included credits of $22 million to provide for additional liabilities arising out of salary revisions made in 1967-68, contributions of $72 million by individuals, the government's contribution of $60 million, contributions of $5 million by certain Crown corporations and interest of $111 million credited to the account by the government. Contributions by the government were equal to the estimated current and prior service payments of individuals in 1966-67. Contributions by Crown corporations were equal to the estimated current and prior service payments of individuals in 1967-68. Interest at 4 per cent per annum is credited to the account quarterly and is computed quarterly on the outstanding balance at the end of the previous quarter.
The credit of $22 million to provide for additional liabilities arising out of salary increases was charged to the asset account "unamortized portions of actuarial deficiencies".
Disbursements totalled $84 million and included $68 million in annuities and $11 million in withdrawals of contributions.
In 1966-67 receipts totalled $374 million and disbursements totalled $75 million.
October 16, 1968
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TABLE 55 (in millions of dollars)
Fiscal year ended March 31
Public Service Superannuation Account	1964	1965	1966	1967	1968 (prelimi- nary)
Receipts- Contributions- Employees (government and Crown cor-					
porations)	59.2	61.1	(1)66.0	<*58.6	72.0Crown corporations	3.0	3.4	3.7	3.8	5.0Government	54.0	55.6	57.8	59.3	59.6Interest	71.8	78.7	89.5	98.5	110.9Actuarial liability adjustment	169.5	79.6	152.2	21.5Other	1.1	1.3	1.9	1.6	1.4189.1	369.6	298.5	374.0	270.4Disbursements-	Annuities	-47.8	-52.6	-57.7	-62.8	-68.2Withdrawals of contributions	-8.4	-10.8	-11.3	-11.1	-10.8Other	-0.6	-0.8	-0.9	-1.0	-5.1-56.8	-64.2	-69.9	-74.9	-84.1Excess of receipts over disbursements	132.3	305.4	228.6	299.1	186.3Balance in fund brought forward	1.724.1	1,856.4	2,161.8	2,390.4	2,689.5Balance at credit of fund	1,856.4	2,161.8	2,390.4	2,689.5	2,875.8
(''Includes $4.1 million due to dual contributions temporarily required in respect of the Canada and Quebec pension plans.
m Net after deduction of $8.7 million in respect of the Canada and Quebec pension plans.
Canadian forces superannuation account
The balance of $2,723 million at March 31, 1968 reflected an increase of $146 million during the fiscal year.
TABLE 56 (in millions of dollars)
Fiscal year ended March 31
Canadian Forces Superannuation Account	1964	1965	1966	1967	1968 (prelimi- nary)Receipts- Contributions- Personnel	36.0	35.2	34.1	(025.1	34.2Government	136.2	58.8	58.8	42.6	58.4Interest	66.3	75.0	83.2	91.7	105.2Actuarial liability	
Other	0.2	67.2 0.2	16.6 0.3	279.2 0.3	0.3238.7	236.4	193.0	438.9	198.1Disbursements-	Pensions and retiring allowances	-13.4	-18.6	-26.7	-36.8	-45.7Cash termination allowances and return of contributions	-9.5	-11.0	-10.1	-9.2	-6.0Other	-0.1	-0.2	-0.1	-0.1	-0.1-23.0	-29.8	-36.9	-46.1	-51.8Excess of receipts over disbursements	215.7	206.6	156.1	392.8	146.3Balance in fund brought forward	1,605.8	1,821.5	2,028.1	2,184.2	2,577.0Balance at credit of fund	1,821.5	2,028.1	2,184.2	2,577.0	2,723.3
(1>Net after deduction of $5.1 million transferred to the Canada and Quebec pension plans.
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October 16, 1968
Receipts of $198 million included $34 million in contributions by personnel, $58 million in regular government contributions and $105 million in interest credited by the government. Regular government contributions are made at the rate of one and two-thirds times the current and prior service contributions by personnel. Interest at 4 per cent per annum is credited to the account quarterly and is computed quarterly on the outstanding balance at the end of the previous quarter.
Disbursements of $52 million included $46 million in pensions and retiring allowances and $6 million in cash termination allowances and return of contributions.	. _
In 1966-67 receipts were $439 million and disbursements were $46 million.
Royal Canadian Mounted Police superannuation account
The balance of $105 million in this account as at March 31, 1968 was $20 million more than the previous fiscal year-end balance of $85 million.
Receipts during the year of $21 million consisted of $3 million in contributions by personnel, $3 million in interest credited to the account, $4 million in contributions by the government and $10 million as a result of actuarial evaluations.
The credit of $10 million for actuarial evaluation, which consisted of $8 million as a result of the quinquennial actuarial valuation made as at December 31, 1964 and $2 million arising from salary increases, was charged to the asset account "unamortized portions of actuarial deficiencies".
Disbursements of $1 million consisted of annuities and allowances, cash termination allowances and return of contributions.
In 1966-67 receipts were $21 million and disbursements were $1 million.

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(in millions of dollars)
Royal Canadian Mounted Police Superannuation Account		Fiscal year ended March 31			
1964	1965	1966	1967	1968 (prelimi- nary)Receipts- Contributions- Personnel	1.8	2.1	2.2	(D2.2	2.8Government	3.1	3.2	3.9	4.5	4.2Interest	1.6	1.9	2.4	2.9	3.5Actuarial liability	2.8	5.2	11.1	10.19.3	12.4	8.5	20.7	20.6Disbursements-	-0.7	-0.8Annuities and allowances	-0.4	-0.4	-0.5	Cash termination allowances and return of contributions	-0.2	-0.3	-0.3	-0.3	-0.2-0.6	-0.7	-0.8	-1.0	-1.0Excess of receipts over disbursements	8.7	11.7	7.7	19.7	19.6Balance in fund brought forward	37.3	46.0	57.7	65.4	85.1Balance at credit of fund	46.0	57.7	65.4	85.1	104.7
<l>Net after deduction of $0.4 million transferred to the Canada and Quebec pension plans.
October 16, 1968
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Canada pension plan account
The balance of $1,353 million at March 31, 1968 was $672 million higher than the balance at March 31, 1967.
Credits to the account of $685 million consisted of $640 million in contributions under the act, $42 million in interest from investments and $1 million in interest on the operating balance in the account on deposit with the Receiver General. Charges to the account were $13 million and consisted mainly of administrative costs.
During the year, securities totalling $665 million were purchased bringing the balance at March 31, 1968 to $1,281 million. These securities which consist of $1,275 million in provincial bonds and $6 million in federal bonds are recorded in the asset account "Canada pension plan investment fund".
TABLE 58 (in millions of dollars)
Canada Pension Plan Account	Fiscal year ended March 31		
1966	1967	1968 (preliminary)Receipts- Contributions	94.9 (i)	587.2 11.0 1.1 0.6	640.2 42.2 1.4 0.9Interest on investments	
Interest on operating balance	
Other	Payments- Administrative expenses	
Benefit payments	94.9	599.9	684.7-5.5	-8.3 -0.1	-11.5 -1.3Excess of receipts over payments	
Balance in fund brought forward	
Balance at credit of fund	
Less investment in securities held in the Canada pension plan investment fund	-5.5	-8.4	-12.889.4	591.5 89.4	671.9 680.989.4 -34.8	680.9 -615.5	1,352.8 -1,280.8Operating balance on deposit with the government	54.6	65.4	72.0
Government annuities account
The balance in this account of $1,326 million was $2 million higher than the balance at March 31, 1967. Receipts of $70 million included $19 million from premiums and $51 million in interest from the government. Disbursements of $68 million consisted mainly of vested annuity and commuted value payments and refunds of premiums. In 1966-67 receipts amounted to $72 million and disbursements were $65 million.
Old age security fund
Under the Old Age Security Act, as amended, all persons who satisfy the residence requirements of the act may receive a pension of $76.50 ($75 up to January 1, 1968) per month from the federal government out of the old age security fund provided that no pension is paid in any month before January 1966 in which the person had not attained 70 years of age, the age limit being reduced
1426
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October 16, 1968
by one in each subsequent year until 1970. A further amendment to the act in 1966-67 authorized the payment of a monthly guaranteed supplement to eligible pensioners of $30 per month in 1967 and, in any year thereafter, 40 per cent of the amount of the pension that may be paid to him dependent upon the amount of his income for the preceding year.
Receipts of $1,495 million exceeded pension payments of $1,388 million by $107 million bringing the balance in the fund to $536 million at March 31, 1968.
In 1966-67 receipts of $1,286 million exceeded pension payments of $1,073 million by $213 million, bringing the balance in the fund to $430 million at March 31, 1967.
TABLE 59 (in millions of dollars)
Old Age Security Fund	Fiscal year ended March 31				
1964	1965	1966	1967	1968 (prelimi- nary)Tax receipts-	331.8 302.6 115.7	383.2 431.9 145.2	522.1 494.9 152.3	559.5 576.6 149.5	544.5 800.1 150.0Personal income tax	
Corporation income tax	
Total tax receipts	
Pension payments	
Excess of receipts over payments	
Temporary loans brought forward	
Balance in fund brought forward	
Temporary loans by the Minister of Finance to cover deficit in fund	
Balance in fund	750.1 -808.4	960.3 -885.3	1,169.3 -927.3	1,285.6 -1,073.0	1,494.6 -1,388.1-58.3 -41.7 100.0	75.0 -100.0 25.0	242.0 -25.0	212.6 217.0	106.5 429.6217.0	429.6	536.1
A distribution by provinces of pension payments from the old age security fund is shown in the following table:
TABLE 60 (in millions of dollars)
Old Age Security Payments	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)28.8	21.2	7.663.5	49.0	14.511.5	8.7	2.847.4	36.2	11.2321.9	239.8	82.1496.9	387.4	109.580.4	63.5	16.979.6	64.0	15.693.4	72.4	21.0163.5	130.1	33.41.2	0.7	0.5
1,388.1	1,073.0	315.1
October 16, 1968
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Undisbursed balances of appropriations to special accounts
These special accounts record the undisbursed balances of appropriations for which moneys have been appropriated by parliament and from which disbursements may be made for authorized purposes in periods subsequent to that in which the appropriation was made. The balance of $93 million was $17 million more than the balance at March 31, 1967.
The balance of $65 million in the international assistance account was $3 million more than the balance at March 31, 1967. Disbursements of $47 million from the fund were more than offset by a credit of $50 million which amount was charged to budgetary expenditure of the Department of External Affairs.
The balance of $10 million in the railway grade crossing fund was $1 million less than the balance at the previous year-end. There was a credit of $15 million to the fund (charged to budgetary expenditure of the Department of Transport) and disbursements from the fund were $16 million.
The balance of $7 million in the centennial of confederation fund was $3 million more than the balance at March 31, 1967. The credit of $13 million to the fund (charged to budgetary expenditure of the Department of the Secretary of State) was partly offset by disbursements of $10 million.
The balance of $11 million in the area development account resulted from credits to the account of $26 million (charged to the budgetary expenditures of the Department of Industry) being partly offset by disbursements of $15 million. There was a nil balance in the account at March 31, 1967.

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(in millions of dollars)
Undisbursed Balances op Appropriations to Special Accounts	Balance at March 31	Increase1968 (preliminary)	1967	or decrease (-)International assistance account	64.8	61.5	3.3Railway grade crossing fund	9.5	10.3	-0.8Centennial of confederation fund	7.3	4.7	2.9Area development account	
Other	11.0	0.1 76.6	11.093.1	16.5
Refundable corporation tax
_ This account records the refundable corporation tax on cash profits of businesses, and is payable by all corporations not exempt from tax under section 62 of the Income Tax Act and by certain types of trusts on specified types of income. During the year, $39 million was collected, bringing the balance at March 31, 1968 to $235 million.
29180-91}
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Oclober 16, 1968
Provision for estimated premium on redemption of bonds
This records the estimated amount of the prorated provision to March 31, 1968 for the premium due at maturity on the then outstanding 1959 series of Canada savings bonds and the estimated amount of the prorated provision to March 31, 1968 for the special compound interest feature applicable to the centennial series of Canada savings bonds.
Deferred credits
Recorded in these accounts are amounts due the government in respect of which payment is deferred. These are contra accounts to corresponding items under the following asset categories: "loans to, and investments in, Crown corporations", "loans to national governments" and "other loans and investments". The balance of $150 million was $7 million more than the balance at March 31, 1967.	.	.
Also included in this category are premiums, received on the issue of Government of Canada bonds, which are being credited to interest on public debt on a monthly amortization basis.	.
Deferred interest in respect of The St. Lawrence Seaway Authority, which is a contra account to a corresponding item in "loans to, and investments in, Crown corporations", increased by $7 million during the year bringing the balance at March 31, 1968 to $55 million.
The government equity in the agency account of Crown Assets Disposal Corporation is a contra account to a corresponding asset account under "other loans and investments". The balance in the account of $7 million was the same as at the end of the previous fiscal year.

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(in millions of dollars)
	Balance at March 31		Increase
Deferred Credits	1968 (preliminary)	1967	or decrease (-)Deferred interest-	0.1	0.1	3.9	3.2	0.754.5	47.7	6.883.0	83.0	Balances receivable under agreements of sale of Crown assets Crown Assets Disposal Corporation-government equity	141.6 0.3 7.3 0.8	1S4-0 0.3 7.3 1.2	1 © r*
149.9	142.8	7.1
Suspense accounts
These consist of balances where some uncertainty as to disposition exists. The balance at March 31, 1968 was $4 million, approximately the same as at March 31, 1967.
Unmatured debt
The unmatured debt of Canada in the amount of $20,580 million was $640 million more than the previous fiscal year-end total. Obligations payable in Canada were $20,420 million and those payable in New York were $160 million compared with $19,575 million and $365 million respectively at March 31, 1967.
October 16. 1968
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TABLE 64 (in millions of dollars)
Unmatured Debt	Balance at March 31	Increase1968 (preliminary)	1967	or decrease (-)Payable in Canada- Marketable bonds	11,541.3	10,986.3	555.0Non-marketable bonds-	Canada savings bonds	6,096.5	6,016.4	80.1Canada pension plan	5.7	1.9	3.8Unemployment Insurance Commission	296.0	260.0	36.017,939.5	17,264.6	674.9Treasury bills	2,480.0	2,310.0	170.020,419.5	19,574.6	844.9Payable in New York*1*®)	160.4	365.6	-205.220,579.9	19,940.2	639.7
("Marketable bonds.
("Converted at the official parity rate of $1 U.S. = $1.08108 Canadian.
Details of the various loan issues, maturities and redemptions resulting in the net increase are described more fully in the section "The Public Debt".
Current assets	Asset Accounts
These accounts consist of various cash accounts, working capital advances and the securities investment account.

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Fiscal Years Ended March 31 Billions of Dollars
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October 16, 1968
Total current assets at $1,530 million were $136 million more than at March 31, 1967. The main changes were an increase of $261 million in the cash accounts and a decrease of $153 million in the securities investment account.
The defence production revolving fund records the cost of materials procured for use in the manufacture of defence equipment until such time as they are billed to the Department of National Defence or sold to defence contractors for use in the manufacture of defence equipment, as well as working capital loans and advances for their production. During 1967-68 purchases exceeded sales by $5 million bringing the balance in the account to $39 million at March 31, 1968.
TABLE 65 (in millions of dollars)
Current Assets	Balance at 1968 (preliminary)	March 31 1967	Increase or decrease (-)
Cash accounts-			
Cash in current deposits*1)	1,014.8	813.9	200.9Cash in special deposits	1.3	1.0	0.3Cash in hands of collectors and in transit	244.3	194.3	50.0Moneys received after March 31 but applicable to the current year	^f....	20.4	15.3	5.1Post office-cash on hand and in transit	18.7	14.0	4.71,299.5	1,038.5	261.0Departmental working capital advances-	Agricultural commodities stabilization account	1.4	2.0	-0.6Defence production revolving fund	39.0	34.0	5.0Miscellaneous departmental imprest and standing advances	12.9	10.1	2.8Miscellaneous departmental accountable advances	14.2	13.1	1.1Royal Canadian Mint	15.6	18.0	-2.4Stockpiling of uranium concentrates	74.9	57.2	17.7Transport stores account	11.4	10.1	1.3Other	17.1	13.3	3.8Securities investment account	186.5	157.8	28.744.4	197.7	-153.31,530.4	1,394.0	-136.4
^Receiver General year-end balances in New York, London, Paris, Brussels and Bonn are at the [DOT]Canadian dollar equivalent of exchange rates at March 31.
October 16, 1963
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The stockpiling of uranium concentrates account records the acquisition of uranium concentrates in accordance with contracts entered into with the approval of the Governor in Council by the Eldorado Mining and Refining Limited on behalf of Her Majesty in right of Canada with certain mining companies. The balance at March 31, 19G8 was $75 million, $18 million higher than the balance at the previous year-end.
Cash in blocked currency
The balance in this account was $2 million, the same as at March 31, 1967.
Notes of Industrias Forestales, S.A. and Compania Manufacturera de Papeles y Cartones, S.A., held by the Export Credits Insurance Corporation, and which were due in 1965 and 1966, could not be paid in accordance with their terms because the Chilean Government was unable to make available the necessary Canadian currency. An alternative scheme was devised whereby the debtors could make their payments on the notes.
The Export Credits Insurance Corporation received the payments in Chile in Canadian dollars and the amount upon receipt was paid to the Receiver General of Canada into a blocked account established by the Receiver General with the Central Bank of Chile, the Government of Chile to pay interest of 6 per cent per annum on the sums held in this account in dollars directly to the Receiver General of Canada in Ottawa.
The Government of Chile agreed to the withdrawal of these funds from this account of 20 per cent of the deposits made to the account in 1965 in each of the years 1968 to 1972 and 20 per cent of the deposits made to the account in 1966 in each of the years 1969 to 1973.
Advances to the exchange fund account
Advances during the year to finance the purchase of gold and foreign exchange amounted to $1,508 million and repayments were $1,830 million, resulting in a net decrease of $322 million bringing the outstanding advances to $2,033 million at March 31, 1968.
During 1966-67 advances of $1,098 million and repayments of $1,439 million resulted in a balance of $2,355 million at March 31, 1967.
Investments in United States dollar securities issued by other than the Government of Canada
This account includes the special securities issued by the Government of the United States of America and purchased by Canada pursuant to agreements made to carry out the Columbia River Treaty between the Government of the United States and the Government of Canada. During 1967-68 securities in the amount of $32 million were redeemed leaving a balance of $123 million.
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October 16, 1968
Also included at March 31, 1967 was an investment in bonds of the international bank for reconstruction and development, which amounted to $25 million. During 1967-68 these bonds were liquidated leaving a nil balance at March 31, 1968.
Canada pension plan investment fund
The Canada pension plan investment fund records securities purchased under the Canada Pension Plan Act and the sale of these securities. The amount by which the operating balance of the Canada pension plan account in any month exceeds the estimated amount required to meet all payments in the following three-month period is available for the purchase of securities of participating provinces. Securities of Canada shall be purchased with the excess remaining after purchasing securities of each province as required. The holdings in the account at March 31, 1968 totalled $1,281 million of which $6 million was in federal government securities.
TABLE 66 (in millions of dollars)
Canada Pension Plan Investment Fund	Balance at March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Securities of-			
Newfoundland	23.7	11.7	12.0Nova Scotia	47.9	22.6	25.3Prince Edward Island	4.3	2.0	2.3New Brunswick	37.0	17.7	19.3Quebec	2.2	0.4	1.8Ontario	728.6	352.7	375.9Manitoba	76.4	37.0	39.4Saskatchewan	55.6	25.9	29.7Alberta	113.3	54.1	59.2British Columbia	186.1	89.5	96.6Government of Canada	5.7	1.9	3.81,280.8	615.5	665.3
Investments held for retirement of unmatured debt
Recorded herein is $7 million of the 5§ per cent loan issued August 1, 1962 and maturing August 1, 1980 and $1 million of the 5| per cent loan issued February 1, 1966 and maturing August 1, 1980.
October IS, 1968
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Loans to, and investment in, Crown corporations
Loans and investments in this category totalled $7,939 million, an increase of $1,211 million over the total at March 31, 1967.
TABLE 67 (in millions of dollars)
Loans to, and Investments in, Crown Corporations	Balance at March 31	Increase1968 (preliminary)	1967	decrease (-)Atomic Energy of Canada Limited	138.9	106.0	32.9Bank of Canada	5.9	5.9	Canada Deposit Insurance Corporation	29.4	29.4Canadian Arsenals Limited	5.0	5.0	Canadian Broadcasting Corporation	9.0	9.0	Canadian Commercial Corporation	16.5	10.0	6.5Canadian Dairy Commission	22.2	0.1	22.1Canadian National Railways	1,777.1	1,613.9	163.2Air Canada	8.0	7.4	0.61,785.1	1,621.3	163.8Canadian Overseas Telecommunication Corporation	52.4	49.8	2.6Cape Breton Development Corporation	9.1	9.1Central Mortgage and Housing Corporation	3,575.4	2,941.5	633.9Eldorado Mining and Refining Limited	8.2	8.2	Export Credits Insurance Corporation	199.1	164.4	34.7Farm Credit Corporation	921.7	752.5	169.2National Capital Commission-excluding Greenbelt	37.4	37.1	0.3National Harbours Board	250.0	222.3	27.7Northern Canada Power Commission	33.6	30.7	2.9Polymer Corporation Limited	30.0	30.0	The St. Lawrence Seaway Authority-	Loans	362.9	345.4	17.5Deferred interest	54.5	47.8	6 7Interest-free loans	75.0	72.5	2.5lfiZ.lt	465.7	26.7Recovery likely to require parliamentary appropriations-	Canadian Broadcasting Corporation	74.1	55.7	18.4Canadian Corporation for the 1967 World Exhibition..	205.0	175.0	30.0National Capital Commission-Greenbelt	37.7	37.2	0.5S16.8	267.9	48.9Other Crown Corporations	1.3	1.2	0.17,939.4	6,728.6	1,210.8
Atomic Energy of Canada Limited
There was a balance of $139 million in this account at March 31, 1968 consisting of an investment of $15 million by the government in capital stock and loans of $124 million of which $70 million was in respect of the Douglas Point generating station. Comparable amounts at March 31, 1967 were $106 million consisting of $15 million in capital stock and loans of $91 million of which $67 million was for the Douglas Point generating station.
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October 16. 1968
Canadian Broadcasting Corporation
There was no change in the advances for working capital during 1967-68, the balance remaining at $9 million at March 31, 1968. During the year advances to the corporation for the purpose of capital expenditures were $18 million, bringing the total of advances to $74 million at the fiscal year-end. Recovery of these advances is likely to require parliamentary appropriations in subsequent fiscal years.
Canadian Corporation for the 1967 World Exhibition
This account records the acquisition of securities issued by the corporation in accordance with the Canadian Corporation for the 1967 World Exhibition Act. The balance in the account at March 31, 1968 was $205 million compared with $175 million at March 31, 1967. Recovery of these advances is likely to require parliamentary appropriations in subsequent fiscal years.
Canadian National Railways (including Air Canada)
Outstanding advances to the Canadian National Railways at March 31, 1968 of $1,785 million were $164 million more than the balance of $1,621 million at the previous fiscal year-end.

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(in millions of dollars)
Advances to the Canadian National Railways	Balance at March 31	Increase1968 (preliminary)	1967	decrease (-)Capital Revision Act, 1952-	1,105.2	1,075.2	30.0100.0	100.0	27.0	27.0	28.4	28.4	50.0	40.0	10.027.0	27.013.0	13.0395.3	323.0	72.3Loans for maintenance, repair and acquisition of passenger	2.9	3.3	-0.411.3	11.317.0	17.0	Air Canada	8.0	7.4	0.61,785.1	1,621.3	163.8
During 1967-68 the government made available $211 million to the company and received repayments of $47 million, resulting in a net increase of $164 million in outstanding advances. In 1966-67 advances were $149 million and repayments were $21 million.
October 16, 1968

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(in millions of dollars)
Advances to, and Repayments by, the Canadian National Railways	Fiscal year ended March 31	Increase1968 (preliminary)	1967	decrease (-)Advances-	For the refunding of debt	72.3	50.0	22.3Financing and Guarantee Act, 1965 and 1966	10.0	40.0	-30.0Financing and Guarantee Act, 1967	27.0	27.0Maintenance, repair and acquisition of passenger equip-	ment	3.3	-3.3Temporary loans-acquisition of bonds	11.3	11.3For interim financing of income deficits-	Canadian National Railways	48.9	16.0	32.9Air Canada	11.6	8.4	3.2Total advances	181.1	117.7	63.4Purchase of 4 per cent preferred stock (C.N.R. Capital	Revision Act, 1952)	30.0	30.9	-0.9211.1	148.6	62.5Repayments- Maintenance, repair and acquisition of passenger equip-	ment	-0.4	-0.4Advances for interim financing of income deficits- Canadian National Railways	-35.9	-16.0	-19.9Air Canada	-11.0	-5.3	-5.7-Jf7.S	-21.8	-26.0Net increase or decrease (-) during the fiscal year	163.8	127.3	36.5
In 1967-68 the government advanced to the company $121 million for capital purposes and the refunding of debt in the hands of the public.
To assist the company to finance further capital expenditure during the year, the government purchased $30 million of the 4 per cent preferred stock of the company. This stock is issued under the authority of the Canadian National Railways Capital Revision Act, 1952, in an amount equal to 3 per cent of the gross revenue of the company.
The government provided the company with temporary loans of $36 million in respect of its 1967 deficit which were repaid when the company's income deficit of $36 million was charged to the 1967-68 budgetary expenditures and $13 million in respect of its 1968 operations.
At March 31, 1967 temporary loans of $7 million were outstanding to Air Canada in respect of its 1967 operations. An additional $4 million was advanced during the year for its 1967 operations. These were repaid by the company during 1967-68. However, additional loans of $8 million were made in 1967-68 in respect of the company's 1968 operations.
Central Mortgage and Housing Corporation
The balance of $3,575 million in this account at March 31, 1968 was $634 million higher than at March 31, 1967, and comprised the Crown's investment of $25 million in the capital of the corporation and $3,550 million in loans and advances.
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October 16, 1968
Loans and advances to the corporation during 1967-68 were $767 million and repayments were $133 million. In 1966-67 advances were $615 million and repayments were $126 million.
Advances comprised $680 million for direct lending and limited dividend housing, $14 million for federal-provincial projects, $29 million in respect of municipal sewage treatment, $43 million for university housing and $1 million for urban renewal.
Repayments of $133 million included $100 million for direct lending and limited dividend housing, $3 million for federal-provincial projects, $15 million for the loan and mortgage purchase fund, $12 million for sewage treatment and $2 million in respect of acquisition or construction of real estate.

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(in millions of dollars)
Advances to, and Repayments by, Central Mortgage and Housing Corporation	Fiscal year ended March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Advances- . . Direct lending, limited dividend and public housing....	680.5 29.1 42.5 14.0 0.5	499.0 46.3 31.0 21.5 16.8	181.5 -17.2 11.5 -7.5 -16.8 0.5
			
			
			
			
Repayments- . Direct lending, limited dividend and public housing....			
766.6	614.6	152.0-99.6 -12.4 -0.6 -2.9 -14.9 -2.3	-86.5 -17.5 -0.5 -4.0 -14.5 -3.0	-13.1 5.1 -0.1 1.1 -0.4 0.7-132.7	-126.0	-6.7633.9	488.6	145.3
Export Credits Insurance Corporation
The outstanding balance of $199 million in this account at March 31, 1968 consisted of $5 million for capital stock, $5 million for working capital and $189 million for loans under section 21A of the Export Credits Insurance Act. This section of the act authorizes the making of loans, on security of a guaranteed instrument, to the corporation by the Minister of Finance. Comparable amounts in 1966-67 were $5 million for capital stock, $5 million for working capital and $154 million for loans.
October 16, 1968
[Stage Direction]
Farm. Credit Corporation
The government provides loans to the corporation which makes loans on farm property. The balance of $922 million in the account at March 31, 1968 consisted of the Crown's investment of $36 million in the capital of the corporation and $886 million in loans and advances. At March 31, 1967 the balance was $753 million consisting of capital investment of $29 million and loans and advances of $724 million.
The 1967-68 transactions in the account consisted of additional subscriptions by the government of $7 million to the capital of the corporation, loans and advances of $195 million and repayments by the corporation of $33 million. In 1966-67 additional subscriptions were $6 million, loans and advances were $183 million and repayments were $25 million.
National Capital Commission
Loans to acquire property in the "Greenbelt" area increased by $1 million during the year bringing the balance to $38 million. Recovery of these loans is likely to require parliamentary appropriations in subsequent fiscal years.
Loans to acquire property excluding the "Greenbelt" area totalled $37 million at March 31, 1968, the same as at March 31, 1967.
The St. Lawrence Seaway Authority
Outstanding obligations in this account at March 31, 1968 amounted to $492 million and comprised $363 million in interest-bearing loans, $75 million in interest-free loans and $54 million in deferred interest. At March 31, 1967 outstanding obligations were $465 million consisting of $345 million in interestbearing loans, $72 million in interest-free loans and $48 million in deferred interest.
Other Crown Corporations
Advances to the Canadian Commercial Corporation increased by $7 million during 1967-68 and advances to the National Harbours Board increased by $28 million.
Loans to national governments
There was an increase of $4 million in this category bringing the total balance to $1,206 million at March 31, 1968.
The United Kingdom repaid $19 million of the $1,185 million loan made under the $1,250 million credit authorized by the United Kingdom Financial Agreement Act, 1946, reducing the principal to $957 million at March 31, 1968.
Advances under Part II of the Export Credits Insurance Act to Belgium, France and The Netherlands to assist them in the purchasing of goods in Canada were reduced by a repayment of $2 million, bringing the balance at March 31, 1968 to $120 million. The decrease of $2 million is the regular annual payment by the Government of Belgium. There were no repayments by the Governments of France and The Netherlands as each of these countries had made advance payments in 1962-63 covering instalments up to and including the 1969 instalment.
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October 16, 1968
Loans to India for the purchase in Canada of aircraft and associated spare parts at $1 million were $3 million less than at March 31, 1967.
The special loan assistance-developing countries account is an account which records loans which are subject to terms and conditions as the Governor in Council may approve, for the purpose of undertaking agreed-upon economic, educational and technical projects. The balance in the account at March 31, 1968 was $44 million, an increase of $29 million over the balance at the previous year-end.
TABLE 71 (in millions of dollars)
Loans to National Governments	Balance at March 31	Increase1968 (preliminary)	1967	decrease (-)Loans to United Kingdom-	The United Kingdom Financial Agreement Act, 1946...	957.0	976.2	-19.2Deferred interest	83.0	83.0	1,040.0	1,059.9	-19. 9Loans under the Export Credits Insurance Act, Part II-	Belgium	20.8	23.1	-2.3France	67.0	67.0	The Netherlands	32.1	32.1	Special loans to Colombo plan countries to finance the purchase of wheat and flour from Canada-	119.9	199.9	-i.SCeylon	
Miscellaneous loans and advances- India-loan for purchase of aircraft and associated spare	0.3	-0.3parts	1.3	4.0	-2.7France-interim credits-consolidated interest	0.7	0.7	Special loan assistance-developing countries	44.1	15.0	29.1Other	0.1	0.2	-0.145.2	19.9	96. S1,206.1	1,201.6	4.5
Other loans and investments
Balances in these accounts totalled $1,946 million at March 31, 1968, $232 million more than at the end of the previous fiscal year.
Oclober 16, 1968

[Stage Direction]
(in millions of dollars)
Other Loans and Investments	Balance at March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Subscriptions to capital of, and working capital advances and loans to, international organizations- Canada's subscriptions to capital of- Asian development bank	5.4	2.7	2.7International bank for reconstruction and development 	85.0	85.0	International development association	85.7	70.7	15.0International finance corporation	3.5	3.5	International monetary fund	782.7	782.7	Working capital advances and loans to international organizations	7.3	7.6	-0.3Loans to provincial governments- Alberta	969.6	952.2	17.44.9	5.4	-0.5British Columbia	9.4	10.3	-0.9Manitoba	10.8	9.5	1.3New Brunswick	45.2	31.8	13.4Newfoundland	30.4	17.7	12.7Nova Scotia	38.4	22.4	16.0Prince Edward Island	0.5	0.5Quebec	18.9	18.9Saskatchewan	29.2	26.4	2.8Veterans land act fund	187.7	123.5	64.2406.2	333.8	72.4Less reserve for conditional benefits	-23.3	-22.4	-0.9382.9	311.4	71.5Municipal development and loan board advances	280.6	236.3	44.3Leas reserve for forgiveness of indebtedness	-0.2	-5.1	4.9Miscellaneous- Assisted passage scheme	280.4	231.2	49.213.2	11.1	2.1Balances receivable under agreements of sale of Crown assets	1.3	1.2	0.1City of Montreal- Atwater tunnel	1.7	1.8	-0.1St. Remi tunnel	0.9	1.0	-0.1City of Whitehorse	1.8	1.9	-0.1Construction of dock and rail facilities for Steep Rock Iron Mines Limited	0.5	0.7	-0.2Crown Assets Disposal Corporation- Government equity in agency account	7.3	7.3	Defence plant modernization	10.2	10.2Dominion Coal Company Limited	4.5	4.5	Fraser River Harbour Commission	1.1	1.2	-0.1Hamilton Harbour Commissioners	3.6	1.7	1.9Housing projects for Canadian forces	21.6	20.5	1.1Loans to manufacturers of automotive products in Canada	20.5	12.6	7.9Municipal Improvements Assistance Act, 1938	0.6	0.7	-0.1Northwest Territories	12.8	8.9	3.9Ottawa civil service recreational association re W. Clifford Clark Memorial Recreational Centre	1.0	1.0	Toronto Harbour Commissioners	1.4	1.5	-0.1Town of Oromocto Development Corporation	1.1	1.1	Yukon Territory	9.7	7.2	2.5Other	6.6	5.7	0.9121.4	91.6	29.8Recovery likely to require parliamentary appropriations- Town of Oromocto, New Brunswick	3.9	4.1	-0.21,945.9	1,714.0	231.9
October 16. 1968
Canada's subscriptions to the capital of international organizations were $17 million higher due mainly to additional subscriptions of $15 million to the international development association. Working capital advances and loans to international organizations at $7 million were approximately the same as at the previous fiscal year-end.
Loans to provincial governments totalled $188 million at March 31, 1968, an increase of $64 million over the total at the previous fiscal year-end due mainly to increases of $10 million in loans to Newfoundland, $11 million to Nova Scotia and $8 million to New Brunswick pursuant to the Atlantic Provinces Power Development Act and to the setting up as loans overpayments of $38 million arising out of payments made under the Federal-Provincial TaxSharing Arrangements Act.
The veterans land act fund was established by An Act to amend the Veterans' Land Act, assented to June 30, 1965, to record advances made under the Veterans' Land Act, for the acquisition, by the Director, of properties, buildings, materials, livestock, farm equipment and commercial fishing equipment for purposes of the act, for sale to qualified veterans of world war 2 and Korea under sales agreements which carry specified conditional benefits if the terms of such agreements are adhered to by the veterans, and for progress payments to veterans during construction of housing. Advances during the year of $103 million and repayments of $30 million brought outstanding advances at March 31, 1968 to $406 million. This was partly offset by a reserve for conditional benefits amounting to $23 million, resulting in a net balance of $383 million at the fiscal year-end.
Under the Municipal Development and Loan Act advances are made to the Municipal Development and Loan Board to provide financial assistance by way of loans to municipalities to augment or accelerate municipal capital works programs. Where the municipal project in respect of which a loan is made is completed on or before September 30, 1966, the board shall forgive payment by the municipality of 25 per cent of the principal amount of the loan. If a project is not completed as at September 30, 1966, the board shall forgive 25 per cent of that portion of the loan that has been advanced to the municipality as of September 30, 1966. At March 31, 1968, advances totalled $281 million, an increase of $44 million over the total at March 31, 1967. These advances were partly offset by a reserve for forgiveness of indebtedness consisting of amounts charged to budgetary expenditure to cover 25 per cent of the amounts of the advances. At March 31, 1968, there was a reserve of $200 thousand compared with $5 million at March 31, 1967.
Miscellaneous loans and investments totalled $121 million at March 31, 1968, an increase of $30 million over the balance at March 31, 1967, due mainly to loans of $10 million for defence plant modernization and an increase of $8 million in loans to manufacturers of automotive products in Canada.
Loans to manufacturers of automotive products in Canada were made in accordance with terms and conditions prescribed by the Governor in Council, to assist manufacturers of automotive products in Canada affected by the Canada-United States Agreement on Automotive Products to adjust and expand their production; such loans to be made for the purpose of acquisition, construction, installation, modernization, development, conversion or expansion of land, buildings, equipment, facilities or machinery and for working capital. Loans to these manufacturers amounted to $21 million compared with $13 million at March 31, 1967.
October 16, 1968
[Stage Direction]
Loans for defence plant modernization, which is a new account, records advances made subject to the approval of the Treasury Board to assist defence manufacturers with defence plant modernization. During 1967-68 net advances totalling $10 million were made.
Securities held in trust
Recorded herein are the security holdings in connection with various deposit and trust accounts and annuity, insurance and pension accounts. Bonds and certified cheques held in connection with contractors' securities included in the deposit and trust category are also recorded under this heading. The balance at March 31, 1968 was $60 million, an increase of $9 million over the previous fiscal year-end balance.
Deferred charges
These consist of the unamortized balances of actuarial deficiencies in the Canadian forces superannuation account, the public service superannuation account and the Royal Canadian Mounted Police superannuation account and the outstanding unamortized loan flotation costs.
The balances in these accounts totalled $492 million at March 31, 1968 compared with $582 million at March 31, 1967.

[Stage Direction]
(in millions of dollars)
Defebred Charges	Balance at March 31		Increase or decrease (-)
	1968 (preliminary)	1967	
Unamortized portions of actuarial deficiencies- Canadian forces superannuation account	187.6	260.2	-72.6Public service superannuation account	150.4	189.4	-39.0Royal Canadian Mounted Police superannuation account	15.8	11.0	4.8SBS.8	460.6	-106.8Unamortized loan flotation costs	138.2	121.2	17.0492.0	581.8	-89.8
Unamortized portions of actuarial deficiencies
At March 31, 1968 these totalled $354 million compared with $461 million at March 31, 1967, a decrease of $107 million.
Any actuarial deficiencies revealed by quinquennial valuations are credited to the superannuation accounts and charged to this account and amortized to budgetary expenditure in five equal annual instalments commencing in the fiscal year in which the report is laid before parliament. Also, the cost of benefits payable under the superannuation acts as a result of the authorization of salary increases are credited to the superannuation accounts and charged to this account and amortized to budgetary expenditure over a period of five years commencing in the year in which the increase is authorized.
The unamortized portion of the actuarial deficiency in the Canadian forces superannuation account was $188 million compared with $260 million at March 31, 1967. During the year $73 million was amortized as a charge to budgetary expenditure.
[Stage Direction]
October 16, 1968
The unamortized portion of the actuarial deficiency in the public service superannuation account was $150 million compared with $189 million at March 31, 1967. During the year $22 million was charged thereto as a result of salary increases and $61 million was amortized as a charge to budgetary expenditure.
The unamortized portion of the actuarial deficiency in the Royal Canadian Mounted Police superannuation account was $16 million compared with $11 million at March 31, 1967. During the year $8 million was charged thereto as a result of the quinquennial actuarial valuation made as at December 31, 1964 and $2 million due to salary revisions and $5 million was amortized as a charge to budgetary expenditure.
Unamortized loan flotation costs
This account records the residual balances of discounts, commissions, redemption bonuses and conversion premiums on loan flotations that have not been charged to budgetary expenditures. The balance of $138 million was $17 million more than the previous fiscal year-end balance.

[Stage Direction]
(in millions of dollars)
Unamortized Loan Flotation Costs
Fiscal year ended March 31
(preliminary)
Balance of account at beginning of fiscal year.
121.2
106.2
New loan flotation costs to be amortized-
41% loan April i, 1967-April 1, 1968	
5% loan April 1, 1967-October 1, 1973	
5i% loan April 1, 1967-May 1, 1990'	
41% loan June 1, 1967-June 15, 1968	
51% loan June 1, 1967-December 1, 1974	
5% loan August 1, 1967-October 1, 1968	
51% Joan August 1, 1967-April 1, 1969	
6% loan August 1, 1967-December 15, 1971 -. ...
4J% loan October 1, 1967-December 15, 1968..
51% loan October 1, 1967-December 15, 1969.
6% loan October 1, 1967-April 1, 1971	
6-}% loan December 1,1967-December 1, 1973.... 6% loan January 15, 1968-February 15, 1970..
AdjustmentsO)	
Treasury bills discounts	
Canada savings bonds-adjustment previous issues
Canada savings bonds-new issue	
4*% loan May 1, 1966-April 1, 1967	
5% loan May 1, 1966-July 1, 1970	
5i% loan May 1, 1966-August 1, 1980	
4j% loan September 1, 1966-October 1, 1967.
5f% loan September 1, 1966-October 1, 1969..
5J% loan September 1, 1966-September 1, 1992 -
5f% loan December 15, 1966-January 15, 1968.
5f% loan December 15, 1966-December 15,1970.. 51% loan February 1, 1967-October 1, 1975..
0.4
2.8
4.4 0.3 1.1 0.1 0.1 4.0 1.3
1.5 0.8 1.9
1.5
0.2
30.1
0.7
12.6
63.8
20.5 0.4
20.5 1.8 0.9
4.2
2.6
1.3
5.4 0.6 1.9 1.2
61.3
Less-
Amortization applicable to fiscal year-
Canada savings bonds and general loans	_	
Discounts on treasury bills charged to interest on public debt..
-26.3
-20.5
-46.8
-29.8 -16.5 i-46.3
Increase or decrease (-) during the year Balance of account at end of fiscal year..
17.0
138.2
15.0
121.2
<* Adjustments due to cancellations and additional issues of existing loans.
October 16, 1968
[Stage Direction]
Cost of new loans issued during 1967-68 and charged to the account amounted to $64 million, of which $30 million was in respect of treasury bills discounts which will be charged to interest on public debt in 1968-69. Credits to the account were $47 million, of which $26 million was a charge to the budgetary item "annual amortization costs" and $21 million (representing discount applicable to 1967-68 on treasury bills sold in 1966-67) was a charge to the budgetary item "interest on public debt".
. Treasury bills discounts applicable to the current fiscal year are charged to interest on public debt at time of sale. That portion of the discounts applicable to the subsequent fiscal year is charged to this account and transferred to interest on public debt in the following year.
Capital assets
Assets of the government such as land, buildings, works and equipment, etc., that are charged to budgetary expenditure at the time of acquisition or construc-tjon.' _afe included in this category and are shown on the statement of assets and liabilities at a nominal value of $1.
Inactive loans and investments
Loans and investments which are not currently revenue-producing or realizable are recorded herein. Included are the loan of $49 million to China under the Export Credits Insurance Act, loans totalling $24 million and $7 million made to Roumania and Greece, respectively, in 1919-20 and 1920-21 and advances of $15 million in respect of the implementation of guarantees (Ming Sung Industrial Company Limited).
Reserve for losses on realization of assets
There has been no change in this reserve since the fiscal year 1956-57. The balance at March 31, 1968 was $546 million.
Net Debt
The net debt of Canada, or the excess of liabilities over net recorded assets, was $16,757 million at March 31, 1968 compared with $15,965 million at March 31, 1967. The increase of $792 million reflects the 1967-68 budgetary deficit.

[Stage Direction]
The government's bank balances represent current deposits to the credit of the Receiver General of Canada in the Bank of Canada, chartered banks in Canada and certain banks in London, New York, Paris, Brussels and Bonn. These balances totalled $1,015 million at March 31, 1968, an increase of $201 million over the balance of $814 million at March 31, 1967.
The cash position of the government is affected not only by budgetary transactions but also by changes in the government's unmatured debt and other non-budgetary transactions. Non-budgetary transactions are those which affect the government's asset and liability accounts and must be taken into account when considering the full scope of the government's financial operations and their effect on the economy of the country.
[Stage Direction]
October 16, 1968
On the asset side, the non-budgetary transactions consist, for the most part, of loans and advances to, and repayments by, Crown corporations and other government agencies and funds (including the old age security fund), national, provincial and municipal governments, international organizations, veterans and other borrowers. On the liability side they relate mainly to receipts and payments in connection with the many deposit and trust accounts, and annuity, insurance and pension funds held or administered by the government.
The following statement summarizes both the budgetary and non-budgetary transactions for 1967-68 and indicates how they affected the government's cash position. For purposes of comparison the corresponding figures for 1966-67 are also shown.
TABLE 75 (in millions of dollars)
Changes in Cash Position
Budgetary transactions-
Revenue	
Expenditure	
Deficit.
Non-budgetary transactions (excluding unmatured debt transactions)-
Receipts and credits (net)	
Disbursements and charges (net)	
Net amount available from or required for ( getary transactions	
-) non-bud-
Overall cash requirement to be financed by increase in unmatured debt or decrease in cash balances.
hands of the public-
TJnmatured debt-
Canada savings bonds	
Marketable issues	
Treasury bills	
Special issues-	_
Unemployment Insurance Commission. Canada pension plan	
Fiscal year ended March 31
Securities investment account	
Investments field for retirement of unmatured debt....
Net increase in Receiver General Bank balances.
1968 (preliminary)	1967
9,076.6	8,358.2
-9,869.0	-8,779.7
-792.4	-421.5
2,415.1	2,043.1
-2,209.9	-2,152.7
205.2	-109.6
-587.2	-531.1
80.1	283.2
349.8	269.4
170.0	160.0
36.0	116.0
3.8	1.8
639.7	830.4
153.3	-116.2
-4.9	-3.2
788.1	711.0
200.9	179.9
Note: In 1967-68 a change in practice was introduced whereby revenues arising from Royal Canadian Mounted Police expenditures were credited thereto. For purposes of comparision 1966-67 figures have been adjusted.
In 1967-68 a deficit of $792 million in budgetary transactions and net receipts of $205 million for non-budgetary transactions (excluding unmatured debt transactions) resulted in a net cash requirement of $587 million for the fiscal year. As transactions in unmatured debt during the year resulted in an increase of $788 million in outstanding unmatured debt as at March 31, 1968, Receiver General bank balances were increased by $201 million. In 1966-67
October 16, 1968
[Stage Direction]
the budgetary deficit of $422 million and net disbursements of $109 million from non-budgetary transactions resulted in a cash requirement of $531 million. As outstanding unmatured debt increased by $711 million, Receiver General bank balances were increased by $180 million.
Non-budgetary receipts and credits (excluding unmatured debt transactions)
Non-budgetary receipts and credits of $2,415 million in 1967-68 included $1,137 million in respect of annuity, insurance and pension accounts, $379 million in repayments of loans, investments and advances and $899 million in sundry other accounts.
Further details are given in the following table:
TABLE 76 (in millions of dollars)
Fiscal year ended March 31
Non-Budgetary Receipts and Credits (Net)
(preliminary)
Repayments of loans, investments and advances-
Investments in United States dollar securities issued by other than the
Government of Canada	
Exchange fund account	
Annuity, insurance and pension accounts- Superannuation accounts-
Public service	
Canadian forces	
Royal Canadian Mounted Police.
Canada pension plan account	
Old age security fund	
Other	
Other receipts and credits-
Non-interest-bearing notes	
Outstanding treasury cheques	
Accounts payable	
Interest accrued	
Interest due and outstanding	
Canadian Commercial Corporation-special deposit	
Canadian Dairy Commission	
Provincial tax collection agreements account	
Undisbursed balances of appropriations to special accounts.
Refundable corporation tax	
Deferred credits	
Surplus Crown assets (National Defence)	
Deferred charges	
Miscellaneous	
57.4	7.2
321.7	341.0
379.1	348.2
186.3	299.1
146.3	392.8
19.6	19.7
671.9	591.5
106.5	212.6
6.5	7.3
1,137.1	1,523.0
450.3	111.0
44.8	49.7
65.7	74.2
29.1	31.9
50.3	0.4
38.2	
25.2	
27.7	26.2
16.5	-25.4
39.1	196.2
7.1	4.7
6.8	15.2
89.8	-325.3
8.3	13.1
898.9	171.9
2,415.1	2,043.1
Non-budgetary disbursements and charges (excluding unmatured debt transactions)
Non-budgetary disbursements and charges of $2,210 million in 1967-68 included $1,476 million for loans, investments and advances and $734 million in other charges.
[Stage Direction]
October 16, 1968
Further details are given in the following table:
TABLE 77 (in millions of dollars)
	Fiscal year ended March 31	
Non-Btjdgetaby Disbursements and Charges (Net)	1968 (preliminary)	1967Loans, investments and advances-	5.0	11.417.7	20.132.9	28.429.4	18.4	35.030.0	131.06.5	4.522.2	163.8	127.32.6	-2.79.1	633.9	488.634.7	36.2169.2	164.10.8	7.027.7	19.52.9	0.826.7	29.84.5	-23.617.7	227.549.2	122.371.5	55.264.2	26.810.2	7.9	12.517.2	12.31,475.9	1,534.0Other disbursements and charges-	665.3	580.64.7	-3.450.0	70.25.1	-27.68.9	-1.17 84.0	618.72,209.9	2,152.7

[Stage Direction]
Gross and net debt
The gross debt of Canada, or the total of liabilities as recorded on the statement of assets and liabilities, was $32,926 million at March 31, 1968, an increase of $2,586 million over the total at March 31, 1967. The main changes were increases of $1,137 million in annuity, insurance and pension accounts, $640 million in unmatured debt and $639 million in current and demand liabilities. Unmatured debt at $20,580 million represented 63 per cent of the total and annuity, insurance and pension accounts at $9,053 million represented 27 per cent. At March 31, 1967 unmatured debt was $19,940 million or 66 per cent and annuity, insurance and pension accounts totalled $7,916 million or 26 per cent.
October 16, 1968
[Stage Direction]
The government's net recorded assets were $16,169 million at March 31, 1968 an increase of $1,794 million over the total at March 31, 1967. The main changes were increases of $1,211 million in loans to, and investments in, Crown corporations, $665 million in the Canada pension plan investment fund and $232 million in other loans and investments and a decrease of $322 million in advances to the exchange fund account. Loans to, and investments in, Crown corporations represented 49 per cent of the total and advances to the exchange fund represented 12 per cent. At March 31, 1967 loans to, and investments in, Crown corporations were $6,729 million or 47 per cent and advances to the exchange fund were $2,355 million or 16 per cent.
The net debt of Canada was $16,757 million at March 31, 1968 reflecting an increase of $792 million, equivalent to the 1967-68 budgetary deficit.

[Stage Direction]
Statement of Public Debt, Unmatured Debt, Net Recorded Assets and Net Debt of Canada
(in millions of dollars)
As at March 31	Gross Public Debt	Less net recorded assets	Increase Net in net debt debt during fiscal yearUnmatured debt	Other liabilities	Total	1964	
1965	
1966	
1967	
1968	(preliminary)	18.740.1 18.978.2 19.109.8 19.940.2 20.579.9	7,183.3 7,585.7 8,373.1 10,399.9 12,346.4	25,923.4 26.563.9 27.482.9 30,340.1 32,926.3	10,853.3 11.059.5 11.939.5 14,375.2 16,168.9	15,070.1 1,150.4 15.504.4	434.0 15.543.4	39.0 15,964.9 421.5 16.757.4	792.4

[Stage Direction]
Billions of Dollars Fiscal Years Ended March 31

[Stage Direction]
Billions of Dollars
[Stage Direction]
Oclobei 16. 1968
Unmatured debt
Total unmatured debt of $20,580 million was $640 million more than the balance at March 31, 1967.
The government's holdings of its own securities as at March 31, 1968 was comprised of $44 million in the securities investment account (of which $41 million was Canada savings bonds held in respect of the employees instalment purchase plan) and $8 million in investments held for retirement of unmatured debt. This was a decrease of $149 million from the previous fiscal year-end total when holdings were $198 million in the securities investment account (of which $36 million was in respect of the employees instalment purchase plan) and $3 million in investments held for retirement of unmatured debt.
Of the total unmatured debt, $20,420 million is payable in Canada and $160 million in New York. Securities payable in New York have been valued at the official parity rate of $1 U.S. = $1.08108 Canadian.

[Stage Direction]
(in millions of dollars)
Unmatured Debt Transactions	Fiscal year ended March 31	
	1968 (preliminary)	1967
	19,940 79 1,404 2,235 122 4 170	19,110 48 2,271 1,500 157 2 160
New issues- _		
		
		
		
Non-market able bonds (Unemployment Insurance Commission)...		
		
Maturities and redemptions-		
	4,014	4,138
	-1,680 -205 -86 -1,403	-1,226 -5 -41 -2,036
		
Redeemed non-market able bonds (Unemployment Insurance		
		
		
	-3,374	-3,308
	640	830
		
	20,580	19,940
		
Summary of security issues, maturities and redemptions
Excluding the refunding of treasury bills which mature weekly, the government issued securities of $4,014 million and redemptions and maturities totalled $3,374 million.
Net sales of Canada savings bonds series 22 were $1,404 million and additional sales of series 21 (Centennial Series) were $79 million. Redemptions and maturities of series 10 to 21 totalled $1,403 million. The net increase for all series was $80 million bringing the total of outstanding Canada savings bonds to $6,096 million.
Treasury bills increased by $170 million to $2,480 million and consisted of $1,575 million in three-month bills, $780 million in six-month bills and $125 million in a 364-day bill.
October 16, 1968

[Stage Direction]
Debt Matured or Redeemed During the Fiscal Year Ended March 31, 1968 (in millions of dollars)
Marketable bonds-
41% 1961/63-67	
31% 1962-67	
41% 1962-68	 '
31% 1964/65-67	 ' '
41% 1964-68	
41% 1965-67	
4% 1966-67	
41% 1966-67	
41% 1966-67	 '
51% 1966-68	
21% 1949-74 (N.Y. loan)	
2}% 1950-75 (N.Y. loan)	
5% 1962-87 (N.Y. loan)	
Non-marketable bonds-
Canada savings bonds S10	
Canada savings bonds S10-21	
Unemployment Insurance Commission, 41% Unemployment Insurance Commission, 4J%
Matured
Redeemed
Total
AT 9	275.0
AT 12	100.0
AT 11	250.0
CT 14	250.0
CT 8	130.0
CT 18	50.0
CT 25	170.0
F 1	155.0
F 4	175.0
F 7	125.0
1,680.0
16.3
10.7
178.2
205.2
275.0
100.0
250.0
250.0
130.0 50.0
170.0
155.0
175.0
125.0 16.3 10.7
178.2
1,885.2
16.5
1,696.5
1,386.7
39.5
46.5
1,677.9
16.5 1,386.7
39.5
46.5
3,374.4

[Stage Direction]
New Securities Issued During Fiscal Year Ended March 31, 1968 (in millions of dollars)
-		Total amount issued
Marketable bonds-		
4J% 1967-68			
5% 1967-73			
51% 1967-90			
4 J% 1967-68			
5J% 1967-74			
5% 1967-68			
51% 1967-69			
6% 1967-71			
4f% 1967-68			
5J% 1967-69			
5% 1967-70			
6% 1967-71			
61% 1967-73			
6% 1968-70			
		2,235.0
Non-marketable bonds- Unemployment Insurance Commission- 5%			
51%			
Canada savings bonds-		
Nov. 1, 1966-Nov. 1, 1979			79.6 1,403.7
Nov. 1, 1967-Nov. 1, 1980			
Canada pension plan-		
5.29%-6.44%			
Weekly treasury bills (net)			
		4,014.1
1450
[Stage Direction]
October 16, 1968

[Stage Direction]
As At March 31
Inerest ratets
The average interest rate on the government's unmatured debt rose to 5.06 per cent during the fiscal year from 4.71 per cent at March 31, 1967.
The yield on three-month treasury bills which was 4.13 per cent at tender on March 30, 1967 was 6.98 per cent at tender on March 28, 1968.
The yield on six-month treasury bills which was 4.11 per cent at tender on March 30, 1967 was 6.98 per cent at tender on March 28, 1968.
The following table shows the average high and low yields together with the average yield on the latest issues for the fiscal years 1963-64 to 1967-68 inclusive:

[Stage Direction]
Treasury Bills Average Yields at Tender
Fiscal Year Ended March 31	High	Low	Last issueThre>month bills- 1Qfi4 	3.90	3.19	3.881965 	3.87	3.53	3.621966 	5.06	3.61	5.061967 	5.20	4.10	4.131968 	7.01	3.96	6.98Six-month bills- 1964 	4.06	3.30	4.041965 	4.06	3.69	3.731966 .. 	5.30	3.71	5.301967 	5.33	4.04	4.11196« 	7.02	3.97	6.98364-day bill- 1968 	5.65	5.65	5.65
October 16, 1968
[Stage Direction]
Indirect debt or contingent liabilities
In addition to the direct debt as set out in the statement of assets and liabilities, the government has assumed certain indirect or contingent liabilities. These consist of securities of the Canadian National Railways, guaranteed as to principal and interest, the guarantees of insured loans made by chartered banks and other approved lending institutions under the National Housing Act, deposits maintained by the chartered banks in the Bank of Canada, advances under the Export Credits Insurance Act and bank loans under a number of Federal Statutes.

[Stage Direction]
Summary of Indirect Debt or Contingent Liabilities
Railway securities guaranteed as to principal and interest-
Canadian National 5% due May 15, 1968	
Canadian National 21% due September 15, 1969
Canadian National 21% due January 16, 1971	
Canadian National 51% due December 15, 1971	
Canadian National 3f% due February 1, 1974	
Canadian National 2|% due June 15, 1975, U.S. $6,000 000(I>
Canadian National 5% due May 15, 1977	'...
Canadian National 4% due February 1, 1981	
Canadian National 51% due January 1, 1985	
Canadian National 5% due October 1, 1987	' ' ' "
Other outstanding guarantees and contingent liabilities-
Deposits maintained by the chartered banks in the Bank of Canada Loans made by lenders under Part IV of the National Housing Act,
1954, for home extensions and improvements™	 '
Insured loans made by approved lenders under the National Housing
Act, 1954(2>(3>
Liability for insurance and guarantees and other commitments with respect to long-term financing under sections 21 and 21A of th
Export Credits Insurance Act™	
Loans made by chartered banks under the Farm Improvement Loans
Act* (2)	
Loans made by chartered banks and credit unions under the Fisheries
Improvement Loans Aot(2)	
Loans made by chartered banks under the Small Businesses Loans
Act(2)	
Loans made by chartered banks and credit unions under the Canada
Student Loans Act(2)<4>
Notes issued by the Canadian Corporation for the i967 World Exhibition	
Loans made by chartered banks to the Canadian Wheat Board..!!
Loans maintained by approved lending institutions under National
Housing Acts prior to 1954 Act	
Guarantees to owners of returns from moderate rental housing projects^!
Amount
Authorized
Amount
Outstanding
55.800.000 70.000.	000 40.000.	000 187,683,500 200,000,000 6,486,486 83.475.000 300,000,000 97.225.000 156,511,000	55.800.000 70.000.	000 40.000.	000 187,683,500 200,000,000 6,486,486 83.475.000 300,000,000 97.225.000 156,511,000
1.197,180,986	1,197,180,986
Unstated	935,782,098
25,000,000	20,209,000
9,500,000,000	6,311,000,000
1,100,000,000	369,387,071
117,348,000	99,657,000
2,700,000	612,000
44,268,000	16,336,000
188,084,000	180,084,000
240.000.	000 505.000.	000	228.250.000 141.414.000
	8,302,731,169
Unstated Unstated	Indeterminate Indeterminate
^ Converted at $1.08108 Canadian official parity rate.
(2)As of December 31, 1967.
<',aS^?DTctcmb^3Tl9r67.nCe SeCti°n 45' National Hous!"S Regulations) by approved lenders
<«Includes contingent liability in respect of alternative payments to non-participating province. <*As of December 81, 1967, funds totalling *4,059,134 were held by the Central Mortgage and Housing Corporation for the purpose of settling claims. In 1967 rental contracts totalled $12 909 000 29180-92£
[Stage Direction]
October 16. 1968
SUPPLEMENTARY DETAILED TABLES Revenue Expenditure
Annual Changes in Loans and Investments Unmatured Debt
October 16, 1968

[Stage Direction]
(in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)
Tax Revenue- Income tax-					
Personal h)	1,865.1	2,103.3	2,142.5	2,473.8	2,849.6Corporation ^	1,259.0	1,523.8	1,606.6	1,593.2	1,670.6On dividends, interest, etc., going abroad.	124.5	143.7	170.0	203.6	220.5Excise taxes-	8,248.6	3,770.8	3,919.1	4,270.6	4,740.7
Sales tax 0X2)		946.1	1,204.6	1,395.1	1,513.6	1,601.1
Other taxes-					
Cigarettes, tobacco and cigars	
Electric power export	226.9 0.1	218.3 (3)	238.1	251.4	266.7Jewellery, watches, ornaments, etc	6.4	6.9	7.9	8.9	10.2Matches and lighters	1.3	1.2	1.2	1.2	1.2Television sets, radios and phonographs.	22.0	23.5	27.0	31.2	32.6Toilet preparations	11.1	12.8	14.1	15.5	17.9Wines	3.8	4.1	4.4	4.8	5.3Sundry commodities	1.3	1.4	2.2	1.2	1.5Interest and penalties	0.8	1.2	1.6	1.9	2.2Less refunds	-0.3	-0.3	-0.3	-0.5	-0.6273.4	269.1	296.2	315.6	337.0Customs import duties	581.4	622.1	685.5	777.6	746.4Excise duties-	Spirits	129.4	134.7	157.0	158.2	180.5Beer	102.9	105.4	107.9	113.3	120.2Cigarettes, tobacco and cigars	165.7	177.2	187.1	196.4	194.6Less refunds	-4.7	-5.9	-6.1	-6.9	-6.7S9S. S	411-4	445.9	461.0	488.6Estate tax	90.6	88.6	108.3	101.1	102.2Miscellaneous tax revenue	0.1	0.2	0.2	0.2	0.3Total tax revenue	5,533.5	6,366.8	6.850.3	7,439.7	8,016.3Non-Tax Revenue-	Return on investments	366.4	422.7	438.3	519.1	612.3Post office- -net postal revenue	200.7	230.4	237.5	253.3	281.6Other	136.6	143.2	152.1	146.1	166.4Total non-tax revenue	703.7	796.3	827.9	918.5	1,060.3Total revenue^4*	6,237.2	7,163.1	7,678.2	8,358.2	9,076.6
(1>Excluding credits to:
1963-64	1964-65	1965-66	1966-67	(estimated)Old age security fund- Personal income tax	.. 302.6	431.9	494.9	576.6	800.1Corporation income tax .. ..	.. 115.7	145.2	152.3	149.5	150.0Sales tax	.. 331.8	383.2	522.1	559.5	544.5
<2>Net after deduction of refunds and drawbacks as well as transfers to the old age security fund. l3>Less than $50,000.
<4>Solicitor General vote 15, Appropriation Act No. 3, 1967, gave authority to credit thereto revenue arising from services provided thereunder. For purposes of comparison, prior years' figures have been adjusted accordingly.
[Stage Direction]
October 16. 1968

[Stage Direction]
(in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)
Agriculture-					
Administration and general	3.6	4.1	4.7	5.0	6.5Board of Grain Commissioners	
Canadian Dairy Commission	
Farm Credit Corporation-net oper-	6.7	6.6	7.2	7.8 (i)	9.7 0.3ating loss	1.1	0.5	1.0	2.6	3.8Health of animals	
Land rehabilitation, irrigation and	13.2	13.5	15.0	16.1	18.6water storage projects	
Production and marketing, including grants and other assistance-	23.7	26.4	28.4	25.0	21.5Administration and general	
Agricultural commodities stabili-	3.2	3.0	21.7	4.3	5.8zation account-net operating loss Agricultural products board ac-	122.2	57.1	39.4	88.7	139.7count-net operating loss	1.0	0.3	1.6	5.7	1.4Animal and animal products	16.3	17.7	18.3	19.8	21.6Plant and plant products	7.1	7.7	16.4	20.3	8.5Research	27.6	28.8	32.6	35.4	39.7225.7	165.7	186. S	2S0.7	277.1Atomic Energy	45.9	46.5	54.4	60.2	69.3Auditor General's Office	1.3	1.6	1.7	2.1	2.3Board of Broadcast Governors	
Canadian Broadcasting Corporation- Grants in respect of the net operating requirements of the national broad-	0.3	0.4	0.4	0.6	1.0casting service	85.7	85.9	95.1	112.4	139.5International broadcasting service..	1.9	2.1	2.4	2.8	3.887.6	88.0	97.5	115.2	liS.SCentral Mortgage and Housing	Corporation	13.5	15.0	21.6	20.1	23.1Office of the Chief Electoral	Officer	11.9	0.6	13.0	0.9	0.7Consumer and Corporate Affairs<2>.	3.5	3.9	4.7	5.5	7.6Defence Production-	Defence expenditure	23.5	26.4	20.3	24.9	26.0Non-defence expenditure	1.9	3.1	8.2	9.3	9.525. If	29.5	28.5	Si. 2	S5.6Dominion Bureau of Statistics	12.3	13.5	15.6	26.6	22.5Energy, Mines and Resources-	Administration and general	40.7	42.5	54.6	61.3	65.9Dominion Coal Board	20.6	23.2	23.4	38.0	33.6Emergency gold mining assistance. .	15.0	15.7	14.8	15.0	15.2National Energy Board	
Research and investigations on water	0.6	0.7	0.9	1.1	1.6resources	10.3	12.2	13.6	14.8	20.287.2	9If.S	107. S	ISO. 2	1S6.5External Affairs-	Administration and general	
Assessments, contributions and other payments to international organizations and international multilateral	26.2	29.8	34.5	39.6	48.9economic and special aid programs	22.4	20.0	32.0	31.2	32.0External aid	48.4	81.4	86.0	159.7	134.897.0	IS 1.2	152.5	2S0.5	215.7
October 16, 1968

[Stage Direction]
FOR THE LAST FIVE FISCAL YEARS-Continued
(in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)
Finance-					
Administration and general	7.7	7.2	9.8	21.3	19.5Office of the Comptroller of the T reasury	23.8	24.9	25.4	29.3	32.1Grants to municipalities and provinces in lieu of taxes	31.5	35.7	36.8	37.6	41.5Municipal Development and Loan Board	0.1	2.7	33.9	41.8	16.7Public debt charges including interest and amortization	993.7	1,051.3	1,110.9	1,190.5	1,300.8Subsidies and fiscal arrangements payments to provinces	254.3	358.4	466.0	515.5	737.51,311.1	1,480.2	1,682.8	1,836.0	2,148.1Fisheries	23.7	25.6	34.5	41.5	51.7Forestry and Rural Development-	Administration and general	18.5	20.6	22.0	25.5	22.8Canadian Livestock Feed Board	
Freight assistance and grain storage costs	18.7	19.1	21.0	21.0	0.2 21.4Rural development	4.6	10.0	14.1	20.0	36.741.8	49.7	57.1	66.5	81.1Governor General and Lieutenant-	Governors	0.5	0.7	0.7	0.8	1.0Indian Affairs and Northern Development- Administration and general	1.4	1.5	1.4	1.9	2.6Conservation	22.9	25.1	29.0	35.6	36.7Indian Affairs	55.6	64.8	81.7	103.1	122.5Northern program	34.3	35.9	44.3	56.8	69.6114-3	127. S	156.4	197.4	231.4Industry-	Defence expenditure	20.5	21.5	26.6	30.6	33.5Non-defence expenditure	40.7	35.3	45.9	47.9	84.761.2	56.8	72.5	78.5	118.2Insurance	1.4	1.4	1.5	1.7	1.9Justice	9.9	10.7	11.4	12.2	15.4Labour	7.9	23.4	24.0	24.9	10.9Legislation-	House of Commons	10.1	11.1	11.5	13.9	14.3Senate	2.5	2.7	2.7	3.3	3.4Library of Parliament	0.3	0.4	0.5	0.6	0.6IS.9	14.2	14.7	17.8	18.3Manpower and Immigration-	Administration and general	2.4	5.3	5.6	7.9	19.5Capital assistance re training facilities and manpower training research	102.0	52.8	104.1	136.2	119.3Adult occupational training program. Employment services	19.0	21.7	22.7	32.8	106.2 32.3Municipal winter works incentive program	26.7	42.8	41.1	37.8	30.5Technical and vocational training assistance payments to provinces..	34.4	44.4	48.7	85.2	85.6Immigration	11.4	12.2	14.3	20.5	21.6Program development	195.9	179.2	236.5	320.4	6.6 421.6
October 16, 1968

[Stage Direction]
FOR THE LAST FIVE FISCAL YEARS-Continued
(in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)
National Defence-					
Administration and general		14.3	14.4	15.3	27.0	25.9
Canadian forces superannuation ac-					
count-					
Government's contribution		59.6	58.8	58.8	42.6	58.4
Special government contribution...	76.5				
Amortization of deferred charges..		13.4	16.8	72.6	72.6
Defence services including develop-					
ment	1,473.1	1,387.0	1,401.3	1,435.3	1,528.2Defence research	33.6	36.7	41.6	44.2	50.4Mutual aid to NATO countries	28.9	27.5	14.6	18.7	18.01,686.0	1,537.8	1,548.4	1,640.4	1,753.5National Film Boabd	5.8	6.4	6.9	8.0	9.3National Gallery	1.1	1.3	1.8	1.9	2.9National Health and Welfare-	Administration and general	2.0	2.3	2.5	3.0	3.9Food and drug services	3.4	4.3	5.4	6.8	8.2Health insurance and resources-	General health and hospital con-	struction grants to provinces....	53.0	56.7	45.5	45.1	46.0Government's contributions under	the Hospital Insurance and Diag-	nostic Services Act	392.2	433.9	319.6	397.4	468.6Health resources fund	4.7	32.7Other	0.2	1.3Health services	6.9	7.7	7.6	8.4	8.6Medical services	30.6	32.5	37.5	38.5	42.5Welfare services-	Family allowances	538.3	545.8	551.7	555.8	558.8Youth allowances	26.9	46.5	47.4	49.4Fitness and amateur sports pay-	ments	1.6	2.0	2.5	4.7	3.6Old age assistance, blind persons	and disabled persons allowances.	64.4	74.0	45.5	38.1	18.3Unemployment assistance	107.4	107.5	101.7	143.3	6.1Canada assistance plan	10.5	225.6Other	6.9	7.0	9.1	12.0	14.71,206.7	1,300.6	1,175.1	1,315.9	1,488.3National Research Council, Incltjd-	ing the Medical Research Council	47.3	56.7	74.4	94.7	121.7National Revenue	83.0	86.9	95.0	105.9	115.1Post Office	206.9	210.5	240.2	268.5	301.8Privy Council	2.9	4.6	4.8	6.5	11.0Economic Council of Canada	0.2	0.8	1.1	1.4	1.5S.l	5.4	5.9	7.9	IS.5Public Archives and National	Library	1.1	1.5	2.0	2.7	3.6Public Printing and Stationery	2.2	2.7	3.0	4.0	4.9Public Service Commission	5.2	6.2	8.0	10.8	13.4Public Service Staff Relations	Board	(1)	1.0Public Works-	Administration and general	17.6	30.3	36.0	33.8	43.0Accommodation services	74.3	87.3	101.7	108.5	133.8
October 16, 1968

[Stage Direction]
FOR THE LAST FIVE FISCAL YEARS-Concluded
(in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)Treasury Board- Administration and general	14.5	15.0	19.0	37.8	38.4Public service superannuation account- Government's contribution	54.0	55.6	57.8	59.3	59.6Amortization of deferred charges..	10.0	25.9	56.3	60.668.5	80.6	102.7	163.4	158.6Unemployment Insurance Commission- Administration and general	29.8	32.7	32.4	37.3	37.6Government's contribution to the fund	59.3	62.1	65.6	68.8	69.589.1	94.8	98.0	106.1	107.1Veterans Affairs- Administration and general	10.0	10.5	10.7	9.6	10.1Pensions for disability and death	173.2	180.3	185.6	195.9	205.6Provision for reserve for conditional benefits	3.2	3.1	3.2	3.5	4.0Soldier settlement and veterans land act	4.5	4.5	4.5	5.2	5.5Treatment services	45.5	46.8	49.9	57.9	61.4Welfare services, allowances and other benefits	96.4	106.9	115.8	118.7	114.2SSS.8	SSS.l	S69.7	390.8	400.86,856.4	7,201.1	7,717.2	8,779.7	9,869.0
(1) Less than $50,000.
(a) Previously the Department of the Registrar General.
/3) Solicitor General vote 15, Appropriation Act No. 3, 1967, gave authority to credit thereto revenue arising from services provided thereunder. For purposes of comparison, prior years' figures have been adjusted accordingly.
Expenditures of the Air Transport Board, the Board of Transport Commissioners for Canada and the Canadian Maritime Commission are included under this heading.
1458
[Stage Direction]
October 16. 1968

[Stage Direction]
FOR THE LAST FIVE FISCAL YEARS-Continued
(in millions ol dollars)
-	1963-64	1964-65	1965-66	1966-67	1967-68 (preliminary)Public Works-Concluded Harbours and rivers engineering services	23.7	30.3	35.4	38.1	43.9National Capital Commission	12.2	10.3	18.6	33.0	23.2Trans-Canada highway-contributions to provinces	39.2	76.1	83.4	81.0	64.7167.0	2S4-S	275.1	294.4	S08.6Secretary of State- Administration and general	5.1	6.1	11.0	16.3	33.5Centennial Commission	3.9	7.3	14.6	30.2	31.2Grant to the Canada Council	
Post-secondary education payments to provinces pursuant to the Federal-Provincial Fiscal Arrangements Act, 1967	
University grants	26.8	10.0 27.3	27.7	87.1	16.9 108.0 0.2Office of the Representation Commissioner	(1)	0.2	0.8	0.2	0.1S5.8	60.9	54.1	1SS.8	189.9Solicitor General- Administration and general	0.3	0.4	0.6	1.0Correctional services	27.9	39.0	56.5	59.6	64.8Royal Canadian Mounted Police(3)..	50.9	59.0	64.4	84.1	87.778.8	98. S	121. S	144-S	166.5Trade and Commerce- Administration and general	14.8	16.9	19.6	24.7	29.6Assistance re storage costs of grain. .	40.5	34.6	37.5	30.4	34.8Canadian Corporation for the 1967 World Exhibition	1.2	19.5	4.6	8.4	7.0Canadian government travel bureau.	3.9	4.9	6.3	10.0	10.060.4	75.9	68.0	7S.5	81.4Transport- Administration and general	3.9	6.4	4.6	6.3	7.1Air services	121.1	131.5	143.0	165.0	175.0Atlantic Development Board	0.2	4.3	23.8	40.0	42.4Canadian Transport Commission- Administration and general	2.4	2.5	2.6	3.0	3.6Payments to railways and transportation companies under the National Transportation Act	75.1	75.7	94.7	120.9	126.0Contributions to the railway grade crossing fund	5.1	5.1	14.0	15.0	15.0Steamship subventions	9.4	8.3	9.4	10.8	11.1Subsidies to air carriers	
Canals and works entrusted to The St. Lawrence Seaway Authority..	3.0	29.0	0.4 10.1	0.4 12.9	1.2 10.6Marine services	64.1	64.5	84.5	100.0	101.4Non-active assets- National Harbours Board	0.3	7.6	4.8	7.0	4.8Railways and steamships- Maritime Freight Rates Act	13.4	14.7	15.1	14.4	14.2Deficits- Canadian National Railways. ..	43.0	38.7	33.4	24.6	35.8Newfoundland ferry and terminals	8.6	11.1	12.4	13.0	16.5Prince Edward Island car ferry and terminals	3.4	4.0	4.2	4.6	4.8Yarmouth-Bar Harbour ferry service	0.2	0.1	(1)	0.4Other	30.3	35.3	35.0	30.3	37.0S8S.5	4S8.8	492.0	568.2	606.9
October 16, 1968

[Stage Direction]
FISCAL YEARS (in millions of dollars)
-	1963-64	1964-65	1965-66	1966-67	1967768 (preliminary)
Loans to, and investments in, Crown corpora-					
tions-					
Air Canada	0.4	-1.4	0.7	3.1	0.6Atomic Energy of Canada Limited	0.4	12.0	11.9	28.4	32.9Canada Deposit Insurance Corporation	29 4Canadian Arsenals Limited	-2.5	Canadian Broadcasting Corporation	14.3	12.5	35.0	18.4Canadian Commercial Corporation	-4.0	-2.0	2.0	4.5	6.5Canadian Corporation for the 1967 World Ex-	hibition	44.0	131.0	30 0Canadian Dairy Commission	0 1	22.1Canadian National Railways	-28.8	24.7	59.1	124.2	163.2Canadian Overseas Telecommunication Cor-	poration	6.2	-0.4	-2.6	-2.7	2.6Cape Breton Development Corporation	9 1Central Mortgage and Housing Corporation..	113.3	221.7	315.1	488.6	633.9Export Credits Insurance Corporation	23.4	33.4	36.4	36.2	34.7Farm Credit Corporation	69.9	102.4	147.0	164.1	169.2National Capital Commission	12.1	6.9	7.4	7.0	0 8National Harbours Board	5.5	1.7	3.0	19.5	27.7Northern Canada Power Commission	3.4	5.4	2.1	0.8	2.9Northern Ontario Pipe Line Crown Corpora-	tion	-110.6	The St. Lawrence Seaway Authority	(*24.9	«)-6.5	0)26.7	«)29.8	0>26.7Other	-0.1	0.1116.1	412.1	662.8	1,069.6	1,210.8Loans to national governments-	United Kingdom	-17.8	0>19.6	0)19.2	-18.9	-19.2Export Credits Insurance Act	-2.3	-2.3	-2.3	-2.3	-2 3Special loans to Colombo plan countries to	finance the purchase of wheat and flour from	Canada	-5.0	-5.0	-1.3	-9.9	-0.3Loans to India for the purchase in Canada of	aircraft and associated spare parts and	equipment	10.0	-1.4	-2.2	-2.4	-2.7Special loan assistance-developing countries	5.2	9.8	29.1Other	0.1	-0.1-16.1	10.9	18.6	-23.6	4.6Other loans and investments-	Subscriptions to capital of, and working capi-	tal advances and loans to, international	organizations-	Canada's subscription to capital of-	Asian development bank	2.7	2.7International monetary fund	205.4	International bank for reconstruction and	development	4.5	International development association...	7.9	7.9	15.0	15.0	15.0Working capital advances and loans to in-	ternational organizations	0.2	-0.2	-0.1	-0.1	-0.3Loans to provincial governments	-0.5	-4.8	-1.7	26.8	64 2Municipal development and loan board	7.6	101.3	122.3	49 2Veterans land act advances	21.0	14.3	24.1	55.2	71 5Provincial tax collection agreements-ad-	vances	-2.7	-10.4	Balances receivable under agreements of sale	of Crown assets	-2.3	-1.8	-1.7	- 1.2	0 1Housing projects for Canadian forces	5.4	2.5	0.2	-0.1	1.1Old age security fund	58.3	-75.0	-25.0	Loans to manufacturers of automotive parts	in Canada	0.1	12 5	7 9Defence plant modernization	10 9.Other	-0.2	1.5	10.9	7.8	10.387.1	-68.4	123.1	460.8	231.9Net total of changes in loans and investments.	188.1	364.6	804.5	1,496.8	1,447.2
0) Includes deferred interest. t!>
Deferred interest.
29180-93i
[Stage Direction]
October 16, 1968

[Stage Direction]
AND THE ANNUAL INTEREST THEREON (preliminary)
Date	Rate	Amount	of maturity	per cent	of loan	interestPayable in Canada-	$	$Loan of 1936	.p i	Perpetual	3	55,000,000	1,650,000Loan of 1967	.F 10	1968 Apr.	1	a	175,000,000	7,875,000Refunding loan, 1950	,P9	June	15	2f	308,581,000	8,485,977.F 13	June	15	4s	160,000,000	7,200,000Loan of 1963 and 1964	.CT 3	Oct.	1	5	441,000,000	22,050,000.F 15	Oct.	1	5	20,000,000	1,000,000Canada savings bonds, 1959	.S 14	Nov.	1	5	710,305,250	35,515,263.F 18	Dec.	15	4!	125,000,000	5,937,500Loan of 1960	.T 39	1969 Apr.	1	5i	80,000,000	4,400,000Loan of 1962	.AT 16	Apr.	1	5i	100,000,000	5,500,000Loan of 1965	.CT 23	Apr.	1	5}	100,000,000	5,500,000Loan of 1967	.F 16	Apr.	1	5j	70,000,000	3,850,000Canada savings bonds, 1956	.S 11	May	1	4	26,279,100	1,051,164Loan of 1964	.CT 11	July	1	5	325,000,000	16,250,000Loan of 1962	.AT 13	Oct.	1	5*	80,000,000	4,400,000Loan of 1965	.CT 21	Oct.	1	5J	145,000,000	7,975,000Loan of 1966	.F 5	Oct.	1	5!	250,000,000	14,375,000Loan of 1967	.F 19	Dec.	15	51	175,000,000	9,625,000Loan of 1968	,F 24	1970 Feb.	15	6	250,000,000	15,000,000Loan of 1958	.T 24	May	1	31	200,000,000	7,000,000Loan of 1965 and 1966	.CT 19	July	1	5	175,000,000	8,750,000Loan of 1966 and 1967	.F 2	July	1	5	140,000,000	7,000,000Canada savings bonds, 1957	,S 12	Nov.	1	41	130,099,500	6,179,726Canada savings bonds, 1960	.S 15	Nov.	1	5	174,918,200	8,745,910Loan of 1966	.F 8	Dec.	15	5i	300,000,000	17,250,000.F 20	1971 Apr.	1	6	225,000,000	13,500,000.CT 15	June	1	5	350,000,000	17,500,000Canada savings bonds, 1961	.S 16	Nov.	1	41	136,434,600	6,139,557,F 17	Dec.	15	6	285,000,000	17,100,000Conversion loan, 1958	.T 28	1972 Sept.	1	41	1,267,203,100	53,856,132Loan of 1967	.F 11	1973 Oct.	1	5	200,000,000	10,000,000Loan of 1965	.CT 17	Oct.	1	5	275,000,000	13,750.000Canada savings bonds, 1958	.S 13	Nov.	1	41	48,969,750	2,081,214Loan of 1967	.F 22	Dec.	1	61	225,000,000	14,062,500Canada savings bonds, 1964	,S 19	1974 Nov.	1	5	320,754.050	16,037,703Loan of 1967	,F 14	Dec.	1	51	100,000,000	5,500,000Loan of 1959	.T 36	1975 Oct.	1	51	310,361,000	17,069,855Loan of 1965	.CT 21	Oct.	1	51	50,000,000	2,750,000.F 9	Oct.	1	51	70,000,000	3,850,000Canada savings bonds, 1963	.S 18	Nov.	1	5	345,695,800	17,284,790Loan of 1960	.T 38	1976 Apr.	1	51	436,198,000	23,990,890Loan of 1954	.T 11	June	1	31	247,046,500	8,029,011Canada savings bonds, 1962	.S 17	Nov.	1	5	715,102,550	35,755,128Canada savings bonds, 1965	.S 20	1977 Nov.	1	5	270,949,950	13,547,497Loan of 1953 and 1958	.T 5	1978 Jan.	15	31	207,911,500	7,796,681Loan of 1954	..T 13	1979 Oct.	1	31	343,246,500	11,155,511Canada savings bonds, 1966	..S 21	Nov.	1	5	1,813,296,400	90,664,820Loan of 1962	..AT R	1980 Aug.	1	51	120,000,000	6,600,000Loan of 1966	..CT 26	Aug.	1	51	80,000,000	4,400,000Loan of 1966	. .F 3	Aug.	1	51	160,000,000	8,800,000Canada savings bonds, 1967	..S 22	Nov.	1	51	1,403,735,400	73,696,109Conversion loan, 1958	..T 29	1983 Sept.	1	41	1,992,679,450	89,670,575Loan of 1963	..AT 21	1988 June	1	5	100,000,000	5,000,000Loan of 1964	..CT 9	June	1	5	50,000,000	2,500,000Loan of 1964	..CT 12	1990 May	1	51	225,000,000	11,812,500Loan of 1967	..F 12	May	1	51	125,000,000	6,562,500Loan of 1966 and 1967	. .F 6	1992 Sept.	1	51	225,000,000	12,937,500Conversion loan, 1956	..T 15	1998 Mar.	15	3}	197,045,000	7,389,188various	1,575,000,000	102,349,000various	780,000,000	47,052,0005.65	125,000,000	7,062,500Special non-marketable bonds-	Unemployment Insurance Commission..	41	17,000,000	828,7505	68,000,000	3,400,00051	89,000,000	4,672,50051 51	68,000,000	3,740,00054,000,000	3,105,000Canada pension plan investment fund.	various	5,708,000	336,81420,419,520,600	1,035,901,765
October 16, 1968

[Stage Direction]
AND THE ANNUAL INTEREST THEREON (preliminary)-Concluded
-	Date of maturity	Rate per cent	Amount of loan	Annual interest
			$	$
Payable in New York- Loan of 1949		1974	Sept. 1 1975	Sept. 15 1987 Oct. 15	2i 2! 5	48,755,627 30,301,591 81,297,216	1,340,780 833,294 4,064,861
Loan of 1950					
Loan of 1962					
				
			160,354,434	6,238,935
			20,579,875,034	1,042,140,700
m \he interest shown is a projection for one year at the annual rates on principal amounts outstanding at March 31, 1968. Where various rates of interest are applicable during the term of a loan the interest rate in effect at March 31, 1968 has been used.
Bonds payable in New York have been converted at the official parity rate of $1 U.S. = $1.08108 Canadian.
[Stage Direction]
Thursday, October 17, 1968