1969-12-12

ROUTINE PROCEEDINGS


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, hon. members will have noticed the notice given by my colleague the Secretary of State on the notice paper this morning to introduce a bill to amend the Company of Young Canadians Act. In view of the element of urgency in respect of that bill and, in particular, so that the bill may be given first reading today and be available for study by hon. members this weekend in order that the House can proceed with the second reading debate on Monday, I wonder if we might have the unanimous consent of the House to waive the requirements of Standing Order 42 with regard to the two days' notice so that first reading might be given this morning?


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.



PROVISION FOR APPOINTMENT OF COMPTROLLER

Donald Stovel Macdonald: for leave to introduce Bill C-171, to amend the Company of Young Canadians Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


Mr. R. R. Southam (Qu'Appelle-Moose Mountain) moved: for leave to introduce Bill C-172, to amend the Canada Grain Act (offtrack elevator licensing).


Some hon. Members:: Explain.


Richard Russell Southam: Mr. Speaker, the purpose of this bill is to revise the definition of "elevator" in the Canada Grain Act so that an inland elevator is no longer restricted to premises served directly by a railway. The amendment thus authorizes the Board of Grain Commissioners to license premises that are off-track and serviced by other means of transportation. If this bill should be passed quickly it would assist hard-pressed western farmers by providing much needed extra space for grain delivery and storage.	.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
[DOT] (11:10 a.m.)


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Indian Affairs and Northern Development. In light of the fact that a telegram sent by the Fraser district Indian bands protesting the minister's proposed Indian policies was redrafted, after consultation with a member of a public relations firm which at the same time was working for the Department of Indian Affairs, to make the telegram more moderate, is it the position of the minister that his consultations with the Indians in British Columbia are giving him a clear picture of the attitudes of the Indians toward his policies?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I have not seen the telegram regarding this alleged interference by an employee of a firm working for the department. I know, however, that in my several trips across Canada, in British Columbia more especially, I had the opportunity of meeting not only Indian chiefs but also other people and those who were willing to help clarify the situation have certainly done it in good faith. I believe
1898	COMMONS DEBATES	December 12, 1969
Inquiries of the Ministry
that such discussions can help the Indians as cient research conclusions were drawn from well as the Canadian people to understand this program to warrant its early termina-better the government objectives.	tion?


Robert Lorne Stanfield: A supplementary question. When the Department of Indian Affairs was informed by the member of the public relations firm himself that he had been nominated to the public relations committee of 41 Indian bands in the Fraser district of British Columbia, did the department inform those Indian bands that this man was a member of a firm which at the same time was doing work for the Department of Indian Affairs?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not aware of that aspect of the problem. I will look into it, however, and will be pleased to report to the House.


Robert Lorne Stanfield: A further supplementary question. Will the minister immediately inform himself of this situation and take the earliest opportunity to notify the House of the measures he proposes to take to restore whatever confidence may still exist between his department and Indian bands generally?


Mr. Speaker:: Order, please.



REGIONAL ECONOMIC EXPANSION


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I have a supplementary question or perhaps it might be classified as a related question in that it deals with our native people. I wanted to direct my question to the Minister of Regional Economic Expansion, but in his absence may I direct it to the Prime Minister.
In view of the fact that approximately $3 million was spent over a period of two years in building a training centre in Lac la Biche which was opened to students in February 1969, can the minister state why this centre has closed its doors to students and laid off over 20 instructors in the last two to three weeks?


Right Hon. P. E. Trudeau (Prime Minister):: That department will be answering questions on Monday, Mr. Speaker.


Paul Yewchuk: A supplementary question. Does the Prime Minister now feel that suffi-


Mr. Speaker:: Order. I would think that the supplementary question is not in order. The hon. member is asking the Prime Minister or the minister responsible to express an opinion, and I would not think that a supplementary in those terms is acceptable.


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a supplementary question for the Minister of Indian Affairs and Northern Development. In view of the matter just raised by my colleague from Athabasca, would the minister care to comment on why his department finds it necessary to spend $37,500 a year on publicity in British Columbia while at the same time schools of this sort are closed?


Mr. Speaker:: Order, please.



POLICY RESPECTING INTEGRATION OF U.S. AND CANADIAN RESOURCES

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I had a question for the Minister of Energy, Mines and Resources. Unfortunately he was not here for the first part of the question period yesterday and is not here this morning, although he is on the roster for today. Therefore I shall direct the question to the Prime Minister. It has to do with the meeting which the Minister of Energy, Mines and Resources had with Mr. Walter Hickel, United States Secretary of the Interior. In view of the statement by the Canadian minister to the effect that the discussions regarding integration of energy resources of both countries would lead to greater economic integration, and in view of the fact he has already made extended statements to the press, may I ask whether the minister or the Prime Minister will make a statement on motions outlining the government's position, respecting the whole question of integration of the energy resources of Canada and the United States?


Hon. Otto E. Lang (Minister without Portfolio):: Mr. Speaker, the questions, of course, which are being discussed between the United States and Canada deal with the possibilities of economic advantages to both countries from making better use of these resources. This is really based on the free trade attitude which we have with regard to the whole world and which is being looked at in this
December 12, 1969

connection. I am sure that when we are in a position to make a policy decision on specific proposals or issues the minister will report to the House.


Thomas Clement (Tommy) Douglas: Having regard to the fact that these policy decisions arouse fears on the part of many Canadians that we could be getting set up for an extensive sellout of our resources, would the Prime Minister be prepared to refer the whole question of energy integration to the appropriate committee of the House of Commons so that members may have some information regarding the government's position and so that various groups in Canada who are interested in this question may have an opportunity to submit their views?


Pierre Elliott Trudeau: Mr. Speaker, because we have no fear that there will be a sellout, as the hon. member puts it, I have no reason to consider his question.



OIL-USE OF ALBERTA PRODUCTION IN EASTERN CANADA

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, in reference to the answer just given by the Prime Minister that he has no fear, I wonder whether I might quote an answer given yesterday in reference to a question I would have followed up yesterday if there had not been many questions on this subject and I did not want to take up the time of the House then. It is very brief. The minister said-


Mr. Speaker:: Order, please. The hon.
member should ask a question. I would think it would be irregular to quote questions asked or answers given yesterday.


Eldon Mattison Woolliams: I just want to put the preamble so the Prime Minister will appreciate it. The minister said yesterday that it was too expensive to take western crude into Quebec and eastern markets either by pipeline or otherwise. Would he consider referring that matter to the appropriate committee in order to determine whether or not it is economically feasible to pipe crude petroleum from one part of Canada to another rather than having the market fall under United States influence?


Otto Emil Lang: Mr. Speaker, I should like to look at the exact words the minister used. I believe he was talking about the possibility of greater expense. I would have to refresh my
Inquiries of the Ministry mind about that, but I will certainly draw these representations to the minister's' attention.


Eldon Mattison Woolliams: Mr. Speaker, I rise on a question of privilege. There was some objection to my putting the question. Had I done so the minister would have known what was said. I should like to read one sentence into the record so the minister and the Prime Minister will know exactly what I was asking. This is what the minister said as recorded on page 1851 of Hansard for yesterday:
Mr. Speaker, if oil were sent from Alberta to Quebec, in the east, it would be very costly. Indeed, pipelines would have to be built from western Canada, which would not be profitable.
Presently, if the oil consumed in the east contains equal parts of Canadian and foreign oil, that constitutes a good market for western oil. Besides, it is possible to get oil cheaper, in the east.


Mr. Speaker:: Order, please. The hon.
member said he was putting a sentence on the record. It seems to me that this is much longer than a sentence. I doubt that there is a question of privilege but in any event perhaps the hon. member has just about reached the end of the citation.


Eldon Mattison Woolliams: I have reached the end of the citation, Your Honour. My question of privilege is this, and I think it affects every member who asks questions. There are times when you have to give a preamble so as to inform the Prime Minister or other minister who is going to answer the question. This is particularly true when, as today, the government only has a corporal's guard here on Fridays.


Mr. Speaker:: Order. The minister is rising on the question of privilege.


Otto Emil Lang: On the question of privilege, may I say that if hon. members opposite would ask direct questions they would get direct answers.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. I wonder
whether any useful purpose would be served by pursuing this matter. I remind hon. members that the question period is limited in time. Every day we seem to be running out of time. If half the period is taken up by points of order and questions of privilege I suggest it is not entirely fair to the hon. members who are waiting to ask questions.
December 12, 1969

Inquiries of the Ministry


Robert Lorne Stanfield: I should like to ask the minister a direct question in the expectation of getting a direct answer. Is the minister prepared to inform the House of the nature of the United States proposal so that we and the people of Canada may have an opportunity to consider it before the government makes a decision one way or the other with which we shall be stuck?


Otto Emil Lang: There is no question of a specific proposal; rather, there is discussion of the whole issue so as to clarify the position of the two countries. The Americans are engaged, as we are, in a major review of policy with regard to this matter, and arising out of these reviews will no doubt come possible solutions and suggestions for action. Until that time, the government cannot really come to grips with this issue, let alone discuss it with the House as a policy matter.
* Hon. George Hees (Prince Edward-Has-tlngs): Is that the minister's idea of a direct answer, and, if it is, would he mind going back to school and learning how to answer directly?


Mr. Speaker:: Order.


An hon. Member:: Is that a direct question?


Mr. Speaker:: I see there are three hon. members rising to ask supplementary questions on the same subject. May we have order, please? I hope hon. members will take into consideration the suggestion I made the other day about limiting supplementaries if we are to accommodate members in the second, third and fourth rows who are waiting for the chance to ask legitimate questions.


Right Hon. J. G. Diefenbaker (Prince Albert):: In view of the statement just made by the minister I ask him whether or not the Minister of Energy, Mines and Resources was stating government policy yesterday when he said that if oil was sent from Alberta to Quebec and the east it would be very costly, pipelines would have to be built from western Canada which would not be profitable, and so on. Has the government made any decision which prompted the minister to make that Statement yesterday?


Otto Emil Lang: I am grateful to the right hon. gentleman for reading that statement. It was a statement about the situation-and not a statement of policy at all.


Thomas Clement (Tommy) Douglas: May I ask the minister a direct question? Is he prepared to table in the House any studies that corroborate the statement of the Minister of Energy, Mines and Resources to the effect that it would be more costly to ship western crude to Montreal than to purchase it offshore? Will he also tell the House the sources from which this information came, and who made the studies in question?


Otto Emil Lang: I am sure that if the minister were here this is a question which he would undertake to consider and I will certainly bring it to his attention with that in mind.



INCOME TAX


Mr. Henry Lalulippe (Compton):: Mr. Speaker, I should like to put a question to the Prime Minister.
Would he tell the house whether he is prepared to listen attentively to a request from British Columbia that the federal government vacate the personal income tax field in favour of the provinces?


Pierre Elliott Trudeau: Mr. Speaker, I have listened very attentively to that question at least twice.



AIR TRANSPORT


Mr. John Lundrigan (Gander-Twillingaie):: Mr. Speaker, as a member who just made it through the curtain to the fifth row I should like to ask a question of the President of the Treasury Board. Can he indicate whether the conciliation board report with regard to the negotiations between the Canadian Air Traffic Controllers Association and the Treasury Board has yet been received and, if not, will the report be received by the indicated deadline today in order to avert the possibility of a nationwide strike?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, we have not yet received the report but hope to have it early this afternoon.
December 12, 1969	COMMONS DEBATES


John Howard Lundrigan: I have a supplementary-question for the Minister of Transport. Can the minister indicate whether his department has taken any action to ameliorate the situation in that section of his department where high morale is of the essence?


Hon. Donald C. Jamieson (Minister of Transport):: I am not sure that I fully understand the question. In so far as the negotiations are concerned they are, of course, the direct responsibility of the President of the Treasury Board. With regard to negotiating matters, I hope we have a continuing liaison with the air controllers to improve their conditions generally. If the hon. member has a specific question, I would be glad to deal with it.


Mr. John L. Skoberg (Moose Jaw):: I have a question for the Minister of National Defence. Could he answer the question asked him the other day with regard to whether or not Armed Forces personnel would be used to do the work of the air traffic controllers in the event of a strike?


Hon. Leo Cadieux (Minister of National Defence):: If you would allow me to use your words, Mr. Speaker, may I say that this is a hypothetical question.


John Leroy Skoberg: I have a supplementary question, Mr. Speaker. The other day the Minister of Transport suggested to the press that this may be the case. The minister has denied it, and I think that a direct question put to the Minister of National Defence should be answered in the House-


Mr. Speaker:: Order, please.


Mr. J. M. Forresiall (Dartmouth-Halifax East):: I have a supplementary question, Mr. Speaker, which I wish to direct to the Minister of Transport. Could he indicate that military personnel will not be used in the air traffic control centres in the event of a strike? Can he give us such an assurance inasmuch there is much concern about the matter?


Donald Campbell Jamieson: I cannot give that kind of an assurance, but I welcome the opportunity to say what I said the other day. I was asked what would happen in the event of an emergeny where an aircraft happened to be in the air and would be in real difficulty in the event of a strike. I said that under those circumstances there might be in that area military personnel who would be able to bring that plane in. That was the sum total of what I said with regard to that matter.
Inquiries of the Ministry


John Howard Lundrigan: I have a supplementary question for the Minister of Transport. Would he be prepared on Monday to make a statement on motions clearing up the confusion which is causing a number of people concern and which arose as a result of statements made outside the House along the lines indicated by hon. members in their questions to the Minister of National Defence?


Donald Campbell Jamieson: I have just said precisely what my statements outside the House were. I cannot be responsible for their interpretation or reporting. I repeated to the House what I said then, that if there were an emergency situation involving an aircraft, quite possibly that plane could be brought in by armed forces controllers.



NORTHERN AFFAIRS


Mr. Sieven E. Paproski (Edmonton Centre):: Mr. Speaker, I should like to direct this question to the Minister of Indian Affairs and Northern Development. In view of the intensified Arctic research by the Soviet and American governments through the use of drift stations, will the minister take an early opportunity to inform the House what Canada is doing in this area?


An hon. Member:: Drifting.


Mr. Speaker:: Order, please. The hon.
member is inviting the minister to make a statement which should be made on motions. However, the minister may indicate to the House whether he proposes to do this.


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall be pleased, when the occasion arises, to report to the House.



INDIAN AFFAIRS


Joseph Jacques Jean Chrétien: While I am on my feet, Mr. Speaker, I should like to answer a question asked by the Leader of the Opposition (Mr. Stanfield) in respect of a request for assistance addressed by the Indians of British Columbia to a public relations firm. It is true that the Indians asked this firm to help them, but the terms of
December 12, 1969

Inquiries of the Ministry reference given were valid only for the meeting attended by its representative. It is always the role played by the people in these areas, pursuant to instructions from the department, to help the Indians in order that they get as much publicity as possible, so that the public will know their situation and the manner in which they are treated by the government.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Is it the position of the minister that it is proper for his department to retain a public relations firm and not inform the Indian bands- who may be using members of that firm without any knowledge as to the conflict of interest?


Mr. Speaker:: Order, please. The Leader of the Opposition is asking the minister to express an opinion whether it is proper or improper to do something. The question as asked certainly is not in order.


Robert Lorne Stanfield: I was merely seeking information as to what is the policy of the department. Is it the policy of the department to avoid informing the Indian bands of such conflicts of interest?


Joseph Jacques Jean Chrétien: Mr. Speaker, the policy of the government is to help the Indians as much as possible, to make their problems known to the Canadian people and to parliament.



PUBLIC SERVICE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Supply and Services. Is the minister now in a position to answer my question of Tuesday as to whether arrangements can be made for any retroactive pay cheques not received by civil servants until 1970 either to be dated in 1969 or issued in such a way that they will be subject to income tax this year rather than next year?


Hon. James Richardson (Minister of Supply and Services):: Mr. Speaker, the policy is that cheques must be dated in the year in which they are issued. It would not be a good precedent for the government to set for other employers to allow checques to be dated in other years than the one in which they are issued.


Stanley Howard Knowles: supplementary question, Mr. Speaker. If it is beyond the wit of the government to do this, will it make a supreme effort to get all these cheques issued before the end of December?


James Armstrong Richardson: Mr. Speaker, I have reported to the House frequently on the progress being made in that respect, and particularly on the amount of very hard work being done by the personnel in the Central Pay Office. Every effort is being made to get out as many of these cheques as possible, particularly before Christmas.


Mr. David Orlikow (Winnipeg North):: Can
the minister give members of the House and the employees, who are very concerned, an assurance with regard to the date by which all the outstanding cheques will be issued if they cannot be issued by the end of December?


James Armstrong Richardson: Mr. Speaker, we are current with regard to all the collective agreements, but there are salary changes and other adjustments being made at all times and I cannot give a date by which all cheques will be issued.


Mr. Thomas M. Bell (Sainf John-Lancasier):: Mr. Speaker, mine is a supplementary question on the matter of retroactive pay, and it is in connection with representations that I previously brought forward in the House on this subject. Has the minister received the legal opinion that he said he was requesting on this matter and, if so, did he advise the Professional Institute of said legal opinion?


Charles Mills (Bud) Drury: Mr. Speaker, we have been in communication, both written and oral, with the counsel for the Professional Institute, and this is continuing.



BANKRUPTCY


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I should like to direct my question to the Prime Minister.
I should like to ask him whether, as a result of the report recently brought forward by Judge Hughes about the bankruptcy of the Atlantic Finance Corporation, he could say whether action will be taken in order to
December 12, 1969

amend the Bankruptcy Act so as to prevent similar bankruptcies in the future?


Pierre Elliott Trudeau: Mr. Speaker, I shall refer the question to the Minister of Consumer and Corporate Affairs who deals with the administration of the Bankruptcy Act.



PUBLIC SERVICE


Mr. D. W. Groos (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, my question is for the right hon. Prime Minister and is supplementary to one which he accepted yesterday on behalf of the President of the Treasury Board from the hon. member for Calgary North. Will the Prime Minister invite the Minister of Veterans Affairs in particular to establish for certain that in effecting lay-offs in his department proper consideration is being given to war amputees, in view of the fact that their opportunities for re-employment elsewhere are very greatly diminished by the severity of their war-incurred disabilities?


Pierre Elliott Trudeau: Mr. Speaker, I did say yesterday that I would have the department and the minister look into this question. I have made this request. I have not had an answer yet.


David Walter Groos: A supplementary question, Mr. Speaker. Would the Prime Minister invite the President of the Treasury Board to relax the directions that he has been giving or is giving, in particular to the Minister of Veterans Affairs whose department, I believe, employs more amputees than any other department of government?


Some hon. Members:: Hear, hear.


Eldon Mattison Woolliams: Mr. Speaker, my supplementary is directed to the President of the Treasury Board. Has he a statement to make in reference to this question which I raised yesterday and can he assure the House that apparently what the Parliamentary Secretary now says is a fait accompli will not be continued as a policy by the government?


Charles Mills (Bud) Drury: In respect of the question asked yesterday, Mr. Speaker, I have not been informed as to the result of inquiries being made.

Inquiries of the Ministry PENITENTIARIES



POSITION OF NEGOTIATIONS RESPECTING


John George Diefenbaker: Mr. Speaker, my question has to do with one I raised yesterday in the absence of the Solicitor General and the President of the Treasury Board concerning the position of penitentiary guards and other custodial officers, which I find is general across the country, that they have been advised that their increase in salary is to be limited to 2 per cent. In view of the fact that in various parts of the country fear is now being expressed that in order to secure justice they will have to strike, will the minister reconsider this matter inasmuch as he and I and everyone else knows that a 2 per cent increase will not put these people in a fair and reasonable position?


Charles Mills (Bud) Drury: Mr. Speaker, proceedings in this particular case are now taking place before an arbitration tribunal.



WATER RESOURCES


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Acting Minister of Energy, Mines and Resources. It is related to the previous questions on natural resources. Is the United States Army Corps of Engineers in fact presently making surveys of waters in Northern Ontario to determine potential fresh water resources upon which the United States might draw?


Otto Emil Lang: I should believe not, Mr. Speaker, but I would certainly like to check for certain.



ECONOMIC COUNCIL


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, my question is directed to the President of the Treasury Board on the same important matter about which he was so brilliantly evasive the other day. Will he now advise if the austerity restrictions which would have the effect of reducing the secretariat of the Economic Council of Canada and preventing it from engaging outside consultants have been or are being lifted?
1904	COMMONS DEBATES	December 12, 1969
Inquiries of the Ministry


Charles Mills (Bud) Drury: Mr. Speaker, there are no restrictions imposed upon the Economic Council of Canada on the hiring of outside consultants other than an over-all budgetary ceiling, but within that budgetary ceiling the Council is free either to engage their own staff to accomplish their purposes or to engage outside consultants.


Heath Nelson Macquarrie: A supplementary question. Has this very important body suggested to the minister that because of these restrictions it is in fact not able to do an effective job?


Charles Mills (Bud) Drury: Almost every government
department has made similar representations, Mr. Speaker.



AIRPORTS


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is directed to the Minister of Transport. On November 21, as reported at page 1084 of Hansard, the minister, speaking of the loca'ion of the proposed new airport at or near Toronto, said that the provincial government had requested the federal government to refrain from any involvement with the municipalities. Mr. Robarts, the Prime Minister of Ontario, is reported this morning as having completely denied this statement.


Mr. Speaker:: Order, please. The hon.
member should come to his question as quickly as possible.


Francis Andrew Brewin: I am coming to the question, Mr. Speaker. Will the minister, in the statement he proposes to make to the House in this connection, explain this apparent contradiction?


Mr. Speaker:: Order, please.



BILINGUAL BONUS FOR PROTECTIVE SERVICE

Mr. Georges Valade (Sainle-Marie):: Mr. Speaker, in view of the fact that the holiday season is fast approaching, perhaps you will allow me to ask you a question since it is one of your responsibilities, as Speaker of the House-


Mr. Speaker:: Order. The hon. member knows that under Standing Orders, he cannot ask the Chair any questions. He must do so in writing.


Georges-J. Valade: Mr. Speaker, I would like to rephrase my question and, through you, put it to the minister in charge of the protective service in parliament.
Since, a few years ago, the employees of this service underwent examinations in order to be eligible for the bilingualism bonus, does the government intend to give them that bonus at last?


Donald Stovel Macdonald: Mr. Speaker, as I said a few months ago, we have considered the matter and decided that the employees mentioned by the hon. member must have the same status as other civil servants. Indeed, the premium is given only to the secretaries and the government is not ready at the present time to extend that measure to other members of the staff.


Georges-J. Valade: Mr. Speaker, could the minister tell the house why those employees were asked to sit for examinations on bilingualism?


Donald Stovel Macdonald: They were asked to do so at the same time as other civil servants.


Mr. Speaker:: Order, please. The hon.
member for Annapolis Valley.



COMPANY OF YOUNG CANADIANS


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, recognizing your wish to reduce supplementary questions I should like to ask the Prime Minister a question in three parts concerning the bill tabled in the House today to amend the Company of Young Canadians Act. First, wi h regard to the decision 1o appoint a comptroller with no time limit, does this not go against the committee report recommending trusteeship? Second, has a comptroller been chosen and, third, if so, who is he?


Pierre Elliott Trudeau: I should think, Mr. Speaker, this can be discussed when the bill is being debated.


John Patrick (Pat) Nowlan: Mr. Speaker, in view of the answer I have to ask a supplementary question. Is this the only legislation contemplated by the government affecting the Company of Young Canadians?

December 12, 1969


Donald Stovel Macdonald: Mr. Speaker, the other recommendations of the Standing Committee are now under consideration. It is important to emphasize that from the financial standpoint it is urgent that this particular matter receive attention and be disposed of by the House at an early date and, second, all of these questions can be fully debated on Monday next when this bill will be the first order of business.


John Patrick (Pat) Nowlan: Mr. Speaker, I have a supplementary question for the President of the Privy Council which I had not intended to ask because I thought my question was straightforward. Has a decision been taken on the recommendation of the committee that the CYC be placed under trusteeship?


Donald Stovel Macdonald: Mr. Speaker, the decision taken and announced by the government this morning is that there should be urgent arrangements to take financial control of the company. Other government decisions with respect to this matter will be announced in due course.



ESTABLISHMENT OF ROYAL COMMISSION ON SUBVERSION

Georges-J. Valade: Mr. Speaker, I have a supplementary question for the Prime Minister.
When he was asked the same question previously, his answer was that he was waiting for the committee report. As he has now received this report, I would like to ask him if he intends to accede to Mr. Saulnier's request that a Royal Commission be established to inquire into subversive activities in Canada.


Pierre Elliott Trudeau: Mr. Speaker, the committee has not recommended anything of the sort and the government does not intend to establish such a commission.



POST OFFICE


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. Would the Prime Minister state what he is 21545-501

Inquiries of the Ministry doing about the telegram he received from Vancouver charging that Post Office jobs there are being advertised at one rate for men and another lower rate for women?


Some hon. Members:: Shame!


Winona Grace MacInnis: A point of order, Mr. Speaker.


Mr. Speaker:: Order. The hon. member for Vancouver-Kingsway is rising on a point of order?


Winona Grace MacInnis: Yes, Mr. Speaker. I was sure when I asked my question of the Prime Minister that I detected an intention on his part to rise and come to the defence of women in a matter which is of great concern to them. I wonder whether, in Your Honour's anxiety about the passing of the question period, there was not a damper put on the Prime Minister rising at that time.


Pierre Elliott Trudeau: On the point of order, Mr. Speaker, it is true that I had the intention of rising, perhaps too slowly, but I did not know if there would be another part to the question. I was asked what I would do with the telegram. Well, I will read it and I will confer with the minister responsible. It will be a question for the Minister of Communications. I will discuss it with him. I personally would like to state that I would see no objective reason for this differential rate.


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: If there is any explanation-


Mr. Speaker:: Order, please. I think the point of order has been settled.



NATIONAL PARKS


Mr. Allen B. Sulaiycky (Rocky Mountain):: Mr. Speaker, may I direct a question to the Minister of Indian Affairs and Northern Development. As the tax increases which are being levied on the residents of Banff and Jasper are likely to have a severe impact on many people, is the minister prepared to consider a program of implementing these increases over a period of time?


Joseph Jacques Jean Chrétien: Mr;
December 12, 1969

Inquiries of the Ministry Speaker, I take due notice of the hon. member's recommendation.



FEDERAL-PROVINCIAL RELATIONS FEBRUARY CONFERENCE-ATTITUDE OF PROVINCES

Hon. George Hees (Prince Edward-Has-lings):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. In view of the response by the ten provincial premiers to questions put to them yesterday by the Canadian Press to the effect that they show no enthusiasm whatsoever for the conference which the government of Canada is to hold with them on February 16, is it the intention of the government to go ahead with the conference anyway and, if so, is it the intention of the Prime Minister to change this government's approach toward these federal-provincial conferences?


Pierre Elliott Trudeau: Mr. Speaker, when I wrote to the premiers last October I suggested then that the February conference should be held as the premiers had said that (hey had many things to discuss besides the constitution. I am somewhat surprised now to hear the hon. member say that the premiers are not interested in having this meeting. If such is the case, I can only ask myself why this is so as my suggestion was made as a result of their remarks.


George Harris Hees: If the Prime Minister would read the well publicized Canadian Press dispatch on this matter he would learn the answer. Further, does he not consider that less of a take it or leave it attitude by the government would encourage the premiers to be more attracted to this conference?


Mr. Speaker:: Order, please.



INDIAN AFFAIRS


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development. What action has the minister taken to deal with the problem brought to public attention by Mr. Paul McRae, principal of Sir Winston Churchill Collegiate in Fort William, that Indian students are being denied dental care because of red tape in dealing with the department in Ottawa?


Joseph Jacques Jean Chrétien: Mr. Speaker, medical services for Indians do not come under my department's jurisdiction, but I can assure the hon. member that I shall inform the Minister of National Health and Welfare about this problem.
If the responsibility of my department is brought into question in any way I shall take the necessary steps to cope with the situation.



INQUIRY AS TO LEGISLATION FOR PAYMENT ON FARM-STORED CROPS

[Stage Direction]
Mr. S, J. Korchinski (Mackenzie):	Mr. Speaker, I have a question for the minister responsible for the Canadian Wheat Board. In line with the thinking the minister expressed recently before the Alberta Farmers' Union in Edmonton when he indicated that steps need to be taken to increase producers' returns and also that transportation, storage and handling charges are part of the over-all costs, can we expect that he will be introducing legislation in the House to provide for payments on farm stored grain?
['I shall draw the matter to the attention of the Secretary of State, Mr. Speaker.']
Otto Emil Lang: Mr. Speaker, any decision in regard to a change in government policy would be announced in due course.



Mr. J. Edward Broadbent (Oshawa-Whitby):: My question is directed to the Prime Minister, Mr. Speaker. Since the announcement by the government of Greece this morning of its intention to withdraw from the Council of Europe indicates that it does not intend to democratize its regime, will the Prime Minister consider, at the earliest possible date, urging the expulsion of Greece from NATO?


Pierre Elliott Trudeau: I shall draw the matter to the attention of the Secretary of State, Mr. Speaker.



AGRICULTURE


Mr. H. W. Danforth (Kenl-Essex):: I should like to direct a question to the Minister of Agriculture. Since plans for next year's crop
December 12, 1969	COMMONS DEBATES	1907
production are now being formulated, can the minister indicate if there is any departmental doubt regarding the safe use of any other agricultural chemical and if an early statement will be made on this matter to the House?


Mr. Speaker:: I suggest the question can be accepted only to the extent that the member is asking the minister to make a statement.


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I do not intend to make a statement in the very near future because I do not know of any other chemicals the nature of which is so serious as to require examination by the House.
Inquiries of the Ministry understand is now theirs, will be provided to the federal government by the passing of enabling legislation?


Horace Andrew (Bud) Olson: No, Mr. Speaker. The provinces have not given an undertaking that they will delegate all of their jurisdiction, responsibility or authority to a national marketing agency. However, all the provinces have indicated support of the principle and concept of setting up a national marketing agency to better co-ordinate the functions of all of the provincial agencies so that the end result will be more in line with what the producers expect.



INQUIRY OF THE MINISTRY

Mr. Roberi Muir (Cape Brelon-The Sydneys):: Mr. Speaker, my question is for the President of the Treasury Board. Since he has so ruthlessly wielded his axe against veterans across the land, whose only crime was to serve their country, may I ask if he is giving the same consideration to reducing the evergrowing staff in the Privy Council office, particularly the army surrounding the Prime Minister?


Mr. Speaker:: Order, please.



NATIONAL DEFENCE


Mr. Craig Stewari (Marquette):: I wish to direct a question to the Minister of National Defence. Is the minister in a position to announce the new expanded role of Rivers air base? If not, when can we expect an announcement?


Mr. Speaker:: I think that question should be placed on the Order Paper or discussed at the time of adjournment.



AGRICULTURE


Mr. R. E. McKinley (Huron):: I wish to direct my question to the Minister of Agriculture. Because of the pressure being applied by many farm organizations and provincial marketing boards for the establishment of a national marketing board, has the minister received assurance from all the provinces of Canada that this field of jurisdiction, which I



APPROVAL OF DAMAGE CLAIM SUBMITTED BY SASKATCHEWAN

John Leroy Skoberg: My
question is directed to the President of the Treasury Board. Can the minister state whether the flood damage claims by the province of Saskatchewan have been finalized?


Charles Mills (Bud) Drury: Yes, Mr. Speaker.



AGRICULTURE


Richard Russell Southam: Mr. Speaker, I have a question for the Minister of Agriculture. In light of the recommendations made by the Saskatchewan Farm Union at its recent meeting in Saskatoon, will the government give consideration to including oilseeds under the crop insurance program?


Horace Andrew (Bud) Olson: Mr. Speaker, this question has been asked at least 50 times in the last two weeks.


Mr. Speaker:: Order, please.



CANADIAN CONSTITUTION


Hon. Theogene Ricard (Sainl-Hyacinlhe):: Mr. Speaker, I wish to direct a question to the Prime Minister.

December 12, 1969
Trust Companies Act
At the end of the last federal-provincial conference the premier of Manitoba, said, and I quote:
-the main obstacle to the constitutional review is the attitude of the federal government toward Quebec-


Mr. Speaker:: Order. Would the hon.
member ask his question? A member wishing to ask a question should not quote a statement made outside the House and use it as a basis for his question. The question should be asked directly.


J.-H.-Théogène Ricard: Mr. Speaker, I should like to ask the Prime Minister, in view of the differences of opinion that prevails, whether he is prepared to give his views on the filibustering practised by the federal government at the conference on the constitution.


Pierre Elliott Trudeau: I think, Mr. Speaker, that I should say there was no filibustering, but that the hon. member was referring to a statement by the premier of Manitoba which, if I am not mistaken, was tantamount to a request or a proposal to the effect that the province of Quebec might enjoy a particular status. If the hon. member is referring to that aspect of the premier's intervention, I could simply tell him that as far as he is concerned, he might have to claim a particular status for his province. As far as we Quebecers are concerned, we believe that we represent the people of Quebec in Ottawa as adequately as do members from any other province.



GOVERNMENT ORDERS


Hon. Herb Gray (for the Minister of Finance) moved: that Bill S-8, to amend the Trust Companies Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, this bill proposes to make certain amendments to the Trust Companies Act, the act which governs the activities of federally incorporated trust companies in Canada. There are nine such companies presently active, but they transact close to one-third of the trust company business in this country.
The amendments before us have four principal purposes:	First, to provide certain

expansions in the investment powers of trust companies; second, to establish a better and more flexible system of controlling companies if they should get into financial difficulty; third, to extend the prohibitions against investments and loans where there may be a conflict of interests and, fourth, to establish a letters patent system of incorporating companies and amending existing charters.
Dealing with investment powers, Mr. Speaker, a number of changes are proposed principally for the purpose of bringing the investment powers of trust companies into line with those of insurance companies as provided in amendments made in 1965. Pursuant to these changes, trust companies will be permitted to make mortgage loans on the security of leasehold as well as freehold real estate, to make investments outside Canada in any country in which they are doing business, to make investments in real estate for the production of income that qualifies on the basis of an earnings test and to make investments in real estate for the production of income in larger parcels than is presently permitted.
They would also be enabled to invest or lend guaranteed trust funds at their own discretion up to a maximum of 7 per cent of these funds. This corresponds to the so-called "basket" provision available to life insurance companies. At present, the power to make mortgage loans is subject to a restriction that the amount of any mortgage cannot exceed 75 per cent of the value of the real estate unless the excess is insured through a government agency. An amendment would permit mortgages to be made in excess of the 75 per cent limit if the excess is insured through a policy of mortgage insurance issued by a registered insurance company. Other changes would effect an expansion of investment powers in certain minor respects, bringing them into line with the powers of insurance companies.
Trust companies would be granted authority to own subsidiary companies in certain circumstances, subject to terms and conditions specified by the Governor in Council. They would be empowered to own and operate as subsidiaries, trust companies incorporated outside of Canada, companies incorporated to establish and operate a mutual investment fund, mortgage loan companies, or companies engaged in any activity reasonably ancillary to that of a trust company.
The existing requirement for a minimum statutory margin on collateral loans would be removed and companies would be able to
December 12, 1969

exercise their own discretion with respect to the margin of collateral over the amount of the loan.
The existing prohibitions against making loans to officers or directors would be expanded to prohibit loans to or investments by any major shareholder and also loans to or investments in any other corporation if a director, officer or major shareholder had a significant interest in that other corporation.
With respect to proposed revisions in the system of supervision and control of trust companies, the present act enables the minister to impose conditions or limitations in the licence of a company which is subject to annual renewal. The act also requires the superintendent to report to the minister if he considers that the assets of the company are insufficient to justify its continuation in business and the minister has the authority to suspend or cancel the licence of the company. It is now proposed that some flexibility be introduced to give certain states of control short of factual cancellation of the licence. The proposals are similar to those included in the proposed amendment to the Canadian and British Insurance Companies Act with which we will be dealing later.
[DOT] (12 noon)
They would require the Superintendent to report to the minister when he considers that a company is in weak financial condition, where it has exceeded its borrowing powers or where the assets in Canada are not sufficient to cover the liabilities in Canada. The minister could then take one or more of three steps: he could impose conditions in the company's licence; he could prescribe a time within which the company is to remedy the defect; or he could direct the Superintendent to take control of the company's assets.
In any ease where the Superintendent has control of a company's assets, the minister may request the Attorney General to apply to a Superior court for an order, or requiring the Superintendent to take control of a company for its rehabilitation, or he may request the Attorney General to apply for a court order to wind up the company under the Winding-up Act. The Superintendent would be empowered to assess other trust companies for the expenses involved in control of a company by him.
As further steps in the pattern of improved supervision and reporting, trust companies would be required to file quarterly statements to permit up-to-date information to be gathered as to their liquidity position, and also
Trust Companies Act
semi-annual statements showing the changes in investments and loans. A provision would be inserted requiring companies to maintain a liquidity reserve equal to 20 per cent of the guaranteed funds repayable on demand or repayable within 100 days. This reserve would have to be in the form of federal or provincial bonds or cash.
Now, we come to another important amendment. At present, trust companies are limited to accepting guaranteed trust funds which do not exceed in total 15 times their capital and surplus. The amendment would propose that this limit be raised to 20 times, subject to approval by the minister on specific application by a company. This amendment, like the one I have just mentioned in connection with the amount of mortgage a trust company can provide, will enable trust companies to make more money available for mortgage lending. An important part of trust company business is in the mortgage lending field-in lending . for housing purposes. The minister responsible for housing has told me the trust companies have been contacting him to stress the importance of approving these amendments if their mortgage lending is not to be curtailed, and if they are to be able to respond to the minister's request that they allocate more funds for lending for housing purposes.
At the present time, new federal trust companies may be incorporated only by special acts of Parliament and charters of existing companies can be amended only by an amending act. The amendments proposed would establish a new system of incorporating companies and amending existing charters. This would be by letters patent issued by the corporations branch of the Department of Consumer and Corporate Affairs, subject to the concurrence of the Minister of Finance. This would mean that in any application for a new charter the Superintendent of Insurance would investigate the matter just as he does now with respect to an application for a private bill. Notice of application for letters patent would be required to be published in the Canada Gazette in a way similar to that required now for the introduction of a private bill.
Existing charters, even those granted by special act of parliament, could be amended by letters patent under the proposals in the bill. Provincial companies seeking to change their status to that of federally incorporated companies would be enabled to do so pursuant to letters patent continuing the company as a federal company. However, the grant of letters patent for this latter purpose would be

December 12, 1969
Trust Companies Act
subject to the concurrence of the province of incorporation and to the enactment of appropriate provincial legislation, if necessary. These changes would simplify the system of granting charters and amendments to existing charters and would permit a more effective use of the limited parliamentary time available for legislative purposes. However, the same work of inspection would be done. A standard form of letters patent would be used but there would be sufficient flexibility to provide for special circumstances; charters could contain or could be amended to impose limits on voting rights or on share ownership, if desired by the incorporators of the shareholders.
At the present time, the initial capital for any new company is specified in its private bill and is considered by Parliament on an individual basis. The proposed change in the system of incorporation also specifies that before a company may be authorized to commence business it must have a minimum capital of at least $1 million.
The proposals concerning the change in method of incorporation are similar to those proposed for insurance companies and mortgage loan companies.
A number of other amendments are also proposed. Many of these are changes in wording or changes for the purpose of altering an administrative procedure. One of the principal items dealt with is a requirement that notice of any major transfer of stock must be given to the Superintendent of Insurance at least 30 days before the transfer is to be effected, together with full information concerning beneficial ownership. This would be required in respect of the transfer of a block of stock in excess of 10 per cent of the total and in the case of a transfer which would have the effect of changing control of the company. This would not constitute a veto power in the hands of the Superintendent or of the government, but would require full disclosure and prior notice.
Another amendment would limit the maximum age of eligibility to be elected as a director to 75 years with effect from 1972. This change parallels the change which was made in the Bank Act a few years ago. Also, three-quarters of the directors of a company would be required to be Canadian citizens resident in Canada rather than only a majority as at present. This also parallels the requirement in the Bank Act.
The existing provision enabling a company to issue share warrants would be repealed.

Share warrants in this sense refer to a certificate issued by the company enabling the holder to demand certain shares of stock from the company. It is not the same as a share purchase warrant as commonly used in references to security markets at the present time. No company issues these share warrants now, and it is considered that if the practice were to be used it would be such as to defeat the provisions in the Act limiting the non-resident ownership of shares. Some amendments are proposed for the purpose of clarification with respect to the present limitations on non-resident ownership and for the purpose of specifying that voting rights of nonresidents Eire preserved if they were acquired at a time when a company was exempt from the restrictions.
Some changes are proposed in the requirements with respect to auditing. These would specify the qualifications of an auditor, to bring them into line with the specifications in the Bank Act, and the Superintendent would be given power to expand the scope of the audit if he thought this action was necessary.
A number of other less important amendments effecting, principally, changes in wording are also proposed. Hon. members will find the bill even more extensive than the amendments I have described would appear to ini-cate, particularly with respect to investment powers. This is because, under the Trust Companies Act, investment and lending powers are dealt with in three separate places. The first deals with unguaranteed trust funds, the second with guaranteed trust funds, and the third with company's own funds, that is, its capital, surplus and retained earnings.
Changes Eire proposed to transfer certain responsibilities from Treasury Board to the minister in recognition of changes in the organization of government departments.
I would be pleased to attempt to respond to detailed questions when the bill is before the finance committee. I repeat, it is considered that its approval would assist in increasing the supply of funds available for mortgage lending, particularly for housing purposes, and increase the ability of federally incorporated trust companies generally to provide services to the public. I would, therefore, ask the support of the House for this bill.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, the nature of this measure, some 58 pages in length, inspires the somewhat technical character of the statement made by the minister. This bill, dealing as it does with
December 12, 1969

restrictions on lending at arm's length, the nature of shareholdings, and so on, can be deemed to be lawyers' law. As one wanders through the bill, it takes a great deal of ingenuity to follow the particular changes that are being made.
[DOT] (12:10 p.m.)
I would commend to hon. members for their edification the transcript of the proceedings in the other place, particularly the proceedings of Tuesday, November 18 during the presentation on second reading of the Hon. Senator John Connolly, as well as the earlier presentation on second reading by the Hon. Senator Paul Martin in May of this year.
We are dealing with a bill that has application to nine federally incorporated trust companies and ten provincially incorporated companies which are administered by the federal Superintendent of Insurance. Hon. members will note in the bill provisions to enable provincially incorporated companies to apply for incorporation under the new act by letters patent, providing there is satisfactory legislation in existence in the province in which a given trust company was originally incorporated.
As a trust company grows and wants to expand its business beyond the confines of its own province of origin, the tendency is for the company to seek federal incorporation. I think we in this House can be satisfied that the structure, examination and supervision of trust companies and insurance companies is such that the federal government system is much better than that which exists. I will not say in all provinces, but certainly in most provinces. In addition to this, as a result of the passage of the Deposit Insurance Corporation Act, it is now necessary for trust companies, certainly those that are federally incorporated, to possess a certificate of deposit insurance. Any company that would hope to do business on an openly competitive basis must have such certificate.
The minister has indicated there are many amendments to the act for the purpose of bringing trust companies in line with, or in parallel relationship with, the provisions of the Bank Act since trust companies are acting in so many ways as near banks. The other day I had occasion to complain in committee, as well as in the House, about the amendments to the Small Businesses Loans Act and the Canada Student Loans Act, which included under the term "bank" certain caisses
Trust Companies Act
populaires, trust companies, and other institutions that were carrying on some functions of banking.
I say we are approaching this question through the back door. We are gathering together a conglomerate of various financial institutions that are all related to banking or to some function of banking. I commend to hon. members the remarks I made before the banking and commerce committee at the time of the revisions to the Bank Act. I feel experience since that time has confirmed my view that we should have a general Bank Act, some of the provisions thereof dealing with the chartered banks, others with trust companies, and still others with caisses populaires. Anyone who wanted to deal with the business of banking would have to conform to the act.
If this were done we would then be able to do away with varying standards of inspection, with turning over to the Superintendent of Insurance, who is not a banker, the examination of institutions that were carrying on the functions of banking. To me, this whole matter should be brought under the one roof. I do not accept for one moment the suggestion that because trust companies and others involved in the business of banking hold a provincial charter, consent of the provinces is necessary; that the provinces have the right to sneak, through a crack in the door, into the business of banking which, under the constitution, is excusively within federal jurisdiction.
In the same way, one could say that because a small company that owned aircraft was incorporated in a province, that province would have the right to set regulations governing the operation of those aircraft. We know, of course, that this sort of thing does not happen, that no provincial government would be silly enough to try such a thing. But for some reason or other, simply because trust companies are incorporated within a province, it has been alleged that even though they are carrying on banking functions they must be supervised by the province. That is: u'ter nonsense. If such companies engage in the business of money and banking, then they must come within federal jurisdiction, which is as it should be.
I repeat that ultimately we must have a general Bank Act, a sort of omnibus act that would embrace all of the matters before us, and so that there would be no restrictions on loans by trust companies. I hope that I have made my point, but I intend to come back to it at every possible occasion. In this regard I

December 12, 1969
Trust Companies Act
commend the words of the Hon. Senator Jacques Flynn, pronounced on November 18. Speaking of the province of Quebec, he indicated that as trust companies in the province become stronger and wish to operate outside provincial borders, there will be a tendency now to apply for federal registry. Not that there is any reflection on the operations carried on within that particular province; it is merely a case of their having done good business and wanting to expand abroad, as they should. In order to do so, of course, they must come under the federal act.
As the minister has indicated, the amendments to the act fall into four main groups. First of all, there is to be an expansion in the investment powers of trust companies so as to give them more flexibility. The second group of amendments relate to those who wish to move into the banking field but will run afoul of restrictions, as a result of which we had so many non-arm's length transactions. I am sure that the Superintendent of Insurance and the Superintendent of Banking, in their respective capacities within the Deposit Insurance Corporation, have run into interlocking transactions between trust and loan companies where loans are made not necessarily to directors or officers but to major shareholders. There are also the institutions sometimes referred to as "downstream companies". I think that the provisions that will be incorporated in the act will eliminate a great deal of such abuse.
[DOT] (12:20 p.m.)
The only thing I am concerned about here is why a substantial interest is determined to be 50 per cent more. It seems to me that in many corporate organizations a shareholding of 50 per cent, less than 50 per cent, say even 35 per cent is a substantial interest. Surely, this would be the dominant interest. Certainly, if the shareholdings are public, an individual holding 35 per cent could have a stranglehold on the company. I hope that the Superintendent of Insurance and others, including the minister, will explain to me the rationale regarding the choice of 50 per cent as the shareholding figure in determining what is a substantial interest. There may be valid reasons, but I require some very serious explanation as to why that figure was picked. I could not agree more with the general principle of restriction but I do not understand the 50 per cent figure.

The third group of amendments deals with improved supervision. These are for the better. At the moment, qui e frankly, you almost have to use a blunderbuss to control a trust company. The regulations are not flexible enough. As a matter of fact, all the damage has been done before the Superintendent of Insurance and the minister to whom he reports can take effective action for the protection of not only those who have deposit certificates but those who may have shareholdings. They, too, must be protected.
I am sure the Superintendent of Insurance, in his capacity as one interested in deposit insurance corporations, can determine whether the operating conditions, the lending portfolio and other th.ngs are satisfactory or whether the company has exceeded its borrowing powers or has sufficient assets to cover liabilities in Canada. He is in a position to know whether there has been any transgression or whether the conditions are satisfactory. He can report any unsatisfactory condition immediately to the minister. The minister may then impose a time limit within which a company must remedy the defect. He may impose conditions on the company's licence. What is still better, and this is a real sanction, he can take control of the assets to preserve them.
We have witnessed some rather tragic occurrences. After the individuals concerned became aware that interest was being evinced in the operations, they immediately noted that the assets were being withdrawn and put beyond the reach of creditors. Then, of course, there is a final sanction regard ng the windup. While some people may complain about having to report to the Government on a quarterly basis, I think this requirement is good. Banks have to make regular statements at frequent intervals. This regulation just puts trust companies on the same basis as banks. This is another reason for having a general banking statute.
We also notice an improvement in liquid reserve requirements. These companies must have 20 per cent in so-called guaranteed funds. These funds must be guaranteed as to interest. At the present time, there is not guarantee by trust companies in respect of deposit funds. They are only guaranteed as to interest. Unfortunately, the terminology in respect of guaranteed deposits is confusing. All these companies do is guarantee the interest. There is no guarantee in respect of deposits.
December 12, 1969

I should like to talk to some of the officials of trust companies about their advertisements in this regard. This morning I heard one advertisement which absolutely guaranteed deposits at 8f per cent. That is not right. All they do is guarantee ultimately to pay 8} per cent on the deposit. In any event, it is an improvement because of the changing nature of the business, and particularly since trust companies are not paying interest rates well in excess of 8 per cent. I think some offer 9 per cent on a one year certificate.
One may say that this is excessively high on a one year deposit, but the Government of Canada is prepared to pay over 8 per cent on instant money in the form of Canada savings bonds. A $100 Canada Savings Bond is the same or equivalent to a $100 bill you might carry in your wallet, yet you have the advantage of getting 8 per cent on the saving bond as long as you hold it. These facts are really beyond reasonable explanation. In any event, if the federal government is prepared to pay that kind of interest on Canada Savings Bonds we cannot expect anything less of trust companies.
Immediately following the last issue of Canada Savings Bonds, some trust companies in Toronto actually offered to pay 9.99 per cent interest on a five year certificate based on a cumulative formula. If they can pay 10 per cent for this money, at what percentage are they lending it? Remember that this is five year, medium term money. These companies certainly must lend it at something like 14 per cent or 15 per cent in order to even pay their expenses and a proper return to the shareholders.
Another good feature is the 30 day notice of transfers of shares equal to 10 per cent of the total or what is effective control of the company. We will require a little more precision as to what the Superintendent of Insurance will consider to be effective control of a company. I certainly hope this will not be equated with substantial interest, in other words, the 50 per cent.
The amendments in the fourth group relate to incorporation. These changes do not eliminate the possibility of trust companies coming to Parliament. They give trust companies the alternative of going through the registrar of companies office under letters patent but only under certain conditions. This is not a carte blanche provision. We all know that federal incorporated trust companies, instead of having capitalization of $250,000 as is now the case, will have to have $1,000,000. While this
Trust Companies Act
allows for an inflation factor, it will in effect separate the men from the boys. People who can come up with $1 million are going to be far more serious and much better organized in order to, first of all, acquire the $1 million.
[DOT] (12:30 p.m.)
The provision in respect of directors not being eligible beyond age 75 conforms with the Bank Act. Another provision parallel to the Bank Act is that provision requiring that | of the directors shall be Canadian citizens as opposed to a bare majority. This is all to the good. We also have restrictions in respect of non-resident owned shares for an individual being 10 per cent and for a group 25 per cent. This is on the same basis as banks. There is a non-retroactive feature. I do not think you can penalize any person who now holds more than a 10 per cent interest in a trust company. Of course, anything that individual acquires hereafter will be affected by the non-voting rights provision.
The one thing I should like to see is a provision that there shall be no resurrection of dormant charters. We think this has led to a great deal of abuse in some of the provincial jurisdictions where trust companies had been organized literally on two sheets of paper back in the 1910's and 1920's. Some of them had not even operated, but the charters were there. They really should have been stricken off, but they were still there. In some cases they were bought for less than $100. In some cases some firm of solicitors held on to a charter. Then, amendments were made to bring these charters up to date and these companies were in business. It was all very nice, but no longer will this apply.


Mr. Blair:: Mr. Speaker, would the hon. member permit a question?


Marcel Joseph Aimé Lambert: Yes.


Duncan Gordon Blair: I am sure he did not intend it to be inferred that this had happened in respect of any federal company. I assume his reference to dormant charters being resurrected does not apply to companies under federal jurisdiction.


Marcel Joseph Aimé Lambert: No; I am
not aware of any federal charters being picked up in that way. Certainly, of the nine federal charters now in existence, none were picked up in this way. But these amendments are to apply to the future. Certainly, they will apply to any provincial companies which desire to come under federal jurisdic-

December 12, 1969
Trust Companies Act
tion. This may be a far-reaching operation. I think perhaps if I found a dormant provincial charter and wanted to resurrect it I could work out something. If there were enabling legislation on a general basis. I would then transfer that charter to the federal field. I think the road would be open. In any event, I hope this amendment will effectively bar that type of operation.
There are other matters which could be mentioned in respect of this bill. As I said earlier, a lot of it is lawyer's law. This is what could be called a committee bill. It may be instructive to note that the representatives of the Trust Companies Association of Canada were present at the committee hearings in the other place and were satisfied with the proposed amendments, many of which incidentally impose considerable restrictions.
Others may talk about the business of allowing an increase from 15 per cent to 20 per cent at times of capitalization. But this is subject to approval by the Governor in Council under certain conditions; it is not just a matter of automatically qualifying for this increase. We will want to know the general nature of the regulations which may be passed by the Governor in Council to cover that precise condition. On the question of owning a subsidiary in or out of Canada, subject to regulation of course, I would think myself that this is quite right. If a Canadian trust company has a subsidiary abroad it must have power to invest abroad because the country of residence of the subsidiary will impose restrictions on investment. It will insist that there be investments within that jurisdiction equal to the liabilities of the trust company subsidiary within that jurisdiction. We in Canada insist upon it and therefore must expect reciprocity. In any event, there is an absolute minimum yardstick that there must be sufficient reserves within Canada, investments in Canada, to cover Canadian liabilities.
As I said, we will want to ask more questions in committee concerning the detail. I am sure we will receive this detail. I have examined the total record in the other place and, with its exceptions of some of the features I have mentioned, I personally am satisfied that the amendments to this act are a step forward. I still maintain the general caveat I entered at the very beginning, that it seems to me we must now be giving thought, when we come to the next revision of the Bank Act some years hence, to finding ways and means to bring all banking and quasi banking institutions under the one umbrella.


Mr. Max Salisman (Waierloo):: Mr. Speaker, my honourable and learned friend from Edmonton West has indicated he is satisfied with the amendments to this bill. I am far from satisfied. I think there is a great deal wrong with this bill. It will have to be examined very carefully in committee. The financial institutions of this country have an overwhelmingly important role to play in the economic life of this country. The complexity of the law regulating them, as well as their awesome economic power, ought to inspire urgent and critical attention. We intend to give this attention. We do not intend to be panicked by the type of statement made by the minister earlier in the debate which was a reflection of the statement made by the House leader, affectionately known as "Mac the Knife". The contempt for Parliament indicated in the statement the House leader made the other day was matched only by his economic ignorance and his heavy-handed blackmailing tactics. He is much too transparent. We cannot understand the urgency in rushing these measures through. We do not believe the reasons given form an adequate background.
In looking at this legislation we find, first of all, that there is absolutely no control over which area of the economy will get the money as a result of enlarging the lending power of the trust companies. There is absolutely no control. We do not believe, as has been stated by the minister and by the House leader before him, that this will add one single cent of mortgage money for the people who need housing in this country. I hope at some time the minister will demonstrate how he intends to do this. Ah we are being asked to do is transfer funds from the one institution to another. The pool of savings that exists in this country, whatever it may be at any given time, will not be increased one iota by changing these regulations and increasing the authority and lending power of the trust companies. Quite the contrary. The effect of the legislation may be to dry up mortgage money. I think this should be pointed out, because in this legislation we are giving more freedom to the trust companies to make investments, including commercial loans. Trust companies have not made such loans before.
What assurance exists within this legislation that these companies will not switch to commercial loans in order to make more profit than they would from mortgages. There is no guarantee in this legislation to that
December 12, 1969

effect. The making of commercial loans would be contrary to the present practices of the trust companies, and would be a completely new and lucrative field for them. The other point is that trust companies could now have subsidiaries and this would enable them to have a substantial equity in properties for which they were providing mortgage money. Apartment buildings, commercial properties and shopping centres would be involved, but not housing. Such a provision would allow trust companies to say they want a piece of the action and that if they do not get it they will not invest. This is what this legislation provides. Yet, we are told it will provide more mortgage money and therefore we, the terrible people in the opposition, must not hold up his legislation. What kind of nonsense is propagated in that statement!
Let us look at some of the other powers that would be given to the trust companies. This bill would enable them to become involved in the real estate development business in partnership with other companies. They could own real estate, thus becoming investors in their own right. They would no longer have to lend money on mortgages but the return they would get from their mortgage operations would permit them to become investors. They could even have a subsidiary to operate mutual funds. Does the minister really mean that these altruistic financial institutions, when faced with the opportunity of making more money in commercial loans and other investments, will make more money available for housing, particularly when there is no clause in this legislation which says they must do that.
[DOT] (12:40 p.m.)
They are being given complete freedom to operate as they wish. As if that were not enough, they can now go into foreign operations and invest outside the country, which they have not been able to do freely up to now. It does not seem possible that this legislation will result in the provision of more mortgage money in Canada when trust companies will be able to make more lucrative investments in other countries. They will then say "we can make a higher rate of return in another country, so let us raise the interest rates here". It does not make any difference how useful that investment in a foreign country may be or what the priorities of the Canadian economy may be. There are profitable opportunities outside this country and that is where investments will be made and
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the money will go. This is what this legislation is designed to encourage. So, let us be fair about this. Let us not say that the opposition, by holding up this legislation-if they intend to hold it up, which we do not intend to do-is going to hurt the people who need money for mortgages.
The other issue is that if money for mortgages were made available, what assurances exist within this legislation that that money will go to the people of this country who need housing in the worst possible way? There has been no assurance in the past and there is no assurance in this legislation. If anything, this legislation almost guarantees that the situation will be worse rather than better for those in the lower income categories who need housing. There is no shortage of mortgage money for people who can afford to pay the present interest rates or who have the necessary collateral. The problem in housing in this country is that those who need it desperately are the ones who are least able to get it, and this legislation will not change this shameful situation.
We have heard these arguments before when listening to statements from the government. They are repeated over and over again like an old record that has been brought out. The government has just scratched out a few dates and perhaps changed the title, but we heard it all before when the Bank Act was being debated. They said to us, "take off the ceiling and remove the restrictions on the banks. We need competition in this country, and competition will act to further the interests of the average Canadian". Has it done so? It certainly has not. We now have the highest interest rate in Canadian history. Surely, the Bank Act changes enabled the banks to become more competitive with the trust companies and other financial institutions. Now, the trust companies say to us "take all the restrictions off us, too, so we can compete with the banks and so we can go after the same business". So, you have them competing with each other in this particular area, but that is senseless and does not help the people of this country.
The same arguments that we heard about giving the banks freedom we are now hearing about giving trust companies freedom. But whom will it help? I submit that it will not help the people of Canada but only a small group of people who seek an opportunity to make higher profits for their institutions. It will help the trust companies, of course, but is this why we are here? Are we here to help

December 12, 1969
Trust Companies Act
trust companies, banks and financial institutions, or are we here to concern ourselves with what happens to the people in this country? I suspect that the people who are not in trust companies, insurance companies or mortgage companies are in the majority, and it strikes me that in a democracy the majority has some rights. We are not here to provide special advantages to financial institutions, but essentially that is what this legislation does. We are being asked to participate in a senseless game, played by strong men in an arena called the market place, which has no more effect on the future prosperity of this country than did the struggle between gladiators in the Roman Colosseum. It is a little game, and when we are restricting it we are told that we are restricting freedom.
We must not prevent the strong men from playing this game, regardless of the consequences to the country. It is their right to play this game, regardless of what it does to the ordinary people who are not the slightest bit interested in this nonsense. If they want to play games let them do it at their own expense, not at the expense of the people of this country. In another age these gentlemen might have been called adventurers, freebooters or buccaneers. They would have sailed wi.h Drake on the Spanish Main to rob Spanish galleons. I suggest that the conflict between the banks, the trust companies and the finance companies does not contribute to the wealth of this nation any more than the conflict between Drake and the Spaniards. It did not matter whether Drake took from the Spanish galleons or the Spaniards took from Drake. This did not contribute to increasing productivity and the goods and services needed by the people. It is merely a transfer of resources from one private pocket to another, and we are being asked to be a party to this.
This debate is very important because we are being asked to take a decisive step. We are asked to give the government the power to incorporate trust companies by letters patent, so then, these matters would no longer be debated during private members' hour. I know there are many who will say that the private members' hour was a farce; that we held up these great captains of industry and we questioned them. What right had a few members to hold up these giants of our society, these people with millions of dollars of assets? But at least we had a look at their proposals, whatever the faults may have been

with the private members' hour. I am not suggesting that we go back to that method, but at least there should be someone in this Parliament who will examine what is happening to the financial institutions of the nation. Often we were effective in bringing about some necessary and useful changes, and in focussing public attention and changing public opinion regarding the conduct of many of these institutions. This will no longer be the prerogative of parliament. It is left to the discretion of the minister to authorize the formation of these companies. The minister will determine their lending powers and at one fell swoop, at the minister's discretion, they will increase by 33 per cent their ability to make loans or take in assets. The minister has a great power, and there is nothing in the previous behaviour of this government to indicate that this power will be exercised wisely or in the public interest. We need something better than that.
* (12:50 p.m.)
We are not prepared to see this legislation pass through the House without obtaining some assurances that the people of Canada will have some say in how these financial institutions are handled. There is a critical question here as to whether the future of our society is to be decided by the scramble for booty in the vain hope that while these strong men are scrambling for profits, playing a game, flying back and forth in their aeroplanes, wining and dining each other, making deals and deciding they are going to amalgamate here, close down there and turn around elsewhere, somehow or other the public is going to benefit. It is just not true. It is part of the mythology that a small percentage of our population has been able to spread in our society through its use of organizations in which it has power, the newspapers, and through the governments in which it traditionally has had friends. But the people have not benefited from these activities. Therefore we are going to propose that certain changes be made in this legislation.
The first change we propose is that Trust Companies be brought under the Bank Act. In this regard, I agree with the hon. member for Edmonton West (Mr. Lambert), but perhaps for other reasons. It is unthinkable that they should not be under the Bank Act, as recommended by the Porter Commission. What is strange is that, while the government has accepted those recommendations of the Porter Commission which provide advantages and
December 12, 1969

benefits to the trust companies, it has not accepted the recommendations which ensure the responsiveness of these institutions to public policy and control. Mr. Speaker, you cannot take just one part of an equation. Both parts are involved.
Our other concern is to see that the Bank of Canada, on the advice of the government, will have some say in how the money collected by these institutions will be used. As inadequate as our banks are in our present society in terms of their responsiveness to public policy, at least they are far more responsive than are the other financial institutions. At present the banks have some 15 per cent of their deposit creating facilities directed by the government of Canada. This means that through public policy we are able to see that there are some funds for student loans, that there are funds for farmers and funds for businessmen. At least something is being done.
There is absolutely nothing in this proposed legislation which would indicate that the trust companies have to respond in some way. It is absolutely imperative that before this legislation is passed an amendment be made indicating quite clearly that a percentage of the funds collected by trust companies shall be allocated according to public priorities. It is intolerable that it should be otherwise.
It is particularly galling when one listens to these giants of the financial institutions coming before House of Commons committees decrying public expenditures and calling for belt tightening. The governments always have to tighten their belts. But even using their own figures, that governments at all levels account for only one-third of the gross national product, what about the other two-thirds? What about the private sector? What about priorities out there? After all, the government has established some kind of priorities.
The public does have a say in government policy to some extent. We have an opportunity of saying in this House that the money should be spent here or there. This is what debate is all about. This is why we have parties. This why we meet and talk to each other. But what happens out in the private sector? Where is the belt tightening out there? Where are the restrictions out there? Where is the sense of obligation to the nation out there? There is none, and there cannot be any unless we insist upon it. An absolute minimum condition in any legislation is that these institutions be responsive to national
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interests and national purposes, and therefore a percentage of the loans they make should be subject to public direction.
We have to go beyond that, Mr. Speaker, and make sure that Ihe spread between what financial institutions pay for money and what they charge for money is subject to some kind of regulation. We know that imposing a ceiling does not work. It could work if the government insisted on it, but it has never insisted on it. There is difficulty imposing a ceiling on what banks can pay to depositors, but we do know we can regulate, if we will, the profit margin between what they pay to depositors and what they charge borrowers.
If we did that, the depositor would benefit enormously. There is no reason why he should not be receiving as much as he is receiving now, and those who lend money may also benefit because they may be able to get their money for something less than they are obtaining it now.
We know we have to go in*o some kind of incomes policy. We know that the government's programs and attempts to control inflation have proven worthless, and that we will have to move in new direc ions. This is one of the significant areas into which we must move. Let us be very, very clear about this. No section of the economy, whether it is industry with its prices or labour with its wages, will accept restraint when the financial institutions are free to do exactly as they please, free to make as much money as they please, free to charge whatever the traffic will bear.
If we are to talk about an incomes policy and be honest about it, instead of blaming labour because it refuses to go along with phoney suggestions, we should start right here with this legislation. No part of our economy contributes more to rising costs and inflationary psychology than do the financial institutions of Canada. An incomes policy has to start at the beginning, and this is the beginning. Therefore, Mr. Speaker, we see this as important legislation.
We can understand that some of the proposed minor changes, bookkeeping changes, are necessary. But we do not see this just as lawyers' law. It is far more than lawyers' law; it should be people's law. It is not just the investors or the people who borrow from trust companies, or the people who lend money to trust companies who are concerned. There is a thing called the public interest and it is that which has to be guaranteed in the legislation before us. At the

December 12, 1969
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moment there is very little in this legislation to indicate the public interest has really been considered. Sure, it can be called lawyers' law, but we are not satisfied with that. We are all involved. Mr. Speaker, may I call it one o'clock.


Mr. Deputy Speaker:: It being one o'clock I do now leave the Chair until 2 p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Max Saltsman: Mr. Speaker, I should like to sum up the main points of our criticism. First of all, contrary to what the House Leader said, there is no panic for this legislation. The passage of this legislation will not increase the total amount of mortgage funds available for housing and, to the extent that the trust companies increase their mortgage lending, it means a decrease in some other sector of the economy. With the enlarged powers of investment being given to the trust companies, the only possible method of increasing mortgage funds would be to charge higher interest rates than now prevail. Although mortgage funds are available now, they will have to compete with investments giving higher returns, such as consumer loans, foreign investments, equity and property in industry.
The passage of the legislation as it stands now would make it even more difficult for public bodies, municipal, federal or provincial, to attract funds because they will have to compete with the enlarged investment opportunities being given to the loan companies. All public attempts will be frustrated or, if not, we will have to pay higher rates of interest to attract funds for public purposes.
There is no indication from the government, and there certainly is nothing in this legislation, to indicate that it will meet the urgent problems of our society. The public needs, as I pointed out earlier, would be frustrated rather than enhanced, as would the need for housing for low income families. This bill will not help attain these goals.
As the legislation now stands, Mr. Speaker, it is unacceptable to this party. It will be our endeavour to see that it is corrected to benefit the people of this country rather than a small group of stockholders who stand to gain enormously from its passage.


Henry P. Latulippe: Mr. Speaker, I should like to say a few words on Bill S-8 under consideration.
This bill is like any other one vesting in financial institutions undue powers which are not likely to help us solve our problem since it is of an economic nature. The economy does not operate properly because it cannot finance itself.
Our economic problems are not tied in with loans, since, from the beginning of Confederation, Canadians have borrowed money to such an extent that they cannot pay the interest any longer and these new institutions will lend money to other institutions to enable them to pay the interest on their indebtedness. That will not solve the problem of interest rates which not only are too high but are a bare-faced exploitation of the population. Moreover, as mentioned by the hon. member from the New Democratic party, it will not add a penny to money in circulation. If there is not enough money in circulation and if reimbursements exceed credit, there can never be any money in circulation.
What we do have now is a high cost of living and tight money problem. The new institutions being established are to lend funds collected through new bond issues since even if they do not issue money as credit banks do, they will be empowered to issue bonds, which is even worse than bank issues of money. For each dollar deposit, the banks grant $96 in credit, whereas the bonds issued by the trust companies have no more value than the credit extended by the banks.
When bonds are floated, they are guaranteed by the stocks or the assets of the borrowers.
Bonds have been and are still being issued. In this connection, I will quote from an article in last December 12 issue of La Presse. In fact, here is how the article reads:
In these days of high living costs and, we might add, exorbitant spending (in spite of requests for restraint), individuals-and perhaps even more so -municipalities are liable to run excessively into debt. They have not failed to do so, particularly during the last decade or so, to wit the unhappy results published in this paper yesterday under the heading "towns of Quebec collectively on the verge of a financial dead-lock".
In order to pin down the subject without changing the author's concept, we quote the first few lines of Florian Bernard's article: "The municipalities of Quebec are going into debt at an alarming rate. Only the very wise could say whether this is a sign of progress or recession. One thing is certain: Quebecers are now virtually up to their necks in debt."
December 12, 1969

Here is a sample of eloquent statistics: "The net funded debt of Quebec's 1,652 municipalities has just reached $2,083 million at the end of this fiscal year. Since it stood at $1,886 million last year, it shot up by $102 million in only twelve months. This rate of increase in municipal indebtedness has been constant in the last ten years or so, and if the present trend continues our indebtedness will (unfortunately) top the $3 billion mark within two or three years. In only ten years, from 1957 to 1967, the total debt of the 1,652 municipalities in Quebec increased from $625 million to $2,083 million..." It has therefore tripled. Obviously the same applies to the per capita debt of the Quebecer which has climbed to $355 from $113 in eight years.
That is the debt of the Quebec municipalities alone. The debt of the school boards is three times greater. Now to settle the problem, we will allow various financial institutions to lend money at any rate they wish. They will demand interest rates of 15, 20 per cent, but it does not matter. It is alleged that this will solve the problem, but there does not seem to be any solution.
I do not object to many institutions lending money, provided there is control, however, and the interest rate does not remain unchecked.
I have here another newspaper article entitled: "More than $318 million in bonds in November". It reads as follows:
The bond issues to finance the various levels of government and the companies in Canada have reached a total of $318,390,043 last month.
Excluding the Canada savings bonds, the amount of which is not yet available for 1969, this figure compares with $131,249,864 in November 1968. The Canada savings bond sold in November 1968 amounted to $3,125,000,000.
For the first eleven months of this year, the bond issues totalled $4,399,479,079, compared to $7,898,272,174 for the same period in 1968.
[DOT] (2:10 p.m.)
The government of Canada has not issued any bonds maturing in three years or more, in the last month. However, for the first eleven months of the year, this amounted to $1,115 million, as compared with $5,162,500 for the same period last year.
With regard to provincial governments, their direct and guaranteed financing by way of bonds has reached $188,750,000 last month, as compared with $85 million in November 1968.
The most important provincial issues have been for $50 million by the Ontario Hydro and the Quebec government; $50 million (American) by Manitoba and $35 million by Nova Scotia. Provincial loans on that market, since the beginning of the year, amount to $1,460,577,200 as compared to $1,375,700,000 from January to November 1968.
On the other hand, municipalities have borrowed in the same way $73,690,043 last month as compared with $40,149,824 in November 1968.
Bonds have therefore been issued at prohibitive rates of interest. When they are
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bought back by banks all at the same time, new deposits are created thus. Indeed, to make use of the power they have to create new credit, banks need only pen and ink. It is all it costs them.
On the other hand, people are more and more concerned. They are no longer able to get out of this stagnation. The depth of the precipice is such that there is, indeed, no hope of getting out. We cannot break surface and get over the precipice.
If we carry on in this way, what solution shall we find? How will people be able to keep paying taxes? Everything they have built is already taken away from them!
As we produce goods, we get into greater debt. There is no reason for that. All trust companies, insurance companies and exploiters of the people should be brought around. We do not advocate the socialization of institutions but we want them to be reasonable with regard to their loans. Exploiters must cease to skin the population the way they do. The responsibility does not lie in the hands of the institutions but in those of members of parliament and of the government administration. They have the power to create and increase credit. It is a sovereign right that belongs to the state. Therefore, Canada must avail itself of its sovereignty concerning the creation and issue of new credit. It should finance public funds without charging interests.
Is it still possible to continue to finance municipalities and school boards on the verge of bankruptcy which must borrow at the new excessive interest rates to pay another loan raised five or ten years ago?
If a municipality or a school board is compelled to repay bonds issued ten years ago at 5 per cent and now due, even if the collection of taxes has not been sufficient to make the repayment, it now has to raise some new loans to repay those bonds.
If those bonds were issued at 5 per cent, the interest would amount to $50,000 per million dollars. With the new rate of 8 per cent, the interest would amount to $80,000 per million dollars. If municipalities and school boards are unable to pay a 5 per cent interest, how will they manage to pay 10 or 15 per cent to the same person?
We should be striving to solve the problems instead of making them worse. What we are doing is applying a poultice to a wooden leg, and this will merely allow institutions to get rich at the expense of the taxpayers, to sink them deeper, to deprive them of their money

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and to drive them more quickly to bankruptcy. That is what is in store for us and for municipalities, school boards and private enterprises.
We would be surprised at the amount of indebtedness of private institutions. It is impossible to tolerate any longer such a system. We must say it again and again, because we are here to try to solve problems, to protect the people, to set up a sound system in order to finance our production and to prevent exploitation of the people.
The proposed improvements will only create difficulties, deprive the taxpayers even more and discourage the people who are already disheartened enough.
In fact, people do not even want to work any longer, or have to work for the government.
When plant workers are asked to work overtime, they refuse, because the additional income they thus make is whittled away by income tax. The result is that production dwindles instead of rising.
Hon. members should consider more carefully these corporate structures with a view to making them institutions that will serve the government, of which we all are shareholders. The government makes profits, which are distributed among a few individuals, while others are overtaxed, and as production increases, the holdings of Canada, of financial ins itutions and of individuals also increase.
Those holdings are transferred to the assets of financial institutions and all the bodies who built the country are entered as liabilities, and they are hopelessly sunk.
In conclusion, I should like to point out that the hon. member of the New Democratic party is right but only in a proportion of 60 per cent, because we do not want to socialize everything as he does. We, of the Ralliement creditiste, wish to keep private enterprises as healthy as possible. However, we do not want those institutions to exploit but rather to serve people.
Credit should be a state-controlled affair. Instead of having different institutions issuing bonds to municipalities, the government, through its own bank, should issue such credit, at a depreciation rate of 5 per cent and perhaps 1 per cent for administration costs, which would bring the interest rate to 6 per cent instead of 10, 15 or 20 per cent, and would allow municipalities, school boards, private institutions, manufacturers and all those in need of capital to get themselves out of a hole.

Private institutions, as well as banks, trust companies and insurance companies, should manage to lend only the capital in circulation. They would not be allowed to isssue bonds, to grant credits or make capital available.
All we want is to socialize the creation of credit, but the allocation of credit by financial institutions could be carried out in the manner used by credit unions.
To play with credit, to make loans at one's own discretion to both private and public institu ions would come under the state's responsibility, for it alone is in a position to finance our public institutions. Thus we would ensure a greater purchasing power for the taxpayers, since public institutions would stop depriving private institutions of their assets. In fact, they are robbed of their right to live, to act, to produce and to expand.
[DOT] (2:20 p.m.)


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, most of the amendments suggested to the Trust Companies Act appear to be designed to strengthen those corporations and provide additional protection to investors and the public. I can see little to criticize in their intent, except perhaps that they do not go far enough.
My chief concern is with clauses which it is claimed will set more funds flowing into the mortgage market and thus stimulate home building. Again, this is a worthy objective, but the proposal may well be only an empty gesture. Similar amendments proposed to the Trust Companies Act and the Loan Companies Act fall in the same category. It is obvious that the reason the government is rushing in now with these amendments is that it has given up any hope of controlling run-away interest rates and is unable to fulfil its bold promise of dramatic advances in home building.
These amendments to the various insurance, trust and loan company acts are an inadequate answer to the Canadian housing crisis. They constitute a confession of failure on the part of the government to fulfil its promises and to find a sound, long-range policy for providing the number of housing units needed annually by our expanding society.
I believe the government has acted in panic and has been stampeded into grasping at the first straw in sight. A little forethought, a little foresight, would surely have shown that just because legislation is brought in permitting the various types of loan companies to expand their investments in mortgages, these
December 12, 1969

companies will not necessarily leap into the mortgage market with vast sums in new investment dollars. It is a case of leading a horse to water and finding oneself unable to make it drink. If insurance companies can make better, more lucrative and shorter term investments than mortgages from their small pool of investment money, they will make them where it is most profitable, government permission or not.
The fact that an act of Parliament permits trust companies to invest in mortgages on an extended basis is no guarantee that they will do so. Apparently the government hopes that these amendments will increase the funds available to the residential building field. I believe it is quite likely that what extra mortgage investment is permitted by the amended Act will go into commercial and industrial building.
It is interesting to look back at the record of the insurance companies in the mortgage investment field. According to Central Mortgage and Housing Corporation figures for the month of July last, a total of $110 million was advanced in mortgages under the National Housing Act. Of this, CMHC itself provided $36 million, trust and loan companies $32 million, chartered banks $25 million and insurance companies $17 million. The figures indicate that this is the proportion which has prevailed over the past five years at least.
It appears clear that while the government continues to pursue restrictive and unselective monetary policies, the necessary flow of mortgage money to feed our starving home building program will not be forthcoming. The mere provision of permission to invest more widely will not guarantee that investment will take place.
[DOT] (2:30 p.m.)
Most insurance, trust and loan companies are in a real bind with regard to liquidity today. Funds are scarce, and they are not likely to be placed in a market where they will earn less and be tied up longer than in many other available investment areas.
I think the minister has done a grave injustice to this question of providing housing by producing this meagre answer to a problem that goes far beyond the social implications of providing housing. It is inextricably bound up with the whole socio-economic problem of urban living, a problem which this government has so far successfully kept at arm's length.
Trust Companies Act
As reported in the Globe and Mail for December 4, Herbert Hignett, president of CMHC, said:
More money has been spent on housing per capita in metropolitan Toronto in recent years than anywhere in North America but the public has received less for its money in terms of housing for all citizens.
Mr. Hignett attacked the philosophy of some builders that homes for people of modest incomes cannot be produced. He said that the number of housing units built meant very little indeed if only one person in six could afford the houses, and one in three the apartments. Mr. Hignett's remarks indicate to me something of the great complexity and menacing social overtones of Canada's particular housing problem. We must not only find mortgage funds in times of oppressively heavy interest rates and extreme investment competition, but must make those funds produce houses where, when and of a type that is needed.
We must look at housing as a problem with dimensions other than simply financial. The Winnipeg Free Press of November 27, at the conclusion of an editorial commenting on the recent presidential commission report in the United States on crime and violence, had this to say:
There was a moment in our experience when Paul Hellyer seemed to be saying things about housing and smaller towns that had meaning in terms of social health.
Is there now anybody in government who thinks of housing as anything but more impersonal sardine cans where more people can feel unrelated to more people?
If, as I and many other Canadians believe, housing is indeed a problem of national social health, then such feeble pinprick attempts to tackle the question as are represented by these amendments are totally inadequate. I wonder if the government has given any consideration to the methods employed by several advanced European countries to meet a similar housing problem. I believe it would be beneficial if the government were to look at the way building societies operate in Great Britain, where the principle of thrift, pooled resources and co-operative effort are employed so satisfactorily.
On November 6 the House committee on finance, trade and economic affairs heard an expert in the field from Germany, Dr. Horst Seidler, director of the Berlin Institute of Economic Research. He explained the German system whereby housing funds were provided by savings in special building banks.

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Trust Companies Act
Interest on the funds was fixed and divorced during the period of saving from the actual conditions of the capital market outside. He explained it as a method free from the need for subsidization because "it is a simultaneous process of saving by one part of the population and the giving of credit to another part of the population".
As an example, a German worker would save from 10,000 to 15,000 marks. When he wished to acquire his own home, he would borrow from the building savings bank an additional 50,000 marks at 5J per cent interest on a first mortgage. With the country's prime rate at about 7J per cent, 5J per cent appears ludicrous on the surface. The fact is that the bank can lend him the money at 5J per cent regardless of the outside rate, because it is money being saved for building purposes in a special fund and earning interest at below 5J per cent. In other words, it is a separate little financial world designed only for the provision of one special service-adequate funds at reasonable rates for home building.
These are the types of methods that I believe we should at least explore for possible adaptation to Canadian conditions. We must, I believe, make a special attack on a very special problem if we are to get anywhere. Such pitiful expedients as giving loan companies permission to invest more money in housing will never meet the need.


Duncan Gordon Blair: Mr. Speaker, I do not think I will be the only member who has noted the fact that a great coincidence occurred with the introduction today of this legislation. Yesterday there was published the report of a special royal commission on the affairs of Atlantic Acceptance Corporation. Among other things, the report of that commission, which dealt with corporations under the jurisdiction of the province of Ontario, indicated that part of the source of the problem was failure on the part of the supervisory authorities to exercise control over that particular financial institution.
One thing that we in Ottawa, and in the federal government, can be proud of is the undoubted excellence of the control over financial institutions that is exercised by the Superintendent of Insurance. This control is such that it is not only a matter of particular knowledge to the members of this House, but is regarded by the financial community of Canada as being almost without peer. The office of the Superintendent of Insurance is carried on by a very small staff. The integrity

of the officials is something of which we may all be proud. The excellence of the job they have done is illustrated by the fact that none of the federal institutions under their control have ever defaulted or caused any kind of concern to the public with whom they deal.
One of the most important provisions in this legislation extends to some extent the already great powers of the Superintendent of Insurance in controlling, supervising and regulating trust companies and other companies that are being dealt with in parallel legislation. In confiding these powers to this excellent office we in this House can have confidence that they will be well used and that the public interest will be protected.
I think there is general agreement that it is very much in the public interest to make the amendments that are suggested, which have the effect of loosening and broadening the powers of trust companies. They will be able to borrow more money from the public, and fewer restrictions of a formal kind will be placed upon them in the matter of making loans to mortgagors and others.
This is not, as my hon. friend from Edmonton West suggested, merely a lawyer's bill. This is a bill of great significance to the people of Canada in that it deals with all types of corporations that touch the lives of people at many points. Trust companies deal with estate matters, with savings, with their own investments and with prospective homeowners who come to them for mortgage money. Any legislation dealing with trust companies and similar corporations is of great significance and should be carefully scrutinized.
[DOT] (2:40 p.m.)
I hope that when this legislation is considered by the finance committee, it will be given rather more scholarly treatment than was the case in the speech of the hon. member for Waterloo (Mr. Saltsman), who we are told is the financial critic of his party. I think when the proposals are made, as he suggests they might be made, for amendments to the legislation it would be helpful if they were based upon an accurate assessment of what the legislation contains.


An hon. Member:: You are asking too much.


Duncan Gordon Blair: One of my friends suggests I am asking too much. I hope that I am not asking for too much. It was said by the hon. member for Waterloo that certain of the new powers given to trust companies are powers given to them without restriction. For example, he
December 12. 1969

said that trust companies could now make personal loans without restriction; that trust companies could invest in income earning real estate without restriction, and that they could invest in subsidiaries created tor the purpose of owning and operating real estate without restriction. I find it hard to believe that statements like these were made. Perhaps I may find when I read Hansard that I did not properly hear the hon. member for Waterloo. I hope that will be the case.
For those hon. members who have not yet had time to read this bill in its full text, I suggest they will find that personal loans are limited and that investment in real estate for the purpose of earning direct income is limited. Other suggestions have been made by the hon. member for Waterloo as to the purpose of this bill and we have heard his views on it. I think they suffer from the same defect in scholarship as the ones to which I have referred.
One question which clearly arose, and I would be very happy to hear the hon. Leader of the Opposition (Mr. Stanfield) speak about it, is contained in the statement of the hon. member for Dauphin (Mr. Ritchie) that it is the function of this Parliament or this government to confiscate the savings of the people. We are dealing here with only one type of institution which performs the very valuable function of mobilizing savings and providing for the lending of those savings to other people for the building of houses and for other purposes. After hearing some of the statements we have listened to today, one might gather that this is an illegitimate purpose; that there is something wrong with the people of the country saving money and earning a return on it by making it available through this very convenient type of corporation for productive and social uses. I hope I misunderstood what was said by the hon. member for Dauphin.
I hope this bill can be referred quickly to the committee so that all these implications can be explored. There is undoubtedly a need for the channelling of more money into the housing industry in this country. The available statistics show that no group of companies has made anything like the same contribution to the housing industry as have the trust companies and loan companies. Therefore, I suggest to hon. members that one very positive contribution we can make toward the alleviation of some of our housing problems in this country is to make the methods and operations of trust companies easier, giving
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them greater access to funds, and enabling them to enter even more vigorously than they have to date into the mortgage business.


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I am very pleased to have the opportunity of taking part in this debate today. I believe it is necessary that I show an interest in housing in view of the fact my leader has recently appointed me as the housing critic of this party. I must say I have a lot to learn and I think the government is in the same boat. Let me tell the hon. member for Grenville-Carleton (Mr. Blair), who is now looking through the curtains on the other side of the Chamber, that I appreciate the fact all Parliamentarians should be concerned in controlling these huge corporate structures. We all read recently about the fiasco of the Atlantic Acceptance Corporation.
My complaint relates to the fact that when the government House leader was speaking about a week ago, and correct me if I am wrong, he did not indicate he was bringing Bills S-8 and S-9 before the House in order to protect the public. He indicated rather that he was in a hurry to see these bills considered by the House and referred to a committee in order to assure greater funds in the mortgage field. Members of this party are concerned because of what he said, as illustrated by the remarks of the hon. member for Dauphin (Mr. Ritchie).
At this time we should question whether in fact this bill will have the results indicated by the government House leader. We must question that because there is no guarantee of this result in the bill and the government House leader had no right to make that statement. He can express his hopes and his belief that these corporate structures are responsible and therefore will continue to be in a position to help the mortgage market. In this way, the vast majority of Canadians might see some ray of hope in terms of housing.
I am also concerned because this bill will mean that these companies will have an opportunity to look to foreign fields. I should like to know the reason for this sudden interest in foreign fields. Is the market in Canada not worthwhile? Am I to understand that in order for these companies to be structured in a way that is conducive to the ultimate outcome of profits and benefits for Canadian people they have to look outside the Canadian market? This is what concerns me and what concerns other members of this party.
The Economic Council of Canada has indicated that we must continue to increase

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our stock of housing in order to reach our 1975 goal, which I understand is one million units. We cannot have a recurrence of what took place in 1966 when the number of housing units available was low. The greatest impediment toward the development of sufficient housing is the lack of mortgage money. The government should be concentrating its efforts in order to see that we do have more mortgage money rather than on this band-aid type of philosophy it has brought before us this afternoon.
We all know that lending institutions, banks, insurance companies and trust companies account for the great bulk of mortgage money. There is, of course, the residual lenders and the Government. What seems to bother Canadians throughout this land is that the volume of available mortgage money has been spotty and inadequate. The Government, in its wisdom, has seen fit to believe that CMHC is the organization which can either relieve unemployment or control the economy by placing money into the housing market at will. This is not what the Canadian people want. This has led us to believe that there is no adequate base of funds, and because there has been no adequate base there has been discouragement in terms of employment. Of course we are very concerned about this and the fact that the Government has not realized it should adopt a policy to guarantee a continual flow of funds from CMHC in order to assist the housing market.
[DOT] (2:50 p.m.)
Because of this uncertainty in respect of mortgage moneys it has been said that housing production is only 75 per cent of what it should be. In other words, we are not putting forth our best effort. The other day I was fortunate to receive a document from Mr. William M. McCance, Director of Research, National House Builders Association. I should like to quote some of his statements which I think are important and really to the point. He says:
There is a definite need to make increased amounts of money available on a continuing basis for all forms of shelter, as well as all income classes, to meet the estimated needs, which lie ahead. This can only be accomplished by broadening the supply of mortgage financing and in examining entirely new concepts in the method of raising housing money.
Private enterprise, for instance, is prepared and anxious to produce housing under the limited dividend provisions of the National Housing Act but Federal funds are presently unavailable for this type of financing. This is unfortunate since

it would be possible to produce a large volume of units for the lower to middle income group under these provisions.
Several provinces have enacted condominium legislation which permits the sale of individual units in a multiple housing building. Builders, however, have found it virtually impossible to interest the lending institutions in this form of investment. The condominium concept could result in individual home ownership at prices substantially below the present cost of single family houses.
Many lenders, likewise have begun to show a decided preference for large single loans on multifamily developments since there is less administration involved and they are often able to participate in part of the equity as well. These large loans have deprived the single family house builder of mortgage funds, which he formerly found available to him.
This is what we must be concerned about. Will these trust companies just become involved in putting out large sums of money or will they really become concerned about the average person who still has the old dream of owning his home? My friend from Waterloo indicated he has a fear that mortgage funds may dry up as a result of this legislation. I do not know whether they will dry up. I have some concern about whether these companies will concentrate on overseas investment. I think, however, their record is not bad. If I may refer to the appendix to the sixty-fifth report of the committee on Finance, Trade and Economic Affairs, we find that in 1964 the trust companies, in the first six months, invested $399 million in new residential, $190 million in existing residential and $94 million in other. We see that in 1968, the trust companies invested in new residential $528 million, in existing residential $257 million and in other $114 million. So, we have statistics which indicate that the trust companies are involved in mortgages. There can be no doubt about this.
What we are concerned about today is whether the trust companies will put more money into mortgages rather than move into the foreign investment field. We must be concerned about what they do in terms of the inequitable geographical distribution of mortgage money in our nation. We must be concerned about whether they place their moneys in the city of Toronto or the city of Montreal and forget about the areas on the east coast which are faced with regional disparity or the areas on the west coast. I do not see anything in this bill to give us any hope in this regard.
There is another area with which I believe this government must be concerned in respect of housing. I refer to the high interest rates.
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High interest rates are killing the old Canadian dream of home ownership and are slowly turning this country into a country of landlords and tenants. I think we must be concerned about this. It is difficult to understand how anyone in this country can own a home until this government realizes that, even though the people desire to own homes, they simply cannot do so with these rates of interest.
The interest rate in respect of approved lenders in 1968 was 8J per cent and now it is up to 10 per cent. The rate for apartments and townhouses in 1968 was 8| per cent, and now is up to 94 per cent and 10J per cent. In respect of conventional presold and resale housing, in 1968 the interest rate was 9 per cent and 94- per cent. Now, it is up to 10 per cent and 10J per cent. This government must be concerned because it said we will reach our objective of one million units. I say the figure of one million units cannot be reached until sufficient money is available at rates of interest which are attractive to those who wish to become involved in owning their own home.
The other day I believe all of us received a letter from the Mortgage Insurance Company of Canada under date of December 5, 1969, in which we find the following:
November brought no brightening of the mortgage picture across Canada. Mortgage funds continued in extremely short supply, and interest rates increased slightly in some areas.
Then, we see the following:
Several reporters mention "buyer resistance to high prices and high interest rates". Another observation made in the same vein was that the desire for home ownership is as strong as ever, but that would-be purchasers simply cannot afford the high prices and the high cost of financing.
That certainly must speak for itself.
Why can we not approach the mortgage problem by way of pension funds? I understand that these funds represent a great source of untapped money, some $8 billion. At the present time I believe something in the order of 11 per cent of this money is involved in housing. I think perhaps we should convince the trustees and administrators of this vast fund of money that housing is an area in which there is continual appreciation because of inflation and what not, whereas in everything else there is depreciation. I think we should pursue that area in order to be in a position to say we are attacking this problem with some gusto.
I should like to mention another area which I think is of some significance. I have asked
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questions about this. Rather than bring in this bill-I do not know what to call it; it is not what one could term legislation of great impact in respect of housing, but maybe it is control-why could we not become involved with building societies. Is this an evil phrase? I have read that in England and in other European countries, these building societies are considered to be an ideal means of putting money into a position where it can come in and go out for the benefit of housing. Is there anything wrong with this? I think this is one way in which we could get money out of the markets and really enhance the philosophy of having money available for housing.
I understand the Minister of Finance (Mr. Benson) has been consulted on this subject by officials of the province of Ontario and that right now discussions are being held. Even though some kind of tax adjustment or tax incentive might be needed, I hope that he and his colleagues on the treasury bench will realize we are in trouble when it comes to mortgage moneys.
[DOT] (3:00 p.m.)
There is another irritating point with respect to housing. As I understand it, representatives of the province of Ontario met recently with federal authorities and said, "You are hampering us because of your complacency with regard to what we are trying to do in our housing programs and because of the sporadic influx of money from you." This is reflected in an article which appeared in a newspaper some time this year-I do not have the exact date-which reads as follows:
Ontario has asked the federal government to say exactly how much money it will loan the province for housing in 1970 to avoid the federal delays which hampered the provincial building program last year. Trade Minister Stanley Randall said Wednesday...
He said he hopes for a federal reply to Ontario's request for a definite commitment before the end of 1969.
Can we not give the province of Ontario an affirmative answer in that regard? I hope the government can. It does not have too much time left in which to find solutions to our housing problems. All it has to do is say, "Yes, we understand that in the past we have been somewhat ill-advised as to the way in which we are spending our money. However, starting this year we will say we have so many million dollars for the province of Ontario, so much for the west, and so much for the east, to be spent on housing". Then

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the provinces will know how much money they can count on in the future, and particularly next year.
I conclude by saying that for the government to introduce this bill and say that it will mean something significant, in terms of moneys being injected into the mortgage field, is absolutely wrong because that is not necessarily so. I think we must consider that it will not be so.
The other matter that we have to consider- and I hope that when this bill is placed before the committee it will scrutinize it carefully

 is why it is necessary, when we are in the position to state that we are short of mortgage moneys and these companies have the necessary funds, for them to invest their money in foreign countries. This means that they take a pretty dim view of Canada's future.


Eldon Mattison Woolliams: The white paper is the reason.


Lincoln MacCauley Alexander: We do not want to get into that debate today, and Mr. Speaker is liable to call me to order if I start on that subject now. But perhaps that is another reason for these companies saying, "We must get some money out of the country before Benson gets it." If this government is going to attack our housing problem with sincerity, it will have to do much better than what is proposed in Bill S-8.


Mr. John Burton (Regina East):: Mr. Speaker, when the Minister without Portfolio (Mr. Gray) introduced the bill now before us, an act to amend the Trust Companies Act, I was very interested in the explanations that he provided. I could perhaps express it more accurately by saying that I was more interested in the things he did not explain, the areas he did not deal with, when he presented the bill.
The minister went to some length to spell out some of the nuts and bolts of this legislation, some of the specific items that are contained in the bill, and stressed several of them as being very important provisions. That is fine and well, but the fact is that we heard nothing from the minister by way of an enunciation of the government's basic policy and thinking with respect to this legislation, the philosophy behind it or the future course of action which it intends to follow in setting down the guidelines for the management of the nation's finances.

I think there are some fairly profound implications in what the government is now proposing. I think it is clear that it is opting for the status quo, for what we know is inadequate. The government is hoping that by tinkering with the mechanics of the legislation by way of some specific items and provisions contained in the bill, it can quieten down the public and avert the storm of protest that would probably arise if it did not take any action at all.
I think it is very important that this question be discussed in the House during the debate on second reading. It is all very well to suggest that many things can be dealt with during the committee's consideration, but the fact is that there are fundamental issues which need to be discussed in the House at this time.


Herbert Eser (Herb) Gray: Mr. Speaker, may I ask the hon. member a question?


John Stratford Burton: I think it ill behooved the hon. member for Grenville-Carleton (Mr. Blair) to suggest that he wanted to hear a rather more scholarly dissertation from the hon. member for Waterloo (Mr. Saltsman). I think that the people of Canada and this House owe the hon. member for Waterloo a debt of gratitude because he put some of the fundamental issues before the House today.
The hon. member for Grenville-Carleton was quite erroneous in his interpretation of some of the remarks of the hon. member for Waterloo. The latter did not state that this legislation would allow trust companies to enter the personal loan field or the real estate field without any limits. I think the implication left by the hon. member for Waterloo was that trust companies could enter these fields to the extent that their policy determined, and this bill will give them all the authorization they are seeking. The hon. member for Grenville-Carleton said he hoped that this sort of defective scholarly approach would not be present when the bill is before the Committee on Finance, Trade and Economic Affairs. I hope that when the bill is before the committee some of the fundamental considerations which need to be taken into account will be raised and discussed.
The hon. member for Grenville-Carleton suggested that trust companies are a very convenient type of corporation for making loans available for housing and other worth while purposes. He went on to argue that more money is needed for housing. However, in the very next sentence he suggested that the trust and loan companies have done more
Decembei 12, 1969

than anyone else in the way ol financing housing. This may very well be the case. However, there is a contradiction between these two statements because it is evident, by the admission of the hon. member, that what has been done up till now has been inadequate. I suggest that the situation in the future will not be helped materially by the provisions of this legislation, and certainly the social capital required in Canada will not be provided automatically by making it easier for trust companies to operate.
It seems to me that there are two basic considerations before the House. One-and this area was dealt with by the minister-has to do with the operations of the companies. This involves the shareholders' and the depositors' interest. There is a legitimate place for the consideration of these interests within the framework of operations of these companies as authorized in legislation passed by the Parliament of Canada. This involves, quite properly, consideration of the internal aspect of the operations; it involves various housekeeping considerations. There are in the bill a number of such considerations. It also involves problems of safeguards for the shareholders, for depositors, for purchasers of debentures, for all those who deal with these companies. These safeguards are necessary because these companies are dealing with the public.
[DOT] (3:10 p.m.)
As was noted by the hon. member for Grenville-Carleton (Mr. Blair), certain problems which originated in the past several years have occupied the attention of many people in Canada. But it seems to me there is a wider interest. There must be concern for the public interest if we are to examine the full scope and implications of this bill. It seems to me there is not in this bill an adequate consideration of the public interest.
When we deal with the role of trust companies and other companies that we will be considering in later bills, we deal with matters such as the role of finance in the economy, the role that is to be played through finance companies, how they are to affect the performance of the economy and their impact on the economy. It goes beyond that, because it has a critically important effect on the lives of people in Canada. It has an effect on the welfare and well-being of people throughout Canada, and many people far from the immediate reach of these companies are affected by the decisions they make in carrying on their day-to-day operations. In the face 21545-51
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of this situation, what is the government's attitude? It seems to be: Let them do it. Let them go ahead and do their thing and we will see there are some controls to protect the shareholders' interests, and safeguards so that they do not get into trouble which will make us the subject of public criticism.
It is obvious to all of us in this House, and to people throughout Canada, that difficulties have been encountered by the government in dealing with the current economic situation. The fact is that the fiscal and monetary restraints introduced by the government have not been effective. They have had no real effect in dealing with the inflation psychology which has been of great concern to the government. The fact is that the private sector of the economy has continued on its way without any feeling of restriction; it has carried out its activities unimpeded by the controls about which the government made a great fuss when introducing them. There has been no real restriction or restraint on the role played by the private sector of the economy in the present situation, about which the government professes to be greatly concerned. The fact is that decisions affecting the public interest are often, because of the structure of our economy, made by those controlling financial sources.
We have to ask: Where is real economic power held in Canada? It must be acknowledged by all that a great deal of the economic power in Canada is held in the private sector, and that that power is not widely diffused in the old classical sense. The fact is that a good deal of that power is concentrated in so few hands that those hands are able to deal very closely with the government. They are able to deal with it very much on an equal basis, so that the government, which speaks for the people of this country, is not able to play as effective a role as it might in dealing with the economic problems that must be faced.
We must take into account the realities of the world. Canada and the world have changed. No longer have we a situation in which power is widely diffused, in which we have a large number of small operations in all sectors of the economy. We do not have a widely diffused economic structure in this country any more. A large part of the economic power is in the hands of a relatively small number of corporations, many of which operate beyond national borders. In fact it has been suggested by people close to the situation, such as George Ball, Under Secretary of State in the U.S. government of President Johnson, that the power of the future will be

in which interest rates have been allowed to skyrocket over the last couple of years. I suggest that the Canadian public is not willing to put up with this situation indefinitely. Government policy as it has been developed until now will not be effective in controlling interest rates in Canada. Our whole economic structure is becoming increasingly fragile on the basis of the policies being followed by this government.
When introducing this bill the minister said that there is need to increase the supply of funds for housing. The hon. member for Waterloo has already dealt with this point and I referred to it earlier. Private financial institutions have had every opportunity to show that adequate funds were available to the Canadian public for housing and to see that these funds were made available on a reasonable basis, allowing people on moderate incomes to proceed with their plans to construct decent homes. I suggest that on the basis of the legislation before us there will be no further progress in dealing with the housing problem of this country; that is, essentially, the problem of housing for people of low and moderate incomes. I suggest that no more progress will be made in the future than has been made over the past several years.
There are in the bill a number of proposals which would widen the power of trust companies. I suppose it might be said that this will better enable these companies to serve the public. I suggest that it will be a case of gouging the public. I think this reflects the government's attitude which is inadequate and is causing an increasing degree of frustration and resentment throughout Canada.
It is also interesting to note the attitude of some of the finance companies as exhibited in recent weeks. Over the past two or three months a number of financial institutions have made representations to the Finance, Trade and Economic Affairs Committee on the subject of interest rates. Each had an explanation with respect to the current difficulties and for the record established in rising interest rates. On one thing all were unanimous-each said, no more controls. Mr. Speaker, when these companies make this type of assertion, I become suspicious. That is what they are afraid of, because they know it would put an end to the policies they have been following over the past few years. They seem to be afraid of public action. Why? Are they afraid that their vested interests will be hurt in some way?
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No proposals have been made that they should not receive a just return on their investment. The hon. member for Grenville-Carleton referred to this concept. I do not know whether he feels that safeguards to protect the public from high interest rates or rates which must be defined as usury will harm the trust and loan companies. On the basis of our economic structure and the freedom of action granted to them in this bill, I suggest they are unwilling to accept their share of responsibility in the development of our country.
I further suggest that the government has been blind to the direction in which it is leading the economy. It has exhibited a blind acceptance of the status quo. There has been no discussion or consideration of the public interest. That is totally lacking in this bill and in its presentation by the government. There seems to be an attitude of see nothing, hear nothing and do nothing that will in any way harm the government's friends in the financial world who are making a very good living out of the distress in which many Canadians find themselves. On that basis, Mr. Speaker, I cannot support the bill as it is now before the House.


Mr. Osier:: Mr. Speaker, may I ask the hon. member a question? His speech was very interesting. 1 wonder if he would tell us just one thing that he would like to see changed in the bill.


John Stratford Burton: Mr. Speaker, in the time at my disposal it was not possible to deal with all the changes I should like to see in this bill. If the hon. member for Winnipeg South Centre (Mr. Osier) will review Hansard he will find that in the speech which I have just concluded I placed five specific proposals before the House.


An hon. Member:: What about one suggestion now?
Another hon. Member: Change the government.


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I should like to make two points with reference to the bill before us. One is general enough to include the next bill that we will be considering, and since I think many members, like myself, would like to get out of here by Christmas, 1971, if not Christmas 1969 or 1970, perhaps I might be permitted to refer to both points at the same time.
Before I make the two points, I should like to compliment the minister who has responsibility for this bill. I think he made an

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excellent categorization of the points contained in the measure, but I do not think there was an adequate explanation of the philosophy behind the two bills in respect of trust and loan companies. However, in an illustrative way he did go over half the course.
The first point that I should like to make is a general one dealing with both trust companies and loan companies. This matter was raised by the municipality of the county of Halifax when the loan company bill was originally considered by the other place earlier this year. This particular point appears as clause 24 in each of the bills, the one we are considering now and the one to be considered later, and concerns the power of the two types of company to invest. Frankly, sir, I do not know whether the point raised is a valid one. However, the municipality has already discussed it and sent its views to me to present to the House. I feel it incumbent upon me to do so, and perhaps more particularly to do so in the committee which will be dealing with this matter. I believe there are questions raised by this very responsible body, the municipality of the county of Halifax, that should be dealt with when the two bills are being considered in committee.
They are afraid that the power of trust and loan companies to invest in municipal securities of the country may be reduced as a result of provisions contained in clause 24 of this and the next bill. Without further ado and because I am confident that people will be good enough to raise the question in committee, I will just put the resolution on the record and trust my colleagues on that committee to study the matter and ask the necessary questions.
[DOT] (3:30 p.m.)
I would like to be in the committee to ask these questions, but we all belong to different committees. Even if one had the agility of a flea and the ability of Superman to pierce through the walls around this building, he still could not attend all the committees which meet at various times and deal with various topics. The resolution that was passed by the Municipality of the County of Halifax earlier this year reads as follows:
That whereas Bill No. S-38-
This refers to the bill number as it was in the previous session.
-which is a bill of the Senate of Canada, and presumably will go to the House of Commons some time this Fall, has been brought to the attention of

the Council of the Municipality of the County of Halifax.
The Bill provides that Federal Loan Companies carry in their investment portfolio cash or Federal and Provincial Government bonds for liquidity purposes and states that Junior Government bonds will not be acceptable for such purposes unless they are guaranteed by the appropriate Provincial Government.
The Municipality of the County of Halifax and indeed all Municipal Governments in Canada are concerned about the marketing of their debentures and the high interest rates that have to be paid in today's market. It is felt very strongly by this Council that the Federal Government should perhaps be taking some action to improve the situation rather than take steps that will probably curtail the sale of Municipal debentures.
At the last session of the Municipal Council of the Municipality of the County of Halifax the following resolution was duly passed:
That whereas Bill No. S-38 will make it imperative that Federal loan companies carry in their investment portfolio cash on Federal and Provincial Government bonds for liquidity purposes and .iunior government bonds will not be acceptable for such purposes unless they are guaranteed by the appropriate Provincial Government:
And whereas the said Bill has received third reading in the Senate of Canada and will be before the House of Commons in the autumn of this year;
And whereas because of today's high interest rates and scarcity of money available for Municipal purposes it is extremely difficult to sell Municipal debentures;
And whereas if the proposed Bill S-38 is enacted it would increase this difficulty by denying to Municipalities potential customers for Municipal debentures;
Be it resolved that the Council of the County of Halifax vigorously protest this legislation and urge that it not be enacted;
And be it further resolved that a copy of this resolution be sent to the Prime Minister of Canada, the Minister of Finance, the Premier of Nova Scotia, the Minister of Finance and Economics, and the Federal and Provincial representatives from Halifax County:
And be it further resolved that the Union of Nova Scotia Municipalities be requested to support this protest and do all that it can to oppose the passage of the Bill.
That is the end of the resolution. I believe I have fairly stated the point I want to make. I read very carefully the provisions in this measure and the one forthcoming, which is really the one to which this resolution is directed. They both have the same import. I cannot make up my mind whether a valid point has been raised. All I ask on second reading-and I am perhaps a little out of order-is that this point of view be earnestly considered. The committee that studies this measure and the next one should have a clear opinion as to whether the municipalities of
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this country are being denied something that they feel is their right.
I will be very brief on the second point which I wish to make. It arises from page 36 of the bill before us, in which an option is given to the trust companies when lending on mortgages to increase the amount they can lend beyond three-quarters of the valuation of real property. It is provided that there be a policy of mortgage insurance issued by an insurance company registered under the Canadian and British Insurance Companies Act or the Foreign Insurance Companies Act. The point I raise is that on its face the provision perhaps represents a very valid step forward in trying to provide more mortgage financing, especially in these times of high cost, for the building of homes. From my experience when dealing with traditional lending companies and with whatever high risks one thinks are inherent in an inflationary situation, you get into a situation that is a little beyond that contemplated in the pious words of this part of the bill.
Most hon. members who are lawyers have dealt with mortgage financing. Where there is a combination of primary and secondary mortgage financing there is a great difference between the rate on the first three-quarters and that on the second portion. Again I must ask the committee to do something I cannot do because I shall be busy in other places. The committee should not only ask what the words say, because their meaning is obvious, but they should get down to the nitty-gritty issue of the kind of insurance charges that will be levied between the mortgage three-quarter value or value in excess of seven-eighths. I suspect some of these figures will be rather eye-opening, perhaps even dashing to the earnest hopes of the minister who presented the measure this afternoon and to the people who hoped this bill would effect some improvement in home building in this country. I think many eyes will be opened. The approach used is not realistic.
I hate to be a devil's advocate in dealing with the other important measure. I do not share all the pessimism of those who have been dealing with this trust company measure this afternoon, particularly my friends to my left. I do not think they are demons with horns; I believe they are human beings with frailties.


Mr. Gilbert:: Aren't we all?
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Robert Jardine McCleave: These are important matters to be considered. I hope the committee which studies this measure will follow up the two points I have raised. I thank hon. members for their patience.


John Gilbert: Mr. Speaker, Bill S-8 is very important and complex. It is one of a group of bills that deals with financial matters and originated in the other place. When I read the debates of the other place and the evidence given before the banking committee, I thought it fell short of the scrutiny that the bill deserved.
It is fair to say that when this bill was first introduced in May in the other place it took no more than half an hour to deal with it, and there were only two speakers. It is difficult to determine any difference between the two speeches, the one which was supposed to present the government's position and the other the position of the opposition. The bill had a very short stay in the banking committee. The main witness was the Superintendent of Insurance, Mr. Humphry. He seemed to be the main spokesman with regard to these bills. He enlightens the senators with regard to the provisions of this bill. One would think that in the other place, where there is so much corporate experience among the Senators, they would have been anxious to use their experience and knowledge when dealing with this important bill.
This bill was again dealt with in November and we had the same situation. There were again, two speakers and it is difficult to determine any difference in philosophy regarding this bill. Again it was rushed through the banking committee and was then presented for third reading. Perhaps so many members of the other place have such a wide financial interest in so many financial institutions that they felt they were ruled out of order because of a conflict of interest. If this was the case, it underlines the necessity for bringing forth legislation requiring Senators to declare their assets when they are appointed to the other place. If cabinet ministers have to divest themselves of their interests, surely Senators should at least declare their assets, the companies in which they are involved, the directorships they hold and the number of shares they have in these companies, so they can direct their attention to these very important bills.
We in the New Democratic Party have said there are many shortcomings in Bill S-8. We will also say there are many shortcomings in other financial bills. We cannot support the

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bill as it has been presented to the House today. The reason we do not support it encompasses five main grounds, and I would like to state those grounds, Mr. Speaker.
1.	The government of Canada should bring all financial institutions under the jurisdiction of the Bank of Canada.
2.	The Bank of Canada should regulate the loan ratios of all financial institutions.
3.	The public interest of all Canadians should be protected by a nominee of the Bank of Canada on each board of the different financial institutions.
[DOT] (3:40 p.m.)
4.	The Government of Canada should set out a list of priorities for the public benefit and interest, and these priorities should be incorporated into the lending policies of the financial institutions.
5.	The Bank of Canada should be given the power to regulate the rate of financial return to those financial institutions.
Let me deal with the first proposition. It is saying no more than was recommended by the Porter Commission on Banking which pointed out that trust companies are very much like banks; in fact, the Commission referred to them as near-banks and said it was necessary that they should come under the jurisdiction of the federal government. One would think that the financial institutions of a country should be efficient and responsive to the needs and priorities of Canadians, yet when I look at the activities of the Bank of Canada I find it has not been a leader in this direction. I find that the Bank of Canada is the apologist for the chartered banks as well as being an apologist for the inaction of the government in dealing with the financial problems we are experiencing.
It would be fair to say we have a proliferation of financial institutions, some of them being trust companies. Evidence shows that there are nine federally incorporated trust companies administered by the federal authority, and ten provincial trust companies administered by the federal Superintendent of Insurance. This means there are 19 trust companies under federal jurisdiction. In addition, there are between 45 and 47 provincially incorporated trust companies which operate entirely within the confines of the province which incorporated them. Therefore, we find roughly one-third of the trust companies under federal jurisdiction and two-thirds under provincial jurisdiction.

It might be worth noting that the federal trust companies have $3.5 billion in assets to administer and that the provincial companies have about $10.8 billion. This is no small amount of money; the size of these assets is one of the main reasons we think trust companies should fall within federal jurisdiction and come directly under the guidance, control and regulation of the Bank of Canada. I do not know how many loan companies there are, but we find there are 65 trust companies operating across Canada, and in these circumstances one can appreciate the difficulty of obtaining efficiency and getting a response to the social needs of the country.
With regard to the proposition that the Bank of Canada should regulate the loan ratios of all financial institutions, it has been pointed out that the trust companies began with an investment authority amounting to ten times the ratio of their capital and surplus. The ratio was increased to 15 times, and now the trust companies are asking that it be raised to 20 times the amount of their capital and surplus. The minister has told us that the purpose of increasing the ratio is to make more money available for housing, but it has been ably argued by members of my party that this increase in no way supplies new money; all it does is reallocate the savings of Canadians which flow into the financial institutions.
We have said there should be direction of the investment portfolios of trust companies so that they would take care of the housing needs of Canadians. In considering the increased investment powers of these companies one has the right to be very dubious with regard to the extent to which an increase in the money available for housing will result from an increase in the permitted loan ratio. In all likelihood we will find that there is actually a decrease in the amount provided for housing. For my part, I have seen no evidence of any great interest by the trust companies in the housing needs of Canada, more especially with regard to public housing and housing for low-income groups. They were finally persuaded, after a good deal of urging, to invest in condominium housing but their record to date has not been a very proud one in this field. We say, therefore, that provision should be made for a definite percentage of the investment portfolio of these companies to be directed into housing.
I now turn to the proposition that the public interest of all Canadians should be protected by placing a nominee of the Bank of
December 12, 1969

Canada on each board of these financial institutions. Mr. Speaker, it is difficult to determine who are the true owners of the financial institutions in Canada today. They operate what is known as a cosy club; it is difficult to break through the chain of ownership which prevails. I recall that when we were studying the Bank Act in the Standing Committee on Finance, Trade and Economic Affairs we suggested there should be a representative of the consumers of Canada on the board of directors of all the banks. This was refused. We also suggested that since the trade unions deposited large sums in the banks for purposes of saving, and so forth, there should be a representative from the trade unions sitting on the board of directors of the chartered banks. Again, this proposal was ignored. We are now saying that to protect the public interest, there should be a nominee of the Bank of Canada sitting on the boards of all the financial institutions of the country. No act should be slanted in such a way as to protect the privileged few in our society; all acts should be slanted toward the protection of the majority.
We recommend that there be a list of all those who hold substantial shares in our financial institutions-a list which would be accessible to the public. I cannot help wondering who does, in fact, own the majority of the shares in some of these banks, trust companies and loan companies. The fancy corporate techniques which are used today tend to cover up the true facts about ownership. One finds it difficult to strike at the true owners when such practices prevail.
My fourth point is that the government should set out a list of priorities for the public benefit and that these priorities should be incorporated in the policies of the lending institutions. At present we find the chartered banks operating under the suasion of the government. It has been said that 15 per cent of all their loans has been directed to such fields as housing, student loans, small business loans, and so on. This should not be achieved through suasion, Mr. Speaker; it should be done through direction. We should direct that a percentage of their loans be made available, without delay, for public purposes.
[DOT] (3:50 p.m.)
I recall the experience of 1968 when at the beginning of the fall the minister in charge of housing, the hon. member for Trinity (Mr. Hellyer), realized there would be a shortage of housing in Canada. What did he do at that time? He directed moneys that had been
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earmarked for the public sector to the private sector for housing purposes. In other words, a shortfall in housing had been created by a shortage of housing money provided by banks and trust companies, and the minister had to sacrifice money that was earmarked for public housing by diverting it into the field of private housing.
It is fair to say that trust companies, like other companies today, are lending at very high rates of interest. When I see advertisements used by trust companies as gimmicks to attract customers and saving accounts, I am sick to my stomach. Big cards are displayed offering household items free if you become a customer. Other placards offer loans at 8 per cent interest. No wonder Canadians are finding it difficult to meet their financial needs.
I recall an occasion when the hon. member for Grenville-Carleton (Mr. Blair) introduced a bill on behalf of the Huron and Erie Trust Company. During the debate in the Standing Committee on Finance, Trade and Economic Affairs the hon. member for Waterloo (Mr. Saltsman) asked one of the directors of the company what would be a fair return on the money they obtained. This gentleman suggested that a fair return would be between 1 and 2 per cent. A reasonable profit of between 1 and 2 per cent could be obtained by these companies, yet they are paying 8 per cent interest to depositors and charging mortgagors and other borrowers 10 to 12 per cent interest. I think that interest rates have reached an extortionate level, and it is time the government stepped in and took immediate action.
My fifth point is that the Bank of Canada should be given power to regulate the rate of return of financial institutions. In the last few weeks financial returns of banks have indicated that their profits are enormous. The same can be said about trust companies. The Minister of Finance (Mr. Benson) hopes that the market mechanism in regard to interest rates will come into operation. Surely he has discovered by this time that the market mechanism for adjusting interest rates is outmoded, that we should at least try a floating rate of exchange of the kind which has been so successful in other countries, and at the moment particularly in Germany. It has been said that money is the root of all evil, but surely it is the love of money that is the root of all evil. Certainly the practices of trust companies and other financial institutions whose sole determination is to make

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money have created a great deal of evil within our society.
If I may turn my attention to the bill itself, I find broad changes are being made to the act to permit trust companies to incorporate by letters patent instead of by way of special Act of Parliament; to allow companies which have been incorporated by special Act of Parliament to amend their charters without passing another special Act of Parliament. I imagine that these amendments are the result of tenacious efforts by members of my party to expose the practices of some financial institutions. The members of the New Democratic Party have attempted to slow up the progress of certain bills because of the inherent dangers in them to the public of Canada. For this we make no apology. In fact, we are quite proud of our achievement as a party in putting before Canadians some of the inherent dangers that lie in the practices of trust companies and other financial institutions.
The bill enables provincially incorporated trust companies, when authorized by provincial law, to continue as federally incorporated companies without the requirement of passing a special act in each case. The bill gives power to trust companies to widen their scope of investment, more especially with regard to foreign companies. The bill also prohibits investment where transactions are not at arm's length; and there are other amendments in regard to investment similar to those relating to insurance companies.
Some of these administrative changes are welcome; others are in need of close scrutiny. When I read the debate in the Senate on introduction of the bill, I observed the words of the Senator who introduced the bill. He said that confidence in trust companies is high in view of the character of the people in the industry; and secondly that there is further assurance of public protection through deposit insurance.
Speaking of trust companies, I am reminded of Prudential Trust, of British Mortgage and Trust, and some of the practices adopted by these companies. I also think of the lack of regulation and control by both federal and provincial governments at the time. I recall that when the matter was raised in this House the Minister of Finance said he had nothing to do with Prudential Trust, that it was a provincially incorporated company for which the provincial government was responsible. When one realizes that investors

in Prudential Trust will probably get a return of 10 cents on their investment dollar, is it any wonder that we need very close scrutiny and very close regulation at the federal level in regard to matters relating to trust companies? Again, this is why we contend that all financial institutions should come under the federal government's umbrella, and more particularly under the umbrella of the Bank of Canada.
I also recall the reluctance of financial institutions to accept the introduction of deposit insurance, and this gives me cause to smile at the Senator's statement that confidence is high now there is deposit insurance. May I call it four o'clock?


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



PRIVATE MEMBERS' PUBLIC BILLS


John Edward Broadbent: that Bill C-16, to amend the Criminal Code (modernization of law of picketing), be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, Bill C-16 proposes an amendment to subsection 2 of section 366 of the Criminal Code of Canada. The purpose of the bill is to permit peaceful picketing by any number of people for the purpose not only of communicating information but of persuading other employees and people having business dealings with a company whose employees are on strike to support the cause of the picketers, particularly in the case of a lawful strike.
[DOT] (4:00 p.m.)
At the present time section 366 of the Criminal Code prohibits intimidation by means of violence or threats, especially when conducted by watching or besetting. This is sensible. Subsection 2 of section 366 provides an exception in applying the concepts of watching or besetting. A person does not watch or beset, within the meaning of section 366, if he attends at or near or approaches a dwellinghouse or place only for the purpose of obtaining or communicating information.
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As the law now reads, there are two significant defects in it. The first is that a judge in our courts may reasonably decide that in the case of an otherwise legally conducted strike any number of pickets except one is a form of intimidation. Such judgments have in fact been made. The reason is that subsection 2 begins with the words "A person who attends at or near". My proposed amendment would remove the possibility of such a decision in the future by replacing the single "person" with the plural "persons". With this change there would be no ambiguity in respect of the number of persons permitted to picket.
The second flaw in subsection 2 as it now reads is that it asserts that one does not watch or beset if one's purpose is only to obtain or communicate information. The legal force of this subsection is that if a man on strike, in addition to imparting information seeks actively to persuade others to follow his example, he can be charged with watching or besetting. My proposed revision of subsection 2 would make it a legitimate purpose of picketing to persuade or attempt to persuade, without violence or attempts at violence, others to do or not to do something.
Briefly, what are the arguments for this bill? One argument in favour of the change I am proposing is that it would give workers in Canada the same rights as other people in demonstrating for or against a cause they believe to be either just or unjust. It would make clear beyond doubt that more than one person must be permitted to join a demonstration or picket line. I suggest that the law as it now stands is discriminatory towards workers because it leaves to the courts the decision whether more than one person could be considered to be intimidating in a strike or a picket line.
Canadian law as it now stands applies a standard to workers that is not applied to other citizens. Why should not 50, 100 or 200, whatever be the figure, working people be allowed to demonstrate on a picket line just as they can now in respect of any other kind of demonstration? We have had demonstrations in respect of Biafra, the Lord's Day Act and Viet Nam.
We have in this country no laws that refer to demonstrations of this sort. Why do we have them for working people? It seems to me obvious from our own liberal traditions that there is contradiction here which should be abolished in our Criminal Code. We must abolish this double standard, one for working people and another for citizens at large. All 21545-52
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that is needed is the application of the same legal standard which imposes non-violent, nonintimidating behaviour on citizens. We must remove discriminatory legislation which sets our workers apart from other citizens in respect of their demonstrating. If there is violence and intimidation by workers on a picket line, of course they should be punished according to the laws of the land.
I am arguing that we should not have one set of laws for this kind of demonstration and another set of laws for others. Workers are citizens and they should have the same rights. They should be allowed to demonstrate in whatever numbers they decide is useful, just as other groups are allowed to demonstrate in a peaceful way in whatever number they are able to muster. Numbers do cause people to think; they sit back and reflect upon action taken and decide whether it is just. There is no reason, therefore, why a picket line or any other kind of demonstration should be arbitrarily restricted to one person.
The second improvement my amendment would make is that it would allow working people not only to communicate information, as is the case under the present law, but to actively persuade others that their cause is just. It would permit secondary picketing; it would permit workers to go virtually anywhere in the community and make their views known by means of a demonstration and carefully constructed arguments seeking public support for their activities.
I ask again, is this not an elementary freedom that the rest of us take for granted in our society? Whether one is for or against the war in Viet Nam, for or against Canadian involvement in the Nigeria-Biafra civil war, we do not impose restrictions on people demonstrating and distributing factual information. We look upon it as a right, and indeed a duty, for people to actively seek to persuade others of the justice of their cause.
Once again, 1 think the same rights should be given to working people who are seeking support for a cause in which they believe. They should have the right, therefore, not simply to give out factual information but to actively persuade members of the community to follow their example. I stress that if violence or intimidation of any sort should occur as a result of this activity, there should not be any legal exemption in respect of working people, just as there is not for people taking part in any other kind of demonstration. The same kind of standards

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should apply. Where the law is broken and where there is intimidation or violence, those involved should be punished.
That, very briefly, is my argument in favour of the bill. I am indebted to the Hon. Sidney Green, Minister of Health and Social Services in the Manitoba government, for the general framework of my argument. He argued along similar lines in that legislature in January, February and March of 1967. Those who want to be very well informed on this question should look at his arguments as well as the arguments of those who were opposed.
As I see it, the arguments I have put forward are clear and convincing to anyone in a liberal, democratic society. I look forward to hearing from those who intend to speak on this bill, especially those who intend to oppose it. 1 hope they will come to grips with these arguments and not go off on some other tack simply to talk the bill out. I present this challenge to them: Do they think that the workers of our country should have the same rights as other citizens, or are they in favour of discriminatory laws?


Mr. Cullen:: Mr. Speaker, I should like to ask the hon. member whether he admits that workers, apart from picketing, have the same rights as other citizens to parade and have people join their parade; to effect a demonstration similar to those for or against the Viet Nam war? Do the workers not have the right to parade that other citizens enjoy?


John Edward Broadbent: Yes, but with respect, as one says around here, I think the point has been missed. Of course workers have the same right if they want to demonstrate for or against the war in Viet Nam.
[DOT] (4:10 p.m.)
The point I am making is that picketing should be termed a demonstration much like other demonstrations, so that the same criteria in respect of violence, and so on, would hold for picketing as for other demonstrations. We should not have separate laws for different types of demonstrations; we should have the same law for all.


Mr. Colin D. Gibson (Hamilton-Wentworth):: Mr. Speaker, I think if we examine the true meaning of picketing it will become obvious that the change in the Criminal Code suggested today is undesirable. Robert's Dictionary of Industrial Relations, the 1966 edition, defines picketing as "the actual patrolling at or near the employer's place of

business during a strike or other dispute, to give notice of the existence of a labour dispute, to publicize it, or to persuade workers to join the union, and to discourage or prevent persons from entering or going to work".
I am opposed to mass picketing because it goes beyond the purpose and creates dangerous side-effects conducive to inciting criminal conduct and infringing individual freedom. It also inhibits rational persuasion. The proposed bill is a reactionary suggestion which, if passed, would cause industrial relations to move backward rather than forward. I suggest that mass picketing would lead to competing picket lines, with the risk of physical violence. Today we should seek an end of the strike as a means of settling industrial disputes.


An hon. Member:: Would the hon. member permit a question?


Colin David Gibson: I would be glad to do so at the end of my speech. We seek a change in the mode of operation. The meeting of violent competing groups is an anachronistic, costly method of settling industrial disputes. It is not the type of system we are trying to encourage. We are trying to get away from mass confrontation and to the point where we can reason out these matteris behind the table, along the line followed in Swedish industrial relations where they do not have a strike from one year to the other. I suggest the worst way to promote industrial harmony is to pass a law which encourages assemblies of those with competing views on the streets of our great cities and industrial centres. When we have a large corps of people in large centres, I suggest the worst way of settling their arguments is by shouting at each other in the streets. I suggest this is not in the interest of labour and that labour should not be represented by the fistswinging in the alley.
These things are portrayed on television. It hurts the cause of labour when people see an act of brutality like a car turned over or people being pushed around and bullied by irresponsible elements in the labour movement who do not adequately reflect the views of the clean-cut, fine Canadian union worker. I believe that patient negotiation with modern methods of conciliation is preferable to the average industrial worker in Canada today, rather than the assembly of large numbers on the picket lines. This view is based on information I have obtained in my riding from talking to industrial workers in Hamilton. A good many of them are
December 12, 1969

fed up with strikes and hope there will never be another one like the last one which, because of pressures from the United States, was distorted. I hope we will see a straightening-out and a balancing of the situation.
I believe that patient negotiation is preferable and that the industrial worker does not want to lose three or four months employment during a year because of a strike.
The assembly of large numbers of people on picket lines where there are competing groups is an example of a strike of the worst type. Certainly the results of crowd action in some cases are not because of the strike but because of lack of respect for the individual rights of citizens of this country. There have been examples of lawlessness and assaults which have been unrelated to a strike. I think this is a situation which should be watched today.
I believe in picketing. I advocate the cause of labour, the everlasting need to assure industrial workers of income and security protection. I also believe that much harm is done by the competition created by competing crowds angrily confronting each other on the street. The result is inevitable. There are assaults, threats, damage to property, overturned cars and disrespect for civil law and the police. Let us not forget the police. I suggest that representative picketing is much more effective than coercive, mass picketing in the cause of labour relations. I believe public opinion is against the type of activity which creates an atmosphere of tension and danger.
I should like to quote from Reynolds "Labour Economics and Labour Relations" at page 277:
Physical violence of any sort is unlawful. The pickets may not beat up strikebreakers, injure their cars or cause them other physical harm. By the same token strikebreakers and company police must not assault the strikers, spray them with tear gas or cause them physical damage.
I believe the bill presented today would tend to support violence and civil disorder. Once again I should like to read a quotation; it is taken from the 1966 report of the Ontario Royal Commission on Labour Disputes:
Mass picketing by relatively large numbers in close ranks or in group formation, effective generally in obstructing entrances to plants or businesses, is not lawful in any western country.
The word "mass" in this context means potential intimidation and mob rule through coercion and fear, the use of the implied threat, which causes the destruction of security and freedom for the ordinary citizen. If 21545-521
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we are interested in the maintenance of law and order, we will not permit the erosion of controlling criminals in the field of watching and besetting. The advocacy of threatening intimidation must be curbed in the interest of preserving state control. If it is not, we shall end up with lawlessness and violence, which is desired by only the most primitive people. The evidence indicates that picket line advocacy is on the decline. The trend is toward less provocative means of persuasion.


Mr. Benjamin:: You would like to have it that way.


Colin David Gibson: Yes. I think we should find more effective ways than we now have. You want to go back to the reactionary methods of primitive people who use this type of threat.
The necessarily incidental invasion of individual privacy and the private rights of citizens, caused by mass picketing, are ends which society must restrain in order to obtain a just society by means of legal methods.


Leslie Gordon Benjamin: What is a just society?


Colin David Gibson: It is a society in which the people on two sides can sit down and negotiate together in good faith so that both sides can continue their economic development without losing time from work and being unemployed. That is what I mean by a just society. It is what we are striving to achieve, and we are moving in this direction rather than in the reactionary one of one mob confronting another. That will hot work.
Mr. Speaker, there is no doubt that violence at picket lines has frequently caused lasting bitterness and misunderstanding between individual citizens, as well as physical injury. This must stop. The present law regarding watching and besetting provides protection for the individual Canadian from the destruction of his right to come and go from place to place and to live without fear, apprehension or annoying inconvenience. I support the law as it now stands.


Robert Muir: Mr. Speaker, I do not intend to speak at great length on this proposed amendment. I hear someone say "Hear, hear". I feel very disappointed that someone may not be interested in hearing what I have to say. I see it was the Minister of Industry, Trade and Commerce (Mr. Pepin), my old friend "Smiling Jack".
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December 12, 1969
[DOT] (4:20 p.m.)
I wish to commend the hon. member for Oshawa-Whitby (Mr. Broadbent) for bringing in this amendment. He said in his opening remarks that he was only asking for the same rights as others. He went on to say that if anyone broke the law, he should be charged and brought to court, the same as anyone else. I do not think workers should be set apart and dealt with differently than people in the medical profession, the legal profession or any other group. I do not know why so many people seem to think that workers who belong to a union are a strange breed of people, that they are ready to fight all the time. I do not think that is the case. There are some very intelligent men in the unions. The hon. member who introduced the amendment went on to say that there is a lack of communication between workers and members of the public and perhaps this could be overcome by way of pamphlets or any other means that are non-violent.
There is room for dissent in this country, there is room for parades and demonstrations, but there is definitely no room for violence. It is strange, but violence can be found among people in any branch of society. You will find violence even among the jovial cabinet members who smile so much. At times they get cross, as do humble Members of Parliament. So do members of any organization, fraternity or group in society become cross. I am sure there are times when anybody will lose his temper and become a little violent. But I do not think that a worker who is a member of a union is more prone to violence than anyone else.
We hear so much about equality of opportunity. This is thrown at us by the propaganda machinery of the present administration. We hear much about participatory democracy, the just society, and all these high-faluting phrases which do not mean a damn thing as far as I am concerned. The Prime Minister's office and the Privy Council office are being expanded tremendously. They are doing nothing but political work and they are not interested in what is happening in the country. Their sole purpose is to keep this administration in power, and they have their hands full with that. We have had a few months of "pretty Pierre," and God knows what kind of a mess the country will be in when he is defeated in four years' time.
The hon. member for Hamilton-Wentworth (Mr. Gibson) gave us a very clear interpretation of picketing. He even told us where to

find it. That is very good; I am glad he knows what picketing means. He said he is opposed to mass picketing. He said it inhibits rational thinking and is a move backward rather than forward. He said he seeks an end to strikes, but he does not spell out the method. He says we will achieve a just society by sitting down and talking. He is looking for the millenium. He will find it as soon as he finds the just society, but he is not going to find a just society under this administration.
He wants to get away from mass confrontation and says that labour does not show the mailed fist. Then he speaks about workers and says what wonderful guys they are. He can speak so well out of both sides of his mouth that I think he is a candidate for the honour of having the greatest forked-tongue. He is doing a tremendous job in that field. He believes in picketing after damning everything pertaining to it. I ask whether he has ever in his short lifespan worked for a company or corporation with which a legitimately regulated union, approved by the law, tried to negotiate for months and in the meantime every effort was made by the company to destroy the rights of the workers in sneaky and underhanded ways, avoiding negotiation with reference to wages and hours of work, pensions, etc.
Has the hon. member ever worked for small wages, especially during the great days of the Liberal administration under Mackenzie King, when everyone was without a job until a guy named Hitler got them a job in September, 1939, and the Liberal administration took credit for it? Has he gone to the point where there was no alternative but to strike? That is the only thing that makes some people sit up and take notice.
Has he ever been on picket duty? Has he had a wife and children who had not much money because the company would not agree to negotiating with regard to proper living wages for its workers? I have been on strike, and I did not engage in violence. I played my part in the demonstrations, as a member of the union, and found this was the only way in which a decision could be reached after a long period of time. No one wants violence; no one wants war; no one wants the Viet Nam war-but regrettably it goes on. I was not lucky enough to have my father survive and send me to the best schools, and all that sort of thing, and look after me. I had to get out and work.
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[DOT] (4.30 p.m.)


Some hon. Members:: Oh, oh!


Robert Muir: Who
is that? Is it the buffoon from Calgary South (Mr. Mahoney) who is trying to interject? Mr. Speaker, I ask you to ask him to remain seated on his rather broad posterior, on what little brains he has. Let him remain seated, and when he wants to take part in the discussion he can do so. If he wishes, he can get up after I am through and have his say, but in the meantime let him sit on what little grey matter he has.


Some hon. Members:: Oh, oh!


Robert Muir: any of these fine gentlemen sitting across the way, who are always silent and have nothing to say except from their seats-


Some hon. Members:: Shame!


Robert Muir: Now
we have the member from Renfrew who used the pulpit to catapult himself into politics. He is making his maiden speech now.


Some hon. Members:: Shame!


Robert Muir: He
was never a success in the pulpit. Now he tries to be a success in politics. Poor individual; he has a lot to learn. Why doesn't he come in here with his collar backwards, and then maybe we will respect him.


Some hon. Members:: Shame!
The Acling Speaker (Mr. Bechard): Order. I think the hon. member's remarks are a little irrelevant to the subject.


Robert Muir: I am
very sorry, Mr. Speaker. When you get this type of interjection it does carry you away to other subjects. You will excuse me for that, sir. I apologize. In any event, Mr. Speaker, I agree with the hon. member for Hamilton-Wentworth that no one wants violence: I repeat that-definitely not. No one wants trouble. It is unfortunate that these things occur; but you do have elements, as I mentioned, within unions, within every type of organization, which do not know how to conduct themselves.


Some hon. Members:: Agreed.


Robert Muir: think I would agree with that, but you cannot blame all the members of a union, no
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matter what union it is. I remember reading an article regarding an organization of clergymen, and in fact the clergymen almost came to blows. Another cool-headed clergyman had to separate them. So even the clergymen lose their tempers at times. Even some clergy very close to us lose their tempers at times. I am sure, Mr. Speaker, since we hear so much about this participatory democracy, this just society, this great society which throws the amputees who fought in the last war on the streets, out of their jobs-


Colin David Gibson: On a question of privilege, Mr. Speaker, I suggest that to infer that the government is throwing veterans out of jobs is a great injustice to the greatest veterans' program ever carried out by any government in history.


Some hon. Members:: Hear, hear.


Robert Muir: Mr. Speaker, I wish the hon. member for Hamilton-Wentworth would indicate his question of privilege, because I don't know what it is. As far as I know, what I was saying did not concern him. Of course, maybe he, like myself, never served in the army.


Colin David Gibson: On a question of personal privilege, Mr. Speaker, I did serve overseas during the war and I was wounded in Normandy. I was going to refer to something the hon. member said earlier about not having served on a picket line. I regret I did not have an opportunity to do that, but when I left school I went right in to the army. I was wounded in Normandy, and when I left the army I went right back to school.


Some hon. Members:: Hear, hear.


Robert Muir: am glad to hear the report of the hon. member for Hamilton-Wentworth. I respect him for it, and he should be well respected for defending his country. But if he were in the same position as those poor men who lost their legs and arms, he should not be thrown out of a job any more than anyone else.


Colin David Gibson: You raised that issue in this debate.


Robert Muir: Very definitely I raised it, and I went on to point out that I never served in the Armed Forces because I lived in the hospital for many,

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many months, not as the result of a picketline problem but as the result of being very badly smashed up in the coal mines. I could not serve, no matter how big I may look. I compliment the hon. member for Hamilton-Wentworth. He did his part. Now we are away from that subject and I will get back to the bill before us.
The point is that notwithstanding the hon. member's fine quotations and the points he made-very weakly, I might say-the hon. member for Oshawa-Whitby (Mr. Broadbent) has a very good amendment. There is nothing wrong with it. I think if the hon. member for Hamilton-Wentworth would think a little more about it, he would realize there is not really anything wrong with it, because the people about whom he talks, who resort to violence, will be dealt with as they are dealt with now. That is definite. No one should be allowed to set fire to property, to damage property, to set fire to anything, no matter whether it be in picketing or in a mass demonstration of any type. I am sure the hon. member will agree with that.
In any event, just so we will not talk this bill out it might be a good idea to vote on it now. Mr. Speaker, what is the hon. member for Hamilton-Wentworth rising for? May I know that before I yield the floor to him?


The Acting Speaker (Mr. Bechard):: The
hon. member for Hamilton-Wentworth (Mr. Gibson) wants to ask a question of the hon. member.


Colin David Gibson: I have heard it suggested that increased picketing would not endanger the situation, and that if there is violence the court can order that there be no more picketing. But is that not a little late when somebody's car has been upturned, when somebody has been beaten up, when somebody's leg has been broken and windows have been smashed in a few houses? Is that not too late to get a court order? Is there not some alternative way in which the law could act to alleviate the damage now caused? I throw this out to the hon. member to comment on its merits.


Robert Muir: The
hon. member has thrown it to me. I was never a very good baseball player, but I have caught it. He is putting the same connotation on all members of a union no matter who they are. Some of the finest, upstanding citizens of this country are involved in unions. They are not only involved in the church, or

in the law society. You will find harum-scarums in those organizations, just as you do in unions.


An hon. Member:: Especially from around Renfrew.


Robert Muir: Very much so. So I answer the hon. member by saying he is making a blanket criticism of all members of all unions, and I say God help society in this country and in other countries if we did not have unions. Next thing we know the hon. member will be saying he is against unions, that men should not be allowed to organize in order to fight for their rights and to negotiate for them.
I think the hon. member is wrong in thinking these are the only members of society who engage in violence or condone it. That is not right. He is committing a grave injustice when he speaks for the Liberal party and says that. He speaks for the Liberal party, as he did a moment ago.


Colin David Gibson: You have not answered the problem with respect to the man with the overturned car or the broken window. You did not answer that.


Robert Muir: This bill should now go to a vote, Mr. Speaker.


Some hon. Members:: Question.


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I am pleased to express my opinion on the bill now before the House.
Bill C-16 is not new in this house. It seems to me that our friends of the New Democratic party should resort more often to that faculty we all have to various degrees, depending on our personality, which is known as imagination.
This bill was considered during the previous session and it seems to me that, quite frankly, it should have been introduced again under a different wording, instead of always using the same terms, without even changing its terminology.
The object of this bill, as previous speakers have said, is to permit peaceful picketing by any number for the purpose not only of communicating information but also of persuading other employees and people having business dealings with a struck company to support the cause of the picketers in the case, particularly, of a lawful strike.
It seems to me that, under our present legislation, whether at the provincial or the federal level, every Canadian can freely enjoy the privilege of engaging in a number of activities whenever there is picketing during a strike. As most members here, I am honestly doing my best to defend the rights of our Canadian workers. While I certainly intend, together with the other Liberal members, to go on doing whatever I can to improve their condition, I cannot help wondering why the sponsor of the bill wants to give the impression that he is their only true champion in the House. There is something rather biased in this approach.


An hon. Member:: That is true.


Louis Guy LeBlanc: Earlier, the hon. member jumped on the opportunity to put forward some opinions which I think irrelevant to the subject. He even mentioned demonstrations in Biafra. I wonder in which way our behaviour toward Biafra could at all help the Canadian workers. He says demonstrations are non-violent, with a few rare exceptions. I am sure the majority of Canadians or, at least, all the members of the House, are against violent demonstrations.
Why should anybody come here to talk about great principles and suggest that some
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political party might be in favour of violent demonstrations? One of the primary principles of the Liberal party is the respect of true freedom.
In Canada, this country we love so much, most citizens prefer to live in peace. For many years, we have been in that an example to the world. Indeed, the Canadian people have shown they wish to live in peace among themselves and with the rest of the world.
As regards the communication of information to the public by the workers, the latter have at their disposal the same means as those made available to members of parliament and other citizens to supply information. We must strive to provide reporters and other persons involved in the information field, accurate information, while not forgetting peace, goodwill and the improvement of the social or economic level we are all striving for.
The sponsor of this bill even managed to talk about the war in Viet Nam. I know there are workers and private citizens in Viet Nam, whom we must protect and assist, but it seemed to me, as he made us fly over the seas to take us to Viet Nam, that he was wandering quite a bit from the problem concerning the Canadian workers. He resorted to insinuation methods of which I and many other Canadians do not approve.
[DOT] (4:50 p.m.)
Is it possible to find in Canada, with certain exceptions, a right-thinking person who would be for the war in Viet Nam?
These are what I call misrepresentations which do not serve the Canadian workers at all. Since we are talking about freedom, I think I am relevant in view of the fact that in Canada, as in most other countries, a group of workers exercise its right to freedom by going on strike. Here again, at every level, freedom is being misrepresented.
Everyone considers himself an expert philosopher, which allows him to give his own definition of freedom and I must humbly admit that I am no more an expert than the others in this field but I do believe that the principle of freedom must not be based on emotions, feelings or instinct in general, but on reason. This is why I think freedom cannot exist without order. This is an old saying often heard in our circles.
As I said before, I think that the Canadian workers enjoy the same rights as others, and we get more evidence of this all the time. I know that, especially in the province of Quebec, almost every day something happens

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to prove that, as all the other classes of society in Canada, the workers take advantage of their right to picket lines and public demonstrations. In fact, we must recognize honestly that this right to hold public demonstrations is often abused and when a right is abused, in the name of individual or collective freedom, there is interference with the freedom of others.
This is why, in Canada, we fear massive picketings. I would not say that we oppose them, but we fear them because when they aim at protecting the freedom of one group, they can interfere with the freedom of others. And even if one speaks of the intelligence of labour leaders-I have friends among labour leaders, as most of us, by the way-many of them are very intelligent but in other respects, they are also human beings who have the right of association. But other interests can also be involved within their group, as those which the sponsor of this bill may have. Whether political or otherwise, those interests may sometimes conflict with those of the labourer or of the worker.
We have very intelligent leaders, but there are some who do not show any sense of responsibility but rather a sense of irresponsibility and use the means at their disposal, which are quite valid in principle, in order to intimidate the masses.
By appealing not to reason, rational understanding or common sense but rather to passions and instincts we interfere with freedom which we all want to enjoy.
Like the government and right-minded Canadian citizens did and continue to do we must unite in order to find the less irritating ways to solve the problems which are facing Canadian workers and all other Canadians.
I speak the truth when I say that some strikers, not to say many, have created quite a lot more problems than they have solved.


An hon. Member:: Question.


Louis Guy LeBlanc: Mr. Speaker, I am dealing with the subject. I remember the
words of the sponsor of this bill last year when he spoke of evasion and intimidation. Apparently, he was accusing the government by implying that it was resorting to tactics of intimidation and evasion with the Canadian people.
I think that the hon. member himself is using evasion and intimidation because, each year, he sponsors the same bill in order to be known as one of the great defenders of Canadian workers. I do not agree with that.
He spoke of non-violent persuasion, yet he introduces this bill by saying that we must make every effort to improve the system of picketing in Canada, whereas we probably enjoy the best system in the world.
According to him, to see several pickets is an impressive show. I know that it is always moving to see a group of human beings sincerely trying to solve their problems. It is for the same reason that it is impressive to work altogether in the House in order to settle the difficulties faced by workers and make the best suggestions possible to the government of Canada, of which we are proud, so that it will be as efficient as it can be.
To my way of thinking, the problems of the Canadian worker cannot be solved in 30 seconds or an hour. It is, however, possible to improve the picketing situation.


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


Robert Muir: On a point of order, Mr. Speaker. I have learned on good authority that the clocks are five minutes fast. Therefore, it is only five minutes to five and we have time to vote.


The Acting Speaker (Mr. Bechard):: Order. The hour provided for the consideration of private members' business has now expired.
At five o'clock the House adjourned, without question put, pursuant to standing order.

Monday, December 15, 19B9