1968-10-22

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
October 22, 1968
Sir,
I have the honour to inform you that the Right Honourable J. R. Cartwright, P.C., M.C., Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber today, the 22nd October at 5.45 p.m. for the purpose of giving royal assent to certain bills.
I have the honour to be, Sir,
Your obedient servant, Louis-Fremont Trudeau Brigadier General
Assistant Secretary to the Governor General



CANADIAN INTERNATIONAL DEVELOPMENT AGENCY


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, by leave of the house I should like to table, in English and in French, the report for the year 1967-68 of the Canadian International Development Agency.


Mr. Speaker:: Has the hon. member leave to table this document?


Some hon. Members:: Agreed.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: I have a question for the President of the Privy Council, Mr. Speaker, in his capacity as government house leader. In view of the fact the last two reports of the Auditor General have not been fully considered by the public accounts committee, and a further report of the Auditor General is expected in January of next year, will the house leader proceed as rapidly as possible with arrangements for the organization of the committee
on public accounts and reference to that committee of the reports of the Auditor General which have not been fully considered?


Hon. Donald S. Macdonald (President of the Privy Council):: Yes, Mr. Speaker. If the Leader of the Opposition will consult Votes and Proceedings he will note that the public accounts committee has been called to meet Thursday next for organizational purposes. I will be glad to facilitate the means of referring business to it right away.



REQUEST FOR PRIORITY FOR FARM CREDIT LEGISLATION

[Stage Direction]
On the orders of the day:
['Mr. Speaker, I will be glad to at the appropriate time.']
Mr. A. P. Gleave (Saskatoon-Biggar):: My
question is directed to the President of the Privy Council. Will he consider making Bill No. C-113 the first order of the business today so that western farmers can get the increased cash advances on farm stored grain at the earliest possible opportunity? This question is urgent because wheat sales-


Mr. Speaker:: Order, please. The hon. member has asked a question.


Donald Stovel Macdonald: It was our hope that both Bill No. C-113 and the bill with regard to farm credit might have been passed by last night; in fact that was the proposal we made to hon. gentlemen opposite. I feel we should proceed with today's order of business as called and dispose of the Post Office Act as early as possible and dispose of all stages of the farm credit bill as early as possible. Then I am sure the hon. member will be eager to facilitate that procedure as well as the bill to which he referred.


Alfred Pullen Gleave: Could we have an assurance that, of all the farm credit bills to come before us, this particular bill will receive priority as soon as possible?


Donald Stovel Macdonald: Well, the farm credit bill will receive priority just as soon as the Post Office Act has been dealt with.


Mr. Ed Schreyer (Selkirk):: Will the minister consider giving priority to the cash advances legislation, since it is not controversial?


Mr. Speaker:: Order. The hon. member is asking a question which was asked yesterday.
1646	COMMONS
Inquiries of the Ministry [Translation]



[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Abitibi):: Mr. Speaker,
I should like to put a question to the right hon. Prime Minister, in the hope that he will deal with it.
I have here the English version of fascicule 8, dated October 17, of the proceedings of the committee on external affairs and national defence; however, we have not yet received the report of the first meeting in French.
Could the right hon. Prime Minister take the necessary steps to see to it that translators from English to French be hired on a full-time basis, and not part-time, as is now the case.


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I shall be glad to discuss this matter with the minister responsible for translation. As the hon. member knows, the work load is much greater for those who translate from English to French than for those who translate from French to English. That is one of the reasons why there are delays.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. In view of the announcement that a major territorial battle is shaping up between Canadian vessels and French trawlers operating out of France's territorial islands of St. Pierre and Miquelon, will the minister indicate what action the government is contemplating to resolve this jurisdictional dispute over fishing limits?


Mitchell William Sharp: Mr. Speaker, I am not aware of any battle that is shaping up, but we have had some discussions with the French authorities about the application of the straight base line theory, and these negotiations are continuing.


Lloyd Roseville Crouse: Mr. Speaker, I have a supplementary question which I will direct to the Minister of Fisheries. When can we expect

DEBATES	October 22, 1968
the base lines to be drawn from headland to headland, defining our exclusive fishing zones off Nova Scotia and British Columbia, as announced by the minister outside the house in a speech in Boston last Thursday?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, as the hon. member knows, legislation permitting Canada to draw straight base lines was passed in 1964. Some of these straight base lines have been drawn, and I hope that more will be drawn in the near future.


Mr. Frank Howard (Skeena):: Mr. Speaker,
I have a supplementary question for the Secretary of State for External Affairs regarding the straight base line question. May I ask the minister whether he would be prepared to appear before the fisheries committee to give a full explanation of the situation with respect to the conversations with other countries concerning these base lines?


Mitchell William Sharp: Mr. Speaker, I am always happy to appear before committees of the house on any subject where I can be useful. I would not think, however, that I would want to reveal all the confidential talks that I have had with representatives of other countries, any more than I should like them to reveal the talks they have had with us.


Mr. Frank Moores (Bonavisia-Trinily-Con-ception):: Mr. Speaker, I have a supplementary question for the Minister of Fisheries. Does the minister intend to implement a scheme of management of Canada's fishing resources over the continental shelf in accordance with his view, expressed recently at Boston, that every maritime nation should undertake such management?


Mr. Speaker:: Order. I suggest to the hon. member that what he is now asking the minister to do is make a general statement of policy, which should normally be done by way of a statement on motions.


Mr. John Lundrigan (Gander-Twillingale):: A further supplementary question, Mr. Speaker. Will the minister make such a statement to clear up the whole business, so we can have some clarification? Obviously some-


Mr. Speaker:: Order. The hon. member is asking a question to which the minister now wants to reply.
October 22, 1963


John (Jack) Davis: Mr. Speaker, I mentioned that Canada has passed legislation drawing our fishing zones as those extending 12 miles beyond straight base lines drawn from headland to headland. We are, of course, concerned about the operations of our own fishermen, and out beyond that of other fishermen, but this is obviously venturing into an area of international concern and negotiations with other countries.


John Howard Lundrigan: Mr. Speaker, I did not obtain an answer to my question. I asked the minister whether he would be prepared to make a statement on motions on this matter.


John (Jack) Davis: Mr. Speaker, I will be glad to at the appropriate time.



AIR CANADA


[Stage Direction]
On the orders of the day:
Hon. George Hees (Prince Edward-Hasf-ings):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the fact that it is now several months since Air Canada has had a president and the Prime Minister has not given any indication that an announcement is to be made in the foreseeable future, would the right hon. gentleman take the house into his confidence and tell us just what is the main problem that is making it impossible for the government to make up its mind in this connection?


Mr. Speaker:: Order. I would not think this question as asked is in order.


George Harris Hees: Then may I ask another question, Mr. Speaker. In view of that, would the Prime Minister get in touch with Professor Marshall McLuhan and ask him whether he would include decision-making in the course he is presently giving the cabinet?


Mr. G. W. Baldwin (Peace River):: A supplementary question, Mr. Speaker. As a result of the right hon. gentleman's discussion in connection with communications, has it occurred to him that he might more easily communicate with the people of Canada by having himself and his ministers answer questions in this house?



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Ray Perrault (Burnaby-Seymour):: Mr. Speaker, to the knowledge of the Secretary of State for External Affairs have any representations been made to the Labour government
Inquiries of the Ministry of Great Britain by the New Democratic party in Canada urging the cessation of arms shipments to Nigeria?


Mr. Speaker:: Order.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is addressed to the Secretary of State for External Affairs in his capacity as Acting Minister of Finance, according to the list of players and substitute players published yesterday. Can the minister, the Minister of Finance or the Minister of National Revenue, or for that matter any other department, advise whether any companies involved in the COFOMO group, which is in financial difficulties, are now under the supervision of any federal government agency?


Mitchell William Sharp: Mr. Speaker, if I were the minister of finance today and not the Acting Minister of Finance my answer to that kind of question would be that I shall have to make inquiries.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I have a question for the Postmaster General.
Could the minister confirm or deny the report that officials of his department are now holding consultations with regard to the problems raised by the introduction of Bill No. C-116? If so, who is conducting these consultations?


Mr. Speaker:: Order. This question should be asked during the debate on the bill now before the house.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweaiher@Fundy Royal: Mr. Speaker, I have a question for the
1648	COMMONS
Inquiries of the Ministry Prime Minister. Following the Prime Minister's statement equating the Nigerian-Biafran war with the Viet Nam war, is it the intention of the government to supply arms to one of the combatants in the Nigerian conflict or, alternatively, to cease the sale of arms to the United States, thus equating the two situations and making more credible our policy in both situations?


Right Hon.   P.-E. Trudeau@Prime Minister: Well, Mr. Speaker, I was not necessarily making the equation the hon. member suggests. I was saying that those who refuse to look at history always repeat the same errors. It so happens that yesterday at the United Nations a speaker for Mali was making the same point. He was telling the "imperialist press" and "opportunist philanthropists" of the western countries to stay out of African affairs because, and I quote:
The African leaders will remember this when we deal with separatist or autonomous movements, Flemish or Walloon conflicts, or 'Free Quebec'.
I suppose he was talking about some other conflicts as well.


Mr. Fairwealher:: A supplementary question, Mr. Speaker. We are delighted to know about what happened at the United Nations yesterday. Has the Prime Minister's attention been directed to the speeches of the foreign ministers of Tanzania, the Ivory Coast and Zambia urging that some initiative be taken in this regard?


Mr. Trudeau:: Yes, Mr. Speaker. The statistics are well known; I have stated them many times. Within the organization for African unity 29 states have told the other countries to stay out of Africa and African affairs; only four were in favour of intervention.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I had wanted to direct my question to the Minister of Transport. Since neither the minister nor the Minister without Portfolio is present may I direct my question to the Prime Minister. Why has the task force on housing stopped receiving briefs in a major Canadian city such as Montreal after only one day of hearings?

DEBATES	October 22, 1968


Right Hon.   P.-E. Trudeau@Prime Minister: If the hon. member will give himself the trouble of looking at the roster he will see that the minister is not due in the house today.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a point of order in relation to the remark just made by the Prime Minister, a remark he has made on a number of occasions. I concede the right of the Prime Minister to draw your attention, Mr. Speaker, to the fact that a fellow minister is not here. I even concede his right to tell us that he has asked a fellow minister not to be here. But I maintain it is not within the rules of the house for the Prime Minister to keep referring to a certain document which he calls a roster as a reason for a minister's not being present.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: have a copy of the document in my hand but if I may parrot legal language I suggest it is not a document of which the Chair should take judicial notice. The Chair has to operate on the basis of the rules, customs and established procedures of this house, and for the Prime Minister to cite a roster as though it were a legal or procedural basis for a minister's absence is contrary to the procedures of this house and contrary to our rights as members of parliament.
I should like Your Honour to take note of citation 7(1) in Beauchesne's fourth edition, which reads as follows:
Another collective right of the house is to settle its own procedure. This is such an obvious right-it has never been directly disputed-that it is unnecessary to enlarge upon it except to say that the house is not responsible to any external authority for following the rules it lays down for itself, but may depart from them at its own discretion.
I submit that when the Prime Minister lays down a new practice he is doing so as an external authority, and that when he hands us a document, and calls attention to it day after day, describing it as a roster, as though it were an excuse or a reason for ministers not being present, he is usurping the right of the house to settle its own procedure.
There is no way in which we can force the ministers to be here. There are rules about absenteeism, and the press does not like it when members are absent. The same should apply to ministers, but there is no way in
October 22, 1968

which we can force them to be here. As I say, I cannot deny the right of the Prime Minister to say, day after day, that a particular minister is not here, or to tell us he gave certain ministers permission to be absent, or to say he told them not to be here-and I suspect this is what the roster means. But to cite the roster as though it were a procedural sanction is not in accordance with the rules of the house.
One of the reasons I raise this point of order is that I have been here long enough to know that if any practice is followed long enough the Chair will treat it as though it were valid, and that if this practice continues unchallenged month after month it will become as officially accepted as any standing order or precedent. At the present time it is not provided for in our standing orders, it is not in our rules, it is not referred to in May or Beauchesne or Bourinot. The document referred to is merely a document supplied to hon. members through the courtesy of the President of the Privy Council, and I suggest it should not be accepted by Your Honour as having the force of procedural law.


Some hon. Members:: Hear, hear.


Mr. Horner:: The rooster is going to defend his roster.


Some hon. Members:: Oh, oh.


Pierre Elliott Trudeau: If I were from the constituency of Crowfoot I would not have made that remark.


Some hon. Members:: Oh, oh.


An hon. Member:: Really cheap, that.


Pierre Elliott Trudeau: Which is cheaper? I will trade mine for his.
I do not mind ceasing to refer to the roster, Mr. Speaker, if that is your ruling. I would comply with such a ruling with great obedience. I would merely say now that the use of this so-called roster is meant as a convenience to hon. members, and I think it comes out from the point of order which was just made that I do not have to refer to it. I can instruct ministers which days they should be attending to business in the house, and which days they should be attending committees of cabinet. This is the way we will continue to proceed in this government, and if it is necessary not to use the word roster I will not use it. But it does seem to me, Mr. Speaker, that from a member who is always complaining about red tape and formalism this is a pretty thin point
Inquiries of the Ministry to suggest that the rules do not permit us to employ a particular word.


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: I repeat that it is merely for the convenience of the members, and it has been introduced in order to get the government and parliament working more efficiently. We have looked at the statistics of the last year, and I think on only ten of the 145 sitting days did it happen that more ministers were asked questions than the number of ministers who will be sitting in the house under this system. Therefore-


Marcel Joseph Aimé Lambert: But that is the option of the house.


Pierre Elliott Trudeau: Of course, but we are merely trying to make this parliament and this government as efficient as possible.


John (Jack) Henry Horner: Oh, oh.


Pierre Elliott Trudeau: I wonder who lost his cool that time. It stands to reason that if 28 ministers are sitting in the house, when on the yearly average perhaps only 10 or 12 will be receiving questions each day, then there can be great saving in terms of administration, in terms of the time of the ministers, and in terms of the service of the Canadian people if only 10 or 12 ministers happen to be here to answer questions.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. I suggest to hon. members that there is not much point in going through all the arguments that were submitted at considerable length on a number of occasions during the last few weeks. I will certainly not stand in the way of hon. members who want to express views, but I might say at once that I am in sympathy with the point raised by the hon. member for Winnipeg North Centre (Mr. Knowles). Certainly a reference to a document-and I agree again with the hon. member for Winnipeg North Centre-that has not been officially recognized as far as the Chair and the house are concerned, cannot be considered to effect, in itself, a change in the rules. To that extent I am in full agreement with the point of order raised by the hon. member for Winnipeg North Centre.


John (Jack) Henry Horner: On a question of privilege, Mr. Speaker, before the Prime Minister began his explanation of his roster
October 22, 1968

Inquiries of the Ministry he made an off-hand remark with regard to the constituency of Crowfoot.


Some hon. Members:: Oh, oh.


John (Jack) Henry Horner: He can make any remarks he likes with regard to the representative of the constituency of Crowfoot but he, and I believe this house, should hold the constituency of Crowfoot in as good esteem as any other constituency represented in this house.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: I would ask the Prime Minister to withdraw the remark he made about that very important constituency in this country of ours.


Mr. Speaker:: Order. The question of privilege has been noted.



EXTERNAL AID


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs. Can he inform the house what is happening today with the Hercules aircraft intended to assist with relief in the Nigeria-Biafra tragedy?


Mitchell William Sharp: Mr. Speaker, just before I entered the house I inquired whether there were any developments subsequent to those reported to the house yesterday by the Prime Minister, and I was informed that there have been no further developments. The International Red Cross has not yet been able to secure the necessary approval of the new independent state of Equatorial Guinea or of the Biafran authorities for the use of our aircraft into Biafran-held territory. We hope this will be forthcoming shortly. As to the possible Canadian airlift in Nigerian-held territory, there continues to be difficulty with regard to the federally held forward air fields.


Mr. David MacDonald (Egmonl):: Mr. Speaker, quite likely the Secretary of State for External Affairs knows this, but yesterday a question was raised by the hon. member for York South concerning the possibility of making the planes available to some of the other relief agencies such as the churches and so on which are operating at Sao Tome. The Prime


Minister indicated that this might not be a wise move at this point, but I wonder whether the government is giving consideration to making additional aircraft available for these agencies so that relief materials can get in from Sao Tome to Biafra.


Mitchell William Sharp: I think it is premature as yet. It is our hope still that the International Red Cross will be able to make the arrangements. It is better, I believe, for all concerned to work with the agency that has been approved by everyone.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, this supplementary question is also for the Secretary of State for External Affairs. In view of the difficulty in obtaining permission in respect of the airlift from Fernando Po, has the minister consulted with the Red Cross concerning the statement made by the foreign minister of Nigeria that there would be no opposition to flights in from Sao Tome by the churches using Canadian planes if the Red Cross would supervise or at least look into the operation.


Mitchell William Sharp: Yes, Mr. Speaker; I made some inquiries about that statement. So far I have not been able to confirm that such statement is true, but I am still making inquiries.


Francis Andrew Brewin: 'Would the minister speak to his own parliamentary secretary, who was present when that statement was made to several members of this house.


David Samuel Horne MacDonald: Perhaps the
minister did not clearly hear my question. It was not a matter of dispensing with the services of the Red Cross at this point, but rather whether our government is taking some initiative with regard to making these planes available on the basis outlined by the hon. member for Greenwood to these relief agencies which are carrying on relief efforts nightly into Biafra from Sao Tome.


Mitchell William Sharp: I still believe it would be desirable to continue with the arrangements we have approved before we take any other action. I am not ruling out the other possibility, but in the meatime I believe we should work with the International Red Cross so long as they have arrangements which are satisfactory to the federal military government.


Marcel Joseph Aimé Lambert: Mr. Speaker, will the minister kindly advise
October 22, 1968

us whether the other aircraft which have been flying into Biafra regularly for weeks have been involved in all these legal niceties that the minister keeps throwing up from time to time?


Mitchell William Sharp: Well, if I may speak on that, one of the legal niceties with which they did not have to contend is the fact that we have a new republic. Equatorial Guinea, whose permission we now must obtain.


David Lewis: May I ask the Secretary of State for External Affairs whether he can give us any indication as to how long these negotiations with Equatorial Guinea and Biafra, as well as other matters, are likely to take.


Mitchell William Sharp: No, I cannot say. All I know is that we are putting pressure on the authorities to get this airlift approved.


Robert Lorne Stanfield: Mr. Speaker, am I to understand from the answer of the Secretary of State for External Affairs that the government of Canada is today taking the position that it is making representations to the governments of these countries, whereas yesterday the Prime Minister stated that the policy of the government was not to make such representations directly?


Mitchell William Sharp: No, Mr. Speaker. I think the Leader of the Opposition missed the significance of my previous reply. One of the obligations we have which has not been encountered by anyone else arises out of the establishment of the new state of Equatorial Guinea in which Fernando Po is involved. In order to have our planes land we must have their permission. This is one of the factors. For the rest, we are putting pressure on the International Red Cross.


Donald Stovel Macdonald: Mr. Speaker, I wonder whether I might raise with the Secretary of State for External Affairs a question similar to one I raised with the Prime Minister yesterday. In view of the continuing difficulty in obtaining this approval, and in view of the great anxiety on the part of many people of this country to see some action taken with regard to the relief efforts, I wonder whether a deadline could be set for the International Red Cross with regard to its efforts in order that this matter may be facilitated at the earliest possible date.


Mitchell William Sharp: I agree with the statement made yesterday by the Prime Minister. I do 29180-105J
Inquiries of the Ministry not think this would be helpful. It would constitute an ultimatum, which is not what we want. We want to get action.


David Lewis: I have a further supplementary, Mr. Speaker. Could the minister indicate to the house, from the reports the Red Cross has given him, whether he has any idea what the difficulties are so far as Equatorial Guinea is concerned? What is the holdup there in respect of obtaining their consent?


Mitchell William Sharp: Our understanding is that we cannot find the officials who would give us the permission.


David Lewis: They are not on the roster.


Robert Lorne Stanfield: I understood the Secretary of State for External Affairs to say that representations were being made to Equatorial Guinea. Would the minister be good enough to explain to the house the reason that representations can properly be made to Equatorial Guinea but cannot be properly made to the state of Nigeria, for example, with regard to assisting the Red Cross?


Mitchell William Sharp: I think the Leader of the Opposition has forgotten that we did get the agreement of the government of Nigeria.


Robert Lorne Stanfield: Am I to understand that the policy announced by the Secretary of State for External Affairs is that the government of Canada has made representations directly to the government of Nigeria, whereas yesterday I understood the Prime Minister to say that it would not be possible for the government of Canada to make such representations to the state of Nigeria?


Mr. Speaker:: Order. I wonder whether this is not an argument rather than a question.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO AGENDA FOR CONFERENCE

[Stage Direction]
On the orders of the day:
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister. It concerns Canadian affairs.
The Prime Minister recently announced that the next federal-provincial conference will be held about the middle of December. Can he tell me whether the agenda of the
October 22, 1968

Inquiries of the Ministry conference has been drawn up after consultation with the parties concerned? I should also like to know whether he will propose a new formula for the repatriation of the constitution with which all provinces might agree?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, the agenda of that conference to be held from December 16 to 18 is being drawn up by officials who have already met four times to prepare an agenda acceptable to all the governments. But I can say to the hon. member that this agenda is based on the decisions taken at the conference held in February and that we will deal with the matters considered at that conference.


Martial Asselin: Mr. Speaker, I would like to ask the Prime Minister a supplementary question.
Could he tell us if the government intends to propose to the provinces a new repatriation formula for the constitution?


Pierre Elliott Trudeau: Not at this conference, Mr. Speaker.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Gérard Laprise: Mr. Speaker, I wish to address a question to the Minister of Indian Affairs and Northern Development.
Could the minister tell us whether an inquiry is being conducted in order to determine the reasons of an Eskimo migration which is taking place from Sugluk to the islands of the eastern Arctic. Furthermore, if this migration continues, will the government take steps to help those Eskimo families?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am very glad to hear that the Eskimos concerned have been traced and have safely reached the place they were heading for.
To our knowledge the main reason for their migration is that they depend on hunting and fishing to live and they have deemed it advisable to move to another district so as to find new means of subsistence, according to their traditional habits. However, we are investigating the matter in order to see if there could be other reasons for their departure.



SHIPBUILDING


[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Cenlral Nova):: Mr. Speaker, a short time ago in the house I asked the Minister of Defence Production what action the government intended taking with regard to the matter of shipbuilding in Canada, at which time Your Honour suggested that the minister might like to make a statement on motions. Following Your Honour's excellent suggestion I should like to ask the minister whether, following the meeting with the shipbuilding association of Canada, he would like to make a statement on motions on this important matter during his next appearance in the house.


Hon. Donald C. Jamieson (Minister of Defence Production):: Yes, although I do not know whether I would be the appropriate minister. The minister who is organizing the conference at present is the Minister of Transport. However, I am sure this could be arranged.


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, does the Minister of National Defence have any plans to divert ships coming under his authority to the St. John's dockyard to provide badly needed employment for men in that area? On a point of order, Mr. Speaker.


Mr. Speaker:: Would the hon. member state his point of order?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, I think it is a well known fact that the Minister of National Defence is not the one who actually calls for tenders in respect of shipbuilding. I suggest it is the Minister of Defence Production.


Mr. Thomas M. Bell (Saint John-Lancasler):: Mr. Speaker, on this question of shipbuilding, since I will probably not be able to get Your Honour's attention tomorrow I should like to give notice of this question to the third acting minister of transport. Will the government indicate what it is doing about this shipbuilding industry and the marine policy that was announced during the last election campaign? Perhaps the minister will make a reply tomorrow when all the ministers are supposed to be here.
October 22, 1968



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I should like to ask the Postmaster General whether he has anything further to report to the house regarding his efforts to control the circulation of obscene literature through the mails.


Hon. Eric W. Kierans (Postmaster General):: Mr. Speaker, as of six o'clock last night the department had intercepted 126 letters ordering this filth from Denmark. I am surprised that so many Canadians are interested in it. We are returning each of the 126 letters with a polite note from the department indicating that the mails cannot be used for such a purpose.



FISHERIES


[Stage Direction]
On the orders of the day:
Frank Duff Moores: Mr. Speaker, I have a question for the Minister of Fisheries. Last Wednesday the minister advised this house that deficiency payments to the east coast fishing industry would terminate at the end of October. Is it correct that without forewarning the east coast industry was informed on Friday that this important scheme had terminated at the end of September?


John (Jack) Davis: That is true, and the cause is to be found in the remarkable increase in the production of fish on the east coast. I have just been informed that the overall fish production is up more than 20 per cent this year.


Walter C. Carter: Mr. Speaker, has the minister any plan to help the Canadian commercial fisheries make a profit for the Canadian community as a whole, or does he now consider this to be a burden on the Canadian community in light of a speech he made in Boston I believe on Friday?


Mr. Speaker:: Order. I suggest to the hon. member that the question as asked is much too general in nature. Perhaps it could be placed on the order paper.


Walter C. Carter: On a point of order, Mr. Speaker, this is a very important matter to the fisheries of Newfoundland. A great deal of concern has been expressed by fishermen in
Inquiries of the Ministry that area over a speech made by the minister in Boston on Friday.


Mr. Speaker:: I recognize the point of order raised by the hon. member but, as he knows, there is a standing order which provides for a discussion of matters which in the opinion of members ought to be discussed the same day. The hon. member does have an opportunity to discuss this matter later on today.


Walter C. Carter: I should like to debate the matter at ten o'clock.


John Howard Lundrigan: Mr. Speaker, there are several hundred thousand people in the Atlantic region who are dependent on fisheries, and in Newfoundland there are 25,000 people who are in dire straits.


Mr. Speaker:: The hon. member has stated his point of order. The hon. member should first resume his seat. I should remind the hon. member that, if hon. members do not accept a ruling from the Chair that a question is not urgent and feel that the matter ought to be discussed, the hon. member has an opportunity to discuss the question the very same day during the adjournment proceedings. This was the only suggestion that was made to the hon. member for St. John's West, and he has accepted that suggestion.


John Howard Lundrigan: May I just say on the point of order that one of the reasons for the obvious antagonism which exists, and which has perhaps resulted in an element of uncertainty, is that we are not able to get satisfactory answers to our questions. There has been a controversy created outside this house as to certain policies in relation to fisheries.


Mr. Speaker:: Order, please. This, of course, is a point of debate and I fail to see how it can be raised as a point of order.



INQUIRY AS TO ESTABLISHMENT OF FRESH WATER FISH MARKETING BOARD

[Stage Direction]
On the orders of the day:
Edward Richard Schreyer: Mr. Speaker, in view of the fact we were told some months ago that the government of Canada would try to conclude negotiations with the provinces to establish a fresh water fish marketing board by mid-October, will the Minister of Fisheries indicate whether an agreement has been reached on this matter with the governments of the three prairie provinces?
1654	COMMONS
Inquiries of the Ministry


John (Jack) Davis: Mr. Speaker, discussions have been held between representatives of the prairie provinces and the Minister of Industry, Trade and Commerce. I gather there is one more meeting scheduled. Legislation to establish this marketing board has already been announced in the throne speech.



FINANCE


[Stage Direction]
On the orders of the day:
Robert Lorne Stanfield: I should like to direct a question to the President of the Treasury Board relating to the tabling of communications received from the province of Ontario on the financial estimates of the cost of joint programs.
In view of the fact that the minister has referred to letters of February 5, February 27 and June 20 is he now prepared to table those letters and put the correspondence before us, so we may become familiar with this correspondence for discussion during budget debate?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, with the consent of the government of Ontario I would be delighted to table all the official correspondence. I do not think the Leader of the Opposition would wish to initiate the practice of publishing any informal correspondence which clearly was intended to remain unpublished. In respect of official correspondence and with the consent of the government of Ontario they may be tabled.


Robert Lorne Stanfield: In view of the fact the minister has been asked to seek the approval of the province of Ontario and has referred to the contents of these letters, would it not be appropriate to have them tabled?


Charles Mills (Bud) Drury: I am not sure whether the question is addressed to me rhetorically or to you, Your Honour, but I do not think the Leader of the Opposition would wish to initiate a practice of publishing or tabling in the house correspondence of an informal character which has taken place between officials at different levels of government.


Marcel Joseph Aimé Lambert: Mr. Speaker, does the minister suggest that letters between officials and that is a very wide and encompassing term- from the deputy minister down should not be tabled in this house?

DEBATES	October 22, 19G8


Charles Mills (Bud) Drury: Mr. Speaker, perhaps I should have made it more clear to the hon. member.
I did not say no letters should be tabled. I did say that informal letters between officials at various levels of government not intended to be published should not be subsequently published. I suggest this would quite seriously inhibit the full and free exchange of information which we are seeking.


Marcel Joseph Aimé Lambert: Mr. Speaker, since the minister has referred to informal letters between government officials will he kindly advise the house how a determination is made as to what is an informal letter not to be published?


Mr. Speaker:: Order, please. I think before we call orders of the day we might allow the hon. member for Marquette to ask a question.


Robert Lorne Stanfield: Mr. Speaker, I do not wish to argue the point, but I want to be sure I am not understood as accepting the point expressed by the President of the Treasury Board. I want to take this opportunity to say I disagree with the position he has taken, and will seek an appropriate opportunity to discuss the matter.



CANADA ELECTIONS ACT


[Stage Direction]
On the orders of the day:
Mr. Craig Stewart (Marquette):: Mr. Speaker, I should like to direct my question to the President of the Privy Council. It relates to a question asked in the house on September 18, in reply to which the minister said the government was giving consideration to some means of enabling members to deal with the recommendations of the former chief electoral officer. Will the minister indicate what decision has been reached in this respect?


Donald Stovel Macdonald: Yes, Mr. Speaker. Hon.
members will have noticed last Friday reference of the subject matter of a bill dealing with the elections act to the committee on privileges and elections. The hon. member will also be aware that this committee will be holding its organizational meeting on Thursday next. It is the government's intention, subject to the business of the committees generally, to call together the committee on privileges and elections for the purpose of examining these various and different questions regarding the election system.
October 22, 1968

[DOT] (3:20 p.m.)



POST OFFICE ACT


[Stage Direction]
The house resumed, from Monday, October 21, consideration of the motion of Mr. Kierans for the second reading of Bill No. C-116, to amend the Post Office Act, and the amendment (p. 1623) thereto of Mr. Macquarrie.
Mr. Real Caoueile (Temiscamingue):: Mr. Speaker, when the house adjourned last evening, I think that I had clearly shown the support given by Liberal members to the Canadian dailies which are complaining about Bill No. C-116 as brought before the house by the Postmaster General (Mr. Kierans).
Mr. Speaker, I would like today to dwell on two points. In the first place, as for the conditions made to our newspapers, our periodicals, I feel that the American periodicals will take advantage of lower mail rates than those now suggested for our Canadian periodicals. In my opinion, this is a flagrant case of injustice, for our periodicals, whether they are dailies, weeklies or monthlies. The other point which I must draw to the minister's attention is the conditions made to our weeklies. Our small regional newspapers will certainly suffer from such provisions as introduced in Bill No. C-116.
Mr. Speaker, we have all received telegrams from managers of English and French publications. I have here a telegram from the Quebec Chronicle Telegraph signed by Mr. Moonigan which states:

As Canada's oldest surviving newspaper we resent government contention it is subsidizing newspapers. If government proceeds to raise second class mail rates to penalize newspapers, it must also forthwith stop subsidizing C.B.C., C.N.R. and other corporations run on public moneys. We urge reappraisal of government position. Post Office bill direct blow to our existence. It will mean abandoning 30 per cent of our subscribers. Is this just society promised by Prime Minister Trudeau?

Mr. Speaker, we spoke of this "just society promised by Prime Minister Trudeau" before the elections, and the Quebec Chronicle Telegraph "realizes it after the election".
Here, for example, is a telegram from the general manager and editor of the newspaper Le Soleil and I quote:
18 owners and senior staff members of the Quebec dailies met with the minister and Post Office officials Thursday stop Several ministers also
Post Office Act
seen stop Sending copy of brief to your Ottawa office Monday stop Refer you to our Thursday editorial and report page 3 stop Bill means end of subscriptions and delivery of dailies in rural areas stop Representations also made that subsidies not given to publications but to consumers stop If government policy is to eliminate subsidies it should also apply to state radio and television and others. Gabriel Gilbert, editor and general manager.
I could also quote telegrams from Mr. Blais, of L'Action of Quebec City, and from Mr. Andre Bureau, of Les Quotidiens du Quebec Inc.
Mr. Speaker, the daily newspapers will not necessarily lose subscribers. Why? Because they do not have to increase their subscription rate. Everybody understands that, and they do too. What matters to them are the advertisements in newspapers, and if we look at the facts as they are, we see that the owners of daily newspapers tell us that they will not be able to provide information to the rural districts in Quebec.
Mr. Speaker, it is the daily newspapers like Le Soleil of Quebec City, La Presse of Montreal, Montreal-Matin-an unimportant and trivial newspaper of Montreal-and other similar papers which, not only, during election campaigns, but at all times, support the system in which we live. Today, the minister is asking them to pay their share, to pay for the operation of their system, and they are against it. But when the time has come to dot the i's, they are not around. Today we feel sorry for the small people, whereas in fact the law will still allow the big to eat the small.
The little weeklies will have to foot the bill, will lose subscribers, will lose ground in the field of national advertising, because their circulation will not be large enough.
The big newspapers will increase their advertising rates, because they sell advertisements according to their circulation. They will probably keep the subscription rates as they are now but they will increase the advertising rates. The big dailies will stay alive and we will continue to see in Montreal's La Presse full-page advertisements by Simpson's, Eaton's and Morgan's.
Mr. Speaker, a big newspaper like Le Soleil or any other of its kind, will not have to increase its subscription rates. At this time, I would not forgive myself-and it would not be fair for me not to say so-if I failed to mention that, for several years now, Le Soleil of all the Quebec dailies, has probably been the most unbiased towards Social Credit, the Ralliement Creditiste. As to the Quebec

October 22, 1968
Post Office Act
Chronicle Telegraph, we have had no publicity from it. Let us take the Montreal Gazette for instance. What do we get from it? We speak every day in this house, and we never see the shadow of a line in this newspaper. The Montreal newspaper La Presse gives us zero multiplied by a million, which equals a million of nothing zero. This is what we get from the Montreal La Presse.
These are the people who want to supply information? What information do they supply? What facts does the Montreal La Presse report on the eastern townships, the area in the vicinity of Montreal and Montreal itself? They report what they feel like reporting.
The parliamentary correspondents are not responsible for that, they only write the articles. The Canadian press gives the news, but the potentates of Canadian journalism decide what is to be published and what is to be omitted in the newspapers. They overlook Social Credit, and systematically: yet, they have the nerve to ask us to fight for their interests when they are up against a problem of their own doing.
[DOT] (3:30 p.m.)
The minister tells them there may be increases, and they feel their rights are being encroached upon. They feel that democracy is being threatened because they are asked to pay their share. But I say this to them: You have been fighting for 30, 40 or 50 years to keep a majority government in power. During the election campaign, we heard: Elect a majority government, that Canada may progress. We have a majority government and look how the newspapers are treated today by this majority government. If we had a minority government and if we held the balance of power which we requested, this bill would not be before the house today.
When the former Postmaster General (Mr. Cote) introduced in the house a bill raising postal rates, the bill was defeated and the rate of delivery for letters and mail was not increased. Even though the government was defeated the mail service was not stopped. No. How did we continue to provide it?
Today, however, the hon. minister says: If there is no increase, we will not be able to continue providing mail service to the Canadian people. This is nonsense, a lie, and the minister knows that it is possible to find money elsewhere than in the pockets of the Canadian people to continue to improve the Canadian postal service.
[Mr. Caouette.l
Mr. Speaker, personally, I have nothing against newspapers. No. All I ask them is to be objective, honest, unprejudiced, and truthful. It is simple. We do not ask them to flatter us, the Ralliement Creditiste. Let them only be fair to us and let them stop blowing bubbles for the government, as they started to do before the election.
And let newspapers say: Is this the just society promised by the Prime Minister? Mr. Speaker, we will hear all about it tonight. Yes, tonight. We will hear the budget being read, and we will have a foretaste of the just society, and tomorrow morning that will be published in the newspapers.
Canadian newspapers, Le Soleil, La Presse and all the others will say that, due to unusual circumstances and a monetary deficit, the government is forced to raise taxes. The Postmaster General gave the same reason when introducing Bill No. C-116.
Mr. Speaker, we already know the answer. As for the honorable minister, he knows how to solve the problem. He told us yesterday that there was only one solution to the problem: raise taxes and get the money from the taxpayer's pockets. However, the honorable minister knows that the majority of the people in his riding cannot afford to pay more taxes than they do now. In order to be elected, the minister never said that he would increase the postal rates. He would never say so before the election, only after, here, in the house. Those people say one thing at election time and another thing after. And we legislate and administer in such a way as to conceal the facts from the Canadian people.
Mr. Speaker, we shall not endorse the bill. Certainly not. Not because we have any affection for those newspapers, but because we want to safeguard democracy in Canada and prevent the small from being swallowed up by the big.
We also take the defence of weeklies which will bear the consequences of this legislation since, as I was saying, they do not get national advertising as easily as the dailies I mentioned earlier, namely Le Soleil, La Presse, The Montreal Star, The Gazette, The Toronto Star, The Globe and Mail, The Vancouver Sun or Le Patriote du Manitoba.
Mr. Speaker, we will support the amendment of the Conservative party asking that the bill be referred to a committee for further consideration, but not because we are very infatuated with the Conservatives. Absolutely not. We know that if the Conservatives were sitting opposite, they would not do better but
October 22, 1968

exactly the same as the Postmaster General. Both parties are similar. Put them in the same bag, shake it and the first one to come out will be exactly the same as the other one.


Some hon. Members:: Hear, hear.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, in my few remarks today I want to speak directly to the amendment before the house, submitted by the members of the official opposition, to the effect that this bill be not now read a second time but that the subject matter be referred to a standing committee for further consideration. What has transpired in the deliberations of the house today has reinforced my thinking in this regard. I had hoped to speak last night but we got into a new aspect of the debate. Actually, however, I am very pleased that I am speaking now following the earlier events today. The house leader in response to a plea that this debate be set aside in favour of a matter that I as a member from western Canada regard as being of much greater priority, namely, the agricultural emergency, confirmed my viewpoint that the government from the Prime Minister (Mr. Trudeau) down is out of touch with the priority needs of this nation.
If we were to follow the good precedents that have been established in this house during recent years there is no reason at all why we could not deal with this complex matter in committee. Everybody recognizes that the amendments to the Post Office Act, as they have been brought forward by the minister, involve a complex subject which could be detoured temporarily into the responsible committee to make way for the farm legislation, which has been pending ever since this house opened. We could deal expeditiously and much more intelligently with the subject matter of the post office bill in a committee and in the meantime get on with a subject of greater priority. Then, the post office bill could come back to the house and I am sure the debate would proceed much more expeditiously. Instead, the member of the government charged with the responsibility for guiding the day to day business of the house, the house leader, has used the old threat that we have seen used far too frequently under Liberal administrations. He has said: "You will get the farm legislation as soon as you have dealt with the post office legislation." Mr. Speaker, this is a complete misunderstanding and abuse of the whole matter of priorities, and my intention to
Post Office Act
devote my remarks entirely to the amendment before the house has been reconfirmed by what has already transpired here today.
The minister made a comprehensive statement yesterday which indicated that as the member of the cabinet responsible for the administration of the Post Office Department he had approached the subject from a very narrow perspective. As I listened to his remarks he sounded more like a voice from the board room rather than vox populi. I was not in the house when the initial debate on the resolution took place; I was away at the United Nations at the time. As I reviewed the debate, however, it seemed to me that the same emphasis was given to the matter by the minister at that time; it was an urban-oriented approach. Now the minister has partially backed down and has conceded that there are special communications problems in the more outlying areas of the country, particularly in the rural areas. But he still has not come to grips with what I and the members associated with me in this party regard as the fundamental issue, that is, the purpose and the functions of such an important service as the post office.
[DOT] (3:40 p.m.)
It is obvious from press statements and from what the minister himself has said that there has been unhappiness within the Liberal caucus. The hon. member for Hillsborough (Mr. Macquarrie) indicated in his excellent speech yesterday that the committee of 35 was formed to approach the minister on this important matter. It is obvious that the minister is amenable to suggestions because he responded to some of the requests of that committee. How much more important it is that this matter be taken into a much larger committee arena than the committee of 35 and referred to a committee drawn from all parties in the house so its members might put the Postmaster General in touch with the viewpoint held in various parts of the country and draw him away from his urban-oriented viewpoint and what I feel is his complete misunderstanding of the important fuction of the Post Office Department as a communications system in this nation. How much more effective it would be if a committee were brought into operation for this purpose.
Over the past ten years, because of the growing complexity of national affairs we have been gradually resorting to a greater, more effective and efficient use of the committee system of the House of Commons. The

October 22, 1968
Post Office Act
experts tell us that this is an essential and inevitable trend, and we have been moving gradually toward this desired objective. I would have thought that this government, which during the recent election campaign prattled incessantly about the necessity for greater participation and involvement in the affairs of the nation, would have been the first to support this theme. But what did we hear yesterday? We heard the government house leader resort to some of the most outmoded precedents in defending the government's stubborn refusal to take the logical step in dealing with this legislation, namely, referral to a committee.
One of the first breakthroughs in broader and more effective use of the committee system was ten years ago when the members of the veterans affairs committee, in a long series of discussions and deliberations, undertook a comprehensive review of the veterans charter, as a result of which many necessary amendments were made. More recently we have followed the same practice in transportation matters during the reorganization of this fundamental communications system. I am sure that any of those still members of the house who had the privilege of taking part in that interesting dialogue will agree that the resulting transportation act has been a much more effective document than it would have been had it not been referred to a committee before receiving second reading in the house.
I could mention other similar developments that have taken place. Suffice it to say that I am sure it is a disappointment to members on both sides of the house and particularly to the people of Canada, following the pious pronouncements of the members of the Liberal party during the recent election campaign about greater involvement of parliament and the people in participatory democracy, that the spokesman for the government yesterday took a completely reactionary approach.
The Postmaster General indicated when he spoke yesterday that he regards the postal service as an industry. I think I am quoting him correctly when I say that he used words to the effect that the Post Office Department is not an institution but a function. That, too Mr. Speaker, sounds like a voice from the board room and not vox populi. Anyone who understands the principles of responsible parliamentary democracy will acknowledge that communications are basic to nationhood, that they are part and parcel of national policy. I am sure we will all agree that in a diverse country such as Canada national policy is of the utmost importance, particularly in the

communications field. We have long recognized in many communications areas that any function of this kind, to use the Postmaster General's term, must be a part of national policy.
I suppose, that in democratic nations post office services were the first to come under a public utility operation because of the importance of communications in holding nations together. We subsidize the Canadian Broadcasting Corporation's electronic communication to a substantial extent. We subsidize our railroad system. In some years we have subsidized Air Canada. We subsidize the operations of the Canada Council. In fact, the grant to the Canada Council is being increased this year over last year. We do all this in the interest of broader communication and understanding, in the interest of development toward nationhood in Canada.
The minister has missed the point as a result of his own personal background. The Postmaster General comes from an environment of many newspapers, with several radio and television stations within easy reach, a teletype service and a private messenger and delivery service. Therefore I believe that his viewpoint has been distorted and he has completely lost contact with the special needs of the rural community.
While the minister has made the gesture of restoring six day service to rural areas, I think this will only confuse the issue. In some constituencies like my own which are half urban, half rural it means that the Post Office Department will still have to function six days a week in order to serve the surrounding rural area, whereas the urban community apparently will be without the six day service. I do not know how this will be arranged in terms of administrative efficiency. Some of the post office workers will have to be on the job to serve the surrounding rural neighbourhood. Notwithstanding this, in the city of Brandon I presume the people will be deprived of six day service.
Another aspect of the government's approach to the matter which amazes me and confuses the public of Canada is that this action flies in the face of another of the Liberal party campaign slogans-the necessity for redressing the balance of regional disparity in Canada. We must remember that Canada is a nation from sea to sea and that all parts must be treated equally in terms of services and facilities. Here we have a complete inconsistency in government policy. I might just go through one or two of these items, Mr. Speaker, to point out what should
Oclober 22, 1968

be abundantly clear and obvious. There are so many inconsistencies in the legislation that has been brought before us that we must, if we are to have any sort of policy that makes sense or any amendments that make sense, refer this matter to a committee so that we may have the necessary dialogue between those of the body public who have been raising the issues and members of parliament who have the responsibility to bring about legislation that is in the best interests of Canada as a whole.
[DOT] (3:50 p.m.)
The main point the Postmaster General made in his presentation yesterday in defence of the amendments was that since there has been such a long delay in making amendments to the act increases in rates are necessary. But associated with that basic point was what the hon. member for Hillsborough termed a double whammy. We are to have an increase in rates and a decrease in services. No wonder the Canadian public has become confused.
No one will deny that there must be some increase in rates, if only to meet the problems caused by the rising cost of living in this country. It was mentioned, for instance, that there has been no change in second class mail rates since 1951 and no change in first class mail rates since 1954. In the interval the cost of living in this country has increased substantially and we are today feeling the continuing effects of what is sometimes called liberal inflation. I am sure this will be demonstrated when the budget comes down tonight because since 1963 we have experienced an inflationary trend that, without exaggeration, may be described as runaway inflation. The cost of everything has gone up. All the staples of life, bread, butter, milk, transportation rates and so on, have become more expensive.
In this house recently we have been preoccupied with the matter of increasing interest rates generally, which would add to the cost of living. So strong did the outcries and protests by Canadian consumers become that the government established a special department to deal with those protests, the Department of Consumer and Corporate Affairs. The establishment of that department will add to the increasing costs of government, one of the main contributors to the rising cost of living. This all relates to the general problem of fiscal mismanagement over recent years.
While we admit that there is a necessity for increased postal rates, the arbitrary manner
Post Office Act
in which the problem has been approached by the minister is not, I think, in the best interests of participatory democracy. The original bill brought before the house in the last parliament dealt with an increase in rates without all the other drastic changes which have been introduced. Without labouring the matter I think it is crystal clear to the people of Canada and, surely, to all members of the house and to the minister that we shall obtain a much more effective reorganization of the department if hon. members have a chance to look at the matter in depth in committee.
It was mentioned that the post office savings bank is to be discontinued. This is an obvious change. I do not think that the Canadian public, following the announcement in the budget tonight of increased taxes which must inevitably come, will have much in the way of savings to put in that bank.
Finally, to sum up the case I have been making in support of the amendment let me say that what the government is doing and the way it is doing it is a reversal in government policy that indicates schizophrenia in the cabinet and is bound to cause confusion in the country. It is like facing both ways at once. It might even be described as paranoia because there are delusions of grandeur associated with it. We were told that the government was going to usher in a just society. On the one hand it subsidizes, to the astronominal tune of some $150 million, the electronic media of communication. I will not spend much time on that point because the C.B.C. was inaugurated by a Conservative government in the 1930's to bring about improved means of communication in this nation. Yet there comes a time when we must pause to consider whether the electronic mass media and the printed word are in balance in bringing about improved efficiency in communication.
The government obviously has decided that the mass media should receive the support of government subsidies at the expense of the printed word. In this there are overtones of authoritarianism since, compared with the effectiveness of the printed word, there is an emotional content in the mass media message. Authoritarian regimes, those that move forward in public policy with a minimum of contract with the public or responsibility to it, do so by an emphasized use of radio and television as propaganda media. As I say, there are serious overtones here that ought to be considered in a committee discussion.

October 22, 1968
Post Office Act
I believe that the printed word is still the main medium of communication in this country. Newspapers and other responsible sources of information in the nation claim that under the terms of the bill as it stands now many newspapers cannot survive. We have seen how in recent years independently owned newspapers have gone out of business one by one until, in order to survive, the newspaper industry in Canada has come under the control of large syndicates. I am sure that the drastic and sudden increase in rates, coupled with the attempt of the government to do in one, fell stroke what it has neglected to do in recent years to adjust costs of post office operations, will have a further deleterious effect on the survival of some independent newspapers in Canada.
The other day I asked the Secretary of State (Mr. Pelletier) if he plans to move against monopolies in mass media electronic communication. He indicated that this was the government's intention and that an announcement would be forthcoming in due course. Yet the government is introducing a policy that is bound to bring about a further monopolistic situation in the newspaper industry. Some newspapers which are economically marginal in their operations have candidly admitted that they cannot survive in the face of this drastic and sudden increase in costs.
To ensure the survival of parliamentary democracy in Canada I appeal to the minister to follow the precedents which have been established in recent years for intelligent discussion and to have this matter referred to a parliamentary committee before second reading. This parliament has been in session for about a month and I have listened already to many instant experts on parliament who decry any waste of time. They have been here for about a month and they say that any discussion in this house is a waste of time. The impression they leave is that it would be much better to allow the cabinet to decide because the cabinet knows best.
[DOT] (4:00 p.m.)
We are facing a generation of instant experts. I think the best definition of an expert I have come across in recent times goes something like this: "X", an unknown quantity, and "spurt", a drip under pressure. One cannot appraise the value of the institution of parliament by an exposure of one or two weeks to this high court of public opinion. This is the place where we endeavor to

achieve consensus by discussion. This is the last hope of redress of wrongs, of justice for the citizens of Canada. We have no ombudsman, and if we are ever to bring about a just society it can only be done by recognizing the vital principle of parliamentary democracy- executive responsibility of the elected representatives.
A few minutes ago we heard in this house an exchange between the first minister of the crown and the hon. member for Winnipeg North Centre (Mr. Knowles) who is a recognized expert-and I use the word "expert" in the best sense of the term-on the principles and practices of our parliamentary system. I was distressed to hear the Prime Minister, who after all is only a peer among equals in our parliamentary system, indicate that he is practising a system of selective attendance for members of the cabinet because he believes they could use their time much better in the offices of the bureaucrats than listening to the representations made in this house by the representatives of the people. This is the sort of trend we must avoid in this parliament. In the last month the trend has increased to an alarming extent and I hope that the Postmaster General, who has had experience in legislatures in other parts of Canada, will accept the recommendation broadly supported by members of the opposition and, I am sure, supported by his own friends, particularly the committee of 35, that this matter be referred to a committee.
It is true enough that the parliament of Canada has more and more business to get through in this complex age. But this still does not lessen the importance of parliament as the ultimate sounding board for all government policy. When the first minister says he has decided that his cabinet colleagues can more effectively discharge their responsibilities by hobnobbing with the bureaucrats rather than with elected representatives, it is time to review our values and the emphasis we place on priorities.
Ministers are also members of parliament. Under our regulations, if they do not attend the house I suppose they will lose their per diem allowances in due course, as would the rest of us in the case of non-attendance. We are all aware that because of the growing complexity of business in the past few years power is moving from this place to the offices of the bureaucrats.
Let me repeat, in conclusion, that if we are to make this parliament effective, if we are to-
October 22, 1968

slow down or reverse the drift to an allpowerful cabinet and the shift to authoritarianism, we must use our system of parliamentary committees more effectively. I plead with the Postmaster General to accept the recommendation of the opposition, put forward responsibly, in order that we may go on with other matters of greater priority which, as the government house leader has indicated, are being held up until we finish our discussion of the post office legislation. We can do what I suggest without even voting on the amendment if the Postmaster General will only give the word.


Some hon. Members:: Hear, hear.


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, naturally there has been much talk about Bill No. C-116. The honourable minister has covered the subject quite well, and I would not be surprised if he should himself propose some amendments during consideration of the legislation. I listened to quite a number of objections from some opposition members and I fail to understand their reasoning when they blame the government for showing a $400 million budget deficit and then for taking measures in order to offset that deficit.
An increase in the cost of government services is not, of course, a pleasant prospect and nobody likes it. I do not think that the minister was happy to introduce those measures, because I know that he has enough experience and intelligence to realize that a proposed increase in the price of government services is never popular.
I also think, Mr. Speaker, that we live in times when the vast majority of Canadian citizens realize that empty promises are totally irresponsible and that someone has to pay for every service. There may be two schools of thought on the subject, that is to say some services must be paid for by the community, while others have to be paid for by the people who use them. The minister and his advisers-a good many of us agree-believe that, with regard to postal services, the first people who should absorb this portion of the deficit which should disappear, must be those who benefit from these services.
Other measures will probably stem from this one, but I still believe that it is a sound theory by which the users of a service pay for its cost. Beside, the rates have not been increased for a long time and we wonder, for instance, if the cost of 6 cents for a letter
Post Office Act
today is not equivalent to its cost of 2 or 3 cents, 10 or 15 years ago. Everyone knows that nowadays money does not have the same value.
Members on the opposition side have advanced all kinds of arguments that I shall not try to refute, because I would have to hold the floor too long. But evidently, the minister and ourselves were expecting that newspapers would protest, as would anyone who is called upon to pay more taxes.
[DOT] (4:10 p.m.)
Indeed it hurts us, as well as our friends opposite, when we see our income tax going up. Of course, we do not protest, because that would be unbecoming of members of parliament. The members of the Ralliement Creditiste only can afford to do so; they protested against the increase of rates on mail forwarded by members. They are the only ones who did, as far as I know; I heard nothing from the official opposition nor from the New Democratic party.
But it is a fact, Mr. Speaker, that all such things hurt. I do not say they are not right because they hurt; there comes a time when, whatever the party in office, the government has to face such a situation.
Everyone who reads the newspapers knows that there is now all over the world a sort of monetary crisis, which is even worse in other countries. I have here-I am sure my colleagues have it also-the latest report of the governor of the Bank of Canada, Mr. Louis Rasminsky; it explains how the government succeeded in avoiding a severe financial crisis. While other countries were forced to devaluate their currency, Canada was able to restore confidence among investors here, and maintain a reasonable prosperity and prevent an increase in unemployment. According to what the governor of the Bank of Canada says in the report, Mr. Speaker, it was imperative for the government to take all possible means to balance its budget.
As everyone else I skimmed through the report of Les Quotidiens du Quebec Inc.- Quebec dailies-and indeed, what they had to say was predictable. Nevertheless, Mr. Speaker, I would like to have the chance of proving that some of those assertions are exaggerated, that some figures are not realistic.
Besides, members of the opposition pointed out a while ago that newspapers are going through some form of modernization crisis. Some of them have gone out of business, and

October 22, 1968
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those who studied the situation closely would have us believe that they did because their costs are too high. I know, because I once owned a newspaper and had occasion to deal closely with its administration, that the problem is one of streamlining their operations. The minister, I believe, told us that some newspaper owners stated that if they could not benefit from those special rates, that form of subsidy from the government, they would go bankrupt and would be forced out of business.
Meanwhile, several newspapers throughout Canada will not be affected by the increase in rates. For instance, the Montreal Dimanche Matin has a circulation of 325,000 copies, hardly any of which are mailed. The paper is delivered otherwise. And so, in spite of a high circulation, that newspaper will not be affected.
I believe this conclusion can be reached: the problem for newspapers is more one of streamlining than one of increased rates. I therefore urge our newspaper friends to have a close look at their production and distribution system with a view to lowering costs instead of asking the government to subsidize them and pass on the costs to the small taxpayers. I fail to see the logic of the member for Temiscamingue (Mr. Caouette) who accuses the government of squeezing the small taxpayer while asking the government to have him pay for the deficits of some $100 million, which by next year will reach $125 or $150 million, in order to allow newspapers to continue to prosper. Mr. Speaker, there is a lack of logic somewhere.
On the other hand, Mr. Speaker, I presume that I shall be allowed to make a remark since my friend, the hon. member for Temiscamingue, has done me the honour of quoting me several times in this house last night, thus giving me free publicity. I hope that I may be allowed to express my views on the interventions of the hon. member for Temiscamingue, since it is the second time he speaks.
I am still waiting for the opportunity to answer him fully and, perhaps, in the same terms as he uses, because I would like to remind him-I am sorry that he is not in the house, but his colleagues will tell him what I said-that invectives and accusations do not bother me. I have met much larger and much greater opponents than the hon. member for Temiscamingue in my political career. If, in the last few years, I have perhaps become a little more moderate in answering those who

attack me, the hon. member for Temiscamingue should not forget that I nevertheless still have a rich enough vocabulary to follow him in all the intricacies of his arguments and in his mania of hurling invectives and insults at those who do not think the way he does, even to the point of questioning their conscience.
This reminds me, Mr. Speaker-and I hope I will be forgiven for quoting something which perhaps is not a very elegant comparison-of a remark made by that firebrand, Mr. Armand Lavergne, who was a member of this house and also of the provincial legislature, and who, when once attacked by someone who was more pro-British than he, had answered, as a starter, and in a much more elaborate way:
X declare! This British bull is suddenly attacking me. Upon my word, since he is asking for it, I cannot resist playing the picador.
I am almost tempted to plagiarize the late Armand Lavergne and to say to my friend, the hon. member for Temiscamingue: If it is not this creditiste bull breathing defiance and pawing the ground. Since he seems so keen to fight, I cannot resist playing the picador and telling him that it is easy for him, during the discussion of a measure such as the one which we are now considering, or many others which he discussed throughout the province, in all areas where people are misinformed and destitute, thus giving more weight to this rather commonly known proverb: "It is no use preaching to a hungry man" to criticize, because he has no responsibility. He knows that he will not be called upon to solve the problems of Canada to-morrow, but I say, that he cannot pass all limits, Mr. Speaker.
One should not make political capital, lure the poor with false expectations, and act like those pirates who used to lure boats onto the reefs with flashes of light during the storm so as to grow rich on their cargo. The hon. member knows quite well that he cannot make political capital by deluding people into believing that thanks to a mysterious, magic and miraculous formula, he can solve all the problems of the citizens of Quebec or Canada. Moreover, he admits it, since he says that he has been advocating that for 35 years and others had tried to do so in other provinces and countries, but it has never been implemented.
Then, he gives rise to false expectations and delusions among the poor who need bread and concrete measures rather than airy
October 22, 1968

promises and demagogic behaviours or comments of which the hon. member for Temiscamingue is fond. He wanted to say, Mr. Speaker, and I quote his words, so to be sure not to forget anything of that thoroughly affected prose. Besides, he has attended classes with Mrs. Gilberte Cote-Mercier and it is there he learned to use bland words. Madame Gilberte Cote-Mercier dubbed him a louse, a traitor, a turncoat and many other epithets. That was printed in the newspaper Vers Demain, and it is probably there that he learned his humanities. That is why he loves that kind of style.


André-Gilles Fortin: Mr. Speaker-


Mr. Mongrain:: "The hon. member for
Trois-Rivieres", and I quote-


André-Gilles Fortin: Mr. Speaker, I rise on a question of privilege.
I would like to point out to the hon. member that if the purpose of his spiteful innuendos is to defend the Postmaster General (Mr. Kierans) on the subject of the Post Office Act, we should like him to prove what he said at the beginning of his speech, when he said that he would prove that some of the statements contained in the brief submitted by the Association des quotidiens du Quebec are false. Therefore, I ask the hon. member for Trois-Rivieres to prove his statements rather than be satisfied with-
[DOT] (4:20 p.m.)


Mr. Deputy Speaker (Mr. Bechard):: Order. I think this is rather a question than a point of order. I recognize the hon. member for Trois-Rivieres.


Joseph-Alfred Mongrain: Mr. Speaker, I do not intend to let the hon. member for Lotbiniere (Mr. Fortin) dictate to me the speech I should make. He should rather be proud I am quoting his leader. Of course, I am quoting him verbatim as it is on that I want to make some comments. The hon. member for Temiscamingue (Mr. Caouette) said yesterday evening:
Mr. Speaker, the member for Trois-Rivieres (Mr. Mongrain) who was looking after the interests of his people in the Mauricie district-
I thank him for testifying in my favour. 1 was and still am looking after the interests of my people.
-and who the other day was accusing me of not being present in the house-
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Mr. Henri Latulippe (Compton):: Mr. Speaker, I rise on a question of privilege.
Yesterday, Mr. Speaker, the hon. member for Temiscamingue was called to order and told he was out of order. The hon. member for Trois-Rivieres (Mr. Mongrain) has been doing exactly the same for the last few minutes and you did not call him to order. Mr. Speaker, I think the hon. member should be called to order.


Mr. Deputy Speaker (Mr. Bechard):: Order, please.


Joseph-Alfred Mongrain: I agree with the hon. member for Compton (Mr. Latulippe) when he says the member for Temiscamingue was out of order yesterday evening. However, I think it is only fair to let me answer him since he was attacking me without the slightest provocation.
It will not take long. I know we have too many serious matters to discuss. I am taking it up where I left off.
-who was looking after the interests of his people in the Mauricie district-
It is the Gospel truth.
-who the other day was accusing me of not being present in the house-
True again, he is not here today.
-realizes now that I am more present in the house than he is, since he does not have the courage to stand up and fight for Le Nouvelliste of Trois-Rivieres.
If I wanted to be rather rude, I would say that this is an idiotic assertion, but I am not saying it, as I would be told that such language is unparliamentary. I have seldom seen anything as childish as that.
He is more present in the house than I am because he has the floor. But if I had asked before him to be recognized, I would have been. It was my intention to speak this afternoon only and I am not allowed to do so. He could not be more present in the house than I was last night since I was here as well.
I believe I do not have in this house either to praise or to curse Le Nouvelliste or La Presse for not giving me a due amount of publicity. This is not what I am here for. And I quoted that excerpt from the speech of the hon. member for Temiscamingue to show the shallowness of his remarks. He made an exhibition of himself and played the fool. It is amusing at times, especially in the evening, when we are tired. We would find it more amusing if he did not resort to such cheap

October 22, 1368
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tricks to try and run down those who do not agree with him.
In short, Mr. Speaker, I will not labour that point further because, once again, there are serious things to be discussed and we shall try rather to cover that serious aspect of the discussion; I repeat that differences of opinion are surely legitimate, as to the way of financing services, and that the formula advocated by the minister, namely to have them paid by the users, seems to be acceptable.
Everyone wants to make suggestions in the discussion which is now taking place but the opposition has not yet made any constructive suggestions as to how to make up the deficit; all they have said is: "Refer the matter to the committee of the house".
Now, we in the house are doing the work of the committee of the house and, if there are any constructive suggestions, I am sure the minister will be ready to accept them for he had already said so. He told the members of the opposition: "A group of Liberals have made suggestions to me; do the same and I will listen to you". He is still ready to do so, Mr. Speaker.
The minister has still time to amend his bill, if the matter is to be taken seriously, of course. But if there is to be opposition just for the sake of opposition, the subject, in my opinion, is shrewdly chosen; demagoguery can have a field day, because the public readily applauds any opposition to tariff or tax increases. It is all too easy, but will this settle the problem the nation has to face? I wonder, because if we take into account that a $100 million deficit in one department, may increase next year by 25 or 30 millions or more, I think that all those who reason objectively and set aside all personal and party considerations, probably feel that something should be done to settle the question.
Instead of putting the blame on the minister, we should, on the contrary, admire his courage, for he has enough political experience to know that the measure he is proposing is not popular. However, it is a must; he has done his duty come tide or high water.
Mr. Speaker, it has been said during this debate that we were expressing the views of our constituents. I have 54,000 constituents and, during the week-end, we have had many meetings and consultations, concerning various measures which are introduced in this house. The question has been raised, but I heard no protests as bitter as those of members in the house. The question was raised,
[Mr. Mongrain.1
explanations were asked for, and when I told the people in my riding the amount of the deficit of the Postmaster General's department, and told them that it would increase at the same rate in the future, they said: Well, somebody has to pay and what not the users; it seems to be the most reasonable formula.
Some tried to say that it was an injustice, Mr. Speaker. Some pretended that the just society in the making, was in fact unjust. To the contrary, I think we apply distributive justice by making those who use the service pay for it rather than the non-users. If the government took the latter action, it would be accused of charging the taxpayers for the deficit of the postal service.
Some say it will impair information. Mr. Speaker, the statement is at least grossly exaggerated. In fact, there would be other sources of information, even if all newspapers were to disappear tomorrow morning. Nobody thinks that all newspapers will disappear tomorrow morning, or next month or next year. There will surely be ways to relay the information. Newspapers will not be bothered and they will be able to say what they like to the Ralliement Creditiste, or to the Liberals, we shall not cause them any trouble. However, when it comes to the newsprint the use and sell by means of advertising, they will have to pay for its distribution. This again seems to be perfectly compatible with distributive justice.
Then the honorable minister was blamed for not having heard those concerned. On the contrary, I know that he has had extensive conversations with all those concerned, not only with newspapermen, but with all kinds of people connected directly or indirectly with the press. They had the opportunity to submit any possible suggestions or criticism. What would be gained by referring this to a parliamentary committee? Things would remain stalled a little longer, Mr. Speaker, and most probably the end result would be the same. It is no secret that in life everything must get paid for and paid by somebody, and it is only normal that those services should be paid by those who use them.
Some more or less serious comments have also been made, for example the comparison by an honourable member with the National Arts Centre. He said that we had invested $50 million which could have been given to the Post Office Department to make up the deficit. It would be a "band-aid". It could have remedied the situation for a year, but Canada would have been deprived of that monument
October 22, 1968

which every Canadian, rich or poor, great or humble, will be able to enjoy. This again is a statement, similar to many others which have been made in this house, which must not be taken seriously.
Mr. Speaker, in closing we can say that such a measure really does hurt everyone. However, we must remember the words spoken by the late President Kennedy: Think of what you can do for your country rather than what your country can do for you. If our country must continue to pile up deficits, if our country must continue to subsidize selfsupporting firms by increasing the burden of taxation resting on the shoulders of the poor people and of the little man, the government does not show any distributive justice. But, in a legislation like this one, the government is practising distributive justice; it has the courage to take such actions which enable it to make ends meet and when it will have done it, it will be able to maintain and perhaps to increase this confidence which foreign investors show by investing in Canada, so that our business firms expand and that other firms come into being. There would be less unemployment and misery at home thanks to real money and not through empty promises nor artificially inflated balloons.
This is why, Mr. Speaker, I support the bill of the honourable minister generally, while I shall perhaps support some amendments that he will himself propose.
[DOT] (4:30 p.m.)


Martial Asselin: Mr. Speaker, when the member for Trois-Rivieres (Mr. Mongrain) rose to give his speech, of course I expected him to support the measure of the Postmaster General (Mr. Kierans).
Mr. Speaker, I see with astonishment that some of our friends opposite have returned to the fold of the Liberal party; every day some of them practice what I would call a "bootlicking" policy as we have witnessed in the course of the present debate.
The member for Trois-Rivieres obviously spoke certain truths and on some points we agree. But when he tells us that the minister had the courage to levy taxes and that to his mind, that is the only way to correct the situation, I come to the conclusion that the member could not possibly have studied the bill in depth to make such gratuitous assertions. Let us dwell on this point. It is easy to say that we have a deficit and that it must be made up by levying taxes.
Post Office Act
Mr. Speaker, I read very carefully the speech the minister made when he moved second reading. He then said: For some years now, the Post Office Department has had deficits in various amounts of up to one hundred million dollars. Unless taxes are increased, it will have an even larger deficit next year. The minister also told us what the reasons were in his opinion, for the deficit over the years in the Post Office Department.
It is true that, in the course of his speech, the minister told us that he had entrusted to experts the task of studying the postal services in depth. But I maintain that the minister is going backwards. If he wants to levy a tax to make up the deficit, to my mind, he should start by finding out the reason for the deficit.
The minister immediately applies a "band-aid" by imposing a tax which will not cover the deficit of the Post Office Department. He could at least have given some thought to low income earners who will again be penalized by the tax imposed by the minister. If the minister at least had spread out his tax increase over a period of two or three years, perhaps it would have less inconvenienced those who will have to pay the bill.
The hon. member for Trois-Rivieres says that the members of the opposition are against the measure. Naturally, we are against a further increase in the taxes paid by the taxpayers, and when my hon. friend sat in this house as an independent member, he also sometimes opposed a tax increase imposed by the government. He was with us then. I understand that, today, he is bound by party discipline, and I am surprised to see that the hon. member for Trois-Rivieres should conform so graciously to this discipline imposed by the Liberal party. I did not know that aspect of his character before.
The hon. member for Trois-Rivieres told us that the minister shows courage in imposing a tax. I say that neither the minister nor the government is justified in doing this. Before the last election, the Liberals showed much more courage in telling the Canadian people: We will have to impose taxes, and you will have to judge us on our political program. However, there was no question of raising taxes before the general election, and the party in power has shown itself very cunning in the administration of the country for the past thirty or thirty-five years.
At the beginning of a term of office, taxes are imposed in all sectors. At the end of the mandate, near the third year, the voters are

October 22, 1968
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given all sorts of goodies and they are asked to vote after being reminded of the goodies they got the previous year. It has always been the same, Mr. Speaker, and I say that if the minister or his government had shown before the election, the true financial picture to the Canadian people, the results would naturally not have been the same.
I see here, the Minister of National Revenue (Mr. Cote) who nods-


Hon. Jean-Pierre Cote (Minister of National Revenue):: I was bowing to Mr. Speaker.


Martial Asselin: I apologize, he says that he was bowing to Mr. Speaker.
I know that the minister understands that if his government had been candid with the voters at the time of the last election, if it had simply said to the people what was the financial condition of the government, less Liberal members would have been elected. We will know tonight the impact of this government's improvising policy.
I say to the minister

he has known it for a long time-that a minister of the Crown who wants to have a bill passed by the house must give evidence that he is right in bringing it in. It is not up to the members to prove to the minister that he is wrong in imposing taxes, and if I read carefully the minister's speech given at the stage of second reading of the bill, I find that the only reason he has invoked to increase the postal rates was his wish to make up a deficit. There again, I repeat what I said earlier-that it would have been more logical for the minister to consider what was wrong in the department, and then proceed to the required reorganization. In a few years, the minister will have to face the problem of automation and he will have to take other decisions. Before increasing taxes, the minister ought to know the facts about the Post Office Department and not merely introduce a bill and say what a member of the board of the Montreal Stock Exchange might say: There is a deficit, so much money is needed, such taxes must be imposed. This is more or less what the minister said the other day.
Obviously, some opposition members have objected, and still do, to that measure. We were terribly happy, Mr. Speaker, when we heard there were Liberal members who were also against this bill.


Joseph-Alfred Mongrain: You are misinformed.


Martial Asselin: No. And yet, it has been published in newspapers. I think that the minister said it himself, as reported in Hansard on page 1603, and I quote:
However, Mr. Speaker, in respect of the latter reduction in service it has become apparent as a result of representations made directly to me, and by members here including the 35 men good and true-


An hon. Member:: Liberals.


Martial Asselin: Obviously they were Liberals.
-and the hon. member for Gaspe (Mr. Cyr)-
Indeed, the minister had to convey his little political message; we forgive him all that, knowing that it is done in every parliament. We thought it would go no further. But then the flatterer came out; we saw the member for Gaspe rise in the house and say: The opposition should stop talking; we should pass this bill. Then he started showering flattery on the Postmaster General. It was obvious that the member for Gaspe had been under the steam-roller. It was easy to see and to guess. As concerns the 35 others who were with him, we did not hear about them. The member was told: Listen, keep quiet, and make a nice speech to support the bill.


Joseph-Alfred Mongrain: Mr. Speaker, I rise on a point of order.
The member for Charlevoix says that 35 Liberal members are objecting to the bill and immediately after, that 35 members are objecting to a clause of the bill. There is a difference on that point and surely the honourable member for Charlevoix should not report innaccuracies.
[DOT] (4:40 p.m.)


Martial Asselin: Mr. Speaker, I would ask the honourable member to follow my speech more carefully because he did not understand it.
I only pointed out that, according to the minister-and that has been reported in the press-the honourable member for Gaspe joined 35 liberal members in opposing the minister's bill. If the honourable member for Trois-Rivieres could reveal the secrets of his party caucus, he would have to agree that what I said a while ago was accurate. I said that these 35 gentlemen whom the minister mentionned have been made to toe the line. That is why we have seen last night the honourable member for Gaspe bowing and scraping and telling to the minister that he was a smart operator. These people change their mind very quickly.
October 22, 1968

The honourable member for Gaspe and his 35 liberal colleagues have changed their mind within a few hours. However, that is no reason why we, from the opposition should allow the minister to push the rate increase through because we believe that such a step is not justified under the circumstances and that it is going to encourage the increases in the cost of living and inflation.
We are already facing a serious inflation problem in this country. Yet, the government had promised us to take the necessary measures to check inflation, and if the member for Trois-Rivieres will follow my reasoning, he will find that if postal rates are increased, the consumer will again foot the bill instead of publishers who will pass on the increase to the consumer. If the consumer has less money to spend and if the price of a product keeps increasing, the member for Trois-Rivieres knows perfectly well that inflation will follow.
The measure proposed by the minister is an inflationary one, and considering the economic and financial circumstances now prevailing in the country, the Canadian people cannot afford to support such a measure which, I think, will contribute to increase the cost of living.
Of course, the hon. members have informed the house of the representations they had received. I am convinced that the members of the government as well as those of the opposition have received representations from almost all the newspapers, which complained to the minister and even met him. I shall spare the minister the reading of the brief which has been presented to him, since I am convinced he has read and reread it. This brief informed the minister that the increase was too high under the circumstances. Taxation experts have suggested that the minister might consider, with the officials of his Department, the steps to be taken in order to meet the objectives of the Post Office Department and satisfy, at the same time, the publishers. Those same publishers have met the minister as well as other ministers from Quebec and it seems that their meeting did not give the expected results.
And I think that the present government has not only the right but the obligation to receive and to study thoroughly the claims or briefs submitted last week by some organizations.
If the minister is able to stand up for his bill and all its financial implications, I ask him why he is reluctant to comply with the
Post Office Act
request of the opposition to refer the bill to a committee, which would give the opposition the opportunity to hear the evidence and to discuss with the people and the organizations involved. Indeed, the minister might even have the pleasant surprise, at the conclusion of such discussions in committee, to find that we can reach an agreement, which would perhaps help him to find a solution to his problem, while at the same time doing justice to the people who feel the rate increase proposed by the minister is inacceptable at the present time.
Mr. Speaker, the minister will understand that we cannot accept his bill as easily as a letter in the mail.
I now revert to the remark I made at the beginning. The minister knows very well, since he has been a member, and even a minister, in a provincial legislature, that when a bill is introduced in the house, proof ought to be given that such bill is a must, and the only way the minister can get his department out of a fix. It is not incumbent on us to show the minister that he is wrong, but upon the minister to demonstrate that the whole undertaking is reasonable and that the legislation he is trying to pass at present is the only one that can solve the problem.
And in this respect, the minister will agree with me that he could have explored many other avenues, instead of following blindly reports from officials telling him: Sir, you can make up the deficits of certain periods of the year only by increasing the rates, whatever the consequences might be from the social or financial standpoints. It is obvious that the officials are not close to the people and that they are unaware of their hardships. However, it is still the minister's responsibility to analyse the advice given to him by his officials so as to know, under these circumstances, whether the legislation is doing a service to the Canadian people.
The minister should at least consider the advisability of exempting religious publications and granting subsidies to certain associations such as the War Amputees of Canada. Today we received a brief from that ox-ganization to the effect that it will have to close its doors and stop publishing if the minister applies the legislation as he intends to do now, with the increases he wants parliament to accept. The War Amputees Association deserves all our sympathy. Here are people who have found themselves a job in spite of their war disabilities. Everyone knows what those people do to earn a living.


An hon. Member:: It is not a newspaper.


Martial Asselin: *-and who benefit from the rate of third class mail.
The minister's measure also affects Christmas stamps. I refer to the stamps of antituberculosis associations.
Mr. Speaker, I think we have proved quite clearly to the minister, during this debate, that it would be useless for us to read again the telegrams we have here. I am not here to take the defence-as the hon. member for Trois-Rivieres put it-of the weeklies and dailies. I am here, first of all, to represent the people who elected me. And I say that the people who elected me are saturated with the municipal, school, provincial, or federal taxes they have to pay, and I think the member for Trois-Rivieres will agree on that point.
We wondered a while ago where to find the money. There must be other ways to find some. The minister must have enough imagination; his officials must have a sufficient knowledge of the workings of his department to look thoroughly into the post office area in order to decide where to get the money while cutting down some services and nevertheless maintaining the quality of some services.
In his speech, the minister said he would close down the small post offices that do not show any profits.
If he thinks he is going to make millions by closing down small rural post offices which mean so much to the people, I am of the opinion that postal rates should not be used as a means to balance the Post Office Department budget. Had the minister only been consistent, had his officials only accepted to advise him so that he could have better enlightened the members, he would have told us: We explored every possibility, we created a commitee of experts-this he mentioned in his speech-and here is the report of that committee. Then, we could have seen that the

problems had been dealt with in depth. Then, the minister would not have had to improvise as he did today by introducing a bill to overtax the taxpayers.
[DOT] (4:50 p.m.)
In closing, I say this Mr. Speaker: the newspaper owners will not be the ones to suffer most from those measures. Once again, it will be the consumer, the taxpayer. I therefore ask the minister, and the government; to tell us when you will put an end to taxes, when our people can look to the future with a faint glimmer of hope. We shall know tonight, the present government will again crush the taxpayers with new taxes.
It was said last May that the country enjoyed an excellent financial position. And tonight, no measure will be proposed to balance next year's budget. I am convinced that we shall again end up with a deficit of about $500 million.
In spite of this, of course, the government, for several years, has been spending foolishly in every field. I would like to give an example to the member of Trois-Rivieres. If, instead of buying new uniforms for the members of the armed forces, that money had been assigned to the post office administration, we would probably not be facing a rate increase today.
How many other examples we could quote to show the careless spending of the government since 1963, whereas we, on this side of the house, have asked several times that they legislate according to a stricter order of priorities. In 1968, a responsible government should legislate on a priority basis.
Such are the reasons why, Mr. Speaker, we cannot approve the increase suggested by the Postmaster General. That is also why we urge the minister to be sensible, to accept the suggestion made by our party and to refer this bill to the committee, so that together we may give it thorough consideration and explore every possible avenue leading to some way of balancing the budget of the Postmaster General.


Joseph-Alfred Mongrain: Would the hon. member allow me a question?


Mr. Deputy Speaker:: Order, please. Will the hon. member for Charlevoix allow the hon. member for Trois-Rivieres a question?


Martial Asselin: Certainly, Mr. Speaker.


Joseph-Alfred Mongrain: Would the hon. member answer the following question?
October 22, 1968

Considering that he admitted there was a deficit of some $100 million-I heard indeed the hon. member say there was such a deficit-does the hon. member deem it fairer to have that deficit paid by all Canadian taxpayers rather than by newspaper owners, subscribers and buyers, and those who are using the postal services?


Martial Asselin: Mr. Speaker, the answer
would be very easy, I think, and a lot fairer, if the government reduced its expenditures and stopped thinking in a scatter-brained way as it has done since 1963, in short if it had planned its expenditures in order to get more properly balanced budgets in the departments.


Alfred Pullen Gleave: Mr. Speaker, I do not intend to take very much of the time of the house, but one thing that concerns me as much as anything else in this proposed legislation is the position of the weekly newspapers. Perhaps I should more closely define them as the weekly farm newspapers. There are two in particular which serve the farming population in western Canada, the Western Producer published in Saskatoon and the Free Press Weekly, I think it is called now, published in Winnipeg. From the information I have had it looks to me that the increased cost in each case is, to say the least, substantial. There is at present an amendment before the house to refer this bill to a standing committee, and the situation of the weekly newspapers and others such as the North Battleford News-Optimist is probably the best reason for doing so.
I do not propose to take the position that there should be no increase in postal rates on these particular publications. As someone else has said this afternoon, I do not suppose that as an individual member I have that much knowledge of the situation. When one reads in an article in the Globe and Mail of October 11, quoting Richard S. Malone, publisher of the Free Press Weekly, it is alleged to be Canada's only remaining weekly although I do not think that is so-as saying that that paper will be faced with additional costs of about $400,000 a year, one gets some understanding of the problem. According to the news story, Mr. Malone said that if the increase goes into effect it will represent an increase of 230 per cent in postal rates for the weekly, which has a circulation of 600,000. The Free Press Weekly, of course, has recently
Post Office Act
absorbed the 400,000 circulation Family Herald. The article goes on to say:
"The projected postal Increases will have the most serious impact on weekly publications and farm papers," he added. "When the Family Herald folded recently, largely because of rising costs, it was paying $100,000 a year in postal charges."
My information is that the Western Producer reports about the same rate of increase. The Family Herald has, of course, recently folded and it was, I suppose, one of the oldest farm weeklies in Canada. There may be older ones in the province of Quebec or in the maritimes. The information I have been given by people who publish these weeklies is largely substantiated by the article in the Globe and Mail. Anyone who farms in western Canada knows that the Western Producer, the other major western farm weekly, has been operating at a substantial deficit year after year. I have talked to some of the people responsible and they tell me that it is very unlikely they could increase their advertising rates. The Western Producer depends mostly on national advertising for what one might call its large page advertising. It also has, of course, a great deal of classified advertising.
What concerns me is whether newspapers of this type are going to be able to absorb this increase or are they going to have to cease publication. I don't know. I suppose no one will know for sure until these publishers are presented with the bill and decide either to pay it or just quit. I would think there will certainly be some soul searching by the people responsible for paying the deficit incurred by the Western Producer. These papers serve a purpose which will not be served if they are not there. They carry farm news which otherwise would not be carried.
In the last issue of the Western Producer, for example, we have the news that farm scientists are to visit Japan. There is a story on the shortage of experts in the poor nations. This, one could say, is practically standard news. But there is also a report in this newspaper that Alberta is phasing out its sire purchase policy. This is the type of report you would not find in the large daily newspapers or over radio or television. In addition, there is an article advising farmers to check their bins regularly when they are harvesting out of condition grain. Obviously such a report emanates from a university or a department of agriculture.
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October 22, 1968
[DOT] (5:00 p.m.)
Then we are advised, Mr. Speaker, that there is a course in artificial insemination, say, at the University of Saskatchewan. In another story we are informed about the condition of fall pastures and how they can be improved; such a release probably comes from the experimental station of the Department of Agriculture. Then there is another story about pastures and how cattlemen can build an economic operation by better development of pastures. This is the sort of information carried in these farm weeklies and the Department of Agriculture in Ottawa spends a fair amount of money sending releases to the publications that carry them. They also spend a fair amount of money sending smaller releases to individual farmers.
If this type of publication is going to be discontinued, then how and by what method will this information be disseminated? I think that is a fair question to put to the Postmaster General. I also think it is fair to ask him whether or not he feels that this particular type of publication should continue under the new situation, or whether he knows that it will. After all, these publications do fulfil a vital function.
Let me make myself clear, Mr. Speaker. I hold no brief on behalf of these publications. Quite often I do not agree with their editorial policies. But I do say that they perform one particular function in the communications system on the farming scene. This is particularly the case in the farming area from western Ontario-in fact, the Free Press Weekly, I suppose, is distributed farther east than that-through the prairies clear to the Peace river and into the interior valleys of British Columbia. As I say, these papers perform a communications function that is as essential as the function performed by the C.B.C.
I think that this situation should be carefully examined. What strikes me about it from getting information from publications in my area is that the increases affect different publications in different ways. Local newspapers such as the local weeklies face some increased charges but they are not too serious. However, there is a more marked difference in the case of papers like the Union Farmer, house organs published by farm unions and that type of organization. The increases will also affect papers like the North Battleford News-Optimist and similar papers in British Columbia and Manitoba.
[Mr. Gleave.l
I should like to know what will be the effect of this legislation upon major farm newspapers such as the Free Press Weekly and the Western Producer. If these papers can afford to pay the increase, fine and dandy. But if they cannot or will not and this means that we will lose this particular method of communication, then we should consider what is going to replace them. For example, the Western Producer provides what it calls an open forum which for years has been a vehicle for the exchange of views between its readers throughout its circulation area. It provides an open forum of debate, a place where people can say what they think about the issues of the day and where other people can write in and express differing views. This is what I am concerned about, Mr. Speaker, and if the Postmaster General has an answer I would be happy to hear it.


Eric William Kierans: Does the hon. member want it now?


Alfred Pullen Gleave: At the minister's convenience.


Eric William Kierans: I would be happy to answer now, Mr. Speaker.


Mr. Monteifh:: But not close the debate.


Eric William Kierans: Mr. Speaker-[DOT]


Mr. Deputy Speaker:: Order, please. There is no fear of closing the debate. The minister is speaking to the amendment.


Eric William Kierans: Mr. Speaker, I thought we were speaking to the debate itself, the subject matter before the house. The hon. member wishes to have some details in connection with the Free Press-, we can close the debate later.


Jay Waldo Monteith: Mr. Speaker, I rise on a point of order. I want it clearly understood that if the minister answers the question at this time he is not closing the debate.


Mr. Deputy Speaker:: I thought I made that clear. The minister is speaking to the amendment, or to the debate arising out of the amendment, and is not closing the debate.


Eric William Kierans: Mr. Speaker, is there any reason why the debate should not be closed?


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, it gives me great pleasure to speak in this house to defend the interests of my
October 22, 1968

constituents and of all Canadians, and to discuss Bill No. C-116 now before us, amending the Post Office Act.
Mr. Speaker, first, I wish to remind members of the most important role played by journalists and newspapers in the Canadian society. The written press is the most important information medium in our great country at the present time. It truly reflects the opinion of the Canadian people. This information medium is the only one that can reach many Canadians, because many regions in our vast country are still hardly reached by radio or television. The written press is the only way to an all-round education for Canadians, since it conveys ideas and data of a political, financial, local, national, and international nature.


Mr. Mather:: Mr. Speaker, could I rise to make a personal point? The interpretation system does not seem to be working and I am wondering whether the interpreters know this. I am sorry to interrupt the hon. member.


Mr. Deputy Speaker:: Would the hon. member like to continue and we will try to have the interpretation system adjusted.


Léonel Beaudoin: Mr. Speaker, I feel that an honest newspaperman is an unmatched educator, since he can and truly has the means to convey ideas and information to the public at large. The current of ideas is within his reach and he can strongly influence its orientation. However, he must perforce be honest and he has a right to his information medium, namely the newspapers.
[DOT] (5:10 p.m.)
Mr. Speaker, I think that if we recognize that newspapers are a means of informing and educating the people, we must also, consequently, protect them. I do not say we should protect the newspapers themselves, but the subscribers, so that they may get these newspapers at a reasonable price.
I have already said that newspapers are a means of educating people. They allow our young people to discover the problems which exist in the world today. From the age of six or seven on, Canadian children are reading newspapers. They are first interested in pictures, then in cartoons, and finally in local news and so on. Without newspapers, our children will develop late and will not become as attentive to the many aspects of our modern world.
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The discovery of printing, as you must know, Mr. Speaker, caused a deep social upheaval. It has served to circulate ideas and has promoted education considerably especially in remote areas. It would be a heavy loss and a regression if all newspapers were to disappear, and it would be heavy going to look after the intellectual needs of our Canadian people, especially of those who live far from the great urban centres.
For all the reasons I have just given, Mr. Speaker, I think we, as legislators, cannot take the risk, to see all our newspapers disappear more or less rapidly, by imposing prohibitive and exorbitant postal rates.
I do understand that the hon. Postmaster General (Mr. Kierans) wants his department to be solvent and I think this is the mark of a good administrator. However, Mr. Speaker, it is not enough to be a good administrator, it is also necessary to have a sense of balance and to think of the welfare of those who are under one's jurisdiction, in the present case, the Canadians and more particularly, the publishers.
The primary purpose of the Post Office Department is to serve the Canadian people and I think the minister is losing sight of this important goal. In fact, if this legislation is accepted by this house in its present form, the Post Office will become a luxury instead of a service for the people. I think therefore that every member will readily understand that we will forget about the Post Office deficit on the one and only condition that it should provide an acceptable service to the Canadian people, because that is the primary purpose of the Post Office and let us not forget it.
Mr. Speaker, who could name one agency in the field of public education able to do its own financing or even to break even?
I maintain that the rates proposed by the Post Office Department are prohibitive and it won't take me long to prove it. I would like to refer as an example to the newspaper, VUnion des Cantons de I'Est which at present pays $12.98 as shipping expenses for 865 pounds of mail. As a result of an increase of 3i cents per pound proposed under the new legislation, the same shipment will cost $48.29. Is that normal, Mr. Speaker?
In the case of newspapers freely distributed, I would like to refer to the Courrier Sud which for an average copy of 32 pages is now paying about $280 for 800 copies. Under the proposed raise of 7 cents per copy, in the same conditions, the cost will be $560.

October 22, 1968
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Mr. Speaker the shipping costs will double, which is simply unacceptable, considering that already with the present rates, most dailies and weeklies can hardly manage. This legislation means the death in a more or less distant future of all papers distributed free of charge.
Those newspapers will have to resort to advertisement or to have advertising pages that will also be business pages, as they have to have some kind of financing. This will lead to an increase in the cost of living.
I should like to mention a few weekly newspapers that will be affected by this measure: the Sorel La Voie metropolitaine and he Courrier Riviera, the Granby La nouvelle Revue, the Asbestos Le Citoyen, the Shawini-gan Echo du St-Maurice, the Baie Comeau Le Nordic, the Famham L'Avenir, the Grand-Mere Le Courrier de Laviolette, the La Tuque L'Echo de La Tuque, the Mont-Joli Mont-Joli Nouvelles, the Rimouski Le Rimouskois, the Lotbiniere county La Voix de Lotbiniere, the Victoriaville La Voix des Bois Francs, the Shawinigan La Voix de Shawini-gan, the Nicolet Courrier Sud, the Abitibi L'Echo Abitibien, the Rouyn La Frontiere, the Sherbrooke Le Journal de Sherbrooke.
There is still a huge number of newspapers across Canada I did not mention, Mr. Speaker. Those newspapers will have to bow out and disappear because the Postmaster General decided his department would not have a deficit. In my opinion, this is unacceptable and I think that we should remedy this situation or consider it further.
The Canadian weeklies are prepared to accept a certain increase in their postal rates but certainly not an increase which would double or triple the price at one go. I say, Mr. Speaker, that it is quite unacceptable.
Bill No. C-116 now under consideration provides for an increase of 20 per cent in the postal rate of letters and first class mail. It is a pill which can be swallowed and even digested over a long period, but in the case of weeklies which are delivered free, the increase in the charges would amount to 333 per cent. Is this sensible?
The areas mostly affected are the rural areas which, are reached as we know by weeklies only. Often we hear complaints about the lack of information in some rural areas of Canada. Do you think, Mr. Speaker, that this legislation will improve the situation?

Do we have the right to deprive a great part of our population of information? Will this lack of information make for a people aware of its responsibilities, aware of all the problems which require a solution? Who will inform those people on current problems, who will describe to them truthfully the political and economical situation of our country? Some may be led to believe that they will only have to listen to the radio. Yes, of course, they should listen to the radio, but to hear only one side of a question, is that true democracy?
Today, state-owned television is in direct competition with other information media; that state-owned corporation enjoys tremendous advantages. Its deficits are made up out of the government's budget but, Mr. Speaker, I am asking you, what is the government doing for Canadian weeklies?
Mr. Speaker, to conclude, I want to stress the fact that Bill No. C-116 as proposed by the Postmaster General will inevitably bring about the disappearance of many weeklies and other newspapers which, as I said earlier, are absolutely necessary to keep fully informed Canadians who should not be forced to hear only one side of current events.
The soul and education of the Canadian people should not be distorted by a bill designed to balance a budget.
Mr. Speaker, I urge the government to reconsider its decision and refer Bill No. C-116 to a standing committee.


Walter C. Carter: Mr. Speaker, I rise to support the amendment moved by my colleague the hon. member for Hillsborough (Mr. Macquarrie), the purport of which is that the proposed legislation now before this house be referred to a committee of the house for further consideration.
While the Postmaster General (Mr. Kierans) is to be admired for his efforts to save money and streamline our postal operations it seems to me, sir, that slashing an essential public service is a muddleheaded way of doing things. Though I am extremely pleased the Postmaster General has bowed to the pressures exerted by hon. members on this side of the house and others to abandon his plan to discontinue Saturday deliveries in rural areas, I am unable to support the legislation now before the house.
October 22, 1968

I have received telegrams from several newspapers in my riding. Among them is a telegram from the St. John's Evening Telegram, the largest newspaper in Newfoundland, and a telegram from the Corner Brook Western Star. Each of these papers draws attention to the seriousness of the legislation as it affects them as well as to the fact that it will cost in excess of $30,000 a year in additional mailing and operational charges. It is reasonable to assume that the additional cost to the newspaper publishers will be passed on to the advertisers and subscribers. The net result will be that the extra charge will end up in the lap of the consumer. God knows, the average wage earner in Canada, particularly in the Atlantic provinces and in my own province of Newfoundland, has pretty well reached the breaking point and I cannot in all conscience subscribe to any legislation which would further aggravate his already critical situation.
[DOT] (5:20 p.m.)
In my view the increased rates proposed by the Postmaster General are a cowardly way of increasing taxation. As I have already stated, many of the people in my province are in desperate straits. We already face the highest cost of living in Canada. We already have the highest unemployment rate in Canada. What is even worse, we have the lowest income per capita in Canada. As a Newfoundlander and as a Canadian, how can I in all fairness subscribe to legislation which would have the effect of worsening this critical situation?
In part of my riding, as well as in a great many other areas in Newfoundland, it is impossible to receive television broadcasts. The only contact people have with the outside world is through the newspapers. Their only way of learning what is going on in Ottawa, in Biafra, in Washington or in Viet Nam is, by and large, through the newspapers.
I am charging the government here and now with discrimination in bringing in this legislation. The people who rely on newspapers for their information live for the most part in rural areas and must depend on the mails for delivery. City dwellers are able to go to the corner store, pay their money and pick up the papers they want. But the people in my riding who live in Placentia or Come-By-Chance or Trepassey-I could name hundreds of places-have to rely on the mails for newspaper deliveries. Consequently they are being discriminated against.
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I feel that to shut off a valued service of information to a substantial body of people can only be a disservice to democracy. The present low rates charged for the handling of newspapers are based on the desirability of maintaining an informed electorate, as is, I suppose, the annual subsidy to the C.B.C.-I believe the amount is $140 million-which is by and large a medium of entertainment.
While this problem may not seriously affect the city areas it is a matter of vital concern to thousands of isolated Canadians who, if this legislation is passed, will no longer be able to afford to keep abreast of the times. I suggest that such a policy scarcely becomes a government which has paid a lot of lip service recently to a Canada which does not suffer disparities in services and opportunity.
While I am on this subject let me say I was alarmed to learn the other day that a large number of members of the hon. gentleman's own caucus were not informed of the proposal by the Postmaster General to increase these rates. This is an ironic commentary on the kind of democracy about which the Prime Minister (Mr. Trudeau) spoke so often during the recent election campaign. I contend that this latest piece of muddleheaded legislation is a further mockery of the Prime Minister's just society and his promise to put an end to regional disparities.
While I am on the subject of regional disparity, may I say I am finding it extremely difficult to contain myself while I wait with bated breath to see what the government has in mind to help less fortunate provinces such as mine.


An hon. Member:: Don't hold your breath too long.


Walter C. Carter: I am not holding my breath now. I don't think I should because I don't know what will happen.
Up to now this government has done nothing to end regional disparity. Indeed, it has taken measures which widen the gap still further between the have and the have-not provinces. Let me give an example. I feel the house is becoming sick and tired of hearing about the salt rebate and fish generally, but hon. members had better get used to it because they are going to hear me talk a great deal about fish in the next few months. Fish should never leave a bad taste in the mouth. So I shall refer to the salt rebate again and draw attention to it as another indication of the Prime Minister's just society and his desire to end regional disparity. I

October 22, 1968
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notice that the Minister of Defence Production (Mr. Jamieson) is laughing. I hope he is listening to what I am saying because it is very important. Right in the middle of the fishing season this great government which is dedicated to the concept of an end to regional disparity eliminated a program with a dire effect on the people of the Atlantic provinces.
Another action on the part of the government which is making a mockery of the Prime Minister's promise of a just society and an end to regional disparity is the discontinuation of the winter works program. Having served as deputy mayor of the city I now represent in this house, I know for a fact that despite what hon. gentlemen opposite say the discontinuance of this program will have a serious effect on the people of St. John's as, indeed, it will have on people in other areas. There will be Newfoundlanders on relief this winter. Newfoundlanders will have to go begging for relief. They will have to draw unemployment insurance. They will have to humble themselves to get handouts to keep body and soul together as a result of the termination of these two programs which the Prime Minister and his government, the champions of the just society, the champions of an end to regional disparity, have discontinued. Because of this, Newfoundlanders will be hungry, except for government relief and handouts given by other agencies. This is sad.
[DOT] (5:30 p.m.)
This legislation is further proof of the government's complete disregard for the conditions that exist in the have-not provinces, especially the province of Newfoundland which I have the honour to represent. If the past two or three months are any indication of the government's desire and plan to end regional disparity I say it is not inconceivable that within a certain period separatism will not be confined to the province of Quebec. It is about time that some special consideration and equal rights were given to the have-not provinces. Especially, sir, do I plead for consideration, for equal status and equal rights for the province of Newfoundland.
I should like to bring the Postmaster General up to date on certain conditions with regard to postal services that exist in my riding. In the heart of the city of St. John's we still have post offices that have not been improved to any great extent since confederation. One of the largest post offices in that city is operating out of a temporary war building that is in no way adequate for the purpose. The main post office in St. John's

West is housed in a building that should have been condemned decades ago. I challenge the Postmaster General to come with me some time to St. John's and take a look at some of the postal facilities there. Let him look at the post office in St. John's West and then let him tell me that the service which is been given in that post office, because of its inadequate facilities, justifies an increase in postal rates.
In closing, Mr. Speaker, I wish to stress the point I have already made, that the new postal rates will have a serious effect on the people of my province, on the people of the other have-not provinces and, I suppose, on all Canadians. I cannot help but think that the Postmaster General has acted with excessive haste in this matter, and I believe that the difficulties of the post office, which undoubtedly require attention, were aggravated by this summer's settlement with the postal workers.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I believe it is my duty as the representative of Moose Jaw constituency to speak out on the amendment now before the house. I support in its entirety the amendment moved by the hon. member for Hillsborough (Mr. Macquarrie) and seconded by the hon. member for Winnipeg North Centre (Mr. Knowles). I believe it is most important that this bill be referred to a standing committee for thorough consideration by hon. members.
I realize that the President of the Privy Council (Mr. Macdonald) has an obligation with respect to piloting bills through the house, but today I was very much surprised to hear him use blackmail as an attempt to have this post office bill passed in order that we might proceed with the agricultural legislation that has been before the house. I believe it was never the intention of parliament to use this system of manipulating procedures in the house in order to get a bill through that is as completely unacceptable to the Canadian people as is this one.
A news item in the Regina Leader-Post of last Friday reported the Minister of Agriculture (Mr. Olson) as suggesting that the opposition is delaying help to the farmers. Now we have the President of the Privy Council suggesting to us that if we pass this bill in a hurry we will be able to return to the cash advance legislation which will assist farmers. This makes me wonder where we are going in our present-day democratic society. I am sure all hon. members are anxious to get the
October 22, 1968

post office bill out of the way, but in a satisfactory manner, and then get on with the agricultural bills which I submit should not have been delayed. I am sure there are segments of our society just as concerned about this bill as those of us from western Canada are concerned about the agricultural bills, and we would be remiss in our duty if we did not give this bill thorough consideration by referring it to a standing committee.
Speaking on the resolution stage of this bill, as recorded at page 928 of Hansard for October 8, the Postmaster General referred to a situation that I believe is completely correct. He suggested that Canada has one of the finest postal services in the world and added:
Nothing in my brief experience as Postmaster General would lead me to any different opinion-
I can concur with that 100 per cent, Mr. Speaker, and I believe every member of this house would concur if they could be certain that it would continue to be the finest postal system in the world.
The Postmaster General went on to pay tribute to the 48,000 men and women who operate the system and said their efforts are worthy of the thanks of every Canadian. I concur with that too. These 48,000 people have provided a service to this country second to none in the world. But if we allow this bill to be passed in its present form the service which the Canadian people have enjoyed as a way of life may deteriorate, and postal employees will no longer take pride in working for the postal division of the federal government.
Farther on in his speech the minister said:
It is evident, therefore, that action must be taken to restore a reasonable cost-revenue relationship, and to provide the funds necessary to ensure that our traditional standard of service will be maintained.
We all appreciate the fact that in this modern day there must be streamlining, but that streamlining should not lead to deterioration of service. Hon. members on the government side must accept full responsibility if they allow this bill to pass without agreeing to refer it to a standing committee where it can be intelligently examined as to its merits.
Our postal service has been good but recently it has deteriorated somewhat. I refer specifically to the sorting of mail as we knew it in the past. A news item in a recent issue of the Moose Jaw Times-Herald was headed, "Railway Arrival Of Mail Being Discontinued." Mail used to be sorted in Moose Jaw and distributed from that main centre. Now it
Post Office Act
is being sent to a city 44 miles to the east and being distributed from there. I am sure hon. members realize that to amalgamate and consolidate all these services in a central location is not good so far as distribution is concerned. There is complete congestion at Regina, and if this is an attempt by the Postmaster General to establish a better system of distribution and sorting I must tell him I think it will be a complete failure.
We all know that there is much congestion at airports. Air travel sometimes takes much longer than train travel, especially with respect to the movement of products from one point to another. It is fine and dandy to say that we can get mail into the air and move it from coast to coast. I agree that to move mail by air from country to country is a logical method of transporting it but I do not agree that mail should be transported solely by air from coast to coast. I have often wondered whether the railways themselves wished to get out of their mail handling contracts or whether the government deliberately put them out of that business by taking those contracts away from them. I hope the Postmaster General will clarify this point when he replies.
[DOT] (5:40 p.m.)
I know that on days when the weather conditions are poor out west or any other place the movement of mail by air cannot compete with the movement of mail by rail as I have known it in the past. Once winter conditions arrive, distribution of mail by trucks in the western provinces-and I am sure this applies throughout the whole of Canada-slows down or the mail does not go through. We know that when the mail was handled by rail this was not the situation; the mail always went through. We also know of a situation last week in which it took five days for first class mail to travel from Moose Jaw to Ottawa. I should like the Postmaster General to ascertain whether he can speed up the delivery of first class mail because in the last few years, in my opinion, it has been slow compared with the days of the old stage coaches. I do not believe our method of transportation has improved very much in the last few years in particular.
I do know that in a statement the hon. member for Burnaby-Seymour (Mr. Perrault), that self-appointed leader of a block of members to the right, has made quite an issue of the so-called free enterprise system. The hon. member suggested it is time to put postal operations in Canada on a sound,

October 22, 1968
Post Office Act
efficient and businesslike basis. I suggest to the hon. member for Burnaby-Seymour that if we were to follow the lead he suggests we would not cut services. I do not think there is any private, businesslike operation in this country today that would deliberately cut services to the people it is serving and expect to stay in business. I submit that if the Postmaster General would really take this into consideration he would realize that it is not businesslike to cut services.
Another point brought up by the hon. member for Burnaby-Seymour appears at page 956 of Hansard. The hon. member suggested there were certain inefficiencies in the postal service but that the Glassco royal commission was highly complimentary of the Canadian postal services. Naturally the commission would be complimentary because the service was and could still be a good service if the bill before us is not accepted. The hon. member for Burnaby-Seymour said:
But I am sure I speak for the majority in this house when I say that the minister is to be commended for acting decisively to make one of the world's greatest postal systems even more efficient.
Well, Mr. Speaker, there is a similar situation in the province of Saskatchewan to which I might refer. At one time the province of Saskatchewan had the best mental health plan in North America; it was considered to be one of the best in the world. People came from all over the world to see this program in operation in Saskatchewan. I suggest that with the advent of a new government in that province this program deteriorated to the extent that a commission is required in order to find out what has happened. I suggest once again that this is exactly what will happen in respect of our postal service unless the Postmaster General takes a close look at the situation and at least delays the passage of this bill until it has been examined in its entirety by a committee. We know that if this is not done it will be necessary to set up a royal commission in order to find out what has happened in respect of our postal system. Today we still have an opportunity to do something about it. I suggest that the logical way to handle this situation is to refer this whole matter to a committee.
I realize there are many things one could say about the merits of this bill. Naturally there are some things in the bill with which we do not disagree. Yet it has been suggested that there is to be a deterioration of the service in order to benefit the people of Canada as a whole. I am sure members of this house

do not want to see a service of which we have been proud deteriorate to the extent it is likely to if this legislation is passed in its present form. We know that only before a parliamentary committee can we have a full debate on this bill Bind an intelligent consideration of it.
I should like to refer briefly to some of the direct implications which I consider are contained in the bill which is before us at this time. We know there are many labour and other periodicals and publications which are caught in the cross-fire when the big advertisers and promoters who have been subsidized by the taxpayers too long are being clipped. I do not suggest there is no need for some review but I do suggest that whenever there is a cure it generally is the public who pay the shot. I am referring to trade union and medical publications, for instance, many of which carry no advertising. Church publications and many other publications mentioned by hon. members receive no revenue through advertising.
It is my belief that such publications should be given a postal rate different from that which applies to publications that derive considerable revenue from the advertising contained in them. There should be some allowance or consideration given to any publication which provides a direct service to the people but derives no return from advertising. I am sure no one would disagree that a direct service to the public is the utmost we expect to have in an educated democratic society. It has been pointed out very well by many other speakers that in order to have a democratic society there must be people who participate. One who plans to participate must have the knowledge and material before he can participate in a particular area.
I agree that some of these matters could be left in the hands of the Postmaster General as in the past in respect of certain mail. However, I am sure that the bill before us is too rigid. There should be some leniency in respect of granting concessions to certain publications. In some respects there may not be too much wrong with the bill, although there are certain points with which I do not agree. I feel sure there must be relief from some of the statutory provisions contained in the bill. I believe this is something even hon. members opposite would give consideration to,
I know suggestions have been made that if this bill is allowed to pass in its present form it will mean an increase of 500 per cent-
October 22, 1968


Mr. Speaker:: Order, please. I am sure the hon. member for Moose Jaw wishes to adjourn the debate. It is moved by the hon. member for Moose Jaw, seconded by the hon. member for Yorkton-Melville, that the debate be now adjourned. Is it the pleasure of the house that the debate be now adjourned?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, because of the fact that we are having royal assent and then proceeding with other business of eight o'clock, I believe there is a general	dispensation-disposition-in	the
house not to proceed with private members' hour this evening. If Your Honour finds there is general agreement, perhaps this could be done on the understanding that all motions would preserve their place on the order paper and also that this hour would be saved for the house as a further private members' hour.


Stanley Howard Knowles: Mr. Speaker, I am sure I would rather agree to a general disposition than to a general dispensation.


Mr. Speaker:: Is this the desire of the house?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Order, please. It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be discussed at the time of adjournment this evening are as follows: The hon. member for Lotbiniere (Mr. Fortin)-National Health and Welfare-inquiry as to possible participation of federal government in a campaign against alcoholism; the hon. member for St. John's West (Mr. Carter)-Fisheries-inquiry as to deficiency payments; the hon. member for Gander-Twillingate (Mr. Lundrigan)-Management of Canada's Fishing Resources-continental shelf.


[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Right Honourable the Deputy-Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
The Budget-Mr. Benson
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
[DOT] (5:50 p.m.)
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bill:
An act respecting the construction of a line of railway in the province of Alberta by Canadian National Railway Company from the vicinity of Windfall on the Windfall extension to the Sangudo subdivision of the Canadian National Railway in a westerly direction for a distance of approximately 51 miles to the Bigstone property of Pan American Petroleum Corporation and of a connecting spur extending in a northerly direction for a distance of approximately 9 miles to the South Kaybob property of Hudson's Bay Oil & Gas Company Limited and its associates.
At six o'clock the house took recess.

AFTER RECESS

The house resumed at 8 p.m.


Hon. E. J. Benson (Minister of Finance) moved:: That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said: Mr. Speaker, it is a great honour and a serious responsibility to present the first budget to this new twenty-eighth parliament of Canada. The government and its strong parliamentary majority have come into office with many new ideas and a desire to look at our problems with a fresh perspective. We have, however, many major commitments. These restrict our freedom of innovation and make it necessary for us to work out our new ideas over time.
I have much to report and to propose in this budget and therefore will not attempt a comprehensive review of our financial affairs and policies tonight. The budget white paper, tabled last Wednesday, provides material on our public accounts for 1967-68, and on the economic and financial conditions prevailing in Canada and elsewhere as of the time when it was prepared. I shall refer occasionally to this paper but I shall try not to weary the house with repetition of detail. In particular I do not propose to comment upon the accounts for 1967-68.
October 22, 1968

The Budget-Mr. Benson Current Economic Setting
The current economic setting for this budget has been set forth in part I of the White Paper. The Canadian economy continues the expansion that began in 1961, that ran to excess in 1965 and 1966, that slowed down in adjusting for these excesses in 1967, and that has accelerated moderately again this year. We are in a period of widespread prosperity, but it is prosperity with problems. The increase this year in production, in national income, in exports, in housing investment, and in industrial productivity has been encouraging. On the other hand, we are troubled both by the extent of unemployment and by the rate at which prices are increasing. Our balance of trade has been better than expected, but our capital markets continue to be subject to serious strains. These are reflected not only in high interest rates but in problems for many borrowers and for those who sell securities.
In the international economic field, we have in recent years made great advances in freeing trade. We are still engaged in implementing agreements by legislative action. Tonight I shall lay before you some 200 pages of tariff items which implement our part of these international arrangements, together with a resolution asking approval for a new bill on anti-dumping duty which will follow consideration of our white paper on this subject by a committee of this house. These are important and constructive measures. Together with related action by others, they should widen the markets and improve the productivity of Canadian industry. They should also provide to Canadian consumers the benefits of increased competition in domestic markets.
In monetary matters, the period under review has been one of many difficulties but has ended upon a most constructive note. For years the Canadian government, with other western governments, has been working out a plan to supplement gold and foreign exchange balances with new forms of international liquid reserves that could be expanded in accord with the needs of world trade and other transactions. After considerable debate this has now been achieved. Parliament will be asked to approve amendments to the Bretton Woods Agreements Act to carry out our part in these new and encouraging arrangements.
[DOT] (8:10 p.m.)
Before these new arrangements could be completed several major crises occurred during the past year in the international financial

markets. Sterling was devalued. There was a prolonged crisis in gold markets which was only resolved by the working out of a new two price system for gold as well as by more stringent measures by the U.S. to safeguard and improve its balance of payments position.
During this period of stress in the international financial markets last winter there was a short but very sharp run on the Canadian dollar, despite an unusually strong position in Canada's current account balance of payments at that time. We were in danger of being forced into an inappropriate devaluation of our currency, which would have brought higher prices and costs to the Canadian economy and the Canadian consumer. Our position was strengthened by monetary and fiscal measures taken at that time. We were fortunate in being able to get from international institutions and from friendly monetary authorities and governments the temporary assistance that we needed to sustain us during this crisis. We also were able to work out with the United States Treasury arrangements which enabled us to safeguard our vital unrestricted access to the U.S. capital market while not endangering or worsening the U.S. balance of payments position. Subsequently we have been able to borrow substantial sums in Italy, in Germany, and in the United States to assist us in restoring our exchange reserves.
Medium Term Outlook
In looking ahead through the prospective life of this Parliament, we can be optimistic regarding both the resources that will be available to sustain vigorous growth in the Canadian economy and the markets that will be available for what we produce. We have a labour force that is growing more rapidly than that of any other industrial country. It is also increasingly well educated and trained for work in modern jobs. Our natural resources are the envy of others and the basis of much of our industry and wealth. We have a large industrial capacity, much of it now relatively modern and little of it in serious excess. We have access to a large supply of savings within Canada, since we save a high proportion of our income by comparison with others. Fortunately we also enjoy a preferred position in securing international capital, both direct investment associated with modern management, and loan capital in large amounts. At the same time we can look
October 22, 1968

The Budget-Mr. Benson into account as best we can the supplementary estimates we must still place before Parliament, I estimate our total expenditures this year will be $10,780 million, about 4i per cent higher than our original intention. I now estimate our revenue this year-before taking in the tax changes I am proposing-will turn out to be approximately $10,050 million. This would leave a substantial deficit of $730 million. These figures do not include any writeoff of our share of the Expo deficit, which involves no cash expenditure and which will be the subject of legislation later in this session. This deficit of Expo has been financed in earlier years and we are now recovering a part of the cost from Quebec.
Our extra-budgetary accounts this fiscal year have been complicated by the rundown in our exchange reserves late in the last fiscal year and their restoration in recent months. Early in 1968 the rundown of our exchange reserves produced a temporary swelling of our cash balances-a situation which made it possible and desirable to postpone borrowing during the latter part of last fiscal year. Apart from foreign exchange operations, our loans and investments this year have been a bit less than expected, though in the housing field the slower than expected demand by provincial and local authorities for loans for public and other institutional housing has made it possible to provide a winter program of direct loans for owner-occupied housing. This program will not only help to meet a real need but will also provide a direct stimulus to employment.
Apart from the financing of exchange, our net extra-budgetary requirements for cash during this fiscal year I now forecast at $600 million. This must be added to the budgetary deficit in assessing our total cash requirements, including those being met by reducing our cash balances.
In regard to exchange we have had to utilize $490 million Canadian since April 1st up to the end of last month in order to finance our net purchases of foreign exchange in the market which is evidence of the recovery in strength of the Canadian dollar. This has been added to our reserves. The government has also borrowed the equivalent of $US 234 million outside Canada to be added to our reserves during this period. Part of these new foreign exchange resources has of course been used to pay off in full the short-term international obligations incurred during the exchange crisis.


To meet the large Canadian cash requirements this year we have been able to draw down the abnormally large balances we had at April 1st-$997 million-mainly arising from the sale of U.S. dollars during the exchange crisis. In addition we have had to borrow very substantial sums, by issues of marketable bonds at June 15th, August 1st and October 1st, by the sale of the special replacement issue of Canada Savings Bonds in May, mainly to refund in advance the large issue maturing this year but also in part providing cash, and by increasing the volume of sales of Treasury Bills. The proceeds of these issues, together with our cash balances, have been used: first, to refund maturing issues; secondly, to meet the very large net redemptions of Canada Savings Bonds (amounting to $556 million up to October 16 this fiscal year); thirdly, to purchase exchange in the market; and, finally, to meet our current budgetary and extra-budgetary requirements. To October 16 this fiscal year we have borrowed $428 million on balance in the Canadian market after taking into account refundings and redemptions both of marketable obligations and of Canada Savings Bonds.
Our objective in the current Canada Savings Bond campaign is a record sale which will raise a large amount of cash during November. The terms are very attractive in comparison with earlier Series and with other investment possibilities. This savings bond is an excellent investment through which Canadians in all walks of life can conveniently and profitably put their money to work in furthering their own interests and the national interest through the financing of important constructive programs such as housing; nuclear power is another example, and of course farm credit. To achieve a broad placement of the new Series of Canada Savings Bonds, a vigorous effort is underway from coast to coast by a large and experienced payroll savings organization, by the banks and other financial institutions and by investment dealers and stockbrokers. This effort is backed by a first class advertising campaign using all major media. The attractive terms will prompt many holders to convert earlier Series into the new Series. To cover these rollovers and to produce a large amount of cash will require a gross sale during the campaign period in excess of the previous record established in 1966. I believe our savings bond organization is mounting the best
October 22, 1968

operation of its kind in the western world and I look forward to its success as a major element in our financing program this year.


Mr. Harkness:: What is your estimate of the amount of money involved?


Edgar John Benson: We will need to borrow in the market again before this fiscal year is over in order to refund maturing debt and possibly to raise some additional cash as well but the total of such marketable financing will depend importantly on the outcome of the Savings Bond campaign.
1969-70 Fiscal Outlook
It is difficult to forecast our position in the next fiscal year at such an early date as this, yet I feel I must make some effort to do so in order to develop the tax proposals that I think it is necessary to place before you tonight.
We intend to continue severe restraint upon those direct expenditure programs under the government's control, eliminating what is obsolete and permitting only the degree of growth that is essential. We shall have to resist requests by members on both sides of the house, and from groups and individuals outside, to spend money for worthy purposes which we cannot afford to do along with the other things we are doing. It will also be necessary to maintain a virtual freeze on the size of the public service of Canada. We shall also seek the vigorous cooperation of the provincial governments in the same kind of restraint upon the growth of the jointly financed expenditure programs under their control. Even those programs which we and they agree deserve priority must be carried out with maximum economy, and with a keen eye to what is really essential.
On this basis I am now forecasting budgetary expenditures in the next fiscal year at approximately $11,670 million, including medicare expenditures on the assumption that all provinces will take advantage of the Medical Care Act. This would be an increase of $890 million, of which about $335 million would be for medicare-leaving an increase of less than 5 \ percent for all other expenditures. Revenues for next year-before the tax changes I am now proposing or those that may arise from our tax reform program next year-can be estimated at about $10,830 million, a growth of approximately 7| percent over the current year. This takes into account a variety of special factors as well as general economic growth.
The Budget-Mr. Benson [DOT] (8:30 p.m.)
We must of course keep in mind the loans and investments to be made next year, as well as our expenditures, in assessing the nature and scale of our fiscal problems. Our detailed budgets in this field are not yet decided. By far the largest element in this total is housing. The capital budget for the Central Mortgage and Housing Corporation next year should reflect the conclusions of the government after it receives the views of the special task force headed by my colleague, the Minister of Transport (Mr. Hellyer). It will also include farm credit as a major element, where we must endeavor to take into account the extent to which demands can be met from the banks and other institutional lenders. The revision of the Farm Improvement Loans Act will help in this regard. In addition of course we have a wide variety of loans and investments for nuclear and other special power projects, for the Seaway and Air Canada, the Canadian National Railways and other crown agencies, and for foreign aid and export credits. I would expect the total to be something of the same general level as this year, and partly offset by receipts of cash from outside the budget (from employee pension funds and other accounts for example). The net extra-budgetary requirement for cash would appear likely to be of the order of $600 or $700 million, excluding what may be required for foreign exchange purposes.
These extra-budgetary requirements are demands that we would normally aim to meet by borrowing. At the level indicated, however, they alone will pre-empt most or all of what we should expect to borrow next year in competition with other borrowers in the capital and credit markets.
Control of Public Expenditure
Our experience this past year, and the prospects next year, force us all to recognize the central problem of the control of public expenditures in Canada today. This is a problem that confronts not only the parliament of Canada but also the legislatures of the provinces and the Councils of the municipalities. The past decade has witnessed a very rapid increase in the scale of public expenditures at all levels, and particularly by provinces and municipalities. I will not endeavor to give detailed figures to the house at this point, but we may note briefly that expenditures by all governments as recorded in our national economic accounts have risen from $8.7 billion in
October 22, 1968

The Budget-Mr. Benson 1957 to $21.2 billion in 1967. Of this increase of $12.5 billion some $8.4 billion has been in provincial and municipal final expenditures. Federal transfer payments to provinces, of course, have increased very rapidly to help meet this growth. When these transfers are eliminated, the increase in federal expenditures for its own direct programs over this period has been $4 billion. In 1957 they were
15.1	percent of the G.N.P. By 1967 they had fallen to 14.3 percent of the G.N.P.
It is well known that several large programs that we finance jointly with provincial governments are those that have been found most difficult to control. These include notably the program commenced in 1967 whereby we have provided tax abatements, equalization payments, and direct cash adjustment payments under the Fiscal Arrangements Act to assist the provinces in meeting the costs of university and other post-secondary education. Included in these shareable costs are large sums spent for senior matriculation courses in secondary schools, such as grade 13 in Ontario. Our assistance for such education amounts to one half of the total operating expenditures in the provinces, including those financed by student fees or other sources. These costs are now increasing at an annual rate of about 20 percent, and our adjustment payments must be expected to rise very rapidly to reflect this phenomenal expansion.
The other most rapidly expanding program is hospital insurance, where the current rate of cost increases exceeds 15 percent despite the fact that the program is now well established and reasonably mature. Payments for general welfare purposes under the Canada Assistance Plan are large, but they are not subject to such rapid built-in cost increases and do not cause as much concern. Medicare of course will quickly become a large joint program and will involve growing expenditures for us as well as for the provinces for some time. However, in view of the substantial increases in medical fee schedules in recent years, the new medicare program should not run into cost increases as large as those of hospital insurance, for example. We should note that new government expenditures for medical care will be mainly replacing payments by individuals for the same purpose or payments made through existing private or public plans. Only a fraction of the cost will constitute an increasing demand upon the economy, but the result should be a fairer and more efficient system of assuring health care for all Canadians regardless of income.


Stanley Howard Knowles: At
last the government is beginning to realize this.


Edgar John Benson: Discussions with the Provinces
The effective management of all these major services is a matter for the provinces. It is in the mutual interest of all the governments and of the people of Canada to ensure that expenditures under these very important programs are made economically and in accordance with sound judgments as to priorities and rates of growth, taking into account the burdens they place on the taxpayers as well as the objectives of the programs themselves. I plan to meet with the treasurers and finance ministers of the provinces early in November to discuss these questions. I expect that in reviewing this health field we will be joined by our colleagues, the ministers of health who will also be meeting here at the same time. We will consider whether some intensive work should be put in hand on a broad basis to apply modern systems analysis and operational research to improving the efficiency with which health services and facilities are provided to the people of Canada.
In the field of higher education there is the same need for economy and efficiency but one must also take into account major issues of policy. These, of course, are matters of provincial responsibility. The universities and other educational institutions face increasing problems of their own, and we are all more conscious of them now than ever before. Provincial governments are responsible for the evolution of the laws and institutions for higher education. We have no desire to interfere at all in this difficult and delicate responsibility, where each of our provinces will wish to see its institutions develop in a way that suits its own conditions. Our main con-of growth involved. In 1965-66 our contribu-cern in 1966 and 1967 was to ensure that the provinces had additional financial means at their disposal to help meet the abnormally rapid increase in requirements during the current period for the expansion of universities and other post-secondary educational institutions. We recognized this priority, although we have been surprised at the extreme rate tion to the support of higher education, including the special tax abatement to Quebec, amounted to about $40 million. This year the equivalent fiscal transfer and cash payments to the provinces are estimated at about
October 22, 1968

$500 million-over twelve times what they were three years ago.
As the Prime Minister has already indicated, we anticipate that provinces will wish to discuss with us questions related to medicare. We shall be quite prepared to discuss them. We hope that all the provinces will take advantage of that act at the first opportunity. We continue to believe that the provision of medical care services as a publicly financed operation is a matter of high priority in the development of proper health and social services for Canadians.
[DOT] (8:40 p.m.)
This government and this House recognize the financial problems being faced by all the provinces-even the wealthiest of them, which is the most outspoken on the subject. Between 1962 and 1967 we reduced the federal personal income tax to make way for the provinces to enlarge their use of this revenue field from 16 percentage points to 28 percentage points. We are now helping all provinces with substantial participation in meeting the cost of broad services in the fields of health, welfare and higher education, and particularly in rapidly growing programs in fields of highest priority. We are giving major assistance to the provinces with less than average taxable capacity by our equalization grants. We are providing hundreds of millions a year in housing finance to provincial and local agencies under the National Housing Act. All the many hundreds of millions of dollars we collect in contributions under the Canada Pension Plan, in excess of current pension payments, are loaned immediately to the provinces. Parliament has proven with action its concern for the financial needs of the provinces. We can legitimately expect recognition by them of our problems, and of the needs for expenditures on national programs for which we as a parliament are responsible.
Emphasis in Economic Policy
Before turning to our immediate fiscal policy and the details of proposed tax measures, it is essential to consider the over-all framework of general economic policy for 1969 and to determine its main emphasis. Needless to say, we shall continue to work toward all the broad goals which are widely accepted in western industrial countries-full employment, economic growth, price stability, balance in external payments, and an equitable sharing of rising incomes.
These general goals comprehend many specific objectives-the training and mobility of 29180-1071
The Budget-Mr. Benson labour, the improvement of productivity, increasing economic efficiency through more vigorous competition, the freeing of international trade, the reduction of regional disparities, the elimination of poverty-indeed, almost all the economic and social virtues we can think of. But the real problem in public policy comes in being specific, in reconciling conflicting objectives, in making choices among competing demands, in deciding how much of each to pursue, and of course in knowing how to do it all effectively and efficiently. There are far more good things to be done in Canada, particularly by governments, than there are resources available to do them.
We are doing a great deal, and will do more next year, in pursuit of all the goals and objectives I have mentioned. Not the least of our efforts, I would emphasize, are the many services and programs to deal effectively, constructively and humanely with poverty. But we cannot do everything at once. Rather, we must try to advance on as broad and balanced a front as possible, and we must be ready at all times to face up to the most urgent priorities among all of our objectives.
Resisting Inflation
In the broad field of economic policy the most urgent need now is to check further the continuing increase in prices and living costs. There appears to have been some easing of inflationary pressure in recent months. But there is little evidence that the damaging upward spiral of prices and costs has been effectively broken. Further, unless our policies are firmly set to resist inflation, there is great danger that continued prosperity in 1969 will cause pressures that will set in train a new round of price and cost increases.
I want to emphasize that a rapid rise in the price level, on the scale experienced in recent years, has many serious and damaging effects. Firstly, it is most unfair to those in our society, mainly the older people and the poor among us, who do not possess the bargaining power necessary to protect themselves against the increase in the cost of living. There is no doubt that recent and current inflation is hurting many more than the number who suffer from unemployment. Secondly, rapid price increases undermine the whole basis of our economic structure and competitive market system. A flexible price system cannot operate properly to allocate resources for

October 22, 1968
The Budget-Mr. Benson maximum production and income unless the price level as a whole is reasonably stable. Thirdly, serious inflation erodes gradually but surely the competitive position of Canadian producers, both in other countries with whom we must trade and in our own markets at home. And fourthly, it makes people, and the institutions through whom they invest their money, increasingly reluctant to lend money except at high interest rates and in decreasing amounts. Yet the growth and development of our economy requires the large scale investment of savings in the form of mortgages and bonds fixed in terms of money. These securities are the only means open to homeowners, school boards, municipalities and governments to borrow funds needed for housing and for all the public purposes essential in our modern society. Unlike large corporations, none of these borrowers can sell equity shares, but their increasing role in the capital markets means that even a moderate degree of inflation poses a larger problem than ever before.
We should not delude ourselves into thinking the choice is between either policies of fiscal ease to counter unemployment or policies of fiscal restraint to fight inflation. In our present circumstances, unchecked inflation would precipitate the kind of economic disruption in which unemployment would surely increase and we would end up with more of both of these evils.
Achieving greater stability in our price level requires action on many fronts. Our fiscal policy must avoid excess demand on production and markets, and keep producers constantly aware of the need to compete vigorously and to prevent cost increases. We need to exercise a wider responsibility to promote competition and minimize restraints on trade. Management must do all it can to improve efficiency and productivity. Workers and governments must cooperate to ensure better training and mobility of the labour force. Business and governments must anticipate bottlenecks and shortages and plan production and demands to minimize them in every way possible. Over the long term the provinces must plan and provide better education. Finally, we must, I feel, do all we can to persuade those who enjoy strong market power to exercise it with due restraint, taking the public interest fully into account. This will require the use of public education, special inquiries into inflationary situations, and

the mobilizing of public opinion against practices and actions which endanger the maintenance of price stability in our country.
I expect that my colleague, the Minister of Consumer and Corporate Affairs, will have something more to say on plans and measures to combat inflationary cost increases when he participates in the Budget debate. The list I have already given, Mr. Speaker, makes quite a catalogue. Nevertheless they are all measures which Canadians, working together can achieve. Most of them are desirable in themselves, but they should now be given particular attention and focused upon preventing further increases in the cost of living.
Current Fiscal Strategy
In deciding on over-all fiscal strategy for 1968 and '69 we must take into account both the financial prospects I have described and the broad economic situation I have outlined. After doing so we have reached the conclusion that we must raise substantially more revenues in order to bring the budget into balance in 1969-70.
By such action we will be contributing to the restoration of price stability, while at the same time giving support to the economy through investment programs in housing, farm credit and other economic fields. We will be limiting our demands on the capital market to non-inflationary amounts to be used for capital purposes. The provinces and municipalities on their part will be investing one way or another the large funds we turn over to them from the Canada Pension Plan, and borrowing in the market to finance public works and their other lending and investment programs. In accordance with the practice of recent years I shall be meeting at the end of the year with the provincial finance ministers to review the current economic situation and prospects, to assess the impact on the economy of our over-all public financial position, and to consider what are appropriate fiscal policies in this light. I believe however that the general strategy I have proposed is the best one for the federal government in the present circumstances.
Tax Recommendations
In selecting the tax changes to be made to implement this policy I am mindful of the tax reform program which the government proposes to initiate next winter. I have been over with my officials the conclusions which they have reached from a long and comprehensive review of our income tax laws, the report of
October 22, 1968

the Royal Commission on Taxation and the scores of briefs and hundreds of letters which we have received on the subject. After further thought I have reached certain decisions which I have asked my officers to set forth in the form of a draft bill, which I will place before my colleagues for their approval or modification. It is this draft, suitably revised and explained, which will be placed before the house, provincial ministers, and the public for detailed study and discussion early in the new year. It would then be reconsidered and revised by the government for final consideration by the house in the latter part of 1969. By that means I hope we can have a reformed income tax in effect in 1970.
The tax recommendations which I am making tonight are not an integral part of next year's reform package. By that I mean that they stand on their own and should be implemented, whether or not there is to be any further reform. They do not commit us to particular changes in other areas.
[DOT] (8:50 p.m.)
Estate Tax and Gift Tax
The first group of recommendations concerns the Estate Tax and the Gift Tax. I have come to the conclusion that transfers of property at death and by gift should not, at least for the present, be included in income like other items that have normally been regarded as income of a recurring nature. While respecting the intellectual coherence and elegance of the case made by the Royal Commission on Taxation on this matter -crudely summed up in the phrase that "a buck is a buck is a buck"-I believe that the overwhelming weight of Canadian opinion is against it now, and many Canadian practices and institutions would be seriously disrupted if we embraced this proposal. Instead, I propose that the estate and gift taxes continue to be levied on the transferor and that they be reformed along different lines.
I am proposing that in respect of deaths after midnight tonight we exempt all amounts left outright to a widow by her husband, and to a widower by his wife. Perhaps I should make it absolutely clear that this estate tax exemption includes pension and annuity benefits. Further, if a husband leaves the entire life interest in a trust to his wife, the assets in that trust will be excluded from his estate, but included in hers, and vice versa. With this reform, we will recognize the contribution made by wives to the accumulation
The Budget-Mr. Benson and conservation of the wealth of the family. It will eliminate a deeply felt grievance.
There would also be a $10,000 exemption in respect of the amount left to each child, and additional exemptions for younger children depending on age and income, and for children wholly dependent because of disability. Finally there would be a general exemption of $20,000 to eliminate or reduce the tax on small estates to whomever they may be willed.
I propose that the loss of revenue arising from this long awaited reform of the exemption structure be made up by raising the rates on the rest of the estate. The schedule of rates is set forth in the table included in the resolution: they range from 15 percent at the bottom to 50 percent at the top. The value of taxable gifts made after tonight will, on the donor's death, affect the rates in the tax schedule that are applied to the taxable value of his estate. In effect, taxable gifts made after tonight will use up part of the low rate brackets in the Estate Tax rate schedule.
It is difficult to predict accurately the revenue effects of changes in estate taxes but I have aimed at maintaining the same total over-all revenue while permitting the transmission of property between husband and wife without tax.
It will be recalled that since 1964 the provinces have enjoyed three-quarters of the revenue from the estate tax-either by payment from the federal treasury or by abatement in their favour. I do not propose that this be changed. We recognize the special interest of the provinces in this field of taxation but believe that parliament should keep a share in it for its indirect benefits in the enforcing of the Income Tax Act as well as its direct benefits in revenue. There are some transmissions of property that cannot be taxed by laws within provincial jurisdiction.
I propose that we amend certain of the special statutory rules about situs of property in order to bring the federal rules more in line with those used for purposes of provincial succession duties. I intend to discuss with provincial ministers other means of achieving greater uniformity and simplicity in the laws concerning death duties and their application.
As for the gift tax, effective tonight the exemptions and the rates will be changed, and the new rate schedule will apply progressively to the cumulative total of all future taxable gifts made by the donor.
Straightforward gifts between husband and wife will be completely exempt. Gifts to other
1686	COMMONS
The Budget-Mr. Benson individuals will be exempt up to $2,000 per annum for each recipient. There will be no exemption for gifts to trusts or corporations. The present exemption for gifts to registered charities will be continued, as will the once-in-a-lifetime exemption of $10,000 in respect of a gift of a farm by the farmer to his child. The other present exemptions, including that based on income after tax, will be dropped.
The rates of gift tax would range from 12 percent on the cumulative total of taxable gifts until $15,000 is reached, up to a maximum rate of 75 percent on gifts when the cumulative total exceeds $200,000. This 75 percent means in effect a tax rate of three-sevenths or about 43 percent, on the total of the gift and the tax on it, the basis on which we normally think of income and estate taxes.
It will be evident to the honourable members that, if the gift tax rate changes were not effective immediately, taxpayers could take advantage of any interim period to make abnormally large gifts before the new cumulative system begins. I believe that members will also agree that the estate tax changes should be made effective immediately so as to exempt property passing to widows on deaths after midnight tonight.
Life Insurance Companies
My second group of proposals concerns the life insurance companies and their policyholders. At present, the business incomes of life insurance companies are largely exempt from tax: the companies are taxed only on the amounts appropriated for shareholders during the year. This is usually only a small fraction of the total business income of the shareholder-owned companies, and of course it produces no taxable income at all for the mutual companies, which now I should point out, dominate the industry, or for the fraternal benefit societies.
I am proposing that we introduce special rules to recognize the problems that arise in measuring income in the life insurance industry, but that, with the exception of these special rules, the general provisions of the Income Tax Act apply to this industry just as they do to all others.
One of the special rules will deal with the deductions from income permitted in order to provide the policy reserves needed to meet future liabilities under policies of insurance. The details of the computation of these reserves will be set out in regulations, and the industry will be consulted in the course of preparing these regulations. However, I have

DEBATES	October 22, 1968
in mind that we would use, in computing the reserves against the various classes of policies, the same interest assumption that is implicit in the tables of cash surrender values.
Policy dividends will be deductible, provided they are paid out of the profits of the participating fund.
[DOT] (9:00 p.m.)
All of this will apply only to the Canadian operations of the corporations. The usual rules for determining the profits of a branch of a company will apply except that we will provide by regulation for the computation of the portion of their investment income which is attributable to their Canadian operations.
For Canadian companies, the income producing assets that will be treated as Canadian will be proportionate to the part of their over-all actuarial reserves that relate to Canadian business. This will bring a reasonable portion of their investment income into Canadian taxable income, and at the same time, it will not penalize those companies which choose to keep most of their assets in Canada.
For non-resident companies, the income-producing assets that will be treated as Canadian as of January 1, 1969 will be those required to be kept in Canada in accordance with the rules of the Superintendent of Insurance. The income from other Canadian assets of these companies will continue to be subject only to withholding taxes. I want to emphasize that there is nothing in these recommendations to cause these companies to withdraw funds from Canada, nor is there anything to deter them from investing more in Canada.
For the future, the income-producing assets of these companies will be increased by the amounts derived from the Canadian operations, and reduced by the value of the assets which they choose to transfer to withholding-tax status. We will apply our 15 percent branch tax only to these transfers.
It is essential as well, I believe, in terms of equity between those who save in the form of insurance policies and those who save in other forms, to levy some tax on the investment income which policyholders receive through the insurance companies, either in the form of policy dividends or otherwise. The Royal Commission proposed valuing these elements of investment income each year-whether or not received directly by the policyholder-and taxing them directly to
October 22. 1968



him. We have worked out a much simpler and more practical method which should achieve substantially similar equity.
In order to tax those elements of investment income actually received by the policyholder before he dies, either through cashing in his policy or selling it, we propose to include in his taxable income the proceeds of the policy less the net amount he has paid for it. In most cases his cost would be premiums less dividends. For policies already in existence the taxpayer could use as his cost to date the cash surrender value on the next anniversary date of the policy. This will ensure that this tax applies only to investment income earned after today.
The regulations which define the taxable element of annuity payments will be amended so that they are consistent with this treatment of insurance policies. Again, the change will not affect the treatment of interest earned before today.
This will bring to tax the amounts withdrawn by policyholders. There is no comparable simple and practical method of taxing in the policyholders' hands the investment income which benefits them by way of reduced premiums or increased policy dividends. Consequently I am proposing that we levy a 15 percent tax on part of the investment income of insurance companies. This will take the place of a tax on the individual policyholders. I will not attempt to give all of the details of the computation of taxable investment income: they are set out in the resolution. However, I would like to mention that there are several deductions from total investment income to arrive at taxable investment income, including deductions to recognize that some policies are in respect of registered pension plans, and a deduction to recognize the special situation with respect to outstanding non-participating policies.
Since this tax will reduce the investment income available to the companies, it will be a deduction in arriving at taxable income.
I have tried to assess the effects of these taxes on the Canadian life insurance industry. Clearly they will reduce its annual accumulation of income in general contingency reserves-which is as it ought to be, for these are business profits not now being taxed. The tax on investment income may cause a moderate increase in the premium rates in the future, or at least in the net cost after policy dividends, of new policies and it may cause a moderate reduction in the policy dividends to
The Budget-Mr. Benson be paid in future on many outstanding participating policies.
On balance however the gain in revenue to us and to the provinces and the gain in equity in treating different channels of savings more fairly would outweigh the disadvantages. The life insurance industry in Canada, both foreign and domestic and those who invest in it will be taxed fairly by comparison with other industries and financial institutions. It will be taxed more logically I believe than that industry is taxed in other countries, including the United States. The industry is already having to adjust to changing conditions and market preferences, and I believe this new tax regime-which should remove the uncertainty about taxes which has been hanging over the industry for years-will speed that process. It could lead to new combinations of basic insurance protection and savings in various forms, perhaps making more effective use of the provisions for registered retirement savings plans.
Estimating the revenue yield from these taxes on life insurance companies and withdrawals is somewhat hazardous but I believe that for the next fiscal year the total revenue yield would be about $95 million, of which about $40 million would come from the indirect tax on investment income. About $10 million would be provincial revenue.
I also propose that non-resident companies carrying on a general insurance business in Canada (that is other than life insurance) will include in Canadian taxable income the investment income attributable to their Canadian operations. This will be the income flowing from the assets related to the Canadian branch computed in the same manner as for non-resident life companies; other Canadian investment income of such companies would continue to be subject only to withholding tax. This will correct a discrimination against Canadian companies carrying on such business here, but will not impede the investment in Canada of reserves against insurance risks elsewhere.
Reserves of Financial Institutions
I have reviewed the reserves allowed to financial institutions for tax purposes in the light of the Report of the Royal Commission on Taxation. As a result, I propose now to reduce the limits both for mortgage lenders and for banks and those cases where the reserves are not determined by a detailed appraisal of individual accounts but on the basis of a general percentage applied to large categories, which is the normal practice.
October 22, 1968


Other Measures
In quite another field I am proposing a change in the law to clearly exclude from the exemption provided for provincial crown corporations those cases where persons or corporations other than Her Majesty or a municipality have options to buy shares held by Her Majesty or a municipality. It is still possible that corporations in respect of which this is true may be held taxable under the present law, since the arrangements in question appear to be facades. However, I think we should put the matter beyond doubt.
[DOT] (9:10 p.m.)
At this time I wish to announce a change that will be made in the regulations relating to depletion allowances for the operators of oil and gas wells and mines. The existing scheme contemplates that depletion will be calculated as a percentage of production profits after deducting exploration and development expenses. Unfortunately, as the regulations now read, groups of companies can obtain much greater benefits than were intended by arranging to have their exploration and development activities carried on in one company and their producton activities carried on in another. The regulations are being changed to provide that all exploration and development expenses of the group must be deducted from production profits before depletion is computed.
I should also like to announce that my colleague the Minister of National Revenue intends to enforce more thoroughly and in finer detail the collection of tax on receipts of interest. It has been fairly widely believed in recent years-and noted by the Royal Commission on Taxation-that there appears to have been a large volume of interest payments to individuals that have not been reported or assessed for income tax. It is now feasible to match up much more information by means of computers with individual tax returns than was previously the case, and we intend to secure more such information, particularly in regard to interest and dividends. I believe that such action will produce a notable increase in our revenues and that it will increase the over-all equity of our tax system.
With the introduction of medical care plans in a number of provinces, taxpayers will no longer have to pay certain medical costs which formerly were classified as medical expenses for tax purposes. I propose that we follow the pattern set in 1959 when hospital insurance was introduced and amend the
October 22, 1968

Income Tax Act to provide that medical expenses, as defined in the Act, shall not include amounts which are paid on a taxpayers' behalf, or for which he is reimbursed, under a provincial medical care insurance plan which meets the criteria set forth in the Medical Care Act.
The Income Tax Act will be amended to provide that the present non-resident withholding tax on royalties paid by a resident of Canada to a non-resident shall apply to a somewhat wider range of payments. The proposed amendment will be based on the definition of royalties suggested by the O.E.C.D. fiscal committee and used as a model by Canada in several of its international tax agreements.
A further measure is intended to help farmers who have need of more grain storage capacity on their farms. I am thinking in particular of the farmers in Western Canada who will have to store increased amounts of grain this winter and of the corn growers in Ontario. It is proposed that amounts spent to acquire grain storage facilities may be deducted for tax purposes over a short period. This will be done by an amendment to the income tax regulations and will provide that the capital cost of new buildings, structures and bins designed for the purpose of storing grain on a farm, acquired in the period August 1, 1968 to December 31, 1969, may be written-off for tax purposes over a four year period.
I should note at this point that these various changes in the Income Tax Act, other than those on life insurance companies and financial institutions which I have already reported, should increase budgetary revenues by about $10 million in 1969-70. Because of their nature they will not affect the current fiscal year substantially.
Customs Tariff Resolutions
I turn now to the Customs Tariff. I am reintroducing three sets of resolutions which were tabled by my predecessor in the last session of parliament. The first set formed part of the budget speech which was presented to the house on June 1, 1967. In the budget of November 30, 1967, the rates of excise duty on domestic spirits and beer were increased. The second set of resolutions provided for an increase of the same amount in the customs duties on imported spirits and beer. The resolutions of June 1 and November 30 were considered by the committee of ways and means last December.
The Budget-Mr. Benson
The third, and by far the largest of these sets of resolutions, were those tabled on November 6, 1967, implementing Canada's commitments, other than those on chemicals and plastics, under the Kennedy Round agreements. The rates set out in these resolutions came into effect on a provisional basis on January 1 of this year. The resolutions were referred to the standing committee on finance, trade and economic affairs. After a series of public hearings the committee recommended them to the house for favourable consideration.
However, parliament was dissolved before they could be enacted and an order in council was therefore passed on April 25 under the authority of section 22 of the Financial Administration Act, continuing in effect the proposed reductions in duty. I announced at the time that collections of the increases in customs duties proposed on a few imported products were being suspended, but that it was the government's intention to ask the next parliament to enact legislation implementing both the reductions and increases, effective from the dates originally proposed in the resolutions. The resolutions I am tabling tonight will, if enacted into law, have this effect.
Chemicals and Plastics
The new resolution which I am introducing this evening flows from the Tariff Board report on chemicals under reference 120. The first volume of the board's report was tabled in the house in June 1966. The revised schedule proposed by the board in this volume formed the broad basis for our Kennedy Round negotiations on chemicals and plastics. In these negotiations the rates of duty on chemicals were "bound" at not more than 15 percent. The plastics rates were, in general, bound at the highest recommended rate within any group of products.
In the Kennedy Round, Canada undertook to introduce the concessions offered on chemicals and plastics not later than July 1. It was not, in fact, possible to implement the proposed new chemical and plastics schedule by that date. Accordingly, it was agreed with our trading partners that Canada could delay putting these concessions into effect to not later than January 1 next. As a result of our negotiations with the United States, which is Canada's major supplier of chemicals and plastics, reductions in the rates of duty on a number of chemicals and plastics in terms of the present tariff nomenclature were made by
October 22, 1968

The Budget-Mr. Benson order in council for the period July 1 to December 31.
As to the tariff structure proposed by the Board, the industry proposed and the Board recommended the adoption of the so-called Brussels Nomenclature for most of its new tariff schedule. This nomenclature is used by the major trading countries, with the exception of the United States; it is a system for classifying goods in headings which are grouped into chapters and sections. It also contains rules and notes defining the scope and priority of the various headings. The board recommended that these rules and notes be adapted for Canadian use and that the Customs Tariff provide that the governor in council may prescribe such rules and notes.
The schedule proposed by the board is very long. In part this is due to the use of this nomenclature and in part because the Board was directed not to make any general changes in the margins of preference, i.e. in the difference between the British preferential and most-favoured-nation rates of duty. Generally, the present rates are 15 percent B.P. and 20 percent M.F.N. on chemicals of a kind produced in Canada, and Free B.P. and 15 percent M.F.N. for those not produced in Canada. As these chemicals are ruled by the Department of National Revenue to be made or not made in Canada, they automatically move, by this administrative action, from one set of rates to the other.
Accordingly the board, in general, recommended a very long list of chemicals produced in Canada, identified by name, with rates of 10 percent under the B.P. tariff and 15 percent under the M.F.N. tariff, and rates of Free B.P. and 15 percent M.F.N. on the residual tariff items providing for chemicals not produced in Canada. The structure proposed by the board, particularly with regard to the preferential tariff, would be less flexible than the present tariff.
The board's proposals have given rise to many representations urging a less rigid system. I found considerable merit in these representations. It seems to me that both the present flexibility and the results intended by the Board could be brought about in another manner.
I am therefore proposing that a 10 percent B.P. duty be established for certain items in the chemical sector and that parliament grant authority to the governor in council to lower this duty from time to time. This authority

would be similar to that set out in the Customs Act to reduce or remove duties on articles used in Canadian manufactures. Thus I am presenting for the consideration of the house a much shorter schedule than that proposed by the board. At the same time I should make clear that, by appropriate orders in council, we will ensure that British goods will face no increases in rates of duty other than those fully consistent with the principles underlying the board's proposals. Moreover, for many products imported from Britain there will be reductions in rates from 15 percent to 10 percent or even lower rates.
A somewhat similar situation exists with regard to plastics. For these products the board recommended a progression of rates, from resins to the more fabricated forms. It named those which it felt should be dutiable because they were made in Canada or were competitive with Canadian made plastics, and proposed residual items free of duty, in most cases, for those not named.
Representations were received to the effect that the Board's proposals provided no assurance of protection when new products are made in Canada. It appears to me that there is validity in this view. On the other hand, it is important to have a procedure for free entry when circumstances warrant, so as to avoid imposing unnecessary costs on Canadian users. Accordingly, I propose that rates of duty higher than those proposed by the board be established for the residual items, and that the governor in council be given authority to waive, reduce or restore these duties. This procedure will permit a shortening of the list of statutory tariff items in the plastics schedule.
[DOT] (9:20 p.m.)
I am also recommending a few other departures from the board's proposed schedule, based for some products on new information, on new production in Canada or to meet certain problems not foreseen by the board. All the changes I am proposing are consistent with our international commitments.
It goes without saying that I have received a large number of representations for changes from the board's proposals, many for higher duties which are not being met in the resolutions I am tabling. One I would like to mention in particular relates to the board's recommendation on polyethylene. This is an important issue but I am not willing to propose any changes in the duties on polyethylene as recommended by the board without a
October 22, 1968

further study by the Tariff Board. Accordingly, I am asking the board for a thorough but prompt review of the current status of polyethylene.
In order to meet our new international obligations our new chemical and plastics tariff must be in effect by January 1 next.
Other Tariff Questions
I have received a number of representations for other changes in the Customs Tariff. However, I have decided that these should be held over for consideration until a later occasion.
I am also tabling a resolution regarding the implementation of our obligations under the *"Anti-dumping Code". A proposal regarding a bill to achieve this objective is already before members in the form of a White Paper. I would not suggest that we proceed with this resolution until the standing committee has examined the draft bill. Members will be aware, of course, that we are committed, under the GATT, to revise our anti-dumping procedures by January 1 next.
The changes in the chemical tariffs which I have proposed above and in the antidumping duties will have I believe only a minor effect on customs revenues. It is very hard to set a figure on them because of the rather complicated changes in many small flows of import trade that are involved.
Central Fiscal Problem
I return now, Mr. Speaker, to our central fiscal problem and the revenues that we must raise to meet our forecast requirements this fiscal year and next.
In respect of the current fiscal year I have come to the conclusion that tax measures introduced now to secure enough revenue to balance the budget this year would have to be so severe that they would be damaging to the Canadian economy. Therefore I feel we should look ahead to next year and determine what we need, and put it into effect as soon as we can.
The measures I have already outlined should increase our total budgetary revenue for next fiscal year, 1969-70, by $130 million and add $10 million to our extra-budgetary receipts. However, they would leave our budgetary revenues about $710 million short of the initial forecast of aggregate expenditures I made of roughly $11,670 million. Clearly a deficit of this order of magnitude next year is quite contrary to the economic and fiscal policies I believe necessary, and we
The Budget-Mr. Benson must raise substantially more revenue to meet it.
In selecting further changes to accomplish this purpose I have in mind that next year we shall be engaged in our major tax reform legislation and will then have in view our requirements for 1970 and beyond. We will be taking into account the fact that our income and corporation tax surcharges of 3 per cent enacted early this year will terminate at the end of 1969. Regard must also be had to the non-recurring revenue effects of the change in timing of the payment of tax by corporations.
Further Tax Measures
In view of this consideration I feel we can secure a part of what we require for 1969-70 by completing the moving forward of the dates of payment of the corporate income tax-bringing it then in line with the current payments on account which we are required to make from wages and salaries. I therefore propose that in taxation years following their next taxation year corporations be required to commence payment of their instalments of tax in the first month of their taxation year to which it relates and complete the instalments in the twelfth month. They will make their final adjusting payment, as now provided, by the end of the third month of the following taxation year. In order to make the transition to this system I propose that corporations be required to pay their instalments of tax in respect of their next taxation year in ten instalments commencing in the third month of the taxation year and terminating in the twelfth month. This acceleration will yield us about $275 million of revenue in the 1969-70 fiscal year. The effects of this acceleration on corporate liquidity will be offset to a significant degree by the completion of repayment of the refundable tax on corporate profits during 1969-70.
The remainder of the additional revenue required I propose to obtain by adding to the Old Age Security Tax on personal incomes an additional similar Social Development Tax at half the rates of the former. This Social Development Tax will be 2 per cent on taxable income up to a maximum tax of $120 per annum. It would go into effect January 1st. I estimate it would add some $55 million to our revenues in the current fiscal year and about $440 million in the next fiscal year.
I gave serious attention to alternative sources of additional revenue, including for example an increase in our general sales tax
October 22, 1968

The Budget-Mr. Benson which would produce comparable amounts. But I concluded that what I am proposing would be the fairest and best, all things considered, including the desirability of not adding to the rate of increase of prices and costs of production.
I recognize that provincial governments will be concerned about parliament using any form of income tax at this time when clearly the provinces would like to get a larger share of it. I believe however that the total income tax including this addition and the higher rates of provincial tax applicable in Manitoba and Saskatchewan is within the capacity of Canadians to bear.
At this point Mr. Speaker, I would like to have the permission of the house to insert some small tables in Hansard. One would illustrate the effect of the new Social Development Tax on the total of taxes on income paid by a married man with two children. The second one gives the estimated yield of our various taxes in the current fiscal year, after taking account of the changes I have proposed. I also include last year's figures for comparison. The third table summarizes our budgetary position for the current fiscal year and for the next fiscal year, taking the revenues from the tax changes into account. I shall also include with the Budget papers at the conclusion of this speech, if the House will agree, tables giving the budget for 196869 on a national economic accounts basis and a reconciliation with the budgetary accounts.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



TABLE 1

[Stage Direction]
To Illustrate the Proposed Social Development Tax on Individuals Married taxpayer-two children eligible for family allowances
Income
[Stage Direction]
3.500		
4.000		
4.500		
5.000		
6.000		
7.000		
8.000		
10,000	
15.000		
25.000		
Proposed New Social
Present Tax<a>
Development Tax
$	$
102	16
184	26
275	36
376	46
597	66
842	86
1,109	106
1,644	120
3,294	120
7,790	120
<a>This is the combined federal and provincial income tax including the old age security tax and the temporary surtax, in all provinces except Quebec, Manitoba and Saskatchewan. The taxpayer is assumed to take the optional standard deduction of $100 in lieu of deductions for medical expenses and charitable donations.

October 22, 1968	COMMONS DEBATES	1693
The Budget-Mr. Benson

[Stage Direction]
Budgetary and Old Age Security Revenues ($ million)
1967-68	1968-69
(After tax Actual	changes)
Budgetary Revenues
Personal income tax	 2,850
Corporation income tax	 1,671
Non-resident tax	 221
Estate tax	 102
Customs duties	 746
Sales tax	 1,601
Other duties and taxes	 826
Total taxes	 8,017
Non-tax revenues	 1,060
Total budgetary revenues	 9,077
Old Age Security Revenues
Personal income tax	 800
Corporation income tax	 150
Sales tax	 545
Total O.A.S. taxes	 1,495
3,310
2,020
110
1,630
8,970
1,135
10,105
190
1,625
TABLE 3 Budgetary Revenues and Expenditures		
	1968-69	1969-70
	(Smillion)	($ million)
Budgetary Revenues before Tax Changes	
10,050	10,830Revenues from Tax Changes	
55	845Budgetary Revenues after Tax Changes	
10,105	11,675Budgetary Expenditures	
10,780	11,670Budgetary Deficit (-) or Surplus (+)	
-675	+5
Budgetary Position after Tax Changes
As these tables indicate, our position for the current fiscal year, 1968-69, would show total budgetary revenues of $10,105 million and total budgetary expenditures of $10,780 million, leaving a deficit of $675 million. Our net extra-budgetary requirements, apart from exchange transactions, I am now forecasting at $600 million for the year as a whole.
For next year, 1969-70, the tax measures I have proposed should bring the budget into balance. I forecast total budgetary revenues of $11,675 million and budgetary expenditures at $11,670 million. As far as can be estimated
at this early stage, on a national economic accounts basis the budget would involve a surplus of roughly $250 million. Our extrabudgetary requirements, apart from foreign exchange transactions, will probably be in the neighborhood of $600-700 million.
In spite of its timing, I think it will be obvious to all, that this is no "baby" budget. It is a new budget, by a new government, but it is not an easy budget. It is one which, I believe, will ensure that we have a sound economic and financial base from which to move forward through a new period of balanced expansion and social progress.
October 22, 1968
[Stage Direction]
The Budget-Mr. Benson As I have suggested, this is the prospect lor the years immediately ahead. Our trained and growing labour force, our resources, our industrial plant and our ability to save, will make it possible to do more and more of the things we recognize as essential and worth while. But there are problems to grapple with, as well as opportunities to seize. The government, through this budget, is preparing to meet both challenges.
With your permission, Mr. Speaker, I should like now to table the resolutions which I propose to move in committee of ways and means. In accordance with the usual procedure, these contain some detailed points which have not been mentioned in the speech and I should like them to be attached as an appendix to today's Hansard.
[Editor's Note: For Ways and Means Resolutions, see Appendix.]

[Stage Direction]
1966-67	1967-68	1968-69 Forecast after Tax Changes
		(millions of dollars)	
A. Revenue			
1. Direct taxes, persons	3,153	3,750	4,2902. Direct taxes, corporations	1,673	1,665	1,9153. Withholding taxes	205	226	2304. Indirect taxes	3,648	3,683	3,9055. Investment income	689	836	9156. Employer and employee contributions to social insurance and government pension funds	700	723	8707. Total revenue	10,068	10,883	12,125B. Expenditure	1. Goods and services: defence	
1,698	1,816	1,8202. Goods and services: others	
2,317	2,572	2,9603. Transfers to persons	
2,573	3,021	3,3504. Interest on public debt	
1,156	1,267	1,4405. Subsidies	
381	395	4156. Capital assistance	
64	72	857. Transfers to other levels of government	
1,712	2,142	2,4908. Total expenditure	
9,901	11,285	12,560C. Subfi.us (+) or Deficit (-)	
+167	-402	-435

October 22. 1968
[Stage Direction]
1.
2.
3.
4.
5.
6. 7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
The Budget-Mr. Benson FEDERAL GOVERNMENT EXPENDITURE Public Accounts and National Accounts Reconciliation
1966-67	1967-68	1968-69
(millions of dollars)
Budgetary expenditure	
Deduct:
Budgetary transfers to funds and agencies'1)	
Post Office expenditure	
Deficit of government business enterprises	
Reserves and write-offs	
Purchase of existing capital assets	
Budgetary revenue items off-set against budgetary expenditure'11	
Add:
Extra budgetary funds expenditure:
Old Age Security benefits....
Unemployment insurance benefits.
Government pensions	
Prairie farm emergency payments
Expenditure of government funds and agencies'11 Miscellaneous'31	
Total expenditure, national accounts basis	
Surplus (+) or deficit (-), national accounts basis..
Surplus (+) or deficit (-), budgetary basis	
8,780	9,869	10,780-598	-682	-737-269	-302	-356- 68	- 85	-106-177	- 32	- 91- 5	- 6	- 9-112	-132	- 87(-1,229)	(-1,239)	(-1,386)1,073	1,388	1,542307	389	454129	137	1523	9	7(1.512)	(1,923)	(2,155)608	607	728230	125	2839,901	11,285	12,560+167	-402	-435-422	-792	-675
<* In the national accounts, budgetary appropriations to various funds and agencies are replaced by the expend itures actually made by these funds and agencies.
(a The largest components of this item consist 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.
'31 This item includes the supplementary period adjustment. In the national accounts, expenditure on goods and services in the supplementary period are split evenly between adjacent fiscal years; most other expenditure items are shifted entirely to the next fiscal year.
1696	COMMONS DEBATES	October 22, 1968
The Budget-Mr. Benson

[Stage Direction]
Public Accounts and National Accounts Reconciliation
1966-67	1967-68	1968-69 Forecast after Tax Changes1.	Budgetary revenue	8,358	(millions of dollars) 9,076 10,105	2.	Deduct: Budgetary return on investment	-519	-612	-6853.	Post Office revenue	-253	-282	-3354.	Other non-tax budgetary revenues	-146	-166	-1155.	Corporate income tax, excess of accruals (+) over collections (-)..	(-918) -70	(-1,060) -156	(-1,135) -2956.	Add: Extra-budgetary funds revenue: Old age security taxes	1,286	1,495	1,6257.	Unemployment insurance fund-employer-employee contributions	345	344	4118.	Government pension funds-employer-employee contributions 	355	379	4599.	Prairie Farm Assistance Act levies	11	11	1110.	Government investment income: Interest on loans, advances and investments	(1,997) 289	(2,229) 347	(2,506) 37311.	Interest receipts on social insurance and government pension funds	206	235	25812.	Profits before taxes (net of losses) of government business enterprises	194	254	28013.	Miscellaneous 	(689) 12	(836) -42	(915) 2914.	Total revenue national accounts basis	10,068	10,883	12,125
0>These miscellaneous adjustments 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 year.
[DOT] (9:30 p.m.)
Marcel Joseph Aimé Lambert: This afternoon, Mr. Speaker, a great deal was said about a roster. Then, somebody had something to say about a rooster. Now I am going to talk about a roost, the ones on which the chickens have come home to roost. Today has been a very eventful day for those of us who live in North America. Down in Mexico City the finals of the Olympics have been drawing attention. There was a splashdown ending the latest example of advanced space travel. The three intrepid astronauts circled the globe and re-entered the atmosphere to land at a predetermined spot, under control. Here in Canada we have had our 1968 budget, which has proven the reverse, that federal government expenditures are still in orbit and all out of control.

Now, Mr. Speaker, I was talking about those chickens coming home to roost. These chickens all started on their way in those erratic, desperate days in June and July of 1963 when we had the notorious "60 days of decision." We know that the budget proposals of the former member for Davenport were those-


Some hon. Members:: Hear, hear.


Marcel Joseph Aimé Lambert: I wish that hon. members would consult the Postmaster General (Mr. Kierans). We all know what his reaction was on that occasion. He made a personal pilgrimage to Ottawa, from his position as revenue minister in Quebec, to protest in wrath and anger against the rather foolhardy proposals of the then minister of finance. He even went to the extent of writing to the President of the United States and the
October 22, 1968	COMMONS
Secretary of the Treasury protesting this nefarious act. Well, the reactions of the United States government-


Eric William Kierans: Mr. Speaker-


Some hon. Members:: Oh, oh.


Marcel Joseph Aimé Lambert: If the former member for Davenport were here, wouldn't he make a strange bedfellow with the Postmaster General.


Mr. Speaker:: Order, please. The Postmaster General is rising on a point of order.


Eric William Kierans: All I want to say, Mr. Speaker, is that I have come home to roost.


Marcel Joseph Aimé Lambert: I suppose, Mr. Speaker, in the spirit of the evening I might answer, as my colleagues have suggested, in the words of Winston Churchill, "Some chicken; some neck!" In any event, what we saw tonight was a savage budget. There must be a horrendous deficit when it has to be made up in a period of 18 months. I recall the present Minister of Finance (Mr. Benson), then president of the treasury board, standing in his place and boasting that they were going to balance the budget. They had computers, and everything was going to go so much more nicely. The other day, however, the President of the Treasury Board (Mr. Drury) had to announce there was somewhat of a shortfall in their estimates of expenditures-about $600 million. This is rather strange, in light of the progress payments being made to the provinces for these shared programs. Apparently the computers were out to lunch, or the people who were manning them were out to lunch. After all, no computer is any better than the brains and the hands setting up the program.
So, Mr. Speaker, we are now getting a figure of approximately $670 million, not $400 million, for the deficit. Of course we have not said anything about Expo; that is going to be paid for some time. In so far as inflation is concerned, the minister tonight read us some homilies in economic theory on priorities in all the things that a prudent government must do. But surely we should be in a position to believe the minister. Is this a Saul converted on the way to Damascus? After all, this is a very bitter pill that he is asking the Canadian public to swallow over the next 18 months, in order to cover this extremely large deficit.
DEBATES	1697
The Budget-Hon. M. Lambert
Why has it come about? Back in 1964 and 1965, when the minister and the Prime Minister (Mr. Trudeau) were members of the administration, my leader, as premier of Nova Scotia, on repeated occasions spoke about priorities. The Hon. Duff Roblin, premier of Manitoba at the time, spoke about priorities in the fields of health, education and social welfare. Time and time again I spoke about the importance of this matter, but the prime minister of the day scoffed. The present Secretary of State for External Affairs (Mr. Sharp) paid a little more polite attention when he was minister of finance. We got a grudging acceptance of the fact that inflation had become a major problem.
[DOT] (9:40 p.m.)
We are now told, Mr. Speaker, that this is Canada's prime problem today. Where did all this inflation start? Let us just look at the minister's tables. If we go back to April 1963 we find that the cost of living index was 132.3. Last August it had gone to 153.6, a matter of 21.5 points in five years. Do we wonder, Mr. Speaker, that bond prices have gone to the bottom? If hon. members would only consult the weekly Bank of Canada charts of long term interest rates and short term bills they will see that interest rates are at their highest level ever. This so-called softening of the interest rates of past weeks has now started to reverse itself.
The Canada Savings Bonds offer that is now being made is baited with a ruinous rate as far as the government is concerned. The government of Canada must borrow money at the rate of 7 per cent per annum, Mr. Speaker. Why? It is not to get new money but merely to stop the cashing in of old bonds.
With regard to government expenditure, when this administration's predecessor took over in 1963 the total level of federal government expenditure was $6.3 billion. In 1967 it was $10,671 million, and for 1969-70 the expenditure is estimated at $11,670 million. If expenditures keep going up at that rate they will have more than doubled in the period 1963-1971. In a short period of eight years federal expenditure will have more than doubled.
We saw a budgetary deficit last year, Mr. Speaker, of $870 million. This year it will be $730 million. There is going to be a further budgetary deficit over the following year because the cushion of $5 million is a mere drop in the bucket as a margin. Any little change in the economic climate can result in a substantial deficit.
October 22, 1968

The Budget-Hon. M. Lambert
In addition, the minister did not talk tonight about those refinancing requirements for which he is going to go to the money market. The minister talks about going to the market to finance deficits of $600 million and certain cash requirements. His own budget papers indicate that in fiscal year 1969 he is going to go to the market for $1,700 million of refinancing; and for the balance of this fiscal year, including the Canada Savings Bonds, he has to find another $835 million before April 1, 1969.
We should like to touch upon all of the matters that appear in this rather complicated budget, Mr. Speaker, which does require some care to follow through-for example, the estate tax changes, the gift tax changes, the taxes on life insurance companies and on financial institutions, the Customs Tariff and the income tax changes. I would simply at this point compliment the minister on the estate tax changes, the gifts between husband and wife and the question of annuities to husband and wife. I think there were some anomalies that were unjust in that regard.
However, Mr. Speaker, we are going to have a lot to say about the 2 per cent social development tax. For one thing, it is applied across the board. It does not matter whether one earns $3,500, $15,000 or $25,000, the rate is the same. As a matter of fact, for a person with a taxable income of $10,000 and who has a maximum ceiling of $120 per annum, the rate is much less than 2 per cent. So we see how this just society concept works in regard to this 2 per cent surtax. "It does not apply", says the Prime Minister.


Pierre Elliott Trudeau: No, I did not say that.


Marcel Joseph Aimé Lambert: The just society has gone out the window. We will also have to see what the public reaction is in the various provinces. This tax is to cover the cost of medicare. This is the first instalment; next year there will be another one, if medicare is continued in its present form. Many of the provinces have stated that they are not going to come into the scheme. We will have to see what this conference between the Prime Minister and the provincial premiers will bring about on the question of medicare.
I would suggest to the Prime Minister that there are sufficient people to make it renegotiable on terms set out by the federal government, because we know that the provinces do have the right and the responsibility for medical care. Those people who have participated in longer term employment contracts


-that is, negotiated contracts-and those under longer term insurance contracts for medical plans will all pay this additional tax. They are still caught by their contracts, so they are going to pay twice for the same service.
I think there could have been a much more effective way of dealing with this whole problem, Mr. Speaker. However I will reserve that for some further comments that I will have to make. You will understand, Mr. Speaker, that I too have fallen victim to a certain virus, and under the circumstances at the present time I would simply adjourn the debate.
On motion of Mr. Lambert the debate was adjourned.



BUSINESS OF THE HOUSE

Donald Stovel Macdonald: Mr. Speaker, under the circumstances I wonder whether we might call it ten o'clock and also suspend for this evening the proceedings under standing order 39A.
[DOT] (9:50 p.m.)


Gerald William Baldwin: Mr. Speaker, I wonder if the government house leader could give us some indication of the business for tomorrow and, after what we have heard, possibly give some ray of hope to our farmers by bringing forward farm legislation tomorrow.


Donald Stovel Macdonald: Yes, Mr. Speaker. The farm legislation will come forward just as soon as the Post Office Act is passed.


Mr. Speaker:: I understand the minister has also suggested that we suspend with proceedings under standing order 39A. I wonder if there is unanimous agreement on this point?


Robert Lorne Stanfield: One moment, please.


Mr. Speaker:: Order, please. There seems to be no unanimous agreement to suspending proceedings under standing order 39A.


John Howard Lundrigan: Mr. Speaker, I thought that, since certain questions asked of the Minister of Fisheries were not deemed to be urgent, there would be an opportunity to raise the matter again this evening.


Mr. Speaker:: I think I should bring to the attention of hon. members that apparently there is no unanimous agreement to suspending with proceedings under standing order 39A. I shall therefore put the question for adjournment, subject to the consideration of matters to be discussed under that standing order.
October 22, 1968



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Howard Lundrigan: Mr. Speaker, this afternoon I asked the Minister of Fisheries when he would make a statement to clear up a misunderstanding that has arisen on the east coast with respect to statements that have been made about territorial limits and fisheries policies. I was dissatisfied with the minister's reply. He said he would make a statement at some appropriate time. After tonight's budget speech I consider it most important to hear a statement from the minister, and I feel we cannot wait until later to get some response from him pertaining to Atlantic fisheries.
On September 16 the hon. member for South Shore (Mr. Crouse) asked the Minister of Fisheries when a statement would be made on this matter, and at that time he said it would be as soon as he got around to it. Those remarks are found at page 44 of Hansard. At page 48 of Hansard for the same date will be found the question I raised as to the abandonment of the salt rebate. The minister said that program had been abandoned because other programs were to replace the need for what were termed bandaid programs. We also heard quite a bit from the Minister of Defence Production (Mr. Jamieson), who is in the house with us again this evening. I welcome him back after his long absence. He said that in the fisheries generally we needed long term policies and programs. Nobody disagreed with that and on September 20 the minister indicated that a long term program would be announced shortly in the house.
Today when I raised the matter with the Minister of Fisheries he said that at the appropriate time a statement would be made.


Mr. Maclnnis (Cape Breton-East Richmond):: I rise on a question of privilege, Mr. Speaker. May I ask the Minister of Fisheries why Liberal members have all but withdrawn from the house at this time? I see only three Liberal members, including one minister, and there seems to be some activity behind the curtain.


Jay Waldo Monteith: Hear, hear.
Proceedings on Adjournment Motion


The Acting Speaker (Mr. Bechard):: Order, please. Hon. members must know that there cannot be any question of privilege during the late debate.


Donald MacInnis: With respect, on what rule is that decision based? Why can there be no question of privilege when the government withdraws its supporters from the house?


Raymond J. Perrault: There has been no such action by the government. I am a government supporter and no such instruction has been given.


The Acting Speaker (Mr. Bechard):: Order, please. It has been the practice of this house under the provisional rules not to have points of order raised during this debate.


Donald MacInnis: I wish to know why Liberal members sitting on both sides of the house have withdrawn from the house. There seems to be something deliberate about that.


Raymond J. Perrault: That is a false accusation.


Donald MacInnis: Then why are there only three members remaining?


The Acting Speaker (Mr. Bechard):: I point out to the hon. member that the question by the hon. member for Gander-Twillingate was to the Minister of Fisheries, and that minister is in the house. The hon. member for Gander-Twillingate.


John Howard Lundrigan: Mr. Speaker, the behaviour of government members this evening exemplifies the government's attitude towards the Atlantic fishery. The point I wish to make is that our Atlantic fishery, which is so important to the entire economy of Canada has been completely ignored by the present government. A number of hon. members have risen in this chamber on a number of occasions and directed questions to the government. Most hon. members from Newfoundland and most from the Atlantic region who have anything to do with fisheries have raised this matter in the house and been answered with laughter, with a shrugging of shoulders, and with the suggestion that the entire business of fisheries is to be taken as a joke. I say that unless the government takes a hard look at the Atlantic fishery hundreds of thousands of people in the Atlantic region will suffer, because we shall lose one of our basic industries in Canada.
Several hundred years ago the Europeans began developing our nation by exploiting the
October 22, 1968

Proceedings on Adjournment Motion Atlantic fishery. From 1867 until 1949, when we became part of Canada, we in our part of Atlantic Canada received more attention from European nations with respect to our Atlantic fishery than we have received from Canada. That is why I take exception to the minister's attitude that we must wait until tomorrow, next week or next year before we obtain some recognition of our problems. We have been disappointed by the government's response to our need, not because we think we are entitled to preferential treatment, but because we feel that the Atlantic fishery ought to be saved and ought to become a great contributing factor to the well-being of the entire Canadian economy.
In Boston last week the Minister of Fisheries indicated that the government would not continue to prop up the Atlantic fishery. We are not looking for handouts. The attitude in this country that a fishery is something to be subsidized, to be propped up as a second class, inferior industry has continued so long that we are almost ashamed to stand up and talk about the Atlantic fishery. That attitude is prevalent on the government side of the house.
By that I do not mean to criticize the minister. We have had conversations with him and are satisfied that he is taking the problem of the Atlantic fishery seriously.


Raymond J. Perrault: Hear, hear.


John Howard Lundrigan: But we are not so sure that that attitude is shared by his other colleagues on the government side.
I could become parochial and say that there are 25,000 fishermen in Newfoundland alone, to say nothing of the other fishermen in the rest of Atlantic Canada, who must receive government assistance or give up fishing. I am talking about professional fishermen who would find it difficult to enter other fields because fishing is their livelihood.
We feel there is something radically wrong when the ships of European countries can cross the Atlantic and exploit our fishing resources on our doorstep at a time when our entire fishing industry is in danger of failing. For those reasons I will not accept an answer from the minister tomorrow, next week or next year. We should like to hear an answer with respect to fishery policies now.
[DOT] (10:00 p.m.)


John (Jack) Davis: First, I should like to congratulate the hon. member upon the energetic way in which he

has put forward the case for a clear cut policy in the fisheries area. As a new minister, I have been impressed by the problems the industry faces. I have also been impressed by the amount of assistance the industry receives. I think this assistance is well placed, but it is considerable. For example, I find that the budget of the fisheries department is $50 million and that the gross value of the fisheries is of the order of $300 million. So the assistance actually amounts to about one dollar in six-in some areas it is substantially more than that. And when I say that the assistance given through the department 4s $50 million, I am not taking into account unemployment insurance payments, and so on. Obviously the government of the day is spending a good deal of the taxpayers' money in support of the fisheries. I think much of this money is well spent, particularly in the fields of conservation, research and the development of new plants and processes.
I would not like to leave the impression that the fisheries are uniformly in difficulty and throughout the Atlantic region. I think there is a great deal to be said in support of the contention that the fisheries are doing pretty well in 1968. Salt cod is an exception. However the federal government has taken the surplus from 1967, the carry-over from last year, and is considering what to do about selling cod produced in 1968. One of our problems concerns quality-our salt cod is not as acceptable to countries like Spain and Portugal as it was some years ago. We have to maintain quality as well as quantity if we are to regain our markets. My general expectation in connection with salt cod is that there will be as much marketed for a number of years to come as has been marketed in the past. But it is our job to make sure that we keep our share of the market, and quality is our problem here.
As to fresh and frozen fish, volume is up as compared with last year by about 24 per cent, that is, to the end of September. Volume in other words is up, while prices are being maintained to our fishermen. On this basis the incomes of fishermen must be higher this year than last year-and 1967 was a record year for Atlantic fishermen.
Thus, while the industry is encountering difficulties and is faced with declining markets, particularly in the United States, volumes are up and incomes are being maintained. I do not want to appear self-satisfied about this. We do need a fundamental policy; we need a policy which does not involve per-
October 22, 1968	COMMONS
petual support, and which will stand up against the criticism of importing countries such as the United States, which will raise its duties against us if we continue to subsidize any industry, and this includes the fisheries.



FISHERIES-INQUIRY AS TO DEFICIENCY PAYMENTS

Walter C. Carter: This afternoon I asked the Minister of Fisheries (Mr. Davis) whether he had any plan to help the Canadian commercial fishing industry to make a profit for the Canadian economy as a whole, and whether he now considered the industry to be a net burden on the Canadian economy. In Your Honour's wisdom, you ruled the question out of order, and in view of the urgency of the matter I asked that it be debated at this hour.
First, I should point out to the minister that every fresh fish company in Newfoundland this year, with one exception, lost money. One fresh fish company made money.
I should also point out to the minister that Newfoundland fishermen are now receiving exactly one half of what they received last year for their salt cod.
If he can get up in this house and say that the Atlantic coast fisheries are in good order, then I am afraid I cannot agree with him. As I said before, our fishermen are now receiving one half of what they received last year for their salt bulk fish. I might also inform the minister and this house that at present the Newfoundland fishermen have tens of thousands of salt fish in their possession and are unable to find buyers for them, even at the ridiculous prices that are being offered. I do not think this is indicative of a healthy fishing industry in the Atlantic provinces.
I have been in this house since September 12 and I do not mind saying I am getting a little sick of the attitude, by certain members of the government, with regard to the fishing industry in Newfoundland and in the Atlantic provinces generally. I agree with the previous speaker that the fact that only two or three government members have seen fit to remain in the house to hear us discuss this very important problem is indicative of their lack of interest in the fishing industry of this country. As a Newfoundlander I take strong exception to this. I take strong exception to the fact that government members have not seen fit to remain here and hear us speak of our problems.
DEBATES	1701
Proceedings on Adjournment Motion
I have talked to the secretary general of the Federation of Fishermen, P. J. Antle, who I am sure is known to the Minister of Fisheries and to my hon. friend, the Minister of Defence Production. I am told by Mr. Antle, who has a complete knowledge of the fishing industry in Newfoundland, that this will be the worst year yet for our fishermen since confederation. I am told by this gentleman that in the light of what has been happening in the past few years it will take a miracle to stave off disaster in the Newfoundland fishing industry.
The federal assistance that was granted earlier this year will only delay the execution. Many fish plants are still in grave danger of closing. The same situation will prevail next year. What it adds up to is that the government is pouring millions of dollars into a bottomless pit. If, sir, this assistance is discontinued, as I believe the minister suggested in a speech in Boston, many fish plants in Newfoundland will be forced to close operations, with the result that 70,000 Newfoundlanders, 70,000 fellow Canadians of flesh and blood, who have the same desire to keep body and soul together as do the wheat farmers, corn farmers and white collar workers- these 70,000 new Canadians and their dependants will have to apply for relief to keep body and soul together. This is a sad commentary on Liberalism and on the federal government.


Donald Campbell Jamieson: Would the hon. gentleman permit a question?


The Acting Speaker (Mr. Bechard):: Order.


Walter C. Carter: It is obvious that in the fishing industry in Newfoundland and the Atlantic provinces generally we have reached a dead end. I have seen this in a large part of my riding. As the minister knows, fishing is most important to it. I have seen men come in from a day's fishing on the fishing grounds where they face the perils of the north Atlantic. Theirs is not an easy job; it is not a white collar job by any means. It takes guts, bravery and initiative to be a fisherman. I have seen these men come in with nothing, after being out on the fishing grounds for seven or eight hours. I do not think it is right that these people should have to go through these experiences. They are flesh and blood. They are entitled to their place in the sun and to their share of the so-called affluent society that we now boast of in Canada.
1702	COMMONS
Proceedings on Adjournment Motion
[DOT] (10:10 p.m.)
I do not understand how Canada can boast of having a flourishing economy and a good society when a large number of our people-a large number of my people-are forced to suffer these hardships and the insecurity they must suffer because of the state of the fisheries. I am not wishing to make this into a political move on my part, but I would ask the Minister of Fisheries in all sincerity that he and the government take a stand on the Newfoundland fishery and the Atlantic coast fishery in general. I think our fishermen deserve this. I believe they should have it.


John (Jack) Davis: Mr. Speaker, I do not doubt the sincerity of the hon. member when he says that this year was the worst year for the fishermen in Newfoundland since Confederation. However, I do not agree with his statement. I would say that there are problems and there certainly is a problem in the salt cod fishery as he has stated.
As 1 said before the main problem is marketing. It is partly a problem of quality. The total demand for salt cod around the world is unabated; it has not been declining. We are not witnessing a long term decline in the quantity of salt cod demanded by offshore markets. But here is an industry, principally in Newfoundland, which is dependant on an offshore market, and an offshore market which is seriously affected by devaluation. Prices have dropped as a result of devaluation.
I also understand that in some countries like Norway there has been more diversion of cod from fresh and frozen products to salt cod production and, therefore, to the salt cod market. These countries have been picking off many of the top grade, high quality, top price markets, particularly in western Europe. I mentioned Portugal and Spain earlier. These are examples.
We have a marketing problem. We certainly have a price problem and a quality problem. This spring the federal government moved to reduce the problem by taking off the hands of the trade about 20 per cent of last year's record production. There was a remarkable production in 1967, and there was roughly a 20 per cent carryover last May. That has subsequently been picked up; $2 million was set aside for this purpose. Only $1-| million worth was left. This was taken off the market and some of it is on its way to Biafra.

DEBATES	October 22, 1968
A long term policy, not a stop gap policy, is requested. I know there are continuing needs in Biafra and in other parts of the world. The protein content in dried salted cod is high. Salt cod is in demand because it is most acceptable from a food aid point of view. So, perhaps we can count on food aid programs to take some of our surplus off the market. This is a stop gap solution, and not a long term solution to the problem. I think that the members of the opposition, certainly the six members from Newfoundland, should also get together and give some thought as to how this problem might be solved on a long term basis.
I believe the problem is largely one of quality. Personally I think we must do something about marketing in a more concerted way.


The Acting Speaker (Mr. Bechard):: Order. [Translation]



HEALTH AND WELFARE-ALCOHOLISM-FEDERAL PARTICIPATION IN STUDIES

André-Gilles Fortin: Mr. Speaker, I recently directed to the Minister of National Health and Welfare the following question;
Can he tell us whether any division of his department is considering now or will consider in the near future the possible participation of the federal government, at the information level, in the serious problem of alcoholism in Canada?
Mr. Speaker, it is not my intention, in raising this matter tonight, to criticize the government concerning alcoholism. I merely want to draw the minister's attention to this serious problem which is nation-wide but has never received a nation-wide solution. I am not asking for a statement justifying the past inaction of the government in that field, but rather an undertaking that in the future, some branch or other of his department will consider the possibility of providing some assistance.
Mr. Speaker, alcoholism is an acute social problem. It entails a considerable waste of money, it brings about a great number of industrial accidents and traffic casualties, if gives rise to many family conflicts and quarrels between husband and wife and is often the source of juvenile delinquency. This evil affects every area of the country and all classes of society. It is widespread, since the present number of alcoholics has been estimated at more than 250,000 in Canada.
October 22, 1968

In addition, it must be kept in mind that according to the experts in that field, every alcoholic does harm an average of five persons around him. If one multiplies by 5 the 250,000 alcoholics found in Canada one gets some idea of the extent of alcoholism now considered a national scourge.
Alcoholism is the only evil which harms man both spiritually and bodily. A man who, after over-indulging in liquor for a certain period of time, finally becomes enslaved to the habit, deteriorates in every way, physically. psychologically, socially and morally. His health is more or less ruined, his psychological resistance weakened to the point where he is no longer able to assume the smallest responsibility. He has gradually isolated himself from his surroundings.
From another point of view, Mr. Speaker, we see the federal government, like other governments, drawing a great deal of money from the sale of liquor in Canada. For example, an article published in Le Devoir on October 17, 1968, said:
The beer industry-
This only concerns beer, not wine or liquor.
-has paid close to $250 million in taxes.
In 1966, the hon. member for New Westminster (Mr. Mather) asked the Minister of National Health and Welfare whether the federal government had spent money to fight alcoholism in Canada. As shown on page 3047 of Hansard for March 23, 1966, the minister answered as follows:
In so far as the Department of National Health and welfare is concerned, expenditure on promotion of temperance and supporting antialcoholic programs was nil.
Mr. Speaker, the dangers of alcoholism in Canada are constant and increasing, for there are, as I said earlier, about 250,000 alcoholics in Canada, not counting about 235,000 heavy drinkers.
[DOT] (10:20 p.m.)
I ask the Minister of National Health and Welfare if he plans to launch a federal campaign on education or an information campaign on temperance and the dangers of alcoholism?
Mr. Speaker, I feel that we should assume our responsibilities in that field. Not that I am blaming the present Minister of National Health and Welfare. I know he is a responsible man and I want to congratulate him on his work. But I would like him to do everything in his power to urge the provincial
Proceedings on Adjournment Motion governments to co-operate with the federal government in finding a solution, not merely a partial but a national overall solution, to fight efficiently the excessive use of alcohol.
Mr. Speaker, has any organization concerned with alcoholics made any similar request to the government? There again, I do not ask the minister to give me an immediate reply. I merely ask him to look into the matter thoroughly and encourage the members to develop an interest in it.
Is there a division within the Department of National Health and Welfare which deals with the causes or effects, or both, of alcoholism? If not, as I suspect, will there be in the near future? Does the government consider that the present number of alcoholics is a cause for alarm? There is another question we must look into. We must take a closer look-and I suggest this is urgent, Mr. Speaker, at the definite relationship between the rate of criminality, especially among young people, in Canada and the rate of alcohol consumption, as the two ills have the same cause. I have met several experts on the matter with whom I have had the opportunity of going into the question. I was able to ascertain there does exist a close relationship between the increase in the amount of alcohol imbibed and the growing rate of criminality in Canada.
I therefore think that it is up to the government, in order to tackle seriously the problem of juvenile delinquency in Canada, to protect Canadian consumers against a blatant publicity more or less organized. If the government takes to heart the well being of the population of Canada, I think it should include in its program, in co-operation with the provinces, an information system set on a national scale forewarning people of the damages alcoholism can bring to society and to individuals.


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, there is no question but that the observations of the hon. member for Lotbiniere with reference to how serious the problem of alcoholism is are quite correct. As the hon. member knows, we do support the provinces in the general health area through health grants, which in the past have totalled some $40 million a year. I think that to some degree this should enable the provinces to do more work in this particular area. I know also that not only are some provincial governments looking into this
October 22, 1968

Proceedings on Adjournment Motion problem

and they too receive considerable revenue from the sale of liquor-but that many municipalities and other organizations are contributing to the efforts necessary to combat excessive alcoholism.
The degree to which the federal government can support this fight at the national level is questionable, in view of the priorities we already have. Certainly within our own department I refer to such problems as the dangers of smoking, drug abuse and many others. At this time I do not foresee that over the span of the next year we will be able to expend considerable sums of money to begin a promotional and educational program of the magnitude necessary to have any real impact in this area. This may be regrettable, but unfortunately it seems to be the case. In no way does it indicate that we in the department do not regard the problem with the degree of seriousness that the hon. member does. We do; we think it is a very serious problem indeed. We hope that later on we
will be able to get together with the provinces on this question and perhaps make a more meaningful contribution toward combating excessive alcoholism.
Apart from the contributions I have mentioned in the way of health grants, which I quite agree do not specifically go toward combating alcoholism, we have recently contributed $15,000-which I agree is a very small sum indeed-toward the administration and maintenance of the principal organization in the country that is combating alcoholism. This year they have requested an additional $10,000, a request which we have under consideration at the present time.


The Acting Speaker (Mr. Bechard):: Order. Pursuant to provisional standing order 39A the motion to adjourn the house is now deemed to have been adopted. Accordingly this house stands adjourned until 2.30 p.m. tomorrow.
Motion agreed to and the house adjourned at 10.25 p.m.
October 22, 1968

House of Commons CANADA