1969-11-25

ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, in the past few days several questions have been asked of me in the House of Commons with respect to steps taken by the government of Canada to assist in the shipment of relief supplies to the civilian populations of the secessionist areas of Nigeria. Because it is desirable to set forth in a single statement the several aspects of Canadian efforts in this regard, the following brief chronological record has been prepared:
1.	In October 1968, Canadian Forces Hercules aircraft were despatched to the Nigerian area for use in carrying relief cargoes to Biafra. One of those aircraft joined the night airlift, the hazards and inefficiences of which were then and have always been recognized.
2.	In late October 1968, my personal representative, Professor Ivan Head, journeyed to Lagos for discussions with the Nigerian head of state, General Gowan, about the possibilities of additional relief shipments. It was as a result of that Canadian initiative that the Nigerians agreed to permit daylight relief flights subject to only a single condition, an undertaking by Colonel Ojukwu that he would not take advantage of the situation and fly in arms during daylight hours.

3.	The proposal for daylight flights on these terms was transmitted through the International Committee of the Red Cross and other channels to Colonel Ojukwu. When in November no reply had been received from Colonel Ojukwu, and the Nigerian government announced that it could no longer guarantee the safety of aircraft flying into Biafra at night, the Canadian government withdrew its aircraft. Canada stated at that time that it
would consider replacing the aircraft once appropriate daylight delivery arrangements were concluded.
4.	Not until June, 1969, some eight months following the announcement of the daylight relief flight proposal, did the Biafran authorities comment officially upon it. Not even then did Biafra accept the idea of daylight relief.. It only said that, subject to five conditions, it would be "willing to consider" daylight flights.
5.	Since early 1969, and with the knowledge of the Nigerian government, contacts have been made and discussions about relief and other measures subsequently held by Canada with representatives of the Biafran regime. The Secretary of State for External Affairs has spoken with Biafran authorities in New York; various Canadian officials have met with Biafran representatives in London, Ottawa, Geneva and New York, and are continuing to do so in one or more of these places whenever it appears appropriate to do so. It is in this light Mr. Speaker, that my statement of last week must be viewed when I said there had been contact at the ministerial level. This contact was made at New York; of course there have been other contacts at the official level in the various capitals, as I have just said.
6.	In an effort to overcome the delivery difficulties the Canadian government has consulted continuously with a number of other donor governments which make up what is known as the Hague Group. It has consulted as well with the United States government. That government, early this year, took the recognized lead in Nigerian relief activities when President Nixon appointed Ambassador Clyde Ferguson as his official representative to co-ordinate humanitarian assistance to Nigeria.
[DOT] (2:10 p.m.)
7.	In June of this year I sent my representative back to Nigeria to ensure that General Gowon's single condition for daylight flights remained unchanged. Professor Head then journeyed to Tanzania on my behalf to speak to President Nyerere, the leader of an African country which had recognized the independence of Biafra, about all aspects of the Nigerian situation.

November 25, 1969
Minister's Statement on Biafran Relief
8.	On July 10, in an attempt to meet Biafran contentions that daylight flights would prejudice its military position, the Secretary of State for External Affairs offered to send Canadians to the area to act as inspectors of relief cargos.
9.	In the early summer the International Committee of the Red Cross began negotiations in Geneva in an attempt to solve the flight impasse which by then had reached a critical point as the Nigerian Air Force increased its efforts to prevent night flights of arms from reaching Uli. After one of its aircraft was shot down, the ICRC halted its night flights.
10.	A Red Cross proposal for daylight flights-I repeat, Mr. Speaker, this whole business of daylight flights was begun as a result of Canadian initiative-the whole idea was brought up as result of Canadian initiative which followed upon our obtaining from General Gowon his consent to such flights.


Mr. Bell:: Wonderful fellows!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Apparently the opposition does not believe in daylight flights.


Mr. Sianfield:: Yes.


Thomas Miller Bell: We do not believe you.


Mr. Woolliams:: You are reading it very well. A little on the quiet side.


Mr. Diefenbaker:: We do not believe in alibis for inhumanity.


An hon. Member:: Smile on.


Pierre Elliott Trudeau: Still thinking of those Christians over there, Mr. Diefenbaker?


An hon. Member:: You do not even know anything about Parliament.


Mr. Speaker:: May I take the liberty of reminding the right hon. Prime Minister that members are to be referred to by constituency and not by name.


An hon. Member:: He doesn't know.


Pierre Elliott Trudeau: 10. A Red Cross proposal for daylight flights was given to both Nigerian and Biafran representatives in Geneva on August 1. Biafra accepted the proposal in principle on August 14 but made its acceptance subject to the condition that it would continue to use Uli airport for its own operations. The Biafrans offered no evidence that

they were prepared to meet the single Nigerian request that arms not be flown in during daylight hours. The paper setting out "technical modalities" of daylight flights, drawn up by Professor Freymond of the ICRC and Dr. Cookey of Biafra, and circulated by the Biafran authorities, must be read in light of this Biafran condition.
11.	In late summer the ICRC sent a team of representatives to Nigeria in an attempt to conclude a daylight relief agreement with both sides, no agreement having been reached with either side up to this point. On September 13 the federal Nigerian government and the ICRC reached an agreement for an internationally-inspected and militarily-inviolable daylight relief airlift. The agreement included, at Nigerian insistence and reply to the Biafran condition for what amounted to daylight military use of Uli airport, a clause that the agreement should be without prejudice to military operations by the Nigerian government.
12.	The Biafran regime refused to conclude an agreement with the Red Cross. Biafra, instead, demanded in a press statement dated September 15 "a third party guarantee which will ensure that daylight flights are not used to military advantage by Nigeria." The statement continued to say that "the only guarantee acceptable to Biafra is that of a third government or international organization of a political character."
13.	The governments of Canada and the United States immediately attempted to provide assurances to meet this understandable Biafran fear of military disadvantage. Discussions toward this end took place in Ottawa and in Washington and involved officials of the Prime Minister's office and the Department of External Affairs and officials of the White House and the Department of State. Included in these discussions as one element of these assurances was a proposal for Canadian observers to travel on board relief aircraft.
14.	Canadian officials subsequently met with Biafran representatives in Geneva. Ambassador Ferguson, who had been agreed upon as the person who should convey formally these offers, travelled to Africa. As set forth in the Washington statement, dated November 12, 1969, the Biafran authorities on October 24 formally rejected the offers which were designed to protect Biafra from military disadvantage, which is exactly what they had asked for.
November 25, 1969

15.	Canadian officials in Geneva have been informed by Biafran representatives that Biafra demands more than military assurances; that, in addition, guarantees of a political nature are required in order to break the impasse. The Canadian government is not willing to give the political guarantees demanded as these would be tantamount to recognition of an independent state of Biafra, and an overt interference by Canada into the political affairs of another country, contrary to the resolutions of the Organization of African Unity.
16.	During the past several weeks, the Secretary of State for External Affairs has continued his discussions about Nigeria with some 25 other foreign ministers, many of them from African nations, at the United Nations. I talked to Secretary General U Thant about the problem in New York on November 11 as I had a year earlier. Canadian leaders have pursued the Nigerian issue with the leaders of two African countries who have visited Ottawa this fall. They were President Hamani Diori of Niger and President Nyerere of Tanzania. I can say that the unanimous view of these African leaders is that the Organization of African Unity resolutions must be respected.
17.	The government is now considering, as stated a few days ago, alternative means of delivering relief to Biafra in daylight. It does so while agreeing entirely with the recent statement of United States Secretary of State Rogers: "Daylight flights under agreed procedures . . . remain the only practicable scheme for an immediate and substantial expansion of relief operations."
18.	The government's concern remains, Mr. Speaker, as it has throughout, and as does that of hon. members opposite and indeed all Canadians, with the innocent civilian victims of this tragic war. Delivering adequate food and relief supplies to these people must be our resolve, notwithstanding the disinclination of the Ojukwu regime to accept it, except in return for political advantage.


Robert Lorne Stanfield: Mr. Speaker, in finishing his statement the Prime Minister passed very harsh judgment on Colonel Ojukwu. We are not in a position in this House to assess the faults of those involved in this dreadful disaster. But we are in a position, as it is our duty to do, to pass judgment on the government of this country and the Prime Minister of this country for the way their responsibility in relation to this matter has been discharged.
Minister's Statement on Biafran Relief


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: The Prime Minister has really given us nothing more than a catalogue of excuses for inaction.


An hon. Member:: Shame!
[DOT] (2:20 p.m.)


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: The Prime Minister and his government colleagues are trying to escape the indictment they deserve, because this issue has profoundly affected the Canadian people. A government that proclaims participatory democracy on the one hand cannot be indifferent when the people respond. The people have left no doubt about their anger over government inaction.
Let us be under no illusions, Mr. Speaker, about the purpose of the statement made today by the Prime Minister. Hundreds of thousands of Canadians watched a television show on Sunday night in which an important statement made by the Prime Minister in this House was shown to be misleading.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: The Prime Minister was asked in the House whether there had been any recent requests to the government of Canada by Canairelief for relief assistance and aid. On November 17, as recorded at page 874 of Hansard, the Prime Minister said:
Mr. Speaker, I cannot speak of any recent request. There may have been some; I do not know.
This is a subject of great importance, Mr. Speaker. If it has been recognized to be of great importance, why did the Prime Minister not make it clear to the House at the first opportunity that such a request had been received from Canairelief? Even during the course of his long statement today he did not disclose that such a request had been made by Canairelief.
We can all agree, Mr. Speaker, that the arrangement of daylight flights would be most desirable and satisfactory. The Prime Minister indicated that this idea originated with the government of Canada. I doubt that very much, but I do not rise to quarrel about that.


An hon. Member:: You're all heart. Really big!


Robert Lorne Stanfield: I ask the Prime Minister to tell the House some time the conditions of a political nature which the government of Biafra has attached to its recent position with
November 25. 1969
1196	COMMONS
Minister's Statement on Biafran Relief regard to daylight flights. What are these conditions? Certainly for a long time the actions and activities of the government of Canada with regard to Biafra were dilatory and the government refused to talk to anyone associated with Biafra. Professor Head, the personal representative of the Prime Minister, has never done so to my knowledge, certainly not when he was over there. When Professor Ferguson was appointed by President Nixon he had discussions and tried to make the necessary arrangements with the Biafrans. Granted, Mr. Speaker, we want to see arrangements regarding daylight flights. The Prime Minister puts all the blame on Colonel Ojukwu, the head of the Biafran government.


Some hon. Members:: Shame!


Robert Lorne Stanfield: I doubt that it is quite as simple as that. I ask the Prime Minister why the government of Canada is not prepared to do what it can to help solve the problem. Why has the government refused to assist Canairelief which has been and continues to transport substantial relief to the starving people of Biafra? Why, Mr. Speaker? Two requests made to the government by Canairelief have been refused. I understand that the most recent request is still unanswered. Why?
The Prime Minister has accused Colonel Ojukwu of indifference toward daylight flights and the kind of relief that could be brought by daylight flights. I must charge the Prime Minister with stubborness regarding aid that could be used to bring relief through night flights.
For over 16 months the people of this country, the opposition parties and many private organizations outside this country have been trying to move the government to action. I shall not go over the whole history as the Prime Minister did in his statement; there is no need. We tried to get the government of Canada to protest the shipments of arms from the United Kingdom and other countries but the government refused. According to a recent announcement, shipments of arms from Britain are to increase. We tried to get the government to support the early efforts of the Nixon administration in the United States but the government refused. We went on trying to get them to contribute to the efforts of Canairelief. Again the government refused. Canairelief has received support from the United States government in the amount of some $750,000, without which it could not have carried on its lifesaving operations. Now it appears that the government of the United


States is likely to withdraw its support of Canairelief because the Canadian government will not support its own citizens who are sending food and medicine to the war victims.


Some hon. Members:: Shame!


Robert Lorne Stanfield: The people of Canada are aroused as never before by what I call the callous stubbornness of the Prime Minister-I am not going to accuse him of indifference- in the face of one of the great human tragedies of our time. Shortly after the Nixon administration took office and began to take some initiative in this area we pleaded with the government of Canada to support those measures but the government refused until November 12 when a statement was made by the United States Secretary of State, Mr. Rogers, which appeared to suggest that the United States government was backing away from the problem. Then the government of Canada courageously rushed to Washington's side.
I understand that about 1,500,000 people have starved since early in 1968 and that perhaps 2,000 a day are dying of starvation at this moment. Let us do what we can. Let the Prime Minister and his colleagues act to assist Canairelief in taking supplies to that country by night; let them provide this assistance rather than come to the House with a long statement designed to whitewash the whole picture and excuse the government of Canada from discharging its humane responsibility.
The Prime Minister has passed a harsh judgment on Colonel Ojukwu; the people of Canada will pass a harsh judgment on the Prime Minister for his failure to act in an area in which Canada can be of assistance, night flights, and I plead with the right hon. gentleman to move as rapidly as he can to make this important and helpful assistance available.


Some hon. Members:: Hear, hear.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have never listened to any statement made in this House by the present Prime Minister or by any other prime minister which caused me greater unhappiness or deeper regret than the statement we have just heard.
There is one thing in the statement which I am prepared to welcome: it is clear the right hon. gentleman is now aware of the great concern felt by the Canadian people about the immense human tragedy which has already cost between one million and two million
November 25. 1969

lives and which threatens to exterminate a whole people. What I find so regrettable about the lengthy and evasive statement we have heard is that there was no mention, as the Leader of the Opposition has pointed out, of the one thing, amid these different alternatives, which is staring the people of Canada in the face. The obvious place where our help should begin is in the operation which, despite danger and difficulties, is in fact being carried on by Joint Churchaid, to which Canairelief has given tremendous and heroic assistance.
[DOT] (2:30 p.m.)
Why is it that this channel of help is being neglected? It is suggested that Colonel Ojukwu should accept in their place daylight air relief flights. Is the Prime Minister aware-if he is, he has shown no sign of it-that the International Red Cross operation contemplates only the delivery of some 90 tons of supplies over a three week period under the control of the Nigerian army and air force authorities?
Canairelief is a voluntary organization. I should not say Canairelief because the organization also includes other voluntary bodies that have banded together in Churchaid, but the joint church operation is flying in 200 tons of supplies nightly. Is Colonel Ojukwu or anybody else being asked to accept a three weeks arrangement, tainted as it is, which would involve a much smaller amount of supplies? Is this going to help Colonel Ojukwu's own people? That is what the Prime Minister suggests. It is ridiculous to pretend that this operation cannot be assisted without causing some breach of protocol or improper intervention in the affairs of another nation. As a matter of international law the right of humane intervention has been recognized for centuries, and is still clearly attested to by recognized authorities in the field.
The most important factor of all has already been stated by the Leader of the Opposition, who pointed out that Canairelief operations have indirectly been supported to the tune of $800,000 by the United States government through payments to church agencies. The U.S. government can assist church agencies to do this job, and they are the only ones who are relieving starvation. Why cannot our government do the same thing? Earnest requests have been made by many Canadians to this effect.
DEBATES	1197
Minister's Statement on Biafran Relief
There has been a long and elaborate discussion on the subject of daylight flights, and I noted certain significant omissions in the statement of the Prime Minister. He referred to a document that he did not admit was an agreement. Yesterday the Secretary of State for External Affairs said that the only agreement was with Nigeria. I have in my hand what purports to be a copy of an agreement entered into by the Red Cross agency and the Biafran authorities on August 27, 1969, providing in detail for daylight flights. The statement, which is so loosely made, that Colonel Ojukwu has refused to allow daylight flights is not in accordance with the fact.
After this agreement was signed the Red Cross went to the federal Nigerian government and secured another agreement. What does this agreement provide? Paragraph 4 reads as follows:
Routings to and from Uli, call signs, radio communication, emblems, types of aircraft and flight schedules shall be as agreed from time to time by the ICRC with the Nigerian Air Force and the Nigerian Army.
Is it not perfectly clear that this is asking the Biafran authorities perhaps to sign their own death warrants? It is certainly asking them to surrender. What does the agreement go on to provide? The Prime Minister made something of the fact that Colonel Ojukwu was asking for certain military considerations in the proposals that he made. Paragraph 6.2 of this draft agreement between the International Red Cross and the Nigerian federal government provides:
This agreement shall be without prejudice to military operations by the federal military government.
Perhaps both sides are using propaganda in this battle, Mr. Speaker, and it is not surprising that they are. The Biafrans are fighting a war of survival and it would not be reasonable to expect them to agree to anything which might lead to their military defeat.
But there is more than just the propaganda of one side behind this matter. As long ago as last January General Alexander, a British member of the observer team in Nigeria, according to The Economist of January 11 spoke of a Nigerian plan, in collaboration with the British government, to propose certain relief measures which for military reasons would be unacceptable to the Biafran authorities, and which could then be used for propaganda purposes by blaming Colonel Ojukwu for Biafran starvation. This is precisely what has occurred. Indeed, when talking about propaganda it seems to me that the
1198	COMMONS
Minister's Statement on Biafran Relief Prime Minister and his colleagues have been the victims of Nigerian and, I hate to admit it, British propaganda in this regard.
In the name of humanity I implore the government to be big enough to look at this problem again. From time to time the government has stated that if its efforts to assist the International Red Cross are not successful, it will look at other avenues and approaches. Therefore let me end by urging the Prime Minister and the government to listen to what the Canadian people are saying, and to do something about helping the only agency that is relieving starvation in Biafra. The lives of hundreds of thousands depend on action of that sort, and there is no good reason for not taking it. I believe that the people of Canada demand that this action be taken.


Mr. Real Caoueite (Temiscamingue):: Mr. Speaker, we have listened carefully to the 18-point statement by the Prime Minister (Mr. Trudeau) concerning the tragic situation in Nigeria and Biafra.
Mr. Speaker, this delicate, serious and very complex situation will not be solved by miracles, and the Prime Minister did not come up with a practical solution. In my opinion, he cannot make a miracle to set things right, not any more than the Leader of the Opposition (Mr. Stanfield) who censures the government for its inaction but fails to recommend a concrete solution; or again, the NDP member who has just told us about the great human tragedy taking place in Biafra.
Mr. Speaker, we Creditistes are also members of the opposition and we sincerely believe that one of the 18 points expounded before the House is based nevertheless on actual facts and research. I say this not to flatter the Prime Minister or the government but out of respect for the truth.
Some Canadian officials went there, not to have a party, but to observe and study the situation. They met with representatives of both sides and even travelled to Great Britain to confer with Nigerian authorities. As for those Canadians, whoever they might be, who went to Nigeria, they have discussed the problems facing that country.
When either Nigeria or Biafra lays down conditions concerning relief to be sent by Canada, be it drugs, food, clothing, medical care, etc., it seems to me that we should in this House stop tearing one another to pieces,

DEBATES	November 25, 1989
as the Leader of the Opposition and the spokesman for the New Democratic party are doing at the present time.
We cannot always be at one another's throat and I shall speak straight out: if the Leader of the Opposition were in office instead of the present Prime Minister and told us what he would do in such circumstances, we would listen to him carefully.
Nobody wants more than we do to bring relief to those who are in distress- and are being massacred in Nigeria and in Biafra. But all the same, we must be realists and coldly look into the possibilities offered us to help them. We are asking the parties concerned to allow us to help them through the Red Cross, but they do not even want to hear of it. Are we to settle Biafra's future in the House of Commons of Canada? Let us be logical and consistent with ourselves. I hear the hon. member for York South (Mr. Lewis) grumbling. This is all he can do in the House of Commons. Besides, he also does it outside.
No one here, except perhaps the hon. member for York South, can tell me that he is more anxious than we are to settle the dispute between Nigeria and Biafra. We want to help. However, as I said earlier, it is not by quarrelling with one another that we shall solve that problem.
Let us examine the solutions instead of saying simply to the Prime Minister: You are wrong, you have no solution to offer, you are arrogant toward Biafra, you do not want to commit yourself to supply assistance. I would like to know why logical, reasonable and truly human solutions are not suggested to the government to help parliament and the people of Canada to settle the disastrous situation prevailing in Nigeria and Biafra.
In our opinion, it is possible to work objectively if we offer solutions and ask for the assistance to those who are directly responsible. If the colonel of some country refuses to accept our aid and to co-operate, how can we undertake any action?
We are asked to intervene in the affairs of another country and to take position in favour of one side or the other from the political point of view. Mr. Speaker, if those leaders are out merely to save their political skins, it is time for the populations to find other leaders who can get along better with other heads of state.
November 25, 1969

[DOT] (2:40 p.m.)



FINANCE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise to ask leave of the House to make a motion under Standing Order 43, which reads as follows:
A motion may, in case of urgent and pressing necessity previously explained by the mover, be made by unanimous consent of the House without notice having been given under Standing Order 42.
I shall heed your admonition of yesterday as to the brevity of one's explanation. In fact, I think no explanation of my motion is necessary at all. I shall simply send a copy of it to you so that when I have read it you may be in a position to put it to the House. I move, seconded by the hon. member for Vancouver East (Mr. Winch):
That the salary and indemnity of the Minister of Finance be reduced to $30 per week, and that he report to Parliament this day six months hence on whether it is possible for one person to live on this amount.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Has the hon. member the unanimous consent of the House?


Some hon. Members:: Agreed.


Mr. Speaker:: I heard at least one negative.


Some hon. Members:: Oh, oh!



ORAL QUESTION PERIOD


[Stage Direction]
Hon. Robert L. Stanfield (Leader of the
Opposition): Mr. Speaker, I should like to address a question to the Minister of National Defence. Does the government of Canada share the view attributed to the Prime Minister of the United States, as expressed today, that all chemical and-
An hon. Member:: You mean the President.


Robert Lorne Stanfield: The President of the United States, rather.


Stanley Howard Knowles: The
same thing.
Inquiries of the Ministry


Robert Lorne Stanfield: There is so much confusion these days, Mr. Speaker, between "Prime Minister" and "President"-


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: I do not want the minister to be too confused so perhaps I should start again. Does the government of Canada share the view expressed by the President of the United States that all chemical and biological warfare weapons should be destroyed immediately and research discontinued?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, I should like to put
the answer the other way around. It is the President of the United States who joins Canada in support of the resolution by Britain.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker.


An hon. Member:: Now who is confused?


Robert Lorne Stanfield: There seems to be a lot of static over there.


An hon. Member:: No, just donkeys.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: What does the government propose to do with any stocks of chemical or biological warfare weapons it may have on hand, and what does it propose to do with any research facilities of the Defence Research Board such as those in Alberta and others that may be located in the country?


Léo Alphonse Joseph Cadieux: Mr. Speaker, I believe I have repeatedly said in the House that we have no such stocks on hand. We have never stored biological or chemical warfare agents. What we are involved in is research of a defensive nature so that if such a thing should happen to us we will be in a position to defend ourselves.


Robert Lorne Stanfield: Is it then the intention of the minister to continue with the research efforts undertaken by the government of Canada although the President of the United States has today indicated that research ought to be discontinued?


Léo Alphonse Joseph Cadieux: I did not check whether the President of the United States said research was to be discontinued in that country. We have no such intention in Canada so far.
1200	COMMONS DEBATES	November 25, 1969
Inquiries of the Ministry


Mr. David Lewis (York South):: Mr. Speaker, may I ask the Minister of National Defence whether the quadripartite agreement, under which research at Shirley's Bay and Suffield, Alberta, is carried on, is still in force and whether, since one of the parties to the agreement, according to President Nixon, is giving up research-perhaps I should say, not research of the kind that is called defensive- the government is ready to enter into negotiations with the other three parties to the agreement with a view to abandoning it?


Léo Alphonse Joseph Cadieux: I have a copy here of the President's announcement. He said he is asking the United States Senate to ratify a 1925 Geneva protocol prohibiting the use of gas and bacteriological warfare equipment. I do not seem to see any reference to research.


David Lewis: Mr. Speaker, perhaps the minister will undertake to have his staff provide him with the full statement which does contain a reference to the abandonment of research in that field in the United States as well as to the destruction of present stockpiles of weapons. If he finds through later intelligence that this is the case, will he consider entering into negotiations to cancel the quadripartite agreement.


Mr. Speaker:: Order, please. It seems to me that the question asked as a supplementary has become highly hypothetical. Perhaps it might be asked again on another occasion or later during the session.



THE CANADIAN ECONOMY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: My question is for the right hon. Prime Minister and it arises out of the action of the International Nickel Company in increasing its prices by nearly 25 per cent. Coming as it does upon increases in prices of cars, steel and oil, I want to ask the Prime Minister what action, if any, the goverrtment intends to take with respect to this latest increase in the price of nickel?


Pierre Elliott Trudeau: I have not consulted the minister and I do not know whether he has consulted the members of the Prices and Incomes Commission on this matter but, as I have said in previous weeks, any action of the government beyond that of a merely suasive nature depends on the legal authority which the government

may have to initiate such action. On the basis of the research we have conducted thus far we are not prepared to make a government announcement on whether or not we have the power to control prices within provinces.


Thomas Clement (Tommy) Douglas: I have a supplementary question, Mr. Speaker. In view of the fact that Mr. Larry Sefton, a director of the United Steelworkers of America, has issued a request for a public inquiry into the increase in the price of nickel, to deal both with the wages paid and the profits made by the industry, is the government prepared to accede to this request and have a public inquiry into the price increase and into the wage and profit level of the industry?


Pierre Elliott Trudeau: Previously when price or wage increases were announced, various members of the House and people throughout the country have asked for such an inquiry. We are realizing that we cannot set up an inquiry into every price or wage increase in every area of the economy and that it would be a mistake to answer yes to every request for such an inquiry because we might end up having more inquiries than we can conduct. That is why the government is trying to establish an over-all approach to control inflation with the means we have. We do not mind setting up inquiries or having parliamentary committees inquire into the subject, but I repeat that it will take some policy orientation by the government in order to know what precise areas of inquiry we want to embark upon if we do not want to have more inquiries than we can handle.


Thomas Clement (Tommy) Douglas: I have one last supplementary question, Mr. Speaker. In view of the fact that the government is making an appeal to all sectors of the economy to prevent inflation, does the Prime Minister agree it would be of value to have an inquiry to establish whether or not these price increases are justified?


Mr. Speaker:: Order, please. The hon. member's supplementary question is argumentative.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. In view of the substantial increase in price announced by the International Nickel Company and another Company, following upon the increase in steel prices, has the government decided that its attack on inflation based upon fiscal and monetary
November 25, 19B9

restraints is not adequate? Has the government decided that other policies are necessary and, it so, when may we expect some announcement as to what these policies will be?


Mr, Trudeau:: Of course this approach is not adequate in itself and other policies are needed. That is why the government in the past couple of years has been acting, through monetary and fiscal policies, to combat inflation with the means that we have available to us under federal jurisdiction. That is why we have, for the first time in 13 years, a large budgetary surplus. That is why we have applied these tough restraints and guidelines to cut down expenditures in departments and areas, which do not always have the approval of the opposition.


John George Diefenbaker: Raising taxes.


Pierre Elliott Trudeau: But we have said before that there is danger in applying certain policies which are under federal jurisdiction and that is why we prefer people to apply voluntary restraints, because obviously the policies we can follow under our jurisdiction may entail other types of evil which it would be desirable to avoid.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. Is the government yet prepared to indicate to companies and to others what these voluntary restraints consist of in their particular circumstances?


Pierre Elliott Trudeau: I believe the Prices and Incomes Commission has indicated this quite clearly in its negotiations with the industries, with the unions and with the provincial governments. The Commission has also indicated this clearly to the Canadian government and we have applied our guidelines policy with this in mind. These are the guidelines which are being suggested by the commission. If the commission reports failure, we will have to take other means.


Mr.   Gaeian-J. Serre@Nickel Bell: My supplementary question is directed to the Minister of Industry, Trade and Commerce. Can the minister advise the House on the effect that he anticipates the increase in the price of nickel will have, first of all, on Canadian markets and, second, on our export markets?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: The hon. member should bear in mind, as he well knows, that 96 per cent of Inco's nickel production is exported from this country. So obviously the 21545-61
Inquiries of the Ministry effects on the domestic market will be limited. At the moment my department is looking at the domestic effects on industrial consumers of nickel. At first sight these effects seem to be quite small. But I cannot prevent people from jacking up prices from say 5 per cent to 20 per cent. I suggest that members read the communique issued by Inco explaining its decision. It is very educational and apparently good enough for the premier of Ontario who said, according to a radio news item this morning, he had no objection to its content.


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a supplementary question for the Prime Minister. In view of the fact that the Prices and Incomes Commission is busy with over-all policies, would he consider having a standing committee of the House examine the price increases in steel and cars, to mention two, pending an over-all report? I think people would like one or two inquiries.


Pierre Elliott Trudeau: I think people would like one or two inquiries and they are getting more than that from the Prices and Incomes Commission. But as I said a moment ago to the hon. member for York South, the object is not merely to inquire into a situation but to act on the basis of the findings of the inquiry. We have not yet heard that the opposition feel that the federal government can regulate contractual settlements under provincial jurisdiction in peacetime. If this is their position it would be interesting to hear them say so because we are having some trouble with the constitutional problems inherent in this matter.



AGRICULTURE


David Réal Caouette: Mr. Speaker, I have a question for the Minister of Agriculture.
It is indeed common knowledge that the dairy industry receives subsidies. Is it true that the government or the department are about to reduce these subsidies?


Mr. Speaker:: I am under the impression that this question was already raised yesterday. If I am mistaken, the minister could reply.


Hon. H. A. Olson (Minister of Agriculture):: The hon. member can look at the statement I

November 25, 1369
Inquiries of the Ministry made in the House a week ago today, I believe, and he will notice that we are asking the dairy industry to help us design a support program that can be financed with $115 million in the next fiscal year.


Mr. Roch La Salle (Jolieiie):: Mr. Speaker, I have a supplementary question for the Minister of Agriculture.
Will he be in favor of holding the emergency debate asked for by the Quebec Milk Producers Association?


Mr. Speaker:: I do not think the question thus asked is in order.


Roch La Salle: As this question seems to me of the utmost importance, since the Quebec Milk Producers Association has already set up a petition to be presented to hon. members- and that entails a considerable output of money and energy-could not the minister tell us whether he will support the holding of that urgent debate, in order to save this expense to the Milk Producers Association?


Mr. Speaker:: The hon. member is asking the minister to give his opinion on a petition which could eventually reach the House, and I do not think the question is in order.


EXTERNAL AFFAIRS
John George Diefenbaker: Mr. Speaker, my question is directed to the Prime Minister. In view of the general attitude of frustration among Canadians over the failure of the government of Canada to come to the assistance of the Biafrans, even though in so doing it might cause antagonism on the part of the Organization of African Unity, will the Prime Minister make a day available this week for the discussion of this matter? I believe Canadians as a whole are asking for that. Indeed, in my mail today I received $300 in contributions by different people across Canada. Will the Prime Minister not give the House an opportunity of discussing this matter, instead of producing all kinds of alibis for inaction?


Mr. Speaker:: Order, please.
Right Kon. P. E. Trudeau (Prime Minister):
Mr. Speaker, I gladly accede to this very reasonable demand by the right hon. member for Prince Albert, and I suggest it be Thursday of this week.


John George Diefenbaker: Good. Fine. That is what we want.


Stanley Howard Knowles: Is that a commitment, Thursday of this week?


Mr. Benson:: It is an opposition day.


Stanley Howard Knowles: On
a point of order-


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, as I indicated, Thursday will be an opposition day this week.


Mr. Speaker:: The hon. member for Calgary Centre.


John George Diefenbaker: On a point of order, Mr. Speaker, that is just playing with the problem.


Some hon. Members:: Oh, oh!


John George Diefenbaker: We want a day set aside, and not an opposition day, so that the matter can be discussed, with none of that playing around in which the Prime Minister has been indulging for the last 18 months.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: Mr. Speaker, the opposition is telling us this is a very important subject. I am suggesting that they take Thursday of this week to deal with it. The opposition is saying this is no good-


Mr. Speaker:: Order, please. I have to bring to the attention of both the right hon. gentlemen that-


Mr. Muir (Cape Breion-The Sydneys):: You
still don't know where Biafra is.


Pierre Elliott Trudeau: I have been there. That is more than you have.


Mr. Speaker:: Order, please. I recognize that the hon. member for Winnipeg North Centre will want to rise on a point of order in a moment, but I wish to say that having heard him indicate that he wanted to rise on a point of order I was trying to re-establish order in the House before we have the point of order.


Stanley Howard Knowles: Mr. Speaker, my point of order relates to the fact that it is the right of the opposition to request the days it shall have as allotted days, and there have already been discussions and

November 25, 1969

arrangements made under which a week from Thursday is to be an opposition allotted day. Is the President of the Privy Council now to say it is this Thursday because the Prime Minister has made the mistake of committing this Thursday for this question? If so, I say he is violating the rights of the opposition.


Some hon. Members:: Hear, hear.


Donald Stovel Macdonald: Mr. Speaker, on the same point of order, I would point out that while the opposition of course can pick whatever subject matter it wants, it is the prerogative of the government to name which particular days will be available for opposition days. I am prepared, however, if hon. members think it important, to change the order of business and make this Thursday an allotted day for them. If they think the question of Biafra is important, then they can use it for that purpose. If they do not think it is important, then we will carry on with the business as announced.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. I have to bring to the attention of hon. members that the question period will soon come to an end and I would think we should go on to the many other questions which hon. members seem to be intent on asking during the question period.


John George Diefenbaker: Mr. Speaker, on a point of order, this House cannot be trifled with in this manner.


Some hon. Members:: Hear, hear.


John George Diefenbaker: The Prime Minister
smiles and laughs about Biafra.


Some hon. Members:: Shame.


Some hon. Members:: Oh, oh.


John George Diefenbaker: He gave his undertaking that on Thursday we would be given an opportunity to deal with this question. Surely, he is not going to be repudiated by the government house leader.


Edgar John Benson: He wasn't.


Mr. Speaker:: Order, please. It is still not a point of order. Some minutes ago the Chair recognized the hon. member for Calgary Centre. Perhaps the House would allow me to give him the floor now.
Inquiries of the Ministry NATIONAL DEFENCE


Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, I wish to direct a question to the Minister of National Defence. What is the purpose of posting small military detachments of three or four persons each in Yellowknife and Whitehorse?
Hon. Leo Cadieux (Minister of National
Defence): Mr. Speaker-


Mr. Speaker:: Order, please. The question as asked does not indicate any urgency. I really do not know what is behind the hon. gentleman's question, but certainly as asked there is no urgency that is apparent to the Chair. The hon. member for York South.



David Lewis: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. In view of the recent revelations of unspeakable atrocities committed by the United States forces and the South Vietnamese in Viet Nam, and the allegations of similar atrocities by the Viet Cong and North Vietnamese, may I ask has the government been in touch with our representative on the International Control Commission for the purpose of initiating some sort of relevant inquiry?


Pierre Elliott Trudeau: I will inquire, Mr. Speaker. I do not know the answer.


David Lewis: A supplementary question, Mr. Speaker. When he is making inquiries, if it has not already been done would the Prime Minister and the government instruct our permanent representative at the United Nations to request that the Secretary General of that body send a special mission to investigate this inhuman behavior in an inhuman war?


Pierre Elliott Trudeau: Well, Mr. Speaker, I think the way in which the question was asked really does not convey the respect which the hon. member usually has for legal processes when he talks of inhuman behavior. I believe the matter is being inquired into now and that it is before a military court. I think we might wait until both sides give evidence before deciding what happened exactly.

November 25, 1969
Inquiries of the Ministry


David Lewis: Mr. Speaker, like everyone in the House I always appreciate the Prime Minister's lectures, and indeed like everyone else I get many of them. But, Mr. Speaker, whatever description he would prefer, may I repeat my question and ask whether the government would instruct our permanent representative at the United Nations to request that the Secretary General send a special mission to investigate these events? Now, that is a rather neutral description- these events.


Pierre Elliott Trudeau: Mr. Speaker, I will discuss this neutral matter with the Secretary of State for External Affairs.


Mr. Douglas A. Hogarth (New Westminster):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. In order to answer all the petitions and letters which have been flowing in from the west coast, could the minister tell the House whether his department has granted a permit to drill for oil in Georgia Strait near the city of Vancouver, British Columbia?


Hon. Jack Davis (Minister of Fisheries and Forestry):: The answer, Mr. Speaker, is a flat no. My officials have been in touch with the Department of Energy, Mines and Resources in Ottawa, which is responsible for off-shore drilling in this country and have been assured, and I personally have been assured by the minister, of their co-operation so that no drilling permits will be granted as long as there is any danger, not only to the sports and commercial fisheries but also to the entire ecology of that area.


Mr. James A. McGraih (Sf. John's East):: As
a supplementary question, Mr. Speaker, is the minister prepared to use the power he has under the Fisheries Act to prevent such drillings from taking place, considering the risk that they might pollute the waters and hence damage our marine resources there?


John (Jack) Davis: We are working closely, as I said earlier, with the Department of Energy, Mines and Resources which has authority over granting permits. We are concerned about the effects on the living resources in the water, and it is co-operative action which I think is desirable from every point of view.


Thomas Clement (Tommy) Douglas: In view of the statement of the Parliamentary Secretary to the Minister of Energy, Mines and Resources on November 18 that departmental policy has not been altered, may I ask the minister if we have his assurance now and the concurrence of the Minister of Energy, Mines and Resources that no oil drilling permits will be granted in Georgia Strait?


John (Jack) Davis: Mr. Speaker, I am certainly going to urge the Minister of Energy, Mines and Resources not to grant permits if there is going to be any effect on marine ecology, but I think the question should have been addressed to him.


Thomas Clement (Tommy) Douglas: A supplementary, Mr. Speaker, to the Minister of Energy, Mines and Resources. Will permits be granted for oil drilling in Georgia Strait, in view of the pollution which similar drilling has caused along the California coast?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: Mr. Speaker, this is a hypothetical question as no one has applied for oil drilling permits for the Georgia Strait. If they do apply there must be 90 days notice given to the Department of Fisheries, 60 days notice to the Department of Transport and 45 days notice to the Department of National Defence-


Mr. Speaker:: Order, please. The minister has only one day to answer his question. As we are running short of time perhaps we might go on to another question.



PROVINCIAL AFFAIRS


Hon. Hugh John Flemming (Carlelon-Charloite):: Mr. Speaker, I wish to direct a question to the Minister of Veterans Affairs. Was the minister indicating government policy when, in a recent speech in Toronto, he expressed approval of maritime union and suggested the name "New Acadia" for the united maritime provinces?


Mr. Speaker:: Order, please. This question should be asked of the Prime Minister. I am not sure whether it has already been asked in those terms but, as the hon. member knows, he can only ask the Prime Minister whether a statement made outside the House represents government policy.
November 25, 1969


Hugh John Flemming: Thank you, Mr. Speaker. I should be very glad to ask the Prime Minister and perhaps he would like me to repeat the question. Was the Minister of Veterans Affairs indicating government policy when, in a recent speech in Toronto, he expressed approval of maritime union and suggested the name "New Acadia" for the united maritime provinces?


Pierre Elliott Trudeau: I am told, Mr. Speaker, the minister made it quite clear that it was not government policy but his own personal opinion. In fact, the government has not reached any decision on this and therefore-


An hon. Member:: Better not.
Another hon. Member: That minister had better attend to veterans affairs.
Another hon. Member: He cannot even handle that.

Mr. Louis-Roland Comeau (South Western
Nova): Mr. Speaker, I have a supplementary question.
Has the Minister of Veterans Affairs recommended to the Premier of New Brunswick that he take steps to bring about the union of the Maritime provinces?



POLLUTION


Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question I should like to address to the Minister of Fisheries and Forestry. In view of the widespread concern being expressed in British Columbia by such bodies as the Society for Pollution and Environmental Control, the Pacific Trollers Association and others over the proposed dumping of mine tailings by the Utah Construction and Mining Company, Limited from their 33,000 ton mill project in the Quatsino Sound area, is the minister prepared to consider or have his departmental scientists reconsider the approval of this application which he says he has granted?


John (Jack) Davis: This department does not grant permits; it certainly does not grant permits to pollute. A mining company has received a permit to carry out mining operations, but the permit was received from the provincial gov-
Inquiries of the Ministry ernment. We are looking into the possible results of the dumping of effluent into an inlet on the west coast. We are studying the situation, but we have not granted any permit or approval.


Thomas Speakman Barnett: I should like to ask a supplementary question of the minister, Mr. Speaker. Does he expect to be able to reach a definitive conclusion on this matter before 30 November, at which time I understand the decision of the Pollution Control Board of British Columbia is to be made on this application?


John (Jack) Davis: I understand that those who will appear before that board will be using technical information supplied by our department.



RESTAURANT OF PARLIAMENT


[Stage Direction]
Mr. Warren Allmand (Notre-Dame-de-
Grace): Mr. Speaker, I have a question for the House leader. Would the House leader arrange for an early organization meeting of the Parliamentary Restaurant Committee so that charges that the Parliamentary Restaurant is purchasing and serving California grapes can be considered and a decision made if that policy should be continued?
Mr. Speaker:: Order, please. The hon.
member should know that this question should be directed in the usual way to the Chair. If the hon. member will consult with members of this committee, he will be informed that a meeting has been called for some time next week-not necessarily to consider the subject mentioned by the hon. member.



PUBLIC SERVICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the hon. and austere President of the Treasury Board on an administrative matter of great importance, namely the achievement of a wider measure of bilingualism in the Public Service. Can the minister advise if consideration is being given to lightening the burden of language classes and immersions of many civil servants through advancing the use of instant translation computers, a technology which a prominent Ottawa communications expert recently said we may soon reach?
1206	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. I am not sure that this development will be reached so soon that the question can properly be asked at this time. I should think the question should be put on the order paper.



LABOUR CONDITIONS


Thomas Miller Bell: Mr. Speaker, I have a question for the Minister of Finance on his $30 a week statement, and I know the minister is waiting to answer. Does the minister realize that a tin of pipe tobacco costs $2.25 and along with the cost of all the matches he uses, he would not have any money left with which to buy anything to eat or drink each month?


Mr. Speaker:: Order, please. I am sure the minister has an interesting reply to the question but I have to rule it out of order. In those circumstances, I cannot allow the minister to reply.



PESTICIDES


Mr. Randolph Harding (Kootenay West):: have a question for the Minister of Energy, Mines and Resources, Mr. Speaker. In view of the recent federal policy statement on the drastic curtailment of the use of DDT in Canada, and in view of the urgent need for an orderly and systematic collection and disposal of DDT now in the possession of many Canadians, I would ask the minister if his department or any government department is preparing plans for the collection and disposal of this surplus DDT now in the possession of Canadians in every part of Canada?


Mr. Speaker:: Order, please. It seems to me that question has been asked, but I cannot recollect whether it was answered by the minister. I would think that this would be a very good question to consider at the time of adjournment of the House.



HOUSING


Mr. G. H. Aiken (Parry Sound-Muskoka):: also have a question for the Minister of Energy, Mines and Resources, Mr. Speaker, in view of the fact that he seems to have his
[Mr. Macquarrie.l
DEBATES	November 25, 1969
facts at his fingertips today. Can he indicate to the House when the large and expanding fund for the construction of sewage treatment facilities that he mentioned last Thursday will be made available?


John James Greene: Mr. Speaker, I am glad the hon. member added the word "today" to his preface. With respect to the funds available in CMHC for sewage disposal plants, that matter is under consideration in relation to the government's over-all commitment to fight the war on inflation. As soon as it is possible to make more funds available and reopen these funds, I can assure the hon. member that the House will be notified.


Gordon Harvey Aiken: Mr. Speaker, a supplementary question, please. May I ask the minister if the date now set of April, 1970, will be advanced so that there will be more funds available before that date? Is that question being considered?


John James Greene: Mr. Speaker, that question, along with every avenue whereby funds can be made available consonant with the government's over-all fiscal responsibilities, is under consideration at the present time.


Mr. Baldwin:: I bet they are.



LABOUR CONDITIONS


Mr. Robert  Mc@: Mr. Speaker, my question is for the Minister of Finance and I believe it is anticipated. Is he stating the taxation policy of the government when he says that a person can live on $30 a week?


Edgar John Benson: Mr. Speaker, may I rise on a question of privilege in view of the fact there was a question raised-


An hon. Member:: Is this a statement on motions?
Another hon. Member: Out of order.


Edgar John Benson: I did not say that $30 was a living wage.


Gerald William Baldwin: Down, down!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I understand the minister is rising on a question of privilege, and he should be allowed to state his question.
November 25, 1969


Edgar John Benson: Mr. Speaker, I did not say that $30 weekly is a living wage in Canada. May I read from the transcript. The question was asked:
You think that in any place in Canada that a man can live on $30 a week?
My answer was as follows:
Yes, I think there are places in Canada_ They
can't live to the standards that one would want them to live to. I think there are places in Canada where people are living on $30 a week. And there obviously are places where married couples were living on $3,500 a year. Previously, a married man with two children was living on it because he was filing his tax return as his only income and was paying $118 in tax, and we're taking that $118 in tax off.


An hon. Member:: Where are those places?


Douglas Scott Harkness: The minister will be known as "$30 a week Benson."


Mr. McCleave:: Mr. Speaker, may I address a supplementary question to the minister?


Mr. Speaker:: Order, please. I apologize to the hon. member, but I understand that another hon. member is seeking the floor for the purpose of raising a point of order.


Mr. Nysirom:: Mr. Speaker, in view of the answer the minister gave, will hon. members be given an opportunity to ask some supplementary questions?


Mr. Speaker:: Order, please.


Robert Jardine McCleave: Mr. Speaker, the account that we have is at such variance with the account the minister gave that I am surprised he did not raise a question of privilege at the opening of the House. In press accounts we have a very ample statement, but the minister's version is different.


Edgar John Benson: That is not so.


Mr. Speaker:: Order, please. It was my impression that the hon. member was seeking the floor for the purpose of asking a question. Could he please ask it now?


Robert Jardine McCleave: My supplementary question, Mr. Speaker, is: Is this figure the party line that is accepted by the Minister of National Health and Welfare?


Edgar John Benson: Mr. Speaker, I think people have this whole question mixed up a little bit.


Some hon. Members:: Oh, oh.


Edgar John Benson: The question arose because someone was asking me about the increased exemptions. If hon. members opposite would
Inquiries of the Ministry take the trouble to read the transcript they would see that I said that by raising our exemption $400 for single people and $800 for married people we would take 750,000 Canadians, who should not now be paying taxes, off the tax rolls.


Some hon. Members:: Hear, hear.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Since the Minister of Finance is concerned about raising exemptions will he, in light of the fact that a person earning $30 a week will still have to pay income tax, consider raising the exemption even further above the $1,400 level?


Edgar John Benson: Mr. Speaker, it would be very nice to raise the exemptions still higher but, in order to do that, we should have to impose greater increases in taxes on other Canadians. Under our proposal, we are raising the exemption by $400 for single people and $800 for married people, and the cost of this will be $1 billion, which we shall have to collect in taxes from other Canadians.



BILINGUALISM AND BICULTURALISM


Mr. A. D. Alkenbrack (Fronlenac-Lennox and Addington):: Mr. Speaker, may I direct a question to the Prime Minister which pertains to the splendid new truck and trailer equipment being displayed in front of this building. I take it that the equipment is destined soon to tour many West African countries and to reflect the true bilingual and bicultural character of Canada. My question is, why are the words in quotation marks on both sides of the trucks and trailers in French only. I refer to the words, "Visages du Canada"?


Pierre Elliott Trudeau: Mr. Speaker, I do not know what these trucks are. I do not know where they are going; I do not know where they came from.


Some hon. Members:: Oh, oh.


Almonte Douglas Alkenbrack: Why do the words "Faces of Canada" which I understand is an appropriate translation, not appear on one side of these trucks and trailers in fairness to bilingualism at this time?


Mr. Speaker:: Order, please. The hon.
member has made a suggestion which we must assume has been noted. The question period expired some moments ago.
November 25, 1989

Customs Tariff-Excise Tax Act BUSINESS OF THE HOUSE


Stanley Howard Knowles: Mr. Speaker, I rise on a point oi order with respect to the business of the House for next week. During the course of the question period, a question was asked about a day being granted to debate the situation in Biafra. The suggestion was made that this might be done on Thursday. This suggestion came as a surprise to us, because Thursday was to have been a government day. During the confusion, the President of the Privy Council offered to make this Thursday an opposition day. In the meantime I have consulted with the members of my party with respect to this matter. It so happens that the next opposition day was to have been ours and was to have been a week from Thursday. We recognize the seriousness of this question, so we are prepared to take this Thursday instead of next Thursday. If that is agreed to, a motion will be filed tomorrow in the name of the hon. member for Greenwood on the question of Biafra.


Donald Stovel Macdonald: Mr. Speaker, in that case the reference of the tax white paper would not be called, as agreed, on Thursday, on Friday and again on Monday, and Thursday, instead of being the first day of the two-day white paper debate, would be an allotted day.


Mr. Lundrigan:: Mr. Speaker, I was going to rise on a point of order and ask for unanimous consent for the question period to be continued because of the large number of members who wish to ask questions. However, inasmuch as so many ministers have sneaked out I will refrain from raising that point of order.
[DOT] (3:30 p.m.)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, November 24, consideration of the motion of Mr. Gray that Bill C-140, to amend the Customs Tariff and to make a consequential amendment to the Excise Tax Act, be read the second time and referred to a committee of the whole.
Mr. A. P. Gleave (Saskaioon-Biggar):: Mr. Speaker, may I conclude the remarks I was addressing to the House last night. What I really wanted to say in the short time I have 
left is that, to put it in blunt words, in so far as the farmer and the people in Saskatchewan are concerned, the Kennedy Round has failed. The juggling of various tariff schedules as proposed in Bill C-140 will not, in the final analysis, mean anything to the people in Saskatchewan.
Previous speakers have outlined the facts of life as to how the tariff structure has affected the actual farmer on the land in Ontario and in Saskatchewan; but, if one wants to really look at some concrete examples, one can look at the development of the potash industry in Saskatchewan and the situation it is in now. Essentially, there is an impasse vis-a-vis Canadian and United States production. What the United States is saying, as a result of the congressional hearings held in Washington, is that first and foremost the jobs of the workers in New Mexico are going to be protected. Since this is their first consideration, it means that the ordinary process of negotiation, such as the Kennedy Round, will not protect the position of Canadian workers and it is probable that, despite the horrendous efforts of the Premier of Saskatchewan, negotiation will not protect the investment of Canadian companies in the potash industry in Canada. The moral of the lesson is that we have to look to the world markets if we are going to sell Canadian potash.
We are in a desperate position in the wheat economy, according to the papers that were presented to the Agricultural Outlook Conference in Ottawa yesterday and today. Mr. H. B. Huff, Assistant Professor of Agricultural Economics at the University of Guelph, speaking to the Conference, stated that policies are needed to stabilize prices and production, and to match production with demand. Dr. Huff described the dilemma of the wheat producers as "probably the most serious problem confronting Canadian agriculture".
I would go further than that and say that the wheat problem and the potash problem are two of the most serious confronting the total Canadian economy today. The juggling of the tariff schedules under the Kennedy Round will not offer a solution to either one of these problems. It is time the government of this country ceased proposing policies that were relevant to Canada in 1910 when Sir Wilfrid Laurier first looked at the agricultural economy in the west on behalf of a Liberal government. It is time this government realized it is 1969, not 1910. It is time they started to look at this economy in terms of how Canadians can live in the cut-throat economic jungle which exists in the world today.
November 25, 1969

What the people in Saskatchewan want to know is, how we are going to use the capital investment in the wheat industry and in the potash industry in Saskatchewan? How are we going to have sufficient jobs to maintain the population in that province? The answers will not be found in the tariff juggling that is proposed in Bill C-140.
If the government and this House doubt the seriousness of the situation, then they should certainly give consideration to a news report emanating from the convention of the Saskatchewan wheat pool. This press report in the Globe and Mail of November 25, 1969, reads as follows:
Western Canada should study the implications of secession if Ottawa does not give proper attention to western problems, the Saskatchewan wheat pool said yesterday. The comment was made in a statement released from the wheat pool's annual meeting and it did not elaborate.
The situation is serious when an organization as responsible as the Saskatchewan wheat pool issues such a statement from its annual meeting. The statement also indicated that, since farmers did not contribute to inflation they should not be affected by the budgetary restraints of the government. The meeting asked the federal government to subsidize interest rate charges over 7 per cent on farm improvement loans and to curtail high costs of farm production by the establishment of a prices and trade board.
Questions were repeatedly raised in this House today during the question period as to what was going to be done to stop escalating prices in this country. The people in the cities and on the farms in Saskatchewan are being crucified by the fiscal and trade policies that are being followed. I cannot over-emphasize the serious situation that exists. The government should give very careful consideration to the suggestions emanating from the Saskatchewan wheat pool convention with regard to interest rates and prices affecting farm production. Some steps should be taken to bring these important factors under control. Undoubtedly, this House will pass Bill C-140. What is implicit in that type of approach is that if we juggle the customs tariffs in Canada we will reach a state of competition which will result in a fair distribution of opportunity and earning power for the people who live, work and produce the wealth of this nation. It just has not happened, Mr. Speaker. The people who are in competition with one another are the farmers and the small businessmen, and these are the people who are

Customs Tariff-Excise Tax Act going broke in Canada today. It is not International Nickel, Imperial Oil, Gulf Oil or Shell Oil. The people who are going broke are those in competition with one another. I just cannot take seriously the exercise of juggling tariffs, Mr. Speaker, and I think it is only an exercise. It is not relevant to a good many people who live and work in this nation today.


Mr. J. H. Horner (Crowfoot):: Mr. Speaker, in rising to take part in this debate on Bill C-140, my mind goes back over a number of years during which we on this side of the House have continually harangued and harped at the government to seriously consider the problems existing with regard to custom tariffs and excise duties, particularly as they apply to rural western Canada.
Bill C-140 brings up to date and ratifies the tariff schedules which have been in effect since June 3, 1968, as a result of the Kennedy Round tariff negotiations. What concerns me, Mr. Speaker, is that many of the items in tariff schedules approved by this House, such as the one we are now dealing with, are then left up to the officials to interpret, and more often than not the officials interpret them in the narrowest possible sense. They do not take into consideration the general theme or the intent of the legislation passed by Parliament. The government does not really give the intent of the legislation to the officials who have to police or interpret the act.
All across this country today we see groups of people rebelling against bureaucracy and the system; farmers in western Canada, university students and people in the cities trying to build homes. Why are they rebelling against the system? It is because the system is not paying any attention to the people of this country. The system does not give one particle of consideration to, their problem of staying alive and earning a fair standard of living. All across Canada, we see a certain amount of rebellion against the system because the bureaucracy built up by this and previous governments is finally reaching an unbearable stage for the people of this nation. I can quote many instances of this.
We see a great deal of apparatus and paraphernalia on which duties are being removed under Bill C-140. We also see some on which they are not being removed. I go back to the old complaint which I and other members raised in this House a number of years ago with regard to agricultural implements under tariff items 40924-1 or 40948-1. We come back to a long and detailed list of tariff
November 25. 1969

Customs Tariff-Excise Tax Act exemptions, and then a narrow interpretation placed on those tariff exemptions.
I will give some examples. In the tariff exemptions, sprinkler irrigation systems are duty-free. In another place, we find aluminum sluice-gate devices for the control of water in irrigation ditches. In another item we find that agricultural instruments and agricultural machinery might be duty-free, if not otherwise listed. It was pointed out very forcefully by the hon. member for Swift Current-Maple Creek (Mr. McIntosh) that duty has to be paid on an irrigation pump which may or may not be used for a sprinkler system. Here, we see the very intent of the legislation and the whole tariff structure. The intent is to allow all agricultural machinery into Canada dutyfree, yet because one specific item is not spelled out, some narrow-minded official says, "Oh, oh, this wasn't the intent of the legislation". I argue it was the intent of the legislation because sprinkler irrigation systems are duty-free. Then, we have the example of sluice-gate pumps. Sprinkler irrigation systems and pumps are duty-free. In another item, we have aluminum pipe sluice-gate devices for the control of water in irrigation ditches.
[DOT] (3:40 p.m.)
How much further must we go before we spell it out in complete detail? Then, at the bottom of the list, we find the words: "Agricultural implements or agricultural machinery and parts not otherwise listed." These are duty-free. Yet because officials are overconcerned with maintaining their own positions, we find them placing the narrowest possible interpretations on these items.
Last fall we experienced a difficult time in finding storage for damp grain. It became evident that silos could be used for this purpose.
I asked whether the minister would take the trouble to see whether silos could not come in duty-free. But there is no mention of this in Bill C-140. Action should have been taken. We find that the duty on ladders for silos is up 25 per cent; that steel wall sections, with or without doors, for the construction of steel silos attract rates of duty which have risen from 10 per cent to 25 per cent, and so on. Last year, when they faced this difficult storage position, many farmers resorted to the construction of steel or glass-lined silos and I maintain these items should be allowed to enter duty-free. After all, they are not made anywhere in Canada. Yet farmers have to pay duty at rates between 10 and 25 per cent because the government failed to act.

I submit that the total revenue flowing to the government from this source would amount to relatively little. Yet to the individual farmers concerned, this duty represents a considerable extra expense. To my regret, many farmers in parts of Saskatchewan, northern Manitoba and some parts of western Alberta along the foothills still face a situation in which many bushels of grain will have to be harvested damp. Silos could help meet this difficulty. In any case we could help farmers to diversify into a cattle feeding operation which would be of help to them in staying afloat during a risky period.
The government suggests that the federal sales tax on grain bins should be refunded to the purchasers. Yet I am informed by the department that the same consideration does not apply to Quonset buildings, since such buildings are not regarded as grain bins. A letter I have received says that a Quonset building may or may not be used to store grain; in other words, it may be used for some other purpose. Well, this enables the farmer to produce more efficiently. What I am complaining about is that we find no efficiency in government, no broadminded approach to the whole question of the application of the Customs Tariff and Excise Tax Act.
The whole principle of the bill we are considering involves a broader and more fair-minded approach to the application of the Acts to which I have just referred. Every member of this House should realize that this was the underlying purpose of the Kennedy Round negotiations. The intention was that the burden of customs and excise taxes should be reduced as far as possible. It is not difficult to pass legislation to confirm actions which have in fact been taken since June 3 of last year, but we ought not to do so without registering concern that the intent of the Kennedy Round is not being fully carried out by the officials working for the government. The minister responsible for piloting this measure through the House is a Minister without Portfolio (Mr. Gray), with very little else to do. Surely, he could pursue this subject with the officials of his department to ensure that the full spirit and intent of the Kennedy Round negotiations is carried out by them. The time has come to take a close look at this whole field to determine whether we are treating all sections and minorities in this country fairly. It is not good enough for the government to have parliament pass pieces of legislation and then to pay no attention to the way in which sections of that legislation are applied.
November 25, 1969

This is one of the reasons which prompted me to speak on the particular bill before us. I want the government and the minister responsible for piloting this bill through the House to carry out the full intent of this legislation; that is to say, the most liberal interpretation of the Customs Tariff and of the Excise Tax Act. What I want to see is not a group of bureaucrats trying to enforce their will upon citizens who are trying to make a living but, rather, a group of officials who are trying to translate the intent of Parliament for the benefit of the people of Canada. When a situation of this kind is reached we shall find less and less evidence of anxiety among minorities, less and less evidence of anxiety in particular regions of this country. This is important to me, especially when one recalls the extract which the hon. member for Sas-katoon-Biggar (Mr. Gleave) read from the Globe and Mail to the effect that the Saskatchewan Wheat Pool, a conscientious, law-abiding, purely Canadian firm is suggesting that western Canada might secede if no attention is paid to prairie problems.
Canada, we cannot remind ourselves too often, consists of many regions spread across some 4,000 miles of territory. It is the home of many minorities. Surely, the government must be prepared to listen and respond to some of the wishes of these various regions and minorities if we are to stay together as a single, unified force.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Faulkner in the chair.
[DOT] (3:50 p.m.)
On clause 1-Approval by Parliament.
Mr. McIntosh:: Mr. Chairman, I wonder whether the minister would advise the House if he intends to clarify the section to which western members were referring with regard to farm implements and farm agricultural machinery.


Mr. Gray:: Mr. Chairman, the section to which the hon. member referred with his usual eloquence is not, as far as I am aware, dealt with in any way by the bill which is before the committee at this time. I recall that when he raised this matter a year ago I suggested to him that I would be most happy, if he wished me to do so, to arrange a meeting with the representative senior officials of the department concerned, which I would attend, so as to assist in some way in a discussion aimed at seeking a clarification of this matter.

Customs Tariff-Excise Tax Act
Following that particular sitting of the House, I understand my hon. friend had a brief conversation with one of the officials, but as yet, perhaps as a result of an omission on my part or on somebody else's part- though I do not think that is directly relevant-it has not proved possible to arrange such meeting.
Let me repeat my invitation to the hon. member. I would be happy to convene such meeting, at which time we could review at greater depth than is possible in a forum of this kind the questions he has raised.
I might conclude my comment on this particular point by saying that Parliament has provided, in the passage of the legislation in question, procedures for those who are not satisfied with administrative rulings of officials. These rulings can be reviewed by the tariff board, and an appeal lies from the tariff board in certain cases to the Exchequer Court. This is the method provided by Parliament.
I recall my hon. friend referring yesterday to section 22 of the Financial Administration Act. I note that it is his intention to advise the people in his riding who may not be satisfied with administrative rulings to take advantage of this provision, by making application under it, and this is something they are fully entitled to do if they wish.
However, I might say that as far as I am aware there is nothing secret about this particular provision. It is part of a statute that has been passed by parliament. The statute appears in the Revised Statutes. If it is amended from time to time the amendments are printed in the annual statutes. These volumes are made available to all members of the House. If I am not mistaken, the Queen's Printer distributes them free to just about every public library and university library in Canada. So as I have said, there is nothing that is more secret about section 22 of the Financial Administration Act than any section in any other piece of legislation on the federal statute books. Certainly, my hon. friend is at liberty, as is any citizen of Canada, to see whether matters of concern to him qualify for consideration under the provisions of this particular statute.
While I understand the concern that he and other members have expressed about the manner in which they feel the officials seem to apply or to interpret various sections of the Customs Act, it seems to me that it is not the most helpful way to advance the consideration of these matters to attempt to suggest
Customs Tariff

Excise Tax Act that the attitude the officials are taking is founded on some type of ill-will or animus toward a particular group or section of the country.
Although officials are as capable as any other human beings of making mistakes from time to time, generally they try to carry out their duties in a way that they hope will be considered as being in the best interests of the public at large. As I have said, if my friend and I sit down together to review the administrative procedures, I do not say it will be immediately impossible to clear away the difficulties he so eloquently brought to the attention of the House, but at least it will help clarify matters and perhaps point the way to some solutions. Now that I have a somewhat greater responsibility for such matters I would be happy to try to assist hon. members and their constituents in obtaining fair and equitable treatment from the administration for their problems.


John (Jack) McIntosh: Mr. Chairman, I am not as learned in the law as my colleague the minister, and neither are the people I represent. I made no reference to anything that was secret. As I stated last night, my objection was that no effort was made by the bureaucrats to inform persons like myself, representing the farmers as I do, that there were other avenues we could pursue.
As far as the minister's comments today are concerned, let me remind him that although I outlined the problem to him last December he still has not fully understood it The department the minister represents, the Department of Finance, inserts these items in the schedules of the Customs Tariff. It is the duty of the officials of the Department of National Revenue, a different department entirely, to interpret these items. So although they are passed by Parliament, in effect they mean nothing.
The situation is this. One item in the schedule referred to "all other agricultural implements and all other agricultural machinery". That must mean something to those who inserted the item. Certainly, it meant something to the people of Canada, and particularly to the western farmers.
It now appears that the western farmers were under a misconception. They thought that all agricultural implements and agricultural machinery would be allowed into Canada duty free, something they were very happy about. Indeed, I think that was the intent of Parliament when this particular item was agreed to. However, over the years,

November 25, 1969
time and again the farmers have found that their interpretation was incorrect.
I remember spending three days with a constituent of mine trying to obtain an interpretation of this term which I have used so often. We both went to the officials of the Department of Finance, and they confirmed that this item was in the schedule. They said that nothing could be plainer, and we agreed. We then went to the Department of National Revenue and told them what the Department of Finance officials had said, to which the officials of the Department of National Revenue replied that it was they who were charged with the proper interpretation, which was different from ours.
This is the point that I have been endeavouring to clarify. Why is the item in the schedule if none of the officials know what it means? Why do not the Department of National Revenue officials tell the Department of Finance to spell out the meaning of the item? We who represent the farmers are not legal minded, but the language used is plain enough to us: an agricultural implement is an agricultural implement, one that can be used for the production of agricultural products.
The contention of some of these very narrow-minded officials is that any agricultural implement that can be used for some purpose other than agriculture is no longer an agricultural implement. I say this is foolish, because every implement used on the farm can be used for some other purpose. If that interpretation were correct, there would be no such thing as an agricultural implement or an agricultural machine; so let us strike out these words and we will know where we are.
I have discussed this matter with both the minister and his officials. Last December 3 the minister was under the impression that all agricultural implements and machinery were allowed into Canada duty free; as far as he was concerned there were no ifs, ands or buts. He interpreted the item to mean what it says, as I suggest the officials should unless there is good reason not to.
I referred last night to section 22 (8) of the Financial Administration Act, and indicated that people in the know are able to hire tax experts, legal advisers, and so on, to take advantage of any existing loopholes in the legislation. The farmers are not aware of these loopholes. The minister stated that the farmers could appeal to the Supreme Court of Canada, but he should be the first to know

November 25, 1969	COMMONS
the cost of taking an action to the Supreme Court.
[DOT] (4:00 p.m.)
I also said last night that most of the things about which we were complaining would not involve $1,000, therefore they are not recorded in our public accounts. There are many occasions when our farmers have to pay less than $1,000. Perhaps the minister would sit down for one minute and calculate how much it would cost a farmer from Saskatchewan to appear before the Supreme Court of Canada in respect of any one item. The minister would then know that this cost would be prohibitive. That is the point I am making.
There is no use in having any more meetings between me and the officials of the department. I have already taken this matter to the Tariff Board. I make my plea now to the minister. The Question is not a complicated one. Just tell us what you mean by an "agricultural implement" which you said you thought was allowed into Canada free. No one seems to know what an agricultural implement is.


Herbert Eser (Herb) Gray: Mr. Chairman, I have the
Hansard containing the quotation my hon. friend has referred to at the desk I regularly occupy. My recollection of what I said at the time was that it was my understanding the agricultural implements usually if they were "for farm use"-I believe I used that term- were eligible to come into the country duty free. I was trying to summarize a rather complex situation.
As my hon. friend implied in his remarks today and last night on this point, the agricultural field is one that is becoming increasingly more technical involving many new and different types of machinery. I think even with the best goodwill in the world, whatever statements for clarification might be made by anyone there would still be problems of interpretation and application involved. In something as complicated as the Customs Tariff, it is difficult to see how we would ever be able to get away completely from problems of interpretation and application of the statutes.
I wish we could come up with some magic formula that would eliminate these problems. Perhaps we can come up with one. However, we may be just a little over optimistic if we think with the changes in technology of agricultural machinery, with its many different attachments, a way can be found so as to eliminate these difficulties completely.
DEBATES	1213
Customs Tariff-Excise Tax Act
My hon. friend is probably better informed than I about these improvements. I should think we would be optimistic if we thought it ever possible to eliminate completely all problems of application and interpretation, particularly when there are industries right here in Canada which make some of these same products. Other hon. members of my friend's party have referred to the effects of lowering tariffs in Canada. This shows how it is often difficult to develop Policies and legislation for a country like Canada which are equally acceptable to everyone. This is not always the easiest thing to do in a way which satisfies everybody involved at one and the same time.
In any event, I say to my hon. friend that I am prepared to examine the matter further. I am in perhaps a better position to do so now than when we last discussed this matter. I invite my hon. friend to make available to me some of the knowledge and expertise he has shown in raising the matter in this House at this time and on previous occasions.


John (Jack) McIntosh: Mr. Chairman, I have no knowledge or expertise to offer the minister. I am no better acquainted with actual farming than the minister himself, but that is not the point. The point I am raising is that some clarification should be made of this term. I do not know how many years this term has been in the schedule, but it has been there for a long time and as yet no one knows what it means. At least, we could make an effort to change that situation. We may have the same problem later after the schedule is changed, but if the term does not mean anything let us take it out. If we are not going to allow agricultural implements and machinery into Canada free of duty, we should not try to fool the farmers. This purported exemption is erroneous and it does not apply. I am asking the minister to clarify the meaning of that item and give the officials of the Department of National Revenue the benefit of that interpretation of the intent of Parliament. That is all I am asking.


Herbert Eser (Herb) Gray: Mr. Chairman, I just indicated to my hon. friend that I would certainly be prepared to look into the matter further. I do not know what more can be done at this point, since this item is not actually before this committee for consideration. I am prepared to go into the matter further. Perhaps my hon. friend is being too modest when he says he is not an expert, but he has produced some very well documented and informative speeches on
COMMONS DEBATES	November 25. 1969
Customs Tariff-Excise Tax Act the subject, and I would be glad to take advantage of some of the research he has done in this field.


John (Jack) McIntosh: Mr. Chairman, I have just repeated what I have said since 1962. Every minister since then has replied in almost the same words this minister has used today. They have said they would be glad to look into this interpretation, but that does not do the farmers a bit of good. I ask the minister to change this interpretation or clarify it. This is a bill to amend the Customs Act and this is the time to meet this problem. Perhaps we may have to wait another year, but why can we not make this change now? The Department and its officials have known about this for at least eight years, to my knowledge.


Herbert Eser (Herb) Gray: Perhaps we are getting into an area of procedure. We are dealing now in the committee of the whole with a bill that has been given second reading. There is nothing whatsoever in this bill which touches upon the item in the Customs Tariff to which my hon. friend has referred.


John (Jack) McIntosh: That is my complaint.


Herbert Eser (Herb) Gray: My hon. friend says that is his complaint, and he has stated it very eloquently. That is why I say to him a decision to make further changes in the Customs Tariff is a matter of government policy which is usually announced only in the course of a budgetary presentation. In saying this, I hope I am indicating a great degree of good will and sympathy towards the approach he has put forward, and I am prepared to look into it further.


John (Jack) McIntosh: I have not got the bill before me but I thought in the explanatory notes there was a clause which referred to a clarification only.


Herbert Eser (Herb) Gray: What my hon. friend is referring to applies to two particular sections.


John (Jack) McIntosh: I know what it applies to, but why can we not put another item under that same heading, for clarification only? This is all we are asking. Just because the bill has been printed does not make any difference. If there has been an omission, we can add something. There would be no expenditure involved. It is just for clarification.


Mr. Lambert (Edmonton West):: Mr. Chairman, I would only intervene at this stage if the hon. member for Swift Current-Maple
Creek and the minister have completed their exchange of views. In this connection, I thoroughly support my colleague, the hon. member for Swift Current-Maple Creek.
I want now to raise a point that has been before the minister and his officials. It relates to Section 4(1) of the Customs Tariff Act. It has to do with the authority of the Governor in Council to pass Orders in Council, as was done in 1968, which suddenly change the nature of the tariff that is imposed on goods, and then perhaps two and a half or three months later reverse that again. I think the minister and some of his officials who are present are familiar with the case I want to bring before the committee.
My purpose in bringing this matter to the attention of the committee is not to question at all the raison d'etre behind the Order in Council. This case had to do with the control of importation into Canada of textiles from low cost countries. What I continue to object to is that the method of procedure in this particular case involved an Order in Council passed in May, 1968 when Parliament was not in session. This action was taken during an election campaign. The Order in Council was published in the Canada Gazette of June 12. We know how long it takes for a copy of the Gazette to go out to western Canada, and particularly to Vancouver.
[DOT] (4:10 p.m.)
If there are going to be other conversations, Mr. Chairman, I will just shut shop. I am talking to the minister and the officials regarding a particular case, and I apologize to the minister if he is talking to the officials about the case at hand.


Herbert Eser (Herb) Gray: May I say for the record, Mr. Chairman, that I was trying to identify for the officials the case to which the hon. member was referring. I believe that is the case involving a higher duty on the import of shirts from Malaysia.


Marcel Joseph Aimé Lambert: It is Order in Council 1968-1965, passed on May 15, 1968 and subsequently rescinded by an Order in Council in August of 1968. The number of the latter is immaterial, although I have it here. What concerns me is the attitude of the officials of both the Department of Finance and the Department of National Revenue that an Order in Council having been made is deemed to be public knowledge across the country ipso facto, because they care not one whit whether or not anyone has had an

November 25, 1969	COMMONS
opportunity to see the Order in Council or be aware of it. As I indicated, Order in Council 965 was passed on May 15, 1968. It was published in the Canada Gazette on June 12, and if anyone can tell me in this day of pony express postal service how a copy of that particular part of the Canada Gazette can get out to Vancouver in less than four or five days, then that man is a wizard and I invite him to specifically carry out what he says can be done.
What I complain about is that goods which have been ordered from a Canadian importer by Canadian firms, the order transmitted to a manufacturer based in Hong Kong or Singapore, executed during the course of the winter and shipped in three lots all of which reach Canada before June 12, which is the date of the publication of the order, were made subject, without further notice to the importer, of almost double the customs tariff. These goods originating from Singapore were suddenly removed from the British preferential rates and put under the general tariff.
I am not in any way criticizing the action of the government in relation to the authorities in Singapore. I realize there is a problem with regard to finished textiles from low cost countries. But what I do protest is the action taken against an innocent Canadian importer, and there is no official in the government service, unless he has the proof, who can impute knowledge or lack of bona fide to the importer. I have read more presumptions based upon presumptions in the replies I have received from the Minister of Finance (Mr. Benson) with regard to this particular case, than I thought were possible.
Not one tittle of evidence has been advanced by the department to show that there can be any question regarding the bona fide of the importer. There are assertions or allegations, but there is not one tittle of evidence. I put it to the minister that the burden is not upon this or any other Canadian businessman to prove his innocence when there is a situation of this kind. The goods in question were landed, the demands were made for the increase in customs duty, they were paid, and all the goods were cleared. Then, some two months later the government, having resolved its quarrel with the authorities in Singapore, restores the customs tariff to its previous level. When I make representations to the minister with regard to this, I am told the importer could have left the goods lying in the customs warehouse. That attitude is absolutely incomprehensible. We have an importer
DEBATES	1215
Customs Tariff-Excise Tax Act who is regularly doing business with retail firms across the country and who has a reputation to maintain. He accepts a signed order for goods. There is a contract on the delivery of the goods which he cannot escape. He cannot go to the retailer and say: I cannot deliver the goods to you because I am being charged extra duty.
In the case to which I refer, the timing of the delivery of the goods was essential to the contract. It was the beginning of the summer retailing season. If these goods had been left in the warehouse until after August 15, the market would have been gone and the retailer would have been entitled to call for rescission of the contract and to claim damages. This case deals with an extra customs duty of over $10,000.
What adds to the difficulty is that knowledge is imputed to the importer of discussions between Canada and Singapore and the other countries. There were questions about quotas, but no one can say that this importer knew that he was exceeding the quota or approaching the limit that Canada was going to impose. However, there is a general assertion that this man knew it or ought to have known it. That is patent nonsense.
The next point is that the importer was in some way acting in bad faith in ordering from Singapore rather than Hong Kong because Hong Kong was living up to the quota restrictions. But the Canadian importer did not know this. He was not privy to the dealings between governments. He was not aware of what precisely the government was doing in this regard.
The third point is that the Department of National Revenue issued some sort of internal bulletin, and it was asserted to me that the importer must have been on the mailing list. But it turns out he was not on the mailing list and there is no obligation on him to be on the list for these internal bulletins. In any event, he became aware of the changes when he went to claim the goods. There was the demand of the customs officer when the goods were going to be taken out of the warehouse, the customs officer who in such cases says the duty is not 174 per cent. It may be 25 per cent. As a matter of fact I think it went to 35 per cent in this case, although I may be corrected on that.
o (4:20 p.m.)
What I am getting at is that it is totally unjust and unfair in matters of this sort not to provide in the Order in Council that this
November 25, 1969

Customs Tariff-Excise Tax Act additional duty should not apply to goods bona fide in transit. When the government was considering this matter, the goods were at sea. As a matter of fact, they were landed on May 23, May 30 and June 12. The duty was paid on May 29, June 5 and June 14, and it must be remembered that the Order in Council was published in Ottawa on June 12.
I go back to 1962 when there was a much greater emergency. I do not deny that within the industry there may have been some problems with regard to this type of import, but at the time of the national emergency in 1962 when surcharges were imposed, the government provided that all goods which were bona fide in transit at the time of the passing of the surcharge order should not be subject to the surcharge.
We are not talking about goods on order. I am talking about goods in transit where the importer cannot do anything about it. The goods are on their way. What are you going to do with the goods that are at sea? Are you going to refuse them and face a diminution of your business reputation and a likely claim in damages from your customers? I will admit that this point I am raising does not have to do directly with section 4(4). It has to do with section 4(1) which is referred to in this particular amendment to the Customs Tariff.
I want to know why in matters of this kind there is the refusal to consider this question of publication. I have mentioned it time and time again. There is the attitude that if you are in the Golden Triangle of Toronto, Montreal and Ottawa you sit in a comfortable pew. You have the advantage of immediate notice. We have this situation under the Immigration Act, and in fact under any number of acts. But people living in British Columbia and in Alberta or on the east coast, particularly now that we have this nonsensical postal system with restrictions on postal deliveries, are at an even greater disadvantage. Why should we be at a disadvantage? Is it simply because we do not live in Ottawa?
I am not complaining about living in Ottawa as such, but I think that businessmen in Vancouver, or Halifax, or Edmonton, or in St. John, Newfoundland should be in the same position vis-a-vis the government as businessmen in Montreal. Toronto and Ottawa. It is for this reason that I am so insistent upon this point. There is, (a) the publication of government orders, and (b), what I think is an entirely unconscionable and unjust action on the part of the government in insisting that extra duty shall be IMr. Lambert (Edmonton West).]
levied on goods imported by a bona fide importer unaware of the quarrel going on between the governments of Singapore and Canada. He is caught, so to speak, as meat in the sandwich.
What makes it doubly bad is that three months later the action taken in May is rescinded because the club has beaten Singapore into some form of submission. But the man who has been hit is the Canadian businessman, and according to the government he should take his lumps. I cannot see what justification can prompt such a decision, and the insistence that what the government has done is right.


The Chairman:: Shall clause 1 carry?


Marcel Joseph Aimé Lambert: I would like to hear what the minister has to say.


Herbert Eser (Herb) Gray: Mr. Chairman, my hon. friend has repeated in committee some arguments which he put forward in correspondence which he had been exchanging with my colleague, the Minister of Finance, and it is really difficult to go into the matter in detail in these surroundings when it involves reference to correspondence and documentation which I may inform my hon. friend is not before me at this time.
As I said to him when he was beginning his remarks and he was wondering why I was consulting with officials, I did have some recollection of the matter because I happened to see some of the correspondence which my hon. friend had been exchanging recently with my colleague, the Minister of Finance, and I was attempting to identify to them the particular matter which involves, as my hon. friend said, the import of shirts from Singapore. I may say that my initial recollection was Malaysia, probably because at one time Singapore was associated with the country of Malaysia.
As my hon. friend pointed out, the order in question was made pursuant to authority given to the Governor in Council by parliament when it passed the Customs Act. Also, as my hon. friend pointed out, this authority was exercised in a much broader way, but perhaps not in an identical way, by the government of which he was a party in 1962. If I am not mistaken on this earlier occasion Parliament was not in session, just as it was not in session when this order to which he refers was made. On these occasions, the respective Governors in Council were relying on the authority which they felt had been given to
November 25, 19G9

them by Parliament when the Customs Act was passed.
I wish to say to my hon. friend that it may be that he has me somewhat at a disadvantage because I do not have the file in front of me and I am trying to speak from memory about a matter with which I was not directly charged from the outset. But perhaps it is fortunate that I did see some of the correspondence, and so I can attempt to comment on the argument he has made here.
I would gather that in publishing the Order in Council in the Canada Gazette the requirements of the law as it existed at that time were met. My colleague, the hon. member for Windsor-Walkerville, and the committee which he chaired has presented the House with a very useful document, the report of the committee on statutory instruments, which may well point the way to changes in the manner in which publication is made of these orders, but this is something to be discussed and perhaps implemented in another forum. In any event, there is something else my hon. friend alluded to which may indicate that something more was done by way of conveying information than he might have thought, and I refer to the issuance of what is commonly known as a "D" memo.
[DOT] (4:30 p.m.)
My hon. friend indicated that this may not have come to the attention of the particular firm in question. One would have to look also to see if it came to the attention of the customs broker who acted for that firm. I do not recall whether the firm put the goods through customs in person or used a customs broker. Let us say they used a customs broker. It is likely that every or almost every licensed customs broker in Canada would be a subscriber to the "D" memo service of the department of internal revenue. This is not simply an internal document of the department. It is something which, aside from being used to inform departmental officials, is used to advise those who deal with customs of various changes. The purpose of the "D" memo service is to provide all who subscribe to it with information faster than is possible by means of the press or the Canada Gazette.


Marcel Joseph Aimé Lambert: I agree that the customs broker did have the "D" memo, but it had not arrived when the goods were in transit. The first "D" memo may have conceivably arrived only when the first goods were being landed.

Customs Tariff

Excise Tax Act


Herbert Eser (Herb) Gray: My hon. friend may have a point in this regard. I have just been informed that the "D" memo in question went out on May 15. What I am trying to do is explain the "D" memo procedure, and inform those on the committee who are interested that it is not simply a matter of waiting until the Canada Gazette comes through to inform those concerned. There is also this other method of informing them more quickly of changes of this type.
Now there is really not too much more that can be added in this particular forum. It may well be that the decision of the government of the time was that the situation was sufficiently serious that very sharp and firm action had to be taken. I gather that after the order was made an agreement was reached with Singapore involving restraints by Singapore on the volume of export of shirts to Canada. I gather that if this arrangement had not been made arising out of the order, serious damage would have been done to Canadian firms and Canadian workers as a result of unfair competition by low cost imports from the country in question.
In any event, my hon. friend has raised, with all the eloquence customary to him, some other matters relative to this particular case. If I am not mistaken he has just recently written to my colleague, the Minister of Finance, about this matter again. These further representations are under consideration and perhaps I might take it upon myself to consult with my colleague about them both as expressed in the letter and as put forward to this committee, to see what further consideration can be given to them.


Mr. Salisman:: Mr. Chairman, while the question of definitions and the difficulties that arise in trying to determine in which category an item falls is being discussed, I should like to bring to the minister's attention a difficulty that has arisen as outlined in a letter which I have received. This concerns, of all things, equipment for eviscerating chickens. It appears that the Department of Agriculture has supplied a definition of what evisceration is. That definition includes the removal of the head and legs. However, those responsible for tariffs do not accept this definition and therefore duty is charged on this equipment as it comes into Canada.
I have sent a letter to the minister outlining the problem and asking him to look into it, but I should like to ask the hon. Minister at this time whether his department has any
1218	COMMONS
Customs Tariff-Excise Tax Act plans for trying to eliminate these discrepancies in opinion arising between his department and other departments of government.


Herbert Eser (Herb) Gray: I must confess to my hon. friends on the committee that this is not a field of activity in which I claim any expertise. In saying this, I do not wish to imply that it is not very important to those concerned with the import of this equipment or the millions and millions who enjoy chicken in its various forms. At the same time, I should like to inform him that I will be very happy to look into the matter and consult with members of the Tariff Section of the Department of Finance, and those concerned in the Department of National Revenue, to see if some way cannot be found to resolve such conflicts in interpretation.
One sometimes looks upon tariff matters as being dry and dull, Mr. Chairman, but the point raised by my friend illustrates that almost every facet of Canadian life is touched by tariffs so the subject is rather more colourful and interesting than one might think.
While I am on my feet, perhaps I could take a minute or two to deal with a matter which my friend raised in his remarks on second reading. He raised the question of subsidized import financing in support of goods imported into Canada and its relation to our antidumping law. I should like to inform him that generally speaking goods are considered to be dumped where the normal value is lower than the export price. I am informed by officers of the Department of National Revenue that in the event that normal value or export price was affected by subsidized import financing, the latter would be taken into consideration by the officials of the department who would be carrying on investigations into complaints about the dumping of the goods in question. This may help answer my hon. friend's question and also act as a form of warning to those who feel that they might like to get around our antidumping law by such methods.
My hon. friend made some interesting comments about non-tariff barriers to trade. I should like to remind the committee in dealing with the point raised by the hon. member for Waterloo, that the members of the General Agreement on Tariffs and Trade decided after the conclusion of the Kennedy Round of tariff negotiations to undertake a study of non-tariff barriers to trade with a view to reduction or elimination of as many of these

DEBATES	November 25, 1989
barriers as possible. Canada is one of the countries taking an active part in this study. A detailed inventory of such barriers has now been compiled and the next stage is to work out solutions to the wide range of problems in this field. This is something of great importance to Canadian trade generally and is one reason why Canada has been taking a leading role in the work of GATT, on non-tariff barriers. We hope to see concrete progress made in this direction through GATT or if necessary through direct contact with the various countries involved.


Alfred Pullen Gleave: Mr. Chairman, I should like to address a question to the minister. The Globe and Mail of October 10, 1969, carried a story to the effect that the United States had reached an agreement whereby Japan was to free the import of soya bean meal and peanuts for oil production by the end of 1971 and to expand import quotas for sausage, both meat and pork, by 20 per cent. In view of these recent revisions has the government of Canada, within the last year or two, been conducting negotiations with Japan directed to achieving comparative advantages for Canada and, if so, what have been the results?
[DOT] (4:40 p.m.)


Herbert Eser (Herb) Gray: Mr. Chairman, I do not recall the exact detail of the article which the hon. member for Saskatoon-Biggar has drawn to the attention of the committee. I recall that the Secretary of State for External Affairs indicated in the House, in answering a question earlier this year, that, certainly, with respect to the treatment by the Japanese government of the import of rapeseed as compared with the import of soybeans, discussions were carried out and I presume continued with the Japanese government. I gather the Secretary of State for External Affairs indicated when he answered the question raised in the House, I believe by my hon. friend, that the Japanese had promised to take the Canadian representations in this regard into consideration.


Alfred Pullen Gleave: Mr. Chairman, have no direct negotiations been carried out at, shall we say, the operational level between the two governments with a view to seeking a better deal for the Canadian producers of rapeseed or other agricultural items? In the intervening period, are negotiations being conducted?


Herbert Eser (Herb) Gray: Mr. Chairman, these matters have been raised with the Japanese and I
November 25, 1969

think it is a matter ol continuing concern and interest for the officials of the Department of External Affairs and other departments concerned. These are rather delicate matters, and rather than take the risk of prejudicing the contacts that have been under way and are under way, perhaps I could refrain from attempting to give a more detailed answer at this point.


[Stage Direction]
Clause agreed to.
Clauses 2 to 14 inclusive agreed to.
Schedules A, B, C, D, E, and F agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


Gerald William Baldwin: Mr. Speaker, we are prepared to give leave now. We have had second reading, so that leave is required. Our consent is conditional on the minister's making a strong effort, which will go beyond the almost superhuman efforts made by my colleague the hon. member for Swift Current-Maple Creek (Mr. McIntosh), to produce answers to the respective questions which have been asked. We are not going to hold up this bill now, but I urge the minister, in view of our magnanimity in this connection, to try to provide those answers.


Herbert Eser (Herb) Gray: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.



EXCISE TAX ACT

Herbert Eser (Herb) Gray: that Bill C-155, to amend the Excise Tax Act, be read the second time and referred to a committee of the whole.
He said: Mr. Speaker, I should like to make a few brief remarks to explain and describe the nature of the measure before us. This bill is intended to implement the proposal in the budget speech of June 3, 1969, that a tax be imposed on the price of tickets or other charges for carrying passengers by air. As explained by the Minister of Finance at that time, the cost of construction and maintenance of air transportation facilities is very high and, in addition to obtaining revenue from user charges at airports, the government has decided that it is advisable to ask parliament to require individuals who travel by air to pay an amount through what, in effect, will
Excise Tax Act
be a special tax to help defray the costs of providing air transportation facilities.
When the proposed tax on tickets or other charges for transporting passengers by air was announced during the June 3 budget statement, the Minister of Finance said:
We shall wish to consult with the air carriers about detailed problems of defining and administering a measure of this kind.
Therefore, during the preparation of this bill a number of meetings took place between air carriers, their associations and government officials. These meetings were extremely helpful and the bill now before the House reflects a great many of the proposals and suggestions of the carriers concerning the application and administration of the proposed tax.
In devising a tax on tickets and other charges with respect to transporting passengers by air, it was necessary to recognize that the air transportation business, perhaps more than any other, operates across international boundaries on a world wide basis. In many cases, passengers have a free choice between travel on Canadian carriers or those of other countries. It was also necessary to keep in mind that the United States imposes an ad valorem tax on air transportation at the rate of 5 per cent but that it does not at present impose a tax on international air transportation except for flights into Canada and Mexico.
The proposed tax would be what is known as a consumption tax. In other words, it would be imposed on purchases by people in Canada of air transportation. The proposed tax will be in two forms. It will be an ad valorem tax at the rate of 5 per cent on the amount paid for transportation, in certain cases, and a flat dollar amount in certain other cases. The tax, whether ad valorem or flat amount, will be paid at the time when the purchaser of transportation buys a ticket. It would not, therefore, be a departure tax or airport tax to be collected at airports. The 5 per cent ad valorem tax will apply to tickets purchased in Canada for transportation within Canada, to the United States, and to the islands of St. Pierre and Miquelon.
[DOT] (4:50 p.m.)
The flat tax will be a tax of $5 but it may be reduced by Order in Council to an amount of not less than $2. It would apply to overseas flights where tickets are purchased in Canada

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Excise Tax Act
for transportation that begins at a point in the taxation area and ends at a point ouside the taxation area. The term "taxation area" is more fully defined, as hon. members will note, in the bill before us. Where an amount is paid for the charter of an aircraft the 5 per cent tax, if applicable, will be on the amount paid by the person or group for the charter of the aircraft and not on the amount paid by each passenger. The flat tax, if applicable, will be calculated on the number of seats in the aircraft. The tax, whether ad valorem or a flat amount, will apply on charter flights that depart from Canada, even if the contract for the charter or the amount for transportation is paid outside Canada.
In conclusion, Mr. Speaker, I wish to say I will be pleased to attempt to answer more detailed questions that hon. members may have when the bill is in committee. I, therefore, ask the House to support the measure at the second reading stage.


Marcel Joseph Aimé Lambert: At
the outset, Mr. Speaker, I wish to say we of the official opposition support the principle that those who use the services should be expected to pay for them. However, I do not say that without some qualifications. I wish to point out the principle used by the government in drawing up this bill leaves a great deal to be desired. What is being done is an attempt to recover a basic amount for the provision of certain services by the government of Canada with regard to airports.
The first point I wish to make is that this service varies from one city to another. Regardless of where persons fly from or what their destination is in Canada, they will have to pay on the same basis. Secondly, having an ad valorem tax on tickets again raises a point about which I was complaining during the discussion of the previous bill. The one who is going to have to pay the most is the person who flies the farthest; in other words, the people living at the extremities of the country.
A person living in Edmonton or Calgary will have to pay $10, give or take a few cents, on a ticket to Toronto or Ottawa. During that flight the passenger will use two airports, the point of departure and the point of arrival. A person flying from Toronto to Windsor or London, Ontario, will pay a much lesser amount. In fact, a passenger flying from Toronto to Ottawa on a round trip ticket will pay approximately $1.90 ad valorem. If my

memory serves me right, the round trip costs $38, giving a $1.90 ad valorem.


An hon. Member:: The rate is $42.


Marcel Joseph Aimé Lambert: I stand corrected. It would then be $2.10 ad valorem. That passenger would also use two airports, Toronto and Ottawa. The passenger coming from Edmonton or Calgary to Toronto has paid approximately five times as much, but has not used any more facilities. I do not think he has to pay $8 for the communications network, therefore I do not see the reason for this ad valorem tax.
In addition, there are vast areas in this country, such as in the north, where the only means of communication is by air travel. One need only study the schedules of the airlines flying out of Edmonton, Prince Albert or Winnipeg to see the cost of the fares. People living in the District of Mackenzie, in places such as Fort Norman, Fort Simpson and Inuvik, will really have to pay.
The frontier we are now developing is all along the rim of the Arctic. We are sending great numbers of people to the Arctic to look for oil. I am speaking of the west and the Northwest Territories, the whole eastern slope of the Rockies. We are competing, but what is being done? We are being loaded down with another additional cost.
Let me assure hon. members that the Department of Transport provides very rudimentary or almost non-existent facilities, outside of communications, into those areas. Yet a passenger going from Edmonton to a small landing strip with a shack for a passenger terminal, or something a little better although very humble compared to Malton, Dorval or Vancouver airports, has to pay the same as a passenger going from Toronto to Montreal.


Stanley Howard Knowles: That is the just society.


Marcel Joseph Aimé Lambert: This is a government acting from its comfortable pew. In other words, they are saying, "I am all right, Jack I am in the lifeboat". I could use-much rougher terms than that. We intend to-make a point of this. I give the government fair notice that we intend to move changes with regard to this type of tax. We are not seeking to change revenues. The minister is entitled to estimate what type of revenue he should get, and what should be the cost to the-taxpayers. Here again, I ask for justice on. behalf of the taxpayers.
I see it is five o'clock, Mr. Speaker
November 25, 1969



ROUTINE PROCEEDINGS


Mr. Stanley Haidasz (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, may I ask for the unanimous consent of the House to revert to motions for the purpose of allowing me to table certain reports?


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Stanley Haidasz: Under the provision of Standing Order 41(2) I am tabling in English and in French the reports in draft form of the task forces on the costs of health services in Canada.


Mr. A. D. Hales (Wellington):: On a point of order, Mr. Speaker. I ask the parliamentary secretary if the reports he just tabled have been made available to the conference of provincial doctors and federal people that are meeting here in Ottawa this week?


Stanley Haidasz: Mr. Speaker, the Minister of National Health and Welfare has made these documents available to the provincial Ministers of Health attending the federal-provincial conference of health ministers.


Alfred Dryden Hales: A supplementary question. I take it from the parliamentary secretary's reply that this information has been made public before the members of parliament received it.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment tonight are as follows: the hon. member for Vancouver East (Mr. W inch)-federal buildings-V ancouver-new project and "Project 200"; the hon. member for Wellington (Mr. Hales)-national revenue-delay in federal sales tax audits of companies; the hon. member for Notre-Dame-de-Grace (Mr. Allmand)-violent disturbances- Montreal-bombing at Loyola College.
Criminal Code


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


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: There have been certain discussions, Mr. Speaker, and I believe there is general agreement to proceed with Item 8 on the list of public bills and stand the other bills.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: They stand at the request of the government.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Barry Mather (Surrey) moved: that Bill C-21, to amend the Criminal Code (Fine print clauses), be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
[DOT] (5:00 p.m.)
He said: Mr. Speaker, on rising to speak in support of my bill I wish to say at once that it was talked out two years ago by very appreciative but also very loquacious members on the government side of the House. In the second place, I realize that there is some provincial legislation in the field in which the bill is intended to operate. Third, I note the fact that we now have a Department of Consumer and Corporate Affairs.
My feeling is that the subject matter of this bill could provide that department or some appropriate committee with a subject for study or possible legislation. The purpose of the bill is-and I quote from the explanatory statement I made in the House-to eliminate the trouble which is so often caused by fine print or small type in contracts. The measure would amend the Criminal Code to make illegal the publication of clauses in contracts or deeds printed in small typographical characters with intent to delude the purchaser with respect, for example, to the limitation of benefits. Fine print in this context means type smaller than the main body of the print in the contract. The entire aim is to protect the consumer.

November 25, 1969
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The bill contains two clauses, one setting out the penalties for those found guilty of an offence in line with what is proposed. Anyone found guilty of an indictable offence would be liable to a fine not exceeding $500 or to a term of imprisonment not exceeding three months, or to both fine and imprisonment. Second, the expression "small typographical characters" means characters substantially smaller than the size used in the body of the printed matter of the document.
When this bill was discussed, and, unfortunately, talked out earlier, I felt that some hon. members, particularly on the government side, made useful contributions toward refining what is proposed in the bill. For example, the hon. member who is now the Minister of Consumer and Corporate Affairs (Mr. Basford), speaking on the measure at that time in 1967 said he thought a good plan would be to identify the small characters in the type of policy contracts and so on by colour rather than by just a reduction in the size of the type. This appears on reflection to be a very practical thought. I would be happy if the general idea put forward in the bill were to be referred to the department for consideration of the minister's suggestion.
I could say a good deal more, but my intention this afternoon is to be as brief as possible. After all, most hon. members have heard this proposal before; whatever they think of it I am sure they are all well aware of what is proposed. I thought the hon. member for Beauce at that time made a good contribution to the discussion when the bill was talked out in 1967. He said he fully agreed with the intent of the bill and hoped that the then proposed department of Consumer and Corporate Affairs would study the measure suggested. I would go a little farther than that. I would ask hon. members this afternoon, though I have no hope of the bill being passed, to consider whether it could not reasonably be directed to the attention of the appropriate committee or to the department which he mentioned. I believe that in the area covered by the bill, even if the exact terms of my proposal are not followed, millions of dollars could be saved for many millions of Canadians if there were better regulation of the fine print used in contracts, as I have sought to indicate.


Mr. Steven Otto (York East):: Mr. Speaker, it is not very often I get up in this House to be less than complimentary to another hon. member in connection with the introduction

of a bill, especially a private member's bill. I was hoping that the hon. member for Surrey (Mr. Mather) was rising to say he would like to withdraw the bill. That would have been very kind action and it would have saved me this cruel task-I believe it will be a rational one.
The hon. member was correct when he said this subject had been discussed before. This is, in fact, the third occasion on which almost identical bills have been before us. Today, the hon. member wants this measure to go to a committee where it can be hashed over again even though, as he admits, time has passed by. Small print is no longer of any consequence. We have a Department of Consumer Affairs and, moreover, this happens to be a provincial matter. It seems that someone has dragged the barrel of old bills into a new session. Incidentally, I was checking the numbers of private bills introduced on the Order Paper, and I found that the New Democratic party is responsible for 40 per cent of all the bills presented. I, personally, wonder whether this is the purpose of the assistance they were given-to drag this barrel of all the old bills along and flood the Order Paper with them. Some of the fault lies with Your Honour. It is, I believe, ultimately the responsibility of the Speaker to decide whether or not old bills rehashed several times should even be placed on the order paper.


Some hon. Members:: Order.


Steven Otto: I shall not deal with the aspect of the proposal which has already been pointed out by hon. members on this side to the effect that this is a provincial matter. The hon. member admits that the Department of Consumer and Corporate Affairs has been saddled with the responsibility of fighting such abuses as he describes. This is not merely a matter of the size of the print. Anyone who suggests that the civil law does not cover this point has simply not studied the law. The hon. member may be surprised to learn that the civil courts have been well ahead of him for 20 years. Anyone who has practised law or who has talked with lawyers would find that the size of the print does not matter at all. If a judge or a civil jury finds that the purpose of anything in a contract, or, possibly, even a parking ticket, is to keep the plaintiff, or the person directly concerned, uninformed, or to defeat the purpose of the contract, or to defraud the person concerned, the fact that it is included in the contract would have no bearing at all on the case. The common law
November 25, 1969

has given credence to exactly what the hon. member now tries to achieve by using the criminal law. I dare the hon. member to give me one case during the last five years where the argument that the inclusion of a fine print clause was meant to hide something, and was given credence by the court, was not thrown out as a defence to the action. I suggest to the hon. member that his bill is a repetition of the existing law.
[DOT] (5:10 p.m.)
The nature of man being what it is, it does not seem to matter whether the print is large or small. A few years ago I recall the government of Ontario passing a law that provided that all automobiles sold in Ontario as used cars must bear a certificate stating in half inch block letters whether or not the car was roadworthy. In effect, every car that was from then on sold in Ontario was represented in large block letters as being unroadworthy, yet people bought the cars just the same. I have not seen one certificate in the last four years declaring that a car was roadworthy. This law was ignored until the passage recently of provincial legislation respecting dealerships, which are now compelled to make their cars roadworthy before sale. So, surely the size of the fine print is not the criterion for judging whether we should include the matter within the criminal law, as suggested by the hon. member.
Is it not strange that he and his party have declared that the criminal law must not be applied to those who smash windows, set buildings on fire and use violence, because these people are reformers? Yet today, we see not only the hon. gentleman opposite but also many Canadians declaring that the protection of property does not necessarily involve criminal jurisdiction; that a person who damages property, or even threatens the life and limb of others in the cause of rebellion, should not be judged according to our criminal law. They also declare that use of drugs should not be a criminal matter.
The hon. member is saying, in effect, that those who throw Molotov cocktails while parading in Montreal, Vancouver, or on university campuses should not be charged with criminal offences because they are acting in the cause of rebellion. Yet someone who prints a contract containing a clause in fine print may, if the hon. member's bill passes, be sent to jail for three months. The hon. member cannot have it both ways. I am not suggesting for one moment that in protecting 21545-7
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private property one is justified in committing assault; whether the theft of private property is punishable by imprisonment is something for the court to decide.
I suggest this bill would further restrict the provisions of the Criminal Code. Today, we can be sent to prison for refusing to take a breathalyzer test. There are also provisions relating to impaired driving, but I do not drive. Although the Criminal Code is embracing new concepts, at the same time I feel we are restricting it. If the hon. member's bill were adopted, then what about such matters as riding a bicycle on the wrong side of the road?
With regard to false and misleading advertising, the question of what is false and misleading has not yet been decided. If someone were to sell me a product which he claimed was the best available on the market, and a month later I found one that was better, would this person go to jail? Of course not.
Not only would the incorporation of this provision into our criminal legislation be reversing the trend today; this matter is already being taken care of by other government departments. We are all aware that some people continue to promote ideas even though the world has passed them by. I am reminded of those young "Turks" who 35 years ago were disciples of John Maynard Keynes. Today these disciples are in power and are plugging the concepts of Keynes for all they are worth. The fact that they have no relevance to today's society does not faze them. Neither is the hon. member fazed by the fact that he is proposing a measure that he admits does not come within federal jurisdiction. As I say, the point is already covered by the common law.


Barry Mather: Mr. Speaker, before the hon. member resumes his seat, may I ask him a question? From what he has said, am I right in determining that he does not agree with the present Minister of Consumer and Corporate Affairs, who has said that this bill has merit but that the print should be coloured print rather than fine print?


Steven Otto: Mr. Speaker, the minister was kind. I am not.
[DOT] (5:20 p.m.)


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I listened with great interest to the hon. member who introduced the bill before us and to the member who spoke after him.

November 25, 1969
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As the representative in the House of a part of the population, I think the matter to be debated has two sides, as do most of the problems submitted to us.
On the one hand, I cannot help but congratulate very warmly the sponsor of the bill which aims primarily at protecting the Canadian consumer, since particularly in the last few years, we have paid attention to the problem.
That aspect of commercial, insurance and loan companies contrac.s is the one that should be examined by the government and more especially by the Minister of Consumer and Corporate Affairs (Mr. Basford). Indeed, I also feel that the form of those contracts raises every day some problems for the purchaser or the policy-holder.
It is often stated that those who buy insurance do not take the time to get acquainted with the terms of their contract. The reason is that those contracts are quite elaborate and that certain clauses appear in fine print. If such contracts were drafted in a plainer and clearer style, they would contribute to protect the ci izens.
On the other hand, I notice that the hon. member has introduced this bill several times in recent years and I have the impression that he always does it in the same way.
A moment ago I was reading the speeches made last February in connection with this bill and I realize that the member is again introducing his bill in the same way, supporting it whh nearly identical arguments except that he acknowledges the provincial jurisdiction and the part played in this field by the Department of Consumer and Corporate Affairs.
The hon. member for Surrey (Mr. Mather) could have given more de ails on the nature of discrepancies or other weaknesses inherent in these con'racts. He should have given examples and been more explicit as this would have made it easier for us to offer sound criticism.
The government has a part to play as regards the protection of the public in most cases where goods and services are bought. I feel that if we study existing legislation, whether provincial or federal, we realize that certain laws contain provisions to protect the public in this matter.
Perhaps the member goes too far in always presenting his bill the same way. The creation of the Department of Consumer and Corporate Affairs seems to be a striking example of

the fact that mostly in the last few years the government has developed an increasing awareness of its responsibilities which it is ready to assume fully.
Does the problem come solely under federal jurisdiction? Although I am certainly not competent to express an opinion in this regard, it is my modest personal view that the provinces, even if they do not have a strong say in the matter, should at least assume responsibility for providing legislation to solve problems which might arise in this area.
I believe all the provinces of Canada have adopted such laws.
However, I also know that several professional groups in Canada have formed associations, not for the protection of their members, but primarily to protect the public against poten ial abuse on the part of members of associations or corporations.
Moreover, I know that insurance agents throughout Canada have joined professional associa dons and that insurance companies, as well as insurance agents both individually and in small groups are increasingly making continued and serious efforts in order to improve the general skill of their members so as to serve the public better.
It is a fact that, in Canada, the federal government, the provincial governments and several associations are on the lookout for those problems and keep a con.inuous watch so as to protect the public.
It also seems that if Canadians wish, for instance, to buy insurance policies or to benefit from advantages offered by finance companies or others, they can get informa.ion on what they buy and on what they are getting into through the news media, namely TV, newspapers and advertising handouts, which are becoming more efficient every day. I have in mind here a certain kind of advertising finance companies usually go for.
Further more, every year, in each region, the agent who has sold more than a million dollars' worth of insurance receives some kind of honour. In my opinion, besides stimulating the agent who earns his living by doing adver ising insurance companies, that indirectly makes the public aware that such an agent is trustworthy because many citizens relied on him during the year by passing on to him their insurance problems.
[DOT] (5:30 p.m.)
I am no lawyer, but nevertheless, when I see the ways of our society, I find that the
November 25. 1969

citizen is protected by provincial laws in this respect and that he can also resort to civil courts. Lawyers claim it is easier to resort to civil courts than to criminal ones in that connection.
I was saying at the beginning of my remarks that both sides of the medal had to be considered. Indeed, we all are in favour of protecting the consumer and we all wish for serious steps to be taken for that purpose. For some time, in various places and in government circles, people have been talking about protecting the consumer and putting a ceiling on prices and wages. More and more we wish to consider the difficult problems with which the consumers are grappling; however, if the question comes up under the aspect referred to in this bill, the hon. member should have been more explicit and shown more originality.
I hope that the Minister of Consumer and Corporate Affairs also will consider that problem, as well as the officials of his department and the other hon. members. Indeed, it would be advisable to have this bill amended in committee, so as to make it more workable.
One detail in the speech of the hon. member has struck me. He stresses that some members would have tried in the past to kill his bill and that the same thing is happening again. In my opinion he gives too much importance to this matter because he knows the procedure concerning those bills. In my humble opinion the way we discuss this bill and other similar bills is positive and efficient because it has at least the result of drawing the attention of the members to these problems. This can be a good thing for the welfare and the happiness of the Canadian people. It is also possible to focus the attention of the government which will study these proposals again later to adopt effective measures.
If the hon. member accuses us of trying, sometimes, to kill such bills, I could briefly allude to the role played by some of his colleagues when they try, to the disadvantage of the consumers they sincerely want to protect, to delay the passing of certain private bills whose basic aim is precisely to protect the consumers.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I just want to add a few words on bill C-21 with which we are now dealing.
First I congratulate the hon. member for Surrey (Mr. Mather) who wants by this bill to protect those who buy insurance through a
Criminal Code
printed contract under conditions laid down by the Civil Code.
I believe this bill to be important but incomplete. As the hon. member for Rimouski (Mr. LeBlanc) said, this bill has been discussed several times and always in the same or nearly the same way.
The text of the bill says, and I quote:
-Everyone who, with intent to mislead-
It is very difficult to know whether or not the company intended to mislead in printing clauses in small typographical character.
If the hon. member for Surrey really wants to help the public, he should eliminate, as far as he can, the possibilities of legal proceedings.
It would seem that this bill is nothing but a trap enabling anyone to make a charge of fraud against any finance company, insurance company or any other company. As for insurance companies, the clauses of their contracts should be more explicit. To show that such contracts are very difficult to understand, I shall take the liberty to read the statutory conditions related to fire insurance in the province of Quebec, and I quote section 16:
Should any disagreement arise as to the value of the insured property, of the property saved or as to the amount of the loss, such value or amount and the proportion (if any) that the company will have to disburse shall be submitted (whether the right to recover under the policy is discussed or not, and independently from all other questions) to the arbitration of a person chosen by both parties, or, if they cannot come to an agreement, then to the arbitration of three persons, one to be chosen by the insured, another by the company and the third by the first two persons chosen or, if they cannot come to an agreement, by a judge of the Superior Court sitting in the district where the loss happened; and such arbitration is subject to the provisions of article 1431 and following article of the Code of Civil Procedure. If the company is otherwise bound, the decision of the arbitrators will be final regarding the amount of the loss and the proportion the company shall pay. In the case where the full amount of the claim is granted, the costs will be paid accordingly, and, in all other cases, all matters of costs will be left to the arbitrators.
Mr. Speaker, I do not understand any of this. I am a licenced insurance agent and even if I tried to explain it to a client, I would not succeed. Even if it were written in large print, such as is used on the first page of a policy, I think it would not be any easier to explain.
The hon. member for Surrey (Mr. Mather) should, through his bill, ensure that such contracts are more precise.

November 25, 1969
Criminal Code
I believe that contract clauses should not come under the Criminal Code, because, generally, they are signed by two willing parties who are aware of the commitments they are making.
I do not support the bill, because I believe that such contracts are already complicated enough without having to ask oneself whether the contracting parties had the intention to mislead.
[DOT] (5:40 p.m.)


Yves Forest: Mr. Speaker, if I am to congratulate the hon. member for Surrey (Mr. Mather) for introducing this bill, I do so mainly because of his patience and perseverance, for this bill was not passed by hon. members when it came before the House in 1967 and 1969. Hon. members were right in so doing, as it seems evident that this bill to amend the Criminal Code deals mainly with a provincial and civil law matter.
However, the hon. member's objectives certainly are very praiseworthy, for if this bill succeeds in calling public attention to the danger of signing contracts whose meaning one understands only when they have been signed, the bill will have achieved, together with the relevant discussion, a useful purpose.
The hon. member likely wants to draw attention of the Department of Consumer and Corporate Affairs to the need to warn the public against this danger.
The explanatory notes say that insurance companies should be prohibited from embodying in their contracts fine print clauses. I think the problem is real, even if the hon. member never mentioned specific cases. As a matter of fact, I have often noted that people almost never read contracts, and even less insurance policies. Even the clauses printed in large characters are difficult to understand, except for lawyers specializing in this field. Other people rely on the salesmen to explain to them the terms of the contract.
The hon. member for Richmond (Mr. Beaudoin) is nodding his agreement. He sells insurance and he knows what I mean.
Whenever a disaster or an accident occurs, people wake up; they try to understand what is happening and get in touch with their insurance broker or their lawyer.
I believe that the goal being sought by my hon. friend is indeed commendable, but that the bill itself is rather inadequate, especially as concerns amending the Criminal Code. Let

us refer to the terms used in section 328A to be inserted.
Sub-clause (2) reads as follows:
-the expression "small typographical character" means a typographical character that is substantially smaller than the one used in the body of the printed matter of the document.
I find this somewhat vague. What would happen, for instance, if the whole contract were printed in such typographical characters? The said section would then have very little meaning.
I would prefer the suggestion of the hon. member. The essential clauses in insurance policies, intended to exclude the liability, should be printed in different characters and in red in order to call the attention of the contracting parties, because as a rule they are not included in the statutory terms of insurance policies. Certain clauses are particularly important for the insured or for a party to a contract of another nature, whether it be an instalment or financing contract. In fact, the citizens do not realize, for instance, that they have one year only to file a claim and that they have barely a few weeks to produce a proof under oath in support of a claim. Failure to meet these conditions might cause the insured to lose some of his rights. Therefore, it would be important if for instance one could easily take note of these conditions.
They should be underlined or printed in another colour in order to call the attention of the contracting parties because, although they might consult a lawyer or an insurance broker, the time for their appeal might have lapsed. This suggestion could be usefully considered if we wish to protect the consumers and the insured public.
The bill deals with an indictable offence. That might be going a little too far. If we had really wanted to amend the Criminal Code, it might have been better to make it an offence punishable on summary conviction, since the penalty provided in this case does not seem as severe as that provided for an offence punishable on summary conviction. Furthermore, the bill says and I quote:
Everyone who, with intent to mislead, prints or causes to print in small typographical character.
Therefore, the offence would lie in the fact that someone prints or causes to print something. I cannot understand how this is an offence. The offence would rather consist in distributing or selling any article under a contract written in fine print.
November 25, 1969

Where deceit is the obvious purpose, we must not forget that the Criminal Code provides for the real cases of fraud, and legal action can be taken against the person who, in a deliberate attempt to deceive would have made people buy, for instance, an article under false representations. This happens often but does not apply so much to insurance contracts which, in general, are pretty standard and in which there is no false representations. This applies especially to the contracts used by canvassers who sell articles under false representations and who make people buy lots in Florida, sewing machines or family trees. They often tell people that they are not really buying anything, that they are not committing themselves to anything, while the latter end up by signing a contract, probably with full knowledge of the facts.
The Criminal Code and even the Civil Code provide for the annulment of a contract in case of fraud.
But the main objection to the bill is that its purpose falls within provincial jurisdiction. It therefore behoves the provincial authorities to pass legislation to protect those who sign such contracts and to set the rules governing all contracts, but more particularly insurance contracts. Insurance companies are members of responsible associations such as the Federation of insurance agents and insurance companies. There are also insurance superintendents. Most of the provinces have adopted laws and regulations on insurance. To my mind, and generally speaking, the public is well enough protected in that field.
The legislative assemblies are authorized to legislate on this matter. I maintain that the hon. member did well to draw those cases to the attention of the public. Indeed, he has done useful work and we trust that the people will be grateful to him for it But, though he is entitled to our congratulations, I do not feel that we can adopt this bill or refer it to a committee.


Mr. Rene Matte (Champlain):: Mr. Speaker, I listened to the arguments put forward by my colleagues and I would merely like to endorse a few of them.
People who intend to mislead may do so whether the print used is large or small.
However, I can understand that the consumer's first reaction may be to resort to such an excuse when he has been fooled, as we say. The first excuse that comes to his mind is that he had not read the contract. Even if the
Criminal Code
contract had been read and re-read to him, he will always resort to the same excuse. The one who was fooled by some contract always claims that the clauses were in very fine print and that he signed it without question because the print was too small to be read.
I do not believe we could do away with fraud by passing this bill. That is why I found sensible the argument put forward by the hon. member for Richmond (Mr. Beaudoin), namely that the size of the print does not matter, what matters is that one should understand the clauses of a contract. That is the point to be considered, for whenever a person feels wronged by the terms of a duly signed contract, it is not because of the fine print of the clauses but because the wording was incomprehensible or ambiguous, since anyone could give it any meaning he wished.
It is through the purposely unintelligible wording of contracts that people are misled and not because of the size of the print. This, however, is quite likely to happen, and some take advantage of the small print to insert clauses which are not to the advantages of the customer.
When we deal with such matters, we must protect the customer by looking more fully into the problems and by finding ways of detecting real fraud. People claim they are fooled because of the fine print as a pretext for refusing to sign a contract. In some cases, the fact that fine print is used does indeed protect the people who then use it as a pretext.
I am far from denying the merits of the bill introduced by the hon. member. Of course, we all want to protect the consumer. But that is not the real problem, and whether there is a problem or not, it is up to the provincial governments to solve them.
[DOT] (5:50 p.m.)

Mr. Warren Allmand (Noire-Dame-de-
Grace): Mr. Speaker, while I fully support the principles which prompted the hon. member for Surrey (Mr. Mather) to introduce this bill, I do not think the bill properly deals with the problem. As a matter of fact, I think it is a bad bill because the fine is not large enough. Under this bill a man could be in the class of which the hon. member complains, pay the fine or undergo the penalty and still make a great deal of money. This is a very important problem and one with which I have dealt

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Excise Tax Act
many times in my practice as a lawyer in cases where people were duped by big business because of clauses in contracts; and not only big business, but firms like jewellers, dry cleaners, etc. I acted in a case concerning a ski-tow that involved many thousands of dollars. It was written on the tow ticket that all fault and responsibility was excluded. A young boy went on the ski-tow and was injured, fracturing his skull, his back and many other parts of his body. The company tried to get out of its responsibility because it was written on the ticket, which is a contract, in big print that they would not be responsible.
Mr. Speaker, I feel that this type of bill will not meet the problem. We need to bar any exclusion of responsibility in written contracts, whether they are big or small. I do not think that anybody in business should be able to make a profit out of exclusion from fault or responsibility. I do not think this bill covers the problem. It is true that in the courts of some provinces this type of clause excluding responsibility or fault has been outlawed, but they have not gone far enough.
I think that if the Minister of Consumer and Corporate Affairs (Mr. Basford) proceeds with the policy he has enunciated, it will fill the gap. There are those who argue against this proposition and cite the principle of caveat emptor, "Let the buyer beware", stating that when a man enters into any kind of agreement or contract he should realize what he is doing and bear full responsibility for it. We know that the services and goods sold on the market today are so technical and so complex-


The Acting Speaker (Mr. Bechard):: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair. The House will resume at 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Gray (for the Minister of Finance) that Bill C-155, to amend the Excise 
Tax Act, be read the second time and referred to a committee of the whole.
Marcel Joseph Aimé Lambert: Mr. Speaker, at the five o'clock adjournment I had discussed in part those aspects of the principle of the bill that I wish to cover at this stage of the debate. I emphasize once more that the opposition has no basic objection to having the Minister of Transport (Mr. Jamieson) recover some of the costs of operating Department of Transport airports and related services from persons using those services and airports. However, I had indicated my objection to the principle of an ad valorem tax on tickets which is based on the quantum of the ticket. This principle will throw a disproportionate burden on those persons who are flying long distances and it will adversely affect the sparsely settled areas of the country, particularly the north and the mountain areas where a good deal of flying is done but at high cost. Minimal facilities are provided there by the Department of Transport.
Therefore, I would feel it preferable to collect a flat rate from every passenger, as is done at many airports in foreign countries. As a matter of fact, that is what is proposed to be done with regard to passengers leaving on flights overseas. I think it would be much simpler if there were an agreed charge: While some people might object that those on relatively short flights are paying a higher incidence of tax than those on longer flights, it seems to me that the same revenue would accrue to the government from an average and fairly minimal charge. I do not know what the experience will be as to what should be the average charge, but I am sure it will not be disproportionate to the 5 per cent charge to the great bulk of passengers who fly on shorter, commuter routes in Canada.
Having examined the bill, I feel that the government is imposing on business and industry the entire cost of collecting this tax. To my mind the airline companies, particularly the smaller ones, will have the burden imposed on them of collecting and remitting the tax. If you look at the bill itself, Mr. Speaker, you will find that quite a burden is imposed upon every airline that will be subject to the tax. I say airline, but some of them will be merely air services.
On examining the bill, you will see that a licensed air carrier has the duty of collecting the tax which is a debt to Her Majesty. There must be a monthly return in respect of taxes. In fact, there must be a nil return in those cases where services which are operating in
November 25, 1969

the much more thinly populated regions of the country cannot, between seasons, carry any passengers; they have to file a nil return. There are severe penalties for default. I am sure that if I were to examine all the fine print in the bill and read all the regulations it is proposed to pass, I would discover that a trust will be imposed on the moneys in the hands of the licensed carrier. These moneys are collected on behalf of Her Majesty. Therefore, they fall into the same category as all other forms of taxes that are collected and receive a certain priority.
It seems to me, Mr. Speaker, that the government could quite easily make some adjustment based upon the quantum of taxes being remitted, in order to pay for these services. This tax money will amount to quite a large amount. But here we go again: the government wants money and it is telling the businessmen involved, "You are going to pay for the cost of collecting this tax." I think it is about time the government paid to have these taxes collected. We find that in the bill this is the businessman's responsibility. I submit that it is the responsibility of the government and is not the responsibility of the businessmen concerned. I hope there will be some changes in this regard.
I think other members of the opposition wish to make remarks on this bill, and I am sure some government backbenchers will wish to speak to it. I invite comments from hon. members such as the hon. member for Northwest Territories (Mr. Orange) and those representing the developing regions of Quebec and Ontario. I think we all wish to see how they react to this 5 per cent surcharge on almost the only, and very essential, form of transportation in their constituencies, transportation which covers not only business but pleasure and the development of their areas. If they think this is a fair impost, I should like to hear them say so, in order that their constituents may consider the position of those hon. members.


Max Saltsman: Mr. Speaker, it has been my experience that one can criticize the Liberal Party in almost any way as long as you give its members credit for being businesslike. If there is anything this government is proud about, it is that it runs a businesslike operation. The Liberals think they know how to run the country. Mr. Speaker, I suggest in very mild terms that they are disastrous as businessmen. All the time they feed us with phony propositions, as
Excise Tax Act
if we cannot see through them. This bill is another of those propositions.
[DOT] (8:10 p.m.)
Who is going to be paying this tax? Let us face up to the situation. The government starts by saying that some of the deficits in operating airports have to be recovered. I believe the deficit is in the neighbourhood of $57 million. This proposal, if passed, will bring in another $20 million and will still leave a deficit of $37 million on the operation. It has been in the past, and will continue to be, a subsidy to business. It has always been of this nature and no one is really taking any exception to this.
When this government hands out some old age pensions it thinks it is doing a great job, but it does it in a very meagre way. The government says, "We are subsidizing the poor, and we should not do so much subsidizing". But when the government subsidizes the rich, it does not count for much. This situation has been continuing for a long time and will go on even after this legislation is passed, if it is the disposition of the House to pass it.
The only people who will pay this 5 per cent tax are those in groups which charter flights, because that form of air travel is all they can really afford. I have experience of many of these groups. They consist of people who have saved for years in order to get back to the old country and visit their relatives and friends. They travel on these flights because of their relatively low cost. These are the people who will pay more. There is no way they can pass off this 5 per cent tax, just as there is no way they can pass off the airline ticket. That is part of the double standard of taxation in Canada.
What difference does it make to the businessman if we add another 5 per cent to his airline ticket? The whole amount was deductible before, and it will still be deductible. The government will be paying part of those costs. If it is not the government which pays, the additional tax will be reflected in higher prices being charged by the company concerned. The same pretence is being made here, namely, that we are trying to put airport operations on a paying basis. In fact, the subsidy is simply being transferred from one point where it is very visible to another point where it is not so visible, because of our tax system.
This is not the only thing the tax system conceals, but it is an example of how these

November 25, 1969
Excise Tax Act
things get swallowed up in a tax system. The government will either lose revenue or prices will rise to take care of this situation. This is a sort of peanuts operation the government is running. What is particularly infuriating is that there was an opportunity in the past -and the opportunity still exists-for the government to recover large sums of money which could have been applied against the operating losses of airports. I am referring to the fact that we started off in Canada with a solitary airline, Air Canada. The minute it started to do well, the government introduced a competitor. Every time they appear to be doing fairly well, the government makes certain there is a competitor to interfere with its operation. We in this party believe it is far more effective and businesslike to run airlines on an efficient, profitable basis rather than embarking upon the kind of taxation gerrymandering that is being suggested in this piece of legislation.
We in this party believe that the government has an obligation to state clearly its policy with respect to Air Canada and to end the uncertainty and speculation that has placed a cloud on the future of Air Canada. The impression persists that the Liberal government, with its usual concern for the interest of big business, is preparing to hand over all or part of Air Canada to private ownership. The chairman of Air Canada, appointed by this government, began his term of office in January by openly advocating the merger of Air Canada with Canadian Pacific Airlines. Had he suggested we take over Canadian Pacific Airlines, as we should, that would have been something else. They never should have been allowed in the field. The idea of a merger will not appeal to the taxpayers of this country. The week after that statement was made, Canadian Pacific was authorized to increase its transcontinental service from two daily flights in each direction to five, perhaps the most ill-timed administrative decision in Canadian history.
One would assume that if a merger was really under consideration, the government would do nothing in the interval to strengthen the hand of Canadian Pacific. Instead, the government and the Canadian Transport Commission, headed by a former Liberal minister of transport, have placed Canadian Pacific in a position in which to demand a larger share of the ownership and control of the merged airline in the event that a merger takes place. We cannot help viewing these events in light of the fact that the Minister without Portfolio from Manitoba (Mr. 
Richardson), who has been placed in charge of air transport policy by this government, until recently was a director of Canadian Pacific and a major holder of its common stock.
We do not dispute Mr. Pratte's claim that money would be saved by having a single transcontinental and international airline. Unlike the Liberals, we have consistently adhered to that posiiion. We have also insisted that that airline remain under public ownership. Since the public pays for the construction of airports and in effect subsidizes the whole industry, private entrepreneurs must not be allowed to reap a major share of the profits. We know that in a thinly populated country it makes no sense to have two airlines trying to duplicate one another's schedules, particularly when Air Canada will within two years be operating aircraft which have twice the seating capacity of those now in service. Duplication of service reduces load factors and increases costs, and we note with concern that the major airlines are rumoured to be considering another increase in domestic fares. On top of that there will be this additional 5 per cent tax.
On the other hand, we must point out that the uneconomic situation which exists did not arise mysteriously from natural causes; it is the result of deliberate government policy over a period of more than 20 years. Under both Liberal and Conservative governments the only consistent principle behind our air transport policy seems to have been concern for the interests of Canadian Pacific. The unstated assumption has been that Canadian Pacific has a natural right to as large a share of the air transportation market as can be given to it, at Air Canada's expense, without placing Air Canada in an over-all deficit position.
Canadian Pacific became an international airline because of the decision of a Liberal government in 1948. That decision, which reversed Mackenzie King's policy of keeping international air routes in public hands, was announced a few days after Parliament had adjourned-and nothing seems to have changed since then-so that the government could avoid parliamentary criticism of its actions. In his comparative study of the relations between governments and airlines David Corbett, an Australian political scientist, notes that this decision "marked the declining influence of Mackenzie King in the Liberal cabinet as his retirement approached in 1948, and
November 25, 1969

the rising power of the friends of the businessman in the Liberal Party". That power continued to rise in the following years and Canadian Pacific was permitted to extend its routes from the Pacific to Europe and Latin America. Canadian Pacific became a transcontinental airline as a result of a decision made and announced by the Conservative government during the 1958 election campaign.


Marcel Joseph Aimé Lambert: Thank
goodness it was.


Max Saltsman: Well, now you will be paying an extra 5 per cent. The hon. member for Edmonton West (Mr. Lambert) is arguing against the necessity of imposing a 5 per cent increase to defray the cost of airports. We could have had this as profit from Air Canada had we not introduced unnecessary competition.


Marcel Joseph Aimé Lambert: Max, you
sit in a comfortable pew.


Max Saltsman: Although the decision was arrived at in principle before any study of its economic implications could be made, the government commissioned Mr. Wheatcroft to prepare the first of his famous reports on airline competition in Canada. The hon. member for Prince Edward-Hastings (Mr. Hees), who was then minister of transport, told Mr. Wheatcroft that in his view "The time has come for the introduction of some measure of competition on our transcontinental routes".


Mr. Deputy Speaker:: Order, please. I am sorry to interrupt the hon. member, but I must say I am having some difficulty relating his remarks to the bill before the House. As I understand it, the bill is designed to amend the Excise Tax Act. As the hon. member knows, I am prepared in all these matters to give him the benefit of the doubt, but it does seem the remarks he has been delivering go well beyond the scope of this bill and deal with a matter which is quite extraneous to the bill.
[DOT] (8:20 p.m.)


Max Saltsman: With the greatest respect, Mr. Speaker, I wish to point out that we are opposing the present tax measure. We are suggesting an alternative to the present proposal and we are trying to support our position which is, simply, that if there was one public carrier in Canada, that carrier would be more profitable and this country
Excise Tax Act
would be able to save the 5 per cent tax now proposed. I hope, Mr. Speaker, you appreciate my position; I have to outline the way in which I believe this could come about. The Wheatcroft report discovered, however, that exposing the publicly-owned airline to transcontinental competition would wipe out the profits on that service needed to cover the losses on its other domestic services. This situation was not expected to change for several years.
In January, 1959, the minister announced his acceptance of a recommendation by the Air Transport Board that CPA be allowed to operate one daily transcontinental flight. In this curious recommendation the board found that additional transcontinental air services would have a major detrimental effect on existing operations, but overruled its own conclusions on the peculiar grounds that Canadian Pacific's position as an international air carrier needed strengthening. The transcontinental flight was supposed to serve this purpose by connecting its existing international operations.
The inauguration of the CPA service diverted traffic from the publicly-owned airline without increasing the total volume of traffic, and contributed to massive deficits suffered by both airlines over the next few years. In 1960 even the Liberal members of this House voted to condemn the government for unnecessary duplication of domestic transcontinental airline services which denied TCA the opportunity to implement a further reduction in fares. But once they returned to office in 1963 the Liberals reverted to old habits.
Rumours of an impending merger between the two airlines began to circulate as early as 1961. In February, 1964, a Liberal member proposed on the floor of this House that they be merged, with Canadian Pacific holding 50 per cent of the stock in the successor corporation. Considering the relative size of the two airlines at the time, this would have been quite a bargain for CPR shareholders. It is interesting to recall that when the proposal to establish a national airline was first advanced, CPA was offered an opportunity to take part as an equal partner. But it felt the deal was not good enough, and declined to do so. However, once the Canadian people had gone through the agony of building up the airline, the airports and the entire infrastructure required for the operation, CPA became terribly interested. In other words, its attitude

November 25, 1969
Excise Tax Act
was: let the people of Canada take all the risks and we shall come in tor the gravy.
I suggest this type of operation has led to deficits in the operations of our airports-this tendency to let private enterprise take the gravy when it was there to take, while continuing to pick up necessary expenses by using the public purse. In 1965 the Liberal government established spheres of influence for the international services of the two airlines which in effect confined Air Canada to its existing routes in northern Europe and the Caribbean while throwing the rest of the world open to Canadian Pacific. The allocation of the United States market was postponed until after the negotiation of a bilateral agreement with that country, but in 1966 Canadian Pacific was given the route from Vancouver to San Francisco. Whether this was in return for services to the Liberal Party or to the country is not clear from the records.
Also in 1965, Mr. Pickersgill announced that the government would employ a consultant, to advise, and I quote, "whether the growth of domestic main line service would now permit some further degree of competition on that basis and, if so, to recommend a suitable procedure for working out, from time to time, such extensions of service." Mr. Wheatcroft was again hired as the government's consultant, and presented his second report to the minister some time before April 4, 1966. The second Wheatcroft report, unlike the first, has for some reason never been released to the public. According to the Financial Times of April 3, 1967, it found that the establishment of competition on the transcontinental route had neither improved the efficiency of the service nor generated additional traffic. The implication is clear that it recommended against further increases in competition and that it has been kept secret for this reason.
Nevertheless, on March 27, 1967, nearly a year after he admitted receiving the report and five days after Parliament adjourned for the Easter recess, Mr. Pickersgill made a statement of policy concerning the transcontinental airline service: Canadian Pacific would be permitted to increase its service immediately to two daily flights and, beginning in 1969, it would be permitted to occupy 25 per cent of the market. On February 5, 1969, it was announced that Canadian Pacific would be permitted to increase its service to five daily flights in each direction. Since Air
[Mr. Saltsman.j
Canada has only ten flights, this will constitute 33 per cent of the market, rather than 25 per cent. So a series of political decisions has transformed the CPA from a small regional carrier into a major transcontinental and international airline.
Successive governments have deliberately created this situation and justified it with reference to the presumed benefits of competition. If the Liberal government now reverses its stand and eliminates competition by merging the two lines, it will have been party to a scandal unprecedented in our history. In effect, half of the airline owned by the Canadian people will have been turned over to the CPR free of charge, first by gradually allocating routes to Canadian Pacific at Air Canada's expense and then by merging the two on a basis of equality. This can only encourage elements in the business community to make even more outrageous demands. Already an editorial in the Financial Post of January 11, 1969, has demanded that the whole air transport industry be handed over to private interests, with the government completely liquidating its ownership of Air Canada.


Mr. Deputy Speaker:: Order, please. Again I apologize for interrupting the hon. member, but I must say my doubts are stronger now than they were when I first interrupted him. He really is in the area of air transport policy; it does appear to me that he is well beyond the scope of the bill before us. I have been as generous as I can; indeed, I have probably been too generous. I now invite the hon. member to bring his present line of argument to a close, bearing in mind that the rule of relevancy, though often difficult to apply, requires that debate relate directly to what is before the House. At the moment, it is an amendment to the Excise Tax Act which is before use. As I review the explanatory notes, I must say I have difficulty in reconciling the hon. member's argument with the contents of the bill.


Max Saltsman: Thank you, Mr. Speaker. I have a few more words which will conclude this portion of my argument. However, I wish to assure Your Honour that when a tax is brought in which will affect every passenger who uses the airline service, it must be considered part of air transportation policy. Although it may in this case fall under the direct responsibility of the Minister of Finance (Mr. Benson), it will have an effect on transportation policy and this is why I
November 25, 1969

have discussed it in a somewhat wider context than usual.
I conclude with these remarks: We in this party will do our utmost to ensure that the Canadian people are not deprived of their national airline through a series of cynical bargains with private interests. We will demand that Air Canada shall not be deprived of the opportunity to prosper and expand while making low-cost transportation available to its real owners, the people of this country. We will resist any fallacious argument which claims that the transfer of this great public resource to private interests is either necessary or desirable. Most of the world's great airlines, outside of the United States, are in public hands. With the support to which they are entitled from their respective governments they can meet the challenge of the supersonic era.
We in this country have suffered too much at the hands of innefficient private enterprise. We have an airline of which we can be enormously proud. Despite all the roadblocks which have been put in the way of Air Canada, it is still one of the great airlines of the world. We in this party cannot see our way clear to vote for this obvious camouflage, this 5 per cent surtax, to cover up the consequences of the inefficient stupidity of the policy followed by the government in connection with air transportation in this country.
[DOT] (8:30 p.m.)


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I shall be very brief, because as all other members, I should like us to proceed as quickly as possible to the consideration of other government bills, because we have a very full legislative program.
Bill C-155 is no more no less than the levying of a new tax on air travel.
The minister will have, I believe, the opportunity to tell us how much that new tax will bring in and how the government will use the millions thus collected.
I would like to draw the attention of the Minister to the following text: Air travel is the mode of transportation used more and more by businessmen. It is a fast and therefore should be used not only by the inhabitants of big cities, but also by those of the areas that the governments are trying to develop.
Yet, in the region I have the honour to represent, there are problems concerning landing strips and if I were sure that the 21545-8}
Excise Tax Act
amounts the government intends to get through this new tax would be used to enlarge landing strips at municipal airports, it would not be so bad. It would still be a tax, but at least one would know that it would be used to improve difficult situations.
In my opinion the government should answer these questions because as it has examined all aspects of this problem, it should certainly be able to do so.
Nevertheless, the most practical solution is that suggested by the Ralliement creditiste members who always use the same hammer to drive in the same nail. The harder and longer it is, the harder they must strike. If the government thinks that a new tax would be the ideal solution, I repeat that consumers will have less money in their pockets. There will be charges which will very often be added to production costs. So the consumers of goods and services will again have to pay the total cost.
I know that the government needs money for its projects, a few of which though under way are temporarily stopped due to lack of funds. In my opinion it would be to the advantage of the government to study once more the possibility of using the Bank of Canada for this purpose.
This tax revenue the government obtains from consumers originated somewhere, so could not the government discover that new money can also exist in the form of services, instead of debts.
That is why I urge the sponsor of the bill to seriously consider our suggestion. Unless very specific replies as to the use of these funds are forthcoming, I must necessarily oppose this new tax because it is the taxpayers who will be paying the piper, and they are all already complaining about not having enough money.


Alfred Dryden Hales: Mr. Speaker, we have before us an amendment to the Excise Tax Act to authorize an air transportation tax of two kinds, one consisting of a 5 per cent ad valorem, tax for transportation to areas spelled out in the bill-including Canada, the United States, except Hawaii, and St. Pierre and Miquelon-and another tax applied on a straight per capita basis on travel to all offshore areas.
I think the introduction of an amendment of this kind demands that the minister supply the House with justification for imposing such

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a tax. In this regard I think we in the House are becoming very slipshod. The government states that money must be collected for this, that or the other purpose without justifying the need. I think the members of this House should be told why the imposition of this tax is necessary.
The minister has not revealed the amount of money that is required to be raised, or to what use the money is to be put. I should like to know whether the money will be deposited in the consolidated revenue fund, or into a special trust fund created for the specific purpose of providing funds to meet the cost of construction and maintenance of airports. I would be remiss if I did not remind the House that when the Conservatives were in office several airports were built. For example, we had to meet the bill for four airports, Dorval, Malton, Winnipeg and Edmonton, all beautiful, large airports which were constructed without the necessity of imposing a tax of this kind on the taxpayers of Canada. We on this side of the House support the principle that he who uses should pay. In other words, those who use the airports should pay for their construction and maintenance. I do not think those Canadians who live in isolated parts of Canada and who seldom use airport facilities should be expected to pay for these facilities.
If the principle of taxing those who use the airports is a correct one, how will it be applied? According to this amendment, 5 per cent will be added to the cost of an air ticket. The hon. member for Edmonton West (Mr. Lambert) pointed out that a person who travelled return from, say, Toronto to Ottawa would pay a tax of $2.10, which is 5 per cent of the air fare, whereas a person travelling from Toronto to Vancouver, taxed on the same basis, would pay five or six times as much.
Let us just analyse this situation. A person travelling between two airports, regardless of the length of his journey, occupies the same number of square feet at the airport terminal, uses the same parking space area and requires the same checking facilities and rest rooms, use of restaurant, and so on, as a person who travels the short distance from Ottawa to Toronto. So I think it would be a much fairer assessment if it were on a per head basis across the board. Everybody would then pay the same. The arguments I have put forth for this proposition are, I think, sound and reasonable. The United States have imposed a 5 per cent transportation charge,

and they are not satisfied with it; there is great political pressure to have it changed. One of the greatest arguments against it is put in the form of a question. They ask: Why should the long-haul passenger be subsidizing the short-haul passenger?
[DOT] (8:40 p.m.)
When the time comes to revise air transportation rates, people will sit down around the table and discuss the situation. They will realize that a passenger on a short trip will be paying only $2.10 in tax. One can visualize their coming to the conclusion that the rate can be increased, but not to the long-distance passenger. I am trying to visualize what might happen when the time comes to make adjustments in the rates.
Nothing was said about whether this tax would apply to air freight or express. Perhaps the minister did say something about that, but I did not hear him. It is apparently left to the Governor in Council, or the cabinet, in respect of overseas charges; they will decide whether the tax is to be $2 or $5. Surely it would be better for us to know now what the rates will be. Let us establish them now so that we are not buying a pig in a bag, as it were. Those are some of the points that come to my mind. I hope there will be a freewheeling discussion during the debate on this subject and that all hon. members will have a chance to take part in it.
Let me quote from the Financial Times of Canada, the November 24 issue, which says in part:
Transport department officials suggest the tax would bring in $20 million in new revenue to the government.
That is a lot of money. At this moment I think we might ask whether, with the invention of the short take-off aircraft which has proven capable of taking off in a fraction of the distance now required, this extra revenue will be needed to cover the cost, or will it more than cover it? We should keep this in mind. The article continues:
This tax would increase income at all airports by almost 50 per cent (currently it is $42 million annually). Conversely, it would make a reasonable dent in the operating losses of the airports. The national accounts figure for 1968-69 placed these at about $58 million.
But apart from doing nothing to cut into the "substantial" expense of maintaining air services- air traffic control and telecommunications networks are two examples-the point about how the money would be used still lingers.
November 25, 1969

That bears out what I was saying when I commenced my remarks. The House should be supplied with more detail as to why this tax is necessary. It is sill right for us to say we need more money, but how will we get it? We are going to again tax the poor taxpayer. Let us put a priority on the taxes we intend to thrust on the taxpayer Is this a priority tax? To conclude my remarks I should like to repeat what I said at the beginning. We need more information about amendments to the Excice Tax Act before we can intelligently vote one way or the other.


Douglas Scott Harkness: Mr. Speaker, I should like to speak very briefly on this bill. I do so because it is an inequitable and discriminatory measure which should not pass in its present form. The hon. member for Wellington (Mr. Hales) and the hon. member for Edmonton West (Mr. Lambert) pointed out, and most of us agree, that if the money required to operate our airports, derived from fees charged and other revenue obtained from the operation, is not sufficient to meet the cost, it would be more equitable to meet the cost by charging the people who use the airports-in other words, the passengers-than by assessing that cost to the general population and taking it out of the consolidated revenue fund.
As far as a tax is concerned, I think most people would agree that this is the equitable way of paying whatever costs are incurred. However, as was pointed out by the hon. member for Wellington, we do not know how much money is required to meet these costs. We do not know whether the tax proposed will just cover the extra cost, or whether it will bring a greater amount of revenue into the consolidated revenue fund. Before the measure is passed we should have before us the estimates of the Department of Transport and the Department of Finance in respect of what this tax will be used for, and where it is going if it is in excess of the amount really required to meet those airport expenses now borne by the federal government.
The person who travels from Ottawa to Montreal and makes use of those two airports is in exactly the same position, as far as the use of the airport is concerned, as the person who travels from Vancouver to Montreal. I see no reason why the person who travels from Vancouver to Montreal should pay several times as much in the form of taxes for the use he makes of those airports than the person who travels from Ottawa to Montreal.
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The tax is discriminatory of people in outlying areas of this country who fly considerable distances to get to the seat of government or the two major cities in this part of the country. A number of people from the east and from the west have to come to Toronto and Montreal for business reasons. This tax is particularly discriminatory so far as people in the city of Calgary are concerned. That city generates a very large amount of air traffic,, much larger than the per capita figure for any other city in Canada. Calgarians travel a great distance to Ottawa, Montreal, Toronto and various places in the United States in connection with the oil business. Therefore, this tax will be particularly burdensome to the citizens of that city. If it is necessary to impose a tax in order to meet airport costs, it should be imposed on a per capita basis; it should not be imposed as is proposed, that is, as a percentage of the total fare. This proposal will result in people living in outlying sections of the country paying more taxes. Let me remind hon. members of the regional development schemes the government proposes for those areas now being discriminated against because of economic and geographical conditions. The proposal before us will impose a further burden on these people. It is a burden they should not be asked to bear. Therefore, I hope this legislation will be modified so that whatever taxes are imposed will be imposed on a straight per capita airport basis, rather than as a percentage of total fare.


John Howard Lundrigan: Mr. Speaker, perhaps there is no need for my saying anything because most of the points that have been raised-*


Some hon. Members:: Hear, hear.


John Howard Lundrigan: -have been covered adequately by my eminent colleagues. Looking back at those remarks one sees that several opinions have been expressed in respect of the principle of this type of taxation. Several hon. members have expressed agreement with the proposal, but I have not been convinced.
I want to emphasize one point mentioned by the hon. member for Calgary Centre (Mr. Harkness). It appears to me that this tax will certainly have an adverse effect on people coming from places which are far from the centre of Canada which most people consider to be the Toronto-Montreal complex. People coming from the Atlantic region, for example-if I may be a little parochial-will certainly be overtaxed as a result of the proposed legislation. I cannot stand here with

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a clear conscience and support a tax which will discriminate against people from my part of Canada. If I were living in Hull, I would agree with this new tax because I would not have to do any flying. But I have to do a fair amount of flying between Gander and St. John's, Newfoundland, and there are in this position hundreds of small businessmen who are trying to make ends meet and who will perhaps go under when the white paper on taxation is enacted into legislation. When this piece of legislation becomes effective they will certainly go under.
[DOT] (8:50 p.m.)
Before I can agree to the proposed tax I would like to know what the money will be used for. This is not a complicated question and it is one to which all Canadians want an answer. I have heard that the government plans to spend $6 million in Ste. Scholastique. It plans to renovate the Vancouver Airport facilities to the tune of some $30 million, and I understand a controversy is shaping up, enhanced by the Minister of Transport (Mr. Jamieson), over airport facilities in the Toronto area. If that is what the money will be collected for, and the government has made these commitments, I as a Canadian taxpayer, my 70,000 constituents and 22 million Canadians would like to know if in fact they are the plans of the government.
Last year I was pressuring a friend of the Premier of Newfoundland, The Minister of Transport, for action on the facilities at the International Airport at Gander We are entering an era wherein 8,900-foot runways are no longer adequate and we need at that airport, as I imagine is needed at most airports in Canada, an extension of the runway facilities to accommodate larger and faster aircraft which need 11,000-foot runways. If these are the sort of things for which this money will be used, then I might change my attitude.
Another question which I would like to raise is the following: We are talking about efficiency. I have been in the House of Commons only a few months and every day I have been hearing about government efficiency. Today I learned that a $400,000 investment of Canadian taxpayers is going into refurnishing the new Department of Communications.


Mr. Speaker:: Order, please. I take the liberty to remind the hon. member that the rule of relevancy has to be taken into account. The hon. member is straying very far from the
[Mr. Saltsman.l
principle of the bill and I ask him to return to the subject matter of the bill before the house. Most certainly if the hon. member is allowed to adopt the line of thinking and argument which he is putting forth to the House at present, other hon. members will want the same privilege, to which they would be entitled. We would then be discussing everything under the sun except what is before the House. I invite the hon. member to keep that in mind.


Some hon. Members:: Hear, hear


John Howard Lundrigan: Mr. Speaker, I do not understand why members of the NDP are applauding your decision. This is hardly understandable after listening to their speeches. I wanted to establish a point, and not being one of the learned group of lawyers perhaps I am not stating my premises very clearly. I have been trying to establish a connection between efficiency and the government, and the government's need for more taxes. I am trying to put forward the point of view that if I am to support this tax increase, I would like to see more efficiency in government spending.


Some hon. Members:: Hear, hear.


John Howard Lundrigan: A point of concern to many Canadians is that the Canadian people are perhaps among the highest taxed of the free nations of the world, and this additional taxation will have increasing repercussions. Where will the line be drawn? We are now being taxed directly and indirectly, as economists can confirm, in order to finance airports and so the government can provide a service to the Canadian people. Then we turn around and suggest imposing a tax on the Canadian people for the use of a service for which they have already paid. What tax will we impose for the use of post offices? Shall we increase postage from six cents to eight cents? On looking at the bill before us I come to the conclusion that some of the points raised by hon. members have not been taken into consideration. It seems to me that this bill does not reflect a great deal of thought; as a matter of fact, it appears that it was hastily concocted in order to raise a quick buck. This is my impression.
Questions such as the one raised by the hon. member for Calgary Centre and the hon. member for Edmonton West (Mr. Lambert) have not been taken into consideration, nor have questions about the effect on a person who uses airport facilities three or four times

Excise Tax Act
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a week or six or seven times a month, such as the small businessman who makes $8,000 or $10,000 a year and is forced to frequently use these facilities in order to carry on his business. What happens to the man who has to spend a significant proportion of his expense account money on which he will not be able to claim a tax rebate after 1971?
What will happen to air freight? This is a significant question. In Newfoundland we depend to a large extent on freight coming in by air in order to take care of the needs of our people. We bring in products from Ontario and Quebec by air. Are we to be further taxed? What about people who live in places such as Vancouver, the far north and some places in Newfoundland: they will pay a proportionately higher rate relative to their earnings, in comparison with people in other parts of Canada.
What about the per capita increase? If we are going to increase taxes, let us apply the increase equally to all Canadians. What about the users of private aircraft: are they going to have to pay taxes for the use of airport facilities? I am referring to the numerous small companies which operate private businesses with small aircraft. I do not see any reference to these people in the bill before us. What about the administrative costs of administering the $20 million which will be collected? I hope I am not again guilty of skirting the issue, but it seems to me that the administrative cost of such a tax, or of a capital gains tax, is such that the ultimate revenue derived will be negligible.
I will not continue my remarks because I know other hon. members would like to speak. I should like to hear Liberal members, NDP members and other Conservative members who come from other parts of Canada raise questions about the implications of this tax in respect of the people they represent. If the government is in a financial mess, let us face facts and collect taxes directly; let us not impose a tax on a tax, the administrative costs of which would render the ultimate results negligible.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I should like to make a few comments about this tax as it affects the northern sections of our country. In the years since I came to Ottawa I have come to realize that so far as this government is concerned the development of the north is something to forget about.
[DOT] (9:00 p.m.)
Ever since the Liberal government took office back in 1963 it has tended to discourage the development of the north. I say this tax is in keeping with that theme. We had a roads to resources program instituted by a Conservative government. It held out a good deal of hope to the people of the north that they might finally have some of the ordinary amenities that Canadians in other parts of the country enjoy. When the Liberals assumed office, they discontinued that program. Many of the people in the north live in isolated villages scattered many miles apart. Often their only means of communication with the southern regions of the country is by air, and in most cases by chartered air service. As you know, Mr. Speaker, chartered air service costs two or three times, and maybe four times as much as the use of commercial aircraft, but people in northern Alberta, as well as those in the Northwest Territories and the Yukon frequently must use chartered air services because there is nothing else available to them.
A man travelling from Fort Chipewyan to Fort McMurray has the choice of going by dog-team in wintertime, by boat in summertime or by using chartered air service. The first two methods of travel are highly unacceptable. We are here being asked to place a tax burden on people already greatly burdened through having to use chartered aircraft. The minister should pay special attention to this problem. It is a great problem for people who live in the north. I believe he should make an exception in their case, or possibly should forget about this proposed tax so far as people who use chartered aircraft are concerned.


Gerald William Baldwin: Mr
Speaker, I was not going to say very much, but I am compelled to do so by the eloquence of the hon. member for Gander-Twillingate (Mr. Lundrigan) who said that other people should get up and voice their views. I waited for members on the other side of the House to speak, but the only remark I heard was an outburst from the hon. member for High Park (Mr. Deakon), who, rather rudely in my opinion, wanted to know how many people travelled into the north country.
Travel into the north is primarily by air. I have been flying into the north, into the Northwest Territories and places like Yellowknife, for 35 or 40 years. The north now has something in the way of airports, but in many


An hon. Member:: The thirty-bucks boy.


Gerald William Baldwin: I hate to use rude terms like thirty-bucks boy, and in the sense that I would want to use such a term it would be unparliamentary; therefore, I will content myself with just thinking of it. In the result, I think the government should take a good, hard look at this proposed tax. When the committee stage is reached we propose to take steps with regard to the clauses1 to which we object. I hope that by that time the government will have reviewed its policy on this matter, because it is not a fair tax. I think it is completely wrong and I hope the government will review it.
[DOT] (9:10 p.m.)
Certainly we all know taxation is like death. There is a certain inevitability about it, an inevitability which under this government is being compounded.


An hon. Member:: It creeps up on you.


Gerald William Baldwin: I do not like to use the word "creeps" which my hon. friend has used; it may be taken out of context. Finally, Mr. Speaker, as I intend to point out when we get into a clause by clause study, there are some rather peculiar clauses in this bill. I am not going to debate them now; I just want to refer to them so that my friends can express themselves: when we get into committee. Clause 14 (1) gives to somebody-I do not
November 25, 1969

know who, but presumably the government- an inordinate amount of power, stating:
14(1) Where an amount is paid or payable outside Canada for the transportation of a person by air
(e) by any other arrangement with a person outside Canada for the benefit or convenience of a person in Canada
Mr. Speaker, that is a very wide, very woolly, very loose clause and the minister might have a look at it when we get to the committee stage. He might well attempt to interpret and explain it, and that is why I am raising it now. As I see it, if I were to travel from Ottawa to New York and then ask someone there to reserve for me a ticket from New York to San Francisco, even though I had paid the tax on my Ottawa-New York ticket it would seem, within the meaning of clause 14, that at the whim of the government I might also be called upon to pay 5 per cent tax on the ticket for the New York-San Francisco and return trip. I think this is a too far-reaching power to trust to any government, and certainly this government.
Mr. Speaker, I would also ask the minister to look at clause 18. We are quite anxious to facilitate the passage of this legislation, tailored to what we think it should be when the changes are made. Clause 18 (d) provides:
The Governor in Council may by regulation ...
(d) determine for the purposes of this Part when transportation begins or ends
(i) at a point in Canada
And so on. This seems to be a rather wide power to give to any government, much less this rather extraordinary government. I hope that the minister will have looked at this question by the time we come to that clause.


Mr. F. J. Bigg (Pembina):: Mr. Speaker, as usual I do not stand and merely criticize for the sake of criticizing. I have a positive suggestion to make in this regard. I am afraid this is a rather hasty piece of legislation because of the number of suggestions already made, and because the terms of reference have not been laid down to the satisfaction of members. I should like to make some suggestions on ways to raise revenue as an alternative to this measure.
In the first place, Mr. Speaker, when we are building airports I think we should cut down the excessive waste of the taxpayers' money on such frills as modern sculpture. Yesterday in Vancouver Airport I saw three yellow slabs of metal and I did not know what they were. I thought they were snow-scrapers until
Excise Tax Act
somebody told me that it was a piece of modern architecture or sculpture. It cost the people of Canada $150,000-$150,000 for three flat slabs of metal!


Mr. Crouse:: Explain.


Frederick Johnstone (Jack) Bigg: In Edmonton Airport there are two paintings on the wall. I am not sure of the figures, maybe they are exaggerated, but the story I heard was that these two so-called paintings cost the taxpayers of Canada $26,000. One is a semi-circular piece of wall-board on which somebody has stuck some old burlap. They pasted it on, because there are lumps of paste, ordinary flour and water, as big as your thumb; and three colours, yellow, red and black. I do not know whether that is called art or not. It is not a painting; it is not even decorative. There is another one, blue, white and black, somewhat the size of the end of this building. It is supposed to be another painting. Although I am an art lover and have dabbled a little with paint, I do not think this is an area in which the taxpayers' money should be spent, nor do I think that we should come to them afterwards saying that we want to add 5 per cent to the air fare in order to decorate-and I put that word in italics-the airports of Canada with such poor items of art.
The next question is how to raise the money, as an alternative to this new tax. I would suggest that every airport in Canada might have reasonable entertainment for people held up anywhere from one to twelve hours waiting for airplanes. Why not theatres, slot TV, proper restaurants? It is true that some Canadian airports have good restaurants, but in most of them the eating facilities are precambrian; I think that is the best description. One would fare better by taking along a lunch-box. Generally speaking, the eating facilities in our airports are a disgrace. Why not put in decent theatres, slot machine TV and restaurants? If we had proper facilities at the airports I am quite sure they would make money.
The ground transportation situation at Canadian airports is a standing joke. In bad weather it takes longer to get to Ottawa Airport from downtown than it does to get from the airport to Toronto. Surely with a little co-operation at the three levels of government the capital of Canada could produce one decent road. I know I would not mind paying a considerable sum of money in order to have rapid and comfortable transportation between here and Ottawa Airport. It is something we

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need, something we are willing to pay for, and the taxpayers' money and my money would be spent in a good cause.
In many cases the ground transportation at airports is a disgrace. I wonder how many people here have complained about having to walk more than a mile at Dorval Airport in Montreal. There are no proper facilities for porters or even hand-carriers to take the luggage. I have seen elderly women lugging great suitcases for a mile, on foot. In little countries like Holland and Belgium the luggage is taken from one plane or train to another for the passenger, without charge. I think my suggestions might earn millions of dollars over the years, so why not provide decent facilities at the airports and in and out of the airports?
A lot of money could be raised by improving the international air facilities to and from Canada. During the past six weeks I have received approximately 100 letters from business firms and private individuals all over Alberta requesting that the major airlines serving the United States, Alaska and abroad be allowed to enter the international airport at Edmonton. I was astounded to learn that our great airports refuse this sort of service. In the twentieth century why should we be denied the right to travel to any airport in the world if we are willing to pay the price? The argument as to whether one should pay a per capita charge, as provided in this piece of legislation, or whether it should be as a percentage of the ticket is one I have not resolved myself. I should like to have more information in this regard.
[DOT] (9:20 p.m.)
At present the situation appears to me to be most unfair. A traveller flying long distances will have his overhead increased by a considerable percentage as a result of this unfair tax. I think this question might well be looked into. Perhaps a compromise could be worked out. The government may wish to introduce a combination of a percentage of the ticket price plus a toll. Instead of the flat 5 per cent, there might be a toll plus, say, a tax of $2 for the use of the airport. A small percentage could be charged, so that the man travelling long distances would not be paying less, proportionately, than others using the airport. Instead of merely saying, "Let us put a 5 per cent tax on, through which we will raise 'X' dollars," the government ought to be looking for ways to apply a measure like this more equitably. As I say, there might be a toll

plus a percentage, in terms of money, of the distance the ticket will take a traveller.
It would be wise if we did not tax too heavily those people from other countries who use Canadian airports. The tourist industry, which is the second largest industry in Canada in terms of net revenue, brings in vital foreign exchange. We want tourists from all over the world to come here, enjoy our mountains and outdoor facilities when on holiday and leave with us their very much needed dollar and sterling currencies with which to balance our payments.
Being interested in the development of the north, I have taken a realistic look at this matter. It would be shortsighted on our part to bring in a tax which would slow down the pace of mineral and oil resource discoveries in newly explored areas of the Northwest Territories and the Arctic islands. It would be particularly shortsighted if the government were to hamper that part of our industry which is racing United States industry in an effort to explore and develop our Arctic coastline in the shortest period of time and with the least possible overhead.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, without doubt Bill C-155 is one of the most inequitable pieces of legislation this government has brought in. I cannot too strongly criticize the government's attitude in bringing forward this bill. Many people in our country want to travel, and this tax will make it more expensive for them to do so. This, therefore, is a wrong tax to bring in at this period in our history. The Standing Committee on Transport and Communications went to Labrador and Newfoundland in September. We found, during the course of our trip, that people in the Schefferville, Wabush and Labrador areas will have to pay exhorbi-tant air fares if they wish to travel. That being so, for heaven's sake let us stand up and be counted in our opposition to this measure.
Is the government really concerned about this nation? By imposing this sort of tax the government is being most unfair. The bill shows clearly that those who are travelling farthest will have to pay most. Has the government no consideration for those in this country who must live on fixed incomes? By introducing this measure the government has shown, again, that it has no compassion for those who must live on fixed incomes and who may wish to travel overseas or elsewhere. Even those wishing to go by charter flights must pay. I hope the minister will
November 25. 1969

clarify this point when he sums up. Those who have managed to scrape up enough money to go by charter flight will have to pay this extra cost. Possibly they will not find it in their power to go on those tours we have all been hearing about.
Many of our people wish to travel, but this tax may make it impossible. Clearly, those who travelled to Harrison Hot Springs last week-end were not worried about the 5 per cent tax. They could afford to go. They do not fall into the category of those who are least able to pay higher transportation costs. As I said, many thousands of our people would like to travel, but this new type of tax will add to their expenses in the future and will limit their travelling.
The transportation systems of this country need overhauling and we need a comprehensive transportation policy. Even though we have a Transport Commission and the National Transportation Act on the statute books, the government has adopted a piecemeal approach to transportation, as is evidenced in Bill C-155. If the government were really concerned about providing transportation for the people of this country, it would not have adopted this piecemeal approach. Let us have a complete and comprehensive transportation policy that will allow everyone in this country to travel, and not just those who have affluent positions in our affluent society.
Many applications have been held before the Canadian Transport Commission on the subject of abandonment of railway passenger services. In my opinion the board should not automatically grant such requests. The board should consider over-all transport policy. It seems evident, nevertheless, that the government is not really concerned about introducing such a policy for Canada which will be applicable from the Atlantic to the Pacific.
Now that the "Bullet" is no longer in service in Newfoundland, the people of that area have to rely more on air transport. The government is now asking them to pay an additional 5 per cent for their air tickets if they want to travel by air in Canada or to other parts. It is disgraceful that the government should tell the people of this country that if they want to travel by air they must pay an extra 5 per cent for their air tickets because extra airport facilities are needed. I hope the government will carefully reconsider the 5 per cent tax to be imposed after Bill C-155 has received passage.
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Everyone in this country who is not now directly affected by this measure may ultimately be affected by it. Surely the advent of the new jumbo jet will remove the need for this tax. Jumbo jets will be able to carry many people. If members of the government are looking ahead-and it seems that at Harrison Hot Springs they were able only to look ahead and not to examine the present-to 1971, 1972 and 1973, they will see that jumbo jets may provide an answer to this problem. In the meantime, let us all realize that 5 per cent extra on an air ticket is a major item for many people of this country who are still earning less than $30 a week.


Herbert Eser (Herb) Gray: Mr. Speaker,-


Stanley Howard Knowles: Mr. Speaker, if the minister speaks now he will close the debate.
[DOT] (9:30 p.m.)


Herbert Eser (Herb) Gray: Mr. Speaker, as is usual in these circumstances, I think hon. members expect me to attempt to respond to at least some of the points that they have made.
The hon. member for Wellington (Mr. Hales) suggested that not enough details had been presented by me with respect to this tax and its purposes. In my opening statement I did attempt to say something about the purpose of the tax. I said and I quote, "As explained by the Minister of Finance at that time",-I was referring to the June 3 budget speech-"the cost of construction and maintenance of air transportation facilities is very high and, in addition to obtaining revenue from user charges at airports, the government has decided that it is advisable to ask Parliament to require individuals who travel by air to pay an amount through what in effect will be a special tax to help defray the costs of providing air transportation facilities".
Perhaps, Mr. Speaker, I might have used the opportunity given to me in the opening of the second reading debate to have said even more. I felt, however, that hon. members would not have wanted me to take the time of the House for this purpose in view of the rather complete explanation of the purpose of the tax given by my colleague, the Minister of Finance (Mr. Benson), when he presented his budget statement on June 3, 1969. Perhaps I might at this point summarize some of the things the Minister of Finance said during the budget statement because I think it will help answer the quite legitimate request of the

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hon. member for Wellington for details about the purpose of the tax, the revenues expected and so on.
In the budget statement the Minister of Finance said that a further measure of budgetary significance arises out of a general policy to ask those who benefit directly from a service or facility provided by the government to pay charges more in line with the direct costs involved. Several speakers from the official opposition seemed to accept this principle and support it, although in fairness to them I think I should note that they felt that the tax on flights within North America should be added on a flat rate basis rather than ad valorem. I will attempt to deal with this argument later in my remarks.
The Minister of Finance went on to say there would be a review of user charges and in addition the introduction of some new charges. He said, as reported at page 9420 of Hansard:
In almost all cases this action can be taken under existing legislation. There is one important field, however, where legislation will be required to impose what will in effect be a tax. This relates to air transport.
It is well known that our expenditures on the construction, equipment, operation and maintenance of airports and other air transport facilities are now very large. In the last fiscal year they are estimated at $73 million. The revenue we obtain from user charges, rents, etc. of one kind and another related to airports and air transport facilities is far less-only about $41 million-
The minister went on to say:
We have decided, however, on one measure which we believe should be enacted by parliament as soon as possible to assist in providing more revenue in this field.
He continued:
We propose that a charge, tax, be levied on the price of tickets or other charges (such as charter hire) made by air carriers for carrying passengers in or from Canada on trips commencing with a date to be specified in the legislation. We have worked out a tentative plan for such charges which we believe would yield revenues of about $20 million a year.
I assumed most hon. members were familiar with the information provided by the Minister of Finance in his budget statement. I felt they would not have wanted me to repeat them in my opening statement, although I am very happy to do so to help make the record on this debate more complete. The hon. member for Wellington asked where the proceeds of the tax will go. I understand the proceeds will go into the consolidated revenue fund. Generally speaking, the amount raised will be taken into account in determining the

amount that the Department of Transport will be spending on air transport facilities.
The hon. member for Edmonton West (Mr. Lambert), accepting as he did the general principle that users of facilities should bear an appropriate proportion of their cost, argued that the tax should be a flat tax rather than an ad valorem tax. It is true that the bill does not attempt to make the amount of tax depend directly or precisely upon the use of an airport or the use of navigational aids. This is something that would be very difficult to do. It should be stressed that this is not a tax simply for the use of an airport or airports. As I understand the proposed tax, it is to help provide revenues to pay for the use, maintenance and expansion of the air transport facilities generally which are provided by the federal Department of Transport.
I gather this would include the facilities of air navigation, air traffic control, meteorological and so on, not simply the use of the airport structure itself. If I am correct in this, it seems that some of the arguments put forward by hon. members who have spoken to the effect that the tax is not fair because there are some people who will use an airport once and others will use it three times, are not as valid as they would be if the tax were to be used solely for bearing the cost of maintaining the airport structure itself, something which I am informed is not the case. The tax in effect is imposed on the amount paid for transportation. This is basically analogous to the manner in which sales taxes and excise taxes are imposed. As I said in my opening remarks, this is a tax upon consumption. In other words, as I understand the sales tax it is basically a percentage of the price of the goods purchased.


An hon. Member:: Don't you know?


Herbert Eser (Herb) Gray: I believe the hon. member for Peace River (Mr. Baldwin) suggested that what is done by somebody travelling by car is quite different from the proposed tax. He suggested there is a flat amount paid, I suppose for the licence or registration of the car, and there is another tax paid which is linked with the amount of gasoline that the person uses to travel about in his car. He suggested the proposed excise tax is something different. Perhaps I am wrong in this, but it seems basically that it is quite similar.
If a person travels from Vancouver to Ottawa he uses more gas; it costs him more money since he pays a greater amount of tax
November 25, 1969

on that gas. This seems to be analogous to what is involved in somebody travelling from Vancouver to Ottawa by airplane rather than by car. It costs more than travelling by airplane from Toronto to Ottawa and therefore the tax to that equivalent extent would be greater, just as it costs more by way of tax on gasoline to travel by car between Vancouver and Ottawa than to travel by car between Toronto and Ottawa.
Although I thought the hon. member was putting forward an interesting argument, I felt, and perhaps I am incorrect, that it tended to support the argument for an ad valorem tax rather than the argument against it. If a flat tax were imposed upon every trip by air within Canada and to points in North America, the amount of such tax would probably have to be $5. This would result in a tax equal to about half the fare for persons flying on short trips such as from Fredericton to Saint John, New Brunswick or from Vancouver to Victoria. Some people would end up paying a 50 per cent tax if the proposal put forward by some hon. members of the official opposition were accepted rather than the 5 per cent ad valorem tax proposed by the government.
Hon. members should note it is likely that a flat tax per trip within the taxation area as defined in the bill before us would create many complications. For example, if the tax were imposed on each trip, it would apply on both legs of a return trip ticket. It would be very difficult and probably impossible to fairly define a return trip ticket. For example, would a trip from Ottawa to Winnipeg and back from Winnipeg to Ottawa via Toronto be a round trip ticket? Would it be a round trip ticket if the passenger came back from Winnipeg to Montreal instead of to Ottawa?
[DOT] (9:40 p.m.)
If the tax applied to each purchase of a ticket, passengers would include in one purchase all the transportation they might require for a couple of months and then transfer the unused portions. This would add seriously to the cost for the airlines and to the cost of auditing.
If there were to be a flat rate tax imposed on each trip, I presume hon. members would be arguing for a tax which would be in the form of a departure tax collected each time a passenger boarded an aircraft. I suggest such a tax would greatly add to the paperwork at airports and would seriously slow down the flow of passengers through terminals. As the
Excise Tax Act
hon. member for Pembina (Mr. Bigg) remarked, delays at airports due to congestion, and so on, are already serious enough and the imposition of a departure tax would certainly add to the congestion-it would become even worse as the jumbo jets embarked even larger numbers of passengers all at the same time.
A flat departure tax would contain a number of elements of unfairness. For example, if there were such a tax, a passenger flying from Toronto to Vancouver who is unable to get a through flight but who has to stop at Winnipeg and Edmonton uses four airports and logically, I suppose, could pay four departure taxes. But why should he pay more tax than the person who flies directly from Toronto to Vancouver? Then again, a tax payable every time an airport was used would cause passengers to seek a through service and thus might help one airline at the expense of another.
There are other points which should be noted. One argument against the advisability of a flat rate tax of the type proposed by the hon. member is that to produce the same total revenue there would certainly have to be a substantial increase in the tax on short distance travel, and this might have the effect of distorting the demand for short distance air travel in a way which would create competitive problems vis-a-vis other modes of transport.
I have already suggested that this tax is intended to yield revenue to provide services for air travellers, services which are not confined to landing and take-off. Indeed, aircraft have access to a much more comprehensive range of services which are used throughout the flight, from the point of take-off to the point of landing.
I might point out, also, that the United States already imposes a 5 per cent ad valorem tax. As I said in my opening remarks, taxes in connection with air travel have international ramifications. Our major airlines in Canada, Air Canada, Canadian Pacific and so on, are international carriers and are already geared administratively to collecting the United States ad valorem tax.
The hon. member for Edmonton West (Mr. Lambert) suggested that this tax would place an unfair burden on the airlines when it came to collect them. The system proposed is generally that which is used at the present time for the collection of sales tax, a similar form of tax, and our major carriers are already collecting such a tax at the present

November 25, 1969
Excise Tax Act
time on flights in the United States which attract the United States ad valorem tax.
The hon. member for Waterloo (Mr. Salts-man) began by saying that the proposed tax is not businesslike and that it represents, in effect, a subsidy to business. However, the hon. member for Edmonton West said the tax would impose an unfair burden on business. Well, both these hon. gentlemen cannot be right. It would appear that as usual the proposal of the government strikes a fair balance between these two extremes in a way which is not adverse to the interest of any segment of Canadian society.
One or two hon. members referred to the impact of this tax on charter flights and suggested it would make things difficult for people who had saved up for many years to take such flights. I would point out that most of the charter flights of which I am aware go to overseas points and, as I indicated earlier, flights to overseas points would attract not an ad valorem tax but a flat tax which, if applicable, would be calculated on the basis of the number of seats in the aircraft. I believe I mentioned that the flat tax would initially be at the rate of $5 for each ticket sold, with authority being given to the Governor in Council, if Parliament agrees, to reduce this to a lower amount. The reason Parliament is being asked to give the Governor in Council authority to reduce the tax is that at the present time the United States does not impose a tax on overseas flights although there is a bill pending before Congress which would not only increase the ad valorem tax from 5 per cent to 8 per cent but would create a flat tax on overseas flights in an amount of approximately $3.
Obviously, if the United States Congress passes a bill along the lines I have outlined it will be necessary for Canada to make appropriate adjustments in the tax on overseas flights from Canada, otherwise passengers will be encouraged to purchase tickets in the United States rather than in Canada.
I return to some of the remarks made by the hon. member for Waterloo in case there is some misunderstanding on this point. Contrary to what he has suggested, the proposed tax would not go to pay for the running of Air Canada; the proceeds would be used, rather, for maintaining airports and air transportation facilities and to assist in defraying the cost of there expansion which is presently being carried out by the Department of Transport.

While the hon. member made some interesting comments about national airline policy, the question of whether it is desirable to have one, two, or more airlines which are national in scope is not really before us at this time. I might add, however, without passing judgment on what the policy should be, that it is my understanding that since Canadian Pacific is a private firm it does pay taxes to the federal government, probably at the top corporate rate of 50 per cent. So to the extent it makes profits the federal government and the federal taxpayer generally share in them to the extent of 50 per cent. It would seem to me that the growth of air traffic will require the expansion of air transportation facilities no matter how many airlines national in scope we possess. Whether there is one, two or three, the traffic generated will have to be handled.

The hon. member for Bellechasse (Mr. Lambert) has asked for information on the revenue this new tax would bring in. As I have mentioned earlier, I believe this will be around $20 million.
The same member has also asked to explain the purpose of this new tax. If we look once again at the budget speech made by the Minister of Finance (Mr. Benson) on Tuesday, June 3, 1969, we find that the minister said, and 1 quote:
A further measure of budgetary significance arises out of a general policy to ask those who benefit directly from services or facilities provided by the government to pay charges more in line with the direct costs involved.
Speaking about costs, he said, and I quote:
-our expenditures on the construction, equipment, operation and maintenance of airports and other air transport facilities are now very large.
It is with these aims in mind that I am asking the support of the House to levy this new tax.
The hon. member spoke in a very interesting manner of using the Bank of Canada to grant the necessary credits.
It is indeed on interesting possibility but I suggest that it is not the time, when we are discussing the budgetary resolutions adopted on June 3 to amend the present financial policy. I am sure that we shall have other opportunities to discuss the rather interesting financial policy of the Ralliement creditiste.
November 25, 1969

[DOT] (9:50 p.m.)

Might I also try to clear up a couple of other points raised by hon. members. I thought it was clear from my explanatory remarks-I regret if it was not-that my understanding was that this tax will not be imposed on air freight. Neither will the tax be imposed on charter flights on aircraft with a load less than 18,000 pounds. Other categories of flights are also not subject to the tax, but I will give further details during the committee of the whole stage.
These exceptions will, I think, effectively answer many of the points made by hon. members who expressed concern about the possible impact of the tax on those living in isolated areas. Such exemptions from the impact of the tax will remove many of the fears hon. members seem to have. I would be happy to attempt to answer in greater detail some of the more specific points raised by hon. members,, in due course. However, at this time the House might be willing to give its support to the bill on second reading.


The Acting Speaker (Mr. Bechard):: Is it the
pleasure of the House to adopt the said motion?


Some hon. Members:: On division.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Bechard in the chair.
Albert Béchard: Order. House in committee of the whole on Bill C-155, an act to amend the Excise Tax Act. Shall clause 1 carry?
On clause 1-Definitions.


Marcel Joseph Aimé Lambert: Mr. Chairman, I think the Minister without Portfolio just made a valiant effort to get this clause carried. However, I would point out that clause 1 of the bill extends to some eight pages and covers something like 12 new sections. In fact, it is really Part II, the operative part in the bill. My suggestion, in the interest of a more orderly discussion of this matter, would be that we discuss the numbered sections of the act, starting with proposed section 8, then section 9, and all the way through to section 19, before ultimately making a decision on clause 1. This will assist, shall I say, the continuity and regularity of our discussion in committee.
I should like to deal with the arguments raised by the minister in his reply on second

Proceedings on Adjournment Motion reading and discuss them with my colleagues when we reach the appropriate place. I hope that this procedure will be followed, and I wonder whether the minister could indicate whether this course is satisfactory to him. I suggest instead of ranging from one end of the clause to the other we take the proposed amendments seriatim. Then when we have dealt with them we will decide on clause 1.


Herbert Eser (Herb) Gray: Mr. Chairman, perhaps I have misunderstood my hon. friend. Is he referring to clause 2? I think his remarks are actually directed to clause 2.


Marcel Joseph Aimé Lambert: No, Mr. Chairman, to clause 1, which introduces a new Part II to the act. I suggest we deal with each proposed new section, starting at 8 and continuing to section 19, and then we will come to a decision on clause 1. I am not suggesting we decide on each proposed section. On that basis may I call it 10 o'clock?


Albert Béchard: Order. It being 10 o'clock shall I rise, report progress, and request leave to sit again at the next sitting of the House?


Some hon. Members:: Agreed.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, on November 17 I endeavoured to ask a question of the Minister of Public Works (Mr. Laing) which related to federal buildings, and co-operation in the construction of other buildings, in the city of Vancouver. Being unable to ask the question at that time, I had hoped to get some information this evening. Although this question has now been postponed on two occasions at the request of the minister, I fail to see him in his place this evening even though he promised he would definitely be in attendance.
About four years ago the government made extensive plans to co-operate and participate in what is known as Project 200 in the city of Vancouver. It also had plans of its own to
November 25. 1969
1246	COMMONS
Proceedings on Adjournment Motion pull down an existing federal building, the old post office, as well as the old Winch building. It is disgraceful, I know, to tear down a "winch" building, but I suppose it had to go.
Nothing has been heard of those plans during the last two years. My understanding was that as far as the new federal building was concerned, it was to be a three-tower project with the preliminary construction starting in 1970, the second stage in 1972 and the final stage in 1974. As I have said, nothing as been heard of the project, of the federal building, or of the government's policy of cooperation in Project 200.
[DOT] (10:00 p.m.)
I assume the reason we have not heard anything about it is the austerity program of the government. However, I am asking the question now about the plans for Vancouver because the austerity construction program for Hull and Ottawa seems to have been lifted; it seems to have completely gone by the board. We hear of millions of dollars in new construction to proceed in Hull and Ottawa. That being the case, we should like some information on whether the austerity program has been lifted in Vancouver, whether there are any definite plans to proceed on schedule with the construction of a new federal building for Vancouver, and whether there is any idea of continuing the policy adopted four years ago, that of almost rebuilding downtown Vancouver.
When I first asked this question the other day it was said it could not be answered because I could not ask a specific question about my own constituency. The location of this property is not my own constituency. This area is in the constituency of Vancouver Centre, represented by the hon. Minister of Consumer and Corporate Affairs (Mr. Bas-ford). The situation now is that from Vancouver we have the present Minister of Public Works, the Minister of Consumer and Corporate Affairs, who should be vitally concerned and interested in this matter because it is in his constituency, and the Minister of Fisheries (Mr. Davis) who represents a riding directly across the bay from this downtown development. I sincerely hope that their influence and interest in Vancouver, together with my own, will achieve some result and that the Minister of Public Works can this evening give us definite and specific information in this regard, proving to us that the austerity program has been lifted in Vancouver as well as in Ottawa and Hull and that there is no discrimination.


Hon. Arthur Laing (Minister of Public Works):: Mr. Speaker, I am most happy that my fellow citizen from Vancouver has brought this matter before the House. We find there are in greater Vancouver today some 6,000 federal civil servants. We have been assessing the requirement for them to be in the centre of the city. We have decided that because of the interests of the public in certain departments, about 2,400 would be required to be in the very busy centre core of the city.
We have decided that the balance, including a number in laboratories and the like, could be located in less dense areas where transportation might be better and where the land values are not so high. As my hon. friend knows, that particular area bounded by Granville Street, Hastings Street, Howe Street and Cordova Street contains probably the highest priced land in the city of Vancouver. We are at the present time working on a preliminary study of the requirements for a federal building in Vancouver. I know my friend will be glad to hear that.
At the present time these people are housed in eight old federal buildings in Vancouver, and 21 leased buildings. My hon. friend might agree with me, as most Vancouver members will, that some of the accommodation there is of a type that means the morale and efficiency of civil servants cannot be of the best. We are therefore proceeding as rapidly as possible and I intend to make an announcement fairly soon.
My hon. friend referred to Project 200. Because of the critical area in which we are located, making it necessary to obtain clear access from Granville Street and Howe street, it is our intention to keep everyone apprised of what we are doing co-operatively in respect of proper access levels. We want to be a good landlord within the centre of the city, and therefore have over a period of years had discussions with the mayor, city councillors and planners. The mayor and his councillor have indicated to us that they would prefer us to go on the east side of Granville Street for a variety of reasons which my hon. friend can appreciate. It is our intention to continue these discussions and to co-operate with Vancouver in every respect.
I think this is about all I have to say on the subject at present. We will proceed as rapidly as we can. I want to make the point that not only in Vancouver but in other parts of Canada it is imperative that the national government have a national presence, and I
November 25, 1969	COMMONS
intend to see what we can do in Vancouver. We intend to construct a building there of such a standard that the national government will have a reasonable and indeed a reasonable-plus presence.



NATIONAL REVENUE-DELAY IN FEDERAL SALES TAX AUDITS OF COMPANIES

Alfred Dryden Hales: Mr. Speaker, on November 19, I asked the Minister of National Revenue (Mr. Cote) the following question:
In view of the fact that federal sales auditors have not made annual inspections or audits of many Canadian companies, for up to as long as four or five years, and that in many cases when they do these audits they reassess the companies for thousands of dollars in taxes, what steps is the minister taking to overcome this problem and to make sure that there will be more frequent and regular inspections?
This question was not acceptable at the time, so in the few minutes that are available to me tonight I should like to put forth the following problems. The reason for the question was that I have received several letters from small and large companies which have not had government sales tax auditors on their premises for as long as four or five years. I have had two specific cases brought to my attention, one of a small company which had not seen a federal auditor for four years and seven months, following which they were presented with a bill for $3,419.95 which was due for sales which had been exempted from tax in error. You might say this relates only to small companies, but that is not so. Another very large company, which had not seen a government sales tax auditor for four years, was presented with a bill for $80,000. This amount is not peanuts; it is a very large bill to present to any company, large or small, particularly when they cannot go back and bill their customers. I know the minister will probably say that owing to the austerity program there is not sufficient manpower to make these audits more frequently; but one of these cases occurred three or four years ago, before the austerity program was put into force.
The problem is accentuated by the fact that the department does not send out notices or information to companies in a clear and legible way. They send them out, but do not use plain, ordinary English or plain, ordinary French, whatever the case may be, so that the operators of the companies can understand the regulations and keep their books according to the wishes of the department. I do not think there is any doubt that the inspections
DEBATES	1247
Proceedings on Adjournment Motion should be made more frequently. I realize that the companies are responsible for collecting these taxes, but in many cases there are very difficult decisions to be made, namely is it taxable or is it not.
[DOT] (10:10 p.m.)
I know the Department of National Revenue re-organized their whole set up a few years ago. They decentralized. This was in order to give better service. But from talking to my constituents I have found the experience has been that the service is not as good as it used to be.
I do not like to criticize the department without offering some constructive criticism. I think it is high time the government started to collect all tax moneys through one department and had one auditor make the complete audit of a business firm or taxpayer. Why should a man in business have to get out all his books for the sales tax collector, and then a few months or a year afterwards have another inspector arrive from the Income Tax Department and he has to bring out all his books again? The unemployment insurance auditor is the third fellow who comes around, and then we have the Canada Pension Plan auditor coming on the scene as well.
Why could we not have one auditor from the Department of National Revenue to audit all the books on one trip and thus cut down on the cost of the operation? It is very difficult for a man in business to produce invoices that go back four or five years, yet he has to dig up all these invoices. It is a tremendous job and a costly one, and it is only necessary because the government does not conduct audits with the frequency to which a man in business, be he large or small, is entitled.


Arthur Laing: Mr. Speaker, I desire, on behalf of the Minister of National Revenue (Mr. Cote), to give this answer. In reply to the question raised by the hon. member for Wellington (Mr. Hales) concerning the possibility of conducting audits for sales tax purposes more frequently than is now the practice, the following are some of the factors which inhibit any change in our present policy in this area.
At the present time we have some 58,000 persons or firms licensed under the Excise Tax Act and experience has shown that the average time expended in conducting an audit of a licensee's records is 2.15 days. Our staff of operational auditors across Canada numbers approximately 265. Apart from the difficulties of acquiring and training staff
1248	COMMONS
Proceedings on Adjournment Motion there is the necessity to see that those employed are applying themselves to those accounts which are most complex because of the variety and volume of their output.
The risk to the revenue by reason of faulty application of the law is of course greater than in other more simple operations. On this basis we therefore use the manpower resources available to us to the greatest advantage, for we have programmed our audits on the basis of a two, three and four year cycle depending on the complexity of the operation involved and the past assessment history of the licensee concerned, which we have found to have worked quite well.
Every step, of course, is taken to help the taxpayer. Our auditors meet with new licensees at the earliest moment after they have started in business. This is usually around the sixth month of their operations. They are then assisted in solving any tax problems they have or may foresee. A check is made to see that they are receiving all the published information issued by the department for their guidance, and they are invited to communicate with our officials at any time they might have any questions to ask. With our regional set-up, more expertise is available to them within shorter distances. On the average we conduct the greater part of our audits within 24 to 30 months.
The only way in which we could meet the suggestion of the hon. member as to annual audits be conducted, would be by more than doubling the number of auditors in our work force. This would be contrary to government policy and we are convinced that it would not be justified on a cost-benefit basis as our experience has shown that approximately 54 per cent of the audits conducted result in no assessment whatever. If we were to attempt to conduct audits every year with our present audit staff, I feel certain that the examination would be a hit-and-miss affair and accordingly not very meaningful in the light of established priorities.
I would like to assure the hon. member that we are working continually to improve our audit program in order to provide the best service possible consistent with the limits of our financial and manpower resources. I might further explain that there is no statutory provision requiring us to audit a licensee's record at any stated interval, and by the same token there is no authority in the Excise Tax Act whereby retroactive assessments may be waived. None the less, our continual objective is to keep retroactive assessments at a minimum.
DEBATES	November 25. 1969



VIOLENT DISTURBANCES-MONTREAL- BOMBING AT LOYOLA COLLEGE-INCREASED CO-OPERATION BY R.C.M.P.

Mr. Warren Allmand (Noire-Dame-de-Grace):: Mr. Speaker, last Friday, November 21, I asked the Acting Prime Minister if he would contact the Mayor of Montreal and the Premier of Quebec to inquire if anything more could be done by the federal government, including the R.C.M.P., to prevent further terrorist bombings in Montreal. My question followed the bombing at Loyola College on Thursday, November 20, when a powerful bomb exploded in a classroom building while 400 evening students were in class.
The same week in Montreal a bomb was placed in the home of the Deputy Mayor of St. Michel. These were only the most recent of a long series of bombings in Montreal. Since I did not get any real commitment for action at that time, I decided to raise the question for debate at the time of adjournment.
While the citizens of Montreal have been seriously concerned for some time, the incident last Thursday gave them new cause for alarm. A few weeks previous to the bombing, Michel Chartrand, a union leader in Montreal, told a public meeting that if Quebec Bill 63 should become law there would be a new wave of violence in Quebec. Bill 63 passed on Thursday evening and the bomb at Loyola exploded the same night. While there may be no connection between the statement by Mr. Chartrand and the bombing at Loyola, the innocent public of Montreal wonder whether there will be more bombs and whether their lives and the lives of their children are in danger. If the students at Loyola last Thursday had been in the corridor when the bomb went off, scores of them would have been killed. Luckily, they were all in their classrooms at the time.
Mr. Speaker, I am not an alarmist, but with many others in Montreal I am beginning to wonder whether we have to wait until innocent people are killed before the efforts of the police forces at all levels are intensified. Even though Mr. Chartrand is not directly connected with the bombing at Loyola, are we to tolerate a society where leaders in the community can make threats of violence with apparent impunity and thereby encourage terrorism? I hope that people who are not satisfied with Bill 63, among other things, in Quebec realize that violence is counter-production and in the long run will destroy everything.

November 25, 19G9

In tonight's Star there is an article which says that Lucien Saulnier, the chairman of the executive committee, will be in Ottawa later this week and that one of the subjects he may take up with the federal government is a request for assistance for Montreal police in their battle against terrorism. The article says in part:
A request for assistance for Montreal police in their fight against terrorism in the city could be made in Ottawa later this week by Executive Committee Chairman Lucien Saulnier.
The executive committee is curently reviewing the role of the municipal police in combating terrorist activity. Members are understood to feel that the city police should not have to bear the brunt of the battle and that the city should not have to pick up the entire tab.
Then it states:
The co-operation of the R.C.M.P. and the Quebec Provincial Police with the municipal police in fighting the different groups of terrorists active in the city...is of doubtful benefit in the minds of many senior officers.
Off the record, officers of all three forces will admit that the "co-operation" is far from "total and complete".
Mr. Speaker, without criticizing any one officer, because probably a lot of the men in the police forces are working very hard on this matter, I say without criticism of what has been done that we must intensify our efforts to prevent and deter further bombings and also to discover those persons responsible for the bombings that have already taken place. I hope the government at the federal level will do everything possible to assist the provincial and municipal governments in this task, and I hope I will get a commitment to that effect from the minister and the government.


Hon. G. J. Mcllraith (Solicitor General):: Mr. Speaker, I share, as I am sure all hon. members do, the concern of the hon. member
Proceedings on Adjournment Motion about the bombings and related acts of violence taking place in a wholly abnormal way in the city of Montreal. However, the facts are that the federal police force authority and those responsible for it are co-operating fully with the municipal and provincial police forces. This co-operation is not an academic exercise; it is worked out in a carefully organized way among the police forces having the responsibility for dealing with this matter. Mr. Speaker, I thought I gave that assurance last Friday when the question was asked and I went on to say:
-I want to emphasize very strongly that there is very close working co-operation between the Royal Canadian Mounted Police, the Quebec Provincial Police and the city of Montreal police in these matters, and in this particular instance there is. of course, that kind of co-operation.
[DOT] (10:20 p.m.)
I was referring to the Loyola incident. It is quite true that the initial or prime responsibility lies with the local authorities; but in addition to offering co-operation we have offered every assistance possible. I know of no request for any assistance that has not been granted, and I know of no way of bringing additional assistance, at the moment. We will continue to co-operate fully with the respective authorities in trying to deal with this problem and, in addition, give them all the assistance we can. That is the way the matter stands.
As to the report in the newspaper tonight- I assume the hon. member was referring to the Montreal Star and not to the Toronto Star-I can only say that I have not seen that report and do not wish to comment on it. It was written by a reporter and may or may not be correct in any detail. I shall look at the article and see if anything in it warrants attention, but I would prefer not to comment specifically on it in an offhand way.
Motion agreed to and the House adjourned at 10.25 p.m.

					
					
					
					
					






Wednesday, November 26, 1969