1968-02-06

EMERGENCY MEASURES ORGANIZATION


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I would like to make a statement regarding the current position of the government in relation to the national civil emergency measures program. My reason for doing so is to clarify a number of misconceptions which have been reported to me to be arising across Canada in the minds of the public, and in the government sector as well, following the general statement made in the house by my colleague the President of the Treasury Board (Mr. Benson), on December 7, 1967, with regard to government proposals to reduce spending in this particular area.
Since that statement the government has approved a series of recommendations arising out of a detailed study by the Canada Emergency Measures Organization. The study took into consideration intelligence regarding the threat, recent developments in scientific and technical knowledge of nuclear hazards, and the desirability of reducing federal government expenditures.
The government will continue to support this important work but with a reduced budget, a streamlined organization and improved national management and co-ordination. Greater emphasis will be placed upon the acceptance by governments at all levels of civil emergency planning as a part of day to day government activity, and even greater reliance will be placed upon the capacity of existing government services to expand and to deal with a war emergency. This is a change from former concepts which envisaged the training of large groups of volunteers as civil defence workers.
While it is the government's purpose to reduce recurring administrative and maintenance costs, it is not proposed to proceed with the wholesale dismantling of existing facilities. Major systems such as the emergency broadcasting capacity and emergency government operating centres which have been
27053-404J
developed over the past several years will be maintained, in a reduced state but in a condition that will allow their activation in short order in the event of a crisis.
Training will be limited to the necessary instruction required by officials, professionals and specialists who have been assigned to wartime responsibilities in shadow organizations.
The value of many civil emergency measures for war in peacetime disaster situation has been effectively demonstrated in Canada time and time again. While the federal government does not support emergency measures which are designed solely to meet a peacetime disaster, nevertheless it is accepted that the wartime measures we develop or assist to develop will be used to their full potential in peacetime disaster situations. Many provinces and municipalities have chosen in the past, and propose to continue in the future, to augment wartime emergency capacities with peacetime emergency programming funded entirely by themselves. The Canada Emergency Measures Organization itself has been charged by government to co-ordinate the initial federal response to any peacetime disaster situation which affects the federal government directly or in which the federal government is involved by provincial invitation, and will continue to meet that responsibility.
I have communicated the substance of our new approach to the provincial ministers responsible for civil emergency planning, together with estimates of the reduced federal financial support which will be available to assist provinces and municipalities in their emergency measures programs. Officials of the Canada Emergency Measures Organization met last week with the senior provincial officials involved from all provinces and have agreed upon the methods to be used to reduce spending in this field which at the same time will enable Canada to retain a viable national program of plans and emergency measures systems capable of rapid expansion to meet the possibility of a war which we hope will never occur.
6406	COMMONS
Emergency Measures Organization [DOT] (2:40 p.m.)


Hon. D. S. Harkness (Calgary North):: think we would all agree with the last sentence in the minister's statement, that the emergency measures organization was designed to meet conditions which might arise in the event of a war which we all hope will never occur.
I believe it has been apparent for the past two or three years that the government has been anything but enthusiastic as far as the emergency measures organization is concerned, and that it has been loath to co-operate with those provinces which have felt a real need for emergency measures operations within their jurisdictions. Now apparently it intends to withdraw a considerable proportion of the funds which in the past it has put up on a cost sharing basis with the provinces and the municipalities within them.
In my personal view this is a matter for considerable regret, bearing in mind particularly that some of the provinces have felt there was a real need for the emergency measures organization. I hope the announcement does not mean that the basic federal emergency measures organization is in effect to disappear. The hon. gentleman indicated that a good deal of the support previously afforded the emergency measures organization was being withdrawn but that viable emergency measures systems would continue. In other words, on one hand we are told that the organization is to disappear and on the other we are assured it will continue. I hope the minister actually means that the basic organization will continue to exist in an effective form.


Mr. T. C. Douglas (Burnaby-Coquiliam):: The effect of the minister's statement is that substantial reductions are to take place in the emergency measures program. I presume that if cuts in expenditures have to be made, this is one of the areas in which they could be undertaken.
However, I should like to say that I hope these cuts will not be made in such a way as to adversely affect the training of civil defence workers in specialized categories. I believe there is a great deal of support for the minister's contention that much of this civil defence work can be done by existing government services. But within these services, in the provinces and in the municipalities, there is much to be said for programs of special training.
I hope also that the government will not lose sight of the value of training federal,

DEBATES	February 6. 19S8
provincial and municipal defence workers to meet civil disasters, bearing in mind that the organization is being used increasingly for this purpose. We have suffered many times from disasters of various sorts, including flooding of the kind now being experienced in Ontario; and usually when they occur we throw some makeshift organizations into being to deal with them. An organization which could be made operative within a matter of hours through federal, provincial and municipal co-operation to meet civil disasters is something at which we in Canada should aim.
The minister told us he was making this statement because some misconceptions had arisen with respect to the emergency measures program. I hope the minister will make a statement to the house fairly soon with reference to the Canada-United States agreement on emergency measures. There has been a good deal of misunderstanding and I think some misgivings about an agreement that refers to control of manpower and personnel, and about economic controls and economic priorities. If other members have been receiving letters as I have about the interpretation which people have put on this United States-Canada agreement on emergency measures, then I think some statement from the minister would be most appropriate fairly soon.


Mr. Gerard Laprise (Chapleau):: Mr. Speaker, we listened very carefully to the statement made by the hon. minister with reference to his intention to reduce the funds allocated to emergency measures.
I hope, like the hon. members who spoke before me, that those cut-backs will not affect the studies or the training of civil protection staff. I know that, in a town near Ottawa, courses are given at the present time to the benefit of the mayors of municipalities, and some mayors in the province of Quebec attend those courses. I should like to see the number of civil defence schools, whose purpose is to help fight against disasters always possible in peacetime, not only maintained but increased, so that the province of Quebec too, would have a civil defence school.
I know that lately the secretary of the province met with the hon. minister. The minister said that no agreement had been reached with regard to the institution of a school in the province of Quebec, but he did not say whether or not negotiations were in
February 6, 19S8	COMMONS
progress. However, I hope that they will continue between the federal and Quebec governments so that such schools may be established in Quebec with a view to training some people to fight against disasters which may occur anywhere in our communities.


Mr. Howard Johnston (Okanagan-Revel-sloke):: Mr. Speaker, I listened with some interest to this page and a half of euphemisms which suggest that something that is being scrapped is not being scrapped at all. We might have wondered why cuts were being made with respect to the national civil emergency program. It was because the Minister of Finance and the Minister of National Revenue felt that any cuts made in that program would be almost invisible. If a poll had been taken on the streets it is likely that the result would have shown that people did not know what the national civil emergency organization had been doing recently, and thus the ministers assumed they could eliminate this program.
The timing is rather startling. This announcement comes when the federal government is reasserting its concern about many areas in the Canadian governmental structure, defence being one, and so it is surprising to find that civil defence can be let go so lightly. Recent developments in technical knowledge of nuclear hazards are such as to make anyone throw up his hands in horror; none the less there is much that can be done in the area of civil defence to combat those hazards.
So far as the suggestion is concerned that municipalities across the country will take up some of the slack, I would ask where we can find any municipality that would have any source of funds whatsoever for this sort of purpose, considering the financial strain the municipal level of government is under right across our country.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. J. W. Monieilh (Perth):: Mr. Speaker, may I ask a question of the Minister of Finance. Can he tell us when he contemplates presenting the final supplementary estimates to the house?


Hon. E. J. Benson (President of the Treasury Board):: Mr. Speaker, it is the pres-
DEBATES	6407
Inquiries of the Ministry ent intention to present both the final supplementary estimates and the main estimates for 1968-69 on Monday next.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources or, if he is not the proper person, to the Minister of National Defence. It has to do with the crash of the United States plane near Thule, Greenland a short time ago. I should like to ask whether reports are correct that a team from Atomic Energy of Canada Limited was sent to the site to make a report. If this is correct, has a report been made.


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Unless the Minister of National Defence can answer, I am afraid I will have to take the question as notice.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the Minister of National Defence whether any committee, delegation or team was sent from his department to the site of the crash near Greenland?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, I will have to take the same position as the Minister of Energy, Mines and Resources. I shall take the question as notice.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Gérard Laprise: Mr. Speaker, I intended to put a question to the hon. Minister of National Health and Welfare but, in his absence, I shall put it to his parliamentary secretary.
Numerous complaints have reached us to the effect that some old people did not receive, in January, the guaranteed income supplement to which they are entitled. Can the parliamentary secretary tell us if steps have been taken to pay this supplement in the near future?


Mrs. Margaret Rideout (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I certainly will check into this and report to the hon. member.

February 6, 1968
Inquiries of the Ministry COMMONWEALTH RELATIONS



INQUIRY AS TO MEETING OF PRIME MINISTERS

[Stage Direction]
On the orders of the day:
Mr. Howard  Johnslon@Okanagan-Revel-sioke: Mr. Speaker, my question is for the Acting Prime Minister. In view of reports that the Commonwealth Secretary General in his talks with the Prime Minister of the United Kingdom strongly advocated a 1968 commonwealth prime ministers' conference, I wonder whether the government has made any statement or expressed an opinion in that regard.


Hon. Paul Hellyer (Minister of Transport):: Mr. Speaker, I am afraid I will have to take this question as notice. I have not seen the telegrams on this subject and therefore am unable to report to the house.



POLLUTION


[Stage Direction]
On the orders of the day:
Mr. P. B. Rynard (Simcoe East):: Mr. Speaker, I should like to direct this question to the Minister of Finance. In view of the galloping increase in air pollution and the recognition by the minister of the situation in respect of water pollution by extending the accelerated 50 per cent cost allowance to January 1, 1970, will the minister now give serious consideration to the equally serious effects of air pollution by applying the same income tax cost allowance to expenditures made by industry in overcoming air pollution?


Hon. Milchell Sharp (Minisler of Finance):: Mr. Speaker, similar questions were asked some time ago on this subject and I gave an answer at that time. The most general answer I can give at this time is that the matter is under consideration.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Sfarr (Ontario):: Mr. Speaker, I wish to address this question to the parliamentary secretary to the Minister of Labour. I should like to ask whether the government is about to launch a probe into the Montreal waterfront pilferage, as reported in the press, and when a judge will be named to head the investigation.


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, when the terms of reference are completed in respect of such a commission and when a suitable judge is appointed I am sure the minister will make a statement in the house.
I may point out to the hon. member that the intention to establish the commission was announced last July when we were discussing labour unrest on the waterfront. The minister announced at that time that he would set up a commission with two mandates, or in effect two commissions. One became the Picard commission, which tied in job security with increased productivity. The second phase of the commission's role would be to investigate the causes of unusual labour unrest on the waterfront.
I should like to rephrase what I said about a suitable judge. I meant a judge who would be free at this time in view of the very heavy load with which judges in the province of Quebec are faced.


Mr. Ricard:: This is the answer to my supplementary question.


Michael Starr: Mr. Speaker, can the parliamentary secretary inform the house whether the inquiry is based on the promise of the Minister of Labour to the shipping federation that if settlement was made in respect of wage increases and job security, such a probe would be launched?


Mr. Speaker:: Order, please. I do not think this question is in order.



PROPOSED U.S. RESTRICTIONS ON WOOD PRODUCTS IMPORTS

[Stage Direction]
On the orders of the day:
Jean-Luc Pepin: Mr. Speaker, yesterday the hon. member for Vancouver East referred to recent reports that a United States government committee is recommending a reduction in imports of wood products from Canada. The Department of Trade and Commerce has looked into this. It would appear that the hon. member for Vancouver East may be referring to a recent staff report by the United States treasury department. This report suggests a number of measures to improve the availability of logs for local processing in the United States Pacific northwest. These suggested measures do not include restrictions on imports of forest products. The
February 6, 1968

report recommends revision of United States forest management policies, amendments to United States coastal shipping laws, etc.
The Department of Trade and Commerce is actively studying the possible implications' for Canadian exports.



SEARCH AND RESCUE


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to direct a question to the Acting Prime Minister, the Minister of Transport, following the question I asked on January 25. Has the minister any further information to give the house regarding regulations that would require private aircraft to carry rescue beacon transmitters?


Paul Theodore Hellyer: Yes, Mr. Speaker. The department has advised that devices of this type are mandatory installations on aircraft operating in northern Canada and in isolated areas. The Department of Transport tries to encourage the installation of SARA beacons in all aircraft, but has not made their installation mandatory. The industry also favours their installation but has been looking to the government for some subsidization on the cost of installation. To date the department has not been in a position to recommend this.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbilt (Oxford):: Mr. Speaker, I should like to ask the Acting Secretary of State for External Affairs whether he is now in a position to answer the question asked yesterday by the hon. member for Ontario concerning Canada's role on the international control commission on Viet Nam. Yesterday the minister took notice of this question.


Charles Mills (Bud) Drury: Yes, Mr. Speaker. The hon. member for Ontario asked a series of questions regarding the current situation in Viet Nam and the Canadian government's position in that regard.
Let me first say and emphasize that his concerns are fully shared by the government. We have been following recent developments in Viet Nam with close attention on the basis of reports from our representatives in Viet Nam, in Washington and elsewhere. In the
Inquiries of the Ministry past few days our main and immediate concern has been the safety of Canadians in Viet Nam. We have neither planned nor been asked to undertake any new or different role as a result of recent events, the military and diplomatic significance of which it may take some time to assess.
As far as Canada's membership in the international control commission is concerned, the Secretary of State for External Affairs has on many occasions, both in the house and elsewhere, mentioned the concerns and frustrations we Canadians, no less than the military and civilian individuals who have served with the commission, have experienced in a very difficult assignment. At the same time the house will wish to bear in mind the fact that the international control commission is the one surviving institution formally provided for in the 1954 agreement to which both sides to the conflict maintain they would be prepared to return. This may provide in due course a basis for a new settlement.
In formulating the government's policies over the past two or three years, all these considerations have been taken into account and we cannot yet see any reason for changing them, dramatic and tragic though the events of the past few days may have been.


Wallace Bickford (Wally) Nesbitt: In view of the answer of the minister and his observation that the government is particularly concerned with the safety of Canadians in Viet Nam, can the minister tell us whether any Canadians have actually lost their lives in Viet Nam during the events of the last week?


Charles Mills (Bud) Drury: Mr. Speaker, as I think the house will recognize, communications particularly with outlying districts beyond Saigon and the principal centres have been very difficult indeed. We have been able to confirm the continuing safety of a great many Canadians, particularly those connected with the international control commission, but the safety of the remainder is still unknown. We have yet no information which would indicate that any Canadians have been killed.


[Stage Direction]
On the orders of the day:
Mr. R. D. McLelland (Roselown-Biggar):: Mr. Speaker, on January 31 I directed a question to the Prime Minister requesting information as to the final wheat payments for the

February 6, 1968
Inquiries of the Ministry 1966-67 crop year. At that time the Prime Minister said he would make inquiries. In the absence of the Prime Minister and the Minister of Trade and Commerce, and in view of the necessity of the farmers receiving their final settlement, could the Acting Prime Minister or a member on the treasury benches give me a reply today?


Jean-Luc Pepin: Mr. Speaker, I had a long prepared answer to this question yesterday, but it was not asked. I have left it in my office. The short answer is that the Minister of Trade and Commerce would like to repeat what he has already said to the house, that he will get this information from the wheat board in the first quarter of 1968. He has not got it yet.


[Stage Direction]
On the orders of the day:
Hon. E. D. Fullon (Kamloops):: Mr. Speaker, can the Minister of Transport advise the house whether a decision has yet been made as to the port through which the coal shipments to Japan will move? Is it to be Roberts Bank or Vancouver?


Paul Theodore Hellyer: Mr. Speaker, the general plan is that they will be moved over the new port facility at Roberts Bank. With regard to shipments before the contract which has already been announced is in effect, they will probably be moved through the port of Vancouver on an interim basis.


Edmund Davie Fulton: A supplementary question, Mr. Speaker. In the light of the questions asked and replies given yesterday, can the minister tell us whether in connection with this contract the authority to decide the route of shipments, as far as the railway that will be used is concerned, rests with the government of Canada or the government of British Columbia?


Paul Theodore Hellyer: Mr. Speaker, my hon. friend is a member learned in the law. There are, I think, restrictions which could be applied by either side. I hope we will reach an agreement with all the parties concerned which will ensure that the all-Canadian route will be chosen, because we believe this is in the best interests of the Canadian taxpayers.


Mr. G. L. Chaflerion (Esquimall-Saanich):: A supplementary question, Mr. Speaker. I ask

the minister, is it the intention of the federal government to contribute toward the construction of the facilities at Roberts Bank?


Paul Theodore Hellyer: Yes, very definitely, Mr. Speaker. It would be our intention to build the port facilities and then to co-operate with the provincial government in respect of the other developments necessary to begin a deep sea port facility there.


Mr. R. W. Priffie (Burnaby-Richmond):: Mr. Speaker, this question is related. Roberts Bank is in my constituency. Has general agreement been reached between the Department of Transport and the provincial government as to the phasing and financing of this new port at Roberts Bank?


Paul Theodore Hellyer: Not yet, Mr. Speaker. I will be meeting with the premier of British Columbia later today, and I hope that following this meeting the officials of the two governments can meet and work out the details involved in the development of the port and related facilities.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. John Loney (Bruce):: Mr. Speaker, my question is to the Acting Minister of Indian Affairs and Northern Development. Will the minister investigate the announcement that the proposed separate school accommodation project at Cape Croker Indian reserve has been cancelled, and will the minister take the necessary action to have his officials reconsider this decision?


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



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the Minister of Transport. In view of the concern of many shop workers of the Canadian Pacific Railway over the danger of a lay-off at Easter similar to the one that took place last Christmas, will the minister take up this matter with the management of Canadian Pacific Railway in an effort to head it off before it takes place?
February 6, 1968


Paul Theodore Hellyer: I will certainly be glad to pass on the hon. gentleman's representations to the railway.



INDUSTRY


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I wish to address a question to the Minister of Industry. Can the minister advise us when he expects the review of the auto pact by the governments of Canada and the United States to be completed; and when it is, will he be making a report to parliament and will parliament be given an opportunity to discuss that report?


Charles Mills (Bud) Drury: Mr. Speaker, the review is under way at the official level. I would hesitate to forecast a date for its completion. When it is completed I can assure the house that a report will be made on the outcome of the review.


Michael Starr: A supplementary question, Mr. Speaker. Will parliament have a chance to discuss this report? Will time be set aside in one way or another so we may discuss the report?


Charles Mills (Bud) Drury: Mr. Speaker, that is for the house to decide rather than for me personally. I will make available the information, and the house can then decide what it wishes to do with it.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Charles Mills (Bud) Drury: Mr. Speaker, yesterday the hon. member for Winnipeg North Centre inquired about Canadian representation on the United Nations commission on the status of women. I am not sure whether the hon. gentleman is aware that Canada is not a member of this particular commission and consequently, not having membership, has no right to representation. We do, however, take a continuing interest in its work through Miss Fletcher, who is a member of the Canadian delegation to the United Nations.
Inquiries of the Ministry TRANSPORTATION



CONSIDERATION BY HOUSE COMMITTEE OF PROBLEMS OF ATLANTIC PROVINCES

[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I have a question for the Minister of Transport. It relates to the proposed visit to the Atlantic provinces of the standing committee on transport and communications. There is some concern over the possibility of this session proroguing during the period of the committee's work. Can the minister give an assurance that this important work will be allowed to continue until recommendations can be placed before the government regarding the problems the committee will study?


Paul Theodore Hellyer: Mr. Speaker, I think I should study that question before replying to it. If the committee were to return with the kind of precise information and recommendations which were so clear and unequivocal that it would be possible to introduce legislation immediately, this of course could be considered at once by the government. In any event, I hope their recommendations will be beneficial to the Atlantic provinces and will contain some advice to the government upon which legislation can be introduced, perhaps if not during this session then early in the next session.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. William Skoreyko (Edmonton East):: Mr. Speaker, my question is directed to the Minister of National Defence. Has the minister received a communication from any of the officials of the city of Edmonton, or from interested parties in that area, regarding the phasing out of the municipal airport in the city of Edmonton, and has he been asked to make available to that city the facilities at Namao for industrial use?


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



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. Ed. Schreyer (Springfield):: Mr. Speaker, my question is directed to the Minister of

February 6, 1968
Inquiries of the Ministry Transport. Yesterday the minister was asked whether any agreement had yet been reached with Air Canada whereby that corporation would discontinue its present practice of transferring employees out of Winnipeg. The minister gave us to understand that no such agreement had been reached but that it was a matter of negotiation between the unions and the corporation. My question is, does the minister want us to understand that he feels this is exclusively a matter of negotiation between the two parties, or does he intend to remain involved in the matter in question?


Mr. Speaker:: Order, please. I would think the question as asked is an argument. In this form it is not acceptable.


Edward Richard Schreyer: Mr. Speaker, may I rephrase my question. With regard to the present practice of Air Canada whereby it is transferring employees out of Winnipeg, can the minister say whether he intends to remain involved in that particular problem?


Paul Theodore Hellyer: Mr. Speaker, I am very much involved, but my involvement is circumscribed by the fact that there is a contract between the two parties. This was the reason for the answer I gave in reply to the question asked yesterday.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Halifax):: Mr. Speaker,
I should like to direct a question to the Minister of Transport. Can the minister advise the house the nature of the discussions held this morning with officials of the city of Halifax, if indeed it is proper to do so at this stage?


Paul Theodore Hellyer: I think my hon. friend is referring to a proposed meeting with the premier of the province of Nova Scotia.


J. Michael Forrestall: No; with the mayor of the city of Halifax and representatives of the port's industrial commission.


Paul Theodore Hellyer: I do not think I can answer the hon. member's question. There has been no such meeting with me in any event.



AGRICULTURE


[Stage Direction]
On the orders of the day:
J.-H.-Théogène Ricard: Mr. Speaker, I should like to put a

question to the parliamentary secretary to the Minister of Agriculture.
Last Wednesday the parliamentary secretary undertook to refer to the standing committee on agriculture, forestry and rural development the notice of motion I introduced to provide for increased compensation for the cattle slaughtered under the Animal Contagious Diseases Act.
Could he tell me when he will take the required steps in order to carry out his commitment?


Mr. Bruce S. Beer (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, this matter is in hand and will be brought to the attention of the house.



COMMUNICATIONS


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to direct a question to the Minister of Transport. In view of the fact that last year the Prime Minister said the question of reaching international agreement regarding a space for a communications satellite for Canada had been referred to the Minister of Transport-and I understood the present minister's predecessor was looking into the matter-can the minister tell us what progress is being made, whether an allocation has been made for Canada, and if not how soon can we expect some allocation?


Mr. Speaker:: Order, please. I wonder if this type of question should be asked at this time. The hon. member has referred to a question which was asked practically a year ago. I would not think there is sufficient urgency to justify asking such a question at this time.


Thomas Clement (Tommy) Douglas: On a point of order, Mr. Speaker. There is a great deal of urgency. It is true this question has been asked of the government for some time now, but the fact is that at present only some eight or ten slots are left and unless Canada gets one we may be completely shut out of the satellite telecommunications field. If the minister cannot give us an answer we shall have to invoke standing order 26, or deal with it in some other way so as to find out what the government intends to do about this matter.
February 6, 1968


Mr. E. Nasserden (Rosthern):: Mr. Speaker, my question, which is directed to the Acting Prime Minister, is supplementary to the one asked by the hon. member for Burnaby-Coquitlam. Can the minister tell us whether he has been able to get his campaign into orbit?


Thomas Clement (Tommy) Douglas: May I ask the Minister of Transport whether he will give consideration to making a statement on motions at an early date regarding the allocation of space for Canada for the purpose of putting a communications satellite into orbit.


Paul Theodore Hellyer: There have been negotiations in respect of this question. I can assure my hon. friend that the government has already indicated very clearly that it intends to reserve a position in space for the Canadian satellite system. However, the responsibility for this project has now been transferred to the Prime Minister and the science secretariat. In the interim the science secretariat reports to the Minister of Industry, who perhaps may wish to add something to what I have said or to give a further report to the house in the very near future.


Thomas Clement (Tommy) Douglas: I have a supplementary question, Mr. Speaker. May I ask the Minister of Industry whether we can expect an early announcement regarding the allocation of space for a Canadian satellite system.


Charles Mills (Bud) Drury: am not sure hon. members can expect an early announcement of an allocation of space. The necessary steps to secure such an allocation have already been taken and are being pressed. I hope that in the not too distant future the government will be in a position to make a rather more formal and general statement regarding a Canadian satellite system.


Thomas Clement (Tommy) Douglas: May I ask the minister when the application was formally made?


Charles Mills (Bud) Drury: Certain preparatory steps have to be taken before a formal application is made, and a formal application has not yet been made.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. L. R. Sherman (Winnipeg South):: Mr. Speaker, my question is for the Minister of
Inquiries of the Ministry Transport. Will the new cross-Canada rights granted to Canadian Pacific Airlines and now being exercised extend to include the right to fly into and out of the nation's capital?


Paul Theodore Hellyer: Mr. Speaker, if my memory serves me correctly Canadian Pacific Airlines have made an application to the Canadian Transport Commission and hearings have been scheduled in order to determine whether at a subsequent time permission will be granted to service Ottawa and certain other cities.


Wallace Bickford (Wally) Nesbitt: I have a supplementary question, Mr. Speaker. Is the minister in a position to report to the house now whether Canadian Pacific Airlines are permitted to land in the Netherlands, in view of the fact that K.L.M. is not permitted now to land in Toronto?


Paul Theodore Hellyer: Not at this moment, Mr. Speaker.



EMERGENCY MEASURES ORGANIZATION


[Stage Direction]
On the orders of the day:
Gérard Laprise: Mr. Speaker, I wish to put a question to the Minister of Industry and Minister of Defence Production.
Could the minister inform the house whether there will be other discussions with the secretary of the province of Quebec concerning the establishment of a civil defence school in that province, and also whether the funds generally allocated to these civil defence schools will be maintained at the same level in the next fiscal year?


Mr. Speaker:: I would suggest to the hon. member that this question be put on the order paper.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I have a question for the President of the Treasury Board. Is the minister now in a position to answer my question

February 6, 1968
Excise Tax Act
of last Friday concerning collective bargaining for the employees of the Senate, the House of Commons and the Library of Parliament?


Edgar John Benson: No, Mr. Speaker, I am not, and will not be able to answer this question until I have had an opportunity to speak to Your Honour and to the commissioners of the internal economy commission.


Stanley Howard Knowles: Will that meeting be held fairly soon, Mr. Speaker?


Edgar John Benson: The commissioners meet very frequently to look after the interests of all members of the house.



EXCISE TAX ACT

[Stage Direction]
The house resumed, from Monday, February 5, consideration in committee of Bill No. C-191, to amend the Excise Tax Act-Mr. Sharp-Mr. Batten in the chair.
The Chairman:: When the committee rose last evening clause 11 was under discussion.
On clause 11:


Mitchell William Sharp: Mr. Chairman, as you said, when the house rose last night we were on clause 11 of this bill. I have now had an opportunity of looking into the matter raised by the hon. member for Swift Current-Maple Creek and others. Perhaps I may give an explanation of the position. There is some history of representations on this matter, but I can confirm that most of them are rather out-dated. Apart from occasional references in the House of Commons I cannot find in my files any great number of representations since 1963 or 1964. However, I know the problem has been there, and I will give a short explanation of the root of the difficulty.
The Excise Tax Act provides exemption from sales tax for a comprehensive list of machinery and equipment used in farm operations. This is provided by listing certain items in part IV of schedule III of the act and also by reference to a long list of tariff items in part VII of schedule III. These tariff items, starting with item 40900-1, describe a wide range of farm machinery and equipment. The Excise Tax Act does not provide blanket exemptions for everything used on a farm or everything used in a factory. Exemptions from sales tax must be described as precisely as possible if they are to be administered fairly and efficiently. A piece of equipment

used on a farm or by farmers is not exempt from sales tax unless it is covered by the wording of the many exemptions in schedule III of the act.
[DOT] (3:20 p.m.)
The fact that exemptions are provided from a general sales tax makes it inevitable that some thin lines must be drawn in some areas between articles which are exempt and articles which are taxable. This happens in the case of machinery used for manufacturing, and it happens in the case of equipment used on farms.
To the best of my knowledge it has been the policy of successive governments since the sales tax was introduced that trucks used for transportation would be subject to sales tax. There has been an exemption for farm wagons since the early thirties, and this exemption also covered boxes for such wagons until 1956, when a tariff board decision made it necessary to add a specific exemption for boxes for farm wagons which is now in the act. The existence of this exemption for farm wagons and boxes used on farm wagons creates a borderline problem with respect to self propelled trucks which may also be used on a farm.
As the hon. member mentions, Mr. Chairman, changes in technology may have made horse drawn wagons and even four-wheeled tractor drawn wagons obsolete in some farming operations. New models and types of machines and equipment are introduced every year, and it is inevitable that the descriptions of exempt items may become out of date. The development of specialized trucks and specialized loading and unloading devices for such trucks has brought into use new items of equipment which do not qualify under the existing exemptions.
It has been suggested that the fact that tariff item 40924-1, which is listed with the exemptions, refers to "all other agricultural implements or agricultural machinery n.o.p.," is a statement of intention on the part of the Department of Finance that all forms of machinery used in agriculture are meant to be exempt from sales tax. This is certainly not my view and I believe it has not been the view of any previous minister of finance. It is possible that the technology of farming operations has moved beyond the wording and even the intention of the existing exemptions and, as I promised last night, I will certainly undertake to give careful consideration to representations that particular classes of farm machinery be added to the list of exemptions.
February 6, 19G8

However, I think hope should not be entertained that there is any chance of motor trucks used on farms being made exempt, and much more information would be required before I could express any view about the possibility of exempting special boxes or mechanical devices for use with such trucks.


Mr. McIntosh:: Mr. Chairman, I wish to thank the minister for the trouble he has gone to in order to give us this explanation. I do not think there is any disagreement between what he has said and what we have tried to put forward. We agree that there has been a long history to this argument, if you wish to call it that.
We believe, Mr. Chairman, that the difficulty arises over the confusion in terms. This was the reason that last night we asked the minister to give a definition of what he meant by "wagon". We still cannot understand why he is putting through a piece of legislation for which he expects our support when he is unable to explain to the committee the meaning of the term "wagon" used in the legislation.
I have searched for and found a legal definition of the term "wagon" that would be quite acceptable to me. It is in an act that was passed by parliament in 1930, I believe, and can be found at page 694 of the Revised Statutes of Canada, 1952, volume I. I refer to what is commonly known as the Canada Grain Act. Wagon is defined under paragraph (27) of section 2 as follows:
"wagon" means any vehicle to deliver grain to a country elevator.
I said last night, Mr. Chairman, that our difficulty arose when we went to one of the departments to find out what was meant by these items that are listed under tariff item 409f to which the minister has referred. For example, there is the item "gravity discharge farm wagon boxes". I am not talking about trucks.
In this regard I should like to quote some of the correspondence I had with the deputy minister of national revenue in 1961. As I said before, I think this is where the confusion in terms arises. In the letter he wrote to me the deputy minister said in part:
Being precluded from entry under item 409f, two provisions remain for consideration in classifying the truck bodies in question-
Excise Tax Act
The minister refers to "truck bodies", and we are talking about truck boxes. There is a big difference. The letter continues:
-tariff item 446a, the "basket" provision covering manufactures of iron or steel and tariff item 438f relating to parts for motor vehicles. The latter item, in my opinion, more specifically describes these truck bodies.
We are not talking about truck bodies but about truck boxes. In view of the legal definition given by the Department of Justice of the government of Canada, we cannot understand why wagon boxes are exempt but not truck boxes. Under the definition of "wagon" in the Canada Grain Act trucks would also be exempt, but we are not going that far in asking the minister to explain what he means by "wagon".
I dealt further with this question with the deputy minister of the day, and in one of my letters I had this to say:
Item 438f deals with parts of motor vehicles. I contend that a steel truck, grain or livestock box is not part of what is considered a motor vehicle or the chassis thereof, but rather an article to be mounted or attached thereto. Item 438a states such articles shall be valued separately, and duty assessed under tariff items regularly applicable thereto.
In western Canada, and the same may be said of eastern Canada, automotive dealers very seldom sell a farm truck or vehicle with steel grain box attached. If the farmer requires a grain box the normal procedure is for the farmer, or dealer, to obtain one from an implement dealer. Grain and livestock truck boxes are usually manufactured by those specialized in manufacturing agricultural implements and not from automotive manufacturers.
That is the point I am trying to get across, Mr. Chairman.
Most automotive dealers price sheets list chassis only and do not include a price for a grain or livestock box. Therefore, I contend a grain box should not be considered as a part of the truck or vehicle but considered under some other heading.
I say it should be considered under the heading in tariff item 409f of a gravity discharge farm wagon box or, as I said before, as all other agricultural implements or agricultural machinery n.o.p.-not otherwise provided for.
To continue with my letter:
I further contend a steel grain or stock truck box could be included under the heading of agriculture implements for the following reasons. In legal dictionaries, the term implement is defined as a thing of necessary use in any trade. The word necessary is defined as those things to the doing of a thing which are reasonably required.
I have gone through some dictionaries to find a definition of "truck box" or "wagon box" that the department would accept. I

comes with a wagon or truck should be defined as being a farm implement. The question may be asked, what do we mean by a wagon? If we do not accept the truck chassis in this definition will we accept the definition in the Canada Grain Act?
As I said, I have had a lot of correspondence on this subject and I have some here with the first minister of finance with whom I dealt. He happened to be a member of my own party, and I admit that I got about as far with him as I have got with the present minister. I do not blame the ministers so much as the officials of the department who occupy their positions for periods of years. They know that these questions have been raised not only by myself but by other hon. members such as the hon. member for Springfield. They must have heard these questions raised by dozens of members. Many western members have made substantial representations on the points I am trying to raise.
I regret that the machinery does not seem to exist whereby we can bring to the minister's attention the points we are driving at. He asked why did I not go to see him when his door was open to hon. members? We have done this but it has been to no avail. We now intend to get from the minister, if possible, a definition of "farm wagon."
I referred to the first representation I made to the minister of finance I originally dealt with. I was dealing with the item I am dealing with here, truck boxes which are brought to Canada from the United States, and I said in that letter:
I understand a similar request was made some time ago, but was refused on the grounds that although similar boxes were not made in Canada, they could be if the market warranted production. I do not disagree with the decision that was made at that time. Although I am a westerner, I am one who believes we must protect Canadian industry where possible, provided it does not create too heavy a burden on some other section of our country. Your previous decision gave Canadian industry an opportunity to take advantage of any potential Canadian market. Through lack of aggression, or some other reason, our industry has apparently not seen fit to take advantage of the opportunity afforded to them by your action.
At the present time, in certain areas of the prairie provinces, there is a demand for a light steel grain and livestock truck box. The farmers have been unable to obtain them in Canada, at least from recognized manufacturers of this type of farm equipment. Some may be manufactured locally in some areas of the west.
On investigation by some western manufacturers to provide this market with the product in demand, it was found that their source of supply could not produce the strong high tensile steel required, all other types of steel were too heavy for practical use.
Excise Tax Act
Anticipating a question which you might logically ask as to whether some substitute Canadian material could not be used, I will list some of the reasons the farmer is now demanding this type of steel box:-
I ask the minister whether a high tensile steel box may be included as a part. I continue:
- (a) Previous steel boxes on the market have been too heavy to be handled manually on the farm.
(b)	With the advent of a greater demand for stock most western farmers now raise cattle as well as grain on their farms. Both must be hauled to market. A steel box can be washed out quickly and thoroughly after hauling cattle and be ready for grain immediately.
(c)	Most western farms are now fully mechanized and many farmers haul their own fuel. Any spillage can be easily washed from steel and will not soak into the platform as it does on a wooden base.
Western farmers want the steel box. I mentioned some of these matters last night. I continue reading:
(d)	Treated wheat-
I am referring to poisoned wheat.
-used for seeding purposes can be handled in a steel box with fewer precautions than in a wooden one.
That is reasonable.
All my efforts to date to convince the excise branch there are at present ample listings under their tariff regufations to allow entry of such a box have not been fruitful. They insist direction must come from your department, spelling out in detail the nature of the box required before they will rule duty free for the farmers.
I have been unable to convince them that the steel grain box could be included under the heading of agricultural implement.
[DOT] (3:40 p.m.)
I have mentioned a number of these definitions. What this situation simply means to the western farmer is that at present there is a 25 per cent duty on these boxes plus an 11 per cent sales tax. The result is that for every $1,000 farmers spend on them at least $400 goes to the government. The minister has been out west. He says he understands the plight of the western farmer who finds himself caught in the cost-price squeeze. It seems odd to me that since these boxes are now essential to farm operations they should not be exempt from tax.
I point out once again that we are not asking for an exemption for trucks. If we were I would expect the minister to tell us that an end-use certificate should be given. Farmers would have no objection to giving end-use certificates with regard to trucks

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Excise Tax Act
because it is admitted they can be used for other purposes. Nevertheless, 99 times out of 100 the farmers who buy them use them exclusively for farm purposes. All we are asking the hon. gentleman to do is to define what he means by "wagon". Will he not accept that it is the same thing as a truck?


Mitchell William Sharp: May I begin by saying that in so far as hon. members are making representation for a change in the law their comments will be taken into consideration when amendments are next made to the legislation.
The hon. member for Swift Current-Maple Creek has asked me on what basis the Department of National Revenue now defines a farm wagon. I will give him a direct answer. It may not satisfy him but I will try to be as clear as I can. The consistent policy in administering this statutory provision has been to accept the ordinary dictionary definition of the term "wagon" and regard as entitled to the benefits of the exemption those farm wagons equipped with four wheels. Accordingly, as a farm wagon is a general purpose implement useful in performing a large number of functions the following definition, taken from Funk and Wagnalls New Standard Dictionary of the English Language, the same dictionary as the hon. member for Swift Current-Maple Creek used, is followed by the department in administering this exempting provision:
A four-wheeled vehicle having a rectangular boxlike body, complete with tongue, designed to be horse drawn.
It has been the policy of the department to regard all four-wheeled wagons, whether horse or tractor drawn, designed for farm application, with or without box, to be unconditionally exempt from sales tax under the abovementioned statutory provision. This means that two-wheeled vehicles, for example, trailers, cannot qualify for exemption.
Similarly, exemption from sales tax is provided in item 4 of part IV of the Excise Tax Act, under the heading "Farm and Forest", for the following goods:
Boxes for farm wagons, and article and materials for use exclusively in the manufacture thereof.
There have been numerous requests over the years for exemption from sales tax for boxes for farm trucks, but these have been ruled to be subject to sales tax at the current rate since the Excise Tax Act as at present enacted makes no provision for their exemption.


Edward Nasserden: I should like to thank the minister for giving us those definitions in relation to farm wagons and wagon boxes. The subject under consideration here really is the attitude of the government or the attitude of the Department of National Revenue toward the whole question of the tax placed on some of these items. Taking a political view of these things, we all know that the boast has been made across Canada that excise taxes and tariffs have been removed from farm machinery. We also know that certain items are exempt from taxation when a certificate is signed to the effect that their use will be restricted to the farm. Air-cooled engines and generating plants come into this category. The guide line in the mind of the average farmer is, therefore, that provided an article is to be used solely for agricultural purposes parliament has intended that it be exempt from tax.
This is the feeling today in connection with truck boxes. The attitude of the department has in my opinion been archaic. The rulings have departed from the intention of parliament that boxes for wagons should be exempt. Today the truck has taken the place of the wagon, and in these circumstances a great deal of dissatisfaction exists in connection with the stand now taken by the department.
With regard to clause 11, I congratulate the minister and the government for having made an exemption to cover parts. I know this will be welcomed by farmers not only in connection with farm wagons but in connection with a number of other items.
We should like to see the minister bring this act up to date. Let him not delay doing so until some time in the distant future, as seems to be the tendency of all ministers of finance. In practice, ministers of that department never stay in office long enough to do anything about these things. We do not know how much longer the present minister will be holding the portfolio of finance. Maybe he will have other duties within a short period of time. We should like him to achieve this major step on behalf of our farmers with the least possible delay, in keeping with the boast made by his party that it has removed tariffs from farm equipment.


Mr. Soulham:: I rise to support the
representations made by my hon. friend from Swift Current-Maple Creek with respect to this matter. I must compliment him on his presentation. He has certainly done his homework, and there is little I can add to what he
February 6, 1968

has said. He spoke for most farmers across Canada and particularly for those in the west.
My hon. friend from Rosthern who has just resumed his seat put his finger on an anomalous situation when he pointed out that the definition used in connection with farm wagons applied some 25 or 30 years ago. How many people are using the old-fashioned wagon box today? A truck box on an automated vehicle has taken its place. Consequently the definition to which the minister referred is outmoded and ought no longer to be used. I support entirely what my hon. friends have said on this point. It is high time the minister and his officials updated the legislation with respect to farm boxes.


Mr. Watson (Assiniboia):: I, too, would like to say a few words in support of the representations which my hon. friend from Swift Current-Maple Creek has just finished making in the course of his well prepared statement on this issue. The very fact that farm wagons are now being defined as fourwheeled farm wagons equipped to be tractor drawn is an indication that the act is more than 30 years out of date. I doubt that half of one per cent of the farms in western Canada use a wagon of any type today. Most farms have one or two large farm trucks. I do not think the minister should have any hesitation in recognizing that we are living in 1968 and that everything rolls on rubber and is motorized.
[DOT] (3:50 p.m.)
In those earlier days combines were few in number. Today everyone has a combine and a good many of them are self-propelled. Farm trucks are also self-propelled. The province of Saskatchewan recognized the importance of farm trucks when it passed legislation a year ago exempting fuel used by those trucks, when used on farms, from tax. I think the minister should take a personal interest in this matter and see to it that farm truck boxes are exempted from this tax.


Edward Richard Schreyer: Mr. Chairman, I would like to join with my prairie colleagues in thanking the minister for his undertaking to consider in the next short while the possibility of further revising the Excise Tax Act and the regulations, so as to exempt farm truck boxes from this tax. As I indicated last night, and as other hon. members have indicated, it is difficult to understand how a quarter of a century can pass before the law is updated to present-day reality. We have all heard the old saying, which I think comes from "Oliver
Excise Tax Act
Twist," that in some respects the law is an ass. Here we have a perfect example of that. It is inconceivable that there can be much hesitation in changing the Excise Tax Act in this respect. Last night the Minister of National Revenue said that on many occasions genuine efforts have been made to attempt to meet the legitimate requests of western farmers. This is a good opportunity to put such a sentiment into effect by changing this act to reflect modern conditions on Canadian farms.
I do not suppose much would be gained by prolonging this debate inasmuch as the minister has given a clearcut undertaking that he will examine this matter in detail. I take him to mean that before the passage of more than four or five months we will be hearing from him specifically in this connection.


Mr. Godin:: Mr. Chairman, now that the problem regarding the definition of farm wagons seems to be settled, I should like to direct a question to the hon. minister.
I shall not take much of the time of the house, but farm wagons and particularly their parts are still of interest to me, since I come from eastern Canada. We are all aware of the tax added to the price of the wagons made in Canada. If farm wagons or their parts were made in the United States, would the customs duty still be charged or would it disappear along with the taxes, as provided by the clause now under consideration?


John (Jack) McIntosh: I would like to draw the minister's attention to a few remarks he made last night, as recorded on page 6398 of Hansard. He said:
It was in response to representations that the words "and parts thereof" have been added. It is a relieving section which does not add any tax. It relieves parts of farm wagons and sleds from the tax, and I am sure the hon. gentleman would not want to oppose that.
We are not opposing that, but we want the minister to include farm truck boxes and we maintain that all he has to do is add a few words to clause 11.
Hon. members will recall that when the minister read the definition taken by the department from Funk and Wagnall, the dictionary the legal branch uses, he mentioned "horse drawn vehicle," but apparently the department has changed the dictionary definition because the bill reads, "to be tractor drawn." This confirms our argument that a farm truck box is a wagon drawn by a truck.

February 6, 1968
Excise Tax Act
I am sure the minister, to use his own words, would not want to oppose such a change, knowing the position of the farmers in western Canada.
I could make a long speech about the government's railway line abandonment policy, as a result of which trucks with large, light steel boxes are more essential to farmers now than ever before. They have to haul their grain longer distances and these boxes must be light in order to carry large quantities of grain. Otherwise the cost factor would become prohibitive, and if the cost of production is too high farmers in many areas will not be able to grow grain. I do not want to suggest exact words to the minister but he could include the phrase, "or truck drawn." I am sure he realizes what we want. We want steel truck boxes exempted. They are not made by automotive manufacturers but by farm machinery manufacturers.
With respect to the minister's statement that representations had been made to him, I would like to know how they were made. As I told him, I have been making representations on this subject ever since 1961 and I do not think I have missed a single year. Last night the Minister of National Revenue made light of the fact that we had not brought up this matter previously. I would refer him to volume 3 of 1963 Hansard, July 25, when the matter was raised with the former minister of finance, the hon. member for Davenport.
On July 30 of that year the matter was raised again, as recorded on pages 2649 and 2650 of Hansard. I also refer the minister to pages 2796, 2806, to 2808, and 2811 to 2815. On one occasion I had a private bill before the house titled "Bureaucratic Oppression," which drew attention to the fact that we could not get a definition from either department because they would not agree. They would not even accept the definition in the Canada Grain Act, a legal statute passed by parliament. What will they accept? The minister should make it perfectly clear what he means by a wagon and whether it includes truck boxes. When he includes the words "to be tractor drawn" he admits in effect that this is different from the definition in Funk and Wagnall which refers to a horse-drawn vehicle.
[DOT] (4:00 p.m.)


Mitchell William Sharp: Mr. Chairman, I hesitate to disagree with my hon. friend on matters of logic but I am forced to do so. The very fact that we put in the words "to be tractor drawn" indicates that the administration of

the law has been very consistent. If we did not add those words we could not even include a farm wagon, as defined in Funk and Wagnalls dictionary, drawn by anything except a horse. So we had to enlarge the definition. This seems to strengthen the position taken by the Department of National Revenue that a farm wagon is a four-wheeled vehicle with a triangular box-like body designed to be horse drawn. I do not think the hon. gentleman was listening carefully when I gave the view of the department in administering this law. There is a definition for a box on farm wagons in the law now. This is why it will be necessary to make a change in the law in order to extend the exemption beyond its present ambit. Under the heading "Farm and Forest" in item 4 of Part IV of Schedule III of the Excise Tax Act appears the following exemption:
Boxes for farm wagons, and articles and materials for use exclusively in the manufacture thereof.
So there is very close relationship between the words "boxes" and "farm wagons". Therefore the Department of National Revenue will have to administer the law in a consistent way within the ordinary dictionary meaning of these words. There have been numerous requests such as the hon. member is putting forward stating that these boxes should be related to farm trucks, but the law states that exempt boxes are for farm wagons.


John (Jack) McIntosh: If it is for horse-drawn wagons, then why is there an exemption for hydraulic lifts? I do not think one could have a hydraulic hoist on a horse-drawn wagon.


Mitchell William Sharp: This again supports the position of the Department of National Revenue. There is a specific exemption for that item.


Roland Godin: Mr. Chairman, earlier when I directed a question to the hon. minister, he was busy talking with a charming lady, that is why I do not hold it against him for not hearing me.
This is my question: Shall we continue to pay customs duty on farm wagons which come to us from the United States or anywhere else?


Mitchell William Sharp: Mr. Speaker, the answer to that question is that it would depend upon the item itself and would not be altered by this bill. This bill has no effect upon the treatment of such items. It would depend upon the
February 6, 1908

existing interpretation of the existing sections of the law.


Mr. Danforth:: Mr. Chairman, I was very interested in the minister's explanation when he spoke of the exemption of a particular item. Perhaps it should be suggested to the minister that the time has come when the whole matter of the exemption of agricultural implements should be reviewed in the light of the drastic changes in the use of various implements which previously could not be conceived of as being used for agriculture.


Mitchell William Sharp: That is what I said before.


Harold Warren Danforth: Tanks of certain sizes are exempt when they are used for the farm storage of liquid fertilizer but beyond a certain specific size they are no longer classified as for farm use. However, such tanks are being used for that very purpose and the farmers fail to understand why, when they are used, they cannot come under the exemption. Perhaps these things should be looked into very carefully.
Although this may seem to be an extreme case there are certain instances today when radios play a part in the production of farm commodities. They are used for weather broadcasts, market reports and so on. Perhaps they should be classified as necessary agricultural implements. I realize that this is an extreme case but it is an indication of how agriculture is moving in this regard. This type of problem will continually rise in respect of budget resolutions and tariff items.


John (Jack) McIntosh: Mr. Chairman, last evening I asked the minister a question after he said:
It was in response to representations that the words "and parts thereof" have been added.
Would he please tell me what type of representation was made to him that caused him to take this action? I have tried to make all types of representations to the department so that action would be taken on this matter. If I have been unable to make the same type of representation that was made to the minister perhaps he will take the representation which I make to him now in the house on behalf of all western members. Would he look into this matter or leave some instructions for his officials or his successor before he leaves his present office?
These definitions change and, as indicated by the hon. member for Kent (Ont.), should be brought up to date. I have definitions here
Excise Tax Act
from the Century Dictionary, 1895, the Encyclopaedic Dictionary, 1903, the Oxford English Dictionary, 1933, the Winston Dictionary, 1946, and Webster's New International Dictionary, 1958. I could argue for hours and not get any place in respect of the interpretation of this term or the term "agricultural wagon", and so on. I should like the minister to tell us what possessed him to move in respect of this one particular item.


Mitchell William Sharp: The representation I received was to the effect that we had inadvertently dropped the words when we transferred the clause from the Customs Act to the Excise Tax Act. It was always the intention that they be there. The representation I had was to that effect.


John (Jack) McIntosh: From the department?


Mitchell William Sharp: Yes.


Edward Richard Schreyer: Mr. Chairman, the hon. member for Kent (Ont.) has made the suggestion that from time to time it would be desirable to have a complete review and revision of the items or lists of equipment or implements which are exempt under the act so they could be brought up to date in accordance with the developments in modern agriculture. I think the idea is a good one. However, I believe there should be a keener appreciation, on the part of the minister and the officials of his department who administer the act, of the changes which are going on and have been going on over the years in agriculture. Such an appreciation would enable them to act quickly when representations are made which have logic and reason when viewed in the context of the new developments in respect of the manufacture of farm machinery and implements.
With regard to steel truck boxes I feel there really has not been an awareness of just how important and necessary a part they play today in farming. I am not referring only to western Canada. It is not quite good enough that we should have to wait eight, nine or ten years in order to have changes of this kind made. I do not suppose there really is much purpose now in prolonging the discussion inasmuch as the minister has given a commitment to look into the matter and, hopefully, take some action. I assume he will be doing this in the next three or four months.
[DOT] (4:10 p.m.)


John (Jack) McIntosh: I do not wish to prolong the debate on this clause but I should like the

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Excise Tax Act
minister to give a commitment now that the representations of hon. members will be studied and considered. I would also hope that consideration will be given to the definition as found in the Canada Grain Act. That may be going a step too far but it would be welcomed by the western farmers. Once a definition has been established in a statute of Canada it should be accepted when interpreting all our statutes. I do not know where things would end if we had a different definition for certain words in every statute. Will the minister give a commitment that he will consider our representations?


Mitchell William Sharp: Mr. Chairman, I have been very much impressed by the representations, and I assure the hon. member for Swift Current-Maple Creek and the hon. member for Springfield that, as I said in my opening remarks, many of these terms are becoming archaic and obsolete which makes it necessary that the law be refurbished. I cannot undertake to say that a farm wagon means a truck, which apparently is the definition in the Canada Grain Act. This would mean extending the meaning of agricultural implements and machinery in a way that would require most careful consideration by the government because trucks are used in many forms of activity other than agriculture.


Lawrence E. Watson: Mr. Chairman, I should like to ask the minister whether he does not in his own mind agree that a farm truck box performs the identical service performed by a farm wagon box and that it fits the interpretation and the intention of the act when it was first adopted? Does the minister not feel there should be no problem at all in bringing this act up to date to include farm truck boxes? As the hon. member for Swift Current-Maple Creek said a few moments ago, when we first started to use farm truck boxes they were mostly homemade of wood. There has been a change and a definite swing toward the use of steel truck boxes. This has resulted because we are carrying heavier loads in boxes with steel underbeds, steel floors and steel sides. These larger steel boxes are easier to use in hauling grain. They are much easier to dump because the grain slides completely out of them.
I am not sure how long it would take to change this law or how to go about changing it but I should like some commitment from the minister in this regard. The minister has been in the west often enough in the past few years, and I expect he will spend quite a bit of time there in the next month or two, to

know the situation there. I hope he will make a commitment that some action will be taken in respect of truck boxes within a reasonable time. In this way the farmers of western Canada could obtain an exemption.


[Stage Direction]
Clause agreed to.
Clauses 12 and 13 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


An hon. Member:: By leave, now.


Mitchell William Sharp: the third reading of the bin.
Motion agreed to and bill read the third time and passed.


Mr. Pascoe:: Mr. Speaker, this bill was passed so quickly I had no time to ask for an explanation. Is it too late to refer back to a clause for clarification?


Mr. Deputy Speaker:: Perhaps the house would allow the hon. member to ask his question even though we have completed the formality of third reading.


James Ernest Pascoe: I should like to clarify one point regarding Bill No. C-191, part XIII, which indicates that effective June 2, 1967, all goods listed in schedule V will be exempt from sales tax. If one looks down the list one will find that in paragraph (e) there is reference to gasoline and diesel powered self-propelled trucks at mines and quarries. Paragraph (i) refers to pipes and tubes and other things in connection with natural gas or oil wells. Paragraph (j) refers to petroleum, natural gas or minerals. I should like to ask the minister whether these exemptions apply to the mining of potash. The minister knows that potash is very important to the economy of Saskatchewan at this time.


Mitchell William Sharp: As far as I am aware, if there is a reference to minerals it would include potash. Where there is a reference only to natural gas or oil wells potash would not be included. Wherever minerals are concerned I assume that potash would be included, because this means mining from the ground. I see no reason for potash being excluded.


James Ernest Pascoe: Where (e) refers to mines and quarries it would apply also to potash?


Mr. Deputy Speaker:: I am sure the hon. member for Moose Jaw-Lake Centre will
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Excise Act
realize that the privilege we extended to him placed in bond. Is the situation further con-is not one we would wish to adopt in our fused when we have imported beer and rules of procedure.	imported spirits? Imported wine, beer and
spirits would be in bond. How does this affect EXCISE ACT	the excise tax position?


Mitchell William Sharp: the second reading of Bill No. C-192, to amend the Excise Act.
He said: Mr. Speaker, this bill, like the bill we have just considered, is based on the resolutions which were discussed extensively when they were introduced and approved in the house. I have nothing to add to my explanation at the present time. I will be glad to answer any questions when we reach the committee stage.


Jay Waldo Monteith: Mr. Speaker, this bill carries out one of the budgetary resolutions. Consequently we have nothing further to say at this time.
[DOT] (4:20 p.m.)


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I ask the minister why in the implementation of the budget resolutions he has adopted the system of bringing forward two separate bills in respect of the same commodity. The bill we have just passed increased the tax on wine and this bill will implement a tax increase on spirits and beer. Why were the tax increases on these commodities not included in the same bill? What is the reason for having separate bills? To my mind there is not much difference between one alcoholic beverage and another; yet we have one in one bill and two in another. I am curious about the reason for having separate bills to implement a tax increase in respect of the same commodity.


Mitchell William Sharp: Mr. Speaker, the reason is that in the Excise Tax Act we apply excise taxes and in the Excise Act we apply excise duties. A duty is applied when the goods are kept in a special warehouse and taxed in that way. An excise tax is like a sales tax which is applied upon sales at the time they are made. Throughout history there has always been this distinction between an excise duty and an excise tax. It has to do with the administration of the taxes and the necessity in the case of duties, just like customs duties, of having warehouses in which the goods to be taxed are held until the tax is paid.


William Arnold Peters: I presume that the reason spirits are mentioned separately from beer in this bill is that they are not in bond except in the manufacturing process. Imported spirits are


Mitchell William Sharp: The Excise Act requires that they be kept in bond even if they are manufactured in Canada. An excise duty is comparable with a customs duty. There are very special procedures for keeping goods in bond until the tax is paid. Other goods taxed under the Excise Tax Act do not have this requirement, and wine is one of them.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Tardif in the chair.
On clause 1.
Herbert Wilfred Herridge: Mr. Chairman, I would like to ask the minister a question. I do not expect he has had much experience in brewing. Clause 1 reads in part:
(a)	five per cent when yeast sediment is included, or
(b)	three per cent when yeast sediment is not included.
Could the minister explain to the committee the reason for this provision?


Harold Warren Danforth: Yes; I am interested.


Michael Starr: One ferments more than the other.


Mitchell William Sharp: Mr. Chairman, I agree with the hon. member that I am not an expert in these matters. However, I am advised that beer is measured when it is in the fermentation process. When the yeast sediment is at the bottom of the vat the stick by which you measure the contents is, of course, at a different level than it is when the sediment is removed. This clause provides an approximation of the same volume of consumable beer.


Michael Starr: That is not the way we used to make it.


[Stage Direction]
Clause agreed to.
Clauses 2 to 5 inclusive agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Tardif):: When shall the bill be read a third time? By leave, now?


Michael Starr: By leave.

February 6, 1968
Income Tax Act


Mitchell William Sharp: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



INCOME TAX ACT

Mitchell William Sharp: the second reading of Bill No. C-193, to amend the Income Tax Act.


Michael Starr: Mr. Speaker, I wonder whether the Minister of Finance (Mr. Sharp) is prepared to make a statement on this important bill.


Mitchell William Sharp: Mr. Speaker, all the amendments in this bill, with one minor exception, are for the purpose of implementing the November 30 budget resolutions. The exception is the addition of a few words to section 42 for clarification.


Michael Starr: Mr. Speaker, in rising at this time to make a few remarks on the budgetary legislation before us I want to assure the minister that I have no intention or desire to add to the already heavy burden resting upon his shoulders as Minister of Finance. The fact that the greater part of his burden has to do with the minister's interest in the future of his party, rather than in the economy of Canada, does not alter the situation that today we believe he is a sorely tried man.
The minister probably feels that he should be somewhere else today listening to more important things, but we in the house have to deal with this legislation which all of us consider to be vitally important to Canadians as a whole. So it is purely in a spirit of helpfulness that I wish to advance some ideas on the general subject of the national economy and in particular what I believe to be serious shortcomings in the approach of the Minister of Finance and the government as a whole to our economic problems.
This legislation is designed to implement what has been called a mini-budget, an emergency measure which I feel was forced upon the minister and the government by their own bungling. In view of the minister's statements of the past few years as to the state of the economy and the adequacy of his own policies, I would refer to this interim budget as an alibi budget for those statements and legislation, designed to excuse and correct the minister's grievous errors in policies and his gross miscalculations.

[DOT] (4:30 p.m.)
According to the minister's explanation earlier, his aim in this legislation is to fight inflation. He seeks by these and other proposals to put the brakes on the Canadian economy. I submit that the prime target of his anti-inflationary tactics is the little man, the average taxpayer, the ordinary Canadian, the most put upon, overburdened and exploited unit in our tax system. The minister also had a few pious words of advice for labour and private enterprise. He cautioned them to go slow, cut back and show restraint, and there have been some violent reactions to his suggestions from both labour and industry.
So far the minister has done nothing but speak about one of the principal areas where effective anti-inflationary action might be taken, namely, excessive government spending, and right now government spending is up by 15 per cent. The minister's forecast is for an increase of 4.5 per cent in government expenditure this year, in spite of the so-called cutbacks which in fact were only propaganda. I submit, Mr. Speaker, that this figure is also misleading. It does not take into account the money required for the government medicare scheme due to be launched on July 1, although that date has not yet been announced in parliament as the definite date for the implementation of this scheme. This appears to be a classic case of the old saying: Do as I say, not as I do.
As I have said, I can appreciate the minister's difficult position. Surely it must be exceedingly difficult for him to bring himself to consider today such routine matters as the nation's economy. In fact, this must have been the case starting two weeks ago and will in all likelihood continue to be so until next April 5.
The minister has never been one to show reluctance in giving his own ideas and solutions first place as the only answers to the economic problems of Canada. I have observed that he has shown a degree of selfconfidence which in another minister might be mistaken for arrogance but which he knows so well how to project. It is not too much to say that the Minister of Finance has demonstrated a faith in his own infallibility which few of us possess. I wonder whether the minister has ever considered the possibility that his ideas and projections might be wrong. Has he ever taken the time to consider other views, new theories, fresh policies and, most important, the experience of other countries in similar situations and what they
February 6, 1968

have been able to accomplish or to attempt in establishing new policies? Surely even the minister must realize how damaging it would be, not only to the national economy but to his political ambitions, if it turned out that he had pursued the wrong policies and had applied incorrect measures.
I wonder whether the minister has ever heard of Edward Holloway. Edward Holloway is the honorary secretary of the economic research council of Great Britain. He is also the director of Commonwealth Industries Association Limited. One of Mr. Holloway's organizations has recently completed the first part of a research program specifically devoted to finding the prime source of Great Britain's continuing inflation. This program is called the national recovery program. It was undertaken following the publication last year of a manifesto drawn up by 19 leading economists, industrialists and writers in Great Britain. They include such celebrated persons as Professor C. Northcote Parkinson, the father of Parkinson's law with the application of which, particularly in such government ministries as the Department of Finance, I am sure the minister is familiar. This manifesto aroused such interest that funds were soon forthcoming for the exhaustive and detailed study of inflation and its prime cause.
So far the findings have been revolutionary, to say the least. They are of a standard and importance which I would have thought sufficient to command the attention of the minister and the government and, indeed, of all responsible members of parliament. When one considers our close and vital economic links with Great Britain, the amount of attention given to recent economic events there, and the tremendous effect such events have on our economy, it seems reasonable to assume that Canada's Minister of Finance and Canada's government would be almost as well briefed on developments in Great Britain as the British authorities themselves. Perhaps this is the case. I hope it is because if these preliminary findings in Great Britain are correct it means that the Minister of Finance and the government of Canada are carrying out the wrong policies, victimizing the wrong people, and casting the blame for inflation upon groups which may be entirely blameless, namely, organized labour, ordinary consumers, and private business.
The British research report states that inflation is not caused by a too rapid increase
Income Tax Act
in wages, is not worsened by full employment, is not reinforced by the activity of private enterprise, and is not even directly caused by government spending or budgetary deficits. The prime source of inflation, according to the researchers, is the financing of an over-all deficit in the central government's accounts by an uncontrolled creation of new money. The dominating word in this explanation is "uncontrolled". If this statement and the findings of the research group are true, it means that some of the present measures advocated both by the British government and by our own government in Canada are not only ineffective but totally wrong.
One of the most significant findings of the group in Britain is that when public spending rises faster than private spending there is a progressive slowing down in industrial growth. The sparkplug of a nation's economy is the private sector. What they have found is that various governments faced with economic difficulties such as inflation have taken money out of the private sector so as to reduce demand but at the same time have increased the money supply by the same amount or more to sustain a high rate of public spending. This means that for all practical purposes total demand has not been reduced at all.
The vital factor in this approach is that while the government has increased the money supply and failed to reduce its own spending, it has forced cut-backs in spending in the private sector and thus put the brake on industrial production. Inevitably this increases the inflationary pressure and leads to an aggravation of the very condition they have sought to cure. They have added to the money supply but reduced industrial output. In so doing they have attracted unnecessary imports and hobbled exports. Increased public spending and an increase in money are no substitute for production from an active private sector. Governments cannot spend their way out of recession, Mr. Speaker.
[DOT] (4:40 p.m.)
The basis for the findings in the report is that the nation's total demand for goods and services is always satisfied by the nation's own production plus imports. When production slows down within the country the pressure for imports grows; when internal production picks up this import pressure declines.
The report further states that its preliminary findings strongly indicate that the proper way to gain a favourable balance of trade

February 6, 1968
Income Tax Act
and all the economic benefits that go with this is to allow total demand, and particularly consumer demand, to grow. The private sector, rather than being restricted and hampered, should be allowed and encouraged to go ahead full blast. This obviously is just the opposite course to that upon which the government and the Minister of Finance are now embarked.
I am not an economist, nor have I ever pretended to be. As a result I cannot say whether or not all these things are true. But I do believe, Mr. Speaker, that because of their apparent good sense and the sound credentials of their authors these findings are at least worthy of the government's serious attention. These findings and recommendations are very similar to those urged upon the government by organized labour in this country.
The key to the findings in the British report is that inflation can be shut off at the source if the central government will only act to control its own spending in relation to the money supply. The over-all difference between government income and expenditure must be financed by genuine borrowing, sale of government securities, and by genuine saving, always undertaken in relation to the creation of new money. Such responsible government action would mean that consumer demand could be encouraged instead of dampened down. Wage increases could be tolerated at a reasonable level of annual growth and private enterprise could free itself from government restrictions and expand its own rate of economic growth. The mistake has been to try to manage demand instead of managing the money supply.
Lord Cromer, when still governor of the Bank of England, said that Britain had a system whereby exchequer financing led to "the creation of money quasi-automatically". This may be, for different reasons perhaps, the situation here in Canada. It is well within the power of the government to control the money supply. If the findings of the British researchers are correct, then it is not only an obligation but a vital necessity for the minister and his officials to re-examine their policies and proposals in this fight.
As I have said, Mr. Speaker, I am not an economist, but I admit that as a layman I have been impressed by all the implications of these latest findings by these British researchers. I do not believe that they can be dismissed lightly as being from another country or as dealing with different conditions.

Generally speaking, all the western nations face roughly the same economic problems within the context of roughly similar systems.
I sincerely believe that much good for Canada would come out of a close study of this matter by the minister and his departmental officials. It seems to me that in a country as prosperous, as dynamic and as promising as Canada there is something fundamentally wrong with a system that inhibits business initiative and victimizes our working people as the only way to cure our economic problems.
In a few months the name of the minister may become a household word in Canada for reasons other than economic. I would pose this question to him: How much prouder would he be, how much more lasting his fame, if the history books could record that he was the first to break through the restrictive barriers of old economic practice into the green fields of stable and equitable prosperity for Canada?


William Arnold Peters: Mr. Speaker, I want to congratulate the previous speaker on his address and to commend it to the officials of the Department of Finance as worthy of consideration. I too am surprised that the department has brought forward in this bill the same type of legislation that has been introduced on numerous occasions and as a result of which the little man has to pay the penalty for economic conditions over which he has absolutely no control. Workers ask for more money so they can continue to pay the rent. They do not ask for money in anticipation of the rent going up because rents are continually going up. It is often argued in negotiations with organized labour that as soon as wage increases are granted rents seem to rise. Workers who are not members of organized labour discover that even in the absence of a wage increase their rents go up just the same. They really have no control over this problem.
In introducing the budget resolution to bring about the income tax amendments now before the house the minister indicated that one of his prime aims was to assist in halting inflation. I agree with this. I do not subscribe to the argument that the way to end inflation is to curtail government spending. I do not agree that it is necessary to curtail certain spending. Cut-backs in housebuilding are not the way to curtail inflation in this nation. According to this morning's Montreal Gazette there are something like 75,000 unemployed
February 6, 19B8

in that city, many of them carpenters, electricians and members of the building trades. It seems to me that this is not the way to curb inflation. In this specific instance the minister has decided to impose a 5 per cent income tax surcharge with a ceiling of $600. Again this is making the little people pay the same as those at the top of the scale.
[DOT] (4:50 p.m.)
I know that the minister has been a civil servant and that he is probably closer to the establishment than most ministers of finance have been. He was part of it and knew its inner workings. I think the establishment in Ottawa lives in an ivory tower. They are willing to tax the little people of Canada, those in the lower income bracket, but they always put a ceiling on the effective income to be taxed because they do not want those who have high incomes to pay heavy taxes.
I remember the arguments about old age security and about cutting off assistance at $60 a month, and so on. The government then paid $90 and it has bumped that figure up to $120. I ask, why should those who have been able to make their mark in society not help those who have not done so well? Why should the little man not receive some benefit? Perhaps the executive types who live in the lofty, refined atmosphere of the Rideau Club do not know what is happening today. I suspect they do.
The Carter commission says that one way to raise tax money is to tax the mining industry. I come from an area where there is much mining. Many of the early mines of Canada are in the area I represent. As a result I have always been interested in the propaganda that the mines have put out. Though some mines make colossal profits the mining industry as a whole has always been loudest in shouting to the establishment when new taxes are proposed, "Don't rock the boat." Carter said that there was no justification for the mining exemption and I do not think that a three-year tax exemption should be allowed for the mines.
Many members of this house may have made or lost money on Texas Gulf. Some of them may have made or lost money on adjacent mines such as Windfall and others.


An hon. Member:: How did you do?


William Arnold Peters: Recently an article appeared in the Timmins Press which indicated that Texas Gulf will make a tax free profit for the next three years of $400,000 per day. I know 27053-405
Income Tax Act
that Texas Gulf has friends among the establishment in Ottawa and I expect many members of the Rideau Club hold stock in the company.


Mr. Habel:: Will the hon. member permit a question? Was the article to which he has made reference not referring to a statement made by the hon. member's colleague, the hon. member for Timmins? I submit that the statement was groundless.


William Arnold Peters: The article was not researched by my colleague; it was researched by others and it has not been repudiated by the Timmins Press, as the hon. member for Cochrane will agree. The article did not come out recently but is several weeks old. The figures have not been disputed.


Joseph-Alphonse-Anaclet Habel: Because reference was made only to production.


William Arnold Peters: With respect, no. The article referred to profits per day.


Joseph-Alphonse-Anaclet Habel: I thought it referred to production figures.


William Arnold Peters: No. I do not think so. It referred to $400,000 per day profit. That means that the $80 million which the company has already spent will be paid off in about 200 days. Perhaps that is an exaggeration; perhaps we should give them 500 days. I do not know how many actual working days are involved but I do know that the figures mean that the company will recoup, tax free, its capitalization plus about $100 million. And who is giving the company that money? Who is giving it the tax money it otherwise would have paid? I am giving it, you are giving it, every person who pays taxes is giving it to this company.
International Nickel enjoys the same type of exemption completely without justification. The commodity it produces is in such demand that if there were a shortage the United States would put up money for the development of its production. I see no logic in extending a tax exemption in those circumstances.
When we talk about exemptions for individuals the story is different. Exemptions for individuals these days ought to be on the basis of $1,500 for single persons and $3,000 for married couples. The government will not increase the exemptions but is increasing taxes. For the value of the exemption to keep pace with the inflated value of our dollar I

February 6. 1968
Income Tax Act
submit that single persons ought to be granted a $1,500 exemption. The $1,000 that parliament granted 20 years ago is probably worth less than $500 in real terms today. Perhaps $2,000 as the exemption for single persons would be more realistic. It would be just enough to enable an individual to maintain the standard of living he enjoyed 20 years ago.
Of course, we are always willing to put a ceiling on taxes. Those in the high income bracket will not need to pay more than $600 in additional taxes, the reason being that the establishment does not want the big people in this country to get hurt. When it comes to the little man the story is different. Most of our people are little people. I represent a constituency whose people will be paying extra taxes, which will hurt their purchasing power. The little man is at the bottom of the totem pole and the little man will have his standard of living lowered by increased taxes. The establishment's idea is that by lowering the purchasing power of the little man at the bottom of the totem pole a large number of people will have less money to spend and inflation will be curbed. Of course, in simple terms we are lowering the standard of living of the little man, and we should not do that.
I do not expect the establishment to agree to changes that will hurt their friends, but sooner or later members of parliament will have to make a decision. They will have to go out on the hustings, face those who will be paying less than $600 a year extra and explain to them why the per cent surcharge has been imposed. The government will not be influenced by my remarks but I know that the establishment will have much explaining to do in the next election because candidates from every political party will be asked by the electors why the extra tax was added. Anyone who wants to fight the next election had better get his position clear now.
As I said, instead of granting increased exemptions the government is adding extra taxes. What the government should be doing is bringing the exemption into line with the reduced purchasing power of the dollar. If we look at the dollar of 20 years ago and remember that the exemption then was $1,000 for a single man, is it not common sense to just about double the exemption to take care of today's inflated dollar? I think the individual should have enough income left to him to maintain at least a reasonable standard of living. He should not be burdened with additional taxes. The people at the bottom of the totem pole who outnumber those higher up

are the ones who are asked to make sacrifices, who are asked to lower their standard of living in the name of curbing inflation. Those at the top level will not be affected nearly as much.
[DOT] (5:00 p.m.)
The figures I used may be very unfair to Texas Gulf, but the principle of allowing a three-year tax free period to all mines in the Elliott Lake area is surely an unsound one. Conditions have changed since I worked in the mines. In those days it was normal to employ about 300 men and management was lucky if 500 tons a day were produced. The mines of which we are now speaking produce up to 5,000 tons a day. Within a month of starting operations they can pay off their total capitalization and go on to amass a huge profit. Why should they be granted tax exemptions? When uranium operations were discontinued during a bad period some time ago many of the mines were still working on the basis of tax-free concessions and could have gone on producing had a market been available.
Does anyone think that a company such as INCO, with its huge portfolio, a company which now belongs to Standard Oil in the United States, is really in need of these special concessions? The profit which this corporation distributes to its shareholders is larger than the whole tax revenue of the Canadian government. It amounts to more than all the taxes needed to run Canada. Do we really need to allow such firms a tax concession enabling them to pick up 1,000 claims, say, and hold them for so many years? They will not develop them; they have no desire to do so. If they did the price of nickel might drop and this would not be in their interest.
We have just watched the progress of two finance bills through this house and a Philadelphia lawyer would be unable to sort out the gobbledygook which has been approved by the Department of Finance. The President of the Treasury Board (Mr. Benson) is here now. I congratulate him on the job he did while he was Minister of National Revenue. In fact, he is one of the few ministers who seemed to know what he was talking about in this field. Most of those who take over that department do not even get their feet wet, presumably because matters are so complicated there.
Hon. members will not have forgotten that it took us hours of discussion to arrive at any understanding about the definition of the
February 6, 1968

word "wagon" and reach agreement on a common name for such a simple thing as a box intended to carry grain. In the light of what was said during that discussion there is certainly a need for an overhaul of this department, a department which seems to belong to the establishment, about which Peter Newman writes about so well and about which the hon. member for Qu'Appelle (Mr. Hamilton) has spoken with such eloquence. It is a department in which members of parliament get lost. The language used by senior civil servants there appears to be a special language used to confuse us poor mortals who sometimes have the task of bringing some semblance of reason to it.
My last point concerns the taxation forms. I notice that some only apply to incomes below $8,000. I have watched good lawyers coming to parliament and introducing bills. Their attitude is: I intend to miss nothing so I will put everything in. The same kind of lawyers must have drawn up these forms. You can take them to an accountant but unless he is familiar with this type of accounting he will make no more sense out of them than you or I.
My education in mathematics may not be advanced. I have a certificate saying I have some proficiency in algebra, geometry and trigonometry, but I am unable to comprehend these forms. I do not see why one should add on the provincial tax and then deduct it again. If it makes no difference in the end, why not leave this out altogether? Not long ago 1 sent my form to the district office. They wrote back advising me they owed me a sum much larger than I had anticipated. Later they wrote saying they had reviewed the form and had come to the conclusion that I owed them a certain amount of money. I sent it to them. Later they sent a third letter informing me they had recalculated the amount due and were sending me a refund. I was glad when the end of that year came. I could not be sure whether my original calculation had been correct or whether the department was playing games.
In any event, these forms are far too complicated. If we are to have them, let us put the calculation table up to $20,000 or have an additional sheet provided so that the calculation is done as far as possible by the department, not by the individual taxpayer. It is bad enough having to pay without having to do the calculations as well.
I remember the Minister of Finance suggesting that the form would be simplified last year. If he finds last year's form simpler than
Income Tax Act
the form sent out a year earlier, I am at a loss to understand what he means by simplification. According to the legal dictionary he uses, it must mean complication. The department could at least simplify the form to the extent of making it directly applicable to each of the provinces. If a taxpayer pays his taxes in Ontario, send him a form applicable to Ontario. Do the same in Quebec and in the other provinces. Let us not make the form applicable to all the provinces and tell the taxpayer: If you are in Ontario you do this, but if you are in Quebec you must do something else. These forms must be confusing to the public because they are certainly confusing to me.
I hope the government will consider the whole question of income ceilings and deductions allowed to the individual. While it is no doubt important to control inflation there are those who believe that imposing additional taxation on the little man may not be the whole solution. If we are asking the ordinary taxpayers to make a contribution toward controlling inflation, let it apply to everyone. Let us place some control on the activities of certain of these large companies which exploit consumers, and reduce the advantages which people at the top range of the scale seem to enjoy. This may affect members of parliament. It may affect many of those who are involved in the drafting of this legislation and the recommendations which go before the Minister of Finance. But if we are seeking to halt the inflationary trend in Canada by imposing additional burdens only on the little man we may find we have killed the goose which lays the golden eggs rather than protected the goose so that it can provide wealth for many years to come.


Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I should like to open my remarks on this budgetary legislation by stating flatly that it would never have been necessary to consider legislation of this nature at this time were it not for the pig-headed conviction of this government that it is always right and the arrogance of the Minister of Finance (Mr. Sharp) in clinging to his own theories of how much public expenditure the Canadian economy can stand. Under the rules of this house I am prevented from attributing motives to any other member, but it appears to me at least to be possible that the economic conditions which made this interim budget necessary were aggravated by a reluctance on the part of the government and the minister to admit until too late that

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Income Tax Act
something needed correction. I believe that both the government and the minister deliberately ignored the storm signals in the hope that the tempest would pass before they had to undertake any measures that might be politically unpopular. After all, tax increases and other repressive measures are not the best platform upon which to go to the country or upon which to seek higher office.
[DOT] (5:10 p.m.)
The governor of the Bank of Canada, Mr. Louis Rasminsky, made it very clear in a speech in Winnipeg last November that Canada is fortunate in having within its own capacity a greater degree of power to deal with its economic problems than do many other countries among the 106 represented in the membership of the International Monetary Fund and the World Bank. He drew to the attention of his audience the fact that more than half these countries have an average income per head of less than $250 a year. Canada's is better than $2,500. He mentioned that our standard of living and the level of government service in Canada were among the highest in the world. It was shocking, he said, for Canadians to find themselves suddenly in economic difficulties, and I quote:
__because of efforts to increase our incomes and
our use of government services at an even faster rate than can be justified by the great expansion of our real output.
This indicates to me that the root of our economic troubles lies squarely with excessive government spending that has outstripped the ability of Canadian production to sustain. When we add this irresponsible and apparently uncontrolled rate of government expenditure to government interference with industry's ability and will to produce, we can see that all the minister's belated, corrective measures do not strike at the root of the trouble. A speed-up in payment of corporation taxes and an increase of 5 per cent in the income tax of the small taxpayer are hardly likely to go far in offsetting wasteful government expenditure and the government's resort to instant money to bail it out of trouble.
According to the publication Canadian Business for June of last year, government spending in 1966 went up a whopping 16.5 per cent. It went up approximately another 15 per cent last year. According to the minister's own modest estimate, and in spite of the so-called economies in the forthcoming estimates, it will go up another 4.5 per cent next year. When we total these increases we have [Mr. Crouse.l
something like a 36 per cent increase in three years.
These figures do not include the cost connected with the implementation of the medicare scheme due to come into effect on July 1. Neither do they take into consideration other odd items such as the $80 million loan to Expo, which the minister now explains away as a mere bookkeeping entry that does not affect the economic picture. But the fact remains that someone has lent $80 million to someone. That is the way I keep my books, Mr. Speaker; that is the way I keep my records. Unless and until that loan is repaid someone is out of pocket to the tune of $80 million. I have been told that this $80 million loan now stands as an asset on the books of Canada. This can only be justified if there is some prospect of the loan being repaid. What will really happen of course, and the only thing that can happen, is that this loan will be written off. How $80 million in tax money can be made to disappear into thin air, even by such a slick sleight-of-hand operator as the Minister of Finance, I cannot see.
In his speech at Winnipeg Mr. Rasminsky drew attention to the tremendous economic growth of Canada that started in 1961. You will recall, Mr. Speaker, that this was well before the period for which the Minister of Finance can claim any credit. In fact, it was the rosy prospect of the industrial picture of those days that lured the minister from a top position in the public service to the boardroom of one of Canada's industrial giants. Those were Conservative days, Mr. Speaker, the days of Conservative policies, the days of a Conservative government. According to the governor of the Bank of Canada those policies and those ministers produced a 40 per cent increase in our national output and "greatly strengthened the economic foundations of the country."
In the five year period from the spring of 1961 our real output increased at a rate of 6J per cent. It was under the sway of the present Minister of Finance that this sweet taste of success started to turn sour. Our ship of state started to list a little bit, I do not know whether to starboard or port, from too much bilgewater. It is true that since the spring of 1966 this growth continued, but at a greatly reduced rate, 2 per cent to 2i per cent "-well below our potential for growth," again to quote Mr. Rasminsky.
What was the worm in the core of our economic apple, eating away and draining off three-quarters of the benefit of growth? We
February 6, 1968

now know it was inflation. Whence came this inflation and what gave it its greatest impetus? You have the word of practically every leading economist for that, Mr. Speaker. It was reckless, wasteful spending by the government. Not content with squandering public money at a spendthrift's pace the government imposed, by polite blackmail, upon the provinces schemes that forced them to spend at an equally high rate.
In reviewing the economy in his Winnipeg speech Mr. Rasminsky admitted that the most worrisome aspect of our present problems was the accelerating cost-price spiral-inflation, the bogeyman which this legislation hopes to kill. Mr. Rasminsky said that during the early, or Conservative, years of the expansion period costs and prices remained in satisfactory equilibrium. Since there has been a "marked deterioration." The rate of increase in the consumer price index has doubled in recent years from about 2 per cent to 4 per cent.
Why has the government, why has the Minister of Finance allowed things to get out of hand? It is clear, Mr. Speaker, that this is not a new condition. The warning light has been glowing for many months. Not only did the government and the minister ignore the warning light but they closed their eyes and pushed their feet down hard on the expenditure pedal.
Motorcycle racers talk about a speed wobble, an uncontrollable swaying of the machine when it reaches very high speeds. Many drivers claim the only way to correct it is not by braking but by opening the throttle to the full and accelerating out of the wobble. Others claim that this does not work and a pile-up is inevitable. The government's approach to expenditure of tax dollars falls into this latter class. It has tried to spend its way out of the economic wobble but instead of pulling out of the wobble it is teetering on the edge of the fence, and unless the minister and his colleagues can come up quickly with something better than a remedy culled from the old alamanac they are liable to pile us all up in economic ruin.
I believe that the minister and the government stand indicted before the Canadian public for mismanagement of the economy and for dereliction of duty. They have stubbornly refused to heed warnings of trouble. They have arrogantly persisted in their spendthrift ways. They have failed to honour their election pledges of economy of government, moderation in spending, and tax relief for the
Incovie Tax Act
hardpressed Canadian taxpayer. In my belief the measures brought forward by the minister were neither fair nor adequate, timely enough or far-reaching enough. It is my Arm conviction that instead of imposing fresh burdens on the already overburdened small taxpayers the minister should have concentrated his efforts on fighting inflation by persuading his colleagues to moderate their expenditure of public moneys.
[DOT] (5:20 p.m.)


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, I wish to comment on some of the remarks made by the hon. member for Timiskaming (Mr. Peters), particularly his reference to the use of the income tax as a means to subsidize certain areas. He drew attention in particular to the effect of the three-year tax exemption which is provided for new mines through the Financial Administration Act. This came into effect as a concession to northern areas, as a means of spurring them to show some growth in the late 1930's when the mining industry was in a very bad situation. Since that time the three-year tax exemption has become one of the concessions prized by the mining industry. In. their comments with regard to the Carter commission report the representatives of the mining industry have very vigorously defended these concessions. They pointed out that mining is a high risk activity and indicated the danger to the industry in Canada if these concessions were removed.
I hold no brief for the mining industry, but as a representative from northern Ontario it seems to me that it was very unpolitic for the hon. member for Timiskaming to make such a suggestion. The surprising thing is that a few months ago when the Area Development Incentives Act was up for review before the standing committee on industry, research and energy development, the hon. member for Timiskaming was very eloquent indeed in urging the extension of the benefits of that act to his area. I was also very interested in that matter. In the revaluations of the various regions, his area was included and mine was not because, unfortunately, my area seemed to be doing much better economically than his.
The point I should like to make is simply that the benefits received under the Area Development Incentives Act are almost identical in respect of new industry with the three-year tax exemption allowed to new mining developments under the Financial Administration Act. I thought it was an unusual

February 6, 1968
Income Tax Act
position that the hon. member took in this regard.


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, as the hon. member for Timiskaming (Mr. Peters) has pointed out, our objection to this legislation is that its impact falls much too heavily on the people who are least able to bear it. I believe there is need for a modification in respect of the *deductions for certain groups of people. I shall not attempt to deal with all the groups of people who need deductions but I should like to mention two which I have mentioned before.
The minister always has been very courteous and has promised that consideration will be given to the matter. I should now like to see some evidence that consideration has been given. The people who repeatedly appeal to us are exceedingly tired of listening to the minister and then having full hearts and empty hands. In view of the fact that at least two members of the cabinet have been going around making statements which indicate that they do not believe that the present taxation system is suitable and have been advocating the need for a guaranteed income in order to protect people on low incomes, I think there should be some reason for reconsideration by the Minister of Finance (Mr. Sharp) of this taxation legislation.
I suggest there is one great and growing group of people across this country who are being penalized. I refer to those who have been left as a single parent in a family and are the sole means of support for their families. I know personally of at least three groups across Canada but there are many others. On the west coast we have the Ah Alone Parents organization. This group is composed of men or women who have been left on their own with the full responsibility for the support of their families. In another part of Canada we have Single Parents Associated and here in Ontario Parents Without Partners. The people in these groups are all men or women who have been left in the position of having to undertake the maintenance of a home on their own. I think we must come to grips with the question of whether the home is an important institution or whether we want to throw it in the ash can. Today we give lip service to the home on Mother's day. At other times we do not seem to care what happens to it. We seem to take it for granted that the home is some kind of air terminal from which planes take off one after the other and leave the place for anyone who
IMr. Reid.]
comes along. This is the position we appear to take in respect of home life. The father goes out to work and in increasing numbers today the mother also goes out to work and the children are left far too much to their own devices. Then we wonder about the increase in delinquency and the people who fall into the ways of the hippies, drug addicts and so on. We wonder why these things happen and yet do very little to see that these homes are protected.
These single parents have a very difficult time getting along. At Christmas time I met with a group of these people on the west coast. They told me of their difficulties. One is that there is no provision by way of income tax exemption for payments to babysitters or housekeepers. This is the situation whether it happens to be a man or a woman who is involved. The national legal adviser of Parents Without Partners in Toronto said some time ago that an estimated 30,000 single parents in Toronto would be affected by income tax deductions for babysitters or housekeepers. This was a year or two ago, so now the number would be greater. He said that statistics indicated that in 1961 there were 2,800 deserted wives in Ontario receiving public assistance through welfare, with an average of four children per wife. He went on to say that the Dominion Bureau of Statistics shows there are five times that number in Ontario who are not receiving public support. Then he pointed out that single parents have to hire housekeepers and the income tax department does not allow this cost as an expense.
I should like to quote the following paragraph in order to give hon. members an idea of how the people across this country think. I believe it is our business in this House of Commons to state what our constituents and the people across this country believe is needed. This is what he said:
If the minister will allow me $50 to take John Doe, a client, to dinner to get his business surely he should allow a wife who hires a babysitter because she has to work the same consideration.
He stated that he had spoken to one of the chief assessors in the income tax department who told him that he hoped such an allowance would never be permitted "because it would create too many problems". If we are to refuse this type of help to these parents because income tax officials cannot bear the burden of coping with the problem, then I think it might be time to change our civil servants or possibly bring in computers in their place, despite the story in the papers
February 6, 1968

today about the computer which gave one housewife a terrific family allowance payment.
Nothing should stand in the way of these parents being given the relief they require. One woman with three children told me that she could get along with paying $25 a week for a babysitter but that it is more difficult for a father. Some men are now paying $60 to $100 a week just for a housekeeper. In many instances this is being done on wages which are much less than they should be. The only minister present at this moment who seems to hold a portfolio in any way connected with income tax is the minister responsible for housing. I urge the minister to see that another look is taken at this problem.
[DOT] (5:30 p.m.)
This brings me to another large group which is growing very rapidly. I refer to mothers who are working outside the home, particularly those with preschool children who are left at home under arrangements less than satisfactory because of the high cost of babysitters and housekeepers. For many years the annual reports of groups such as the Business and Professional Women's Club, and the National Council of Women have been urging that income taxes should be geared so as to permit married women who are gainfully employed in occupations outside the home to claim an exemption in respect of the cost of babysitters and housekeepers. This is becoming tremendously important.
The other day I heard a figure mentioned in respect of the number of married women with preschool children who are gainfully employed outside the home. I was so surprised I had to check it before believing it. At the present time 70 per cent of married women who are gainfully employed outside the home and who have children of preschool age have husbands who are earning less than $3,000 per year. Is it any wonder women go out to work?
It is a fact that professional women, often married to men with salaries in the high brackets, go out to work to fulfil their careers in the fields of their choice. Women in the low income group to which I have referred go out to work for only one reason. They go out to earn enough money to pay the grocery bill or to purchase some of the amenities necessary to today's standard of living. These women need relief far more than many businessmen who are allowed to make business deductions for income tax purposes. It is high time we faced up to the implications of
Income Tax Act
women who have to go out to work and have to pay babysitters or housekeepers to look after their small children. The only way this relief can be provided is through an exemption under the Income Tax Act.
On more than one occasion I have suggested that married women with children should be allowed to make a choice whether they go out to work or stay at home to look after their families. Many of these women do not have that choice because there is not enough money coming into the house to support the family in even a modest way. My suggestion of providing allowances for full-time mothers has been looked upon as ridiculous, out on cloud cuckoo, and impossible from a financial point of view. I have suggested to the minister one other way it would be possible for these women to care for their children. That is by being allowed to deduct the expense of babysitters and housekeepers, incurred while they are out working to supplement the incomes of their husbands.
Apparently we in Canada cannot attempt to implement many programs until they have been proved workable in some other country. It may be interesting to hon. members to learn that for several years in the United States the internal revenue service has allowed working mothers a tax exemption of $600 a year to offset child care expenses. I hope very much that this exemption has been increased. The minister shakes his head. I hope that does not mean the exemption has been decreased. In any event $600 is a small amount to cover the cost of looking after children while the mother works.
We learned this afternoon of a reduction of some kind in the civil defence establishment. If we reduced civil defence costs a great deal more and used that money to cover child care expenses I think we would gain something worth while in respect of civil defence. I do not suggest we should not spend money on civil defence in regard to fires, disasters, floods and so on, but proper child care would pay greater dividends.
I wish I could get members of this house to realize, as they must in some part of then-minds, how very bad our national housekeeping is when little children are left at home without supervision or with just the supervision of a neighbour who keeps an eye on them. One must remember all the things that can happen to those children while their parents are away.
It is my hope the minister will at least tell me why an exemption has not been allowed

February 6, 1968
Income Tax Act
in respect of these expenses. I hope he will indicate that the department will look into this matter rather than give me a sweet word of encouragement by saying it will receive serious consideration. I have learned that serious consideration often means the minister thinks there is no immediate need to look into the problem. This is a serious matter because a great many of these people are becoming desperate. We have now reached a new stage of development with an increasing number of homemakers employed outside the home. Something will have to be done for the benefit of these young children who are being left at home without adequate supervision.


Mr. Robert McCleave (Halifax):: Mr. Speaker, I wish to make two simple arguments in favour of an increase in exemptions and I ask the President of the Treasury Board (Mr. Benson), in the absence of the Minister of Finance (Mr. Sharp), to pass these arguments along. I suppose the President of the Treasury Board is in attendance because the Minister of Finance is grooming that hon. gentleman for bigger things should a certain event happen in early April. I would be interested to hear the forecast of the President of the Treasury Board in that regard, and I will cheerfully yield the floor to him for that purpose.


Edgar John Benson: On a question of privilege, Mr. Speaker, let me say that most members realize the Minister of Finance had to attend the federal-provincial conference this afternoon because matters pertaining to finance were raised. I am simply here as Acting Minister of Finance to take his place.


Robert Jardine McCleave: I meant no reflection on the Minister of Finance. We all know he is a very busy gentleman. I had hoped the President of the Treasury Board would rise to the bait and give a forecast of what might happen. Again the minister shakes his head.
Let me return to my arguments in favour of increased exemptions. I refer first of all to those on fixed incomes who in their old age are not able to earn extra money. Most of them are spending their limited incomes on rent, clothing, food and medical expenses. Any increase in the cost of any of these commodities or services as a result of inflation means a cut-back for them. These people must find cheaper accommodation, wear their clothing longer or eat less. Usually such cutbacks occur in respect of food. I think an increase in exemptions for these people is justified and could be a useful tool in the fight

against the evils of inflation. I am personally aware of a number of people in my own area who have been forced to sell their homes in order to carry on through the home-stretch of their lives. This is a pernicious situation.
The other argument I wish the President of the Treasury Board to pass on to the Minister of Finance is based on the fact that the exemptions now in existence do not bear a reasonable relationship to the war on poverty now supposedly being carried out by various departments of government, particularly those associated with welfare. It seems to me that the exemptions which are granted do not bear a fair relationship to these poverty levels. Surely this is a good reason for increasing exemptions.
[DOT] (5:40 p.m.)


Edward Nasserden: Mr. Speaker, this is really too good an opportunity to pass up to return some of the compliments we have had from time to time from members on the other side of the house and to discuss the factors which made necessary the action taken by the government last fall in bringing forward these income tax amendments. The action of the government in this respect speaks more eloquently than we or anybody else in this country can of the failure of those charged with responsibility to discharge it in a responsible manner.
To realize this one has only to read the editorials that have appeared for several months now in the leading newspapers across Canada. When one reads these editorials one realizes that confidence in the government has been severely shaken. When we consider the extent to which the government chose to act in the tax proposals it brought forward last fall, we cannot help but realize that all the government has tried to do is create the image that it is coming to grips with the important problems which face Canadians at the present time. But the fact is, sir, that Canadians from one end of Canada to the other realize that all this government has tried to do is create a facade that it is doing something to solve these problems, at the same time hoping that something will happen to correct them.
I am particularly interested in this matter because my mind goes back to 1963 when the present government came into office. I have here a clipping from the Ottawa Citizen of April 18, 1963. The headline reads "Pearson
February 6, 1968

February 6, 1968
Income Tax Act
productive than we have been in years gone by. It is robbing the individual wage earner of the value of his purchasing dollar.
We are now told that this problem will be solved by increasing income tax and other taxes. We can come to only one of two conclusions, that the minister and the government do not know what the effect of their actions will be or they do not care. This is a very sad situation indeed for the average Canadian citizen.
The other factor that has entered into this situation is the lagging grain sales during the past year. We recall that when the government first came to office and the Minister of Finance was charged with responsibility for the Canadian Wheat Board he washed his hands of all responsibility with respect to the final sales of grain. He went across this country and then told the world that the Canadian Wheat Board would be the sole marketing agency for grain. The fact is that as a result of all that has happened we have lost markets and the loss of sales has had a detrimental effect on our economy. This is one of the reasons the government has had to come to parliament cap in hand or try to get more tax money. They have done so time after time, budget after budget. There have been more budgets in the course of a year than any government has ever presented before, all of them designed for one purpose, to reach for another dollar which was then misspent.
[DOT] (5:50 p.m.)
These are some of the things we have to take into consideration when we study the income tax amendments now before the house. These are the things we must remember when we see such newspaper headlines as one which appeared in bold letters on January 18, 1968, reading, "Living Costs Still Rising". Another such headline appeared in the Toronto Star of December 19, 1967, which read "Civil Service Payrolls Could Bankrupt Canada, Economic Expert Warns". Then we see in the headlines in today's newspaper that there is to be another increase for the public service. I do not object to the increase but I object to the type of mentality evidenced by a government which is building empire after empire in its various departments and hires 20,000 or more public servants in a short period of time at a time when this nation is under stress and trained labour is short. All of these factors have combined to bring about a colossal failure on the part of parliament and the Canadian government to meet the problems of the future. There is no one in the house

who does not realize the tremendous problems which will face governments in the years ahead in trying to turn back the pages of history written by this government and to bring about sane and stable government.
In looking at the measure now before us I am convinced it will not solve the problems I have mentioned, and I believe the minister himself knows this. All that the government has tried to do is to create a facade to try to convince Canadians, and Canadian business in particular, that there is reason for placing confidence in the government even though it has disregarded the criticism and advice offered to it by business and by members of the opposition. The fact is that sitting opposite us is a government which, in the opinion of some of its own members, has not consulted them in caucus before taking decisions. Surely some of the government members have realized the tremendous problems which have faced us and the effects which the sales tax and the removal of the ceiling on interest rates have had on the economy.


Mr. Speaker:: Order, please. I must remind the hon. member that we are now dealing with a bill to amend the Income Tax Act. Perhaps he might give this some thought in the course of his speech.


Edward Nasserden: Thank you, Mr. Speaker, but I assure you that this piece of legislation would not have been necessary had it not been for the mistakes which the government has made in the last three years and about which they were warned. This is why we in the opposition wish to call their attention once again to the need to take more resolute action than they have in the measure now before us.
I should like to be able to pay some compliments to the government on the action it has taken but, frankly, when I look at what is happening in this country and when I realize that it all seems to be part of a pattern deliberately set by the government, it does not seem possible.
We can see that this situation has been going on for years by going back to 1963 when broad party policies were being spelled out in programs. Let us also take a look at the rapid changes which have taken place in this country. It is no wonder the government cannot solve the problems of today; they are still trying to solve these problems with solutions which they thought they had 5, 10 or 15 years ago. This is not good enough in a country developing as rapidly as ours is today,
February 6, 1968

both in industry and private life, and when there is a great change from a rural to an urban economy.
The government is now coming forward and asking for an increase in the income tax. There is nothing in their program to help the municipalities which are faced with the greatest tax increase in the entire history of this country. Let us also consider another factor, the rising cost of living which continues to increase despite the appointment of a minister of the crown in charge of consumer and corporate affairs. When I asked the minister whether his department was going to study the effects of the rising interest rates he denied that his department was charged with that responsibility. If that is so, then why was the department set up if not to take into consideration one of the most important factors in the economic life of our country?
Let us face the fact that the effect of the government's actions has been to reduce the productivity of our nation and of our workers at a time when our products face great competition in world markets. What hope is there for the Canadian people when we have a government such as the present one? This is one of the reasons why we on this side of the house cannot help but condemn the government for the actions they have taken and, what is more important, for what they have not done in the face of these problems. It cannot be said that the government lacked advice. They have hired everyone in Canada they could to help them set up these little empires.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: It is my duty, pursuant to standing order 39A, to inform the house that the questions to be raised at ten o'clock this day are as follows: The hon. member for Winnipeg North Centre (Mr. Knowles), Administration of Justice-Steven Truscott- consideration of granting of parole; the hon. member for Gaspe (Mr. Keays), Manpower-inquiry as to training program; the hon. member for Burnaby-Richmond (Mr. Prittie),	Housing-Vancouver-construction
of home for senior citizens.
It being six o'clock the sitting is suspended until eight o'clock.
At six o'clock the house took recess.
Income Tax Act AFTER RECESS
The house resumed at 8 p.m.


[Stage Direction]
The house resumed consideration of the motion of Mr. Sharp for the second reading of Bill No. C-193, to amend the Income Tax Act.
Edward Nasserden: Mr. Speaker, before the dinner hour I was dealing with some of the phenomena that have taken place during the last three years that finally brought about the chaotic financial position in which the government finds itself today. During the past two years in particular there has been an increasingly severe trend toward increased taxation.
We have before us at the present time a bill introduced by the Minister of Finance (Mr. Sharp) to increase income taxes. This has become necessary because of the problems now facing the nation, such as inflation, the rising cost of living, receding productivity and the increasing burden of government itself.
This takes me back to the days before this government came into office, when parliament and the Canadian people were being told how to restore Canada's position in the world and our economy at home. According to a report before me from the Ottawa Citizen of April 20, 1963 the Liberals set out seven ways to restore Canada's position in the world. The first of these was to demonstrate that Canada has a strong government at home. In view of what has happened during the last two or three years in particular, and the groping that we have seen from the finance portfolio of this government, it is interesting to reflect on this headline and to wonder as to the substance for this sort of report. I suggest that one of the reasons this measure is before us tonight is that once again the government is seeking additional money to replace money it has misspent, frittered away. It is in this position not only because of the things it did but because of the things it did not do.
The headline in the Ottawa Journal for February 12, 1963 reads "Grits want more government projects", which according to the Journal are to be at no cost to taxpayers. The article goes on to say that-
-the national council of the Liberal federation came out straight for more government sponsored projects to ease unemployment, more aid to municipalities, loans, an enlarged Central Mortgage and Housing Corporation-

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Income Tax Act
Today we have the highest interest rate in the entire history of this country.
-continuing family allowances to children through high school, and a comprehensive health insurance plan where the federal government would take on half the cost of Canada's medical care.
This is the point I want to impress upon hon, members tonight:
They said none of it would cost the taxpayers snore. But it will mean increased government borrowing, a Liberal spokesman admitted later.
In view of this, Mr. Speaker, why is this measure before us this evening? It is my belief that this taxation measure is before parliament at the present time because the government cannot borrow money today in Canada, even in the world, in order to meet the problems they face. In 1963 the Liberals were talking about getting the economy rolling, yet today they admit it began rolling in 1961.
Quoting again from the article, one Liberal delegate from Toronto-
-criticized his own party's policy by saying that nearly all the measures proposed suggested easy money and a "steady outward flow from the federal treasury" over an indefinite period, with no indication of where the money would come from.
Truer words, Mr. Speaker, were never spoken. We know tonight where the money is coming from; it is coming from the taxpayers of Canada. In the early days of the administration opposite hon. members will recall that the opposition was charged with obstruction. Reports in the newspapers indicate a different story. I have before me the Winnipeg Tribune for June 19, 1963, which carried an article which said, in part:
But the Liberals were in a poor position to raise the familiar Tory cry of obstruction. The pace of the house was no slower-and in some cases faster -than when they sat in opposition to a Conservative minority government.
The Winnipeg Tribune carried another article in its issue for October 31, 1963, a time prior to the Minister of Finance having any ambitions about becoming prime minister of this country. In those days he was minister of trade and commerce. Speaking at Winnipeg, I think it was, he is reported by the Winnipeg Tribune as admitting that at times his government's performance "had not been too impressive". The article says:
There had been false starts. But the Liberals had the right approach to major national issues.
The minister admitted there had been false starts, but I suggest those false starts laid the foundation for the current problems that face the nation.
[Mr. Nasserden.l
I should like to recall to the house what the Glassco commission-


Mr. Speaker:: Order. I took the liberty earlier today of bringing to the attention of the hon. member the fact that there is a bill before the house to amend the Income Tax Act. It seems to me that the hon. member has been departing rather far from the principle of the bill before us, but I hope that at some time before he concludes his speech he will make a contribution that is relevant to the bill.


Edward Nasserden: Mr. Speaker, I do not know what could be more apropos of what is under consideration at the present time than to try to bring to light the reasons we are faced with this particular measure at this time. In doing so I should like to go back to the recommendations made by the Glassco commission to the parliament of Canada. I have before me a headline in the Toronto Globe and Mail for October 29, 1963 which says "$300 million saving feasible in civil service, Glassco says".
Now, Mr. Speaker, what has been happening in the civil service under the administration of this government? Costs have gone up. Not only that, but the government itself admitted during the debate on the mini-budget and the budget that preceded it that it had a real problem on its hands. It has also been suggested that the action taken to date has in no way measured up to the seriousness of this particular problem.
[DOT] (8:10 p.m.)
Let us consider housing. After all, by raising income taxes we raise the cost of living for our people, and that will have an effect on our housing. I well recall what was said by the leader of the Liberal party in the Senate before this government came to office in 1961.


Mr. Speaker:: Order, please. Apparently my suggestions do not seem to influence the hon. member very much. Nevertheless I suggest to him that housing, so far as I can see, has little relation to the bill before the house.


Edward Nasserden: Mr. Speaker, I do not disagree with Your Honour. Yet when income taxes for those who are seeking houses are raised deliberately, their ability to pay for those houses is affected. Increased taxes mean an increased cost of living for our people, and I think that the provisions of this bill ought to be drawn to the attention of the house.
February 6, 1968

We are sent to parliament to try to obtain a better life for our people. We are sent here to enable our people to utilize all the resources of this country. I realize, as does every other member of the House of Commons, that government must tax in order to provide services that are necessary for our people. Nevertheless it is generally understood throughout the length and breadth of this country that certain matters can be dispensed with, that certain items add to the cost of government and raise the cost of living of our citizens.
Before the dinner adjournment I spoke of two factors that had contributed most to our present labour unrest. And, Mr. Speaker, we have labour unrest in this country because of what this government has done. The increases in income tax the government is proposing to levy will have the effect of making labour seek higher wages. This will mean an increasingly rapid upward spiral in our cost of living, and that is why I question the government's wisdom in bringing forward this measure-because it steals something from the man who carries a dinner pail. This measure will force prices up to the extent that many commodities will be out of reach of the ordinary citizens of this country.
Realizing all this, members of the opposition of the House of Commons have lost confidence in the government, as have the businessmen of this country.


Mr. Alkenbrack:: Hear, hear.


Edward Nasserden: The few measures the government has put forward do not come to grips with the problems that face this nation. I think that raising income taxes for our citizens is wrong; that will not achieve the purpose the government intended to achieve. This measure will have serious consequences for the future of our nation and instead of helping to solve our problems will accentuate them and make their solution more difficult. That is the bleak prospect that faces us today! No matter which government is in office, whether it be this government or some other! the problems of our nation must be faced and solved, and they will not be solved by measures such as this.
Just take a look at the decisions made by this government and at the results of those decisions. Today we have the highest cost of living in Canada's history; today the government is proposing income tax increases; today the government, through its actions, is whittling away the supply of money that is necessary to provide the houses and other essential
Income Tax Act
commodities of this country. When the Minister of Finance says that by removing the interest rate ceiling there will be a bountiful supply of money for housing I just ask him, whether any banker in his right mind would tie up his bank's money in housing for 30 years when the bank can go after more lucrative business? I submit that this government measure is wrong because it is based on a false economic premise.
Look at the mounting costs of government in this country, Mr. Speaker, and at the little empires within the government that are being built up. Nevertheless we were told in this house not long ago that the government would effect savings in government spending. The government said it would not spend as much money as it had intended spending. All I can say is that the government has proposed too little too late. It has not even begun to touch the problems that face our nation. I regret to say this, but what the government is doing will be bad for Canada; and I do not think many of our people would quarrel with what I say. I hope the government once in a while will listen to members of the opposition and to its own backbenchers. Had they listened to the opposition more during the past two years this country might not face the difficulties it faces at present and Canadians might not have to pay the additional taxes the federal government is seeking to levy.


J.-H.-Théogène Ricard: Mr. Speaker, I do not intend to take up too much of the time of the house. However, like my friend from Rosthem (Mr. Nasserden), I cannot miss this opportunity to remind the Minister of Finance (Mr. Sharp) how unpopular is his present proposal in the eyes of the average retired citizens who live on a fixed income.
Factory workers were certainly expecting something other than the present tax increase proposed by the Minister of Finance. On the contrary, being practical, they were expecting the government to announce, through the Minister of Finance, a decrease in its extravagant expenditures and restraint also in the employment of civil servants whose numbers seem to be increasing at an alarming rate every month.
But, instead of that, the hon. minister announces a tax increase. Moreover, he tells us that he will have to impose another tax in a few months.

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Income Tax Act
It is very difficult for the father of a family to make ends meet at the end of the year because, on one hand, the average worker must face an ever-increasing cost of living, the highest cost of living in all the history of our country and, on the other hand, he also must cope with an income tax increase, with the comforting thought that perhaps, in a few months, he will have to pay out more as a result of greater deductions which will be made on his pay check every week.
As my hon. friend from Rosthern mentioned, the hon. minister should pay attention instead to the warnings given by this side of the house and by his Liberal colleagues who surely, in private of course, warned him that he could not continue, as he has done to date, to add to the difficulties of the middle-class worker. The young man who plans to build his own home is faced with innumerable difficulties. Yesterday, I saw in a newspaper that, in the province of Quebec alone, building costs have gone up by 28 per cent. That is due to the continuous increase of income taxes and also of taxes on building materials.
[DOT] (8:20 p.m.)
On various occasions, we have attempted to convince the hon. minister that, instead of raising taxes, he should rather endeavour to reduce them, but he has remained deaf to our appeals. It is somewhat as if we were pouring water on the back of a duck.
I referred earlier to what is in store for our retired people who have to provide for themselves with an income which has not changed for several years. Those citizens have now reached the age where they cannot find work to increase their income. From one week to the next, from one month to the next, they find it increasingly difficult to satisfy their needs.
In that respect, I have here a letter signed by Mr. Hubert Lecours, president of the national association of retired federal civil servants, Quebec section, which reads as follows:
Sir,
At a recent meeting, X was asked to tell you how we feel about the freezing of pensions to retired civil servants.
We protest vigorously against that decision taken by the government which is not only unfair but revolting and unacceptable in the present economic and economic conditions.
We would appreciate it very much if you would second the efforts of the Prime Minister who has promised a review of that shameful and undignified decision in the very near future.
Counting on your support, I remain, yours sincerely.

Before concluding, I would like to intercede on behalf of pensioners and superannuated civil servants whose revenue has not changed for many years. I would ask the Minister of Finance to see to it that these retired people, these deserving employees, who devoted the best part of their life to the welfare of their fellow-citizens, enjoy a pension enabling them to meet their present obligations. The minister should show more concern for superannuated civil servants who can hardly make both ends meet to-day. In doing this he would please not only those citizens, but also some members on both sides of the house.
Therefore, I ask the hon. minister to take steps to put an end to these continual tax increases and, on the other hand, to give a little more attention to retired civil servants.


Mr. Bud Germa (Sudbury):: I listened with interest to the hon. member for Rosthern (Mr. Nasserden) and I am surprised he would criticize this bill to such an extent without criticizing it for the reasons for which it deserves criticism.
I notice he made profuse reference to editorials from various newspapers, the Toronto Star in particular, and I suppose it is because he used these newspapers as his advisors that he criticized this bill for the wrong reasons. I too take advantage of these editorials but I use them in the opposite way; whenever I am in doubt about a certain issue I read the editorials, and I find that if I do exactly the opposite to what they advise I come out right pretty well 100 per cent of the time.
I agree there is lack of confidence in the government. There is a conference in progress now, designed to renew the confidence of the Canadian people in the Liberal party and in this parliament. I am surprised the government cannot instil this confidence. After all, they have been in the confidence racket all their lives and have been quite successful at it.
There is a saying in my riding of Sudbury that only poor people can enjoy poverty. This is true; and this bill is designed to ensure that these people shall have more enjoyment than they have ever had in their lives. I think it is the most dastardly piece of legislation I have seen in my short stay of six months in this house. The minister proposes to tax those who have least ability to pay. In one clause the tax is cut off at the $600 limit. I am not a mathematician but I think a man would
February 6, 1968

arrive at this position when he is earning $28,000 a year. After that, there is no tax on the amount of money above the $28,000. These are precisely the people who need exemptions! People earning more than $28,000 certainly need more privileges than they already possess!
This bill might have been written by the Canadian Manufacturers Association or by the chamber of commerce or even right here in the Rideau club. These are the people who would propose such legislation as this, in order to keep the workers in economic slavery. This is what the bill before us is designed to do-to deprive those already on a low rate of income of more and more of that income so that they will become economic slaves.
Dedication to hard work is perpetuated by various organizations. I think the minister must be reading the wrong books when he seeks to co-operate with these people and falls for the propaganda and drivel they have spouted over the last hundred years. In 1951 the chamber of commerce was urging us to work harder to produce more because our survival might depend upon how fast we could keep the wheels of industry turning in Canada. But for whose benefit did these people want the wheels of industry to turn faster? The minister goes along, making sure that the worker gets the work and that the money men get the money. This is what they call a 50-50 split.
[DOT] (8:30 p.m.)
We hear a good deal, also, about the nobility of work. Well, most of it, as 1 happen to know from 31 years in mining and smelting, is not noble. The only reason people work in mills and smelters is because they are forced to do so in order to feed their families. I heard a little story about this ennoblement of work. A very popular man in the United States, Bobby Kennedy, was campaigning in front of one of the filthy steel mills, shaking hands with the men coming out of the mill. One grizzled old veteran on his way out said, "I hear, sonny, you never worked a day in your fife." "Yes, sir," said Bobby, "1 never spent a day in my life in a place like this," and the veteran said, "Well, you haven't missed a God damned thing." That is what is going on in the mills and smelters on this continent, Mr. Speaker: You haven't missed a thing.
Recently a study was made of the taxation system in Canada. Mr. Carter, I believe a very wise and noble person, presented a
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report wherein he said that the tax system in Canada is one of the most unfair systems ever devised, and that 5 per cent of the people receive privileges at the expense of the other 95 per cent. I have a good idea who these 5 per cent of the privileged people are.
We talk about people's capitalism, and we are supposed to be receiving some of the benefits of that capitalism. But you and I, Mr. Speaker, know that only 10 per cent of the people own shares in corporations. If you deduct the people like myself who own one share, and people who own two shares like my friends, you will find that 2 per cent of the people control 98 per cent of the corporations, yet all our legislation seems designed to protect these 2 per cent who have us by the throat.
That is probably the reason why we do not have a capital gains tax in Canada. The only nation in the western world without a capital gains tax is this great country of ours. This generates people like Viola MacMillan and Mr. Justice Landreville who make great gobs of money, and it is all tax free. There is no justification for that type of exemption. It is not necessary.
There is another type of person who reaps benefit from our income tax legislation, and the minister could have done a favour to Canada if he had plugged this particular loophole. In this regard I speak of stock options given to members of boards of directors. It is a well known fact that people on the boards of various companies do not get an annual raise in pay because, as salary, it would be taxable. Instead, a means has been devised whereby they get a raise every year without having to pay their proper tax on it. It is known as a stock option.
These people are given an option to purchase stock at a fixed and given price any time they wish during the year. When they see the stock rise they can exercise their option. If they have an option on 10,000 shares and the market is up $5 a share they can go through a paper transaction, buy the stock at their option price, sell it at the board price and make $50,000 with ten minutes work. This is tax free because it is known as a capital gain. Such a device places a greater burden on people who make their living through wages alone, and these people comprise the vast majority of the population.
This bill rubs a little salt into the wound by charging the working man a 5 per cent increase on his payable taxes. Does anybody doubt where this increase, collected from the

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lower income worker, is going? It is going back to the corporations to repay them that refundable portion of tax taken off them two years ago. Further, it is going to pay them that back at 5 per cent interest. The money to be taken out of the workingman's pocket is to be given to the corporations in repayment for that refundable tax.
Never in my experience has a government come to me and said, "Will you lend me some money for two years and I will pay it back to you at 5 per cent interest." But this is precisely what the government is doing in this bill. The government has to refund the corporation tax, and to do so it is getting the money from the workingman.
For many years the resource industry has had a privileged position in our tax structure. Depletion allowances are provided for the oil and mining industry. If these allowances had been eliminated the federal treasury could have picked up an extra $150 million in the past year, money which could have paid the corporation refundable tax without necessitating this 5 per cent income surtax on wage earners.
There is another vicious exemption in our tax structure, namely the three year tax exemption given to new mines. I know of this exemption quite well, coming from the mining community of Sudbury where we have debated it long and hard over the past 15 or 20 years. We have come to the conclusion that this is a direct steal on the part of the mining companies. Those companies must have exercised a direct influence on this and previous governments. The law providing that exemption was passed 40 years ago, when mining was a dangerous, speculative game. Since there was such a high risk involved it was necessary to encourage mining companies; but things have changed in the last 40 years. People do not sink mining shafts in the ground any more unless they know in advance what tonnage of ore lies underneath, what its percentage of metal is, and what return they will get on their investment. But even though advances in technical knowledge have eliminated the high risk involved, the legislation has not been changed for 40 years. There is no justification for mining companies to enjoy this three year tax exemption at present. Today when companies undertake to develop an ore body they plan its development very carefully so that by the end of the three year period the ore is raped just about clean. When the time comes for them to pay taxes there is no ore left in the ground. Then

they move on to another ore body and repeat the process.
Insurance and finance companies are also enjoying a privileged status under our tax system. Despite revenues of $90 million, after paying dividends, policy fees and everything else, these companies pay tax on only $5 million of that, and last year our federal treasury collected only $2 million. If these companies lost their privileged position our treasury could have picked up $77 million, which would have gone a long way to offset the deficit financing that seems to be the rule at present.
[DOT] (8:40 p.m.)
There is another problem staring us in the face; that is the problem of supplying housing for our people. Part of the blame for the high cost of housing has been placed on the high cost of land. The reason for the high cost of land is that there are people who, with design, grab large tracts of land in areas where they know development will take place. After someone has paid the cost of installing sewers, services and roads all around this land in an area of 10, 20 or 100 acres the land value rises and the speculators come in and sell this land sometimes at a hundred fold profit over what they had paid for it. The people who need a bit of land in that particular community have no choice but to pay the price the speculator demands. The speculators of course do not have to pay income tax because this is called a capital gain.
If these transactions were not considered capital gains, more revenue would be collected for the treasury and land would be cheaper for the people who need to buy it in order to build a house. Without the capital gains provision, there would not be very much incentive for people like E. P. Taylor, who grabbed all of the township land near Malton airport, to go out and make this kind of a deal. In this case a person would not have to pay $10,000 or $12,000 for a 50 foot by 100 foot piece of land on which to build a home. It is a crying shame that land speculators are able to do this, without making a one penny contribution to the federal treasury. It is a complete and utter steal; it is banditry.
The corporations have done well for themselves through their control and direction of the old line parties. They have always held a privileged position in respect of travel and entertainment. Many people in the upper echelons in this country are living on their expense accounts. This expense account living
February 6, 1968

includes T-bone steaks, trips to Miami and California, or trips to Hawaii. So long as they make a phone call when they get there they can call it a business trip and it is tax free; it is charged out to the corporation. I am sure we all know of instances where people have taken their families along on such trips, where golf club dues are charged as a business expense, or where Christmas parties complete with T-bone steaks and booze are held in the board rooms. This is a direct charge on the people, who have to pay their full share of income tax because no provision is made for them.
There is no place on the income tax form for the average ordinary man where he can make any claim for entertainment expenses. When he entertains, he does so with the dollar on which he has already paid tax; But the privileged few do not have to do this. People who make money on the stock market are also exempt from taxation. There is no reason to my mind why a buck is not called a buck every time you see it. But we have the speculative dollar, the capital gains dollar and the earned dollar. The earned dollar takes the beating. There is the long dollar and the short dollar. They both look the same to me, except that I know one of them has a tax levied on it and the other has not.
Mr. Carter recommended redistribution of the entire tax burden. If this had been done the federal treasury could have counted on $523 million more in taxation in the past year. If there is a shortage of funds, I see no reason why those people who have the ability to pay are not charged this extra amount. Out of the $523 million, $270 million would have come from foreign corporations. This would have gone a long way toward buying back Canada.
The Prime Minister in his great pronouncement said that his goal in life is to try to buy Canada back, or gain control of our economy. What better way could this be done than by taxing these corporations $270 million more than they are paying now. The poor fellow who must pay a tax on all his earned income has very few exemptions. He can deduct his union dues of $60 a year, and $100 for general expenses if he happens to have a hospital bill, and so on. Other than that, however, he has no way in which he may deduct from his wages those items which he must purchase in order to earn his living. We know that every man in business or the professions who buys rubber bands, pen nibs, pencils and other articles deducts all these items because they have
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been purchased in order to help him carry on his business. No matter how small the item, it finds its way on to the income tax form as a tax deduction.
Let us compare this situation with the situation of the man who must labour for wages, particularly in the industry in which I was employed. He cannot deduct any item, even though it is necessary in his employment. He must provide himself with a hard hat which costs $11. He must provide himself with safety boots which cost $14. He must have gloves with an iron protector on the back. He must have spats on. He must have overalls and rainwear. This man must provide himself with all sorts of safety equipment, plus his tool bag. When he is dressed up he has probably spent $500 in order to be prepared to do his first day's work. He cannot deduct any of that $500 from his income tax. I say it is a disgrace that this situation should exist. These people who must buy these things as a condition of employment should be allowed to deduct such items as an expense in respect of their income tax.
This reminds me of an occasion when a group of people with whom I was employed were working in 40 below zero weather. They were up on a hill installing a transformer. The superintendent asked them how they could stay out in this weather, and one of them replied "There is nothing to it, if you spend $400 on clothes and bullet-proof underwear". There is no deduction for that. I hope that the next time the minister brings in an amendment to the Income Tax Act he will show some compassion for the people who have created the wealth which permits these other people to float around in the enjoyment of an expense account living.
[DOT] (8:50 p.m.)


Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, may I take the liberty, in thirty seconds, of drawing the attention of the house to the presence of the mayor of Arvida, one of the most beautiful cities in Canada, located in the constituency of Lapointe, also one of the finest in the country. All those who had the opportunity to visit Arvida know that it is one of the most beautiful in the country. It is a fine example of modern town-planning at its best, where everything is exceedingly clean. The city of Arvida also boasts a fine industry, the Aluminum Company of Canada. May I therefore be allowed to welcome the mayors of Arvida, of Chicoutimi, and of other

February 6, 1968
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municipalities of the Saguenay-Lake St. John area, in short, of several points in Quebec.


Some hon. Members:: Hear, hear.


Gilles Grégoire: Now, Mr. Speaker, after greeting these gentlemen I must deal with the bill before the house wherein are announced increases in taxes and income tax, by the following introductory words:
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Income tax and taxes are therefore increased. The Queen, on the advice of her ministers, decides to increase taxes.
Mr. Speaker, that is probably why the Liberals have said:	Let us get rid of the
monarchy, since the Queen is the one who enacts increases in income tax and other taxes. That is the case, and I should like to protest against those increases.
In his speech on November 30 last, the hon. Minister of Finance said, while announcing the tax increase: We need additional revenue and to this end we must find other sources of revenue. The country is developing. Productivity must increase. Public works must expand in order to alleviate unemployment. Additional sources of revenue are then needed.
As reported at page 4908 of Hansard for November 30, 1967, the Minister of Finance decreed an income tax increase which is already in force although it has yet to be passed. That might be the reason why Her Majesty decrees and when she does we start paying on the very same day, even if that decree is passed two or three months later by parliament. It is as if parliament had nothing to say in the matter. Her Majesty has decreed; that is the end of it and we start paying right away. Parliament will vote when it wants to, it does not matter; taxes are collected as soon as Her Majesty has so decreed.
In any event the Minister of Finance said on November 30 and I quote:
My officials estimate that this surtax will increase our revenues in the fiscal year 1968-69 by $185 million; the effect on the current year will be to increase our revenues by approximately $25 million.
Mr. Speaker, the Minister of Finance says that he needs $25 million, and he levies a surtax. If he needs that sum, very well, but I submit that he should take it elsewhere than in the pockets of Canadian citizens who are already overtaxed and whose income tax is

already very high. Let us find another source of income. I found one, and I make a suggestion to that effect to the minister, because-


Mr. Langlois (Chicoutimi):: Selling pencils?


Gilles Grégoire: No. Mr. Speaker, I will leave this kind of joking to the hon. member for Chicoutimi, and I will continue to be serious.
Mr. Speaker, can we imagine that the Minister of Finance who needs $25 million should overtax the Canadian public to get it. I found in the estimates of the minister another source of revenue which would enable him to save $26 million, which is a little more than the amount he needs.
In fact, on page 318 of the estimates of National Defence for the current year, I note that the Minister of Finance has decided to purchase bombs for an amount of $26 million, that is $1 million more than the $25 million which he wants to collect from the Canadian taxpayers.
Mr. Speaker, I suggest that Canada does not need bombs at the present time, especially since last year the government had bought some for $21 million. Now the bombs bought last year have never been used. I do not remember that they were dropped on somebody, that we have declared the war on the United States or on Europe to drop $21 million worth of bombs or that, without being aware of it, we are involved in the Viet Nam war.
So, last year, we bought $21 million worth of bombs. We still have them. Very well, let us keep them. There is no need to buy another $26 million worth this year. Let us stop buying bombs and we shall have the $25 million the minister needs to balance his budget, since he says himself, in Hansard of November 30, 1967, that this surtax will bring in $25 million for the current year.
Mr. Speaker, I say again to the Minister of Finance, if he needs $25 million, the solution does not lie in taking that amount from the pockets of Canadian taxpayers, who are already overtaxed, but in practising economy where this can be done, and I suggest that the place where savings can be made is when buying bombs, since a sum of $26 million is allocated to that. There may be other areas where savings can also be realized. I know that, during the present fiscal year, the Department of National Defence will spend $21 million for telephone calls. Let them stop making long-distance calls. After all, we are
February G, 1968

not at war and we can save money in this way.
Moreover, we could try to make our money work for peace. Unemployment is rising, Mr. Speaker. In the city of Montreal itself, a week ago, there were approximately 65,000 unemployed, a continual increase over the number of unemployed last year. Meanwhile, millions of dollars earned through hard work and effort by the Canadian taxpayers and taken away from them are being spent on telephone calls or on bombs. Since this goes on from year to year, we must have accumulated quite a few bombs since the last world war, for you can buy quite a lot for $26 million.
We are also buying tanks and armoured cars; we spent $15 million on them. This year, the amount of $61 million has been appropriated for the purchase of warships and $95 million for the purchase of aircraft. Mr. Speaker, I submit such purchases are not urgent. What is urgent is to leave to Canadians the little money they have managed to earn with their salaries. I wonder what we could do to have the Minister of Finance understand that his responsibilities not only involve taxation but the setting up of an economic system which will help the Canadian people as a whole instead of being a nuisance.
Since the new Minister of Finance has been in office, many new taxes have been levied. These are putting a heavy burden on the Canadian taxpayers, but the minister does not call a halt, he is still increasing taxes. He has become "the hon. federal Minister of Taxes".
Every year, even twice a year, for two or three years now, he has been introducing two budgets a year and raising taxes. Mr. Speaker, I should like to protest against that increase. Personally, I shall vote against it. I object to it because the collection of those taxes started even before the legislation was passed by parliament and I say to myself: If hon. members are conscientious and honest, they will vote against it and the bill will not be passed. Each member represents some electors, citizens who are tired of paying taxes. He must therefore vote against that unjustified tax increase whatever his political allegiance.
The minister tells us that this surcharge will bring in $25 million which is $1 million less than the cost of the bombs which we are going to buy in the same year. Why not stop buying bombs? That is what each and every member should understand. The interest of the voters demands that we stop buying bombs instead of increasing taxes by 5 per
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cent. It is always 1 per cent, 3 per cent, 5 per cent; taxes always go up and we do not know where this will stop.
Therefore, I strongly urge the members of all parties to vote against this bill so that this income tax increase will not come into force and Canadian citizens can breathe a bit more freely.


James Ernest Pascoe: Mr. Speaker, the Minister of Finance (Mr. Sharp) has had a very busy day and I expect he will have another busy day tomorrow, so we should not be too hard on him tonight. We must remind him, however, that Liberal fiscal policies are not working too well. This was emphasized by his cabinet colleague, the Minister of Trade and Commerce (Mr. Winters), but I will not repeat his remarks. We are all familiar with what he said.
The gross national product is not increasing satisfactorily in real dollars and there are indications that the productivity is slowing down. Consumer prices are continuing to rise, and interest rates are at the highest level at which they have been for a great many years. I make these remarks by way of preface to the main portion of what I intend to say at this time.
There is a particular problem in respect of income tax which should be raised here because Bill No. C-193 covers amendments to the Income Tax Act. I am pleased to see that the Minister of National Revenue (Mr. Chretien) is in his seat tonight, as I think this problem concerns both ministers. An increase in tax payments has a direct connection with certain problems faced by some of my constituents. They have written asking me to bring their problems to the attention of parliament and particularly to the attention of the Minister of Finance and the Minister of National Revenue. This problem bears a direct relation to problems referred to by other speakers concerning extra expenses involved in earning income on which taxes are paid.
[DOT] (9:00 p.m.)
These extra expenses result from changes in employment. The most recent letter on the problem comes from the general chairman of the Moose Jaw local of the Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees. I will not put the whole of the letter on the record but I think the first paragraph

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Income Tax Act
bears out what I am trying to emphasize. It says:
Kindly refer to your letter of December 19th, 1967, regarding our problem of our workers being forced into now working in Regina to hold full time employment due to complete cancellation of their work in Moose Jaw and lack of enough seniority to hold work in Moose Jaw.
In earlier correspondence with these workers I asked this official to supply me with names. I will not put the names on the record but I will just outline their problem. The first man is aged 52 and has seniority from July 16, 1941. The next man is aged 47 and his seniority is from 1942. It goes on from there. The seniority of these workers goes back to 1942 and the first paragraph of this letter points out that this seniority is not sufficient to enable them to hold full time jobs in Moose Jaw.
Therefore of necessity, in order to hold a job they are working in Regina but still maintaining their homes in Moose Jaw and keeping their children there, in the hope that railway conditions will improve and perhaps they will be able to go back to their homes, with the assistance of the recent colleague of the minister who is now the head of the Canadian Transport Commission and who apparently knows quite a few of the answers to the problems of transportation. It is hoped that he will be able to bring about a change in this respect. In the meantime, these people are maintaining their homes in Moose Jaw and, as I say, their children are going to school there. These workers are working five days a week, or whatever it is, and going to their homes in Moose Jaw during the time they are not working in Regina.
They consider that the money they spend-and this point has been raised in other cases-to earn an income on which they must pay taxes, should be deductible as expenses paid out directly to earn this income. The former minister of national revenue knows all about this situation because I have had correspondence with him and direct contact with his office. As I say, the new Minister of National Revenue (Mr. Chretien), who is in the house now, has heard of this problem. I join with hon. members in congratulating him on his appointment to his important portfolio. I am sure he will be working closely with the Minister of Finance (Mr. Sharp) on this problem.
The Minister of National Revenue has been described as a very reasonable man and I hope he will see the merit of the argument I
[Mr. Pascoe.l
am presenting on behalf of these railway workers, and will convince the Minister of Finance that these away-from-home expenses which are incurred in order to earn their take-home pay should be deductible for income tax purposes.
The Minister of Finance may not give an answer tonight because, as I say, he has been a very busy man, and I am quite sure he will have to consult with the Minister of National Revenue on this problem. I leave it to his good judgment and sense of fairness to see the validity of this argument. This money is actually paid out in order that these men can hold their seniority, in the hope of getting back to a position in Moose Jaw.
After the minister has considered the situation carefully, if he wishes more detailed information on the subject-as I say, there is a great deal of information in this letter but I shall not put it on the record at this time-I shall be very pleased to furnish him with it. That is the only question I wanted to raise tonight, Mr. Speaker.


The Acting Speaker (Mr. Tardif):: Is the
house ready for the question?


Howard Earl Johnston: Mr. Speaker, I have every sympathy with the Minister of Finance (Mr. Sharp) this evening as we deal with the increases in income tax which will be brought about by these amendments to the Income Tax Act. His position is one that would bring tears to the eyes of anyone contemplating the leadership of the Liberal party, especially when one considers what his colleagues have to offer at the present time. One of his colleagues has spoken of a guaranteed annual income of $2,000 a year, another has spoken very glowingly of constructing vast new cities across Canada to house up to four million inhabitants, and a non-candidate for leadership is sponsoring a bill that will permit state operated lotteries so that Canadians will have their chance to become wealthy overnight.
Confronted with all this tough competition, the Minister of Finance is faced with the unenviable task of bringing in Bill No. C-193, an act to amend the Income Tax Act, in the hope that it will be passed by the house and will stand in his name as his contribution to the cause at this time.
I do not wonder that the government benches breathed a sigh of relief when the broadcasting bill was passed yesterday, or that the Minister of Finance did, because it
February 6, 1988

enabled him to present this bill a little more in advance of the first week in April than he might have thought possible up to yesterday afternoon.
Of course, one cannot help but have sympathy for the minister when one considers the statements that have been made by him on previous occasions in budget speeches, and debates on related bills. We know for example that the boom that was to be paced at one time has somehow missed a step here and there and we have a crisis of confidence in Canada at the present time. We know, also, of the drastic shortage of money and the increase on interest rates that will bind our citizens to the payment of enormous sums of money in respect of any necessary development that is to be proceeded with at the present time.
We pay a high price for the inflationary development that seems to be accelerating rather than decelerating. I suspect that Bill No. C-193 will only add fuel to the fire because it strikes mainly at the little fellow who is making an income that is obviously known, and whose income tax is therefore deducted at source. This person has neither the capital nor the time to involve himself in other enterprises that might produce for him some other form of wealth.
[DOT] (9:10 p.m.)
He will be particularly burdened with this tax at a time when he will be facing constantly increasing prices, a sharp increase in the mill rate, and when, in most provinces, he will not have the home owner grants to relieve that burden. When we read, for example, the press release which was sent out from the Department of Finance several months ago when the bill on the Bank Act was about to be presented, we see stated in it the objective of government policy, which reads as follows:
A more competitive and flexible financial system which will best serve the changing requirements of the Canadian economy and the interests of all of the people of Canada. We are particularly concerned that the position of the smaller borrower be improved.
Anyone who has borrowed money since the revision of the Bank Act must wonder how his situation has improved, where the cheaper money may be, and where is the increased supply of money which we were promised at that time. The only thing that increases is government expenditure. The budget which was last presented was full of the most illusory slashes, and reductions which did nothing
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except frighten the people of Canada into speculating on the inflation which seemed to be looming. A good example of that is the $2,400,000 which was earmarked for the Company of Young Canadians, and which by the stroke of a pencil was reduced by $400,000 down to $2 million. Since, however, this was a substantial increase over the existing budget for that organization, it was a purely illusory cut in the budget of an organization the general usefulness of which has been repeatedly called into question across the country. This is a program which might have been eliminated altogether but which ended up with a larger over-all budget than it had the previous year.
The expenditure I mentioned pales into insignificance compared with the many other contemplated government expenditures, such as medicare. Perhaps the provinces will draw the line on what would be a really vast expenditure of government funds. A program launched by the government is always more costly than one undertaken by private enterprise.
I should like to express the annoyance of the individual who will suffer the consequences of the measure we are now considering. He will not be fooled by the promise that the corporation tax will be collected a little earlier than it otherwise would have been, so that the money will get into the hands of the government a little sooner, because he knows that in the end there will not be more money than there would have been had it been collected at the usual time. This will not soften the blow for anyone having to pay up to $600 in increased tax, depending on the amount of his income. It will do nothing for the small businessman who is growing increasingly weary of taking on the task of developing this nation and demonstrating the necessary drive and persistence to build up a business, only to be hindered at every turn by government programs to which he must contribute out of a decreasing margin of profit. This leads him to ask why he should bother. Why not give up and go to work for a large corporation, or else live at the mercy of the welfare system.
I regret that we are faced with an increase in income tax without having a comparable reduction or a complete elimination of the 11 per cent sales tax on building materials, which cannot help but contribute to the inflationary spiral.
At the present time we are faced with the problem of housing. The extra income tax will make it all the more difficult for anyone

February 6. 1968
Income Tax Act
building or attempting to build a house at a to provide the federal government, the prov-time of rising costs. Let us not be fooled by inces and the municipalities with social capi-the suggestion that this surtax is temporary. I tal. In this connection I should like to refer to suspect it will be with us for some time, if an address given by Mr. Anderson, who at the this government remains in office. We in the time was secretary of the treasury, at a Social Credit party wish that the government luncheon of the members of Associated Press, would seriously consider financing through New York City, on April 20, 1959. This the Bank of Canada several areas of Canadian address was titled: "What about Printing development, particularly in municipalities, Press money for U.S.?' And I say, Mr. Speak-in such projects as non-profit institutions, er, what about "printing press money for schools and hospitals-organizations which Canada? I mention this because this very must compete for funds on the money market interesting article was sent to me from Wash-at the amazing rates of interest which exist ington. In his remarks Mr. Anderson said:
now. We know that the postponement of these projects will not be a solution because it would be the highest possible price we could pay for a development which should and must take place.
I can assure you, Mr. Speaker, that I will oppose this bill, as I have voted against every budget this government has presented in the last two years. I was dubious about the promises made in the earlier budget of pacing the boom and of making sure that nothing got out of hand. We have a situation now where almost everything about the economic, financial and fiscal state of our country is out of hand. I do not believe that Bill No. C-193 will contribute to the solution of the problem.
[DOT] (9:20 p.m.)


Herbert Wilfred Herridge: Mr. Speaker, first of all let me say that I have every sympathy for the minister, an honourable gentleman who has to introduce a bill in which he admits himself the question of morality has not entered. I am sure we all feel for him on this occasion. I support the criticism of the measures proposed in this bill that has been expressed by other members of this party, and also by other members on the opposition side of the house. We all recognize the fact that no government can distribute taxation funds without first taking those funds away from somebody. I am one of those persons who believes in sound finances, and I should like to make a few proposals to the minister by way of alternatives to the measures in this bill. I want the minister to realize that I sympathize with him in the present circumstances. I might also say that we believe in the principle of taxation according to ability to pay, and we think that this bill does not live up to that principle.
I think that this bill would have been entirely unnecessary had the minister been willing to use the national credit of this country

I should like to suggest certain guiding principles which I believe should be a part of our basic thinking:
1.	We must realize that long-term economic growth in real terms can be achieved not with but only without inflation.
2.	We must strive for an achievable rate of relatively constant growth-not a succession of sharp ups and downs.
3.	We must not, as we come out of a recession, seek to force the economy into a quick boom which can later injure our long run capacity to produce.
4.	We must put major reliance upon the private sector of the economy to increase production.
5.	We must give maximum free rein to incentive to save, to work, to produce, to invest.
6.	We must maintain the priceless incentive of confidence in the value of money.
7.	We must achieve a budget that is in balance, or better, during periods of high level activity.
8.	We must be willing to seek out the impediments to growth in our economy whether these are found in traditional business practices, in organized labour, in government subsidy programs, or in any other area.
9.	We must encourage the inventiveness and research necessary for new products, new jobs and improved living standards in a growing economy.
10.	We must accept the imposition of discipline and prudent responsibility.
11.	We must not passively allow either inflation or deflation to run its course.
12.	We must-and by "we" I mean businessmen, workers, investors, and not only officials of government-make our day to day decisions with the welfare of the whole in mind, and not merely the advantage of the moment for some narrow segment.
13.	Finally, we must have confidence-and this confidence, I have deep faith, is well justified- that the American people are wise enough and perceptive enough to support the principles which can leave for your children and mine an America not ravaged by economic turmoil, but full of strength and growth and hope.
Then he goes on to deal with the issue of currency.


Mitchell William Sharp: Mr. Speaker, I wonder whether the hon. gentleman would permit a question at this point. Is my hon. friend, who belongs to what might be termed a quasi-socialist party, indicating that his party is adopting
February 6, 1968

Robert Anderson as its official mentor in matters economic and financial?


Herbert Wilfred Herridge: Mr. Speaker, we in this party are always willing to learn, and when we find someone who puts forward sound principles in financial matters we are willing to listen to what he has to say. I am just quoting Mr. Anderson for the information of the minister. Mr. Anderson then went on to deal with the possibility of using the state for the issuing of the money required by the state particularly for investment of social capital.
I recently read with interest representations made to the federal government by chambers of commerce, labour organizations, agricultural organizations and municipalities, all of which indicate a measure of self-interest, instead of considering the problem as a whole. The brief of the chambers of commerce dealt with depreciation allowances and exemptions for certain industries, such as the resource industries and so on.
The brief submitted by organized labour dealt with the question of expense accounts, something that has been very much abused in the past. I have before me an article that appeared in an issue of the Star Weekly headed "The expense account gap", one paragraph of which reads:
It involves plugging the gaping loopholes in tax deductions allowed for entertainment and travelling expenses supposedly incurred for business reasons. The language of the present laws is so loose and imprecise that it has encouraged the creation of a privileged class which uses the loopholes to live high off the hog, writing off anything from country club membership fees to chartered limousines as "business expenses".
For the information of the minister I should like to relate an interesting personal experience I had last year in this respect. I was travelling by train from Vancouver to the Kootenays and there was a group of travellers on the train. One of them was supposed to visit a number of towns in the Kootenays-Nelson, Cranbrook, Fernie-and in my presence he quite openly admitted that he was going to go to Nelson but was not going to visit these other towns at all. Instead he was going to phone the storekeepers concerned from Nelson and take their orders; but he said: "Of course, I shall charge the usual expenses to my account just as if I had gone to those towns, stayed in hotels and incurred the usual expenses".
I am not sure that this sort of thing has been corrected to date by any means. It is something that needs watching very closely. I
Income Tax Act
can well understand organized labour criticizing the expense account racket, as they see it, when they are denied certain exemptions for expenses travelling to work, for the type of clothing referred to by the hon. member for Sudbury (Mr. Germa), and other things of that nature.
The representations made by agricultural groups have dealt largely with estate taxes, succession duties, and so on, looking at these matters naturally from the point of view of those organizations. The representations to the federal government made by the municipalities have dealt generally with urging more grants to municipalities in lieu of taxation on federal buildings in the municipalities, and also the need for social capital in connection with various undertakings. I have before me a copy of "The Listening Post" which is published by the Canadian federation of mayors and municipalities. According to this, their brief called attention to these basic needs:
, (1) long-term federal loans at favourable rates of interest in order to finance projects which are primarily self-liquidating and essential to community development, such as urban roads, bridges and transit facilities, sewers, water supply, recreation space, and the acquisition of land for redevelopment:
(2)	grants on a more adequate scale toward the costs of hospitals, schools and other community services which are essential but non-self-liquidating;
(3)	continued and expanded grant assistance for employment-creating municipal works, to accelerate re-employment and to provide constructive work in the winter seasons.
The brief then dealt with a municipal development bank and the need for a new housing policy at that date, a matter we are still dealing with, in view of the housing crisis in Canada at the present time. The problem of finance and taxation has, shall I say, been dealt with on a piecemeal basis by all of the interests concerned, each one naturally looking after its own personal interest. It indicates a piecemeal approach to a very serious problem facing the country at this time. It also indicates that there is no over-all set of principles with which to approach the policy of taxation, Mr. Speaker. It indicates a natural self interest of individuals, and that we have treated this subject in a segmented way instead of adhering to the over-all philosophy that taxation should be on the basis of one's ability to pay.
[DOT] (9:30 p.m.)
I suggest that for so many in this country at this time to be ignorant of the principles of

February 6, 1968
Division
taxation, is deplorable. Our people are ignorant of the financial principles on which the present government bases its taxation. I suggest to the minister that here is an opportunity for the Department of Finance and the Department of National Revenue to carry out an educational campaign; here is an opportunity for brochures, pamphlets, literature-[DOT] or whatever you want to call it-to be issued to our farmers, industrialists or workingmen to explain the policy behind the government's program, the reasons for certain types of taxation, why the government has come to certain conclusions, and so on.
I think it is imperative to educate the Canadian people and to let them learn the basis of taxation as applied by this government. In that way our people will have a better understanding of the principles of taxation and in the future will be able more and more to appreciate our problems, shall I say, in total rather than on the basis of self interest, as happens at the present time. I think there is an opportunity here for the Departments of Finance and National Revenue to inform and to educate the Canadian people with respect to the principles of taxation and the policies pursued by this government. Such knowledge would be useful because it would help our people to appreciate policy and it would help our taxpayers to have a proper understanding of the law as it is applied at the present time. On that basis the government might be able to consider a more rational and, shall I say, principled approach to taxation in the future.


Mr. Deputy Speaker:: Is the house ready for the question?


Some hon. Members:: 
Mr. Speaker:: MacEwan
Maclnnis (Cape Breton
South)
Maclnnis (Mrs.)
(Vancouver-Kingsway) McCleave McIntosh McKinley McLelland Madill Mather Monteith Moore Nasserden Nesbitt Noble Nugent Orlikow Pascoe Patterson Peters Prittie Pugh Rapp Regimbal Ricard Rynard Saltsman Sherman Simard Skoreyko Southam Starr Stefanson Thompson Valade Wadds (Mrs.)
Watson (Assiniboia) Winch-73.
declare the motion carried.
February 6, 1968	COMMONS


Mr. Pennell:: Mr. Speaker, I was paired. Had I voted I would have voted for the motion.


Mr. Munro:: Mr. Speaker, I was paired. Had I voted I would have voted tor the motion.


Mr. McCutcheon:: Mr. Speaker, I was
paired, had I voted I would have voted against the motion.



BUSINESS OF THE HOUSE

Michael Starr: Mr. Speaker, I should like to ask the government house leader what business we will be engaged in tomorow.


Lawrence T. Pennell: Mr. Speaker, the government proposes to call first the third reading of the broadcasting bill, to be followed by item No. 43 on today's order paper, second reading of Bill No. S-24; item No. 47, second reading of Bill No. S-23; item No. 49, second reading of Bill No. S-29; item No. 52, second reading of Bill No. S-27; item No. 51, second reading of Bill No. C-190 and item No. 62, the resolution relating to the unification of the Canadian Armed Forces.


Michael Starr: What will we do tomorrow after we complete all of those.


Edmund Davie Fulton: Could we have an indication in general terms as to when the government intends to call Bill No. C-195?


Lawrence T. Pennell: I am not in a position to give an answer to that question this evening.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Stanley Howard Knowles: Mr. Speaker, some weeks ago, on
November 17 last to be exact, I addressed a question to the Solicitor General (Mr. Pennell) in these words, as they appear at page 4393 of Hansard for that day:
In view of the fact that many persons who have been sentenced to life imprisonment have been paroled after serving fewer than ten years, and in view of the fact that the length of time in prison before parole is determined by the governor in council, will the government reconsider the case of a parole for Steven Truscott?
DEBATES	6451
Proceedings on Adjournment Motion
The Solicitor General in his reply indicated that the statistics to which I was referring applied to a time before changes had been made in the regulations under the Parole Act. He therefore felt nothing could be done to meet my request. At that time I posted this question for one of these adjournment debates.
I have no hesitation in appealing once again to the Solicitor General, on behalf of this young man Steven Truscott, who is serving a life sentence at Collin's Bay penitentiary. Indeed I have no hesitation in asking for special consideration for this young man. I do not intend to go into all of the facts relating to this case, but may I point out, as we all know, that the last time a decision was taken in respect of him it was a decision taken by the Supreme Court of Canada, which was not unanimous. Granted that only one of their lordships differed from the others, but it is still a recognized principle in this country that a person is not guilty of murder unless there is a unanimous decision.
[DOT] (10:10 p.m.)
I recognize that this was not a trial in the normal sense, but I suggest to the government that the fact that at least one Supreme Court justice had some doubt about this case, and thought that at least there should be a new trial, does warrant asking for special consideration for this young man. My own position is quite clear. Thanks to the Solicitor General and the Commissioner of Penitentiaries, I have had the opportunity on two occasions of visiting Steven Truscott at Collin's Bay penitentiary. On the basis of those visits and the studies I have made of the entire history of this case, I feel there has been a miscarriage of justice. Therefore, it does seem to me that one is justified in asking for special consideration.
But even apart from all that, I think it is a matter of record that this young man's years in prison-they are now nearly nine-have been as near perfect as a prisoner's record could be. I believe that on that basis special consideration should be given to the request that he be paroled before any more of his fife is spent behind bars.
When I have urged that this be done, the Solicitor General has replied that the parole board is governed by the regulations under the Parole Act. He has pointed out to me that those regulations have been changed in recent years and that it is not now possible to release after seven or eight years a person sentenced to imprisonment for life, as used to
February 6, 1968

Proceedings on Adjournment Motion be the case. But I point out to the Solicitor General that the regulations which govern the operations of the parole board are regulations brought into effect by the governor in council.
The minimum period of time, the ten year minimum that seems to stand in our way in this respect, is not in the act. That ten year minimum is in the regulations, put there by the governor in council. I submit that precisely because this case has had special consideration, has been reviewed by the justices of the Supreme Court of Canada, it would be appropriate for the government to take another look at those regulations with respect to this case.
I would not object if the government asked the parole board whether its members thought the case should be given special attention. But it seems to me that since the whole question of the length of time that must be served as a minimum is one that is determined by the governor in council, in other words by the cabinet, it is appropriate to ask the cabinet to review this case.
I recognize that this young man's ten year period in prison will be reached about the middle of 1969. That does not sound very far off, but in the case of a young man who has spent this length of time in jail for a crime that some of us think he did not commit, and when it is clear that there has been exemplary conduct in prison, it seems to me to warrant special consideration being given to the case.
I know of the sympathy of the Solicitor General in this respect. I think it was largely due to his interest in the case that the Supreme Court review was made a year or so ago. I hope that he will follow it through by taking another look at the possibility of this young man being given a parole without having to serve the full ten years set out in the regulations passed by the governor in council. I thank the Solicitor General for being here tonight to deal with this question. I look forward, hopefully, to a sympathetic reply.


Lawrence T. Pennell: Mr. Speaker, first of all I wish to thank the hon. member for his patience in waiting for an evening that was convenient to me to be present in the house to deal with his question. I wish also to say that the hon. member's interest in this case is most commendable. Without reflecting in the slightest upon the conduct of this young inmate, I feel I ought not to make any comment on that aspect of the case.
[Mr, Knowles.)
I agree that the response to a like term of imprisonment varies as between one individual and another. Unfortunately, according to the present state of knowledge, decisions regarding the appropriate moment to release a prisoner cannot be made with computer-like accuracy. In 1964 those charged with the responsibility of protecting society decided that the National Parole Board shall not recommend a parole in the case of a person who is serving a commuted death sentence until that person shall have served at least ten years of imprisonment. This order in council was undoubtedly in the minds of many hon. members at the time the house approved the recent bill on capital punishment.
I regret to advise the hon. member that I expect that the ten year period would be continued at least during the five year life of this experimental bill. The only assurance I can give the hon. member is that the National Parole Board will consider the application in sufficient time before the expiration of the ten year period, so that if it receives favourable consideration it will be in the hands of the solicitor general of the day on June 11, 1969, which is the first day on which the governor in council could receive a favourable recommendation.



MANPOWER-REPORTED DECREASE IN RETRAINING PROGRAMS

Mr. J. R. Keays (Gaspe):: Mr. Speaker, I
should like to discuss tonight the program of occupational training of adults, such as the one proposed in the house on January 19, 1967 by the Minister of Manpower and Immigration, a policy which was intended for those in the uneconomic regions of our country who wish to upgrade their education. At that time the minister proposed, with the agreement of the provinces, some pilot projects which would be undertaken in those regions of weak economic development, where people did not have the full opportunities of obtaining a job unless they had the required training. In his statement on that date, which is contained in information bulletin No. 1, the minister admitted that his department had very little documentation on the problem of how to encourage these unemployed persons to take advantage of courses preparing them for a new job. This admission has caused much unrest in these regions, because of the discrimination which was caused through lack of sufficient knowledge.
The minister in his statement of January, 1967 referred to those uneconomic regions
February 6, 1968
COMMONS DEBATES	6453
where the schools for adult education were deprived of trained personnel. He also attributed the problem encountered to the fact that many of the students were deprived of the right attitude, the state of mind and the orientation required to participate fully in the economy of our country. It was therefore resolved to put into effect certain measures which would allow these adults to benefit from their education. Moreover many of these people suffered because of their personal and social inability to adapt to the values and requirements of labour. No doubt the intentions of the minister were of the highest calibre, but unfortunately and by his own admission the officials in his department did not have sufficient experience in such projects undertaken in the past, and this is why the proposed program was called a pilot project.
[DOT] (10:20 p.m.)
It seems to me that this problem has not been sufficiently studied. As a result thousands of people in this country are now discriminated against. These are people who are now unemployed and could improve their education by taking one of these occupational training courses for adults.
I should like to point out that in many regions of Canada, and specifically in my riding, there are many people who attended courses during the 1966-67 period and were still at school on March 31, 1967. Because of this fact they qualify to attend new courses commencing this year. I believe that during this period it was sufficiently proven that many of the people who attended these courses should never have qualified for them, but it seems that they were never classified as a result of any investigation. This year those who qualified were primarily those who were at school on March 31, 1967. Even though they were not qualified to take a course the previous year, because they were at school on March 31, 1967 they qualified for a course this year.
This has meant that thousands of people will this year be deprived of a course. I say thousands because at one centre in my riding alone over 800 people who qualified for a course were turned down owing to lack of space. I blame this situation on the government because they did not sufficiently study this pilot project without even trying to assess the number of people who would qualify for a course.
This has meant that the people who would have qualified now have to draw unemployment insurance and sit at home, instead of
Proceedings on Adjournment Motion preparing themselves for some other job. I suggest this is the height of discrimination. I did ask the minister to explain why the necessary space had not been obtained from the provinces under the agreement, and his answer was very short, namely that there was an agreement with the provinces. I realize the minister is not here tonight. However, his parliamentary secretary is, and I only hope that the hon. gentleman does not have a prepared answer. The hon. gentleman did not know what I was going to say, and my experience in the past has usually been that prepared answers do not give a straight answer to the question.
May I again put the matter plainly to the parliamentary secretary. What is the government going to do about all those people who are qualified to take a course, yet have to sit at home and live on unemployment insurance instead of going to school and preparing themselves for the jobs that are waiting for them? On the other hand, what is going to be done about those who are taking courses but have never been members of the labour force? This is something I fail to understand. It is why I feel there is discrimination and that an investigation should be made.


John Carr Munro: Mr. Speaker, the hon. member for Gaspe should have no fear that I have a prepared answer, because I have not. From perusing the hon. member's question to the minister the other day I was not aware that he would put so much emphasis on the situation in his own region. I know that he was talking, generally, about other regions, but this evening he put much emphasis on the retraining situation in his own region. I am prepared to go back to the department, examine the facts with respect to the hon. member's region, and report back. He talked about an additional 800 places that are required, and that seems a high figure which warrants examination. I assure the hon. member that the matter will be brought to the department's attention and it will be investigated.
Generally speaking, we buy the places or the accommodation for the retraining, and the province is supposed to supply the course. That has been the arrangement, and thousands of places now are being occupied for pre-employment courses across the country. During the winter months demand for such courses is highest and a very high number of places is now being taken up. I think that
6454	COMMONS
Proceedings on Adjournment Motion retraining courses now are working well, and many of the kinks are being worked out. Whether that is so in the hon. member's region I do not know, but I intend to have the matter looked into and I hope to have an adequate reply for him when we have looked into his own situation.



HOUSING-VANCOUVER-CONSTRUCTION OF HOME FOR SENIOR CITIZENS

Robert William Prittie: Mr. Speaker, on February 2 1 asked the President of the Treasury Board, the minister who reports for central mortgage and housing, the following question as reported on page 6291 of Hansard:
In view of the minister's interest in getting the best use of the money available for housing, can he inform the house why Central Mortgage and Housing Corporation has awarded a contract for the construction of a 19 storey senior citizens home in Vancouver which provides for higher costs and fewer units than other proposals submitted for the same project?
The approximate cost of this project, which is to be located in the west end of Vancouver, is about $1,600,000. Seventy five per cent of this amount will be paid by the federal government and 25 per cent by the provincial government. The city of Vancouver will pay 12J per cent of the operating losses. The federal involvement here is about $1,200,000. Actually it is a bit more than that.
Instead of preparing plans and calling for tenders, the government invited architects and developers to submit design proposals. A committee which included representatives of the city of Vancouver, the province of British Columbia and C.M.H.C. studied these proposals and made a recommendation.
What I have to say should not be taken as a reflection on the abilities or competence of any architects or builders. I assume they are all capable of designing sound buildings of good appearance. Nor does it matter to me, personally, which firm gets a contract. What does matter at this time of severe housing shortage and high money cost is that good accommodation be provided at the lowest possible price.
I want to draw some comparisons between the proposal which was accepted and one proposal which was not accepted. The proposal which was accepted has 210 units; the other one I referred to has 233 units. The difference there is 23 units, and this is particularly important in this section of Vancouver, since so many elderly people live in sub-standard accommodation.

DEBATES	February 6. 196k
The size of each apartment in the project which was picked by the committee is about 311 square feet; the units in the other proposal come to approximately 325 square feet, and this is not very much space to live in. The average monthly rental for accommodation in the building selected would be $92 and, in the other, $85. A difference of $7 a month may not appear to be very high, but to some people, those who are living on pensions, it is an important consideration. The total cost of the two projects did not differ greatly-$1,669,131 for the winning proposal as against $1,647,724 for the other to which I have referred. However, since there are fewer units in the proposal selected, the actual cost per unit is considerably higher, and extended over the life of the building, say 50 years, the difference would be great. This means that heavier subsidies will be required because of the higher rentals under the first proposal.
[DOT] (10:30 p.m.)
I wish now to read a letter from the president of the Vancouver Housing Association addressed to the council of the city of Vancouver and dated January 12, 1968. It states:
Dear Sirs:
I have been puzzled by the decision of city council to accept a tender for a public housing project for senior citizens in the west end which was very appreciably higher in cost (well over 10 per cent per suite of comparable size) and which contained fewer units than the lowest bid.
One of our members, who has had considerable experience in the construction of senior citizens housing, has studied the plans submitted by the low bidder and, while he did not feel competent to express an opinion on the architectural and constructional features of the project, he considered that so far as the liveability of the units was concerned the plans provided good accommodation at a reasonable cost.
In the circumstances, may I suggest that for the benefit of the taxpayer who will have to foot the extra bill a detailed explanation be given as to the reasons for the selection of the higher tender.
May I, at the same time, suggest that future selection committees appointed to consider plans submitted should include persons with extensive personal knowledge of the needs of elderly people and with firsthand experience in public housing management.
Yours very truly,
Vancouver Housing Association
The letter is signed by Mrs. C. McAllister, president of the association.
There is one further point I should like to mention. The proposal which was not selected did provide on the ground floor suites for physically handicapped persons, obviously a desirable feature. The proposal selected by the committee did not include this feature in
February 6, 1968	COMMONS
its original presentation, though I believe there have been some changes in the plans since that time. The question I should like to have answered is this: Why, at a time of acute housing shortage and shortage of money, was a selection made which provided fewer and smaller units at a higher cost? It seems to me there is considerable waste here.


Mr. J. E. Walker (Parliamentary Secretary to Minister of National Revenue):: I think that in matters of this kind we could all find ourselves in disagreement. I will say that this has been a co-operative effort. I should like to read an answer which has been prepared very thoughtfully, and I am able to do so because the hon. member was good enough to word his question in such a way that it was quite evident which aspects of the subject he had in mind.
The senior citizens housing project to be located in the west end of Vancouver is being developed at the request of the city of Vancouver under the federal-provincial partnership provisions of the National Housing Act. To meet the city's request, Central Mortgage and Housing Corporation, on behalf of the partnership, called for proposals to be made by builders for the construction of approximately 200 units.
Under the terms of the partnership arrangement, proposals submitted by builders were to be judged by a review committee composed of provincial and corporation representatives as well as the city's director of planning and a local architect representing
DEBATES	6455
Proceedings on Adjournment Motion the provincial architectural institute. Prospective proponents were advised that the review committee was required to judge proposals on the quality of planning and design, economy of maintenance and the amount of the bids.
Seven developers submitted bona fide proposals ranging in quality and price from $7,072 to $14,207 a unit. The review committee unanimously recommended acceptance of a proposal submitted by Frank Stanzl Construction Limited at a price of $7,910 a unit, as it considered that the over-all quality of design of this proposal, comprising 211 units, was of a high standard and, on balance, best met the objectives and conditions provided for in the call. The city, the province and the corporation endorsed the committee's recommendations. As a result, a contract was awarded to the proponent selected by the committee. An announcement to this effect was made last week.
I would just like to add, Mr. Speaker, that I think there is always room for disagreement in this sort of operation, but I would also like to stress the fact that it was a co-operative effort, an effort to do something by way of senior citizens housing in Vancouver, and I suggest the people represented by the city, the province and the architectural institute, as well as C.M.H.C., might be just as well qualified to judge the design as those who have disagreed with the awarding of the contract.
Motion agreed to and the house adjourned at 10.39 p.m.

Wednesday, February 7, 1968