1969-06-10

ROUTINE PROCEEDINGS


[Stage Direction]
Ninth report of Standing Committee on Fisheries and Forestry-Mr. Crossman.


Hon. Robert L. Stanfield (Leader of the Opposition):: 
Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, the increase in the prime lending rates charged by United States banks has spread rapidly from New York, where it began, to other major United States cities. We must expect that all borrowers from United States banks will be affected, including international corporations with operations in Canada, and those Canadian companies which traditionally have looked to United States banks for part of their credit needs.
Some of the demand for credit from these borrowers will undoubtedly be reflected to Canadian banks. I am sure the Canadian banks will regard the needs of their regular Canadian customers as having first priority, but it is inevitable that some of the pressure on Canadian banks for loans will have to be dealt with by an increase in lending rates of the banks.


Robert Lorne Stanfield: I take it from what the minister has said that he proposes to take no measures in this regard. Would he say whether the anticipated increase in bank rates in Canada might spread throughout our whole interest rates structure? Can he tell us, also, whether he has had an opportunity to confer with his officials, and whether he anticipates that this development will have any effect upon holdings of Canadian savings bonds?


Edgar John Benson: I do not really think that at this point it will have a serious effect on holdings of Canadian savings bonds. However, we in Canada must always be mindful of the need to protect the position of our foreign exchange reserves. Since we have a free economy permitting loans to be made back and forth across the border it is inevitable that our bank rates must be somewhat aligned with those in the United States. However, at present I do not anticipate any difficulty with regard to Canadian savings bonds.



SUGGESTED SWITCH TO FLOATING EXCHANGE RATE

Mr. Max Sallsman (Waterloo):: A supplementary question to the Minister of Finance, Mr. Speaker. In view of statements indicating that our banking system and the money markets are so closely linked, will he not consider disengaging the Canadian money market from that of the United States by switching to a floating exchange rate?


Edgar John Benson: 
Max Saltsman: Would the minister not agree that a floating exchange rate would give us far more flexibility in pursuing our own money policies?


Mr. Speaker:: Order. The supplementary
question is argumentative.


Edgar John Benson: I do not agree, Mr. Speaker.
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June 10, 1969
Inquiries of the Ministry TRADE



WHEAT-LONDON SPEECH INDICATING CHOICE BETWEEN LOWER PRICES AND REDUCED PRODUCTION

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Industry, Trade and Commerce in connection with the speech he made in London, England, in which he said that Canada's increasing wheat surplus might result either in a continuation of selling wheat at reduced prices or a cut in production? I want to ask the minister whether he intends to make a statement to the house before we recess so that the people of Canada may know which of these unhappy courses the government has decided to pursue.


Mr. Speaker:: Order, please. Perhaps I might mention to the hon. member that questions relating to statements made by ministers outside the house should normally be directed to the Prime Minister for the purpose of ascertaining whether they represent government policy. Perhaps the hon. member's question might have been asked directly, and in this sense the minister may wish to reply.


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: For historical purposes, may I say that this was not said in one of my speeches; it was said at a press conference afterwards. I was trying to explain to the newspapermen the complexities of the wheat situation in Canada. As the Minister of Agriculture said yesterday, policy will be announced in due course.



COMPENSATION FOR SALES BELOW I.G.A. FLOOR

Thomas Clement (Tommy) Douglas: A supplementary question. In view of the fact that the Wheat Board is now selling below the International Grains Arrangement floor price, is the government of Canada paying anything to the Wheat Board by way of compensation, or is the entire cost of this floor price for wheat being borne by the farmers?


Jean-Luc Pepin: No to the first question; yes to the second.



EXEMPTION OF AGRICULTURAL PRODUCTS IN EVENT OF BRITAIN JOINING E.E.C.

Mr. Eldon M. Woolliams (Calgary North):: supplementary question, Mr. Speaker. I asked a question of the Minister of Agriculture yesterday in the absence of the Minister of Trade

and Commerce in regard to the European Common Market. When the minister was in London was there any discussion between himself, on behalf of his government, and Great Britain in regard to Britain's joining the European Common Market and whether they would try to exempt agricultural products?
Because in such a situation we would be competing against those nations in a protected market.


Jean-Luc Pepin: Mr. Speaker, there was some conversation with Mr. Crosland, president of the board of trade, on that subject. In these conversations as well as through my speech to the Canadian Chamber of Commerce in Great Britain I brought to the attention of the British government the difficulties in Canadian agriculture at this time. I also made the point that if and when Great Britain joins the E.E.C. their interest and our interest alike would command that they try to get as open a policy as possible on these matters.


Eldon Mattison Woolliams: A further supplementary question. I take it then that the minister really took the same position in this regard that the former Conservative government took, and which he criticized some time ago.


Jean-Luc Pepin: No, Mr. Speaker.


Mr. Speaker:: Order, please.



VETERANS AFFAIRS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question arises from the memorial services held in France on the 25th anniversary of the invasion. In the last few weeks numbers of letters from all parts of Canada have been received by me from veterans who are in a desperate position. Would the minister say whether between now and the adjournment of this portion of the session legislation will be brought in to provide for necessary increases in pensions, and in particular, for the implementation of the terms of the Woods report?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, the provincial commands of the Legion are holding their biennial conventions and I am also expecting to receive many telegrams. However with
June 10, 1969

regard to the Woods report I can only repeat what I have already said on many occasions. The government is deeply engaged in the preparation of a white paper, and I hope it will be tabled very soon.


John George Diefenbaker: Mr. Speaker, is it possible that the white paper will be delayed so long that there are going to be a lot more white crosses among those who served and should be receiving compensation and are not?


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the minister a supplementary question. In view of his statement last September, that the government was prepared to refer the Woods report to the Standing Committee on Veterans Affairs without any talk of a white paper, will the government consider reverting to that position so that this matter can be dealt with by the committee before we rise at the end of June?


Jean-Eudes Dubé: As I said before, Mr. Speaker, the white paper will be ready shortly. The white paper and the report will both be referred to the committee at the same time.


Stanley Howard Knowles: Who wants the white paper?


Max Saltsman: A supplementary question, Mr. Speaker. Since the situation is urgent and since the minister has indicated that the white paper will be ready very shortly, will he consider polling the chairman and members of the committee to see if they are willing to sit during the summer and examine the white paper?


Some hon. Members:: Hear, hear.


D-DAY CEREMONY-READING OF SPEECH PREPARED BY DEPARTMENT OF EXTERNAL AFFAIRS
Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, I have a question for the Acting Secretary of State for External Affairs, or for the parliamentary secretary. It is directed to whoever is in a position to answer. At the D-Day ceremonies in Normandy on June 6 did the Canadian Ambassador read a speech which had been sent to him by the Department of External Affairs? Did the minister see this speech and approve of it?


Mr. Jean-Pierre Goyer (Parliamentary Secretary to the Secretary of State for External Affairs):: Mr. Speaker, questions addressed to the Secretary of State for External Affairs will be answered tomorrow.
Inquiries of the Ministry [English.]	;



CANADIAN CONSTITUTION


Mr. G. W. Baldwin (Peace River):: Mr,
Speaker, I have a question for the Prime Minister which arises from a statement he made yesterday about the establishment of a parliamentary committee to deal with the constitution, and remarks attributed to an assistant of his which were reported by good and reliable friends in the press. I ask the Prime Minister if he is prepared to consult the opposition with a view to arriving at terms of reference regarding the scope of inquiry of such committee, so that it may be as objective, detailed and useful as possible?


Right Hon. P. E. Trudeau (Prime Minister):: Well, Mr. Speaker, I hope it will be as useful as possible. The hon. gentleman has referred to something said by someone in my office. I am not aware of that and therefore cannot comment further on it.


Gerald William Baldwin: A supplementary question, Mr. Speaker. I accept the Prime Minister's rejection of what is alleged to have been said by someone in his office. Will the right hon. gentleman consult the opposition about the terms of reference of this parliamentary committee, so that we may work out reasonable arrangements about the scope and nature of its inquiry with a view to making it as objective and useful as possible?


Pierre Elliott Trudeau: Well, Mr. Speaker, I believe I indicated yesterday that I would be prepared to consider, in consultation with the opposition, the establishment of such a committee. That is still my position. I will be prepared to consider that. For the time being, nevertheless, it is a hypothetical question. We are not into next session yet. But when we set up the committee we will set it up in the way we set up all committees: We shall want it to be as useful to the country as possible.



COMMUNICATIONS


Mr. Steven E. Paproski (Edmonton Centre):: I have a further supplementary question to the Prime Minister, Mr. Speaker. As a result of his complaints about the press in a public speech yesterday, will the Prime Minister refer this matter to the task force on information, or will it be another matter for the R.C.M.P.?

June 10, 1969
Inquiries of the Ministry [Translation]


EXTERNAL AFFAIRS
Mr. Real Caoueile (Temiscamingue):: Mr. Speaker, I should like to put a question to the Prime Minister.
Has he received representations from the Society for Canadian rights, of Montreal, against the recognition of Communist China by the Canadian government? In the affirmative, has the Prime Minister replied to that society?


Pierre Elliott Trudeau: Mr. Speaker, I did not catch the name of the society, but I can say that I received a number of representations unfavourable to the recognition of the Peking Republic. Of course, all those representations were considered by the government when it established its policy. We knew that there would not be unanimous agreement, but we think that the majority of realistic Canadians support us.



HARBOURS


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the opposition of North Vancouver residents to the installation of a coal bulk loading plant at Neptune Terminals on Bur-rard Inlet and the consequent pollution of their residential neighbourhood, and in view of the advanced stage of construction of a bulk coal loader at Roberts Bank superport, will the minister investigate this matter and report his findings to the house?


Mr. Speaker:: Order, please. The hon. member has made a representation to the minister and she must assume that note has been taken of it.


Winona Grace MacInnis: Mr. Speaker, with all due respect, it was not a representation but a question.


Mr. Speaker:: Order, please. If it was not a representation, but a question, then the question ought to be on the order paper.


Winona Grace MacInnis: Mr. Speaker, may I
rephrase the question. Since the people of North Vancouver are complaining about this coal loading facility which is to be installed, 
will the minister investigate the possibility of having it transferred to the already constructed coal loader at the superport?


Mr. Speaker:: Order, please. This type of question should normally be placed on the order paper or considered at the time of adjournment.



AIRPORTS


Hon. Marcel Lambert (Edmonton West):: My
question, Mr. Speaker, is to the Minister of Transport. Would the minister advise the house about the results of the recent meetings between officials of this department and representatives of the international airlines regarding the facilities and arrangements concerning the new international airport outside of Montreal? Can he also advise whether the meeting adjourned, with international representatives leaving two days after the start of the representations because of difficulties that arose out of the meeting?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I had a report on this particular meeting. From all accounts there were three main subjects for consideration. Under two of these headings there was complete satisfaction on the part of those who had been invited to attend. With regard to representatives of some of the airlines, there appears to have been some misunderstanding as to the nature of the matters to be discussed. Consequently they were somewhat disappointed with the outcome. Officially however the organization, I believe it is IATA or something of that order, has indicated they were quite pleased with the results. It was merely an initial meeting and several others will be held on successive dates.


Mr. Lamberi (Edmonion Wesl):: A supplementary question, Mr. Speaker. Will the minister advise the house when the next meeting is scheduled and whether he himself has been able to intervene to repair some of the damage that seems to have been caused in relations between his officials and representatives of the international airlines who left, as we say in French, en claquant les portes?


Donald Campbell Jamieson: Mr. Speaker, I do not accept the proposition that any serious damage was done. I repeat it was a matter of misunderstanding as to the matters on the agenda. There will be innumerable further meetings.
June 10. 1969

These will be called as soon as the officials are satisfied there can be some suitable results. We want to be sure the airlines-


Mr. Speaker:: Order, please.



EXTERNAL AID


Mr. Ralph Slewart (Cochrane):: Mr. Speaker, I have a question for the minister replying on behalf of the Secretary of State for External Affairs, of which I have given notice. Is it the intention of the Canadian government to lodge a protest with the Lagos government regarding the death of four aircrew resulting from the shooting down of a Swedish Red Cross plane carrying relief goods into Biafra, and is it the intention of the government to ask the Nigerians to ensure that this does not occur again, in consideration of the many Canadians, as well as other nationals, who are engaged in that humanitarian work?


Jean-Pierre Goyer: Mr. Speaker, I wish to thank the hon. member for giving notice of his question, which will be answered tomorrow.



CROWN CORPORATIONS


Mr. Mac T. McCutcheon (Lambton-Kent):: Mr. Speaker, may I direct a question to the Minister of Supply and Services, and ask him if it is the government's intention to remove all Crown corporations from the provisions of the Government Companies Operation Act, as has recently been done in the case of Polymer Corporation, and which was proclaimed recently in the Canada Gazette?


Mr. Speaker:: Order. I suggest to the hon. member that this is a question of a very general nature, pretty wide in scope, which should normally be put on the order paper.


Maclyn (Mac) Thomas McCutcheon: With great deference, Mr. Speaker, there may be a possibility that the government is considering the sale of this business, and I would suggest that that would make my question very urgent. I would humbly ask that you allow the minister to make a reply.


Mr. Speaker:: The hon. member for Prince Edward-Hastings.
Inquiries of the Ministry WATER RESOURCES



POLLUTION-INDUCEMENTS TO INDUSTRY TO CONTROL BACTERIA COUNT

Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. In view of the logical suggestion made by the new Ontario provincial minister in charge of pollution, to the effect that if a war is to be waged successfully against this national threat to our health and welfare, incentives must be made available, is the government giving consideration to making tax incentives available in the form of fast write-offs and low interest rate loans so that industries which instal the new machines necessary to remove bacteria from pollution being put into our waters can go ahead with the job?


Mr. Speaker:: Order. I have very serious doubt as to the hon. member's very important question. It seems to me that it, too, is very wide in scope and should normally be placed on the order paper. At the same time I would point out that we are now considering the budget and perhaps this is the type of matter that might be considered during the budget debate.



FINANCE


Mr. David Lewis (York South):: Mr. Speaker, I should like to address a question to the Minister of Finance related to some questions he was asked earlier. I would like to ask him specifically whether he or the Bank of Canada, through the appropriate officers, will lay down a rule of some sort for the Canadian chartered banks that they are not to increase the prime interest rate any further, in view of the very large profits that they have been making regularly?


Edgar John Benson: Mr. Speaker, as was said by Secretary Kennedy of the United States today, in a country and a situation where you have inflation rising very quickly you either have to have fiscal and monetary controls or you have to have a closed society. Perhaps it is a closed society that the hon. member would prefer.


David Lewis: Mr. Speaker, in view of the fact that I am not talking about a closed society, and the minister should know better than suggest it, may I ask him if he is prepared to consider some form of foreign exchange control that would keep Canadian capital for

June 10, 1969
Inquiries of the Ministry Canadian investment and prevent the spillover of the American increase in interest rates?


Edgar John Benson: I do not think the conclusion mentioned by the hon. member would be the result of the institution of foreign exchange control, something which I think most Canadians would not welcome.


David Lewis: Mr. Speaker-


Mr. Speaker:: Order. I suggest to the minister and to the hon. member that they are getting into debate-


An hon. Member:: It is very interesting.


Mr. Speaker:: It may be very interesting, but perhaps we could have this debate later this afternoon during the budget debate.



AIRPORTS


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I would like to ask a question to the Prime Minister.
Can he inform the house if it is true that he has agreed to reconsider the choice of the site for the future international airport at Ste. Scholastique, following the recent request of the premier of Quebec, the hon. Jean-Jacques Bertrand?


Mr. Speaker:: The hon. member cannot ask a minister to deny or confirm a report, a piece of news or a rumour.



CANADIAN BROADCASTING CORPORATION


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is intended for the Secretary of State, as the minister responsible for the C.B.C. I would ask his parliamentary secretary if he would determine whether or not this morning's C.B.C. Preview Commentary, which can only be described as an irresponsible, false, garrulous and pro-Communist interpretation of the news, is deliberate C.B.C. news policy, particularly in view of its coming on the eve of the announced withdrawal of 25,000 U.S. combat troops from Viet Nam?


Mr. Speaker:: Order, please. I suggest to the hon. member that his question is more of a speech than a question, and to that extent cannot be asked.



STATUS OF DISCUSSIONS BEFORE CANADA-U.S. ENERGY POLICY COMMITTEE

Robert Lorne Stanfield: Mr. Speaker, can the Prime Minister tell us who is in the house today to answer questions relating to oil. Yesterday he assured the hon. member for Peace River that the Minister without Portfolio from Saskatoon would be here.


Pierre Elliott Trudeau: If the hon. gentleman will consult the order in council he will see that the acting minister is the Minister of Industry, Trade and Commerce.


Robert Lorne Stanfield: I am sorry; I have not consulted the order in council.
Mr. Speaker, is the acting minister able to advise the house about the status of the discussions before the Canadian-U.S. committee on energy policy which was announced following the Prime Minister's visit to Washington in March? Can the minister say what meetings have been held and whether in general the government feels there will be prolonged negotiations, or whether we may expect some announcement from the government in the very near future?


Jean-Luc Pepin: I would expect fairly long negotiations, or at least an exchange of views on these matters between Canada and the United States, for the obvious reason that the United States authorities themselves are going through a review of their oil policy and a quite extensive one. Presumably this will take a number of months. The answer is then that we are keeping in touch with the United States as closely as we can in order to give our views on the subject, make our own input, and find out as much as we can about their thinking.



SHIPMENT OF OFFSHORE PRODUCT TO AREA WEST OF OTTAWA RIVER

Robert Lorne Stanfield: I have a supplementary question on a matter within the jurisdiction of the government of Canada which arises from an answer given by the genuine minister last
Tune 10, 1969

May 22 to the effect that he was looking into reports that since the opening of the shipping season on the Great Lakes offshore petroleum products were being shipped west of the Ottawa River. Can the minister say whether the information sought by the minister has been obtained and whether he is in a position to advise the house concerning what decision the government has taken following the acquisition of this information?


Jean-Luc Pepin: I shall remind my colleague of his promise, but shipments across the Ottawa River Oil border into Ontario are not new. Such things have always gone on. It is a matter of controlling how much is being carried across the line; that is really the problem. However, I shall remind my colleague of his promise.



INQUIRY AS TO NEW CANADA-U.S. AGREEMENT

Eldon Mattison Woolliams: Mr. Speaker, in view of the answers given to the Leader of the Opposition in reference to petroleum may I ask whether a new agreement has now been consummated with the United States or is about to be consummated? We have had all this dialogue before.


Jean-Luc Pepin: No, with regard to exports from Canada to districts one to four we are still operating under the agreement I made in 1967 with Mr. Udall.



FINANCE


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Minister of Finance. Now that the South African tobacco company, Rothmans, won out over a United States tobacco company, Philip Morris, in securing control of Canadian Breweries, may I ask the minister how soon he will be making his promised statement on the take over of Canadian companies by foreign investors?


Edgar John Benson: The promise I made was with regard to the takeover of a certain financial intermediary in Canada by foreign interests. I would hope to make that statement before the house rises, but I cannot promise exactly when it will be
Inquiries of the Ministry made. Presently we are looking into a great many matters involved in this.


Thomas Clement (Tommy) Douglas: In view of the fact that Canada apparently is becoming a battleground for foreign conglomerate corporations is the minister considering the imposition of a takeover tax as suggested by a former Liberal minister of finance?


Edgar John Benson: No; I am not considering the imposition of such a tax.


Mr. Speaker:: Order, please.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I should like to direct a question to the Minister of Fisheries. Since the international fishing authorities at Warsaw have recommended a ban on salmon fishing in the Northwest Atlantic can the minister say when he expects Canada to ratify the ban on Atlantic salmon fishing in international waters?


Hon. Jack Davis (Minister of Fisheries and Forestry):: I would certainly want Canada to support this recommendation.



SEALS-CONSERVATION PLANS OFF LABRADOR

Mr. James A. McGrath (St. John's East):: Mr. Speaker, can the minister tell the house when Canada will be sitting down with Denmark and Norway to work out conservation plans for the seal herd off the front of Labrador?


John (Jack) Davis: There were discussions along those lines last week as the hon. member probably knows. There will be further discussions during the summer.



HADDOCK-MEASURES TO CONTROL FISHING OPERATIONS

Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, may I ask the minister what conservation measures he intends to introduce to control haddock fishing off our coasts, as was agreed at the recent meeting of the International Commission for Northwest Atlantic Fisheries?


John (Jack) Davis: I do not know at this moment, but I will be looking into the matter.

June 10, 1969
Inquiries of the Ministry RESTRICTIONS IN SAINT JOHN HARBOUR AND BAY OF FUNDY


Mr. Thomas M. Bell (Saint John-Lancasier):: Mr. Speaker, has the minister anything to report on the possible relief for the Saint John harbour salmon fishermen? This question was asked twice last week.


John (Jack) Davis: We are considering giving them three days a week, but sis only one salmon has arrived at the Mactaquac fish hatchery, we have our doubts.


Thomas Miller Bell: In case my question might have been misunderstood, may I ask the minister whether he realizes this is the fault of his conservationists originally?



FINANCE


Max Saltsman: Mr. Speaker, I have a question for the Minister of Finance. Has his attention been drawn to a statement by Mr. Wright Patman of the United States Congress who said that the increase in the bank rate was outrageous and stating that he is going to ask that large banks be prevented from entering into conspiracy. In view of the minister's inability to cope with the situation here in Canada-


Mr. Speaker:: Order, please.



NATIONAL DEFENCE


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, may I direct a question to the Minister of National Defence. I should like to ask the minister if he will advise the house whether in the last few months officials of West Germany have suggested that they might be willing to enter into an agreement with Canada which would have the effect of lowering the present cost of maintaining our troops there? If such a suggestion was made what was the reaction of the Canadian government to it?


Hon. Leo Cadieux (Minister of National Defence):: To my knowledge no such proposition was advanced.


James Aloysius McGrath: Mr. Speaker, I have a supplementary for the Minister of National Defence. Would the

minister consider the request of the Canadian Legion to have a defence base established in Newfoundland, and perhaps redeploy the troops to be withdrawn from Germany to Newfoundland?


Mr. Speaker:: Order, please.



REPORTED MINISTERIAL STATEMENT PLEDGING EFFECTIVE EUROPEAN MILITARY PRESENCE

John Angus MacLean: Mr. Speaker, I have a supplementary which perhaps I might address to the Prime Minister. Since it is reported that the Secretary of State for External Affairs last night in Oslo, Norway, pledged that effective military presence may be maintained in Europe, can the house assume that the principle of a Canadian military presence in Europe has been decided in the affirmative and that this question is no longer under discussion?


Mr. Speaker:: Order, please. The question is not in order.



POST OFFICE DEPARTMENT


Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question for the President of the Treasury Board. I should like to ask the minister when the government intends to lift the freeze, so that the Postmaster General can get on with the business of establishing a letter carrier service in the City of Courtenay?


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



AIR TRANSPORT


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Minister of Transport. Would he say when it is his intention to table the second volume of the Robinson report dealing with safety and air traffic control?


Donald Campbell Jamieson: Mr. Speaker, I hope to make a statement in respect of this matter on motions within a day or two.



NEWFOUNDLAND-EASTERN PROVINCIAL AIRWAYS SERVICE TO DEER LAKE

Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, can the minister
June 10, 1969

advise the reason for the discontinuance of E.P.A. jet service to Deer Lake in western Newfoundland only a few days after it was instituted?


Mr. Speaker:: That question might be considered at the time of adjournment.



EXTERNAL AID


Mr.  R. Gordon L. Fairweather@Fundy-Roy-al: Mr. Speaker, when the minister is
answering the question posed by the hon. member for Cochrane about the destruction of relief planes flying food and medicines to Biafra, I wonder whether his statement could include an indication as to whether the Geneva convention has been breached as a result of the destruction of clearly marked Red Cross aircraft?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I am afraid this is a question involving a determination of fact, and it would not be possible to achieve that by tomorrow.



WATER RESOURCES


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I should like to direct my question to the Minister of Energy, Mines and Resources, asking him whether his department has investigated a report of the dumping in February of 150,000 gallons of hydrochloric acid into Hamilton Bay by the Steel Company of Canada, Limited, and if so, has a report been made and will it be tabled?


Mr. Speaker:: Order, please. Since this
question deals with an incident that is alleged to have happened some weeks ago the question should normally be placed on the order paper.



WHEAT AND BARLEY-LOW PRICED SALES BY FRANCE TO MAINLAND CHINA

Gerald William Baldwin: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce relating to his favourite subjects, wheat and barley. When he was in Europe did he seize an opportunity to
Inquiries of the Ministry discuss with the French government the question of fire sale prices of subsidized grain to countries such as China, and did he receive any assurance that this policy would be reviewed?


Jean-Luc Pepin: Mr. Speaker, French politicians were quite busy at the time of my visit. Consequently it was thought that it was not appropriate to ask them to leave their ridings and their campaigns to meet with me in Paris. I made a speech in Paris though and I am quite sure they will hear about it.



AIRPORTS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I have a question for the Minister of Transport. Considering that E.P.A.'s new and excellent jet service from Montreal to Charlottetown has clearly demonstrated the need for more terminal facilities at the Charlottetown airport, can the minister advise when the needed extension will be started so that the government sector will not lag too far behind the private sector providing service to Prince Edward Island?


Donald Campbell Jamieson: Mr. Speaker, this is one of several areas we are now examining as to what is needed in the way of extended and additional services. I hope to have an answer for my friend shortly.


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I should like to ask the minister whether these studies involve the actual question of a second national air system?


Donald Campbell Jamieson: I suppose it is difficult to have airports without an air system, but I am not quite sure I know just exactly what my friend has in mind.


Robert Jardine McCleave: From Bonavista to Vancouver Island.



MEETINGS OF CANADA-U.S. COMMITTEE

Robert Lorne Stanfield: Mr. Speaker, I should like to ask another question of the Acting Minister of Energy, Mines and Resources. Can he tell us how many meetings of the Canada-United States committee on oil negotiations which was established in March have taken place?

June 10, 1969
Inquiries of the Ministry


Jean-Luc Pepin: Mr. Speaker, I know there was one at the time the Prime Minister went down to Washington. I know there is one which is planned or took place very recently. I will find out, and the minister will give that answer along with the other part of the question to which I did answer, although perhaps incompletely.



COMMUNICATIONS


Mr. John Gilbert (Broadview):: Mr. Speaker, in view of the national importance of telecommunications satellites, will the Postmaster General and Minister of Communications indicate to the house whether the major contract for the construction of the satellite system has been awarded to a United States subsidiary of R.C.A. Victor, and, if so, what precaution the government has taken to protect patent rights?


Mr. Speaker:: Order, please. I think this question should be placed on the order paper. If there is urgency in the question, which is not apparent to the Chair, I will be pleased to give it preference, to make sure it can be considered at the time of adjournment.



STUDENT LOANS


John Howard Lundrigan: Mr. Speaker, considering that many university students have not been able to obtain summer employment, would the minister consider raising the $1,000 ceiling on loans now available to university students?


Edgar John Benson: Without fully accepting the premise of the question, this matter will of course come up for consideration before the loans program for the coming year goes ahead. I should indicate that under the program there has been a great extension, and that the federal government has always provided the sums necessary within the provinces to meet such programs.



DISCUSSIONS DIRECTED TOWARD EASING OF ELIGIBILITY REQUIREMENTS-SCHOLARSHIPS

David Lewis: Mr. Speaker, I should like to ask the Minister of Finance whether he would undertake to enter into discussion with the provincial governments in respect of an easing of the requirements for student loans, and also whether he
(Mr. Stanfield.]
and his colleagues are considering the introduction of the scholarship system which was promised some years ago by Mr. Pearson?


Edgar John Benson: Mr. Speaker, in answer to the first part of the question, most of the correspondence I have received regarding student loans has been in respect of abuses, or people getting them who do not need them-not people having difficulty getting them. In respect of the second part of the question, when a decision is made in this regard it will be announced in due course.



ADMINISTRATION OF JUSTICE


George Harris Hees: Mr. Speaker, about a month ago the Minister of Justice advised the house that he had asked the Secretary of State for External Affairs to speak to the United States Secretary of State regarding the extradition of Hal Banks. Can the Acting Secretary of State for External Affairs now bring himself up to date on this matter and advise the house tomorrow, on motions if possible, whether the United States government is now prepared to receive an application from Canada for the extradition of Mr. Banks?


Charles Mills (Bud) Drury: I will bring myself up to date, Mr. Speaker.


George Harris Hees: Mr. Speaker, when the Acting Secretary of State for External Affairs has brought himself up to date on this important matter by this time tomorrow, will he make a statement on motions?


Charles Mills (Bud) Drury: Mr. Speaker, I am not sure I would be right in taking up the time of the house to make a statement on motions, but I will answer the hon. member's question tomorrow.



FINANCE


Marcel Joseph Aimé Lambert: Mr. Speaker, I wonder whether the minister is in a position to table a copy of the annual report of the Bank of International Settlements, in view of the fact that this report contains some very serious warnings about possible difficulties in international exchange and
June 10. 1969	COMMONS
monetary relations between the countries of the world?


Edgar John Benson: Mr. Speaker, I will endeavour to get an extra copy and table it in the house, as requested by the hon. member.



FEDERAL ASSISTANCE TO MEET PAN-AMERICAN GAMES DEFICIT

Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance. In view of the government's action in writing off the Expo deficit of $125 million, will it consider making similar arrangements in respect of the Pan-Am games, also a 1967 national event?


Edgar John Benson: Mr. Speaker, I should perhaps explain that the government did not write off the Expo deficit. It wrote off its share of the Expo deficit, which was part of the agreement made when Expo was first entered into. The other part of the deficit to be assumed by the province of Quebec and the City of Montreal we expect to be paid in due course. I should say this was an agreement entered into by a former Conservative government.


Stanley Howard Knowles: Mr. Speaker, will the minister still consider some kind of similar arrangement with Winnipeg in connection with the Pan-Am deficit?


Edgar John Benson: I will look into the matter.
[DOT] (2:50 p.m.)



GOVERNMENT ORDERS


[Stage Direction]
The house resumed, from Monday, June 9, consideration of the motion of Hon. E. J. Benson (Minister of Finance) that this house approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West) (p. 9880), and the amendment to the amendment of Mr. Saltsman (p. 9883).
Robert Norman Thompson: Mr. Speaker, in spite of the numerous interjections last night by the Postmaster General (Mr. Kierans) and the Minister of Finance
DEBATES	9933
The Budget-Mr. Thompson (Mr. Benson) I will still limit my remarks to a few minutes.
The Minister of Finance asked me last night to define the gross national product. Frankly, I am amazed that a man in his position is not well enough informed to know this rudimentary fact. For his information, and I would hope his edification, may I say that the gross national product, by totalling all costs arising in production, measures the market value of all final goods and services produced in the current period by Canadian factors of production. It is equal to national income plus net indirect taxes, indirect taxes less subsidies, plus capital consumption allowances and miscellaneous valuation of adjustments.
This is something far different from the net income of the nation and its citizens which at factor cost measures the current earnings of Canadian factors of production, that is, land, labour and capital, from productive activity. It includes wages and salaries, profits, interest, net rent and net income of farm and non-farm unincorporated business.
According to page 79 of the budget papers presented to parliament by the Minister of Finance just prior to the budget, the gross national product of Canada in 1968 was $63,368 billion. The net national income for Canada in 1968 was $50,628 billion. On page 125 of the white paper it is stated that the federal budgetary expenditure was $12,058 billion. The combined provincial and municipal governmental expenditure for 1968 was something over $13 billion. On page 41 of the budget papers it is stated that the total government revenues for 1968, that is, federal, provincial and municipal revenues, exclusive of all intergovernmental transfers and not including borrowings or deficit spendings, amounted to $24.2 billion.
This figure of $24.2 billion represents the net total of taxes collected by governments at all levels during 1968. With the total amount of the actual income of all Canadians amounting in 1968 to $50,628 billion, the percentage of income taken from the Canadian taxpayers' pockets by the various tax collectors amounts to just over 47 per cent. I stated last night that it was nearly 50 per cent. As I did not have the actual statistics for 1968 before me, I could not give the specific percentage at that time, which we now find has passed 47 per cent for the first time.
My concern is twofold. First, the percentage of the income of Canadians required by the government has reached dangerously high
June 10, 1969

The Budget-Mr. Weatherhead levels. Historically, no free society has survived when the amount of its citizens' income required by government has passed 50 per cent. We are moving continually and continuously nearer that mark. The budget of the Minister of Finance does nothing to reverse this trend. Under his direction, thus far at least, the country is moving relentlessly toward an economic crisis.
Second, the urgent needs of municipal governments are rapidly bringing that level of government to a crisis of vast proportions. The need of new tax resources and capital financing just to provide the basic public needs for schools, hospitals, housing and essential services is great, far beyond the present reaches of that vital level of government. This budget does not do anything to alleviate the situation but rather aggravates the looming financial crisis.
In closing my remarks may I say it is one thing to gloat smugly over a balanced budget and quite another to provide a viable alternative which offers some hope for the future. The general consensus of government economists is that higher taxes, higher interest rates and tight money will eventually stop inflation. It may slow it down for the moment, but if these methods would ultimately accomplish that objective it would have been reached long ago.
What this country needs is an adequate financial policy which represents major surgery. The aspirin treatment provided now and perpetuated by the Minister of Finance from his Liberal predecessors is not good enough. I hope that in his promised white paper on the financial and fiscal situation in the nation he will deal with root causes, not just symptoms. The economy of this country will not survive simply on more and more palliatives. I suggest that the Minister of Finance come down out of the clouds and face the reality of the situation before a financial crisis breaks upon us.


Mr. David Weatherhead (Scarborough West):: Mr. Speaker, first of all I would like to congratulate the Minister of Finance (Mr. Benson) for bringing down a budget last week which is aimed directly at two of the main problems facing Canada at this time, namely, inflation or the ever-increasing cost of living, and regional economic disparity. The fact that he has been able to do so without increasing the rate of income tax, sales tax, corporation tax or excise tax, while at the same time anticipating the first balanced

budget in 13 years with a surplus of about $250 million, is very commendable.
There are, of course, other problems affecting the country, including those between the French and English linguistic groups and the serious urban problems of housing, pollution, transportation, etc,, of which those of us from the cities of Canada are very much aware. I would like to refer to them again later in my remarks.
The budget forecasts the continued general prosperity of Canada in recent years, and notes a general decline in unemployment during the last 12 months, as well as a real increase of the gross national product of over 5 per cent which is expected for this fiscal year. While everything possible should be done to decrease inflation and decrease unemployment, which are not always compatible, Canada as a world trading nation is directly affected by the general economic and fiscal conditions of the world because of our close economic ties, especially with financial and economic conditions in the United States. The extremely heavy cost of the war in Viet Nam for the United States has resulted in financial difficulties and inflationary pressures which reverberate into Canada. An end to that war would probably decrease inflation in Canada more than any other single factor, but we have little control over that.
There are many ways in which the government can fight inflation, and apart from the measures in this budget there has been considerable recent government action in this regard. The prices and incomes commission recently set up by the Minister of Consumer and Corporate Affairs (Mr. Basford) will be a valuable new element in Canada's battle against inflation. It will inquire into and report upon the causes, processes and consequences of inflation, and will inform the government and the general public how price stability can best be achieved. If this Commission and the other government measures are not as successful as hoped for in this regard, I believe serious thought will have to be given to granting such a commission, or a similar one, more direct powers toward controlling spiralling prices and incomes, although I trust such a step will not prove necessary. In any event, inflation which steals from everyone, and particularly hits hard at the poorer, older people on modest fixed and semi-fixed incomes and pensions, will have to continue to be attacked by all levels of government, and this budget and recent federal government action go a long way in this regard.
June 10, 1969	COMMONS
The pegging of Department of National Defence expenditures at their figure of $1.8 billion which is now about 16 per cent of our expenditures, and the thorough review of other government spending programs with a view to cutting out unessentials, are further evidence that the federal government is serious about this matter. Our defence and foreign policies are still undergoing reviews, and while Canada will always want to play her full part in international affairs it may still be that we are not getting the best value for our $1.8 billion spent on national defence and that we could cut our expenditures somewhat in this field without jeopardizing our true effectiveness in the world.
The extension of the 3 per cent surtax for another year on income and corporation tax affects mainly those making over $10,000 to $12,000 a year and will continue for another year, primarily as an anti-inflationary measure.
The immediate implementation of the final tariff rates agreed to by Canada during the Kennedy Round negotiations should spur more vigorous price competition and efficiency of production in our Canadian plants. Freer trade has been a classic principle of Liberalism, and while it may cause short term problems in some industries and plants, reduced tariffs on $2.1 billion of imports of raw materials and finished goods will result in somewhat reduced prices to consumers in many items. The announcement by the Minister of Consumer and Corporate Affairs that he will establish some machinery to ensure that savings by reason of these tariff reductions will be passed on to the consumer is also encouraging in this fight against inflation. That minister is to be congratulated for his zeal in continually thinking of ways to give the consumer a better break.
The other main anti-inflation measure in the budget, and one with regional development undertones, is the deferring of capital cost allowances for two years on commercial buildings put in place to the end of 1970 in cities of over 50,000 in Ontario, Alberta and British Columbia.
This, of course, affects metropolitan Toronto more than any other city, since our city has by far the largest number of commercial projects in the active planning stage of any city in Canada. It was on this basis that the Toronto Telegram in an editorial on June 5 stated that Toronto members of parliament should blast the new budget, which in its words discriminates against Toronto and
DEBATES	9935
The Budget-Mr. Weatherhead other Ontario cities. As a lifelong resident of metropolitan Toronto and as one who represents some 90,000 of its citizens in this parliament, I am very disappointed at the parochial, narrow and shortsighted attitude of that newspaper as represented in that editorial.
[DOT] (3:00 p.m.)
The government wishes to reduce pressure on the construction industry which is a trendsetter in the escalation of prices and costs in general, in the economy as a whole. In the construction industry new commercial buildings were scheduled to increase the most, and most of this increase was to be in the big cities of those three provinces. This meant that commercial building enterprises would be bidding in the market for scarce labour and scarce financing in competition with essential and badly needed housing and industrial building projects.
Accordingly, it is the purpose of this budget policy to hit at one cause of inflation at its source, the heavy investment in new commercial buildings in the big cities of the three provinces, while exempting the other provinces and all the smaller communities because of higher unemployment and slower economic growth in those areas. It recognizes the very important principle that inflation and other economic problems can be regional in nature.
While this is mainly an anti-inflation measure, its two-side effects are the desire that more and cheaper financing will be available for housing and industrial projects in these 22 cities affected, and that there will be an increase in commercial building in the slower development areas of our country.
I hope that this is the case, but I believe that if this part of the budget is to be criticized it is because it may not go far enough in putting a damper on commercial building in the high-growth cities for more effective anti-inflation results and for more beneficial increased housing and regional development aspects. The regulations will exempt structures for which firm commitments have been made. It appears also, at this very early date, that at least some of the other commercial buildings will not be deterred by the deferral of capital cost allowance of usually 5 per cent per year, because of the effect that, a 4 per cent, let us say, annual inflation in building costs would have, if the projects were delayed for two years. However, it still should make some more financing available to
S836>
June 10, 1969

The Budget-Mr. Weatherhead housing and industrial development in Toronto and the 21 other urban areas, and will probably help divert some additional commercial activity to more underdeveloped areas. It is because of the commendable aspects of this budget policy as anti-inflationary, an aid to housing financing, and as some aid to underdeveloped areas without hurting the booming economy of Metro Toronto to any real extent, that I took such exception to the comments of the said newspaper.
There are many important projects, Mr. Speaker, in or near Metropolitan Toronto at the present time in which the federal government is or should be directly involved-the whole housing area under the National Housing Act and Central Mortgage and Housing Corporation, the waterfront development plan, the C.N.-C.P.R. downtown complex, the urban renewal areas, the considerable expansion of Malton airport and making it more international in character, the location and building of a second international airport, the C.N.E., a new downtown post office complex and new suburban stations, and its participation in flood control aspects of acquiring land for the Metropolitan Toronto and Region Conservation Authority. I and other Members of Parliament from Toronto have no hesitation in promoting these and other Toronto area matters with the federal government, and our Toronto area Liberal caucus has had numerous meetings with municipal and federal government officials during the last year on these and other matters with considerable success. However, this does not mean that we are blind to the needs of the rest of the country, particularly the more underdeveloped areas, and while promoting the legitimate federal concern in Toronto we will support wholeheartedly proposals such as just discussed in this budget which attack regional disparity.
Time will tell whether this budget policy with respect to commercial buildings is as effective as hoped, but the principle that policies to fight inflation need not and should not apply in the same way to all regions is an excellent one, and more stringent regulations can always be included in the budget next year if necessary.
About 80 per cent of the constituencies in these 22 cities, Mr. Speaker, are represented by Liberal Members of Parliament and we make up nearly 40 per cent of the total number of Liberal members. In the rest of the country we hold only 45 per cent of the seats and the opposition parties hold 55 per cent. I

think that this reiterates the government's determination to attack inflation and regional disparity despite the fact that the government party is so strong in the 22 urban areas that will feel the brunt of the deferred capital cost and lower tariff policies.
Along with the benefit the deferred capital cost policy will have in underdeveloped areas, with the regional development incentives bill recently introduced by the Minister of Regional Economic Expansion (Mr. Mar-chand) should play a very important role in overcoming disparities in economic and social development between regions in Canada. The granting of up to $12 million for each new manufacturing company which will contribute substantially to employment in designated slow-growth areas should prove a strong incentive to the establishment of badly needed plants in these more economically backward areas. This combined with heavy federal investment in the comprehensive redevelopment of Prince Edward Island announced earlier this year will go a long way toward making a more just society in these underdeveloped areas. This is so important not only for the people living there but for the whole country, since Canada will be unable to survive as a country unless the gulf between the affluent and poor areas of the country is narrowed as quickly as possible.
In passing, Mr. Speaker, perhaps I could be permitted to express my support for the languages bill now being considered by a committee of the house and which, I am sure, the house will pass within the next few days. As one born in Toronto of English-Irish ancestry, including United Empire Loyalist stock who came to Canada nearly 200 years ago, my support of the bill might be suspect to some people. However, I strongly believe that our two most numerous linguistic groups and the only main ones that were here at the time of confederation, should have the right to conduct business affairs in their own language in federal government departments across the country in areas where they make up a significant proportion of the population. Despite my Anglo-Saxon background I am lucky enough to be married to a girl of Ukrainian background and therefore appreciate a little the view of some of our Canadians whose native language is neither English nor French. I believe we have been extremely fortunate in the high quality of all our immigrants, but the English and French linguistic rights as official languages were established before confederation and I believe they
June 10, 1969	COMMONS
should remain so without in any way detracting from the worth or importance of the languages or cultures of all our excellent Canadians of a non-English or French linguistic background.
One of the pleasant by-products of being a Member of Parliament, Mr. Speaker, is the opportunity we get to learn English or French, if we wish to do so, under excellent instructors. I have been taking instruction in French since last October, with one of the groups of English-speaking M.P.s, four hours a week in Ottawa, with periodic immersion courses of one to two weeks at St. Jean, Quebec, and perhaps in next year's budget debate I will be able to perform partly in French.
I would like to say, Mr. Speaker, that my riding in the east end of Metropolitan Toronto is part of a traditionally strong Anglo-Saxon, Protestant area of the city. However, I campaigned last year on the need for bilingual districts and a bill such as the one above-mentioned, and I have received not one letter of complaint about this bill since it was introduced last fall. I wish I could say the same thing about some of our other policies and bills. I am sure that the people of Scarborough West and Metropolitan Toronto, in general, are quite agreeable to the implementation of the languages bill as an essential aid to national unity.
Since one of the reasons for the deferred capital cost allowances on commercial buildings was to divert more scarce capital and labour into new housing, perhaps I could close my comments, Mr. Speaker, with some remarks on this all-important subject, particularly for those of us who come from the Metropolitan Toronto area. I have been very interested in housing and urban policies, and in my maiden speech last fall referred to some of the proposals I and other elected officials from Scarborough made to the housing task force last October. I read the task force report with interest when it came out at the end of January, agreeing broadly with it, and then I was somewhat disturbed by the sudden resignation of the hon. member for Trinity (Mr. Hellyer) as Minister of Transport. However, the immediate announcement by the Prime Minister (Mr. Trudeau) of many amendments to the National Housing Act and regulations, and the additional details given by the new minister responsible for housing on second reading of the bill recently, exceeded my expectations and
DEBATES	9937
The Budget-Mr. Weatherhead should go a long way with Ontario government co-operation to help alleviate the housing problem in Metropolitan Toronto and in other areas of the country.
[DOT] (3:10 p.m.)
The fact that the federal government will now lend 90 per cent of the cost of acquiring land to either the province or municipality with provincial consent, for either public or private housing, should clear the way for substantial tracts of land or land banks being acquired in the outer suburban districts of Metro Toronto and the larger cities. This land, after servicing, will be sold as building lots for considerably less than the going rates, which should have the beneficial effect of decreasing land values in the whole area. To make it effective large tracts will have to be acquired around Metro, and the land is so expensive now that huge sums of money will be involved. However, the federal moneys are just loans and will be repaid, I suppose on a revolving fund basis.
The paying of a 50 per cent subsidy by the federal government on apartments and homes rented by Ontario Housing Corporation and similar agencies in other provinces will mean in Metropolitan Toronto that O.H.C. will be able to rent many more individual apartment units, which will go a long way toward satisfying the nearly 14,000 applicants waiting for same. The lifting of the freeze on public housing projects that have C.M.H.C. approval should also accommodate many more than those on the waiting list. However, I was happy to see the task force comments on the desirability of row type and more diversified public and private housing have not been forgotten, and that after consultations with the provinces new guidelines on this subject will be announced by early next year.
Increasing the maximum of National Housing Act mortgages to $25,000, extending the term to 40 years and cutting the mortgage insurance fee in half are very beneficial measures in my home area where new houses in our suburbs start at about $30,000. A $5,000 down payment will now suffice, rather than the $12,000 needed before when the N.H.A. maximum mortgage was $18,000.
Similarly, increasing N.H.A. mortgages to $18,000 on resale homes should make more mortgage money available for older homes and will allow O.H.C. tenants in many cases, with provincial approval, to buy on reasonable terms the homes in which they are now living.
June 10, 1969

The Budget-Mr. Weatherhead
The freeing of the interest rate and the reviewing of the rate every five years should make more mortgage money available at somewhat reduced rates. If it does not have that effect fairly quickly these proposals will have to be reviewed.
Increased federal loans to limited dividend housing and federal loans to buy up and renovate older homes in an urban development area, rather than having to level all the buildings to the ground, are among some of the other welcome amendments to this legislation.
There are, however, two policies in connection with housing that I believe are very important, which were favourably referred to in the task force report but which have yet to be implemented by the government. In my maiden speech I supported the creation of a separate government department of housing and urban development with its own cabinet minister, and 1 still think it is a good idea. The present minister responsible for housing is now a Minister without Portfolio, but without all the staff and facilities, independent of C.M.H.C., that a full minister of housing and urban affairs would have. The present minister is certainly to be congratulated on the speed at which he has moved since becoming the minister responsible for housing, and he would make an excellent first minister of a new department of housing and urban affairs.
Such a federal department would underline even further the federal government's interest and concern in those matters which affect about 75 per cent of all Canadians at the present time, those who live in our urban areas, without interfering in the constitutional jurisdiction of the provinces in this field. It could co-ordinate co-operation between the three levels of government with respect to urban matters, and also stress more greatly research into city problems at the government and university levels.
My second policy relates to the 11 per cent federal sales tax on building materials. I understand that this produces about $300 million in revenue for the federal government, which is no mean amount. However, if housing is not a national crisis, it surely is a very serious problem in metropolitan Toronto. The problem is not so much the lack of supply but the high price of the units available.


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member but his time has expired.


Some hon. Members:: Continue.


Mr. Deputy Speaker:: Is there unanimous consent that the hon. member continue?


Some hon. Members:: Agreed.


David Bennington Weatherhead: I wish to thank hon. members and I will be through in about two minutes.
The task force report found that the combined federal and provincial sales taxes can add up to $950 to the final price of a modest three bedroom bungalow. It appears to me somewhat incongruous that we and the provincial governments are keeping these sales taxes on residential building materials, while at the same time all our other governmental policies are aimed at driving the price of houses down. We have a surplus now of $250 million, and while I suppose every Member of Parliament has a favourite scheme for spending some or all of this surplus, I believe that if for inflation reasons we do not want to spend all of the surplus we could either cut the sales tax in stages annually, or perhaps could give rebates of tax on houses which cost, say, $20,000 or less, exclusive of land, as suggested by the task force. This would have a direct effect on reducing the price of new homes, which is what our legislation is trying to achieve.
Finally, Mr. Speaker, the Minister of Finance mentioned in his budget speech that the government white paper on tax reform will be coming out this summer. The legislation that comes out of this white paper will be among the most important of this 28th parliament, since it will substantially reform our present tax laws and make them far more fair and equitable for all.
With the rest of the country I am awaiting the government's proposals in this regard with great interest. In the meantime, despite my criticisms with respect to the sales tax, I would again like to congratulate the Minister of Finance on the general anti-inflation, regional development tenor of this budget.


Robert Lorne Stanfield: Mr. Speaker, the first thing one must say about this budget or budgetary statement is that it proves the failure of the October budget presented by the Minister of Finance (Mr. Benson). This is clearly proved by the minister's own admission that inflation is not slowing down as he then predicted, making him not only a bad forecaster but a poor improviser or developer of policies. Actually, according to his own admission the rate of inflation this year will be at least as high as last year, when it was the highest it

June 10, 1969
had been for 17 years in Canada. Indeed, over the last 12 months, if I compare last May with May, 1968, the rate of increase in the cost of living index has been 4.7 per cent.
The minister says, of course, that things will be better in 1970, and that we should wait until then. We have been listening to this same old story since 1965 from successive Ministers of Finance across the way. I have been here about a year and a half and when I first came here the Minister of Finance and the President of the Treasury Board of the day were talking about what proved to be a phony program of cutbacks in expenditure. It turned out that they were not talking about cutbacks in expenditures at all. Then we went through the period when they cooked the books at the time of the last election and then disclosed quite freely when the election was over substantially higher estimates for the year. We then had the October budget with vast increases in taxes and the projection that inflation would be brought under control. Now we have the recent budget in which the minister admits that the October budget was a failure. So there is no confidence in the financial policies of this government. After all this talk we still have an unacceptable rate of inflation accompanied by an unacceptable degree of unemployment in the country.
[DOT] (3:20 p.m.)
Inflation, sir, is not just something we talk about; it is something that affects people. Consider for a moment the effect of an inflation rate of 4 per cent per year on the ordinary people of this country. Consider the effect on pensioners. How does inflation affect the pensioner's real standard of living? Consider the effect of inflation on the real purchasing power of those who receive family allowances. Consider also the terrible effect inflation has on the poor in this country. In addition, inflation increases income taxes without the authorization of parliament. It lowers exemptions incomes of people very substantially. It inflates incomes and therefore increases the actual rate of taxation of Canadians who pay additional hundreds of millions of dollars every year. Not only must we keep in mind that we pay this regressive 2 per cent social development tax which the minister imposed in October as well as other tax increases the minister imposed openly; we must also keep in mind that in every year in which there is substantial inflation, as at present, our people pay additional taxes which have not been authorized by parliament.
The Budget-Mr. Stanfield
The minister boasts of his surplus. That surplus is accounted for by the speed-up in the collection of taxes from corporations, by the fact that a number of provinces will not participate in the medicare program for the full year and by the unauthorized tax increase which is a result of inflation. What Minister of Finance collecting increased taxes consequent upon the increases imposed last October as well as increased amounts of tax money accruing as a result of the inflation taking place under his policies could fail to produce a surplus?


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: In addition, the minister keeps the lid on family allowances and allows old age pensioners inadequate compensation with which to meet increased living costs. Not only does the minister keep the lid on such payments but he also says to the provinces. "We will not pay attention to your priorities or payments. The answer is no, no, no. Go back and attend to your own problems and pay no attention at all to the recommendations on the Economic Council of Canada with regard to adequate programs concerning the poor." What has the minister to boast about under these circumstances when he produces a surplus? All these tax increases will burden economically hundreds of thousands of people in Canada.
I believe the minister tried to suggest in his budget that he was not increasing taxes. Of course he is. He is extending the 3 per cent surcharge even though the government solemnly assured the people of Canada it would be eliminated at the end of this year.


Some hon. Members:: Hear, hear.


An hon. Member:: Resign.


Robert Lorne Stanfield: Last October the minister said:
If the people do not recognize this surcharge as a tax increase, Mr. Speaker, I submit they will never recognize any tax increase.


An hon. Member:: They have been misled again.


Robert Lorne Stanfield: A tax increase of 3 per cent has been imposed. The tax was to be removed but was not. Therefore by continuing the tax
We will be taking into account the fact that our on the real value of income and corporation tax surcharges of 3 per
cent enacted early this year will terminate at the end of 1969.
June 10, 1969

The Budget-Mr. Stanfield the government is increasing taxation, no matter what view the government or the Minister of Finance may take of the matter. At the same time, of course, there have been increased charges for services provided by the government. Also, as a result of inflation, taxation is constantly increasing. The minister is promoting inflation.
We have heard much talk about inflation. On March 29, 1966, the Minister of Finance of that day, who is now Secretary of State for External Affairs (Mr. Sharp), is reported to have said in the house:
Mr. Speaker, if we do not by one means or another succeed in moderating the increase in aggregate expenditures this year the most immediate penalty we shall suffer is an inflationary increase in prices.
That was said in March, 1966. On December 19, 1966, that minister is reported to have said:
If some moderation in demands with inflationary consequences does not occur we may well find it necessary to impose sufficient fiscal restraint upon the economy as a whole to check them.
Then on June 1, 1967, that minister is reported to have said:
The most unsatisfactory aspect of the 1967 situation in Canada, as in many other countries, is the continuing upward movements in costs and prices .. . the rate of increase of consumer prices is more than we can tolerate on a continuing basis.
We now hear these pious statements twice a year. In November, 1967, the Minister of Finance is reported to have made the following statement:
We must bring to an end the present round of inflationary price and cost increases, and move to a situation in which all Canadians can work and buy and bargain and invest in the expectation that their money over the years will maintain its real value.
On March 6,, 1968, he is reported to have said:
It seems quite evident to me that our first priority in economic policy now must be to achieve greater stability in prices and costs.
Then we had a change of actors, but the role they played remained the same. The present Minister of Finance is reported to have said on October 22, 1968:
In the broad field of economic policy, the most urgent need now is to check further the continuing increase in prices and living costs.
Again, on June 3 this pleasant and optimistic Minister of Finance repeated the theme. 
We are getting budget speeches twice a year now. He is reported to have said:
There can be no question that the number one priority in economic policy today must be to deploy all available forces-public and private-more aggressively than ever in the battle against inflation in Canada.
For how long must we listen to such statements from Liberal Ministers of Finance? Four years ago the Liberal government first decided that inflation had gotten out of hand in Canada; yet we still hear these platitudes. They still want to reassess everything. Four years ago the Liberal government first waved over our heads the axe of spending cuts. They are still waving the axe.


An hon. Member:: That was a hoax.


Robert Lorne Stanfield: The axe is still being waved around somewhere over there, and I do not think that the supply of band-aids has been overly strained. What has the Liberal government been doing during the last three or four years of concern? The taxpayers of Canada know what it has been doing. We have lost count of all the tax increases we have suffered from in the past few years. These were tax increases the government imposed in the name of fighting inflation. The taxpayer wonders what is happening when he sees his personal income tax boosted to 164 per cent above the 1962-66 level. This year, sir, it is estimated that Canadians will pay 32 per cent more in personal income taxes. I suggest this sort of thing cannot be allowed to continue. We have had four years of so-called anti-inflationary policy and tax increases and still the Minister of Finance rises in his place and says that inflation will not slacken in this country this year. The Minister of Finance in fact is relying on inflation to balance his budget. I ask him how much of that 32 per cent increase in personal income tax this year is directly attributable to the inflation taking place during 1969? Wages and salaries would not be increasing so fast if we did not have an inflation which cuts the heart out of the spending power of the ordinary individual's income.
[DOT] (3:30 p.m.)
Consumer prices are going up at a rate of 4.7 per cent a year. That was the figure from May to May. A man has to earn at least that much more just to keep up. In fact, he has to earn more. For example, he does not enjoy any adjustment in his income tax deductions to allow for inflation. He just pays more. A married man with two children and an
June 10, 1969

income of $5,000,. receiving an increase of 4.7 per cent which is just enough to match the consumer price increase, would still be penalized by about $50. Real income is no higher but the people are paying a substantially higher tax which this government imposes secretly without any parliamentary authorization. As a result of these things we have the balanced budget about which the minister boasts. We wonder, Mr. Speaker, we wonder.
No one questions the importance of fighting inflation adequately and effectively. I have said many times that the longer this process goes on the less and less we will have to fight it effectively, and more and more vested interests will develop in favour of continued inflation. The chairman of the Prices and Incomes Commission says it is a mistake to bet on continued inflation. The Minister of Finance is betting on it. He not only bets on it, he predicts it. He is not only predicting it but he is counting on it to continue to produce the surplus that he is predicting. He is betting on continued inflation, Mr. Speaker. There can be no doubt about the manifold injustice that inflation is perpetrating in Canada.
Are the minister's proposals effective? Can we reasonably expect the methods proposed by the minister to succeed? I reminded hon. members a few moments ago about what we have heard from successive Ministers of Finance in the past four years-the same old thing, increased taxes to fight inflation. It has not succeeded. Inflation has continued. In fact, inflation has escalated. What new methods has the minister proposed? He has made a proposal to defer depreciation regarding commercial construction in certain centres in Canada. He has proposed that the Kennedy Round tariff reductions be implemented immediately rather than phased in over a number of years. I say to the minister that these proposals are interesting but I do not think they amount to very much in total.
What is the purpose of the minister in presenting this budgetary statement? Is his purpose psychological? Is his purpose to convince the people of Canada that this government is determined to conquer inflation? Is this his purpose? Was it for this reason the minister projected in the future a prospect of continuing present taxes? Was it for this reason he placed emphasis upon predicting the budgetary surplus and protecting it against those who might try to raid it? If this was his purpose, we must ask ourselves whether the minister has succeeded.
The Budget-Mr. Stanfield
Has the minister convinced the Canadian public this government is going to win the fight against inflation? It seems not, as far as I can judge. It may be this failure to convince the public is not the fault of the Minister of Finance. As the Prime Minister (Mr. Trudeau) suggested yesterday in connection with another matter, it may be the press that is at fault. They may have failed to carry conviction in this instance as in the other.
It is little wonder the public remains sceptical because what the minister told us about in the way of hard fact represented a continuation of failure. We must expect a low level of public acceptance and confidence in view of the misleading record of the government and its continuing record of bumbling. I wonder whether the Minister of Finance, like some others, could have an image problem to contend with? If he has, Mr. Speaker, it would be little wonder because we have had continued inflation and continued tax increases to fight inflation year after year.
I hope the minister read the government's own white paper on the subject of inflation which was tabled in the house last December. What some of us have been saying for some time is there in black and white, that the traditional methods employed by this government to fight inflation have not succeeded. It was clear to those who presented that white paper that the traditional methods had failed to achieve the aims of the government, that is, to provide reasonable stability of prices while providing a reasonably satisfactory degree of employment in the country. The government's record has been condemned in its own white paper. That white paper recommended the appointment of a Prices and Incomes Commission. I said at the time this was like putting a popgun in the hands of our troops. Lord knows, the white paper was slow enough in being presented in the first place. It was produced in December. It could have been written by two or three people sitting around for two or three days. We waited from June until December to get that white paper.
The only real recommendation the white paper made was the appointment of the Prices and Incomes Commission. We do not have the commission yet despite the fact that we question the minister responsible day after day, week after week, month after month. How can the Minister of Finance or the government expect anybody in Canada to take seriously suggestions that they are determined in their efforts to fight inflation when they have not acted on a very simple and
June 10, 1969

The Budget-Mr. Stanfield easy recommendation in their own white paper?
For three or four years the Economic Council of Canada has been recommending the establishment in this country with the government's help, of an independent forecasting unit. I think it should be apparent to the Minister of Finance that no one needs an independent forecasting unit more than he in view of the discrepancy in a few months between what he predicted in October and what we now have. The Economic Council of Canada says a forecasting unit to forecast relatively short term trends would, among other things, enable the government to present and develop policies related to conditions likely to develop and not conditions the Minister of Finance may imagine are likely to develop. Why has the government not been prepared to accept the recommendations of the Economic Council of Canada and co-operate with that very respectable body, the Private Planning Association, by establishing a forecasting unit? Why is there this stubborn determination to tie one hand behind its back with regard to developing adequate programs? Why continue this game of blindman's bluff which the minister persists in continuing? It is a perfectly simple, straightforward recommendation that the government has refused to act upon. That being so, how can members of the government expect any of us to take them seriously?
[DOT] (3:40 p.m.)
We have been talking about inflationary psychology. I remember the minister's predecessor talking about inflationary psychology in this country. There have been four years of talk, four years of higher taxation each year, four years of inflation each year. The minister's forecasts cannot carry any conviction. He expects that the inflation is going to continue. If he expects it to continue the people of Canada will expect it to continue and they will be making preparations for this in their forward contracts, whether they be labour contracts or any other type of contracts. In those circumstances, what chance have we of bringing inflation down to an acceptable level?
We must adopt different approaches. I do not mean that we should abandon fiscal and monetary measures. Of course we must have them, but the government's own white paper in December last said that these measures are inadequate. For a couple of years past the

O.E.C.D. has recommended that the government start to work toward an incomes policy. The governor of the Bank of Canada has made the same recommendation.
, Surely the government must realize by this time that you do not halt inflation just by creating unemployment. This was the policy of the minister's predecessor who said in this house that if it was necessary he would create some slack in the economy and unemployment, and this the government proceeded to do. We have now got the unemployment but we have more inflation than ever before.
Some new methods must be adopted to reinforce our attack on these problems. Ever since I came into this house I have urged that the government screw up its courage a bit and mobilize the Canadian people to fight inflation by getting together with business, labour and the community at large and developing guidelines, not as a permanent solution but as a way of breaking out of the vicious circle in which the Minister of Finance and the government have placed Canada.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I doubt, sir, that anybody is more aware than I am of the difficulties in price controls. But I do know that the fairly simple guidelines employed in the United States a few years ago-


Edgar John Benson: Did not work.


Robert Lorne Stanfield: -were substantially responsible for the United States doing a far better job for a number of years in controlling inflation than Canada did, and those guidelines broke down when they were not backed up by adequate, appropriate fiscal policies just because Congress would not act. Lord knows, by contrast, Mr. Speaker, the minister has got through enough tax increases in this country. I recommend this very earnestly as an interim measure. I recommend that the government seek the co-operation and help of the Canadian people. I recommend that it convince them that Canada is going to break out of this inflationary psychology, is going to fight it effectively, and that the government is going to stop fooling around year after year with tax increases. This at least would give the Minister of Consumer and Corporate Affairs time enough to get his Incomes and Prices Commission set up. If we give the Minister of Consumer and Corporate Affairs a year's breathing space he might get it set up. But are we going to wait around for years and
June 10. 1969

years for the members of the Prices and Incomes Commission to recommend policies to the government? Are we going to keep on raising taxes each year and seeing more and more inflation? Again, Mr. Speaker, why will the Minister of Finance not do something about establishing the forecasting unit recommended by the Economic Council of Canada and by the Private Planning Association? There is not one possible reason he can advance for this failure except the inertia of the government.
The minister's methods are not only failing with regard to inflation, putting a cruel and unjust burden upon the poor and the unfortunate, but the policies he is resorting to more and more all the time, policies of taxation applied uniformly across the country, are creating unemployment, are creating unnecessary hardship, are creating unnecessary waste of human resources in Canada. These policies are not only ineffective but they are brutal. These fiscal and monetary policies applied uniformly across the country depress the areas of slow growth such as the province of Quebec, the Atlantic provinces and other parts of the country.
As my distinguished colleague, the hon. member for Carleton-Charlotte (Mr. Flemming), said a few years ago, it is like giving castor oil to everybody whether they need it or not. Unquestionably the Minister of Finance is increasing the degree of economic disparity in Canada. Unquestionably he is very substantially increasing the difficulties of the Minister of Regional Economic Expansion (Mr. Marchand) through these fiscal policies that he is imposing, these uniformly applied tight money policies that he is developing.
A few weeks ago when he was among the people affected in New Brunswick the Prime Minister recognized that these policies were working hardships on them. What did he say to those people when he was among them? He said, "We are going to increase our expenditures down here to offset this." But what did he and the Minister of Finance do when he came back to Ottawa? Nothing, Mr. Speaker.
The program of the Minister of Regional Economic Expansion is a long-range one. He himself admits that it will take years for the program to get off the ground. In the meantime the Minister of Finance is putting the economy in the slow growth regions of Canada more firmly on the skids. There can be no doubt about the dampening effect of his fiscal and monetary policies, and there can be no doubt that they ought to be offset. It is in the

The Budget-Mr. Stanfield national as well as the regional interest to do this.
There are no inflationary pressures in those unfortunate parts of the country. What they do have is idle human resources. On the other hand, a great deal has to be done in those parts of Canada to prepare for the work of the Minister of Regional Economic Expansion, as that minister himself would be the first to agree. There is the question of the level of growth-related government services provided in those areas. There is the question of an adequate economic infrastructure.
Hon. gentlemen opposite may refer to the new program for Prince Edward Island and to the ARDA program adopted in New Brunswick. Mr. Speaker, my impression is that the New Brunswick program is more or less as flat as a pancake, and the P.E.I. program has not yet started and will take some time. In any event, much more is required if the growth concept advocated by the Minister of Regional Economic Expansion is to be implemented.
This sort of thing ought to have been planned in ways which would not add to inflationary pressures in Canada. There has been plenty of time for the planning. At the time of his budget last October the Minister of Finance knew what the effect of his fiscal measures must be in these areas. He must have known that the money supply had to be tightened up, that the Bank of Canada could not go on increasing the supply of money at the rate it had during the previous year, substantially to enable the Minister of Finance to sell his bonds. This simply could not continue.
[DOT] (3:50 p.m.)
There was plenty of time for planning. The most charitable thing to say is that the minister did not look very far ahead. But even so, are we to move through a whole fiscal year with these depressing effects on our wheat farmers, for example? Are we to go through a whole fiscal year with the economy, or a substantial part of it, being more and more depressed month after month? The Minister of Finance will say that he has inserted selective methods of controlling inflation such as his deferral of depreciation allowances on commercial buildings in certain centres. In all sincerity I wish to compliment the minister on a matter of principle for recognizing the desirability of the use of selective measures to control inflation and for recognizing, I think for the first time in any formal way, that inflationary pressures are not uniform throughout the country.
9944	COMMONS
The Budget-Mr. Stanfield
So far as the effectiveness, the appropriateness and workability of this proposal is concerned, that is another matter about which a number of members have had something to say. I wish to emphasize that I approve in principle what the minister has recognized. I want to emphasize also, however, that this measure, even if it does have the effect of slowing down commercial construction in these centres, will not do anything to encourage the development of the slow growth areas. It will not do anything to obviate the depressive effect of the general fiscal and monetary policies of the minister. I suggest that we need flexible fiscal and monetary approaches. I am not suggesting a different interest rate for the banking system in different parts of the country. But I believe we can achieve a flexible system of brakes to be applied to credit in different parts of the country. I have argued this for a dozen years. My point of view now seems to have some respectable support.
I understand the minister is to meet with the bank presidents later this month. I hope he will urge them to apply this policy in the Canadian banking system. I think this can be done without adding to the difficulties of the banks, because only a small demand out of their total credit arises in these regions of slow growth. I sincerely urge that the minister take a progressive step forward by encouraging the banks to take this step which would mitigate to some extent the other policies proposed by the minister. I can understand the minister's concern about protecting his surplus. He will be raided from all sides. But certainly the fight against regional disparity is supposed to be a top priority of this government. Certainly his policies in general are deepening regional disparity and deepening the difficulties the government will have in overcoming this disparity, as well as creating hardships for many thousands of Canadians.
I suggest there are also offsetting factors, particularly when one considers the multiplier effect of the appropriate expenditures in these areas such as those in connection with unemployment and welfare. They could increase the government's tax take in those areas. There would certainly by no means be a complete net loss to the treasury. I say in all sincerity that the present policies as proposed are callous and damaging to the national as well as regional interests.
There is another area, the cash position of the western wheat farmers, which I believe to be an emergency position. There are other

DEBATES	June 10, 1969
problems for the farmers of this country but I believe this represents a real emergency. Yet we see nothing but vacillation and obscurity on the part of the government when we ask whether anything is to be done. Is the government waiting until the recess? There have been a number of proposals made such as the two-price system, assistance through acreage payments and the payment of some of the charges for storage on the farm.
I realize there are some objections to some of these proposals. There can be objections to any proposal which might be put forward about anything. But the difficulty in which these people find themselves is beyond their control. Their difficulties are not the result of their own mistakes or judgment. These are not difficulties in which people have become involved because they are inefficient. I understand that many of the best farmers in western Canada are seriously short of cash. There is an emergency. I say to the government: "Do not let these people go down the drain. Stop fooling around.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I suppose the minister will talk about the advantage of his tariff cuts to the people in the west. I think the tariff cuts are fine to the extent that they increase competition and to the extent that they tend to inhibit price increases. Some say they will not have any effect in that direction. I am prepared to agree with the minister they probably will have some tendency to fight price increases and bring some prices down. Let us assume that.
In addition, the effect on Canadian industry is difficult to measure. I really seriously query whether the minister does know or took the trouble to find out what the effect on industry will be. Will it have the effect of bringing into immediate operation the reductions which have been announced to take effect a few years hence? I doubt that he knows how the effect will be distributed across the country. Master as the Minister of Finance is of non sequiturs, I never expected him to argue that industries would get in no difficulty as a result of this surprise announcement just because they were able to adjust in an orderly way to an open and disclosed reduction to take effect over a number of years. I suggest that this kind of sudden change in the rules without warning-I might as well be blunt about it since we are face to face-is stupid and unnecessary.
June 10, 1969	COMMONS
I do not claim that all Canadian manufacturing industry is efficient and I do not object at all to persistent and rational exposure of Canadian industry to pressure of competition with a view to increasing its efficiency and encouraging it where necessary as well as restructuring the industry. But this process in any event is difficult for industry. The adjustment is difficult. The process is painful and it involves risks because ordinarily it involves increased investment to achieve a result which cannot be certain. Above all, it requires confidence. A man who faces this kind of increased competition and who makes the necessary investments and adjustments must have confidence.
[DOT] (4:00 p.m.)
The sudden arbitrary action of the Minister of Finance in announcing this kind of change without notice can only be unsettling, destructive and have the effect of weakening the confidence which the Canadian businessman needs. I must say to the minister that Canadian business people cannot now count on what the government is likely to do. The government announced it would eliminate the 3 per cent surtax at the end of this year. It has abandoned that commitment. The government announced in the house that there would be an orderly reduction of tariffs under GATT over a number of years and then suddenly, without any notice, told us that as of tomorrow morning the rules would be changed. There is no need for this sort of thing. This sort of surprise and shock does not encourage a maximum restructuring of Canadian industry. It simply introduces a further element of irrationality into the process, namely, that possibly arbitrary decisions by this government will come at an increasing rate.
Furthermore, there is no compensating opening of trading areas to Canadian industry. Surely if this government knew what it was about, and if it was prepared to concede more than it did at the time of the GATT treaty, it would have been able to get more in return at that time. It would have been able to open doors. This is another example of these sudden switches in policy for short term effects, not really related in any rational way to long term planning. This is gimmickry, and that is all it is, of a very uncertain type.
There was very heavy emphasis put on the need for the restructuring of Canadian industry and increasing its efficiency. Those who talk about this process do not give adequate attention to access of Canadian industry 29180-629
DEBATES	9945
The Budget-Mr. Stanfield to markets on terms of reasonable competition with their competitors. I think it is a very questionable belief that Canada can restructure its industry and develop substantive industry in the technological era, with all the necessary economics of scale, by relying simply upon multilateral arrangements. Even if it could, this kind of arbitrary announcement by the minister is not a necessary part of that process.
It is fair to say that Sweden has been exposed to international competition for a long time and has developed highly specialized industries. Sweden is part of the Outer Seven and has tariff free access to a market of some $100 billion. Even though it has access to a free market of this size it is trying, like Britain, to get into the Common Market. Yet Canada is trying to develop this kind of sophisticated and modern industry with free access to a market of less than 25 million people.
How can we be expected to share the same kind of pressures that affect Sweden and Britain? Is Canada different or distinctive in this respect? Are we not going to be subject to the same pressures? Does this not involve the encouraging of the restructuring of Canadian industry by increasing competition through lowering tariffs? If we are going to compete successfully in this world we must have access to necessary markets on terms comparable with those of our competitors. A firm in the United States has tariff free access to a market of 200 million people. The same applies to an industry in the Common Market where there are no tariffs. Having regard to the exposure of Canadian industry to increased competition, this must of necessity be only a part of an adequate program to encourage the efficiency and development of Canadian industry.
Surely the Canadian concessions the minister announced could have been used to open some doors which in turn could be well used by the industry of Canada, thus allowing them a good chance to compete internationally. Surely at the very least these concessions could have been used to help Canadians involved in the oil industry, and other Canadians in marketing their fish or wheat. It is difficult to understand the arbitrary stand and processes of thought of the Minister of Finance. When he was giving something away he did not even take the trouble to get something in return.
In his budget address the Minister of Finance made reference to the very crucial
9946	COMMONS
The Budget-Mr. Stanfield question of federal-provincial fiscal relations. He stated that he was "encouraged by the evidence of closer consultation and co-ordination in fiscal policy".
He congratulated the provinces on their "most strenuous efforts... to improve or maintain budgetary balance." Most of the provinces do deserve hearty congratulations on their budgetary efforts and their willingness to accept a share of the responsibility for the double-barrelled battle against inflation and unemployment. This, in some cases at least, required extremely difficult political decisions under difficult circumstances.
What is cause for extreme concern on the part of all Canadians is the extent to which the provincial budgetary efforts have been made even more difficult by the irresponsible activity of the present federal government. A brief glance at some of the budget addresses made by provincial treasurers this spring is enough to convince anyone that the process of federal-provincial consultation and co-operation is not quite as harmonious as the smiling Minister of Finance would have us believe. At least he smiled at the time he said it, which was just as well, I think.
The federal government seems to consider itself exempt from such limitations. The most glaring example of the unwillingness of the federal government to abide by the spirit, if not by the letter, of the agreements and arrangements with the provinces was the implementation of the regressive social development tax, and doing it in such a way that it was not shared. This tax measure is regrettable not only because it is regressive but also because it callously excludes the hard-pressed provinces from their normal share of revenues derived from taxes on personal income.
This federal action was denounced in almost every provincial budget this spring, and justifiably so. While the denial of legitimate revenues to the provinces is a serious offence, the real danger is that such arbitrary federal actions will completely destroy the commonly accepted norms of fair play that are the real basis of the binding effect of agreements between governments which are all sovereign in their own spheres. That this is a danger was clearly hinted at by Finance Minister DesBrisay of New Brunswick when he referred to the social development tax in these words, which I am sure are well imprinted on the mind of the Minister of Finance:
Ottawa's response has been that each province must establish its own ... taxation policies within the existing federal-provincial arrangements.

DEBATES	June 10, 1969
I regret to say . . . that in our opinion the federal government by its own subsequent actions has made it exceedingly difficult for the provinces to follow that advice.
I should not have to paint a picture for hon. members of the results which would inevitably follow if federal actions made this type of feeling too widespread.
However, what is most worrisome for the future of federal-provincial relations is the fact that the social development tax is only the most visible example of a more general attitude on the part of this government. It appears that the minister's and the government's concept of consultation and co-operation is a one-way street involving provincial accommodation to federal decisions unilaterally taken. Such an attitude can only fan feelings of distrust in the provincial capitals of this country.
Anybody who reads the provincial budget speeches will see ample evidence of provincial disenchantment with the federal attitude. For instance, the uncertainties and disruptions generated by this kind of unilateral knife-wielding by the minister in Ottawa on important share-cost programs have been roundly denounced. In case anybody should think I am referring to people who might have a political bias, let me refer briefly to a statement by the provincial treasurer of Saskatchewan. Mr. Steuart observed, and this is a pretty serious assertion:
I am convinced our national unity demands a higher level of integrity than now exists in federal-provincial fiscal negotiations.
I would not like to have someone say that about me if I were the Minister of Finance, particularly someone I thought was a friend of mine. Mr. Steuart claimed that "at times Ottawa seems to be trying to hoodwink us."
* (4:10 p.m.)


An hon. Member:: Shame.
Another hon. Member: Shocking.


Robert Lorne Stanfield: 
Mr. R. L. Whiting (Halton):: Mr. Speaker, as I travel throughout my constituency of Halton I meet more and more people who are becoming increasingly concerned about the rising cost of living. They ask where all this is leading to because they realize that the answer, so far as they are concerned, is not to be found in an annual increase in the pay envelope so that they as individuals and as heads of families can meet these rising costs. Thinking people-and I include many people who are connected with the labour movement whom I have met-realize that somewhere there must be an end to this trend, and it may not be a happy one.
An increase in a person's wages or salary under present-day conditions can only be a temporary cure. The average man will be at the same place a year from now as he is today, without enough money to buy the things he needs or would like to buy because in the intervening time living costs have increased in too many cases to a greater degree than the increase in money he received. Therefore I would like to look at this question of inflation from the standpoint of both the individual and the government I would like to look at what inflation is doing to the individual and what it is doing to the country as a whole.
29180-629i
June 10, 1969

The Budget-Mr. Whiting
Of course we realize that wages and salaries are not in themselves a cause of inflation. In fact, increased wages and salaries need not contribute to inflation if they are related to productivity. In Canada, as in other countries, inflation is affected by world prices, government spending and monetary policies.
As I have said, many of my constituents have asked where this inflation is leading us. As a member of the Standing Committee on Regional Development I have focused my attention especially on the effects of inflation on the Canadian way of life and on what it is doing to the people who are not in a position to receive an annual increase in income. This takes in a very large group of people and exceeds in numbers those who have to live on fixed incomes such as the elderly and those living on pensions. There are also large numbers of people in many areas of Canada who have no way of increasing their incomes.
One of the reasons for this is found in the centralization of economic activity that is taking place today. People are being drawn to the larger urban centres. As these urban centres grow, so do the markets that surround them, thus creating an economic climate that lures an ever-increasing number of industries to establish within a radius of these areas. Business establishments located beyond the perimeters of such areas and markets find it difficult to compete unless they have some natural resource or an asset from which they can benefit.
Thus we find areas in Canada where the incomes of the people either remain stationary or decrease while the general cost of goods and services rises. Because of this present and growing disparity in activity, and what I have already seen as a member of the Regional Development Committee on our recent trip to certain areas of western Canada, I was most encouraged to see that the Minister of Finance is aware of the effect that inflation is having on these disadvantaged areas, and the government has made the program of the new Department of Regional Economic Expansion a major commitment.
[DOT] (4:20 p.m.)
The fight against inflation and programs for regional expansion must go hand in hand. Otherwise, inflation will be a constant drawback and restraint to the success of these programs no matter how well-intentioned and how well-conceived they may be.
Of course, all is not sweetness and light in those areas where Canada is enjoying its most

active economic expansion. Inflation has had its effect on housing and this is one of our great national problems. The net result is that many men who are able to find jobs are not able to find housing accommodation at a cost which will permit them to enjoy a standard of living which includes a good environment.
Although housing legislation was discussed in the house in the past week, I would like to make a few comments at this time on the subject. In spite of statistics which show that this year will likely be a record year in terms of housing starts, we will continue to have a very serious problem on our hands until such time as the people of this country feel that they have adequate housing. As long as people are unhappy with their present housing circumstances and are unable, for whatever reason, to move to something better, I believe we have an obligation to exert whatever effort and energies we can to improve housing conditions.
Many people, including builders, economists, scholars and home owners, have called the present situation a housing crisis, a money crisis, a land crisis, a mortgage crisis. Might I add, Mr. Speaker, there is also a people crisis involved in certain aspects of this problem. There is no doubt in my mind that if the right people co-operate at all three levels of government the present housing dilemma can and will be solved.
I am very pleased with the recent legislation introduced by the government which includes a move to allow N.H.A. mortgage rates to be reviewed every five years. This will do much to bring banks and trust companies into the mortgage market in a bigger way. Experience with conventional mortgage loans has proven five-year terms to be very appropriate. I think we are also wise to make more funds available for direct loans and generally to encourage more funds into Canadian mortgages. However, it is imperative we realize that providing mortgage money is not the only answer. We must look also to land costs, building codes, construction methods, new products and labour efficiency if we are to succeed.
We must, I think, be acutely aware of those who earn $5,000 to $6,000 or less per year. We must also think of the young married couples just starting out. Above all, it is our duty to see that the older generation who have already made their contribution to this country will, in their declining years, have peace of mind in the knowledge that adequate housing is available to them. We owe this to those
June 10, 1969	COMMONS
of our senior citizens who through the years have given service to this country.
It is, therefore, my contention that we must look at housing not only in the light of the inflation which has taken place within the industry itself, but also at the effect inflation is having on the entire economy of the country and the living standards of the Canadian people.
It has been pointed out that Canadian exports amount to $17 billion annually. This represents one-quarter of the gross national product. Obviously, exports are a cornerstone of the Canadian economic structure. A fluctuation of any proportion can affect the well-being of our citizens, as it affects government income and government programs. It is, therefore, essential that everything possible be done to protect and promote our exports. What is actually being done about this both privately and by government?
Let us look first at what the government is doing. I think Canadians should realize that some of the measures taken by this government reveal a considerable degree of political courage which is essential at this time. It is somewhat akin to going to the doctor and having him tell you, "This is going to hurt." You are not very happy with him at the time but you know the treatment is going to result to your benefit.
I	refer to the recent increase in postal rates imposed by the Minister of Communications (Mr. Kierans) and to the tax on airline tickets included in the budget. Both these measures indicate the desire of the government to place public services on a businesslike basis to ensure, where possible, that people are asked to pay for services rendered to them rather than making those services a burden on the public at large.
In his budget address the Minister of Finance (Mr. Benson) indicated the intention of the government to live within its income for the first time in 12 years. This is welcome news to me and to my constituents. I represent a constituency embracing a community which pays more per capita into the federal coffers than any other municipality in Canada. In fact it is my belief that this statement could apply to my whole riding. Naturally, my constituents are concerned with the manner in which government money is spent. In this respect I doubt that they differ from the constituents of any other hon. member. When, for example, the Auditor General's report was published, the press in Halton took a good hard look at it. In fact one newspaper
DEBATES	9949
The Budget-Mr. Whiting devoted a whole week to printing excerpts from this report and commenting on them. Some of these comments were not too complimentary, and justifiably so.
I think the time has come when we must stop thinking that laxity in the supervision of the spending of public funds can be regarded as an acceptable, government practice. Each and every member of this house who serves on various committees must take it upon himself to scrutinize the manner in which public moneys are spent. If he fails, then every Member of Parliament must be prepared to face an aroused public. I believe a start has been made in this direction, judging by the aggressive manner in which the Public Accounts Committee is looking into the way in which certain expenditures have been made in the past year. I would like to see the same efficiency and diligence as is displayed by the federal government in the collection of taxes-and I am happy to see the Minister of National Revenue (Mr. Cote) present in the house-applied to its spending of the Canadian taxpayers' money.
I should like to make one further reference to the fight against inflation which the Minister of Finance called the No. 1 priority in economic policy in the course of his budget statement. A few minutes ago I pointed out that exports are the cornerstone of our economy and that we must do everything in our power to see they are not jeopardized. It has been said on many occasions that if the price spiral continues it is within the realm of possibility that we shall price ourselves out of the export market altogether in many areas. This would immediately lead to mass unemployment for many Canadians and a serious decline in economic activity. I stated at the beginning of my remarks that many people have asked: where is this inflationary spiral leading? I think that is the answer if we are not capable of stopping it.
[DOT] (4:30 p.m.)
It is essential that we reverse the cost spiral. A good start has been made in the budget by the immediate implementation of the Kennedy Round of tariff reductions. The next step is action on the part of Canadian manufacturers. Many manufacturing companies have public relations departments or public relations advisers, and all are concerned with their public image. May I suggest to them that they focus public attention on their ability to improve efficiency and productivity in order to lower consumer prices. By doing so with honesty and sincerity of intention, the
June 10, 1969

The Budget-Mrs. Maclnnis constant and ever-recurring demand for increased salaries and wages would lose much of its validity. The point to bear in mind is that it is not just the dollar in one's pocket but how much that dollar can buy. If we in Canada can keep our prices competitive, we can enjoy the greatest prosperity, industrial peace and the highest standard of living in the world.


Winona Grace MacInnis: Mr. Speaker, there are some good features in this budget and these have been detailed for us by government members. However, I feel that the budget cannot be judged simply by its good features. We have all heard of the curate's egg, which was good in spots. But the effect of the curate's egg was not good, even though it may have had some good spots. This budget must be judged according to its total effect.
I am not going to deal with the good spots today but with the effect of the budget, as I see it, on the majority of the Canadian people. Undoubtedly some people must have faith and confidence in this budget; otherwise it would not have been framed as it is. But a good many people I meet do not have faith and confidence in the budget, and I might point out that I do meet a good many people. The people I meet are becoming worried, and badly worried.
These people see a government with a big over-all majority. Remember, we were told that we had to have a government with a big over-all majority in order to get things done. These people see a government with wide legislative jurisdiction able to pass the legislation it desires to pass. They see a government with taxing powers apparently unrestrained and unlimited. They are assured that the government has access to the brightest minds in the country, in the civil service and among economists.
This government has repeatedly told the voters since the last election that it has been gearing up to get its machinery going so as to bring about a just society in this country. Since the budget has been brought down and all of this machinery has been set in motion, these people who have waited expectantly for results are seeing a government that apparently is completely unable to curb the steady rise in the cost of living, a government, indeed, that says that inflation is inevitable and will continue, a government which, so far from being able to do away with and prevent pockets of poverty, is apparently unable to


prevent these pockets of poverty from growing into regions of ruin.
These people see a government that is unable to prevent the erosion of our economy by unemployment and replace unemployment by the steady growth of productive industries and services in this country. They see a government that is unable to supply hope for people old and young across the land. Worst of all, they see in this budget a government that is repeating the same techniques that led to our present miseries, making the same mistakes over and over again in every field I could mention.
I believe that the people are not only concerned but very seriously worried. Increasing numbers of people have told me during the last while that they are beginning to be worried that the economy of this country is rapidly getting out of control, that we have a government that is quite unable to handle the situation, a government that is allowing things to drift and which cannot do anything about it.
Since I come from the province of British Columbia I would compare this situation to a forest fire that is raging across the country, the forest fire of inflation that means a higher cost of living and lower income. The government is dousing this forest fire with gasoline while at the same time telling the people that it has the very latest in water bombers, that it has a wonderful crew of economists and civil servants, that it has the last word in techniques, such as white papers, boards, commissions, task forces and all the rest. It also has the best gasoline to be had in the whole market. These are the suspicions that people are beginning to have. They are content to give the government an "e" for effort, but the consequences for the Canadian people are terrible and are becoming worse.
Let me detail very briefly the kind of people who are being menaced by this budget, those for whom this budget is a bitter disappointment, not only a bitter disappointment on paper but a budget that hurts them in reality.
First of all, I would mention our old age pensioners and other people who have retired such as superannuated public servants, as well as people living on small fixed incomes which were determined before the cost of living rose to the level it is today. Typical of these people is the old age pensioner group. The cost of living rose 4 per cent last year while their pensions went up 2 per cent. The gap will be even wider this year since the
June 10, 1969	COMMONS
latest available index of the cost of living shows a rise of 4.7 per cent while pensions are tied to a statutory 2 per cent increase. We are told that the forecast is that the cost of living may drop in the immediate future, but the record so far gives no hope for that. Even the government does not claim there will be anything but an increase in the cost of living as we go along into the future.
My colleague, the hon. member for Winnipeg North Centre (Mr. Knowles) outlined the other day what has happened to old age pensioners since the government gave them the guaranteed income supplement. A great many of the elderly recipients of old age security who also get the supplement, which means that they cannot get less than $105 a month, plus cost of living increases, are now placed in the position where they are taxable because of the supplement. So in actual fact they are worse off as a result of receiving the supplement than they were before.
This is why people are so alarmed at this government's incompetence, if I can use a kind word, though I could use words much less kind. The government is giving something with one hand and taking it away with the other. It is not that its right hand does not know what its left hand is doing but that the government hopes that the person who receives a few cents in one pocket does not feel a few more cents very skilfully being taken out of his other pocket at the same time. That is the first group I wanted to mention which is actually being menaced by this government as a result of the spread getting wider between what they have to live on and what they have to pay out.
[DOT] (4:40 p.m.)
The second group I want to mention is the young people of this country. The minister may tell us that young students can obtain student loans. I will not enter into an argument on this point. Often such loans become mortgages on our young people's futures. Many young people are unwilling to assume obligations they cannot pay off. Consequently they are reluctant to borrow money for their higher education. Also, notwithstanding the pious statements coming from the government front benches, students across Canada are finding it extremely difficult to obtain jobs this summer. In the Vancouver area last year half the young people looking for summer jobs did not find any. Undoubtedly the student unemployment situation in Vancouver will become worse this year, and what is true of Vancouver is true of other centres
DEBATES	9951
The Budget-Mrs. Maclnnis across Canada. So what is the sense in the minister saying to our young people, "Take out a loan and mortgage your futures in the name of higher education even though you will not be able to find a job and thus liquidate your debt." This reminds me of robbing Peter to pay Paul. You are putting something into one pocket and taking it from the other.
Our veterans are the third group of persons I wish to talk about. They have inadequate allowances. For months and months they have been led to believe that veterans allowances are to be increased. The government told them that as soon as the Woods report was handed down veterans living allowances would be increased. Well, that has not happened. No doubt many hon. members have received letters from veterans on this subject.
I know that veterans and their families are suffering. Now the government tells us that veterans allowances will not be increased during the present session. Apparently the government wishes to present us with a fait accompli by having a white paper ready when the Woods report has been studied. The government wishes to prepare its legislation and does not wish veterans to know the contents of that legislation ahead of time. If we had participatory democracy in the true sense the government would have asked veterans and their organizations to appear this session before the Standing Committee on Veterans Affairs and make representations. The government could then act on those representations. That has not happened.
Clearly, the government still believes that it must act as the great white father not only to our Indians but also to groups like our veterans. The government says, "We know what is best for you; we have studied the question. We sit here in Ottawa and we know what is good for the people of this country." Our veterans are hard done by. Rising living costs make it hard for them to make ends meet, and so far there is no sign that veterans incomes are to be brought into line with living costs.
The fourth group I wish to speak about is made up of our Indian people. In this country we have not begun to help our Indians and Metis in an adequate way. The other day I was pleased to see on my desk a communication from the Metis of Alberta. I have not yet studied the justice of their position but I like the tone of their demands. These people are now saying, "We have listened long enough; now we want straight answers to straight questions." This session is drawing to an end and our Indians have not been dealt with
9952	COMMONS
The Budget-Mrs. Maclnnis justly. Many of them have incomes well below the poverty level.
The fifth group I shall speak of consists of immigrants. They come to this country and have many difficulties to face. Although many centres across Canada try to help our immigrants, they still need help. The Vancouver authorities try to help immigrants. The Vancouver School Board has been bombarding the government with requests for assistance with language training. The board wants the Department of Manpower and Immigration to help pay for English courses so that immigrants may be taught English and obtain jobs. English is not being taught, properly and adequately, to immigrants in Vancouver, the reason being that the Department of Manpower does not think it is under any obligation to provide English courses. I point out that unless immigrants have a knowledge of English, they will find it very difficult to obtain jobs in British Columbia.
The Leader of the Opposition (Mr. Stanfield) talked about the farmers, and I, too, wish to talk about the farmers. Many of our farmers face hard times, and this budget does not help them. My colleague the hon. member for Moose Jaw (Mr. Skoberg) is reported in a press article to have said yesterday that farmers without cash ought to be allowed to pay their income tax by dumping sacks of wheat, damp or dry, on Parliament hill. That would be payment in kind. The minister may think it inconvenient to be paid with grain but, as my colleague from Moose Jaw said, "There's just no bloody cash,... period." The government has done very little for our farmers.
Next I wish to talk about women. I have received a letter saying that 76 single working mothers in Toronto would like the government to allow them deductions for babysitting expenses. Without babysitters they cannot go out to work and support their families and they need deductions if they are to afford babysitters. I have been talking about this matter ever since I came here. If all the words of consideration the minister has uttered on this question were to be strung together they would stretch from Victoria, British Columbia, to St. John's, Newfoundland. So far, however, babysitting expenses are not deductible. This is another matter on which the minister ought to take action.
Next I shall talk about the poor and the poverty stricken people across this country. If we we are to believe the Economic Council, there are millions of poor in Canada. I was

DEBATES	June 10. 1969
much interested in the report of the Canadian Council of Churches and the Canadian Catholic Conference which studied the question of the Christian conscience and poverty. This Church group said in its report following the May, 1968, meeting in Montreal that the poor are no longer willing to accept the old attitudes. According to the report of the church group the deprived now say to the privileged, "Damn your charity; give us justice." This budget does not give our poor people justice.
I could go on talking about old age pensioners, the retired, our young people, veterans, Indians, immigrants, farmers, single mothers supporting families, the poor. The reaction of these people to this budget is one long, collective groan. They are groaning because their faith in this government has collapsed. Abraham Lincoln once said that the legitimate object of government is to do for a community of people what they need to have done but cannot do for themselves. Our government subscribes to this creed in wartime but not in peacetime. We must convince this government to subscribe to this creed in peacetime and to do for our people in peacetime what it has only done for them so far in wartime.
Members of my party have outlined what measures the government ought to enact. The Carter report ought to be implemented. After all, the taxpayers paid good money for that report which says that people should be taxed according to their ability to pay. We have told the government that it must protect Canadian industries from the encroachments of foreign corporations, no matter whether they hail from the United States, South Africa or elsewhere. We have said revenue must be used to assist the public sector. Money must be used for hospitals, housing, education, pensions and pollution and not to meet the debts of private companies which pile up a debt of $80 million that is promptly forgiven by the government on the ground that it is a technicality. We have said that the talk of a guaranteed income has to be made a reality. This patchwork of handouts and support involving various kinds of welfare must be supplanted by a good guaranteed income scheme which will protect people.
[DOT] (4:50 p.m.)
These are the needs the federal government should be looking after in 1969. These and the all-important need of getting genuine co-operation from people through local organizations are what are required. They are something
June 10, 1989	COMMONS
this government knows nothing about and could not care less about. Until the government reckons with societies of people in housing developments, with co-operative groups of people in the field of merchandising, with people who want to work together to build their own health clinics and who would be willing to support these co-operative local groups, any talk of participatory democracy is just so much wind.
These are the things the government should be doing instead of sitting here in Ottawa, backed up by the civil service and the economists, telling all the people that belt-tightening is good for the figure and it will not hurt very much if you think it won't. It is the belts of the people here in Ottawa that are not being tightened. We must have investment to care for the needs of people. That is the only way we are going to be able to build democracy as defined by the words of Abraham Lincoln, that is, government of the people, by the people and for the people.
We shall support the amendment of the official opposition and the amendment of the New Democratic party. We shall vote against this budget which falls short of meeting the important needs of the majority of the Canadian people.


Mr.   Fernand-E. Leblanc@Laurier: Mr. Speaker, in view of the continued inflationist pressures in this country, it has become necessary for the Canadian government to introduce a semi-annual budget instead of an annual budget and this principle is approved by economists, businessmen and financiers in Canada, because they find it necessary and timely to review the economic evolution of Canada more rapidly or quickly than before and to make, as needs are felt, adequate improvements.
It goes without saying that the announcement of a budget always brings about turmoil among people who are anxious to know the measures that the government intends to take and the exact economic situation as well.
Then there is a suspense which, of course, comes to an end on the evening of the budget speech and from that moment on, everyone makes his comments on the positions announced by the Minister of Finance (Mr. Benson). Financial critics from the opposition parties, economists, businessmen, financiers and all the taxpayers give their views.
The budget brought down on June 3 is a practical and a favourable one, since it does 29180-630
DEBATES	9953
The Budget-Mr. F. Leblanc not announce any tax increases and, moreover, is a balanced budget. Although some people might contemplate and, in fact, advocate other solutions, I can hardly disapprove the Minister of Finance. I wish to congratulate him for the magnificent job he has done since he is responsible for the finances of the country.
The plague of inflation is not peculiar to our country, since this phenomenon exists in every country of the world that enjoys intensive economic progress.
Inflation is a major problem that must be attacked directly to control it. Recently, I had the honour, with several hon. members, to participate in the 12th meeting of the Canada-U.S. Interparliamentary Association and this problem was discussed during the meetings of the trade and finance committee.
I found that the United States also use now conventional methods to control this problem, that is through fiscal and monetary measures necessary under the circumstances, and they have not yet succeeded in finding miraculous solutions. As in our case, they are reluctant to take the coercive measures advocated by several people. In this connection, I read recently, in the Hamilton Spectator, laudatory comments about the federal government, with regard to its anti-inflationary policy, and I quote:
Inflation is more than a simple problem. It is a continuous and destructive anxiety that weakens the purchasing power of the dollar, affects the prices of Canadian exports, creates with a new army of shame-faced poors among those who have only a fixed income, social clashes of all kinds.
According to many, such ill-effects caused by inflation are quite enough to justify drastic measures on the part of the government. More stringent measures may be considered in the future, when attempts to educate the public and promote voluntary restrictions have failed. But, at the present stage of Canadian economic development, the government shows wisdom in choosing, instead of a rigid system of wage and price control, a solution implying research and education. The government and its advisers still have a lot to learn about the complex economic forces that create inflation. And this applies equally to the world of business and to labour. Investigations of individual cases should give us a wealth of new knowledge.
Furthermore, it is in this spirit that the Minister of Consumer and Corporate Affairs (Mr. Basford) has established the Prices and Incomes Commission. Our American colleagues were surprised to learn of the existence of such a Comission in our country, as they have not themselves gone as far as that in their efforts to control inflation. Obviously, insufficient control in the United States may greatly affect our country's position, because
9954	COMMONS
The Budget-Mr. F. Leblanc of the important economic relations between the two countries at the present time.
[DOT] (5:00 p.m.)
The inflationary spiral being stronger in the United States than in Canada, it is only normal that we should feel its effects constantly.
Our country cannot control inflation if our suppliers all over the world do not take really effective and appropriate measures. However, it is comforting to see our government performing some quite remarkable feats, such as a balanced budget in our present circumstances without increasing taxes in any way. In fact, we can say that taxation has reached the saturation point in our country, consider -
DEBATES	June 10, 1969
ing all the taxes raised by all governments, provincial, municipal and federal.
Mr. Speaker, it is strange to see that the taxpayers in the province of Quebec have experienced since 1960 an increase in their provincial taxes and a decrease in their federal taxes. Not long ago, Mr. Jean-Pierre Bonhomme, of the newspaper La Presse, published an article supplying comparative figures for 1960 and 1968, that was entitled Taxes payable by an individual residing in the province of Quebec in I960 and in 1968 and I quote:
Taxes payable by an individual residing in the province of Quebec in 1960 and in 1968 whose only source of income was a salary of $6,000
REMARKS: (1) The taxpayer's children are supposed to be eligible for family allowances-(2) The taxpayer claims the general deduction of $100.00.
1st case Single
1960	1968



FEDERAL TAX

[Stage Direction]
$792.96	$585.56
PROVINCIAL TAX 132.15	418.32
2nd case	3rd case	4th case
Married without children Married with 1 child Married with 2 children
1960	1968	1960	1968	I960	1968$604.17	$431.84	$562.85	$389.63	$521.52	$347.4283.81	304.70	75.85	304.70	67.69	304.70
The Minister of Finance has stated that there is another way to bring into play supply and demand to control inflation. It is to defer amortization or depreciation on commercial buildings erected from now on until the end of 1970. Such a plan was used 10 or 15 years ago and proved successful. All capital expenditures were then submitted to such a restriction which was later lifted after having achieved its aim. It is good to note that the present measure does not go as far as that since it does not apply to houses, industrial buildings, public services, public establishments, underpriviledged areas which are in fact protected by it since even if they do not represent inflationary factors they are subjected to it.
The Minister of Regional Economic Expansion (Mr. Marchand) stated on May 26, 1969 that the bill on grants to regional development would make it possible to provide some very strong incentives to industry, in order to increase employment in areas where it is low. Unemployment in certain areas is also an evil which must be eradicated as soon as possible, in order that Canadians throughout the country may satisfy their essential needs and fully identify themselves with Canadian life.
However, the incentives announced only apply to depressed areas and if we want to

increase investments in all areas of Canada, in order to meet an ever increasing demand by raising productivity, I will take the liberty of making a few suggestions to the Minister of Finances, since he intends to undertake a complete review of the Income Tax Act.
Among the necessary incentives to attract risk capital in operations which are vital to our economic development, I suggest in the first place that the 20 per cent exemption paid by Canadian companies be raised to 50 per cent. I also suggest to the province of Quebec to do likewise. This government could also increase tax exemptions for research costs. It could increase tax deductions to companies developing our natural resources, especially in the case of Canadian companies. In addition to subsidizing jobs in underdeveloped areas, the government could allow companies to deduct from their taxable income double the expenses incurred for the retraining and education of their employees. No doubt those measures could be intensified, and I trust the Minister of Finance is competent enough to examine the possibility of implementing those suggestions and many others, of which he surely thought with his imagination and creative mind. With the help of his department's technicians and experts he will certainly find the most adequate solutions for the economy of the whole country.
June 10, 1969
[Stage Direction]
To relieve the father whose revenue is less than $5,000 a year, the minister could study for the future the possibility of lowering taxes but without putting the entire burden on the wage-earner who gets between $5,000 and $10,000. The father should get the exemption for education fees when a student is not earning money and cannot And a summer job.
The minister could also raise the statutory exemption with regard to charitable donations and medical expenses, from $100 to $200.
Mr. Speaker, it would be easy of course to stretch the list of suggestions. However, to give a chance to all those who wish to express their views, since the debate is limited to four days, I conclude by saying that I am proud to be a Canadian, to live in a country with such extraordinary resources and wealth, of unparalleled beauty and magnificence. I am happy to be a member of a government that can take its responsibilities and does all it can to create a just and prosperous society in Canada, based upon the private enterprise system, which is the source of the highest standards of living in the whole world.
The Acting Speaker (Mr. Bechard):: Order, please. I understand that the hon. member for St. Paul's wishes to say something.



ROUTINE PROCEEDINGS


Mr. Ian Wahn (St. Paul's):: Mr. Speaker, with unanimous consent I would ask leave of the house to revert to motions for the purpose of moving concurrence in the eighth report of the Standing Committee on External Affairs and National Defence.


The Acting Speaker (Mr. Bechard):: Has the
hon. member unanimous consent to revert to motions?


Some hon. Members:: Agreed.


Ian Grant Wahn: that the eighth report of the Standing Committee on External Affairs and National Defence, presented to the house on Thursday, June 5, 1969, be concurred in.
The Budget-Mr. W. Knowles


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the hon. member why this is being dealt with now rather than at the regular time?


Ian Grant Wahn: It is purely a matter of convenience, Mr. Speaker. This report merely gives the committee leave to travel for the purpose of making a trip to North Bay on Thursday. Because of the shortness of time I felt it would be convenient to move concurrence at this time.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed consideration of the motion of Hon. E. J. Benson (Minister of Finance) that this house approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West) (p. 9880), and the amendment to the amendment of Mr. Saltsman (p. 9883).
Mr. William Knowles (Norfolk-Haldimand):: Mr. Speaker, I rise to take part in this debate for two reasons, first to make some general comments with respect to the budget introduced by the Minister of Finance (Mr. Benson) and, second, to say something about the effect of government action on the Canadian tobacco industry, particularly as it relates to the farmers, the people who grow and produce the tobacco.
[DOT] (5:10 p.m.)
In all sincerity I would like to commend the Minister of Finance, as many hon. members have already done, for producing a balanced budget. When deficits have occurred in public spending over a number of years it is always refreshing to find that at long last we are able to balance the budget. I suppose it is elementary to say that there are two ways in which this can be done. The first is by cutting down government expenditures to a level that makes the government live within its income, and the other way is to raise taxes to finance the expenditures already undertaken. Canadians across our land have been deeply disturbed that the government has been unable to regulate the problem and has been unable to set up guidelines for individuals for municipal governments in the various
June 10, 1969

The Budget-Mr. W. Knowles municipalities of Canada and for the provincial governments, guidelines which if properly laid down and observed by the senior government would be the most effective way, I think, in which to apply the brakes to runaway inflation.
Previous speakers in this debate have cited some glaring examples of wasteful spending by various departments of the government. Three examples come to mind which have been mentioned before. One of the most glaring is the runaway cost of the arts centre which skyrocketed from approximately $8 million to $46 million. Then there was the cost involved in refitting the Bonaventure. So vast a sum of money was poured into that ship that now she is known as the Waldorf of the waves. Surely she must be goldplated.
Another large expenditure which is of concern to a great many people is related to the increase in the Prime Minister's staff, the greatest increase in the history of our country. A parliamentary return of last December indicated that as of November 1, 1968, the Prime Minister' office alone had hired 34 people at a total salary of $406,085. As of November 1, 1965, the office was able to get along with only 21 people at a total salary of $197,492. That means that in three years the staff increased by at least two-thirds and the salary total doubled. This is only part of the picture. The Prime Minister has also been building up the office of the Privy Council. According to the estimates for the 1969-70 fiscal year it will jump from 209 people a year ago to 287 people for 1969-70. The salaries and wages of manpower in the Privy Council are estimated for 1969-70 at $2,599,000, up from $1,842,500 in the current fiscal year. At this rapid rate of growth it will not be long before there are more people working in the Prime Minister's office than in the whole city hall in Toronto. Already the salaries paid the 34 people working for the Prime Minister are more than double the salaries paid the 34 people sitting in the legislature and cabinet of the province of Prince Edward Island. If this trend continues the Prime Minister will soon have hired more people than he has kissed.
I believe the government should have greater concern-and this is a concern of all people-about the burgeoning bureaucracy and the failure of government departments to abide by some of the recommendations made by the Auditor General year after year and about which year after year nothing is done.
The second way budgets are balanced is by increasing taxes. This is something to which

we object. It is certainly the least palatable method. The minister has been able to forecast a considerable surplus to be juggled with, shall I say, in another year.
Perhaps I might be so bold as to make some suggestions concerning how he might use the surplus he has forecast in a manner that would bring relief to the Canadian people. First of all, it would seem to me that the basic exemption of $1,000 for individuals in respect of income tax should certainly be increased. It has remained at that figure since it was first instituted years ago. If at that time it represented living costs, surely now it should be increased two or three times. I believe that if this were done it might answer the complaint of the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) in respect of people receiving the old age security pension being taxed on any amount over a $105 monthly payment. This could easily be remedied by increasing the basic exemption for income tax purposes to $2,000 or $3,000.
Surely the Minister of Finance could talk to the Minister of National Revenue (Mr. Cote) and show him that it is most unfair that taxpayers who have children attending university should be allowed an exemption of only $500 each. This is insignificant; it is a pittance. It simply does not begin to represent the cost of sending a student to university. In the same regard I might mention the government's treatment of university students who try to earn income in the summer in order to provide for their education. They are forced to pay income tax. They are also forced to pay into the Canada Pension Plan. Why should they not be able to wait until they have completed their education and joined the working force before they have to make these payments? It seems rather strange that on the one hand the government takes this money away from them in the form of taxes and payments into the Canada Pension Plan and on the other hand offers them loans to finance their education.
I wish now to become more specific and draw to the attention of the Minister of Finance and all hon. members the economic importance to Canada of a particular industry, the tobacco industry especially as it involves the farmer producers of leaf tobacco. Tobacco growing is the one bright spot in the agricultural economy today. As has been mentioned by many hon. members, there is a problem in western Canada because the wheat producers simply do not have sufficient cash income with which to operate. The
June 10, 1969

agricultural economy is in difficulty but tobacco production is the one bright spot in the whole sad picture. However, if present attitudes and practices of the government are continued these producers will be faced with the same difficulty.
I believe it should be said that the tobacco crop is being grown on the light blow sand of southwestern Ontario which was formerly waste and drifting soil. Now it is the highest priced agricultural land in the country. The marriage of the flue-cured tobacco plant to the sandy soils of southwestern Ontario has had a salutary effect. Flue-cured tobacco for cigarettes was introduced in Canada about 1913 in Essex County in Ontario and by the mid-1930's had spread to 12 other counties. Today Canadian flue-cured tobacco is produced in wide areas of Ontario, Quebec and the maritime provinces of Nova Scotia, New Brunswick and Prince Edward Island. In 1967, Canada's second largest crop year, farmers produced over 214,702,000 pounds of flue-cured cigarette tobacco with a total value of $141,112,000 to farmers. Today 99 per cent of all tobacco used in Canada is grown in Canada by Canadian farmers. This is something we should not lose sight of. If today tobacco production were banned in Canada and all farmers stopped growing tobacco, tobacco simply would be imported from abroad and the manufacture and smoking of cigarettes would continue.
I think the agricultural segment of our society which produces tobacco should be recognized for its ability, investment, hard work and willingness to take a risk against the hazards of weather and so on to produce in Canada a product which we use in Canada. Over 51 million pounds of tobacco was exported in 1967 for a dollar return of $57 million. More will be said about this later.
The growers and producers of tobacco are regulated by the Ontario Flue-Cured Tobacco Growers Marketing Board Association which is organized under the Ontario Farm Products Marketing Act. There are 3,774 farmer members operating 4,262 farms for which there is allotted a basic quota of 152,416 acres. Besides these owner-growers in Ontario there are about 1,163 sharegrowers registered with the Tobacco Board. While Ontario growers produce about 95 per cent of Canada's flue crop, Quebec and the maritime provinces add about another 200 growers and some 7,000 acres of flue-cured tobacco to the Canadian industry.

The Budget-Mr. W. Knowles [DOT] (5:20 p.m.)
The latest reliable figures on capital investment on these farms, and I want hon. members to note that the survey was made in 1963 but subsequently updated, show that today there is a grand total of capital investment in Canada on tobacco farms of $435,696,000. That is a considerable amount of money invested in an industry in our country which is serving well the farming community. The assessment on tobacco farms ranges from two to three times greater than that on general farms with the same growth and same building conditions.
The sale of flue-cured tobacco in Canada amounts ordinarily to over $155 million per year. The return in 1968 was $152 million, down slightly, and in 1967 the figure was $135 million. During the 11-year period of auction sales through our exchanges, that is, from 1957 to 1967, tobacco sales totalled over $1 billion from Ontario, Quebec and the mari-times. This was money in the pockets of the farmers of this country. The largest share of these dollars found its way through production costs into the business life of the community, perhaps as much as 50 per cent in wages alone. Most of the balance, other than taxes, was funnelled into the local economy in the form of food, fuel, clothing, machinery and so on.
Let us consider the direct contribution this industry makes to the coffers of the federal government. I am sure the minister is very well aware of this, but I wish to state this for the benefit of hon. members who may not appreciate the importance of this industry to the economy of t'he country so far as excise tax and exports are concerned.
First of all, tobacco is one of Canada's top export commodities. In 1968 Canadian flue-cured tobacco exports to all countries amounted to about 55 million pounds, the largest share going to the United Kingdom, our second largest trading partner next to the United States. More than $51 million worth went to the United Kingdom. Tobacco is second only to wheat in the value of agricultural exports and brought, as I said, $57 million in earning export trade. This helped our trade balance. As already referred to twice by the hon. member for Halton (Mr. Whiting), one of the greatest needs in our economies is that we keep up our export trade and maintain a favourable trade balance.
Mr. Keith of Imperial Tobacco said in his report that the federal government received
9958	COMMONS
The Budget-Mr. W. Knowles over $555 million in excise taxes on tobacco. This is the easiest and most economic tax to collect. It was the fourth largest revenue earner for the federal government. More than $8 of every $100 spent by the federal government comes from the excise tax on tobacco. It is exceeded only by income tax, general sales tax and import duties. When we consider the taxes also levied by provincial governments in respect of tobacco, which total led some $85 million in 1967, this makes a grand total to federal and provincial governments of $723 million in tax revenue.
If this is important to our economy we should be taking some note of what another department of the government is endeavouring to do for tobacco growers. Having demonstrated this economic impact on the part of the tobacco growers, I think it is time the Minister of Finance took aside his colleague, the Minister of National Health and Welfare (Mr. Munro), and explained the economic facts of government.
We who grow tobacco crops feel that an overzealous and poorly documented attack has been made on the tobacco industry. The farmers who produce this crop feel they have been stigmatized by this unwarranted attack. We deny vigorously and forcefully that there has been any case made to so stigmatize the product we produce. By the very evangelical zeal and diversity of this attack on the industry it appears that the Department of National Health and Welfare hopes to compensate for the weakness of the attack it has carried forward.
We learned in the Standing Committee on Health, Welfare and Social Services that this case is based almost entirely on statistical evidence mainly gathered from the United States' Surgeon-General's report. Statistics only indicate trends or associations; they do not constitute proof. One should examine this statistical evidence and decide how it is gathered and how these statistics are interpreted.
We learned from a statistical expert how the Surgeon-General of the United States gathered these statistics which form the basis of this attack on our industry. This material was gathered by house to house canvassing. If the head of a household was not present a junior member of the family would supply the information. How in the world would he know what his grandfather died of or how many packs of cigarettes his father smoked? These are things that cast doubt on this zealous and unwarranted attack on our industry.

DEBATES	June 10, 1969
No experimental evidence has been introduced to show that there is a causal relationship between the smoking of cigarette tobacco and lung cancer or other respiratory diseases. Many experts testified before the committee, individual leaders in their fields. I could read from several of their statements but I will content myself by referring to what only two had to say.
Let me read from the statement presented by William B. Ober, a physician in New York city. He is a professor of pathology at the New York medical college and a director of laboratories at Knickerbocker Hospital. He had this to say:
I believe that the proposed legislation which this committee is considering had its formal inception in a speech given by the Hon. John Munro, your minister of health, given on December 19, 1968. I have read that speech, and it is a credit to Mr. Munro's desire to protect the health of his fellow Canadians.
Perhaps I might interject here. Those of us who are closely associated with the tobacco industry are just as concerned, but we do want to be shown. Dr. Ober continued:
Unfortunately some of his analogies are poorly chosen and I do think his aides have furnished him with data which fails to support his point of view.
Dr. Ober then gives an example of this type of information. He quotes the minister as follows:
I could ask every heavy smoker to try a 200 yard sprint at top speed, or a one mile run. Let them then come back, gasping and perhaps wheezing extensively, and tell me that their respiratory system has not been affected.
The statement of Dr. Ober then continues:
I submit that anyone who runs 200 yards at top speed, smoker or non-smoker, anyone who goes out for the mile run, smoker or non-smoker, will wind up at the finish line gasping for air. We have all seen photographs of non-smoking athletes in the pink of condition, taken as they breast the tape, and they all show faces contorted with air hunger. No. the reason runners gasp for air is not because they smoke. Bather it is because they are using up more oxygen than the normal gas exchange in the lungs can supply. In the physiology laboratory this is called oxygen debt. The Minister of Finance might apply the analogy to problems of currency flow and the question of international exchange-
[DOT] (5:30 p.m.)
We have other experts in other fields who cast very grave doubts on this unwarranted attack to which I have taken exception. John P. Wyatt, who is professor and chairman of the department of pathology at the University of Manitoba had this to say, and I will just
June 10, 1969

quote one sentence from his lengthy testimony:
In my opinion, there is insufficient evidence for attributing an established causal role in these conditions to cigarette smoking.
He is referring to the diseases of the respiratory tract.


The Acting Speaker (Mr. Bechard):: Order, please. I regret to interrupt the hon. member but the time allotted to him has expired.


William David Knowles: May I
have two more minutes in which I will attempt to summarize the rest of my comments?


The Acting Speaker (Mr. Bechard):: Is there unanimous consent to allowing the hon. Member to continue?


Some hon. Members:: Agreed.


William David Knowles: I should like to draw the following story from the classics as it seems to illustrate the attitude of the officials of the Department of National Health and Welfare. We all know the story of Don Quixote who was forever tilting at windmills on the plains, thinking they were giants who were about to do him in. It seems to me that the officials of our Department of National Health and Welfare are rather like white knights mounted on chargers tilting at windmills, and the only windmills they see are cigarettes which, according to them, are the demons. Surely the task of the federal government and of the department ends when they have pointed out to all the Canadian people that there may be hazards in the smoking of cigarettes and tobacco. They have done this most amply. We feel that it is unnecessary for them to pursue with such evangelical fervour this vicious attack against our tobacco industry.
May I say in conclusion that tobacco growers are pleased to note that the Minister of Finance (Mr. Benson) did not levy additional taxes on the tobacco industry. We who grow the tobacco and who are involved in this industry, feel that the point has been reached at which the law of diminishing returns begins to act. The minister cannot tax further without decreasing the use of the product and the net national returns to the government. In view of the weaknesses of the case of the Minister of National Health and Welfare (Mr. Munro) we ask him to get off the backs of the tobacco growers, the farmers who produce in this country, and to concentrate on the more
The Budget-Mr. Beaudoin obvious health hazards which affect the people of our country.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I feel most happy to have the opportunity to comment the speech delivered by the Minister of Finance (Mr. Benson), and before getting to the heart of the matter, I would hate not to commend my leader for his speech of yesterday.
I think that he dealt with all the important points of the budget or the mini-budget presented to us. While I support my leader, I would like nevertheless to point out a few predominant facts of the budget speech made by the Minister of Finance, of which many are unacceptable to me.
I fully agree that we must fight inflation, but I reject the means put forward to that end by the government. In my opinion, those changes are again made at the expense of the poor, particularly those who can hardly earn their living in Canada. For some time now we have been receiving requests from farmers who are complaining about lower government subsidies for their dairy products.
Is it that the Minister of Finance had already given his orders before bringing down his budget?
I was told that this was due to the new dairy policy which is aimed at encouraging dairy exports especially of manufactured products.
It is obvious that the present Liberal government has failed in this field, as it did in respect of wheat.
I see that the government wants to ruin the farmers and all the working classes in Canada. It gives with one hand and takes with the other, using the means already applied to help the people and fight inflation.
As for unemployment, the Minister of Finance is advocating an incentive program for industry. Does he mean that the government will grant further subsidies to the industries? I believe we will have to establish in this field strict control over the use made of our money-I mean the taxpayer's money collected by way of taxes-so that the situation which arose in the case of Canadian Vickers will not occur every year.
This company received subsidies adding up to several million dollars, but to what avail? It is going out of business. What did they do with the government money or rather, to be fair, with the taxpayers' money? Is it the intention of the government to carry on this
June 10, 1969

The Budget-Mr. Beaudoin way? I would like to quote in this respect, the very words of the Minister of Labour (Mr. Mackasey) who said a month ago and I quote: Canadian Vickers received from the government millions of dollars in subsidies and it should have acted differently.
As far as the $100 exemption on goods-I mean the tariff exemption-granted to Canadian citizens back from a visit to the United States, I wonder whether this is really intended to promote the sale of Canadian products? Many people resort to trickery when they go to the United States for 48 hours. I am familiar with this because I live very close to the United States border. Why buy Canadian products which sell for more than $100 when you can get them for $100 in the United States without paying duty?
The prices of Canadian products might go down, but how many companies will close down, thus adding to the unemployment due to the lay-off of many workers?
And then we will have more unemployment. It is a vicious circle, a double-edged weapon, in short a problem which this government seems unable to solve. That is why I give my complete support to the amendment of the hon. member for Edmonton West (Mr. Lambert) which reads as follows:
That all the words after "house" be struck out and the following substituted therefor:
"regrets the continuing inability of the government to curb the relentless increase in the cost of living since 1965, while increasing the hardship of the unemployed, the poor, pensioners, farmers and other victims of the just society."
Mr. Speaker, the Minister of Finance boasts about achieving the first real surplus since 1955-57, when the Right Hon. Louis St. Laurent was then Prime Minister of Canada. What a discovery, what a victory, and at what price.
On May 22, 1969, speaking on the motion introduced by the Ralliement ereditiste to provide the country with a policy of distribution of goods and services which would enable every citizen to get his share of the Canadian wealth, the Minister of Regional Economic Expansion (Mr. Marchand) admitting his inability to do so, said in a somewhat sarcastic tone, and I quote:
[DOT] (5:40 p.m.)
I have not found the philosopher's stone nor any magic formula: I have no direct communication with the Holy Ghost.
Such nice sentences with a religious ring. But they show a total inability to deal with some problems.
According to this minister, it is impossible to fight inflation because inflation is of a 
regional nature, and if the intent is to change our present tax system, this would benefit the Maritimes while creating inflation in Ontario and elsewhere.
Mr. Speaker, the Minister of Finance is simply applying discriminatory measures against Ontario, British Columbia and Alberta, two of those provinces having Social Credit governments.
Is it because everything is all right in those provinces? We wonder.
Therefore, at this stage, I want to refer to page 9419 of Hansard, and I quote:
I therefore propose that depreciation, or capital cost allowances, for tax purposes should be deferred for a period of two years on commercial buildings put in place up to the end of 1970. This would not apply to any form of housing, industrial building, utilities, or public institutions.
But this limitation or exemption will apply to cities with a population over 50,000. We have here an obvious contradiction between what the Minister of Regional Economic Expansion (Mr. Marchand) said on May 22, and the statement made on June 3 by the Minister of Finance.
At that time, the Minister of Regional Economic Expansion stated that he was unable to find a policy to deal with inflation in some regions without impoverishing other regions. But the Minister of Finance says that he has found one. Actually, he is applying different taxation formulas, according to the regions.
I ask, if it is possible to act that way, why does the Minister of Finance (Mr. Benson) not apply different monetary policies in various parts of the country?
Why does he not allow the Bank of Canada to relax credit to encourage regional development in Quebec and the Maritimes? Why not have Bank of Canada branch offices at the provincial level?
When he brought down his mini-budget on June 3, the Minister of Finance (Mr. Benson) said, as reported on page 9413 of Hansard:
From the review which I shall give tonight,
I think it will be evident that we are well launched upon this course.
Talk about launching! Ask the taxpayers, ask the farmers, and all classes of society, several of which are living in poverty, ask them if they like that launching?
The minister speaks of our being well launched on this course. He forgets to say that though the launching was good, many repairs were needed, and the motor of our economy stalled completely many times since October 16 when the first budget was brought
June 10, 1969	COMMONS
down and June 3 when the second one was introduced.
Indeed, while levying a special basic tax of
2	per cent, the minister is forced to keep the
3	per cent surcharge which we had been promised would be abolished, as the minister himself said on June 3, as reported on page 9417 of Hansard, and I quote:
I am not proposing any increase in either personal or corporate tax rates beyond their current levels nor an increase in sales tax, but I am proposing tonight that the personal income tax surtax of 3 per cent on "basic tax" in excess of $200 and the corporation income surtax applicable for the years 1968 and 1969 should be extended until December 31, 1970.
That is quite a find! The minister confirms that there were delays because he has been forced to extend measures that will increase taxes by $155 million in 1970.
Mr. Speaker, here is what the present government proposes in two, three or perhaps four words: Look for truth in the dark.
The Minister of Regional Economic Expansion is reported in Hansard for May 22, at page 8951, as having said:
As for us, we are humans looking for truth in the darkness.
The budget speech delivered on June 3 proves it beyond doubt. It is obvious that this government is looking for truth in the dark, and that, like the Minister of Regional Economic Expansion (Mr. Marchand), it is in complete darkness. No wonder they bring in gloomy and confused budgets. As the ministers walk in the dark, they are bound to have gloomy ideas.
The least we can suggest to the Minister of Regional Economic Expansion and the Minister of Finance (Mr. Benson), is to find a candle, a lantern, a flashlight or at least a little 40-watt light.
It is obvious that the Minister of Finance, like the Minister of Regional Economic Expansion, "is looking for truth in the dark." What is he doing? He is feeling his way; he steps forward, he steps back, he hesitates. He imposes on the poor a social development tax.
Since when has tax been a sign of development? On the contrary, it is a set-back, since it reduces the purchasing power of consumers. Clearly, this social development tax is a result of his groping in the dark.
By maintaining the 3 per cent tax, after having promised to abolish it, he takes a step forward or rather a step backwards, I think, in the dark always.
DEBATES	9961
The Budget-Mr. Beaudoin Certain tariffs which should not have been abolished until January 1972 are abolished so that industry will be in a better position to meet competition. I quote the words of the minister as reported in Hansard, page 9417:
To be specific: I propose that the final rates which were to come into effect on January 1, 1972, should come into effect as of tomorrow morning. This means that the remaining Kennedy Round tariff reductions which had not yet been given effect are to apply immediately.
And further on:
I recognize that some producers will feel they are being denied the time for adjustment to increased competition, which the phasing of the Kennedy Round reductions would have provided. However, I believe that in today's climate, when failure to counter inflation holds its own risks for our competitive position, more time is not necessary for our producers to adapt themselves to these tariffs.
Of course, when one administers in the dark,-as I just said,-one makes a decision at night, and the next morning, it is in effect. The minister said:
-more time is not necessary for our producers to adapt themselves to these tariffs.
Everything about the financial operations of a business must be changed overnight.
The minister also says: You must adapt to foreign competition! Lower your costs, lower your prices, because foreign products which will enter Canada more easily will strongly compete with yours and take hold of your market. That is the minister's way of thinking, or that of his colleagues who made such a suggestion.
At a time when Canada, particularly the province of Quebec, and including the eastern provinces, has a tremendous number of unemployed, I think that such policies are quite ill-timed.
How can Canadian producers lower their prices? By lowering the wages of the workers? Perhaps!
The Minister of Finance must have forgotten to consult his colleague the Minister of Regional Economic Expansion, former president of the Confederation of National Trade Unions, to be speaking like this.
Is it any wonder since the ministers are so much in the dark that they do not even see each other.
On June 3 1969, the Minister of Finance, while introducing his minibudget, also proposed, as recorded on page 9413 of Hansard, that the house approve the general budgetary policy of the government. Useless to say that the Ralliement creditiste is unable to endorse such a proposal, because we com-
June 10, 1969

The Budget-Mr. Beaudoin pletely disagree with the government and the Minister of Finance on their general budgetary policy.
To meet the increasing cost of living, which affects particularly small taxpayers, the Ral-liement creditiste expected the government, if it purported to run the country in the best interests of the people, to announce a reduction of the personal and corporate income tax, the curtailment of the 11 per cent tax on building materials, the definite removal of the 3 per cent surtax which was promised, fiscal reductions in order to promote economic development and measures to reduce interest rates.
[DOT] (5:50 p.m.)
On the contrary, we are advised that the application of the 3 per cent surtax will be extended, that the 11 per cent tax on building materials will be maintained, that the capital cost allowances on commercial buildings put in place up to the end of 1970 in Ontario, British Columbia and Alberta will be deferred for two years and that tariff amendments which are going to hurt our industries and increase unemployment will be put through.
Mr. Speaker, how can we fight inflation if the government does not take the necessary means to lower the disastrous interest rates which push prices up daily and only succeed in making trust compagnies wealthy at the expense of small borrowers?
The profits of banks increase daily. Indeed, during the first six months of 1969, according to the banks' official reports the Imperial Bank of Commerce has realized a net profit of 34.5 per cent in 6 months and the Royal Bank of Canada, 14.1 per cent.
Mr. Speaker, I think that this is good business.
The Canadian National Bank has realized a profit of 7.5 per cent, the Bank of Nova Scotia, of about $8 million, the Bank of Montreal, of 63 cents per share against 27 cents in 1968, and the Provincial Bank made a profit of 29.1 per cent.
We thus clearly realize that the money spent by the government, by the departments, the money created by the Bank of Canada and handed over to the departments by the Bank of Canada, is loaned to the government, and is reimbursed afterwards through direct taxation on personal and corporate incomes.
Now that it is recognized that not a single dollar bill in circulation, not one credit dollar has not been put in circulation by a bank through a bank loan which must be reim-
bursed, it is obvious that all the money in circulation, even taxes, belongs to the banks, and must ultimately return to them.
Mr. Speaker, it is impossible, no matter how hard the government and the Minister of Finance may try, to balance a budget under such circumstances, unless one assumes that the purchasing poser which remains in the hands of the taxpayers is but the balance of bank loans not yet recalled, namely a debt to the banking system or the export surpluses.
It is therefore obvious that a balanced budget, in such conditions, can only recognize that all national wealth belongs to the banking system which has complete control over the flux of the economic body in the present conditions.
As long as the government is unable to get free from the hold of the banking system, how will it be possible to administer? As long as it is obliged to go and borrow from someone more powerful than it is, how will it be possible to help the poor in spite of all the ways the minister and his colleagues would think of using? The government will remain in the dark if it is forced to do business with short-sighted people whose eyes are closed and whose doors are shut.
But to get out of that darkness, to escape that misery, the government should consider the proposals of the Ralliement creditiste concerning the use of the Bank of Canada, as a tool at the service of Canadians. Then, it will be able to provide an enlightened administration, and the ministers-the Minister of Regional Economic Expansion included-will have found truth in the light and not in the dark.


Steve Eugene Paproski: Mr. Speaker, I wish to commence by saying that I am entitling this budget the "Ben Benson budget bounce". Like a rubber ball, infla-minister's rosy statements, the budget offers tion keeps coming back. In spite of the little to the ordinary Canadian except a continuation of high taxes, with no hope of relief in the near future. The average Canadian wage earner is compelled to pay over $20 a week in taxes at the present time. This is unwarranted filching by this government from the taxpayer's pocket. Canadians are entitled to tax relief. They would have welcomed tax relief across this country, as it would have enabled them to plan for the future.
June 10. 1969	COMMONS
Not only has no tax relief been provided, but the 3 per cent surtax has been continued with no shadow of justification. I warn the minister that if the present unjustifiably high rate of taxation continues much longer he will be faced by a tax revolt in this country. Time and again this government has promised tax reform. Where is tax reform in this budget? This budget is just a continuation of the same repressive taxation which we have had for the past two years. What has happened to the reforms recommended in the Carter commission report? They have been shoved to one side. This government must be taken to task for following a repressive policy of high taxation, high costs, high inflation and high interest rates. There has been no change in any of these fields.
The minister put on a shocking display of bad taste on television when he dared to suggest he was following a policy which would aid the ordinary Canadian. In this respect he was ascribing to Canadians across this land a degree of gullibility equal only to his own. The budget is a continuation of policies which have placed on the people of this country the most oppressive taxation and inflation burden that they have ever been asked to carry, with the possible exception of the war years.
There is no relief in this budget for the western farmer. There is nothing for the small businessman, and nothing for the consumer, the housewife, plagued by constantly rising food costs about which the department of consumer affairs has proved powerless to do anything. There is not one five cent piece of relief for the Canadian wishing to buy a home or the Canadian who already owns a home. There is no relief from the unnecessary tax on building materials, or from any of the other taxes which plague the householder and homeowner.
On top of this, the government imposes a further nuisance tax, a tax on air travel. This is simply another means of getting into the taxpayer's pocket. The government has done nothing about dealing with the high price of farm implements or curbing interest rates. The time has come for the government to offer interest free loans to farmers, but nothing has been done in this regard. Surely, with the armies of economists that the government has at its disposal it would have been possible to come up with a more constructive measure than a nuisance tax on air travel. Surely the government, in view of the difficulties in which the western Canadian farmer finds himself, could have come up with an interest free loan for the purchase of farm equipment.
DEBATES	9963
The Budget-Mr. Paproski
There is nothing in this budget to encourage exploration for oil and no sign of a national oil policy. It is a budget which neglects the necessary and devotes itself to the trivial and the obstructive. This budget will not encourage prosperity. As far as the individual is concerned, it will obstruct it.
Perhaps the most objectionable feature of the entire fiscal performance is the obvious disregard and neglect of western Canada. The deferment of capital cost allowances on construction in the western provinces is a slap in the face to western Canada. It is a deliberate penalizing of western Canadian prosperity. It is economic discrimination in its worst form. The minister proudly, and I think foolishly, hailed a budget surplus of some $250 million. Where is this money coming from? Is he going to extract it from western Canada? Is western Canada's economy once again to be sacrificed to eastern interests? This is the most iniquitous measure in a fatuous and feeble budgetary performance. If its purpose is to curb inflation, why is Montreal exempted? Why is the minister showing economic favouritism in his budget? Once again, this government is placing a premium on non-performance.
In light of this it would seem that the Liberal party has simply written off western Canada as a source of electoral support and is now going to penalize the western provinces, or attempt to force them into line. You cannot justify a tax policy that penalizes one part of the country and benefits the other parts. For too long western Canada has been contributing more than it has received. For too long we in the west have been made the victims of an unrealistic oil policy which permits foreign oil to be sold and distributed in Montreal while oil from western Canada is kept out. The time has come for the government to finance an all Canadian oil pipe line from Alberta to eastern Canada in order that we have access to eastern Canadian markets.
The latest discrimination embodied in the deferment of depreciation allowances on capital construction costs in the western provinces will do further damage to the economy of western Canada. In light of this, one wonders where the minister expects to raise his projected $250 million surplus. Does he expect revenues to continue at last year's level in spite of the failure to sell our wheat? Is the minister aware of the fact that at the end of May over 398 million bushels of wheat remained on hand? Unless the government can do something to rectify the mismanagement of wheat sales, we will face a serious
June 10. 1969

The Budget-Mr. Paproski
drop in national revenues in the coming fiscal year.
May I call it six o'clock?


The Acting Speaker (Mr. Bechard):: Order. It being six o'clock I do now leave the chair until eight o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Steve Eugene Paproski: Mr. Speaker, I am asking the minister whether his projected revenues for the coming year take into account wheat sales at last year's level or at a level below last year's, as is the case at the present time. It would be interesting to know in this connection what projected sales are and what steps the government intends to take in order to avoid the largest surplus of wheat in our history. I suggest to the government that it should get on its feet and get out to where the boys grow wheat.
The government has been accused of taxing the rich to help the poor. I am happy to refute that charge. There is no evidence whatsoever that this government taxes the rich. What this government is doing is this: it is taxing the poor to help the rich. About two years ago this government took action to create a fiscal climate in which the rich could get richer while the poor got poorer. The government allowed bank interest rates to almost double. It has increased mortgage interest rates, imposed a succession duty that falls heavily on those with moderate incomes and allowed the housing industry to become the promoter's preserve while permitting homes to be priced out of the reach of all but the wealthy. This government has consistently favoured the larger financial institutions or interests in this country.
I ask, Mr. Speaker, who benefits from high interest rates? Is it the western farmer? Is it the city dweller who must secure a mortgage in order to provide a home for himself and his children? Is it the housewife who must pay inflated prices for bread I submit that the institutions which benefit most from high interest rates are the financial institutions. I ask the minister whether he is aware that banks in this country and kindred lending institutions recorded their highest profits in many years as a result of last year's increase in interest rates. The Minister of Finance


must be aware of these things; yet during an appearance on television he said that he was doing everything he could for the little people. We have high taxes, high interest rates inflated prices and a tax on homes. All these things the minister has preserved for the little people of Canada, for the farmers, workers and moderate wage earners. I say to the minister, come off it. Canadians are aware that no government has done more to reduce average incomes than has this government. In addition to a tax on the worker's pay cheque the government levies an insidious, indirect tax in the form of inflation. Finally, after death, it levies succession duties at rates higher than any we have known before.


Eldon Mattison Woolliams: They are 50 per cent for amounts over $300,000.


Steve Eugene Paproski: It is my hope that the provisions of this budget will undergo careful and critical examination in this chamber and that we, as Members of Parliament representing the public, will make it known to Canadians that we are opposed to a policy of high taxes, high interest rates and high prices. If one wishes to see a glaring example of irresponsibility on the part of the government one should look at taxes. After having imposed for two years the highest peacetime taxes in our history, the government offers no relief whatever to the hard pressed Canadian taxpayer. On behalf of the many Canadians across this country who feel they are entitled to tax relief at this time, Mr. Speaker, I object.
This evening, Mr. Speaker, we shall be voting on the subamendment moved by the hon. member for Waterloo (Mr. Saltsman) on behalf of the New Democratic Party. The subamendment regrets the failure of the government to grant relief from income tax to single persons with incomes below $2,000 a year and married persons with incomes below $4,000 a year. I have no difficulty in voting in favour of this subamendment. To me it means that we wish to see some relief given to people in these very low income brackets. They are the people who are hardest hit by the increase in the cost of living. Living costs have been going up for four years under this government. Of course, that does not mean that we wish to strike all such people off the tax rolls. Nor would I allow exemptions of $2,000 and $4,000 to those in all other tax brackets. The wording of the subamendment is vague, perhaps.
Furthermore, Mr. Speaker, I think the long term attack on poverty is going to involve a
June 10. 1969

rationalization of the social welfare system and the application of a concept such as a negative income tax which was discussed by my party during the last election campaign. In the meantime, we must consider the principle contained in the subamendment now before the house, namely, that some relief should be given to those in the lowest income groups who suffer most from inflation. We endorse that principle and will therefore vote in favour of the submendment.
[DOT] (8:10 p.m.)


Mr.   Jacques-L. Trudel@Bourassa: Mr. Speaker, after hearing several members of the opposition say that the budget did not contain anything and would not solve anything, and after hearing the same members join to criticize the contents of this same budget, I feel compelled to take part in this debate.
I have noted particularly a few remarks of some members about the capital cost allowances for tax purposes, especially on commercial buildings, which are being deferred for a two year period.
I have noted the comments of the members for Waterloo and Edmonton West (Messrs. Saltsman and Lambert) and even those of the previous speaker to the effect that the deferred depreciation was discriminatory; indeed, that it would penalize some regions for their success.
The main aspect of this measure which consists in deferring for a temporary period only those tax incentives, especially in the areas mentioned, in order to stabilize prices, ensure a fair competition and direct capital towards housing, seems to have escaped them completely.
The member for Temiscamingue (Mr. Caouette) mentioned the Creditiste administrations of 33 and 18 years in two provincial governments in order to prove the theory he was putting forth. He seemed to imply that we should adopt the Creditiste theory as the only possible solution but he forgot to say that those two governments do not apply the theory which the member for Temiscamingue has been preaching for so long, but rather the monetary policy followed by the Minister of Finance (Mr. Benson) in preparing the budget which he tabled in the house.
The hon. member has also omitted to say that the only province which experimented the system for 17 years, has only succeeded in driving away both residents and investments.
The Budget-Mr. Trudel It will take a long time before the damage caused by the Creditiste theory is repaired.
What the hon. members have failed to say is that Canadians are now spending more and more for leisure and services. About two years ago, 75 per cent of the money available was spent on durable goods. Now, the new trend is putting pressure on inflation at the present rate of change, because in 1970, 50 per cent of the personal income will be spent on leisure and no longer on durable goods or services.
It is the main reason for the changes proposed in the budget. The members have also forgotten that when he was preparing his budget, the minister really intended to fight inflation which he defines as a surplus of money, as compared to goods and to available services, which varies in certain sectors of economy and even in some areas of the country. They have also forgotten a few facts that I want to mention.
There was a $390 million surplus before the estimates, as compared to a previous deficit of $566 million. This represents a transfer of $1 billion in the economic impact at the federal level.
They have also forgotten that the government was able, during this period of price escalation, to maintain its expenditures at the same level for one year.
The minister was also able to increase grants to municipalities and provinces by $55 million in order to improve their financial position.
One other point they were careful not to mention is that this budget makes it possible to distribute 65 per cent of all taxes levied in Canada among the provinces and the municipalities. This percentage has been increasing steadily for several years.
The Minister of Finance (Mr. Benson) has made available to the Department of Industry, Trade and Commerce enough capital to raise exports to over $13 billion, making possible a trade balance for of $1,300 million in favour of Canada.
The Export Credit Insurance Corporation has ensured $246 million worth of goods in 1968, thus creating jobs for Canadians, mostly for Quebecers.
This budget, although very satisfactory, and even though our exports have increased by 19 per cent last year, is designed nevertheless to increase the output of finished products by our Canadian workers while decreasing the proportion of raw materials exported

June 10, 1969
The Budget-Mr. Trudel without local processing. This task has been entrusted to the Department of Regional Economic Expansion, who has already started on its work.
As I said at the beginning of my remarks, the capital cost allowances seem to have frightened some members. But it must be held in mind that in the three provinces involved, the number of commercial buildings has increased by 32.6, 31.6 and 9.3 per cent respectively, while in Quebec there was an expected of 6 per cent for the same period and the Canadian average, also for that period, showed an increase of 20 per cent. Moreover, this over-activity in commerical construction has led to wage demands, of $1.50 and even $2.00 an hour more than in the other areas of Canada, without meeting for all that the total requirements of those areas and the contractors.
A direct result will be to alleviate the pressure on capital used for the construction of commercial buildings and to ease the demand for housing, thus reducing the inflationary pressures, even in British Columbia, Alberta and Ontario.
For the other provinces, like Quebec, this measure will help to attract the industries needed to absorb the ever-increasing manpower coming on the labour market. There is no such increase elsewhere in the industrial field. In that province, more than 80,000 new jobs will have to be created yearly for five years.
This budget provides for the writing-off of the $125 million deficit for Expo, that is the federal share of the deficit.
Hon. members will recall also the extension of the provincial and municipal shares.
Canadians travelling abroad will enjoy additional exemptions.
Moreover, none of the opposition members who spoke mentioned manpower retraining, especially in Quebec and in the Maritimes.
We could give a long list of agreements for assistance to the provinces, involving expenditures of several million dollars yearly, made possible by this budget.
The federal-provincial conference is to be held this week in Ottawa, and I certainly must mention it briefly. If one takes into account that, at the present time, 50 per cent of the federal budget is earmarked for welfare allowances, and that the province of Quebec devotes 68 per cent of its budget to two items only, namely welfare and education, this meeting must consider not only tax 
sharing but also how that money is spent, at the three levels of government.
Out of a $3 billion budget, Quebec spends only $20 million to promote industry and trade, while the federal budget provides that 14.3 per cent of its total will be devoted to economic expansion directly benefiting that province and municipalities that need it most.
The department has more particularly considered the case of Quebec, as far as the building industry is concerned, and at present there is in that province a surplus of skilled labour. The minister has recognized this fact, and has relieved this anomaly by taking the above mentioned measures.
I have seen fit to take part in this debate to mention a few points that the hon. members on my left had completely ignored.
Therefore, I should like to close my remarks by congratulating the Minister of Finance for the planning he has effected in order to get a just society, by bridging the gap of the regional disparities, by making available to the other departments fiscal resources, to improve the lot of the people across Canada whether they are Frenchspeaking or English-speaking or to improve employment opportunities through the regional development program.
Moreover, he is allowing Canadians to secure the type of housing of their choice, and to express themselves in any of the two official languages of the country.
[DOT] (8:20 p.m.)


Mr. A. D. Alkenbrack (Fronlenac-Lennox-Addinglon):: Mr. Speaker, I could not help but be amused at the rather mystical and psychic comment flashed at us by our affable Minister of Finance (Mr. Benson), and which is contained in 'his white paper, that "since 1965 increases in prices have been larger than desirable, and public policy has been designed to replace inflationary expansion by balanced and sustained growth." Sometimes, Mr. Speaker, we wonder. We wonder also at the admissions, such as the one in his budget speech that "persistence of strong inflationary tides necessitates a re-assessment of our position." How long must we hear these things?
It was three years ago that the Liberal government was first warned that inflation had got out of 'hand. I happened to be one of those who warned them, as recorded at page 5609 of Hansard for May 27, 1966. I do not
June 10, 1969	COMMONS
like quoting my own speeches but this is positively what the record shows:
Mr. Chairman, I regret to intrude on your busy schedule but I think at this time, when we are on interim supply, I should raise this question which is of general interest to the nation. I think the lot of the consumer should be brought to the attention of the house and the committee.
First of all, Mr. Chairman, each of us in this country is a consumer. Present day government policy and the consequent high cost of consumer goods is storming the last bastion of individual hope and the individual right to live within one's means. It is now practically impossible for the head of a family, father or mother, individual or married couple, to make their modest salaries support their families from one pay day to the next.
Prices have skyrocketed all along the line in food, rent, clothing, fuel, transportation, medical bills, insurance, taxes and capital cost of housing both new and used. In this rapid and cruel escalation of costs this government has been a steady partner. Even its policies glaringly point to that fact. It is readily apparent that its policies support the super corporations which profit from and control our buyers' and consumers' economy.
The above conditions are now, three years latter, more pronounced, more acute, more rampant, and practically uncontrolled. But we still hear platitudes about re-assessments.
Since the 1962-63 fiscal year federal government spending is up over $6 billion, and up over $5 billion in the four years of "concerned anti-inflationary policy." Even now, Mr. Speaker, the Canadian Tax Foundation is predicting a 9.8 per cent rise in federal government spending this year-up from last year's increase. And when the Minister of Finance 'himself, having taken most of a white paper and a budget speech to assure us how aware and concerned the government is about inflation, and how excellent this budget is as an anti-inflationary weapon, then proceeds baldly to predict no fall in the rate of price increase in the coming year, we must wonder.
What has the Liberal government been doing these last four years? Nothing that would help the situation. We have had many tax increases during the past few years, and all of these in the name of fighting inflation. But a taxpayer wonders when he sees an 85 per cent increase in federal government spending since 1962-63, while the take from the personal income tax in that time has been boosted to 164 per cent of its 1962-63. level. And this year we know that Canadians will pay more in personal income taxes. This vicious spiral must be stopped. We have had four years of so-called anti-inflationary policy, four years of tax increases, and still we hear
DEBATES	9967
The Budget-Mr. Alkenbrack the Minister of Finance predicting no fall in the rate of price increase.
The Minister of Finance depends on inflation to balance this budget. A great share of the 32 per cent increase in personal income tax take is directly caused by inflation. Wages and salaries would not be going up so fast if we did not have inflation which seriously reduces the spending power of a man's income.
When consumer prices are going up by 4.7 per cent a year, a man has to make at least that much more to keep up. In fact, he has to make more. He does not enjoy an adjustment of his exemptions to allow for inflation. He just pays. If a family of four with an income of $5,000 received a 4.7 per cent increase, just enough to match the increase in the consumer price index, they would be penalized with a $49 tax increase. Their real income is no higher, but nevertheless they pay. And as a result we have been promised a balanced budget-perhaps

we hope.
The Minister of Finance, in his usual efficient fashion, has informed us that he expects a surplus of $250 million. How much of this is generated by the effect of inflation on tax revenues? We know that $275 million, which is $25 million more than his predicted surplus, comes from a once and for all speed up of corporate tax collections. That is fine for this year, but what will he do next year?
We know that the minister has saved over $200 million because some provinces have thus far stayed out of medicare. This allows him some flexibility for supplementary estimates, but should he really be allowed to crow that estimated 1969-70 spending has been reduced $20 million from last October's estimate, particularly when we remember that on February 4 his colleague tabled estimates totalling $11,858 million? We have seen too much of this playing around with the finances of the provinces. According to the minister's admission in the white paper the provinces moved from a $125 million deficit in 1967 to a $300 million surplus in 1968. He has, therefore, shown us who has taken on the responsibility in this fight against inflation, and it certainly is not the federal government. It is time the federal government became a leader against inflation instead of a beneficiary of inflation.
What has the government done? Expenditures have not been cut. In fact, they appear to be heading for a 9.8 per cent increase, and this up from last year's increase. The 3 per cent surcharge on personal and corporate
June 10, 1969

The Budget-Mr. Alkenbrack income has been maintained. Incidentally, the minister previously guaranteed this would not happen. They have added a tax on air travel. On this point, I wonder is it the minister's intention to extend such a tax to users of aircraft for work in the development of resources, especially in northern areas. If so, could he tell us what impact this is likely to have on such survey and development work?
The minister made a large noise about his daring new selective fiscal policy which resulted in a two-year deferral of capital cost allowances for commercial construction in urban centres of Ontario, Alberta and British Columbia. Mr. Speaker, we support the principle of selectivity. It is something our party called for years ago. But I am somewhat disappointed at the minister's refusal to get his feet wet. The minister seems to be testing the water with his big toe. Commercial construction represents only 8 per cent of all construction in Canada, and only about 5 per cent of all capital spending.
[DOT] (8:30 p.m.)
When we scale down this provision to the 22 cities involved we begin to talk of less than 4 per cent of capital spending. Even then there is good reason to doubt the impact of this move. The reason is so far advanced this year that we could not expect any impact so soon. On top of this, construction wage increases averaging 11.2 per cent last year- up from 9.1 per cent the year before-and escalating material costs make the cost of waiting much greater than the tax loss incurred by building now. Unfortunately, since the demand for buildings is so strong this move will quite likely result in rising rents, thus contributing to the inflation it seeks to cure.
The minister also attempted to convince the house that the Kennedy round tariff cuts would help hold the line on prices. We fully support in principle the Kennedy round agreements, and Canada can do well generally under the negotiated changes. But the Kennedy round was aimed at general tariff reduction in the interest of promoting trade and the more efficient allocation of activity internationally. It was not designed to combat inflation. Are the areas covered by the Kennedy round tariffs the most inflation sensitive? Are the specific cuts negotiated exactly what is required to control inflation? Administrative ease does not necessarily imply effectiveness. If tariffs were thought to be major contributors to inflation, why were cuts so limited and confined to the Kennedy round?

There are dangers here. The minister's argument that the lack of application for transitional assistance as a result of past reductions implies that this situation will continue, is logically week. Naturally, the severest impact will come from the final cuts after the dead wood has been cut away. We are not as confident as the minister about the regional effects involved. I would ask the minister in charge of regional development not to allow his efforts to be eroded before he gets going, and to intercede if cases of hardship in the slow growth areas should come to light.
The Kennedy round cuts were designed to meet a long-run problem. Their use as a short-run tool is questionable and experimentally speculative. We regret the failure of the minister to conclude an agreement with the United States for a similar speed-up. Tariffs are not always the factor causing Canadian prices to rise above U.S. prices. Need I remind the minister that quite often Canadian produced cars sell cheaper in the United States than in Canada? Tariffs are not to blame, and $80 million subsidies will not help.
I regret this government's tendency to act unilaterally and in bad faith in reneging on its agreements. This would be tempered somewhat if I expected that the Canadian consumer would receive the benefits of these cuts. We will be reminding the Minister of Consumer Affairs of his responsibility to see that they do. But the real tragedy, Mr. Speaker, is the many holes in this budget, the errors of omission. The minister continue to refuse to listen to our pleas for the abandonment of the social development tax. The minister ignores completely the high and rising interest rates which our consumers must face. Not once does he express concern that such rates are making a house an elusive dream for so many Canadians.
There is no concern at all for the terrible problems of poverty we find in Canada. I have them in my riding; we have our share. There is no concern, for example, for the old age pensioners whose only income is the pension on which they pay income tax. There is no advancement in the fight against regional disparity. Eastern and western farmers are ignored. We fear the continued impact of general tax policies on unemployment in the slow growth areas. Finally, the minister admits he expects no decline in the rate of price increase in the next year. This government has failed, Mr. Speaker, and the minister ought to resign.
June 10, 1969	COMMONS
In his first budget speech the present Secretary of State for External Affairs (Mr. Sharp) said:
If we do not by one means or another succeed in moderating the increase in aggregate expenditures this year, the most immediate penalty we shall suffer is an inflationary increase in prices.
His prediction has come true in this year of 1909. 'inis budget fails to come to grips with the problems. The records of past Liberal governments are proof of the failure of Liberal policy. Like Belshazzar, the last King of Babylon, this government is weighed in the balance and found wanting. Our leader and party have been suggesting for some time consideration of an income policy for Canada, or wage and price guidelines. I was one of those who asked for these measures on May 27, 1966. The government has done nothing about this other than to form another ministry, that of consumer and corporate affairs. But no effective legislation has accompanied this formation to give force and effect to the war on inflation and high prices. And the record of this government indicates that none ever will. The people of Canada have reached the point of painful and dispirited unexpectancy.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, in reporting on the nation's business the Financial Post of June 7 had this headline, "Very tough job nicely handled", and proceeded to commend the Minister of Finance (Mr. Benson) for attacking inflation directly. He was particularly commended for tariff cuts and for deferring depreciation allowances for commercial construction in urban centres. A number of tax experts and economists called these moves "bold, imaginative and highly sophisticated". Of course, the budget also drew unflattering remarks from the opposition and other critics. The criticism is that it does nothing to halt inflation. The Minister of Finance is accused of favouring high interest rates and it is suggested that instead of creating jobs the budget will aggravate the current unemployment problem, and so on.
With regard to the deferred depreciation on buildings for two years for tax purposes, which is to be applied only to centres of 50,000 population or more in the provinces of Ontario, Alberta and British Columbia, because in the other seven provinces unemployment is relatively high or employment growth has been slower than the national average, I should like to make a few observations which relate to my constituency. In a
DEBATES	9969
The Budget-Mr. Badanai country so vast and comparatively sparsely populated the problem of regional disparity is a most difficult one. Even in good times, some areas may suffer from high unemployment and undeveloped resources. Therefore, the government has wisely introduced specific incentives intended to stimulate depressed regions and to counteract slow growth.
However, while I am in agreement with the concept of the legislation, I do not share the view that there are no slow growth areas or high unemployment in any of the three affluent provinces named by the minister. There is one portion of the province of Ontario, its northwestern corner, of 200,000 square miles in which the cities of Fort William and Port Arthur are situated as well as a string of towns from White River in the east to the Manitoba boundary in the west, where you will find plenty of unemployment, especially among our Indians-and there are thousands of them. This is one of the slower growing areas of the province. I am speaking about a region in the province of Ontario which by no stretch of the imagination shares the high level of prosperity of the eastern or southern part. This is an area which has the type of problems this legislation is intended to cure.
[DOT] (8:40 p.m.)
At this point I should like to mention that for several years this region of northwestern Ontario has tried to gain recognition as a designated area eligible for industrial development incentives. An example of this attempt is a resolution passed at the 1965 annual convention of the northwestern Ontario associated chambers of commerce, which I wish to read:
Whereas:
1.	The federal government has provided incentives for the development of industrial employment opportunities in designated areas in Canada
2.	The government announced its designated area policy already has resulted in 175 new industries of a capital investment of $418,000,000 providing 4,000 new jobs in 23 of the 35 areas
3.	No part of northwestern Ontario is included in the incentives program despite acutely fluctuating seasonal employment and relatively low population density
4.	Northwestern Ontario possesses the basic ingredients for greatly accelerated growth despite its underdevelopment and underpopulation.
Therefore be it resolved: That the Northwestern Ontario Associated Chambers of Commerce request the federal government to apply and provide the incentives related to the "designated area" program to the northwestern Ontario districts of Thunder Bay, Rainy River and Kenora.
June 10, 1969

The Budget-Mr. Badanai On May 5, 1966, a delegation from Northwestern Ontario met with the minister of industry, the minister of finance and the minister of resources and energy. Included in that delegation was our present Minister without Portfolio (Mr. Andras) from Port Arthur and myself. This delegation, representing all facets of public and business life in the region, was accorded an excellent hearing by the ministers. It was pointed out that under the criteria, now being discarded in favour of the new proposed legislation introduced by the Minister of Regional Economic Expansion (Mr. Marchand) a few days ago, our region did not qualify. We recognized the overall objective of stimulating the economy of less affluent sectors of our country through greater industrialization, and the remarkable results achieved under area development legislation in capital investments and employment of many thousands of Canadians in such regions, but, all our arguments were in vain, we simply could not qualify.
A quotation from the delegation's brief reads as follows:
Our hands, in short, are tied securely by our "off limits" status while tax revenues originating in northwestern Ontario help to subsidize this and other industrial enterprises established elsewhere. We pay for a fare on the Good Ship Area Incentive but we can't get aboard. Rather, we are being swamped by the waves.
Here we are, fewer than one quarter of a million people, occupying more than one-half of the land and matter mass of Ontario, an area as large as Manitoba or Saskatchewan. Our population is scarcely 2.5 per cent of the provincial total, less than one per cent of the population of Canada. On our country's 102 birthday, this is hardly a remarkable record of growth for a region as richly endowed as ours. And in the midst of accelerated activity across Canada, in which our area shares, our assessed population is about stationary.
This is not to deny the recent surge of expansion embracing primarily greater development and processing of our forest and mineral resources plus secondary industry to serve this growing complex. Indeed, manufacturing enterprises are proving beyond question that, despite handicaps of a small and scattered regional population, long distances from concentrated markets and transportation costs, production of goods can be carried on successfully in northwestern Ontario.
The brief then continues:
Nevertheless, while we develop our natural resources we continue to lose the most precious resource we possess-our educated youth. They leave our region simply because of insufficient career opportunities. Some leave our country altogether, a national as well as a regional loss.
"One of the reasons for our low rate of unemployment" states . the Fort William Times-Journal in its lead editorial of May 22, "is the fact that 
lack of diversified industries has prompted the exodus of large numbers of young people from the area to find work opportunities in other centres of Canada and the United States. It is a matter of record that in recent years the total labour force locally has lagged, while the labour force throughout the province of Ontario has risen appreciably."
Adds the Port Arthur News-Chronicle in its leading editorial of May 2: "The fact that unemployment for northwestern Ontario as a whole is not high enough to qualify for designation is misleading. One of the reasons for this is that when our young people get their education and grow up they have in the past been forced to move elsewhere to find opportunities. The fact that there are enough people from here in Toronto to form a lively and progressive Lakehead Club of 1,000 members is ample proof of this fact."
On behalf of northwestern Ontario, I ask the Minister of Finance (Mr. Benson) to forgo the deferment of depreciation and capital cost allowances on commercial buildings in the cities and towns of northwestern Ontario as an aid to construction in this particular portion of Ontario which is still a slow growth area, and which should be considered in the same category as the adjacent province of Manitoba. Had it not been for an Ontario premier of long ago, this region would have formed part of the province of Manitoba. Had that happened, I am among those who believe that the area would have attained a status of far greater importance.
I also wish to raise another matter of concern to the economy of my constituency, and of many others. I refer to the constant cry we hear from the N.D.P. against foreign investment in Canada. We are indeed fortunate in having a finance minister who, like his immediate predecessor, believes that an attempt to restrict foreign investment in Canada is not in Canada's best interest. The members of that party tell us our economy is in great danger of being taken over by what they like to call continentalism, and that we are gradually being absorbed into the industrial structure of the United States without having any say in the matter. Of course there is a great deal of U.S. investment in Canada, but we often forget that while Canada is one of the wealthiest countries of the world it is still a developing country. It is still one of the vastest and emptiest lands in the world. We need more people and more capital to achieve a measure of independence which those opposed to foreign investments claim we can have by shutting out foreign capital.
[DOT] (8:50 p.m.)
Had foreign capital not been available to bring into production the Steep Rock iron mines in northwestern Ontario, the iron ore
June 10. 1969	COMMONS
which recently has been mined would still be at the bottom of the lake. The several thousand workers would, in all probability, be numbered among the unemployed. Then, there is the dollar exchange factor, which has earned millions of dollars for Canada, resulting from this enterprise as well as others such as the pulp and paper industry upon which many of my constituents depend. I could mention many other industries that have brought benefits to Canada as a result of foreign investment.
It is always easier to blame someone else than it is to adopt the sort of policies that would really give greater economic independence to Canadians. Perhaps, we have not yet fully exploited all the possibilities of encouraging a greater flow of domestic savings into the channels of Canadian industrial investment. Unfortunately, Canada has a long way to go before Canadians can invest in sufficient amounts to develop our country's potential. Until that time, foreign investments will be urgently needed to bring to this country the development that Canadians are not willing to bring to it.
It should be obvious to all that foreign capital is needed badly if Canada is to keep financially healthy and growing. More capital means more jobs and more jobs mean prosperity for all. I honestly believe that the Minister of Finance (Mr. Benson) introduced a good budget, tailored to fit the times, with no new personal income or corporation taxes. It will produce relief for consumers through the lowering of tariffs and the duty free concessions to Canadian tourists.
I congratulate the minister for winning more praise than criticism, and I am quite happy to support his worthy effort in giving Canada one of the best budgets to which it has been my privilege to listen since my election to the House of Commons in 1958. If I may, however, I should like to advance a suggestion that if it were possible to implement an exemption for income tax purposes of the municipal tax on a house, an amount which could be fixed, this measure would undoubtedly prove of great assistance to people in the lower income bracket. I venture to say that the revenue lost by this kind of tax concession would in the long run, prove beneficial to all concerned.


Randolph Harding: Mr. Speaker, it is a pleasure to have an opportunity to say a few words in the budget debate. Unlike the last speaker who, I believe, is the hon. member for Fort William
DEBATES	9971
The Budget-Mr. Harding (Mr. Badanai), on the government side, I fail to see how this can be one of the best budgets that has ever been written. If this is the best budget to which the hon. member has listened since 1958, then the others certainly could not have been worth listening to at all. A great deal depends on how these various budgets affect the different groups in our society. I cannot imagine any of the old age pensioners jumping with glee and delight over the budget which was introduced here one week ago. There is no indication in it that the government is going to give an extra five cents to the large group of old age pensioners who desperately need an increase in their pensions. There is no indication in the budget that the veterans are going to receive an increase in their pensions, despite the promises of the government to bring in a white paper and despite the recommendations in the Woods report. These provisions should have been contained in this budget, not in the budget that will come down in the fall or next spring.
As we go on right down the line through the best budget that my friend has ever heard in his life we find an amazing thing, namely that item after item has been missed. We see nothing in it about the government's attack on poverty in a country where between four million and five million Canadians are living in poverty, in the words of the Economic Council of Canada. This is an amazing thing.


Mr. Speaker:: Is the hon. member for Hamilton-Wentworth rising in a point of order?


Mr. Gibson:: Will the hon. member permit a question.


Mr. Speaker:: Order, please. The hon. member cannot seek the floor in this way.


Randolph Harding: I will permit a question when I have concluded my address, and I have no hesitation in asking my friend to wait a moment or two if he is not too impatient.
I have outlined several of the problems. One of them is the vast pollution which we are experiencing in Canada. There is only one tiny reference to pollution problems in the budget. This is certainly not a budget of which the Liberal government can be proud. There are groups of citizens in Canada who will be badly hurt simply because the members of this house and the government did not deal adequately with the problems which should have been dealt with in 1969 in this budget.
June 10. 1969

The Budget-Mr. Harding
We are debating a subamendment moved by a member of our party, and I should like to speak very briefly on this subamendment. It is suggested that the income tax exemptions for single people be increased to $2,000 and the exemptions for married people be increased to $4,000, a very modest request and one which every member of this house should endorse. Let us look back at the income tax regulations which were set down many years ago. Here we find old age pensioners being taxed on their meagre income, which is not what the government should be doing.
The Carter Commission brought down their report a while ago in which they pointed out very clearly that we have one of the most unjust tax systems in the whole industrialized western world. What do we find in this great budget, the greatest budget that has come out for many years? Do we see any reference to tax reforms? You bet your life we do not. Carter showed us the way to do it. He showed us where money could be obtained by this government if it had the backbone to go after it. The ordinary individual in Canada-and I am talking of people in the low and middle income brackets-is getting sick and tired of having taxes imposed on him while we are letting off scot-free many other people and corporations on which taxes should be levied. If hon. members over there think this is what a budget should be, then that is Liberal thinking and not my thinking.
[DOT] (9:00 p.m.)


An hon. Member:: What about taxes in the socialist nations?


Randolph Harding: We are asking that changes take place. We do not want to wait for them until the end of this parliament. Another budget of an interim nature was brought down last fall. At that time, as during the election, we heard the story that the just society was about to emerge. This is what we were told in June of 1968. Let me remind hon. members that a budget reflects the priorities which a government has in mind and the values it places on various sectors of the economy. It should chart the direction in which we are going. It is an amazing thing to me, but I have not seen any indication that we are heading toward that just society about which government supporters talked so glibly. A just society is not one in which one-fifth of the nation is living in poverty or where huge pockets of regional disparity exist about which precious little is being done. A just society does not ignore the pension needs of the groups to which I have referred. These 
are the fields in which we should be taking action. The budget we are now considering will take us into 1970. Almost half the life of this present parliament will have gone by before another budget is brought down. We have lost all this time. To my way of thinking the government has done a mighty poor job to date. I was hopeful that we would see some changes but like many more individuals I am bitterly disappointed.
There is another aspect from which this budget may be viewed. What has this government done about unemployment, which is one of the major issues confronting us as a nation? I am not playing down inflation; we know inflation is a serious problem. What about unemployment? A budget was brought down last fall, supposedly to do the job which this budget sets out to do. It failed miserably. The cost of living took off from last fall right through this spring, rising more rapidly than ever. During the winter, unemployment rose to fantastically high levels-over 10 per cent in the maritimes, over 8 per cent in Quebec, over 6 per cent in my own province of British Columbia and over 5 per cent across Canada.
How does the budget propose to deal with this situation? It is crystal clear that the government does not expect a significant decline in unemployment figures. The estimate is still that between 400,000 and 500,000 people will be out of work. In the report of the Economic Council of Canada some of the top economists in this nation stated that 3 per cent should be the limit as far as unemployment is concerned, yet month after month we have seen the rate running at double that amount. Does the government not accept advice of the people they hire to check into these things?
It is my frank opinion that the government gets into trouble when it strikes out on its own. Time and time again they get off the track. Changes must be made. We have tried the old solutions and they have not worked. It is time the Liberal party and other parties in this nation began to realise they must take more drastic measures if we are to solve the major difficulties facing Canada today.
I should like to return to the subject of pensions for a moment or two. It is a sad commentary on politicians who are sent to Ottawa that they can do so little effectively to assist those who can no longer bargain successfully for themselves. I am referring to senior citizens, retired civil servants, war veterans and those who have retired on pensions-C.N.R. pensioners, for example. We find that the old age security legislation contains a provision to the effect that if the cost
June 10. 1969

of living rises by 2 per cent pensioners will get a 2 per cent increase. If the cost of living index goes up 4 per cent they will still get a 2 per cent increase. In the last couple of years the spending power of pensioners, and indeed, of all of those on fixed incomes, has rapidly been eroded. Yet we have done nothing about it, though we are in a position to do something about it; we could easily make a change in the legislation which would at least result in the annual raise being equal to the rise in the cost of living index.
The estimate for the increase in the coming year contemplates another 4 per cent, which in other terms means a further $1.50 from the monthly cheque received by our senior citizens, the price of one more item in the stores which they will be unable to buy, though this is one of the richest nations in the world. We should be ashamed of ourselves for failing to tackle this need. We can do it. What are hon. members across the way doing about this? You have a majority in this house. You are the people who should be demanding amendments to the act and demanding that something be done.


Mr. Speaker:: Order. I hesitate to interrupt the hon. member but I must remind him that he should address the Chair at all times.


Randolph Harding: Thank you, Mr. Speaker. I certainly will address the members through you. Hon. members on the government side should persuade the various cabinet ministers to bring in necessary amendments along the lines I have just indicated.
[DOT] (9:10 p.m.)
Now, I should like to spend a few minutes considering another question which has worried me a great deal since I came to Ottawa. It is the subject of national unity. Some might wonder why national unity should be brought into a speech on the budget. Well, as far as achieving national unity is concerned, I feel more can be done by dealing with the economic problems facing the nation in the various provinces of Canada than by bringing a measures such as the languages bill. Each step is of assistance, of course, but I believe that this budget has failed, and failed miserably, to solve economic problems and thus do a tremendous amount of good in bringing about unity across the nation. After all, people who are happy, have jobs with adequate incomes and are free from poverty are not going to talk about branching off from a central body. As far as governments are concerned, their real aim should be to try to
The Budget-Mr. Peddle achieve national unity in this nation of ours. I suggest we put far more emphasis on this particular aspect of the economy than we have in the past.
Before my time runs out I should like to make some comments about the deferred depreciation mentioned in the budget, and which some of our Liberal friends have told us is going to be good for the economy by bolstering housebuilding in various sections of the nation. I am not too sure that this is true. Having read the budget rather carefully and surveyed the picture across Canada, it appears to me that this deferred depreciation of 5 per cent a year in the long run is not going to mean very much. My reason for saying that is this: The Minister of Finance himself has estimated that there is going to be a Canada wide increase in costs of 4 per cent. By deferring commercial building the builder cannot claim his 5 per cent depreciation. On t'he other hand, his costs are going to go up 4 per cent. Therefore, I cannot for the life of me see that very much building will be deferred in this situation.
Other hon. members have referred to another rather odd aspect of this particular measure, and that is the singling out from the rest of three provinces with cities of over 50,000 population. I am doubtful that the claim made by t'he Minister of Finance of a saving of some $450 million that might hopefully be channelled into housing will be established in the ensuing year.
My time is almost up, but in closing I should like to say there are many major problems facing the nation. For example, there is unemployment, inadequate pensions, poverty, our taxation system, repatriation of the Canadian economy, high interest rates, cost of living and the great agricultural problems faced especially by the farmers in the west. Frankly, I think this budget does not deal adequately with those problems. In my opinion, and I believe in the opinion of most Canadians when they realize what is behind the budget, it will prove disastrous for the year 1969.


Mr. Ambrose Hubert Peddle (Grand Falls-White Bay-Labrador):: Mr. Speaker, in my remarks in this debate I intend to take advantage of the traditional latitude extended by Your Honour both in this and the throne speech debates and will not necessarily confine my remarks to the content of the budget speech delivered on June 3. For the

June 10, 1969
The Budget-Mr. Peddle most part the budget is, to me, a rather technical document, and as one newspaper columnist put it, it gives no cause either for spontaneous dancing in the streets or for mass protest rallies.
I am sure this is particularly true in Newfoundland. I cannot imagine for the life of me the Newfoundland fishermen becoming overly emotional over the fact that a pound of imported chocolate candy will cost three cents less, or that the cost of a pound of fancy imported raisins will drop almost one cent, or that a can of pineapple will cost four fifths of one cent less, or that a dollar's worth of orange juice will cost one and a half cents less. Certainly, I cannot imagine any Newfoundlanders being overjoyed because they are now allowed to bring back a little more duty free goods from their trips abroad. The few Newfoundlanders who do go abroad have, like most other Canadians, always managed to bring back a little more duty free goods t'han they were allowed.
I am also sure that the people I know best-Newfoundlanders-will not be too upset by the measure to defer capital cost allowances on skyscrapers in Ontario, British Columbia and Alberta. What the people of my province, and I presume the people of the other Atlantic provinces want, and what they have looked for in past years' budgets, throne speeches and government pronouncements, are measures to fulfil the big campaign promise made by the Prime Minister (Mr. Trudeau) last June. I refer to the big promise that his government would dedicate itself to the furtherance of the just society concept and the diminution and ultimate elimination of regional disparity.
There are those who say that the Prime Minister-indeed, the Prime Minister himself has said this

made almost no promises in the last election. However, Mr. Speaker, if you think about it for a minute you will realize that the references to the just society and to elimination of regional disparities embody every promise for which any sensible Canadian could possibly ask. After all, who in Canada wants more than justice? Who in Canada demands more than economic parity with his fellow Canadians? I say nobody. The Prime Minister did indeed make promises a year ago, very potent political promises. They were promises that embodied in a few words every other promise that was ever made in Canadian political history.

[DOT] (9:20 p.m.)
In his campaign of a year ago I think the Prime Minister capsulized one hundred years of political promises. He crammed one hundred years of frantic and not so frantic vote getting specifics on the part of all political parties into one potent political pill, his "just society and regional disparity pill". And boy, there is no question that this was a vote getter! I agree that the Prime Minister did not promise anything:	I say that what he
promised was everything. The people of Canada have a right to see those promises fulfilled. I call those promises a pill. The people of Canada swallowed that pill, and a whole year is a long time to wait for the slightest sign of benefit from the medication.
We were justified in expecting that this government's legislative program would reflect immediately, from the beginning its professed concern over injustice in our society and economic disparities between our regions. We expected to see real measures introduced, which would at least help us to begin fighting injustice and disparity. Now, let us look at the legislative program of this session which is about to end and let us look at other issues which have been raised in this country by this government. We have that famous bill C-150, if my memory serves me correctly, to amend the Criminal Code. It legalized homosexuality and liberalized the law concerning abortion. I suppose, too, it legalized abortions. Perhaps it is not proper to dwell on the homosexuality bit, but I think the house ought to hear a quip on this subject. Some wag said, "They have legalized it; next they will make it compulsory." And as someone from the N.D.P. added a few moments ago, "Yes, and without a means test."
The government had its priorities mixed up. We had the government reorganization bill. That was a great time consumer. A few departments were reorganized. Primarily, the bill established the department which is to deal with disparities between various economic regions of the country. We have not heard too much from that department. I presume its people are closeted together and will come up with sheaves of maps, plans, studies, task forces and what have you. Then, we had the languages bill which our party in large part supported and which I, too, supported. But I do not regard the languages question as being of top priority. We considered the housing bill which was brought forward much sooner than we had anticipated as a result of the resignation of the minister who, until
June 10, 1969

then, had been responsible for housing. I suppose the government felt impelled to do something pretty quickly. When you come right down to it, there is nothing in the bill for the low income Canadian, and therefore there is nothing in it for any Canadian. I say that for this reason. If you are not a low income Canadian you have no problem with housing. Therefore, there is nothing in this bill for any Canadian since there is nothing in it for any low income Canadian. So, I ask, what was the use of bringing it forward?
The problem, as I see it, is very simple. You have a young, married man earning $3,000 or $4,000 a year, and he has to pay rent of $125 or $150 a month. Half his salary goes towards maintaining a roof over his head.


An hon. Member:: Shame.


Ambrose Hubert Peddle: This is the problem. I wish the government would stop playing footsie with it and enter fields of endeavour which would help our people. The government is in the transportation business. It is in the hotel business. It flies aeroplanes and runs trains. I say to the government, stop playing footsie and, if necessary, get into the house building business. If that means depriving some of our big people in the building industry of a fat profit, that is their tough luck. After all, the government deprives the people in the hotel or transportation businesses of some of their profits.
During the past nine months the government has acted in some fields without being authorized to do so by legislation. For instance, the recognition of Red China has been under discussion. Why the government is doing this I do not know, but there it is. We have the question of the cutting back of our NATO forces. This sort of thing seems to come up at regular intervals. Then, the question has come up of establishing diplomatic relations with the Vatican. As I say, these suggestions seem to come up regularly. It seems to me someone sits up nights dreaming up ways of dividing the Canadian people and of setting us against other countries. Somebody works the night shift, I am sure, dreaming these things up. Where are the government's priorities, I ask? When I look at what has been done I ask myself, has the government done these things to cover up the fact that it has no real policies to put forward?


Some hon- Members:: Hear, hear.


Ambrose Hubert Peddle: I am being charitable when I think that. I cannot help wondering, though,
The Budget-Mr. Peddle if something a little more diabolical is not behind all this.


Edgar John Benson: Will the hon. member permit a question. In reviewing business dealt with by the house he has alluded to some very important measures. I wish he would also mention bill C-202, to do with regional development incentives and the legislation to establish the Department of Regional Economic Expansion.


Ambrose Hubert Peddle: When the minister was delivering his budget speech I would have loved to utter some interjections.


Edgar John Benson: The hon. member could have done that.


Ambrose Hubert Peddle: I am afraid I cannot cover everything in 20 minutes. I am the best judge of what I should speak about.


Gerald William Baldwin: The minister talked for one hour and covered nothing.


Ambrose Hubert Peddle: At the beginning of the session, if my memory serves me correctly, we had a budget that raised taxes. A few nights ago, near the end of the session, we had a little budget. In the budget speech the minister tried to tell us that there would be no increase in our taxes. That is just a play on words. When you have promised to discontinue a tax and you continue it in force, what are you doing except increasing taxes? We were told that a certain tax would be removed at the end of this year. Then, the minister turned around and kept the 3 per cent surtax in force. Let's not kid one another, Mr. Speaker. That tax will probably remain in force next year because the minister likes its taste.
Then, we have the tax on air travel which has not been pinned down to definite amounts. We do not know how big that tax will be. It will not affect my Newfoundland constituents too much because not too many of them are lucky enough to be able to afford air travel. Nevertheless, because of our geographic position and because some people may wish to visit their friends in Newfoundland, we want to see air fares kept as low as possible for the benefit of those who are lucky enough to have Newfoundland friends to visit.
The minister has budgeted for a $390 million surplus. All this week he has worn a smile on his face, reminding me of the cat that swallowed the canary. He loves the idea of the $390 million surplus. He is going to get a lot of mileage out of it. At one fell swoop he

June 10, 1969
The Budget-Mr. Peddle will wipe out the $125 million Expo deficit. There is no need to carry it for a number of years; after all, we are rich. Let's write it off, the minister thinks. We have hit the jackpot. After all, we have a $390 million surplus coming this year.
But the people in the remoter areas of Newfoundland who ask the government to build a small wharf costing a few thousand dollars so that fishermen will not drown when they come back from fishing trips and who are refused on the grounds that the government has not the money to build the wharf are not so pleased. What must they think when they are turned down with the excuse that there is not enough money to meet their wishes? What do they think of this surplus? I have a filing cabinet full of letters from these people. They are all nice letters and all express grave concern over this lack of funds. None of them mentions anything about the $390 million surplus which is making the minister so happy. All this reminds me of the man earning, say, $3,000, $4,000 or $5,000 a year who buys a $4,000 or $5,000 automobile and who says to his mother, "Mother, let's pay off the car; we can eat next year or the year after." What kind of nonsense is this? We have regional disparity in Newfoundland. It is made in Canada by the government of Canada. I refer to the matter of permanent military installations.
[DOT] (9:30 p.m.)
Before my time expires I wis'h to quote some figures. The total strength, military and civilian, in the provinces is as follows: Newfoundland, 559; Prince Edward Island, 1,674; Nova Scotia, 20,105; New Brunswick, 7,612; Quebec, 15,227; Ontario, 42,071; Manitoba, 8,785; Saskatchewan, 2,214; Alberta, 8,877; British Columbia, 12,782 and the two Territories 270. I support the brief submitted by the Canadian Legion in the past few days. It states that Newfoundland represents 2J per cent of the population of Canada. Bearing in mind the strategic position of Newfoundland, it is only reasonable we should expect 2\ per cent, or something approaching that, of the total military strength which would amount to 3,000 instead of 559. This is regional disparity, Mr. Speaker. As mentioned in the brief submitted by the Canadian Legion to the Minister of National Defence (Mr. Cadieux), it certainly appears to be in contravention of one of the terms of union. The government said it would maintain suitable military installations in that province. In view of the government's avowed intention to do something about the situation, I very humbly sug-

gest that they start at this point. Then, everyone in Newfoundland will appreciate that and what we hope will follow it.


Mr. Andre Fortin (Lolbiniere):: Mr. Speaker, I had only some very brief remarks to make but having heard the hon. members' speeches about the budget brought down by the Minister of Finance (Mr. Benson), I would like to say that this budget will not help in any way the Canadian population deprived of purchasing power.
On a few occasions, I had an opportunity to tell the house that a large sector of the Canadian population lacks purchasing power.
Some hon. members have recently poked fun at Social Credit and said that it is a dollar-making machine that could only lead to inflation and that offered some danger.
Mr. Speaker, with all due respect, I would call your attention to the fact that a negative and irresponsible stand will not lead to adequate solutions to that problem which is now facing Canadians, that is an economic system based on the population's needs. Neither will we succeed in selling our huge production, so as to be able to produce more and thus reduce unemployment, by taking money from the tax-payers through direct or indirect taxes.
Everything holds together in the economic system and, in my opinion, we are facing a serious problem in Canada. We have to sell our products and increase our productivity while enabling people to meet their needs. We are more and more convinced that this monetary system is inadequate and cannot solve this problem.
As for us we suggest a solution which certainly will not solve all world's problems but which could at least settle some of them and which I think is justified by the existing conditions which we have been experiencing moreover for 100 years now. I think that hon. members-whatever their political opinions are

should at least be honest enough to examine seriously this solution, not with red-or blue-tinted glasses but so as to determine whether it is the whole or partial answer to our economic problem.
Mr. Speaker, the day I am given proof and sufficient explanation that the theory proposed by Major Douglas a number of years ago and now advocated by the Rallie-ment creditiste is not appropriate, that it does not solve the monetary problem while respecting private enterprise and promoting the development of the human being, I will no
June 10, 1969

longer be a Creditiste because I will know that it is not a true solution.
To date, nothing has been proven. We have not been told that it is an inadequate solution and those who do, act in the same way as the Minister of Regional Economic Expansion (Mr. Marchand) who laughs at us, pokes fun at everything, without seriously considering the suggestion.
The Minister of Finance wants us to study his budget seriously. He would like us to examine his recommendations seriously.
The Minister of National Revenue (Mr. Cote) has invited the members of the opposition to study the budget recommendations seriously, but he has neither the courage nor the sincerity to practise what he preaches and to make the necessary mental effort to examine our proposals.
We are ready to study his seriously, to make a clean sweep in order to examine the financial and economic recommendations of the government. We would hope he would have the same intellectual decency to study in return, with the same intellectual honesty, the recommendations that we bring forth.
Until I have proof to the contrary, it will not be said that the Canadian people have everything they need to live well and to grow. It will not be proven by the government that our productivity will increase, our balance of payments improve, that the purchasing power of the population will climb and our debts diminish.
On the contrary, we notice that debts increase, that our balance of payments is increasingly unfavourable, that we belong more and more to the United States, that the economic situation of several social classes is getting worse all the time, that the gap between rich and poor is getting wider, that the poor grow poorer, and there are more and more of them, that the rich are getting wealthier, but in smaller numbers, and that the situation is becoming unbearable for a large part of our people.
To speak about one part of the population, there are now more than 470,000 unemployed in Canada, who have neither a sufficient income nor the opporunity to work and develop their talents to increase the productivity for the benefit of the country. What is the government doing in that connection? Absolutely nothing!
Mr. Speaker, while some people are unemployed, others earn a living painfully, by the sweat of their brow, and do not make enough money to keep their families decently, to enjoy life.
The Budget-Mr. Fortin
Here, I refer to question No. 636 that I put on the order paper on November 1 last and which the government answered.
I asked how many Canadians earn less than $3,000 a year, and the government answered that 2,440,819 Canadians earn less than $3,000 a year. I have already said it in this house and I say it again that they make up 47.9 per cent of all wage earners.
Mr. Speaker, I cannot think that you, I or another member could keep his family, do this work as a member of parliament, and live decently on a yearly income of less than $3,000. This is ridiculous, Mr. Speaker, in a country as rich as ours.
In this line of thought, I also asked how many people earn between $3,000 and $4,000 a year. You will agree that this is not a very interesting or even acceptable income. It is not even a minimum considering the present cost of living. Moreover, the government is not concerned about this- because it is doing nothing to control the increasing cost of living.
There are, as you probably know, 1,034,909 people in Canada making from $3,000 to $4,000 a year. Those are heads of families, wage earners who work, who are not unemployed and who make only from $3,000 to $4,000, which is a wholly inadequate income to meet their needs and live decently. Well, more than 20.3 per cent of the workers fall in that category.
If we consider the number of Canadians who earn less than $4,000 a year, we see the scandal of the present government that does absolutely nothing to help these people. On the contrary, it keeps on taxing them, "crushing" them further, to use a colloquial term. I believe it is the right one because none other fits to describe the situation in which the government is placing us. 68 per cent of the workers earn less than $4,000 a year.
This evening, a member for the island of Montreal-the name of his riding escapes me because we do not see him often; he was taking the floor for the first time, I think- said that the Ralliement creditiste was advocating the Social Credit doctrine and that it made no sense, that its principles defied application, that everything was going well and that the Minister of Finance deserved congratulations. I suggest that such an attitude is not honest. At least, one should be honest enough to study the solution we are proposing, that is to establish a balance between the purchasing power of the consumers and the total production of the country.
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Division
We are presently experiencing a period of inflation. The Americans and the American banks have announced that they are tightening credit, that they are increasing the interest rate. We, Canadians, with our sheeplike mentality with regard to economic policy, will follow suit, obviously. Who will bear the brunt of such an attitude? The Canadians, again and always.
Mr. Speaker, I am convinced that we should have, in Canada, a policy of economic nationalism at the service of the people, so that money will serve the people and not the reverse.
[DOT] (S:40 p.m.)


Mr. Deputy Speaker:: Order, please. It being nine forty-five o'clock it is my duty pursuant to section (6) of Standing Order 60 to interrupt the proceedings and forthwith put the question on the amendment to the amendment.


Mr. Speaker:: I declare the amendment to the amendment lost.
It being after ten o'clock, the house stands adjourned until 2 p.m. tomorrow.
At 10.10 p.m. the house adjourned, without question put, pursuant to standing order.

Wednesday, June 11, 1969